Analysis of cases in which findings and orders were issued subsequent to enactment of Wheeler-Lea Act, involving food, drugs, therapeutic devices, and cosmetics, showing manner of disposition and court's disposition of those appealed

Total number of cases.

Number disposed of on admission answers.

Number disposed of on stipulations as to the facts_

Number disposed of on admission answers and stipulations

as to the facts_

Number disposed of by trial..

462.

180, or 39 percent.

97, or 21 percent.

277, or 60 percent.

185, or 40 percent.

Number disposed of by trial which were not appealed.

141, or 76 percent.

Number of formal complaints dismissed or closed by the
Commission

58.

(Thereupon, at 11:55 a. m., Wednesday, February 27, 1946, the committee recessed until 10 a. m., Thursday, February 28, 1946.)

AMEND FEDERAL TRADE COMMISSION ACT

THURSDAY, FEBRUARY 28, 1946

HOUSE OF REPRESENTATIVES,

COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE,

Washington, D. C.

The subcommittee reconvened at 10 a. m., Hon. George G. Sadowski, chairman of the subcommittee, presiding.

Mr. SADOWSKI. The subcommittee will come to order.

STATEMENT OF WALTER B. WOODEN, ASSISTANT CHIEF COUNSEL, FEDERAL TRADE COMMISSION

Mr. SADOWSKI. Will you state your name and the organization you represent.

Mr. WOODEN. My name is Walter B. Wooden. I am one of the assistant chief counsel of the Federal Trade Commission, and have held that position since 1939.

During that time I have been in charge of the Commission's trial work, having to do primarily with combinations in restraint of trade, price-fixing cases, basing-point cases, and violations of the price discrimination sections and other sections of the Robinson-Patman Act. In that connection, I have handled a number of such cases before the appellate courts.

Several months ago I was placed in charge of all of the appellate work of the Commission.

Prior to 1939 I had been an attorney on the staff of the Commission, ever since the Commission was formed in 1915.

Mr. Kelley pointed out to the committee yesterday that the necessary implication of any suggestion that the Commission decides its factual issues upon any basis other than that of the preponderance of the evidence was that the Commission was not intellectually honest in reaching those decisions. I want to call the committee's attention in that connection, to a particular case which illustrates how the Commission goes about reaching its conclusions on the facts.

This was a case that was decided on May 3, 1944, and is known as the Listerine case, Docket 4232. Only four Commissioners participated in that decision, Judge Davis being absent on account of illness, but there were four opinions, three of which united in dismissing the

case.

In the concurring opinion of Commissioner Ferguson, he said, and I quote:

It is the duty of the Commission to decide issues of fact, whether or not medical or scientific questions are involved, by the greater weight of the evidence, the burden of proof being on the Commission,

Commissioner March, in his concurring opinion, concluded that, and I quote:

The allegations in the complaint are not sustained by the greater weight of the evidence.

Commissioner Freer also made a very detailed analysis of the evidence, pro and con, in his concurring opinion.

Commissioner Ayres, however, dissented from the majority as to what the weight of the evidence was in the case, and after he had analyzed it in detail.

I call this case to the committee's attention, because it affirmatively shows that the Commission does act upon the weight and the preponderance of the evidence. And that was a case that came up before this bill was introduced. That case emphasizes and it illustrates the obvious fact that it is impossible for the several Commissioners to apply any rule other than that of the preponderating evidence without automatically questioning the good faith with which they acted in reaching their several conclusions.

Mr. REECE. May I interrupt, if the interruption does not disturb you?

Does the law require the preponderance of the evidence rule to be followed?

Mr. WOODEN. The law of good faith requires it, and it is implicit in any trial tribunal. Whether it is required by statute or not, it is there and must be there unless you are willing to question the good faith of the tribunal in reaching its conclusion on the preponderance of the evidence.

Mr. REECE. But in the event a defedant felt that the preponderance rule had not been followed, would he have a right to appeal to the court for a determination of that question?

Mr. WOODEN. Of the preponderance? Not under the statute as it now stands. And it is to be the burden of my statement that that should remain as it is.

Mr. REECE. That would seem to me to be really the important consideration involved in connection with this part of the bill.

Mr. WOODEN. It is.

Com

Mr. REECE. There is frequently a difference of opinion among missioners, a difference of opinion among the judges on the bench, and, however conscientiously and capably a tribunal, commission, or judicial body, may undertake to adjudicate the questions at issue, the defendant, or litigant, may feel aggrieved, and he may have great interests involved; and concurrently, a public interest may be involved and what seems to me to be important in connection with the consideration of this bill, not so much the maner in which the Commission adjudicates and reaches its decision but whether the defendant or litigant, if he should feel aggrieved or feel his interests had been prejudiced, that he would have some right of appeal to the court for the determination of the issues involved in the case.

Mr. WOODEN. He has now the right of appeal, the same kind of appellate right that a defendant has from a jury verdict.

It seems to me very logical that if the verdict of a jury, supported by substantial evidence, is binding on the Appellate Court, that the verdict of a special agency, experienced and expert, should be given the same status.

Mr. REECE. Might not this differeence enter into the two cases: a jury hears the witnesses and sees the witnesses. The judge presides over the case. The judge and jury are enabled to evaluate the personal reactions and the probity of the evidence, whereas in a proceeding before the Commission, the evidence is taken by an examiner, so that the case comes before the Commission on brief and arguments so that the Commission does not have opportunity that the jury and the original trial judge have in a case of evaluating the witnesses and evidence by personal observation. In a measure the Commisison is sitting, we should not say as an appellate agency, but as an agency which is reaching a determination from the record itself and not from the evidence given in person by the witnesses.

I would like your reaction on that.

Mr. WOODEN. You have a similar situation where questions are referred to a master by the court, and the court does not see the witnesses there and has to pass judgment upon the record.

Mr. O'HARA. That is the unusual rather than the usual trial of civil matters.

Mr. WOODEN. I would not say that it is so very unusual, not very rare at all. Provision is made for it in the rules of civil procedure, but, not only that, the findings of the master on questions of fact are, by the rules, made conclusive unless they are clearly erroneous.

Mr. REECE. What would be the injury or danger of harm that might be wrought by providing, or making possible, an appeal to the courts in the event the litigant felt that an error or mistake had been made?

Mr. WOODEN. Well, it would simply give the litigants a second trial on the same record that he had before, and it would put the Federal Trade Commission through the same experience and cycle of experience that the Interstate Commerce Commission went through 30 or 40 years ago. That is just what happened to it, because the courts undertook to substitute their judgment on the facts for those of the Interstate Commerce Commission.

And it seems to me that when the Congress has conferred upon this Commission the functions that it has, and the powers that it has, that to adopt this preponderance rule is to simply say, "We do not trust you to follow the preponderance rule in the trial of your cases, and so we are going to give the courts a veto power to see whether you have actually decided according to the preponderance of the evidence, and not according to substantial evidence."

Some of these things are anticipatory of things that I expect to treat in my prepared statement.

Mr. O'HARA. I would like to ask a couple of questions, if you please. Is it actually true that in the appeal from these cases from the Commission that you are in the same position that you are in a trial of a jury case, so far as the record is concerned?.

Mr. WOODEN. Well, there is not any doubt that the Commissioners do not see the witnesses as they testify. That is very plain. There is that difference, but, after all, it is a question of balancing the pros and cons of a situation like this. And if the Congress wants the Commission to do the job of showing what the facts are, and finding what the facts are, it is not possible, humanly possible, for the Commissioners to hear every witness testifying in every case. There is some give-and-take in this proposition. You cannot find perfection. If