frequently less complex and with narrower policy implications than are often involved in rule making, present in many cases difficult questions of law and policy. The determination of whether an industry-wide trade practice violates the Federal Trade Commission Act, or whether a certain series of stock market transactions constitute unlawful manipulation, often involves important and difficult issues. In determining such issues, agency heads have consulted with their principal advisers and specialists. Indeed, it is clearly in the public interest that they continue to do so. Section 5 (c) does not purport to isolate the agency heads from their staffs. Rather, in the interest of fair procedure, it merely excludes from any such participation in the decision of a case those employees of the agency who have had such previous participation in an adversary capacity in that or a factually related case that they may be "disabled from bringing to its decision that dispassionate judgment which Anglo-American tradition demands of officials who decide questions". Final Report, p. 56.

An agency officer or employee may not participate or advise in the decision, recommended decision, or agency review of an examiner's initial decision if in that or a factually related case he performed investigative or prosecuting functions. For example, if the agency's general counsel or chief accountant engages in the performance of investigative or prosecuting functions in a case, he becomes unavailable to the agency for consultation on the decision of that or a factually related case. Of course, he could always present his views as witness or counsel in the public proceedings, including the filing of briefs.

Assuming that an agency will in many cases wish to consult with certain of its staff members, it may proceed in one of two ways. It may in a particular case consult with staff members who in fact have not performed investigative or prosecuting functions in that or a factually related case. In the alternative, the agency may find it feasible so to organize its staff assignments that the staff members whom it most frequently desires to consult will be free of all investigative and prosecuting functions. The latter method appears to offer two distinct advantages, particularly where the agency has a considerable volume of cases subject to section 5(c).

First, using the agency's general counsel for an example: If

the investigation and prosecution of adjudicatory cases are performed by the legal division under his supervision, it could be argued that his personal consideration of the routine cases has been so limited that he should be permitted to advise the agency in the decision of such cases. Even assuming that this is permitted by section 5 (c), it would seem to be immaterial since his counsel will not be particularly needed in the routine cases. It is in the difficult and novel cases that the agency most needs his advice, and it is in these cases that he is most likely to be consulted extensively by his subordinates. Thus, he becomes unavailable to advise the agency in the very cases in which his advice would be most useful. On the other hand, if the agency so organizes its staff that the general counsel is not responsible for the investigative and prosecuting functions, he would be regularly available to the agency for consultation on the decision of cases.8

Second, if an agency thus organizes its staff and, accordingly, identifies the officers with whom it is free to consult in the decision of cases subject to section 5(c), these matters can be spelled out in the agency's published rules of procedure. Such publication would, in effect, inform the public of the identity (by title or group) of the staff members who advise in the decision of such cases. In any litigation on the issue of compliance with section 5 (c), the published rules, embodying an organization and division of functions in the light of section 5(c), would assist in establishing proof of compliance with the separation of functions requirements.

The last sentence of section 5 (c) sets forth certain exemptions from the requirements of the subsection. These have already been discussed, except the provision that "nor shall it be applicable in any manner to the agency or any member or members of the body comprising the agency". It was pointed out that this exemption "of the agency itself or the members of the board who comprise it is required by the very nature of administrative agencies, where the same authority is responsible for both the investigationprosecution and the hearing and decision of cases". Sen. Rep. p. 18; H.R. Rep. p. 30 (Sen. Doc. pp. 204, 262). Thus, if a member of the Interstate Commerce Commission actively participates in or directs the investigation of an adjudicatory case, he will not be precluded from participating with his colleagues in the decision of that case. Sen. Rep. p. 41 (Sen. Doc. p. 227).

8 The general counsel's participation in rule making and in court litigation would be entirely compatible with his role in advising the agency in the decision of adjudicatory cases subject to section 5(c).

SECTION 5(d)—DECLARATORY ORDERS

Section 5(d) provides that "The agency is authorized in its sound discretion, with like effect as in the case of other orders, to issue a declaratory order to terminate a controversy or remove uncertainty." The purpose of section 5(d), like that of the Declaratory Judgment Act (28 U.S.C. 400), is to develop predictability in the law by authorizing binding determinations "which dispose of legal controversies without the necessity of any party's acting at his peril upon his own view". Final Report, p. 30.

This grant of authority to the agencies to issue declaratory orders is limited by the introductory clause of section 5 so that such declaratory orders are authorized only with respect to matters which are required by statute to be determined "on the record after opportunity for an agency hearing". In addition, if the subject matter falls within one of the numbered exceptions in the introductory clause of section 5, such as a matter in which an agency is acting as an agent for a court, section 5(d) does not apply. Sen. Rep. p. 18; H.R. Rep. p. 31 (Sen. Doc. pp. 204, 263). For example, where an agency is authorized after hearing to issue orders to cease and desist from specified illegal conduct, it may, under section 5(d), if it otherwise has jurisdiction, issue a declaratory order declaring whether or not specified facts constitute illegal conduct. On the other hand, while the Securities and Exchange Commission has long issued informal advisory interpretations through its principal officers as to whether a proposed issue of securities would be exempt from the registration requirements of the Securities Act, there is no statutory agency hearing procedure in which this question can be determined; if securities are sold without registration and the Commission believes that registration was required, it can only institute civil or criminal proceedings. Accordingly, section 5(d) does not authorize the Commission to issue declaratory orders as to whether particular securities must be registered under the Securities Act.9

Agencies are authorized in their "sound discretion" to issue declaratory orders. They are not required to issue such orders merely because request is made therefor. Sen. Rep. p. 18; H.R. Rep. p. 31 (Sen. Doc. pp. 204, 263). By "sound dis

9 Of course, this does not affect the Securities and Exchange Commission's advisory service described above.

cretion", it is meant that agencies shall issue declaratory orders only under such circumstances that both the public interest and the interest of the party are protected. Thus, "a necessary condition of its [declaratory order] ready use is that it be employed only in situations where the critical facts can be explicity stated, without possibility that subsequent events will alter them. This is necessary to avoid later litigation concerning the applicability of a declaratory ruling which an agency may seek to disregard because, in its opinion, the facts to which it related have changed". Final Report, p. 32. Again, since the issuance of declaratory orders is a matter of sound discretion, it is clear that an agency need not issue such orders where it appears that the questions involved will be determined in a pending administrative or judicial proceeding, or where there is available some other statutory proceeding which will be more appropriate or effective under the circumstances. More broadly, it appears that "The administrative issuance of declaratory orders would be governed by the same basic principles that govern declaratory judgments in the courts." Sen. Rep. p. 18; H.R. Rep. p. 31 (Sen. Doc. pp. 204, 263).

V

SECTION 6-ANCILLARY MATTERS

Section 6 defines various procedural rights of private parties which may be incidental to rule making, adjudication, or the exercise of any other agency authority. The introductory words of section 6, "Except as otherwise provided in this Act," are intended to assure that its provisions do not override contrary provisions in other parts of the act. Thus, the opportunity for informal appearance contemplated by section 6 (a) is not to be construed so as to authorize ex parte conferences during formal proceedings when such conferences are forbidden by other sections of the act. Sen. Rep. p. 18, H.R. Rep. p. 31 (Sen. Doc. pp. 204, 263).

Governing Definitions. The provisions of section 6 hinge to a considerable extent upon the definition of the terms "party", "person" and "agency proceeding". These terms are defined in section 2 of the act as follows:

(b) "Person" includes individuals, partnerships, corporations, associations, or public or private organizations of any character other than agencies. "Party" includes any person or agency named or admitted as a party, or properly seeking and entitled as of right to be admitted as a party, in any agency proceeding; but nothing herein shall be construed to prevent an agency from admitting any person or agency as a party for limited purposes.

(g) "Agency proceeding" means any agency process as defined in subsections (c), (d), and (e) of this section. [Defining rule making, adjudication and licensing, respectively.]

SECTION 6(a)—APPEARANCE

Formal Appearance. The first sentence of section 6(a) provides that "Any person compelled to appear in person before any agency or representative thereof shall be accorded the right to be accompanied, represented, and advised by counsel or, if permitted by the agency, by other qualified representative." This restates existing law and practice that persons compelled to appear in person before an agency or its representative must be accorded the right to be accompanied by counsel and to consult with or be advised by such counsel. Such persons are also entitled to have counsel act as their spokesmen in argument and where otherwise appropriate. Senate Comparative Print of June 1945, p. 10 (Sen. Doc. p. 26). It is clear, of course, that this provision relates only to persons whose appearance is compelled or commanded, and does not extend to persons who appear volun