am afraid, our time, to a greatly undue extent to this sort of proceeding and neglect our duties as circuit courts of appeals.

As I said to you the other day, the Congress under the Judicature Act of 1925 and under most of the statutes which relate to the commissions and administrative agencies has made the circuit courts of appeals courts of last resort in the Federal system, except for those few cases which go on to the Supreme Court on writs of certiorari.

It is not within the proper function or within the facilities of a circcuit court of appeals to hold a trial. It is a court of review, and not a trial court. It has no facilities for witnesses; it has no court reporters; it is not in a position to hold trials; and it could not do so without interrupting its own work which the Congress has placed upon it, its own responsibility as a review tribunal, unduly.

The hearings which the Administrator must hold under this proposed act would undoubtedly take an extensive amount of time; the hearing of expert witnesses-pharmacists, toxicologists, and the liketakes time, and if we are required to repeat that procedure in the circuit court of appeals I feel that our function would be dislodged as a reviewing tribunal.

It the statute does not mean to require a de novo trial in the sense in which I have just been speaking, but merely requires a review on the record with a finding of substantial evidence on the whole record necessary to support the order of the Administrator, then the provision is redundant and unnecessary, because the Administrative Procedures Act itself requires that of a reviewing court.

That is the burden of the message of the conference to this committee. But we thought perhaps we should refer briefly to one or two other aspects of the bill which are of a procedural character and relate to the business of the court, for what benefit it may be to the committee and its counsel.

We point out that the requirements of subsections 701 (f) and (g) as referred to in the bill, that is, the requirements for appeal, seem to be inconsistent with the hearing requirements of the bill itself. This appellate review provision refers to the provisions of subsections 701 (f) and (g) and says that the appeal shall be in accordance with those provisions and also a trial de novo.

As I said earlier, 701 (f) and (g), together with (e), which must be read in reference to (f) and (g) requires a hearing, the taking of evidence, the making of a record, and the filing of findings of fact. They contemplate a formal hearing by the Administrator.

But the bill itself, in its own provisions with respect to hearings, does not seem to do that. It simply provides in broad terms for a public hearing before the Administrator for interested parties. The requirements of the bill itself, to the extent that they define hearings, seem to be inconsistent with the provision of the appellate section, because that section contemplates a different kind of hearing than the terms of the bill contemplate. If the bill should be amended so as to require the making of a record and findings of fact, then the de novo requirement would be unnecessary, because it would call for a repetition of the hearing before the Administrator. De novo means without reference to what went before, in the usual sense of the term. If the Congress should see fit to amend the bill to require the making of a record and the findings of fact, then it ought not require a de novo hearing in the usual sense, because that would make neces

sary an entirely new hearing and it would require us to ignore the record of the previous hearing.

Also we call your attention to the fact that if the bill be amended to require a record and the making of findings, or if the bill be construed now to require the making of a record or findings, then the de novo provision is unnecessary because again, as I said a moment ago, the Administrative Procedure Act requires a record and findings, and requires review on the whole record, and it requires that findings be supported by substantial evidence.

Also, the Supreme Court in two new decisions, the Universal Camera case and the Pittsburgh case, seems to have renounced, if I may say so, its earlier position that stubstantial evidence on any part of the record, even though isolated from countervailing evidence, is sufficient to support an administrative ruling. It has now laid down the rule for the Supreme Court itself and also for the circuit courts of appeal that there is a responsibility on the part of appellate courts to go over the whole record and to examine all of the evidence rather than isolated portions, so as to find whether on the whole record there is substantial evidence to support the findings of the administrative authority.

It is true, as the previous witness stated, that in earlier decisions of the Supreme Court, it took a different position, so that there was a contracted point of view with respect to review which we in the circuit court of appeals felt frustrated our powers. Under the Administrative Procedure Act and under the new decisions of the Supreme Court, which it has bound itself by, however, we will no longer be frustrated. We will have the right and duty to go over the entire record of the Administrator to see whether there is substantial evidence to support an administrative ruling.

With great respect for the views of the previous speaker, I think the term "substantial evidence" when read in line with a review of the whole record is not a vague term. It has been used in the Federal system for many, many years to guide the appellate division in determining whether or not even the verdict of a jury or a trial judge in a nonjury case should be upheld. It means more than a scintilla. It means substantial evidence in the ordinary meaning of that term, such evidence as would guide persons acting in the ordinary affairs of life.

It is true that in the State courts there was a so-called scintilla rule which forbade the trial judge to set aside the verdict if there was a scintilla of evidence to support the verdict of the jury, but that is not the law in the Federal courts.

The criterion of substantial evidence on review affords adequate protection to litigants, I think, in view of the Administrative Procedure Act and in view of the Universal Camera case, which requires the court to review on the entire record.

I call your attention to just one other point, and then I am finished. The bill seems to contemplate a due process hearing. By its reference to 701 (f) and (g) it seems to contemplate a hearing on a record before the Administrator, with cross-examination of witnesses and direct examination of witnesses, and the making of findings of fact. That is the kind of hearing which is required by the due process clause of the Constitution for adjudicatory action.

The difference between adjudicatory action and rule-making action is well understood by both administrators and the courts. Adjudica

tory action is like the action of a court, which is immediate and particular. It relates to a particular controversy. Rule-making action is like legislation. It is general and looks to the future.

Now, the due process clause requires a due process hearing with witnesses and cross-examination and findings of fact for adjudicatory action. It does not require it for legislative or rule-making action. In the absence of a specific requirement for agency hearing and record, the Administrative Procedure Act itself does not require a due process hearing for rule-making action. It requires merely in section 4 that the interested parties shall be allowed to submit their views and data in writing with or without opportunity for oral presentation. It does contemplate, however, a review in the courts to determine, apparently, whether or not the Administrator has been arbitrary in his action.

If the Congress desires the Administrator to make a record and findings for rule making, the bill should so state, but then it should also omit the de novo trial requirement, because a de novo trial requirement would be a duplication and anomalous for the purpose of a rulemaking hearing.

I have submitted a written statement which I have in effect given you orally. Unless you wish to ask me questions I thank you for letting me appear before you again.

(The statement referred to is as follows:)

STATEMENT BY HON. HAROLD M. STEPHENS, CHIEF JUDGE, UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA

My name is Harold M. Stephens. I am Chief Judge of the United States Court of Appeals for the District of Columbia Circuit, and as such I am a member of the Judicial Conference of the United States consisting of the Chief Justice of the United States and the chief judges of the eleven judicial circuits. The judicial conference, in addition to its responsibility in respect of the fiscal and administrative affairs of the United States courts and its duty to supervise and direct the work of the Director of the Administrative Office, is required by the Congress to make recommendations for legislation respecting the business of the courts (28 U. S. C. § 331).

During the March session of the judicial conference attention was called to a provision of H. R. 3298 affecting the manner of disposition in the United States courts of appeals of appeals from certain orders of the Federal Administrator under the Federal Food, Drug, and Cosmetic Act.

I appear in company with Chief Judge John Biggs, Jr., of the United States Court of Appeals for the Third Circuit to express the views of the members of the judicial conference concerning this provision.

I

The purpose of H. R. 3298 is to provide exemption from certain packaging and labeling requirements of the Federal Food, Drug, and Cosmetic Act.1

The bill further provides, however (commencing in line 9 of page 2), that if the drug is intended for use by man and "(2) has been found by the Administrator, after investigation and opportunity for public hearing, to be unsafe, or ineffective for use without the professional diagnosis or supervision of a practitioner licensed

1 H. R. 3298, a proposed revision of § 503 (b) of the Act, provides, in respect of drugs dispensed by filling or refilling a written or oral prescription of a practitioner licensed by law to administer such drugs, an exemp tion from certain of the packaging and labeling requirements set forth in section 502 of the act. Those provisions of § 502 which will not apply to drugs described in the proposed § 503 (b) are to the effect that a drug in package form will be deemed misbranded if it is not packaged in compliance with required standards, or if it is not prominently labeled with certain required information, including the name and address of the manufacturer, packer, or distributor, a statement of the quantity of the contents, a statement that the contents are habit forming (where such is the case), a designation of the drug by its correct name, and directions for the proper use of the drug.

Those provisions of § 502 which will continue to apply to drugs described in the proposed § 503 (b) are to the effect that a drug will be deemed misbranded if the labeling is false or misleading, if the drug is an imitation of another drug or offered for sale under the name of another drug, or if the drug is represented as composed wholly or partly of insulin or certain anti-biotics which in fact have not been properly certified under regulations promulgated by the Federal Security Administrator.

by law * * *"" the exemption from packaging and labeling requirements shall apply only if the drug is dispensed upon written prescription of a licensed practitioner or upon oral prescription of such a practitioner which is reduced to writing and filed by the pharmacist, or is dispensed by refilling a prescription if such refilling is authorized by the prescriber in the original prescription or by oral order and such order is reduced to writing and filed by the pharmacist. The bill apparently contemplates that the Administrator, acting under the clause (2) quoted, shall promulgate a list of drugs found by him to be unsafe or ineffective for use without the professional diagnosis or supervision of a licensed practitioner. The bill then provides (commencing in line 15 of page 3) that any interested person may file with the Administrator a petition proposing the addition to, or deletion from, the list of drugs thus promulgated; that the Administrator after giving an opportunity for interested persons to present their views on the proposal shall make public his action thereon; and that at any time prior to the thirtieth day after such action is made public any interested person may file objections to the Administrator's action and request and receive a public hearing upon such objections and that thereafter the Administrator shall by order make public his action on the objections.

There then follows in lines 8 to 14 of page 4 of the bill the provision in respect of which this statement is presented. It reads as follows:

"An order so issued by the Administrator may, within ninety days after its issuance, be appealed by any interested person in accordance with the provisions prescribed in section 701 (f) and (g) of this Act, except that an appeal from the Administrator's order issued hereunder shall be in the nature of a trial de novo, without presumptions in favor of either party to such appeal." [Italics supplied]

Section 701 (f) and (g) of the act, together with a related paragraph (e) of the same section, contemplates an appear to the United States Court of Appeals for the circuit in which the appealing person resides or has his principal place of business.

II

The requirement of the bill for a de novo trial in a United States court of appeals imposes a duty unsuited to the function and facilities of the courts of appeals. Such courts have an extremely heavy burden of appellate work. This is disposed of by the consideration of printed briefs and records, the hearing of oral arguments and the writing and publishing of opinions. The function of the courts of appeals, as heretofore prescribed by the Congress, is that of determining whether or not the trial tribunals, both administrative agencies and commissions and United States District Courts, have conducted their proceedings according to law. To require the courts of appeals to hold de novo trials is anomalous and would interfere seriously with the due and prompt performance of their appellate function. Hearings held under the Federal Food, Drug, and Cosmetic Act, involving as they usually do the submission of expert testimony by pharmacists and toxicologists, occupy days and sometimes weeks and even months.

III

It should be further noted that the requirement of H. R. 3298 for an appeal in accordance with the provisions prescribed in section 701 (f) and (g) of the Act (which must be read, as above stated, in connection with subparagraph (e) of the same section) is inconsistent with the hearing requirements of the bill, this for the reason that the latter make provision only for a presentation of facts at a public hearing and publication of the Administrator's action, whereas section 701 (f), (g), and (e) contemplate the taking of evidence, the making of a record, and the filing of findings of fact by the Administrator.

If the bill should be amended so as to require the making of a record and findings of fact by the Administrator and an appeal to a United States court of appeals, then, it is submitted, the de novo requirement should be eliminated not only for the reasons set forth in topic II above, but also because an appeal upon a record and findings of fact and the holding of a de novo trial are inconsistent. A de novo trial, as its name implies, means a completely new trial, i. e., one held without reference to what has occurred before. It is to be noted further in this connection that if a record and findings of fact are to be required of the Administrator and an appeal to a United States Court of Appeals is also required, then a de novo trial is an unnecessary safeguard because where the Congress by statute requires an adjudication to be determined on a record after opportunity for agency hearing, the Administrative Procedure Act (act of June 11, 1946, 60 Stat. 243, 5 U. S. C. 1001 et seq.) applies. That act provides in section 10 (e)-(Scope of Review):

"So far as necessary to decision and where presented the reviewing court shall decide all relevant questions of law, interpret constitutional and statutory provisions, and determine the meaning or applicability of the terms of any agency action. It shall (A) compel agency action unlawfully withheld or unreasonably delayed; and (B) hold unlawful and set aside agency action, findings, and conclusions found to be (1) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law; (2) contrary to constitutional right, power, privilege, or immunity; (3) in excess of statutory jurisdiction, authority, or limitations, or short of statutory right; (4) without observance of procedure required by law; (5) unsupported by substantial evidence in any case subject to the requirements of sections 7 and 8 or otherwise reviewed on the record of an agency hearing provided by statute; or (6) unwarranted by the facts to the extent that the facts are subject to trial de novo by the reviewing court. In making the foregoing determinations the court shall review the whole record or such portions thereof as may be cited by any party, and due account shall be taken of the rule of prejudicial error." Such a review is an adequate safeguard to the interests both of the Administrator and of the appealing parties without the necessity of calling witnesses anew and making a new record in the courts of appeals in a de novo trial. Especially is this true in view of the recent decision of the Supreme Court in Universal Camera Corporation v. National Labor Relations Board, No. 40, and in the companion case of National Labor Relations Board v. The Pittsburgh Steamship Company, No. 42, both decided February 26, 1951. The essential issue raised in these cases was the effect of the Administrative Procedure Act and also of the legislation known as the Taft-Hartley Act upon the duties of the United States courts of appeals when called upon to review orders of the National Labor Relations Board. But the opinions are written in terms sufficiently broad to make the rulings of the court applicable to the orders of Federal boards, commissions and agencies generally. In the Universal Camera case the court pointed out in the introductory portion of its opinion that the earlier concepts of judicial review under the Wagner Act were that the requirements of that act were met when the reviewing court could find in the record evidence which, when viewed in isolation, substantiated the Board's findings,2 but that criticism of so contracted a reviewing power resulted eventually in the enactment of the Administrative Procedure Act, and that by that act and under the Taft-Hartley Act the Congress has required á different standard for judicial review. The court said:

"Whether or not it was ever permissible for courts to determine the substantiality of evidence supporting a Labor Board decision merely on the basis of evidence which in and of itself justified it, without taking into account contradictory evidence or evidence from which conflicting inferences could be drawn, the new legislation definitely precludes such a theory of review and bars its practice. The substantiality of evidence must take into account whatever in the record fairly detracts from its weight. This is the clear meaning of the reference in both statutes to "the whole record."

"Congress has merely made it clear that a reviewing court is not barred from setting aside a Board decision when it cannot conscientiously find that the evidence supporting that decision is substantial, when viewed in the light that the record in its entirety furnishes, including the body of evidence opposed to the Board's view.

"We conclude, therefore, that the Administrative Procedure Act and the TaftHartley Act direct that courts must now assume more responsibility for the reasonableness and fairness of Labor Board decisions than some courts have shown in the past. Reviewing courts must be influenced by a feeling that they are not to abdicate the conventional judicial function. Congress has imposed on them responsibility for assuring that the Board keeps within reasonable grounds. That responsibility is not less real because it is limited to enforcing the requirement that evidence appear substantial when viewed, on the record as a whole, by courts invested with the authority and enjoying the prestige of the courts of appeals. The Board's findings are entitled to respect; but they must nonetheless be set aside when the record before a court of appeals clearly precludes the Board's decision from being justified by a fair estimate of the worth of the testimony of witnesses or its informed judgment on matters within its special competence or both.

2 The Court referred in this connection to Labor Board v. Waterman Steamship Corp., 309 U. S. 206; Labor Board v. Bradford Dyeing Assn., 310 U. S. 318; and Labor Board v. Nevada Consolidated Copper Corp., 316 U. S. 105.