Mr. LANDIS. No, I don't think that it is possible. The plan doesn't work toward such delegation on the part of the delegate and the authority to go further is certainly not rendered by the terms of section 1 of the plan. The whole theory is to take a number of the lesser important matters a number of matters come before these regulatory agencies that call for action on the part of five or seven men and it is unnecessary that these lesser important matters should receive that kind of attention. If you can delegate these matters elsewhere, you would free the commission members who have the prime responsibility for many details and permit them to dispatch the important business much more quickly. This would give agency members time to engage in some policy formulation and planning. That is the essence of the plan.

Now, there are safeguards in connection with this matter of delegation. I mention the safeguard of publication of the rule, the safeguard that is inherent in the fact that section 4 of the Administrative Procedure Act applies to the adoption of the rule.

There is another safeguard; namely, that in any of these matters that are delegated pursuant to the power granted, the petitioner has a right to ask the commission en banc to review the matter. The commission en banc can also review, on its own initiative, any matter that has been delegated. This is a discretionary review on the part of the commission. It is very much in the nature of a petition for certiorari. That is the common practice in which the Supreme Court of the United States

The CHAIRMAN. Somewhat like a petition for rehearing?

Mr. LANDIS. It would be something of that nature—a petition for rehearing en banc. And the safeguard is also in there; namely, that a minority of the commissioners, if it wants to have the matter reviewed, can bring it before the commission en banc.

The CHAIRMAN. A minority of the commission?

Mr. LANDIS. If a minority of the commission wants to have a review en banc of any matter, it must be reviewed.

The CHAIRMAN. When you say minority, would that be any single member of the commission?

Mr. LANDIS No. It means a majority less one. In other words, if you have a five, a majority would be three and less one would be two. If two members of the Commission

The CHAIRMAN. In other words, the minority, on a five-man commission, it would be any two and on a seven-man commission, any three?

Mr. LANDIS. That is right.

Senator JAVITS. Mr. Chairman.

The CHAIRMAN. Yes.

Senator JAVITS. Just to elucidate that point, in the case of the SEC, I might ask Dean Landis-incidentally, I join the Chair in my pleasure in having him and my great respect for him-in the case of the SEC, under the present circumstances, that would be exactly half the commission because one commissioner is physically incapable of functioning. Is that correct?

Mr. LANDIS. That is true. It happens to be in that case one commissioner is ill and if he is not functioning it would still take two or, under those circumstances, it would be one-half.

The CHAIRMAN. As I understand, it requires no more and no less, even though it is one and

Mr. LANDIS. Yes, and I might point out, also, that the commission, if it wants to, can review on the basis of the request of one member. It is an entirely discretionary matter.

The CHAIRMAN. It is still in the discretion of the commission?

Mr. LANDIS. Yes, it is discretionary. But again, a minority can always force the issue before the agency. In a sense it is somewhat modeled upon what is generally understood to be the practice of the Supreme Court of the United States. If four members of the Court want to grant the petition for certiorari, the Court grants it, but the Court may grant it on the request of less than four.

There is also another safeguard in these plans and that is that the provisions of section 7 of the Administrative Procedure Act cannot be evaded under the plans. Section 7 provides that with regard to certain adjudicatory matters no one may preside at the taking of evidence except a commissioner or commissioners or a hearing examiner. This plan preserves the whole concept of the hearing examiner in adjudicated matters, and I think it really raises the dignity of the hearing examiner because it gives him a chance to come to a decision that may have finality if the Commission itself chooses not to review it. I think it will tend to increase the quality of their work and establish them more in the position of quasi-trial judges than they are at the present time.

The CHAIRMAN. Let me ask you this: Where the authority to make a decision, not just mere recommendations, but to make a decision, is vested or delegated to a hearing examiner, can any aggrieved party insist upon a review by the Board or by the Commission?

Mr. LANDIS. No. He can request it.

The CHAIRMAN. He can request it, but he has no right?

Mr. LANDIS. Yes. In other words, if the Commission, we will say, looks over the matter and feels that there has been no miscarriage of justice, it doesn't need to go through the process of giving oral argument.

The CHAIRMAN. They don't have to act at all, as I understand it. They don't even have to look at it.

Mr. LANDIS. Well, they would look at it.

The CHAIRMAN. You say they would, but I am talking about would they have to. Here is an aggrieved party. The examiner has made a decision and an aggrieved party says that is wrong, I want the Board to look at it. If the Board looks at it, then the Board is, in effect, reviewing it but the Board, as I understand it, can decline even to look at it; is that right?

Mr. LANDIS. Well, it can decline to look at it in this sense and say, well, we are perfectly satisfied; we see no reason to go over this again, or this is such a minor matter that we don't think we ought to go over again.

The CHAIRMAN. That just puts an arbitrary power there. You know to look at it and review it and say we don't think this is of that much importance, that is one thing. But to just say well, we delegated that to the hearing examiner and he made the decision and we are not going to fool with it any further, that is something else.

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I am trying to understand now where we get to and I am not expressing an opinion with respect to the plan. I want to support anything that I think will expedite the work of these agencies. I am not opposing the plan, you understand, but I am trying to clarify these matters. Here is an aggrieved party and the authority has been delegated to the hearing examiner; he hears and he makes a decision, a ruling. The aggrieved party says "that is wrong; I ought to have that reviewed.' He appeals to the Board and the Board says, "We are not even going to look at it."

Mr. LANDIS. Well they certainly would look at his petition.

The CHAIRMAN. Well, they look at his petition, but they they say this only involves so and so and that is too unimportant for us to fool with. That is not reviewing it on its merits.

Mr. LANDIS. Not necessarily reviewing it on its merits, no. I quite agree this is not a review on its merits; it is a review to determine whether there should be a review on the merits.

The CHAIRMAN. I just want to get the record straight so I understand it.

Mr. LANDIS. I might point out that in no way do any of these plans affect the right to judicial review from any action of the Commission. The CHAIRMAN. I can appreciate, Mr. Landis, that there are instances where the matter is so trivial that it may be unreasonable for an aggrieved party to impose upon the Commission and to take up a lot of time. I realize that. It is a delicate thing to know where to draw the line to protect the rights and see justice can be done.

Mr. LANDIS. The plans are flexible in that, for example, the Commission of seven could set up a panel of two or three if they felt that they should review a case.

The CHAIRMAN. They could do that? They can set up a panel of one or two to review it?

Mr. LANDIS. Yes, they can do that.

The CHAIRMAN. I would think in most instances, speaking for myself, in most instances they ought to have at least one or two Commissioners look at it.

Mr. LANDIS. One other feature of the plan is the fact that the Chairman of the Commission is given the authority to deploy the personnel of the Commission. In other words, if a certain class of cases is to be referred to two Commissioners instead of to the Commission as a whole, the deployment of the personnel is put into the hands of the Chairman. This has been criticized in some of the hearings on the grounds that it puts too much power in the Chairman. I just can't see that that criticism is a significant one. The deployment of personnel has to be flexible and somebody has to take on that chore.

Now with reference to these specific plans, there are slight variations in them and they are tailored to the necessities of the particular Commission that is involved. The Communications Act of 1934, for example, as distinguished from, we will say, the Securities Act for the Securities and Exchange Commission, contains a certain amount of procedural matter. For that reason, provision is made to dispense with these procedural obstacles to the adoption of the plan.

For example, in section 409 (b) of the Communications Act there is a provision which automatically gives a mandatory right of review from the hearing examiners' decisions in adjudicated cases. Well, their

function in this regard is abolished by a provision in section 1 of plan No. 2.

Another feature of section 1 of plan No. 2 is that it also abolishes the so-called review staff that was established in the 1952 amendments to the Communications Act of 1934. This does not mean that there can be no review staff but in the 1952 amendments there were certain restrictions placed upon the use of that review staff which destroys, to a certain degree, its flexibility, its force, and its purpose. I haven't even seen much objection to the abolition of that review staff. In fact, in the House committee hearings it was indicated by the Subcommittee on Communications that they themselves were in favor of the abolition of the review staff, as such.

Plan No. 3, dealing with the Civil Aeronautics Board, did not require any changes from the overall scheme of the plans. Plan No. 4, dealing with the Federal Trade Commission, also required no particular tailoring and it is, generally speaking, the same as the other plans. Plan No. 5, dealing with the National Labor Relations Board, has one variation in it. It does not contain the section 2 of the other plans which transfers the deployment powers to the Chairman. This would be unnecessary in the case of the National Labor Relations Board because of the nature of its organization. Other than as specified, the plans follow the same general pattern. I think their impact with regard to the various agencies will be considerably different.

Listening to the testimony that I have listened to in many of these hearings and also after considering the functions of these various commissions, I think the plan will be very, very useful to the Securities and Exchange Commission where a great many acts which are not of an adjudicatory character are required to be accomplished by the Commission as a whole. I should estimate that on the average, the Commission, for example, has to deal as a commission with some 20 to 30 so-called orders for acceleration of the registration schedule. Now that takes a considerable amount of time and by delegating that kind of work to a commissioner or a panel of commissioners, the Commission itself could be considerably relieved of some of its duties and the SEC is a Commission that is thoroughly overworked. I mean I' know that as a personal matter. I have known most of the men that served on that Commission and I know that they are an overworked group and the problems which I see face them for the future call for a considerable amount of thinking, studying, and planning because, the nature of our securities markets are changing almost daily.

With regard to the Federal Communications Commission, I think the plan there will primarily be to advantage with regard to a series of adjudicatory matters. There are many minor matters connected with either extensions of time or the change or some variation in the issuance of radio and television licenses.

With regard to the Civil Aeronautics Board, there are certain cases that I think could very well be dealt with under the plan. For instance, in many cases in which foreign-flag carriers are authorized to conduct certain operations, there is really no contest at all. The determination has really arisen as a result of treaty negotiations and the air treaty that preceded it, and so it becomes a fairly routine matter. Where it isn't routine, of course, the Commission can reach

in and take over the matter and have it considered by the Board as a whole.

With regard to the National Labor Relations Board, I think the plan has a great deal of merit. The backlog of cases before the Board is, I think, the highest in its history. These cases, perhaps more so than the cases coming before the Federal Trade Commission or the Federal Communications Commission, really call for dispatch in determination. Delay there is really a denial of justice in many, many situations.

Now the National Labor Relations Board has already taken certain steps to speed it processes in accord with its powers under the National Labor Relations Act. It has delegated the determination of representation cases to its regional directors, which it is entitled to do, but it cannot delegate the unfair labor practice cases to any level that is lower than that of the Commission. Certainly in the case of the National Labor Relations Board the volume is so intensive that delegation of some kind is essential. Also, in many cases the hearing examiner is the only one that can really make the determination because he is the person who has to pass upon the credibility of the evidence, and I think it would be very easy to deal with petitions for review coming up under the National Labor Relations Board procedure, inasmuch as the fact issues are really not decided again by the Board. Usually the only questions that really come before the Board involve issues of law and of policy as they appear in those

cases.

In conclusion, I would say, Mr. Chairman, that it is difficult to try and deal with the delays that characterize the disposition of business by our regulatory agencies. These plans may work-I hope they will work. The attitude, I think, of most of the regulatory agencies is a belief that they will work.

There are other things, of course, that have to be done in order to deal with this overall problem of delay, but it does seem to me that a very distinct step can be made by the adoption of these various plans. The CHAIRMAN. Thank you very much, sir.

One or two questions: Do you think that it is proper to delegate rulemaking powers to the staff?

Mr. LANDIS. I would say normally not, but rulemaking is such a very, very broad concept that a certain amount of it could easily be delegated to a board of employees or the like.

For example, one of the agencies here that perhaps goes in for rulemaking to a greater degree than any other agency is the Securities and Exchange Commission and their rules are covered in minutia of detail, detail as to the size of the paper upon which a registration statement has to be filed, details as to the quality of the papers, as to the number of statements that have to be filed, etc. They are rules. Now the delegation of these determinations, subject to the general supervision of the Commission, doesn't seem to me to be wrong.

The CHAIRMAN. They would always retain the supervisory power of the Commission to nullify or change any rule or veto any rule that the subordinate makes?

Mr. LANDIS. Yes, and if anybody is distressed by any rule, why a petition to review can be filed with the Commission and I just don't see much chance of abuse in that kind of delegation. I don't see much use of it in what we normally call the rulemaking function,