Lapas attēli
PDF
ePub

REGULATORY INDEPENDENCE

creation of the Office of Price Administration. The nation was literally engulfed in a blizzard of paperwork concerning rationing, output, prices, and any other conceivable type of information, both private and public. For the successful prosecution of the war this proved not only unnecessary but was bitterly resented by the many citizens who were required to wait their places in long lines at various post offices throughout the country for a determination whether their questionnaires were properly filled out and their requests indeed necessary."

39

The Act provides that requests for information originating with any governmental agency " and directed to more than nine respondents must receive clearance by the Bureau of the Budget. Requests for such clearance must be accompanied by a detailed explanation of the questionnaire, such as technicalities of implementation, manner of selecting the respondents, whether the information is to be collected by mail or personal interview. In addition, the request must be justified in depth. This would include a statement why the information is sought and how it will be used; why the particular number of respondents and not less have been selected; how much time it will take a respondent to answer the questionnaire,

11

etc. In ruling upon such requests the Bureau of the Budget must also be satisfied that this is the only practical method of getting the necessary information and that it is not available through some other governmental or more readily accessible private source."0

The power of review within the Bureau of the Budget extends so far as to permit forbidding collection of all or a part of the information sought. In case of the traditionally used questionnaire, for example, the Bureau of the Budget may withhold clearance for its issuance altogether, or it may strike certain questions-a matter entirely within its discretion.

Congress, in its haste to pass this bill, however, did not heed the warning of those questioning its extent, although this point was the subject of considerable debate." Specifically, some members of Congress felt that while the bill was ostensibly aimed at the elimination of unnecessary and presumably duplicate reports, the way it was phrased gave the Director of the Bureau of the Budget a good deal more control over the collection of information than was necessary under the circumstances and perhaps even intended by Congress had it considered all the ramifications of the bill."

"Speaking about OPA reports and questionnaires, Congressman Patman stated:

If the gentleman had heard the testimony that has been presented before the Committee on Small Business of the House, he would be very anxious to have this bill passed without 1 hour's delay. The people are up in arms about these useless reports and unnecessary questionnaires. They are irritated by them and they are irritated at the Congress because the Congress will not do something about it. [88 Cong. Rec. 9121.]

Some of the supervisory agencies and the Bureau of Internal Revenue are exempted. See Bowman, Results Achieved by the Federal Reports Act, 7 Bus. and Gov't Rev. 5 (Ú. of Missouri, 1966).

Bowman, supra note 39.

"88 Cong. Rec. 9159-9166.

"The following is an excerpt of one of the comments during the debate of the bill: MR. SMITH of Ohio. Mr. Speaker, reserving the right to object, there is a good deal more to this bill than merely the elimination of unnecessary reports. Under section 2(d) it seems to me you are vesting a lot of authority and power in the Director of the Budget. Upon the request of any party having a substantial interest or upon his own motion, the Director is authorized within his discretion to make a determination as to whether

12

THE FEDERAL BAR JOURNAL

As it turned out, the Act permits the Bureau of the Budget to exercise a good deal of control over the investigative functions of the independent agencies. With respect to the Federal Trade Commission this represents a drastic departure from the theory of its creation. One of the Commission's most important functions arises out of the mandate to investigate and publicize business. conditions harmful to the continued good health of the economy and o do so independently and outside of the control of the Executive. Any control over its ability to investigate or a substantive review of the information it secks will naturally adversely affect the independence of the Commission.

There is no doubt that the purpose for which the Act was conceived—to cut costs to the Government and to avoid unnecessary harrassment of citizens and businesses has considerable merit. If, however, it becomes an instrument of control over some types of investiga

tions, specifically those of independent
regulatory agencies--and this in fact has
occurred it would appear that the au-
thority the Act vests in the Bureau of the
Budget needs to be reexamined.

E. The Hoover Commission and the
Landis Report

In 1947 the Hoover Commission " was organized to study and make its report on, along with recommendations, governmental operations, with particular emphasis on efficiency in the operation of government. One recommendation included in the Hoover Commission report," which was adopted later * and which was to have a far-reaching impact upon the independence of regulatory agencies, concerned the position of chairmen for these agencies. In the interest of efficiency and to "enable the President to obtain a sympathetic hearing of broader consideration of national policy which he feels the Commission should take into account," the Hoover

or not the collection of any information by any Federal agency is necessary for the proper performance of the functions of such agency or any other proper purpose.

Certainly a considerable amount of information being collected by various governmental agencies is being so collected by direction of the Congress in response to specific legislation. Are we to infer that the Director of the Budget is to have final authority and power to set aside any legislation which the Congress has passed directing the collection of information? [88 Cong. Rec. 9159.]

"The Commission on Organization of the Executive Branch of the Government received its name "Hoover Commission" because it was chaired by ex-President Hoover.

"REPORT ON THE ORGANIZATION OF THE INDEPENDENT REGULATORY COMMISSIONS, March 3, 1949.

...

It is significant to note that the Senate Committee on Government Operations rejected recommendations made by the first Hoover Commission that certain "executive" functions of regulatory agencies be transferred to Executive Departments, with the following comment: To the extent such recommendations were consistent with established legislative policies and in conformity with the separation of regulatory functions from administrative controls of policy-determining departments or agencies, they received favorable action. These regulatory commissions were established primarily by the Congress to act on an independent basis in the public interest, and free from direct control by the President over either their activities or their decisions. The basic statutes provided that they be primarily responsible to the Congress of the United States as the elected representatives of the people in order that they might be responsive to the general public interest and in a position to carry on their activities without improper influences from other governmental agencies. This committee, and the Senate, determined that favorable action on these proposals would seriously impair the operations of these commissions and would tend to undermine their independence of action. [Senate Committee on Government Operations, Senate Action on Hoover Commission Reports, S.Rept. 4, 83d Cong., 1st Sess. 67 (1953).] "Task Force on Regulatory Commissions, Appendix N, p. 32, Jan. 1949. Prepared for the Commission on Organization of the Executive Branch of the Government.

REGULATORY INDEPENDENCE

Commission recommended that the chairman of an agency should be appointed by the President and should be given more administrative authority over his agency. Up to that time, with the exception of the Federal Communications Commission, whose organic statute provides for the appointment of its chairman by the President, the agencies selected their chairmen from among their members. Generally the chairman of an agency would be selected by the members of such an agency on an annual basis and he constituted little more than a primus inter pares. In addition, the agencies themselves would decide how to handle intra-agency administrative detail. Under the reorganization of 1950, however, the chairman had the authority (1) to appoint and supervise personnel, (2) to distribute the workload among such personnel, and (3) to determine the use and expenditure of funds. The reason assigned to this drastic departure from previous practice was that it would relieve the commissioners from burdensome administrative chores such as ruling upon the salaries of the char force and thereby free them to devote their energies to the substantive aspects of the commission's work.

47

The impact of these plans, once they were implemented, was profound." Inasmuch as the chairman holds his post as chairman at the pleasure of the Presi

13

dent, it becomes unlikely for him to pursue a policy alien or contrary to that of the Chief Executive if he is to retain his post. Since the chairman is responsible for the selection of personnel, the assignment of the workload and the use of the agency's funds, it is difficult to see how an agency, even if a majority of its members wish to do so, may pursue a course independent from the wishes and desires of the then current administration. As a practical matter there would be no conflict if the policies of the Executive are the same as those of the Congress; should those be different, however, it will become readily apparent that independence from Executive control has been materially weakened.

Those members of Congress who had the opportunity to study the proposal recognized, of course, that any gains in efficiency which might result would be at a sacrifice in independence. As a result, Senator Edwin C. Johnson from Colorado introduced a resolution for disapproval of the proposals on the ground that they were contrary to the "long established congressional policy that regulatory agencies must be independent and directly responsible to Congress." 50 The resolution carried only with respect to the Interstate Commerce Commission and the Federal Communications Commission, and in those instances only because it was vigorously supported by the industries

With the exception of appointments to the major administrative units within an agency, which would require approval of a majority of commissioners.

"These plans were labeled in the following manner: Reorganization Plan No. 8, FTC; Reorganization Plan No. 9, FPC; Reorganization Plan No. 10, SEC; and Reorganization Plan No. 13, CAB. 5 USC 133Z-15 (1964). See also 5 USC 901-913 (1964 Supp. III).

S.Res. 254, 81st Cong., 2d Sess. Under the Reorganization Act of 1945 (59 Stat. 613), the President was given the authority for a specific time period to submit reorganization plans to the Congress. To prevent such a plan from going into effect, a concurrent resolution was Decessary by the two Houses, stating that the Congress does not favor the reorganization plan. This time period has since been periodically extended, and again on March 27, 1969 (P.L. 91-5), 83 Stat. 6.

Hearings Before the Senate Committee on Expenditures in the Executive Departments, list Cong., 2d Sess. (1950), S.Res. 254, pp. 13-17.

14

THE FEDERAL BAR JOURNAL

regulated by these commissions and their bars.51

The Landis Report of 1960 52 covered similar ground and also voiced its concern about efficiency in government. The recommended cure for whatever bureaucratic blunders or loss of efficiency might have occurred was again greater control by the Executive. With respect to the Federal Trade Commission the report states:

Here, as in the case of the Interstate Commerce Commission, the Civil Aeronautics Board and the Securities Exchange Commission, the powers of the Chairman should

be increased and the Commission's authority to delegate decision-making implemented by Presidential Action under the Reorganization Act."

Quite revealing is the reason given for the necessity of these changes. As the report states, the Federal Trade Commission must, due to its limited resources, exercise a great deal of discretion as to the trade practices it will investigate and must concentrate on specific areas. This, according to Landis, "involves an issue of policy of which the Executive should not only be aware but which should be keyed to whatever overall program is then the Administration's prime concern. The responsibility for concentration on a particular area should be the responsibility of the Executive and not the Federal Trade Commission." "54 Under this theory, the Executive, alternatively, would be able not to concentrate on a particular area,

a fact which has always been of greater congressional concern, particularly in the area of antitrust enforcement. Acceptance of this theory would inevitably lead to precisely the circumstances the establishment of the independent agencies was supposed to preclude-Executive control over the regulatory scheme. By the same token, however, the report, in a curiously candid comment, states that "[t]here has also been too much of the morale-shattering practice of permitting executive interference in the disposition of causes and controversies delegated to the agencies for decision." 55 No doubt there is a direct relationship between the extent of "morale-shattering executive interference" and the degree to which, over the years, we have veered from the original congressional intent concerning regulatory independence. As a matter of fact, such interference is invited for the very reasons assigned to the need for greater Executive control.

The recommendation with respect to the Federal Trade Commission, contained in the report, became the Reorganization Plan No. 4 of 1951.se The plan substantially broadened the Chairman's authority, particularly with respect to the assignment of workload among the Commission personnel as well as among the individual commissioners. The importance of this authority in the Chairman's office cannot be overestimated.""

"It is questionable whether it is desirable that a regulated industry become the champion and protector of the independence of its regulatory agency.

"Landis, Report on Regulatory Agencies to the President-Elect, Dec. 1960.

" Id. at 48.

14

" Id. at 52.

Id. at 36.

Reorganization Plans 1 (SEC), 2 (FCC), and 5 (NLRB) were disapproved by the House of Representatives. 5 USC 133z-15 (1964).

"The reaction of members of Congress who recognized the importance of the Landis Report on regulatory independence is best summed up by the statement of Representative Avery from Kansas:

Mr. Speaker, I do not want to longer impose upon the time of the House, but I would just like to make the RECORD clear that this is the boldest trespass upon the independence

REGULATORY INDEPENDENCE

[blocks in formation]

15

seek enforcement of its own subpoenas in the Federal District Courts." "1 In

reaching the conclusion that the Commission did not have this authority, the majority considered not only the briefs and arguments of the parties but also a brief amicus curiae submitted by the Department of Justice at the invitation of the court. In its amicus brief the Department took the position that only the Department is authorized to present the agency in court. To the author's knowledge, this is the first time 62 in the 54-year history of the Commission that the Department has taken this position. Up to this point it had been generally accepted, both by the courts 3 and commentators," that the Commission had

of the regulatory agencies that has become a matter of record since the Interstate Commerce Commission was authorized in 1887. [107 Cong. Rec. 3927.]

390 F.2d 323 (8th Cir. 1968).

F.T.C. v. Guignon, 261 F.Supp. 215 (E.D. Mo. 1966).

"In reaching this decision the court placed heavy reliance on F.T.C. v. Claire Furnace Co., 274 U.S. 160 (1927), thereby repeating the previously committed error of confusing those provisions of the F.T.C. Act relating to mandamus, i.e., the enforcement of orders with the provision relating to the enforcement of subpoenas.

390 F.2d 324.

"In F.T.C. v. Smith, 34 F.2d 323 (S.D.N.Y. 1929), the Commission's first subpoena enforcement case, the United States Attorney, as well as the Commission attorneys, was shown in the official reports as having appeared for the Commission. But the first sentence of the Smith case (34 F.2d 324) states that the action was initiated by "application of the Federal Trade Commission," not by application of the Attorney General.

"E.g., F.T.C. v. Green, 252 F.Supp. 153 (S.D.N.Y. 1966); Adams v. F.T.C. 296 F.2d 861 (8th Cir. 1961), cert. den. 369 U.S. 864 (1962); F.T.C. v. Cooper, 1962 CCH Trade Cases 170,353 (S.D.N.Y. 1962); F.T.C. v. Tuttle, 244 F.2d 605 (2d Cir. 1957), cert. den., 354 U.S. 925; F.T.C. v. Harrell, 313 F.2d 854, 855 (7th Cir. 1963); F.T.C. v. Reed, 243 F.2d 308 (7th Cir. 1957), cert. den., 355 U.S. 823; F.T.C. v. Hallmark, Inc., 265 F.2d 433 (7th Cir. 1959); Flotill Products, Inc. v. F.TC., 278 F.2d 850 (9th Cir. 1960), cert. den., 364 U.S. 920; Moore Business Forms, Inc. v. F.T.C., 307 F.2d 188 (D.C. Cir. 1962); F.T.C. v. Rubin, 245 F.2d 60 (2d Cir. 1957); F.T.C. v. Hunt Foods & Industries, Inc., 178 F.Supp. 448 (S.D. Cal. 1959), 4d, 286 F.2d 803 (9th Cir. 1960), cert. den., 365 U.S. 877 (1961); F.T.C. v. Waltham Watch Co., 169 F.Supp. 614 (S.D.N.Y. 1959); F.T.C. v. Bowman, 149 F.Supp. 624 (N.D. I 1957), aff'd, 248 F.2d 456 (7th Cir. 1957); F.T.C. v. Menzies, 145 F.Supp. 164 (D. Md. 1956), aff'd, 242 F.2d 81 (4th Cir. 1957); F.T.C. v. Scientific Living, Inc., 150 F.Supp. 495, 498 (M.D. Pa. 1957), appeal dism. (3d Cir., order dated Aug. 12, 1957), cert. den., 355 U.S. 940 (1958); F.T.C. v. Clarke, 33 F.T.C. 1812 (S.D. Cal. 1941), held not subject to collateral attack, 128 F.2d 542 (9th Cir. 1942). See also cases cited in the dissenting opinion in Guignon, 390 F.2d at 336 n.8.

Withrow, Investigatory Powers of the FTC-Constitutional and Statutory Limitations, 24 Fed. Bar J. 456 (1964):

In case of disobedience to a subpoena, the Commission may itself seek the aid of the courts, but where enforcement of a demand for access or a Section 6(b) report is sought, the Commission is required to request the Attorney General to make application to the courts. [p. 485.]

« iepriekšējāTurpināt »