ADMINISTRATIVE PROCEDURE ACT - NOAA Office for … · ADMINISTRATIVE PROCEDURE ACT LEGISLATIVE...

79TH CONGRESS SENATE DOCUMENT2d Session No. 248

ADMINISTRATIVE PROCEDURE ACT

LEGISLATIVE HISTORY

79TH CONGRESS

1944-46

PRESENTED BY MR. McCARRAN

JULY 26 (legislative day, JULY 5), 1946.-Ordered to be printed

79TH CONGRESS SENATE DOCUMEN2d Session SENATE No. 248


LEGISLATIVE HISTORY

79TH CONGRESS

1944-46

PRESENTED BY MR. McCARRAN

JULY 26 (legislative day, JULY 5), 1946.-Ordered to be printed

UNITED STATES

GOVERNMENT PRINTING OFFICE

90600 WASHINGTON: 1946

FOREWORD

The Administrative Procedure Act is a strongly marked, longsought, and widely heralded advance in democratic government. Itembarks upon a new field of legislation of broad application in the"administrative" area of government lying between the traditionallegislative and fundamental judicial processes on the one hand andauthorized executive functions on the other. Although it is brief, itis a comprehensive charter of private liberty and a solemn under-taking of official fairness. It is intended as a guide to him who seeksfair play and equal rights under law, as well as to those invested withexecutive authority. It upholds law and yet lightens the burden ofthose on whom the law may impinge. It enunciates and emphasizesthe tripartite form of our democracy and brings into relief the everessential declaration that this is a government of law rather than ofmen.

,Because of its nature and consequence, and because it has beenthrough a most rigorous and lengthy sieve of consideration by the Con-gress, the legislative documents which accompany and explain itspurpose and operation are of immediate and permanent importance.These are, particularly, the Senate committee print of June 1945 (pp.11-44), the reports of the Judiciary Committees of the Senate (pp.185-217) and the House of Representatives (pp. 233-290), and thediscussions and explanations in both the Senate-(pp. 295-344) and theHouse of Representatives (pp. 344-406).

PAT MCCARRAN,Chairman, Comwmittee on the Judiciary, United States

Senate.III

TABLE OF CONTENTS

PageForeword __---------------------------------------------------------- IIIAdministrative Procedure Act_---_-______________------------------- 1Senate Judiciary Committee print, June 1945 -------------------------- 11House Judiciary Committee hearings -------------------------------- 45Report of Senate Judiciary Committee -------_----___----____-------- 185Report of House Judiciary Committee _________--- _____----_.-- - . 233Proceedings from Congressional Record ----- __-------------------------- 295Indexes:

By sections ------------___-- --___-_____----------______ _____-_-L 425By subjects ------------------------ __--_------------------------ 441By names, agencies, and organizations _-___-- __- ___________________. 451


[PUBLIC LAW 404-7 9TH CONGRESS]

[CHAPTER 32 4- 2 D SESSION]

[S. 7]

AN ACT To improve the administration of justice by prescribing fairadministrative procedure

Be it enacted by the Senate and House of Representatives of theUnited States of America in Congress assembled,

TITLE

SECTION 1. This Act may be cited as the "Administrative ProcedureAct".

DEFINITIONS

SEC. 2. As used in this Act-(a) AGaENwc.--"Agency" means each authority (whether or not

within or subject to review by another agency) of the Government ofthe United States other than Congress, the courts, or the governmentsof the possessions, Territories, or the District of Columbia. Nothingin this Act shall be construed to repeal delegations of authority asprovided by law. Except as to the requirements of section 3, thereshall be excluded from the operation of this Act (1) agencies com-posed of representatives of the parties or of representatives of organ-izations of the parties to the disputes determined by them, (2) courtsmartial and military commissions, (3) military or naval authorityexercised in the field-in time of war or in occupied territory, or (4)functions which by law expire on the termination of present hos-tilities, within any'fixed period thereafter, or before July 1, 1947, andthe functions conferred by the following statutes: Selective Trainingand Service Act of 1940; Contract Settlement Act of 1944; SurplusProperty Act of 1944.

(b) PERSON AND PARTY.--"PersOn" includes individuals, partner-ships, corporations, associations, or public or private organizationsof any character other than agencies. "Party" includes any personor agency named or admitted as a party, or properly seeking andentitled as of right to be admitted as a party, in any agency proceed-ing; but nothing herein shall be construed to prevent an agencyfrom admitting any person or agency as a party for limited purposes.

(c) RULE AND RULE MAKING.-"Ru]le" means the whole or anypart of any agency statement of general or particular applicability

1

2 ADMINISTRATIVE PROCEDURE

and future effect designed to implement, interpret, or prescribe law orpolicy or to describe the organization, procedure, or practice require-ments of any agency and includes the approval or prescription for thefuture of rates, wages, corporate or financial structures or reorganiza-tions thereof, prices, facilities, appliances, services or allowances there-for or of valuations, costs, or accounting, or practices bearing uponany of the foregoing. "Rule making" means agency process for theformulation, amendment, or repeal of a rule.

(d) ORDER AND ADJUDICATION.-"Order" means the whole, or anypart of the final disposition (whether affirmative, negative, injunctive,or declaratory in form) of any agency in any matter other thanrule making but including licensing. "Adjudication" means agencyprocess for the formulation of an order.

(e) LICENSE AND LICENSING.--License" includes the whole or partof any agency permit, certificate, approval, registration, charter, mem-bership, statutory exemption or other form of permission. "Licens-ing" includes agency process respecting the grant, renewal, denial,revocation, suspension, annulment, withdrawal, limitation amendment,modification, or conditioning of a license.

(f) SANCTION AND RELIEF.-- Sanction" includes the whole or partof any agency (1) prohibition, requirement, limitation, or other con-dition affecting the freedom of any person; (2) withholding of relief;(3) imposition of any form of penalty or fine; (4) destruction,taking, seizure, or withholding of property; (5) assessment of dam-ages, reimbursement, restitution, compensation, costs, charges, or fees;(6) requirement, revocation, or suspension of a license; or (7) takingof other compulsory or restrictive action. "Relief" includes the wholeor part of any agency (1) grant of money, assistance, license, authority,exemption, exception, privilege, or remedy; (2) recognition of anyclaim, right, immunity, privilege, exemption, or exception; or (3)taking of any other action upon the application or petition of, andbeneficial to, any person.

(g) AGENCY PROCEEDING AND ACTION.-"Agency proceeding" meansany agency process as defined in subsections (c), (d), and (e) of thissection. "Agency action" includes the whole or part of every agencyrule, order, license, sanction, relief, or the equivalent or denial thereof,or failure to act.

PUBLIC INFORMATION

SEC. 3. Except to the extent that there is involved (1) any functionof the United States requiring secrecy in the public interest or (2) anymatter relating solely to the internal management of any agency-

(a) RULEs.-Every agency shall separately state and currentlypublish in the Federal Register (1) descriptions of its central andfield organization including delegations by the agency of final author-ity and the established places at which, and methods whereby, thepublic may secure information or make submittals or requests; (2)statements of the general course and method by which its functionsare channeled and determined, including the nature and requirementsof all formal or informal procedures available as well as forms andinstructions as to the scope and contents of all papers, reports, orexaminations; and (3) substantive rules adopted as authorized bylaw and statements of general policy or interpretations formulated

ADMINISTRATIVE PROCEDURE 3

and adopted by the agency for the guidance of the public, but notrules addressed to and served upon named persons in accordancewith law. No person shall in any manner be required to resort toorganization or procedure not so published.

(b) OPINIONS AND ORDERS.--Every agency shall publish or, inaccordance with published rule, make available to public inspectionall final opinions or orders in the adjudication of cases (except thoserequired for good cause to be held confidential and not cited asprecedents) and all rules.

(c) PUBLIC REcoRDs.-Save as otherwise required by statute, mat-ters of official record shall in accordance with published rule be madeavailable to persons properly and directly concerned except informa-tion held confidential for good cause found.

RULE MAKING

SEC. 4. Except to the extent that there is involved (1) any military,naval, or foreign affairs function of the United States or (2) anymatter relating to agency management or personnel or to publicproperty, loans, grants, benefits, or contracts-

(a) NoTIcE.-General notice of proposed rule making shall be pub-lished in the Federal Register (unless all persons subject thereto arenamed and either personally served or otherwise have actual noticethereof in accordance with law) and shall include (1) a statement ofthe time, place, and nature of public rule making proceedings; (2)reference to the authority under which the rule is proposed; and (3)either the terms or substance of the proposed rule or a description ofthe subjects and issues involved. Except where notice or hearing isrequired oy statute, this subsection shall not apply to interpretativerules, general statements of policy, rules of agency organization, pro-cedure, or practice, or in any situation in which the agency for goodcause finds (and incorporates the finding and a brief statement ofthe reasons therefor in the rules issued) that notice and public pro-cedure thereon are impracticable, unnecessary, or contrary to thepublic interest.

(b) PROCEDURES.-After notice required by this section, the agencyshall afford interested persons an opportunity to participate in therule making through submission of written data, views, or argumentswith or without opportunity to present the same orally in any man-ner; and, after consideration of all relevant matter presented, theagency shall incorporate in any rules adopted a concise general state-ment of their basis and purpose. Where rules are required by statuteto be made on the record after opportunity for an agency hearing, therequirements of sections 7 and 8 shall apply in place of the provisionsof this subsection.

(c) EFFECTIVE DATES.-The required publication or service of anysubstantive rule (other than one granting or recognizing exemptionor relieving restriction or interpretative rules and statements of pol-icy) shall be made not less than thirty days prior to the effective datethereof except as otherwise provided by the agency upon good causefound and published with the rule.

(d) PETITONS.-Every agency shall accord any interested personthe right to petition for the issuance, amendment, or repeal of a rule.

ADMINISTRATIVE PROCEDURE

ADJUDICATION

SEC. 5. In every case of adjudication required by statute to be deter-mined on the record after opportunity for an agency hearing, exceptto the extent that there is involved (1) any matter subject to a subse-quent trial of the law and the facts de novo in any court; (2) theselection or tenure of an officer or employee of the United States otherthan examiners. appointed pursuant to section 11; (3) proceedings inwhich decisions rest solely on inspections, tests, or elections; (4) theconduct of military, naval, or foreign affairs functions; (5) cases inwhich an agency is acting as an agent for a court; and (6) the certifi-cation of employee representatives-

(a) NOTICE.-Persons entitled to notice of an agency hearing shallbe timely informed of (1) the time, place, and nature thereof; (2) thelegal authority and jurisdiction under which the hearing is to be held;and (3) the matters of fact and law asserted. In instances in whichprivate persons are the moving parties, other parties to the proceedingshall give prompt notice of issues controverted in fact or law; and inother instances agencies may by rule require responsive pleading. Infixing the times and places for hearings, due regard shall be had forthe convenience and necessity of the parties or their representatives.

(b) PROCEDURE.--The agency shall afford all interested partiesopportunity for (1) the submission and consideration of facts, argu-ments, offers of settlement, or proposals of adjustment where time,the nature of the proceeding, and the public interest permit, and (2)to the extent that the parties are unable so to determine any contro-versy by consent, hearing, and decision upon notice and in conformitywith sections 7 and 8.

(c) SEPARATION OF FUNCTIONS.-The same officers who preside atthe reception of evidence pursuant to section 7 shall make the recom-mended decision or initial decision required' by section 8 exceptwhere such officers become unavailable to the agency. Save to theextent required for the disposition of ex parte matters as authorizedby law, no such officer shall consult any person or party on any factin issue unless upon notice and opportunity for all parties to partici:-pate; nor shall such officer be responsible to or subject to the super-vision or direction of any officer, employee,.or agent engaged in theperformance of investigative or prosecuting functions for any agency.No officer, employee, or agent engaged in the performance of investi-gative or prosecuting functions for any agency in any case shall, inthat or a factually related case, participate or advise in the decision,recommended decision, or agency review pursuant to section 8 exceptas witness or counsel in public proceedings. This subsection shallnot apply in determining applications for initial licenses or to pro-ceedings involving the validity or application of rates, facilities, orpractices of public utilities or carriers; nor shall it be applicable inany manner to the agency or any member or members of the bodycomprising the agency.

(d) DECLARATORY ORDERS.-The agency is authorized in'its sounddiscretion, with like effect as in the case of other orders, to issuea declaratory order to terminate a controversy or remove uncertainty.

4


ANCILLARY MA'TERS

SEC. 6. Except as otherwise provided in this Act-(a) APPEARANCE.-Any person compelled to appear in person

before any agency or representative thereof shall be accorded theright to be accompanied, represented, and advised by counsel or, ifpermitted by the agency, by other qualified representative. Everyparty shall be accorded the right to appear in person or by or withcounsel or other duly qualified representative in any agency .proceed-ing. So far as the orderly conduct of public business permits, anyinterested person may appear before any agency or its responsibleofficers or employees for the presentation, adjustment, oi determina-tion of any issue, request, or controversy in any proceeding (inter-locutory, summary, or otherwise) or in connection with. any agencyfunction. Every agency shall proceed with reasonable dispatch toconclude any matter presented to it except that' due regard shall behad for the convenience and necessity of the parties or theirt repre-sentatives. Nothing herein shall be construed 'either to grant or todeny to any person who is not a lawyer the right to appearv for orrepresent others before any agency or in any agency proceeding.

(b) INvESTIGATIoNs.-No process, requirement of a report, inspec-tion, or other investigative act or demand shall be issued, made, orenforced in any manner or for any purpose except as authorized bylaw. Every person compelled to submit data or evidence shall beentitled to retain or, on payment of lawfully prescribed costs, procurea copy or transcript thereof, except that in a nonpublic'investigatoryproceeding the witness may for good cause be limited to inspection ofthe official transcript of his testimony.

(c) SurIPENAs.-Agency subpenas authorized by law shall be issuedto any party upon request and, as may be required by rules of pro-cedure, upon a statement or showing of general relevance and reason-able scope of the evidence sought. Upon contest the court. shall sustainany such subpena or similar process or demand to the extent that it isfound to be in accordance with law and, in any proceeding for enforce-ment, shall issue an order requiring the appearance of the witness orthe production of the evidence or data within a reasonable time underpenalty of punishment for contempt in case of contumacious failureto comply.

(d) DENIALs.-Prompt notice shall be given of the denial in wholeor in part of any written application, petition, or other request of anyinterested person made in connection with any agency proceeding.Except in affirming a prior denial or where the denial is self-explana-tory, such notice shall be accompanied by a simple statement ofprocedural or other grounds.

HEARINGa

SEC. 7. In hearings which section 4 or 5 requires to be conductedpursuant to this section-

(a) PRESIDING orFICERs.-There shall preside at the.taking of evi-dence (1) the agency, (2) one or more members of the body whichcomprises the agency, or (3) one or more, examiners appointed asprovided in this Act; but nothing in this Act shall be deemed to

-supersede the .conduct of specified classes of proceedings in whole or


part by or before boards or other officers specially provided for by ordesignated pursuant to statute. The functions of all presiding officersand of officers participating in decisions in conformity with section8 shall be conducted in an impartial manner. Any such officer may atany time withdraw if he deems himself disqualified; and, upon thefiling in good faith of a timely and sufficient affidavit of personal biasor disqualification of any such officer, the agency shall determine thematter as a part of the record and decision in the case.

(b) HEARING PowEns.-Officers presiding at hearings shall haveauthority, subject to the published rules of the agency and within itspowers, to (1) administer oaths and affirmations, (2) issue subpenasauthorized by law, (3) rule upon offers of proof and receive relevantevidence, (4) take or cause depositions to be taken whenever the endsof justice would be served thereby, (5) regulate the course of the hear-ing, (6) hold conferences for the settlement or simplification of theissues by consent of the parties, (7) dispose of procedural requestsor similar matters, (8) make decisions or recommend decisions inconformity with section 8, and (9) take any other'action authorizedby agency rule consistent with this Act. ·

(c) EIDENcE.--Except as statutes otherwise provide, the propo-nent of a rule or order shall have the burden of proof. Any oral ordocumentary evidence may be received, but every agency shall as amatter of policy provide for the exclusion of irrelevant, immaterial,or unduly repetitious evidence and no sanction shall be imposed orrule or order be issued except upon consideration of the whole recordor such portions thereof as may be cited by any party and as sup-ported by and in accordance with the reliable, probative, and sub-stantial evidence. Every party shall have the right to present hiscase or defense by oral or documentary evidence; to submit rebuttalevidence, and to conduct such cross-examination as may be requiredfor a full and true disclosure of the facts. In rule making or deter-mining claims for money or benefits or applications for initial licensesany agency may, where the interest of any party will not be pre-judiced thereby, adopt procedures for the submission of all or partof the evidence in written form.

(d) RECORD.-The transcript of testimony and exhibits, togetherwith all papers and requests filed in the proceeding, shall constitutethe exclusive record for decision in accordance with section 8 and,upon payment of lawfully prescribed costs, shall be made available tothe parties. Where any agency decision rests on official notice of amaterial fact not appearing in the evidence in the record, any partyshall on timely request be afforded an opportunity to show the con-trary.

DECISIONs

SEC. 8. In cases in which a hearing is required to be conducted inconformity with section 7-

(a) ACTION BY SUBORDINATES.--In cases in which the agency hasnot presided at the reception of the evidence, the officer who presided(or, in cases not subject to subsection (c) of section 5, any other officeror officers qualified to preside at hearings pursuant to section 7) shallinitially decide the case or the agency shall require (in specific casesor by general rule) the entire record to be certified to it for initialdecision. Whenever such officers make the initial decision and in

6


the absence of either an appeal to the agency or review upon motionof the agency within time provided by rule, such decision shall withoutfurther proceedings then become the decision of the agency. Onappeal from or review of the initial decisions of such officers the agencyshall, except as it may limit the issues upon notice or by rule, have'all the powers which it would have in making the initial decision.Whenever the agency makes the initial decision without having pre-sided at the reception of the evidence, such officers shall first recom-mend a decision except that in rule making or determining applicationsfor initial licenses (1) in lieu thereof the agency may issue a tentativedecision or any of its responsible officers may recommend a decisionor (2) any such procedure may be omitted in any case in which theagency finds upon the record that due and timely execution qf itsfunctions imperatively and unavoidably so requires.

(b) SUBMIrALS AND DECISIONS.-Prior to each recommended,initial, or tentative decision, or decision upon agency review of thedecision of subordinate officers the parties shall be afforded a reason-able opportunity to submit for the consideration of the officers partici-pating in such decisions (1) proposed findings and conclusions, or(2) exceptions to the decisions or recommended decisions of subordi-nate officers or to tentative agency decisions, and (3) supportingreasons for such exceptions or proposed findings or conclusions. Therecord shall show the ruling upon each such finding, conclusion, orexception presented. All decisions (including initial, recommended,or tentative decisions) shall become a part of the record and includea' statement of (1) findings and conclusions, as well as the reasonsor basis therefor, upon all the material issues of fact, law, or discre-tion presented on the record; and (2) the appropriate rule, order,sanction, relief, or denial thereof.

SANCTIONS AND POWERS

SEC. 9. In the exercise of any power or authority-(a) IN GENERAL.-NO sanction shall be imposed or substantive rule

or order be issued except within jurisdiction delegated to the agencyand as authorized by law.

(b) LICENSES.-In any case in which application is made for alicense required by law the agency, with due regard to the rights orprivileges of all the interested parties or adversely affected personsand with reasonable dispatch, shall set and complete any proceedingsrequired to be conducted pursuant to sections 7 and 8 of this Act orother proceedings required by law and shall-make its decision. Ex-cept in cases of willfulness or those in which public health, interest orsafety requires otherwise, no withdrawal, suspension, revocation, orannulment of any license shall be lawful unless, prior to the institutionof agency proceedings therefor, facts or conduct which may warrantsuch action shall have been called to the attention of the licensee by theagency in writing and the licensee shall have been accorded oppor-tunity to demonstrate or achieve compliance with all lawful require-ments. In any case in which the licensee has, in accordance withagency rules, made timely and sufficient application for a renewal or anew license, no license with reference to any activity of a continuingnature shall expire until such application shall have been finally de-termined by the agency.


JuDICIAL REvIEW

SEC. 10. 'Except'so far cas (1) statutes preclude judicial review or(2) agency action is by law committed to agency discretion-

(a) RIGHT OF REVIEW.-Any person suffering legal wrong becauseof any agency action, or adversely affected or aggrieved by suchaction withini the meaning of any relevant statute, shall be entitled tojudicial review thereof.

(b) ' ORM AND VEN.UE OF ACTION.-The form of proceeding for judi-cial review shall be any special statutory review proceeding relevantto the' subject matter in any court specified by statute'or, in theabsence' of inadequacy thereof, any applicable form of legal action(including actions for declaratory judgments or writs of prohibitoryor mandatory injunction or habeas corpus) in any court of competentjurisdiction. Agency action shall be subject to judicial review incivil'or criminal proceedings for judicial enforcement except to theextent that prior, adequate,' and exclusive opportunity for such reviewis provided by'law. '

(c) REVIEWABLE ACrT.--Every agency action made reviewable bystatute and 'every final agency action for which' there is no otheradequate remedy in any court shall be subject to judicial review.Any preliminary, procedural, or intermediate agency action 'or rulingnot directly 'reviewable shall be subject to review upon the review ofthe final' agency action. Except as otherwise expressly required bystatute, agency action otherwise final shall be final for the purposesof this siibsection whether or not there has been presented or deter-mined. any application for a declaratory order, for 'any form of recon-sideration, or (unless the agency otherwise requires by rule and pro-vides that the action meanwhile shall be inoperative)' for an appealto superior agency authority.

(d) INTERIM RELIEF.-Pending judicial review any agency isauthorized, where it finds that justice so requires, to postpone theeffective date of any action 'taken by it. Upon such conditions asmay be ~required and to the extent necessary to prevent irreparableinjuryj every. reviewing court (including every court to which a casemay be taken on appeal from or upon application for certiorari orother writ to a reviewing court) is authorized to issue all necessaryand appropriate process to postpone the effective date' of any agencyaction or' to preserve status or rights pending conclusion of the reviewproceedings.

(e) SCOPE OF. REVIEw.-So far as necessary to decision and wherepresented the reviewing court shall decide all relevant questions oflaw, interpret constitutional and statutory provisions, and determinethe meaning or applicability of the terms of any agency action. Itshall (A) compel agency action unlawfully withheld or unreasonablydelayed; and (B) hold unlawful and set aside agency action, findings,and conclusionhs found to be (1) arbitrary, capricious, an abuse ofdiscretion, or otherwise not in accordance with law; (2) contrary toconstitutional right, power, privilege, or immunity; (3) in excess ofstatutory jurisdiction, authority, or limitations, or short of statutoryright; (4) without observance of procedure required by law; .(5)unsupported by substantial evidence in any case subject to the require-ments of sections 7 and 8 or otherwise reviewed on the record of anagency hearing provided by statute; or (6) unwarranted by the facts


to the extent that the facts are subject to trial de novo by the reviewingcourt. In making the foregoing determinations the court shall reviewthe 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.

EXAMINERS

SEC. 11. Subject to the civil-service and other laws to the extentnot inconsistent with this Act, there shall be appointed by and foreach agency as many qualified and competent examiners as may benecessary for proceedings pursuant to sections 7 and 8, who shall beassigned to cases in rotation so far as practicable and shall performno duties inconsistent with their duties and responsibilities as examin-ers. Examiners shall be removable by the agency in which they areemployed only for good cause established and determined by theCivil Service Commission (hereinafter called the Commission) afteropportunity for hearing and upon the record thereof. Examinersshall receive compensation prescribed by the Commission independ-ently of agency recommendations or ratings and in accordance withthe Classification Act of 1923, as amended, except that the provisionsof paragraphs (2) and (3) of subsection (b) of section 7 of saidAct, as amended, and the provisions of section 9 of said Act, asamended, shall not be applicable. Agencies occasionally or tempo-'rarily insufficiently staffed may utilize examiners selected by theCommission from and with the consent of other agencies. For thepurposes of this section, the Commission is authorized to makeinvestigations, require reports by agencies, issue reports, including anannual report to the Congress, promulgate rules, appoint suchadvisory committees as may be deemed necessary, recommend legisla-tion, subpena witnesses or records, and pay witness fees as establishedfor the United States courts.

CONSTRUCTION AND EFFECT

SEC. 12. Nothing in this Act shall be held to diminish the con-stitutional rights of any person or to limit or repeal additionalrequirements imposed by statute or otherwise recognized by law.Except as otherwise required by law, all requirements or privilegesrelating to evidence or procedure shall apply equally to agencies andpersons. If any provision of this Act or the application thereof isheld invalid, the remainder of this Act or other applications of suchprovision shall not be affected. Every agency is granted all author-ity necessary to comply with the requirements of this Act throughthe issuance of rules or otherwise. No subsequent legislation shallbe held to supersede or modify the provisions of this Act except tothe extent that such legislation shall do so expressly. This Act shalltake effect three months after its approval except that sections 7and 8 shall take effect six months after such approval, the require-ment of the selection of examiners pursuant to section 11 shall notbecome effective until one year after such approval, and no pro-cedural requirement shall be mandatory as to any agency proceedinginitiated prior to the effective date of such requirement.

Approved June 11, 1946.

SENATE JUDICIARY COMMITTEE PRINT, JUNE 1945'

NoTE.-In May 1945 the Committee on the Judiciary of the Senateissued a Committee Prinit containing in two columns the text of the billas originally introduced by Senator McCarran, Chairman of theCommittee, on January 6, 1945, together with a parallel column con-sisting of a "revised text developed through informal conferenceswith interested parties" and some notes explaining shifts of languagefrom one provision to another. This Print was reproduced in the laterone of June 1945, to which was added a third column containing an"explanation of provisions with references" and a fourth column of"suggestions and objections of interested parties with reference torevised text".

The originally introduced text is not reproduced here, since it is thesame as the text of H. R. 1203 beginning at page 155 and the explana-tions and comments relate to the revised text. There is reproducedbelow, in one column, the revised text in italics followed as to eachprovision by notes, explanations, and suggestions appearing in theCommittee Print of June 1945. First, however, there appear the twoexplanatory paragraphs in the Print. Editorial inserts, made neces-sary by the more convenient one-column form used below, arebracketed.

EXPLANATIONS

[Beneath] each paragraph of the revisedtext as presented [belowin italics] is a statement of the purport, derivation, or relation of theprovision. References are made to the final report of the AttorneyGeneral's Committee on Administrative Procedure and to other au-thorities. The committee has also had the benefit of the report of thePresident's Committee on Administrative Management, the mono-graphs issued by the Attorney General's Committee respecting eachimportant Federal agency, the several volumes of hearings by a sub-committee of this committee in 1941, and the current hearings beforethe House Judiciary Committee.

SUGGESTIONS

[Under this heading, as it appears below in connection with eachproposed statutory provision, are] summaries of the objections andsuggestions submitted by governmental agencies and others to June29, after the tentatively proposed revision * * * was publishedand distributed. Many of the comments received from administrativeagencies raise problems of language present in any legislation, whichcan be clarified in the report accompanying the bill. Agency responsesof a very general or nonspecific nature, which are not included in thefollowing summaries, may be grouped as follows:

1. Accord with the purpose of the bill and its specific provisionswith stated exceptions.

90600-46---2 11


2. Oppose any such measure either because of fear of hidden diffi-culties; because of asserted impossibility of drawing one measure toregulate all agencies; or because it is felt there is little need forlegislation.

3. Request to be exempted in toto from any measure which may bereported.

4. No comment, either generally or specifically.The typical general response from private interests or organizationsis that the bill "does not go far enough", in either its'original or re-vised form. Subsequent references' * * * are to' the revised textas presented [below in italics.]

[TITLE]

[SEC. 1.] This Act may be cited as the "Administrative ProcedureAct."

DEFINITIONS

Sec. 2. As used in this Act-

SUGGESTIONS

It has been suggested that "foreign-affairs functions" should bedefined and added to section 2 in order to exclude from the operation ofthe measure all passport and visa functions as well as all duties ofconsular and diplomatic officers abroad. However, so far as theseare not foreign affairs functions "requiring secrecy in the public in-terest," there' would seem to be no reason why they should not besubject to the simple public information requirements of section 3.Whether or not they are in all aspects strictly "foreign-affairs func-tions," the rule makmg provisions of section 4 do not apply to organi-zational or procedural rules nor to other rules where the simple pro-cedures required are found impracticable. Since these functions arenot required by statute to be made upon: administrative hearing, sec-tions 5, 7, and 8 relating to adjudications, hearings, and decisions areinapplicable.

(a) Agency.--"Agency" means each authority of the Governmentof the United States other than Congress, the courts, or the govern-ments of the possessions, Territories, or the District of Columbia but,except as to the 'requirements of section 3, does not include agenciescomposed of representatives of the parties or of organizations of theparties to the disputes determined by them and war functions exemptedby section 13.

EXPLANATION

The term "aency" is defined substantially as in the Federal ReportsAct of 1942 (Public, No. 831, 77th Cong., 2d sess., Dec. 24, 1942), theFederal Register Act (sec. 4, 49 Stat. 500, 44 U. S. C. 304), and'theFederal Register Regulations (1 C. F. R. 2.1 (b), as revised by 6 F. R.

12


4397). It should be noted that the definition of agencies does notmean that all acts of such agencies are subject to the procedural re-quirements. The definition of agency is merely a preliminary devicefor inclusion and exclusion. If an agency is subject to the proposalunder this section, nevertheless it is subject thereto only to the extentthat acts, rules, or orders are defined and not further excluded in thefollowing sections and subsections.

SUGGESTIONS

The following agency comments have been received:(1) It is suggested that all functions of the War and Navy De-

partments as well as of the Army and Navy should be exempted. How-ever, since the bill relates to functions rather than agencies, it wouldseem better to define functions. All departments may, and often do,exercise civil and regulatory powers which should be subject to anadministrative procedure statute. So far as war powers should beexempted, that should be done in section 13 where appropriate com-ment is made.

(2) Question has been raised as to the definition of "agency", butit would seem that the matter may be sufficiently explained in the com-mittee report. It is necessary to define agency as "authority" ratherthan by name or form, because of the present system of including oneagency within another or of authorizing internal boards or "divisions"to have final authority. "Authority" means any officer or board,whether within another agency or not, which by law has authority totake final and binding action with or without appeal to some superioradministrative authority. Thus "divisions" of the Interstate Com-merce Commission and the so-called Schwellenbach Officer of the De-partment of Agriculture would be "agencies" within this definition.Any other form of definition would raise serious difficulties in SeveralFederal agencies. If deemed necessary, appropriate language may beadded to the definition.

(b) Person and Party.-"Person" includes individuals, partner-ships, corporations, associations, or public or private organizations ofany character other than agencies. "Party" includes any person oragency participating, or properly seeking and entitled to participate,in any agency proceeding or in proceedings for judicial review of anyagency action.

EXPLANATION

The words "person" and "party" are defined as in many statutes andregulations. The definition stated is self-explanatory.

(c) Rule and Rule Making.-"Rule" means the whole or any partof any agency statement of general applicability designed to imple-ment, interpret, or prescribe law or policy or to describe the organiza-tion, procedure, or practice requirements of any agency. "Rule mak-ing" means agency process for the formulation, amendment, or repealof a rule and includes rate making or wage or price fixing.


EXPLANATION

The definition of rule making and rule follows essentially the defini-tions of the Federal Register Act (sees. 5 (a) and 11 (a), 49 Stat. 500,44 U. S. C. 305 (a) and 311 (a) ), in which the essential language is"general applicability and legal effect." The reason for the sharpdistinction between rule making and adjudication (see the next sub-section) is that they are the two main types of administrative justice(see the Final Report, Attorney General's Committee on Adminis-trative Procedure, Senate Document No. 8, 77th Cong., 1st sess., 1941,pp. 1-2, 5, and chs. IV, V, and VI, hereinafter referred to as "FinalReport, Attorney General's Committee" with page references). Theprocedure in rule making differs from adjudication in essentialrespects.

SUGGESTIONS

The House Judiciary Committee hearings and some of the agencycomments disclose a misunderstanding that "rule making" includesrate making or price or wage fixing, although both on principle, underthe repeated decisions of the Supreme Court, and by the specific lan-guage of subsection 2 (c) such functions are definitely rule making.The classification of these functions as rule making, which they prop-erly are, is important because many provisions of the bill do not applyto rule making. If deemed necessary, the language of the definitionmay be amplified by adding, after the word "include" in the secondsentence, the words "the prescription for the future of rates, wages,prices, facilities, appliances, services, allowances therefor, or of valua-tions, costs, accounting, or practices bearing thereon."

(d) Order and Adjudication.-"Order" means the whole or anypart of the final disposition (whether affirmative, negative, or declara-tory in form) of any agency in any matter involving a private person,and "adjudication" means agency process for the formulation of anorder other than rule making but including licensing.

EXPLANATION

"Adjudication" has not been defined generally in statutes, exceptby implication or reference to particular subjects and orders. How-ever,. since there are only two basic types of administrative justice-rule making and adjudication-the words "other than rule making"serve to make the essential distinction.

(e) License and Licensing.-"License" includes the whole or partof any agency permit, certificate, approval, registration, charter, mem-bership, or other form of permission. "Licensing" means agency proc-ess respecting the grant, renewal, denial, revocation, sutspension, an-nulment, withdrawal, limitation, or conditioning of a license.

EXPLANATION

"License" and "licensing" is defined in order to make definite andinclusive the functional provisions and exceptions contained in varioussubsequent sections.

14


(f) Sanction and Relief.-"Sanction" includes, in whole or partby an agency, any (1) prohibition, requirement, limitation, or othercondition upon or deprivation of the freedom of any person; (2) with-holding of relief; (3) imposition of any form of penalty or finc:(4) destruction, taking, seizure, or withholding of property; (5) as-

sessment of damages, reimbursement, restitution, compensation, costs,charges, or fees; or (6) requirement of a license or other compulsoryor restrictive act. "Relief" includes, in whole or part by an agency,any (1) grant of money, assistance, authority, exemption, privilege,or remedy; (2) recognition of any claim, right, or exception; or (3)taking of other action beneficial to any person.

EXPLANATION

"Sanction" and "relief" are defined in order to simplify the languageof parts of sections 9 and 10.I

(g) Agency Proceeding and Action.--"Agency proceeding" mea'lsany agency process as defined in subsections (c), (d), and (e) of thissection. For the purposes of section 10, "agency action" includes thewhole or part of every agency rule, order, license, sanction, relief, orthe equivalent or denial thereof.

EXPLANATION

"Agency proceeding" and "agency action" are defined in order tosimplify the language of some of the renlaining provisions.

PUBLIC INFORMATION

Sec. 3. Except to the extent that there is involved (1) any -military,naval, foreign affairs, or other function of the United States requiringsecrecy in the public interest, or (2) any matter relating solely to theinternal management of an agency-

EXPLANATION

The Attorney General's Committee unanimously agreed that "animportant and far-reaching defect in the field of administrative lawhas been a simple lack of adequate public information concerningits substance and procedure," in which connection the Committee alsopointed out that the Federal Register and Code of Federal Regula-tions statutes "did not provide affirmatively for the making of neededtypes of rules or for the issuance of other forms of information.* * * A primary legislative need, therefore, is a definite recogni-tion, first, of the various kinds or forms of information which oughtto be available and, second, of the authority and duty of agencies toissue such information" (Final Report, pp. 25-26, and see also pp.123-124). The introductory exception is self-explanatory.


(a) Rules.-Every agency shall separately state and currentlypublish in the Federal Register (1) descriptions of its central andfield organization, (2) the established places and methods whereby the'public may secure information or make submittals or requests, (3)statements of the general course and method by which its rule maklng*and adjudicating functions are channeled and determined, includingthe nature and requirements of all formal or informal proceduresavailable as well as forms and general instructions as to the scope andcontents of all papers, reports, or examinations, and (4) substantiverules adopted as authorized by laws and statements of general policyor interpretations formulated and adopted by the agency for theguidance of the public.

EXPLANATION

This subsection states the kinds of rules agencies shall state or pub-lish. The Final Report of the Attorney General's Committee at pages26-28 lists them as the types of rules which "agencies should be au-thorized and directed to make and issue." The Committee also em-phasized that the several types of information should be separatelystated and their publication kept current. Section 3 (a), however,does not require the making of any substantive or interpretative rulesor statements of policy.

SUGGESTIONS

The following agency comment has been made:(1) It is said that a requirement that agencies describe in rules the

"course and method" by which its rule making and adjudicating func-tions are carried out would be contrary to the public interest. If thatis said because of the difficulty of stating details, the answer is thatthe provision requires only a statement of the "general" course andmethod. If it is meant literally, the answer is given by the AttorneyGeneral's Committee comment quoted [above].

(2) It is said that this section requires agencies to include the "sub-stantive criteria" whereby cases are decided, but the language ob-viously makes no such requirement and indeed the last numbered cate-gory expressly states that substantive material need be published onlywhere affirmatively framed by the agency for the guidance of thepublic. As a matter of fact, perhaps the words "for the guidance ofthe public" should be omitted because the public should have the benefitof any substantive rules or directions the agency may frame.

(3) It is suggested that procedural information should be requiredto be published or, in the alternative, merely made available to publicinspection; but the answer would seem to be that the Federal Registeris the established organ whereby information is conveyed to the pub--lic. It was established for that purpose and the Attorney General'sCommittee recommends that it be used for that purpose in connectionwith administrative procedure. Not to do so will in most cases leaveparties without any practical recourse to the information.

(b) Rulings and Orders. ;Every agency shall publish or makeavailable to public inspection all its generally applicable rulings om

16


questions of law and all final opinions or orders in the adjudication ofcases except those required for good cause to be held confldential. andnot cited as precedents.

EXPLANATION

This section requires that rulings and orders either be published orotherwise made available to public inspection. Since rulings and or-ders made in the course of adjudication of particular cases are oneofthe principal sources of administrative. law, it is obviously necessarythat they be published or. made available ,to public inspection. . Theessential nature and value of this type of material were, emphasizedby the Attorney General's Committee at pages 26-28 of its FinalReport.

(c) Public Records.-Matters of oicial record. shall, to the extentconsistent with the public interest, be available to persons properlyand directly concerned except personal data, information required bylaw to be held confidential, or, for good cause found and upon pub-lished rule, other specified classes of information.

EXPLANATION

This subsection merely provides that appropriate matters of officialrecord shall be made available to properly interested persons.

SUMGESTIONS

It has been 'suggested that the phrase "personal data" be clarified,which if necessary, may be done in the committee report..

RULE MAAKING

Sec. 4. Except to the extent that there is'involved (1) any military,naval, or foreign affairs function of the United States or (2) anymatter relating to agency management, Government 'personnel, orpublic property or contracts-

EXPLANATION

The introductory exceptions to the procedural requirements of rulemaking are self-explanatory.

SUGGESTIONS

The following comments.have been: made:(1) The phrase "military -functions" should be clarified, particu-

larly for the purpose of including within it all proceedings relating tocourt martial. As heretofore indicated, the subject would seem moreappropriate for section 13.


(2) Objection is made to the entire section on the ground that itshould not be applied to minimum wage determinations of the Depart-ment of Labor in connection with public contracts. The last sentenceof the following subsection (a), however, amply provides for properexemptions.

(3) It is suggested that the second part of the introductory clauseof the section should include public "loans, grants, benefits". If theexemption provision of the last sentence of the following subsection(a) is not deemed sufficient to care for any question in this respect,those words may be added after the word "property" in the intro-ductory clause.

(a) Notice.--General notice of proposed substantive rule mak-ing shall be published in the Federal Register and shall include (1) astatement of the time, place, and nature of public rile nmaking pro-ceedings, (2) reference to the authority under which the rule is pro-posed, and (3) either the terms or substance of the proposed rule or adescription of the subjects and issues involved. Except wherenotice or hearing is required by statute, this subsection shall not applyto interpretative rules, general statements of policy, rules of agencyorganization, procedure, or practice, or in any situation in which theagency, for good cause, affirmatively finds (and incorporates the find-ing in the rules issued) that notice and public procedure thereon areimpracticable, unnecessary, or contrary to the public interest.

EXPLANATION

The Attorney General's Committee found that public rule makingprocedures "are likely to be diffused and of little real value either tothe participating parties or to the agency, unless their subject matteris indicated in advance. * * * In principle, therefore, eachagency should be obliged to announCe with the greatest possible defi-niteness the matters tobe discussed in rule making proceedings" (FinalReport, Attorney General's' Committee, p. 108). Subsection (a) re-quires notice only in the making of substantive rules and then onlywhere not impracticable or unnecessary or contrary to public interest,and lists the types of information to be contained in such notices.The limitation of the notice requirement is significant, because uponit depends the requirement of procedures contained in subsection (b)which follows. The reason for the exclusion of rules of organization,procedure, interpretation, and policy is threefold: First, it is desiredto encourage the making of such rules. Secondly, those types of rulesvary so greatly in their contents and the occasion for their issuancethat it seems wise to leave the matter of notice and public proceduresto the discretion of the agencies concerned. Thirdly, the provision forpetitions contained in subsection (c) affords an opportunity forprivate parties to secure a reconsideration of such rules when issued.Another reason, which might be added, is that "interpretative" rules-as merely interpretations of statutory provisions-are subject toplenary judicial review, whereas "substantive" rules involve a maxi-mum of administrative discretion.


SUGGESTIONS

The following comment has been made:(1) It is suggested that "substantive" should be defined and clarified.

The meaning of the phrase "substantive rule" is well defined in courtdecisions and upon principle. Further clarification may be suppliedin the committee report. Furthermore, the second sentence enumer-ates what is not made mandatory in the first.

(2) The subsection has been criticized on the ground that the twosentences, read together, raise a "confusing implication that 'rules ofagency organization, procedure, or practice' constitute substantiverules" because the phrase "substantive rule making" is used as the sub-ject of the first sentence and the others are then included in the kinds ofrules exempted by the second. Strictly speaking, it should be unnec-essary to provide in the second sentence that procedural or organiza-tional rules are exempted; but the exemption was specified out of anabundance of caution lest it be thought by those unversed in admin-istrative law definitions that they might be included in the noticerequirement.

(3) Objection is made that the final clause of the subsection is toobroad an avenue through which agencies may "escape" the requirementof notice and procedure, but the answer would seem to be that thelanguage as written requires agencies to act in good faith and dispensewith the requirements only for good cause.

(b) Procedures.-After notice required by this section, the agencyshall afford interested parties an opportunity to participate in therule making through submission of written data, views, or argumentwith or without opportunity to present the same orally in any manner;and, after consideration of all relevant matter presented, the agencyshall incorporate in any rules adopted a concise general statementof their basis and purpose. Where rules are required by law to bemade upon the record after opportunity for or upon an agency hearing,the requirements of sections 7 and 8 shall apply in place of the pro-visions of this subsection.

EXPLANATION

This subsection, which provides for public rule making procedures,applies only to the type of rules for which notice is required by sub-section (a) above-that is, substantive rules, which involve true ad-ministrative legislation. As to that type of rules, moreover, it leavesagencies free to choose from the several common types of informalpublic rule making procedures, the simplest of which is to permitinterested persons to submit written views or data, except where Con-gress has required that rules be issued only upon a hearing. In thelatter case, the hearing and decision procedures of sections 7 and 8necessarily apply. Thus, the provision does not extend present re-quirements except to require agencies, in the issuance of substantiverules, to permit at least the submission of written views or sugges-tions. This minimum requirement is based upon the premise statedas follows by the Attorney General's Committee (Final Report, pp.101-103): "An administrative agency * * * is not ordinarily a

19


representative body. * * * Its deliberations are not carried onin public and its members are not subject to direct political controlsas are legislators. * * * Its knowledge is rarely coinplete, andit must always learn the'. * * viewpoints of those whom itsregulations will affect. * * * [Public] participation * * *'in the rule-making process is essential in order to permit administra-tive agencies to inform themselves and to afford safeguards to privateinterests. It may be accomplished by oral or written communicationand consultation; by specially summoned conferences; by advisorycommittees; or by hearings." It should be noted that no requirementof formal administrative hearing is imposed except where Congresshas by some other statute required that rules be issued upon hearing.

SUGGESTIONS

Private parties complain that this subsection provides inadequateprocedure, particularly in the matter of findings and conclusions.However, the requirement that agencies consider "all relevant matterpresented" and issue "a concise general statement of their basis andpurpose" would seem to achieve all that more elaborate procedurecould do effectively. The statement of the "basis and purpose" ofrules issued will vary with the rule, but in any case should be fullyexplanatory of the complete factual and legal basis as well as the realobject or objects sought. It is deemed better to have some public pro-cedure in most cases than to have rigorous procedure in a few cases.

.(c) Effective Dates.-The required publication or service of anysubstantive and effective rule (other than one granting exemnption orrelieving restriction) shall precede for not less than thirty days theeffective date thereof except as otherwise provided by the agency upon.good cause found.

EXPLANATION

The Attorney General's' Committee found that: "Some procedureshould be provided to correct error or oversight in regulations before,rather than after, they become effective. This can be done by deferringtheir effectiveness until a specified period after their announcement.A provision of this sort will, moreover, insure notice of the regulationsto interested parties. * * * A number of statutes now in forceprovide for the deferred effectiveness of regulations promulgated un-der them." Final'Report, Attorney General's Committee, pages 114-115.

SUGGESTIONS

The following comments have been made,(1). It is suggested that the words "effective rule" should be clarified.

This may be done by committee report. They mean a rule which isbinding as distinguished from "tentative" or "proposed" rules whichagencies often publish and are encouraged to publish. The first useof the word "effective'" in the sentence might be omitted if:any realconfusion results; but with or without it the meaning of the provisionis clear on its face.


(2) Objection is made to the application of the provision to mini-mum wage determinations in connection with public contracts, butsubsection (a) contains adequate exemption for good cause which isoperative in any proper case.

(3) It is suggested that the provision should not apply to interpreta-tive rules or statements of policy. If the exemption clause is notdeemed ample to care for these types of rules, it may be well to add"or interpretative rules and statements of policy" at the end of the,parenthetical expression in the subsection.

(d) Petitions.--Every agency shall accord any interested personthe right to petition for the issuance, amendment, or rescission of arule.

EXPLANATION

Subsection (d) requires agencies to receive and consider requestsof private parties for the making, modification, or rescission of rules.The Attorney General's Committee proposed that such a provision be.included in legislation (Final Report, pp. 195, 230).

SUGGESTIONS

One agency objects to the statutory statement of a right of petitionon the ground that it would "force" a "tremendous" number of hear-ings. The alternative implied is that no one should have a right ofpetition, leaving action or inaction to the initiative of the agency con-cerned. Even Congress, under the Bill of Rights, is required to accordthe right of petition to any citizen. If a petitioner states and supportsa valid ground for hearing or relief, manifestly he should be entitledto hearing or relief. Not every petition need result in a hearing, justas not every complaint in court need result in trial.

ADJUDICATION

Sec. 5. In every case of adjudication required by statute to be deter-mined on the record after opportunity for an agency hearing, exceptto the extent that there is involved (1) any matter subject to a subse-quent trial of the law and the facts de novo in any court, (2) the selec-tion or tenure of an officer or employee of the United States, (3)proceedings in which decisions rest solely on inspections, tests, orelections, (4) the conduct of military, naval, or foreign affairs func-tions, (5) cases in which an agency is acting as an agent for a court,and (6) the certification of employee representatives-

EXPLANATION

This section defines generally the procedure for the administrativeadjudication of particular cases. The introductory clause removes.from the operation of sections 5, 7, and 8 all administrative proceduresin which Congress has not required orders to be made upon a hearing,and the first of the further exceptions eliminates matters subject to a

21


subsequent trial of the law and the facts de novo in any court. Limit-ing application of the sections to those cases in which statutes requirea hearing is particularly significant, because thereby are excluded thegreat mass of administrative routine as well as pensions, claims, and avariety of similar matters in which Congress has usually intentionallyor traditionally refrained from requiring an administrative hearing.The exception of matters subject to a subsequent trial of the law andthe facts de novo in any court exempts such matters as the tax func-tions of the Bureau of Internal Revenue (which are triable de novoin The Tax Court), the administration of the customs laws (triablede novo in the customs courts), the work of the Patent Office (sincejudicial proceedings may be brought to try out the right to a patent),and subjects which might lead to claims determinable subsequently inthe Court of Claims. This exception also exempts administrativereparation orders assessing damages, such as are issued by the Inter-state Commerce Commission and the Secretary of Agriculture, sincesuch orders are subject to trial de novo in court upon attempted en-forcement. It also exempts contract and property matters triable inthe courts. There should be no disposition to compel administrativehearings where Congress has not already so provided because, aspointed out below in connection with judicial review, the establishedlaw permits a trial de novo. of the facts in all cases of adjudicationswhere statutes do not require an administrative hearing. Moreover,as to subjects triable de novo in the courts, although the administra-tive procedure may in some instances shift the burden of proof theparties have a right to ultimate full judicial process. The otherexemptions are self-explanatory.

SUGGESTIONS

The following comments have been received:(1) It is suggested that "military functions" be further defined or

clarified. This may be done by committee report. So far as the ob-jection relates to the possible inclusion of courts martial proceedings,see the comment to section 13.

(2) It is proposed that proceedings for claims to money damagesbe exempted from the section, but such proceedings are not ordinarilyrequired by statute to be made after agency hearing. Hence, byoperation of the introductory provision, they are exempt from thesection. It is similarly suggested that pension and benefit proceed-ings be expressly exempted, but for the same reason these are not sub-ject to section 5.

(3) One agency requests that its reparation proceedings-thoughsubject to trial de novo in the courts-be made subject to section 5 butnot to subsection (c) relating to the separation of functions. Onprinciple and for the reason stated in the previous paragraph, thistype of proceeding is exempted. If the suggestion is deemed a goodone, after the word "except" the following parenthetical expressionmight be inserted "(unless an agency shall by published rule elect tobe governed by this subsection with or without subsection (c))",thereby permitting proceedings under any of the exempt categories tobe brought under the measure.

(4) It is urged that the second numbered exception should notapply to examiners appointed pursuant to this Act, so that, if their

22


sole protection remains the civil service system, they may be removedonly after a hearing pursuant to the proposed statute. For this pur-pose it is suggested that the following words be added at the end of thesecond exception: "other than examiners appointed pursuant to sec-tion 11".

(5) Question has been raised whether the sixth exception in theintroductory clause of section 5, relating to certification procedure inlabor representation cases, should be included and thus remove suchcases from the operation of sections 5, 7, and 8. Those who desire theexemption state that such things as intermediate reports, findings, andwritten decisions are unnecessary because of the simplicity of theissues, the great number of cases, and the exceptional need for expedi-tion. Those who oppose the exemption say that, on principle, thefunction should be treated as other adjudications and that, so far asthe issues are simple, the intermediate report, findings, and decisionsmay also be simple.

(a) Notice.-Persons entitled to notice of an agency hearing shallbe informed of (1) the time, place, and nature thereof, (2) the legalauthority and jurisdiction under which it is to be held, and (3) thematters of fact and law in issue. In instances in which private per-sons are the moving parties, other parties to the proceeding shall giveprompt notice of issues controverted in fact or law. In fixing thetimes and places for hearings, due regard shall be had for the con-venience and necessity of the parties or their representatives.

EXPLANATION

Since this section, and thereby sections 7 and 8 relating to hearingsand decisions, applies only where statutes require a hearing, noticeof hearing is an obvious and indispensable requisite. The only pur-pose of subsection (a) is to require adequate notice, because "a * * *prerequisite to fair formal proceedings is that when formal action isbegun, the parties should be fully apprised of the subject matter andissues involved. Notice * * * must fairly indicate what therespondent is to meet. * * * Room remains for considerable im-provement in the notice practices of many agencies" (Final Report,Attorney General's Committee, p. 63). The second sentence requiringa statement of controverted issues is essential because of the generallack of requirement for responsive pleadings in administrative pro-ceedings; without such provision moving parties do not know whatissues are controverted.

(b) Procedwre.-The agency shall afford all interested partiesopportunity for (1) the submission and consideration of facts, argu-ment, offers of settlement, or proposals of adjustment where time andthe nature of the proceeding permits and (2), to the extent that theparties are unable to so determrine any controversy by consent, hear-ing and decision upon notice and in conformity iith sections 7 and 8.

23


EXPLANATION

Subsection (b) provides that, even where formal hearing and de-cision procedures are available to parties, the agencies and the partiesare authorized to undertake the informal settlement of cases in wholeor in part before undertaking the more formal hearing procedure.Even courts through pretrial proceedings dispose of much of theirbusiness in that fashion. There is much more reason to do so in theadministrative process, for informal procedures constitute the vastbulk of administrative adjudication and are truly the lifeblood ofthe administrative process (Final Report, Attorney General's Com-mittee, p. 35). The statutory recognition of such informal methodsshould both strengthen the administrative arm and serve to adviseprivate parties that they may legitimately attempt to dispose ofcases at least in part through conferences, agreements, or stipula-tions. It should be noted that the precise nature of informal pro-cedures is left to development by the agencies themselves.

(c) Separation of Functions.-The same officers who preside atthe reception of evidence pursuant to section 7 shall make the recom-mended decision or initial decision pursuant to section 8 except wheresuch officers become unavailable to the agency. Except to the extentrequired for the disposition of ex parte matters as authorized bylaw, no such officer shall consult any person or party on any issueof fact unless upon notice and opportunity for all parties to partici-pate. No officer, employee, or agent engaged in the performance ofinvestigative or prosecuting functions for any agency in any caseshall, in that or a related case, participate or advise in the decision,recommended decision, or agency review pursuant to section 8 exceptas witness or counsel in public proceedings. This subsection shallnot apply in determining applications for licenses nor prevent theagency from supervising or authorizing the issuance of process, com-plaints, or similar papers or from appearing thereon as a party.

NOTE

* * '*Section 5 (c) is confined to adjudication (other thanlicensing) 'and does not apply to rule making.

EXPLANATION

The' first sentence of subsection (c) is designed to assure, in so-called "accusatory" proceedings, that those who hear the case shallparticipate in its decision. The remainder of the subsection, in suchcases, is designed to achieve an "internal" segregation of decidingand prosecuting functions. The minority of the Attorney General sCommittee took the position that there should be a complete separa-tion of functions-that is, that hearings should be held and decisionsmade by an administrative tribunal separate from the agency engagedin investigations and prosecutions, or by a court (Final Report, pp.203-209). The majority, however, took the position that, while "aman who has buried himself in one side of an issue is disabled frombringing to its decision that dispassionate judgment which Anglo-.

24


American tradition demands of officials who decide questions" and the"commingling of functions of investigation or advocacy with the func-tion of deciding are * * * plainly undesirable,' the situationcould and should be remedied "by appropriate internal division oflabor. The problem is simply one of isolating those whoengage in the activity. Independent hearing officers] in-sulated from all phases of a case other than hearing and deciding

'will * * go far toward solving this problem at the level offinal decision on review by the agency heads by permitting the viewsof the investigators and advocates tobe presented only in open hear-ing where they can be known and met by those who may be adverselyaffected by them" (Final Report, pp. 55-57). This majority view isadopted here.

SUGGESTIONS

It is suggested that this subsection be made inapplicable to rulemaking proceedings and reparation cases. But the answer is that theentire section applies only to "adjudications", as shown by the intro-ductory provision, thereby eliminating rule making procee ings underthe definitions stated in subsections 2 (c) and (d). The first num-bered exception in the introductory provision of section 5, of proceed-ings subject to trials de nriovo in the courts, exempts reparation pro-ceedings from the entire section.

(d) Declaratory Orders.-The agency is authorized in its sounddiscretion, with like effect as in the case of other orders, to issue adeclaratory order to terminate a controversy or remove uncertainty.

EXPLANATION

Courts have long recognized the validity of declaratory judgmentprocedures but the administrative process has been slow to adopt suchprocedures. The Attorney General's 'Committee strongly 'recom-mended that the declaratory ruling be made a part of the adminis-trative process and subject to judicialreview (Final Report, pp.6, 30-33).

SUGGESTIONS

Private parties object to leaving the issuance of declaratory ordersto agency discretion. However, the phrase "sound discretion". m'eansa reviewable' discretion and will prevent agencies from either givingimprovident declaratory orders or arbitrarily withholding such ordersin proper cases.

ANCILLARY MATTERS

Sec. 6. Except as otherwise provided in this Act-

EXPLANATION

The provisions of section 6 are designed to.recognize or provide thebasic rule for the several types of matters which may be subsidiary to

25


rule making, adjudication, or other administrative powers and pro-ceedings. They are largely self-explanatory and of obvious appli-cation.

(a) Appearance.-Any person compelled to appear in person beforeany agency or representative thereof shall be accorded the right tobe accompanied and advised by counsel or, if permitted by the agency,by other gualified representative. In other cases, every interestedperson shall be accorded the right to appear in person or by or withcounsel or other duly qualified representative in any agency proceedingor, where time and the nature of the case permit, before any agencyor its responsible officers or employees for the prompt presentation,adjustment, or determination of aniy eisue, request, or controversy. Ineither case, due regard shall be had for the convenience ahlu necessityof the parties or their representatives.

EXPLANATION

This subsection recognizes the right of parties to appear before ad-ministrative agencies and be accorded facilities for the negotiation orsettlement of any matter within the jurisdiction of the agency. It isthus designed to inform both the uninitiated administrator and theunfamiliar party of the right of appearance, thereby precluding eitheradministrators or parties from the view that interviews and negotia-tions must be handled through favored representatives or as a discre-tionary dispensation. The first sentence is a recognition that, in theadministrative process, the benefit of counsel shall be accorded as ofright just as recognized by the Bill of Rights in connection with thejudicial process, and as proposed by the Attorney General's Com-mittee (Final Report, pp. 193, 219). It is to be noted that nonlawyersif permitted by the agency to practice before it, are not excluded fromrepresenting interested parties in administrative matters; for example,class "B" practitioners recognized by the Interstate CommerceCommission.

SUGGESTIONS

The following suggestions have been made:(1) Clarify "interested person." This may be done by committee

report. The phrase is one of recognized meaning, and the AttorneyGeneral's Committee on Administrative Procedure has pointed outthat attempts at more refined statutory definition are probably futile(Final Report, p. 84).

(2) Define "agency proceeding." This has been done in subsection2 (g).

(3) In the first sentence after "accompanied" insert a comma andthe word "represented," so that counsel may present as well as advise.There seems to be no reason why this change may not be made. That isthe meaning of the sentence. In most cases, even where the partymust be personally present as in judicial proceedings of a criminalnature, the representation by counsel may be helpful both to the agencyconcerned and the party.

26


(b) Investigations.-No process, requirement of a report, inspec-tion, or other investigative act or demand shall be enforcible in anymanner or for any purpose except as authorized by law. Every personcompelled to submit data or evidence shall be entitled to retain or,on payment of lawfully prescribed costs, procure a copy or transcriptthereof.

EXPLANATION

Many statutes conferring administrative powers contain authoriza-tion to conduct investigations, but the same statutes rarely includelanguage indicating that such investigations must be confined to thejurisdiction and purposes of the agency to which the authority is dele-gated. Subsection (b) states the established limitations. Althoughscattered precedents hold that such investigative powers are neces-sarily so confined, since otherwise delegations would be unrestrainedand therefore unconstitutional, the basic rule should be included inany administrative procedure statute.

(c) Subpenas.-Agency subpenas authorized by law shall be issuedto any party upon request and, as may be required by rules of pro-cedure, upon a statement or showing of general relevance, necessity,or reasonable scope of the evidence sought. Upon contest the courtshall sustain any such subpena or similar process or demand to theextent that it is found to be in accordance with law and, in any pro-ceeding for enforcement, issue an order requiring the production ofthe evidence or data under penalty of punishment for contempt incase of contumacious failure to do so.

EXPLANATION

Statutory provisions conferring administrative subpena powers areusually incomplete. They confer powers, but say nothing of the con-ditions of issuance or the rights of private parties. Subsection (c) isdesigned to: (1) Assure that private parties as well as agencies shallhave a right to such subpenas. This is an indispensable requisite tofair procedure since if the private party does not have the benefit ofcompulsory process he may not be able to secure witnesses or evidencewhile the agency can have such process for its own purposes.(2) Limit the showing required of private parties so that they maynot be required to disclose their entire case for the benefit of agencyprosecutors. (3) Recognize that a private party may contest thevalidity of an administrative subpena issued against him prior toincurring penalties for disobedience, since otherwise parties may ineffect be deprived of all opportunity to contest the search or seizureinvolved. The "haphazard" and often unfair methods of issuance ofadministrative subpenas were recognized in the Final Report of theAttorney General's Committee (pp. 124-125. 414-415).

SUGOESTIONS

The following suggestions have been made:(1) In the first sentence use the phrase "and reasonable" rather than

"or reasonable" to indicate that the agency may require a showing90600-46- 3


of "relevance, necessity and reasonable scope". If the change weremade, agencies would, strictly speaking, be compelled to require allthe elements or none; as written, agencies may require all or some.

(2) Provide for witness fees. Such provision, like authority toissue subpenas hereinafter mentioned, probably should be made inseparate legislation relating to particular agencies or powers ratherthan by a general statute.

(3) Private parties urge that after the word "be" in the secondsentence there be added, "within the jurisdiction of the agency andotherwise", so that no administrative subpena may be enforced beyondthe lawful jurisdiction of the agency. It is felt that "in accordancewith law" as now stated [in the revised text set forth above] meansthat. If adopted, the suggestion should be understood as not authoriz-ing a complete pretrial in the courts of factual issues committed toexclusively administrative determination; courts should, instead, dono more than satisfy themselves that, legally upon the general factualsituation shown, the agency has jurisdiction of the specific subjectmatter involved.

(d) Denials.-Prompt notice shall be given of the denial in wholeor part of any written application, petition, or other request of anyinterested person made in connection with any agency proceeding.Except in affirming a prior denial or where the denial is self-explana-tory, such notice shall be accompanied by a simple statement of grounds.

EXPLANATION

Subsection (d) calls for prompt notice of denial of applications,and is designed to require notice not only of action but of the groundsin appropriate cases.

Hearings

Sec. 7. In hearings which section 4 or 5 requires to be conductedpursuant to this section-

EXPLANATION

As stated in the comment to section 5, the provisions of section 7respecting hearings are not designed to require hearings where Con-gress has not already done so by statute.

(a) Presiding Officers.--There shall preside at the taking of evi-dence (1) the agency, (2) one or more subordinate hearing officersdesignated from members of the body which comprises the agency, or(3) one or more examiners appointed as provided in this Act; butnothing in this Act shall be deemed to supersede the conduct of speci-fied classes of proceedings in whole or part by or before other officersspecially designated by statute. The functions of all presiding of-ficers and of officers participating in decisions in conformity with sec-

28


tion 8 shall be conducted in an impartial manner. Any such officermay at any time withdraw if he deems himself disqualified; and, uponthe filing in good faith of a timely and sufficient affidavit of personalbias, disqualification, or willful conduct contrary to law of any suchofficer, the agency or another such officer shall after hearing determinethe matter as a part of the record and decision in the case.

EXPLANATION

This subsection contains merely formal provisions with reference tohearing officers. The problem of their selection is presented in sec-tion 11 and the comment thereon.

SUGGESTIONS

The following comments have been received:(1) It is feared that the provision for disqualification of presiding

officers for "willful conduct contrary to law" may be used to try, ininterlocutory fashion, the rulings of such officers during the course of'the hearing. No such result is intended or reasonable. The type ofconduct contrary to law warranting disqualification is that specifiedin section 5 (c) regarding the separation of functions. It should bepossible to care adequately for the point by committee report.

(2) It is also feared that disqualification proceedings may requirethe main hearing to be held in abeyance. However such proceedingswill take place rarely if at all, and then usually before the main casegets under way. There is nothing in the provision which preventsboth proceedings taking place simultaneously.

(b) Hearing Powers.-Officers presiding at hearings shall havepower, in accordance with the published rules and established policiesof the agency and within its powers, to (1) administer oaths and af-firmations, (2) issue s8ubpenas authorized by law, (3) rule upon offersof proof and receive relevant evidence, (4) take or cause depositionsto be taken whenever the ends of justice would be served thereby, (5)regulate the course of the hearing, (6) hold conferences for the settle-ment or simplification of the issues by consent of the parties, (7) dis-pose of procedural requests or similar matters, (8) make decisions orrecommend decisions in conformity with section 8, and (9) take anyother action authorized by agency rule consistent with this Act.

EXPLANATION

The statement of the powers of administrative hearing officers isdesigned to secure that responsibility and status which the AttorneyGeneral's Committee stressed as essential (Final Report, pp. 43-53particularly at pp. 45-46 and 50).

SUGGESTIONS

It has been suggested that this bill should grant the subpena powerto all hearing officers, whether or not the agency has been grantedsuch power. It may seem logical that hearing officers should havecompulsory process powers, but it has been felt that the grant of


such powers is of such a nature and so important as to be better leftto Congress in connection with specific legislation rather than dealtwith by a general statute. If, however, the suggestion is deemedmeritorious, the phrase "authorized by law" should be eliminated fromthe second numbered power in the subsection and witness fees shouldbe provided as mentioned in the comment to subsection 6 (c).

(c) Evidence.-Except as statutes otherwise provide, the proponentof a rule or order shall have the burden of proof. Any evidence maybe received, but no sanction shall be imposed or rule or order be issuedexcept as supported by relevant, reliable, and probative evidence,Every party shall have the right of reasonable cross-examination andto submit rebuttal evidence. In rule neaking or determining applica-tions for licenses any agency may, where the interest of any party willnot be prejudiced thereby, adopt procedures for the submission of all.or part of the evidence in written form subject to opportunity for suchcross-examination and rebuttal.

EXPLANATION

No attempt is made to require the application of the so-called"common law" or "jury trial" rules of evidence in administrative hear-ings. "The absence of a jury and the technical subject matter withwhich agencies often deal, all weigh heavily against a requirementthat administrative agencies observe what is known as the 'commonlaw rules' of evidence for jury trials" (Final Report, Attorney Gen-eral's Committee, p. 70). As a matter of fact, those rules are no longerapplicable in judicial trials, at least in trials in equity or before a courtsitting without a jury. On the other hand, where private parties havethe burden of proof, or seek to adduce evidence or establish defenses,agencies often require precisely that conformity with technical andoutmoded rules of proof. Some recognizable rule, therefore, shouldbe adopted for both private parties and government agencies. Thatsome rule is necessary is evident from the fact that courts requireadministrative action to be supported by "substantial evidence". Asa result, "although administrative agencies may be freed from theobservance of strict common law rules of evidence for jury trials, it iserroneous to suppose that agencies do not * * * observe some'rules of evidence' ", regulations of some agencies "embody extensiverules governing the modes of proving * * crucial issues," andthe Attorney General's Committee "found no general pattern of depar-ture from the basic principles of evidence among administrative agen-cies" (Final Report, p. 70). Accordingly, subsection (c) adopts the"reliable, probative, and relevant" standard stated by the AttorneyGeneral's Committee (Final Report, p. 71). The courts have used thesame standard. Edison. Co. v. Labor Board, 305 U. S. 197, 226, 229,230; Labor Board v. Remington Rand, 94 F. 2d 862, 873 (C. C. A. 2,1938) ; Martel Mills Corp. v. Labor Board. 114 F. 2d 624, 629 (C. C. A.4, 1940); Labor Board v. Service Wood Heel Co., 124 F. 2d 470, 473(C. C. A. 1, 1941); Ellers v. Railroad Retirement Board, 132 F. 2d637 (C. C. A. 2, 1943). The provision for rights of cross examinationand rebuttal is in keeping with the recognition of those rights by theAttorney General's Committee (Final Report, pp. 69-70). Submission

ADMINISTRATIVE PROCEDURE 31of written evidence was also recommended by the Attorney General'sCommittee (Final Report, pp. 67-70). The provision relating toburden of proof is the standard rule.

SUGGESTIONS

The following objections and suggestions have been made:(1) The application of the "rules of evidence" should be provided.

But, assuming that this does not mean the strict jury trial rules, thedifficulty is that there is no definite body of rules of evidence inFederal courts applicable to nonjury cases. There is also seriousquestion whether an attempt to adapt rules in private litigationto administrative procedure would aid either private parties or gov-erroneous. [See the explanation above.]

(2) It is said that the right of cross examination and rebuttalshould not apply in all cases, but the answer would seem to be thatonly "reasonable" cross examination and rebuttal is provided-thusleaving such examination and rebuttal to be adapted to the needs ofthe case or type of case.

(3) It is said that "relevant, reliable, and probative evidence"varies the present and tested rule in administrative law, but this iserroneous. [See the explanation above.]

(4) It is suggested by one agency that the third sentence should berevised to affirmatively state a right to submit oral evidence by makingit read, "Every party shall have the right to present oral or documen-tary evidence and reasonable opportunity for cross examination andto submit rebuttal evidence." Since the next sentence provides forthe submission of written evidence in appropriate cases, there wouldbe no objection to the change.

(5) Several suggestions have been made respecting the provisionfor submission of written evidence. The first is that the provisionshould apply to adjudications as well as to rule making and determin-ing applications for licenses. However, adjudications (or "accusa-tory" proceedings) are traditionally the type' of proceeding in whichseeing and hearing the witnesses is required and subsection 7 (b)permits even in those cases the taking of depositions "whenever theends of justice would be served thereby".

(6) The remaining suggestions as to written evidence are that thewritten-evidence provision should be made applicable to claims andreparation cases. If the suggestion is adopted, the introductorylanguage of the last sentence should read, "In rule making or deter-mining claims for money or benefits or applications for licenses anyagency may", and so forth.

(d) Record.-The transcript of testimony and exhibits, together'with all papers and requests relating to the hearing, shall constitutethe exclusive record for decision in accordance with section 8 and,upon payment of lawfully prescribed costs, be made available to theparties. Where any agency decision rests on offioial notice of amaterial fact not appearing in the evidence in the record, any partyshall on timely request be afforded an opportunity to show the con-trary.


EXPLANATION

This subsection provides that administrative hearinas shall be re-duced to a record, and made available to all parties. The statement ofthe exclusiveness of the record of the administrative hearing is anecessary recognition that upon it, and no other evidence, the furtheradministrative proceedings must be had, the final administrative de-cision made, and judicial review be confined. Unless the record is sorecognized as exclusive, the purpose and value of the hearing may berendered nil, for it is only the record that informs the parties of theevidence for or against them. The rule of official notice is thatrecommended by the Attorney General's Committee, particularly thesafeguard that parties be apprised of matters so noticed and ac-corded an "opportunity for reopening of the hearing in order toallow the parties to come forward to meet the facts intended to benoticed." (Final Report, pp. 71-73.)

DECISIONS

Sec. 8. In cases in which a hearing is reguired to be conducted inconformity with section 7-

EXPLANATION

This section relating to decisions, like section 7 relating to hearings,applies only in cases in which a hearing is required by statute. Seealso the other exceptions to section 5, which automatically carryover into sections 7 and 8.

(a) Action by Subordinates.-In cases in which the agency hasnot presided at the reception of the evidence, an officer or officers quali-fied to preside at hearings pursuant to section 7 shall either initiallydecide the case or the agency shall require (in specific cases or by gen-eral rule) the entire record certified to it for initial decision. Whenever such officers make the initial decision and in the absence of eitheran appeal to the agency or review upon motion of the agency withintime provided by rule, such decision shall without further proceedingsthen become the decision of the agency. On review of the initial deci-sions of such officers the agency shall, except as it may limit the issuesupon notice or by rule, have all the powers which it would have in mak-ing the initial decision. Whenever the agency makes the initial deci-sion without having presided at the reception of the evidence, suchofficers shall first recommend a decision unless in rule making or deter-mining applications for licenses the agency shall first issue a tentativedecision as a basis for post-hearing procedure.

EXPLANATION

The Attorney General's Committee recommended that the officer orofficers who presided at the reception of evidence should not merelymake recommendations to the agency in which they serve, but should go

32

ADMINISTRATIVE PROCEDURE 33further and make an initial decision binding upon the parties in theabsence of administrative or judicial review (Final Report, pp. 50-53). This subsection, however, leaves it to the agency to choose eitherin the individual case or in all cases whether the officer or officerswho heard the evidence shall actually decide the case or merely makea recommended decision for the further consideration of the agency.Such a provision not only allows the agency a discretion to be adaptedto different subjects or cases, but it does not require a sharp breakwith current practice. In licensing or rule, making, however, theagency may issue a tentative decision in lieu of either an initial deci-sion or recommended decision by the officer who presided at thehearings.

SUGGESTIONS

The requirement of a recommended decision by the presiding officeris objected to in wage-hour and in general or regional railroad ratecases. But, because those cases are rule making rather than adjudi-cation, the last sentence permits the agency to issue a tentative decisionin lieu of a recommended decision of the presiding officer. To theextent that the issues are simple-which is the ground put forward foreliminating the intermediate report in wage-hour cases-the recom-mended or tentative decision may also be simple. The objectionstated in wage-hour cases does not indicate whether the requirement ofa tentative report is also objectionable. The objection in general orregional railroad rate cases is taken to either the requirement of arecommended decision or tentative decision. If either or both of theseobjections are felt to require recognition in the bill, some or all of thefollowing parenthetical language may be added after the first word ofthe last sentence: "(except in establishing or adjusting industry-wideminimum wages or in general or regional railroad rate proceedings) ".

(b) Submittals and Decisions.-Prior to each recommended, ini-tial, tentative decision, or decision upon agency review of the decisionof subordinate officers the parties shall be afforded an opportunityfor the submission of, and the offeicers participating in such decisionsshall consider, (1) proposed findings and conclusions where the corn-plexity of the issues so requires, (2) exceptions to the decisions orrecommended decisions of subordinate officers or to tentative agencydecisions, and (3) supporting reasons for such exceptions or pro-posed findings or conclusions. All decisions and recommended ortentative decisions shall be a part of the record and include a statementof (1) the necessary findings and conclusions, and the basis therefor,upon the material issues of fact, law, or discretion and (2) the appro-priate rule, order, sanction, relief, or denial thereof.

EXPLANATION

This subsection, in its first sentence, merely states the recognizedrule respecting proposed findings, exceptions, and argument. The sec-ond sentence deals with the form and content of final decisions anddeterminations. The requirement of written findings and conclusions,


coupled with a statement of reasons, is inlispensably necessary sofar as administrative agencies undertake to make decisions upon therecord of a hearing. The Attorney General's Committee pointed outthe desirability of written opinions or statements of reasons (FinalReport, pp. 29-30). The second sentence also requires administrativeagencies to determine not merely whether they have power but whetherand why, upon the facts, their discretion should be exercised. Such arequirement is illustrated in the decision of the Supreme Court thatwhen an agency determines only "the dry legal question of its power" itfails to determine "whether in employing that power the policies of theact [involved] would be enforced" (Phelps Dodge Corp. v. LaborBoard, 313 U. S. 177, 194-197 (1941)).

SUGGESTIONS

One agency recommends that the subsection include provision forservice on the parties in adjudication, and publication in the FederalRegister in rule making. While such a provision would not seem nec-essary in view of the existing law and practice, it may be added byinserting after the word "record" in the last sentence, a comma andthe words, "served on parties appearing or specifically named and, inthe case of rule making, published in the Federal Register."

SANCTIONS AND POWERS

Sec. 9 In the exercise of any power or authority-

(a) In General.--No sanction shall be imposed or substantive rileor order be iss.ued except within jurisdiction delegated to the agency bylaw and as authorized by statute or lawful contract.

EXPLANATION

This provision, limiting administratively imposed requirements tothe authority granted and delegated, is designed to afford statutoryrecognition for the basic rule of law embodied in judicial decisions.The creation of penalties or benefits is exclusively the province ofCongress.

SUGGESTIONS

It is suggested that the subsection be amended to recognize sanctionsspecified in international agreements. If deemed desirable the sub-section might be amended by adding a comma after the word "statute"and having the remainder of the sentence read, "treaty, authorizedinternational agreement, or lawful. contract."

(b) License.-In any case in which a license is required by law andapplication is made therefor, the agency shall, with due regard to the

34


rights or privileges of all the interested parties or adversely affectedpersons, with reasonable dispatch set and complete any proceedingsrequired to be conducted pursuant to sections 7 and 8 of this Act orother proceedings required by law and make its decision. Except incases of clearly demonstrated willfulness or those in which publichealth, interest, or safety manifestly require otherwise, no withdrawal.suspension, revocation, or annulment of any license shall be lawfulunless, prior to the institution of agency proceedings therefor, factsor conduct which may warrant such action shall have been called tothe attention of the licensee by the agency in writing and such personshall have been accorded opportunity to demonstrate or achieve com-pliance with all lawful requirements. In any case in which the holderthereof has made timely application for a renewal or a new license, nolicense with reference to any activity of a continuing nature shallexpire until such application shall have been finally determined by theagency.

EXPLANATION

This subsection is designed to ameliorate the difficulties where pri-vate parties arerequired to secure licenses. The first sentence requiresthat applications be determined promptly. The second sentence isdesigned to preclude the withdrawal of licenses, except in cases ofwillfulness or the stated cases of urgency, without affording the li-censee an opportunity for the correction of conduct questioned by theagency. Similar provisions are now contained in the banking statutes,except that the latter provide in addition that stated periods of time-sometimes more than one period of warning-shall elapse prior tothe revocation of the equivalent of licenses (Banking Act of 1933,sees. 20, 30, and 31, 48 Stat. 162, as amended, 12 U. S. C. 377, 77, and7 1a; Federal Reserve Act, sec. 13, 38 Stat. 251, as amended, 12 U. S. C.347; R. S. 5144, as amended, 12 U. S. C. 61). The third sentenceautomatically extends a license in any case in which the licensee hasmade timely application for renewal but the granting agency failsto act prior to the expiration of the existing license. A similar pro-vision is contained in the licensing procedure act of the State of Ohio(Act of June 3, 1943, sec. 1 amending sees. 154-167 of the GeneralCode; Amended substitute Senate bill No. 36).

SUGGESTIONS

It is suggested that the provision for the withdrawal of licensesin the second sentence should not be applicable to foreign affairs, in-cluding such matters as visas or airplane permits granted foreigners.If deemed desirable, foreign affairs might be excluded by adding afterthe second word of the second sentence the words and figures "(1)matters of foreign affairs or (2) in".

JUDICIAL REVIEW

See. 10. Except so far as statutes preclude judicial review or agencyaction is by law comrnmitted to agency discretion-


EXPLANATION

The introductory exceptions state the two present general or basicsituations in which judicial review is precluded-where (1) the matteris discretionary or (2) statutes withhold judicial powers. Otherfundamental limitations are included in subsections (a) and (c).

SUGGESTIONS

The following suggestions have been received:(1) It is proposed that the phrase "by law committed to agency

discretion" might be clarified to indicate that judicial review is con-ferred only to correct an "abuse of discretion granted by'law". Sofar as necessary, the matter may be explained by committee report.

(2) It is urged that military functions-particularly courts martialproceedings-require specific exemption. This is dealt with in thecomment to section 13.

(3) It is said that the section would render a rate making agency"impotent". But, as indicated [in the explanation] with reference tosubsection (e) of this section, the rule of review stated is that which isjudicially recognized.

(4) It is urged that money claim cases-including tort claims andthose for pensions or benefits-be expressly exempted. However, tortclaims are determined in the discretion of agencies and hence-are notsubject to review; and, to the extent if any that they may not becommitted to absolute discretion, they should be reviewable somewhere.Contract or quasi-contract claims are reviewable de novo in the Courtof Claims or district courts and hence, under subsection 10 (b), arenot affected by the procedure recognized by this section. Where Con-gress has desired to place pension or benefit cases beyond court review,it has-as in the case of the Veteran's Administration-done so byexpress statute which is specifically preserved by the introductoryclause of this section.

(a) Right of Review.-Any person suffering legal wrong because-of any agency action shall be entitled to judicial review.

(b) Form and Venue of Action.-The form of proceeding forjudicial review shall be any special statutory revzew proceedingrelevant to the subject matter in any court specified by statute or, inthe absence or legal inadequacy thereof, any applicable form of legalaction (including actions f or declaratory judgments or writs of injunc-tion or habeas corpus) in any court of competent jurisdiction. Agencyaction shall be subject to judicial review in civil or criminal proceedingsfor judicial enforcement except to the extent that prior, adequate, andexclusive opportunity for such review is provided by statute.

EXPLANATION

The first sentence states the general situation, that methods of revieware "of two kinds: (a) those contained in statutes and (b) those


developed by the courts in the absence of legislation. * * * Thenon-statutory remedies * * * are available * * * where theremedy provided by statute is not an adequate substitute or does notinclude the particular situation involved" (Final Report, AttorneyGeneral's Committee, pp. 80-82). Although the declaratory judgment"proceeding has not yet been extensively used to bring Federal adminis-trative action before the Federal courts, its potentialities are indicatedby its wide use in other fields" (Final Report, Attorney General'sCommittee, p. 81). In his letter accompanying the veto of the Logan-Walter bill, the Attorney General stated that "Under the DeclaratoryJudgments Act of 1934, any person may now obtain a judgment as tothe validity of * * administrative rules, if he can show suchan interest and present injury therefrom as to constitute a 'case orcontroversy"' (H. Doc. No. 986, 76th Cong., 3d sess.). The secondsentence states the present rule as to enforcement proceedings.

SUGGESTION

An agency suggests that this subsection provides a new form ofreview in de novo cases. But it is expressly provided that "any specialstatutory review relevant to the subject matter" shall not be disturbed,and the recognition of the so-called common-law type of review is inaccord with the authortative statement of existing law as set forth(in the explanation above].

(c) Reviewable acts.-Every agency action made reviewable bystatute and every final agency action for which there is no otheradequate remedy in any court shall be subject to judicial review. Anypreliminary, procedural, or intermediate agency action or ruling notdirectly reviewable shall be subject to review upon the review of thefinal agency action. Any agency action shall be final for the purposesof this section notwithstanding that no petition for rehearing, recon-sideration, reopening, declaratory order, or (unless the agency other-wise requires by rule) petition for review has been presented to ordetermined by the agency.

EXPLANATION

Subsection (c), defining reviewable acts, is designed also to negativeany intention to make reviewable merely preliminary or proceduralorders where there is a subsequent and adequate remedy at law avail-able, as is presently the rule (Final Report, Attorney General's Com-mittee, pp. 85-86; Shields v. Utah Idaho Central Ry., 305 U. S. 177(1938); Utah Fuel Co. v. Bituminous Coal Commission, 306 U. S.56 (1939)).

SUGGESTIONS

The following objections have been made:(1) One agency objects to the recognition of a right of review in

public contract and other cases where Congress has not specificallyprovided for judicial review. But, as set forth [in the explanationabove] with respect to subsection 10 (b) above,.the so-called nonstat-utory or common-law type of review was recognized by the Attorney


General's Committee as properly obtaining wherever special statutoryreview is not provided by Congress and legislation does not indicatethat judicial review is precluded or withdrawn. The exceptions statedin the introductory clause of section 10 appear to set forth the propertype of issues not subject to judicial review. If a party can show thathe is "suffering legal wrong" as provided in subsection (a), he shouldhave some means of judicial redress.

(2) It is objected that the provision for judicial review of "everyfinal agency action for which there is no other adequate remedy inany court" would provide judicial review of certification proceedingsin labor representation cases. But it is admitted that the languageof the first sentence is a statement of the present general state of thelaw. See also [the explanation with reference to] subsection (b) ofsection 10. Whether NLRB representation cases are so reviewable inequity has not yet been decided by the Supreme Court. The questionthe Court must decide under general law or this subsection is whethersubsequent review in enforcement proceedings is "adequate". To ex-cept certification proceedings in this bill would prejudge the question.

(3) A final objection is that this section, read in the light of thedefinition of agency action in subsection (g) of section 2, would enablecourts to review the failure of an agency to institute proceedings inlabor cases. The point made is that, out of the numerous complaintsand requests received, the responsible agency must have discretionto choose which shall be set down for proceedings. The answer, how-ever, is that the introductory clause of section 10 expressly exempts"agency action * * * by law committed to agency discretion".

(d) Interim Relief.-Pending judicial review any agency is au-thorized, where it finds that justice so requires, to postpone the effectivedate of any action taken by it. Upon such conditions as may be re-quired and to the extent necessary to preserve status or rights, toafford an opportunity for judicial review of any question of law orto prevent irreparable injuwry, every reviewing court and every courtto which a case may be taken on appeal from or upon applicationfor certiorari or other writ to a reviewing court is authorized to issueall necessary and appropriate process to postpone the effective dateof any agency action or temporarily grant or ertend relief deniedor withheld.

EXPLANATION

The first sentence merely confirms administrative authority to granta stay. The second sentence authorizes courts to postpone the effectivedates of administrative judgments or rules in cases in which, as bysubjection to criminal penalties, parties could otherwise have no realopportunity to seek judicial review except at their peril. There is noreason why such a rule should not be recognized as to administrativeagencies, since it is applied in the case of legislation of Congress itself.Cotting v. Kansas City Stockyards, 183 U. S. 79, 101-102; Ex parteYoung, 209 U. S. 123, 145, 147, 163; Wadley Southern Ry. v. Georgia,235 U. S. 651, 662; Chesapeake &c Ohio Railway Co. v. Conley, 230U. S. 513, 521; St. L..I. M. dc So. Ry. v. Williams, 251 U. S. 56, 63;Oklahoma Operating Company v. Love, 252 U. S. 331, 337; Western

38


Union Telegraph Co. v. Richmond, 224 U. S. 160, 172; Reagan v.Farmers Loan & Trust Co., 154 U. S. 362, 395; United States v.Delaware & Hutdson Co., 213 U. S. 366, 417; Wilcox v. ConsolidatedGas Co., 212 U. S. 19.

(e) Scope of Review.-So far as necessary to decision and wherepresented the reviewing court shall, after reviewing the whole recordor such portions thereof as may be cited by the parties, decide all rele-vant questions of law, interpret constitutional and statutory pro-visions, and determine the meaning or applicability of the terms ofany agency action. It shall (A) compel agency action unlawfullywithheld or unreasonably delayed and (B) hold unlawful and setaside agency action, findings, and conclusions found (1) arbitrary,capricious, or otherwise not in accordance with law; (2) contrary toconstitutional right, power, privilege, or immunity; (3) in excess ofstatutory jurisdiction, authority, or limitations, or short of statutoryright; (4) without observance of procedure required by law, resultingin prejudicial error; (5) unsupported by substantial evidence in anycase subject to the requirements of sections 7 and 8, or (6) unwar-ranted by the facts in cases where the facts are subject to trial de novoby the reviewing court.

EXPLANATION

A restatement of the scope of review, as set forth in subsection (e),is obviously necessary lest the proposed statute be taken as limitingor unduly expanding judicial review. "The objections to judicialreview have been generally not to its availability but to its scope"(Final Report, Attorney General's Committee, p. 80). It is not pos-sible to specify all instances in which judicial review may operate.Subsection (e), therefore, seeks merely to restate the several categoriesof questions of law subject to judicial review. Each category has beenrecognized (see Final Report, Attorney General's Committee, pp. 87et seq.). The several categories, constantly repeated by courts in thecourse of judicial decisions or opinions, were first established by theSupreme Court as the minimum requisite under the Constitution(Interstate Commerce Commission v. Illinois Cent. R. Co., 215 U. S.452, 470 (1910); Interstate Commerce Comnnission v. Union Pac. R.Co., 222 U. S. 541, 547 (1912)) and have also been carried into Statepractice, in part at least, as the result of the identical due processclauses of the Fourteenth Amendment, applicable to the States, andthe Fifth Amendment, applicable to the Federal Government (NewYork e& Queens Gas Co. v. McCall, 245 U. S. 345, 348 (1917)). Thefifth category necessarily limits the substantial evidence rule to casesin which Congress has required an administrative hearing in whichthe administrative record may be made. The sixth category expressesthe correlative situation in which Congress has not provided by statutefor an administrative hearing and consequently any relevant factsmust be presented de novo to original courts of review (see Kessler v.Strecker, 307 U. S. 22, 35 (1939)). It should be noted that the sixthcategory, in accordance with the established rule, would permit trialde novo to establish the relevant facts as to the applicability of anyrule and as to the propriety of adjudications where there is no statutory


administrative hearing. But it does not attempt to state in what otherinstances evidence may be presented originally to courts of review sincethe latter subject is one which the courts themselves have not fullysettled (see Final Report, Attorney General's Committee, p. 87; Balti-

bore &c O. R. Co. v. United States, 298 U. S. 349, 368, 372 (1936);St. Joseph Stock Yards Co. v. United States, 298 U. S. 38, 48 (1936);Morgan v. United States, 298 U. S. 468, 476 (1936) ; Morgan v. UnitedStates, 304 U. S. 1, 14 (1938) ; United States v. Idaho, 298 U. S. 105, 109(1926)). SUGGESTIONS

The following suggestions or objections have been received:(1) The section fails to remedy the great defect in the rule of

review because it does not provide for a review of the "preponderanceof the evidence", to determine whether the administrative action is"manifestly wrong", or the like. However, "substantial evidence"would seem to be as sound a rule as language will permit. The realdifficulty has been that reviewing courts either accept something lessthan really substantial evidence or devise formulas of administrativediscretion which render the absence of proof immaterial. The failureto follow the real meaning of "substantial", like the failure to followother statutory language, is not likely to be cured by new language.The expansion of the area of administrative discretion must be reme-died, if at all, by the more precise statement of the statutory definitionsand directions or limitations in legislation conferring administrativepowers.

(2) It is suggested, on the other hand, that the subsection undulyextends the scope of review by authorizing courts to specify adminis-trative action to be taken. But the provision means that the court maycompel the agency to act where it has "unlawfully withheld" action,rather than to both direct action and state what it shall be in detail.The court may require agencies to act, but may not under this pro-vision tell them how to act in matters of administrative discretion.

(3) It is said that review and invalidation of agency action "short ofstatutory right" is something new. But, with the judicial abolition ofthe "negative order" doctrine, there is certainly nothing new in judicialreview of an administrative failure to act in whole or part. Further-more, if Congress has prescribed a measure of right or relief, on prin-ciple the citizen is entitled to the full measure and there should be noarbitrary power in administrative agencies to grant less in specificcases.

(4) It is suggested that the word "unjust" be added after the word"capricious" in the second numbered category. But it may be that allthat legitimately should be done is accomplished by the existing word-ing of that category.

(5) It is strongly urged that the phrase "resulting in prejudicialerror" should be omitted from the fourth numbered category and theword "due" inserted before the word "observance", on the ground thatthe materiality of error should be tested by the usual rules and thatthe present statement requiring a showing of prejudicial error may beunjust and unworkable where the failure of the agency to afford pro-cedure is so severe that the party has no opportunity to even present hiscase. All necessary protection would be afforded by the usual phrase"due observance."

40


EXAMINERS

Sec. 11. Subject to the civil-service and other laws not inconsistentwith this Act, there shall be appointed for each agency as manyqualified and competent examiners as may be necessary for the hear-ing or decision of cases, who shall perform no other duties, be re-movable only for good cause after hearing, and receive a fixed salarynot subject to change except that the Civil Service Commission shallgenerally survey and adjust examiners' salaries in order to assureadequacy and wniformity in 'accordance with the nature and im-portance of the duties performed. Agencies occasionally or tempo-rarily insufficently staffed may utilize examiners selected from otheragencies by the Civil Service Commission.

This provision raises important issues. There are three proposals:-(1) The * * * provision set forth [above] giving examiners suchindependence and security of tenure as the civil-service laws mayafford; (2) the more elaborate proposal of the majority and minorityof the Attorney General's Committee on Administrative Procedure(see Report, pp. 193 et seq. and 196 et se. ) for the creation of an Officeof Federal Administrative Procedure under the direction of a boardof three to approve appointments of examiners, remove examiners, andundertake continuous research in problems of administrative law andprocedure; and (3) the following substitute:

"SEC. 11. OFFICE OF ADMINISTRATIVE JUSTICE.-The Judicial Con-ference shall appoint a Director of an Office of Administrative Justicewho shall, with the advice and consent of the agencies concerned, ap-point (and fix and pay the compensation of) competent examinerswho may preside at hearings or participate in decisions pursuant tosections 6 and 7. Such examiners shall perform no other duties, maybe suspended or removed by the Director, and on assent of the agenciesconcerned may be transferred or temporarily assigned to other agenciesby the Director. Persons substantially all of whose present duties arethose required to be performed by examiners appointed pursuant tothis section shall receive initial appointments hereunder. All examin-ers shall have the same security of tenure as is provided by, but other-wise shall not be subject to, the civil-service laws. The Director shallreport annually to Congress, may be assisted by such representativeadvisory committees as he may appoint, shall have such staff andfacilities as his duties may require, may by rule regulate the conduct ofexaminers pursuant to this Act, and shall be paid the same salary andallowances as a United States district judge."

EXPLANATION

This section which provides for subordinate hearing officers andtheir functions, differs greatly from the elaborate and lengthy pro-posals of the Attorney G(eneral's Committee for the creation of a newand special office to approve "hearing commissioners" authorized topreside at administrative hearings (Final Report, pp. 196-198,221-223, and 237-239).

41


SUGGESTIONS

The following suggestions have been received:(1) The creation of an executive "Office of Administrative Pro-

cedure", as recommended by the Attorney General's Committee onAdministrative Procedure and set forth in the note [above], ispreferred. On the other hand, it is objected that such an office-inaddition to involving the creation of another administrative agency-will be political, will interfere with the independent operation ofboards and commissions, will constitute a superadministratiVe agency,will serve to unduly emphasize and channel complaints respecting theadministrative process, or will be without real authority.

(2) The "Office of Administrative Justice," which is also sug-gested in the note and in which the Director would be appointedby the Judicial Conference and would in turn appoint examiners,is disfavored on principle-chiefly on the ground that it will re-move the examiners from real responsibility to the agency chargedwith the administration of law. On the other hand, it is stronglyurged that such an office under the supervision of the Judicial Con-ference will be nonpolitical, simple to provide, and serve as a desir-able medium for securing a truly impartial corps of examiners.I'he legal difficulty with the suggestion, however, is that the Constitu-

tion provides for the placing of powers of appointment "in the courtsof law" whereas the Judicial Conference is a committee and not acourt and hence may not be within the constitutional authorizationfor appointing powers. There is little likelihood of agreement as toany existing court upon which the appointing power might beconferred.

(3) It is urged that the Civil Service System be utilized, as pro-vided [in the proposed text set forth above], with or without certainmodifications. The first of these modifications is that examiners beappointed "by each agency" rather than "for each agency" as thetext now reads. The second suggestion is that the language of thesecond exception in the introductory provision of section 5 be modifiedto subject to the bill all hearings for removal of examiners, as set forthin the comment to section 5. The third suggestion is that, in place ofthe second use of the word "hearing" in section 11, there be inserted thewords "opportunity for hearing and upon the record thereof". Thefourth suggestion is that there be inserted after the word "Commis-sion" the word "alone", in order to make it clear that the Civil ServiceCommission alone shall regulate examiners' salaries. A fifth sugges-tion is that appropriate provision be made for the establishment ofspecial facilities within the Civil Service Commission for investiga-tions, reports, regulations, and the selection, compensation, and re-moval of examiners coupled with a requirement for special and annualreports to Congress on the subject. All of these merit carefulconsideration.

CONSTRUCTION AND EFFECT

Sec. 12. Nothing in this Act shall be held to diminish the constitu-tional rights of any person or to limit or repeal additional require-

42


ments imposed by statute or otherwise recognized by law. Except asotherwise reguired by law, all requirements or privileges relating toevidence or procedure shall apply equally to any agency or person.If any provision of this Act or the application thereof is held invalid,the remainder of this Act or other applications of such provisionshall not be affected. Every agency is granted all authority necesssaryto comply with the requirements of this Act through the issuance ofrides or otherwise. No subsequent legislation shall be held to super-sede or modify the provisions of this Act except to the extent thatsuch legislation shall do so expressly. This Act shall take effect threemonths after its approval except that sections 7 and 8 shall takeeffect six months after such approval, the requirement of the selectionof examiners pursuant to section 11 shall not become effective untilone year after the termination of present hostilities, and no proceduralrequirement shall be mandatory as to any agency proceeding initiatedprior to the effective date of such requirement.

EXPLANATION

This section includes provisions respecting the construction andeffect of the measure. The requirement that implied amendmentsshall be precluded is familiar in Federal legislation. It should benoted, moreover, that the effective date of the proposal is postponedfor periods of time sufficient to afford agencies ample opportunityto revise their practices as required; and the proposal is not to haveretroactive effect as to proceedings "initiated or completed prior tothe effective date" of any requirement.

War Functions

Sec. 13. Except as to the requirements of section 3, there shall beexcluded from the operation of this Act war and defense functionswhich by law expire on the termination of present hostilities, withinany fixed period thereafter, or before July 1, 1947, as well as thoseconferred by the following: Selective Training and Service Act of1940; Contract Settlement Act of 1944; Surplus Property Act of1944 [and so forth].

EXPLANATION

War agencies functions are exempted because it would take at leasta year for any adequate proposal to be placed in operation (see section12). There seems to be no reason, however, why war agencies shouldnot be required to publish the materials required by section 3, sincethe simple publication of the procedure and policies of war agencies,or as to war functions, would undoubtedly aid in the prosecutionof the war by informing the public.

SUGGESTIONS

The following suggestions have been made:(1) It is suggested that, in place of the words "those functions

authorized by the following" in the text, there be substituted the90600--46 --- 4

43


words, "courts martial, military or naval authority exercised in thefield in time of war or in occupied territory, and the functions con-ferred by the following statutes:". This may properly be done toremove any question of the application of the measure to purely mil-itary functions.

(2) It is also suggested that there is no real reason for exemptingthe Contract Settlement and Surplus Property statutes since thereis little, if any, application to them in the measure.

(3) It is suggested also that, apart from the military functionsspecified in the first suggestion above, the exemption of special warfunctions should be for a limited period so that, if they continue forappreciable periods after the war, they will be subject to the measureso far as its terms otherwise apply.

(4) A fourth and strongly urged suggestion is that there shouldbe no exemption of war functions except those relating to courts mar-tial and the authority of the Army and Navy as set forth in the firstsuggestion above.

(5) If the exemption of military and war functions is limited, itis suggested that, as a matter of form, the exemptions may be incor-porated in subsection 2 (a), and section 13 thus eliminated.

ADMINISTRATIVE PROCEDURE ACT - NOAA Office for … · ADMINISTRATIVE PROCEDURE ACT LEGISLATIVE...

Documents

Transcript of ADMINISTRATIVE PROCEDURE ACT - NOAA Office for … · ADMINISTRATIVE PROCEDURE ACT LEGISLATIVE...