Calendar No. 758

79T CONGRESS1 SENATE REPORTlit Session f No! 752

ADMINIMTRATIVE PROCEDURE ACT

REPORT-OF THE

COMMITTEE ON THE JUDICIARYON

S. 7A BILL TO IMPROVE THE ADMINISTRATION

OF JUSTICE BY PRESCRIBING FAIRADMINISTRATIVE PROCEDURE

NOumEB 19 (legislative day, OurOBER 29), 1945.-Ordered to be printed

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COMMITTEE ON THE JUDICIARYPAT MCCARRAN, Nevada, Chairman

CARL A. HATCH, New Mexico ALEXANDER WILEY, WisconsinJOSEPH C. O'MAHONEY, Wyoming WILLIAM LANGER, North DakotaHARLEY M. KILGORE, West Virginia HOMER FERGUSON, MichiganABE MURDOCK, Utah CHAPMAN REVERCOMB, West VirginiaERNEST W. McFARLAND, Arizona KENNETH S. WHERRY, NebraskaBURTON K. WHEELER, Montana B. H. MOORE, OklahomaCHARLES 0. ANDREWS, Florida H. ALEXANDER SMITH, New JerseyJAMES 0. EASTLAND, MississippiJAMES W. HUFFMAN, Ohio

O (vacancy)CALv KN M. COR, Nberr

J. G. SouRwINE, Counsel186

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affected has had ample notice of the legal and factual issues with duetime to examine, consider, and prepare for them. The secondsentence of the subsection applies in those cases where the agencydoes not control the matter of notice because private persons are themovig parties; and in such cases the respondent parties must givenotice of the issues of law or fact which they controvert so that themoving party will be apprised of the issues he muOt sustain. Thepurpose of the pgovision is to simplify the issues for the benefit ofboth the parties and the deciding authority. The last sentence,requiring the convenience and necessity of the parties to be consultedin fixing the times and places for h ,includ9 es aaency partyas well as a private party; but the agency's convenience is not to out-weigh that of the private parties and, while the due and requiredexecution of agency functions may be said to be paramount, that con-sideration would be controlling only where a lack of time has beenunavoidable or a particular place of hearing is indispensable and doesnot deprive the private parties of their full opportunity for a hearing.(b) PROCEDURE.-The agency is required first to afford parties anopportunity for the settlement or adjustment of issues (tvhere time, thenature of the proceeding, and the public interest permit) followed, to theea tent that issues are not so settled, by hearing and decision under sections7 and 8.

The preliminary settlement-by-consent provision of this subsectionis of the greatest importance. * Such adjustments may go to thewhole or any part of any case. The limitation of the requirement tocases in which "time, the nature of the proceeding, and the publicinterest permit" does not mean that formal proceedings, to -theexclusion of prior opportunity for informal settlement, lie in thediscretion of any agency irrespective of tJhe facts, legal situationpresented, or practical aspects of the case. It does not mean thatagencies have an arbitrary choice, or that they may consult theirmere preference or convenience. It is intended to exempt onlysituations in which, for example, (1) time is unavoidably lacking, (2)the nature of the proceeding is such that for example (as in some formsof rule making) the great number of parties or possible parties makesit unlikely that any adjustment could be reached, and (3) the ad-ministrative function requires immediate execution in order to protectthe tangible and'demonstrable requirements of public interest.(c) SEPARATION OF FUNCTIONs.-OffiCers who preside at the takingof evidence must make the decision or recommended decision in the case.They may not consult with any person or party eacept openly and uponnotiee, save in the disposition of customary ex parite matters, and theymay not be made subject to the supervision of prosecuting officers. Thelatter may not participate in the decisions e2 cept as witness or counsel inpublic proceedings. However, the subsection is not to agiply in deter-mining applications for initial licenses or the past reasonableness ofrates, nor does st apply to the top agency or members thereof.

The gist of the subsection is that no investigating or prosecutingofficer shall directly or indirectly in any manner influence or controlthe operations of hearing and deciding officers, except as a participantin pubic proceedings, and even then in no different fashion-than theprivate parties 'or their representatives. "Ex parte matters author-ized by law" means passing on requests for adjournments, continu-ances, filing of papers, and so forth. The exemption of applications

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for initial licenses frees from the requirements of the subsection suchmatters as the granting of certificates of convenience and necessitywhich are of indefinite duration, upon the theory that in mostlicensing cases the original application may be much like rule making.The latter, of course, is not subject to any provision of section 5. Theexemption of cases involving "the past reasonableness, of rates" (iftriable de novo on judicial review they would be exempted in anyevent) is made for the same reason. There are, however, someinstances of either kind of case which tend to be accusatory in formand involve sharply controverted factual issues. Agencies shouldnot apply the exceptions to such cases, because they are not to beinterpreted as precluding fair procedure where it is required.

A further word may be said as to the last exemption-of the agencyitself or the members of the board who comprise it. Such a provisionis required by the very nature of administrative agencies, where thesame authority is responsible for both the investigation-prosecutionand the hearing and decision of cases. There, too, the exemption isnot to be taken as meaning that the top authority must reserve toitself both prosecuting and deciding functions. To be sure it isultimately responsible for all functions committed to it, but it may.and should confine itself to determining policy and should delegatethe actual supervision of investigations and initiation of cases toresponsible subordinate officers.

(d) DECLARATORY ORDER.-Every agency is authorized in its sounddiscretion to issue declaratory orders with the same effect as other orders.

This subsection does not mean that any agency empowered to issueorders may issue declaratory orders, because it is-limited by the intro-ductory clauses of section 5. Thus, such orders may be issued onlywhere the agency is empowered by statute to hold hearings and thesubject is not expressly exempted by the introductory clauses of thissection.

Agencies are not required to issue declaratory orders merely becauserequest is made therefor. Such applications have no greater effectthan they now have under existing comparable legislation. "Sounddiscretion," moreover, would preclude the issuance of improvidentorders. The administrative issuance of declaratory orders would begoverned by the same basic principles that govern declaratory judg-ments in the courts.

SEC. 6. ANCILLARY MATTERS.-YWC provisions of section 6 relating toincidental or miscellaneous rights, powers, and procedures do not overridecontrary provisions in other parts of the bill.

The purpose of this introductory exception, which reads "except asotherwise provided in this act," is to limit, for example, the right ofappearance provided in subsection (a) so as not to authorize improperex parte conferences during formal hearings and pending formal deci-sions under sections 7 and 8.

(a) APPEARANCE.-Any person compelled to appear in person beforeany agency or its ,representative is entitled to counsel. In other cases,every party may appear in person or by counsel. So far as the responsibleconduct of public business- permits, any interested person may appearbefore any agency or its responsible officers at any time for the presentationor adjustment of any matter., Agencies,are to proceed with reaconabledispatch to conclude any matter so presented, with dve regard for theconvenience and necessity of the parties. Nothing in the subsection is to

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