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r ~ I

79TH CONGRESS}1st Session SENATE

Calendar No. 758{RmPORTNo. '162

UNITED STATESGOVERNMENT PBIN'l'ING OJ'J'ICB

WASHINGTON I 1 ~

ADMINISTRATIVE PROCEDURE ~ t \ C T

REPORTOF THE

COMMI'ITEE ON THE JUDICIARYONs. 7

A BILL TO IMPROVE THE ADMINISTRATIONOF JUSTICE BY PRESCRIBING FAIRADMINISTRATIVE PROCEDURE

NOVEMBBR 19 (legislative day. OCTOBJlIR 29), 194.6.-ordered to be prilltedjj,I

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CO:\Il\IITTEE ON THE JUDICIARYPAT McCARRAN, Nevada, C1lairmafl

CARL A. HATCH, New Mexico ALEXANDER WILEY, WbconslnIOSEPH C. O'MAHOKEY, Wyoming WILLIAM LANGER, North DakotaHARLEY M. KILGORE, West ViT(1nh\ HOMER FERGUSON, MichiganABE MURDOCK, Utah CHAPMAN REVERCOMB, West VirglJ,'rERNEST W. McFARLAND, Arizona KENNETH S. WHERRY, NebraskaBURTON K. WHEELER, Monl1lDa E. H. MOORE, OklahomaCHARLES O. ANDREWS, Florida H. ALEXANDER SMITH, New Jacse1lAMES O. EASTLAND, MississippIlAMES W. HUFFMAN. Ohio- - (vacanoy)

C.uVIN M. CORT. Cfwl1. G. SOV&WL';lt. c o u ~I I

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; ~ ) T H CONGRESS }]Nf Session

SENATE Calendar No. 758REPoRTNo. 752c=::========================_:.-==-

ADMINISTRATIVE PROCEDURE ACT

l{OVt;J,fBER 19 (legislative day, OCTOBER 29), 1945.-0rdered to be printed

Mr. MCCARRAN, from the Comm.ittee on the Judiciary,submitted the following

R E P O E ~ T[To aCcompany S. 1]The Committee on the Judiciary, to uhom was referred the bill(S. 7), to improve the admlliistration of justice by prescribing fairadministrative procedure, having considered the s a m e ~ reports favorably thereon, with an amendment, and recommend tnat the bill dopass, as amp-nded.There is a widespread demand for legislation to settle and regulatethe field of Federal administrative law and procedure. The subject isnot expressly mentioned in the Constitution, and there is no recognizable body (If such law, as there is for the courts in the- Judicial Code.There are no clearly recognized legal guides for either the public orthe administrators. Even the ordinary operations of administrativeagencie.'3 are often difficult to know. The Committee on the Judiciaryis convinced that, at least ill css:'ntials, there should be some simpleand standard plan of administIative procedure.

I. LEGISLATIVE HISTORY-For more than 10 years Congress has considered proposals forgeneral statutes respecting admitristrative law and procedure. Figure1 on page 2 presents a convenient chronological chart of the maiDbills introduced. Each of them has received widespread notice andin tense consideration.The growth of the Government, particularly of the executive

branch. has added to the problem. The situation had hecome suchby the, middle of the 1930's tha.t the President appointed a committee1

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2 ADMINISTRATIVE PROCEDURE Acr1!'IGURE 1

AD:\IINISTRATIVE LAW BII.LS

ADMINISTR' TIVlll ADMINISTR.\TIVECOURT PROCEDUHE

S. 1835 (Norris) S.9H'i (Logan)-H. R. 42361Sd Congresll. 1st Session (Celler)-H. R. 6324 (Walter)16th C o n ~ r e B S . 1st Session

8. 3787 (Logan)-H. R. 12297(Celler)14th Congress, 2d Session S. 614--H. R. 4238(Attorne)' GpnerllJ"s Cflmmlttee,l\[\nurlty)

77th COlJ6reSS, 1st Session

8. 3616 (Logan)1 ~ t h C o n ~ r e s s , 3d Session S. 6 7 ~ - H . R. 4782H. R. 234 (Celler) (Attorney Genprl\l's Committee,76th Congress, 1st Session Majority)71th Congress, 1st Session

8. 916 (Logan)-H. R. 4235(CeIler) S.918 (Loglln)-H. R. 346j76th Congress, 1st Session (Walter)77th COngrells. 1st Setlsion

IReport of President's Committeel.- on Admlnilitrative Management H. R. 4314 (Gwynne)

January 8, 1937 78th Congress. 2t i SeRsion

Twen ty-seven M o n o ~ r a p h l l of th e S.2030 (McCarraB)-H. R. 5081Attorney General 's Committee on (SUl Tlerll)Administrative Procedure 78th Congress. 211 SessionSen. Doc. 186-76th C o n ~ r e s 8 , l -ad Session .Sen. Doc. lQ--77th Congress,1st Session H. R. 5237 (Smith)78th Congress, 2d SessionReport of Attorney General'sCommittee on AdministrativeProcedure I - - S .7 (McCarran ) -H . R. 1208SeD. Doc. 8-77 th C o n ~ r e l J 8 , (Sumners)1st Session 79th Congress, 1st Session

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ADMINISTlU.TIVE PROCEDURE ACT 3to make a comprehensive survey of abd suggestiuns concerninga.dministra.tive methods, ?verlapping f u n c ~ i o n ~ t . and diverse o ~ a n i z a -tlOll. While that commIttee was not p r u n ~ l l y concerned wIth themore detailed questions of administrative la.w and procedure as theterm is now understood, it was inevitably brought face to face withthe fundamental problem of the inconsistent union of prosecuting anddeciding functions exercised by many executive agencies.REPORT OF PRESIDENT'S COMMITTEE.-In 1937. the President'sCommittee on Administrative !\fanagement issued its report, inwhich it said (pp. 32-33, 39-40):The executive branch of the Government of the United States has grown up without plan or design *. To look at it now, no one wouldever recognize the structure which the founding fathers erected a century and ahalf ago. * * Commissions have been the result of legialative gropingrather than the pursui t of a consistent policy. * * They are in realityminiature independent governments set up to deal with the railroad problem, thebanking problem, or the radio problem. They constitute a headless "fourthbranch" of the Government, a haphazard deposit of irresponsible agencies andul\l'oordinated powers. * * * There is a conflict of \lrinciple mvolved intheir make-up and functions. * * They are vested Wlth duties of administration * * and at the same t ime they are {;i'en important judicial work. The evils resulting from this confusion of p r i n c i p l ~ s are insidious andfar res.ching. * * * Pressures and influences properly enough directed towardoffil'ers responsible for formulating and administenng policy constitute an unwholl>some atmosphere in which to adjudicate private rights. But the mixedduties of the commissions render escape from these subversive influences im

possible. ~ u r t h e r m o r e , the same men are obliged to serve both as prosecutorsBnd as judges. This not only undermines judicial fairness; it weakens publioI'onfidenre in that faime&". Commission decisions affecting private rights andconduct lie under the suspicion of being rationalizations of the preliminary findingswhich the Commission, lD the role of prosecutor, presented to itself.To which, in transmitting it to Congress, the President added(pp. iii-v):I have examined this report carefully and thoughtfUlly, and am convincedthat it is a great document of permanent importance. * * The practiceof creating independent regulatory commission8, who perform administrative

work in addition to judicial work, threatens to develop a "fourth branch" of theGovernment for which there is no sanction in the Constitution.See also p a g e ~ 41--42, 207-210, 215-219, 222-223, 230-239 for additional comments and the very drastic remedy proposed in that report.That Committee recommended the complete separation of investiga.tive-prosecuting functions and personnel from deciding functions andp

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ADMINISTRATIVE PROCEDURE ACTthat action should awftH thp then in minent final r ~ p ( J r t by A commit-tee appointed in the oX('("Jtive branch to study the entirf> ~ i t l l a t i o D(H. Doe'. 986, 76th Cong., 3d sess.).ATTORNEY GENERAL'S COMMITTEE.-In December 1938 t.heAttorney General1 tenewing the suggestion which he had previollslymade respecting too need for procedural refonn in the wide and growing field of administrative law, recommended the appointment of 8commission to make a thorough survey of existing practices and procedure and point the way to improvements (S. Doc. 8, 77th Cong.,1st sess., p. 251). The President concurred and authorizpd t.heAttorney General to appoint a committee for that pm'pose (id., p.252). This Committe; was composed of Government ofl:('ials,teachers, Judges, and private practitioners. I t made an intl>rimreport in January 1940 (id., 254-258). Its staff preparl 'J, and in1940-41 issued, a series of studies of the procedures of t.he principaladministrative agl'ncies and bureaus in the Federal Government (S.Doc. 186, 16th Cong., 3d sess., pts. 1-13; and S. Doc. 10, 77th Cong.,1st sess., pts. 1-14). The Committee held executive sessions over along period, at which the representatives of Federal agencies wereheard. It also held public hearings. I t then prepared and i ~ s l l e da voluminous final report. See A d m h l i . ~ t r a t i 1 J e Proce.dure in Gorernment A g e ~ i e s - R e p o r t of the Committee on Admini..c:trative Procedure,Appointed by the Attorney General at the Request of the President, toInvestigate the Need for Procedural Reform in 'Various Administratic-!Tribunals and to Suggest Improvements Therein (S. Doc. 8, 77th Cong.,1st sess.). That Committee is popularly kno\\'n as the A t t o r n ~ yGeneral's Committee on Administrative Procedure and will be sodesignated in this report. In the framing of the bill herewith reported, (S. 7), your committee has had the benefit of the factualstudies and analyses prepared by the Attorney General's Committee.SUBSEQUENT BILLS AND REA RINGB.-Growing out of the work ofthe Attorney General's Committee on Administrative Procedure,several bills were introduced in 1941 (S. 674, 675, and 918, 77thCong., 1st sess.). Hearings were held on the,se bills during April,May, June, and July of that year. (See Administraiive Procedure,hearings, 77th C o n ~ . , 1st sess., pts. 1-3, plus appendix.) However,tho then emergent international situation prompted a postponementof further consideration of the matter. But all interested arlministretive agencies were heard at length at that time and the proposalsthen pending involved the same basic issues as the present bill.PRESENT BILL.--Based upon the studies and hearings in connectionw!th prior bills on t ~ s ~ b j e c t , and after ~ v e r a l y ~ a r s of consultationWlth mterested parties lD and out of offiCIal POSItIOns, S. 2030 (78thCong., 2d sess.) 'was introduced on June 21, 1944, the companion billin the House of Representatives beulg H. R. 5081. The introductionof these bills brought forth a volume of further s u g g ~ ~ t i o n s from everyquarter. As a result, with the opening of the present Congress,a revised and simplified bill was introduced (8; 7, January 6, 1945;H. R. 1203, January 8, 1945). .CONSIDERATIOS AND REVISION.-Much informal discussion followedthe introduction of S. 7 and H. R. 1203. The House of Representatives' Committee on the Judiciary held hearings in the latter part ofJ ':lne 1945.

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A D M I N I S T ~ T I V J ,ROCEDURE ACT 5Previously, that committee _lUi the Senate Committee on theJudiciary had requested adrn!tlistrative agencies to submit their"iews in writing. These weI:{)',earefully analyzed and, with the aiduf representatives of the AUoJ'D.ey General a.nd interested privateorganizations, in May 194:> , ~ was issued a. Senate c o m m i t t e ~ printsetting forth in parallel colUJ;QAS the bill as introduced and a tentativelyrevised text. 'Again interested parties .ip. and out of Government submitted comments orally or in writiEi pn the revised text. These were analyzed

by the committee's sta.ff'Hld a further committee print was issued inJune 1945. In four p&.l,nel columns it set forth (1) the text of thebill as introduced, (2) the teJct of the tentatively revised bill previouslypublished, (3) a g e explanation of provisions with references tothe report of tbe A ~ n e y General's Committee on AdministrativeProcedure and o t b ~ , "uthorities, and (4) a summary of Views and suggestions received.Thereafter the ~ r n e y General again designated representatives tohold further discIMions with interested agencies and to screen andcorrelate further. y.e. . ney views, some of which were submitted in writ-ing and some oJ'AUY. Private parties and representatives of privateorganizations tJm participated.F o l l o w i n ~ e discussions the committee drafted the bill as rePOl'ted, whicb i,s set forth in full in appendix A. The Attorney Gen..eral's favol'oble report on the bill, as revised, is set forth in ~ p p e n d i x B.

4" :

II. APPROACH OF THE C O ~ 1 M I T T E EIn und$1ia.king the foregoing very lengthy process of consideration,the c o J } l 1 i ~ t e e has attempted to make sure thnt no operation of theGoveJW,nent is unduly restricted. The commiUee has also taken theposit;,iQn that the bill must reasonably protect I>rivate pa.rties even atthe ri,lc of some incidental or possible inconvenience to or changf' inp r ~ t auministrative operations. The COID.I1'...lttee is convinced, however, that no administrative function is improperly affected by thepre&ent bill.THE PRINCIPAL PROBLEMB.-The principal problems of the committee have been: Fir8t, to distinguish between different types of ad..ministrative operations. Second, to frame general requirements applienble to eachsuch t)1le ofoperation. Third, to set forth those reqwrements in clear &ond slDlple terms. Fourth, toIilake Bure that the billis complete enough to cover the whole field. .The committee feels that it has avoided the mistake of attemptingto oversimplify the measure. I t has therefore not hesitated to state

functional classifications and exceptioD..s where those could be restedupon firm grounds. In so doing, it has been. the undeviating policyto deal with types of functions as such and in no case with admin.a-trative agencies by name. Thus certain war and d ~ f e n s e functionsareexempted, but not the War or Navy Departments m the performapceof their other functions. Manifestly, it would be folly to assume todistinguish between U ~ g o o d " ageIiciea and others, and no such distinction is made in the bill. The legitimate needs of the Interstate Commerce Commission, for example, have been fully considered but it hasnot been placed in a favored. position by e x e m ~ t i o n from the bill. .

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ADMINISTRATIVE PROCEDURE ACTThe committee feels that administrative operations should be treatedas a whole lest the negiect of some link.defeat the purposes of the bill.Tht' chart set forth as figure 2 on page 9 emphasizes this approachof the committee. .COMPARISON WITH WALTER-LOGAN BILL.-The Walter-Logan bill,which was vetoed by the President, differed materially from S. 7 as

reported. "'nile it distinffl!ished between regulations and adjudications, the Walter-Logan blll simply required administrative hearingsfor each and provided special methods of judicial review.1\.10re particularly, in the matter of ge'leral r

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ADMINISTRATIVE PROCEDURE AC'r 7ject. It relies upon independence, salary security, and tenure duringgcod behavior of examiners within the framework of the civil service,whereas the Attorney General's Committee favored short-term appointments approved by a special uOffice of Administrative Procedure."A more detailed comparison of the present bill, with full referencesto the rep:>rt of the Attorney General's Committee, is to be found inthe third parallel column of the print issued by this committee in.June 1945.

III. STRUCTURE OF THE BILLThe bill, as reported, is not a specification of tho details of administrative procedure, nor is it a codification of administrative law.Instead, out of long consideration and in the light of the studies here

tofore mentioned, there has been framed an outline of minimum basioessentials. Figure 2 on page 9 diagrams the bill.'fhe bill is desi?ned to afford parties affected by administrativepowers a means of KDowing what their rights are and how they may beprotected. By the same token, administrators are provided with asimple course to follow in making administrative determinations.The jurisdiction of the courts is clearly stated. The bill thus prov i d ~ s for public information, administrative operation, and judicialre'new.

SUBSTANCE OF THE BILL.-What the bill does b substance may besummarized under four headings:1. It provides that agencies must issue as rules certain specifiedinformation as to their organiza.tion and procedure, and alsomake available other materials of administrative law(sec. 3).2. I t states the essentials of the several forms of administrativeproceedings (secs. 4, 5, and 6) and the limitations on ad-ministrative powers (sec. 9). '3. It pro ,,"ides in morc d,etail the requirements for administrative

.hearings and decisions in cases in which sta.t.l1tr.a requiresuch hearings (secs. 7 and 8).4. I t sets forth a simplified statement of judicial review designedto afford a. remedy for every legal wrong (sec. 10).The first of these is baSic, because It requires agencies to take thoinitiative in i n f o r m i n ~ the public. In stating the essentials of thedillerent forins of admmistrative proceedings, it carefully distinguishesbetween the so-called legislative functions of administrative agencies( ~ h e r e . they issue, geJ?-eral. r e g u l a t i , ? n s } , . ~ n d .their iudicial functions(m whICh they determme nghts or habilItIes m partIcular cases).The bill provides quite different procedures for the ulegislative"and "judicial" functions of administrative agencies. In the "rulomaking" (that is, "legislative") function it provides that, with certainexceptions, agencies must publish notice and at least permit interestedparties to submit their views in writing for agency considerationbefore issll;::! general, regulations (sec. 4). No hearings 8l'8 ::1Juiredby the bill ess sta.tutes already do so in a particular csse. S arly,in U adjudications" (that is, the "judicial" function) no agency bearings are required unless statates already do so, bat in the latter case

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8 ADMINISTRATIVE PROCEDURE Ac:Jr

iI,

the mode of h e and d('cision is prescribed (sec. 5). -VDereexisting statutes reqUIre t.hat either general regulations (cPlled "rules"in the bill) or particularized adjudications (called "orders" in the bill)be made after agency hearing or opportunity for such hearing, theDsection 7 spells out the minimum requirements for such hearings,section 8 states hoW' decisions shall be made thereafter, and section 11provides for examiners to preside at hetUings and make or participateIn decisions.While the administrative power a.nd procedure provisions of sections 4 through 9 are law apart from court review, the provisions forjudicial review provide parties with a method of enforcing their rightsm a 1,>roper case (sec. 10). However, it is expressly provided that thejUdiCial review provisions are not operative where s t a t u t e ~ ; otherwisepreclude judicial review or where agency action is by law committedto agency discretion.KINDS OF PROVI8ION8.--The bill may be said to be composed offive types of provisions:1. Those which are largely fonnal such as the sections settingforth the title (sec. 1), definitiollP- (sec. 2), and rules of construction (sec. 12).2. Those which require agencies to publish or make availableinfonnation on administrD.tive law and procedure (sec. 3).a. Those which provide for different kinds of procedures such 88rule making (sec. 4), adjudications (sec.. 5), and miscellaneous matters (sec. 6) as well as for limitations upon sanctionsand powers (sec. 9). .

. Those which provide more of the detail for hearings (sec. 7)ami decisions (sec. 8) as well as for examiners (sec. 11). .5. Those which provide for judicial review (sec. 10).The bill is so drafted that its several sections and subordinate provisions are closely knit. The 8ubstantiv0 :provisions of the bill shouldbe read apart from the purely formal provlSions and minor functionaldistinctions. The definitions in section 2 are important, but they donot indicate the scope of the bill since the subsequent provisions makemany functional distinrtions and exceptions. The public information provisions of section 3 are of the broadest applIcation because,.while some functions and some operations may not lend themselvesto formd procedure, all administrative operations should as a matterof policy be disclosed to the public except as secrecy may obvioaslybe required or only ilternal agency "housekeeping" aITRJlgementsmay be involved. Sections 4 and 5 prescribe the basic requirementsfor the making of rules and the adjudication of particular cases. .Ineach case, where other statutes require opportunity for an agencyhearing, sections 7 and 8 S f ' ~ forth the minimum requirements for'such hearings and the agency decisions thereafter while section 11 .provides for the appointment and tenure of examiners who mayparticipate. Section 6 prescribes the rights of private parties in a.,number of miscellaneous respects which may be incidental to r u l e ~ 'm a k ~ , a4ju.dicatioDz or the e x e r c ~ e of any ~ t h e r a g ~ n c r . a u t h o x : i t y ~ : . : , :Sectlon 9 limits sanctions, and sectlon 10 proVldes for )UdlClal renew,,;

~ ~ : ' , ...' i ~ > .

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ADMINISTRATIVE PROCEDURE A 9FIGURE 2.-Diaomm of p,'incipal sections of b ill

ANDONSera!e s .. relone.ala

j r -Sec. SBc.G Sec. e See. 9BULE MAKING ADJUDICATION A " ~ C I L L A R Y POWERS

(a) Notice (a) Notice MATTERS , SANCTI(b) Procedures (b) Procedure (a) Appear- (a) In ren(cl Efrectin (e) Separation ance (b) Licensdates o t t u n c - (b) Investlga. I:rant(d ) PetitionI tions tions vocat(d) Declara- (c) Subpena! renewtor1orders (d) Denials

IIII

ec, 7 Sec 8 Sec. '1RINGS DECISIONS EXAMINERSIdlog oBl- (a) Action 1',\' III!b- Cil"U-servlcf' selee-orclill:\t",. Uon. coulpenllll-

ring powel'5 (1t) Submlttllis and tiou. and tenureenee decision.I'd

8SEA

fa) Prescers(b) Hea(c) El"ld(d) Reco

See, 3PUEUCINFORMATION( I l l Rules(b) OpinionsaDd orders(e) Public recorda

Sec. 10JUDICIAL REVIEW(a) Rlltht of reTlew(b) Form aDd Tenue(e) Reviewable act.(d) Interim rellet(e) Scope of reTlew

Section 1 prescribes the title. 8eetlon 2 the deftr,',tlon8. and 8PCtlOQ 3 the efreetl:ve dal:f!IIand rules of conltruction. In the aboYe dlalCram, the first row of Ill!rtloDS eets forth tbeseveral kinds of requirements, procedurPII. nud 1 i ~ ; d t a t l o n l J : lind tbe Ik'cond row includeohearing and decilion requirements w h ~ r e o t b ~ . , statutes ,'('quirt> a h.:llrlng. Section 10 aDJudicial review relates not oDls to dechlloU6 mad.e after agency bearing but, 1D appropr1a.tecaee.. to tbe exerciae at au1 other adm1D.1.;1trathe power or author1t1.IV. ANALYSIS OF PROVISIONS

The following statements respect.ing each provision of the bill aredesigned to answer s p e c ~ c questions relating to language and objectives. Under each section or subsection heading there appears anitalicized synopsis of the provision, followed by one or more paragraphs of auatysis or special comment. A reading of all the i t a l i c i ~ 9 dpa.ragraphs willI therefore, afford a synopsis of the whole bill, which isreproduced at" length in appendix A at p ~ g e 32. .SEC. 1. TITLE.-It i8 p r o ~ d that the mea8'UPe-71lGY' be tited.1l8 the j'

A d m i n i s t r a t ~ Procedure .I.J.Ct. " ..While a short title has been deemed preferable, it may be notedthat the bill actually provides for both administrative procedure and .....j U ~ : ~ 1 2 ~ e B ~ - ; i N l ~ I O N 8 . _ T M ' d t , f i n i / , ~ Gnlll to tk remai7UIer oj the, ..hiU. . "., . .... ".' . . ' . . ' , . j

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10 ADMIN ISTRATIYE PROCEDURE ACT- ~ -- - - - - - - ~ - - -

For 1he purpose of both simplifying thp languuge of later provisionsand achieving greatd precision, general t.erms of administrative lawand procedure are defined.(a) AOENCY . -The word "aQency" i..q d.efintd by excluding legislatifJe,jw/;("ial, and fefTitorial uuthortties and by including any o,ther "auth01''ity" u:hethtr or not 'within or subject to retl'iew by another agency. Thb'ill i 1Iot to be construed to repeal delegation8 oj authority profJ'ided bylaw. 'Expressly exempted jro11] thR tam It agl.ncy", fxcept for the publicilljoTlI/ation requirements of section 3, are (1) agencies c01n1JOsed oJ repre! ~ ntal il:o,: of parties or of organizations of parties and (1:) defined warauth"r;tiN; including civilian authorities functioning under temporaryor limned .'ilatutes upemtil1t duri1lg "present /wstilitit-;s."The word "authority" is advisedly used as meaning whateverpersons !lrc vested with powers to act (rather than the mere formof agency organization such as department, commiBsion, board, orburpau) because the real authorities may be some !;ubordinate orsemidepellnellt person or persons within such form of o r ~ a . n i z 2 . t i o n .In conferring administrative powers, statutes c u ~ t o m a r l l Y do notr t ~ f e r to formal agencies (such as the Department of Agriculture)but to s p N ~ i f i e d persons (such as tho Secretary of Agriculture).Boards or commissions usnally possess authority which does !lotextend to inrlividua.l members or to their subordinates.The bill does not repeal delegations of 8.1'.thority which are dillyauthorized by existing law. This does not mean, however, "ha.tdt'legatiolls are e f f ~ c t i v e where other provisions of the bill requireotherwise. For example, the requirement that examiners in certaininstances hear cases'would supersede any existing delegations top ~ ' 0 s e c u t i n g officers to hear such cases.Agencies composed of representatives of the parties or of organizations of the parties t.o the disputes determined by them are exemptedbecause such n.gencies a.s presently operated do not lend themselvesto the a d j u d i c n t i \ ~ e procedures set out in the remaining sections of ' ~ h ebill. They tend to be arbitral or mediating agencies rather thantribunals.The exclusion of war functions and agencies, whether exercisedby civil or military personnel, affords all necessary freedom of actionfor the e."'ercise of such fUllctions in the period of reconversion. I thas heen deemed y,,;SI3 t exempt such functions in view of the factthnt they are rarely requll-ed to .be exercised upon statutory h ~ a r i n g ,\"ith which much of the bill is concerned, and the fact that they arerapidly liquidating. I t should be noted, however, that even warfunetions are not exempted from the public information requirementof scetion 3. uPresent hostilities" means {,hose cvnnected with thewar brought on at Pearl Harbor in December 1941.(b) PERSON AND PARTY . - "Person" is defined to i n c l u . . r ~ specifiedformli of orgaT1 izalions oth.er than agencies. U Party" is defined t.o incll.Lfhanyone -named, or a

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ADMINISTRATIYE PROCEDURE ACT . 11

,. any agency to ignore or prej udiee the righ ts of the true or full parties in

a n ~ ' proceeding.(c) RULE AND RULE MAK ING . - "Ruk " is defined all any agencystatement oj general applicability d.esigned to implement, interpret: or

I prescribe law, policy, organization, procedure, or prattice requirements. 1Rule making" means agency process for thefonnulation, amendment, orr(peal of a rule and includes any prescription for the future of rates,wages, financial structures, etc., etc.The definition of II rule" is important because it prescribes the kindof operation that is subject to section 4: rather than section 5. Thesp('cification of the activities that are involved in rule making isincluded in order to comprehend them beyond any p o ~ s i b l e question.They are defined as rules to the extent that, whether oi general orparticular applicability, they formally prescribe a course of. conductfor the future rather than merely pronounce existing rights or liabilities. It should be noted that rule making is exempted from someof the general requirements of sections 7 and 8 relating to the details( I f hearings and decisions.(d) ORDER AND ADJUDICATION.-"Order" mea1ls thefinal dispositionof any matte.,., other than rule making but including licensing, whether ornot affirmative, negative, or declaratory in form. II Adjudication"means the agency processfor theformulation of a11l0rder. . .The term "order" is definec to exdude rules. "Licensing" isspecifically included to remove any possible question at the outset.Licenses involve a pronouncemcn t of prl'sent rights of named partiesalthough they may also prescribe terms and conditions for futureobservance. It sh3uld be noted, however, that licensing is exemptedfrom some of the provisions of sections 5,. 7, and 8 relating to hearingsand decisions.(e) LICENSE AND LICENSmG.-uLicense" is defined to incl'Uil6 anyform of required ojficial permission such all certificate, charier, etc."Licensing" is defined to include agency process respecting the "rant,renewal, modification, denial, revocation, etc., o}alicense.This definition supplements subsection (d). Later provisions of thebill distinguish between initial licenses and renewals or other licensingproceedings. A further distinction might have been drawn betweenlicenses for a tenn, such as radio licenses, and those of indefiniteduration, such as cprtificates of convenience and necessity.(f) SANCTION AND RELIEF.- "Sanct ion" is defined to incl'Ude anyagency prohib-iti

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12 ADMINISTRATIVE PROCEDURE A term "agency actionU brings together previously defined terms inorder to simplify the language of the judicial review provisions of8ection 10 and to assure the complete coverage of every form of a.gencypower, proceeding, action, or inaction.

SEC. 3. PUBLIC INFORMA' l ' ION.-From the public information pro-f)1'S1:0TtS oj seri'um S there fJre e:cempted matters (1) requiring secrecy in thlp11blir intaest or (2) relating solely to the internal management oj a1&agency.The public information requirements of section 3 are in many waysamong the most important, Car-reaching, and useful provisions of thebill. For the information and protection of the public wherever located, these provisions require agencies to take the mystery out ofadministrative procedure by stating it. The section has been drawnupon the theory that administ.rative operations and procedures arapuhliC' property which the general public, rather than a few specialistsor lobbyists, is entitled to know or to have the ready means of knowingwith definiteness and assurance.The i'1troductory chi-use states the only general exceptions. Thefirst. which excepts matters requiring secrecy in the public interest, isn ~ c e s s o . r y hut is not to be construed to defeat the purpose of the remaining p r o v i ~ i o n s . It would include confidential op('!rations in anyag('!ncy,such as some o! _.a aspects of the inVE'Rtigating or prosecuting functions of the Secret Service or Federal Bureau of Investigat.ion, but noother functions or operations in those or other agencies. Closely related is the second exception, of matters relating solely to internalaf,::cncy management, which may not be construed to defeat otherprovisions of the bill or to permit withholding of information as tooperations which remaining provisions of the section or of the wholebill require to be public or publicly available.(u) RUJJES.-EuT1J agenC1J i . . ~ req:uired t.o publish in the Federal Regi8terits ([) organization, (2) places oJ d01:ng business 'UJith the publ,jc, (3)methods of rule fflflking and adjudication including the rules oj practice"flating t}U'ret(), and (4) such 311lJstantive rules as it may jrame jM the!Juidance oj the public. lVO person is in any manner to be required toresort to organizat ion 0" procedure not so published.

Since the bill leaves wide latitude for each agency to frame its ownprocedures, this subsection requiring agencies to st.ate their organization and procedures in the form of rules is essential for the information of the public. The publicati9n must be kept up to date. Theenumerated rlusses of infOlmational rules must also be separatelystated so that, for example, rules of procedure will be separate fromnIles of substance, interpretation, or policy. The effect of anyone ofthe first three classifico.tions of required rule making is that agenciesmust also publish their internal delegations of authority. The subsection forbids secrecy of rules binding or applicable to the public, orof delegatiom; of 8uthority. The requirement that no one shall .uinany mallller" be required to resort to unpublished organization orprocedure protects the public from being required to pursue remediesthat are not generally known.(b) OPINIONS A.ND ORDER8 . -AgencUs are required to yu,bli.,k or, 'purSU{l.nt to 'T"llk, make aroilable to public inspection. qUfinal opinwns orOrders in th.e adjtulicalion of cases except tOOse held con./itUnlial, for gOG4MU8e and fWt titedas preudents.

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ADMINISTRATIVE PROCEDURE ACT 13Rule making results in publishe-d material in the Federal Registreras set forth in subsection (a), but in the case of adjudication there isno standard, g e n e ~ ' a l , and official medium of publication. Someagencies publish sets of some of their decisions, but otherwise the

public is not informed as to how and where they may see decisioll8or consult precedents. Requiring each agency to formulate andpublish a rw.e respecting access to their final opinions anrl orders willgive the general public notice 'as to how such information may besecured. While t,he subsection does not mention "rulings"--whichare neither rules nor orders but are general interpretations, such asthe opinions of agency counsel-if authoritative, they would becovel."ed by the f o u r ~ h category in subs2ction (a) Df this section.(c) PUBLIC RECORDs.-Except as statutes may require other'l1)ise orinformation may be held confidential jor good c a u . ~ e , matters oj officialrecord are to be made amilable to persons properly and directly concernedin accordance 'Ut-ith rules to be issued by the agency.This provision supplements subsections (a) ap.d (b). The requirement of an ag6ncy rule on the availability of official records is insertedfor the same purpose as in subsection (b). In many cases, the interestof the person sfJekinv access to the record will be determinative.Agencies should c1a.sRify data in 0' dr.r to specify what may be disclosedand what may not; and they must in any caseprovide how and whereapplica.tions for information may be made, how they will be determinecL and who will do so. Refusals of information would be subjectto the requirements of sP..ction 6 (d).Sr:c. 4. RULE lvL-\KING.-The introductory clause xempts from all ojtlte refl1/irements of section 4- any rule making '0 jar as there are involved(1) military, naval, or joreign affairs functions or (2) matters relati'ngto agency managf'7Y1enl or personnel or to public property, loan-8, grants,benefits. or. contracts.These exceptions would not, of course, relieve B.ny :tgellcy fromI'equirements imposed by other statutes. The :phrase c,. 'ol.o affairsfundioilS," used here and in some other provislOns o f ~ ; __ ul11, is notto be loosely interpreted to mean any function extending beyond theborders of ths United States hut only those "affairs" which so affectI'elations with other governments that, for example, public rulemaking provisions would clearly provoke definitely undesirable int.ernational consequences. The exception of matters of management orpersonnei would operate only so far as not inconsistlmt with otherprovisions of the bill relating to internal management or personnel.The exception of proprietary matters is included because the principa.l considerations in most such cases n'late to mechanics and interpretations or policy, and it is deemed wise to encourage and facilitatellle issuance of rules by dispensing with all mandatory proceduralrequirements. None of these exceptions, however, is to be takeI.1 asencouraging ager..cies not to adopt voluntary public rule making prot:edures where m.;eful to the 8.iency or beneficial to the public. Theexcp.ptions merely confer a complete discretion upon agencies to decidewhat, if any, public rule making procedures they will adopt in a givensituation within their terms. It should be noted, m o r e o v e ~ , that theexceptions apply only "to the extent" that the e.'(cepted subjects aredirectlv involved. .(a) NOTICE.-General notice oj proposed T'1J.le mc.Hng m'!Wt be pttb-fished in the Fedmil Register and m1L8t incl'l.Uk ll) time, pltut, and

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14 ADMINISTRA'fIVE PROCEDURE ACTnature of j?roceedings, (2) reference to authority under which held, and. (3) terms, substance, or issues involved. However, except 'where noticeand hearing is required by some other statute, the subsection does notapply to rules other tha7/. those oj substance or where the agency for goodcause finds (alld incorporates the jindi11g and reasons therefor in thepublighed rule) that notice and public proced'ure are impracticable,1.lnneceSSGnj, or contrary to the public interest.Agency notice must be sutlicient to fairly apprise interested partiesof the issues .involved, so that they may present responsive data orargument relating thereto. The subsection governs the applicationof the public procedures required by the next subsection, since thoseprocedures only apply where notice is required by this subsec.t.ion.Agencies are given discretion to dispense with notice (and consequently with public proceedings) in the case of interpretative rules,gelwml statements of policy, or rulos of agency organization, procedure, or practice. 'l'his does not mean, however, that agenciesshoul(l not-where useful to them or helpful to the public-undertakepublic procedures in connect.ion with such rule making. The exemption of situations of emergency or nece8sity is not an "escape clause"in the sense th:lt any agency has discretion to disregard its t.erms orthe facts. A t r u ( ~ n.nd supported or supportable finding of necessityor emergency must be made a.nd published. "Impracticable" meansa situation in which the due and required execution of the agencyfunction" would he unavoidnhly prevented by its undert.aking publicrule-rna-king proceedings. "Unnecessary" means unnecessary so faras the public is concerned, as \\TuuM be the cas" if a minor or merelytechnical amendment in which the public is not particularly)uterestedwer_c involved. "Public interest" supplements the terl]tS '''imptacticable" or "unnecessary"; it requires that public rule':'making rr0c e d u n ' ~ shall not _prevent an n.genc! from operating and that, on LIlt;other hand, lade of public intcrest m rule making warrants an a g ~ n c yto dispense wit.h public procedure. I t should be noted that whereauthority beneficial to the public does not become operative until arule is issued, the agency may promulgate the necessary rule immed.lo.tely and rely upon supplemental procudures in the ml,ture of a publicreconsideration of the issued rule to satisf:v the requirements of t h i ~section. Where public rule-making procedures are dispensed with,the provisions of subsections (c) and (d) of this section would nevertheless apply.(b) PROCEDUREs.-Ajter such notice, the agency must afford intere8":e.dp e r . ~ o n s an 0l1'porlunity to parlicipatp, in the ru.le making at least to theextent oj submitting written data, views, or argument; fJ..nd, after consideration oj such presentations, the agency must incorpor.a,te in any rul.esadopted a cow;ise general statement oj their basis and pu"pose. HO'tJJevcr,where other statutes require rules to be made after hear-ing, the rquire-ments oj sect-;'ons 7 and 8 (reliding to publw hearings and dectsionlthereun) apply in place of the provision$. of this subsection.This subsection states, in Its first sentence, the minimum requirementsof public rule making procedure short of sts.tutory hearing.Under it agencies .might in addition confer with industry advisorycommittees, ( ~ o m m l t organizations, hold informal "hear4lgs," and thelike. Considerations of practicality, necessity, alld public interest asdiscu.ssed in connection with subsection (a) will naturally govem theagency's d e ~ m n i n a t i o n of the extei:lt to which public pIoceed.i.n2s

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ADMINISTRATIVE PROCEDURE ACT 15should go. Matters of great import, or those where the public submission of factR will be either useful to t,he agency or a protection tothe public, should naturally be accorded more elaborate public procedures. The agency must analyze and consider all relevant matterpresented. TiLe required statement of the basis and purpose of l'ulesissued should not only relate to the data so presented but with reasonable fullness e.\plain t,he actual basis and objectives of the rille.(c) EI

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16 ADMINISTRATIVE PROCEDURE ACTjudicial review, through declaratory judgment or other procedurespursuant to section 10.

SEC. 5. ADJUDICATIONS.-The various subsequent pro-vis-ions of section 5 relating to adjudications aIJply only where the case is otherwiserp.quired by statute t

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J..DMINISTRATIVE PROCEDURE ACl' 17affected 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 themoving rarties; and in such cases the respondent parties must givenotice 0 the issues of law or fact which they controvert 80 that themoving party will b.e. a p ~ r i s e d ?f t ~ issues. he must sustain. .Thepurpose of the prOVlSlon lS to slDlplify_ the ISsues for the benefit ofboth the parties and the deciding a u t h ~ r i t y . The last sentence~ e q u ~ ' i l J g the ~ n v e n i e n c e and necessit:t of tJ;1e parties to be cousult;{m fixmg the tImes and places for hearmgs, mcludes an agency partyas ,veIl as a pnvate party; but the agency's convenience is not to out-weigh that of the private parties and, while the due and requiredexecution of agency functiOnsmay be said. to be paramount, thAt consideration would be controlling only where a lack of time has beenunavoidable or a paIticular place of hearing is indispensable and doesDot deprive the private partieS of their full opportunity for a hearing.(6) PaocEDURE.-The agency is req:u,ired first to affo.rd partie8 anopportunity Jor the settlement or adjustment oj iB8'Ue8 (where time, 1M'TUl1:ure oj the proceeding, and the 1!U6lic interest permit) follOwed, to tMe:i tent t1vJ,t issues are not 80 "8ettkd, by hearing and decUion 'Under 8uticmBr and 8. . The preliminary ~ ( ~ t t l e m e n t - b y - c o n s e n t I?roVlSion of this subsection18 of the greatest lmportanC8. Such adjustments may --go to thewhole or any part of any case. The limitation of the req1!irement tocases in which "time, the nature of the proceeding, and the publicinterest permit" does llOt mean that formal proceedings, to theexclusion of prior opportunity for informal settlement, lie in thediscretion of any agency irrespective of the facts, legal situationp r ~ s e n t e d or practical aspects of the case. I t does not mean thatagencies have an arbitrary .choice, or . t h ~ t they may consult theirmere preference or convemenos. I t 18 mtended to exempt onlysituations in which, for example, (1) time is unavoidably lacking, (2)the r..s.ture of the proceeding is such that for example (as m some lO1"Q18of rule making) the great number of parties or possible parties makesit unlikely that a ~ adjustment could be reached, and (3) the 00- ..ministratlve function requires immediate execution in order to protectthe tangible and demonstrable requirements of pul;>Iic interest. -(c) SEPARATION OF' 'FuNCTION8.-Q,ff icers wk!! 1JT.eside at the .toJcingQf eviderwB m'U8t make the deciritm or reCQ1Tl,meniJed, deciritm in the case.The,Y may ~ c !"ny per80n or parl:g e3cept openly a n d u ~notue, BaDe tn the d t 8 p O ~ oj CUBU!f1!N'1I ez parte f.!WJUrs, and theymay not be made 8JLbJm to.the supeNn8Un oj pr08ecutingojficerS.latter may not.Participate in the.decisions 83.cept a8 witness or counBel inpublu proceeding8. However! the. sub8ection i8 not to apply in deter-mirring applications for initial licenus or :Pfl8t r e a 8 o n a b l e n e s ~ ofrrUes: nor dou it ayp[y totke to'R agency or members thereof.The g i s . ~ _ of. the subSec.. t i ~ n 1 S ~ t n o i n v e s t i g a ~ i I ! g or prose-cutingofficer sluill directly or mdireotJy U l any manner mHuence or controlthe operations o l ~ r i n g a n d d e c i ~ . . . ofticers,ex.c.ept &8. aparticipantin .public p l " C ? c e ~ , .and eveu. . t h ~ . in no different fashion than thepnvatepartleB or i h e l 1 " ~ . p r e s e n . . ..tativ.es. u ~ x . p.&rte m a t t e r s a u t ~ r IZed bylaw" means . p $ S S ~ .OD.r.eqUests for a d l o ~ m m e n t s , .~ n t ~ n u -&.noes,. filing of papw.s.and . forth,... The e x ~ n l p t l O n of applicatiOns. ., '

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18 ADMINISTRATIVE PROCEDURE ACTfor iuitinllicensel'l frees from the requirements of the subsection suehmatters as the granting of certificates of convenience and necU5Sitywhich are of indefinite duration, upon the theory that in mostlicensing cases the original application may be much like rule making.The laUer, of ('ourse, is not subject to any provision of section 5. Theexemption of cases involving" the past reasonableness of rates" (iftriable de 1l0VO on judicial review they would be exempted in anyev('nt) is made for the same reason. There al'e, however, someinstances of either kind of case which tend to be accusatory in formand involve sharply.controverted factual issues. Agencies shouldnot apply the C'xceptlOns to such cases, because they are not to beintC'rprctro as precluding fair procedure where it is required. .A furtlu'r word may be said as to the last exemption-of the agencyitsC'lf or thction does not mean that any agency empowered to issueorders may issue declaratory orders, because it is limited by the introductorv ~ f n u ~ ( ' s of section 5. Thus, such orders may be issued onlywhere 'tIll' r.g"

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-ADMINISTRATIV PROCEDURE ACT 19

be taken as recognizing or denying the propriety oj1wnlawyersrepresentingpa7't'les.This subs,ection is designed to confirm and make effective the rightof interested persons to appear themselves or through or with.counselbefore any agency. The word "party" in the second sentence is to beIlnderstood as meaning any person showing the requisite interest inthe matter, since the subsection applies in connection with the exerciseof any agency authorit,y w h ~ t h e r or not formal proceedings are available. The phraso "responsible officers l ', as used here and in someotherprovisions, both includos all officers or employees who really determinematters or exercise substantial advi')ory fUllctions and excludes thosewhose duties are merely formal or mechanical. The third sentencedoes not require agencies to give notice to all who may be'affected,but merely to receive the presentations of those who seek to maket h ( ~ m , The qualifying -words in the third sentence-which read"S ) far as the responsible conduct of public business pE.'nnits"preclude the undue harassment of agencies by numerous pettyappearances by or for the same party in the same case; but they do not conferupon agencie:J a discretion to emasculate the subsection or predudeinterested persons from presenting fully and before any responsibleofficer or employee their cases or proposals in full. The reference to"stop-order or other summary actions" emphasizes the necessity foran opportunity for full informal appearance where normal and formal!!I'aring and decision requirements are not applicable or art' inadequate.The requirement that agencies proceed !{with reasonable dispatch toconclude any matter presented" is a statement of legal requirementthat no agency shall in effect deny relief or fail to conclude 8. case bymere inaction.The final sentence provides that the su.bsection shall not be takento recognize or deny the right of nonlawyers to be admitted to practice before any agency, such as the practitioners before the InterstateCommerce Commission. The use of the word "counsel" meanslawyers. While the subsection does not deal with the matter expresslyz the committee does not believe that agencies are justified inlaying burdensome a ~ i o n reqUirements upon members of the barin good standing before the courts. 'rhe right of agencies to passupon the qualifications of nonlawyE",1'8, however, is expressly recognized &Jld preserved in the subsection.(b) INVESTIGATIONB.-Investigative _proce88 is not to be is8'IUd orenjoTcf ti except as autlwrized by law. P,rsonB compeUed to 8'Ubmit dataor c1Yi/lence are entitled to retain or, on payment of com, to procurecopies ex.cept that in non'P'Ublic pToceedi'M}8 a witness may for good ca/48tbe limited to inspection Of the ojficial transcript.Th is section is designod to preclude ufishing expOOitioDS" andinvestigations beyond the jurisdiction or authority of an agency.

I t applies to any demand, whetheror not a formal subpena is actuallyissued. "Nonpublic investigatory proceeding" means those of theKrand jury kind in wwch evidence is taken behind closed doors.The limitation, for good c&use p to inspecti

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ADMINISTRATIVE PROCEDUBlD Aarcopies or an opportunity for inspection in order to assure that theirevidence is correctly set forth, to refresh their memories in the caseo! stale proceedings, and to enable them to be advised.by counsel.They should also have such copies whenever needed in legal or adminIstrative proceedings.

(c) SUBPENAs.-W'Mre agt'Tl.cie8 are by law authorized to is8'Ue sub-pena8, parties may 8ecure them upon r e q ~ 8 t and 'Upon a statement orshowing oj general relevance and reasonable scope if the agency rules sorequire. Where a party contests a 8'Ubpena, the court is to inquire intothe situation and, 80 far as the 8Ubpena is jound in accordance with law,issue an order requiring the production oj the evidence 'Under penalty ojcontempt jor failure then to do 80.This proVlsion will assure priVftte parties the same access to subpenas as that available to the representatives of agencies. It willalso prevent the issuance of improvident subpenas or action by anagency requiring a detailed, unnecessary, and burdensome showing ofevidence which might fall into the hands of the party's adversaries orinvestigators and prosecutors (who ill any event should not haveaccess to such papers directly or indirectly). The subsection constitutes a statutory limitation upon the issuance or enforcement ofsubpenas in excess of agency authority or jurisdiction. This doesnot mean, however, that courts should enter mto a detailed examination of facts and issues which are committed to agency authority inthe first instance, but should, instead, inquire generally into the legaland factual situation and be satisfied that the agency could possiblyfind that it has jurisdiction. The subsection expressly recognizes theright of parties subject to administrative subpenas to contest theirv a l ~ d i t y in the courts prior to subjection to any form of penalt.r fornoncomplian!'.e. _(d) D ~ N I A L 8 - P r o m p t notice is to be given oj denials of req:tUsts inany agency proCt'-eding, accompanied by (J. tJimple statement oj grounds.This subsectiJn affords the parties in any agencyproceediJ:ig,whetheror not fonnal or upon hearing, the right to prompt action upon theirrequests, immediate notice of such action, and a statement of theactual JP"OUDds therefor.- The latter should in. any ease be sufficientto apprIse the party of the basis of the denial and any other or furtheradministrative remedies or recourse he may have. A sta.tement ofthe actual grounds need not be made "in affirming a prior denial. orwhere the denial is self-explanatory." However, prior denial wouldsatisfy the subsection requirement only whero the grounds pre-viouslystated remain the actual grounds and Elufficiently notify t.he i'arty asset forth above. A self-explanatory denial must meet the same test;that is, the request must be iIi such form that its' mere denial fullyinforms the party of all he would otherwise be ec.titled to havesta.ted.SEC. 7. HEARINGS.-Section 7 relating to agenc-J hearings appliuonly where hearings are required btl sections 4 or 5. .As heretofore stated in connection with sections 4 and 5, the billrequires no hearings unless other statutes contain such a requirementin particular cases of either rule making or adjudication. Thissection 7, therefore, is merely supplementary to sections 4 or 5 inthe relevant cases. . -4) PRESIDING OnlcERs;-The hearing must be held eithtr by theagency, a member or members oj the board w h ~ h , c.omprueB it, tm4 or

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'..ADMINISTRATIVE PROCEDURE A fR 21

more examiner8, or other o.ffieers specially provided for (n or duignatedby other statutes. Al! presiding and deciding o j f i ~ e r s are to operateimpartially. They may at any time withdraw if they deem themselfJe8disqualified and, 'Upon th! filing of a proper affidati,t of personal bias ordisqualification agaimt them, the agemy i8 re(fUired to d e t e r m i ~ thematter as a part of the record and decision in the case.This subsection provides two mutually exclusive methods of hearing-by the agency itself (or ODe or more of its members) or by subordinate officers. A third kind of hehrring offiter recognized in thissubsection is one specially provided for or named in other statutes.\Vhoever presides is subject to the remaining provisions of the bill.They must conduct the"hearing in a strictly impartial manner, ratherthan as the representative of an investigative or prosecuting authority,but this does not. mean that they do not have the authority and d u t y e.g a court does-to make sure that aU n e ( ' . e ~ ~ r y evidence is adducedand to keep the hearing orderly and efficient. The pi-ovisiou for affi-davits of bias or personal disqualification requires a decision thereonby the agency in, and as fI pll.rt of,. the case j it thereby becomes subject to administrative a.nd judicial review. That d('eisioll might bemade upon the affidavit alone, as for example, the protest might bedismissed as insufficient on its face. The agency itself may hear anyI"plevant argument or facta, or it may designate an examiner to do so.The effect which bias or disqualification shown upon the record mighthave would be determined by the ordinary rules of law and the otherprovisions of this bill. I f it appeared or were discovered late, it wouldhave the effect-where issues of fact or discretion were important andthe conduct and demeanor of witnesses relevant in determining t h e m of rendering tlre recommended decisions or initial decisions of suchofficers invalid. This consequence will require agencies and examinersthemselves t take care that they do not sit where s u ~ j e c t to dis-qualification or conduct themselves in a manner which will invalidatethe proceedings.(b) HEAR I NG. POWERs.-Presidi1l1J officers, B'Ubject to the rules ojprocedure adopted by the agency and with-in its power8, have amlwrUyft (1) fldmi1/ixtfT oathJf, (2) i881U 81lChsubperuis as areamlwriztd bylmiJ, (3) rec-ei,'e F.V'idence and rule u1'.0n offer8 ofproof, (4) taks de]iositio7UI{)r c a u ~ e dep(J" itio1ts to be ialc"erl" (5) regulate. the hearing, (8) hold con-ferences jor tke settltmtmt or 3implification of tAe 1.88Ue8, (7) disp088 of'procedurfll req 1ltsts, -(8) make deci8iona or recommended tkci8ionB und,er.section 8 of the bill, alld (9) 6urciBe otAera1.lJJuJrity CJ8 provided by agencyrule r01ls1stent urith the remaindf7 of the bill.This subsection dop,s not expand the power.J of agencies. I t is-designed to assure that the presiding officer will perform a real function rather than serve merely as a notary or policeman. He wouldhave and should independently exercise all the powers numbered inthe subsection. The agency itself-which must ultimately eitherdecide tbe case, or consider reviewing it, or hear appeals from theexaminer's decision-shottld not in effect conducthearmgs from bf.iliindthe scenes where it cannot know the d ~ t a i l e d ha{lPeI)ings . ~ t h e hearingroom and does no t h ea r or see t he p nv at e partieP. ' . . ...(c) EviDENCE.-&cept Q.8 statutes o t ~ p r O ) l i d e , . the propone1itof a rttk or orlUr !t/UIM bu;tkn oj F . 0 o J . W A i l ~ any ~ may her e c t i v e ~ , aB matter. of pol,ltI/ .Gg6'11eU8' ~ a r ' - .. f'I!Ii1l.tred to providt Jar !"pe u l ~ n of ' " . ~ f t I (J,'fi,d'Ufid1l/.1l r ~ p d j t w u , ~ and no 8a.ndlP1,

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- .. _ - " - - ~ - C ' - - - - - - ~ _ .

ADMINISTRATIVE PROCEDURE ACTmay be imposed 07 rule or order be issued, except as su.pported by relem,nt,reliable, and probative evidence. Any party may present his case ordejense by oral or documentary evidence, submit rebuttal evide.nce, andconduct reasonable cr088-examinati.on. However, in the case of rulemaking o.r deter-mining applieationa for initial licenses, the agency mayadopt procedures jor the submission oj euidence in written jorm 80 far asthe intere8t oj any party will not be prejudiced thereby.That the proponent of a rule or order has the burden of proof meansnot only that the party initiating the proceeding ha.s the gen('rn]burden of coming forward with a 'prima fu.cie case but thn,t otherparties, who are proponents of some different result, also for tha.tpurpose have a burden to maintain. Similarly the requirement thatno sanction be imposed or r u l ~ or- order be issued except upon evidenceof the kind specified means that the proponents of (1, dP.lllf'J of reliefmust sustaID such denial by that kind of evidence. For example,credible and credited eviden.ce submitted by the applicant for 8license may not be ignored except upon the requisite kind and qualityof contrary evidence. No agency is authorized to stand mute .a.ndarbitrarily disbelieve credible evidence. Except as applicants for alicense or other privilege may be required to c o m ~ forward with aprima facie showing, no agency is entitled to presume that the eonductof any person ('r status of any enterprise is unlawful or improper.The second and I = J ~ r y sentence of the subsection is frarilcd on t h theory that an a .. trative hearing is to be compared with anequity proceeding in the courts. The mere admission of evidence isnot t.o be taken as pr3judicial error (there being no lay jury to beprotected from improper influence) although irrelevant a.nd undulyrepetitious evidence is to be excluded as a matter of efficiency andgood practice; and n:> finding or conclusion may be entered exceptupon evidence which is plainly of the requisite materiality s.nd.competence; that is, "relevant, reliable, and probative evidence."Thus while the exclusionary "rules of evidence" do not apply exceptas the agency may As a matter of good practice simplify the hearingand record by excluding obviously improper or unnecessary evideuce.the standards and principles of probity and reliability of evidencemust be the same as thosa prevailing in courts of law or equity innonadministrative cases. There are no real rules of probity andreliability evt\n in courts of law, but there are certain standards a.ndprinciples-usually applied tacitly and resting mainly upon commonsenso-which people engaged in the conduct of responsible affairsinstinctively understand and act upon. They may vary with thecircumstances and kind of case, but they exist and must be rationallyapplied. These principles, under this subsection, are to govern inadministrative proceedings. '. .The right of cross-examination extends, in a proper case, to writtenevidence submitted pursuant to the last sentence of the subsection aswell as to eases in which oral or documentary evidence is received in

i: ' open hearing. Even in the latter case, subject to the appropriatesafeguards, technical data may as a matter of convenience be reducedto writing and introduced as in courts. The written evidence provision of the last sentence of the subsection is designed to cover situations in which, as a matter of general rule or :practice, the s ~ b m i s s i o nof the whole or substantial portions of the eVidence in & case is donein written form. In those situations, however, the provision limits

'"1-.-,

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the practice to specified classes of cases and, even then, only whereand to the exten1ii that "the interest of any partywill not be prejudicedthereby." To the extent that cross-examination is necessary tobring out the truth, the party should have it. Also, an adequateopportunity must be provided for a party to prepare and submitappropriate rebuttal evidence.(d) RECoRD.-The record oj et'idence taken and papers filed 1.8 e ~ l u -Si1Je Jor duision and, upon payment oj costs, is available to the parties.'Where decision re::-t8 on official notice oj a materialJa.ct not appearing inthe el/..zdence oj record, any party may on timely request show the contraMJ.The "offi('inl notice" mentioned relates to the administrativE'practice of taking facts as shown and true though not in the record.This is done by analogy to judicial notice familiar in court procedure.VVhere agencies take such notice they must so state on the record orin. their decisions and then afford the parties an opportunit,y to showthe contrary.SEC. 8. DECISION8.-Section 8 applies to cases in wltich a h,w,ring 1.8required to be conducted pu"'.mant to section 7. . ,Like section 7 upon which section 8 depends, this section is supplementary to sections 4 and 5 in cases in which agency action isrequired to be taken alter hearing provided by statute and nototherwise excepted from the operation of sections 4 or 5.(a) ACTION BY SUBORDINATEs.-Where the' agency has not presidedat the reception 0/ the f;fJidence, the presiding officer (or any oth.er officerqualified to preside, in cases eumpted from S1J,bsec. (c) Qf sec. 5) mustmake the initial decision unless the agency-by general rule or in aparticular case-undertakes to make the initial decision. IJ the presiding officer makes the initial decision, it becomes the decisir.m of tJMagency in the oosence of an appeal to the agency or review by the agencyon its own motion. On BUch appeal or review, the agency has all thtpowers it would have had in making the initial decision. IJ'ti16 agentymakes the initial decision without hauin'g presided at the faking oj 1Mevidence, whatever oJficer took the evidence m'l/'st first make a recommendeddecision except that, in rule making or determining applicatioTUJ Jor.initial licenses, (1) the agffTU:Jl11UlY instead issue a tentative. decision orany oj its r 6 s p ~ i b 1 6 ojficers may recommend a decision or (1) 81U]"intennediate procedure may be whoUy omitted in any c.ase in 1,fhich, tAeagency finds on the record tlI4t fM, eucution oj its Junctions imperatii;elyand unavoidably 80 reg:uires. . , ...This subsection requires in effect that the officer who presidl3d shallmake the initial decision in the case, or the agency may do SOl but inthe latter event the officer who presided must make a recomr..lendeddecision. However, the recommended decision may be supplied by,a tentative agency decision or a I1roposed decision by its responsibleofficers in certain cases or, where the due and timely execution ofagency functions will not permit tluc:h intermediatl3 action, it may beomitted entirely. The partiesmight agree to waive such intermediateprocedure in any case. The reference to an.appeal or review by theagency does not cut off any rd1"tber appeals to or review by any existing Buporior agency authorized to hear appeals or review decisions ofthe fiNt agency. The agency for 'Which the e."taminer. or other pr6siding officer. nmctiol1s J;Ilay .Il()t dispense with th" recommended decision e x ~ p t , as. p r o v i ~ e d b y the Slibsection. . . '

\Ii!I

ADMINIS'l'RATIVE PROCEDURE Ac:r 23

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24 ADMINISTRATIVE PROCEDURE ACTThe provision that on agency review of initial examiners' decisionsthe agency shall have all the powers it would.have had in making theinitial decision'dos not mean that the initial examiners' dedsions (ortheir recommended decisions) are without effect. They become apa.rt of the record in the case. They would be of cODsequence, forexample, to the extent that mater..al facts in any case depend on thedetermination of credibility of witnesses as shown by their demeanoror conduct at the hearing. Since the ex&nliner system is made necessary because agencies themselves cannot hear cases, some device mustbe used to bridge the gap between the officials who hear and those whodecide c a ~ e s .The alternative intermediate procedure which an agency may adoptin rule making or detennining applications for initial licenses lies in thediscretion of the agency. In order to simplify the bill, the exceptionwhich confers this discretion is broadly drawn. However, it ma;", benoted that even in those ~ e s , if issues of fact are shal"{lly controvm-too

or the case or class of cases tends to become accusa'tory m nature, sound-practice would require the agency to adopt the intermediate recommended decision procedure(b) SUB14ITl'.\LS AND DECISIONS.-Pr io r to each recommended or oth6decision or reuiew the parlie8 must be given an opportunity to B'l.tbmit jorthe full consideration 0/ deciding ojJkers (1) proposed findings and c0n-clusions or (S) eueptwns to recommended decisions or' other decisionsbeing appealed or reviewed, and (3) 8'Upporting r e a ~ o n s Jor BtU'" jirulings,conclusions, or ezceptiuns. AU recommended 01' other decisions lecome apart oj fM record and must include (1) Andings and conclU8ions, as wellas the b a s i ~ ther,1or, 'Upon aU the mateT"ittl issues ojjad, law, or discretionpresented by the r.ecord and (!) the appropriate agency action or denial.Ordinarily proposed findings and conclusions are submitted only tothe officers ma.king the initial decisioD, and the parties present excel'tiona therp-after if they contest the result. 'However, such exceptionsmay in form or e f f e ( ~ t include proposed findings or conclusions for thereviewing aut.hority to consicer as 8. part of the exceptions. "Sup- ,porting reasons" mcans t h r . . ~ briefs on the law and facts must be received and fully considertJ b"" eveiy recommending, deciding, orreviewing officer. They inust arso hear such oral argument as may berequired by law. "'nere the issues of fact are serious and thebecomes one adversary in character, the ~ e n c y should provide for oralargument before all recommending, deciding, or reviewing officers atleast as a matter of good practice.. ,..The requirement that the agencymust state the basis for its findinoand conclusions means that such findings and conclusions mU$t besufficiently related to the record ' to advise the parties of theirreccrd bss)s. Most agencies will do so by opinions which reason andirelate the issues of fact, law, and discretIOn. Statements of reason.,however, may be long or short as the nature of the case and theDoveltyor c ~ m p l e x i t y of the i s s ~ e s may require.. .Fmdlllgs and conclusIOns must mclude,all the relevant lSSues preBBnted by the record in the light of the la"involved, They ma.y be~ e or many. . A { l a l " ~ i c u l a ! concll:!sion of law may r e n d e r ~ e r t a i n ..ISSUes and findmgs munatenal, or VIce versa. Where oral t ~ t u n o n y ,.,.is. conflicting or subject to doubt of. its .credibility, t h c r e d i ~ i l i t y o f ~ 1WItnesses would be a ne.cesaary finding J the facts&I'& materia\. I t )jshould also be IiOted that tho relevant l88ue& extend to matters Off)1

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ADMINISTRATIVE PROClllDtTRB Aaf. 25administrative diScretion aswell as of law and fact. This is importantbecause agencies often determine whether they have power to actrather thaD. whether their discretion should he exercised or how itshould be exercised. Furthennore, without a disclosure of the basisfor the exercise of, or failure to exercise. diseretion, ti'le p.ries areunable to defa-rmine what other or additional facta they mig\1t offerby way of rehearing or reconsideration ofdecisions. 'SEC. 9. SANCTIOl'iS AND POWERB.-Sect ion 9 relating to power3 and8anctions refers to the ezercise of any power or a'Utl,-ority by an agency. ,Unlike sections 7 and 8, this section applies in all relevant cases,whether or not the agency is reguired by&tatute to proceed u ~ o n hearingor in any special manner. I t also applies to any power or authoritythat an agency may asstime to exercise.- .(a) IN GENERAL.-No sanction may be imp08ed or 8Ubsf.antiv8 rttU ororder be issued except within t h jurisdiction delegated to the agency. andas authorized by law. .This subsection embraces both substantive and procedural requirements of law. I t means that agencies may not undertake anythingwhich statutes or other appropriate sources of authority (such astreaties) do not authorize them to do. Where these sources are .specific in the authority granted, no additional authority may beassumed. Where these sources are general, no authority beyond thegenerality granted may be exercised. In particular agencies.may

not impose sanctions which have not been s p e c i f i ~ y or generallyprovided for them to impose. Thus, an agency which is authorizedonly to issue cease-and-desist ordersmay not set up a licensingsystem;and conversely a licensing authority may not assume to issue desistorders. A rule-making authority may not undertake to adjudicatecases, and vice versa. Of course some statutes confer upon the sameagency authority to exercise more than one of these forms of regulation. An agency authorized to ~ 8 t e trade practices may notregulate b a n k ~ , and so on. Simifarly, no agency may undertakedirectly or indirectly to exercise the f u n c t i o ~ of some other ~ y The subsection confines each agency to the jurisdiction delegated toit by law. .. (b) LICEN8Es.-AgencU, ure reg:u,ired, tDitA d'IU regard for tks rightsor privileges.oj aU the i ' l l 4 ~ ~ .ted rtUs or per,ons a d ~ e r 8 . e l Y .. aqecJed,,to proceed with. reasonabu 4 to c-oncl1UltJ awl decide proceed",,,,,,on applications for liunsu. aTe not to witAtlraw a license 'fJJitlKiuJfirst gi11ing the licensee notice in tmiting and an opportunity to demfm,.vtrate or achieve compliaru:e 1Di.tA all la1l!ful, retj'Uvsments, acept incuses of willulne88 or tho,e in 'Which public 1I,eaJ,tA, interut, or 8f1,jdJIrequires ot1ierwise. I'll, busines," oj a continuing n a t u r e ~ no liceMe6:l1Jires u'lli:il timely applieationB for ftetD liumeB or 1'B1&e1DCU8 'ar' deter-mtned by agency. . . . .. This section operates in all cases whether or nQt hearing is required.The requirement of dispatch means that .agencies must proceed 88r a p ~ d l y as is 'feasible ana p r a c t i c a ~ l e , nther at their. own c o n ~ ; ...vemence. Undue delays are subJect to correction by mandatolY'i n j u r i C ~ O D P U l ' 8 ~ t to s e e ~ ~ t ; i 10. The exceptions to the seeona .sentence, r.egarding : ~ V O c a t l O n s , .apply only where th.e demonstrablefacts fully and fiirly warrant the application of the exceptions.Willfulness muSt.be manifest. ThBsame is true of "pu'blic health,interest, o r ~ 8 t . i ~ " 1 ' h e 8 t a n d a r d of "publio ,* . * .*: -intem.t,rs. Bept8.,'1":1, "'01.&:--18

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26 ADMINISTRATIVE PROCEDURE ACTmeans 8 situation requiring immediate action i r r e s p e ~ t i v e of theequities or injuries to the licensee, but the term does not confer uponagencies an arbit.rary discretion to ignore the requirement of noticeand an opportunity to demonstrate compliance. However, thislimitation does not apply to tempora.ry permits or temporary licenses.

SEC. 10. JUDICIAL REVIEw.-Section 10 on judi.cial review does notapply in any situation so far as there are inrolz'ed matters with respect towhich statutes preclude judicial ret"iew or agency action is by law com-mitted to agency discretion.Very rarely do statutes withhold judicial review. I t has neverbeen the policy of Congress to prevent the administration of its ownstatutes from being judicially confined to the scope of a.uthoritygranted or to the objectives specified. Its policy could not be otherwise, for in such a. case statutes would in effect be blank checks drawnto the credit of some administrative officer or board.The basic exception of matters committed to agency discretionwould apply even if not stated at the outset. If, for example, st.atutesare drawn in such broad terms that in a given case there is no lawto apply, courts of course have no statutory question to review.That situation cannot be remedied by an administrative procedureact but must be treated by the revision of statutes conferring administrative powers. However, where statutory standards, 'definitions,or other grants of power deny or require action in given situations orconfine an agency within limits 8S required by the Constitution,. thenthe determination of the facts does not lie in agency discretion butmust be supported by either the a.dministrative or judicial record.

(a) RIGHT OF REVIEW . -Any y ~ r s o n suffering legal wrong becau.se ojany ageney action, or adf:er8ely atJccted within the meaning of any statute,is entitled to Judicial revU'lIJ.This subsection confers a right of review upon any person adverselyaffected in fact by agency act.ion or aggrieved within the meaning ofany statute. 'l"he phrw,e "legal wrong" means such a wrong as isspecified in subsection (e) of this section. I t means that somethingmore than mere adverse personal effect must be shown-that is, thatthe adverse effect must be an illegal effect. The law so m.ade relevantis not just constitutional law but any and all applicable law.. (b) FORM AND VENUE OF ACTION.-The techni.calform oj proceedingfor Judicial review is any special proceed'ing provided by statute or, i T the absence or irwdR,q'llALCY thereoj, any relefJ'tnt form oj legal action (su.chas those for declaratory Judgmenta or injunaions) in any court of compe-tent jurisdiction. .Moreover, agency adion is also made 8U.bject to judicialrevUw in any civil or criminal proceeding for enJorcement except w theextent that prior, adequate, and exclusive opportunity Jor Buch review isprouided by law.The first sentence of this subsection is an express statutory recognition of the so-called common-law actions as being appropriate andauthorized means of judicial review, operative whenever special formsof judicial review are lacking or insufficient. The declaratory judgment procooure, for example, may be operative before statutoryforms of review are available; and in a proper case it may be utilizedto determine the validity or application of ageney action. The expression "special statutory revil3w" means not onJy special reviewproceedings wholly created by statute, but so-ea.Iled oommon.}awforms referred to and adopted by statute as the appropriate mode of

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ADMINISTRATIVE PROCEDURE ACTreview. The excep'tion f r o ~ "prior, adequate, and exclusive review" in the second sentence it! operative only where statutes,l'ither expressly or as they Bre interpreted, require parties to resort to,orne special statutory form of judicial review which is prior in time!l l ld adequate to the case. .(c) REVIEWABLE ACTs.-Agency action made reviewable speciaUyby statute or final agency action jor which there is no other a d e ~ t ejlldicial remedy is subject to judicial review. I n additio-n, preliminaryf I r procedural matters not directly subject to review are reviewable 'Uponthe review oj final actions. Except as statutes may expressly r e q : u i r ~'dherwise, agency action is final whether or not there has been presentedor determi'ned any applir.ation jor a declaratory order, for any Jorm ojreconsideration, or (unless the agency o t ~ T w i 8 e requires by rule) Jor anappeal to superior apency authority.

"Final" action mcludes any effective agency action for whichthere is no other adequate remedy in any court. "Reconsideration"includes reopening, rehearing, e"t.l'.The last clause, permitting agencies to require by role that anappeal be ta.ken .to superior agency authority before judicial reviewl l ~ a y be sought, is designed to impleJIlent the proviSiOns of section8 (a). Pursuant to that subsection an agency may permit an exam-iner to make the initial decision in a case, which becomes the agency'sdr-cision in the absence of an appeal to or review by the -":'gency. I ftlH.. l'C is such n'view or appeal, the exa,miner's initial decision becomesinoperative until the agency determines the matter. For that reasonthis subsection permits an agency also to require by rule that, i f anyparty is not satisfied with the initial decision of ft, subordinate hearingofficer, the p!1rty must first appeal to the agency (the decision mean-while being inoperative) before resorting to the collI't.. In no casemay appeal to "superior agency authority" be required by rule unl6f)8the administrative decision meanwhile is inoperative, because othesrwise the effect of such a requirement would be to subject the party tothe agency action and to repetitious administra.tive process withoutrecourse. There is a fundamental inconsistency in requiring a personto continue "exhausting" administrative processes after administra-tive action has become, and while it ~ ' e m a i n s , effective.Cd) INTERIM RELIEI ' . -Pending judi.-tf..al review any agency may pos'-"pone the effective date o f its action. Upon conditwns and as may benecessary to prevent irreparabk injury, any reviewing court may postpone the effective date o j a1l/11 agency activn or Preserve tM stat'U8 quopending condusion :Jj review proceedings.

This section permits either agencies or courts, if the proper showingbe made, to maintain the status quo: . While it would not permit acourt to grant &n initial license, it provides intermediate judicialrelief for every other situation in order to make judicial review effec-tive. The authority granted is equitable and should be used by bothagencies and courts to prevent irreparable injury or afford parties aDadequate judicial remedy. '. ..(e) SCOPE OF REVIEw.-Jlevi,ewing courts are required to decide aUrelevant que8tionB ojlaw; iflW'pret con8titutional and statuf/J7'1I prwisi0n8,and determine the meaning or applicability o f any aueru:u acf:i,on.must (A) compel action,v/nJ,awftilJ,1/ 'Jbi,t'Meld q r 1!nre48O'1l4bly tklo/lI" (Jfld(B) hdd 'tJ/nlo/uJjul any a e t i o n J J i n d i ~ 8 , c or c o n d ~ j to. be (1).arbitrary, (I) conp-arg to t h e O ~ ' K - n , ( S ) contra'1lto-8f.atutuqrMorl.of statutqryrigM (4) _ t > b s ~ m B o l p r ~ w : . ~ " ~ ~ ~ ~ " 00-

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28 ADMINISTRATIVE PROCEDURE ACTunsupported by S'Uostanf:ioJ, evidence upon the admin';strative record wherethe agenC'jJ is authorized by statute to /wid heaM:ngs subject to bections 7and 8, or (6) unwarranted by t.he facts so far as the latter are subject totrial de novo. In malcing these determinations ,the- cwrt is to consider thewhole record or such parts as the partie,s may cite, and due account m'U8tbe taken of f/l,e rule oj prejud'l".cial error.This subsection provides that questions of law are for courts r ~ t h e rtlul.n agencies to decide in the last analysis and it also lists the severalcategories of questions of law. I t expressly recognizes the right ofproperly interested parti9s to compel agencies to act where they improvidently refuse to act. "Finding" and "conclusion" also meanfailure to find or 'conclude as the bw and the record may require.UShort of statutory right" mea.ns that agencies are not authorized togive partial relief where a party demonstrates his right to the whole.t'Without observance of procedure required by law" means not onlythe procedures required by this bill but any other procedures the lawmay require. USubstantial evidence" means evidence which on thewhole 1"ecord is clearly substantial, sufficient to support a finding orconclusion under section 7 (c), and material to the ISsues.The sixth category, respecting the esinblishment of fads upon trialde novo, would require the reviewing court to d e t e ~ m i n e the factsin any case of adjudication not subject to sectiona 7 and 8. I t wouldalso require the judicial

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ADMINISTRATIVE PROCEDURE ACT 29as may be neceSS{J,T?/ jor proceedings under sectiore-8 7 and 8, who are to bea-8signed to cases '.\n rotation soJar a8 practicable and to perform no inconsistent duties. The1l are removable only for good cause determined by theCivil Service Oommusi.on after opportunityJor hearing and upon the rer.ord thereoj. They are to rec.ei')e compensation prescribed by the Oommission independently oj agency recommenf1..

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30 ADMINISTRATIVE PROCEDURE ACTThe word "initiated" in the final clause of the section means a proceeding formally begun as by the issuance of a complaint by theagency (irrespective of prior charges or investigations) or of notice ofa rule-making hearing. As to new C8-3es, the effective dates providedin section 12 are deferred longer so far .9$ sections 7 8.Ild 8 are concerned in order to afford agencies ample time to p r e p ~ r e and make any

adjustments required in their procedures. The selection of examinersunder section 11 is deferred for a year in order to permit present military service personnel an opportunity to qualify for these positions.V. GENERAL COMMENTS

The bill is designed to operate as a whole and, as previously stated,its provisions are interrelated. At the same time, however, there arecertain provisions which touch on subjects long regarded as of thehighest importance. On those subjects, such as the separation ofexaminers from the agencies they serve, there has been a wide divergence of views. The committee h n in such cases taken the coursewhich it believes will suffice without being excessive. Moreover,amendatory or supplementary legislation can supply any deficiencywhich experience discloses in those cases. The c o m m i t ~ e believes thatspecial note should be made of the following situations:The exemption of rule making and determining initial applicationsfor licenses from provisions of sections 5 (c), 7 (c), and 8 (a) mayrequire change if , in practice, it develops that they are too broad.Earlier in this report, in commenting upon some of those provisionslthe committee ha,;, expressed its reasons for the language used anahas stated that, where cases present sharply contested issues of fact,agencies should not as a matter of good practice take advantage ofthe exemptions. .Should the preservation in sectioIl7 (a) of the "conduct of specifiedclasses of proceedings in whole or part by or before boards or other'officers specially provided for by or designated pursuant to statute"prove to be a loophole for avoidance of the examiner system in anyreal BeD!Je, corrective legislation would be necessary. 'That provisionis not intended to permit agencies to'Avoid the use of examiners butto preserve special stt\tutory types of hearing officers who contributesomething more than examiners could contribute and at the some timeassure the parties fair and impartial procedure.The basic provision respecting evidence in ' "Ction 7 (c)-requiringthat any agency action must be sUJ?,Ported by plainly "relevant,reliable, and probative evidence"-will require fUll compliance hIagencies and diligent enforcement by reviewing courts. Shoulathat language prove insufficient to fix and maintain the staridards ofproof, supplemental legislation will become necessary.TheHsubstantial evidence" rule set forth in section 10 (e) is exceedingly important. As' a matter of language, substantial evidence,.would seem to be an adequate expression of law. The difficulty - ; comes about in the practice of agencies to rely upon (a.nd of courts to cO;tacitly approve) something 'less-to rely upon suspicion, s u r m i s e ; t . . ~implications, or plainly incredible evidence. It will be the duty 01 ' the courts to determine in the final analysis and in the exercise of ; ~ t,heir ~ d e p e n ~ e n t tudgmentl .wheth!R" on the w h o l ~ record the evi-:....Id ~ n c e m a given mstance 18 suffiCIently substantIal to stlpport &< ~ finding, conclusion, or other agency action as a matter of l&w. mt". -.. . ~

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. . _ . _ - - - : - ' - - = - - - - - ~ ~ _ .

the first instance, p.owever, it will be the function of the .agency todetermine the sufficiency of the evidence upon which it acts-and theproper performance of its public duties will require it to undertakethis inquiry in a careful and dispassionate manner. Should theseobjectives of the bill as worded fail, Bupplementallegislation will berequired.' "The foregoing are by no means all the provisions which will requirevigilant attention to assure their proper operation. "Almost any provision of the bill, i f wrongly interpreted or minimized, may pree,entoccasion for supplemental legislation. On the other hand, should itappear at any time that the r e Q . . ~ e m e n t s result in some undueimpairment of a particular admmistrative function, appropriateamendments or eAceptions may be in order.INTERPRETATION AND E N F O R ~ E M : E N T . - E x c e p t in a few respects,this is not a measure conferring administrative powers but is onehtying' down definitions and stating limitations. These definitionsand limitationsmust, to besure, be interpreted and applied by agenciesaffected by them in the first instance. But the ,enforcement of thebill, by the iudependent judicial ir.terpretation and application of itsterms, is a function which is clemJy conferred upon the courts in thef i n a l 8 n a l y s i s . .I t will thus be the duty of reviewing courts to prevent avoidanceof the requirements of the bill by any manner