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Attorney General's Manual
on the

Administrative Procedure Act

Prepared by the
United States Department of Justice
TOM C. CLARK
Attorney General
'947

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HeinOnline -- 1 Attorney General's Manual on the Administrative Procedure Act 2 1947
 TABLE OF CONTENTS
Page
IN TRODUCTIO N..-
.-..- .- .- ..--...- .- ...- .......- .-.-....- ....- -- ..-.--.......- ........- .....
...---
Note Concerning Manner of Citation of Legislative Material-.----.--- ..------------ 8
I-FUNDAMENTAL CONCEPTS.. ............................................................................. 9
a. Basic Purposes of the Administrative Procedure Act....................... -_------ 9
b. Coverage of the Administrative Procedure Act...........................................
c. Distinction between Rule Making and Adjudication-.................................
II-SECTION 8, PUBLIC INFORMATION-. ...........................----------------------------------
Agencies-Subject-t-Section-8--------------------------------- 17
Agen cies
Exceptions u jectto
to e tion 3f
Requirements of Section .........................................
3---..-...-...-............17 17
(1) Any function of the United States requiring secrecy in the public
interest.......--.-.--.- ..-.......---...........--..----.----.-...-------------------------------
(2) Any matter relating solely to the internal management of an agency.. 18
Effective Date-Prospective Operation...-.....................----.-.----------------------------
SECTION 3 (a)-RuLES1.................................................................----
Separate Statement ....-..-.- ...-.--...----..-..-----....-..-.-.-.......-----------------------------
Description of Organization -...---- .....-..-- ...----.---.-...-.---...---------------------------
Statement of Procedures --.-.-..--.-.-...--.--.--.....---..--...-..-.------------------------
Substantive Rules.........-.--.-.-------..-.-..--..-..-.-...--...--.-----------------------------------
Section 3 (b)-Opinions and Orders.------.-- ..-- ..-- ...---.------------------------------------
Section 3 (c)-Public Records.. ----.--..- ..-...........--.-.-...--.-----------------------------
III-SECTION 4, RULE MAKING.-------------------......................................--------------------
Exceptions
(1) Any military, naval, or foreign affairs function of the United States.... 26
(2) Any matter relating to agency management or personnel or to pub-
lic property, loans, grants, benefits, or contracts.......- ...- ..----------------.. .
Public Property.--.-.-.---.----.------.-..-..-.--...-....-....--.-...--------------------------------
L oans. .- ...........-----...-........---.-.-.--..-..-....... ....-.- ........-------
Grants .....-------- ---..--.-..--.-- ..--.-- ..-.- ..-..........-.....-.....--------------------..
Benefits -...... ..-.----------- -----.--...-.----- ......-....-................--------------------------
Contracts -......----..-........-..-.-----------------------------------------------.....
Section 4(a)-Notice --.---.------- ..-.- ...-..-----.----......----....-----------------------------
Contents of notice ----.--..--.----------------...--.. ... -..------------------- 28
Section 4(a) and (b) applicable only to substantive rules .----.-.....----------------. 30
Omission of notice and public procedure for good cause.-- .........-------------- 30
Section 4 (b)- Procedures...................................................................................... 31
Inform al rule m aking-...............................................................
Formal rule making..............-....-..----------------------------------------............
Publication of procedures...-.-- ..--.-...-- ...-...-.--..-.---.----.-...----------------------------
Section 4 (c)-Effective Dates..--.- ..---.-.-....---.-.-...------.----.-.-------------------------------
Section 4 (d)-Petitions . -.-.-.----..-..--.------
IV-SECTION 5, ADJUDICATION. .. ...--.-----------.-.-.-.--.-.. 4-------
General Scope of Formal Procedural Requirements ----------------------------------------.
Exempted adjudications. . - . ...--..
Section 5(a)-Notice - .--...-..-- ....-.....-.---- ..--.-----------.-------------------------- --
Responsive pleading---......................................................................................
Section 5(b)- Procedure ..................................................................- ................ 47
Section 5(c)-Separation of Functions ..--...-.--------
Exceptions ...-.--.-.-..- ..- .........--
..-.----- ..---.---------.-.---.-...-..-.---.---------------------
Hearing officers .......---.---.-.-.-.-......--...-...---.-------.------------------------------- --
The agenc y. ....- ....-.-- ...-.---------.........-.-.----...-..-........---------------------------------
Section 5 (d) -Declaratory Orders....-...-----.- ........---.....-.--.-.-..--------------------------
V-SECTION 6, ANCILLARY MATTERS-----------------------------------..
Governing definitions---------------......................
Section 6(a)-Appearance...-.-...-....-.----...-..-.-.-.-..-....--.-.....-------------------------------
Formal appearance............................................................................................ 61
Informal appearance ....-..-...-.---.- ...............-......-.........----------------------------
Practice before Agencies 6...............

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 Page
Section 6(b)-Investigations --------...-........------..- -.--- ..------------------- 66
Section 6(c)- Subpenas -.-. ...---......--..--..----...-.--.. 6-----------------
Section 6(d)- Denials --.-----.-.---.---------..---.---.-.--------------------------
VI-SECTION 7, HEARINGS -.---.-...-.....-..-.---...-.--- 1----------------
Section 7(a)-Presiding Officers ---.--...----------------------- ------------------- 71
Section 7(b)-Hearing Powers ---.----. .----..----. 4----------------
Section 7 (c)- Evidence ----.-.-... -.... ----. ----. ---.-.-.... ---..---- ...-- .-.-- .....- ...-- ..-75
Burden of proof ........................ .-- ---- ....----.-------------------------------
Evidence .......................... .. ... .-.....--....--.----------------------------------
Presentation of evidence-_._. . .. ..-------.-...-----------------------------
Section 7(d)-Record...----.------.---..----- -.-----------------------------
Record......--.- ..-.-.....-...-.----------------------- ---.......----- ---------------------------
Official notice. . . . .-----...----..------.-.-.....-.-...---. 9----------------
VII- SECTION 8, DECISIONS.....-......................... ...-------- ...----- ..-- ---------------
Section 8(a)-Who Decides................ -..........---------------------------------
Appeals and review -...............----------------------.......--- --------------------- 83
Section 8(b)- Submittals and Decisions ---..-.-.-.--.-...----.-.-.-.----------------------------
Decisions .-.- ...- ........-.......-....--. --..--.---..-.---.....----.....-...--.-.-.---------------------
Appeals to superior agency..............-.-.---- ... - .-------.....------------------ ..---- _---------
VIII-SECTION 9, SANCTIONS AND POWERS --- ...-... _.- --.---..--.--------- ----------
Section 9(a)-Sanctions ...........-.... - -----.--------------------------------
Section 9(b)- Licenses ----------------.---...-------....-.-- 8------------------
Applications for licenses. ----------------------------------..------------------------------
Suspension or revocation of licenses- -.--.--.------------------- ----------------- 90
Renewal of licenses ..----.--..------.---..--------- -------------------
IX-SECTION 10, JUDICIAL REVIEW ------------------.------------------------------
Scope of Section 10...- ..........--- ...----...----.-.---------.------.-------------------------------
Section 10(a)- Right of Review ---...-.-.-.-.-.....--.---.-----------------------------------
Section 10(b)-Form and Venue of Action.------.-..----.. ------------------ .......... 96
Form of Action..----.- ...---.-.-.--
..-........-- ....----------------------------- - -------- ------- 97
Venue . ..-. . ..--..--.-.-- ..---.----.-.....-.-.-.--.-.--..- .--------------------------- - .-
Review in enforcement proceedings.......-----.-.---.-----..-...-------------------- .--------
Section 10(c)-Reviewable Acts -------.-.--...---.-.-.--..- 1-------------------
Section 10(d)- Interim Relief - .............. -.------.--.-..--.----------------------------
Section 10(e)- Scope of Review..- ..........-.......-.-..---------------------------------...........
Appendix A-Text of Administrative Procedure Act....---.-.-- ..-..----------------- . 111
Appendix B-Attorney General's letter of Oct. 19, 1945-..--.- ...--------------- 123

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 INTRODUCTION

June 11, 1946, the date on which the Administrative Procedure

Act was approved by President Truman, is notable in the history
of the governmental process. The Act sets a pattern designed to
achieve relative uniformity in the administrative machinery of
the Federal Government. It effectuates needed reforms in the
administrative process and at the same time preserves the effec-
tiveness of the laws which are enforced by the administrative
agencies of the Government. The members of the Seventy-Ninth
Congress who worked so assiduously on the McCarran-Sumners-
Walter bill showed statesmanship and wisdom in dealing with
the difficult problems thus presented.
The Department of Justice played an active role in the de-
velopment of the Administrative Procedure Act. In 1938, at a
time when there was criticism of Federal administrative agencies,
Homer Cummings, as Attorney General, suggested to the late
President Roosevelt that the Department of Justice be authorized
to conduct a full inquiry into the administrative process. In re-
sponse to this suggestion, President Roosevelt requested Attorney
General Cummings to appoint a committee to make a thorough
study of existing administrative procedures and to submit what-
ever recommendations were deemed advisable. For this purpose
the Attorney General appointed a committee of eminent lawyers,
jurists, scholars and administrators.
For a period of two years this committee, known as the At-
torney General's Committee on Administrative Procedure, de-
voted itself to the study of the administrative process. Its work
culminated in the issuance of 27 monographs on the operations of
the more important Government agencies it had investigated,
as well as in a Final Report to the President and to the Congress.
This Final Report is a landmark in the field of administrative
law. In fact, the main origins of the present Administrative
Procedure Act may be found in that Report, and in the so-called
majority and minority recommendations submitted by the Com-
mittee. These recommendations were the subject of extensive
hearings held before a subcommittee of the Senate Committee on
the Judiciary in 1941.
5

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6 ATTORNEY GENERAL'S MANUAL

There was a lull in legislative activities in the field of admin-

istrative law during the next few years by reason of the impact
of war. But when Congress in 1945 resumed consideration of
legislation in this field, the Chairmen of both the Senate and
House Committees on the Judiciary called upon this Department
for its assistance. The invitation was accepted, and the task was
assigned to the Office of the Assistant Solicitor General. For
many months the members of that Office assisted in the drafting
and revision of the bill (S. 7) which developed into the Admin-
istrative Procedure Act.
Finally, in a letter dated October 19, 1945, to the Chairmen
of both Committees on the Judiciary, I endorsed S. 7 as revised.
I concluded that "The bill appears to offer a hopeful prospect
of achieving reasonable uniformity and fairness in administrative
procedures without at the same time interfering unduly with the
efficient and economical operation of the Government." Sen. Rep.
752, 79th Cong., 1st sess., pp. 37-38. The bill then moved in
regular course through both Committees with a few minor
modifications (H.R. Rep. 1980, 79th Cong., 2nd sess., p. 57). It
was subsequently adopted by both Houses of Congress without a
dissenting vote.
After the Administrative Procedure Act was signed by Presi-
dent Truman on June 11, 1946, it became evident that a major
phase of our work had just begun. Government agencies were
calling upon us for advice on the meaning of various provisions
of the Act. We endeavored to furnish that advice promptly and
in detail to every agency which consulted us. At length I decided
that we could offer a definite service by preparing a general
analysis of the provisions of the Act in the light of our experi-
ence. This manual is the result of that effort. It does not purport
to be exhaustive. It was intended primarily as a guide to the
agencies in adjusting their procedures to the requirements of
the Act.
George T. Washington, the Assistant Solicitor General, was
assigned the tasks I have just described-both the rendition of
advice to the agencies and the preparation of the manual. He had
assisted in drafting the Act and was familiar with the adminis-
trative problems of the agencies. Two members of his staff,
Robert Ginnane and David Reich, took the major burden of the
work, under the supervision and direction of Mr. Washington and
myself. The manner in which the task has been carried out has
my full approval.

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 ADMINISTRATIVE PROCEDURE ACT 7

While the manual was intended originally for distribution only

to Government agencies, public demand for it has been so great
that I have decided to make it generally available. I trust that it
will prove helpful to those who find a need for it.
A word of explanation as to the manner in which the manual
is arranged should be helpful. It has been prepared mainly on a
section by section analysis of the Act. Each of the major sections
is treated in a separate chapter. There has been no separate
treatment of section 11, covering the appointment of examiners,
since the Civil Service Commission is entrusted with the respon-
sibilities under that section and is presently engaged in working
out the necessary requirements, assisted by an Advisory Com-
mittee of experts designated by the Commission. No chapter as
such is being devoted to either section 2 (definitions) or to section
12 (construction and effect) for the reason that by themselves they
have little meaning except in connection with the functional as-
pects of the Act. However, there is a separate chapter on two im-
portant phases of section 2, namely, the coverage of the Act and
the fundamental distinction between rule making and adjudication.
Tom C. Clark
Attorney General
August 27, 1947

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8 ATTORNEY GENERAL'S MANUAL

NOTE CONCERNING MANNER OF CITATION OF LEGISLATIVE MATERIAL

The legislative history of the Administrative Procedure Act

really begins with the Final Report of the Attorney General's
Committee on Administrative Procedure (cited hereinafter as
Final Report). This Report led to the introduction in Congress
of the so-called majority and minority bills, respectively desig-
nated as S. 675 and S. 674, 77th Cong., 1st sess. These bills,
together with S. 918, formed the basis for the extensive and
valuable hearingsheld in 1941 before a subcommittee of the Senate
Committee on the Judiciary (cited hereinafteras Senate Hearings
(1941)). In 1945,the House Committee on the Judiciary held brief
hearings (cited hereinafteras House Hearings (1945)) on various
administrativeprocedure bills, of which H.R. 1203, 79th Cong., 1st
sess., was the precursorof the present Act. Also in June 1945, the
Senate Committee on the Judiciaryissued a comparativeprint,with
comments, which is an essential part of the legislative history.
The Committee reports on the Act are Sen. Rep. 752, 79th Cong.,
1st sess. (cited hereinafter as Sen. Rep.). and H.R. Rep. 1980,
79th Cong., 2nd sess. (cited hereinafteras H.R. Rep.). In October
1945, the Attorney General, at the request of the Senate Committee
on the Judiciary,submitted a letter, with memorandum attached,
setting forth the understanding of the Department of Justice
as to the purpose and meaning of the various provisions of the
bill (S. 7). This letter and memorandum constitute Appendix B
of the Senate Committee Report and have been printed as Appen-
dix B to this manual.
There may be obtained from the Government Printing Ofice
Sen. Doc. No. 248, 79th Cong., 2nd sess., entitled "Administrative
Procedure Act-Legislative History" (cited hereinafter as Sen.
Doc.), which contains the Senate and House debates on the
Administrative Procedure Act, together with all the documents
mentioned above, except the FinalReport of the Attorney General's
Committee on Administrative Procedure and the Senate Hearings
(1941). Wherever appropriate, there will be two citations, one
to the particularreport or hearing in which the legislative mate-
rial appears,the other a parentheticalreference to the correspond-
ing page in the Senate Document.

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 ADMINISTRATIVE PROCEDURE ACT 9

I
FUNDAMENTAL CONCEPTS
a. Basic Purposes of the Administrative Procedure Act
The Administrative Procedure Act may be said to have four
basic purposes:
1. To require agencies to keep the public currently informed
of their organization, procedures and rules (sec. 3).
2. To provide for public participation in the rule making
process (sec. 4).
3. To prescribe uniform standards for the conduct of formal
rule making (sec. 4(b) and adjudicatory proceedings (sec. 5),
i.e., proceedings which are required by statute to be made on the
record after opportunity for an agency hearing (secs. 7 and 8).
4. To restate the law of judicial review (see. 10).
b. Coverage of the Administrative Procedure Act
The Administrative Procedure Act applies, with certain ex-
ceptions to be discussed, to every agency and authority of the
Government. Section 2(a) of the Act reads, in part, as follows:
"Agency" means each authority (whether or not within or subject
to review by another agency) of the Government of the United States
other than Congress, the courts, or the governments of the possessions,
Territories, or the District of Columbia. Nothing in this Act shall be
construed to repeal delegations of authority as provided by law.
It will be seen from the above that agency is defined as
each authority of the Government of the United States, whether
or not within or subject to review by another agency. This
definition was adopted in recognition of the fact that the Govern-
ment is divided not only into departments, commissions, and
offices, but that these agencies, in turn, are further subdivided into
constituent units which may have all the attributes of an agency
insofar as rule making and adjudication are concerned.' For
example, the Federal Security Agency is composed of many

1 The legislative history of section 2 (a) illustrates clearly the broad scope of tne term
"agency." In the Senate Comparative Print of June 1945, the term agency was
explained as follows (p. 2) : "It is necessary to define agency as 'authority' rather than by
name or form, because of the present system of including one agency within another or of
authorizing internal boards or 'divisions' to have final authority. 'Authority' means any
officer or board, whether within another agency or not, which by law has authority to take
final and binding action with or without appeal to some superior administrative authority.
Thus, 'divisions' of the Interstate Commerce Commission and the judicial officers
of the Department of Agriculture would be 'agencies' within this definition." (Sen.
Doe. p. 13). And in the Senate Report the following appears at page 10: "The word
'authority' is advisedly used as meaning whatever persons are vested with powers to act
(rather than the mere form of agency organization such as department, commission,
board, or bureau) because the real authorities may be some subordinate or semidependent
person or persons within such form of organization." (Sen. Doe. p. 196). See also H.R.
Rep. p. 19 (Sen. Doe. p. 263).

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10 ATTORNEY GENERAL'S MANUAL

authorities which, while subject to the overall supervision of that

agency, are generally independent in the exercise of their func-
tions. Thus, the Social Security Administration within the Federal
Security Agency is in complete charge of the Unemployment
Compensation provisions of the Social Security Act. By virtue
of the definition contained in section 2(a) of the Administrative
Procedure Act, the Social Security Administration is an agency,
as is its parent organization, the Federal Security Agency.
The Administrative Procedure Act applies to every authority
of the Government of the United States other than Congress, the
courts, the governments of the possessions, Territories, and the
District of Columbia (sec. 2(a)). The term "courts" is not limi-
ted to constitutional courts, but includes the Tax Court, the Court
of Customs and Patent Appeals, the Court of Claims, and similar
courts. Sen. Rep. p. 38 (Sen. Doc. p. 408).
While the Administrative Procedure Act covers generally all
agencies of the United States, certain agencies and certain func-
tions are specifically exempted from all the requirements of the
Act with the exception of the public information requirements
of section 3. Section 2(a) states, in part: "Except as to the
requirements of section 3, there shall be excluded from the oper-
ation of this Act (1) agencies composed of representatives of
the parties or of representatives of organizations of the parties
to the disputes determined by them, (2) courts martial and
military commissions, (3) military or naval authority exer-
cised in the field in time of war or in occupied territory, or (4)
functions which by law expire on the termination of present
hostilities, within any fixed period thereafter, or before July 1,
1947, and the functions conferred by the following statutes:
Selective Training and Service Act of 1940; Contract Settlement
Act of 1944; Surplus Property Act of 1944; Sugar Control Exten-
sion Act of 1947;2 Veterans' Emergency Housing Acts of 1946;
and the Housing and Rent Act of 1947.4"
It will be helpful to consider each of these exceptions sepa-
rately:
(1) "agencies composed of representatives of the parties or
of representatives of organizations of the parties to the disputes
determined by them." This definition is intended to embrace such
agencies as the National Railroad Adjustment Board, composed
2 This exception was added by Public Law 80, 80th Cong., 1st sess.
8 This exception was added by Public Laws 663 and 719, 79th Cong., 2d sess.
4 This exception was added by Public Law 129, 80th Cong., 1st sess.

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 ADMINISTRATIVE PROCEDURE ACT 11

of representatives of employers and employees. In addition, it

includes agencies which have a tripartite composition in that
they are composed of representatives of industry, labor and the
public, such as the Railroad Retirement Board and special fact
finding boards. H.R. Rep. p. 19 (Sen. Doc. p. 253); 92 Cong. Rec.
2152, 5649 (Sen. Doc. pp. 307, 355). The exemption, it will be seen,
is not limited to boards which convene only occasionally, with per
diem compensation, to determine, arbitrate or mediate particular
disputes, but also includes similar boards or agencies composed
wholly or partly of full-time paid officers of the Federal Govern-
ment.
(2) "courts martial and military commissions."
(3) "military or naval authority exercised in the field in time
of war or in occupied territory."
(4) "functions which by law expire on the termination of
present hostilities, within any fixed period thereafter, or before
July 1, 1947, and the functions conferred by the following statutes:
Selective Training and Service Act of 1940; Contract Settlement
Act of 1944; Surplus Property Act of 1944; Sugar Control Ex-
tension Act of 1947; Veterans' Emergency Housing Act of 1946;
and the Housing and Rent Act of 1947." The functions thus ex-
empted on the ground of their temporary nature may be classified,
as to their termination, as follows:
(a) "On the termination of present hostilities"-A con-
siderable number of statutes authorizing wartime programs and
controls limit the duration of these functions by such phrases as
"in time of war", "for the duration of the war", "upon cessation of
hostilities as proclaimed by the President", "upon the termination
of the unlimited national emergency proclaimed by the President
on May 27, 1941", etc. It is clear from the legislative history of
section 2 (a) that the exemption is not to be limited to functions
derived from statutes which provide for expiration "on the
termination of present hostilities" sic, but rather extends to all
functions which are limited as to duration by phrases such as
those quoted above. House Hearings (1945) pp. 36-37 (Sen. Doc.
pp. 82-83); 92 Cong. Rec., 5649 (Sen. Doe. p. 355). It is also
clear that this exemption for temporary war functions is in
no way affected by the circumstance that they may be con-
tinued in existence for a considerable period of time after
combat operations have ceased. It is well established that stat-
utes authorizing such temporary agencies and functions remain

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12 ATTORNEY GENERAL'S MANUAL

in effect until a formal state of peace is restored or some earlier

termination date is made effective by appropriate governmental
action. See Hamilton v. Kentucky Distilleries Co., 251 U. S. 146
(1919) ; and the Attorney General's letter to the President, dated
September 1, 1945, in H.R. Doc. 282, 79th Cong., 1st sess., p. 49.
The conclusion that the exemption is not measured by the dura-
tion of actual combat operations is confirmed by the fact that
this Act, containing the exemption, did not become law until
June 11, 1946.
(b) "Within any fixed period thereafter (after the termina-
tion of present hostilities) "-This phrase provides exemption for
functions which terminate, for example, "six months after the
termination of the unlimited national emergency proclaimed by
the President on May 27, 1941." It is unnecessary to repeat the
discussion under (a), supra, as the meaning of the phrase
"termination of present hostilities."
(c) "On or before July 1, 1947"-This encompasses such
functions as expire on or before that date.
(d) The functions conferred by the Selective Training and
Service Act of 1940, the Contract Settlement Act of 1944, the
Surplus Property Act of 1944, the Veterans' Emergency Housing
Act of 1946, the Sugar Control Extension Act of 1947 and the
Housing and Rent Act of 1947 are specifically exempted, re-
gardless of their expiration date. Thus the War Assets Adminis-
tration, insofar as its functions are derived from the Surplus
Property Act, is not subject to the provision of the Act, with the
exception of section 3.
The foregoing agencies and functions have been specifically
exempted from all the provisions of the Act with the exception of
section 3. This means, in effect, that the rule making provisions
of section 4, the adjudication provisions of section 5, and the
judicial review provisions of section 10 are not applicable to them.
These broad exceptions, accordingly, must be borne in mind
in connection with the discussion of the other sections of the Act.
Specific exceptions to various sections will be noted in the dis-
cussion of such sections.
c.-Distinction Between Rule Making and Adjudication
The Administrative Procedure Act prescribes radically dif-
ferent procedures for rule making and adjudication. Accordingly,
the proper classification of agency proceedings as rule making or
adjudication is of fundamental importance.

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 ADMINISTRATIVE PROCEDURE ACT 13

"Rule" and "rule making", and "order" and "adjudication"

are defined in section 2 as follows:
(c) Rule and rule making. "Rule" means the whole or any part of
any agency statement of general or particular applicability and future
effect designed to implement, interpret, or prescribe law or policy or to
describe the organization, procedure, or practice requirements of any
agency and includes the approval or prescription for the future of
rates, wages, corporate or financial structures or reorganizations
thereof, prices, facilities, appliances, services or allowances therefor or
of valuations, cost, or accounting, or practices bearing upon any of
the foregoing. "Rule making" means agency process for the formula-
tion, amendment, or repeal of a rule.
(d) Order and adjudication."Order" means the whole or any part
of the final disposition (whether affirmative, negative, injunctive, or
declaratory in form) of any agency in any matter other than rule
making but including licensing. "Adjudication" means agency process
for the formulation of an order.
(e) License and licensing. "License" includes the whole or part of
any agency permit, certificate, approval, registration, charter, mem-
bership, statutory exemption or other form of permission. "Licensing"
includes agency process respecting the grant, renewal, denial, revoca-
tion, suspension, annulment, withdrawal, limitation, amendment, mod-
ification, or conditioning of a license.
Since the definition of adjudication is largely a residual one,
i.e., "other than rule making but including licensing", it is logical
to determine first the scope of rule making. The definition of rule
is not limited to substantive rules, but embraces interpretative,
organizational and procedural rules as well.5 Of particular import-
ance is the fact that "rule" includes agency statements not only
of general applicability but also those of particular applicability
applying either to a class or to a single person. In either case,
they must be of future effect, implementing or prescribing future
law. Accordingly, the approval of a corporate reorganization by
the Securities and Exchange Commission, the prescription of
future rates for a single named utility by the Federal Power
Commission, and similar agency actions, although applicable only
to named persons, constitute rule making. H.R. Rep. p. 49, fn. 1
(Sen. Doc. p. 283).
As applied to the various proceedings of Federal agencies, the
definitions of "rule" and "rule making", and "order" and "ad-
judication" leave many questiors as to whether particular pro-
ceedings are rule making or adjudication. For example, the ques-
tion arises whether agency action on certain types of applications
is to be deemed rule making or licensing (adjudication), in view
of the fact that there is apparent overlapping between the defini-
6 Note that section 4 (apart from 4(d)) is applicable only to substantive rules, i.e.,
rules issued pursuant to statutory authority to implement statutory policy, as by fixing
rates or defining standards.

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14 ATTORNEY GENERAL'S MANUAL

tion of "rule" in section 2(c) and of "license" in section 2(e).

Thus, "rule" includes the "approval * * * for the future * * *", and
"license" is defined to include "any agency permit, certificate,
approval * * * or other form of permission."
An obvious principle of construction is that agency proceedings
which fall within one of the specific categories of section 2 (c), e.g.,
determining rates for the future, must be regarded as rule making,
rather than as coming under the general and residual definition
of adjudication. Furthermore, the listing of specific subjects in
section 2 (c) as rule making is not intended to be exclusive. It is
illustrative only. H.R. Rep. 20 (Sen. Doc. p. 254). Thus, in deter-
mining whether agency action on a particular type of application
is "rule making", the purposes of the statute involved and the
considerations which the agency is required to weigh in granting
or withholding its approval will be relevant; if the factors govern-
ing such approval are the same, for example, as the agency would
be required to apply in approving a recapitalization or reorganiza-
tion (clearly rule making), this circumstance would tend to support
the conclusion that agency action on such an application is rule
making.
More broadly, the entire Act is based upon a dichotomy between
rule making and adjudication. Examination of the legislative
history of the definitions and of the differences in the required
procedures for rule making and for adjudication discloses highly
practical concepts of rule making and adjudication. Rule making
is agency action which regulates the future conduct of either
groups of persons or a single person; it is essentially legislative
in nature, not only because it operates in the future but also be-
cause it is primarily concerned with policy considerations. The
object of the rule making proceeding is the implementation or
prescription of law or policy for the future, rather than the
evaluation of a respondent's past conduct. Typically, the issues
relate not to the evidentiary facts, as to which the veracity and
demeanor of witnesses would often be important, but rather to
the policy-making conclusions to be drawn from the facts. Senate
Hearings (1941) pp. 657, 1298, 1451. Conversely, adjudication
is concerned with the determination of past and present rights
and liabilities. Normally, there is involved a decision as to whether
past conduct was unlawful, so that the proceeding is characterized
by an accusatory flavor and may result in disciplinary action.
Or, it may involve the determination of a person's right to bene-

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 ADMINISTRATIVE PROCEDURE ACT 15

fits under existing law so that the issues relate to whether he is

within the established category of persons entitled to such bene-
fits. In such proceedings, the issues of fact are often sharply
controverted. Sen. Rep. p. 39 (Sen. Doc. p. 225); 92 Cong. Rec.
5648 (Sen. Doc. p. 353).
Not only were the draftsmen and proponents of the bill
aware of this realistic distinction between rule making and ad-
judication, but they shaped the entire Act around it. Even in
formal rule making proceedings subject to sections 7 and 8, the
Act leaves the hearing officer entirely free to consult with any
other member of the agency's staff. In fact, the intermediate
decision may be made by the agency itself or by a responsible
officer other than the hearing officer. This reflects the fact that
the purpose of the rule making proceeding is to determine policy.
Policy is not made in Federal agencies by individual hearing
examiners; rather it is formulated by the agency heads relying
heavily upon the the expert staffs which have been hired for that
purpose. And so the Act recognizes that in rule making the inter-
mediate decisions will be more useful to the parties in advising
them of the real issues in the case if such decisions reflect the
views of the agency heads or of their responsible officers who assist
them in determining policy. In sharp contrast is the procedure
required in cases of adjudication subject to section 5 (c). There
the hearing officer who presides at the hearing and observes the
witnesses must personally prepare the initial or recommended
decision required by section 8. Also, in such adjudicatory cases,
the agency officers who performed investigative or prosecuting
functions in that or a factually related case may not participate
in the making of decisions. These requirements reflect the charac-
teristics of adjudication discussed above.
The foregoing discussion indicates that the residual definition
of "adjudication" in section 2 (d) was intended to include such
proceedings as the following:
1. Proceedings instituted by the Federal Trade Commission
and the National Labor Relations Board leading to the
issuance of orders to cease and desist from unfair methods
of competition or unfair labor practices, respectively.
2. The determination of claims for money, such as compensa-
tion claims under the Longshoremen's and Harbor Workers'
Compensation Act, and claims under Title II (Old Age
and Survivors' Insurance) of the Social Security Act.

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3. Reparation proceedings in which the agency determines

whether a shipper or other consumer is entitled to damages
arising out of the alleged past unreasonableness of rates.
4. The determination of individual claims for benefits, such
as grants-in-aid and subsidies.
5. Licensing proceedings, including the grant, denial, renewal,
revocation, suspension, etc. of, for example, radio broad-
casting licenses, certificates of public convenience and
necessity, airman certificates, and the like.

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 ADMINISTRATIVE PROCEDURE ACT 17

II

SECTION 3-PUBLIC INFORMATION

The purpose of section 3 is to assist the public in dealing with
administrative agencies by requiring agencies to make their admin-
istrative materials available in precise and current form. Section
3 should be construed broadly in the light of this purpose so as
to make such material most useful to the public. The public
information requirements of section 3 do not supersede the
Federal Register Act (44 U.S.C. 301 et seq.). They are to be
integrated with the existing program for publication of mate-
rial in the Federal Register and the Code of Federal Regulations.
The Federal Register Regulations (11 F.R. 9833) govern the
manner in which documents are to be prepared prior to sub-
mission to the Division of the Federal Register. All materials issued
under section 3(a) of the Act will be included in the Code of
Federal Regulations and should be prepared accordingly. The
Division of the Federal Register is prepared to offer assistance
to the agencies in this respect.

AGENCIES SUBJECT TO SECTION 3

This section, unlike the other provisions of the Act, is applic-
able to all agencies of the United States, excluding Congress, the
courts, and the governments of the Territories, possessions, and
the District of Columbia. Every agency, whether or not it has
rule making or adjudicating functions, must comply with this
section. Section 2 (a), defining agencies, states specifically that
even the exemption for the functions enumerated in the last
sentence of that section does not extend to section 3. Accordingly,
agencies performing temporary war functions must comply with
this section.

EXCEPTIONS TO REQUIREMENTS OF SECTION 3

Two exceptions have been made to section 3, namely:
" (1) Any function of the United States requiring secrecy in
the public interest." This would include the confidential opera-
tions of any agency, such as the confidential operations of the
Federal Bureau of Investigation and the Secret Service and, in
general, those aspects of any agency's law enforcement pro-
cedures the disclosure of which would reduce the utility of such

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procedures. It is not restricted, however, to investigatory func-

tions. The Comptroller of the Currency, for example, may have
occasion to issue rules to national banks under such circumstances
that the public interest precludes publicity.
It should be noted that the exception is made only "to the
extent" that the function requires secrecy in the public interest.
Such a determination must be made by the agency concerned. To
the extent that the function does not require such secrecy, the
publication requirements apply. Thus, the War Department ob-
viously is not required to publish confidential matters of military
organization and operation, but it would be required to publish
the organization and procedure applicable to the ordinary civil
functions of the Corps of Engineers.
"(2) Any matter relating solely to the internal management
of an agency." This exception is in line with the spirit of the
public information requirements of section 3. If a matter is
solely the concern of the agency proper, and therefore does not
affect the members of the public to any extent, there is no require-
ment for publication under section 3. Thus, an agency's internal
personnel and budget procedures need not be published (e.g., rules
as to leaves of absence, vacation, travel, etc.). However, in case
of doubt as to whether a matter is or is not one of internal
management, it is suggested that the matter be published in the
Federal Register, assuming it does not require secrecy in the
public interest.
"Internal management of an agency" should not be construed
as intra-agency only; it includes functions of internal Federal
management, such as most of the functions of the Bureau of the
Budget, and interdepartmental committees which are established
by the President for the handling of internal management
problems.
It should be understood that the following discussion of the
requirements of section 3 is not applicable to the above italicized
functions since they are expressly exempted from the section.

EFFECTIVE DATE-PROSPECTIVE OPERATION

Section 3, which took effect on September 11, 1946, is prospec-
tive in operation. 92nd Cong. Rec. 5650 (Sen. Doc. p. 357). It
has no application to materials issued prior to that date. To the
extent that an agency's procedures and organization had been
published theretofore in the Federal Register (for example,

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 ADMINISTRATIVE PROCEDURE ACT 19

formal rules of practice), it was not necessary to republish them.

Appropriate citations were frequently made to such previously
published materials. Under section 3(a) (3), publication in the
Federal Register is required of substantive rules (and statements
of general policy and interpretations formulated and adopted by
the agency for the guidance of the public) issued on and after
September 11, 1946.
The Federal Register of September 11, 1946, Part II, appear-
ing in four sections and containing 966 pages, contains the material
prepared by Government agencies in initial compliance with
section 3.
SECTION 3 (a) -RULES

Section 3(a) directs each agency to "separately state and

currently publish in the Federal Register" its organization,
procedures and substantive rules.

SEPARATE STATEMENT
The three classes of material-organizational, procedural, and
substantive rules-must be published in the Federal Register
under separate and appropriate headings. Such separate state-
ment, however, should not be carried to so logical an extreme
as to inconvenience the public. For example, if an agency grants
public benefits, it would be proper to include in the substantive
rules relative to those benefits a statement as to the form to be
used in applying for such benefits and the place of filing; how-
ever, the same procedural information must also be set forth or
referred to in the separate statement of the agency's procedure.
This may be accomplished by inserting in the procedural state-
ment a notation to the effect that the procedure for obtaining
public benefits may be found at a designated part of the sub-
stantive rules relative to such benefits.

DESCRIPTION OF ORGANIZATION
Section 3(a) (1) requires that every agency shall separately
state and currently publish in the Federal Register "(1) descrip-
tions of its central and field organization including delegations by
the agency of final authority and the established places at which,
and methods whereby, the public may secure information or make
submittals or requests." It is only delegations of final authority

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which need be listed. In this connection, it should be noted that

there is no requirement to list in the rules the names of specific
individuals to whom power is delegated, unless such specific
designation is otherwise required by law, nor is there any
requirement that isolated instances of delegation made on an
ad hoc basis be published. Senate Hearings (1941) p. 1329. How-
ever, the agency should list by title the offices or officers to whom
definite delegations of final authority have been made (e.g.,
Claims Division of the Department of Justice, or Regional Di-
rector of the War Assets Administration). Under this subsection,
it may be advisable also for agencies to state specifically the
powers which may be exercised by persons serving in an "acting"
capacity.
An agency's central organization should be described by
listing its divisions and principal subdivisions and the functions
of each. Field organizations should be described by listing the
location of such offices, together with a statement of their
functions. For example, if certain field offices have authority to
issue interpretative or advisory opinions, this should be specified
together with a statement as to whether such opinions are sub-
ject to review or confirmation by the agency's central or other
office. In general, there should be a statement of the information
which may be obtained from, and the applications or requests
which may be filed with, the different field offices. In view of the
last sentence of section 3(a), it is important that each agency
state clearly the types of applications, etc., if any, which it re-
quires to be filed with designated agency offices.

STATEMENT OF PROCEDURES

Section 3 (a) (2) provides that every agency shall separately

state and currently publish in the Federal Register " (2) statements
of the general course and method by which its functions are
channeled and determined, including the nature and requirements
of all formal or informal procedures available as well as forms
and instructions as to the scope and contents of all papers, reports,
or examinations." This subsection is primarily concerned with
the procedures by which an agency discharges its public functions
-such as rule making, adjudication, and the administration of
loan, grant and benefit programs. No categorical statement can
be made as to the manner in which each agency should describe

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 ADMINISTRATIVE PROCEDURE ACT 21

"the general course and method by which its functions are chan-
neled and determined."
Section 3 does not require an agency to "freeze" its procedures,
nor does it force the adoption of procedures more formal than
those previously prevailing. An agency need not invent procedures
where it has no reason to establish any procedures. Senate Hearings
(1941) p. 1337. However, the agency must, in accordance with
section 3, keep the public currently informed of changes in the
actual procedures available. Of course, the published procedures
of the agency may provide (subject to applicable law) for emer-
gency or exceptional cases.
Where there is an established procedure for the handling of
certain functions, the routing of and responsibility for such func-
tions may be stated with reasonable particularity. Some functions,
however, may be exercised so seldom that it will not be practicable
to prescribe a definite routine. In such cases, the published infor-
mation should at least include a statement of the office to which
inquiries may be directed.
In brief, section 3 (a) (2) requires an agency to disclose in
general terms, designed to be realistically informative to the
public, the manner in which its functions are channeled and de-
termined. In this connection, it should be remembered that matters
of internal management are exempted from the publication re-
quirements of section 3.
Informal conference procedures used by an agency should be
publicized with a view to both serving the convenience of the
public and facilitating the agency's operations. Such procedures
exist widely and are known to the specialized practitioners. The
general public should be informed of their availability and as
to how and where to take advantage of them.
Forms for application, registration, etc., and the instructions
accompanying such forms need not be published in full; publica-
tion of a simple statement of the function and contents of the
form, and of where copies of the form, if available, may be ob-
tained, is sufficient. H.R. Rep. p. 22 (Sen. Doc. p. 256).
Attention is called to the last sentence of the section, stating
"No person shall in any manner be required to resort to organiza-
ion or procedure not so published." Should an agency fail to
publish, for example, a listing of its field offices with their func-
tions, persons who have not received actual notice of such agency

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organization may contend that they are not bound to resort to a

field office prior to institution of their case in the central office.

SUBSTANTIVE RULES

Section 3 (a) (3) provides that every agency shall separately

state and currently publish in the Federal Register " (3) substan-
tive rules adopted as authorized by law and statements of general
policy or interpretations formulated and adopted by the agency
for the guidance of the public, but not rules addressed to and
served upon named persons in accordance with law." This exemp-
tion for "rules addressed to and served upon named persons in
accordance with law" is designed to avoid filling the Federal Reg-
ister with a great mass of particularized rule making, such as
schedules of rates, which have always been satisfactorily handled
without general publication in the Federal Register.
The phrase "substantive rules adopted as authorized by law"
refers, of course, to rules issued by an agency to implement statu-
tory policy. Examples are the Federal Power Commission's rules
prescribing uniform systems of accounts and proxy rules issued
by the Securities and Exchange Commission.
Statements of general policy and interpretations need be pub-
lished only if they are formulated and adopted by the agency for
the guidance of the public. The Act leaves each agency free to
determine for itself the desirability of formulating policy state-
ments for the guidance of the public. To the extent that an agency,
however, enunciates such statements of general policy in the form
of speeches, releases or otherwise, the Act requires them to be
published in the Federal Register.
The term "public" would not seem to embrace states. For
example, the Federal Security Agency sends interpretative guides
to states to assist them in complying with the requirements of
the Unemployment Compensation provisions of the Social Se-
curity laws. Such guides need not be published since they are not
for the use of the "public" but only for the state governments.
Section 3 (a) does not require publication in the Federal Reg-
ister of statements of agency policy and interpretations which
are developed and enunciated only in the course of adjudicatory
orders and opinions; such orders and opinions are treated as a
separate and distinct body of administrative materials under
section 3(b).
An advisory interpretation relating to a specific set of facts

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 ADMINISTRATIVE PROCEDURE ACT 23

is not subject to section 3. 92 Cong. Rec. 5649 (Sen. Doc.

p. 355). For example, a reply from the agency's general
counsel to an inquiry from a member of the public as to the appli-
cability of a statute to a specific set of facts need not be published.

SECTION 3(b)-OPINIONS AND ORDERS

Section 3 (b) provides that "Every agency shall publish or,

in accordance with published rule, make available to public in-
spection all final opinions or orders in the adjudication of cases
(except those required for good cause to be held confidential
and not cited as precedents) and all rules." Section 3(b) does
not require publication of these materials in the Federal Register
or in any other prescribed form. Regular publication of decisions
in bound volumes or bulletins, as many agencies are now doing,
will suffice; in such cases, however, the agency should publish
a rule stating where copies of such orders and opinions may
be obtained or inspected during the interval prior to publica-
tion. It should be noted that the materials specified by section
3 (b) need not be published at all if, in accordance with the
agency's rule published in the Federal Register pursuant to
section 3 (a) (1), they are available for public inspection. It is
suggested that to the extent section 3 (b) is complied with by
making materials available for inspection, such inspection be
made possible, where practicable, in regional offices as well as
in the agency's central office.
The scope of the phrase "opinions or orders in the adjudication
of cases" is governed by section 2 (d) and, accordingly, includes
orders or opinions issued with respect to licenses. Adjudicatory
orders and opinions which are not "final" need not be published
or made available for inspection. However, where intermediate
orders and opinions would be useful to the public as, say, pro-
cedural precedents, agencies may wish to publish them or make
them available for inspection in the same manner as final orders
and opinions.
An agency may withhold from publication or inspection final
orders and opinions "required for good cause to be held confiden-
tial and not cited as precedents." If it is desired, however, to
rely upon the citation of confidential materials, the agency should
first make available some abstract of the confidential material in
such form as will show the principles relied upon without re-
vealing the confidential facts.

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The last three words of section 3(b) "and all rules" include
"rules addressed to and served upon named persons in accordance
with law" which are excluded from the publication requirement of
section 3(a) (3). See H.R. Rep. p. 50, fn. 7 (Sen. Doc. p. 284).
Thus rules involving corporate mergers and reorganizations
where all the parties are served need not be published in the
Federal Register pursuant to section 3 (a) ; instead the provisions
of section 3 (b) apply. It is sufficient, therefore, if such rules
are made available for public inspection.
SECTION 3(c)-PUBLIC RECORDS
Section 3 (c) provides that "Save as otherwise required by
statute, matters of official record shall in accordance with published
rule be made available to persons properly and directly concerned
except information held confidential for good cause found." The
introductory saving clause is intended to preserve existing statu-
tory requirements for confidential treatment of certain materials,
such as income tax returns.
Each agency should publish in the Federal Register, under 3
(a) (1), a rule listing the types of official records in its files, class-
ifying them in terms of whether or not they are confidential in
character, stating the manner in which information is available
(as by inspection or sale of photostatic copies), the method of
applying for information, and by what officials the application
will be determined.
The term "official record" is difficult of definition. In general,
it may be stated that matters of official record will include (a)
applications, registrations, petitions, reports and returns filed by
members of the public with the agency pursuant to statute or
the agency's rules, and (b) all documents embodying agency ac-
tions, such as orders, rules and licenses. In formal proceedings,
the pleadings, transcripts of testimony, exhibits, and all documents
received in evidence or made a part of the record are "matters of
official record."
Section 3 (c) does not purport to define "official record."
Each agency must examine its functions and the substantive
statutes under which it operates to determine which of its materi-
als are to be treated as matters of official record for the purposes
of the section. Indicative of the types of records which are con-
sidered official records by Congress are maps, plats, or diagrams
in the custody of the Secretary of the Interior (5 U. S. C. 488),

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records, books or papers in the General Land Office (28 U. S. C.

672), and registration statements filed with the Securities and
Exchange Commission under the Securities Act (15 U. S. C. 77f).
The great mass of material relating to the internal operation
of an agency is not a matter of official record. For example, intra-
agency memoranda and reports prepared by agency employees
for use within the agency are not official records since they merely
reflect the research and analysis preliminary to official agency
action. Intra-agency reports of investigations are, in general, not
matters of official record; in addition, they usually involve mat-
ters of internal management and, in view of their nature, must
commonly be kept confidential.
But even matters of official record need be divulged only to
"persons properly and directly concerned." It is clear that section
3 (c) is not intended to open up Government files for general in-
spection. The phrase "persons properly and directly concerned"
is descriptive of individuals who have a legitimate and valid
reason for seeking access to an agency's records. See United
States ex rel. Stowell v. Deming, 19 F. 2d, 697 (App. D.C., 1927),
certiorari denied, 275 U.S. 531. Each agency is the primary judge
of whether the person's interest is such as to require it to make
its official records available for his inspection.
An agency may treat matters of official record as "confiden-
tial for good cause found" and upon that ground refuse to make
them available for inspection. Information held "confidential for
good cause found" may be either information held confidential by
reason of an agency rule issued in advance (for good cause)
making specific classes of material confidential, or such informa-
tion as is held confidential for good cause found under a particular
set of facts. The section does not change existing law as to those
materials in Government files which have been heretofore treated
as confidential. See Boske v. Comingore, 177 U.S. 459 (1900) ;
Boehm v. United States, 123 F. 2d, 791, 805 (C.C.A. 8, 1941).

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III
SECTION 4-RULE MAKING
In general, the purpose of section 4 is to guarantee to the pub-
lic an opportunity to participate in the rule making process. With
stated exceptions, each agency will be required under this section
to give public notice of substantive rules which it proposes to
adopt, and to grant interested persons an opportunity to present
their views to it. Where rules are required by statute to be made
on the record after opportunity for an agency hearing, the pro-
visions of sections 7 and 8 as to hearing and decision will apply
in place of the less formal procedures contemplated by section
4(b). With certain exceptions, no substantive rule may be made
effective until at least thirty days after its publication in the
Federal Register. Section 4 also grants to interested persons the
right to petition an agency for the issuance, amendment or repeal
of a rule.

EXCEPTIONS

In addition to the agencies and functions exempted by section

2(a), section 4 itself contains two broad exceptions to its re-
quirements.
" (1) any military, naval, or foreign affairs function of the
United States". The exemption for military and naval functions
is not limited to activities of the War and Navy Departments but
covers all military and naval functions exercised by any agency.
Thus, the exemption applies to the defense functions of the Coast
Guard and to the function of the Federal Power Commission
under section 202 (c) of the Federal Power Act (16 U.S.C. 824a
(c)). Sen. Rep. p. 39 (Sen. Doc. p. 225); Senate Hearings
(1941) p. 502.
As to the meaning of "foreign affairs function", both the
Senate and House reports state: "The phrase 'foreign affairs
functions,' used here and in some other provisions of the bill,
is not to be loosely interpreted to mean any function extending be-
yond the borders of the United States but only those 'affairs' which
so affect relations with other governments that, for example,
public rule making provisions would clearly provoke definitely
undesirable international consequences." Sen. Rep. p. 13; H.R.
Rep. p. 23 (Sen. Doc. pp. 199, 257). See also Representative
Walter's statement to the House, 92 Cong. Rec. 5650 (Sen.

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 ADMINISTRATIVE PROCEDURE ACT 27

Doc. p. 358). It is equally clear that the exemption is not

limited to strictly diplomatic functions, because the phrase
"diplomatic function" was employed in the January 6, 1945 draft
of S. 7 (Senate Comparative Print of June 1945, p. 6; Sen. Doc.
p. 157) and was discarded in favor of the broader and more
generic phrase "foreign affairs function". In the light of this
legislative history, it would seem clear that the exception must be
construed as applicable to most functions of the State Depart-
ment and to the foreign affairs functions of any other agency.
" (2) any matter relating to agency management or personnel
or to public property, loans, grants, benefits, or contracts". The
exemption for matters relating to "agency management or per-
sonnel" is self-explanatory and has been considered in the dis-
cussion of "internal management" under section 3. The exemption
of "any matter relating * * * to public property, loans, grants,
benefits, or contracts" is intended generally to cover the "pro-
prietary" functions of the Federal Government. 92 Cong. Rec.
5650 (Sen. Doc. p. 358). It will be helpful to consider the
implication of each of these phrases separately.
Public Property. This embraces rules issued by any agency
with respect to real or personal property owned by the United
States or by any agency of the United States. Thus, the making of
rules relating to the public domain, i.e., the sale or lease of
public lands or of mineral, timber or grazing rights in such lands,
is exempt from the requirements of section 4. The exemption
extends, for example, to rules issued by the Tennessee Valley
Authority in relation to the management of its properties, and
by the Maritime Commission with respect to ships owned by the
United States. The term "public property" includes property
held by the United States in trust or as guardian; e.g., Indian
property. H.R. Rep. p. 23 (Sen. Doc. p. 257).
Loans. This exempts rules issued with respect to loans by such
agencies as the Reconstruction Finance Corporation, the Com-
modity Credit Corporation, and the Farm Credit Administration.
It also exempts rules relating to guarantees of loans, such as are
made by the Federal Housing Authority and the Veterans Admin-
istration, since they are matters relating to public loans.
Grants. Rule making with respect to subsidy programs is ex-
empted from section 4. "Grants" also include grant-in-aid pro-
grams under which the Federal Government makes payments to
state and local governments with respect to highways, airports,

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unemployment compensation, etc.

Benefits. This refers to such programs as veterans' pensions
and old-age insurance payments.
Contracts. All rules relating to public contracts are exempt
from section 4. The exemption extends to wage determinations
made by the Labor Department under the Davis Bacon Act (40
U.S.C. 276a et seq.) and the Walsh Healey Act (41 U.S.C.
35-45), as conditions to construction and procurement contracts
entered into by the Federal Government. See Perkins v. Lukens
Steel Co., 310 U. S. 113 (1940).

SECTION 4 (a) -NOTICE

Subsections (a) and (b) of section 4 must be read together
because the procedural requirements of subsection (b) apply only
where notice is required by subsection (a). It is clear that the
requirements of "general notice of proposed rule making" apply
only to rule making proposed or initiated by an agency; the filing
of a petition under section 4 (d) does not require an agency to
undertake rule making proceedings in accordance with subsections
(a) and (b). H.R. Rep. p. 26 (Sen. Doc. p. 260).
An agency contemplating the issuance of a rule subject to
section 4 (a) must publish in the Federal Register a notice of the
proposed rule making, "unless all persons subject thereto are
named and either personally served or otherwise have actual
notice thereof in accordance with law". The reason for the quoted
exception is to avoid burdening the Federal Register with notices
addressed to particular parties who have been personally served
or otherwise have notice. H.R. Rep. p. 51, fn. 8 (Sen. Doc.
p. 285). For example, where a proceeding is commenced to estab-
lish rates for named carriers or utilities, if a notice complying
with section 4(a) is personally served upon such persons, pub-
lication in the Federal Register is not required by the subsection.
Contents of notice. In both formal' and informal rule making,
the required notice, whether published in the Federal Register or
personally served, must include the following information:
1. "A statement of the time, place, and nature of public rule
making proceedings". While section 4(a) does not specify how
much notice must be given by an agency before it may conduct
public rule making proceedings, it is presumed that each agency
1 As used here, "formal" rule making means those public rule making proceedings
which must be conducted in accordance with sections 7 and 8.

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will give reasonable notice.2 In this connection, each agency

should take into account the fact that section 4(c) provides
that thirty days must ordinarily elapse prior to a rule becoming
effective. Accordingly, each agency should schedule its rule
making in such fashion that there will be sufficient time for
affording interested persons an opportunity to participate in the
rule making as well as for insuring final publication of the rule
at least thirty days prior to the desired effective date.
The nature of public rule making may vary considerably
from case to case. Under section 4 (b) each agency, as this memo-
randum will indicate infra, may conduct its rule making by
affording interested persons opportunity to submit written data
only, or by receiving a combination of written and oral evidence,
or by adopting any other method it finds most appropriate for
public participation in the rule making process. However, where
an agency is required by statute to conduct a hearing and to
reach a decision upon the basis of the record made at such hear-
ing, the formal procedures prescribed by sections 7 and 8 must
be pursued. Therefore, the notice, required by section 4 (a) should
specify the procedure to be employed, that is, formal or informal
hearings, submission of written statements with or without
opportunity for oral argument, etc.
2. "Reference to the authority under which the rule is pro-
posed". The reference must be sufficiently precise to apprise
interested persons of the agency's legal authority to issue the
proposed rule.
3. "Either the terms or substance of the proposed rule or a
description of the subjects and issues involved". Where able to
do so, an agency may state the proposed rule itself or the sub-
stance of the rule in the notice required by section 4(a). On the
other hand, the agency, if it desires, may issue a more general
"description of the subjects and issues involved". It is suggested
that each agency consider the desirability of using the latter
method if publication of a proposed rule in full would unduly
burden the Federal Register or would in fact be less informative
to the public. In such a case, the agency may inform interested
persons that copies of the proposed rule may be obtained from
the agency upon request-this, of course, in addition to the
"description of the subjects and issues involved" in the Federal
Register. Where there is a "description of the subjects and issues
2 See section 8 of the Federal Register Act (44 U.S.C. 308) for . general statutory
standard of reasonable notice.

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involved", the notice should be sufficiently informative to assure

interested persons an opportunity to participate intelligently in
the rule making process. Final Report, p. 108.
Section 4(a) and (b) applicable only to substantive rules.
The last sentence of section 4(a) exempts from the requirements
of section 4 (a) and (b), unless otherwise required by statute,
"interpretative rules, general statements of policy, rules of agency
organization, procedure, or practice". Thus, the rules of organi-
zation and procedure which an agency must publish pursuant
to section 3(a) (1) and (2) are not ordinarily subject to the re-
quirements of section 4(a) and (b). The further exemption of
"interpretative rules" and "general statements of policy" restricts
the application of section 4 (a) and (b) to substantive rules
issued pursuant to statutory authority. See Senate Comparative
Print of June 1945, p. 6 (Sen. Doc. p. 19).
Omission of notice and public procedure for good cause. The
last sentence of section 4 (a) authorizes any agency to omit the
notice required by that subsection (and the procedure specified by
section 4 (b)) "in any situation in which the agency for good
cause finds . . . that notice and public procedure thereon are im-
practicable, unnecessary, or contrary to the public interest". It
should be noted that the reasons for which an agency may dis-
pense with notice under section 4 (a) are written in the alterna-
tive so that if it is "impracticable" or "unnecessary" or "contrary
to the public interest" the agency may dispense with notice. Should
this be done, the agency must incorporate in the rule issued its
finding of "good cause" and "a brief statement of the reasons
therefor". In general, it may be said that a situation is "imprac-
ticable" when an agency finds that due and timely execution of
its functions would be impeded by the notice otherwise required
in section 4 (a). For example, the Civil Aeronautics Board may
learn, from an accident investigation, that certain rules as to air
safety should be issued or amended without delay; with the safety
of the traveling public at stake, the Board could find that notice

3 In this connection, the following working definitions are offered:

Substantive rules-rules, other than organizational or procedural under section 8(a) (1) and
(2), issued by an agency pursuant to statutory authority and which implement the statute, as,
for example, the proxy rules issued by the Securities and Exchange Commisson pursuant to
section 14 of the Securities Exchange Act of 1934 (15 U.S.C. 78 n). Such rules have the force
and effect of law.
Interpretative rules-rules or statements issued by an agency to advise the public of the agency's
construction of the statutes and rules which it administers. See Final Report, p. 27; Senate
Comparative Print of June 1945, p. 6 (Sen. Doc. p. 18) ; Senate Hearings (1941) p. 330.
General statements of policy-statements issued by an agency to advise the public prospectively
of the manner in which the agency proposes to exercise a discretionary power.

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 ADMINISTRATIVE PROCEDURE ACT 31

and public rule making procedures would be "impracticable",

and iFsue its rules immediately. "Unnecessary" refers to the
issuance of a minor rule or amendment in which the public is not
particularly interested. Senate Hearings (1941) p. 828. "Public
interest" connotes a situation in which the interest of the public
would be defeated by any requirement of advance notice. For
example, an agency may contemplate the issuance of financial
controls under such circumstances that advance notice of such
rules would tend to defeat their purpose; in such circumstances,
the "public interest" might well justify the omission of notice
and public rule making proceedings. Senate Hearings (1941) p. 812.

SECTION 4 (b) -PROCEDURES

Informal rule making. In every case of proposed informal
rule making subject to the notice requirements of section 4 (a),
section 4 (b) provides that "the agency shall afford interested
persons an opportunity to participate in the rule making through
2ubmission of written data, views, or arguments with or without
opportunity to present the same orally in any manner." The
quoted language confers discretion upon the agency, except where
tatutes require "formal" rule making subject to sections 7 and 8,
to designate in each case the procedure for public participation in
rule making. Such informal rule making procedure may take a
variety of forms: informal hearings (with or without a steno-
graphic transcript), conferences, consultation with industry com-
mittees, submission of written views, or any combination of these.
These informal procedures have already been extensively employed
by Federal agencies. Final Report, pp. 103-105. In each case, the
selection of the procedure to be followed will depend largely upon
the nature of the rules involved. The objective should be to assure
informed administrative action and adequate protection to private
interests.
Each agency is affirmatively required to consider "all relevant
matter presented" in the proceeding; it is recommended that all
rules issued after such informal proceedings be accompanied by an
express recital that such material has been considered. It is entirely
clear, however, that section 4 (b) does not require the formulation
of rules upon the exclusive basis of any "record" made in informal
rule making proceedings. Senate Hearings (1941) p. 444. Ac-
cordingly, except in formal rule making governed by sections 7
and 8, an agency is free to formulate rules upon the basis of

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materials in its files and the knowledge and experience of the

agency, in addition to the materials adduced in public rule
making proceedings.
Section 4 (b) provides that upon the completion of public
rule making proceedings "after consideration of all relevant matter
presented, the agency shall incorporate in any rules adopted a
concise general statement of their basis and purpose". The re-
quired statement will be important in that the courts and the
public may be expected to use such statements in the interpreta-
tion of the agency's rules. The statement is to be "concise" and
"general". Except as required by statutes providing for "formal"
rule making procedure, findings of fact and conclusions of law
are not necessary. Nor is there required an elaborate analysis
of the rules or of the considerations upon which the rules were
issued. Rather, the statement is intended to advise the public of
the general basis and purpose of the rules.
Formal rule making. Section 4 (b) provides that "Where rules
are required by statute to be made on the record after opportunity
for an agency hearing, the requirements of sections 7 and 8 shall
apply in place of the provisions of this subsection." Thus, where
a rule is required by some other statute to be issued on the basis of
a record after opportunity for an agency hearing, the public rule
making proceedings must consist of hearing and decision in ac-
cordance with sections 7 and 8. The provisions of section 5 are
in no way applicable to rule making. It should be noted that sec-
tions 7 and 8 did not become effective until December 11, 1946,
and, pursuant to section 12, do not apply to any public rule making
proceedings initiated prior to that date.
Statutes rarely require hearings prior to the issuance of rules
of general applicability. Such requirements, where they exist,
appear in radically different contexts. The Federal Food, Drug
and Cosmetic Act (21 U.S.C. 301) is almost unique in that it speci-
fically provides that agency action issuing, amending or repealing
specified classes of substantive rules may be taken only after notice
and hearing, and that "The Administrator shall base his order
only on substantial evidence of record at the hearing and shall set
forth as part of the order detailed findings of fact on which the
order is based." Upon review in a circuit court of appeals, a tran-
script of the record is filed, and "the findings of the Administra-
tor as to the facts, if supported by substantial evidence, shall be
conclusive" (21 U.S.C. 371). It is clear that such rules are
"required by statute to be made on the record after opportunity

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 ADMINISTRATIVE PROCEDURE ACT 33

for an agency hearing". Accordingly, the rule making hearings

required by the Federal Food, Drug and Cosmetic Act, initiated
on and after December 11, 1946, must be conducted in accordance
with sections 7 and 8 of the Administrative Procedure Act.
Statutes authorizing agencies to prescribe future rates (i.e.,
rules of either general or particular applicability) for public
utilities and common carriers typically require that such rates
be established only after an opportunity for a hearing before
the agency. Such statutes rarely specify in terms that the agency
action must be taken on the basis of the "record" developed in
the hearing. However, where rates or prices are established by
an agency after a hearing required by statute, the agencies
themselves and the courts have long assumed that the agency's
action must be based upon the evidence adduced at the hearing.
Sometimes the requirement of decision on the record is readily
inferred from other statutory provisions defining judicial re-
view. For example, rate orders issued by the Federal Power
Commission pursuant to the Natural Gas Act (15 U.S.C. 717)
may be made only after hearing; upon review in a circuit court
of appeals or the Court of Appeals for the District of Columbia,
the Commission certifies and files with the court "a transcript of
the record upon which the order complained of was entered",
and the Commission's findings of fact "if supported by sub-
stantial evidence, shall be conclusive". It seems clear that these
provisions of the Natural Gas Act must be construed as re-
quiring the Commission to determine rates "on the record after
opportunity for an agency hearing". See H.R. Rep. p. 51, fn. 9
(Sen. Doc. p. 285). The same conclusion would be reached
with respect to the determination of minimum wages under the
Fair Labor Standards Act (29 U.S.C. 201), which contains sub-
stantially the same provisions for hearing and judicial review.
The Interstate Commerce Commission and the Secretary
of Agriculture may, after hearing, prescribe rates for carriers
and stockyard agencies, respectively. Both types of rate orders
are reviewable under the Urgent Deficiencies Act of 1913 (28
U.S.C. 47). Nothing in the Interstate Commerce Act, the Packers
and Stockyards Act, or the Urgent Deficiencies Act requires in
terms that such rate orders be "made on the record", or provides
for the filing of a transcript of the administrative record with
the reviewing court, or defines the scope of judicial review.
However, both of these agencies and the courts have long assumed

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that such rate orders must be based upon the record made in the
hearing; furthermore, it has long been the practice under the Urgent
Deficiencies Act to review such orders on the basis of the ad-
ministrative record which is submitted to the reviewing court.
United States v. Abilene & Southern Ry. Co., 265 U.S. 274 (1924);
Mtssissippi Valley Barge Line Co. v. United States, 292 U.S. 282
(1934) ; Acker v. United States, 298 U.S. 426 (1936). It appears,
therefore, that rules (as defined in section 2 (c)) which are issued
after a hearing required by statute, and which are reviewable
under the Urgent Deficiencies Act on the basis of the evidence
adduced at the agency hearing, must be regarded as "required
by statute to be made on the record after opportunity for an
agency hearing".
With respect to the types of rule making discussed above,
the statutes not only specifically require the agencies to hold
hearings but also, specifically, or by clear implication, or by estab-
lished administrative and judicial construction, require such rules
to be formulated upon the basis of the evidentiary record made
in the hearing. In these situations, the public rule making pro-
cedures required by section 4 (b) will consist of a hearing con-
ducted in accordance with sections 7 and 8.
There are other statutes which require agencies to hold
hearings before issuing rules, but contain no language from
which the further requirement of decision "on the record" can
be inferred, nor any provision for judicial review on the record
(as does the Natural Gas Act, supra). For example, the Federal
Seed Act (7 U.S.C. 1561) simply provides that "prior to the
promulgation of any rule or regulation under this chapter, due
notice shall be given by publication in the Federal Register of
intention to promulgate and the time and place of a public
hearing to be held with reference thereto, and no rule or regu-
lation may be promulgated until after such hearing". See also
the so-called Dangerous Cargoes Act (46 U.S.C. 170(9)) and
the Tanker Act (46 U.S.C. 391a(3)) discussed in Senate Hearings
(1941) p. 589. In this type of statute, there is no requirement,
express or implied, that rules be formulated "on the record".
There is persuasive legislative history to the effect that the
Congress did not intend sections 7 and 8 to apply to rule making
where the substantive statute merely required a hearing. In 1941,
a subcommittee of the Senate Committee on the Judiciary held
hearings on S. 674 (77th Cong., 1st sess.) and other adminis-
trative procedure bills. Section 209 (d) of S. 674 provided with

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 ADMINISTRATIVE PROCEDURE ACT 35
respect to rule making that "where legislation specifically requires
the holding of hearings prior to the making of rules, formal rule-
making hearings shall be held". Mr. Ashley Sellers, testifying
on behalf of the Department of Agriculture, called the subcom-
mittee's attention to the fact that in various statutes, such as
the Federal Seed Act, in which the Congress had required hear-
ings to be held prior to the issuance of rules, the obvious purpose
"was simply to require that the persons interested in the proposed
rule should be permitted to express their views". Mr. Sellers
drew a sharp distinction between such hearing requirements and
the formal rule making requirements of the Federal Food, Drug
and Cosmetic Act. Senate Hearings (1941) pp. 78-81, 1515, 1520.4
Since this situation was thus specifically called to the subcom-
mittee's attention, it is a legitimate inference that with respect
to rule making the present dual requirement, i.e., "after oppor-
tunity for an agency hearing" and "on the record", was intended
to avoid the application of formal procedural requirements in
cases where the Congress intended only to provide an opportunity
for the expression of views. See Mr. Carl McFarland's statement in
Senate Hearings (1941) pp. 1343, 1386. See also Pacific States
Box & Basket Co. v. White, 296 U.S. 176, 186 (1935).
Publicationof procedures. Each agency which will be affected
by section 4 should publish under section 3(a) (2) the procedures,
formal and informal, pursuant to which the public may partici-
pate in the formulation of its rules. The statement of informal
rule making procedures may be couched in either specific or gen-
eral terms, depending on whether the agency has adopted a fixed
procedure for all its rule making or varies it according to the
type of rule to be promulgated. In the latter instance, it would
be sufficient to state that proposed substantive rules will be adopted
after allowing the public to participate in the rule making process
either through submission of written data, oral testimony, etc.,
the method of participation in each case to be specified in the
published notice in the Federal Register. H.R. Rep. p. 25 (Sen.
Doc. p. 259).

SECTION 4(C) -EFFECTIVE DATES

Section 4 (c) provides that "The required publication or

service of any substantive rule (other than one granting or recog-
4 See, also, the statement of Acting Attorney General Biddle citing examples of
"statutes which require hearings as a part of the rule making procedure without imposing
a requirement of formal adversary judicial methods"- Senate Hearings (1941) p. 1468.

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nizing exemption or relieving restriction or interpretative rules

and statements of policy) shall be made not less than thirty days
prior to the effective date thereof except as otherwise provided
by the agency upon good cause found and published with the
rule." This requirement applies regardless of whether the rules
are issued after formal or informal procedure.
The discussion on section 4(c) in the reports of both the
Senate and House Committees on the Judiciary makes clear that
the phrase "The required publication or service of any substan-
tive rule" does not relate back or refer to the publication of
"general notice of proposed rule making" required by section
4(a); rather it is a requirement that substantive rules which
must be published in the Federal Register (see section 3 (a) (3) )
shall be so published at least thirty days prior to their effective
date. Similarly, "rules addressed to and served upon named per-
sons", when they are substantive in nature, are subject to section
4(c). The purpose of the time lag required by section 4(c) is to
"afford persons affected a reasonable time to prepare for the
effective date of a rule or rules or to take any other action which
the issuance of rules may prompt". Sen. Rep. p. 15; H.R. Rep.
p. 25 (Sen. Doc. pp. 201, 259).
It is possible that section 4 (c) will be interpreted as amending
the Federal Register Act so as to require, with respect to rules
subject to section 4 (c), actual publication in the Federal Register
(or service) at least thirty days prior to their effective date,
rather than the mere filing of such rules with the Division of the
Federal Register as heretofore. In any event, section 4 (c) applies
only to such substantive rules as are not excepted from all the
provisions of section 4 by its introductory clause or by section 2 (a)
of the Act. It is clear, for example, that the effective date of rules
issued within the scope of the functions exempted from all of the
requirements of section 4 by the introductory clause of that section,
will continue to be governed by section 7 of the Federal Register
Act (44 U.S.C. 307), rather than by section 4(c) of the Admin-
istrative Procedure Act. Thus, where an agency issues rules
relating to public property, such rules may be made effective
upon filing with the Division of the Federal Register.
Also, section 7 of the Federal Register Act is not superseded
in so far as there are involved rules granting or recognizing
exemption or relieving restriction or interpretative rules and
statements of policy. Thus, there still may be made effective upon
filing with the Division of the Federal Register statements of policy

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and interpretative rules. Likewise excepted from the thirty-day

requirement of section 4 (c) are rules "granting or recognizing
exemption or relieving restriction". For example, if a statute
prohibits the doing of an act without prior agency approval and
such approval falls within the definition of "rule" in sectiori 2 (c),
the action of the agency in approving such act, i.e., removing
the restriction or providing an exemption, may be made effective
without regard to the thirty-day requirement. Senate Hearings
(1941) p. 1296. Also, the relaxation of a restrictive rule by an
amendment, or the repeal of such a rule, would seem to be within the
scope of the exception. The reason for this exception would appear
to be that the persons affected by such rules are benefited by
them and therefore need no time to conform their conduct so as to
avoid the legal conseqences of violation. The fact that an interested
person may object to such issuance, amendment, or repeal of a
rule does not change the character of the rule as being one "grant-
ing or recognizing exemption or relieving restriction", thereby
exempting it from the thirty-day requirement.
The requirement of publication not less than thirty days
prior to the effective date may be shortened by an agency "upon
good cause found and published with the rule". This discretion-
ary exception was provided primarily to take care of the cases in
which the public interest requires the agency to act immediately or
within a period less than thirty days. Senate Hearings (1941) pp.
70, 441, 588, 650, 812, 1506. Where the persons concerned request
that a rule be made effective within a shorter period, this circum-
stance would ordinarily constitute good cause. Also, it is clear
from the legislative history that for good cause an agency may
put a substantive rule into effect immediately; in such event,
the requirement of prior publication is altogether absent, and
the rule will become effective upon issuance as to persons with
actual notice, and as to others upon filing with the Division of
the Federal Register in accordance with section 7 of the Federal
Register Act. Senate Hearings (1941) pp. 594, 599, 1340, 1455.
Nothing in the Act precludes the issuance of retroactive rules
when otherwise legal and accompanied by the finding required by
section 4 (c). H.R. Rep. p. 49, fn. 1 (Sen. Doc. p. 283).
Where an agency, pursuant to the last clause of section 4 (a),
omits the procedures of section 4 (a) and (b) because "notice
and public procedure thereon are impracticable, unnecessary or
contrary to the public interest", subsection (c) does not thereby

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become automatically inoperative. If the situation is such as to

compel the agency, in addition, to dispense with the thirty-day
provision, the rule should also contain the finding required by
the last clause of section 4 (c).
Section 4 (c) is not intended to repeal provisions of other
statutes which require a period of longer than thirty days between
the issuance and effective date of certain rules. For example, the
Cotton Standards Act authorizes the Secretary of Agriculture
to set cotton classification standards which may not become
effective in less than one year (7 U. S. C. 56). The thirty-day
period prescribed by section 4(c) of the Administrative Pro-
cedure Act does not supersede the one-year period thus required
by the Cotton Standards Act.

SECTION 4 (d) -PETITIONS

Section 4(d) provides that "Every agency shall accord any
interested person the right to petition for the issuance, amend-
ment, or repeal of a rule." Section 4(d) applies not only to
substantive rules but also to interpretations and statements of
general policy, and to organizational and procedural rules. It is
applicable both to existing rules and to proposed or tentative
rules.
The right to petition under section 4 (d) must be accorded to
any "interested person". It will be proper for an agency to limit
this right to persons whose interests are or will be affected by the
issuance, amendment or repeal of a rule.
Every agency with rule making powers subject to section 4
should establish, and publish under section 3(a) (2), procedural
rules governing the receipt, consideration and disposition of
petitions filed pursuant to section 4(d). These procedural rules
may call, for example, for a statement of the rule making action
which the petitioner seeks, together with any data available in
support of his petition, a declaration of the petitioner's interest
in the proposed action, and compliance with reasonable formal
requirements.
If the agency is inclined to grant the petition, the nature of
the proposed rule would determine whether public rule making
proceedings under section 4(a) and (b) are required. However,
the mere filing of a petition does not require the agency to grant
it or to hold a hearing or to engage in any other public rule
making proceedings. For example, under section 701(e) of the

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 ADMINISTRATIVE PROCEDURE ACT 39
Federal Food, Drug and Cosmetic Act (21 U.S.C. 371 (e)), the
Federal Security Administrator must provide a hearing on a
proposed rule only where an application, stating reasonable
grounds, is made by an interested industry or a substantial por-
tion of the industry. Section 4(d) was not intended to modify
that statute so as to require the Federal Security Administrator
to hold a hearing on the petition of a single individual.
The agency need act on the petition only in accordance with
its procedures as published in compliance with section 3(a) (2).
The denial of a petition is governed by section 6(d). Sen. Rep.
p. 15; H.R. Rep. p. 26 (Sen. Doc. pp. 201, 260). Accordingly,
prompt notice of such denial should be given to the petitioner,
together with a simple statement of the procedural or other
grounds therefor.
Neither the denial of a petition under section 4(d), nor an
agency's refusal to hold public rule making proceedings thereon,
is subject to judicial review. Sen. Rep. p. 44 (Sen. Doc. p.
230).
This subsection (as in the case of the preceding portions of
section 4) does not apply to rules relating to the func-
tions and matters enumerated in the first sentence of sec-
tion 4. The reports of the Senate and House Committees on the
Judiciary state that "The introductory clause exempts from all
of the requirements of section 4 any rule making so far as there
are involved (1) military, naval, or foreign affairs functions
or (2) matters relating to agency management or personnel or
to public property, loans, grants, benefits, or contracts." (Under-
scoring supplied). Sen. Rep. p. 13; H.R. Rep. p. 23 (Sen. Doc.
pp. 199, 257). The petition procedure of section 4 (d) is not
applicable, for example, to the rules which an agency has issued
or is empowered to issue with respect to loans or pensions.

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IV
SECTION 5-ADJUDICATIONS

Section 5, together with sections 7 and 8, governs the pro-

cedure in formal administrative adjudication. In addition, section
5 lists the types of adjudication which are exempted from the
detailed procedural requirements of sections 5, 7 and 8. It is
to be noted that the excepted types of adjudication are exempt
from all of the provisions of section 5, as well as of sections 7 and
8. Thus, if a particular matter is "subject to a subsequent trial of
the law and the facts de novo in any court", subsection (d),
authorizing agencies to issue declaratory judgments, is not ap-
plicable.

GENERAL SCOPE OF FORMAL PROCEDURAL REQUIREMENTS

"Adjudication" is defined as "agency process for the formula-
tion of an order"; "order" is in turn defined as "the whole or any
part of the final disposition (whether affirmative, negative, in-
junctive, or declaratory in form) of any agency in any matter
other than rule making but including licensing" (section 2 (d)).
Thus, investigatory proceedings, no matter how formal, which
do not lead to the issuance of an order containing the element of
final disposition as required by the definition, do not constitute
adjudication. For example, accident investigations conducted by
the Civil Aeronautics Authority pursuant to Title VII of the
Civil Aeronautics Act do not result in orders, and therefore do
not involve adjudication within the meaning of section 5.1
After examining the definition of "rule making" in section
2 (c), it is apparent that the residual definition of "adjudication"
in section 2 (d) might include many governmental functions,
such as the administration of loan programs, which traditionally
have never been regarded as adjudicative in nature and as a rule
have never been exercised through other than business procedures.
The exclusion of such functions from the formal procedural re-
quirements of sections 5, 7 and 8 is accomplished by the introduc-
tory phrase of section 5 which limits its application (and, there-
fore, the application of sections 7 and 8) to cases of "adjudica-
tion required by statute to be determined on the record after op-
1 In the Senate Comparative Print of June 1945, p. 2 (Sen. Doc. p. 13), it is stated:
"It should be noted that the definition of agencies does not mean that all acts of such agencies
are subject to the procedural requirements. * * * If an agency is subject to the proposal under
this section, nevertheless it is subject thereto only to the extent that acts, rules, or orders are
defined and not further excluded in the following sections and subsections."

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 ADMINISTRATIVE PROCEDURE ACT 41
portunity for an agency hearing". It has been pointed out that
"Limiting application of the sections to those cases in which
statutes require a hearing is particularly significant, because there-
by are excluded the great mass of administrative routine as well
as pensions, claims, and a variety of similar matters in which
Congress has usually intentionally or traditionally refrained from
requiring an administrative hearing." Senate Comparative Print
of June 1945, p. 7 (Sen. Doc. p. 22).
It will be noted that the formal procedural requirements of
the Act are invoked only where agency action "on the record after
opportunity for an agency hearing" is required by some other
statute. The legislative history makes clear that the word "statute"
was used deliberately so as to make sections 5, 7 and 8 applicable
only where the Congress has otherwise specifically required a
hearing to be held. Senate Hearings (1941) pp. 453, 577; Senate
Comparative Print of June 1945, p. 7 (Sen. Doc. p. 22); House
Hearings (1945) p. 33 (Sen. Doc. p. 79); Sen. Rep. p. 40
(Sen. Doc. p. 226); 92 Cong. Rec. 5651 (Sen. Doc. p. 359).
Mere statutory authorization to hold hearings (e.g., "such hear-
ings as may be deemed necessary") does not constitute such a
requirement. In cases where a hearing is held, although not re-
quired by statute, but as a matter of due process or agency
policy or practice, sections 5, 7 and 8 do not apply. Senate
Hearings (1941) p. 1456.
Under section 5 of the Federal Trade Commission Act, for
example, it is clear that orders to cease and desist from unfair
methods of competition must be issued on the basis of the record
made in the hearing which is required by that Act (15 U. S. C. 45).
See also section 10 of the National Labor Relations Act (29 U. S.
C. 160). Licensing proceedings constitute adjudication by defini-
tion and where they are required by statute to be "determined
on the record after opportunity for an agency hearing", sections
5, 7 and 8 are applicable. Thus, under section 15 of the Securities
Exchange Act (15 U. S. C. 78o), the Securities and Exchange
Commission may deny an application for broker-dealer registra-
tion or revoke such registration after notice and opportunity for
hearing; while the Securities Exchange Act does not expressly
require orders of denial or revocation of registration to be made
"on the record", such a requirement is clearly implied in the
provision for judicial review of these orders in the circuit
courts of appeal. Upon such review, the Commission files "a

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transcript of the record upon which the order complained of was

entered", and "The finding of the Commission as to the facts, if
supported by substantial evidence, shall be conclusive." (15 U. S.
C. 78y).
Other statutes authorizing agency action which is clearly
adjudicatory in nature, such as the revocation of licenses, specifi-
cally require the agency to hold a hearing but contain no pro-
vision expressly requiring decision "on the record". For example,
the Secretary of Agriculture may issue cease and desist orders
under section 312 of the Packers and Stockyards Act, 1921 (7
U. S. C. 213), only after "notice and full hearing", and these
orders are made reviewable under the Urgent Deficiencies Act.
The Department of Agriculture has always assumed that these
orders must be based upon the evidentiary record made in the
hearing, and the courts have held that upon review the validity
of an order issued under the Packers and Stockyards Act must
be determined upon the administrative record. Tagg Bros. &
Moorhead v. United States, 280 U. S. 420 (1930). It seems clear
that administrative adjudication exercised in this context is
subject to sections 5, 7 and 8.
A further group of statutes merely authorizes adjudicatory
action after hearing, and contains no reference to decision "on
the record" nor any specific provision for judicial review. Thus,
under the United States Warehouse Act, the Secretary of Agri-
culture may suspend or revoke warehousemen's licenses "after
opportunity for hearing" (7 U.S.C. 246). It is believed that
with respect to adjudication the specific statutory requirement
of a hearing, without anything more, carries with it the further
requirement of decision on the basis of the evidence adduced at
the hearing.2 With respect to rule making, it was concluded, supra,
that a statutory provision that rules be issued after a hearing,
without more, should not be construed as requiring agency action
"on the record", but rather as merely requiring an opportunity
for the expression of views. That conclusion was based on the
legislative nature of rule making, from which it was infer-
red, unless a statute requires otherwise, that an agency hearing
on proposed rules would be similar to a hearing before a legis-
lative committee, with neither the legislature nor the agency being
limited to the material adduced at the hearing. No such rationale
2 It is clear that nothing in the Administrative Procedure Act precludes private parties
from waiving their right to a hearing. Similarily, an agency Is not prevented from requir.
Ing parties to indicate within a reasonable time their desire for a hearing.

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 ADMINISTRATIVE PROCEDURE ACT 43

applies to administrative adjudication. In fact, it is assumed that

where a statute specifically provides for administrative adjudi-
cation (such as the suspension or revocation of a license) after
opportunity for an agency hearing, such specific requirement for
a hearing ordinarily implies the further requirement of decision
in accordance with evidence adduced at the hearing. H.R. Rep.
p. 51, fn. 9 (Sen. Doc. p. 285). Of course, the foregoing discus-
sion is inapplicable to any situation in which the legislative
history or the context of the pertinent statute indicates a con-
trary congressional intent.
Certain licensing statutes provide that an application for a
license may be granted or become effective upon lapse of time
without a hearing, but that there must be an opportunity for
hearing prior to the denial of the application. See Securities Ex-
change Act of 1934, section 15(b), (15 U. S. C. 78o(b)) and
Communications Act of 1934, section 309 (47 U. S. C. 309).
Nothing in section 5 of the Administrative Procedure Act is
intended to require hearings where such statutes now permit the
granting of licenses without a hearing.
Exempted adjudications. Section 5 specifically exempts from
its provisions (and, accordingly, from the provisions of sections
7 and 8) six types of adjudicatory functions or proceedings which
are discussed hereafter. It is important to note that these exemp-
tions extend to all of the provisions of section 5. Furthermore,
the exemption is applicable even where the exempted function is
required by statute to be exercised "on the record after oppor-
tunity for an agency hearing". Sen. Rep. p. 16; H.R. Rep. p. 26
(Sen. Doc. pp. 202, 260).
1. "Any matter subject to a subsequent trial of the law and
the facts de novo in any court". This exemption was explained in
the reports of the Senate and House Committees on the Judiciary,
as follows: "Where the adjudication is subject to a judicial trial
de novo [it] is included because whatever judgment the agency
makes is effective only in a prima facie sense at most and the
party aggrieved is entitled to complete judicial retrial and de-
cision." Sen. Rep. p. 16; H.R. Rep. p. 26 (Sen. Doc. pp. 202, 260).
Exempt under this heading are certain proceedings which lead
to reparation orders awarding damages, such as are issued by
the Interstate Commerce Commission (49 U. S. C. 16) and the
Secretary of Agriculture (7 U. S. C. 210). Senate Hearings (1941)
pp. 75, 1389, 1508. In the Senate Comparative Print of June 1945

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(p. 8) (Sen. Doc. p. 22) the scope of the exemption was described
as follows:
This exception also exempts administrative reparation orders assessing
damages, such as are issued by the Interstate Commerce Commission
and the Secretary of Agriculture, since such orders are subject to
trial de novo in court upon attempted enforcement.
2. "The selection or tenure of an officer or employee of the
United States other than examiners appointed pursuant to sec-
tion 11". This exemption of adjudications involving the selec-
tion and tenure of officers other than examiners was made "because
the selection and control of public personnel has been tradition-
ally regarded as a largely discretionary function". Sen. Rep. p.
16; H.R. Rep. p. 26 (Sen. Doc. pp. 202, 260). There is excluded
from this exemption the selection or tenure of "examiners ap-
pointed pursuant to section 11"; this refers to the provision of
section 11 that "Examiners shall be removable by the agency in
which they are employed only for good cause established and
determined by the Civil Service Commission * * * after oppor-
tunity for hearing and upon the record thereof." Proceedings for
the removal of such examiners must be conducted in accordance
with sections 5, 7 and 8.
3. "Proceedings in which decisions rest solely on inspections,
tests, or elections". The reason for the exemption is that "those
methods of determination do not lend themselves to the hearing
process". Sen. Rep. p. 16; H.R. Rep. p. 27 (Sen. Doc. pp. 202, 261).
This exemption is applicable even though a statute requires an
opportunity for an agency hearing; thus the words "rest- solely"
do not mean that the exemption is available only where decisions
are based solely upon inspections, tests, or elections, without
opportunity for hearing or other proceedings. Rather, "rest solely"
appears to meahi that the exemption shall apply where all the
issues involved in the decision are determined mainly on the basis
of an inspection, test, or election. The legislative history of the
Act, commencing with the Final Report of the Attorney General's
Committee on Administrative Procedure, pp. 36-38, suggests the
following as examples of "proceedings in which decisions rest
solely on inspections, tests, or elections":
(a) the denial of airman certificates under section 602 of
the Civil Aeronautics Act (49 U. S. C. 552) (statute provides
for a hearing); Senate Hearings (1941) pp. 602-3;
(b) the denial or revocation of certificates of seaworthiness
by local inspectors of the Coast Guard (46 U. S. C. 391); Senate

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 ADMINISTRATIVE PROCEDURE ACT 45

Hearings (1941) pp. 833-4;

(c) locomotive inspections by the Interstate Commerce Com-
mission (45 U. S. C. 29) (statute provides for a hearing); Sen-
ate Hearings (1941) pp. 833-4;
(d) the grading of grain under the United States Grain Stand-
ards Act (7 U. S. C. 71 et seq.) ; Senate Hearings (1941) pp.
833-4.
The rationale for exempting such adjudications from formal
procedural requirements was well stated by the Attorney General's
Committee on Administrative Procedure in the following passage:
In all these cases, as well as in others not here described, the most
important element in the decision is the judgment of the man who
saw and tested the ship or grain or fruit or locomotive, or who exam-
ined the prospective airplane pilot, or seaman, or proposed periodical.
Formal proceedings are not, of course, impossible. A trial examiner
could be designated; the inspector could be summoned to testify, under
oath, concerning his observations just as a traffic officer who gives a
driving test to an applicant for a motor operator's permit could be re-
quired to describe the applicant's performance to a second officer who
could, in turn, decide whether the permit should be issued. But resort
to formal procedure in this type of administrative matter, although
sometimes provided for as in certain of the instances noted above, is
not desired or utilized by the person whose rights or privileges are
being adjudicated, because it gives no added protection. The judgment
of the inspector who examined the applicant or tested the article
would necessarily remain the determining element in the decision, and,
in any event, some immediate decision concerning the fitness of an
applicant, or of an airplane, or a locomotive, or a ship, is necessary to
protect the public interest. That cannot await a formal hearing. Nor
would formal procedure give greater assurance of a correct decision.
The surest way to ascertain what is the grade of grain is for a skilled
inspector to test it; the best way to discover whether the radio equip-
ment of a ship is in proper working order is for a radio mechanic to
examine it and test it. (Final Report, p. 37)
For further legislative history relating to this exemption, see
Senate Hearings (1941) pp. 590, 602, 833.
4. "The conduct of military, naval, or foreign affairs func-
tions". Both Committee reports state that the section "exempts
military, naval, and foreign affairs functions for the same reasons
that they are exempted from section 4; and, in any event, rarely
if ever do statutes require such functions to be exercised upon
hearing." Sen. Rep. p. 16; H.R. Rep. p. 27 (Sen. Doc. pp. 202, 261).
Thus, the exercise of adjudicatory functions by the War and
Navy Departments or by any other agency is exempt to the extent
that the conduct of military or naval affairs is involved. Senate
Hearings (1941) pp. 502-3. The term "foreign affairs functions"
appears to be used in the same sense as in section 4. H.R. Rep. p. 27
(Sen. Doc. p. 261).
5. "Cases in which an agency is acting as an agent for a

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court". This is self-explanatory. Senate Hearings (1941) pp. 422,
474, 1457.
6. "The certification of employee representatives". This ex-
emption for "the certification of employee representatives such as
the Labor Board operations under section 9 (c) of the National
Labor Relations Act, is included because those determinations
rest so largely upon an election or the availability of an election".
Sen. Rep. p. 16; H.R. Rep. p. 27 (Sen. Doc. pp. 202, 261). And see
Senate Hearings (1941) pp. 260, 271. It also exempts the certi-
fication of employee representatives by the National Mediation
Board pursuant to section 2 (9) of the Railway Labor Act (45
U. S. C. 152).

SECTION 5(a)-NOTICE
The first sentence of section 5 (a) provides that "Persons
entitled to notice of an agency hearing shall be timely informed
of-
(1) "the time, place, and nature thereof". The subsection does
not specify the period of notice of hearing to be given by an agency,
other than to require "timely" notice. Whether a given period of
time constitutes timely notice will depend upon the circumstances,
including the urgency of the situation and the complexity of the
issues involved in the proceeding. It is clear that nothing in the
subsection revokes the specific provisions of other statutes as to
the amount of notice which must be given in various proceedings.
See generally section 8 of the Federal Register Act (44 U.S.C.
308) and specific statutory provisions such as section 5 of the
Federal Trade Commission Act, requiring 30 days' notice of
hearing (15 U. S. C. 45). In addition to specifying the time and
place of hearing, the notice should specify the nature of the hear-
ing, e.g., whether a cease and desist order should issue.
The last sentence of section 5 (a) provides that "In fixing the
times and places for hearings, due regard shall be had for the
convenience and necessity of the parties or their representatives."
This simply means that consistent with the public interest and
the due execution of the agency's functions, each agency shall at-
tempt to schedule hearings at times and places which will be
convenient for the parties and their representatives. Sen. Rep. p.
17 (Sen. Doc. p. 203).
(2) "the legal authority and jurisdiction under which the
hearing is to be held". The notice should contain reference to the

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 ADMINISTRATIVE PROCEDURE ACT 47

agency's authority sufficient to inform the parties of the legal

powers and jurisdiction which the agency is invoking in the
particular case, and thus enable the parties to raise any legal issues
they consider relevant.
(3) "The matters of fact and law asserted". It is not required
to set forth evidentiary facts or legal argument. All that is neces-
sary is to advise the parties of the legal and factual issues involved.
Responsive pleading. The second sentence of section 5 (a)
provides that "In instances in which private persons are the
moving parties, other parties to the proceeding shall give prompt
notice of issues controverted in fact or law; and in other instances
agencies may by rule require responsive pleading." In the Com-
mittee reports, it is stated that "The second sentence of the sub-
section applies in those cases where the agency does not control
the matter of notice because private persons are the moving
parties; and in such cases the respondent parties must give
notice of the issues of law and fact which they controvert so that
the moving party will be apprised of the issues he must sustain."
Sen. Rep. p. 17; H.R. Rep. p. 27 (Sen. Doc. pp. 203, 261). The
first clause of this sentence is mandatory. This provision for
responsive pleading appears to be applicable, for example, where
the moving party is applying for a license and the agency admits
as parties or intervenors competitors of the applicant who are op-
posing the application. Under section 5(a), the agency should re-
quire such additional parties to disclose their position promptly.
While the subsection does not specify the consequences to be at-
tached to a party's failure so to plead, it would clearly support an
agency rule requiring a party to answer specifically the allegations
of the moving party, or be deemed to have admitted such allegations.
The second sentence of section 5 (a) also provides that "in
other instances agencies may by rule require responsive plead-
ing". "In other instances" apparently refers to cases in which
the agency, rather than a private party, is the moving party.
Thus, the quoted clause authorizes an agency, in adjudicatory
proceedings which it has initiated, such as for the suspension or
revocation of licenses, to require the respondent to plead respon-
sively, i.e., to "give prompt notice of issues controverted in fact
or law".
SECTION 5 (b) -PROCEDURE

Section 5 (b) provides that "The agency shall afford all inter-
ested parties opportunity for (1) the submission and considera-

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tion of facts, arguments, offers of settlement, or proposals of

adjustment where time, the nature of the proceeding, and the
public interest permit, and (2) to the extent that the parties
are unable so to determine any controversy by consent, hearing,3
and decision upon notice and in conformity with section 7 and 8."
The settlement of cases and issues by informal methods is noth-
ing new in Federal administrative procedure. In its Final Report,
the Attorney General's Committee on Administrative Procedure
pointed out (p. 35) that "even where formal proceedings are
fully available, informal procedures constitute the vast bulk of
administrative adjudication and are truly the lifeblood of the
administrative process".
Like section 5 generally, subsection 5 (b) applies only to cases
"of adjudication required by statute to be determined on the
record after opportunity for an agency hearing". The purpose of
this subsection is to provide, so far as practicable, for the in-
formal settlement or adjustment of controversies in lieu of formal
adjudicatory proceedings. Section 5 (b), however, does not re-
quire agencies to settle informally all cases which the parties desire
to settle. Rather it requires the agencies to make available oppor-
tunities for such settlements, "where time, the nature of the
proceeding, and the public interest permit".
Agencies must in some way provide opportunities for in-
formal disposition of controversies. However, the precise manner
in which such opportunities are to be afforded has been deliber-
ately left by Congress to development by the agencies them-
selves. See Senate Comparative Print of June 1945, p. 9 (Sen.
Doc. p. 24). The subsection apparently leaves the agencies free
to provide such opportunity either before or after the initiation
of a formal proceeding (e.g., the issuance of a complaint).
If the opportunity is to be made available prior to the issuance
of a complaint or notice, the agency must in some way advise
the parties that formal proceedings are contemplated. In such
a situation, the agency should advise the party at some pre-
liminary stage (investigatory or otherwise) that it is contem-
plating the initiation of a formal proceeding and that it is
giving him an opportunity to settle or adjust the matter. Where
the opportunity is made available after the issuance of a notice
or complaint, it is sufficient if the agency's published procedures
3 The comma after "hearing" in section 5 (b) Is a printer's error.

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 ADMINISTRATIVE PROCEDURE ACT 49

advise parties as to how an informal settlement or adjustment may

be sought.
Whether such opportunity is provided before or after the initia-
tion of the formal proceeding, it should enable parties to present
their proposals for settlement to responsible officers or employees
of the agency. Since section 5 (b) does not prescribe adjustment
procedures, they may consist entirely of oral conferences or
agencies may require proposals for adjustment or settlement to
be submitted in writing. If proposals are submitted and they are
unsatisfactory, the agency should consider the advisability of
informing the parties involved of the conditions, if any, on which
the agency is willing to settle the controversy or accept compliance
without formal proceedings. It is clear that section 5 (b) does
not require an agency to defer formal proceedings indefinitely
while parties submit a series of proposals for the purpose of
delay.
In the settlement of cases pursuant to section 5 (b), agencies
may, as heretofore, require parties to enter into consent decrees
or orders or stipulations to cease and desist as a part of the
settlement. As Representative Walter stated: "The settlement by
consent provision is extremely important because agencies ought
not to engage in formal proceedings where the parties are perfect-
ly willing to consent to judgments or adjust situations informally."
[Italics supplied] 92 Cong. Rec. 5651 (Sen. Doc. p. 361).
Final Report, pp. 41-42.
The requirement of section 5 (b) that agencies provide oppor-
tunity for informal settlement is limited to cases "where time, the
nature of the proceeding, and the public interest permit". The
quoted language is to be treated in the alternative. Where an
agency is confronted with the necessity for emergency action or
where a statutue requires that a hearing be held within a limited
period of time, the agency may be obliged to limit or refuse
opportunity for informal settlement. The "nature of the pro-
ceeding" may be said to preclude negotiation in situations where
the party has declared that he does not intend to comply with a
known requirement of the agency or where statutes require that
hearings be held in any event.4 Senate Hearings (1941) p. 1474.
Where an agency believes that the informal settlement of an al-
leged violation or certain classes of violations will not insure
future compliance with law, it would be justified in concluding that
4 For example, the Civil Aeronautics Board is required to hold hearings before granting
a certificate of public corenience and necessity for a new route (49 U. S. C. 481).

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such settlement by consent would not be in the public interest.
Each agency should make public, pursuant to section 3(a),
the manner in which it will provide interested parties an op-
portunity for the informal settlement or adjustment of the matters
in issue. H.R. Rep. p. 27 (Sen. Doc. p. 261).

SECTION 5(c)-SEPARATION OF FUNCTIONS

Section 5 (c) generally requires each agency, in the adjudica-
tion of cases subject to section 5, to establish an internal separa-
tion of functions between the officials who hear and decide and
those who investigate or prosecute. The discussion will be simpli-
fied if the exceptions from the requirements of section 5 (c) are
considered first.
Exceptions. Section 5 (c), like the rest of section 5, applies
only to cases of adjudication "required by statute to be deter-
mined on the record after opportunity for an agency hearing",
and if the subject matter of the proceeding is not exempted by
the first paragraph of section 5. Rule making, of course, is not
subject to section 5 (c). Section 5 (c), in addition, provides that
the provisions of that subsection "shall not apply in determining
applications for initial licenses or to proceedings involving the
validity or application of rates, facilities, or practices of pub-
lic utilities or carriers".
Section 5 (c) does not apply to agency proceedings to deter-
mine applications for initial licenses-regardless of whether the
agency grants or denies the license. "License" is defined in section
2 (d). The phrase "initial license" must be interpreted from the
context and legislative history.
The Administrative Procedure Act is based upon a broad and
logical dichotomy between rule making and adjudication, i.e.,
between the legislative and judicial functions. See Chapter I.
The legislative history of section 5 (c) reveals that "deter-
mining applications for initial licenses" was exempted from the
requirements of the subsection on the ground that such pro-
ceedings are similar to rule making. In the Committee reports,
it is explained that "The exemption of applications for initial
licenses frees from the requirements of the section such matters
as the granting of certificates of convenience and necessity, upon
the theory that in most licensing cases the original application
may be much like rule making. The latter, of course, is not sub-
ject to any provision of section 5." Sen. Rep. p. 17; H.R. Rep. p.
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 ADMINISTRATIVE PROCEDURE ACT 51

30 (Sen. Doc. pp. 203, 262). The rationale for the exemption was
further developed by Representative Walter on the floor of the
House, as follows: "However, the subsection does not apply in
determining applications for initial licenses, because it is felt that
the determination of such matters is much like rule making
and hence the parties will be better served if the proposed decis-
sion-later required by section 8-reflects the views of the re-
sponsible officers in the agencies whether or not they have actually
taken the evidence." 92 Cong. Rec. 5651 (Sen. Doc. p. 361).
In view of the function of the exemption, the phrase "applica-
tion for initial licenses" must be construed to include applications
by the licensee for modifications of his original license. In effect,
this gives full meaning to the broad definition of "license" in
section 2 (e), i.e., "the whole or part of any agency permit, certifi-
cate, approval, registration, charter, membership, statutory ex-
emption or other form of permission". [Italics supplied] In
other words, the definition clearly suggests that any agency
"approval" or "permission" is a license, regardless of whether it
is in addition to or related to an earlier license.5 Only by such a
construction can the appropriate procedures be made applicable
to those aspects of licensing which are dominated by policy mak-
ing considerations and in which accusatory and disciplinary factors
are absent. Senate Hearings (1941) p. 1451. In this way, the
basic dichotomy of the Act between rule making and adjudication
is preserved, because section 5(c) will remain applicable to li-
censing proceedings involving the renewal, revocation, suspension,
annulment, withdrawal or the agency-initiated modification or
amendment of licenses-i.e., all those phases of licensing in which
the accusatory or disciplinary factors are, or are likely to be,
present.
This interpretation of the scope of the exemption is consis-
tent with the remainder of its legislative history. When the ad-
5 Any other interpretation of the exemption will largely destroy it and will result in an
erratic application of section 5(c). For example, the function of the Civil Aeronautics
Board with respect to certificates of public convenience and necessity increasingly relates
to applications for modifications or extensions of existing routes rather than to original
applications for entirely new routes. Thus, A, with a certificate for a route from
New York to Chicago with a stop at Cleveland, may apply for a modification of the
certificate to permit an additional stop at Pittsburgh. The considerations involved in
determining such an application for modification of A's certificate are the same as those in-
volved in his original application-traffic flow, availability of facilities, effect on com-
peting carriers, et'. The accusatory and disciplinary elements are entirely lacking. Another
example clearly illustrates the inconsistent results of such a narrow construction of the
exemption for initial licensing: A has a certificate for a route from New York to St. Louis,
and he applies for a modification which will authorize extension of the route to Omaha; B
applies for a new certificate authorizing him to operate a route between St. Louis and
Omaha. Under the narrow construction of the exemption, section 5 (c) would apply to
the Board's determination of A's application, but would not be applicable with respect to
B's application. Similar anomalies would exist under the Federal Power Act, the Communi-
cations Act pnd the Natural Gas Act, particularly the latter.

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ministrative procedure bill (S. 7) was introduced by Senator

McCarran in January 1945, the provision that was then section
5(b) contained an exemption for "determining applications for
licenses". When S. 7 was reported by the Senate Committee on the
Judiciary in November 1945, section 5 (c) contained the present
language exempting "determining applications for initial licenses".
In the discussion of the definitions of "adjudication" and "licensing"
in the Committee reports, it is stated that "Licensing is specifically
included [in adjudication] to remove any question, since licenses
involve a pronouncement of present rights of named parties al-
though they may also prescribe terms and conditions for future
observance. Licensing as such is later exempted from some of the
provisions of sections 5, 7 and 8 relating to hearings and deci-
sions. * * * Later provisions of the bill distinguish between
initial licensing and renewals or other licensing proceedings."
[Italics supplied] Sen.' Rep. p. 11; H.R. Rep. p. 20 (Sen.
Doc. pp. 197, 254). It is apparent from the legislative history that
the word "initial" was inserted in the exception to distinguish
original applications for licenses, i.e., any agency "approval" or
"permission", from applications for renewals of licenses. This
is entirely consistent with the underlying analogy of initial licens-
ing to rule making, because renewal proceedings frequently in-
volve a review of the licensee's past conduct and thus resemble
adjudication rather than rule making.
The insertion of "initial" similarly distinguishes applications
for licenses from modifications or limitations imposed by an agency
upon an existing license. Thus, the Senate Committee Report also
contains a memorandum from the Attorney General in which it is
stated that "The section does apply, however, to licensing, with
the exception that section 5 (c), relating to the separation of
functions, does not apply in determining applications for initial
licenses, i.e., original licenses as contradistinguished from re-
newals or amendments of existing licenses." Sen. Rep. p. 40 (Sen.
Doc. p. 226). In referring to "amendments", the quoted language
contemplated amendments or modifications imposed by the agency
on the ground that in such proceedings, as in renewal proceedings,
the issues would often relate to the licensee's past conduct.
It is concluded, therefore, that the exemption from the pro-
visions of section 5 (c) of proceedings to determine "applications
for initial licenses" extends not only to applications for original
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 ADMINISTRATIVE PROCEDURE ACT 53

licenses but also to applications by licensees for modification of

licenses.
The exception of "proceedings involving the validity or applica-
tion of rates, facilities, or practices of public utilities or carriers"
originally read "in determining * * * the past reasonableness
of rates". See S. 7, 79th Cong. 2nd sess., as passed by the Senate
on March 12, 1946. H.R. Rep. p. 52 (Sen. Doc. p. 286). The
exemption was apparently created on the ground that questions
as to the past reasonableness of rates are sometimes consolidated
with the making of future rates-a rule making function-and
that the exception would encourage such consolidation. In the
House, the exemption was broadened to include the validity or
application of facilities and practices on the theory that such
matters also are often consolidated with rule making. H.R. Rep.
pp. 30, 52 (Sen. Doc. pp. 262, 286). However, it should be noted
that the Act itself does not limit the exception to cases where
there is consolidation with rule making proceedings.
Hearing officers. The first sentence of section 5 (c) provides
that "The same officers who preside at the reception of eviderce
pursuant to section 7 shall make the recommended decision or
initial decision required by section 8 except where such officers
become unavailable to the agency." Section 8(a) provides that in
cases in which the agency has not presided at the reception of the
evidence, the officer who presided (or, in cases not subject to sec-
tion 5 (c), such as initial licensing, any other officer or officers
qualified to preside at hearings pursuant to section 7) shall make
the initial decision or recommended decision as the case may be.
Thus, apart from the exceptions referred to above, the officer who
presides at the adjudicatory hearing and hears the evidence must
prepare the initial or recommended decision, as the case may be,
unless he becomes unavailable (as by illness or leaving the
agency). Where the hearing officer becomes unavailable to the
agency, the agency may itself ccmplete the hearing or substitute
another hearing officer to do so.
The second and third sentences of section 5 (c) make pro-
vision for the separation of the functions of hearing and de-
cision from the functions of investigation and prosecution. The
second sentence of section 5 (c) provides that:
Save to the extent required for the disposition of ex parte matters as
authorized by law, no such officer shall consult any person or party on
any fact in issue unless upon notice and opportunity for all parties to
participate; nor shall such officer be responsible to or subject to the sup-

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ervision or direction of any officer, employee, or agent engaged in the
performance of investigative or prosecuting functions for any agency.
The third sentence provides:
No officer, employee, or agent engaged in the performance of inves-
tigative or prosecuting functions for any agency in any case shall,
in that or a factually related case, participate or advise in the deci-
sion, recommended decision, or agency review pursuant to section 8
except as witness or counsel in public proceedings.
It is thus apparent that the second sentence applies generally
to the hearing process or the making of the record; the third, to
the decisional process or the making of the initial or recommended
decision by the hearing officer. The broad purpose of the second
sentence is to assure that hearings be conducted by hearing officers
who have not received or obtained factual information outside
the record and who are neither supervised nor directed in the
conduct of the hearing by agency officials engaged in the per-
formance of investigative or prosecuting functions. To achieve
fairness and independence in the hearing process it is first pro-
vided that (except for ex parte matters) no hearing officer "shall
consult any person or party on any fact in issue unless upon
notice and opportunity for all parties to participate". That is,
the officer is prohibited from obtaining or receiving evidentiary
or factual information bearing on the issues unless, after notice,
all parties are permitted to participate. This would apply as well
to expert testimony; the officer may not informally obtain evident-
iary material from such experts either during or after the hearing,
any more than he may from other witnesses.
The broad purpose of the third sentence is to insure that
hearing officers make initial or recommended decisions free from
the participation or advice of agency personnel engaged in the
performance of investigative or prosecuting functions in that
or a factually related case. 6 As to the decisional process it is
clear that, to insure the separation of the functions of hearing
6 The limitation of the prohibition against consultation to those who performed in-
vestigative or prosecuting functions "in that or a factually related case", should be con-
strued literally. As this provision originally appeared in H.R. 1203, 79th Cong., 1st sess.
(1945). it was a complete prohibition against consultation with investigative and prose-
cuting personnel, as follows: "No officer, employee, or agent engaged in the performance
of investigative or prosecuting functions for any agency shall participate or advise in the
decision, recommended decision, or agency review pursuant to section 8 except as
witness or counsel in public proceedings." See Sen. Doc. p. 157.
The phrase "factually related case" connotes a situation in which a party Is faced
with two different proceedings arising out of the same or a connected set of facts. For
example, a particular investigation may result in the institution of a cease and desist
proceeding against a party as well as a proceeding involving the revocation of his license.
The employees of the agency engaged in the investigation or prosecution of such a cease
and desist proceeding would be precluded from rendering any assistance to the agency,
not only in the decision of the cease and desist proceeding, but also in the decision of the
revocation proceeding. However, they would not be prevented from assisting the agency
in the decision of other cases (in which they had not engaged either as investigators or
prosecutors) merely because the facts of these other cases may form a pattern similar to
those which they had theretofore investigated or prosecuted.

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and decision from the functions of investigation and prosecution

and to insure the independence of the hearing officer, he may not
consult or receive advice from any employee of the agency who is
engaged in the performance of investigative or prosecuting func-
tions in that or a factually related case. Likewise, under funda-
mental principles of due process, he may not receive advice or
opinions from private parties or their counsel, unless, after notice,
all parties are permitted to participate.
Further, it is manifest from the third sentence of section
5(c) that the hearing officer may obtain advice from or consult
with agency personnel not engaged in investigative or prosecu-
ting functions in that or a factually related case. The agency
personnel in question may include, for example, the agency
heads, the supervisors of the hearing officers, and persons as-
signed to assist the hearing officer in analyzing the record. Per-
mitting the hearing officer to engage with appropriate agency
personnel in an analytical discussion of the record is thoro-
ughly consistent with the purposes of the Act. A principal pur-
pose is that the hearing be followed by an initial or recommended
decision proposed by the hearing officer which will focus the
parties' attention upon the issues and conclusions of law, fact
and policy which, in the hearing officer's judgment, govern the
case. The availability to the hearing officer of appropriate
assistance and advice will result normally in a more ac-
curate initial or recommended decision and one that better reflects
the views of the agency on questions of law and policy. Thus, the
parties are better advised on the real issues that must be met in
the subsequent procedure before final decision. See Senate Hearings
(1941) pp. 266, 465, 646, 662, 836, 1487.
The exemption for the "disposition of ex parte matters as au-
thorized by law" would permit the hearing examiner to act with-
out notice on such matters as requests for adjournments, continu-
ances, and the filing of papers. Sen. Rep. p. 17; H.R. Rep. p. 30
(Sen. Doc. pp. 203, 262). Also, it would apparently permit an
examiner to act ex parte on requests for subpenas.
The independence of hearing officers is further assured by
the requirement that they shall not "be responsible to or sub-
ject to the supervision or direction of any officer, employee, or
agent engaged in the performance of investigative functions for
any agency". As a practical matter this means that an agency's
hearing examiners should be placed in an organizational unit

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apart from those to which investigative and prosecuting person-

nel are assigned, and that the examiners' unit should be under the
supervision only of the agency itself or of agency officers who
exercise no investigative or prosecuting functions. For example,
if the agency's general counsel supervises the investigation and
prosecution activities of the agency, the examiners' unit should
not be subject to his supervision or control. However, section
5 (c) would not prevent the trial examiners from being under the
supervision of the general counsel where in fact the supervision of
investigative and prosecuting functions is exercised by an associ-
ate orassistant general counsel who has no responsibility to the
general counsel for such functions but is responsible therefor
directly to the agency.
It is clear that nothing in the separation of functions require-
ments of section 5(c) is intended to preclude agency officials, re-
gardless of their functions, from participating in necesary admini-
strative arrangements, such as the efficient scheduling of hearings.
The agency. The third sentence of section 5 (c) provides that
"No officer, employee, or agent engaged in the performance of
investigative or prosecuting functions for any agency in any case
shall, in that or a factually related case, participate or advise in
the decision, recommended decision, or agency review pursuant
to section 8 except as witness or counsel in public proceedings."
Thus, on "agency review", the agency heads, as well as the
hearing examiner, will be precluded from consulting or obtaining
advice from any officer or employee with respect to any case in
which, or in a factually related case,7 such officer or employee has
participated in the investigation or prosecution. In other words,
the views of officials who investigated and prosecuted the case (or
a factually related case) must be presented to hearing examiners
and to agency heads in the public proceedings, i.e., hearings or
oral argument, or by requested findings, exceptions, and briefs
which are served upon the parties. Before discussing the scope of
these requirements, it will be useful to consider some aspects of
the administrative process.
The expertise of an administrative agency is not limited to
the heads of the agency; it includes also the staff of specialists
through whom and with whose assistance most of the agency's
functions are carried on. The issues in adjudicatory cases, while
7 See discussion of "factually related case" in footnote 6.

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frequently less complex and with narrower policy implications

than are often involved in rule making, present in many cases
difficult questions of law and policy. The determination of whether
an industry-wide trade practice violates the Federal Trade Com-
mission Act, or whether a certain series of stock market trans-
actions constitute unlawful manipulation, often involves im-
portant and difficult issues. In determining such issues, agency
heads have consulted with their principal advisers and special-
ists. Indeed, it is clearly in the public interest that they con-
tinue to do so. Section 5 (c) does not purport to isolate the
agency heads from their staffs. Rather, in the interest of fair
procedure, it merely excludes from any such participation in the
decision of a case those employees of the agency who have had
such previous participation in an adversary capacity in that or a
factually related case that they may be "disabled from bringing
to its decision that dispassionate judgment which Anglo-American
tradition demands of officials who decide questions". Final Re-
port, p. 56.
An agency officer or employee may not participate or advise
in the decision, recommended decision, or agency review of an
examiner's initial decision if in that or a factually related case he
performed investigative or prosecuting functions. For example,
if the agency's general counsel or chief accountant engages in the
performance of investigative or prosecuting functions in a case,
he becomes unavailable to the agency for consultation on the de-
cision of that or a factually related case. Of course, he could
always present his views as witness or counsel in the public pro-
ceedings, including the filing of briefs.
Assuming that an agency will in many cases wish to con-
sult with certain of its staff members, it may proceed in one of
two ways. It may in a particular case consult with staff members
who in fact have not performed investigative or prosecuting
functions in that or a factually related case. In the alternative,
the agency may find it feasible so to organize its staff assign-
ments that the staff members whom it most frequently desires to
consult will be free of all investigative and prosecuting functions.
The latter method appears to offer two distinct advantages,
particularly where the agency has a considerable volume of cases
subject to section 5(c).
First, using the agency's general counsel for an example: If

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the investigation and prosecution of adjudicatory cases are per-

formed by the legal division under his supervision, it could be
argued that his personal consideration of the routine cases has
been so limited that he should be permitted to advise the agency
in the decision of such cases. Even assuming that this is per-
mitted by section 5 (c), it would seem to be immaterial since his
counsel will not be particularly needed in the routine cases. It is in
the difficult and novel cases that the agency most needs his advice,
and it is in these cases that he is most likely to be consulted
extensively by his subordinates. Thus, he becomes unavailable to
advise the agency in the very cases in which his advice would be
most useful. On the other hand, if the agency so organizes its
staff that the general counsel is not responsible for the investiga-
tive and prosecuting functions, he would be regularly available
to the agency for consultation on the decision of cases.8
Second, if an agency thus organizes its staff and, accordingly,
identifies the officers with whom it is free to consult in the decision
of cases subject to section 5 (c), these matters can be spelled out
in the agency's published rules of procedure. Such publication
would, in effect, inform the public of the identity (by title or group)
of the staff members who advise in the decision of such cases.
In any litigation on the issue of compliance with section 5 (c), the
published rules, embodying an organization and division of func-
tions in the light of section 5 (c), would assist in establishing
proof of compliance with the separation of functions requirements.
The last sentence of section 5 (c) sets forth certain exemptions
from the requirements of the subsection. These have already been
discussed, except the provision that "nor shall it be applicable in
any manner to the agency or any member or members of the body
comprising the agency". It was pointed out that this exemption
"of the agency itself or the members of the board who comprise
it-is required by the very nature of administrative agencies,
where the same authority is responsible for both the investigation-
prosecution and the hearing and decision of cases". Sen. Rep. p.
18; H.R. Rep. p. 30 (Sen. Doc. pp. 204, 262). Thus, if a member
of the Interstate Commerce Commission actively participates in
or directs the investigation of an adjudicatory case, he will not
be precluded from participating with his colleagues in the de-
cision of that case. Sen. Rep. p. 41 (Sen. Doc. p. 227).
8 The general counsel's participation in rule making and in court litigation would be
entirely compatible with his role in advising the agency in the decision of adjudicatory cases
subject to section 5(c).

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SECTION 5 (d) -DECLARATORY ORDERS
Section 5 (d) provides that "The agency is authorized in its
sound discretion, with like effect as in the case of other orders, to
issue a declaratory order to terminate a controversy or remove
uncertainty." The purpose of section 5 (d), like that of the
Declaratory Judgment Act (28 U.S.C. 400), is to develop pre-
dictability in the law by authorizing binding determinations
"which dispose of legal controversies without the necessity of any
party's acting at his peril upon his own view". Final Report, p.
30.
This grant of authority to the agencies to issue declaratory
orders is limited by the introductory clause of section 5 so that
such declaratory orders are authorized only with respect to mat-
ters which are required by statute to be determined "on the record
after opportunity for an agency hearing". In addition, if the
subject matter falls within one of the numbered exceptions in the
introductory clause of section 5, such as a matter in which an
agency is acting as an agent for a court, section 5 (d) does not
apply. Sen. Rep. p. 18; H.R. Rep. p. 31 (Sen. Doc. pp. 204, 263).
For example, where an agency is authorized after hearing to
issue orders to cease and desist from specified illegal conduct,
it may, under section 5 (d), if it otherwise has jurisdiction,
issue a declaratory order declaring whether or not specified
facts constitute illegal conduct. On the other hand, while the
Securities and Exchange Commission has long issued informal
advisory interpretations through its principal officers as to
whether a proposed issue of securities would be exempt from
the registration requirements of the Securities Act, there is no
statutory agency hearing procedure in which this question can be
determined; if securities are sold without registration and the
Commission believes that registration was required, it can only
institute civil or criminal proceedings. Accordingly, section 5 (d)
does not authorize the Commission to issue declaratory orders as
to whether particular securities must be registered under the
Securities Act.9
Agencies are authorized in their "sound discretion" to issue
declaratory orders. They are not required to issue such orders
merely because request is made therefor. Sen. Rep. p. 18;
H.R. Rep. p. 31 (Sen. Doc. pp. 204, 263). By "sound dis-
9 Of course. this does not affect the Securities and Exchange Commission's advisory
service described above.

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cretion", it is meant that agencies shall issue declaratory orders

only under such circumstances that both the public interest and
the interest of the party are protected. Thus, "a necessary condi-
tion of its [declaratory order] ready use is that it be employed
only in situations where the critical facts can be explicity stated,
without possibility that subsequent events will alter them. This
is necessary to avoid later litigation concerning the applicability
of a declaratory ruling which an agency may seek to disregard be-
cause, in its opinion, the facts to which it related have changed".
Final Report, p. 32. Again, since the issuance of declaratory orders
is a matter of sound discretion, it is clear that an agency need not
issue such orders where it appears that the questions involved will
be determined in a pending administrative or judicial proceeding,
or where there is available some other statutory proceeding which
will be more appropriate or effective under the circumstances.
More broadly, it appears that "The administrative issuance of
declaratory orders would be governed by the same basic principles
that govern declaratory judgments in th3 courts." Sen. Rep. p. 18;
H.R. Rep. p. 31 (Sen. Doc. pp. 204, 263).

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V
SECTION 6-ANCILLARY MATTERS
Section 6 defines various procedural rights of private parties
which may be incidental to rule making, adjudication, or the
exercise of any other agency authority. The introductory words
of section 6, "Except as otherwise provided in this Act," are
intended to assure that its provisions do not override contrary
provisions in other parts of the act. Thus, the opportunity for
informal appearance contemplated by section 6(a) is not to be
construed so as to authorize ex parte conferences during formal
proceedings when such conferences are forbidden by other sec-
tions of the act. Sen. Rep. p. 18, H.R. Rep. p. 31 (Sen. Doc. pp.
204, 263).
Governing Definitions. The provisions of section 6 hinge to a
considerable extent upon the definition of the terms "party",
"person" and "agency proceeding". These terms are defined in
section 2 of the act as follows:
(b) "Person" includes individuals, partnerships, corporations,
associations, or public or private organizations of any character
other than agencies. "Party" includes any person or agency named or
admitted as a party, or properly seeking and entitled as of right to be
admitted as a party, in any agency proceeding; but nothing herein
shall be construed to prevent an agency from admitting any person
or agency as a party for limited purposes.
* ** *
(g) "Agency proceeding" means any agency process as defined in
subsections (c), (d), and (e) of this section. [Defining rule making,
adjudication and licensing, respectively.]
6 (a) -APPEARANCE
SECTION
Formal Appearance. The first sentence of section 6(a) pro-
vides that "Any person compelled to appear in person before any
agency or representative thereof shall be accorded the right to be
accompanied, represented, and advised by counsel or, if permit-
ted by the agency, by other qualified representative." This re-
states existing law and practice that persons compelled to appear
in person before an agency or its representative must be ac-
corded the right to be accompanied by counsel and to consult with
or be advised by such counsel. Such persons are also entitled to
have counsel act as their spokesmen in argument and where other-
wise appropriate. Senate Comparative Print of June 1945,
p. 10 (Sen. Doc. p. 26). It is clear, of course, that this pro-
vision relates only to persons whose appearance is compelled or
commanded, and does not extend to persons who appear volun-

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tarily or in response to mere request by an agency. Where ap-

pearance is compelled, whether as a party or as a witness, the
right to counsel exists.
The phrase "or, if permitted by the agency, by other qualified
representative" refers to the present practice of some agencies
of permitting appearance or representation in certain matters
by non-lawyers, such as accountants. The phrasing of this clause,
together with the last sentence of the subsection, makes it clear
that nothing in the first sentence was intended to change the ex-
isting powers of agencies in this respect. See discussion, infra
at pp. 65-6.
The second sentence of the subsection relates to the rights of
"parties" to "agency proceedings". It provides that every "party"
shall have the right to appear in any agency proceeding "in person
or by or with counsel or other duly qualified representative."'
The right of a party to appear personally or by or with counsel
extends, in view of the definition of "agency proceeding", to pro-
ceedings involving rule making, adjudication or licensing. The
identity of the "parties" is usually clear in adjudication, licensing
and formal rule making proceedings. However, since the pro-
vision is not limited to formal proceedings (those governed by
sections 7 and 8), but extends to informal rule making pro-
ceedings, the term "party", in the latter type of proceeding, means
any person showing the requisite interest in the matters involved.
Sen. Rep. p. 19; H.R. Rep. p. 31 (Sen. Doc. pp. 205, 263). It is
entirely clear that this right to appear in informal rule making
proceedings is limited by the nature of the procedure adopted by
an agency, pursuant to section 4(b). If the agency, under section
4(b), provides interested persons an opportunity to present their
views orally, the agency must allow any person with the requisite
interest to appear personally or by counsel or other qualified
representative. On the other hand, if the agency desires to hold
informal rule making proceedings consisting of the submission of
written data, views, or arguments, nothing in section 6(a) re-
quires the agency to provide in addition for personal appearance.
In other words, the second sentence of section 6(a) is not in-
tended to limit an agency's discretion as to the type of rule making
proceedings to be held in a particular case. (See opening clause of
section 6: "Except as otherwise provided in this Act").
1 The phrase "qualified representative", as used in the second sentence of subsection
6(a) relates to non-lawyers whose appearance as representatives for others is left, as
under the first sentence of the subsection, to the control of the agencies. See infra, pp. 65-6.

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Informal Appearance. The third sentence of section 6 (a) pro-
vides that "So far as the orderly conduct of public business per-
mits, any interested person may appear before any agency or its
responsible officers or employees for the presentation, adjustment,
or determination of any issue, request, or controversy in any pro-
ceeding (interlocutory, summary, or otherwise) or in connection
with any agency function." This sentence contemplates that inter-
ested persons may appear not only in matters involving rule
making, adjudication, and licensing, but also in connection with
other agency functions. This provision is not to be construed as
requiring an agency to give notice of its proposed action and to
invite appearances by interested persons; an agency is not re-
quired to provide an opportunity for appearance and adjustment
to interested persons unless they request it. Sen. Rep. p. 19 (Sen.
Doc. p. 205).
The opportunity for informal appearance contemplated by the
third sentence of section 6 (a) means that any person should be
given an opportunity to confer or discuss with responsible of-
ficers or employees of the agency matters in which he is properly
interested. This opportunity should be with a responsible officer
or employee-one who can decide the matter or whose function it
is to make recommendations on such matters-rather than of-
ficers or employees whose duties are merely mechanical or formal.
Sen. Rep. p. 19; H.R. Rep. p. 32 (Sen. Doc. pp. 205, 264).
This provision for informal appearance is expressly limited by
the subsection to "so far as the orderly conduct of public business
permits." Clearly, both the right and its limitation should be
construed to achieve practical and fair results. Appearance should
be allowed except where it would be inconsistent with the orderly
conduct of public business. A properly interested person who is
permitted to appear should be accorded an opportunity to present
his case or proposals to a responsible officer or employee as de-
fined above. Repeated opportunities to present the same argu-
ments or proposals are not required. Further, the act does not re-
quire that every interested person be permitted to follow the chain
of command to the head of the agency. It was not intended to re-
quire the directors of the Reconstruction Finance Corporation,
for example, to confer personally with every applicant for a loan.
It is sufficient if the opportunity to confer is with an official of
such status that he knows the agency's policy, and is able to

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bring unusual or meritorious cases to the attention of the officials

who shape the policy or make final decisions.
The opportunity thus to appear "for the presentation, adjust-
ment, or determination of any issue, request, or controversy in
any proceeding"--or "in connection with any agency function" re-
lates not only to "agency proceedings" as defined in section 2(g),
but also to all other agency functions. It means, for example, that
upon request any person should be allowed, where this is feasible,
to present his reasons as to why a particular loan or benefit should
be made or granted to him. It would also seem to mean that he can
present his reasons as to why a particular controversy should be
settled informally rather than in formal proceedings with at-
tendant publicity. However, there is no requirement that the
agency accept such proposals for informal settlement; if, for
example, the agency believes that formal public proceedings
will best serve the public interest, it is free to conduct such pro-
ceedings.
The reference to "interlocutory" or "summary" proceedings
appears to be intended to provide an opportunity for informal ap-
pearance and discussion in those situations where an agency
takes significant action without prior formal proceedings. H.R.
Rep. p. 32 (Sen. Doc. p. 264). For example, section 609 of the
Civil Aeronautics Act of 1938 (49 U. S. C. 559) provides that
"In cases of emergency, any such certificate [airworthiness certi-
ficate, airman certificate, etc.] may be suspended, in whole or in
part, for a period not in excess of thirty days, without regard to
any requirement as to notice and hearing." Under section 6(a)
of the Administrative Procedure Act, the persons who would be
affected by such summary action should, if feasible, be allowed
to appear and present their views on the proposed action. It is
absolutely clear, however, that nothing in this subsection was
intended to interfere with the primary objective of assuring
safety in air travel. To the extent that the timely execution
of the Administrator's duties, i.e., the "orderly conduct of public
business," precludes discussion and negotiation, he need not hold
such discussions.
There will doubtless be many cases in which an agency will
find it necessary to notice a matter for public hearing without
preliminary discussion because a statute or the subject matter or
the special circumstances so require. Sen. Rep. p. 41 (Sen. Doc.
p. 227).

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The fourth sentence of section 6 (a) provides that "Every

agency shall proceed with reasonable dispatch to conclude any
matter presented to it except that due regard shall be had for
the convenience and necessity of the parties or their representa-
tives." This provision merely restates a principle of good adminis-
tration.
Practice Before Agencies. The last sentence of section 6 (a)
provides that "Nothing herein shall be construed either to grant
or to deny to any person who is not a lawyer the right to appear
for or represent others before any agency or in any agency pro-
ceeding." The question of the extent to which non-lawyers should
be permitted to practice before administrative agencies was de-
liberately left to the determination of the various agencies, as
heretofore. House Hearings (1945) p. 34 (Sen. Doc. p. 80); H.
R. Rep. p. 32 (Sen. Doc. p. 264).
More broadly, section 6(a) leaves intact the agencies' con-
trol over both lawyers and non-lawyers who practice before them.
The reports of the Senate and House Judiciary Committees con-
tain expressions of opinion to the effect that, as to lawyers de-
siring to practice before an agency, the agency should normally
require no more than a statement from a lawyer that he is in
good standing before the courts. Sen. Rep. p. 19; H.R. Rep. p. 32
(Sen. Doc. pp. 205, 264). However, the legislative history -leaves
no doubt that the Congress intended to keep unchanged the agen-
cies' existing powers to regulate practice before them. When the
House Committee on the Judiciary held hearings in 1945 on H.R.
1203 (79th Cong., 1st sess.) which, under the title of S. 7, was en-
acted as the Administrative Procedure Act, the Committee was
specifically aware of the fact that H.R. 1203 contained no pro-
vision relating to attorneys practicing before agencies, while
H.R. 339, and H.R. 1117, also pending before the Committee, con-
tained such provisions. House Hearings (1945) p. 34 (Sen. Doc.
p. 80). Finally, during the House debate on S. 7, Representative
Kefauver offered the following amendment to section 6:
Any member of the bar who is in good standing and who has been ad-
mitted to the bar of the Supreme Court of the United States or of the
highest court of the State of his or her residence shall be eligible to
practice before any agency: Provided, however, That an agency shall
for good cause be authorized by order to suspend or deny the right to
practice before such agency.
The amendment was rejected by the House, apparently on the
ground that the subject should be covered by separate legislation.
92 Cong. Rec. 5666-8 (Sen. Doc. pp. 401-405).

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It is clear, therefore, that the existing powers of the agencies

to control practice before them are not changed by the Adminis-
trative Procedure Act. For example, an agency may exclude, after
notice and opportunity for hearing, persons of improper character
from practice before it, Goldsmith v. Board of Tax Appeals, 270
U.S. 117 (1926), or exclude parties or counsel from participation
in proceedings by reason of unruly conduct, Okin v. Securities
and Exchange Commission, 137 F. (2d) 398 (C.C.A. 2, 1943), or
impose reasonable time limits during which former employees
may not practice before the agency.
SECTION 6 (b)-INVESTIGATIONS
The first sentence of section 6 (b) provides that "No process,
requirement of a report, inspection, or other investigative act
or demand shall be issued, made, or enforced in any manner or
for any purpose except as authorized by law." This is a restate-
ment of existing law. Senate Comparative Print of June 1945,
p. 11, Sen. Rep. p. 41 (Sen. Doc. pp. 27, 227).
The second sentence of subsection 6(b) provides that "Every
person compelled to submit data or evidence shall be entitled to
retain or, on payment of lawfully prescribed costs, procure a copy
or transcript thereof, except that in a nonpublic investigatory
proceeding the witness may for good cause be limited to inspec-
tion of the official transcript of his testimony." Under this, any
person compelled to submit data or evidence, either as a party or
as a witness, must be accorded the right to retain copies of writ-
ten data submitted in response to a subpena duces tecum or other
demand, or, upon payment of lawfully prescribed costs, to procure
from the agency a copy of the data thus submitted or a trans-
cript of the oral testimony which he was required to give. This
right, it will be noted, is limited to the data and evidence submitted
by the particular witness, and does not entitle him to copies
or transcripts of the data and evidence submitted by other
persons. Moreover, it extends only to persons "compelled" to
testify or to submit data, and not to those who are merely re-
quested to do so or who do so voluntarily.
The right defined in the second sentence of section 6 (b) is
subject to the limitation "That in a nonpublic investigatory pro-
ceeding the witness may for good cause be limited to inspection
of the official transcript of his testimony." In the Committee re-
ports, it is stated that this limitation was deemed necessary "where

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evidence is taken in a case in which prosecutions may be brought
later and it is obviously detrimental to the due execution of the
laws to permit copies to be circulated." Sen. Rep. p. 19, H.R.
Rep. p. 33 (Sen. Doc. pp. 205, 265). Thus, the phrase "non-
public investigatory proceeding" covers all confidential phases
of investigations, formal or informal, conducted by agencies to
determine whether there have been violations of law. In such
situations, the witness may be limited to inspection of such portions
of the transcript of investigation as contain his own testimony.
This right to inspect the transcript extends only to persons who
have been compelled to testify.

SECTION 6(c) -SUBPENAS

The first sentence of section 6 (c) provides that "Agency sub-
penas authorized by law shall be issued to any party upon re-
quest and, as may be required by rules of procedure, upon a
statement or showing of general relevance and reasonable scope
of the evidence sought." The purpose of this provision is to make
agency subpenas available to private parties to the same extent
as to agency representatives. Sen. Rep. p. 20, H.R. Rep. p. 33
(Sen. Doc. pp. 206, 265); 92 Cong. Rec. 5652 (Sen. Doc. p. 363).
It applies to both subpenas ad testificandum and subpenas
duces tecum. It should be emphasized that section 6(c) relates
only to existing subpena powers conferred upon agencies; it
does not grant power to issue subpenas to agencies which are not
so empowered by other statutes. Senate Comparative Print of
June 1945, p. 14 (Sen. Doc. pp. 29-30).
The subsection requires the issuance of subpenas to any party
"upon request and, as may be required by rules of procedure,
upon a statement or showing of general relevance and reasonable
scope of the evidence sought." It may be argued from the quoted
language that agency subpenas must be issued merely upon re-
quest of a party unless the agency requires, by its published pro-
cedural rules, a "statement or showing of general relevance and
reasonable scope of the evidence sought"; accordingly, each
agency which is empowered to issue subpenas should issue rules
of procedure stating the manner in which parties are to request
subpenas and the contents of such requests. The standard of
"general relevance and reasonable scope" should be interpreted
and applied in the light of the statutory purpose of making
administrative subpenas equally available to private parties and

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agency representatives. (See the second sentence of section 12).

On the other hand, agencies should consider that subpenas which
it may issue to aid private parties, like subpenas issued to assist
the agencies themselves, are subject to the legal requirements
and limitations restated in the second sentence of section 6(c).
Thus, agencies may refuse to issue to private parties subpenas
which appear to be so irrelevant or unreasonable that a court
would refuse to enforce them.
The right to subpenas stated in section 6(c) is limited to
"parties", as defined in section 2(b). Accordingly, the right to
administrative subpenas is applicable to parties to rule making,
adjudication and licensing proceedings.
The Act is silent as to the responsibility for payment of fees to
witnesses called by private parties pursuant to subpenas issued
by an agency.2 It was apparently thought that such a provision
should be the subject of separate legislation. Senate Comparative
Print of June 1945, p. 11 (Sen. Doc. p. 28). In view
of this, it appears that the question of payment of witness fees
may be dealt with by reasonable administrative regulations such
as many agencies have already adopted.8
The second sentence of section 6(c) provides that "Upon
contest the court shall sustain any such subpena or similar proc-
ess or demand to the extent that it is found to be in accordance
with law and, in any proceeding for enforcement, shall issue an
order requiring the appearance of the witness or the production
of the evidence or data within a reasonable time under penalty of
punishment for contempt in case of contumacious failure to com-
ply." Upon its face, the subsection in requiring judicial enforce-
ment of subpenas "found to be in accordance with law" is a
reference to and an adoption of the existing law with respect to sub-
penas. For example, nothing in section 6 (c) seems intended to
2 Section 10 of the Act of August 2. 1946 (Public Law 600, 79th Cong., 2d sess.)
provides that "Whenever a department is authorized by law to hold hearings and to
subpena witnesses for appearance at said hearings, witnesses summoned to and attending
such hearings shall be entitled to the same fees and mileage, or expenses in the case of
Government officers and employees, as provided by law for witnesses attending in the
United States courts."
3 The following examples appear to be reasonable and appropriate:
Federal Power Commission-Rules of Practice Under the Federal Power Act.
Rule 1.131. "Fees of witnesses.-Witnesses who are summoned are entitled to the same
fees as are paid for like services in the courts of the United States, such fees to be paid by the
party at whose Instance the testimony is taken, and the Commission before issuing subpoena
may require a deposit of an amount adequate to cover the fees and milage involved." [16
U.S.C. 825f].
Interstate Commerce Commission-Rules of Practice.
Rule 56 (e). "Witness fees. A witness who is summoned and responds thereto is entitled to
the same fee as is paid for like service in the courts of the United States, such fee to be paid
by the party at whose Instance the testimony is taken at the time the subpena is served."
f49 U.S.C. 18],

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change existing law as to the reasonableness and scope of sub-
penas. Similarly, the subsection leaves unchanged existing law
as to the scope of judicial inquiry where enforcement of a sub-
pena is sought. In Endicott Johnson Corp. v. Perkins, 317 U.S.
501 (1943), the Supreme Court held that where the Secretary of
Labor sought judicial enforcement of a subpena issued in a pro-
ceeding under the Walsh-Healey Public Contracts Act, the Dis-
trict Court was not authorized to determine whether the respondent
was subject to that act, as a condition precedent to enforcement
of the subpena. Accord, under the Fair Labor Standards Act,
Oklahoma Press Publishing Company v. Walling, 327 U.S. 186
(1946). Nothing in the language of section 6(c) suggests any
purpose to change this established. rule. It is said only that the
court shall enforce a subpena "to the extent that it is found to
be in accordance with law." "Law" refers to the statutes which
a particular agency administers, together with relevant judicial
decisions.
This natural and literal construction of the second sentence of
section 6 (c) finds conclusive support in the legislative history
of the provision. When S. 7 was introduced by Senator McCarran
on January 6, 1945, section 6 (c) provided that "Upon any con-
test of the validity of a subpena or similar process or demand,
the court shall determine all relevant questions of law raised by
the parties, including the authority or jurisdiction of the agency."
(Italics supplied). Clearly this language could be construed as
intended to change the rule stated in Endicott Johnson
Corp. v. Perkins, supra. However, when S. 7 was reported by the
Senate Committee on the Judiciary on November 19, 1945 (Sen.
Rep. p. 34 (Sen. Doc. p. 220)), section 6 was rephrased in its
present form. This significant change in language, as well as the
natural and literal reading of section 6(c), is persuasive that
the subsection leaves unchanged the scope of judicial inquiry upon
an application for the enforcement of a subpena. See also Sen.
Rep. p. 41 (Sen. Doc. p. 227); 92 Cong. Rec. A2988 (Sen. Doc.
p. 415).

SECTION 6(d) -DENIALS

Section 6 (d) provides that "prompt notice shall be given of
the denial in whole or in part of any written application, petition,
or other request of any interested person made in connection with
any agency proceeding. Except in affirming a prior denial or

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where the denial is self-explanatory, such notice shall be accom-

panied by a simple statement of procedural or other grounds." This
requirement relates to applications, petitions and requests
made by "interested persons" in connection with any "agency
proceeding", i.e., rule making, adjudication and licensing pro-
ceedings. It applies to such proceedings regardless of whether
they are formal or informal. Sen. Rep. p. 20, H.R. Rep. p. 33
(Sen. Doc. pp. 206, 265). As in the case of section 4(d), an
"interested person" may be defined generally as one whose inter-
ests are or will be affected by the agency action which may re-
sult from the proceeding. It is clear that with respect to formal
proceedings, the only interested persons are those who are
"parties" to such proceedings within the meaning of section 2(b).
Section 6(d) has no application to matters which do not re-
late to rule making, adjudication or licensing. Generally, it is
not applicable to the mass of administrative routine unrelated to
those proceedings.
The prompt notice of denial required by section 6 (d) may be
given in writing, addressed to the applicant, or orally (e.g., in the
case of a proceeding conducted by an examiner). The required
statement of grounds for denial, while simple in nature, must be
sufficient to advise the party of the general basis of the denial.
Where the denial is self-explanatory or affirms a previous
denial, it need not be accompanied by a statement of reasons; in
such cases, it is assumed that the applicant has knowledge of the
grounds for denial.

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VI
SECTION 7-HEARINGS
The provisions of section 7 govern the conduct of hearings in
those cases of rule making and adjudication which are required
by sections 4 and 5 to be conducted in accordance with sections
7 and 8. The requirements of section 7 are closely integrated with
those of sections 5(c) (as to certain types of adjudication) and
8. Section 7, together with sections 5 (c) and 8, became effective
on December 11, 1946, and is applicable to proceedings commenced
on and after that date. See section 12.

SECTION 7(a) -PRESIDING OFFICERS

The first sentence of section 7 (a) provides that "There shall
preside at the taking of evidence (1) the agency, (2) one or more
members of the body which comprises the agency or (3) one or
more examiners appointed as provided in this Act; but nothing
in this Act shall be deemed to supersede the conduct of specified
classes of proceedings in whole or part by or before boards or
other officers specially provided for by or designated pursuant
to statute."
Inasmuch as the provisions of section 11 relating to the se-
lection and status of hearing examiners did not become effective
until June 11, 1947 (see section 12), it is obvious that until then
the agencies could continue to utilize their usual hearing examin-
ers or officers, in compliance, of course, with the other require-
ments of sections 5 (c), 7 and 8.
The last clause of the sentence is designed to permit agencies
to continue to utilize hearing officers or boards "specially pro-
vided for by or designated pursuant to statute." An earlier draft
referred to "other officers specially designated by statute." See
Senate Comparative Print, June 1945 pp. 12-13 (Sen. Doc. p.
28). Under the original language, it might have been neces-
sary for such an officer to be designated specifically by a statute
to conduct a particular hearing, e.g., in the manner that 19 U.S.C.
1641 requires that hearings to determine whether a customhouse
broker's license should be suspended or revoked must be held by
the collector or chief officer of the customs. Under the present
broader language, the exception will also apply if a statute
authorizes the agency to designate a specific officer or employee or
one of a specific class of officers or employees to conduct the

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hearing. Examples of statutory provisions for hearing officers

who may be utilized without regard to section 11 are: (1) joint
hearings before officers of Federal agencies and persons desig-
nated by one or more States (e.g., section 13(3) of the Inter-
state Commerce Act, 49 U.S.C. 13(3)), as well as hearings be-
fore joint State boards under section 209 (a) of the Federal
Power Act (16 U.S.C. 824h), (2) where officers of more than one
agency sit, as joint boards composed of members of the Interstate
Commerce Commission and the Civil Aeronautics Board pursuant
to section 1003 of the Civil Aeronautics Act (49 U.S.C. 643), (3)
quota review committees under the Agricultural Adjustment
Act of 1938 (7 U.S.C. 1363), and (4) boards of employees under
the Interstate Commerce Act (49 U.S.C. 17(2)). Sen. Rep. pp.
41-42, (Sen. Doc. pp. 227-228). A statutory provision which
merely provides for the conduct of hearings by any officers or
employees the agency may designate, does not come within the
exception so as to authorize the agency to dispense with hearing
examiners appointed in accordance with section 11. H.R. Rep. p.
34 (Sen. Doc. p. 2 68).
Generally, whoever presides at the hearing (whether an ex-
aminer appointed pursuant to section 11, a member of the agency
or a special statutory board or hearing officer) is subject to the
remaining provisions of the Act. Sen. Rep. p. 21; H.R. Rep. p.
34 (Sen. Doc. pp. 207, 268). However, where a member of the
agency acts as presiding officer, the exception in the last clause
of section 5 (c) applies, with the result that he is not disqualified,
as an examiner would be, by previous participation in the investi-
gation of the case. Similarly, a statute requiring or authorizing
a hearing to be conducted by a particular board or officer may
have the further effect of requiring such board or officer to parti-
cipate in the investigation or prosecution or of placing the board
or officer under the supervision or direction of investigating or
prosecuting officials. See 19 U.S.C. 1641. In the latter case, it
would seem that to the extent the general requirements of section
5 (c) are inconsistent they are inapplicable.
The second sentence of section 7 (a) provides that "The func-
tions of all presiding officers and of officers participating in de-
cisions in conformity with section 8 shall be conducted in an im-
partial manner." This means, of course, that "They must conduct
the hearing in a strictly impartial manner, rather than as the
representative of an investigative or prosecuting authority, but

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 ADMINISTRATIVE PROCEDURE ACT 73
this does not mean that they do not have the authority and duty-
as a court does-to make sure that all necessary evidence is ad-
duced and to keep the hearing orderly and efficient." Sen. Rep. p.
21, H.R. Rep. p. 34 (Sen. Doc. pp. 207, 268). This is not intended
to prohibit a hearing officer from questioning witnesses and
otherwise encouraging the making of a complete record.
The third sentence of section 7(a) provides that "Any such
officer may at any time withdraw if he deems himself disquali-
fied; and, upon the filing in good faith of a timely and sufficient
affidavit of personal bias or disqualification of any such officer, the
agency shall determine the matter as a part of the record and
decision in the case." This provision authorizes any presiding
officer to withdraw from a proceeding if he considers himself
disqualified, for example, as being related to a party. In addition,
a party may, by the "filing in good faith of a timely and sufficient
affidavit", present to the agency the issue of the "personal bias
or disqualification of any such officer"; thereupon "the agency shall
determine the matter as a part of the record and decision in the
case". Hearings are not required on every charge of bias or dis-
qualification of a presiding officer.' If the affidavit is insufficient
-upon its face, it may be dismissed summarily. In other cases, the
agency may consider it appropriate to investigate the charge it-
self or by another hearing officer. In any event, the agency's de-
cision and the proceedings upon such an affidavit must be made
a part of the record of the case in which the affidavit is filed.
Sen. Rep. pp. 21, 42, H.R. Rep. p. 35 (Sen. Doc. pp. 207, 228, 269).
If a court in reviewing the agency's final action finds, con-
trary to the agency, that the hearing officer was biased or dis-
qualified, the agency action based upon the recommended or initial
decision made by such officer is not thereby automatically void;
rather, the question is whether the private party was prejudiced
by such error. See last sentence of section 10(e). The consequences
of such bias or disqualification on the part of a presiding officer
are alluded to in the reports of the Senate and House Committees
on the Judiciary as follows: "The effect which bias or disquali-
fication shown upon the record might have would be determined
by the ordinary rules of law and the other provisions of this bill.
If it appeared or were discovered late, it would have the effect-
where issues of fact or discretion were important and the con-
1 This is emphasized by the fact that an earlier draft of the bill required such
hearings. See Senate Comparative Print, June 1945, p. 13 (Sen. Doe. p. 158).

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duct and demeanor of witnesses relevant in determining them-

of rendering the recommended decisions or initial decisions of
such officers invalid." Sen. Rep. p. 21, H.R. Rep. p. 35 (Sen. Doc.
pp. 207, 269).
SECTION 7(b)-HEARING POWERS
Section 7(b) provides that "Officers presiding at hearings
shall have authority, subject to the published rules of the agency
and within its powers, to (1) administer oaths and affirmations,
(2) issue subpenas authorized by law, (3) rule upon offers of
proof and receive relevant evidence, (4) take or cause deposi-
tions to be taken whenever the ends of justice would be served
thereby, (5) regulate the course of the hearing, (6) hold con-
ferences for the settlement or simplification of the issues by con-
sent of the parties, (7) dispose of procedural requests or similar
matters, (8) make decisions or recommend decisions in conform-
ity with section 8, and (9) take any other action authorized by
agency rule consistent with this Act."
The quoted language automatically vests2 in hearing officers
the enumerated powers to the extent that such powers have been
given to the agency itself, i.e., "within its powers." In other
words, not only are the enumerated powers thus given to hearing
officers by section 7(b) without the necessity of express agency
delegation, but an agency is without power to withhold such
powers from its hearing officers. This follows not only from the
statutory language, "shall have authority", but from the general
statutory purpose of enhancing the status and role of hearing
officers. Thus, in the Senate Comparative Print of June 1945, p. 14
(Sen. Doc. p. 29), it is stated that "The statement of the powers
of administrative hearing officers is designed to secure that re-
sponsibility and status which the Attorney General's Committee
stressed as essential (Final Report, pp. 43-53 particularly at pp.
45-46 and 50)." See also Sen. Rep. p. 21, H.R. Rep. p. 35, 92
Cong. Rec. 2157 (Sen. Doc. pp. 207, 269, 319-320) ; cf. Sen. Rep. p.
42 (Sen. Doc. p. 228).
As noted above, the subsection vests in hearing officers only
such of the enumerated powers as the agency itself possesses.
If an agency lacks the authority to issue subpenas, subsection
7(b) does not grant the subpena power to that agency's hearing
2 Since section 7(b) itself vests these powers (including the subpena power) In
hearing officers. Cudahy Packing Co. v. Holland. 315 U.S. 357 (1942). and Prenjng v.
Mohawk Co.. 331 U. S. 111 (1947), dealing with the authority of agencies to delegate such
powers, have no application here.

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 ADMINISTRATIVE PROCEDURE ACT 75
officers. Senate Comparative Print, June 1945, p. 14 (Sen.
Doc. pp. 29-30). The phrase "subject to the published rules of
the agency" is intended to make clear the authority of the
agency to lay down policies and procedural rules which will
govern the exercise of such powers by presiding officers. Senate
Hearings (1941) pp. 653, 1457-1458. For example, if an agency
provides by rule that the fact of citizenship must be established
in a prescribed manner, the hearing officer must conform to such
rule in exercising his power to "rule upon offers of proof and re-
ceive relevant evidence". Similarly, if an agency provides that
subpenas duces tecum shall be issued only upon written appli-
cation specifying the documents desired and their relevance, the
hearing officer is bound to comply.
Agencies remain free to provide for appeals to the agency
heads from rulings of hearing officers in the exercise of the powers
enumerated in section 7(b). For example, when a ruling excluding
certain evidence, if reversed by the agency, would necessitate re-
opening of the hearing and recalling witnesses, it may be de-
sirable to permit an immediate appeal from the ruling.

SECTION 7 (c) -EVIDENCE

Burden of proof. The first sentence of section 7 (c) provides
that "Except as statutes otherwise provide, the proponent of a
rule or order shall have the burden of proof." In the Senate
Comparative Print, June 1945, p. 15 (Sen. Doc. p. 31), it is
stated that "The provision relating to burden of proof is the
standard rule." There is some indication that the term "burden
of proof" was not employed in any strict sense, but rather
as synonymous with the "burden of going forward".3 In either
case, it is clear from the introductory clause that this
general statement was not intended to repeal specific provisions
of other statutes which, as by establishing presumptions, alter
what would otherwise be the "burden of proof" or the "burden
of going forward". Sen. Rep. p. 42 (Sen. Doc. p. 228).
Evidence. The second sentence of section 7 (c) provides that
"Any oral or documentary evidence may be received, but every
8 Thus, in Sen. Rep. p. 22 (Sen. Doc. p. 208), it is stated: "That the proponent of a rule
or order has the burden of proof means not only that the party initiating the proceeding
has the general burden of coming forward with a prima facie case but that other
parties, who are proponents of some different result, also for that purpose have a burden
to maintain." See also H.R. Rep. p. 86 (Sen. Doe. p. 270).

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agency shall as a matter of policy provide for the exclusion of

irrelevant, immaterial, or unduly repetitious evidence and no
sanction shall be imposed or rule or order be issued except upon
consideration of the whole record or such portions thereof as may
be cited by any party and as supported by and in accordance with
the reliable, probative, and substantial evidence."
Under section 7 (c) it is clear that, as heretofore, the technical
rules of evidence will not be applicable to administrative hear-
ings. See also Final Report, p. 70. Thus, it is stated that "the mere
admission of evidence is not to be taken as prejudicial error (there
being no lay jury to be protected from improper influence) al-
though irrelevant, immaterial, and unduly repetitious evidence
is useless and is to be excluded as a matter of efficiency and good
practice." H.R. Rep. p. 36, Sen. Rep. p. 22 (Sen. Doc. pp. 270,
208). To carry out this policy, it is advisable that each agency di-
rect its hearing officers to exclude from the record so far as
practicable irrelevant, immaterial or unduly repetitious evidence.
Agency action must be supported by "reliable, probative, and
substantial evidence." It is said that "These are standards or
principles usually applied tacitly and resting mainly upon com-
mon sense which people engaged in the conduct of responsible
affairs instinctively understand." H.R. Rep. p. 36, Sen. Rep.
p. 22 (Sen. Doc. pp. 270, 208). This restates the present law.
H.R. Rep. p. 53, fn. 18 (Sen. Doc. p. 287) ; Consolidated Edison
Co. v. National Labor Relations Board, 305 U.S. 197, 230 (1938);
Senate Comparative Print, p. 14 (Sen. Doc. p. 31). It is clear
that nothing in section 7(c) is intended to change the stand-
ard or scope of judicial review; section 10(e) (5) specifically
restates the "substantial evidence rule", as developed by the
Congress and the courts, under which the reviewing court as-
certains whether the agency's findings of fact are supported by
substantial evidence.
Nothing in section 7 (c) is intended to preclude an agency from
imposing reasonable requirements as to how particular facts
must be established-such as age, citizenship, marital status,
etc. Nor is an agency forbidden to draw such inferences or pre-
sumptions as the courts customarily employ, such as the failure
to explain by a party in exclusive possession of the facts, or the pre-
sumption of continuance of a state of facts once shown to exist.

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Furthermore, section 7 (c) does not repeal provisions of other
statutes which establish certain presumptions of fact.'
Presentationof evidence. Section 7 (c) provides further that
"Every party shall have the right to present his case or defense
by oral or documentary evidence, to submit rebuttal evidence, and
to conduct such cross-examination as may be required for a full
and true disclosure of the facts." It is concluded that the provision
is intended to emphasize the right of parties in cases of adjudi-
cation (other than determining claims for money or benefits
or applications for initial licenses) to present their evidence
orally, and in addition to present such "documentary evidence"
as would be admissible in judicial proceedings, such as writings
and records made in regular course of business. 28 U.S.C. 695.
As here used "documentary evidence" does not mean affidavits
and written evidence of any kind. Such a construction would
flood agency proceedings with hearsay evidence. In the last sentence
of the subsection, there appears the phrase "evidence in written
form," thus indicating that the Congress distinguished between
"written evidence" and "documentary evidence." See also section
203 (c) of the Emergency Price Control Act. Again, the subsec-
tion expressly states the right to adequate cross-examination.
Against this background, it is clear that the "right to present
his case or defense by oral or documentary evidence" does not
extend to presenting evidence in affidavit or other written form
so as to deprive the agency or opposing parties of opportunity
for cross-examination, nor so as to force them to assume the ex-
pense of calling the affiants for cross-examination. See Powhatan
Mining Co. v. Ickes, 118 F. 2d 105, 109 (C.C.A. 6, 1941).
Of course, the agency may, if it desires, receive such written
evidence as it determines would tend to be reliable and probative
and the admission of which would not prejudicially deprive other
parties or the agency of opportunity for cross-examination. Thus,
technical and statistical data may be introduced in convenient
written form subject to adequate opportunity for cross-examina-
tion and rebuttal. Sen. Rep. p. 42, H.R. Rep. p. 37 (Sen. Doc. pp.
228, 271). Any evidence may be admitted by agreement or if no
4 For example, section 20 (d) of the Longshoremen's and Harbor Workers' Com-
pensaton Act (33 U.S.C. 920 (d) ), provides that "In any proceedings for the enforcement
of a claim for compensation it shall be presumed, in the absence of substantial evidence
to the contrary-(d) that the injury was not occasioned by the willful intention of the
injured employee to injure or kill himself or another." See Del Vecchio v. Bowers, 296
U.S. 280 (1935). See also section 2(a)9 of the Investment Company Act of 1940 (15
U.S.C. 80a-2(9)).

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objection is made. Opp Cotton Mills, Inc. v. Administrator, 312

U.S. 126, 155 (1941).
The provision for "such cross-examination as may be required
for a full and true disclosure of the facts" does not, according
to the House Committee Report, "confer a right of so-called 'un-
limited' cross-examination. Presiding officers will have to make the
necessary initial determination whether the cross-examination
is pressed to unreasonable lengths by a party or whether it is
required for the 'full and true disclosure of the facts' stated in
the provision. Nor is it the intention to eliminate the authority
of agencies to confer sound discretion upon presiding officers in
the matter of its extent. The test is-as the section states-
whether it is required 'for a full and true disclosure of the facts.'
In many rule making proceedings where the subject matter and
evidence are broadly economic or statistical in character and the
parties or witnesses numerous, the direct or rebuttal evidence
may be of such a nature that cross-examination adds nothing
substantial to the record and unnecessarily prolongs the hear-
ings." H.R. Rep. p. 37 (Sen. Doc. p. 271).
In proceedings involving rule making -or determining claims
for money or benefits or applications for initial licenses, an agency
may adopt procedures for the submission of all or part of the
evidence in written form. Thus, in rate making and licensing
proceedings, which frequently involve extensive technical or
statistical data, the agency may require that the mass of such
material be submitted in orderly exhibit form rather than be read
into the record by witnesses. Similarly, in determining claims
for money or benefits, the agency may require that the papers
filed in support of the application contain the factual material.
Such procedures may be required only "where the interest of any
party will not be prejudiced thereby." Typically, in these cases,
the veracity and demeanor of witnesses are not important. It is
difficult to see how any party's interests would be prejudiced by
such procedures where sufficient opportunity for rebuttal exists.
However, "To the extent that cross-examination is necessary to
bring out the truth, the party should have it." Sen. Rep. p. 23,
H.R. Rep. p. 37 (Sen. Doc. pp. 209, 271). Such is the present
practice of such agencies as the Civil Aeronautics Board, which
has made extensive use of written evidence procedures to simplify
records and shorten formal hearings.

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SECTION 7 (d) -RECORD

Record. The first sentence of section 7 (d) provides that "The
transcript of testimony and exhibits, together with all papers and
requests filed in the proceeding, shall constitute the exclusive
record for decision in accordance with section 8 and, upon pay-
ment of lawfully prescribed costs, shall be made available to the
parties." The record must include any agency proceedings upon
an affidavit of personal bias or disqualification of a hearing officer
pursuant to section 7 (a). All decisions (initial, recommended
or tentative) are required by' section 8 (b) to be made a part of
the record. It is believed, by analogy to judicial practice, that
the subsection does not require the transcription of oral arguments
for inclusion in the record.
In the interests of economy, certain agencies have followed
the practice of not transcribing the stenographic record of the
hearing unless there is an appeal from the decision of the officer
presiding at the hearing. Section 7 (d) does not require an agency
to have the record transcribed automatically in every case, but
it does require transcription in any case where a party demands
a copy of the record, so that it will be available to him "upon
payment of lawfully prescribed costs." This requirement is satis-
fied by the present agency practice of contracting with private
stenographic agencies for reporting service on terms that enable
parties to obtain copies at a reasonable price.
Official notice. The second sentence of section 7(d) provides
that "Where any agency decision rests on official notice of a
material fact not appearing in the evidence in the record, any
party shall on timely request be afforded an opportunity to show
the contrary." In the Senate Comparative Print, June 1945,
p. 15 (Sen. Doe. p. 32), it is stated that "The rule of official
notice is that recommended by the Attorney General's Committee,
particularly the safeguard that parties be apprised of matters
so noticed and accorded an 'opportunity for reopening of the
hearing in order to allow the parties to come forward to meet the
facts intended to be noticed.' (Final Report pp. 71-73)." The
recommendation of the Attorney General's Committee, which is
thus apparently adopted was that "the permissible area of official
notice be extended" so as to avoid "laborious proof of what is
obvious and notorious," subject to opportunity for rebuttal or ex-
planation, as provided in section 7(d). See the excellent discussion
in Final Report, pp. 71-73, pointing out that the process of

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official notice should not be limited to the traditional matters of
judicial notice but extends properly to all matters as to which the
agency by reason of its functions is presumed to be expert, such
as technical or scientific facts within its specialized knowledge.
Cf. H.R. Rep. p. 38 (Sen. Doc. p. 272).
Agencies may take official notice of facts at any stage in a
proceeding-even in the final decision 5 -but the matters thus
noticed should be specified and "any party shall on timely re-
quest be afforded an opportunity to show the contrary." The mat-
ters thus noticed become a part of the record and, unless suc-
cessfully controverted, furnish the same basis for findings of
fact as does "evidence" in the usual sense.
5 "Where agencies take such notice they must so state on the record or in their
decisions and then afford the parties an opportunity to show the contrary." Sen. Rep.
P. 23, H.R. Rep. pp. 87-38 (Sen. Doc. pp. 209, 271). If official notice is taken of facts
In the course of the final decision, the proceeding need not be reopened automatically,
but the parties will be entitled to request reopening for the purpose of contesting the
facts thus officially noticed by the agency.

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VII
SECTION 8-DECISIONS
The provisions of section 8, together with those of section
5(c), govern the procedure subsequent to hearing. Section 8
applies to cases of rule making and adjudication which are re-
quired by sections 4 and 5 to be conducted in accordance with
sections 7 and 8. It became effective on December 11, 1946, and
is applicable to proceedings commenced on and after that date.
See section 12.
SECTION 8 (a) -WHO DECIDES
Section 8(a) provides for intermediate and final decisions,
prescribes who shall make them, and defines the decisional re-
lationship between the agency heads and presiding officers.' The
subsection reads as follows:
Action by subordinates. In cases in which the agency has not pre-
sided at the reception of the evidence, the officer who presided (or, in
cases not subject to subsection (c) of section 5, any other officer or
officers qualified to preside at hearings pursuant to section 7) shall
initially decide the case or the agency shall require (in specific cases
or by general rule) the entire record to be certified to it for initial
decision. Whenever such officers make the initial decision and in the
absence of either an appeal to the agency or review upon motion of
the agency within time provided by rule, such decision shall without
further proceedings then become the decision of the agency. On ap-
peal from or review of the initial decisions of such officers the agency
shall, except as it may limit the issues upon notice or by rule, have
all the powers which it would have in making the initial decision.
Whenever the agency makes the initial decision without having pre-
sided at the reception of the evidence, such officers. shall first recom-
mend a decision except that in rule making or determining applica-
tions for initial licenses (1) in lieu thereof the agency may issue a
tentative decision or any of its responsible officers may recommend a
decision or (2) any such procedure may be omitted in any case in
which the agency finds upon the record that due and timely execution
of its functions imperatively and unavoidably so requires.
At the outset, it should be noted that section 8 (a) has no
application to cases in which the agency itself has presided at the
reception of the evidence. The procedures required by this sub-
section are intended "to bridge the gap between the officials who
hear and those who decide cases." H.R. Rep. p. 38 (Sen. Doe. p.
272). If the agency itself, e.g., the Interstate Commerce Com-
mission, hears the evidence, it may decide the case without the use
of any intermediate decision. In such cases, however, the agency
may, if it desires, preface its final decision with a tentative de-
cision to which the parties may file exceptions.
1 Any of the requirements of section 8 may be waived by the parties. Sen. Rep. p.
23 (Sen, Doe. p. 209).

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In cases of adjudication subject to section 5 (c) and in which

the agency itself has not presided at the reception of evidence,
the presiding officer 2 must "initially decide the case or the agency
shall require (in specific cases or by general rule) the entire
record to be certified to it for initial decision." It is further pro-
vided that "Whenever the agency makes the initial decision with-
out having presided at the reception of the evidence [the presid-
ing officer] shall first recommend a decision." That is, in cases
of adjudication subject to section 5 (c), the presiding officer must
make either (a) an "initial" decision which will become the
agency's final decision in the absence of an appeal to or review
by the agency, or (b) a "recommended" decision which will be
followed by an "initial" decision by the agency.
Under the terms of the subsection, the presiding officer's de-
cision will constitute an initial decision unless the agency pro-
vides otherwise either by general rule published in the Federal
Register or by order in the particular case. Accordingly, each
agency should determine whether it desires the decisions of its
presiding officers to be "initial" decisions or recommended de-
cisions.
In cases not subject to section 5 (c), the agency may provide
for the making of initial decisions by "any other officer or officers
qualified to preside at hearings pursuant to section 7." That is,
in rule making, in "determining applications for initial licenses,"
and in "proceedings involving the validity or application of rates,
facilities, or practices of public utilities or carriers," an "initial"
decision may be made, for example, by a hearing examiner other
than the one who heard the evidence. Further, the fourth sent-
ence of section 8 (a) provides that in rule making and in determin-
ing applications for initial licenses the agency may issue a
tentative decision or any of its responsible officers may recommend
a decision in lieu of a recommended decision by the hearing ex-
aminer who conducted the hearing. This last clause permits, in
rule making and determining applications for initial licenses,
"the continuation of the widespread agency practice of serving
upon the parties, as a substitute for either an examiner's report
or a tentative agency report, a report prepared by the staff of
specialists and technicians normally engaged in that portion of
2 As here used, presiding officer means the member of the agency. the examiner
appointed pursuant to section 11, or the special statutory board or hearing officer who
conducted the hearing. See section 7(a). Where the presiding officer becomes unpvailable
as by illness or leaving the agency. the agency may direct another hearing officer to
make an initial or recommended decision, or it may issue a tentative decision, or it may
order a rehearing.

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the agency's operations to which the proceeding in question re-

lates." Sen. Rep. p. 433 (Sen. Doc. p. 229).
Finally, in rule making or determining applications for initial
licenses, the agency may itself decide the case without any prior
initial, recommended or tentative decision, even though it has not
presided at the reception of the evidence, "in any case in which
the agency finds upon the record that due and timely execution
of its functions imperatively and unavoidably so requires."
Appeals and review. Where the agency permits a hearing of-
ficer to make an "initial" decision, "in the absence of either an
appeal to the agency or review upon motion of the agency within
time provided by rule, such decision shall without further pro-
ceedings then become the decision of the agency." Parties may
appeal from the hearing officer's initial decision to the agency,
which must thereupon itself consider and decide the case. Also,
the agency may review the hearing officer's initial decision even
though the parties fail to appeal. Each agency should publish a
rule prescribing the time within which parties may appeal or
the agency may call up the case for review.4 Where the hearing
examiner (or other officer where permitted by the subsection)
makes a recommended decision, the agency must always make an
"initial" or final decision.
In making its decision, whether following an initial or recom-
mended decision, the agency is in no way bound by the decision
of its subordinate officer; it retains complete freedom of de-
cision-as though it had heard the evidence itself. This follows
from the fact that a recommended decision is advisory in nature.
See National Labor Relations Board v. Elkland Leather Co., 114
F. 2d 221, 225 (C.C.A. 3, 1940), certiorari denied, 311 U.S. 705.
Similarly, the third sentence of section 8(a) provides that "On
appeal from or review of the initial decisions of such [hearing]
officers the agency shall, except as it may limit the issues upon
notice or by rule, have all the powers which it would have in
making the initial decision." This is not to say that hearing
3 It is to be noted that in "proceedings involving the validity or application of
rates, facilities, or practices of public utilities or carriers" (if they do not constitute
either rule making or the determination of an application for an initial license), an
Intermediate (i.e.. "initial" or "recommended") decision must be made by the hearing
examiner who conducted the hearing or by some other officer or officers qualified to pre-
side at hearings pursuant to section 7(a).
4 It is important to note that section 10 (c) permits an agency to require partie
to appeal from hearing officers' initial decisions to the agency as a prerequisite tomust ob-
taining judicial review. Such a requirement must be set forth in a published rule which
further provide that the hearing officer's initial decision shall be inoperative pending
the agencys review of the case. Sen. Rep. p. 27, H.R. Rep. pp. 43. 55, fn. 21 (Sen.
Doc. pp 21g, 277, 289).

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examiners' initial or recommended decisions are without effect.

"They become a part of the record [as required by subsection
8(b)] and are of consequence, for example, to the extent that
material facts in any case depend on the determination of credi-
bility of witnesses as shown by their demeanor or conduct at the
hearing." Sen. Rep. p. 24, H.R. Rep. p. 38 (Sen. Doc. pp. 210,
272). In such cases, it is apparently assumed that agencies will
attach considerable weight to the findings of the examiner who
saw and heard the witnesses. However, in cases where the credi-
bility of witnesses is not a material factor, or cases where the
recommended or initial decision is made by an officer other than
the one who heard the evidence, the function of such decision
will be, rather, the sharpening of the issues for subsequent pro-
ceedings.
Section 8(a) empowers agencies to "limit the issues upon
notice or by rule" on appeal from or review of the initial de-
cisions of hearing officers. That is, an agency may limit the issues
which it will consider in such cases by notice in a particular case
or by a general rule published in the Federal Register. It may
restrict its review to questions of law and policy or, where it is
alleged that erroneous findings of fact have been made by the
hearing officer, to determining whether cited portions of the
record disclose that the findings are clearly wrong. Final Report,
p. 51. See also Sen. Rep. p. 43 (Sen. Doc. p. 229).
Where the hearing officer makes a recommended decision, the
agency must itself consider and determine all issues properly
presented. However, it may provide that it will consider only
such objections to its subordinates' decisions (recommended or
initial) as are presented to it as exceptions to such decisions.
See Marshall Field & Co. v. National Labor Relations Board,
318 U.S. 253, 255 (1943) ; National Labor Relations Board v.
Cheney California Lumber Co., 327 U.S. 385, 387-88 (1946). It
may also require that exceptions be precise and supported by
specific citations to the record.' The agency in reviewing either
initial or recommend-d decisions may adopt in whole or in part
the findings, conclusions and basis therefor stated by the presiding
5 See Final Report, p. 52: 'The Committee strongly urges that the agencies abandon
the notion that no matter how unspecified or unconvincing the grounds set out for appeal,
there is yet a duty to reexamine the record minutely and reach fresh conclusions with-
out reference to the hearing commissioner's decision. Agencies should insist upon meaning-
ful content and exactness in the appeal from the hearing commissioner's decision and in
the subsequent oral argument before the agency. Too often, at present, exceptions are
blanket in character, without reference to pages in the record and without in any way
narrowing the issues. They simply seek to impose upon the agency the burden of com-
plete reexamination. Review of the hearing commissioner's decision should in general
and in the absence of clear error be limited to grounds specified in the appeal."

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officer. On the other hand, it may make entirely new findings
either upon the record or upon new evidence which it takes. Also,
it may remand the case to the hearing officer for any appropriate
further proceedings. Sen. Rep. p. 43, H.R. Rep. pp. 38-39 (Sen.
Doe. pp. 229, 272-273).

SECTION 8 (b)-SUBMITTALS AND DECISIONS

Submittals. The first sentence of section 8(b) provides that
"Prior to each recommended, initial, or tentative decision, or
decision upon agency review of the decision of subordinate of-
ficers the parties shall be afforded a reasonable opportunity to
submit for the consideration of the officers participating in such
decisions (1) proposed findings and conclusions, or (2) excep-
tions to the decisions or recommended decisions of subordinate
officers or to tentative agency decisions, and (3) supporting
reasons for such exceptions or proposed findings or conclusions."
[Italics supplied]. The procedure thus prescribed for the
focusing of issues and arguments is a codification of the present
general practice. Senate Comparative Print, June 1945, p. 16
(Sen. Doe. p. 33). "Ordinarily proposed findings and con-
clusions are submitted only to the officers making the initial [or
recommended] decision, and the parties present exceptions there-
after if they contest the result. However, such exceptions may
in form or effect include proposed findings or conclusions for the
reviewing authority to consider as part of the exceptions." Sen.
Rep. pp. 24, 43 (Sen. Doe. pp. 210, 229).
Agencies may require that proposed findings and conclusions
and exceptions be supported by precise citation of the record or
legal authorities as the case may be. Reasonable time limits for
the submission of such materials may be imposed. The opportuni-
ty to submit supporting reasons means that briefs on the law and
facts which are filed by parties in support of their proposed
findings and conclusions and exceptions must be received and
considered. Sen. Rep. p. 24, H.R. Rep. p. 39 (Sen. Doe. pp. 210,
273). Section 8(b) does not purport to prescribe opportunities for
oral argument. Accordingly, subject to the provisions of particu-
lar statutes, each agency must itself determine in what cases oral
argument before hearing officers or the agency is necessary or
appropriate.6
6 See Morgan v. United States, 298 U.S. 468, 481 (1936): "Argument may be oral
or written."

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Decisions. Section 8(b) further provides: "The record shall

show the ruling upon each such finding, conclusion, or exception
presented. All decisions (including initial, recommended, or tenta-
tive decisions) shall become a part of the record and include a
statement of (1) findings and conclusions, as well as the reasons
or basis therefor, upon all the material issues of fact, law, or dis-
cretion presented on the record; and (2) the appropriate rule,
order, sanction, relief, or denial thereof."
Since all decisions, whether made by the agency or by a sub-
ordinate officer, become a part of the record, the requirement of
the first quoted sentence will be satisfied if such decisions in some
way indicate the ruling of the agency or such officer upon each
requested finding or conclusion or exception presented to the
agency or to such officer. The purpose of this requirement is "to
preclude later controversy as to what the agency had done." H.R.
Rep. p. 54, fn. 19 (Sen. Doc. p. 288).
The form and content of decisions, as prescribed in the last
sentence of section 8 (b), are discussed in the Committee reports
as follows:
The requirement that the agency must state the basis for its findings
and conclusions means that such findings and conclusions must be suf-
ficiently related to the record as to advise the parties'of their record basis.
Most agencies will do so by opinions which reason and relate the issues
of fact, law, and discretion. Statements of reasons, however, may be long
or short as the nature of the case and the novelty or complexity of the
issues may require.
Findings and conclusions must include all the relevant issues pre-
sented by the record in the light of the law involved. They may be few or
many. A particular conclusion of law may render certain issues and find-
ings immaterial, or vice versa. Where oral testimony is conflicting or
subject to doubt of its credibility, the credibility of witnesses would be a
necessary finding if the facts are material. It should also be noted that the
relevant issues extend to matters of administrative discretion as well as of
law and fact. This is important because agencies often determine whether
they have power to act rather than whether their discretion should be
exercised or how it should be exercised. Furthermore, without a
disclosure of the basis for the exercise of, or failure to exercise, discretion,
the parties are unable to determine what other or additional facts they
might offer by way of rehearing or re consideration of decisions. Sen. Rep.
pp. 24-25, H.R. Rep. p. 39. (Sen. Doc. pp. 210-211, 273).
An agency which issues opinions in narrative and expository
form may continue to do so without making separate findings of
fact and conclusions of law. However, such opinions must indicate
the agency's findings and conclusions on material issues of fact,
law or discretion with such specificity "as to advise the parties
and any reviewing court of their record and legal basis."7 The
7 Agencies should keep in mind that pursuant to section 3 (b) they may cite as
precedents only such previous orders and opinions as have been published or made avail-
able for public inspection.

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requirement that such decisions indicate the reasons for the
exercise of discretionary power is a codification of existing good
practice. See Phelps Dodge Corp. v. National Labor Relations
Board, 313 U.S. 177, 194-197 (1941).
Nothing in the Act is intended to preclude agency heads
from utilizing the services of agency employees as assistants for
analysis and drafting. Morgan v. United States, 298 U.S. 468, 481
(1936). Of course, in adjudicatory cases subject to section 5(c),
such assistants could not have performed investigative or prose-
cuting functions in the cases (or in factually related cases) in
which they are so employed. Also, the agency heads are free to
employ the hearing officer who heard a particular case as the
draftsman of their final decision and otherwise to assist in its
formulation. Compare generally section 4(a) of the National
Labor Relations Act, as amended.
Appeals to superior agency. Nothing in section 8 is intended
to cut off any rights which parties may have for appeal to or
review by a superior agency. Sen. Rep. p. 23 (Sen. Doc. p. 209).
The requirements of subsection 8 (b) as to the form and content
of decisions do not apply to decisions of a superior agency upon
such appeal from or review of the agency's decision.

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VIII
SECTION 9-SANCTIONS AND POWERS
Section 9 generally prohibits unauthorized action by agencies
and prescribes certain rules to govern licensing proceedings. The
provisions of section 9 apply to all relevant cases (other than
the agencies and functions exempted by section 2(a)) regardless
of the applicability of the other sections of the Act.

SECTION 9 (a) -SANCTIONS

Section 9 (a) provides that "in the exercise of any power or
authority no sanction shall be imposed or substantive rule or
order be issued except within jurisdiction delegated to the agency
and as authorized by law." The term sanction is broadly defined
in section 2(f) to include the whole or part of any agency "(1)
prohibition, requirement, limitation, or other condition affecting
the freedom of any person; (2) withholding of relief; (3) imposi-
tion of any form of penalty or fine; (4) destruction, taking,
seizure, or withholding of property; (5) assessment of damages,
reimbursement, restitution, compensation, costs, charges, or fees;
(6) requirement, revocation, or suspension of a license ; or (7)
taking of other compulsory or restrictive action."
The original draft of section 9 (a) limited the imposition of
sanctions to those "as specified and authorized by statute."
Senate Comparative Print, June 1945, p. 17 (Sen. Doc. p.
159). The change of the word "statute" to "law" was inten-
tional so as to recognize that an agency may impose a sanction or
issue a substantive rule or order if such power is authorized not
only by statutes but by treaties, court decisions, commonly recog-
nized administrative practices, or other law. See United States v.
MacDaniel,7 Pet. (32 U.S.) 1, 13-14 (1833). Both the Senate and
House reports recognize that the source of authority for the
imposition of a sanction or the issuance of a substantive rule or
order may be either specific or general, as the case may be. Sen.
Rep. p. 25, H.R. Rep. p. 40 (Sen. Doc. pp. 211, 274).
The purpose of section 9 (a) is, evidently, to assure that
agencies will not appropriate to themselves powers Congress has
not intended them to exercise. Section 9 (a) merely restates exist-
ing law. Sen. Rep. p. 43 (Sen. Doc. p. 229). Many agencies' powers
1 The denial of an application for a renewal of a license is not a penal measure.
Federal Communications Commission v. WOKO, 329 U.S. 223 (1946). It is, by defini-
tion in section 2 (f), a form of agency sanction.

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are very clear; they are set forth specifically in the act creating
the agency. Still other powers may be readily inferred from the
framework of the act creating the agency or may be logically
necessary for the conduct of the powers granted to the agency.
But whether an agency's powers are express or implied, in either
case they may be exercised. Particularly pertinent in this con-
nection is the language of the Supreme Court in Phelps Dodge
Corp. v. National Labor Relations Board, 313 U.S. 177, 194
(1941) :
A statute expressive of such large public policy as that on which
the National Labor Relations Board is based must be broadly phras-
ed and necessarily carries with it the task of administrative applica-
tion. There is an area plainly covered by the language of the Act and
an area no less plainly without it. But in the nature of things Con-
gress could not catalogue all the devices and strategems for circum-
venting the policies of the Act. Nor could it define the whole gamut
of remedies to effectuate these policies in an infinite variety of specific
situations. Congress met these difficulties by leaving the adaptation
of means to end to the empiric process of administration.*** the rela-
tion of remedy to policy is peculiarly a matter for administrative
competence. [Italics supplied].
SECTION 9 (b) -LICENSES
Section 9 (b) is composed of three sentences, each of which is
mutually exclusive of the others. The first sentence applies
specifically to applications for licenses, the second to suspension
or revocation of licenses, and the third to renewals. Each of these
will be considered separately.
Applications for licenses. The first sentence of section 9(b)
provides: "In any case in which application is made for a license
required by law the agency, with due regard to the rights or
privileges of all the interested parties or adversely affected
persons and with reasonable dispatch, shall set and complete any
proceedings required to be conducted pursuant to sections 7 and
8 of this Act or other proceedings required by law and shall
make its decision." The import of this sentence is that an agency
shall hear and decide licensing proceedings as quickly as pos-
sible. Should the licensing proceedings be required by statute to
be determined upon the record after opportunity for an agency
hearing, an agency will be required to follow the provisions as to
hearing and decision contained in sections 7 and 8 of the Act.
As to other types of licensing proceedings, the Act does not formu-
late any fixed procedure (just as no fixed procedure has been
formulated for adjudications other than those that are required

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by statute to be determined on the record after opportunity for

an agency hearing).
The requirement that licensing proceedings be completed
with reasonable dispatch is merely a statement of fair adminis-
trative procedure. Congress decided not to set any maximum
period of time for agency consideration of applications for licenses.
In the first draft of S. 7 there was a provision to the effect that
an application for a license would be deemed granted unless the
agency within 60 days after the application was made, rendered
its decision or set the matter down for hearing. Senate Compara-
tive Print, June 1945, p. 17 (Sen. Doc. p. 159). This provision
was dropped in later drafts and replaced with the phrase "with
reasonable dispatch."
The term "reasonable dispatch" is not an absolute one and
cannot be described in precise terms. What is reasonable for one
agency may not be reasonable for another agency. The time
necessary to consider license applications for certificates of public
convenience and necessity is much greater, as a rule, than that
needed for issuing warehousemen's licenses under 7 U.S.C. 244.
Similarly, variations in an agency's work-load, reflecting develop-
ments in an industry, may result in unavoidable temporary back-
logs. Of course, where another statute prescribes a specific period
of time for agency consideration of an application for a license,
such specific provision will be controlling. For example, under
section 355 (c) of Title 21, U.S.C., an application for a license
for the sale of new drugs becomes effective on the sixtieth day
after the filing of the application unless the Federal Security
Administrator takes appropriate action.
Suspension or revocation of licenses. The second sentence of
section 9(b) provides: "Except in cases of willfulness or those
in which public health, interest, or safety requires otherwise, no
withdrawal, suspension, revocation, or annulment of any license
shall be lawful unless, prior to the institution of agency proceed-
ings therefor, facts or conduct which may warrant such action
shall have been called to the attention of the licensee by the
agency in writing and the licensee shall have been accorded op-
portunity to demonstrate or achieve compliance with all law-
ful requirements." This sentence requires an agency to give a
licensee an opportunity to change his conduct before his license
can be revoked by the agency unless the licensee's conduct is
willful or the public health, interest or safety requires otherwise.

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Thus, if a particular licensee should under ordinary circumstances

transcend the bounds of the privilege granted to him, the agency
which has granted him the license must inform him in writing of
such conduct and afford him an opportunity to comply with the
requirements of the agency before it can revoke, withdraw,
suspend or annul his license. While the warning must be in writing,
it need not take any special form.
No prior notice need be given if the licensee's conduct is will-
ful. In such a situation the license may be revoked immediately
without "another chance." Also, "another chance" need not be
given where "the public health, interest, or safety requires other-
wise." The latter phrase refers to a situation where immediate
cancellation of a license is necessary in the public interest ir-
respective "of the equities or injuries to the licensee." Sen. Rep.
p. 26 (Sen. Doc. p. 212). For example, in case of an accident in-
volving aircraft, the Administrator of Civil Aeronautics may
suspend the license of the pilot pending investigation. The public
safety and interest require such immediate suspension. 49 U.S.C.
559.
It is clear that the provisions of this second sentence do
not apply to temporary permits or temporary licenses. Sen. Rep.
p. 26, H.R. Rep. p. 41 (Sen. Doc. pp. 212, 275). Such permits or
licenses may be revoked without "another chance" and regardless
of whether there is willfulness or whether the public health, in-
terest, or safety is involved. And it is clear, too, that the pro-
visions of this sentence do not apply to renewal of licenses. Re-
newals are treated specifically in the next sentence.
Renewal of licenses. The last sentence of section 9 (b) pro-
vides: "In any case in which the licensee has, in accordance with
agency rules, made timely and sufficient application for a renewal
or a new license, no license with reference to any activity of a
continuing nature shall expire until such application shall have
been finally determined by the agency." This sentence states the
best existing law and practice. Sen. Rep. p. 43 (Sen. Doc. p.
229). It is only fair where a licensee has filed his application for
a renewal or a new license in ample time prior to the expiration
of his license, and where the application itself is sufficient, that
his license should not expire until his application shall have been
determined by the agency. In such a case the licensee has done
everything that is within his power to do and he should not
suffer if the agency has failed, for one reason or another, to con-
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sider his application prior to the lapse of his license. Agencies,

of course, may make reasonable rules requiring sufficient advance
application.2
2 The Office of Alien Property of the Department of Justice has adopted such a rule
with reference to renewal of licenses. 11 F.R. 177A-629.

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Ix
SECTION 10-JUDICIAL REVIEW
The provisions of section 10 constitute a general restatement
of the principles of judicial review embodied in many statutes
and judicial decisions., Section 10, it must be emphasized, deals
largely with principles. It not only does not supersede special
statutory review proceedings, but also generally leaves the mech-
anics of judicial review to be governed by other statutes and by
judicial rules. For example, many statutes provide that where the
reviewing court finds that the taking of new evidence would be
warranted, such evidence must be presented to the agency with
opportunity to modify its findings. See section 9 of the Securities
Act (15 U.S.C. 77i). Such provisions continue in effect. Similarly,
the time within which review must be sought will be governed,
as in the past, by relevant statutory provisions or by judicial
application of the doctrine of laches. See Section 5(c) of the
Federal Trade Commission Act (15 U.S.C. 45 (c)) and U.S. ex
rel. Arant v. Lane, 249 U.S. 367 (1919). Accordingly, the general
principles stated in section 10 must be carefully coordinated with
existing statutory provisions and case law.2
Section 10 is applicable irrespective of whether the agency
action for which review is sought was governed by the procedural
provisions of sections 4, 5, 7 and 8. However, section 10 does not
apply to those agencies and functions which are excepted by
section 2 (a) from all provisions of the Act except section 3.
For example, the provisions of section 10 are in no way applic-
able to the review of agency action taken pursuant to the Hous-
ing and Rent Act of 1947.
Section 10 became effective on September 11, 1946, and is
applicable from that date to the judicial review of agency action.
However, the Department of Justice, in briefs filed in the Supreme
Court, has taken the position that section 10 does not apply to
cases which were pending in the courts on September 11, 1946.
While these cases were decided by the Supreme Court without
1 See statements of Carl McFarland, Chairman of the Committee on Administrative
Procedure of the American Bar Association. in House Hearings (1945) pp. 37-38 (Sen. Doc.
pp. 83-84), and of the Attorney General in Sen. Rep. pp. 38, 43 (Sen. Doc. pp. 224, 229) : 92
Cong. Rec. A2982 (Sen. Doc. pp. 406-407).
2 Recognizing the delicacy of this problem and the obligation of Government counsel
to render every assistance to the courts in this task, the Attorney General has established
a committee within the Department of Justice to assist in developing a uniform approach
to the problems which arise in litigation.
3 See section 12 of the Act as to the effective dates of the various provisions
of the Act.

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any express reference to section 10, it seems fair to infer that

the Court has accepted this construction. United States v. Ruzicka,
329 U.S. 287 (1946) ; Board of Governors of the Federal Reserve
System v. Agnew, 329 U.S. 441 (1947); Krug v. Santa Fe Pacific
Rd. Co., 329 U.S. 591 (1947); Pattersonv. Lamb, 329 U.S. 539
(1947).

SCOPE OF SECTION 10
Section 10 applies "Except so far as (1) statutes preclude
judicial review or (2) agency action is by law committed to
agency discretion". The intended result of the introductory clause
of section 10 is to restate the existing law as to the area of re-
viewable agency action. House Hearings (1945) p. 38 (Sen.
Doc. p. 84).
A statute may in terms preclude, or be interpreted as intended
to preclude, judicial review altogether. An example of a statute
expressly precluding any judicial review is the Act of March 20,
1933 (38 U.S.C. 705) providing that "All decisions rendered by
the Administrator of Veterans' Affairs under the provisions [of
designated statutory sections] shall be final and conclusive on
all questions of law and fact, and no other official or court of the
United States shall have jurisdiction to review by mandamus or
otherwise any such decision." Senate Hearings (1941) p. 1358.
Switchmen's Union of North America v. National Mediation
Board, 320 U.S. 297 (1943), illustrates the interpretation of a
statute as intended to preclude judicial review although the statute
does not expressly so provide.' Sen. Rep. pp. 43-44 (Sen. Doc.
pp. 229-230).
The provisions of section 10 are applicable "Except so far as
agency action is by law committed to agency discretion." For an
example of such unreviewable agency action, see United States v.
George S. Bush & Co., 310 U.S. 371 (1940) (action by the Presi-
dent under section 336 (c) of the Tariff Act "if in his judgment"
such action is necessary). More broadly, there are many statutory
provisions which merely authorize agencies to make loans; under
such statutes, the agencies' discretion is usually so complete that
the refusal to make a loan is not reviewable under section 10 or
4 As S. 7 was introduced in the Senate in January 1945, the introductory phrase
of section 10 read "Except (1) so far as statutes ezpressly preclude judicial review".
[Italics supplied]. As reported in its present form by the Senate Committee on
the Judiciary, the word "expressly" was omitted. This omission provides strong support
for the conclusion that the courts remain free to deduce from the statutory context of
particular agency action that the Congress intended to preclude judicial review of such
action.

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 ADMINISTRATIVE PROCEDURE ACT 95
any other statute. Also, the refusal by the National Labor Relations
Board to issue a complaint is, as heretofore, an exercise of dis-
cretion unreviewable by the courts. See Jacobsen v. National
Labor Relations Board, 120 F. 2d 96 (C.C.A. 3, 1941), and Senate
Comparative Print of June 1945, p. 19, para. (3) (Sen. Doc.
p. 38). For the same reason, the denial of a petition pursuant
to section 4 (d) of this Act for the issuance, amendment or repeal
of a rule is not subject to judicial review. Sen. Rep. p. 44 (Sen.
Doc. p. 230).
In addition, the introductory clause of section 10 provides a
most important principle of construction for reconciling the pro-
visions of the section with other statutory provisions relating
to judicial review. All of the provisions of section 10 are qualified
by the introductory clause, "Except so far as (1) statutes preclude
judicial review or (2) agency action is by law committed to
agency discretion" [Emphasis supplied]. The emphasized phrase
does not mean that every provision of section 10 is applicable
except where statutes preclude judicial review altogether. Instead,
it reads "Except so far as (1) statutes preclude judicial review",
with the clear result that some other statute, while not precluding
review altogether, will have the effect of preventing the applica-
tion of some of the provisions of section 10. The net effect, clearly
intended by the Congress, is to provide for a dovetailing of the
general provisions of the Administrative Procedure Act with the
particular statutory provisions which the Congress has moulded
for special situations.5 Thus, a civil service employee of the Federal
Government who alleges unlawful removal from office, can obtain
judicial review only of the question of whether the procedures of
the Civil Service Act were followed. Levine v. Farley, 107 F.
2d 186 (App. D.C., 1939), certiorari denied, 308 U.S. 622. In
such a case, the provisions of section 10 (e), for example, relating
to substantial evidence and to review of abuses of discretion,
will not apply.

SECTION 10(a)-RIGHT OF REVIEW

Section 10 (a) provides that "Any person suffering legal
wrong because of any agency action, or adversely affected or ag-
grieved by such action within the meaning of any relevant
5 This conclusion is supported by the following statement in the Senate Comparative
Print, p. 18 (Sen. Doc. p. 36) : "The introductory exceptions state the two present
general or basic situations in which judicial review Is precluded-where (1) the matter
is discretionary or (2) statutes withhold judicial powers," [Italics supplied].

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statute, shall be entitled to judicial review thereof." This state-

ment of the persons entitled to judicial review has occasioned
considerable comment because of the use of the phrase "any person
suffering legal wrong". This phrase was used as one of limita-
tion and not for the purpose of making judicial review available
to anyone adversely affected by governmental action.6 The delicate
problem of the draftsmen was to identify in general terms the
persons who are entitled to judicial review. As so used, "legal
wrong" means such wrong as particular statutes and the courts
have recognized as constituting ground for judicial review.
"Adversely affected or aggrieved" has frequently been used in
statutes to designate the persons who can obtain judicial review of
administrative action.7 The determination of who is "adversely
affected or aggrieved * * * within the meaning of any relevant
statute" has "been marked out largely by the gradual judicial
process of inclusion and exclusion, aided at times by the courts'
judgment as to the probable legislative intent derived from the
spirit of the statutory scheme". Final Report, p. 83; see also pp.
84-85. The Attorney General advised the Senate Committee on
the Judiciary of his understanding that section 10 (a) was a re-
statement of existing law. More specifically he indicated his
understanding that section 10 (a) preserved the rules developed
by the courts in such cases as Alabama Power Co. v. Ickes, 302
U.S. 464 (1938); Massachusetts v. Mellon, 262 U.S. 447 (1923);
The Chicago Junction Case, 264 U.S. 258 (1924) ; Sprunt &
Son v. U. S., 281 U.S. 249 (1930); Perkins v. Lukens Steel Co.,
310 U.S. 113 (1940); and Federal Communications Commission
v. Sanders Brs. Radio Station, 309 U.S. 470 (1940). Sen. Rep. p.
44 (Sen. Doc. p. 230). This construction of section 10 (a) was not
questioned or contradicted in the legislative history.8 Also implied
is the continuing role of the courts in determining, in the context
of constitutional requirements and the particular statutory pat-
tern, who is entitled to judicial review.
SECTION 10(b)-FORM AND VENUE OF ACTION
Section 10(b) provides that "The form of proceeding for
judicial review shall be any special statutory review proceeding
6 Compare original provision of S. 7 as introduced in the Senate:
versely affected by any agency action shall be entitled to judicial review"Any person ad-
thereof in ac-
cordance with this section."
7 See section 9 of the Securities Act (15 U.S.C. 77i), "any person aggrieved";
section 402(b) (2) of the Communications Act (46 U.S.C. 402), "person aggrieved or
whose interests are adversely affected"; section 1006 of the Civil Aeronautics Act (49
U.S.C. 646), "person disclosing a substantial interest in such order".
8 See American Stevedores, Inc. v. Porello, 330 U.S. 446 (1947).

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relevant to the subject matter in any court specified by statute

or, in the absence or inadequacy thereof, any applicable form of
legal action (including actions for declaratory judgments or writs
of prohibitory or mandatory injunction or habeas corpus) in any
court of competent jurisdiction. Agency action shall be subject to
judicial review in civil or criminal proceedings for judicial en-
forcement except to the extent that prior, adequate, and ex-
clusive opportunity for such review is provided by law."
Form of action. Many regulatory statutes provide for judicial
review of agency action by requiring the complaining party to file
with a circuit court of appeals (or with a district court) a written
petition praying that the agency action be modified or set aside;
thereafter, the agency files with the reviewing court a transcript
of the record.9 Under such statutory provisions, the filing of a
petition to modify or set aside agency action will continue to be
the required form of proceeding for judicial review. Similarly,
where agency action is now reviewable pursuant to the Urgent
Deficiencies Act of 1913 (28 U.S.C. 47), the form of proceeding
will consist of suits to enjoino in accordance with the provisions
of that Act.
In the absence of any special statutory review proceedings,
other forms of action, as heretofore found by the courts to be
appropriate in particular situations, will be used. Thus, habeas
corpus proceedings should be used to obtain review of exclu-
sion and deportation orders. U.S. ex rel. Vajtauer v. Commissioner
of Immigration, 273 U.S. 103 (1927). Likewise, an order of the
Postmaster General suspending second-class mailing privileges
may, as before, be tested by a suit to enjoin such action. Hannegan
v. Esquire, Inc., 327 U.S. 146 (1946). In brief, where agency
action is reviewable, but the Congress has not specified the form
of review, the courts will continue to select the appropriate form
of action.
Also, where a special statutory review proceeding is not leg-
ally adequate, the form of proceeding for judicial review will be
"any applicable form of legal action * * * in any court of competent
jurisdiction". The Act does not purport to define "inadequate",
9 See section 5(c) of the Federal Trade Commission Act (15 U.S.C. 45(c)); section 9
of the Securities Act (15 U.S.C. 77i); and section 701 of the Federal Food, Drug and
Cosmetic Act (21 U.S.C. 871(f)).
10 "The expression 'special statutory review' means not only special review proceed-
ings wholly created by statute, but so-called common-law forms referred to and adopted
by other statutes as the appropriate mode of review in given cases." Sen. Rep. p. 26; H.R.
Rep. p. 42 (Sen. Doc. pp. 212, 276).

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and thus leaves to the courts the determination of whether a

particular statutory review proceeding is legally adequate. As
stated by the Attorney General: "if the procedure is inadequate
(i.e., where under existing law a court would regard the special
statutory procedure as inadequate and would grant another form
of relief), then any applicable procedure, such as prohibitory or
mandatory injunction, declaratory judgment, or habeas corpus,
is available". [Emphasis supplied]. Sen. Rep. p. 44 (Sen. Doc.
p. 230). Thus, the Act does not provide any new definition of
"adequate", but rather assumes that the courts will determine
the adequacy of statutory review procedures by the legal stand-
ards which the courts themselves have already developed. See
Myers v. Bethlehem Shipbuilding Corp., 303 U.S. 41, 48 (1938).
Venue. Section 10(b) does not purport to change existing
venue requirements for judicial review. In fact, it specifically re-
fers to review "in any court specified by statute", or "in any court
of competent jurisdiction". In the report of the House Committee,
it is stated that "The section does not alter venue provisions
under existing law, whether in connection with specially pro-
vided statutory review or the so-called nonstatutory or common-
law action variety." H.R. Rep. p. 42 (Sen. Doc. p. 276). See also
Representative Walter's statement to the House, 92 Cong. Rec.
5654 (Sen. Doc. p. 369). Thus, for example, station and
construction licensing orders issued by the Federal Communica-
tions Commission remain reviewable only by the Court of Appeals
for the District of Columbia (47 U.S.C. 402 (b)). More generally,
statutes specifically providing for judicial review in a circuit
court of appeals or a district court often designate the venue by
relation to the matters involved, such as "any circuit court of ap-
peals of the United States in the circuit wherein the unfair labor
practice in question was alleged to have been engaged in or where-
in [the person aggrieved] resides or transacts business, or in the
Court of Appeals of the District of Columbia". (Section 10 (f) of
the National Labor Relations Act)." Such provisions are contin-
ued in effect. So also are the general statutory provisions concern-
ing venue, such as 28 U.S.C. 112 that "no civil suit shall be brought
in any district court against any person by any original process
or proceeding in any other district than that whereof he is
an inhabitant". For the application of this section to suits against
11 For other examples, see 28 U.S.C. 43 for venue of suits to enjoin orders of the
Interstate Commerce Commission, section 1006(b) of the Civil Aeronautics Act (49 U.S.C.
646(b)). and section 21 of the Longshoremen's and Harbor Workers' Compensation Act
(33 U.S.C. 921).

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Government agencies, see Kentucky Natural Gas Corp. v. Public

Service Comm., 28 F. Supp. 509, affirmed 119 F. 2d 417 (C.C.A. 6,
1941) ; and Scientific Mfg. Co. v. Walker, 40 F. Supp. 465 (M.D.
Pa. 1941).
Review in enforcement proceedings. Section 10(b) also pro-
vides that "Agency action shall be subject to judicial review in
civil or criminal proceedings for judicial enforcement except to
the extent that prior, adequate, and exclusive opportunity for
such review is provided by law". In the Committee reports it is
stated that "The provision respecting 'prior, adequate, and ex-
clusive * * * review' in the second sentence is operative only
where statutes, either expressly or as they are interpreted, re-
quire parties to resort to some special statutory form of judicial
review which is prior in time and adequate to the case." [Em-
phasis supplied]. Sen. Rep. p. 27; H.R. Rep. p. 42 (Sen. Doc.
pp. 213, 276). So interpreted, this provision restates existing
law.12 Thus, a statute may either expressly provide for an ex-
clusive method of judicial review which precludes challenge of
agency action in enforcement proceedings, 3 or a court may
conclude from the statutory context that such was the legislative
intention. United States v. Ruzicka, 329 U.S. 287 (1946), inter-
preting the Agricultural Marketing Agreement Act of 1937, is an
excellent example of the latter situation.14 Similarly, section 10 (b)
leaves intact the doctrine of primary jurisdiction developed by
the courts in cases involving the reasonableness of the charges of
carriers and public utilities. See Ambassador, Inc. v. United States,
325 U.S. 317 (1945). It also leaves intact the requirements of the
doctrine of exhaustion of administrative remedies. In many situa-
tions, however, an appropriate method of attacking the validity
of agency action is to set up the alleged invalidity as a defense in
a civil or criminal enforcement proceeding.
The adequacy of an exclusive method for judicial review would
appear to be governed by the same considerations as the courts
would apply in determining the adequacy or inadequacy of a
12 The Senate Committee changed the last phrase of the provision from "provided
by statute" to "provided by law". See also Senate Comparative Print, June 1945, p.
18 (Sen. Doe. p. 37), stating that "The second sentence states the present rule as to
enforcement proceedings." See Representative Walter's statement to the House, 92 Cong.
Rec. 5654 (Sen. Doc. p. 369) : "These provisions summarize the situation as it is now
generally understood. The section does not disturb special proceedings which Congress
has provided, nor does it disturb the venue arrangements under existing law."
13 See section 204(d) of the Emergency Price Control Act of 1942.
14 See also Walling v. Cohen, 48 F. Supp. 859 (E.D. Pa. 1943), affirmed 140 F. 2d
453 (C.C.A. 3, 1944) under the Fair Labor Standards Act, and Piume v. United States,
126 F. 2d 601 (C.C.A. 9, 1942). certiorari denied, 317 U.S. 637, under the Federal Trade
Commission Act.

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statutory review proceeding for the purposes of the first sentence

of section 10 (b). Thus, the use of the word "prior" in the last
sentence of section 10 (b) does not mean that the validity of
agency action may always be challenged collaterally by way of
defense in enforcement proceedings whenever the method of
review specified by the Congress does not result in a judicial
determination as to the validity of such action prior to the
commencement of enforcement proceedings. As indicated above,
the Congress intended section 10 as a whole to be integrated
and reconciled with existing statutory provisions for judicial
review. Specifically, the general principle stated in the last sentence
of section 10 (b) was not regarded by the Congress as an
innovation. Rather, it was said that "The second sentence states
the present rule as to enforcement proceedings." Senate Com-
parative Print, p. 18 (Sen. Doc. p. 37). And further: "These
provisions summarize the situation as it is now generally under-
stood. The section [10 (b) ] does not disturb special proceedings
which Congress has provided, nor does it disturb the venue
arrangements under existing law." Representative Walter, 92
Cong. Rec. 5654 (Sen. Doc. p. 369).
There are many situations in which the invalidity of agency
action may be set up as a defense in enforcement proceedings.
On the other hand, there are special statutory arrangements
under which the Congress has provided for immediate and con-
tinuous enforcement while the exclusive route to judicial review
is by first exhausting an administrative procedure; in such an
agency proceeding, the agency and the parties make a record with
a view toward (a) reconsideration by the agency itself, and (b)
providing an adequate factual record as the basis for judicial
review by a specified court. See United States v. Ruzicka, supra.
There is nothing to indicate that the Congress intended to re-
peal by implication such special statutory arrangements for com-
pliance pending orderly judicial review, or to preclude itself from
making similar arrangements in the future. Similarly, it is be-
lieved that the courts are left free to apply the primary juris-
diction doctrine in enforcement proceedings so as to require
issues relating to the alleged unreasonableness of filed tariffs to
be first presented to the appropriate administrative agency rather
than to an enforcement court. See Ambassador, Inc. v. United
States, supra. In brief, the courts must determine in each case
whether the Congress, by establishing a special review procedure,

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intended to preclude or to permit judicial review of agency action

in enforcement proceedings. And, the extent to which the "op-
portunity" for judicial review prior to the enforcement proceed-
ings has been waived or disregarded by the defendant in those
proceedings must also be considered.

SECTION 10(c) -REVIEWABLE ACTS

The provisions of this subsection defining agency action sub-
ject to judicial review are said to "involve no departure from the
usual and well understood rules of procedure in this field". Repre-
sentative Walter, 92 Cong. Rec. 5654 (Sen. Doc. p. 369) ; Sen. Rep.
p. 44 (Sen. Doc. p. 230).
First, it is provided that "Every agency action made reviewable
by statute and every final agency action for which there is no
other adequate remedy in any court shall be subject to judicial
review." Many statutes specifically provide for judicial review
of particular agency action, and such action will continue to be
reviewable. The second category, "and every final agency action
for which there is no other adequate remedy in any court", must
be interpreted in the light of other statutory and case law. To
begin with, of course, it does not make reviewable agency action
as to which "(1) statutes preclude judicial review or (2) agency
action is by law committed to agency discretion." Furthermore,
this provision does not provide additional judicial remedies in
situations where the Congress has provided special and adequate
review procedures. See the first clause of section 10 (b). Thus,
the Customs Court and the Court of Customs and Patent Appeals
retain their present exclusive jurisdictions."'
"Agency action", as used in section 10, is defined in section
2 (g) as including "the whole or part of every agency rule, order,
license, sanction, relief, or the equivalent or denial thereof, or
failure to act." Sen. Rep. p. 11; H.R. Rep. p. 21 (Sen. Doc. pp.
197, 255). While "final", as used to designate reviewable agency
action, is not defined in the Act, its meaning may be gleaned from
the second and third sentences of section 10(c). Moreover, many
regulatory statutes, either expressly or as they are interpreted,
have provided for review of (and only of) "final" agency orders,
with the result that the judicial construction of such provisions
15 In the Attorney General's memorandum to the Senate Committee, he stated
that " 'Courts' includes the Tax Court. Court of Customs and Patent Appeals, the Court
of Claims, and similar courts. This act does not apply to their procedure nor affect the
requirement of resort thereto." Sen. Rep. p. 88 (Sen. Doc. p. 224).

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will carry over to the interpretation of "final" as used in section

10 (b). See Rochester Telephone Corp. v. United States, 307 U.S.
125 (1939).
Since "agency action" is defined to include "rule", the ques-
tion arises as to whether the phrase, "final agency action for which
there is no other adequate remedy in any court", provides for
direct judicial review of all rules. Many statutes which give rule
making powers (particularly rules of general applicability) to
agencies make no provision for judicial review of such rules.
The validity of such rules has generally been open to challenge in
proceedings for their enforcement. In addition, it has been sug-
gested that in appropriate circumstances, review could be obtained
in proceedings under the Declaratory Judgment Act (28 U.S.C.
400). It is clear from the legislative history that section 10(c)
was not intended to provide for judicial review in the abstract
of all rules. Representative Walter stated to the House that "The
provisions of this [sub] section are technical but involve no de-
parture from the usual and well understood rules of procedure
in this field." 92 Cong. Ree. 5654 (Sen. Doc. p. 369). Also,
during the Senate Hearings in 1941, the subect of judicial
review of rules was thoroughly discussed. Two of the bills then
pending provided for direct judicial review of rules by declaratory
judgment proceedings. (See S. 674 and S. 918). The inclusion
of such a provision was strongly advocated by a minority of
the Attorney General's Committee on Administrative Procedure
who stated that their purpose was-
to adapt declaratory judgment procedure to this special subject. The
minority feels that it is unnecessary and unwise to provide for court re-
view (except where otherwise required by particular statutes) of rules in
the abstract. On the other hand, such review upon the application of the
rule to a particular person, or upon accepted principles of declaratory
judgment, should be expressly recognized. In his letter accompanying the
veto of the Logan-Walter bill, the Attorney General stated that-
under the Declaratory Judgments Act of 1934, any person may now
obtain a judgment as to the validity of such administrative rules,
if he can show such an interest and present injury therefrom as to
constitute a "case or controversy."
However, the Declaratory Judgments Act does not altogether fit the
subject and needs some limitation (not, it may be noted, extension) to
care for the determination of fact issues, since under the Declaratory
Judgments Act juries determine the facts under instructions from the
presiding judge. In adapting declaratory judgment procedure to this
field, some special provision must be made for the determination of
facts, for otherwise the facts in the first instance would be determined
through judicial rather than administrative process. (Senate Hearings
(1941) pp. 1344, 1886.)
In other words, even the proponents of detailed provisions for
judicial review of rules did not intend to prescribe an abstract form

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of review going far beyond the limitations of the Declaratory

Judgment Act. Thus, it is fair to conclude that the general state-
ment in the first sentence of section 10(c) was not intended to
achieve such a result.
The second sentence of section 10(c) provides that "Any
preliminary, procedural, or intermediate agency action or ruling
not directly reviewable shall be subject to review upon the re-
view of the final agency action." This language was designed "to
negative any intention to make reviewable merely preliminary or
procedural orders where there is a subsequent and adequate
remedy at law available, as is presently the rule." Senate Com-
parative Print, June 1945, p. 1916 (Sen. Doc. p. 37). For ex-
ample, intermediate orders such as orders setting matters for
hearing are not reviewable either directly (Federal Power
Commission v. MetropolitanEdison Co., 304 U.S. 375 (1938)) or
collaterally, as by suits for injunction (Myers v. Bethlehem Ship-
building Corp., 303 U.S. 41 (1938)) or declaratory judgment
(Macauley v. Waterman S. S. Co., 327 U.S. 540 (1946); Federal
Power Commission v. Arkansas Power & Light Co., per curiam,
330 U. S. 802 (1947)). The provision for review of such ques-
tions as a part of the review of final agency action restates
existing practice. See section 10(e) (4).
Section 10(c) further provides that "Except as otherwise
expressly required by statute, agency action otherwise final shall
be final for the purposes of this subsection whether or not there
has been presented or determined any application for a declaratory
order, for any form of reconsideration, or (unless the agency
otherwise requires by rule and provides that the action mean-
while shall be inoperative) for an appeal to superior agency au-
thority." This provision, together with the preceding sentence
of the subsection, embodies the doctrine of exhaustion of adminis-
trative remedies. H.R. Rep. p. 55, fn. 21 (Sen. Doe. p. 289).
Agency action which is finally operative and decisive is review-
able. On the other hand, "Action which is automatically stayable
on further proceedings invoked by a party is not final." H.R.
Rep. p. 43 (Sen. Doc. p. 277).
It is specifically provided that agency action otherwise final
is final for the purposes of the subsection notwithstanding a
party's failure to apply for any form of agency reconsideration
(reopening, rehearing, etc.), unless a statute expressly requires
16 See Final Report, pp. 85-86.

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an application for such reconsideration as a prerequisite to

judicial review. Under statutes such as the Federal Power Act
(16 U.S.C. 791, 8251) and the Natural Gas Act (15 U.S.C. 717r)
which expressly require that such reconsideration be sought,
the filing of an application for reconsideration will continue to be
a condition precedent to judicial review. In addition, it would
seem that under the common statutory provision that no objec-
tion to agency action not urged before the agency shall be con-
sidered by the courts, an application for agency reconsideration
remains a prerequisite to obtaining judicial review of such an
objection. See 15 U.S.C. 77(i) and 49 U.S.C. 646(e). However,
under a statute which merely confers upon parties the right to
apply for rehearing, it is now clear that an application for such
reconsideration need not precede judicial review. See generally,
as to the effect of agency rules in this field, Levers v. Anderson,
326 U.S. 219 (1945).
The last clause of section 10(c) relates to two situations.
First, pursuant to section 8 (a), an agency may permit its hearing
examiners to make initial decisions which will become the agency's
final decisions in the absence of an appeal to or review by the
agency. The last clause of section 10(c) permits an agency to
require by rule that in such cases parties who are dissatisfied with
the "initial" decisions of hearing officers must appeal to the agency
before seeking judicial review, but only if the agency further pro-
vides that the hearing officers' decisions shall be inoperative pend-
ing such administrative appeals. Thus, an agency with licensing
powers may by rule require a party to appeal to it from an initial
decision of a hearing officer only if, for example, the license
suspension or revocation determined upon by the hearing officer is
held in abeyance pending the agency's action on the appeal. Sen.
Rep. p. 27; H.R. Rep. pp. 43, 55, fn. 21 (Sen. Doc. pp. 213, 277,
289).
The second and similar application of the last clause of section
10 (c) relates to appeals from agency decisions to a superior
agency authority. For example, under some circumstances, it
would seem that a bureau or other subdivision within an agency
may itself be the agency with respect to a particular function.
In such a situation, it may be desired to require appeal from the
bureau's decision to the department head or other "superior
agency authority" as a prerequisite to judicial review. Under
section 10 (c), such a requirement may be imposed, but only, as

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in the case of required appeals from hearing officers' initial de-

cisions, if the agency's decision is inoperative pending such ap-
peal. Sen. Rep. p. 27; H.R. Rep. p. 43 (Sen. Doc. pp. 213, 277).
The requirement that agency action be inoperative pending
required appeals to the agency or to superior agency authority
does not require the agency to take positive action for the benefit
of an applicant. It was not intended to require the issuance of
licenses or the payment of benefits in any case where an agency
requires that the denial of licenses or benefits be appealed to it
or to superior agency authority as a prerequisite to judicial
review.17

SECTION 10(d) -INTERIM RELIEF

Section 10(d) provides that "Pending judicial review any
agency is authorized, where it finds that justice so requires, to
postpone the effective date of any action taken by it. Upon such
conditions as may be required and to the extent necessary to
prevent irreparable injury, every reviewing court (including
every court to which a case may be taken on appeal from or upon
application for certiorari or other writ to a reviewing court) is
authorized to issue all necessary and appropriate process to
postpone the effective date of any agency action or to preserve
status or rights pending conclusion of the review proceedings."
The first sentence of the subsection is a restatement of exist-
ing law.
The second sentence of section 10(d) confers upon every
"reviewing court" discretionary authority to stay agency action
pending judicial review "to the extent necessary to prevent ir-
reparable injury." The function of such a power is, as heretofore,
to make judicial review effective. Sen. Rep. p. 27; H.R. Rep. p. 43
(Sen. Doc. pp. 213, 277). Scripps-Howard Radio, Inc. v. Federal
Communications Commission, 316 U.S. 4 (1942). The subsection
does not permit a court to order the grant of an initial license
pending judicial review of an agency's denial of such a license.
Sen. Rep. p. 27; H.R. Rep. p. 43 (Sen. Doc. pp. 213, 277). By
the same logic, the subsection does not give to reviewing courts
the power to order interim payment of grants or benefits the de-
nial of which is the subject of review.
17 This conclusion is corollary to the following statement made with respect to
section 10(d) : "This section permits either agencies or courts, if the proper showing be
made, to maintain the status quo. While It would not permit a court to grant an Initial
license, It provides Intermediate Judicial relief for every other situation in order to make
judicial review effective." Sen. Rep. p. 27, H.R. Rep. p. 43 (Sen. Doc. pp. 213, 277).

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The stay power conferred upon reviewing courts is to be

exercised only "to the extent necessary to prevent irreparable
injury." In other words, irreparable injury, the historic condi-
tion of equity jurisdiction, is the indispensable condition to the
exercise of the power conferred by section 10 (d) upon reviewing
courts. Sen. Rep. p. 44 (Sen. Doc. p. 230). Mere maintenance of
the status quo for the convenience of parties pending judicial
review of agency action will not be adequate ground for the
exercise of this stay power.18
This power to stay agency action is an equitable power, to
be exercised "upon such conditions as may be required." Section
10(d) does not require the issuance of stay orders automatically
upon a showing of irreparable damage. As in the past, reviewing
courts may "balance the equities" in determining whether to
postpone the effective date of agency action. Thus, "In determin-
ing whether agency action should be postponed, the court should
take into account that persons other than parties may be adversely
affected by such postponement and in such cases the party seeking
postponement may be required to furnish security to protect such
other persons from loss resulting from postponement." H.R. Rep.
p. 43 (Sen. Doc. p. 277). More broadly, it is clear that a reviewing
court in exercising this power may do so under such conditions
as the equities of the situation may require.
The "reviewing court" in which section 10 (d) vests the
power to stay agency action is the court, and only that court,
which has obtained jurisdiction to review the final agency action
in accordance with subsections (b) and (c) and the applicable pro-
visions of particular statutes. 9 Section 10 (d) confers no power
upon a court in advance of the submission to it of final agency
action for review on the merits. See Federal Power Commission
v. Metropolitan Edison Co., 304 U.S. 375, 383 (1938). This is the
only logical conclusion to be drawn from the employment of the
phrase "reviewing court", rather than "any court." Any other
construction would twist section 10(d) into a general grant
of power to the Federal courts to review all kinds of questions pre-
sented by preliminary and intermediate agency action. The
specific provisions of section 10 (c) defining reviewable action
negate such a result. The legislative history of section 10 (d) is
18 This distinction and the Congressional intent with respect to it are clearly Illustrated
by the fact that when S. 7 was introduced in the Senate. it read: "to the extent necessary to
preserve status or rights, afford an opportunity for judicial review of any question of law
or prevent irreparable injury." [Emphasis supplied]
19 This was the holding in Avon Dairy Company v. isaman, 69 F. Supp. 500 (N.
D. Ohio, 1946).

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equally persuasive; as S. 7 was introduced in the Senate, section

10(d) provided for its exercise "to the extent necessary to * * *
afford an opportunity for judicial review of any question of law
or prevent irreparable injury." The italicized language was
dropped by the Senate Committee, which reported the subsection
in its present form. Finally, section 10(d) provides that the re-
viewing court may "issue all necessary and appropriate process
to postpone the effective date of any agency action or to preserve
status or rights pending conclusion of the review proceedings."
[Emphasis supplied]. The italicized language is conclusive
that the stay power conferred by the subsection is only ancil-
lary to review proceedings-proceedings in which the court is
reviewing final agency action within the meaning of section 10(c).
Section 10(d) prescribes no procedure for the exercise of
the power which it confers upon reviewing courts to postpone the
effective date of agency action. Section 381 of Title 28, U.S.
Code,20 contains general procedural provisions governing the
issuance of preliminary injunctions and restraining orders.
Since these procedural provisions are in no way inconsistent with
section 10(d), they appear to be applicable to the exercise of the
power conferred by that subsection. Similarly, the provisions of
the Urgent Deficiencies Act (28 U.S.C. 47), governing the pro-
cedure for the issuance of interlocutory injunctions and tempor-
ary stays, remain applicable in proceedings for judicial review
under that Act.
SECTION 10(e)-SCOPE OF REVIEW
The scope of judicial review is defined in section 10(e) as
follows:
So far as necessary to decision and where presented the reviewing
court shall decide all relevant questions of law, interpret constitu-
tional and statutory provisions, and determine the meaning or appli-
cability of the terms of any agency action. It shall (A) compel agency
action unlawfully withheld or unreasonably delayed; and (B) hold
unlawful and set aside agency action, findings, and conclusions found
to be (1) arbitrary, capricious, an abuse of discretion, or otherwise
not in accordance with law; (2) contrary to constitutional right,
power, privilege, or immunity; (3) in excess of statutory jurisdiction,
authority, or limitations, or short of statutory right; (4) without ob-
servance of procedure required by law; (5) unsupported by substan-
tial evidence in any case subject to the requirements of sections 7 and
8 or otherwise reviewed on the record of an agency hearing provided
by statute; or (6) unwarranted by the facts to the extent that the
facts are subject to trial de novo by the reviewing court. In making
the foregoing determinations the court shall review the whole record
or such portions thereof as may be cited by any party, and due ac-
count shall be taken of the rule of prejudicial error.
20 See also Rule 65 of the Federal Rules of Civil Procedure.

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This restates the present law as to the scope of judicial review.

Senate Comparative Print, June 1945, p. 2021 (Sen. Doc. p. 39) ;
House Hearings (1945) pp. 37-38 (Sen. Doc. pp. 83-84); Sen.
Rep. pp. 38, 43, 44 (Sen. Doc. pp. 224, 229, 230).
Clause (A) authorizing a reviewing court to "compel agency
action unlawfully withheld or unreasonably delayed", appears
to be a particularized restatement of existing judicial practice
under section 262 of the Judicial Code (28 U.S.C. 377). Safeway
Stores, Inc. v. Brown, 138 F. 2d 278 (E.C.A., 1943), certiorari
denied, 320 U.S. 797. The power thus stated is vested in "the
reviewing court", which, in this context, would seem to be the
court which has or would have jurisdiction to review the final
agency action. See Roche v. Evaporated Milk Ass'n., 319 U.S. 21,
25 (1943). Orders in the nature of a writ of mandamus have been
employed to compel an administrative agency to act, Safeway
Stores, Inc. v. Brown, supra, or to assume jurisdiction, Interstate
Commerce Commission v. United States ex rel. Humboldt Steam-
ship Co., 224 U.S. 474 (1912), or to compel an agency or officer
to perform a ministerial or non-discretionary act. Clause (A) of
section 10(e) was apparently intended to codify these judicial
functions.
Obviously, the clause does not purport to empower a court
to substitute its discretion for that of an administrative agency
and thus exercise administrative duties. In fact, with respect to
constitutional courts, it could not do so. Keller v. Potomac Electric
Power Co., 261 U.S. 428 (1923); Postum Cereal Co. v. Calif-
fornia Fig Nut Co., 272 U.S. 693 (1927); Federal Radio Com-
mission v. General Electric Co., 281 U.S. 464 (1930). However,
as in Safeway Stores v. Brown, supra, a court may require an
agency to take action upon a matter, without directing how it
shall act.
The numbered clauses of section 10(e) (B) restate the scope
of the judicial function in reviewing final agency action. Sen.
Rep. p. 44 (Sen. Doc. p. 230); Senate Hearings (1941) pp. 1150,
1351, 1400, 1437. Courts having jurisdiction have always exer-
cised the power in appropriate cases to set aside agency action
which they found to be "(1) arbitrary, capricious, an abuse of
discretion, or otherwise not in accordance with law; (2) con-
trary to constitutional right, power, privilege, or immunity; (3)
in excess of statutory jurisdiction, authority, or limitations, or
21 "Subsection (e), therefore, seeks merely to restate the several categories of law
subject to judicial review."

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short of statutory right; (4) without observance of procedure

required by law."
Clause (5) directs reviewing courts to "hold unlawful and
set aside agency action, findings, and conclusions found to be * * *
unsupported by substantial evidence in any case subject to the
requirements of sections 7 and 8 or otherwise reviewed on the
record of an agency hearing provided by statute." This is a
general codification of the substantial evidence rule which, either
by statute or judicial rule, has long been applied to the review of
Federal administrative action. Consolidated Edison Co. v. Na-
tional Labor Relations Board, 305 U.S. 197 (1938) ; National
Labor Relations Board v. Remington Rand, 94 F. 2d 862 (C.C.A.
2, 1938). It will be noted that this codified substantial evidence
rule is made applicable not only to cases governed by sections 7
and 8, but also to those types of cases in which statutes provide
for agency hearings, but which are exempted from sections
7 and 8 by the introductory clause of section 5.
As to clause (6), the legislative history has resulted in mis-
understanding. As S. 7 was introduced in the Senate, clause (6)
was followed by a provision that "The relevant facts shall be
tried and determined de novo by the original court of review in
all cases in which adjudications are not required by statute to be
made upon agency hearing." When S. 7 was reported by the
Senate Committee, the quoted provision was omitted. Notwith-
standing, the subsequent legislative history contains repeated
statements to the effect that clause (6) embodies the "established
rule * * * [which requires a judicial] trial de novo to establish the
relevant facts as to the applicability of any rule and as to the
propriety of adjudications where there is no statutory adminis-
trative hearing." Senate Comparative Print, June 1945, p. 20
(Sen. Doc. pp. 39-40) ; H.R. Rep. p. 45 (Sen. Doc. p. 279).
To the contrary, the language of clause (6), "to the extent
that the facts are subject to trial de novo by the reviewing court",
obviously refers only to those existing situations in which judicial
review has consisted of a trial de novo. For example, reparation
orders under the Interstate Commerce Act and the Packers and
Stockyards Act have only prima facie weight and are thus re-
viewable de novo. In addition, there is no "established rule" re-
quiring a judicial trial de novo wherever statutes fail to require
an agency hearing. Thus, in deportation (8 U.S.C. 155) and mail
fraud (39 U.S.C. 259) cases, hearings are held as a matter of

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due process although the statutes do not require agency hearings.

In both types of cases, the judicial review of agency action has
consisted of a review of the record made in the agency pro-
ceeding to determine whether the agency action is supported by
evidence.22 Accordingly, since clause (6) of section 10(e) pre-
scribes a judicial trial de novo only in situations where other
statutes or the courts have prescribed such review, it is clear
that deportation and mail fraud orders will continue to be re-
viewable on the record made in the agency hearing, even though
such hearing is not required by statute. Also, in National Broad-
casting Company v. United States, 319 U.S. 190, 227 (1943), it
was held that a trial de novo was not appropriate where, prior to
the issuance of general regulations, the agency conducted a formal
hearing although not required by statute to do so.
Finally, section 10 (e) provides that "In making the foregoing
determinations the court shall review the whole record or such
portions thereof as may be cited by any party, and due account
shall be taken of the rule of prejudicial error." This appears to
restate existing law. Specifically, the phrase "whole record"
was not intended to require reviewing courts to weigh the evi-
dence and make independent findings of fact; rather, it means
that in determining whether agency action is supported by sub-
stantial evidence, the reviewing court should consider all of the
evidence and not merely the evidence favoring one side. Senate
Hearings (1941) p. 1359.
The last phrase of section 10 (e) sums up in succinct fashion
the "harmless error" rule applied by the courts in the review of
lower court decisions as well as of administrative bodies, namely,
that errors which have no substantial bearing on the ultimate
rights of the parties will be disregarded. Market Street Ry. v.
Comm'n., 324 U.S. 548, 561-2 (1945).
22 Vajtauer v. Commissioner, 273 U.S. 103, 106 (1927) and Bridges v. Wizon. 826
U.S. 135, 149 (1945) (deportation). In deportation proceedings, a judicial trial do novo
may be had on the issue of citizenship. Kessler v. Strecker, 307 U.S. 22, 35 (1939). See
Farley v. Simmons, 99 F. 2d 343, 847 (App. D.C. 1938) certiorari denied, 805 U.S. 651,
for review of mail fraud orders; also Senate Hearings, (1941) p. 59.

THE END

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APPENDIX A

[PUBLIC LAW 404-79TH CONGRESS]

[CHAPTER 324--2D SESSION]
[S. 7]
AN ACT
To improve the administration of justice by prescribing fair administrative
procedure.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,

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

DEFINITIONS
SEC. 2. As used in this Act-
(a) AGENCY.-"Agency" means each authority (whether or
not within or subject to review by another agency) of the Govern-
ment of the United States other than Congress, the courts, or
the governments of the possessions, Territories, or the District
of Columbia. Nothing in this Act shall be construed to repeal
delegations of authority as provided by law. Except as to the
requirements of section 3, there shall be excluded from the oper-
ation of this Act (1) agencies composed of representatives of
the parties or of representatives of organizations of the parties
to the disputes determined by them, (2) courts martial and mil-
itary commissions, (3) military or naval authority exercised in the
field in time of war or in occupied territory, or (4) functions
which by law expire on the termination of present hostilities,
within any fixed period thereafter, or before July 1, 1947, and
the functions conferred by the following statutes: Selective Train-
ing and Service Act of 1940; Contract Settlement Act of 1944;
Surplus Property Act of 1944.
(b) PERSON AND PARTY.-"Person" includes individuals, part-
nerships, corporations, associations, or public or private organi-
zations of any character other than agencies. "Party" includes
any person or agency named or admitted as a party, or properly
seeking and entitled as of right to be admitted as a party, in any

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agency proceeding; but nothing herein shall be construed to pre-

vent an agency from admitting any person or agency as a party
for limited purposes.
(c) RULE AND RULE MAKING.-"Rule" means the whole or any
part of any agency statement of general or particular applicability
and future effect designed to implement, interpret, or prescribe
law or policy or to describe the organization, procedure, or prac-
tice requirements of any agency and includes the approval or
perseription for the future of rates, wages, corporate or financial
structures or reorganizations thereof, prices, facilities, appli-
ances, services or allowances therefor or of valuations, costs, or
accounting, or practices bearing upon any of the foregoing. "Rule
making" means agency process for the formulation, amendment,
or repeal of a rule.
(d) ORDER AND ADJUDICATION.-"Order" means the whole or
any part of the final disposition (whether affirmative, negative,
injunctive, or declaratory in form) of any agency in any matter
other than rule making but including licensing. "Adjudication"
means agency process for the formulation of an order. =

(e) LICENSE AND LICENSING.-"License" includes the whole or

part of any agency permit, certificate, approval, registration,
charter, membership, statutory exemption or other form of per-
mission. "Licensing" includes agency process respecting the grant,
renewal, denial, revocation, suspension, annulment, withdrawal,
limitation amendment, modification, or conditioning of a license.
(f) SANCTION AND RELIEF.-"Sanction" includes the whole or
part of any agency (1) prohibition, requirement, limitation, or
other condition affecting the freedom of any person; (2) with-
holding of relief; (3) imposition of any form of penalty or fine;
(4) destruction, taking, seizure, or withholding of property; (5)
assessment of damages, reimbursement, restitution, compensation,
costs, charges, or fees; (6) requirement, revocation, or suspension
of a license; or (7) taking of other compulsory or restrictive
action. "Relief" includes the whole or part of any agency (1)
grant of money, assistance, license, authority, exemption, ex-
ception, privilege, or remedy; (2) recognition of any claim, right,
immunity, privilege, exemption, or exception; or (3) taking of
any other action upon the application or petition of, and bene-
ficial to, any person.
(g) AGENCY PROCEEDING AND ACTION.-"Agency proceeding"
means any agency process as defined in subsections (c), (d), and

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(e) of this section. "Agency action" includes the whole or part of
every agency rule, order, license, sanction, relief, or the equivalent
or denial thereof, or failure to act.

PUBLIC INFORMATION
SEC. 3. Except to the extent that there is involved (1) any
function of the United States requiring secrecy in the public
interest or (2) any matter relating solely to the internal manage-
ment of an agency-
(a) RULES.-Every agency shall separately state and cur-
rently publish in the Federal Register (1) descriptions of its
central and field organization including delegations by the agency
of final authority and the established places at which, and methods
whereby, the public may secure information or make submittals or
requests; (2) statements of the general course and method by
which its functions are channeled and determined, including the
nature and requirements of all formal or informal procedures
available as well as forms and instructions as to the scope and
contents of all papers, reports, or examinations; and (3) sub-
stantive rules adopted as authorized by law and statements of
general policy or interpretations formulated and adopted by the
agency for the guidance of the public, but not rules addressed to
and served upon named persons in accordance with law. No
person shall in any manner be required to resort to organization
or procedure not so published.
(b) OPINIONS AND ORDERS.-Every agency shall publish or, in
accordance with published rule, make available to public inspec-
tion all final opinions or orders in the adjudication of cases (ex-
cept those required for good cause to be held confidential and not
cited as precedents) and all rules.
(c) PUBLIC RECORDS.-Save as otherwise required by statute,
matters of official record shall in accordance with published rule
be made available to persons properly and directly concerned ex-
cept information held confident'al for good cause found.

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

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(a) NOTIcE.-General notice of proposed rule making shall

be published in the Federal Register (unless all persons subject
thereto are named and either personally served or otherwise have
actual notice thereof in accordance with law) and shall include
(1) a statement of the time, place, and nature of public rule
making proceedings; (2) reference to the authority under which
the rule is proposed; and (3) either the terms or substance of the
proposed rule or a description of the subjects and issues involved.
Except where notice or hearing is required by statute, this sub-
section shall not apply to interpretative rules, general statements
of policy, rules of agency organization, procedure, or practice,
or in any situation in which the agency for good cause finds (and
incorporates the finding and a brief statement of the reasons
therefor in rules issued) that notice and public procedure thereon
are impracticable, unnecessary, or contrary to the public interest.
(b) PROCEDURES.-After notice required by this section, the
agency shall afford interested persons an opportunity to partici-
pate in the rule making through submission of written data, views,
or arguments with or without opportunity to present the same
orally in any manner; and, after consideration of all relevant
matter presented, the agency shall incorporate in any rules adopted
a concise general statement of their basis and purpose. Where
rules are required by statute to be made on the record after
opportunity for an agency hearing, the requirements of sections
7 and 8 shall apply in place of the provisions of this subsection.
(c) EFFECTIVE DATES.-The required publication or service of
any substantive rule (other than one granting or recognizing ex-
emption or relieving restriction or interpretative rules and state-
ments of policy) shall be made not less than thirty days prior to
the effective date thereof except as otherwise provided by the
agency upon good cause found and published with the rule.
(d) PETITIONs.-Every agency shall accord any interested
person the right to petition for the issuance, amendment, or
repeal of a rule.

ADJUDICATION
SEC. 5. In every case of adjudication required by statute to be
determined on the record after opportunity for an agency hear-
ing, except to the extent that there is involved (1) any matter
subject to a subsequent trial of the law and the facts de novo in
any court; (2) the selection or tenure of an officer or employee of

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the United States other than examiners appointed pursuant to

section 11; (3) proceedings in which decisions rest solely on in-
spections, tests, or elections; (4) the conduct of military, naval,
or foreign affairs functions; (5) cases in which an agency is acting
as an agent for a court; and (6) the certification of employee
representatives-
(a) NOTICE.-Persons entitled to notice of an agency hearing
shall be timely informed of (1) the time, place, and nature thereof;
(2) the legal authority and jurisdiction under which the hearing
is to be held; and (3) the matters of fact and law asserted. In
instances in which private persons are the moving parties, other
parties to the proceeding shall give prompt notice of issues con-
troverted in fact or law; and in other instances agencies may by
rule require responsive pleading. In fixing the times and places
for hearings, due regard shall be had for the convenience and
necessity of the parties or their representatives.
(b) PROCEDURE.-The agency shall afford all interested parties
opportunity for (1) the submission and consideration of facts,
arguments, offers of settlement, or proposals of adjustment where
time, the nature of the proceeding, and the public interest permit,
and (2) to the extent that the parties are unable so to determine
any controversy by consent, hearing, and decision upon notice
and in conformity with sections 7 and 8.
(c) SEPARATION OF FUNCTIONS.-The same officers who preside
at the reception of evidence pursuant to section 7 shall make the
recommended decision or initial decision required by section 8
except where such officers become unavailable to the agency. Save
to the extent required for the disposition of ex parte matters as
authorized by law, no such officer shall consult any person or party
on any fact in issue unless upon notice and opportunity for all
parties to participate; nor shall such officer be responsible to or
subject to the supervision or direction of any officer, employee, or
agent engaged in the performance of investigative or prosecuting
functions for any agency. No officer, employee, or agent engaged
in the performance of investigative or prosecuting functions for
any agency in any case shall, in that or a factually related case,
participate or advise in the decision, recommended decision, or
agency review pursuant to section 8 except as witness or counsel
in public proceedings. This subsection shall not apply in determin-
ing applications for initial licenses or to proceedings involving
the validity or application of rates, facilities, or practices of public
utilities or carriers; nor shall it be applicable in any manner to

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the agency or any member or members of the body comprising

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

ANCILLARY MATTERS
SEC. 6. Except as otherwise provided in this Act-
(a) APPEARANCE.-Any person compelled to appear in person
before any agency or representative thereof shall be accorded the
right to be accompanied, represented, and advised by counsel or,
if permitted by the agency, by other qualified representative.
Every party shall be accorded the right to appear in person or by
or with counsel or other duly qualified representative in any agency
proceeding. So far as the orderly conduct of public business per-
mits, any interested person may appear before any agency or its
responsible officers or employees for the presentation, adjustment,
or determination of any issue, request, or controversy in any
proceeding (interlocutory, summary, or otherwise) or in con-
nection with any agency function. Every agency shall proceed with
reasonable dispatch to conclude any matter presented to it except
that due regard shall be had for the convenience and necessity of
the parties or their representatives. Nothing herein shall be con-
strued either to grant or to deny to any person who is not a lawyer
the right to appear for or represent others before any agency or in
any agency proceeding.
(b) INVESTIGATIONS.-No process, requirement of a report,
inspection, or other investigative act or demand shall be issued,
made, or enforced in any manner or for any purpose except as
authorized by law. Every person compelled to submit data or
evidence shall be entitled to retain or, on payment of lawfully
prescribed costs, procure a copy or transcript thereof, except
that in a nonpublic investigatory proceeding the witness may for
good cause be limited to inspection of the official transcript of his
testimony.
(c) SUBPENAS.-Agency subpenas authorized by law shall be
issued to any party upon request and, as may be required by rules
of procedure, upon a statement or showing of general relevance
and reasonable scope of the evidence sought. Upon contest the
court shall sustain any such subpena or similar process or demand

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to the extent that it is found to be in accordance with law and, in

any proceeding for enforcement, shall issue an order requiring
the appearance of the witness or the production of the evidence
or data within a reasonable time under penalty of punishment for
contempt in case of contumacious failure to comply.
(d) DENIALS.-Prompt notice shall be given of the denial in
whole or in part of any written application, petition, or other re-
quest of any interested person made in connection with any
agency proceeding. Except in affirming a prior denial or where
the denial is self-explanatory, such notice shall be accompanied
by a simple statement of procedural or other grounds.

HEARINGS
SEC. 7. In hearings which section 4 or 5 requires to be con-
ducted pursuant to this section-
(a) PRESIDING OFFICERS.-There shall preside at the taking of
evidence (1) the agency, (2) one or more members of the body
which comprises the agency, or (3) one or more examiners ap-
pointed as provided in this Act; but nothing in this Act shall be
deemed to supersede the conduct of specified classes of proceedings
in whole or part by or before boards or other officers specially
provided for by or designated pursuant to statute. The functions
of all presiding officers and of officers participating in decisions
in conformity with section 8 shall be conducted in an impartial
manner. Any such officer may at any time withdraw if he deems
himself disqualified; and, upon the filing in good faith of a timely
and sufficient affidavit of personal bias or disqualification of any
such officer, the agency shall determine the matter as a part of
the record and decision in the case.
(b) HEARING PowERS.-Officers presiding at hearings shall
have authority, subject to the published rules of the agency and
within its powers, to (1) administer oaths and affirmations, (2)
issue subpenas authorized by law, (3) rule upon offers of proof
and receive relevant evidence, (4) take or cause depositions to be
taken whenever the ends of justice would be served thereby, (5)
regulate the course of the hearing, (6) hold conferences for the
settlement or simplification of the issues by consent of the parties,
(7) dispose of procedural requests or similar matters, (8) make
decisions or recommend decisions in conformity with section 8,
and (9) take any other action authorized by agency rule consistent
with this Act.

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(c) EVIDENCE.-Except as statutes otherwise provide, the pro-

ponent of a rule or order shall have the burden of proof. Any oral
or documentary evidence may be received, but every agency shall
as a matter of policy provide for the exclusion of irrevelant im-
material, or unduly repetitious evidence and no sanction shall be
imposed or rule or order be issued except upon consideration of
the whole record or such portions thereof as may be cited by any
party and as supported by and in accordance with the reliable,
probative, and substantial evidence. Every party shall have the
right to present his case or defense by oral or documentary evi-
dence, to submit rebuttal evidence, and to conduct such cross-
examination as may be required for a full and true disclosure of
the facts. In rule making or determining claims for money or
benefits or applications for initial licenses any agency may, where
the interest of any party will not be prejudiced thereby, adopt
procedures for the submission of all or part of the evidence in
written form.
(d) REcoRD.-The transcript of testimony and exhibits, to-
gether with all papers and requests filed in the proceeding, shall
constitute the exclusive record for decision in accordance with
section 8 and, upon payment of lawfully prescribed costs, shall be
made available to the parties. Where any agency decision rests on
official notice of a material fact not appearing in the evidence in
the record, any party shall on timely request be afforded an oppor-
tunity to show the contrary.

DECISIONS
SEc. 8. In cases in which a hearing is required to be conducted
in conformity with section 7-
(a) ACTION BY SUBORDINATES.-In cases in which the agency
has not presided at the reception of the evidence, the officer who
presided (or, in cases not subect to subsection (c) of section 5,
any other officer or officers qualified to preside at hearings pursuant
to section 7) shall initially decide the case or the agency shall
require (in specific cases or by general rule) the entire record to be
certified to it for initial decision. Whenever such officers make the
initial decision and in the absence of either an appeal to the agency
or review upon motion of the agency within time provided by rule,
such decision shall without further proceedings then become the
decision of the agency. On appeal from or review of the initial
decisions of such officers the agency shall, except as it may limit

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the issues upon notice or by rule, have all the powers which it
would have in making the initial decision. Whenever the agency
makes the initial decision without having presided at the reception
of the evidence, such officers shall first recommend a decision
except that in rule making or determining applications for initial
licenses (1) in lieu thereof the agency may issue a tentative
decision or any of its responsible officers may recommend a deci-
sion or (2) any such procedure may be omitted in any case in
which the agency finds upon the record that due and timely execu-
tion of its functions imperatively and unavoidably so requires.
(b) SUBMITTALS AND DECISIONS.-Prior to each recommended,
initial, or tentative decision, or decision upon agency review of
the decision of subordinate officers the parties shall be afforded a
reasonable opportunity to submit for the consideration of the
officers participating in such decisions (1) proposed findings and
conclusions, or (2) exceptions to the decisions or recommended
decisions of subordinate officers or to tentative agency decisions,
and (3) supporting reasons for such exceptions or proposed find-
ings or conclusions. The record shall show the ruling upon each
such finding, conclusion, or exception presented. All decisions
(including initial, recommended, or tentative decisions) shall
become a part of the record and include a statement of (1) findings
and conclusions, as well as the reasons or basis therefor, upon
all the material issues of fact, law, or discretion presented on the
record; and (2) the appropriate rule, order, sanction, relief, or
denial thereof.

SANCTIONS AND POWERS

SEC. 9. In the exercise of any power or authority-
(a) IN GENERAL.-No sanction shall be imposed or substantive
rule or order be issued except within jurisdiction delegated to the
agency and as authorized by law.
(b) LICENSES.-In any case in which application is made for a
license required by law the agency, with due regard to the rights
or privileges of all the interested parties or adversely affected
persons and with reasonable dispatch, shall set and complete any
proceedings required to be conducted pursuant to sections 7 and 8
of this Act or other proceedings required by law and shall make
its decision. Except in cases of willfulness or those in which public
health, interest, or safety requires otherwise, no withdrawal,
suspension, revocation, or annulment of any license shall be lawful

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unless, prior to the institution of agency proceedings therefor,
facts or conduct which may warrant such action shall have been
called to the attention of the licensee by the agency in writing and
the licensee shall have been accorded opportunity to demonstrate
or achieve compliance with all lawful requirements. In any case
in which the licensee has, in accordance with agency rules, made
timely and sufficient application for a renewal or a new license,
no license with reference to any activity of a continuing nature
shall expire until such application shall have been finally deter-
mined by the agency.

JUDICIAL REVIEW
SEC. 10. Except so far as (1) statutes precude judicial review
or (2) agency action is by law committed to agency discretion-
(a) RIGHT OF REVIEW.-Any person suffering legal wrong be-
cause of any agency action, or adversely affected or aggrieved
by such action within the meaning of any relevant statute, shall
be entitled to judicial review thereof.
(b) FORM AND VENUE OF ACTION.-The form of proceeding
for judicial review shall be any special statutory review pro-
ceeding relevant to the subject matter in any court specified by
statute or, in the absence or inadequacy thereof, any applicable
form of legal action (including actions for declaratory judg-
ments or writs of prohibitory or mandatory injunction or habeas
corpus) in any court of competent jurisdiction. Agency action shall
be subject to judicial review in civil or criminal proceedings for
judicial enforcement except to the extent that prior, adequate,
and exclusive opportunity for such review is provided by law.
(c) REVIEWABLE ACTS.-Every agency action made reviewable
by statute and every final agency action for which there is no
other adequate remedy in any court shall be subject to judicial
review. Any preliminary, procedural, or intermediate agency
action or ruling not directly reviewable shall be subject to review
upon the review of the final agency action. Except as otherwise
expressly required by statute, agency action otherwise final shall
be final for the purposes of this subsection whether or not there
has been presented or determined any application for a declaratory
order, for any form of reconsideration, or (unless the agency
otherwise requires by rule and provides that the action mean-
while shall be inoperative) for an appeal to superior agency
authority.

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(d) INTERIM RELIEF.-Pending judicial review any agency
is authorized, where it finds that justice so requires, to postpone
the effectice date of any action taken by it. Upon such condi-
tions as may be required and to the extent necessary to prevent
irreparable injury, every reviewing court (including every
court to which a case may be taken on appeal from or upon appli-
cation for certiorari or other writ to a reviewing court) is
authorized to issue all necessary and appropriate process to
postpone the effective date of any agency action or to preserve
status or rights pending conclusion of the review proceedings.
(e) SCOPE OF REVIEW.-So far as necessary to decision and
where presented the reviewing court shall decide all relevant
questions of law, interpret constitutional and statutory provisions,
and determine the meaning or applicability of the terms of any
agency action. It shall (A) compel agency action unlawfully
withheld or unreasonably delayed; and (B) hold unlawful and
set aside agency action, findings, and conclusions found to be (1)
arbitrary, capricious, an abuse of discretion, or otherwise not in
accordance with law; (2) contrary to constitutional right, power,
privilege, or immunity; (3) in excess of statutory jurisdiction,
authority, or limitations, or short of statutory right; (4) without
observance of procedure required by law; (5) unsupported by
substantial evidence in any case subject to the requirements of
sections 7 and 8 or otherwise reviewed on the record of an agency
hearing provided by statute; or (6) unwarranted by the facts
to the extent that the facts are subject to trial de novo by the
reviewing court. In making the foregoing determinations the
court shall review the whole record or such portions thereof as
may be cited by any party, and due account shall be taken of the
rule of prejudicial error.

EXAMINERS

SEC. 11. Subject to the civil-service and other laws to the ex-
tent not inconsistent with this Act, there shall be appointed by
and for each agency as many qualified and competent examiners
as may be necessary for proceedings pursuant to sections 7 and 8,
who shall be assigned to cases in rotation so far as practicable
and shall perform no duties inconsistent with their duties and
responsibilities as examiners. Examiners shall be removable by
the agency in which they are employed only for good cause estab-
lished and determined by the Civil Service Commission (here-

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inafter called the Commission) after opportunity for hearing and

upon the record thereof. Examiners shall receive compensation
prescribed by the Commission independently of agency recom-
mendations or ratings and in accordance with the Classification
Act of 1923, as amended, except that the provisions of paragraphs
(2) and (3) of subsection (b) of section 7 of said Act, as amended,
and the provisions of section 9 of said Act, as amended,
shall not be applicable. Agencies occasionally or temporarily in-
sufficiently staffed may utilize examiners selected by the Com-
mission from and with the consent of other agencies. For the
purposes of this section, the Commission is authorized to make
investigations, require reports by agencies, issue reports, including
an annual report to the Congress, promulgate rules, appoint such
advisory committees as may be deemed necessary, recommend
legislation, subpena witnesses or records, and pay witness fees
as established for the United States courts.

CONSTRUCTION AND EFFECT

SEC. 12. Nothing in this Act shall be held to diminish the con-
stitutional rights of any person or to limit or repeal additional
requirements imposed by statute or otherwise recognized by law.
Except as otherwise required by law, all requirements or priv-
ileges relating to evidence or procedure shall apply equally to
agencies and persons. If any provision of this Act or the appli-
cation thereof is held invalid, the remainder of this Act or other
applications of such provision shall not be affected. Every agency is
granted all authority necessary to comply with the requirements
of this Act through the issuance of rules or otherwise. No subse-
quent legislation shall be held to supersede or modify the provi-
sions of this Act except to the extent that such legislation shall do
so expressly. This Act shall take effect three months after its
approval except that sections 7 and 8 shall take effect six months
after such approval, the requirement of the selection of examiners
pursuant to section 11 shall not become effective until one year
after such approval, and no procedural requirement shall be
mandatory as to any agency proceeding initiated prior to the
effective date of such requirement.
Approved June 11, 1946.

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APPENDIX B

OFFICE OF THE ATTORNEY GENERAL,

Washington, D. C., October 19,1945.
Hon. Pat McCarran,
Chairman, Senate Judiciary Committee,
United State Senate, Washington, D. C.
My Dear Senator: You have asked me to comment on S. 7,
a bill to improve the administration of justice by prescribing
fair administrative procedure, in the form in which it appears in
the revised committee print issued October 5, 1945.
I appreciate the opportunity to comment on this proposed
legislation.
For more than a decade there has been pending in the Congress
legislation in one form or another designed to deal horizontally
with the subject of administrative procedure, so as to overcome
the confusion which inevitably has resulted from leaving to
basic agency statutes the prescription of the procedures to be
followed or, in many instances, the delegation of authority to
agencies to prescribe their own procedures. Previous attempts to
enact general procedural legislation have been unsuccessful gen-
erally because they failed to recognize the significant and inherent
differences between the tasks of courts and those of administra-
tive agencies or because, in their zeal for simplicity and uniform-
ity, they propose too narrow and rigid a mold.
Nevertheless, the goal toward which these efforts have been
directed is, in my opinion, worth while. Despite difficulties of
draftsmanship, I believe that over-all procedural legislation is
possible and desirable. The administrative process is now well
developed. It has been subject in recent years to the most inten-
sive and informed study-by various congressional committees,
by the Attorney General's Committee on Administrative Proced-
ure, by organizations such as the American Bar Association,
and by many individual practitioners and legal scholars. We have
in general-as we did not have until fairly recently-the materials
and facts at hand. I think the time is ripe for some measure of
control and prescription by legislation. I cannot agree that there
is anything inherent in the subject of administrative procedure,
however complex it may be, which defies workable codification.

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Since the original introduction of S. 7, I understand that

opportunity has been afforded to public and private interests
to study its provisions and to suggest amendments. The agencies
of the Government primarily concerned have been consulted and
their views considered. In particular, I am happy to note that
your committee and the House Committee on the Judiciary, in
an effort to reconcile the views of the interested parties, have
consulted officers of this Department and experts in administra-
tive law made available by this Department.
The revised committee print issued October 5, 1945, seems to
me to achieve a considerable degree of reconciliation between the
views expressed by the various Government agencies and the
views of the proponents of the legislation. The bill in its present
form requires administrative agencies to publish or make avail-
able to the public an increased measure of information concerning
their organization, functions, and procedures. It gives to that
portion of the public which is to be affected by administrative
regulations an opportunity to express its views before the regula-
tions become effective. It prescribes, in instances in which existing
statutes afford opportunity for hearing in connection with the
formulation and issuance of administrative rules and orders, the
procedures which shall govern such hearings. It provides for the
selection of hearing officers on a basis designed to obtain highly
qualified and impartial personnel and to insure their security of
tenure. It also restates the law governing judicial review of ad-
ministrative action.
The bill appears to offer a hopeful prospect of achieving
reasonable uniformity and fairness in administrative proced-
ures without at the same time interfering unduly with the efficient
and economical operation of the Government. Insofar as possible,
the bill recognizes the needs of individual agencies by appropriate
exemption of certain of their functions.
After reviewing the committee print, therefore, I have con-
cluded that this Department should recommend its enactment.
My conclusion as to the workability of the proposed legislation
rest on my belief that the provisions of the bill can and should be
construed reasonably and in a sense which will fairly balance the
requirements and interests of private persons and governmental
agencies. I think it may be advisable for me to attach to this
report an appendix discussing the principle provisions of the bill.
This may serve to clarify some of the essential issues, and may

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assist the committee in evaluating the impact of the bill on public

and private interests.
I am advised by the Acting Director of the Bureau of the
Budget that while there would be no objection to the submission
of this report, he questions the appropriateness of the inclusion
of the words "independently of agency recommendations or rat-
ings," appearing after the words "Examiners shall receive com-
pensation prescribed by the [Civil Service] Commission" in
section 11 of the bill, inasmuch as he deems it highly desirable
that agency recommendations and ratings be fully considered by
the Commission.
With kind personal regards.
Sincerely yours,
Tom C. CLARK,
Attorney General

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APPENDIX TO ATTORNEY GENERAL'S STATEMENT REGARDING REVISED

COMMITTEE PRINT OF OCTOBER 5, 1945

Section 2: The definitions given in section 2 are of very broad

character. It is believed, however, that this scope of definition
will not be found to have any unexpected or unfortunate conse-
quences in particular cases, inasmuch as the operative sections
of the act are themselves carefully limited.
"Courts" includes the Tax Court, Court of Customs and Patent
Appeals, the Court of Claims, and similar courts. This act does
not apply to their procedure nor affect the requirement of resort
thereto.
In section 2 (a) the words "agencies composed of representa-
tives of the parties or of representatives of organizations of the
parties to the disputes determined by them" are intended to
refer to the following, among others: National War Labor Board
and the National Railroad Adjustment Board.
In section 2 (c) the phrase "the approval or prescription for
the future of rates, wages, corporate or financial structures
or reorganizations thereof, prices, facilities, appliances," etc., is
not, of course, intended to be an exhaustive enumeration of the
types of subject matter of rule making. Specification of these
particular subjects is deemed desirable, however, because there is
no unanimity of recognition that they are, in fact, rule making.
The phrase "for the future" is designed to differentiate, for exam-
ple, between the process of prescribing rates for the future and
the process of determining the lawfulness of rates charged in the
past. The latter, of course, is "adjudication" and not "rule making."
(Arizona Grocery Co. v. Atchison, Topeka, and Santa Fe Railway
Co. (284 U.S. 370).)
The definitions of "rule making" and "adjudication," set forth
in subsections (c) and (d) of section 2, are especially significant.
The basic scheme underlying this legislation is to classify all
administrative proceedings into these two categories. The pattern
is familiar to those who have examined the various proposals for
administrative procedure legislation which have been introduced
during the past few years; it appears also in the recommendations
of the Attorney General's Committee on Administrative Procedure.
Proceedings are classed as rule making under this act not merely
because, like the legislative process, they result in regulations of

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general applicability but also because they involve subject matter

demanding judgments based on technical knowledge and experi-
ence. As defined in subsection (c), for example, rule making
includes not only the formulation of rules of general applicability,
but also the formulation of agency action whether of general or
particular applicability, relating to the types of subject matter
enumerated in subsection (c). In many instances of adjudication,
on the other hand, the accusatory element is strong, and individual
compliance or behavior is challenged; in such cases, special pro-
cedural safeguards should be provided to insure fair judgments
on the facts as they may properly appear of record. The statute
carefully differentiates between these two basically different
classes of proceedings so as to avoid, on the one hand, too cumber-
some a procedure and to require, on the other hand, an adequate
procedure.
Section 3: This section applies to all agencies covered by the
act, including war agencies and war functions. The exception
of any function of the United States requiring secrecy in the
public interest is intended to cover (in addition to military, naval,
and foreign affairs functions) the confidential operations of the
Secret Service, the Federal Bureau of Investigation, United States
attorneys, and other prosecuting agencies, as well as the confi-
dential functions of any other agency.
Section 3 (a), by requiring publication of certain classes of
information in the Federal Register, is not intended to repeal the
Federal Register Act (44 U. S. C. 301 et seq.) but simply to re-
quire the publication of certain additional material.
Section 3 (a) (4) is intended to include (in addition to sub-
stantive rules) only such statements of general policy or interpret-
ations as the agency believes may be formulated with a sufficient
degree of definiteness and completeness to warrant their publica-
tion for the guidance of the public.
Section 3 (b) is designed to make available all final opinions
or orders in the adjudication of cases. Even here material may be
held confidential if the agency finds good cause. This confidential
material, however, should not be cited as a precedent. If it is
desired to rely upon the citation of confidential material, the agency
should first make available some abstract of the confidential
material in such form as will show the principles relied upon
without revealing the confidential facts.
Section 3 (c) is not intended to open up Government files for

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general inspection. What is intended is that the agencies, to the
degree of specificity practicable, shall classify its material in
terms of whether or not it is confidential in character and shall
set forth in published rules the information or type of material
which is confidential and that which is not.
Section 4. The term "naval" in the first exception clause is
intended to include the defense functions of the Coast Guard and
the Bureau of Marine Inspection and Navigation.
Section 4 (b), in requiring the publication of a concise general
statement of the basis and purpose of rules made without formal
hearing, is not intended to require an elaborate analysis of rules
or of the detailed considerations upon which they are based, but is
designed to enable the public to obtain a general idea of the
purpose of, and a statement of the basic justification for, the rules.
The requirement would also serve much the same function as the
whereas clauses which are now customarily found in the preambles
of Executive orders.
Section 4 (c) : This subsection is not intended to hamper the
agencies in cases in which there is good cause for putting a rule
into effect immediately, or at some time earlier than 30 days. The
section requires, however, that where an earlier effective date is
desired the agency should make a finding of good cause therefor
and publish its finding along with the rule.
Section 4 (d) simply permits any interested person to petition
an agency for the issuance, amendment, or repeal of a rule. It re-
quires the reception and consideration of petitions, but does not
compel an agency to undertake any rule-making procedure merely
because a petition is filed.
SEC. 5. Subject to the six exceptions set forth at the commence-
ment of the section, section 5 applies to administrative adjudica-
tions "required by statute to be determined on the record after
opportunity for an agency hearing." It is thus limited to cases in
which the Congress has specifically required a certain type of
hearing. The section has no application to rule making, as defined
in section 2 (c). The section does apply, however, to licensing
with the exception that section 5 (c), relating to the separation
of functions, does not apply in determining applications for initi-
al licenses, i. e., original licenses as contradistinguished from
renewals or amendments of existing licenses.
If a case falls within one of the six exceptions listed at the
opening of section 5, no provision of section 5 has any application

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to that case; such a case would be governed by the requirements

of other existing statutes.
The first exception is intended to exempt, among other mat-
ters, certain types of reparation orders assessing damages, such
as are issued by the Interstate Commerce Commission and the
Secretary of Agriculture, since such orders are admissible only
as prima facie evidence in court upon attempted enforcement
proceedings or (at least in the case of reparation orders issued
by the Secretary of Agriculture under the Perishable Agricultural
Commodities Act) on the appeal of the losing party. Reparation
orders involving in part an admistrative determination of the
reasonableness of rates in the past so far as they are not subject
to trial de novo would be subject to the provisions of section 5 gen-
erally but they have been specifically exempted from the segrega-
tion provisions of section 5 (c). In the fourth exception the term
"inaval" is intended to include adjudicative defense functions of
the Coast Guard and the Bureau of Marine Inspection and Nav-
igation, where such functions pertain to national defense.
Section 5 (a) is intended to state minimum requirements for
the giving of notice to persons who under existing law are
entitled to notice of an agency hearing in a statutory adjudication.
While in most types of proceedings all of the information required
to be given in clauses (1), (2), and (3) may be included in the
"notice of hearing" or other moving paper, in many instances
the agency or other moving party may not be in position to set
forth all of such information in the moving paper, or perhaps
not even in advance of the hearing, especially the "matters of
fact and law asserted." The first sentence of this subsection merely
requires that the information specified should be given as soon as
it can be set forth and, in any event, in a sufficiently timely man-
ner as to afford those entitled to the information an adequate
opportunity to meet it. The second sentence complements the
first and requires agencies and other parties promptly to reply to
moving papers of private persons or permits agencies to require
responsive pleading in any proceedings.
Section 5 (c) applies only to the class of adjudicatory pro-
ceedings included within the scope of section 5, i. e., cases of
adjudication required by statute to be determined after opportun-
ity for an agency hearing, and then not falling within one of the
six excepted situations listed at the opening of section 5. As ex-
plained in the comments with respect to section 5 generally, this

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subsection does not apply either in proceedings to determine ap-

plications for initial licenses or in those to determine the reason-
ableness of rates in the past.
In the cases to which this subsection is applicable, if the
informal procedures described in section 5 (b) (1) are not ap-
propriate or have failed, a hearing is to be held as provided in
sections 7 and 8. At such hearings the same officers who preside at
the reception of evidence pursuant to section 7 shall make the
recommended decision or initial decision "required by section 8"
except where such officers become unavailable to the agency. The
reference to section 8 is significant. Section 8 (a) provides that,
in cases in which the agency has not presided at the reception of
the evidence, the officer who presided (or, in cases not subject to
subsection (c) of section 5, an officer or officers qualified to pre-
side at hearings pursuant to section 7) shall make the initial
or recommended decision, as the case may be. It is plain, therefore,
that in cases subject to section 5 (c) only the officer who presided
at the hearing (unless he is unavailable for reasons beyond the
agency's control) is eligible to make the initial or recommended
decision, as the case may be.
This subsection further provides that in the adjudicatory hear-
ings covered by it no presiding officer shall consult any person or
party on any fact in issue unless upon notice and opportunity for
all parties to participate (except to the extent required for the
disposition of ex parte matters as authorized by law). The term
"fact in issue" is used in its technical, litigious sense.
In most of the agencies which conduct adjudicative proceed-
ings of the types subject to this subsection, the examiners are
placed in organizational units apart from those to which the
investigative or prosecuting personnel are assigned. Under this
subsection such an arrangement will become operative in all such
agencies. Further, in the adjudicatory cases covered by section 5
(c), no officer, employee, or agent engaged in the performance of
investigative or prosecuting functions for any agency in any case
shall, in that or a factually related case, participate or advise in
the decision, recommended decision or agency review pursuant to
section 8 except as witness or counsel in public proceedings. How-
ever, section 5 (c) does not apply to the agency itself or, in the
case of a multiheaded agency, any member thereof. It would not
preclude, for example, a member of the Interstate Commerce
Commission personally conducting or supervising an investigation

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and subsequently participating in the determination of the
agency action arising out of such investigation.
Section 5 (c), applying as it does only to cases of adjudication
(except determining applications for initial licenses or determining
reasonableness of rates in the past) within the scope of section 5
generally, has no application whatever to rule making, as defined in
section 2 (c). As explained in the comment on section 2 (c), rule
making includes a wide variety of subject matters, and within the
scope of those matters it is not limited to the formulation of rules
of general applicability but includes also the formulation of
agency action whether of general or particular application, for
example, the reorganization of a particular company.
Section 5 (d) : Within the scope of section 5 (i. e., in cases of
adjudication required by statute to be determined on the record
after opportunity for an agency hearing, subject to certain ex-
ceptions) the agency is authorized to issue a declaratory order to
terminate a controversy or remove uncertainty. Where declara-
tory orders are found inappropriate to the subject matter, no
agency is required to issue them.
Section 6: Subsection (a), in stating a right of appearance for
the purpose of settling or informally determining the matter in
controversy, would not obtain if the agency properly determines
that the responsible conduct of public business does not permit.
It may be necessary, for example, to set the matter down for
public hearing without preliminary discussion because a statute
or the subject matter or the special circumstances so require.
It is not intended by this provision to require the agency to
give notice to all interested persons, unless such notice is other-
wise required by law.
This subsection does not deal with, or in any way qualify, the
present power of an agency to regulate practice at its bar. It
expressly provides, moreover, that nothing in the act shall be
construed either to grant or to deny the right of nonlawyers to
appear before agencies in a representative capacity. Control over
this matter remains in the respective agencies.
Section 6 (b) : The first sentence states existing law. The
second sentence is new.
Section 6 (c) : The first sentence entitles a party to a subpena
upon a statement or showing of general relevance and reasonable
scope of the evidence sought. The second sentence is intended to

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state the existing law with respect to the judicial enforcement of

subpenas.
Section 6 (d) : The statement of grounds required herein will
be very simple, as contrasted with the more elaborate findings
which are customarily issued to support an order.
Section 7: This section applies in those cases of statutory hear-
ing which are required by sections 4 and 5 to be conducted pur-
suant to section 7. Subject to the numerous exceptions contained
in sections 4 and 5, they are cases in which an order or rule is to be
made upon the basis of the record in a statutory hearing.
Section 7 (a) : The subsection is not intended to disturb pres-
ently existing statutory provisions which explicity provide for
certain types of hearing officers. Among such are (1) joint hear-
ings before officers of the Federal agencies and persons desig-
nated by one or more States, (2) where officers of more than one
agency sit, (3) quota allotment cases under the Agricultural
Adjustment Act of 1938, (4) Marine Casualty Investigation
Boards, (5) registers of the General Land Office, (6) special
boards set up to review the rights of disconnected servicemen
(38 U. S. C. 693h) and the rights of veterans to special unemploy-
ment compensation (38 U.S.C. 696h), and (7) boards of employees
authorized under the Interstate Commerce Act (49 U. S. C. 17 (2)).
Subject to this qualification, section 7 (a) requires that there
shall preside at the taking of evidence one or more examiners
appointed as provided in this act, unless the agency itself or one
or more of its members presides. This provision is one of the most
important provisions in the act. In many agencies of the Govern-
ment this provision may mean the appointment of a substantial
number of hearing officers having no other duties. The resulting
expense to the Government may be increased, particularly in
agencies where hearings are now conducted by employees of a
subordinate status or by employees having duties in addition to
presiding at hearings. On the other hand, it is contemplated that
the Civil service Commission, which is empowered under the
provisions of section 11 to prescribe salaries for hearing officers,
will establish various salary grades in accordance with the nature
and importance of the duties performed, and will assign those
in the lower grades to duties now performed by employees in the
lower brackets. It may also be possible for the agencies to re-
organize their staffs so as to permit the appointment of full-time

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hearing officers by reducing the number of employees engaged

on other duties.
This subsection further provides for withdrawal or removal
of examiners disqualified in a particular proceeding. Some of the
agencies have voiced concern that this provision would permit un-
due delay in the conduct of their proceedings because of unneces-
sary hearings or other procedure to determine whether affidavits
of bias are well founded. The provision does not require hearings
in every instance but simply requires such procedure, formal or
otherwise, as would be necessary to establish the merits of the
allegations of bias. If it is manifest that the charge is groundless,
there may be prompt disposition of the matter. On the other
hand, if the affidavit appears to have substance, it should be
inquired into. In any event, whatever procedure the agency deems
appropriate must be made a part of the record in the proceeding
in which the affidavit is filed.
Section 7 (b) : The agency may delegate to a hearing officer
any of the enumerated powers with which it is vested. The
enumeration of the powers of hearing officers is not intended to be
exclusive.
Section 7 (c) : The first sentence states the customary rule that
the proponent of a rule or order shall have the burden of proof.
Statutory exceptions to the rule are preserved. Parties shall have
the right to conduct such cross-examination as may be required
for a full and true disclosure of the facts. This is not intended to
disturb the existing practice of submitting technical written
reports, summaries, and analyses of material gathered in field
surveys, and other devices appropriately adapted to the particular
issues involved in specialized proteedings. Whether the agency
must in such cases produce the maker of the report depends, as it
does under the present law, on what is reasonable in all the cir-
cumstances.
It may be noted that agencies are empowered, in this sub-
section, to dispense with oral evidence only in the types of pro-
ceedings enumerated; that is, in instances in which normally it is
not necessary to see and hear the witnesses in order properly to
appraise the evidence. While there may be types of proceedings
other than those enumerated in which the oral testimony of the
witnesses is not essential, in such instances the parties generally
consent to submission of the evidence in written form so that the

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inability of the agency to compel submission of written evidence

would not be burdensome.
The provision regarding "evidence in written form" does not
limit the generality of the prevailing principle that "any evidence
may be received"; that is, that the rules of evidence as such are
not applicable in administrative proceedings, and that all types
of pertinent evidentiary material may be considered. It is assum-
ed, of course, that agencies will, in the words of the Attorney
General's Committee on Administrative Procedure, rely only on
such evidence (whether written or oral) as is "relevant, reliable,
and probative." This is meant as a guide, but the courts in review-
ing an order are governed by the provisions of section 10 (e),
which states the "substantial evidence" rule.
Section 7 (d) : The transcript of testimony and exhibits, to-
gether with all papers and requests filed in the proceeding, shall
constitute the exclusive record for decision, in the cases covered
by section 7. This follows from the proposition that sections 7 and
8 deal only with cases where by statute the decision is to be based
on the record of hearing. Further, section 7 is limited by the excep-
tions contained in the opening sentences of sections 4 and 5; ac-
cordingly, certain special classes of cases, such as those where
decisions rest solely on inspections, tests, or elections, are not cov-
ered. The second sentence of the subsection enables the agency to
take official notice of material facts which do not appear in the re-
cord, provided the taking of such notice is stated in the record or
decision, but in such cases any party affected shall, on timely
request, be afforded an opportunity to show the contrary.
Section 8: This section applies to all hearings held under
section 7.
Section 8 (a) : Under this subsection either the agency or a sub-
ordinate hearing officer may make the initial decision. As previous-
ly observed with respect to subsection (c) of section 5, in cases to
which that subsection is applicable the same officer who person-
ally presided over the hearing shall make such decision if it is to
be made by a subordinate hearing officer. The agency may provide
that in all cases the agency itself is to make the initial decision, or
after the hearing it may remove a particular case from a subor-
dinate hearing officer and thereupon make the initial decision.
The initial decision of the hearing officer, in the absence of appeal
to or review by the agency, is (or becomes) the decision of the
agency. Upon review the agency may restrict its decision to ques-

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tions of law, or to the question of whether the findings are sup-

ported by substantial evidence or the weight of evidence, as the
nature of the case may be. On the other hand, it may make entirely
new findings either upon the record or upon new evidence which
it takes. It may remand the matter to the hearing officer for any
appropriate further proceedings.
The intention underlying the last sentence of this subsection
is to require the adoption of a procedure which will give the
parties an opportunity to make their contentions to the agency
before the issuance of a final agency decision. This sentence
states as a general requirement that, whenever the agency makes
the initial decision without having.presided at the reception of the
evidence, a recommended decision shall be filed by the officer
who presided at the hearing (or, in cases not subject to section 5
(c), by any other officer qualified to preside at section 7 hearings).
However, this procedure need not be followed in rule making or
in determining applications for initial licenses (1) if, in lieu
of a recommended decision by such hearing officer, the agency
issues a tentative decision; (2) if, in lieu of a recommended deci-
sion by such hearing officer, a recommended decision is submitted
by any of the agency's responsible officers; or (3) if, in any event,
the agency makes a record finding that "due and timely execution
of its function imperatively and unavoidably so requires."
Subsection (c) of section 5, as explained in the comments on
that subsection, does not apply to rule making. The broad scope
of rule making is explained in the notes to subsection (c) of
section 2.
The second exception permits, in proceedings to make rules
and to determine applications for initial licenses, the continuation
of the widespread agency practice of serving upon the parties,
as a substitute for either an examiner's report or a tentative
agency report, a report prepared by the staff of specialists and
technicians normally engaged in that portion of the agency's
operations to which the proceeding in question relates. The third
exception permits, in lieu of any sort of preliminary report, the
agency to issue forthwith its finral rule or its order granting or
denying an initial license in the emergent instances indicated.
The subsection, however, requires that an examiner issue either
an initial or a recommended decision, as the case may be, in all
cases subject to section 7 except rule making and determining
applications for initial licenses. The act permits no deviation from

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this requirement, unless, of course, the parties waive such

procedure.
Section 8 (b) : Prior to each recommended, initial, or tentative
decision, parties shall have a timely opportunity to submit proposed
findings and conclusions, and, prior to each decision upon agency re-
view of either the decision of subordinate officers or of the agency's
tentative decision, to submit exceptions to the initial, recommended,
or tentative decision, as the case may be. Subject to the agency's
rules, either the proposed findings or the exceptions may be oral
in form where such mode of presentation is adequate.
Section 9: Subsection (a) is intended to declare the existing
law. Subsection (b) is intended to codify the best existing law
and practice. The second sentence of subsection (b) is not intended
to apply to temporary licenses which may be issued pending the
determination of applications for licenses.
Section 10: This section, in general, declares the existing law
concerning judicial review. It provides for judicial review except
insofar as statutes preclude it, or insofar as agency action is by
law committed to agency discretion. A statute may in terms
preclude judicial review or be interpreted as manifesting a con-
gressional intention to preclude judicial review. Examples of
such interpretation are: Switchmen's Union of North America v.
National Mediation Board (320 U. S. 297) ; American Federation
of Labor v. National Labor Relations Board (308 U. S. 401) ;
Butte, Anaconda & Pacific Railway Co. v. United States (290 U.
S. 127). Many matters are committed partly or wholly to agency
discretion. Thus, the courts have held that the refusal by the
National Labor Relations Board to issue a complaint is an exer-
cise of discretion unreviewable by the courts (Jacobsenv. National
Labor Relations Board, 120 F. (2d) 96 (C. C. A. 3d); Marine
Engineers' Beneficial Assn. v. National Labor Relations Board,
decided April 8, 1943 (C. C. A. 2d). certiorari denied, 320 U. S.
777). In this act, for example, the failure to grant a petition filed
under section 4 (d) would be similarly unreviewable.
Section 10 (a) : Any person suffering legal wrong because
of any agency action, or adversely affected or aggrieved by such
action within the meaning of any relevant statute, shall be entitled
to judicial review of such action. This reflects existing law. In
Alabama Power Co. v. Ickes (302 U. S. 464), the Supreme Court
stated the rule concerning persons entitled to judicial review.
Other cases having an important bearing on this subject are

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Massachusetts v. Mellon (262 U. S. 447), The Chicago Junction

Case (264 U. S. 258), Sprunt & Son v. United States (281 U. S.
249), and Perkins v. Lukens Steel Co. (310 U. S. 113). An im-
portant decision interpreting the meaning of the terms "aggrieved"
and "adversely affected" is Federal Communications Commission
v. Sanders Bros. Radio Station (309 U. S. 470).
Section 10 (b) : This subsection requires that, where a specific
statutory method is provided for reviewing a given type of case in
the courts, that procedure shall be used. If there is no such pro-
cedure, or if the procedure is inadequate (i. e., where under exist-
ing law a court would regard the special statutory procedure as
inadequate and would grant another form of relief), then any
applicable procedure, such as prohibitory or mandatory injunction,
declaratory judgment, or habeas corpus, is available. The final
sentence of the subsection indicates that the question of the
validity of an agency action may arise in a court proceeding to en-
force the agency action. The statutes presently provide various
procedures for judicial enforcement of agency action, and nothing
in this act is intended to disturb those procedures. In such a pro-
ceeding the defendant may contest the validity of the agency action
unless a prior, adequate, and exclusive opportunity to contest or
review validity has been provided by law.
Section 10 (c) : This subsection states (subject to the pro-
visions of section 10 (a)) the acts which are reviewable under
section 10. It is intended to state existing law. The last sentence
makes it clear that the doctrine of exhaustion of administrative
remedies with respect to finality of agency action is intended to
be applicable only (1) where expressly required by statute (as,
for example, is provided in 49 U. S. C. 17 (9)) or (2) where the
agency's rules require that decisions by subordinate officers must be
appealed to superior agency authority before the decision may be
regarded as final for purposes of judicial review.
Section 10 (d) : The first sentence states existing law. The
second sentence may be said to change existing law only to the
extent that the language of the opinion in Scripps-Howard Radio,
Inc. v. FederalCommunicationsCommission (316 U.S. 4, 14), may
be interpreted to deny to reviewing courts the power to permit
an applicant for a renewal of a license to continue to operate as
if the original license had not expired, pending conclusion of the
judicial review proceedings. In any event, the court must find,

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of course, that granting of interim relief is necessary to prevent

irreparable injury.
Section 10 (e) : This declares the existing law concerning the
scope of judicial review. The power of the court to direct or
compel agency action unlawfully withheld or unreasonably de-
layed is not intended to confer any nonjudicial functions or to
narrow the principle of continuous administrative control enunci-
ated by the Supreme Court in Federal Communications Commis-
sion v. Pottsville Broadcasting Co. (309 U. S. 134). Clause (5) is
intented to embody the law as declared, for example, in Consoli-
dated Edison Co. v. National Labor Relations Board (305 U. S.
197). There the Chief Justice said: "Substantial evidence is more
than a mere scintilla. It means such relevant evidence as a rea-
sonable mind might accept as adequate to support a conclusion
(p. 229) * * * assurance of a desirable flexibility in admin-
istrative procedure does not go so far as to justify orders with-
out a basis in evidence having rational probative force" (p. 230).
The last sentence of this section makes it clear that not every
failure to observe the requirements of this statute or of the law
is ipso facto fatal to the validity of an order. The statute adopts
the rule now well established as a matter of common law in all
jurisdictions that error is not fatal unless prejudicial.
Sec. 11: This section provides for the appointment, compensa-
tion, and tenure of examiners who will preside over hearings
and render decisions pursuant to section 7 and 8. The section
provides that appointments shall be made "subject to the civil
service and other laws to the extent not inconsistent with this
act". Appointments are to be made by the respective employing
agencies of personnel determined by the Civil Service Commission
to be qualified and competent examiners. The examiners appointed
are to serve only as examiners except that, in particular instances
(especially where the volume of hearings under a given statute
or in a given agency is not very great), examiners may be as-
signed additional duties which are not inconsistent with or which
do not interfere with their duties as examiners. To insure equality
of participation among examiners in the hearing and decision
of cases, the agencies are required to use them in rotation so far
as may be practicable.
Examiners are subject to removal only for good cause "estab-
lished and determined" by the Commission. The Commission must
afford the examiner a hearing, if requested, and must rest its

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decision solely upon the basis of the record of such hearing. It

should be noted that the hearing and the decision are to be con-
ducted and made pursuant to' the provisions of section 7 and 8.
Section 11 provides further that the Commission shall pre-
scribe the compensation of examiners, in accordance with the
compensation schedules provided in the Classification Act, except
that the efficiency rating system set forth in that act shall not be
applicable to examiners.
Sec. 12: The first sentence of section 12 is intended simply to
indicate that the act will be interpreted as supplementing consti-
tutional and legal requirements imposed by existing law.
The section further provides that "no subsequent legislation
shall be held to supersede or modify the provisions of this act
except to the extent that such legislation shall do so expressly". It
is recognized that no congressional legislation can bind subse-
quent sessions of the Congress. The present act can be repealed
in whole or in part at any time after its passage. However, the
act is intended to express general standards of wide applicability.
it is believed that the courts should as a rule of construction
interpret the act as applicable on a broad basis, unless some
subsequent act clearly provides to the contrary.

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