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Argument for Appellees.

304 U.S.

Solicitor General Jackson and Mr. Wendell Berge, with whom Ass't Solicitor General Bell, and Messrs. Hugh B. Cox, James C. Wilson, Edward J. Ennis, and G. N. Dagger were on the brief, for the appellees.

The contention that the decision of a quasi-judicial officer, made upon a proper record after full hearing of argument, may be declared to be void on the ground that it was insufficiently considered is without precedent. In its prior decision, this Court held that where it was alleged that the Secretary heard neither evidence nor argument a case was made for judicial investigation. It did not hold that where he had heard argument, judicial investigation may test the adequacy of his further consideration of the case. The detailed facts of the Secretary's physical examination of arguments and evidence and the detailed mental processes which he employed in reaching his determination are not a proper subject for judicial inquiry. Appellants' contention is, in essence, an endeavor to avoid, by a novel doctrine of judicial review, the established rule that the findings of a quasi-judicial officer, made after hearing or reading full argument on a proper record submitted to him, can be attacked only by showing that the findings are in fact unsupported by the evidence.

The question of the scope of the issue is not of controlling importance in the present case. Should this Court decide that it is free to look behind the fact that the Secretary read and considered appellants' arguments, it will find that the evidence shows that the Secretary fully complied with any procedural standard that may reasonably be imposed.

The Secretary made his decision on the basis of his own personal consideration and appraisal of the evidence and argument. The transcript of record was in his possession and, while he did not read it consecutively or in full, he

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Argument for Appellees.

consulted it wherever in his judgment such consultation was necessary. As a guide to his examination of the record he studied the arguments of appellants directed to the evidence and compared them with the voluminous findings of fact, which constituted a summary and analysis of the evidence. Having read and considered the tentative findings of fact and the arguments of appellants, he made an investigation into the record-assisted by consultation with members of the Department-for the purpose of considering and appraising the evidence upon which the findings were made. Uncontradicted testimony establishes that the Secretary, in the exercise of his independent judgment, altered three of the most important items in the tentative schedule of rates. With respect to all the numerous questions raised by appellants, persuasive evidence exists to show independent inquiry and the exercise of independent judgment by the Secretary. By asserting that the Secretary did not give them a fair hearing, appellants have assumed the burden of proving by clear and convincing evidence that the Secretary did not consider their arguments or the evidence to which those arguments related.

Appellants renew their objection that they were not given an opportunity to file exceptions to an examiner's report or to tentative findings of fact, and to present argument in support of those exceptions. This Court has already passed on this argument. [Citing Morgan v. United States, 298 U. S. 468, 478.] The practice which the Court described as desirable has now been established in proceedings under § 307 of the Act. See Order of September 16, 1936, 1 Federal Register 1362. It remains true, however, that the failure to follow it is not fatal to the validity of the hearing.

Appellants also complain that in his oral argument counsel for the Department did not apprise them of the

Argument for Appellees.

304 U.S.

issues which they might be expected to meet, and they refer to statements he made which were in agreement with their contentions. It is not to be supposed that the appellants were prejudiced by such friendly statements in oral argument or that appellants' counsel needed the assistance of Government counsel, or of an examiner's report, or of tentative findings of fact, to determine what the important issues in the proceeding were. It is common knowledge that often in ordinary litigation the argument addressed by counsel to the court is made before the submission of proposed findings of fact or conclusions of law, and that the argument of opposing counsel does not in every case disclose with clarity the issues on which the case is to be decided. Such circumstances when they exist can hardly be said to amount to a denial of a full hearing.

Furthermore, it should be noted that, at the time of the oral argument and when petitioners filed their supplemental brief with the Secretary, they had before them an order, which had been signed on May 18, 1932, by the Secretary of Agriculture, containing findings of fact and fixing a schedule of rates. At the time the rehearing was granted, the Secretary had set this order aside. The record upon which that order had been made was a part of the record before the Secretary at the time of the rehearing, and the order served to inform the appellants of the nature of the issues involved. That it did so inform them is shown by the fact that much of appellants' supplemental brief was devoted to a discussion of this order, and that in the course of that discussion they advanced most of the contentions which they make with respect to the order now under attack.

Appellants attempt to distinguish this present situation from one in which a court adopts findings prepared by counsel on the ground that a court affords opposing

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Opinion of the Court.

counsel an opportunity to submit findings of his own or to except to the findings which are adopted. There is no force in this distinction. Although the appellants were not given an opportunity to except to the tentative findings of fact, they had an unrestricted opportunity to submit findings of their own to the Secretary of Agriculture which he could have considered. They did not take advantage of that opportunity; but that is not a circumstance which can be held against the Secretary of Agriculture. There is no logic in appellants' suggestion that the adoption of findings is done independently if opposing counsel has a chance to criticize those findings, but must be presumed not to have been done independently if the opportunity to criticize is not afforded.

The order of the Secretary is based upon correct principles of law and is supported by substantial evidence.

MR. CHIEF JUSTICE HUGHES delivered the opinion of the Court.

This case presents the question of the validity of an order of the Secretary of Agriculture fixing maximum rates to be charged by market agencies at the Kansas City Stock Yards. Packers and Stockyards Act, 1921, 42 Stat. 159; 7 U. S. C. 181-229. The District Court of three judges dismissed the bills of complaint in fifty suits (consolidated for hearing) challenging the validity of the rates, and the plaintiffs bring this direct appeal. 7 U. S. C. 217; 28 U.S. C. 47.

The case comes here for the second time. On the former appeal we met, at the threshold of the controversy, the contention that the plaintiffs had not been accorded the hearing which the statute made a prerequisite to a valid order. The District Court had struck from plaintiffs' bills the allegations that the Secretary had made the order

Opinion of the Court.

304 U.S.

without having heard or read the evidence and without having heard or considered the arguments submitted, and that his sole information with respect to the proceeding was derived from consultation with employees in the Department of Agriculture. We held that it was error to strike these allegations, that the defendant should be required to answer them, and that the question whether plaintiffs had a proper hearing should be determined. Morgan v. United States, 298 U. S. 468.

After the remand, the bills were amended and interrogatories were directed to the Secretary which he answered. The court received the evidence which had been introduced at its previous hearing, together with additional testimony bearing upon the nature of the hearing accorded by the Secretary. This evidence embraced the testimony of the Secretary and of several of his assistants. The District Court rendered an opinion, with findings of fact and conclusions of law, holding that the hearing before the Secretary was adequate and, on the merits, that his order was lawful. On this appeal, plaintiffs again contend (1) that the Secretary's order was made without the hearing required by the statute and (2) that the order was arbitrary and unsupported by substantial evidence.

The first question goes to the very foundation of the action of administrative agencies entrusted by the Congress with broad control over activities which in their detail cannot be dealt with directly by the legislature. The vast expansion of this field of administrative regulation in response to the pressure of social needs is made possible under our system by adherence to the basic principles that the legislature shall appropriately determine the standards of administrative action and that in administrative proceedings of a quasi-judicial character the liberty and property of the citizen shall be protected by the

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