1

Argument for Appellants.

In leaving the findings of fact to his subordinates, the Secretary proceeded upon the erroneous assumption that the delegation of the legislative power to fix rates was to the Department of Agriculture rather than to the Secretary in person.

The evidence as to the manner in which the findings, submitted to the Secretary and accepted by him, were prepared, discloses the absence of any quasi-judicial weighing or appraisal of the evidence by those who prepared them. The record discloses that neither the evidence nor the argument was thereafter weighed or appraised by the Secretary.

The findings prepared by the Secretary's subordinates do not constitute such a "sifting and analyzing" of the evidence as to absolve the Secretary from weighing and appraising the evidence itself.

The Secretary did not weigh and appraise the evidence concerning salesmanship performance, the findings concerning which are based on the flimsiest kind of evidence and are the most important of all.

The Secretary accepted without change findings made by his subordinates in respect of sales performance, apparently under the misapprehension that they were supported by actual performance, without any examination of the evidence in respect thereof, which, if made, would have disclosed the contrary.

The Secretary did not weigh and appraise the evidence upon which the order's so-called reasonable cost assigned to business-getting and maintaining was predicated.

The Secretary did not weigh and appraise the evidence bearing upon the reasonable cost of yarding or office salaries, but accepted the findings submitted upon a misunderstanding of their import.

Neither the fragmentary oral statements of his subordinates as to what some of the evidence was nor the

Argument for Appellants.

304 U.S.

Secretary's hit or miss "investigation into" the record is an acceptable substitute for his weighing and appraising the evidence as a whole.

The altering by the Secretary of a few rates in the tentative order in no way tends to prove he weighed and appraised the evidence. Had he filled in a wholly blank schedule he would be no better off.

The inexorable requirement of a fair trial before an impartial tribunal, which shall render judgment upon the evidence, is not met where, without any allegation that any rates are unreasonable, and without any disclosure of their contentions as to the ultimate facts proved or the principles intended to be applied to them, the findings and order to be made are prepared by opposing counsel and, without the knowledge of the appellants or their counsel, submitted to the trier of the facts who, after private unrecorded conferences with opposing counsel, issues an order in accordance therewith, without himself weighing or appraising the evidence upon controverted issues.

There was no allegation or suggestion in the original order of inquiry that any of appellants' rates were unjust, or unreasonable or discriminatory. The "Order Granting Rehearing" was not more explicit in these respects.

Counsel for the Government, in his argument, presented no issues of fact. Where he did refer to individual agencies he paid them the highest possible compliment as to efficiency of operation. He stated that in his opinion the rates under investigation were not discriminatory and that none of the appellants were making too much money under the existing rates.

Nothing occurred in the course of the oral argument to forecast the fact that the Assistant Secretary was not to pass upon the issues but was to retire from further con

1

Argument for Appellants.

sideration of the case. No statement indicated that a tentative report was to be prepared by the attorneys for the Government and a Government economist, an important witness for the Government. It was not suggested that the proposed findings and order, without having been first served upon counsel for appellants, would be presented to the Secretary personally and discussed with him by the attorneys for the Government in unrecorded conferences, out of the presence of appellants' counsel. Appellants' counsel, without the benefit of a complaint containing specific allegations as to the unreasonableness of any rates, having before him in the evidence a cost study prepared after extensive audits by Government accountants showing experienced costs to be in excess of receipts under existing rates, and without any knowledge of the contents of the tentative report, prepared a brief which was filed with the Assistant Secretary. No briefs were filed or served by the Government.

The proposed findings and order so prepared by the attorneys for the Government, together with certain memoranda prepared in part by the economist who was a Government witness in the case, was presented to the Secretary. The Secretary, according to his testimony, after examining the record casually, took the order, the briefs, and transcript of oral argument home with him. He states that he read the tentative order and part, at least, of the briefs. After discussing the matter with counsel for the Government in private unrecorded conferences, he changed, to an unimportant extent, a few figures expressing individual rates, and signed the order as proposed, otherwise unchanged, on June 14, 1933.

This he did without weighing or appraising the evidence on controverted issues of fact and without familiarizing himself with any part thereof except as com

Argument for Appellants.

304 U.S.

municated to him in ex parte oral conversations with his subordinates including the attorney prosecuting the case. No record was kept of these conversations, but it appears they were fragmentary and unaccompanied by any weighing and appraising of the evidence by the Secretary. And this although the findings accepted are directly contrary to statements in appellants' administrative briefs. Such a course of administrative procedure constitutes neither a full hearing nor due process of law.

The more extensive the employment of the implement of the administrative tribunal becomes-and its use is daily becoming more widespread-and the more credit which is given to its decisions, the more important is it that strict regularity be observed in the conduct of its hearings and that all the elements of a full and fair hearing and of due process of law be accorded. See Lord Chief Justice Hewart, "The New Despotism," pp. 50-51.

It is not contended by appellants that in cases where a fair and proper method has been adopted for limiting the issues, whether it be a tentative report of the Examiner or otherwise, the tribunal passing judgment must review or appraise all of the evidence relating to noncontroversial as well as controversial issues. Nor is it contended that in order that there be a full hearing, oral argument or oral presentation is essential in every instancefor by other methods the trier of the facts may become so adequately informed as to enable himself to properly appraise the evidence. Nor is it contended that the order is void solely by reason of the fact that the attorneys for the prosecution, assisted by a witness for the prosecution, prepared it,-for had such an order, so prepared, been followed by presentation of it to counsel for appellants with full opportunity to refute the conclusions expressed therein before him whose duty it was to resolve the evidence into findings, the requirement of a fair trial

1

Argument for Appellants.

could be met if the Secretary weighed and appraised all of the evidence upon the findings questioned by appellants' counsel. A court or administrative tribunal may for its convenience require submission of issues upon written statement-if such written statements are, under conditions fairly permitting reply, made known to opposing parties. Evidence may for the assistance of the one charged with the responsibility of decision be fairly analyzed by impartial and competent assistants, unbiased by previous partisan connection with the proceeding. Where, however, issues are not defined and limited by means and methods fair to all persons affected or to be affected, fair analyses or synopses of the evidence are not prepared by impartial or competent assistants, and the one deciding the issues does not personally review and weigh and appraise the evidence, a full hearing is not had in accordance with statutory and constitutional requirements.

Assuming that, as claimed, the Secretary read oral and written argument, nevertheless it is clear that he did not judicially weigh and appraise the same, since he admittedly adopted the vitally important inferences drawn by his subordinates from the evidence, and rejected the widely differing inferences asserted by appellants in their briefs, without weighing or appraising the evidence upon which either set of inferences was based.

The order should be set aside because unsupported by essential findings of basic facts, because the fundamental findings of fact therein are not supported by substantial evidence, because based upon an erroneous conception of the law and of the powers of the Secretary, because based upon a departure from recognized and accepted standards, both of reasonableness and of administrative procedure, and because arbitrarily made.