Attorney General's Manual on the Administrative Procedure Act (1947) |
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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 required 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) provides for intermediate and final decisions, prescribes who
shall make them, and defines the decisional relationship between the agency heads and presiding
officers.1 The subsection reads as follows:
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 subsection are intended "to bridge the gap between the officials who hear and those who
decide cases." H.R. Rep. p. 38 (Sen. Doc. p. 272). If the agency itself, e.g., the Interstate
Commerce Commission, bears 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 decision to which the parties may file exceptions.
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 officer2 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 provided that "Whenever the agency makes the initial
decision without having presided at the reception of the evidence [the presiding 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 decision will
constitute an initial decision unless the agency provides 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 decisions.
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 V' 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 determining '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 examiner 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
the agency's operations to which the proceeding in question relates." 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 officer 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 proceedings 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 recommended
decision, the agency is in no way bound by the decision of its subordinate officer; it retains complete
freedom of decision--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
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 credibility 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 credibility
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 proceedings.
Section 8(a) empowers agencies to "limit the issues upon notice or
by rule" on appeal from or review of the initial decisions 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.5 The agency in reviewing either initial or recommended decisions may adopt in whole
or in part the findings, conclusions and basis therefor stated by the presiding
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. Doc. pp. 229, 272-273).
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 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 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. Doc. p. 33). "Ordinarily proposed findings
and conclusions are submitted only to the officers making the initial (or recommended) decision, and
the parties present exceptions thereafter 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. Doc. 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 opportunity 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. Doc. pp. 210, 273). Section 8 (b) does not purport to prescribe
opportunities for oral argument. Accordingly, subject to the provisions of particular statutes, each
agency must itself determine in what cases oral argument before hearing officers or the agency is
necessary or appropriate.6
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 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."
Since all decisions, whether made by the agency or by a subordinate
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:
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
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 prosecuting 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.
1Any of the requirements of section 8 may
be waived by the parties. Sen. Rep. p. 28 (Sen. Doc. p. 209).
2As 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 become, unavailable 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.
3It 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 officer. qualified to preside at hearings pursuant to section 7(a).
4It is important to note that section
10(c) permits an agency to require parties to appeal from hearing officers' initial decisions to the
agency as a prerequisite to obtaining judicial review. Such a requirement must be set forth in a
published rule which must further provide that the hearing officer's Initial decision shall be
inoperative pending the agency's review of the case. Sen. Rep. p. 27, H.R. Rep. pp. 43, 56, fn. 21
(Sen. Doc. pp. 218, 277, 289).
5See 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 without reference to the hearing commissioner's decision. Agencies should
insist upon meaningful 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 complete 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."
6See Morgan v. United
States, 298 U.S. 468, 481 (1936): "Argument may be oral or written."
7Agencies 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 available for public inspection.
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