"traditional" privilege areas: licenses, immigration, government employment and contracts, and government largess, appeared when the role of government was relatively restricted, e.g. licensing and financial benefits were not nearly as pervasive so that the impact of the privilege concept was minimal. Thus, as Schwartz, supra, points out at p. 220, if the Army would not buy mules from the businessman he could readily sell them elsewhere but today can we really expect the military supplier debarred from government contracts to sell its tanks or bombers on the open market? Also, the privilege concept is particularly disturbing in its implications in today's evolving society; the expanding area of administrative law is in the field of social welfare. And it is precisely those who depend on public benefactions who are most in need of protection, so that "Under the traditional approach, the joyless reaches of the Welfare State will be littered with dependents left outside the pale of legal protection." (Id p. 220). Essentially, to say that there is no "right" to something like a government contract should not imply that an agency may act arbitrarily (substantively or procedurally) against a person or that he is not entitled to challenge the fairness of the agency toward him in a particular case. (See Gonzalez v. Freeman, 334 F2d 570 (D.C. Cir. 1964), and Goldberg v. Kelly, 397 US 254 (1970)). Schwartz characterizes the strongest provision for administrative finality as 38 USC 211(a) relating to the Veterans' Administration (Id p. 447). Due to a strong dissent in United States v. Wunderlich, 342 US 98 (1951) from a holding of administrative finality in a government contract case in which Justice Douglas stated: "It makes a tyrant out of every contracting officer" (Supra at 101), Congress agreed by statute, subjecting agency decisions in these cases to review In the federal courts (41 USC 321). The same erosion of privilege in licensing cases has been had (e.g. Bell v. Burson, 402 US 535 (1971)), as well as in government largess cases involving welfare benefits, etc. (e.g. Goldberg supra). However the Veterans Administration statute precluding review may soon follow in that "the Goldberg v. Kelly approach applied to the availability of review may make the Pedreiro principle applicable to an 'entitlement' such as a veteran's benefit as well as to a 'right' such as that of an alien to remain in this country." (Schwartz, Id at p. 448). The Federal Administrative Procedure Act is a strong statement by Congress In favor of the right of judicial review. To this extent, 38 USC 211a is inconsistent. The two exceptions in the APA are enumerated as (1) statutes precluding judicial review; or (2) where agency action is committed to agency discretion by law (5 USC 701). Insofar as 38 USC 211a reads ". the decisions of the administrator... shall be final and conclusive. .", the ordinary provision for administrative finality is insufficient to preclude review under the principle of Shaughnessy v. Pedreiro, supra, within the meaning of the APA, Furthermore, the Act does not preclude review of discretionary administrative acts despite (2) above, explicitly providing for cases of abuse of discretion in that the Act restates the rule developed by the courts in the absence of statute, that officers rested with discretion possess only the authority to exercise such discretion reasonably. Thus, when the APA speaks of action committed by law to agency decision, it means discretion to act reasonably, confirmed by APA power to reverse for abuse of discretion. The real essence of 38 USC 211a is that "no other official or any other court of the United States shall have power or jurisdiction to review any such decision." Pedreiro indicates that the APA exception (of statutory preclusion) applies only when the statute is interpreted as barring all judicial challenge. This is already in question after Johnson v. Robison, 415 US 361 (1974) wherein the bar to judicial review was held not to preclude judicial cognizance of certain types of constitutional challenges. 38 USC 211a is therefore unique now, although its history is consistent with other due process limitations on judicial review, now abrogated. Upon development of the arguments above, it appears to be ripe for challenge in the courts as there is no longer any rational justification for such exception, especially one affecting so many claimants with such a good claim to benefits through military service to the country often resulting in physical impairment; certainly a sufficient consideration for implying a contractual "right" to veterans' disability compensation and other "benefits". Swords to Plowshares is of the position, furthermore, that judicial review of V.A. decisions on claims need not entail any more backlogging of the courts or special expertise than the courts are already accustomed to. Further, the nature of the benefits is similar to those adjudicated and reviewed in federal court already under other statutory schemes. Also, review on the record, as the prevalent form of review of administrative adjudications, is certainly sufficient to safeguard due process rights; de novo review and/or a special court of veterans' appeals is not necessary and may be impractical as well as expensive. Veterans are entitled to the same due process protections, no more, no less. Accordingly, Swords submits the following "draft" for such a statute which we hope meets all the considerations inherent in such judicial review. 38 USC JUDICIAL REVIEW OF DECISIONS BY THE VETERANS ADMINISTRATION All final decisions of the Board of Veterans Appeals denying a veteran's claim in whole or in part shall be subject to review by a federal district court of the administrative action, subject to the following: (1) Jurisdiction shall be limited to on the record review of such final administrative action as defined by the criteria of substantial and sufficient evidence on the record supporting the findings of the Board of Veterans Appeals and absence of abuse of discretion in applying agency rules and regulations in such a manner that findings of fact and conclusions of law are consistent with the evidence and applicable regulations. (2) Venue shall be had in the district in which the plaintiff resides or in which the plaintiff's records are maintained by a regional office of the Veterans Administration. (3) Finality of Veterans Administration decisions shall be determined by appropriate certification of the Board of Veterans Appeals that no further action by the Veterans Administration on the claim as submitted is appropriate, following notice within one year by the claimant upon receipt of a Board of Veterans Appeals decision, of intent to file such an action. (4) Such review shall not be construed to limit the right to file an action In federal court upon constitutional grounds or for other due process defect in agency proceedings had; or for review of the constitutionality of relevant statutes or regulations promulgated by the Veterans Administration. (5) Where specific provision is not made herein with respect to judicial review of final Veterans Administration decision on a claim, the provisions of the federal Administrative Procedures Act, Chapter 7 shall be applicable. (6) A final disposition upon review by a federal court of such a claim shall not affect the claimant's right to reopen the claim before the Veterans Administration where new and material evidence is submitted by the claimant, defined as follows: (a) Evidence of such a nature that it is more probable than not that its consideration will affect the final decision of the Veterans Administration; or (b) Evidence not previously available to the claimant despite demonstrated due diligence in attempting to document the claim and exclusion of which would be prejudicial to the claimant; or (c) Evidence which warrants reconsideration of the claim in the discretion of the Veterans Administration. See Hart, The Power of Congress to Limit the Jurisdiction of Federal Courts: An Exercise in Dialectic. 66 Harv. L. Rev. 1362 (1953) 2These statistics were furnished by CCCO Western Region, 1251 2nd Avenue, San Francisco, CA as based upon material in government publications including House SubCommittee Hearings on the Draft, HASC #91-80, p. 12860. Chairman CRANSTON. Our next witness is Mr. Joe De Raismes, first assistant attorney general in the State of Colorado. We appreciate your coming out here for this hearing. TESTIMONY OF JOSEPH N. DE RAISMES, FIRST ASSISTANT ATTORNEY GENERAL, STATE OF COLORADO Mr. DE RAISMES. Chairman Cranston, and counsel for the committee, I am appreciative of the opportunity to appear before you this morning in order to discuss the provisions of Senate bill 364. As you have already indicated you are aware of our office's participation. We represent the State colleges and universities in Colorado and have recently participated in discussion with Senator Hart, leading toward his introduction of Senate bill 364, which is now pending before your committee. Those discussions focused on the issue of the propriety of 38 U.S.C., 1785, concerning the imposition of overpayment liability by the Veterans' Administration on colleges and universities. However, our office also raised the question of the propriety of Veterans' Administration determinations of overpayment liability based on procedures which are not in accordance with the Federal Administrative Procedure Act and in particular 5 U.S.C., 501 et seq., that is to say chapter 5 of the Administrative Procedure Act. I noticed that in the prior testimony this morning that the testimony was not focused on the administrative determination procedures and that the discussion of chapter 5 was focused primarily on the rulemaking procedures which were mandated under that chapter. The brief which I furnished as appendixes to my statement discussed this matter in some detail. And I will attempt to focus a bit more than has been focused so far in these hearings on those particular aspects of the Senate bill 364, which I think the committee has to consider in some detail since they are of critical importance to colleges and universities facing allegations of overpayment liability. After a long period of futile negotiation, our office filed a lawsuit in U.S. District Court in the District of Colorado in November of 1976, captioned State of Colorado v. Veterans' Administration, Civil No. 76-F-1114. After an abbreviated discovery period and a substantial reassessment of position on the part of the Veterans' Administration, the case went to trial in March of 1977. On April 5, 1977, Judge Finesilver, U.S. district judge, issued an opinion which I have appended to my statement. The court found that the Veterans' Administration is required to abide by the provisions of the Federal Administrative Procedure Act in determining purported overpayment liability of colleges and universities. The court initially found that the Veterans' Administration was prohibited from proceeding against colleges and universities on claims in which overpayment liability had been waived as to the veterans. However, this one part of the court's ruling was withdrawn by the court's subsequent order dated May 11, 1977, which I have also included as an appendix to my testimony. Since the case is likely to be appealed, and the State intends to press the remaining issues on cross appeal, I will not comment on the remaining issues which were raised. The critical matter for consideration by |