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REORGANIZATION PLANS NOS. 1, 2, AND 3 OF 1946
THURSDAY, JUNE 13, 1946
HOUSE OF REPRESENTATIVES,
COMMITTEE ON EXPENDITURES
Washington, D.C. The committee met, pursuant to adjournment, at 10 a. m., the Hon. William M. Whittington presiding.
Mr. WHITTINGTON. The committee will be in order.
Mr. Walter, you may proceed. Give the reporter your name and interest in the matter.
STATEMENT OF HON. FRANCIS E. WALTER, A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF PENNSYLVANIA
Mr. WALTER. Francis E. Walter, Member of Congress from Pennsylvania.
Mr. Chairman, the United States Employees' Compensation Commission was created about 30 years ago under a statute, 39 Stat. 742. Mr. WHITTINGTON. We are familiar with that.
Mr. WALTER. And subsequent to the erection of the Commission by this statute functions were delegated to it under the Longshoremen and Harbor Workmen's Compensation Act and under the compensation laws for the District of Columbia. It is the opinion of members of the Judiciary Committee, of which I happen to be a member, that plan 2 is illegal in that the abolition of this commission would affect functions given to the commission by subsequent statutes. In that connection, I wish to submit a brief.
Mr. WHITTINGTON. Are there any functions abolished under this organization so far as that agency is concerned?
Mr. WALTER. Functions would not be abolished. However, there would be a delegation to a commission within the Social Security Administration the things that are provided for by statute, and in that respect we think the plan is illegal.
Mr. WHITTINGTON. And under the Administrator?
STATEMENT BY CONGRESSMAN WALTER RE QUASI-JUDICIAL FUNCTIONS OF THE
UNITED STATES EMPLOYEES' COMPENSATION COMMISSION The United States Employees' Compensation Commission was established by Congress 30 years ago as the Federal Workmen's, Compensation Commission (39 Stat. 742). Its early, function was to adjudicate workmen's compensation claims of Federal' employees, but in the intervening years its jurisdiction was (xtended to other groups subject to the exclusive Federal jurisdiction, notably, by the enactment of the Longshoremen's and Harbor Workers' Compensation Act, and extensions of that act as the workmen's compensation law for the District of Columbia, and the workmen's compensation law covering all employees of Government contractors outside continental United States.
The largest number of cases reported to it arise directly from private industry. In its major function the Commission is purely quasi judicial; that is, in making after-the-fact determination of the rights of private parties.
The right of an employee to workmen's compensation is a right of statutory origin given to employees in substitution for their earlier common-law court actions against their employers. The right is fundamental, and not an act of grace.
The quasi-judicial function which the Commission exercises is this : Upon the occurrence of injury death of industrial origin, formal claim is filed by the employee or dependent, invoking the Commission's jurisdiction to act. The employer (or his insurance carrier) in responsive pleading files answer to the claim. Upon filing the answer, informal prehearing conference is employed by the trier of facts (the Commission's deputy commissioner) amicably to adjust the differences. If not successful, then issues are agreed upon. Following this, there is a formal hearing open to the public, with a presiding deputy commissioner. Testimony is presented which is stenographically reported by a court reporter. The parties come represented by their counsel. The rules of evidence are observed, witnesses are sworn, and the hearing is conducted in striet conformity with procedural due process of law as required by the Constitution, the common law, and the interpretations thereof by the United States Supreme Court. The trier of facts (deputy commissioner) performs the same funcțions as a Federal court judge sitting in nonjury cases. He must rule on admissibility of the evidence, upon objections, and conduct the hearing in an impartial, unbiased manner. Following the hearing, the deputy commissioner must make his decision on the evidence and the law. His decisions must follow principles of law accepted by the Supreme Court and other Federal courts, Like those of a Federal judge in non. injury cases, his findings, supported by evidence, are final. His decisions are reviewable only on questions of law, and many of the decisions finally are reviewed by the United States Supreme Court. No Federal court judge, sitting upon noninjury cases, could do more in the exercise of the pure judicial function, than the trier of facts does under the Longshoremen's Act. The deputy commissioner of the Commission is not a court, because he is not part of the Federal judiciarybut his function in its very essence is quasi judicial. His decisions affect :'undamental rights, and very valuable property rights. The amounts involved may be very substantial-some decisions involve as much as $10,000 to $15,000 or more. He must he skilled and fully qualified in his field—for court reversal would promptly disclose incompetence.
In its administration of other workmen's compensation laws the Commission performs the quasi-judicial function in determining substantive rights. It must receive and weigh the evidence, and make its decisions through the combined judgments of its three-member, bipartisan, commission-form of tribunal.
The United States Employees' Compensation Commission was patterned by Congress upon similar quasi-judicial bodies set up by the States. Three States have direct court administration (the State judges directly determine the rights of the parties), the remaining 44 States have specialized tribunals to relieve the courts, much like the Federal commission. Of the 44 States, 36 States have independent workmen's compensation commissions, with three, five, seven or more members whose duties are parallel with those of the Federal commission. The eight remaining States have departmentalized administration, but retain the identity of the workmen's compensation tribunal.
The courts, Federal and State, recognize the quasi-judicial nature of these workmen's compensation tribunals. In many decisions this recognition appears.
The following cases hold that workmen's compensation commissions, in conducting hearings and making awards, act in "judicial capacity":
Doby v. Miami Trust Co., 5 P. (2nd) 187; 39 Ariz. 228 (1933).
U. 8. Fidelity and Guaranty Co. v. Industrial Commission,, 26 P. (2nd) 1012; 42 Ariz. 422 ) 1934).
Carstens v. Pillsbury, 158 P. 218; 172 Cal. 572 (1916).
State ex rel Brewen-Clark Syr. Co. v. Missouri Workmen's Compensation
In re Hayes, 156 N. E. 791; 200 N. C. 133; 73 A. L. R. 1179 (1931).
Denver and A. G. W. R. Co, v. Industrial Accident Commission, 279 P. 612;
74 Utah 316 (1929). and that such workmen's compensation tribunals are vested with quasi-judicial powers:
In re Stone, 117 N. E. 669, 66 Ind. App. 38 (1932).
Allied Mutuals Liability Ins. Co. v. Interstate Cork Co., 235 N. Y. S. 511; 134
Higgins v. William Pocahontas Coal Co., 138 S. E. 112; 103 W. Va. 504 (1927). Similar specific recognition has been given by the Federal courts in respect to the functions under the United States Employees' Compensation Commission. In Paramino Lumber Co. v. Marshall (Commission's deputy commissioner) (18 Fed. Supp. 645), the court said that “The deputy commissioner (of the United States Employees' Compensation Commission) is a quasi-judicial officer having certain recognized jurisdictional and discretionary powers (33 U. S. C. A. sec. 919), and being such, it is presumed he will attempt to do only his legal duty.”
The Solicitor General of the United States stated that the deputy commissioner of the United States Employees' Compensation Commission, when he makes à determination on a case, is acting in a quasi-judicial capacity (285 U. S. 29, 30).
The Supreme Court of the United States recognized the quasi-judicial nature of the Commission's function in its decision in Crowell v. Benson (285 U. S. 22). Mr. Justice Brandeis (at p. 75) spoke of review of the "quasi-judicial decisions” of the Federal tribunals such as exist under the Longshoremen's Act, and again at page 88, be referred to the Longshoremen's Act and to the power entrusted thereunder "to make initial determinations in matters within, and not outside, ordinary judicial purview."
The Court of Appeals of New York said that "referees in workmen's compensation cases in quasi-judicial capacity”; Pflug v. Klinck (240 N. Y. S. 740 ; 229 App. Div. 54, affirmed 177 N. E. 142, 256 N. Y. 564 (1930)). (Note, Congress adopted from the New York law, the Longshoremen's Act which the United States Employees' Compensation Commission administers.) Similarly the court in Butler v. Ind. Com. of Ariz. (111 P. (20) 628, 631 ; 57 Ariz. 119), held that “the Industrial Commission of Arizona in making its awards of compensation is acting as a 'quasi-judicial body'."
In the past, Congress has_consistently refused to disturb the independent status of the United States Employees' Compensation Commission principally because an independent, bipartisan Commission was necessary effectively to carry out the Congressional policy to give litigants and claimants the benefit of a fair, impartial, and uninfluenced bipartisan judgment. Also because of the quasi-judicial nature of the Commission's functions it was deemed unwise to impair those functions by assimilation with another agency. In this connection the Joint Committee on Reorganization in its report (House Rept. No. 937, 68th Cong.) filed June 3, 1924, recommended that the United States Employees' Compensation Commission be retained as an independent establishment, dismissing the idea of a transfer of its functions, with the statement that:
“The principle involved requires the complete independence of all organizations having quasi-judicial functions from even the appearance of arbitrary control.”
This action was entirely consistent with the original intention of establishing the Commission as an independent agency. When the Employees' Compensation Act was enacted in 1916, the following Congressional Policy was adopted :
“It seemed to the committee that the administration of this act could best be performed by an independent Commission. It is a matter concerning the relations between the Government as a whole and its employees as a whole, and for that reason should not be placed under the supervision of any one department. Nearly all the compensation acts in this country provide for administration by a commission."
The recent report of the Senate Joint Committee on Reduction of NonEssential Federal Expenditures again recognized the principle of excepting quasijudicial agencies in its statement concerning placing agencies under Cabinet control-the report (p. 1) stating:
“Transfer of all independent establishments whose functions are primarily executive or administrative (excepting quasi-judicial or quasi-legislative agencies to appropriate departments." (Report submitted by Senator Byrd, May 1, 1946.)
Plan No. 2 violates section 5 (a) (6) of the Reorganization Act because as an agency exercising quasi-judicial functions, the Commission no longer could give the collective three-member bipartisan judgment upon cases which the present law requires in fact, the Commission would be abolished. Moreover, under the plan, a superappeals board would have power to veto the exercise of judgment which the present compensation act authorizes. The "limitation on judgment” which the Reorganization Act forbids, is apparent. Congress cannot constitutionally delegate legislative power to abolish a statutory
agency The Constitution places exclusively in Congress the power to legislate. This power cannot be delegated. The United States Supreme Court has repeatedly stated that Congress cannot abdicate or to transfer to others the essential legislative functions with whom it is vested. It can delegate fact-finding and rulemaking powers, provided it enacts standards within the framework of which such delegated functions can be confined. Beyond that it cannot constitutionally go.
In plan No. 2 the President abolished the United States Employees' Compensation Commission. Such Commission was created by statute, and can be abolished only by specific act of Congress. To delegate legislative power to the President to abolish unspecified agencies under a general policy which is concerned with economy in general, is to abdicate an essential legislative function, which is plainly unconstitutional. The power purportedly given in the Reorganization Act is the power to act, not to carry out ministerial functions within well-defined standards. If the power were only to make findings to be reported to Congressfor affirmative action by Congress-such delegated power would be valid. But, power to abolish unspecified agencies is a power which cannot be delegated.
A similar attempt to delegate power was undertaken in the National Recovery Act under a broad policy of Congress, stated in the act, to relieve against economic distress. This was held to be unconstitutional in Schechter Poultry Co. v. United States (295 U. S. 495). The opinion of the Supreme Court serves as a plain answer to the question whether power to abolish unspecified agencies of the Government can be delegated. In part, the Supreme Court said :
"The Congress is not permitted to abdicate or to transfer to others the essential legislative functions with which it is thus vested.
But Congress cannot delegate legislative power to the President to exercise an unfettered discretion to make whatever laws he thinks may be needed or advisable for the rehabilitation and expansion of trade or industry.
This Court has held that delegations may be unlawful through the act to be performed is definite and single, if the necessity, time, and occasion of performance have been left in the end to the discretion of the delegate.”
General principles in this respect are to be found in 11 American Jurisprudence, as follows:
"Since under the doctrine of the separation of the powers of government the law-making function is assigned exclusively to the legislature; it is a cardinal principle of representative government that
the legislature cannot delegate the power to make laws to any other authority or body” (sec. 214).
“One of the most important tests as to whether particular laws amount to an invalid delegation of legislative power is found in the completeness of the statute as it appears when it leaves the hands of the legislature. The generally recognized principle is that a law must be so complete in its terms and provisions that nothing is left to the judgment of the
delegate. The law must be perfect, final, and decisive in all of its parts, and discretion which is given must relate only to execution” (sec. 215).
“The rule is well established that the legislature cannot authorize the suspension of a law by another agency ever in cases where it has the power to suspend the law" (sec. 230).
Congress thoroughly understood these principles when it considered earlier reorganizations. The Reorganization Act is not a wartime emergency measure. The wide latitude given the Executive in war measures has seemed to dim the light upon well-established contributional principles. To get' a true focus upon proper relationships in our three-branch Government, it would be well to note the attention paid to constitutional barriers in less violent times. House Report No. 1126 (April 25, 1932) wrestled with the same problem and gave it intensive study in considering Government reorganization. The following from the report is vitally important:
"Title IV has reference to the reorganization of the Government departments. In order to deal with this problem expeditiously, wide powers are given to the President for the purpose. The committee has been careful, however, to stay well within constitutional limitations. It is not believed that any part of this bill delegates to the President powers inhibited by the fundamental law.
"This section (sec. 403) should be read and construed in connection with section 406, which prohibits the President from abolishing any department or agency created by statute and from destroying its functions. The power to abolish agencies of the Government created by statute cannot be delegated under the Constitution. The limitations in section 406 were, therefore, imposed.”
The Constitution has not been changed since the foregoing was written, nor has any decision of the Supreme Court altered the view ; in fact, it was later in effect reaffirmed by the Supreme Court in the Schechter case.
Later reorganization acts specifically recognized the fact that such power can not be delegated. In the Reorganization Act of 1937 (S. 2700, 75h Cong.) it was spcifically provided that the President could not abolish any independent agency. The Reorganization Act of 1939 required affirmative legislative action to give it validity (S. 1706, 76th Cong., S. Rept. No. 142, March 6, 1939),
In another significant case, Humphreys Executor v. United States (295 U. S. 602), the Supreme Court held that the President could not remove from office a Commissioner of the Federal Trade Commission except under conditions specifically stated in the aet creating the Commission, because that Commission was created by Congress, as an independent, nonpartisan body of experts whose duties were premominately quasi-judicial, which “must, from the very nature of its duties, act with entire impartiality." (The Court said further that "Its duties are neither political nor executive, but quasi-judicial' ** authority of Congress, in creating quasi-judicial agencies, to require them to act in 'discharge of their duties independently of Executive control can not well be doubted;, and that authority includes
power to fix the period during which they shall continue in office.”)
In abolishing the Commission, therefore, the President sought to exért a power not constitutionally his to-employ. If the error is not corrected, litigation by an aggrieved employer or employee under the Longshoremen's Act may produce great chaos and confusion, if the Supreme Court orders undone any change purportedly wrought.
Mr. WHITTINGTON. The first witness this morning will be Msgr. John O'Grady. You may make your preliminary statement and tell us the interest you represent and the plan that you either oppose or advocate.
STATEMENT OF RT. REV. MSGR. JOHN O'GRADY, SECRETARY,
NATIONAL CONFERENCE OF CATHOLIC CHARITIES
Monsignor O'Grady. My name is Rt. Rev. John O'Grady. My official title is secretary of the National Conference of Catholic Charities. I thank you for the opportunity to appear.
Throughout the last 10 months, I have been serving also as chairman of an informal group of more than 35 public-interest national organizations that have long been studying this important problem of
1 This is precisely the position of this brief.