Petition for Writ of Certiorari — Elof Hansson, Inc. v. United States (No. 380)

Supreme Court brief1961

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Text

orchie COURT. eae

gViPkrele °:

ING, Clerk |

ail

is Tre

Supreme Conrt of the United States

Ocroper Teem, 1969

Kor Haxssos, INe..

Petitioner

Usirep STATES.

Respondent

Petition for a Writ of Certiorari to the United States

Court of Customs and Patent Appeals

James R. Suanp

1108 - 16th Sireet, NW.

Washington 6. D.C.

< Counsel for Petitioner

Of Counsel:

Myron Souter, Esq.

SHarep & BoGan

WILSON - EPES PRINTING Co. - RE 7-6002 - WASHINGTON 1. D. C.

INDEX

PAGE

CITATIONS TO OPINION BELOW 2000000000000... 1

ei) ky |. Sea Teo STORRS M4

QUESTION PRESENTED ...........0020.000000000.00. cc 2

ue igs - RE 4 | See :

a . 2

REASONS FOR GRANTING THE WRIT ................ 4

RRS A eae to a 8

ee eee eS on. AT

B—Opinions and Judgment Below ~....... B-1

C—Conflicting Opinions -......0...0......-..-.- (*-1

CITATIONS

Cases:

Amerada Petroleum Corp. v. Federal Power Com-

— sion, 231 F. 2d 461 (10th Cir., 1956) 0000 .. 6

Eastern Air Lines, Inc. vy. Union Trust Co., 221

F. 2d 62 (D.C. Cir., 1955) rev'd on other

grounds, 350 U.S. 907, orig. holding adhered to

239 F. 2d 25, cert. denied 3583 U.S, 942 _... iccices 6

Hotch v. United States, 212 F. 2d 280 (9th Cir.,

I ie a a, Ges ete D

United States vo Tucker Truck Lines, 344 U.S.

(LE ARO TTE ES i 8 neo ee OF LCOS Oo TT 4

Statutes:

Administrative Proeedure Act, 60 Stat. 238-239:

mee. (a) (5 U.S.C. See. 1008)... 27

See. 10(e) (5 U.S.C. See. 1009)... a

Antidumping Act of 1921, See. 201(a) 42 Stat.

1 (198 UBC. See. 160, 1952 Ed.)........ o 2

Pub. Law 85-630, 72 Stat. 583 _.... Gera os We the ado 2

In THE

Supreme Lourt of the United States

Ocropern Teem, 1961

No.

EMior Hansson, INe.,

Petitioner

Vv.

Usitep STATES,

Respondent — -

Petition for a Writ of Certiorari to the United States

Court of Customs and Patent Appeals

Blof Hansson, Inc., petitioner herein, prays that a

writ of certiorari issue to review the judgment of the

United States Court of Customs and Patent Appeals,

entered in the above entitled ease on December 22, 1960.

CITATIONS TO OPINIONS BELOW

The opinion of a single judge of the United States

Customs Court) sitting in) reappraisement (R. 76) is

reported in 41 Cust. Ct. 519. The opinion of the Appel-

late Term of the United States Customs Court (R. 9S)

is reported in 43 Cust. Ct. 627. The opinion of the

United States Court of Customs and Patent) Appeals,

printed in Appendix B hereto, infra, p. B38, is reported

in Treasury Decision Advance Sheets, Vol. 96, No. 24,

June 15, 1961, p. 71.

JURISDICTION

-The judgment of the United States Court of Customs

and Patent Appeals was entered on December 22, 1960.

Infra, p. B-2. Rehearing was denied on June 9, 1961.

Infra, p. B-9. The jurisdiction of this Court is invoked

under 28 U.S.C., Section 1254(1).

QUESTION PRESENTED

Whether failure to publish notice of proposed rule

making in the Federal Register as required by Sectien

4(a) of the Administrative Proeedure Act renders in-

valid a finding of dumping made by the Secretary of the

Treasury under the Antidumping Act of 1921.

STATUTES INVOLVED

Sections 4(a) and 10(e) of the Administrative Pro-

eedure Act of 1946, 60 Stat. 238-239, 5 U.S.C. $$ 1103

and 1009 printed in Appendix A, mfra, p. A-1. Seetion

201(a) of the Antidumping Act of 1921, 42 Stat. 11, 19

U.S.C. § 160 (1952 edition), printed in Appendix A, infra,

p. A-2.. Publie Law &5-630, 72 Stat. 583, amending Sec-

tion 201(b) of the Antidumping Act of 1921, printed in

Appendix A, imfra, p. A-3.

STATEMENT

The Seeretary of the Treasury commenced a dumping

investigation on about March 31, 1953 in aecordanee with

the provisions of Section 201 of the Antidumping Act of

1921 with respect -to hardboard imported from Sweden.

(R. 11.) Notice of the dumping investigation was not

published in the Federal Register as required by Section

4(a) of the Administrative Procedure Act. (R. 16-17.)

Petitioner herein reeeived actual notice of the dumping

investigation on about May 5, 1953, and participated in

that Investigation. (R. 12.) Thereafter, the Acting See-

retary of the Treasury made and published a finding of

dumping with respect to hardboard from Sweden on

August 26, 1954 (R. 77), following which the Appraiser

of Merchandise at New York determined the “foreign

market value” and “purchase price” of the entry at bar

under the provisions of the Antidumping Act of 1921,

(R. 7.) Petitioner duly filed an appeal for reappraise-

ment by a single judge of the United States Customs

Court (R. 79), whereupon that eourt acquired jurisdie-

tion under 28 U.S.C. Section 1582. Objection to the

Secretary’s failure to publish notice of proposed rule

making was first raised by petitioner at the trial of ihe

appeal for reappraisement.

Judge Rao, sitting as a single judge of the Customs

Court in reappraisement, found that the Administrative

Procedure Act did not apply to the function of the

Secretary of the Treasury under the Antidumping Act

of 1921, and thus sustained the value found by the ap-

praiser, (Kk. 93.) Upen application for review duly

taken, the Appellate Term of the Customs Court reversed

the Judgment below and held: (1) that the requirements

of the Administrative Procedure Act are applicable to

proceedings leading to a finding of dumping under the

Antidumping Act of 1921; (2) that the Secretary of the

Treasury in making a finding of dumping is an“ agency’

within the meaning of the Administrative Procedure Act:

(3) that a finding of dumping is “rule making” within

the meaning of the Administrative Procedure Act: and

(4) that failure to publish notice of such proposed rule

making in the Federal Register as required by the Ad-

ministrative Procedure Act renders the finding of dump-

ing invalid. (R. 112.)

Upon appeal duly taken to the United States Court of

Customs and Patent Appeals, the Judgment of the Ap-

pellate Term below was reversed. The C.C.PLA. rejected

as bases of decision the questions considered controlling

by the Appellate Term below, and instead saw the “fund-

amental and underlying issue” as:

“Did appellee [petitioner herein], having actuai

notice of the pendency of the investigation

and having participated actively and without objec-

tion in the investigation preeeding the finding of

dumping, thereby waive its right to rely upon the

asserted procedural irregularity to nullify the find-

ing of dumping?” (Appendix B, infra, pp. B-3, B-+4)

Addressing itself to the question thus posed, the court

held:

“The view we take of this ease is, therefore, that

it is not necessary to pass here on the applicability

of the A.P.A. to antidumping investigations under

the Antidumping Act of 1921 .... We... hold

on the authority of the Tucker decision [United

States v. Tucker Truck Lines, 344 U.S. 33] that the

procedural irregularities which appellee asserts arose

from the failure of the Seeretary of the Treasury

to publish the notice required by Section 4 of the

A.P.A. was a procedural irregularity which the ap-

pellee has waived by participating in the antidump-

ing investigation without making timely objection

to the Secretary of the Treasury.” (Ibid., pp. B-6,

B-7.)

REASONS FOR GRANTING THE WRIT

1. The summary manner in which the C.C.P.A. de-

eided the instant case presents a significant departure

from the analysis which this Court indicated fer the

decision of such cases in United States v. Tucker Truck

Lines, thus giving rise to an important conflict of prin--

ciple. Tuis Court, in Tucker, held! that a defect in the

appointment of an I.C.C. hearing examiner, resulting

from a failure to comply with the Administrative Pro-

1Mr. Justice Frankfurter and Mr. Justice Douglas dissenting.

Appendix C, infra, pp. C-5 and C-7.

cedure Act, was “not one whieh deprives the Commission

of power or jurisdiction, so that even in the absence of

timely objection its order should be set aside as. ¢

nullity.” (Appendix (Cy infra, p. (-5.) This Court) thus

indicated in’ plain terms that there can be procedural

defects resulting from failure to comply with the Ad-

ministrative Procedure Act of sueh oa’ serious nature

that they may be asserted to nullify administrative action

whether or not objection was made before. the agency

below, and consequeniially that a determination of wheth-

er the defect complained of rises to such dignity is

essential to the decision of such eases. The court below

expressly declined to determine, or even consider, that

indispensable question and instead held, in’ effect. that

Whether or not the agency's procedural omission was

Jurisdictional, petitioner had “waived” its right to com.

plain by having had actual notice of the proposed rule

making and having failed to make timely objection. — It

is indeed startling to learn that a Jurisdictional defect

nay be waived by an affected party, and that the Himita-

tions on agency action imposed by the Administrative

Procedure Act are within the dispensing power of a

litigant. :

2. There exists a direct conflict antong several Fed-

eral circuits on one of the main questions of law pre-

sented by the instant case, viz., whether an agency rule

not formulated or issued in compliance with the publica-

tion requirements of the Administrative Procedure Act

is valid as to a party having actual notice of the rule.

The decision of the court below is in direct. conflict

with the decision of the Ninth Circuit Court. of Appeals

in Hotch v. United States, 212 F.2d 280 (9th Cir, 1954)

(Appendix C, infra, p. C-8), which held that failure to

publish a regulation as required by the Administrative

Proeedure Act renders the regulation’ a nullity, despite

actual notice of its contert by the person charged, and

despite the fact that he first objected to the procedural

Re.

irregularity by petition for rehearing to the Court of

Appeals. In turn, the Ninth Cireuit is in direct conflict

with the District of Columbia and Tenth Cireuits. In

Fastern Air Lines, Inc. v. Union Trust, 221 F. 2d 62

(DC. Cir, 1955) (Appendix C, infra, p. C-15), reed on

Other grounds 350 U.S. 907, original holding adhered to

259 FL 2d 25, cert. denied 353 U.S. 942, the District of

Columbia Circuit held that failure to adhere to the pub-

lication requirements of the Administrative Procedure

Act does not render a regulation invalid as to an affected

party who had actual notice. The Tenth Cireuit has held

that when parties affected have actual notice and par-

ticipate inoa hearing which results in the affirmance of

a prior order which was not issued in aceord with the

publication requirements of the Administrative Procedure

Act, such parties may not challenge the validity of the

subsequent order on the ground of failure to publish

notice. Amerada Petroleum Corp. v. Federal Power

Commission, 231 F. 2d 461 (10th Cir, 1956) (Appendix

(', ifra, p. C-24.)

These three cases and the ease at bar, although arising

under differing circumstances,.present the same question

of law and decide it in a conflicting manner.

3. The question presented by this petition is of mani-

fest importance to the operation of the Administrative

Procedure Act. Jurisdictional defect) in agency rule

making is in reality a question of seope of delegation of

legislative powers and the point at whieh eneroachment

by the executive on the legislature begins. The doctrine

that inheres in the instant decision would permit the

notice requirements of the Administrative Procedure Act

to be “waived,” without careful weighing of whether rule

making without the statutory notice, rises to an imper-

missible overstepping by the agency of delegated powers.

The decision below puts the stamp of appellate approval

on, and indeed invites, administrative agencies to formu-

late rules in reliance upon actual notice rather than upon

the public notice contemplated by Section 4(a) of the

Adininistrative Procedure Act. Whether such ao grave

departure from the intended effeet of the Adininistrative

Procedure Net should be tolerated is. it is believed, prop-

erly a matter of concern for this Court.

Nor does ‘the fact that the Antidumping Act of 1921

Was amended in 19587 to require the Secretary of the

Treasury to publish notices of dumping investigations

in the Federal Register moot the issue presented here,

The question arises, not under the eustoms laws, but

under the Administrative Procedure Act, and its resolu.

tion affects rule making by all the many agencies subject

to that Act.

It is also to be noted that the instant ease arose as a

test case, the outcome of whieh will control the disposi-

tion of 396 appeals for reappraisement now pending

before the Customs Court,

4. It is believed that the decision below is erroneous

in that it holds that whatever right petitioner had= to

object to the procedural irreguiarity, it waived by having

aetial notice and by participating in the investigation

Without then objecting, irrespective of whether the fail-

ure to publish notice of proposed rule making rendered

the resulting finding of dumping a/tra cores. The error

is doubly egregious ino view of Seetion 10te) of the Ad-

Inmistrative Procedure Aet, which requires that:

“(e) So far as necessary to decision a Where

presented the reviewing court) shall)... (B) hold

unlawful and set aside ageney action, findings, and

Conclusions found to be... (3) im exeess of statue

tory jurisdietion, authority, or limitations, or short

of statutory right; (4) without observance of pro-

cedure required by law; (Appendix A. dufra, pp.

A-1.)

2For convenience, the text of that amendment is set out in

Appendix A, infra, p. A-3.

If, ::s we believe, the omission of publication of notice

of proposed rule making constitutes such a serious de-

parture from the mandatory requirements of the Ad-

ministrative Procedure Act as to deprive the Secretary

of the Treasury of jurisdiction, then it is a novel propo-

sition, indeed, that a litigant may “waive” an unlawful

encroachment by the executive upon the legislature.

CONCLUSION

For the foregoing reasons, this petition for a writ of

certiorari should be granted.

Respectfully submitted,

JAMES R. SHarp

1108-16th Street, N.W.

Washington 6, D. C.

Counsel for Petitioner

Date: September 1, 1961

A-1

APPENDIX A

Section 4(a), Administrative Procedure Act

§ 1008. Rule Making

Except to the extent that there is involved (1) any

military, naval, or foreign affairs function of the United

States or (2) any matter relating to agency management

or personnel or to public property, loans, grants, bene-

fits, or contracts—

Notice, publication and contents

(a) General notice of proposed rule making shall be

published in the Federal Register (unless all persons

subject thereto are-named and either personally served

or otherwise have actual notice thereof in accordance

with law) and shall include (1) a statement of the time,

place, and nature of public rule making procecdings;

(2) reference to the authority under which the rule is

proposed; and (3) either the terms or substance of the

proposed rule or a deseription of the subjects and issues

involved. Except where notice or hearing is required

by statute, this subsection shall not apply to interpre-

tative rules, general statements of policy, rules of agency

organization, procedure, or practice, or in any situation

in which the agency for good cause finds (and incorpo-

rates the finding and a brief statement of the reasons

therefor in the rules issued) that notice and public pro-

cedure thereon are impracticable, unnecessary, or con-

trary to the public interest.

Section 10(¢), Administrative Procedure Act

§ 1009. Judicial review of ayency action

Except so far as (1) statutes preclude judicial re-

view or (2) agency action is by law committed to agency

diseretion.

e es s e

A-2

Scope of review

(e) So far as necessary to decision and where pre-

sented the reviewing court shall decide all relevant ques-

tions of law, interpret constitutional and statutory pro-

visions, and determine the meaning or applicability. of

the terms of any agency action. It shall (A) compel

agency action unlawfully withheld or unreasonably de-

laved; and (B) hold unlawful and set aside agency

action, findings, and conclusions found to be (1) arbi-

trary, capricious, an abuse of diseretion, or otherwise

not in accordance with law; (2) contrary to constitu-

tional right, power, privilege, or immunity; (3) in excess

of statutory jurisdiction, authority, or limitations, or

short of statutory right; (4) without observance of pro-

cedure required by law; (5) unsupported by substantial

evidence in any case subject to the requirements of see-

tions 1906 and 1007 of this title or otherwise reviewed

on the record of an ageney hearing provided by statute;

or (6) unwarranted by the facts to the extent that the

facts are subject to trial de novo by the reviewing court.

In making the foregoing determinations the court shall

review the whole record or such portions thereof as may

be cited by any party, and due account shall be taken

of the rule of prejudicial error.

Section 201(a), Antidumping Act of 1921

See. 201. (a) Whenever the Secretary of the Treas-

ury (hereinafter in this Act called the “Secretary”),

after such investigation as he deems necessary, finds

that an industry in the United States is being or is

likely to be injured, or is prevented from being estab-

lished, by reason of the importation into the United

States of a class or kind of foreign merchandise, and that

merchandise of such class or kind is being or is likely

to be sold in the United States or elsewhere at less than

its ‘air value, then he shall make such finding public to

the extent he deems necessary, together with a descrip-

A-3s

tion of the class or kind of merchandise to which it ap-

plies in such detail as may be necessary for the guidance

of the appraising officers.

Public Law 85-630

AN ACT

To amend certain provisions of the Antidumping Act,

1921, to provide for greater certainty, speed and. effi-

ciency in the enforcement thereof, and for other purposes.

Be it enacted by the Senate and House of Repre-

sentatives of the United States of America in Congress

assembled, That Section 201 of the Antidumping Act,

1921, (19 U.S.C. 160) is amended as follows:

(2) By striking out “he shall forthwith authorize” in

subsection (b) and inserting in Heu thereof “he shall

forthwith publish notice of that fact in the Federal

B-1

APPENDIX B

UNITED STATES COURT OF

CUSTOMS AND PATENT APPEALS

Wednesday, Octoher 12, 1960

At a session of said court continued and held at. the

city of Washington, pursuant to adjournment, on this

12th day of October, A. D. 1960.

Present the Honorable Eugene Worley, Chief Judge,

and the Honorables Giles S. Rich, 1. Jack Martin, and

Arthur M. Smith, Associate Judges, and the Honorable

William H. Kirkpatrick, United States Senior Judge for

the Eastern District of Pennsylvania.

~The court was opened for business in due form,

> & a e % a * *

Customs Appeal No. 5052

Tue Usitep Srates,

Appellant

Mier TANsson, PNxe..

Appellee

Said appeal came on to be heard before the court

and after hearing the arguments of counsel on behalf

of the Government and Robert (. Keck as amicur curiae

and counsel for the importer the eause was taken under

advisement by the court. Appellee granted three weeks

to file supplemental brief and appellant) granted two

Weeks to reply.

B-2

UNITED STATES COURT OF

CUSTOMS AND PATENT APPEALS

Thursday, Deeember 22, 1960

At a session of said court continued and held at the

city of Washington, pursuant to adjournment, on this

22nd day of December, A. D. 1960.

Present the Honorable Eugene Worley, Chief Judge,

and the Honorables Giles S. Rich, I. Jack Martin, and

Arthur M. Smith, Associate Judges, and the Honorable

William Tf. Kirkpatrick, United States Senior Judge for

the Eastern District of Pennsylvania.

The court was opened for business in due form.

* * * * x s e *

Customs Appeal No. 5082

THe Unitep States,

Appellant

Evor Hansson, INc.,

Appellee

Said appeal having heretofore been brought on to be

heard before the eourt and due consideration thereon

having been had, it is—

ORDERED that the judgment of the United States

Customs Court be, and the same is hereby, reversed,

and said cause is remanded to said court for further

proceedings consistent with the views expressed in the

opinion of this court herein.

8.3

[Date of Decision: Dee. 22, 1960]

UNITED STATES COURT OF

CUSTOMS AND PATENT APPEALS

October Term 1960

Customs Appeal No. 50382

THe Unitep States,

Appellant

Vv.

Erior Hansson, INe.,

Appellee

SMITH, Judge.

The single judge Customs Court in Reap. Dee. 9212

sustained the determination of the Acting Secretary of

the Treasury (89 Treas. Dee. 197, TLD. 58567) made

pursuant to the Antidumping Act of 1921 (19 U.S.C.

160) that “the industry manufacturing hardboard! in

the United States is likely to be injured by reason of

the importation into the United States of hardboard

from Sweden, and that hardboard from Sweden is being

sold and is likely to be sold in the United. States at less

than its fair value.” The judement of the trial court

was reversed by the Third Division, Appellate) Term

(A.R.D. 114) and the present appeal was taken.

The Appellate Term = stated the primary issue to be

“whether the Adminjstrative Procedure Aet (5) USC

§ 1001, June 11, 1946, ch. 325; 60 Stat. 2837 as amended)

applied to findings of dumping made under the <Anti-

dumping Act of 1921." The trial court held that the

1 Hardboard is a hard, dense board made from wood fibers

interfelted and compressed under heat and pressure. (This foot-

note added.)

B-4

Administrative Procedure Act? did not apply while the

Appellate Term held that it did.

It is our opinion, however, that the stated issue is not

the primary issue requiring decision. The fundamental

and underlying issue as we see it is: Did appellee,

having actual notice of the pendency of the investigation

by the Secretary of the Treasury under the Antidumping

Act of 1921; and having participated actively and with-

out objection in the investigation preceding the finding

of dymping, thereby waive its right to reply upon the

asserted procedural irregularity to nullify the finding

of dumping?

The facts pertinent to a determination of this issue

are that the antidumping investigation, which lasted one

and one-half years and culminated in the presently chal-

lenged finding of dumping, originated in a petition dated

March 31, 1953, which was filed with the Secretary of

the Treasury by the Hardhoard Association as repre-

sentative of all, but three, of the domestic manufactur-

ers of hardboard. ay

Within a month after filing the petition, Mr. Geller, an

Examiner of Merchandise from the office of the Ap-

praiser of Merchandise, contacted representatives of ap-

pellee and informed them of the petition, told them that

the Secretary of the Treasury was making an investi-

gation, solicited information in the form of analytical

data, and invited appellee’s participation in the proceed-

ings, Appellee participated in the proceedings and sup-

plied data to Mr. Geller under a cover letter dated May

dD, 1953. 3

The testimony also establishes that from April 20,

1958, and extending through the spring and summer of

1953, there were numerous conferences between a Mr.

Weitzel, Assistant to the Assistant Secretary of the

2 Hereinafter referred to as the A.P.A.

B-5

Treasury, and the importers of Swedish hardboard, in-

eluding appellee, concerning the investigation. These

conferences sometimes involved the importers and some-

times their attorneys, as well as representatives from

the foreign embassies and from the domestie industry.

Information was communicated both in verbal discussions

and in writings. The exhibits here include a letter dated

June 29, 1953, from appellee to the Commissioner of

Customs, containing a request for a copy of the Hard-

board Association’s petition. Another letter is one dated

June 30, 1953 from the attorneys for appellee requesting

an opportunity to be heard and to submit. evidence,

should the bureau find that a “prima facie ease of dump-

ing is established.” There was an extensive correspond-

ence by appellee’s attorneys directed to the Customs

Bureau with respect to the investigation.

On August 21, 1953, while the investigation was pend-

ing, appellee purehased the merchandise, the appraise-

ment of which is here in issue. On October 13, 1953,

the Acting Commissioner of Customs issued a letter

authorizing all appraisers to withhold appraisements of

entries of Swedish hardboard, and te issue the Customs

Form 6459 Notice of Withheld Appraisement.* Copies

of this notice were sent to appellee and to the collector.

On December 3, 1953, appellee’s merchandise was en-

tered, and appellee acquiesced without objection to with-

holding the appraisement after receipt of notice thereof

on Customs Form 6459.0 Approximately nine) months

later, the investigation was completed and the Acting

Secretary, on August 26, 1954, made the finding of

dumping which was published in the Federal Register

on September 3, 1954 (19 F.R. 5631). Shortly there-

after, on September 9, 1954, notice of appraisement was

3 Form 6459 contains the following statement: ‘“Appraisement

is being withheld on * * * pending investization as to whether

or not the said merchandise is being imported in violation of

the Antidumping Act of 1921.”

B-6

sent to appellee, who soon thereafter instituted the pres-

ent action.

No notice of the investigation was published in the

Federal Register. However, all of the importers of

Swedish hardboard whose merchandise was either await-

ing appraisement on, or was entered subsequent to,

October 13, 1953, reeeived Customs Form 6459 notices.

In addition, the testimony indicates that the importers,

embassies and domestic producers received actual notice

of the petition and that they actively participated in the

investigation from the outset. At no time during the

course of the entire investigation was any issue raised

before the Sceretary, either directly or through the Cus-

toms Bureau, of any procedural irregularities in the in-

vestigation based on alleged non-compliance with the

A.P.A. provisions requiring the publication in the Federal

The best interests of orderly procedure require that

if any right or interest of appellee were infringed or

even endangered by the procedure followed in the investi-

gation, appellee should have made _ timely objection

thereto.

The only asserted procedural irregularity in the anti-

dumping investigation here in issue is the failure, based

on appellee’s theory that the finding of dumping was

“rule making,” of the Secretary of the Treasury to pub-

lish notice of the proceeding in the Federal Register

as required by Section 4 of the A.P.A.

These facets seem to us to bring the present case

squarely within United States v. Tucker Truck Lines,

3d44 U.S. 33. It is our opinion that the Tucker decision

clearly requires that the issue here sought to be raised

should have been raised by timely objection at the ad-

ministrative level. Appellee’s position here is aptly

characterized, in the words of the Tucker decision as

eee B-7

being “clearly an afterthought, brought forward at the

Jast possible moment to undo the administrative proceed.

ings without consideration of the merits and [which |

can prevail only from teehnical compulsion irrespective

of considerations of practical justice.” (dd. p. 36.)

Applicable here, is the rationale of the Tucker case,

as stated by the Supreme Court, that

Courts should not topple over administrative deci

sions unless the administrative body not) only has

erred but has erred against objection made. (/id.

p. 37.)

The view we take of this case is, therefore, that it is

not necessary to pass here on the applicability. of the

A.P.A. to antidumping investigations under the Anti-

dumping Act of 1921. We disiniss, on the authority of

the Tucker decision, appellee’s argument that) the pro

eedurai irregularity resulted in the loss of ageney juris.

diction so that the order is totally void. The holding

in the: Tucker case is directly contrary to appellee's

position that the procedural irregularity Vere was con

verted into a jurisdictional irregularity.

Appellee relies heavily upon the deeision in Hoteh vy.

United States (C.A. 9th) 208 F.2d 244 (1953), petition

for rehearing granted, 208 F.2d 249, petition for rehear-

ing denied, 212 F.2d 280 (1954), to support its position.

We think the Fotch case is clearly distinguishable and

is, therefore, not controlling here.

In the Hotch case, as distinzuished from the instant

situation, Hotech had no opportunity to object. to the

procedures followed by the Seeretary of the Interior

prior to the criminal action against him. Hoteh had no

notice of and did not participate in the “rule-making”

hearings. The issue upon which our decision turns, viz.

whether a participant in administrative proceedings can

raise a procedural objection for the first time on appert

to the courts, was never before the court in the Match

B-8

case and, therefore, was not decided. Thus that case

ix not pertinent in determining the matters here in issue.

We, therefore, hold on the authority of the Tucker

decision that the procedural irregularities which appellee

asserts arose from the failure of the Secretary of the

Treasury to publish the notice required by Section 4 of

A.PLAL was a procedural irregularity which appellee has

waived by participating in the antidumping investigation

without making timely objcetion to the Secretary of the

Treasury.

The view we take of this issue makes it unnecessary

to pass upon either the issue of applicability of the

A.PLA. to an antidumping investigation under the Anti-

dumping Act of 1921 or the issue of whether or not the

finding of dumping was “rule making” as defined in the

A.P.A. and leaves for our consideration only the issue

based on appellee’s contention that the Secretary erred

in finding that the domestie hardboard industry would

be “injured” by the nnports of Swedish hardboard.

The specific language placed in issue by this contention

is found in Section 201(a) of the Antidumping Act of

1921, as follows:

(a) Whenever the Seeretary of the Treasury

(hereimaiter called the “Secretary”), after such in-

vestigation as he deems necessary, finds that an

industry in the United States is being or is likely

to be injured, or is prevented from being established,

by reason of the importation into the United States

of a class or kind of foreign merchandise, and that

merchandise of such class or kind is being sold or

ix likely to be sold in the United States or elsewhere

at less than its fair value, then he shall make sueh

finding publie to the extent be deems necessary, to-

gether with a description of the class or kind of

mershandise to whieh it applies in) such detail as

may be necessary for the guidance of the appraising

officers.

B-9

It is appellee’s contention that when Congress used

the word “injured™ ino the said) section it meant “de-

stroved."” Tt is fatal te appellee's position on this issue

that it has produced neither evidence as to the construe

tion plaeed upon the word “injured™ by the Seeretary

nor evidence to indicate what the Seeretary found with

respect to the effeets of the imports upon the domestic

industry.

In this ccanection, appellee directs the attention of

the court to a report of the Tariff Commission on the

hardboard industry, made at the request of the Senate

Committee on Finance for certain information. Appellee

suggests that we either accept the Tariff Comiiission's

findings as those of the Secretary or reevaluate the evi-

dence to make our own findings.

In Aleberg & Co, (luew) ve Cnited States, 21. COPA

110, T.D. 46446 (1955), this court, after a review of the

pertinent cases, said:

iis we are not at liberty here to go into an

Investigation as to whether the facets shown on the

trial below justified the issuanee of the order com

plained of, Under the statute, the Secretary was

not confined to any particular source of information

or means of investigation. Furthermore, suelo in

formation as he might obtain was not open toe pubite

Inspection, Unless he felt that the publie interest so

required, Norweqin Nitrogen Products Ca. ov.

United States, 20 CLCLPLA. (Customs) 27. TLD. 45074,

affirmed in J8s U.S, 294.

The judgment is rerersed,

is reversed,

REVERSED

~B-10

UNITED STATES COURT OF

CUSTOMS AND PATENT APPEALS

Monday, June 5, 1961

At a session of said court continued and held at the

eity of Washington, pursuant to adjournment, on this

oth day of June, A.D. 1961.

Present the Honorable Eugene Worley, Chief Judge,

and the Honorables Giles S. Rich, I. Jack Martin, and

Arthur M. Smith, Associate Judges, and the Honorable

William H. Kirkpatrick, United States Senior Judge for

the Eastern District of Pennsylvania.

The court was opened for business in due form.

@ & * * ® e * e

Customs Appeal No. 5032

Ture Unitep States,

Appellant

E.or Hansson, INc.,

Appellee

Appellee having duly filed petition for rehearing and

due consideration thereon having been had, it is—

ORDERED that said petition be, and the same _ is

hereby, denied.

“a

C-1

APPENDIX C

Unitep States or AmMertca and Interstate

Commerce Commission,

Appellants

Vv.

L. A. Trekker TrveKx Lixes, INc.

Mr. Justice Jackson delivered the opinion of the Court.

One Cunningham applied to the Interstate Commerce

Commission for a certifieate of publie convenience and

necessity to authorize extension of his existing motor

carrier route.’ A railroad and eleven motor carriers,

including appellee, intervened to, oppose. The issues

were referred to an examiner who after hearing recom-

mended that. with exceptions not material here, a cer-

tificate be granted. Appellee excepted, whereupon Divi-

sion 5 of the Commission, in substance, approved. the

recommendation. Appellee requested reconsideration bh)

the full Commission, whieh was denied, and then peti-

tioned for “extraordinary relief," which also was refused.

The Commission thereupon issued a certificate to Cun-

ningham. Appellee upon the ground that the evidence

did not show need for the additional transportation serv-

ice, petitioned the Distriet Court to set aside the certifi-

‘ate and order. The Commission and the United States

answered and a three-judge court was convened.

On the day appointed for hearing, appellee moved for

leave to amend its petition to raise, for the first time, a

contention that the Commission's action was invalid for

want of jurisdiction because the examiner had not been

appointed pursuant to $11 of the Administrative Pro-

cedure Act2 The District Court allowed amendment and,

149 USC § 307.

25 USC § 1010.

C-2

upon proof that the appointment had not been in accord-

ance with that Act, invalidated the order and certificate

without going into the merits of the issue tendered in

the original complaint.4| This appeal by the United States

and the Interstate Commerce Commission raises but a

single question—whether such an objection, first made

at that stage of the proceedings, was not erroneously

entertained. We hold that it was.

Appellee did not offer nor did the court require any

excuse for its failure to raise the objection upon at least

one of its many opportunities during the administrative

proceeding. Appellee does not elaim to have been misled

or in any way hampered in ascertaining the facts about

the examiner’s appointment. It did not bestir itself to

learn the facts until long after the administrative pro-

ceeding was closed and months after the case was at issue

in the District Court, at which time the Commission

promptly supplied the facets upon which the contention

was based and sustained.

The apparent reason for complacency was that it was

not actually prejudiced by the conduet or manner of

appointment of the examiner. There is no suggescvon

that he exhibited bias. favoritism or unfairness. Nor is

there ground for assuming it from the relationships in

the proceeding. He did not aet and was not expected

to aet both as prosecutor and judge. The Commission,

Which appointed him, did not institute or become a party

in interest to the proceeding. Neither it nor its examiner

had any function except to decide justly between eon-

testants in an adversary proeceding. The issue is clearly

an afterthought, brought forward at the last possible

moment to undo the administrative proceedings without

consideration of the merits and ean prevail only from

technical compulsion irrespective of considerations of

practical justice.

3100 F. Supp. 432.

C-3

In Riss & Co. ve. United States, 341 US 907, 95 TL. ed

1845, 71 S. Ct. 620, this Court held that officers bearing

applications for certificates of convenience and necessity

under § 207(a) of the Interstate Commerce Act are sub-

ject to the provisions of the Administrative Procedure

Act But timeliness of the objection was not before us,

because ino that case the examiner’s appointment had

been twice challenged in the administrative proceedings,

once, as it should have been, before the examiner at the

hearings and again before the Commission on a petition

for rehearing. That) decision established) only that a

litigant in such a case as this who does make such de-

mand at the time of hearing is entitled to an examiner

chosen as the Act prescribes.

We have recognized ino more than ai few decisions?

and Congress has recognized ino more than a few. stat-

utes,® that orderly procedure and good) adiuinistration

require that objections to the proceedings of an adminis-

trative agency be made while it) has opportunity for

correction in order to raise issues reviewable by the

courts, It is urged in this case that the Cominission

had a predetermined poliey on this-subjeet which would

4Our decision in the Riss Case was announced after the ad-

ministrative proceeding herein, but before the District Court's

hearing. Riss apparently prompted appellee to raise the point

about the examiner’s qualifications in the District Court.

5 Spiller v. Atchison, T. & S. F. R. Co. 253 US 117, 130, 64

L. ed 810, 819, 40 S. Ct. 466; United States ex rel. Vajtauer v.

Commissioner of Immigration, 273 US 103, 113, 71 L. ed. 560,

566, 47 S. Ct. 302; United States v. Northern Pacific R. Co..

28S US 490, 494, 77 L. ed 914, 917, 55 S. Ct. 406; Unemploy-

ment Compensation Com. of Alaska v. Aragon, 329 US 143, 155,

91 L. Ed. 136, 145, 67 S. Ct. 243. :

6 Section 9(a) of the Securities Act of 1933, 15 USC $77(i);

§ 25(a) of the Securities Exchange Act of 1934, 15 USC §$ 7&(y);

§ 24 of the Public Utility Holding Company Act, 15 USC §79(x);

§ 10 of the Fair Labor Standards Act, 29 USC § 210; §10(e) of

the National Labor Relations Act, 29 USC §160(e).

C-4

have required it to overruie the objection if made. While

this may well be true, the Commission is obliged to deal

with a large number of like cases. Repetition of the

objection in them might lead to a change of policy, or,

if it did net, the Commission would at least be put on

notice of the accumulating risk of wholesale reversals

being ineurred by its persistence.’

Simple fairness to those who are engaged in the tasks

of administration, and to litigants, requires as a general

rule that courts should not topple over administrative

decisions unless the administrative body not only has

erred but has erred against objection made at the time

appropriate under its practice.

It is argued, however, that this ease falls outside of

this general rule and the result below is technically com-

pelled because, if the appointment of the hearing exami-

ner Was irregular, the Commission in some manner lost

Jurisdiction and its order is totally void. This inference

is drawn from our decision in Wong Yang Sung v. Me-

Grath, 389 US 338, 94 L ed 616, 70 S Ct 445, for it. is

eontended we could not have sustained a collateral attack

by writ of habeas corpus in that case unless we found

the defeet in that examiner’s appointment to be one of

Jurisdictional magnitude. We need not inquire what

should have been the result upon that ease had the Gov-

ernment denied or the Court considered whether the

objection were sustained was taken in time. The effect

of the omission was not there raised in briefs or argu-

ment nor discussed in the opinion of the Court. There-

7The Government informs us that in about five thousand cases

commenced after the effective date of the Administrative Pro-

cedure Act, orders are for an indefinite period vulnerable to attack

if no timely objection during the administrative process is re-

quired. The policy of the Commission is to grant application for

rehearing in cases where applicant made the objection before the

examiner. Since its established practice is not to consider issues

not raised before the examiner, it will refuse rehearings in

other cases.

C-95

fore, the case is not a binding precedent on this point.

Even as to our own judicial power or jurisdiction, this

Court has followed the lead of Mr. Chief Justice Marshall

who held that this Court is not bound by a prior exercise

of jurisdiction in a case where it was not questioned and

it was passed sub silentio.®

The question not being foreclosed by preeedent, we

hold that the defeet in the examiner's appointment was

an irregularity which would invalidate a resulting order

if the Commission had overruled an appropriate objection

made during the hearings. But it is not ons whieh de

prives the Commission of power or jurisdiction, so thei

even in the absence of timely objection its order should

be set aside as a nullity.

The judgment is reversed and the cause remanded. to

the District Court for determination on the merits.

Mr. Justice Frankfurter, dissenting.

Were we dispensing what is complacently called) ori-

ental justice, according to which the merits of the in:

dividual case alone, so one is told, determine the result,

IT would join my brethren in’ reversing this judgment.

For I see no reason to disagree with the Court's view

that in this case noncompliance by the Interstate Com-

merce Commission with the requirements of the Adminis-

trative Procedure Aet did not) prejadice the appellee.

Nor do T deny that some rights personal to a party may

be waived, either explicitly or by failure to assert them.

But | find no explicit waiver here, nor is it elear te

me how the appellee can be charged with knowledge of

® Webster v. Fall, 266 US 507, 69 L. ed. 411, 45 S. Ct. 148.

® United States v. More (US), 3 Cranch 159, 172, °2 L. ed. 397,

401; Snow v. United States, 118 US 346, 354, 30 L. ed. 207, 209,

6 S. Ct. 1059; Cross v. Burke, 146 US 8&2, 87, 36 L. ed. 896, 89%,

13 S. Ct. 22; Louisville Trust Co. v. Knott, 191 US 225, 236,

48 L. ed. 159, 163, 24 S. Ct. 119; United States ex rel Arant

v. Lane, 245 US 166,170, 62 L. ed. 223, 224, 38 S. Ct. 94.

C-6

the official status of the examiner on the basis of whose

report the Commission took action adverse to it. In any

event, the requirement of the Administrative Procedure

Act that) proceedings which lead to an administrative

adjudication must be conducted by an independent hear-

ing examiner is now something personal to a party. Tt is

a requirement designed to assure confidence in’ the ad-

ministrative process by defining and Tnniting the various

organs through which that process is allowed to function.

I do not use the term “yurisdiction” because it isa

verbal coat of too many colors, But we are dealing with

legislation which sought to remedy what were believed

to be evils in the way in whieh administrative agencies

exercised their authority prior to the enactment of the

Administrative: Procedure Act of June 11, 1946. That

Act accordingly prolubited the commingling of the con-

Hieting funetions exercised by these agencies. T do say,

therefore, that it) created unwaivable limitations upon

the power of these agencies, as much so as do the defini-

tions In judiciary acts of the different categories of cases

which different courts are empowered to hear and decide.

The Jimitations upon the power of the Interstate © om-

Inerce Commission to act, imposed by the command that

it must do so only in accordance with the requirements

of the Administrative Procedure Act, are thus not with-

in the dispeusing power of any litigant. They bind and

confine the Commission itself,

I} cannot otherwise read what we deeided in’ Wong

Yang Sune ve MeGrath, S389 US 33, 94 L ed 616, 70S Ct

$45, and Riss & Co. ve. United States, 341 US 907,95 L ed

45, 71 NS Ct 620. 1 do not rest my conelusion on any

assumption of jurisdiction sub silentio in the Wong Yang

Sune Case. What I am resting on is the significance

we attached to the requirement of independent. hearing

examiners as inherent in the process of administrative

adjudieation.

C-7

After we decided Wong Yang Sung v. MeGrath (US)

supra, Congress was promptly asked to relieve the de-

portation process of this requirement and it did so, See

Chapter TE of The Supplemental Appropriations Net,

Pol (Act of September 27, 1950, Pub TL No. 845). After

we meade the same ruling as to the Interstate Commerce

Commission, Congress Was promptly asked to validate

procecdings previously conducted by the Commission in

disregard of the requirements for independent hearing

examiners, Congress has chosen not to enaet such

remedial leeislation.’ To do not construe this want of

action as controlling upon the issue before us. Tb refer

to this subsequent legislative history merely as an in-

dication of the path by which undesirable consequences

flowinee from our decision in Riss & Co. ve United States

(US) supra, may be corrected without injustice. Situ.

ations like this arise from time to time when decisions

of this Court in’ the observance of law suggest corrective

legislation. See e.g. United States ve Heinszen & Co.

206 US 370, 51 Led 1098, 27 S Ct 742, 11 Ann Cas 68s,

Mr. Justice Douglas, dissenting.

This decision gives a capricious twist to the law. One

would assume frome aoreading of the opinion in’ Wong

Yang Sune ve. MeGrath, 559 US 235, 94 Led 616, TOS Ct

445, that the failure of a federal agenev to use the type

of examiner preseribed by Congress in the Administra-

tive Procedure Act, 60 Stat 327, 5 USC o* 1001 et SOU,

Vitiated the proceedings whether objection was raised

er not, The Congress decided to separate the judicial

functions of examiners from the investigative and) prose-

euting functions. It required the separation ino cases

involving property interests as well as those involving

personal liberty. Tt) condemned as unfair ao practice

1A remedial bill was successful in the House but failed in the

Senate. The bill was HR 5045. See HR Rep. No. 1637, 82d

Cong. 2d Sess.

C-8

which had grown up of allowing one man to be the police

officer, the prosecutor, and the Judge.

Violation of that requirement led the Court in Wong

Yang Sung’s Case to issue a writ of habeas corpus to

save an alien from deportation where the hearing ex-

aminer did not meet the requirements of the Adminis-

trative Procedure Act. That was a collateral attack on

the administrative proceeding, suecessfully made even

though no objection to the examiner was raised at the

hearing?

The objection raised in the present case likewise was

not made at the hearing; but it was made before review

of the order had heen completed. It would seem, there-

fore, that reversal of this administrative order would

follow a fortiori from Wong Yang Sung’s Case.

No one knows how the commingling of police, prose-

eutor and judicial functions in one person may affect a

particular decision. In some situations it might make

no difference; in others it might subtly corrupt the ad-

ministrative process. The only important consideration

for us is that Congress has condemned the practice; and

we as supervisors of the federal system should see to

it that the law is enforced, not selectively but in all cases

coming before us.

Of course, an ageney that flouts the mandate for fair

examiners does not lose jurisdiction of the ease. Even

habeas corpus is no longer restricted to the testing of.

“jurisdiction” in the historic sense. See Johnson vy.

Zerbst, 304, US 458, 467, 82 L ed 1461, 1468, 5&8 S Ct

1019, 146 ALR 357; Bowen v. Johnston, 306 US 19, 24,

83 L ed 455, 459, 59 S Ct 442. But the action of the

Commission in the present case created an error that

permeates the entire proceeding. It is error that goes

to the very vitals of the case. I would therefore set aside

2 And the alien in that case, like the respondent here, was

represented by counsel in the administrative proceedings.

C-9

the order and send the case back for a hearing that

meets the statutory standards of fairness. [T would make

the rule of Wong Yang Sung’s Case good for more than

the day and the occasion.

Horen ve. Unitep Srares

No. 13621

UNITED STATES COURT OF APPEALS

NINTH CIRCUIT

March 22, 1954

Before STEPHENS, BONE, and ORR, Circuit Judges.

STEPHENS, Circuit Judge.

Steven V. Hoteh was convicted of fishing in violation

of a regulation of the Department of the Interior extend-

ing the period closed to commercial fishing on the Taku

inlet.’ In an opinion filed September 14, 1953, this court

affirmed the conviction, holding that the cited regulation

Was within the seone of the authority delegated by

statute? and that it applied to Hoteh. See Hoteh v.

United States, 9 Cir, 1953, 208 F.2d 244. Subsequently,

Hotch petitioned this court for a rehearing at) whieh

time he first raised the argument that the regulaticn was

not effective since it had not been published ino the Ped-

eral Register. As the petition raised a jurisdictional

point, we entertained it and in a supplemental opinion,

filed December 2, 1953, reversed the conviction on the

ground that the regulation closing the Taku Inlet to com-

mercial fishing from 6:00 P.M. Thursday of each week

1 Regulatory Announcement 35, Announcement No. 2, announced

by the Regional Director of the Fish and Wildlife Service,

Juneau, Alaska, under authority delegated to him by the Secre-

tary of the Interior, See Title 48 U.S.C.A. § 221, and Title 50

C.F.R. § 102.3(a).

2 Title 48 U.S.C.A. § 220 et seq.

C-10

was ineffective since it had not been published in the

Federal Register’ Hotch v. United States, 9 Cir, 1955,

208 F. 2d 249.

The United States now petitions for a rehearing on

the ground that publication was not necessary to make

the regulation ino issue effective against the defendant

in this action since (as it is stated in the petition) the

defendant had actual potice of the extended closed period.

Section d(a) of the Federal Register Aet, Title 44

ULS.CLA. $305, requires the publication in the Federal

classes of documents as may be required to be published

by Act of Congress.2 Any such document which is not

duly published is invalid.” In 1946, Congress enacted

the Administrative Procedure Act, 60 Stat. 287, 5

U.S.C.A, § 1001 et seq., in which it) described certain

¢lasses of documents which it required to be published.

Section 4(a) of the Administrative Procedure Act, Title wee

do ULS.CLA, § 1003(a), requires that:

3 Title 5 U.S.C.A. §§ 1001(c), 1002(a)(3), and 1003.

*The term “document” includes agency rules, by definition.

Title 44 U.S.C.A. § 304.

5 Section 5: “(a) There shail be published in the Federal Reg-

ister * * * (2) such documents or classes of documents as may

be required so to be published by Act of the Congress: * * *”

Title 44 U.S.C.A. § 305.

® Section 7: “‘No document required under section 305(a) of

this chapter to be published in the Federal Register shall be

valid as against any person who has not had actual knowledge

thereof until the duplicate originals or certified copies of the

document shall have been filed with ihe Division and a copy made

availabie fur public inspection as provided in section 302 of

this chapter; and unless otherwise specifically provided by statute,

such filing of any document, required or authorized to be pub-

lished under section 305 of this chapter, shall, except in cases

where notice by publication is insufficient in law, be sufficient

to give notice of the contents of such documents to any person

subject thereto or affected thereby. * * *” Title 44 U.S.C.A.

§ 307.

C-11

“General notice of proposed rule making shall be

published in the Federal Register (unless all persons

subject thereto are named and either personally

served or otherwise have actual notice thereal in

accordance with law) * * "24

And Section 3(a)(3), Tithe 56 ULS.CLAL § 1002 (a) (3) re

quires that:

“Every ageney > shall separately state and cur

rently publish in’ the Federal Register * * * sub

stantive rules adopted as authorized by law * * *."

We quote from the Report of the Tlouse of Repre-

sentatives Committee on the Judiciary in its statement

on the substance of the Adiministrative Procedure Act:

“In the ‘rule making’ (that is, tlegislative’) fune

tion it {the Administrative Procedure Net | provides

that with certain exeeptions agencies must publish

notice and at least permit interested parties to subi

their views In writing for agency consideration be

fore the issuance of general regulations (see. 4)

funderseoring ours |. ULS. Code Congressional Sery

lee, T9th Congress, Second Session, 146. po TE,

at 1205.

The report goes on to state that hearings need net he

held on a proposed regulation * unless required by statute.

*It will be noted that the only exception from the necessity

of publication is where the persons subject to a particular rule

are specifically named, and even then only if they are aleo either

personally served or have actual notice. In the instant case,

neither the statute fixing closed periods, Tithe 4% U.S.CLA. § 224,

nor the proposed regulations extending the statutory closed period

“(see Title 50 CFR §§119.4 and 102.3a, and Regulatory An-

nouncement 34, Announcement No. 2) names the persons subject

ihereto. Therefore, the exception clause to the requirement of

publication in section 4(a) of the Administrative Procedure Ac

as to persons with actual notice does not apply.

8“ *Agency’ means each authority * * * of the Government of

the United States other than Congress, the courts, or the govern-

ments of the vossessions, Territories, or the District of Columbia.”

Title 5 U.S.C.A. §1001(a).

® While the Administrative Procedure Act uses the term “rule”,

its definition encompasses the term “regulation”. See Title 5

C-12

But the important disclosure is that publication is a

prerequisite to the issuance of a regulation.

{1] The Congressional directive in regard to the pro-

cedure to be foliowed in the issuance of agency regula-

tions must be strietly complied with, since the issuance

of regulations is in effect an exercise of delegated legis-

lative power. In the case before us, neither notice that

aA regulation extending the closed period on the Taku

Inlet was to be issued, nor the proposed regulation itself,

was published in the Federal Register. The failure to

eompiy with either of the referred to provisions of the

Administrative Procedure Act means that the procedure

laid down by Congress for the implementation of agency

rules and regulations has not been met.

Appellee (United States) relies heavily on the language

of section 7 of the Federal Register Act, Title 44 U.S.C.A.

§ 307, to support its contention that actual notice is a

substitute for the requirement of publication, to-wit:

“No document required under section 305(a) of

this chapter to be published in the Federal Register

shall be valid as against any person who has not had

actual knowledge thereof until the duplicate originals

or certified copies of the documents shall have been

filed with the Division '® and a copy made available

for public inspection as provided in section 302. of

this chapter [seetion 2 of the Federal Register Act |;

e**” (Underseoring ours]

But section 7 does not imply, as appellee would have it,

that the referred to doeument or rule would be valid

without publication as to a person who has actual notice.

For section 7 must be read in connection with section 2

U.S.C.A. §1001(c) and Report of the House of Representatives

Committee on the Judiciary: ‘“*, * * general regulations (called

‘rules’ in the bill) * * *.” U. S. Code Congressional Service,

79th Congress, Second Session, 1946, p. 1195 at 1205.

10The National Archives Establishment of the Office of the Ad-

ministrator of General Services. Title 44 U.S.C.A. §301; §1

Federal Register Act.

C -13

Which it modifies. Section 2 sets up a requirement. in

addition to publication, ie. it provides that an original

and two duplicate originals ef a proposed rule must be

filed with the Division. And section 7 provides that a

proposed rule is not valid, although published, until those

duplicate originals have been filed. An exception to. the

requirement of filing the duplicate originals is made. in

the circumstances where the interested party has had

aciual notice, But no exception is made to the independ-

ent requirement of publication, nor can section 7 of the

Federal Register Act be inferred to intend such an ex-

ception, particularly in view of the reiteration of the

requirement of publication found in subsections 4(a) and

(¢) of the Administrative Procedure Act, whieh is a later

expression by Congress; Tithe 5 U.S.CLAL £ 1008(a) and

(¢).

[2] While the Administrative Procedure Act and the

Federal Register Act are set up in terms of making in-

formation available to the public, the Acts are more than

Inere recording statutes whose function is solely to give

constructive notice to persons who do not have actual

notice of certain ageney rules." The Aets set up. the

procedure which must be followed in order for ageney

rulings to be given the foree of law. Unless the pre-

seribed procedures are complied with, the ageney (or

administrative) rule has not been legally issued, and

consequently it is ineffective.

The United States, in support of its argument. that

actual notice obviates the need for publication in’ the

“It is an elementary rule in the construction of recording

laws that notice of an unrecorded instrument is equivalent to the

recording of it, with respect to the person having such notice.”

{Underscoring ours.] 45 Am. Jur. 527. “Constructive notice is

the law’s substitute for actual notice, * * *. Constructive notice

has sometimes been defined by statute as notice imputed to a

person not having actual notice, and it has been said that an

essential part of the presumption is that the person sought to

be charged is in fact ignorant of the facts.” 39 Am. Jur. 236.

C - 14

Federal Register, cites cases in which it has been held

that publication gives constructive notice to all inter-

ested parties that a rule has been issued.’* However,

the holdings in those cases do not support the conclusion

that a required definite procedure in the establishment

of a criminal offense is waived by personal notice that

the legislative body having jurisdiction to legislate had

intended to create the offense.

[3-6] Under our system of law, no act is punishable

as a crime unless it is specifically condemned by the

common law or by a statutory enactment of the legis-

lature." The Congress has here made it an unlawful

Offense against the United States to fish in “closed”

waters, and has delegatéd the authority to determine

Which waters shall be closed to the Seeretary of the

Interior who, in turn, has subdelegated his- authority.

Since Congress could delegate its authority, it eould also

delegate the manner in which that authority is to be

exercised, Therefore, the Administrative Procedure Act

and the Federal Register Act must be read as a part

of every Congressional delegation of authority, unless

specifically excepted. Those Acts require publicaticn,

irrespective of actual notice, as a prerequisite to the

issuance of a regulation making certain acts criminal.

If notice of a proposed rule is not published in’ the

Federal Register at least-thirty days prior to its issuance,

or if food cause is not found and published for the im-

mediate issuance of a rule," the rule cannot be legally

12 Among the cited cases are: Federal Crop Insurance Corp. v.

Merrill, 1947, 332 U.S. 380, 385, 68 S. Ct. 1, 92 L. Ed. 10;

Flannagan v. United States, 9 Cir., 1944, 145 F.2d 740; Kempe

v. United States, 8 Cir., 1945, 151 F.2d 680; and Borak v. Biddle,

1944, 78 U.S. App. D.C. 374, 141 F.2d 278, 280.

See, also, Willapoint Oysters v. Ewing, 9 Cir., 1949, 174 F. 2d

676; United States v. Morton Salt Co., 1950, 338 U.S. 632, 70

S. Ct. 357, 94 L. Ed. 401.

15 22 C.J.S., Criminal Law, § 17.

144“The required publication or service of any substantive rule

* * * shall be made not less than thirty days prior to the effective

C-15

issued; if the rule itself is not published, it follows that

it has not been issued; and if a rule has not been issued,

it has no foree as law.

(7-9) Tf certain acts have not been made crimes by

duly enacted law, the knowledge of their contemplated

administrative proscription cannot subject. the informed

person to criminal prosecution. While ignorance of the

law ix no defense, it is conversely true that a law which

has vot been duly enacted is not a law, and therefore a

person who does not comply with its provisions cannot

be guilty of any crime.

[10} We hold that sinee neither the proposed regu-

lation nor the regulation itself in the instant case were

ever published, the regulation is not valid) whether or

not appellant had actual notice of its contents. Whether

or not actual notice might be required in addition to pub-

lication in certain circumstances,” ‘we do not decide.

It will be noted that on February 15, 1952. just three

months prior to the instant extension of the closed period

on the Taku Inlet to 6:00 P.M. Thursday, the Department

of the Interior had made changes in the closed period on

the Taku Inlet through a regulation duly published in

the Federal Register. 17 F.R. 1478, 50 CLF.R. 119.5.

The instant, further, extension .of the closed period on

the Taku Inlet) should have been accomplished in’ the

same way.

The petition of the United States for rehearing is

denied.

date thereof except as otherwise provided by the agency upon

good cause found and published with the rule.” Title 5 U.S.C.A.

§ 1003(c).

15 As the United States in its brief points out, there are times

when the commercial fishing regulations are changed while com-

mercial fishermen are at sea and when it _ be unjust to

bind them with regulations published in Washington, D. C.

C - 16

Eastern Air Lines, INC.,

Appellant

Union Trust Company et al.,

Appellees

Unrrep States or AMERICA,

Appellant

Vv.

Union Trust Company et al.,

Appellees

Nos, 11991, 11992, 12017, 12018

UNITED STATES COURT OF APPEALS

DISTRICT OF COLUMBIA CIRCUIT

Argued June 22, 1954

Decided Feb. &, 1955

Petition for Rehearing in Bane Denied in all Cases

on April 15, 1955

Petition for Rehearing Denied by the Division which

Heard the Case in Nos, 11991-2 on May 4, 1955

Petition for Rehearing Denied by the Division which

Heard the Cases in Nos. 12017-8 on May 11, 1955

Before EDGERTON, WILBUR K. MILLER and

FAHY, Cireuit Judges. |

WILBUR K. MILLER, Circuit Judge.

On the morning of November 1, 1949, an Eastern Air

Lines DC-4 plane was flying from New York to Wash-

ington, carrying fifty-one passengers and a crew of four.

When it was on final approach for landing on runway 3

at the Washington National Airport and at an altitude

C-17

of about 300 feet, the airliner was struck from above and

behind by a P-38 military-type aireratt just purchased

by the Bolivian Govermuent, whieh was being tested by

a Bolivian military pilot, Erie Bridoux, who was its only

occupant. The DC-4 was cut in two. The forward part

fell in the Potomac River, the after portion on the Vir-

ginia shore, All fifty-five persons aboard were killed.

The P-388, badly damaged, of course, plunged into the

river but somehow Brideux escaped from the cockpit.

He was rescued and, despite serious injuries, survived.

These suits were brought in the United States District

Court for the Distriet of Columbia by the Union Trust

Company and Melville W. Stuart as the executors of

Ralph F. Miller and Mildred) ik. Miller, his wife, who

Were passengers on the DC-4.0 Mastern Air Lines, Ine.,

and rie Bridoux were named as defendants in two of

the actions and the United States was the defendant in

the other two.!) Many similar suits filed on behalf of

the estates of others who died in the fatal crash are

pending under an agreement that the determination of

liability ino these cases shall govern their disposition.?

Although the two captioned cases against Bridoux

and Kastern were tried to a jury, and the two against

the Government to the court, by agreement of the parties

all four actions were tried simultaneously, The jury

found Bridoux not “lable,” but found against Eastern

1 Aubin & Lyons, t/a Universal Marine and Supply Company,

were also named as defendants on the theory they owned or had

some interest in the P-38. They were dismissed when it ap-

peared that title to the plane had passed to the Bolivian Gov-

ernment.

2It was also agreed that the determination of the situs of

the accident (whether it occured over the Potomac River, which

is in the District of Columbia, or over land in Virginia), made

in these cases, shall be binding in all the others. The situs is

important because a Virginia statute limits recovery for wrongful

death to $15,000. In the District of Columbia there is no statu-

tory limit.

C-18

Air Lines in the sum of $50,000 for the estate of Ralph

KF Miller and in the sum of $15,000 for the estate of his

wife. In the Federal Tort Claims actions against the

United States, the trial judge held the Government table

to the estates and fixed the damages at $50,000 and

$15,000) respectively, D.C) 118 F.Supp. 80. Eastern Air

Lines and the United States appeal.

We first summarize the factual background which ts

essential to an understanding of the reasons for reversal

advanced by the appellants. The Washington National

is a controlled airport; that is to say, from a_glass-

enclosed observation platform ino a control tower stand-

ing above and west of runway 3, employees of the Civil

Aeronautics Administration observe arriving’ and depart-

‘ng planes and direct their movements by radio. An in-

coming plane may not land and a departing plane may

not take off until it receives tower permission to do so.

The Administrator of Civil Aeronautics adopted, and

published in the Federal Register October 14, 1949 [14

Fed. Reg. 6247-6250), a regulation for the administration

of the Washington National, which is a civilian airport

owned by the United States. Section 570.50(¢) of the

regulation is as follows:

“(¢) Aircraft landing or taking off shall conform

to the air traffie pattern as published jointly in the

Airman’s Guide by the Anacostia Naval Air Station,

Bolling Field and the Washington National Airport.”

The air trafic pattern referred to is a map of the airport

and vicinity, with lines drawn over it intended to show

the general flight patterns for taking off from and land-

ing on the various runways. For landing on runway 3,

it shows a southward pattern to a point south of Alex-

andria (the downwind leg), then an east turn until over

the Potomac River (the base leg), then northwardly over

the river to a point a short distance northeast of Alex-

C -19

andria, where it curves to the left over the Potomac

Yards, and then a curve to the right inoa line for a

straight approach te runway 3.0 The drawing itself Wits

published im the Airman’s Guide Mareh 1. 1949) but was

not published imo the Federal Register until August 7,

W952. Jone after the aeeident here invelved. The regu.

lation published Oetober 14. 1949, referred to but) did

not include the traffie pattern.

Over Eastern Air Lines* vehement objection, the trial

court admitted the traffie pattern when it was offered in

evidence by the appellees, and charged the jury that it

was a binding Federal regulation, and that an unauthor-

imed deviation therefram would be negligenee por ose.

Bastern admittedly had knowledge of the pattern,

Ono the morning of the aeeident Glenn Do Pigner, one

of the seven traffic control operators who Were Working

in the tower, was advised by the Hastern DC-4 at about

11shsS am. that it was over Beltsville, Maryland, bo miles

northeast of the airpert, and was asking for landing

instructions, ‘Tigner authorized it to enter a lett trathe

pattern for landing on runway 2 and advised the pilot

to contact the tower again from oa point closer to the

airport. Tiener testified that in a second communication,

When the Hastern plane was still north of the airport, he

eleared it) to land on runway 0.4 Tle fixed the time of

$The Administrator of Civil Acronautics was called by the

court as a Witness on the meaning of the phrase “cleared to land”.

He testified that when a plane in the traffic pattern of an air-

port is “cleared to land,” the pilot of the plane is thereby au-

thorized to commence his landing approach operation immediately ;

in other words, when a pilot receives that clearance, wherever

he may be in the traffic pattern, there is no plane ahead of him

and he may make his turn at his discretion and consistently with

the safe management of his plane and may come in and land at

once on the runway which has been designated by the tower.

That this is the only meaning of the phrase “cleared to land”

was the unanimous testimony of all the certified air traffic con-

trollers who testified on the subject. The trial judge instructed

the jury as a matter of law that such was the meaning of the

phrase “cleared to land.”

C - 20

the clearance as approximately 11:44 a.m. The DC-4

eontinued its flight and entered the traffie pattern as it

had been direeted to do. Tt had circled from the pattern

and was on final approach for runway 38> when it) was

struck by the Bolivian plane.

The Bolivian P-38 had taken off from rinway 3 at

17:37 a.m. and therefore had been in the air only between

nine and ten minutes when the collision occurred, Short-

Iv after he had cleared the DC-4 to land, Tigner observed

the P-38 at oa high altitude, circling Alexandria about

seven miles south jof the airport, heading toward the

east and starting:a turn to its left. Tigner was then

talking to another plane. THe was informed by a tower

eolleague the P-38 was requesting landing instructions.

He saw it continuing its left turn and said by radio,

“Bolivian 927, did) you request landing instructions?”

Bridoux replied he had done so, whereupon Tigner told

him he was cleared to enter the left traffie pattern for

runway 3 and asked him to report on his downwind leg

west of the airport.

Tigner said when he next saw the P-38 it was about

five miles southwest of the airport at about 4.000 feet

heading northeastwardly with its gear down and in a

steep and rapid deseent. At 11:45 a.m. he warned the

DC-4 that the P-388 was in traffic. He said to the P-38,

“Bolivian 927, make a 360 to vour left. You are No, 2

to land. Traffie is an Eastern DC-4, turning final ahead

and below you.” Bridoux did not acknowledge the mes-

sage and did not turn as directed. Tigner then called,

“Bolivian 927, turn left, turn left. You are No. 2 to land,

following an Eastern DC-4 turning final ahead and below

you.” Bridoux did not acknowledge or comply.

During these transmissions the DC-4 was on its base

leg turning into final approach. When Tigner saw the

P-88 was not complying with his instructions, he called

the DC-4 and said, “Eastern 537, make an immediate

C-21

left turn. Traffie is P-38 above and behind vou.” The

DC-4, which had gone only about a quarter of a mile on

final approach, responded -with a surge of power into

a left turn. As it-did so, the Bolivian plane struck it.

Bridoux testified that a minute after his take-off he

began to have engine trouble. He reported that fact to

the tower and requested landing instructions. Receiving:

no answer, he repeated his request and the tower said,

“Land 2 on Runway 3." which he understood to mean

there was another plane ahead of him behind which he

was to land. He testified he also understood this mes-

sage to constitute a clearance to land rather than merely

clearance to enter the traffic pattern,

When he was about two miles west of the airport

descending at a rate of 500 to 600 feet a minute, Bridoux

said he saw a plane making a final approach for a land-

ing either on runway 36 or 3, which was either a Beech-

craft C-45 or a Lockheed C-60. He said, "* * * |

realized that that was the reason IT was No. 2 to Jand.”

He continued flying south until he was about five or six

miles south of the field and then made a 90-degree left

turn. As he did so, he observed the Lockheed or Beech-

craft on the ground taxiing toward the buildings. He

had not seen it actually land.

Having been told by the tower he was No. 2 to. land

on runway 3 and having seen, as he thought, that the

plane which was No, 1 to land on that runway had al-

ready done so and had taxied away, Bridoux concluded

it was unnecessary for him to cheek with the tower to

learn whether the plane ahead of him had landed. We

reproduce in the margin * his testimony that he regarded

*“Q. As a matter of fact, at that point you not only accepted

that clearance which you told us was given, but you made another

complete 360-degree turn around the airport; and then after you

(Con’t. on following page)

C - 22

the tower's statement, “You are No. 2 to land on runway

3,° as absolute eclearanee to land after he had decided

for himself, without further communication with or from

the tower, that the No. 1 plane was out of the way.

* (Con’d.):

had done that, you started downwind leg five or six miles. A.

Because I was No. 2 to land, sir.

“Q. You at no time, Captain, asked the identity of the plane

that was ahead of you, did you, Captain? A. No, sir.

“Q. And you had no way of knowing, based upon information

from the tower, that that plane was ahead of you, did you, Cap-

tain? A. Unless I see.

“Q. And you didn’t see it. <A. 1 saw it on final approach, the

“Q. What you are telling us is after getting that clearance, you

assumed /the plane you saw was the one they meant was ahead

of you? A. Yes, sir. :

“Q. But you didn’t check with the tower to see if that was

the plane? A. Why have I got to check, if I am seeing?

“Q. I am not asking you why. I am simply asking you if it

isn’t a fact that that you didn’t check back with the tower to

see if that plane you saw was the one ahead of you. A. It isn’t

necessary, because I was seeing the airplane.

“Q. Would you please answer yes or no to my question? You

didn’t check back with the tower to see if that plane you told

us you noticed on final approach was the one ahead of you, did

you? A. When I was on final approach, I called the tower.

“Q. Captain, I am asking you, sir, if after you saw that piane,

which you said seemed to be lined up for landing, which seemed

to be on approach for landing, on runway 3, did you at any time

thereafter ask the tower if that was the plane that had been

ahead of you? A. No, I didn’t ask. It wasn’t necessary ‘to.

“Q. You did not ask the tower— A. Because it wasn’t neces-

sary. I was seeing the airplane. I was watching it.

“Q. What you mean is you saw a plane. A. Yes, sir.

“Q. You have no way of knowing whether that one was the

one the tower was referring to, or some other plane, have you,

Captain? A. There was a way because he was on final approach.

If he didn’t land yet, I understand he is No. 1.

“Q. Isn’t it a fact that from that point on there was a lapse

of four or five minutes before you came in, on your own final

approach? A. More or less.

“Q. And you never contacted the tower to find out where the

plane that was No. 1 was, did you? A. I called on final ap-

(Con’t. on following page)

C-23

After seeing the Lockheed or Beecheraft taxiing from

runway 3, Bridoux flew on for about one and one-quarter

inles and made another 90-degree left turn to proceed

on final approach, after which he headed north tlying at

*(Con’d.):

proach, advising them I was on final, and they could tel! me any-

thing at that time, in order to realize that.

“Q. That was after you had lined up for runway 3, wasn't it?

A. No, sir.

“Q. You said you were on final approach. A. On final; but the

final is not just the straight line. The final is after the turn

from base leg.

“Q. Did you ask the tower for any permission before you lined

up for final approach? <A. No.

“Mr. Bress: He hadn't said he lined up for final approach.

“The Witness: I called to the tower, after the turn from base

and I began the final approach.

“By Mr. Galiher:

“Q. And you didn’t ask the tower for permission before you

began the final approach, did you? <A. I didn’t have to‘ask the

tower ior permission, after I had been cleared for landing, sir.

“Q. You hadn’t been cleared to land at that point, had you,

Captain? A. I had been cleared for landing, and the first call

from the tower cleared me for landing.

“Q. You mean when you were told you were No. 2 to Jand on

runway 3? A. Yes.

“Q. And that is the only clearance you have had up to this

point? A. I know I was the second.

“Q. And that was issued upon the final approach? A. No; it

was before the final approach.

“Q. Whether it was after or before you had begun the final

approach, you had begun the final approach before you got any

landing clearance from tle tower. <A. No, sir. The first call from

the tower was when I was cleared for landing.

“Q. For what? A. They cleared me for landing.

“Q. For landing No. 2? A. Yes, sir.

“Q. Did you tell us that being cleared for landing No. 2 is a

lai..ing clearance, a final landing clearance? A. If they mention

that word, it is.

“Q. You say it was a final landing clearance, the clearance that

told you you were cleared to land on runway 3, behind another

plane, or No. 2, as I think you used it? A. No. 2. That was all.

“Q. No. 2. You have no way of knowing whether that plane

you told us you saw when you were on downwind leg was the

(Con’t. on following page)

C - 24

150 m.p.h. and at an altitude of about 1,200 feet. Tle

said he then called the tower, advising he was on final

approach and that the tower responded, saying, “Bolivian

P-38, prepare to land on runway 3,” and gave him the

wind direction; and that he acknowledged the instruction.

He then put his flaps down, reduced his speed to about

130 m.p.h., and began an S turn to line up with runway

3. As he did so, he heard over the radio, “Clear to the

left, clear to the left,” but thought the instruction was

for somebody on the ground. He did not turn to the

left or take any other action, but continued on his course

and the collision occurred two or three seconds later.

The visibility from the P-3S was structurally limited

so that Bridoux could not see ahead of him except at a

* (Con’d.) :

plane you later saw on the landing strip or not, do you? A. { saw

the craft, and I assumed it was the No. 1, sir.

“Q. That plane you told us you saw as you were on downwind

leg, west of the tower— A. Before.

“Q. Then you told us when you got down south, when you

were turning on base leg, you noticed a plane that was landing

or had landed-——I think you used the expression-— A. Yes.

“Q. —on the landing strip. A. Yes.

“Q. It was actually on the ground? A. Yes, sir.

“Q. You had no way of knowing from that distance of five

or six miles away, did you, whether that was the same plane you

had previously seen, or some other plane, did you? A. I don’t

know exactly. But I saw more or less the same airplane.

“Q. And you never tried to contact the tower to inquire whether

or not the plane you had seen un final approach, as you call ii,

when you were on downwind leg, was the plane that was No. 1,

did you? A. But how am I going to ask the tower that? Am

I going to say ‘Is the plane I am seeing No. 1? How is the tower

going to know what plane I am seeing? There was no reason of

calling back to the tower.

“Q. It would have prevented this accident, wouldn’t it, if you

had called the tower and inquired as to the identity of the plane

ahead of you? A. Except that I happened to observe this plane

on final approach, not any other plane. Therefore I assumed this

was the No. 1. This was the only one on final approach.

“Q. And that is where the trouble came in, because you assumed

that was the plane that was ahead of ydu, isn’t it, Captain?

A. Probably, sir.”

considerable distanee. Tle was flying entirely by iime,

computing the distance covered by multiplying his ped

per minute by the number of minutes traveled. Hle snc

that at an altitude of 1200 fect and four and oa hall

miles from the airport he could) see nothing ahead ane!

below for a distance of two and one-half miles. dt is alse

observed that Bridoux said that as he deseended= the

nose of duis plane was not more than ten degrees imder

horizontal, and that he was seeomplishing the deseent by

redueng his speed. ‘Thus there was not enough nose

declination to inerease appreeiably the extent of visibilits

Immediately in’ front of and below the PoBs. | Briers

did not see the Eastern D¢ “4 at any time,

[1,2] With the foregoing baekground., we turn. te

Kastern’s contention that the court erred ino admittiag gs

evidence the approach and landing pattern offered as an

exhibit by the appellees; and in instrueimg the jury it

Was a binding Federal regulation, a breach of whiet

would constitute negligence per se,

With respect to the traffie pattern, the eourt charged

the jury as follows:

“eee TP his pattern in a general sense provided

that an aireraft arriving from the north and desiring

to land at the Washington National Airport om Run

way 3 would proceed) from north to west, ims tie

general vicinity of the Pentagon. and then proceed

and continue in the southerly direction south im the

direction of the George Washington Memoria! Tern

ple and south of the city of Alexandria: then turn

ing due east on what is called the base lew. nid

ultimately what is called the final apnoroach. a north

or northeast heading.

“eee ee This is the preseribed pattern. But) vou

are instructed as a matter of law that there is moth

ing rigid about it. Tt imust be conformed to in oa

C - 26

general way. In other words, the pattern ‘s not a

line drawn over the ground which must be followed

by the airplane in question. It is just exactly as

the word itself indicates, a pattern which must be

followed, but not with the rigidity and the inflexi-

bility of a line from one point to another. Indeed,

the very purpose of flight traffie patterns is to control -

trafhe, and at an uncontrolled airport it must be

followed; but at a controlled airport, such as Wash-

ington, the controller has the final say; and you are

so instructed.

“ However, the unauthorized stepping out of the

pattern, leaving the pattern, departing from it-——and

note my language—the unauthorized stepping out of

the pattern, leaving the pattern, departing from it,

would be a violation of law, because the pattern is

preseribed by rule which has the force and effect of

law. And so, therefore, unauthorized action of the

character I have just referred to would be negligence,

as I have defined that term to you, and would be,

as we lawyers say, negligence per se, in other words,

would be negligence as a result of the verv act itself

and no further proof would be necessary. This is

the negligence, in this aspect of the case, which the

plaintiff alleges against Eastern. * * *”

In insisting the court erred in admitting the traffic

pattern as an exhibit and in instructing the jury that

it was a binding regulation and that an unauthorized

deviation from the pattern would be negligence per se,

Fastern relied on the fact that the traffie pattern had

not been published in the Federal Register and cited

Hotch v. United States, 9 Cir., 1953, 208 F. 2d 244, 250,

as authority that it was therefore not a binding regu-

lation. The pattern had been officially prescribed, how-

ever, and Eastern had actual knowledge of it. In those

circumstances we think the pilots of the DC-4 were re-

quired to follow the pattern and, since it is obviously

a safety measure to some extent, the court correctly

charged the jury that an unauthorized departure from it

was negligence per se.

C-27

AMEKADA PrerroLeEuM Corporation,

Petitioner

Vv.

FepernaL Power COMMISSION,

Respondent

Mipstares Oi Corporation,

Petitioner

¥.

Teperan Powrr ComMMIssion,

Respondent

Cirres Service Ou. Company,

Petitioner

¥.

FeperaL Power ComMMIssION,

Respondent

SKELLY O1n Company,

Petitioner

Vv.

FepERAL PowrER COMMISSION,

Respondent

Nos. 5044, 5046, 5099, 5103

UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

March 17, 1956

Rehearing Denied April 25, 1956

Before HUXMAN, MURRATD and PICKETT, Cireuit

Judges.

HUXMAN, Circuit Judge.

On June 7, 1954, the Supreme Court rendered its deei-

sion In) Phillips Petroleum Co. v. State of Wisconsin,

C - 28

347 U.S. 672, 74S. Ct. 794, 796, 98 L. Ed. 1035, holding

that the Federal Power Commission had jurisdiction over

independent producers whieh engage in “the sale in in-

terstate commerce of natural gas for resale”, and that

such a company is a natural gas company as defined in

the Natural Gas Aet, 15 U.S.C.A. §$ 717-717w. This

decision was contrary to the Federal Power Commission's

prior interpretation of its own jurisdiction over such

activities. Shortly after the Phillips decision, on July

16, 1954, the Federal Power Commission issued its order

174.') Order 174-A was directed to all “independen — pro-

ducers” as defined and covered by the Natural Gas Act.

Among other things it required all independent producers

who on or since June 7, 1954, had engaged in the inter-

state transportation and sale of natural gas subject to

the Act to (1) file their contracts in force on June 7,

1954, which in eifeet became their rate schedules: (2)

make no changes in the -tune 7, 1954, rates except after

notice to the Federal Power Commission and subjeet to

its right to suspend such changes; (3) apply to the Com-

mission for certifieates of public convenience and = neces-

sity covering gas sales made by them; and (4) continue

any sales or serviees rendered until termination was

given the express approval of the Federal Power Com-

mission. One commissioner dissented from = this order,

raising many of the substantive questions asserted by

petitioners in this court.

No advance notice was given or hearing held prior to

the formulation of orders 174 and 174A.) Petitioners

(Amerada Petroleum Corporation, Midstates Oil Cor-

poration, Cities Service Oil Company and Skelly Oil

Company) along with more than one hundred other per-

sons and corporations sought by petition for a “rehear-

ing” to have the Commission set aside the order or

1 Thereafter the order was changed in minor respects and was

superseded by Orders 174-A and 174-B.

c-3

change its provisions. The Commission allowed) briefs

and oral argument inoa hearing like that contemplated

in Section 4 of the Administrative Procedure Act = to be

held before the promulgation of general substantive rules

and regulations. After that hearing the order was re-

issued with minor changes, immaterial here, as 174-B.

It is from that order petitioners bring the appeals con.

solidated herein. They assert that the order is: appeal-

able, that as independent producers within the definition

of the order they have standing to prosecute an appeal;

and as grounds for overruling the order they say its

formulation violates in several respects the Natural Gas

Act, the Administrative Procedure Act, and their rights

under the United States Constitution.

(1!) Petitioners make oa preliminary contention that

eonsidered or even as procedural rules and regulations

the regulations in question are void because petitioners

were not aceorded the hearing to which they were en-

titlhed under the Administrative Procedure Act) before

the rules were adopted. Section 4 of the Administrative

Procedure Act requires notice of proposed rule making

and that an opportunity to participate in the rule making

be afforded interested persons unless the ageney involved

expressly finds that such proeedures are impractical, un-

necessary or contrary to the publie interest. No notice

or oppertunity to be heard was given with respeet to

Order 174 or Order 174-A, which was a modification of

the original order. Namerous producers ineluding ap-

pellants filed appleation for a rehearing of Order 174-4,

The Commission acted upon these applieations and

granted oral arguments before the full Commission. = In

granting oral arguments the Commission called for sug-

gestions and comments as to the revision or modification

of Order 174-A. Following the submission of briefs and

oral arguments, the Commission issued Order 174-B, the

order involved ino this controversy. Assuming without

25 U.S.C.A. § 1005.

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deciding that under the facts of this case petitioners

were entitled to notice and hearing, they have no cause

for complaint. They were heard, granted an opportunity

to file briefs and present oral arguments. It was only

thereafter that Order 174-B, the order under attack here,

was formulated. It must, therefore, be said that the

order under consideration was adopted only after a full

hearing was: accorded petitioners.

[2] Petitioners assert that the order violates their

substantive rights in a number of respects. We need

not pass upon these contentions because in our view thie

order is not reviewable. Section 19(b) of the Natural

Gas Act provides that “Any party to a proceeding * * *

aggrieved by an order issued by the Commission

may obtain a review of such order in the cireuit court

of appeals of the United States * * *.” The order chal-

lenged here was not issued in an adversary proceeding

to determine violations of the Natural Gas Act or a

Commission ruling thereunder; it purports to be issued

under the general rule making power of the Federal

Power Commission. It is of general applicability, ad-

dressed to all independent producers subject to the

Natural Gas Act as defined.

* & *

There is no holding or determination by the Commis-

sion that the order is applicable to any of the petition-

ers. Petitioners herein do not admit that they are sub-

ject to the Natural Gas Act. They state only that they

come within the definition of an independent producer as

eontained in the order or that they cannot. ascertain

whether they are within the definition of the order. The

only particularly directed order is one against Skelly

to show cause why it should not be determined a natural

gas company within the Act and why it should not be

directed to continue a particular sale and delivery of

gas. But that portion of the order is still undisposed of

before the Commission. In Canadian River Gas Co. v.

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Federal Power Commission, 10 Cir., 110 F.2d 350, it was

held that an order directing a particular company to he

investigated to determine whether it was a natural gas

eompany within the Act was a preliminary finding and

fas not appealable. Therefore, jurisdiction to consider

the appeal cannot be predicated on the Skelly show cause

order.

Without even admitting that the Commission has juris-

diction over them and without a finding by the Commis-

sion that it has jurisdiction over any of petitioners, peti-

tioners content that the order violates their substantive

rights in several important respects and, therefore, con-

stitutes a final appealable order. They allege that they

own and operate gas wells and sell gas under a number

of contracts. The opinion is expressed by them that the

order may force submission to the jurisdiction of the

Federal Power Commission. This position is predicated

upon the definition of an independent producer in’ the

order as follows: “An ‘independent producer’ as that

term is defined in $$ 154.91 ta, 154.202 means any person

as defined in the Natural Gas Act who is engaged in the

production or gathering of natural gas and who trans-

ports natural gas in interstate conumerce or sells natural

gas in interstate commerce for resale, but who is not

primarily engaged in the operation of an interstate pipe-

line.” Those are almost the exact words of the Supreme

Court in defining an independent producer’ Without a

determination by the Commission Whether any of them

fall within.this definition, and without the aid of a par-

ticular application of the definition by the PPC to any

given set of facts, we are asked to examine and define

the exact extent of the production and gathering exemp-

tion in the Natural Gas Act as it applied to these peti-

tioners and are in fact asked to determine that they

are not subject to the jurisdiction of the Comunission.

3See Phillips Petroleum Co. v. State of Wisconsin, 347 U.S.

672, 74 S. Ct. 794, 98 L. Ed. 1035.

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The-ease most analogous to the one before us is United

Gas Pipeline Co. v. Federal Power Comm., 86 U.S.App.

D.C. 314. 181 F.2d 796. That ease also arose under the

Natural Gas Aet. It likewise involved a general order.

The order was directed to the United Gas Pipeline Com-

pany and all other companies similarly situated, requir-

ing them to file rates on a designated basis. The Gas

Companies there, as here, contended that the provisions

of the order requiring them to fil. rate schedules worked

a retroactive change in rates and was, therefore. review-

able on appeal. The court ina well considered opinion

held that the order was general: chat it was prospective

in nature and of general appheatility and not) subject

to review, That court aiso considered and distinguished

Columbia) Broadeasting Svstem. Ine. ve United States,

316 US. 407, 62.8. Ct. 1194. 86 LL. Nd. 1563. upon which

petitioners there, as here, placed strong reliance, We

agree with the analysis of the court of the Columbia

Broadeasting System case distinguishing it upon) facts,

and it is our conelusion that the facts in this case like-

wise distinguish it from that case.

As pointed out, the challenged order is directed to no

one, Tt requires only that all gas companies falling

Within the definition as daid down make applieation for

a ocertifieate of convenienee and file their rate schedules

as oof June 7. Tt leaves to each company ins the first

Instance a determination of whether it is under the Aet.

If petitioners are right ino their contention. that) their

activities do onot bring them within’ the Commission's

Jurisdiction they need do nothing. The difficulty is that

if it is ultimately determined that they are under the

jurisdiction of the Commission then their failure to eom-

ply with the general order subjeets them to severe penal:

ties. But that ts a difficulty inherent in the way in which

the need tor the exercise of the Commission's authority

arose, Tt was necessary for the Commission to make a

heginning. For this purpose it promulgated general rules

and regulations applying to all subjeet to the Net. It

first defined companies subjeet to its jurisdietion and

required only that such companies file schedules of rate.

and make applications for certifieates of convenience.

This is the only practical way the Commission could

have made a beginning. The only alternative would have

been to hold individual hearings with respeet to each

of innumerable companies to determine upon the adduced

facts whether they were under its jurisdietion., ‘The im-

practicability of such a iethod is obvious.

Neither do we think that the assertion that by the

appheation for a certificate of convenience the applicant

submits itself to the Jurisdietion of th oeourt is well

taken. Such appleation, of course, ean be a quatitied one

and made so as to reserve te the appleant the right te

challenge the Jurisdietion of the Commission.

Nor do we think the contention that by fixing the

schedule rates as oof June To oas the oeffeetive rate con

stitutes a betroaetive fining of rates or iidhkes a venmera:

order substantive in that respeet and, therefore, subject

to appeal Ngai the Comuinission was faced with) the

Necessity of a beginning rate. Ut might well lave fixed

the rate as of a different thine as the beginning rate, and

itmary even be conceded that the rate as of June 7 might

work hardship ince particular case. But tlt does not

Intake the regulation requiring the tiling ef suelo arate

definitive in character, subject to review on appeal Phe

door is left wide open for a proceeding before the Com:

Mission to correct such orate doit is ime quitable or umpust,

The fact remains that this ease comes te us without a

record, without aosinghe established facet oor finding, and

Without evidence, ard in that posture we as an appellate

court are asked to exercise our appediate: nawers of

review, Tn faet, we are asked te detertuine that peti

tioners are not subject to the jurisdiction of the Com

Inission Without ao single faet upen whieh to base sueh

C - 34

determination and in the abseuce of any findings of fact

by the Commission.

[3] Seetion 10 of the Administrative Procedure Act is

pleaded to support our jurisdiction to review the merits

of petitioners’ claims. It is our view that that Section

adds nothing to our authority. It provides for a right

of review in a proper court of final agency action where

other statutory authority is absent or inadequate, but

here Seetion 19(b) of the Gas Act provides for a review

and we think it is entirely adequate and, therefore, makes

inapplicable Section 10 of the Administrative Procedure

Act.

It is our conclusion that the petitions for review are

premature and are, therefore, dismissed.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.