International Workers Order v. McGrath, 10308.

• Decision Date: 22 March 1950
• Docket Number: No. 10308.,10308.
• Citation: 182 F.2d 368
• Parties: INTERNATIONAL WORKERS ORDER, Inc., et al. v. McGRATH et al.
• Court: U.S. Court of Appeals — District of Columbia Circuit

182 F.2d 368 (1950)

INTERNATIONAL WORKERS ORDER, Inc., et al. v. McGRATH et al.

No. 10308.

United States Court of Appeals District of Columbia Circuit.

Argued December 5, 1949.

Decided March 22, 1950.

Mr. Lee Pressman, Washington, D. C., with whom Mr. Allan R. Rosenberg, Washington, D. C., was on the brief, for appellants.

Mr. L. Clark Ewing, Assistant United States Attorney, Washington, D. C., with whom Assistant Attorney General H. G. Morison and Messrs. George Morris Fay, United States Attorney, Washington, D. C., Edward H. Hickey, Special Assistant to the Attorney General, Stafford R. Grady, Assistant United States Attorney, and Joseph M. Howard, Assistant United States Attorney, Washington, D. C., were on the brief, for appellees.

Before EDGERTON, WILBUR K. MILLER and PROCTOR, Circuit Judges.

WILBUR K. MILLER, Circuit Judge.

The principal question in this case is whether a fraternal insurance company may maintain an action to review an intermediate step in the government's employee loyalty program on the ground that its constitutional rights were thereby invaded.

The loyalty program was initiated by Executive Order No. 9835, issued by the President on March 21, 1947,¹ "* * * by virtue of the authority vested in me by the Constitution and statutes of the United States, including the Civil Service Act of 1883 (22 Stat. 403), as amended, and Section 9A of the Hatch act approved August 2, 1939 (18 U.S.C. 61i), and as President and Chief Executive of the United States * * *." Among the recitals and provisions of the Executive Order are the following:

"* * * it is of vital importance that persons employed in the Federal service be of complete and unswerving loyalty to the United States * * *

* * * * * *

"* * * maximum protection must be afforded the United States against infiltration of disloyal persons into the ranks of its employees, and equal protection from unfounded accusations of disloyalty must be afforded the loyal employees of the Government * * *

* * * * * *

"There shall be a loyalty investigation of every person entering the civilian employment of any department or agency of the executive branch of the Federal Government.

* * * * * *

"The Loyalty Review Board shall currently be furnished by the Department of Justice the name of each foreign or domestic organization, association, movement, group or combination of persons which the Attorney General, after appropriate investigation and determination, designates as totalitarian, fascist, communist, or subversive, or as having adopted a policy of advocating or approving the commission of acts of force or violence to deny others their rights under the Constitution of the United States, or as seeking to alter the form of government of the United States by unconstitutional means.

"a. The Loyalty Review Board shall disseminate such information to all departments and agencies."

The President's directive contains the further provision that among the activities and associations of an applicant or employee which may be considered in determining disloyalty are membership in, affiliation with or sympathetic association with, any organization designated as subversive by the Attorney General.

Acting under the instructions of the Executive Order and for the purpose of aiding in the attainment of its objectives, the Attorney General advised the Loyalty Review Board on November 24, 1947, that he had designated the appellant, International Workers Order, Inc. (IWO), as subversive.

After this designation had been made, IWO sued the Attorney General and the Loyalty Review Board in the United States District Court for the District of Columbia praying the court to declare unconstitutional § 9A of the Hatch Act² as construed and applied by Executive Order No. 9835 and by the appellees, and praying the court also to hold the Executive Order unconstitutional, both on its face and as construed and applied by the appellees. Further relief sought was an injunctive order requiring the removal of IWO's name from the subversive list and restraining the appellees from further designating or publicizing IWO as a subversive organization.

The appellant, IWO, described itself in its complaint as a fraternal organization issuing policies of insurance to its members. It alleged that it was not afforded a hearing before it was branded as subversive by the Attorney General, that it is in fact not subversive, but that because of being designated as such it has lost certain tax exemptions, has been subjected to investigation by the insurance departments of certain states in which it issues policies of insurance, many of its members have resigned and cancelled their insurance, many prospective members have declined to join, and some members have been subjected to charges of disloyalty or have been dismissed from the government service because of their membership in the appellant organization. Other ill consequences were alleged at length.

Arthur L. Drayton, an employee of the Post Office Department, moved to be permitted to intervene as a plaintiff. He alleged he carried life insurance protection and other benefits in the appellant organization, and averred the Loyalty Board of the Post Office Department had instituted proceedings against him to procure his dismissal from the federal service because of alleged disloyalty said to be evidenced by his membership in IWO. In the intervening petition which he sought to file, Drayton prayed the same relief as that asked by IWO and sought to have the court enjoin the appellees from causing him to be dismissed because of his membership in IWO.

The District Court denied Drayton's motion for leave to intervene and, on appellees' motion, dismissed the complaint on the ground IWO had no standing to sue. Both IWO and Drayton appeal.

Distilled to its essence, IWO's complaint asked the District Court to review the Attorney General's unilateral action, taken under and for the purposes of the Executive Order, in designating it as subversive. Since that action was nothing more than a step in the executive department's loyalty screening program with respect to its employees — with no other direct objective or impact — IWO's real assertion is that it is constitutionally entitled to judicial scrutiny of a part of the government's decisional process on the question whether or not to decline to employ or to retain in its service any of IWO's members whom it suspects of disloyalty.

The appellant, IWO, strongly relies upon Columbia Broadcasting System v. United States, 1942, 316 U.S. 407, 62 S.Ct. 1194, 86 L.Ed. 1563, as authority for the review-ability of the Attorney General's designation in this case. The Columbia Broadcasting case was one in which the Federal Communications Commission adopted regulations prescribing rules which governed contractual relations between radio stations and the networks. If an applicant for a license had entered into an affiliation contract, the regulations required the Commission to reject his application. If a licensee renewed an affiliation contract, the regulations authorized the Commission to cancel his license. The Supreme Court held those regulations to be reviewable.

In that case the Federal Communications Commission was exercising regulatory power over private business. But here the Executive Order and the action pursuant to it did not represent an exercise of regulatory power over private business or employment. The President did no more than to prescribe conditions to govern executive agencies in the selection of their employees, and to instruct the Attorney General to advise them with respect thereto.³ To do so, within the limits of his constitutional and statutory authority, was the right and duty of the Chief Executive. The employment and discharge of its civil servants, and the establishment of terms and conditions which must be met by employees or applicants for employment, are internal administrative matters concerning which the United States is free to act as it pleases, without judicial compulsion or restraint at the instance of an outsider such as the appellant, IWO. Compare Friedman v. Schwellenbach, 1946, 81 U.S.App.D.C. 365, 367, 368, 159 F.2d 22, 24, 25, certiorari denied 1947, 330 U.S. 838, 67 S.Ct. 979, 91 L.Ed. 1285, where we said:

"The United States has the right to employ such persons as it deems necessary to aid in carrying on the public business. It has the right to prescribe the qualifications of its employees and to attach conditions to their employment. The War Service Regulation which permits the removal from federal service of one concerning whose loyalty to the government the Civil Service Commission entertains a reasonable doubt undoubtedly was reasonable and proper and the making of it was well within the scope of the authority conferred on the Commission by the Act and the two executive orders. We are not concerned here with the question as to whether Friedman was in fact disloyal. Under the regulation he could be removed from service if the Commission had a reasonable doubt as to his loyalty."

When the Attorney General designated IWO as a subversive organization for the purposes of the Executive Order, he did no more than to advise the executive department in that respect, as he had been directed to do. If he was mistaken as to the true character of IWO, no court can cause him to change his conclusion. The correctness of administrative advice cannot be reviewed by the courts. Employers Group, etc., v. National War Labor Board, 1944, 79 U.S.App.D.C. 105, 143 F.2d 145.

We conclude that the act of the Attorney General in designating an organization as subversive for the purposes of the Executive Order, being a part of the government's process of exercising its authority to select its employees, and within the scope of the Executive Order, may not be judicially reviewed at the suit of the designated organization.

Moreover, nothing is more firmly settled than the...