Charlton v. F. T. C.
| Decision Date | 10 March 1976 |
| Docket Number | No. 74-1571,74-1571 |
| Parties | , 1976-1 Trade Cases 60,766 Francis J. CHARLTON, Appellant, v. FEDERAL TRADE COMMISSION. |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
Albert H. Turkus, Asst. U. S. Atty., Washington, D. C., with whom Earl J. Silbert, U. S. Atty., John A. Terry, James F. McMullin, Peter R. Reilly and David T. Stitt, Asst. U. S. Attys., Washington, D. C., were on the brief, for appellee.
Before TAMM, LEVENTHAL and ROBINSON, Circuit Judges.
Opinion for the Court filed by Circuit Judge SPOTTSWOOD W. ROBINSON, III.
Circuit Judge TAMM dissents from the foregoing opinion.
This appeal tenders a variety of objections to an order of the Federal Trade Commission reprimanding Francis J. Charlton, a member of its bar, and suspending him from practice before the Commission for one year. 1 On Charlton's ensuing challenge in the District Court, summary judgment was rendered in favor of the order. 2 We find, upon examination of the administrative record, that the Commission utilized an erroneous standard in measuring the evidence that led it to take disciplinary action. So, without reaching any other issue now pressed, we reverse the summary judgment and remand the case to the District Court with instructions to vacate the Commission's order and direct it to reconsider the evidence conformably with this opinion.
For nearly eight years, Charlton, a member of the Massachusetts and New York bars, was employed as a Commission attorney. After rising to the position of Chief of the Division of Food and Drug Advertising, he resigned to join the legal staff of General Foods Corporation. Less than three years later, he stood accused of transmitting to his employer a confidential Commission document describing evidence gathered in an ongoing investigation of breakfast cereal companies, including General Foods. 3
Charlton admits that he received the document from a recently-resigned Commission attorney and passed it on to his supervisor at General Foods. Charlton denies, however, that at the time he had knowledge of the contents of the document, and on that basis he vigorously protested his innocence. Thus emerging was a critical issue as to Charlton's credibility in light of the circumstantial import of other evidence presented to the Commission. No purpose useful to treatment of our immediate problem could be served by detailing the Commission's factual findings with reference to the charge. A sketch of the significant procedural events, however, is necessary to put the problem in proper context.
The Commission's handling of the incident began on an informal note. General Foods promptly notified the Commission of Charlton's transmittal of the document. 4 The Commission's chairman then referred the matter to the Department of Justice which, after investigation, concluded that there had been no violation of federal criminal law. 5 Some months later, the Commission honored Charlton's request for a hearing 6 by issuing an order requiring him to show cause why disciplinary action, including disbarment, should not be taken. 7 At the hearing, Charlton was represented by counsel and testified extensively in his own behalf.
In due course, the Commission announced its decision. 8 In its view, "(d) isciplinary proceedings against attorneys charged with improper conduct are inquisitorial rather than adversary in form and are corrective rather than punitive in purpose." 9 The Commission also felt that "(p)rocedurally, the task of the relevant tribunal is to use the simplest and most direct means of fairly determining, in the circumstances of the particular case, whether the alleged improper conduct has in fact taken place." 10 And, the Commission continued,
(t)he procedural requirements here are that (1) the accused attorney be given notice of charges, with an opportunity to be heard, and (2) the disciplinary order, if any, be based upon substantial evidence of record. 11 "Substantial evidence" means neither "preponderance" of the evidence nor that required to show guilt "beyond a reasonable doubt." It is, rather, 12
Applying that standard, the Commission concluded that "Charlton should have known and did know that the document he transmitted to the General Foods Corporation . . . was a confidential intra-agency document of a privileged nature and that his transmittal to that private firm was an improper act that reflected adversely on his fitness to practice before this agency." 13 On that evaluation of the evidence the Commission reprimanded Charlton and imposed a one-year suspension from practice before the Commission, but immediately reinstated him as a member of its bar. 14
Charlton then came to the District Court in an effort to set aside the Commission's decision and order. The Commission moved for summary judgment on the administrative record, and the court granted the motion. 15 Charlton's appeal then brought the case here.
We perceive one error which, all else aside, necessitates administrative reconsideration of the evidence. The crux of the difficulty is the Commission's use of a totally incorrect standard of proof in passing on Charlton's blameworthiness. It follows that, however Charlton might fare on his other contentions, the Commission's present disciplinary order could not be left standing.
The privilege of practicing law "is not 'a matter of grace and favor' "; 16 on the contrary, as quite recently recorded, "we have always viewed an attorney's license to practice as a 'right' which cannot lightly or capriciously be taken from him." 17 We have, too, remained advertent 18 to the Supreme Court's admonition that the power to withdraw that right "ought always to be exercised with great caution; and ought never to be exercised except in clear cases of misconduct, which affect the standing and character of the party as an attorney." 19 And contrary to the Commission's concept, 20 disciplinary proceedings "are adversary proceedings of a quasi-criminal nature," 21 and "(d)isbarment, designed to protect the public, is a punishment or penalty imposed on the lawyer." 22
Not surprisingly, then, it has become well settled that the charging party has the burden of proving that the charged attorney is no longer worthy of his office. 23 It was in the definition of that burden in the degree of proof required that the Commission faltered grievously. Its decision on disciplinary action was, in its words, to "be based upon substantial evidence of record." 24 "Substantial evidence," the Commission said, was not "the 'preponderance' of the evidence"; 25 but "something less than the weight of the evidence"; 26 it was, the Commission declared, "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." 27 In adopting that formulation as the criterion by which Charlton's conduct was to be gauged, the Commission hopelessly confused two legal canons designed to serve entirely distinct purposes.
To be sure, on judicial review of agency action, administrative findings of fact must be sustained when supported by substantial evidence on the record considered as a whole. 28 But that rule implicates only the reviewing court; the yardstick by which the agency itself is to initially ascertain the facts is something else again. 29 We need not pause to elaborate on the differing norms for treatment of the evidence in administrative and reviewing tribunals, respectively. 30 It suffices for present purposes simply to recall that in American law a preponderance of the evidence is rock bottom at the factfinding level of civil litigation. 31 Nowhere in our jurisprudence have we discerned acceptance of a standard of proof tolerating "something less than the weight of the evidence." 32
Disciplinary proceedings against attorneys do not involve any departure from the orthodox rule governing resolution of civil evidentiary contests. Almost seventy years ago, this court declared that the 33 The same view, though variously articulated 34 is the touchstone of judicial decisions across the Nation; 35 the bare minimum for a finding of misconduct is the greater convincing power of the evidence. 36 That the proceeding is administrative rather than judicial does not diminish this wholesome demand, 37 and the requirement should not have been relaxed in the case at bar.
We are unable to detect from the administrative record whether Charlton fell heir to the Commission's "substantial evidence" aberration because of some form of inadvertence, or rather because the Commission consciously felt that it was legally sound. Whatever the reason, the course of action now needed is clear. We reverse the District Court's summary judgment against Charlton and remand the case for further proceedings. The District Court will vacate the Commission's disciplinary order and will, in turn, remand to the Commission with instructions that it reconsider the evidence and redetermine the charge by application of the preponderance-of-the-evidence rule. We do not suggest that an additional evidentiary presentation is entailed; the Commission may well find it feasible to predicate its new decision on the record in its present state. And it goes without saying that we intimate no view as to what that decision should be. The District Court should also retain jurisdiction of the case pending...
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