Parker v. Lester

Decision Date26 October 1955
Docket NumberNo. 14081.,14081.
Citation227 F.2d 708
PartiesLawrence E. PARKER, Peter Mendelsohn, Fred H. Kulper, Claude Payney, Theodore W. Rolfs and Harold Fontaine, Appellants, v. J. A. LESTER, Jack Eaton, John Rylander, Joseph E. Stika, J. E. Hannewyk and L. E. Carlson, Appellees.
CourtU.S. Court of Appeals — Ninth Circuit

Gladstein, Anderson, Leonard & Sibbett, Richard Gladstein, Norman Leonard, San Francisco, Cal., for appellants.

Warren E. Burger, Asst. Atty. Gen., Donald B. MacGuineas, Paul A. Sweeney, Attys., Dept. of Justice, Washington, D. C., Lloyd H. Burke, U. S. Atty., San Francisco, Cal., for appellees.

Before HEALY, McALLISTER and POPE, Circuit Judges.

POPE, Circuit Judge.

The appellants as plaintiffs below brought an action against the officers of the United States Coast Guard stationed in the San Francisco area who are charged with the administration and enforcement of certain executive orders and regulations issued and adopted for the purpose of excluding from employment upon merchant vessels persons not found to be "safe and suitable" for such employment. The action sought to enjoin the enforcement of the regulations and also asked for declaratory relief. It was alleged that the regulations were not authorized by statute; that they provided for procedures prohibited by the Administrative Procedure Act, 5 U.S.C. A. § 1001 et seq., and that the regulations, both as promulgated and as administered, have operated to deprive the plaintiffs of their liberty and property rights without due process of law, and that the regulations and the screening program established thereby are void and unconstitutional.

The district court granted the plaintiffs a measure of relief in that it entered a decree enjoining the defendant Coast Guard officials from giving any effect to a denial of security clearance and from preventing a seaman from being employed on merchant vessels, unless the seamen were furnished certain information and bills of particulars. Deeming the reach of the decree inadequate and asserting that the court erred in qualifying its injunction and in not enjoining any further operation of the screening program under the regulations, the plaintiffs have brought this appeal.

The facts in the case and the provisions of the applicable executive order and Coast Guard regulations are set forth at great length and in complete detail in the opinion of the district court, Parker v. Lester, 112 F.Supp. 433.1 For that reason nothing more needs to be done here than to summarize the facts which gave rise to the action.

In 1950, during the Korean crisis, Congress enacted the so-called Magnuson Act, 64 Stat. 427, 1038, Title 50 U.S.C.A. §§ 191, 192, 194. This Act provided that "Whenever the President finds that the security of the United States is endangered by reason of actual or threatened war, or invasion, or insurrection, or subversive activity, or of disturbances or threatened disturbances of the international relations of the United States, the President is authorized to institute such measures and issue such rules and regulations * * * to safeguard against destruction, loss, or injury from sabotage or other subversive acts, accidents, or other causes of similar nature, vessels, harbors, ports, and waterfront facilities in the United States, the Canal Zone, and all territory and water, continental or insular, subject to the jurisdiction of the United States." Thereafter the President issued executive order 10173.2 This order, as amended, found that the security of the United States was endangered by subversive activity and prescribed certain regulations relating to the safeguarding of vessels, harbors, ports and waterfront facilities in the United States. The order vested enforcement of the Act in the Coast Guard and provided that seamen should not be employed on American merchant vessels unless they held validated documents which the Commandant of the Coast Guard was not to issue "unless the Commandant is satisfied that the character and habits of life of such person are such as to authorize the belief that the presence of the individual on board would not be inimical to the security of the United States * * *."3

The regulations adopted by the Commandant of the Coast Guard pursuant to the executive order mentioned, recited that in determining whether security clearance would be denied, "the Commandant may consider whether on all the evidence and information available reasonable grounds existed for the belief" that the seaman (1) has committed acts of treason, espionage or sabotage; (2) is under the influence of a foreign government; (3) has advocated the overthrow of the Government by force or violence; (4) has intentionally disclosed classified information to unauthorized persons; or (5) is or recently has been a member of or affiliated with an organization designated by the Attorney General as totalitarian, fascist, communist, or subversive.4

Under the practice provided by these regulations when a seaman applies for clearance to accept employment, his application is checked by the Coast Guard, and if this is initially denied, he is so notified in writing. As noted by the trial court's opinion, at the time the case was tried these regulations merely directed that the person so denied clearance should be informed of the "general basis" of such denial accomplished by a form letter containing the general language quoted, 112 F.Supp. at page 439 of that opinion.

The decree below enjoined further administration of the security program unless a more specific statement of the basis for the initial determination be furnished the seaman "to be worded with such specificity as to afford the seaman reasonable notice of the said basis and an opportunity to marshal evidence in refutation thereof."5

It is to be noted that the first information which a seaman has is the notification that he may not further seek or continue employment upon any merchant vessel. He is given no opportunity to participate in the process of examining the facts which may have a bearing upon this initial determination. Although the decree below requires some measure of specificity in the notice of the initial determination of the Commandant, and although it permits the seaman to demand a bill of particulars, yet it specifies "that such bill of particulars need not set forth the source of such data, nor disclose the data with such specificity that the identity of any informers who have supplied such allegations or data will necessarily be disclosed to the said seaman or to other persons."

Following such an initial security denial, the seaman is permitted by the regulations of the Coast Guard to apply first to a local and then to a national appeal board, each composed of one Coast Guard, one management, and one labor member. The appeal board has before it the complete record on which the Commandant's initial determination to deny clearance was made; but none of this is disclosed to the seaman although he may appear in person and by counsel and may submit testimonial and documentary evidence.6

As the trial court pointed out, the record shows that when these seamen appeared before the appeal boards, some of them were questioned by the examiners for the board and some were not, but in general the board took literally the language of the executive order to the effect that "no person shall be issued a document required for employment * * * unless the Commandant is satisfied", etc. In short, the burden was placed upon the seaman, notwithstanding he knew neither the names nor identity of his accusers nor anything else about them.

It is to be noted also that upon the so-called appeals provided for by the regulations, the appeal boards are without power to do anything other than make a recommendation to the Commandant who "may either approve or reject the recommendation of the board, or remand the case for further proceedings". "The Commandant is the final authority to grant or deny security clearance". After he has considered recommendations of the board, he makes the final decision.

At the threshold of the argument in this court, the appellees asserted that the appellants have no standing to prosecute this action for the reason that they have failed to exhaust their administrative remedies. The same contention was made in the court below and the circumstances giving rise to the argument and the contention of the appellees are set forth in the opinion of the trial court. 112 F.Supp. at pages 440-441. The trial court upheld the right to maintain the action and rejected appellees' argument that failure to exhaust an administrative remedy made the action premature or required the court to deny relief. We agree with the district court's disposition of that contention.

At the time the trial court's decision was rendered, plaintiff Rolfs had been finally refused clearance by the Coast Guard Commandant although the court found that he had been invited to appear again before a local appeal board for a reexamination of the issues. We have noted that the Coast Guard has amended its regulations subsequent to the decree in an effort to conform to the holdings of the district court. The appellants have been given an opportunity to prosecute appeals under those revised regulations, and some of them have such appeals now in process, either before the local board or before the national appeal board. One appellant has failed to take an available appeal to the national board from an adverse decision of the local board. Hence, say appellees, the objection as to failure to exhaust administrative remedies still applies and those who have received clearance have no standing to sue. The district court held this suit properly brought as a class action under Rule 23(a)3, Fed.Rules Civ.Proc. 28 U.S.C.A. This holding is not challenged by appellees. Some of the appellants have not been cleared for employment, and hence they have standing here.7

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