Southern Garment Mfrs. Ass'n v. Fleming

• Decision Date: 30 June 1941
• Docket Number: No. 7709.,7709.
• Citation: 74 App. DC 228,122 F.2d 622
• Parties: SOUTHERN GARMENT MFRS. ASS'N, Inc., et al. (BIG ACE MFG. CO. et al., Interveners) v. FLEMING, Adm'r, Wage and Hour Division, etc.
• Court: U.S. Court of Appeals — District of Columbia Circuit

74 App. DC 228, 122 F.2d 622 (1941)

SOUTHERN GARMENT MFRS. ASS'N, Inc., et al. (BIG ACE MFG. CO. et al., Interveners) v. FLEMING, Adm'r, Wage and Hour Division, etc.

No. 7709.

United States Court of Appeals for the District of Columbia.

Decided June 30, 1941.

COPYRIGHT MATERIAL OMITTED

Albert F. Beasley, of Washington, D. C. (W. Gordon McKelvey, of Nashville, Tenn., on the brief), for petitioners.

Irving J. Levy, Asst. Sol., of Washington, D. C. (Gerard D. Reilly, Sol., and Louis Sherman, Jacob D. Hyman, and Louis P. Haffer, Attys., United States Department of Labor, all of Washington, D. C., on the brief), Robert S. Erdahl and David Cobb, both of Washington, D. C., for respondent.

Before GRONER, Chief Justice, and MILLER and VINSON, Associate Justices.

VINSON, Associate Justice.

This is a proceeding to review and set aside certain wage orders for the Apparel Industry issued by the Administrator of the Wage Hour Division of the Department of Labor. The Fair Labor Standards Act of 1938,¹ the statute involved, has been rather comprehensively discussed by the Supreme Court in the recent Darby² and Opp Cotton Mills³ cases. We avoid duplicating that discussion as much as possible. Presently we give the general background of how these wage orders came into existence.

Pursuant to an invitation of the Administrator, a large group of representatives of labor and industry held a preliminary conference for three days discussing the appointment of a committee. After considering the resolutions of this body, and after conducting further investigations, the Administrator appointed a committee of 48 members for the entire apparel industry. The public, the employers, and the employees each had sixteen representatives. The Apparel Committee, known as Industry Committee No. 2, and its subcommittees met on January 31, February 1, March 15, 16, and 17, May 8 and 9, June 14, 15, and 16, and August 29, 1939. Extensive evidence was taken, and briefs were received. The Committee made its report, approved by all except one member,⁴ on September 27, 1939. The report contained 29 specific wage order recommendations.

After notice, hearings were commenced before a presiding officer appointed by the Administrator on November 13th. These hearings continued through January 10, 1940. There were nearly 150 witnesses. About 6,000 pages of testimony and 16 volumes of exhibits were received. Around 20 briefs from the major parties were received. Three days were devoted to oral argument before the Administrator.

The Administrator issued his findings, orders, and opinion, which covered 368 pages on May 15, 1940. He approved 27 and rejected 2 of the Committee's recommendations. The wage orders were to become effective on July 15, 1940. This court stayed the orders until final determination of the issues presented on review.

I. Appointment of the Presiding Officer.

The petitioners contend that the Administrator's act of appointing a person to preside for him at the hearing was an unlawful delegation of duty. They argue that the statute does not authorize such an appointment; that the legislative history shows that no such authority was intended, particularly in that it is the policy of Congress to expressly provide for a trial examiner whenever it intends for one to be employed; that authority cannot be implied from convenience and necessity, and moreover, there is no necessity here; and that the power of courts to make orders of reference is not analogous.

It is clear that the act expressly gives the Administrator power to appoint subordinates — a power which otherwise might well be implied from the amount and diversity of work such an agency is called upon to perform. The precise question is whether the Administrator can appoint a subordinate to act as the presiding officer at a hearing; is that a function which a subordinate can perform? Sensible administration would seem to call for such a practice. The practice has been approved by the Supreme Court. "Evidence may be taken by an examiner. Evidence thus taken may be sifted and analyzed by competent subordinates. * * * The requirements are not technical."⁵ The petitioners retort that the Court was laying down procedural due process requirements, in this the first Morgan case, while the question here is one of statutory authorization.

In that case, the Court, however, posed this question at the outset of the discussion on this matter, "* * * what is the nature of the hearing which the statute prescribes?"⁶ The petitioners in this case argue simply that the sub-delegation is not authorized, rather than that, since the appointment of a presiding officer is bad, the hearing is vitiated. But the Supreme Court in discussing the criteria of what makes the decider the hearer was necessarily treating the same fundamental problem of the functions which may be sub-delegated and those which must be exercised by the agency head. This is manifested by their question, "What is the essential quality of the proceeding under review * * *?"⁷ The Supreme Court in that case may have determined that the requirements of a statutory full hearing coincided with those of due process and hence the discussion of one was the discussion of the other, but even if we assume that the decision was predicated upon procedural due process alone the Court must have regarded the statutory authorization as giving everything up to the constitutional limit under the well established rule that constitutional problems will not be treated unless necessary. Thus we come to a comparison of the Fair Labor Standards Act with the Packers and Stockyards statute under which the Court, in the Morgan case, said evidence may be taken and analyzed by subordinates.

First the language relating to the general nature of the hearing: the Packers and Stockyards Act reads, "Whenever after full hearing * * * the Secretary is of the opinion * * *, the Secretary * * * may determine and order"⁸; the statute now involved reads, "Upon the filing of such report by the industry committee, the Administrator, after due notice to interested persons, and giving them an opportunity to be heard, shall by order * * *".⁹ In both statutes the subject of the sentence (the respective agency head) is directed primarily to the predicate decide and order. While "the one who decides must hear", it must be remembered that "hear" is used in the artistic sense of requiring certain procedural minima to insure an informed judgment by the one who has the responsibility of making the final decision and order. That did not necessitate the Secretary becoming a presiding officer at the hearing in the Morgan litigation, and there is no more reason for finding such a command in this part of the instant statute.

Now we compare the provisions of the statutes in respect of letting employees do some of the work. The Packers and Stockyards Act provides, "The Secretary * * * shall have the power to appoint * * * such * * * employees * * * as shall be necessary * * *".¹⁰ The Fair Labor Standards Act provides, "The Administrator may * * * appoint such employees as he deems necessary * * *".¹¹ The Packers Act continues, "The Secretary * * * may cooperate with any department or agency * * *".¹² And from the current Act, "The Administrator may establish and utilize such * * * agencies, * * * as may from time to time be needed."¹³ The Packers and Stockyards Act further states, "The Secretary, in person or by such agents as he may designate, may prosecute any inquiry necessary to his duties under this chapter in any part of the United States."¹⁴ Correspondingly, the Fair Labor Standards Act reads, "* * * the Administrator * * * or his duly authorized representative may exercise any or all of his powers in any place."¹⁵ The practice of using a subordinate as a presiding officer has been approved under the Packers and Stockyards Act. The comparison of the Act presently under consideration with that one reveals no less reason and possibly even more for such a practice by the Administrator. Furthermore in the Morgan case, the Court approved the handling of functions by subordinates beyond those which the presiding officer exercised in this case. Subordinates may sift and analyze evidence.

Although the petitioners say that the Court was passing upon only the constitutional issue, they make much of the fact that the Secretary, has since requested and obtained authority to delegate the duties vested in him. The cautiousness that leads to a request for a more precise and orderly statute should not be confused with a requirement. The greater point, in this instance, is, however, that the request for and the authority given in the amendatory act is not limited to appointing a presiding officer, but extends to a delegation of the Secretary's fundamental responsibility of making the decision. Under the new Act the Secretary may appoint an officer or an employee to perform the function of determining and ordering for him.¹⁶ This is the logical outgrowth of what the first Morgan case condemned in connection with an overworked Secretary of Agriculture.

This Act, to which petitioners have called our attention, exemplifies in bold relief the nature of the presiding officer's work in comparison with that of the Administrator. The contrast of the present intra-departmental relationship between the presiding officer and the Administrator with what is now the relationship in the Department of Agriculture, reveals the crux of the problem of what subordinates can do.

At this point the argument of Andree & Seedman, Inc., et al., petitioners in a consolidated case, becomes particularly pertinent.¹⁷ We consider their argument now in behalf of a logical and concise discussion. They argue that the presiding officer performed work that in effect changed the functions of the Administrator from those of a trial to those of an appellate judge. Thus the presiding officer must have exercised quasi-judicial...