In the Matter of the Complaint That ) May 23, 1958 ) BIOCHEM COMPANY, and ) C. S. GREEN, ) ) at ) H.E. Docket No. 5/133 ) New York, New York, ) ) are engaged in conducting a scheme for ) obtaining money through the mails in ) violation of 39 U. S. Code 259 and 732.) POST OFFICE DEPARTMENT WASHINGTON, D. C.
Ablard, Charles D.
A hearing in the above matter having been held on October 28, 1957, the Hearing Examiner rendered an Initial Decision on February 5, 1958, finding that the Respondent was using the mails to obtain money by false and fraudulent pretenses and recommended that an appropriate order for the suppression of the fraudulent enterprise be issued.
The Respondent has excepted to the finding of fraud in fact and to the finding of intent to deceive. Based on the evidence in the record and the pleadings submitted by counsel, the exceptions are disallowed as being contra to the facts and the applicable court decisions. The Initial Decision of the Hearing Examiner is affirmed and adopted as the Departmental Decision.
Since this case became ready for Departmental Decision, a reorganization in the Post Office Department established an independent Judicial Officer responsible directly to Postmaster General, who makes final departmental decision in administrative proceedings. New Rules of Practice were published effective April 26, 1958, and were served upon the Respondent. Those rules were made applicable to this and other pending cases.
On May 13, 1958, the Court of Appeals for the Second Circuit decided Vibra-Brush Corporation vs. Schaffer and Columbia Research vs. Schaffer holding that a fraud order issued by the Post Office Department was invalid for failure to comply with Section 3(a) of the Administrative Procedure Act which requires that "no person shall in any manner be required to resort to organization or procedure not so published." The Court said this section applied not only to affirmative resort but also to any "subjection to unpublished procedure." The Court went on to say, "We hold the order at bar invalid for this reason, regardless whether the chain of subordination to the agency of both prosecutor and judge was in fact not sufficiently separated." The Rules of Practice of the Department have always been published and served upon this Respondent and others. The Respondent was notified upon the establishment of the Judicial Officer and while the precise relationships between prosecutor and adjudicator were not spelled out under former Rules, there can be no doubt that under the new Rules of Practice and the Delegation of Authority published on April 26, 1958, also served with the rules on the Respondent, there is now a true separation between the two offices. Until this recent reorganization, the Respondent was not subject to any action by Judicial Officer. The procedures and delegations of authority governing the action of the Judicial Officer were not only published but were served upon the Respondent. Therefore, it appears that the reason for holding the orders in Vibra-Brush and Columbia Research invalid are not applicable to this case.
I do not believe that the Court of Appeals decisions can be extended to the point of invalidating the proceedings in the instant case because the relationship between the prosecutor and adjudicator under the old rules was not spelled out. They did hold that the action of the adjudicator was void in those cases as that part of the procedure which subjected them to an order of the General Counsel was not sufficiently spelled out. The error has not been cured by the establishment of a Judicial Officer and publication of the Delegation of Authority from the Postmaster General to him. The language of Foreman and Clark, Inc. vs. National Labor Relations Board, 215 F.2d 396 (9th circuit) is still persuasive. They said "The clear purpose of Section 3(a), supra, is to provide a shield for a petitioner before the Board, or other agency, to protect him from being penalized for failing to resort to unpublished methods of procedure. It is not a sword by which a petitioner can strike down the agency's order, on the ground that the agency has not authorized itself to issue that type of order, by published a statement in the Federal Register]" (Emphasis not supplied) An order will be issued.