In the Matter of the Complaint Against PROJECT PRAYER 336 Haddon Avenue at Westmont, New Jersey 08108 P.S. Docket No. 8/68; 11/07/80 Duvall, William A. APPEARANCE FOR COMPLAINANT: Sand ra C. McFeeley, Esq. Christopher T. Klepac, Esq. Consumer Protection Division Law Department United States Postal Service Washington, D.C. 20260 APPEARANCE FOR RESPONDENT: A. Andrews Giangreco, Esq. 110 North Royal Street Post Office Box 176 Tavern Square - Suite 301 Alexandria, Virginia 22313
On May 2, 1980, the United States Postal Service (Complainant) acting through the Consumer Protection Division, Law Department, Washington, D.C., filed a Complaint in which it charges that Project Prayer (Respondent), 336 Haddon Avenue, Westmont, New Jersey, is engaged in a scheme or device for obtaining money or property through the mails by means of false representation in violation of 39 U. S. Code § 3005.
In paragraph I of the Complaint it is charged that Respondent attracts attention to said scheme by means of telephone solicitations by Respondent, followed by letters and statements of payment due sent by Respondent, all of which are calculated to induce the recipients to remit money or property through the mails.
In paragraph II of the Complaint it is stated that there is attached to the Complaint as Exhibit 1 thereto (Appendix A to this decision) a copy of a recent solicitation letter used by Respondent which is typical of those referred to in paragraph I. In addition, a copy of an invoice sent out by Respondent is attached to the Complaint as Exhibit 2 (Appendix B to this decision).
Paragraph III of this Complaint contains the allegation that by means of materials such as Appendices A and B, and other materials similar thereto, including personal telephone calls to victims, Respondent represents, directly and indirectly, in substance and effect, whether by affirmative statements, omissions or implication that --
"(a) Project Prayer of Westmont, New Jersey is affiliated with Project Prayer of Las Vegas, Nevada, a national organization chaired by entertainer Pat Boon;
"(b) Project Prayer of Westmont, New Jersey is a non-profit organization which seeks the return of voluntary prayer to the classroom by means of securing passage of appropriate federal legislation;
"(c) Money received as a result of solicitations by Project Prayer of New Jersey will be used to lobby for the return of voluntary prayer to the classroom;
"(d) Respondent is John Williams of the Ann Arbor Michigan YMCA."
In paragraph IV of the Complaint it is charged that the aforesaid representations are false as a matter of fact.
In the Answer to the Complaint Respondent denies that it is engaged in various schemes or devices to obtain money or property in violation of 39 U. S. Code § 3005 and it specifically denied the individual paragraphs of the Complaint. Respondent asked that strict proof be demanded of the Complainant to support the allegations of the Complaint.
In brief, the case involves charges that the Respondent uttered false, material statements to obtain money through the mails by causing people to believe that Respondent is, or is connected with, a much larger organization domiciled in a Western state. The purpose of the Western organization appears to have been, and the purpose of Respondent's organization is alleged to have been represented falsely as, favoring and actively campaigning for the return to the use of voluntary prayer in the public school systems throughout the country. Respondent is alleged to have contacted members of the public by means of the telephone and by mail, and to have solicited contributions falsely represented as being for use in furtherance of the above purpose.
One person contacted by Respondent, was a Mrs. Beach of Ann Arbor, Michigan, who became suspicious and on September 10, 1979, wrote a letter to the Chief of Police at Westmont, New Jersey.
The Police Chief gave the letter and its enclosures to Detective Sergeant Edward Slimm of Haddon Township Police Department, who, in turn, presented these materials to postal Inspector Timothy J. Mahoney on October 2, 1979. Inspector Mahoney never had any conversations or correspondence with Mrs. Beach, but it was her letter to the Haddon Township Police Chief that brought about the investigation of this case. (Tr. 9, 91-92, 141, CX-1-a, b and c; CX-3). 1/
Inspector Mahoney called the YMCA at Ann Arbor, Michigan, on October 3, 1979, and asked to speak to the Director of the YMCA, Mr. John Williams. The person speaking in Ann Arbor identified himself as being Director Williams.
Mr. Williams said that he recalled having been asked before by a. Mrs. Beach about a "Project Prayer", but he said he was unaware of the organization and that he was in no way involved with it. Mr.Williams stated, also, that he was not engaged in the practice of raising funds by telephone. In the course of the conversation, Mr. Williams told the Inspector that he, Williams, had been contacted by a Mrs. Beach. Williams said that Mrs. Beach had called him to inquire about the same thing, the raising funds by Respondent, that the Inspector had discussed with him, and that Mr. Williams had told Mrs. Beach the same thing he told the Inspector (Tr. 10, 17).
On October 7, 1979, Inspector Mahoney called the Camden County (New Jersey) Clerk to see if Project Prayer is registered as a fictitious name under the New Jersey Fictitious Name Statute (CX-2). The telephone was answered by someone who indicated that the speaker was in the Clerk's office (Tr. 122). There was no fictitious name registration with respect to Project Prayer. On a personal visit to the Office of the New Jersey Secretary of State the Inspector learned that there was no record of Project Prayer as a corporation and Project Prayer was not registered as a charity in the Office of Charities Registration in New Jersey. As of June 6, 1980, Project Prayer was not registered as a lobbyist in the Office of the Clerk of the United States House of Representatives (Tr. 23).
In the following month, November 1979, Inspector Mahoney, using the telephone information printed on two of the documents (CX-1b and 1c) furnished to him by Detective Sergeant Slimm and as verified by the Westmont telephone directory, called Project Prayer. The phone was answered by a man who said "Project Prayer." The Inspector told the man that he was interested in the organization and that he wanted to find out what it did because the caller was interested in seeing prayer get back into the schools. The voice at Project Prayer said that the organization exists in order to petition members of Congress to get prayer back into the schools. The Project Prayer speaker referred to a bill that was sponsored by Senator Helms of North Carolina. The voice at Project Prayer asked for the caller's name and address, but the Inspector declined to give that information. Instead, the Inspector said he would like to write to Project Prayer and Respondent gave his address as "336 Haddon Avenue, Westmont, New Jersey." (Tr. 22)
On or about December 4, 1979, Inspector Mahoney visited the office of Project Prayer, which is located on the second floor of a former residence. There was no immediate response to his knocks on the door. After a short time, a woman who identified herself as Betty Turse came from a downstairs office and asked who the caller was looking for. The Inspector said he was looking for Project Prayer. Ms. Turse said that she was the secretary for A-1 Guardian Exterminators, the landlord of the building. She said that Project Prayer was located upstairs and that it was operated by one man who used the names Warren Abrams and Warren Lewis. There were also being conducted in the second-floor quarters the William Miller Manufacturing Company and, also, a publishing company. She said that all of the foregoing enterprises were operated by the same person, but that the rent was paid in the name of Project Prayer (Tr. 24, 25).
In February 1980, the Inspector returned to the office of Respondent. At that time there was present in the office a woman who identified herself as the secretary. She stated that this was where Project Prayer was located and that Mr. Abrams was the person who operated the enterprise. Mr. Abrams was not there at that time so the Inspector left his business card and asked the secretary to have Mr. Abrams call him (Tr. 26).
The next day the Inspector received a call from a man who identified himself as Warren Abrams. He also stated in response to the Inspector's questions that he was Warren Lewis and William Miller, under which latter name he had done business for a number of years. The William Miller Manufacturing Company was described by Abrams generally, as a publishing business, which published, among other things, the Gloucester Township directory (Tr. 60-61).
In response to questions, Mr. Abrams stated that Project Prayer was something he conducted voluntarily, apart from his businesses, to get prayer back in the public schools. The basic method by which he hoped to achieve that objective was by seeking petitions. He stated that he solicited only petitions, not money (Tr. 62).
At the conclusion of that conversation Mr. Abrams invited the Inspector to come back to the office for a visit. Mr. Abrams offered to show the Inspector, at a later visit, some of the petitions which were to be sent to Congressmen. Despite efforts made by telephone and by personal stops at Respondent's office, the Inspector never again succeeded in getting in contact with Mr. Abrams (Tr. 64).
On another occasion, February 26, 1980 (Tr. 70), Inspector Mahoney, using the name Thomas Schaeffer, again called the telephone number shown on Respondent's statements, and on other documents used by Respondent. At this time the person answering the call did so by saying "Project Prayer." Inspector Mahoney stated that he recognized the voice of the person answering the call as being that of Mr. Abrams. The conversation included further references to the petitions, and Mr. Abrams said that they were sent to Congressmen (Tr. 63).
In the course of this investigation Detective Sergeant Slimm brought to Inspector Mahoney a package containing Complainant's Exhibits 3, 4a through c, 5a through c, and 6a through g. Exhibit 3 is the letter of February 4, 1980, from General Chairman Samuel M. Cavnar, of the Nevada Project Prayer, confirming a telephone conversation of Mr. Cavnar with Sergeant Slimm. The most important portions of Complainant's Exhibit 3 are found in paragraphs 3, 4 and 5 of that letter, giving the history, present status and lack of affiliation of the West Coast "Project Prayer" with the Respondent.
On February 11, 1980, Inspector Mahoney dialed the telephone number appearing in the last paragraph of Complainant's Exhibit 3. When the call was answered the person speaking, in response to a question, identified himself as Mr. Cavnar. Inspector Mahoney had a second telephone conversation with Mr. Cavnar on March 14, 1980. In the course of these two telephone conversations, Mr. Cavnar stated that the Project Prayer of which he is General Chairman was stated shortly after the 1962 Supreme Court decision banning prayer from public schools. At that time, and through 1977, his organization engaged in raising funds in order to support both publications and rally-type activities in which people prominent in the entertainment filed participated. Since 1977, the activity of Mr. Cavnar's organization has been limited to (1) giving testimony before state legislatures and before the Congress regarding pertinent pending legislation and (2) sending publications to people who had subscribed in the past. Although funds no longer are actively solicited, some people have continued to send contributions and this money has been sufficient to permit continued operation. Mr. Cavnar stated that he is the person who testifies at various places on behalf of the organization, but that he is not a paid employee (Tr. 65-68).
In the sixties and early seventies Pat Boone was the Honorary Chairman of the organization and he provided liaison with the entertainment community. During the telephone conversation of February 26, 1980, which Inspector Mahoney, under the name Thomas Schaeffer, had with Mr. Abrams, the latter stated that Pat Boone was, to his knowledge, no longer connected with Project Prayer, but that Boone might still be connected with the group located in the West. During the conversation Mr. Abrams stated that his organization asked for money from time to time, but that he knew people were tired of being asked for money -- that they were too tired of being asked for money for various things, and at that time he did not want to ask the caller (Mahoney) for money. Inspector Mahoney, still under the name of Thomas Schaeffer, asked Mr. Abrams to send him some of the petitions )Ex. 4c) to be passed around among his friends. Mr. Abrams said he would send some of the petitions, along with a copy of an article from the Reader's Digest relating to the progress of the legislation relating to prayer. The petitions and this article were never received by the Inspector (Tr. 68-71).
Some of the exhibits accompanying CX-3 were 5a, b and c, which relate to the relationship between Respondent and Miss Grace E. Brooks. Inspector Mahoney obtained Miss Brook's telephone number through directory assistance and when the call was made, on March 12, 1980 (Tr. 82, the answering party, in response to a question, identified herself as Grace Brooks. The letter to Mr. Cavnar dated July 3, 1979, signed "(Miss) Grace E. Brooks", was discussed and the Miss Brooks on the telephone said that she had sent Mr. Cavnar that letter (CX-5a).
Miss Brooks said she was asked by telephone to give $100 to Project Prayer in Westmont, New Jersey. She told the solicitor that she could give only $50, which was the amount that she did contribute by check. She did not send the check immediately, but sent it only after a second telephone solicitation. Later, she received a communication from Mr. Cavnar's organization, following which she attempted to stop payment of the check. She notified the wrong bank, however, (CX-5b) and the check, number 417, was paid and the cancelled check bearing the endorsement "For dep't only Project Prayer 2-351-393" was returned to her (CX-5c). Miss Brooks previously had contributed to the organization of which Pat Boone was the National Chairman (Tr. 76-79).
After obtaining the telephone number through the directory assistance in Wolfeboro, New Hampshire, Inspector Mahoney, on March 12, 1980, attempted to reach Mr. Richard Palmer of that place (Tr. 82). The party answering the call identified herself as Mrs. Palmer, explaining that Mr. Palmer is deaf and cannot use the telephone. Thus, it is necessary that Mrs. Palmer carry on all the telephone conversations. Mrs. Palmer said that she had received a telephone call in April 1979, requesting that a monetary donation be sent to Project Prayer at the New Jersey address (CX-6a). She later received in the mail a bill type of form showing what she had pledged, which was $25 (CX-6d). After receiving this form, she made out a check to Respondent and sent it to the Respondent at 336 Haddon Avenue, Westmont, New Jersey (CX-6b). In September 1979, Mrs. Palmer received another call, this time requesting a donation in the amount of $200. The person who called had identified himself as "Mr. Williams." Following the call, she received through the mail one of Respondent's statement forms dated "9/18/79," but with no amount specified on it (CX-6f). Mr. Palmer transmitted Complainant's Exhibits as follows: 6d, to Mr. Cavnar by letter of May 31, 1979 (CX-6a); 6b, to Respondent by letter dated June 28, 1979 (CX-6c); and 6f and 6g to Pat Boone, National Chairman, Project Prayer, Membership Headquarters, P.O. Box 969, Reseda, Calif. 91335, by letter dated Sept. 20, 1979 (CX-6e). The Palmers previously had given money to the Project Prayer with which Pat Boone is affiliated (Tr. 79-81).
Another group of documents delivered to Inspector Mahoney by Det. Sergeant Slimm comprises the 4 series of Complainant's exhibits, including an unaddressed, undated note (CX-4a) and a form of a petition head "We the undersigned favor the return of voluntary prayer to public schools." (CX-4c) After finding the telephone number with the aid of directory assistance at Rochester, New York,
Inspector Mahoney attempted to call Mrs. Marie Tippy, Mrs. William B. Tippy. After making several attempts, Inspector Mahoney was able to complete the call on June 17, 1980. A woman answered the telephone and, upon being asked, identified herself as Mrs. Tippy. The Inspector and Mrs. Tippy discussed her contact with Respondent. She stated that she received a telephone call from a person who stated that he was calling on behalf of Project Prayer. The solicitor said "We have come a long way with the prayer legislation" and that "We have only one hurdle left to climb." The solicitor added "We could use your help, and this should be the last time that we will request any money from you." No specific amount of money was requested, and, subsequently, she received another of Respondent's statement forms (CX-4b) with no amount stated on it. Upon, or shortly after, the receipt of this last-mentioned form Mrs. Tippy sent Respondent a contribution of $25. During the week prior to the hearing, Mrs. Tippy received a mailing from Project Prayer which she did not open, but threw it away at the post office. Mrs. Tippy said she previously had made contributions to Project Prayer on the West Coast (Tr. 81-84).
The cross-examination of Inspector Mahoney was as thorough as circumstances permitted and consisted of a review of his direct testimony, generally, with respect to the following topics:
105 - 109 The relation between this proceeding and possible criminal action.
109 - 114 The practice of interviewing witnesses, including Ms. Andrews of Washington, D.C., by telephone, pointing out that there are Postal Inspectors in all
large cities throughout the United States who are available for gathering evidence, but that none was involved in this case except Inspector Mahoney.
114 - 120 The connection, if any, between the West Coast and New Jersey Project Prayer organization.
120 -122 The registration of the fictitious name.
122 - 133 The gathering of information by telephone and the basis of charges on that information; the use of the name "Schaeffer" by Inspector Mahoney; the Inspector's visits to Respondent's office and his conversation with Ms. Turse.
134 - 144 The contents, meaning and probative quality of the exhibits; conversations between Inspector Mahoney and Sergeant Slimm about this case and a possible criminal case; the New Jersey fictitious name statute, and whether Respondent is a lobbying organization.
145 - 150 More questions regarding a possible grand jury investigation in which Respondent points out the deprivation of rights involved in his inability to confront and cross-examine Ms. Turse with reference to her statement that rent for Williams Mfg. Co. was paid in name of Respondent.
151 - 161 Calls and/or correspondence to or from Cavnar of West Coast Project Prayer, Miss Brooks, Mrs. Palmer and Mrs. Tippy.
Inspector Mahoney repeated the statements he had made on direct examination and that testimony was not changed or negated.
The second and last witness called by Complainant was Mr. Randall R. Rader, Legislation Director for Congressman Philip M. Crane, Member of the House of Representatives from the Twelfth
District of Illinois. Representative Crane has as one of his interests the return of voluntary prayer to public schools. He filed a discharge petition to bring the Senate-passed bill on that subject, S. 450, to the floor of the House of Representatives for a vote. This subject is one for which Mr. Rader has been primarily responsible in Congressman Crane's office. As Legislative Director for Congressman Crane, Mr. Rader is familiar with the lobbying efforts elsewhere in the House and Senate. In this connection, he enlisted the support of such diverse groups as the American Legion, the Junior Chamber of Commerce and the American Farm Bureau, in addition to many religious groups and foundations which were interested. He is familiar with the Project Prayer Group with which Pat Boone is associated and he has had contact with that group (Tr. 27-30).
Prior to his notification of this proceeding, Mr. Rader had never heard of Project Prayer of New Jersey, and he said that if that organization were a registered lobbyist in respect to the public school prayer issue he would be aware of it. So far as he knew, Project Prayer of New Jersey is not a registered lobbyist, nor had it ever made a lobbying effort in the Congress in connection with prayer in public schools. He stated that he could not be positive if Project Prayer of New Jersey had sent a petition to a Congressman (Tr. 30-32).
The Project Prayer with which Pat Boone is affiliated is not, and does not have, a registered lobbyist so far as Mr. Rader knows. Also, it is not necessary that one who wishes to express his views to Congress in favor of prayer in the public schools be a registered lobbyist. Congressman Crane's office gets about 50 letters per day on this topic, but as of the date of the hearing Mr. Rader had not personally looked at those letters for about six months because, in part, of matters related to the presidential campaign of 1980. One of Mr. Rader's associates, however, has the specific assignment or reviewing and acknowledging the Congressman's mail related to prayer in the public schools. Thus, the fact that Mr. Rader knew of no communication from Project Prayer of New Jersey did not necessarily mean that no such communication was in existence. He did state that he would be surprised if Congressman Crane's office had recently received from the New Jersey Project Prayer a mailing containing over 280 pages, with 23 names per page, of persons who support the return of prayer to public schools (Tr. 32-46).
Mr. Rader contacted his office by telephone and learned that Congressman Crane had received a mailing from Respondent consisting of 5 pages of names, with 14 names per page, of people supporting prayer in public schools. This communication was acknowledged on June 10, 1980, by a letter from the Congressman (Tr. 48-51). On the average, letters of acknowledgement such as the one just mentioned are mailed from the Congressman's office in from 4 to 7 days from the date of their receipt (Tr. 53). The mailing from Respondent would normally, therefore, have been received in Congressman Crane's office between June 3 and June 6, 1980. On May 22, 1980, the hearing in this proceeding was continued from June 6 to June 18, 1980.
The procedural facts as they occurred and the substantive facts as they have been sought to be established have been set forth at length in order to lay the foundation for matters which I find to be serious shortcomings of this proceeding.
In taking the above view, the bifurcation of the authority of administrative agencies to deal with constitutional questions has been, and is, clearly in mind. The duality that exists with respect to this phase of the matter is clearly and succinctly expressed in the following statement:
"We commit to administrative agencies the power to determine constitutional applicability, but we do not commit to administrative agencies the power to determine constitutionality of legislation. Only the courts have authority to take action which runs counter to the expressed will of the legislative body." Administrative Law Treatise, Davis, Vol. 3, § 20.04; Engineers Public Service Corp., 9 S.E.C. 764, 768 (1941); Engineers Public Service CO. v. S.E.C., 138 F.2d 939, 952-953 (1941), dismissed as moot 332 U.S. 788; McGrath v. Washington, 541 F.2d 249, 251 (1976).
In finding that the hearing procedure in this case is flawed, it is appropriate to set forth the criteria against which the procedure has been measured.
To start at the beginning, the first two sentences of § 101 of the Postal Reorganization Act (now 39 United States Code) provides that -
"The United States Postal Service shall be operated as a basic and fundamental service provided to the people by the Government of the United States, authorized by the Constitution, created by Act of Congress, and supported by the people. The Postal Service shall have as its basic function the obligation to provide postal services to bind the nation together through the personal, educational, literary, and business correspondence of the people."
Pike v. Walker, 121 F.2d 37 (CADC, 1941) arose because the plaintiff charged that it was unfair for the prosecutor to prepare findings, which the plaintiff was not permitted to see prior to issuance, upon the basis of which, without reading the findings except to glance through the pages to acquaint himself with the nature of the scheme, the Postmaster General signed what was then designated a "fraud order" designed to deprive the plaintiff of the use of the mails. The court said:
* * * *
"As was said in Burton v. United States, 2/ the authority of the Post Office Department in the protection of the mail 'has its sanction in the power of the United States, by legislation, to designate what may be carried in the mails and what must be excluded therefrom; such designation and exclusion to be, however, consistent with the rights of the people as reserved by the Constitution'.
Precisely this view was expressed by Mr. Justice Brandeis in his dissenting opinion in United States ex rel. Milwaukee Publishing Co. v. Burleson, 3/ in which he said the power of Congress over the postal system, 'like all its other powers, is subject to the limitations of the Bill of Rights'; and by Mr. Justice Holmes in his dissenting opinion in Leach v. Carlile, 4/ wherein he expressed the same thought in these words:
'But when habit and law combine to exclude every other means of transportation of mail it seems to me that the First Amendment in terms forbids such control of the post as was exercised here.'
3 Whatever may have been the voluntary nature of the postal system in the period of its establishment, it is now the main artery through which the business, social, and personal affairs of the people are conducted and upon which depends in a greater degree than upon any other activity of government the promotion of the general welfare. Not only this, but the postal system is a monopoly which the government enforces through penal statutes forbidding the carrying of letters by other means. 5/ It would be going a long way, therefore, to say that in the management of the Post Office the people have no definite rights reserved by the First and Fifth Amendments of the Constitution, and if they have, it would follow that in administering the laws established to protect the mail and the regulations thereunder the duty of the Postmaster General would be,--to use the language of Justice Brandeis in the Burleson case, supra,--that:
'In making the determination he must, like a court or a jury, form a judgment whether certain conditions prescribed by Congress exist, on controverted facts or by applying the law. The function is a strictly judicial one, although exercised in administering an executive office. And it is not a function which either involves or permits the exercise of discretionary power'--which is to say, that his authority is governed by the Acts of Congress which confer it, and by the law of the land.
The necessity and right to transport business communications in the mail was expressed succinctly in Esquire v. Walker, 151 F.2d 49, at page 51 (CADC, 1945); affirmed sub nom Hannegan v. Esquire, 327 U.S. 146 (1945) in the following language:
"But mail service is not a special privilege. It is a highway over which all business must travel."
In view of the obligation of the Postal Service defined above in the excerpt from the Postal Reorganization Act and the authorities cited above, among others, it is settled that the use of the mails is a right guaranteed to all citizens, and the right of those people who support themselves, even in part, by "business correspondence" is the subject of specific mention.
There can not be attributed to the Congress, however, the intention to confer on anyone the right to use the mails for unlawful purposes. When it is believed that a person is abusing the right to use the mails, means are available by which that right can be revoked. The delineation of those means is now to be considered.
In Cates v. Haderlein, 189 F.2d 369 (C.A. 7, 1951), plaintiff sought to enjoin enforcement of a fraud order issued against Cates because the business in which he was engaged (sale of incense allegedly conferring supernatural powers on the inhaler) was held to be fraudulent. The fraud order was issued after a hearing in which a Post Office Inspector and a medical officer of the Food and Drug Administration testified. Cates attacked the order on the ground that the Postmaster General and the (then) Post Officer Department had not regarded or conducted themselves as being subject to the provisions and requirements of the Administrative Procedure Act; and, specifically, Cates alleged, on grounds not present in the instant proceeding, that he had not been granted a fair hearing as required by § 5(c) of that Act as then in effect (now 5 U.S.C. 554(d)). The District Court, first, and the Court of Appeals for the 7th Circuit, on May 23, 1951, agreed with Cates and held that the provisions of the APA were not applicable to the Postmaster General and the Post Office Department because, as the Court said, 39 U.S. Code 259 and 732 (precursors of § 4005 and, later, § 3005) did not contain the magic words "adjudication required by statute to be determined on the record after opportunity for an agency hearing" found in the aforesaid § 5(c) of the APA. Cates then petitioned the Supreme Court fora writ of certiorari and the petition was granted.
Prior to the time of the Circuit Court's decision in Cates, the Supreme Court issued its decision in Wong Yang Sung v. McGrath, 339 U.S. 33 (1950). Because the pertinent portion of that decision is so clear and so definitive, that portion of the decision is quoted, as follows (footnotes omitted):
IV
"The Administrative Procedure Act, 5, establishes a number of formal requirements to be applicable 'In every case of adjudication required by statute to be determined on the record after opportunity for an agency hearing.' The argument here depends upon the words ' adjudication required by statute.' The Government contends that there is no express requirement for any hearing or adjudication in the statute authorizing deportation, and that this omission shields these proceedings from the impact of § 5. Petitioner, on the other hand, contends that deportation hearings, though not expressly required by statute, are required under the decisions of this Court, and the proceedings, therefore, are within the scope of § 5.
Both parties invoke many citations to legislative history as to the meaning given to these key words by the framers, advocates or opponents of the Adminis-
trative Procedure Act. Because of § 5 in the original bill applied to hearings required 'by law,' because it was suggested by the Attorney General that it should be changed to 'required by statute or Constitution,' and because it finally emerged 'required by statute,' the Government argues that the section is intended to apply only when explicit statutory words granting a right to adjudication can be pointed out. Petitioner on the other hand cites references which would indicate that the limitation to statutory hearing was merely to avoid creating by inference a new right to hearings where no right existed otherwise. We do not know. The legislative history is more conflicting than the text is ambiguous.
But the difficulty with any argument premised on the proposition that the deportation statute does not require a hearing is that, without such hearing, there would be no constitutional authority for deportation. The constitutional requirement of procedural due process of law derives from the same source as Congress' power to legislate and, where applicable, permeates every valid enactment of that body. (emphasis supplied) It was under compulsion of the Constitution that this Court long ago held that an antecedent deportation statute must provide a hearing at least for aliens who had not entered clandestinely and who had been here some time even if illegally. The Court said:
This is the reasonable construction of the acts of Congress here in question, and they need not be otherwise interpreted. In the case of all acts of Congress, such interpretation ought to be adopted as, without doing violence to the import of the words used, will bring them into harmony with the Constitution.' The Japanese Immigrant Case, 189 U.S. 86, 101.
We think that the limitation to hearings 'required by statute' in § 5 of the Administrative Procedure Act exempts from that section's application only those hearings which administrative agencies may hold by regulation, rule, custom, or special dispensation; not those held by compulsion. We do not think the limiting words render the Administrative Procedure Act inapplicable to hearings, the requirement for which has been read into a statute by the Court in order to save the statute from invalidity. They exempt hearings of less than statutory authority, not those or more than statutory authority. We would hardly attribute to Congress a purpose to be less scrupulous about the fairness of a hearing necessitated by the Constitution than one granted by it as a matter of expediency.
Indeed, to so construe the Immigration Act might again bring it into constitutional jeopardy. When the Constitution requires a hearing, it requires a fair one, one before a tribunal which meets at least currently prevailing standards of impartiality. (emphasis supplied) A deportation hearing involves issues basic to human liberty and happiness and in the present upheavals in lands to which aliens may be returned, perhaps to life itself. It might be difficult to justify as measuring up to constitutional standards of impartiality a hearing tribunal for
deportation proceedings the like of which has been condemned by Congress as unfair even where less vital matters of property rights are at stake. (emphasis supplied)
We hold that the Administrative Procedure Act, 5, does cover deportation proceedings conducted by the Immigration Service." (id. 48-51)
At 342 U.S. 804, under date of October 8, 1951, there is the following cryptic, but pointed, entry:
"No. 166. Cates, Trading As Glory Bee Products v. Haderlein, Postmaster of Chicago. On petition for writ of certiorari is granted. Upon consideration of respondent's confession of error and the record, the judgment of the Court of Appeals is reversed and the case is remanded to the District Court with directions to vacate its order dismissing the complaint. Joseph Rosenbaum and Alvin E. Stein for petitioner. Solicitor General Perlman for respondent. Reported below: 189 F.2d 369."
Anticipating the entry of the above Order, the Post Office Department took steps aimed at compliance with the provisions of the Administrative Procedure Act. 6/ Conformity with those require- ments is now the standard procedure. 7/ There are, as may be expected, outcries from adversely affected Respondents that they are being persecuted procedurally, but current procedures have not been criticized by the courts.
It has been established that the use of the mails by a person for business purposes is recognized as a property right. The proposed revocation of that right is one which he is entitled to contest in a hearing conducted in the manner provided in the Administrative Procedure Act. The kind of a hearing to which such a person is entitled is the next subject of inquiry. On this subject reference is made, on the one hand, to the Administrative Law Treatise, 2nd Edition, 1978, by Professor Kenneth C. Davis, University of San Diego, formerly of the University of Chicago, and, on the other had, to the decisions of the Courts.
Chapter 11 of the Treatise, "Protected Interests," identifies certain interests and discusses the astonishingly different kinds of interests that have been held to be "protected," not protected, and sometimes both -- although not the latter in the same case. In Chapter 12, "Requirement of Opportunity for Trial-Type Hearing," Professor Davis states:
"Supreme Court decisions in an unbroken line of cases from the first decade of the twentieth century to the 1970s have interpreted due process to require a trial-type hearing on issues of adjudicative fact when sufficient interests are at stake (subject to the stated exception)." (Treatise, § 12:1, p. 406)
The exceptions are that:
"*** such opportunity is not required when (1) inspection or testing is deemed a better method for finding the disputed facts, (2) the party is entitled to de novo administrative or judicial review, (3) some urgency requires temporary action pending hearing, or (4) in a cost-benefit analysis the advantage of trial procedure is outweighed by its disadvantage." (id., § 12:11, p. 454)
None of the foregoing exceptions is applicable to the instant case.
Since the results of proceedings brought under 39 U. S. Code 3005 depend largely on the determination of disputed adjudicative facts, the trial-type of proceeding is the one required for such cases. What, then, are some of the elements of trial-type hearings in Postal Service misrepresentation cases?
The Fifth Amendment to the Constitution provides, in part, that "No person shall *** be deprived of life, liberty, or property, without due process of law ***."
In the Davis Treatise, the subject of "Confrontation" is discussed in § 12:9, at p. 444, in part, as follows:
"One element in full trial-type hearing is opportunity to be confronted by the adverse witnesses. When adjudicative facts are in dispute, our legal tradition is that the party affected is entitled not only to rebut or explain but also to 'confront his accusers' and to cross-examine them. *** Although confrontation is usually only one of a bundle of rights in administrative action, it sometimes is singled out as a special right."
One example of the situation in which the requirement for confrontation and cross-examination of accusers was recognized arose in a matter in which an attorney was denied admission to the Bar of his state on the basis of adverse statements by persons whom the attorney had not been permitted to confront and cross-examine. Quoting from Schware v. Board of Bar Examiners, 353 U.S. 232, 238-239 (1957), the Court said:
"A State cannot exclude a person from the practice of law or from any other occupation in a manner or for reasons that contravene Due Process."
Then the Court stated:
"We have emphasized in recent years that procedural due process often requires confrontation and cross-examination of those whose word deprives a person of his livelihood...We think the need for confrontation is a necessary conclusion from the requirements of procedural due process in a situation such as this." 373 U.S. 96, pp. 103-104 (1965).
In another case, Greene v. McElroy, 360 U.S. 474, (1959) Greene was an aeronautical engineer whose security clearance was revoked after an administrative hearing in which he was denied access to much of the information against him and he was given no opportunity to confront or cross-examine witnesses who gave statements against him. As a result of the revocation of the security clearance, he was discharged by his employer and he could not get employment elsewhere as an aeronautical engineer.
In setting aside the revocation of the security clearance, the Court said, among other things:
"We decide only that in the absence of explicit authorization from either the President or Congress the respondents were not empowered to deprive petitioner of his job in a proceeding in which he was not afforded the safeguards of confrontation and cross-examination."
One other case summarized by Professor Davis is Peters v. Hobby, 349 U.S. 331 (1955). The author said (Treatise, § 12:0, p. 446):
"An especially eloquent statement about need for confrontation was that of Mr. Justice Douglas in the Peters case. Dr. Peters had been discharged from his position as consultant in the Public Health Service on a finding of reasonable doubt as to his loyalty.
Mr. Justice Douglas said in concurring in the finding that the order removing Dr. Peters was invalid : ' Dr. Peters was condemned by faceless informers, some of whom were not known even to the Board that condemned him. Some of these informers were not even under oath. None of them had to submit to cross-examination. None had to face Dr. Peters. So far as we or the Board know, they may be psychopaths or venal people, like Titus Oates, who revel in being informers. They may bear old grudges. Under cross-
examination their stories might turn out to be yarns conceived by twisted minds or by people who, though sincere, have poor faculties of observation and memory' 349 U.S. at 350-351."
In the instant case, the Respondent in using the mails was exercising a right by means of which he obtained at least a part of his livelihood. Before that right can be taken away from him he is entitled to (1) confront his accusers and (2) subject them to the test of cross-examination, both of which aspects of his defense were not available to him, although he requested both (Tr. 147, e.g.). The Postal Service has no subpoena power in its proceedings under 39 U. S. Code 3005. Paradoxically, this agency has subpoena power in contract appeals brought under the "Contract Disputes Act of 1978" (41 U.S.C. 601, et seq.). Contract disputes may be said to illustrate the type of proceeding contemplated by the Supreme Court about which it said in Wong Yang Sung, supra, that "less vital matters of property rights are at stake." The problem caused by the absence of subpoena power in proceedings under 39 u. S. Code 3005 is starkly presented in the instant case. The problem could have been avoided, of course, by presenting evidence through witnesses who would then have been available for cross-examination. It is true that Respondent cross-examined Inspector Mahoney, but Inspector Mahoney was not really a witness. He was more comparable to a tape recorder or some other device or conduit by means of which the accusations were "played back" into the hearing record.
I conclude that the hearing was improper and fatally defective because the Respondent was not afforded the opportunity, required by procedural due process, of confrontation and cross-examination of his accusers.
Although the foregoing portion of the decision is regarded as being dispositive of this proceeding, there are one or two other matters concerning which comment is appropriate.
As it previously has been pointed out, the accusers in this proceeding were interviewed by telephone, and the interviewing/ investigating Postal Inspector testified as to the conversations that took place. Except for such testimony as was given by Mr. Rader, Representative Crane's Legislative Director, the Complainant's case consisted solely of Inspector Mahoney's recitation of the substance of the phone calls.
The problems, and their solutions, related to authentication of calls to or from persons communicated with by telephone are discussed in § 226, McCormick on Evidence, 2nd Edition, 1972, as follows:
"226. Authentication by Circumstantial Evidence: (e) Telephone Messages and Other Oral Communications.
Modern technology makes commonplace the receipt of oral communications from persons who are heard but not seen. The problems of authentication raised by these communications are substantially analogous to the problems of authenticating writings. Thus, if the witness has received e.g., a telephone call out of the blue from one who identified him as 'X', this is not sufficient authentication of the call as in fact coming from X. The requisite additional proof may take the form of testimony by the witness that he is familiar with X's voice and that the caller was X. Or authentication may be accomplished by circumstantial evidence pointing to X's identity as the caller, such as if the communication received reveals that the speaker had knowledge of facts that only X would be likely to know. These same modes of authentication are also recognized where communications have been received or recorded by modern devices other than the telephone.
A somewhat easier problem is presented when the witness testifies that he himself placed a telephone call to a number listed to X, and that the person answering identified himself as X. In such a situation the accuracy of the telephone system, the probably absence of motive to falsify and the lack of opportunity for premeditated fraud all tend to support the conclusion that the self-identification of the speaker is reliable. Thus most courts today view proof of proper placing of a call plus self-identification of the speaker as sufficient proof of authenticity to admit the substance of the call. Moreover, it is likewise held that where it is shown that the witness has called the listed number of a business establishment and spoken with someone purporting to speak for the concern, with respect to matters within its ordinary course of business, it is presumed that the speaker was authorized to speak for the employer."
The testimony indicates that Inspector Mahoney in each instance in which he placed a call having an important bearing on the case, obtained proper identification of the person with whom he spoke.
The parties contended at some length over the admissibility of the evidence obtained by the Inspector from these individuals.
Complainant urged that the evidence was admissible under Rule 803 (8) (c) of the Federal Rules of Evidence, and Respondent adamantly insisted that these conversations and their contents were not admissible under any Rule. The same arguments and the rulings admitting the evidence were made with respect to all of the exhibits except Complainant's Exhibit 1a, which was offered and received for the sole purpose of indicating the basis for the initiation of the investigation, and Complainant's Exhibit 4d, which purported to be an article from some unidentified newspaper.
The subject of the admissibility of hearsay evidence at an administrative hearing is discussed in Gilbert v. Johnson, 419 F. Supp. 559, at 880-881 (1976) as follows:
"(8) The Disciplinary Board relied on
inadmissible hearsay, and
hearsay-upon-hearsay
This oft-repeated objection was raised by Doctor Gilbert's counsel through every stage of the adminis-
trative hearing and against every witness. It is undisputed that much hearsay testimony was admitted by Chairman Doctor Christianson. What is at issue is the extent to which hearsay is admissible in an administrative hearing and whether plaintiff was substantially prejudiced thereby such that the admission of this hearsay deprived him of due process.
It has been held that administrative agencies are not restricted to rigid rules of evidence. Federal Trade Commission v. Cement Institute, 333 U.S. 683, 68 S.Ct. 793, 92 L.Ed. 1010 (1948); Prater v. United States, 172 Court of Claims 608 (1965); Chun Kock Quon v. Proctor, 92 F.2d 326 (9 Cir. 1937). Hearsay testimony is admissible in cases like the instant one, Reil v. United States, 456 F.2d 777, 197 Ct.Cl. 542 (1972). It has been held that hearsay evidence is admissible in administrative hearings as long as the evidence upon which a decision is based is both substantial and has probative value, Jacobowitz v. United States, 424 F.2d 555, 191 Ct.Cl. 444 (1970). Whether the hearsay constitutes substantial evidence must be weighted in light of the whole record. Reil v. United States, supra.
'Although hearsay evidence has been recognized as admissible in agency proceedings, reviewing courts have not lost sight of its shortcoming.' National Labor Re. Bd. v. Imparato Stevedoring Corp., 250 F.2d 297, 302 (3 Cir. 1957). Thus the Supreme Court has stated that the
'. . . assurance of a desirable flexi-
bility in administrative procedure does not go so far as to justify orders without a basis in evidence having rational proba-
tive force. Mere uncorroborated hearsay or rumor does not constitute substantial evidence.' Consolidated Edison Co. of New York v. N.L.R.B., 305 U.S. 197, 59 S.Ct. 206, 83 L.Ed. 126 (1938).
Hearsay evidence which has rational probative force and which is corroborated may constitute sub-
stantial evidence:
'The requirement that the administrative findings accord with the substantial evidence does not forbid administrative utilization of probative hearsay in making such findings . . . However the findings, to be valid, cannot be based upon hearsay alone, nor upon hearsay corroborated by a mere scintilla.' Willapoint Oysters, Inc. v. Ewing, 174 F.2d 676, 690 (9 Cir. 1949).
17 The Court therefore employees a standard which will sustain hearsay evidence if the hearsay has rational probative force and is corroborated by more than a mere scintilla. The Court's determination will be based on an examination of the whole record.
18 The plaintiff claims that the record of the Board's proceedings is 'replete with uncorroborated hearsay.' 'No two witnesses,' claims plaintiff's counsel, 'testified to the same specification.' Doctor Gilbert points to testimony by Doctor Jarman concerning the statements of Doctor Smith (not called to testify) and Doctor Thoroughman (deceased), and Doctor Crutcher's second-hand opinions from unnamed residents at the hospital as two examples of the hearsay and hearsay-upon-hearsay contained in the record.
The Disciplinary Board, however, made its findings of fact based on the first-hand testimony of those principals involved in the 22 specifications. For example, Doctor Jones testified about Specification II, in which he was named; Doctor Jarman testified about Specification I, which named him; Dean Richardson testified from first-hand knowledge about Specification IX; Doctor Coberly testified from first-hand knowledge about Specification VII; Doctor Butz testified first hand about Specification XV, which named him; Mr. Howard Stone testified from first-hand knowledge about Specification XXII and Mr. Stanley Buffa testified from first-hand knowledge about Specification XX."
The court found that the Board gave the most probative value to the non-hearsay evidence in the record and that the hearsay evidence itself was largely probative and was amply corroborated by other evidence. The plaintiff's objections concerning hearsay testimony were overruled.
The question of the admissibility in this case of the evidence which was acquired by telephone is moot in the present posture of the proceeding. It is not unlikely that opinions will differ both as to its admissibility and as to the probative value to which it would have been entitled.
Without in any way indicating my views on the matters mentioned in the preceding sentence, the image of the Postal Service would be greatly enhanced if the practice of basing an entire case on information obtained by long-distance telephone conversations with unseen, unknown persons has had its beginning and end in this case.
First, and regardless of whether or not such hearsay evidence is admissible, the Postal Service should be able to produce witnesses who are able to testify as to matters of their own knowledge and experience. It is not appropriate, whatever the Rules of Evidence may provide, to offer into the record at the hearing evidence which may, at best, be marginally admissible when competent, relevant and material evidence exists and is available. The Postal Service is obligated to citizens -- even to Respondents -- to support its complaints with the best evidence available, and that may not have been done in this case. There is reference in the record to a Ms. Andrews who lives in Washington, D.C., who may know something about this case. She was interviewed by telephone, but she was not called to appear and testify (Tr. 110-111).
Finally, Complainant urges that Respondent's failure to admit or deny the factual propositions listed in Complainant's Request for Admission and its failure to produce any documents in response to Complainant's Request for Production are a sufficient basis for the issuance of a mail stop order.
The part of the Rules applicable to the situation are the following from § 952.19:
(h) Not later than 5 days after the filing of Respondent's answer, any party may serve on the other party a request for the admission of specified facts. In the event the party served refuses timely to respond to the request for admissions, the presiding officer for good cause shown may require the party served to admit or deny each requested fact. The factual propositions set out in the request shall be deemed admitted upon the failure of a party to respond to the presiding officer's order for admission or denial.
(i) Not later than 5 days after the filing of Respondent's answer, either party may file an application for the production of documents or objects. The application shall state the cause therefor and specifically identify the documents or objects and their relevance and materiality to the cause or causes in issue. The presiding officer may order the other party to produce and permit the inspection and photographing of any designated documents or objects not privileged which are reasonably calculated to lead to the discovery of admissible evidence. If the parties cannot themselves agree thereon, the presiding officer shall specify such terms and conditions in making the inspection and taking the copies and photographs.
In each case, the rule provides that upon the non-occurence of certain events, the presiding officer, on application therefor, may issue an order requesting "the party served to admit or deny," or ordering "the other party to produce and permit the inspection and photography" etc. No request for such an order of the presiding officer was made and no such order was issued in this proceeding. Therefore, the predicate on which Complainant here seeks the issuance of a mail stop order does not exist. In any event, the deprivation of Respondent of its right to procedural due process outweighs Respondent's failure voluntarily to comply with Complainant's request for admission and application for production. Furthermore, it is pointed out parenthetically that the failure to produce the local witness (Ms. Andrews) gives rise to the question as to whether the testimony of that witness may have been adverse to the position of the Complainant. Even if admissible evidence exists, it must be presented during the course of a hearing in which a respondent's rights to procedural due process are permitted to be exercised.
In conclusion, a more straightforward, usual method of presenting what is basically an uncomplicated case would avoid much of the tedium and technicality encountered here.
The Complaint in this matter is dismissed.
1/ Because of the space that would be required adequately to describe them, the exhibits in this case (with the exception of CX-1a and CX-2), with their exhibit numbers indicated thereon, are attached to this decision.
2/ See 15 F.R. 6682, July 10, 1951.
3/ Language in the Postal Reorganization Act, P.L. 91-375, app. August 12, 1970 (84 Stat. 719) has at times been cited in support of the claim that proceedings under 39 U.S.C. 3005 are exempt from the provisions of the APA (e.g., 5 U.S.C. 554, 556 and 557). However, in view of the Supreme Court's holding in Wong Yang Sung that the constitutional requirement of procedural due process, where applicable, permeate every valid congressional enactment, procedures in cases brought under 39 U.S.C. 3005, since the enactment of the Reorganization Act have remained relatively unchanged, with most of the changes being aimed at providing more procedural rights (e.g., discovery) to the parties.
4/ 202 U.S. 344, 371, 26 S.Ct. 688, 694, 50 L.Ed. 1057, 6 Ann.Cas. 362.
5/ 255 U.S. 407, 430, 41 S.Ct. 352, 360, 65 L.Ed. 704.