Morgan v. United States
298 U.S. 468 (1936)
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Rule of Law:
In a quasi-judicial administrative proceeding, the statutory requirement of a 'full hearing' mandates that the officer who makes the final determination must personally consider and appraise the evidence and arguments presented. This duty cannot be fully delegated to subordinate staff.
Facts:
- The Secretary of Agriculture initiated an inquiry into the reasonableness of rates charged by market agencies at the Kansas City Stock Yards under the Packers and Stockyards Act.
- An examiner appointed by the Department of Agriculture took extensive testimony.
- At the conclusion of the testimony, the market agencies, including Morgan, requested that the examiner prepare a tentative report to which they could file exceptions and present arguments, but this request was denied.
- Oral arguments regarding the evidence were held before the Acting Secretary of Agriculture.
- The final order, which fixed maximum rates, was signed by the Secretary of Agriculture.
- Morgan alleged that the Secretary made this decision without having personally heard or read any of the evidence or oral arguments.
- Morgan further alleged that the Secretary's sole information about the proceeding came from private consultations with employees in the Department of Agriculture.
Procedural Posture:
- The Secretary of Agriculture issued an order setting maximum rates for market agencies.
- Fifty market agencies, including Morgan (plaintiffs), filed suit against the Secretary in the U.S. District Court, seeking to enjoin the order's enforcement.
- The plaintiffs' complaint alleged, among other things, that they were denied the 'full hearing' required by statute because the Secretary had not personally considered the evidence or arguments.
- The government (defendant) filed a motion to strike the paragraph of the complaint containing the allegations about the lack of a proper hearing.
- The District Court granted the government's motion to strike these allegations.
- The District Court then entered a final decree sustaining the Secretary's order and dismissing the plaintiffs' complaints.
- The plaintiffs (appellants) brought a direct appeal to the Supreme Court of the United States.
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Issue:
Does an administrative agency provide the 'full hearing' required by statute when the final decision-maker signs an order without personally hearing or reading any of the evidence or oral arguments, instead relying solely on consultations with subordinate staff?
Opinions:
Majority - Mr. Chief Justice Hughes
No. When a statute requires a 'full hearing' in a quasi-judicial proceeding, the decision-maker must personally consider the evidence and arguments. The Court reasoned that a proceeding to set rates, which involves taking evidence, making findings of fact, and issuing an order, has a 'quality resembling that of a judicial proceeding.' The requirement of a 'full hearing' is not satisfied if the decision-maker acts merely on the advice of subordinates without engaging with the record. While assistants may sift and analyze evidence, the fundamental duty to consider and appraise it rests with the officer who makes the determination. This duty is akin to that of a judge; it is a personal obligation that cannot be entirely delegated. Therefore, the allegation that the Secretary made his decision without reviewing the evidence or arguments, if proven true, would mean a 'full hearing' was denied.
Analysis:
This case establishes the foundational administrative law principle known as 'he who decides must hear.' It imposes a quasi-judicial standard on agency heads in formal adjudicatory or rate-making proceedings, ensuring that the ultimate decision-maker is personally accountable for the factual basis of the ruling. The decision safeguards due process by preventing agency heads from simply 'rubber-stamping' the conclusions of subordinate staff without personal consideration of the record. While later cases would clarify the extent to which a decision-maker can rely on staff summaries, Morgan I remains a landmark decision defining the substance of a fair hearing in the administrative state.
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