February 26, 1951
Ponente: Frankfurter, J.
FACTS
Universal Camera Corp. dismissed one of its employees, allegedly because said employee gave testimony under the Wagner Act/National Labor Relations Act.
The National Labor Relations Board (NLRB) ordered Universal Camera to reinstate the dismissed employee with backpay, and to cease and desist from discriminating against any employee who files charges or gives testimony under that Act.
The NLRB's order was affirmed by the CA for the 2nd Circuit, which, in coming up with its own ruling, did not take into account the examiner's adverse report on the ground that the NLRB itself rejected the same report.
The CA for the 6th Circuit disagreed, noting that the CA for the 2nd Circuit should have taken consideration of the entire records of the case, including those which are inconsistent with the NLRB's conclusion. This was to comply with the statutory provision in the Administrative Procedure Act, which stated that agency decisions must be supported by substantial evidence on the record considered as a whole.
To resolve the circuit split, the case was elevated before the SCOTUS.
RULING
Case remanded to the CA for a reconsideration of the trial examiner's report.
Whether the CA erred in affirming the NLRB's order. – NO.
The testimony of Universal Camera's witnesses was inconsistent, and there was clear evidence that the complaining employee had been discharged by an officer who was at one time influenced against him because of his appearance at the NLRB hearing. On such a record, the CA for the 2nd Circuit did not err in affirming the NLRB's order. [Note: Despite the Court’s pronouncement that the CA did not err in affirming the NLRB’s order, it still remanded the case to the CA for review.]
Whether the CA for the 2nd Circuit erred in holding that it was barred from taking into account the report of the examiner on questions of fact insofar as that report was rejected by the NLRB. – YES.
In disregarding the trial examiner's report, the CA for the 2nd Circuit relied on the NLRB's rejection of the same report. However, pursuant to the statutory provision requiring conclusions supported by substantial evidence on the record considered as a whole, it was imperative upon the CA to likewise reconsider the examiner's report.
As per the SCOTUS: "We do not require that the examiner's findings be given more weight than in reason and in the light of judicial experience they deserve. The 'substantial evidence' standard is not modified in any way when the Board and its examiner disagree. We intend only to recognize that evidence supporting a conclusion may be less substantial when an impartial, experienced examiner who has observed the witnesses and lived with the case has drawn conclusions different from the Board's than when he has reached the same conclusion. The findings of the examiner are to be considered along with the consistency and inherent probability of testimony. The significance of his report, of course, depends largely on the importance of credibility in the particular case. To give it this significance does not seem to us materially more difficult than to heed the other factors which in sum determine whether evidence is 'substantial.'"
Rationale for looking into the records as a whole: "The trend in litigation is toward a rational inquiry into truth, in which the tribunal considers everything 'logically probative of some matter requiring to be proved.' Machinery for discovery of evidence has been strengthened; the boundaries of judicial notice have been slowly but perceptibly enlarged. It would reverse this process for courts to deny examiners' findings the probative force they would have in the conduct of affairs outside a courtroom.".
Legislative/jurisprudential history of the "substantial evidence" test:
Section 10 of Wagner Act (1935): "The findings of the Board as to the facts, if supported by evidence, shall be conclusive." The SCOTUS read "evidence" to mean "substantial evidence," which, in Consolidated Edison Co. v. National Labor Relations Board, was defined as "more than a mere scintilla," but "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion."
The variant application of this standard to conflicting evidence resulted in criticisms and accusations of partisan bias pointing to irresponsible admission and weighing of hearsay, opinion, and emotional speculation in place of factual evidence.
To impose limitations on the administrative process and tighten control over determinations of fact, Congress enacted the Walter-Logan Bill in 1940. It was vetoed by then President Franklin Roosevelt.
In 1941, the Attorney General's Committee recommended against Legislation embodying a general scheme of judicial review. The majority noted that, notwithstanding the general dissatisfaction with the existing standards as to the scope of judicial review, to depart from the "substantial evidence" test would either create unnecessary uncertainty or transfer to courts the responsibility for ascertaining and assaying matters the significance of which lies outside judicial competence.
Three dissenters from the aforecited Committee noted that the current system or lack of system of judicial review led to inconsistency and uncertainty. They recommended that Congress enact principles of review applicable to all agencies not excepted by unique characteristics.
One of these principles was expressed by the formula that judicial review could extend to "findings, inferences, or conclusions of fact unsupported, upon the whole record, by substantial evidence." So far as the history of the movement for enlarged review is concerned, this was the first time the phrase "upon the whole record" appeared. This recommendation led to the passage of the Administrative Procedure Act.
In conformity with the substantial evidence test under the Administrative Procedure Act, Congress enacted the Taft-Hartley Act, which clarified ambiguities in the previous statutes, and included the phrase: "questions of fact, if supported by substantial evidence on the record considered as a whole x x x."
Currently, the standard of proof specifically required of the Labor Board by the Taft-Hartley Act is the same as that to be exacted by courts reviewing every administrative action subject to the Administrative Procedure Act.
DOCTRINE
A court will defer to a federal agency's findings of
fact if supported by "substantial evidence on the record considered as a
whole." The evidence supporting the agency's conclusion must be
substantial in consideration of the record as a whole, even including
the evidence that is not consistent with the agency's conclusion.
