Administrative Blackmail: the Remission of Penalties

Published date01 December 1951
Date01 December 1951
Subject MatterArticles
University of Utah
THE PAST HALF-CENTURY, both the volume and the
scope of administration have increased enormously. It could not
accurately be said that the administrative process has ousted the
legislative from its traditional functions. Rather, the administration has
supplemented the legislature, supplying detailed regulations in fields into
which the legislature had hitherto seldom ventured. However, it is true
that administration has taken over some of the most characteristic judicial
functions. For a time the Supreme Court stood out against this process,
holding that, at a minimum, issues of constitutional power and right must
be adjudicated in the courts; but although the Ben Avon1 case and
Crowell v. Benson2 have not been overruled, it appears that they are
being quietly eroded away.3 More recently, despite the Sixth Amendment,
administrative determination has been allowed to oust the jury from its
function as trier of fact in criminal caseS.4 Undoubtedly government has
gained in expedition by these changes. What is often overlooked is that
a price is paid for every advance in governmental efficiency. It cannot
be taken for granted that the gain always outweighs the loss. This is
a question which must be weighed anew in each particular case.
One of the most striking intrusions of administration into the judicial
field is found in the administration of penalties. Sanctions of many types
are available to administrative agencies, and these commonly include, in
both federal and state government, the power of agencies to assess penal-
ties : monetary fines, penalties, and forfeitures, and the forfeiture of goods,
vehicles, or other property.5 In some instances the imposition of the
penalty is made to hinge upon a quasi-judicial determination of the fact
of guilt, which is conclusive unless the reviewing court finds the admin-
istrative decision to be unsupported by substantial evidence.6
however, an independent, original court proceeding is necessary to enforce
collection of the penalty; the administration simply notifies the offender
1 Ohio Valley Water Co. v. Ben Avon Borough, 253 U.S. 287 (1920).
2 285 U.S. 22 (1932).
Kenneth C. Davis, Administrative Law (St. Paul: West Pub. Co., 1951), p. 918.
Falbo v. United States, 320 U.S.
549 (1944); Yakus v. United States, 321 U.S. 414 (1944). These cases
emerged out of the wartime draft and price control programs.
As used in this paper, the term "penalty" is confined to the above categories. Construing the term
broadly, one may also apply it to license revocations, the deportation or exclusion of aliens, the
withdrawal of government privileges, and so on.
This power of administrative agencies to impose penalties was upheld in Oceanic Steam Navigation Co.
v. Stranahan, 214 U.S. 320 (1909); Elting v. North German Lloyd, 287 U.S. 324 (1932), and Lloyd
Sabaudo Societa v. Elting, 287 U.S. 329 (1932).

of his violation, attempts to get him to pay voluntarily, and resorts to
prosecution if he does not. Even where there is an independent court
proceeding, however, the statute sometimes makes the administrative
finding prima f acie evidence of guilt, and places upon the offender the
burden of rebutting the presumption.
Administrative quasi-judicial activities encountered violent criticism
in the 1930’s and 1940’s,7 but this appears to have quieted down with the
passage of the Administrative Procedure Act of 1946 and the Taft-Hartley
Act. The Administrative Procedure Act has evidently satisfied the
demands of the American Bar Association, and the Taft-Hartley Act
converted many critics into admirers by making the National Labor
Relations Board available to employers in their disputes with unions.
Undoubtedly much of the criticism of administrative adjudication has
been ill-informed and unfounded. By and large, the major agencies have
developed a high sense of responsibility and settled reliable procedures.
Court review continues to be available; it was broadened to an undeter-
mined extent by the Administrative Procedure Act.$
But the administrative assessment of penalties frequently occurs in
conjunction with another device, that of administrative compromise,
remission, or mitigation.9 The possession of this power places in the hands
of the administrator an unintended means of compulsion. By assessing a
penalty and then offering to compromise or mitigate, he may induce
the defendant to settle his alleged liability in order to avoid the risk of
incurring the full penalty in a court proceeding.l° As a result the defend-
ant is often penalized without even an administrative hearing. The saf e-
guard of court review to protect the rights of defendants is bargained away.
Court review, however, is intended to serve another purpose. It is the
means of confining the actions of errant administrators, of holding them
true to the policies laid down by the legislature. The only means of
7 Especially violent were the various annual reports of the American Bar Association on the subject,
commencing in 1934, and the report, in 1937, of the President’s Committee on Administrative
Management. Roscoe Pound has been one of the severest critics of administrative justice and
headed a special committee of the Bar Association which in 1938 produced a strongly condem-
natory report, 63 American Bar Association Reports 331. There is a large literature defending the
agencies. Jerome Frank’s If Men Were Angels (New York: Harper and Bros., 1942) is a vigorous
challenge of Pound’s comments, which are, says Frank, op. cit., p. 33, "typical" of the blanket
denunciations of the agencies. "Even their detractors admit that the administrative agencies add
immensely to the efficiency of government. But they have been and are now conducting a cam-
paign of misrepresentation by which they hope to induce the public to believe that those agencies
are, by their nature, inimical to our democratic traditions, and that the government officials who
compose them are sponsors of ’personal government’ and ’absolutism.’ Those who know intimately
of the work of these agencies know that that campaign is based on distortion of the fact."
Id., p. 20.
Universal Camera Corp. v. National Labor Relations Board, 340 U.S. 474 (1951); National Labor Rela-
tions Board v. Pittsburgh S. S. Co., 340 U.S. 498 (1951).
The terms "remission" and "mitigation" are used interchangeably in statutes, regulations, and case law.
They are not employed interchangeably with the term compromise, even though generically and
in practical effect they are the same thing and there have apparently been no authoritative distinc-
tions made. For this reason, and because there is a slight procedural difference, this paper lists
the compromise authorizations separately from the remission or mitigation authorizations.
Normally the court, if it finds guilt, has no option but to inflict the whole penalty. Of course, where
the penalty is flexible the court does have a range of discretion within which to fix the penalty.
See below, p. 614.

invoking this supervision is litigation. If the litigants are bought off, the
administrators are free to shape policy as they please. Even the most
confident admirer of the administrative process cannot applaud the
decentralization of policy which this makes possible. A survey of the
extent to which administrators have been authorized to compromise and
mitigate penalties will make apparent the dangers involved in the use of
the device.
The Immigration Service of the Department of Justice administers
a number of regulatory measures concerning steamship and other carriers,
which include four instances in which the Attorney General may remit
penalties imposed by the Service. These four comprise cases in which a
carrier incurs a penalty for bringing to the United States an alien employee
who has a &dquo;loathsome or dangerous&dquo; physical or mental malady or
deficiency which could have been discovered at the port of embarkation;lr
for bringing an immigrant who lacks the required visa;12 for failing to keep
on board any alien seaman ordered detained; 13 and, if it is an aircraft,
for any violation of the immigration regulations. 14 The Service conducts
a hearing to determine the fact of guilt and to impose the penalty, which
is fixed in the statute. Administrative review of the decision is available
before the Board of Immigration Appeals, and the carrier is entitled to
judicial review, but only to determine whether there is substantial evidence
to support the administrative determination
Government contracting agencies may deduct fixed statutory penalties
from termination settlements with war contractors who overstate their
claims, and the Administrator of General Services is authorized, where he
deems it &dquo;just and equitable,&dquo; to mitigate these. 16 The findings of the
contracting agencies are prima f acie evidence in any litigation concerning
the deductions.
The Postmaster General may deduct up to three times the cost
of the service which mail contracting carriers fail to perform, and may
&dquo;impose fines ... for other delinquencies.&dquo; Then, in his discretion, he may
mitigate these penalties.17 In this unique instance the statutes provide
8 U.S.C.A. § 169 (1942).
8 U.S.C.A. § 216 (1942). Here the statute allows remission only if the Attorney General finds that the
carrier could not have discovered...

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