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C I L L

Sari Francisco
Au.-u-1 31, 1949.

ftr. S. R# Carpenter, S e c r e t a r y ,
bot-ri o f Governors o f the
Jetiernl Reserve Sjystera,
Washington - 5 , X # C.
>
Dear Sai.ii
On Kor.
I vas eerv-^d v i t h copies o f the Exception
fend Appeal, A f f i d a v i t , en: B r i e f f i l e i v i t b the Boari by Counsel
f o r Tr&nsanerica.
I
seTiiic^ you herewith f o r f i l i r > i n the case a
short M-snoron- ium i n r e p l y to the^e papers* I &.lso enclose
a l a d d i t i o n a l copies w i t h the r e u e s t t h a t each o f the Board
l e i b e r s be f u r n i s h e d a copy ss v e i l as Jc,> j » i t h i n Oeor^-J Vest.
Very t r u l y y o u r s ,
(signed) Leonard
J • Leonard Tovnaend,'
Solicitor.
^cj-oaures




UNITED STATES OF AMERICA
BEFORE THE
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM

I n the M a t t e r

of

TRANSAMERICA CORPORATION

MEMORANDUM

As t h e r e c o r d i n t h e a b o v e - e n t i t l e d m a t t e r shows,
Respondent, on J u l y 3 , 1949, f i l e d w i t h the Board i t s

request

t h a t the f u l l Board hear and c o n s i d e r R e s p o n d e n t s m o t i o n , made
a t the c o n c l u s i o n o f the B o a r d ' s case, t o d i s m i s s the c o m p l a i n t
f o r alleged f a i l u r e of proof.

On J u l y 19, 1949, t h e Board

unanimously d e n i e d t h i s r e q u e s t (Governors E c c l e s and C l a y t o n
not p a r t i c i p a t i n g )

and d i r e c t e d t h a t the M o t i o n be r e f e r r e d t o

t h e Hearing O f f i c e r f o r

disposition.

On August 3 r d and 4 t h , 1949, arguments on the M o t i p n
t o Dismiss were h e a r d by the H e a r i n g O f f i c e r .

Counsel f o r

Respondent argued a l l day August 3 r d , consuming a p p r o x i m a t e l y
s i x hours.

The B o a r d f s S o l i c i t o r argued d u r i n g t h e morning o f

August 4 t h , t a k i n g a p p r o x i m a t e l y t h r e e h o u r s .

Counsel f o r

Respondent argued i n r e b u t t a l f o r one hour i n t h e a f t e r n o o n
s e s s i o n o f August 4 t h .

The m a t t e r was t h e n t a k e n under a d v i s e -

ment by the H e a r i n g O f f i c e r .
On August 16, 1949, the Hearing O f f i c e r served upon
Counsel f o r b o t h s i d e s n o t i c e o f h i s r u l i n g denying the M o t i o n
t o Dismiss and s e t t i n g September 19, 1949 as the d a t e f o r



resumption o f hearings.
Counsel f o r Respondent have now f i l e d w i t h the Board
t h e i r e x c e p t i o n t o the r u l i n g o f t h e Hearing O f f i c e r and have
a t t e m p t e d t o a p p e a l t o the Board from b o t h t h e r u l i n g denying
t h e M o t i o n t o Dismiss and t h e o r d e r s e t t i n g September 1 9 t h as
t h e date upon w h i c h the h e a r i n g s s h a l l be resumed.

An a f f i d a v i t

and b r i e f were s u b m i t t e d i n s u p p o r t o f R e s p o n d e n t s p o s i t i o n on
these m a t t e r s .
F i r s t , as t o the a t t e m p t e d appeal f r o m the r u l i n g
denying the M o t i o n t o D i s m i s s .

When the Board r e f e r r e d t h e

M o t i o n t o Dismiss t o the H e a r i n g O f f i c e r f o r d i s p o s i t i o n ,
d i d so w i t h t h e s t a t e m e n t , i n t e r a l i a ,

it

t h a t " N e i t h e r due process

o f l a w , nor any s t a t u t e a p p l i c a b l e t o t h i s p r o c e e d i n g ,

requires

t h e Board t o hear o r determine an i n t e r l o c u t o r y M o t i o n t o D i s miss f o r f a i l u r e o f p r o o f . "

The Board 1 s S o l i c i t o r assumes t h a t

the Board d i d n o t i n t e n d t h i s statement as merely an i d l e
remark, b u t on t h e c o n t r a r y , as i n d i c a t i n g t h a t , i n

referring

t h e m a t t e r t o t h e Hearing O f f i c e r f o r d i s p o s i t i o n , i t d i d so
only a f t e r a f u l l consideration of applicable l e g a l

principles

and w i t h t h e i n t e n t i o n t h a t i t s a c t i o n i n t h i s r e g a r d s h o u l d be
final.

What t h e Board s a i d t h e n seems t o t h e S o l i c i t o r t o be

e q u a l l y a p p l i c a b l e now and d i s p o s i t i v e o f C o u n s e l ! s a t t e m p t e d
appeal:




"The H e a r i n g O f f i c e r , . . i s t h o r o u g h l y f a m i l i a r w i t h
the record.
I t does n o t appear t h a t c o n s i d e r a t i o n by
him o f r e s p o n d e n t s m o t i o n t o d i s m i s s would unduly
d e l a y t h e p r o c e e d i n g , and i t m i g h t serve a u s e f u l
p u r p o s e . Hence, i n t h e e x e r c i s e o f i t s d i s c r e t i o n ,
and i n keeping w i t h t h e p o l i c y i m p l i c i t i n Sees. 5 ( c ) ,
7 ( b ) and 8 ( a ) o f t h e A d m i n i s t r a t i v e Procedure A c t
(5 U-S.C.A* Sec. 1004 ( c ) , 1006 ( b ) , 1007 ( a ) ) , t h e
Board i s r e f e r r i n g r e s p o n d e n t s m o t i o n t o d i s m i s s t o
t h e H e a r i n g O f f i c e r f o r c o n s i d e r a t i o n , f o r such h e a r i n g , i f a n y , as he may deem a p p r o p r i a t e , and f o r
disposition."

- 2 -

N o t h i n g c o n t a i n e d i n Respondent's b r i e f s h o u l d i n any
wise a l t e r t h i s view.

The s o - c a l l e d " a u t h o r i t y f o r t h e appeal t t

r e f e r r e d t o i n t h e f i r s t s e c t i o n o f Counsel 1 s b r i e f i s no
authority at a l l .

The r e f e r e n c e s t h e r e i n t o t h e p r o v i s i o n s

the A d m i n i s t r a t i v e Procedure A c t a l l d e a l w i t h t h e

!f

of

recommended

d e c i s i o n " o r " i n i t i a l d e c i s i o n " o f t h e o f f i c e r who p r e s i d e s a t
the t r i a l .

That means the " d e c i s i o n " w h i c h i s rendered a t t h e

c o n c l u s i o n o f t h e t r i a l , when, a l l t h e evidence has been r e c e i v e d .
And the same i s t r u e o f C o u n s e l ! s r e f e r e n c e t o t h e B o a r d ' s Rules
o f P r a c t i c e (Resp. B r . p . 3 , e t s e q . ) .

Except f o r Rule I V , w h i c h

merely d e a l s w i t h c o n t i n u a n c e s , changes, and e x t e n s i o n s o f

time,

a l l o f them d e a l w i t h t h e procedure t o be f o l l o w e d a f t e r the case
has been completed and have no r e f e r e n c e whatever t o procedure a t
purely interlocutory

stages o f t h e h e a r i n g .

Counsel argues t h a t t h e H e a r i n g O f f i c e r f a i l e d t o comp l y w i t h Rule V I o f the B o a r d ' s Rules o f P r a c t i c e because he
f a i l e d t o make a r e p o r t t o t h e Board i n d i s p o s i n g o f Respondent's
Motion to Dismiss.
patent.

A g a i n , the f l a w i n C o u n s e l ' s c o n t e n t i o n i s

The r e p o r t r e f e r r e d t o i n Rule V I i s , o f c o u r s e , the one

w h i c h the Hearing O f f i c e r must make a t the c o n c l u s i o n o f the case.
No such r e p o r t i s contemplated o r r e q u i r e d i n d e a l i n g w i t h p u r e l y
interlocutory decisions.

Counsel's c o n t e n t i o n , c a r r i e d to

l o g i c a l c o n c l u s i o n , would l e a d t o t h e absurd r e s u l t t h a t

its

the

H e a r i n g O f f i c e r must f i l e a r e p o r t t o t h e Board every time he
o v e r r u l e s an o b j e c t i o n t o t h e a d m i s s i o n o f evidence o r r u l e s on
some o t h e r m a t t e r o f an e q u a l l y i n t e r l o c u t o r y n a t u r e d u r i n g t h e
course o f t h e

trial.

Much space i n Respondent's b r i e f i s devoted t o expoundi n g the alleged v i t a l "nature o f the Motion to Dismiss".
course such a m o t i o n i s v i t a l j



but i t

is s t i l l

Of

interlocutory

and d e c i s i o n s on i n t e r l o c u t o r y m o t i o n s i n any k i n d o f p r o c e e d i n g ,
j u d i c i a l o r a d m i n i s t r a t i v e , are simply n o t a p p e a l a b l e .

And i t

is

no answer t o t h i s s t a t e m e n t f o r Counsel merely t o i n d u l g e i n t h e
somewhat i n s u l t i n g remarks c o n c e r n i n g t h e B o a r d ' s a l l e g e d reason
f o r r e f e r r i n g t h e M o t i o n t o Dismiss t o t h e H e a r i n g O f f i c e r

for

d e c i s i o n , and c o n c e r n i n g t h e H e a r i n g O f f i c e r ' s a l l e g e d f a i l u r e
g i v e a p p r o p r i a t e c o n s i d e r a t i o n t o Respondent's m o t i o n .

to

(See

d i s c u s s i o n commencing on page 6 o f C o u n s e l ' s b r i e f , w h e r e i n t h e
Board i s p i c t u r e d as h a v i n g f e l t t h a t " i t would be t o o much
t r o u b l e f o r the Board t o r e v i e w i t s S o l i c i t o r ' s evidence on the
m e r i t s " ; and t h a t commencing on page 14 w h e r e i n Counsel a s s e r t s
t h a t the Hearing O f f i c e r , n o t w i t h s t a n d i n g t h e r e c i t a t i o n t o t h e
c o n t r a r y a p p e a r i n g i n h i s n o t i c e o f August 1 6 t h , d i d n o t i n f a c t
weigh the evidence o r g i v e c o n s i d e r a t i o n t o t h e b a s i c

issues

i n v o l v e d i n the c a s e . )
The remainder o f C o u n s e l ' s b r i e f i s l a r g e l y a r e a r g u ment o f the p o i n t s s t a t e d i n i t s M o t i o n t o D i s m i s s , w h i c h have
a l r e a d y been r u l e d upon by the H e a r i n g O f f i c e r .

These r e q u i r e

no d i s c u s s i o n u n l e s s o r u n t i l t h e Board should r e v e r s e i t s

pre-

v i o u s d e c i s i o n t o l e a v e t o the H e a r i n g O f f i c e r the d i s p o s i t i o n
o f t h e p u r e l y i n t e r l o c u t o r y phases o f the case.

The B o a r d ' s

S o l i c i t o r r e s p e c t f u l l y r e q u e s t s t h a t t h e Board r e f u s e t o change
i t s r u l i n g on t h i s

subject.

N e x t , as t o t h e a t t e m p t e d a p p e a l from t h e r u l i n g o f
t h e H e a r i n g O f f i c e r s e t t i n g September 1 9 t h as the d a t e f o r
resumption o f the h e a r i n g .

This, too, i s a purely

the

interlocutory

m a t t e r and one upon w h i c h i t was w i t h i n the power o f the H e a r i n g
Officer to rule.

Rule I V o f t h e B o a r d ' s Rules o f P r a c t i c e p r o -

v i d e s , i a t e r a l i a , as f o l l o w s :

"Each h e a r i n g s h a l l b e g i n a t

t i m e and p l a c e o r d e r e d by t h e Board, b u t t h e r e a f t e r may be



the

s u c c e s s i v e l y a d j o u r n e d t o such t i m e and place as may be o r d e r e d
by the Board or by t h e t r i a l

examiner. 1 1

There i s c e r t a i n l y n o t h i n g i n t h i s r e c o r d w h i c h
r e q u i r e s t h e Board a t t h i s stage o f t h e proceeding t o

entertain

an appeal f r o m t h e H e a r i n g O f f i c e r f s r u l i n g on t h e t r i a l

date.

Only a c l e a r abuse o f d i s c r e t i o n on t h e p a r t o f a h e a r i n g
o f f i c e r would seem t o j u s t i f y such a c t i o n .
n o t even a shadow o f such a showing h e r e .

Of c o u r s e , t h e r e

is

Nor c o u l d t h e r e be,

c o n s i d e r i n g t h e f a c t t h a t , w h i l e t h e c o m p l a i n t has been i s s u e d
f o r over a y e a r and two months, a c t u a l t r i a l o f the i s s u e s has
consumed o n l y 46 days.

Time and a g a i n t h e Hearing O f f i c e r >

both

on and o f f the r e c o r d , has i n d i c a t e d t o Counsel f o r b o t h sides
t h a t he expected Counsel t o p u t t o f r u i t f u l use the p e r i o d s
d u r i n g w h i c h the case, f o r one reason o r a n o t h e r , was i n r e c e s s .
(For remarks o f t h i s c h a r a c t e r on the r e c o r d , see T r a n s c r i p t
pages 2935 > 3815, and 3461.)

at

And when we c o n s i d e r t h a t the Hear-

i n g O f f i c e r f i x e d a d a t e f o r the r e s u m p t i o n o f h e a r i n g s more
t h a n 30 days from h i s d e c i s i o n on t h e M o t i o n t o Dismiss — a
p e r i o d i n excess o f t h a t a c t u a l l y r e q u i r e d by S e c t i o n 11 o f the
C l a y t o n A c t f o r t h e commencement o f t h e t r i a l o f the e n t i r e case
— i t would be p a t e n t l y absurd t o charge the Hearing O f f i c e r
w i t h an abuse o f d i s c r e t i o n i n s e t t i n g a date so f a r i n advance
f o r the resumption o f hearings here.
The B o a r d ' s S o l i c i t o r r e s p e c t f u l l y r e q u e s t s t h a t
Board r e f u s e t o e n t e r t a i n Respondent's appeal because i t
o b v i o u s l y n o t h i n g more t h a n a c o n t r i v e d e f f o r t t o s t a l l

is
the

h e a r i n g s ana thus postpone f i n a l judgment on the m e r i t s o f
case.
Respectfully

August 31, 1949



submitted>

the

this