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MOTION OF THE DEPARTMENT OF JUSTICE TO
SET ASIDE RULINGS OF THE PRESIDING OFFICER
Once again, the presiding officer has sought to restrict participation by the Department of Justice ("Department") in hearings initiated by USDA to consider possible changes in the milk marketing order program. On November 15, 1990, the Department finally was permitted to present the testimony of its expert witness, Dr. Sheldon Kimmel, concerning its proposals to modify the milk marketing orders. Following Dr. Kimmel's testimony, the presiding officer issued a number of extraordinary rulings designed to frustrate the effective presentation by the Department of its position. The presiding officer ruled (1) that testimony given by Dr. Kimmel may not be briefed or cited in this proceeding by the Department, or any other counsel or party; and (2) that Dr. Kimmel was not an expert witness. The presiding officer also stated repeatedly that the Department was not a person or party in this proceeding and implied that it might not have authority to file a brief here at all. Each of these rulings is without factual or legal support and should swiftly be set aside.
On May 31, 1990, the Department submitted four proposals to the United States Department of Agriculture ("USDA") for inclusion in the upcoming hearings to consider possible changes in the Federal milk marketing order program. Three of these proposals were included in the Notice of Public Hearing on Proposed Rulemaking ("hearing notice"). 55 Fed. Reg. 29035 (1990). The Department's witness, Dr. Kimmel, was scheduled to testify on September 17, 1990, at the Minneapolis session of the hearings. The Department scheduled its witness on that date to meet USDA's "expect[ation] that those witnesses representing . . . large government agencies will present the main thrust of their testimony at the longer sessions of the hearing . . . ." 55 Fed. Reg. At 29034 (1990).
The presiding officer barred the Department from participating when it appeared at the hearings on September 17. Ruling that the Department was not an "interested person" under Section 900.8(b)(1) of the USDA Rules of Practice, 7 CFR § 900.8(b)(1), the presiding officer prohibited the Department both from offering a witness in support of its proposals or cross-examining any witness offered by any other party. This first attempt by the presiding officer to restrict Department participation in the proceeding was certified to the USDA Judicial officer for review.
Two days later, on September 19, 1990, the USDA issued a Decision and Order affirming the right of the Department to participate fully in the proceedings. The presiding officer certified the matter again, however, on September 26, 1990, claiming that USDA's decision did not resolve the question because it was a "sua sponte" decision unaccompanied by any motion or pleading. The USDA issued another Decision and Order on September 28. It reiterated that "federal agencies, including the Department of Justice, may participate fully in this proceeding" and stated that "the issue has been completely resolved." Finally, in its Decision and Order of November 13, 1990, the USDA reaffirmed its prior rulings, stating that the relevant rules of practice contain no restrictions on the type of "interested persons" that may participate at the hearings, and do not purport to prohibit the participation of governmental entities at the rulemaking hearing.
On November 15, 1990, the Department of Justice returned to present the testimony of its witness, Dr. Kimmel. Numerous objections were again made with regard to the Department's right to participate in the proceedings. At the conclusion of Dr. Kimmel's testimony,(1) the presiding officer once again -- despite repeated USDA orders to the contrary -- sought to restrict the Department's participation in this proceeding by ruling that the testimony of Dr. Kimmel may not be briefed by the Department or by any other counsel or party. (November 16, 1990 Hearing Trascript ("Tr.") at 16.) Indeed, the presiding officer continued to assert that the Department was not a person or a party to this proceeding (Id.; November 15, 1990, Tr. At 81-82), and implied that the Department did not have the right to file a brief at all.(2) The presiding officer based his ruling that Dr. Kimmel's testimony may not be briefed on his ruling that Dr. Kimmel's testimony may not be briefed on his erroneous conclusions that Dr. Kimmel was not an expert (November 15, 1990 Tr. At 140; November 16, 1990 Tr. At 16), and that his testimony revealed an apparent violation of USDA's ex parte rules (November 16, 1990 Tr. at 16). These rulings are neither supported by applicable law nor any fact.
The Department's right to fully participate in these proceedings has been resolved in three separate Orders decided by the USDA. Indeed, the presiding officer's statements calling into question the Department's right to file a brief and its status in this proceeding directly contravene USDA's express rulings in its first Decision and Order, issued on September 19, 1990:
[t]he Attorney General of the United States or other appropriate officials of the United States Department of Justice, and duly authorized officials of other Federal agencies, are interested persons within the meaning of the rules of practice governing this proceeding. (7 C.F.R. 900.1 et. Seq.) Accordingly, these agencies may participate fully in this administrative rulemaking proceeding including, but not limited, to submitting proposals, presenting testimony and exhibits, cross-examining witnesses and filing written briefs and exceptions. (emphasis added)
USDA has twice reaffirmed this decision. On September 28, 1990, it stated that "the issue has been completely resolved and the Department of Justice . . . should be allowed to participate fully in the proceeding . . . ." Again, on November 13, 1990, USDA stated that the relevant rules of practice contain no restrictions on the type of "interested persons" that may participate at the hearings, and do not purport to prohibit the participation of governmental entities at the rulemaking hearing.
Under USDA's Rules of Practice, 7 CFR § 900.9 interested persons in the proceeding, such as the Department, may file proposed findings and conclusions, and written arguments or briefs, at the close of the USDA hearings.
The Department's status as a full participant in these rulemaking proceedings is fully consistent with the Administrative Procedure Act ("APA"). An "agency" expressly can be a "party" under the APA, 5 U.S.C. 551(3), and as a party, DOJ is entitled to participate in a rulemaking or adjudicatory hearing. 5 U.S.C. 556(d). This participation, of course, includes the filing of proposed findings and conclusions, written arguments or briefs, or any other appropriate filings.
There is no support, in either fact or law, for the presiding officer's ruling that Dr. Kimmel's testimony, while a part of the record, cannot be relied on or cited in the brief by the Department or other party. Section 900.9 of USDA's Rules of Practice states that interested persons may file with the hearing clerk proposed findings and conclusions, and written arguments or briefs, based upon the evidence received at the hearing. 7 CFR § 900.9. As evidence received in the hearing, Dr. Kimmel's testimony thus should be available for the Department and any other party to use on brief.
The presiding officer appeared to base his ruling on his "observations" that Dr. Kimmel did not apply "whatever expertise he may have had in the general field of economics" to the issues under debate in this hearing and that there was an apparent violation of USDA's ex parte rules.(3) That there is no violation of the ex parte rules is discussed in Part V below. (November 16, 1990 Tr. At 16.) As discussed below in Part IV, Dr. Kimmel's credentials are impressive and there is little doubt that he qualifies as an expert in this proceeding.
Whether or not Dr. Kimmel has been qualified by the presiding officer as an expert, however, is not determinative of the admissibility of his testimony nor of the propriety of its citation in briefs. Evidence is liberally admitted in administrative proceedings. K. Davis, Administrative Law Text, § 14.01 (3rd ed. 1972); McCormick, Handbook of the Law of Evidence, § 350 (2nd ed. 1972). See Multi-Medical Convalescent and Nursing Center v. NLRB, 550 F.2d 974, 977 (4th Cir. 1977) (liberal admissibility of evidence required in nonjury district court trial or administrative proceeding to avoid reversible denial of due process). The traditional rule, requiring opinion testimony to be offered by experts only, does not apply in administrative proceedings. Brockton Taunton Gas Co. V. Securities and Exchange Commission, 396 F.2d 717, 721 (1st Cir. 1968).(4) The question in an administrative proceeding is, thus, not whether a witness is qualified as an expert, but rather what weight to give his opnion testimony. Administrative Law Tex, supra, § 14.11 (3rd ed. 1971); Keller v. FTC, 132 F.2d 59, 61 (7th Cir. 1942).
An examination of Dr. Kimmel's qualifications, as set forth in his Curriculum Vitae (attached hereto as Appendix A), his direct testimony (attached as Appendix B), and his testimony during cross examination, make clear that the presiding officer's denigration of Dr. Kimmel's expertise is incorrect and unsupported by the facts.(5) USDA should flatly reject any ruling or finding by the presiding officer that is premised on a conclusion that Dr. Kimmel is less than fully qualified as an expert in these proceedings.
Dr. Kimmel's professional credentials and experience demonstrate that he would qualify as an expert under Rule 702 of the Federal Rules of Evidence. That Rule provides that a witness may be qualified as an expert (and thus be permitted to testify as to his or her opinions) because of his or her "knowledge, skill, experience, training or education" when that opinion will assist the trier of fact to understand the evidence or to determine a fact in issue. Dr. Kimmel's expert testimony in this administrative proceeding substantially will assist USDA in evaluating the proposals made by the Department and other parties.
The presiding officer's ruling and observations imply that Dr. Kimmel must know every detail of every milk marketing order and every specific of the day to day operations of a dairy farm to qualify as an expert in this proceeding. That is incorrect. The proposition that an expert need not be specially qualified in the narrow field about which he or she testifies in order to qualify as an expert and give testimony is well established. In Gardner v. General Motors Corp., 507 F.2d 525 (10th Cir. 1974) the court found that a mechanical engineer and a chemical engineer were properly qualified to express opinions pertinent to the question of a defect in a truck's design system, notwithstanding the defendant's claim that neither was an expert in the field of exhaust system design. Id. At 525, 528. The Tenth Circuit adopted as consistent with Rule 702 of the then proposed Federal Rules of Evidence, the trial court's ruling that:
[W]here an expert has the education or background to permit him to analyze a given set of circumstances, he can through reading, calculations, and reasoning process from known scientific principles make himself very much expert in the particular product even though he has not had actual practical experience in its manufacture. Id. At 528.
Thus, under the Federal Rules of Evidence, Dr. Kimmel's educational and professional background would qualify him as an expert in this proceeding.
Dr. Kimmel's direct testimony fully sets forth the basis for the Department's three proposals to modify the milk marketing program. It first provides an explanation of regulation and markets in general, and then analyzes the effects of the specific reforms sought by the Department. The testimony demonstrates that Dr. Kimmel is, by reason of his knowledge, skill, experience, training and education, thoroughly familiar with, and well versed in, fundamental and advanced economic principles, and that he applied these principles to the milk marketing industry, and the impact of the Department's proposals. This analysis will assure that the record in this proceeding is complete, and will assist the USDA in its consideration of the many proposals that have been advanced in this hearing.
The presiding officer's charge that Dr. Kimmel's testimony revealed an "apparent violation" of USDA's prohibition against ex parte communications with its decisionmakers (November 16, 1990 Tr. At 16) is unfounded and wholly inconsistent with the facts.(6) The presiding officer based this accusation on Dr. Kimmel's testimony that he disseminated his proposed testimony for review and comment to employees at USDA's Economic Research Service ("ERS"). (November 15, 1990 Tr. At 379 - 381.) However, none of these ERA employees -- and, indeed, no ERA employees -- are in any way involved in the decisional process of this proceeding.(7) At no time did Dr. Kimmel send to or discuss his testimony with anyone at the Agricultural Marketing Service, the USDA division charged with the decisionmaking responsibility in this hearing or with any representative of any other USDA organizational unit to which the ex parte prohibitions apply.(8) Finally, Dr. Kimmel did not allow the ERS employees to see his testimony before it was seen by participants in the hearing: Dr. Kimmel distributed his testimony to the ERS employees only after fifty copies of his proposed testimony were sent to the milk marketing hearings and made public on November 1, 1990, at the presiding officer's request.
For the reasons stated above, the Department respectfully requests that the USDA set aside any ruling by the presiding officer that (1) in any way limits the participation by the Department in this proceeding, (2) in any way limits the Department, or any other person or party in this proceeding, from relying upon Dr. Kimmel's testimony in its brief or other written filings, or (3) in any way limits the weight that should be afforded Dr. Kimmel's testimony as an expert witness.
February 4, 1991
CERTIFICATE OF SERVICE
I hereby certify that this 4th day of February, 1991, a copy of the foregoing Motion of the Department of Justice to Set Aside Rulings of the Presiding Officer was served, by first class mail, postage prepaid, upon all parties on the attached service list of this proceeding.
Economist, Regulatory Economics Section, Antitrust Division, U.S. Department of Justice, since 1980.
Ph.D., University of Chicago, 1980
U.S. v. Country Lake Foods Inc., et. al. (March 1990)
EPA Asbestos Proposal (May 1986)
USDA Egg Marketing Order Hearings (March 1986)
U.S. v. Rice Growers Association et. al. (January 1985)
Safeway application to Hawaii Board of Agriculture to sell California Milk (October 1983)
USDA Orange Marketing Order Hearings (April 1983)
Papers and Publications
"Existence, Uniqueness and Efficiency of Auction Equilibira" EAG Discussion Paper, June 1989
"Pareto Inferior Trade?" EAG Discussion Paper, September 1988
"Price Correlation and Market Definition." EAG Discussion Paper, September 1987
"Marketing Orders and Stability: The Case of California-Arizona Oranges." EAG Discussion Paper, July 1987
"Joint Production and Monopoly Extension through Tying" (Tim Brennan, coauthor), Southern Economic Journal, (October 1986)
"A Note on Extraction with Nonconvex Costs", Journal of Political Economy, December 1984
"Intransitive Choice and Dependence on 'Irrelevant' Alternatives", Economic Policy Office Working Paper, March 1983
"Quotas and Tariffs: The U.S. Sugar Program", Ph.D. dissertation University of Chicago, December 1980
USDJ comments on EPA Proposed rule on stratospheric ozone 1988
USDJ comments on EPA Proposed rule on stratospheric ozone 1987
USDJ comments on EPA Asbestos mining and import restrictions 6-30-86
USDJ comments on FCC Syndication and Financial Interest Rule 4-26-83
Filed Declarations or Affidavits
US v. ADM 1-9-87
Sheldon Kimmel is an economist with the Antitrust Division of the United States Department of Justice. He received his Doctorate in economics from the University of Chicago in 1980 and he has worked in the Division since then. His address is room 11-443, Antitrust Division, USDJ, 555 Fourth St. NW, Washington, DC 20001.
The Southern Economic Journal published an article written by Dr. Kimmel and a co-author on tie-ins in October 1986. He published an article on extraction of exhaustible resources in the Journal of Political Economy (December 1984). His dissertation was a study of some effects of the U.S. sugar quota.
His work at the Antitrust Division includes analyzing the effects of various legislative or regulatory policies and business practices on prices, production and welfare. He has also refereed articles for the Journal of Political Economy, the Journal of Industrial Economics, the Southern Journal of Economics, and Managerial and Decision Economics.
1. Dr. Kimmel's direct testimony was marked as Exhibit 211 and made a part of the record. Cross examination on the substance of Dr. Kimmel's testimony followed more than two hours of voir dire examination conerning Dr. Kimmel's qualifications.
2. The presiding officer asked counsel for the Department to "quote . . . the authority" supporting her assertion that the Department had the right to file a brief in the proceeding. He then said that the Department's authority to participate fully here "is found only in the decision and order. I do not see anything in here that says you have the right to brief." (November 15, 1990 Tr. At 78). At another point, the presiding officer sated that "Department of Justice counsel . . . are considered to be neither persons nor parties, but have stature to participate only pursuant to the decisions and orders which have been issued by the Deputy Administrator." Id. At 81-82.
3. The presiding officer also made numerous observations impugning, among other things, Dr. Kimmel's "inability to display knowledge of the industry," and the use in his testimony of "generalizations" and "incomplete excerpts from his source material." (November 15, 1990 Tr. at 413-14). A review of Dr. Kimmel's direct testimony and extensive cross-examination reveal these charges to be without basis. In any event, such considerations affect the weight to be given Dr. Kimmel's direct testimony and not its admissibility. See Brockton Taunton Gas Co. V. Securities and Exchange Commission, 396 F.2d 717, 721 (1st Cir. 1968). See also Stempel v. Chrysler Corporation, 495 F.2d 1247, 1248 (5th Cir. 1974).
4. The agency may only exclude evidence that is irrelevant, immaterial, or unduly repetitious. 5 U.S.C. 556(d). Consistent with the APA standard, USDA's Rules of Practice provide that the judge shall exclude evidence which is immaterial, irrelevant, or unduly repetitious, or which is not of the sort upon which responsible persons are accustomed to rely. 7 C.F.R. § 900.8(d)(iii). A review of Dr. Kimmel's testimony makes clear that no valid claim for exclusion could be made on this basis. His testimony is reliable, highly relevant, material, and not repetitious.
5. The presiding officer stated that Dr. Kimmel was not an expert and did not associate any economic expertise to the issues under debate and particularly to the Department's proposals. (November 15, 1990 Tr. At 140; November 16, 1990 Tr. At 16).
6. USDA's prohibition against ex parte communications states:
At no stage of the proceeding following the issuance of a notice of hearing and prior to the issuance of the Secretary's decision therein shall an employee of the Department who is or may reasonably be expected to be involved in the decisional process of the proceeding discuss ex parte the merits of the proceeding with any person having an interest in the proceeding or with any representative of such person . . . . 7 CFR § 900.16(a).
7. Further, Dr. Kimmel testified that none of the ERS employees to whom he sent his proposed testimony provided him with any comments on his testimony prior to his appearance at the hearing. (November 15, 1990 Tr. At 384 - 85.)
8. The hearing notice identified the following organizational units to which this ex parte prohibition applied: Office of the Secretary of Agriculture, Officer of the Administrator, Agricultural Marketing Service (AMS), Office of the General Counsel, Dairy Division, AMS (Washington office only), Offices of all the Market Administrators. 55 Fed. Reg. 29035 (1990). At no time did Dr. Kimmel send his proposed testimony to any persons at any of these organizational units. Nor did anyone testify to any conversation between Dr. Kimmel and individuals at any of these organizational units concerning his testimony or the merits of this proceeding. Thus, Dr. Kimmel's actions were perfectly appropriate, and there is no basis for the presiding officer's finding of an apparent violation of the ex parte rules. Dr. Kimmel testified that he, along with counsel for the Department of Justice, attended a meeting with Richard Glandt and Gino Tossi of the Agricultural Marketing Service, during which Glandt and Tossi provided an explanation of the mechanics of the milk marketing order program. At no time during that meeting were any matters relating specifically to this proceeding discussed.