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44 A.B.A. J. 945 (1958)
Administrative Law: The Substantial Evidence Rule

handle is hein.journals/abaj44 and id is 945 raw text is: Administrative Law: The Substantial Evidence Rule by Frank E. Cooper - of the Michigan Bar (Detroit) In reviewing findings of fact, the appellate fedcral courts have evolved two different tests for setting aside findings alleged to be erroneous. In appeals from District Courts, the question is whether the findings are clearly erroneous, while on appeals from administrative agencies the issue is whether the findings are supported by substantial evidence. Mr. Cooper argues that the difference between the substantial evidence and clear error rules is the difference between Tweedledum and Twee- dledee and that the former should be abandoned as impractical and difficult to administer. The formula of substantial evidence on the whole record should be aban- doned as the criterion of judicial re- view of administrative findings of fact. The superficial plausibility of this doctrinel does not justify its retention. In accordance with the recommenda- tions of the Hoover Commission Task Force on Legal Services and Proce- dure, it should be replaced by a rule allowing the reviewing courts to set aside administrative findings of fact determined to be clearly erroneous. Such, in broad outline, are the con- clusions indicated by a study recently completed by a seminar group at the University of Michigan Law School,2 whose members undertook to read and analyze 188 cases decided by the Federal Courts of Appeals in tile five- year period 1951-1956 involving the application of the substantial evi- dence test.a The purpose of this paper, reporting the results of the study, is two-fold: (1) To indicate the basis afforded in court decisions for the conclusion above suggested; (2) To analyze the factors that per- suade courts to hold the evidence cited in support of- a challenged adnministra- tive finding to be substantial or otherwise. The first purpose, thus, is evangelical in nature. But the second purpose (which is based on the assumption that the suggested reform may not soon be accomplished) is the practical one of affording guidance in the argument of cases involving the application of the present rule. The principal defects in the sub- stantial evidence rule, as disclosed by an examination of the decisions seek- ing to apply it in reviewing adminis- trative determinations, are four in number. They wNill be summarized, and then discussed separately. (1) Many judges find it most diffi- cult to distinguish between the sub- stantial evidence and clear error tests. Attempts to differentiate between the two tests produce confusion for Bench and Bar alike. (2) The substantial evidence for- mula has not provided an objective criterion of review, nor one capable of precise and uniform application. It is applied differently in the several Judi- cial Circuits, and even within the same Circuit it produces disparate results- different standards of substantiality are applied to different agencies. (3) Further confusion is caused by the circumstance that too many law- yers both on and off the Bench-seek to use the substantial evidence test as a touchstone for the decision of cases where the question does not really involve the correctness of the findings of fact, but rather the reasonableness of the inference drawn from those find- ings. In the latter instance, the sub- stantial evidence rule does not prop- erly apply at all. (4) The substantiality test has been evolved with particular reference to review of N.L.R.B. decisions. The overwhelming majority of the cases applying the substantiality test con- cerns appeals from orders of this agency. Difficulties have been caused when an attempt is made to apply to the determinations of other agencies (where the factual findings have an entirely different content and char- acter) the principles worked out with reference to judicial review of N.L. R.B. orders. 1. The phrase was born as a compromise reflecting a bitter struggle between opposed schools of thought in the formative years of 1941-46. It was first given shape and content in 1951 by the landmark Supreme Court optn- ion in Universal Camera Corp. V. N.L.R.B., 340 U.S. 474, 71 S. Ct. 456 (1951). 2. Members of the group included Messrs. L. J. Colling, A. P. Fichera, A. Haswell, D. B. ring D. D. Lodwick, S. N. Shukla, D. W. Smith, N. W Stroup, J. D. Sullivan, T. M. Utchen, and B. S. Wayburn. Philip A. Fleming, now of the Washington, D.C. Bar, was chief research assistant. 3. An effort was made to find all the cases involving reversals of administrative findings on the pround that they were not supported by substantial evidence; some may have been over- looked. October, 1958 - Vol. 44 945

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