Court Opinion

ID: 9643352
Source: CourtListenerOpinion
Date Created: 2023-08-22 20:27:00.098123+00
Date Added: 2024-06-11T18:10:59.837822
License: Public Domain

EDGERTON, Circuit Judge
(dissenting).
The facts have not been tried and we know nothing about them. Appellant may be" charitable as it says or subversive as appellees’ ruling says. By moving to dismiss appellant’s complaint on the ground it did not state a justiciable controversy or a claim on which relief could be granted, appellees elected to try only the sufficiency and not the -truth of appellant’s statements of fact. Since the District Court granted the motion to dismiss, appellant’s statements must be assumed to be true for purposes of this appeal. No other facts are before us.
According to appellant’s complaint: “Plaintiff, an unincorporated association located in the City and State of New York, is a charitable organization engaged in relief work. * * * The aims and purposes of the plaintiff organization are to, raise, administer and distribute funds for *85the relief and rehabilitation of Spanish Republicans in exile and other anti-fascist refugees who fought in the war against Franco. Before the end of the war in Europe, this relief consisted of: (1) the release and assistance of those of the aforesaid refugees who were in concentration camps in Vichy France, North Africa and other countries; (2) transportation and asylum for those of the aforesaid refugees in flight; (3) direct relief and aid, to those of the aforesaid refugees requiring help, through the Red Cross and other international agencies. At the present time, the Joint Anti-Fascist Refugee Committee relief work is principally devoted to aiding those Spanish Republican refugees, and other anti-fascist refugees who fought against Franco, located in France and Mexico. Pursuant to its aims and purposes, the plaintiff organization has, from its inception in 1942 through the end of 1947, disbursed a total of $1,011,-448.00 in cash and $217,903.00 in kind for the relief of anti-fascist refugees and their, families. The relief included money, food, shelter, educational facilities, medical treatment and supplies, and clothing to recipients in France, North Africa, the Dominican Republic, Portugal, Switzerland, Cuba, Venezuela, Mexico, the Netherlands, Spain, and the United States.
“By means of Voluntary and paid assistance, the plaintiff organization has raised funds from contributors at social affairs, rallies, meetings, ■ dinners, ■ theatre parties, etc. In order to carry on the aforesaid work, plaintiff has built up and is dependent upon the continued good will of the people of the United States and upon the continued maintenance of its reputation of engaging in relief work for the benefit of anti-fascist refugees.”
According to the complaint: the appellees, purporting to act under an Executive Order, have issued for the guidance of government officials in employing and discharging employees a ruling that the appellant is “subversive”.1 They issued this ruling without giving appellant any notice or hearing. They gave it wide publicity. It has caused appellant to lose reputation, members, supporters, contributions from government employees and others, valuable privileges, speakers, and meeting places. It has caused appellant’s members to be subjected to ridicule, obloquy and economic loss.
However indefinite the word “subversive” may be, it is more or less synonymous with “disloyal”. It is highly defamatory. No common meaning of the term fits the appellant if the appellant’s “aims and purposes” are what it says they are. In other words, if the complaint is true the appellant is' not subversive. Whatever the actual facts may ultimately prove to be, it must be assumed for purposes of this appeal that appellees’ ruling is not only damaging but contrary to fact.2
I. The Executive Order., Executive Order No. 9835,3 on which appellees rely, provides in Part V that: “1. The stand*86ard for the refusal of employment or the removal from employment in an executive department or agency on grounds relating to loyalty shall be that, on all the evidence, reasonable grounds exist for belief that the person involved is disloyal to the Government of the United States,
“2. Activities and associations of an applicant or employee which may be considered in connection with the. determination of disloyalty may include one or more of the following: * * * f. Membership in, affiliation with or sympathetic association with any foreign or domestic organization, association, movement, group or combination of persons, designated by the Attorney General as totalitarian, fascist, communist, or subversive, or as having adopted a policy of advocating or approving the commission of acts of force or violence to deny other persons their rights under the Constitution of the United States, or as seeking to alter the form of government of the United States by unconstitutional means.”. 5 U.S.C.A. § 631 note, (1948 Supp.), 12 Fed.Reg.1935, 1938.
An organization of the aims and purposes asserted in the complaint is not “subversive” within the meaning of that term in the Executive Order. Whatever it means in other connections, in this connection the term describes organizations “sympathetic association” with which may be evidence “that the person involved is disloyal to the Government of the United States.” Advocacy of revolution is disloyal to the government. Greater or equal loyalty to a foreign government is disloyal to the government of the United States. Nothing less is. Helping former Spanish Republicans is not evidence of disloyalty to the government of the United States.4 A charitable organization such as the appellant must now be assumed to be is therefore not subversive in the sense in which the word is used in the' Executive Order. Neither is it “totalitarian, fascist, communist, * * * ” or otherwise within the Order. On the present record, the Order does not justify appellees’ ruling.
The Order fails for another reason to-justify the ruling. The Order provides (Part III, § 3) that “The Loyalty Review Board shall currently be furnished by the' Department of Justice the name of each foreign or domestic organization, association, movement, group or combination of persons which the Attorney General, after appropriate investigation and determination, designates as totalitarian, fascist,, communist or subversive * * 5 (Emphasis added.) An investigation that may result in the making and publication of a defamatory ruling which limits employment throughout the government service,, limits the freedom of government employees, and harms not only the appellant but many persons outside as well as within the service, is not appropriate unless it conforms to basic standards of fairness. These include notice and a hearing. If the complaint is true, appellant was given none.
Appellees’ ruling is not only outside the Executive Order but outside the authority on which the Order is said to rest. Section 9A of the Hatch Act, 53 Stat. 1148, 18 U.S.C. 61i, now 5 U.S.C.A. § 118j, (194S: Supp.), forbids employment of members of an organization that “advocates the overthrow of our constitutional form of government in the United States.” If the facts alleged in the complaint are true the appellant is not such an organization. The Civil Service Act, R.S. § 1753, 5 U.S.C.A. § 631, (1948 Supp.) authorizes the President to “prescribe such regulations for the admission of persons into the civil service of the United States as may best promote the efficiency thereof * * On the present record, appellees’ ruling against appellant has no more tendency to iromote the efficiency of the civil service than a similar ruling against the Republican party or the Methodist Church would have.6
*87Moreover, the ruling is invalid on constitutional grounds.
II. Due process of law. Arbitrary official action that inflicts damage takes liberty or property without due process of law. On this record, appellees’ ruling is arbitrary because it is contrary to fact, because it is not authorized by law or Executive Order, because it has no tendency to benefit the public service, and because it was made without notice and hearing.
“A person’s right to reasonable notice of a charge against him, and an opportunity to be heard in his defense—a right to his day in court—are basic in our system of jurisprudence; and these rights include, as a minimum, a right to examine the witnesses against him, to offer testimony, and to be represented by counsel.” In re Oliver, 333 U.S. 257, 273, 68 S.Ct. 499, 507, 92 L.Ed. 682. These rights are not confined to proceedings in courts. In the Morgan ease, which the Supreme Court cited as “among the multitude that support” the statement just quoted, the plaintiffs attacked an order of the Secretary of Agriculture fixing rates to be charged by market agencies. The Court said “the rudimentary requirements of fair play * * * demand ‘a fair and open hearing.” Morgan v. United States, 304 U.S. 1, 14-15, 58 S.Ct. 773, 775, 82 L.Ed. 1129.
We were recently reminded that “due process of law has never been a term of fixed and invariable content. * * * The right of oral argument as a matter of procedural due process varies from case to case in accordance with differing circumstances, as do other procedural regulations.” Federal Communications Commission v. WJR, The Goodwill Station, Inc., 337 U.S. 265, 69 S.Ct. 1097, 1103. “That which may, in one setting, constitute a denial of fundamental fairness, shocking to the universal sense of justice, may, in other circumstances, and in the light of other considerations, fall short of such denial.” Betts v. Brady, 316 U.S. 455, 462, 62 S.Ct. 1252, 1256, 86 L.Ed. 1595. What is practically necessary may be reasonably fair, and what is reasonably fair may be due process. It is not practical to require a public official to hold a hearing before he makes a casual damaging statement. But it is neither fair nor necessary to enact and publish a defamatory permanent regulation restricting eligibility for public employment, restricting the freedom of government employees, and inflicting damage on many persons, without giving the accused group an opportunity to be heard in its defense. The same circumstances that make the Attorney General’s investigation less than appropriate make it less than due process of law.
III. Freedom of speech and assembly. Read literally, the First Amendment of the Constitution forbids only Congress to abridge these freedoms. But as the due process clause of the Fourteenth Amendment extends the prohibition to all state action, the due process clause of the Fifth must extend it to all federal action.7
According to the complaint, appellant uses meetings and speakers in raising funds. Appellees’ ruling, in its context, is a public warning that sympathetic association with appellant may cause government employees to be dismissed. It therefore puts government employees, present and prospective, under economic and social pressure not to support any of appellant’s activities, verbally or otherwise, and in particular to stay away from appellant’s meetings. In other words the ruling restricts the freedom of speech and assembly of government employees. According to the complaint, the ruling has deprived appellant of speakers and meeting places as well as supporters and funds. In other words it has restricted appellant’s freedom of speech and assembly. To restrict appellant is to restrict the members who compose it.
The Supreme Court has repeatedly held that restrictions on freedom of expression are not valid in the absence of a clear and *88present danger.8 There is no evidence of such a danger in this case. In the Mitchell case the Court held that “For regulation of employees it is not necessary that the act regulated he anything more than an act reasonably deemed by Congress to interfere with the efficiency of the public service.” 9 But if appellant’s purposes are truly stated in the complaint, sympathetic association with appellant cannot reasonably be deemed to interfere with the efficiency of the public service. It follows that if, as we must now assume, the complaint is true, the restraint imposed upon government employees, and not merely that imposed upon appellant and its members, is unconstitutional.
Executive power to control public employment stands on no higher constitutional ground than legislative power to tax. The taxing power does not extend to .sales of propaganda not. made for profit; license taxes, though imposed for the legitimate purpose of raising revenue, are unconstitutional in their application to such sales.10 Such taxes, even if they are too small tó be a “substantial clog” 11 on the circulation of propaganda, are “on their face * * * a restriction of the free exercise of those freedoms which are protected by the First Amendment.” 12 The threat to reputation and livelihood that appellees’ ruling imposes is on its face a greater restriction of the free exercise of those freedoms than the small license taxes the Supreme Court held void. It is a substantial clog. It is therefore more clearly unconstitutional than the taxes.
IV. Standing to sue. Appellant, an unincorporated association,13 has standing to sue for the-claimed injury to its reputation.14
Appellant has- standing to sue for the claimed impairment of its freedom of speech and assembly.
Appellant has standing to sue for its claimed loss of contributions. Even a charity, which appellant claims to be, cannot operate without funds. In Pierce v. Society of Sisters private schools, some of them charitable, got relief because a state law requiring children to attend public schools caused the plaintiffs to lose tuition fees. “Their interest is clear and immediate, within the rule approved in Truax v. Raich * * * and many other cases where injunctions have issued to protect business enterprises against interference with the freedom of patrons or customers.” *89Pierce v. Society of Sisters, 268 U.S. 510, 536, 45 S.Ct. 571, 574, 69 L.Ed. 1070, 39 A.L.R. 468. In Truax v. Raich, 239 U.S. 33, 36 S.Ct. 7, 60 L.Ed. 131, L.R.A.1916D, 545, Ann.Cas.1917B, 283, enforcement of a state law restricting the right of employers to hire aliens but not the right of aliens to work for hire was enjoined at the suit of an alien. In Buchanan v. Warley, 245 U.S. 60, 38 S.Ct. 16, 62 L.Ed. 149, L.R.A. 1918C, 210, Ann.Cas.1918A, 1201, an ordinance forbidding Negroes to move into white neighborhoods was set aside at the suit of a white man who wished to complete a sale to a Negro. In each case an unconstitutional interference with persons other than the plaintiff was enjoined because it put pressure on them to sever, or not to create, relations of value to him. Similarly the unconstitutional pressure of appellees’ ruling upon present and prospective government servants has injured appellant by depriving it of contributions. Its relations with its contributors were terminable at will, but so were the relations involved in the Pierce and Truax cases.
Columbia Broadcasting System, Inc., v. United States, 316 U.S. 407, 62 S.Ct. 1194, 86 L.Ed. 1563, is in some respects still closer to this case. The Columbia network sued to set aside a Communications Commission regulation against renewing the licenses of broadcasting stations that had certain kinds of contracts with networks. The regulation, like the one now in suit, did not command or forbid any action, either by the plaintiff or by the plaintiff’s affiliates. The regulation was “addressed only to the Commission.” 316 U.S. at page 419, 62 S.Ct. at page 1201. But it injured Columbia by putting stations affiliated with Columbia to the sort of choice to which appellees’ ruling puts government employees affiliated with appellant; the stations could cancel their contracts or lose their licenses, as the employees can cancel their affiliations or endanger their jobs. The Supreme Court held that Columbia had standing to sue. It said, 316 U.S. at pages 417, 418, 62 S.Ct. at page 1200: “The regulations are not any the less reviewable because their promulgation did not operate of their own force to deny or cancel a license. * * * The regulations are rules which in proceedings before the Commission' require it to rej ect and authorize it to cancel licenses on the grounds specified in the regulations without more.” The regulation now in suit is a rule, which authorizes dismissal of employees on the grounds specified in the Executive Order. '
Threatened publication by government officers of damaging information about a plaintiff, even when its truth is conceded, gives him standing to test the propriety of the publication.15 There would seem to be no less standing where, as here, truth is not conceded and continuance rather than the first occurrence ‘ of the publication is threatened.16
V. Liability to suit. “Under our constitutional system, certain rights are protected against governmental action and, if such rights are infringed by the actions of officers of the Government, * * * courts have the power to grant relief against those actions.” 17 Equitable jurisdiction extends to cabinet officers.18 The *90theory that an officer who is or claims to be executing an order of the President cannot be restrained would end due process of law and subject all life, liberty, and property to the will, or alleged will, of one man.
Cabinet officers are not liable in damages for statements made in connection with official duties, for they should be under no apprehension that personal harm might result from saying what they think they should say.19 But their liability in equity causes no such apprehension. No claim for injunctive or declaratory relief, or that a regulation was invalid, was involved in the Spalding and Glass cases on which appellees rely. No claim for damages is involved in this case.
The rule of Standard Computing Scale Co. v. Farrell, 249 U.S. 571, 39 S.Ct. 380, 63 L.Ed. 780, that mere administrative advice cannot be reviewed by a court, is equally irrelevant here. Standard manufactured scales that did not agree with “specifications” published by a state Superintendent of Weights and Measures. Standard’s bill to set aside the specifications was dismissed. No law or order required any inspector, purchasing officer, or other person to treat the specifications as correct; they were, 249 U.S. at page 574, 39 S.Ct. at page 381, “at most advisory.” But Executive Order No. 9835 requires all loyalty boards to treat as correct appellees’ ruling that appellant is subversive.20 On March 9, 1948, the appellee Chairman of' the Loyalty Review Board called this fact to the attention of all executive departments and agencies.21
*91Employers Group of Motor Freight Carriers v. National War Labor Board, 79 U.S.App.D.C. 105, 143 F.2d 145, certiorari denied 323 U.S. 735, 65 S.Ct. 72, 89 L.Ed. 589, applied the rule of the Standard Computing Scale case. We declined to set aside a “directive order” that amounted only to a statement that the Board thought the Carriers should grant certain wage increases. The Board’s views were not enforceable against anybody,22 were not defamatory, and caused no loss. The ruling now in suit is defamatory; unless it is set aside, it is enforceable against appellant’s supporters who are government employees; and it has caused loss.
Appellees’ ruling is said to be a mere matter of internal management. Even in such matters the Constitution governs.23 But there was nothing internal about the publication of the ruling. It was chiefly this publication that injured the appellant and its members and restricted the freedom of government employees. The right to hire and fire is not a right to broadcast statements that appellant, and so the members who compose it, are criminals or that they are subversive.
If the assertions of fact in the complaint are true the appellees’ ruling is contrary to fact, unauthorized, and unconstitutional, and the appellant is entitled to relief against the appellees. The judgment dismissing the complaint should therefore be reversed.

. It is immaterial that, as the opinion of the court points out, the complaint “contains no express denial that the Committee falls within the designation.” If the complaint did not, as it does, contain a denial' by hecesSafy implication, that also would be immaterial. No comjdaint based on defamatory words need allege that the words are,false; it is for the defendant to allege and prove, if he can, that they are true. And regardless of the nature of the suit, things not asserted or admitted in the complaint cannot be treated as true on the present appeal even if they are not denied in the complaint.
If appellees had described appellant as “totalitarian, fascist, communist, or subversive * * and not specifically as “subversive”, the difference would be immaterial, since either description is defamatory and, on this record, contrary to fact.

. 12 Fed.Reg.1935 (1947).

. It does not even oppose any known policy of the government. There is, moreover, nothing disloyal to the government in opposition to a known government policy. Practically any given government policy is opposed by many members of Congress.

. Supra note 3, at 1938.

. Since the ruling is not authorized by the Order, and is invalid for other reasons, *87we need not consider whether in our opinion the Order is valid; or whether the Administrative Procedure Act, 5 U.S.C.A. § 1001 et seq., (1948 Supp.), required a hearing.

. This was implied in United Public Workers v. Mitchell, 330 U.S. 75, 94-95, 67 S.Ct. 556, 91 L.Ed. 754.

. The Court reaffirmed this doctrine in Terminiello v. City of Chicago, 337 U.S. 1, 69 S.Ct. 894.

. United Public Workers v. Mitchell, 330 U.S. 75, 101, 67 S.Ct. 556, 570, 91 L.Ed. 754. The Court upheld a particular restraint on the freedom of government employees to promote their political views but said, 330 U.S. at page 100, 67 S.Ct. at page 569: “Appellants urge that federal employees are protected by the Bill of Rights and that Congress may not ‘enact a regulation providing that no Republican, Jew or Negro shall be appointed to federal office, or that no federal employee shall attend Mass or take any active part in missionary work.’ None would deny such limitations on congressional power.”

. Jones v. City of Opelika, 319 U.S. 103, 63 S.Ct. 890, 87 L.Ed. 1290; Murdock v. Commonwealth of Pennsylvania, 319 U.S. 105, 63 S.Ct. 870, 87 L.Ed. 1292, 146 A.L.R. 81; Busey v. District of Columbia, 319 U.S. 579, 63 S.Ct. 1277, 87 L.Ed. 1598; Busey v. District of Columbia, 78 U.S.App.D.C. 189, 138 F.2d 592.

. Jones v. City of Opelika, 316 U.S. 584, 604, 62 S.Ct. 1231, 86 L.Ed. 1691, 141 A.L.R. 514. Tbe dissent of Chief Justice Stone and the other dissents filed. at the same time were afterwards adopted as opinions of the Court. Jones v. City of Opelika, 319 U.S. 103, 104, 63 S.Ct. 890, 87 L.Ed. 1290.

. Murdock v. Commonwealth of Pennsylvania, 319 U.S. 105, 114, 63 S.Ct. 870, 875, 87 L.Ed. 1292, 146 A.L.R. 81.

. An unincorporated association may sue in its common name. Busby et al. v. Electric Utilities Employees Union, 79 U.S.App.D.C. 336, 147 F.2d 865; Rule 17 (b), Federal Rules Civil Procedure, 28 U.S.C.A.

. Kirkman et al. v. Westchester Newspapers, 287 N.Y. 373, 39 N.E.2d 919. Cf. New York Society for the Suppression of Vice v. MacFadden Publications, 260 N.Y. 167, 183 N.E. 284, 86 A.L.R. 440.
It is too late to say that equity does not protect personal rights. Berrien v. Pollitzer, 83 U.S.App.D.C. 23, 165 F.2d 21.

. Utah Fuel Co. v. National Bituminous Coal Commission, 306 U.S. 56, 59 S.Ct. 409, 83 L.Ed. 483; Bank of America National Trust and Savings Association v. Douglas, 70 App.D.C. 221, 105 F.2d 100, 123 A.L.R. 1266.

. The question whether government employees whom the ruling threatens with dismissal have standing to sue for that reason, cf. United Public Workers v. Mitchell, supra note 9, is not before us, for no employees are suing. It does not appear that any of appellant’s members are government employees, although the complaint says appellant’s “contributors” include “civil servants”.

. Larson v. Domestic & Foreign Commerce Corp., 1949, 69 S.Ct. 1457, 1468. Bell v. Hood, 327 U.S. 678, 684, 66 S.Ct. 773, 90 L.Ed. 939; Land v. Dollar, 330 U.S. 731, 67 S.Ct. 1009, 91 L.Ed. 1209; United States v. Lee, 106 U.S. 196, 1 S.Ct. 240, 27 L.Ed. 171.

. Eg., Philadelphia Company v. Stimson, 223 U.S. 605, 32 S.Ct. 340, 56 L.Ed. 570; Ickes v. Fox, 300 U.S. 82, 96-97, 57 S.Ct. 412, 81 L.Ed. 525; Red Canyon Sheep Co. v. Ickes, 69 App.D.C. 27, 98 F.2d 308.

. “The head of a Department * * * cannot be hold liable to a civil suit for damages on account of official communications made by him pursuant to an act of Congress, and in respect of matters within his authority * * *. In exercising the functions of his office, the head of an Executive Department, keeping within the limits of his authority, should not be under an apprehension that the motives that control his official conduct may at any - time become the subject of inquiry in a civil suit for damages * * Spalding v. Vilas, 161 U.S. 483, 498, 16 S.Ct 631, 637, 40 L.Ed. 780. Glass v. Ickes, 73 App.D.C. 3, 117 F.2d 273, 132 A.L.R. 1328, certiorari denied 311 U.S. 718, 61 S.Ct. 441, 85 L.Ed. 468, followed Spalding v. Vilas.

. Cf. Shields v. Utah Idaho Central R. Co., 305 U.S. 177, 182-184, 59 S.Ct. 160, 83 L.Ed. 111.
Additional differences between the Standard Computing Scale case and the present one are (1) it was not even alleged there, and is admitted here, that the defendants acted without giving the plaintiff notice or hearing; (2) the complaint there was not dismissed until evidence had been taken, and this included proof that the specifications were “the result of prolonged investigation and extensive experimentation”; (3) the specifications did not name the plaintiff but were “generic”; (4) no question of freedom of speech or assembly was involved.
Although the evidence, if any, of unreasonable or arbitrary action was obviously weak in the Standard Computing Scale case the Court said: “If the ‘specifications’ had been issued as a regulation, that is, a law, we might have been called upon to enquire whether it was a proper exercise of the police power, or was, as plaintiff contends, void, because arbitrary and unreasonable.” Standard Computing Scale Co. v. Farrell, 249 U.S. 571, 577, 39 S.Ct. 380, 382, 63 L.Ed. 780.

. Two paragraphs of his Memorandum No. 2, which is addressed “To All Executive Departments and Agencies”, follow:
“Since the loyalty program is being conducted under the authority of the executive order, and since the President under such order has constituted the Attorney General the agency for the creation and submission of a list of groups or organizations of the nature defined in Part V, subdivision f, of the executive order, the determination as to the nature of such organizations thus made by the Attorney General under the authority and direction of the President, must be accepted by all Boards for the purpose of all hearings and determinations under the loyalty program.
“Boards, therefore, should not enter upon any evidential investigation of the nature of any of the organizations identified- in the Attorney General’s list, for the purpose of attacking, contradicting, or modifying the controlling conclusion reached by the Attorney General in such list. Any and all questions proposed with respect to the merits or appropriateness of the inclusion of a particular organization in such list would, therefore, be for the Attorney General to decide, and not for the Board, and the *91Board should permit no evidence or argument before it on the point.”

. The Carriers suggested that the Board might notify the President of the plaintiffs’ noncompliance with the Board’s views and the President might take possession of the plaintiffs’ property. But nothing the Board could say to the President could determine whether the Carriers should grant the proposed wage increases, or whether their property should be seized, or any other question. The President had full authority under his war powers to take possession of the plaintiffs’ property or not to do so, whether or not he agreed with the Board’s views, whether or not the Carriers complied with the Board's views, and whether or not the Board reported t* the President. Any action the Board might take would therefore be merely advisory.

. Cf. United Public Workers v. Mitchell, supra note 9.