Joint Anti-Fascist Refugee Committee v. McGrath/Opinion of the Court

In each of these cases the same issue is raised by the dismissal of a complaint for its failure to state a claim upon which relief can be granted. That issue is whether, in the face of the facts alleged in the complaint and therefore admitted by the motion to dismiss, the Attorney General of the United States has authority to include the complaining organization in a list of organizations designated by him as Communist and furnished by him to the Loyalty Review Board of the United States Civil Service Commission. He claims to derive authority to do this from the following provisions in Part III, § 3, of Executive Order No. 9835, issued by the President, March 21, 1947, 5 U.S.C.A. § 631 note:

'Part III-Responsibilities of Civil Service Commission

'3. 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, or as having adopted a policy of advocating or approving the commission of acts of force or violence to deny others 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.

'a. The Loyalty Review Board shall disseminate such information to all departments and agencies.' 3 CFR, 1947 Supp., pp. 129, 131, 12 Fed.Reg. 1935, 1938.

The respective complaints describe the complaining organizations as engaged in charitable or civic activities or in the business of fraternal insurance. Each implies an attitude of cooperation and helpfulness, rather than one of hostility or disloyalty, on the part of the organization toward the United States. Two of the complaints deny expressly that the organization is within any classification specified in Part III, § 3, of the order.

For the reasons hereinafter stated, we conclude that, if the allegations of the complaints are taken as true (as they must be on the motions to dismiss), the Executive Order does not authorize the Attorney General to furnish the Loyalty Review Board with a list containing such a designation as he gave to each of these organizations without other justification. Under such circumstances his own admissions render his designations patently arbitrary because they are contrary to the alleged and uncontroverted facts constituting the entire record before us. The complaining organizations have not been afforded any opportunity to substantiate their allegations, but at this stage of the proceedings the Attorney General has chosen not to deny their allegations and has not otherwise placed them in issue.

Whatever may be his authority to designate these organizations as Communist upon undisclosed facts in his possession, he has not chosen to limit himself to that authorization. By his present procedure he has claimed authority so to designate them upon the very facts alleged by them in their own complaints. Self-serving or not, those allegations do not state facts from which alone a reasonable determination can be derived that the organizations are Communist. To defend such a designation of them, on the basis of the complaints alone, is an assertion of Presidential authority so to designate an organization at the option of the Attorney General without reliance upon either disclosed or undisclosed facts supplying a reasonable basis for the determination. It is that, and only that outer limit of the authority of the Attorney General that is now before us.

At least since 1939, increasing concern has been expressed, in and out of Congress, as to the possible presence in the employ of the Government of persons disloyal to it. This is reflected in the legislation, reports and executive orders culminating in Executive Order No. 9835. That order announced the President's Employees Loyalty Program in the Executive Branch of the Government. It states that both 'maximum protection must be afforded the United States against infiltration of disloyal persons into the ranks of its employees, and equal protection from unfounded accusations of disloyalty must be afforded the loyal employees of the Government: * *  * .' It provides for the Loyalty Review Board and sets up a standard for refusals of and removals from employment on grounds relating to loyalty. It outlines the use to be made in that connection of the list of organizations to be furnished by the Attorney General. The organizations to be designated on that list are not limited to those having federal employees in their memberships. They may even exclude such employees from membership. Accordingly, the impact of the Attorney General's list is by no means limited to persons who are subject to the Employees Loyalty Program.

The Attorney General included each of the complaining organizations in the list he furnished to the Loyalty Review Board November 24, 1947. That list was disseminated by the Board to all departments and agencies of the United States December 4, 1947. 13 Fed.Reg. 1473. The complaints allege that such action resulted in nationwide publicity and caused the injuries to the complaining organizations which are detailed later. September 17, 1948, during the pendency of the instant cases but before action upon the appeals in any of them, 'the Attorney General furnished the Loyalty Review Board with a consolidated list containing the names of all of the organizations previously designated by him as within Executive Order 9835, segregated according to the classifications enumerated in section 3, Part III, on the basis of dominant characteristics.' He enumerated six classifications and classified the three complaining organizations as 'Communist.'

The instant cases originated in the District Court for the District of Columbia and come here after affirmance by the Court of Appeals. We granted certiorari because of the importance of the issues and their relation to the Employees Loyalty Program. No. 8, 339 U.S. 910, 70 S.Ct. 573; No. 7, 339 U.S. 956, 70 S.Ct. 978; No. 71, 340 U.S. 805, 71 S.Ct. 39.

The complainant is the Joint Anti-Fascist Refugee Committee, an unincorporated association in the City and State of New York. It is the petitioner here. The defendants in the original action were the Attorney General, Tom C. Clark, and the members of the Loyalty Review Board. J. Howard McGrath has been substituted as the Attorney General and he and the members of that Board are the respondents here.

The following statement, based on the allegations of the complaint, summarizes the situation before us: The complainant is 'a charitable organization engaged in relief work' which carried on its relief activities from 1942 to 1946 under a license from the President's War Relief Control Board. Thereafter, it voluntarily submitted its program, budgets and audits for inspection by the Advisory Committee on Voluntary Foreign Aid of the United States Government. Since its inception, it has, through voluntary contributions, raised and disbursed funds for the benefit of anti-Fascist refugees who assisted the Government of Spain against its overthrow by force and violence. The organization's aims and purposes 'are to raise, administer and distribute funds for the relief and rehabilitation of Spanish Republicans in exile and other anti-fascist refugees who fought in the war against Franco.'

It has disbursed $1,011,448 in cash, and $217,903 in kind, for the relief of anti-Fascist refugees and their families. This relief has included money, food, shelter, educational facilities, medical treatment and supplies, and clothing to recipients in 11 countries including the United States. The acts of the Attorney General and the Loyalty Review Board, purporting to be taken by them under authority of the Executive Order, have seriously and irreparably impaired, and will continue to so impair, the reputation of the organization and the moral support and good will of the American people necessary for the continuance of its charitable activities. Upon information and belief, these acts have caused many contributors, especially present and prospective civil servants, to reduce or discontinue their contributions to the organization; members and participants in its activities have been 'vilified and subjected to public shame, disgrace, ridicule and obloquy * *  * ' thereby inflicting upon it economic injury and discouraging participation in its activities; it has been hampered in securing meeting places; and many people have refused to take part in its fund-raising activities.

This complaint does not contain an express denial that the complaining organization is within the classifications named in Part III, § 3, of Executive Order No. 9835. It does, however, state that the actions of the Attorney General and the Loyalty Review Board which are complained of are unauthorized and without warrant in law and amount to a deprivation of the complainant's rights in violation of the Constitution; that Executive Order No. 9835, on its face and as construed and applied, violates the First, Fifth, Ninth and Tenth Amendments to the Constitution of the United States and that § 9A of the Hatch Act, 53 Stat. 1148, 5 U.S.C. (1946 ed., Supp. III) § 118j, insofar as it purports to authorize the instant application of the order, is void. It asks for declaratory and injunctive relief, alleging that the complaining organization is suffering irreparable loss and that no adequate remedy is available to it except through the equity powers of the District Court. That court granted a motion to dismiss the complaint for its failure to state a claim upon which relief could be granted and denied the complainant's motion for a preliminary injunction. The Court of Appeals affirmed, one judge dissenting. Joint Anti-Fascist Refugee Committee v. Clark, 85 U.S.App.D.C. 255, 177 F.2d 79.

In this case the court below relied upon its decision in the Refugee Committee case and reached the same result, per curiam (unreported). Except as indicated below in our summary of the facts alleged, this case, for our purposes, is like the first. The complainants, who are the petitioners here, are the National Council of American-Soviet Friendship, Inc., a New York nonprofit membership corporation, organized in 1943; the Denver Council of American-Soviet Friendship, a Colorado unincorporated association and local affiliate of the National Council; and six individual officers and directors of one or the other of these organizations. The purpose of the National Council 'is to strengthen friendly relations between the United States and the Union of Soviet Socialist Republics by disseminating to the American people educational material regarding the Soviet Union, by developing cultural relations between the peoples of the two nations, and by combatting anti-Soviet propaganda designed to disrupt friendly relations between the peoples of these nations and to divide the United Nations.' The complaint alleges that all of the complainants are seriously and irreparably injured in their capacity to conduct the National Council's educational, cultural and fund-raising program, and that the individual complainants have suffered personal losses such as the removal of one from an assistant rectorship of a church, the loss by another of a teaching position, and numerous cancellations of lecturing and professional engagements. The complaint expressly states that-'In all its activities the National Council has sought to further the best interests of the American people by lawful, peaceful and constitutional means. It has never in any way engaged in any conduct or activity which provides any basis for it to be designated 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 others 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." No. 71.-The International Workers Case

The complaining organization, which is the petitioner here, is a fraternal benefit society, organized in 1930 as a corporation under the Insurance Law of the State of New York, McK.Consol.Laws, c. 28, operating for the mutual benefit of its members and their beneficiaries and not for profit. It is licensed and operates in the District of Columbia and several states; its purposes are comparable to those of fraternal benefit societies in general; it operates under a lodge system and has a representative form of government; at the time of the promulgation of the Department of Justice list it had 185,000 members, including employees of the Federal Government and of various states and municipalities; it provided life insurance protection for its membership exceeding $120,000,000; its activities have been the subject of administrative and judicial proceedings in addition to those before the insurance departments of the states in which it functions, and, as a result of such proceedings, 'the purposes, and activities of the order have been held to be free from any illegal or improper taint * *  * .' Among the allegations of damage, made upon information and belief, the complaint states that, solely as a result of the respondents' acts, there have been instituted against the order and its members a multiplicity of administrative proceedings, including those to rescind licenses, franchises, or tax exemptions, or to impede the naturalization of its members. Because of respondents' acts, many such members, especially present and prospective civil servants, have resigned or withdrawn from membership in the order, and many potential members have declined to join it.

The second amended complaint was dismissed by the District Court, 88 F.Supp. 873. That judgment was affirmed by the Court of Appeals, one judge dissenting. 86 U.S.App.D.C. 287, 182 F.2d 368.

If, upon the allegations in any of these complaints, it had appeared that the acts of the respondents, from which relief was sought, were authorized by the President under his Executive Order No. 9835, the case would have bristled with constitutional issues. On that basis the complaint would have raised questions as to the justiciability and merit of claims based upon the First, Fifth, Ninth and Tenth Amendments to the Constitution. It is our obligation, however, not to reach those issues unless the allegations before us squarely present them. See United States v. Lovett, 328 U.S. 303, 320, 66 S.Ct. 1073, 1081, 90 L.Ed. 1252. Cf. United Public Workers of America (C.I.O.) v. Mitchell, 330 U.S. 75, 67 S.Ct. 556, 91 L.Ed. 754; Myers v. United States, 272 U.S. 52, 47 S.Ct. 21, 71 L.Ed. 160.

The Executive Order contains no express or implied attempt to confer power on anyone to act arbitrarily or capriciously-even assuming a constitutional power to do so. The order includes in the purposes of the President's program not only the protection of the United States against disloyal employees but the 'equal protection' of loyal employees against unfounded accusations of disloyalty. 3 CFR, 1947 Supp., p. 129, 12 Fed.Reg. 1935. The standards stated for refusal of and removal from employment require that 'on all the evidence, reasonable grounds (shall) exist for belief that the person involved is disloyal * *  * .' Id., at 132, 12 Fed.Reg. 1938. Obviously it would be contrary to the purpose of that order to place on a list to be disseminated under the Loyalty Program any designation of an organization that was patently arbitrary and contrary to the uncontroverted material facts. The order contains the express requirement that each designation of an organization by the Attorney General on such a list shall be made only after an 'appropriate * *  * determination' as prescribed in Part III, § 3. An 'appropriate' governmental 'determination' must be the result of a process of reasoning. It cannot be an arbitrary fiat contrary to the known facts. This is inherent in the meaning of 'determination.' It is implicit in a government of laws and not of men. Where an act of an official plainly falls outside of the scope of his authority, he does not make that act legal by doing it and then invoking the doctrine of administrative construction to cover it.

It remains, therefore, for us to decide whether, on the face of these complaints, the Attorney General is acting within his authority in furnishing the Loyalty Review Board with a designation of the complaining organizations either as 'Communist' or as within any other classification of Part III, § 3, of the order. In the National Council and International Workers cases, the complaining organization is alleged not only to be a civic or insurance organization, apparently above reproach from the point of view of loyalty to the United States, but it is also declared to be one that is not within any classification listed in Part III, § 3, of the order. In the Refugee Committee case, the negative allegations are omitted but the affirmative allegations are incompatible with the inclusion of the complaining organization within any of the designated classifications. The inclusion of any of the complaining organizations in the designated list solely on the facts alleged in the respective complaints, which must be the basis for our decision here, is therefore an arbitrary and unauthorized act. In the two cases where the complaint specifically alleges the factual absence of any basis for the designation, and the respondents' motion admits that allegation, the designation is necessarily contrary to the record. The situation is comparable to one which would be created if the Attorney General, under like circumstances, were to designate the American National Red Cross as a Communist organization. Accepting as common knowledge the charitable and loyal status of that organization, there is no doubt that, in the absence of any contrary claim asserted against it, the Executive Order does not authorize its inclusion by the Attorney General as a 'Communist' organization or as coming within any of the other classifications named in Part III, § 3, of the order.

Since we find that the conduct ascribed to the Attorney General by the complaints is patently arbitrary, the deference ordinarily due administrative construction of an administrative order is not sufficient to bring his alleged conduct within the authority conferred by Executive Order No. 9835. The doctrine of administrative construction never has been carried so far as to permit administrative discretion to run riot. If applied to this case and compounded with the assumption that the President's Executive Order was drafted for him by his Attorney General, the conclusion would rest upon the premise that the Attorney General has attempted to delegate to himself the power to act arbitrarily. We cannot impute such an attempt to the Nation's highest law enforcement officer any more than we can to its President.

In thus emphasizing an outer limit to what can be considered an authorized designation of an organization under the order, the instant cases serve a valuable purpose. They demonstrate that the order does not authorize, much less direct, the exercise of any such absolute power as would permit the inclusion in the Attorney General's list of a designation that is patently arbitrary or contrary to fact.

When the acts of the Attorney General and of the members of the Loyalty Review Board are stripped of the Presidential authorization claimed for them by the respondents, they stand, on the face of these complaints, as unauthorized publications of admittedly unfounded designations of the complaining organizations as 'Communist.' Their effect is to cripple the functioning and damage the reputation of those organizations in their respective communities and in the nation. The complaints, on that basis, sufficiently charge that such acts violate each complaining organization's common-law right to be free from defamation. 'A communication is defamatory if it tends so to harm the reputation of another as to lower him in the estimation of the community or to deter third persons from associating or dealing with him.' Restatement, Torts, § 559.

These complaints do not raise the question of the personal liability of public officials for money damages caused by their ultra vires acts. See Spalding v. Vilas, 161 U.S. 483, 16 S.Ct. 631, 40 L.Ed. 780. They ask only for declaratory and injunctive relief striking the names of the designated organizations from the Attorney General's published list and, as far as practicable, correcting the public records.

The respondents are not immune from such a proceeding. Only recently, this Court recognized that 'the action of an officer of the sovereign (be it holding, taking or otherwise legally affecting the plaintiff's property) can be regarded as so 'illegal' as to permit a suit for specific relief against the officer as an individual * *  * if it is not within the officer's statutory powers or, if within those powers *  *  * if the powers, or their exercise in the particular case, are constitutionally void.' Larson v. Domestic and Foreign Commerce Corp., 337 U.S. 682, 701-702, 69 S.Ct. 1457, 1467, 93 L.Ed. 1628. The same is true here, where the acts complained of are beyond the officer's authority under the Executive Order.

Finally, the standing of the petitioners to bring these suits is clear. The touchstone to justiciability is injury to a legally protected right and the right of a bona fide charitable organization to carry on its work, free from defamatory statements of the kind discussed, is such a right.

It is unrealistic to contend that because the respondents gave no orders directly to the petitioners to change their course of conduct, relief cannot be granted against what the respondents actually did. We long have granted relief to parties whose legal rights have been violated by unlawful public action, although such action made no direct demands upon them. Columbia Broadcasting System v. United States, 316 U.S. 407, 62 S.Ct. 1194, 86 L.Ed. 1563; Pierce v. Society of the Sisters of the Holy Names of Jesus and Mary, 268 U.S. 510, 45 S.Ct. 571, 69 L.Ed. 1070; Buchanan v. Warley, 245 U.S. 60, 38 S.Ct. 16, 62 L.Ed. 149; Truax v. Raich, 239 U.S. 33, 36 S.Ct. 7, 60 L.Ed. 131. The complaints here amply allege past and impending serious damages caused by the actions of which the petitioners complain.

Nothing we have said purports to adjudicate the truth of petitioners' allegations that they are not in fact communistic. We have assumed that the designations made by the Attorney General are arbitrary because we are compelled to make that assumption by his motions to dismiss the complaints. Whether the complaining organizations are in fact communistic or whether the Attorney General possesses information from which he could reasonably find them to be so must await determination by the District Court upon remand.

For these reasons, we find it necessary to reverse the judgments of the Court of Appeals in the respective cases and to remand each case to the District Court with instructions' to deny the respondents' motion that the complaint be dismissed for failure to state a claim upon which relief can be granted.

Reversed and remanded.

Mr. Justice CLARK took no part in the consideration or decision of any of these cases.