Morgan v. United States (I), 304 U.S. 1 (1938)
This case says: an agency cannot fix your rates or decide your fate by relying on material you never saw. A “full hearing” means notice, access to the key material, and a real chance to respond. The Secretary used internal prosecutors’ findings and private talks, then adopted them. The Court set the order aside for lack of basic fairness.
- Did the Secretary of Agriculture provide the “full hearing” required by the statute before issuing the order?
- Was the order arbitrary or unsupported by substantial evidence?
Fundamental Fairness
No decision that hits property or livelihood without a fair chance to participate and answer the case against you.
Full Hearing Rule
Hearings must be meaningful. No secret findings. Parties must see and contest the material the decision-maker uses.
Quasi-Judicial Procedure
When the stakes resemble a court case, basic judicial fairness applies—no ex parte shortcuts.
Inquiry launched: The Secretary examined the reasonableness of market agency rates. Both sides presented extensive evidence.
Mar 1931 — Oral arguments: Appellants argued their case.
May 18, 1932 — First order: Secretary fixed maximum rates; later vacated due to economic changes and called for rehearing.
Rehearing held: More evidence came in, but appellants never saw the internal findings before the final order.
Final order: Issued using department-prepared findings; appellants had no chance to contest them.
Suits filed: Fifty suits challenged the order under the Packers and Stockyards Act, claiming no fair hearing and lack of substantial evidence.
Appellants (Market Agencies)
- No “full hearing”: they could not see or challenge the internal findings.
- Ex parte input tainted the process; the outcome adopted prosecutors’ work unchecked.
- Order hit their businesses and could cause deficits—needs strict procedural fairness.
Respondent (United States)
- Hearings were held; evidence was collected on both sides.
- Agency may rely on staff assistance to synthesize complex records.
- Rate control protects the public; technical communication should not void the order.
The Court set aside the order. The agency did not provide a “full hearing” because it relied on internal, prosecutor-prepared findings and private discussions without giving the affected parties a fair chance to know, test, or answer them.
When an administrative process can decide core business survival, it is quasi-judicial. Such proceedings demand open procedures: notice of the real case, access to the relied-upon material, and an opportunity to contest it. Secret inputs break the “full hearing” promise.
- Anchors the “he who decides must hear” idea in agency law.
- Limits ex parte influence when outcomes shape livelihoods.
- Strengthens the right to see and answer the evidence that will be used.
No hidden evidence; parties must see core findings.
A chance to contest is part of the hearing itself.
Decision-makers must avoid one-sided inputs.
Mnemonic: “MORGAN = MORE-GAIN with FAIR HEARING.”
- See it: Parties must see what will be relied upon.
- Say it: Parties must get to answer it.
- Square it: Decision-maker must weigh both sides openly.
Issue: Was there a “full hearing,” and was the order supported by substantial evidence?
Rule: Fundamental fairness + full hearing in quasi-judicial agency actions; no reliance on undisclosed findings or ex parte inputs.
Application: Hearings occurred, but key findings came from internal prosecutors and were not shared for contest; thus fairness failed.
Conclusion: Order invalidated; process must meet full-hearing standards.
- Full Hearing
- A real chance to know, test, and answer the material used to decide your case.
- Ex Parte
- One-sided communication with the decision-maker without the other party’s knowledge.
- Quasi-Judicial
- Administrative process with court-like stakes and duties of fairness.
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