Whether Executive Order 9835 authorized the Attorney General, on the facts admitted by the motions to dismiss, to designate the petitioning organizations as Communist or otherwise subversive.
Holding
No. Accepting the complaints’ allegations as true, the designations were patently arbitrary and outside the authority conferred by the Executive Order.
Reasoning
A motion to dismiss admits the complaint’s well-pleaded factual allegations. The Court therefore had to assume, at this procedural stage, that the organizations were engaged in the lawful charitable, civic, educational, and insurance activities described in their complaints and, in two cases, were not within any category specified by the Order.
The Order required an “appropriate investigation and determination.” A governmental determination necessarily requires a reasoned judgment grounded in facts; it cannot be an arbitrary fiat that contradicts uncontroverted material facts. The Order’s loyalty-protection purpose also included protection of loyal persons from unfounded accusations.
The Attorney General might possess undisclosed information that could eventually justify a designation. But he chose to seek dismissal without denying the complaints’ allegations or otherwise placing them in issue. On that record alone, the Court could not treat the labels as reasonably supported; doing so would effectively give the Attorney General unchecked power to brand an organization Communist at will.
Administrative interpretations normally receive deference, but deference does not permit administrative discretion to “run riot.” The Court used the example of designating the American Red Cross Communist: where a designation is plainly incompatible with the undisputed record, the Executive Order does not authorize it.