Bar Exam Preparation – Administrative Law

1. Agencies Are all responsible for their own substantive law. Therefore, Admin law is mainly about certain procedural principles that apply generally to all agencies.
2. In a sense, admin law is therefore PROCEDURAL law.

1. The statute creating an agency is called the agency's "enabling statute" and usually set out its substantive law and specific organizational and procedural law for the agency.

1. Many people have challenged agencies as an unconstitutional delegation of legislative power. Generally, these days, such delegations are upheld even with very broad instructions, like "fair and reasonable".

1. Persons can still challenge administrative action if they think it is exceeding the scope of the power delegated to it. This is generally an issue of statutory interpretation.

1. Public rights = cases involving the government. Private rights = cases between individuals.
2. Administrative agencies can adjudicate a dispute between two private parties in which the government is not a party if the private rights dispute is closely integrated into a public regulatory scheme.
3. Prosecution and imprisonment for criminal violations must be left to the courts, although an agency may be authorized to enact regulations the violation of which is a crime.

Application of the enabling statute may be challenged under substantive due process. the standard here is REASONABLENESS in the application of the statute.

The APA empowers a court to set aside agency action found to be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law" or unsupported by substantial evidence in the recoord, among other things. The APA is used by courts to justify more stringent review of the substance of agency action than the Due Process Clause alone would permit.

1. Most information obtained by agencies is voluntary. However, an agency may also obtain information through: subpoena power, required reports, physical inspections, or hearings.

1. 1. Test for whether agency can obtain subpoena information: "if the inquiry is within the authority of the agency, the demand is not to indefinite, and the information sought is reasonably relevant."

1. Jx over the person is NOT required, as long as the agency is investigating a MATTER over which it has power.
2. Agency is obligated to state its purpose so that the court can determine whether the agency is engaged in a lawful inquiry. However, that doesn't mean a formal investigation has had to have commenced.
2. A person can challenge a subpoena as an attempt to harass or intimidate, but this is a very difficult burden of proof to meet.

1. Best challenge to a subpoena is that it is not specific. It won;t be enforced if it is excessively vague.
2. Occasionally, may challenge on jx grounds, but usually lose here.

1. witnesses' ability to plead the 5th is okay. However, this privilege is NOT available toa corporation or union. THe custodian of records for a corporation or union likewise may not refuse to produce the documents. Immunity statutes are often applicable in such cases.

1. The mere fact that requested documents might incriminate the person producing them does NOT give the target of the request a privilege not to produce. Rather, the ACT OF PRODUCING the documents must incriminate the target either by (1) authenticating the documents OR (2) showing their existence OR (3) showing possession. See example on page 8 of big Kentucky outline.
2. This also goes for record keeping requirements that agencies impose on the entities within their field. Ie, you cannot claim fifth amendment privilege against self incrimination and refuse to turn over records that agency requires of you.

1. Agencies are subject to fourth amendment strictures.
2. Houses - A warrant can be issues for a housing inspector on a showing that it is likely that violations exist based on the surrounding neighborhood, instead of that there is probable cause to believe that a specific violation exists in the house or dwelling to be inspected. So lower threshold of proof to get a warrant in admin agency than normal circumstances.
3. An agency can terminate benefits if you refuse to let them in your house.
4. Inspection of Business Premises
A. Public Business premise - officials may enter public business premises and act on their observations.
B. Nonpublic Business Premises - Nonpublic business premises normally cannot be inspected without a warrant.
C. Specific statutory language allowing inspection without a warrant for heavily regulated businesses is okay, such as liquor license or gun dealers.

Unlawfully seized information or evidence is generally admissible in administrative proceedings. The test is to weigh the likely social benefits of excluding unlawfully seized evidence against the likely costs of not using the evidence.

1. The extent to which PROCEDURAL DUE PROCESS must be afforded in investigatory hearings is ambiguous. It appears in TRULY investigative procedures, not required, but ones that are accusatory in nature do require.
2. Counsel MUST be allowed, although the role of counsel can be determined by the administration.

1. The FOIA provides a comprehensive statement of the rights of priate parties to obtain information in possession of the government. Useful discovery tool. No reason need be given for why they're requesting the documents.

All agencies must publish in the federal register th names of individuals from whom and the method by which information may be obtained, organization charts showing how the agency works, their rules of procedure, and their rules of general applicability.
They must make available for public inspection and copying final opinions, statements of general policy, and staff manuals and instructions that affect the public.

1. Each agency must, upon a request that "reasonably" describes any identifiable records, make those records PROMPTLY available to ANY PERSON. Agency has burden to show district court why production is exempted. If they lose, may be liable for attorneys fees and litigation costs.
ALL agencies are covered. See page 11-12 for potential exemptions to production of documents.
2. If a record contains part exempt info and part not, agency is required to disclose any reasonable segregable portion after deletion the exempt parts.

1. Act requires that all meetings involving two or more members be open to the public, with exceptions akin to FOIA exceptions on 11-12.

See page 13 for general definitions.

1. Statutory Authority - Legislature provide rulemaking power to agencies by statute, either by expressly authorizing rules on specific topis or by a general provision that the agency may make rules necessary to carry out the purposes of the statute.
2. In KY: administrative body may promulgate administrative regulations only when specific authorized by statute. must be CLEAR.
3. Inherent authority: Agencies may also have inherent power to promulgate rules and regulations. Thus, the Supreme Court held that "the power of an administrative agency to administer a congressionally created and funded program necessarily requires the formulation of policy and the making of rules to fill any gap left, implicitly or explicitly, by congress."

1. Legislative Rules: product of exercise of legislative power by agency. Thus, have the effect of a statute.
2. Interpretive Rules: interpretations of the MEANING of a statute or a legislative rule before that question is authoritatively settled by the courts. They reflect the judgment and experience of the agency and may be used as the basis for subsequent decisionmaking by the agency.
3. General statements of policy: indicates how an agency intends to exercise its discretion.
4. Procedural rules: govern the organization and procedure of an agency (its INTERNAL AFFAIRS) and set forth the procedure available to the public when deadling with the agency. IF a rule would significantly alter rights or duties, it is NOT procedural.
5c. Internal Directives and policies may be sufficient to establish procedures for agency action where an administrative agency lacks the statutory authority to promulgate administratie regulations. Byt internal directives and policies cannot modify, expand, or limit a statute, administrative regulation, or constitutional riht.

5. In kentucky, admin agencies promulgate admin regulations. Admin regulations are statements of general applicability that implement, interpret, or prescribe law or policy, or describe the organization, procedure or practice requirements of any administrative body. Admin regulatons also include actions affecting private rights or procedures available to the public (lethal injection protocol).
5b. Kentucky admin regulations have the force and effect of law when they have been duly promulgated and are consistent with the enabling legislation. Admin regulations cannot be applied retroactively, and an agency's interpretation of a regulation must comply with the actual language of the regulation.

Admin can create policy by rulemaking or adjudication (case by case basis). ALthough it generally has discretion to decide, its decision to adjudicate instead of make rule might constitute an abuse of discretion in certain situations.
Such abuse is decided by balancing the harm of retroactivity against the problems of permitting a bad result because no rule had been adopted to cover the particular case. At the same, the court noted that rulemaking was generally preferable whenever possible, because it avoids the retroactive effects of a change in policy achieved through adjudication.

1. Detrimental Reliance - it has been held that an agency must proceed by rulemaking when it seeks to change the law and establish new rules of widespread application. see the factors on page 16.
2. Disproportionate Hardship: an agency may be required to proceed by rulemaking rather than adjudication if proceeding by adjudication would produce disproportionate hardship.
3. Prospective Adjudication: an adjudicative decision that purports to be purely prospective may be held to be invalid. Being purely prospective, the policy should be adopted as a rule.

First, note that there is no constitutional right to be present at a rule making proceeding, but statutes largely provide for such a right. Statutory requirements:
A. Notice: Notice of proposed rulemaking must be published in the federal register that includes time, place and nature of proceedings, reference to legal authority under which the rule is proposed, and the TERMS of the proposed rule or description of the subjects and issues involved.
B. Right to participate: interested parties have a right to participate in rulemaking process by submitting written data or arguments, with or without an opportunity for oral presentationl BUT, there is NO right to an oral or evidentiary hearing.
C. Promulgation of rule: The rules as finally promulgated by an agency must include a CONCISE general statement of their basis and purpose. This serves as a statement of reasons and also helps to facilitate judicial review. Notice must be given not less than 30 days before its effective date. An agency must give any interested person the RIGHT to petition for the issuance, amendment, or repeal of the rule.

The following exceptions are not subject to these requirements:
1. Military or foreign functions;
2. Internal rules: matters relating to agency management or personnel;
3. matters relating to public property, loans, grants, benefits, or contracts; AND
4. interpretive rules; general statements of policy; or rules of agency organization, procedure, or practice.
X. The agency is also excused from notice, hearing, and publication if it finds for "good cause" that such procedures are impracticable, unnecessary, or contrary to the public interest.

1. Because o the exception mentioned above, questions may arise whether a particular rule is legislative or interpretive.
A. interpretive rules: clarify or explain a statute or legislative rule. Interpretive rules do not create new rights or obligations, as do legislative rules.
B. General Statement of Policy: It has been said that a true general statement of policy does not establish a binding norm, but rather simply announces the agency's tentative intentions for the future. Two criteria are applied: the policy statement must genuinely leave the agency free to exercise discretion.

1. Unless required by statute, the agency is not limited in its rulemaking to evidence produced at the hearing or in written presentations, although it must give "consideration to such evidence".

Some cases, a specific statute will require that a rule be made "on the record after opportunity for an agency hearing." In these situations, the APA provisions for adjudicating trial type hearings apply. SCOTUS held that the statute must specifically call for a hearing ON THE RECORD for "formal" rulemaking to apply. Otherwise, the rulemaking is INFORMAL.
But, extra statutory requirements/adjustments may be imposed on an agency by agency, case by case basis.

Kentucky Administrative Regulations are published in The Administrative Register. Information relating to public hearings, the method by which the public can comment, and the duration of the comment period must accompany the administrative regulations. WRitten comments must be accepted by the administrative body until the end of the month in which the administrative regulation is filed with the regulations complier. A public hearing is held of the administrative body receives written notice from interested persons of their intend to attend the hearing. Every hearing must be conducted in a way that guarantees each person who wishes to offer comment a fair and reasonable opportunity to do so.

1. Whether a party has a right to an evidentiary or trial-type hearing a frequent administrative law issue. The problem arises when an agency attempts to make an ex parte determination or when the scope of a hearing is unduly restricted by the agency.
2. There are four sources from which the right to a hearing may come from: due process, express or implied statutory directives, agency rules, and contractual agreements.
3. The question usually starts with whether the agency action involves rulemaking or adjudication.

1. Rulemaking generally involves proceedings for the purpose of promulgating policy-type rules or standards with future effect, where adjudication ivoles proceedings designed to adjudicate disputed facts in particular cases.
2. Classic doctrine is that there is no constitutional right to a trial type hearing in rulemaking.
3. Party has constitutional right to some sort of hearing when:
A. material adjudicative facts are in dispute;
B. a protected "liberty" or "rpoperty" interest is involved, and
C. no emergency or other special exception exists.

1. Adjudicative facts concern individual parties and their activities and answer the questions of who did what, where, how, and with what intent. Legislative facts are those facts normally relied on by a legislative body informulating law or policy and, as such, relate to no particular individual, enterprise, or occurrence.

1. Liberty interests are divided into two categories: fundamental and state created. Fundamental rights are those directly protected by the constitution. Injuries to reputation generally do not qualify as a loss of a fundamental liberty interest, but WILL qualify if it meets the "stigma plus" test. Ie, P is stigmatized by gov. action AND suffer some additional, unexpected loss. Ie, placed on achild abuse registry list that is distrputed to P's employers.
2. State created liberty interests are those that result from mandatory provisions in state regulations. Ie, good time credits toward early release from prison; hearing must be held before credits can be taken away. BUT also note prisoners usually are not found to have liberty interests.

Property protected by due process includes ANY INTERST that a person has acquired in specific benefits. There must be a LEGITIMATE CLAIM OF ENTITLEMENT to the benefit. Ie, public assistance to all eligible persons, tenure for teachers. Teachers without tenure on the other hand don't have such an expectation.
NOTE: see page 23 for a list of things that have been held to constitute lib/prop interest.

1. Once you determine that an interest is present that warrants due process, must decide what kind of due process is necessary. Generally some type of hearing must be given, ie, "an opportunity to be heard at a meaningful time and in a meaningful manner." But note, in some situtations, given the three factors below, a hearing may not be required at all.
X. In kentucky, a hearing must be held before an agency takes emergency action unless a statute authorizes action without a hearing.
2. In determining the constitutional requirements as to the nature and timing of a hearing, courts generally balanc three factors:
A. Private interest that will be afected by the offiical action
B. The risk of an ERRONEOUS deprivation of such itnerest through the procedures used.
C. The government's interest, including the fiscal and administrative burdens that a particular procedural requirement would entail.

1. Generally you need a trial type hearing where both sides get to present important evidence.
2. Less extensive, more efficient hearings may be alright depending on how the elements balance out.

1. When immediate adverse effects may result from governmental action, issue is whether the party is entitled to a hearing BEFORE the government can act.

Frequently, agency rules will adversely affect important individual rights. SCOTUS has held that "if the agency properly promulgates the rule, even tthough it suspends or withdraws existing rights, no due process trial-type hearing is required as long as the rule has an "across the board" effect and does not make individual distinctions.

1. In addition to the constitutional requirements of due process, a specific statute may provide for even more procedures to be followed. APA sets out rules for "formal adjudications required by agency statute", but is virtually silent on all other hearings (informal hearings).

1. Genearlly, the right to a hearing, whether statutory or constitutional, carries the right to be noticed.
2. APA: requires person to be noticed of time, place and nature of hearing, legal authority and jx under wshich hearing will be held, and the matter of facts and law asserted.
3. Under KY law, notice must be given 20 days before the hearing unless fed law requires otherwise.

1. Generally, public proceedings are favored, even when the private party waives. However, protective orders are usually available to protect discloseure of business or proprietary information.

1. Often, one who is not a party to an admin adjudication may be affected by its outcome and want to join in. In order to intervene, must have greater interest than members of the general public. The court will also consider several factors listed on page 31.
2. Under KY law, a petition for intervention MUSt be gratned if petitioner has a statutory right to initiate the proceeding which she wishes to interveneor if they may be adversely affected by the outcome of the proceedings. A petition MAY be granted after considering the nature of the issues, the xtent to which the existing party will represent the petitioners interest, and the ability of the petitioner to present relevant evidence and argument, and the effect of intervention on the agency's ability to implement its statutory mandate.

1. When two MUTUALLY EXCLUSIVE applications are filed, a consolidated hearing or comparative hearings must be held. This is known as the ashbacker doctrine.

1. General rule: Only evidence at the hearing may be considered. However, an agency CAN use its expertise in evaluating the evidence. If, however, the agency considers facts outside the record, it must follow the official notice procedures (discussed later).
2. The use of material in internal agency files has been sustained where the agency provided an ADDITIONAL HEARING at which its conclusions could be disputed by the respondents OR no prejudice was shown.

1. An agency decision must be in accordance with "reliable probative and substantial evidence." Preponderance of evidence standard generally used. There is no objection to traditionally incompetent evidence as long as it is probative. However, irrelevant, immaterial and repetitious evidence is uniformly excluded, as is evidence from privileges.
2. In KY, a hearing officer must also exclude evidence that is excludable on constitutional or statutory grounds or on the basis of an privilege.
3. Note, in federal agency, hearsay evidence may be the main basis of a decision if it is "reliable". However, under KY, hearsay evidence is NOT sufficient in itself to support an agency's findings of fact unless it would be admissible under the rules of evidence.

1. Administrative judge may take notice of outside material facts. In Kentucky, they may do so with undisputed facts or of generally recognized technical or scientific facts within the agency's specialized knowledge. The parties must be notified of any facts so noticed and their source, and all parties have the opportunity to contest such facts.

1. Hearing officers, also called hearing examiners, who preside at agency hearings are usually not the heads of the agency. In fed agencies, such hearing officers in formal adjudications are called ALJS.
2. In KY, a hearing officer generally must submit a written recommended order to the agency head. The order includes findings of fact/law and a recommended disposition. The findings must be reasonably detailed. THe head is responsible for making the final order, which must be based on the record, the recommended order, and any exceptions made by the parties. The head may adopt the recommended order, reject or modify it in whole or in part, or remand the matter in whole or in part to the hearing officer for further proceedings.

1. On issues of credibility, the decision of the hearing officer is entitled to some weight.
2. Factual determinations are reversible by the heads so long as their determinations have substantial support in the record as required by the substantial evidence test. If an agency's findings are NOT supported by substantial evidence in the record, and the hearing officer's findings are so supported, the court is still not free to substitute its judgment on factual determinations but should properly remand the case to the agency for further proceedings.

1. The general rule is that the hearing officer cannot be questioned on his decisionmaking process UNLESS the agency decision was NOT accompanied by findings or other explanation.
2. The hearing officer may NOT consult a person or party on a fact in issue unless on notice and opportunity for all parties to pparticipate.
3. A judge doesn't have to disqualify himself based on philosophical/political bias, but if has bias or prejudice against an individual party, it is a ground for disqualification.
4. KY law requires that a hearing offier or agency head voluntarily withdraw from any case in which he cannot be fair and impartial.
5. Ky law also requires that a person who has served as an investigator or prosecutor in the hearing cannot serve as the hearing officer or assist the hearing officer.

1. Prejudgment of issues of adjudicative fact in a particular case may be a ground for disqualification.
2. On the other hand, in a rulemaking proceeding, a decisionmaker can be disqualified only upon a clear and convincing showing that he has an unlaterably closed mind on matters critical to the disposition of the proceeding.
3. If the decisionmaker has a PECUNIARY INTEREST in the outcome, he is definitely disqualified.

Any party may move to have judge removed if:
A. he served as investigator/prosecutor in the proceeding
B. Participated in an ex parte communication that would prejudice the proceedings
C. He has a pecuniary interest in the outcome
D. Has a personal bias towards a party.

1. The APA expressly prohibits ex parte communications concerning trial-type proceedings, requires anyone receiving such a communication to make it part of the record, and authorizes adverse action against any party who knowingly makes or causes to be made such an ex parte communication. BUT this only applies to such communications that would effect the merits of the case.
2. In KY, unless allowed by statute, any ex parte communication is prohibited and a copy of such communication must be placed in the record.

1. Generally, agencies are not required to follow their own decisions - they are allowed to change their minds.
2. When an agency rule gives significant substantive or procedural protections to a party, the agency is NOT free to depart from it.

1. There is no right to have counsel appointed, although a person does have a right to hire their own counsel. There is no right to a jury trial in administrative adjudication proceedings.

1. Some federal statutes provide methods for appellate review for agencies. If so, these rules are exclusive and must be followed. If no such rule, the most common rule is for a dec judgment or injunction.

1. Injunction and Dec Judgment - the Court is asked to enjoin fed agency from its action and to declare that the action is illegal.
2. In Kentucky, judicial review of an agency's final order begins by filing a petition with circuit court. Must be filed within 30 days of the final order of the agency.

1. Judicial review is not available if "statutes preclude judicial review" or if "agency action is committed to agency discretion by law."
2. There is a well established "presumption of reviewability". As a result, there must be clear evidence of intent to preclude review before it will be foreclosed.

1. The exception for nonreviewability committed to agency discretion is VERY narrow and designed "for those rare instances where statues are drawn in such broad terms that in a given case there is NO LAW TO APPLY." Even very broad terms will be enough to meet this standard and find reviewability is present.

1. The general rule is that no one is entitled to judicial relief until the prescribed administrative remedy has been exhausted."
2. There a few exceptions to this exhausation rule:
A. Unconstitutionality of Basic Statute (which delegates authority to the agency)
B. Clear jack of jurisdiction
C. Futility of proceeding further (agency already made up its mind)
D. Unreasonable delay (agency acting in bad faith)
E. Contrary to congressional intent
F. Unusual irreparable injury

1. Agency actions that do not amount to a final order are not reviewable.
2. In Kentucky, a final order need not dispose of all issues in a case. An order will be treated as a final order if the action taken in the order CONCLUSIVELY IMPOSES AN OBLIGATION, DENIES A RIGHT, OR FIXIES A LEGAL RELATIONSHIP AND IS MADE EFFECTIVE BY THE AGENCY HEAD.

1. When agencies and courts have concurrent jurisdiction, generally the agency will hear the case first and the court will hear it second.

1. Supplement from lecture handout
2. A reviewing court must compel an agency to take action only if the agency failed to take a DISCRETE action that the agency was LEGALLY REQUIRED to take.
3. Under KY law, judicial review of a final order is limited to the record unless there is an allegation of fraud or misconduct. A KY Court may not substitute its judgment for that of the agency as to the weight of evidence. In all cases of judicial review, Kentucky courts employ a three part test:
A. Whether the agency exceeded its statutory powers; whether it employed proper procedures to provide adequate due process; and whether there is substantial evidence to support the agency's decision.
4. Under KY law, the agency's findings of fact are binding on the reviewing court when supported by substantial evidence, even if there is conflicting evidence in the record. HOwever, the court is not bound by an agency's interretation of a statute and may substitute its judgment in matters of statutory construction.

1. When a decision by an admin agency is not made "on the record" of a hearing, the arbitrary and capricious test applies.
2.

1. Rules can be reviewed for proper jurisdiction, procedure,and whether they are arbitrary or capricious.
2. By contrast, a reviewing court is NOT required to give binding effect to an interpretive rule.

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