PADM – Chapter 8

APA requires that parties be "timely informed" of the time, place, and nature of the hearings.

In addition, the agency is to inform the parties of the "legal authority and jurisdiction under which hearing is to be held and the matters of fact and law asserted.

These requirements are central to fairness and Due Process, as well as APA requiring such disclosure.

Process that "investigates, declares and enforces liabilities as they stand on present or past facts and under laws supposed already to existing. That is the purpose and end."

Order is defined to include all action, including licensing, that are not rulemaking.

That to have a fair hearing, there must be unbiased and neutral ALJ. The three primary issues: interest, bias and prejudgment.

No specific timeline is mandated, instead, the notice must be made far enough in advance of a hearing to allow the parties to adequately prepare for the case.

Statutes often set a minimum notice period. Unless it is unreasonable, courts will defer to legislative judgment.

Adjudication is an order that results from a proceeding. An order is defined to include all action, including licensing, that are not rule making.

It recognizes that for notice to have value, a party must be informed of the "nature" of the hearing, the legal authority under which the agency believes it is empowered to hold such a hearing, and the issues of fact and law to be considered.

Again, the test for determining whether a party has been given adequate notice of the nature of the case or issues to be considered is whether the information provided permitted the party to adequately prepare his or her case.

Notice of both legal and factual issues must be made under the APA. The notice must also recite the basic facts that the agency believes constitute the violation.
A notice that simply states that a party has violated a law is inadequate.

To participate in adjudication: One more must the named party, or parties (not named) who have an interest in the adjudication must be allowed to participate in hearing. i.e.) Those who will suffer some economic injury or loss (not always economic) pursuant to agency action, qualify to intervene.

A party who is subject to agency action must be provided notice and given an opportunity to participate in all hearings.

A party of interest qualifies to seek "intervention." ----The law of party of interest parallels the law on standing. If an individual satisfies standing requirements

Process whereby a nonparty to a case becomes a party by claiming that he or she has an interest in the outcome of the case.

1) Office of Communication v. FCC, and 2) Ashbacker Radio Corp v. Federal Communications Commission

Facts: renewal of a television station's license without a hearing was at issue.

Groups representing the viewing audience were denied permission to intervene because the FCC determined that the public was not a party in interest.

Decision: The Circuit Court of Appeals reversed the FCC ruling and stated that the public need not suffer economic loss to be a party in interest.

The Appellate Court found that while standing in Federal Court is limited by Article III of the Constitution, an Administrative proceeding is not a court, and therefore is not bound by the same strict rules.
The Court found that anyone affected by the Agency's decision should have standing to join the Administrative proceeding.

Since the purpose of an Administrative Agency is to function on behalf of the public interest, participation in hearings should be as broad as possible so that the Agency can best ascertain what the public interest is.

Note that this decision doesn't mean that anyone can join the proceeding, they must have some linkage to the outcome before being granted standing.

Facts: Fetzer Broadcasting Company filed an application with the FCC to operate at frequency. While the Fetzer application was pending,

Ashbacker filed an application to change the operating frequency of one of its stations to same.

The FCC determined that two stations operating at the same frequency would create intolerable interference and further stated that the applications were mutually exclusive.

The Fetzer application was then granted without a hearing and the Ashbacker application was designated for a hearing.

Ashbacker filed a petition for a hearing, rehearing and other related relief.

Has the FCC acted fairly and procedurally correctly but granting one application without a hearing and then postponing a decision on a similar application pending a hearing?

No, they have not acted properly.

Although the commission has the power to grant applications without a hearing, "where two bona fide applications are mutually exclusive, the grant of one without a hearing to both deprives the loser of the opportunity which the Congress has chosen to give him..."

Granting the Fetzer application placed an unfair burden on Ashbacker placing them in the same position as a newcomer trying to displace an established party.

The FCC's actions were fundamentally unfair and unsound procedurally.

1) A person may be called as a witness.

2) Filing an amicus curie brief

3) Participating in a class Action suit

o Friend of the court brief in which a nonparty files a brief expressing a particular opinion or point of view hoping to convince decision makers to adopt their position
o Amicus curie briefs are frequently filed in appellate court proceeding and may occur in administrative proceedings

o Brought by an individual, group, agency or other entity on behalf of a larger group people
o The class representative litigates on behalf of the class
o Class members must have similar interests in the suit
o Class members may actively or passively participate

A pretrial process whereby the parties exchange information about the case?

1) Prevents trial by surprise.
2) Parties learn facts of case
3) Parties learn each others' legal strategy
4) Allows for realistic case evaluations
5) Facilitates settlements

Discovery of anything "reasonably calculated to lead to the discovery of admissible evidence"
o Parties may seek protective order for the following exceptions:
o Discovery that is unreasonably burdensome
o Privileged information

1. INTERROGATORIES
Sets of questions propounded by one party and served on the other(s); must be responded to in writing
2. DEPOSITION
a) Oral testimony given under oath but not in court
b. Party may be ordered to appear by notice
c. Non-party - subpoena
d. All parties must be given notice that a deposition will take place
3. REQUEST FOR PRODUCTION OF DOCS
a.Formal requests that a party provide specified documents
b.Need only produce copies, not originals
4. REQUEST FOR ADMISSIONS
a. Written statements propounded by one party that must be responded to by the other party, by either admitting, denying, or objecting to each statement
i. Response cannot be narrative
5. BILL OF PARTICULARS
A request for a more detailed or definite statement explaining or supplementing a pleading or complaint
6. JENCKS ACT
Federal statute that requires government employees responsible for prosecuting a case to disclose witness's prior statements to the other parties after the witness testifies.
7. SUBPOENAS are used to require production of documents in the possession of nonparties
8) a. Freedom of Information Act (FOIA) may also provide another means of discovery

a. Federal statute that requires government employees responsible for prosecuting a case to disclose a witness' prior statements to the other parties after the witness has testified.
i. Usually causes delays, government will often provide this information in advance of the hearing

A Binding agreement between the parties concerning a particular matter

It is the equivalent of a judicial pretrial conference. It is a good source of discovery and to use the above discovery tools.

Under the APA, Section 554(b) requires agencies to entertain settlement offers prior to commencement of adjudicatory hearings if "time, the nature of the proceedings, and the public interest permits."

• Trial procedures are only required if specified by statute (required by Congress)
• Never-the-less, due process is required
• Presided over by an administrative law judge or other officer
• Parties make an opening and closing statement
• Evidence is presented
• Witnesses may be examined and cross-examined
• Objections may be made

Whoever another statue specifically requires them?

i. APA Section 554 - Adjudications applies only to those adjudications required by statute to be determined "on the record" after opportunity for an agency hearing
ii. Congress must clearly state that the right to a trial-type hearing is granted
iii. If a full trial-type, hearing is not required. Agency may use any other form of hearing within the limits of due process.

o Courts of law have specific Federal Rules of Evidence
o Aim is exclude untrustworthy, irrelevant or unduly prejudicial evidence
- Hearsay is prohibited (subject to exceptions)
o Out of court statements attributed to a litigant
o The Federal Rules of Evidence do not apply in administrative hearings

An error is prejudicial if it affects the outcome of the case. Harmless errors are not reversible

Agency decisions may be made in large part on evidence not admissible in court but may not be made entirely on such evidence. A minimum residuum of competent evidence must support the agency's decision

Richardson v. Perales

Immigration and Naturalization Services v. Lopez-Mendoza

Facts: Perales filed a claim for disability benefits. At the hearing, written physicians reports and a hospital report were accepted into evidence that were unsupported by oral testimony. Objections to the admission of this written evidence included claims of hearsay, absence of opportunity to cross examine, failure to prove the proper credentials of the report writers and whether the hospital report met statutory reporting requirements.

Issue: Was Perales afforded adequate due process protection with respect to the admitted physician and hospital reports?

Decision: Yes. Administrative agencies are not bound by federal or state rules of evidence as would a court be bound. The agency need only show that the evidence is reliable. The reports, while hearsay, fall under an exception afforded by courts to written medical records.

o Privileges were created at common law to protect privacy
o Privileges include communications between:
♣ Husband and wife
♣ Attorney and client
♣ Physician and patient
o The APA does not deal with the issue of privileged communications
♣ Well established privileges are however recognized in most administrative proceedings

Facts: The current hearing is a deportation hearing regarding the defendant who is a citizen of Mexico. The defendant is illegally in the United States. During an
unlawful arrest, he admitted his unlawful presence in the country and asks that
that information be excluded from this hearing.

Issue: Does the exclusionary rule apply in this case, making his admission inadmissible?

Decision: No. A deportation hearing is purely a civil administrative action to determine eligibility to stay in the country. There is no guilt determined or punishment assessed so the exclusionary rule does not add significantly to the defendant's Fourth Amendment rights. Furthermore, evidence obtained independent of the arrest may still be used to effect deportation. Applying the exclusionary rule in deportation proceedings would create an unacceptable burden on the deportation system that is designed to be streamlined and swift. This protects the public interest in upholding the law.

a. Doctrine holding that evidence obtained unconstitutionally or illegally is inadmissible in criminal cases. May apply in administrative proceedings.
b. Lopez-Mendoza case - Courts are to apply a cost-benefit analysis to determine if exclusionary rule should apply in proceeding.
c. Congress may provide that illegally obtained evidence is inadmissible,
d. Agencies have established exclusionary rules that apply to the Agency's proceedings alone

A judge presumes a fact to be true. Explain? (Sua Sponte ) • Negates the requirement that the fact be proved
• Usually involves facts obvious to an average person
• Parties may request that a court take judicial notice of a fact; or,
• The judge may do so sua sponte; under his or her own initiative

1. Broader than judicial notice. Notice may be taken only of those facts that are obvious or known to be true to the average person or exper

2. Parties have the opportunity to disprove material facts admitted by official notice

3. Notice may be taken before, during or after a hearing

4. Official notice infringes on due process rights so it must be used judiciously

1. Expectations
2. Predictions
3. Strong beliefs

o If during, parties must be given an opportunity to evaluate and respond
o If after, a rehearing may be required upon objection

1) Refers to the obligation of a party to prove a case.

2) BURDEN OF PRODUCTION concerns who has the obligation to produce evidence or raise an issue

3) Once the burden of production has been met, one party has the BURDEN OF PERSUASION​ to persuade​ the triers of fact that the position is meritorious and correct.

o Civil trials require a PREPONDERANCE​ OF THE EVIDENCE'
any probability greater than 50 percent. Standards used in most administrative cases.

o Criminal trials require 'beyond a reasonable doubt'

o A doubt that causes a reasonable and prudent person to question the truth of an allegation is reasonable.

o If Congress has not specified the applicable burden in the enabling statute, courts have frequently imposed a middle standard called CLEAR AND CONVINCING'. Less demanding than "beyond a reasonable doubt, but more than preponderence of the evidence. Used in administrative cases.

Social Security cases
• Claimant has burden of production
• Burden then shifts to the agency to prove ineligibility

Standard ar the level of degree by which a case must be proven?

If Congress has not specified the applicable burden in the enabling statute, courts have frequently imposed a middle standard called 'clear and convincing'

'Preponderance of the evidence'
- Most likely true than not; any probability greater than 50 percent. Standards used in most administrative cases.

'Beyond a reasonable doubt'
- A doubt that causes a reasonable and prudent person to question the truth of an allegation is reasonable.

• The right to a hearing does not impart the right to have the agency head participate as 'judge'
• Often cases are heard by one official and decided by another

Delegate the duty of conducting a hearing to subordinate agency officials; including:

o Administrative hearing officers
o Hearing examiners
o Referees
o Presiding officers
o Administrative law judges

o Administer oaths and affirmations
o Issue subpoenas authorized by law
o Rule on evidence
o Take or cause depositions
o Control the hearing
o Hold settlement and prehearing conferences
o Make or recommend decisions
o Take other actions authorized by the agency consistent with the APA

Facts: The Securities and Exchange Commission, pursuant to their enabling statute applies a preponderance of the evidence standard in determining anti-fraud provisions of the law. The petitioner, during a disciplinary hearing, challenged the commission's use of the preponderance of the evidence standard urging an application of a clear and convincing standard.

Issue: Where the Congress has expressly stated the standard to be applied in an administrative proceeding, should the court disregard the clear Congressional mandate and impose an alternate standard?

Decision: No. Although the court can and often does prescribe the appropriate standard to which an agency should apply, the court must be mindful of Congressional mandates and not effect changes unless an injustice would occur.

Issues:

1. Where there is no Congressional mandate regarding evidentiary standards, should the court step in to create such a mandate?

2. Does the court have the right or authority to establish a standard in a civil case that exceeds preponderance of the evidence requirements?

Decision:

1. Yes. Where Congress has not spoken to the standard of proof issue, traditionally the question has fallen to the courts for determination.

2. Yes. Although a deportation hearing is civil in nature, the results of the hearing have a profound effect on the parties involved. Being banished from this country is a severe depravation and it is unrealistic to decide the outcome of the hearing on the same standard used in a mere negligence case.

Denaturalization and expatriation cases have been required by the court to impose the clear and convincing standard. No less a burden should be applied in deportation cases.

o Fair hearings require neutral ALJs

o Interest - The ALJ cannot have a financial stake in the hearing

o Bias - ALJs who exhibit a personal bias are required to recuse themselves

o Prejudgment - ALJs that have formed an established belief as to the outcome of the case prior to the hearing must recuse themselves

Recusal required of judge or hearing officer if interest, bias or prejudgment Impacts fairness and neturality.

The State of Alabama had, and then repealed a law permitting businesses to maintain offices where "eyes were examined or glasses fitted" as long as the office was under the charge of a licensed optometrist.

The Alabama Optometry Association, a professional organization whose membership is limited to independent optometrists not employed by others filed charges with Alabama Board of Optometry against optometrists in the employ of Lee Optical Co.

Was the Board biased due to procedural steps taken and due to improper interest due to the Boards membership?

Yes. The Board filed a complaint in state court that was similar to proceeding already before them for which notice of hearings had been issued. This shows the formation of a prejudgment opinion. The fact that the Board membership was composed solely of optometrists in the private practice of optometry, the success of the Board's actions had a direct financial effect on the members.

Douglas Abruzzo is a former Administrative Law Judge with SSA. SSA charged him with failure to follow instructions and conduct unbecoming gan ALJ. Abruzo appealed the final decision of the merit system protection board.

Charge 1: failure to follow instruction
Charge 2: Failure to follow a direct order to treat coworkers and the public with courtesy.
Charge 3: Conduct unbecoming and ALJ?

Charge 1: Judicial independence impinged by SSA orders.
Charge 2: did not dispute
Charge 3:
Charge 4: Chjallenged authority to make order and he would not have had disposition

Court affirmed, unless (1) arbitrary, capricious, an abuse of discretion
2) obtained without procedures required by law, rule or regulatons?
3_ Unsupported by substantial evidence.

That to have a fair hearing, there must be unbiased and neutral ALJ. The three primary issues: interest, bias and prejudgment.

Syllabus

Appellees, licensed optometrists employed by Lee Optical Co., who were not members of the Alabama Optometric Association (Association), were charged by the Association with unprofessional conduct within the meaning of the state optometry statute because of their employment with the company. The complaint was filed with the Alabama Board of Optometry (Board), all members of which were Association members. The Board deferred proceedings while a suit it had brought against Lee Optical and optometrists employed by it to enjoin the company from practicing optometry was litigated in the state trial court. The charges against the individual defendants were dismissed but the court enjoined Lee Optical from engaging in the practice of optometry. The company appealed. When the Board revived the Association's charges against appellees, they sought an injunction in the Federal District Court under the Civil Rights Act claiming that the Board was biased. The court concluded that it was not barred from acting by the federal anti-injunction statute, since only administrative proceedings were involved, and that exhaustion of administrative remedies was not mandated where the administrative process was biased in that the Board, by its litigation in the state courts, had prejudged the case against appellees, and the Board members had an indirect pecuniary interest in the outcome. The District Court enjoined the Board proceedings, but, thereafter and before this appeal was taken, the State's highest court reversed the judgment against Lee Optical and held that the optometry law did not prohibit a licensed optometrist from working for a corporation.

Held:

1. The anti-injunction statute did not bar the District Court from issuing the injunction, since appellees brought suit under the Civil Rights Act, 42 U.S.C. § 1983. Pp. 411 U. S. 572-575.

2. Nor did the rule of Younger v. Harris, 401 U. S. 37, or principles of comity require the District Court to dismiss appellees' suit in view of the pending Board proceeding, since the appellees

Page 411 U. S. 565

alleged and the District Court concluded that the Board's bias rendered it incompetent to adjudicate the issues. Pp. 411 U. S. 575-577.

3. Since the Board was composed solely of private practitioners and the corporate employees it sought to bar from practice constituted half the optometrists in the State, the District Court was warranted in concluding that the Board members' pecuniary interest disqualified them from passing on the issues. Pp. 411 U. S. 578-579.

4. Though the District Court did not abuse its discretion in not abstaining until the Lee Optical decision was rendered by the Alabama Supreme Court, the principles of equity, comity, and federalism warrant reconsideration of this case in the light of that decision. Pp. 411 U. S. 579-581.

331 F.Supp. 122, vacated and remanded.

Judge-made rule that permits one who would normally be qualified preside over a case, because of personal interest or bias, to preside when no other qualified individual is available to do so.

Concept that many agencies perform the functions of all three branches of government

o Courts have not yet demanded a separation of functions
o Congress has required a separation of functions in the APA

o Ex parte contact with anyone, including agency officials, is prohibited
o Separation rule do not apply to agency heads who may investigate, prosecute and decide

o Prosecutorial and adjudicative functions are separated through the independence of ALJs
o Agency officials input may occur through participation as a witness or counsel
o Restriction applies to accusatory or adversarial proceedings
o Restriction does not apply to:
• Initial licensing
• Ratemaking
• Rulemaking

Administrative agencies issue institutional decisions. The decision maker in administrative proceedings is the governing body of the agency, be it the agency head, board, or commission. Although such individuals may preside over adjudications, in fact they rarely do. In most instances, the agency official who has been vested with the authority to issue the decision delegates the authority to preside over adjudications to subordinates.

Specifically, the APA provides that hearings are to be presided over by administrative law judges unless an agency head presides. After the hearing is completed, the parties may submit proposed findings and conclusions to the agency

Yes.
o Based on Due Process, not Sixth Amendment which deals only with criminal proceedings
o Agencies may, by rule, permit non-attorneys to represent parties
• i.e. - Proceedings before the Social Security Administration
o Each party must pay for their own attorney (the "American Rule")
• APA amendment allows a prevailing party to petition for the government to pay their fees
• Governments defense is that the agency's position was substantially justified

o FINAL DECISION - When agency heads preside over a hearing, the agency head may render a final decision (like a judge following a trial)
o INITIAL DECISION - When an ALJ presides over a hearing, they issue an initial or recommended decision
• Initial decisions become final if not appealed
• Used for well-settled issues
• Final unless appealed to the agency
• Agency performs a de novo review
o RECOMMENDED DECISION - The agency delegates authority to conduct hearing to the ALJ or other official, but requires decision must be certified and transmitted to the agency for action to be final.
• Used for new or novel issues

o The APA requires that all decision be made part of the record
o The APA requires a written decision supported by findings and conclusions
o Findings and conclusions must be rendered on all material facts
o Reasons and bases for decisions must be specified

o Accountability of administrators
o Decisional process is improved due to required analysis
o Educates the public about agency related matters
o Provides precedent
o Allows for meaningful judicial review

Seventh Amendment requires juries for common law actions but not for equitable actions. The answer to right to jury is no for two reasons:

1) Although the 7th Amendment requires a jury trial, article II would require review by a competent judicial court. Therefore, a delegation of quasi-judicial authority is non-delegatable.

2) The right to a jury applies to adjudications of private rights but not to public rights
• Actions against the government are public actions
• Congress cannot turn a private right into a public right solely by assigning its adjudication to an agency

Congress can assign action analogous to common law action to administrative tribunals if right is part of a regulatory scheme. Having the private right adjudicated in the administrative form must be necessary and consistent with the regulatory scheme.

A proceeding involving an agency's charge that a person or business has violated a regulation or statute.

The agency is to complete its proceedings within a reasonable period of time, taking into account the rights and privileges of all interested parties or persons who may be adversely affected. The provision does not alter the other APA provisions concerning hearings. Therefore, no formal adjudication is necessary unless specifically required .

Unless the public safety, health, or interest requires otherwise, the licensee must be given written notice of the facts or conduct supporting the potential adverse action before any action may be taken. Further, the licensee must be given the opportunity to comply with the law before an adverse action is taken.

Finally, if a licensee has made a timely application for continuation of a license, and the agency does not render the new license before the original expires, the APA provides that the original license will continue in effect until the decision on the renewal is made.