News From The States

by Patricia Salkin
Director, Government Law Center
Albany Law School
Co-chair, State Administrative Law Committee.

Judicial Review Is up for Grabs in California

The California Law Revision Commission has nearly completed a draft judicial review statute that will soon go to the legislature. The Commission is building on the new APA it sponsored, which was signed into law last year.

The proposed judicial review statute will abandon California's baroque "certiorarified mandamus" statute that has been used to review agency action since 1945. Instead, it will feature a simplified provision for judicial review of all kinds of agency action. The proposed statute will largely dispense with California's unique independent judgment rule. That rule required trial judges to review independently agency fact finding whenever the agency action deprives a party of a "vested, fundamental right." The new statute will largely (but not completely) replace independent judgment with a modern substantial evidence provision.

The proposed legislation is highly controversial and a fierce legislative struggle is likely.

New Florida APA

On April 25, 1996, the Florida Legislature passed a new APA, which was signed by Governor Lawton Chiles on May 1. The bill becomes effective October 1, 1996. The bill was in large part a product of an Administrative Procedure Act Review Commission, appointed by the Governor following his veto of an APA-reform bill last summer. Although the new Florida APA retains the basic structure of the old APA, passed in 1974, it builds from a "simplified" framework, which was designed to make the statute more precise, less duplicative, and better organized. The more significant changes in the new APA, however, are not organizational but substantive.

The new APA takes a hard line against agency rulemaking. It states that "no agency shall have the authority to adopt a rule only because it is reasonably related to the purpose of the enabling legislation and is not arbitrary and capricious, nor shall an agency have the authority to implement statutory provisions setting forth general legislative intent or policy." The APA sets up a procedure for legislative review of all existing rules exceeding this authorization and, failing new legislation, provides for their repeal by 1999.

The hard line against rulemaking is continued in the APA's proposed rule challenge provisions. While these provisions state that a proposed rule is not considered to be valid or invalid, they also require agencies to prove in rule challenge proceedings that a proposed rule is not invalid in response to each objection raised by a challenger. The new APA also contains a more rigorous cost/benefit analysis requirement than previous Florida law. Under the 1996 APA, unlike Florida's previous act, there is a mechanism for shifting to agencies the burden of presenting rationales for rejecting lower-cost proposals submitted by regulatory parties. Procedural errors in the preparation of a cost statement may be material, and agencies may be required to show that there are no "less costly alternatives that substantially accomplish the statutory objectives."

Another significant modification contained in the new APA is a waiver provision that requires agencies to promulgate criteria for granting waivers and variances to rules and to respond to petitions for waiver or variance. Under this provision, agencies are authorized to grant waivers or variances when 1) a person subject to a rule demonstrates the principle of the underlying statute will be or has been achieved by other means and 2) application of the rule would create a "substantial hardship" or violate "principles of fairness" (each of which is defined in the act). Agencies must give reasons for granting or denying such petitions for special treatment.

The new Florida APA contains many other changes, including: increased availability of attorneys fees, which are now to be available in rule challenge proceedings; a change in name for Florida's "hearing officers", now to be called "administrative law judges"; increased legislative oversight of rulemaking and some adjudication; the authorization of negotiated rulemaking and broader availability of mediation; and establishment of a summary hearing process.

Although the statute contains many provisions which make rulemaking more difficult for agencies, it retains a section, the subject of controversy in recent years, that requires agencies to use rulemaking when making statements of general applicability and future effect, to the extent "feasible and practicable."

For further information on the New Florida ABA, Contact Jim Rossi at Florida State University College of Law, 425 West Jefferson Street, Tallahassee, FL 32306-1034 Tel (904) 644-8308 Fax (904) 644-5487 inet <jrossi@law.fsu.edu>

1996 Legislative Changes in Maryland

The 1996 Maryland General Assembly completed its 90 day Session passing a myriad of bills, including three bills with a significant impact on the Maryland Office of Administrative Hearings (OAH) and administrative law.

1. Good Cause Objections to Telephone Video Hearings

Senate Bill 92 amends Maryland's Administrative Procedure Act to require good cause for objections to the holding of an administrative hearing by telephone or videoconferencing and to list expressly videoconferencing as an authorized means for holding such a hearing. Existing law has authorized telephone hearings or hearings by other electronic means only if a party did not object. The OAH proposed the legislative change to ensure that its use of videoconferencing for inmate grievance appeals and some personnel cases would not be derailed through frivolous objections.

SB 92 met with opposition from employee union groups and legislators who were concerned that the legislation would lead to an increase in the numbers and types of hearings done by video and that any limitation on the ability to prevent a hearing by video would prejudice appellants. Opponents argued that parties might appear less credible due to their unfamiliarity with the new technology, that videoconferencing violated due process for failure to provide an in-person meeting with the decision maker, and that ALJs would be arbitrary in their rulings on objections.

To address the opposition's concerns, SB 92 was amended to impose stringent reporting requirements on the OAH for its telephone and video hearings.

2. Administrative Review of Educational Placements of Students With Disabilities

HB 159 streamlines due process hearings in the area of special education by eliminating a two-tier appeal process, which required a local level hearing presided over by one impartial hearing office (IHO) with an appeal to a State level hearing panel consisting of one ALJ and two IHOs. The new process requires the OAH to handle all requests for due process hearings and to assign one ALJ to conduct the hearing. The bill expressly provides for mediation of disputes and requires ALJs to receive ongoing training in the area of special education. The bill authorizes an ALJ to call an impartial expert witness to testify on the record in the proceedings or require an independent evaluation of the student.

The bill is expected to save local school systems between $75,000 - $100,000 annually. The OAH expects to be able to handle the increased workload without any increase in existing resources due to the many administrative savings of the new system.

3. State Personnel Management System Reform Act of 1996

HB 774 is a comprehensive overall of Maryland's State Personnel system. It will have a substantial impact on the OAH both as a State agency and because the OAH handles all administrative hearings under the personnel law.

For the first time, the bill delegates to the OAH final decisionmaking authority in all personnel grievances; all other cases result in a proposed decision to the Secretary of Personnel. The issue of final decisionmaking has been the subject of heated debate since the creation of the OAH. Past attempts to give OAH this authority have been either defeated in the General Assembly or vetoed by the governor.

The bill also provides the Department of Personnel with express authority to mediate disputes before certifying the case for hearing at the OAH. This change will permit the OAH to discontinue its existing practice of scheduling mandatory settlement conferences for all personnel cases and, hopefully, will ensure that all cases sent to the OAH are ripe for a merits hearing. The bill also permits the establishment of peer review panels to handle appeals in lieu of appeal to the OAH.

Efforts to include collective bargaining for State employees as part of the reform effort were unsuccessful despite the backing of the governor.