by Patricia Salkin¹

Separation of Functions Within Agency²

In pre-termination proceedings by the Pennsylvania Public Utility Commission for removal of its chief ALJ (with an offer of an ALJ position): (1) the proceedings are "adjudication," and the chief ALJ is therefore entitled to an adjudicative hearing, (2) the chief ALJ waived any issue of commingling prosecutorial and adjudicative functions, and this issue is waivable, as are other due process issues; (3) (dictum) even if there were no effective waiver, a new member who joined the commission after the pre-termination hearing could hold a post-termination hearing without creating the appearance of impropriety and without the need for a "Wall of Separation" from individuals (including Board members) who engaged in prosecutorial functions at earlier stages of this case -- the general requirement of a wall was established by Lyness v. Com., State Bd. of Medicine, 605 A.2d 1204 (Pa. 1992) (rejecting Withrow v. Larkin and prohibiting board members from adjudicating after deciding probable cause in the same case); and (4) (dictum) even if no new Commission member were available, the "Rule of Necessity" would allow the allegedly biased Commissioners to decide. Held: Commission's decision without a record is invalid and ineffective; remanded for adjudicative hearing. Turner v. Pennsylvania Public Utility Comm'n, 683 A.2d 942 (Pa. Cmwlth. 1996).

Disqualification of Presiding Officers

Board of Zoning Appeals member was biased because of past dealings with applicant for special exception to zoning. Applicant knew of the relevant facts but did not seek recusal, thereby waiving any objection. But, since case must be remanded to Board on other grounds, biased member of Board is disqualified from participating on remand. Ripley County Board of Zoning Appeals v. Rumpke of Indiana, Inc. 663 N.E.2.d 198 (Ind. App. 1996).

After Board heard disciplinary case against master plumber, plumber called into question the qualifications of some of the members, although all had been appointed by the governor -- issues were length of experience, etc. Board consists of 10 members. Statute requires majority of the Board to decide on discipline. In this case, 7 members voted for discipline, including three whom the lower court found to be unqualified, and one who never attended any of the hearings and was not familiar with the record. Held: (1) Court considered issue of Board members' qualifications this time, but announced that in future, challenges must be made before conclusion of Board hearing. (2) Unqualified Board members were "de facto officers." Generally, acts of de facto officers are held valid if in the interests of the public and of affected third persons. (3) In this case, however, court remanded to a properly composed board for imposition of sanctions based on existing record. No need for a new hearing, but Board, including new members, must read record and entertain briefs. Matter of Fichner, 677 A.2d 201 (N.J. 1996).

Board terminated employee without hearing in a case involving accusation of sexual affair between employee and a Board member. Board denied hearing because Board was so biased as to prevent fair hearing. Board offered to submit the matter to arbitration, but employee refused. Held: employee has right to hearing before Board, at which the issue of the Board's bias may be raised. Foster v. Board of School Directors of Keystone Oaks School District 678 A.2d 1214 (Pa. Cmwlth. 1996).

Right to Opportunity for Adjudicative Hearing

Thruway Authority gave letter of authority to Loyal Tire to tow vehicles, subject to Authority's right to revoke without prior notice. After Loyal damaged a car and refused to compensate owner, Authority ordered Loyal to pay owner. Loyal appealed. Authority terminated letter of authorization. Loyal paid and requested reinstatement. Held: (1) Authority is an APA agency, but no law requires it to hold on-the-record hearing to revoke letter of authority. (2) Letter of authority is a "license," but APA does not require hearing for revocation. (3) Loyal never had a property interest, because Authority retained significant discretion. (4) Authority conducted adequate investigation, interviewed all relevant, available witnesses, allowed Loyal to present its views. (5) Penalty was not excessive in the circumstances. Loyal Tire & Author Center, Inc. v. N.Y. State Thruway Authority, 645 N.Y.S. 2d 696 (N.Y. Sup. 1995).

Due Process

Agency, like court, must have authority to issue orders protective of trade secrets and other confidential matter belonging to parties or witnesses. An application of that authority will be upheld as long as the scope of the protection does not demonstrably deprive any party of a fair opportunity to address factual showings and opinions that come to inform the ultimate decision made. Held: proper for Board to rely on petitioner's expert, without allowing disclosure on cross-examination of the underlying facts and data. Application of New Jersey Bell Tel. Co., 676 A.2d 1133 (N.J. Super. A.D. 1996).

Evidence

Official recognition may not be used to circumvent hearing officer's findings of fact. Agency must apply policy to facts supported by substantial evidence. Lawnwood Medical Center, Inc. v. Agency for Health Care Administration, 690 So. 2d 421 (Fla. Appl 1996), review denied, 690 So. 2d 1299 (Fla. 1997).

Presiding officer may refuse to permit testimony of witness called without prior notice, especially if prejudicial, disruptive, or in bad faith. Snyder v. State Ethics Comm'n., 686 A.2d 843 (Pa. Cmwlth. 1996).

Requirements of Findings

Board may incorporate, by reference, recommendations of ALJ, but not findings and conclusions of Deputy Attorney General who appeared as advocate before Board. If court is thoroughly satisfied agency's finding is clearly mistaken and so plainly unwarranted that interests of justice demand intervention and correction, court should appraise record de novo. Held: remanded. Agency failed to articulate findings of fact, failed to apply facts to law, in rejecting ALJ recommendation for payment of benefits to retiree "independent contractor"/employee. Stevens v. Bd. of Trustees of Pub. Employees Retirement System, 684 A.2d 104 (N.J. Super. A.D. 1996).

Counsel

Mere lack of counsel does not deprive claimant of fair hearing, but enhances ALJ's duty to bring out relevant facts. Baker v. Employment Appeal Board, 551 N.W. 2d 646 (Iowa App. 1996).

Hearing officer's refusal to adjourn hearing to allow party to obtain counsel did not violate due process; party had ample opportunity, and did not set forth good cause for failure to retain counsel. Baywood Electric Corp. v. New York State Dep't of Labor, 649 N.Y.S.2d 28 (N.Y. App. Div.).

ALJ properly allowed non-attorney to represent party; agency is not a "court of record" under Judiciary Law. Bd. of Educ. of Union-Endicott Cent. School Dist., v. N.Y.S. Pub. Employment Relations Bd., 649 N.Y.S.2d 523 (N.Y. App. Div. 1996).

Rulemaking Process

"Rules" do not include advice letters to private parties, but do include general policy unrelated to specific cases, predicting how agency will decide future cases. Interpretive policies of Industrial Welfare Comm'n are regulations, and are invalid because not adopted under APA. Agency's exercise of its enforcement jurisdiction was proper, even though "rule" was ignored. Tidewater Marine Western, Inc. v. Bradshaw 927 P.2d 296 (Cal. 1996), cert. denied, 117 S. Ct. 1862 (1997).

Guidelines and standard contract between Department of Mental Health and group-home providers are "rules" to extent they set forth departmental policies and standards concerning care received by individuals in group homes. APA applies. American Federation of State, County, and Mun. Employees v. Dep't of Mental Health, 550 N.W.2d 190 (Mich. 1996).

Emergency Rulemaking

Union challenged emergency regulation of State Commission of Correction, permitting double celling of inmates without regard to minimum square footage required by existing regulations. Supreme court [N.Y. trial court] vacated. Commission adopted a second emergency regulation, superseding the first one but to the same general effect, citing reasons and providing some exceptions. The second emergency rule became a final rule. Supreme Court vacated. Affirmed. Held: case involving first regulation was moot. Second regulation was properly vacated. Arbitrary and capricious, since agency violated its own prior regulation without formally repealing it. Repeal by implication violates due process and subverts APA notice requirement. Agency never argued that second regulation was inconsistent with prior regulation, or repealed it by implication. On contrary, agency maintained second regulation was consistent with prior regulation. Court reviews agency action on basis articulated by agency itself. Law Enforcement Officers Union Dist. Council 82, AFSCME, AFL-CIO v. State, 655 N.Y.S. 2d 770 (N.Y.App. Div. 1997).

Substantial Protection Due³

Following D.M.'s involuntary commitment to a mental health facility, he was subjected to medication over his objections. An ALJ upheld this medication on the ALJ's finding that absent the medication D.M. would be a danger to himself or others, if released. On appeal, the court reversed, holding that the phrase in the statute, "to be a danger to the individual or to others," meant that without medication the person would be a danger to himself or to others in the facility. Because the forcible injection of medication into a nonconsenting perosn's body represents a substantial interference with that person's liberty, such individual must be afforded substantial protections. D. M. v. Maryland Department of Health and Health and Mental Hygiene, 114 Md. App. 520, 691 A.2d 252 (1997).

ALJ News⁴

North Carolina's General Assembly. The Senate passed unanimously an APA amendment which was added to an Environmental bill (House Bill 515). The amendment would require all final decision-makers under N.C.'s APA to adopt the ALJ's findings of fact if supported by any substantial evidence in the record. If the agency fails to do this, this would constitute a ground for reversible error or potential remand from the Superior Court on judicial review. This bill and important APA amendments are now in a Conference Committee to see if the House will approve the amendment. Likely, the House will go along. If so, for the first time, there will be a meaningful standard of review between the recommended and final decision maker. Certain members of the House are talking about going further and granting complete final decision making authority in OAH.

Kansas legislature adopts an Office of Administrative Hearings to go into effect July 1, 1998. Kansas is starting a small Central Hearing agency next year. More details will appear in the next issue.

The National Conference of Administrative Law Judges will be focusing on assisting states to implement the Model Act to Create a Central Hearing agency. For information or assistance contact either Hon. Edwin L. Felter, Jr. Chief Judge, Colorado Division of Administrative Hearings 1120 Lincoln St. Suite 1400, Denver, Co. 80203 303 894-2500 ed.felter@state.co.us or Hon. Edward J. Schoenbaum, 1108 South Grand West, Springfield, Il 62704 217 524-7836 or edschoen@juno.com

The National Administrative Law Judge Foundation, public interest arm of the National Association of Administrative Law Judges, is soliciting applications for its 1998 Fellowship in administrative law. The Fellowship was endowed to encourage research and scholarship for improving State Administrative Adjudication. The 1998 Fellow will focus on "Judicial Independence and Accountability in the Administrative Law Context." The Fellow will prepare an original article for publication in the Journal of the National Association of Administrative Law Judges and will deliver a fifty-minute oral presentation at the annual meeting October 12, 1998. Besides the $l,000 cash stipend, the Fellow will receive air transportation, accommodations, and meals at the annual meeting and educational program in Portland, Oregon. Applicants should submit a detailed outline of the proposed article, an abstract or introduction to the paper, with a writing sample, curriculum vitae, and list of publications, by March 30, 1998. The NALJF will review the submissions and select a Fellow by April 30, 1998. The Final draft will be due December 30, 1998. Address applications and inquiries to the Chair of the Fellowship Committee: Honorable Edwin L. Felter, Jr., Office of Administrative Hearings, 1120 Lincoln St. - Suite 1400, Denver, CO 80203 (303) 894-2500; ed.felter@state.co.us

2. The following case summaries were provided by Professor Harold Levinson, Vanderbilt Law School, from his 1997 update of state administrative law presented to the National Judicial College.

3. This case note was provided by Chief Administrative Law Judge John Hardwicke of Maryland.

4. The following information was provided by Edward J. Schoenbaum, Editor of the Journal of the National Association of Administrative Law Judges.