News from the States
by Michael Asimow^*

Local government adjudication is the black hole of administrative law. Local agencies can generally select any procedure they want to use, subject only to due process requirements. In Haas v. County of San Bernardino, 1999 WL 47403, the California Court of Appeal held that due process constrains the county=s choice of a hearing officer.

Haas had a massage parlor license which the County wanted to revoke because an employee got caught soliciting acts of prostitution. The attorney representing the County selected Abby Hyman as the hearing officer. Hyman was a local in-house insurance lawyer. She had never met Haas or the County attorney and had never before served as a hearing officer. She was paid the standard County hourly rate for her services.

The Court held that Haas was denied due process when the opposing attorney selected the hearing officer, even though there was no showing that Hyman was biased in any way. As a result of this case, California local government entities must, in the future, either hire permanent employees to serve as hearing officers or at least have somebody other than an attorney involved in the case select a private pro tem hearing officer.

The Haas decision seems inconsistent with the leading California administrative law case on bias, Andrews v. Agricultural Labor Relations Bd., 623 P.2d 151 (1981), which requires actual bias rather than an appearance of bias. Andrews upheld a decision by a pro tem hearing officer selected by the agency even though that officer seemed ideologically and financially aligned with one of the parties. As a result, Haas might well be depublished by the California Supreme Court. Under California practice, the Supreme Court frequently orders depublication of a Court of Appeal opinion, meaning that it does not appear in the official reporters and cannot be cited as a precedent. The Court generally orders depublication when it is doubtful about the correctness of a lower court decision but does not wish to accept the case for review (or the parties fail to seek review). In Haas, local government agencies concerned about the case as a precedent would undoubtedly petition the Supreme Court to depublish the decision (assuming the Court does not accept the case for review). If it stands, however, it will be a rare and valuable protection for parties embroiled in local government adjudication.

It is not unusual for courts to award attorneys= fees against an agency based on the agency=s unreasonable conduct during investigation, prosecution or adjudication. However, in McCann v. Unemployment Comp. Board of Review, 1998 WL 864378 (December 11, 1998), a 5-2 decision of the Pennsylvania Commonwealth Court assessed counsel fees against an agency for its conduct during judicial review. The court based the award on a state appellate rule which permits the award of counsel fees when a litigant=s conduct of the case is Adilatory, obdurate or vexatious.@

The Unemployment Compensation Board of Review is typically the primary defender of its decisions on appeal. The Court rejected the argument of the Board, supported by a couple of government amici, that it was entitled to absolute quasi-judicial immunity. The Court differentiated between the Board=s role as the adjudicator of an administrative decision and its later role as a litigant in defending that decision. In the latter role, if it engages in obdurate conduct, it should suffer the same consequences as any other litigant.

The Court found that the fees were appropriate in this case, because the Board, rather than merely defending its administrative findings and conclusions, Aassumed the position of advocate, changing theories on appeal@ and raising a new contention which had not been advanced by the employer in prior administrative proceedings. The Court said that had the Board merely defended its administrative findings and conclusions, Aeven if legally unsupportable, counsel fees would not have been warranted.@ This statement is not clear, in light of the Court=s citation of cases holding that litigation conduct can be dilatory, obdurate or vexatious where it Alacks any basis in law or fact.@

Florida Legislature Ponders Continuation of Rulemaking ACounter-Revolution@²

A bill before the Florida legislature, HB 107, would continue Florida=s counter-revolution against rulemaking. The catalyst for this reform bill is a 1998 case interpreting Florida=s 1996 APA amendments.

St. Johns River Water Management District v. Consolidated-Tomoka, 717 So.2d 72 (Fla. 1st DCA 1998), balanced the new APA requirement that an agency have Aparticular powers and duties@ in a statute prior to promulgating a rule (Fla. Stat. 120.536) and its conflicting command that agencies presumptively pursue rulemaking (Fla. Stat. 120.54(1)). The Consolidated-Tomoka court held that a Arule is a valid exercise of delegated legislative authority if it regulated a matter directly within the class of powers and duties identified in the statute to be implemented.@ HB 107 rejects this test by revising the APA standard, stating that agencies may only adopt rules Athat implement, interpret, or make more specific detailed powers and duties granted by the enabling statute.@ The bill states, ANo agency shall have the authority to adopt a rule only because it . . . is within the agency=s class of powers and duties and is not arbitrary and capricious.@

In addition, HB 107 would overrule Consolidated-Tomoka on the issue of burden of proof. That case held that although the agency has the ultimate burden of establishing the validity of proposed rules, the challenger has the burden of going forward with evidence supporting the objections. HB 107 would overturn this holding by requiring the agency to bear both burdens. As the court noted in Consolidated-Tomoka:

. . . it would be impractical to impose such a requirement.... [A] petition challenging a proposed rule might include numerous objections, not all of which remain in controversy at the time of the hearing. If the agency had the burden of going forward with the evidence, it would be forced to rebut every objection made in the petition, if for no other reason than to avoid the possibility of an award for attorneys= fees for its failure to justify the proposed rule.

HB 107 also contains an important provision relating to scope of judicial review. Florida=s case law endorses a doctrine similar to Chevron: if an agency interpretation Ais within the range of permissible interpretations of the statute, and that interpretation has acquired legitimacy through rulemaking@ courts have deferred to the agency interpretation, even though other interpretations may be permissible or preferable. State Department of Health and Rehabilitative Services v. Framat Realty, Inc., 407 So.2d 238, 241-42 (Fla. 1st DCA 1981). However, HB 107 states that Ajudges hearing appeals of agency rules shall not defer, or otherwise give any special weight, to an agency=s interpretation of law or a rule.@ This amendment stands to greatly enhance the role of courts in reviewing agency rulemaking, at the costs of political accountability and expertise, neither of which are possessed by reviewing courts.

HB 107 would also work a fundamental change in agency adjudication. It prohibits agencies from rejecting or modifying ALJ conclusions of law unless they are Aclearly erroneous.@ Under Florida=s current APA, agency heads can reject or modify ALJ conclusions of law or policy with explanation, although agencies are bound to ALJ findings of fact if they are supported by competent substantial evidence. Fla. Stat. 120.57(1)(l). HB 107 would radically expand the authority of ALJs and courts to decide statutory interpretation and policy issues in adjudication as well as rulemaking.

New York Bar Association Forms Administrative Law Task Force³

The New York State Bar Association has formed a Special Committee to examine the administrative practices and procedures at five state agencies: the Workers Compensation Board and the State Departments of Environmental Conservation, Health, Motor Vehicles, and Social Services. The Committee will review the extent to which the agencies implemented recommendations from a 1988 Special Report by the Bar Association=s Task Force on Administrative Adjudication.

The 1988 Task Force responded to complaints by the public and by attorneys concerning: hearing delays, understaffed hearing bureaus, confusing and contradictory guidelines and inefficient procedures in use for deciding matters ranging from social services eligibility to contested speeding tickets. As a chief recommendation, the Task Force Report urged that the agencies separate hearing officers from executive officials in the agencies. In a recent article about the Special Committee, the New York Law Journal indicated that the Bar Association formed the Special Committee due to continuing complaints about administrative adjudication. The Special Committee=s Chair, Mark H. Alcott from New York City, indicated that the Special Committee intended to issue a preliminary report by April, 1999.

New York adopted regulations requiring all attorneys to complete twenty-four hours Continuing Legal Education (CLE) every two years, but the regulations specifically exclude Athe performance of judicial or quasi-judicial (e.g., administrative law judge, hearing officer) functions.@ A recent article in the New York Bar News reported that attorney criticism about the judicial exemption has resulted in a plan to impose continuing education requirements on judges as well. Those requirements, however, will apparently appear in the Rules of the Chief Judge, which apply to judges in the New York Unified Court System. Such requirements would have no application to administrative law judges or hearing officers in the New York=s Executive Branch. Currently, the only Executive Branch standards on education for Administrative Law Judges appear in a 1989 Executive Order on Administrative Adjudication. That Order requires an agency=s adjudication plan to include a description of continuing education and training programs for hearing officers. The Order requires the training programs to explain the need for objectivity and fairness and the need to avoid pro-agency bias. The Order also requires the Governor=s Office of Employee Relations to develop training programs to assist agencies in providing continuing education and training.

Kansas Eyes Central Panel Expansion⁴

The Silver Anniversary National Association of Administrative Law Judges' Annual Meeting

The National Association of Administrative Law Judges and the North Carolina Office of Administrative Hearings invite you to attend the 1999 NAALJ Silver Anniversary Annual Meeting and Conference in beautiful Asheville, North Carolina. Program sessions begin on Sunday, September12th but early arrival events are being planned for the 11th. The Conference ends on Wednesday, September 15, 1999.

Since space is limited, you may want to consider making your room reservations now at the Great Smokies Sunspree Golf & Tennis Resort by calling: 1-800-733-3211. Let the desk know you are with the conference. The room is a reasonable rate of $89.00 per night.

The Conference topic will be "Judicial and Administrative Review of ALJ Decisions." We are anticipating interesting and nationally recognized speakers.

Plans for the social side of this 25th Anniversary event include a reception and tour at the grand Biltmore Estate (America's largest private residence) and an elegant 25th anniversary banquet (black-tie optional). Of course, we would want to encourage a good round of golf at the Sunspree Resort Golf Course! Perhaps we will be able to arrange a golf tournament on Saturday, September 10. Let us know if you are interested.

If you have any questions, please contact NC Administrative Law Judge Meg Scott Phipps at mphipps@oah.state.nc.us or (919) 733-3994.

Markley, Julia E., Note, The Fox Guarding the Henhouse: Newman V. King County and Washington=s Freedom of Information Law (Newman v. King County, 133 Wash. 2d 565, 947 P.2d 712, 1997.), 73 Wash. L. Rev. 1107-1134 (1998).

Symposium: ASeparation of Powers in State Constitutional Law,@ 4 Roger Wms. U. L. Rev. 1-174 (1998).

Bogus, Carl T., Introduction, 4 Roger Wms. U. L. Rev. 1-3 (1998).

Kersh, Rogan, et al., AMore a Distinction of Words than Things@: the Evolution of Separated Powers in the American States, 4 Roger Wms. U. L. Rev. 5-49 (1998).

Dorf, Michael C., The Relevance of Federal Norms for State Separation of Powers, 4 Roger Wms. U. L. Rev. 51-77 (1998).

Schapiro, Robert A., Contingency and Universalism in State Separation of Powers Discourse, 4 Roger Wms. U. L. Rev. 79-108 (1998).

Gardner, James A., The Positivist Revolution That Wasn=t: Constitutional Universalism in the States, 4 Roger Wms. U. L. Rev. 109-131 (1998).

Hogarty, Richard A., When Legislators Become Administrators: the Problem of Plural Office-holding, 4 Roger Wms. U. L. Rev. 133-157 (1998).

Williams, Robert F., Rhode Island=s Distribution of Powers Question of the Century: Reverse Delegation and Implied Limits on Legislative Powers, 4 Roger Wms. U. L. Rev. 159-174 (1998).

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