Administrative Law
| Publication year | 2016 |
Administrative Law
Jennifer B. Alewine
Courtney E. Ferrell
Erin G. Watstein
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This Article surveys cases from the Georgia Supreme Court and the Georgia Court of Appeals from June 1, 2015 to May 31, 2016, in which principles of administrative law were a central focus of the case.1 Exhaustion of administrative remedies will be the first topic discussed, to be followed by standard of review of an agency decision, then on to statutory construction, with sovereign immunity and discretionary appeals to follow, and the article will conclude with a brief review of enactments from the 2016 regular session of the Georgia General Assembly.
The well-established doctrine of exhaustion of administrative remedies continues to prevail as the Georgia Supreme Court rejects trial courts' application of the narrow "futility exception" to the exhaustion requirement. In Elbert County v. Sweet City Landfill, LLC,2 the court held a company seeking permission from Elbert County to operate a solid
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waste landfill had failed to exhaust its administrative remedies when it sought judicial relief before securing a final decision on its Special Use Permit from the County's Board of Commissioners.3 While recognizing that a party need not exhaust all administrative remedies when doing so would be futile, the court reversed the trial court's holding that the futility exception applied to Sweet City's application for a Special Use Permit to operate a landfill.4 The futility exception only applies when requiring exhaustion of administrative remedies would result in a decision on the same issue by the same decision-making body, not when a party is simply pessimistic about its odds of success before the administrative body.5 Since Sweet City never obtained a final decision from the Board of Commissioners on its application for a Special Use Permit, it could not show that it would be futile to seek a decision from the Board before seeking judicial intervention.6
Similarly, the Georgia Supreme Court maintained the exhaustion requirement's solid footing in the next case, refusing to carve out another exception to the doctrine. In Georgia Department of Behavioral Health & Developmental Disabilities v. United Cerebral Palsy of Georgia, Inc.,7 a reversal of a Georgia Court of Appeals decision8 discussed in last year's Article, the Georgia Supreme Court held that an agency's alleged failure to comply with procedural requirements does not permit an aggrieved party to bypass administrative remedial steps.9 The court emphasized the policies behind the requirement that parties exhaust administrative remedies, noting the expertise administrative agencies and administrative law judges have regarding complex regulatory schemes, as well as the desirability of fast and efficient resolution of procedural defects in administrative proceedings.10 Distinguishing the facts here from the facts in cases relied upon by the court of appeals, the court found that the plaintiffs made no effort to seek any administrative review prior to filing a lawsuit.11 While the court of appeals held that the plaintiffs' lack of notice as to the proceedings against them entitled them to bypass administrative remedies, the Georgia Supreme Court refused to create a
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new exception to the exhaustion requirement for procedural errors by an administrative agency and held that the plaintiffs' actual notice required them to proceed through administrative channels.12 Where an aggrieved party believes a procedural mistake has been made relating to notice, the party should provide the agency with the opportunity to correct the mistake through the administrative review process instead of seeking judicial recourse.13
In RES-GA SCL, LLC v. Stonecrest Land, LLC,14 the Georgia Court of Appeals confronted the issue of exhaustion of administrative remedies in the context of a loan dispute and a failed bank. Stonecrest, the development company, had taken out a line of credit with Integrity, the bank. When the bank eventually failed, the Federal Deposit Insurance Corporation (FDIC) demanded that Stonecrest pay on its loan. FDIC issued a notice of closure, and provided a procedure through which entities with claims against Integrity could have those claims resolved. Stonecrest made no claim through this procedure. Following an assignment and a sale of Stonecrest's original debt, RES-GA obtained the rights to collect on the debt, and it sued Stonecrest. Stonecrest raised as an affirmative defense that Integrity breached the agreement to provide advance interest payments, and RES-GA argued Stonecrest's defenses were barred by the exhaustion of administrative remedies requirement in the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA).15 The trial court granted summary judgment in favor of RES-GA, and the parties filed cross-appeals.16
The court of appeals relied on its opinion in Gravitt v. Bank of the Ozarks17 in holding the trial court lacked jurisdiction to adjudicate Stonecrest's defenses, because FIRREA created a procedure through which claims like Stonecrest's were required to be funneled.18 The court noted a case from the United States Court of Appeals for the Eleventh Circuit that held affirmative defenses exempt from the exhaustion of remedies requirement,19 but it pointed out that "simply naming something an affirmative defense does not determine whether a request for relief is a true affirmative defense or is, in fact, a claim or action
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encompassed by FIRREA. . . ."20 The court then held Stonecrest's purported affirmative defenses were actually claims that should have been brought under the administrative process provided by FIRREA.21 Stonecrest's failure to exhaust its administrative remedies therefore barred it from asserting its claims as affirmative defenses to RES-GA's debt collection claim, and the court of appeals affirmed the grant of summary judgment in favor of RES-GA.22
This year, the Georgia Court of Appeals tackled the issue of what exactly constitutes a "final decision" of an administrative agency under Official Code of Georgia Annotated ( O.C.G.A.) section 5-6-35(a)(1).23 Specifically, in Financial Education Services, Inc. v. State,24 the court of appeals decided that an investigative demand issued by the Governor's Office of Consumer Affairs did amount to a final decision by that agency.25 This holding follows and reaffirms the Georgia Supreme Court's decision in Tri-State Building & Supply v. Reid26 that an "agency's decision to issue an investigative demand is a decision of an administrative agency within the meaning of O.C.G.A. § 5-6-35(a)."27 In Tri-State, the court held that the purposes of O.C.G.A. § 5-6-35 point toward an interpretation of "decision of an administrative agency" as inclusive of the issuance of investigative demands similar to the type Financial Education Services received.28 Holding that it was bound by the Georgia Supreme Court's interpretation of O.C.G.A. § 5-6-35(a), the court of appeals dismissed Financial Education Service's claim for lack of jurisdiction on the grounds that O.C.G.A. § 5-6-35 required Financial Education Service to file a discretionary, not direct, appeal.29
The question of how much deference to give to an agency's interpretation of a statute it is charged with administering was central
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to a number of Georgia cases this year. First, in Tibbies v. Teachers Retirement System of Georgia,30 the Georgia Supreme Court held that the Teachers Retirement System of Georgia's (the System) interpretation of Georgia's teacher retirement statute should be afforded Chevron deference.31 After first finding that the statute's language was unambiguous, the court held that, even if the statute was ambiguous, the System was engaged in legislative rulemaking when it promulgated the statute.32 As such, the System's interpretation of the statute "would be entitled to deference" so long as the interpretation was reasonable.33 The court found the System's interpretation in the instant case reasonable and affirmed the trial court's dismissal of the teacher's claim.34
Similarly, in Black v. Bland Farms, LLC,35 the Georgia Court of Appeals gave deference to the Georgia Commissioner of Agriculture's interpretation of a Vidalia onion packing date rule.36 In this case, Bland Farms argued this packing date rule exceeded the Commissioner's authority by changing the shipping date authorized by O.C.G.A. § 2-14-136.37
The court rejected this argument, holding that the packing date rule was within the Commissioner's authority to create and was reasonable in light of the language of O.C.G.A. § 2-14-136, empowering the Commissioner to "prescribe rules or regulations which may include, but not necessarily be limited to, quality standards, grades, packing . . . ."38 Because the packing date rule was within the power of the Commissioner to promulgate and was reasonable in light of the statute, the court deferred to the Commissioner's interpretation and reversed the trial court's grant of Bland Farms' motion for judgment on the pleadings.39
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In Rivera v. Washington,40 the Georgia Supreme Court heard two consolidated cases that both sought a determination of whether a denial of a claim of sovereign immunity is directly appealable under the collateral order doctrine. The defendants in both cases giving rise to this appeal sought reversals of trial court denials of claims of sovereign immunity, and both argued that the issue of sovereign immunity was collateral to the merits of their respective case and, therefore, directly appealable.41 In affirming the trial courts' dismissals of the direct appeals, the court overturned its previous decision in Board of Regents of the...
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