By the Letter of Law? The Effects of Administrative Adjudication for Resolving Disputes in NYC’s Restaurant Grading Initiative

• DOI: 10.1177/02750740211016566
• Author: Michah W. Rothbart,Diana Silver,Jin Yung Bae
• Published date: 01 November 2021
• Date: 01 November 2021
• Subject Matter: Articles

https://doi.org/10.1177/02750740211016566

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Article

Introduction

Administrative adjudication systems are designed to resolve

disputes between private parties and government agencies.

Incorporating administrative adjudication systems into pol-

icy design may help to address criticisms that governmental

regulatory enforcement for specific rules is arbitrary, poorly

conceived, or inefficient, placing an uneven or undue burden

on disputants (Hall, 1988). They may allow for redress for

individual parties that face unfair burdens resulting from the

implementation of new policies, without changing the over-

all policy goals. In addition, well-designed adjudication sys-

tems could increase the perception that regulations are

designed with justice (ensuring that all those subject to the

rule are treated equally) and fairness (ensuring that the rule is

applied fairly in a specific case) in mind (Diver, 1981). These

quasi-judicial systems can also be viewed as part of the “new

governance,” which emphasizes participatory and account-

ability mechanisms for stakeholders (Salamon, 2002).

Scholars assessing administrative adjudication systems

have noted that some of the stakeholders of these systems—

disputants, those defending administration of rules, and those

overseeing the process—have conflicting goals and may

define fairness and justice differently (Koppell, 2005;

Romzek & Dubnick, 1987). Consistent with Rosenbloom

(2013), public managers may value effectiveness, politicians

may value representation, and lawyers may value procedure

and due process. The administrative adjudication procedure

could appeal to all these stakeholders—correcting error,

allowing for voices of those affected to be heard, and provid-

ing access to remediation—but the disparate values could

also create conflict over how such adjudication systems

should be designed and implemented.

Studies have documented inconsistencies in adjudication

outcomes for cases involving similar legal issues, and scholars

have raised concern that such differences in outcomes may

1016566ARPXXX10.1177/02750740211016566The American Review of Public AdministrationSilver et al.

research-article2021

1New York University, New York City, USA

2Syracuse University Maxwell School, NY, USA

Corresponding Author:

Diana Silver, Associate Professor, Department of Public Health Policy

and Management, College of Global Public Health, New York University,

Room 1007, 715 Broadway, New York City, NY 10003, USA.

Email: diana.silver@nyu.edu

By the Letter of Law? The Effects of

Administrative Adjudication for Resolving

Disputes in NYC’s Restaurant Grading

Initiative

Diana Silver1, Michah W. Rothbart2, and Jin Yung Bae1

Abstract

Administrative adjudication can serve as a quasi-judicial forum for resolving disputes resulting from government regulations.

New York City recently required restaurants to post letter grades reflecting their compliance with food safety regulations

and incorporated an easily accessible administrative adjudication system into its policy design. This study examines the

implementation of this feature of the policy by using a regression discontinuity framework to explore the effects of the

grading policy on adjudication processes and regulatory outcomes. Quantitative data included 222,527 food safety inspection

records (2007–2014); qualitative data included interviews, observations, and document review. Restaurants were more likely

to have violations reduced and grades improved at adjudication when grades were at stake. Moreover, adjudication outcomes

were highly sensitive to score differences near grade cut-points. Professional representatives helped restaurants to negotiate

the interpretation of rules in the quasi-judicial proceedings, softening rigidity of regulations. Representatives’ expertise was

consistent with being “repeat players,” which may distort the use of such forums to ensure justice and fairness. This study

illuminates the ramifications of including alternative dispute resolution systems in the implementation of regulatory policies.

Keywords

restaurant grades, administrative adjudication, policy implementation

2021, Vol. 51(8) 619–635

negatively affect the perceived fairness of the administrative

law at issue (Ramji-Nogales et al., 2007; Revesz, 1997). To the

degree that such variation could result from differences in

resources to seek redress, such systems could widen inequities

between the have-more and the have-less. Galanter (1974)

demonstrated that repeat players in litigation with the organiza-

tional strength, resources, and ability to sustain long battles

(i.e., the “haves”) were more likely to win than weaker parties

with fewer resources, and thus shape the case laws in favor of

their interests (Galanter, 1974; Songer et al., 1999; Wheeler

et al., 1987). Galanter argued that repeat players amass greater

expertise in the process of legal challenges to specific rules,

and thus are more likely to prevail than one-shot players

(Galanter, 1974). Conti (2010) investigated the phenomena of

repeat players vs. “one-shotters” in assessing outcomes of

World Trade Organization disputes, finding that repeat players

were more effective in achieving their goals, partly because of

simple familiarity with the forum, familiarity with the key par-

ties within the system, and the cultivation of personal relation-

ships that would enhance the stature and reputation of those

arguing cases (Conti, 2010). Disputants without access to these

types of expertise and networks had poorer outcomes in World

Trade Organization cases.

In other legal contexts, some scholars have found that

repeat players who would be considered “haves” were no

more likely to prevail at hearings. Kinsey and Stalans (1999)

found that while taxpayers owning larger businesses were

more likely to mobilize legal resources in battling tax audits,

they were no more likely to succeed in audit hearings (Kinsey

& Stalans, 1999). The authors noted that certain business

characteristics, such as being a family-owned “Mom and

Pop” business evoked greater leniency in audit hearings than

legal expertise or familiarity with the system, confirming a

cultural, rather than resources-focused bias (Kinsey &

Stalans, 1999). Nevertheless, Galanter’s (1974) insights sug-

gest that adjudicators and disputants can and do affect policy

outcomes for implementation of rules, especially if chal-

lenges are frequent and voluminous enough. Yet empirical

evidence regarding this question is scant.

The implementation of New York City (NYC)’s restaurant

food safety inspection grading policy presents an opportunity

to investigate how administrative adjudication might affect

policy outcomes. In 2010, the city’s health department

announced that they would require all restaurants to post a

grade in their window that corresponded to their food safety

inspections. Nationally, more than half of foodborne illness

outbreaks are associated with restaurants (Centers for Disease

Control and Prevention: Environmental Health Services,

n.d.). The city’s Board of Health has established an adminis-

trative code governing food safety regulations for restaurants.

Regular inspections are the principal method the city has used

to reduce hazardous food safety practices by restaurants, and

the city provides food safety training for restaurant workers.

Restaurants can use the city’s administrative adjudicative sys-

tem to contest the results of their inspections.

The main purpose of requiring food safety inspection

grades was to communicate risks to the public and to incen-

tivize restaurants to improve compliance with food safety

regulations, as have been done in other localities (Filion, &

Powell, 2009; Seiver & Hatfield, 2000). That is, the policy is

intended to bring a key policy stakeholder—consumers—

into the regulatory regime. Inspection grades provide con-

sumers with simple and salient information, which may

address an information asymmetry problem and, ultimately,

may change their consumption behavior (Dranove & Jin,

2010; Thaler & Sunstein, 2009). A number of studies have

demonstrated that public display of inspection results affects

dining choices of consumers and increases restaurant com-

pliance with food safety rules (Almanza et al., 2002; Henson

et al., 2006; Lin & Leslie, 2009; Meltzer et al., 2019; Rothbart

et al., 2019; Simon et al., 2005). Previous research on the

effects of the restaurant grading policy in NYC suggests that

restaurants face strong incentives to improve compliance

with food safety regulations and, further, that they do.

Meltzer and colleagues (2019) track food safety compliance

in NYC and sales activity in NYC and the bordering counties

to assess financial and compliance consequences of the grad-

ing policy, finding that compliance improves—even on ini-

tial inspections—after a brief period of adjustment of under

1 year. They also find that while restaurant sales increased in

NYC during this period, the grading policy had no detectible

impact on average restaurant revenues citywide, because

similar increases occurred in neighboring counties without a

grading regime. Wong et al. (2015) also find public grading

increases the share of restaurants earning A grades in inspec-

tions and report survey results demonstrating that the policy

is quite popular among consumers. Firestone and Hedberg

(2018) examine the consequences for compliance, focusing

on a single public health outcome, Salmonella, finding infec-

tions declined in NYC relative to the rest of New York State

after the adoption of the grading policy. Rothbart and col-

leagues (2019) focus on the economic consequences and the

financial returns to individual grades, finding A grades (rela-

tive to a B) decrease the probability of restaurant closure (by

3–5 percentage points on average) and increase revenues (by

about US$30,000–US$40,000 annually), while increasing

sales taxes (US$1,500–US$2,000 annually) and decreasing

fines remitted (US$500–US$550 per inspection). They find

that C grades largely have the opposite effects relative to a B

(increasing probability of closure by 2–5 percentage points,

decreasing revenues by about US$40,000–US$50,000 annu-

ally, and decreasing sales taxes remitted US$1,800–US$2,000

annually on average). To date, however, research about this

program has not investigated how the use of the due process

mechanisms embedded in the policy may have contributed to

improvements in grades.

Our sequential mixed-methods explanatory study tests three

hypotheses using longitudinal inspection-level data and data

from participant observation processes, semi-structured inter-

views, and content analysis. First, all else equal, requiring the

620 American Review of Public Administration 51(8)