Challenges To Agency Action

• Jurisdiction: Maryland

VIII. CHALLENGES TO AGENCY ACTION

A. Introduction

So far, we have been talking primarily about passive modes of representation: assisting your client in actions an agency may initiate. This section is devoted to taking the offensive if an agency has acted in a way that aggrieves your client. There are a variety of ways of challenging that action. The nature of these responses is conditioned, to a great extent, on whether the agency action was quasi-judicial, quasi-legislative, or simply executive. If it was quasi-judicial, you almost undoubtedly have either a petition for judicial review or for administrative mandamus. See generally State Gov't § 10-222 and § 10-305. Maryland Rules 7-201-7-211 govern judicial review of administrative agency decision. Rules 7-401-7-403 govern complaints for administrative mandamus. If the action complained of was quasi-legislative, you may be able to challenge it under State Gov't § 10-125. If it was executive, you may have a claim for conventional mandamus under the Maryland Tort Claims Act or Maryland Contract Claims Act, and/or also a taxpayer or environmental action. In all of these cases, you may also have an action under 42 U.S.C. § 1983, under state and federal equal opportunity laws, and, in some cases, equitable remedies. There may also be a way to get a helpful ruling from the agency itself under the APA declaratory judgment provisions.

B. Quasi-Judicial Rulings: Appeals—Administrative Levels of Appeal

When the action to be challenged is quasi-judicial, in many cases the first level of "appeal" (judicial review is not technically appellate) will not be to the courts. For instance, if your client is a taxpayer aggrieved by a decision of the Comptroller, the taxpayer first appeals to the Tax Court, which despite its name is a subdivision of the Comptroller's office, and not a court. In charter counties, an initial appeal from a variety of administrative agencies is not to the Circuit Court but to the Board of Appeals, an independent agency whose only function is to hear appeals from other agencies. Some boards or commissions, like the Maryland Commission on Human Relations, sit as committees of the whole to hear appeals from rulings of administrative law judges (ALJ). See COMAR 14.03.01.10 through 14.03.01.14. A party may opt to have the "appeal" heard by the Commission administratively or to proceed with a civil action. COMAR 14.03.01.13. Occasionally, the administrative level of appeal will proceed de novo. That is, it will disregard the record before the administrative law judge, and create its own record.³⁹

Intra-administrative review is frequently initiated by a process called exceptions rather than one called an appeal. Exceptions are generally just appeals by a different name, organized to correspond to those parts of the first-level decision-maker's findings of fact and conclusions of law with which a party disagrees. Be aware that an exceptions proceeding may not be an appeal just on the record presented to the ALJ; the agency has the right to consider new information at agency level, and you have the right to move to submit new evidence in support of exceptions, if the regulations do not forbid it, and due process is observed.⁴⁰ It is more than arguable that due process would not be observed by the injection of new legal or factual issues, even if new evidence in support the existing issues would be permitted. This may be a troublesome distinction to maintain, but it may well be critical to your client's well-being.

Consider the common posture of defending a licensee against an agency's attempt to take his license. The proceeding will have been begun in most cases by a charge letter. As you practice Maryland administrative law, you will likely be struck by the sloppy way charge letters are often written. The licensee may be charged with having violated a statute or rule (what might be called the charges) and to have done so by taking certain specified actions or omissions (what might be called the specifications). You may have a decent chance of defending your client on those few specifications provided by the agency, and the agency may awaken to the fact that its case on the specifications it provided at the outset is weak, and may seek to bolster its initial sloppy charge letter with factual issues that amount to new specifications. The agency will take the position that so long as those new specifications in some way relate to the statutes or regulations charged, there is no failure of notice, and hence of due process, in the broadening of the case against your client. Your position needs to be that this broadening would violate your client's rights to fair notice, since there may be no dearth of unforeseeable ways in which your client arguably could be taxed with having been guilty of the charges, and the specifications alone could have been relied upon to explain how he allegedly did so in this particular case.

Be warned, though, that this stance sits indifferently well with your effort to undermine the agency action by conducting discovery against it, as you may well be able to do, and otherwise carrying on the litigation with new information. In order to maximize protection of yourself and your client from cries of inconsistency, you must be careful to restrict the discovery and the litigation you conduct to errors and bad faith on the agency's part related only to what was raised in the charge letter. This effort to keep expansion of the issues from being a two-way street will not always be easy or successful, but it is well to attempt if you can.

C. Quasi-Judicial Rulings: Judicial Review—Exhaustion and Exclusivity of Administrative Remedies

Statutorily prescribed administrative remedies, including administrative levels of appeal or exception, must ordinarily be pursued and exhausted before you can file a petition for judicial review.⁴¹ This doctrine also applies to cases raising questions concerning the interpretation of an agency's own regulations.⁴² Exceptions to this rule include situations:

1. Where the legislature has indicated that exhaustion of administrative remedies is not required;

2. Where there is a direct attack on the authority of the legislature to pass the legislation from which relief is sought;

3. When the agency has required a party to follow a significantly unauthorized procedure;

4. Where the administrative agency cannot provide to any substantial degree a remedy.;

5. When the object of and the issues presented by the judicial proceeding only tangentially or incidentally concern matters the agency was created to resolve.

United Ins., 450 Md. at 34-35, 144 A.3d at 1249-50, citing Prince George's County v. Blumberg, 288 Md. 275, 284-85, 418 A.2d 1155, 1161 (1980), cert. denied, 499 U.S. 1083 (1981). Be aware that courts are extraordinarily stingy with implementing any of these exceptions.⁴³

The exhaustion of administrative remedies principle overlaps with, but is distinct from, the exclusivity of administrative remedies principle. An administrative remedy will probably be exclusive when the legislature has provided a complete administrative remedy for a statutory violation by the agency. Conversely, if the agency has transgressed in some way that is not a statutory violation, then there is no exclusivity of administrative remedy, and judicial remedies may be pursued.⁴⁴

The third instance is where there is concurrent administrative and judicial remedies. In this instance, "the plaintiff at his or her option may pursue the judicial remedy without the necessity of invoking and exhausting the administrative remedy. Zappone, 349 Md. at 61, 706 A.2d at 1069.

There are certain considerations to consider when bringing administrative claims that the agency's actions, regulations, or organic statutes conflict with federal or state Constitutions, or federal statutes or regulations, e.g., actions under 42 U.S.C. § 1983 for deprivation of federal rights by the agency. When challenging the statute as a whole, an aggrieved party may proceed immediately to the court to seek a declaratory judgment or equitable remedy, regardless of the availability of an administrative remedy, because the "sole contention raised in the court action is based on a facial attack on the constitutionality of the governmental action." United Ins., 450 Md. at 36, 144 A.3d at 1250, quoting Ehrlich v. Perez, 394 Md. 691, 700, n. 6, 908 A.2d 1220, 1225, n. 6 (2006).

Moreover, in the context of actions brought pursuant to 42 U.S.C. § 1983, there is a distinction between exhaustion and ripeness. While it is recognized that is no requirement to exhaust administrative remedies before bringing a claim under 42 U.S.C. § 1983, before a claim is ripe, there must have been some final agency action that is the basis for the claim. Md. Reclamation Assocs., Inc. v. Harford County, 342 Md. 476, 503, 677 A.2d 567, 581 (1996). Thus, claims may be adjudicated initially at the agency level and are not ousted by exclusivity because absent an agency action, such a claim is not ripe. Id.

D. Quasi-Judicial Rulings: Judicial Review—Standard of Review

Unless otherwise provided by law, the standard of review applied by reviewing courts to the orders of agencies varies according to the nature of the error alleged. If your client claims the agency made an incorrect determination of fact, the standard of review will be highly deferential to the agency. Ordinarily, the fact-finding of an administrative body will not be disturbed if it is supported by substantial evidence. In other words, if there is any evidence in the record from which a reasoning mind could infer the facts found by the agency, the court must affirm the agency. It does not matter whether there is other or better evidence in the record from which a different determination of fact might have been drawn.⁴⁵

Note that when a court reviews a reviewing agency's findings of fact, it is usually the agency's findings of fact, not the...