Chapter 10 - § 10.2 RESOLUTIONS OF FORMAL PROCEEDINGS — HEARINGS AND NEGOTIATED AGREEMENTS

• Jurisdiction: Colorado

§ 10.2 RESOLUTIONS OF FORMAL PROCEEDINGS — HEARINGS AND NEGOTIATED AGREEMENTS

§ 10.2.1—Prehearing Matters

Procedures

Upon the formal initiation of the hearing process, the MED will serve a Notice to Set to both the Hearings Division and the respondent, and then the Hearings Division will subsequently notify both the MED and the respondent of the date, place, time, and nature of the hearing at least 30 days in advance.²⁶ Continuances of the hearing will only be granted in narrow circumstances constituting good cause.²⁷

Practice Pointer
Continuances are strongly disfavored in the administrative setting. Absent a compelling reason justifying a continuance, a practitioner should not assume that a request for a continuance will be granted.

Once formal proceedings have been initiated, ex parte communications with either the Hearing Officer or the SLA are not permitted absent consent of the opposing party, and all pleadings or other filings with the Hearing Officer and/or SLA must be served on all parties to the action.²⁸

The Hearing Officer has broad discretion with respect to prehearing matters. Prehearing conferences are held only at the Hearing Officer's discretion. Depositions are not allowed unless specifically permitted by the Hearing Officer pursuant to a written motion filed by a party stating why a deposition is necessary to prove its case.²⁹ Parties are encouraged to voluntarily exchange documents and to voluntarily secure the presence of witnesses at hearing; if necessary, however, the Hearing Officer can issue administrative subpoenas to compel disclosure of documents or attendance of witnesses. ³⁰ Unlike most litigation, a party cannot issue its own subpoena but instead must submit a written request for a subpoena to the Hearing Officer, who will then either issue the subpoena as requested or make a record as to the reason for any denial of a requested subpoena.³¹ Service of a subpoena is the responsibility of the requesting party, and service must be completed at least two business days prior to hearing.³²

Negotiation and Settlement

Although in some instances counsel may be able to begin negotiations with an applicable adverse party or its counsel (e.g., an assistant attorney general, MED investigator, or local licensing authorities or their counsel) prior to the initiation of formal administrative proceedings, once formal proceedings have commenced, the MED and the licensee still may resolve a matter without proceeding to hearing.

Practice Pointer
Generally, the earlier counsel for a respondent gets involved the better. Early involvement may present an opportunity to resolve a potentially serious issue (such as a suspected application deficiency and/or inconsistency, or suspected violation) prior to the initiation of formal proceedings. Before the initiation of formal proceedings, potential resolutions are virtually limitless, subject only to agreement of the parties and generally applicable laws. Once formal proceedings have commenced, however, a publicly available paper record has already been created and the procedural mechanisms available for reaching a resolution are inherently limited to those applicable to formal proceedings.

First, the MED can retract and dismiss the applicable initiating filing (NOD, NOGFD, OSC, OSS, or Notice of Administrative Hold). Unilateral dismissal is virtually unheard of, as it would only be appropriate in a case of clear error by the MED in initiating formal proceedings.

Much more commonly, the parties may resolve formal proceedings without proceeding to hearing by entering into a settlement agreement known as a Stipulation, Agreement, and Order (SAO).

Practice Pointer
Because the administrative discovery process is less formal than that in general civil or criminal litigation, counsel should strive to obtain and review all potentially applicable discovery materials prior to engaging in settlement negotiations. Such materials may involve (1) Reports of Investigation (ROIs) from MED investigators, including any exhibits thereto (photos, videos, charts, inventory tracking data, etc.), (2) relevant, non-privileged MED correspondence in an archivable format (emails, memoranda, published compliance tips, internal reports, voicemails, and/or digitally recorded presentations), (3) internal materials from the respondent (emails, voicemails, security videos, company policies such as employment manuals or standard operating procedures, inventory and/or sales records, contracts, accounting and/or tax information, financial statements, etc.), and (4) other potentially relevant information, such as records from similar cases. A Colorado Open Records Act (C.R.S. §§ 24-72-201, et seq, known informally as "CORA") request is often a valuable discovery tool for obtaining SAOs or other agency records from unrelated, but similar cases and other potentially relevant public data such as the total number of cases of a particular type that the MED has pursued in the past, including the outcomes of such cases and any sanctions imposed. Creativity and diligence by counsel in the discovery process can be a crucial component of effective representation.

An SAO may include (1) one or more admissions of wrongdoing by the respondent, (2) stipulated corrective measures (including but not limited to mandatory training, preparation...