CHAPTER 11 ADMINISTRATIVE PRACTICE BEFORE STATE AND FEDERAL AGENCIES
| Jurisdiction | United States |
(May 1996)
ADMINISTRATIVE PRACTICE BEFORE STATE AND FEDERAL AGENCIES
Karol L. Kahalley 1
Holland & Hart
Cheyenne, Wyoming
I. Introduction
A. Philosophy Behind Administrative Agency Practice
The first federal agency was created in 1789. However, the dawn of modern administrative law probably emerged in 1887, when Congress created the Interstate Commerce Commission (ICC). Designed as a hybrid—having executive, legislative and judicial functions—the ICC was the prototype of the contemporary administrative agency. Over a century later, independent regulatory agencies at both the federal and state level have assumed a prominent position in the American legal arena.
Many groups, including the American Bar Association, have historically decried the combined executive, judicial and legislative powers of administrative agencies.2 Some have called agencies the "headless fourth" branch of government, bemoaning the lack of political accountability for agency decisions. At the same time, others have noted the importance of agencies in taking on tasks which would otherwise bury an overburdened court system.3
Whatever one's opinion, administrative agencies perform critical functions from investigation, policy setting, and rulemaking to licensing, permitting, regulation, enforcement and adjudication. They are in most instances the regulators, enforcers and adjudicators of many aspects of natural resources and environmental rights, privileges, and obligations. Consequently, it is imperative for practitioners in these areas to feel comfortable and be competent adjudicating matters before administrative agencies.
This paper will help provide some guidance on the law and procedures pertinent to administrative adjudications. Adjudications are distinguished from rulemaking. Rulemaking is the process of establishing broad standards an policies for future
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application. By contrast, adjudications typically involve a fact-oriented determination as to whether a party's past conduct was lawful or whether a party is entitled to a permit or license.4
B. Fundamental Principles Encompassed Within the Federal APA and State (uniform) APA
Guiding the agencies and practitioners through the administrative law maze is the federal Administrative Procedure Act (APA),5 promulgated in 1946. The APA establishes procedural standards applicable to all federal "agencies."6 The organization and focus of the APA reflect Congress' attempt to address the concerns expressed by the Bar and others over the power administrative agencies wield and the need for due process checks on that power. The APA affirms the multiple roles of administrative agencies as investigator, prosecutor, and judge. At the same time the statute recognizes the need to provide procedural due process safeguards to individuals subject to agency regulation. The Supreme Court has noted the purposes of the APA:
One purpose was to introduce greater uniformity of procedure and standardization of administrative practice among diverse agencies whose customs have departed widely from each other. More fundamentally, however, was the purpose to curtail and change the practice of embodying in one person or agency duties of prosecutor and judge.7
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Mirroring the federal approach, most states including all those within the Rocky Mountain Region, have adopted some variation of the Model State Administrative Procedure Act (UAPA). In addition, procedural and substantive law applicable to each agency is generally found in each agency's enabling act. However, agency rules, custom and tradition often serve to regulate administrative proceedings with much more specificity, and are essential tools of the trade of administrative practitioners. The regulations governing federal agencies are found in the Code of Federal Regulations (CFR's), and most states maintain a similar compilation of regulations for state agencies.
C. Federal and state jurisdiction in key natural resources and environmental areas of law
Most natural resource and environmental lawyers find themselves appearing before the federal Bureau of Land Management (BLM), Forest Service (USFS) or some other agencies within the federal government regarding public lands and related regulatory issues. With respect to environmental matters, however, while the federal Environmental Protection Agency (EPA) or federal Office of Surface Mining and Regulation and Enforcement (OSM) have general jurisdiction throughout the country, Congress has enabled the state agencies to assume primacy over air, water, solid and hazardous waste and surface coal mining activities.8 Thus, the natural resource and environmental practitioner must become conversant with practice under both the Federal and Uniform Administrative Procedure Acts. Fortunately, most of the same core legal principles and practical considerations have evolved under both the federal and state laws. This paper focuses principally on practice under the federal APA, recognizing that the common law and practice before state agencies will vary from state to state but will closely parallel the federal model in key aspects.
II. Administrative Practice — Rules of the Game
A. Fundamental principles
Both federal and state courts have approved the delegation of power to adjudicate matters to administrative agencies. Under this delegation, federal and state agencies can adjudicate the rights of people subject to the agency's jurisdiction and can assess civil penalties for the violation of statutes or regulations.9 However, the constitutional right to a jury trial prevents agencies from adjudicating criminal guilt or imposing criminal penalties such as
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imprisonments.10 In addition, as discussed in more detail below, neither federal nor state agencies have authority to consider questions pertaining to the constitutionality of a law or regulation.
B. Procedural rules
The APA does not provide any general right to a hearing. It deals only with the procedures that must be followed once the right to a hearing has been established under another statute or by due process requirements.11 The APA requires the use of a "formal" adjudication only in contested cases required by statute to be determined on the record after opportunity for an agency hearing.12 The constitutional notion of due process requires a formal hearing only where life, liberty and property rights are to be protected.
Once it has been determined that a formal adjudication is required, the APA affords parties the following procedural safeguards:
1) notice of the hearing;
2) opportunity to participate in the hearing, present oral and written evidence and conduct cross-examinations;
3) the employee who investigated or prosecuted the case, or one who supervised such activities, must not preside at the taking of evidence or in making or in advising the recommended decision, except as a witness or counsel;
4) the right of parties to appear with counsel;
5) the opportunity to submit proposed findings, conclusions and exceptions, and the right to receive a ruling on each; and
6) the compiling of an exclusive record on which the decision shall be based.13
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In addition to the APA, a party may look to the constitution, enabling statutes, or an agency's own rules for their procedural rights. For example, a specific statute may provide for specific procedures to be followed in certain cases, e.g., the Clean Air Act.
If a formal adjudication is not mandated by statute, the agency may rely on less formal hearing procedures that satisfy the requirements of due process. Unfortunately, the APA does not provide guidance on what procedures are to be followed when a more informal adjudication will suffice. The procedures governing informal adjudications are those established by statute, by agency rule or practice, by constitutional due process requirements, or by judicial decision.
1. Conduct of hearings
The APA requires that parties receive notice of an agency hearing. Such notice must include the time, place and nature of the hearing, the legal authority and jurisdiction under which the hearing is to be held, and the matters of fact and law to be asserted.14 While the general rule is that an agency must provide a hearing before taking action affecting a person's liberty or property interest, agencies may hold hearings after acting when doing so is necessitated by an emergency or where the party in question will not suffer any substantial hardship.15 The key factors which determine the timing and type of hearing required are: 1) the private interest affected, 2) the risk of an erroneous deprivation and 3) the governmental interest, including the fiscal and administrative burdens any additional procedural requirements would entail.16
Recognizing the impracticality of having agency heads conduct all hearings themselves, the APA provides that a hearing officer or administrative law judge (ALJ) may preside over an administrative
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adjudication. The ALJ has broad authority, similar to a trial judge, to conduct and regulate the hearing. He or she may conduct pre-trial proceedings, administer oaths, issue subpoenas authorized by law, dispose of procedural requests, take depositions, preside at the hearing, make evidentiary and other rulings, prepare findings of fact and conclusions of law, and render an initial or recommended decision.17 However, this broad authority is not without limits. For example, ALJs do not have the authority to dismiss complaints.18
2. Subpoena power
The APA provides that "[a]gency subpoenas authorized by law shall be issued to a party on request and, when required by rule of procedure, on a statement or showing of general relevance and reasonable scope of the evidence sought."19 The subpoena powers of agencies are not limited to persons over which...
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