CHAPTER 4 ADMINISTRATIVE ADJUDICATIONS AND DEVELOPING A RECORD FOR THE APPEAL

• Jurisdiction: United States

Natural Resources & Environmental Administrative Law and Procedure
(Nov 1999)
CHAPTER 4
ADMINISTRATIVE ADJUDICATIONS AND DEVELOPING A RECORD FOR THE APPEAL
Hugh V. Schaefer
Attorney at Law
Denver, Colorado 80202-3835

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1801 Broadway, Suite 720

Tel (303) 308-1455; Fax (303) 308-1441

E-Mail hughlaw@msn.com

Introduction

Before discussing how to develop an effective record in an administrative appeal within the Department of Interior, it is helpful to understand how administrative appeal cases are handled and what type of evidence is admissible in these types of proceedings. Virtually all adjudications within the department are on the record because the department, is an executive rather than independent agency. Accordingly it must adjudicate and conduct rulemaking on a informal rather than formal basis. This means that there is no "trial" type of hearing where witnesses appear and give sworn testimony which is subject to cross-examination by an opposing party. On the other hand formal proceedings before an independent agency such as the Federal Energy Regulatory Commission are conducted in an open trial type hearing before an administrative law judge.

In an informal proceeding, the appellant and the agency submit documents into the record for consideration by the reviewing officer or Interior Board of Land Appeals without the presentation of "live" testimony. The appellant submits a Statement of Reasons which contains arguments for reversal or modification of the initial order. The submitted factual documents constitute the record and the evidence of the case.

Evidence in Agency Adjudication

Admissible evidence in an administrative proceeding is governed by different standards than those found in judicial proceedings. Of particular note is the fact that no specific rules of evidence apply to informal agency adjudicative proceedings because this type of procedure does not involve an oral evidentiary hearing.¹ Thus, the Federal Rules of Evidence do not apply to agency proceedings. Rather, the Administrative Procedure Act applies. It deals with admissibility of evidence very broadly:

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Any oral or documentary evidence may be received, but the agency as a matter of policy shall provide for the exclusion of irrelevant, immaterial or unduly repetitive evidence.²

The Supreme Court has long upheld agency discretion to admit evidence that would not be admissible under the restrictive rules designed for jury trials.³ In the case of OPP Cotton Mills v. Administrator, the Supreme Court held that technical rules for the exclusion of evidence applicable in jury trials do not apply to proceedings before federal administrative agencies in the absence of a statutory requirement that such rules are to be observed.⁴ Perhaps the most significant difference between the Federal Rules of Evidence and evidence which may be admitted in an agency proceeding is the issue of the admissibility of hearsay evidence. In the case of Richardson v. Perales, the Supreme Court upheld the admission of written reports of five medical specialists even though the authors did not testify.⁵ Perales had sought disability benefits under the social security laws. The court specifically held that the reports may be received in evidence despite its hearsay character and the lack of cross examination. Thus it would seem, even in informal agency proceedings, written reports without testimony of the author can be admissible.

Another important aspect of evidence in agency proceedings is that rules of evidence do not limit the kinds of materials an agency can use to resolve disputed issues of legislative fact. Legislative facts do not usually concern the immediate parties but are the general facts that help the tribunal decide questions of law, policy and discretion.⁶

Also, an agency can make a finding of fact without evidentiary support by taking judicial notice or official notice, respectively, of a fact. The Administrative Procedure Act⁷ ("APA") provides for official notice in §556(e):

[W]hen an agency decision rests on official notice of a material fact not appearing in the evidence in the record, a party is entitled, on timely request, to an

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opportunity to show the contrary.⁸

APA §556(e) applies to notice of all contested material facts, adjudicative or legislative. Even though §556(e) applies only to formal adjudications, Davis & Pierce believe that the general principles this section embodies apply to all types of agency proceedings including informal proceedings.⁹

Equally important is the fact that agencies may resolve issues of legislative fact based upon its own judgment and expertise, rather than evidence. In upholding a decision of the Federal Power Commission denying a certificate of public convenience and necessity, the Supreme Court allowed the commission to go beyond the record for facts about "present or future public convenience or necessity."¹⁰ However, agency reliance on extra-record sources are tempered by the fact that if the agency reliance is the basis for findings of fact specific to a party the agency must provide the party an opportunity to rebut the extra-record sources.¹¹ The distinction that the court has drawn is whether the contested issues of fact concern the regulated area generally rather than a specific regulated party.

In considering rules of evidence, a concomitant question is, who has the burden of proof? The APA provides as follows:

Except as otherwise provided by statute, the proponent of a rule or order has the burden of proof.¹²

The legislative history of the APA defines the term "burden of proof" as meaning the party initiating the proceeding has the general burden of going forward with the prima facie case but other parties who are proponents of some different result also for that purpose have a burden to maintain.¹³ It was long understood that the burden of going forward with the

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evidence in an administrative proceeding does not include the burden of ultimate persuasion.¹⁴ However, in the case of Director, OWCF. v. Greenwich Collieries, the Supreme Court held that burden of proof requires both.¹⁵

A logical extension of the determination of who has the burden of proof in agency proceedings is the question of what standard of proof applies in agency actions? Generally, §556(d) of the APA requires a preponderance of the evidence standard. Some circuits do not require a similar standard with respect to agency actions that are not subject to §556(d). However, a decision by the Tenth Circuit suggests that the preponderance of the evidence standard is likely to be held applicable to the vast majority of informal agency actions as well.¹⁶ In the case of Bender v. Clark, the Department of the Interior denied Bender's application for a mineral lease on the public domain because Bender had not shown by "clear and definite" evidence that the land was not within a know geologic structure.¹⁷ The department attempted to apply a more stringent standard than the preponderance of evidence standard, arguing the §556 of the Administrative Procedure Act does not apply to informal hearings like Bender. The Tenth Circuit ruled that the more demanding standard is appropriate only "where particularly important interest or rights are at stake".¹⁸ The court found that no such rights were at stake in the determination of whether a mineral lease covered property within a known geologic structure and thus held the preponderance of evidence standard applicable.¹⁹

IBLA Decisions Discussing the Administrative Record

Introduction

Because the Board of Land Appeals, Department of Interior (IBLA) reviews decisions of the Bureau of Land Management (BLM) and the Minerals Management Service (MMS) as well as of the Office of Surface Mining (OSM), the following cases deal with just these two agencies. IBLA applies the principles in these cases to the Office of Surface Mining decisions,

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too.²⁰

What to do, and why it is required

In the case of Larry Brown and Associates²¹ IBLA held:

"It is incumbent upon BLM to ensure that its decision is supported by a rational basis and the basis is stated in the written decision, as well as being demonstrated in the administrative record accompanying the decision. Eddleman Community Property Trust, 106 IBLA 376, 377 (1989); Roger K. Ogden, 77 IBLA 4, 7, 90 I.D. 481, 483 (1983). The recipient of a BLM decision is entitled to a reasoned and factual explanation providing a basis for understanding and accepting the decision or, alternatively, for appealing and disputing it before the Board. Kanawha & Hocking Coal & Coke Co., 112 IBLA 365, 367-68 (1990); Southern Union Exploration Co., 51 IBLA 89, 92 (1980)."

In Great Western Onshore Inc.²² IBLA stated:

"[A]bsent a complete record, this Board and a reviewing court are incapable of complying with the review requirements statutorily mandated by the Administrative Procedure Act." Shell Offshore, Inc., [113 IBLA 226], at 233-34, 97 I.D. at 78. "Review is to be based on the full administrative record that was before the Secretary at the time he made his decision." Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 420 (1971). For that to be possible we must have "all documents and materials directly or indirectly considered by agency decision-makers[,] includ[ing] evidence contrary to the agency's position." Exxon Corp. v. Department of Energy, 91 F.R.D. 26, 33 (N.D. Tex. 1981). See Thompson v. U.S. Department of Labor, 885 F.2d 551, 555 (9th Cir. 1989); Walter O. Boswell Memorial Hosp. v. Heckler, 749 F.2d 788, 792 (D.C. Cir. 1984)."

The difficulty with an incomplete record in an appeal to IBLA was expressed as follows in Shell Offshore, Inc.:²³

"The reason for filing the complete agency record with the Board is evident: it is impossible for this Board to engage in intelligent, objective review of the

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agency's decision without knowing the...