Agency discipline proceedings: the preponderance of clear and convincing evidence.

• Author: Ferguson, Cleveland, III
• Position: Florida

In American jurisprudence, the standard or burden of proof in a particular type of proceeding is based upon society's level of concern with the degree of accuracy in the factual findings delivered by the trier of fact.(1) The traditional "preponderance of the evidence" standard allows parties--usually engaged in a civil dispute best settled by monetary compensation--to share equally the risk in proving their claims and affirmative defenses.(2) Cases in which one party has accused another of a civil wrong with more severe implications, such as fraud, require proof by clear and convincing evidence. Finally, in a criminal case, our society imposes almost the entire risk of error upon itself by requiring the state to prove the guilt of the accused beyond a reasonable doubt.

In civil actions under federal law, the preponderance of the evidence standard generally is used, except certain situations that require clear and convincing evidence. The U.S. Supreme Court has held that the higher, intermediate, clear and convincing standard is reserved for cases "where particularly important individual interests or rights are at stake"(3) such as hearings to terminate parental rights,(4) involuntary commitment proceedings,(5) civil fraud,(6) and disbarment.(7) The clear and convincing standard of proof encompasses "that measure or degree of proof which will produce in the mind of the trier of fact a firm belief or conviction as to the truth of the allegations sought to be established."(8) Notably, the Supreme Court has expressly approved the use of the preponderance of the evidence standard in agency actions that may result in civil penalties being levied upon an individual.(9)

In Florida administrative law, the preponderance standard is also the norm. Applicants for permits or licenses have the burden of demonstrating entitlement thereto by a preponderance of the evidence.(10) Proof by clear and convincing evidence is required only when an agency seeks to take "penal" action against a licensee or permittee.(11) Until 1996, only when an agency action may have resulted in revocation or suspension of a license did Florida courts hold that a "loss of livelihood" would result and property rights would be significantly infringed upon, requiring proof by clear and convincing evidence.

The recent trend in Florida administrative law has been an expansion of the concept of when agency action is penal or may result in a loss of livelihood. Recent decisions have significantly altered the test for when agency action requires proof by clear and convincing evidence. This article will examine this trend and point out some practical consequences of raising the bar to the clear and convincing height.

Department of Banking & Finance v. Osborne Stern

In 1996, the Florida Supreme Court held for the first time that the imposition of an administrative fine, without action against a license or permit, is penal in nature and implicates significant property rights. Department of Banking & Finance v. Osborne Stern, 670 So. 2d 932 (Flat 1996). In Osborne Stern, an applicant for registration to deal in securities was denied on the basis of violation of statutory prohibitions against dealing in securities without having previously registered with the state. The department also sought to impose administrative fines against the applicant for the same statutory violations. In the recommended order, the hearing officer (now administrative law judge or ALJ) stated that the applicant had the burden of proving entitlement to registration by a preponderance of the evidence. The ALJ also held that the department had the burden of proving its allegations, which would allow imposition of...