Vol. 14, No. 3, Pg. 26. The matter does not appear to me now as it appears to have appeared to me then Motions for reconsideration before the ALJ Division.

• Author: By the Hon. John D. Geathers

South Carolina Lawyer

2002.

Vol. 14, No. 3, Pg. 26.

The matter does not appear to me now as it appears to have appeared to me then Motions for reconsideration before the ALJ Division

26"The matter does not appear to me now as it appears to have appeared to me then" Motions for reconsideration before the ALJ DivisionBy the Hon. John D. GeathersMotions for reconsideration of Administrative Law Judge Division (ALJD or "Division") final orders have seemingly become perfunctory. Parties now routinely file motions for reconsideration when contested cases have not been decided in their favor. While motions for reconsideration do have a place in motions practice before the ALJD, the grounds upon which such motions to reconsider may be properly filed are limited to certain enumerated grounds for relief under ALJD Rule 29(D). Accordingly, motions for reconsideration are not properly filed in the ALJD as procedural requisites for appeal, to re-argue issues already determined or to present issues that could have been raised at the contested case hearing but were not. This article will attempt to clarify the purpose of the motion for reconsideration before the ALJD by setting forth the circumstances under which such a motion should be filed and by describing certain circumstances under which it should not. However, it is also hoped that this article's discussion of motions for reconsideration will be of use not only to the practitioner in administrative law, but also to the general practitioner.

28 Motions for reconsideration under ALJD Rule 29(D)

Rule 29(D) of the ALJD Rules of Procedure governs motions for reconsideration of final decisions issued in contested cases before the ALJD. Under Rule 29(D), "[a]ny party may move for reconsideration of a final decision of an administrative law judge in a contested case, subject to the grounds for relief set forth in Rule 60(b)(1)-(5), SCRCP[.]" By explicitly incorporating the grounds for relief from a judgment listed in Rule 60(b), ALJD Rule 29(D) limits the grounds upon which a motion for reconsideration of an ALJD decision may be based to the following five reasons:

(1) mistake, inadvertence, surprise or excusable neglect;

(2) newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial under Rule 59(b), SCRCP;

(3) fraud, misrepresentation or other misconduct of an adverse party;

(4) the judgment is void; or

(5) the judgment has been satisfied, released, discharged, or a prior judgment upon which it is based has been reversed or otherwise vacated or it is no longer equitable that the judgment should have prospective application.

Rule 60(b), SCRCP; see also Mictronics, Inc. v. S.C. Dep't of Revenue, 345 S.C. 506, 510, 548 S.E.2d 223, 225 (Ct. App. 2001). This limited basis for reconsideration of ALJD decisions accords with South Carolina administrative law predating the creation of the Division. See Bennett v. City of Clemson, 293 S.C. 64, 66-67, 358 S.E.2d 707, 709 (1987) ("[A]n agency's power to reconsider or rehear a case is not an arbitrary one, and such power should be exercised only when there is justification and good cause, i.e., newly discovered evidence, fraud, surprise, mistake, inadvertence or change in conditions.") Therefore, pursuant to ALJD Rule 29(D) and South Carolina administrative law generally, a motion for reconsideration filed with the ALJD is proper only if it articulates a basis for reconsideration that satisfies one of the Rule 60(b) criteria.

Rule 60(b) sets a high standard

This is a high standard for a motion for reconsideration to meet. Rule 60(b) provides a limited avenue of relief from a final judgment; it is not designed for the correction of minor errors in a judgment or for the open-ended reconsideration of a decision. Accordingly, courts have set the bar high when determining whether relief should be granted under Rule 60(b). For example, negligence or a simple mistake on the part of a party or its attorney alone is not sufficient to merit relief under Rule 60(b)(1), and relief will only be granted on account of fraud under Rule 60(b)(3) if the movant proves an extrinsic fraud affecting the proceedings by clear and convincing evidence. See James F. Flanagan, South Carolina Civil Procedure 481, 486 (2d ed. 1996). In addition, a movant seeking relief under Rule 60(b)(1)-(3) must not only comply with the language of the rule, but also establish a meritorious defense before relief will be granted. Id. at 488; Bowers v. Bowers, 304 S.C. 65, 67, 403 S.E.2d 127, 128-29 (Ct. App. 1991). See also Thompson v. Hammond, 299 S.C. 116, 120, 382 S.E.2d 900, 903 (1989) (describing the meritorious defense requirement).

Courts have similarly kept a tight rein on motions for relief under Rule 60(b)(4) and (5). A judgment is generally only "void" for purposes of Rule 60(b)(4) if the court has acted without jurisdiction. See Thomas & Howard Co. v. T.W. Graham & Co. 318 S.C. 286, 291, 457 S.E.2d 340, 343 (1995). And, Rule60(b)(5) only applies in a narrow set of circumstances, such as where a judgment has been satisfied, where a prior judgment that had a res judicata or collateral estoppel effect on a subsequent judgment has been reversed or where the court in its equitable power should modify injunctive relief on account of changed circumstances. See Flanagan, supra, at 487-88. Consequently, relief may not be granted under Rule 60(b)(4) or (5) based upon more general attacks on a judgment, such as one premised on a change in the law See Wright v. Cordesville Pentecostal Holiness Church, 310 S.C. 321, 426 S.E.2d 772 (1993).

A motion for reconsideration of an ALJ's final order must meet the rigorous standards of Rule 60(b). Motions to reconsider brought on any lesser grounds are, therefore, improper. While the imposition of this high standard for reconsideration may limit the availability of such motions before the Division, this limitation promotes administrative efficiency and comports with the "desirability, practicality and need for finality in the administrative decision-making process." Bennett, 293 S.C. at 66, 358 S.E.2d at 708; see also David E. Shipley, South Carolina Administrative Law §§ 5-103 to 5-104 (2d ed. 1989) (noting that the "need for finality and certainty in the agency decision-making process" may curtail an agency's power to reconsider its decisions). Yet, despite the restrictiveness of Rule 29(D), motions for reconsideration are routinely filed with the ALJD for such improper purposes as issue preservation, reargument of issues and the presentation of new issues.

Motions for reconsideration should not be filed to preserve issues for appeal

Rule 29(D) of the ALJD Rules of

29Procedure expressly provides that "[t]he filing of a motion for reconsideration is not a prerequisite to filing a notice of appeal from a final decision of an administrative law judge." And, a party is generally not required to file a motion for reconsideration of an ALJ's final order simply to preserve an issue for consideration by an appellate tribunal. See Wilder Corp. v. Wilke, 330 S.C. 71, 77, 497 S.E.2d 731, 734 (1998) ("Post-trial motions are not necessary to preserve issues that have been ruled upon at trial; they are used to preserve those that have been raised to the trial court but not yet ruled upon by it.") Nonetheless, there are certain circumstances under which the filing of a post-trial motion may be necessary to preserve an issue raised in a contested case for appellate review. While this post-trial motion is closely related to a motion to reconsider and is frequently referred to as such, it is more properly understood as a motion to alter or amend an order. However, because these motions to alter or amend to preserve issues for review are generally associated with motions for reconsideration, this article will address their proper use before the ALJD.

Rule 59(e) motion to alter or amend a judgment

"Preserving issues for appellate review is a fundamental component of appellate practice." Jean H. Toal et al., Appellate Practice in South Carolina 65 (1999). An issue raised at the trial level may be preserved for review in one of two ways: (1) the issue is ruled upon by the trial judge, either at trial or after; or (2) while never ruled upon by the trial judge, the issue is at least raised in a post-trial motion. See Pelican Bldg. Ctrs. v. Dutton, 311 S.C. 56, 60, 427 S.E.2d 673, 675 (1993); see also Charles E. Carpenter Jr., Preserving Error for Appeal in a Special Case -- Rule 59(e) Motions, S.C. Law., Mar.-Apr. 1995, at 15, 18. This post-trial motion asking a trial court to decide an issue it has not ruled on is often couched in terms of a motion for reconsideration or a motion for rehearing. But, this motion is more accurately characterized as a motion to alter or amend a judgment under Rule 59(e), SCRCP. See Carpenter, supra, at 15. In non-jury cases where the trial judge has made findings of fact and conclusions of law, this motion to alter or amend may also be brought pursuant to Rule 52(b), SCRCP. These motions to alter or amend are generally known as "Rule 59(e) motions." Carpenter, supra, at 15. Yet, no matter how these motions are styled, their importance as a means of preserving issues for appellate review cannot be overstated.

The ALJD Rules of Procedure do not contain a provision similar to either Rule 59(e) or 52(b). However, ALJD Rule 68 permits the South Carolina Rules of Civil Procedure to be applied, where practicable, in proceedings before the Division to resolve questions not addressed by the ALJD Rules. Consequently, a post-trial motion to preserve an issue for appeal may be filed in the ALJD, not as a pure motion for reconsideration under the narrow confines of ALJD Rule 29(D), but as a motion to alter or

30 amend a judgment pursuant either Rule 59(e) or 52(b) and ALJD Rule 68. However, the propriety of filing such a motion varies depending upon the circumstances.

As noted above, the Supreme Court of South Carolina has held that Rule 59(e) motions are generally only necessary to preserve issues that have been raised to the trial court but not ruled upon by it. Wilder, 330 S.C. at 77, 497 S.E.2d at 734. Further, when a trial judge grants relief that was not requested, rules on an issue that was not raised at trial or issues an order containing other errors or inconsistencies, a party must file a post-trial motion to preserve its objections to those discrepancies. See Toal et al., supra, at 67-68. But, where the parties have raised an issue at trial and the trial judge has ruled upon the issue in its final order, the issue is preserved for appellate review without the filing of a Rule 59(e) motion. Therefore, a Rule 59(e) motion to alter or amend need only be filed with the ALJD to preserve an issue for appellate review when the final order and decision of an Aq fails to address an issue raised by the parties at the contested case hearing or when the final order rules upon or otherwise introduces issues that were not raised at the hearing. This rule, like all rules, has its exceptions, and, as discussed below, there are circumstances under which issues not dearly raised to and expressly ruled upon by an ALJ may be preserved for appellate review even when no Rule 59(e) motion has been filed.

Issued not addressed deemed denied under ALJD Rule 29(C)

A literal reading of ALJD Rule 29(C) suggests that Rule 59(e) motions to alter or amend need never be filed where an ALJ's order does not explicitly rule on an issue raised during a contested case. Rule 29(C) provides that "[i]ssues raised in the proceedings but not addressed in the [ALJ's final] order are deemed denied." Under this language, every issue raised in a contested case matter is ruled upon --either by being affirmatively addressed in the ALJ's final order or, in the absence of such consideration, by being deemed denied pursuant to Rule 29(C). Under this rule, once an Aq has issued an order there cannot be issues that have been raised to the ALJ but not yet ruled upon; and thus, arguably, it is unnecessary to file a Rule 59(e) motion on that ground. See Wilder, 330 S.C. at 77, 497 S.E.2d at 734.

However, complete reliance upon the seemingly strong language of Rule 29(C) as a means of issue preservation may be unwise. First, the application of Rule 29(C) does not preempt every ground upon which a Rule 59(e) motion might be based; as discussed above, Rule 59(e) motions are required not only where a trial court fails to address an issue, but also where a court addresses an issue not raised in the proceedings or has other inconsistencies in its final order. See Toal et al., supra, at 68. Second, the validity of Rule 29(C) as a vehicle for issue preservation has not been tested in the courts in this state and may be suspect given recent language from the Supreme Court of South Carolina regarding issue preservation in administrative proceedings. See Brown v. S.C. Dep't. of Health & Envtl. Control, 348 S.C. 507, 519, 560 S.E.2d 410, 417 (2002) ("Issues not raised to and ruled on by the ALJ are not preserved for appellate consideration.") Accordingly, a party should not rely exdusively upon Rule 29(C) to ensure that issues raised in proceedings before the ALJD are preserved for appellate review. And, this preservation may require the filing of a motion to alter or amend when an ALJ has not ruled upon an issue presented in a contested case, notwithstanding the language of Rule 29(C).

Prevailing parties and additional sustaining grounds

The Supreme Court of South Carolina recently clarified an exception to the general rules of issue preservation by holding "that it is not always necessary for a respondent-as the winning party in the lower courtto present his issues and arguments to the lower court and obtain a ruling on them in order to preserve an issue for appellate review." I'On, L.L.C. v. Town of Mt. Pleasant, 338 S.C. 406, 420, 526 S.E.2d 716, 723 (2000) (emphasis in the original). The Court explained:

Under the present rules, a respondent -the "winner" in the lower court - may raise on appeal any additional reasons the appellate court should affirm the lower court's ruling, regardless of whether those reasons have been presented to or ruled on by the lower court. It would be inefficient and pointless to require a respondent to return to the judge and ask for a ruling on other arguments to preserve them for appellate review.

Id. at 419, 526 S.E.2d at 723 (emphasis added). This principle, however, is not without its limitations. An appellate court cannot rely on additional sustaining grounds presented by a prevailing party unless the party raises those grounds in its appellate brief and the basis for those grounds appears in the record on appeal. Id. at 420, 526 S.E.2d at 723. Moreover, the decision of whether to address additional sustaining grounds is in the discretion of the appellate court, Id., and therefore, while a prevailing party may raise an additional sustaining ground that was not even presented to the trial court, an appellate court is not likely to rule on that previously unmentioned ground as a matter of basic fairness. Id. at 421, 526 S.E.2d at 724.

Prevailing party/additional sustaining ground exception in administrative cases

Yet, even as limited above, the prevailing party/additional sustaining grounds exception to the general principles of issue preservation may not apply in appeals of administrative proceedings. In a decision issued earlier this year, the Supreme Court of

31South Carolina held that "issues not raised to and ruled upon by the ALJ are not preserved for appellate consideration." Brown v. S.C. Dep't of Health & Envtl. Control 348 S.C. 507, 519, 560 S.E.2d 410, 417 (2002) [hereinafter Speedway] . In that case, the appellant, Speedway, had prevailed both in the initial agency permitting proceedings before a division of the Department of Health and Environmental Control (DI-TEC) and in the contested case brought before the ALJD to challenge the permit. On appeal of the ALJ's decision upholding the permit, the DHEC Board overturned the ALJ's decision and denied Speedway its permit. Speedway sought judicial review of the Board's decision before the circuit court, and the circuit court affirmed the Board's ruling. In its subsequent appeal, Speedway, as the prevailing party at the fact-finding level of the proceedings before the ALJD, attempted to raise an additional sustaining ground in support of the ALJ's decision overturned by the DHEC Board.

The Supreme Court rejected Speedway's additional sustaining ground, finding that the issue had not been preserved for appellate consideration. The Court held that, even though Speedway had prevailed in the agency permitting process and in the contested case before the ALP, "Speedway was required to raise the [additional sustaining ground] to the ALJ and the Board." Speedway, 348 S.C. at 519, 560 S.E.2d at 417. The Court based this holding on the principle that "issues not raised to and ruled on by the agency are not preserved for judicial consideration... [and] [ilikewise, issues not raised to and ruled on by the ALJ are not preserved for appellate consideration." Id. (citations omitted). In support of its holding, the Court cited Kiawah Resort Associates v. South Carolina Tax Commission, 318 S.C. 502, 458 S.E.2d 542 (1995), in which the Court had similarly held that, in reviewing agency decisions on appeal, the circuit court "cannot ordinarily consider

32issues that were not raised to and ruled on by the administrative agency" Id. at 505, 458 S.E.2d at 544. However, in Kiawah Resort Associates, the party seeking to raise the new issues before the circuit court had not been the prevailing party at the agency level.

The question remains, then, whether a party prevailing before the ALJD can, on appeal, raise additional sustaining grounds supported by the record without having had those issues ruled upon by the ALJ. I'On would seem to suggest that those additional sustaining grounds are preserved for the prevailing party regardless of whether they were raised to and ruled upon by the ALJ. Speedway, on the other hand, appears to hold that whether or not a party has prevailed at the ALJD, it cannot raise additional sustaining grounds on appeal unless those grounds have been raised to and ruled upon by an ALJ. However, these seemingly differing positions arise out of cases that are procedurally quite similar. For example, both the circuit judge in I'On, a bench trial, and the ALJ in Speedway were required to make separate findings of fact and conclusions of law, see Rule 52(a), SCRCP; S.C. Code Ann.§ 123-350 (Supp. 2001), and both decisions were subject to appellate review limited largely to the correction of errors of law. See I'On, 338 S.C. at 411, 526 S.E.2d at 718-19; S.C. Code Ann. § 1-23-610 (Supp. 2001). Nevertheless, Speedway implies that the rules of issue preservation for a prevailing party at the fact-finding level differ depending on whether the case originated in administrative proceedings or in circuit court, notwithstanding S.C. Code Ann. § 1-23-390 (Supp. 2001), which provides that judicial appeals of administrative decisions shall be made "in the manner provided by the South Carolina Appellate Court Rules as in other civil cases." In light of this uncertainty and given the language of Speedway and Kiawah Resort Associates, prudence would dictate that a party appearing before the ALJD seek to have issues it may want to raise on appeal ruled upon by the ALJ, regardless of whether the party prevailed in its contested case or not. Therefore, if an ALJ has not ruled upon an issue in a final order, it may be necessary for a prevailing party seeking to preserve the issue for review to make a Rule 59(e) motion on that point.

Issues that cannot be addressed by the ALJD

Certainly, a party need not raise an issue that cannot be addressed by an ALJ in order to preserve the issue for appellate consideration. As the Supreme Court of South Carolina has noted, "practically speaking, requiring a party to raise an issue which cannot be ruled upon by an ALJ makes little sense." Video Gaming Consultants, Inc. v. S.C. Dep't of Revenue, 342 S.C. 34, 39, 535 S.E.2d 642, 645 (2000) (emphasis in the original). Therefore, where a party challenges the constitutionality of a statute or regulation on its face and thus raises an issue that ALJs, as officers of the executive branch, have no authority to pass on, see Great

33Games, Inc. v. S.C. Dep't of Revenue, 339 S.C. 79, 529 S.E.2d 6 (2000), the constitutional challenge need only be raised to and ruled upon by the circuit court in order to preserve the issue for further review. See Video Gaming Consultants, 342 S.C. at 39, 535 S.E.2d at 645; see also Ward v. State, 343 S.C. 14, 18, 538 S.E.2d 245, 247 (2000) (noting that, while agencies and ALJs cannot rule on the constitutionality of legislation, "an agency or ALJ can still rule on whether a party's constitutional rights have been violated.") While parties may raise issues that cannot be ruled upon by an ALL such as the constitutionality of legislation, in contested case proceedings, those issues are preserved for judicial review even if not presented until the case reaches circuit court. Thus, a Rule 59(e) motion to alter or amend need not be filed with the ALJD to preserve an issue that an ALJ cannot decide.

Motions for reconsideration should not be filed to reargue issues

While it is proper to make a motion to alter or amend an order, when necessary, to preserve an issue raised in a contested case for appellate review, a motion for reconsideration should never be used as a vehicle to reargue a case. See 2 Am. Jur. 2d Administrative Law § 393 (1994). As noted above, principles of issue preservation may require a party to make a post-trial motion to ask an ALJ either to decide an issue that has been raised but not ruled upon or to clarify a ruling which interjects new issues into the proceeding. However, neither of these two types of Rule 59(e) motions provide a party with an opportunity to reargue a contested case simply because the party is not satisfied with the result. See 11 Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 2810.1 (2d ed. 1995) ("The Rule 59(e) motion may not be used to relitigate old matters . . . ") To allow such reargument in a motion for reconsideration before the ALJD would not only stall the administrative decision making process, but also frustrate the desire for finality in the decisions of administrative bodies. See 73A C.J.S. Public Administrative Law & Procedure § 161 (1983) (noting that questions concerning administrative reconsideration require a balancing of "the desirability of finality, on the one hand, and, on the other, the desirability of reaching what ultimately appears to be the right result.") Consequently, motions for reconsideration are not available in the ALJD for the reargument of contested cases.

Motions for reconsideration should not be filed to raise new issues

Just as a motion for reconsideration should not be filed with the ALJD to reargue a case, a motion to reconsider an ALIs order should not be used to present an issue that could have been raised at the contested case hearing but was not. As a general rule, "a party cannot use a motion to reconsider, alter or amend a judgment to present an issue that could have been raised prior to the judgment but was not so raised." Anonymous v. State Bd. of Med. Examiners, 323 S.C. 260, 279, 473 S.E.2d 870, 880 (Ct. App. 1996), revised on other grounds, 329 S.C. 371, 496 S.E.2d 17 (1998); see also Anderson Memorial Hosp., Inc. v. Hagen, 313 S.C. 497, 498, 443 S.E.2d 399, 400 (Ct. App. 1994). Basic considerations of administrative efficiency and judicial economy weigh in favor of the principle that a party must present its issues to the ALJ before he or she renders a decision, not after. Motions for reconsideration are not available in the ALJD for the presentation of issues that could have been raised at the contested case hearing but were not.

Conclusion

The grounds upon which a party can properly make a motion for reconsideration of an ALJ's final decision are limited. A balancing of the desire for the accurate adjudication of contested cases against the need for certainty and finality in administrative decisions leads to this limited basis for reconsideration. However, this is not to say that motions for reconsideration are not available to correct significant errors in a final order. ALJD Rule 29(D) provides for motions for reconsideration under the grounds for relief set forth in Rule 60(b), SCRCP. Further, post-trial motions to alter or amend an order are available in the ALJD pursuant to ALJD Rule 68 and Rule 59(e), SCRCP, as a means to preserve issues for appellate consideration. Purely technical or clerical errors can be corrected through motions to alter or amend an order under Rule 59(e) or motions to correct clerical mistakes under ALJD Rule 67. The motions to reconsider that are precluded under the limited scope of reconsideration before the ALJD are those motions that do not rise to the standard set forth in Rule 29(D) and those that are plainly aimed at simply rearguing a matter or attempting to belatedly interject new issues. The scope of reconsideration before the ALJD is indeed narrow.

Nevertheless, when presented with a motion for reconsideration of a final order that satisfies the requirements of Rule 29(D), an ALJ just might determine that the matter does not appear to him now as it appears to have appeared to him then.

1. Bramwell, B., in Andrews v. Styrap, 26 L. T.R. 704, 706 (Ex. 1872)

The Hon. John D. Geathers is an Administrative Law Judge. The views expressed and conclusions reached in this article are those of the author alone and do not necessarily represent the position of the Administrative Law Judge Division or any of the author's colleagues. Also, the author acknowledges and expresses his appreciation for the assistance and contribution of law clerk, Justin Werner, in the preparation of this article.