Administrative Law and Procedure

Administrative agencies were established to do the government's work in a simpler and more direct manner than the legislature could do by enacting a law, and than the courts could do by applying that law in various cases. Because they pursue their actions less formally, agencies do not follow the CIVIL PROCEDURE that is set up for courts. Instead, the law of administrative procedure has developed to ensure that agencies do not abuse their authority even though they use simplified procedures.

Although administrative agencies have existed since the founding of the United States, the early twentieth century saw a growth in the number of agencies that were designed to address new problems. During the Great Depression, a host of new agencies sprang up to meet economic challenges. Antagonism toward bureaucracy increased as existing dissatisfactions were multiplied by the number of new bureaucrats. In 1939, President Franklin D. Roosevelt appointed a committee to investigate the need for procedural reform in the field of administrative law. Although the comprehensive and scholarly report of that committee was not enacted into law, a later version of it was enacted in 1946 when Congress unanimously passed the Administrative Procedure Act (5 U.S.C.A. §§ 551–706) (APA). The statute made agencies' methods more fair so that there would be less reason to object to them. It also limited the power of the courts to review agency actions and to overturn them.

Judicial review of agency action furnishes an important set of controls on administrative behavior. Unlike the political oversight controls, which generally influence entire programs or basic policies, judicial review regularly operates to provide relief for the individual person who is harmed by a particular agency decision. Judicial review has evolved over a period of years into a complex system of statutory, constitutional, and judicial doctrines that define the proper boundaries of this system of oversight. The trend of judicial decisions and the Administrative Procedure Act is to make judicial review more widely and easily available.

How far can a court go in examining an agency decision? The reviewing court may be completely precluded from testing the merits of an agency action, or it may be free to decide the issues de novo, that is, without deference to the agency's determination. In general, administrative agencies make either formal or informal decisions, and courts have different standards for reviewing each type.

Informal Agency Action Most of the work done by agencies is accomplished with informal procedures. For example, a person who applies for a driver's license does not need or want a full trial in court in order to be found qualified. So long as the motor vehicle department follows standard, fair procedures, and processes the application promptly, most people will be happy. Agencies take informal action in a variety of settings. The Social Security Administration reviews over four million claims for benefits annually, holding hearings or answering challenges to their decisions in only a small number of cases. Most transmitter applications before the Federal Communications Commission are approved or disapproved without any formal action. The INTERNAL REVENUE SERVICE processes most tax returns without formal proceedings. It also will provide informal opinions to help people avoid making costly mistakes in their financial planning.

Anyone who objects to the informal decisions made by a government agency can invoke more formal procedures. Someone may believe that standards are unclear and that they should be promulgated through formal agency rule making. Or someone may feel that the decision in a particular case is unfair and may demand a formal adjudicatory hearing. If one of these formal procedures does not satisfy a party, the agency's decision may be challenged in court.

Formal Agency Action Most formal action taken by administrative agencies consists of rule making or adjudication. Rule making is the agency's formulation of policy that will apply in the future to everyone who is affected by the agency's activities. Adjudication is for the agency what a trial is for the courts: It applies the agency's policies to some act that already has been done, so that an order is issued for or against a party who appears for a decision. Rule making looks to the future; adjudication looks at the past. Where either of these formal procedures is used, the agency will usually give interested or affected persons notice and an opportunity to be heard before a final rule or order is issued.

Rule making Administrative agencies promulgate three types of rules: procedural, interpretative, and legislative. Procedural rules identify the agency's organization and methods of operation. Interpretative rules are issued to show how the agency intends to apply the law. They range from informal policy statements announced in a press release to authoritative rules that bind the agency in the future and are issued only after the agency has given the public an opportunity to be heard on the subject. Legislative rules are like statutes enacted by a legislature.

Employees of the Internal Revenue Service process tax returns using informal procedures that make their jobs easier and less time-consuming. If a taxpayer objects to a decision made in this way, he or she may initiate more formal review procedures.
AP/WIDE WORLD PHOTOS

Agencies can promulgate legislative rules only if the legislature has given them this authority.

The Administrative Procedure Act sets up the procedures to be followed for administrative rule making. Before adopting a rule, an agency generally must publish advance notice in the Federal Register, the government's daily publication for federal agencies. This practice gives those who have an interest in, or are affected by, a proposed rule the opportunity to participate in the decision making by submitting written data or by offering views or arguments orally or in writing. Before a rule is adopted in its final form, and 30 days before its effective date, the agency must publish it in the FEDERAL REGISTER. Formally adopted rules are published in the Code of Federal Regulations, a set of paperback books that the government publishes each year so that rules are readily available to the public.

Adjudication The procedures that administrative agencies use to adjudicate individual claims or cases are extremely diverse. Like trials, these hearings resolve disputed QUESTIONS OF FACT, determining policy in a specific factual setting and ordering compliance with laws and regulations. Although often not as formal as courtroom trials, administrative hearings are extremely important. Far more hearings are held before agencies every year than are trials in courts. Adjudicative hearings concern a variety of subjects, such as individual claims for worker's compensation, welfare, or SOCIAL SECURITY benefits, in addition to multimillion-dollar disputes about whether business mergers will violate antitrust rulings. These proceedings may be called hearings, adjudications, or adjudicatory proceedings. Their final disposition is called an administrative order.

Many administrative proceedings appear to be just like courtroom trials. Most are open to the public and are conducted in an orderly and dignified manner. Typically, a proceeding begins with a complaint filed by the agency, much as a civil trial begins with a complaint prepared by the plaintiff. After the respondent answers, each side may conduct discovery of the other's evidence and prehearing conferences. A HEARING EXAMINER, sometimes called an administrative law judge (ALJ), presides over the hearing, giving rulings in response to a party's applications for a particular type of relief. The agency presents its evidence, usually through counsel, either by a written report or in the question-and-answer style of a trial, and then the respondent offers his or her case. Witnesses may be called and cross-examined. The examiner gives a decision, usually with written findings and a written opinion, shortly after the hearing.

The Executive Branch of the federal government employs federal ALJs. When Congress originally enacted the APA, it addressed concerns about the relationship between ALJs and their respective agencies by providing independence to the ALJ. The U.S. Office of Personnel Management (OPM) makes most of the decisions regarding the tenure and compensation of ALJs, and ALJs are exempted from many of the performance reviews that apply to other civil service employees. An agency may remove an ALJ only for cause and after a hearing conducted by the MERIT SYSTEMS PROTECTION BOARD.

Because administrative hearings do not use juries, an ALJ makes both factual determinations and legal decisions based upon the evidence presented and the law governing the dispute. The specific duties of an ALJ in an individual agency depend upon the powers delegated to the agency in the respective enabling statute and procedural regulations promulgated by the agency. For instance, the Office of Inspector General is empowered to impose civil penalties against a person who makes false statements or representations with respect to Social Security benefits. Under regulations promulgated by the Social Security Administration [20 C.F.R. §498.204 (2002)], the ALJ may make a number of decisions regarding the submission of evidence or the examination of witnesses; rule on motions and other procedural matters; and render a SUMMARY JUDGMENT where appropriate. However, the ALJ may not rule as invalid a federal statutory or regulatory provision, enjoin agency officials, or review discretionary acts by the inspector general. An ALJ's decision is often subject to review by a board or commission of the entire agency before parties may appeal the decision to a federal court. For example, labor disputes governed by the National Labor Relations Act are first heard by ALJs of the National Labor Relations Board (NLRB). The ALJ's decision may be appealed to the five members of the NLRB for review. Only after review by the NLRB, upon which it renders a decision and issues an opinion, may a party appeal the decision to a U.S. court of appeals.

Unlike a trial, an administrative hearing has no jury. The hearing examiner, or administrative law judge, is usually an expert in the field involved and is likely to be more concerned with overall policies than with the particular merits of one party's case. The Administrative Procedure Act affords parties who appear in administrative hearings involving federal agencies the right to notice of the issues and proceedings, the RIGHT TO COUNSEL, and the right to confront and cross-examine witnesses.