Administrative Law

Formal Rulemaking

Similar to formal adjudication. It is a trial-like process, governed by Sections 556 and 557 of the APA. In practice, it is very rare.

Notice Requirements

- A general notice of the proposed rule making must be published in the Federal Register - The notice must show: 1. the time, place, and nature of the public rule making 2. the legal authority 3. either the substance of the proposed rule or a description of the subjects and issues involved

Appeals

- A party may appeal the ruling of a judicial review to an appellate court by filing a notice of appeal within 30 days of the trial court's decision and must abide by the Indiana Rules of Appellate Procedure - On appeal, the judge will review the agency's findings of fact on the record provided from the administrative proceeding, and the agency's findings of law de novo

Procedure of Judicial Review

- A party may obtain judicial review by filing a petition within 30 days after the date that notice of the agency action was served - Venue is proper in the judicial district where the person lives or works, where the agency action is to be carried out, or where the principal office of the agency is located - When a petition for judicial review is filed, the order in question is not automatically stayed. However, the agency or court may opt to stay the order if the person seeking the review requests a stay and the court finds that the petition shows a reasonable probability that the determination appealed from is invalid or illegal - Review of a final order is confined to the administrative record

Due Process Concerns

- A person has a constitutional due process right to a hearing where the government has attempted to deprive him of a property of liberty interest on an individual basis - In order for a due process analysis to be triggered, there must be: 1. state action 2. facts in dispute 3. a property or liberty interest at stake

Property or Liberty Interest

- A property or liberty interest must be at stake - While the Constitution provides for due process, it does not provide a property interest, this must be supplied by state law - The parameters of what constitutes property and liberty interests are fuzzy at best, but a license has been held to be a property interest protected by due process

Rulemaking

- A rule is a statement of general applicability having future effect and designed to implement, interpret, or prescribe law, policy, or procedure - When agencies make rules, they act much like legislators, setting standards and establishing criteria that are meant to guide conduct - In order for an agency to enact rules, it must comply with its enabling statute

Facts in Dispute

- Actual facts must be in dispute - A person cannot transform a rule making decision into addiction, triggering due process, by simply claiming that the application of the rule deprived him of a right

State Action

- Administrative law typically involves governmental conduct - When private parties are involved in the governmental action, a question can arise as to whether there is sufficient state action

Agency Authorization for Access to Information

- Agencies can require the disclosure of information through reports. As long as the investigation is within the grant of power given to the agency by Congress, probable cause is not required - Agencies can inspect entities that they regulate - Generally, agencies have the power through their enabling acts to compel individuals to come forward and testify or to come forward with documents

Agency Powers

- Agencies carry out a wide array of functions, such as setting standards of conduct, monitoring conduct, granting and revoking licenses, collecting information, investigating and penalizing conduct, and awarding grants or contracts - Agency powers sometimes cover all three major branches of government, raising concerns about separation of powers - Two of the most important powers exercised by agencies are adjudication and rule making

Evidence

- Agencies do not have to follow the rules of evidence, but they are required to exclude evidence which is irrelevant, immaterial, or unduly repetitive - Under the Residuum Rule, where hearsay evidence is not objective to, it may form the basis of an order. However, where hearsay evidence is objected to and does not fit within any recognized exception, it may not form the sole basis of an order

Ultra Vires Action by Agencies

- Agencies may not act beyond the scope of the authority given to them by Congress - Under the APA, courts will set aside such ultra vires agency action

Functions of an Enabling Act

- Creates the agency's mandate - Empowers the agency to carry out its mandate - Supplies procedures by which the agency must carry out its mandate - imposes procedural restraints upon the agency - dictates how judicial review of an agency will take place

Interpretive Rules

- Do not bind the court, rather, they clarify or explain standards or criteria already established by a statute or prior legislative rule - General statements of policy are statements from the agency that announce how the agency plans to exercise its authority

Open Door Law in Indiana

- All meetings of public agencies must be open to permit members of the public to observe and record them. Secret ballots may not be taken during a meeting - "Meetings" are discussions of official actions or public business other than executive sessions consisting of job performance, litigation, or budgeting - Notice must be given at least 48 hours prior to the meeting by posting it at the principal office of the agency and delivering notice to all media who have requested notice - If an emergency meeting is called, the time requirements do not apply, but the notice must be posted for the public and transmitted to the media - Any person may file an action alleging a violation of the open meetings requirements. Available relief includes declaratory judgments, orders enjoining future violations, and declarations that actions taken are void

Informal Adjudications

- An administrative board may possess quasi-judicial powers to determine facts and make a ruling after applying the pertinent statutory criteria to the existing facts - Includes a wide variety of agency determinations - APA does not prohibit ex party communications in informal adjudications or contact with the decision-maker prior to such a hearing

Adoption of a Rule

- An agency has one year from the date it published notice of intent to adopt a rule to complete the rule making process - Any rule adopted by the agency must be a logical outgrowth of the comments collected at the hearings and solicited from other departments and the public - Rules must be submitted to the attorney general for approval. The AG has 45 days to review the rule, and shall approve it unless the rule: 1. has been adopted without statutory authority; 2. has been adopted without complying with required procedures; or 3, violates another law - Following review by the AG, the governor may approve or disapprove the rule with or without cause, within 15 days, unless an extension of time is given. If the governor does not object, the rule will be approved - After approval, the agency submits the rules for publication to the Indiana Secretary of State. The rule may become effective no sooner than 30 days after its submission

Notice and Hearing

- An agency must provide notice of intent to adopt a rule in the Indiana Register at least 28 days before publishing the proposed rule. The notice must include an overview of the intent and scope of the proposed rule and the statutory authority for its adoption - Agencies must also provide a public comment period, accessible through the agency's web site - A notice of public hearing must be published in a newspaper and notice of public hearing and the full text of the rule must be published int eh Indiana Register, at least 21 days before the public hearing is convened - The public hearing may be informal but must allow for public comment

Persons Entitled to Review

- Any party aggrieved by a final order is entitled to judicial review if he meets statutory criteria regarding standing, exhaustion of administrative remedies, and timeliness - The party must serve notice of noncompliance the agency and the AG at least 60 days prior to filing a petition with the court for enforcement - A person is entitled to judicial review of a non-final action if he establishes that immediate and irreparable harm will occur, and that he has no adequate remedy at law - In addition, a court will only have jurisdiction over the matter if the plaintiff has demonstrated the need for review, obtained and purchased the administrative record, and exhausted all administrative remedies

Public Access to Information

- Any person can gather information required to be published in the Federal Register - A person may also request agency records when the request 1. reasonably describes such records 2. is made in accordance with published rules stating the time, place, fees (if any), and procedures to be followed, subject to certain exceptions

Open Records Act

- Any person may inspect and copy public records of any public agency during regular business hours - Exemptions exist for certain public records - A person unlawfully denied access to a public record may file an action in the circuit or superior court of the county in which the denial occurred to compel the agency to allow access to the record. The plaintiff will prevail if the agency fails to show that the record was properly exempted and the plaintiff demonstrates the denial of access was arbitrary or capricious

Principal Officers

- Appointed by the president - Subject to removal only by the president

Inferior Officers

- Appointment provided for by Congress - Generally subject to removal by another officers

Chevron Framework

- Chevron doctrine adopts a two-step framework for courts reviewing an agency's interpretation of its enabling statute - Where an agency interprets a statute that it administers, a reviewing court will first ascertain whether the statute is ambiguous or whether Congress spoke to the precise issue addressed by the agency - If Congress has spoken on the precise issue, the judicial inquiry will end - If Congress has not spoken to the issue, the court will then assume that Congress delegated to the agency the power to interpret the statute and will uphold the agency interpretation as long as it is reasonable

The Nondelegation Doctrine

- Congress may not delegate its legislative power - Congress often does delegate such powers to agencies if it has established an intelligible principle or a standard to guide and contain that agency's powers - The legislature may grant an agency exclusive jurisdiction over a particular topic concerning matters internal to the agency - The Indiana General Assembly may delegate authority to an agency by creating a valid statute

De novo Review

- Court has a plenary, independent, and non deferential authority to examine the final order of the agency - Any questions of statutory construction are decided de novo by the court

Arbitrary and Capricious Standard of Review

- Court will determine whether the agency made a rational connection between the facts and the choices made - Agency's findings will likely be found arbitrary and capricious if the agency: 1. considered factors that Congress did not intend for it to consider 2. entirely failed to consider an important aspect of the problem 3. offered an explanation for its decision that runs counter to the evidence before it 4. offered findings so implausible that they could not be ascribed to a difference in view or the product of agency expertise

Scope of Review Constitutional Issues

- Courts will review agency decisions to determine whether they are contrary to a constitutional right, power, privilege, or immunity - Congress cannot preclude review of constitutional rights, although Congress can limit such review by providing for statutes of limitations or requiring challenges to be brought in certain courts

Emergency Rules

- Emergency rules related to specified area of public health, safety, and welfare may be adopted if necessary - Emergency rules expire within 90 days of adoption, with some limited extensions

Finality

- Ensures that the agency process must be complete before courts will review an agency action - An action is final when: 1. it is the consummation of the agency decision-making process; and 2. rights or obligations have been determined or legal consequences flow

Comment Requirements

- Following notice, the agency must allow interested person to submit written data, views, or arguments - The agency must then consider the relevant matter presented and incorporate in the rules which are adopted a concise general statement of their basis and purpose

Formal Agency Adjudication

- Formal adjudication is that which is required to be determined on the record after opportunity for an agency hearing - For formal adjudication to take place, the enabling act must have provided for it

Limitation to Agency Access to Information

- Fourth and Fifth Amendment limit to some extent an agency;s ability to collect information from the public - Inspectors must generally obtain a warrant in order to inspect - For closely regulated industries there is no need for a warrant - Likewise, an individual's right to refuse to incriminate himself can provide a privilege against responding to certain questions proffered pursuant to a subpoena

Final Order

- If ALJ is the ultimate authority, ALJ has 90 days to issue a recommendation, and upon expiration of such time his order becomes the final order. - If ALJ is not the ultimate authority, his order is a recommendation and must be approved by the ultimate authority within 60 days in order to make it a final order - After the recommended order, the individual has 15 days to file objections. If no objections are filed, the ultimate authority determines that some issues merit reconsideration, it will hold an evidentiary hearing in which both sides can present evidence and submit briefs

APA Requirements for Informal Adjudication

- If a party is compelled to appear, he is entitled to have counsel with him - Parties can retain copies of data documents they are required to submit - Parties can request subpoenas if they are authorized by law - Parties will be given notice of the agency decision with an explanation

Special Provision

- If a proposed rule will have an impact greater than $500,000, the agency must provide a fiscal analysis from the Legislative Services Agency. The legislative impact is due within 45 days. - If the proposed rule will affect the Indiana Economic Development Council and the State Department of Commerce, it must be submitted to these departments. If either department replies with comments to the agency, the agency must respond specifically to such department in writing.

Informal Rulemaking

- Informal rule making is the more common method by which agencies promulgate rules - Procedures for informal rule making are found in Section 553 of the APA

Prudential Standing

- Involves court-made rules to limit the cases brought before the court - Courts have exercised prudential standing requirements most commonly through the zone of interest test. To have standing, the party bringing the case must be within the zone of interest protected by the statute

Judicial Review

- Judicial review of administrative procedures is usually granted by statute, either the APA or the agency's enabling statute - The APA provides generally for judicial review so long as certain constitutional requirements are met, which include limitation on the scope of review

How an Enabling Act Might Constrain an Agency's Legislative Powers

- Limit the agency's substantive jurisdiction - Exempt a particular area from the agency's reach - Limit the powers the agency may use, or prescribe the processes it must use, to exercise those powers

Rules Exempt from Section 553 Rulemaking Procedures

- Non-legislative rules - Rules regarding the military or foreign affairs functions of the United States - Rules involving an agency's management of personnel, public property, loans, grants, benefits, and contracts - Where an agency finds good cause that the notice and comment procedures are impracticable, unnecessary, and contrary to the public interest

Procedural Requirements for Formal Adjudication

- Notice must be given regarding: - 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 asserted - parties must have the chance to submit facts and have their arguments considered - if the parties cannot consent to a settlement and a hearing is required, the hearing must provide for the taking of evidence in front of the agency or an administrative law judge - the proponent of a rule or order has the burden of proof - the transcript of testimony and exhibits, together with all papers and requests filed in the proceeding, constitutes the exclusive record for decision - the agency investigators and decision-makers must have separate functions - when an agency makes a decision, the record must show the ruling on and give the reasons for each finding, conclusion or exception presented, and - all ex parte communications are prohibited

Notice

- Notice of an agency order must be given to each person to whom the order is directed that imposes a sanction or terminates a legal right, including licensing and personnel decisions - The notice must include a description of the order and an explanation of the procedures for administrative review

Required Process

- Once it is determined that due process has been triggered, the amount of process due must then be calculated - Matthews v. Eldridge balancing test 1. the harm to the individual if wrongfully deprived of property or liberty 2. the risk of error given the current procedures and the decrease in risk of error if the procedure is changed, an 3. the burden on the government caused by the added procedures

Appointment and Removal Powers

- One of the primary means by which the president exercises authority over agencies is by appointing principal officers - Article II of the U.S. Constitution empowers the president to nominate and, with the advice and consent of the Senate, appoint all officers not otherwise provided for in the Constitution - Although Congress cannot grant itself any appointment powers, it may vest the appointment of inferior officers in the president, the courts, or department heads

Administrative Procedure Act

- Provides a generally applicable framework for all administrative agencies - Serves as the federal governing lawyer for all agencies, but may be preempted by specific enabling acts

Federal Advisory Committee Act

- Regulates the conduct of the Federal Advisory Committees (committees of private individuals that advise the federal government) - Such committees are required to meet in public subject to some exceptions

Exhaustion

- Requires parties to resort first to administrative remedies before seeking redress from the courts - Requirement serves the dual purpose of protecting the delegated authority of the agency and of promoting efficiency in the courts by not allowing premature litigation

Adjudication

- Resolves disputes, typically involving the application of law to facts in a given set of events that has already occurred - Can be formal or informal

Legislative Rules

- Rules that bind, they have the force and effect of law - An agency must have congressional authorization to make a legislative rule. These rules are typically enacted through notice and comment rulemaking

Administrative Law Judge

- Sets the time and place of the hearing, provides notice, makes written findings of fact, and issues a ruling which sets forth the reasons for his ruling - Has the authority to administer oaths, govern discovery and the proceeding, hear motions, and create a recommended order - Must allow parties to file pleadings and motions and may allow the parties to file briefs, proposed findings, and proposed orders - Must remain impartial and cannot act as advocate, investigator, or prosecutor. Nor can he participate in ex party communications or comment publicly about the proceedings - Must issue specific findings if he decimated from previous sanctions regarding similar violations

Representational Standing

- Sometimes the constitutional requirements can be met through representational standing, also known as associational standing - In these cases, an organization may bring a suit on behalf of its members to satisfy the constitutional requirements if it has a member who could bring the case himself and its mission is relevant to the suit. It is not necessary for the member to be an actual party to the suit

Procedure

- The APA calls for a trial-like type of procedure - Specific enabling acts may modify these requirements

Decision-Maker

- The APA provides that a formal adjudication must be presided over by: 1. the agency 2. one or more members of the body that comprises the agency 3. one or more administrative law judges - The ALJ makes the initial decision for the agency and, unless appealed to the agency itself, that opinion becomes final

Ex Parte Contacts

- The APA provides that no interested person outside the agency can communicate ex party with the agency regarding the merits of the proceeding - If there is an ex party communication, it must be placed on the public record and could lead to an adverse decision against the party in violation, and the party must show cause why his claim or interest in the proceeding should not be dismissed, denied, or otherwise adversely affected on account of such violation

Rule making in Indiana

- The Indiana Administrative Orders and Procedures Act defines rule as the whole or any part of an agency statement or general applicability that 1. has or is designed to have the effect of law 2. implements, interprets, or prescribes law or policy 3. implements, interprets or prescribe the organization, procedure, or practice requirements of an agency - Administrative bodies in Indiana may prescribe regulations to facilitate the administration of legislative policy

Indiana Statutes

- The Indiana Administrative Rules and Procedure Act governs most state administrative procedural law, including the procurement of rules - The Indiana Orders and Procedures Act governs adjudicative acts by state agencies. Due Process principles are codified in this act - Indiana's Open Door Law establishes regulation and requirements for open meetings - Indiana's Open Records Act codifies the state's public policy that all persons are entitled to full and complete information regarding the affairs of government

Ripeness

- The doctrine of ripeness requires that courts only review matters that have sufficiently matured - The U.S. Supreme Court has developed a two-part test to determine fi a matter is ripe: 1. whether the issue is fit for judicial resolution 2. whether withholding judicial review will impose a hardship

Agency Access to Information

- The government has three basic methods to seek information from the public 1. reporting requirements 2. inspections 3. subpoenas - The use of each method must be authorized by law, and each method is contained by law

Obtaining Information by and from the Agency

- The power of an agency to collect information is generally granted by its enabling statute, and limited by the Fourth and Fifth Amendments - Agencies must also provide certain information to the public, as required by the APA and other federal and state statutes

Review

- To qualify for review of an order, the petitioner must submit a petition in writing which demonstrates that he 1. is a person to whom the order is specifically directed 2. is adversely affected by the order 3. is entitled to review under law - In most cases, petitions must be filed within 15 days of receipt of notice of the agency action

Judicial Review Generally

- Usually authorized either specifically by Congress through the agency's enabling act, or constitutionally mandated where some specific infringement of a constitutional right has occurred - Alternatively, the APA provides generally for review. There is a presumption of review ability, except to the extent that a statute either precludes review or declares that a certain action is subject to that agency's discretion - An agency's decision not to prosecute or enforce a rule is under agency discretion; thus, these types of decisions are subject to a presumption of non-reviewability. This presumption can be rebutted where statutory language sets specific circumstances in which an agency must act or the agency has by rule committed to act

Decision

- Where an agency and court have concurrent jurisdiction, the doctrine of primary jurisdiction allows a court to defer to the agency's expertise as an initial matter prior to making its own determination - The decision must be based on the transcript of testimony and exhibits, together with all papers and requests filed in the proceeding - An agency can, however, take official notice of a material fact not appearing in the record, but a party must be given an opportunity to contest it - The final decision of an agency constitutes an order, which applies retrospectively to the parties involved in the matter - An administrative agency lacks jurisdiction to declare a law unconstitutional

Questions of Fact

1. Arbitrary, capricious, and abuse of discretion 2. unsupported by substantial evidence 3. de novo review

Sources of Administrative Law

1. Federal and state constitutions 2. the agency's enabling act 3. the federal Administrative Procedure Act and corresponding state acts 4. other statutory sources of procedural requirements 5. agency regulations 6. case law

Substantial Evidence Standard

A court will review the agency's findings to see whether, in light of the whole record and considering anything that would detract from the agency's findings, there is evidence that a reasonable mind would accept as adequate to support the agency's conclusion

Exception to Exhaustion

A party does not have to exhaust administrative remedies if he can show that exhaustion would be futile or if he is challenging the agency's power to act under the statutory scheme it is charged with administering

Subsequent Petition for Rehearing

A party's subsequent petition for rehearing may be granted if: 1. the party demonstrates that the party is not in default 2. newly discovered material evidence exists, and that evidence could not, by due diligence, have been discovered and produced in the hearing

Enabling Acts

Administrative agencies are empowered by Congress or state legislatures through an enabling act (or by the president through an executive order)

Federal Privacy Act

Allows members of the public to find out what personal information the government has collected about them and to keep some of this information private

Ultra Vires

Courts will hold unlawful any agency action that is in excess of its statutory jurisdiction, authority, or limitations

Modification of Final Order

Final Order may be modified before the earlier of: 1. 30 days after the order is served; or 2. assumption of jurisdiction over the order by another agency or court

Procedural Rules

Govern only the internal affairs of the agency

Standing

In order to seek judicial review, a party must have standing, meaning that the party must: 1. have an injury in fact that is concrete and particularized; 2. show a causal connection between the injury and the conduct complained of; and 3. show that the injury can likely be redressed by a judicial decision or order

Judicial Control of Executive Power

Judicial control comes in the form of judicial review. A court can control an agency's power by making certain that the agency: 1. has not acted beyond the scope of its authority 2. has followed the procedures it is required to follow by law 3. has not run afoul of the Constitution 4. has met some rationality standard as provided by the legislature

Procedural Review

The APA empowers courts to set aside agency actions, conclusions and findings which fail to observe procedures required by law

Government in the Sunshine Act

The federal Government in the Sunshine Act requires certain agencies to give notice of their meetings and that those meetings must be open to the public

Timing

The general rule is that a court will not hear a matter within an agency's power unless the agency process has been completed or exhausted and there is a final agency decision

Considerations when Determining Judicial Review

The burden to demonstrate that the agency action is invalid is on the person asserting the invalidity. The court will grant relief if it is shown that the agency action is: 1. arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law 2. contrary to a constitutional right, power, privilege, or immunity 3. in excess of statutory jurisdiction, authority, or limitations, or short of statutory right, 4. without observance of procedure required by law 5. unsupported by substantial evidence

Legislative Control of Executive Power

The legislature can regulate an agency's executive power in several ways, including: 1. limiting the scope of the enabling act, either in terms of the agency's jurisdiction or the powers the agency can exercise 2. limiting the appropriation of funds 3. monitoring agency conduct 4. enacting legislation to control agency action

Executive Orders

The president can also issue executive orders pertaining to agencies when he has inherent constitutional authority, has been authorized by Congress, or in situations where the scope of the president's authority is unclear, but Congress has not acted to preclude the exercise of such power

Freedom of Information Act

Under the federal Freedom of Information Act, a person has an enforceable right to obtain access to federal agency records, except to the extent that such records (or portions of them) are protected from public disclosure by certain exemptions or by a special law enforcement record exclusion

Stare Decisis

Where a court has reached the statutory interpretation question prior to an agency interpretation entitled to the Chevron framework, the Chevron framework will still apply, and reasonable agency interpretation must be accepted by the court, as long as the prior judicial interpretation did not interpret the statute as unambiguous