The Core Concepts of Administrative Law
Administrative law refers to regulations created by administrative agencies, which are government authorities devoted to the regulation of a specific function or set of functions. Administrative law is the body of law that governs the activities of administrative agencies, and these powers include rule-making, adjudication, or enforcement of a specific regulatory agenda.
Administrative law can also be thought of as a branch of public law. Public law is the portion of the law that governs relationships between individuals and the state, and between different government levels and agencies. It is essential to society because the whole function of administrative law is to ensure that government powers are allocated and exercised in a fair, reasonable, and efficient manner.
Those pursuing action under administrative law must keep in mind the differences in state, federal, and local laws. In a general sense, though, administrative law is all about the responsibilities of agencies—usually executive in nature—in the state, local, and federal authorities . Resolutions of administrative disputes can usually be found in administrative procedures in a given marketplace, such as energy, banking, or insurance.
In a free enterprise capitalist system, the demand for regulation in order to achieve goals of efficiency and economy is limitless. With commercial enterprise growing as a result of the industrial revolution, there came a need for regulation to promote a fair, free market. To prevent monopolies and the exploitation of consumers, lawmakers passed a number of acts to regulate trusted tycoons.
Outcomes of this legislative action eventually put the federal government at the forefront of the modern administrative system. The first federal administrative agency, the Interstate Commerce Commission, was created in 1887. Today, the federal government employs more than 300 federal administrative agencies.
Administrative law is the body of law governing the activities of government and the laws created by a government body created to enforce and regulate specific areas of society. Administrative law is vital because it creates the same equal opportunity for consumers that marketing and advertising does for companies.
Finding Opportunities for Attack
When faced with a proposed administrative action that stands to cause significant harm to your business, it is important to determine fairly early in the process whether or not there is a potential legal basis for challenging the agency’s actions.
Starting with the assumption that the agency has (or will) followed all procedural requirements in reaching its decision, common grounds for attack may include lack of jurisdiction, procedural irregularities, and abuse of discretion. An agency may have no jurisdiction at all to do what it is proposing to do, or its jurisdiction may be limited in some respect.
Even if the agency has jurisdiction, it may have failed to follow its own procedures (for instance when a hearing is required before an order can be issued and the agency did not conduct a hearing). The agency may even have failed to observe procedural requirements found in the statute under which it purports to be acting.
Abuse of discretion is a somewhat more difficult ground for attack. For an abuse of discretion to occur, there must be some legal error or the agency’s decision must be arbitrary and capricious. An arbitrary and capricious decision is one that is not based on relevant law or is lacking in justification (for instance a decision to fire an employee on the grounds that they are too tall, or to refuse to grant a permit due to the personality of the applicant). An abuse of discretion also occurs if the agency has failed to follow a law or rule applying to it.
Building the Attack Outline: The Vital Steps
The following are some of the steps that go into building an attack outline:
A. Introduction
- Identify The Law At Issue. The first thing you must do is identify which one of your statutes, rules, or regulations applies. This is not always the same as identifying the agency rule at issue. In a civil rights case, for example, a city ordinance could have been modeled after a state regulation that was preempted and has since been declared invalid. Just because the city has an ordinance, they may not actually be permitted to enforce it.
- Identify the Problem. Now that you have identified the statute, rule, or regulation, you need to determine what is the problem with the agency’s action. Again, the problem may be apparent. For example, the statute may have just been amended and the agency has combined old and new language or included language that was expressly removed by the legislature. If the problem is not apparent by reading the statute, rule, or regulation, you will need to research the agency’s decision to make sure they are properly interpreting the law.
- Find Relevant Cases. Unless you find a glaring error of law, you will need to analyze the agency’s action in light of any relevant cases. If there is controlling precedent, you almost certainly need to expand your base of research to include those cases. If you are citing a case, it is typically best to use the "head-note" and/or the "Syllabus of Head-notes" for the proposition rather than the language in the case. Courts and administrative bodies can be extremely nitpicky when it comes to how the law is cited.
- Identify Arguments. Best practices calls for you to offer three (3) legal reasons why the agency should have decided in your client’s favor. Solutions ABLA can help you identify these issues. The three (3) legal arguments comprise your legal claims. Some claims may be entirely factual in nature. Others may require a mixing of sufficient facts and law. Some issues lend themselves more to a position statement than a brief.
- Additional Research. For additional assistance in building the attack outline, read a few attack briefs. Make a list of your top three (3) before submitting your brief.
Judicial Review Attack Playbook
The power of judicial review can be an effective tool to attack an errant administrative decision. Because the courts have been given the power to review final decisions of administrative agencies, they also can revoke administrative decisions which do not meet the standards which must be met in order to support such decisions. The standards set out to support administrative decisions are often unknown or ignored.
The following is the process which must be followed in order for judicial review to be effective. First, it must be timely commenced, e.g., as a general rule, within 30 days – but you need to check. Second, it must be commenced in the right place, e.g., the appellate division in the state court system – but again, you need to check. Third, you must correctly style the parties, e.g., the agency as the respondent – again, you need to check. Fourth, you must properly serve the administrative record to the agency which issued the wrong decision – you got it right by now, right? If this process is not followed, there can be a problem.
But, if the process is followed correctly, and the administrative decision is right, then the agency wins. That is because the burden is on the party attacking the administrative decision to prove that it was wrong. The burden is a heavy one, and requires the aggrieved party to explain why the administrative decision is against the weight of the substantial evidence.
Unfortunately, practitioners these days have become so comfortable in the administrative hearing forum that their procedural a game suffers when they get to the judicial review level. In other words, because many practitioners have become comfortable with the administrative hearing procedures, they start to forget about the importance of proper judicial review procedures. For example, I have seen petitions for appellate review improperly served on both medical and scientific boards – why should that make a difference? Because those boards – waiting to give up jurisdiction, which they cannot do – essentially deny the right to judicial review by the aggrieved party, which is a violation of his or her due process rights. Yes, I have seen that happen.
As another example, I have seen petitions for appellate review served on the attorney general in the wrong place, i.e., in the wrong county – why should that make a difference? Well, if the attorney general does not receive service in the proper location, then the attorney general assigned to the case does not have the background to explain complex scientific issues associated with medical or scientific board matters – it is only the attorney general assigned to the case who can explain the complex nature of the science, medicine, statutes and regulations – otherwise the court could be making a decision without having the expert information or background that could lead to a correct finding.
There are many more examples of how judicial review can go awry, but even in the instances outlined above, the bad or incorrect administrative decisions can be carried over into the judicial review process without the court understanding the real issues at hand, and the mistakes that may have been made at the administrative level.
Because the burden is on the aggrieved party to prove that the bad or incorrect decision is against the weight of the substantial evidence, the only way to maintain the proper burden is for the aggrieved party to truly understand the ultimate issue of judicial review, which is what the proper legal standard should be applied to the evidence of record in the administrative hearing before the agency – i.e., how bad or incorrect the bad or incorrect decision really is under the standard which must be applied to such evidence.
Documenting your Attack
Gathering evidence and documentation to support an attack on an administrative decision should always be the first step. In fact, this process will frequently show you why you have no case. While that can be dispiriting – particularly when you have paid, or agreed to pay, a significant retainer – it is better than the alternative, where you incur additional legal fees and costs before the whole exercise results in the same conclusion.
There are two approaches to this process. There is the qualitative approach and the quantitative. The qualitative approach is well understood and recommended by all lawyers who have done more than one matter of this type, but few clients can afford the luxury of this type of research as it invariably involves extensive briefing of your lawyer, as well as of fee estimates for this work, almost always with dismaying results.
The quantitative approach involves a sharp lawyer who has read the source material before coming to the meeting, a law library, or a subscription to a service like WestlawNext Canada, and use of the rule concerto method of distillation of the information, following the method of matching the relevant facts from the particular file to the source authority in the law, and then matching that law with the facts .
General points – there are only a few. First, once you take a look at your file, and you see significant amounts of documentation, the cost of the qualitative approach outweighs the benefit, and you really should do what seems like an impossible task instead. If you have to sort through evidence before you can attack it, you should make a list of points of interest, and then do to them as Target stores do to my wife – go in and go right to the meat (or furniture), eschewing the fluff (and clothing, apparently).
Second, while I have never heard of a fellow lawyer doing it, and lawyers are forbidden from burning or shredding their work product under the Law Society rules, several of my clients have used a shredder.
Third, and this is non-negotiable for the qualitative method, do not copy every piece of paper before reading it. When I get a thick file as a client, I put the file down and go away to change my pants from the spots from when I thought "ugh, we have to read all of this?".
Fourth, and this is also non-negotiable for the qualitative method, while you would like to read the file orderly, if it is not in chronological order, turn the pile over, and start from scratch. Maybe it will help, maybe it won’t, but it will not deter the task unless you let it.
Case Studies of Successful Administrative Law Attacks
In 2010, the Ninth Circuit Court of Appeals dealt a significant blow to the Financial Crimes Enforcement Network by vacating part of a FinCEN ruling that had required depository and check cashing institutions to keep records of transactions above $1,000. The court found that the agency failed to consider less burdensome alternatives to mandatory reporting, a key step in the regulatory process. FinCEN has since proposed new regulations on transaction types covered by the original guidance.
More recently, in February 2013, the Fair Housing Defense Center successfully challenged the validity of HUD’s "disparate impact" regulation — used by HUD and private litigants to establish discrimination — based on conflicting findings of harm between the Final Rule and the Notice of Proposed Rulemaking and an absence of reliable evidence on the subject of race or sex discrimination. The case is pending in the U.S. District Court for the District of Columbia but serves as a reminder that late-breaking developments may prove fatal to rules long in the making.
Another recent incident before the Federal Energy Regulatory Commission (FERC) highlights the importance of extensive, robust notice. In 2012, FERC reversed a decision it had made on August 10, 2010, to accept a market efficiency project the agency had completed an intervenor analysis on September 9, 2010. The decision came despite the fact that no actual changes had been made to the relevant notice science or legislative history and that there was an inadequacy in the way FERC conducted prior determinations.
Perhaps the most famous recent example of administrative law being attacked comes from the National Labor Relations Board (NLRB). After its controversial "ambush elections" rule (which shortened the time employers have to inform workers of Union representation until after the Secretary of Labor had approved it) was issued, it was challenged more than 50 times in courtrooms across the country. The challenge resulted in a holding against the NLRB-Screen Actors Guild decision, in which the D.C. Superior Court ruled against the NLRB.
Administrative Law Hot Spots to Avoid
Mistakes can be devastating to administrative law petitioners. This section lists some of the most important pitfalls to avoid.
Courts won’t hear complaints about mistakes in the administrative hearing. The court doesn’t review the merits of administrative hearing decisions. Don’t use the appeal to challenge the ALJ’s evidentiary rulings. Even if an adjudicator makes a grave mistake, you can’t argue that a mistake was made once the case gets to court. To put it simply, such mistakes are beyond appellate review.
An important administrative hearing principle is that objections must be expressed during the hearing – not after. If a mistake happens before or during an administrative hearing, you might lose your chance to object if you remain quiet. Make sure that you raise objections to your opponent every single time you notice an issue, no matter how small it might seem.
If the judge commits a severe or blatant error, you might be able to argue that the ALJ’s mistake violated your rights. When you make such an argument , the judge’s behavior is treated like legislative acts by administrative agencies. Legislative acts are always subject to review by a separate department or agency. If you want to request review, file the petition at either of the following: Do not plead your case as if the superior court of California can just overrule the administrative law judge’s decision. Don’t simply submit pages and pages of facts in case your errors escape the judge’s eyes. During the hearing, stay on point. Be concise and focused in your examination of the witnesses.
An administrative judge’s decision can only be overturned on review if she had no evidence or reasonable grounds on which to base the decision. For example, the judge may have relied on a document that was not authenticated during the hearing. Or, the judge may have excluded evidence that you successfully submitted. There may also be a problem with the question posed to the judge. The question should not ask that the judge evaluate the ALJ’s entire decision. Rather, the question should ask whether the ALJ could have rationally reached her conclusion on the evidence before her.