Adjudication (administrative state)
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Adjudication, in the context of administrative law, is defined by the Administrative Procedure Act as an "agency process for the formulation of an order." Adjudication proceedings include agency determinations outside of the rulemaking process that aim to resolve disputes between either agencies and private parties or between two private parties. The adjudication process results in the issuance of an adjudicative order, which serves to settle the dispute and, in some cases, may set agency policy.[1][2]
Background
The Administrative Procedure Act (APA) defines adjudication as an "agency process for the formulation of an order." The APA further defines an order as "the whole or a part of a final disposition, whether affirmative, negative, injunctive, or declaratory in form, of an agency in a matter other than rule making but including licensing." Adjudication, therefore, encompasses a broad swath of agency determinations that take place outside of the rulemaking process.[3]
Adjudication aims to resolve a dispute either between a federal agency and a private party or between two private parties. Individuals subject to adjudication proceedings may have appealed an agency decision, been found to be in violation of a law that the agency administers, or applied for licensure, accreditation, or other agency permissions. Formal adjudication proceedings are governed by the APA under U.S. Code § 554 and consist of a hearing followed by the issuance of an adjudicative order. Informal adjudication, which makes up nearly 90 percent of adjudication proceedings according to the American Bar Association, varies according to the agency-specific statute, but generally operates under more relaxed rules than formal adjudication. Both methods result in an adjudicative order, which serves to resolve the dispute and, in some cases, may set agency policy. According to the Administrative Conference of the United States, some agencies set policy through adjudication more often than rulemaking.[1][4][5]
Process
A federal agency embarks on adjudication proceedings by first determining that adjudication is in the public interest. The agency then files a notice against an individual that the agency observes to be in violation of a law that the agency administers. For example, the Consumer Financial Protection Bureau's (CFPB) website states that the agency may initiate adjudication proceedings "by filing a Notice of Charges alleging a violation of a consumer protection statute." Moreover, an individual may initiate the adjudication process by appealing an agency decision or by applying for licensure, accreditation, or other agency permissions. An individual receiving benefits from the Social Security Administration, for example, may appeal an agency decision that impacts their retirement, disability, or supplemental security income benefits.[6][7][8]
Adjudication may take place through formal or informal proceedings. Formal adjudication, which is governed by the Administrative Procedure Act (APA), functions in a manner similar to federal civil court proceedings. An administrative law judge (ALJ) presides over a hearing and issues an order based on the findings from the record. If the ALJ finds the individual to be at fault, the agency may issue sanctions or penalties. On the other hand, informal adjudication, according to the American Bar Association, consists of agency decision-making processes that are not clearly defined by the APA and may follow different formats depending on the specific statute that requires the proceedings. Under informal adjudication, a hearing may or may not be required.[8][9][10][5]
Formal adjudication
Formal adjudication occurs when a statute other than the APA requires the agency to conduct a hearing on the record, or in certain other specified circumstances. An administrative law judge (ALJ) presides over formal adjudication proceedings. The agency must keep a record of the adjudication proceedings, which serves as the basis for the agency's findings. In addition, the agency carries the burden of proof and its findings must have evidentiary support. Following the hearing, the ALJ issues an order based on the findings, which is subject to review by the head of the agency. If the order determines that the individual is at fault, the agency may issue sanctions or penalties.[8][11][10][12]
Informal adjudication
Informal adjudication makes up nearly 90 percent of all adjudication proceedings and is often applied to benefits-related decisions as well as cases concerning immigration, equal employment, government contracts, or security clearance issues. According to the American Bar Association, informal adjudication refers to agency decision-making proceedings that adhere to different requirements depending on the agency-specific statute that calls for the process to take place.[11][5]
The American Bar Association provides the following contexts for informal adjudication:
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Unlike formal adjudication, informal adjudication is not specifically defined under the APA. However, according to the U.S. Supreme Court's ruling in Pension Benefit Guaranty Corporation v. LTV Corporation, the APA outlines minimum standards for informal adjudication in U.S. Code § 555, such as the right to a copy of the transcript or record and the right to receive a decision in a reasonable amount of time. If a hearing is required, it may be presided over by either an administrative law judge (ALJ), an administrative judge (AJ), or another type of hearing examiner used by the agency. The hearing may operate without the requirement of a closed record and with fewer stipulations than formal proceedings, such as limited evidentiary requirements or permissible ex parte communications. If a hearing is not required, the adjudication process may operate in a manner similar to informal rulemaking, in which case the agency would notify the individual of the agency's proposed decision and allow for the individual to respond in the form of oral or written comments.[10][5][11][14][15]
Theory and practice
Adjudication as a form of rulemaking
According to the Administrative Conference of the United States, some agencies set policy through adjudication more often than rulemaking. In a 2000 article for Washingon and Lee Law Review, law professor William Araiza questioned whether setting policy through adjudication was appropriate when agencies have the explicit authority to establish policy through rulemaking:[4][16]
| “ | Clearly, when a court interprets tort law, or the Clean Air Act, or the Due Process Clause of the Constitution, it does not engage in a mechanical process of plugging a pre-existing meaning into a given set of facts, with no consideration of policy implications. But the judicial process still is constrained by the pre-existing law: prior precedent in the common-law context, the text and other interpretive clues in the statutory context, and a combination of those sources (and other limiting factors) in the constitutional context! By contrast, when agencies adjudicate they enjoy more or less free rein to adopt what they consider to be the best rule (as long, of course, as that rule is consistent with the statute?).
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Law professor William Mayton put forth a similar argument in a 1980 article for the Duke Law Journal:[17]
| “ | In addition to prescribing procedures for agency formulation of law and policy, Congress also imposed codification and publication requirements in order to make the substance of agency-developed law and policy more accessible and to create a greater consistency in agency application of this law and policy. The ad hoc development of standards by adjudication is inconsistent with these purposes. Thus, on this additional basis, adjudication is an improper substitute for rulemaking."[17][13] | ” |
Contrary to Araiza and Mayton's concerns about policy formation through adjudication, the United States Supreme Court allowed for the practice in its 1947 ruling for SEC v. Chenery Corporation. Araiza cited the following statement in Chenery:
| “ | Nevertheless, fifty years ago in SEC v. Chenery Corporation, the Supreme Court refused to scrutinize closely an agency's decision to impose a new policy-based rule through the vehicle of an adjudicatory proceeding. The Court's statement was clear: 'the choice made between proceeding by general rule or by individual, ad hoc litigation is one that lies primarily in the informed discretion of the administrative agency.' Chenery's statement remains definitive today."[16][13] | ” |
Due process and adjudication
- See also: Administrative law judge and Administrative judge
Paul Verkuil, former chairman of the Administrative Conference of the United States, in a 1992 presentation at a University of California, Los Angeles, Law School symposium, argued that administrative judges serve an important role in the informal adjudication process and cited the Supreme Court rulings in Wong Yang Sung v. McGrath and Goldberg v. Kelly to support his position:
| “ | It is fair to say that by the 1990s the Court has moved towards greater decisional freedom under the Due Process Clause. From its earlier position in Wong Yang Sung of equating due process to formal APA hearings, the Court has evolved from the Goldberg requirement of specifying procedures for due process to a world that can readily accept an informal process of infinite variety. In this environment the decider need not be APA-qualified, nor must the APA formal hearing process serve as a baseline. This informal process, which is not defined by the APA, remains an amorphous competing model.[15][13] | ” |
In a 2016 article for the Missouri Law Review, law professor Kent Barnett argued, however, that the status of administrative judges as agency employees, as opposed to the independent status of administrative law judges, leads to partiality in adjudication proceedings that violates due process. Barnett observed:
| “ | The two most relevant decisions concerning state judges – Tumey v. Ohio and Ward v. Village of Monroeville – are important because they reveal that pecuniary incentives (whether flowing directly to the adjudicator or a budget that the adjudicator oversees) create an unconstitutional appearance of partiality. Due process takes offense when a 'judge . . . has a direct, personal, substantial pecuniary interest in reaching a conclusion against [a party] in his case.'[10][13] | ” |
Noteworthy events
President Trump executive order aimed at agency adjudication procedural rights (2020)
President Donald Trump (R) on May 19 issued an executive order focused on ensuring fairness in agency adjudication and enforcement.
The order puts forth what it deems a set of "principles of fairness in administrative enforcement and adjudication" and directs agencies to comply with the principles where appropriate as part of their pandemic response efforts. The principles include broad standards of promptness, fairness, and transparency in adjudication and enforcement proceedings as well as more specific procedural due process protections, such as requiring that adjudication be free from government coercion and that agency adjudicators be independent of enforcement staff. These principles build on Trump’s October 2019 Executive Order 13892, which aimed to curb what the order referred to as administrative abuses by requiring agencies to provide the public with fair notice of regulations.
“[President Trump] knows that what will jump-start the economy is not Big Government, but the American people,” said White House Office of Information and Regulatory Affairs Administrator Paul Ray in The Washington Times. “That’s why this president is fighting the economic emergency by returning even more liberty to the people.”[18]
Some critics of the order expressed concern that agencies would respond by suspending regulatory enforcement altogether. “That’s the part that gives me the greatest concern, the idea of nonenforcement and telling agencies without any real basis or explanation that more lax enforcement will help us economically,” said Project on Government Oversight senior policy analyst Sean Moulton in The Hill.[19]
See also
- Rulemaking
- Securities and Exchange Commission v. Chenery Corporation
- Administrative law judge
- Administrative judge
- Administrative Conference of the United States
External links
Footnotes
- ↑ 1.0 1.1 Washington and Lee Law Review, "Agency Adjudication, the Importance of Facts, and the Limitations of Labels," March 1, 2000
- ↑ Administrative Conference of the United States, "Informal Agency Adjudication, Committee on Adjudication, Proposed Recommendation for Committee," October 20, 2016
- ↑ Legal Information Institute, "5 U.S. Code § 551 - Definitions," accessed September 19, 2017
- ↑ 4.0 4.1 Administrative Conference of the United States, "Sourcebook of United States Executive Agencies," May 2013
- ↑ 5.0 5.1 5.2 5.3 5.4 American Bar Association, "CHAPTER 9: INFORMAL ADJUDICATION," February 8, 2002
- ↑ Consumer Financial Protection Bureau, "Administrative adjudication proceedings," accessed September 20, 2017
- ↑ Social Security Administration, "Information About SSA's Office of Disability Adjudication and Review," accessed September 20, 2017
- ↑ 8.0 8.1 8.2 The Yale Law Journal, "A Note on Administrative Adjudication," March 1965
- ↑ Consumer Financial Protection Bureau, "Docket of the Office of Administrative Adjudication," accessed September 15, 2017
- ↑ 10.0 10.1 10.2 10.3 Missouri Law Review, "Why Bias Challenges to Administrative Adjudication Should Succeed ," accessed September 18, 2017
- ↑ 11.0 11.1 11.2 Asimow, M. (2003). A Guide to Federal Agency Adjudication. Chicago, IL: American Bar Association. (pages xiv-3)
- ↑ Louisiana State University, "Administrative Law Glossary," accessed September 20, 2017
- ↑ 13.0 13.1 13.2 13.3 13.4 13.5 Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
- ↑ Administrative Law Review, "SURVEY OF NON-ALJ HEARING PROGRAMS IN THE FEDERAL GOVERNMENT," Spring 1992
- ↑ 15.0 15.1 William & Mary Law School Scholarship Repository, "Reflections upon the Federal Administrative Judiciary," 1992
- ↑ 16.0 16.1 16.2 Washington and Lee Law Review, "Agency Adjudication, the Importance of Facts, and the Limitations of Labels," March 1, 2000
- ↑ 17.0 17.1 Duke Law Journal, "The Legislative Resolution of the Rulemaking Versus Adjudication Problem in Agency Lawmaking," 1980
- ↑ Washington Times, "Trump signs broad order to speed deregulation and relax red tape for economic recovery," May 19, 2020
- ↑ The Hill, "Trump anti-reg push likely to end up in court," May 25, 2020
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