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Chapter 3: Due Process of Law


Introduction

Both the United States and New York Constitutions guarantee that no person shall be deprived of "life, liberty or property, without due process of law." The concept of due process imposes a fundamental obligation upon all organs of government, including state agencies. At its base, due process means that no person can be subject to an individualized proceeding in which he or she stands to lose one of the protected interests – in the context of administrative law, either property or liberty – without sufficient procedures to ensure that the governmental action is fundamentally fair.

Of course, these are not self-defining terms. The notions of what is an individualized proceeding, what are protected liberty and property interests, and what constitutes acceptably fair procedures have all been the subject of elaborate judicial interpretation. Because of their great importance in agency adjudication, they are covered in detail here.

Individualized Proceedings

Procedural due process becomes a governmental obligation only in cases in which the government makes an individualized determination towards a small number of persons or entities. Across-the-board, generalized policy decisions do not implicate a right to procedural due process, though such actions may implicate other rights.

Two early United States Supreme Court cases illustrate this distinction nicely. In Londoner v. Denver, [210 US 373 (1908)], the plaintiff was a Denver property owner. A statute allowed the creation of special assessment districts for street repairs, with the total cost of the work to be divided among the property owners, presumably in relation to the benefit to them. Londoner, complaining that his assessment did not accurately reflect the benefit to his parcel, sought a hearing before Denver City Council, but was rebuffed. The United States Supreme Court held that Londoner had been deprived of his due process rights.

In Bi-Metallic Investment Co. v. State Board of Equalization, [239 US 441 (1915)], another Denver property owner–the Bi-Metallic Co.–challenged an order of the State Board of Equalization effectively increasing the valuation of all Denver property by forty percent. The Bi-Metallic Co. requested a hearing and, like Londoner, was rebuffed. This time, however, the United States Supreme Court held that no hearing was constitutionally required.

Both cases involved Denver landowners complaining that their real property taxes or assessments were too high, yet only Londoner had a constitutional right to a hearing. Why? The Supreme Court's answer to this riddle was that only Londoner was the target of an individualized governmental decision; only Londoner could have offered up particularized facts relative to his situation. The Bi-Metallic Co. was understandably unhappy, but its position was no different from any other Denver landowner. A hearing involving Bi-Metallic would have brought forth nothing other than generalized grievances shared by a huge number of other persons and entities.

The protection, then, for persons and entities like the Bi-Metallic Co. is the political process. Unpopular, across-the-board decisions are likely to have negative political consequences. But offering an individual hearing to everyone so affected would bring governmental action to a standstill.

Often these individualized determinations are referred to as "quasi-judicial" to contrast them with "quasi-legislative", across-the-board determinations. Quasi-judicial proceedings involve the determination of adjudicative facts, while quasi-legislative proceedings involve the determination of legislative facts and matters of broad policy. Professor K.C. Davis, undoubtedly the most famous writer on administrative law, explained the distinction as follows:

[Adjudicative facts] are intrinsically the kind of facts that ordinarily ought not be determined without giving the parties a chance to know and to meet any evidence that may be unfavorable to them, that is, without providing the parties an opportunity for trial. The reason is that the parties know more about the facts concerning themselves and their activities than anyone else is likely to know, and the parties are therefore in an especially good position to rebut or explain evidence that bears upon adjudicative facts. Because the parties may often have little or nothing to contribute to the development of legislative facts, the method of trial often is not required for the determination of disputed issues about legislative facts. 2 K.C. Davis, Administrative Law Treatise 412-13 (2d ed. 1979).

This distinction closely tracks the division between Articles 2 and 3 of SAPA. [See, Chapter 1, supra, for a discussion]. Article 2 is the portion of SAPA that relates to rulemaking proceedings; Article 3 is the portion that relates to adjudicatory proceedings. Adjudicatory proceedings, which involve specific named parties and a particular determination of their rights, are individualized determinations for due process purposes. Rulemakings, on the other hand, usually involve the setting of a standard applicable to a large number of persons or entities, and therefore such proceedings are almost always generalized, non-individualized proceedings that do not trigger a procedural due process inquiry. The one exception is that very narrow, targeted rulemakings which directly affect only a small group – as can occur in ratemakings and similar proceedings – can be treated as individualized proceedings that trigger a procedural due process inquiry. [See, ICC v. Louisville & Nashville RR. Co., 227 US 88 (1913)(applying due process principles to a ratemaking proceeding)].

Property Interests

Due process does not protect individuals from all conceivable negative governmental actions. Rather, it protects against deprivations of life, liberty and property. In the administrative context the two important protected interests are property and liberty.

"Property" in the due process sense has both a traditional and non-traditional usage. In the traditional sense property encompasses well-defined categories of wealth such as money, tangible personal property, real estate and so on. Thus, for example, if an agency is bringing an enforcement proceeding seeking a monetary penalty, the private party indisputably has a property interest at stake which implicates due process principles.

It is the non-traditional sense of the word "property" that calls for closer examination. A large number of persons have or seek relationships with the government that are valuable to them. For example, government employees, holders of government licenses, applicants for and current recipients of social welfare benefits all suffer from a loss of their relationship with the government. The critical question is whether the loss of such a relationship constitutes a deprivation of a property interest for due process purposes.

Once again, two United States Supreme Court cases illustrate the point. In Board of Regents v. Roth, [408 US 564 (1972)], the plaintiff Roth was an untenured professor at a public university in Wisconsin. Without explanation, Roth's contract was not renewed for the following year. Roth sued, claiming that the failure to provide him with a hearing before deciding to cease his employment constituted a due process violation. The Supreme Court ruled that Roth had no property interest. While most untenured professors were renewed, Roth could point to no state law entitlement to continued employment because he was expressly made a year-to-year employee. In the course of rejecting Roth's arguments, the Supreme Court offered the following definition of property:

To have a property interest in a benefit, a person clearly must have more than an abstract need or desire for it. He must have more than a unilateral expectation of it. He must, instead, have a legitimate claim of entitlement to it. . . . [Roth, 408 US at 577].

The same day as Roth, the Supreme Court decided Perry v. Sindermann. [408 US 593 (1972)]. Perry, like Roth, involved a claim brought by a public university professor who had lost his employment. The Perry plaintiff, like Roth, was not the beneficiary of any formal tenure system. In Perry, however, the Court held that the professor might have a property interest. Unlike Roth, the Perry plaintiff had produced university handbooks and other official publications that arguably created an entitlement to continued employment during satisfactory performance.

Roth and Perry show that the question of whether the private party has a property interest can turn on very narrow factual distinctions. Property interests can come from a large number of sources, including statutes, regulations, agency handbooks and memoranda, and other official pronouncements. If those official statements create enforceable standards that guide the agency's discretion, then the private party has a property interest that can trigger due process rights. Because this can be a close and difficult question, ALJs and other agency employees are safest when they assume that due process principles do, in fact, apply to the proceeding before them. By treating a proceeding as one in which due process principles apply, the agency can help diminish the risk that a reviewing court will later overturn the outcome.

Liberty Interests

Liberty interests, like property interests, can be divided into two types. One kind is fundamental liberty interests. Fundamental liberty interests are those that are sufficiently well-recognized that they are protected regardless of how they are defined by state law. Free speech, voting, privacy and other interests that are protected explicitly or implicitly by the Constitution thus trigger a hearing requirement. Fundamental liberty interests also include significant losses of "liberty" as that term is commonly understood. Thus, for instance, a person in the general citizenry could not be committed to a mental hospital against his or her will without some sort of hearing to determine whether he or she meets the standards for commitment.

The other type is non-fundamental – or, as they are sometimes called, "state-created" – liberty interests. These liberty interests take their definition from state law. In this regard, non-fundamental liberty interests closely resemble property interests. In order for a person to successfully assert that he has a non-fundamental liberty interest, he or she must be able to point to some statute, regulation, contract or other source of law that creates an entitlement. Non-fundamental liberty interests differ from property interests only in that liberty interests lack a clear monetary value, while property interests have a clear monetary value.

One context in which claims of liberty interests are often raised is prison. Inmates – pointing to prison regulations, handbooks and the like – regularly argue that a loss of a privilege is a liberty deprivation that triggers a due process right to a hearing. In Sandin v. Conner, [515 US 472 (1995)], however, the United States Supreme Court ruled that an inmate can successfully raise such a due process claim only if he or she can show that the loss of the privilege is an "atypical and significant hardship." In the Sandin case, the Supreme Court held that an inmate's transfer to disciplinary segregation was not such a hardship and that the inmate had not been deprived of due process when the prison transferred him without first conducting a hearing.

Another special context in which liberty interests are raised in administrative matters is reputational injuries. The United States Supreme Court has held that a person does not have a liberty interest in his or her reputation as such. But, an injury to reputation plus some other significant negative consequence is a loss of liberty that triggers due process. Often, this is referred to as the "stigma plus" test: if some governmental action causes a person stigma plus some other negative consequence, that person has suffered a deprivation of liberty.

For example, in Miller v. DeBuono, [90 NY2d 783 (1997)], a nurse's aide was accused of hitting one of her patients. Under state law, her name was to be placed on a registry maintained by a state agency for the purpose of identifying abusers. The New York Court of Appeals held that the aide had a liberty interest at stake. Placement of her name in the registry called into question her reputation plus it had the effect of severely limiting her employment opportunities, as the registry was publicly-available. Because she had a liberty interest at stake, her due process rights were triggered, and the court ruled that she should have received extensive procedural protections before being placed on the registry.

As with property interests, the question of whether a party has a liberty interest can turn on very narrow factual inquiries. In close cases it is probably best to assume that the private party has a liberty interest and thus that due process principles apply.

Required Procedures

Assuming there is individualized, governmental action at which a private party has a property or liberty interest at stake, the private party's right to "due process of law" is triggered. Of course, this is not a mechanical test, and contemporary notions of the amount of procedure required have evolved over time.

The most famous administrative due process case is the United States Supreme Court's opinion in Goldberg v. Kelly. [397 US 254 (1970)]. In that case, the Supreme Court ruled that the then-existing procedures for determining eligibility under the Aid to Families with Dependent Children program were inadequate, because those procedures gave the recipient an insufficient opportunity to contest the reasons for being removed from the eligible list. In ruling that the then-existing procedures were inadequate, the Court held that the following procedures generally must be provided before the property or liberty interest is lost: timely and adequate notice of the hearing, confrontation and cross-examination of adverse witnesses, the right to make an oral presentation, the right to hire one's own counsel, an impartial decisionmaker, and a decision based entirely on the relevant legal rules and the evidence adduced at the hearing.

More recently, however, the Supreme Court has articulated a more flexible test. In Mathews v. Eldridge, [424 US 319 (1976)], the Supreme Court ruled that the required procedures must be evaluated by balancing three factors. Those factors are the value of the property or liberty interest, the cost to the government in providing more procedure, and the risk of an erroneous decision without more procedure. The more valuable the interest the more procedure is required; the more costly the additional procedure, the less likely it is to be constitutionally required; the greater the chance of an error without additional procedures, the more likely such procedures will be constitutionally required. In Mathews, the Supreme Court demonstrated that the requirement of a full hearing before the decision is itself flexible. In that case, the Court ruled that an oral hearing before deciding to deny disability benefits to the private party was not necessary, because the question of his disability was mostly a medical question that could be evaluated from x-rays and similar medical tests, making an oral hearing less crucial.

The Goldberg list of procedures is similar to the procedures required for adjudicatory proceedings under Article 3 of SAPA. [See, Chapter 1 for a discussion of "adjudicatory proceedings"]. Thus, if the matter is an adjudicatory proceeding under SAPA, careful compliance with SAPA and the agency's hearing regulations should avoid almost all due process problems. For administrative matters that are not adjudicatory proceedings, or otherwise not covered by SAPA, the Goldberg list is a good starting point for determining the procedures that the Constitution demands. Mathews, however, gives agencies and ALJs considerable flexibility in molding procedures to fit the circumstances, as long as the matter is decided in a fundamentally fair and impartial manner. For smaller matters, very informal hearings can suffice. For administrative matters in which much of the evidence is documentary or technical, written submissions can substitute for what otherwise might be lengthy oral hearings. As long as the procedures give all parties concerned a reasonable opportunity to present their case, and the decision is made in a reasoned, fair and impartial manner based upon what the decisionmaker learns at the hearing, due process is generally satisfied.

Specific Procedures

Some due process questions have recurred with enough frequency that they merit specific mention.

Notice

Notice to an affected party must provide that party with enough information to respond. Thus, very cryptic notices that provide only a vague sense of the nature of the matter are not sufficient. [See, e.g., Alvarado v. State of New York, 110 AD2d 583 (1st Dept.1985)(notice stating only that hearing would involve "charges that the gloves [of a boxer] were tampered with" is insufficient)]. An administrative notice, however, need not provide detailed information such as specific times and dates of allegedly important events. [See, e.g., Block v. Ambach, 73 NY2d 323 (1988)(administrative notice need not have same level of detail as a criminal indictment)].

Right to Counsel

SAPA § 501 generally requires that a private party be allowed to hire an attorney to represent him or her in agency proceedings. In most circumstances due process also provides a right to counsel. There are some circumstances, however, in which the party might not be afforded a right to counsel. For example, in student disciplinary matters, where providing counsel may be inconsistent with maintaining a non-adversarial approach, the private party need not be afforded a right to counsel. [See, e.g., Mary M. v. Clark, 100 AD2d 41 (3rd Dept. 1984)]. Such cases are the exception. In most circumstances counsel must be allowed, though it is the private party's obligation to pay his own lawyer.

Pre-Hearing Disclosure or Discovery

Parties often contend that due process requires pre-hearing disclosure or discovery. New York courts have routinely rejected this argument. [See, e.g., Sinha v. Ambach, 91 AD2d 703 (3rd Dept. 1982)]. SAPA § 305 allows agencies to adopt rules allowing for discovery, but unless the agency adopts such a rule, or some other statute requires pre-hearing discovery, parties have no such right. [See, McBarnette v. Sobol, 83 NY2d 333 (1994)(statute requires some disclosure); SAPA § 401 (some mandatory exchange of information on request in licensing matters); Heim v. Regan, 90 AD2d 656 (3rd Dept. 1982)(no discovery right in administrative matters unless agency hearing regulations provide for discovery)].

Cross-Examination

Cross-examination of adverse witnesses who appear is generally a due process right. [See, Hecht v. Monaghan, 307 NY 461 (1954)]. However, the right does not extend to repetitive or entirely collateral examinations of witnesses. [See, National Basketball Ass'n v. New York State Div. of Human Rights, 68 NY2d 644 (1986)]. Thus, an ALJ may cut off cross-examination that serves no truth-seeking function, but may not cut off cross-examination where doing so prejudices the rights of a party. In close cases, it is best to allow a party requesting cross-examination lest the denial become a significant issue on judicial review.

Official Notice

Parties generally have a due process right to have their matter decided on the evidence adduced at the administrative proceeding. If an ALJ intends to go outside the administrative record – as is permissible to take official notice of facts well known to the ALJ or within the agency's special expertise – the private party has a due process right to notice of this intention. Thus, failure to provide a private party with advance warning of an intention to go outside the record, and failure to provide an opportunity to rebut, is a due process violation. [See, e.g., Cohen v. Ambach, 112 AD2d 497 (3rd Dept. 1984)(failure to inform pharmacist that agency would take official notice of standards for advertising in the "public interest" requires reversal of penalty)].

Burden of Proof

The burden of proof is generally placed on the party initiating the proceeding. In the case of enforcement actions against a private party, the burden is on the agency; in matters in which the private party seeks a benefit, the burden is on the private party. SAPA § 306 requires agencies to apply a burden of proof of at least substantial evidence. The Court of Appeals has ruled in Miller v. DeBuono, [90 NY2d 783 (1997)], that a private party who stands to lose a substantial liberty interest has a due process right to a standard of proof no lower than preponderance of the evidence. Therefore, ALJs should initially place the burden of proof on the party initiating the proceeding. The party initiating the proceeding should prevail if the facts adduced at the hearing show that the initiating party's position is the more plausible one based upon the evidence.

Neutral Decisionmaker

Parties have a due process right to a neutral decisionmaker. Thus, an agency official or ALJ who has previously publicly expressed opinions relative to a matter before the agency cannot act as a decisionmaker on that matter. [See, 1616 Second Avenue Restaurant, Inc. v. New York State Liquor Auth.,75 NY2d 158 (1990)(statements in a legislative hearing by agency head require reversal of sanction against license holder)]. Agency officials who have personally participated in the development of a case against a party, or who have a significant personal stake in the outcome, are also generally prohibited from sitting in judgment on those matters. [See, General Motors Corp. v. Rosa, 82 NY2d 183 (1993)(former general counsel promoted to agency head could not review case prosecuted by her and an assistant)]. Substantial, off-the-record conversations by an ALJ or agency official about factual issues in a matter before the agency also preclude that ALJ or agency official from acting as a decisionmaker on that matter. [See, Signet Construction Corp. v. Goldin, 99 AD2d 431 (1st Dept. 1984)].

Delay

Delay between the time of the underlying incident and the date of the administrative hearing is generally not a violation of a party's due process rights. An agency does, however, have the duty to hold an administrative hearing reasonably promptly after the matter has been noticed. [See, Cortland Nursing Home v. Axelrod, 66 NY2d 169 (3rd Dept. 1985)]. A very lengthy delay, which is not attributable to the private party's own actions, can be a due process violation if it manifestly prejudices the private party's ability to present his case. [See, Sharma v. Sobol, 188 AD2d 833 (1992)].

Statement of Decision

A private party who loses before the agency has a due process right to a decision that explains the reasons for the decision. Thus, an ALJ's or agency's opinion must contain enough information to show the reasoning process for the result reached, and to allow a reviewing court to understand the basis for the decision. In very simple cases less explanation is required; in more complex ones a more detailed explanation is necessary. An agency opinion need not be the equivalent of a formal judicial opinion, but it does need to contain enough explanation to show how the result was reached from the evidence presented in the case. [See, Koelbl v. Whalen, 63 AD2d 408 (3rd Dept. 1978)]. Parties also have a right to an opinion that is consistent with past agency decisions, or explains the reasons for departing from precedent. An opinion that is inexplicably contrary to other agency decisions reached on similar facts is a due process violation. [See, Charles A. Field Delivery Service v. Roberts, 66 NY2d 516 (1985)].

 
 
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