link to previous section
link to next section
Search:
Keywords: Max Rows:
   

Chapter 1: Introduction to Administrative Law


Agency Functions

Administrative law is an often-misunderstood subject. Although frequently shrouded in a good deal of mystery, administrative law is simply that body of law that defines and describes the behavior of agencies. An important goal of this Manual is to explain the central principles of this body of law as they apply to New York State agencies.

Agencies are governmental entities which, although they affect the rights and duties of persons, are neither courts nor legislatures nor the executive. Agencies come in a huge array of sizes and shapes. Some have thousands of employees; others have much smaller numbers. They have names like "Department," "Board" or "Authority."

Agencies have widely differing missions, goals and organizations. They all share some common features, however. First, all are created by legislation. Every agency has some set of statutes, duly passed by the legislature, that defines its mission, organization and jurisdiction. Second, all agencies are shaped roughly like a pyramid, with some person or group of persons at the top; his, her or their immediate staff below; and then down through the ranks of their subordinates and other employees of the agency. Third, agencies share a unified mission which is defined by the legislation that creates the agency and is expressed in the most immediate sense by the person or persons who head the agency.

Agencies also challenge our notions about separated governmental authority. In a conventional "civics book" model of government, the legislature is responsible for making laws, the executive for enforcing them, and courts for interpreting them. While this is true as far as it goes, many agencies combine all of these functions (and more) into a single entity.

Agencies may also have heavy enforcement responsibilities. Agencies can investigate potential violations of the law within their jurisdiction. They may make use of a full range of investigative tools, including inspections, tests, recordkeeping and reporting requirements, and others. If agency personnel detect violations of the law, they may be able to take legal action in a manner parallel to that of a prosecutor.

Agencies may also be responsible for the development of legal standards much like legislation. These standards are known alternatively as rules or regulations. Using a formal process that requires publishing notice of the proposed rulemaking in The State Register, agencies – after taking public comment and following other legally-required steps – may adopt rules that must be filed with the Secretary of State, published in The State Register, and eventually assembled in the Official Compilation of Codes, Rules and Regulations of the State of New York. This latter publication is broken down into various volumes, and is often abbreviated "NYCRR." Agencies also make less formal and binding pronouncements in handbooks, memoranda, orders and other guidance documents.

Finally, agencies are responsible for conducting administrative adjudications. In terms of the impact upon the lives of the persons involved, administrative adjudication can be every bit as important, critical and profound as court adjudication. The grocer facing loss of a license to sell beer, the company faced with a potential fine for violating an applicable environmental standard, the disabled person attempting to obtain vocational services – each must appear before an agency in an administrative adjudication in which the stakes are personally quite high.

While administrative adjudication shares some important features with court adjudication, there are important differences as well. Court adjudication begins before a judge who is constitutionally independent from other branches of government. Administrative adjudication typically begins before an agency employee with the title of "Administrative Law Judge," "Hearing Officer," "Hearing Examiner" or something similar. Throughout this manual, we will use the term "Administrative Law Judge" – or its abbreviation of "ALJ" – to describe these agency employees who conduct administrative adjudications. While ALJs have a legal duty to consider impartially the merits of adjudications, they are not separated from the agency in the same way that judges are separated from the rest of government.

While judges in court adjudication hear a large variety of cases, ALJs consider a much narrower range of matters. This is, in large part, because the creation of an agency reflects a legislative judgment that enforcement and interpretation of the law in that field would benefit from technical expertise. Whether the field is health, environment, taxation, workers' compensation, rent control or some other field in which an agency has jurisdiction, these matters are committed to administrative – not court – adjudication precisely so that the matter can be determined by agency employees who are experts. ALJs, by hearing a relatively narrow range of cases, have an opportunity to become expert in a manner that judges hearing court adjudications cannot duplicate.

The relative lack of physical separation of ALJs from agencies also allows ALJs to take advantage of the technical expertise of other agency personnel. While ALJs, like courts, are generally not allowed to consult off-the-record about the specific facts of a case, they are entitled to get informal advice on matters of law and policy from other agency personnel, subject to the restriction that those other agency personnel not be the very personnel presenting the agency's case to the ALJ. Administrative law tolerates this sort of informal consultation because, again, agencies have expertise, and all facets of the agency's expertise should permeate all aspects of the agency's activities–including administrative adjudication.


Sources of Legal Obligations of Agencies

The Constitution

Agencies, of course, must follow the law; to the extent that agencies overstep legal boundaries, courts have the authority to set aside the agency action. There are many sources of legal obligations on agencies, some of which will be discussed in much more detail in subsequent chapters. But, by way of overview, there are three principal sources of legal restraints on agencies.

The most powerful–although the most general– limitations are set by the United States and the New York Constitutions. The Fourth Amendment to the United States Constitution, for instance, forbids "unreasonable" searches, and this amendment has been held by the United States Supreme Court to apply to agencies. [See Camara v. Municipal Court of San Francisco, 387 US 523 (1967); See v.City of Seattle, 387 US 541 (1967)].
From the standpoint of administrative adjudication, the most important constitutional provisions are those that require "due process of law." [U.S. Const. Amend. XIV; N.Y. Const. Art. I, § 6]. The idea of due process cannot, of course, be reduced to any exact formula. It does, however, usually require that the agency provide reasonable procedures before making a decision that is significantly adverse to a private party and in which the private party has a significant property right or liberty interest. Thus, for instance, an agency procedure that caused very grave harm to a party on the basis of very little proof, or allowed only a minimal opportunity for affected parties to participate, would violate due process. [See Goldberg v. Kelly, 397 US 254 (1970)(AFDC recipient has a due process right to make an oral presentation before termination of benefits); Miller v. DeBuono, 90 NY2d 783 (1997)(entry of a nurse's aide's name on registry of suspected patient abusers based solely on the existence of "some credible evidence" of abuse violates due process)].

The State Administrative Procedure Act

A second set of legal rules that apply to all agencies is statutory. The most significant subset of these statutes is the State Administrative Procedure Act (often abbreviated as "SAPA"), and for that reason we devote the most attention to it here. The original version of SAPA was enacted in 1975, and it is loosely modelled on the Federal Administrative Procedure Act (which was enacted originally in 1946) and the 1961 Model State Administrative Procedure Act. SAPA, though, is unique; no other state has an administrative procedure act exactly like it.

The fundamental idea of SAPA is to provide relative consistency and uniformity in agency processes. Agencies, of course, have very different missions and make very different sorts of decisions as among themselves. SAPA requires, however, that all covered agencies follow certain common procedures.

Article 1 of the State Administrative Procedure Act: Definitions

SAPA is divided into five articles. Article 1 sets out some general terminology for the Act, some of which is highly relevant for other articles of SAPA. One critical definition, contained in SAPA § 102(1), is the definition of the term "agency." This definition is critical because SAPA only applies to agencies. Governmental entities that do not fit within SAPA's definition of an agency are not subject to SAPA, though they may be subject to other procedural statutes. SAPA defines an agency as:

any department, board, bureau, commission, division, office, council, committee or officer of the state, or a public benefit corporation or public authority at least one of whose members is appointed by the governor, authorized by law to make rules or to make final decisions in adjudicatory proceedings but shall not include the governor, agencies in the legislative and judicial branches, agencies created by interstate compact or international agreement, the division of the military and naval affairs to the extent it exercises its responsibility for military and naval affairs, the division of state police, the identification and intelligence unit of the division of criminal justice services, the state insurance fund, the unemployment insurance appeals board, and except for the purposes of subdivision one of section two hundred two-d of this chapter, the workers' compensation board and except for article two of this chapter, the state division of parole and the department of correctional services. [See SAPA § 102(1)].

This definition tells us several important things about New York State agencies. First, assuming that it otherwise meets the definition, an agency's particular title does not matter. An "agency" in the SAPA sense can be called a board, a commission, a division, an authority or one of many other terms.

Second, in order to qualify as an "agency" in the SAPA sense, the governmental entity must act with the authority of the state. This means that it must either have one or more gubernatorial appointees at its head, or it must be authorized by statute to engage in one of the two characteristic activities of an agency: making administrative rules or deciding administrative adjudications. (Most agencies, in fact, meet all three criteria: they are headed by the Governor's appointees, they have the power to make rules and they engage in administrative adjudication.) Governmental entities created by local governments, such as a city or town agency, are not agencies in the SAPA sense because they do not get their power directly from the state. [See, e.g., Incorporated Village of Great Neck Plaza v. Nassau County Rent Guidelines Board, 69 AD2d 528 (2d Dep't 1979)(county rent control board not an agency in the SAPA sense)]. The definition also tells us that the Governor, the courts and the Legislature are not agencies.

Third, some important entities that would otherwise qualify as "agencies" are not covered by SAPA. For instance, the State Insurance Fund, the Workers' Compensation Board and the Unemployment Insurance Appeals Board are completely outside the scope of SAPA. Other entities, such as the Department of Corrections, are considered agencies under SAPA only to the extent that they make administrative rules; in their other functions – including administrative adjudication – they are exempt from SAPA. While these exemptions from SAPA are important, it is also critical to not lose sight of the fact that those entities excluded from SAPA's definition of an agency have a great deal in common with SAPA agencies. Even those state entities that are not covered by SAPA are still subject to the due process requirements mentioned above, the provisions on judicial review discussed below, and other statutes that govern proceedings before them. Workers' compensation and unemployment matters are exempted from SAPA largely because those proceedings are already subject to an extensive set of legally-required procedures that would make SAPA largely superfluous. [See, infra, Hearing Regulations at Appendix C]. Thus, even for those entities not directly covered by SAPA, a great deal can be learned by synthesizing the fundamental principles applicable to agencies.

Article 2 of the State Administrative Procedure Act: Rulemaking

Article 2 of SAPA governs the procedures by which agencies make administrative rules and regulations. Agency rulemaking can be distinguished from agency adjudication because the former involves the creation of standards that apply in the future to a class of persons or entities. [See, People v. Cull, 10 NY2d 123 (1961)]. Agency rules are often described as "quasi-legislative" pronouncements because they resemble statutes. Agency adjudication is often referred to as "quasi-judicial" because it involves individualized determinations of the legal rights of particular persons or entities. Thus, for example, an agency's determination that a particular person is disabled and meets the requirements for receiving vocational services is an administrative adjudication because that decision assesses the legal rights of that particular person. The criteria for qualifying as "disabled," however, might well come from an administrative rule, which is applicable to all persons claiming the right to such vocational services.

While the contents of particular administrative rules can be of great importance in administrative adjudications, the process for making them is not generally the concern of ALJs. In broad outline, the process for making administrative rules is more public and political than the process for administrative adjudication. Notice of proposed administrative rules generally must be published in The State Register, although there are important exceptions for emergency rules, as well as other kinds of pronouncements that resemble rules, but are merely interpretative or "general policy" statements. Publication of a proposed rule triggers a right of public comment: written comments are always acceptable; sometimes oral comments through public hearing are received as well. After the comment period closes, agencies can adopt final rules that must be filed with the Secretary of State, then published in The State Register and eventually compiled in the NYCRR. Agencies often must prepare ancillary documents in the course of rulemakings – regulatory impact statements, flexibility analyses and so on – and Governors have, from time to time, imposed by executive order other requirements on the rulemaking process.

Article 3 of the State Administrative Procedure Act: Adjudicatory Proceedings

Article 3 of SAPA is the article of the greatest importance for administrative adjudication. Article 3 covers all "adjudicatory proceedings" conducted by agencies covered by SAPA. An "adjudicatory proceeding" is defined by SAPA as:

any activity which is not a rule making proceeding or an employee disciplinary action before an agency, except an administrative tribunal created by statute to hear or determine allegations of traffic infractions which may also be heard in a court of appropriate jurisdiction, in which a determination of the legal rights, duties or privileges or named parties thereto is required by law to be made only on a record and after an opportunity for hearing. [See SAPA § 102(3)].

This definition tells us several important things about "adjudicatory proceedings." First, several kinds of proceedings are not covered. Rulemakings, which – as discussed above – are fundamentally different from administrative adjudications, are not subject to the procedures for adjudicatory proceedings. Also excluded are two types of proceedings that might otherwise fit within the definition: employee disciplinary actions and administrative determinations of traffic offenses.

Second, adjudicatory proceedings must involve a determination of the legal rights and duties of specific persons. This, of course, distinguishes adjudication from rulemaking. Rulemaking does not involve named parties – rather, it involves setting norms for entire classes of persons – and thus falls outside the scope of administrative adjudication.

Third, "adjudicatory proceedings" are those administrative adjudications that are "required by law to be made only on a record and after an opportunity for hearing." The idea of agency adjudications being "on a record" is an administrative law term of art. As we shall see, "on a record" proceedings involve the compilation of a record, but they also involve many other procedural formalities.

SAPA's provision that the adjudicatory proceedings are those in which an "on a record" hearing is "required by law" means that there must be some provision of law outside SAPA that requires the record hearing. A voluntary decision by an agency to provide a formal hearing does not mean that the proceeding is converted into an adjudicatory proceeding. Thus, in order for a proceeding to be an "adjudicatory proceeding" under SAPA, there must be some provision – almost always a statute – that requires a "hearing on a record" for that particular type of proceeding. A statute that merely requires an agency to hold a "hearing" or allow an "opportunity to be heard" does not call for an adjudicatory proceeding. [See Vector East Realty Corp. v. Abrams, 89 AD2d 453 (1st Dep't 1982)]. An exception exists for statutes that call for a "hearing" or an "opportunity to be heard" in connection with a license, permit or similar form of government permission; those statutes, as discussed below, are construed to require an adjudicatory proceeding. [See SAPA § 401].

If the proceeding meets SAPA's definition of an adjudicatory proceeding, then the procedures set forth in Article 3 apply. Section 301 requires reasonable notice to the affected parties and sets forth in considerable detail the contents of the notice. Section 302 requires the compilation of a complete record of all adjudicatory proceedings, including the recording of testimony either stenographically or electronically. Section 303 requires that adjudicatory proceedings be conducted either by the head (or one of the heads) of an agency or a properly designated hearing officer, mandates that the proceedings be conducted impartially and describes how the matter is to proceed if the person presiding is disqualified or cannot continue. Section 304 sets forth several significant powers of the person presiding, including the issuance of subpoenas. Section 305 allows agencies to adopt rules that govern pre-hearing disclosure of information. Section 306 sets forth the evidentiary standards to be followed in adjudicatory proceedings. Section 307 requires a written opinion in any adjudicatory proceeding decided adversely to a private party and also requires the agency to maintain a publicly-available index of final opinions.

Article 3 thus requires a fair degree of formality and deliberation in the course of an adjudicatory proceeding. Although adjudicatory proceedings are more streamlined than court adjudication, adjudicatory proceedings represent the zenith of procedural detail in New York State administrative law.

Article 4 of the State Administrative Procedure Act: Licensing

Article 4 consists only of Section 401, which applies solely to "licensing." SAPA defines licensing as "any agency activity respecting the grant, denial, renewal, revocation, suspension, annulment, withdrawal, recall, cancellation or amendment of a license." [See SAPA § 102(5)]. "License" in turn is "the whole or part of any agency permit, certificate, approval, registration, charter, or similar form of permission required by law."

Once again, the definitions are important. A license is any form of formal permission issued by a state agency. Its designation as a certificate, license, permit or other term is unimportant; all are "licenses" as far as SAPA is concerned. Licensing is any state agency activity that significantly affects a license.

SAPA Section 401 treats licensing matters essentially as adjudicatory proceedings, provided a statute requires a "hearing" or an "opportunity to be heard" on the matter. [See SAPA § 401(1)]. Thus, routine issuance of individual fishing licenses would not trigger SAPA section 401's requirements in the ordinary circumstance, but more significant kinds of permissions are accompanied by hearing requirements that do bring to bear SAPA's procedural requirements. In contrast to ordinary adjudicatory proceedings, licensing statutes need not specifically refer to a hearing "on a record"; a mere reference to a "hearing" or an "opportunity to be heard" is enough to trigger the procedural requirements of an adjudicatory proceeding in this context.

In addition to the Article 3 provisions that apply to adjudicatory proceedings, Section 401 contains three subdivisions that impose requirements applicable only in licensing matters. First, under subdivision 2, a license holder who makes a timely and sufficient application for a new license is ordinarily entitled to operate under the old license until the agency reaches a decision on the new application and the time for review of the agency's decision has expired. Subsection 3 gives the agency the power to summarily suspend a license in emergency circumstances. Subdivision 4 gives both the agency and the private party the right to make a demand for each others' documentary evidence intended to be introduced at the hearing on the matter.

Article 5 of the State Administrative Procedure Act: Right to Counsel

Article 5 is also comprised of a single section; section 501. Section 501 gives all persons appearing before agencies "the right to be accompanied, represented and advised by counsel." Of course, this does not ordinarily require the agency to provide counsel for persons who are not represented; it simply allows persons appearing before an agency to select and pay for their own counsel. Section 501 does not preclude agencies from allowing non-lawyer representatives to appear on behalf of parties.

Though Section 501 literally speaks of any agency proceeding, it has not been construed so broadly. In cases in which representation would be particularly inappropriate, courts have upheld agency decisions not to allow representation. [See, e.g., Mary M. v. Clark, 100 AD2d 41 (3d Dep't 1984)(no right of counsel at informal university disciplinary proceeding)].

Other Statutes

There are other procedural statutes that affect agency proceedings. Probably the most important of these is Article 78 of Civil Practice Law and Rules (abbreviated "CPLR"). Article 78 is a statute that allows affected parties to challenge agency actions by filing an action in New York State Supreme Court. In general, an affected party may seek judicial review under Article 78 only after the agency proceedings – including any appeals within the agency itself – are completed. Additionally, the party challenging the action must have some significant stake in the agency decision; a person who finds an agency action annoying, but is no more impacted by it than the general public, may not successfully seek judicial review of it. [See Mobil Oil. Co. v. Syracuse Indus. Development Agency, 76 NY2d 428, 559 NYS2d 947, 559 NE2d 641 (1990)].

In general, courts uphold agency decisions as long as they are reasonable. This does not necessarily mean that the agency must reach exactly the same result that the reviewing court would have reached had the matter first been presented to the court. Rather, courts will uphold agency decisions as long as they are factually and legally plausible. [See, Borchers, Patrick J. and David L. Markell, New York State Administrative Procedure and Practice, §8.5 (West 1995)].

As to factual determinations in adjudicatory proceedings, courts uphold agency determinations as long as there is "substantial evidence" to support the decision. Thus, for instance, if an agency decision is based on the testimony of a witness, courts will uphold the agency's factual findings even though there might have been a significant amount of contrary evidence and testimony introduced. [See Stork Restaurant v. Boland, 282 NY 256, 26 NE2d 247 (1940)].

As to legal determinations, courts usually uphold an agency's interpretation of the law as long as it is reasonable. This is particularly so when the agency interprets complex statutes and regulations within the agency's zone of expertise. [See, Borchers, Patrick J. and David L. Markell, New York State Administrative Procedure and Practice, §8.3 (West 1995)].

Other kinds of agency determinations – such as the appropriate penalty to be imposed if there is a violation – are set aside by reviewing courts only if the agency acts arbitrarily or capriciously, or abuses its discretion. In the context of imposing a penalty, courts often say that they will set aside a penalty only if they find it "shocking." [See, Pell v. Board of Education, 34 NY2d 222 (1974)]. Of course, court deference to the agency judgment brings with it a great responsibility on the part of ALJs and agencies to make the correct determination of matters before them; the agency determination is very likely to be the final word.

Other statutes affect agency procedures at least tangentially. The Freedom of Information Law and the Open Meetings Law impose some duties of openness on agencies, and these are discussed in much more detail in a later chapter. The Executive Law contains some statutes on the rulemaking process that largely duplicate those in SAPA Article 2. As a practical matter, however, the general statutes of the most procedural significance for agency adjudication are SAPA and Article 78 of the CPLR.

Agency Specific Statutes and Regulations

The third primary source of legal obligations on agencies is those statutes and regulations that apply to a specific agency. Agency specific statutes define the agency's jurisdiction, describe the legal duties of regulated parties and generally set the legal parameters for matters that come before ALJs and the agency. Agencies that conduct adjudicatory proceedings have hearing regulations that supplement SAPA's provisions. These regulations may cover such important matters as the availability of prehearing disclosure, the timing of notices, settlement procedures and others. Because these sources of law vary from agency to agency, detailed treatment of them is not possible in an introductory chapter, although a critical duty of any ALJ is to become familiar with, and stay current upon, these agency-specific sources of law.

 
 
link to previous section
link to next section


Manual Table of Contents
Go to Civil Service Home Page
Go to NYS Home Page