1: Introduction to Administrative Law
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
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.
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)].
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.
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 §
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 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 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
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 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)].
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.
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.