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Formal
adjudication is a decisional procession involving an adversarial hearing mandated by a
statute. The focus here is on APA formal adjudication, but the organic statute of the agency
may prescribe the hearing requirements apart from the APA. This section focuses on formal
adjudication as distinguished from informal adjudication or other forms of agency action.
Formal adjudication usually affects individual rights, not group. It often has a retroactive
impact, rather than being prospective in impact, unlike rulemaking. |
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In
the formal adjudication, the ALJ will usually make the initial decision, which may then be
reviewed at the agency level. The agency heads have the full power to substitute their judgment
for that of the ALJ on all issues of law, fact, and credibility, with the possible exception of
demeanor credibility. |
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Where
a hearing on the record is required, as in formal adjudication, the credibility of witnesses
may be significant. Demeanor credibility determinations must be made by an observer. The
ALJ usually holds the hearing that creates the record and will be the observer. The agency
heads are limited in their review of demeanor credibility findings, however the agency has the
full power to draw its own inferences from the demeanor credibility findings of the ALJ.
Nondemeanor credibility as evidenced by the statements in the record can be determined as
easily by the agency heads as by the ALJ. |
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A
party generally has the right of either cross examination or rebuttal in a formal adjudication.
Since hearsay is admissible under the APA and is not subject to meaningful cross examination,
the party must frequently rely on rebuttal evidence. Where error is claimed based on the denial
of cross examination, the complaining party must prove that specific, not general prejudice
resulted from the denial. This will often be difficult because the party will have to demonstrate
that rebuttal was an inadequate substitute. |
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When
an agency decision must be based on a closed record, as required in formal
adjudication, the decider cannot be biased by off the record considerations. A claim of bias
might involve the combination of the functions of prior investigation and subsequent deciding.
All error must be shown with specificity. Absent the showing of substantial prejudice, this claim
of combination of function will be rejected by the reviewing court. If the prior investigation
can
be shown to have resulted in the use of nonrecord information in making the formal adjudication
decision, the court may find error. |
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The
agency decision to give formal adjudication notice of an enforcement action against an
individual or to not give notice is one of the most important decisions that an agency can make.
Statutes and courts generally permit the agency a broad realm of prosecutorial discretion in
making this decision to proceed or not proceed. |
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The
findings requirements are a critical statutory requirement element of the agency decision in
a formal adjudication. A variety of different findings are likely to be required, including a
finding
on jurisdiction, findings as to each element of each rule violation that is found, and findings of
fact adequate to support the original complaint. Findings are the explanation that reviewing
courts need in order to determine whether substantial evidence exists and whether various
elements of the adjudication order are adequately explained. Inadequate findings are a
common reason for remanding the agency order back to the agency. |
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The
full and fair hearing requirement may be the product of due process or the product of
statutory mandate. The basic requirement is that the record must be adequate for findings on
all required elements. While this is the duty of lawyers representing their clients in most cases,
where lawyers are not used, the duty of insuring a complete record may fall on the ALJ if the
unrepresented party does not fully meet their burden for a full and complete record. To meet
the full and fair hearing requirement, the ALJ may be required to ask questions or suggest lines
of questioning. The ALJ may have to impose the requirement or make the suggestion as to
what type of evidence is needed and where it might be found. In short, the ALJ may have to
take an active role in looking out for some of the interests of one of the unrepresented parties if
they cannot initially meet the full record of decisionmaking requirement. Later the ALJ must
revert to a neutral stance to make the initial decision. |
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The
general Morgan case requirement is that the responsible agency decider named in the
statute must make a personal decision in the final decision for the agency in formal adjudication.
The agency heads need not personally read the entire record nor write the entire final decision,
but must use their mental processes to some extent in applying the law to the facts and issues.
Paradoxically, the decider usually cannot be called into court to prove that this use of mental
processes actually occurred. |
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In
the formal adjudication, the agency order may impose a sanction on the offender. The
organic statute may give the agency discretion to mitigate the sanction upon application and
argument of the offender. Mitigation should be viewed as a discretionary matter with the
agency that must be based on a reasonable explanation of how the mitigation will help to
achieve the goals of the statute. Mitigation is not an arbitrary power of the agency head. |
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An
order is the result of a formal adjudication, as defined in most APAs. The order usually
consists of findings of fact and conclusions of law, with detailed reasons and analysis. The
order of the agency may look much like an appellate court decision. |
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The
agency decider may be able to use outside assistance in reaching the final decision. These
aides may not make the actual decision, nor are they permitted to add facts to the record in
giving their advice. Some statutes may specifically provide for this type of assistance, others
may be silent. See also, agency head, exparte contact; adjudication, formal, record. |
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The
prehearing conference is usually held prior to a complex formal adjudicatory hearing. Large
agencies frequently have promulgated elaborate procedural rules detailing the nature of the
prehearing conference. Like its trial counterpart, the prehearing conference will often result
in
binding agreements concerning the introduction of evidence, the use of witnesses, and may limit
the issues. It is also the last time the parties may make a final effort to settle the issues
without
having go into a formal adjudication. The prehearing conference will often conclude with a
written agreement about the matters that could be resolved and this agreement will be binding
on the parties. |
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A
common procedural path in adjudication involves the following steps: investigation to
determine any rule or statutory violations, notice, hearing at ALJ level, ALJ decision,
opportunity to comment at agency level, agency review and decision, demonstration of
eligibility for judicial review, judicial review. |
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In
formal adjudication, the record is the proceedings of the hearing, including prehearing
conference agreements, official notice, and the decision by the ALJ. The closed record is the
sole source for fact finding at the agency level and the sole source for application of the
substantial evidence test in judicial review. |
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The
named parties to a formal adjudication generally have the right to be represented by hired
counsel. There is no right to appointed counsel in the administrative process except in a few
exceptional circumstances. |
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The
agency has great discretion in imposing a sanction on a party where a finding of violation of
a rule has resulted from the formal adjudication. The sanction must be one permitted by the
statute and it must be within the range identified in the statute. Consistency of application
of the
sanctions is not required. |
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The
scope of review of facts under an APA in a formal adjudication is usually the substantial
evidence test. On questions of law, the court may substitute its judgment. The scope of
review
at the judicial level must be distinguished from the agency authority to review the ALJ decision
and from the burden of proof at the agency hearing level. |
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1. Adjudication, Formal
