Contested Cases

In the last panel, we discussed the quasi-legislative powers of administrative agencies, the power to make rules that govern our daily life. In this panel, we discuss the quasi-judicial powers of administrative agencies, the court-like power to adjudicate cases, to make decisions regarding individual disputes, to impose fines, to discipline, to make rulings about administrative cases.

Here are some examples of the adjudicative powers of administrative agencies. The Board of Accounting might suspend the license of an accountant because the accountant has violated rules of professional responsibility. The Environmental Protection Agency might issue a Cease and Desist Order to a contractor preventing the drainage of a wetland, or impose a civil penalty against that contractor for past violations. The Food and Drug Administration might seize misbranded or adulterated drug products or food. An important part of the practice of administrative law deals with the representation of clients to preserve their rights in adjudicative cases before administrative agencies.

The federal and state administrative procedure acts contain requirements for administrative law adjudicative cases. When a law grants adjudicative decision making authority to an administrative agency, it typically states whether that decision must be made as a Contested Case. If the contested case procedure applies, then the agency must apply the statutory requirements. If not, different standards will apply. For example, when a welfare recipient challenges denial of benefits, state law does not require a contested case proceeding. But when the Gambling Control Board attempts to take a regulated charity or distributor's license for gaming violations, a contested case must be held.

A contested case is typically initiated by issuance of an agency proposal to take some form of action respecting an individual or company. The agency issues a notice of intent to take action--suspend a license, issue a penalty, seize contraband, revoke benefits--unless the proposed decision is challenged within a given amount of time. Sometimes the party affected by the proposed decision must offer evidence, must show cause, in order to obtain a right to a trial. For example, the Minnesota Pollution Control Agency does not conduct a trial type hearing unless an affected party offers sufficient credible evidence to show that there are disputed facts involved. The agency may issue its order without a trial-type hearing upon a finding that no facts are in dispute. The enabling statutes of other state and federal agencies may grant contested case hearings more readily.

The purpose of a contested case is to provide a neutral fact finding and fact gathering forum in which an Administrative Law Judge can listen to evidence and make recommendations as to how the agency should proceed. Decades ago, many contested cases were held by the Commissioner of a state agency himself. But the volume of such cases became overwhelming: it was impossible for high ranking agency officials to devote several days to hearing adjudicative cases involving a single individual. The Administrative Law Judge may thus be viewed as a person assigned by the agency chief to be her eyes and ears, to listen to the evidence, and then to write a report finding facts and making recommendations. In Minnesota and in the federal system, the corps of ALJ's consist of independent civil services employees who perform as ALJs as their profession.

What happens in a contested case? In Minnesota, contested cases are governed by Minnesota Rules Chapter 1400. Those rules provide the following basic procedure:

1. Case is commenced with a Notice and order for hearing.
2. Each party then files a notice of appearance within 20 days.
3. A pre-hearing conference is held.
4. A settlement conference may be held by an alternative judge upon request of any party.
5. Any means of discovery available pursuant to the Rules of Civil Procedure is allowed. If the party from whom discovery is sought objects to the discovery, the party seeking the discovery may bring a motion before the judge to obtain an order compelling discovery.
6. If the case is not settled, the Administrative Law Judge holds a trial type hearing, with relaxed rules of evidence. After the trial, the ALJ issues a report. Each party has an opportunity to challenge the ALJ's findings before the agency itself.

It is hard for most clients to understand, however, that the ALJ doesn't make the final decision. The final decision is rendered by the agency chief. For many administrative law litigants, this makes it seem as thought the very agency they are fighting against, gets the last word. Why hold a trial at all, if your opponent gets to decide?!!! We will say more about this question in the next panel.