Original Author: Tim Muck<\/p>\n
Revised in 2014 by Patricia Winget<\/a><\/p>\n Download a PDF of Chapter 14<\/a><\/p>\n Chapter Contents<\/p>\n The Administrative Procedure Act (APA) provides that all parties adversely affected by a report of an administrative law judge (ALJ) may \u201cfile exceptions and present argument to a majority of the officials who are to render the decision.\u201d[1]<\/a><\/sup> The agency cannot make its final decision until the ALJ’s report has been made available to the parties for ten days and an opportunity to file exceptions and to present argument has been afforded the parties.[2]<\/a><\/sup> An agency\u2019s failure to respond to a request for an opportunity to file exceptions and present argument may violate due process.[3]<\/a><\/sup> Individual agencies\u2019 procedural rules and statutes may contain additional procedures and requirements for filing exceptions and presenting argument.[4]<\/a><\/sup><\/p>\n The APA does not specify that oral argument to the decision makers is required. Since courts, particularly appellate courts, often decide cases without oral argument, it must be assumed that no oral argument is constitutionally required. Either written or oral argument satisfies due process.[5]<\/a><\/sup> The contested case rules of individual agencies may provide for oral argument,[6]<\/a><\/sup> or the agency may exercise its discretion to allow oral argument in particular cases. Failure by agency staff to file exceptions to the recommended decision of the ALJ does not prevent the agency from issuing findings different than those contained in the recommended decision.[7]<\/a><\/sup> A party\u2019s failure to object to an ALJ\u2019s discovery ruling in exceptions does not preclude that party from raising the discovery issue on judicial review.[8]<\/a><\/sup><\/p>\n When the ALJ issues his or her recommended decision,[9]<\/a><\/sup> the ALJ certifies the official record to the agency.[10]<\/a><\/sup> Upon receipt of the record, the agency conducts its own quasi-judicial determination of the contested case. In reaching its decision, the agency must rely solely on the record. Both statute[11]<\/a><\/sup> and due process[12]<\/a><\/sup> require that the agency decisionmaker consider only factual information or evidence that is part of the record.<\/p>\n Consistent with this requirement, decisionmakers may not decide cases on the basis of information acquired from ex parte contacts. Due process, in particular, generally forbids such contacts as inconsistent with the fundamental premises inherent in our concept of adversary hearings.[13]<\/a><\/sup> Ex parte contacts with an agency decision maker may be regarded as fraud on the agency.[14]<\/a><\/sup> But not all such contacts result in a due process violation.[15]<\/a><\/sup> The issue is whether the contact has created a risk of actual bias.<\/a>[16]<\/a><\/sup> An ex parte contact has been found to not violate due process where those objecting to the contact had the opportunity to confront, cross-examine, or argue concerning the information received by the adjudicator in the contact.[17]<\/a><\/sup> A clandestine ex parte contact not made part of the record would afford the objector no such opportunity.[18]<\/a><\/sup><\/p>\n The agency can take notice of facts of which judicial notice could be taken and also of general, technical, and scientific facts within its specialized knowledge, provided that before or during the hearing, parties have been given notice and an opportunity to contest any such facts.[19]<\/a><\/sup> In evaluating the evidence in the record, however, the agency may utilize its experience, technical competence, and specialized knowledge.[20]<\/a><\/sup><\/p>\n The ALJ’s report is not ordinarily binding on the agency.[21]<\/a><\/sup> It is, however, entitled to some credence. Determinations of the credibility of witnesses by the ALJ are, for example, entitled to some weight.[22]<\/a><\/sup> On the other hand, inferences and conclusions drawn from the facts by the ALJ may be given less weight.[23]<\/a><\/sup> Moreover, it is within the particular expertise of the agency to evaluate the weight to be given expert testimony.[24]<\/a><\/sup> An agency might, for example, focus on certain witnesses\u2019 testimony, and give one witness\u2019s testimony more weight.[25]<\/a><\/sup> In fact, the agency decision maker owes no deference to the agency\u2019s own expert witnesses.[26]<\/a><\/sup> While the ALJ’s report is part of the record for the agency’s consideration,[27]<\/a><\/sup> it is only one part of the record and is usually only a recommendation to the agency.[28]<\/a><\/sup> Agency officials render the final decision under the APA.[29]<\/a><\/sup> The agency must conduct its own review of the record and reach its own independent determination of all issues, whether legal or factual. It may not rubber-stamp the findings and conclusion of the ALJ.[30]<\/a><\/sup><\/p>\n The agency may make its own findings differing from those of the ALJ as long as the agency’s findings are supported by substantial evidence in the record. It is not restricted to reviewing the findings of the ALJ and changing them only when they are not supported by substantial evidence.[31]<\/a><\/sup> In addition, an agency is not bound to adopt stipulations of fact and may look to other evidence in the record.[32]<\/a><\/sup> An agency, however, may not base its decision on evidence outside the record even where that evidence was part of the record in a previous contested case.[33]<\/a><\/sup><\/p>\n Since 2000, the APA has required an agency that rejects or modifies a finding of fact, conclusion, or recommendation of an ALJ to state the reasons for each rejection or modification.[34]<\/a><\/sup> Before this amendment, case law had encouraged an agency to state its reasons for changing an ALJ recommended decision. If the agency rejects an ALJ’s recommendations, the \u201cbetter practice\u201d is for the agency to articulate its reasons for doing so.[35]<\/a><\/sup> An agency’s rejection of an ALJ’s findings, or its significant departure from them, without any comment or explanation suggests that the agency exercised its will rather than its judgment.[36]<\/a><\/sup><\/p>\n What constitutes a review of the record by the agency adequate to ensure that the agency is deciding independently and is not rubber-stamping the report of the ALJ is determined on a case-by-case basis. A ten-hour review by an agency head of a voluminous record, in which the agency head (1) reviewed the entire transcript, reading verbatim the areas of testimony he felt were of substance or in dispute, (2) examined every exhibit, and (3) received a four- or five-hour briefing from his staff reviewing the evidence and the arguments of the parties, has been held sufficient.[37]<\/a><\/sup> Where two of three decision makers acting as a commission had read the entire record before the hearing examiner and the third had read one-half of the record and all had considered the written and oral objections of the parties before decision, the review of the record was sufficient.[38]<\/a><\/sup> And where all of the agency decision makers had heard oral arguments, read briefs and appendices and the recommended decision of the ALJ but only one member and the advising assistant attorney general had read the whole transcript, the review of the record was consistent with due process.[39]<\/a><\/sup><\/p>\n An agency decision maker may consult agency staff in arriving at a decision.[40]<\/a><\/sup> Due process may, however, prevent the decision maker from consulting an agency staff member involved in the investigation of the case if, under the circumstances, the consultation would result in biasing the decision maker.[41]<\/a><\/sup> Statutes governing the health-related and non-health-related licensing boards prevent a board member consulted during an investigation from voting on the decision in the case but allow the member to participate at the hearing.[42]<\/a><\/sup> The Minnesota Court of Appeals has commented that review of the agency’s draft order before issuance by the attorney who represented the agency in the hearing as an advocate is objectionable, as it creates an appearance of possible prejudice and a risk of biasing the agency.[43]<\/a><\/sup><\/p>\n If the agency decision maker is a group of persons, such as a board or commission, the Minnesota open meeting law[44]<\/a><\/sup> may sometimes apply. The open meeting law does not, however, require that decision makers who have independently reviewed the record and deliberated individually have a collegial discussion.[45]<\/a><\/sup> The individuals need not orally discuss in public a decision on which they have reached independent judgments.[46]<\/a><\/sup><\/p>\n The agency’s final decision must be in writing.[47]<\/a><\/sup> The APA requires that it contain findings of fact and conclusions on all material issues.[48]<\/a><\/sup> Whether a particular fact is so material to the proceeding as to require a finding will likely be judged by whether a court could, without that finding, conduct a judicial review of the decision.[49]<\/a><\/sup> The agency should state with clarity and completeness the facts and conclusions essential to its decision so that the reviewing court can determine if the facts found justify the action taken by the agency.[50]<\/a><\/sup> For example, an agency’s findings consisting of a reference to certain pages in the transcript would be insufficient.[51]<\/a><\/sup> There is no hard-and-fast APA or due process rule concerning how detailed and particular findings should be.[52]<\/a><\/sup> There is rather a \u201czone of propriety\u201d between the extremes of mere conclusion and undue particularity.[53]<\/a><\/sup> Whether a particular set of findings are adequate will depend on whether they enable the court on review to ascertain the facts on which the agency made its decision.<\/p>\n The APA requires that the agency decision contain findings of fact and conclusions on all material issues[54]<\/a><\/sup> but does not require a memorandum, opinion, or other statement of the agency’s rationale in reaching its decision, or that the reasons or basis for the order be otherwise specified.[55]<\/a><\/sup> Due process does not require that the decision be accompanied by a written memorandum discussing each of the objections parties may have raised during the proceeding.[56]<\/a><\/sup> Nor does due process require the agency to discuss the weight given any part of the evidence.[57]<\/a><\/sup> The agency is not required to discuss the mental processes by which it reached its conclusion.[58]<\/a><\/sup> If there are no formal findings of fact and conclusions, due process may, at least in some circumstances, require a statement of reasons for the determination and the evidence relied on.[59]<\/a><\/sup> This assures that the decision is based on the record.[60]<\/a><\/sup><\/p>\n The APA specifies that if an agency does not modify or reject an ALJ\u2019s recommended decision within 90 days of the close of the record, then the ALJ\u2019s recommended decision becomes final.[61]<\/a><\/sup> The record closes upon the filing of exceptions to the ALJ report and the presentation of argument, or upon the expiration of the deadline for doing so.[62]<\/a><\/sup> Apart from the APA, the statutes relating to particular agencies may contain decision deadlines.[63]<\/a><\/sup><\/p>\n The agency must serve a copy of the agency’s decision and any order on each party and on the ALJ.[64]<\/a><\/sup> The agency order may include an award of costs against an unsuccessful contested case litigant in favor of the agency if authorized by statute.[65]<\/a><\/sup> Under a statute authorizing an agency to require a licensee to pay \u201call costs\u201d of the proceeding, disbursements may be taxed against the licensee; attorney fees and investigation costs of the attorney general\u2019s office may not, however, be taxed.[66]<\/a><\/sup> Costs recoverable by a successful contested case litigant against the agency are provided by statute.[67]<\/a><\/sup> They may include filing fees, subpoena fees, mileage, transcript costs, court reporter fees, expert witness fees, photocopying fees, printing costs, postage, delivery costs, and service of process fees.[68]<\/a><\/sup><\/p>\n The APA provides that a party seeking rehearing or reconsideration must file the request within ten days of the agency’s order.[69]<\/a><\/sup> The APA, however, does not confer a right to rehearing or reconsideration on any party to a contested case. The statutes or rules specific to a particular agency may contain such a right.[70]<\/a><\/sup> Specific agency statutes or rules might contain procedural requirements for rehearing and reconsideration that would supplement those found in the APA.[71]<\/a><\/sup> The Office of Administrative Hearings (OAH) rules provide that any notice of and order for rehearing must be served on all parties in the same manner prescribed for the original notice and order for hearing.[72]<\/a><\/sup> They also provide that the rehearing must be conducted in the same manner as the original hearing.[73]<\/a><\/sup><\/p>\n Although the APA provides no right to a rehearing, and accordingly agencies are not required to entertain requests for rehearing, agencies may exercise their discretion to do so.[74]<\/a><\/sup> Where through fraud, mistake, or misconception of facts, an agency enters an order, it may, with notice to the parties, correct its order.[75]<\/a><\/sup> An agency has the inherent authority to correct its prior decisions.[76]<\/a><\/sup> An agency may also reopen its own proceeding on the ground of an implied authority to deal with fraud on the agency resulting from ex parte<\/em> contacts with agency decision makers.[77]<\/a><\/sup> An agency may exercise its discretion to reconsider a matter on the ground of newly discovered evidence.[78]<\/a><\/sup> Rejecting an application for rehearing on such ground will not, however, constitute an abuse of discretion where the proffered evidence is merely cumulative of that already in the record and was in existence at the time of the hearing.[79]<\/a><\/sup> The authority of an agency to rehear or reconsider lasts until its jurisdiction is lost on the filing of an appeal from its decision.[80]<\/a><\/sup> A rehearing may in some circumstances be summary and not include the taking of additional evidence.[81]<\/a><\/sup><\/p>\n The APA provides that an application for rehearing or reconsideration is not a prerequisite to judicial review of a contested case.[82]<\/a><\/sup> The Court of Appeals has ruled that it could consider issues not addressed by an unemployment law judge in the initial decision but raised and addressed for the first time on a motion for reconsideration.[83]<\/a><\/sup><\/p>\n\n
14.1 Exceptions to the Administrative Law Judges’s Reports and Argument to the Agency Before Final Decision<\/h2>\n
14.2 Agency Review of the Record Before Decision<\/h2>\n
14.3 The Agency Decision<\/h2>\n
14.4 Rehearing and Reconsideration<\/h2>\n
Footnotes<\/h2>\n<\/div>\n
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