each agency to the jurisdiction delegated to it by law. Sanctions in the way of penalties or relief must be identified and authorized by law, and where authorized they must in any case properly apply in the factual situation presented. [¶ 93] "One troublesome subject in this field is that of publicity, which may in no case be utilized directly or indirectly as a penalty or punishment save as so authorized. Legitimate publicity extends to the issuance of authorized documents, such as notices or decisions; but, apart from actual and final adjudication after all proceedings have been had, no publicity should reflect adversely upon any person, organization, product or commodity of any kind in any manner otherwise than as required to carry on authorized agency functions and necessary in the administration thereof. It will be the duty of agencies not to permit informational releases to be utilized as penalties or to the injury of parties." [¶ 94] The term "sanction" is defined in section 2(f) (¶ 508). [¶ 95] Licenses.-Section 9(b) (539) deals with licenses. The Attorney General notes that this provision "is intended to codify the best existing law and practice." It (1) provides for prompt action on all applications for licenses; (2) prohibits withdrawing or suspending a license without giving the licensee notice and an opportunity to achieve compliance, except in cases of wilfulness, or where the public health, interest or safety requires otherwise; and (3) as to businesses of a continuing nature, provides that no license shall expire until timely applications for new licenses or renewals have been determined. [¶ 96] Certain implications seem clear. An agency must act with reasonable dispatch on applications for licenses, but with due regard to the rights of those adversely affected. Also, since failure to act promptly may seriously or irreparably injure applicants, a right to mandatory injunction may lie under section 10 (¶ 540). [¶ 97] The terms "license" and "licensing" are defined in section 2(e) (¶ 507). There are other references to licenses in the Act, as, for instance, sections 5(c) (522), 7(c) (¶ 532), and 8(a) (¶ 535). HEARINGS In General.-Hearings and decisions, both key phases of agency activity, are provided for in sections 7 ( 529) and 8 (¶ 534) of the Act. Noteworthy, at the outset, is the fact that the hearings and decisions covered by these sections are only those required by sections 4 (514) and 5 (¶ 519). Thus, the hearing and decision provisions examined below merely supplement sections 4 and 5 of the Act. Also to be noted is the fact that the formal hearing provisions of section 7 do not derogate from the settlement provisions of sections 5 (b) (¶ 521) and 6 (a) (¶ 525) which require that parties be afforded every opportunity to simplify or settle cases. [¶ 102] Presiding Officers.-Section 7 (a) (¶ 530)—a section of direct day-today interest to the practitioner-provides for two different methods of hearing: (1) by the agency itself (or by one or more of its members); (2) by examiners, acting as "presiding officers", whose responsibilities are substantially enlarged in sections 7 and 8. In effect, section 7 (a) supersedes statutory provisions authorizing the use of employees or attorneys generally as hearing officers. Under section 7 (a) the presiding officer (that is, the officer who officially sits and conducts proceedings for the reception of evidence) is given a new latitude of independence. Such presiding officers are to function impartially. They are not to operate as the representatives of an investigative or prosecuting authority. Provisions in section 7 (a) for the withdrawal or removal of examiners because of bias under procedures which are subject to judicial review go far to fortify this concept of impartiality. See also sections 5(c), 8(a) and 11. [¶ 103] It is true, of course, that section 7 (a) specifically preserves the hearing functions of certain classes of specially-qualified hearing officers explicitly provided for by statutes, but this is not to afford a loophole for agency avoidance of the examiner system. Types of hearings which the Attorney General of the United States considers as coming within this exception strongly support this limited interpretation-(1) joint hearings conducted before officers of federal agencies and persons designated by a state; (2) hearings at which officers of more than one agency sit; (3) quota allotment cases under the Agricultural Adjustment Act of 1938; and (4) boards of employees authorized under the Interstate Commerce Act. Thus, for many agencies, section 7 (a) may entail the securing of examiners appointed in accordance with section 11 (¶ 546). [¶ 104] Hearing Powers. No expansion of agency powers is effected by section 7 (b) (531). It does, however, emphasize the new responsibility of the presiding officer. To do this, the section enumerates the principal powers to be exercised by hearing officers. This list (not an exclusive one) authorizes presiding officers to (1) administer oaths and affirmations; (2) issue subpenas authorized by law; (3) rule upon offers of proof and receive relevant evidence; (4) take or cause depositions to be taken whenever the ends of justice would be served thereby; (5) regulate the course of the hearing; (6) hold conferences for the settlement or simplification of the issues by consent of the parties; (7) dispose of procedural requests or similar matters; (8) make decisions or recommend decisions in conformity with section 8 (534); and (9) take any other action authorized by agency rules that are consistent with the Act. [¶ 105] In short, the presiding officer is to perform real functions in administrative adjudications. Any concept of his role as that of merely a monitor, a notary or a policeman is thoroughly contradicted. EVIDENCE Rules or Standards of Evidence in Agency Proceedings.-Evidence requirements, shaping as they do the course of agency action, form an integral part of all administrative process. Section 7 (c) of the Áct (¶ 532, deals with the rules governing the admission and consideration of evidence, enacting the best in current administrative practice into statutory law. Closely related, of course, are the determinative standards provided for the guidance of reviewing courts by section 10 (e) (¶ 545). [¶ 112] Initially, section 7 (c) (¶ 532) restates the accepted rule that the proponent of a rule or order must bear the burden of proof, except as otherwise provided by statute. However, this allocation of the probative burden is not limited to the party who institutes a proceeding. Other parties, the proponents of different results, have their own burdens to maintain. Thus, section 7 (c) requires that every proponent of a rule or order (or the denial thereof) has the burden of coming forward with sufficient evidence. Also, according to the Committee Reports, it would appear that, in the determination of applications for relief, any fact, conduct or status thus shown by credible and credited evidence should be accepted as true except as the contrary is shown or such evidence rebutted or impeached by duly credited evidence or by facts officially noticed and stated (see section 7 (d) (¶ 533)). [¶ 113] The most important end-results of section 7 (c) would appear to stem from its concept of the similarity existing between administrative hearings and equity proceedings in the courts. On the basis of this concept, section 7 (c) requires that an order must be based upon evidence which is relevant, substantial and probative. Only when supported by evidence of this superior level of proof would agency action be justified. In short, the accepted standards of proof (as distinguished from mere standards of admissibility) would govern administrative proceedings just as they do judicial. The distinction requires close attention for, while immaterial evidence will not necessarily harm the record, only material evidence (evidence that is reliable, probative and substantial) will support it. Mere admission of irrelevant evidence is not taken as prejudicial error, there being no lay jury requiring protection from improper influence. However, such irrelevant, immaterial and unduly repetitious evidence is to be excluded as a matter of good practice, according to the Committee Reports. Important also, because of their frequent use in administrative proceedings, is the fact that these requirements do not preclude the admission of, or reliance upon, pertinent technical reports, surveys, analyses and summaries. [114] Rounding out these evidence provisions are two additional limitations requiring agencies to (1) examine and consider the whole of the evidence relevant to any issue, and (2) decide in accordance with this evidence. Under these provisions the function of an agency clearly is not to decide arbitrarily or in disregard of the evidence, or upon surmise, suspicion or untenable evidence. Mere uncorroborated hearsay or rumor would not constitute substantial evidence for purposes of agency action any more than it affords a firm basis for judicial affirmance on review (¶ 147). [115] Summarizing these important standards, the practitioner will find that, under section 7 (c), the party having the burden of proceeding will prevail where he comes forward with a substantial case, provided his evidence is not discredited or rebutted. In all events, the agency's decision must be in accordance with the evidence-with the preponderant evidence where proof is both pro and con. Moreover, judgment must be on the whole record (see section 7(d) (533)), and in accordance with substantial proof, an evidentiary safeguard that is repeated in section 10 (e) (¶ 545). [116] Section 7 (c) further authorizes the parties to present documentary, oral and rebuttal evidence and to conduct reasonable (but not unlimited) cross-examination. The extent of cross-examination continues to be determined by the presiding officer. His yardstick will be the amount of cross-examination required for the "full and true disclosure of the facts" required by section 7 (c). Thus, in many rule-making proceedings where the subject matter and evidence are broadly economic or statistical in character and the parties or witnesses numerous, the direct or rebuttal evidence may be of such a nature that cross-examination adds nothing substantial to the record and unnecessarily prolongs the hearings. However, the right of cross-examination extends, in a proper case, to written evidence submitted in rule making, initial license, and claims proceedings, as well as to cases in which oral or documentary evidence is received in open hearing. Even in the latter situation, subject to the appropriate safeguards, technical data may as a matter of convenience be reduced to writing and introduced as in courts. The written evidence provision of the last sentence of the section is designed to cover situations in which, as a matter of general rule or practice, the submission of the whole or substantial portions of the evidence in a case is done in written form. In these situations, however, the provision limits the practice to specified classes of cases and, even then, only where and to the extent that "the interest of any party will not be prejudiced thereby." To the extent that crossexamination is necessary to bring out the truth, the party must have it. In addition, an adequate opportunity must be provided for a party to prepare and submit appropriate rebuttal evidence. See also ¶ 117. [¶ 117] Official Notice. The judicial notice frequently employed in court proceedings is validated for administrative purposes by the authorization of "official notice" contained in section 7 (d) (¶ 533). This section permits an agency to take official notice of material facts that do not appear in the record, provided the taking of such notice is stated in the record or decision and affected parties, on timely request, are afforded an opportunity to disprove the "noticed" facts. In short, the "notice" practice is fully recognized, but the form of recognition affords safeguards against mistakes or unwarranted expansion of the principle. DECISIONS Statutory Limitations.-Section 8 (534) lays down the requirements for decisions in cases involving section 7 (529) hearings. Thus, like section 7, these decisions provisions are supplementary to sections 4 (514) and 5(¶ 519), and are brought into play only where agency action is required by statute to be preceded by hearings and no other exception is afforded from sections 4 or 5. [¶ 122] Action by Subordinates.-Section 8 (a) (535) continues to enlarge the importance and responsibility of hearing officers, a development already initiated in section 7 (529). In line with this, section 8 (a) requires that in agency adjudications subject to section 5 (c) (522) the presiding officer must either make the initial decision or recommend one, the choice being left to the agency. The importance of this provision is apparent on its face, for (in the absence of an appeal or review) this initial decision of the presiding officer becomes the decision of the agency itself. Moreover, even though on appeal or review the agency is vested with all powers it would have had in making the initial decision, this does not nullify the examiner's decision or recommended one which becomes a part—and frequently a conclusive part-of the record of the case. [¶ 123] Special procedures do, however, govern decisions in cases of rule making and determinations on original applications for licenses. In these types of cases the recommended decision may be supplied either by a tentative agency decision or a proposed decision by its responsible officers, or may be omitted entirely where such intermediate action would prevent proper and timely performance of the agency's functions. [¶ 124] Supporting Reasons.-Section 8 (b) (¶ 536) requires that the parties shall be afforded a reasonable opportunity to submit proposed findings, conclusions or exceptions, together with supporting reasons, before each recommended, initial, tentative, or final decision. This authorization for the filing of supporting reasons for proposed findings, conclusions or exceptions implies that the parties' briefs on the law and facts must be received and fully considered by every recommending, deciding or reviewing officer, a requirement which does not diminish existing rights to oral argument. [¶ 125] Practical effectiveness of these provisions is safeguarded by section 8 (b)'s requirement that the record must show the ruling on each finding, conclusion or exception presented, thereby advising the parties and any reviewing court of the legal basis for the agency's findings and conclusions. Moreover, all decisions (including initial, recommended and tentative ones) are made part of the record and required to include― (1) a statement of the findings and conclusions (together with supporting reasons) on all material issues of fact, law, and, to be emphasized particularly, discretion presented by the record; and (2) the appropriate rule, order, sanction, relief or denial of relief. [¶ 126] Thus, the decision, in many cases, undoubtedly will take the form of a publicly available opinion, reasoning and relating the issues of fact, law and discretion. In any event, however, in the normal adjudication section 8 (b)'s requirements are such as to prevent any mere restatement of findings and conclusions in general statutory language. JUDICIAL REVIEW [131] In General.-Judicial review-final, and most effective checkrein upon administrative process-is the subject of section 10 (540). For the practitioner, this section is a comprehensive statement of the rights, mechanics and scope of court review. Protection of rights is the key note, and the review is not restricted to constitutional rights and limitations alone. In short, section 10 requires adequate, fair, effective, complete, and just determination of the rights of any person in a properly invoked proceeding. These requirements do not, however, supplant basic statutes. For example, where a statute actually precludes judicial review no right to review is created by section 10. Similarly, the section does not trespass upon matters to the extent that they have been committed by laws to the relatively absolute discretion of administrative bodies. Thus, in dealing with judicial review (regardless of whether such review is expressly authorized by statute, is non-statutory, or is tied into judicial proceedings to enforce administrative action), section 10 is principally a declaration of the best in existing law; but it is a declaration that supplies new clarity and needed emphasis. [¶ 132] Right of Review.-Section 10 (a) (¶ 541), a restatement of present law, provides a right of review for any person adversely affected in fact by an agency action, or aggrieved within the meaning of any statute. No openending of the review process for every fanciful, or merely personally affected litigant, is intended. Careful draftsmanship purposefully avoids any such docket-loading result. In practice, a complainant seeking to review administrative action under section 10 (a) must show that the challenged action is contrary to law either in substance or procedure. Thus, the adverse effect upon which review rights are to be grounded under this subsection must be an illegal effect, a limitation already clearly recognized by the United States Supreme Court. The injury must be a wrong which "directly results in the violation of a legal right." Alabama Power Co. v. Ickes, et al. (1938) 302 U. S. 464, 479. [133] Closely related to this subsection is the listing in section 10 (e) (¶ 545) of the several categories of legal wrong with which section 10 (a) is primarily concerned. |