Thanks to Chris Walker, Elsa Dodds, and the Notice & Comment Blog for hosting this micro-symposium on my new Article, Is Administrative Summary Judgment Unlawful?. In this introductory post, I outline the core legal argument that in formal adjudications leading to sanctions, the APA guarantees an absolute right to an oral hearing and so prohibits enforcement agencies from using administrative summary judgment to skip over those hearings. In my second post, I’ll critique the standard public policy justification for administrative summary judgment, and review other implications. The next four posts will feature reactions from Professors Kent Barnett, Michael Asimow, Louis Virelli and James Tierney. I will then wrap up with a brief response.
In 1993, the Administrative Conference of the United States promulgated Model Adjudication Rules for the federal bureaucracy. These included a model rule allowing adjudicators to resolve an administrative proceeding on “summary decision” without an in-person hearing based on a finding that there was “no genuine issue as to any material fact.”
These model rules — including the rule on summary decision – were quite broadly adopted. And some agencies went on to make extensive use of the summary decision procedure. For instance, the Securities and Exchange Commission has resolved hundreds of enforcement actions using this procedure since adopting the rule in 1995.
This is illegal. My Article makes the case that, in formal administrative adjudications leading to the imposition of “sanctions,” the Administrative Procedure Act (APA) guarantees an absolute right to an oral hearing and so prohibits enforcement agencies from using administrative summary judgment to skip over those hearings.
The final two sentences of 5 U.S.C. § 556(d) provide as follows:
A party is entitled to present his case or defense by oral or documentary evidence, to submit rebuttal evidence, and to conduct such cross-examination as may be required for a full and true disclosure of the facts. In rule making or determining claims for money or benefits or applications for initial licenses an agency may, when a party will not be prejudiced thereby, adopt procedures for the submission of all or part of the evidence in written form.
This text is not ambiguous. The first sentence creates a general “entitle[ment]” for parties in formal adjudications to present “oral . . . evidence” and the second sentence articulates two specific limitations on this entitlement. The limitations are conjunctive, not disjunctive – that is, the general right to present oral evidence may be deprived only in the three specifically enumerated categories of cases (“rule making,” “determining claims for money or benefits” and “applications for initial licenses”) and even then only where the party would “not be prejudiced” by the deprivation. It follows that in cases that fall outside of the three enumerated categories, a party may not be deprived of the right to present oral evidence even where the party would not be prejudiced by the deprivation. Enforcement cases – i.e., cases involving what the APA refers to as “sanctions” – are conspicuously left out of the list of covered cases. Accordingly, the only reasonable reading of these two sentences is that, in formal adjudications resulting in sanctions, an agency may not skip over the oral hearing even where the respondent would not be prejudiced by the lack of an oral hearing.
The legislative history confirms this interpretation. When the Senate Judiciary Committee expanded the enumerated categories of cases in this provision to include “claims for money or benefits,” it also specifically rejected a suggestion to include “accusatory” proceedings in the list, reasoning that such proceedings “are traditionally the type of proceeding in which seeing and hearing the witness is required….” Further, both the House and Senate Judiciary Committee Reports described the final sentence as “limit[ing]” agency’s power to force parties to submit written evidence 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 modern lawyers, all this may seem crazy. Why would Congress have forced agencies to conduct futile hearings?
But in the 1940s (when the APA was enacted) it would not have been so far-fetched. The earliest summary judgment rules adopted by U.S. States around the turn of the twentieth century were not trans-substantive – they explicitly and sharply limited the types of actions in which summary judgment could be employed. Congress broke from this tradition in 1938 by enacting Federal Rule of Civil Procedure (FRCP) 56, which allowed for summary judgment in all actions, and states would gradually follow this trans-substantive approach. But the movement was nowhere near complete by the mid-1940s. At least eleven states had subject-matter limitations in their summary judgment rules well into the 1940s – including California, Connecticut, Illinois, Iowa, Massachusetts, New Jersey, New York, Rhode Island, West Virgina, Wisconsin, and Virginia – comprising a substantial portion of the states that had any sort of summary judgment rule. Accordingly, while modern lawyers might find the concept of an “absolute” right to an in-person hearing strange, it is entirely consistent with the practice of many important U.S. jurisdictions at the time the APA was enacted.
Only two circuits (DC and Sixth) have published opinions evaluating the use of administrative summary judgment in formal adjudications involving sanctions, and both upheld the practice. These opinions are not persuasive. They both fail to even address the operative statute, much less consider the textual or historical arguments summarized above. Instead, these courts reason mainly from inapposite cases and policy arguments based on administrative efficiency. In my next post, I turn to these policy arguments and show why they cannot redeem administrative summary judgment.
Alexander I. Platt is Associate Professor of Law at the University of Kansas School of Law.