State Administrative Law 1. Fundamental Administrative Law Principals a. Separation of powers (Art III Sec. 2): i.

The powers of the government are divided into three branches: Legislative, Judicial, and Executive ii. No person exercising powers of one branch shall exercise powers that belong to another branch unless allowed by the constitution. b. Legislative power: Vested in the House and the Senate c. Judicial power: Vested in one court of justice that is divided into: i. One supreme court ii. One court of appeals iii. One trial court of general jurisdiction (Circuit Court) iv. One probate court v. One court of limited jurisdiction if 2/3 vote creates one in the House and Senate d. Executive power: Vested in the Governor e. What is an agency? i. Created by statute ii. Has the power to adopt rules and hear complaints iii. Not for private purpose iv. HE will not ask what makes a state agencyjust know from the cases which ones are which ones are not 1. If you ever question whether it is or not, argue in the alternative 2. Delegation of Powers a. Department of Natural Resources v. Seamen Proper delegation i. The director of the DNR placed net size limitations on fishing operations ii. D issued fishing license but complained of net size and other things iii. DNR seizure found that D was using illegal nets iv. Director claims got his authority from Commercial Fishing law v. Issue: Is this delegation an unconstitutional delegation of authority? vi. Rule: The legislature cannot delegate its power to make a law BUT the legislature can delegate a power to determine some fact or status on the law or what the law intends to make vii. Goal of Delegation: To make sure people are protected from exercise of authority viii. Test: To determine sufficient standards (Sufficient Standards Testtalking points) these are the standards to avoid arbitrary agency action (Whether or not the delegation was proper) 1. Read the statute as a whole (to find intent) 2. Statutes must be as reasonably precise to guide as possible 3. Construe the statute as valid ix. Holdings: 1. Reading the statute as a whole Intent was to protect fish the director can analyze commercial fishing to protect fish this allows the director to make factual determinations on the legislation 2. Reasonably precise: Found to be as reasonably precise as the subject matter could allow a. This was because fish are state property, the legislature wanted to protect them but knew that the director would have expertise that they did not to ensure the fish population was healthy 3. Validity presumed:_ Yes so long as the director was not acting in an arbitrary and discriminatory fashion b. Westevervelt v. Natural Resources Commission Proper delegation

i. West owned a canoe and boat livery operation and sued the DNR and its director against the enforcement of proposed river use regulations ii. The regulations would present a significant route change that would hurt business iii. Issue: Whether the legislature had the authority to delegate this power to the director 1. For similar reasons in Seamen, they did delegation was proper iv. The difference from Seamen: The court was not sure if the Directors exercise of delegated authority was within the scope of the authority delegated it was remanded to the lower court to determine with fact finding c. Stuart v. Spencer Coal Judicial delegation i. The department of Labor and industry granted a work compensation award to PInsurance company appeals ii. The department has quasi-judicial authority but does not have full judicial authority 1. It is limited to make special determinations on all questions arising under compensation law iii. The agency had the statutory authority to determine the rights of the parties 1. The agency was not able to apportion the damages d. Lesniak v. Fair Employment Practices Question of Executive delegation to the courts i. Rule: Once delegated to another agency, the legislature may not reserve any of the same for themselves ii. Lesniak complained that her former employer, Wayne County, failed to reinstate her in an eligibility list based on her nationality iii. The Wayne County Civil Service commission then determined that it was not discrimination based on the facts iv. Then L petitioned the circuit court for de novo review (Court can use its own judgment to interpret the error of a lower court) v. Intent taken as a whole 1. Legislature did not intend for a whole new proceeding by stating de novo review because of several inconsistent provisions e. Coffman v. State Board of Optometry i. Coffman went to an optometry school in another state and subsequently moved to Michigan to practice ii. He did not sit for the Michigan optometry exam and was not allowed to practice in Michigan iii. Issue: Can the state delegate authority to an agency that then delegates that same authority to a non-governmental agency? 1. No iv. Rule: Delegation of government authority to a private party is unconstitutional v. End result: we do not have to go to ABA approved law schools vi. The regulation of law here is not state regulated 3. Freedom of Information Act (FOIA) a. FOIA makes government records available to any person, not just a party in an agency proceeding. An individual is given a legally enforceable right of access to government files and documents and one not limited to those needed for litigation in an actual case. b. The policies behind FOIA are as follows i. That disclosure be the general rule, not the exception; ii. That all individuals have equal rights of access; iii. That the burden be on the Government to justify the withholding of a document, not on the person who requests it;

c. d.

e.

f. g.

h.

iv. That individuals improperly denied access to documents have a right to seek injunctive relief in the courts; v. That there be a change in Government policy and attitude. All a complainant must allege in an action under FOIA is that he made a request for identifiable records, which the agency turned down. The burden then shifts to the agency to justify its refusal. Requirements to be subject to FOIA: i. Must be requested ii. Sought from a public body iii. Must be public records iv. Cannot be incarcerated v. Cannot be exempted What is a public body? i. Government and all local units of the legislative and executive branchall state agencies 1. Legislative boards, agencies 2. County, city, etc. 3. Any body that is created through state or local authority; and a. Funded through state or local authority ii. Courts and the governor/lieutenant governor are not public bodies iii. List of public bodies that have rulemaking authority (assumed) from class: 1. Michigan State University (Booth) 2. Michigan Liquor Control Board 3. Public Service Commission 4. Michigan Department of Education 5. Department of Public Health What are public records? i. It would be a public record if it were prepared in the official function of the public body What are the exemptions? i. Clearly unwarranted invasion of an individuals privacy 1. Must be of personal nature ii. Investigation records compiled for law enforcement purposes 1. Only to the extent of the following: a. Interfere with law enforcement proceedings b. Deprive an individual of a right to fair trial c. Constitute an unwarranted invasion of privacy d. Disclose the identification of a confidential source e. Disclose investigative techniques f. Endanger life or property of a law enforcement personnel g. Would jeopardize the security of penal institutions iii. Records that are exempted by statute iv. Trade secrets of a commercial or trade organization that are submitted voluntarily to public body if: 1. Submitted with the promise of confidentiality; and 2. The confidentiality is authorized by the head officer or elected official; 3. A description has been submitted within a reasonable about of time v. Information subject to attorney/client privilege vi. Information subject to physician/client privilege vii. Bid proposals to public body viii. Test questions and answers Process to request records: i. Request made in writing that:

i.

Sufficiently describes the record to allow the body to find the record a. If deemed insufficient, the person can change the description or file in circuit court 2. Request is forwarded to the FOIA coordinator 3. Fees may be charged a. Only on: i. Mailing fees ii. Duplication fees ii. Then, the person has the following rights to the record: 1. Inspect 2. Copy 3. Receive copies 4. Subscribe to copies of updated on a regular basis (for up to 6 months) iii. Response to request 1. FOIA Cooridinator must: a. Respond to the written request within 5 days from receipt. Either: i. Granting the request ii. Issuing written notice denying the request iii. Granting in part / denying in part iv. Issuing a notice extending the response date by 10 business days (can only do once) 2. If denied, the denial must contain the reason(s) for denial iv. Appealing denial 1. May do one of the following: a. Submit in writing appeal to the head of body i. Head must respond within 10 days, either: 1. Reversing the denial 2. Uphold denial 3. Reverse in part / deny in part b. Commence an action in circuit court within 180 days to compel disclosure FOIA Cases i. Hagen v. Department of Education 1. Facts: P was denied a commission decision by the Michigan tenure commission 2. D argued that the document was exempted because they were exempted by statute because of the definition of private hearing 3. P argues that private hearing is still FOIA-able 4. Holding: decision of private hearing are exemptedexemption upheldno disclosure 5. Rules: a. Public bodies must disclose if not exempt i. Exemption must be narrowly construed b. Public records are presumed to be discloseable ii. Swickard v. Wayne County Medical Examiner 1. Facts: Judge shot dead in his mothers home a. Reporter brought case to compel an autopsy examiner to disclose report of deceased district court judge 2. Rule(s): a. Privacy is not defined we use common law principles: i. Case by case basis

1.

ii. Trier of fact to determine iii. Tort law says that privacy only applies to the living / aslo that it does not apply to his family b. Defendant has the burden to prove that the exemption applies 3. Holding: a. Disclosure would not amount to a clearly unwarranted invasion of privacy b. Physician patient relationship does not apply to deceased c. Disclosure granted iii. Baker v. Westland 1. Facts: PI law firm brings action against city for denied FOIA request for contact information of residents injured in car accident 2. Holding: Privacy exemption applied a. The mere fact that someone was in a car accident is embarrassing according to the court b. Privacy exemption upheldno disclosure 3. Rule: Two requirements for privacy exemption: a. It must be of personal nature; and i. Intimate or embarrassing details about an individuals private life b. It must be a clearly unwarranted violation of privacy i. Common law ii. Trier of fact to determine on a case by case basis iv. Kincaid v. Department of Corrections 1. Facts: Inmate brings action against department of corrections for failing to release inmates disciplinary records 2. Holding: Failure to turn over the inmates records was arbitrary and capriciousdocuments were released v. Evening News v. City of Troy 1. Facts: News sought information regarding two police officers reports describing a homicide 2. Holding: City failed to meet its burden of proof to withhold the information sought by Newsinformation disclosed 3. Rule: If documents contain both exempt and non-exempt information, then the public body must keep the information separate to allow FOIA searches on the information that is not exempt. vi. Messenger v. Ingham County Prosecutor 1. Facts: Criminal acquitted of manslaughter was denied the FOIA request for his entire criminal file from the prosecutors office 2. Holding: a. The documents fell under the attorney work product exemption and were not released for disclosure 4. Open Meetings Act a. Purpose: to require certain meetings of public bodies to be open to the public b. To be subject to Open Meetings actsif all three, meeting must be in the public: i. Is it a public body? ii. Meeting iii. Decision is made c. What is a public body? i. Same as FOIA requirements d. What is a meeting? i. Convening in a public place in which a quorum is present for deliberating to ward rendering a decision on public policy

e. f.

What is a decision? i. A determination action, vote, or disposition upon acceptance of member to effectuate public policy Notice requirement i. Public notice must contain: 1. Name of the public body 2. Telephone number; and 3. Address ii. Where is it posted: 1. Must be posted: a. At the main headquarters; or b. Cable television 2. If no principal office: a. Then posting at the county clerks office iii. Posting for regularly held meeting 1. Must be posted 10 days from initial meeting 2. Scheduling changes must be posted at least 18 hours prior to the meeting Closed sessions permitted (exemptions to OMA): i. No decision authoritymerely advisory ii. To hear a dismissal or complaints against a public officer or student iii. For strategy and negotiation regarding collective bargaining iv. To consider the purchase or lease of property v. To consult with an attorney regarding trial vi. To consider the application of public figures if they request it be confidential vii. In searching for the president of higher education viii. If a board is searching for a final candidate and gets it down to 5 and does not make a determination until 5 days after the 5 have been announced to the public Analysis i. Step 1 Was it a public body? 1. Look to where their authority came from a. Morrison Public Body b. Bay City Not public body ii. Step 2 What authority were they given? 1. If delegated decision making authority that affect public policy, they are subject to OMA iii. Step 3 Are they exempted? OMA Cases i. Booth Newspapers v. Regents 1. Facts: Booth sued regents over OMA and FOIA for their procedures in selecting a new president for MSU 2. Holding: The selection process violated OMA and FOIA a. Board of regents are a public body since they were created by the constitution and run by the university 3. Rules: a. It was a meeting because they were making a decision b. It takes more than one person to be a public bodyyou cannot monitor someones thinking process c. Look to legislative intent to determine the bodys authority ii. Esperence v. Chesterfield Township

g.

h.

i.

Facts: Applicant applied for a liquor license and subsequently sued the Board for violating OMA by secret voting 2. Issue: P did not state the secret ballot harmed the rights of the public in their complaint 3. Rule: To invalidate the decision, you have to plead that the decision or process impaired the rights of the public 4. Holding: Though this decision was not invalidated, it still violated the OMA because secret voting violates the principles of the OMA iii. Herald Co. v. Bay City (NON-PUBLIC BODY CASE) 1. Facts: Newspaer bings action against the city manager for the process in which they selected a new fire chief a. 2. Holding: a. City manager was not acting as a public body for the purposes of the OMAthe OMA does not apply 3. Rule: a. All meetings of a public body should be held open to the public i. All decisions of public bodies too b. Definition of a public body in the OMA-Two requirements: i. Must be state or local legislative or governing body, including board, commission, council; and ii. The body must be empowered to exercise governmental or proprietary function 1. Power must derive from: a. State Constitution b. Statute c. Charter ordinance d. Resolution; or e. Rule c. Individuals are not public bodies but individual executives which cannot be held as subject to the OMA iv. Morrison v. East Lansing 1. Facts: City residents sued the city over conception of a plan to convert a school building into a community center 2. HBC Hannah Building council was to advise the city of architects and construction managers for the project, develop a site plan, oversee the construction and determine guidelines 3. Not all meetings were noticed 4. Defendants are challenging the determination that HBC was a public body 5. D argues that HBC duties are in line with the Bay City case because they acted like a city manager 6. Holding: Situation is more like Booth Than Bay City because the council authorized HBC to perform its governmental function HBC even held public meeting to invite public input 7. Rule: Government function derived from a public body is still subject to OMA 8. Analysis a. From where does the decision maker derive its authority? i. From the controlling body which was a public body b. What authority is actually delegated? i. HBC was acting on their own to make a decision it appears that they are only advisory but when

1.

5. Rules, Rule Making, and Ratemaking a. What is a rule? i. An agency regulation, statement, standard, policy, ruling or instruction of general applicability that implements or applies law enforcement or administered by an agency, or that prescribes the organization, procedure, or practice of the agency, including the amendment, suspension, or recession of the law enforced or administered by the agency. ii. Subject to limitations b. General rule about rules: i. It is a rule only if it: 1. Articulates public policy; AND 2. Is announced pursuant to rule making procedures ii. If it is not a ruleit still may be enforceable c. Rulemaking i. There are two formal mechanisms that an agency can use to articulate its position on public policy: 1. Rule making; and 2. Adjudication ii. Rule making in general: 1. It is the exercise of the agencys legislative authority 2. The meat of the rule is found in the statute that grants the agency the authority 3. The authority must be specifically delegated from the legislature: a. Standards for rulemaking are given to the agency from the legislature iii. The two contrasted: 1. Rulemaking a. Two key characteristics: i. Statements that govern future conduct 1. Thou shall not ii. General applicability 1. They will apply to everyone who is in a particular category iii. Have the same force and effect (if proper) iv. More legislative 2. Adjudication a. More Judicial-like than legislative b. Retroactive they apply to past conduct c. You did x iv. How about a rule compared to a law? 1. A law is a piece of legislation that has gone through bi-cameralism and presentment d. Steps of Rulemaking i. Notice 1. Notice must be provided to: a. the committee b. the office of regulatory reform c. and each person who requested notice 2. Notice must contain: a. The statute where authority is derived b. Time and place for the hearing for comments to be made c. The manner in which testimonials can be submitted d. Proposed effective dates and substance of the proposal

they present only one option for advice, it acts as a decision for the purposes of the OMA

e.

ii. Fact gathering Hearing 1. Very informallike a legislative committee hearing a. No swearing in b. No evidence c. Just a simple conversation d. Not adversarial iii. To Joint Committee on Administrative Rules (JCAR) 1. JCAR is under majority control (currently 6-4 by republicans) 2. JCARs abilities: a. Initiate emergency legislation b. To legislate the area proposed to be governed by rule making c. To expedite the legislation d. Pass statutes and override the legislation e. Eliminate agencies all together Rulemaking Cases i. Coffman v. State Board of Examiners of Optometry 1. Facts: Optometry exam case (again) 2. Issue: Whether the board exceeded the scope of their delegated authority in setting a four year guideline instead two? 3. D argues: That the legislature and agency disagree by setting two different thresholds 4. Holding: No, the legislature set a floor (at least 2 years of school) the board set 4 years which was above the floor 5. Rule: Analysis to determine scope of the rule: a. Step 1: Use the seamen test to determine whether or not the delegation was proper: i. Read the statute as a whole (to find intent) ii. Statutes must be as reasonably precise to guide as possible iii. Construe the statute as valid b. Step 2: Coffman Test to determine whether the scope was exceeded or not: i. Talk about what power was granted ii. Was it granted through proper procedure? iii. Is it reasonable? ii. Michigan Farm Bureau v. Bureau of Workers Compensation 1. Issue: Were letter issued by the director of Workers compensation to address rate-making rules? 2. Holding: a. The letter were not rules and were instead interpretive statements 3. Rule: Where the proper procedural steps are not taken to form a rule, it is not a rule a. A rule is not an interpretive statement, guideline, or informational pamphletthey do not have the force and effect of law b. Once an agency is delegated power to make rules, they are either: i. Legislative; or ii. Interpretive c. If it does not say following notice and comment, it is interpretive d. Interpretive statements can still be effective if it is a proper interpretation of the state

iii. Detroit base Coalition v. Department of Social Services 1. Facts: Recipient of social services and the department of social services bring action to prevent the department from implementing a policy that would mandate administrative hearings by phone interview a. Current rule judge to meet in county where beneficiary resides 2. Issue a. Are the new telephone procedure inconsistent with the existing rules? b. Did the new procedure violate the rule making procedure of the APA? 3. Holding a. Phone hearings are inconsistent with the existing rules b. The phone hearing policy violated rule making provisions of the APA 4. Rule a. In order for an agency to change a rule, they have options: i. Promulgate another rule, or 1. They would have to follow at least as formal of procedure to change position ii. The legislature could create new law b. Rules are to be enforced against the agency and all subsequent agencies iv. DAIIE v. Commissioner of Insurance 1. Facts: Insurance company refused to ensure minors under the age of 21 that did not live at homethe commission of insurance is challenging this underwriting practice 2. Insurer argues: a. The risk was too large of insuring them because it could not be calculated b. Insuring them would pose a huge risk of loss to the insurer c. The premium to insure would be too large for anyone to afford 3. Comm argues: a. The standards used by insurer should not be used because they are non-promulgated rules 4. Issue: Did promulgated rules need to exist to cover the use of DAIIEs practice? 5. Holding: a. No, not all rules need to exist, Adjudication can fill in 6. Rule: Agencies need not always promulgate a rule to cover every conceivable situation a. Rules can also be created through adjudication b. To assess penalties, there has to be a hearing: i. Complaint ii. ALJ iii. Proof the rule was violated: 1. The burden is on the state to show iv. ALJ makes recommendation to the agency 1. If uncontested, it will be adopted c. Adjudicated rules apply to past conduct (distinct from a rule-future conduct) i. They only apply to the parties involved

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ii. In this case, neither agency or commission are bound by the agencies determination v. Clonlara Inc. V. State Board of Education 1. Facts a. Department of education issued new compliance procedures for homeschool i. Instruction by certified teacher ii. Add social studies and science iii. At least 180 day school year 2. Issue: a. These are not rule since they did not go through the proper procedure, but are they still enforceable? 3. Holding a. As long as they properly interpret the statute, yes. b. 4. Rule a. Guidelines are not rules but are instead interpretive statements b. Test to determine whether or not the statement is enforceable (ie. Properly interprets the statute): i. Narrowly construed ; and ii. The statement must be merely explanatory c. To analyze: i. Look to the statute, what is its purpose? 1. Then, does the statement support it? ii. It did here (except for the 180 day requirement) 1. The goal of the legislation was to ensure state school and home school go by the same standards a. All parts except for the 180 day requirement were the same and thus in compliance with the statute vi. Luttrell v. Department of Corrections 1. Facts: Prisoner wanted to overturn the designation of him as a drug trafficker because it precluded him from being placed in a community placement program 2. Issue a. Does the underlying statute allow the Department of Corrections to determine the eligibility of criminals for the program 3. Holding: a. Yes, doing so is within the legislative intent of the statute 4. Rule: a. Seamen gives us whether or not the delegation was proper b. Where an agency is empowered to create rules, use this test to determine whether the rule was properly exercised: i. Whether the rule is within the matter covered by the enabling statute ii. If so, whether it complies with the underlying legislative intent; and 1. Look to the plain language of the statute to determine the underlying intent of the legislature

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f.

2. Then look to legislative history iii. If it meets the first two requirements: 1. It is neither arbitrary or capricious c. What about legislative silence (acquiescence) i. It can only be construed as consent to the accuracy of the agencys interpretation vii. Blank v. Department of corrections 1. Facts: DOC drafted a rule pursuant to APA and then submitted it to the Joint Committee on Administrative Rules (JCAR) for approaval. JCAR did not adopt the rule and the DOC subsequently sent them to the Governor. They were enacted soon after. a. However, the law was not accompanied by a certificate of Legislative approval pursuant to the APA 2. Rule: Generally, failure to follow the approval process of the APA renders a rule void a. The normal process: i. Giving public notice ii. Holding public hearing; and iii. Submitting proposed rule to JCAR 1. If JCAR approves, they attach the certificate of approval and return to the agency; 2. If JCAR does not approve, they report to the legislature and the agency iv. If JCAR does not approve the rule is not adopted by the agency unless one of the following: 1. Legislature adopts the rule within 60 days after the JCAR report 2. JCAR subsequently approves the rule 3. Time expires and nothing has happened 4. Agency resubmits rule for approval from JCAR viii. Michigan State AFL-CIO v. Secretary of State 1. This case allows us to promulgate emergency rules 2. Rule: a. Section 48 of the APA allows an agency to: i. Promulgate an emergency rule without process if: 1. Health 2. Safety; and 3. Welfare ii. Of the community are threatened b. There are no notice or comments required provided: i. Agency declares threat to health safety and welfare ii. The governor declares emergency iii. In writing c. Emergency rules are only good for 6 months d. To make the rule permanent, it would have to go through normal notice and comment proceedings Request for rulemaking i. Must contain: 1. The regulatory basis for the rule 2. The problem the rule intends to address with an assessment of the significance of the rule

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3.

Whether existing state laws affect the rule and whether they should be modified 4. An analysis of alternatives 6. Due Process a. 14th amendment due process clause i. No personal shall be deprived life, liberty, or property without due process of law b. General rulesdue process analysis i. To start a process discussion: 1. Does the individual have a protected interest? a. If no, stop b. If yes, discuss and continue 2. Who is taking the action? c. Due process cases i. Bundo v. City of Walled Lakerudimentary due process 1. Facts: Bundo had renewed his liquor license for several years and the city was moving to stop it. There was never a renewal process to the renewjust pay and have your application in on time. 2. P argues: that they have a protected interest 3. D argues: that P does not have a protected interest since municipalities have traditionally had a large latitude to regale liquor licenses 4. Issue (Also the analysis) a. Does an individual holding a liquor license have an interest for the purposes of due process? b. If so, what process is due? 5. Holding a. Yes, we need to look at two things: i. The nature of the interestnot the weight; and ii. Liberty and property definitions are to be broadly construed b. It can be assumed that Bundo, since he has had it renewed many times before, that it would likely be renewed again, giving him a reasonable expectation to renewal i. Therefore he has a property interest c. So what process is due? i. Test: (Balance the two) 1. Balance the seriousness of the deprivation against the government interest involved ii. Here, Ps livilood and investment is at stake through his business iii. However, the community is concerned with the proper regulation which is a matter of great interest d. After balancing the two, P is due rudimentary due process because of his quisi-property interestRudimentary due process requirements: i. Timely written notice 1. Details the reasons for proposed administrative action; ii. Opportunity to defend 1. By confronting adverse witnesses 2. To present witnesses

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3. Present evidence 4. Present arguments iii. To have a hearing examiner other than the individual who made the initial decision or determination iv. To have a written statement of findings 6. Rule a. b. General rule i. Just owning a business does not create an interest An interest i. Person must have a legitimate claim of entitlement to have an interest ii. Person must have more than an abstract need or desire 1. Can be less formal that a contract right 2. But needs to be more than a unilateral expectation Revocation can be taken as long as there has been adequate notice

c.

ii. Biscos v. MLCC 1. Same facts as Bundo However, the liquor control association denied said they would not renew the license for alleged activity 2. Procedural due process was due here a. Any time where the P can say to the state Prove it procedural due process is due. 3. Procedural due process: a. Is like a contested case hearing iii. 13 Southfield associates v. Department of Public Health 1. Applicants filed for a certificate of need to open a new health care center 2. They built the center and found that the certificate of need was denied 3. Was there a constitutionally protected interest? a. No, 13 Southfield was merely an applicant which does not give them a legitimate claim of entitlement because they are an applicant d. Due process analysis i. Is there a constitutionally protected interest? ii. Yes a. Bundo and Biscos 2. What is the scope of review(Who is taking the action?) a. Non-State agency i. Analyze under Bundorudimentary due process b. State agency i. Analyze under BiscosProcedural due process iii. No a. Use Southfield 2. No legitimate claim of entitlement 3. No process due 7. Adjudication a. Common criteria i. Exercise of the Agencys judicial like authority ii. Specific application-deals with a particular adverse party iii. Deals with past facts (wrongdoing/conduct) iv. You did

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v. They are trial-like 1. To gather information 2. Are bound by the record b. Cases i. Hanselman v. Wayne Co. Concealed Weapons Board 1. Wayne county seeks to revoke concealed weapons license 2. The analysis a. Protected interest b. What process is due? i. Rudimentary due process because Wayne County Concealed Weapons Licensing Board is not a State agency ii. League General Association v. Michigan Catastrophic Claims Association 1. MCAA is not a state agency, despite all required aspects met, because there is a private purposeowned by policy holders iii. Lawrence v. Department of Corrections 1. Overview This case defines what is a contested case hearing a. Contested case hearing i. A Proceeding including but not limited to ratemaking, price-fixing and licensing, in which the determination of the legal rights, duties, or privileges of a named party is required by law to be made by an agency after the opportunity for an evidentiary hearing 2. Holding: Prison disciplinary hearing is a contested case hearing iv. Kelly Downs v. Racing Commission 1. Like 13 Southfield Associates a. Kelly Down were an applicant and had no legitimate expectation to race v. Huron Valley Hospital v. State Health Facilities Commission 1. Overview This is the Michigan adoption of the Ashbacker Doctrine 2. This was another certificate of need case but there was only one certificate and more than one applicant 3. Rule In this scenario, a comparative hearing would be required a. This is not an evidentiary hearing b. Instead, i. Applicants are allowed to put on a dog and pony show to win the agency over c. The agency is able to make a determination by weighing the pros and cons of the presentation s 8. Administrative Procedures Act Hearing Procedures a. How does a contested case hearing commence? i. By form of the agencys statute; ii. Notice from the agency (Agency enforcement action) iii. Licensees may sue licensees where the jurisdiction may be in the jurisdiction of the agency; iv. Rate regulated service like gas or electric (Public service commission) b. Even though an applicant may not have a form of hearing as a right, the agencys statute may actually provide for it c. Consumers Energy is filing for a rate increase with the public service commission i. Interested parties 1. MI public service commission 2. Consumers energy 3. Their staffexperts

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a. Engineers b. Accountants c. Financial experts d. Energy experts 4. The publicanyone who would be affected by the increase (ratepayers) 5. Residential pays less than cost 6. Commercial - offices 7. Industrial ford, Chrysler, etc. ii. Attorney general and as the attorney for the staff of the PSC (they may have conflicting wills) d. All of the parties need standing i. Injury in fact ii. Within the zone of interest thought to be protected by the statute iii. All of those parties have standing e. Case starts by the filing of consumers energy rate increase f. The parties listed above are intervenersthey would file a petition to intervene g. The notice in the newspaper will give details on the pre-hearing conference and there will be an alj as the official of the hearing and all of the parties who want to participate i. Even other parties may be there toothe alj will rule on the standing of each party h. Then they go off the record and sayset your schedule i. Nothing in the APA describes the hearing processit just says that there is a hearingeach agency sets out how the hearing will proceedthis is for the public service commission: i. Direct testimony 1. It is then given to the other sidethere will be no question about what will be said ii. Intervener testimony iii. Staff testimony iv. Rebuttal testimony v. Then there will be a hearingit will be cross examination because all of the other testimony has been bound into the record vi. Initial briefs vii. Reply briefs viii. ALJ writes a proposal for decisionthey have no authority to make a decisionthey recommend ix. Then each party can file exceptions to the PFD (proposal for decision) 1. ALJ makes findings of fact and conclusions of law 2. If there are no exceptions filed then the PFD becomes the agency order x. Replies to exceptions xi. Lastly, the agency makes an order 1. This is an issue order a. It makes findings of fact and rules of law b. Can only take in those things that took place at the hearingcannot go off the record c. (RememberALJs produce written opinions) 9. Licensing a. Licensing Cases i. Westland Convalescent Center v. Blue Cross 1. Facts: Health care providers sued Blue Cross over a rate change in care that they had contracted for 2. Issue:

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ii.

iii.

iv.

v.

vi.

Was the act of the insurance commissioner considered licensing to require a contested case hearing to be held prior to the reduction to act in accordance with the APA? 3. Holding: a. There was no requirement for a contested case hearing i. The license to do business with blue cross is being jeopardized however, they do not have to accept blue crosses patients b. Rule: This does not rise to the level of something that would be constitutionally protected because there is no protection for contractual rights Kelly Downs v. Racing Commission 1. Kelly downs did not have a constitutional or statutory interest in the racetrack license a. they just had a mere expectation which is not enough to merit a contested case hearing 13 Southfield Associates v. Department of Public Health 1. 13 Southfield did not have a constitutional or statutory interest in the racetrack license a. they just had a mere expectation which is not enough to merit a contested case hearing Rogers v. Michigan state Board of Cosmetology 1. Facts: Licensee wanted to operate a school of cosmetology but the state wanted to revoke his license. 2. Issue a. What notice is P due? 3. Holding a. Two notices are required to be served upon the licensee before revocation hearing can be held 4. Rule (71 and 92 notice (opportunity to show compliance)): a. First notice i. A notice that states the facts or conduct which warrant any intended action b. Second Notice i. Follows an informal opportunity to complyIf there has been no compliance--provides a single notice for a hearing under the contested case hearing section of the APA Mars v. Board of Medicine 1. Facts: Dr. Mars was suspended fined etc.the evidence was probably extensive a. However, if he is able to show compliance for future conduct it might be mitigated somewhatdepending on the court b. There would be a trial 2. Rule: a. Even if you can show compliance, you can still be sanctioned for past conduct M & S Inc. v. Attorney General Emergency authority 1. Facts: Secretary of state suspended Ps mechanic license for allegedly committing fraud after sending two perfectly fine vehicles in that apparently needed transmission service. 2. Issue: a. Did the secretary of states suspension violate due process?

a.

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3. 4.

Holding: a. No Rule: a. Emergency authority under section 92 of the APA bypasses due process b. To protect public interest

10. Judicial Review a. General Rule: Judicial Review takes place after the agency action i. So we go from Executive action to judicial action b. Three authorities for judicial review: i. Check the statute ii. Section 631 of the Revised Judicature act iii. Art VI of the Michigan Constitution, Section 28 c. Check the statute i. If there is judicial review authority here, follow it precisely ii. Other option here: 1. Can use section 24.301 section 101 of The APA a. Must be a final order and must be from a contested case i. 13 Southfield No contested case, no protected interest to contest ii. So look to the agency first to see what happened b. Aggrieved party c. Exhausted all administrative remedies d. Section 631 of the Revised Judicature act i. If there is no authority in the statute, check here ii. Must have an order from the agency that is authorized to promulgate rules e. Article VI of the Michigan Constitution, section 28 i. This authority seals our right to judicial review of state administrative law cases ii. The legislature cannot preclude judicial review of agency decisionsthere is a constitutional right to judicial review iii. Presumption: 1. There is a presumption for judicial review 2. The hard part is picking which one and the scope f. Judicial review outline the Most Particular Controls i. Underlying statute 1. Use precisely ii. APA 101 1. Final orders of the agency action iii. Section 631 1. Any order from the agency with rule making authority (absent authority from i. or ii) 2. This does not need to be a final order iv. Article VI, Section 2 1. If no authority exists in i. ii. Or iii., then use this g. Scope of review: i. What does this mean? 1. The scope of review is the questions the court will ask themselves 2. The court will ask, how much of the agencys decision they will be able to weigh ii. General rule: The agencys record will be reviewed 1. Exceptions: a. (GET FROM WEEK 12) b. x c. x

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iii. Who decides the issue for appeal? 1. The appellant decides by filing an appeal 2. They have to plead as to why the ruling was incorrect h. Example of full judicial review analysis i. Say: Look to to underlying statute follw precisely if it exists, if it does not, then to APA section 101 ( any appeal from an agency decision requires final order, contested case, aggrieved party) 1. Will have a contested case analysis 2. Contested case when a state agency takes action because if not, it is rudimentary due process issue Bundo bisco, then if there is a contested case, there is authority under 101; but if that does not apply 3. Then go to 631 and if not 631, then VI 28 (DO ALL ANYWAY unless you can stop at one step and say whyASK WHY every sentence) ii. Then what is the SCOPE of review iii. Whatever your authority is for source, there will be a corresponding scope in the statute iv. But if you have authority in 101, then you have scope in 106 1. Look at 24.306 section 106 a. The applicable scope of review would depend on the issue the appellant raised on appeal b. B will ask which issues we will appeal on review there are at least two issues to discuss v. 24.306 section 106 provisions apply to 1. Violation of the constitution or statute a. Applies to a question of law 2. In excess of statutory authority a. Question of law 3. Made upon unlawful procedure law a. Question of law 4. Not supported by competent material and substantial evidence on the whole record a. Question of face (the default question for this) b. Means that the court looks at the agencys findings and determined whether the facts were supported by substantial evidence on the record i. Could a reasonable fact-finder have made those findings based upon that record? (Standard) the questions in NOT DID YOU AGREE? it is very sterile 5. Arbitrary and capricious or clearly an abuse a. Mixed between question of law and fact 6. Affected by other substantial i. Scope of review for 631 is the same that is contained in the constitution j. When push comes to shove i. These two (24.306 and VI 28) are fundamentally the same thing 11. So what if we are appealing that a sale occurred or not a. There was authority under 101, so what is our scope under 106? i. It was in a violation of a statute so (a) 1. This is a question of law 2. But what question is the agency going to ask itself? a. Courts will deference to the agencys interpretation of their own statute

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ROVAS there is no chevron doctrine in MI so a reviewing court will give reasonable determination to the agencys determination but the reviewing court will determine what the law is (Must discuss Rovas) i. Complaint filed by telecommunications $71 charge on their bill that was reversed and removed from the bill but Rovas went forward anyway with a complaint that the $71 invoice constituted a prohibited conduct because it was false, misleading, or deceptive so the issue on appeal was, was it false determined that it was, sup ct. reversed saying that there was no deference to be awarded c. NO CHEVRON DEFERENCE IN MI ii. When posed with questions of fact, think about competent material and substantial evidence b. What if we appeal i. That the facts were not substantial enough 1. Decoy was an unsupervised minor, there was the cashier and the subpoenaed third-party witness 2. So what findings of fact would you appeal specifically? a. Everything that the minor asserted that was contrary to your stance c. TO WMOST important cases i. Rovas (scope of review- questions of law and Detroit Symphony case questions of fact d. Judicial review / Scope of review cases i. In Re Complaint of Rovas Questions of Law 1. Overview This case concerns the courts judicial review of an agencys interpretation of a statute 2. Facts: a. The court of appeals did not properly review an agencys interpretation of a statute (public service commission held that SBC had violated a statuteupheld by app court) b. Rovas was an SBC customer who had a interruption in servicecalled SBC, SBC sent someone out to check, charged them $71 to say it the problem was within their home c. SBC later reversed the bill following Rovas complaint under the MI telecommunications act d. Both PSC and SBC appeal 3. Issue: a. What is the proper standard of review for an agencys construction of a statute 4. Holding: a. PSCs interpretation is erroneous 5. Rule: a. General rule about interpretation: The court generally reviews de novo questions of law i. De novo - Fresh start / as if reviewing for the first time b. An agencys interpretation is entitled to respectful considerationcourts give the agency unfettered deference

b.

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ii.

iii.

iv.

v.

i. But the agencys interpretation are not binding on the courts ii. Deference is given unless the interpretation is clearly erroneous c. Although the court cannot usurp legislative functionthey can ensure that it is interpreted properly i. Confined solely to presiding over contested caseslike this one fact finding is something else entirely d. Big rule: i. All final decisions, findings, orders and other rulings of an administrative officer or agency shall be subject to direct review by courts as provided by law e. The constitution provides review of: i. Whether the decision was authorized by law: and ii. Whether a hearing is required or not Analysis for questions of law: 1. Step one determine the agencys function a. Proper delegation of authority? i. De novo review ii. Statutes plain meaning controls 2. Step two did the agency exceed that authority that they were granted by the statute? Viculin v. Department of Civil Service 1. Facts: Employee was discharged from employment following an unsatisfactory rating. The dismissal was appealed to the Civil Service Board and affirmed 2. Holding Judicial Review Authority existed here in Michigan Constitutional Zrticle VI, Section 28 a. There was no final order in a contested case hearing Blue Cross v. Commissioner of Insurance 1. Facts: BC sued alleging deprivation of due process against the Commissioner of Insurance a. In this case, a hearing was not held prior to the issuance of the order (so no 101 or 631) b. Also no statutory authority 2. Issue a. Whether or not BC was denied due process 3. Holding a. No 4. Rule a. Had BC appealed properly, they may have gotten a contested case hearing but they missed the boat Human Rights Party v. Michigan Corrections Commission 1. Facts a. HRP brought action alleging that Michigan Corrections Commission and MDC had a duty to issue declaratory rulings regarding prison overcrowding b. Prisoner appealed the agencys order to do nothing 2. Issue a. Was the decision not to issue declaratory statement subject to judicial review? b. But was the agencys decision to do nothing a final order for the purposes of judicial review?

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3. Holding a. Yes b. The court analyzed this under 101 despite the fact that their was no orderthey did this because the court said they needed to create a record for the hearing since there was none 4. Rule a. Professor does not agree with this because there was no order vi. MERC v. Detroit Symphony Questions of Fact 1. Facts a. Trombone player was offered a new contract but said get yourself another boy. Later accepts the deal after someone else was hired. TBP brings suit for discharge for union activity b. The court of appeals found that the discharge of the player was not supported by substantial evidence 2. Issue a. Was the musicians discharge for unionized activities supported by substantial evidence? 3. Holding a. No, the substantial evidence test was properly applied and it was insufficient to show discharge due to union activitythe agencys decision was reversed 4. Rule a. Substantial evidence test: i. Competent, material, and substantial evidence 1. Meaning that a reasonable mind would accept as adequate to justify the conclusion 2. The record as a whole will be used a. (Hearing examiner and the Board) b. This case can be used to reverse an agencys finding 5. Analysis: a. So, could reasonable person could have concluded as the agency?: i. If yes, upheld ii. If no, then overruled iii. If in between, default to the agency b. This evidentiary standard is very narrow i. Just checks to see if there is enough evidence on the record to support the facts vii. 13 Southfield 1. Application denied there was a hope or desire but no constitutionally protected interest how do we review this? What is the question on judicial review? Whether they should have gotten a hearing a. The issue on appeal is import to determine which scope of review you are going to apply i. Fact or by law b. The authority for judicial review comes from : c. Exam look to the underlying statute d. Then to the APA e. Final order in contested case hearing no authority here

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12. Standing a. General rule i. To participate in an administrative agency action or judicial review, you must have standing ii. To have standing must have both(two part test): 1. Injury in fact; and 2. Be in the zone of interest sought to be protected by the statute b. Standing Cases i. MLBA v. Behnan Hall 1. Facts: Liquor licensees sough to enjoin MCBA to sue Hall because of the fact that they were serving alcohol on their premises without a license 2. MLBA was not able to establish injury in fact because they could not show that the sales of the hall were large enough to do any damage to their business 3. MLBA did not have standing to be enjoined to the case ii. White lake Improvement v. Association of Whitehall 1. Facts: Association of residences sued over pollution that was being put into their lake 2. Holding: They had both injury in fact and were within the zone of the statute sought to be protected a. Because: The had association standing, their interests were hurt and they were the people designed to be protected by the statute 3. Holding: Court found standing for the association 13. Primary Jurisdiction (related to exhaustion of Administrative remedies) a. Tyical facts (Travelers v. Detroit Edison): i. Could be brought in the court or the agency ii. P brings Action is brought in the court iii. D requests that the court defer its jurisdiction to agency for the following 1. Subject matter requires the agencys expertise 2. The case will have an extensive evidentiary record that is technical in nature 3. We want a consistent application of the statute and rules 4. We want uniform decision

Then to 631 - yes a. Authority is here because they have rulemaking authority and there was an order i. Certificate of need denied and the order that denied it 3. The to Article VI viii. So what is the scope of review? 1. Issue on appeal, whether due process grants a review 2. but the scope of review under 631, the scope of review is the same as it would be under Art VI a. was it authorized by law and, if there was a hearing, competent material substantial evidence 3. Since no hearing, all we have to ask was was it authorized by law (is the agency authorized by law to deny the hearing) this is up to the court to decide under Rovas 4. Since there was no protected interest, under Rovas, there is life liberty or property interest therefore no hearing (this is a question of law) we get there through 631 ix. 13 Southfield associates applies to 75% of our class !!!

2.

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b. c.

And for these reasons among other, the authority should be deferred to the agency Usually the court will defer its jurisdiction to the agency The jurisdiction is in both the court and the agency

5.

14. Exhaustion of Administrative remedies (contrast with Primary jurisdiction) a. Typical facts: i. The case must be brought to its completion at the agency b. Workers comp ex. i. If the employee sues the employer in regular court, it will be dismissed the exclusive jurisdiction is in the bureau of workers compensation c. ALL must be exhausted prior to seeking judicial branch remedies i. Have to take the case to the agency first

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