Asimow, Michael

English

University of San Diego

COMMENTARYince 1989, the California Law Revi-sion Commission has been engaged a mammoth project to draft newAdministrative Procedure Act (APA) ad-judication Fprovisions for legislative con-sideration. This project should be com-pleted late in 1994 for submission to thelegislature in 1995.3 However, the Attor-ney General opposes enactment of thestatute as presently drafted. 4 The AttorneyGeneral's opposition will require theCommission to rethink a number of cen-tral provisions of the draft.Readers of this journal with a profes-sional interest in administrative law needto know about the proposed new APA.It will affect the practice of every gov-ernment and private administrative law-yer. Make your voice heard. Get a copyof the proposed Act5 and write to theCommission if you have suggestions orif you disagree with particular provisionsor with the Attorney General's position.The Commission is extremely open topublic comment, but time for makingchanges in the Act is running short.The new APA is designed to cover ad-judication by all California state agencies. 6At this point, a few agencies whose adju-dication is sui generis have been ex-cepted, 7 but all the others are covered. Cal-ifornia's existing APA probably covers lessthan 5% of the total number of adjudica-tions by state agencies. 8 Thus, the newAPA will have massively greater coveragethan existing law.9 But this is hardly a rad-ical suggestion: The federal governmentand virtually every other state have an APAthat covers adjudication in all agencies.California lags far behind everyone else inthis respect.Once adopted, the new Act will makeadministrative law a real legal specialty.No longer will we think of ourselvesonly as tax lawyers, workers' compensa-tion lawyers, energy lawyers, labor law-yers, or professional licensing lawyers.We will all be administrative lawyers,and all of us will try our administrativecases under the same statute. The prece-dents applicable to one agency willapply to all. You won't have to learn newropes to practice before a new agencybecause it will function under a familiarstatute; in addition, as discussed below,the new Act will require the adoption ofa convenient code of procedural regula-tions and will also create precedent de-cisions. There can be continuing legaleducation courses about administrativelaw and better books about Californiaadministrative law. The Act will usher ina new era of more informal proceedings,hearings over the telephone, and muchgreater utilization of alternative disputeresolution (ADR) techniques. Thus, thenew Act will signal a revolutionary changein the professional culture of many Cal-ifornia lawyers.The Act does not radically change theexisting system of adjudication. Thus, itpreserves but does not expand the Officeof Administrative Hearings (OAH), Cali-fornia's central panel of administrativelaw judges (ALJs). Nor does it stripagency heads of the power to make thefinal decision in adjudicatory cases. 10What then would the new Act do?- It would make available all types ofADR techniques, including mediationand arbitration. Under present law, thelegality of ADR in administrative adju-dication is questionable.- It would introduce an informal hear-ing in which the presiding officer coulddispense with cross-examination andother courtroom theatrics. Informal hear-ings would be used when there is no dis-puted issue of material fact, in cases in-volving relatively small stakes, or as pro-vided by regulations. The existing APAprovides only for formal hearings.- It would make certain basic protec-tions applicable to all agencies. For ex-ample, ex parte contacts with agencyheads, which are now tolerated in someagencies, would be prohibited. There ispresently no provision for the separationof prosecutory and advocacy functionsfrom adjudicatory functions. The Actwould make separation of functionsmandatory in all adjudication."l- The Act would encourage all agen-cies to maintain a system of precedentdecisions so that agency law could beknown to all, not just to insiders.- The Act would require that review-ing courts give great weight to ALJ find-ings that are based on the demeanor ofwitnesses. 12 Under present law, agencyheads may cast aside such findings andsubstitute their own without having seenor heard the witnesses.- The Act would adopt a system ofemergency hearings under which allagencies could act promptly in situationsthreatening public health or welfare.13 Itwould also provide for declaratory or-ders, the administrative equivalent of de-claratory judgments. Declaratory ordersprovide a way for an agency to furnishreliable, binding guidance on problem-atic transactions without having to firstcharge someone with a violation of law.- The Act would give agencies sub-stantial power to make ALJ decisionsfinal or to limit review by the agencyheads of ALJ decisions.One difficult problem in drafting anew Act was to preserve the protectionsprovided by the existing APA while al-lowing other agencies sufficient flexibil-ity. Administrative adjudication spans avast range of matters, from the twenty-minute hearings provided by the Unem-ployment Insurance Appeals Board tolengthy and complex cases involvingwater rights, energy facility siting, or un-fair labor practices. It is not realistic andwould be very inefficient to require thatevery agency follow exactly the sameprocedures. Instead, it is clear that agen-cies need flexibility to design their ownprocedures. Yet the Commission did notwish to reduce the existing level of pro-tection provided by the APA with respectto practice before the agencies that itcovers.Take, for example, the question of dis-covery. The existing APA provides for asystem of discovery that consists largelyof inspection of files and exchange of wit-ness lists.14 Some agencies provide muchgreater discovery (such as the depositionpractice of the Workers' Compensation Ap-peals Board), while others provide for nodiscovery at all. It seems inappropriate tomandate a single, inflexible system of dis-covery for all the disparate types of adju-dication. On the other hand, the discoverysystem in OAH agencies is working welland should not be disturbed.15California Regulatory Law Reporter . Vol. 14, Nos. 2&3 (Spring/Summer 1994)LAW REVISION COMMISSIONNEARS COMPLETION OF NEW APABy Michael Asimow1COMMENTARYThis drafting problem was solved byproviding for a system of "template"procedure applicable to all adjudicatingagencies not covered by the existingAPA. Under the template approach, cer-tain provisions of the Act (such as re-strictions on ex parte contacts and sepa-ration of functions) will apply to allagencies. As to all the other provisionsin the Act, however, non-APA agenciesmay either follow the provisions appli-cable to OAH agencies or adopt regula-tions that design their own procedures.If they fail to adopt regulations, the pro-visions relating to OAH agencies willfunction as the default rules.In order to design their own procedures,non-OAH agencies must adopt regulationsin compliance with the nilemaking provis-ions of California's APA. 16 This is one ofthe reasons the Attorney General and manyagencies object to the current draft. Agen-cies are understaffed and confronted withsevere budgetary austerity. They are op-posed to bearing the considerable costs ofrulemaking, particularly including the needto pass the regulations through the Officeof Administrative Law (OAL).The Commission took heed of thisobjection by allowing agencies ampletime to complete the rulemaking process;the Act would not go into effect untilJuly 1, 1997. Moreover, the Act specif-ically provides for the adoption of in-terim regulations that would not expireuntil March 31, 1999. It also providesthat OAL will not have power to disap-prove procedural regulations adoptedduring this period because the do notmeet the "necessity" standard.' 7 To theextent that an agency procedural regula-tion has already been properly adopted,it would not be necessary to go throughrulemaking proceedings to readopt it.And agencies could, if they wish, simplyadopt the default rules provided in theAct for OAH agencies without goingthrough any rulemaking proceeding.18Nevertheless, it seems clear that atleast some agencies will have to bearsome costs of going through rulemaking.But consider the upside: The public con-cerned with the particular agency will,for perhaps the first time, have an op-portunity to furnish input about what theagency's procedures should look like.Many of the procedural regulations fol-lowed by California agencies are incom-plete, outmoded, or inaccurate descrip-tions of existing practice. The revisedAPA will require agencies to adopt aproper code of procedural regulations.Agencies will have to solicit public com-ment and consider and respond to thecomments they receive. It seems to theCommission that a one-time public pro-ceeding to determine the proceduralrules that govern an agency's adjudica-tion is well worth its cost.The Attorney General expressed sup-port for many of the proposals in the cur-rent draft, such as those relating to ADRand ex parte contacts, and endorsed theidea of making them applicable acrossthe board. However, the AG opposed theidea of making the rest of the statute ap-plicable to all agencies. He is very con-cerned about the cost of rulemaking andthe likelihood of other transitional costs,such as litigation arising out of the newlaw. He does not believe that the benefitsof the new law outweigh those costs.19The Commission has not yet decidedwhether to push forward with a com-prehensive approach or to accept theAG's more modest proposal.In the author's opinion, the benefitsof a comprehensive new APA clearlyoutweigh the transitional costs of puttingit into place. I believe that the proposedact is a once-in-a-lifetime opportunity tobuild a new system of administrative lawfor the generations that will come afterus. We can be pioneers, just like the Ju-dicial Council whose 1945 report gavebirth to our existing APA.Once more, I say: Readers of the Cal-ifornia Regulatory Law Reporter, takeheed! This is important. If you like whatthe Commission is doing, say so-nowand during legislative consideration ofthe bill. If you agree or disagree with theAttorney General, let him and the Com-mission know about it. If you think thedraft can be improved, tell us about itnow, so that the Commission can con-sider appropriate modifications. Speaknow or forever hold your peace.ENDNOTES!. Professor of Law, UCLA School ofLaw. The author welcomes inquiriesabout the Law Revision project. Hisphone number is (310) 825-1086. Theopinions expressed in this article are theauthor's alone and should not be attrib-uted to the Commission or its staff.2. I have been the consultant for thisproject and have written seven studiesabout administrative procedure reformand judicial review. These, along withthe current draft of the legislative pro-posal, are available from the CaliforniaLaw Revision Commission, 4000 Mid-dlefield Rd., Ste. D-2, Palo Alto, CA 94303.The Commission's phone number is (415)494-1335. I have published an articlesummarizing the first three of these stud-ies. Michael Asimow, Toward a NewCalifornia Administrative ProcedureAct: Adjudication Fundamentals, 39UCLA L. REV. 1067 (1992). Another ar-ticle about the scope of judicial reviewis forthcoming.Additionally, readers of the Califor-nia Regulatory Law Reporter may recallmy summary article introducing them tothis massive project. 9:3 CAL. REG. L.REP. I (Summer 1989).3. The statute to be submitted to thelegislature will cover adjudication proce-dure but not judicial review. The Com-mission hopes to submit a judicial re-view statute to the legislature in the fu-ture.4. Letter from Attorney General Dan-iel E. Lungren to the California Law Re-vision Commission (May 11, 1994).5. See supra note 2.6. More precisely, the Act would gov-ern a decision by an agency "if, underthe federal or state constitution or a stat-ute, an evidentiary hearing for determi-nation of facts is required for formula-tion and issuance of the decision." Pro-posed CAL. GOV'T CODE § 63 1.010, cur-rently embodied in the Commission'sMemorandum 94-26 (June 1, 1994). Bythe time this article is published, theCommission will have replaced Memo-randum 94-26 with a revised draft. Nev-ertheless, citations herein to provisionsin the proposed Act will be to Memoran-dum 94-26.7. For example, the Commission ex-empted Public Utilities Commission(PUC) adjudications from the statute be-cause of the unique nature of the PUC'sratemaking adjudications; trying to ac-commodate PUC practice created seriousdrafting problems and greatly compli-cated the draft statute. Early on, theCommission exempted the University ofCalifornia because of the University'sconstitutional autonomy. It has exemptedthe various proceedings conducted bythe Department of Corrections (such asparole revocation). It also exempted pro-ceedings by the Agricultural Labor Re-lations Board and Public Emnployees Re-lations Board for worker certification butnot unfair labor practices. Several otherpossible exemptions remain under con-sideration at this writing.8. The adjudication portion of the ex-isting APA covers mostly occupationallicensing agencies plus a few others. SeeCAL. GOV'T CODE § 11501.9. For example, the Act will cover theUnemployment Insurance Appeals Board,the Workers' Compensation AppealsBoard, the State Personnel Board, theState Board of Equalization's tax hear-I California Regulatory Law Reporter - Vol. 14, Nos. 2&3 (SpringlSummer 1994)

Law Revision Commission Nears Completion of New APA

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Law Revision Commission Nears Completion of New APA

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