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Authority to Review Administrative Court Decisions

Cite this article as: Jason Mance Gordon, "Authority to Review Administrative Court Decisions," in The Business Professor, updated January 4, 2015, last accessed March 29, 2020, https://thebusinessprofessor.com/knowledge-base/authority-to-review-administrative-court-decisions/.
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Review Administrative Court Decisions
This explains the authority of the court to review decisions made by administrative courts.

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What is the judiciary’s authority to review administrative court decisions?

The judiciary has the power to review agency decisions pursuant to either the procedures written into the delegating statute or pursuant to the Administrative Procedures Act (APA).

    • Note: The APA is a federal act, but state administrative agencies often follow similar procedures.

Review Under the APA – The Federal Administrative Procedure Act provides for review of administrative court decisions except where statutes preclude judicial review or the agency is vested with sole discretion in a matter. An agency is vested with sole discretion in matters that do not affect a citizen’s constitutional rights.

Standing – To establish standing to challenge an administrative court’s decision, the plaintiff must have been harmed or suffered a loss pursuant to the administrative court’s ruling. Evidence of loss may be economic or limit an individuals established rights.

Exhaustion of Remedies – The judiciary will generally only intervene in an administrative court’s decision when the individual seeking review has exhausted all available administrative remedies and procedures available. This means that the individual must first pursue appeal options within the agency. Requiring that all administrative actions be final ensures that the court does not interrupt the administrative process. Courts do, however, retain the authority to intervene before the exhaustion of administrative remedies if seeking such remedies would be useless or the harm is immediate and severe.

Issues of Jurisdiction – In some situations, an injured party will file a court action challenging an administrative action. In such situations, judicial resolution of the claim requires further resolution of issues specifically tasked to the administrative agency under the enabling statute. In such a case, the court will suspend the legal action until the administrative agency resolves these issues.

Review of Facts – When an individual seeks review of the administrative court’s decision, the trial court will generally accept any facts in the administrative record that are supported by “substantial evidence”. The standard for substantial evidence it that there must be material evidence from which a reasonable person might reach the same conclusion as did the agency. “De novo” review is when the court disregards the agency’s findings of fact and takes evidence anew.

Standard of Review (arbitrary & capricious) – The court will review the administrative decision based upon the procedures established by Congress, the record from the administrative hearing, and the reasons and basis for the administrative court’s decision. The court will review the agency’s decision to determine if it is “arbitrary and capricious”. That is, there must be a finding of fact that:

  • there is substantial evidence to support the agencies decision, and
  • the reasoning applied by the agency is based upon applying the facts to the state of the law.

There are limited situations which allow a party to directly challenge an administrative court’s decision without first exhausting all administrative procedures. These exceptions may be linked to exigency or when administrative review would be useless.

Discussion: Do you think the requirement that a party exhaust all administrative remedies prior to judicial review is appropriate? Are there any negative consequences to this approach? Do find any issue with the fact-finding process or the court’s acceptance of facts presented to the administrative agency.

Discussion Input

  • Some would argue that the requirement to exhaust all administrative remedies before challenging an administrative court’s determination is unduly burdensome. One issue is that the administrative process takes a great deal of time. Another is that is can cost additional resources to go through this process. Those who believe it is appropriate might focus on the efficiency of the administrative court. There is an argument that this keeps the federal judiciary from being overwhelmed.

Practice Question: John owns a chemical fertilizer business located in Montana. The Environmental Protection Agency (EPA) inspected John’s operations and determined that his product does not meet EPA guidelines for a specific chemical compound content. The EPA issues a cease and desist order from further selling the product and levies a fine on John’s business. What are John’s options for challenging the EPA’s actions?

Proposed Answer

  • John  will have to exhaust all the available administrative remedies and procedures available. This means that he must challenge the agency’s action internally. This may mean initiating an administrative action. If John does not prevail in the administrative action, he must pursue appeal options within the agency. The court will not interfere at this level; it will leave all the administrative process to be concluded. Courts do, however, retain the authority to intervene before the exhaustion of administrative remedies if seeking such remedies would be useless or the harm is immediate and severe. If the agency appeal is not successful, John can apply for a review under the Administrative Procedures Act. The court will therefore have an opportunity to hear and determine the matter. The court can decide to administer evidence as it was tendered before the administrative agency or decide to take use its fact-finding process so as to determine the manner effectively.

Academic Research

Antharvedi, Usha, Judicial Review of Administrative Actions and Principles (March 11, 2008). Available at SSRN: https://ssrn.com/abstract=1104955 or http://dx.doi.org/10.2139/ssrn.1104955

Thomas, Robert and Tomlinson, Joe, A Different Tale of Judicial Power: Administrative Review as a Problematic Response to the Judicialisation of Tribunals (September 24, 2018). Public Law (Forthcoming). Available at SSRN: https://ssrn.com/abstract=3254119

Motomura, Hiroshi, Judicial Review in Immigration Cases after Aadc: Lessons from Civil Procedure. Georgetown Immigration Law Journal, Vol. 14, pp. 385-452, 2000. Available at SSRN: https://ssrn.com/abstract=248229

Dana, David A. and Barsa, Michael, Judicial Review in an Age of Hyper-Polarization and Alternative Facts (February 13, 2018). Northwestern Public Law Research Paper No. 18-05. Available at SSRN: https://ssrn.com/abstract=3123331 or http://dx.doi.org/10.2139/ssrn.3123331 ps://ssrn.com/abstract=1367244

Bull, Reeve and Ellig, Jerry, Judicial Review of Regulatory Impact Analysis: Why Not the Best? (03/09/2017). MERCATUS WORKING PAPER. Available at SSRN: https://ssrn.com/abstract=3191363 or http://dx.doi.org/10.2139/ssrn.3191363

Garry, Patrick M., Judicial Review and the ‘Hard Look’ Doctrine. Nevada Law Review, Vol. 7, No. 1, 2006. Available at SSRN: https://ssrn.com/abstract=1028834

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