8. What is the judiciary’s authority to review administrative court decisions?
The judiciary has 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:
⁃ 1) there is substantial evidence to support the agencies decision, and
⁃ 2) 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.
• 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?