• Contesting Agency Conduct Part IV: When Can I contest an Enforcement or Adjudication Proceeding?

    What is Agency Adjudication?

    Agency adjudication is when an agency action determines the rights of one or very few individuals and has a retroactive effect. This is in contrast to a rulemaking which is an agency action that determines the rights of many individuals and has a prospective effect. Adjudication does not always proceed in a trial-like fashion in the traditional sense of a state or federal court. Like with a rulemaking, an agency can proceed on a spectrum from very informal to very formal adjudicatory proceedings. Adjudication can be as simple as a denial of an application for a permit, or as complex as a full hearing with expert witnesses and cross-examinations. Whether an agency proceeds formally or informally is a matter of agency discretion, absent an explicit statutory mandate otherwise. The amount of process given to any adjudication is only limited by constitutional procedural due process requirements.

    Procedural Due Process

    Procedural due process is the constitutional idea that the government may not deprive a person of life, liberty, or property without due process of law. In the context of administrative procedures, we are only concerned with the deprivation of liberty and property; the deprivation of life is only relevant in the context of criminal law. There are three inquiries that are made in determining whether procedural due process rights are implicated in an agency action:

    1) Is there a liberty or property interest?
    2) Has it been deprived?
    3) Without due process of law?

    Before proceeding to the discussion on procedural due process, it is worth noting the difference between procedural due process and substantive due process. Substantive due process is an area of constitutional law that focuses on what rights are so fundamental that the government has almost no or very little authority to infringe upon them. For instance, the right to privacy and the right to free speech are considered to be fundamental rights. Procedural due process is the law governing the manner and under what process the government can deprive a person of rights. Procedural due process is the mechanism that functions to ensure that any deprivation of rights is done so fairly and according to our traditional conceptions of justice.

    Is There a Liberty or Property Interest?

    Whether we possess a property interest is chiefly governed by whether we have an expectation that our property interests will be protected by the state. In the traditional sense, for example, an owner of land has a property interest in his land because the landowner expects the state to stand ready to enforce their rights in that land (e.g. to evict trespassers). Like standing ready to enforce rights, the government can act in others ways that creates rights and expectations that can lead to property interests. One of these ways is to create a right to a benefit, like social security disability benefits, or a broadcasting license. These kinds of rights are called entitlements, and there is an expectation that the government will continue to provide those entitlements so long as you continue to meet the criteria to receive those benefits.

    There are two important limitations on a person’s expectations for the continuation of government benefits: possessing a legitimate claim of entitlement and that the entitlement be economic in nature. A legitimate claim of entitlement depends on the level of need for the benefit; it must be more than an abstract need or requirement. Legitimate claims are those which people rely on in their daily lives—a reliance that may not be arbitrarily undermined. The economic requirement is fairly low and merely requires some demonstration that there is some economic value in the entitlement.

    Liberty interests are more amorphous than property interests, but are found in the same expectations analysis. While liberty interests are found in a grant of protection by the government, to be protected by procedural due process the right must consist of a material interest (i.e. an infringement or restriction on an affirmative right—a right to do something). Passive interests, like the right to one’s good name, are not protected by the procedural due process clause. While liberty rights may seem scarce in this context, they receive more robust protection under substantive due process.

    Has the Interest Been Deprived?

    Whether an interest has been deprived in the due process context depends on how it was deprived. For the purposes of procedural due process, a deprivation only occurs when an entitlement has been taken on a retail basis (i.e. deprivation to an individual). If an interest is deprived on a wholesale basis, for instance, by congress abolishing social security disability benefits for everyone, then the only recourse is through the political process. Congress is free to change the substantive law that grants the entitlement. An important limitation on this power is that congress may not abrogate procedural due process. In other words, congress cannot grant a right and then deny the right to protect it. Importantly, this limitation allows an individual to challenge the process by which an agency is able to deny the statutory benefits that it administers.

    Without Due Process? How much due process is due?

    An agency may deprive an individual of entitlements only when the process has been sufficient in light of the magnitude of the right. The amount of process due is circumstantial, and is determined by balancing three factors. First, a court will consider the importance of the private interest and the severity of the deprivation. The importance of the interest is examined on a class-wide, and not individual, basis. For instance, the importance of social security disability benefits depends on how important it is to all recipients. The more an interest is relied upon as a means of living, e.g. for food, shelter, etc…, the more important it is. The severity of the deprivation is an analysis of the hardship that would be imposed on the individual if the interest were deprived.

    Second, the court will consider the risk of error that inheres in the current procedure, and whether the requested procedure will yield a more accurate result. Generally, accuracy is seen as achieving the correct result or a more wise use of discretion. In some cases more procedure will not result in a more accuracy. For instance, where all the required an relevant information can be considered by looking at submitted documents, then a full hearing may not create a more accurate result. On the other hand, in some instances having caseworkers meet with claimants and thus put a face to the paperwork can provide an incentive to not act arbitrarily and provide a sense and belief of being dealt with fairly. In any case, this analysis is highly dependent on the interest and the procedures offered.

    Third, the court will consider governmental or public interests in the current procedures. This analysis requires the court to weigh the administrative burden and other social costs of increased procedures. For instance, an increase in procedure may increase the number of hearings and thus the costs of administering the benefit. An increase in procedure could have the perverse result of actually decreasing the efficiency and worth of the benefit. Courts generally accord substantial weight to the good-faith judgment of the individuals charged by congress with administering the benefit. There is a presumption that the current procedures are fair consideration of entitlement claims.

    It should be noted that in some cases the governmental interests may favor more procedure. For instance, holding hearings on employee dismissals may result in fewer losses of experienced personnel, which in turn saves on training costs and the loss of efficiency that comes with inexperienced staff. As with the other factors, this is a highly fact-sensitive inquiry.
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