INTRODUCTION
The statutes regarding
administrative law in the State of Arkansas have not
significantly changed since the Administrative Procedure
Act (APA) was adopted in 1967; however, attorneys outside
of state government are often not familiar with the
basic process. The APA primarily focuses on four areas:
(1) rulemaking, (2) licensing, (3) adjudication, and
(4) judicial review. This article is an overview of
the adjudication and judicial review process. It is
intended to help attorneys avoid the common pitfalls
and pratfalls of appearing before an administrative
agency.1
ADJUDICATION
The APA defines "adjudication"
as the agency process for the formulation of an Order.2
An Order is defined as the final disposition of any
matter, other than rule making, in which the agency
is required to give notice and a hearing.3 Although
there are many types of adjudications, this article
will concentrate on licensee disciplinary actions, which
include actions against licensees and non-licensees
alleged to have violated some provision of a board's
law or rules. An attorney should consult the specific
statutes governing the agency to determine if the law
sets forth a specific procedure.
The formal process starts
with a notice of hearing that must contain "a short
and plain statement of the matters of fact and law asserted."4
The notice is sufficient as long as a party to an administrative
proceeding is reasonably apprised of the issues in controversy
and is not misled.5 It is not necessary to file an "answer"
to the notice because the Rules of Civil Procedure do
not apply to administrative proceedings.6
The notice must also set
a time and place for the hearing.7 The APA does not
set a minimum notice requirement; however, due process
clearly requires a "reasonable" amount of
notice before a hearing can be held. In addition, an
agency's own statutes or rules may establish a notice
requirement. Requests for continuances are granted or
rejected by the agency itself, and a failure to grant
a continuance is reviewed on an abuse of discretion
standard.8 The notice of hearing may be served by first-class
mail unless the agency's statutes or rules state otherwise.9
The Rules of Civil Procedure
do not apply as in traditional civil actions; therefore,
there is very limited discovery in administrative cases.
Arkansas Code Annotated § 25-15-208(a)(3) allows
limited discovery in cases where "an agency seeks
to revoke, suspend, or otherwise sanction a license
or permit holder."10 In such cases, the respondent,
upon request, is entitled to the names and addresses
of persons whom the agency intends to call as witnesses;
any written or recorded statements and the substance
of any oral statements made by the license or permit
holder; any reports or statements of experts; and any
books, papers, documents, photographs, or tangible objects
that the agency intends to use in the hearing or which
were obtained from or belong to the license or permit
holder. Perhaps the best "discovery" method
in administrative hearings is to request information
pursuant to the Arkansas Freedom of Information Act
(FOIA).11
Generally, one cannot
stop an administrative hearing from occurring by seeking
an injunction or a declaratory judgment because all
administrative remedies must be exhausted prior to bringing
an action in circuit court.12 Even if the respondent
claims the agency action is based upon unlawful procedure,
he or she must raise the issue in a timely fashion at
the administrative hearing and then on appeal as well.13
The administrative hearing
will be conducted much like a traditional trial, but
with a reduced level of formality. The APA allows flexibility
to an agency in how the hearings are conducted.14 Most
administrative hearings are held in front of the board
in question. The board will function much like a judge
in a non-jury case; it will determine the law and the
facts. While the statutes allow a board to use a "referee"15
to make determinations, most do not. However, it is
common for there to be a "hearing officer"
present. In this scenario the board still retains the
authority to make all determinations of law and fact,
but a hearing officer is utilized to control the procedural
aspects of the hearing.
It is possible to challenge
a board member for alleged bias. Prior to the hearing,
any party may file an affidavit alleging bias or some
other reason for disqualification.16 The agency itself
will rule on the motion.17 Most professional boards
have members that are from the profession or industry
in question. It is generally not a sufficient "bias"
that the board member is in competition with the respondent.18
However, as board members are acting in a quasi-judicial
nature, board members are held to the appearance of
bias standard and are disqualified if there is a "reasonable
suspicion of unfairness."19
If the agency has authority
to issue subpoenas for the hearing, the respondent has
the right to have them issued as well.20 A request to
issue a subpoena must be made to the agency, and the
agency will issue the subpoena.21 However, not all agencies
have subpoena power. One should check the individual
agency's statutory powers and Ark. Code Ann. §
25-15 104. If the agency does not have subpoena power,
there is no right to issue subpoenas by either the agency
or the respondent.
The hearing will proceed
much like a trial, with witnesses being called and cross-examined
and exhibits introduced. Normally, a court reporter
will be present and the witnesses will be sworn. There
may or may not be opening statements. The board's attorney
usually serves as the "prosecutor" for the
hearing. It is his or her function to put on evidence
sufficient to show that the respondent has in fact violated
the laws or rules in question. The burden of proof is,
of course, on the agency to show that there has been
a violation, and the agency will present its evidence
first. A critical difference between an administrative
hearing and a civil trial is that the rules of evidence
do not apply.22 The only issue on admissibility of evidence
is a logical relevance test. Arkansas Code Annotated
§ 25-15-213(4) states in part: "irrelevant,
immaterial, and unduly repetitious evidence shall be
excluded. Any other oral or documentary evidence, not
privileged, may be received if it is of a type commonly
relied upon by reasonably prudent people in the conduct
of their affairs." Hearsay is admissible, but hearsay
alone does not constitute substantial evidence.23
The respondent has the
right to cross-examine witnesses and to put on evidence
in his or her defense.24 Board members also have the
right to ask questions of the witnesses. Neither party
is able to invoke "the rule" on witnesses.
The Rules of Evidence do not apply to administrative
hearings; therefore, Rule of Evidence 615 is not applicable.25
There is nothing within the APA indicating that witnesses
can be excluded from the hearing. Further, the "open
meeting" provisions of the FOIA appear to make
it impossible to invoke "the rule."26
At the conclusion of all
the evidence, the board will normally immediately begin
deliberation. Unless the board's statute otherwise allows,27
the deliberations will be in open meeting pursuant to
the FOIA.28 While there is no requirement that the board
reach a decision on the date of the hearing, in most
cases a decision will be made and announced at the hearing.
The announced ruling must be put in writing and mailed
to the respondent.29
Practical Advice for the
Adjudication:
1. The attorney should
research the empowering statute of the agency to see
what unique powers it does and does not have. For instance,
can the agency enforce its law against unlicensed individuals?
Can the agency impose monetary fines? Are there specific
grounds in the statute for revoking a license? In addition,
one should review the rules of the agency.
2. Many cases may be resolved
without the need for a hearing. The practitioner should
contact either the attorney for the board or the board's
administrator to discuss the possibility of some type
of settlement or consent order.30
3. If an appearance before
the board is required, many times the best approach
is the "hat in hand" defense. The respondent
might simply admit "guilt," offer an explanation
for the conduct, pledge to never violate the statute
again, and ask for mercy. Legal interpretations will
most always be resolved in favor of the staff. Unless
the respondent feels that factual issues can be proven
that are different than what are contained in the notice
of hearing, contesting a hearing is often not in the
respondent's best interest.
4. New issues cannot be
raised upon appeal.31 The respondent must be certain
to raise and present to the board all issues. Even constitutional
issues must be raised at the administrative hearing.32
While a board does not have the authority to declare
its own statutes unconstitutional, such issues should
first be raised at the administrative level.33 However,
technical legal arguments will often be unsuccessful
and should not be dwelled upon because the decision
makers at the administrative level are not attorneys.
JUDICIAL REVIEW
Judicial review of an
agency adjudication is generally governed by A.C.A.
§ 25-15-212. As previously mentioned, an attorney
should consult the specific statutes governing the agency
to determine if the law sets forth a specific review
procedure. The APA narrowly prescribes appellate and
circuit court review, and it, rather than the Rules
of Civil Procedure, governs the process.34
Judicial review is available
to any person injured by a final agency action in a
case of adjudication. Arkansas Code Annotated §
25-25-212(a) provides:
In cases of
adjudication, any person, except an inmate under sentence
to the custody of the
Department of Correction, who considers himself or herself
injured in his or her
person, business, or property by final agency action
shall be entitled to judicial
review of the action under this subchapter. Nothing
in this section shall
be construed to limit other means of review provided
by law.
The foregoing provision has three primary components
that must be satisfied: (1) case of adjudication, (2)
final agency action, and (3) injury. As discussed above,
every agency decision does not constitute a case of
adjudication.35 If there has been no adjudication before
the administrative agency, then there has been no "final
agency action" to be reviewed pursuant to Ark.
Code Ann. § 25-15-212.36 The circuit court lacks
jurisdiction if the agency has not rendered a final
decision in an adjudication.37 Finally, the person filing
the petition must have already sustained or be in immediate
danger of sustaining an injury to his person, business,
or property as a consequence of the final agency action.38
Proceedings for review
are initiated by filing a petition for judicial review
within 30 days after service of the agency's final decision.39
The petition may be filed in the circuit court of (1)
any county in which the petitioner resides or does business
or (2) Pulaski County.40 The petitioner must serve the
agency with a copy of the petition in accordance with
the Rules of Civil Procedure.41 The filing of a petition
does not automatically stay enforcement of the agency
decision; however, the court has the authority to issue
a stay.42
The agency must file the
record of the proceeding within 30 days after service
of the petition.43 The record may be shortened by stipulation
of all parties to the review.44 The court may extend
the time for filing the record to a maximum of 90 days.45
Although the agency must pay the cost of the preparation
of the record, it may recover the cost if the agency
is the prevailing party.46 An administrative agency
is not required to file an answer to a petition for
judicial review.47
The review of an agency
decision by the circuit courts and the appellate courts
is limited. The review by the circuit court is without
a jury and is confined to the record.48 In order to
preserve an issue for review, it must be raised and
ruled upon at the agency level.49 If requested, the
circuit court must hear oral argument and receive written
briefs.50 The court may remand the case to the agency
for the presentation of additional evidence if the petitioner
establishes the evidence is material and that there
were good reasons for failure to present the evidence
in the proceeding before the agency.51 The Arkansas
Court of Appeals has held that when a party applies
for leave to present additional evidence, the court
should first review the request to determine if the
party was diligent.52 The court may then in the exercise
of its discretion conduct a hearing to determine if
the additional evidence fits within the requirements
of the statute.53 In addition, in cases of alleged irregularities
in procedure before the agency that are not shown in
the record, the court may hear testimony regarding that
issue.54
Arkansas Code Annotated
§ 25-15-212(h) provides that the circuit court
may reverse or modify the decision of the agency if
the substantial rights of the petitioner have been prejudiced
because the administrative findings, inferences, conclusions,
or decision are:
(1) In violation of constitutional
or statutory provisions;
(2) In excess of the agency's
statutory authority;
(3) Made upon unlawful
procedure;
(4) Affected by other
error or law;
(5) Not supported by substantial
evidence of record; or
(6) Arbitrary, capricious,
or characterized by abuse of discretion.
The Arkansas Supreme Court has stated that the administrative
decision will be upheld if it is supported by substantial
evidence and is not arbitrary, capricious, or characterized
by an abuse of discretion.55 The Court has also held
that substantial evidence is evidence that is valid,
legal, and persuasive and that a reasonable mind might
accept to support a conclusion and force the mind to
pass beyond speculation and conjecture.56 The Court
reviews the testimony to determine whether it would
support the finding that was made, not whether the testimony
would have supported a contrary finding.57 It is the
prerogative of the board to believe or disbelieve any
witness and to decide what weight to accord the evidence.58
Appeals of circuit court
decisions are governed by the rules of appellate practice;
however, appellate review by the Supreme Court and Court
of Appeals is limited in scope. The appellate court's
review is directed not toward the circuit court, but
toward the decision of the agency.59 The rules governing
judicial review of decisions of administrative agencies
are the same for both circuit and appellate courts.60
CONCLUSION
This article is simply
an overview of the adjudication and judicial review
process. Every attorney should read the APA and the
statute of the agency involved in the administrative
proceeding. It is hoped that this article will help
attorneys avoid common errors and mistakes that affect
the quality of representation in administrative proceedings.
ENDNOTES
1. For purposes of this article, the terms "agency,"
"board," and "commission" are
used interchangeably.
2. Ark. Code Ann. § 25-15-202(1)(A).
3. Id. § 25-15-202(5).
4. Id. § 25-15-208(a)(2)(C).
5. See Savina Home Indus., Inc. v. Secretary
of Labor, 594 F.2d 1358 (10th Cir. 1979).
6. Ford v. Keith, 338 Ark. 487, 996 S.W.2d
20 (1999).
7. Ark. Code Ann. § 25-15-208(a)(2)(A).
8. Brannan v. Everett, 5 Ark. App. 271,
636 S.W.2d 301 (1982).
9. Ark. Code Ann. § 25-15-211(c).
10. See also Ark. Code Ann. § 25-15-213(3).
11. Id. § 25-19-101 et. seq.
12. McLane Southern, Inc. v. Davis, 80 Ark.
App. 30, 90 S.W.3d 16 (2002).
13. Arkansas Professional Bail Bondsman Licensing
Bd. v. Frawley, 350 Ark. 444, 88
S.W.3d 418 (2002).
14. Ark. Code Ann. § 25-15-213(2)(A).
15. Id. § 25-15-213(2)(A)(iii).16. Id.
§ 25-15-213(2)(C).
17. Id. § 25-15-213(2)(C).
18. See generally Boulis v. State Bd. of Chiropractic,
729 A.2d 645 (Pa.Cmwlth. 1999).
19. Arkansas Racing Commission v. Emprise Corp.,
254 Ark. 975, 497 S.W.2d 34 (1973).
20. Ark. Code Ann. § 25-15-208(a)(7).
21. Id. § 25-15-208(a)(7).
22. Arkansas Cont. Lic. Bd. v. Butler Constr. Co.,
295 Ark. 223, 748 S.W.2d 129 (1988);
Thomas v. Committee "A" Ark. Plant
Bd., 255 Ark. 517, 501 S.W.2d 248
(1973).
23. Garner v. Foundation Life Ins. Co. of Ark.,
17 Ark. App. 13, 702 S.W.2d 417 (1986);
Evans v. Arkansas Racing Commission, 270 Ark.
788, 606 S.W.2d 578
(1980).
24. Ark. Code Ann. § 25-15-208(a)(4).
25. See generally Arkansas Cont. Lic. Bd. v. Butler
Constr. Co., 295 Ark. 223,
748 S.W.2d 129 (1988);
Thomas v. Committee "A" Ark. Plant Bd.,
255 Ark. 517, 501 S.W.2d
248 (1973).
26. Ark. Code Ann. § 25-19-106; Williams v.
Arkansas State Board of Physical Therapy,
79 S.W.3d 273 (Ark. June 26, 2003).
27. For example, the Arkansas Appraiser Licensing
and Certification Board may meet
in executive session to conduct disciplinary hearings.
Ark. Code Ann. § 17-14-205.
28. Ark. Code Ann. § 25-19-106.
29. Id. § 25-15-210(b) and (c).
30. Id. § 25-15-208(b).
31. Brown v. Arkansas State HVACR Lic. Bd.,
336 Ark. 34, 984 S.W.2d 402 (1999).
32. McQuay v. Arkansas State Board of Architects,
337 Ark. 339, 989 S.W.2d 499
(1999).
33. AT&T; Communications of the Southwest v.
Arkansas Pub. Serv. Comm'n., 344
Ark. 188, 40 S.W.3d 273 (2001).
34. Whitlock v. G.P.W. Nursing Home, Inc.,
283 Ark. 158, 672 S.W.2d 48 (1984).
35. See Viswanathan v. Miss. County C.C. Board,
318 Ark. 810, 887 S.W.2d 531 (1994).
36. Frawley, supra (A circuit court is without
authority to enjoin a licensing board from
conducting a hearing where the petitioner has failed
to exhaust his or her administrative
remedies).
37. Id.; McLane Southern, Inc. v. Davis,
80 Ark. App. 30, 90 S.W.3d 16 (2002); Viswanathan,
supra.
38. Alcoholic Bev. Control v. Muncrief, 74
Ark. App. 221, 45 S.W.3d 438 (2001).
39. Ark. Code Ann. § 25-15-212(b)(1).
40. Id. § 25-15-212(b)(1).
41. Id. § 25-15-212(b)(2).
42. Id. § 25-15-212(c).
43. Id. § 25-15-212(d)(1).
44. Id. § 25-15-212(d)(3).
45. Id. § 25-15-212(d)(1).
46. Id. § 25-15-212(d)(2).
47. Whitlock, supra.
48. Ark. Code Ann. § 25-15-212(g).
49. Holloway v. Arkansas State Bd. of Architects,
101 S.W.3d 805
(Ark. 4-3-2003); Arkansas
Contractors Licensing Bd. v. Pegasus Renovation Co.,
347 Ark. 320, 64 S.W.3d 241 (2001); AT&T; Communications
of the Southwest v.
Arkansas Pub. Serv. Comm'n., 344 Ark. 188, 40
S.W.3d 273 (2001).
50. Ark. Code Ann. § 25-15-212(g).
51. Id. § 25-15-212(f).
52. Marshall v. Alcoholic Bev. Control Bd.,
15 Ark. App. 255, 692 S.W.2d 258 (1985).
53. Id.
54. Ark. Code Ann. § 25-15-212(g).
55. Williams, supra.
56. Id.
57. Id.
58. Id.
59. Id.
60. Marshall, supra.
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