Appeals within agencies
Judicial Deference to Agency Adjudication
When administrative agencies act in adjudicating disputes—often through administrative law judges or hearing officers—courts must determine the appropriate level of deference to the agency’s findings and decisions. Judicial deference reflects the recognition that agencies have:
Expertise in their specialized fields,
Statutory authority granted by Congress,
Procedural mechanisms to gather and evaluate evidence.
Types of Deference in Agency Adjudication
Deference to Factual Findings
Courts generally give “substantial evidence” deference to agency factual findings in formal adjudications.
Courts will uphold findings supported by substantial evidence on the record as a whole, even if they might have reached a different conclusion.
Deference to Legal Interpretations
Deference depends on the context—whether it is a formal adjudication, informal adjudication, or rulemaking.
Deference to Procedural Decisions
Courts generally allow agencies discretion in managing their own procedures, provided they comply with minimum due process.
Key Cases Explaining Judicial Deference to Agency Adjudication
1. Universal Camera Corp. v. NLRB (1951)
Facts:
The National Labor Relations Board (NLRB) made findings of fact in an unfair labor practice case. The employer challenged the findings.
Holding:
The Supreme Court held that courts must apply the “substantial evidence” standard when reviewing agency factual findings in formal adjudications.
Significance:
Established that courts should defer to agencies’ findings if supported by substantial evidence, considering the entire record.
2. SEC v. Chenery Corp. (1947) (First Chenery Case)
Facts:
The SEC made findings and imposed sanctions after an enforcement adjudication.
Holding:
The Court stressed that courts must uphold an agency’s decision if the agency explains its rationale, even if the agency’s reasoning was developed during litigation.
Significance:
Affirmed that courts give deference to agencies’ legal reasoning in adjudications if supported by the record.
3. Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc. (1984)
Facts:
EPA issued a regulation interpreting an ambiguous statute, challenged in court.
Holding:
Although Chevron is mostly about rulemaking, it applies to legal interpretations made in adjudications too. Courts defer to agencies’ reasonable statutory interpretations.
Significance:
Created the two-step Chevron test:
Has Congress spoken clearly?
If not, is the agency’s interpretation reasonable?
4. Thomas Jefferson University v. Shalala (1994)
Facts:
The Department of Health and Human Services made factual findings and determinations in an adjudication concerning hospital reimbursement.
Holding:
The Court held courts must defer to agency factual findings supported by substantial evidence but review legal conclusions de novo (without deference).
Significance:
Clarifies the division of review: factual findings get substantial evidence deference, legal conclusions get less or no deference depending on the context.
5. Kisor v. Wilkie (2019)
Facts:
The Veterans Administration interpreted a regulation in a benefits adjudication.
Holding:
The Supreme Court clarified the scope of Auer deference (deference to agency interpretations of their own ambiguous regulations), imposing strict conditions before courts defer.
Significance:
Refined when courts should defer to agency interpretations in adjudications, emphasizing the need for genuine ambiguity and authoritative agency position.
6. Morgan v. United States (1936)
Facts:
A railroad worker challenged the process of an administrative hearing and subsequent agency decision.
Holding:
The Court recognized that agencies have discretion in adjudicatory procedures, but courts must ensure fairness and legality of the decision.
Significance:
Early case recognizing judicial deference to agencies’ procedural management, but subject to review for fairness.
7. Richardson v. Perales (1971)
Facts:
Social Security claimant challenged the use of written medical reports in an administrative hearing.
Holding:
The Court upheld the use of hearsay evidence in administrative adjudications, emphasizing the need for procedural flexibility and deference.
Significance:
Recognizes that agencies can use less formal procedures than courts, with deference to their expertise in fact-finding.
Summary Table of Judicial Deference to Agency Adjudication Cases
| Case | Issue | Holding / Significance |
|---|---|---|
| Universal Camera (1951) | Substantial evidence standard | Courts defer to agency factual findings if supported by substantial evidence |
| SEC v. Chenery (1947) | Legal reasoning in adjudication | Agency decisions upheld if reasoned and supported by record |
| Chevron (1984) | Statutory interpretation | Courts defer to reasonable agency interpretations of ambiguous statutes |
| Thomas Jefferson University (1994) | Factual vs. legal review | Defer factual findings; review legal questions de novo |
| Kisor v. Wilkie (2019) | Agency interpretation of own regs | Limits Auer deference, requiring genuine ambiguity and reasoned explanation |
| Morgan v. United States (1936) | Procedural deference | Agencies have procedural discretion but courts ensure fairness |
| Richardson v. Perales (1971) | Evidence standards in adjudication | Allows hearsay and procedural flexibility with deference |
Conclusion
Courts defer to agencies’ factual findings in formal adjudications under the substantial evidence standard.
Courts defer to agencies’ legal interpretations of statutes and regulations where appropriate (Chevron and Auer deference).
Agencies have broad procedural discretion, but courts ensure that adjudications are fair and lawful.
Recent cases like Kisor have refined the limits of deference to agency interpretations in adjudications, emphasizing careful judicial scrutiny.
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