Formal adjudication under APA
Formal Adjudication under the APA
What is Formal Adjudication?
Formal adjudication refers to a process where an administrative agency resolves disputes by conducting a hearing resembling a judicial trial.
It is governed by Section 554 of the Administrative Procedure Act (APA).
Formal adjudication applies when an agency is required by statute to conduct hearings "on the record" after opportunity for an agency hearing.
The process includes:
Notice of hearing.
Presentation of evidence.
Cross-examination.
A decision based on the administrative record.
A written opinion explaining the agency’s findings and conclusions.
Purpose
Ensures due process protections for parties affected by agency decisions.
Provides a fair and impartial hearing before an administrative law judge (ALJ).
Decisions can be reviewed by courts, preserving checks and balances.
When is Formal Adjudication Required?
When a statute explicitly requires hearings “on the record” after opportunity for an agency hearing.
For example, in cases involving licensing, enforcement, or benefits termination.
Key Case Law on Formal Adjudication under the APA
1. Morgan v. United States (1938)
Facts: Employees challenged their dismissal from the Postal Service without a formal hearing.
Issue: Whether informal procedures satisfied statutory requirements for formal adjudication.
Holding: The Court ruled that when Congress mandates formal hearings “on the record,” agencies must comply with formal adjudication procedures under the APA.
Significance: Established that agencies must provide formal hearing protections if the statute requires them.
2. Bi-Metallic Investment Co. v. State Board of Equalization (1915)
Facts: Colorado increased property tax assessments by a general rule, affecting many taxpayers.
Issue: Whether affected individuals were entitled to a formal hearing.
Holding: The Supreme Court held that general rulemaking affecting large groups does not require formal adjudication.
Significance: Distinguished formal adjudication from rulemaking; formal adjudication is for individualized determinations, not general policy decisions.
3. Goldberg v. Kelly (1970)
Facts: New York terminated welfare benefits without prior hearing.
Issue: Whether due process requires a hearing before termination.
Holding: The Court held that due process requires a pre-termination hearing, which is less formal than full APA adjudication but must provide notice and opportunity to be heard.
Significance: Emphasized due process protections in administrative decisions, influencing how formal adjudications operate.
4. SEC v. Chenery Corp. (1947)
Facts: SEC issued a decision on a securities law violation without formal rulemaking.
Issue: Whether the agency must follow formal adjudication or can issue decisions based on case-by-case enforcement.
Holding: The Court allowed agencies discretion to decide whether to act via rulemaking or adjudication, but must follow APA procedures when required.
Significance: Clarified the agency’s choice between rulemaking and formal adjudication but emphasized adherence to proper procedures.
5. Citizens to Preserve Overton Park v. Volpe (1971)
Facts: Dispute over highway funds and environmental concerns without a formal hearing.
Issue: Whether the agency's informal decision could be reviewed.
Holding: The Court emphasized judicial review of agency actions but upheld formal adjudication requirements when statutes mandate it.
Significance: Reinforced the importance of formal adjudication for protecting rights and ensuring judicial review.
6. NLRB v. Wyman-Gordon Co. (1969)
Facts: The National Labor Relations Board (NLRB) issued an order without full formal hearing procedures.
Issue: Whether the procedures satisfied the formal adjudication requirement.
Holding: The Supreme Court upheld the requirement for full formal hearings "on the record" and detailed procedural protections.
Significance: Highlighted the procedural safeguards and evidentiary standards required in formal adjudication under the APA.
Summary Table of Cases on Formal Adjudication
| Case | Year | Issue | Holding / Principle |
|---|---|---|---|
| Morgan v. United States | 1938 | Formal hearing requirements | Statutory mandate for formal hearings must be followed |
| Bi-Metallic Investment Co. | 1915 | Hearing in rulemaking vs adjudication | General rules don’t require formal hearings |
| Goldberg v. Kelly | 1970 | Due process in benefit termination | Requires pre-termination hearing, a form of due process |
| SEC v. Chenery Corp. | 1947 | Agency discretion in rulemaking/adjudication | Agencies may choose but must follow APA procedures |
| Citizens to Preserve Overton Park | 1971 | Judicial review of informal decisions | Formal adjudication required where statute mandates |
| NLRB v. Wyman-Gordon Co. | 1969 | Procedural safeguards in adjudication | Full formal procedures required "on the record" |
Key Procedural Elements in Formal Adjudication (APA §554)
Notice: Parties must be informed of the issues and hearing details.
Opportunity to be Heard: Includes presentation of evidence and cross-examination.
Record: The hearing must be "on the record," meaning all evidence and arguments are formally documented.
Decision: The agency must issue a written decision with findings of fact and conclusions of law.
Right to Counsel: Parties may be represented.
Impartial Judge: Usually an Administrative Law Judge (ALJ) conducts the hearing.
Judicial Review: The record and agency decision can be reviewed by courts.
Conclusion
Formal adjudication under the APA is a structured, trial-like procedure required when statutes mandate agency hearings “on the record.”
It provides due process protections for affected parties, including notice, evidence presentation, and impartial decision-making.
Key cases like Morgan, Bi-Metallic, and Goldberg clarify when formal adjudication applies and what procedural protections are necessary.
This process ensures fairness, transparency, and accountability in administrative enforcement and decision-making.
RELATED Blog
0 comments