MONTANA ADMINISTRATIVE LAWUBE Seminar

August 1, 2013

Agency Specific Rules!• There is a welter of legislative authorizations

scattered all through Montana law, empowering various state agencies to develop their own administrative procedures and practices, and the various agencies have adopted varying rules addressing their administrative activities.

• You really need to know the laws, the rules, the entities and the practices involved for the particular administrative matter your client is bringing to you.

Montana Administrative Procedures Act

• The 1971 Montana Administrative Procedure Act ("MAPA") was intended to simplify, unify, and clarify administrative practice in Montana.

• Loosely based upon 1961 Revised Model State Administrative Procedure Act (the Model Act)• The Model Act was loosely based on the federal Administrative

Procedure Act (APA).

• Recommended article: William L. Corbett, Montana Administrative Law Practice: 41 Years After the Enactment of the Montana Administrative Procedure Act, 73 Mont. L. Rev. 339 (2012)

Purposes• MAPA focuses on three aspects of administrative law and

procedure: • (1) agency rulemaking, • (2) agency adjudication, and • (3) judicial review of agency decisions.

• MAPA provides generic, default administrative procedures that apply only in the absence of specific procedures in the agency's authorizing or enabling legislation.• Thus, for example, any agency procedures contained in the

Montana Clean Air Act take precedence over similar or conflicting procedures contained in MAPA.

“Agencies”• MAPA applies to “agencies” – government entities that,

under Mont. Code Ann. §2-4-102(2):• i. Are instrumentalities of state government,

• not counties, cities, or other state subdivisions, such as school districts (see, Miskovich v. Bd. of Trustees, 170 Mont. 138, 551 P.2d 995 (1976);

• ii. Are not specifically exempted from MAPA (exemptions include the legislature, judiciary, governor and board of regents); and

• iii. Have authority to make rules, decide contested cases or enter into contracts.

• For example, MAPA applies to the State Superintendent of Public Instruction but not to county superintendents of public instruction or to local school boards.

How do you know if MAPA applies?• You need to look at the statutes governing the particular

agency that you are dealing with.• Often, notices of decisions or rules issued by an agency

will contain citations to authorizing legislation or, if appropriate, MAPA.

Example• A parent served with a Department of Public Health

and Human Services Notice of Fiscal Responsibility, authorized by MCA 40-5-225(2), can timely request a hearing to contest either the amount of child support shown in the notice or the establishment of a medical support order.

• Upon a timely request for such a hearing, a MAPA contested case telephone hearing must be held, as authorized by Section 40-5-226(2), with subsequent proceedings and available recourse as set forth in Section 40-5-226.

Another Example• Unemployment Insurance Division Determinations

and Redeterminations of validity of a claim of Unemployment Insurance Benefits are authorized in Title 39 (“Labor”), Chapter 51 (“Unemployment Insurance”), Part 24 (“Claims for Benefits”).

• Recourse from Unemployment Insurance Division benefit claim decisions is by appeal to an appeals referee, whose decision can be appealed to the Board of Labor Appeals authorized in Title 39 (“Labor”), Chapter 51 (“Unemployment Insurance”), Part 24 (“Claims for Benefits”).

Rulemaking• Most agencies are authorized to issue rules.

• To determine whether a particular agency has this authority, "one must look at the statute creating [the agency]."

• Rulemaking is a quasi-legislative process in which the agency formulates a "regulation, standard, or statement of general applicability that implements, interprets, or prescribes law or policy" (substantive or procedural) including the "amendment or repeal of a prior rule."

• If the Legislature included specific rulemaking procedures in the enabling or authorizing legislation of a particular agency, those procedures prevail over the generic MAPA rulemaking procedures.

Model Rules• The Secretary of State and Attorney General have

promulgated model rules for rulemaking.• http://www.mtrules.org/gateway/ChapterHome.asp?Chapt

er=1%2E3

Rulemaking Procedures• Generally, rulemaking procedures will include:

• an agency notice to the public of the proposed rule - either publication of the proposed rule itself, or publication of at least sufficient information about the proposed rule for the public to be able to take an informed position and

• the opportunity for the public to comment on the agency proposal.• Hearings if the proposed rule involves a matter of

"significant interest to the public“ or is otherwise required by law,

• Otherwise written comments from public.

• Once the agency has gathered comments, oral and written, it must fully consider them before drafting a final rule.

• The agency must justify any substantial differences between the rule as proposed and as adopted.

Legislative Review• MAPA provides legislative committees with jurisdiction to

review and comment on agency-proposed rules.• May require economic impact statement.• The legislative committee may also poll the entire

legislature to determine whether a proposed rule is consistent with legislative intent.

• The legislature may repeal any MAPA rule.

Informal Rules • When an agency develops and follows internal or informal

interpretations of its own rules but does not modify the rules themselves to include the interpretations, it seems to defeat at least two of the major purposes for requiring rules – notice and an opportunity for meaningful participation.

• However, because of the time and expense involved in rule-making, agencies might develop internal or informal interpretations, considering them “agency expertise,” using them and even revising them without ever putting them in their rules.

• WHETHER TO CHALLENGE SUCH A PRACTICE IN A GIVEN SITUATION IS ITSELF A QUESTION OF TACTICS INVOLVING, AT LEAST IN PART, WEIGHING THE REQUIRED TIME AND EXPENSE FOR YOUR CLIENT VERSUS THE LIKELY BENEFIT OF RAISING THE CHALLENGE.

Administrative Hearings• In a MAPA contested case proceeding, issues of fact are

determined as the result of a "trial-type" hearing or through informal disposition. • The agency and parties may stipulate to informal disposition.

• MAPA provides that the agency may conduct the contested case hearing itself or, more likely, may appoint an agency member or a hearings examiner.

• Because the administrative case is heard without a jury, the rules of evidence and admissibility are more relaxed than in a civil or criminal jury trial. • Under their enabling statutes, some agencies are not required to

use the rules of evidence.

Remember, MAPA may not apply• READ THE ORDERS AND NOTICES IN YOUR CLIENT’S

CASE, AS THEY COME IN, AND PAY ATTENTION TO THE BOILERPLATE. YOU NEED TO KNOW THESE THINGS.

• IF YOU HAVE QUESTIONS AFTER REVIEWING THE RESOURCES IN III. A., B. AND C., CALL THE OFFICE OF THE ADMINISTRATIVE TRIBUNAL AND ASK THOSE QUESTIONS OF A STAFF MEMBER• 1. Ex parte consultation with the Hearing Officer is improper• 2. Staff in the offices of administrative tribunals are generally

helpful and friendly – do reveal your lack of knowledge and ask for help

• IF YOU HAVE ACCESS TO A COLLEAGUE WHO PRACTICES BEFORE THE TRIBUNAL INVOLVED, ASK HER OR HIM YOUR QUESTIONS

Example of Notice • 1. You may request a hearing to contest these charges. To

exercise the right to a hearing, you must send a written request within 20 days of receipt of this Notice …

• 2. Failure to request a hearing within 20 days of the receipt of this Notice constitutes a default …

• 3. lf you request a hearing within 20 days, the Commissioner of Labor and lndustry will appoint an impartial hearings examiner to conduct the hearing …

• 4. Procedural and substantive requirements governing this matter may be found at Montana Code Annotated Title 2, chapter 4, part 6; (Montana Administrative Procedure Act),Title 37, chapter 1, parts 1 and 3; and Title 37, chapter 18, …

• 5. After a proposed decision of a hearing examiner, a default, or a stipulated agreement, the Board will issue a Final Order …

Final Agency Decisions• If the agency appoints a hearings examiner to conduct the

hearing and the agency was not present during the hearing, the hearings examiner is required to prepare a written proposed decision for the agency, which the agency may review before issuing a final decision.

• If the hearing has been conducted by a hearings examiner, and if the final decision is adverse to a party to the proceeding, other than the agency itself, a final agency decision may not be made until a proposed decision is served upon the parties. • Before a final agency decision may be issued, each party is

afforded the opportunity to file exceptions, supported by briefs and oral argument to the final decision maker(s).

Judicial Review• MAPA agency rules are subject to judicial review in an

action for declaratory judgment.• Under MAPA, judicial review of a contested case is

generally initiated by filing a "petition" in Montana district court "within 30 days after service of the final written decision of the agency.”

• Judicial review of agency decisions in contested cases is available only after the appellant has exhausted all administrative remedies available within the agency and is aggrieved by a final written agency decision.• Issues not raised to the agency generally cannot be raised for the

first time on judicial review.

Standard of Review• In appeals from contested cases, courts review MAPA

agency findings of fact under the "clearly erroneous" standard.

• Conclusions of law are reviewed to determine if:• (1) the agency correctly interpreted the law and • (2) whether it correctly applied law to fact.

• Courts will defer to agency conclusions of law when deference is due. • For example, when an agency's interpretation of a statute has

stood unchallenged by the legislature for a considerable length of time.

• Where substantial agency expertise is involved.

Public’s Right to Know• Public Participation, Art. II, Sec. 8, 1972 Mont. Con.:

Governmental agencies to afford such reasonable opportunities, before agency final decision, for citizen participation as may be provided by law.

• Right to Know, Art. II, Sec. 9, 1972 Mont. Const.: No person shall be deprived of right to examine documents or to observe deliberations of all public bodies or agencies of state government and its subdivisions, except when the demand of individual privacy clearly exceeds the merits of public disclosure.

• c. Privacy Right, Art. II, Sec. 10, 1972 Mont. Con.: Right of individual privacy is essential to well-being of free society and shall not be infringed without showing of compelling state interest.

Applicable Statutes• Title 2, Chapter 3, “The Montana Public Participation

in Governmental Operations Act,” addresses notice and the opportunity to be heard (Part 1) and open meetings (Part 2), defining participation as provided by law.

• Title 2, Chapter 6 (“Public Records”) addresses what documents in possession of state government are “public writings,” and how and to what extent (the greatest extent possible, consistent with constitutional individual privacy interests individual or public safety) public writings are available to the public.

• Conflict between the public’s right to know and the individual’s right to privacy requires agency “to balance the competing constitutional interests in the context of the facts of each case, to determine whether the demands of individual privacy clearly exceed the merits of public disclosure. Under this standard, the right to know may outweigh the right of individual privacy, depending on the facts.” Missoulian v. Board of Regents (1984), 207 Mont. 513, 675 P.2d 962, 971.