Administrative agencies mainly serve an executive function. However, when a legislature requires certain expertise of agencies they can delegate other functions to the agencies. Administrative adjudication is a type of judicial function which has been delegated to administrative agencies.
The hearing process in administrative and civil case is similar. However, administrative hearings never have jury trials. After the conclusion of an administrative hearing, an administrative law judge (ALJ) provides a final decision in agency actions in a written form.
In some jurisdictions, the decision of an ALJ is considered final. However, in some other jurisdictions, after an ALJ decides on an administrative issue, the agency can review the decision and make a determination to accept, reject or modify the decision.[i] The agency can then issue its final administrative decision. However, if a statute prohibits reconsideration of final decisions an agency cannot reconsider its decision.[ii]
An administrative agency can exercise its inherent power to accept, reject, or modify a decision only when the agency possess jurisdiction over the matter in issue.[iii] When a procedural error is detected in adjudication proceedings before reaching a final decision, the agency can conduct a fresh hearing to rectify the error.[iv]
A decision made by an administrative agency can be modified if there is substantial change in circumstances, or if public interest is served.[v] An agency can revise its order and rectify any error present even when a case is pending for review before a court.[vi] A mistake of fact and clerical error can also be corrected at any stage after the decision is made as long as the mistake is plainly shown on the record.[vii] However, the power provided to agencies to change decisions by correcting errors should not be misused to change the substance of a decision. If decisions are changed in the guise of correcting errors the validity of the subsequent decision can be questioned.
An agency can use its inherent powers to reconsider its own decisions. However, for reconsidering a prior decision most administrative agencies depend on statutory powers when there is no express provision for reconsidering an agency decision.[viii]
An agency has discretion over whether or not to reconsider a prior decided case. However, an agency should not abuse its discretion.[ix] An agency should not divert from its rules while reconsidering a case. However, if a reasonable explanation can be provided, an agency can deviate from its own rules to reconsider a case. A case should be reconsidered within a reasonable time period. Notice of reconsideration of a case should be provided to all parties involved.[x]
The Model State Administrative Procedure Act (MSAPA) of 1981 provides the procedure for applying for rehearing of an administrative case. According to MSAPA a petition for rehearing can be filed by any party in an administrative action. The party should file a petition for rehearing within 10 days after entry of an initial or final administrative decision.[xi] The petition should clearly specify reasons for requesting a rehearing in a case.
Examples of reasons that can be considered valid reasons for rehearing an administrative case are:
- Irregularity in the administrative proceedings of the agency or its hearing officer or a party to the case.
- The party moving for a rehearing was deprived of fair hearing because of any order, or abuse of discretion.
- Misconduct of the hearing officer or a party to the case.
- Accident or surprise which could not have been prevented by reasonable prudence.
- Newly discovered material evidence which could not have been discovered and produced at the time of original hearing with reasonable diligence.
- Excessive or insufficient penalties.
- Error in the admission or rejection of evidence or other errors of law occurring at the administrative hearing.
- The decision is not justified by evidence produced or is contrary to law.
The 1961 version of MSAPA provided that a right to rehearing was a prerequisite for seeking judicial review. However, this position was changed by the MSAPA of 1981. Now, filing a petition for rehearing is not a condition for administrative or judicial review.
A petition for reconsideration or rehearing of an administrative case acts as a notice to an agency about an error in its decision.[xii] The agency can rectify the error or prepare a defense from its part after receiving the petition. The legal basis for considering certain statements as erroneous also should be specified in the petition.[xiii]
According to MSAPA, a hearing officer who rendered the prior judgment should himself/herself reconsider or rehear the case. The hearing officer should issue a written order denying the petition for rehearing, granting the petition for rehearing, or modifying the previous judgment. The hearing officer can also provide a written order granting the petition for rehearing and forwarding the case for further proceedings. The petition can be granted wholly or partially. If the hearing officer does not provide a written order within 20 days from the filing of the petition for rehearing, the petition can be considered as denied. Therefore, an order pronounced after the prescribed time limit can be considered as null and void.[xiv]
[i] Douglass v. Copley Twp. Bd. of Zoning Appeals, 2004 Ohio 6765 (Ohio Ct. App., Summit County Dec. 15, 2004)
[ii] In re Application of Envirosafe Services of Ohio, Inc., 1991 Ohio App. LEXIS 6304 (Ohio Ct. App., Franklin County Dec. 24, 1991)
[iii] Union Light, Heat & Power Co. v. Public Service Com., 271 S.W.2d 361 (Ky. 1954)
[iv] Brodie v. Selsky, 203 A.D.2d 671 (N.Y. App. Div. 3d Dep’t 1994)
[v] Cronin v. Browner, 90 F. Supp. 2d 364 (S.D.N.Y. 2000)
[vi] Board of Education v. Illinois Educational Labor Relations Bd., 179 Ill. App. 3d 696 (Ill. App. Ct. 4th Dist. 1989)
[vii] Mike Little Gas Co. v. Public Service Com., 574 S.W.2d 926 (Ky. Ct. App. 1978)
[viii] Clark v. State Employees Appeals Board, 363 A.2d 735 (Me. 1976)
[ix] Luckie v. Admin. Review Bd., 321 Fed. Appx. 889 (11th Cir. 2009)
[x] Elkem Metals Co. v. United States, 26 C.I.T. 234 (Ct. Int’l Trade 2002)
[xi] Harper Invs. v. Auditing Div., State Tax Comm’n, 868 P.2d 813 (Utah 1994)
[xii] Williams v. Geeslin, 2006 Tex. App. LEXIS 6319 (Tex. App. Austin July 21, 2006)
[xiii] Burke v. Central Education Agency, 725 S.W.2d 393 (Tex. App. Austin 1987)
[xiv] Jackson v. Hendrick, 560 Pa. 468 (Pa. 2000)