The grant or denial of a license application is adjudicatory in nature and is subject to due process limitations under the constitution. Thus before an administrative body grants a license it adjudicates or evaluates whether the applicant has satisfactorily complied with the prescribed standards for the award of that license. Similarly, the denial of a license is based on adjudication that the applicant has not satisfied those mandatory requirements. Conversely, the prescription of standards for obtaining a license is legislation. This is because the standards for granting license provide guidance for future conduct. “A governmental agency entrusted with the licensing power therefore functions as a legislature when it prescribes these standards, but the same agency acts as a judicial body when it makes a determination that a specific applicant has or has not satisfied them.”[i]
Licensing is required to comply with due process obligations since it involves determination of factual issues and the application of legal criteria to them, which essentially makes it a judicial act. The notion of fairness is the cornerstone of due process and adequate notice and a fair hearing are always deemed to be mandatory required.[ii] However, this does not mean an absolute compliance of the common-law rules of evidence at the hearing; the parties must generally be allowed an opportunity to know the opposing party’s claims, to present evidence to support their contentions and to cross-examine witnesses.[iii] Hence, admission of exparte evidence is improper.[iv]
Further, the adjudicator shall base his/her findings on the evidence adduced at the hearing.[v] Thus “where the Secretary of State indicated that passport regulations precluded the issuance of a passport to the applicant in question, but did not specify the applicable subsection or set out the findings on which the conclusion was based, it was held that factual findings would be required before the Secretary could deny the application.” [vi]
Equal protection of law is an essential corollary of due process. Hence courts have held that the arbitrary refusal to grant a license or permit to one group when other groups have obtained permits under similar circumstances constitutes a denial of equal protection of the law.[vii]
[i] Hornsby v. Allen, 326 F.2d 605, 608-609 (5th Cir. Ga. 1964)
[ii] Opp Cotton Mills v. Administrator, 312 U.S. 126 (1941)
[iii] Reilly v. Pinkus, 338 U.S. 269 (1949)
[iv] Southern Stevedoring Co. v. Voris, 190 F.2d 275 (5th Cir. 1951)
[v] Tadano v. Manney, 160 F.2d 665 (9th Cir. 1947)
[vi] Boudin v. Dulles, 235 F.2d 532 (D.C. Cir. 1956)
[vii] Niemotko v. Maryland, 340 U.S. 268 (1951)
