Drafts posted on this web site express the views of the respective reporters who have written them. The positions contained in these drafts have not been approved by the Council of the Section of Administrative Law and Regulatory Practice, and they should not be ascribed to the American Bar Association, the Section or its officers.

Croley drft/June 30, 2000HEARING REQUIREMENTS

a. Basic Requirements

Hearings required to be conducted under the APA, as outlined in Section __ above, must follow the procedures outlined in APA section 556. In general, section 556 provides that one or more agency employees or administrative law judges attend and preside over a hearing, and that those presiding direct the course of the hearing by administering oaths, issuing subpoenas, ruling on evidentiary matters, accepting depositions, and otherwise overseeing the hearing process, including settlement.1 Section 556(d) addresses the burdens of proof and persuasion, stating for example that the proponent of a decision bears the burden of proof, and that decisions must be supported by reliable, probative, and substantial evidence. Subsection (d) further provides that a party is entitled to present its case by oral or documentary evidence, as well as to submit rebuttal evidence and conduct cross-examination. Finally, section 556(e) provides that the all testimony and exhibits constitute the exclusive record for the purposes of the adjudication decision. While section 556 thus provides a general outline for the hearing process, it also plainly contemplates that agencies themselves will establish many of the particulars of that process.2 Consequently, actual agency practices vary somewhat. Notwithstanding such agency variation, however, courts have provided further guidance on the essential, if sometimes implicit, requirements of section 556, as the following subsections explain.

1 See APA section 556(b)-(c).

2 See, e.g., APA section 556(c) (Subject to published rules of the agency and within its powers, employees presiding at hearings may . . . .); APA section 556(c)(11) ([Agency employees presiding at hearings may] take other action authorized by agency rule consistent with this subchapter.).

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b. Openness

i. Open Hearings

As a general matter, agency hearings must be open to the public. There is not a great deal of case law concerning the requirement that as a general matter agency hearings shall be open to the public. Yet there appears to be little doubt surrounding the matter. One Supreme Court case often cited in connection with the requirement is FCC v. Schreiber,3 in which the Court refers to a general policy favoring disclosure of administrative agency proceedings.4 Other courts have held that where a partys liberty or property interests are at stake, due process requires that agency decisionmaking processes be open to the public and the press.5 The requirement that agency hearings be open to the public has been characterized more generally as one of countless manifestations of a public policy centuries old that judicial proceedings, especially those in which the life or liberty of an individual is at stake, should be subject to public scrutiny, not only for the protection of the individual . . . but also to protect the public from lax prosecution.6 The exact source of the requirement, however, is less clear. For example, at least one court has stated that the requirement of an open, public hearing for judicial processes cannot be seriously questioned, adding that this rule in favor of openness prevails, if not by statutory mandate, then by regulation or practice.7 APA section 556 does not specifically state that hearings must be open, but the very idea of a hearing comparable to other types of judicial proceedings all but implies norms of openness.

APA section 557(d)s prohibition of ex part communications during the course of a hearing,8 while advancing separate values as well, itself reflects this preference for open hearings. In fact, courts sometimes identify the values counseling against ex parte communication and those favoring open

3 381 U.S. 279 (1965).

4 Id. at 293.

5 See Garvey v. Freeman, 397 F.2d 600, 612 (10th Cir. 1968); Fitzgerald v. Hampton, 467 F.2d 755, 764-66 (D.C. Cir. 1972). See also Morgan v. US, 304 U.S. 1 (1938).

6 Pechter v. Lyons, 441 F. Supp. 115, 117-18 (S.D.N.Y. 1977).

7 Fitzgerald v. Hampton, 467 F.2d 755, 764 (D.C. Cir. 1972) (citing The Report of the Attorney Generals Committee on Administrative Procedure (1941)).

8 The provision states: . . . no interested person outside the agency shall make or knowingly cause to be made to any member of the body comprising the agency, administrative law judge, or other employee who is or may reasonably be expected to be involved in the decisional process of the proceeding, an es part communication relevant to the merits of the proceeding. 5 U.S.C. 557(d)(1)(A).

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hearings in the same judicial breath.9 Accordingly, if ex parte communications do occur, they must be disclosed in the public record.10

ii. Closed Hearings

Notwithstanding the general policy favoring open hearings, courts have held that agencies may close hearings to protect potential spectators, for reasons of confidentiality, or to protect witnesses or parties to a hearing.11

Even in such circumstances, however, courts have stated that the presiding administrative law judge may take only the most limited action necessary to sufficiently protect the interest perceived to be paramount to the interest of the public in an open hearing.12 Moreover, the mere assertion by a party to a hearing that confidential information would be disclosed by an open hearing does not obligate the agency to close a hearing. Rather, the agency enjoys discretion in determining whether to close all or part of a hearing.13

c. Burden of Proof

i. General Rule

The burden of proof with respect to any decision rests with the proponent of that decision. APA section 556(d) allocates the burden of proof to the proponent of an order (and in the context of formal rulemaking conducted under 556, the proponent of a rule).14 It is clear that, absent countervailing constitutional constraints, Congress enjoys the power to prescribe rules of evidence and to establish standards of proof for federal courts and agencies.15 Section 556(d) constitutes an exercise of that power.

9 See, e.g., State of North Carolina, Environmental Policy Institute v. EPA, 881 F.2d 1250, 1258 (4th Cir. 1989).

10 5 U.S.C. 557(d)(1)(C).

11 See, e.g., U.S. ex rel. Lloyd v. Vincent, 520 F.2d 1272, 1274 (2d Cir. 1975), cert. den. 423 U.S. 937 (1975); Pechter v. Lyons, 441 F. Supp. 115, 119-20 (S.D.N.Y. 1977).

12 Pechter v. Lyons, 441 F. Supp. at 120. See also Stamicarbon, N.V. v. American Cyanamid Co., 506 F.2d 532, 540-42 (2d Cir. 1974).

13 FCC v. Schreiber, 381 U.S. at 298.

14 It states: Except as otherwise provided by statute, the proponent of a rule or order has the burden of proof. 5 U.S.C. 556(d). For an interpretation of this language, see, e.g., American Trucking Association v. United States, 344 U.S. 298, 319-20 (1953).

15 See, e.g., Steadman v. SEC, 450 U.S. 91, 95-96 (1981); Vance v. Terrazas, 444 U.S. 252, 265 (1980).

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In operation, this allocation of the burden of proof may mean that a private party carries the burden, or instead that the government does, depending on the context. Applicants for disability benefits, for instance, constitute an example of the former,16 whereas an agency prosecuting a violation of rules constitutes an example of the latter.17

ii. Alternative allocation of burden of proof

At the same time, however, section 556 allows that the burden of proof may be allocated otherwise by statute.18 In other words, under section 556 a moving party bears the burden of proof by default, mutable by other legislation.19 This default rule is probably also mutable by agency regulation, not only by statute, if an agency possesses statutory authority to so alter it. In such a case, the burden of proof would not be otherwise provided for by statute strictly speaking; rather, the statute would authorize the agency to provided for a different allocation.20 Moreover, section 556 does not preclude an agency from placing the burden of proof on a non-moving party for the purposes of that non-moving partys affirmative defense.21

16 See, e.g., Greenwich Collieries v. Maher Terminals, Inc., 512 U.S. 267, 272 (1994); Kerner v. Fleming, 283 F.2d 916, 921-22 (2d Cir. 1960).

17 See, e.g., Rice v. National Transportation Safety Bd., 745 F.2d 1037, 1039 (1984); Norris v. FTC, 598 F.2d 1244, 1247 (1979).

18 See supra note 13.

19 See, e.g., Hazardous Waste Treatment Council v. EPA, 886 F.2d 355, 366 (D.C. Cir. 1989).

20 See Greenwich Collieries v. Maher Terminals, Inc., 512 U.S. 267, 271 (1994) (entertaining such a possibility by implication).

21 See NLRB v. Transportation Management Corp., 462 U.S. 393 (1983). See also Greenwich Collieries, supra, at 278 (specifically characterizing NLRB v. Transportation Management as holding that an agency may, consistent with section 556(d), place the burden on a non-moving party when that party offers an affirmative defense).

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iii. Burden of proof/burden of persuasion versus burden of production

Although section 556 refers to the burden of proof, regrettably the meaning of that term is defined nowhere in the APA. Traditionally, if without perfect clarity or consistency, courts have distinguished between the burden of proof and the burden of production, although the term burden of proof is often used loosely to encompass both. Where distinguished, the burden of proof refers to whom must make some showing to a decisionmaker in order to prevail, often also called the burden of persuasion or the risk of nonpersuasion, whereas the burden of production, sometimes also called the burden of going forward with evidence, refers to which party must produce evidence with respect to some question. While these distinct burdens are often borne by one and the same party, at times one party may have the responsibility to step forth with evidence concerning some issueburden of productionwhile the other party simultaneously maintains the responsibility to satisfy the decisionmaker that some threshold for making a finding is metburden of proof or burden of persuasion.

In an important recent Supreme Court case on this subject, Greenwich Collieries v. Maher Terminals,22 the Court undertook to define burden of proof for the purposes of the APA. Canvassing the various historical meanings of the term, including the distinctions mentioned above, in the course of concluding what the understanding of burden of proof would have been when the APA was passed in 1946,23 the Greenwich Collieries Court concluded that while the considerable ambiguity surrounded the term in 19th and early 20th centuries, by 1946 the ordinary meaning of burden of proof was the burden of persuasion, as distinct from the burden of going forward.24 According to the Greenwich Collieries Court, by 1940 the Supreme Court itself , the Courts of Appeals, writers of evidence treatises, and even Congress had consistently followed an earlier decision of the Court, Hill v. Smith,25 which confined burden of proof to burden of persuasion.26 Thus: [W]e conclude that as of 1946 the ordinary meaning of burden of proof was burden of persuasion, and we understand the APAs unadorned reference to burden of proof to refer to the burden of persuasion.27 In reaching this

22 512 U.S. 267 (1994).

23 Id. at 272-74.

24 Id. at 273-75.

25 260 U.S. 592 (1923). In Hill v. Smith, the Court in an opinion by Justice Holmes sought to eliminate the ambiguity associated with burden of proof by explicitly adopting the distinction between the burden of persuasion and the burden of production as advocated by Justice Lemuel Shaw of the Supreme Judicial Court of Massachusetts some one-hundred years earlier.

26 Id. at 275. But see id at 282-91 (Souter J., dissenting) (rejecting Courts conclusion that term had settled meaning).

27 Id. at 276.

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conclusion, the Court explicitly departed from the contrary conclusion reached in an earlier Supreme Court case, NLRB v. Transportation Management Corp.,28 as well as lower court cases that burden of proof in 556(d) properly refers only to the burden of production.29 In fact, by the time of Greenwich Collieries, there was considerable authority in the Court of Appeals for the proposition that section 556(d)s burden included only the burden of production, not the burden of persuasion,30 and no authority to the contrary post the Courts Transportation Management decision (in 1983). The Greenwich Collieries Court furthermore concluded that the Senate and House Judiciary Committees Reports accompanying the APA, both of which referred to the burden of coming forward in explaining the language of 556(d), were imprecise and only marginally relevant.31 Whatever the ultimate merits of the Greenwich Collieries,32 the decision certainly was at odds with the majority wisdom among the commentators, who believed first that section 556(d)s burden of proof meant only the burden of production,33 and furthermore that section 556(d)allowed agencies to determine who bears the burden of persuasion, a determination that should depend upon varying circumstances and policy considerations.34

Illustration:

28 462 U.S. 393 (1983).

29 Id. at 276-77 (citing NLRB v. Transportation Management Corp., supra, and Environmental Defense Fund v. EPA, 548 F.2d 998 (D.C. Cir. 1976), cert. den., 431 U.S. 925 (1977)). Environmental Defense Fund v. EPA, supra, was at the time the leading case on the subject.

30 See Freeman United Coal Mining Co. v. Office of Workers Compensation Programs, 988 F.2d 706, 711 (7th Cir. 1993); Skukan v. Consolidation Coal Co., 993 F.2d 1228, 1236-38 (6th Cir. 1993); Dazzio v. FDIC, 970 F.2d 71, 77 (5th Cir. 1992); Merritt v. U.S. 960 F.2d 15, 18 (2d Cir. 1992); Hazardous Waste Treatment Council v. EPA, 886 F.2d 355, 366 (D.C. Cir. 1989); Bosma v. USDA, 754 F.2d 804, 810 (9th Cir. 1984); Alameda Cty. Training and Employment Bd. v. Donovan, 743 F.2d 1267, 1269 (9th Cir. 1984); Maine v. US Dept. of Labor, 669 F.2d 916, 921-22 (1st Cir. 1982); Old Ben Coal Corp. v. Interior Bd. Of Mine Operations Appeals, 523 F.2d 25, 30 (7th Cir. 1975).

31 512 U.S. at 280.

32 See id. at 281-97 (Souter J., dissenting).

33 See, e.g., 3 Kenneth Culp Davis & Richard J. Pierce, Jr., Administrative Law Treatise section 10.7, at 166 (3d ed. 1994); 1 Charles Koch, Administrative Law and Practice section 6.42, at 245 (1994 Supp.).

34 See, e.g., Davis & Pierce, supra, section 10.7, at 167-69. See also Peter Strauss, Changing Times: The APA at Fifty, 63 U. Chi. L. Rev. 1389, 1413-19 (1996) (criticizing the interpretive methodology of Greenwich Collieries).

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Agency issues rule according to which a claimant for workers disability will prevail on the claim if the evidence in support of claim is in equipoise with evidence in opposition to the claim. Agency rule requires claimant to introduce evidence in support of claim, but then effectively shifts burden of persuasion to agency by requiring agency to produce evidence against the claim that outweighs claimants evidence. Under Greenwich Collieries, the agency rule is invalid as inconsistent with APA section(d) allocation of the burden of proof.

iv. Burden of proof/burden of persuasion versus standard/degree of proof

One can distinguish further between the burden of proof, on the one hand, and the standard of proof or degree of proof on the other, although here again sometimes the former is used imprecisely to refer to both.35 Here the distinction concerns who must satisfy the decisionmaker to reach a decisionagain, the burden of proof or persuasionas opposed to the point of threshold confidence that a decisionmaker must have before making a decision favorable to that party. Thus in criminal cases the state bears the burden of proof (or persuasion), while the standard (or degree) of proof is beyond a reasonable doubt; similarly in civil cases the plaintiff bears the burden of proof and the standard of proof typically is by a preponderance of the evidence.

With respect to the standard of proof required of the proponent of a formal order, the Supreme Court held in Steadman v. SEC,36 this time relying heavily on the House Judiciary Report,37 that section 556(d) requires a party to meet its burden of proof by a preponderance of the evidence.38 This standard is greater than the substantial evidence standard, yet lesser than the clear and convincing evidence standard. Preponderance of the evidence, moreover, concerns comparative probabilities, rather than for example comparative amounts of evidence; in probabilistic terms, the standard would translate to a more probable than not standard. In Steadman, the Court explicitly rejected any interpretation of 556(d) requiring a party to meet its burden by a standard higher than the preponderance-of-the-evidence standard.39 Lower courts too have applied the preponderance-of-the-evidence standard, similarly stating that such a standard is contemplated by section 556(d).40 Where, however, Congress has required a formal hearing outside of the APA and

35 See Greenwich Collieries, 512 U.S. at 277-78.

36 450 U.S. 91 (1981).

37 H.R. Rep. No. 1980, 79th Cong., 2d Sees. (1946).

38 Steadman v. SEC, 450 U.S. 91, 98-102 (1980).

39 Id. at 102. See also Huddleston v. U.S., 485 U.S. 681 (1988).

40 See, e.g., Sea Island Broadcasting Corp. v. FCC, 627 F.2d 240, 243 (D.C. Cir. 1978).

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has not specified a standard of proof, courts have not been reluctant to supply one.41

Illustration:

Agency brings disciplinary proceeding under APA against party for violation of securities laws. Effect of unfavorable decision would be to bar party from engaging in business transactions relating to securities for three years. Given importance of the partys interests at stake and the seriousness of the consequences of an adverse decision, party argues that agency must demonstrate violations by clear and convincing evidence, rather than merely by the traditional preponderance-of-the-evidence standard. Party loses before agency employing preponderance-of-the-evidence standard. Party seeks judicial review. Agency prevails.

v. Implied symmetrical burden borne by party advocating contrary result

When two or more parties are simultaneously proposing starkly incompatible results, each side bears the burden of proof as concerns its own proposed order. That is to say, neither side stands to benefit from the fact that the other side bears the burden of proof with respect to the outcome it seeks. As explained in the Senate Judiciary Committee Report, in specific reference to the operative language of section 556(d): That the proponent of a rule or order has the burden of proof means not only that the party initiating the proceeding has the general burden of coming forward with a prima facie case but that other parties, who are proponents of some different result, also for that purpose have a burden to maintain.42 This multiple burden of proof typically arises in the licensing context, where competitors for a license both must show that they are best situated for the license. Having said this, it is conceptually unclear how more than one party can fully bear the burden of persuasion, for as noted above strictly speaking that burden allocates the risk of nonpersuasion to the party who bears it; unless a licensing agency is prepared to withhold a license from all applicants, more than one party cannot bear the risk of nonpersuasion.43

41 See, e.g., Herman & MacLean v. Huddleston, 459 U.S. 375 (1983); Woodby v. INS, 385 U.S. 275, 284 (1966); Bender v. Clark, 744 F.2d 1424, 1429 (10th Cir. 1984).

42 Sen. Rep. No. 752, 79th Cong., 1st Sess. 207-08 (1945).

43 See 9 J. Wigmore, Evidence section 2489 (J. Chadbourn rev. 1981) (burden of persuasion cannot simultaneously rest on more than one party). See also Greenwich Collieries, 512 U.S. at 286 (Souter J., dissenting) (arguing that impossibility of more than one party bearing burden of persuasion supports conclusion that 556(d) refers only to burden of production, not also to the burden of persuasion).

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d. Rules of Evidence

i. Inapplicability of Federal Rules of Evidence

Agency adjudication need not conform with the Federal Rules of Evidence. APA section 556 contains three specific references to evidence. First, section 556(c)(3) states the agency employees presiding over a hearing may receive relevant evidence (emphasis added).44 Second, section 556(d) provides that an agency shall provide for the exclusion of irrelevant, immaterial, or unduly repetitious evidence (emphasis added).45 Finally, section 556(d) also requires that agency hearing decisions be supported by and in accordance with the reliable, probative, and substantial evidence (emphasis added).46 Nowhere does the APA condition agency receipt of evidence in a hearing on the conformity with the Federal Rules of Evidence. Accordingly, agencies have not considered themselves bound by the Federal Rules of Evidence, a determination the federal courts have sanctioned. As a result, courts have described the upper bounds on an agencys discretion to accept into evidence whatever the agency sees fit with terms like probativeness and fundamental fairness,47 and have stated that an administrative law judge as the power to make reasonable determinations as the admissibility of materials. In operation, this means that an agencys decision to accept any evidence the agency deems appropriate is limited largely if not only by an abuse of discretion or similar standard of judicial review.48 In fact, in Steadman v. SEC the Supreme Court specifically held that the language reliable, probative, and substantial evidence in section 566 implies the enactment of a standard of proof, rather than strictly specifies the type of evidence an agency may considerin the Courts words requires that a decision be based on a certain quantity of evidence. . . [and not a] quality of evidence.49

44 5 U.S.C. 556(c).

45 5 U.S.C. 556(d).

46 Id.

47 See Martin-Mendoza v. INS, 499 F.2d 918 (9th Cir. 1974), cert. den. 419 U.S. 113, rehearing den. 420 U.S. 984 (hearsay evidence not governed by conventional rules, but rather admissible so long as probative and fundamentally fair).

48 See, e.g., Alabama Assn of Ins. Agency v. Bd. Of Governors of Fed. Res., 533 F.2d 224 (5th Cir. 1976), vacated in part on other grounds, 558 F.2d 729, cert. den., 435 U.S. 904 (agency enjoys discretion in determining whether to admit expert evidence, bounded by requirement that exercise of that discretion is not arbitrary).

49 Steadman v. SEC, 450 U.S. at 98.

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In fact, there is considerable precedent, old and new, supporting the proposition that agencies are not bound by the Federal Rules of Evidence.50 Indeed, courts stated as much not only in the years shortly after the Administrative Procedures Act was passed in 1946,51 but also prior to the passage of the APA,52 and even early in the history of the modern administrative state.53 Nothing surrounding the passage of the APA of 1946 altered that traditional understanding.

As courts have explained, agency decisionmakers do not require the same cognitive protections that the Federal Rules of Evidence may afford to lay jurors. Norms of agency expertise and autonomy thus justify agency liberalization from those rules.54 In fact, at least one court has gone so far as to suggest that greater reliance on agency decisionmakers in place of courts is partly due precisely to escape from the rigidity of the rules of evidence.55 However that may be, courts have made clear that agency experts do not need the benefits of the rules of evidence, and moreover may actually be inhibited in their ability to perform their tasks were they bound by those rules. As the Seventh Circuit recently put it: The reason these [Federal Rules of Evidence] are not applicable to agencies is that being staffed by

50 See, e.g., FTC v. Cement Inst., 333 U.S. 683, 705 (1948) ([A]dministrative agencies like the Federal Trade Commission have never been restricted by the rigid rules of evidence.); Swift & Company v. U.S., 308 F.2d 849, 851 (7th Cir. 1962) (noting examples of circuit precedent that demonstrates rules of evidence do not apply to agency hearings); Villegas-Valenzuela v. INS, 103 F.3d 805, 812 (9th Cir. 1996) (noting well-settled rule that agencies are not bound by strict rules of evidence in cases brought under the Administrative Procedure Act).

51 See, e.g., Willapoint Oysters, Inc. v. Ewing, 174 F.2d 676, 690 (9th Cir. 1949); Falsone v. U.S., 205 F.2d 734, 742 (5th Cir. 1953).

52 See, e.g., Opp Cotton Mills v. Administrator of Wage and Hour Div. of Dept. of Labor, 312 U.S. 126, 155 (1941) ([I]t has long been settled that the technical rules for the exclusion of evidence applicable in jury trials do not apply to proceedings before federal administrative agencies in the absence of a statutory requirement that such rules are to be observed.).

53 See, e.g., ICC v. Baird, 194 U.S. 25, 44 (1904) (The inquiry of a board of the character of the Interstate Commerce Commission should not be too narrowly constrained by technical rules as to the admissibility of proof. Its function is largely one of investigation, and it should not be hampered in making inquiry pertaining to the interstate commerce by those narrow rules which prevail in trials at common law, where a strict correspondence is required between allegation and proof.).

54 See, e.g., Donovan v. Sarasota Concrete Co., 693 F.2d 1061, 1066 (11th Cir. 1982).

55 See Oceanic Fisheries Co. v. Alaska Industrial Bd., 109 F. Supp. 103, 104-05 (D.C. Alaska 1953).

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specialists the agencies are assumed to be less in need of evidentiary blinders than lay jurors or even professional, though usually unspecialized, judges. Evidence that might merely confuse a lay fact-finder may be essential to the exercise of expert judgment by a specialized professional adjudicator.56

ii. Hearsay

In particular, an agency may consider evidence that would constitute inadmissible hearsay under the Federal Rules of Evidence, assigning whatever evidentiary weight to that evidence the agency deems appropriate. In fact, the applicability vel non of the Federal Rules of Evidence to agency adjudications has often arisen specifically with respect to agency consideration of evidence that would constitute inadmissible hearsay under the Rules. With judicial blessing, agencies have often considered hearsay evidence, giving such evidence whatever weight agency decisionmakers consider appropriate,57 guided by their own assessment of its truthfulness, reasonableness, and credibility.58

56 Peabody Coal Co. v. Director, Office of Workers Compensation Program, 165 F.3d 1126, 1128 (7th Cir. 1999).

57 See, e.g., Richardson v. Perales, 402 U.S. 389, 409-10 (1971) (heresay under APA is admissible up to the point of relevancy); Bennett v. Natl Transp. Safety Bd., 66 F.3d 1130, 1137 (10th Cir. 1995); Gray v. USDA, 39 F.3d 670 (6th Cir. 1994); Hoska v. U.S. Dept. of the Army, 677 F.2d 131 (D.C. Cir. 1982).

58 Veg-Mix, Inc. v. USDA, 832 F.2d. 601 (D.C. Cir. 1987).

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iii. What evidentiary rules do apply

Subject to the requirements of APA section 556 and of due process, agencies may prescribe their own rules of evidence.59 This possibility is contemplated by section 556 itself,60 as well as elsewhere in the APA.61 When identifying the constraints on agency-prescribed rules of evidence, courts have looked to the language of section 556 itself,62 as well as to the dictates of due process.63 Beyond the language of the APA, and the requirements of due process, courts cannot impose additional procedural requirements upon adjudicating agencies.64

Notwithstanding that agencies are not bound by the Federal Rules of Evidence and that agencies typically receive into evidence much that would be excluded by the Federal Rules, the Federal Rules nevertheless provide some helpful, predictive guide to actual hearing practices,65 and some agencies, like the National Labor Relations Board, employ the Rules so far as practicable, whether pursuant to an agencys own regulations or (as in the case of the NLRB) as required by statute.66 Moreover, even though agency

59 See, e.g., In re Epstein, 32 F.3d 1559, 1565 (D.C. Cir. 1994).

60 See section 556(c).

61 See, e.g., section 553(b)(A).

62 See, e.g., Gallagher v. Natl Transp. Safety Bd., 953 F.2d 1214, 1217 (10th Cir. 1992) (quoting from section 556 and stating that agencies may consider any evidence that is not irrelevant, immaterial, or unduly repetitious); U.S. Steel Mining Co. v. Director, Office of Workers Compensation Programs, 187 F.3d 384, 388 (4th Cir. 1999) (quoting from section 556 and stating that agencies have an affirmative duty to qualify evidence as reliable, probative, and substantial before relying upon that evidence in granting or denying a claim).

63 See, e.g., National Wildlife Federation v. Marsh, 568 F. Supp. 985 (D.D.C 1983) (APA allows agencies to fashion rules governing hearing process, but courts will ensure that due process is satisfied); Cunanan v. INS, 856 F.2d 1373, 1374 (9th Cir. 1988) (though not governed by strict rules of evidence, agency proceedings must nevertheless afford due process).

64 Vermont Yankee Nuclear Power Corp. v. NDRC, 435 U.S. 519 (1978) (courts cannot impose procedural requirements above those found in the APA); Pension Benefit Guaranty Corp. v. LTV Corp., 496 U.S. 633 (1990) (applying Vermont Yankee to adjudications). By the same token, the APA does not excuse procedural requirements found in other statutes. See, e.g., Seacoast Anti-Pollution League v. Costle, 572 F.2d 872, 879 (1978).

65 See, e.g., Yanopoulos v. Dept. of the Navy, 796 F.2d 468, 471 D.C. Cir. 1986).

66 See generally Richard J.Pierce, Jr., Use of the Federal Rules of

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adjudications are not governed by the Federal Rules of Evidence as a general matter, the attorney-client privilege and like privileges may be asserted before an agency proceeding.67

iv. Official Notice

Just as a court may make a finding of certain fact without evidentiary support by taking judicial notice of those fact, so too an agency may take official notice of certain facts. This ability is implied by section 556(e).68 This possibility of official notice extends both to so-called legislative facts as well as to adjudicative facts69 In partial contrast to courts, agencies enjoy wider latitude to take official notice of legislative facts within their given fields of special expertise.70 Where an agencys decision rests on a material fact not supported by evidence in the record and of which the agency has taken official notice, however, a party is entitled to an opportunity to demonstrate the contrary.71 This implies that taking official notice has the effect of shifting the burden of proof with respect to the fact officially noticed. While agencies must provide some opportunity for rebuttal, they enjoy discretion concerning the appropriate method of rebuttal in light of all relevant circumstances.72 Notwithstanding such discretion, an agency is unlikely to survive judicial challenge to decisions depending on

Evidence in Federal Agency Adjudications, 39 Admin. L. Rev.1 (1987) (surveying agency evidentiary rules and finding that of 280 total regulations governing evidentiary decisionmaking by agencies, 243 make no mention of the Federal Rules of Evidence while 37 make at least some reference to the Rules).

67 See, e.g., Civil Aeronautics Bd. v. Air Transport Assn of America, 201 F. Supp. 318, 319 (D.D.C. 1961).

68 Section 556(e) provides, in relevant part: When an agency decision rests on official notice of a material fact not appearing in the evidence in the record, a party is entitled, on timely request, to an opportunity to show the contrary. 5 U.S.C. 556(e).

69 See generally Davis & Pierce, supra, at section 10.6 at 150-65 (providing extended analysis of official notice, its relationship to judicial notice, and the evolution of the distinction between adjudicative facts and legislative facts).

70 See, e.g., Kapcia v. INS, 944 F.2d 702 (10th Cir. 1991) (agency can take official notice of facts within its special technical or scientific competency).

71 5 U.S.C. 556(e). See also Kapcia v. INS, supra, (fact officially noticed subject to rebuttal evidence); McCoy v. Schweiker, 683 F.2d 1138 (8th Cir. 1982) (same).

72 See Castillo-Villagra v. INS, 972 F.2d 1017 (9th Cir. 1992).

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material facts of which the agency took official notice without providing any opportunity for rebuttal.73

e. Oral vs. Written Evidence

i. Decisions for which written evidence is permissible

While APA section 556 contemplates a live, oral hearing, section 556(d) specifically allows an agency to adopt procedures for submission of evidence in written form instead for formal rulemakings, determinations relating to claims for money or benefits, and applications for initial licenses, provided that the party whose evidence takes written form will not be prejudiced thereby.74 Courts have respected this set of exceptions.75 Otherwise, section 556(d) entitle[s] parties to present their case or defense by oral or documentary evidence.76 Thus, a party may insist upon oral presentation of evidence where the party considers doing so advantageous. Apart from oral hearings required by due process,77 then, a partys entitlement to an oral hearing is thus predicated on section 556, coupled with whatever statute triggers the application of APA sections 554 and 556 by requiring a hearing on the record.78

73 See, e.g., Lonzollo v. Weinberger, 534 F.2d 712 (7th Cir. 1976); Colwell v. Gardner, 386 F.2d 56 (6th Cir. 1967).

74 The last sentence of section 556(d) reads: In rule making or determining claims for money or benefits or applications for initial licenses an agency may, when a party will not be prejudiced thereby, adopt procedures for the submission of all or part of the evidence in written form. 5 U.S.C. 556(d).

75 See, e.g., Seacoast Anti-Pollution League v. Costle, 572 F.2d 872, 879 (1st Cir. 1978) (The first point is whether the Administrator was empowered to require that the new evidence be submitted in written form. The Administrator may, under 5 U.S.C. section 556(d), so require in cases of initial licensing. This is an initial licensing.).

76 5 U.S.C. 556(d). Moreover, a party to an adjudication is entitled to be represented by counsel or otherwise qualified representative, and a person compelled to appear before an agency is entitled to representation by counsel. 5 U.S.C. 555(b). Courts have vindicated this right over agency regulations they seek to exclude counsel from certain agency proceedings. See Professional Reactor Operator Soc. v. NRC, 939 F.2d 1047 (D.C. Cir. 1991); SEC v. Whitman, 613 F. Supp. 48 (D.D.C. 1985). On the other hand, the APAs counsel right does not extend to a subsequent examination of documents following the production of documents pursuant to an IRS summons, for example. U.S. v. McPhaul, 617 F. Supp. 58 (W.D.N.C. 1985). What is more, section 555(b)s counsel right certainly does not mean the right to be supplied with representation. See Father & Sons Lumber and Bldg. Supplies, Inc., v. NLRB, 931 F.2d 1093 (6th Cir. 1991); Alvarez v. Bowen, 704 F. Supp. 49 (1989).

77 See Goldberg v. Kelly, 397 U.S. 254 (1970).

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Notwithstanding section 556(d)s entitlement language, however, a party may have to request a hearing in order to get one,79 and in addition may have to make a threshold representation that a hearing would serve its purpose.80 Finally, some courts have stated that the right to an oral hearing, whatever its exact scope, does not extend to appellate decisionmakers within an agency.81

Illustration:

Party seeks a permit. According to the relevant statute, a party seeking such a permit is entitled to an oral hearing on the permit application. The partys application is doomed to fail, however, because the party is clearly in violation of a rule issued by permit-granting agency pertaining to the grounds on which a party will or will not be granted a permit. As a hearing on the partys permit application would serve no purpose, the agency need not provide a hearing under section 556.

78 As explained in Section __ above, formal adjudicatory hearings are triggered, according to APA section 554, whenever an agencys underlying statute so requires. Section 554 applies, by its terms, to every case of adjudication required by statute to be determined on the record after opportunity for an agency hearing. 5 U.S.C. 554(a). Section 556, in turn, applies . . . to hearings required by section . . . 554. 5 U.S.C. 556(a). Courts have made clear, however, that the mere appearance of the words hearing and record in an agencys statute are neither necessary nor sufficient to trigger section 554 and, thus, section 556. Rather, the crucial question is whether Congress intended a formal hearing or not, an intent which may often be expressed by those terms, but need not. See generally U.S. v. Florida East Coast Railway Co., 410 U.S. 224 (1973). For other treatments of section 554's triggering condition, see, e.g., Seacoast Anti-Pollution League, 572 F.2d at 876 (language on the record in statute not necessary to trigger 554 and 556); Chemical Waste Management, Inc. v. EPA, 873 F.2d 1477, 1482 (D.C. Cir. 1989) (whether word hearing in statute triggers formal adjudication process is question of interpretation for which agency will enjoy Chevron deference). See also U.S. v. Storer Broadcast Co, 351 U.S. 192 (1956) (agency not required to provide formal hearing otherwise required in statute where outcome of such hearing would be predetermined due to violation of agency rule by party seeking hearing); FPC v. Texaco, 377 U.S. 33 (1964) (same).

79 National Coal Operators Assn. v. Kleppe, 423 U.S. 388, 397-98 (1975); AJA Associates v. Army Corps of Engineers, 817 F.2d 1070, 1074 (1987).

80 US v. Storer Broadcasting, 351 U.S. at 205; FPC v. Texaco, 377 U.S. at 39; Weinberger v. Hynson, Westcott & Dunning, 412 U.S. 609, 620 (1972); Costle v. Pacific Legal Foundation, 445 U.S. 198, 214 (1980).

81 See Lonzollo v. Weinberger, 534 F.2d 712, 714 (7th Cir. 1976) (oral argument before agency appellate body not a matter of right).

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ii. Cross-examination

The same sentence of section 556(d) providing that a party is entitled to introduce oral or documentary evidence also specifically provides that a party is entitled to conduct such cross-examination as may be required for a full and true disclosure of the facts.82 The structure of this provision resembles courts interpretation of the entitlement to present oral evidence, as discussed immediately above. That is, a party has the right to conduct cross-examination as a general matter,83 but subject to the practical limitation that such cross-examination is necessary to accomplish the purposes of the adjudication,84 just as a party may present oral evidence as a general matter, provided that there is some purpose to doing so rather than submitting only written evidence. The Senate and House Judiciary Committees reports accompanying the APA both reflect this basic idea. According to the former: The right of cross-examination extends . . . to written evidence . . . as well as to cases in which oral or documentary evidence is received in open hearing. . . . To the extent that cross-examination is necessary to bring out the truth, the party should have it.85 The House report likewise explains: The provision on its face does not confer a right of so-called unlimited cross-examination. Presiding officers will have to make the necessary initial determination whether the cross-examination . . . is required for the full and true disclosure of the facts stated in the provision.86 And the similarly between courts approach to the availability of hearings and of cross-examination continues: Just as a partys exercise of the right to an oral hearing may depend on the party making a request for a hearing, as observed above, so too a partys right to cross-examination may depend on the party using a subpoena to compel the author of a report, for one example, to appear for cross-examination. Put differently, the right to cross-examination does not mean that the agency must solicit cross-examination.87

82 5 U.S.C. 556(d).

83 See, e.g., Central Freight Lines, Inc. v. US, 669 F.2d 1063 (5th Cir. 1982) (cross-examination under section 556 not an absolute right).

84 See, e.g., Cellular Mobile Systems of Pennsylvania, Inc. v. FCC, 782 F.2d 182 (D.C. Cir. 1985) (cross-examination is not automatic right but rather must be shown necessary by party seeking it); Solis v. Schweiker, 719 F.2d 301 (9th Cir. 1983) (cross-examination required only as necessary for full and true disclosure of fact, a question over which administrative law judge has discretion); Delaware River Port Authority v. Tiemann, 403 F. Supp. 1117 (D. N.J. 1975) , vacated on other grounds, 531 F.2d 699 (whether cross-examination is required depends upon circumstances and is properly left to agencys discretion).

85 S. Rep. No. 752, 79th Cong., 1st Sess., 22-23 (1945).

86 H.R. Rep. No. 1980, 79th Cong., 2d Sess. 37 (1946).

87 At least one court has suggested, however, that pro se parties

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For example, in Richardson v. Perales,88 the leading case on the subject, the Supreme Court considered a challenge to the Social Security Administrations acceptance into evidence, and substantial reliance upon, a report by physician-consultants who were not cross-examined by an SSA claimant during the course of two hearings on a disability claim. Rejecting the claimants suggestion that his due-process rights as well as his procedural rights embodied in section 556 were violated, the Court explained: The matter comes down to the question of the procedures integrity and fundamental fairness. We see nothing that works in derogation of that integrity and of that fairness in the admission of consultants reports, subject as they are . . . to the use of the subpoena and consequent cross-examination. This precisely fits the statutorily prescribed cross-examination as may be required for a full and true disclosure of the facts.89 Because the claimant had an untaken opportunity for cross-examination, the Court held that the SSAs heavy reliance on the reports, considered to outweigh all of the live testimony presented by the claimant, did not violate section 556's cross-examination right.90

Courts have at times read Perales to support somewhat different propositions. Some courts have held, invoking Perales, that due process or fundamental fairness requires a party to have an opportunity for cross-examination where the agency relies on written evidence obtained after the partys hearing.91 Other courts have also read Perales to mean further that a claimant who has requested a subpoena then has the right to cross-examination.92 At the same time, however, still other courts have determined

should be advised of their right to cross-examine adverse witnesses, although an agencys failure to do so will not constitute reversible error absent prejudice. See Wasson v. SEC, 558 F.2d 879, 884 (8th Cir. 1977).

88 402 U.S. 389 (1971).

89 402 U.S. at 410. See also id. at 402.

90 Id. at 407, 410.

91 See, e.g., Wallace v. Bowen, 869 F.2d 187, 191-92 (3rd Cir. 1988); Townley v. Heckler, 748 F.2d 109, 114 (2d Cir. 1984); Demenech v. Secretary HHS, 913 F.2d 882, 884-85 (11th Cir. 1990).

92 See, e.g., Lidy v. Sullivan, 911 F.2d 1075, 1076 (5th Cir. 1990); Coffin v. Sullivan, 895 F.2d 1206, 1212 (8th Cir. 1990); Wallace v. Bowen, 869 F.2d 187, 192 (3rd Cir. 1989); Lonzollo v. Weinberger, 534 F.2d 712, 714 (7th Cir. 1976) (A written report . . . may be received as evidence in a disability hearing, but the claimant has a right to subpoena the [author] and cross-examine him concerning the report. Richardson v. Perales, 402 U.S. 389, 402. . . .). These cases involve hearings required by section 205(b) of the Social Security Act, 5 U.S.C.405(b). According to the Perales Court, however, APA section 556(d)s provisions conform, and are consistent with, rather than differ from or supersede [section 205 of the Social Security Act]. 402 U.S. at 409. See also Solis v. Schweiker, 719 F.2d 301, 302 (9th Cir. 1983)

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instead that the right of cross-examination is not absolute, and that whether a request for cross-examination should be granted or a subpoena allowing for cross-examination should be issued is a matter of agency discretion, to be based on the agencys assessment of whether cross-examination is necessary for a full presentation of the facts.93 Though not couched as a right of cross-examination, in such cases the courts nevertheless tend to conclude that an agency has abused its discretion wherever the agency denies a request for cross-examination of reports or other documents that were important to the agencys decision.94 While the narrow holding of Peralesthat a claimant who did not take advantage of the opportunity for cross-examination cannot claim later that he was denied cross-examination95does not exactly support any of these interpretations, the best reading would give parties an opportunity to request cross-examination relating to any evidence on which an agency may substantially rely, and would require agencies to provide such cross-examination while simultaneously allowing them to refuse cross-examination relating to materials not important to an agencys decision.

Illustration:

Party makes timely request for cross-examination considered by agency not to be necessary for the full and true disclosure of facts of the case. Agency refuses to provide opportunity for cross-examination. Agencys refusal will be respected by courts, provided court determines agencys refusal does not constitute an abuse of discretion or compromises the fundamental fairness of the hearing.

Illustration:

(taking APA section 556(d) to govern scope of SSA disability claimants right to cross-examination).

93 See, e.g., Souch v. Califano, 599 F.2d 577, 579 (4th Cir. 1979) (relying on Perales in reaching conclusion that right to subpoena for purposes of cross-examination is a right to request the issuance of a subpoena). See also Cellular Mobile Systems of Pennsylvania, Inc. v. FCC, 782 F.2d 182 (D.C. Cir. 1985) (cross-examination under 556(d) not automatic right); Central Freight Lines, Inc. v. U.S., 669 F.2d 301 (5th Cir. 1982) (cross-examination under 556(d) not absolute right). This view finds support from the House Judiciary Committee Report accompanying: Presiding officers will have to make the necessary initial determination whether the cross-examination is pressed to unreasonable lengths by a party or whether it is required for the full and true disclosure of the facts stated in the provision. Nor is it the intention to eliminate the authority of agencies to confer sound discretion upon presiding officers in the matter of its extent. H.R. Rep. No. 1980, 79the Cong., 2d Sess. 37 (1946).

94 See, e.g., Reilly v. Pinkus, 338 U.S. 269 (1949); Dolcin Corp. v. FTC, 219 F.2d 742, 747 (D.C. Cir. 1955); Solis v. Schweiker, HHS, 719 F.2d 301, 302 (9th Cir. 1983).

95 Richardson v. Parales, 402 U.S. at 402.

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Party fails to make timely request for cross-examination relating to evidence likely to be material to agencys final decision. Immediately following the close of the hearing, party requests cross-examination. Agency does not dispute importance of materials about which party seeks cross-examination. Agency refuses request nevertheless, on the grounds that the party already had an opportunity, not taken, of cross-examination. Agency relies on materials about which party sought cross-examination. Agency decision will be upheld upon judicial challenge to agencys refusal to allow cross-examination.

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