Chapter 12: Administrative Law

Annual Survey of Massachusetts Law

Volume 1960

Article 15

1-1-1960

Chapter 12: Administrative Law

John P. Clair

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CHAPTER 12

Administrative Law

JOHN P. CLAIR

§12.1. General. During the 1960 SURVEY year, the Supreme Ju-dicial Court rendered some interesting decisions worth noting in this review. In Cumberland Farms, Inc. v. Milk Control Commission1 and

Largess v. Nore's, Inc.,2 the Court was confronted with the clarification

of statutes that heretofore had left the legislative intent in an atmos-phere of some confusion and doubt. The powers of planning boards were additionally circumscribed, while DiMaggio v. Mystic Building

Wrecking Co., Inc.S resulted in an opportunity to view some old and

new concepts in the field of administrative law. The State Adminis-trative Procedure Act was dealt with in a limited manner and although nothing startling was added, further clarification was provided in some of the Court's decisions. An important case dealt with the unconsti-tutional delegation of power to an administrative authority, while another struck down a challenge to the authority given for the con-struction of a garage under the Boston Common, even though the legislative intent was somewhat obscure in the statute.

A.

§12.2. Adjudicatory proceedings: Aggrieved persons. It appears that a sufficient number of decisions have been rendered to leave little or no doubt as to the meaning of the term "adjudicatory proceeding" delineated in the State Administrative Procedure Act.1 Hayeck v.

Met-ropolitan District Commission2 and Natick Trust Co. v. Board of Bank

IncorporationS helped materially in the crystalization of this matter.

In the 1960 SURVEY year, Miller v. Alcoholic Beverages Control

Com-mission4 _{merely reiterated the Court's previous position concerning}

JOHN P. CLAIR is General Counsel, Massachusetts Banking Department. He was draftsman of the State Abandoned Property Law (G.L.. c. 200A). and the Bank Hold-ing Company Act (G.L.. c. 167A). and co-draftsman of the Retail Instalment Sales of Motor Vehicles Act (G.L.. c. 255B).

§12.1. 1340 Mass. 672. 166 N.E.2d 356 (1960). noted in §12.9 intra. 21960 Mass. Adv. Sh. 1205, 170 N.E.2d 361. noted in §12.6 infra.

S 340 Mass. 686. 166 N.E.2d 213 (1960). noted in §12.l0 infra. §12.2. 1 G.L.. c. 30A.

2335 Mass. 372. 140 N.E.2d 210 (1957), noted in 1957 Ann. Surv. Mass. Law §24.2.

S 337 Mass. 615. 151 N.E.2d 70 (1958), noted in 1958 Ann. Surv. Mass. Law §13.2. 4340 Mass. 33. 162 N.E.2d 656 (1959).

§12.3 ADMINISTRATIVE LAW 121

adjudicatory proceeding within the meaning of G.L., c. 30A, §l(l), and added substance to what constitute the legal rights, duties, and privileges of specifically named persons. This case also more clearly defined the legislative intent in G.L., c. 30A, §14, as it pertains to ag-grieved persons. Twenty-seven taxpayers filed a petition with the respondent, Alcoholic Beverages Control Commission, under the pro-visions of G.L., c. 138, §67, complaining that the owners of certain package stores were selling alcoholic beverages in violation of certain provisions of Chapter 138. The commission conducted a hearing and rendered a decision, and from that decision three of the taxpayers filed this petition for review under G.L., c. 30A. The Court sustained demurrers to the petitioners' bill upon the ground that the proceed-ings were not adjudicatory proceedproceed-ings within the meaning of the act; that the decision was not one in which the legal rights, duties, and privileges of specifically named persons were affected; and, finally, that the petitioners were not aggrieved persons within the meaning of the act.

§12.3. Review: Requirement of substantial evidence. The facts recited in Quincy Retirement Board v. Contributory Retirement

Appeal Board1 _{occurred prior to the enactment of the State}

Adminis-trative Procedure Act but the Supreme Judicial Court, nevertheless, applied its standards in this decision. A Quincy fire lieutenant, injured in line of duty, sought disability retirement under the provisions of G.L., c. 32, §7. The local retirement board made a finding that the petitioner was not totally and permanently disabled because of the decision of the medical panel that he was able to do sedentary work in and about the fire station. The appeal board reversed on the ground of error of law, in that the doing of sedentary work did not constitute the usual duties of a fire lieutenant and if he were not able to perform these duties then he was, in fact, totally and permanently disabled under the provisions of section 7.

The appeal board's decision was sustained. The Supreme Judicial Court stated:

In reviewing the action of the appeal board, we think it appro-priate to point out that a similar case would now be governed by the State administrative procedure act, G.L., c. 30A, which pro-vides in §14(8) (in part) that the Superior Court, whose decisions are reviewable by us under §15 of c. 30A, may set aside a decision of the appeal board if it is "(e) Unsupported by substantial evi-dence." 2

The Court continued by stating: "We cannot say that the finding of the appeal board that Cooke was totally and permanently incapacitated under the terms of §7 was 'unsupported by substantial evidence,' and

§12.3. 1340 Mass. 56,162 N.E.2d 802 (1959). 2340 Mass. at 61,162 N.E.2d at 805.

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§12.4

it was within its power, under §16(4), to order the local board to grant Cooke disability retirement." 8

There can be little dispute with the Court's position here. To find otherwise would, in effect, negate the legislative purpose as prescribed in Section 7 governing disability retirement.

§12.4. Emergency regulation: Procedural requirements. The State Administrative Procedure Act, in Section 2, makes a public hearing a condition precedent to the establishment of a regulation by an agency when a hearing is required by any law or when violation of the regu-lation is punishable criminally. Paragraph 3 of Section 2 provides for a waiver of the public hearing when the agency determines that the immediate adoption of a regulation is necessary for the preservation of the public health, safety, or general welfare, and that the observance of the requirements of notice and public hearing would be contrary to the public interest. When the agency makes this finding it is author-ized to adopt an emergency regulation or amendment, provided that its findings and a brief statement of the reasons therefor are incorpo-rated in the emergency regulation or amendment. This regulation may remain in effect for not more than three months unless during that time the agency gives notice and holds a public hearing, as required in Section 2.

In Dacey v. Milk Control Commission1 _{the Supreme Judicial Court}

sustained such a finding by the commission in its adoption of an emergency amendment to its regulations. The commission made the necessary findings and incorporated a brief statement of its reasons in its emergency amendment. The Court found that it had satisfied the formal requirements of Section 2(3), and an attack by the petitioner on the ground that the commission's decision constituted an abuse of discretion2 _{was not substantiated.}

B.

§12.5. Finality of board decision. In Hachadourian's Case,1 the Supreme Judicial Court reiterated the well-established rule that it will sustain the findings of a board of review and they are final unless wholly lacking in evidential support or tainted by error of law; this is true even if different findings could have been made by the board.2

The Court pointed out that it was required to examine the evidence but that the question was not what conclusion it would have reached had the matter come before it in the first instance, but whether there

8340 Mass. at 62. 162 N.E.2d at 806.

§12.4. 1340 Mass. 681. 166 N.E.2d 362 (1960). 2 G.L.. c. 30A. §14(8)(g).

§12.5. 1340 Mass. 81. 162 N.E.2d 663 (1959). also noted in §19.3 infra.

2 See Mahoney's Case, 337 Mass. 629, 631, 150 N.E.2d 729, 731 (1958); Hartman's Case, 336 Mass. 508, 511. 146 N.E.2d 509. 511 (1957).

§12.7

123

was sufficient evidence, including all rational inferences that could have been drawn from the evidence, upon which the findings of the board could have been made.S

§12.6. Appeal to state commission: Finality of local board's de-cision. General Laws, c. 138, §§23 and 67, authorize appeals from cer-tain decisions of local licensing authorities to the Alcoholic Beverages Control Commission. It is clear that the local decision is final when a petition for a new license is denied, and is not final when such action modifies, cancels, revokes, or declares forfeit a license, or when the board fails to renew a license held by the applicant during the previous year. What has not been clear is the question of whether the state agency has the power to overrule the local licensing board when it denies a petition to transfer a license from one location to another. This issue was settled in Largess v. Nore's, Inc.,1 which was before the Supreme Judicial Court upon a petition of ten voters to abate a nuisance under the provisions of G_L., c_ 139, §16A. The local author-ity rendered a decision adverse to Nore's upon its application for au-thority to transfer a package goods license from one locus to another. After all the apparent statutory remedies had been compiled with, the Alcoholic Beverages Control Commission assumed final jurisdiction, overruled the local board and authorized the transfer. The Court, finding for the petitioners, held that, although an appeal could be taken to the state agency, its only authority was to remand the matter to the local licensing board for further action; if the local authority refused to change its decision, the powers of the Alcoholic Beverages Control Commission were exhausted. In other words, even though a reappeal is authorized by the statute in the cases of modifying, canceling, re-voking, or declaring forfeited a license, or failing to issue a license held during the previous year, and the decision of the state agency is final after such reappeal, this does not apply on the facts of the present case. The soundness of this decision lies in its separation of the powers of the two administrative bodies in furtherance of the legislative intent. That the public interest is served by this decision is hardly open to question.

§12.7. Planning boards: Disapproval of subdivision plans. Before a planning board may approve a definitive plan of land pursuant to the provisions of the Subdivision Control Law, it must hold a public hearing pursuant to the provisions of G.L., c. 41, §81T. After the hearing the board may approve, modify and approve, or disapprove the plan. Within ten days after submission of a plan to it, the plan-ning board is required to consult the board of health with relation to whether the area may be used for the proposed purpose without injury to the public health. It is further provided in the statute that

S Josi's Case, 324 Mass. 415, 416, 86 N.E.2d 641, 642 (1949); Bajdek's Case, 321 Mass. 325,326,73 N.E.2d 253, 255 (1947).

§12.6. 11960 Mass. Adv. Sh. 1205, 170 N.E.2d 361.

124 1960 ANNUAL SURVEY OF MASSACHUSETTS LAW §12.7

if the planning board fails to take final action regarding a plan within forty-five daysl after its submission, the failure is deemed to be approval of the plan. The issue in Pieper v. Planning Board of Southborough2

was whether the board may disapprove a definitive plan without a pub-lic hearing on the ground that the town had applied to a federal agency for an engineering survey that would not be completed for six or seven months and, therefore, it was necessary to disapprove the plan because the board felt it was essential to have a master plan avail-able with engineering service before approving any further subdivision of properties.

In overruling a Superior Court finding in favor of the board's posi-tion, the Supreme Judicial Court held that Sections 8lT and 8lU of the Subdivision Control Law entitle the applicant for approval of a subdivision plan to a hearing that must take place within the forty-five day period; the statute does not contemplate that the board may dispense with the public hearing if it intends to disapprove the plan in any event because to do so would, in effect, deprive a landowner of important privileges relating to his property. It does not follow that the failure to afford Pieper a hearing meant that the plan must be deemed approved under Section 8lU because it appears that the board had acted within the forty-five day period even though it had acted improperly in depriving Pieper of his hearing.

It was established in Daley Construction Co., Inc. v. Planning Board

of Randolph3 and further clarified in the Pieper case that the planning

board must act to approve, modify and approve, or disapprove a sub-division plan on its merits without regard to collateral objections not directly connected with the matter before it. For example, in the

Daley case, the board felt that it had a right to disapprove a subdivision

plan unconditionally on the ground that the town had a water short-age, while in the Pieper case the board disapproved because it intended to conduct an engineering survey. In fact, in the Pieper case, the board even went so far as to announce publicly that it would approve no subdivision plan whatever until a master engineering survey had been completed. The action of the planning boards in the Daley and Pie-per cases, if sustained, would frustrate the legislative intent by per-mitting an assumption on the part of the boards of powers of choice not contemplated by the statute.4 _{A planning board acting under the}

"ubdivision Control Law may not, as a rule, disapprove a subdivision control plan other than on the usual grounds: that the plan is inap-propriate from the standpoint of design and construction of ways, utilities in the ways, and public health considerations affecting the subdivision.

§12.7. 1 See C.L., c. 41, §81 U, as amended through Acts of 1955, c. 324. Amend-ments to §81 U since that date were not applicable to the case here discusseq.

2340 Mass. 157, 163 N.E.2d 14 (1959), also noted in §13.7 infra. 3340 Mass. 149, 163 N.E.2d 27 (1959), also noted in §13.7 infra.

4 See Lexington Co-operative Bank v. Commissioner of Banks, 327 Mass. 624, 100 N.E.2d 18 (1951).

§12.9

125

§12.8. Massachusetts Parking Authority: Acquiring title to land. The Massachusetts Parking Authority, created by Acts of 1958, c. 606, was authorized to acquire the Boston Common, subject to an easement in favor of the general public for use as a public park, for the purpose of constructing and financing an underground garage. The main issue for decision in Appleton v. Massachusetts Parking Authority1 was the

determination as to whether the General Court intended to confer upon the city the right to hold up the construction of the garage for any reason. The legislature appeared to provide two alternative meth-ods to the authority whereby it could acquire title to the land: (1) by direct conveyance from the city; and (2) by a taking by eminent do-main. If the first method were to be employed, the act requires the city to convey the land to the authority provided (a) the parks and recreation commission of the city shall by vote assent to the convey-ance and (b) that the conveyconvey-ance is approved after two separate read-ings and by two separate votes of the city council, with some other technical requirements. What actually happened in the case was that the authority filed an application with the city to acquire the prop-erty by conveyance and, subsequent thereto, withdrew its application and made a taking under the second alternative. The petitioners here argued that the legislature intended to give the city a veto power over the proceedings because of the affirmative acts required by the parks and recreation commission and the city council.

The Supreme Judicial Court was firm in its position that it would not construe the statute to give the city a veto power, because of the recognition by the legislature that the city of Boston was plagued by a parking nuisance that could not be corrected other than by the construction and operation of a garage under the Boston Common. Because of the confusion that existed as a result of the alternative methods of acquiring title to the real estate, the Court stated: "The statute, which is of great importance, is not expressed with a clarity commensurate with that importance. . .. Nevertheless the duty is ours to discover the legislative intent." 2 In dismissing the petition

the Court, in effect, held that the legislature did not intend the city to have a veto power over the commencement of this project, which had been so long delayed, and that the two methods of acquiring title, being in the alternative, merely gave the authority a choice as to

which method it would employ. r:t:

§12.9. Delegation of powers: Uncertainty of legislative intent. The delegation of powers to administrative authorities by the legisla-tive body, when not specific in nature, results in problems that, in some instances, may bring about a contravention of the actual legis-lative intent. While this did not become serious in Appleton v. Massa-chusetts Parking Authority} the same cannot be said in Cumberland

§12.8. 1340 Mass. 303, 164 N.E.2d 137 (1960), also noted in §13.9 infra.

2340 Mass. at 309,164 N.E.2d at 141.

§12.9. 1340 Mass. 303, 164 N.E.2d 137 (1960), noted in §12.8 supra.

126

§12.9

Farms, Inc. v. Milk Control Commission.2 In the Appleton case it was

clear that the legislature intended a garage to be built under the Bos-ton Common. It could be that the legislative intent in the

Cumber-land Farms case was actually to give price-fixing powers to the Milk

Control Commission, acting on its own initiative, over the sale of milk to retail purchasers but, because of the uncertainty of the lan-guage in the statute,S this probable intent was defeated.

It can be argued upon a reading of G.L., c. 94A, §§1O, 11, and 12, that the legislative intent is to provide two price-fixing methods, so far as the ultimate retail purchaser is concerned. It seems that Section 114 is intended to authorize the board of its own initiative to fix prices for milk sold to the ultimate retail purchaser as well as that sold to milk dealers, i.e., that it gives complete authority for wholesale and retail price-fixing to the commission. The second method by which prices may be fixed would be the one provided in Section 12, which empowers the commission to establish minimum prices, whole-sale or retail or both, in any particular market, provided a petition is filed with the commission, signed by not less than twenty-five per cent of the producers in the market area defined in the petition. The commission is thereupon required to hold a public hearing, make a finding that a state of emergency exists, and issue such orders, rules, and regulations as may be necessary, including the fixing by official order of minimum wholesale or retail prices, or both, for milk sold within the market affected. The declaration that a state of emergency exists is subject to the approval of the Milk Regulation Board and, if granted, the order creating minimum prices is effective for no longer than one year. Thus, if Section 11 were interpreted to authorize the Milk Control Commission to establish minimum prices to the ulti-mate retail purchaser on its own initiative, and if Section 12 gave it the same powers upon a petition from those engaged in the business, the legislative scheme would seem to be complete.

The Supreme Judicial Court may have gone somewhat beyond the actual question presented in the Cumberland Farms case, but it ap-parently determined that this was necessary in order to clarify a statute so intimately related to the public interest. To this end the Court directed its attention to Section 11. It was pointed out in the decision that milk dealers do not pay money to consumers in the normal sense of the word and in order to make Section 11 intelligible it was neces-sary to read "consumers" so that it does not include retail purchasers. The Court stated that it would limit the word "consumers" to include only those persons who use milk and consume it in the sense of process-ing it into various secondary milk products such as butter, cheese,

2340 Mass. 672, 166 N.E.2d 356 (1960).

S G.L., c. 94A, §§10-12.

4 Insofar as material, G.L.. c. 94A. §Il. states as follows: "(a) The commission, after making an examination and investigation authorized by this chapter . . . shall by its order fix the minimum prices to be paid by milk dealers to other milk dealers, and to producers and consumers for milk . . . . "

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127

and ice cream. It further pointed out that many courts of other juris-dictions have construed "consumers" as referring not to the ultimate retail purchasers of particular items but to those persons engaged in manufacturing or processing, who incorporate the items into a new entity.5 The Court further concluded that the words "milk dealers"

in Section II mean wholesale dealers and not grocery stores, markets,

or the like. Finally, the Court stated: "It must be conceded that the matters discussed above are not free from doubt; but under a statute which is not as clear as it might be we believe that the views here in-dicated are more in accordance with the legislative intent than those

which the commission and the intervener would have us adopt." 6

§12.10. Finality of administrative determination: Collateral attack. The decision in DiMaggio v. Mystic Building Wrecking Co., Inc.1

pre-sents an opportunity for an interesting, if limited, review of the

de-velopment of administrative law. Acts of 1887, c.

252,

Act for the Suppression of Contagious Diseases among Domestic Ani-mals, provides in Section 13 authority to certain commissioners to con-demn an infected animal and to order it destroyed without an appraisal as to its value. Mr. Justice Holmes, speaking for the majority in Mil-ler v. Horton,2 decided that the commissioners' determination that a particular horse had an infectious disease was not conclusive and that the issue might be retried in an action against those who killed the horse pursuant to the administrative order. He stated that the

"juris-diction of the commissioners to condemn the . . . horse under

§

was conditional upon it actually having [an infectious disease]. If

this be so, their order would not protect the defendants in a case where

the commissioners acted outside their jurisdiction." 3

In the DiMaggio case, acting under statutory authority,4 the building commissioner condemned certain real estate owned by the plaintiff after proper notice;1> the building was then torn down by the defendant

5 See Cody v. State Tax Commission, 235 Ala. 47, 177 So. 146 (1937); Craftsman Painters & Decorators, Inc. v. Carpenter, III Colo. 1,5·6,137 P.2d 414, 415·416 (1942); Grossman v. Hotel Astor, 166 Misc. 80, 83, I N.Y.S.2d 307, 310 (N.Y. Mun. Ct. 1937); Volk v. Evatt, 142 Ohio St. 335, 336·337,52 N.E.2d 338, 339 (1943). See also Levine v. State Board of Equalization, 142 Cal. App. 2d 760, 299 P.2d 738 (1956).

6340 Mass. 672, 681, 166 N.E.2d 356, 361 (1960).

§12.1O. 1340 Mass. 686, 166 N.E.2d 213 (1960).

2152 Mass. 540, 26 N.E. 100 (1891). Authorities discussing this and similar cases are collected in 3 Davis, Administrative Law §§26.05, 26.07 (1958); Gray, Private Wrongs of Public Servants, 47 Calif. L. Rev. 303 (1959); Jennings, Tort Liability of Administrative Officers, 21 Minn. L. Rev. 263 (1937).

:I 152 Mass. 540, 548, 26 N.E. 100, 103 (1891). 4 Acts of 1938, c. 479, §116(d) (Boston building code).

I> A notice dated December 31, 1956, was mailed by certified mail to the plaintiff at his home informing him that the building had been badly gutted by fire, was be· yond normal repair, and that it would be necessary to raze the building unless this unsafe and dangerous condition were corrected before 12 noon, January 7, 1957. The letter containing the notice was returned marked "unclaimed." A statutory provision of notice is met even if the notice mailed is not received. See Durkin v. Siegel, 340 Mass. 445, 448, 165 N.E.2d 81, 83 (1960). A copy of the notice was

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§12.l1

upon the order of the building commissioner. The issue before the Supreme Judicial Court was the determination whether the propriety of the commissioner's judgment that the building was unsafe might be attacked collaterally and retried in this action against the defendant who carried out the administrative order.

If the rule in Miller v. Horton were to be applied, it seems reason-able to expect that the answer to this question would be in the affirm-ative. In the DiMaggio case, however, there is an important distinc-tion between the administrative authority contained in Acts of 1887, c. 252, and that contained in Acts of 1938, c. 479. The former con-tained no requirement of notice and gave no reasonable opportunity for a hearing or appeal for review of the administrative decision by an administrative board or by a court, while the latter provides for the right of appeal to the board of appeal of the city and a judicial review by certiorari.6 _{As pointed out by the Court, the 1938 building code}

of the city of Boston is materially distinguishable from the 1887 statute. The Court stated that it was not necessary to consider whether Miller

v. Horton would now be followed on its precise facts, presumably

be-cause of the difference in the statutory delegation of authority to the administrative body. The Court, however, did point out that its basic holding has not been followed recently. It should also be noted that, in any event, there is violent disagreement with its conclusions. In the DiMaggio case, the commissioner's jurisdiction is subject to statutory safeguards against its unreasonable exercise which, as stated by the Court, are designed to satisfy the requirements of due process. Thus, the decision of the administrative authority depends not upon his being right in his decision but upon the legislative grant to him of power to decide the matter subject to the statutory review. In other words, whether or not the animal had a contagious disease would have been of no importance if the statute provided for a hearing and proper review of the administrative authority's decision. In the

Di-Maggio case, the defendant did not pursue his statutory remedies,

presumably upon the ground that he had received no notice, even though the law holds him bound if, in fact, the notice had been mailed to him. Thus, the administrative decision cannot be the sub-ject of collateral attack. The person whose property is destroyed pursuant to administrative order may not seek damages unless he can show that he has exhausted his administrative remedies. One acting in good faith may rely upon such an order and is not required to de-termine whether the administrative decision is correct so long as it is not under attack at the time he carries it out.

§12.11. Delegation of legislative authority: Required standards.

Ayer v. Commissioner

of

posted on the building. After other technical conditions had been met, the de-fendant's bid for the wrecking was accepted and the work proceeded.

6 G.L., c. 249, §4.

§12.11 ADMINISTRATIVE LAW 129

review an unconstitutional delegation of power to an administrative body. The General Court, by Acts of 1958, c. 603, created the Massa-chusetts State Office Building Association with three, named incorpo-rators who were given the right to conduct its affairs with practically no supervision whatever and with the power to name their own suc-cessors. The corporation was authorized to borrow not more than $30 million for the construction of a state office building. The Act further provided that a "contract of lease" was, in effect, to be ex-ecuted by the corporation and the Commissioner of Administration, and the "rental" was to be determined by the parties without the guidance of any legislative standard. In other words, the Common-wealth was to be bound merely upon the judgment of the administra-tive authority. Thus we see an elementary rule of administraadministra-tive law violated that, standing alone, could be enough to defeat the legisla-tive purpose. The Supreme Judicial Court stated: "We note that the act contains no provision for financial accountability, and that no means are prescribed for supervising the awarding and the perform-ance of the building contract under safeguards . . . . " 2 It termed the

corporation and the "contract of lease" a device that was merely one phase of an integrated plan of which the substantial result was con-stitutional evasion.

While the Court struck down the act upon the single ground that it violated Section 3 of Article 62 of the Amendments to the Constitu-tion of the Commonwealth, which, simply stated, means that the Com-monwealth was borrowing money without a vote taken by the yeas and nays of two-thirds of each house of the General Court present and voting, there were numerous other grounds upon which the same result could have been reached.

2340 Mass. at 590. 165 N.E.2d at 888.