Chapter 21: Administrative Law

1-1-1971

Chapter 21: Administrative Law

Henry S. Healy

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CHAPTER 21

Administrative Law

HENRY S. HEALY

A.

§21.1. Introduction. The 1971 SuRVEY year mught an unusually small number of new developments in the adm '1istrative law of the Commonwealth. The Supreme Judicial Court did, however, decide some cases of interest. These include cases dealing with the impor-tance of specific findings by agencies in adjudicatory proceedings and the extent to which it is proper for a reviewing court to hear evi-dence apart from the administrative record. Legislation was enacted further postponing the classification and publication of administra-tive regulations by the secretary of the Commonwealth.

§21.2. Sufficiency of administrative findings. In Insurance Rating

Board v. Commissioner of lnsurance,1 _{the Supreme Judicial Court}

placed heavy emphasis on the importance of fully detailed findings of fact by administrative agencies in adjudicatory proceedings. This case involved petitions for review of a decision by the commissioner of insurance establishing 1970 rates, pursuant to G.L., c. 175, §113C, for automobile property damage liability insurance and for medical payments insurance. At a hearing before the commissioner, the peti-tioning rating organizations2 presented extensive evidence in support of their request for increased rates. The commissioner denied the requested increase in a brief decision which did not contain specific findings of fact. Upon appeal by the rating organizations, the Su-preme Judicial Court ordered the case remanded to the commissioner for appropriate subsidiary findings and conclusions based on those findings. Speaking for the Court, Justice Braucher said:

The Commissioner's findings are not adequate to enable us to determine (a) whether his order and conclusions are warranted by appropriate subsidiary findings, and (b) whether such sub-sidiary findings are supported by substantial evidence. . . . He should find expressly those subsidiary facts upon which he relies. He should not leave counsel and the courts without the guidance of proper findings (as op~sed to mere recitations of

HENRYS. HEALY is associated with the firm of Bingham, Dana and Gould, Boston, and is a former assistant attorney general of the Commonwealth.

§21.2. 1_{1971Mass.Adv.Sh.401,268N.E.2d144.}

2 _{These organizations, licensed under G.L., c. 175A, were suing on behalf of their}

evidence or arguments) to determine from a voluminous record (1,000 pages of transcript and more than sixty exhibits) whether his conclusions can be sustained on the evidence.3

In Town of Westborough v. Department of Public Utilities,4 _the

Supreme Judicial Court again dealt with the necessity of specific findings of fact by agencies. This case involved an appeal by the plain-tiff, pursuant to G.L., c. 25, §5, from a decision of the Department of Public Utilities exempting certain land5 _{from the provisions of the}

town's zoning bylaw, at the request of the Penn Central Transporta-tion Company. The f(tpartment held hearings upon this request and granted the exemptiqp-.' However, while its order contained some re-citations of evidence, it included few findings beyond the general conclusion that "the exemption sought is reasonably necessary for the convenience and welfare of the public."6 _{Accordingly, when the}

case was taken on appeal, the Supreme Judicial Court requested that the department make supplemental subsidiary findings on specified issues. In referring to the insufficient findings in the department's original order, the Court explained:

These findings were not adequate to enable us to determine (a) whether the department's order and conclusions were warranted by appropriate subsidiary findings, and (b) whether such sub-sidiary findings were supported by substantial evidence. . . . The department . . . in effect improperly left us, without the guidance of proper findings (as opposed to mere recitations of evidence or arguments), to determine from a voluminous record (471 pages of transcript and fifteen exhibits) whether its conclu-sions could be sustained on the evidence.7

Less than a month after the Supreme Judicial Court's request, the Department of Public Utilities submitted the following supplemental findings: (1) the Penn Central would realize substantial operational savings from construction of an automobile distribution center on the land if the exemption were granted; (2) there had been no specific effect upon the town as a result of a similar distribution operation in the area; (3) no public interest would be served by continuation of the present residential zoning; and (4) construction of the center would

3 1971 Mass.Adv. Sh.401,407, 268 N.E.2d 144, 149. 4 1971 Mass. Adv. Sh.197,267 N.E.2d 110.

5 G.L., c. 40A, §10, provides: "A building, structure or land used or to be used by a public service corporation may be exempted from the operation of a zoning ordinance or by-law if, upon petition of the corporation, the department of public utilities shall, after public notice and hearing, decide that the present or proposed situation of the building, structure or land in question is reasonably necessary for the convenience or welfare of the public."

6 _{1971 Mass. Adv. Sh. 197, 198,267 N.E.2d IIO, Ill.}

produce development in the area. The Court thereupon held that these findings were supported by substantial evidence a·nd warranted the exemption of the property as "reasonably necessary for the public convenience. "B

The Massachusetts Administrative Procedure Act,9 _{cited by the} Court, makes careful provision for findings of fact by agencies:

Every agency decision shall be in writing or stated in the record. The decision shall be accompanied by a statement of reasons for the decision, including determination of each issue of fact or law necessary to the decision, unless the General Laws provide that the agency need not prepare such statement in the absence of a timely request to do so . . . . 10

The reason for this strict rule as to findings lies in the nature of the reviewing process. The agency, not the reviewing court, has the duty of hearing the evidence and determining its credibility. If there are no clear findings of fact, the reviewing court cannot determine whether the decision of the agency is based on a question of fact or on a ques-tion of law. Furthermore, the reviewing court is required, under G.L., c. 30A, §14(e), to determine whether the agency's decision is supported by substantial evidence, and it cannot apply such a standard unless it knows the facts which the agency has actually found and presum-ably relied upon. By adherence to the rule requiring specific agency findings, as exemplified in the instant case, the Supreme Judicial Court has carefully maintained the proper role of agencies concerning the hearing and weighing of evidence and is also insuring that a full opportunity for judicial review will be preserved.

§21.3. Power of reviewing court to hear evidence. Duato v. Commissipner of Public Welfare1 _{illustrates the proper roles of} re-viewing courts and agencies in the taking of evidence. This case arose in a bill in equity under G.L., c. 30A, §14, for review of a decision by the Massachusetts Department of Public Welfare reducing the amount of aid being paid to plaintiff (applicant) under the program relating to aid for families with dependent children. At a time when the appli-cant was receiving such aid, she became gainfully employed. How-ever, because her earnings were less than the amount of aid to which she would otherwise be entitled, she could continue to receive aid in a reduced amount. Moreover, the governing regulations permitted cer-tain exclusions or deductions from her earned income in computing the reduction in the amount of aid. At issue in this case was the

8 _{See n.5 supra.} 9 _{G.L., c. 30A.}

10 _{G.L., c. 30A, §11(8). For other Massachusetts cases dealing with this question, see}

1971 Mass. Adv. Sh. 197, 198,267 N.E.2d 110, Ill. For general discussions of the impor-tance of findin~s of fact in the process of judicial review, see 2 Cooper, State Adminis-trative Law 465-481 (1965); 2 Davis, AdminisAdminis-trative Law Treatise §§16.01 to 16.14 (1958).

amount of work-related expenses which should be deducted from the applicant's earnings.2

The applicant had been granted a hearing before the department, but no stenographer was present and no transcript of the proceedings was made.3 _{The department's hearing examiner concluded that the} applicant's expenses were less than those claimed, and the applicant brought a petition for review in the superior court. After the record of proceedings before the agency was filed in court, the applicant filed a motion alleging that the record was inadequate because no stenog-rapher had been present at the hearing. Evidence was submitted and the motion was allowed.4 _{Thereafter the applicant presented}

evi-dence to the superior court, principally from her own testimony, con-cerning the amount of her expenses. Subsequently the superior court decided against the applicant's contentions, and the applicant appealed

to the Supreme Judicial Court. ··

Although the Supreme Judicial Court affirmed the superior court's decision, it pointed out that the procedure followed by the superior court with reference to the taking of evidence was erroneous:

It was contrary to the basic rule stated in [G.L., c. 30A] §14(6)] that judicial review of administrative proceedings "shall be con-fined to the record, except that in cases of alleged irregularities in procedure before the agency, not shown in the record, testi-mony thereon may be taken in the court." The parties to a pro-ceeding for judicial review may not require the court to receive evidence on, or to decide, factual issues which the law requires the administrative agency to decide.5

The proper course to follow, once the irregularities in procedure were shown, would have been a remand of the case to the agency (1) pursuant to G.L., c. 30A, §14(7), which, on application by a party, permits the presentation of additional evidence before the agency "upon such conditions as the court deems proper"; or (2) pursuant to G.L., c. 30A, §14(8), which permits the court to order remand for further proceedings before .the agency and to "compel any action un-lawfully withheld or unreasonably delayed."6

This case again demonstrates the care with which the Supreme Judicial Court seeks to delineate the proper functions of the agency and the reviewing court. Even though remand may appear cumber-some, it is the only means of maintaining the proper role of the agency as the body charged with the hearing and weighing of evidence.

2 _{I d. at999-IOOO, 270 N.E.2dat 783.} 3 _Ibid.

4 _{1971 Mass. Adv. Sh. 999, 1002, 270 N .E.2d 782, 784-785.} 5 _{I d. at 1002-1003,270 N.E.2d at 785.}

6 _{G.L., c. 30A, §§14(7) and (8) provide, in pertinent part:}

"(7) If application is made to the court for leave to present additional evidence, and it is shown to the satisfaction of the court that the additional evidence is material to the issues in the case, and that there was good reason for f<iilure to present it in the

B.

§21.4. Publication of administrative regulations. In 1969 the

General Court enacted comprehensive legislation requiring the secretary of the Commonwealth to publish and classify existing and future administrative regulations and to publish periodic notices of administrative hearings.1 _{The legislation provided that existing} administrative regulations must be published by a date six months after January 1, 1970. Existing regulations not published by that date would become null and void.2

During the 1970 SuRVEY year, the date by which existing adminis-trative regulations must be published was extended to July 1, 1971,3 and during the 1971 SuRVEY year the date was further postponed to February 15, 1972.4

ceeding before the agency, the court may order that the additional evidence be taken before the agency upon such conditions as the court deems proper. The agency may modify its findings and decision by reason of such additional evidence and shall file with the reviewing court, to become a part of the record, the additional evidence, to-gether with any modified or new findings or decision.

"(8) The court may affirm the decision of the agency, or remand the matter for fur-ther proceedings before the agency; or the court may set aside or modify the decision, or compel any action unlawfully withheld or unreasonably delayed, if it determines that the substantial rights of any party may have been prejudiced because the agency decision

IS-"(a) In violation of constitutional provisions; or

"(b) In excess of the statutory authority or jurisdiction of the agency; or "(c) Based upon an error of law; or

"(d) Made upon unlawful procedure; or "(e) Unsupported by substantial evidence; or

"(f) Unwarranted by facts found by the court on the record as submitted or as ampli-fied under paragraph (7) of this section, in those instances where the court is constitu-tionally required to make independent findings of fact; or

"(g) Arbitrary or capricious, an abuse of discretion, or otherwise not in accordance with law . . . . "

For a general discussion of the power of reviewing courts to hear evidence, see 2 Cooper, State Administrative Law 621-623 (1965).

§21.4. 1 _{Acts of 1969, c. 808, amending G.L., c. 30A, §§1-3, 5, 6, and adding §§6A,}

6B, 7A. See 1970 Ann. Surv. Mass. Law §13.4. For an excellent discussion of the need for this legislation see O'Leary, The Right to be Informed-A Plea for Greater Access to Massachusetts Administrative Rules and Regulations, 54 Mass. L.Q. 63 (1969).

2 _{Acts of 1969, c. 808, §§9-10, amendingG.L., c. 30A, §6.} 3 _{Acts of 1970, c. 712, §§8-9, amendingG.L., c. 30A, §6.}