Annual Survey of Massachusetts Law
Volume 1965
Article 16
1-1-1965
Chapter 13: Administrative Law
William I. Cowin
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CHAPTER 13
Administrative Law
WILLIAM I. COWIN
§13.I. General. During the past term, the Supreme Judicial Court continued to strike a balance between the desire for free and unimpeded administrative functioning, and the necessity for sur-veillance against arbitrary or unauthorized agency action which could pose a threat to the public interest. The Court has, in the tradition of
St. Luke's Hospital v. Labor Relations Commission} adamantly refused
to interfere with the administrative process prior to its conclusion.2
Likewise, the Court has authorized the use by administrative agencies of certain tools formerly available in this Commonwealth only to the courts.s And the agencies have been left a substantial latitude in the administration of their statutes and in the making of the decisions necessary under them.4.
However, the Court has been diligent in ensuring that the agencies observe necessary standards in their operations. Thus the necessity of strict compliance with statutory procedures has been emphasized.1i
The limitations imposed by the General Court upon a given state official have been reviewed.6 And-in a truly landmark decision
applying Sections 1 and 14 of Chapter 30A, the State Administrative Procedure Act - the constitutional right to a hearing with regard to applications to engage in a given occupation has been protected.or
Accordingly, the Supreme Judicial Court apparently has determined to go along with the agencies to the farthest extent possible, pulling in on the reins only when clearly necessary to prevent certain injustice
WILLIAM I. COWIN is Assistant Attorney General of the Commonwealth of Massa-chusetts and Chief of the Administrative Division of the Attorney General's office.
§llI.l. 1 lI20 Mass. 467. 70 N.E.2d 10 (1946).
2 Sullivan v. Fall River Housing Authority. 1965 Mass. Adv. Sh. 52l1. 205 N.E.2d 701; Electronics Corp. of America v. City Council of Cambridge. 1965 Mass. Adv. Sh. lI2l1. 204 N .E.2d 707.
3 Almeida Bus Lines. Inc. v. Department of Public Utilities. 1965 Mass. Adv. Sh. 55. 20ll N .E.2d 556.
4. First Church of Christ. Scientist. in Boston v. Alcoholic Beverages Control Com-mission. 1965 Mass. Adv. Sh. 86l1. 207 N.E.2d 880; Massachusetts Co-operative Bank League v. Board of Bank Incorporation. 1964 Mass. Adv. Sh. 128l1. 202 N.E.2d 598. II Board of Selectmen of Pembroke v. R. &: P. Realty Corp .• 1964 Mass. Adv. Sh. 1267.202 N.E.2d 409.
60'Connor v. Deputy Commissioner and Comptroller. 1965 Mass. Adv. Sh. lI29. 204 N.E.2d 705.
166 1965 ANNUAL SURVEY OF MASSACHUSETIS LAW §13.2
to parties or to protect some clearly defined public interest. Perhaps administrative functioning has not always warranted such treatment. The points made by Judge Friendly in the Holmes Lectures of 1962 (cited by the United States Court of Appeals for the First Circuit in City of Lawrence v. Civil Aeronautics Board),8 relative to the need for the development of standards of operation by federal administra-tive agencies, are even more germane to the Massachusetts situation. Al-though it would not be fair to brand all of the state agencies, it is clear that many have never managed to develop consistent and work-able approaches to the problems which they must face. Some have never even complied with the mandate of Section 9 of Chapter 30A, with regard to the formulation of rules to govern their own procedure. §13.2. Urban renewal: Premature request for judicial interven-tion. In Electronics Corporation of America v. City Council of
Cambridge,1 the Supreme Judicial Court reiterated its familiar refusal to interfere prematurely with the administrative process. The case involved the proposed use of the Kendall Square Industrial area in Cambridge as a site for the operations of the National Aeronautical and Space Administration. Prior to the commencement of suit, the Cambridge City Council had requested the Cambridge Redevelop-ment Authority to designate the Kendall Square area as appropriate for urban renewal under the provisions of Chapter 121 of the General Laws. The authority complied with the request, and applied to the Federal Government for funds with which to make further studies and plans.
At this point, twenty-seven business concerns filed a bill in equity for both injunctive and declaratory relief. Included among the re-spondents were the City of Cambridge; its City Manager, City Council, and Redevelopment Authority; the Attorney General; and the Divi-sion of Urban and Industrial Renewal of the Department of Com-merce and Development of the Commonwealth and its Deputy Commissioner. A declaration was sought that the area in question did not qualify for urban renewal under Chapter 121. The gist of the bill was that the Kendall Square area was not "substandard," "deca-dent," or a "blighted open area," as those terms are used in Chapter 121, Section 26J; that the area could not reasonably be found appro-priate for an urban renewal project; and that the city was in truth simply attempting to clear the area for the purpose of persuading NASA to locate in Cambridge. For these reasons, the bill continued, all action pertaining to renewal of the area was invalid, and threatened the petitioners with loss of their property without due process. Since the project was being considered solely for the purpose of attracting the NASA settlement and bringing to Cambridge the concomitant economic benefits, the carrying out of the project would represent use of public funds and the taking of land for private purposes.
8343 F.2d 583, 587 (1st Cir. 1965).
§13.2 ADMINISTRATIVE LAW 167 Despite the dramatic representations of the petitioners, the Court refused to grant the requested relief. The Court pointed out that Chapter 121 sets forth a series of steps which must be followed by a redevelopment authority in connection with the renewal of a given area. Included among the steps is submission of an actual renewal plan to the City Manager and Council, and to the Division of Urban and Industrial Renewal, and approval of the said plan by these officials. It was very clear, the Court stated, that the authority had yet to em-bark upon the procedures contained in Chapter 121. At no time had approval by the Division of Urban and Industrial Renewal been requested, and there was no indication that the authority had made a final determination to proceed at all. "As stated in the brief of the Attorney General, the bill merely amounts to alleging that the Author-ity is studying the Area for urban renewal. Such a study is clearly within its jurisdiction."2 The fact that findings made by the authority at some time in the future might be subject to question was not suf-ficient cause to warrant the Court to interfere with the making of such findings at this stage.
The case clearly follows the principle set forth in St. Luke's Hos-pital v. Labor Relations Commission} from which the Court quoted
the following:
To permit judicial interference with the orderly administration by the commission of matters entrusted to it by the Legislature before it has commenced to exercise its authority in any particu-lar case or before it has had an opportunity to determine the facts and make a final decision, would in effect transfer to the courts the determination of questions which the Legislature has left in the first instance to the commission, and would result in the substitution of the judgment of the court for that of the com-mission. Courts must be careful not to invade the province of an administrative board. The instances are rare where circumstances will require such interference.4
This was a matter which was so patently not ripe for judicial con-sideration, that the underlying irritation with which the court appar-ently viewed the proceedings creeps to the surface in the final paragraph, where it is pointed out to the petitioners that it was hardly necessary to join the Attorney General as a party respondent merely for the purpose of giving him the notice required by General Laws, Chapter 231A, Section B.
As the past few months have demonstrated, tempers are very likely to be lost over urban renewal, and aggrieved persons are likely to cast about for varying forms of relief. The Supreme Judicial Court has now made it perfectly clear that it will not forsake its traditional practice of noninterference with the administrative process (prior to the stage
2Id. at 1127, 204 N.E.2d at 709. B 320 Mass. 467, 70 N.E.2d 10 (1946).
168 1965 ANNUAL SURVEY OF MASSACHUSETIS LAW §13.3 at which judicial review becomes appropriate) simply because the emotions generated by urban renewal are involved. Such judicial restraint is to be applauded. Hopefully, the Court's refusal to inter-fere prematurely with the administration of urban renewal programs will not be a signal to various housing and redevelopment authorities to ignore proper procedures and safeguards during the selection and planning process.
§13.3. Adjudicatory powers: Nunc pro tunc orders. In Almeida Bus Lines, Inc. v. Department of Public Utilities,1 the Supreme
Judi-cial Court considered the question of the issuance of orders nunc pro tunc by administrative agencies. The case involved an application by the Plymouth and Brockton Street Railway for a certificate of public convenience and necessity for the operation of passenger buses through the communities of Barnstable, Sandwich, and Bourne. The applicant had obtained three-year licenses from the communities involved in February of 1958, and had filed them with the Department of Public Utilities as required by statute.2 The application for the certificate of
public convenience and necessity was filed in September, 1960, with hearings held thereon several months later. Almeida Bus Lines, Inc., opposed the issuance of a certificate on the ground that it (Almeida) supplied sufficient service to the area.
On May 19, 1961, the Department granted the application of Plym-outh. In its opinion, the Department noted that the situation was such that it would not follow its usual practice of protecting an existing carrier in a franchised area (in this case Almeida). This was followed on June 7, 1961, by an order directing that the certificate of public convenience and necessity authorized by the Department on May 19, 1961, should bear the date of February 1, 1961. An appeal filed by Almeida in the Supreme Judicial Court for Suffolk County under Gen-eral Laws, Chapter 25, Section 5, was reserved and reported without decision by the Single Justice.
The Court rejected Almeida's contention that the Department lacked authority to issue a certificate because the local licenses upon which the certificate was based had expired before the date of its issu-ance. Almeida had argued that General Laws, Chapter 159, Section 4, limited the duration of such local licenses to three years, and that such limitation could not lawfully be circumvented by means of the grant-ing of a certificate nunc pro tunc. The Court noted that - by common law as well as by statute - the Supreme Judicial and Superior Courts were authorized to issue judgments, orders, and decrees nunc pro tunc. Absent such authority, the power of the courts to adjudicate given matters could be defeated by the delay caused by the necessity for judi-cial deliberation.
The Court reasoned that the same rule could well be applied to administrative agencies in their quasi-judicial capacities:
§lll.lI. 1 1965 Mass. Adv. Sh. 55, 20ll N.E.2d 556, also noted in §16.1 infra.
The cases in Massachusetts do not involve the question of the power of administrative agencies to enter decisions and orders nunc pro tunc. In other jurisdictions where the question has arisen, the rules relating to nunc pro tunc orders generally apply to administrative agencies and quasi-judicial commissions. [Citing cases.] We see no reason to restrict to the courts the power to enter nunc pro tunc orders in appropriate cases.8
The decisions of agencies, the Court continued, necessitate the same kind of deliberation as do those of courts. Thus, the policy underlying the use of the nunc pro tunc entry in judicial proceedings - "that delays caused by a tribunal's taking the case under advisement should not prejudice the parties"4 - should apply to administrative proceed-ings as well. Since the licenses obtained by Plymouth from the muni-cipalities expired while the Department of Public Utilities was delib-erating, fairness required that the Department date the certificate which was eventually issued at a time during which the licenses had been valid. The Court likewise rejected the Almeida contention that the Department was obligated to give notice to Almeida of the pro-posed issuance of a nunc pro tunc order. Citing Fortier v. Department of Public Utilities5 the Court shrugged off the suggestion, noting that
"[n]othing required this futility."6 The Court also held that, upon consideration of the entire record, the findings of the Department were supported by substantial evidence. It noted that the Department had carefully set forth its reasons for making the decision in question, and that Almeida had not sustained the burden of proving that the deci-sion was invalid.
One can certainly not contest the wisdom of the decision. Some speculation might be given to why the applicant waited two years and seven months from the time of issuance of the local licenses before filing its application for a certificate of public convenience and neces-sity. It is also possible that the knowledge that nunc pro tunc orders can be used to prevent potential inconvenience might lead some agen-cies to operate even more slowly than they do at present. On the whole, however, this flexibility seems essential to any tribunal which sits in a judicial capacity. Likewise, it threatens the power exercised by some administrators to decide cases by not deciding them - i.e., to delay decision until the point is reached at which a decision does the appli-cant no good. Should there be arbitrary exercise of the authority to issue such orders, such exercise can still be controlled by the courts after the filing of petitions for judicial review by aggrieved parties.
§13.4. Judicial review: Use of certiorari. The confusion which may potentially be caused by First Church of Christ, Scientist, in
Bos-81965 Mass. Adv. Sh. 55, 61-62, 203 N.E.2d 556, 561-562. 4 Id. at 62, 203 N .E.2d at 562.
170 1965 ANNUAL SURVEY OF MASSACHUSETTS LAW §13.4 ton v. Alcoholic Beverages Cont1'ol Commission1 makes comment about
the case desirable. The dispute involved the approval by the Commis-sion of a transfer of a license from Dartmouth Street in Boston to a location on Massachusetts Avenue allegedly within 500 feet of a church (in violation of General Laws, Chapter 138, Section 16C).2 The First Church petitioned for a writ of certiorari to review the approval of the Commission, and asked that the transfer be declared invalid and quashed. A demurrer filed on behalf of the Commission was overruled; after a hearing on the merits, the Superior Court entered an order quashing approval of the transfer, and the Commission appealed.
The Supreme Judicial Court ruled that the demurrer should have been sustained. The Court pointed out that certiorari was proper only for the purpose of correcting errors of law apparent upon the record compiled by a court or an agency. Since the matter of approval of a license transfer did not "relate to the exercise of any judicial or quasi judicial functions," a remedy by certiorari was not available. The Court further stated: "The approval by the ABC of a transfer of a liquor license is discretionary and requires no hearing . . . . For these reasons, it is not an adjudicatory proceeding under G.L., c. 30A. . . . For the same reasons, it cannot be reviewed on a writ of
certio-• "3
ran . . . .
There are some rather surprising statements in this paragraph of the opinion. It is difficult to accept the Court's conclusion that the Com-mission is not acting in a quasi-judicial capacity when it reviews a license transfer for the purpose of giving or withholding approval. Admittedly, the process does not conform to the definition of an "ad_ judicatory proceeding" contained in Section 1(1) of the Administrative Procedure Act. But there must certainly be some form of relief avail-able if the Commission commits an error of law, especially if the Com-mission approves a license transfer in violation of Chapter 138. No other remedy apparently being available, a petition for a writ of certio-rari would seem to be the logical answer.
Based upon the fact that approval of such transfers is discretionary and requires no hearing, the Court concluded that the approval proc-ess is not an adjudicatory proceeding, a conclusion which is undoubt-edly correct. But the Court then continues that, for the same reasons, the proceeding cannot be reviewed by means of certiorari. Does the Court really mean that certiorari cannot be used as a remedy because of the absence of a hearing? Certainly an agency may make errors of law or act upon unsupported facts without a hearing; in fact, the absence of a hearing increases the likelihood that this will happen.
If the phrase, "for the same reasons," refers only to the fact that approval of such transfers is discretionary, the Court is on only slightly
§13.4. 11965 Mass. Adv. Sh. 863, 207 N.E.2d 880, also noted in §ll.l supra.
2 "Premisea, except those of an inn-holder, located within five hundred feet, mea-sured along public ways, of a church or school shall not be licensed for the sale of alcoholic beverages. • . ."
sounder ground. The Commission frequently has the right to exercise a wide discretion on questions of approval, and judicial interference in such matters should be restricted to extreme cases. Nevertheless, there are times when the Commission cannot freely exercise discretion; accordingly, it does not appear that a petition for certiorari should be demurrable. Although the Court may rarely actually reverse the agency, it should examine whatever record is available to see whether errors of law have been committed. In the present case, in light of the fact that the applicants sought to transfer to a location in violation of a statute, the Commission would appear to be entirely without discre-tion, and the Court's refusal to entertain a petition for certiorari on the ground that the agency's decision was discretionary is perplexing.
After trial on the merits, the Superior Court found that the location to which the license was to be transferred was within 500 feet of the petitioner's church. Assuming this finding to be correct, it is obvious that an error of law has been committed in the granting of the license transfer. But the Court seems unmoved by this: "We note that the petitioner cannot invoke the remedy provided by G.L., c. 139, §§16 and 16A, as amended by St. 1934, c. 328, §§ll and 12, since it is not a legal voter; but we do not reach the question whether it has any remedy at all."· Thus, at least some doubt is left whether arbitrary or unlawful action by the Commission in this area can be checked by the courts, an unsatisfactory conclusion to say the least.
§13.5. Adjudicatory powers: Approvals with reservations. In
Silverman's Liquor Mart, Inc. v. Licensing Board for the City of Boston,1 the Court ruled upon the effect of an approval "with a
reserva-tion," although it justifiably refused to act upon several other questions raised by the parties. The litigation involved a proposed sale of a cor-poration holding a liquor license. It appeared that for several years the capital stock of the corporation had been held by individuals act-ing as executors and trustees. In 1962 the Boston Licensact-ing Board had approved a transfer of the license .. 'with a reservation as to whether an executor or trustee may own stock in a corporate licensee: "2 Later
that year, the Board voted to renew the license in question, but re-served its right to pursue to a conclusion the legal question it had raised in connection with the earlier transfer.
The sale of the corporation was conditioned upon the securing of approval by all relevant licensing authorities. If such approval could not be obtained by April 12, 1963, the agreement was to be considered null and void. The Board agreed to approve the sale of stock, but sub-ject to the same conditions imposed during 1962; the buyer thereupon
.Id. at 864-865, 207 N.E.2d at 881-882. Perhaps mandamus would lie to compel the Commission to comply with the provisions of C.L., c. 138, §16C. But the filing of a mandamus petition would necessitate the same considerations as would be re-quired by certiorari, i.e .• whether the Commission had properly applied the statute to the facts in question.
172
1965 ANNUAL SURVEY OF MASSACHUSEITS LAW §13.6refused to conclude the proposed transaction. The bill in equity filed by the executors and trustees sought to compel the purchase. In addi-tion, the petitioners sought a declaration that General Laws, Chapter 138, Section 23, does not prohibit an executor or trustee from owning stock in a corporation which holds a liquor license, and an order di-recting the Boston Licensing Board to approve the transfer of the shares without reservations.
The Supreme Judicial Court acted upon one issue only. Holding that the approval with reservations by the Boston Licensing Board did not constitute full approval as such, the Court ruled that the defend-ants could not be compelled to conclude the transaction. Since the sale agreement required final and effective legal approval, approval with reservations would not be sufficient to meet the standard envisioned by the contract. The Court noted that the approval at best seemed "tentative," and did not satisfy the condition precedent to perform-ance of the defendants' agreement.s
The Court refused to con~ider " . . . the propriety or legality of the board's actions in approving renewals and transfers with 'conditions' and reservations."4 Since the agreement to transfer the stock could not be enforced, the Court refused to determine whether the Boston Licens-ing Board could be compelled to approve the said transfer. Likewise, the Court refrained from making any declaration on the question of ownership by executors and trustees. Nor did the Court comment upon whether declaratory relief was even available against the Board in such a situation.
The opinion really· rests upon a provision contained in a private agreement, and it is admittedly speculative to read anything else into it. However, the fact remains that the applicable statutes appear to be without provisions which would authorize a licensing board to grant approvals with conditions or reservations. The statutes contemplate clear-cut affirmative or negative decisions, which naturally are subject to review upon petition by aggrieved parties. Conditional approvals may well be difficult for the Court to accept should a case develop in which this issue must be determined.
§13.6. Regulation of private enterprises: Constitutional right to a
hearing~ In what is clearly the leading Massachusetts decision of the
year in the field of administrative law, the Supreme Judicial Court dealt with the problem of the "constitutional right to a hearing." At the same time, the Court wrestled with the questions traditionally posed by governmental attempts to regulate the carrying on of trades and professions by means of the administrative process.
In Milligan v. Board of Registration in Pharmacy} the Court acted
upon a request for review of certain decisions rendered relative to ap-plications for registration of retail drugstores. Milligan and Chester A .
SId. at 285, 204 N.E.2d at 716. 4 Ibid.
...
Baker, Inc., completed an application for a permit to conduct a retail drugstore, and filed the application with the Board in May of 1963. The Board finally assigned the application for a hearing in December, 1963, but only after the applicant had felt compelled to file a petition for writ of mandamus in an effort to force the Board to take action of some kind. After a hearing, the application was denied.
The petitioners thereupon filed a petition for judicial review pur-suant to Section 14 of the State Administrative Procedure Act. No return having been filed on behalf of the agency as required by Gen-eral Laws, Chapter 30A, Section 14(4), an application for the entry of a decree pro confesso was allowed by the Superior Court in May, 1964. In July, 1964, the Board's plea to the jurisdiction and motion to vacate the decree pro confesso were denied. A final decree was entered ruling that the Board had unreasonably delayed issuance of the requested permit, and that its decision violated the petitioners' constitutional rights. The Board appealed from the aforementioned decree.
At the same time, the case brought by one Cohen against the Board was in the process of litigation. Having likewise suffered a denial by the Board of an application for a permit to conduct a retail pharmacy filed with the Board during the summer of 1962, Cohen and Hingham Pharmacy, Inc., petitioned the Superior Court for review of that deci-sion. Certain questions raised as a result of a late notice to an inter-venor were disposed of by an initial trip to the Supreme Judicial Court,2 and the petition for judicial review was set down for hearing. The Board at this point took the extraordinary step of filing a peti-tion for a writ of prohibipeti-tion in the Supreme Judicial Court for Suffolk County, praying that the Superior Court be enjoined from hearing the petition for judicial review. The petitioners intervened and answered, and a demurrer was filed on behalf of the Justices of the Superior Court. The Single Justice reserved the matter without decision for the consideration of the Full Court.
Since the petition for judicial review in Milligan and the petition
for writ of prohibition in Cohen raised identical questions of
jurisdic-tion, the Supreme Judicial Court considered them together. The cases turned on the question whether the petitioners were entitled to judicial review by the Superior Court of the decisions rendered by the Board. General Laws, Chapter 30A, Section 14, provides:
Except so far as any provision of the law expressly precludes judi-cial review, any person or appointing authority aggrieved by a final decision of any agency in an adjudicatory proceeding,
whether such decision is affirmative or negative in form, shall be entitled to a judicial review thereof. . . . [Emphasis supplied.]
174
1965 ANNUAL SURVEY OF MASSACHUSETTS LAW §13.6 And "adjudicatory proceeding" is defined by Section 1(1) of the Act as " . . . a proceeding before an agency in which the legal rights, duties or privileges of specifically named persons are required by constitu-tional right or by any provision of the General Laws to be determinedafter opportunity for an agency hearing . . . . " [Emphasis supplied.] Accordingly, the right to judicial review depended upon a determina-tion whether the proceedings before the Pharmacy Board constituted "adjudicatory proceedings" under the definition contained in Sec-tion 1(1).
The definition of "adjudicatory proceeding" which appears in the Administrative Procedure Act is a reasonably clear one, and applica-tion of it by the Supreme Judicial Court would-in most instances-hardly be noteworthy. Ordinarily, the Court need only check relevant provisions of the General Laws to determine whether the particular petitioners involved were entitled to a hearing before the agency prior to the making of the decision sought to be reviewed. Before this deci-sion, the Court had not been called upon to define exactly when a hear-ing, although not required by statute, might nevertheless still be reo quired by the State or Federal Constitutions.
The statutes under which Milligan and Cohen filed applications for permits do not contain a specific requirement that the Pharmacy Board grant the applicants a hearing prior to acting upon the requests.s Al-though the Board did in fact actually hold a hearing in each instance, no statutory requirement compelled it to do so. But the Court did not stop at this point. Rather than automatically deciding that the pro-ceedings were not adjudicatory by virtue of the fact that the Board had been under no statutory obligation to grant hearings, the Court turned to the often forgotten "constitutional right" section of the ad-judicatory proceeding definition.
It thus must be decided whether, in any event, an "opportunity for an agency hearing" upon such an application is "required by constitutional right" within the meaning of c. 30A, §1(1). If such a hearing is constitutionally necessary (see Fifth and Fourteenth Amendments of the Constitution of the United States, and the Constitution of Massachusetts, Declaration of Rights, arts. 1, 10, and 12), the proceeqing is adjudicatory.4
The Court noted that an increasingly large number of occupations and professions are now being subjected to administrative regulation. That such regulation is generally in the public interest the Court did not question. But the Court was disturbed by the possibility that cer-tain forms of regulation might well not conform to the principles of procedural due process.
Basically, the Court adopted the viewpoint of Professor Davis to the effect that persons with a sufficient interest in a particular
govern-S G.L., c. 112, §§!l8, !l9.
175
mental detennination should be entitled to know and to meet "un-favorable evidence of adjudicative facts," except when some overriding circumstances - national security, for example ~ warrant more sum-mary treatment. Ii Citing Goldsmith v. United States Board of Tax Ap-peals6 (application to practice under the Board's rules) and Willner
v. Committee on Character and Fitness7 (application for admission to
the bar), the Court concluded that the right to engage in a particular occupation was of sufficient constitutional stature that due process of law required that denial of such a right be based upon facts determined after a full and fair hearing.
The Court stated:
There is growing recognition (I) that administrative decisions on applications for licenses and permits to engage in a lawful oc-cupation (either generally or at a particular place) directly affect the personal rights, property, or economic interests of the appli-cant, and (2) that fundamental considerations of fairness require that such decisions (particularly those resting upon adjudications of facts) be made objectively, under reasonable procedures, and with appropriate opportunity for judicial review.s
The fact that the General Court can lawfully delegate to an adminis-trative agency the duty of regulating a given occupation or profession does not mean that that agency can, within the limits of the State and Federal Constitutions, arbitrarily decide who is or is not to engage in a business. If an administrative agency is to be authorized to interfere with the pursuit of a vocation, there must be some substantial assur-ance that the agency is making reasonable decisions based upon the public interest and upon proper factual conclusions.
Thus, due process has finally been read into the Administrative Procedure Act's definition of adjudicatory proceeding, which, of course, is exactly what the drafters of the act intended. (In fact, it is clear that reference to constitutional rights would have to be implied had it not specifically been included, in order to make the sections in question consistent with the requirements of due process.) The Supreme Judi-cial Court is clearly justified in saying that the result ". . . carries out the broad, remedial purpose of the State Administrative Procedure Act . . . to provide comprehensively for procedural due process in administrative proceedings."9
The importance of this decision cannot be overstated. The Court has clearly come down on the side of the right of the individual to en-gage in the occupation of his choice without arbitrary interference by regulatory agencies. Likewise, the Court has given substance to the
5 Id. at 241. 204 N.E.2d at 509. citing Davis. Administrative Law §7.02 at 412 (1958).
176 1965 ANNUAL SURVEY OF MASSACHUSETTS LAW
§13.7
sometimes shadowy aSSurance of Sections 1 (1) and 14 of the act that judicial review will be available in cases in which constitutional, as opposed to statutory, provisions require that a hearing be granted. Thus failure, intentional or otherwise, on the part of the General Court to provide specifically for hearings in connection with given license or permit applications will no longer necessarily deprive the applicants of the right to have unfavorable agency decisions subjected to judicial review.
Nevertheless, notwithstanding the satisfaction that should be derived from the positive manner in which the Supreme Judicial Court treated an extremely important and sensitive issue, these companion cases are somewhat disquieting in light of what they demonstrate about the possible deterioration of the administrative process. One can only question why the administrative agency involved had to be threatened with a petition for a writ of mandamus before it would consent to act upon the Milligan application. Likewise, more than three years have now passed since the filing of the original application by Cohen and Hingham Pharmacy, Inc. It is inconceivable that the issues presented by these applications could have been so difficult that the agency was justified in consuming so much time upon them.
The substitute petition for judicial review filed by Cohen and Hing-ham Pharmacy, Inc. (not at issue in the Milligan opinion) contained
an allegation that the application for a permit had been denied be-cause of the fear of the independent proprietors who make up the Board that a national pharmacy chain operation would be given a foothold in Massachusetts. This, of course, is speculation, although it is true that each member of the Board at the time the Cohen appli-cation was heard was an independent proprietor, and was a member of the Massachusetts State Pharmaceutical Association, a group which intervened in both the Milligan and the Cohen cases in opposition to
the granting of the requested permits. The possibility that the adminis-trative process might be used for the purpose of furthering private eco-nomic interests is certainly not to be tolerated, and the Milligan
opinion hopefully will impress upon everybody concerned with ad-ministrative functioning the fact that regulation of private enterprise must be conducted solely on the basis of the public interest.
§I3.7. Subdivision control law: Constructive approval of plan.
Board of Selectmen of Pembroke v. R. & P. Realty Corp.1 represents
a solid effort by the Supreme Judicial Court to ensure that a~n~s
will follow the procedures set forth for them by the legislature, and t() .. p!.~~PllbIic·srlghtto!eIy
uP-QILPll1:>l!E
r~ds. The Pem-broke zoning by-law provides that sand and graveT may ordinarily be removed only after the granting of a permit by the Board of Selectmen. However, such material may be removed at any time without the securing of a permit from any way designated upon a plan which has been approved by the Town Planning Board.2§1!1.7. 11964 Mass. Adv. Sh. 1267. 202 N.E.2d 409. also noted in §14.20 infra.
177
In the present case, a subdivision plan had been submitted to the Planning Board on September 15, 1958. On November 8, the Board approved the plan subject to eight conditions. However, the Board did not send to the Town Clerk a certificate of its decision until November 20, some sixty-six days after submission of the plan. The defendant contended that the Planning Board had failed to take action within sixty days of submission of the plan, and that accordingly, under Gen-eral Laws, Chapter 41, Section 81 V, the plim should be deemed to have been constructively approved.8 The defendant thereupon proceeded to
remove sand and gravel without a permit, relying on what it believed had been constructive approval of a plan by the Planning Board. After the filing of a petition for declaratory judgment and for injunctive relief by the Board of Selectmen, the Superior Court restrained con-tinued operations by the defendant.
This determination was reversed on appeal by the Supreme Judicial Court. The Court pointed out that the purpose of the Subdivision Control Law was to create
. . . an orderly procedure for definitive action within stated times, 1
and for notice of that action in offices of record within stated times, so that all concerned may rely upon recorded action or the
I
absence thereof within such times.4Section 81BB of Chapter 41 provides that a person aggrieved by Plan-ning Board action or inaction may appeal to the Superior Court sitting in equity within twenty days of the recording of the decision in the office of the Town Clerk, or within twenty days after expiration of the time in which the Planning Board was required to act. Were the Plan-ning Board to have the authority to render a decision but not to file the same in the designated office, the clear time provisions for the taking of appeals would become greatly confused. If the Board has made a decision, it could extend the time for taking an appeal in-definitely simply by not filing the decision. On the other hand, if the Board does not act, an aggrieved party would have no way of ascertain-ing that the Board had in fact not acted, as opposed to the possibility that the Board had acted but had simply not recorded its action.
Likewise, the Court pointed to Section 81V of the chapter, wherein it is provided that the Town Clerk shall issue a certificate upon request in cases in which plans have been constructively approved, such certif-icate to be issued after the taking and the resolution of an appeal, or after the expiration of twenty days if no appeal has been claimed. If
the Planning Board were to be allowed to operate as it did in the present matter, the Clerk would have to check with the Board in each case in which an appeal had not been claimed to determine whether action had been taken. Giearly, the Court commented, the legislature
8 "Failure of the planning board to take final action regarding a plan submitted by an applicant within sixty days after such submission . . . shall be deemed to be an approval thereof." G.L., c. 41, §81U, as amended through Acts of 1958, c. 377, §l.
178 1965 ANNUAL SUR.VEY OF MASSACHUSETTS LAW §18.8
had not intended to make it impossible for the Clerk to rely upon his own records.
Since the statute provides for definitive rights to accrue upon action or inaction within stated times, and for clear record of such action or inaction, the Court ruled that the uncertainties created by the particu-lar Planning Board procedure in question could not be permitted. Accordingly, the Court held that "final action regarding a plan," as that phrase was used in General Laws, Chapter 41, Section 8IU, in-cluded the filing of a certificate in the office of the Town Clerk. There-fore, the plan in question was a constructively approved plan, and the defendants were entitled to rely upon it for purposes of their sand and gravel operations. The Court did point out, however, that the Plan-ning ~oard remained free to modify, amend, or rescind the construc-tive approval of the plan under General Laws, Chapter 41, Section 8IW,5 and that, upon such action, the Selectmen could once again apply for a restraining order against the defendants.
Simply as a question of interpretation of the Subdivision Control Law, the decision in this case is of academic interest only, since the statute in question has been amended to provide in express terms that a certificate must be filed with the Town Clerk within sixty days of submission of the plan in order for the Planning Board to avoid con-structive approval.6 But, coming in the same term as Milligan, the
opinion is of importance as further indication that the Supreme Judi-cial Court is prepared to hold the administrative agencies to the re-sponsibilities vested in them by statute, and to protect the public from damage as a result of arbitrary or unauthorized administrative activity. §13.8. Comptroller of the Commonwealth: Limitations upon authority. In O'Connor v. Deputy Commissioner and Comptroller,1
the Supreme Judicial Court took advantage of another opportunity to delineate the limitations upon the authority of an administrative offi-cial. The case involved an attempt by a retired Deputy Commissioner of Banks to compel the Comptroller of the Commonwealth to certify that a given amount was owed to him as a "vacation allowance."
Pursuant to an opinion of the Attorney General to the effect that a Deputy Commissioner of Banks was subject to the "Rules and Regu-lations Governing Vacation Leave" promulgated under General Laws, Chapter 7, Section 28, and was therefore entitled to receive a vacation allowance in accordance with those rules, the petitioner submitted a voucher requesting that a sum be paid him in lieu of vacation leave. The opinion of the Attorney General notwithstanding, the Comptrol-ler not only refused to certify the claim but denied it out of hand
with-1\ "A planning board. on its own motion or on the petition of any person inter-ested. shall have power to modify. amend Or rescind its approval of a plan of a subdivision. or to require a change in a plan as a condition of its retaining the Itatus of an approved plan."
6 Acts of 1960. c. 266. §2.
out submitting it for review by the Governor and Executive Councita The Deputy Commissioner thereupon brought a petition for writ of mandamus in the Superior Court to compel the Comptroller to certify the amount requested. The Superior Court ordered the writ to issue, and the Comptroller appealed.
The holding of the Supreme Judicial Court relates solely to a pro-cedural question. Pointing out that a petitioner may not resort to mandamus when another effective remedy is available, the Court ruled that the petitioner should have made a contract claim under the pro-visions of General Laws, Chapter 258, Section 1. The Court remarked that the fact that the Comptroller had not performed his statutory duty with respect to the voucher did not authorize the petitioner to proceed in a fashion different from that designated under Section 1 of Chapter 258. Accordingly, the order of the Superior Court directing issuance of the writ of mandamus was reversed, and the Deputy Com-missioner's petition was dismissed.
Despite this easy procedural solution, the Court seized upon the opportunity once again to define the limits of the Comptroller's au-thority. The Court noted that the powers of the Comptroller are plainly set forth by statute,S and that he is restricted simply to examin-ing the accounts and demands that are presented to him. He may not lawfully deny a claim on his own motion; but " . . . if it appears to him that there are improper charges in said accounts or demands he shall report the same to the governor and council, with a separate certificate therefor."4 And the Court included language formerly used in Ward v. Comptroller of the Commonwealth: "It is clear that the Comptroller himself has no authority to direct the withholding of payments. If he thinks that some charge is improper, it is then his func-tion to report it to the Governor and Council."5 And the Court con-cludes: "The statute is thus free from ambiguity, and our examination of the record reveals no defensible reason for the respondent's failure to comply with its provisions."6
That the Comptroller's authority is limited in this fashion, of course, comes as no surprise. General Laws, Chapter 7, Section 13, is quite clear, and the Ward case to which the Court refers is an unambiguous application of it. What is of consequence is the fact that such a re-statement of the authority of a public official was necessary at all, and the willingness of the Supreme Judicial Court to include the restate-ment as dictum. The Court is obviously prepared to act strongly in cases of unauthorized activity by administrative officers - be they members of boards or individual officials such as the Comptroller. To this end the Court, in the O'Connor case, took the trouble to restate
2 As required by C.L., c. 7, §13. 3 Ibid.
4 Ibid., cited at 1965 Mass. Adv. Sh. 329, 331, 204 N.E.2d 705, 706.
I) 345 Mass. 183, 186, 186 N.E.2d 461, 463 (1962), cited at 1965 Mass. Adv. Sh. 329, 331, 204 N.E.2d 705, 706.
180 1965 ANNUAL SURVEY OF MASSACHUSETTS LAW §13.9
the principles governing the Comptroller's operations, despite the fact that the case was easily resolved on a procedural question and could very probably have been reduced to a rescript opinion.
The opinion in the O'Connor case is, of course, no guarantee that the administrative official involved will not subject the Supreme Judi-cial Court's patience to further strain. Apparently the Ward case alone was not successful. What the Court may say the next time, and what can be done to relieve the Court of passing on this question again and again, remains to be seen.
§13.9. Miscellaneous decisions. There are several decisions which warrant mention in passing, although they cannot be said to be of substantial importance to the development of administrative law in this Commonwealth. They may, however, be of some interest to the practitioner.
In Sullivan v. Fall River Housing Authority,l the Supreme Judicial Court affirmed a final decree dismissing a bill in equity which had sought to prevent a proposed rent increase. The petitioner had pro-ceeded under General Laws, Chapter 121, Section 26U, the final sen-tence of which provides: "Compliance with the Housing Authority Law, the rules and regulations adopted by the housing board here-under, and the terms of a clearance or low-rent housing project ap-proved by the housing board, may be enforced by a proceeding in equity."
The Court stated:
The sentence just quoted manifestly states a procedure open only to the housing board, and now to the Department of Com-merce and Development. There is no indication of a legislative intent at any time to confer a right upon tenants of a housing authority to bring a suit like the present. . . .2
Were the Housing Authority actually violating the provisions of Sec-tion 26FF, it would be the responsibility of the Department of Com-merce to enforce the statute. Should the Department refuse, the Court concluded, mandamus would be the petitioner's remedy.
Huntoon v. City of Quincy3 involved the removal of two police
of-ficers for "conduct unbecoming an officer in receiving stolen property." The officers had been suspended on October 17, 1960, with discharge hearings scheduled to be held on October 26. (The suspensions were in-validated by the Court for failure to follow the proper civil service procedure.) However, the discharge hearings were continued at the officers' request, the officers having represented that it would be unfair to ask them to answer charges while criminal complaints against them were still pending. The hearings have not been resumed.
The Court refused to accept the officers' contention that they were
§13.9. 1 1965 Mass. Adv. Sh. 523, 205 N.E.2d 701, also noted in §14.36 infra.
2Id. at 524, 205 N.E.2d at 702.
entitled to compensation from and after October 26, 1960. The effec-tive date of a discharge need not be the same or later than the date on which the discharge decision is actually made. The assumption that a discharge could not be made effective earlier "is neither required by the terms of the statute nor necessary to protect the plaintiffs' rights."4 Since the hearings were continued at the request of the plaintiffs, the Court ruled that the date of commencement of the hearings could lawfully be made the effective date of discharge once the actual deci-sion to discharge is made.
In Massachusetts Co-operative Bank League v. Board of Bank In-corporation/' the Court considered an approval by the Board of an
application filed under General Laws, Chapter 170, Section 49, by the Home Co-operative Bank of Worcester for conversion into a federal savings and loan association. The League was admitted as a party to the proceeding before the Board, and filed a petition for review of the Board's decision in the Supreme Judicial Court for Suffolk County. The Single Justice reserved and reported the case without decision for consideration by the Full Bench.
General Laws, Chapter 170, Section 49, provides that the Board's decision shall be reviewed in accordance with the standards set forth in Section 14(8) of the Administrative Procedure Act. The League argued that the Board had committed an error of law by incorrectly applying the standard of "public convenience and advantage" which appears in Section 49, and that the decision was not supported by sub-stantial evidence.
The Court repeated its discussion contained in Chicopee Co-opera-tive Bank v. Board of Bank Incorporation,6 to the effect that in
apply-ing the "public convenience and advantage" standard the Board should consider: (1) the convenience and advantage to the bank and its share-holders; (2) the people in the community who do business with the bank in question; and (3) the effect of the proposed conversion upon the banking system as a whole and upon the public. The Board found that unless the disabilities inherent in the bank's present charter could be overcome, "'its future prospects for normal growth and continued service to the public are not encouraging: "7 The Board also
con-cluded that conversion would allow the use of more convenient savings plans, more advantageous dividend policies, greater flexibility in mort-gage lending, and increased borrowing capacity. Likewise, it was found that release of this single bank from the co-operative banking system was hardly likely to weaken that system, and that public convenience and advantage would be promoted by approval of the proposed con-version.
The Supreme Judicial Court ruled that the Board's conclusions
4Id. at 569, 206 N.E.2d at 66.
5 1964 Mass. Adv. Sh. 1283, 202 N.E.2d 598, also noted in §7.5 supra.
6347 Mass. 744, 200 N.E.2d 284 (1964), noted in 1964 Ann. Surv. Mass. Law §§7.l0, 13.1.
182 1965 ANNUAL SURVEY OF MASSACHUSE'ITS LAW §13.10
were based upon subsidiary findings which in turn were supported by substantial evidence. The Court pointed out that the fact that Home was not in immediate danger of financial collapse did not, in and of itself, require disapproval of its application. ". . . [T]he conversion would tend to accelerate its growth and make it stronger, to the general advantage of the banking structure as a whole."8 General Laws, Chap-ter 170, Section 49, clearly demonstrates the legislature's intent that co-operative banks be allowed to free themselves from the restrictions of Chapter 170 by converting to federal savings and loan associations,
if the public convenience and advantage will thereby be promoted. It is the Board of Bank Incorporation which has been delegated the responsibility of considering applications for conversion, and, subject to judicial review, approving or denying them. In the present case, the Court noted, the Board has merely done what the General Court has authorized it to do.
§13.10. Adoption of procedural rules. Although a variety of pro-visions of the State Administrative Procedure Act have, at one time or another, been ignored by different agencies, undoubtedly the shortest provision is the most abused. General Laws, Chapter 30A, Section 9, provides simply: "Each agency shall adopt regulations governing the procedures prescribed by this chapter." The drafters of the Act ob-viously envisioned the adoption by each agency of a set of procedural rules which would guide those coming into contact with the adminis-trative process through the various steps contemplated by the chapter. Likewise, the rules would act as a measure of discipline for the agency itself, forcing the members to follow distinct and proper procedures and ensuring that the public could expect the kind of consistent agency practice to which it is clearly entitled.
Unfortunately, despite the mandatory language contained in Section 9, an uncomfortably large number of the administrative agencies have failed to comply. Some of those which have promulgated the required rules have compiled inadequate sets, which, although they may meet the letter of the statute, hardly can be said to satisfy its spirit. In light of the fact that failure to comply with the directive of Section 9 could result in judicial invalidation of actions taken by the offending agency, the reluctance of some agencies to compile a sufficient set of rules be-comes all the more surprising. At this writing, it would appear that the agencies operating without rules have been spared primarily by the fact that petitions for judicial review have generally not bothered to raise this issue.
During the past year, Attorney General Edward W. Brooke has taken first steps to resolve the problem. A committee composed of six mem-bers of the Attorney General's legal staff, chaired by Assistant Attorney General Nelson I. Crowther, Jr., has compiled a model set of rules for use by the agencies in accordance with Section 9 of the Act. Rules have been drafted for the governing of adjudicatory proceedings held under
Sections 10 and 11, as well as for the promulgating of regulations under Sections 2 and 3. With slight alterations, the model set can be adapted for use by any of the agencies, boards or commissions subject to Chapter 30A. Although the final decision to adopt the rules made available by the Attorney General must, of course, be made by each agency individually, the difficult task of preparation will already have been accomplished.
The model set of rules governing adjudicatory proceedings include sections upon pleading; motions; service; parties and intervention; evidence and subpoenas; depositions and stipulations; hearings; post-hearing procedure; and general sections relating to various problems arising in administrative practice. The objective of this model set is to guide the practitioner through each step of the adjudicatory pro-ceeding, as well as to set forth standards of practice to be adhered to by the administrators.
Since the Administrative Procedure Act spells out the steps to be followed when promulgating rules and regulations with a substantial degree of care, an extensive set of rules governing this subject was not considered necessary. However, a smaller set of procedural rules has been prepared, including sections dealing with petitions for the adop-tion of regulaadop-tions; public participaadop-tion at preliminary meetings; no-tice provisions; public hearings; emergency regulations; promulgation of regulations without hearings; and the rendering of advisory opin-ions. Since, with the exception of proceedings conducted pursuant to petitions filed under Section 4,1 the promulgation of regulations is an activity participated in primarily by members of the agency rather than by the public, the rules governing these matters are intended to serve mainly as a guide for the agency members.
Failure to enact the procedural rules referred to in Section 9 of the Act could perhaps be forgiven during the first decade of Chapter 30A. Many agencies are composed wholly of lay members, and are not as-signed special counsel; such agencies might well not be expected to produce exhaustive sets of procedural regulations. Now, however, the work has been done, and continued refusal to adopt some kind of a representative compilation of rules in compliance with Section 9 can-not be defended.
