Administrative Adjudication

Unlike the common perception, courts are not the main instrumentalities for the disposition of controversies. Within a complex government, more and more controversies are resolved before administrative judges, within the scope of power delegated to various administrative agencies. Administrative adjudication has grown both at the federal and state level. At the federal level, for example, adjudication takes the form of a trial-usually called an administrative hearing-and informal adjudication-often described as the administrative process that is neither rulemaking nor a hearing.

Examples of administrative adjudication

According to their enabling statute, some agencies can and do function both in an rulemaking and adjudicative capacity. For example, in addition to its rulemaking tasks, the EPA has adjudicating functions. The Toxic Substances Control Act requires any chemical manufacturer, who learns that a product presents “a substantial risk” of health or environmental harm, to inform the EPA, and thus it delegates adjudicating authority to the EPA for all instances of corporations failing to do so.

A few years ago, the EPA filed a complaint against the DuPont Corporation for failing to inform the agency about the toxic effects of a soap like material (Perfluorooctanoic acid which is also known as C-8), DuPont used to make stain- and stick-resistant surfaces and materials for a wide array of products, such as Teflon frying pans (Teflon is thte DuPont brand name for Polytetrafluoroethylene (PTFE), a synthetic fluoropolymer of tetrafluoroethylene). The EPA complaint was the result of pressure coming from the Environmental Working Group, a private advocacy group, and by Ohio and West Virginia residents. The administrative adjudication ended in this instance with a settlement filed with the EPA's Environmental Appeals Board.

In another example of administrative adjudication, when a person disputes federal retirement benefits, she will first have to raise that dispute with the Social Security Administration of the Department of Health and Human Services, which will issue an order or decision. If the aggrieved person is still unhappy with the outcome, she will seek next a court’s intervention.

Administrative adjudications can be appealed in courts of law

Under the Administrative Procedure Act, all administrative decisions are subject to judicial review in courts. The scope of judicial review is limited, and it does not constitute a retrial of the case. Its scope is similar to that of judicial appeal of trial court decisions.

Some agencies function only in an adjudicative capacity. However, in that capacity they issue rules regarding their adjudicative procedure. For example,
the Provider Reimbursement Review Board (PRRB) issues Rules (Board Rules) on the Medicare Part A appeal process and procedures at the PRRB. A relatively recent but complex controversy focused on the reimbursement amount health care providers receive for inpatient services rendered to Medicare beneficiaries by hospitals which serve a disproportionate share of low-income patients. The adjustment amount is determined in part by the percentage of a hospital's patients who are eligible for Supplemental Security Income (SSI), called the SSI fraction. Each year, the Centers for Medicare & Medicaid Services (CMS) calculates the SSI fraction for an eligible hospital and submits that number to the hospital's “fiscal intermediary,” a Department of Health and Human Services (HHS) contractor. The intermediary computes the reimbursement amount due and then sends the hospital a Notice of Program Reimbursement (NPR). According to the enabling statute, 42 U.S.C. §1395oo(a)(3), a provider dissatisfied with the determination has a right to appeal to the Provider Reimbursement Review Board (PRRB or Board) within 180 days of receiving the NPR. In all such situations, according to 42 CFR 405.1841(b) (2007) the Secretary of HHS is authorized the PRRB to extend the 180-day limit, for good cause, up to three years. The controversy at hand sprang from a computation error which was made public in 1997 by CMS. Hospitals affected by that reimbursement error, and thus which had lost government money, appealed to PRRB for loss of revenue from 1987 through 1994, requesting PRRB to hear their case despite the long lapse of time, arguing that their case was entitled to equitable tolling of the limitations period. PRRB declined to hear the case stating that it had no equitable jurisdiction. The plaintiffs appealed. The district court upheld the PRRB's decision. The D.C. Circuit reversed. The U.S. Supreme Court reversed the District Court decision, too and, in Sebelius v. Auburn Regional Medical Center (2013) held that the statute of limitations is not a jurisdictional issue, and that PRRB has to hear the case. It remanded the case to the trial court for further fact finding.

While many agencies announce their decisions, there is no statutory requirement for their publication similar to the statutory requirement to publish both the agency’s proposed and final rules. As shown in the next section, this creates a rather cumbersome situation for those interested in finding agency decisions. Federal agencies have excellent Web sites though and they contain their more recent rulemaking and decisional law. However, be prepared to encounter surprises because nothing mandates them to permanently keep those documents available to the public.

Two of the major fee-based electronic services, Westlaw and Lexis, cover many of those decisions, while well-established publishers, such as Commercial Clearing House (CCH), which specializes in publishing administrative decisions, have entered the digital realm with various degrees of success.