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Can the Administrative State Be the Judge in Its Own Case?

January 27, 2023

Everybody knows that the bureaucracies that make up the Administrative State hold immense power to control how businesses operate, how private property is used, and countless other aspects of private life nationwide. What’s not as well known is the way the law often allows these agencies to override the basic principles of due process. That’s the issue that the Arizona Supreme Court is considering in a case called Legacy Foundation—a case in which the justices recently took the unusual step of asking for a new round of briefing after having already heard the arguments.

The case concerns a little-known provision of state law that says an agency can participate in hearings before an Administrative Law Judge, and then—if the judge rules against the agency—simply override the judge’s opinion and declare itself the winner, anyway. If John Doe is charged with, say, running a business without a required license, the agency could level an accusation, and allow him to appear at a hearing to argue why the agency is wrong—perhaps he claims that he’s not required to get that particular license. But even if he persuades the judge to rule in his favor, the agency can simply set aside that ruling and declare John guilty notwithstanding.

In the Legacy Foundation case, the state’s Elections Commission accused the Foundation of running political advertisements that violated certain state laws. The Foundation said the Commission was wrong, and that it had no jurisdiction over the case—and an Administrative Law Judge agreed, ruling in favor of the Foundation. But the Commission simply overrode that decision and declared itself correct. When the Foundation later challenged that ruling, the Commission said it was too late—the decision had already been made (a principle lawyers call res judicata).

Now the Foundation has appealed its case to the Arizona Supreme Court, which heard arguments in November. Before that, the Goldwater Institute filed a friend of the court brief, explaining why the res judicata rule should not prohibit Legacy from making its arguments. That brief attracted the justices attention; during the arguments they repeatedly asked the lawyers about the issues our brief raised. Now they’ve asked for a new set of briefs to discuss whether the Commission’s actions in overriding the original judge and declaring itself the winner violated the basic principles of due process.

The answer to that—as we explained in a new brief filed today—is yes. One of the most fundamental rules of due process of law is that nobody may be the judge in his or her own case—and it was on that basis that the Arizona Supreme Court years ago declared it unconstitutional for cities to run Municipal Court systems that allowed the city council to replace judges for whatever reason politicians wanted. Such an arrangement, the justices said, inevitably pressured the judges to rule in favor of the city in order not to lose their jobs. In the same way, the law that allows bureaucracies like the Elections Commission to simply nullify any rulings against itself undermines public confidence in the impartiality of the system

Remarkably enough, the rule that allows agencies to erase rulings against themselves is not all that unusual. Some other states and the federal government have similar rules in place—rules that, in the words of federal Judge Douglas Ginsburg and law professor Steven Menashi, are “at odds with the most basic notion of due process.” But Arizona is uniquely poised to revive the crucial constitutional principle of fairness. The reason it that the Grand Canyon State recently abolished the legal principle known as “Chevron deference”—the idea, named after a federal case called Chevron v. National Resources Defense Council, that judges should lean in favor of bureaucratic decisions. Federal courts invented that idea in the 1980s, and many state courts copied it—but before then, judges tended to be skeptical, not deferential, toward agencies when they tried to expand their powers. Now that Arizona has officially abolished Chevron deference, it’s time for courts to once again treat bureaucracies as the dangerous and powerful entities that they are—government agencies that make rules, investigate alleged infractions of the rules, and punish people for those violations…but which are not accountable to the voters.

You can read the brief we filed with the Arizona Supreme Court today here.

Timothy Sandefur is the Vice President for Legal Affairs at the Goldwater Institute.



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