COURT OF APPEALS OF VIRGINIA 

Present: Judges Benton, Bray and Senior Judge Hodges 

Argued at Norfolk, Virginia 

BILLY M. WOODS 

 OPINION BY 

v. Record No. 0284-97-1 JUDGE JAMES W. BENTON, JR. 

 FEBRUARY 3, 1998 

COMMONWEALTH OF VIRGINIA 

 DEPARTMENT OF MOTOR VEHICLES 

 FROM THE CIRCUIT COURT OF THE CITY OF VIRGINIA BEACH 

Robert B. Cromwell, Jr., Judge 

 Martin A. Thomas (Decker, Cardon, Thomas & 

Weintraub, on brief), for appellant. 

 Jeffrey A. Spencer, Assistant Attorney 

General, for appellee. 

 Based upon the Department of Motor Vehicles' policy to 

suspend or revoke the sales license of anyone convicted of a 

felony within the preceding five years, the Commissioner revoked 

Billy H. Woods' license to sell motor vehicles. Woods contends 

the Department's policy constitutes an improper promulgation of a 

rule in violation of the Administrative Process Act and violates 

his right to due process by arbitrarily revoking his license 

without the process afforded by statute. For the reasons that 

follow, we reverse the order and remand for reconsideration. 

 I. 

 The evidence before the administrative hearing officer 

proved that Woods was first licensed by the Department as a motor 

vehicle salesperson eighteen to twenty years ago. On December 

15, 1994, Woods, who was then working as a construction 

supervisor, pleaded guilty in federal court to a felony charge of 
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credit card fraud in violation of 15 U.S.C. § 1644(a). This 

felony conviction did not arise out of the business of selling 

motor vehicles. 

 Following the conviction, Woods was again employed as a 

motor vehicle salesperson. After beginning his employment as a 

salesperson, Woods mistakenly believed that his license to sell 

motor vehicles had expired, and he applied for renewal of his 

license on January 19, 1995. In his application for renewal, 

Woods disclosed his conviction and supplied the Department with 

the pertinent court documents. The Department then conducted an 

administrative review to determine whether Woods' license should 

be revoked pursuant to Code § 46.2-1575(13).1

 An informal fact 

finding conference was held. See Code § 9-6.14:11. Following 

the conference, the Department informed Woods that in accordance 

with its policy his license was being revoked because he had been 

convicted of a felony. Woods then requested a hearing pursuant 

to Code § 9-6.14:12. 

 At the administrative hearing, Woods' supervising sales 

manager testified that Woods was the automobile dealership's best 

 

 1In pertinent part, Code § 46.2-1575(13) reads as follows: 

 A license or certificate of dealer 

registration or qualification issued under 

this subtitle may be denied, suspended, or 

revoked on any one or more of the following 

grounds: 

* * * * * * * 

 13. Having been convicted of a felony. 
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employee. He testified that Woods was honest and well-liked, had 

a good sales record, had a strong work ethic, and had been the 

top salesperson for four months in a row. The vice president and 

general manager of the automobile dealership testified as to 

Woods' "impeccable" integrity and stated that the dealership 

would like to keep Woods as a salesperson. 

 L.S. Stupasky, the Department's representative, testified 

that in 1994 the Department reviewed its policy concerning felony 

convictions. At that time, he and another Department employee 

sent the following memorandum to the Commissioner of the 

Department: 

 This is a follow up to the "Felony 

Conviction" meeting held on Wednesday, June 

29th and to confirm the DMV management 

decision and current policy guidelines 

followed by the Dealer Licensing Section. 

The following policy addresses "denial" of an 

application for a license as a 

salesperson/motor vehicle dealer where the 

applicant has been convicted of a felony. If 

you affirm the prior decision and current 

process, please sign the attached approvals 

sheet. 

 CURRENT POLICY GUIDELINES FOR DENIAL

 * Currently on Probation/Parole status. 

 * Felony conviction occurred within five 

 years of the application date. 

 * Code Authority - § 46.2-1575 Grounds for 

 denying, suspending, or revoking 

 licenses or certificates for dealer 

 registration or qualification. 

 A license or certificate may be denied 

 on any one or more of the following 

 grounds: 
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 "13. Having been convicted of a 

 felony;" 

 Stupasky testified that pursuant to the policy contained in 

this internal memorandum, he is required to recommend revocation 

whenever a licensee has been convicted of a felony. He further 

testified that prior to 1994, the Department's practice regarding 

felony convictions had been to revoke only the license of a 

licensee who had been convicted of a felony related to the 

business of selling motor vehicles. That policy had been in 

existence from 1988, when Code § 46.2-1575 was enacted, until the 

Commissioner changed the policy in 1994. 

 Stating that "[i]t is the policy of the Department of Motor 

Vehicles to revoke the license [of] any salesperson that has been 

convicted of a felony within the past five years," the hearing 

officer recommended revocation of Woods' license. The hearing 

officer ruled that the endorsements of Woods' sales manager and 

general manager were "not sufficient to overcome the statutory 

authority and the Department's policy." 

 The Commissioner accepted the hearing officer's 

recommendation and revoked Woods' motor vehicle sales license for 

five years from the date of his felony conviction. The 

Commissioner's decision stated that the revocation was consistent 

with Code § 46.2-1575(13) and "the DMV policy to revoke the 

salesperson license of anyone convicted of a felony within five 

years of the date of the application." The decision also stated 

that "[a]lthough representation of your good character is 
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commendable, that information is not sufficient to allow you to 

remain licensed in contravention of the Code of Virginia and DMV 

policy." 

 After the Commissioner entered his final decision revoking 

Woods' license, Woods filed a petition for appeal to the circuit 

court. The circuit court judge affirmed the Commissioner's 

decision revoking Woods' license. 

 II. 

 Code § 46.2-1508 states that "[i]t shall be unlawful for any 

person to engage in business in the Commonwealth as a motor 

vehicle . . . salesperson without first obtaining a license." At 

all times relevant to the issues in this case, the Commissioner 

of the Department of Motor Vehicles was the entity charged with 

issuing and enforcing the licensing requirements. See Code 

§ 46.2-1508 - 46.2-1527.8.2 Indeed, Code § 46.2-1575 provided 

that "[a] license . . . issued under this subtitle may be denied, 

suspended or revoked [by the Commissioner of the Department of 

Motor Vehicles] on any one or more of the following 

grounds: . . . 13. Having been convicted of a felony." 

(Emphasis added). The statute specified eighteen grounds for 

which a license may be denied, suspended or revoked. 

 

 2In 1995, the General Assembly amended the provisions of 

Article 2 (Motor Vehicle Dealer Licenses), Code § 46.2-1508 to 

§ 46.2-1521, and Article 8 (Denial, Suspension, and Revocation of 

Dealer Licenses), Code § 46.2-1574 to § 46.2-1579, to substitute 

the Motor Vehicle Dealer Board, see Code § 46.2-1500, for the 

Commissioner. See 1995 Acts of Assembly, ch. 767. 
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 The evidence at the administrative hearing proved that the 

Commissioner's statutory authority to deny, suspend, or revoke a 

license for the conviction of a felony was first enacted in 1988. 

See 1988 Acts of Assembly, ch. 865. The evidence also proved 

that prior to 1994, the Department exercised its discretion under 

this provision of the statute to revoke the licenses of those 

licensees who had been convicted of felonies related only to the 

business of selling motor vehicles. However, in 1994, the 

Commissioner acted on a recommendation from the Department's 

management and instituted a policy that required the Department 

to suspend or revoke, without exception, the license of any 

licensee who had been convicted of any felony. Indeed, the 

Department's representative testified at the administrative 

hearing that when an applicant or current holder of a license has 

a felony conviction the employee who reviews the application 

always recommends to the Commissioner, pursuant to the 

Department's current policy guidelines, that the license be 

denied or revoked. 

 Thus, in 1994, the Department changed its earlier policy and 

enacted a policy that eliminates any discretion from the 

Department's review of the license status of a person who has 

been convicted of a felony. The current policy mandates, without 

exception, the suspension or revocation of the license of any 

salesperson convicted of a felony. The Department applied this 

changed policy to Woods' application. Thus, the Department 
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enforced in a case decision a "policy guideline" that it adopted 

as a standard for applying the statutory mandate of Code 

§ 46.2-1575(13). 
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 III. 

 In Virginia Board of Medicine v. Virginia Physical Therapy 

Association, 13 Va. App. 458, 413 S.E.2d 59 (1991), aff'd, 245 

Va. 125, 427 S.E.2d 183 (1993), this Court ruled as follows: 

 Under the [Administrative Process Act], 

"rule" and "regulation" are defined as "any 

statement of general application, having the 

force of law, affecting the rights or conduct 

of any person, promulgated by an agency in 

accordance with the authority conferred on it 

by applicable basic laws." Code 

§ 9-6.14:4(F) (emphasis added). "Promulgate" 

means to publish or to announce officially, 

and is commonly used in the context of the 

"formal act of announcing a statute." 

Black's Law Dictionary 634 (5th ed. 1983). 

The [Administrative Process Act] and the 

Virginia Register Act provide the procedure 

for the promulgation and adoption of a rule 

or regulation. An agency's rule or 

regulation is invalid if the agency failed to 

comply with these statutes in the 

promulgation process. 

13 Va. App. at 466, 413 S.E.2d at 64. This Court noted that 

rules that are not promulgated according to the statutory 

procedure of the Administrative Process Act and the Virginia 

Register Act are invalid as "de facto" rules. Id. 

 However, in Jackson v. W, 14 Va. App. 391, 419 S.E.2d 385 

(1992), we noted that this Court has held that "[i]n order to 

carry out its [statutory] purpose, an agency may adopt an 

'"interpretative rule" without the binding force of law.'" Id.

at 399, 419 S.E.2d at 390 (quoting Bader v. Norfolk Redev. & 

Hous. Auth., 10 Va. App. 697, 702, 396 S.E.2d 141, 144 (1990)). 

We held that when the legislature authorizes an agency to 
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supervise the administration of a regulatory act, the agency may 

establish guidelines for its employees to use in applying the 

statute so as to give effect to the intent and spirit of the 

legislation. See Jackson, 14 Va. App. at 399, 419 S.E.2d at 

389-90. Thus, we held that a state agency may issue to its 

employees "guidelines . . . [that] are . . . interpretative rules 

adopted in order to carry out the agency's purpose of 

implementing the Commonwealth's policy [contained in the agency's 

basic law]." Id. at 400, 419 S.E.2d at 390.3

 

 3Other jurisdictions recognize the power of administrative 

agencies to adopt interpretative rules or guidelines. See, e.g., 

General Electric Co. v. Gilbert, 429 U.S. 125, 141-42 (1976) 

(noting that interpretative rules need not be authorized by 

legislative enactments and should be given weight if persuasive); 

Waverly Press v. Department of Assess. & Tax., 539 A.2d 223, 227 

(Md. 1988) (holding that "interpretative rules 'only interpret 

the statute to guide the administrative agency in the performance 

of its duties until directed otherwise by decisions of the 

courts'"); Town of Northbridge v. Town of Natick, 474 N.E.2d 551, 

556 (Mass. 1985) (ruling that agencies may adopt internal 

policies for carrying out their duties; however, those "policy 

statements do not have the legal force of a statute or 

regulation"); Shenango Township Bd. of Supervisors v. 

Pennsylvania Public Util. Comm'n, 686 A.2d 910, 914 (Pa. Cmwlth. 

1996) (holding that "a statement of policy does not have the 

force of law, . . . is merely interpretive in nature . . . [, 

and] is only persuasive so long as it represents an accurate 

interpretation of the relevant statute or other authorities from 

which it is derived."); Great American Nursing Centers v. 

Norberg, 567 A.2d 354, 356 (R.I. 1989) (recognizing that "an 

interpretive rule is not specifically authorized by a legislative 

enactment; rather, it is promulgated by an administrative agency 

for the purpose of guidance and definition"); Appalachian Power 

Co. v. Tax. Dept., 466 S.E.2d 424, 434 (W. Va. 1995) (holding 

that "[i]nterpretative rules . . . merely clarify an existing 

statute or regulation[,] . . . need not go through the 

legislative authorization process[,] . . . do not have the force 

of law . . . [, and are not] irrevocably binding on the agency or 

the court."). 
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 Based upon the evidence in this record, we cannot say that 

the Commissioner's adoption of the guidelines in 1994 is the type 

of "de facto" rule that this Court condemned in Virginia Board of 

Medicine. When the Department enforced Code § 46.2-1575(13) 

prior to 1994, the policy of the Department was to exempt from 

suspension the licenses of salespersons whose felony convictions 

did not relate to the business of selling motor vehicles. The 

record does not establish whether this was a written policy or 

unwritten practice. However, in 1994, the Commissioner approved 

a written policy guideline statement that informed Department 

employees charged with reviewing licensees' applications of the 

guidelines that were to be employed from that date forward. As 

in Jackson, we believe that the Commissioner adopted an 

"interpretative rule" for the purpose of fulfilling the 

Department's responsibility to administer the statute. 

 IV. 

 Although we find that the Commissioner did not adopt a "de

facto" rule when he approved the new interpretative guidelines, 

we do find that the policy guidelines are inconsistent with the 

statute. See Jackson, 14 Va. App. at 400, 419 S.E.2d at 390. 

 The General Assembly used discretionary language in drafting 

Code § 46.2-1575. The statutory language evinces a recognition 

on the part of the General Assembly that, in some cases, license 

revocation may not be an appropriate remedy. Indeed, the General 

Assembly specified eighteen separate grounds that "may" give rise 
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to adverse action. The Department and Woods agree that the 

statute granted the Department the discretion to suspend or 

revoke a license to sell motor vehicles where the licensee has 

been convicted of a felony. 

 When the Department established its mandatory revocation 

policy, however, it foreclosed any opportunity for a licensee who 

was affected by the policy to appeal to the discretionary 

authority of the Commissioner. Although the statute authorizes 

the use of discretion, the current policy guidelines allow no 

discretion to be exercised in determining whether a felony 

conviction will result in revocation or suspension of a license. 

 The policy guidelines direct that a revocation or suspension 

must be imposed following a felony conviction. Clearly, the 

decision to revoke Woods' license did not result from the 

exercise of discretion; it was a mandatory act taken in 

accordance with an internal policy which directly contradicted 

the intent of the General Assembly when it enacted the statute. 

 In granting the Department the discretion to revoke 

licenses, the General Assembly intended for the Department to 

determine, on a case-by-case basis, whether revocation properly 

serves the interests of the public. In those cases in which 

revocation would not serve the interests of the public and would 

work an injustice, the General Assembly intended for the 

Department to exercise its discretion in applying the statute. 

Under the mandatory revocation policy, however, the Department 
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fails to exercise its discretion and revokes licenses in all 

cases involving felony convictions, without considering the best 

interests of the public or the purpose of the statute. We note 

that the policy guidelines do not provide such a mandatory 

feature for any of the other seventeen grounds specified in Code 

§ 46.2-1575. 

 The record of the informal fact finding conference, the 

recommendation of the hearing officer, and the final agency 

decision all reference "the [Department's] policy" to suspend or 

revoke the license of anyone convicted of a felony without 

exception or consideration of other circumstances. We hold that 

the Department's policy guidelines are inconsistent with the 

statute because they remove from the Department's review of 

licensees the discretion granted by statute. 

 Accordingly, we reverse the decision and remand the case for 

reconsideration in accordance with the discretionary standard 

enacted within Code § 46.2-1575. 

 Reversed and remanded.