Title: Allstars Auto Group, Inc. v. New Jersey Motor Vehicle Commission
Citation: N/A
Docket Number: 
State: new-jersey
Issuer: new-jersey Supreme Court
Date: July 18, 2018

Allstars Auto Group, Inc. v. New Jersey Motor Vehicle Commission Annotate this Case Justia Opinion Summary In this case, the issue presented for the New Jersey Supreme Court's review was whether the New Jersey Motor Vehicle Commission (Commission) appropriately issued fines and suspensions without holding hearings. The Commission sent notices of proposed suspension to the dealers. The notice also informed the dealers of their right to request a hearing. Each dealer acted pro se and requested a hearing in writing. Each provided explanations for the alleged violations but did not deny the allegations. The Commission denied the requests for hearings and issued an order of suspension/final administrative decision letter to each dealer. The Commission ruled that each dealer had “failed to identify any disputed material fact(s), legal issue(s) and/or specific mitigating circumstances to be resolved at a hearing,” and interpreted the dealers’ responses as admissions. The Appellate Division panel consolidated the appeals and affirmed the Commission’s imposition of suspensions and fines, determining that the Commission could decide cases “without a trial-type hearing when there are no disputed adjudicative facts.” The panel found that the fines challenged by the dealers were authorized by N.J.S.A. 39:10-20, and the Commission could impose fines under the statute on a case-by-case basis. The New Jersey Supreme Court found that if the reasons given by the dealers presented a colorable dispute of facts or at least the presence of mitigating evidence, the Commission was required to provide an in-person hearing pursuant to N.J.S.A. 39:10-20. "An in-person hearing must be held prior to a license suspension or revocation when the target of the enforcement action requests it." Read more Want to stay in the know about new opinions from the Supreme Court of New Jersey? Sign up for free summaries delivered directly to your inbox. Learn More › You already receive new opinion summaries from Supreme Court of New Jersey. Did you know we offer summary newsletters for even more practice areas and jurisdictions? Explore them here . SYLLABUSThis syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Court. In the interest of brevity, portions of an opinion may not have been summarized.) Allstars Auto Group, Inc. v. New Jersey Motor Vehicle Commission (A-72/73/74/75/76/77/78/79-16) (078991)Argued January 30, 2018 -- Decided July 18, 2018FERNANDEZ-VINA, J., writing for the Court. In this case, the Court is tasked with determining whether the New Jersey Motor Vehicle Commission (Commission) appropriately issued fines and suspensions without holding hearings. Each of the plaintiff dealers operates out of a separate office in the same building in Bridgeton. The dealerships are separately owned and the offices are sparse. Commission inspectors conducted audits of the offices pursuant to N.J.A.C. 13:21-15.13 on August 18 and 19, 2014. Inspectors alleged violations of various Commission regulations. The dealers were each charged with violating three provisions except Amiri Mbubu Auto Sales, LLC (Mbubu), which was charged with five violations. The Commission sent notices of proposed suspension to the dealers. It proposed a ten-day license suspension for all dealers except Mbubu. The Commission proposed a twenty-day suspension of Mbubu’s license because of its greater number of violations. The notice informed the dealers that the Commission would also impose fines of $500 for each violation -- a $1500 civil penalty for each dealer except Mbubu and a $2500 penalty for Mbubu. The dealers would be required to pay a $200 license restoration fee. The notice also informed the dealers of their right to request a hearing. Each dealer acted pro se and requested a hearing in writing. Each provided explanations for the alleged violations but did not deny the allegations. The Commission denied the requests for hearings and issued an order of suspension/final administrative decision letter to each dealer. The Commission ruled that each dealer had “failed to identify any disputed material fact(s), legal issue(s) and/or specific mitigating circumstances to be resolved at a hearing,” and interpreted the dealers’ responses as admissions. The dealers hired one attorney to represent all of them. Counsel submitted a hearing request to the Commission on behalf of each dealer, arguing that there was a lack of factual support for the allegations and disputing each allegation. The Commission denied the second request for hearing for all dealers. The dealers moved for reconsideration, and the Commission denied the motion. The dealers separately appealed the Commission’s final orders to the Appellate Division. 1 The Appellate Division panel consolidated the appeals and affirmed the Commission’s imposition of suspensions and fines in an unpublished opinion. The panel determined that the Commission may decide cases “without a trial-type hearing when there are no disputed adjudicative facts.” The panel found that the fines challenged by the dealers were authorized by N.J.S.A. 39:10-20, and the Commission could impose fines under the statute on a case-by-case basis. The dealers petitioned for certification, which the Court granted. 230 N.J. 472, 480- 83 (2017).HELD: If the reasons given by the dealers present a colorable dispute of facts or at least the presence of mitigating evidence, the Commission is required to provide an in-person hearing pursuant to N.J.S.A. 39:10-20. An in-person hearing must be held prior to a license suspension or revocation when the target of the enforcement action requests it. Accordingly, the Court reverses the judgment of the Appellate Division and remands.1. The Administrative Procedure Act (APA), N.J.S.A. 52:14B-1 to -31, provides a road map for navigating administrative proceedings but -- with one exception not applicable here -- does not create a substantive right to an administrative hearing. Thus, the right to an administrative hearing generally must be found outside the APA. (p. 12)2. When it enacted the Motor Vehicle Security and Customer Service Act, the Legislature established the Commission as an independent entity within the Department of Transportation. The Legislature simultaneously enacted the Motor Vehicle Certificate of Ownership Law (MVCOL), N.J.S.A. 39:10-1 to -38, “to regulate and control titles to, and possession of, all motor vehicles in [New Jersey].” N.J.S.A. 39:10-3. The Commission is entrusted with enforcing the MVCOL, and “may make rules and regulations necessary in its judgment for the administration and enforcement thereof.” N.J.S.A. 39:10-4. To facilitate the Commission’s exercise of its duties, the Legislature expressly authorized it to suspend or revoke dealer licenses, but required the opportunity for a hearing. N.J.S.A. 39:10-20. The MVCOL also specifies that a post-hearing suspension may be imposed for any violation of the MVCOL itself or of the regulations adopted to implement the MVCOL. Ibid. (pp. 12-14)3. A dealer may “request a hearing concerning . . . proposed disciplinary action.” N.J.A.C. 13:21-15.14(b). “The hearing request must be in writing, must list all contested issues of material fact, issues of law, and mitigating circumstances that the applicant or licensee intends to demonstrate.” N.J.A.C. 13:21-15.14(c). If a hearing request is made, the regulation provides for two possible outcomes. N.J.A.C. 13:21-15.14(f) provides that, “[i]f there are no material facts in dispute or specific mitigating circumstances subject to proof . . . , the Chief Administrator shall issue a Final Administrative Determination.” On the other hand, “[i]f the Chief Administrator finds that there exist issues of material fact or potentially mitigating circumstances, the matter will be referred for a hearing.” N.J.A.C. 13:21-15.14(d). The decision to grant or deny a requested hearing hinges on the presence or absence of “issues of material fact or potentially mitigating circumstances.” (pp. 14-15) 2 4. If “issues of material fact or potentially mitigating circumstances are present,” a hearing must be held pursuant to N.J.A.C. 13:21-15.14(d). That hearing may be conducted by the Commission itself or referred to the Office of Administrative Law (OAL) for consideration by an Administrative Law Judge as a contested case pursuant to N.J.S.A. 52:14B-2 and -9. It is for the agency head to decide initially whether to refer the matter to the OAL. (pp. 15-17)5. The plain language of N.J.S.A. 39:10-20 -- which provides that licenses may be suspended “after hearing” and specifies that “[t]he chief administrator shall, before suspending or revoking a license, and at least 10 days prior to the date set for the hearing, notify the holder of the license, in writing, of any charges made, and shall afford him an opportunity to be heard in person or by counsel” (emphases added) -- mandates a hearing here. Although the regulations provide that the Commission may issue a final decision without a hearing when “no material facts” are in dispute and no “specific mitigating circumstances” are alleged, N.J.A.C. 13:21- 15.14(f), that provision did not authorize the Commission to forego a hearing in these circumstances. Each of the dealers requested a hearing, and each request provided facts that the dealers intended to argue would constitute defenses to the alleged violations or would at least mitigate their severity. The Commission must provide an in-person hearing to the dealers before suspending their licenses, so that any disputed facts or questions of law may be resolved, and any mitigating circumstances presented. The Court does not, however, determine whether the Commission must conduct the hearing itself or refer the matter to the OAL. The decision of whether to make that referral resides with the Commission. (pp. 17-19)6. As to the dealers’ contention that the agency lacks the authority to impose fines for violations of its regulations, the Legislature amended the MVCOL to allow the Commission to impose fines in 2007. N.J.S.A. 39:10-20 provides that “[t]he chief administrator may impose a fine not to exceed $500 for a first offense and $1,000 for any subsequent offense upon the holder of a license for a violation of any provision of [Chapter 10 of Title 39].” The Court finds that N.J.S.A. 39:10-20 explicitly authorizes the Commission to impose such fines and that no promulgation of a fine schedule for each regulation is necessary. (pp. 19-20) REVERSED.CHIEF JUSTICE RABNER and JUSTICES LaVECCHIA, ALBIN, PATTERSON, SOLOMON, and TIMPONE join in JUSTICE FERNANDEZ-VINA’s opinion. 3 SUPREME COURT OF NEW JERSEY A-72/73/74/75/76/77/78/79 September Term 2016 078991ALLSTARS AUTO GROUP, INC., Appellant, v.NEW JERSEY MOTOR VEHICLE COMMISSION, Respondent.INDEPENDENCE AUTO SALES, LLC, Appellant, v.NEW JERSEY MOTOR VEHICLE COMMISSION, Respondent.AUTOMOTIVE SOLUTION CORP., Appellant, v.NEW JERSEY MOTOR VEHICLE COMMISSION, Respondent. 1 EMPIRE AUTO FINANCE, INC., Appellant, v.NEW JERSEY MOTOR VEHICLE COMMISSION, Respondent.JMC AUTO SALES, LLC, Appellant, v.NEW JERSEY MOTOR VEHICLE COMMISSION, Respondent.OLD VINE AUTO DEALER, LLC, Appellant, v.NEW JERSEY MOTOR VEHICLE COMMISSION, Respondent.AMIR USED CAR, INC., Appellant, v.NEW JERSEY MOTOR VEHICLE COMMISSION, Respondent. 2 AMIRI MBUBU AUTO SALES, LLC, Appellant, v.NEW JERSEY MOTOR VEHICLE COMMISSION, Respondent. Argued January 30, 2018 – Decided July 18, 2018 On certification to the Superior Court, Appellate Division. Thomas G. Russomano argued the cause for appellants (Schiller Pittenger & Galvin, attorneys; Thomas G. Russomano and Jay B. Bohn, on the brief). Melissa Dutton Schaffer, Assistant Attorney General, argued the cause for respondent (Gurbir S. Grewal, Attorney General, attorney; Melissa H. Raksa, Assistant Attorney General, of counsel and on the brief, and Nonee Lee Wagner, Deputy Attorney General, on the brief). JUSTICE FERNANDEZ-VINA delivered the opinion of the Court. In this case, the Court is tasked with determining whetherthe New Jersey Motor Vehicle Commission (Commission)appropriately issued fines and suspensions without holdinghearings. Commission auditors discovered alleged violations atvarious motor vehicle dealerships (collectively, dealers). Thedealers are: 3 Allstars Auto Group, Inc. (Allstars); Amir Used Car, Inc. (Amir); Amiri Mbubu Auto Sales, LLC (Mbubu); Automotive Solution Corp. (Automotive); Empire Auto Finance, Inc. (Empire); Independence Auto Sales, LLC (Independence); JMC Auto Sales, LLC (JMC); and Old Vine Auto Dealer, LLC (Old Vine).The dealers requested hearings after receiving notices ofproposed action from the Commission. The Commission denied therequests, determining that the dealers failed to raisesufficient disputes of adjudicative facts or issues of law, andrendered a final decision imposing its proposed fines andsuspensions. The Appellate Division affirmed, agreeing that there wereno adjudicative facts in dispute, and holding that there was noabsolute right to a hearing before a license suspension. We disagree and find that, if the reasons given by thedealers present a colorable dispute of facts or at least thepresence of mitigating evidence, the Commission is required toprovide an in-person hearing pursuant to N.J.S.A. 39:10-20. Anin-person hearing must be held prior to a license suspension orrevocation when the target of the enforcement action requestsit. Accordingly, we reverse the judgment of the AppellateDivision and remand. 4 I. Because this appeal arises from a final agencydetermination denying a hearing, the facts below are gatheredfrom the submissions of the parties. Each of the dealers operates out of a separate office inthe same building in Bridgeton. The dealerships are separatelyowned and the offices are sparse. Commission inspectorsconducted audits of the offices pursuant to N.J.A.C. 13:21-15.13on August 18 and 19, 2014. Inspectors alleged violations ofvarious Commission regulations, including failing to keepcertain business records on the premises, N.J.A.C. 13:21-15.4(g), failing to completely fill out required forms forreassignments, N.J.A.C. 13:21-15.7(b)(1), failing to account forreassignments, N.J.A.C. 13:21-15.7(b)(2), failing to account fordealer plates, N.J.A.C. 13:21-15.11(a) (2014),1 failing toproduce a logbook or ledger for dealer plates, N.J.A.C. 13:21-15.11(a)(2) (2014), failing to maintain a landline phone,N.J.A.C. 13:21-15.4(h), issuing a temporary tag without a bonafide sale or lease of a vehicle, N.J.A.C. 13:21-15.9(a), failingto obtain proof of insurance before issuing a temporary tag,N.J.A.C. 13:21-15.9(d) (2014), issuing a nonresident temporary1 Several relevant administrative provisions have since been amended, changing, for example, section (a) to section (g). We provide the year for clarity when necessary. 5 tag without a bona fide sale or lease of a vehicle, N.J.A.C.13:21-15.10(a), failing to obtain proof of insurance beforeissuing a nonresident temporary tag, N.J.A.C. 13:21-15.10(e),and failing to display a dealership license, N.J.A.C. 13:21-15.4. The inspectors did not allege each dealer violated everyregulation; the dealers were each charged with violating threeprovisions except Mbubu, which was charged with five violations. The Commission sent notices of proposed suspension to thedealers. It proposed a ten-day license suspension for alldealers except Mbubu. The Commission proposed a twenty-daysuspension of Mbubu’s license because of its greater number ofviolations. The notice informed the dealers that the Commissionwould also impose fines of $500 for each violation -- a $1500civil penalty for each dealer except Mbubu and a $2500 penaltyfor Mbubu. The dealers would be required to pay a $200 licenserestoration fee. The notice also informed the dealers of their right torequest a hearing. Each dealer acted pro se and requested ahearing in writing. Each provided explanations for the allegedviolations but did not deny the allegations. For example, onedealer alleged the records were temporarily with his accountant,while another claimed to have had the records on his person whentraveling to and from an auction. 6 The Commission denied the requests for hearings and issuedan order of suspension/final administrative decision letter toeach dealer. The Commission ruled that each dealer had “failedto identify any disputed material fact(s), legal issue(s) and/orspecific mitigating circumstances to be resolved at a hearing,”and interpreted the dealers’ responses as admissions. Theorders imposed the proposed penalties and informed each dealerwhen their suspensions would begin and end. The orders alsoinformed the dealers that the orders reflected the “FinalDecision of the Chairman and Chief Administrator of the MotorVehicle Commission,” and that any appeal must be made to theAppellate Division of the Superior Court. The dealers hired one attorney to represent all of them.Counsel submitted a hearing request to the Commission on behalfof each dealer, arguing that there was a lack of factual supportfor the allegations and disputing each allegation. The letterclaimed that the relevant records were, in fact, maintained onthe premises of each dealer but provided no explanation as towhy they were unavailable during the audits. One dealersubmitted an amended response to the notice of proposedsuspension and argued that the Commission lacked statutoryauthority to suspend or revoke a dealer’s license without ahearing. 7 The Commission denied the second request for hearing forall dealers. The Chairman and Chief Administrator sent a letterto each dealer explaining that the Commission considered theprevious communications from the dealers to be admissions of theviolations and that counsel’s new letters did not create asufficient dispute of fact or law to entitle the dealers to ahearing. The Chairman’s letter informed the dealers of theirright to appeal. The dealers moved for reconsideration of the denial of ahearing. The Commission denied the motion, concluding that thedealers had failed to demonstrate a probability of success onthe merits. The dealers separately appealed the Commission’sfinal orders to the Appellate Division. The Appellate Division panel consolidated the appeals andaffirmed the Commission’s imposition of suspensions and fines inan unpublished opinion. The panel determined that theCommission may decide cases “without a trial-type hearing whenthere are no disputed adjudicative facts.” Considering thedealers’ concessions in their initial responses to theCommission, the panel found that the violations were supportedby substantial credible evidence in the record. The AppellateDivision also determined that the facts in the letter submittedby counsel lacked any support in the record and did not explainthe prior statements by the dealers. The panel found that the 8 fines challenged by the dealers were authorized by N.J.S.A.39:10-20, and the Commission could impose fines under thestatute on a case-by-case basis. The dealers then petitioned this Court for certification,which we granted. 230 N.J. 472, 480-83 (2017). II. A. The dealers argue that the imposition of fines andsuspensions without a hearing was procedurally improper. Thedealers assert that they were entitled to a hearing before theimposition of a license suspension, pursuant to N.J.S.A. 39:10-20. They posit that the authority to determine whether a matteris a contested case allows the agency head to determine whetherthe agency will hear the case or refer it to the Office ofAdministrative Law (OAL), not whether to grant a hearing at all. According to the dealers, the Commission lacks thestatutory authority to impose the fines at issue. They claimN.J.S.A. 39:10-20 allows the Commission to impose fines only forstatutory violations, not for the violation of Commissionregulations. The dealers assert the same reasoning applies tothe imposition of the license restoration fee, and theCommission must enact a regulation to impose the fines and fees. B. 9 The Commission asserts that the dealers were entitled onlyto a “reasonable opportunity to be heard,” and they wereafforded that opportunity. It argues that an in-person hearingis not required. When no material facts are in dispute, theCommission continues, no contested case hearing is necessary.The Commission contends it offered the dealers the opportunityto be heard through their hearing requests, and their admissionsrendered an in-person hearing unnecessary. Addressing the issue of the fines and fees, the Commissionargues that N.J.S.A. 39:10-20 authorizes it to impose a fine ofup to $500 for first-time violations by a licensee. It assertsthat it abided by the statute in fining the dealers $1500 eachfor three violations and fining Mbubu $2500 for five violations.The Commission contends that its regulations allow it to suspendlicenses for rule violations and that all violations weresupported by substantial, credible evidence -- the dealers’admissions. III. Judicial review of agency determinations is limited. Russov. Bd. of Trs., PFRS, 206 N.J. 14, 27 (2011) (citing In reHerrmann, 192 N.J. 19, 27 (2007)). “An administrative agency’sfinal quasi-judicial decision will be sustained unless there isa clear showing that it is arbitrary, capricious, orunreasonable, or that it lacks fair support in the record.” 10 Ibid. (quoting Herrmann, 192 N.J. at 27-28). On appellatereview, the court examines: (1) whether the agency’s action violates express or implied legislative policies, that is, did the agency follow the law; (2) whether the record contains substantial evidence to support the findings on which the agency based its action; and (3) whether in applying the legislative policies to the facts, the agency clearly erred in reaching a conclusion that could not reasonably have been made on a showing of the relevant factors. [In re Stallworth, 208 N.J. 182, 194 (2011) (quoting In re Carter, 191 N.J. 474, 482 (2007)).] A reviewing court “must be mindful of, and deferential to,the agency’s 'expertise and superior knowledge of a particularfield.’” Circus Liquors, Inc. v. Governing Body of MiddletownTwp., 199 N.J. 1, 10 (2009) (quoting Greenwood v. State PoliceTraining Ctr., 127 N.J. 500, 513 (1992)). Moreover, “[a]reviewing court 'may not substitute its own judgment for theagency’s, even though the court might have reached a differentresult.’” Stallworth, 208 N.J. at 194 (quoting Carter, 191 N.J.at 483). However, a reviewing court is “in no way bound by [an]agency’s interpretation of a statute or its determination of astrictly legal issue.” Dep’t of Children & Families, DYFS v.T.B., 207 N.J. 294, 302 (2011) (alteration in original) (quoting 11 Mayflower Sec. Co. v. Bureau of Sec., Div. of Consumer Affairs,64 N.J. 85, 93 (1973)). IV. A. The Administrative Procedure Act (APA), N.J.S.A. 52:14B-1to -31, “provides a road map for navigating administrativeproceedings” but -- with one exception not applicable here --“does not create a substantive right to an administrativehearing.” In re Fanelli, 174 N.J. 165, 172 (2002) (citingValdes v. State Bd. of Med. Exam’rs, 205 N.J. Super. 398, 404(App. Div. 1985)). Thus, “[t]he right to an administrativehearing generally must be found outside the APA in anotherstatute or constitutional provision.” Ibid. (quoting ChristHosp. v. Dep’t of Health & Senior Servs., 330 N.J. Super. 55, 61(App. Div. 2000)). As a threshold matter, therefore, we look tothe Motor Vehicle Commission’s enabling act to determine whetherit creates a right to a hearing to challenge the MVC actions atissue in this case. When it enacted the Motor Vehicle Security and CustomerService Act, L. 2003, c. 13, the Legislature established theCommission as an independent entity within the Department ofTransportation. See N.J.S.A. 39:2A-2, -4. The Legislaturetasked the administrator and deputy administrator of theCommission with various duties including “the improvement of the 12 safety and security of the State’s motor vehicle licensing,registration, titling and inspection system.” N.J.S.A. 39:2A-29. The Legislature simultaneously enacted the Motor VehicleCertificate of Ownership Law (MVCOL), N.J.S.A. 39:10-1 to -38,“to regulate and control titles to, and possession of, all motorvehicles in this state, so as to prevent the sale, purchase,disposal, possession, use or operation of stolen motor vehicles,or motor vehicles with fraudulent titles, within this state.”N.J.S.A. 39:10-3. The Commission is entrusted with enforcingthe MVCOL, and “may make rules and regulations necessary in itsjudgment for the administration and enforcement thereof” thatsupplement, but do not conflict with, the MVCOL’s provisions.N.J.S.A. 39:10-4. To facilitate the Commission’s exercise of its duties, theLegislature expressly authorized it to suspend or revoke dealerlicenses, but required the opportunity for a hearing: “[t]hechief administrator shall, before suspending or revoking thelicense, and at least 10 days prior to the date set for thehearing, notify the holder of the license, in writing, of anycharges made, and shall afford him an opportunity to be heard inperson or by counsel.” N.J.S.A. 39:10-20 (emphasis added). TheMVCOL also specifies that a post-hearing suspension may beimposed for any violation of the MVCOL itself or of theregulations adopted to implement the MVCOL. Ibid. (“The chief 13 administrator may suspend for a period less than the unexpiredterm of a license or revoke a license, after hearing, for aviolation of any provision of this chapter, or for a violationof the rules and regulations promulgated pursuant thereto. . . .” (emphasis added)). Commission regulations provide specific guidance regardinghearings. N.J.A.C. 13:21-15.14(a) provides that, unlesscircumstances not relevant here are present, “the ChiefAdministrator will send a Notice of Proposed DisciplinaryAction” to a dealer “prior to revoking, suspending, declining torenew or denying a motor vehicle dealer’s license.” (emphasisadded). A dealer may then “request a hearing concerning theproposed disciplinary action” within twenty-five days. N.J.A.C.13:21-15.14(b). “The hearing request must be in writing, mustlist all contested issues of material fact, issues of law, andmitigating circumstances that the applicant or licensee intendsto demonstrate.” N.J.A.C. 13:21-15.14(c). If a hearing request is made, the regulation provides fortwo possible outcomes. N.J.A.C. 13:21-15.14(f) provides that,“[i]f there are no material facts in dispute or specificmitigating circumstances subject to proof or if the licenseedoes not respond to the Notice of Proposed Disciplinary Actionwithin 25 days from the date of the notice, the ChiefAdministrator shall issue a Final Administrative Determination” 14 that can be appealed to the Superior Court, Appellate Division.On the other hand, “[i]f the Chief Administrator finds thatthere exist issues of material fact or potentially mitigatingcircumstances, the matter will be referred for a hearing” thatmust accord with the APA and the Uniform AdministrativeProcedure Rules. N.J.A.C. 13:21-15.14(d). Based on the foregoing, the decision to grant or deny arequested hearing hinges on the presence or absence of “issuesof material fact or potentially mitigating circumstances.” A“material fact” is “[a] fact that is significant or essential tothe issue or matter at hand.” Black’s Law Dictionary 670 (9thed. 2009). A “mitigating circumstance” is “[a] fact orsituation that does not justify or excuse a wrongful act oroffense but that reduces the degree of culpability and thus mayreduce” the severity of the sanction imposed for a regulatoryviolation. See id. at 277. If “issues of material fact or potentially mitigatingcircumstances are present,” a hearing must be held pursuant toN.J.A.C. 13:21-15.14(d). That hearing may be conducted by theCommission itself or referred to the OAL for consideration by anAdministrative Law Judge as a contested case pursuant toN.J.S.A. 52:14B-2 and -9. See generally In re Appeal of CertainSections of Unif. Admin. Procedure Rules, 90 N.J. 85, 91 (1982) 15 (discussing at length the interaction between and respectiveresponsibilities of agencies and the OAL). Agencies can refer contested cases to the OAL.“Administrative adjudication continues to be the agency’sresponsibility, although it is still usually effectuated througha bifurcated process in which the hearing and decisional phasesare handled separately.” Ibid. According to the Office ofAdministrative Law Act, “the head of any agency” has “theauthority . . . to determine whether a case is contested or toadopt, reject or modify the findings of fact and conclusions oflaw of any administrative law judge [(ALJ)].” N.J.S.A. 52:14F-7. The agency head thus “has the power to make the criticaldecision whether to refer a matter to an ALJ, as well as thepower to make the final decision on the merits.” In reCarberry, 114 N.J. 574, 584-85 (1989). “The point remains,however, that it is for the agency head to decide initiallywhether to refer the matter to the OAL.” Id. at 585. Thus, thedecision whether to refer the case to an ALJ initially beforefinally deciding the case remains with the agency head, butother statutory and regulatory provisions control when an in-person hearing must be held. “The right to decide contested cases is an integral part ofthe administrative process.” Ibid. “Administrative agenciescarry out their regulatory responsibilities not only through 16 rulemaking or informal administrative action, but also throughadjudication of contested cases.” Ibid. (citations omitted).“Thus, the agency’s decisional authority over contested cases isdirectly and integrally related to its regulatory function.”Ibid. (quoting In re Unif. Admin. Procedural Rules, 90 N.J. at 93-94). B. We now apply those principles as well as the plain languageof the statute to the facts of this case. We find that theplain language of N.J.S.A. 39:10-20 -- which provides thatlicenses may be suspended “after hearing” and specifies that“[t]he chief administrator shall, before suspending or revokinga license, and at least 10 days prior to the date set for thehearing, notify the holder of the license, in writing, of anycharges made, and shall afford him an opportunity to be heard inperson or by counsel” (emphases added) -- mandates a hearinghere. We therefore find that the Commission’s action in thiscase “violates express or implied legislative policies,” In reStallworth, 208 N.J. at 194 (quoting Carter, 191 N.J. at 482),and was “arbitrary, capricious, or unreasonable,” Russo, 206 N.J. at 27. The Commission points to its regulations governing hearingsto support its decision to proceed without a hearing. Althoughthe regulations provide that the Commission may issue a final 17 decision without a hearing when “no material facts” are indispute and no “specific mitigating circumstances” are alleged,N.J.A.C. 13:21-15.14(f), we find that provision did notauthorize the Commission to forego a hearing in thesecircumstances. Each of the dealers requested a hearing, and each requestprovided facts that the dealers intended to argue wouldconstitute defenses to the alleged violations or would at leastmitigate their severity. The pro se filings by the dealers wereperhaps inarticulate in emphasizing disputed facts or law, butthey clearly requested a hearing to contest the Commissionaction or present evidence of mitigating circumstances.Counsel’s letters, although sent after the Commission’ssubmissions deadline, remove any doubt regarding the dealers’intent to challenge the imposition of fines and suspensions.Those letters deny each alleged violation. We hold that the Commission must provide an in-personhearing to the dealers before suspending their licenses, so thatany disputed facts or questions of law may be resolved, and anymitigating circumstances presented.2 We do not, however,determine whether the Commission must conduct the hearing itself2 It bears noting that the burden of proving the charges is on the Commission and there are no verified facts in this record as far as we can discern. 18 or refer the matter to the OAL. Although these consolidatedmatters require determination of “the legal rights, duties,obligations, privileges, benefits or other legal relations” ofthe dealers, and thus meet the definition of a “contested case”that may be referred to the OAL, see N.J.S.A. 52:14B-2, thedecision of whether to make that referral resides with theCommission, see In re Carberry, 114 N.J. at 585. We note that,at a minimum, in-person hearings typically consist of theopportunity to present evidence and cross-examine witnesses, seeN.J.S.A. 52:14B-9 (providing in contested cases that “allparties shall be afforded an opportunity . . . to respond,appear and present evidence and argument on all issuesinvolved”), and must satisfy the requirements of due process, Inre Request for Solid Waste Util. Customer Lists, 106 N.J. 508,519 (1987). Because we find that the Commission could not impose theproposed sanctions without a hearing, we address only brieflythe dealers’ contention that the agency lacks the authority toimpose fines for violations of its regulations. The Legislatureamended the MVCOL to allow the Commission to impose fines in2007; N.J.S.A. 39:10-20 provides that “[t]he chief administratormay impose a fine not to exceed $500 for a first offense and$1,000 for any subsequent offense upon the holder of a licensefor a violation of any provision of [Chapter 10 of Title 39].” 19 We find that N.J.S.A. 39:10-20 explicitly authorizes theCommission to impose such fines and that no promulgation of afine schedule for each regulation is necessary. V. The judgment of the Appellate Division is reversed and thematter is remanded for further proceedings consistent with thisopinion. CHIEF JUSTICE RABNER and JUSTICES LaVECCHIA, ALBIN, PATTERSON, SOLOMON, and TIMPONE join in JUSTICE FERNANDEZ-VINA’s opinion. 20