Opinion ID: 1934703
Heading Depth: 1
Heading Rank: 4

Heading: Contrary to the Majority Opinion, the Board Proceedings Were Subject to the Administrative Procedure Act.

Text: The Board does not deny these allegations of administrative unfairness. It defends its conduct of the proceedings, however, on the startling theory that a minimum wage determination is not a contested case and consequently the Board was free to deprive petitioners of the fundamental safeguards provided by § 1-1509 against arbitrary agency action. What is even more startling is the acceptance of this proposition in the majority opiniona view which flies in the face of a holding of this court on the precise issue, Allentuck v. District of Columbia Minimum Wage and Industrial Safety Board, D.C. App., 261 A.2d 826, 832 (1969). The rationale of the majority is that there is a distinction between adjudication and rule-making, termed a legislative or quasi-legislative function of an administrative body. In support of this thesis, the opinion quotes at length from an elementary hornbook on administrative law, a decision [6] of the United States Court of Appeals for this circuit made prior to the enactment of the local Administrative Procedure Act, and a citation to another circuit decision affirming an order of the Civil Aeronautics Board. [7] I am quite aware of the difference between rule-making and adjudication, but what the majority overlooks is that the kind of rule-making involved in a minimum wage determination has been specifically held by both our circuit court and this court to require the procedural safeguards prescribed for adjudicatory proceedings, Wirtz v. Baldor Electric Company, 119 U.S.App.D.C. 122, 125, 337 F.2d 518, 521 n. 4 (1964), and Allentuck, supra 261 A.2d at 832. In the latter case, we said: For rule-making proceedings, both the Administrative Procedure Act and the District of Columbia Administrative Procedure Act, effective October 21, 1969, require that findings of fact and conclusions of law adhere to the standards applicable to the agency adjudicatory process. We apply these standards to the Wage Board's findings and conclusions in these cases. We think all interested parties are entitled to know, and this court on review must know, the basis and reasons for the Wage Board's action. (Footnotes omitted.) In making this observation, we referred specifically to § 1-1509(c). [8] As none of the provisions in § 1-1509 is applicable except in contested cases, this was obviously a holding that a minimum wage proceeding fell within this category. Hence petitioners' assumption that the Board was engaged in the conduct of a contested case is supported by a considered holding of this court with respect to that very agency. Although the majority opinion does not purport to overrule Allentuck, it is plain that it does so, because it rejects the Allentuck thesis that § 1-1509, being applicable to minimum wage proceedings, requires that findings of fact by the Board be supported by . . . reliable, probative, and substantial evidence. How such findings can possibly be made in the absence of an evidentiary hearing escapes me. [9] The majority opinion also relies upon certain procedural provisions of the Minimum Wage Act itself, particularly § 36-407, to bolster its conclusion that the Act did not contemplate a full evidentiary hearing with the right of cross-examination. Conceivably this might have been the situation prior to the subsequent enactment of the local Administrative Procedure Act. But as we have consistently held until today, agency procedures which do not comply with the APA have been superseded. Wallace v. District Unemployment Compensation Board, D.C.App., 289 A.2d 885 (1972); Woodridge Nursery School v. Jessup, D.C.App., 269 A.2d 199 (1970). Thus, the test of whether a particular proceeding before an administrative agency is a contested case depends upon the wording of the APA, not the organic act creating the agency. Moreover, the narrow construction placed on the Administrative Procedure Act by the majority cannot be reconciled with our decision in Capital Hill Restoration Soc. v. Zoning Commission, D.C.App., 287 A.2d 101 (1972), which petitioners did cite. There, we rejected the notion that the term contested case was always synonymous with adjudication quoting the Commissioners on Uniform State Laws to the effect that . . . under the Model Act it is desired to apply the contested case procedures to rate-making. (287 A.2d 101, 104). We went on to hold that if the statute or regulation authorizing rule-making requires the agency after hearing to make certain findings of fact as a condition precedent to its ultimate determination, such proceedings fall within the definition of a contested case in contradistinction to a legislative action predicated not on evidentiary findings but considerations of broad policy. [10] Obviously the determination of a minimum hourly wage rate is a form of rate-making and mustunder the Minimum Wage Actbe guided by preliminary findings of fact with respect to the three criteria which the majority opinion concedes are spelled out in § 36-406(e) of that statute. The wording of Section 1509(b) of the APA on which petitioners rely makes it crystal clear that this section of the Code applies to rule-making  (b) In contested cases . . . the proponent of a rule or order shall have the burden of proof. . . . (Italics supplied.) In this particular determination, failure of the Board to accord their statutory procedural rights to opponents of the proposed rulea 40% increase in the minimum rate  was no mere technicality falling under the head of harmless error. The inflationary nature of the order [11] was largely due to a finding with respect to the rate of wages necessary to provide adequate maintenance and to protect health based solely on a documentary exhibit (No. 61) called a Cost of Living Budget for an Employed Person Living Alonea survey apparently prepared by the Board itself. No oral testimony was received to show the basic sources of the underlying information. Thus, any opportunity for cross-examination was foreclosed. In Wirtz v. Baldor Electric Company, supra , where the Secretary of Labor based a finding on a statistical exhibit without disclosing the sources of the figures or the raw data on which the table was compiled, the reviewing court set aside the wage determination because such procedure prevented the other side from calling and cross-examining the suppliers of the basic information. The court held that parties in a minimum wage hearing have a statutory right to conduct such cross-examination as may be required for a full and true disclosure of the facts. [12] While the quoted language was taken from Section 7(c) of the Federal Administrative Procedure Act, these very words are also used in § 1-1509(b). Moreover, the Board's omission in its public notice of hearing of its intention to place new and amended definitions and regulations in its revised Wage Order No. 10 made its final order fatally defective under § 1-1505(a), as petitioners were never given an opportunity to address themselves, let alone rebut, the propriety of such revisions.