Opinion ID: 1156663
Heading Depth: 5
Heading Rank: 3

Heading: Guiding principles: substantive and procedural limitations on the remedial power of administrative agencies

Text: Although many of these decisions  including Investors, supra, 312 A.2d 225  were discussed in the brief of amicus curiae for defendant, plaintiff has neglected to address them. We conclude, however, that the veritable tidal wave of decisions against plaintiff's view cannot be ignored, and that our sister states' decisions on this issue suggest a workable solution to the constitutional problem posed here. The better analyzed and more thoughtful decisions, as we read them, set out the following guidelines: An administrative agency may constitutionally hold hearings, determine facts, apply the law to those facts, and order relief  including certain types of monetary relief  so long as (i) such activities are authorized by statute or legislation and are reasonably necessary to effectuate the administrative agency's primary, legitimate regulatory purposes, and (ii) the essential judicial power (i.e., the power to make enforceable, binding judgments) remains ultimately in the courts, through review of agency determinations. As noted above, the procedural aspect of this test ( ante at p. 361) is entirely consistent with (and indeed, dictated by) established California law concerning administrative revocation of professional licenses ( ante at p. 361). We review below the merit, scope, and propriety of our sister states' substantive limitations on administrative remedial power.
The view of the judicial powers doctrine embraced by our sister states has the advantage of avoiding meaningless, wooden distinctions (used in a number of older cases) between quasijudicial and judicial powers, [30] and at the same time remaining true to the fundamental teaching of the various constitutional judicial powers clauses. The decisions forthrightly recognize that administrative agencies do indeed exercise judicial-like powers, and accept the need for broad administrative powers in our increasingly complex government. At the same time, the view espoused by our sister states includes a crucial and workable limiting principle: The agency may exercise only those powers that are reasonably necessary to effectuate the agency's primary, legitimate regulatory purposes. Thus, contrary to plaintiff's suggestions, we perceive no danger that the view of judicial power embraced by our sister states will lead to a proliferation of agencies created to adjudicate specialized private disputes, thereby undermining the traditional role of the courts. Plaintiff's fears have not materialized in other states, and many of the decisions expressly caution against any such intrusion. [31] Practical considerations also militate against a less accommodating view of the judicial powers doctrine. If nonconstitutional administrative agencies were barred from adjudicating all money claims between private individuals who are subject to administrative regulation, such agencies would be precluded from exercising powers routinely employed, and not previously challenged. [32] For example, the authority of the FEHC to award backpay might thereby be called in doubt (see ante, fn. 8), and the authority of licensing agencies to adjudicate and conditionally order restitution ( ante, pp. 362-364) might also be questioned.
In addition to placing reasoned and workable substantive limitations on the remedial powers of administrative agencies, the view of the judicial powers doctrine embraced by our sister states also reserves to the courts the true judicial power. Consistently with our prior cases dealing with administrative revocation of professional licenses, the decisions uphold an agency's authority to exercise a challenged remedial power only if the administrative scheme also respects the principle of check by providing for judicial review of administrative determinations. It remains, of course, to resolve in different categories of cases, the procedures for and scope of judicial review necessary to fulfill the goal of reserving to the courts this essential attribute of judicial power. [33]
As observed above, there is no modern decision of this state addressing the precise administrative remedial power challenged here. With the exception of Jersey Maid  which, for the reasons discussed above, we do not believe should be viewed as controlling  our prior cases do not conflict with the approach taken by our sister states, and indeed they recognize the constitutional necessity of the principle of check. We believe our sister states' approach (i.e., embracing substantive as well as procedural limitations on administrative power) reflects a practical and reasoned understanding of the judicial powers doctrine. With the following considerations and concerns in mind, we, like our sister states, conclude that administrative adjudication and awarding of restitution does not offend our Constitution's judicial powers clause when these substantive and procedural limitations are respected. We too will carefully apply the reasonable necessity/legitimate regulatory purpose requirements in order to guard against unjustified delegation of authority to decide disputes that otherwise belong in the courts. [34] Specifically, we will inquire whether the challenged remedial power is authorized by legislation, [35] and reasonably necessary to accomplish the administrative agency's regulatory purposes. Furthermore, we will closely scrutinize the agency's asserted regulatory purposes in order to ascertain whether the challenged remedial power is merely incidental to a proper, primary regulatory purpose, or whether it is in reality an attempt to transfer determination of traditional common law claims from the courts to a specialized agency whose primary purpose is the processing of such claims. Thus, for example, we would not approve the Board's adjudication of a landlord's common law counterclaims (extraneous to the Board's regulatory functions) against a tenant. Such adjudication would (i) not reasonably effectuate the Board's regulatory purposes  ensuring enforcement of rent levels  and (ii) it would shift the Board's primary purpose from one of ensuring the enforcement of rent levels, to adjudicating a broad range of landlord-tenant disputes traditionally resolved in the courts. Finally, we will continue to apply the principle of check in order to reserve to the courts the true judicial power. [36]