Opinion ID: 1189763
Heading Depth: 1
Heading Rank: 1

Heading: Attributes of an Administrative Proceeding.

Text: As noted, we set out the following as attributes of an administrative proceeding in our order of January 27, 1994: 1. A dispute must exist. 2. A document reflecting the fact of the dispute which serves a function similar to that of a complaint in a civil action, or an accusation or statement of issues under the Administrative Procedure Act, AS 44.62.360, 370, must be served by one party on the other party. 3. The document must set in motion mechanisms prescribed by statute or regulation under which the dispute will ultimately be resolved. Although there is no single authority which concisely defines an administrative proceeding, examination of case law and Alaska statutes involving adjudicatory administrative proceedings demonstrates that these attributes are common to such proceedings. [6] The context in which the term administrative proceeding is used in section 17, the common meaning of the words, and evidence of legislative and voter intent and purpose also support the recognition of these attributes. We have previously set forth the appropriate approach to interpreting constitutional language. Constitutional provisions should be given a reasonable and practical interpretation in accordance with common sense. The court should look to the plain meaning and purpose of the provision and the intent of the framers. Arco Alaska, Inc. v. State, 824 P.2d 708, 710 (Alaska 1992) (citation omitted); see also Kochutin v. State, 739 P.2d 170, 171 (Alaska 1987). Adherence to the common understanding of words is especially important in construing provisions of the Alaska Constitution, because the court must `look to the meaning that the voters would have placed on its provisions.' Division of Elections v. Johnstone, 669 P.2d 537, 539 (Alaska 1983) (quoting State v. Lewis, 559 P.2d 630, 637-38 (Alaska), appeal dismissed, 432 U.S. 901, 97 S.Ct. 2943, 53 L.Ed.2d 1073 (1977)), cert. denied, 465 U.S. 1092, 104 S.Ct. 1580, 80 L.Ed.2d 114 (1984). Unless the context suggests otherwise, words are to be given their natural, obvious, and ordinary meaning. Hammond v. Hoffbeck, 627 P.2d 1052, 1056 n. 7 (Alaska 1981). Because of our concern for interpreting the constitution as the people ratified it, we generally are reluctant to construe abstrusely any constitutional term that has a plain ordinary meaning. Rather, absent some signs that the term has acquired a peculiar meaning by statutory definition or judicial construction, we defer to the meaning the people themselves probably placed on the provision. Normally, such deference to the intent of the people requires [a]dherence to the common understanding of words. Citizens Coalition for Tort Reform, Inc. v. McAlpine, 810 P.2d 162, 169 (Alaska 1991) (citations omitted) (quoting Johnstone, 669 P.2d at 539). Our objective, therefore, is to identify the meaning that the people probably placed on the term administrative proceeding. We begin by recognizing that administrative agencies today perform a wide range of functions and activities, including supplying services, licensing, investigating, rulemaking, and individualized decision-making in the nature of adjudication. In the proper context investigation, rulemaking, and adjudication all could be labelled administrative proceedings. In the context of section 17, however, it is extremely unlikely that the people would have understood administrative proceeding to mean rulemaking or investigation. First, rulemaking and investigation do not normally terminate by settlement, as does adjudication, nor would they normally result in the receipt of money as a result of their termination. [7] Second, such an understanding of the term would be contrary to the purpose of the amendment, which was to remove certain unexpected [8] income from the appropriations power of the legislature, and to save that income for future need. [9] Money eventually received as a result of rulemaking, in accordance with the rules adopted, can hardly be called unexpected. Once we recognize that the people probably understood the term administrative proceeding to mean adjudication-like proceedings before administrative agencies, as opposed to rulemaking or investigative actions, our task is to identify the essential attributes of this type of proceeding in order to distinguish between administrative actions which are administrative proceedings within the meaning of section 17 and related administrative actions which are not. [10] The first attribute an administrative proceeding must possess is that a dispute must exist for the proceeding to resolve. [11] This attribute derives from the language of section 17, the voter pamphlet, legislative use of the term, and our recognition that the people understood administrative proceeding to mean adjudicatory proceedings. Article IX, section 17 clearly indicates that an administrative proceeding is a proceeding which may terminate, through settlement or otherwise. § 17(a). Settlement, the only specific means listed in the Constitution by which an administrative proceeding may terminate, implies the existence of opposing parties who reach a compromise. Settlement thus assumes a preexisting dispute. This reading is also supported by the voter pamphlet for the 1990 election. [12] Although most of the references in the voter pamphlet to the sources of revenues which would be deposited in the budget reserve fund use language which closely parallels section 17's language, [13] the statement in support of the amendment refers to windfall revenues that result from pending litigation and tax disputes. When this statement is compared with the constitutional language allocating to the budget reserve fund money received as a result of the termination, through settlement or otherwise, of an administrative proceeding or of litigation, it is clear that tax disputes refers to administrative proceedings. The use of the term administrative proceeding in the Alaska Statutes also generally supports the existence of a dispute as an essential element in that term's meaning. Administrative proceeding is never defined in the Alaska Statutes. In most cases, however, the context in which the term is used demonstrates that an adjudicatory proceeding, usually between an agency of the State and some private individual or entity, is anticipated. [14] As discussed below, such adjudications are predicated on the existence of an underlying dispute. Finally, we consider the existence of a dispute to be an essential attribute of an administrative proceeding because it is a common element in all adjudicatory proceedings. For example, Black's Law Dictionary defines adjudication as [t]he legal process of resolving a dispute and adjudicatory process as a [m]ethod of adjudicating factual disputes; used generally in reference to administrative proceedings in contrast to judicial proceedings. Id. at 42. Similarly, the formal rules governing administrative adjudications under the Administrative Procedures Act (APA), AS 44.62.330-.630, clearly anticipate the existence of a dispute before action is taken. For example, an accusation under AS 44.62.360 must set out the acts or omissions with which the respondent is charged, so that the respondent is able to prepare a defense. AS 44.62.360(1). Both the use of the word charged and the recognition of the need for a defense indicate the necessary existence of an underlying controversy or dispute. A statement of issues, as provided for in AS 44.62.370, anticipates that the respondent must show compliance [with a statute or regulation] by producing proof at the hearing, and must specify particular matters that have come to the attention of the initiating party and that would authorize a denial of the agency action sought. AS 44.62.370(a)(1)(2). The necessity of one party carrying a burden of production and the possibility that a request for a right or privilege may be denied also indicate the existence of an underlying dispute. [15] Because a dispute exists in all adjudicatory proceedings, and because the language of section 17 and the voter pamphlet indicate that administrative proceeding meant a proceeding involving a dispute, the first essential attribute of an administrative proceeding is that a dispute must exist. The second essential attribute of an administrative proceeding is that a document reflecting the fact of the dispute, which serves a function similar to that of a complaint in a civil action, or an accusation or statement of issues under the APA, must be served by one party on the other party. [16] This element is required in order to ensure that the procedures we recognize as administrative proceedings meet minimal due process requirements. [17] Although we are not directly concerned in this litigation with the due process rights of the participants in administrative proceedings, minimal due process requirements do define necessary requirements of all adjudicatory proceedings. Without providing at least notice and the opportunity to participate to those who might be affected, no administrative action can either resolve the dispute to the satisfaction of all of the parties or be considered final despite later objections. See Wickersham, 680 P.2d at 1144; Kerr, 779 P.2d at 342. Because we conclude that an administrative proceeding must be an action capable of finally resolving the issue in dispute, either by the express consent of all of the parties or by reaching a determination which could be accorded finality consistent with due process, we hold that sufficient written notice, specifying the nature of the dispute and the relief requested, is essential to an administrative proceeding. [18] Our conclusion that an administrative proceeding must be an action which is capable of being accorded finality consistent with the requirements of due process is supported by the language of section 17. The phrase as a result of the termination, through settlement or otherwise, of an administrative proceeding clearly implies that an administrative proceeding may terminate with or without the express consent of all of the parties. A party must be aware of the dispute and the existence of the proceedings in order to terminate them by settlement. More importantly, in order for an administrative action to terminate without the consent of all the parties in a manner which may result in the collection of money by the State, individuals affected must have notice and an opportunity to object. Otherwise, no finality will be accorded the administrative agency's decision in any subsequent action. [19] The third essential attribute of an administrative proceeding  that the document which one party serves on the other must set in motion mechanisms prescribed by statute or regulation under which the dispute will ultimately be resolved  derives from the ordinary meaning of the word proceeding and the nature of adjudication. Webster's Third New International Dictionary 1807 (1969) defines proceeding as a particular step or series of steps adopted for doing or accomplishing something. [20] Our reference to mechanisms ... under which the dispute will ultimately be resolved closely parallels the dictionary definition and follows from it. [21] The two requirements which our essential attribute adds to this dictionary definition  that the document served on the other party set these mechanisms in motion and that the mechanisms be prescribed by statute or regulation  follow from the nature of adjudication and from our recognition that a administrative proceeding under section 17 must be capable of being accorded finality. Adjudicatory proceedings begin with the issuance by one party to the other of a document which serves both as the initiation of the dispute resolution process and as notice that the process has been initiated. [22] For example, the APA expressly states that filing an accusation or a statement of issues initiates a hearing. AS 44.62.360, .370. Similarly, the civil rules provide that a civil action is commenced by filing a complaint with the court, and that a copy of the complaint must be served on the opposing party. Alaska Rules of Civil Procedure 3, 4. Therefore, it may be said that these documents have legal significance beyond merely providing notice. They also start in motion the coercive force of the law with the ultimate objective of resolving the dispute. By providing notice, they ensure that the use of this force is fair. Our recognition that an administrative proceeding necessarily possesses the characteristic of finality requires that the proceeding which is initiated have legal authority to bind the non-initiating party, subject perhaps to further appeal, even if that party disagrees with the solution reached or fails to participate in the resolution. This is a substantive corollary to our earlier recognition that minimum due process is required before binding a party over his objection. Simply put, legal authority to bind a party over his objection, or without his participation in the proceeding, cannot be assumed. Therefore, we require that the mechanisms which attempt to do so be prescribed by law. [23] This final attribute, more than either of the other two attributes, highlights the difference between the commencement of an administrative proceeding and similar action by a party which does not initiate a proceeding. Unless the document which the first party serves on the opposing party creates a legal obligation on the opposing party to either respond or accept a determination made in the party's absence, then the opposing party is free to ignore the document. If the opposing party is free to ignore the document without consequence, then the document is not part of a proceeding which is capable of finally terminating the dispute without the consent of the opposing party. In other words, so long as the opposing party is free to refuse to participate or to withdraw from any attempt to resolve the dispute without legal consequences, then the attempt may be a settlement negotiation, but it is not an adjudication. By contrast, where the law provides that even an opposing party's complete failure to respond has legal significance and may justify a decision against him or her, then the initial document initiates an adjudication and, provided the other attributes are also present, an administrative proceeding under section 17.