Opinion ID: 1796802
Heading Depth: 1
Heading Rank: 3

Heading: the precedent for deferring to state agencies

Text: I must agree with this statement in the defendants' brief on application for rehearing: These businesses [those offering credit life insurance] have been `whipsawed' by coordinate branches of state government, having been advised for years by the Executive Branch that credit life insurance could be based on the `total of payments' with regard to precomputed interest loans, and now being told by the Judicial Branch that their reliance was misplaced and that their transactions are illegal. The Insurance Department has interpreted the phrase `amount ... of credit' to mean the `total of payments' on an `add-on/precomputed interest' credit transaction. (Plurality opinion, 687 So.2d 172.) This Court, in the past, has recognized that the Mini-Code provides for and permits add-on/precomputed interest loans and installment contracts. See Centennial Assocs., Ltd. v. Clark, 384 So.2d 616, 617 (Ala.1980). Why do we now suddenly change that position, with no explanation? The plurality opinion recites the law that states that [t]he interpretation placed on a statute by the executive or administrative agency charged with its enforcement is given great weight and deference by a reviewing court. 687 So.2d at 163. This should be particularly true where, as here, the long-standing interpretation has controlled how the public has conducted its business. City of Birmingham v. AmSouth Bank, N.A., 591 So.2d 473, 477 (Ala.1991). The rationale underlying this deference to administrative agencies is that the agencies, not the courts, possess specialized competence in the field of operation entrusted to [them] by the legislature. Hamrick v. Alabama Alcoholic Beverage Control Bd., 628 So.2d 632, 633 (Ala.Civ.App.1993), quoting Alabama Dep't of Public Health v. Perkins, 469 So.2d 651, 652-53 (Ala.Civ.App.1985). Furthermore, it is undisputed that the defendants, as well as the lending and credit insurance industries in general, have justifiably relied on this long-standing administrative interpretation for decades. Stallworth v. Hicks, 434 So.2d 229, 230-31 (Ala.1983). However, the plurality opinion gives no weight to the interpretation of the statute by the administrative agencies charged with its administration and enforcement. Instead, the plurality opinion seems to give more weight to the testimony of Robert Harrison, a Compass Bank vice-president. The Alabama legislature has amended the Alabama Mini-Code on several occasions since the Banking Department and the Department of Insurance initially issued their interpretations of § 5-19-20(a). At no time has the legislature altered those interpretations. These amendments, without change, of a statute which has been given a uniform construction by the administrative department `may be treated as a legislative approval of the departmental construction of the statute, quite as persuasive as the re-enactment of a statute, which has been judicially construed.' State v. Southern Elec. Generating Co., 274 Ala. 668, 670, 151 So.2d 216, 217 (1963), quoting State v. Birmingham Rail & Locomotive Co., 259 Ala. 443, 66 So.2d 884 (1953). The legislature is deemed to have given approval to the long-standing administrative interpretation of a statute. Therefore, this Court should not usurp the role of the legislature ... and amend statutes under the guise of construction. Honeycutt v. Employees' Retirement System of Alabama, 431 So.2d 961, 964 (Ala.1983). This Court has stated: [T]he generally accepted theory is that rules, regulations and general orders of administrative authorities pursuant to the powers delegated to them have the force and effect of laws, when they are of state-wide or national application, and so set up as that information of their nature and effect is readily available, or has become a part of common knowledge. State v. Friedkin, 244 Ala. 494, 497, 14 So.2d 363, 365 (1943). That quote perfectly describes the history of the law of Alabama with respect to credit life insurance. In interpreting the Insurance Regulations, this Court should look to the intent of the drafters of the regulations. Personnel Board of Jefferson County v. Bailey, 475 So.2d 863 (Ala.Civ.App.1985) (substantial deference should be given to an agency's interpretation of its own rules and regulations); see also Parker v. Bowen, 788 F.2d 1512, on remand, 793 F.2d 1177, on remand, Hand v. Bowen, 793 F.2d 275 (11th Cir.1986) (an agency's interpretation of its own regulations is entitled to deference and is controlling unless it is plainly erroneous or inconsistent with the language and purposes of the regulation). Furthermore, a court, whenever possible, should avoid a construction of a regulation that would raise doubt as to the regulation's validity or hinder its ability to make its statutory authority operative. Newsome v. Trans Int'l Airlines, 492 So.2d 592, 596 (Ala.), cert. denied, 479 U.S. 950, 107 S.Ct. 436, 93 L.Ed.2d 386 (1986). And, finally: The language used in an administrative regulation should be given its natural, plain, ordinary, and commonly understood meaning, just as language in a statute. In addition, however, one should construe such language by looking at the entire regulation, rather than at just an isolated clause or paragraph. Alabama Medicaid Agency v. Beverly Enterprises, 521 So.2d 1329, 1332 (Ala.Civ.App. 1987) (citation omitted) (emphasis added); see also Alabama Precast Products, Inc. v. State, Department of Revenue, 332 So.2d 160 (Ala.Civ.App.), cert. denied, 332 So.2d 164 (Ala.1976) (courts, in construing regulations, must look to the plain meaning of the provisions). The drafter of the Department of Insurance Regulations is the Department of Insurance. Therefore, if this Court seeks to find the interpretation of a portion of Regulation No. 28, it should look to the drafter of the regulationthe Department of Insurance. Bailey, 475 So.2d 863. The Department of Insurance made it simple and clear for this Court when it filed an amicus brief stating its interpretation of Regulation No. 28. The regulation allows use of the total of payments method for calculating the amount of insurance needed. The Department of Insurance wrote Regulation No. 28; therefore, its interpretation of that regulation is controlling, unless it is plainly erroneous or inconsistent with the language and purposes of the regulation. Bowen, 788 F.2d 1512. Mr. Robert Harrison did not draft and promulgate Regulation No. 28. Therefore, I must ask why does the plurality adopt his view as to the intent and meaning of the regulation, when the Department of Insurance, the drafter of the regulation, has specifically told this Court its meaning? Furthermore, if the authority of the Insurance Department's interpretation was not enough, the American Council of Life Insurance (American Council), the Consumer Credit Insurance Association (Consumer Credit), and the Alabama State Banking Department (Banking Department) all agree with and validate that interpretation. They all contend that the Alabama Code and Department of Insurance Regulations authorize creditors to base the amount of credit life insurance upon the amount of indebtedness, which includes principal and interest, the total of payments. This Court has received amicus briefs from national and state governmental agencies and private organizations who are experts in the complex insurance industry. Nevertheless, the plurality disregards the positions of those expert groups and adopts the lay interpretation of Mr. Harrison.