Opinion ID: 2392074
Heading Depth: 1
Heading Rank: 13

Heading: Cases Applying Accardi and Requiring Prejudice

Text: From the sampling of the Court of Special Appeals cases, and other cases discussed above, it appears that, under the reasoning of those cases, an agency's failure to comply with its own rules, especially where those rules affect fundamental rights guaranteed by the Constitution or a statute, might mandate invalidation of the agency action by the courts under a per se rule. We hold for Maryland that such an interpretation of Accardi under those circumstances is too strict and too general. Other jurisdictions have chosen to apply Accardi in a less inclusive manner to administrative regulations similar to the way we have interpreted our own APA provisions and our general rule in those cases in which the APA is not applicable. In other cases some jurisdictions have further chosen to require that, in any event, claimants must demonstrate prejudice resulting from the violation to have the agency action invalidated. We hold that this rationale reflects a more widely accepted interpretation of Accardi and is more in line with cases arising from the Supreme Court, and elsewhere, since Accardi. More important it is in line with Maryland public policy concerns as expressed by the Legislature in the APA for agencies that come under the APA's aegis. In United States v. Caceres, 440 U.S. 741, 751 n. 14, 99 S.Ct. 1465, 1471 n. 14, 59 L.Ed.2d 733, 743 n. 14 (1979), the Supreme Court held that while a violation of agency regulations did not raise constitutional questions under the circumstances of that criminal case, [i]t does not necessarily follow, however, as a matter of either logic or law, that the agency had no duty to obey them. In that case, the Supreme Court granted certiorari to decide whether evidence obtained in violation of the IRS regulations may be admitted at the criminal trial of a taxpayer accused of bribing an IRS agent. Specifically, Caceres moved to suppress the tape recordings because all of the authorizations required by the detailed IRS regulations had not been secured. Approval by as many as three different levels of authority pursuant to the IRS regulations might have been required depending upon the type of surveillance. The Government successfully argued that suppression is especially inappropriate because the violation of the regulation was neither deliberate nor prejudicial, and did not affect any constitutional or statutory rights. Id. at 743-44, 99 S.Ct. at 1467, 59 L.Ed.2d at 738. In Marshall v. Lansing, 839 F.2d 933 (3rd Cir.1988), the Third Circuit stated that a court can set aside agency action which fails to comply with the agency's own regulations, at least where the regulations are designed to protect the individual grievant, implying that a court has some discretion regarding what to do in the context of an agency violation. Id. at 943. However, in that same opinion, the Third Circuit went on to cite Accardi for the proposition that a writ of habeas corpus will issue where [a] federal agency fails to comply with its own regulations, implying that a remand is mandatory where an agency violates its own regulations. Id. (citing Accardi, supra ). Yet, very recently in Moi Chong v. District Director, INS, 264 F.3d 378, 389 (3rd Cir.2001), the Third Circuit seemed to adopt the requirement that claimants demonstrate prejudice and stated that to warrant reversal, the [regulation] violation must have prejudiced Chong. (alteration added) (emphasis added). Heffner, supra, which seemingly adopted the per se rule for invalidating an agency action when an agency does not scrupulously observe any of its rules, regulations or procedures, was recently discussed by the Fourth Circuit in United States v. Morgan, 193 F.3d 252 (4th Cir. 1999). In that case, that Court emphasized that an agency's failure to afford an individual procedural safeguards required under its own regulations may result in the invalidation of the ultimate administrative determination. See e.g., Delgado-Corea v. INS, 804 F.2d 261 (4th Cir.1986). However, in Morgan, the Fourth Circuit noted that although the Accardi doctrine originally contemplated that an agency's failure to comply with its own rules would automatically nullify its action, referring to Heffner, the Supreme Court has since required that claimants demonstrate prejudice resulting from the violation unless the rules were not intended primarily to confer important procedural benefits upon individuals in the face of otherwise unfettered discretion or unless an agency required by rule to exercise independent discretion has failed to do so. Morgan, 193 F.3d at 267 (quoting American Farm Lines, 397 U.S. at 538-39, 90 S.Ct. at 1292, 25 L.Ed.2d at 553 (1970)). In Martinez-Camargo v. Immigration and Naturalization Service, 282 F.3d 487, 491 (7th Cir.2002), the Seventh Circuit, in discussing whether the regulatory violation at issue in that case caused prejudice, stated how requiring such a showing when the regulation involved does not affect a fundamental right of the Constitution, strikes the proper balance between recognizing the need for administrative agencies to follow their own rules with the practical reality that not every agency violation impacts an [individual's] substantive rights. The Court of Appeals for the Ninth Circuit, relying on American Farm Lines, has held that the INS's failure to follow its own regulations would not invalidate a deportation proceeding unless (1) the regulation serves a purpose of benefit to the alien, and (2) the violation prejudiced interests of the alien which were protected by the regulation. United States v. Calderon-Medina, 591 F.2d 529, 531 (9th Cir. 1979) (emphasis added). In Steenholdt v. Federal Aviation Administration, 314 F.3d 633 (D.C.Cir.2003), the United States Court of Appeals for the District of Columbia Circuit, held that the Court lacked authority to review the federal agency's decision not to renew an inspector's qualification to perform inspections of aircraft and, further, specifically discussing prejudice, held that the inspector was not prejudiced by the agency's alleged failure to follow its own gratuitous rules. That Court stated: In addition to arguing that the FAA erred in the substance of its decision, a subject over which we have no jurisdiction, Petitioner additionally asserts that the FAA failed to follow its own proceduresspecifically, the procedures set out for the renewal of designations in FAA Order 8130.24. In support of our jurisdiction to review this claim, Petitioner relies upon United States ex rel. Accardi v. Shaughnessy, 347 U.S. 260, 74 S.Ct. 499, 98 L.Ed. 681 (1954). The Accardi doctrine requires federal agencies to follow their own rules, even gratuitous procedural rules that limit otherwise discretionary actions. `Courts, of course, have long required agencies to abide by internal, procedural regulations... even when those regulations provide more protection than the Constitution or relevant civil service laws.' Doe v. United States Dep't of Justice, 753 F.2d 1092, 1098 (D.C.Cir.1985) (referring to employment regulations); see also American Farm Lines v. Black Ball Freight Serv., 397 U.S. 532, 539, 90 S.Ct. 1288, 25 L.Ed.2d 547, (1970). However, Petitioner's allegation of procedural error avails him nothing. Insofar as Petitioner demonstrates any violation of the procedures in Order 8130.24, such violations are without prejudice, let alone substantial prejudice. Id. at 639 (emphasis added). In Von Kahl v. Brennan, 855 F.Supp. 1413, 1421 (M.D.Pa.1994), the United States District Court for the Middle District of Pennsylvania explored the Accardi doctrine and stated: In this case, the regulations at issue clearly are designed to protect an inmate's fundamental due process rights. However, because of the exigencies of the prison disciplinary context, this court is not persuaded that a disciplinary sanction must automatically be vacated and remanded because a particular regulation was violated. Rather, at least in situations where the minimal requirements of due process have been met, an inmate must show prejudice to the rights sought to be protected by the regulation claimed to be violated. [Emphasis added.] In In re Application of Jantzen, 245 Neb. 81, 92, 511 N.W.2d 504, 513 (1994), the Supreme Court of Nebraska noted that Agency violations of regulations which have been promulgated to benefit a party, by entitling the party to a substantive benefit or exemption or to a procedural safeguard, have been invalidated by courts. However, that court then went on to state that Many courts will review a waived rule or regulation only upon a showing of substantial prejudice to the complaining party. Id. (emphasis added). In In re Waterfront Development Permit No. WD88-0443-1, 244 N.J.Super. 426, 582 A.2d 1018 (1990), the Superior Court of New Jersey discussed Accardi in a case involving violations of the rules of the Department of Environmental Protection (DEP) by the Commissioner of the DEP. There, that court reversed the issuance of a permit for development by the Commission because the DEP's rules required that the Division of Coastal Resources issue such permits. That court stated: The principle was summarized ... in the following way: `When an Administrative Agency promulgates rules to govern its proceedings, these rules must be scrupulously observed. This is so even when the defined procedures are generous beyond the requirements that bind such agency. For once an agency exercises its discretion and creates the procedural rules under which it desires to have its actions judged, it denies itself the right to violate those rules. If an agency in its proceedings violates its rules and prejudice results, any action taken as a result of the proceedings cannot stand.' In re Waterfront, 244 N.J.Super. at 434, 582 A.2d at 1021 (citations omitted) (emphasis added). In Henry v. Corporation Commission of the State Oklahoma, 825 P.2d 1262 (Oak. 1990), the Supreme Court of Oklahoma discussed Accardi in a case involving the appeal of a decision of the Corporation's Commission of the state which permitted certain gas utilities to invoke a general rate increase. The Supreme Court of Oklahoma held that the Corporation Commission's order directing the rate increase was invalid because Corporation Commission had failed to adhere to its own procedural rule set forth in the Corporation Commission's Rules of Practice. However, that court's decision was based on prejudice. In Henry, 825 P.2d at 1267, that court stated: The Oklahoma Corporation Commission is constitutionally empowered with the authority to make rules governing procedure and practice before the Commission. These rules, regulations, and standards adopted by the Commission have the force and effect of the law. When an administrative agency such as the Commission promulgates rules to govern its proceeding these rules must be scrupulously observed. Once the agency creates procedural rules it denies itself the right to violate these rules, and an action taken in violation of these procedural rules will be stricken down by the courts. This doctrine was announced in the case of United States ex rel. Accardi v. Shaughnessy . It is of no significance that the procedural rule here established by the Commission is more generous than that required by the constitution or by statute. The Commission's failure to follow its own procedural rule vitiate such actions where prejudice results. [Footnotes omitted.] [Emphasis added.]