Opinion ID: 839160
Heading Depth: 3
Heading Rank: 1

Heading: michigan jurisprudence

Text: Unlike the United States Constitution, the Michigan Constitution specifically recognizes administrative agencies. Furthermore, the constitution explicitly provides for judicial review of administrative decisions: All final decisions, findings, rulings and orders of any administrative officer or agency existing under the constitution or by law, which are judicial or quasi-judicial and affect private rights or licenses, shall be subject to direct review by the courts as provided by law. This review shall include, as a minimum, the determination whether such final decisions, findings, rulings and orders are authorized by law; and, in cases in which a hearing is required, whether the same are supported by competent, material and substantial evidence on the whole record. Findings of fact in workmen's compensation proceedings shall be conclusive in the absence of fraud unless otherwise provided by law. In the absence of fraud, error of law or the adoption of wrong principles, no appeal may be taken to any court from any final agency provided for the administration of property tax laws from any decision relating to valuation or allocation.[ [25] ] The constitutional provision provides for review to determine: (1) that the decision is authorized by law, and (2) if a hearing is required, that the decision is supported by record evidence. [26] However, the provision does not stand for the proposition that agencies can assume this Court's constitutional role as the final arbiter of the meaning of a statute. Before evaluating the standard of review applicable to an agency's interpretation of a statute, it is helpful to delineate the agency functions not at issue in this case. This distinction is important because there are different standards of review for different agency functions. As noted earlier, agencies perform both quasi-legislative and quasi-judicial functions. First, there is the rulemaking function. A reviewing court must determine whether the Legislature, in accordance with the separation of powers principles discussed, properly delegated authority to the agency to promulgate the rule at issue. [27] That question concerns the constitutionality of the statute, a legal issue that this Court reviews de novo. [28] If the Legislature has properly delegated the rulemaking authority, then the only question before the court is whether the agency has exceeded its authority granted by the statute. [29] The other agency function not at issue in this case is fact finding in contested cases. The constitution requires that such agency findings be supported by competent, material and substantial evidence on the whole record. [30] Review of an administrative agency's fact finding is akin to an appellate court's review of a trial court's findings of fact in that an agency's findings of fact are entitled to deference by a reviewing court. In its fact finding capacity, the agency has reviewed evidence, such as witness testimony, and it is in the best position to evaluate the credibility and weight of that evidence. Similar to the clear error standard of review for circuit courts, under the constitutional and statutory standards of review, a reviewing court must ensure that the finding is supported by record evidence; however, the reviewing court does not conduct a new evidentiary hearing and reach its own factual conclusions, nor does the reviewing court subject the evidence to review de novo. [31] Keeping these other administrative functions distinct from review of an agency's interpretation of a statute during a contested case is very important to ensure that the appellate court applies the proper standard of review. A review of our own cases suggests that when courts are unmindful of these differing functions, they also tend to muddle the distinct standards of review that apply to each. This Court has uniformly held that statutory interpretation is a question of law that this Court reviews de novo. [32] Thus, concepts such as abuse of discretion or clear error, which are similar to the standards of review applicable to other agency functions, simply do not apply to a court's review of an agency's construction of a statute. Nonetheless, the Court of Appeals panel in this case did not apply a de novo standard of review when assessing the PSC's interpretation of MCL 484.2502(1)(a). While there are some opinions that seem to stand for the proposition that agency statutory interpretations are reviewed for reasonableness or an abuse of discretion, [33] those standards do not apply to the interpretation of a statute, and they threaten the separation of powers principles discussed earlier by allowing the agency to usurp the judiciary's constitutional authority to construe the law and infringe on the Legislature's lawmaking authority. However, [w]e acknowledge that our past case law has not been entirely consistent regarding the subject of the amount of deference to be given when an administrative agency with expertise in its field construes a statute governing the area regulated by the agency. [34] We believe that this is due in large part to the Court's failure consistently to use the same articulation of the proper standard of review for an agency's interpretation of a statute and to carefully apply the correct standards of review for different types of agency action. This Court announced the proper standard of review for agency statutory construction more than 70 years ago in Boyer-Campbell v. Fry, [35] which dealt with the proper construction of the General Sales Tax Act. The Boyer-Campbell Court held that the construction given to a statute by those charged with the duty of executing it is always entitled to the most respectful consideration and ought not to be overruled without cogent reasons. However, these are not binding on the courts, and [w]hile not controlling, the practical construction given to doubtful or obscure laws in their administration by public officers and departments with a duty to perform under them is taken note of by the courts as an aiding element to be given weight in construing such laws and is sometimes deferred to when not in conflict with the indicated spirit and purpose of the legislature.[ [36] ] This standard requires respectful consideration and cogent reasons for overruling an agency's interpretation. Furthermore, when the law is doubtful or obscure, the agency's interpretation is an aid for discerning the Legislature's intent. However, the agency's interpretation is not binding on the courts, and it cannot conflict with the Legislature's intent as expressed in the language of the statute at issue. Boyer-Campbell remains good law, and it has been used repeatedly by this Court. [37] However, in some of our later cases, this Court and the Court of Appeals have employed recitations of standards that do not follow the language of Boyer-Campbell or apply to review of agency's statutory construction. While these recitations do not necessarily substantively conflict with Boyer-Campbell, they add to the confusion discussed earlier. [38] For example, in Ludington Service Corp v. Acting Comm'r of Ins , this Court affirmed the Court of Appeals decision to overturn one portion of the agency's decision because the agency relied on an interpretation of a statute that conflicted with the statute's plain meaning. [39] First, the Court reversed a number of the agency's factual determinations because they were not supported by competent, material, and substantial evidence. [40] The Court then turned to the statutory interpretation question and used the following standard of review in reaching that conclusion: Finally, while this Court affords deference to an agency's findings of fact, we can always review an agency's legal findings. Both the Michigan Constitution and the applicable statute permit this Court to set aside the commissioner's findings if they are in violation of the constitution or a statute, or affected by other substantial and material error of law.[ [41] ] To that end, the Court held that although this Court affords an agency some statutory deference, the agency's interpretation is not binding on this Court, and cannot be used to overcome the statute's plain meaning. [42] This standard does not directly conflict with Boyer-Campbell because the plain meaning of the statute still controlled the outcome; however, by referring to deference with regard to both the agency's fact finding and its statutory interpretation, the Court sowed the seeds of confusion. Another example of a confusing articulation of the standard is illustrated in Adrian School Dist. v. Michigan Pub. School Employees Retirement Sys., [43] where this Court held that [t]he agency must interpret the statute it administers, and its interpretations are entitled to great weight. The case cited for this proposition, Magreta v. Ambassador Steel Co., [44] did not actually use the words great weight, but, rather, quoted the general Boyer-Campbell standard discussed earlier. While the Adrian School Dist. Court independently construed the statute, by employing a term such as great weight, this Court again allowed for the possibility that the judiciary must defer to the agency's interpretation of the statute. A similar blurring of standards occurred in Catalina Marketing Sales Corp v. Dep't of Treasury, [45] in which this Court held that, while it affords deference to the construction of statutory provisions by any particular department of the government and used for a long period, the department's interpretation is not binding on this Court and cannot be used to overcome the statute's plain meaning.... Catalina adds the concept of deference to longstanding agency interpretations to the general deference referenced in Ludington. [46] Like Ludington, Catalina recognizes the fundamental requirement that the statute's plain meaning controls. [47] Furthermore, the Court rejected the agency's interpretation because it conflicted with the plain meaning. Because this Court's decisions that used imprecise language still made clear that the plain language of the statute was the controlling legal consideration, the varying deference standards articulated in them seem to have had negligible outcome determinative effect. However, by employing words such as deference, which can imply that the judiciary must accede to the agency's interpretation of a statute, this Court has unmistakably added to the confusion in this area of the law. [48] Given this Court's difficulty to hew to the correct standard it set forth in Boyer-Campbell, the Court of Appeals has understandably relied on some of the confusing articulations of standards made by this Court and thereby used the erroneous deference or great weight standard to allow agencies improperly to assume the courts' role as the final arbiter of a statute's meaning. For instance, the Court of Appeals panel in this case quoted In re Michigan Cable Telecom Ass'n Complaint [49] for the proposition that [a]s a general rule, we will defer to the construction placed on a statute by the governmental agency charged with interpreting it, unless the agency interpretation is clearly erroneous. An agency's initial interpretation of new legislation is not entitled to the same measure of deference as is a longstanding interpretation. However, merely establishing that another interpretation of a statute is plausible does not satisfy a party's burden of proving by clear and convincing evidence that the PSC's interpretation is unlawful or unreasonable. This hybrid standard of review is a prime example of the mixing and matching of the standards of review applicable to the different functions of an agency. Relying on this muddled and unduly deferential standard, the panel acceded to an agency interpretation that the panel believed to be contrary to the plain meaning of the statute. When considering an agency's statutory construction, the primary question presented is whether the interpretation is consistent with or contrary to the plain language of the statute. While a court must consider an agency's interpretation, the court's ultimate concern is a proper construction of the plain language of the statute. By using a deferential standard inconsistent with Boyer-Campbell, the panel below abdicated its judicial authority to construe statutes. By acceding to the agency's interpretation, the panel gave greater consideration to the agency's interpretation than it would have given a circuit judge's construction. Given that statutory construction is the domain of the judiciary, it is hard to imagine why a different branch's interpretation would be entitled to more weight than a lower court's interpretation. As established in Boyer-Campbell, the agency's interpretation is entitled to respectful consideration and, if persuasive, should not be overruled without cogent reasons. Furthermore, the agency's interpretation can be particularly helpful for doubtful or obscure provisions. But, in the end, the agency's interpretation cannot conflict with the plain meaning of the statute. Respectful consideration is not equivalent to any normative understanding of deference as the latter term is commonly used in appellate decisions. To avoid further confusion, courts should rely on the Boyer-Campbell articulation of the standard of review for an agency's interpretation of a statute instead of more recent cases, which have erroneously introduced inappropriate concepts such as deference. Furthermore, courts should carefully separate the different agency functions under consideration and apply the proper standard of review for each.