Court Opinion

ID: 9602645
Source: CourtListenerOpinion
Date Created: 2023-08-22 01:58:11.203435+00
Date Added: 2024-06-11T18:02:05.479684
License: Public Domain

BENCH, Judge,
concurring:
I concur. I write separately to clarify that there is more than one possible standard of review when relief is requested under section 63 — 46b—16(4)(h)(ii) of the Utah Administrative Procedures Act. As the main opinion correctly points out, the supreme court has adopted a deferential reasonableness standard when reviewing an agency’s “application” of an administrative rule to the facts. See Union Pacific Railroad Co. v. State Tax Commission, 842 P.2d 876, 879 (Utah 1992). “Reasonableness,” however, is not the only possible standard of review under subsection 16(4)(h)(ii). Where a petitioner asserts that the agency’s action is contrary to the agency’s rule because the agency incorrectly interpreted the rule, we apply a correction-of-error standard, unless the agency has *684been granted discretion to interpret related statutory terms. See Morton Int’l, Inc. v. State Tax Comm’n, 814 P.2d 581, 593 n. 62 (Utah 1991).
In Union Pacific, the supreme court only addressed the standard for reviewing an agency’s “application” of a rule to the facts. It was not presented with a claim that the agency had departed from its own rules. Nevertheless, the court gratuitously stated that since “courts should uphold agency rules if they are reasonable and rational, courts should also uphold reasonable and rational departures from those rules_” 842 P.2d at 879 (citation omitted). The apparent discrepancy between this broad statement and other supreme court holdings should be clarified.
It does not logically follow that an agency has discretion to violate its own rules simply because it had discretion to make those rules. The supreme court itself has declared that agencies must follow their own rules.
[Administrative regulations are presumed to be reasonable and valid and cannot be ignored or followed by the agency to suit its own purposes. Such is the essence of arbitrary and capricious action. Without compelling grounds for not following its rules, an agency must be held to them.
Department of Community Affairs v. Merit System Council, 614 P.2d 1259, 1263 (Utah 1980).
The misleading language in Union Pacific contradicts the language of subsection 16(4)(h)(ii) itself, which expressly states that relief may be granted if agency action is “contrary” to agency rule. The legislature did not direct that relief may be granted only if the agency action is “unreasonably contrary” to agency rule. Reasonable or not, a departure from an agency rule is by definition “contrary” to the rule.
Inasmuch as a departure from a rule effectively constitutes a rule change, the supreme court’s dicta also contradicts the Utah Administrative Rulemaking Act. The Act anticipates that once an agency adopts a rule it must abide by the rule, unless it exercises its rulemaking authority to amend the rule. See sections 63-46a-3(8), and -9(2) (regarding rule amendments).
Any agency subject to the Administrative Rulemaking Act promulgating a rule must follow the procedures specified. See Williams v. Public Serv. Comm’n, 720 P.2d 773, 775 (Utah 1986) (interpreting the Utah Rule Making Act, the predecessor to the Administrative Rulemaking Act). The Administrative Rulemaking Act requires rule making whenever “agency actions affect a class of persons” Utah Code Ann. § 63-46a-3(3)(a) (1986), and defines a rule as “a statement made by an agency that applies to a general class of persons, rather than specific persons ... [which] implements or interprets policy made by statute.... ” Id. at § 63-46a-2(8).
Ellis v. State Retirement Bd., 757 P.2d 882, 887 (Utah App.1988). See also Lane v. Board of Rev. of Indus. Comm’n, 727 P.2d 206, 208 (Utah 1986) (agency rules are not valid and cannot “provide a lawful basis” for agency decisions until the agency complies with the rulemaking process).
The mere application of the law to the facts of a case does not constitute rulemaking. Ellis, 757 P.2d at 887. If, on the other hand, an agency seeks to change “clear law” so as to develop a new rule of law that will have general application, it may do so only through the rulemaking process. See Williams v. Public Serv. Comm’n, 720 P.2d 773, 776 (Utah 1986) (quoting 2 K. Davis, Administrative Law Treatise § 7:25, at 122 (2d ed. 1978)). Clarifying “interpretations” of rules that have general application (and are therefore de facto new rules) may be made through administrative adjudication only if the law at issue is “uncertain.” Williams, 720 P.2d at 776. Once an administrative ruling of law is made in a formal adjudication, however, it constitutes stare decisis and the agency is bound by it just as if it were a formally adopted rule. Salt Lake Citizens Congress v. Mountain States Tel. & Tel., 846 P.2d 1245, 1252-53 (Utah 1992); see also Utah Code Ann. § 63-46a-3(6) (1989) (“Each agency shall enact rules in*685corporating the principles of law not already in its rules that are established by final adjudicative decisions within 120 days after the decision is announced in its cases.”).
Since an agency may “depart” from its established rules only through the process outlined in the Administrative Rulemaking Act, we cannot logically defer to such departures, reasonable or not, when they occur by means of agency adjudications. Consequently, the supreme court’s analytical dicta in Union Pacific should not be confused with the actual holding in that case, i.e., that an agency’s application of its rules is reviewed for reasonableness.
Since Holland is challenging only the CSRB’s application of rule R468-5-4.(3), (and not its interpretation of the rule), I concur with the main opinion’s use of the reasonableness standard and agree' that CSRB’s application of the rule was reasonable.