In November 1977 the Congress passed Public Law 95-164, which among other things, created the Federal Mine Safety and Health Review Commission. This law gave the decision of the Commission's ALJS greater finality by limiting the agency's review authority to cases which (1) are appealed, (2) may be contrary to law or Commission policy, and (3) present a novel policy question.

Effects of extensive agency review

Extensive agency review cost money. For example, at OSHRC the personnel cost to review is approaching the cost to make the initial decision. In fiscal year 1976, review personnel cost at OSHRC was $1.38 million; ALJ personnel cost $2.125 million. Considered in relation to the total annual Federal appropriations for regulatory agencies of about $3 billion (see ch. 1), and the extensive agency review processes previously identified, it is readily apparent that large sums are directly related to the review process.

Futher, when agencies take hundreds, even thousands of days to reach final decisions, the impact is felt in other ways. For example, unfair labor practices may continue to exist, licenses may not be granted to operate businesses, health and safety violations may go uncorrected, and rightful claims for benefits may not be granted individuals.

The Congress designed the APA to assure

"that those who hear the case *
are an important
factor in the decision process * **that the views
of agency personnel are not unduly emphasized or
secretly submitted and that the official record alone
is the basis of decision."

The current agency review process, however, raises questions as to whether this is in fact being achieved. For example, as reported in ICC's July 6, 1977, study "Improving Motor-Carrier Entry Regulation:"

"There is a general feeling that many initial deci-
sions, and even appellate division decisions which
are not administratively final, are reopened upon
petition not because the decision below is clearly
erroneous, but the judgement of one decisional unit
of the Commission has been substituted for that of
another. * * *"

OVERFORMALIZATION CAUSES DELAY

The July 1977 Senate Committee on Governmental Affairs report concluded that formal adjudicatory proceedings also unnecessarily delay decisions in many cases. The report listed 23 types of administrative disputes that could be decided through modified or less formal judicial procedures and estimated that for every resultant 10 percent reduction in time taken to resolve the 1,300 cases involving such disputes in 1975, a savings of 172 years would accrue. previously noted, such delays are very costly to the Government, consumers, and industry.

Less formal procedures can satisfy due process requirements

As

Efforts to simplify the process used to resolve administrative disputes have in the past been resisted, primarily on the basis that formality is required to quarantee due process. While this is a concern, recent court decisions confirm that using less formal procedures can be consistent with due process requirements.

Due process, guaranteed by the 5th and 14th amendments to the Constitution, imposes constraints on administrative agencies regarding the manner in which they may render decisions or rulings which affect protected property interests of individuals. Where a protected property interest exists, due process requires notice and an opportunity to contest any deprivation of the interest, which generally requires some form of a hearing. 1/

However, due process does not require applying inflexible rules or complex procedures. Rather, it is flexible and calls for only such procedural protections as the particular situation demands. 2/ Accordingly, resolution of whether any given administrative procedures are constitutionally sufficient requires an analysis and balancing of the governmental and private interests that are affected. As stated in the Matthews v. Eldridge case, 3/

1/Matthews v. Eldridge, 424 U.S. 319 (1976).

2/See Morrissey v. Brewer, 408 U.S. 471 (1972). 3/Matthews v. Eldridge, supra at 335.

*

* identification of the specific dictates of
due process generally requires consideration of three
distinct factors: "

"* * * first, the private interest that will be
affected by the official action; second, the risk of
an erroneous deprivation of such interest through
the procedures used, and the probable value if any,
of additional or substitute procedural safeguards;
and finally, the Government's interest, including
the function involved and the fiscal and adminis-
trative burdens that the additional or substitute
procedural requirement would entail."

Other than the broad general guidelines of notice and opportunity to be heard, there are no fixed due process requirements which administrative adjudicative proceedings must satisfy. The intricacies of this requirement necessarily depend upon given circumstances and a balancing of the governmental and private interests concerned.

As to the specific relation between the basic due process requirements and the procedural requirements of APA, Supreme Court decisions indicate that due process does not require the application of the formal adjudicative procedures of the APA in all types of administrative hearings. 1/ Instead, it is required that hearings be "fundamentally fair," within the context of the above-described balancing test. 2/ Nor does due process require that ALJS, appointed under Section 11 of the APA (5 U.S.C. 3105), preside over every administrative hearing in which a claim, benefit, or other matter is contested. Under appropriate circumstances a qualified individual other than an ALJ may well handle a contested matter consistent with due process requirements.

Finally, highly formalized procedures that contribute to delaying final resolution of certain administrative disputes can deny effectively rather than guarantee due process. For example, one court 3/ ruled that the extensive time required for citations claimants to obtain a hearing before an ALJ and

1/Goldberg v. Kelley, 397 U.S. 254, 267-70 (1970).

2/Richardson v. Perales, 402 U.S. 389 (1971).

3/White v. Mathews, 559 F 2d. 852 (2d. Cir. 1977).

notification of the decision in various social security benefit cases constitutes unreasonable delay and can be in violation of the Social Security Act, which requires that any claimant be afforded a reasonable opportunity for a hearing.

Simplified proceedings can be used to adjudicate certain APA cases

Among the Senate Committee's recommendations to reduce delays in the administrative process was to amend APA to clarify the power of an agency to adopt "streamlined" procedures for deciding certain APA cases. Such simplified procedures include

--restricting or eliminating oral testimony and both
oral and written cross-examination which are not
essential to resolve specific factual issues on
which the case may turn;

--allowing oral, direct and cross-examination only
when the witness' perceptions, memory, or honesty
is at issue;

--permitting agencies to develop routine case proce-
dures under which the agency staff receives and
organizes written evidence and submits it directly
to agency members, and employee board, an ALJ or
other appropriate decisionmaker;

--allowing agencies, by rule, to explicitly direct
ALJS to use a firmer hand in guiding adjudicatory
proceedings and to establish deadlines for parties
to submit evidence; and

--permitting agency rules to provide that only written evidence will be accepted unless oral testimony or cross-examination is essential.

On February 6, 1978, the Committee introduced the Regulatory Procedures Reform Act (S-2490) to place these and other recommendations into law. While passage of this bill could help alleviate the problem of delay in adjudicating APA cases, two other processes which, with some modification, appear to be viable alternatives to the highly formalized procedures are now being used to adjudicate some cases at OSHRC and Social Security Administration's Bureau of Hearings and Appeals (BHA). These alternatives are the simplified case procedures used at the U.S. Tax Court to resolve tax disputes and the procedure followed by the Board of Veterans Appeals for benefit claims.

Simplified case procedure and OSHRC disputes

The procedure used by the U.S. Tax Court offers people contesting Internal Revenue Service tax rulings of $1,500 or less the option of appearing before a special trial judge in a less formal environment or at a formal hearing before a tax court judge. The decision in the simplified procedure is final, but many people nonetheless select this alternative and, on an average, their cases are completed in less than half the time required under the formal process.

A similar procedure could be used for some OSHRC cases. Although some of its cases involve significant and complex issues, many are relatively simple and lend themselves to less formal procedures--possibly not even requiring an ALJ's involvement. For example, in some cases the only issue being contested is the penalty amount or the time being given to abate the violation. It would also appear that cases involving a single issue such as whether "hard hats" should be worn, whether fire extinguishers were empty and in their proper location, or where safety and health records are maintained at industrial plants, could be adjudicated using simplified procedures.

Both the current and former OSHRC Chairmen agree that the adjudication process for many cases should be simplified. Several proposals to effect such changes have been made, but have not yet been adopted. During our review, the two remaining Commissioners were awaiting appointment of a new Commissioner before reconsidering adoption of simplified procedures.

While the procedure used by the U.S. Tax Court was not among those OSHRC previously considered, the Chief ALJ indicated he would like to see it adopted. The current Chairman who also favors simplified procedures, indicated that he would still review those cases where employees did not participate in a case.

A number of ALJs responding to our questionnaire also indicated the simplified tax procedure might be appropriate for use at other agencies. Of the 680 ALJS commenting on the possible use of this procedure at some agencies, 29 percent said yes, 9 percent said no, and 62 percent said they did not know. Among the agencies most frequently mentioned were OSHRC, NLRB, SSA, and ICC.

BVA procedure and its applicability

to BHA cases

Although the Veterans Administration benefit cases are for the most part similar to those BHA handles, the former are