One of the most confusing parts of licensing law is the concept of “who makes the final decision?” Even though licensees have the right to an administrative hearing before they are disciplined in any way by the agency, the written result of hearing is called the “proposed decision” and doesn’t become final until the agency itself reviews it and makes it official, a process called “adoption.” If the agency rejects the proposed decision, that is called a "non-adoption." The same term is also applied to a rejected proposed settlement.
So, our clients ask, what’s the point? Why go to hearing if I’m just going to have to deal with whatever the agency wants in the end?
First of all, non-adoptions are fairly rare. Administrative law judges are legally trained to produce decisions that will be acceptable to state agencies, using disciplinary guidelines provided by the agencies themselves to create acceptable decisions. The most common reason a proposed decision is non-adopted is not because the ultimate outcome is unacceptable to the Board, Bureau, Department or Agency but because the decision itself has left out something that an individual agency requires. In that case, the decision often is revised in a minor, technical way, and then reissued with the same result. A proposed decision can even be non-adopted in the client’s favor, to remove some condition that the judge proposed that the agency doesn’t want to be responsible for enforcing.
However, in many non-adoptions after hearing, the client usually has achieved a successful result at hearing, persuading the judge of the merits of his/her case, only to have the agency return the proposed decision because the agency fundamentally disagrees with the result. This result is most common when the licensee is disciplined less harshly than the agency would like to see. An agency may outright refuse to grant a license or insist on the outright revocation of a license. Or, an agency may want probation where perhaps a judge would have allowed the client to practice freely, or an agency will insist on a condition that the judge did not find necessary.
Non-adoptions happen more frequently with cases handled by experienced license defense attorneys, because we sometimes will achieve a surprisingly good result for the client that the agency doesn’t expect. However, after the agency studies the decision, they may come to understand the reasons for it and adopt it as written by the administrative law judge.
The agency holds most of the cards in this scenario, but the battle is not over for the licensee. The client has the right, under the Administrative Procedure Act, to obtain a copy of the transcript and a chance to produce written argument directly to the agency (and occasionally, if granted, make an oral argument) about how the proposed decision should be treated. Sometimes the agency ends up adopting the proposed decision in its entirely after written argument—a successful outcome in the end, albeit a frustrating path to success. Sometimes a compromise is reached where the outcome isn’t quite the vindication offered by the proposed decision, but is better than the alternative the agency would prefer. It is sometimes possible to negotiate a slightly different outcome after non-adoption and avoid the need for further proceedings.
The hypothetical problems posed by a non-adoption can best be answered by qualified counsel. An attorney who has litigated many hearings will be in the best position to know when a proposed settlement or resolution is a good deal for the licensee. If the licensee might do better at hearing, then the attorney needs to know whether “doing better” is likely to be kicked back by the agency, or whether the settlement offer represents the best deal. An attorney in this position knows when the agency is being unreasonable, as they will have seen cases where the agency insisted on conditions that a judge ultimately did not order. Further, the attorney will have seen how the agency adopted a better result for the client than they were willing to offer in settlement. That’s the most important factor—if your attorney knows that the agency is likely to accept a proposed decision from a judge, then hearing is the best way to achieve the result you want.