law is the law concerning the exercise of authority by administrative
agencies and their relationship to the legislature, courts, and
State agencies have only those powers granted them by the legislature.
Duly promulgated agency rules have the same force and effect as
the most significant development in American law over the past 30 years
has been the explosion in law created, implemented, and enforced by administrative
agencies. The number of federal and state administrative regulations has
grown to impact almost every aspect of commercial life. As a practical
matter then, most lawyers will—regardless of their specific area of expertise—practice
‘‘administrative law’’ in some form. Properly understood, the practice
of administrative law goes beyond knowledge and application of specific
regulations to a particular situation. The effective practice of administrative
law requires an understanding of the basic attributes of administrative
agencies, the source of agency authority, how agencies legislate, and
how disputes between agencies and the regulated public are adjudicated.
This article introduces newcomers to administrative law with these concepts
and highlights some of the basic differences in practice and procedure
between administrative agencies and courts of law. It is intended to be
a broad overview and includes gen6ralizations that may not apply in all
is Administrative Law?
essence, ‘‘administrative law’’ is the law concerning the exercise of
authority by administrative agencies and their relationship to the legislature,
courts, and the public. The effective practice of administrative law therefore
requires: (1) an appreciation of the need for administrative agencies
to assume a legislative role when implementing broad (and often vague
or even contradictory) policy directives from the legislature, and (2)
an understanding of the constitutional, statutory, and judicial constraints
on this role. Administrative law also implicates the tension between the
judicial branch and adjudicative powers invested in administrative agencies,
which are part of the executive branch of government. Of course, the practice
of administrative law further requires knowledge and application of substantive
regulations governing an area of practice, but this aspect of the practice
is framed by the larger issues involving the scope and extent of administrative
is an Administrative Agency?
Michigan Constitution of 1963 authorizes and establishes the creation
of agencies as part of the executive branch of Michigan state government.2
of the Michigan Administrative Procedures Act (MAPA) defines an agency
broadly as any state ‘‘department, bureau, division, section, board, commission,
trustee, authority, or officer’’ that is ‘‘created by the constitution,
statute, or agency action.’’IPursuant to Const art 5, § 2 and the Executive
Organization Act of 1965,4
most state agencies are housed within several principal departments, subject
to reorganization by the governor through executive orders. Importantly,
agencies, boards, and so forth, created under the authority of local units
of government do not qualify as an ‘‘agency’’ under MAPA and are generally
not subject to the same requirements and constraints that apply to state
agencies. The nature and scope of the powers exercised by these local
governmental agencies are most often governed by various enabling acts
and other statutes governing the operation of counties, cities, etc.
Powers Do Agencies Have?
agencies have only those powers granted them by the legislature.5
However, courts liberally construe the specific powers granted to agencies.6
In determining the nature and extent of an agency’s authority, it is critical
to examine the statutes creating the agency or granting the agency authority
to implement the regulatory program at issue. In addition, it is important
to become familiar with MAPA, which delineates the general practice and
procedures applicable to all state agencies.
Agencies often possess a broad range of conferred powers, including investigatory
and enforcement authority.7
However, rulemaking and adjudication are two of the primary ways agencies
exercise their authority.
is how agencies exercise their legislative-type powers. Agency rulemaking
is governed by Chapter 3 of MAPA.8
MAPA’s rulemaking requirements are extensive. The process includes publication
of proposed rules in the Michigan Register, review by the Legislative
Services Bureau, Office of Regulatory Reform, and the Joint Committee
on Administrative Rules, public hearings, and a comment period. MAPA defines
‘‘rule’’ to mean ‘‘an agency regulation, statement, policy, ruling, or
instruction of general applicability that implements or applies law enforced
or administered by the agency, or that prescribes the organization, procedure,
or practice of the agency.’’9
Therefore, virtually any kind of agency standard or instruction of ‘‘general
applicability’’ to the public is a rule and must be promulgated in accordance
with MAPA’s rulemaking provisions to be valid and enforceable.10
Duly promulgated agency rules have the same force and effect as laws.
The rules of statutory construction apply to administrative rules.11
Violations of rules can be a crime, if the enabling statute so
provides. However, an agency cannot, by promulgation of a rule, itself
make an act or omission a crime.12
Michigan rules are codified in the Michigan Administrative Code of 1979.
Rules (and rule amendments) promulgated after 1979 are found in the Annual
Administrative Code Supplements (AACS) and the Michigan Register. (The
Michigan Register contains the most recent rule promulgations—promulgations
over the past 12–24 months—that have not yet been included in the AACS.)
Agency rules and the Michigan Register can also be found on the Internet
at the Office of Regulatory Reform website (www.state.mi.us/orr). It is
also important to be aware of federal regulations and policy guidance
that may be apFlied by state agencies depending on the regulatory program
One of the most common areas of dispute between agencies and the public
is whether an agency’s internal guidelines or policies must be promulgated
as a rule to be enforceable. MAPA recognizes that agencies need to develop
guidelines setting internal procedures the agency will follow and gives
requirements for establishing such guidelines.13
However, MAPA narrowly defines ‘‘guidelines’’ to mean only agency statements
and policies that, while binding the agency, do ‘‘not bind any other person.’’14
Any agency policies, procedures, or statements that are intended to, or
have the effect of, binding persons outside the agency are arguably ‘‘rules’’
and are unenforceable against such persons unless promulgated as rules.15
Practitioners of administrative law must always be wary of ‘‘secret rules’’16
that, while never subjected to public scrutiny, establish standards or
procedures that the agency routinely enforces against the public. Some
agencies have entire regulatory programs based on standards and procedures
that have never been promulgated as rules. These situations present the
difficult situation of dealing with an agency when the guidance the agency
relies upon in regulating your client is not readily accessible to you
or the public. However, these situations also present an avenue of legal
challenge to the agency position and a better chance of achieving a negotiated
resolution of the dispute at hand.
addition to legislative, or rulemaking, authority, among the most important
powers granted to agencies is adjudicative authority. The legislature
has invested many agencies with the power to adjudicate disputes arising
under a particular statute or under an agency’s own rules, including enforcement
matters. Providing agencies with adjudicative authority is motivated by
the sound policy of promoting uniform implementation of complicated regulations
and taking advantage of the expertise the agency has in dealing with the
subject matter within its jurisdiction.17
courts have facilitated this policy through the doctrines of ‘‘primary
jurisdiction’’ and ‘‘exhaustion.’’ The doctrine of primary jurisdiction
posits that, even in cases where a circuit court has concurrent jurisdiction
over a matter before an administrative agency, it will defer to the agency
to adjudicate the matter.18
Exhaustion is a jurisdictional barrier restraining a court from adjudicating
a claim before the aggrieved party has pursued all remedies available
before the pertinent agency.19
As a practical matter then, a person aggrieved by an agency licensing
decision, enforcement action, or other determination must use administrative
proceedings to remedy the situation if such proceedings are available.
In such cases, there is no right of judicial review until after completion
of the agency proceeding.
Newcomers to administrative law should be aware of the differences between
administrative proceedings and judicial proceedings. While agencies can
perform quasi-judicial functions and adjudicate the rights of individuals,
agencies are not courts of law and are constitutionally prohibited from
acting as such.20
Accordingly, administrative tribunals have no inherent equitable powers,
do not routinely address constitutional issues, or exercise other ‘‘purely
Unlike courts, agencies may not determine the validity of their enabling
statutes and promulgated rules when adjudicating disputes.
Many agencies have their own unique rules governing proceedings before
their administrative law judges or other decisionmakers. Practitioners
should first determine if there are such rules, and then familiarize themselves
with the MAPA contested case procedures described below. In terms of pre-hearing
procedure, practitioners must determine if the agency has subpoena power
and to what extent discovery is available. Most hearings before administrative
tribunals—even evidentiary hearings—tend to be less formal than hearings
However, this does not mean that they are any less important. The practitioner
must take care to prepare the administrative record for judicial review,
including preservation of any constitutional or evidentiary issues.
Chapter 4 of MAPA23
delineates the basic procedures to be followed in ‘‘contested cases’’
proceedings before administrative agencies—proceedings involving an evidentiary
hearing. These MAPA hearing procedures require application of the Michigan
Rules of Evidence to the extent practical and provide for pre-hearing
MAPA also provides for preparation of a Proposal for Decision (PFD) by
administrative law judges or other decisionmakers in cases where the decisionmaker
is not the ‘‘final’’ decisionmaker within the agency.25
(In hearings concerning a person’s eligibility for benefits, the presiding
officer usually is the final decisionmaker.)
The PFD must include the rationale for the decision and specific findings
of fact and law on each issue necessary to resolve the case. The purpose
of the PFD is to provide enough detail about the decision to facilitate
exceptions and a final decision.26
Following issuance of the PFD, the parties are given an opportunity to
file comments or ‘‘exceptions’’ to the PFD. The PFD is then forwarded
to the final decisionmaker (often the head of the agency or a designee)
for a final determination. The final decisionmaker may permit oral argument
before making a determination. Once made, the determination becomes final
agency action subject to judicial review.
avenues of judicial review of agency decisions, scope of review, and issues
arising under these topics are discussed in detail elsewhere in this issue.
Judicial review of final agency action is available in most cases. Judicial
review in contested cases may be governed by MAPA or the statute or statutes
applicable to the specific agency. Section 631 of the Revised Judicature
a third potential alternative for judicial review of final agency decisions
that do not qualify for review under MAPA and where review is not provided
for in statutes applicable to the specific agency. It is important to
carefully evaluate theso three potential avenues of review and focus on
the deadlines they establish for filing petitions for review.
to the astounding growth in administrative regulations over the past 30
years, virtually every area of law practice involves, to some extent,
the practice of administrative law. Almost all practitioners would be
well advised to familiarize themselves with the basic aspects of practice
involving administrative agencies and to develop an understanding of the
issues framing the relationship between agencies and the regulated public.
1. For a detailed treatment of
virtually every aspect of administrative law in Michigan, see LeDuc, Michigan
Administrative Law (1993).
2. Const 1963, art 5, § 2.
3. MCL 24.232.
4. MCL 16.101.
5. Union Carbide Corp v Public
Service Comm’n, 431 Mich 135; 428 NW2d 322 (1988).
6. McKibbin v Corp and Securities
Comm’n, 369 Mich 69; 119 NW2d 557 (1963).
7. Automotive Service Counsels
of Michigan v Secretary of State, 82 Mich App 574; 267 NW2d 698 (1978)
8. MCL 24.231–.264.
9. MCL 24.207.
10. Detroit-Base Coalition
for the Human Rights of the Handicapped v Dep’t of Social Services,
431 Mich 172; 428 NW2d 335 (1988).
11. MCL 24.232(1).
12. MCL 24.232(3).
13. MCL 24.224–.227.
14. MCL 24.203(6).
15. Detroit-Base Coalition
for the Human Rights of the Handicapped v Dep’t of Social Services, 431
Mich 172; 428 NW2d 335 (1988).
16. Greenfield Const Co v
Michigan Dep’t of State Highways, 402 Mich 172, 210; 261 NW2d 718,
17. LeDuc, Michigan Administrative
Law, § 10.01 p 5.
18. See e.g. Cherry Growers,
Inc v Agricultural Marketing and Bargaining Bd, 240 Mich App 153;
610 NW2d 613 (2000).
19. MCL 24.301; MSA 3.560(201);
See also IBM Corp v State Dep’t of Treasury, Revenue Division,
75 Mich App 604; 255 NW2d 702 (1977).
20. Const 1963, art 3, § 2;
see also Judges of the 74th Judicial District v Bay County, 385
Mich 710; 190 NW2d 219 (1971).
21. Dation v Ford Motor Co,
214 Mich 152; 22 NW2d 252 (1946).
22. Sponik v Detroit Police
Dep’t, 49 Mich App 162; 211 NW2d 674 (1973). (Agency hearings must
conform to dictates fundamental due process but need not duplicate a trial.)
23. MCL 24.271–.287.
24. MCL 24.275, .280(1)(d).
25. MCL 24.281.
26. See e.g., Tziahonas v
Dep’t of Licensing and Regulation, 143 Mich App 75; 372 NW2d 477 (1985).
27. MCL 600.631.