Fact-finding, Investigative, Licensing, and Rate-Fixing Powers | Powers of Administrative Agencies | ADMINISTRATIVE LAW

ADMINISTRATIVE LAW: POWERS OF ADMINISTRATIVE AGENCIES

Topic: Fact-finding, Investigative, Licensing, and Rate-Fixing Powers

Administrative agencies are empowered by law to perform specific duties and functions that fall under the executive branch of the government. They derive their authority from enabling statutes or executive orders that create them. One of their key functions is to implement and enforce laws through rulemaking, adjudication, and exercising various quasi-legislative and quasi-judicial powers. Under these, administrative agencies possess certain specialized powers, including fact-finding, investigative, licensing, and rate-fixing powers.

1. Fact-Finding Power

Definition: The fact-finding power of an administrative agency refers to its authority to gather and ascertain facts necessary to resolve issues or disputes. This power is integral to the agency’s quasi-judicial or investigative functions, where the agency gathers facts to inform decisions or recommendations.

Scope and Application:

• Fact-finding may occur in the context of adjudicative proceedings, regulatory enforcement, or investigations.
• It involves the collection of evidence, testimonies, documents, and other factual materials necessary for the agency to make informed decisions.
• Administrative agencies can compel the attendance of witnesses and the production of evidence through the issuance of subpoenas.

Judicial Review:

• Factual findings of administrative agencies, when supported by substantial evidence, are generally accorded respect by courts. They are often upheld on the principle that agencies are presumed to have expertise on technical matters within their jurisdiction.
• Substantial evidence rule: Courts will not re-examine factual findings unless there is a clear showing of arbitrariness, capriciousness, or grave abuse of discretion. The factual determination of administrative bodies will be accepted if supported by such evidence that a reasonable mind might accept as adequate to support a conclusion.

Case Law: In Ang Tibay v. CIR (1940), the Supreme Court emphasized that fact-finding in administrative cases must comply with procedural due process, including the right to a fair hearing, the right to be informed, and the opportunity to present one's case.

2. Investigative Power

Definition: Investigative powers grant administrative agencies the ability to conduct investigations on matters within their jurisdiction to ensure compliance with laws and regulations, or to determine violations.

Scope and Application:

• Administrative agencies can conduct inquiries and investigations motu proprio (on their own initiative) or upon complaints from the public or other agencies.
• They have the authority to gather evidence, summon witnesses, and examine relevant documents.
• Investigations may be non-adjudicatory (gathering information) or adjudicatory (focused on resolving a particular case).

Examples of Investigative Agencies:

• The Office of the Ombudsman has investigative powers over government officials and employees suspected of corrupt practices.
• The Securities and Exchange Commission (SEC) has the power to investigate violations of corporate and securities laws.
• The Energy Regulatory Commission (ERC) can investigate practices in the energy sector that might violate laws or regulations.

Judicial Review: Investigations typically lead to administrative actions or findings, but these are subject to judicial review. The courts may intervene if due process has been violated during the investigative process, such as arbitrary detentions or abusive summons.

Due Process Concerns: The investigative power of administrative agencies must always be exercised in a manner that respects the rights of individuals, particularly in adherence to the principle of due process. While investigations do not typically require the same level of procedural rigor as adjudications, basic fairness should be maintained.

3. Licensing Power

Definition: The licensing power refers to the authority of administrative agencies to grant, deny, renew, suspend, or revoke licenses, permits, and other forms of regulatory approval necessary for the conduct of certain activities or businesses.

Scope and Application:

• Licensing is an important regulatory mechanism used by agencies to ensure that individuals or entities meet certain standards before engaging in a regulated activity.
• The power includes setting qualifications, evaluating compliance with standards, and imposing conditions on licensees.
• Licensing is discretionary, but the discretion must not be abused or exercised arbitrarily.

Procedural Requirements:

• Administrative agencies are often required to conduct hearings or evaluations before issuing or denying licenses.
• Applicants must be given the opportunity to comply with legal requirements and present evidence if their license is in jeopardy of being revoked.
• The Administrative Code of 1987 governs the procedure for issuance, denial, or revocation of licenses.

Judicial Review:

• Courts can review licensing decisions to ensure there is no abuse of discretion, and that licenses are granted or revoked in accordance with law and procedure.
• Due Process: Licensing decisions must adhere to due process. A party whose license is denied or revoked must be given notice and the opportunity to be heard.

Case Law: In Solid Homes, Inc. v. Lasala (1996), the Supreme Court reiterated the principle that administrative bodies exercising licensing powers must observe substantive and procedural due process in revoking licenses.

4. Rate-Fixing Power

Definition: The rate-fixing power refers to the authority of certain administrative agencies to determine and prescribe the rates or fees charged by public utilities or other regulated industries.

Scope and Application:

• This power is often exercised by agencies to regulate prices and prevent abuses in industries where competition is limited or nonexistent (e.g., public utilities like electricity, water, telecommunications, etc.).
• Administrative agencies, such as the Energy Regulatory Commission (ERC), the Metropolitan Waterworks and Sewerage System (MWSS), or the Land Transportation Franchising and Regulatory Board (LTFRB), ensure that rates charged to consumers are reasonable, just, and equitable.

Standards for Rate-Fixing:

• The rates must be based on reasonable returns for the public utility while ensuring that consumers are not charged excessive fees.
• Rate-fixing generally requires a cost-benefit analysis or revenue requirements study to balance the interests of both the utility and the public.
• A rate must not be confiscatory (too low) nor excessively burdensome (too high).

Procedure:

• Public hearings are typically required before rate increases can be approved. Stakeholders, including consumers, are given the opportunity to present evidence or opposition.
• In rate-fixing, agencies are also required to publish their decisions and findings to provide transparency and give affected parties the chance to appeal.

Judicial Review:

• Rate-fixing decisions can be challenged in court on the grounds of being confiscatory, unreasonable, or lacking in due process. Courts, however, typically afford agencies a wide latitude in rate-fixing decisions due to the technical nature of such determinations.
• Substantial evidence: As in fact-finding, the courts apply the substantial evidence rule in reviewing the rate-fixing decisions of administrative bodies.

Case Law: In Philippine Airlines, Inc. v. Civil Aeronautics Board (1992), the Supreme Court affirmed the rate-fixing power of the Civil Aeronautics Board, provided that it adheres to procedural and substantive due process.

Conclusion

Administrative agencies play a crucial role in governance through their fact-finding, investigative, licensing, and rate-fixing powers. These powers enable agencies to regulate, enforce laws, and ensure compliance within specific industries or areas of public interest. However, their exercise is not unfettered. These powers must be conducted in adherence to the principles of due process, fairness, and substantial evidence, and are always subject to judicial review to ensure that the agencies do not overreach or abuse their authority. Courts typically grant a certain level of deference to administrative bodies, recognizing their technical expertise, but will intervene in cases where legal standards are not met.

Administrative Res Judicata | Quasi-Judicial or Adjudicatory Power | Powers of Administrative Agencies | ADMINISTRATIVE LAW

Administrative Res Judicata: Quasi-Judicial Power in Administrative Agencies

1. Introduction to Administrative Res Judicata

Administrative Res Judicata refers to the application of the principle of res judicata in administrative proceedings. Res judicata, a concept traditionally rooted in judicial law, ensures finality in legal disputes by preventing the relitigation of matters already adjudicated. In administrative law, this principle is applied to quasi-judicial decisions rendered by administrative agencies, provided that certain requirements are met.

2. Quasi-Judicial or Adjudicatory Power of Administrative Agencies

Quasi-judicial power refers to the authority of administrative agencies to adjudicate disputes, make findings of fact, apply legal standards, and render decisions in a manner akin to courts. Unlike their rule-making (quasi-legislative) function, when agencies exercise quasi-judicial power, they resolve disputes between private parties or between private parties and the government. The decisions rendered by administrative agencies, in this regard, may be subject to the doctrine of res judicata.

3. Application of Res Judicata in Administrative Law

For the principle of res judicata to apply in administrative cases, the following requisites must be met:

• Finality of Judgment: The decision or order of the administrative agency must be final and executory. It should not be subject to further administrative or judicial review, except on extraordinary grounds such as grave abuse of discretion.
• Jurisdiction: The administrative agency must have acted within its legal authority or jurisdiction when rendering the decision.
• Identity of Parties: The parties involved in the earlier administrative proceeding and the subsequent case must be the same or their privies.
• Identity of Cause of Action: The cause of action, or the set of facts that gives rise to the dispute, must be the same in both proceedings.
• Identity of Issues: The issues in the subsequent case must have been directly addressed and decided in the earlier administrative proceeding.

If these elements are satisfied, the doctrine of res judicata precludes the re-litigation of the same issues in a new case. It promotes the finality of administrative decisions, efficiency in the administrative process, and stability in legal relationships.

4. Types of Res Judicata in Administrative Proceedings

The application of res judicata in administrative law can take two forms:

• Bar by Prior Judgment (Res Judicata in the Strict Sense): This prevents the re-litigation of a claim or cause of action that has been previously decided by an administrative body. If a final decision has been rendered on the merits of the case, the same parties are precluded from bringing a new case based on the same cause of action.

• Conclusive Bar (Collateral Estoppel): Even if the second case is based on a different cause of action, res judicata bars the re-litigation of specific issues that were already adjudicated in a previous proceeding between the same parties. This means that once a particular issue has been determined by an administrative agency, it cannot be contested in a subsequent proceeding, even if the cause of action differs.

5. Limitations on the Application of Res Judicata

Although the principle of res judicata is applied in administrative proceedings, it is not applied as rigidly as in judicial cases. The following are some recognized limitations:

• Public Interest Consideration: Administrative proceedings are often driven by public interest. Hence, where public policy or the interest of justice demands, the strict application of res judicata may be relaxed.
• Discretion of Administrative Agencies: Courts typically afford deference to the expertise and discretion of administrative agencies, especially when the subject matter requires specialized knowledge. As such, in certain cases, agencies may reopen a matter if new facts arise that were not previously available or if there is a change in law or policy.
• Non-Judicial Nature of Certain Proceedings: Not all administrative determinations are considered quasi-judicial. Some administrative acts are purely ministerial, and res judicata would not apply in those instances.

6. Judicial Review of Administrative Res Judicata

Decisions rendered by administrative agencies under the doctrine of res judicata may still be subject to judicial review under certain conditions. Courts may step in to correct:

• Grave Abuse of Discretion: When the administrative agency is shown to have acted beyond its authority or with arbitrariness, courts may annul the decision even if res judicata is invoked.
• Violation of Due Process: The denial of due process in administrative proceedings negates the application of res judicata. Parties must be given the opportunity to be heard and present evidence before res judicata can operate.
• Fraud, Mistake, or Misrepresentation: A decision that was obtained through fraud or serious error may be set aside, thus precluding the application of res judicata.

7. Leading Philippine Jurisprudence on Administrative Res Judicata

The Supreme Court of the Philippines has addressed the issue of res judicata in administrative cases in several landmark decisions. Among these are:

• Republic v. Oleta (G.R. No. 117513, July 17, 1997): The Court held that decisions of administrative bodies can attain finality and be covered by res judicata, similar to judicial decisions, provided that the requirements of jurisdiction, finality, and identity of issues and parties are met.

• GSIS v. Court of Appeals (G.R. No. 121608, November 16, 2001): In this case, the Supreme Court emphasized that the principle of res judicata applies to administrative agencies exercising quasi-judicial powers, especially when a final decision on the merits has been rendered.

• Ang Tibay v. CIR (G.R. No. L-46496, February 27, 1940): Although not directly addressing res judicata, this case is foundational in establishing the standards of due process in administrative proceedings. Without the observance of these principles, res judicata cannot apply.

8. Policy Considerations in Administrative Res Judicata

The application of res judicata in administrative cases balances the need for finality in administrative decisions with the flexibility needed in administrative adjudication. The policy considerations include:

• Finality and Stability: Like in court proceedings, the application of res judicata in administrative adjudication aims to prevent endless litigation and fosters stability in administrative processes and decisions.
• Efficiency: Res judicata promotes administrative efficiency by ensuring that once a matter is decided, it is not continuously re-litigated, thus conserving resources.
• Flexibility and Justice: Despite its finality, the application of res judicata in administrative cases recognizes that administrative agencies, unlike courts, operate in a more flexible environment, where the correction of errors, pursuit of public interest, and consideration of new evidence can sometimes justify reopening a case.

9. Conclusion

The principle of administrative res judicata, when properly applied, plays a critical role in upholding the finality of decisions in the administrative adjudication process. However, given the unique nature of administrative law—where public policy and specialized agency functions are often at play—the application of this principle is adapted with some flexibility compared to judicial proceedings. It is essential that administrative bodies exercise their quasi-judicial functions in observance of due process and within the scope of their authority, as these elements are prerequisites to the successful application of res judicata.

Administrative Appeal and Review | Quasi-Judicial or Adjudicatory Power | Powers of Administrative Agencies | ADMINISTRATIVE LAW

XIII. ADMINISTRATIVE LAW

C. Powers of Administrative Agencies

2. Quasi-Judicial or Adjudicatory Power

b. Administrative Appeal and Review

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Overview of Administrative Appeal and Review

Administrative agencies in the Philippines are vested with quasi-judicial or adjudicatory powers. These powers allow them to resolve disputes, hear cases, and make decisions within their specific areas of expertise. However, their decisions are subject to administrative appeal and review, which is a process through which a higher administrative authority or body re-examines the decisions of a lower administrative body or official. The objective is to ensure the correctness and legality of the decisions rendered.

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1. Administrative Appeal

a. Definition and Nature

Administrative appeal refers to the procedure by which a party aggrieved by a decision of an administrative agency may seek redress by appealing to a higher administrative authority. It is a process of intra-agency review, meaning the appeal stays within the administrative structure, without immediately resorting to judicial courts.

b. Who May Appeal

Typically, any party to the case who is adversely affected by the decision of the administrative agency may appeal. This includes:

• Parties to the original proceedings (complainant or respondent),
• Any other person who may have been allowed to intervene in the case, or
• A third-party whose rights may be directly affected by the decision.

c. Authority to Appeal

• The governing statutes or regulations of the agency involved usually establish the administrative appellate process.
• The power to appeal depends on the enabling law of the administrative body and the agency's own procedural rules.

d. When an Appeal is Available

The availability of an appeal depends on the agency's enabling act or specific law governing the agency. Typically, appeals must be filed within a prescribed period, which may vary across agencies. Failure to file within this period may result in the dismissal of the appeal.

e. Nature of Administrative Appeals

Administrative appeals are generally non-litigious and informal, but they are not devoid of legal rules and procedures. Some characteristics include:

• Ex parte nature: Administrative appeals are often decided without formal hearings.
• De novo nature: The appellate authority may conduct a full review of both factual and legal issues.
• Limited to the record: In some instances, the appellate authority reviews the case based on the evidence presented in the initial adjudication.

f. Grounds for Appeal

Common grounds for appeal in administrative adjudications include:

• Errors of fact or law,
• Grave abuse of discretion,
• Decisions that are arbitrary or capricious,
• Violations of due process,
• Misapplication or misinterpretation of laws.

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2. Administrative Review

a. Definition and Nature

Administrative review is broader than an appeal and refers to the process wherein a superior administrative body re-examines, motu proprio or upon request, the decisions of a subordinate agency. The review may occur as part of the agency's internal mechanism for ensuring the uniformity and correctness of its decisions.

b. Types of Review

• Mandatory Review: Some decisions are automatically subject to review by a higher authority, such as those involving significant public interest.
• Discretionary Review: In other cases, the review is discretionary and depends on whether the reviewing authority finds merit in examining the decision further.

c. Scope of Review

Administrative review can cover:

• Factual findings: Higher authorities may re-evaluate evidence and ascertain if facts were correctly determined.
• Legal conclusions: It can involve a re-assessment of the legal principles applied by the lower administrative body.
• Procedural matters: Administrative reviews may also consider whether due process was followed.

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3. Hierarchy of Administrative Appeals and Review

a. Appeal within the Agency

Decisions of lower administrative officials or bodies can often be appealed to their respective higher offices or boards within the same agency. For example:

• The decision of a Regional Director of an administrative agency may be appealed to the Secretary or a higher administrative tribunal within the same department.

b. Inter-Agency Appeals

Some administrative decisions may be appealed to another administrative body, such as:

• Civil Service Commission (CSC) for issues related to civil service employees,
• Commission on Audit (COA) for issues relating to government expenditures.

c. Administrative Courts or Tribunals

Certain specialized tribunals serve as appellate bodies for administrative cases. For instance:

• National Labor Relations Commission (NLRC) for labor disputes,
• Board of Energy (now Energy Regulatory Commission) for energy-related disputes.

d. Judicial Review as a Last Resort

Once all administrative remedies have been exhausted, aggrieved parties may elevate the matter to the judicial courts via a petition for review. Under the doctrine of exhaustion of administrative remedies, courts will only entertain a case if the aggrieved party has fully pursued all administrative appeals or reviews available.

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4. Doctrine of Exhaustion of Administrative Remedies

a. Principle

The doctrine of exhaustion of administrative remedies mandates that before a party can seek judicial intervention, they must first exhaust all remedies within the administrative framework. This doctrine is based on the following justifications:

• To give administrative agencies the opportunity to correct errors,
• To allow agencies to apply their expertise,
• To lessen the burden on courts,
• To promote judicial economy.

b. Exceptions to the Doctrine

There are recognized exceptions to the doctrine, including:

• If the issue involves a purely legal question, the party may go directly to the courts.
• If irreparable injury would result from pursuing administrative remedies.
• If there is grave abuse of discretion on the part of the administrative agency.
• If the administrative remedies are inadequate or futile.
• When the issue raised involves a constitutional question.

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5. Judicial Review of Administrative Decisions

a. Nature of Judicial Review

Once the administrative appeal process is exhausted, judicial review of administrative decisions may be sought. The courts' review is usually limited to:

• Questions of law rather than factual issues.
• Determining whether the agency acted within its jurisdiction or authority.
• Examining whether there was grave abuse of discretion amounting to lack or excess of jurisdiction.

b. Standards of Review

Courts generally accord great deference to the factual findings of administrative agencies, given their expertise in their respective fields. The court will not interfere with the agency's decisions unless:

• The decision is tainted with grave abuse of discretion,
• The agency violated the Constitution or acted beyond its powers,
• There is no substantial evidence to support the decision.

c. Modes of Judicial Review

Judicial review of administrative decisions is typically initiated through the filing of a:

• Petition for Certiorari under Rule 65 of the Rules of Court, in cases involving grave abuse of discretion,
• Petition for Review under Rule 43, which covers appeals from quasi-judicial agencies to the Court of Appeals.

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Conclusion

The administrative appeal and review process is essential for ensuring that administrative agencies exercise their quasi-judicial powers fairly, correctly, and within the bounds of their authority. By providing a system for intra-agency review and judicial oversight, this mechanism helps safeguard the rights of parties while promoting the efficient and expert resolution of administrative disputes. However, the appeal process is not open-ended; aggrieved parties must follow procedural rules, respect administrative hierarchies, and exhaust remedies before seeking judicial intervention.

Administrative Due Process | Quasi-Judicial or Adjudicatory Power | Powers of Administrative Agencies | ADMINISTRATIVE LAW

POLITICAL LAW AND PUBLIC INTERNATIONAL LAW > XIII. ADMINISTRATIVE LAW > C. Powers of Administrative Agencies > 2. Quasi-Judicial or Adjudicatory Power > a. Administrative Due Process

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Introduction to Administrative Due Process

Administrative due process refers to the procedural standards and protections afforded to individuals or entities in proceedings before administrative agencies exercising quasi-judicial or adjudicatory functions. These agencies are tasked with resolving disputes, interpreting laws, and issuing decisions affecting rights and obligations. Although these agencies do not operate like traditional courts, they are still required to observe fundamental principles of fairness and justice as enshrined in the Constitution.

In the Philippines, due process in administrative proceedings finds its basis in Article III, Section 1 of the 1987 Constitution, which states:

"No person shall be deprived of life, liberty, or property without due process of law, nor shall any person be denied the equal protection of the laws."

Administrative due process ensures that individuals or entities involved in such proceedings are provided with an opportunity to be heard and defend themselves before an impartial tribunal.

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1. Nature of Quasi-Judicial or Adjudicatory Power of Administrative Agencies

Quasi-judicial power is the authority granted to administrative agencies to resolve disputes, make findings of fact, apply legal standards, and issue binding decisions or orders. When exercising these powers, agencies effectively perform functions similar to judicial bodies, hence the term "quasi-judicial."

Key Elements of Quasi-Judicial Power

• Adjudication: Agencies determine rights, obligations, and liabilities through a formal or informal hearing process.
• Issuance of Orders: Agencies can issue enforceable orders, decisions, or rulings that affect the parties involved.
• Findings of Fact: Administrative agencies are tasked with determining the facts of the case based on evidence presented during the proceedings.
• Application of Law: Agencies apply relevant laws, rules, and regulations to the facts of the case to arrive at a decision.

2. Requirements of Administrative Due Process

In the exercise of their quasi-judicial powers, administrative agencies must adhere to the requirements of administrative due process. The concept is rooted in both substantive and procedural due process principles:

Substantive Due Process:

Substantive due process ensures that the actions and decisions of administrative agencies are fair, reasonable, and not arbitrary. An agency's decision must be grounded on a legitimate government interest, supported by facts, and must not violate constitutional rights.

Procedural Due Process:

Procedural due process requires compliance with the following essential requisites:

1. Right to Notice:

   • The party involved must be informed of the nature and cause of the accusation or action being taken against them.
   • Notice must be clear and specific, indicating the time, place, and nature of the hearing or proceeding.
   • Proper service of notice is required to ensure that the party is given a reasonable opportunity to prepare a defense or respond.

2. Opportunity to be Heard:

   • The right to be heard is fundamental in administrative proceedings. The affected party must be given a fair chance to present their case, submit evidence, and argue their position.
   • In administrative hearings, the right to be heard does not necessarily require a full-blown trial-type proceeding. What is required is a reasonable opportunity to present one’s case.
   • Representation by counsel is generally allowed, but in some informal administrative proceedings, parties may represent themselves.

3. Impartial Tribunal:

   • The decision-maker must be impartial and free from bias or conflict of interest. The tribunal must evaluate the evidence and arguments presented based on merits and law.
   • A biased or prejudiced decision-maker violates the requirement of fairness under due process.
   • Administrative officers or tribunals must adhere to the principle of "cold neutrality of an impartial judge."

4. Consideration of Evidence:

   • The administrative agency must base its decision on substantial evidence presented during the proceedings. "Substantial evidence" refers to such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.
   • Decisions must not be based on mere conjecture or arbitrary considerations.

5. Decision Rendered on the Merits:

   • The decision of the administrative agency must be based on the merits of the case, as established by the facts and the law.
   • The decision must clearly state the findings of fact, applicable law, and the reasons for the conclusion reached by the agency.
   • The decision must also be final, subject to any administrative appeals or judicial review, as provided by law.

3. The Due Process Standard in Administrative Proceedings

The standard of due process in administrative proceedings is more flexible and less formal than in judicial proceedings. In the case of Ang Tibay v. Court of Industrial Relations (G.R. No. 46496, February 27, 1940), the Philippine Supreme Court set forth the minimum due process standards applicable to administrative bodies, which have become known as the Ang Tibay Doctrine. The essential requirements of due process in administrative proceedings as articulated in Ang Tibay are:

1. The right to a hearing: This includes the right to present one’s case and submit evidence.
2. The tribunal must consider the evidence presented: The tribunal must evaluate and weigh the evidence submitted.
3. The decision must be supported by evidence: The ruling must be grounded on substantial evidence that reasonably supports the decision.
4. The decision must be rendered by an impartial tribunal: A neutral and unbiased tribunal must decide the case.
5. There must be some evidence to support the tribunal’s findings: The decision should not be arbitrary but based on factual evidence presented in the case.
6. The decision must be clear and definitive: The parties should be informed of the specific findings and rationale of the tribunal.
7. The tribunal should act within its jurisdiction and authority: Administrative agencies must act within the scope of their granted powers.

4. Doctrine of Exhaustion of Administrative Remedies

Before a party can seek judicial intervention, the doctrine of exhaustion of administrative remedies requires that all administrative processes must first be completed. This doctrine upholds the principle that agencies should be given the opportunity to correct any errors or address grievances internally before court intervention is sought. Exceptions to this doctrine include cases where:

• A pure question of law is involved.
• The administrative remedy is inadequate or insufficient.
• The agency acts with patent illegality or beyond its jurisdiction.
• Immediate judicial intervention is necessary to prevent irreparable injury.
• There is unreasonable delay or the administrative remedy is futile.

Failure to comply with the exhaustion of administrative remedies may result in the dismissal of the case for being premature.

5. Judicial Review of Administrative Decisions

Administrative agencies’ quasi-judicial decisions are generally subject to judicial review by the courts. However, such review is limited, and courts typically do not re-examine the factual findings of administrative agencies, provided that substantial evidence supports the findings. The courts primarily examine whether:

• Due process was observed.
• The decision was made within the scope of the agency’s authority.
• The decision was supported by substantial evidence.
• The decision was not tainted by grave abuse of discretion.

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Conclusion

Administrative due process ensures fairness and protection of rights in the exercise of quasi-judicial powers by administrative agencies. While administrative proceedings are more flexible than judicial proceedings, the fundamental requirements of notice, the opportunity to be heard, an impartial tribunal, and a decision based on evidence remain essential components. These principles ensure that the rights of individuals are protected while allowing administrative agencies to effectively perform their adjudicatory functions.

Requisites for Validity | Quasi-Legislative or Rule-Making Power | Powers of Administrative Agencies | ADMINISTRATIVE LAW

Quasi-Legislative or Rule-Making Power of Administrative Agencies: Requisites for Validity

In administrative law, the quasi-legislative power, also known as the rule-making power, is one of the inherent functions of administrative agencies. This power enables them to promulgate rules and regulations to implement or interpret statutes or carry out the objectives of laws. These rules have the force and effect of law, provided they meet certain requisites for validity.

Requisites for Validity of Administrative Rules and Regulations

For rules and regulations issued by administrative agencies to be considered valid and enforceable, they must meet the following essential requisites:

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1. The Rule Must Be Within the Scope of Authority Delegated by Law

Administrative agencies derive their power to issue rules and regulations from enabling statutes. The following conditions must be met:

• Express Delegation: The enabling law must expressly delegate the power to the administrative agency to promulgate rules and regulations.
• Within Scope of Authority: The rules and regulations must be consistent with and fall within the scope of authority granted by the enabling law. They should not go beyond or conflict with the legislative intent.

This means the agency cannot issue rules and regulations on matters that exceed its powers as delegated by law. Any rules issued outside of this scope are considered ultra vires (beyond authority) and are invalid.

Case Example: In People v. Maceren (1977), the Supreme Court struck down a rule issued by the Fisheries Commissioner, ruling that it was beyond the authority delegated to the agency under the Fisheries Law.

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2. The Rule Must Be Promulgated in Accordance with the Procedure Prescribed by Law

For administrative rules to be valid, they must follow the proper procedural requirements as mandated by law. This includes:

• Publication: Rules must be published in the Official Gazette or in a newspaper of general circulation. This is in accordance with Executive Order No. 200 (1987), which states that laws and rules must be published before they take effect.

  Case Example:
  In Tañada v. Tuvera (1986), the Supreme Court held that laws and administrative rules, to be effective, must be published as a means of ensuring public knowledge.

• Notice and Hearing (if required): While not all rules require a prior hearing, substantive rules that impose penalties or affect rights may require notice and the opportunity for affected parties to be heard. However, interpretative rules, which merely clarify the meaning of a statute, typically do not require a hearing.

  Administrative Code of 1987: Section 9 of the Administrative Code provides that every rule-making process involving substantive rules must involve prior notice and public participation, especially when the rule may adversely affect individuals.

• Filing: In certain cases, the rules must be filed with the University of the Philippines Law Center, as required by the Administrative Code.

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3. The Rule Must Be Reasonable and Not Arbitrary or Oppressive

Rules and regulations must pass the test of reasonableness. This means that they must be rationally related to the purpose of the law and must not be arbitrary, capricious, or oppressive. They must not impose an undue burden on those affected or be disproportionate to the goal they intend to achieve.

• Substantial Compliance: The regulations must substantially comply with the purposes for which they were enacted. They should be fair, not oppressive, and within reasonable limits.

  Case Example:
  In Paat v. Court of Appeals (1997), the Supreme Court struck down an administrative regulation that excessively burdened citizens by requiring multiple permits for the same activity, stating that it was unreasonable and violated the principle of simplicity in regulation.

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4. The Rule Must Not Contradict the Law

Administrative regulations are meant to interpret or implement the law, and as such, they cannot conflict with the law they are meant to enforce. This includes the Constitution, statutes, and judicial decisions.

• Consistency with Law: The rule must not modify, amend, or be inconsistent with the statute it implements. If there is a conflict between the rule and the statute, the statute prevails.

  Case Example:
  In Commissioner of Internal Revenue v. Court of Appeals (1996), a revenue regulation issued by the Bureau of Internal Revenue was declared invalid for being inconsistent with the National Internal Revenue Code.

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5. The Rule Must Be Clear and Definite

For a rule or regulation to be valid, it must be clear, definite, and understandable. Vague rules can lead to confusion and arbitrary enforcement, violating due process rights.

• Doctrine of Void-for-Vagueness: If a rule is so vague that persons of common intelligence must guess at its meaning and differ in its application, it may be declared void for vagueness. Rules must be sufficiently precise to provide fair notice of what is required or prohibited.

  Case Example:
  In Estrada v. Sandiganbayan (2001), the Supreme Court applied the doctrine of void-for-vagueness when it found that certain provisions of the Anti-Plunder Law were so unclear that they failed to provide adequate notice of the conduct that was being prohibited.

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6. The Rule Must Serve the Public Interest

Administrative rules must promote the public good or welfare. This requisite is aligned with the general welfare clause, which mandates that government actions, including administrative rules, should be in the public interest and not merely serve a select group or private interests.

• Public Welfare: The rule must serve a legitimate public interest and should not only protect private or narrow interests. The regulation must benefit the common good.

  Case Example:
  In Agustin v. Edu (1979), a Land Transportation Commission regulation requiring motor vehicles to have early warning devices was upheld because it promoted public safety, which served the general welfare.

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Classification of Administrative Rules

While understanding the requisites for validity, it is important to distinguish between substantive rules and interpretative rules:

• Substantive Rules: These are rules that create, modify, or affect a legal right. These rules are subject to the full range of procedural requirements (e.g., notice and hearing).

• Interpretative Rules: These clarify or explain existing statutes. These are generally not required to undergo the notice and hearing process because they do not impose new obligations but merely explain the existing ones.

• Legislative Rules: These have the force and effect of law. They usually require compliance with the procedural due process requisites, such as publication and public participation.

• Internal Regulations: These are meant for the internal administration of an agency and usually do not require publication or compliance with procedural due process rules.

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Judicial Review of Administrative Rules

The validity of administrative rules and regulations is subject to judicial review. Courts can declare a rule invalid if it fails to meet any of the requisites for validity, particularly if:

• It is ultra vires (beyond the powers granted by law);
• It is unreasonable or oppressive;
• It was issued without proper observance of procedural requirements;
• It contradicts the law or the Constitution; or
• It is vague and unclear.

Courts generally accord administrative agencies some level of deference in the interpretation of their enabling statutes. However, this deference is not absolute, and courts will scrutinize administrative rules closely when they affect substantive rights or involve constitutional issues.

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Conclusion

The exercise of quasi-legislative or rule-making power by administrative agencies is essential to the implementation of laws. However, to ensure that this power is exercised in a manner consistent with legal principles and public interest, administrative rules and regulations must meet the requisites for validity, which include authority, procedure, reasonableness, consistency with law, clarity, and public interest. Failure to comply with any of these requisites may render the rules invalid and subject to judicial challenge.

Kinds of Administrative Rules and Regulations | Quasi-Legislative or Rule-Making Power | Powers of Administrative Agencies | ADMINISTRATIVE LAW

POLITICAL LAW AND PUBLIC INTERNATIONAL LAW
XIII. ADMINISTRATIVE LAW
C. Powers of Administrative Agencies
1. Quasi-Legislative or Rule-Making Power
a. Kinds of Administrative Rules and Regulations

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Administrative agencies in the Philippines possess powers and duties primarily delegated to them by statutes. Among these powers is the quasi-legislative function or rule-making power. This allows agencies to issue rules and regulations that have the force and effect of law, provided they are within the bounds of the authority granted to them by the enabling statute.

1. Quasi-Legislative or Rule-Making Power

Quasi-legislative power is the authority delegated to administrative agencies to promulgate rules and regulations necessary to implement the law. This is essential for the proper functioning of agencies because it allows them to fill in the details and operationalize legislative intent.

Rule-making is necessary for administrative bodies to perform their functions effectively because statutes enacted by Congress are often broad and general. Administrative rules supplement these statutes by providing the specifics necessary for implementation.

Administrative rules have the same binding force as laws enacted by Congress if they meet the following requisites:

1. The rule must be within the scope of the statutory authority conferred upon the administrative agency – It cannot go beyond the law it seeks to implement.
2. It must be reasonable and consistent with the law – Rules cannot be arbitrary or capricious, and they must uphold the purposes and objectives of the enabling statute.
3. Due process in the promulgation of rules must be observed – This includes public notice and hearing when necessary.

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2. Kinds of Administrative Rules and Regulations

There are several types of administrative rules and regulations that agencies can issue, depending on their nature, scope, and effect. These can be categorized into the following:

a. Legislative Rules (Substantive Rules)

Legislative rules are issued by administrative agencies pursuant to the delegation of legislative power. These rules have the force and effect of law because they are intended to implement, enforce, or interpret the law.

Characteristics:

• They bind the public and the government.
• These rules are enforceable in the same way as a statute.
• They usually require notice and public hearing prior to promulgation (in accordance with the Administrative Code or statutes such as the Administrative Procedure Act).
• Example: The implementing rules and regulations (IRRs) of statutes issued by government agencies.

b. Interpretative Rules

Interpretative rules are issued by an administrative agency to clarify or interpret the provisions of a statute without adding any new provisions. Unlike legislative rules, interpretative rules do not have the force of law. Instead, they provide guidance on how the agency understands or applies the law.

Characteristics:

• No need for notice and hearing in their promulgation.
• These rules merely state what the agency believes the law means or how it applies.
• They are not binding on the courts, although they may be given persuasive effect.

Example: Circulars or advisory opinions issued by the Bureau of Internal Revenue (BIR) to clarify provisions of the Tax Code.

c. Procedural Rules

Procedural rules are issued by administrative agencies to regulate the internal procedures or the process by which agencies conduct their affairs, including how they handle administrative cases.

Characteristics:

• These rules govern the agency’s methods of operation or decision-making process.
• They do not affect the substantive rights of the parties.
• Procedural rules are generally binding and enforceable as long as they are reasonable and consistent with due process.

Example: Rules of procedure issued by the Civil Service Commission (CSC) in handling administrative complaints against government employees.

d. Informal or Non-Legislative Rules

These are rules or guidelines issued by administrative agencies that do not have the force and effect of law. They include memoranda, bulletins, and press releases, which are used to inform the public or guide the agency’s employees but are not binding.

Characteristics:

• These are not strictly enforceable against the public.
• They are often used for internal guidance within the agency or for educational purposes.

Example: Memoranda from the Department of Health (DOH) advising hospitals on best practices for public health.

e. Hybrid Rules

Hybrid rules combine both legislative and interpretative functions. These rules, while not having the full force of law, may be used to fill gaps in the statutory framework and to clarify specific statutory provisions. They occupy a middle ground between legislative and interpretative rules.

Example: Guidelines issued by the Commission on Elections (COMELEC) to implement portions of the Omnibus Election Code that require interpretation.

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3. Limits on Quasi-Legislative Power

The rule-making power of administrative agencies is not unlimited. Several legal doctrines and principles control the exercise of quasi-legislative authority:

a. Doctrine of Subordinate Legislation

Administrative agencies cannot enact rules that go beyond the scope of the legislative mandate. The rule-making power is always subordinate to the statute, and rules must be confined to what the law allows. Agencies must avoid ultra vires (beyond the powers) regulations.

b. Non-Delegation Doctrine

While Congress may delegate rule-making authority to administrative agencies, this delegation must be done with clear standards to guide the agency. The law delegating the authority must specify the scope and limits of the power delegated. Otherwise, it may violate the non-delegation doctrine enshrined in the Constitution.

c. Due Process

The issuance of administrative rules, especially those that affect the rights of individuals or entities, must comply with procedural due process. The Administrative Code of 1987 and the Administrative Procedure Act (R.A. No. 386) prescribe the procedures that must be followed for valid rule-making, including the publication of proposed rules, providing an opportunity for comment, and holding public hearings when necessary.

d. Judicial Review of Rules and Regulations

Administrative rules are subject to judicial review. Courts can invalidate administrative rules if they are found to be:

• Unconstitutional – Rules must comply with the provisions of the Constitution.
• Ultra Vires – Rules that exceed the scope of the authority granted by the enabling statute will be struck down.
• Arbitrary or Capricious – Rules that are not based on substantial evidence, are unreasonable, or are promulgated without adequate justification can be invalidated.

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4. Conclusion

The rule-making power of administrative agencies, a vital part of the Philippine administrative law system, ensures the effective implementation of laws enacted by Congress. By issuing rules and regulations, administrative agencies provide detailed frameworks that are necessary for the proper operation of government policies. However, this power is carefully circumscribed by legal principles that ensure that agencies act within the bounds of their statutory mandates and respect the rights of individuals and entities. Quasi-legislative authority must always align with legislative intent, constitutional norms, and the principles of fairness and due process.

Powers of Administrative Agencies | ADMINISTRATIVE LAW

Powers of Administrative Agencies

Administrative Law is the body of law that governs the activities of administrative agencies of government. Administrative agencies are delegated powers to regulate various areas of public and private interest. These agencies have quasi-legislative, quasi-judicial, and executive powers. Their functions and powers must conform to the Constitution and statutes, and their actions are subject to judicial review to ensure compliance with the law.

In the Philippines, administrative agencies play a critical role in governance by carrying out the policies and laws enacted by the legislative branch. The scope and extent of their powers are essential aspects of administrative law.

A. General Framework

The powers of administrative agencies are derived from:

1. Constitution – The general power of the Executive to enforce laws is constitutionally mandated.
2. Statutes – Specific powers are granted to administrative agencies by enabling statutes or legislation.
3. Delegated Powers – Congress may delegate powers to administrative agencies as long as these powers comply with the standards set forth by law.

Administrative agencies must operate within their jurisdiction and cannot exceed the authority granted by law. They also must conform to the principle of non-delegation of powers, although exceptions to this principle exist, especially for administrative discretion and specialized areas.

B. Classification of Powers

The powers of administrative agencies can be categorized into three main types: Quasi-Legislative, Quasi-Judicial, and Executive Powers.

1. Quasi-Legislative (Rule-Making) Power

This refers to the authority of administrative agencies to issue rules and regulations with the force of law. These rules are designed to implement the policy intent of laws enacted by Congress.

• Sources of Rule-Making Power:

  • Enabling statute: Legislation grants agencies the authority to create rules and regulations necessary for the enforcement of laws.
  • Constitutional Limitations: Agencies cannot legislate; they can only fill in the details within the boundaries of the law.

• Requisites for Validity of Administrative Rules:

  1. The rule must be within the scope of the agency’s authority as provided by its enabling law.
  2. It must be promulgated following the required procedure, typically including publication and a period for public comment (the Doctrine of Publication and Notice).
  3. It must be reasonable and consistent with the Constitution and other laws.

• Types of Administrative Rules:

  • Substantive Rules: These are rules that have the force and effect of law and create rights or impose duties.
  • Interpretative Rules: These clarify or explain statutory provisions and do not have the force of law.
  • Procedural Rules: These regulate the internal procedures of the administrative agency.

• Judicial Review of Quasi-Legislative Actions: Courts may review the actions of administrative agencies if there is a question of grave abuse of discretion, illegality, or unconstitutionality. However, courts generally defer to the expertise of administrative agencies under the Doctrine of Primary Jurisdiction and Doctrine of Exhaustion of Administrative Remedies.

2. Quasi-Judicial Power (Adjudicatory Power)

Administrative agencies are granted the authority to hear and decide cases, often in specialized fields. These powers resemble the judicial function of courts but are limited to specific areas regulated by the agency.

• Characteristics of Quasi-Judicial Power:

  • Administrative agencies can issue orders, make findings of fact, and resolve disputes between parties.
  • They have the power to impose administrative sanctions, such as fines, penalties, or suspension of licenses.
  • The proceedings are generally less formal than judicial trials but must still adhere to principles of due process and substantial evidence.

• Essential Elements of Due Process in Administrative Proceedings:

  1. Notice: A party must be informed of the nature and cause of the proceedings.
  2. Hearing: The party must be given an opportunity to present evidence and argue its case.
  3. Impartial Tribunal: The decision-making body must be neutral and free from bias.
  4. Decision based on substantial evidence: The decision must be supported by substantial evidence, not just conjecture or speculation.

• Doctrine of Primary Jurisdiction: If a case requires specialized knowledge or expertise, courts will defer to the administrative agency that has primary jurisdiction over the matter.

• Doctrine of Exhaustion of Administrative Remedies: Parties must exhaust all available remedies within the administrative framework before seeking judicial intervention. Failure to do so generally results in dismissal of the case unless exceptions apply.

• Finality of Administrative Decisions: Administrative decisions may become final and executory unless an appeal is made to a higher administrative authority or the courts within the time specified by law.

3. Executive (Administrative) Power

Administrative agencies are also tasked with the execution and enforcement of laws. This is considered part of the general executive power of the state, delegated to specific agencies.

• Regulatory and Supervisory Functions: Agencies may conduct investigations, inspections, and oversee compliance with laws and regulations. For example, the Securities and Exchange Commission (SEC) or the Department of Labor and Employment (DOLE) exercises regulatory functions over specific industries.

• Enforcement Powers:

  • Administrative agencies can issue orders to ensure compliance with laws or regulations (e.g., cease and desist orders, closure orders).
  • They may also collect fees, impose penalties, revoke licenses, and carry out other sanctions.

• Investigative Powers:

  • Administrative agencies can conduct investigations or inquiries in aid of their rule-making or adjudicatory functions. This power includes summoning witnesses, compelling the production of documents, and conducting hearings.
  • Contempt Power: Administrative agencies have the power to hold individuals in contempt if they refuse to comply with subpoenas or other lawful orders.

Limitations on the Powers of Administrative Agencies

While administrative agencies enjoy a wide range of powers, they are subject to several limitations to ensure that they act within their delegated authority:

• Constitutional Limitations:

  • Actions of administrative agencies must conform to constitutional principles, such as equal protection, due process, and non-delegation of legislative power.
  • Agencies cannot act beyond the scope of their statutory mandate, and their actions must not violate fundamental rights.

• Statutory Limitations:

  • Administrative agencies must comply with their enabling laws and other statutes governing their jurisdiction.
  • Ultra Vires Doctrine: Any act of an agency that exceeds the powers granted to it is ultra vires (beyond its powers) and is invalid.

• Judicial Review:

  • Courts may review the actions of administrative agencies to determine whether they acted within the scope of their authority, whether they committed grave abuse of discretion, or whether their actions were unconstitutional or illegal.

Conclusion

Administrative agencies are vital to the governance and regulation of various sectors in the Philippines. Their powers, which include quasi-legislative, quasi-judicial, and executive functions, allow them to enforce laws, resolve disputes, and create rules and regulations within the limits set by law. However, they are subject to constitutional and statutory constraints to ensure accountability, prevent abuse, and uphold the rule of law.