April 30, 2020
By Timothy Sandefur and Jon Riches

Today, the Goldwater Institute asked the Arizona Supreme Court to follow state law and make it easier for people to place administrative enforcement actions on hold pending review by the courts. 

Administrative agencies exercise tremendous power. They can fine people, deny licenses and permits that prevent individuals from earning a livelihood, and even recommend criminal penalties.

But at the same time, their actions are largely immune from oversight. Administrative agencies—staffed not by lawmakers, but by unelected bureaucrats—make rules that have the force of law, hire their own investigators to investigate alleged violations of those rules, and then use administrative law judges to adjudicate those alleged violations. In Arizona, if the agency does not like the result from an administrative judge, the agency head can ignore the judge’s decision, amend it, or supersede it. In other words, in our administrative system, agencies act as lawmaker, sheriff, and judge. The Goldwater Institute has proposed several reforms for state legislatures to address these separation of powers and due process issues.

The judiciary is a check on the power of administrative agencies. This is perhaps why the legislature enacted A.R.S. § 12-911(A), which allows people subject to administrative action to put a hold on agency decisions while the case is pending in superior court if the moving party can show “good cause.” 

But last year, the Arizona Supreme Court enacted a rule that overrode the “good cause” standard and required a heighted preliminary injunction standard in order to get a stay on administrative decisions. This heightened standard requires, among other things, a showing of “strong likelihood” of success on the merits and “irreparable harm,” which makes it harder for regulated parties to put a hold on agency actions while those actions are reviewed by a neutral court. 

Fortunately, in our system, when a substantive law passed by the legislature conflicts with a procedural rule enacted by the judiciary, the substantive law prevails. In this case, that means the legislature’s good cause standard should prevail over the judiciary’s heightened preliminary injunction standard. 

This is particularly important in the administrative context because decisions out of administrative agencies lack many basic components of due process. So it makes sense to make it easier for regulated parties to place a hold on those decisions pending judicial review. 

That is why the Goldwater Institute filed a comment in support of the New Civil Liberties Alliance’s (NCLA) petition to amend Rule 3 of the Rule of Procedure for Judicial Review of Administrative Decisions. If adopted by the Arizona Supreme Court, this amendment will promote a proper separation of powers between the legislature and the judiciary in Arizona and will ensure that regulated parties are not unduly harmed by administrative actions while their cases are pending in court. 

Timothy Sandefur is the Vice President for Litigation and Jon Riches is the Director of National Litigation at the Goldwater Institute. They are the authors of the new paper Confronting the Administrative State: State-Based Solutions to Inject Accountability into an Unaccountable System.

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