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The Florida Bar Journal
April, 2013 Volume 87, No. 4
Prompt Judicial Review of Administrative Decisions: Providing Due Process in Unsure Waters

by Carl E. Brody, Jr.

Page 32

Any administrative licensing procedure regulating First Amendment-protected activity must bear a “heavy presumption against its constitutionality”1 and, therefore, must provide adequate procedural safeguards; otherwise, the procedure will constitute an unconstitutional prior restraint.2 The initial analysis provided by the U.S. Supreme Court in Freedman v. Maryland, 380 U.S. 51 (1965), known as the Freedman standard, required that lower courts determine whether the decision to issue a license was made within a “specified brief period” and, when judicial review was sought, whether the status quo was maintained pending a final determination on the merits;3 whether the licensing procedures assure “a prompt final denial of a license;”4 and whether the procedures place the burden of instituting judicial proceedings and proving that the expression is unprotected on the censor rather than the exhibitor.5 Subsequent to Freedman, the Supreme Court refined this standard in the context of administrative licensing decisions, holding that such procedures need only assure that the licensor make the decision of whether to issue the license within a specified and reasonable time period, during which time the status quo is maintained,6 and assure that the possibility for prompt judicial review exists in the event that the license is erroneously denied.7 The Court altered its view on the applicable standard based on distinguishing the third prior restraint factor, since it does not apply where the government does not pass judgment on the content of speech when it makes its licensing decision.8

These matters of constitutional law and federal procedure retain great practical significance for the attorney representing state and local governments because civil rights liability may arise based on failure to provide sufficient administrative process.9 Therefore, it is important to comply with these due process rights in order to protect the interests of governmental clients.

Administrative Licensing Decisions
Administrative laws, rules, and decisions that limit or circumscribe First Amendment-protected activity must avoid the prohibitions against prior restraint. The prior restraint concern may arise from one of two scenarios: when an applicant is denied a license or permit to operate, or when a license or permit holder is prohibited from continuing its operation based on an agency suspension or revocation. In either case, the local government agency must provide adequate judicial review of the administrative decision.

Under the first — when determining whether to grant a license or permit — the local government must avoid giving the decision maker unbridled administrative discretion, a situation that arises where the controlling ordinance or statute does not provide a specifically limited set of standards for the decision maker to follow when making the determination of whether to grant the license application.10 Under the second — when an administrative agency is taking away a right that has previously been granted — the decision to revoke or suspend must be based on the license or permit holder having violated some law or rule specifically designated in the ordinance or rule. These predicate violations are what trigger the suspension mechanism.

The administrative authority must provide a sufficiently clear set of standards for applicants and licensees to follow in order to comply with their responsibilities. These clear standards are to be expressed through the applicable ordinance or rule employed for regulation of the licensed activity. Constitutionally valid standards put applicants on notice of the requirements for granting a license or permit and inform licensees or permit holders of the predicate acts that will result in administrative action taking that right away. Such administrative provisions will pass constitutional muster if the standards are adequately limited.11

Administrative licensing is necessary in order to provide a practical incentive for compliance with regulatory provisions. Negative licensing decisions must, therefore, focus on the licensee’s inability to comply with these regulations, as it is the license and the interest in the license that receives the court’s protection in both the denial and suspension scenarios.

Judicial review of local government administrative decisions depends on whether the administrative action is quasi-judicial or quasi-legislative. The decision on whether to grant or deny a license or permit is quasi-legislative, while suspension or revocation is quasi-judicial, assuming the applicable ordinances provide for administrative review with notice and a right to a hearing. The circuit courts have certiorari jurisdiction over quasi-judicial action, but have no such jurisdiction over quasi-legislative action. This split is based on the fact that certiorari is a record-based review limited to the face of the record presented to the court. Therefore, only those administrative matters requiring notice and a hearing are proper for judicial appellate review.12 Judicial review of quasi-legislative actions is obtained through declaratory judgment pursuant to F.S. §86.021.13

Under certiorari, the court is limited to examining whether procedural due process was accorded by the agency, whether the agency observed the essential requirements of law, and whether the agency’s judgment is supported by competent, substantial evidence.14 This standard places an explicit responsibility on the circuit courts to provide at least a perfunctory review of a petition for writ of certiorari. If that review is not provided, an aggrieved plaintiff may petition the district court of appeal based on a failure to receive procedural due process at the circuit court level.15 The court in a declaratory judgment action of this nature must make a declaration on the validity of a challenged ordinance where a bona fide dispute between parties and an actual, present need for declaration exists.16 Therefore, under either circumstance, U.S. Supreme Court intent is arguably satisfied by providing for review of administrative decisions at the circuit court level and allowing further appeal when the merits of the appeal have not been fully examined by the reviewing court.

Prior Restraints on First Amendment Rights
A prior restraint arises when a government agency denies a license affecting the ability of a party to exercise First Amendment rights. In order to remain within constitutional limits, the agency restraint must contain certain procedural safeguards and provide an avenue for prompt judicial review.17 This is commonly referred to as the FW/PBS standard and it is applicable only when protected conduct is affected by government licensing, whereas the Freedman standard applies when the government action requires or allows for a review of the content of the protected activity.18 Under either circumstance, judicial review must be limited.

Procedural Safeguards (Unbridled Administrative Discretion) — To satisfy the initial prong in the prior restraint test for licensing ordinances, a local governmental entity must grant or deny the license within a specified and reasonable time period, during which the status quo must be maintained.19 Courts have found time periods from 30 to 90 days reasonable for making a decision on a license application.20 However, compliance with specifics is strict and failure will result in a finding against the government on due process grounds.

The first consideration applies only to the license applicant, not a license holder whose license is subject to either suspension or revocation. The second consideration, requiring maintenance of the status quo, applies to both scenarios. Prior restraint concerns are at issue in the former situation because the failure of a decision maker to decide within a specified amount of time without maintaining the status quo will encumber an applicant’s First Amendment rights. The Constitution is violated when an applicant is prohibited from conducting activity protected by the First Amendment for an unreasonable time subsequent to filing an application. Prolonging this status quo exacerbates the violation.

This same concern is not present when license suspension or revocation is at issue if the subject ordinance provides for a stay of administrative action pending final court disposition because maintenance of the status quo will allow the licensee to continue operation while the decision-making process proceeds. Therefore, there is no loss of any protected right during this decision-making period. If, however, an automatic stay is not in place or if the suspension or revocation commences prior to judicial review, due process may be violated.

To avoid running afoul of these pitfalls, all standards for granting, denying, revoking, or suspending a license should be completely objective, and the decision maker’s decision should be ministerial in nature. Severe limitation of the decision maker’s discretion reduces the potential for abuse of the administrative process, thereby effectively bridling administrative discretion in conformity with the first prong of the prior restraints test. Therefore, it is critical that the body enacting a licensing scheme provide strict standards for the decision maker to follow in the context of the licensing decision in order to ensure compliance with these constitutional standards.

Prompt Judicial Review — The prompt judicial review requirement for prior restraint is the more controversial prong of the analysis; indeed, the federal circuit courts of appeal have split on the government’s compliance responsibility. One group of circuits supports the proposition that prompt judicial review is satisfied by prompt access to judicial consideration by the courts.21 The other group believes that prompt judicial resolution of the licensing decision is required.22 Under the first standard, a local government need simply provide a license holder or applicant an outlet to appeal the administrative decision, whereas under the other standard, the government must guarantee a judicial resolution of the matter. The Ninth Circuit Court of Appeals’ analysis, in compromise, would bifurcate this analysis by supporting the prompt access positions in the license suspension context, so long as the government stays its action pending any appeals,23 but it agrees with the prompt decision group when the administrative decision involves the application process.24

This confusion over the applicable standard arises from the language of FW/PBS, wherein the court explained that government need not bear the burden of going to court nor bear the burden of proof in a licensing scenario based on the fact that an applicant has every incentive to pursue available legal avenues of redress, unlike the Freedman analysis.25 This reinterpretation of judicial review requirements refocused attention on the procedural aspects of provisions affecting adverse administrative decisions against a licensee. Prior to FW/PBS, the procedural aspects of such provisions were relatively unimportant because the government was required to initiate court action in order to effectuate its decision, presumably through an injunction action. Justice O’Connor’s reinterpretation, though, placed the pressure of protecting constitutional due process rights on the language and operation of the judicial review provisions governing the administrative process. The introduction of this new approach caused the federal courts to struggle with determining the true intent of the Supreme Court.

Compliance with Prompt Judicial Review
License Denials — In City of Littlejohn v. Z.J. Gifts, 541 U.S. 774 (2004), the Court attempted to clarify its position in a license denial scenario. The Court, in further exploring its previous rulings in Freedman and FW/PBS, explained that the reason for the judicial review safeguard was to prevent undue administrative and judicial delay in the licensing context. Applying this standard, the Court found that the Colorado judicial review rules provided sufficient protections to assure that a judicial decision would be prompt, “so long as the courts remain sensitive to the need to prevent First Amendment harms and administer those procedures accordingly.”26 Unfortunately, the Court also noted that this determination would be made on a case-by-case determination. Thus, even assuming Ch. 86 provides an appropriate process for judicial review, the Supreme Court may look to the actual operation of the statute to determine whether it is practiced in a sufficiently sensitive manner regarding prior restraint issues. The result of this analysis is that even though aggrieved license applicants in Florida receive judicial review of their decisions as provided by the Florida Statutes, this may not be sufficient unless they are actively advanced by the parties and the court.

The Fifth District addressed this concern in State v. Hanna, 901 So. 2d 201 (Fla 5th DCA 2005), and determined that §86.021 provides sufficient judicial review, but, as noted in the dissenting opinion, requiring an applicant to bring an original action under §86.021 stretches the theory of access to its breaking point. Conversely, in the context of a license suspension, the standard is no less strict, but requiring review through the circuit court within 30 days of the decision being appealed27 provides much greater support for satisfying the limited timeframe for judicial review.

The 11th Circuit position on this issue was announced in Boss Capital, Inc. v. City of Casselberry, 107 F.3d 1251 (11th Cir. 1999), in which the court addressed whether a city’s judicial review provision for license application denials was constitutionally sufficient. The challenged ordinance provided that such decision “may be immediately reviewed as a matter of right by the circuit court upon the filing of an appropriate pleading by an aggrieved party.”28 By providing only for the “right of review,” the appellants argued that the city’s provisions for prompt judicial review of its licensing decisions, including denials, were constitutionally insufficient as this standard did not provide for a prompt judicial decision.

The court began its analysis of this question by noting the parameters of its review, and by acknowledging that although a general right to judicial review might suffice, the City of Casselberry provided a specific review provision.29 The court also noted that its analysis was based on a license denial decision.30 Within these parameters, the court explained that the Freedman standard was not applicable because of the distinction between licensing and censorship decisions. It specifically noted that “[t]he dangers of censorship are less threatening when it comes to licensing schemes” because, unlike censorship actions that focus on the content of expression, licensing schemes are more mundane and ministerial in application.31 Further, the court explained that the lack of a definite time in which to pursue legal action was not critical in the licensing decision because the petitioner would have the incentive to pursue appellate action.32

This determination by the 11th Circuit falls in line with the rationales in the First, Fifth, and Seventh circuits by not requiring a decision within a specific amount of time in order for the prompt judicial review prong of the prior restraints test to be satisfied. This rationale also makes good common sense as the opposing view places local government in the position of having to limit the time for a court to review an appeal from a local government administrative body. Such a provision would violate the requirement of separation of powers and lead to unheard of intrusion into the judiciary by legislative bodies through legislation setting alternative time limits on courts in alternative procedural situations. As such, it is appropriate to rely on Boss Capital with an appreciation of the Littlejohn standard in reliance on the Hanna analysis for the provision of prompt judicial review. Unfortunately, §86.021 remains the linchpin for assuring compliance with the judicial review requirements.

License Suspension — There is less complete case law to rely upon in the license suspension context, but the very nature of the subject suggests that the concerns as compared to the application process do not apply. Indeed, as the nomenclature suggests, a prior restraint prohibits activity before it has begun. When a license is being suspended or revoked, the activity at issue has already commenced and continues until the time that the penalty is imposed. As such, any restraint occurs only after the suspension period begins. The Ninth Circuit addressed this issue directly in 4805 Convoy, Inc. v. City of San Diego, 183 F.3d 1108 (9th Cir. 1999), in which a nude dancing establishment challenged the suspension/revocation provision of the city code.33

In its opinion, the court focused on the administrative appeal process available to a licensee subject to suspension. Specifically, the court explained, “the key to the inquiry in the license suspension/revocation context is the preservation of the status quo during the administrative appeal process.”34 Under this scenario, the status quo allows continued operation of the licensed entity so that the next stage of enforcement is not imposed while an appeal of the decision is pending. Indeed, under this analysis, neither prong of the FW/PBS test is breached because the status quo is being maintained through a stay of the administrative penalty.

In 4805 Convoy, the specific city ordinance did not provide for a stay, and the State Rules of Court acknowledged only that a state court “may stay the operation of the administrative order or decision pending the judgment of the court.”35 As such, under California rules of procedure, and local law, the continued operation of the business would depend on a court’s decision of whether to stay enforcement pending a final ruling. The Ninth Circuit felt that this was insufficient protection and enjoined enforcement of the suspension provision until a final ruling was made on the appeal of the administrative action.36

Conversely, in Rameses Inc. v. County of Orange, 481 F. Supp. 2d 1305, 1326 (M.D. Fla. 2007), the Middle District upheld an Orange County suspension provision regulating First Amendment activity based on the fact that a license holder can continue operations until a final decision is rendered because any suspension or revocation decision would be abated pending administrative and judicial review per the ordinance.

It is unclear what position the 11th Circuit takes on this question because it supports the “prompt access” rather than “prompt decision” rule. As such, it is possible that a suspension penalty may be enforced prior to a final decision by a court relying on the Florida Appellate Rules’ right to certiorari review. The more cautious interpretation suggests staying enforcement of any administrative penalty pending a final decision by a reviewing court. Following this rationale is consistent with the “prompt access” theory, so long as the appellate procedure is sufficient and within the parameters of the “prompt decision” theory, since the right to continue operation is not suspended until after a final decision by the courts.

The overall import of this analysis suggests that licensing ordinances should be closely examined to determine when the imposition of the suspension penalty accrues in order to determine when the suspension of a license actually takes effect. This provision can be easily amended to affect the interests and intent of the regulatory licensing scheme so that interested parties are aware of how the suspension model will be implemented. This is important because, at this time, there is no definitive standard from the courts. Furthermore, the suspension/revocation process of relying on the judicial review procedure provided for in the Rules of Court provides much more comfort than reliance on a court interpretation of the application of §86.021 to provide sufficient judicial review.

The 11th Circuit has been clear regarding its position on the prior restraint analysis in the license application process. Its interpretation allows review of administrative decisions to follow a rational procedure that protects the rights of both parties involved in the licensing process. The court has been silent, though, in the license suspension context. The split among federal circuits remains and U.S. Supreme Court guidance does not provide a definitive answer to the question. Therefore, the procedure for agency licensing decisions must be carefully examined to assure that judicial review is provided in a manner that will prevent due process or prior restraint violations. Maintaining the status quo for licensed entities in the suspension or revocation context should provide sufficient due process protection. Reliance on declaratory judgment actions may be sufficient in the license application process, but this is a more tenuous proposition. The result of these vagaries is that the best option is to request expedited review of any matters before the court in which administrative decision affecting constitutionally protected rights are in play in order to be “sensitive” to the rights of the affected party.

1 Bantam Books v. Sullivan, 372 U.S. 58 (1963); FW/PBS, Inc. v. City of Dallas, 493 U.S. 215, 225-27 (1990) (Prior restraints are presumptively invalid because they typically involve two evils that will not be tolerated: 1) the risk of censorship associated with the vesting of unbridled discretion in government officials; and 2) the risk of indefinitely suppressing permissible speech when a licensing law fails to provide for the prompt issuance of a license.).

2 Southeastern Promotions, Ltd. v. Conrad, 420 U.S. 546, 553 (1975).

3 Freedman v. Maryland, 380 U.S. 51, 59 (1965).

4 Id.

5 Id. at 58.

6 FW/PBS, 493 U.S. at 228 (plurality opposed).

7 Id.

8 Id. at 229-30.

9 Council for Periodical Distribution Assocs. v. Evans, 827 F.2d 1483 (11th Cir. 1987) (noting that a prior restraint violation gives rise to 42 U.S.C. §1988 liability).

10 See Alexis, Inc. v. Pinellas County et al., 194 F.3d 1336, 1347 (M.D. Fla. 2002) (explaining that sufficient procedural safeguards will protect the regulation from constitutional infirmity); see also Woods v. Cloyd W. Miller, Co., 333 U.S. 138, 143 (1944), citing Bowles v. Willingham, 256 U.S. 170 (1944).

11 Hudson v. United States, 522 U.S 92, 99 (1997) (noting the double jeopardy does not apply under these circumstances); see also Blue Moon, Inc. v. Pinellas County, 97 F. Supp. 2d 1134, 1146-48 (M.D. Fla. 2000).

12 State v. Hanna, 901 So. 2d 201, 209 (Fla. 5th DCA 2005)

13 Id. at 210.

14 Haines City Community Development v. Higgs, 658 So. 2d 523, 530 (Fla.1995); Martin County v. City of Stuart, 736 So. 2d 1264, 1266 (Fla. 4th DCA 1999).

15 City of St. Petersburg, Board of Adjustment v. Morell, 728 So. 2d 1197, 1198 (Fla. 2d DCA 1999); DSA Marine Sales & Service, Inc. v. County of Manatee, 660 So. 2d 775, 776 (Fla. 1st DCA 1995) (refusal of the circuit court to exercise jurisdiction by declining to rule on the merits of the petition based on timeliness was legal error).

16 Britamco Underwriters, Inc. v. Central Jersey Investments, Inc., 632 So. 2d 138 (Fla. 4th DCA 1994).

17 FW/PBS, 493 U.S. at 228.

18 Id. at 229-230.

19 Id. at 226-27.

20 Wolff v. City of Monticello, 803 F. Supp. 1568, 1574 (D. Minn.1992) (allowing 90 days for the court to review); Ellwest Stereo Theater v. Boner, 718 F. Supp 1553, 1571 (M.D. Tenn. 1989) (allowing 60 days for review).

21 Boss Capital, Inc. v. City of Casselberry, 187 F.3d 1251 (11th Cir. 1999); TK’s Video, Inc. v. Denton County, 24 F.3d 705 (5th Cir. 1999); TK’s Video, Inc. v. Denton County, 24 F.3d 705 (5th Cir. 1999); Graff v. City of Chicago, 9 F.3d 1309 (7th Cir. 1993); Jews for Jesus, Inc. v. Massachusetts Bay Transportation Authority, 989 F.2d 1319 (1st Cir. 1993).

22 East Brooks Books, Inc. v. City of Memphis, 48 F.3d 220 (6th Cir. 1995), followed in Nightclubs, Inc. v. City of Paducah, 202 F.3d 884 (6th Cir. 2000); Baby Tam & Co., Inc. v. City of Las Vegas, 154 F.3d 1097 (9th Cir. 1998) (for license denials only); 11126 Baltimore Blvd., Inc. v. Prince George’s County, 58 F.3d 988 (4th Cir. 1995); Z.J. Gifts D-4, LLC v. Littleton, 311 F.3d 1220 (10th Cir 2002).

23 4805 Convoy, Inc. v. City of San Diego, 183 F.3d 1108 (9th Cir. 1999).

24 Baby Tam, 154 F.3d at 1102.

25 FW/PBS, 493 U.S. at 229-30.

26 Littlejohn, 541 U.S. at 781.

27 Fla R. App. P. 9.100(c).

28 Boss Capital, 183 F.3d at 1257.

29 Id. at 1255.

30 Id.

31 Id. at 1256.

32 Id.

33 408 Convoy, 183 F.3d at 1113.

34 Id. at 1114.

35 Id. at 1116.

36 Id.

Carl E. Brody, Jr., is a senior assistant county attorney for Pinellas County and member of the Florida and Illinois bars. He received his B.A. from Howard University, his J.D. from the University of Oregon, and is former chair of the Clearwater Bar Government and Administrative Law Section.

This column is submitted on behalf of the City, County and Local Government Law Section, Jewel White, chair, and David Miller, editor.

[Revised: 03-28-2013]