International Encyclopedia of Public Policy and Administration - Vol. 2

By Jay M. Shafritz | Go to book overview

Other federal statutes governing the conduct of administrative hearings not covered by the Administrative Procedure Act also have been interpreted by the courts to allow the agencies to receive and consider hearsay. At the state level, many legislatures have enacted statutes allowing state administrative agencies to receive and consider hearsay. Thus, at both the federal and state level, administrative agencies are authorized to receive and consider hearsay evidence at administrative hearings.

There remains, however, the issue of whether hearsay, standing alone, constitutes substantial evidence to support an administrative decision or rule. In other words, if the only evidence supporting an administrative determination is hearsay, can the agency decision be overturned on judicial review on the grounds that it is not supported by competent and convincing evidence?


Residuum Rule

Early in this century, the New York Court of Appeals ( Carroll vs. Knickerbocker, 218 N.Y. 435, 173 N.E. 507 [ 1916]) ruled that hearsay, although admissible in an administrative hearing, will not support an agency adjudication in the absence of other nonhearsay evidence in the record to support the decision. In other words, hearsay evidence, standing alone, is not substantial evidence. This rule, known as the "residuum rule," quickly gained wide acceptance in both state and federal courts across the country.

In 1971, the Supreme Court handed down a decision that cast considerable doubt on the continued viability of the residuum rule in the federal courts, although the Court did not reject the rule outright. In Richardson versus Perales (402 U.S. 389, 91 S. Ct 1420 [ 1971]), the Supreme Court ruled that the Social Security Administration did not err in relying on written medical records to deny an applicant's claim for disability benefits. The reports had been prepared by physicians who had examined the applicant but who did not appear and testify at the hearing on the applicant's claim for benefits.

The applicant appealed the agency's denial of benefits on the grounds that the hearsay medical reports, although admissible into evidence at the disability hearing, were not competent evidence to support the agency's decision and were insufficient to overcome the testimony of the applicant's treating physician, who appeared and testified at the hearing, that the applicant was permanently disabled. The Supreme Court rejected the applicant's argument and affirmed the decision of the Social Security Administration, holding that hearsay medical reports can support an administrative decision when the physicians who prepared the reports are subject to being subpoenaed and crossexamined regarding their findings.

When the Court included in its decision the caveat that the physicians could have been subpoenaed to testify, it left the door open to future applications of the residuum rule in cases when the underlying statement is not subject to cross-examination. On one hand, nonetheless, most federal courts that have considered the issue since Perales have treated the residuum rule as having been abandoned and have upheld administrative decisions based solely on hearsay evidence. On the other hand, most state courts still consider the residuum rule to be a viable doctrine, though few have used it in recent years to reverse administrative adjudications. Hearsay is still regularly received into evidence at agency hearings and is used to support administrative decisions at both the state and federal levels.

PAUL M. BROWN


BIBLIOGRAPHY

Davis, Kenneth Culp, 1980. Administrative Law Treatise. 2d ed. San Diego, CA: K. C. Davis.

Stein, Jacob A., Glenn A. Mitchell, and Basil J. Mezines, 1994. Administrative Law. New York: Matthew Bender.

Strong, John William, ed., 1992. McCormick on Evidence. vol. 2 4th ed. St. Paul, MN: West.

Warren, Kenneth F., 1994. "Adjudication". In David H. Rosenbloom and Richard D. Schwartz, eds., Handbook of Regulation and Administrative Law, pp. 225-286. New York: Marcel Dekker.

HIERARCHY . A group of persons arranged in order of rank, grade, class, and so on. In the context of organizational theory; a formal structure denoting a chain of command whereby authority and power are vested at the top. Hierarchy provides the framework for the relationships of roles within organizations. Often hierarchy has been charted as a tall vertical structure such as a triangle, pyramid, or ladder, but more recently, horizontal or "flattened" hierarchical forms are shown.

Hierarchy has a long tradition as a means of political, social, and religious organization. Evidence of hierarchy spans thousands of years. In 1491 B.C.E., during the exodus from Egypt, Jethro, the father-in-law of Moses, urged Moses to delegate authority over the tribes of Israel along hierarchical lines ( Shafritz and Ott 1996, p. 30). The ancient Romans organized along hierarchical lines, with the affluent and aristocratic males occupying the top positions (patricians) and the poor (plebeians) at the bottom. An often-used example of a hierarchically arranged organization is the Roman Catholic Church. The pope occupies the top position, followed in descending order by the cardinals, bishops, priests, deacons, and so on. In a hierarchy, the authority vested in the top echelon grants it the power to organize and command those below. This authority, in theory, remains unquestioned, therefore orders are obeyed

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