Administrative Law

Licensing

Introduction Licenses – permits to act for specified purposes. Most people have, in some form, experienced the licensing process when dealing

with government. The government issues all kinds of licenses:

Drivers’ license Pilots’ license License to operate a television/radio station License to operate a nuclear power plant (Vermont Yankee) Fishing license Hunting license Professional license Business license Liquor license

The issuance of each of these types of licenses can involve very different procedures depending on the subject matter.

The purpose of issuing a license is that it gives greater control over those an agency regulates by ensuring they follow the regulations in order to maintain the license.

In most cases, operating without a license is subject to criminal prosecution.

Purposes of Licensing Control of Public Resources

Issuing licenses can help maintain responsible control over public resources. Example: license to cut timber in the national forests. Purposes: aesthetics, safety, etc.

Fair Allocation of Limited Resources Examples:

FCC and broadcast licenses Hunting and fishing licenses

The government must have a fair way of allocating scarce resources. Licenses cannot be issued in an arbitrary and capricious manner. Ensures that overuse will not lead to problems.

Assurance of Competence in Complex and Dangerous Occupations Limits the number of people in certain markets (egg graders, tattoo artists, hair dressers), but also

ensures the competence of those in the market (doctors, lawyers, etc.). Licensing is critical in these areas because a lack of competence could result in great harm to the

public. Maintenance of Public Order

Examples: Drivers’ license Liquor license

Both require some competency but not the same level of competency as the previous purpose of licensing.

Licensing as Adjudication Problems:

Licenses have different purposes and vary in their complexity and thus the same procedure is not appropriate for all licenses.

The degree of hardship placed on the licensee can vary when the license is revoked or denied.

Section 558(c) of the APA requires formal adjudication for denial, termination, or revocation of licenses:

“When application is made for a license required by law, the agency, with due regard for the rights and privileges of all interested parties or adversely affected persons and within a reasonable time, shall set and complete proceedigns required to be conducted in accordance with sections 556 and 557 of this title or other proceedings required by law and shall make its decision.”

Section 554(d)(A) exempts initial applications for licenses from 558’s hearing procedures.

However, authorizing statutes, in many instances (particularly important licensing issues), will have due process requirements, which typically provide for formal adjudication.

Hornsby v. Allen, 326 F.2D 605 (5th Circuit) (1964)

Withrow et al. v. Larkin, 421 U.S. 35 (1975)

Schware v. Board of Bar Examiners, 353 U.S. 232 (1957)

Cord v. Gibb, 254 S.E.2D 71 (Virginia) (1979)

Dixon v. Love, 431 U.S. 105 (1977)