Judge Freda Wolfson. Photo: Carmen Natale/ALM

In Savadjian v. Caride, U.S. District Judge Wolfson reaffirmed what should be the familiar doctrine that a civil rights suit under 42 U.S.C. § 1983 can't be used as a back door to obtain judicial review in the federal courts of a quasi-judicial administrative proceeding under state law.

The case arose from a proceeding by the Department of Banking and Insurance to revoke Savadjian's insurance producer license. As provided by the New Jersey Administrative Procedure Act, Savadjian received a contested case hearing before an administrative law judge. In a motion in limine, the ALJ excluded recordings of telephone calls by Savadjian for lack of authentication. Pursuant to the Uniform Administrative Procedure Rules, N.J.A.C. 1:1-14.10(a), DOBI obtained interlocutory review of this evidentiary ruling by Commissioner Caride. In a 59-page ruling, the commissioner reversed the ALJ and remanded for hearing on the merits. Savadjian sought leave to appeal to the Appellate Division, which was denied. Rather than exhaust his administrative remedies and appeal any final ruling against him, Savadjian then sought to short circuit the process by filing a § 1983 complaint against the commissioner in her individual capacity, alleging that her ruling was beyond the scope of her authority and had denied her due process.

Judge Wolfson dismissed the complaint, ruling that the commissioner was absolutely immune from suit because she was acting in her quasi-judicial capacity when she decided an interlocutory appeal from the ALJ's evidentiary ruling. The ruling is plainly correct. The New Jersey Administrative Procedure Act and Uniform Rules make the agency head the adjudicator of all contested cases, including specifically license revocation proceedings. It provides due process through an adversary proceeding with notice and hearing, and it provides for eventual judicial review on the merits by the state courts. Significantly, Judge Wolfson ruled that the commissioner's status as a cabinet officer serving at the governor's pleasure did not deprive her of immunity from personal liability for performing her quasi-judicial functions. Finally, Judge Wolfson rejected Savadjian's argument that the commissioner had no authority under state law to review and modify the ALJ's evidentiary ruling. It is well settled under state law that the agency head is the final decision maker and may, with sufficient reason, modify or reject any recommended decision of an ALJ .

At its core, Savadjian's complaint is an attack on the fundamental administrative law model under both the federal Administrative Law Act and its state counterparts that a politically responsible agency head makes quasi-judicial decisions on the basis of a record compiled in a hearing before a subordinate official and that the factual basis for those decisions ultimately receives judicial review under a deferential standard. It demands, in essence, that such cases be heard and decided at all stages by fully independent judicial officers and that the agency head be no more than a prosecutor. The quasi-judicial model has proven to be both fair and efficient for nearly a century, and we see no reason to change it—especially by threatening the agency head with personal liability.