2.6Appeals from Agencies Governed by the Administrative Procedures Act¹

MCR 7.119 governs appeals from an agency decision to which the Administrative Procedures Act (APA), MCL 24.201 et seq., applies. MCR 7.119(A). Unless provided otherwise in MCR 7.119, the rules set out in MCR 7.101—MCR 7.115 apply. MCR 7.119(A).² The APA applies to “a state department, bureau, division, section, board, commission, trustee, authority or officer, created by the constitution, statute, or agency action. Subject to [MCL 24.315(5)], agency includes the municipal employees retirement system and the retirement board created by the municipal employees retirement act of 1984, . . . MCL 38.1501 to [MCL 38.1555].” MCL 24.203(2). For purposes of the APA, “[a]gency does not include an agency in the legislative or judicial branch of state government, the governor, an agency having direct governing control over an institution of higher education, the state civil service commission^[3], or an association of insurers created under the insurance code of 1956, . . . MCL 500.100 to [MCL] 500.8302, or other association or facility formed under [the insurance code of 1956] as a nonprofit organization of insurer members.” MCL 24.203(2).⁴

A.Timing Requirements in Appeals of Right

A person must file a petition for review of an agency’s final decision or order within 60 days of the mailing of the notice of the agency’s decision or order. MCR 7.119(B)(1). An application for interlocutory appeal of a preliminary procedural or intermediate agency action or ruling must be filed within 14 days of the decision. MCR 7.119(C). If a late appeal is permitted by statute, the late application must be filed within six months after entry of the decision or order. MCR 7.119(D).

B.Manner of Filing in Appeals of Right, Interlocutory Appeals, and Late Appeals

Appeals of right. A claim of appeal must comply with the requirements of MCR 7.104(C)(1), “except that:

(i) the party aggrieved by the agency decision is the appellant and is listed first in the caption; and

(ii) the party seeking to sustain the agency’s decision is the appellee; or

(iii) if there is no appellee, then the caption may read ‘In re [name of appellant or other identification of the subject of the appeal],’ followed by the designation of the appellant. Except where otherwise provided by law, the agency or other party to the case may become an appellee by filing an appearance within 21 days after service of the claim of appeal.” MCR 7.119(B)(2)(a).

“The claim of appeal must:

(i) state ‘[Name of appellant] claims an appeal from the decision entered on [date] by [name of the agency],’ and

(ii) include concise statements of the following:

[A] the statute, rule, or other authority enabling the agency to conduct the proceedings;

[B] the statute or constitutional provision authorizing appellate review of the agency’s decision or order in the circuit court; and

[C] the facts on which venue is based under MCL 24.303(1).”⁵ MCR 7.119(B)(2)(b).

The claim must be signed in accordance with MCR 7.104(C)(3), and comply with MCR 7.104(D) regarding the filing of other documents. MCR 7.119(B)(2)(c)-(d). The appellant must serve the agency with the items set forth in MCR 7.104(E), complete service as set forth in MCR 7.104(D)(9), and serve the Attorney General. MCR 7.119(B)(2)(e)-(f).

Interlocutory and late appeals. The manner of filing of an interlocutory appeal is governed by MCR 7.119(C), and the filing of a late appeal is governed by MCR 7.119(D).

C.Stay

“The filing of an appeal or an application for leave to appeal does not stay enforcement of the agency’s decision or order.” MCR 7.119(E). However, a party may file a motion for a stay. MCR 7.119(E)(1). The agency is entitled to notice of such a motion even if it has not filed an appearance in the appeal. MCR 7.119(E)(2). The court may order a stay if it finds that:

“(a) the moving party will suffer irreparable injury if a stay is not granted;

(b) the moving party made a strong showing that it is likely to prevail on the merits;

(c) the public interest will not be harmed if a stay is granted; and

(d) the harm to the moving party in the absence of a stay outweighs the harm to the other parties to the proceedings if a stay is granted.” MCR 7.119(E)(3).

If the court grants a stay, it must “set appropriate terms and conditions for the posting of bond

(a) in the amount required by any applicable statute authorizing the appeal, or

(b) in an amount and with sureties that the circuit court deems adequate to protect the public and the parties when there are no statutory instructions.” MCR 7.119(E)(4).

The court may issue a temporary stay of enforcement without written notice if:

“(i) it clearly appears from the facts alleged in the motion that immediate and irreparable injury will result if a stay is not entered before a hearing, and

(ii) the moving party certifies to the court in writing that it made reasonable efforts to contact the other parties and agencies, but was unsuccessful.” MCR 7.119(E)(5)(a).

A temporary stay remains in place until a hearing can be held. MCR 7.119(E)(5)(b). A motion to dissolve a temporary stay must be heard within 24 hours, or less if the court finds good cause. Id. Such a motion takes precedence over all matters other than similar motions. Id.

D.Stipulations

“The parties may stipulate regarding any issue on appeal or any part of the record on appeal if the stipulation is embodied in an order entered by the court.” MCR 7.119(F).

E.Additional Evidence

The appellant may file a motion “to present proofs of [an] alleged irregularity in procedure before the agency, or to allow the taking of additional evidence before the agency,” if the motion is “filed with or included with the claim of appeal or application.” MCR 7.119(G). The time for filing briefs is stayed until the evidence is taken. Id.

F.Attorney Fees

“The plain language of MCL 600.2421d provides for ‘judicial review of the final action of a presiding officer in a contested case pursuant to [MCL 24.325].’ MCL 24.325 provides judicial review of a final action taken by the presiding officer under MCL 24.323 in regard to costs and fees.” Ayotte v Dep’t of Health and Human Servs, 337 Mich App 29, 43 (2021) (alteration in original). Because a circuit court’s authority is limited to judicial review of a presiding officer’s decision regarding attorney fees, MCL 24.325, a circuit court lacks jurisdiction to award attorney fees under MCL 24.323(1). Ayotte, 337 Mich App at 41. Additionally, “[t]he plain language of MCL 24.323(1) requires the ‘presiding officer’ to determine that the position of the agency was frivolous under one of the conditions identified in [MCL 24.323(1)(a)-(c)] before an award of attorney fees and costs can be made. Clearly, the circuit court was not a ‘presiding officer,’” as defined in MCL 24.322(4). Ayotte, 337 Mich App at 41, 49 (holding the circuit court erred in awarding attorney fees and costs under MCL 24.323(1) and MCL 600.2421d where “there was no final action on that issue for the circuit court to review” “[b]ecause the presiding officer did not make a determination regarding attorney fees”).

G.Standard of Review⁶

“Except when a statute or the constitution provides for a different scope of review, the court shall hold unlawful and set aside a decision or order of an agency if substantial rights of the petitioner have been prejudiced because the decision or order is any of the following:

(a) In violation of the constitution or statute.

(b) In excess of the statutory authority or jurisdiction of the agency.

(c) Made upon unlawful procedure resulting in material prejudice to a party.

(d) Not supported by competent, material and substantial evidence on the whole record.

(e) Arbitrary, capricious or clearly an abuse or unwarranted exercise of discretion.

(f) Affected by other substantial and material error of law.” MCL 24.306(1).

The circuit court may affirm, reverse, modify, or remand the decision or order for further proceedings. MCL 24.306(2). See also MCR 7.119(H).

The court must specifically identify any findings that lack support if the agency’s decision or order is not supported by competent, material, and substantial evidence. MCR 7.119(H)(1). The court must specifically identify any conclusions of law that are being reversed if the agency’s decision or order violates the Constitution or a statute, is affected by material error of law, or is affected by unlawful procedure that resulted in material prejudice to a party. MCR 7.119(H)(2).

In reviewing a decision of an administrative law judge (ALJ) to award or deny attorney fees and costs under MCL 24.323(1)(c) in a contested case under the APA, “whether an argument has ‘legal merit’ is not the proper legal question to be considered by the circuit court; . . . [r]ather, the standard, as set forth in MCL 24.323(1)(c), is whether the [agency’s] legal position ‘was devoid of arguable legal merit.’” Grass Lake Improvement Bd v Dep’t of Environmental Quality, 316 Mich App 356, 365 (2016), quoting MCL 24.323(1)(c) (emphasis added by the Court of Appeals). “A claim is not frivolous merely because the party advancing the claim does not prevail on it; . . . [i]nstead, a claim is devoid of arguable legal merit if it is not sufficiently grounded in law or fact, such as when it violates basic, longstanding, and unmistakably evident precedent.” Grass Lake, 316 Mich App at 365 (applying, as “highly persuasive,” authority “interpreting the nearly identical language found in MCL 600.2591(3)(a),” and holding that the ALJ properly denied the petitioner’s request for attorney fees; “although the [agency] did not prevail in the [underlying] contested case, its legal position was sufficiently grounded in law so as to have at least some arguable legal merit; . . . and hence it was not frivolous under MCL 24.323(1)(c)”) (quotation marks and citations omitted).