Category Archives: Administrative Law

Bishop Roderick S. Pabillo et al., v. Commission on Elections En Banc, G.R. No. 216098, 21 April 2015

Constitutional Law; Requisites for Judicial Review; Public Interest Exception – Indeed, the conduct of the upcoming 2016 Elections is dependent on the functional state of the existing PCOS machines purchased by the COMELEC. PCOS means “a technology wherein an optical ballot scanner, into which optical scan paper ballots marked by hand by the voter are inserted to be counted, is located in every precinct.” As the AES’s groundwork mechanism, it is imperative that the PCOS machines, come election day, are of optimal utility. Following the CAC’s recommendation to re-use the existing technology for the said elections, the COMELEC proceeded to procure services for the repair and refurbishment  of the PCOS machines. The COMELEC, however, through its Resolution No. 9922, decided to pursue a direct contracting arrangement with Smartmatic-TIM, which has now resulted in the execution of the Extended Warranty Contract (Program 1). Petitioners assail the validity of the foregoing courses of action mainly for violating the GPRA. Thus, if only to ensure that the upcoming elections is not mired with illegality at this basic, initial front, this Court, pursuant to its unyielding duty as final arbiter of the laws, deems it proper to thresh out the above-stated substantive issues, reasonably unfettered by the rigors of procedure.

Administrative Law; Government Procurement; Alternative Procurement Methods; Requisites – [T]he Manual of Procedures for the Procurement of Goods and Services of the Government Procurement Policy Board (GPPB Manual) explains that the GPRA allows the use of alternative methods of procurement in some exceptional instances, provided: (a) there is prior approval of the Head of the Procuring Entity on the use of alternative methods of procurement, as recommended by the BAC; and (b) the conditions required by law for the use of alternative methods are present. As additional requisites, (c) the Procuring Entity must ensure that the method chosen promotes economy and efficiency, and (d) that the most advantageous price for the government is obtained.

Words and Phrases; Proprietary Nature – Goods are considered to be of “proprietary nature” when they are owned by a person who has a protectable interest in them or an interest protected by intellectual property laws.

Administrative Law; Government Procurement; Services for Repair and Refurbishment Are Covered By Public Bidding Requirement – However, it is at once apparent that the “goods” subject of these cases neither pertain to the PCOS machines nor the software program aforementioned, but rather to the services for the machines’ repair and refurbishment, which in itself constitutes a distinct contract object that is susceptible to government procurement through competitive public bidding. As defined in Section 5 (h), Article I of the GPRA, “services such as the repair and maintenance of equipment” are included within the ambit of the term “goods” as applied within the context of the procurement law.

Intellectual Property Law; Scope of License to Use – At any rate, even if it is assumed that Smartmatic-TIM is the proprietary source of the services or that the intended repair and refurbishment would necessarily entail a modification of the PCOS hardware and software of which its existing intellectual property rights cover, the COMELEC is still not bound to engage Smartmatic-TIM on an exclusive basis. Based on the 2009 AES Contract, Smartmatic-TIM would grant the COMELEC a perpetual, but non-exclusive license to use, modify, and customize the PCOS systems and software, including the right to alter and modify the source code itself, for all future elections, when the latter exercises its option to purchase (which it eventually did), with certain limitations as hereunder stated:

XXX

Indeed, the license granted is but a natural incident of the COMELEC’s exercise of the OTP, by which it had acquired ownership over the PCOS machines; hence, the COMELEC should already be able to freely exploit them for the purpose that they were purchased. The only limitations, as may be above-gleaned, are on their commercialization as such would be clearly foreign to the contract’s objective. It would be both absurd and unfair if the COMELEC’s ability to effectively operate the machines would remain solely dependent on Smartmatic-TIM notwithstanding its acquired ownership over the same. While the intellectual property rights of Smartmatic-TIM were acknowledged by the COMELEC, by no means was it precluded – as it should not be precluded – from the complete utilization of the machines as long as it advances election-related purposes: XXX

Full text here.

Advertisements

MA. CAROLINA P. ARAULLO ET AL. v. BENIGNO SIMEON C. AQUINO III ET AL., G.R. NO. 209287, July 1, 2014

In a Decision dated July 1, 2014, the Supreme Court partially granted the consolidated petitions for certiorari and prohibition and declared the following acts and practices under the Disbursement Acceleration Program (DAP), National Budget Circular No. 541 and related executive issuances unconstitutional for violating Section 25(5), Article  VI of the 1987 Constitution and the doctrine of separation of powers, namely:

(a) The withdrawal of unobligated allotments from the implementing agencies, and the declaration of the withdrawn unobligated allotments and unreleased appropriations as savings prior to the end of the fiscal year and without complying with the statutory definition of savings contained in the General Appropriations Acts;

(b) The cross-border transfers of the savings of the Executive to augment the appropriations of other offices outside the Executive; and

(c) The funding of projects, activities and programs that were not covered by any appropriation in the General Appropriations Acts.

The Court further declared void the use of unprogrammed funds despite the absence of a certification by the National Treasurer that the revenue collections exceeded the revenue targets for non-compliance with the conditions provided in the relevant General Appropriations Acts (GAAs).

Remedial law; Certiorari and prohibition. The remedies of certiorari and prohibition are necessarily broader in scope and reach, and the writ of certiorari or prohibition may be issued to correct errors of jurisdiction committed not only by a tribunal, corporation, board or officer exercising judicial, quasi-judicial or ministerial functions but also to set right, undo and restrain any act of grave abuse of discretion amounting to lack or excess of jurisdiction by any branch or instrumentality of the Government, even if the latter does not exercise judicial, quasi-judicial or ministerial functions. Thus, petitions for certiorari and prohibition are appropriate remedies to raise constitutional issues and to review and/or prohibit or nullify the acts of legislative and executive officials.

Remedial law; Locus standi. Citing De Castro v. Judicial and Bar Council, the Supreme Court ruled that the assertion of a public right as a predicate for challenging a supposedly illegal or unconstitutional executive or legislative action rests on the theory that the petitioner represents the public in general. Although such petitioner may not be as adversely affected by the action complained against as are others, it is enough that he sufficiently demonstrates in his petition that he is entitled to protection or relief from the Court in the vindication of a public right. The Court likewise cited Agan, Jr. v. Philippine International Air Terminals Co., Inc., to explain that “[s]tanding is a peculiar concept in constitutional law because in some cases, suits are not brought by parties who have been personally injured by the operation of a law or any other government act but by concerned citizens, taxpayers or voters who actually sue in the public interest.”

Transcendental importance as a ground to waive locus standi. Each of the petitioners has established sufficient interest in the outcome of the controversy as to confer locus standi on each of them. In addition, considering that the issues center on the extent of the power of the Chief Executive to disburse and allocate public funds, whether appropriated by Congress or not, these cases pose issues that are of transcendental importance to the entire Nation, the petitioners included. As such, the determination of such important issues call for the Court’s exercise of its broad and wise discretion “to waive the requirement and so remove the impediment to its addressing and resolving the serious constitutional questions raised.”

Administrative law; Budget process; Implementation and funding of the Disbursement Allocation Program (DAP). Four phases comprise the Philippine budget process, specifically: (1) Budget Preparation; (2) Budget Legislation; (3) Budget Execution; and (4) Accountability.

The DAP was to be implemented and funded (1) by declaring “savings” coming from the various departments and agencies derived from pooling unobligated allotments and withdrawing unreleased appropriations; (2) releasing unprogrammed funds; and (3) applying the “savings” and unprogrammed funds to augment existing [program, activity or project] or to support other priority PAPs.

Administrative law; Nature of the DAP. The DAP was a government policy or strategy designed to stimulate the economy through accelerated spending. In the context of the DAP’s adoption and implementation being a function pertaining to the Executive as the main actor during the Budget Execution Stage under its constitutional mandate to faithfully execute the laws, including the GAAs, Congress did not need to legislate to adopt or to implement the DAP.

Constitutional law; The DAP is not an appropriation measure and does not contravene Section 29(1), Article VI. The President, in keeping with his duty to faithfully execute the laws, had sufficient discretion during the execution of the budget to adapt the budget to changes in the country’s economic situation. He could adopt a plan like the DAP for the purpose. He could pool the savings and identify the PAPs to be funded under the DAP. The pooling of savings pursuant to the DAP, and the identification of the PAPs to be funded under the DAP did not involve appropriation in the strict sense because the money had been already set apart from the public treasury by Congress through the GAAs. In such actions, the Executive did not usurp the power vested in Congress under Section 29(1), Article VI of the Constitution [that no money shall be paid out of the Treasury except in pursuance of an appropriation made by law].

Requisites of a valid transfer of appropriated funds under Section 25(5), Article VI. The transfer of appropriated funds, to be valid under Section 25(5), [Article VI of the Constitution], must be made upon a concurrence of the following requisites, namely: (1) There is a law authorizing the President, the President of the Senate, the Speaker of the House of Representatives, the Chief Justice of the Supreme Court, and the heads of the Constitutional Commissions to transfer funds within their respective offices; (2) The funds to be transferred are savings generated from the appropriations for their respective offices; and (3) The purpose of the transfer is to augment an item in the general appropriations law for their respective offices.

It is then indubitable that the power to augment was to be used only when the purpose for which the funds had been allocated were already satisfied, or the need for such funds had ceased to exist, for only then could savings be properly realized. This interpretation prevents the Executive from unduly transgressing Congress’ power of the purse.

Savings, defined. The definition of “savings” under the 2011, 2012 and 2013 GAAs refer to portions or balances of any programmed appropriation in this Act free from any obligation or encumbrance which are: (i) still available after the completion or final discontinuance or abandonment of the work, activity or purpose for which the appropriation is authorized; (ii) from appropriations balances arising from unpaid compensation and related costs pertaining to vacant positions and leaves of absence without pay; and (iii) from appropriations balances realized from the implementation of measures resulting in improved systems and efficiencies and thus enabled agencies to meet and deliver the required or planned targets.

The Court agreed with petitioners that respondents were forcing the generation of savings in order to have a larger fund available for discretionary spending. Respondents, by withdrawing unobligated allotments in the middle of the fiscal year, in effect deprived funding for PAPs with existing appropriations under the GAAs.

The mandate of Section 28, Chapter IV, Book VI of the Administrative Code is to revert to the General Fund balances of appropriations that remained unexpended at the end of the fiscal year. The Executive could not circumvent this provision by declaring unreleased appropriations and unobligated allotments as savings prior to the end of the fiscal year.

Augmentation is valid only when funding is deficient. The GAAs for 2011, 2012 and 2013 set as a condition for augmentation that the appropriation for the PAP item to be augmented must be deficient, to wit: – x x x Augmentation implies the existence in this Act of a program, activity, or project with an appropriation, which upon implementation, or subsequent evaluation of needed resources, is determined to be deficient. In no case shall a non-existent program, activity, or project, be funded by augmentation from savings or by the use of appropriations otherwise authorized in this Act.

The President cannot substitute his own will for that of Congress. The Court held that the “savings” pooled under the DAP were allocated to PAPs that were not covered by any appropriations in the pertinent GAAs. Although the [Office of the Solicitor General] rightly contends that the Executive was authorized to spend in line with its mandate to faithfully execute the laws (which included the GAAs), such authority did not translate to unfettered discretion that allowed the President to substitute his own will for that of Congress. He was still required to remain faithful to the provisions of the GAAs, given that his power to spend pursuant to the GAAs was but a delegation to him from Congress. Verily, the power to spend the public wealth resided in Congress, not in the Executive. Moreover, leaving the spending power of the Executive unrestricted would threaten to undo the principle of separation of powers.

Cross-border transfers or augmentations are prohibited. By providing that the President, the President of the Senate, the Speaker of the House of Representatives, the Chief Justice of the Supreme Court, and the Heads of the Constitutional Commissions may be authorized to augment any item in the GAA “for their respective offices,” Section 25(5) has delineated borders between their offices, such that funds appropriated for one office are prohibited from crossing over to another office even in the guise of augmentation of a deficient item or items. Thus, we call such transfers of funds cross-border transfers or cross-border augmentations.

Regardless of the variant characterizations of the cross-border transfers of funds, the plain text of Section 25(5) disallowing cross-border transfers was disobeyed. Cross-border transfers, whether as augmentation, or as aid, are prohibited under Section 25(5).

No violation of equal protection. Petitioners claim that the Executive discriminated against some legislators on the ground alone of their receiving less than the others could not of itself warrant a finding of contravention of the Equal Protection Clause. The denial of equal protection of any law should be an issue to be raised only by parties who supposedly suffer it, and, in these cases, such parties would be the few legislators claimed to have been discriminated against in the releases of funds under the DAP. The reason for the requirement is that only such affected legislators could properly and fully bring to the fore when and how the denial of equal protection occurred, and explain why there was a denial in their situation. The requirement was not met here.

Operative fact doctrine. The doctrine of operative fact recognizes the existence of the law or executive act prior to the determination of its unconstitutionality as an operative fact that produced consequences that cannot always be erased, ignored or disregarded. In short, it nullifies the void law or executive act but sustains its effects.  It provides an exception to the general rule that a void or unconstitutional law produces no effect. But its use must be subjected to great scrutiny and circumspection, and it cannot be invoked to validate an unconstitutional law or executive act, but is resorted to only as a matter of equity and fair play. It applies only to cases where extraordinary circumstances exist, and only when the extraordinary circumstances have met the stringent conditions that will permit its application.

The operative fact doctrine applies to the implementation of the DAP. To declare the implementation of the DAP unconstitutional without recognizing that its prior implementation constituted an operative fact that produced consequences in the real as well as juristic worlds of the Government and the Nation is to be impractical and unfair. Unless the doctrine is held to apply, the Executive as the disburser and the offices under it and elsewhere as the recipients could be required to undo everything that they had implemented in good faith under the DAP. That scenario would be enormously burdensome for the Government. Equity alleviates such burden.

Full text here.

 

 

 

JOINT ADMINISTRATIVE ORDER NO. 2014-01 (June 2, 2014): REVISED SCHEDULE OF FINES AND PENALTIES FOR VIOLATIONS OF LAWS, RULES AND REGULATIONS GOVERNING LAND TRANSPORTATION

The Land Transportation Office and the Land Transportation Franchising and Regulatory Board issued new rules prescribing penalties for violations of licensing, motor vehicle registration/renewal/operation, dimension/specifications/weight and load limits, and franchise requirements.

All apprehensions are deemed admitted unless contested by filing a written contest within five (5) days from date of apprehension. Failure of the driver to pay the corresponding penalty within 15 days from date of apprehension shall cause the automatic suspension of his driver’s license for a period of 30 days from the date of apprehension, in addition to the prescribed fines and penalties.

Joint AO No 2014-01 Revised Schedule of Fines and Penalties

 

 

RAY PETER O. VIVO v. PHILIPPINE AMUSEMENT AND GAMING CORP., G.R. No. 187854, November 12, 2013

Administrative law; Right to counsel. A right to counsel is not indispensable in an administrative proceeding “because administrative investigations are themselves inquiries conducted only to determine whether there are facts that merit disciplinary measures against erring public officers and employees, with the purpose of maintaining the dignity of government service.” In any case, it was held in Gonzales v. Civil Service Commission (G.R. No. 156253) that “any defect in the observance of due process is cured by the filing of a motion for reconsideration, and that denial of due process cannot be successfully invoked by a party who was afforded opportunity to be heard.”

Petitioner cannot claim that he was denied due process and deprived of his right to counsel when he was assisted by a counsel during the initial stage of the administrative proceedings. Petitioner’s counsel filed in behalf of petitioner the letter-requests to be furnished documents, answer to memorandum of charges, the letter-request for re-setting of the conference, and even the motion to reconsider the decision of the Board of Directors to dismiss him from the service. The Court finds nothing legally objectionable to PAGCOR’s denial of petitioner’s request to re-schedule the conference because his counsel would not be able to attend.

Administrative law; Right to due process. In administrative due process, “[t]he essence of due process is to be heard, and, as applied to administrative proceedings this means a fair and reasonable opportunity to explain one’s side, or an opportunity to seek a reconsideration of the action or ruling complained of. Administrative due process cannot be fully equated with due process in its strict legal sense, for in the former a formal or trial-type hearing is not always necessary, and technical rules of procedure are not strictly applied.” CA correctly found that petitioner’s pleadings explicitly admitted his dismissal was effected through board resolutions. Assuming arguendo that there was no board resolution approving his dismissal, such absence did not render the dismissal illegal but rather unauthorized that can be subject of ratification.

Full text here.

THE PROVINCE OF AKLAN v. JODY KING CONSTRUCTION AND DEVELOPMENT CORP., G.R. Nos. 197592 & 202623, November 27, 2013

Remedial law; Doctrine of primary jurisdiction. The doctrine of primary jurisdiction holds that if a case is such that its determination requires the expertise, specialized training and knowledge of the proper administrative bodies, relief must first be obtained in an administrative proceeding before a remedy is supplied by the courts even if the matter may well be within their proper jurisdiction. It applies where a claim is originally cognizable in the courts, and comes into play whenever enforcement of the claim requires the resolution of issues which, under a regulatory scheme, have been placed within the special competence of an administrative agency. In such a case, the court in which the claim is sought to be enforced may suspend the judicial process pending referral of such issues to the administrative body for its view or, if the parties would not be unfairly disadvantaged, dismiss the case without prejudice. The objective of the doctrine of primary jurisdiction is to guide the court in determining whether it should refrain from exercising its jurisdiction until after an administrative agency has determined some question or some aspect of some question arising in the proceeding before the court.

Exceptions to the rule on primary jurisdiction. There are established exceptions to the doctrine of primary jurisdiction, such as: (a) where there is estoppel on the part of the party invoking the doctrine; (b) where the challenged administrative act is patently illegal, amounting to lack of jurisdiction; (c) where there is unreasonable delay or official inaction that will irretrievably prejudice the complainant; (d) where the amount involved is relatively small so as to make the rule impractical and oppressive; (e) where the question involved is purely legal and will ultimately have to be decided by the courts of justice; (f) where judicial intervention is urgent; (g) when its application may cause great and irreparable damage; (h) where the controverted acts violate due process; (i) when the issue of non-exhaustion of administrative remedies has been rendered moot; (j) when there is no other plain, speedy and adequate remedy; (k) when strong public interest is involved; and, (l) in quo warranto proceedings. However, none of the foregoing circumstances is applicable in the present case. The doctrine of primary jurisdiction does not warrant a court to arrogate unto itself authority to resolve a controversy the jurisdiction over which is initially lodged with an administrative body of special competence. All the proceedings of the court in violation of the doctrine and all orders and decisions rendered thereby are null and void.

Administrative law; The Commission on Audit (COA) has primary jursidiction over money claims against the government. It is the COA and not the RTC which has primary jurisdiction to pass upon petitioner’s money claim against respondent local government unit. Such jurisdiction may not be waived by the parties’ failure to argue the issue nor active participation in the proceedings. Respondent’s collection suit being directed against a local government unit, such money claim should have been first brought to the COA. Hence, the RTC should have suspended the proceedings and refer the filing of the claim before the COA. Moreover, petitioner is not estopped from raising the issue of jurisdiction even after the denial of its notice of appeal and before the CA.

Full text here.

NATIONAL ARTIST FOR LITERATURE VIRGILIO ALMARIO et al., v. THE EXECUTIVE SECRETARY et al., G.R. No. 189028, July 16, 2013

Pleadings and practice. It has been held that the remedies of prohibition and injunction are preventive and, as such, cannot be availed of to restrain an act that is already fait accompli. Where the act sought to be prohibited or enjoined has already been accomplished or consummated, prohibition or injunction becomes moot.

Nevertheless, even if the principal issue is already moot, this Court may still resolve its merits for the future guidance of both bench and bar. Courts will decide a question otherwise moot and academic if it is “capable of repetition, yet evading review.”

It is an opportune time for the Court to assert its role as republican schoolmaster, a teacher in a vital national seminar. There are times when the controversy is of such character that, to prevent its recurrence and to assure respect for constitutional limitations, this Court must pass on the merits of a case.

Administrative law. We have held that an administrative regulation adopted pursuant to law has the force and effect of law. Thus, the rules, guidelines and policies regarding the Order of National Artists jointly issued by the CCP Board of Trustees and the NCCA pursuant to their respective statutory mandates have the force and effect of law.  Until set aside, they are binding upon executive and administrative agencies, including the President himself/herself as chief executor of laws.

Constitutional law; Equal protection. There was a violation of the equal protection clause of the Constitution when the former President gave preferential treatment to respondents Guidote-Alvarez, Caparas, Mañosa and Moreno.  The former President’s constitutional duty to faithfully execute the laws and observe the rules, guidelines and policies of the NCCA and the CCP as to the selection of the nominees for conferment of the Order of National Artists proscribed her from having a free and uninhibited hand in the conferment of the said award. The manifest disregard of the rules, guidelines and processes of the NCCA and the CCP was an arbitrary act that unduly favored respondents Guidote-Alvarez, Caparas, Mañosa and Moreno.  The conferment of the Order of National Artists on said respondents was therefore made with grave abuse of discretion and should be set aside.

Full text here.