Admin Outline 2008

8/14/2019 Admin Outline 2008

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PART I: ADMIN AGENCIES AND THE CONSTITUTION

The Nondelegation DoctrineAnalysis:

1. Three formulations of the nondelegation doctrine:A. Congress cant delegate periodminority view.B. Nondelegation doctrine imposes limitsCongress cant give away

unfettered power; must give guidelines but how much guidance isdebatablewidely-held view.C. Posner-Vermuele: once Congress has passed a law and given it

away, its no longer w/in their purview and the exec/judiciary nowhas the power. (But there are powers that Congress cannot giveaway, like powers vested in sub-committees, constitutional powerslike Senates power to confirm, cant give away power to vote etc.)

2. Goals promoted by the nondelegation doctrine:A. Political accountability (since Prez is democratically elected)B. Democratic values of representative govt and accountability

decisions made by the collective Congress better protects freedomand reflects will of the people.

C. Social K theory: representative decision-making allows people tomaintain certain private rights unless there is explicit authorizationto turn them into c/l wrongs.

D. Promotes rule of law values:i. Promotes planningii. Transparency: tells you what is forbidden and what is

permissibleiii. Cabins discretionary authority of enforcement officialsiv. Constitutions dual branch law-makingv. Promotes factions

3. Congress cant grant unfettered discretion/ authority over very broadsubject matter. ~ Schechter

4. Congress must provide intelligible principles to cabin discretion andsubject matter. It must provide meaningful guidance to the agencyand a court must be able to measure agency action against thatlimitation to determine if there was compliance w/ Congress will.~ Amalgamated

5. Reverse engineering/constitutional avoidance: as administrativeagencies become more necessary for the bureaucracy to function, ctsmight be persuaded by the end goal to infer intelligible principles orpoint to terms in the statute and call them limiting terms in order tosave a statute and avoid answering the constitutional q.~ Amalgamated/Benzene

6. Limiting discretion: Benzene -look to the purpose of the statute inorder to infer limiting principles that Congress mustve reasonably

meant7. Limiting subject matter: American Trucking -the broader the subject

area, the more the need for limiting principles; but cts will not second-guess Congress when it delegates policy-making authority to thosewho execute or apply the laws

Cases1. CASE: ALA Schechter Poultry v US

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i. Subject matter: ESAs subject matter is more narrow thanNIRA/national economy

ii. Discretion: fair and equitable seems as vague as unfaircompetition but probably has more meaning by this point inhistory

iii. No delegation to private groups here.iv. APA has passed so less unsure about agencies by now.

3. CASE: Industrial Union v American Petroleum Institute (The BenzeneCase)A. Occupational and Safety Hazard Act:

i. 3.8: the std requires conditions or practices, reasonably necessary or appropriate to provide safe or healthfulemployment and places of employment

ii. 6(b)(5): for toxic materials, the std is set at that which most adequately assures, to the extent feasible, on the basis of thebest available evidence, that no employee will suffer materialimpairment.

B. Facts:i. OSHA has defined benzene to be a carcinogen. OSHA has

defined carcinogens to be a type of toxic material. Thusbenzene = toxic material. OSHAs policy is that carcinogenshave no safe levels thus lowest feasible level is best.

ii. In 1971, per the Occupational Safety and Hazard Act, SoL setthe permissible exposure level to benzene at 10 ppm. OSHAsresearch said that 10 ppm would require millions in compliancecosts but did not quantify the amount of the benefits to eachcategory of workers (but according to their studies, the benefitsare probably small).

iii. OSHA recommends further limiting exposure level to 1ppm. (Ctreasonably assumes that further limitations drive upcompliance costs.) OSHA did not have scientific evidence onthe effects but rather, assumed a direct correlation b/texposure and harm: the less exposure, the less harm, thusOSHA wanted to lower as much as they could. They solicitedcomments as to whether 1 ppm was feasible; did not solicit onwhether exposure to less than 10 ppm would produce healthbenefits or not.

C. Held: SC says that as a threshold matter, SoL must find thatbenzene poses a significant health risk and that a new, lower std isreasonably necessary to combat that health risk.

D. Reasoning:i. If the Ct agrees w/ the govts interpretation that the Act does

not require the risk from a carcinogen to be sufficientlyquantifiable and understandable, then that would amount to asweeping delegation of power and it might beunconstitutional under Schechter , thus Ct implies anintelligible principle into the statute in order to avoid theconstitutional question. (Its not clear though that the SCsinterpretation is unreasonable so plurality probably didntabuse its authority.)

ii. The purpose of the Act was to eliminate significant risks of harm, not to create a risk-free workplace. Congress could nothave meant to OSHA the power to regulate merely b/c the

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substance posed some harm. Under such an interpretation,OSHA would have the power to impose enormous costs thatmight produce little to no benefits.

iii. 3.8 says SoL has to promulgate stds that provide safe orhealthful employment. Safe or healthful means the absenceof significant health risks , which is a limiting principle thatallows OSHA to reach certain kinds of conduct only.

iv. Thus as a threshold matter, the SoL must first find that it ismore likely than not that benzene exposure is a significant health risk that can be eliminated through changes in practice.Significant risk is not a mathematical straitjacket. SC leavesit up to OSHA to define that and prove that it was met. It doesnot require scientific certainty.

v. This is like Amalgamated SC infers an intelligible principle tocabin discretion and save the statuteSC probably considersthe purpose of the statute to be valuable. On the other hand, aliteral reading of 6(b)(5) seems to require that SoL issueregulations even if one person is at risk of suffering materialimpairment.

E. Powell concurrence: Even if OSHA had met its threshold burden of proving that benzene is a significant health risk, the statute furtherrequires a cost/benefits analysis. Congress would not haveintended a policy that would significantly impair the US economiccompetitiveness if OSHA could ignore economic considerations andfocus solely on health considerations.

F. Renquist, concurring in the judgment that the regulation is notlegal:i. This is a flat out unconstitutional delegation of power w/ no

limiting principles.ii. Is unwilling to infer a limiting term b/c doesnt want cts to be in

charge of cleaning up Congress mess afterwards if Congressalways declines to put in limitations.

iii. Renquist is ok w/ the c/l std of reasonability b/c he has faith inthe cts and cts have plenty of experience with that. Hesprobably could not justify using reasonableness as a std foragency regulations since agencies are perhaps more politicalbodies and are likely to run amuck as opposed to cts.

G. Dissenti. The plurality improperly requires the SoL to show that a

carcinogen is more likely than not a significant health riskwhen all that the statute requires is the std be reasonablynecessary or appropriate. Nothing in the statute or thelegislative history supports the plurality opinion.

ii. Its not proper for the cts to infer terms and save the statute.Cts should stay out of this, a la Lochner .iii. Ct should defer to the agencys determination that exposuremore than 1 ppm posed a definite, albeit unquantifiable, riskwhich further amounts to a significant risk.

H. Probs w/ ignoring the constitutional question and inferring in terms:i. Reduces Congress incentives to legislate w/ particularityii. Maybe reflects a misunderstanding of the science, or of

carcinogens

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iii. Increases costs and uncertainties associated w/ interpreting therules

iv. Might lead to other cases where cts reject actual legislative judgments

4. CASE: Whitman v American Trucking A. Facts: Sec 109(b)(1) of the CAA instructs the EPA to promulgate

rules establishing ambient air quality stds, the attainment and

maintenance of which, in the judgment of the Administrator, basedon the criteria of Sec 108, and allowing an adequate margin of safety, are requisite to protect the public health. App Ct hadfound that the EPAs interpretation (but not the statute itself) of requisite violated the nondelegation doctrine.

B. Held: A constitutional delegation of power need not require the EPAto prove a determinate criterion for saying how much of theregulated harm is too much. App ct reversed.

C. Reasoning:i. When Congress confers decision-making authority to an

agency, Congress must lay down by legislative act anintelligible principle to which the acting body must conform to.

ii. An agency cannot cure an unlawful delegation by adopting inits discretion a limiting construction of the statute. The verychoice of opting in and opting out is an exercise of theforbidden legislative authority.

iii. Requisite is an intelligible principle. SC agrees w/ the govtsdefinition of requisite to mean sufficient but not more than isnecessary.

iv. This provision is well w/in the outer bounds of Ctsnondelegation precedents. The degree of agency discretionthat is acceptable will vary according to the scope of the powercongressionally conferred. More agency discretion requirestighter intelligible principles.

v. Where the agency power is extremely limited, the Act need notprovide intelligible principles. But when the EPAs regs mayaffect the entire national economy, substantive legislativeguidance may be necessary. Words like imminent, necessaryand hazardous (taken from Touby ) are sufficient intelligibleprinciples. There is no requirement that agencies specify hownecessary or how hazardous something must be. Agency getsto decide what requisite means.

vi. Cts will not second-guess Congress regarding the permissibledegree of policy judgments that can be left to those executingor applying the laws.

vii. After this approval of a broad delegation of power, itll beharder to get a majority on the Court to find an unconstitutional

delegation. The nondelegation doctrine has been weakened.D. Thomas, concurring:i. There must be some limit as to what authority Congress can

delegate, even if they tried to delegate w/ intelligible principles. The existence of intelligible principles doesnt automatically justify a delegation.

ii. Cant give big decisions to agencies, even if accompanied byintelligible principles. Thomas is concerned w/ broad subject

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matter delegation and not totally persuaded by the efficacy of intelligible principles to cabin authority.

iii. Prob is that Art I vests all legislative powers in Congress;intelligible principles arent mentioned in the Constitution.

The Executive, Congress and Administration

Analysis1. Congress can delegate quasi-judicial and quasi-legislative powers toagencies that sit in the executive branch. Once Congress makes thedelegation, it cannot reserve power to one of its own houses in orderto exercise continuous authority over that agency. It must go throughdual-branch lawmaking to pass stds in order to ensure that the agencyhas complied w/ its will. ~ Myers/Humphreys

2. Reserving power to one house undermines the value of dual-branchlawmaking, representative democracy and has the potential for ahold-up game over the executive; might also result from unduepolitical influence over one house of Congress or more likely, asubcommittee of that house. ~ Myers/Chadha/Bowsher

3. Aggrandizement/Encroachment: thought to be a greater threat tolawmaking b/c it erodes SoP, benefits of political accountability:A. Myers /Chadha: one-house veto that results in greater power to a

unit than the whole entity is unconstitutional; we trust both housesacting together

B. Bowsher: even reservations that seem to be functionally the samething as normal lawmaking may not pass constitutional muster

4. Independence: b/c the prez can continue to exercise his constitutionalfunctions despite the limitsA. Humphreys Executor: When the agent exercises quasi-judicial or

quasi-legislative power, Prez need not solely exercise removalpower if Congress has said so

B. Mistretta: look at the purpose and function of the delegation andask whether it goes to the core function of the branch w/ alsoimpeding it to determine constitutionality

C. Morrison: if the existence of the delegation wont impede thefunction of the executive, and there are good cause limitations,then it probably means that the agency is not entirelyindependent, and can be limited by Congress; although Congressdid not specify what not entirely independent means.

5. Truly independent agencies officers serve at the pleasure of thepresident and can be removed at will.

6. Practically speaking, even if a president cant find a rule-based reasonto remove an officer, he can exert other political pressure and othertactics to make the job unattractive and effectively compel aresignation. Agency heads often voluntarily leave on their own w/regime changes.

Cases1. Myers and Humphreys Executor

A. CASE: Myers v US -aggrandizement

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i. Myers is appointed as postmaster general; statute providesthat PGs shall be appointed and may be removed by thePresident and w/ the advice and consent of Congress.

ii. Held: The postmaster was a purely executive officer and thusthe prez should be able to control him. SC strikes down theportion of the statute requiring the advice and consent of Senate.

iii. Truthfully, the PG exercises quasi-legislative and quasi-judicialduties including setting stamp prices, prosecuting postal-related crimes, allocating the post office budget etc.

B. CASE: Humphreys Executor v US -independencei. Prez wants to unilaterally remove FTC commissioner whose

views differ from Prez. Law says Prez can only remove forenumerated good cause reasons, ie malfeasance etc.

ii. Held: Myers does not control. Prez can only remove for reasonsgiven in the statute. The statutory restrictions are not anunconstitutional encroachment into exec power.

iii. FTC commissioners exercise quasi-legislative and quasi-judicialroles like making regs on antitrust issues and prosecuting

antitrust violations, consumer frauds etc.C. The diff b/t Myers and Humphreys Executor:i. In Myers , Congress had passed a law that reserved or

aggrandized power to the Senate to remove a PG in conjunctionw/ the Prez. When half of Congress is acting, its moreproblematicwere worried about one house exercising powerto hold up the president, or making unconsidered decisionssince the other house isnt participating; it tends to erode thevalue of dual-branch lawmaking.

ii. In Humphreys Executor , Congress passed a law limiting theability of the Prez to remove commissioners but did not reserveany power to any one house of Congress. Unless that lawencroaches on executive power or is unconstitutional in someother way, the Prez must abide by the rule. The law was notunconstitutional b/c the position was created by Congress tocarry into effect an independent regulatory agency that hadquasi-legislative and quasi-judicial powers as well asenforcement powers. The law did not threaten SoP byencroaching on the executives power or aggrandizingCongress powerthey werent giving themselves any extrapower.

iii. Hypo: If both houses of Congress pass a law to fire the PG, isthat constitutional? Yes considering the Prez has veto powerthe process would remain democratic and in accordance w/dual-branch lawmaking.

2. CASE : INS v Chadha -aggrandizementA. Facts: Under immigration law, the AG can choose to stay a

deportation if the deportation would result in extreme hardship tothe alien. He must report this stay to Congress. If the House orSenate then passes a resolution (legislative veto) denying the stay,then AG must continue w/ the deportation. Here, AG stayedChadhas deportation and the House passed a rez overturning thatdecision w/o any public hearing, statement of reasons or recordedvote.

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B. Held: The one-house veto is unconstitutional. One house of Congress cannot veto a decision made by an agency that it hasdelegated power to.

C. Reasoning:i. By retaining power in the form of a one-house veto, that

increases the power of one house beyond their constitutionallygiven maximum, thus its a new power . Alternatively, its

lawmaking by one house only. Were less worried whenCongress gives power away. Congress cannot subdivide itself and give power to individual units in a way that the entireCongress doesnt have. The Constitution lays out the onlypermissible ways in which one house can act on its own.

ii. Majoritys arguments on presentment/bicameralism not thatpersuasive b/c in each, at the time of the bills passing, the prezand both houses approve of it. Might argue that this isnt alaw thus no need to present to the prez but that creates aslippery slope and raises qs about what else Congress can do if it can do more than pass laws.

iii. Majority will persuade by showing that theres something diff about entrusting one house versus an agency. We dont trustone house acting alone but rather, we trust both houses actingtogether.

iv. There are no intelligible principles to guide the reservation ordelegation of power to itself.

v. We dont want Congress to indicate its approval of legislativechange by inaction or the refusal to pass a one-house veto,which could imply endorsement, acquiescence, passivity,indecision or indifference. We want them to make affirmativedecisions.

3. CASE: Bowsher v Synar -encroachmentA. Facts: Under the Gramm-Rudman Act, the Prez can appoint a

Comptroller General (who seems to exercise both quasi-legislativebudgetary duties and quasi-executive budgetary duties) from a listof candidates supplied by the Speaker of the House and the SenatePresident. Senate must then confirm the appointee. The CG canbe removed from office at any time by a Joint Resolution of Congress for one of the enumerated for cause reasonsdisability, inefficiency, breach of duty, malfeasance or moralturpitude.

B. Held: Congress cannot retain removal power (beyond that in theConstitution) over an executive agent exercising executive powers.

C. Reasoning:i. The real issue is whether Congress gave any more power over

the CG than it had previously. Its not clear that they did. The

joint resolution process is similar to the normal lawmakingprocess. Congress seems to be giving itself authority verysimilar to what it already possessed.

ii. Methods of Removal:a. Joint resolution requires a presidential signature or a 2/3

override if prez vetoessame form as a Bill. (Alternatively,the Constitution calls for impeachment of the Prez, V-P, andall civil officers of the United States, who may only beimpeached and removed for "treason, bribery, or other high

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crimes and misdemeanors. Impeachment requires asimple majority in the House followed by a 2/3 majority inthe Senate to convict.)

b. If the Joint Resolution provision didnt exist and Congresswanted to get rid of the CG, they could impeach him, havethe prez fire him or pass a new statute, eliminate theposition and create a new one.

c. If the prez agrees w/ the position, then impeaching is easierthan joint resolution.iii. Majority holds that the Constitution does not contemplate an

active role for Congress in the supervision of executive officers.If Congress could remove exec agents, then theyd interfere w/SoP.

iv. But the Constitution only provides one way for Congress toremove officers of the US: by impeachment, which is a long andcumbersome process and also limited to cases of treason,bribery or other high crimes and misdemeanors. If this is theonly way to remove, then Congress was trying to find an easierway to the removal of exec agents.

v. Although Congress cannot reserve to itself the power to removeexecutive officials, it can limit the prez ability to removecertain officers, who exercise quasi-legislative or quasi-judicialduties by definition, b/c the restrictions dont really interfere w/the Prez ability to carry out his constitutional duties. Sorestrictions are not encroachments.

4. CASE: Mistretta v US- independenceA. Facts: Congress delegated power to the US Sentencing

Commission, a 7-member board, residing in the judicial branch. The Commission has the legal power to write sentencing guidelinesthat are binding on fed judges so as to reduce sentencing disparity.Act empowered prez to appoint all members w/ advice/consent of Senate, chosen from a list of candidates compiled by the Judicial

Conference of the US. Act also allows prez to remove members forgood cause, ie neglect of duty or other good cause shown.

B. Held: The Sentencing Commission is not an unconstitutionaldelegation of power and does not encroach upon the judicialfunction or violate SoP.

C. Reasoning:i. Congress decision to create an independent body to

promulgate sentencing rules is not unconstitutional unlessCongress has vested in the Commission powers that are moreappropriately performed by another branch or that underminesthe integrity of the judiciary.

ii. Congress may delegate to the judicial branch nonadjudicatoryfunctions that do not invade the prerogatives of another branchand that are central to the mission of the judiciary.

iii. Hypo: what if theres a benzene commission, like thesentencing commission, that only regulates benzene? Thatsprobably an unconstitutional delegation; benzene isnt part of the typical judicial authority as the judiciary can only decidecases and controversies but cant make laws about benzene.Sentencing on the other hand, is very closely related to what

judges already do.

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iv. How can the executive allow the NLRB to adjudicate labor casesbut the judiciary cant enact a benzene commission? The corefunctions are diff. Judges arent elected whereas the exec is,thus we want judges to be insulated from political influence.We dont trust judges w/ issues that might be susceptible tooutside influence. Were less concerned when the exec doessome adjudicating b/c at least hes held politically accountable.

5. CASE: Morrison v Olson: independentA. Congress passed statute that gave a court the power to appoint anindependent counsel to prosecute high level political officials;prez could remove only for good cause per the statute.

B. SC ruled that such a delegation is constitutional b/c the existenceof the independent counsel did not prevent the prez fromexercising his constitutionally specified functions. The goodcause limitations did not impede the functionality of theexecutive.

C. The independent counsel was not entirely independent b/c shecould be suspended for good cause by the prez, though the ctdid not specify what that is.

Article II CourtsAnalysis

1. Jurisdictional facts are reviewed by an Art III ct de novo. ~ CrowellA. Brandeis Crowell dissent + response as to why de novo might be

better.2. State law claims cannot be final and binding and only subject to

ordinary review by a non-Art III ct. ~ Northern Pipeline/Union Carbide3. Public rights can be adjudicated in legislative courts.

~ Crowell/Northern Pipeline4. Does the delegation impair either of Schors interests?

A. Personal: right to be heard in front of a judge free from the political

influence of other branches? Can be waivedB. Structural: Art IIIs independence and role in the govt isnonetheless protectedi. Extent to which the essential attributes of judicial power are

reserved to Art III cts and whether the extent to which thelegislative ct exercises the range of power and jurisdictionnormally reserved to Art III cts

ii. Origins and importance of the right at issueiii. Concerns that drove Congress to depart from Art III

Cases1. CASE: Crowell v Benson

A. Facts: Crowell, a deputy commissioner of the US EmployeesCompensation Commission makes a factual finding that Knudsenwas injured while employed by Benson on US waters. ThusKnudsen is owed workmans compensation. Benson sues to enjoinenforcement arguing that Crowells factual determination to trigger

jurisdiction was unconstitutional.B. Held: In private rights cases, agencies are allowed to make

ordinary factual findings but cts have to decide jurisdictional facts

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for themselves. But the decision must be reviewable by a court.Remanded for dist ct to find the jurisdictional facts for itself.

C. Reasoning:i. Private vs public rights:

a. Private: liability of one individual to another; has to bedecided by Art III cts even though an agency may makesome factual findings

b. Public: cases arising b/t individual and govt; can be decidedby legislative cts b/c the rights are issue arecongressionally-created thus govt can decide how to trythem; legislative cts ok as long could survive due processchallenges

ii. The essential attributes of decision must remain in an ArticleIII court, but so long as it does, Congress may utilizeadministrative decisionmakers in those private rights caes thatarise in the context of a comprehensive federal regulatoryscheme.

iii. AT: jurisdictional facts: trigger application of the statute;although an agency could make a jurisdictional factdetermination, it must be reviewed de novo by cts. But itshard to determine what a jurisdictional fact and what anordinary fact is. (Cts are really using the

jurisdictional/ordinary fact distinction to categorize facts thatshouldnt be determined by an agency.)

iv. AT: ordinary facts: can be determined by an agency; theres ahistory of using nonjudicial factfinding and theres efficiencygains due to agency expertise

D. Dissent, Brandeis:i. Theres no doubt that the final arbiters of any fact or law q are

the fed cts. The only real question is whether these facts arereviewed de novo or whether the ct reviews a record compiledby the agency and then gives it deference.

ii. Brandeis says that the majority wants jurisdictional facts to befound de novo by why not just let the administrative bodycollect the record and then let the dist ct judge decide the

jurisdictional facts.iii. Probs w/ Brandeis reasoning that its ok to let a judge look at

an admin record instead of de novo: admin agency hasincentives to skew the record in their favor so judge wont belooking at an impartial record.

2. CASE: Northern Pipeline v Marathon Pipeline A. Facts: NP is reorganizing in bankruptcy ct, an Article I court which

had most traditional Article III powers. The relevant statute givesbankruptcy cts jurisdiction over all civil proceedings arising

under the federal bankruptcy law or arising or related tobankruptcy proceedings so MP filed a state law K claim against NPin bankruptcy ct.

B. Held: Plurality struck down the part of the statute that allowedbankruptcy cts to decide ordinary state law claims as being anexcessive delegation of adjudicatory powers.

C. Reasoning:i. Plurality said that Art I cts could be military courts, territorial

courts or cts that adjudicated public rights.

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ii. The statute had impermissibly removed most, if not all, of theessential attributes of judicial power from Art III cts and vestedthem in non-Art III cts.

iii. Admin agencies cant handle private rights cases b/c that wouldcreate substantial inroads into functions that have traditionallybeen performed by the judiciary. W/ public rights cases,Congress created the right so can create presumptions, assign

burdens of proof or create special tribunals.iv. Today:a. If theres a q of whether a claim even belongs in bankruptcy

ct, the issue goes to the dist ct. That decision can then goto the appellate ct who looks at it de novo.

b. Bankruptcy cts settle assets and all related tort/K claims sothat payments/judgments and assets can be properlydivided. Then appellate court would review the bankruptcycts judgment under a clearly erroneous std which is moredeferential than de novo.

c. Practically speaking, the bankruptcy cts are doing most of the work; de facto, theres quite a bit of deference beinggiven to the bankruptcy cts findings.

d. Moving from Art I cts to Art III cts requires a de novo std of review.

3. CASE: Commodity Futures Trading Commission v Schor A. Facts: Schor the investor sues Conti the broker for reparations

under the Commodities Exchange Act in front of the Commission(although he also had the option of sueing in fed ct for a violationof the Act). Conti brings ordinary compulsory counterclaim fordebt in a fed court diversity action but at Schors request,dismisses it and re-files before the agency. Schor loses, Conti wins.Schor argues that the agency could not have constitutionallyadjudicated the state law counterclaim per Marathon .

B. Held: The Commission could adjudicate the compulsory state lawcounterclaim w/o violating Art III. (There was no dispute aboutCongress authority to allow the Commission to adjudicate thereparations claims.) Under the Art III functional approach, Schorwaived any personal right to have his claim adjudicated in an Art IIIct and looking at the structural factors, the court found thatallowing the Commission to adjudicate the counterclaim would notintrude on the judiciary.

C. Reasoning:i. Art III serves two functions:

a. Structural: protects the role of the independent judiciary1) Extent to which the essential attributes of judicial power

are reserved to Art III cts and whether the extent to

which the legislative ct exercises the range of power and jurisdiction normally reserved to Art III cts2) Origins and importance of the right at issue3) Concerns that drove Congress to depart from Art II

b. Personal: safeguards litigants right to have claims decidedbefore judges who are free from potential domination byother branches can be waived

ii. Ct was persuaded by:

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a. Class of counterclaims that Commission could here waslimited

b. Decisions on those claims was subject to judicial reviewc. Efficiency to hear the counterclaim

4. CASE: Thomas v Union Carbide : Northern Pipeline establishes onlythat Congress may not vest in a legislative court or non-Article III ctthe power to adjudicate, render final judgment and issue binding

orders in a traditional K action arising under state law, w/o the consentof the litigants and subject only to ordinary appellate review.

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determination of whether the agencys finding is supported bysubstantial evidence

iii. When an agency makes a finding inconsistent w/ the ALJsfinding that was based on demeanor evidence heard before theALJ, the agencys determination is the weakest b/c the agencycannot itself assess the demeanor evidence.

Mixed Qs of Fact and Law and the SE Test (Pre- Chevron) 1. How to determine whether a q is a mixed q of fact and law:A. Is the statute ambiguous b/c some terms are not clearly defined?B. What is the purpose of the statute?C. What kinds of acts would fall under the disputed term? if no

clear answer here, then this q is a mixed question of fact and law.i. Best way to answer this might not be a pure look at legal

materials, but rather, at factual situations.ii. If this becomes a case by case basis, then might be better to

defer to the agency.D. Apply the law to the facts.

2. Why might a court want to defer to the agency on a mixed q of fact

and law when theres substantial evidence?A. Comparative expertise: if you want the agency to consult mattersin the world, then we want the agency to make the determination

B. Comparative procedural advantage or capacity: reviewing cts areappellate cts and dont take testimony or witnesses so if theanswer can be found just by reference to legal materials, then itsok for the ct to answer but if the answer requires facts, then ct isnot in the best position

C. Jurisdiction/authority: to whom has Congress given the power?D. Judicial role or comparative legitimacy: cts are responsible for

demonstrating or explaining the law but when it comes to issues of fact or policy, maybe wed prefer the agency to do it b/c they havea democratic pedigree, value judgments and wed rather let thedemocratic actor make the call

E. Narrowness/broadness: there are some qs that a ct will have todecide once for an entire statute but on the other hand, we mightwant case by case analysis on qs where an agency will have todecide multiple times for the statute so give the agency slightlymore deference for their efficiency gains

3. CASE: NLRB v Hearst A. Facts: Publisher of four LA papers refused to bargain collectively w/

a union representing newsboys. Publisher argued that they werenot required to bargain since the newsboys were not theiremployees w/in the meaning of the National Labor Relations Actterms. NLRB, after hearing, concluded that the regular full-timeemployees were employees w/in the meaning of the Act. Onappeal, the App Ct independently examined the q of whether thenewsboys were employees and decided that they were not, basedon common law stds.

B. Held: The Board gets to decidethey are not employees.C. Reasoning:

i. These are mixed qs of law and fact and ct needs to address:

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a. Does the statute implicitly import the c/l def or some otherdef? Q of Law1) Trying to determine the def of words.2) Will consult: precedent, congressional records, context of

other statutes etc.3) Ct will decide on its ownNLRA does not on its own,

import the c/l into the statute

b. What is the purpose of the Act? Q of Law1) Mostly legal considerations2) Ct decides for itselfpurpose is to end industrial strife

and equalize bargaining powerc. What type of workers are covered under the act? Q of

Law1) Look at statute itself, congressional records, dictionary

meaning2) Compare policy outcomes of using diff definitions3) Look at agency interpretation perhaps as a last resort4) Ct ultimately defers on this qNLRB can decide this on a

case by case basis or industry by industry basis

5) But the best way to answer this might not be to look atlegal materials but to look at the factual situationd. Are these newsboys = employees? Q of Fact

1) Apply the facts to the def of employee2) If the agency gets to decide ultimately, then this q gets

folded into their earlier inquiry of what is an employeeii. SC is additionally persuaded by:

a. The task of defining employee was given to the NLRBsince they were chosen to administer the act.

b. Everyday experience in the administration of the act givesthe NLRB unique familiarity and experience of employmentrelationships, abilities and need for self-organization etc.

c. Generally qs of statutory interpretation, esp when arising inthe first instance, are for cts to resolve but when the q isone of specific application, the agency administering itusually makes the call and the reviewing cts function islimited.

iii. The Boards determination should be accepted if it has warrantin the record and a reasonable basis in the law.

iv. As the q moves from law to fact-based, the deference to theagency increases.

Interpretive/Legislative Rules & Qs of Law in t he Pre- Chevron Era1. Interpretive rules: publications by agencies that do not carry the force

of law; have the power to persuade

2. Legislative rules: carry the force of law and is the product of anexercise of delegated legis power to make law through rules

3. How to distinguish b/t interpretive and legislative rules:A. Look at the Act to see if Congress has delegated the regulation-

making authority to know that they can, not necessarily did, promulgate a rule that has the force of law

B. Look at other regs to see if the agency has used its authoritybefore

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C. See if the agency meant for it to carry the force of law:i. if it can be enforced w/o relying on another law or reg--

interpretiveii. if it actually changes a prior legislative ruleiii. if it creates new duties (ie look at the procedure used)

4. CASE: Skidmore v Swift A. Employees who alleged that they had worked overtime for being

on call firemen sued for overtime back pay. FLSA administratorissued had issued an interpretive bulletin calling for overtimepay. Trial ct and app ct said that as a conclusion of law, the timespent working as on call firemen did not constitute overtime forwhich the FLSA gave overtime compensation for. As a matter of law, pursuing pleasure or performing personal chores while on calldid not constitute work.

B. Held: Trial Court is reversed. The court should defer to theadministrator.

C. Reasoning:i. The rule here is an interpretive rule not a legislative rule or a

rule having the force of law.

ii. Skidmore deference rule: interpretive rules, while notcontrolling on the cts, can effectively become binding on thecourt, or be given deference to, if they have the power topersuade

iii. The power to persuade will depend on:a. Thoroughness evident in the considerationsb. Validity of its reasoningc. Consistency w/ earlier and later pronouncementsd. All those factors which give it the power to persuade, if

lacking the power to controliv. Distinguishing b/t a legislative rule and an interpretive rule:

a. Did Congress delegate regulation-making authority so theagency knows that they can, but didnt necessarily ,promulgate a rule w/ the force of law? Then expresses willof Congress and more deserving of deference b/c is closer tobeing a legislative rule

b. Look at other regs to see if agency has used its authoritybefore?

c. Did the agency intend for it to have the force of law? Lookat procedures used to make the rule. Look at whatobligations were created etc.

Chevron Deference and Policy Judgment Calls 1. The real Chevron test:

A. Preconditions to even getting to the Chevron analysis: ClearStatement Principle ( Kent v Dulles)

B. Step 0: As a threshold matter, did Congress give authority to theagency to interpret the laws?i. Mead Option 1-Explicit : Congress explicitly grants the power to

make rules with the force of law implied congressional intentto interpret as well Chevron deference

ii. Mead Option 2-Implicit: Congress grants the power to makerules using NC rulemaking such rules imply force of law

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implicitly includes congressional intent to interpret Chevrondeferencea. Why can the force of law derive from NC rulemaking?b. B/c that entails deliberation, expertise, democratic decision-

making, thus justifying deferenceiii. Christensen/Skidmore no go: If Congress neither 1) granted the

authority to interpret via explicitly granting the power to make

rules w/ the force of law, OR 2) granted the power to pass lawsvia NC rulemaking/formal rulemaking, then no Chevrondeference, but perhaps Skidmore deference.

C. Chevron Step 1: Did Congress already resolve the issue w/ clarityand precision or did they leave an ambiguity?

D. Chevron Step 2: If not, is the agencys interpretation reasonable?2. If an agency passes a rule w/ the force of law, using formal process

and that rule fixes an ambiguity in a statute committed to agencyimplementation, then cts should grant Chevron deference to theagencys interpretation as long as its reasonable:A. Did Congress clearly answer the question at issue or is there

ambiguity?

B. If theres ambiguity and the agency offers a reasonableinterpretation, then cts should defer to the agency even if thereare other reasonable alternatives.

3. Chevron deference is warranted when the agency is effectivelydeciding questions of policy which are akin to mixed questions of lawand fact. The Chevron ct was inclined to grant deference b/c itbelieved that the issue was better left to the political branches of govtto resolve.

4. Why are these kinds of policy questions unique?A. When judges make policy judgments, they are usually trying to

determine congressional intent and purpose using the canons of interpretation, ie Step 1. When they cannot ascertain intent, then

they go to Step 2 which grants deference to an agencysreasonable policy judgment call.B. Agency policy judgments are more tailored as the agency will pick

one reasonable interpretation from presumably competingreasonable alternatives. Moving away from the backwards-lookinginquiry into Congressional intent and into a forward-lookingdialogue about the effects of particular policy proposals refocusesthe dialogue inside the agencies to the consequences of adoptingparticular policies in light of their expertise and politicalaccountability.

5. Scalias defense of Chevron deference:A. Rejects:

i. Agency expertise does not justify deference as a matter of law.ii. SoP concerns and the need to have the political branchesensure good policy (and avoid bad policy ) outcomes, does not

justify deference as a matter of law.B. Accepts:

i. In Step 1, a court will try to determine congressional intentusing the tools of statutory interpretation including dictionarydefs, statutory text, legislative history, and canons of construction including policy judgments .

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iii. Chevron 2-step: 1) Did Congress address the issue directly or isthere ambiguity? 2) If ambiguous, defer to the agency as longas its reasonable.

Step 0: As a threshold matter, did Congress give authority to theagency to act w/ the force of law?

1. Step 0: Even if a ct wants to defer, as a threshold matter, did

Congress intend for the agency to make interpretive rules w/ the forceof law?A. Option 1-Explicit :

i. Congress explicitly grants the power to make rules with theforce of law

ii. Implied congressional intent to interpret as welliii. Chevron deference

B. Option 2-Implicit:i. Congress grants the power to make rules using NC

rulemaking/formal adjii. Such rules imply force of lawiii. Implicitly includes congressional intent to interpretiv. Chevron deference

C. Option 3-no go if informali. Christensen -opinion letter from agency not entitled to Chevron

deference b/c no indication that Congress intended for theopinion letters to have the force of law

ii. Christensen -type rules get Skidmore deference possibly if ithas power to persuade.

2. No Chevron deference for when agencies are interpreting the APA b/cits not a grant of authority to the agencycant give authority toagency to interpret that which cabins their authority.

3. CASE: Christensen v Harris County A. Facts: FLSA calls for overtime compensation to be paid in certain

cases. Harris County, looking to save money, asked the DoL whatto do. DoL replied in an opinion letter recommending a course of action. County followed advice. Ps sued claiming that the policyviolated the FLSA. P and Govt argued that cts should give Chevrondeference to the opinion letters.

B. Held: Opinion letters are entitled to respect under Skidmore butonly to the extent that those interpretations have the power topersuade. Ct finds the agency interpretation unpersuasive.Opinion letters not followed.

C. Reasoning:i. SoL is interpreting the FLSA. Opinion letter was probably

written by a low-middle level employee but lacks the force of law. At best, it might get Skidmore deference if it has thepower to persuade, though ct finds here that its notpersuasive.

ii. A lack of the force of law matters b/c that implies you dont getthe procedural benefits of rulemaking, ie debate, deliberationetc.

D. Scalias concurrence:

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i. MCI-as a matter of pure statutory construction, whether modifymeans small or large change or whether the FCC reg is a largeor small change doesnt matter for the bigger concern is thatthe FCC is changing policy in a such a huge way and w/o anexplicit signal from Congress, we dont want agencies to usedelegations of power to make implicit but huge changesits akind of nondelegation argument but w/ no limiting principle, SC

just interprets modify to reach solution they want.ii. Brown and Williamson- SC finds a way to prevent FDA from

gaining jurisdiction even though textually, tobacco seems to fitthe def of drug and combination product. Allowing the FDA toregulate tobacco would allow them to regulate a huge industryw/o an express grant from Congress, which is odd especially inlight of the whole host of other regs that control the tobaccoindustry. This change in FDA policy occurs at the end of theClinton era and may be a last-minute grab at authority thatCongress would probably not have allowed.

C. Ambiguous: look at the text, dictionary definitions, congressionalpurpose, legislative history and other canons to determine

ambiguity. ~ Sweet Homei. Whether Congress spoke as to the precise q at issue might bean issue of framing.

ii. In Sweet Home -majority asks q of whether agencyinterpretation is excluded .

3. CASE Babbitt v Sweet Home for Oregon A. Facts: Endangered Species Act made it unlawful to take any

endangered species. Act further defined take to include: harass,harm, pursue et al. SoI (who probably used formal process)promulgated a rule further defining harm to mean kill/inureviasignificant habitat degradation. Respondent landowners andlogging companies challenged the regulation defining harm and

argued that the SoIs only means of preventing foreseeable habitdegradation is to buy the lands. SoI argued that the prohibition ontaking, which Congress defined to include harm, places a duty onrespondents to avoid harm that habitat alternation will occurunless they first obtain a permit.

B. Held: Ct goes through two-step Chevron analysis and finds thatthere is ambiguity and thus grants Chevron deference to theagencys interpretation of harm.

C. Reasoning:i. The Step 1 question according to the majority is whether

Congress intended for harm to exclude kill/injure via habitatmodification. Majority says no and looks at:

ii. Dictionary: harm means to cause hurt or damage or to injure;Majority says that if we limit the meaning to direct injury only,then it would have no meaning diff from other words used todefine take.

iii. Purpose: Per Sec 2 of the Act: to provide a means whereby theecosystems upon which endangered species depend may beconserved; supports EPAs def of harm.

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iv. Legislative History: legislative reports indicate that Congressintended for take to apply broadly to cover indirect andpurposeful actions.

D. Scalias dissent:i. Offers an alternate dictionary that more narrowly defines

harm to mean direct harms.ii. Says that harm refers to all the ingenious ways that people

can directly cause harm to wildlife, like draining a pond to hurta turtle.iii. As a matter of statutory construction, harm should not take

on a meaning that is very diff from the other words used todefine take.

iv. The purpose is not as broad as the majority construes it to be;Congress could not have meant to circumscribe seeminglyinnocent actions or omissions that could cause large economicdisruption .

v. Under the SoI/majoritys acceptance of harm, lots of foreseeable and unforeseeable conduct could be swept into thestatute. Scalia seems to be concerned w/ the possibility of unconstitutional takings as all kinds of actions could becomepart of a chain of causation that lead to the impermissiblewildlife degradation.

E. Takeaways:i. The more uncertainty, the easier it is to show ambiguity.ii. Its not clear that this case holds true to prove lack of

ambiguity. A showing of clarity should rest on fewer canons.4. CASE: MCI v AT&T

A. Facts: Communications Act authorizes the FCC to modify servicesand rates required of telephone carriers. FCC promulgated rulethat forced AT&T, the historic long-distance carrier to pay tariffswhile lifting the tariff requirements on new entrants such as MCI.MCI now wants Chevron deference for the agencysmodifications.

B. Held: There is no ambiguity as to what modify means, so we dontget to Chevron Step 2. But theres an independent reason not touphold the agency interpretationCongress would not have calledfor such a fundamental revision of the statute in the form of agency interpretation.

C. Reasoning:i. Modify is unambiguous; by most dictionaries means to make

incremental or limited changes. The FCCs detariffing policy isa major change and could only have been justified if made aless than fundamental change to the Acts tariff requirements.

ii. More importantly:

a. Rate filings are an essential characteristic of a rate-regulated industry. Its highly unlikely that Congress wouldleave the determination of whether an industry will beentirely or even substantially regulated to agencydiscretion.

b. Its even more unlikely that permission to modify would begranted so subtly. Congress would not have intended sucha result by implicit delegation.

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c. The FCC is fundamentally revising the statute from rate-regulation to protectionist scheme. That might be a goodidea but that was not the purpose when the law wasenacted.

D. Key takeaway: as a matter of pure statutory construction, whethermodify means small or large change or whether the FCC reg is alarge or small change doesnt matter for the bigger concern is that

the FCC is changing policy in a such a huge way and w/o anexplicit signal from Congress, we dont want agencies to usedelegations of power to make implicit but huge changesits akind of nondelegation argument but w/ no limiting principle, SC

just interprets modify to reach solution they want.5. CASE: FDA v Brown and Williamson Tobacco

A. Facts: After FDA had for many years disavowed any authority toregulate tobacco products, FDA claimed that nicotine is a drugw/in the meaning of the Food and Drug Act. Pursuant to the Foodand Drug Act, FDA promulgated regs intended to reduce tobaccoconsumption.

B. Held: FDA doesnt get jurisdiction to regulate tobacco products.

Such authority is inconsistent w/ the intent that Congress hasexpressed in the Food and Drug Acts overall regulatory schemeand in the tobacco-specific legislation that was enactedsubsequent to the Food and Drug Act.

C. Reasoning:i. While the definition of tobacco fits the definition of drugs and

combination products that would otherwise make the productfall under FDAs jurisdiction, SC says that if the FDA couldregulate tobacco, then under its own definition, it would haveto ban it altogether. Thus since Congress has alreadyforeclosed against that possibility and regulated tobacco inother ways, Congress could not possibly have meant for theFDA to have jurisdiction over tobacco.

ii. Whats really going on: SC finds a way to prevent FDA fromgaining jurisdiction even though textually, tobacco seems to fitthe def of drug and combination product. Allowing the FDA toregulate tobacco would allow them to regulate a huge industryw/o an express grant from Congress, which is odd especially inlight of the whole host of other regs that control the tobaccoindustry. This change in FDA policy occurs at the end of theClinton era and may be a last-minute grab at authority thatCongress would probably not have allowed.

6. CASE: MA v EPA A. Facts: CAA calls for EPA to regulate all air pollutants. Private orgs

petitioned to regulate the emission of CO2, claiming that its an air

pollutant. EPA takes public comments then denies the petition bymaking Brown and Williamson Tobacco arguments to say thatCongress has not given authority to EPA to regulate CO2.

B. Held: SC says EPA cant opt out of regulating CO2 when the Actunambiguously calls for EPA to regulate all air pollutants.

C. Reasoning:i. Unambiguous: on its face

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ii. This is about agency refusal to regulate per an unambiguousstatute. Ct grants limited deference and almost heightened

judicial review.iii. SC says that CO2 is an air pollutant and that statute sweepingly

authorizes the EPA to regulate air pollutants which include anyair pollution agent.

iv. EPA cannot opt out of regulating unless 1) CO2 is not an air

pollutant that endangers health and welfare or 2) someother reason.v. Unlike in Brown and Williamson , there is no evidence that

Congress meant to curtail the EPAs power to regulate CO2.

Chevron Step 2 1. If court says statute is unambiguous in Step 1, then end of story.2. If court is silent or says that statute is ambiguous in Step 1, then to go

Step 2.3. At Step 2, agencies can get a second bite at the apply by changing

policies as long as reasonable.4. Rule: a courts prior judicial construction of a statute trumps an

agency construction otherwise entitled to Chevron deference only if the prior court decision holds that its construction follows from theunambiguous terms of the statute and leaves no room for agencydiscretion. This is permissible b/c these are policy inquiries~ NationalCable v Brand X Internet Services

5. Agencies can change and even overrule courts at Step 2. To hold theStep 2 interpretatin will lead to anomalous results depend on who getsto it first. ~ Brand X

6. Whats going on at Step 2?A. Only get to Step 2 if theres multiple reasonable alternatives that

give rise to ambiguity in Step 1.B. So by the time to get to Step 2, the relevant q has virtually been

answered and nothing ever really get decided at Step 2.C. If there are no good alternatives, then you never get past Step 1

b/c then the meaning of the statute must be unambiguous.

Hard Look Review1. Hard look/arbitrary and capricious applies to qs of fact arising in

informal adj and NC rulemaking.A. APA 706(1)(A): ct shall hold unlawful and set aside agency action,

findings and conclusions if action is arbitrary and capricious or isan abuse of discretion.i. Looking for lack of reasonable consideration of relevant factors

and a clear error of judgment.B. Requires reviewing court to engage in substantial inquiry:

i. Did agency act w/in scope of its authority?ii. Was the actual choice arbitrary, capricious, an abuse of

discretion or otherwise not in accordance w/ the law?iii. Did the agency follow the necessary procedural requirements?

C. Judicial review has to be a review of a record . Unlike formalproceedings that produce a formal evidentiary record, for informalproceedings, the ct will look at the body of information that theagency was supposed to look at, at the time of decision-making

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(and give less weight to evidence concocted by lawyers forlitigation).

D. Presumption in favor of agency - as long as the agencysdetermination is reasonable, ct will not substitute its own judgmentfor the agencys.

2. Overton Park Hard Look Review : cts will review agency decisionfor reasonableness based on the record before the agency at the time

it made its decision; ct will not substitute its own judgment for that of the agencys3. State Farm Hard Look Review Plus : Cts will provide a harder, more

in-depth review if they are convinced that there is cause to questionthe reasonableness of the decision.A. Such a cause might be a suggestion that that the decision was

politically motivated and without regard to the facts.B. Such a cause might be a rule rescission, major change, or

inconsistency absent a reasoned explanation4. Purpose of hard look review:

A. Forces agencies to write down and create evidentiary trail for judicial review

B. Ct can look at the evidence to make sure agency is acting w/instatutory mandate by showing complianceC. Want to see that statute isnt being applied in disparate ways but

rather, being applied more generally and hasnt been captured byspecial interests

D. Might reach better policy outcomes if cts can impose their ownexpertise on top of agency expertise

5. CASE: Overton Park v Volpe -informal adj A. Facts: Statute prohibits the Secretary of Transportation from

approving fed funds to finance a highway that would run throughpublic parks if a feasible and prudent alternative exists. If nosuch route is available, Secretary can authorize funds. In this case,DoT approved funds for a highway through Overton Park but didnot release a statement of factual findings or indicate why theybelieved that no prudent and feasible alternatives existed. Thedecision was not made using formal process.

B. Held: SC reverses and remands. While formal findings are notrequired, meaningful judicial review has to occur and cannot bebased solely on affidavits prepared for litigation.

C. Reasoning:i. Judicial review is to be made on the basis of the administrative

record even though the agency decision was the product of informal adjudication.

ii. The administrative record consists of the facts andcircumstances before the agency at the time that they made

the decision and its against this record that the decisionsreasonableness is weighed.6. CASE Motor Vehicle Mfrs Association v State Farm -NC rulemaking

A. Facts: pursuant to N/C rulemaking, NHTSA rescindsrequirementthat cars be equipped with passive restraints. NHTSA argues thatautomatic restraints, a type of passive restraint, dont confersafety benefits and that airbags, another type of passive restraint,are not installed frequently enough by auto mfrs to justify the

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passive restraint requirement. Auto insurers challenged the rulechange.

B. Held: Using hard look review, SC finds the agencys rescission tobe arbitrary and capricious.

C. Reasoning:i. Agency must examine relevant data and offer a satisfactory

explanation for its action including a rational connection b/t the

facts found and the choice made.ii. An agency rule would be arbitrary and capricious if agency:a. relied on factors which Congress did not intend for it to

factor inb. failed consider an important part of the probc. offered an explanation that isnt justified by the info before

the agencyd. offered an implausible explanation

iii. SC found that agencys failure to consider alternate forms of passive restraints before getting rid of the rule rendered thedecision as arbitrary and capricious. SC also questioned theevidence and conclusions that agency relied on.

iv. SC stopped just short of saying that its own explanation(virtually a substitute for the agencys) was the right onedespite the agencys.

v. NHTSA policy change coincided w/ regime change so SC moresuspicious.

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interpret or prescribe law or policy or describing the organization,procedure or practice requirements of an agencyA. Includes the approval or prescription for the future of rates, wages,

corporate or financial structures, prices, facilities, appliances,services or allowances therefore or of valuation, costs, oraccounting or practices bearing on the foregoing

3. Formal, On-the-Record Adjudication

A. APA 554, which then triggers 556 and 557B. Is required when:i. Explicit: organic statute calls for the decision to be made on

the record after opportunity for agency hearing. ii. Judicially imposed: when agency is imposing a sanction or

liability on a party; need for Londoner due process concerns tobe satisfied

C. Judicial review: substantial evidence std (which effectivelyamounts to the arbitrary and capricious std b/c no one reallyknows what it means)

D. Requires trial-type hearings, oaths, subpoenas, an ALJ judgehearing evidence and witnesses

4. Informal AdjudicationA. APA rules dont seem to govern informal adj procedures explicitly,but prof thinks that Sec 555 on Ancillary Matters applies:i. If nothing else applies, 555 is the procedural backstopii. Persons compelled to appear must be afforded the right to

counseliii. Interested parties can appear and be heardiv. Agency must promptly explain reasons for denial unless its

obvious (e)v. Requirement that agency takes action expeditiouslyvi. You can always get a transcript of the agencies

B. Refers to agency decisions that dont fit other categories.C. Includes permitting procedures, grant procedures etc.D. Overton Park -can be done w/o procedural due process b/c it

doesnt impact anyone specifically as its public parkE. Judicial review: per Overton Park , arbitrary and capriciousF. For qs of law where process is very informal, Mead says no

deference5. Formal On-the-Record Rulemaking

A. APA 553(c), which then triggers 556 and 557B. Is required when: organic statute provides that rules . . . be made

on the record after opportunity for an agency hearing. C. Is a cumbersome and intense processD. Florida East Coast : SC, concerned about the delays and other

dysfunctions caused by the formal rulemaking requirements,severely restricted the coverage of the APAs formal rulemakingprocedures by insisting that the relevant statute explicitly providefor a hearing on the record.

E. Formal Rulemaking hearing: all parties apprised of the evidence,CX witnesses, inspect docs, offer evidence in explanation orrebuttal

F. Judicial review: substantial evidence test6. Informal Rulemaking: Notice and Comment Rulemaking

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A. Triggered when the statute does not provide for a hearing on therecord.

B. APA 553 procedures:i. Post notice in the Federal Register specifying time and place of

rulemaking proceedings, legal authority for issuance andcontent of proposed changes

ii. Opportunity for interested persons to comment on the proposalw/ written submissions, and at the option of the agency,opportunity for oral argument

iii. After final rule promulgated, agency must issue a concisegeneral statement of the basis and purpose of the decisiona. Concise statement has, in reality, become relatively long

and extensive b/c agency write w/ anticipation of litigationor to preempt lit

C. Over the past few decades, agencies have moved fromadjudication to NC Rulemaking to decide regulatory policy. Sinceno formal record was necessary under NC rulemaking (unlikeformal rulemaking), cts needed to mandate some kind of record sothat it could later be reviewed by cts.

D. Judicial review: Hard Look/arbitrary and capricious7. Organic statute can prescribe greater procedural formalities than APAcalls for. ~ Florida East Coast Railway

8. Agency choice b/t rulemaking and adjudication: organic statutetypically wont give a choice but there are other situations whereagency gets to choose.

9. Judicial control of agency choice of procedures: cts generally ok w/letting agency pick and choose b/t rulemaking and adjudication aslong as they follow the procedural safeguardsA. A normal rulemaking rule must be promulgated via APA

procedures. Cant evade process requirements by trying to createa rule that applies prospectively (but not retrospectively) from anadjudicative proceeding. If you want the precedent to applyprospectively, use rulemaking. ~ Wyman Gordon

B. Cant enforce a rule if that rule is an unpublished policy writtenonly in an internal agency manual. Rule lacks legitimacy andsafeguards of rulemaking process. ~ Morton v Ruiz

C. Hercules v EPA -DC Circuit upheld the EPAs authority to adoptpollution control requirements by rulemaking even though theresulting rules only applied to a single plant. Since that was formalrulemaking, the due process rights and procedures of the affectedparty were upheld just as they wouldve been under adjudication.

D. CASE: NLRB v Wyman-Gordon i. In an adjudicative proceeding, NLRB orders W-G to produce

employee roster to union, and relies in part on previous NLRBadjudication of Excelsior. W-G challenges and argues thatExcelsior is procedurally invalid and cannot apply to it.

ii. Held: Yes, Excelsior was procedurally invalid b/c the ruleannounced there was done through adjudication instead of rulemaking. But since this is a separate adjudication, NLRB hasindependent reason to validly order W-G to give up roster list.

iii. Reasoning:

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a. Excelsior rule was made in an adjudication and onlyapplied prospectively, not to the parties in that case. Cantskirt the protections of proper rulemaking by trying to makea rule from an adj.

b. NLRB has historically not used the Acts rulemakingprocedures but relies on adjudications.

c. Ct doesnt seem to want to impose a brightline rule that

NLRB has to use rulemaking but in this case, probablythinks that right result was reached despite some of theimpropriety of process.

iv. Benefit of rulemaking would be that all interested parties couldbe heard as NLRB didnt announce issue prior to ruling inExcelsior. NLRBs response is that if they were forced toengage in rulemaking, then adjudications would be less tailoredand more equivocating.

E. CASE: Morton v Ruiz i. Facts: BIA limits benefits given to Native Americans based on

an unpublished policy written only in an internal BIA manual.Info is not public. Ruiz was denied benefits, determination

done by informal adjudication, probably by a letter to him.ii. Held: BIA cant escape formal rulemaking requirements byrelying on unpublished internal manual. The proceduralsafeguards ensured by that process also put Native Americanson notice so that they can then structure their conductaccordingly.

iii. Cant uphold this informal adjudication under Wyman-Gordonb/c there, WG was put on notice of the roster requirement afterformal adjudication of Excelsior. Here, Ruiz never had notice.

Formal On-The-Record Rulemaking1. Statute authorizing agency to act after hearing APAs requirement

that formal rulemaking is made on the record after opportunity foragency hearing. APA formal rulemaking is not triggered unless APAlanguage is expressly used orother language having the samemeaning could trigger 556 and 557 rulemaking process. ~ Allegheny-Ludlum Steel

2. After a hearing was satisfied by NC Rulemaking; doesnt triggerformal rulemaking. ~ Florida East Coast

3. CASE: US v Florida East Coast Railway A. Facts: ICCs organic statute states that it may, after hearing

change freight rates. ICC wants to set rates for RRs who borrowother RRs freights. So this will affect some RRs more than others.Per NC Rulemaking, ICC solicits written submissions, includingchallenges by Florida East RR (and others) petitioning for an oralhearing, changes rates and rejects requests for oral hearings.

B. Held: SC rejects RRs argument since the organic statute didntexplicitly use APA language or express clear intent for formalrequirements, no oral hearing.

C. Reasoning:i. Only clear language indicating an intent or trigger words

requiring both a decision on the record and an opportunity foran agency hearing will suffice. Cts are less strict about the

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magic language requirements when it comes to adjudicationsb/c of greater need to protect due process rights there. If therewas an individualized determination here, then probably willrequire a hearing on the record.

ii. For the purposes of the Londoner/Bi-metallic inquiry, shouldFlorida East Coast RR get a hearing?a. Numerosity: affects all RR companies

b. AT: numerosity: this affects some RR more than othersc. No depravation of property. (Right to charge whatever youwant probably wont count as a depravation of property; noright to conduct business exactly how you wish)

d. So this situation is closer to Be-metallic and no need forindividualized determinations according to the SC.

iii. If this was closer to Londoner and Florida RR requiredindividualized determination, then due process concerns wouldbe met by moving to formal rulemaking or formal adjudication.

iv. Statute calls for hearing, so what would satisfy that? SC saysoral hearing not necessary to satisfy. The paper hearinggenerated by NC Rulemaking was good enough to satisfy.

v. Now agencies typically get Chevron deference to definehearing when they are interpreting their own organicstatutes.

Notice and Comment Rulemaking

Impx of Rulemaking1. Florida East Coast encouraged agency to shift from adjudication to

rulemaking to develop law and policy, especially since rulemakingneed not be carried out using sticky trial-type procedures.

2. NC Rulemaking is subject to hard look review which requires anevidentiary record. Agencies increasing use of NC Rulemakingthreatened to create a less rich record since interested partiescouldnt engage in CX and thoroughly examine the reasons for NCrulemaking.

3. Even when an agencys enabling statute expressly requires it to hold ahearing, the agency may rely on its rulemaking authority to determineissues that do not require a case by case consideration. ~ FPC v Texaco

4. In an adjudicatory hearing, a litigant cant challenge the validity of arule promulgated in NC Rulemaking. The procedural safeguards of NCrulemaking itself provides sufficient procedural safeguards to theeventual litigant. Use of the matrix rule affects a class of people soshould not and cannot be challenged in adjudicatory hearing.~ Heckler v Campbell

5. CASE: Heckler v Campbell A. Using NC Rulemaking, HHS promulgates rule using matrix to

classify disability claimants into those who do and do not getbenefits.

B. In formal adjudication, ALJ, relying on the matrix, affirms claimantsdenial of benefits.

C. App Ct, reviewing ALJs decision under SE Test, says ALJ shouldhave relied on specific evidence beyond that of the matrix.

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D. SC says rule using the matrix is allowable b/c matrix affects a classof people rather than individuals.

Judicial Transformation of Sec 553 NC Procedure1. How do you create a record for pre-enforcement review when the

validity of regs are challenged in court immediately after they havebeen adopted and before theyve been enforced against anyone?

2. Cts require agencies to develop an evidentiary base for their regsthrough paper hearing or hybrid rulemaking procedures that areless formal than a full-fledged trial-type hearing but more substantialthan traditional notice and comment requirements.

3. Nova Scotia Food Products requirements for meaningful evidentiarybase?A. Full disclosure: Sec 553(c) says that agency has to give interested

persons an opportunity to participate... For that to bemeaningful, the agency must disclose all its data.i. W/o such a high std, cant engage in meaningful hard look

reviewii. If you want to fight this in a political forum, then more agency

disclosure results in a better political fight.iii. Drawback: reviewing cts often cherry-pick whatever info theywant to focus on to render their decision. (like State Farm )

B. Per Sec 539(c), agency shall publish a concise general statementof their basis and purpose for the new rule.i. Ct doesnt require that agency must answer every single

concern possible.ii. But practical effect is that the concise statement is anything

but. Agencies now write statement w/ threat of litigation inmind.

iii. Here ct is emphasizing how info is conveyed to the public.C. After Nova Scotia , NC Rulemaking has turned into an elaborate

paper hearing procedure often resulting in a record of millions of pages. It allows for meaningful hard look review but raises costs toagencies.

4. Vermont Yankee Nuclear Power clarifications to Nova ScotiaA. Generally speaking, Sec 553 establishes the max procedural

requirements which Congress was willing to have the cts imposeon agencies in conducting rulemaking.

B. Agencies are free to grant additional procedural rights in theexercise of their discretion but reviewing cts are not free to imposethem if the agencies have not chosen to grant them.

5. Agency cant rely on a new reason to justify its actions when it gets tocourtit must depend on the rationale it took at the time it made itsdecision. ~ Chenery IA. W/ new rationale, its the lawyers tailoring to the litigationB. Better notice function when responses are tailored to exactly what

the agency was considering at the timeC. Encourages more reasoned decision-makingD. Record produced will inform us as to what the agency was thinking

at the time6. CASE: Vermont Yankee v NRDC

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D. agency findings for good cause that notice and public procedureare impracticable, unnecessary or contrary to the public interest

3. If agency doesnt use NC rulemaking, then theyve either made aninterpretive rule or a kind of legislative rule and we have to strike itdown if it doesnt comport w/ 553; its hard to tell the diff

4. General statements of policyA. Dont have the force of law thus they are meant to guide the

regulated entities but since they are not binding, they might notoffer as much guidance as a regulated entity might want.

B. Agencies might wish to shield their regs from the scrutiny of NCrulemaking by casting would-be regs as statements of policy butthey would still be subject to scrutiny. ~ Young Dissent

C. CASE: Community Nutrition v Young

i. Facts: FDA issued what it called a general statement of policyindicating that it would not take enforcement measures for foodcontaining a certain level of contamination unless thecontamination reached a certain actionable threshold level.

ii. Held: DC Circuit held that this effectively made amounts lowerthan the threshold level illegal. There was no evidence thatthis was a tentative decision or that the agency would notalways follow its own policy, thus this is meant to have theforce of law and should have been promulgated through NCRulemaking.

5. Rules that are interpretive

A. Distinguishing legislative from interpretive rules: ~ AmericanMining

i. In the absence of the purported interpretive rule, would therebe an adequate legislative basis for enforcement or otheragency action to ensure compliance or enforcement?

ii. Is the ruled published in the Code of Federal Regs?

iii. Has the agency explicitly invoked its general legislativeauthority?

iv. Is the rule effectively amending a prior legislative rule?

v. If yes to any then yes legislative rule

B. At the Chevron Step 2 inquiry of reasonableness, agency disregardof significant policy arguments will clearly count against it.~ American Mining

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Rules include a schedule of fines as well as a comprehensiveadjudicatory scheme providing for formal notice, settlementprocedures, discovery, an adversary hearing before an ALJ andan admin appeal. FAA argued that the Penalty Rules are of procedure and are thus exempt from NC rulemaking.

ii. Held: DC Cir says a rule does not fall w/in the scope of theexception merely b/c it has some procedure.

iii. Reasoning:

a. Test: a so-called procedural rule is not exempt from NCrulemaking if it substantially affects a Ds right to anadministrative adjudication. Under the due process clauseand the APA, the D has a right to notice and a hearingbefore being forced to pay a fine.

b. If agencys choices encode a substantive value judgmenton the appropriate balance b/t a Ds right to adjudicatory

procedures and the agencys interest in efficientprosecution, then should be done through NC rulemaking

E. CASE: National Whistleblower Center v NRC

i. Facts: NRC changed its std for granting filing extensions from ashowing of good cause to a showing of unavoidable andextreme circumstances as part of a goal to streamline theschedule for license renewals. Std was not passed pursuant toNC rulemaking.

ii. Held: DC Cir held that NRC was free to adopt this new std w/ousing NC rulemaking b/c rules that assert a timetable forasserting substantive rights are procedural. And the new stdgave plenty of time to intervene.

The Availability and Timing of Judicial Review

1. APA 701 provides that APAs judicial provisions dont apply to theextent that:

A. (1)-statute precludes judicial review or

B. (2)-agency action is committed to agency discretion by law

2. Abbott Labs -start w/ presumption of reviewability; only upon ashowing of clear and convincing evidence of a contrary legislativeintent can the cts restrict judicial review

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1. Preclusion can be explicit or implicit due to policy reasons.

2. Block/Bowen policy reasons to allow/deny judicial review to a potentialP:

A. Is there complete silence on potential P?

B. Is the potential Ps interests represented by another interestedparty?

C. Will allowing potential P to sue disrupt agencys relationship w/other parties?

D. Congressional intent and purpose behind statute?

E. Inappropriate special interest influence that could be changed byallowing P to sue?

F. Other policy concerns?

3. Bowen and Block make the Abbott Labs presumption weak; now itseems like cts will made decisions on a case by case basis.

4. CASE: Block v Community Nutrition Institute

A. Facts: Under Act, Secretary of Agriculture sets the min price thatmilk handlers must pay to milk producers for their milk. Milkprocessed for drinking is highest priced. CNI challenged thedecision arguing that b/c the higher price also applied toreconstituted milk, this made reconstituted milk less economicalfor milk handlers to process, thus depriving consumers of a sourceof cheaper milk. Statute says that milk handlers can challenge

Secretarys orders in court after exhausting admin remedies.

B. Held: Ct holds that the consumers cannot challenge the agencysdecision.

C. Reasoning:

i. Statute doesnt address suits by consumers either way but b/cof complete silence on the matter, ct is hesitant to allowconsumers to sue.

ii. Policy reasons to disallow CNI:

a. Worried about dragging Secretary straight into court

b. Issues involve technical and complex regs; parties arerepeat players

c. Dont want consumers to ruin the bargains struck bySecretary and milk handlers since Secretary is brokeringdeals to keep milk prices stable

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d. CNIs interest in keeping pricing down is identical to milkhandlers desire to keep prices down to them

iii. Responses:

a. Consumers not part of original txns, didnt have a voice solet them in

b. If purpose of legislation was to protect consumers, thenmore of a reason to let them in.

c. If the entire deal was a product of special interest influence,then maybe want to let outsiders like consumers sue

3. CASE: Bowen v MI Academy of Fam Physicans

A. Facts: HHS passed a reg setting higher Medicare reimbursementrates for board-certified fam physicians than for identicalservices performed by non-board certified. An association of non-board certified physicians sued claiming that the distinctionviolated the Medicare Act and the 5 th .

B. Held: Yes, the physicians can sue.

C. Reasoning:

i. Act doesnt say anything about challenging the regs as a whole.We can draw an inference from the silence that doctors cansue. We know that patients can sue.

ii. This is unlike Community Nutrition:

a. Neither case says anything about the parties that want tosue.

b. But here Ps interests are not really represented by anyother party

c. Major policy distinction: milk consumers will probably buymilk even if the price goes up but its worse if docs stopproviding medical services b/c they arent being reimbursedcompetitively. But its not clear that this is the right reasonsince P has the simple solution of getting board certified.

APA 701(a)(2): committed to agency discretion b/c theres no law to apply

1. Is a very narrow exception; only works when theres no legal std or judicially cognizable std by which to weigh thelawfulness/unlawfulness of agency action.

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2. Overton Park -ct said the yardstick was the reasonable or prudentalternative language; its a very open-ended std but SC says goodenough to be law to apply

3. Heckler Rule; absent a specific statutory limitation on an agencysprosecutorial discretion, the decision to enforce or not is committed toagency discretion by law and cannot be reviewed by cts.

4. Norton Rule: discretionary agency action taken to comply or notcomply w/ a general statutory std cannot be reviewed if such reviewwould force a court to be a super-monitor.

A. Final dispositions can be reviewed by a court.

B. If cts force agencies to promulgate rule, then cts have to measurecompliance and ct will be turned into a continuous monitor.(Counterargument is that this happens in many situations, so

judges do become overseers.)

5. If statute specifically requires an agency to undertake rulemaking,then it does not have the authority to refuse to make the rule orenforce it.

6. CASE: Heckler v Chaney

A. Facts: Prisons used drugs for lethal injection that hadnt beenapproved for that use. Death row inmates challenge the FDAsinaction or failure to take enforcement action against theseprisons.

B. Held: Food, Drug and Cosmetic Act did not prescribe any rules toweigh the use of FDAs prosecutorial discretionthe decision of whether or not to take enforcement action was committed to FDAdiscretion by law.

7. CASE: Norton v Southern Utah Wilderness Alliance

A. Facts: BLM, per Act, must continue to manage [fed land] in amanner so as not to impair the suitability of such areas forpreservation of wilderness. People were driving ORVs throughthe park. Environmental group sued SoI under the APA for thefailure to act b/c org believed that BLM was not taking sufficient

action pursuant to the nonimpairment obligation.B. Held: A failure to comply w/ general statutory stds is not subject to

judicial review but rather is committed to agency discretion.

C. Reasoning:

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i. SUWA sued under APA 706(1) which gives cts the authority tocompel agency action unlawfully withheld or unreasonablydelayed.

ii. SUWA acknowledges that it cannot compel the BLM to act in aspecific way but that it can compel some agency action of compliance.

iii. SC says that SUWA is attempting to challenge a day-to-dayoperation whereas Sec 706(1) applies to final agency actionswhich are limited to discrete actions: whole/part of a finalagency order, rule, license, sanction etc.

iv. To allow this suit would inevitably require the cts to judge thesufficiency of discretionary agency action and compliance w/general statutory stds.

8. CASE: MA v EPA Redux

A. Facts: CAA says EPA shall by regulation prescribestds forcertain kinds of air pollution.

B. Held: EPA is statutorily required to act; key phrase is shallregulate, thus EPA cant duck the issue. They have to make a

judgment on whether CO2 is an air pollutant and then regulate itbased on that decision.

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PART IV: STANDING

1. Standing is a way for cts to control their dockets.

2. The ideal plaintiff is well-financed, a good representative of theinterests at stake, will litigate vigorously and is an experienced orrepeat player

3. P must have suffered an injury in fact, which comes from the casesand controversies requirement of the Constitution. ~ Sierra Club v Morton

A. Injury in fact can be economic, noneconomic or even aesthetic~ Sierra Club

B. SC rejects the special interest theory; standing does not expandto groups that have a special interest in the subject matter of thelitigation, that is not enough to show that the party was adverselyaffected or aggrieved w/in the meaning of the APA. ~ SierraClub

4. Lujan v Defenders of Wildlife Standing:

A. Injury in fact:

i. Concrete

ii. Particularized to P

iii. Not the result of some independent action of a third party notbefore the court

iv. Aesthetic injury can be injury in fact

C. Causation by D

D. Redressability: P has to get something meaningful beyond thewarm and fuzziness of knowing that youve won

Admin Outline 2008

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