Administrative Law Outline - Uncategorized - 3_4

8/20/2019 Administrative Law Outline - Uncategorized - 3_4

1/108

STRUCTURE OF EXAM R ESPONSE:

1. STATE CHALLENGE

2. ADDRESS AVAILABILITY AND TIMING OF JUDICIAL REVIEW

3. ADDRESS THE SCOPE AND FORM OF JUDICIAL REVIEW

4. ADDRESS CONSTUTIONAL INIRMITIES

A. SEPARATION OF POWERS INFIRMITIES

B. PROCEDURAL INFIRMITIES

5. ADDRESS STATUTORY INFIRMITIESA. CONSIDER PROCEDURAL INFIRMITIES

B. CONSIDER SUBSTANTIVE INFIRMITIES

P!" 1


2/108

1. TIMING AND AVAILABILITY OF JUDICIAL R EVIEW

#. To secure judicial review of federal administrative action a party must establish, inter alia, (1) proper jurisdiction in the reviewing court; (2) that a cause of action exists for the suit; and () that sovereignimmunity does not prohibit the suit!

$. J%&$'($#)$*+,," lower federal court has jurisdiction to review federal administrative actionwhere (1) it has an appropriate grant of jurisdiction in some federal statute, and (2) the partysee#ing review has standing!

1. Ways Congress May have vested the court with jurisdiction:. $ederal %uestion &tatute! 'n most cases where the challenge to the federal

agency action involves uestions under federal law, the federal uestionstatute, 2 *&+ 11, provides the federal district courts with jurisdiction,unless +ongress has substituted another statutory basis for jurisdiction in placeof 11!

i. &pecial jurisdictional statutes may supersede the federal uestionstatute and provide exclusive jurisdiction in the courts of appeals!

1. obbs "ct, - 2 *&+ 2.2 ($++)2. +lean "ir "ct3. /ccupational &afety and ealth 0eview +ommission

2. Standing.. 'n federal courts, a party who wishes to obtain judicial review of an

administrative decision must have ')+($+! to do soa concept comprised ofconstitutional and prudential limitations! +ongress is not free to override the&upreme +ourt as to an element found by the +ourt to fall within theconstitutional limitations, but it is free to override the prudentialconsiderations!

-. C*+')$)%)$*+ $/$))$*+' *+ ')+($+!, derived from "rt! '''s limitation of judicial power to 3cases4 and 3controversies4, reuire a party who wishes toobtain judicial review of an administrative decision to demonstrate a personalsta#e in the outcome by establishing (1) an 3injury in fact4 (2) 3fairly

traceable4 to the challenged agency action; and, () li#ely (not speculatively)3redressable4 by the reuested remedy!

i. Injury in Fact . The injury in fact reuirement will generally besatisfied where there is any significant factual, economic, aestheticinjury to the party asserting the claim! The injury must be 3concreteand particulari5ed and actual or imminent, not conjectural orhypothetical!4

1. +onstitutionally cogni5able injuries6a. 'njury from 7iolation of 8rocedural 0euirementsb. arm to 9nvironmental, 0ecreational, or "esthetic

'nterests if individually experienced

i! 8ollution in the 8otomac 0iver could bearticulated as an aesthetic injury!

ii! Exaple6 *gly :arriers in ashington! +ould aciti5en sue this for being ugly as a matter ofconstitution! ith respect to the barriers, 'could sue! ' may lose because there is noconstitutional claim and there is no statutoryclaim! :ut if ' could find a statute then ' would

P!" 1


3/108

be li#e the plaintiffs in $riends of the 9arth! 'could meet the constitutional standing doctrineif there is a statute!

c. 9conomic 'njuryd. Tangible arme. 'nvasion of


4/108

iii. Redressability. They must also demonstrate a 3substantial li#elihood4that the injury is 3redressable4 if the court grants the reuested relief!

1. 9xamples6a.


5/108

ii. hether the prudential 5oneHofHinterests reuirement applies whenreview is sought under other statutes is a matter of statutoryinterpretation!

1. Eoes the Ione 0euirement "pplyJ +ourts construe standing provisions to include the 5one reuirement unless the particularstatutory language signals a legislative intent to grant standingmore broadly!

2. &ituations where 5one of interest reuirement is inapplicable6

a. +iti5enHsuit provisions6 suit is authori5ed by 3any person4 with no further reuirement!

b. 3"ny person aggrieved4 provisions!3. 'f the Ione 0euirement "pplies, Eoes the 8laintiff $all ithin

the &tatutes Ione of 'nterestJa. &ituations where the injury indisputably falls within the

relevant statutes 5one of interests6i! The plaintiff is a member of the group directly

regulated by the relevant statute!ii! The plaintiff is a member of the group intended

as beneficiaries of the relevant statute!

b. &ituations where the injury less certainly falls withinthe relevant statutes 5one of interest6

i! The plaintiff has an actual but not directlyintended sta#e in the regulatory scheme! :loc#!

ii! +ompetitors of the 0egulated 'ndustrytheirfinancial sta#e in the continued or enhancedregulation of others provides the reuisite injuryin fact!

iii. "ssociation of Eata 8rocessing &ervice /rgani5ations, 'nc! v! +amp(1AGF) (p! G)

$$. C%'" * A#)$*+ 8arties may establish a #%'" * #)$*+ for judicial review through, inter

alia, (1) special statutory review under specific statutes that authori5e judicial review ofagency action, (2) general statutory review under "8" -- GF2HGF. in the absence of aspecific statute, or () 3statutory nonstatutory4 review where neither the "8" nor the specificstatute provides a cause of action! @eneral statutory review under the "8" -- GF2HGF. is aresidual action for judicial review which provides a cause of action for parties 3adverselyaffected or aggrieved by agency action4 for which 3there is no other adeuate remedy incourt!4 "8" authori5ed suits are brought in federal district court! 'n contrast, where aspecific statute authori5es judicial review the action must be brought in the court specified bythe statute! K?/T96 3"ptly named nonstatutory review4 ' exclude from my exam response if possible because its confusing6 through a commonHlaw tort suit! 0eintegrate it wasmentioned!L

1. &pecific statute authori5es judicial review2. "8" authori5es judicial review

. "gency "ction6 action is defined under the "8" to include a 3failure to act!4-. "8" -GF26#. "8" -GF6(. "8" -GF.6

3. 3'naptly4 ?amed ?onstatutory 0eview (other than "8" review, which is also callednonstatutory review)

P!" 4


6/108

. 3'naptly4 because although these actions are generally based on statutes, therelevant statutes are not targeted specifically at review of federal agencyaction but instead govern the operation of federal courts in general!

-. 9uitable 0elief under a $ederal +ourts @eneral 9uity =urisdiction, 2 *&+11!

#. Eeclaratory 0elief under the Eeclaratory =udgment "ct, 2 *&+ 22F1!(. >andamus under 2 *&+ 1M1!". rits of abeas +orpus

4. 3"ptly4 ?amed ?onstatutory 0eview (confusing). +ommonHlaw Tort &uit

i. 3"ptly4 named nonstatutory review because the underlying cause ofaction against the agency official does not stem from a federal statute!'t stems, rather, from state common law, or perhaps from a state statuteestablishing the applicable tort law! $ederal statutes may be involvedin the case, especially if the agency official offers legal authori5ationas a defense to the action, but the plaintiff in such a case does not relyon a federal statute as the basis for suit! (p! GMF)!

ii. >ethod6 (1) :ring a stateHlaw tort action against the agency officialwho committed a tort in his personal capacity! The official responds,

3' was acting as an agent of the *nited &tates!4 The official thenintroduces evidence of the relevant statutes and regulations that purportedly authori5e his conduct! The court then has to determinewhether the statutes or regulations, properly interpreted, in factauthori5ed the conduct in uestion! 'f the court determined that nostatute or regulation actually authori5ed their conduct, then thegovernment officials would stand before the law as private citi5ens! 'fthe court concluded that there was actual statutory or regulatoryauthori5ation, the plaintiff could see# to strip away that authori5ation by arguing that the relevant statute or regulation was unconstitutional!

$$$. S*"&"$!+ I//%+$) The doctrine of sovereign immunity does not bar suit where

1. Eamage "ctions! The *nited &tates has not waived its immunity to suits for moneydamages except as provided in the Tuc#er "ct or the $ederal Tort +laims "ct!

(. 6W7")7"&8 J%($#$ R"$"9 * S"#$$# A!"+# A#)$*+ $' A$-"

$. 8reclusion of =udicial 0eview6 9xpress and 'mplied6 whether +ongress intended to prohibit judicial review!

1. 9xam "pproach6. hile courts have embraced a general presumption that final administrative

action is judicially reviewable under the "8", /verton, that presumption may be overcome where +ongress by statute, expressly or impliedly, provides clearand convincing evidence of its intent to &"#%(" *& &"')&$#) 0%($#$ &"$"9,- GF1(a)(1)! " court may infer such congressional intent from6 (1) the text of

the relevant statutory provision, (2) legislative history, () legislative purpose,(.) a contemporaneous judicial construction barring review combined withcongressional acuiescence, or (N) the structure of the statutory scheme as awhole where the congressional intent to preclude judicial review is fairlydiscernible! $or example, implied preclusion was found where review would3severely disrupt KaL complex and delicate administrative scheme4 and permits a particular regulated class to evade the statutory reuirement thatthey first exhaust administrative remedies! :loc#! 9ven where the necessary

P!" 5


7/108

intent is seemingly present, however, courts will strain, pursuant to the canonof avoidance, to interpret the statute not to preclude judicial review ofconstitutional claims!


8/108

. The decision whether or not to enforce a particular law or rule is presumptively committed to agency discretion under - GF1(a)(2)! ec#ler v!+haney (1AN)!

-. - GF1(a)(2) precludes judicial review of an agencys refusal to grantreconsideration of an action because of material error because of theimpossibility of devising an adeuate standard of review for such agencyaction! '++ v!


9/108

1. ?onfinal agency action is not reviewable! -GF.! "gency action is $+ if (1) it isdefinitive and (2) has legal (not merely practical) conseuences! &tandard /il!

. Eefinitivei. The issuance of an administrative complaint is ?/T definitive agency

action but merely serves 3to initiate the proceedings!4 &tandard /il!ii. 9O">88


10/108

have not decided whether if +ongress reuires exhaustion bystatute for an "8" case, then the common law exceptionsshould apply!

a. K"&R E*$$B T'& %*9&T'/?6 'f a case is broughtunder the "8" and +ongress reuires by statute that the party exhaust an intraHagency appeal, could a courtexercise its discretion and apply a common lawexhaustion exception li#e extreme hardship to the

plaintiffJLb. +ommon law exemption doctrines would not apply in

situations where a speciali5ed statute applies!-. "8" -GF.6 39xcept as otherwise expressly reuired by statute, agency action

otherwise final is final for purposes of this section Kauthori5ing review of finalagency actionL whether or not there has been presented or determined anapplication for a declaratory order, for any form of reconsideration, or, unlessthe agency otherwise reuires by rule and provides that the action meanwhileis inoperative, for an appeal to superior agency authority!4

i. ?ote6 /n its face, this provision only reuires to exhaustadministrative remedies in two circumstanceswhen expressly

reuired by statute and when an agency reuires it by rule and provides for an automatic stay of the agency action pending appeal!

3. Coon -aw Exhaustion (nonH"8" cases when judicial review occurs underspeciali5ed review statutes that do not incorporate the "8") (note the exceptions tothe common law exhaustion doctrine were ?/T assigned)!

. $or cases ?/T brought under the "8" or governed by another statutesexhaustion reuirements, )7" #*//*+ 9 (*#)&$+" * ";7%')$*+ *&"/"($"' reuires a party see#ing judicial review to exhaust all available andadeuate administrative remedies whereby the controversy might be resolvedat the agency levelremedies which include intraHagency appellate remedies!

$. R$"+"''

1. S?/T96 "ddress whether a preHenforcement challenge ma#es tactical sense since aninitial judicial affirmance of a regulation in the abstract gives the regulation anintangible momentum that helds the agency defend it against subseuent challengeson separate grounds!

2. To determine whether an agency action is &$" for judicial review, courts balance (1)the fitness of the issues for judicial decision against (2) the hardship to the parties ofwithholding court considerationa reuirement that has no textual basis in the "8" but is conjured up to prevent courts 3from entangling themselves in abstractdisagreements!4 "bbott!

. 3the fitness of the issues for judicial decision4 andi. $actors +onsidered6

1.


11/108

3. +oncrete or "bstract! Eoes the court need to wait for the ruleto be applied before the court will be able to determine what itseffect will beJ

. $ormal or 'nformal! The court also weighs the extent to whichthe action is formal or informal and whether it emanated fromthe top level of the agency, rather than from the staff! Themore formal the more li#ely the action is ripe!

-. 3the hardship to the parties of withholding court consideration!4

i. &elfHexplanatory6 "bbott would be forced to choose betweencompliance at considerable cost and noncompliance at the ris# ofcriminal and civil penalties!

3. /ules o" &hu$6. "gency rules iediately establishing a legal duty that reuires a party to

alter its primary conduct is li#ely ripe for review in a preHenforcementchallenge to the promulgation of the rule! "bbott!

-. 'f the preHenforcement challenge is to agency action that does not reallyimpose any obligations to conform, then the party must wait until enforcement before see#ing judicial review! Toilet @oods (imposing a conditionalreuirementonly if an inspector sought access to a facility, was he to be

afforded it)!4. 9xample of a +ase that is NOT &$"6

. "n $E" rule reuiring ma#ers of color additives to submit to an $E"inspection of their facilities or face the suspended certification of their products was unripe for preHenforcement review because the court could betterdecide the legal issues in the framewor# of a concrete challenge in which itcould assess the $E"s enforcement problems and the ris# of disclosure oftrade secrets! Toilet @oods!

%. 9xample of a +ase that IS &$"6. The court held ripe for review an $E" rule reuiring that the brand name on

drug labels be accompanied by the generic name of the chemical every ti"e it

was used largely because the plaintiffs faced serious hardship in eitherengaging in costly compliance with the rule or facing a ris# of confiscationand possible criminal sanctions! "bbott


12/108

. JJJ The policy or factual underpinnings for the rule arearbitrary and capricious! JJJ Kis this substantive or proceduralL

b. Ece!ti#ns'

i. ?/ ?/T'+9 /$ 0*!

#. 0ationales6i. aste of judicial resources!

ii. 7alue of $inality6 unjustifiably impair the reliance interests of thosewho conformed their conduct to the contested regulation!

2. SCOPE OF R EVIEW OF AGENCY ACTION

. E;/ A&*#7$. +lassify the agency action as (1) a uestion of law, (2) a uestion of fact, or () a mixed

uestion of law and fact!1. 'f %uestion of


13/108

i. :owles v! &eminole 0oc# U &and +o! (1A.N)6 an agencysconstruction of its own regulations 3becomes controlling weight unlessit is plainly erroneous or inconsistent with the regulation!4

1. $irst, a court loo#s to the language of the regulation itself! 'f itis clear, that is the end of the matter!

2. 'f language is not clear then the court loo#s to see if the+onstitution or a statute ma#es a particular interpretationinappropriate!

3. $inally, if there is an administrative interpretation not ruled out by the +onstitution or a statute, that interpretation is controllingunless plainly erroneous or inconsistent with the regulation!

-. "n "gencys +onstruction of the +onstitutioni.


14/108

not merely interpret the statute! Thus, there is no ris# of inconsistentagency interpretations but the law has different meanings dependingwhen multiple agencies administering the same statute determine whatthe law is in different ways!

ii. 9xamples61. 0ate setting agencies that interpret and apply the internal

revenue code ('0& has special responsibility not rate settingagencies)!

2. "gencies that interpret the $/'" to provide records tomembers of the public upon reuest!

#. hen an "gencys 0esponsibilities and 8owers are


15/108

"mendments! :ecause of the 8residents delegation, the 98" had toconstrue - 1FM(b)(2) as a predicate to its own action! :ut just becausean agency has to interpret a statute does not mean that it administersthe statute! +ourts do not give deference to the E/=s interpretation offederal criminal statutes that they have to interpret, even though theyhave a special responsibility to administer the statute! " more specificresponsibility for administering the law is reuired to trigger +hevron!

". 0ossi$le Case6 "n "gencys 'nterpretation of its =udicial 0eview (8rocedural)

8rovisions in /rganic &tatutes! hy not extend that deference to an agenciesinterpretation the judicial review provisions in the organic statuteJ 0eason6when an agencys selfHinterest is so conspicuously at sta#e, +ongress shouldnot be ta#en to have delegated lawHinterpreting power to the agency!

i. 9delman v!


16/108

2. ead! This reuirement reflects the concern that deference to an

agencys interpretation is inappropriate in situations where it is implausible toinfer a congressional delegation of lawHinterpreting power!

i. hen has +ongress delegated to the agency the power to ma#e rulescarrying the force of lawJ

1. The +ourt said in Mead that such delegation Xmay be shown ina variety o" ways# as $y an agencyDs power to engage inadjudication or noticeHandHcomment rulema#ing, or $y soeother indication o" a copara$le congressional intent.X

2. The grant of authority to act with the force of law is a sufficient but not necessary condition for finding a grant of power tointerpret ambiguous terms!

-. +ourts will presue that an agencys interpretation of a statutory ambiguitydoes ?/T ualify for +hevron deference *?ead!

1. Euffy6 This is exactly what is happening in earst! The +ourt

decided that +ongress wanted the agency to decide who countsas an 3employee!4 :ut earst is a bit different than >ead because it emphasi5es the agencys fact finding expertise andnot the political accountable justification for agency deference!

2. 0eason6 hen +ongress provides 3for a relatively formaladministrative procedure,4 one that fosters 3fairness anddeliberation,4 it is fair to assume that 3+ongress contemplatesadministrative action with the force of law!4

P!" 15


17/108

ii. 8rocedural rules!iii. &ubstantive 0ules "dopted *nder the 3@ood +ause4 9xception!iv. here the agency interpretation is ?/T promulgated in the exercise of

one of above types of authority, the court may still find that +ongressdelegated to the agency the power to spea# with the force of law wherethere is *soe other indication o" copara$le congressional intent !4>ead! $actors that might lead a court to this conclusion include6

1. Euffy on $actors6

a. @enerally! :ig category of cases! 't includes /verton8ar#, the


18/108

offices is simply selfHrefuting!412. ence such rulingsshould be treated li#e the policy statements, agencymanuals, and enforcement guidelines mentioned inChristensen! Sidore, not Chevron, provided theapplicable principles!

. hether +ongress reuired the agency to engage in relativelyformal procedures before acting!

5. hether +ongress authori5ed the agency to prescribe legal

norms that apply uniformly throughout its jurisdiction!6. hether +ongress authori5ed the agency to adopt rules or

precedents that generali5e beyond a single case6 hether theagencys interpretation has precedential value or, stateddifferently, whether the interpretation represents theauthoritative position o" the agency (although 3precedentialvalue alone does not add up to +hevron entitlement)! >ead!

7. hether the agency itself intended its interpretations to havethe force of law!

8. hether the agency issues numerous similar suchinterpretations that by sheer volume suggest that the

interpretations are not intended to have the force of law!a. >ead6 3'ndeed, to claim that classifications have legal

force is to ignore the reality that .M different +ustomsoffices issue 1F,FFF to 1N,FFF of them each year! "nysuggestion that rulings intended to have the force of laware being churned out at a rate of 1F,FFF a year at anagencys .M scattered offices is simply selfHrefuting!4

9. hether the agency interpretation is situated so as to ma#e itanalogous to an interpretation contained within aninterpretative rule, a policy statement, an agency manual or theli#e!

#. @ood B8/ offered by &calia6 3'magine the following seuence of events6$++ action is challenged as ultra vires under the governing statute; thelitigation reaches all the way to the &upreme +ourt of the *nited &tates! The&olicitor @eneral sets forth the $++Ds official position (approved by the+ommission) regarding 2


19/108

i. ote6 +hristensen specifically involved an opinion letter, which would be classified as an interpretative rule under the "8"!

ii. ote6 the deference given under idmore is diminished if theinterpretation involves an area beyond the agencys expertise! That is,if the interpretation involves an area beyond the agencys expertisethen the court is li#ely to find the agencys interpretation less persuasive!

iii. +ongress had not delegated authority to the +ustoms &ervice to act

with the force of law when it authori5ed the agency to issue tariffclassification rulings! >ead!

". ?o deference applies to an agencys interpretation of a statute where theinterpretation is made by lawyers for the agency in the course of litigationover the meaning of a statutory provision! +henery '!

i. 0ationale6 The interpretation is highly li#ely to be a post hocrationali(ation for some agency action based on the agencys litigating posture! The agency is less li#ely to have made the interpretation based on considerations of what is the best public policy consistentwith the law!

. %uestionable +ases6

i. !n"oral )djudication +ourts will probably grant +hevron deferenceto an agency interpretation of a statutory provision made in the contextof informal adjudication because such adjudication has the force oflaw! 't is uestionable, however, whether a court would grant +hevrondeference to an agency interpretation made in the context of informaladjudication where that adjudication occurs with little or no procedure,no adversary presentations, no highHlevel agency consideration, but itstill has the force of law with respect to the parties to the adjudication!

!. +ase


20/108

ensure the full airing of issues! Thus, if these attributes are not presentthen the +ourt will li#ely not apply +hevron deference to the agencyinterpretation! The factors, however, are not determinative! The +ourtthus, engaged in an extended analysis of the way the &ervice used theruling letters to conclude that they were best treated li#ely policystatements, agency manuals, and enforcement guidelines afforded onlyidmore deference in +hristensen!

4. @4 C(evr#n deference.

. S)" 1: DRAIN THE MEANING: +hevron deference involves two steps!$irst, the reviewing court determines whether the meaning of the statutorylanguage at issue is clear using traditional tools of statutory construction! 'fthe meaning is clear then the court must give effect to the clear meaning of thestatute! /n rare occasions, however, courts have refused to give effect to areasonable agency interpretation of an ambiguous statutory provision thatinvolves a uestion of great economic and political significance because+ongress is less li#ely to have intended an implicit delegation+ongress ismore li#ely to have focused on major uestions than on interstitial matters!$E"!

i. T* $+( /-$!%$) *% /%') '7*9 1 *& /*&" &"'*+-"

$+)"&&"))$*+' &" %'$-" YOU DO NOT NEED TO SHOWTHAT THE INTERPRETATIONS ARE E*+,-- PLAUSIBLE.

ONLY THAT THERE ARE TWO OR MORE RE,S/0,-E

INTERPRETATIONS. Try t# drain as "uc( "eaning #ut #f statute

#r statutes as y#u can.

ii. >*&T +/?&'E90 "


21/108

2. 3This case involves one of the most troubling public health problems facing our ?ation today6 the thousands of prematuredeaths that occur each year because of tobacco use!4 $E"!

3. The +ourts inuiry into the &tep /ne uestion 3is shaped, atleast in some measure, by the nature of the uestion presented!421. +hevron, the +ourt noted, is based on 3animplicit delegation,4 but in 3extraordinary cases,4 courtsshould 3hesitate before concluding that +ongress has intended

such an implicit delegation!4. 0ationale for 0ule6 The apparent theory is that +ongress

should not be ta#en to have as#ed agencies to resolve thoseuestions!

iv. /ther ?otes61. " courts prior judicial construction of a statute trumps an

agencys construction otherwise entitled to deference underChevron only if the prior court held that its constructionfollowed from the unambiguous terms of the statute! This isthe only way the court can set in stone the meaning of thestatute6 ossification!

-. S)" 2: &econd, if the meaning of the provision cannot be deemed clear (or ifthe statute is silent), the court must uphold the agencys interpretation of thestatute if that interpretation is reasonable or permissible!

i. To determine whether the agencys interpretation of the statute isreasonable a court conducts two conceptually distinct inuiries6

1. ;irst , the +ourt uses the same tools of statutory construction todetermine whether the statute, even if subject to more than oneinterpretation, can support the particular interpretation adopted by the agency!

a. $or example, the +ourt might loo# at the statutorycontext as a whole to determine whether the agency

interpretation is clearly ruled out!b. ?ote6 &ome commentators suggest that this inuiry

should be better considered a part of &tep 1!2. Second , in addition to the first approach, the courts at +hevron

step two evaluate whether the agency in reaching itsinterpretation reasoned from statutory premises in a wellHconsidered fashion (i!e! engage in an arbitrary and capriciousreview)! This is the hard loo# review of /verton 8ar#!

a. +nder (ard l##) revie$ y#u are l##)ing at $(et(er

t(e agency "ade t(e rig(t !#licy call. In /vert#n

ar) t(e c#urt is n#t just as)ing in t(e abstract

$(et(er its reas#nable t# !ut a r#ad t(r#ug(a !ar)but is t(is a !er"issible call given $(at C#ngress (as

said in t(e statute.

b. &ee "rbitrary and +apricious 0eview!c. &ee 7eri5on +ommunications; see also /verton 8ar#;

&tate $arm!#. +ase


22/108

1. F#)'6 +lean "ir "ct "mendments of 1AGG reuiresnonattainment statesstates that had not achieved national airuality standards established by the 98"to set up a permit program that reuires major 3stationary sources4 of pollution toshut down unless they meet certain stringent conditions thatualify them for a permit! 1FW1.W1HH98" issues regulationsimplementing the +lean "ir "ct "mendments! /ne of theregulations allows a &tate to adopt a plantwide definition of the

term 3stationary source4 such that a plant may modify or install pollution emitting devices provided that the total pollutionoutput of the plant does not increase!

2. P&*#"(%&"6 0espondents file a timely petition for review inE!+! +ir! to set aside the 98"s regulation!

a. E!+! +irs "rgs6b. +lean "ir "cts text and legislative history unclear as to

the meaning 3stationary source!4c. @iven above lac# of clarity, E!+! +ir! loo#s to purpose

of statute, which it finds is to improve air uality!d. :ased on precedents, it finds the bubble concept

inapplicable to programs enacted to improve air ualitye. Therefore, it set aside the 98"s regulations embodying

the bubble concept as contrary to law (under GFM(2)(") yes ' thin# because this is dealing with informalrulema#ing)!

f. &upreme +ourt grants cert and 09790&9& upholdingthe 98"s regulations!

3. I''%"6 whether the 98"s decision to allow &tates to adopt a plantwide definition of 3stationary source4 is based on areasonable construction of the statutory term 3stationarysource4 in the +lean "ir "ct!

ii. CHEVRON HYPO6 what if 98" said that our rules can define facilityreasonably broadly! hat if 98" said we will define stationary sourceto mean all facilities within a state owned by one companyJ ouldthis survive judicial reviewJ Bou would admit that there is anambiguity but under &tep 1 you could say that there are limits to theambiguity! O+ )7" ";/ "/* )7$' &*#7 * ((&"''$+! -*)7')"' +( **$+! *& #7$+' $+ )7" &/*&. Bou could attac# it byloo#ing at the text first and second loo# at structure of the statute (loo#for specific controls that suggest +ongress intended to apply the "cton a region by region basisin this case the ?atural 0esourcesEefense $und tried to prove that the bubble concept was too broad)

(structural arguments6 (a) statute was designed to ma#e the agencyloo# at local problems, and (b) its odd that +ongress would envisiontwo parts), next you could loo# at legislative history to reveal thatthere are many sources that +ongress intended the meaning ofstationary source not to cover! N";) *% #+ ))# $) *+ ')" 2. 'fyou lose no &tep 1 you could argue that it was not a reasonableinterpretation of the statute! Bou could loo# at same stuff in step 1 andsay that the interpretation doesnt fitthat it is unreasonable to ta#e

P!" 21


23/108

this ambiguity to be so broad (i!e! the first component of step 2thereis some debate about whether there should be treated as step 1)! ?ext,you could go to arbitrary and capricious review (the second componentof step 2many commentators say that this step is really just arbitraryand capricious mas#ed under words of reasonableness), which isgoverned by /verton 8ar#s hard loo# review! &tep F tells us thatthere is delegated power! &tep 1 says that there is an ambiguity! &tep2 is the court reviewing the agencys policy decisions! *nder /verton

8ar#, the agency has to have made a ! >a#e a policy argument6 Thisdefinition might increase pollution because O! &tep 2 is euivalent tothe hard loo# review under the arbitrary and capricious! This view isconsistent with the delegation theory! The "8" tells us how to reviewdecisions of policy ma#ing delegation! The "8" provides a standardfor reviewing policy decisions! State ;ar is ay ?ot "pply here the "gency as a 8ersonal &ta#e in a8articular 'nterpretation! This is li#ely to occur where the agency might

obtain or save money under one interpretation rather than another!$$$. here +hevron principles do not apply, a reviewing court will attempt to discern the $est

interpretation of the statutory language and in doing so grant the agencys interpretation somedegree of deference pursuant to the S$(/*&" (*#)&$+" a doctrine under which theagencys view can have the 3power to persuade4 as opposed to the 3power to control!4*nder idmore, the extent of deference afforded an agencys interpretation is determined by factors which include6

1. (1) the consistency of the agencys position,

P!" 22


24/108

2. (2) the timing of the agencys position,. The interpretation is more worthy of deference if adopted soon after the

statute was passed, since the agency was probably more familiar with thelegislative purpose!

3. () the nature of the agencys expertise!4. (.) thoroughness of consideration

. "n interpretation is more worthy of deference if the agency carefullyconsidered it at a high level!

-. &imilarly, the formality by which the interpretation was expressed (e!g! in a published regulation or a reasoned adjudicatory opinion, rather than aninformal letter) is relevant to deciding how much deference it is owed!

%. (N) reenactment. The interpretation is more worthy of deference if the legislature reenacted the

statute with #nowledge of the agencys interpretation of it!&. (M) "gency expertise

. The interpretation is more worthy of deference if it reflects agency expertisein dealing with the issues! 'n contrast, courts have more expertise in applyingthe common law or in construing nontechnical statutes!

. (G) 8ublic participation

. 'f the public participated in the process that produced the interpretation, therule is more worthy of deference!

. 9O">8


25/108

#. 'ssue6 hether the fire hall duties (consisting largely of waiting time)constituted wor#ing time, for which overtime compensation is due under the$air


26/108

+ongress has not delegated lawma#ing authority to the agency andWor the interpretation ismade informally without sufficient procedures to ensure careful consideration and full airingof relevant issues!

$. ISSUES OF FACT

$. @eneral ?otes!1. :lac#


27/108

by statute ! ! ! ! 'n ma#ing the foregoing determinations, the court shall reviewthe whole record or those parts of it cited by a party, and due account shall beta#en of the rule of prejudicial error!4

-. &ubstantial 9vidence P "rbitrary and +apricious! The E!+! +ircuit along withseveral other jurisdictions has held that the substantial evidence standard isvirtually identical to the arbitrary and capricious standard! "ssociation of Eata8rocessing &ervice /rgani5ations, 'nc! v! :oard of @overnors of the $ederal0eserve &ystem (1A.)!

i. 3The distinctive function of paragraph (9)what it achieves that paragraph (") does notis to reuire substantial evidence to be foundwithin the record o" closed+record proceedings to which it exclusivelyapplies!4 "ssociation of Eata 8rocessing &ervice /rgani5ations, 'nc!v! :oard of @overnors of the $ederal 0eserve &ystem (1A.)

ii. >ain theory that 2 and are different is the structure of the "8"! hyhave different language if its the same standard! 't certainly cant beless deferential than the arbitrary and capricious because that willalways apply!

iii. &calia says that the substantialParbitrary in terms of substance ofdeference but the difference is that thhe substantial test is supposed to

ma#e clear that the agency decision must be based on the record!+ontrast this with informal proceedings! Euffy6 ' am not sure that&calias view is a persuasive interpretation of the "8"! Euffy the &up!+t! probably wont address this issue because the &up! +t! is on recordas saying that even the difference between 2 and is so slight that it ishard to imagine cases where you would reverse under 2 but affirmunder ! &o the &up! +t! thin#s that this debate about distinguishing between these standards is slightly misfounded because if you thin#about how judges give more or less deference! hen would a judgereverse under but affirm under!

iv. The other argument for saying that arbitrary and capricious is different

than substantial evidence test is that +ongress sometimes says ininformal proceedings which is governed by arbitrary and capricioustest, +ongress says apply the substantial evidence test! This is a veryodd thing! hat if you were a court faced with whether arbitrary andcapricious and substantial evidence is the same thing! :ut +ongresssays use the substantial evidence test rather than the arbitrary andcapricious test! "t least one court thought that this was reuired! Then=udge &calia thought that this was too subtle of a point to really worryabout! >ost courts thin# it is a very unusual case where a court wouldaffirm under but reverse under .!

2. 9?T'09 09+/0E 097'9! 'n reviewing for substantial evidence, the court must

consider the entire record, not just those portions of the record that supports theagencies findings! W" /"'%&" '%-')+)$$) $+ &")$*+ )* )7" &"') * )7" &"#*&(. *niversal +amera +orp!

. The final sentence of the GFM which tal#s about the 3whole record!4 hat thismeant is this clarified an issue that was in play prior to the enactment of the"8"! The statute just says 3evidence4the statute could be interpreted to saythat if there is any evidence in the whole record then you have to affirm!

P!" 2


28/108

-. 9xamples6 you have one witness that says O happened! This is evidence! 'tmay be substantial! 'f you have 2F other witnesses that say O did not happenthen the single persons testimony becomes less substantial! 't was unclearwhether the courts could engage in this weighing function! :ut the "8"clarified that this by including 3whole record4 review! e now #now what basis we are to measure substantial by! W" /"'%&" '%-')+)$$) $+&")$*+ )* )7" &"') * )7" &"#*&(. This is the major feature of *niversal+amera in deciding that there is this whole record review! The court goes on

to say even without regard to this change in the whole record review,+ongress intended, based on the history, that courts should assume moreresponsibility for review of ?


29/108

iii. 'ssue6 the effect of the "8" and the TaftHartley "ct on the duty of the+ourts of "ppeal when called upon to review order of the ?


30/108

!. ?evertheless, the +ourt allowed that the &ecretarys decision is 3entitled to a presumption of regularity4 and that the 3ultimate standard of review is anarrow one! The court is not empowered to substitute its judgment for that ofthe agency!4

7. This decision was to be made on the basis of the administrative record, whichis simply what was before the &ecretary at the time he made his decision!

i. =udicial review based solely on litigation affidavits is li#ely to be heldinadeuate pursuant to /verton!

ii. The court may reuire the administrative officials who participated inthe decision to give testimony explaining their action although this isusually to be avoided!

1. 0euires a showing of bad faith or improper behavior!2. The preferred course is to remand to the agency for a fuller

explanation of the agencys reasoning at the time of the agencyaction!

iii. To survive an arbitrary and capricious review agencies must 3ta#ewhatever steps KtheyL need to provide an explanation that will enablethe court to evaluate the agencys rationale at the time of decision!48ension :enefit @uaranty +orp! v!


31/108

-. "dministrative 0ecord 0euirement! The 3administrative record4 consists ofa file of materials that the agency maintains as the exclusive basis for itsdecision; or, if no such file is maintained, it consists of all unprivilegedmaterials that were actively considered by the agency or its staff (or that weresubmitted by outside parties) in connection with the action under review!here procedural law so provides, the record must also disclose oralcommunications between decisionma#ers and outside parties!

i. The court may, upon a proper showing, allow discovery and other

evidentiary proceedings in order to supervise the agencys compilation(but not the supplementation) of the administrative record!

ii. 3K'Lnformal agency action (not governed by paragraph (9)) must bereviewed only on the basis of Qthe administrative record already inexistence!4 "ssociation of Eata 8rocessing &ervice /rgani5ations,'nc! v! :oard of @overnors of the $ederal 0eserve &ystem (1A.)

1. 3't is true that, in informal rulema#ing, at least the ost critical "actual aterial that is used to support the agencys position onreview ust have $een ade pu$lic in the proceeding andexposed to refutation! That reuirement, however, does notextend to all data, and it only applies in ruleaing and not in

other informal agency action, since it derives not from thearbitrary and capricious test but from the command of N *!&!+!- NN(c) that Qthe agency ! ! ! give interested person anopportunity to participate in the rulema#ing!4 'd!

#. +ase


32/108

0eserve &ystem (3:oard4) issues order approving+iticorps application to establish a subsidiary,+itishare, to engage in certain data processing andtransmission services! ?8@ W2W2:oard issues order,entered after notice and comment rulema#ing,amending those portions of 0egulation B which dealtwith the performance of data processing activities by ban# holding companies! ?9@ "E"8&/ petitions the

E!+! +ir! for review of the orders issued on GWAW2 andW2W2!

2. !ssue: hat standard or standards of review should govern the judicial review of the :oards orders where one of the ordersinvolves an adjudication and the other order involves aninstance of informal rulema#ing!

3. /easoning 6 3K'Ln their application to the reuirement of factualsupport the substantial evidence test and the arbitrary orcapricious test are one and the same! The former is only aspecific application of the latter, separately recited in the "8"not to establish a more rigorous standard of factual support but

to emphasi5e that in the case of formal proceedings the factualsupport must be found in the closed record as opposed toelsewhere!4

. Euffys +omments6a. ?ote on p! .F1 that for the rulema#ing under $lorida

9ast +oast there is no formali5ed hearing that isreuired! ow about for adjudicationJ ell then thereis the +ircuit split6 under &eacoast you dont need onthe record to trigger the formal proceedings! 'n thiscase the :oard initially went through formal proceedings because it thought it was going to go

through adjudication, then it went through rulema#ingin the middle because it changed course and attachedthe rulema#ing to the adjudication!

b. The agency begins by going through adjudication andthen notes the need for a rule! Thus, it then goesthrough rulema#ing and promulgates a rule which itattaches to the order that emerges from theadjudication! This is procedurally proper according toEuffy!

5. Euffys %uestions6a. ould the statute on p! .F1 survive a nondelegation

challengeJ "nswer6 easily because of the intelligible principles that are enshrined in the organic statute!

b. The :oards authority to issue the order and the rule is provided by the statute on p! .F1 (- 1.)! :ut what isthe basis of the statuteJ hat provision of the+onstitutionJ >ost li#ely the +ommerce +lause because ban#ing activity is generally interstate!

P!" 31


33/108

c. 'f you are an agency and you want to survive judicialreview here, what would you doJ "nswer6 *nder/verton, you would set forth all the reasons thatsupport your decision that are listed in the statute! $orexample, you would want to show how the nonban#ingactivity produces benefits to the public (see &tatute on p! .F1)! Bou might also want to cite the +henery caseand its two principles on the exam!

3. :9 "0B6 3&ubstantial evidence4 provisions in some organic statutes may call for adifferent either more or less deferential standard of review than is found in the "8"!That is, an organic statute may call for the substantial evidence test in a informal proceeding where ordinarily only the 3arbitrary and capricious test4 would applyunder the "8"! &calia treated these two tests as the same, but he raises the issue thatin passing some organic statutes +ongress may have intended a stricter test than thearbitrary and capricious test when it uses the words 3substantial evidence4 becausethat test under the "8" 3acuired a reputation for being more stringent!

. ow to approach such a problem6i. $irst, as# whether the organic statute in uestion was passed postH

1A.! 'f so, then this leans towards a finding that +ongress did not

intend to impose a stricter standard than the 3arbitrary and capricious4test of the "8" because of &calias opinion in "ssociation of Eata8rocessing &ervice /rgani5ations, 'nc! (1A.), which says the3arbitrary and capricious4 test is the same as the 3substantial evidence4test! &ee also &tate $arm (stating that the scope of review was3arbitrary and capricious4 even though the statute stated that theagencys determination was to be supported by 3substantial evidenceon the record considered as a whole!4)!

ii. N *!&!+! - NNA provides that a subseuent statute shall not be held tosupersede or modify the "8" provisions 3except to the extent that itdoes so expressly!4 &ome courts have held that the import of the - NNA

instruction is that +ongresss intent to ma#e a substantive change beclear! here there is no reason to suppose that +ongress clearlyintended to switch to a stricter test than the 3substantial evidence4 testin the "8" for formal proceedings, that standard shall be applied!

0. REVIEW OF FINDINGS OF FACTS THAT ARE NOT SPECIFICALLY SUPPORTED BY

THE RECORD.

$. =lac -etter -aw6 3?otwithstanding the reuirement of record support for agency findings informal proceedings, an agency may, with notification to the parties and opportunity to rebut,rely on officially noticed facts in a proper case! 'n addition, in both formal and informal proceedings, an agency need not provide more support for predictive or other judgmentalfacts than it can fairly be expected to have gathered at the time of the action!4

$$. "8" - NNM(e)6 3The transcript of testimony and exhibits, together with all papers andreuests filed in the proceeding, constitutes the exclusive record for decision in accordancewith section NNG of this title, and on payment of lawfully prescribed costs, shall be madeavailable to the parties! hen an agency decision rests on official notice of a material factnot appearing in the evidence in the record, a party is entitled, on timely reuest, to anopportunity to show the contrary!4

. REVIEW OF THE EXERCISE OF AGENCY DISCRETION

P!" 32


34/108

$. &cope6 occurs when an agency determination cannot be categori5ed as either findings of factor conclusions of law!

1. 9O">8ecisions to )llocate o" /esourcesHH"n agencys decision to allocate

its finite resources to in large measure issuing new rules and regulations ratherthan updating old rules! The agency has a measure of discretion to allocate itsresources as it sees fit! This discretionary decision does not involve a uestionof law that can be resolved by careful statutory interpretation nor does it

involve a uestion of fact!-. )gency >eterinations o" 0olicy any agency decision that resolves

scientific and legal uncertainty is essentially a choice about regulatory policy!The /ccupational &afety and ealth "dministrations decision about how todraw the doseHresponse curve for ben5ene at low levels of exposure for purposes of administering a provision in a statute! There is no reliable datefrom which the curve can be scientifically derived! The statute is silent on theissue! :ut the agency has to ma#e the decision!

#. /ecission o" a /ule +ourts treat the recission of a rule under a standarddifferent from the standard used to review agency decisions to allocateresources6 so says &tate $arm! ' thin# however this is an error and that both

decisions are governed by GFM(2)(")! 'n the case of the rescission, however,the +ourt demands more because 3revocation constitutes a reversal of theagencys former views as to the proper course4 whereas allocation decisionsdo not constitute such a reversal! 3"n agency changing its course byrescinding a rule is obligated to supply a reasoned analysis for the change beyond that which may be reuired when an agency does not act in the firstinstance!4

$$. :lac#


35/108

. The agency failed, without adeuate justification, to consider or adopt an importantalternative solution to the problem addressed in the action!

. The agency failed to consider substantial arguments, or respond to relevant andsignificant comments, made by the participants in the proceeding that gave rise to theagency action!

5. The agency has imposed a sanction that is greatly out of proportion to the magnitudeof the violation!

16. The action fails in other respects to rest upon reasoned decisionHma#ing!4

$$$. 0ecord 0euirement6 Euffy %uote6 3There is a recordHbuilding reuirement implicit in judicial review!4

$. Euffy /n The 0elationship between +hevron &tep 2 and hard loo# review6 trying todetermine whether the agency has engaged in reasoned decisionma#ing! 'f there is anydifference between the two, some judges would put into +hevron 2 an anaylsis of of whetherinterpretation falls within the ambiguity! &o they are not just loo#ing at the agencys policycall, they are still loo#ing at the statute! . Thhe court in reviewing that decision is constantlyloo#ing at +ongresss decision! &o if you are a judge or an administrator! Euffy thin#s thisis a silly controversy because its just semantics! 'f you say that step two doesnt encompasssome things that &tate $arm and /verton 8ar# command, you still have to those things! 7uffy said t(at State Far" and /vert#n ar) IS $(at C(evr#n Ste! 2 is ab#ut !

. '?$/0>"< "E=*E'+"T'/? +"&9


36/108

dont #now whether the sec! made these determinations! There was no notice!The statute supposedly constrains the sec! discretion but there is nothing to tellus that the sec! did that! The petitioners argument is that the sec! should havewritten down somewhere on some publicly available document that justifiesthe sec! determinations! T(e c#urt rejects t(is vie$! The sec! can build a roadas long as the sec! can ensure that in ma#ing the road these two ualificationsare met (no available alternatives, f

". :ut this is informal adjudication because the agencies have almost unfettered

discretion to ma#e this decision; nothing in the statute reuired rulema#ing! 'fyou choose adjudication! +onstitutionally it is considered a rulema#ingdecision! 8rocedures under constitutionPnone under :'Hmetallic! 8roceduresunder the "8"Pnone because the agency choose informal adjudication (some people call this 3informal decisionma#ing4 to emphasi5e that this covers awide range of people in a case li#e this where under a constitution it isrulema#ing)!

. 'f there are no procedures reuired, if the sec! made no findings, then howdoes the court review thisJ The court can review this by loo#ing at all of thedocuments that were before the agency when it made its decision! The courtalso needs to #now what the decision ma#er actually decided! ow did the

decision ma#er decide that there is no feasible alternative! The only way todo this if no findings is to subpoena the administrator to get his thought processes! 'f the administrator doesnt want to appear, then the administratorcould ma#e formal findings saying why there is no feasible alternative! &odespite saying that the agency doesnt need to ma#e formal findings, theagency does have to ma#e formal findings in order to avoid having theadministrator present! 9ven the court notes in


37/108

. $acts6 utual

"utomobile 'ns! +o! (1A) (agency action arbitrary and capricious). Euffy6 &tate $arm is nothing new6 state $arm is /verton 8ar# in a rulema#ing

case! /verton 8ar# was arbitrary and capricious applied in an informaladjudication! This is an example to show you how arbitrary and capriciousactually wor#s! &tate $arm is a case that rejects an argument after the7ermont Ban#ee case, &ome scholars thought that 7ermont Ban#ee was a realcut bac# on judicial review! The +ourt says that is not right6 7ermont Ban#ee

says you cant impose additional procedural reuirements!-. Euffy6 hen the court applies the arbitrary and capricious standard the +ourt

finds three failings! The regulatory history is complex but it can besimplified6 (1) +ongress passed a statute that reuired ?T&" to imposeadditional reuirements on the motor vehicle industry to improve safety, (2)throughout the late MFs and GFs the agency began to gain more and moreexpertise and try out some regulatory approaches that failed (interloc# system6cant start car without annoying bu55ing), () the agency is trying to force

P!" 3


38/108

manufacturers to put either (a) airbags or (b) automatic seatbelts (detachablemotori5ed belts or nondetachable), (.) the agency in late GFs (end of proHregulatory +arter administration) puts in place a regulatory rule that sets fortha time table to implement this rule, (N) 0eagan administration6 rescinds therule! The rescission of the rule can only ta#e place through rulema#ing and itis subject to judicial review, (M) insurers and safety groups bring suitchallenging the rescission, (G) thhe uestion is whether the agency engaged inreasoned decisionma#ing with respect to the rescission of this passive restraint

regulation, () the agency says that this passive restraint regulation is notgoing to provide additional safety6 they dont say that seatbelts wont improvesafety6 they say if they reuire passive restraints the industry will not adoptairbags because they are expensive, and if they (A)

#. +ourt finds three problems6i. (1) the agency didnt consider reuiring airbags! The agency didnt

address this! The +ourt doesnt say you have to address every possiblealternative but this a "aj#r alternative that was proposed to theagency, the agency didnt investigate this, didnt give a good reason

ii. (2) the +ourt thin#s that the agency does not have its facts correct, the+ourt here is reviewing whether the agency has enough support in the

record, is the agency factually supported such that people will actuallydetach belts, the cost benefit data seemed to suggest if you could get1V more drivers to have these safety belts then benefits exceed costs!The court recogni5es that this regulation is being promulgated withuncertainty! The agency says we have not one iota of evidence thatwe can reach the 1V! :ut there was some evidence about the passiveseatbelts6 in one pilot program the data suggests that most peoplewerent afraid of passive seatbelts, suggests that people are more li#elyto use seatbelts if they are selfHengaging,

iii. () The third flaw is that theh agency failed to consider ma#ing theseatbelts nondetachable!

(. Euffys %6 why did the lawyers at the &upreme +ourt for the agency just say6loo# this rulema#ing record is very complex and uncertain6 what happened is0eagan too# office, the administration changed and the agency is supposed to be accountable, it is reasonable that an agency ta#e a deregulatory approach6that explains a change in policy! Two reasons6

i. The agency didnt say that and, under +henery ', can not ma#e posthoc rationali5ations!

ii. "nother reason if it was raised administration change argument wasraised6 when the agency rescinds the rule a change in administration isnot enough to justify deregulation because this delegation still has anintelligible principle6 the agency is reuired by +ongress through

statute to ma#e cars safer! The agency has to try to tie bac# its actionto the +ongressional statute! There isnt a change in interpretation thatis going on here! The agency cant just change because of politics because the statute itself does not ma#e politics applicable because+ongress has directed that the agency regulate the auto industry and base its decisions on the facts! The agency still has to justify itsdecision ma#ing using the +ongressional standards! This goes bac# tothe more general theme6 we constantly have to be loo#ing bac# to the

P!" 3


39/108

statute when deciding! T(e C#urt is f#rcing t(e agency8s decisi#n t#be funneled by t(e statute.

". The rule at issue6 &tandard 2F6 the rule see#s to achieve automatic crash protection by reuiring automobile manufacturers to install either of two passive restraint devices6 (1) airbags or (2) automatic seatbelts!

. 'nitial &cope of =udicial 0eview 'ssue6 ?T&"s decision to revo#e is anexercise of the agencys discretion! This discretionary decision does notinvolve a uestion of law that can be resolved by careful statutory

interpretation nor does it involve a uestion of fact! "s an exercise of theagencys discretion it is governed by the arbitrary and capricious test of GFM(2)(") because the organic statute does not alter the "8"s default standard!0especting factual findings that the agency ma#es to justify its decision torevo#e, however, +ongress did alter the "8"s default standard by reuiringthat they be supported by 3substantial evidence,4 which under the "8" is astandard of review reserved exclusively for formal proceedings (although insubstance similar to the arbitrary and capricious test)!

!. &ubstantive 'ssue6 whether ?T&"s rescission of the passive restraintreuirement of &tandard 2F was arbitrary and capricious under GFM(2)(")!

7. 0easons why ?T&"s rescission is arbitrary and capricious6

i. $irst, the agency gave no consideration whatever to modifying the&tandard to reuire that airbag technology be utili5ed!

1. The agency tries a postHhoc rationali5ation which the +ourtrejects under the +henery principle that agency action can beupheld only on the basis of articulated by the agency itself!

2. The +ourt emphasi5es that it isnt reuiring the agency toconsider all policy alternatives or reuiring the agency tofollow specific procedures in violation of the 7ermont Ban#ee principle! 0ather the +ourts point is that it was a logicalalternative to consider because it was an alternative statedwithin the rule the agency see#s to rescind!

ii. &econd, the agency too uic#ly dismissed the safety benefits ofautomatic seatbelts! The agency could not reliably predict that if itreuired passive seatbelt usage that the actual seatbelts would be used by passengers and thereby help protect against injuries! hen theagency dismissed the safety benefits of the seatbelts it merely providedthis uncertainty as a basis justifying its decision not to consider thesafety benefits!

1. 0*


40/108

belts! " detachable automatic belt may increase usagesince it reuires no effort on the part of the passenger!The agency should have considered this considering itsdata on seatbelt usage only deals with passive seatbelts!

b. The agency failed to articulate a basis for not reuiringnondetachable belts under &tandard 2F!

$. H*($+!6 The ?T&"s rescission was arbitrary and capricious!2. "TUT +orp! v! 'owa *tilities :oard (1AAA)

. Euffy6 networ# element6 if its ambiguous the agency would still win! Theonly way that the industry group could win is if the statute clearly excludedthese non

-. F#)'6 $++ interprets the Telecom "ct! The Telecom "ct is designed toderegulate local service! +ongress pushed this forward after the successderegulated the national telecom industry! The issue is that on the local levelthere is a natural monopoly! "ny deregulation that ta#es place will not giverise to competitors because its too expensive to build new hardware(3networ# elements4) in a small local area such that the new company could profitably compete with the incumbent! To remedy this situation +ongressreuires the incumbent to lease out a minimum number of its networ#

elements! To decide on this minimum number the statute reuired the $++ toconsider whether access to the networ# elements was 3necessary4 and whetherlac# of access would 3impair4 a competitors ability to compete with theincumbent and provide local service! The 'ncumbents challenged an $++ rulethat set the minimum number of networ# elements that incumbents must ma#eavailable to reuesting carriers on two bases6 (1) they challenged the $++slist of what constitutes a 3networ# element4 (they did this because the feweritems on the list, then the fewer things they would have to lease out), and (2)they challenged the minimum number of networ# elements the $++ decidedupon on the grounds that the $++ failed to consider the 3necessary4 and3impair4 standards!

#. R"'*+$+!6i. 3?etwor# 9lement4+hevron &tep F (no problem here bWc $++ has

rulema#ing authority, administers the statute, etc!), +hevron &tep 1,+ourt concludes that 3networ# element4 is ambiguous but in a cursoryfashion further concludes that the $++s interpretation falls within theterms range of ambiguity! Euffy complains that this is a crap analysisand it should not be employed on the exam! The reason you dont seelengthy step 2 analysis is because if its open to the agency to decidewhat counts as a 3networ# element4 then the agencys decision isreasonable! The +ourts analysis also might reflect the briefing in thecase6 sometimes parties will put all of their chips on the step 1

analysis!ii. 3'mpair4+hevron &tep F (same), +hevron &tep 1 (same), +hevron

&tep 2the agency gave no meaning to the term 3impair4 but merelystated that the standard would be met if 3the failure of an incumbent to provide access to a networ# element would decrease the uality, orincrease the financial or administrative cost of the service a reuestingcarrier see#s to offer, compared with providing that service over otherunbundled elements in the incumbent


41/108

was an inadeuate definition because it essentially gave no meaning tothe word impair as a limitation on what the $++ could reuire theincumbents to lease to the new entrant! Euffy6 its important to as#why does the +ourt overrule the agency on this ground! "fter all as justice souter points out the words 3necessary and impair4 are prettyvague6 certainly just as ambiguous as 3source4! ?ecessary just means3needful4! 'mpair means just diminishes capacity! T(e )ey t(ing t#rec#gnize is t(at t(e lync( !in #f t(e "aj#rity8s argu"ent is a

structural argu"ent' y#u cann#t understand t(is statute t(e $ay t(eagency did because t(en t(ese ter"s d#n8t d# any $#r) at all. Thewords have to have some meaning! Euffy6 you could say that this is astep 2 issue that there is an ambiguity but this meaning isunreasonable! /r you could say that this is a step 1 issue that thestatutory ambiguity is not large enough to cover the agencysdecisions! The +ourt remands to the +ommission and suggests thatthey must give some narrow reading of this definition! The+ommission was reading another part of the statute as a congressional!

iii. 3?ecessary4HH +hevron &tep F (same), +hevron &tep 1 (same),+hevron &tep 2the agency gave no meaning to the term 3necessary4

but merely stated that the standard would be met regardless of whether3reuesting carriers can obtain the reuested proprietary element froma source other than the incumbent!4 The +ourt this was an inadeuatedefinition because it essentially gave no meaning to the word impair asa limitation on what the $++ could reuire the incumbents to lease tothe new entrant! The $++ 3blinded itself Kthrough this interpretationLto the availability of elements outside the incumbents networ#!4

iv. The +ourt engaged in a lengthy discussion in which it explained whythe 3necessary and impair4 standards impose a limitation! 'n doing soit examined the nature of the issues, the purpose and structure of the"ct, to determine whether +ongress had intended those words to

impose a limitation!(. H*($+!6 the +ourt held that the $++ could not reuire local telephone

companies to provide new competitors with unlimited access to their facilities3. 7eri5on +ommunications, 'nc! v! $++ (2FF2) (challenge to a rule)

. :oo#6i. /


42/108

telecommunications technology currently available and the lowest costnetwor# configuration, given the existing locations of the incumbentswire centers!4

iii. The '


43/108

mar#ets while avoiding serious interference with incumbentnetwor# operations!4 Thus, the +ourt upheld the $++scombinations rules a reasonable interpretation of section 2N1(c)()s obligation to unbundled networ# elements!

-. Euffy6 not much to say here6 just another example of +hevron application!The word being interpreted is 3cost4! This is clearly ambiguous on its face!9ven within the structure of the statute the word 3cost4 is also ambiguous!Then everything comes down to the reasonableness of the pricing

methodology! The +ourt ultimately affirms the agency on this! This is an/verton 8ar#, &tate $arm analysis! ere the evidence doesnt cut one way oranother! The +ourt says here that it is o# for the agency to pic# one way oranother! 7ery few judges are willing to engage in the detail orientated reviewof the type of =ustice :reyer is engaging in! :reyer ties bac# his reasoning tothe statute! e says that the agencys pricing methodology leads to excessiveregulation given that the overall purpose of the statute is a deregulatory not a proHregulatory purpose! =udges who are sophisticated about administrativelaw try to tie even there policy arguments to the statute!

$$. /ther ?otes1. B8/6 an agency can switch positions by citing only change of administrations

80/7'E9E T"T there is evidence in the record that there is inherent uncertaintyhere!

3. LEGISLATIVE CONTROL OF ADMINISTRATIVE DISCRETION

. Reep in mind these variations6$. +ongress a$dicates its responsibilities by delegating unfettered uasiHlegislative power to the

9xecutive :ranch or the =udicial :ranch!$$. +ongress aggrandi(es itself at the expense of the 9xecutive :ranch (1) by appointing

"dministrative /fficials; (2) by having members of +ongress serve on "dministrative:odies; () by controlling the removal of administrative officials; (.) by exercising a3legislative veto4 over "dministrative action!

$$$. +ongress aggrandi(es itself at the expense of the =udicial :ranch by delegating uasiHjudicial power!

/. I' C*+!&"'' -($#)$+! $)' &"'*+'$-$$)$"' )* ";"$'" )7" *9"&' #*+"&&"( - A&). I -

(""!)$+! %+"))"&"( "!$')$" *9"& )* + (/$+$')&)$" !"+#K

$. "gencies and "rticle '6 The Eelegation Eoctrine1. K8arty ?ameL might argue that +ongress violated the nondelegation doctrine by

granting Kthe agencyL excessive legislative discretion in violation of theconstitutionally based nondelegation doctrine!

2. T7" (""!)$*+ (*#)&$+", which is largely derived from "rt! ', sec! 1, cl! 1 of the *!&!+onstitution, holds that +ongress can delegate legislative power provided that the

legislative act lays down 3an intelligi$le principle4 to guide the exercise of thedelegated discretion! &ince 8anama 0efining and &chechter 8oultry, decided duringthe ?ew Eeal, the +ourt has upheld, without any exceptions, delegations understandards phrased in sweeping vague terms! 'n part to distinguish its ?ew Eealrulings, the +ourt has emphasi5ed the following6 (1) where a delegation involves a greater degree o" legislative power the +ourt will demand a greater specificity ofstandards, (2) where a delegation iplicates the Executive%s constitutional powers ascommanderHinHchief of the military, the +ourt will demand a lesser specificity of

P!" 42


44/108

standards (


45/108

"merican Truc#ingv! 98"

2FF1 98" 8rotect human health U environment 3to anadeuate degree of safety4

*pheld

Ba#us v! *nited&tates

1A.. $ederal 8rice"dministrator

3generally fair and euitable4 prices *pheld

*nited &tates v!&outhwestern +able+o!

1AM $++ "uthori5ed $++ to issue regs 3as publicconvenience, interest, or necessity reuires!4

*pheld

hitman v!

"merican Truc#ing"ssns!

2FF1 98" 8rovision in the +lean ater "ct authori5ed 98"

to promulgate regulations establishing 3nationalambient air uality standards4 for certain air pollutants!

*pheld

?ational:roadcasting +o! v!*nited &tates

1A.. $++ &tatute empowers $++ to regulate broadcastersin the 3public interest4!

*pheld

inner v! >idH"merica 8ipeline

&ecretary must set pipeline usage fees based on3a reasonable relationship to volumeHmiles,miles, revenues, or an appropriate combination!4

*pheld

Touby v! *& "@ can add drugs to the list of controlledsubstances if he finds it 3necessary to avoid an

imminent ha5ard to the public safety4 and hefinds three conditions6 (i) high potential forabuse, (ii) no medical use, (iii) lac# of safe useunder medical supervision!

*pheld;states

%. :efore the ?ew Eeal. The $irst +ongress-. The &econd +ongress#. +argo of the :rig "urora v! *nited &tates (11)(. ayman v! &outhard (12N)". $ield v! +lar# (1A2)

. =!! ampton, =r! U +o! v! *nited &tates (1A2)&. The ?ew Eeal

. 8anama 0efining +o! v! 0yan (1AN)-. "!

agency!ii. $or example, in &checter a unanimous +ourt declared a part of the

?ational 'ndustrial 0ecovery "ct unconstitutional! The ?'0" allowedfirms in an industry to agree to codes of 3fair competition4 in order to

eliminate forms of competition that #ept prices low and preventedemployers from paying higher wages to their wor#ers! The 8residentwas authori5ed to enforce the codes as long as (1) the trade group that proposed a code was representative of the firms in an industry, (2) thecode would not promote monopolies, and () the code would serve the purpose of the ?'0" stated in its first section! The +ourt found thatthese three limitations insufficiently canali5ed the delegated legislative power to the effect that 3the discretion of the 8resident in approving or

P!" 44


46/108

prescribing codes, and thus enacting laws for the government of tradeand industry throughout the country, is virtually unfettered!4 The firstlimitation did not address the scope of the codes! The secondlimitation does nothing to limit the discretion of the 8residentregarding nonHmonopolistic codes! The +ourt found the stated policyof +ongress too expansive! 't permitted the 8resident to do anythingthat +ongress may do within the limits of the commerce clause for the betterment of business! Thus, because of its expansive jurisdictional

reach and its lac# of meaningful standards, the +ourt concluded thatthis was delegation running riot!

. "fter the ?ew Eeal. ?ational :roadcasting +o! v! *nited &tates (1A.)-. Ba#us v! *nited &tates (1A..)

i. The +ourt upheld a wartime statute that authori5ed a federal 8rice"dministrator to set 3generally fair and euitable4 prices!

#. "merican 8ower U odern Eoctrine6 >istretta v! *nited &tates (1AA)

. *&T be appointed by the 8resident with the

advice and consent of the &enate!2. 'nferior officers are also appointed by the 8resident with the

advice and consent of the &enate *?


47/108

appointment power of the inferior officer in the 8residentalone, the +ourts of orrison)!

1. "nother officers power to remove the officer suggestsbut isnot dispositivesupervision by a principal officer!

a. &calia6 mere power to remove does not necessarilymean subordination because political realities may

ma#e removal impracticable! $or example, 8resident+linton could have ordered the attorney general toremove the independent counsel, Ren &tarr, but itwould have been a political disaster for him had hedone so! Thus, in &calias view Ren &tarr was notsubordinate!

2. "dministrative /versight or review of the officer!

P!" 4


48/108

3. "nother entitys power to reverse the decisions of the officer asin the case of judicial review!

ii. 9xamples of 'nferior /fficers61. =udges of the +oast @uard +ourt of +riminal "ppeals

appointed by the &ecretary of Transportation are inferiorofficers! These court martial judges are inferior because theyare subordinate to the =udge "dvocate @eneral and to the +ourtof "ppeals for the "rmed $orces who reviews their decisions!

9dmonds v! *nited &tates!a. They are subordinate to the =udge "dvocate @eneral

i! ?ote6 +ourt found these judges to besubordinate even though their superiors couldnot influence the outcome of individual proceedings through the threat of removal or byreversing the decisions of the court martial judges!

ii! owever, the judges could $e reoved withoutcause!

iii! "dministrative oversight also suggested a

finding of supervision!b. The +ourt of "ppeals for the "rmed $orces reviews

their decisions!2. &pecial 8rosecutors because they can be removed by the

"ttorney @eneral, their duties are limited to investigation ofcertain crimes, and their position is temporary! >orrison v!/lson (1A)!

3. &pecial Tax +ourt =udges because they have the power to ma#e soe final decisions and they are subordinate to other officers!$reytag v! +ommissioner!

a. +ontrast with "


49/108

a. There is no incongruity for +ongress to vest the powerto appoint independent counsel in a specially createdfederal court! >orrison v! /lson!

b. "rguably there is incongruity if one branch appoints themembers of a body that are going to be reviewingsensitive documents that are solely within the sphere ofanother branch!

i! There was a proposed commission that was

supposed to review all executive branch papersdealing with the assassinations in the 1AMFs andrelease more of them that shouldnt be #eptsecret anymore! The original structure of thatcommission is that the members would beappointed by court of law! The executive branch objected because of incongruity! 'f youare reviewing executive branch docs thenanother branch should not be able to appoint themembers who would be reviewed documents,which are solely in the sphere of the 9xecutive!

3. 'mpairment of +onstitutional $unctionsii. 9O">8orrisonv! /lson!

". M"+$+! * 6H"(' * D"&)/"+)8 +( 6C*%&)' * L98

i. 3 Aeads o" >epartent 4 refers ?/T to the head of an agency but thehead of a cabinet level appointment! $reytag!

1. 9xamples6 ead of the Eepartment of &tate, ead of theTreasury!

2. +hief =udge of the Tax +ourt is not a head of a department!

$reytag!ii. 3Courts o" -aw4 refers not only to those courts established under

"rticle ''' but also other bodies that exercise judicial rather thanexecutive, legislative, or administrative power! $reytag!

1. 9xamples6 the Tax +ourt is a 3court of law!4 $reytag!. W7) #*+')$)%)"' + 6O$#"8K C+ C*+!&"'' #$%/"+) )7"

*$+)/"+) #%'" - &"("$+$+! )7" (%)$"' * + 6*$#"8K

i. Euties assigned to office should be 3germane4 to the office!&hoema#er v! *!&! (0oc# +ree# 8ar# case) (finding that +hief of9ngineers of the "rmy and the 9ngineer +ommissioner of E!+!, whowere appointed by the 8resident and confirmed by the &enate, did not

have go through the appointment process again when they becamemembers of a newly created office to supervise the development of0oc# +ree# 8ar# because their additional duties were germane to theoffices already held by them)! 'f there is a dispute about whethernewly assigned duties are germane to office held by a previouslyappointed officer, then the courts should in some measure be guided bythe uestion of whether there is any suspicion that +ongress was trying

P!" 4=


50/108

to both create an office and also select a particular individual to fill theoffice! eiss!

ii. B8/6 &tatute says that the heads of the departments shall beappointed by the 8resident with the advice and consent of the &enate!The statute also says that the 8resident is permitted to rotate the heads between the various departments! This would be unconstitutional because each rotation would constitute a new appointment in violationof the "ppointments +lause! The duties of a cabinet officer are not

fungible!!. C*+!&"'' #+ *$+) "("& "/*""' )7) &" +*) *$#"&' * )7"

U+$)"( S))"'.

i. 9xample6 "ppointment of /fficials to help +ongress exercise itslegislative powers!

2. Text of +lause6 3KThe 8residentL shall nominate, and by and with the "dvice and+onsent of the &enate, shall appoint "mbassadors, other public >inisters and+onsuls, =udges of the &upreme +ourt, and all other /fficers of the *nited &tates,whose "ppointments are not herein otherwise provided for, and which shall beestablished by embers of +ongress are prohibited from serving on administrative bodies because

(1) +ongress may not invest itself or its >embers with either executive or judicial

powers, and (2) +ongress must exercise its legislative power in accordance with thelawma#ing procedures set forth in "rt! '! >etropolitan ashington "irports! heremembers of +ongress sit on an administrative body and exercise legislative powersthis is unconstitutional because it violates (2)! here those members exercise judiciaor executive powers this is unconstitutional because it violates the separation of powers doctrine!

$$$. R"/* P*9"& under "rt! ''

P!" 4>


51/108

K"ggrandi5ement "nalysisL

1. 9xcluding impeachment, +ongress cannot reserve "or itsel" &"/* *9"& over anexecutive officer because as an executive function the 8resident has the exclusive power of removal over executive officials pursuant to "rt! '', sec! 1, cl! 1! >yers;:owsher!

. +ourt stri#es down a senatorial concurrence reuirement for the removal of

the 8ostmaster, a purely executive official, because the 8resident has theexclusive power of removal over nonHelected executive officials! >yers!

2. +ongress +"? reserve "or itsel" removal power /0 restrict the 8residents removal power over officials who exclusively serve the legislative function because suchremoval power does not increase +ongresss own powers at the expense of the9xecutive :ranch and thereby implicate separation of powers concerns! :owsher!

. +ongress retains removable power over the +omptroller @eneral whose dutiesare all in aid of the legislative process! :owsher!

-. +ongress may restrict the 8residents removal power over the head of the$ederal Trade +ommission, a principal officer whose powers are legislativeand judicial in nature! umphreys!

K0estriction "nalysisL

3. +ongress may restrict the 8residents removal power of an executive officer providedthe restrictions do not impede 3the 8residents ability to perform his constitutionalduty!4 >orrison! This determination depends on the following factors6 (1) whetherthe 8resident retains su$stantial power to ensure faithful execution of the law by being able to supervise the official to assure that the counsel is competently performing his or her statutory responsibilities, and (2) the extent to which the need tocontrol the officer is central to the functioning of the 9xecutive! >orrison!

. (1) whether the 8resident retains substantial power to ensure faithful

execution of the law by being able to supervise the official to assure that thecounsel is competently performing his or her statutory responsibilities

i. 3@ood cause4 restrictions provide the 9xecutive with substantialability to ensure that the laws are 3faithfully executed!4 >orrison!

-. (2) the extent to which the need to control the officer is central to thefunctioning of the 9xecutive!

i. The greater the executive responsibilities of the officer the more li#elya court will find that there is a need to control the officer!

ii. whether the officer is an inferior or principal officer,1. The +ourt has never addressed a removal restriction on a

principal executive officer!

2. 't is li#ely that the +ourt would be reluctant to approve of sucha removal restriction because a principal executive officer ismore deeply involved in the 9xecutive :ranch than an inferiorofficer similar to the 'ndependent +ounsel in >orrison!

a. the special prosecutor in >orrison was an inferiorofficer since her office had liited jurisdiction andtenure, and she was not authori(ed to exercise policyaing or signi"icant adinistrative authority!

P!" 5?


52/108

iii. whether the officers functions are purely executive in nature,1. 3legislative power4

a. >a#es reports or investigations in aid of the legislative power,

b. i!e! $ederal Trade +ommission administering 3unfairmethods of competition!4 umphreys!

c. i!e! +omptroller @eneral gives +ongress informationabout federal money is being spent! :owsher!

2. 3judicial power4a. "djudicates matters in a court li#e setting!b. i!e! $ederal Trade +ommission authori5ation to act as a

master in chancery under rules prescribed by the court!umphreys!

3. 3executive power4a. 8rosecutorial duties are usually ta#en to be executive!

>orrison!b. "n official can have an executive function in

discharging its uasiHjudicial and uasiHlegislative powers, and not have executive power in the

constitutional sense! umphreys!4. 'mpeachment 8rocedure

. 3The &enate shall have the sole 8ower to try all 'mpeachments4 ("rt! ', - , clM)

-. The grounds for impeachment are limited to 3Treason, :ribery, or other high+rimes or >isdemeanors!4 "rt! '', - .!

%. Eistinction :etween 9xecutive "gencies and 'ndependent "gencies

+(""+("+) A!"+#$"' E;"#%)$" A!"+#$"'

/rgani5ed as commissions consisting of five or sevenmembers!

+ommissioners appointed by the 8resident andonfirmed by the &enate to serve set terms which expiret staggered intervalsterms that vary in length but

usually exceed the fourHyear term of the 8resident!

9xecutive agency administrators (or +abinet officers)are subject to dismissal at the pleasure of the 8resident!

The 8resident can designate who will be the chairpersonof independent agencies, with a few exceptions!

>embers of an independent commissions are reuiredby statute to be selected on a bipartisan basis! The8resident is restricted to naming only a majority of themembers from his own party!

?o bipartisan reuirement for appointment of executiveofficials!

&. +ase yers v! *nited &tates (1A2M) (senatorial concurrence removal restriction

struc# down because +ongress cannot restrict the 8residents power to removean officer whom the 8resident had appointed with &enates concurrence, ifthat officer, li#e the postmaster, exercised 3purely executive4 powers!)

i. $acts6 >yers involved a statute that provided postmasters were to beappointed and removed by the 8resident with the &enates concurrenceand that, unless removed, were to serve fourHyear terms! The 8resident

P!" 51


53/108

ordered the removal of >yers, without senatorial concurrence, beforehis term expired! >yers sued for bac# pay and lost!

ii. 'ssue6 The issue presented on appeal to the &upreme +ourt waswhether "rt! '' prevented +ongress from conditioning the 8residents power to remove executive officers!

iii. olding6 +ongress cannot condition the 8residents removal powerunless the conditions are solely directed towards matters committed by+ongress to the discretion of particular agency officials and 3uasiH

judicial4 matters! +oncerning these activities, the +ourt thought thatthe power of removal could be conditioned by +ongress only to theextent that removal was deferred until after the official made thedecision!

-. umphreys 9xecutor v! *nited &tates (1AN) (for cause removal restrictionupheld where principal officer exercised 3uasiHlegislative4 or 3uasiH judicial4 powers)

i. ;acts6 8resident 0oosevelt decided to remove umphrey, an $T+commissioner, before his sevenHyear term expired and disregarded thestatutory restriction on removal contained in the $T+ "ct which provided that 3any +ommissioner may be removed by the 8resident

for inefficiency, neglect of duty or malfeasance in

Administrative Law Outline - Uncategorized - 3_4

Documents

Transcript of Administrative Law Outline - Uncategorized - 3_4