ADMINISTRATIVE LAW OUTLINE

1. INTRODUCTION

a. Role and Structure of Agenciesi. What makes an agency independent?

1. Independent from the President (but not completely, as the heads are appointed)a. Independent b/c heads cannot be removed by the President, except for

cause2. Headed by a multi-member group

a. Not a single head agency – so it’s a commission of a group of people3. Terms of office4. Terms are staggered (don’t all expire at the same time)5. Political party affiliation limitation (only simple majority can be from one

political party)6. Budgets might not be controlled of the agency7. Independent litigation representation

ii. Everything an agency does is either rulemaking or adjudication1. Rule, resembles legislation (similar to subordinate legislation)2. Regulation, binding rule

b. Chief Executive’s Appointment Poweri. Appointment of Officers and Inferior Officers

1. Appointments Clause – Article 2, Section 2 a. The President shall nominate and appoint all officers of the US who

appointments are not otherwise provided for in the Constitution by law b. Congress may enact laws allowing the President, Heads of Departments,

or Courts of law to appoint inferior officers2. Congress and the President’s Appointment Power

a. Cannot appoint executive branch officers (principle or inferior) (Buckley v. Valeo)

b. Can place reasonable constraints on the President’s appointment powerc. Can condition the removal power if it doesn’t unduly interference with the

president’s power to faithfully execute the law (Morrison v. Olson)d. Cannot impose double for cause protection from President removal

(PCAOB)e. Don’t want Congress to have the power to create offices and the power to

fill them3. Buckley v. Valeo

a. Struck down a federal statute that authorized members of congress to appoint official to serve on the FEC – an agency that administered laws on campaign financing

b. Principle Officers i. Must be appointed by the president with the advice/consent of the

Senateii. Heads of all the executive department and members who head the

independent agencies (includes Art. III judges)c. Inferior Officers

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i. Congress may allow inferior officers to be appointed by the President, Heads of Departments, or Courts of Law (Freytag)

ii. “inferior officer” connotes a relationship with some higher ranking officer(s) below the President (Edmond v. US; PCAOB)

1. Whether he is an inferior is dependent upon whether he has superior

a. Is the work directed/supervised at some level by others who were appointed by presidential nomination w/ advice/consent of Senate?

d. Employees i. People who don’t exercise significant authority pursuant to the

laws of the USii. Don’t need to be hired pursuant to the Appointments clause

4. Morrison v. Olsona. Court upheld statute that allowed a special court to appoint an independent

counsel to investigate/prosecute possible violations of federal law by high ranking executive officials

b. Reasoning:i. Independent counsel = inferior officer and therefore could be

appointed by a Court of law1. Subject to removal by a higher executive branch officer

(Attorney General)2. Limited in jurisdiction (scope defined by the special court)3. Duties limited to investigation of certain federal crimes4. Position was temporary – once the task was over, job over

5. Edmond v. USa. Judges of the Coast Guard Court of Criminal Appeals = inferior officersb. The judges’ work is directed/supervised by principal officers

i. Subject to administrative supervision by the Judge Advocate General (who has the power to remove them w/out cause)

ii. Judges’ decisions are subject to review by the Ct. of Apps. For the Armed Forces

ii. Removal Power1. Presidential Removal Power

a. Myers v. USi. Court struck down a federal statute that required the President to

get Senate approval to remove the postmaster (purely executive officer)

ii. Holding: Congress cannot interfere with the President’s removal of an executive officer whom the President had appointed with the Senate’s advice/consent

iii. Purely executive officials may be removed at will by the Presidentiv. Congress cannot limit the President’s removal power over any

officer the President appointed1. Power to remove = incidental to the power to appoint2. President has the basic power to remove executive branch

officers to comply with “faithful execution of the laws” provision of the Constitution

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b. Humphrey’s Executor v. USi. Court upheld a federal statute restricting the President’s ability to

remove a member of the FTC who had been appointed by the President with the Senate’s advice/consent

1. Congress can condition the removal power as to officials w/ quasi-judicial/quasi-legislative responsibilities

2. Different than a purely executive officer like in Myersii. President could not remove FTC commissioner without good cause

1. Wasn’t a purely executive role – included both quasi-judicial/legislative powers

c. Morrison v. Olsoni. President cannot remove without good cause

1. Restriction on the Executive’s removal powerii. President’s removal powers cannot impede (unduly interfere with)

the President’s ability to faithfully execute the law1. “good cause” restriction does not “impermissibly

undermine” or impede the powers of the Executive branch d. Free Enterprise Fund v. PCAOB

i. because the Board is overseen by the SEC, whose members are also removable only for cause, the Act unconstitutionally interfered with the President’s authority to oversee the execution of federal law. 

ii. SEC cannot remove members of the Board without good cause, and the President cannot remove members of the SEC without good cause

1. It not only protects Board members from removal except for good cause, but withdraws from the President any decision on whether that good cause exists (unconstitutionally insulated from Presidential authority)

iii. Congress cannot impose double for cause protection from presidential removal

2. Legislative Removal Powera. All executive powers rest with executive officials – Congress cannot

appoint them and they cannot remove themi. The only way they can remove them is through impeachment

ii. Congress can restrict the President’s power to remove certain officers

b. Congress can remove officials who exclusively serve the legislative function

c. Bowsher v. Synari. Court struck down a federal law that gave budget-cutting authority

to the Comptroller General – who heads the GAO1. Budget-cutting authority conferred under the law was an

executive power2. The Comptroller was removable by Congress

ii. Challenged as a violation of the separation of powers because it gave Congress the power to remove an official having executive powers

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iii. Holding: violation of separation of powersiv. Reasoning: Congress cannot reserve for itself the power of

removal of an officer charged with the execution of laws except by impeachment.

1. To permit the execution of the laws to be vested in an officer answerable only to Congress would, in practical terms, reserve in Congress control over the execution of the laws.

2. DELEGATION OF POWER TO ADMINISTRATIVE AGENCIES

a. Delegation of Legislative/Rulemaking Power to Agenciesi. Question/Issue : To what extent can congress delegate its legislative powers to agencies?

1. The Constitutiona. Article 1, Section 8 – Congress shall enact all laws that are necessary and

proper to implement its other functionii. Field v. Clark to the New Deal

1. Since 1933, rare for the SC to overturn statutes as invalid delegations of legislative power to agencies

2. Marshall Field v. Clarka. Court upheld delegation to the President

i. (statute empowered President to raise tariffs and suspend trade w/ foreign countries)

ii. Responsibility/decisions generally made by Congressb. Reasoning:

i. President didn’t make the law/statute – Congress didii. President was merely executing the act

3. Panama Refining Co v. Ryana. Court invalidated the a provision in an act that authorized the President to

ban interstate shipments of oil produced in violation of state lawi. Congress declared no intelligible principle

1. No policy, established no standards – failed to provide for what the limitations of the delegation were

4. Schechter Casea. Court struck down a provision of the NIRA that authorized the President

to approve “codes of fair competition” for the poultry industryi. Invalid because there was a lack of any procedure for adopting the

codes, no standards were setii. Again – lacked limitations to the delegation, broad scope, lack of

safeguards5. So long as Congress provides sufficient standards, broad delegations of legislative

power are acceptablea. Hard substantive decisions need to be made by Congress – Agencies

should just fill in the blanksiii. New Deal to the present

1. Delegations do not violate the doctrine as long as Congress articulates an “intelligible principle” for the agency or official to follow

a. May be as general as one that directs the agency or official to regulate in the public interest

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2. Debate about reviving the non-delegation doctrinea. Industrial Union Dept. AFL-CIO v. American Petroleum Institute

i. Rehnquist’s concurring opinion:1. Three rationales for the application of the non-delegation

doctrine:a. (1) Ensure Congress makes social policy, not

agenciesi. delegation should only be used when the

policy is highly technical or the ground too large to be covered

b. (2) Agencies of the delegated authority require an “intelligible principle” to exercise discretion

c. (3) The intelligible principle must provide judges with a measuring stick for judicial review

b. Whitman v. American Trucking Ass’n, Inci. Provision in the Clean Water Act that authorized the EPA to

promulgate regulations establishing air quality standards1. Standard to be set at levels “requisite to protect the public

health”ii. Court held: not a violation of the delegation doctrine

1. When Congress confers decision-making authority upon agencies, Congress must “lay down by legislative act an intelligible principle to which the person or body authorized to [act] is directed to conform”

iii. Agency cannot cure unlawful delegation by adopting in its discretion a limiting construction of the statute

1. The agency can’t make the delegation lawful by declining to exercise some of that power

2. Voluntary self-denial has no bearing on the decision re: lawful/unlawful delegation

iv. Non-delegation doctrine1. Congress’ power to delegate is authority is limited

a. Separation of powers argumenti. Constitution assigned all legislative power to the legislature

1. Congress therefore can’t transfer any part of that power to the administrative agencies

b. Checks and balances argumenti. Legislature must impose adequate limits on the discretion of

delegation the agencies can exercise2. Thygesen v. Callahan

a. Court uses "intelligible standards" testb. Intelligible standard = legislative delegation is valid if it sufficiently

identifies:i. "(1) the persons and activities potentially subject to regulations;

ii. (2) the harm sought to be prevented; andiii. (3) the general means intended to be available to the administrator

to prevent the identified harm."c. Legislature had failed to:

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i. Provide standards to guide D’s discretionii. Failed to communicate to D the harm it intended to prevent

d. Court found – unlawful delegation of power3. Problem 390

b. Delegation of Adjudicatory Power to Agenciesi. Ultimate Question:

1. Whether the delegation impairs either:a. The individual’s interest in having a claim adjudicated by an impartial Art.

III judge ORb. The structural interest in having an independent judicial branch decide

matters that have traditionally fallen within the core of Article III businessii. Article III

1. Federal judicial power vested in Article III judges (life tenure, protection against salary reduction)

a. Ensures unbiased considerationb. Ensures that other branches can’t deprive the judiciary of its essential

functions2. NOTE: Transfers to the agency authority that appears to belong to the judicial

branchiii. How can Congress transfer adjudicatory power from Article III judges to Article I

judges?1. Private v. Public Right

a. Northern Pipelinei. Invalidation of a statute that assigned the trial of all the issues

(including contract issues – PRIVATE RIGHTS) in a bankruptcy case to bankruptcy judges

1. Bankruptcy judges are Article I judges not Article III judges

2. Private rights = decided by Article III judgesii. Holding: Congress may not vest in a non-Article III court the

power to adjudicate, render final judgment, and issue binding orders in a traditional contract action arising under state law

b. Crowell v. Bensoni. Statute empowered administrative agency to conduct adjudications

1. Federal worker’s comp statute that provided benefits based on strict liability if an employee was injured while working on navigable waters

2. Involved “public rights” – dispute between private person and the government

a. Also involved “private rights”i. Tort liability of employer to employee

ii. Court upheld the agency adjudication b/c public rightiii. Also found that, because “private rights” are at issue, Article III

judges had to have independent power to decide all issues of law and jurisdictional fact on review of the agency’s decision

iv. Commodity Futures Trading Comm’n v. Schor

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1. Whether Congress could allow the Commission to adjudicate compulsory counterclaims by brokers, which arose under state contract law (similar to Northern Pipeline cases)

2. Balancing test for determining permissible delegation of adjudicatory power to an Article 1 court

a. extent to which the essential attributes of judicial power are reserved to Article III courts

b. extent to which the Article I forum exercises the range of jurisdiction and power normally vested in Article III

c. origins and importance of the right to be adjudicated d. the concerns that drove Congress to depart from the requirements of

Article III3. Court held:

a. Commission COULD adjudicate the counterclaims without violating Article III

i. The statute allowing the Commission to adjudicate compulsory state-law counterclaims did not impermissibly intrude on the judiciary

1. The class of counterclaims was small2. Decisions were subject to judicial review3. Decision whether to allow the agency to adjudicate a claim

was left to the parties4. Was efficient for the agency to hear the compulsory

counterclaims (given the close connection b/n them and claims that the agency had unquestioned authority to adjudicate)

v. Problem 406

3. SUBSTANTIVE STATUTORY CHECKS ON AGENCIES

a. Statutory Interpretation and Judicial Deferencei. Approaches a court might take when reviewing statutory interpretation

1. No deference to the agency2. Strong deference to the agency3. Weak deference to the agency

a. In reviewing the legal meaning of a statute, the court can substitute its judgment for the agency but is also expected under some circumstances to give weight to the agency’s position

ii. Marbury v. Madisoniii. Connecticut State Medical Society v. Connecticut Board of Examiners to Podiatry

1. Weak deference2. Board issued a declaration ruling that the ankle is part of the foot3. Court found – no special deference should be given to the Board’s definition

a. Question at issue was purely legal and required legislative intent be determined

b. Construction and interpretation of a statute = question of law where administrative decision has no special deference

i. Particularly where the statute hasn’t been subjected to judicial scrutiny or time-tested agency interpretations

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iv. Cheveron USA v. Natural Resources Defense Council1. Strong deference given to the agency2. Two-part test:

a. (1) Whether the statute has a clear meaningi. If meaning and intent are clear, that is the end of the matter

1. Effect must be unambiguously given to the expressed intent of Congress

ii. If agency’s interpretation conflicts with the clear meaning of the statute, then it’s invalid

iii. If the statute is ambiguous, then the court moves to step #2b. (2) Whether the agency’s interpretation is reasonable (permissive

construction)3. Does not apply to non-legislative rules or informal adjudication

4. THE GENERAL LAW OF AGENCY PROCEDURES

a. Adjudication – Rulemaking Distinctioni. Adjudication

1. Government action that affects identifiable persons on the basis of facts peculiar to each of them (adjudicative facts)

a. Ex: tax increase for individuals storeowners based on different factorsb. Londoner v. Denver

i. Special assessment for paving streets was apportioned among property owners in the district

ii. Landowners were never afforded an opportunity to be heard – violation of due process

2. Procedural due process appliesa. Individual hearings are required if one can show an individual

liberty/property interest at issuei. Right to support one’s allegations by argument however brief –

and by proof, however informal3. Formal Adjudication

a. Adjudication conducted under Sections 554, 556, and 557b. Formal, trial-type adjudication that bears similarity to trial in court

4. Informal Adjudicationii. Rulemaking

1. Government action directed in a uniform way against a class of personsa. Policy decision not based on individual circumstances (legislative facts)

i. Ex: tax increase to everyone in Denverii. Bi-Metallic Investment v. State Bd. Of Equalization

1. Whether all individuals have a constitutional right to be heard before a matter can be decided in which all are equally concerned

2. Impracticable – best way to do it is through the vote not a hearing

2. Procedural due process does NOT applya. No individual hearing are required

iii. Problem 66iv. Anaconda Co. v. Ruckelshaus

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b. Procedural Due Process – Right to a Hearingi. Hearing and Welfare Termination

1. Goldberg v. Kellya. ISSUE: what sort of appeal procedure a state should provide when the

recipient disagrees with the welfare department’s decision to terminate benefits

b. The rights to a continued flow of welfare benefits is an interest which is protected by procedural due process

i. To have a property interest in a benefit, a person must have a legitimate claim of entitlement to it and not just an abstract need/desire for it

c. The demands of procedural due process are flexible and contextual rather than rigid and non-contextual

d. Due process requires a hearing before benefits are terminatedi. This strict per se rule was later modified in Matthews v. Eldridge

ii. Substantive Triggers of Procedural Due Process Protection – liberty/property interests1. In order for the procedural requirements of due process to be triggered there must

be the following:a. Adjudicative facts at issueb. Liberty or property interest at issue

i. Property Interest: [legitimate claim of entitlement to….]1. Tangible objects (real estate, money, etc…)2. Government entitlements (public employment, education,

welfare, public housing)ii. Liberty Interest:

1. Freedom from Confinement, infliction of pain, revocation of parole, to marry, religion

2. Hardships3. Stigmas (reputation)

2. Board of Regents v. Rotha. Teacher was no re-hired after his one year employment contract expired

i. Property?1. No, not entitled to employment beyond one year

ii. Liberty?1. No, but might have been if he was stigmatized

3. Cleveland Bd. Of Education v. Loudermilla. Once an entitlement has been created, it cannot be removed without an

appropriate hearingb. Property right in their employment – could be discharged only for cause

4. Bishop v. Wooda. Tenure or termination for cause are property interestsb. At will employment does not constitute a property interest

5. Problem 426. Prisoners Liberty Interest

a. Hewitt v. Helmsi. Limited liberty interest – hearing required only if prison

regulations provided an entitlement b. Sandin v. Connor

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i. Liberty deprivation if the decision inevitably lengthens the term of imprisonment or imposes “atypical” and significant hardship on the inmate in relation to the ordinary incidents of prison life

1. Examples: transfer to a mental hospital (vitek v. jones), involuntary administration of psychotropic drugs (Washington v. Harper), transfer to an extremely harsh supermax prison (Wilkinson v. Austin)

7. Who can assert a property/liberty claim?a. Obannan v. Town home nursing center

i. Nursing home, certified by the state – decided to de-certify the facility

1. Owners have a property interest, right to a hearing2. BUT – what about the residents of the nursing home?

a. USSC said – nopei. They didn’t have a liberty/property interest

ii. Statute didn’t give them a right to stay in the nursing home (of their choice)

iii. Indirect interest in the closing of the home (incidental impact)

iv. Liberty interest – the trauma of having to move was not enough to equate to an infringement

iii. Timing of Trial – Type hearings and the extent to which such hearings are due1. Mathews v. Elridge

a. Balancing test that determines when and what kind of process is due:i. Timing

1. Pre-termination (Goldberg) v. Post-termination (Mathews)b. Three part balancing test that determines the timing of constitutionally

required hearing as well as the type of hearing requiredi. The private interest that will be affected by the official action

1. How much reliance on the interest (See Goldberg – welfare)

ii. How probable is an increase in accurate decision-making with the addition of the additional safeguard?

1. i.e. The risk of erroneous deprivation of such interest through the procedures used and the probable value of additional/substitute procedural safeguards

iii. The government’s interest1. Function involved2. Fiscal and administrative burden that the

additional/substitute procedural requirement would entail2. Ingraham v. Wright

a. Whether students subject to corporal punishment were entitled to a pre-disciplinary hearing

b. Court said – NOi. There is a liberty interest at issue (paddling = infliction of harm),

however, traditional common-law remedies were adequate to afford due process

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3. Problem 61c. Core Statutory Principles of Administrative Procedure

ADJUDICATIONi. Administrative adjudication

1. Statutory rights to an adjudicatory hearinga. Federal Law

i. APA doesn’t require formal adjudicative hearings – it DOES lay out guidelines for conducting them (Sections 556, 557)

1. Must separate prosecuting and adjudicating functions2. Must allow cross-examination at the hearing as may be

required for a full and true disclosure of the facts3. Private party wins – entitled to attorney’s fees4. Hearing must be conducted by an ALJ5. Decisions must be based only on info contained in the

recordii. Formal Adjudicative hearings not required UNLESS an external

source requires the hearing to be “on the record” (another statute, constitution)

1. Must be an external source (statute, constitution) that triggers the APA’s adjudicatory provisions

2. If no external source requires an evidentiary hearing, agency can choose its own dispute resolution – this is called informal adjudication

iii. What happens if Congress merely calls for a “hearing” or a “public hearing” without using the words “on the record?”

1. Dominion Energy Brayton Point, LLC v. Johnsona. EPA refused to conduct a formal APA adjudicatory

hearingi. Statute said, “must offer an opportunity for

public hearing” – at issue is the interpretation of “public hearing”

b. Court deferred to EPA interpretation of “public hearing”

i. Cheveron deference – statute was unclear, so deferred to agency interpretation

b. State Lawi. Most state APAs also require a statute to trigger the state APA

formal procedures1. If the proceeding meets the definition of “contested case” –

formal procedures applya. Contested case – a proceeding in which the legal

rights, duties, or privileges or a party are required by law (statute) to be determined by an agency

b. Alternative definition (compromise b/n 1961 and 1981 MSAPA approaches) of “contested case”

i. Includes any agency discretionary decision to suspend/revoke a right/privilege or to

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refuse to renew or issue a license, regardless of whether any other law requires a hearing

ii. Greenwood Manor v. Iowa Dep’t of Public Health1. Statute required the health Council to provide a “public

hearing” when it received an application at which all affected parties have an opportunity to present testimony

a. Greenwood manor applied for certificate to open an Alzheimer’s care unit, granted, competitors appealed claiming they were entitled to a “contested case” hearing

2. Court found:a. Evaluation of an application for a certificate of need

by the Council didn’t implicate the contested case procedures

b. Administrative rules explicitly state that public hearings do not constitute contested cases (interpretation was given deference by the court)

iii. Metsch v. University of Florida1. student appeals the order of a law school denying his

admission – claimed he was owed an administrative hearing because his substantial interests had been determined by the University which was a state agency

2. Court found – not entitled to a hearinga. Substantial interest

i. Will suffer injury in factii. Substantial injury is of a type/nature which

the proceeding is designed to protectb. Beyond wanting to study law at that school, no

substantial interestiv. Problem 83

2. Limiting the Issues to which hearing rights applya. Whether the agency must provide an adjudicatory hearing prescribed by

statute if the agency has already addressed the disputed issue in a ruleb. By rulemaking

i. Generally – agency need not provide an adjudicatory hearing prescribed by statute on an issue if they have already addressed that issue in a rule

1. Agency may issue guidelines to resolve broad classes of issues

a. Heckler v. Campbelli. Whether the Secretary of an agency may

rely on published medical-vocational guidelines to determine a claimant’s right to Social Security disability benefits

ii. Court Found: reliance on the guidelines was not in conflict w/ the statute

iii. Secretary had to determine an issue not unique to each claimant – general factual

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issue may be resolved as fairly through rulemaking as by introducing the testimony of experts at each disability hearing

iv. To require the secretary to re-litigate the existence of jobs in the national economy at each hearing would hinder needlessly an already overburdened agency

ii. Agencies may use rulemaking to resolve certain classes of issues that do not require case-by-case determination

1. Even if a statutory scheme requires individualized determinations, the decision-maker has the authority to rely on rulemaking UNLESS congress clearly expresses an intent to withhold that authority

c. Waiver i. Agencies can include a waiver provision in the rule that gives

affected persons the ability to seek a waiver for the rule if they can show adequate reasons to justify one

d. No material issue of fact (summary judgment)i. An agency can deny a hearing otherwise required by statute when

there are no disputed issues of material fact3. The Conflict b/n institutional and judicialized decision-making

a. Judicial Model i. Agency’s adjudicative decision = judge’s decision and the process

should resemble judicial process as closely as possibleb. Institutional Model

i. Agency is a single unit with the mission of implementing a regulatory scheme – the decision-making should be whatever is efficient and effective for the agency

c. Personal responsibility of the decision-makers i. The Morgan Cases

1. Morgan Ia. “he who decides must hear”b. Administrator who takes responsibility for a

decision must personally have heard the casei. Advocates for the judicial model

ii. Examiner may sift/analyze the evidence, but it must be presented to the Secretary/decision-maker before the decision is made

c. Agencies can get around Morgan I by delegating the power to decide

i. Judicial officers who stand in the shoes of the Secretary

ii. Intermediate review board (agency head has discretion to consider appeals from the board)

2. Morgan II

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a. Formal adjudication due process requires an intermediate report be prepared by the hearer of the evidence to focus the issues for the benefit of both the parties and the ultimate decision-maker

i. Report must be made available to both parties

ii. Must be given an opportunity to object to it before a final decision is made

3. Morgan IVa. Inquiry into the mental process of the decision-

maker as to how he made his decision must be avoided absent a strong showing of bad faith or improper behavior

b. If an agency fails to explain its decision:i. Overton Park Case – the court should

remand the case to the agency for them to provide an explanation

ii. Applies only when there is no explanationii. Problem 98

d. Ex Parte Contacts I. Two different types of problems:

1. Improper communication comes from OUTSIDE the agency (ex parte)

A. See APA Section 557(d) – p. 715 of casebookI. Communication (oral or written)

II. Between interested parties (outside the agency) – any individual with an interest in the agency proceeding that is greater than the general interest the public as a whole may have

III. Relevant to the merits of the proceedingIV. Not on the public recordV. No prior notice to all parties

2. Improper communication from INSIDE the agency (separation of functions)

ii. Professional Air Traffic Controllers org. v Federal Labor Relations Authority

1. Facts of the casea. 2 FLRA members were contacted during the

penalty phase of the caseb. Ct. of Appeals ordered special fact-finding review

to find out what happenedc. What were the contacts at issue?

i. Secretary of Transportation phoned Frazierii. Not a violation….parties discussed

procedure not meritsd. Albert Shanker (head of American Federation of

Teachers union) met Applewhaite (an ALJ)

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i. Shanker was an interested personii. Discussed the merits in the last 15 minutes

of their dinneriii. However, STILL not a violation because it

didn’t have an effect on the decision (there was no harm)

2. Remedies of ex parte communication (section 557)a. Disclosureb. Require the violating party to show cause why his

claim or interest in the proceeding should not be dismissed/denied/disregarded/adversely affected because of the improper communication

e. Agency Adjudication and legislative pressure i. Congressional interference violates due process

ii. Pillsbury Co. v. Federal Trade Commission1. Pillsbury claimed:

a. Deprived of due process by reason of improper interference by Congressional committees with the decisional process of FTC

2. Inappropriate for Congress to try and influence a pending administrative adjudication

a. When such a congressional “investigation focuses directly and substantially upon the mental decisional processes of a Commissioner in a case which is pending before it, Congress is no longer intervening in the agency’s legislative function, but rather, in its judicial function”

f. Separation of Functions Doctrine and Internal Agency communications i. Application only to formal adjudication

1. These rules do not apply to (1) rulemaking, either informal or formal, (2) informal adjudication, (3) initial licensing, or (4) most ratemaking.

ii. Issue: whether a single individual within the agency can play an adversary role in a particular case (investigator/prosecutor) and then serve an adjudicatory role (ALJ, agency head) in the SAME case

iii. Why do we have separation of function rules? 1. Due Process issues, problems with conflict of interest

a. Constitutional due process if at issue is property or liberty interest

2. Solution = separating the functions (provides safeguards)iv. APA Section 554(d)

1. 554(d)(1) – ALJ non-consultation rulea. Cannot have the same person in both adversary and

adjudicative rolesb. Prohibits hearing officers (ALJs) from consulting a

person/party on a fact at issue absent noticei. Relates only to information input

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ii. Doesn’t include seeking assistance from uninvolved agency persons in evaluating what is already in the record

c. Hearing officers cannot be responsible to or supervised by anyone engaged in performing investigative/prosecutive functions

d. Cannot serve as an advocate and decisionmakere. Agency heads can participate in all facets of the

casei. Can initial a complaint

ii. Can decide the case later oniii. Can supervise staff during all phases of the

caseiv. General Counsel to report to Headv. Investigating off can report to Head

vi. ALJ’s can report to Headf. CANNOT allow prosecutors/investigators to talk to

the Head ABOUT a casev. Principle of necessity

1. Biased/otherwise disqualified judge can decide a case if there is no legally possible substitute decision-maker

vi. Categories of agency employees1. Decision-making personnel

a. ALJs, intermediate board members, agency heads2. Adversaries

a. Investigators/prosecutors involved in the casevii. Rules of Interaction

1. Adversaries cannot provide off-record advice to decision-making personnel

2. Decision-making personnel can advise or consult with individuals on the same level

viii. Dep’t of Alcoholic Beverage Control v. Alcoholic Control Appeals Board

1. One adversary should not be permitted to bend the ear of the ultimate decision-maker or the decision-makers advisors in private

ix. Withrow v. Larkin1. A physician in the State of Wisconsin challenged the

Wisconsin statutes which authorized the State’s Examining Board (Board) to investigate physicians and temporarily suspend their license. 

2. Rule of Law. Vesting the authority to investigate and adjudicate in the same agency does not violate due process. 

g. Bias – Personal interest, prejudgment, personal animus i. Adjudicator disqualified if :

1. tainted by animus (prejudice/hostility)2. prejudgment on the issues

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3. personal stake in the decisionii. Cinderella Career and Finishing schools, inc. v. Federal trade

commission1. Test for disqualification

a. Whether a disinterested observer may conclude that the agency has in some measure adjudged the fats as well as the law of a particular case in advance of hearing it

iii. Problem 128

ADMINISTRATIVE PROCEDURE OF ADJUDICATION4. The Processes of Administrative Adjudication (Admin Procedure)

a. Pre-hearing phase – notice, investigation, discoveryi. Notice

1. Block v. Ambacka. While administrative complaints need not meet the

specificity requirement of criminal law, they must provide sufficient detail to apprise the party of the charges against him and allow him to adequately prepare for a hearing

b. Charges should be reasonably specific in light of the relevant circumstances

ii. Investigation and Discovery1. Agency needs statutory basis other than the APA to compel

the production of information (not an inherent power)2. Subpoenas

a. Subpoena power is limited – agencies cannot enforce their own subpoenas, must go to court

b. Craib v. Bulmashi. No Fourth Amendment “privacy” claim can

be asserted against an administrative subpoena limited to the production of records which the subpoenaed party is required to maintain – for the express purpose of agency inspection

3. 4th and 5th Amendment protections applya. Agencies can grant immunity from federal charges

to compel testimonyb. Attorney-client, marital privileges remain

iii. Problem 154b. Alternative Dispute Resolution in adjudication

i. Three classifications1. Negotiation – litigants/lawyers work out the problem w/out

assistance of third parties2. Mediation – third party mediator helps the litigants work

out the problem – cannot impose a solution3. Arbitration – third party arbitrator has authority to impose a

solution

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c. Hearing Phasei. Evidence

1. Any oral or documentary evidence may be receiveda. Should provide for exclusion of irrelevant,

repetitive, immaterial evidenceb. No preclusion of hearsay

2. Reguero v. teacher standards and practices commissiona. Decisions must be based on substantial evidence b. Hearsay can be admitted in administrative cases

ii. Official Notice1. Circu v. Gonzales

a. Agency adjudicators can take official notice of disputable and indisputable facts

i. Must furnish notice to the opposing party who must have an opportunity to rebut the noticed fact before the decision is rendered

d. The Decision Phasei. Decision-maker is required to state their findings of fact and

reasons for the decision1. When the opinion is not accompanied by the necessary

finding of fact, the remedy is to remand2. Post-hoc rationalizations are not permitted – reasons must

be given at the time of the decisionii. Ship Creek Hydraulic Syndicate v. State

1. If a statute requires reasoned decision – and the legislature has not expressly or by implication limited judicial authority to decide how to review administrative action – court may and should require agencies to explain their decisions

iii. Problem 177e. The Effect of Decisions

i. Res Judicata (claim preclusion)1. A valid and final judgment that is conclusive of a claim

a. If judgment for P, claim is extinguished and merged into the judgment

b. If the judgment is for the D, P is barred from asserting the claim

ii. Collateral Estoppel (issue preclusion)1. Bars subsequent lawsuit where:

a. Issue decided in a prior action is identical to one presented in a later action

b. Prior action resulted in a final judgment on the merits

c. Party against whom collateral estoppels is asserted was a party to the prior action or is in privity with a party to the prior action

d. The party against whom collateral estoppels is asserted had full and fair opportunity to litigate the

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issue in the prior action (JS v. Bethlehem School District)

2. Offensive Mutual Collateral Estoppel a. P seeks to bar D from re-litigating an issue the D

has previously litigated unsuccessfully in another action against the same party

3. Offensive Non-mutual Collateral Estoppel a. P seeks to bar D from re-litigating an issue the D

has previously litigated unsuccessful in another action against a different party

4. Defensive Mutual Collateral Estoppel a. D seeks to bar P from re-litigating an issue the P

has previously litigated unsuccessfully in another action against the same party

5. Defensive Non-mutual Collateral Estoppel a. D seeks to bar P from re-litigating an issue the P

has previously litigated unsuccessfully in another action against a different D

iii. Preclusion against the government - Can the government be precluded from litigating? (re-arguing the same legal issues against the same parties)

1. US v. Stauffera. Federal government could be barred from re-

litigating a legal issue it had lost in an action involving the same party – even if the subsequent action is brought in another district

b. But not against a different party (see Mendoza below)

2. US v. Mendozaa. Non-mutual collateral estoppel is not applicable

against the USb. Government should be allowed to re-litigate the

issue – in hopes of creating a conflict b/n the circuits – so that the issue might percolate to the Supreme Court

c. US shouldn’t be forced to appeal every case it loses in a trial court to guard against preclusion in later litigation

3. Does this mean the govt can lose a case in the circuit and still re-litigate the same issue against different parties in the same circuit?

a. No – same issue = same result because of precedentb. Could re-litigate if same issue, same parties,

different circuit or same issue, different parties, different circuit

c. Intra- circuit Non-Acquiescence i. Government may NOT re-litigate an issue –

despite having lost an appeallate decision on

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the identical point in the same circuit against a different party

d. Inter- circuit Non-Acquiescence i. Government is allowed to try to identical

issue in another circuit against another party4. What if the person wins in civil case, then the govt

prosecutes you in a criminal matter:a. Paine court says government NOT precluded even

though D had won civil case under the same factsiv. Problem 182

f. Consistency of Decisions and Stare Decsisi. Stare Decisis

1. Courts generally follow their own precedents and lower courts must adhere to precedents established by higher courts

2. Assures a reasonable degree of consistency and predictability in the law

ii. UAW v. NLRB1. Agencies can change course through rule-making as well as

case-by-case adjudicationa. Changes must be made w/ an explanation

2. Not bound by stare decisis but must still provide explanation

3. No specific requirement in the APA BUT you can infer it from the APA

4. Includes independent agencies and executive agenciesg. Equitable Estoppel

i. Government cannot be held liable when one of its agents gives bad advice

ii. Footies Dixie Dandy v. McHenry1. Four Elements of Estoppel

a. Party to be stopped must know the factsb. Must intend that his conduct shall be acted on or

must so act that the party asserting the estoppels had a right to believe it is so intended

c. Latter must be ignorant of the true facts andd. Must rely on the former’s conduct to his injury

2. Note: SC has never accepted an estoppel claim and has rejected them on a number of occasions

iii. Office of Personnel management v. Richmond1. Advice he received was erroneous (that he could work

overtime and not affect his disability pay)2. Court also said that it’s unlikely to uphold a claim for

estoppels against the government but did not slam the doorh. Administrative Judges and Decisional Independence

i. What makes an ALJ independent?1. Can only be removed for cause (for cause protection)

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2. Salaries are set by statute and OPM regulations (based on senority)

3. Cannot be supervised by a prosecutor or investigator (separation of functions)

4. Process of hiring through the OPM (office of personnel management)

a. Standards requiredi. Must be lawyer for 7 years

ii. Application processiii. Submit information as to their careeriv. Interviewed by a panelv. References Evaluation

vi. Get a score (0-100)vii. Over 80 points = getting on the register

viii. 5 – 10 points preference for veteransb. When there’s a vacancy, the agency calls and then

the OPM gives them names off the registry (choice among 3)

5. Cannot be assigned other jobs within the agency6. No performance evaluations7. Assigned cases by rotation8. Subject to the management of their agency

ii. Article III Judges1. Life tenure2. Specialized3. Subject to review by agency heads (who are politically

appointed)4. Must follow agency policies

RULEMAKINGii. Administrative Rulemaking

1. The definition of “Rule”a. Statements of future effect designed to implement, interpret, or prescribe

law or policy as opposed to orders, which generally concern past events and have retroactive effect

i. There is always a presumption that statutes and rules do not apply retroactively and an agency may not, as a general matter, issue retroactive legislative rules unless Congress expressly authorizes retroactivity

ii. General or particular applicabilityiii. Must be published at least once

b. Can a rule have retroactive effect?i. Bowen v. Gtown University Hospital

1. Agency failed to go through notice and comment2. Goes through the notice and comment and as part of the

new rule, tries to apply it to the years that were lost (because it had to go back through notice and comment)

3. Supreme Court says: the Rule is NOT retroactive, cannot go back and apply a rule retroactively

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a. Provides too much incentive on avoiding notice and comment

b. “not favored in the law”4. Decision based on literal APA reading of “rule”

a. Also includes interpretative rules (which are permitted to have some kind of retroactive effect) – Scalia

5. Example of constitutional retroactive rule: a. Rule that creates future taxation of trust income

would affect the future but also the past action of setting up the trust

c. Informal rulemaking (“notice and comment rulemaking”)i. § 553 establishes the minimum requirements

ii. Publication of NPRM, opportunity for written comment, publication of final rule, 30 wait period before the rule goes into effect

iii. Agency floor (cannot go below, but can do more)d. Legislative rules

i. Rules issued by an agency pursuant to an express or implied grant of authority to issue rules or statements of policy with the binding force of law

ii. Once it has gone through notice and comment and is published in the FR in final form, a rule has legal effect and is binding

e. Non-legislative rules (“interpretive rules” or “policy statements”)i. Do not go through notice and comment (APA section 553(b)(A))

ii. Do not have the force of law because they are not based upon any delegated authority to issue such rules

iii. Can be made effective immediately upon publication in the Register (553(d)(2))

2. Initiating Rulemaking Proceedingsa. Informal Rulemaking – Notice and Comment - APA Section 553 –

i. Notice of Proposed Rulemaking (NPRM) – the rule shall state: 1. Time, place, nature of the proposed rule2. Reference the legal authority under which the rule is

proposed3. Terms or substance of the proposed rule or a description of

the subjects and issues involveda. Publication of the full text of the proposed rule is

not required but it is rare that the full text is not published at this stage

b. Technical studies and data employed in reaching the decision to propose the rule should be made available at the time of issuance

i. Usually the agency places these types of disclosures in a publicly available file called the “rulemaking record” where people can examine them

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4. Publication in the Federal Register = constructive/legal notice

a. UNLESS – the persons subject to the rule are served and actual notice is given

ii. Adequacy of Notice 1. Portland Cement Ass’n v. Ruckelshaus

a. In order that rule-making proceeding to determine standards be conducted in orderly fashion, information should generally be disclosed as to the basis of a proposed rule at the time of issuance

2. Connecticut Light and Power Co. v. NRCa. NRC failed to disclose technical studies about fire

prevention in nuclear power plantsb. If the notice of proposed rulemaking fails to provide

an accurate picture of the reasoning that has led the agency to the proposed rule, interested parties will not be able to comment meaningfully upon the agency’s proposal

iii. Comment period 1. Interested persons given the opportunity to comment

a. Anyone who is interested enough to comment (could be anyone)

iv. Final rule w/ preamble 1. Must be published in the Federal Register (APA section

552)2. Must be accompanied by a concise statement of basis of

purposev. Can the final rule differ from the proposed rule?

1. Logical outgrowth testa. Notice is adequate if the changes are in character

with the original scheme and the final rule is a logical outgrowth of the notice and comments already given

2. Chocolate Mfrs. Ass’n v. Blocka. After providing notice and receiving comments, the

WIC changed the rule to delete flavored milk from the list of approved supplemental food

b. Logical outgrowth testi. If the final rule materially alters the issues

involved in the rulemaking – or departs from the terms or substance of the proposed rule then notice is inadequate

b. Formal Rulemaking – APA section 556 & 557i. Trial-type procedure governed by sections 556, 557 of the APA

1. Right to present evidence, cross-examine witnesses, and submit rebuttal evidence

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2. Formal rulemaking provisions only apply when rules are required by statute to be made on the record after opportunity for an agency hearing

3. Record made before the agency is the exclusive basis for agency action

4. Ex parte communications prohibited by section 557(d) 5. Separation of functions provisions of 554(d) are

inapplicablec. Problem 221

3. Public Participationa. Informal rulemaking (section 553)

i. Notice and Comment process in section 5531. See notes above

ii. Agency is free to limit public participation to written submissions unless the agency determines otherwise or the law requires more

b. Formal rulemaking (section 556 – 557)i. Must identify the circumstances in which formal rulemaking

applies1. “when rules are required by statute to be made on the

record after opportunity for an agency hearing, sections 556 and 557 of title” are applicable

ii. US v. Florida East Coast Ry. Co.1. Congress directed an increase in railroad rental cars be

made, in adopting the rules to implement the mandate, ICC refused to grant protesting railroads a trial-type hearing

2. Holding/Rule:a. When a statute authorizes rulemaking of general

applicability, it does not require an agency to go beyond the informal procedures of section 553 UNLESS the statute explicitly provides that the rule be made after a hearing on the record – or similar language

i. Strong presumption against the invocation of APA formal rulemaking

iii. Problem 229c. Hybrid Rulemaking and the limits on judicial supervision of agency

proceduresi. Special Statutory Provisions

1. Instruct agencies to make rules using procedures that are more elaborate than the APA informal rulemaking

ii. Limits to Procedural Requirements1. Vermont Yankee Nuclear power corp v. natural resources

defense councila. Atomic Energy Commission (AEC) conducted

rulemaking proceeding to determine how the nuclear waste storage issue should be resolved in each licensing proceeding – objective – to avoid religiating every single license application

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b. AEC came up with a rule – only support of the reasoning for the rule was a 20 page report by a doctor on AEC staff

i. NRDC and others wanted to cross-examine the doc and the AEC refused to let them

a. Court says : courts cannot add additional requirements over and above what is required by the APA or other statutes

b. Reasoning for the decision:i. If court does engage in this behavior, the

agency doesn’t know if they’re using the right procedure until the Court rules on it

2. Agencies are free to grand additional procedural rights above and beyond the APA requirements (which are a floor, not a ceiling)

a. Vermont Yankee says: courts are generally not free to impose additional procedural rights on agencies

4. Procedural regularity in rulemakinga. Role of agency heads

i. Morgan I 1. He who hears must decide – less applicable in rulemaking 2. Normal for subordinates to make the decisions and then

brief heads of the officea. Agency head need not read all of the written

submissions, transcripts, summariesb. However – agency head MUST understand their

contents so that an informed decision can be made3. Because of Morgan IV (below), Morgan I violations are

nearly impossible to proveii. Morgan IV

1. Cannot examine an agency head in court to ascertain whether he understood the record assembled during the rulemaking period

b. Ex parte communicationsi. Formal Rulemaking

1. Section 557(d) – forbids ex parte communicationsa. if they occur – contents must be disclosed to public

ii. Informal Rulemaking1. Not addressed in APA – developed in caselaw

iii. Home Box Office v. FCC1. Challenge to FCC rule that would have limited types of

programming and advertising that could appear on pay cable channels and subscription tv

2. Number of participants before the Commission sought out individual commissioners/commission employees for the purpose of discussing ex parte and in confidence the merits of the rules under review

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a. Commission even solicited communications in its notices of proposed rulemaking

3. HOLDING:a. Once a notice of proposed rulemaking has been

issued – any agency official or employee who is or may reasonably be expected to be involved in the decisional process of the rulemaking should refuse to discuss matters related to the proceeding with any interested private party

b. If it nonetheless occurs, any written document or a summary of the oral communication must be placed in the public file immediately after the communication so that interested parties can comment thereon

iv. Sierra Club v. Costle1. Limits the holding in Home Box Office

a. Congress may represent their constituents before agencies engaged in informal rulemaking so long as individual Congressmen don’t frustrate the intent of Congress

2. Ex parte contacts allowed throughout and only need to be disclosed if they are of central relevance to the rulemaking

v. Problem 254c. Bias or Political Influence in Rulemaking

i. Ass’n of National Advertisers, inc. v. FTC (ANA case)1. An agency member may be disqualified from such a

proceeding only where the is clear and convincing evidence that he has an unalterably closed mind on matters critical to the disposition of the rulemaking

a. Higher threshold of bias in rulemaking than adjudication

ii. Problem 262d. Findings and Reasons

i. Section 553 – requires a “concise general statement of … basis and purpose”

ii. National Ass’n of Independent Insurers v. Texas Dep’t of Insurance

1. Challenged the validity of two administrative rules – arguing that they were not adopted in compliance with the procedural requirements for rulemaking

2. Holding: the board failed to explain and failed to provide justified reasoning for the adoption of both rules and therefore failed to meet the procedural requirements

3. Statement of basis and purpose must accompany the final rule

a. Should reflect the factual, legal, and policy foundations for the action taken

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i. Every single item doesn’t need to be discussed

b. Must show the rule is reasonably supported by the material gathered, how conflicting interests were resolved and how that resolution led to the rule chosen

c. Should show that the distinctions drawn are reasonably supported by the record

iii. Does this violate Vermont Yankee? Is this adding something to the APA??

1. Argument that it does not violate Vermont Yankee?a. It’s not adding anything because the requirement is

already there, it’s just “construing” – statement of basis of purpose can be construing to have requirement

b. Arbitrary and capricious clause – how can the court analyze the rule without understanding the reasoning for the rule

iv. Bar to post hoc rationalization1. Judicial review only looks to the text of the rule and the

state of basis and purposea. Will not accept post hoc rationalization b. Consequence:

i. Means the agency is going to make sure to put everything in their preamble, which will lead to the ossification of rule-making

c. WHY?i. We don’t want agencies to do half-baked job

rule-making and then go to courtii. we need rules that ‘hold their feet to the

fire”5. Issuance and Publication

a. Publication requirementsi. Section 552(a)(1)

1. Agency fails to publish a rule of general applicability, they can’t apply it to someone who doesn’t have actual notice of it

2. What must be publically available:a. 552(2) – final opinions, statements of

policy/interpretations not published in the Federal Register, staff manuals/instructions, copies of records, general index of the records

ii. Federal Register Act1. Requires the Federal Register to be published each federal

working day2. Includes all rules of general applicability and legal effect

and NPRM

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3. Requires the publication of a complete codification of all documents having general applicability and legal effect that were published in the Federal Register

b. A final rule doesn’t become effective immediately upon publication or filing

i. Section 553(d) – final agency rule becomes effective NO SOONER than 30 days following publication in the Federal Register

ii. The delay provides for compliance of a new rulec. Exemptions from section 553 publication requirements

i. Subject Matter – military, foreign affairs, personnelii. Interpretative rules

iii. Policy statementsiv. Procedural rulesv. Good cause

d. In order for someone to get relief when a non-legislative rule is not published, they must show that it affected their substantive rights

i. Powderly v. Schweiker1. SS case – husband died, wife kept receiving checks2. Court found: overpayment waiver provisions were intended

to benefit only designated payees who – through no fault of their own – received more benefits than those to which they are entitled

3. Wife argued that the rule should have been published4. Court held: this rule was interpretive (merely

clarified/explained existing law/regulation) and didn’t need to be published

a. Rules that need to be published are those that effect substantive rights

ii. Substantive Rights Test (Nguyen v. US)1. Whether the rule changed existing rules, policy, practice2. Whether the interpretation deviates from the plain meaning

of the statute or regulation at issue3. Whether it is of binding force and narrowly limits

administration discretion6. Regulatory Analysis

a. An intensive, formal examination by an agency of the merits of a proposed rule – more detailed/systematic than notice and comment

i. Most common variety = cost benefit analysis (CBA)b. Judicial Review of Regulatory Analysis

i. Some statutes/executive orders prohibit judicial review of the agency’s compliance to do a CBA

ii. Corrosion Proof fittings v. EPA1. Act prohibited the future manufacture, importation,

processing, distribution of asbestos 2. EPA did a CBA3. Court found the EPA CBA wasn’t good enough -

“meaningless”

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c. Eisner, DOT Rulemaking Requirements (see handout)i. Agency requirements

d. Problem 2957. Exemptions from Rulemaking Procedures

a. Good cause (narrowly construed) i. Two exemptions:

1. From notice and comment procedures2. From 30 day delayed effectiveness requirement

ii. Determined on a case-by-case basisiii. Must show the normal procedures would be:

1. Unnecessarya. Trivial (technical amendment)b. Direct Final Rule

i. Agency publishes the rule and announces that if they do not receive adverse comments within a specified time period, the rule will become effective as of a specified later date

ii. Usually done when the rule is uncontroversial

c. Interim Final Rulei. When an agency relies on the impracticable

or public interest prongs of the good cause exemption and adopts a final rule then requests comments on the rule after it becomes effective

ii. Rule is final but will be reconsidered and perhaps revised/replaced in light of the comments received

2. Impracticablea. Overriding need to take immediate action

i. Sometimes this can come into play when there is a statutory deadline

3. Contrary to the public interesta. Security, emergency, etc…

iv. Jifry v. FAA1. Pilots contend that the new procedures resulting in the

revocation of their airman certificates issued by the FAA violated the APA (promulgated w/out notice/comment)

2. Court upheld law at issue because the national security implications yielded a good cause exemption – and revocation of the license without notice/comment is permissible

v. Problem 311b. Exempted Subject matter

i. Categorical exemptions – generalized judgment that all rules falling into the defined categories should be exempt, regardless of individual circumstances

c. Procedural Rules

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i. Rules of agency organization, procedure, practiceii. Substantial Impact

1. If the rule has a substantial impact on the regulated industry or those it will affect, there should be notice and comment

iii. Public Citizen v. Dept of State1. Cut-off date for FOIA requests – challenged for being

promulgated without notice and comment2. Department contended – was procedural3. Public Citizen said – substantially affected rights by

needlessly multiplying the number of FOIA requests that might be submitted to obtain access to records

4. Court Held – because the cut-off policy applies to all FOIA requests, making no distinction b/n requests on the basis of subject matter, it clearly encodes no substantive value judgment

a. Judgment about procedural efficiency cannot convert a procedural rule into a substantive one

b. Policy = prototype procedural rule properly promulgated w/out notice and comment

d. Non-legislative rules/guidance documents i. Agency rules that do not have the force of law (non-binding on the

agency and citizens) – not based on delegated authority to issue the rule

ii. Can have constraining effects on the agency actioniii. Two kinds of non-legislative rules

1. Policy Statementsa. Two situations in which agencies are most likely to

use general statements of policyi. To indicate when the agency will take

investigative/enforcement actionii. To indicate how the agency intends to act

under certain circumstances in an agency adjudication

b. Motivations for making policy statementsi. Provide guidance to employees

ii. Announce its intentions to the publicc. Professionals and Patients for Customized Care v.

Shalalai. Issue – whether the compliance policy guide

was not a substantive rule and thus not subject to notice and comment

ii. Holding – not a substantive rule [did not effect a substantive change in the regulations]

iii. Agency’s characterization of the rule = policy

iv. Court looked to whether the rule was binding – no – (affords an opportunity for

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the individual to determine compliance) (just used as guidance to help identify pharmacies that might be engaged in drug manufacturing activities under the guise of compounding)

2. Interpretative Rulesa. Shouldn’t add new content, should only derive a

proposition from an existing document whose meaning justifies that proposition

b. Hoctor v. US Dep’t of Agriculturei. Dangerous animal + fence requirement case

ii. When agencies base rules on arbitrary choices (height of fences not based on anything) they are legislating – so these rules are legislative/substantive and require notice and comment

iii. The standard created was an arbitrary choice that could not be derived from the regulation through a process reasonably described as interpretation

c. Factors that help determine whether the rule is interpretative

i. Whether in the absence of the rule there would not be an adequate basis for enforcement action (Hoctor)

ii. Whether the rule interprets a legal standard or whether it makes policy (legal standard = interpretative rule); (policy = rule)

iii. If the agency is interpreting a legislative rule, whether the claimed interpretative rule is consistent with the legislative rule it is supposedly interpreting (inconsistent = not interpretative)

iv. Whether the interpretative rule is inconsistent with a prior definitive interpretative rule (Alaska Hunters case – once a person has been notified of an agency’s interpretation and over time have come to rely on it, then only notice-and-comment rulemaking can change that rule)

v. Whether the agency contemporaneously indicated that it was issuing an interpretative rule

vi. Whether the person signing the agency document had the authority to bind the agency/make law

8. How much freedom does an agency have in choosing between rulemaking and adjudication as the mode of policymaking?

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a. Federal agencies have broad, but not unlimited discretion to chose rulemaking or adjudication

b. When should a purported rule of general applicability be treated as an order and made subject to adjudicative process?

i. Anaconda Test1. Rulemaking is invalid if:

a. If the impact of the agency’s issuance falls exclusively on one identifiable individual or entity AND

b. It can be demonstrated that no other individual or entity can join the described class AND

c. The issuance is based wholly on specific facts pertaining to the circumstances of the individual or entity

c. When should a rule announced in an adjudicative order not be made applicable retrospectively to the parties in the case?

i. Retail Clerks balancing test (when it’s unfair):1. Is the issue one of first impression?

a. If so, argues for retroactive applicationb. We generally want to encourage litigants to advance

new theories2. Whether the new rule represents an abrupt departure from

well-established practice or merely attempts to fill a void in an unsettled area of law?

a. If abrupt departure, may raise reliance issues3. Extent to which the party against whom the new case rule

is applied did reasonably rely on the prior law4. Degree of burden the retroactive order imposes on the party5. The statutory interest (public interest) in applying the new

law, nothwithstanding the party’s reliance on the prior lawd. When should a purported order, with prospective effect (especially

prospective-only effect), be required to be made through rulemaking?i. Wyman-Gordon

1. Should go through rulemaking but nonetheless allow later application after adjudication

ii. Bell Aerospace1. May use adjudication, but with limits2. In some instances, there might be an abuse of discretion

a. Where sanctions are involved – fines/damages/liability being imposed

iii. Ford Motor1. Ford’s repossession practices against defaulting purchases a

violation of the FTC Act2. Must use rulemaking – cannot use adjudication

a. The rule of the case will have general applicationiv. St. Francis Hospital

1. Need not, if rule is allowed to be challenged in subsequence adjudication

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2. Okay for agency to announce an adjudication so long as the parties in the next case can challenge the rule that’s announced in the adjudication

e. An adjudication may be invalid because it made law that was required be cabined by rule in advance of that decision

i. Megdal1. Board revoked dental license because it was fraudulently

obtained malpractice coverage2. Court remanded the case because the Board had not

adopted rules to elaborate on the vague statutory standard of “unprofessional conduct”

a. Must elaborate and narrow the scope before it’s applicable to an individual

b. Based on the principle that – if something is too vague, it should be fleshed out in rulemaking – NOT adjudication

f. A rule issued as a legislative rule – after notice and comment – cannot be challenged in subsequent adjudications

i. May only be challenged by the agency in a subsequent rulemaking proceeding

ii. DC Circuit extended this to interpretative rules interpreting their own regulations

1. Alaska Huntersg. The following choices can be made re: rulemaking v. adjudication

i. Agency is generally free to announce new policies through and administrative proceeding

ii. When rulemaking is feasible and practicable, an agency which has been granted broad rulemaking authority ordinarily should use rulemaking instead of adjudication for large-scale changes

1. Ex: proscribing established industry-wide practices not previously thought to be unlawful

iii. Agency should not be empowered to treat adjudicatory decisions precisely as if they were rules

1. Where precedent of prior adjudications is sought to be applied in a subsequent adjudication – party should have a meaningful opportunity to persuade the agency that the principle involved should be modified or held inapplicable

9. Rulemaking petitions and agency agenda-settinga. Authorizes members of the public to petition an agency for the issuance,

amendment, or repeal of a rulei. Section 553(e) of the APA

ii. Also requires brief statement of the ground for denial of any application/petition filed with an agency (555(e))

b. Judicial Reviewi. Narrow – limited to ensuring the agency has adequately explained

the facts and concerns and that those facts have some basis in the record

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1. Record need only include – petition, comments, and the agency’s explanation for rejection

ii. Massachusetts v. EPA1. Agencies have to adequately justify why they aren’t

engaging in rulemaking in order to avoid a finding that the rule is arbitrary and capricious

c. Problem 36210. Waivers of Rules

a. Agencies often entertain requests for waivers in cases in which the applicants can demonstrate that the rule does not work appropriately in their case

b. Agencies are not required to include provisions for waivers – but, when they do – they must take a hard look at meritorious applications for waivers and articulate with clarity/precision their findings and the reason for the decision

c. WAIT Radio v. FCCi. FCC rejected application for authority to operate on an unlimited

time basisii. Holding: court erred by not giving adequate reasons for denying

and refusing to hold a hearing on the request for waiver of certain FCC rules

d. Problem 370

5. REGULATORY REFORM

a. Political Oversight of the Administrative Processi. Legislative and Executive Review of Agency Action

1. The legislature should specify its desires in the agency enabling act at the outseta. When the legislature finds an exercise of authority unacceptable, it can

respond by narrowing the agency’s enabling act or can overturn the objectionable agency action

b. Requires the concurrence of both houses of the legislature and the chief executive – most legislatures use the legislative veto

ii. Legislative Controls1. Legislative Veto

a. Mechanism that allows legislators to invalidate/suspend agency action by less cumbersome means than the enactment of a statute

i. Ex: a resolution to disapprove of agency action passed by one house, two houses, or a committee without the participation of the chief executive

1. Has faced constitutional challenges for failure to satisfy bicameralism and presentment provisions

b. Test:i. Whether Congress has sought to take legally binding action

through a means other than the full enactment process1. If it has – the action violates the separation of powers

principles and is not permitted (See Chadha below)c. Immigration and Naturalization Service v. Chadha

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i. Immigration and Nationalization Act provided for Attorney General to have discretion to suspend the deportation of deportable aliens – AG delegated this power to the INS

ii. Immigration judge suspended Chadha’s deportation – per the statute, reported the suspension to Congress

iii. House adopted a resolution adverse to the deportation suspension1. Chadha questions the constitutionality of the legislative

veto that resulted in his deportationiv. ISSUE: whether one House of Congress violates strictures of the

Constitutionv. Holding: unconstitutional

1. House’s veto of the AG decision to suspend deportation was legislative and invalid because of a failure to satisfy bicameralism and presentment provisions

a. AG was exercising legislatively delegated authorityb. Any issues with that decision should have been

dealt with in only one way; bicameral passage followed by presentment to the President

c. Congress must abide by its delegation of authority until that delegation is legislatively altered or revoked

2. Congressional Review Act of 1996a. Requires that virtually all rules of general applicability – along with

supporting documents – be submitted to Congress and GAO before they take effect

i. Distinguishes major from non-major rules1. Non-major

a. Can take effect whenever the agency determines – after 30 days from publication in the Federal Register

2. Majora. Cannot take effect for at least 60 calendar days after

being submitted to Congressii. Congress can veto all rules by a joint resolution (which is like a

statute) without explanation1. If a rule is disapproved, the agency may not issue another

one in substantially the same form unless authorized3. Other Legislative Controls

a. Oversight Committees – review the legality and the desirability of agency rules

b. Investigations and Hearingsiii. Presidential oversight

1. Executive Orders a. 12866

i. Stated purpose: to reform and make more efficient the regulatory process

ii. Four ways it achieves that purpose:

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1. Prescribes principles of regulation for agencies to follow to the extent permitted by law and where applicable

2. Requires each agency annually to prepare a regulatory agenda that includes a regulatory plan

3. Regularly convened meetings and conferences4. Centralized review of regulations

iii. How it applies to independent agencies1. Must prepare regulatory agendas/plans2. NOT subject to centralized review for each “significant

regulatory action”3. NOT subject to the provision authorizing the President to

resolve conflicts that cannot be resolved by OMBb. Used to prescribe policies for the executive branchc. Not legally bindingd. Can have the force of law if based on statutory/constitutional authority

2. Problem 475b. The Debate over regulatory reform

6. ALTERNATIVE DISPUTE RESOLUTION

a. Negotiated Rulemakingi. Neutral advisers (“convenors”) assembles a committee of representatives of all affected

interests to negotiate a proposed rule1. Goal: to reach a consensus on a text that ALL parties can accept

ii. Negotiated Rulemaking Act1. Criteria to be considered when determining whether to use negotiated rulemaking

a. Whether there are a limited number of identifiable interests (no more than 25) that will be significantly affected by the rule

b. Whether a balanced committee can be convened that can adequately represent the various interests and negotiate in good faith to reach a consensus on a proposed rule

c. Whether the negotiation process will not unreasonably delay issuance of the rule

d. Whether the agency has adequate resources to support the negotiating committee

e. Whether the agency will use a committee consensus as the basis for a proposed rule

iii. Essential that negotiated issues do not require the compromise of principles so fundamental to the parties that meaningful negotiations are impossible

1. There must be a willingness to negotiate in good faithiv. Supplement to the APA process – happens before issuance of notice and comment

7. JUDICIAL REVIEW OF AGENCY DECISION-MAKING

a. Section 701 - 706b. Scope of Judicial review

i. Introduction1. See APA section 706

ii. Burden of Proof1. Preponderance of the evidence

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iii. Scope of review of Agency finds of basic fact1. Most to least judicial power of review

a. De novo (most)i. APA Section 706(2)(F)

1. Provides for setting aside agency action found to be unwarranted by the facts to the extent that the facts are subject to trial de novo by the reviewing court

2. Treats the agency decision as nullityii. Court decides the case as if the agency proceeding never occurred

b. Independent judgment on the evidencei. Court decides the case on the record compiled by the agency, but

gives no deference to the agency decisionc. Clearly erroneous

i. Court reverses the agency’s decision if it is left with the definite and firm conviction that a mistake has been committed

1. All the court must find is an error that was made and it doesn’t matter if there is supporting evidence

d. Substantial evidence – APA formal standard – section 706(2)(E)i. Whether a reasonable person viewing all the relevant evidence in

the record could find that a preponderance of the evidence supports the agency’s findings/decision

1. Must look at the entire record2. If a reason person could find the same as the agency, then

the decision is supported by substantial evidence and upheld

e. Arbitrary and Capricious – APA informal standard – section 706(2)(A)i. Court may reverse the agency decision only if its findings are

arbitrary, capricious, or an abuse of discretionii. Only applies to judicial review of agency fact-finding in informal

adjudication or informal rulemaking1. Should also be used when reviewing the discretionary

aspects of agency action in formal adjudicationsf. Unreviewable (least) – statute may prohibit review, etc…

2. The Substantial Evidence and Clearly Erroneous Testsa. A court reviews for substantial evidence when the agency action was

formal rulemaking, formal adjudication, or rulemaking/adjudication under sections 556 and 557 of the APA

b. Universal Camera Corp. v. NLRBi. Lower court failed to consider the ALJ’s report as part of the

decisional record1. Circuit Court (reviewing court) believed itself to be bound

by the ALJ’s decision and found there was substantial evidence in support of the Board’s findings

ii. Court says: Agency findings should be set aside when the record before a reviewing court clearly precludes the agency’s decision from being justified by a fair estimate of the worth of testimony of witness or its informed judgment on matters within its special competence

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1. APA and the Act direct that courts assume more responsibility for the reasonableness and fairness of Labor Board decisions

2. Responsible to assure that the Board keeps within reasonable grounds

iii. In other words – they have to look at the whole recordiv. Upgrades the important of ALJ hearing examiners – now their

decisions are going to be looked atc. Substantial evidence test is designed to limit a review court’s power to

reverse agency fact findingsiv. Scope of Review of Issues of Legal Interpretation

1. APA section 706 – specifies the scope of review 2. Level of Deference Given to Agency Interpretation

a. Weak Deference i. In reviewing the legal meaning of a statute, a court gives the

agency’s interpretation weak deference but may override it if they are so persuaded (Skidmore)

b. Strong Deference i. Chevron Deference

1. Two Step Process:a. Court decides whether the statute being interpreted

has a clear meaningi. Court use traditional rule of construction

ii. If agency’s interpretation conflict with that clear mean, it’s invalid – BUT – if the statute is ambiguous, the court moves on to second step

b. The court asks whether the agency’s interpretation is reasonable

3. Connecticut State Medical Society v. Connecticut Board of Examiners in Podiatry

a. Agency is construing a statute, not its own regulation b. Azamo Factors – what to consider when determining deference (before

Cheveron):i. Is the issue (what does foot mean) – technical? Require a lot of

special training? – no.ii. How was this decided by the agency? – (rulemaking, memo,

declaratory ruling, adjudicative?)1. They considered thoroughly, strong deference

iii. When was the policy instituted (contemporaneous? interpretation of long standing?)

1. No, recent interpretation, weak deference2. Not a lot of reliance, weak deference

4. Chevron v. Natural resources defense councila. See notes above re: level of deferenceb. When should Chevron apply?

i. Chevron deference does NOT apply to non-legislative rules or informal adjudication

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1. Agency’s view in these types of interpretations can have the power to persuade as distinguished from power to control

ii. Courts have given Chevron deference to an agency’s procedural statutes that they are experts in

iii. No Chevron deference when there are Constitutional issues involved

5. Problem 5406. Statutory Interpretation and Chevron

a. Brown & Williamson Tobacco v. FDAi. By inference, Congress never intended the FDA to regulate

tobaccoii. Court says: Congress has clearly precluded the FDA from

asserting jurisdiction to regulate tobacco products1. the FDA is being irrational in attempting to claim

jurisdiction over regulation2. If it really was a medical device, they would ban it, not

regulate itiii. In other words, under the Chevron deference test, the statute was

clear and the interpretation was in conflict with the clear meaningiv. Dissenters say: it’s better to regulate than not regulate at all (black

market consequence)7. Informal Interpretations and Skidmore

a. Christensen v. Harris Countyi. Opinion letter written by department said you had to get an

agreement before changing the compensatory time compensation requirement

ii. Court found:1. Interpretative documents – like opinion letters – do not

warrant Chevron deference2. Instead – they are entitled to Skidmore deference

a. Interpretations contained in opinion letters are entitled to respect but deference is given only to the extent that those interpretations have the power to persuade

3. Court finds agency interpretation not persuasiveiii. Harder for agency interpretation to be upheld under Skidmore

deferenceb. US v. Mead Corp.

i. Whether a tariff classification ruling by the US Customs Service deserves judicial deference

ii. Tariff classification has no claim to judicial deference under Chevron

1. There is no indication that Congress intended such a ruling to carry the force of law

iii. Tariff classification = Skidmore deference1. ruling is eligible to claim respect according to its

persuasiveness

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iv. If the agency can point to something in a statute/legislative history that proves Congress intended to give the agency deference – then Chevron deference – if not, then Skidmore

v. Judicial review of Discretionary Determinations (arbitrary and capricious test) in Adjudications

1. Administrative action judicially reviewable – APA section 706(2)a. “arbitrary and capricious, an abuse of discretion, or otherwise not in

accordance with the law” [arbitrary and capricious test]i. Used in reviewing the discretionary element of all kinds of agency

actions – formal and informal adjudicationsii. Often applied to review of fact finding in informal proceedings

1. If the agency failed to consider a relevant factor, or took account of a factor it should not have considered, its action should be set aside as arbitrary and capricious

2. Citizens to Preserve Overton Park v. Volpea. Review of a decision by the Secretary of Transportation to grant funds to

build an interstate highway through a parkb. Statute prohibited the use of parks for highways unless there was no other

feasible and prudent alternativec. Court Found:

i. Substantial evidence test not applicable (only applies to formal rulemaking/adjudication)

ii. Public hearing required (informal) = arbitrary and capricious test

1. Whether the decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment

2. Review should be “searching and careful”3. Don’t want to shield the action from probing and thorough

review4. Narrow interpretation

3. Salameda v. INSa. Whether the INS’s judicial officers addressed in a rational manner the

questions that the aliens tendered for considerationb. Deportation = formal adjudication (substantial evidence test)

i. However – arbitrary and capricious applies because the court is reviewing the a discretionary determination

c. Holding – no, the officers did not address in a rational manner the questions that the aliens tendered for consideration

i. The holdings of the judges were incomprehensible at critical junctures

1. Refused to include the son in the matter2. Didn’t address the petitioners hardship claim

ii. Court remanded back for the agency to address the issues properly

Chevron SkidmoreLegislative XFormal Adjudication X

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Non-legislative rules XInformal Adjudication X

vi. Judicial Review of Discretionary Determinations (arbitrary and capricious test) in Rulemaking

1. While a court should not substitute its judgment for that of an agency, the court should determine whether the decision-making was rigorous and deliberative; whether the agency reached its result through reason; and whether the agency took a hard look at the rule before its adoption

a. Hard look test (see State Farm below)i. Reviewing court scrutinizes the agency’s reasoning to make certain

that the agency carefully deliberated about the issues raised by its decision

1. Agency explanation must address all factors relevant to the agency’s decision

b. Agency changing course by rescinding a rule is obligated to supply a reasoned analysis for the change beyond that which may be required when an agency does not act in the first instance

2. Motor vehicle manufacturers Ass’n v. state farm mutual automobilea. Whether seatbelts or airbags should be required in carsb. Informal rulemaking = arbitrary and capricious, abuse of discretion,

otherwise not in accordance with the lawc. Petitioner argued – rescission of an agency rule = same standard a court

would use to judge a refusal to promulgate a rule in the first placed. Holding: revocation is substantially different than failure to act and

therefore not subject to the same judicial reviewi. Under arbitrary and capricious standard – reviewing court may not

set aside a rule that is rational, based on consideration of the relevant factors and within the scope of the authority delegated to the agency by the statute

ii. This rule was arbitrary and capricious1. Agency failed to supply the requisite reasoned analysis in

the case3. Problem 600

c. Availability and Timing of Judicial Reviewi. Reviewability

1. Preclusion of Judicial reviewa. Presumption of reviewability except where congress overrides that

presumptioni. APA section 701

1. Judicial review does not apply to the extent that statutes preclude judicial review

ii. Exception to the exception – questions of constitutional law can never be withheld from the courts

iii. The mere failure to provide specifically by statute for judicial review is not evidence of the intent to withhold review

b. Presumption of judicial review and the need for “clear and convincing evidence” to overcome that presumption

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i. Bowen v. Michigan Academy of Family Physician1. there must be a showing of clear and convincing evidence

to overcome the strong presumption that Congress did not mean to prohibit all judicial review of executive action

2. Court presumes that Congress intends the executive to obey its statutory commands and, accordingly, that it expects the courts to grant relief when an executive agency violates such a command

3. No judicial review available here (different than Erika) = no possibility to challenge the regulations at all

4. Footnote 3 – p. 623 re: constitutional reviewa. Disposition avoids the constitutional question – to

what extent can Congress preclude judicial review of constitutional issues, either in the Supreme Court or in the lower federal courts?

c. Time limitations/preclusionsi. Providing for review of rules only during a short period of time (60

days)ii. Persons against whom a rule is enforced may be unable to

challenge the rule – even though they didn’t know about the rule within the 60 day period

iii. Benefits?1. Efficiency – front loading all the challenges

iv. What about constitutional challenges?1. Not likely to be precluded2. Some challenges must be allowed regardless of time

limitationsa. Constitutionalb. Criminal

i. Adamo Wrecking Co. v. United States (p. 625)

c. Ultra Viresd. Statutory Challenge

i. On the borderline – something can come up that makes the interpretation dubious (less reason to preclude)

v. What challenges SHOULD be precluded?1. Procedural challenges

a. Didn’t give notice/follow the rulesb. Either you did or did not follow the rules, will not

change over time2. Adequacy of the Record - Arbitrary and Capricious (State

Farm)a. Wasn’t supported by rulemaking record, facts,

comments, etc…b. Adequacy of the rulemaking isn’t going to change

d. Problem 6262. Committed to Agency Discretion

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a. Two kinds of agency discretioni. That which is reviewable

1. APA section 706 – arbitrary and capricious, abuse of discretion, or otherwise not in accordance with the law

ii. That which is not reviewable1. Agency refusing to act = generally, not judicially

reviewablea. Decision whether or not to enforce a law/rule –

discretion – unreviewable (Heckler case)b. Agency non-enforcement/refusal to undertake a

rulemaking – no discretion – reviewable (Horse soring case)

2. APA section 701a. Excludes agency action from judicial review to the

extent that the agency action is committed to agency discretion by law

b. Heckler v. Chaneyi. Death row prison inmate wrote to the FDA claiming that the use of

drugs for capital punishment violated the FDCA because it hadn’t been proved to be “safe” and “effective”

1. FDA commissioner refused to take action – relying on his discretion not to enforce the Act in cases where is no serious danger to the public health or a blatant scheme to defraud

ii. Court found: Agency refusal to take enforcement action should be presumed immune from judicial review

iii. Why unreviewable?1. If an agency is refusing to act, it’s not exercising coercive

power over liberty or property interest2. Shares similar characteristics as that of Prosecutorial

discretion 3. Review is precluded if “the statute is drawn so that a court

would have no meaningful standard against which to judge the agency’s exercise of discretion”

a. No law applied to the exercise of the FDA’s prosecutorial discretion

b. Therefore, decision whether to take enforcement action was committed to the FDAs discretion by law

iv. Problem:1. Makes judicial review a one way street2. Regulated parties can seek review and get into court easier

but makes it harder for those who want the law to be enforced to get into court

c. Webster v. Doei. CIA fired an employee when it discovered the employee was gay

ii. Alleged firing was unlawful under the National Security Act and was unconstitutional

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1. Act: Director may in his discretion, terminate the employment whenever he deems it necessary/advisable in the interest of the US

iii. Holding: language of the Act exudes deference – judicial review not allowed

1. Firing was not unlawful under the act2. Note: Court allowed the constitutional claim

3. Agency Inaction and Delaya. Norton v. Southern Utah Wilderness Alliance

i. Whether the authority of a federal court under the APA to compel agency action unlawfully withheld or unreasonably delayed extends to the review of the US bureau of land management’s stewardship of public lands under certain statutory provisions and its own planning docs

ii. Hard to challenge programmatic failureiii. Holding:

1. An agency’s failure to act is reviewable agency action only if it involves failure to take a discrete action that is legally required

a. Failure to act = failure to take discrete actionii. Standing of the Plaintiff to Sue

1. A person suffering legal wrong because of agency action, or adversely affected, or aggrieved by agency action within the meaning of a relevant statute is entitled to judicial review (APA section 702)

2. Injury in Fact and Zone of Interest Testa. Two-prong test for standing

i. Injury in Fact1. Whether the challenged action has caused the complainant

injury in fact – economic or otherwise2. An invasion of a legally protected interest that is

a. immediate rather than speculative b. particularized to the P rather than generalized to too

many citizens, and c. concrete rather than ideological

3. Associations may seek review of agency action on behalf of their members so long as:

a. One or more of its members would otherwise have standing to sue in their own right

b. The interests the association seeks to protect are related to the organization’s purpose and

c. Neither claim nor the relief requested requires the participation of individual members in the suit

4. No citizen-standinga. Must be distinct from the general population

5. Tax payer standinga. SC has allowed such standing for one case

6. The injury must be “fairly traceable” to the allegedly unlawful action (causation)

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ii. Zone of interest1. Whether the interest sough to be protected by the

complainant is arguably within the zone of interests to be protected or regulated by the state in question

a. Interest must be sufficiently linked to the statute2. This prong of the test is in place to exclude Ps whose suits

are more likely to frustrate than to further statutory objectives

3. When a statute presents polar approaches (ex: the bank is allowed to provide services or they are not allowed to) a business is within the zone of interests

3. Lujan v. Defenders of Wildlifea. Endangered species act – requires federal agencies to consult w/ sec of

interior to make sure not jeopardizing animals – UNLESS overseas….in which case, didn’t matter, didn’t have to check

b. Rule was challenged – 2 of their members wanted to go look at these animals

c. Court Found: not enough – no standingi. Needed concrete plans to show actual/imminent injury

ii. No redressability (remediability)1. Even if USAID was to consult, there was no guarantee

USAID would have stopped the projectiii. Requirement that the injury be fairly traceable iv. Easy to show injury when the govt action threatens the plaintiffs

1. But when asserted injury arises from lack of/weak regulation – more is needed

2. Harder for them to show that if they win their suit, there will be stronger regulation

v. Original injury in fact test is now more complicated4. Massachusetts v. EPA

a. The injury: Loosing coastline because the waterlines were rising – global warming – gas emission (chain of causation)

i. Issue of generalization – petitioners are citizens of the state1. Court says – Mass = quasi-sovereign – representing their

citizens can be considered particularized enoughb. Why wasn’t redressibility a problem?

i. If the P’s win their suit – EPA would start rulemaking process, explain why, address the petition

ii. Seems to be a difficult issue 1. They might not grant a petition2. They might not issue a rule3. That rule might not require restrictions on tailpipe

emissionsiii. Dissenters argue – there is no redressibility

c. The Issue: Whether the EPA violated the Clean Air Act by failing to adopt rules limiting greenhouse gas emissions from motor vehicles

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d. Holding: Massachusetts had standing because it alleged that its own coastal property was being consumed by rising sea levels cause by global warming

5. Problem 6566. Ass’n of Data Processing Service v. Camp

a. Challenged a ruling by the Comptroller of the Currency that national banks could provide data processing services

b. Petitioners allege – violates National Bank Actc. Whether the P alleges that the challenged action has caused him injury in

fact, economic or otherwisei. Yes, competition of the bank = future loss of profits

ii. Close relation between the interests of the statute – limiting the economic activities in which the financial institutions could engage – and the interests of potential competitors to limit the financial institution’ economic activities

d. Whether the interest sought to be protected by the complainant is within the zone of interest to be protected or regulated by the statute or constitutional guarantee in question

i. Yes, “no bank service corporation may engage in any activity other than the performance of bank service” – which brings competitors within the zone of interest

7. National Credit Union Admin v. First Nat’l Bank/Trusta. Statute that federal credit union membership is limited to groups with a

shared interest or in a specific geographic areab. Holds: standing – relies on data processing, clark securities, and 2 other

banking casesc. Finds – standing shouldn’t be denied under zone of interest

i. Precedent says that competitors of financial institutions have standing to challenge agency action relaxing statutory restrictions on the activities of those institutions

1. we hold that respondents’ interest in limiting the markets that federal credit unions can serve is arguably within the zone of interests to be protected

iii. Timing of Judicial Review (when should courts decide controversies brought before them?)

1. Finality a. APA section 704

i. Agency action made reviewable by statute and final agency action for which there is no other adequate remedy in a court are subject to judicial review

b. A litigant must complete the entire administrative process before a court will review decisions made by the agency

c. Two-part test for determining whether agency action is final (Bennet v. Spear test)

i. The action must mark the consummation of an agency’s decision-making process

1. Not be of merely tentative or interlocutory character

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ii. The action must be one by which rights or obligations have been determined or from which legal consequences will flow

d. Federal Trade Commission v. Standard Oil Co.i. Whether issuance of the complaint before the administrative

adjudication concludes is “final agency action” subject to judicial review

ii. Holding: issuance of the complaint was reviewable ONLY IF it was “final agency action” or otherwise was “directly reviewable” under section 704 of the APA

1. Why the final agency action rule?a. Worried about judicial economy

i. Otherwise you have piecemeal reviewii. Why have review twice? Would delay final

resolution – there might be two separate verdicts

iii. If this were allowed, every respondent would challenge it – not very efficient

b. Worries about interfering with agency processi. Intervening now would prohibit agency’s

input of expertisec. Severe practical effect MIGHT make it reviewable

under these circumstancesiii. How is this different from exhaustion of remedies?

1. On this particular action, they have exhausted their remedies – they have challenged the reason to believe finding and it’s been rejected

2. But it’s still not final agency action – it’s only a preliminary step in the adjudication process

iv. Mere litigation cost is not enough to overcome finality – unless they could show it was absolutely crippling

e. Immunity of review because of finality doctrinei. Franklin v. Massachusetts

1. Massachusetts tried to challenge the results of a census b/c it would have the effect of depriving the state of one of its representatives

a. Alleged that the Dept. of Commerce had made unlawful adjustments to the results

2. Secretary of Commerce was to report the count to the President – President would report the count to Congress

3. The rule was subject to review and revision by the President before it would have any direct and immediate effect on anyone

a. President is not an agency, not subject to being sued4. Therefore, there’s no way to challenge the methodology

f. Agency inaction and finalityi. Statute establishes a deadline for agency action – failure to meet

the deadline can be final agency actionii. Heckler

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1. Inaction can sometimes equate to final actiona. Only when an agency fails to take a discrete action

it is required to take can someone bring such an action

i. Cannot be asserted when an agency has discretion whether to act or to refrain from acting

g. Letter from the head of the agencyi. DC Courts have found a letter from the head of the agency

responsible for a matter presumptively the agency’s decision1. Absent any indication that the view is only

tentative/preliminary – can be viewed as finalii. Opinion letters can have legal consequences

1. Addresses a specific factual situation2. Speaks in absolute terms3. Establishes the legal obligations and legal consequences

2. Exhaustion of Administrative Remedies a. When Congress does not explicitly require exhaustion or say that

exhaustion is not required, federal courts must balance the interest of the individual in retaining prompt access to a federal forum against countervailing interests favoring exhaustion

i. Exhaustion is therefore NOT required in EVERY case over which an agency has jurisdiction

ii. BUT – strong presumption that it is b. Circumstances in which exhaustion should not apply:

i. Prejudice subsequent right to judicial review (agency is unduly slow)

1. Requiring resort to the administrative remedy may occasion undue prejudice to subsequent assertion of court action

2. May result from an unreasonable or indefinite timeframe for administrative action

ii. Substantial doubt it can grant the relief that’s being sought - an administrative remedy may be inadequate because of some doubt as to whether the agency was empowered to grant effective relief

1. Where the challenge is to the agency procedure itself2. When an agency lacks the authority to grant the type of

relief requestediii. An administrative remedy may be inadequate where the

administrative body is shown to be biased or has otherwise predetermined the issue before it

1. It would be feudal to proceed at the agency levelc. Portela-Gonzalez v. Secretary of the Navy

i. Internally appealed her terminationii. Had one appeal left, skipped it, went straight to Fed. Dist. Ct.

iii. Finding – she failed to exhaust her final administrative remedy1. Still allowed the case to be heard and still ruled against her2. Appeals to the 1st Circuit

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a. Dist. Ct. was wrong – lacked discretion to waive the exhaustion of remedy

b. Circumstances in which a Ct. might not require exhaustion

i. Statute must be silent – court in weighing considerations might find they might be outweighed for judicial review

ii. Exceptionsiii. Prejudice subsequent right to judicial review

(agency is unduly slow)iv. Substantial doubt it can grant the relief

that’s being soughv. Biased tribunal/feudal to proceed at the

agencyc. Court weighs the above factors and finds:

i. Wasn’t a lost cause to make the final appeal within the agency

ii. Cannot be inadequate for expensive, or because the individual wants to skip it, or if the court cannot address an issue (constitutional question still should be exhausted)

3. Ripeness a. Most legislative rules are deemed ripe for pre-enforcement judicial review

i. Challenges to legislative rules that impose duties/restrictions requiring persons immediately to change their conduct or be in violation of law = ripe under Abbott Labs

ii. Legislative rules that DO NOT impose such duties/restrictions = NOT RIPE under Toilet Goods

b. Two-part test for allowing pre-enforcement judicial review of legislative rules (see Abbot Labs below)

i. Fitness of the issues 1. Whether the issue tendered is purely a legal one2. Whether the action is final

a. Not final if the agency may suspend, order, etc., upon the happening of a certain event (see Toilet Goods)

ii. Hardship to the parties would result from withholding review c. Pre-enforcement review should usually NOT be allowed for non-

legislative rules because they are tentative and no definite position has been established

i. Guidance Documents - not normally found ripe for review1. National Park Hospitality Ass’n v. Dep’t of the Interior

a. Challenged guidanceb. Court says – not ripe for review

i. Legal uncertainly isn’t enough of a hardship, even if it’s a purely legal question

2. Forest Service in Ohio Forestry Ass’n v. Sierra Club

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a. Clear cutting of the forestb. The policy of clear cutting was challengedc. Court said – it’s not ripe, many steps between

issuance of the plans and the cutting of the trees that have to happen

i. First would the delayed review cause practical hardship? No.

ii. Immediate judicial review could hinder agency efforts to refine its policies through application of the plan

iii. The issues didn’t seem fit for immediate review – raised technical questions that could be illuminated through a focus on specific parcels and specific proposals

3. Hardships can be found whena. Guidance document announces a policy that could

be taken as a legal actionb. If you can show immediate and direct effect and

you’re making a legal challenge, you might get into court

d. Abbott Laboratories v. Gardneri. Rule required that the generic name of the drug appear on labels

ii. Presumption of reviewabilityiii. Wasn’t ripe – see two-prong test

1. Fitness of the issuesa. Nature of the claims

i. Is it purely legal?ii. Is it final?

2. Hardship to the parties in withholding reviewa. Significant harm b/c of the dilemma the companies

were in – either comply with the regulation and forgo review of what they believed was an unlawful regulation OR willfully violate the rule and run the risk or serious criminal/civil penalties

iv. Established that rules could be reviewed in pre-enforcement manner

e. Gardner v. Toilet Goodsi. Unripe for review

ii. Final agency action challenged on purely legal grounds, but not significant enough hardship

1. No dilemma faced by the manufacturera. The rule did not immediately establish a legal duty

requiring them to alter their primary conduct (like in Abbott) – only imposed a condition requirement

b. Company has to wait and see if the inspector knocked on their door, if they did, they could not let them in and then challenge the rule then

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c. We don’t even know if the FDA will decide to enforce the rule – discretionary enforcement

f. Problem 6914. Primary Jurisdiction

a. Not an issue of the timing of judicial review, but an issue of concurrent trial jurisdiction – who should have primary jurisdiction (who should hear the case first)

i. When should the court allow the agency to try the case when it has concurrent jurisdiction?

1. Court may dismiss the entire case, which would send it to the agency, OR, it can keep the case pending and let the agency decide certain issues before deciding the case

a. Court usually defers to the agency before it takes up a case when:

i. There is a need for uniform resultsii. There is a need for the agency’s expertise

iii. The possibility that agency approval of a challenged practice may immunize that practice from judicial challenge – or at least alter the legal status of the practice

8. OPENNESS IN GOVERNMENT

a. Freedom of Information Act i. Section 552(a)(1)

1. An agency MUST PUBLISH certain important information, such as a statement of its organization and procedure and substantive rules of general applicability

2. If such material is not published, a person without actual and timely knowledge of the terms thereof cannot be adversely affected by it

ii. Section 552(a)(2)1. Agencies must MAKE AVAILABLE (not necessarily publish) specified

additional materiala. Final opinion, staff manuals, instructions to staff that affect the public, and

policy statements and interpretations of particular applicability (rather than general)

2. Material must be indexediii. Section 552(a)(3)

1. An agency must furnish any reasonably described record requested by any person for any reason

2. If an agency refuses to furnish the record (or fails to act within the prescribed timeframe), the requester if entitled to go to a federal district court and compel disclosure

3. The agency has the burden to justify non-disclosure on the basis of one of the nine exemptions for each document (or part of a document)

a. The court then decides the matter de novoiv. Nine Exemptions to FOIA (section 552(b))

1. Classified information2. Internal personnel rules and practices3. Where another statute precludes release

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a. Homeland security Act, IRS laws, etc…4. Confidential private information

a. Trade secrets and commercial/financial information obtained from a person/company and privileged or confidential

b. If the information is submitted to the government voluntarilyi. Exempt if it is of a kind that would customarily not be released to

the public by the person from whom it was obtainedc. If the information is submitted to the government under compulsion it is

exempt if disclosure would cause substantial harm to the competitive position of the person or company from whom it was obtained

5. Inter or Intra agency communicationsa. The government has a right to withhold records that would expose its

deliberative processesi. This includes memos which direct the filing of a complaint

b. Attorney work product is exempti. Memos prepared by an attorney in contemplation of litigation

which set forth the attorney’s theory of the case and his litigation strategy

ii. Includes documentsiii. Court often distinguish between factual and non-factual material

c. Presidential communications are coveredd. Does NOT apply to any document which falls within the meaning of the

phrase “final opinion…made in the adjudication of the case”i. The decision to dismiss a charge or not to file a complaint are such

decisions6. Invasion of privacy

a. Prevents disclosure of material that would constitute a clearly unwarranted invasion of personal privacy, including personnel or medical files

i. Requires the court to balance the public’s interest in disclosure against the private interest in preserving privacy

b. Only individuals may invoke thisi. Corporations invoke exemption 4

7. Law enforcement records8. Bank regulatory reports9. Oil wells

v. Judicial review – de novo (552(a)(4)(B))vi. NLRB v. Sears, Roebuck & Co.

vii. Chrysler Corp. v. Brown1. Court rejected the legal theory on which prior reverse-FOIA suits had rested

a. Allowed then to survive on new legal footing2. FOIA exemptions are discretionary, not mandatory

a. Just because it falls within an exemption doesn’t prohibit an agency from disclosing it

3. FOIA does not create a private cause of action for a person who wants to prevent an agency’s disclosure of information

a. Disclosure of information = agency action so such a person has a cause of action under the APA

b. Government in the Sunshine Act

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i. Requires the meeting of the heads of the multi-member agencies to be held in public unless the meeting fall under one of ten exemptions in the statute

1. A meeting involves:a. A quorum of members

i. At least the number of individuals required to take action on agency behalf

b. Acting jointlyc. Conducting deliberationsd. Dispositions of agency business

i. Informal background discussions that clarify issues and expose varying views are NOT considered meetings

2. Statute requiresa. 7 days advance public notice in the Federal Register

i. Even when the meetings are going to be closeb. Certification by the chief legal officer of the agency that a meeting can be

closed to the publicc. The making of a transcript of all closed meetings

3. Exemptionsa. Generally parallel the FOIA exemptions

i. Exceptions1. Pre-decisional communications between agency members,

occurring in the meetings, must be open to the publica. Leads to having staff members representing their

bosses to avoid Sunshine, and then having the agency heads rubber stamp decisions in an open meeting without further deliberation

2. Information, premature disclosure of which would be likely to significantly frustrate implementation of a proposed agency action

a. Has been construed very narrowlyi. Almost only used for impending embargos

3. Discussions of the agency’s participation in pending civil litigation or its discussions concerning the initiation, conduct, or disposition of formal, on the record, agency adjudication

c. Federal Advisory Committee Act i. Applies to:

1. Any committee, not wholly composed of federal employees, formed for the purpose of advising the President, the Congress, or executive/independent agencies

2. Broad enough to cover any meeting of two or more outside persons with agency staff

3. Advisory Committeea. Any committee/commission/board/task force/subcommitteeb. Established by statute, used by the president, one or more agenciesc. To obtain adviced. Not including that composing full-time employees of the govt (but if there

is one private person, then FACA applies)

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ii. Does NOT apply to:1. An unstructured arrangement in which the government seeks advice from a

collection of individuals who do not interact with each otheriii. Requirements:

1. Membership must be fairly balanced in terms of the POV represented/functions to be performed

2. Document setting up the committee must contain appropriate provisions to assure that the advice and recommendations of the advisory committee will not be inappropriately influenced by the appointing authority or special interest

3. Notice of committee meetings must be published in advance in the FR, and the meetings must be open to the public except under the FOIA exemptions

4. Detailed minutes must be keptiv. Decision Tree

1. How to decide whether a group is giving recommendations and is a committeea. Does this collection include nongovernmental official?b. Do they have a cohesive organizational structure?c. Is that org. a result of agency effort?d. Is the group subject to agency management and control?

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