Administrative LawProfessor Sant’Ambrogio, Fall 2020

Outline

HIGHLIGHT KEY:CASE NAMERULE YOU FIGURED OUT ON YOUR OWNSANT’AMBROGIO’S RULE

Exam Analysis1. What does my client want?

a. Who are the actors here?2. Classify the agency action

a. Adjudicationi. Formal or informal

b. Rulemakingi. Formal or informal

3. Identify any statutory limitations on that type of actiona. APA Requirements, Organic Statute, etc.

4. Are there any constitutional limitations?a. Due Process for adjudication/RM?

5. What’s the nature of the challenge?a. Legal/Interpretative?b. Factual determination?c. Penalty/Discretionary?d. Policy?

6. Apply the right standard of reviewa. Question of fact – substantial evidence

i. Universal Camerab. Question of law/Mixed question of law

i. Agency interpreting its own regulation: Auer, unless undue surprise (Christopher)

ii. Interpreting a statute the agency is charged with administering: Chevron1. Chevron Step 0: Mead – Congressional Intent

a. Christensen – interpretive documentb. Mead safe harbor?

2. Chevron Step 1: whether the precise question has been answered by Congress

a. Consider nondelegation doctrineb. Use statutory interpretation

3. Chevron Step 2: deference parta. Generally, if you get this far, win if agency.

4. If fail at Chevron à Skidmore deference?a. Skidmore is power to persuade and circumstances

indicating that deference is duec. Question of policy: Hard Look Doctrine

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i. Is the action reviewable?

INTRODUCTIONWhat is Administrative Law?

Administrative law is the body of law and principles governing:o How government agencies regulate American economic, social, and political life;

ando How the legislature, the executive, the courts, and private citizens control

(regulate) government agencies. Agencies are the primary sources of federal law

o Virtually every activity has an administrative or regulatory overlayo Virtually every activity that has an agency involved has a lawyer involved

Sources of Federal Law U.S. Constitution à Statutes à Regulations U.S. Constitution = 1 Constitution, 27 Amendments Statutes = 220 by the 112th Congress Regulations = 7,515 in 2011-2012

o And thousands of “orders” issued by the largest adjudicatory system in the worldWhat is an agency?

“Each authority of the Government of the United States, whether or not it is within or subject to review by another agency.”

o APA § 551 None of the constitutionally granted offices/departments are agencies Doesn’t include president, courts, government of territories or states, or Congress

Values that Administrative Law seeks to achieve: Democratic values:

o Transparencyo Accountability

Procedural Fairness and Participatory Valueso Consistencyo Rationality and non-arbitrarinesso Non-partisano Public access, participation, and the right to be heard

Technocratic valueso Efficiencyo Accuracyo Rationalityo Non-partisano Professionalism

Independent Executive Agency: part of the executive; serve at the will of the president and the head is one person.Independent Regulatory Commission: headed by a committee; appointed by the president in staggered terms that are longer than the president’s term and the membership is split between the parties.

New appointees are confirmed by the Senate

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The president can only remove his appointees for cause More subservient to Congress than to the president because the president’s power over

the appointee is limited.**Admin Law seeks to ensure that agency discretion does not result in abusive exercise of administrative power while at the same time permitting agencies to efficiently and effectively exercise authority delegated to them by the legislature.**

AGENCY PROCEDURESDo you have a right to a hearing?

DUE PROCESSDo you have a constitutional right to a hearing?

Idea that the government must act fairly before depriving individuals of life, liberty, or property. Usually by providing notice of the deprivation and some kind of hearing in which it can be

contested.Due Process Clause (5A & 14A) applies equally to federal and state agencies.

5A: “No person shall . . .be deprived of life, liberty, or property without due process of law.”

**Relatively few procedural disputes are resolved by the DPC. Normally done via interpretation of statutes.

DPC still important because:o Courts will interpret ambiguous statutory provisions to harmonize provisions of

statutes with what’s required by the constitutiono Congress selects procedural requirements based in part on its understanding of

what is required by the DPCo Agencies act in the shadow of the DPC when they bind themselves with

procedural rules.Claim for procedural due process: a claim that the government cannot take a right away without giving adequate process first (hearing, notice, etc.)

Procedural due process applies only in adjudicationso See Bi-Metallic and Londonero Must do separate inquiry to determine whether there is rulemaking or adjudication

for purposes of the APA.Goldberg v. Kelly – “grievous loss” and “brutal need” = liberty/property interest for purposes of DPC

Facts: Welfare case – plaintiff’s claim is that she wanted hearing before termination of her benefits. Oral hearing happened only after welfare benefits were terminated. Would receive retroactive benefits if it were found that benefits were improperly taken away.

Holding: post-termination hearing insufficient – DPC requires hearing before welfare rights have been terminated.

o The DPC applies to termination of welfare benefits. According to Goldberg court: Defendants conceded that it applies Welfare benefits are a statutory entitlement for those who are eligible to

receive them The termination of welfare benefits is a “grievous loss” for the recipients.

o How much process does DPC require?

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“the fundamental requisite of the DPC is the opportunity to be heard at a meaningful time and in a meaningful manner.”

o “opportunity to be heard must be tailored to the capacities of those who want to be heard.”

o Process “sticks” that DP required in this case: Notice, including a statement of reasons for termination, factual and legal

basis (7-day notice okay) Chance to present evidence and make oral presentation to decisionmaker Confrontation of adverse witnesses Right to retain an attorney A decision on the record, with reasons Impartial decisionmaker

o Function of hearing: to prevent erroneous termination; interests of parties (person & government) weighed

o “minimum procedural safeguards, adapted to the particular characteristics of welfare recipients, and to the limited nature of the controversies to be resolved.”

Rule: Goldberg only applies if the recipient has a “brutal need” AND it is a government-offered benefit.

Costs of increased proceduralization of these hearings: process rights cost money – every time you add process rights, you add obligation of government and more money you have to spend on procedural rights.

**Due Process under Goldberg How much process do you get? Process depends on:

o The weight of interests of the party adversely affected o The weight of interests of the governmento The capacity and characteristics of the parties and the nature of the controversy à

is there a reason that an in-person hearing is needed as opposed to purely written presentation?

o What is the function of the hearing? The process should be tailored to the function and purpose of this

particular hearing.

Bd. Of Regents v. Roth – life/liberty/property Facts: plaintiff didn’t have tenure but had one-year contract with university. His contract

was not renewed, wasn’t given reason why. Plaintiff claimed he was retaliated against for something he said and wanted hearing before contract was terminated.

Holding: no liberty deprivation here.o Need more than a unilateral expectation and entitlement must be grounded in

mutual understanding.o No damage to reputation here – no reason why he can’t apply to other universities o Would be too broad if person could bring DP Lib & Prop claim just because they

were not rehired in a particular gov’t job, but were free to find another. Rule: Separate the inquiry for liberty and property; requires multiple understandings from

an independent sourceo Liberty : “not merely freedom from bodily restraint but also the right of the

individual to contract, to engage in any of the common occupations of life, to

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acquire useful knowledge, to marry, establish a home and bring up children, to worship god according to the dictates of his own conscience, and generally to enjoy those privileges long recognized . . . as essential to the orderly pursuit of happiness by free men.”

o Property : Property interests don’t come from the Constitution – they come from existing rules and must come from independent source.

Need more than abstract need, desire, or unilateral expectation for it – need an entitlement to the interest that is grounded in existing rules.

If there’s discretion in statute = not entitled. Roth wasn’t tenured, nor terminated in the middle of his contract, received

proper notice of the non-renewal by the proper date, and wasn’t entitled to reasons for non-renewal or to hearing (univ. regulations) Compare with Sindermann

**the 14A’s procedural protection of property is a safeguard of the security of interests that a person has already acquired in specific benefits

Perry v. Sindermann – “mutually explicit understandings” Facts: professor employed at college for four successive years under series of one-year

appointments; co-head of his dept. Contract not renewed in fifth year. Claim that 1A right was violated because of press release that said he was fired for insubordination – not given official hearing.

Holding: Since college did not have official tenure system, but did have de facto system, and the assumption on the facts is that he will be renewed, there is a procedural due process requirement.

o Faculty guide = teacher tenure provision; creates property interest in re-employment.

o **strong reliance interest on implied contract Rule: property interest exists when there are such rules or mutually explicit

understandings that support his claims of entitlement to the benefit and that he may invoke a hearing.

o Entitlement theoryo Explicit contractual provisions may be supplemented by other agreements implied

from the “promisor’s words and conduct in the light of the surrounding circumstances.”

Cleveland Bd of Education v. Loudermill – post-termination hearing to challenge a discharge Facts: Plaintiff employed by defendant and was a classified civil servant. Defendant

found out plaintiff had been convicted of felony and terminated him for dishonesty without pre-termination hearing. Plaintiff appealed and post-termination hearing held

Holding: Before employee may be terminated, a limited pre-termination opportunity must be given in addition to more elaborate post-termination opportunity to challenge the termination.

o Balance the relevant interests according to Matthews v. Eldridge: Employee’s private interest in retaining employment Gov’t interest in removing unsatisfactory employees and avoiding

administrative burdens

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Risk that employee will be erroneously dischargedo The state statute which provided both plaintiff with civil service protections

created a property interest. Rule: DPC requires a limited pre-termination hearing before discharge of an employee

who has constitutionally protected property interest in his employment, followed by a more elaborate post-termination hearing to challenge the discharge.

o Pre-termination proceeding doesn’t have to be extensive – just an oral or written notice of proposed employment action with an explanation of employer’s evidence, plus opportunity to present, orally or in writing, the employee’s side of the story and reasons why the employment action should not be taken.

Rule (Sant’Ambrogio): the legislature cannot legislate around the DPC. The definition of the right/interest at stake is separate from what process applies.

o Employees must take the “bitter with the sweet” – Rehnquisto Once it is determined that due process applies, the question becomes how much

due process do you get. **Stigma: can only amount to a liberty violation if there is stigmatization of the party’s

reputation PLUS some other change of right or status recognized by lawo Ex: sex offender list

Big Picture: If a court determines that government action has deprived someone of their liberty or property interest, thus triggering DP protection, it must decide next what process is due.

Matthews v. Eldridge – if protected interest is at stake – 3-part balancing test to determine what process is due

Facts: disability benefits under SSA – state agency concludes that plaintiff is no longer is eligible (after 4 years) for benefits and is terminated. Plaintiff wants pre-termination hearing.

Holding: Balancing test applied:o Plaintiff can seek other sources of income – important distinction here because

eligibility is not based on financial need for disabilityo Plaintiff is medically capable of working based on his medical records, which

aren’t biasedo Distinction here is that there is a lot of process already afforded no, so maybe the

cost of additional process isn’t worth it. o Another distinction: distinct from Goldberg in that termination of disability

benefits will not necessarily be deprived of means. Draws a line between the kinds of benefits.

Rule: Three-Part Balancing Test of 1) the private interest; 2a) the risk of error, and 2b) the probable value of additional safeguards in preventing error; and 3) the government or public interest

o 2) the risk of error under current process/probative value of new process – consider what a) is relevant and b) are the facts

Balance on whether the procedures requested would be valuable in assessing the claims.

Also consider the function of hearing and capacities and circumstances of the parties.

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o 3) consider how much this is going to cost the government Benefits paid while process is taking place; process costs of hearings,

lawyers, judge, etc. Cost of protection of people who are rightfully receiving benefits vs. cost

of maintaining benefits Rule (Sant’Ambrogio): Due process considerations:

o (1) The private interest that will be affected by the official action; Degree and length of potential deprivation, etc.

o (2) The risk of an erroneous deprivation of such interest through the procedures used and the value, if any, of additional or substitute procedural safeguards;

Burden of giving additional process, likelihood of avoiding error, capacity of parties, is credibility at issue, does a written presentation suffice?

o (3) The government’s interest, including the function involved and the fiscal and administrative burdens that the additional or substitute procedural requirement would entail.

**court has been hesitant to impose pre-termination hearing requirements on the gov’t since Matthews à must be Goldberg-like facts.

Ingraham v. Wright – well-established common-law tort remedy provides for adequate process where court finds low risk of error and additional process is so burdensome that it would make the deprivation impractical.

Due Process and the War on TerrorHamdi v. Rumsfeld – U.S. citizen enemy combatants must be given meaningful opportunity to contest detention

Facts: after 9/11, defendant was seized and interrogated in Afghanistan, labeled an enemy combatant, and held indefinitely without formal charges or proceedings.

Holding: U.S. citizen accused of being enemy combatant must be afforded opportunity to be heard by neutral decision maker.

o Balancing test: defendant’s interest in being free from involuntary detention weighed against gov’t interest in ensuring that those who have fought with enemy in armed conflict don’t return.

o Defendant therefore denied due process and is entitled to hearing that contains protections of Constitution.

Rule: A citizen-detainee seeking to challenge his classification as an enemy combatant must receive notice of factual basis for his classification and a fair opportunity to rebut the gov’t factual assertions before a neutral decisionmaker.

**In Obama Administration’s internal Executive Branch process, a person is put on drone hit list when:

Imminent threat of violent attack Capture is not feasible Killing consistent with the laws of war

Rulemaking vs. Adjudication Rulemaking : APA § 553 – action with the force of law that affects groups of people

prospectively

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o Agency doing something like legislation where agency ends up with a rule or regulation

o Advantages over adjudication; Participation by all affected parties Appropriate procedure: trials and trial records good for establishing

individualized facts, but not particularly suitable for determining broad questions of legislative fact and for ventilating important issues of policy

Retroactivity: rules normally apply prospectively only, thus providing fair warning to those whose conduct is affected

Uniformity Political input Agency agenda setting Definitiveness Accessibility Oversight

o Rulemaking ossification: ossification is a problem only with respect to major rules predicated on assumptions concerning complicated factual and scientific relationships.

Agencies continue to issue hundred of rules annually in other contexts expeditiously and at a relatively low cost

o Rulemaking authority: a general rulemaking clause in most statutes authorizing agency to make rules and regulations for the purpose of carrying out the provisions of this Act

Dominant rule in federal system: rulemaking clauses should be construed generously

Adjudication : APA § 554 – action with the force of law that binds only particular parties and is often retrospective

o Looks a lot like a court deciding a case – result is an order. Submit facts/arguments at a hearing

o Advantages over rulemaking: Flexibility New and unexpected (case by case approach) Resource savings Resolution of disagreements Residual adjudication

Formal Adjudication/Rulemaking : ALJ, formal presentation of evidence, presiding employee can administer oaths, give subpoenas.

o ALJ makes decision based on the record, hearsay evidence is fully admissible in agency adjudications

o § 554, 556, 557

Londoner v. Denver – test for adjudication Facts: imposition of a tax by an agency in Colorado – passed cost of paving street onto

taxpayers who own the land, and those landowners didn’t have chance to respond before tax imposed (closed-door session, agency didn’t allow landowners to be there or respond)

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Holding: different than law being passed by legislature because specific and affects the landowner, looks like adjudication à right to hearing

o If state legislature had passed tax bill, different story Rule: test for adjudication – backward-looking and concrete/specific to particular

people/entitieso Fewer people and less of an imposition on the agency = need for hearing greater

because more unfairness; proper remedy is a hearing. Voting not a powerful political remedy When agency standing in court, need for process is higher because it only

applies to specific people and harder to have political remedy because fewer people are affected

When you have specific/particularized group = seems reasonable to give them chance to speak up & no other political remedy.

Rule (Sant’Ambrogio): factors to consider if adjudication:o Small number of people, or all residents being affectedo Exceptional and unique injury (general tax rate vs. different rates for each)o Was the decision made on the basis of individual grounds and facts? (those

particularly within the knowledge of the party) Can be key to getting hearing; usually decisive factor.

Bi-Metallic v. State Board of Equalization – test for rulemaking Facts: both cases about imposition of tax by agency in Colorado – here, tax is 40%

increase for all property owners in Denver. Holding: not entitled to hearing – too many people

o Distinguished from Londoner – whether decision relies primarily on legislative facts or adjudicative facts. Legislative facts generally don’t require a hearing for regulatory body to make decision, but individual nature of adjudicative facts might.

Rule: test for rule-making – general, abstract, forward-lookingo Bigger party/group of people, so most effective means of change or hearing is a

vote to change leadership.o When legislating, stands in place of legislature, doesn’t have to give a lot of

process because assuming remedy here is political remedy, so make change by voting

o Burden greater on legislature to give all hearing. Voting is the only proper remedy Rule (Sant’Ambrogio):

o Legislative facts : don’t describe individuals, but are general facts that help gov’t decide questions of law, policy, and discretion. Decision is being made on basis of broad fact and the individualized information not as relevant to the choice/objective sought to be accomplished.

o Adjudicative facts : those concerning a particular party and frequently concern questions of who did what/why did they do it.

Facts of individual parties relevant to decision-maker’s choice because decision being made on basis of specific individualized facts.

Anaconda Co. v. Ruckelhaus – when does APA require an adjudicatory hearing?

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Facts: plaintiff is company that sought relief against EPA for promulgation of proposed rule controlling emissions of sulfur oxide in MO until official conducted adjudicatory hearing and until it promulgated an environmental impact statement

Holding: no violation of plaintiff’s right to procedural due processo Congressional requirement of public hearing was satisfied – notice was given,

proposed regulation was issuedo Plaintiff appeared at the hearing, submitted material, and was given an

opportunity to submit more material and information for a period of 75 days following the public hearing.

Rule: the APA requires there to be an adjudicatory hearing only if the agency statute specifies that the particular rule-making hearings be on the record after an opportunity for an agency hearing.

DUE PROCESS ANALYSIS (SUMMARY)1. Does DPC apply?

a. Is there a government action,b. Made on particular and individualized groundsc. And deprives a party of:

i. Lifeii. Liberty (Constitution, Roth, Sindermann)

iii. Property (positive law) (Statutes, common law)2. How much process is due? Mathews v. Eldridge balancing test:

a. Private interest affectedb. Risk of error/probable value of additional processc. Government interest (including cost of more process)

ADMINISTRATIVE ADJUDICATIONDo you have a statutory right to a hearing?

Political vs. adjudicative decision-making Political decision-making:

o Input by interest groupso Transparent and democratically accountableo Polycentric – not zero-sum – compromises of competing values

Adjudicative decision-makingo Neutral as to outcomeo Bi-polar choice – zero sumo Application of law to facts

Rulemaking AdjudicationInformal Creating, amending, or

repealing rule after notice and opportunity for comment§§ 551; 553

Agency decision resulting in order§ 551

Formal Creating, amending, or repealing rule based on record developed in trial-like hearing

Agency decision resulting in order after trial-like hearing§§ 554; 556; 557

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§§ 551; 553; 556; 557

Dominion Energy Brayton Point, LLC v. Johnson – deferment to federal agency’s interpretation Facts: defendant EPA issued permits under CWA, which authorized plaintiff to use

cooling system. Plaintiff applied to renew permit, defendant issued proposed final permit rejecting plaintiff’s requested thermal variance; EPA then issued final rule eliminating formal evidentiary hearings from permitting process

Holding: EPA’s reasonable interpretation of CWA’s public-hearing requirement trumps prior case law offering different construction of the same ambiguous statutory provisions

o CWA requires EPA to offer opportunity for public hearing before issuing permit or authorizing thermal variance but does not define “public hearing”

o Under Chevron deference, EPA concluded in absence of clear congressional intent/statutory language requiring EPA to hold formal evidentiary hearings for permit review à informal hearings sufficient & don’t violate DPC

Rule: Courts must defer to agency’s reasonable interpretation of a statutory public-hearing requirement, even if the agency’s interpretation is inconsistent with prior case law construing the statutory language in the absence of a clear expression of congressional intent

o Formal adjudicatory procedures required under statutes that call only for a “hearing” or a “public hearing”

When statute calls for “hearing” or a “public hearing,” but doesn’t use “on the record,” formal procedures aren’t triggered by requirement that agency act “after hearing.”

Courts must therefore defer to reasonable agency interpretations of ambiguous words like “hearing” or “public hearing” in the agency’s statute

o Chevron doesn’t apply to agency’s interpretation of the APAo Deferring to agencies is best because agencies are the ones doing the work and are

in best position to determine when there should be a formal adjudication

Must an agency provide an adjudicatory hearing prescribed by statute if the agency has already addressed the issue in a rule?

Heckler v. Campbell – agency can resolve issue by adopting rule; displace individual’s statutory right to evidentiary hearing on that issue.

Facts: Plaintiff applied for disability benefits. Application was denied, she requested hearing before ALJ. ALJ determined her back injury not severe enough to render her disabled, relying on medical-vocational guidelines issued by HHS and determined a significant number of jobs existed that she could perform; thus, she wasn’t disabled

Holding: ALJ made individual determination as to plaintiff’s individual abilities and was thus appropriate for ALJ to rely on guidelines to determine that there were jobs in the national economy that claimant could perform.

o The determination of whether certain jobs exist in the national economy is an appropriate issue for rulemaking; not an issue that is unique to each claimant

o Language of the SSA and its legislative history demonstrates that Congress intended to permit HHS to issue regulations determining whether certain occupations existed in the national economy.

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Although Act provides for individualized hearings based on evidence adduced at the hearing, it doesn’t bar HHS from utilizing rulemaking.

o Opportunity to rebut the validity of the guidelines was during rulemaking process Rule: An agency can resolve an issue by adopting a rule and can thereby displace an

individual’s statutory right to an evidentiary hearing on that issue. o Effect of a rule differs from effect of official notice: an official notice can be used

to meet agency’s burden of proof in an adjudicatory proceeding, but opposing party has right to offer a rebuttal

o Valid rule is conclusive; no right to rebut it.o Issues suitable for rulemaking: issues that do not require case-by-case

determinationo Otherwise, agency would have to waste time/resources relitigating issues that

could be resolved in a single rulemaking proceeding

Who considers evidence?Morgan v. United States (Morgan I) – who considers the evidence in a full hearing?

Facts: Defendant US Secretary of Agriculture issued order fixing max rates to be charged by market agencies for buying and selling of livestock. Plaintiffs livestock traders challenged order alleging deprivation of due process because Secretary didn’t personally consider evidence presented at administrative hearing/oral arguments/briefs

Rule: a plaintiff is not given a full hearing unless the decider of facts personally considers the evidence.

o Hearing ensures trier of fact makes decisions based solely on the evidence and not on extraneous considerations; full hearing requires taking/weighing of evidence by person making determinations of fact.

o Insufficient that such determinations happen to be supported by the evidence if they are made without actual review of the evidence.

o Person making decision “must consider and appraise the evidence” that justifies the decision

Can’t take this literally, so: Agency head can delegate power to make final decisions Person who conducts hearing & hears evidence decides case; final

unless dep’t head decides to consider an appeal Decisions of hearing officers could be appealed to an intermediate

review board within the agency Agency head might consider only a highly condensed summary of

evidence/arguments prepared by law clerks or other employees Statutes generally require admin judge to prepare proposed decision

disclosed to parties before final decisiono Decisionmaker can’t rely on factual information not in the record.

Separation of functions à APA § 554(d)o Employee who presides at the reception of evidence pursuant to § 556 shall make

recommended or initial decision required by § 557o Employee who presides at the reception of evidence may not:

Consult w/ party or person on fact in issue ex parte

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Be responsible, supervised or directed by, agency’s investigation or prosecution folks.

o Employee engaged in investigation/prosecution of case may not in that or factually related case participate or advise in the decision or recommended decision pursuant to § 557

o BUT “this subsection does not apply to: (A) applications for initial licenses; (B) proceedings involving the validity or application of rates, facilities, or

practices of public utilities or carriers; or (C) agency or a member or members of the body comprising the agency.”

Ex-Parte Communications – also refer to flowchartPATCO v. FLRA – ex parte communications

Facts: union for air traffic controllers called nationwide strike against FAA. FLRA issued complaint of unfair labor practices against union, sought revocation of union’s certifications. FLRA heard briefs/arguments on ALJ’s recommendation to revoke certification after hearing before ALJ, then revoked union’s status

Holding: Act requires that FLRA unfair labor practice hearings be conducted in accordance with APA to extent practicable

o § 557(d) prohibits ex parte communications to or from interest parties in formal agency adjudications

o Disclosure of ex parte communications important to prevent appearance of impropriety and to ensure fair decision-making

Rule: When determining whether agency decision is voidable due to ex parte communications, the court must analyze whether, as a result of the ex parte communications, the agency’s decision-making process was irrevocably tainted so as to make the ultimate judgment of the agency unfair, either to an innocent party or to the public interest that the agency is obligated to protect.

o Courts may consider relevant factors, such as: The gravity of the ex parte communications; Whether the contacts may have influenced the agency’s ultimate decision; Whether the party making the improper contacts benefited from the

agency’s ultimate decision; Whether the contents of the communications were unknown to opposing

parties; and Whether vacation of the agency’s decision and remand for new

proceedings would serve a useful purpose.o Administrative remedies for improper ex parte communications:

Violating party discloses communication and its content; and Violating party shows cause as to why his claim/interest in proceeding

should not be dismissed, disregarded, or otherwise adversely affected on account of the violation

o Ex parte communications: While a contested case is pending, the presiding officer and final decision-maker may not make to or receive from any person any communication concerning the case without notice and opportunity for all parties to participate in the communication

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Rule: absent a strong showing to the contrary, an agency adjudicator is presumed to act in good faith and to be capable of ignoring consideration not on the record.

o Private contacts with agency officials, with respect to pending adjudicatory matters, by interested parties or their agents, that endeavor to affect the decisional process, however subtle such contact may be, are corrupt endeavors to influence the “due and proper administration of the law” and those who so attempt may be indicted.

Portland Audubon v. Endangered Species – the president is an interested party for the purposes of ex parte communications

Ex parte communications are also prohibited by § 557(d) between outsiders and advisers to decisionmakers

Pillsbury Co. v. FTC – adjudication and legislative pressure Facts: plaintiff’s acquisition of two competing baking-product companies resulted in

complaint filed with FTC, alleging violation of Clayton Act, which FTC dismissed after finding insufficient evidence, but reversed after appeal. While parties were producing evidence, Congressional subcommittees held hearings where FTC chair/general counsel testified at hearings and specifically mentioned plaintiff more than 100 times in hearing transcripts. FTC later issued order directing plaintiff to sell assets of acquired companies.

Rule: in proceedings that are “judicial or quasi-judicial,” an agency may not issue adjudicatory order if agency’s decision-making is influenced by forceful input from Congress. The order will violate the procedural due process rights of the parties litigating the matter

o Congress may urge agency to take particular approach to resolve disputes that agency is charged with resolving; input on matter must not unduly influence agency’s adjudicatory process.

o Limited to more or less decisions reached in evidentiary hearings **distinguished from Sierra Club v. Costle because ex parte communications are allowed

in rulemaking.

Dept of Alcoholic Beverage Control v. Appeals Board – separation of functions and internal agency communications

Rule: when agency is unitary administrative agency that combines prosecutorial and adjudicative functions in resolving administrative matters:

o APA does not permit ex parte contacts between the Dept’s prosecutor and its ultimate decisionmaker or his advisors about the substance of the case, prior to the decisionmaker rendering a final decision

o While agencies had considerable leeway in how they structured their adjudicatory functions, could not disregard certain basic precepts – one fairness principle directed that in adjudicative matters, one adversary should not be permitted to bend the ear of the decision maker in private.

Another principle directed that the functions of prosecution and adjudication be kept separate, carried out by distinct individuals

Holding: court rejected Dept’s argument that limits on ex parte communications extended only to communications during the trial stage, not to those during the decision stage.

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Consumer Advocate Division v. TN Regulatory Authority – rate making orders Facts: agency approved rate increase for gas company; Consumer Advocate Division

sought review of rate making order Holding: TRA permitted under statute to direct contested case proceedings to a hearing

examinero TRA didn’t violate statute = no evidence that hearing examiner had served as

investigator, prosecutor, or advocate in same proceedingo Hearing examiner permitted to rely upon TRA staff ex parte; staff permitted to

make recommendations or suggestions to merits of TRA; no evidence of a prejudicial ex parte communications; rates lawfully put in effect & not retroactive

o Statute permitted introduction of certain hearsay evidence; gas company permitted to recover for advertising; evidence supported TRA’s findings as to gas company’s rate of return on long-term incentive plan

o No evidence that rate design was inequitable Rule: § 554(d) prohibits staff members in adversarial group from serving as adjudicators

or from advising the adjudicators off the record.o Disables ALJ (but not other agency decisionmakers like intermediate review

boards or agency heads) from receiving ex parte advice on factual issues from any agency staff member (whether or not they have been adversaries in the case)

o Principle of necessity: a biased or otherwise disqualified judge can decide a case if there is no legally possible substitute decision-maker

**The ex parte communication ban does not prevent decision-makers from utilizing the staff of the agency, so long as that staff is not involved in the investigation or prosecution, OR if the communication is strictly about law and remedies, not the actual merits of the case.

Courts cannot compel agencies to adopt rules.Ship Creek Hydraulic Syndicate v. State – can courts impose procedural rules as matter of common law?

Facts: landowner’s property was condemned; landowner challenged taking. Court affirmed trial court’s decision; announced new rule to be applied prospectively. Dept of Transportation subsequently required to file decisional documents that adequately reflected facts & premises on which decision was based in all condemnation cases.

Holding: landowner was not entitled to application of new rule because requiring DOT to prepare a decisional document would not have served a useful purpose given that the document would inevitably have been affected by the parties’ arguments before the court.

Rule: Federal courts are precluded from imposing procedural rules on agencies as a matter of administrative common law.

o If a statute required reasoned decisions and the legislature did not expressly or by implication limit judicial authority to decide how to review administrative action, the court could and should require agencies to explain their decisions.

o Distinguishes Vermont Yankee by showing that a court cannot impose requirements for rulemaking procedures outside of those specified in the APA in order to improve decision-making or facilitate judicial review.

o Dumbed-Down rule: courts cannot make agencies adopt new procedural rules.

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DHS v. Board of Regents – can’t assert that law compels an action and avoid judicial review Facts: DACA – Trump’s administration sought to rescind DACA. Plaintiffs DACA

recipients challenged rescission as arbitrary and capricious; violative of substantive due process & equal protection

Holding: Judicial review applies here. Executive branch has discretion to rescind DACA, but not on illegality grounds. Rescinding based on erroneous legal interpretation was arbitrary and capricious; claim of unlawfulness likely to succeed.

o Due process – DHS published DACA FAQs specifying it conferred no substantive rights; deferred action and renewals at any time, even if recipients qualified.

Belief and reliance on gov’t benefit doesn’t create protected property interest absent gov’t agreement.

o Abandoning crucial information sharing assurances to deport applicants sufficiently offends notions of fair play and decency to violate substantive due process.

o History of animus reflected in statements of Trump shows discriminatory intent – revoking DACA three months after DHS reaffirmance suggests decision bypassed DHS consideration altogether; reason given for rescission was merely pretextual.

Rule: Government cannot simultaneously assert that the law compels an action and avoid review by the judicial branch, whose duty is interpreting the law.

o Where does reviewing court look for agency’s explanation of its action? (1) the grounds invoked when the agency took the action (2) if the explanation is inadequate, the court may remand for a fuller

explanation of reasoning at the time of agency action (3) the agency may elaborate on prior reasons or take a new action with a

new set of reasons Post-hoc rationalization – an explanation for a decision after the decision was taken that

did not, in fact, motivate the decisiono Undermines transparency and accountability for agency decisiono Creates moving target for parties and the courts

Formal Hearings, Generally: governed by § 556 Every interested party gets to present at an oral hearing – formal taking of evidence

o § 556(c) – person presiding can: administer oaths/affirmations, issue subpoenas, determine what evidence is relevant, take depositions, oversee hearing, hold settlement conferences, require conferences, inform parties of/encourage their use of various methods of ADR, dispose of procedural requests, make/recommend substantive decisions

Presided over by ALJ Parties entitled to cross-examination

*no cross-examination required for rate-setting, if no party would be prejudiced from disallowing cross-examination

o § 557 – applies when hearing required by § 556 (formal rulemaking/adjudication) Findings/conclusions Reasons/basis for its findings and conclusions on all material issues of fact

and law; and

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The appropriate rule, order, sanction, relief, or denial thereofFormal Adjudications

§ 554 governs adjudications generallyo (a) applies only when in formal adjudication

Formal adjudications good because:o Want record for backward-looking inquiry so judges know what facts are being

usedo Fact distinctions

Adjudicative fact – who, what, when, where, why – case-specific Legislative fact – generalized fact about the world – forward-looking,

policy-making fact § 556(d) – three instances in which the agency may provide for submission of all/part of

evidence in written form during formal hearings (if no prejudice to parties and allow for written submissions)

o Rule-makingo Determining claims for money or benefitso Application for initial licenses

Ex parte communications Ex parte communications with outside agency à APA § 557(d)(1)

o (A) no interested person outside the agency may make an ex parte communication relevant to the merits of the proceeding to those involved in decision-making

o (B) those involved in decision-making cannot make ex parte communications to interested party outside agency

o (C) must place ex parte communications in recordo (D) show cause why proceeding should not be dismissedo (E) prohibition starts at notice of hearing unless knows hearing will occur earlier.

§ 557(d)(1) prohibits, in formal adjudication:o 1) ex parte communications 2) relevant to the merits of the proceeding 3) between

interests person outside of the agency and 4) agency, ALJ, or other employee who is or may reasonably be expected to be involved in the decision process of the proceeding

Ex parte communications within agency à APA § 554(d) (see Morgan I).

APA § 554:(d) The employee who presides at the reception of evidence pursuant to section 556 of this title ... may not—

(1) consult a person or party on a fact in issue, unless on notice and opportunity for all parties to participate; or(2) be responsible to or subject to the supervision or direction of an employee or agent engaged in the performance of investigative or prosecuting functions for an agency. An employee or agent engaged in the performance of investigative or prosecuting functions for an agency in a case may not, in that or a factually related case, participate or advise in the decision, recommended decision, or agency review pursuant to section 557 of this title ..... This subsection does not apply—

(A) in determining applications for initial licenses;

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(B) to proceedings involving the validity or application of rates, facilities, or practices of public utilities or carriers; or(C) to the agency or a member or members of the body comprising the agency.

APA § 557(d)(1):In “formal adjudication”

(A) no interested person outside the agency shall make or knowingly cause to be made to any member of the body comprising the agency, administrative law judge, or other employee who is or may reasonably be expected to be involved in the decisional process of the proceeding, an ex parte communication relevant to the merits of the proceeding;(B) no member of the body comprising the agency, administrative law judge, or other employee who is or may reasonably be expected to be involved in the decisional process of the proceeding, shall make or knowingly cause to be made to any interested person outside the agency an ex parte communication relevant to the merits of the proceeding(C) a member of the body comprising the agency, administrative law judge, or other employee who is or may reasonably be expected to be involved in the decisional process of such proceeding who receives, or who makes or knowingly causes to be made, a communication prohibited by this subsection shall place on the public record of the proceeding:

(i) all such written communications;(ii) memoranda stating the substance of all such oral communications; and(iii) all written responses, and memoranda stating the substance of all oral responses, to the materials described in clauses (i) and (ii) of this subparagraph;

(D) upon receipt of a communication knowingly made or knowingly caused to be made by a party in violation of this subsection, the agency, administrative law judge, or other employee presiding at the hearing may, to the extent consistent with the interests of justice and the policy of the underlying statutes, require the party to show cause why his claim or interest in the proceeding should not be dismissed, denied, disregarded, or otherwise adversely affected on account of such violation

RULEMAKING PROCEDURESDefinition of Rule: APA defines term “rule” to which their rulemaking procedure applies

§ 554(4) defines ratemaking as rulemaking for all purposes Legislative rules and guidance documents:

o Legislative rules are rules issued by an agency pursuant to an express/implied grant of authority to issue rules with the binding force of law

o Guidance documents are non-legislative rules or interpretative rules/statements of policy: agency rules that do not have the force of law because they are not based upon delegated authority to issue such rules

Lesser pronouncements – court will conclude that an agency’s pronouncement doesn’t rise to the level of being either a rule or an order.

What are the requirements of § 553 rulemaking? Notice of proposed rulemaking published in federal register; § 553(b), includes:

o Statement of time, place, and nature of proceedingso Reference to legal authority

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o “terms or substance of the proposed rulemaking proceedings” Opportunity for public comment; § 553(c)

o Interested persons may submit written data, views, or arguments with or without opportunity for oral presentation.

Final rule; § 553(c)o “concise general statement of their basis and purpose”o Changes in the original plan “are in character with the original scheme,” and the

final rule is a “logical outgrowth” of the notice and comments already given. (Chocolate Mfrs Ass’n)

o Cannot “substantially depart from the terms or substance of the proposed rule.” (Chocolate Mfrs. Ass’n)

o Recall that § 553(b) only requires notice of proposed rulemaking to include the “terms or substance of the proposed rulemaking proceedings.”

Initiating Rulemaking ProceduresNotice and Comment Rulemaking

Chocolate Mfrs. Ass’n v. Block – giving notice of proposed rule Facts: USDA proposed max sugar content for WIC and published preamble along with

proposed rule, where it discussed problems associated with high sugar foods; didn’t discuss flavored milk. In response to public comments, USDA’s final rule deleted flavored milk. Plaintiff argued USDA didn’t provide notice that disallowance of flavored milk would be considered.

Holding: final rule not logical outgrowth of original rule proposed by USDA and therefore proposed rulemaking didn’t provide adequate notice that elimination of flavored milk would be considered in rulemaking procedure

o Proposed rule specifically authorized flavored milk; published notice didn’t mention high sugar content in flavored milk

Rule: APA requires that notice of proposed rulemaking in federal register contain either terms/substance of proposed rule or description of the subjects/issues involved.

o Notice of a change in proposed rule after comments is adequate where the changes in the original plan are in character with original scheme and final rule is logical outgrowth of the notice and comments already given.

o Logical outgrowth test: applying test without reference to comments responding to original notice dramatically restricts the ability of agencies to make changes between notice and rule without providing second notice and conducting an additional period of comment

APA § 553(b)(3): “either the terms or substance of the proposed rule or a description of the subjects and issues involved” must be disclosed

o Notice of proposed rulemaking – placed in federal register; statement about time/place of rulemaking, terms/substance of proposed rule; or description of information involved

o Comment period (usually 60 days) – interested parties should be able to share their views by submission of written views, facts, or argument

o Statement of basis and purpose (published in CFR and Federal Register) – concise and general statement on basis and purpose

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Rule (Sant’Ambrogio): The final rule cannot be contrary to the original purpose of the proposal. So long as the changes to the final rule are of a character within the original scheme, and the final rule is a logical outgrowth of the notice and comment proposal à valid.

o The proposed rule must provide reasonable notice of the scope and applicability of the rule, along with its purpose, so that all interested parties have a fair opportunity to contribute meaningfully to rulemaking.

Formal Rulemaking United States v. Florida East Coast Railway – formal rulemaking

Facts: Interstate Commerce Commission had power to regulate railroad rates; used to be common practice in RR industry to rent cars from competing RRs when it was quickest way to get shipments from one place to another. ICC had authority to set reasonable rules/rates for car rentals. After proposing tentative order establishing rates for incentive payments, ICC determined it would only receive comments in written form; ICC adopted order, plaintiffs challenged. Interstate Commerce Act authorizes ICC to engage in rulemaking only “after hearing,” doesn’t require rulemaking be on the record.

Holding: plaintiffs received type of hearing required by Act even though they were only allowed to present their comments in written form.

o Although Act doesn’t expressly define the term “hearing,” it is clear that statute’s after hearing” language doesn’t necessarily give interested parties the right to present evidence orally, cross-examine witnesses, or present oral argument to the agency decision-maker.

o Act required rulemaking occur after a hearing but doesn’t require rule be made on record; thus, § 553’s procedures apply

Rule: When a statute requires a hearing prior to rulemaking but does not also require that the rule be made on the record, § 553’s procedures apply

o When statute requires that rules be made on the record after opportunity for an agency hearing, APA requires agency to follow procedures set forth in § 556-57.

Vermont Yankee Nuclear Power Corp. v. NRDC – judicially created rulemaking Facts: DC circuit fleshed out § 553 requirements and mandated very fleshed out

statement of basis and purpose; notice requirement; and comment period. NRDC sought review of defendant Atomic Energy Commission’s decision to grant license to defendant Vermont Yankee to operate nuclear power plant and decision to grant license to defendant Consumers Power Corp. Plaintiffs claimed environmental impact statement insufficient and Commission denied meaningful opportunity to participate in rulemaking proceedings because of absence of discover/cross-examination

Holding: Reviewing court generally not allowed to impose additional procedural requirements on administrative agencies’ rulemaking process.

Dumbed-Down Rule: Reviewing courts are generally not allowed to impose additional procedural requirements on administrative agencies' rulemaking processes.

Rule: absent constitutional constraints or extremely compelling circumstances, the administrative agency should be free to fashion their own rules of procedure and pursue methods of inquiry to allow them to do their duties. Procedures are the maximum and minimum obligations courts can impose.

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o APA is ceiling and the floor (compromise). Agencies, Congress, etc can impose more requirements; Courts cannot.

o Courts can’t order an agency to conduct cross-examination/discovery or any other procedures not in § 553 during public comment period.

Rule: agencies cannot adopt a rule that differs significantly from the one initially proposed in the notice. An agency must “re-notice” when the changes are so major that the final rule is not a “logical outgrowth” of the proposed one.

o Logical outgrowth only if parties could have anticipated it and filed information (foreseeability)

Rule: the “concise and general” statement of basis and purpose must respond to every significant comment.

o Significant: if true, requires change. Rule (Sant’Ambrogio): Courts cannot impose additional procedural requirements on

agencies beyond those set forth in APA unless . . . o 1) organic statute requires additional procedureso 2) Constitution (e.g. due process) requires ito 3) extremely compelling circumstances (e.g. unjustified departure from well-

settled agency procedure)**The APA serves as a floor for agencies – additional process doesn’t necessarily improve the record for rulemaking.

United States v. Nova Scotia Food Products Corp. – concise general statement in rulemaking Facts: FDA adopted regulations pursuant to informal notice and comment procedures.

Initial rule did not include scientific data relied on to establish this standard; FDA received comments suggesting alternative to rules, didn’t respond to comments, adopted slightly modified rule. Defendant was found by FDA inspectors to be in violation of these new requirements after adoption of rule.

Holding: FDA didn’t address comments that requirements would render processing of specific kinds of fish commercially infeasible; didn’t address alternative suggested by another federal agency. Therefore, FDA didn’t provide adequate concise general statement.

o FDA’s failure to disclose scientific data relied upon in formulating the rule was procedurally erroneous; regulations invalid as applied to this specific fish.

Rule: an agency promulgating a rule through informal notice and comment rulemaking is required to provide a concise general statement in support of adoption for the rule that identifies the major issues of policy considered by the agency and the rationale for reacting to those issues.

o In its notice, an agency must disclose all relevant data that animated the agency’s thinking

o Notice must do more than just propose subject matter – must provide accurate picture of reasoning that has led agency to proposed rule, including identifying and disclosing technical studies and data the agency has been considering in reaching its proposal.

o If it seems like new data is going to change what the agency is doing, then agency must re-submit notice of proposed rulemaking.

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o Redacting: Agency can redact; but can’t redact parts of report that undercut the decision. Party must show they were prejudiced by the redaction.

o An agency may not leave vital questions completely unanswered in a concise general statement. APA requires an agency to provide concise general statement.

In order to facilitate adequate comment on a proposed rule, agencies are required to provide the scientific data relied on to formulate the rule.

Rule (Sant’Ambrogio): Rule on disclosureo Must disclose pertinent material relied upon in crafting the rule when readily

available (and agency has no special expertise)o When basis of proposed rule is a scientific decision, must disclose scientific

material to interested parties for commento Seems to ground the rule in § 706 (arbitrary and capricious review)

Rule (Sant’Ambrogio): Rule on Statement of Basis and Purposeo Must address “vital questions” raised by comments which are of “cogent

materiality”o Must enable courts to see what “major issues” were ventilated and why agency

reacted to them as it did.o Essentially, concise and general statement requires the agency to discuss why it

followed on course of action over another, support that decision with facts in the record, and to address material comments.

**the reviewing court looks to the administrative record already in existence, not some new record made initially in the reviewing court.

o Affidavits made for litigation insufficient

Ex-Parte Comm. In Rulemaking Home Box Office, Inc. v. FCC – ex parte communications in rulemaking

Facts: defendant FCC proposed restrictions on cable programmers. After comment period, FCC met with many interested parties, attempted to negotiate outcome that all would find acceptable. After final rule adopted, HBO challenged it – argued FCC impermissibly engaged in ex parte communications, including comms that took place after rulemaking record should have been closed.

Holding: Failure of public record to disclose all information made available to FCC prevents court from testing actions of FCC for arbitrariness or inconsistency with agency’s delegated authority

o Even if FCC had disclosed to court the substance of what was discussed ex parte, the court would have had a difficult time judging the accuracy of the FCC’s statements regarding what it knew about TV industry because it wouldn’t have the benefit of adversarial discussion among the parties.

Rule: Generally, ex parte communications received prior to issuance of formal notice of rulemaking don’t need to be placed in a public file.

o If such communications form the basis for an agency action, information regarding these communications must be disclosed to the public in some form.

o Once a notice of a proposed rulemaking has been issued, agency officials and employees reasonably expected to participate in rulemaking proceedings may not discuss matters related to these proceedings ex parte.

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o Should such ex parte communications occur, written documents or summaries of oral communications must immediately be placed in the public file.

Sierra Club v. Costle – do all post-comment communications have to be admitted into the record?

Facts: Defendant EPA adopted a rule. After comment period closed, EPA received almost 300 late comment submissions, which were accepted and entered into docket. In post-comment period, EPA also engaged in ex parte communications with interested parties, legislators, and president’s staff. EPA inadvertently failed to docket one meeting with Senate staff and didn’t docket meeting with WH officials.

Holding: Nothing the CAA prohibits EPA from admitting all post-comment communications into the record; nothing expressly requires the admission of such communications either.

o Given structure and spirit of CAA, documents of central importance upon which EPA intends to rely must be entered on the docket in time for meaningful public comment prior to promulgation, even if this means calling a proceeding for reconsideration.

Rule: if statute explicitly requires that essential information or data upon which a rule is based be docketed, docketing of oral communications may be necessary.

o However, if evidence supports agency’s position that failure to docket a meeting was honest inadvertence = it’s okay

o If statute vests agency with discretion to decide whether documents are of central relevance and must be placed on docket, agency must have discretion in docketing oral communications

o Reasons for barring ex parte communications in a judicial setting do not exist where an agency is engaged in informal rulemaking of the general policymaking sort.

Ex Parte Communications in rulemaking (summary) There is no blanket prohibition against post-comment period meetings with individuals

outside the APA (or other agencies generally). If the information in the meeting is of central relevance to the rulemaking decision it

generally must be docketed. Presidential/intra-executive meetings generally do not need to be docketed except if

needed to ensure due process:o Conversations concern the outcome of an adjudication or quasi-adjudication, oro If the statute specifically requires that essential “information of data” upon which

a rule is based needs to be docketed. To establish undue Congressional pressure sufficient to invalidate rulemaking, there must

be evidence of: o (1) The content of the pressure upon to Agency is designed to force it to decide

upon factors not made relevant by Congress in the applicable statute, ando (2) the agency’s determination must be affected by those extraneous

considerations.

§ 553 Notice and Comment Rulemaking

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General notice of proposed rulemaking including statement of time/place of rulemaking and either terms or substance of proposed rule OR a description of the subjects involved.

Interested persons given the opportunity to participate through submission of written data views or argument

After consideration of relevant matter, agency adopts concise and general statement of their basis and purpose of rule.

Does Morgan I apply in equal force to informal rulemaking? Requirement that agency decisionmakers must actually consider written and oral

submissions received in the course of the rulemaking proceeding doesn’t necessarily mean agency head must personally preside at an oral proceeding or personally read all written submissions

Agency head need not read all or even any of the written submissions, transcriptions, and summaries, but must understand their contents so that they can make an informed decision

Persons who wish to challenge a rule are usually not free to examine an agency head in court to ascertain whether they understood the record assembled during the rulemaking proceeding.

Ex parte communications and political influence in rulemaking Compilation of material during course of every rulemaking proceeding is rulemaking

record, which serves three basic functions:o Aids public participationo Provides material helpful to the agency in making a decisiono Facilitates judicial review of the agency decision.

In formal rulemaking – no ex parte communications with an agency about a proposed rule.

In informal rulemaking – APA neither banned ex parte communications nor required the inclusion of such communications in the agency rulemaking record.

EXCEPTIONS TO NOTICE-AND-COMMENT RULEMAKING

Good Cause Exemptions APA contains exemptions providing that notice and comment proceedings may be

omitted in particular circumstances for good causeo Narrowly construed and reluctantly countenanced = good cause exemptionso Agencies expressly invoked exemption in 25% of rules they used

Separate provision provides that for “good cause” an agency may dispense with the normal requirement that a rule may not become effective until 30 days after its issuance

o Commonly invoked simultaneously § 553(b) provides that notice and comment requirements don’t apply to certain types of

rules:o (A) “interpretative rules, general statements of policy, or rules of agency

organization, procedure or practice.”o (B) when the agency for good cause finds that “impracticable, unnecessary, or

contrary to public interest.”

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Urgent rules: rules designed to meet serious health/safety problem, or some other risk of irreparable harm, often qualify for exemption as “urgency”

o Rationale unlikely to succeed if court believes that agency itself was dilatory and brought deadline pressure on itself

o Departments must “reasonably quantify the delay that will occur if formal rulemaking is undertaken, show with reasonable particularity how the public interest will likely be harmed by that delay; and demonstrate specifically how the exempt rulemaking procedure will better serve the public interest.”

Interim-final rules: agencies that adopt a rule in reliance on the “impracticable” or “public interest” prongs of the good cause exemption usually request comments on the rule after it becomes effective

Public comment also considered “unnecessary” when agency has absolutely no discretion about contents of its rule, e.g. where its task is merely to make mathematical calculation or ascertain objective fact.

Direct final rules: agency published rule and announce that if no adverse comment received within specified time period, rule will become effective as of a specified later date.

o But if single adverse comment received, agency withdraws its rules and republishes it as proposed rule under normal notice-and-comment procedure

Immediate effectiveness – agency usually must allow regulated parties thirty days’ preparation before a final rule goes into effect, but agency may shorten/eliminate waiting period if it can establish “good cause” for doing so.

Little Sisters of the Poor v. PA – interim final rules prior to promulgation of final rules Facts: ACA – required employers to provide women with preventative care and

screenings without cost-sharing requirements, relied on guidelines supported by Health Resources and Services Admin to determine what preventative care and screenings were included. Two interim final rules promulgated regarding agency discretion to exempt religious employers from providing contraceptive coverage.

Holding: Departments had legal authority to exempt certain employers who had religious and conscientious objections from agency-created contraceptive mandate as phrase “as provided for” in the statute, which granted agency sweeping authority to identify and create exemptions from its own guidelines

o Final rules not procedurally invalid because APA’s notice requirements and objective criteria were satisfied

o Depts gave interested persons opportunity to participate in rulemaking through submission of written data, views, or arguments, and final rules contained concise general statement of their basis and purpose, and were published more than 30 days before they became effective.

Rule: absent provisions cannot be supplied by the courts, which applies not only to adding terms not found in statute, but also to imposing limits on an agency’s discretion that are not supported by the text.

Rule: in light of basic requirements of rulemaking process, dept’s failure to discuss statute at all when formulating their solution would make them susceptible to claims that the rules were arbitrary and capricious for failing to consider an important aspect of the problem

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Rule: Interim Final Rules request for comment readily satisfies APA notice requirement prior to publishing final rules.

o “open-mindedness” test has no basis in the APA.

PPFCC v. Shalala – policy statements Facts: FDA regulated pharmacies doing in-house drug manufacturing, permits

compounding drugs for patients but problems with pharmacies taking advantage of loophole and making their own drugs. FDA issues policy guide or interpretation of its regs; not a rule – gives nine factors FDA looks at when deciding whether there has been violation of regulation.

Holding: FDA policy guide was exempt from notice and comment rulemaking.o Agency did not intend to bind itself- freeform inquiry different from schedule of

fines because it allows for more discretion on ground. Rule: When determining whether guidance document is a substantive rule or not: is the

agency intending to bind the public or itself? Two part test:o (1) Binding on public? Legal effect – is the agency using language that seems to

have the force of law? AND Is it a change in position over time? Look for mandatory language in guidance document Did the agency “intend to draw a line in the sand?”

o (2) Binding on Agency? Same as practical effects test – what has the agency actually done?

Can you track record of enforcement? What did warning letters issued by agency ultimately cite – the regulation

or guidance document? Interview agency employees (depositions) Detailed/sophisticated enough to be binding?

Rule (Sant’Ambrogio): policy statementso 1) How does agency describe rule?o 2) Is the rule binding in its effect? (“touchstone”)

a) Binding on its face? “plain language” b) Binding in the manner it has been implemented?

Hoctor v. USDA – interpretative rules Facts: Animal Welfare Act – authorized Secretary of Agriculture to promulgate rules and

regulations as necessary. Act specifically requires dept to formulate standard for handling, care, treatment, and transportation of animals – dept employed notice and comment procedure to promulgate “structural strength” regulation. Dept issued internal memo to inspectors, requiring perimeter fences to be a certain height pursuant to structural strength rule.

Holding: certain height rule was not derived from statute or from rules promulgated under statute because the certain height was an arbitrary choice.

Rule: rules consistent with statute or regulation but not derived from it are not interpretative because they are an arbitrary choice among methods of implementation

o Generally, rules that turn on numbers are not interpretative.

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o When agencies make rules based on arbitrary choices, they are legislating because legislation is a choice between many possible options – therefore requires notice and comment rulemaking.

Rule (Sant’Ambrogio): Interpretative ruleso How does the agency describe the rule?o Must be interpreting statute or rule.o Does the rule clarify or does it make new law?o Consider Posner’s arbitrary/legislative vs. interpretative distinction (caveats)o Consider whether binding in effect (caveats)o Consider past practice of agency (caveats)

Perez v. Mortgage Bankers Assoc. – opinion letters Facts: FLSA granted Dept of Labor authority to determine categories of employees that

were exempt from FLSA’s min wage requirements. DOL promulgated regulations clarifying exemption, but later issued an opinion letter stating that mortgage-loan officers were exempt, but a few years later reversed interpretation and found that these officers were not exempt from the requirements. Both opinion letters were issued without notice and comment procedures.

Holding: DOL free to alter without using notice and comment procedures because it did not use these procedures when it first adopted its interpretation

Rule: Opinion letters do not “trigger” notice and comment procedures because they do not amount to an amendment of the regulation itself.

o APA requires agencies to use same procedures when they amend a rule that they used to promulgate the rule.

o No similar requirement that agency’s mere interpretation of its regulation must be implemented through notice and comment rulemaking

o Agency also not required to use notice and comment procedures when changing previously made interpretation of a regulation – doesn’t amount to amendment of regulation itself.

o APA requires a more substantial justification if an agency’s interpretative change is based on factual findings that are different than the findings that supported the original interpretation.

NLRB v. Bell Aerospace – required rulemaking Facts: union sought to unionize in plaintiff’s plant. Plaintiff argued buyers not subject to

NLRB Act because they were managerial employees, when issue was litigated before NLRB, NLRB reversed earlier policy that all managerial employees were exempt, and specifically found managerial employees with labor-management responsibilities were exempt.

Holding: NLRB’s decision that adjudication, not rulemaking, is best means by which to develop standards related to buyers is accorded great weights

o NLRB is entitled to determine whether certain buyers are managerial employees through adjudication

o Generalized standard regarding applicability of the Act to buyers is unlikely to be more useful than Board’s case-by-case approach

Rule: agency is not precluded from announcing new principles in an adjudicative hearing

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o Decision on whether to proceed on a certain issue through rulemaking or ad hoc litigation lies in informed discretion of agency

Analysis (Sant’Ambrogio): Board is not precluded from announcing new principles in an adjudicative proceeding

o The choice between rulemaking and adjudication lies in the first instance within the Board’s discretion

Not every principle can be immediately cast into a general rule Problems may arise which the agency could not reasonably foresee Agency may not have had sufficient experience with a particular problem

to warrant a hard and fast rule Problem may be so specialized and varying in nature as to be impossible

of capture within a general rule

Wait Radio v. FCC – waivers of rules Facts: challenge to FCC about radio’s application for waiver of rule was unacceptable –

sought waiver of certain FCC rules to operate its station on an unlimited time basis; claimed that rejection of its application was contrary to its 1A right

Holding: Although FCC was generally allowed to discharge its responsibilities through rules of general application, did not relieve FCC of obligation to seek out public interest in individualized cases.

Rule: tension between rules of disclosure and “hard look” doctrine heightened when court undertakes to review administrative action on an application for waiver.

o “presumptions of regularity” apply with “special vigor” when an agency relies on an “established and tested agency rule.”

o Allegations stated with clarity and supported by sufficient data are not subject to perfunctory treatment and should be given reflective consideration.

Exempted Subject Matter Categorical exemptions not based upon evaluation of particular circumstances

surrounding an individual rulemakingo Exemptions are inapplicable to the extent other law requires an agency to follow

usual rulemaking procedures for any of the rules within the excepted categories Proprietary matters: § 553(a)(2) excludes rules relating to “public property, loans, grants,

benefits, or contracts” from all of the provisions of § 553, including notice and comment procedure as well as requirements for deferred effective date and right to petition.

o Exemption means that in all of these areas, affected people have no right under APA to influence the contents of agency rule

Waiver of exemptions: when agency adopts a procedural rule that commits it to follow § 553 procedure, despite a statutory exemption, it is required to conform to its own rule

Agency management and personnel: rules relating to agency management or personnel are excepted from all rulemaking requirements

o Effect of exemption reduced somewhat by other statuteso Excludes from definition of rule/guidance document a statement that “concerns

only the internal management of an agency and which does not affect private rights or procedures available to the public.”

Military and foreign affairs functions

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Guidance Documents Legislative rules also sometimes known as “substantive rules”

o Procedural rules often legislative ruleso Preeminent characteristic of legislative rule: binding and enforceable in the same

way as other specifies of effective law Valid legislative rules binding on private persons Also binding on issuing agency – must adhere until they are

revoked/invalidated by court Guidance documents: agency rules that do not have force of law because they are not

based upon delegated authority to issue such ruleso Tendency for agency to rely on guidance documents as instrument of policy

development no on increase because of recent growth in procedural hurdles that agencies must surmount when they attempt to promulgate legislative rules

o Guidance documents not binding on agencies or citizens Usually subdivided into “interpretative rules” and “general statements of

policy”

POLITICAL CONTROL OF AGENCIESOccurs when one branch attempts to perform a task that belongs more properly in another

branch, or restrain other branches from carrying out their constitutionally assigned functions.

Formalist vs. functionalist approaches to separation of powers issues - SCOTUS may follow either

Formalist: assumes that various types of activities fall categorically inside/outside scope of a given branch’s purview

Functionalist: openly weighs competing interests that militate in favor of or against a given restriction on powers of a branch of gov’t

DELEGATION OF LEGISLATIVE POWERS

Nondelegation doctrine and federal agencies Nondelegation doctrine maintains that Congress’ power to delegate its legislative

authority is limited Invokes both separation of powers and checks and balances arguments Checks and balances argument recognizes that delegation to agencies may be inevitable,

but insists that the legislature impose adequate limits on discretion such agencies can exercise

Why have a nondelegation doctrine? Textual arguments (weak)

o Vesting Clauseo But Necessary and Proper Clause

Checks and balances:o Avoid executive dictatorshipo Standards for judicial review

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Rule of law? Accountability Best form of decision-making?

Schechter Poultry: “codes of fair competition” does not provide an “intelligible principle” Vast powers – every part of economy No agency No procedures No judicial review Congress grants President power to create “codes of fair competition” to stabilize and

restore economic health during the Great Depression Facts: challenge to National Industry Recovery Act – promulgated many rules regarding

working conditions, wages, hours. Here, fixed the max number of working hours and sale of all chicken in a coup.

Analysis: Case was problematic because the standard was too broad, elusive, and subjective. Fails Intelligible Principle Test

o Private actors not electedo Fair competition didn’t have common law antecedent – was broad, undefined, not

judicially manageableo No formal administrative process – nothing imposed on trade groups requiring

them to come up with good policyo Amounted to delegated power to private industry

Industrial Union Dept. v. API – revival of nondelegation doctrine Facts: OSHA delegated authority to Secretary of Labor to promulgate standards, which

must be “reasonably necessary or appropriate.” Secretary promulgated standards to regulate exposure to benzene and took position that no safe exposure level can be determined and that statute required him to set exposure limit at lowest technologically feasible level that will not impair viability of industries regulated.

Holding: Secretary must make appropriate findings that exposure presents a significant health risk in the workplace at higher levels in order to set exposure levels at lowest possible level

o Cannot fail to do so on the ground that scientific uncertainties concerning this issue prevents him from making these findings

o Puts burden on industry to show that benzene is safe at certain levels, but statute puts burden on Secretary to show that is more likely than not that exposure to benzene at higher levels presents a significant risk of health impairment.

Rule: Intelligible Principle Testo The vaguer it is, the less likely it is an intelligible principleo Vague standards like “fair” will pass; not a very high hurdle to meeto Delegation permissible when:

(1) Congress created an intelligible principle to guide agency in how it will exercise the delegated discretion

The harder it is for court to evaluate, the farther away the statute is from an intelligible principle

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(2) Principle is judicially manageable and susceptible to judicial review (can courts review the intelligible principle?); AND

(3) Congress made the social policy choice (congress must have named an important social policy for which the agency must adhere)

o Purpose of the nondelegation doctrine is “designed to assure that the most fundamental decisions will be made by Congress, the elected representatives of the people, rather than by administrators.”

Analysis (Sant’Ambrogio): Court interprets statute in this case to require the finding of a significant risk before regulating

o The use of the nondelegation doctrine as a canon of statutory interpretation

Whitman v. American Trucking – analysis of delegations of legislative power Facts: Clean Air Act delegated authority to EPA to promulgate implementing regulations

setting NAAQS for air pollutants. Each pollutant had an EPA-set primary standard “with an adequate margin of safety” to protect health; and secondary standard to protect national welfare. EPA issued rules revising NAAQs for particulate matter and ozone – indicated that any amount of PM or ozone posed possibility of some health risk; didn’t explain how new level was set or how it worked. Internal EPA report stated threats to health decreased w/ each incrementally lower concentration level.

Holding: EPA must be allowed to articulate clear standards that adequately limit the enforcement authority delegated to EPA in Act’s ambiguous provisions

o Agency cannot cure the nondelegation problem if it exists through creative interpretation

Rule: Courts will not automatically strike down an ambiguous statute where an agency’s implementing regulations fail to articulate clear standards that limit the agency’s discretion in applying the law

o If ambiguous statutory provisions violate the nondelegation doctrine by delegating authority to an agency, the agency’s implementing regulations must articulate clear standards that limit the agency’s exercise of its delegated authority.

o However, where both statutory language and implementing regulations are impermissibly vague, courts will not automatically invalidate the ambiguous statute; rather, will remand to permit responsible agency to apply its expertise to the task of finding an interpretation that properly circumscribes the agency’s enforcement authority.

o **doesn’t require the statute to provide determinate criterion for saying how much of the regulated harm is too much.

Rule (Sant’Ambrogio): analysis of delegations of legislative power:o (1) is there an “intelligible principle?”o (2) what is the scope of the agency’s power?

“Degree of discretion . . . acceptable varies according to the scope of power Congress conferred.”

o (3) to whom has Congress delegated power?o (4) what procedures constrain the exercise of discretion?o (5) is the exercise of discretion subject to judicial review?

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Gundy v. United States – nondelegation doctrine and “passing the buck” Facts: creation of national sex offender registry, delegated authority to specify

applicability of registration requirements to pre-Act offenders to AG. Holding: authorizing the AG to enforce sex offender registry violations against pre-Act

offenders doesn’t violate nondelegation doctrine under current intelligible-principle standard

o Guiding principle is that pre-act offenders must register as soon as feasible. Rule: Nondelegation inquiries begin with interpreting statutes to see if Congress provided

an intelligible guiding principle. If so, inquiry ends there.o Court has repeatedly upheld statutory delegations as constitutional if Congress

provided intelligible guidance directing how the delegee must perform. **Gorsuch alternative: Executive may:

o Fill in the details Challenge – drawing line between big and small

o Make policy choices based on fact-findingo Make policy choices in areas of overlapping authority

DELEGATION OF ADJUDICATORY POWERS TO AGENCIESWhy delegate adjudication to agencies?

Less formal procedures = speedier, less expensive decisions; more accessible Subject matter expertise = speedier, more accurate decisions Flexibility: no life-tenure or salary protections; can be assigned other tasks Facilitates coherent policy development (with rulemaking; enforcement) Facilitates coherent policy development (no conflicting judicial opinions) Avoids judicial bias against regulatory programs

Formalist Syllogism Judicial power must be exercised by Article III courts; Article III courts must have judges with constitutional protections; Therefore, judicial power cannot be exercised by courts that don’t have constitutional

protections

Functional arguments to reserve judicial power in Article III Courts Independence of judges with life tenure Continuity – judges protected from political winds

CFTC v. Schor – public vs. private right Facts: CFTC regulates trading of commodity futures. CFTC promulgated regulation that

allowed it to adjudicate any counterclaims that broker might assert against consumer if such counterclaims arose out of same transaction or series of transactions set forth in customer’s complaint. Brokers could pursue action against customer in state court as contract action; counterclaims not mandatory

Holding: plaintiff’s choice to seek relief in CFTC proceeding – not state/federal court – effectively waived his right to proceed before Article III court

o CFTC’s adjudicatory powers do not impermissibly intrude on the province of the judiciary; CFTC’s limited jurisdiction over a narrow class of common law claims,

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such as a counterclaim, does not create a substantial threat to separation of powers.

Rule: Balancing Test:o (1) Public vs. Private Right

Agencies allowed to adjudicate public rights: matters arising between government vs. others = rights asserted against government.

Government doesn’t have to be a party – case just has to involve “federal regulatory scheme”

Is there a need for an expert arbitrator (ALJ) with specialized knowledge? (Congress can determine who adjudicates – agency vs. Art. III court)

Public rights are created by Congress; generally involve disputes between the government and another party; A public right is one that an individual has against the government, such as a dispute involving taxes, government benefits, or government licenses or contracts, or a right that's created by statute.

Private Rights: matters arising between two private parties Must go to an Art. III court (Stern) (unless agency is a mere

adjunct of the federal court). Otherwise, potential for power grab. Traditionally involve disputes between private parties over rights

that pre-date the Constitution, such as common-law rightso (2) Reasons for Congress to depart from Art. III

Art. I tribunals resolution of this kind of dispute because of efficiency and expertise

o (3) jurisdiction and powers – how much are we giving away from Art. III to Art. I courts?

Horizontal – how wide is agency’s jurisdiction – if broad, no Vertical – how final is agency’s decision? Is it reviewable by Art. III

courts later on? De novo review preferable to abuse of discretion

o (4) Standard of Review – how supervised will Art. I tribunal be? Rule (Sant’Ambrogio):

o (1) Extent to which essential attributes of judicial power reserved to Art. III courtso (2) Range of jurisdiction and judicial powers exercised by the agencyo (3) Origin and importance of the rights being adjudicatedo (4) Concerns that drove Congress to place the adjudication in an agency

Stern v. Marshall – difference between public and private rights Facts: defendant sued plaintiff alleging that plaintiff had fraudulently induced father and

defendant’s husband out of will. Plaintiff successful; defendant then filed bankruptcy. Plaintiff filed proof of claim in bankruptcy court, alleging that defendant had defamed him and sought a declaration that defamation claim was nondischargeable. Defendant counterclaimed; bankruptcy court decided in favor of defendant.

Holding: Article III doesn’t give authority – not a historical exception and doesn’t fall within the public rights exception

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o Bankruptcy courts aren’t Article III tribunals – can’t exercise “the judicial power of the United States.”

Rule: If Congress has nothing to do with it, then it’s a private right.o Regulatory agencies still have capacity to administer their adjudicationo What is still uncertain is the extent to which agencies can also assert pendent or

ancillary jurisdiction over claims that are factually related to their substantive responsibilities but arise under some other source of law, such as common-law tort or contract.

Rule (Sant’Ambrogio): to qualify as a public right – o (1) Issue derived from a federal regulatory schemeo (2) Resolution by expert government agency is essential to limited regulatory

objective

Wellness Int’l Network v. Sharif – may consent to agency adjudication of claim that must otherwise be in Article III forum; consent cures problem

EXECUTIVE CONTROL OF AGENCIES: APPOINTMENT AND REMOVAL POWERS

Removal of Officers Four possible ways to remove an officer:

o Impeachmento Removal at-will by Presidento Mode of removal follows mode of appointmento By statute, via the Necessary and Proper clause

Myers v. United States – Congress cannot limit President’s removal power over any officer appointed by the President

o Test: pure executive official = at will of President. Humphrey’s Executor v. United States – president’s power to remove executive branch

official not applicable to officials with legislative or judicial functionso Independent agencies not subject to direct presidential control – Congress creates

an independent agency in hope of lessening political influence over its decisionso Free of direct executive control – agency can perform its administrative functions

impartially and regulate purely in public interesto Fundamental characteristic of independent agency – head/heads may not be

removed by President, except for good causeo “executive” agencies – top officers serve at pleasure of Presidento Test: quasi-legislative/judicial = Congress may restrict removal for cause

Morrison v. Olson – Independent counsel is subject to removal by AG – independent counsel’s powers are limited to investigation and prosecution, and President’s need to fully control these types of inferior officers is not central to the functioning of the executive branch.

o Congress may limit President’s power to remove some agency officials; but Congress may not retain for itself power to remove officials engaged in administrative functions

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o Morrison also treated possibility of removal for good cause as affirmatively demonstrating the sufficiency of the president’s control over an independent counsel

o Four things that make an officer inferior (1) subject to removal by higher executive branch official (2) officer empowered by statute only to perform certain, limited duties (3) office limited in jurisdiction (4) office limited in tenure

o If principal officer – must be appointed based on Art. II § 2o Test: Does the restriction impede the President’s power to perform constitutional

duties? Free Enterprise Fund v. PCAOB – dual-level removal protection

o Court struck down clause in statute that stated agency could remove Board members only for cause because Board members could also only be removed by President for cause

o Test: two layers of for-cause removal restrictions violates the Take Care Clause and Article II Vesting Clause

Seila Law LLC v. Consumer Financial Protection Bureau – Congress’s power to restrict removal

Facts: CFPB initiated investigation of defendant to determine whether defendant had violated rule in course of providing debt-relief services to consumers. Defendant refused to comply, Defendant appealed and argued CFPB was unconstitutionally structured because it was headed by a single director who exercised substantial executive power but could be removed by President only for-cause.

Holding: judicial precedent indicates that for-cause removal restriction protecting director doesn’t impede President’s ability to perform his constitutional duty to ensure that the laws are faithfully executed.

o Didn’t violate statute because CFPB empowered by statute to enforce rule which didn’t exempt attorneys from its coverage even when engaged in providing legal serves

Rule (Sant’Ambrogio): Default rule: officers removable at will of presidento Two limited Exceptions

Multi-member bodies (Humphrey’s) Inferior officers (Morrison)

Independent Agencies – when Congress specifies by statute that an agency head can only be removed in certain circumstances – removal causes vary and depend on agency’s organic statute.

CHALLENGING AGENCY ACTION: THE SCOPE OF JUDICIAL REVIEW

JUDICIAL REVIEW OF AGENCY FACT FINDING

Trial de Novo: court receives evidence on its own and redecides case.

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Independent judgment on the evidence: court decides case on the record made by the agency but need not give any deference to agency fact findings.Clearly erroneous: court reverses if it is left with the definite and firm conviction that mistake has been committed.Substantial evidence: court cannot reverse if a reasonable person could have reached the same conclusion as the agency.Arbitrary and capricious: in federal law, the substantial evidence test of APA Section 706(2)(E) applies by its terms only "in a case subject to sections 556 and 557 of the APA or otherwise reviewed on the record of an agency hearing provided by statute.Some evidence: the court cannot reverse if there is some evidence in support of the agency's conclusion.Facts not reviewable at all: a statute may preclude an judicial review of an agency's factual determinations.

Universal Camera v. NLRB – substantial evidence test Facts: NLRB brought proceeding against defendant for discharging employee for

testifying under Wagner Act. Case went to hearing before trial examiner of NRLB. Trial examiner recommended NLRB dismiss complaint; NRLB rejected report, ordered defendant to reinstate employee.

Holding: “Substantial evidence” was the proper test for courts reviewing the NLRB’s past decision – the trial examiner’s report is part of the record and the court should take it into account.

o Courts should not view evidence in isolation – the substantiality of the evidence must take into account conflicting evidence in the record.

Rule: “substantial evidence” test:o Court must look at evidence that supports agency decision as well as information

that does not – § 706 – reviewing “the whole record” o Court should look to ALJ decision as part of the whole record review, and ALJ’s

decision is more important when issues of witness credibility are at stake Evidence supporting the old conclusion may be less substantial when

individuals who have lived with the case and drawn different conclusions from the board

Less risk of capture with an ALJ than there is with the board as a whole. More worried you are about capture – closer to Bi-Metallic.

o Question of fact (questions answered without references to a legal standard) = substantial evidence – evidence sufficiently strong to support a reasonable conclusion

Association of Data Processing Service Orgs v. Board of Governors – arbitrary and capricious standard and substantial evidence standard

Facts: Bank petitioned Board for approval to establish data processing subsidiary; defendant conducted formal hearing on petition, ALJ made findings of fact. ALJ recommended approval of petition and amendment of regulation – board adopted ALJ’s factual findings, approved petition, and followed procedure to amend regulation.

Rule: federal regulatory action not supported by substantial evidence is impermissibly arbitrary and capricious.

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o Regulatory action that is arbitrary and capricious is prohibited by the APA – many statutes that authorize adjudicatory actions state that an adjudicatory action must be based on substantial evidence.

o Absent explicit statutory language to the contrary, no reason to assume that adjudicatory action requires any more proof than a regulatory action.

o Adjudicatory action usually affects single partyo Regulatory action dealing with same general subject often affects an entire class

of regulated persons and has a wider overall impact – would be unreasonable to suppose that the regulatory action’s wide overall impact can be supported by anything less than substantial evidence

o Basically, regulatory actions are subject to the same substantial evidence as adjudicatory actions

Same substantial level of evidence is required to support both the defendant’s adjudicatory and regulatory actions.

APA § 706(2) states:[The reviewing court shall] hold unlawful and set aside agency action, findings, and conclusions found to be—

(A) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law;(B) contrary to constitutional right, power, privilege, or immunity;(C) in excess of statutory jurisdiction, authority, or limitations, or short of statutory right;(D) without observance of procedure required by law;(E) unsupported by substantial evidence in a case subject to sections 556 and 557 of this title or otherwise reviewed on the record of an agency hearing provided by the statute; or(F) unwarranted by the facts to the extent that the facts are subject to trial de novo by the reviewing court.

Rationale for substantial evidence test: agencies specialize and develop expertise in areas they regulate - fact-finding process reflects that expertise and thus their findings should receive only limited judicial scrutiny

Legislature usually delegates to agency all power to adjudicate and find facts - legislature intends court to respect those findings absent serious error by agency

Reasonableness scope of review limits ability of court to impose its values in place of the agency's values.

Allentown Mack Sales & Serv., Inc. v. NLRB - "giving fair weight to Allentown's circumstantial evidence, we think it quite impossible for a rational fact-finder to avoid the conclusion that Allentown had reasonable good-faith grounds to doubt - to be uncertain about - the union's retention of majority support."

Cites and applies Universal Camera, but states that Court must decide whether on this record a reasonable jury on this same information would decide similarly

Clear error vs. substantial evidence review Subtle difference - choice of standard of review may have less influence on outcomes

than such case-specific factors as a "finding's dependence upon agency expertise or the presence of internal agency review."

Three approaches to issues of legal interpretation

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Court decides interpretive issue on its own and give no deference to agency o Agency’s view receives no more weight than the court gives to the view of the

private litigants opposing the agency “reasonableness” or “strong deference” approach – court treats interpretive issues largely

as they treat agency findings of basic fact under the substantial evidence testo Court accepts agency’s interpretation of a statute or other text if the interpretation

was “reasonable;” doesn’t substitute its own preferred interpretation for that of the agency

“weak deference” – resembles first approach – allows the court to substitute its judgment for the agency, but also resembles send approach – court is expected at least under some circumstances to give “weight” to the agency’s position.

JUDICIAL REVIEW OF AGENCY STATUTORY INTERPRETATION

Chevron v. Natural Resources Defense Council – the chevron doctrine Facts: EPA promulgated a rule interpreting term “stationary source.” Natural Resources

Defense Council challenged EPA’s interpretation of the word “source.” Holding: the EPA’s use of the bubble concept was a reasonable interpretation.

o Congress did not express intent regarding applicability of the bubble concept to the permit program.

o However, it’s the agency and not the court that determines whether using the bubble concept is appropriate within the context of the program.

Reviewing court’s only role is to determine whether the agency’s decision was a reasonable one.

o EPA’s use of bubble concept = reasonable policy choice; court must respect it Rule: Chevron Two-Step

o Step 1: Has Congress answered the question? If yes – go with what Congress said; inquiry is done.

o Step 2: If no à defer to any reasonable interpretation offered by the agency. Court must consider whether agency’s action was based on permissible

construction of the statute Agency’s power extends to filling implicit & explicit gaps that Congress

might’ve left in statute If Congress leaves an explicit statutory gap, then it’s express delegation of

authority to agency to fill that gap by promulgating regulations A reviewing court must give effect to those regulations unless they

are arbitrary, capricious, or contrary to the statute. If the delegation of authority to the agency is not implicit, then agency has

authority to fill the gap, and reviewing court may not disturb agency’s reasonable interpretation of the statute.

Based on principle that agency’s been entrusted to administer statute à best position to balance competing interests & make necessary policy choices based on its knowledge of the relevant subject matter.

Rule (Sant’Ambrogio): Chevron Two-Step

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o Step 1: Has congress directly spoken to the precise question at issue? If yes à “the end” à enforce unambiguously expressed intent of Congress If no à move to Step 2

o Step 2: Is agency’s answer based on permissible/reasonable construction of statute?

**Chevron applies to mixed questions of law and fact and pure questions of law

Breakdown of Chevron Doctrine:1. Step One: reviewing court determines whether statutory meaning w/ respect to precise

issue before it is "clear" (and thus, not ambiguous).a. Does not dictate that courts use any particular method of statutory interpretationb. Court should use "the traditional tools of statutory construction"

i. Examination of the text of the statuteii. Dictionary definitions

iii. Canons of constructioniv. Statutory structurev. Legislative purpose

vi. Legislative historyc. If statutory meaning unclear, then court required to defer to agency's

interpretation of the statute if reasonable interpretation (step two)2. Step Two:

a. Courts regularly examine same statutory materials relied on in step one to determine whether statute, even if subject to more than one interpretation, can support the particular interpretation adopted by the agency

i. Court is measuring interpretation against congressionally established limitations

b. Courts evaluate whether agency, in reaching its interpretation, reasoned from statutory premises in a well-considered fashion.

i. Whether interpretation is supported by reasonable explanation & is logically coherent

ii. May also ask whether agency interpretation is arbitrary and capricious in substance

c. Court may say that agency’s interpretation is unreasonable because it fails to implement a statutory mandate in a “sufficiently reasoned manner”

d. Overlaps arbitrary and capricious test of APAi. Whether the agency action has adequate factual support & is consistent

with precedent

Chevron and Stare Decisis Nat’l Cable & Telecomms Ass’n v. Brand X – “[a] court’s prior judicial construction of a

statute trumps an agency construction otherwise entitled to Chevron deference only if the prior court decision holds that its construction follows from the unambiguous terms of the statute and thus leaves no room for agency discretion.”

Example of “clear meaning”FDA v. Brown & Williamson – application of chevron doctrine

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Facts: FDCA gives FDA power to regulate drugs, devices, and combination produces. FDA claims it has jurisdiction over tobacco products because they were drugs within meaning of FDCA; change from FDA’s prior position that it didn’t have jurisdiction to regulate tobacco products.

Holding: Congress clearly answered the question that tobacco and nicotine are not within the meaning of the statute, so the FDA can’t regulate.

o Congress’s intent: did not intend for FDA to have jurisdiction over tobacco products because Congress enacted six separate pieces of legislation concerning tobacco products & their effect on public health, none of which involve the FDA.

o In light of FDA’s position during same period that it did not have jurisdiction, the statutes are evidence that Congress understood the FDA did not have jurisdiction.

Solid Waste Agency v. Army Corps of Eng’rs – Court refused to defer to agency interpretation because that construction would raise significant constitutional difficulties (constitutional avoidance canon) (p.628)

INS v. St. Cyr – Court held law was inapplicable to aliens who had entered in plea agreements prior to the effective date of the statute (which statute was not explicit on; retroactivity)

City of Arlington v. FCC – Court argued jurisdictional questions are analytically no different from other questions of statutory authority that are routinely resolved using the Chevron framework. (p.631)

When does Chevron not apply? Courts must decide on their own w/o deference:

o Issues arising under generic statutes such as APA and FOIAo When no single agency administers generic statutes (like APA/FOIA)

Chevron doesn’t apply to agency’s interpretation of statutory private right of action – Congress cannot be assumed to have delegated to an agency the power to determine the circumstances under which one private person may bring suit in court against another private person.

No Chevron Deference; Skidmore Deference usedChristensen v. Harris County – informal interpretations and Chevron doctrine

Facts: FLSA required gov’t employers to offer overtime. Defendant wrote to DOL asking if it could adopt a policy requiring employees to schedule comp time. DOL responded in opinion letter; defendant subsequently adopted policy, but plaintiffs brought suit.

Holding: agency letter doesn’t have force of law because it was not passed with all procedures required under formal/informal rulemaking and adjudications = doesn’t merit deference

o Agency gets Skidmore deference – Court not persuaded by DOL letter, did not defer to agency’s decision

Rule: Agency decisions without the force of law do not earn Chevron doctrine.o Interpretations are merely entitled to respect under Skidmore, and only if they

have the power to persuade.

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o Interpretations contained in materials like opinion letters, policy statements, manuals, and other internal guidelines are not backed by force of law; not been formally adjudicated.

Rule (Sant’Ambrogio): Chevron deference for interpretations found in formal adjudication and informal (or formal) rulemaking

o No Chevron deference for interpretations found in opinion letters, policy statements, and enforcement guidelines, which don’t have the force of law.

United States v. Mead Corp. – chevron step 0 Facts: plaintiff subject to tax at port of entry on imported planners; US Customs Service

sets the rates. Statute sets 4% tariff on items & other similar items don’t have tariff. In the past, planners weren’t taxed, but later Customs changed their policy and planners became taxable. Tariff classifications were made in “ruling letters” issued before entry of the goods. These letters weren’t subject to notice and comment in most circumstances, rather were subject to independent review by Court of International Trade

Holding: Ruling letter is not an authoritative view of the agency and therefore not intended as a delegation from Congress that carries the force of law.

Rule: Did Congress authorize agency to make rules with the force of law?o “Safe Harbor:” Authorizing formal rulemaking or adjudication, or notice and

comment rulemaking procedures for the agency to follow when making decision = Chevron applies

o Other indicators of intent to delegate, looking at all surrounding circumstances Clues in text/structure of statute or in context of how the statute was

passed; Whether the interpretation the agency made was passed with a lot of

process (e.g. if ruling letter required public comment, etc); Congress explicitly gave agency authority to interpret the statute (literally

gave the delegation); and Topic is challenging and might change over time and expect agency to

adjust as necessary (agency flexibility) Rule (Sant’Ambrogio): Chevron Step 0 – Chevron deference appropriate when:

o (1) Congress delegated authority to agency generally to make rules carrying the force of law AND

o (2) agency interpretation claiming deference was promulgated in the exercise of that authority

o **May be shown in a variety of ways, as when agency uses notice and comment rulemaking or formal adjudication (safe harbor)

Other formats may qualify – Court seems concerned with 1) binding nature, and 2) procedural formality

**Can still earn Chevron if not in Safe Harbor – via consistency and surrounding circumstances in the statute, can make the argument that Congress was intending to delegate the agency power

Barnhart v. Walton – Chevron Step 0 – deference factors Holding: legislative rule that SSA had adopted after plaintiff’s case reached the courts

was not too tardy to receive Chevron deference.

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o Regardless, the agency had long espoused the same interpretation in informal pronouncements and did not necessarily have to resort to notice and comment rulemaking to qualify for Chevron deference.

When an agency reaches an interpretation through informal rulemaking, that interpretation may still be entitled to Chevron deference. Whether a court should give deference in such situations depends upon the interpretative method used and the nature of the question at issue.

Rule: “In this case, the [1] interstitial nature of the legal question, [2] the related expertise of the Agency, [3] the importance of the question to administration of the statute, [4] the complexity of that administration, and [5] the careful consideration the Agency has given the question over a long period of time all indicate that Chevron provides the appropriate legal lens through which to view the legality of the Agency interpretation here at issue.

Rule (Sant’Ambrogio): Entitled to Chevron deference given:o Interstitial nature of the legal questiono Related expertise of agencyo Importance of question to administration of the statuteo Complexity of administrationo Careful consideration agency gave the matter over long period of timeo **Court wants to give deference to the kinds of questions it expects Congress to

want the agency to answer, so long as the agency gave sufficient consideration to the matter.

Skidmore v. Swift & Co . – Skidmore deference Facts: employees at power plant could not leave and were paid when they answered an

alarm, but not paid for time in between when they were just in the firehouse but not responding to alarms. Agency issued interpretive bulletin on when employees should be paid under FLSA. Administrator’s guidance suggested sleeping/waiting time should not be paid, but any time they are on call should be compensated.

Holding: Rulings/interpretations/opinions of administrator under the act constitutes a body of experience/informed judgment that courts and litigants should use to guide them.

o Weight of agency judgment in a particular case depends on four factor test. Mead clarifies that Chevron applies if there’s an explicit delegation of authority, and

Skidmore applies if there isn’t (aka informal agency decisions not expressly granted by Congress)

Rule: Four factor test to determine how much deference to give an agency Rule (Sant’Ambrogio): Weight given to agency interpretation depends on:

o Thoroughness evident in its considerationo Validity of reasoningo Consistency with earlier and later pronouncementso All those factors which give it the power to persuade, if lacking in power to

control A) Complex regulatory regime B) Related expertise or experience of agency C) Need for uniform standards in public/private enforcement

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Interpretation of an Agency’s Own RegulationsAn Agency’s interpretation of its own legislative regulation should be given “controlling weight

unless it is “plainly erroneous or inconsistent with the regulation” (Seminole Rock/Auer)Christopher v. SmithKline Beecham – limitations to Auer

Facts: Congress didn’t define meaning of outside salesman – explicitly delegate to agency to define it. DOL goes through three different regulations via notice and comment; announced via amicus brief that sale requires transaction that directly involves the employee and transfer or property, therefore, pharm reps don’t count as outside salesman.

Holding: pharm reps are outside salesmen and ineligible for overtime o Auer doesn’t apply because it’s inconsistent with the past practices of DOLo Unfair surprise – to enforce against agency now would be bait and switch;

companies didn’t get chance to weigh in at notice and comment. Rule: Limitations on Auer deference which states when an agency is interpreting its own

regulation, its own construction is controlling unless plainly erroneous.o Agency’s interpretation doesn’t represent fair and considered judgment =

deference unwarranted.

Kisor v. Wilkie – application of Auer Facts: Former marine plaintiff denied benefits for PTSD based on agency’s interpretation

of its own regulations. Holding: Courts should defer to an agency’s interpretation of its own regulations.

o Neither Auer nor APA limits role of legitimate review of agency rules. Rule: agency interpretation must show “fair and considered judgment” to receive

deference under Auer. o Such judgment respects traditional requirements of notice and response instead of

subjecting regulated parties to unfair surprise Also means that courts don’t defer to agency determinations that conflict

with prior decisions made by the same agency. Overruling the line of cases deferring to agencies interpreting their own

rules would upset reliance on those decisions by other courts as well as Congress.

Levels of Deference for agency interpretations of statutes:Formal rulemakingInformal rulemakingFormal adjudication

Chevron safe harbor – Mead

Informal adjudications ?Policy statementsInterpretive RulesOther guidance documents

Probably Skidmore deference, but see Mead; Barnhart

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Chevron Step 0:(1) see if you qualify under Mead

General grant of authority to implement act using rulemaking or formal adjudication? City of Arlington

o Unless strong indication of Congressional intent to exempt certain areas or interpretations

Used that authority to interpret act?à Safe Harbor (notice and comment rulemaking; formal adjudication): Apply Chevronà Outside Safe Harbor: is it binding? Is it formal?

(2) If not in safe harbor, look to Barnhart as well Interstitial nature of the legal question? Related expertise of agency? Importance to administration of the statute? Complexity of administration? Careful consideration over long period of time?

Agency Interpretations of their own regulations Auer v. Robbins: an agency’s interpretation of its own regulations is “controlling unless

‘plainly erroneous or inconsistent with the regulation’” Bowles v. Seminole Rock & Sand Co.: [A] court must necessarily look to the

administrative construction of the regulation if the meaning of the words used is in doubt. The intention of Congress or the principles of the Constitution in some situations may be relevant . . . but the ultimate criterion is the administrative interpretation.

**Provides level of deference akin to Chevron for agency interpretations of their own regulations**

Courts will defer to an agency’s interpretation of its own regulations unless:o Plainly erroneous or inconsistent with the regulationo An unreasonable interpretationo Conflicts with prior interpretationo Convenient litigating position/post hoc rationalization – not fair and considered

judgmento Unfair surpriseo Regulation merely parrots the statuteo Not authoritative or official position of agencyo Does not implicate agency’s substantive expertise

APA § 706:[T]he reviewing court shall decide all relevant questions of law, interpret constitutional and statutory provisions, and determine the meaning or applicability of the terms of an agency action. The reviewing court shall—

(2) hold unlawful and set aside agency action, findings, and conclusions found to be—(A) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law;(B) contrary to constitutional right, power, privilege, or immunity;(C) in excess of statutory jurisdiction, authority, or limitations, or short of statutory right;

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JUDICIAL REVIEW OF AGENCY POLICYMAKINGAgency actions and court’s response:

When an agency takes an action in mistaken belief that it is legally required to do so à court cannot uphold the decision, even if the action was one that the agency could lawfully have taken in its discretion.

When an agency rests its action on a premise that the reviewing court considers impermissible à court cannot uphold the action by deciding that the agency was actually applying a different, unacknowledged premise, even if the latter premise would have been permissible.

If a court finds an agency’s exercise of discretion is arbitrary and capricious à normally must remand case to the agency for reconsideration instead of resolving remaining issues on its own or prescribing a specific outcome.

APA definitions in § 551 “order” = “disposition, whether affirmative, negative, injunctive, or declaratory in form,

of any agency in a matter other than rule making but including licensing.” “rule” = “statement of general or particular applicability and future effect designed to

implement ... law or policy.”

APA § 701 (a) This chapter applies, according to the provisions thereof, except to the extent that—

(1) statutes preclude judicial review; or(2) agency action is committed to agency discretion by law.

Citizens to Preserve Overton Park v. Volpe – substantive review in judicial review of whether agency action is arbitrary and capricious

Facts: Secretary of Transportation authorized construction of six-lane highway through public park. Plaintiffs argued Secretary violated portions of Dept of Transportation Act & Federal Aid Hwy Act that prohibits use of federal funds to build roads through park unless 1) there is no reasonable or prudent alternative and 2) all possible planning to minimize harm to the park has occurred. Secretary didn’t include factual findings in announcements regarding approval of highway’s route/design, didn’t indicate why no feasible and prudent alternative routes existed or why design changes couldn’t be made to minimize harm to park.

Holding: defendant acted within scope of his authority, but failed to make formal findings and state reasons for allowing highway to be built through park hampers the court’s analysis of whether decision was arbitrary and capricious.

o “to make this finding the court must consider whether the decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment.”

Rule: to survive judicial review of agency action, agencies must maintain records to support their decisions in informal proceedings.

o In applying the arbitrary and capricious standard to judicial review of agency action, the focal point for judicial review should be the administrative record

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already in existence, on materials before the agency at the time its decision was made.

Rule (Sant’Ambrogio): APA and Overton Park: presumption of judicial review for agency action unless:

o Statute precludes, oro Committed to agency discretion – narrow exception where no law to apply

Includes certain type of agency decisions, such as whether to bring an enforcement action

Rule: When reviewing an agency decision, the Administrative Procedure Act (APA) requires courts to consider: (1) whether the agency acted within the scope of its authority; (2) whether the agency’s actions were arbitrary and capricious; and (3) whether the agency’s action met the necessary procedural requirements.

Rule: “Post Hoc” rationalizations are traditionally inadequate basis for review. Note: APA’s requirements regarding formal findings in certain rulemaking and

adjudicatory proceedings do not apply her; neither does de novo; nor “substantial evidence”

**Under the hard look test, the reviewing court scrutinizes the agency’s reasoning to make certain that the agency carefully deliberated about the issues raised by its decisions – require that agencies offer detailed explanations for their actions. The explanation must address all factors relevant to the agency’s decision.

A court may reverse a decision if the agency fails to consider plausible alternative measures and explain why it rejected these for the regulatory path it chose.

If agency route veers from road laid down by its precedents, it must justify the detour in light of changed external circumstances or a changed view of its regulatory role that the agency can support under its authorizing statute.

The agency must allow broad participation in its regulatory process and not disregard the views of any participants.

Courts have, on occasion, also invoked a rigorous substantive standard by remanding decisions that the judges believed the agency failed to justify adequately in light of information in the record.

Motor Vehicle Manufacturers Ass’n v. State Farm – what does arbitrary and capricious review require?

Facts: statute gave National Highway Traffic Safety Administration task of keeping everyone safe in car manufacturing industry. Sectretary of Transportation promulgated rule that all cars must have passive restraint system – produced studies showing it would save lives. Few years later, issued notice reopening rulemaking proceedings rescinding passive restraint rule because it couldn’t find significant safety benefits to it, although manufacturers planned to install automatic seatbelts to almost every new car to be produced. Issued final rule rescinding rule’s passive restraint requirement.

Holding: NHTSA explanation was insufficient to enable the court to conclude that rescission of rule was product of reasoned decision-making; gave no consideration to modifying the standard to require utilization of only airbag technology.

o NHTSA also didn’t suggest that emergency release mechanisms used in nondetachable belts were any less effective than buckle release system used in detachable belts with respect for emergency egress.

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Rule: “the agency must examine the relevant data and articulate a satisfactory explanation for its action including a ‘rational connection between the facts found and the choice made.’”

o Agency action is arbitrary and capricious if “agency has relied on factors which Congress has not intended it to consider, entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise.”

Rule (Sant’Ambrogio): Arbitrary and Capricious Review – in sum, did the agency…o Rely on prohibited factor(s)?o Fail to consider required factor(s)?o Fail to provide adequate explanation of choice?o Make a decision that runs counter to the evidence?o Use flawed reasoning?o Fail to respond/consider substantial arguments or comments, or an important

aspect of problem?o Fail to consider important alternative without justification?o Impose a sanction greatly out of proportion to the violation?

FCC v. Fox – agency changes of policy Facts: FCC’s original enforcement policy distinguished between literal use of offensive

term vs. nonliteral use. Fox’s programs used offensive terms, FCC then abandoned original policy in favor of new policy that would allow it to initiate disciplinary proceedings against Fox, explaining its change because 1) constraints original policy placed on FCC enforcement efforts; 2) recent court cases that implicitly removed any legal basis for distinguishing between literal and nonliteral uses of offensive terms; and 3) new bleeping tech. FCC applied new policy, found Fox had violated regulations.

Holding: FCC didn’t have special circumstances that required it to explain why old policy’s constraints had become intolerable or to indicate whether less drastic rule changes could provide an adequate response to recent case law and tech developments.

o FCC openly explained why it was changing its policy Rule: APA doesn’t require agency to show its new policy is preferable to existing policy

it replaces.o “it need not demonstrate to a court’s satisfaction that the reasons for the new

policy are better than the reasons for the old one; it suffices that the new policy is permissible under the statute, that there are good reasons for it, and that the agency believes it to be better, which the conscious change of course adequately indicates.”

Rule (Sant’Ambrogio): Agency should be aware that it is changing its positiono Must show good reasons for new policy, but not that better than the reason for the

old policy Suffices that the new policy is permissible under statute There are good reasons for it, and The agency believes it’s better, which the conscious change of course

adequately demonstrateso But sometimes [exceptions]:

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If contradicting prior factual findings or Has engendered serious reliance interests, Arbitrary and capricious not to explain why disregarding those facts and

circumstances

Heckler v. Chaney – is agency decision not to enforce the law reviewable? Facts: lethal injection drugs – appealed to FDA, prisoners on death row as FDA to take

enforcement action against states using specific drugs because they were not safe or intended for the way states were using them. FDA refused because 1) they weren’t sure they had jurisdiction and 2) generally enforcement proceedings are initiated only when there is “a serious danger to the public health.”

Holding: FDCA provides no substantive standards against which courts may base review. Rule: APA 701(a)(2) exception is very narrow in cases of affirmative agency action

(agrees with Overton Park), but an agency decision not to enforce the law is presumed unreviewable (distinguished from Overton Park)

o Presumption can be rebutted where the substantive statute has provided guidelines for the agency to follow in exercising its enforcement powers.”

o “shall” does not necessarily rebut the presumption of unreviewability (Sierra Club v. Jackson)

Rule (Sant’Ambrogio): Agency decisions not to enforce a statute presumptively unreviewable because:

o Complicated balancing of factors peculiarly within agency expertiseo Not exercising coercive power over individualso No focus for judicial reviewo Akin to decision of prosecutor not to indict

Rule (Sant’Ambrogio): agency decisions not to enforce a statute presumptively unreviewable unless:

o Standards to guide agency discretiono Agency claims it lacks jurisdiction?o Agency abdicates its responsibilities under the statute?o Non-enforcement violates constitutional rights?o Failure to institute rulemaking?

**Presumptive unreviewable: Agency enforcement decisions (Heckler) Agency refusals to reconsider action Agency employment termination decisions Agency allocation of lump-sum appropriations

Massachusetts v. EPA – can agency decisions not to engage in rulemaking be reviewable? Facts: Plaintiff MA alleged EPA failed to regulate greenhouse gas emissions from new

car under CAA. EPA claimed CAA didn’t authorize agency to issue regulations to address global climate change, and that it wasn’t wise to regulate emission at the time.

Holding: On the merits, EPA has jurisdiction to regulate greenhouse gas emissions from automobiles.

o On the merits, EPA’s denial of the petition for rulemaking was arbitrary and capricious

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Rule (Sant’Ambrogio): agency decisions not to engage in rulemaking are reviewableo Reasons for inaction must be grounded in the statute, not the President’s priorities

Rule: agency’s decision not to engage in rulemaking is reviewable, though this review is “extremely limited” and “highly deferential.”

o However, if statute that delegates authority to the agency includes no standard that constrains the agency’s decision whether or not to adopt a regulation, courts can’t review agency’s rejection of a rulemaking petition.

Norton v. SUWA – when is agency’s failure to act reviewable? Facts: agency is required to manage public funds pursuant to statute, which stated

designated wilderness areas generally can’t have commercial enterprise, permanent road, motorized vehicles, manmade structures. Agency established policy in favor of retaining public lands for multiple use management, Secretary of Dept Interior identified certain areas to be subjected to further examination and further comment to evaluate their suitability as a wilderness designation. Off-road vehicles were being used – plaintiff sued.

Holding: statute mandates continued management of these areas in manner that doesn’t impair their suitability of such areas for wilderness preservation but statute leaves agency significant discretion in deciding how to achieve this goal.

o Because statute doesn’t mandate total exclusion of off-road vehicle use, APA 706(1) doesn’t authorize review.

Rule: an agency’s failure to act is reviewable agency action only if it involves failure to take a “discrete” action that is legally “required.”

o APA § 551(13) – “failure to act” is included in definition of “agency action.” Rule (Sant’Ambrogio): Failure to act must be failure to take a discrete action that is

legally requiredo “Failure to act” = failure to take one of the five actions (or equivalents) listed in §

551(13)o Each is discrete action: rule, order, license, sanction, etc.o Ejusdem generis – “birds of a feather fly together”o Must be legally required because APA 706(1) authorizes courts to “compel

agency action unlawfully withheld”o Failure to act not the same as denial – omission of action without formally

rejecting versus saying no to a request.**leading case on judicial power to remedy agency delay – Telecomm. Research and Action Center v. FCC

If statute contains timetable for agency action, that provision might supply content for judicial decision mandating that the agency follows timetable

Delays less tolerable if human health/welfare are at stake instead of money

Analyzing Agency Action: Delegation issues – can Congress give the agency this power? Design issues – can Congress restrict removal power? Other types of constitutional constraints – due process Did the agency meet the procedural requirements of APA? Did the agency correctly interpret the law?

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Are the agency’s factual findings supported by substantial evidence or arbitrary and capricious?

Is there a rational connection between the facts found and the choice made – arbitrary and capricious review

Is the agency action reviewable at all?

APA § 551(13) “agency action” includes “the whole or part of any agency rule, order license, sanction,

relief, or the equivalent or denial thereof, or failure to act.

APA § 706(1) Authorizes courts to “compel agency action unlawfully withheld or unreasonably

delayed.”

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SUBSTANTIVE CHALLENGE FLOWCHART (zoom in)

EX PARTE COMMUNICATIONS FLOWCHART (zoom in)

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ADJUDICATION VS RULEMAKING FLOWCHART (zoom-in)

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DUE PROCESS FLOWCHART (zoom-in)

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DELEGATION OF POWERS FLOWCHART

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