Administrative_Law - Goldberg- [1] (2)

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Administrative LawSection W1 - Spring 2007 Goldberg

1. Administrative Law Practice AKA Introduction to Administrative Law

a. What is Administrative Law and Why Should We Study It?i. Administrative law, broadly conceived, includes two different facets: the law that governsagencies and the law that agencies make.

1. the law that governs: substantive law2. the law that agencies make: administrative law

b. Why you should study may be less clearseveral answers:i. You might work as a lawyer for a government agency, in which case administrative law will

govern many of your agencys activities in the same way that substantive law governs privateactors

ii. As a lawyer in private practice, you may be faced with an agency taking some action thatmay be beneficial or detrimental to your client.

iii. Studying the law that governs agencies is like an extension of Constitutional law; you learnabout how the legal system as a whole operates, the interrelationship at the federal levelbetween Congress, the President, agencies, and the courts. This in turn will make you abetter lawyer.

c. An agency lawyer serves three general functions in the rulemaking process:i. Lawyer ensures that the agency complies with the applicable rulemaking procedures, and he

or she helps other agency staff to write legal documents that those procedures require.ii. The lawyer may be asked to give a legal opinion whether certain regulatory options are

within an agencys statutory authorityiii. Agency lawyers help defend the agency in court if a rule is appealed.iv. NOTE : Regulatory lawyers in places like trade associations, interest groups, corporations, or

lawyers with on-going clients have the responsibility of looking at the Federal Register eachday to determine whether an agency has proposed a rule, or issued some other notice, aboutwhich their client or organization should be aware.

d. What is an agency?i. The APA defines agency as, each authority of the Government of the United States, whether

or not it is within or subject to review by another agency (exceptions apply).1. Exceptions include Congress (APA explicitly excepts), the Courts (APA explicitly

excepts) and the President (Franklin v. Massachusetts).2. Agencies include departments, their subsidiaries and government corporations.3. Departments are agencies and they have the highest status.4. Generally Congress passes statutes to create agenciescalled enabling acts.5. Congress also has the power of the purse to help them control the agencies.6. Independent agencies are freestanding agencies, which are not part of any

department.a. Examples include:

i. National Labor Relations Board (NLRB)ii. Securities and Exchange Commission (SEC)

iii. Federal Reserve Board (FRB)iv. Federal Trade Commission (FTC)


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b. More independent from the Presidents influence than executive agencies b/c:i. Headed not by a single person but by a multi-member group (e.g. a

commission, council, board or conference) that reaches decisions bymajority vote

ii. Members of the group heading the independent agency normally can

only be removed for cause (thus mere political disagreement with thePresident would not be grounds for removal)iii. Members of the group heading the agency serve for a term of years

(generally 5 years) on a staggered basis, so that a President in a singleterm cannot replace the entire group

iv. The statutes creating independent agencies normally require that nomore than a simple majority of the agency can come from a singleparty. In other words, in a commission of five members, no more thanthree could be from one party.

7. Executive agencies are all departments and almost all the agencies within thedepartments.

a. Examples include:i. Social Security Administration (SSA)ii. Environmental Protection Agency (EPA).

b. More dependent on the Presidents influencei. Headed by a single person

ii. Head generally serves at the pleasure of the Presidentiii. Head serves until they resign or are firediv. Head is typically members of the Presidents political party

8. Federal v. State: The aforementioned refer to federal, differences for state include:a. Many agencies are headed by elected officials, rather than officials appointed

by the governor.b. Thus, many agencies are directly accountable politically and may not be

subject to the supervision of the governor.c. In fact, these agency heads may be political rivals of the governor and

therefore there is a less deferential, more competitive dynamicii. Agency hierarchy:

1. Administratora. the final decision maker on agency rules, the ultimate judge in agency

adjudications, and the court of last resort in intra-agency turf battles.b. With the final say over the allocation of resources, the administrator

determines agency priorities and decides which offices play what roles in thedecision making process.

c. Principal spokesperson for the agency and the primary focal point ininteractions between the agency, the White House, Congress and the public.

2. Deputy Administrator has only such institutional power as the administrator cares todelegate.

3. Nine politically appointed assistant administrators responsible for several officeswith several regulatory programs

4. Office Director the highest level nonpolitical appointee


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a. actual managers of agency regulatory programs, and they are the officialsprimarily responsible for the substance of agency rules.

b. most easily accessible to regulates and the important citizen groups.c. assumes responsibility for all of the agencys substantive rules under a

particular statute.

d. A senior civil service employee and is aided by a deputy director of almostequal status.5. Staff Sergeants/Branch chief supervises a staff of agency professionals who do the

actual work of writing and compiling the technical support for agency rules.6. Agency professionals: scientists, engineers, and other professionals with training or

experiences in environmental management.iii. What do Agencies do?

1. Regulate Private Conducta. Agencies primarily engaged in regulating private conduct are called

regulatory agenciesb. Regulate consumer protection, preservation of the environment, individual

health and safety, economic welfare, and other economic and social goals.c. Examples include:i. Occupational Safety and Health Administration (OSHA) (to regulate

workplace health and safety practices)ii. Federal Trade Commission (FTC) (regulates trade practices by

commercial entitiesd. Justifications for Regulation

i. The government can remedy or at least mitigate imperfections createdby our private market system.

ii. Regulation is used to conform market outcomes to social values, suchas fairness or equity, or to other social aspirations. The operation ofunregulated markets may also produce results or consequences themajority of the public find unacceptable.

2. Administer Entitlement Programsa. Generally, AEP dispense state and federal funds to the proper recipients.b. Examples include Medicare, Medicaid, social security and foodstamps.

3. Everything else- some examples that dont fall under either above category.a. IRSb. Citizens and immigrationc. Department of Homeland securityd. Department of the Treasury

2. Overview of the Procedural Acta. Definition of Adjudication and Rulemaking

i. Adjudication is the agency process for the formulation of an order. 551(7).1. Adjudication is when an agency applies an existing rule or statute to a set of facts to

determine what is required by the rule or statute.2. An order is the whole or part of a final disposition other than rule making but

including licensing. 551 (6)ii. Rulemaking is the agency process for formulating, amending, or repealing a rule. 551(5)


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1. A rule is an agency statement of future effect designed to implement, interpret, orprescribe law or policy. 551(4)

2. Rules are published in the Federal Register.3. Rulemaking is subject to judicial review.

b. Rulemaking: Two types (ok maybe three)

i. Informal rulemaking: used most often.1. Section 553 establishes a three-step process for informal rulemaking.a. An agency is required to publish a notice of the proposed rule in the Federal

Register with two exceptions. (Give Notice)i. Interpretive rules, general statements of policy, or rules of agency

organization.ii. When the agency has good cause for bypassing the notice stage of

rulemaking. Notice and procedure are impractical, unnecessary orcontrary to the public interest.

b. Agency must give interested persons an opportunity to participate in the rulemaking through submission of written data, views, or arguments with or

without opportunity for oral presentation. (Inviting written comments)c. Agency must incorporate in the rules adopted a concise general statement oftheir basis and purpose. (justify the rule in a statement of basis and purpose)

2. Judicial interpretation of 553, which has imposed additional procedural obligations onagencies. (Yankee changes thisso that the court cannot add additionalrequirements.)

3. An agency may have to utilize procedures imposed by sources other than the APA.4. The agency may wish to take advantage of certain mechanisms for developing rules,

which entail special procedures.a. An agency may desire to develop a rule through consensus-building among

interested parties called regulatory negotiationb. An agency may want to obtain the advice of outside persons before proposing

a rule.5. Executive agencies must comply with executive orders issued by the President

a. Such as E.O. 12,866, which requires agencies to prepare a regulatory impactanalysis for any significant regulatory action, which must then be submittedfor approval to the Office of Information and Regulatory Affairs (OIRA), anoffice in the White House, which has the function of monitoring the agencyscompliance with the executive order.

6. Rulemaking is impacted by the nature of the internal procedures, incentives, andmanagement methods used by an agency. The regulations the agency chooses toenforce upon itself.

ii. Formal rulemaking: used only when required. An agency follows the procedures outlined in556-57.

1. The test for when an agency must use formal rulemaking appears in 553(c).a. When rules are required by statute to be on the record after an opportunity for

agency hearing.iii. Hybrid rulemaking: (not really a separate type)

1. Created by Congress by imposing particular rulemaking procedures on programs andagencies created by Congress since the APA.


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2. Also created when agencies impose procedures on themselves.3. Referred to as hybrid b/c they invariably add some additional procedures to section

553s requirements, while not going so far as to mandate the procedures of sections556-57.

3. Initiating Rulemakinga. Df: of Rulemaking when an agency promulgates a regulation that has the same force and effect asif it had been passed by Congress or a state legislature. Rulemaking beings with a notice of theproposed rulemaking and ends with publication of the final rule.

i. Not all agencies have the rulemaking powerb. Why propose a rule?

i. Statutory commandii. In response to staff recommendations

iii. As a result of a rulemaking petition from an interested personiv. Due to political pressure from the legislative or executive branches

c. Sources of Proposed Legislation

i. Most common source is legislation requiring specific regulations, often by a particular timeor upon the occurrence of certain events.1. Often a statute mandates the agency adopt rules generally to protect safety or in the

public interest, convenience or necessity and it up to the discretion of the agencies todetermine what, if anything, needs to be regulated and when regulation is appropriate

ii. Bottom up approach: Staff recommendations may arise in a variety of1. Staff members may suggest that a rule is necessary when they identify problems that

the agency should address based on such things as new scientific research, regulatorydevelopments in other countries, or recommendations by private standard-settingorganizations.

2. The agencys enforcement efforts will produce information that can be used todetermine how well existing regulations are being met and what aspects of theregulations are not working or are unrealistic.

3. The agency might have a formal system of priority-setting that identifies potentialrulemaking subjects and ranks them according to their importance.

iii. Top down approach: White House and Congress1. White House contacts a particular agency to suggest an issue worth of agency

priority. Done through he Office of Management and Budget.2. Congress can threaten to reduce an agencys budget or to attach an appropriations

amendment that limits future agency action. Ability to bring the agency beforetelevision cameras and start investigations.

3. The public.a. Acting indirectly through legislators or executive officials, lobbyists

representing a segment of the public can generate political heat that triggersthe top-down approach.

b. Lobbying can also be done at the staff level to create an interest in a possiblerule.

c. The APA provides that each agency shall give an interested person the rightto petition for issuance, amendment, or repeal of a rule. 553(e)

iv. PROBLEM 2-1: Lobbying the Agency.


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1. Go as low as you possibly can on the agency hierarchy.2. Amending is the same as rulemaking. 551(b)3. 553(e) mandates that an agency review your petition.4. Where do you find existing regulations? CFR. Code of Federal Regulations.5. Page 53 has the chart of the EPA hierarchy.

d. Petitions for Rulemakingi. Administrative Conference of the United States (ACUS) recommended that agencies adoptbasic procedures for the receipt, consideration and prompt disposition of petitions forrulemaking, including procedures for publicizing the address for filing petitions and whatshould be included in their contents, the maintenance of a public petition file, and acommitment to prompt notice of a petitions disposition.

ii. APA mandates a 555(b) reasonable time to response and 555(e) prompt notice of denial1. Agency inaction: 551(13) Df of agency actionwhich includes a failure to act.

Agencies typically use the excuse of limited resources when pressed as to why theydidnt act.

2. Courts can order the agency to make a decision

iii. PROBLEM 2-2: How do you get to court? 702: The right to review. 706(1): Courts cancompel agency action if they have been unreasonable. 706(2)(a) what is unreasonable.capricious or otherwise not in accordance with the law. Goldberg said that was verydeferential.

iv. Telecommunications Research & Action Center v. Federal Communications Center.1. The time agencies take to make decisions must be governed by a rule of reason2. where Congress has provided a timetable or other indication of the speed with which

it expects the agency to proceed in the enabling statute, that statutory scheme maysupply content for this rule of reason

3. delays that might be reasonable in the sphere of economic regulation are less tolerablewhen human health and welfare are at stake

4. the court should consider the effect of expediting delayed action on agency activitiesof a higher or competing priority

5. the court should also take into account the nature and extent of the interestsprejudiced by delay

6. the court need not find any impropriety lurking behind agency lassitude in order tohold that agency action is unreasonably delayed.

7. Holding: B/c they did not meet self proclaimed timelines, the court will retainjurisdiction over case in order to protect the constitutional rights of the individual.

8. Very hard to get a court to command agency to act on proposed section.9. Inaction can also arise when the rulemaking has begun but the agency has not

concluded.v. Denial of petition

1. Is the denial lawfuldoes the agency have authority?2. Is the denial factual or is it just not important enough?

vi. PROMBLEM 2-3: Very hard to get the court to overturn an agencys finding unless agencyhas been egregious or completely ignored the findings. Refer to the spotted owl case for theexpectation rule.

4. Rulemaking Procedures


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i. Exceptions1. General Exceptions

a. None of section 553(a) applies to certain types of rulesi. Agency management or personnel

ii. Public property, loans, grants, benefits or contracts

b. Although some may be exempt from 553 they are not exempt from 552generally known as the Freedom of Information Act2. Exceptions from Notice and Comment

a. Rules of agency procedure or practiceb. Interpretive rule 553(b)(a)c. General statements of policyd. Other rules for which notice and public procedure are impracticable,

unnecessary and contrary to the general public.i. Requires the agency to find a good cause for invoking the exception.

553(b)(b)3. New Deal: 1930 govt grew and regulated many businesses that created backlash that

was put on hold after WWII. The APA was a way to . Business is ultimatelyinterested in getting govt off its back.4. Benefit v. Burden argument: The question to ponder is the benefit the law provides to

the public weighed against the burden to be bourn by those who are regulated.5. PROBLEM 2-4: It can be argued that the EPA was not implementing a new rule but

modifying a current practice. At issue is whether this is change is procedural orsubstantive.

a. Using the label procedural isnt that easy. The line in between proceduraland substantive is fuzzy. If the impact is limited to how info is presented tothe agency then it is procedural. If it alters the rights or interests of regulatedparties, then it is substantive.

b. Courts say that in order to invoke formal procedures the enabling statute hasto use the magic words of 553 on the record after agency hearing. Theselanguage bumps it up to formal rulemaking. US. v. Allegheny-Ludlum StellCorp and United States v. Florida East Coast Railroad Co.

ii. Formal, Informal or Hybrid Rulemaking1. Hybrid rulemaking comes from Congress imposes additional rules and regulations

voluntarily adopted by the agency. FINAL QUESTION: Two ways to have hybridrulemaking: Congress and Agencies.

2. Vermont: Courts cant impose hybrid rulemaking. Only Congress and the agenciescan impose hybrid rulemaking.

3. 553(c) is what makes it go informal to formal rulemaking.4. PROBLEM 2-5: Logical outgrowth in character with the original scheme. The court

found the chocolate milk case was a bait and switch. Test devised by the court wasthat if the changes in the original plan are in character with the original scheme andthe change is a logical outgrowth, then its ok. Its precedent but remember that itmay be limited to narrow applicationi.e. bait switch cases, by Distinguishment.

iii. Informal Rulemaking Requirement1. Notice


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iii. Is the agencys compliance with the analytical requirements subject tojudicial review, and if so, what relief can the court grant to plaintiffs?

b. National Environmental Policy Act (NEPA)i. Requires agencies to make Environmental Impact Statements (EIS)

before engaging in activities (including rulemaking) that may have a

significant effect on the human environment. EIS statement isntbinding, however, so this is a procedural, rather than substantive,requirement.

c. Regulatory Flexibility Act (RFA)i. Requires agencies to create a Regulatory Flexibilty Analysis (RFA)

whenever they propose a rule that may have a significant economicimpact on a substantial number of small businesses, organizations orgovernments.

ii. Only applies to executive agencies.d. Paperwork Reduction Act

i. Overruled the Supreme Courts decision in Dole v. United

Steelworkers of America, in which the Court had held that the actsrequirements did not apply to govt demands on private persons tosupply information to the public, as in product labeling requirementsor workplace safety notices.

e. Executive Order 12866 (replaced E.O. 12,291)i. Agencies are required to assess the benefits and costs of proposed and

final significant action rules, and the OIRA (Office of Informationand Regulatory Affairs) has the responsibility to oversee agencycompliance.

ii. Regulating the regulatorsiii. Significant is interpreted as 100 million dollarsiv. Applies only to executive agencies

f. Unfunded Mandates Reform Act of 1995i. Requires federal agencies, before promulgating either a proposed or

final regulation that would include a mandate resulting in cost over$100 million annually on state, local or tribal govts or the privatesector, to prepare a statement assessing the effect of the regulation.

ii. The agency must consider a reasonable number of regulatoryalternatives.

iii. The agency must then select the least costly, most cost-effective orleast burdensome alternative that achieves the objectives of the rule.

g. Congressional Review of Agency Rulemakingi. Requires agencies to delay the effective date of the rule for 60 days,

except in certain circumstances, during which time Congress can passresolution rejecting a regulation which becomes law if signed by thePresident.

h. Data Quality Act (DQA)i. Requires agencies to issue guidelines that ensure and maximize the

quality, objectivity, utility, and integrity of information that theydisseminate, to establish an administrative process that allows affected


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persons to seek and obtain correction of information that does not meetthose benchmarks, and to report yearly to the Office of Managementand Budge (OMB) concerning receipt and resolution of complaints.

ii. Replaced by the IQAi. Information Quality Act (IQA) - Same as DQA except:

i. Government-wide guidelines were issued to agencies concerningimplementation of the act that required that independent scientists peerreview most of the scientific information disseminated by the govt.

v. Negotiated Rulemaking1. an agency and other parties with a significant stake in a rule participate in facilitated

face-to-face interactions designed to produce consensus.2. Together the parties explore their shared interests, as well as differences of opinion,

collaborate in gathering and analyzing technical information, generate options, andbargain and trade across these options according to their differing priorities.

3. If a consensus is reached, it is published in the Federal Register as the agencys noticeof proposed rulemaking and then the conventional review and comment period takes

over.5. Judicial Review of Rulemakinga. Statutory Interpretation

i. APA directs reviewing court to hold unlawful agency action not in accordance with the law706(2)(A) and agency action in excess of statutory jurisdiction, authority, limitations, orshort of statutory right 706(2)(C)

ii. Chevron v. Natural Resources Defense Council, Inc. p. 1461. Chevron Two Step

a. Whether Congress has directly spoken to the precise question at issue.i. Non-deferential review (de novo)

ii. If the intent of Congress is clear that is the end of the matter as theagency (and the court) must give effect to unambiguously expressedintent of Congress. STOPdo not pass Go.do not collect $200.00

iii. If the court determines that Congress has not directly addressed theprecise question at issue, then the court does not simply impose itsown construction on the statute, as would be necessary in the absenceof an administrative interpretation. There are two ways to determine ifCongress has answered the precise question.

1. Text do not read into the words at all, just a face valueapproach of the words. (Scalia)

2. Interpret the text using traditional statutory interpretativetools such as legislative history and records.

b. If the statute is silent or ambiguous with respect to the specific issue, thequestion for the court is whether the agencys answer is based on apermissible construction of the statute.

i. Highly deferential review. (Reasonable) Why defer?1. agencies are most representative of the people2. more politically agreeable to let the agency to fill in the gaps as

opposed to the judiciary


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a. gaps may have been left purposely by Congress so itwould be passed

b. Agencies have the expertise in the subject matter. Sotheyre the best person to fill it in.

ii. If Congress has explicitly left a gap for the agency to fill, there is an

express delegation of authority to the agency to elucidate a specificprovision of the statute by regulation.iii. Such legislative regulations are given controlling weight unless they

are arbitrary, capricious, or manifestly contrary to the statute.iv. A court may not substitute its own construction of a statutory

provision for a reasonable interpretation made by the agency.v. Interpretation does not have to be the best, merely a reasonable one.

2. Applying Chevrona. Step Zero: Courts decide whether to apply Chevron to the agencys statutory

interpretation.i. The use of rulemaking does not necessarily guarantee that Chevron

will apply. There are some circumstances in which despite aseemingly broad grant of rulemaking authority under a statute, theagency has not actually been granted lawmaking authority, and hencelacks interpretive authority over an issue that can arise under thestatute.so the Chevron two step would not apply.

b. Step One: The court determines whether the statute clearly requires or forbidsthe agencys interpretation.

i. Standard of Review: independent judgment of the court1. In some cases, the Court determines ambiguity under a plain

meaning test.2. In other cases, the court will move to step two ONLY if it

cannot resolve an ambiguity by applying tools of statutoryconstruction like legislative history or inferring legislativeintent from the statutes animating principles.

c. Step Two: If the statute does not clearly answer the question of Step One (orin other words the statute is ambiguous) the court determines whether theagencys interpretation is reasonable or permissible.

i. Standard of Review: highly deferential to the agency1. Two approaches

a. Courts examine statute to determine whether it cansupport the particular interpretation adopted by agencyby measuring interpretation against congressionallyestablished limitations.

b. Courts evaluate whether the agency, in reaching itsinterpretation, reasoned from statutory premises in awell-considered fashion, i.e. is the interpretationsupported by a reasonable explanation and is logicallycoherent (much like the arbitrary and capricious test).

c. NOTE: As of 1991, the Supreme Court had neverfound that an agencys interpretation failed step two.


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d. PROBLEM 2-9: Applying Chevronb. Substantive Decisions

i. When an agency promulgates a rule, it reaches two types of substantive decisions1. Determines on the basis of the evidence available to it, what are the relevant facts2. Decides what type of rule, if any, is appropriate in light of those facts, choosing the

regulatory option that will best further its statutory mandateii. Section 706 authorizes courts to review both decisions when it mandates that the reviewingcourt shall hold unlawful and set aside agency action, findings, and conclusions found to be (A) arbitrary, capricious, an abuse of discretion or not otherwise in accordance with the law;[and] (E) unsupported by substantial evidence in a case subject to sections 556 and557. Judicial review of the agencies substantive decision under 706 involves three issues

1. Scope of Reviewa. Substantial evidence standard - court is to uphold a rule if it finds the agencys

decision to be reasonable or the record contains such evidence as areasonable mind might accept as adequate to support a conclusion.Consolidated Edison v. NLRB

i. Requires the decision to be supported by evidence in a recorddeveloped in a trial-like proceedingb. Arbitrary and Capricious standard very deferential, essentially the

equivalent of judicial review of economic regulation under substantive dueprocess.

i. Standard is narrow. See Motor Vehicle case. P. 175ii. No record required

iii. Challenger must prove that there were no facts or good reasons tosupport the agency action. CHANGED BY.

iv. Citizens to Preserve Overton Park v. Volpe

1. Supreme Court defined the arbitrary and capricious standard asrequiring the reviewing court to engage in a substantial inquirya thorough, probing in-depth reviewto find arbitrariness, thecourt must consider whether the decision was based on aconsideration of relevant factors and whether there has been aclear error of judgmentAlthough this inquiry into the facts isto be searching and careful, the ultimate standard of review isto be a narrow one. A hard look

a. Must have a record to reviewb. Requires agency to give a plausible

explanation/otherwise remanded to the lower courtc. Convergence of the two standards

i. Overton Parkinitiated concept of a record for an informal agencyproceeding. Overton Parkalso is the origin of the need for an agencyto explain its decision in informal proceedings.

ii. Therefore, the only real difference between the two standards is themeans by which the record is created and what might be in it.

iii. Another difference may be that the standard choice is a mood pointwhich sets the critical attitude with which a court should approach anadministrative decision.


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2. Rulemaking Recorda. Section 706 requires that a court review the whole record when determining

whether to affirm a rule.b. Overton Park defined the whole record for informal proceedings to be the

information that the agency actually considered in making the decision.

i. Normally composed of the Federal Register notices for the proposedand final rule, the comments that were submitted, and any studies ordata created or used by the agency that were not published in thenotices.

c. Difference between judicial review of a trial-like proceeding and a rulemakingis the nature of the factual determinations an agency is making

i. Formal: nature of the facts usually relate to what happened in the past.ii. Rulemaking: the facts at issue relate to what will happen in the

future (thereby justifying a regulation to prevent it.)3. Adequate Explanation

a. A rule will be remanded if an agency cannot provide adequate explanation

b. An agency rule will be deemed arbitrary and capricious if the agency:i. Relied on factors which Congress has not intended it to considerii. Entirely failed to consider an important aspect of the problem

iii. Offered an explanation for its decision that runs counter to theevidence

iv. Is so implausible that it could not be ascribed to a difference in view orthe product of agency expertise.

v. Explanation must be provided by the agency. The court cannot find apermissible explanation for the agencys actions. So even if theres agood reason, if the agency isnt the one to submit it, the court cannotok it on that basis.

c. Courts tend to remand back to the agency to develop explanation instead ofstriking down the rule.

d. Upon remand of a rule for inadequate explanation, an agency will quickly fixthe holes.

4. PROBLEM 2-10: Judicial Review of Substantive Decisionsc. Challenging the Agency Rule

i. PROBLEM 2-11: Do You Always Appeal?1. When a rule has an adverse impact on a companys business, several steps can be

taken to limit or avoid the costs of a judicial challengea. Effective advocacy during the legislative and rule-making processes

i. To be effective, advocacy must be based on carefully marshaled factsclearly presented, at the right time and in cognizance of the fullcontext of agency action, including constituency pressures

ii. Includes knowing when to compromise if the results of the legislationor rule-making would be preferable to results that could be obtainedthrough judicial review

2. If judicial challenge appears necessaryfour questions should still be considered:a. Are there alternatives to litigation?


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i. Ask the agency to interpret the rule so that its impact on the companyis lessened to a point at which it becomes acceptable.

ii. Convince the agency or the White House to reconsider the ruleiii. Persuade Congress to revise the rule legislatively.

b. Is the rule vulnerable to challenge?

i. Exceeds agencys statutory authority (must be substantial)ii. Unconstitutionaliii. Unreasonableiv. Not supported in the agencys recordv. Otherwise procedurally inadequate or improper

c. What results would be obtained by a successful challenge?i. If challenged on procedural grounds the rule will be stripped from

the books and the agency will have another shot to promulgate therule. So worst-case scenario, you only won a delay until the rule isproperly promulgated. In the best case scenario, there is a change ofadministration/personnel, and the rule wont be raised againor

revised enough to no longer adversely affect your client.ii. If challenged on substantive grounds (on the merits) then the rule ispermanently barred and the agency could never promulgate the rule(unless and until Congress amended the statute to allow for it).

d. What will a challenge cost, both in financial terms and in terms of thecompanys overall relationship with the agency?

3. Generally, one must determine whether the rule has been adequately explained, fairlyconsiders alternatives and has cost and benefits that are reasonably proportionate.

4. Courts have developed a set of relatively informal criteria by which to judge thesufficiency of the administrative record to support agency decisions.

a. Scope of competencei. Within the area the court views the agency as having substantial

competence ORii. At the boundaries of the agencys statutory competence

b. Whether the data upon which the decision relies is solidi. If within the area of competence, court is willing to forgo

ii. If at boundaries, court may remand for lack of datac. Whether the agency followed its own regulations and the basic notice-and-

comment procedures required by APAd. Whether the agencys process was adequate to meet the decision-making task

presented by a particular rule5. Ultimate cost of a judicial challenged is principally a function of two factors:

a. The size of the regulatory record on a given issue; andb. Whether a further appeal will be necessary to resolve the issue.

ii. PROBLEM 2-12: Appeal for Purposes of Delay?1. You always begin with the practical consideration. Will you client derive a benefit

from the delay?2. Straight face test: If you could persuade yourself that there is a plausible argument,

then you are justified in moving forward, even if its a very small chance of winning.


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If there is no plausible argument, then you violate Rule 11 of Civil Rules ofProcedure and delay would be unethical and impermissible.

3. Agency can decide to stay enforcement of a rule. So you could petition the agency todo that or if they wont ask the court for an injunction.

4. Irreparable harm means no money would make you whole. Then youd need to ask

for an injunction.

6. Adjudicationa. Introduction

i. Df: an agency applies an existing rule or statute to a set of facts to determine what outcomeis required by the rule or statute.

1. 551(7) the process for formulating an order2. 551(6) final

ii. Can be used to determine whether a regulated entity has violated an agency rule or aprovision of a statute that the agency enforces OR to determine whether a person or entityqualifies for some govt permit, benefit or entitlement.

iii. Not all agencies have the adjudication poweriv. Any agency process that results in a final disposition, which is not rulemaking, isadjudication. Includes everything from giving grandma SS or building a new power plant

b. Two types: formal v. informali. Formal: If the agencys mandate requires it to reach adjudicatory decisions on the record

after opportunity for agency hearing then the agency must use the procedures required insections 554, 556 and 557. Resembles a trial.

1. 554 agency must give notice and offer opportunity to reach settlement. The personpresiding at the hearing are forbidden from ex parte communication. Must holdhearing in accordance with 556 and 557.

2. 556 hearing procedure. Administrative law judges are technically administrativeemployees. Cannot be dismissed unless by hearing by another agency. They areindependent.

3. 557 appeals processii. Informal: The APA does not prescribe any procedures for informal adjudication but two

circumstances may require an agency to follow certain hearing procedures.1. The mandate statute might still require the agency use a specified hearing procedure

that does not rise to formal adjudication2. if the due process clause applies to the agencys action, it may be obligated to follow

some type of hearing process. The obligation of due process applies if the agencysaction will deprive a person of liberty or property.

3. Right to an explanation of the decision4. Right to have counsel if you can pay for it5. Right to a timely decision6. Right to subpoena (if that agency has subpoena power)

iii. How do you choose between Formal and Informal.1. Factors in determining how informal or formal an agencys adjudication should be. A

balancing of factors is required.a. Speed of the process. Informal is quicker.b. Efficiency


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c. Cost. Formal is more costlyd. Accurate result. Formal is more accurate.e. Want the agency to exercise its discretion.

2. Goldberg have the example of a nuclear power plan (a costly decision not made veryoften with huge consequences) versus granny getting SS (hundreds of SS applications

made each day with insignificant consequences)3. Magic words. on the recorda. 1st Cir. (Seacoast) Adjudication is assumed formal unless otherwise specified

as informalb. 7th Cir. (City of West Chicago) the magic words must appear or Congress

otherwise makes known its intent.c. D.C. Cir. (Chemical Waste) Post Chevron. As long as the agencys

interpretation (formal or informal) is reasonable, courts will defer based on theChevron two step analysis.

c. Adjudicatory Procedures

i. Notice1. 554(b) proceeding must begin with notice including the time, place and manner of thehearing, legal authority/jurisdiction and matters of fact and law at issue and who isbringing the suit.

ii. Intervenors1. 555(b) interested persons may appear before an agency (both informal/formal

rulemaking/adjudications)2. What does the right to appear mean? The nature of the appearance is vague. Could

be as an actual party to the action or only by filing an amicus curie brief.iii. Settlement

1. 554(c) and 556(c)(6) there should always be an opportunity before a hearing for theparties to resolve the dispute.

iv. Administrative Law Judges1. like a judge at a bench trial in civil court but the end result may not be a decision.

The ALJ often only provides an opinion and the enabling act specifies whether or notthat opinion is a final decision

2. 556(b) Three different groups that can hear a case.a. Agency head (usually only executive agencies)

i.b. Board members (non-executive agencies)c. ALJ

i. 556(c) lists the powers of the ALJsii. Generally they do one of three things (557(b))

1. Decide the case2. Make the case3. Solely create the record

3. Appeal authority w/in the agency is under the de novo standard4. 556(b) agencies are subject to disqualification due to personal bias

v. The Split Enforcement Arrangement


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1. When an agency splits the prosecutorial and adjudicative functions. Only OSHA andMSHA currently use the split enforcement method.

2. An independent board appointed by the agency for the purposes of determiningwhether agency regulations have been violated.

3. The board only determines whether regulations were violated. It is unable to interpret

the statute/regulations. Complete deference by the board to interpretations handeddown by OSHA.vi. Burden of Proof

1. 556(d) An agencys decision must be supported by and in accordance with reliableprobative substantial evidence. Substantial evidence refers to the quality of theevidence.

2. Hearsay evidence can be admitted as long as its not irrelevant, immaterial or undulyrepetitious. It could even be the sole evidence (arguably) if it is reliable, probative,and substantial.

a. Wallas v. Bown: Would not allow hearsay evidence after trial b/c the otherside had no ability to subpoena.

b. Richardson: Hearsay evidence would be admitted b/c it was during trial andthere existed an opportunity for the other side to subpoena.vii. Testimony and Documents

1. 556(d) agencies only have to permit such cross examination as is required for a fulland true disclosure of the facts

2. Agencies can offer either oral or writtenviii. The Records and Ex Parte Communications

1. Recordsa. 556(e) the transcript of testimony and exhibits together with any papers filed

in the proceeding constitutes the exclusive record for decisionsb. A major difference between formal/informal records is that informal records

are not necessarily compiled in a proceeding.2. Ex Parte Communications

a. 557(d) extra agency communications. Interest person outside of agency.i. Df. Interested person. See p. 240. Any person with a greater than

general interest than the public as a whole may have.b. 554(d) intra agency communications. Inside the agency you cant talk to

people off the record.c. Nothing in the APA bars exparte communication in informal

rulemaking/adjudication. However, there may be other sources of law that dod. Df: An oral or written communication not on public record w/respect to

which reasonable notice to all parties is not given but it shall not includerequests for status reports on any matter or proceeding covered by APA551(14).

e. Remedies for ex parte communicationsi. Disclosure of the communication and its content

ii. Violating party needs to show cause why his claim or interest in theproceeding should not be dismissed, denied or adversely affected onaccount of the ex parte communications 557(d)(1)(d)


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iii. Most people dont care about ex parte communication if it has noeffect

iv. Factors to see if the ex parte communication caused the decisionmaking process to be irrevocably tainted.

1. gravity of the ex parte communications

2. influence on ultimate decision3. whether or not the person making the contact benefited4. were the discussions public knowledge5. contents were unknown to opposing parties so there was no

opportunity to respond6. if vacation of the agencys decision and remand for new

proceeds would serve a useful purposeix. Appeals

1. Under the APA, agencies have all the power it would in an initial proceeding. Denovo review.

x. State Adjudication

xi. Applying Adjudicatory Proceduresd. Ex Parte Communicationsi. APA prohibits ex parte during formal rulemaking (and adjudication) but no such ban exists in

informal proceedins (rulemaking & adjudication).ii. Df: 551. Oral or written communication not on the public record to which reasonable prior

notice was not given.iii. Problem 3-3:iv. Problem 3-4:v. 554(d) - internal

vi. 557(e) externalvii. Factors: gravity of the communication, influence exerted by the communication, if the party

benefited, if it was unknown to opposing parties that did not have a responsibility toresponse, would vacation serve a useful purpose.

viii. Stone v. Federal Deposit Insurance Corp. case: Three factors for1. cumulative info or info that the court did not know about?2. was there notice and an opportunity to respond?3. whether that ex parte communication is the type likely to induce pressure or affect

outcome?e. Due Process Hearings (only applicable if the APA doesnt kick in)

i. Does Due Process Apply?1. State Action?

a. state/local: 14th Am.b. federal: 5th Am.

2. Life, Liberty, or Property Interest?a. Liberty Interest?

i. e.g., freedom from restraint; right to contract, pursue commonoccupations, marry and raise children, practice religion; stigma?

b. Property Interest?i. Legitimate claim of entitlement; more than a unilateral need or desire;

source of entitlement outside the due process clause


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3. Individualized Decision-making?a. Nature of factual inquiry

i. e.g., across the board tax rates (Bi-Metallic) vs. assessment of taxablevalue of particular piece of property (Londoner)

ii. and/or ?? (see CB p. 254). Usually the two factors work hand in hand

but the whole idea is murky. The Supreme Court hasnt clarified theissue.b. Number of people involved.

ii. If so, what process (type of procedure) is due?1. Notice

a. You need notice that the govt is coming after your property and under whatgrounds allow them to do it.

2. Some type of hearing not uniform. Different situations require different types ofhearing.

a. When? (pre- and/or post-deprivation). Does due process require the hearingbefore hand or is it sufficient to have it post-apprehension of your property.

i. Matthews v. Eldridge: a factor to be considered is the cost-effectiveness of allowing for an additional hearing. B/c the studentwas already entitled to a post hearing, due process was satisfied.

b. How formal? (e.g., live or written? witnesses? cross-examination? right tobe represented by counsel?) (Many of these questions are to be answered by556 & 557 in greater depth than due process).

c. Neutral decision maker: A neutral decision maker is required but just howneutral is debatable.

i. Withrow v. Larkin: There is a presumption of honesty and integrity ofthe decisionmaker. This presumption is overcome by bias of thoseperforming those performing investigating and adjudication. Theperformance of these two functions alone do not imply bias.

3. The Mathews v. Eldridgebalancing test provides the framework for analysis:a. The private interest affected, and the seriousness of the deprivationb. The risk of erroneous deprivations, using existing procedures

i. The value of additional or different procedures in reducing likelihoodof erroneous deprivations.

1. Plaintiffs must show that the additional requested safe guardsare required by due process.

2. P. 273. Walters case. An example of the courts weighing thenumbers.

ii. This is really where the balancing occurs. Whatever procedures areused, the purpose is an accurate and fair result.

c. Government interests include administration of law cheaply and efficiently.The more elaborate, then the more cumbersome it will become.

4. Stigma Plus seems to be the kind of stigma that might infringe a property interest.Codd v. Velger came under the stigma. There was state action and there was astigma. Is this the kind of dispute that required individualized decision making? YesOne person.


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i. Arbitrary and Capricious standard. 706(2)(A) when does the standardapply? Almost to anything. Pretty deferential. Pretty hard to prevailunder so if any other standard is available, the alternative will bepursued. Typically applied in informal adjudication and informalrulemaking.

ii. 706(2)(B) only available if there is a constitutional question (includingdue process). De novo review by the courts.iii. (c) where the agency has arguably violated a statute. Use Chevron test

if the statute the agency violated was the enabling statute. Ifsomething that agency doesnt have an expertise on, like the APA,then you dont use Chevron. No deference.

iv. (D) Three options depending upon the source of the statutoryprocedural requirement you are alleging the agency violated. If APA no deference, no Chevron. If enabling statute deference, Chevron.If additional (non-enabling) act no deference, no Chevron. Agencysown promulgated rules court will enforce them with no deference to

the agency, however, the court will defer to the agency as far as howthose rules are interpreted. So what they mean and how they arefollowed will be deferred to the agencys interpretation.

v. (E) Substantial evidence standard. Fairly deferential but not so muchas arbitrary or capricious. Only applies to certain things. Formalrulemaking and formal adjudication. (But remember that the majorityof an agencys action fall under informal adjudication)

vi. (F) if you got some kind of adjudication that falls short of formaladjudication but the enabling statute has this written into it. Basicallynot used anymore. Very rare.

7. Choosing Between Rulemaking and Adjudication to Make Policya. Three major issues to consider:

i. Why might an agency prefer a particular process option in a given situation?ii. What are the advantages and disadvantages of such options form the perspective of the public

or regulated entity?iii. Are there legal limitations that constrain the choice of particular options, such as the

agencys statutory mandate, the APA, or the due process clause?b. Option One: Adjudication

i. Advantages & Disadvantages1. Pro:

a. Allows for flexibilityb. Insulated from political pressuresc. Less likely to attract media attention, so the agency can proceed without large-

scale opposition, like national interest lobbying, etc.d. Proceeding against one entity is likely to be significantly less expensive and

time-consuming than a rulemaking applicable to entire nation. (Investigationand data collection also a lot less intensive)

e. Agency gets to pick its defendant.f. Burdens of cost-benefit analyses and OMB/Congressional reviews not

applicable.


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2. Con:a. Decision isnt changed by public criticism, advise or input.b. Focuses only on one entity (the one being adjudicated)

i. The decision is only legally binding on the entity against which it isissued.

ii. The singled out entity pays for the initial imposition of a new andinevitably costly legal obligation in addition to the cost of litigationfees.

iii. The practice may industry-wide but only one entity is being calledonto the carpet for it.

3. Problem 4-1:a. NLRB v. Bell Aerospace p. 327

i. The court basically says that agencies can use rulemaking oradjudicatory proceedings to announce new policies. There may betimes when the Boards reliance on an adjudication would be an abuseof discretion, but this is not one of those cases. In this case

adjudication is appropriate because there are tens and thousand ofmanufacturing, wholesale and retrial units,which do this stuff. Theduties of buyers vary depending on the company and thereforegeneralized standards would not work.

b. Retail, Wholesale and Dept Store Union v. NLRBi. Courts will decline to enforce administrative orders when in their view

the inequity of retroactive application has not been counterbalanced bysufficiently significant statutory interests. Considerations include:

1. Whether the particular is one of first impression2. Whether the new rule represents an abrupt departure from well

established practice or merely attempts to fill a void in anunsettled area of law. Look at how bad is the surprise, wasthere any notice (same for #3).

3. The extent to which the party against whom the new rule isapplied relied on the former rule

4. The degree of the burden which a retroactive order imposes ona party

5. The statutory interest in applying a new rule despite thereliance of a party on the old standard

c. Option Two: Rulemakingi. Issues: If an agency can engage in rulemaking and adjudication, it can adopt a new policy

and make it legally binding through rulemaking and then, if necessary, enforce it throughadjudication or judicial action. Four legal issues that arise when an agency pursue this optioninclude:

1. Does the agency have the authority to promulgate substantive rules?2. Can an agency restrict the scope of adjudicatory hearing rights by promulgating a rule

that eliminates the materiality of facts that otherwise would be subject to resolution ina hearing?

3. Can an agency give retroactive effect to a rule?


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4. To what extent does due process limit an agencys authority to use adjudication toclarify ambiguity in a rule?

ii. Advantages & Disadvantages1. Pro:

a. All entities that fall under the rule are bound to follow the new policy

i. The cost of implementation is therefore spread across the industry.b. Final rule can be changed by public commentc. Allows the agency to establish a bright-line policy, which is clearer and

more precise than a policy developed on a case-by-case basis in adjudication.This clarity should increase the level of compliance with the policy anddecrease opportunistic behavior by regulated entities that seek to avoid thenew policy.

2. Con:a. Not flexible, doesnt allow for exceptions.

iii. Rulemaking Authority1. An agency has the authority to promulgate legislative rules if Congress (or a state

legislature) has given it this power.iv. Impact on Adjudication Rights1. An agency is not required to provide a safety valve for rules by permitting regulated

entities to apply for a waiver or exception, but agencies often find it advisable to doso.

v. Retroactive Rulemaking1. The Court declared that an agencys power to issue rules is limited to the authority

delegated by Congress, and that agencies do not have the power to give rulesretroactive effect without an express grant of such authority by Congress (or a statelegislature whoever was the source of the initial enabling statute?)

2. No such thing as retroactive rulemaking unless the statute explicitly expresses theagency may do so.

vi. Ambiguous Rules1. If a rule is ambiguous or unclear, a regulated entity may be subject to an enforcement

action under circumstances it did not anticipate.a. If the enforcement action occurs in a judicial forum, the court will interpret

the meaning of the regulation with possible issues of deference to the agencyif the agency has expressed an interpretation of the regulation.

b. If the enforcement action occurs in an agency adjudication, the agencyinterprets the regulation.

c. GE v. EPAi. GE attacked the rule b/c it didnt know what it mean but the court gave

the agency what it meant and once the agency explained, underChevron deference, the court said it was reasonable. B/c it wasambiguous, it would not be applied retroactively. Due processrequires a party to receive notice of a regulation so thats why it cantbe applied retroactively.

d. Option Three: Nonlegislative Rulesi. Introduction


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1. Df: A Nonlegislative rule is an agency pronouncement that advises the public of theagencys view on an issue. Section 553 recognizes two types of Nonlegislative rules:

a. Interpretative rules are statements issued by an agency to advise the public ofthe agencys construction of the statutes and rules which it administers.

b. Policy statements are statements issued by an agency to advise the public

prospectively of the manner in which the agency proposes to exercise adiscretionary power.2. Fit the APAs definition of a rule, the whole or a part of an agency statement of

general or particular applicability and future effect designed to implement, interpret,or prescribe law or policy 551(4)

3. Contrast legislative v. Nonlegislativea. Legislative rules are legally binding and must be adopted by the notice and

comment process.b. Nonlegislative (all other rules that do not fall under legislative) are NOT

legally binding and therefore do not need the notice/comment process.4. Issues: Three legal issues arise from the agencys use of Nonlegislative rules:

a. Although an agency can promulgate Nonlegislative rules without use of noticeand comment rulemaking, the APA does impose some requirementsconcerning publication of such rules and failure to follow these requirementsmay limit an agencys use of Nonlegislative rules.

b. A party might challenger a Nonlegislative rule on the ground that the rule isinvalid because the agency failed to use notice and comment procedures asrequired by the APA.which leads to a court determining whether the rule isin fact a nonlegislative or legislative rule.

c. When an agency issues a nonlegislative rule, the issues arises concerning whatare the consequences when a member of the public relies on this statementand then the govt later refuses to follow it.which leads to a courtdetermining whether a member of the public has any remedy b/c of thepersons reliance on the agencys prior policy.

ii. Advantage and Disadvantages of Option Three1. Pro:

a. Efficient and beneficial (FASTER AND CHEAPER) becausei. A nonlegislative rule is a means of informing the public as to the

agencys views and intentions which is good for two reasons1. Most members of the regulated community will change their

behavior in accordance with the expressed views of the agency2. If the agency does not need to take enforcement action to

implement the expressed policy, the regulated community willnot be able to claim surprise.

ii. A nonlegislative rule can be used as a mgmt tool to issue guidance toagency ees, thereby ensuring centralized policy control andadministrative uniformity.

iii. Agency not ready to make a definitive rulingthis shuts people up inthe meantime.

iv. Gives the agency greater flexibility to respond to new scientific orsocial developments.


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2. Con:a. Nonlegislative rules may be adopted w/out public input. In cases where

review is not sought or is unavailable, members of the public will have noopportunity to contest the rule, unless they were in a position to oppose it bylobbying the agency before the rule was adopted, and the agency is denied the

educative value of their facts and arguments. (Not fair to public)b. An agency may treat a nonlegislative rule as binding on members of thepublic. Persons who challenge this behavior are protected as long as a courtdetect that the agency has imposed a binding obligation. But those whoacquiesce are denied the opportunity to comment on legislative rules that isafforded them under the APA. (Not technically binding, but close to it).

c. B/c members of the public rely on nonlegislative rules as authoritativeguidance of an agencys intentions, these person may be adversely affected bytheir reliance. An agency can ordinarily disown a nonlegislative rule w/outprior notice b/c it has not been adopted by notice and comment rulemaking.

3. Notes:

a. New York Times article: Executive order makes executive agencies must dosomething like notice and comment (even after the fact) if the nonlegislativerule is significant (greater than $100M) KNOW THIS FOR FINAL!!! WhiteHouse E.O. for interpretive rules or statements of policy generated byexecutive agencies (not independent agencies) that requires substantive reviewby the OMB (already exists for legislative rules for the executive agencies).In addition this executive order imposes a variation of notice and comment onthe process of promulgating these. If its a significant rule; defined bymeaning it has a significant economic impact; impact of 100 million dollars ormore; then the agency has to do something like notice and commentrulemaking. They agency has to welcome the public comment and perhapsreview and comment and respond to it. The executive order goes further andsays you should really do this beforehand, but we are not going to require it.So the executive order makes the promulgation of interpretive rules or policystatements and makes them much closer to the level of formality required byformal rulemaking.

iii. APA Procedures1. 552 of the APA aka the Freedom of Information Act (FOIA) requires each agency to

publish in the Federal Register statements of general policy or interpretations ofgeneral applicability formulated and adopted by the agency.

2. When a person proves that an agency failed in this legal duty to make informationavailable, a court can provided appropriate relief.

iv. Distinguishing Nonlegalitive from Legislative Rules1. Policy statements

a. Policy statements are issued by an agency to advise the public prospectivelyof the manner in which the agency proposes to exercise a discretionary powerin subsequent adjudication or a rulemaking.

b. A policy statement does not purport to interpret an existing duty in aregulation or statute but instead announces that the agency intends to adopt anew duty in some future adjudication or rulemaking.


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c. Courts therefore use a binding effect test to distinguish policy statementsfrom legislative rules by asking whether the statement of the agency imposes anew duty or merely announces the intention to impose a new duty at somefuture time.

i. American Hospital Assoc. v. Bower

1. Two criteria test set forth b Judge McGowan in American BusAssociation v. United Statesa. Unless a pronouncement acts prospectively, it is a

binding norm. Thus a statement of policy may not havea present effect: a general statement of policy is onethat does not impose any rights or obligations

b. Whether a purported policy statement genuinely leavesthe agency and its decision makers free to exercisediscretion.

2. In applying these two criteria, an agencys characterization ofits own action, while not decisive, is a factor to consider.

d. Notes:i. Community Nutrition Institute (CNI) v. Young: a rule is legislative ifit is binding on an agency, regardless of whether it is also binding onregulated entities.

2. Interpretive Rulesa. An interpretive rule interprets or clarifies the nature of the duties previously

established by an agencys statutory mandate or by regulation promulgated bythe agency.

b. In an interpretive rule, an agency announces how an existing law or statute inbinding on those who are subject to it. The interpretive rule, however, is notITSELF binding. Until the interpretation is adopted in a legislative rule or anadjudication, persons are free to ignore the interpretation.

c. When Congress has not granted an agency the authority to make legallybinding rules, any rule that the agency issues is necessarily interpretive. If anagency has the authority to promulgate legislative rules, the courts lookgenerally at two factors to determine whether to accept the rule as interpretive.

i. Factors are1. The agencys characterization of its actions2. The source of the duty a party is obligated to obey

ii. If a regulation contains a phrase that is clearly susceptible of twointerpretations, the court is likely to accept as an interpretive rule anannouncement that resolves this ambiguity.

d. American Mining Congress v. Mine Safety & Health Administrationi. Whether a rule has the force of law depends upon whether the

agencys rule shows an intent to exercise the power delegated to it byCongress. Occurs in three situations

1. In the absence of a legislative rule by the agency, thelegislative basis for agency enforcement would be inadequate.


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2. An agency seems likely to have intended a rule to be legislativeif it has the rule published in the Code of Federal Regulation.Section 1510 limits publication in that code to rules havinggeneral applicability and legal effect.

3. If a second rule repudiates or is irreconcilable with a prior

legislative rule, the second rule must be an amendment of thefirst; and of course, an amendment to a legislative rule mustitself be legislative

ii. Whether a rule has legal effect depends upon the following factors. Ifthe answer to any of them is YES, then rule is legislative, NOT aninterpretative rule,

1. Whether in the absence of the rule there would not be anadequate legislative basis for enforcement action or otheragency action to confer benefits or ensure the performance ofduties;

2. Whether the agency has published the rule in the Code of

Federal Regulations3. Whether the agency has explicitly invoked its generallegislative authority

4. Whether the rule amends a prior legislative ruleiii. Metropolitan School District v. Davila

1. Representation of a paradigmatic case of an interpretive rule.The rule is based on statutory provisions, and its validity standsor falls on the correctness of the agencys interpretation of thestatute. In this case, it was clearly an interpretive rule. Use thetwo step test: (1) what did the agency think it was doing (2) themore new responsibilities are created, the more likely alegislative rule.

e. Notes:i. Substantial Impact test

1. Asks whether or not an agency pronouncement has asubstantial impact: on the rights or duties of the public.

2. Rejected by majority of jurisdictions as an independent meansto distinguish nonlegislative and legislative rules b/cinconsistent with 553, which exempts nonlegislative rulesregardless of their impact.

3. Further in disfavor post Vermont Yankee Nuclear Power Corpv. Natural Resources Defense Council, Inc. where the courtheld that the courts cannot require agencies to use proceduresmore demanding than those required by statute or theConstitution.

v. Legal Protection of Reliance on Nonlegislative Rules1. Problem 4-8: Usually if you rely upon the govt and then the govt changes its mind,

you get screwed. Alaska aka the Bush hunters case is an exception.a. Alaska Professional Hunters Association, Inc. v. Federal Aviation

Administration.


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i. Long period of reliance (30 years)ii. An entire regional office of the agency offered the incorrect

interpretation (as opposed to one erroneous employee)iii. No procedure in place for petitioners to determine correct

interpretation (so petitioners were not on notice that the procedure may

change and were not unreasonable in relying upon regional office)iv. Court held once an agency gave its interpretation of a regulation, it canonly change that interpretation through notice and comment. Youcant change an interpretative rule simply by issuing an interpretationof the interpretation.

b. Association of American Railroads v. Department of Transportationi. Court distinguished from Alaska finding no reliance on the

interpretation. Unlike Alaska, there was nothing in the record tosuggest the RR was told otherwise.

c. Heckler v. Community Health Servicesi. Court will never say never to evoke estoppel against the govt but

estoppel wasnt applicable here b/c the plaintiff didnt prove bothelements of estoppel (1) reasonable reliance and (2) to their detriment.1. Reliance upon advice from third party not reasonable.

d. Office of Personnel Mgmt v. Richmondi. Plaintiff sough govt benefits but earned too much money.

ii. Oral advice is less reliable than a written response.iii. There was no law that authorized benefits to someone who was not

entitled, so the Court used this as why they couldnt make the agencypay.

e. Appeal of ENO (New Hampshire Department of Employment Security)i. Whether the department may deny benefits to the plaintiff on the

ground that she made insufficient efforts to find work, over a period oftime in which the dept led her to believe that her efforts weresufficient.

ii. Court said a violation of her due process.iii. No state prohibition against giving out the money. In federal law, only

Congress can give out the money.2. Notes:

a. Some lower federal courts have recognized the doctrine of estoppel in non-appropriations cases most decisions refuse to apply the doctrine b/c theplaintiff failed to prove that there was reasonable reliance on the govtpronouncement.

b. The states seem more willing than federal courts to apply estoppel in certainsituations:

i. When the govt acts in a proprietary, rather than a governmentalcapacity, several states have found equitable estoppel applicable.

ii. Equitable estoppel may be applied when state or local agencies haveengaged in affirmative misconduct.

iii. Some states are willing to find equitable estoppel simply when there issome stronger basis than would justify equitable estoppel against a


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private partytypically phrased as to the extent justice requires orto prevent manifest injustice.

c. It is relatively well established that one cannot be held criminally responsiblefor acting in reasonable reliance upon the advice of a government agent.

i. Reasonable reliance that caused civil infraction youre screwed.

ii. Reasonable reliance that caused criminal infraction youre ok.d. If the govt cannot be estopped and if due process does not apply, the courtsmay apply the prohibition against inconsistent application.

e. Judicial Deferencei. Will the level of deference that a court will give to a decision vary according to the type of

action that the agency used to adopt that decision?1. Chevron Deference: According to Chevron, a court will defer to an agencys statutory

interpretation if it concludes that a statutory term is ambiguous and that the agencysinterpretation of the term is reasonable and permissible. A stronger deference.

2. Skidmore Deference: A very weak form of deference. The weight of anadministrative agencys nonbonding rulings, interpretations and opinions will depend

on a case by case basis on the thoroughness evident in its consideration, the validityof its reasoning, its consistency with earlier and later pronouncements and all thosefactors which give it power to persuade.

3. Supreme Court cases that help us determine whether to use Chevron or Skidmoredeference.

a. Christensen v. Harris County: Only formal agency rules and adjudicationsrequire Chevron deference. Nonlegislative rules (non binding informal non-rules like policy statements, agency manuals, enforcement guides and opinionletters, etc.) are only entitled to Skidmore deference, meaning they can befound to be persuasiveor not.

b. United States v. Mead Corporation: Court held that administrativeimplementation of a particular statutory provision qualifies for Chevrondeference when it appears that Congress delegated authority to the agencygenerally to make rules carrying the force of law, and that the agencyinterpretation claiming deference was promulgated in the exercise of thatauthority. HOWEVER, the customs ruling failed to qualify for Chevron butwas remanded in case it was entitled to persuasive deference under Skidmore.So in other words, it is not only formal rules that require Chevron deference,informal ones can be entitled to Chevron deference but the Court failed toelaborate in which situations informal rules/adjudication would requireChevron.

c. Barnhart v. Walton: Court found this to be an instance where an informal ruledeserved deference from Chevrona bit tricky b/c it started out as aninformal policy and later became a formal rule promulgated through a noticeand comment period. The interstitial (are we filling gaps in the statute) natureof the legal question, the related expertise of the Agency, the importance ofthe question to administration of the statute, the complexity of thatadministration, and the careful consideration the Agency has given thequestion over a long period of time all indicate that Chevron provides the


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appropriate legal lens through view the legality of the Agency interpretationhere at issue.

ii. Notes:1. While the waters are muddy concerning when a court will use Chevron deference, a

few things are clear:

a. Look to Congress intent: If Congress intended that a particular type ofinterpretation or decision should receive deference, then the courts applyChevron deference. The courts apply Chevron deference b/c Congressintended that the agency, not the courts, should have the primaryresponsibility to resolve the type of legal issue that has arisen.

i. Legislative intent is usually not the actual intent of Congressii. Instead, the Court is using hypothetical intent, focusing on whether it

is reasonable to assume that Congress meant for the courts to defer tothe agencys interpretation or application of a statutory provision.

b. The Court focuses on certain aspects or attributes of the administrativeprocess used by the agency in interpreting the statute as an indication of likely

legislative intent concerning whether Chevron deference is appropriate.i. In Christensen, the Court focused on whether an administrativedecision had the force of law.

ii. In Mead, the Court continued to rely on the force of law test BUTadded that an interpretation or application of a statute might qualify forChevron deference even if it was not adopted using formaladjudication or notice-and-comment rulemaking b/c othercircumstances might indicate that Chevron deference might beappropriate.

iii. Barnhart1. Before Barnhart: an agency received Chevron deference for

rulemaking and formal adjudication and an agency mightreceive Chevron deference when the interpretation is mademore informally, if the circumstances suggest it was exercisinglaw-making authority.

2. After Barnhart: Three impacts of the Barnhart decision on thereading of earlier cases:

a. Force of Law no longer definitive test: the test waswhether it was likely Congress meant the courts todefer to an interpretative rule or policy statement inlight of the interpretive method used and the natureof the question at issue.

b. The courts will need to determine this issue on a case-by-case basis.

c. Not clear whether force of law test is limited only tothe issue of level of deference for non-legislative rules,or whether the Court dropped the test concerning othersituations, such as what level of deference to give toinformal agency adjudication.


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2. Rulemaking only creates the presumption that Chevron deference is appropriate. Acourt may therefore deny an agency Chevron deference if there are persuasive reasonswhy Chevron deference is inappropriate.

3. Seminole Rock Doctrine: The Supreme Court in Bowles v. Seminole Rock & SandCo. held that the courts should defer to an agencys interpretation of its own

regulations.a. However, when an agency merely parrots the words in the statute in theagencys regulation, the subsequent informal interpretation of the regulationdoes NOT qualify for Seminole Rock/Auer deference.

8. Reviewabilitya. Introduction

i. What is necessary for one to obtain judicial review or what arguments can be raised to have aplaintiffs case dismissed without reaching the merits.

ii. Ask yourself how delaying or conditioning review will affect the conduct of the private partyand the govt, as well as how it affects litigation.

1. First question in federal courts is whether the court has jurisdiction.a. Standing whether the person bringing the lawsuit is an appropriate person tobring the suit

b. Once standing is satisfied, the court must then satisfy a statutory grant ofjurisdiction. This is usually not a problem in administrative law for tworeasons:

i. First, many statutory regimes contain specific jurisdictional provisionsii. Second, if a plaintiff does not have jurisdiction under a particular

statutory regime, the general federal question jurisdictional statute isnormally available. (The APA itself does not grant jurisdiction.)

2. Second question is if a plaintiff states a cause of action, which means there is a statutegranting plaintiff some judicially enforceable right.

a. Where there are specific judicial review provisions, they can provide bothjurisdiction and a cause of action.

b. For matters not covered by the specific review provisions, the APAs section702 is the fallback provision.

i. This action is sometimes referred to as non-statutory review todistinguish it from review under a specific statutory provision.

ii. To successfully assert a cause of action under the APA, the plaintiffmust meet 6 requirements (5 established by the APA and 1 bycommon law):

1. Agency action the agency must have taken some action,which is defined broadly as the whole or part of an agencyrule, order, license, sanction, relief, or the equivalent or denialthereof, or failure to act.551(13)

2. Appeal NOT excluded from review 701(a) states that theAPAs judicial review provisions do not apply to the extentthat (1) statutes precludes judicial review; or (2) agency actionis committed to agency discretion by law.

a. Statutes can preclude review by implication.


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b. Case law concerning when a statute impliedlyprecludes judicial review is not clear.

c. The mere fact that an agency can exercise discretion isnot enough to escape judicial review under the APA.

3. Legal Wrong/Zone of interest section 702s cause of action

is limited to persons suffering legal wrong or thoseadversely affected or aggrievedwithin the meaning of arelevant statute.

a. Legal wrong in the context of the APA means an actionby the govt that interferes with a personsconstitutional, statutory, or common law rights.

i. Ex. Govt takes your property, interferes withyour liberty, or denies you a statutory right.

b. Adversely affected cause of action authorizeslawsuits by persons who assert interests that arearguably within the zone of interests to be protected or

regulated by the statute in question. Zone of interestrequirement is an aspect of standing, but prudential, notconstitutional standing.

i. Ex. Govt agrees to develop land near awilderness area, which would adversely affectthe hikers enjoyment of the wilderness. Thehikers would be w/in the zone of interest.

4. Finality Doctrine final agency action for which there is noadequate remedy in a court. Requires persons to wait until anagency has reached its final decision in the matter. 704.

5. Exhaustion of Remedies provision 704 says an agency actionis final for judicial review purposes even if a person has notappealed within the agency, unless the agency by rule requiressuch an appeal and stays its action pending that appeal, inwhich case the action would be final only after the conclusionof that appeal.

6. Ripeness common law doctrine that makes sure the case is ina posture appropriate for judicial determination and that thecourts will not unnecessarily interfere in the administrativeprocess.

3. Venue the power of an individual court to function.a. A typical venue provision for the circuit courts permits a plaintiff to bring suit

in the circuit (1) in which the that person resides, (2) in which the personsprinciple place of business is located, or (3) in which the particular activityunder review took place.

b. A lawsuit filed under general federal question jurisdiction may be brought inany judicial district in which (1) a defendant in the action resides, (2) asubstantial part of the events or omissions giving rise to the claim occurred, ora substantial part of property that is the subject of the action is situated, or (3)the plaintiff resides if no real property is involved in the action.


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2. Simon case complaint lacked irrepressibility.ii. Prudential Requirements additional standing requirements established by the Supreme

Court that cannot be found in the Constitution and therefore not based on the case andcontroversy constitutional requirement.

1. Subject to amendment by statute.

2. Intended to assure that courts do not exercise judicial power unnecessarily3. The requirement that a person cannot assert the rights of others reflects the Courtsjudgment that it is generally unsuitable to have someone litigate the rights of anotherperson even if the potential plaintiff can claim an actual injury.

a. For administrative law purposes, 702 delimits this prudential requirement.b. Doctrine of associational standing is another exception.

iii. Standing in the States as the constitutional limitation of federal judicial power to cases andcontroversies does not apply to states, most states have developed their own rules ofstanding through either their own constitutions or common law.

iv. Litigation of Standing1. Lujan v. Defenders of Wildlife p. 415

a. Whether the Defenders have standing the Court said no b/c not concreteenough of an injury. Court says you need to purchase a ticket.b. Constitutional minimum of standing contains three elements:

i. Plaintiff must have suffered an injury in fact, i.e. an invasion of alegally protected interest which is (1) concrete and particularized and(2) actual or imminent, not conjectural or hypothetical.

ii. Causal connection between the injury and the conduct complained ofmust be fairly traceable to the challenged action of the defendant andnot the result of the independent action of some third party not beforethe court.

iii. It must be likely (as opposed to merely speculative) that the injury willbe redressed by a favorable decision.

c. Associational Standing: INSERT THREE ELEMENTS2. Federal Election Commission v. Akins

a. Court took the language to mean that Congress wanted the voters to beavoided from the exact type of harm that the voters in this case endured, i.e.information withheld.

c. Agency Actioni. Lujan v. National Wildlife Federation START HERE!!!

d. Exclusions From Judicial Review Under the APAi. Statutory Preclusion

1. Problem 5-4:2. Notes:

ii. Committed to Agency Discretion1. Problem 5-5:2. Notes:

e. Cause of Actioni. Problem 5-6:

ii. Notes:f. Timing


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1. Problem 7-1:2. Problem 7-2:3. Notes:

ii. Remedies for Illegal Inspections1. Problem 7-3:

c. Special Needs Searchesi. Problem 7-4:d. Record keeping and Reporting Requirements

i. Statutory Authority and Limitations1. Statutory Authority2. Administrative Procedure Act3. The Paperwork Reduction Act

a. Problem 7-5:ii. Fourth Amendment

1. Problem 7-6:iii. Fifth Amendment

1. Problem 7-7:2. Notes:e. Parallel Proceedings

i. Problem 7-8:ii. Notes:

11. Public Access to Agency Processesa. The Freedom of Information Act (FOIA)

i. FOIA Time Limitsii. FOIA Fees

iii. Judicial Review under the FOIAiv. The FOIA Request

1. Problem 8-1:2. Notes:

v. FOIA Exemptions1. Classified Information2. Internal Personnel Rules3. Specifically Exempted by Statute4. Confidential Business Information

a. Problem 8-2:5. Inter- or Intra- Agency Memoranda6. Personal Privacy7. Law Enforcement Records8. Financial Institution Records and Oil Well Data

vi. Reverse FOIA Suits1. Problem 8-3:2. Notes:3. Problem 8-4:4. Notes:

b. The Federal Advisory Committee Act


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i. Problem 8-5:ii. Notes:

c. The Government in the Sunshine Acti. Problem 8-6:

ii. Notes:

12. Attorneys Feesa. Introductionb. Equal Access to Justice Act

i. Prevailing Party1. Problem 9-1:2. Notes:

ii. Substantially Justified?1. Problem 9-2:2. Notes:

iii. Amount of Award

1. Problem 9-3: What are Special Factors?2. Notes: