I. Administrative Procedures Acta. Informal Rulemaking

i. Primary process for promulgating rules under the APA is notice and comment rulemaking under the APA § 553.

ii. Principle requirements of informal rulemaking are notice, opportunity to comment, and publication of the decision together with a concise general statement of basis and purpose.

b. Chapter 5 – Rule Makingi. § 553 – Rule Making

1. Informal, three step process.2. Formal, must incorporate § 556 and 557

ii. § 554 – Formal Adjudicationsiii. § 555 – Ancillary Matters; Informal Adjudicationsiv. § 556 – Hearings’ Presiding Employees; Powers and Duties; Burden of Proof; Evidence; Record

as Basis of Decisionv. § 557 – Initial Decisions; Conclusiveness; Review by Agency; Submissions by Parties; Contents

of Decisions; Recordc. Chapter 7 – Judicial Review

i. § 702 – Right of Reviewii. § 703 – Form and Venue of Proceeding

iii. § 704 – Actions Reviewableiv. § 705 – Relief Pending Reviewv. § 706 – Scope of Review

II. Administrative Adjudicationa. Adjudicatory Due Process

i. Procedural Due Process Requirements1. Individual vs. Group (Adjudication vs. Rulemaking)

a. Londoner. Denver (1908) – Judiciali. City levied taxes on several property owners due to city determining

property worth moreii. Court says property owners entitled to individualized hearings to

contest determination because of unique factsb. Bi-Metallic Investment Co. v. State Bd. of Equalization (1915) –

Legislative/Politicali. City raises taxes in entire city

ii. Court says property owners entitled to political process only because facts are not unique to the individual

c. Rule i. Individualized determination based on resolution of contested issues

of adjudicative fact requires some kind of hearing. They should be resolved through judicial process. (Londoner v. Denver).

1. Due process appliesii. Contested policy decisions applicable to a group based on resolutions

of issues of legislative fact do not require any hearing. Should be resolved through the political process. (Bi-Metallic v. State Board).

1. Due process does not apply2. Procedures

a. Look to agency rules of proceduresb. Look to applicable statutes

i. APA § 554-557: all the elements of a trial must be used in adjudication when authorizing statutes says “on the record after agency hearing.”

1. Elements of a trial are (1) notice, (2) opportunity to present oral evidence, (3) opportunity to cross examine, (4) right to counsel, (5) impartial decision-maker (ALJ vs. AJ), (6) decision based solely on formal record, (7) written findings and conclusions

ii. APA § 555 requires only minimal procedures otherwise1. See Due Process Clause

c. Look to Due Process Clausei. Mathews v. Eldridge (1976)

1. Assessment of process adequacy requires consideration of:a. The importance of the interests of private partiesb. The governmental interest in procedural efficiency

(cost of added procedures)c. The likely contribution of various procedural

ingredients to the correct resolution of disputes (risk of error and incremental value of added procedures)

ii. Cleveland Bd. of Education v. Loudermill (1985)1. Minimum procedural requirements are a matter of federal

law, not State law, conferred by the Constitution and thus left to court discretion

iii. Pension Benefit Guarantee Corp. v. LTV Corp. (1990)1. Judges lack the authority to go beyond statutory procedural

requirements in imposing adjudicatory procedural obligations on federal agencies

ii. Substantive Due Process1. Essential principle of due process is that a deprivation of life, liberty or property be

preceded by notice and opportunity for hearing appropriate to the nature of the case2. Property

a. Statutory Entitlementsi. Goldberg v. Kelly (1972) – Right

1. Statutory entitlements are “property” for anyone who claims to satisfy the statutory criteria for eligibility

a. Individual must already be receiving the benefits2. Entitlement beneficiaries are entitled to a pre-deprivation

oral evidentiary hearing.a. Welfare provides the “very means by which to live”

and deprivation creates an “immediately desperate situation.”

b. Beneficiaries have limited ability to express themselves in writing

c. Typical contested issues involve veracityii. Mathews v. Eldridge (1976) – Privilege

1. Post-deprivation hearing acceptable for privileges 2. Distinguishing Goldberg

a. Disability beneficiaries have less need than welfare recipient

b. Doctors have a better ability to communicate in writing

c. Issues in disability cases are more objective in nature

b. Contractual Rightsi. Bd. of Regents of State Colleges v. Roth (1972) – Privilege

1. To have a property interest, must have more than an abstract need or desire for it. One must be entitled to it

a. Employment contract is contract for living sustainment

2. Property interest not created by Constitution, but rather by existing rules or state law

a. Roth’s contract and the teachers manual said employment was for one year with option to renew

ii. Perry v. Sindermann (1972) – Right1. A person’s interest in a benefit is a property interest for due

process purposes if there are such rules of mutually explicit understandings that support such claim of entitlement

a. Sindermann’s contract said year to year, but manual said teachers should feel they have tenure so long as teaching was satisfactory (implied contract)

iii. Cleveland Bd. of Education v. Loudermill (1985) – Right1. Security guard made error on application, error discovered

months after hiring. Terminated without notice and given post-termination hearing

2. Public employees are entitled to pretermination notice and opportunity to respond, using Mathews test

c. Miscellaneousi. Gilbert v. Homar (1997)

1. UPD officer suspended for being arrested and charged with felony

2. Court holds he is not entitled to pre-suspension hearing because it was (a) suspension and not termination and (b) all the facts were evident from his being charged with the crime

ii. Goss v. Lopez (1975) – Students given 10 day suspension entitled to notice plus hearing (may be contemporaneous)

1. Hearing need not have impartial decision maker due to non-adversarial nature of school and school’s legitimate interest in maintaining discipline

iii. Regents of the Univ. of Mich. v. Ewing (1985)1. Courts should not overturn academic decisions unless

decision was substantial departure from academic norms so as to signal arbitrary or capricious judgment

3. Libertya. Wisconsin v. Constantineau (1971) – persons name posted on “excessive

drinking” list, which made it unlawful to sell intoxicating liquor to that personi. State imposed stigma/disgrace is sufficient harm to liberty to warrant

a hearingb. Paul v. Davis (1976) – persons name included on “Active Shoplifters” poster

and circulated to local merchants not enough harm to warrant hearingi. Distinguished Constantineau in that it didn’t deprive person of liberty

(right to shop vs. right to buy liquor) or alter their status as a matter of state law

1. Must have tangible interest in addition to stigmatizationc. Sandin v. Conner (1995)

i. Prisoner deprived of liberty interest where prison authorities impose “atypical and significant hardship on inmate in relation to normal incidents of prison life”

d. Daniels v. Williams (1986) – prison authorities allegedly negligent when prisoner slipped and fell on pillow left on a stairwell did not deprive prisoner of liberty for Due Process purposes

i. Negligent action does not amount to deprivation of libertyb. Federal Statutory Hearing Rights

i. Finding a Hearing Right1. United States v. Allegheny-Ludlum Steel Corp. (1972)

a. “After hearing” is not the equivalent of “on the record after opportunity for an agency hearing” of APA § 553

2. United States v. Florida East Coast Railway Co. (1973) – Rulemaking procedure to change per diem charges for use by one railroad of freight cars owned by another

a. “After hearing” does not mean that oral testimony is requiredi. Turning to APA, Court concludes that “after hearing” does not

necessarily embrace either right to present evidence orally and cross-examine witnesses or to present oral testimony

1. § 553 allows rulemaking without public procedure unless specified by statute

2. § 556(d) says hearing can occur with written evidence

b. “Distinction in administrative law between proceedings for the purpose of promulgating policy-type rules or standards, on the one hand, and proceedings designed to adjudicate disputed facts in particular cases on the other.”

i. Bi-Metallic Investment Co. v. State Bd. of Equalization versus Londoner v. Denver

1. Bi-Metallic did not include statutory interpretation, was rather due process

2. Single vs. across-the-board focusii. Split among the circuits

1. Some say Florida East Coast applies only to rulemakings (1st, DC, and 9th), others say it applies to rulemakings and adjudications

3. Chevron U.S.A. v. Natural Resources Defense Council (1984)a. If language is ambiguous, then Court must uphold reasonable interpretation of

language by agencyb. Every court has held that it is “reasonable” for an agency to interpret “hearing”

to refer to a written exchange of data and views, at least when resolution of the issues at stake do not involve questions of veracity

4. Califano v. Yamasaki (1979) – §204 of SSA requires agency to recoup overpayments of disability benefits unless recipient was “without fault” or recoupment would be inequitable.

a. Ct holds that SSA can use written hearings to determine whether beneficiary was overpaid but must use oral hearings to determine whether overpayment was without fault or recoupment would be inequitable.

i. Risk of error inherent in truthfinding process (Mathews v. Eldridge)5. Third Party Hearing Rights

a. Comparative Hearingsi. Asherback Radio Corp. v. FCC (1945) – FCC has two applications

for same frequency. FCC regulations precluded permission for two stations that close geographically to broadcast on the same frequency. Regulations also afford denied petitioner a hearing. FCC approved one and used that approval as reason for declining other.

1. If grant of one application precludes the mutually exclusive other, the statutory right to a hearing which Congress accorded applicants before denial is an empty thing

ii. ANR Pipeline Co. v. FERC (DC Cir. 2000) – FERC granted two applications for construction of natural gas pipeline. ANR argued that approval for both was not economically viable

1. Agency discretion is not the same as statutory rigidity2. 9th Circuit agrees – W. Radio Servs. Co. v. Glickman (1997)

b. Third Party Interventioni. Office of Comm. Of the United Church of Christ v. FCC (DC Cir.

1966)1. In license renewal, FCC obligated by statute to determine if

broadcaster serves the “public interest, convenience and necessity” and if unable to make the required finding, to designate license application for a hearing

2. Local church and civil rights orgs. complained to FCC that station did not broadcast multiple viewpoints on significant public policy (racial segregation)

3. FCC granted one-year probationary renewal without hearing4. Court held that because petitioners were “parties in interest”

within the meaning of statute, the FCC had denied their right by proceeding without a formal hearing

ii. On-the-Record Adjudicatory Process1. Roadmap

a. Initiation:i. Requirements of Commencing Formal Hearing per APA

1. Notification to parties of time, place and nature of the hearing, and of legal authority under which it is to be held

2. If adjudicatory, notice must indicate matters of fact and law asserted by agency (APA § 554(b)(3))

3. If private persons are moving parties, then other parties must be given notice of controverted issues of fact and law

b. Informal Settlement:i. When time, nature of the proceeding and public interest permit,

agency is required to give parties the opportunity to settle (APA § 554(b))

c. Initial Decision Maker:i. Unless designated by another statute, agency can have AJ or ALJ

(APA § 556(b))ii. Presiding officer has power to assure smooth conduct of proceedings

such as to administer oaths, issue subpoenas (if agency has subpoena authority) and make evidentiary and procedural rulings (APA § 556(c))

iii. Agency can determine that presiding officer’s role is limited to compiling formal record which must be certified to agency for final decision (APA § 557(b))

d. Exclusivity of Record/Ex Parte Contacts:i. Transcripts, exhibits and other formally filed papers constitute “the

exclusive record for decision” (APA § 556(e))ii. Once hearing is “noticed” no ex parte communication relevant to

merits of the agency between any interest person outside agency and person involved in decisional process of the proceeding (APA § 557(d)(1)(A), (B))

iii. If ex parte contact occurs, must place communication on the record immediately (APA § 557(d)(1)(C))

1. Agency, ALJ or other presiding officer may impose sanction, including dismissal (APA § 557(d)(1)(D))

iv. If ex parte contact is unearthed after decision, decision becomes voidable

e. Separation of Functions:i. Employee of agency who takes evidence cannot be supervised by

employee who is responsible for agency’s investigative or prosecutorial functions

f. Discovery:i. APA does not have rule comparable to FRCP 26 (discovery)

g. Evidence and Rules on Proof:i. Parties at formal hearings entitled to presentation by oral or

documentary evidence, submission of rebuttal evidence and to cross-examine witnesses (APA § 556(d))

1. Agencies also have broad power to determine varieties of oral or documentary evidence to be admitted

ii. In the absence of statutorily imposed standard of proof (APA is silent), the propend of the order bears the standard of preponderance of the evidence

h. Product of the Hearing:i. Decision must include: statement of findings and conclusions on all

material issues of fact, law and discretion; the rule, order, sanction, relief or denial thereof that is the consequence of the hearing (APA § 557(C))

i. Hearsay:i. Hearsay is admissible up to the point of relevancy – Richardson v.

Perales (1971)

1. Rejects “residuum rule” stating that courts could not uphold agency order under the test of “substantial evidence” unless record contained at least a residuum of non-hearsay support

2. APA § 556 – All relevant evidence allowedj. Subpoena Power:

i. APA states that subpoenas will be issued when it is reasonably necessary for the full presentation of the case

1. 5th and 8th Circuits grant right to subpoena whenever claimant seeks one

2. 2nd, 6th, and 7th Circuits hold that grant of subpoena is within sound discretion of ALJs (fits within Mathews v. Eldridge rationale)

2. Consistencya. Stare Decisis

i. Agency’s departure from prior law must be explained (APA § 706), otherwise departure is characterized as arbitrary and capricious

b. Res Judicatai. Depends on reviewing courts’ assessment of whether res judicata

advances the purposes of the statute the agency is implementing1. Private party will not be permitted to relitigate issues already

decided in administrative proceedings where ordinary considerations supporting adjudicatory finality predominate

ii. An agency finding of fact can be res judicata, but only if it was made in a proceeding with sufficiently formal procedures and it resolved a contested issue of historical adjudicative fact

c. Collateral Estoppeli. No collateral estoppel against the government on an issue of law,

otherwise first district court to hear a case would bind the governmentd. Equitable Estoppel

i. Government is not bound by informal statements of agency personnel with respect to either law or policy (OPM v. Richmond (1990))

1. If Executive agents were able to obligate the Treasury, control over public funds would shift from Congress to the Executive, contrary to the Appropriations Clause

iii. Formal Adjudication and Bureaucratic Decision Making1. Managing Adjudicatory Personnel

a. ALJ – regionally located… i. Problems

1. Can take up to four years for hearing2. Lack of consistency – ALJs vary – diverse on decisions –

SSA, if someone’s pain is SO bad…3. Over years ALJs say ‘yes’ to greater portion of cases, so

portion of population on SSA going upb. Ways of Controlling ALJs

i. Direct Review1. All opinions subject to direct review at next level2. Allowed in administrative law, but w/ SSA too many cases

ii. Rules1. Very difficult to apply rules to these cases

iii. Guidelines1. Examples: long delays, get rid of less productive judges?2. Set up Presumptive Productivity Goal – not fire if not met,

but have meetings…etc.c. Nash v. Califano (1980)

i. Long delays w/ ALJs in SSA – some not productive, but could only be removed by other ALJs for cause

ii. SSA created presumptive productivity goal of 240 cases/yr., only 40-60% ‘yes’

iii. ALJ claimed interfered w/ decisional independence and due process1. Dist. Court judges not say agency can make ALJ work

harder2. Cir. Court sees SSA interests… OK w/ statutory command,

no violation of due process, and ALJ still independent2. Controlling Adjudication Through Rulemaking

a. Heckler v. Campbell (1983)i. SSA new rule say “if can perform duties of any job anywhere in

economy” and had tons of vocational experts… but not very consistent… W/ changing economy and regions

1. Could contest the vocational experts findings – now, can’t as SSA substituted expert testimony with grid rule

2. More Consistent, but how accurate?3. Takes away ALL of ALJ’s discretion, if just have to follow a

gridii. Court recognizes need for rules to enhance consistency and

accuracy… upholds grid ruleiii. Even where an agency’s enabling statute expressly requires it to

holding a hearing, the agency may rely on its rulemaking authority to determine issues that do not require case-by-case consideration

b. Bowen v. Yuckert (1987)i. SSA rule w/ vocational experts, and 5-step process to determine if

person could have any job out there…ii. After step 2, if no ‘severe impairment’ (based on non-exclusive list)

ALJ not go any further1. Doesn’t go on to consider age, education…

iii. Overall rate of finding folks disabled went down 15%iv. Court split, but finds rule valid because it is not inconsistent with

statutory definition of disabilityv. Concurrence wanted to temper rule, so ALJ has discretion to go

beyond step 2 if want3. Avoiding Adjudication Through Rulemaking

a. Airline Pilots Assoc. v. Quesada (1960)i. FAA says all pilots must retire at age 60 – is this arbitrary and

discriminatory?1. Information about health…

ii. Flat rule is permissible. No Bi-Metallic issues.1. Rule eliminates have to adjudicate and have a hearing for

each person. This eliminates a class of hearings altogether.iii. Rule does not lose the character of a rule because it modifies pilots’

claimed property rights.1. Bi-Metallic – Where rule of conduct applies to more than a

few people, it is impractical that everyone should have a direct voice. General statutes are passed that affect the person or property of individuals without giving them a chance to be heard.

2. Scientific data in support, therefore the rule is not arbitrary or capricious. Appropriately considered evidence and provided sufficient justifications for its decisions.

iv. Even if a statutory scheme requires individualized determinations, the decision maker has the authority to rely on rulemaking to resolve certain issues of general applicability unless Congress clearly expresses an intent to withhold that authority.

4. Informal Alternatives to Formal Adjudicationa. Alternative Dispute Resolution

i. ADRA amended § 556(c)(6) to include ADRii. Agency can use ADR if:

1. The parties agree

2. Dispute is deemed by agency to lack precedential or policy development significance

3. Dispute does not significantly affect unpresented parties4. A full public record of the proceedings is not important5. Agency does not anticipate a need for its own continuing

jurisdiction over the matter in the controversyiii. Judicially enforceable

1. Agency head has discretion (within 30 days of arbitrator’s final order) to terminate proceeding and vacate the award

a. Agency may have to reimburse parties cost of ADRIII. Administrative Rulemaking

a. Agency Authority to Make Legislative Rulesi. All agencies have the inherent power to issue rules of procedure and interpretative rules

1. Interpretive rules - non-binding rules that tell the public how the agency interprets the statutes it implements

ii. Most, but not all, agencies also have the power to issue legislative rules1. Legislative rules - rules with legal effects that render them virtually indistinguishable

from a statute2. National Petroleum Refiners Assn v. FTC (DC Cir. 1973)

a. From 1914-1960, the FTC takes the position that it does not have the power to issue rules. Therefore, it can’t deal with an industry wide practice – must adjudicate on case-by-case basis, which is very burdensome, long, and arduous.

b. However, sees industry wide problem – sale of gas should have a posted octane content because not including octane content is an unfair trade practice – and so issues a legislative rule mandating posted octane content.

c. Court – FTC has power to make binding trade regulations.i. Focused on provision of FTC Act that gave the FTC the power to

make rules and regulations.ii. All authority need not be found in explicit language. General rule

making provision demonstrates a realization by Congress that Commission would be confronted with unforeseen problems of administration in regulation, and should have a basis for coping.

iii. In addition, inherent protections of notice before rule making provides that single defendants will not be singled out.

d. Rule – Plain language gives the commission the authority to “make rules and regulations for purposes of carrying out provisions of Section 5” authorizes promulgation of rules.

3. Rule – If an agency has the power to issue rules, and the rules are not “required by statute to be made on the record after opportunity for agency hearing”, informal rulemaking can take place.

a. Now, the assumption is that facially ambiguous rulemaking grants always include the authority to adopt rules have the force of law. American Hospital Association v. NLRB

b. Rulemaking Procedurei. APA § 553 the step process (if agency has power to issue rules and rules are not required by

statute to be made on the record after opportunity for agency hearing):1. Issue a notice in Federal Register of proposed rulemaking;

a. Set forth the “time, place, and nature of public proceedings”, the “legal authority under which the rule is proposed”, and “either the terms of substance of the proposed rule or a description of the subjects and issues involved”

2. Provide opportunity to receive and consider public comments on the proposed rules;3. Issue concise general statement of the rule basis and purpose

a. Agency must analyze and consider all relevant matter, and the required statement should not only relate to the data, but also explain the actual basis and objectives of the rule.

b. Notice what is lacking – no hearing requirement in the sense of oral presentation, live testimony, or cross-examination.

c. Procedural requirements prescribed by the APA satisfy whatever minimum standards due process includes

ii. Substantive Review and the Rulemaking Process1. Rule is unlawful if it is arbitrary and capricious (APA § 706(2)(A))2. Substantive Review Outside the APA

a. Pacific States Boxes & Basket Co. v. White (1935)i. A rule is arbitrary and capricious only if the party challenging it can

demonstrate that there is no set of facts and no plausible reason that might support it

3. Substantive Review Under the APAa. § 553 requires notice to adopt a rule, allow some reasonable period for

submission of written comments and then promulgate final regulation accompanied by only a “concise” and “general” statement of reason

b. Automotive Parts & Access. Assoc. v. Boyd (DC. Cir. 1968)i. Rule was not arbitrary and capricious where party challenging it

made weak arguments against it that were not supported in the record and agency provided brief, plausible reasons for issuing the rule

1. Rational consideration of the relevant matter presentedc. National Tire Dealers & Retreaders Assoc. v. Brinegar (DC Cir. 1974)

i. Rule was arbitrary and capricious where party challenging it submitted high quality studies by credible consultants that rule was unnecessary and impracticable and agency did not respond adequately to the studies

1. Facts must be supported and assertions convincingii. Failure

1. Substantivea. Fail to submit evidence supporting rule

2. Procedurala. Fail to respond to opposing party’s claims

iii. Agency must respond to any well supported contention against proposed rule

d. Motor Vehicle Manuf. Assoc. of U.S. v. State Farm (1983)i. Rescission of a rule must go through same process of promulgation –

notice of proposed rulemaking ii. A reviewing court may not set aside an agency rule that is rational,

based on consideration of the relevant factors and within the scope of the authority delegated to the agency by the statute

iii. Courts may not accept post hoc rationalizations for agency actionsiv. Rulemaking cannot be found wanting simply because the agency

failed to include every alternative device and thought conceivable by the mind of man regardless of how uncommon or unknown that alternative may have been

v. The agency must explain evidence that is available, and must offer a “rational connection between the facts found and the choice made.”

vi. It is within the agency’s discretion to pass upon the generalizability of these field studies, which is precisely the type of issue which rests within the expertise of the agency, and upon which a reviewing court must be most hesitant to intrude

vii. Holdings1. For procedures and standards on review, rescission =

amendment = issuance of rule2. NHTSA was a&c for failing to consider air bag only

alternativea. Must propose multiple alternatives

3. NHTSA was a&c for failing to explain adequately the difference between its prediction that most drivers who didn’t buckle seat belts would disconnect automatic seat

belts and study that found that only 50% of drivers disconnected seat belts with ignition interlocks

iii. Procedural Requirements of APA § 5531. Notice and Opportunity for Comment

a. Requirementsi. Notice must include reference to any studies or other materials on

which agency may rely as part of its basis for final rule – Nova Scotia Food

ii. Notice must “adequately foreshadow” final rule, and final rule must be “logical outgrowth” of notice and comment process

b. United States v. Nova Scotia Food Products (2nd Cir. 1977)i. Judicial review must be on the “whole record”

1. Except that findings of fact such as would be required in an adjudicatory proceeding or in a formal “on the record” hearing for rulemaking need not be made

ii. The agency bears a burden of adducing a reasoned presentation supporting the reliability of its methodology

iii. Reviewing court will consider whether the agency has taken account of all relevant factors and whether there has been a clear error of judgment

iv. We can think of no sound reasons for secrecy or reluctance to expose to public view (with exception for trade secrets or national security) the ingredients of the deliberative process

1. To suppress meaningful comment by failure to disclose the basic data relied upon is akin to rejecting comment altogether

2. Hearings in Informal Rulemakinga. Vermont Yankee Nuclear Power Plant v. Natural Resources Defense Council

(1978)i. Court held that courts can only require procedures required by rule,

statute or constitution1. Reasons

a. Judicial review would be unpredictableb. Agencies would adopt full adjudicatory procedures

in every instancec. Inherent advantages of informal rulemaking would

be totally lostii. Courts must review the agency’s choice of procedures on the basis of

the record available to the agency when it made the decision3. Ex Parte Contacts in Rulemaking

a. Communications from interested parties to administrators outside the formalities of the comment process

i. Banned in formal adjudication and formal rulemaking, but silent re informal rulemaking

b. HBO v. FCC (DC Cir. 1977)i. Communications which are received prior to issuance of a formal

notice of rulemaking do not, in general, have to be put in a public fileii. No ex parte communication during informal rulemaking

1. Rulemaking does not begin until after the agency issues its notice

c. Action for Children’s Broadcasting v. FCC (DC Cir 1977)i. Constraints on ex parte communications (via HBO) only applies

where rulemaking proceedings involve competing claims to a valuable privilege

1. It is at that point where the potential for unfair advantage outweighs the practical burdens, which we imagine would not be insubstantial, that such a judiciary conceived rule would place upon administrators

ii. E.g. Sangamon Valley Television Corp. v. United States (DC Cir. 1959)

1. Where two or more individuals are competing for a valuable right, agency is prohibited from engaging in ex parte communications

iii. Think of Londoner versus Bi-Metallic distinction. Person versus a person fighting over the same thing (Sangamon Valley) – this is on the Londoner side of the distinction, and due process applies, meaning need more procedural fairness and no ex parte communication.

1. Here, we are on the Bi-Metallic side with a flat prohibition effecting all parties the same amount. Therefore, strict procedural protections that due process violation triggers is not present

d. Sierra Club v. Costle (DC Cir. 1981)i. Unless expressly forbidden by Congress, intra-executive contacts

may take place, both during and after the public comment period1. Such conversations must be docketed where they directly

concern the outcome of adjudications or quasi-adjudicatory proceedings

ii. Comments received after close of formal comment period can be docketed and responded to

1. Statute provided that all documents that become available after the proposed rule has been published and of central relevance shall be placed on the docket

4. Bias and Prejudgment in Rulemakinga. Both APA and Due Process require a neutral decision-makerb. Potential sources of bias

i. Pecuniary, relational, prior role in dispute, prejudgmentc. Rulemaking

i. Assn. of National Advertisers v. FTC (DC Cir. 1979) – FTC Commissioner made public comments concerning regulation of children’s advertising declined to recuse himself from rulemaking. Court upholds.

1. A commissioner should be disqualified only when there have been a clear and convincing showing that agency member has unalterably closed mind on matters critical to disposition of proceeding

a. When a proceeding is classified as rulemaking, due process ordinarily does not demand procedures more rigorous than those provided by Congress (legislative vs. judicial)

i. Should not impose judicial roles upon administrators when they perform distinct functions

b. The mere discussion of policy or advocacy on a legal question is not sufficient to disqualify an administrator (rulemaking is a policy judgment)

d. Adjudicationi. Standard is “preliminary belief” – a tentative preliminary belief

regarding the adjudication will disqualify a judge.ii. Much more likely to be disqualified in adjudication.

iii. Cinderella Career & Finishing Schools, Inc. v. FTC 1. Prejudged and given the appearance of having prejudged

issues of fact by publicly criticized certain business practices and referred to them as “deceptive”.

a. Commissioner can’t be involved with adjudication

2. Test is whether a disinterested observer may conclude that the agency has in some measure adjudged the facts as well as the law in advance of hearing it.

e. Just because use of evidentiary hearings in the rulemaking process does not mean the Cinderella standard applies to rulemaking

5. Exemptions from Notice and Comment (APA § 553)a. Categorically exempts rules related to military or foreign affairs functions,

agency management and personnel, and “public property, loans, grants, benefits or contracts.” (§ 553(a))

i. However, most benefit rules are not exempt because of agency-specific statutes and agency rules comply with § 553

b. Where “good cause” justifies dispensing with notice and comment (impracticable, unnecessary or contrary to public opinion), but courts are stingy in interpreting good cause (§ 553(b))

i. Usually issue the rule at first as a temporary emergency rule enacted immediately, and at the same, issue a notice of proposed rulemaking, solicit comments, etc.

c. Exempt from obligation to provide notice and permit comment for “interpretative rules, general statements of policy, or rules of agency organization, procedure or practice.” (§ 553(b))

i. Legislative rule1. Exercise of previously delegated power, new law that

completes an incomplete legislative design2. Prescribe, modify or abolish duties, rights, or exemptions

ii. Nonlegislative rule (policy)1. Do not exercise delegated lawmaking power2. Provide guidance to the public and to agency staff and

decisionmakers, clarifies an existing dutyiii. Am. Mining Congr. v. Mine Safety & Health Admin (DC Cir. 1993)

1. Cannot impose new dutya. Can clarify previous rule

2. Notice and comment not required where the disputed rule does not have the “force of law”

a. Rule has “force of law” (legislative) only if Congress has delegated legislative power to the agency and if the agency intended to exercise that power in promulgating the rule

i. Intent found where, in the absence of a legislative rule by the agency, the legislative basis for agency enforcement would be inadequate

ii. Agency presumably intends a rule to be legislative if it has the rule published in CFR

iii. If a second rule repudiates or is irreconcilable with a prior legislative rule, the second rule must be an amendment of the first; and an amendment to a legislative rule must itself be legislative

3. A rule is legislative if any of the following are satisfied:a. Agency says it is legislative;b. Rule is published in CFR (but Court later said this

is “only a snippet of evidence”);c. An enforcement action could not be brought w/o

the rule;d. The rule amends a pre-existing legislative rule

4. A rule does not become an amendment merely because it supplies crisper and more detailed lines than the authority being interpreted

iv. Community Nutrition Institute v. Young (DC Cir. 1987)1. FDA created “action levels” for contaminates and eventually

made them public2. Despite the fact that FDA would have to prove a violation of

the Act itself and not merely non-compliance with an action level (thus, not force of law), court rules that FDA bound itself by announcing guidelines from which it did not deviate

3. Test for policy statementsa. Agency cannot bind itself in a policy statement. A

policy statement can only announce general policies that do not actually bind the agency to act in accordance with the policy statement. Agency must remain free to act in a manner inconsistent with policy statement in a given case.

4. Decision has been criticized for making it so that agencies won’t publicize its enforcement criteria, thereby limiting notice to affected parties of what actions they can take to avoid legal challenges

v. Deference to agency interpretations1. In Seminole Rock (1944), S. Ct. held that a court must defer

to any plausible agency interpretation of an agency’s legislative rule, but in Gonzales v. Oregon (2006), S. Ct. held that no deference is due an interpretation of a rule that merely parrots a statute

c. Implementing Administrative Policy Without Legislative Rulesi. Making general rules of conduct

1. Can declare them through adjudicatory decisionsa. Unless Congress says agency can decide only by APA § 553, then agency has

the discretion to decide a rule through adjudication.b. Allows for fluctuation of policy within each administration

i. Fear of abuse of discretion if retroactive application of new policy (through adjudication)

2. Can use rulemaking procedure of § 553a. Courts sometimes say can only use § 553, not adjudicatory cases

i. Never have had a majority of the Supreme Court say thisb. Advantages – prospective, parties are on notice and can’t be surprised

ii. Discretion to Adjudicate (vs. Rulemaking)1. SEC v. Chenery [Chenery II] (1947)

a. SEC looks at a practice engaged in by corporations and says it is illegal because the Supreme Court says it is illegal.

b. Chenery Corporation argues that SEC’s interpretation of Supreme Court opinions was wrong.

c. Courti. Chenery is right – SEC’s interpretation of the practice was different

than Supreme Court’s, and therefore reverse decision saying unlawful.

d. Remandi. SEC still thinks practice is unlawful, so affirmed the decision, but on

other grounds – expertise in applying policies underlying securities law.

ii. Chenery argues that agency has the power to issue a rule, not do it by a particular case decision and use it as a basis for issuing a rule.

e. Court (II)i. Upheld SEC decision on remand, even though it was the same

decision

f. Rules:i. An agency can announce generally applicable principles on a case-

by-case basis in adjudications rather than in a rule because “not every principle essential to the effective administration of a statute can or should be cast immediately into the mold of a general rule.”

ii. An agency can take an action on remand identical to the action reversed by the court if the agency can provide a different and legally permissible basis for the action.

2. NLRB v. Wyman-Gordon (1969) a. Previous case, Excelsior – where NLRB held there was unfair labor practice

b/c Excelsior didn’t provide list of union members to union before electioni. NLRB said unfair, but only applied prospectively

b. Wyman-Gordon didn’t give list, union claims unfair labor as under Excelsiori. NLRB directs Wyman-Gordon to comply, citing rule from Excelsior

ii. Did NLRB have power to create a general rule of conduct through adjudication in Excelsior?

c. Court – plurality (4)i. Not like Excelsior, but it is lawful

1. Judicial precedent creates rules, and NLRB could issue the order for the rule to be complied with (so not penalized right away)

d. Concurrence (3) – Authorized to use § 553, but also had discretion to use adjudicative process

e. Dissent (2)– Congress clearly wants § 553 to be used, and can’t make prospective rules through adjudication

3. NLRB v. Bell Aerospace Co. (1974)a. Affirms Chenery II and Wyman-Gordon

i. Board is not precluded from announcing new principles in an adjudicative proceeding

ii. Choice between rulemaking and adjudication lies in the first instance within the Board’s discretion

1. It has not been shown that adverse consequences ensuing from reliance on past decisions are so substantial that Board should be precluded from reconsidering the issue in an adjudicative proceeding

2. Not a case where a new liability is sought to be imposed on individuals for past actions which were taken in good-faith reliance on Boards pronouncements

3. Nor are fines or damages involvedb. Bowen v. Georgetown Univ. Hospital (1988)

i. Rule made through adjudication can be applied retroactivelyii. § 553 rules do NOT apply retroactively

4. Rules must be followed until changed by rulesa. Where the rights of individuals are affected, the agency must follow its own

proceduresb. Once standards are promulgated, even if an agency is required to impose such

standards, the agency must proceed accordingly (Service v. Dulles, 1957)i. Not grounded in Due Process Clause, but rather, possibly, in APA §

706 (directing court to set aside arbitrary and capricious actions)c. However, it is always in the discretion of a court or administrative agency to

relax or modify its procedural rules adopted for the orderly transaction of business before it when in a given case the ends of justice require it. The action or either in such a case is not reviewable except upon a showing of substantial prejudice to the complaining party (American Farm Lines v. Black Ball Freight Service, 1970)

iii. Required Rulemaking1. Morton v. Ruiz (1974)

a. Unanimously says agency can only use § 553

b. Agency had long interpreted a statute, dealing w/ Native American health benefits, through case-by-case adjudication

i. Only applied to those living on reservation1. Ruiz left for job, and when lost, agency wouldn’t give $2. Ruiz says never would have risked that for family if knew

c. The Secretary does have the power to create reasonable classifications and eligibility requirements in order to allocate the limited funds available to him for this purpose, but in such a case the agency must, at a minimum, let the standard be generally known so as to assure that it is being applied consistently as so as to avoid both the reality and appearance of arbitrary denial of benefits to potential beneficiaries

d. The APA was adopted to provide, inter alia, that administrative policies affecting individual rights and obligations be promulgated pursuant to certain stated procedures so as to avoid the inherently arbitrary nature of unpublished ad hoc determinations

i. Difficult b/c dealing w/ an individual, not a major corporation expected to be aware of holdings, etc.

ii. U.S. history w/ fiduciary responsibility to Native Americans…iii. Case never cited again

iv. Advantages/Disadvantages of Rulemaking1. Advantages

a. Higher quality rules due to broader inputi. Focus on policy issues rather than idiosyncratic facts

ii. Forward-looking instrumental approach.b. Greater fairness due to broader participation rights, better notice, and

application to all regulatees and beneficiaries at same time.c. More efficient and effective due to binding effect

i. Reduction in hearings and scope of hearingsii. More clarity

d. Better political accountability due to advanced noticei. Broader participation rights and transparent nature of policymaking

process2. Disadvantages

a. Reasons given in Cheneryi. Agency might not know about facts

ii. Consider increased cost after State Farmb. Political accountability

v. Non-Adjudication Alternatives to Making Rules1. Guidance Documents

a. Formal statements, addressed to regulated entities or partners in regulation that explain what the agency understands its formal regulations to require

b. May describe a “safe harbor” – course of conduct that may not represent the only way to satisfy legally binding general language but that the agency promises will be viewed as compliance

2. Speeches, press releases, forms and instructions, personnel manuals – affect private behavior

d. Reform of Federal Agency Rulemaking Proceduresi. Ossification of Rulemaking

1. Agencies don’t make rules anymore, and don’t amend those madea. Too expensive – even § 553 procedure, burdensomeb. Hinders purpose and goal of agencies – Congress giving them responsibilities

that aren’t meti. Congress can exempt rules during crisis…policy, tons of litigation

about it all…2. Movement toward “reg-neg” = regulatory negotiation

a. Agency issues a noticeb. Instead of soliciting comments, conducts a reg-neg meeting w/ all interested

parties to address the issues

c. Need unanimity at end to issue a ruled. Arises in very controversial situations, doesn’t work

i. Agreement either through attrition (bogus) or just resort to § 553 and even more time was wasted

IV. Suits to Review Administrative Actiona. Intro

i. Public Law Remedial System1. See page 781

b. Scope of Reviewi. Presumptive But Limited Review

1. Citizens to Preserve Overton Park v. Volpe (1971)a. Procedure

i. DOT trying to decide where to put highway in Memphis – federal funding w/ local approval

ii. DOT proceeding was informal adjudication – APA § 5551. Most agency decisions are this type

iii. APA § 555 provides three rights1. If provide a statement to the agency, can get a copy2. If consult agency, have right to counsel3. If make a written request, entitled to written response

iv. No procedural guidelines for the agencyv. No due process issues b/c doesn’t single out individuals (Bi-Metallic)

vi. Citizens to Preserve want judicial review of the decision1. Statute is silent about reviewability

b. APA §701(a)(1) – Action subject to judicial review unless statutes precludes i. Presumption of reviewability can be overcome only by clear and

convincing evidencec. APA §701(a)(2) – Judicial review unless action is committed to agency

discretion by lawi. Only in rare instances where statutes are drawn so broadly that in a

given case there is no law to applyd. Standard of review (APA § 706(2)(A)) is arbitrary and capricious

i. Deference to agencyii. If the judge wants to hold that an agency action is arbitrary and

capricious, says that the review should be “probing in depth” and “searching and careful”.

iii. If judge wants to hold that agency action is NOT arbitrary and capricious, say that review is “narrow”.

e. Substantial-evidence test is authorized only when the agency action is taken pursuant to a rulemaking provision of the APA or when the agency action is based on a public adjudicatory hearing

2. Post Citizensa. APA § 555 applies to informal adjudicationb. Presumption of reviewability still around, but narrower and weaker

i. Do not always need clear and convincing evidence that not to be reviewed

ii. Just look to see/infer what congress wantedc. Court more willing to conclude that Congress didn’t intend court to review;

and that congress conferred discretion to the agency (no longer narrow and rare)

d. Less willing to find judicial review standard in statutory language e. No longer able to call decision maker to testify

i. Just request a statement of reasons from the agency as to why made decision

f. “No law to apply” standard still stands – more flexibleg. Standard of review = “searching and careful” “thorough, probing, in depth”

and “narrow” still good law3. Heckler v. Chaney (1985)

a. Under § 772(a)(2), even when Congress has not affirmatively precluded judicial oversight, review is not to be had if the statute is drawn so that a court would have no meaningful standard against which to judge the agency’s exercise of discretion

ii. Findings of Fact and the “Substantial Evidence” Test1. APA §706(2)(E) - court shall “decide questions of law” and “uphold findings of fact if

supported by substantial evidence”2. Consolidated Edison v.NLRB (1938)

a. Substantial Evidence = “such relevant evidence as the reasonable mind might accept as adequate to support a conclusion”

i. Very deferential to agency decisions –even if not agree, must affirm if reasonable

3. Universal Camera Corp. v. NLRB (1951)a. Court must consider both the evidence that supports the finding and the

evidence that detracts from it (whole record)b. Still very deferential, but court looks at whole record

i. Agency’s findings of fact, not the ALJ’s, are deferred toii. BUT, ALJ findings are still part of record, so considered as evidence

4. Applies only to findings made in formal adjudication or formal rulemaking unless organic act specifies evidence review

a. A&C applies to findings in all other cases, but it is not clear there is any real difference between the two

iii. Judicial Review of Statutory Interpretations1. NLRB v. Hearst (1944)

a. Majority (5)i. Court must uphold agency conclusion if “warrant in record and

reasonable basis in law” (“more than a mere scintilla or such relevant evidence as a reasonable mind might accept as adequate to support a conclusion”)

1. It is NLRB’s job to decide whether policies of NLRA would be furthered by including newsboys in scope of statute, subject to deferential review

ii. Questions of statutory interpretation, especially when arising in the first instance in judicial proceedings, are for courts to resolve, giving appropriate weight to the judgment of those whose special duty is to administer the questioned statute

1. But where the question is one of specific application of a broad statutory term in a proceeding in which the agency administering the statute must determine it initially, the reviewing court’s function is limited

iii. Issues of fact1. § 706(e) says court must uphold agency’s finding of fact if

reasonably supported by evidenceiv. Issues of law

1. § 706 says courts decide issues of law with no deferenceb. Minority (4)

i. This is an issue of law that should be resolved through application of case-law involving respondeat superior and responsibility for withholding taxes

c. Supreme Court vacillated between these 2 approaches for decadesiv. Review of Science-Based Decisions: Interplay of Fact, Policy, and Interpretation

1. Industrial Union Dept. v. American Petroleum Institute [Benzene](1980)a. Court: 4-1-4 Resultb. Plurality (4)

i. This was not consistent with the statute. Statute prohibits a more stringent health based standard without first making a required finding that current exposure poses a significant health risk, and OHSA never made that finding.

1. Must show significant risk in order to make the health standard more stringent.

2. No support provided that limit should be reduced to the lowest possible level. In addition, no evidence that benzene increases the risk of cancer at the lower level.

3. Burden on agency to show, on the basis of substantial evidence, that it is at least more likely than not that long-term exposure of low quantities of benzene presents a significant risk of material health impairment.

c. Rehnquist (concurrence)i. Congress did not resolve issue, and therefore this is an

unconstitutional delegation of power to unelected bureaucrat. 1. Non-delegation doctrine – Congress is the governmental

body best suited and most obligated to make the choice, improperly delegated that choice to the Secretary of Labor.

a. No intelligible principle to guide the agency.d. Dissent (4)

i. Agency acted within discretion, and should provide deference to agency relative expertise.

ii. Determination must be upheld if supported by “substantial evidence in the record and considered as a whole”. This is a highly deferential test, and entitled to the traditional presumption of validity.

iii. Decision here was a reasonable one.2. Review of Regulatory Decisions Made in the Face of Uncertainty

a. Industrial Union Dept., AFL-CIO v. Hodgson (DC Cir. 1974)i. When obligated to make policy judgments where no factual

certainties exist or where facts alone do not provide the answer, the agency must so state and go on to identify the considerations they found persuasive

b. Ethyl Corp. v. EPA (DC Cir. 1976)i. Where a statute is precautionary in nature, the evidence difficult to

come by, uncertain, or conflicting because it is on the frontiers of scientific knowledge, the regulations designed to protect the public health, and the decision that of an expert administrator, court will not demand a rigorous step-by-step proof of cause and effect

c. American Petroleum Institute V. EPA (5th Cir. 1981)i. Agency must be accorded considerable deference, so long as not

arbitrary and capricious and so long as the agency gives at least minimal consideration to the relevant facts as contained in the record

d. Public Citizen Health Research Group v. Tyson (DC Cir. 1986)i. Courts function is to search for substantial evidence, not proof

positive1. When the evidence can be reasonably interpreted as

supporting the need for regulation, the court must affirm the agency’s conclusion, despite the fact that the same evidence is susceptible of another interpretation

e. Daubert v. Merrell Dow Pharmaceuticals (1993)i. To be admissible in federal court, an expert’s testimony has to meet

the standards for acceptance within the scientific community1. Trial judges must undertake careful screening of proffered

evidence before allowing its introduction and evaluation by a jury

3. Disclosurea. Shelby Amendment

i. Obligates government agencies to disclose, under FOIA, raw data generated by researchers funded by federal dollars, whose published results become a basis for regulatory action

b. Data Quality Act

i. Covers all information an agency disseminates for any purposeii. Agency must establish and follow internal procedures to assure

reliability, objectivity, and quality of information it disseminatesiii. Must afford an opportunity for any private party who disputes the

accuracy, objectivity, or quality of the info disseminated to seeks its correction or withdrawal

v. Interpretations of Law1. Chevron v. Natural Resources Defense Council (1984)

a. When a court reviews an agency’s construction of the statute which it administers, the court is confronted with two questions:

i. Whether Congress has directly spoken to the precise question at issue. If so, that is the end of the matter

1. If Congress had included a definition of source in the statute – it would be all over. Definition would bind the agency and courts.

2. Use traditional tools of statutory construction to decide whether a term has a fixed meaning, including legislative history

a. Those tools include dictionary definitions, legislative history, statutory purpose[s], and canons of construction

ii. If the statute is silent or ambiguous with respect to the specific issue, the question becomes whether the agency’s answer is based on a permissible (reasonable) construction of the statute

1. An interpretation is reasonable if it is within the range of definitions the statutory language will support, and the agency has adequately explained the reasons for its choice of interpretations ala State Farm

b. Interpretation would be binding only in rare instance where court finds agency interpretation is the ONLY permissible interpretation

c. Scope of Chevroni. Obviously applies to interpretations adopted in legislative rules and in

formal adjudications, but lower courts differ on whether it also applies to interpretative rules, policy statements, informal adjudications, advisory letters, amicus briefs, etc.

2. United States v. Mead Corp (2001)a. Administrative implementation of a particular statutory provision qualifies for

Chevron deference when it appears that Congress delegated authority to the agency generally to make rules carrying the force of law (informal rulemaking, formal adjudication), and that the agency interpretation claiming deference was promulgated in the exercise of that authority

i. Notice and comment?ii. Binding or just between the parties?

iii. Low number of opinions or too many to be considered law?b. Skidmore v. Swift & Co (1944)

i. The weight accorded to an administrative judgment in a particular case will depend upon the thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors which give it power to persuade, if lacking power to control

1. Agency discretion, but only to the extent that those interpretations have the power to persuade.

a. “Sliding scale deferenceb. Applies when Chevron does not

3. Consequence of Chevron and Meada. Administrative implementation of particular statutory provision qualifies for

Chevron deference when it appears that Congress delegated authority to the agency generally to make rules carrying the force of law and that the agency

interpretation claiming deference was promulgated in the exercise of that authority. Delegation of such authority may be shown in a variety of ways, as by an agency’s power to engage in adjudication or notice and comment rulemaking

b. Chevron deference is warranted when there has been delegation by way of authorization to engage in rulemaking or adjudication that produces regulations or rulings.

i. Congress contemplates that agency will have effect of law when it provides for relatively formal administrative procedures tending to foster fairness and deliberation that should underlie a pronouncement of such force (notice and comment rulemaking and formal adjudication). BUT sometimes deference is warranted even when these procedural things are not present.

1. Face of statute – no indication that Congress meant to delegate authority to issue classification rulings with the force of law

a. Does ruling have precedential value? This is not determinative, but just a consideration.

c. Availability of Judicial Reviewi. Intro

1. Overton Park – rebuttable presumption of judicial reviewii. Reviewability

1. APA provides a right to review of final agency action subject to 701(a)(1)—statute precludes review—and 701(a)(2)—action committed to agency discretion by law

2. Statutory Preclusion – § 701(a)(1)a. Constitutional Restraints on Statutory Preclusion of Review

i. Johnson v. Robison (1974)1. Robison is a conscientious objector who performs alternative

service and applies for veterans’ benefits. VA denies on basis that statute does not permit. Robison seeks review based on alleged violation of 1st Amend. (free exercise of religion)

2. Court applies avoidance canon as basis for decision allowing constitutional challenge to statute even though statute precluded review

a. S. Ct. has acquiesced in statutory language making agency determination on property claims final and conclusive

b. S. Ct. construes preclusion clauses very narrowly in personal liberty cases

b. Limiting Review at the Enforcement Stagei. Adamo Wrecking Co. v. United States (1978)

1. Clean Air Act only allows review if filed within 30 days after rule issued

2. 30 day limit is OK – BUT, petitioner may challenge on other grounds

a. Definitional grounds (agency not authorized to issue this type of rule – jurisdiction/separation of powers)

3. Although Courts reluctant to allow Congress to preclude review, they will allow Congress to establish strict temporal limits on reviewability of review.

4. However, cannot preclude review of Constitutional claims – all constitutional claims imply judicial review of Constitutionality.

3. Decisions “Committed to Agency Discretion” By Law – § 702(a)(2)a. Webster v. Doe – 1988

i. Two factors to consider when determining if decision is committed to agency discretion

1. Wording of the Statutea. “In his discretion…whenever he shall deem…

advisable…”2. Context

a. CIA – national security concernsb. Don’t want nat’l security debated in open court

ii. Reaffirms Robison to allow court to review for constitutional claimsiii. Dissents

1. O’Connor – stay out of CIA business all together2. Scalia – Not like line of decisions – if congress says no

review, then should be no review (anti-Robinson) (even w/ constitutional issues)

4. Review of Agency Inactiona. Review of Enforcement Discretion

i. Dunn v. Retail Clerks Int’l Ass’n (6th Cir. 1962)1. Even if facts presented to agency show a clear violation of

law, court cannot compel agency to acta. Agency decisions NOT to act are unreviewable

exercises of agency discretionb. Agencies must have discretion of what to pursue –

those that cause the most harm, etc.c. So many reasons an agency may decide not to act –

can’t even list to court, so can’t reviewii. Southern Cal Dist Council v. Ordman (C.D.Cal 1970)

1. When agency gives a reason for not acting, and it raises an issue of law, then court can review

2. Court can review and reverse decision not to act if agency gives legally incorrect reason for declining to act

iii. Dunlop v. Bachowski (1975)1. S. Ct. requires Department of Labor to provide reasons for

not acting:a. Statute protects private rights rather than public

rights;b. Statute couples “shall” (word of command) with

justiciable standard2. “Reasons” examination held to arbitrary and capricious test

iv. Heckler v. Chaney (1985)1. Opponents of death penalty petition FDA to prohibit use of

prescription drugs for lethal injection on basis that they are not “safe and effective” for that use. FDA denies petition.

2. Agency decision not to act is presumptively unreviewablea. Presumption can be rebutted by language of

command coupled with justiciable standardb. Review of Discretion to Regulate (Agency Inaction in Rulemaking)

i. NRDC v. SEC (DC Cir. 1979)1. Environmental and anti-discrimination assns petition SEC to

issue rule that broadly requires corps to report their activities in these areas. SEC rejects petitions and issues only narrow-scope rule after conducting rulemaking. Assns seek review

2. Court allows review of a decision not to issue rule after conducting a rulemaking

a. When an agency has already gone through the rulemaking procedure, Court is not telling the agency to reallocate its resources because it has already allocated them

ii. Am. Horse Protection Assn. v. Lyng (DC Cir. 1987)

1. Agency decisions to refuse to issue or amend a rule in response to a petition are subject to deferential review

2. APA §553(e) requires agencies to allow interested persons to petition for issuance, amendment or repeal of a rule and to give brief statement of grounds for denial

3. Where agency fails to provide an adequate explanation for denial, Court should remand to agency to inquire whether changed circumstances call for amendment of earlier rule

iii. Timing1. Requiring Final Agency Action

a. Dalton v. Specter (1994)i. Specter seeks review of decisions of DOD, BCC, and President to

close Phila. Navy Yard. Statute silent on reviewabilityii. President is not an agency

1. Therefore, no APA review, but can review constitutionality of President’s actions

2. President is not subject to non-statutory review because he did not violate any statutory command or prohibition

iii. Two part test for determining finality1. Agency must have completed its decision-making process2. The result of that process must be one that will directly

affect the partiesiv. Concurrence – Statute implicitly precludes review under § 701

b. Flue-Cured Tobacco Coop Stabilization Corp. v. EPA (4th Cir. 2002)i. Agency action which carries no direct and appreciable legal

consequences is not reviewable under the APAc. Finality of Agency Inaction

i. Nor-Am Agric. Prod. v. Hardin (1970) & EDF v. Ruckelshaus (1971)1. Which of the following decisions by the EPA under FIFRA

are final and immediately reviewable:2. (1) Decision to initiate cancellation proceeding

a. Fails both part (1) and (2).3. (2) Decision not to initiate a cancellation request

a. (1) Definitely final – end of agency process.b. (2) Yet no formal legal effect.

i. Subject to Chaney – not enforcement so non-reviewable.

ii. Cannot force an agency to commit resources to this matter unless you have a (1) statutory command, with (2) law to apply.

4. (3) Decision to cancel pesticidea. (1) Definitely final.b. (2) Legal effect – yes. This eliminates the right to

sell this pesticide in commerce, and therefore directly effects people. This is a legal effect.

5. (4) Decision not to cancel after going through the processa. (1) End of process (even though could start another

one down the road).b. (2) Although doesn’t change the status quo, may

have a direct effect on someone, and will not be overturned by Chaney because Chaney does not apply – went through entire process and already allocated resources, so although review going to be very deferential, this is still reviewable.

i. When inaction has the same impact on the rights of the parties as denial of relief, agency cannot preclude review by casting

its decision in the form of inaction rather than in the form of an order.

6. (5) Agency ignores the petition to cancela. This will never be final.

7. (6) Decision to suspend selling of pesticide pending outcome of cancellation proceeding

a. (1) This may be deemed as final even though it is simply a suspension and not the end of the process, but it depends on the time limit for suspension.

b. (2) Again, whether this has legal consequences that are direct depends on length, as well judge.

i. Some would say no legal consequences – status quo remains the same. Other, more progressive, will say thousands of animals would have been killed.

c. Circuit courts split, and Supreme Court has denied cert.

d. Agency Delayi. At some point administrative delay amounts to a refusal to act

1. Record doesn’t permit court to determine whether that point has been reached, but on remand, Secretary must act or explain reasons for delaying further action

ii. APA §706(1) authorizes a court to compel agency action unreasonably delayed, but it is almost impossible to win an unreasonable delay case in the absence of a statutory deadline

2. Ripenessa. Abbott Labs v. Gardner (1967)

i. FDA issues “every time” rule - include generic name on drug. Old rule said one couldn’t challenge rule until you break it and then sue under enforcement. New rule says you can sue for declaration whether it’s valid upon issuance of rule

ii. Test to determine whether rule is ripe for review before its application1. Did Congress intend to forbid pre-enforcement review?

a. Presumption of reviewabilityb. Congressional intent to preclude review had to be

demonstrated by “clear and convincing evidence”2. Is issue appropriate for judicial resolution at this time?

a. Would court be more able to decide later with more factual information?

3. Would plaintiff suffer hardship if review deferred?a. If wait until violation, would petitioner suffer “horn

of dilemma” – violate and risk public relations disaster.

b. Toilet Goods Assoc. v. Gardner (1967)i. Rule that FDA inspectors need to be given free access to plants; if

not, cosmetic certification takenii. In determining whether a challenge to an administrative regulation is

ripe for review a twofold inquiry must be made:1. First to determine whether the issues tendered are

appropriate for judicial resolution2. Second, to assess the hardship to the parties if judicial relief

is denied at that stageiii. Court applies Abbott test:

1. Congress did NOT intend for pre-enforcement review2. Not ripe for review b/c judiciary does not have a record to

review – issue of fact and can only be evaluated in a particularized application

3. No hardship to ∏ b/c certification halted, not like seizure of goods, heavy fines, adverse publicity or criminal liability

a. Poor reasoning according to Prof. Piercec. Abbott Labs made rulemaking long and burdensome and expensive – chipped

away ati. Reno v. Catholic Social Services (1993)

1. Abbott pre-enforcement review does not apply to benefit eligibility rules, unless Congress has explicitly authorized review.

ii. Thunder Basin Coal Co. v. Reich (1994)1. Congress implicitly precluded pre-enforcement review of a

regulatory rule by providing an alternative route to review2. Based on explicitly providing that to obtain review, must

violate and challenge the statute.iii. Shalala v. Illinois Council on Long Term Care (2000) – challenged

first prong of Abbot test1. Did congress intend to authorize pre-enforcement review?

Rather than did Congress intend preclude it? – presumption of non-reviewability

3. Exhaustion of Administrative Remediesa. Doctrine

i. To avoid premature claims, agency challengers must “exhaust” their administrative remedies before seeking judicial review.

ii. Allows agency to develop and resolve factual issues, exercise discretion, apply expertise, enhance efficiency, avoid burdening courts, respect agency autonomy.

b. Myers v. Bethlehem Steel (1938)i. NLRB issues rule over BS – BS challenges NLRB jurisdiction (says

not interstate commerce)ii. Agency has initial decision if there is jurisdiction or not

1. Previously, agencies never able to solve constitutional issues (like jurisdiction)

iii. No one is entitled to judicial relief for a supposed or threatened injury until the prescribed administrative remedy has been exhausted

iv. Party must challenge jurisdiction at agency hearing, subject to deferential judicial review of agency determination at end of proceeding

v. Exhaustion cannot be circumvented by asserting that the charge on which the complaint rests is groundless and that the mere holding of the prescribed administrative hearing would result in irreparable damage

c. McKart v. United States (1969)i. Sole surviving son exempt from draft, if fill out form – didn’t, and

then didn’t go when drafted – arrestedii. In criminal cases, use of exhaustion doctrine can be exceedingly

harsh1. Must ask whether the governmental interest is compelling

enough to outweigh the severe burden placed on petitioneriii. S. Ct. excuses failure to exhaust because:

1. Administrative remedies are no longer available;2. Hardship in criminal context;3. Issue did not involve fact-finding, discretion, or expertise;4. Others are not likely to be as foolish as McKart

d. McGee v. United States (1971)i. Similar to McKart, but conscientious objector failed to fill out card

ii. Court1. McGee did NOT exhaust all remedies, and reasons are

important here

2. Agency’s gathering of facts / analysis and expertise are necessary

iii. When a claim to exemption depends on the careful gathering and analysis of relevant facts, the interest in full airing of the facts within the administrative system is prominent

e. Woodford v. Ngo (2006)i. Statute that requires exhaustion of “available” remedies does not

permit petitioner to wait until after time to use remedy expires and then seek review.

ii. A court cannot excuse a failure to exhaust when Congress has required exhaustion by statute

f. Bowen v City of New York (1986)i. Statutes of limitations are tolled until such time as plaintiffs had a

reasonable opportunity to learn the facts concerning the cause of action where the Government’s secretive conduct prevents plaintiffs from knowing of a violation of rights.

g. Darby v. Ciseros (1993)i. APA § 704(c) – Congress wrote to narrow scope of exhaustion

doctrine, so that trumps court/agency common law reasoningii. Final and ripe actions are reviewable unless statute or agency rule

requires resort to intra-agency review (§§ 702, 704)1. Applies only to intra-agency review 2. It is the power of the agency to determine if intra-agency

review is mandatory or optionaliii. If intra-agency review is not required by organic statute or agency

rule, then plaintiff may seek review w/o having exhausted that administrative remedy

iv. Standing1. Sources

a. Art. III – requires injury-in-factb. Statutes – APA and agency organic actsc. Prudential and Judicial considerations

2. Pre-1970: “Legal Wrongs” and “Public Rights”a. Alexander Sprunt & Sons v. United States (1930) (Legal Wrong)

i. Economic interest/advantage was incidental to carrier who were directly affected by statute

ii. Agency hasn’t invaded legal rightiii. Courts wanted plaintiff seeking review to show a legal right or

protected interestb. FCC v. Sanders Bros. (1940) (Public Rights)

i. Petitioner had standing because statute confers standing on anyone who is adversely affected or aggrieved by an FCC order

ii. Private attorney general theory1. Congress can confer broad standing on “any persons

aggrieved” to help insure that agencies comply with the law3. “Zone of Interest” Analysis

a. Assoc. of Data Processing Serv. Orgs, Inc. v. Camp (1970)i. Whether the interest sought to be protected by the petitioner is

arguably within the zone of interests to be protected or regulated by the statute or constitutional guarantee in question

b. Clarke v, Securities Indus. Ass’n (1987)i. ADAPSO test excludes only those with interests so marginally related

to or inconsistent with the purposes implicit in the statute that it cannot reasonably be assumed that Congress intended to permit the suit

ii. Petitioner need not prove specific intent to protect interests at stakec. Air Courier Conference of Am. v. Am. Postal Workers Union (1991)

i. Relevant statutes must have some historical or operational relationship with one another

ii. Clarke has limits when the question is whether a claimant falls within the zone of interests protected or regulated by the relevant statute

d. Nat. Credit Union Admin. v. First Nat. Bank & Trust Co. (1998)i. In discerning interest “arguably to be protected” for standing, courts

look to statutory provision at issue, then inquire whether plaintiff’s interests affected by the agency action in question are among them

ii. Petitioner is arguably in zone if a victory would further its interest4. Associational or Derivative Standing

a. An association has standing if (Hunt v. Wash. Apple Advertising Comm’n, 1977):

i. Any member has standingii. Interests asserted are germane to organization’s purpose

iii. Relief requested does not require participation of individual membersb. Derivative standing criteria:

i. The plaintiff must be injured by the denial of a third party’s rightsii. There must be some obstacles to the third party’s independent

assertion of rightsiii. The plaintiff must be an appropriate representative of the third party’s

interests5. Constitutional Article III test

a. Injury in Fact (economic or otherwise)i. Must be particularized; can’t be general or abstract or shared by many

1. “Concrete and particularized” injuries qualify as injuries in fact, but

2. “Abstract and generalized” injuries do notii. United States v. Richardson (1974)

1. Provision of Constitution provided that the government must provide statements of account that describe how much CIA money is spent for a particular purpose.

2. As a taxpayer, Richardson challenged the CIA’s failure to comply by not providing a “statement of account” to disclose the CIA’s budget.

3. Court – No injury in facta. This was a “generalized grievance” – disabled from

voting with knowledge of incumbent legislators’ budget for CIA – failed to distinguish him from any other citizen objecting to the secrecy.

b. In reality, court did not want to interpret the Constitution to compromise the national security of the country, and used standing as a way around deciding the issue.

iii. Schlessinger v. Reservists Comm. to Stop the War (1974)1. Taxpayers and voters wanted to challenge the constitutional

validity of members of Congress simultaneously holding two positions in government (also getting paid a reserve commission).

2. Court – No injury in fact – No standinga. Again, Court says this injury is “abstract and

generalized”, but really using standing as a way to not decide the issue and not anger members of Congress.

iv. Sierra Club v. Morton (1984)1. Walt Disney wanted to develop Mineral King Valley, and

Sierra Club wanted to stop because could harm the environment.

2. Court – No Standing because no injury in fact.

a. Too “abstract and generalized” to say injury is the connection with the environment.

b. However, explicitly recognized environmental and other aesthetic injuries for standing purposes as long as a person who had used and planned to continue using the parkland is included.

i. Someone who is merely offended in an area he does not use lacks standing.

v. Akins v. FEC (1997)1. Election laws about information of political organization

given to public – Akins wants to designate a group as “political committee” so information is released

2. Courta. Plaintiff suffers an injury in fact when information

which must be publicly disclosed pursuant to a statute, isn’t disclosed

b. Still a concrete and particularized injury to be deprived of information that they are entitled to, even though it is shared by all

3. Rule – An injury suffered by every voter is a judicially cognizable injury if Congress has created a right that applies to every voter and an agency has acted in a way that interferes with that right

vi. Havens Realty Corp. v. Coleman (1982)1. Landlord told a white applicant that he had apartments for

rent. African American “tester” did not intend to rent an apartment, but wanted to test the realtor to see if landlord would rent to him. Landlord said no apartments available.

2. Court – Injury in fact – “Black Tester” has standinga. Congress had given all persons the right to receive

truthful information about apartment availability, without regard to race. When did not receive this, it was “concrete and particularized”.

vii. Lujan v. Defenders of Wildlife (1990)1. Injury in fact requires an invasion of a legally protected

interest which is:a. Concrete and particularizedb. Actual or imminent, not conjectural or hypothetical

viii. National Wildlife Federation v. Lujan (1990)1. Congress passes a statute to have Department of Interior

figure out what legal status and inventory of federal land.2. National Wildlife Federation looks at how DOI is classifying

federal land, does not like it, and goes to court to challenge, especially the land that DOI has classified as available for mining.

3. Submitted an affidavit pursuant to Sierra Club that said member used land “in vicinity of the tract”.

4. Court – Not Ripe for Review, and No Standinga. Not ripe for review because not a final agency

action or decision (challenged the program, not one decision). Therefore, not reviewable at all.

b. No standing because connection between “vicinity of” and the place that is now vulnerable to environmental spoilage is not enough.

i. Establishes the geographic proximity requirement.

ii. Need to find a member who actually uses this tract of land, not just in the vicinity of

this tract of land, for the injury to be “concrete and particularized”, not “abstract and generalized”.

5. Establishes the “geographic proximity” requirementb. Caused by agency action

i. Some nexus between agency action and injuryii. Speculative or indirect casual relationships do not count.

iii. Allen v. Wright (1984)1. It is unconstitutional to provide tax benefits to schools that

discriminate based on race.2. IRS had to figure out which school engaged in racial

discrimination, and petitioner felt the IRS was doing a bad job of enforcing the 14th Amendment.

a. Wanted Court to order the IRS to change their methods of enforcement.

3. Courta. (1) Injury in Fact – Yes

i. Children being deprived of a racially integrated public education.

b. (2) Causation – No Causal relationship – No traceability

i. Needed to prove that IRS policy caused the racially discriminatory policy, and this was not proven.

ii. This is impossible to prove, yet was not proven.

iii. Not traceable to IRS.iv. Simon v. Eastern Kentucky Welfare Rights Organization (1976)

1. IRS use to force hospital emergency rooms to provide service to those who can’t afford it in order to enjoy a tax deduction.

2. People denied emergency room status because could pay. Wanted to deny hospital its tax deduction.

3. Court – No Causation – No Traceabilitya. Did not prove that any particular hospital that

denied treatment did so because of the IRS decision.

i. Not traceable to IRS, therefore no causal relationship. Cannot prove that policy was a function of tax exempt status.

ii. Very tough standard to meet.v. Linda RS v. Richard D (1973)

1. In Texas, deadbeat fathers can be thrown in jail. Linda RS’s baby’s father failed to pay child support, and wanted to get prosecutor to arrest

2. Prosecutor refused to arrest, Linda went to court to force3. Court – No Causation – No Traceability

a. Could not prove that father would have paid rather than gone to jail – may take the jail time instead of paying.

vi. Consequence1. Remember, all these cases decided before Hector v. Chaney,

and all involve a decision about how to enforce the laws.2. Post Hector – presumption of unreviewability applies for

prosecutorial discretiona. Agencies must be able to make their own decisions

regarding the allocation of resources.

b. Justices were unwilling to apply the presumption before Hector, so decided cases by avoiding them through the standing doctrine. Same effect – court cannot review an agency’s exercise of its enforcement discretion unless statute couples the language of command with a justiciable standard.

c. Redressable by the courti. Lujan v. Defenders of Wildlife (1990)

1. Petitioner claiming a procedural injury does not have to show that a procedure would change the outcome, but rather there is a substantive injury at stake.

a. Must show the injury you suffer is most likely (as opposed to speculative) redressable by the Court.

ii. Steel Co. v. Citizens for a Better Environment (1998)1. Citizen suit provision

a. Any citizen can file suit again individual or firm that violates its permits if the citizen first gives the agency notice, and the agency decides not to bring the action itself

b. Can get both injunctive relief and civil penalties, paid to the US Treasury.

2. Toxic chemicals disposed of - no disclosure of what toxic chemicals, rule said must disclose so people know what to prepare for = clear injury in fact

3. No Standing because no redressabilitya. The civil penalties that would paid go to the

treasury, not petitioners thus no redress to injuryi. Does not redress because the individual

obtains no benefit as a result of payment to the government

b. After suit was filed, Steel Co. voluntarily disclosed chemical info

iii. Friends of the Earth v. Laidlaw (2000)1. In Steel Co., the company being sued had already ceased its

illegal action at the time the suit was brought.2. Here, firm continued to engage in illegal discharges when

suit brought, and only ceased illegal activity during the pendency of the suit.

3. Petitioners claimed that they changed behaviors – no longer swam in the river, couldn’t fish anymore, stopped boating, etc. – because of agency action

4. Court finds standinga. Limits Steel Co. to “wholly past” actions – not

when ongoing or chance of reoccurrence (like here)i. If illegal conduct was still going on at the

time the suit was filed, even if ceased during pendency of the suit, court can impose civil penalties.

b. Civil penalties, even if not paid to the citizen, could redress the injury

i. Way to keep companies from repeating bad behavior is to hammer them financially

c. Redressability is up to Congressi. If Congress authorizes a penalty, then

defer, and consider it redressabled. Injury in fact – “Concrete and particularized”

includes a change in behavior based on a

“reasonable fear” that illegal discharges were causing harm

6. For Examplea. Massachusetts v. EPA (2007)

i. Petitioners wanted to force EPA to issue a rule making to limit emissions of carbon dioxide because they allege carbon dioxide is a pollutant, and therefore they must regulate it

1. List of petitioners was 150 people, including States and cities

ii. Massachusetts claimed as its injury in fact that has lost land, and will lose land in the future, due to global warming created by emissions.

iii. Court – 5-4 Standing – Kennedy – because Massachusetts is a petitioner, this is completely different than if it was a private citizen (Defenders of Wildlife standing)

1. Injury in Facta. Massachusetts has a concrete and particularized

injury because State has interest in protecting land which it has sovereignty

b. Think geographic and temporal proximity as well2. Causation

a. Caused by global warming, studies back this up.3. Redressability

a. EPA standards would certainly redress the injuryiv. Dissent

1. Injury in Fact – Nonea. States are no different from private citizens, and

therefore the injury is abstract and generalized.b. Not sure if injury actually exists

2. Causation – Nonea. This is a tiny fraction of global warming, and

therefore the causation of Massachusetts losing land from global warming is too attenuated.

3. Redressability – Nonea. Injury is shared by the many

v. No justice mentioned Laidlawvi. Lower courts interpret Massachusetts v. EPA to mean if you have a

State as a petitioner, you have standing. If you don’t have a state as a petitioner, you do not have standing.

V. Legislative Connectiona. Statutory Vagueness and Its Anecdotes

i. Nondelegation Doctrine1. “All legislative power. . .shall be vested in a Congress” – Art. I

a. All legislative power must be done by Congress. Congress cannot delegate to any other institution, including agencies, the power to make legally binding rules of conduct.

b. Court has gone through three testsi. Factual Predicate

1. Upheld statues as delegating only the power to determine the factual predicates of policies chosen by Congress.

2. Absolutely prohibited the delegation of legislative authority from Congress to the executive branch.

3. Congress may not relinquish any of its power to enact legislation through grants of policy making to administrators.

ii. Filling in the Details1. If Congress makes basic policy decisions, then Congress can

leave to agencies the task of filling in the details.iii. Intelligible Principle

1. Congress must, in the statute, apply an intelligible principle that channelizes the agencies policy making discretion.

a. This includes the statute saying “agency should act in the public interest”.

b. Seems to read the non-delegation doctrine out of the Constitution.

2. Congress can’t feasibly prescribe in detail the rules governing every facet of federally regulated activity.

c. Rule – Only if there is an absence of standards for the guidance of the Administrator’s action, so that it would be impossible to ascertain whether the will of Congress has been obeyed, is it justified to hold a statute unconstitutional due to the non-delegation doctrine.

2. Panama Refining Co. Ryan and ALA Schecter Poultry v. United States (1935)a. Holds Nat’l Indust. Recovery Act unconstitutional

i. NIRA authorized creation of private boards of producers to determine the permissible output and pricing of every good sold in US.

ii. No standards guiding the executive branch to apply these statutes. Broadly stated set of statutory purposes was not sufficient to save the statute from invalidation.

b. Many commentators, including Breyer, now emphasize the fact that power was delegated to private parties with clear conflicts of interest

3. Amalgamated Meatcutters v. Connally (DC Dist. Ct 1971)a. Economic Stabilization Act – Congress confers to President power to control

all wages and prices for all US economy – President may use standard for equity (or may not…)

i. No express standards, just give all discretion to Presidentb. Following decisional factors influenced the court to uphold law:

i. Statute is related to foreign relations;ii. Pres. can use WWII standards;

iii. Statute implicitly adopts fair and equitable standard;iv. Agency can announce standards in rules that courts can then apply;v. Statute has procedural safeguards;

vi. Statute allows judicial review;vii. Statute has limited duration

c. President can’t use gross inequity2. Sunray Drive-in Dairy v. Oregon LCC (1973)

a. Oregon legislature passes statute to create liquor licensing board, and gives standard: issue license only if required for public convenience and necessity

i. Not needed to write an opinion about it so it’s not known why decisions are made. Sunray denied license w/o hearing

b. State case so able to treat differently and get the board’s decision makers on the stand

i. All decision makers gave different, inconsistent reasons for denyingc. No violation of non-delegation doctrine, but when very broad delegation,

agency must issue rules to announce standards that you will apply in each case.

i. Agencies must develop criteria for making judgments, but delegation of authority is upheld. Still, agencies must set standards

d. Court forces the agency to create standardsi. Can’t happen in Federal system under Chanery (agencies have

discretion to use adjudication instead rulemaking) (Bell Aerospace)3. Chevron

a. When Congress has not made a policy decision, but rather enacted a statute that requires another branch to make the decision, would much rather have executive agencies making that decision than the courts.

i. Political accountability.

b. Where Congress has not made a policy decision (has not spoken directly to the issue at hand), as long as agency interpretation is reasonable (State Farm test), agency decision will be upheld.

c. Implicitly recognizes that Congress can delegate to a politically accountable agency

4. Whitman v. Am. Trucking Assn, Inc. (2001)a. Very common question in agency decision making – a substance is known in

high quantity to have terrible effects, so how should they regulate it.b. § 109 of Clean Air Act – EPA required to set air quality standards that

“adequately protect public health”. In addition, statute rules out setting standards based on a cost-benefit analysis because statute explicitly says that you must only look at health effects.

i. Must keep as low as necessary to protect public health. c. EPA set a standard for this pollutant in the middle of the cost-benefit analysis

of the standard (claiming they did not engage in cost-benefit analysis) without giving reasons, and ATA challenged.

d. Supreme Court upholds EPA opinioni. Reaffirmed the intelligible principle standard, holding that the

statute’s directive to EPA to apply standards that are “requisite to protect the public health with an adequate margin of safety” is an intelligible principle.

ii. Legislative Veto1. Types of Legislative Vetoes

a. Two House Veto i. If after an agency takes an action, and both houses enact disapproval,

then the action is void and cannot be reenacted.b. One House Veto

i. After an agency takes an action, either house can pass a resolution of disapproval, then the action cannot take effect.

2. INS v. Chada – 1983a. Immigrants can stay, but Congress has X days to veto decision of agency to let

immigrant stay – Congress vetoed hereb. Court

i. Legislative Veto Violates Bicameralism and Presentment1. Only way Congress can bind the people is through

bicameralism AND presentment – so all legislative vetos are out

5. Alaska Airlines v. Brock (1987)a. Entire statute is not unconstitutional, just the legislative veto provision.

6. Congressional Review Act of 1996a. Provides generic procedures for congressional review of agency regulations.

Under the Act, all federal agencies, including independent agencies, must submit each final and interim rule for analysis by the GAO, and review by Congress before scheduled to take effect.

b. Prohibits an agency from promulgating in substantially the same form a rule that has been disapproved unless specifically authorized by a law enacted after the adoption of the joint resolution.

i. To date, Congress has revoked just one rule under the CRA.iii. Delegation of Adjudicatory Authority

1. History of Delegations of Adjudicatory Authoritya. Crowell v. Benson (1932)

i. Act assigned adjudication of worker’s compensation claims for covered workers to a non-article III commission.

ii. Commission made an award to an employee, the employer sued, claiming that assignment of adjudicatory power to Commission was unconstitutional.

iii. Court – Upheld commission’s authority to adjudicate the claim.iv. Distinction between Public Rights and Private Rights

1. Public Rights – controversies between a private party and the government over matters such as government benefits, taxation, and immigration.

a. May be assigned to non-Article III tribunals.2. Private Rights – Disputes between two private parties in

which government’s role is primarily adjudicatory.a. Cannot be assigned to agencies, but plenary review

of agency action is sufficient judicial involvement.b. Analogizes agency to role of a special masterc. However, limits – Issues relating to jurisdiction of

agency and issues of Constitutionality must be adjudicated de novo in federal courts.

2. Modern Delegation of Adjudicatory Authority Testa. Northern Pipeline Construction Company v. Marathon Pipe Line Co. (1982)

i. Provision of Bankruptcy Act that gave courts created under Article I (Bankruptcy Courts) jurisdiction over common-law claims to which debtor was a party.

ii. This included interpretations of a contract.iii. Court Split – Plurality Opinion

1. Provision of Act unconstitutional delegation of adjudicatory authority under Article III because this was adjudication of private rights, and only Article III courts can adjudicate private law disputes.

a. Private right disputes includei. Dispute between private individuals

ii. Dispute involving common law principlesiii. Dispute involving claim with common law

antecedentb. Consequence

i. All economic claims have common law antecedents, as do environmental claims (nuisance). Would court extend this holding to every agency adjudication?

3. The Balancing Test to Determine Constitutionality of Agency Adjudicationa. Thomas v. Union Carbide (1985)

i. Statute assigns class of takings disputes to agency supervised binding arbitration court

ii. No judicial review or review by the agencyiii. Court – 5 Justice Majority - Upholds assignment

1. Narrow class of disputes, and there was a good justification for the formation of the court.

2. Arbitrator’s narrow jurisdiction did not threaten the judiciary’s Article III powers, and that limited judicial review was available to ensure arbitrators did not exceed their authority.

b. Commodity Futures Trading Commission v. Schor i. Statute assigned adjudication of certain common-law claims to CFTC

ii. Customers of commodities brokers can seek remedies for brokers’ violations in the CFTC – an independent agency to adjudicate these claims. In addition, counterclaims can be heard, including state law contract claims.

iii. Issue is whether CFTC can have jurisdiction over the counterclaims, or if jurisdiction violated Article III and Northern Pipeline.

iv. Court – 7 Justice majority upholds CFTC’s assertion of power to adjudicate common law counterclaims

v. Multi-Factor Balancing Test1. Narrow class of disputes, good pragmatic justification, and

defendant implicitly consented.

c. Test – Weigh the threat to Article III values against concerns that led to the assignment of adjudicatory authority to the agency.

i. Primary question – does assignment of jurisdiction threaten the institutional integrity of the federal courts?

ii. Factors1. Extent to which the essential attributes of judicial power are

reserved for Article III courts2. Extent to which non-Article III forum exercises the range of

jurisdiction and powers normally vested only in Article III courts.

3. Origins and importance of the right to be adjudicated4. Concerns that drove Congress to depart from requirements

of Article III.4. Granfinanciera v. Nordberg (1987)

a. Congress amended Bankruptcy Act by giving less power to Article I judges and greater review to Article III courts to review those court

b. However, said that the Article I courts do not have to use juriesc. Court – Violation of 7th Amendment

i. When there is a preexisting common law right (private right), Congress cannot reallocate that class of dispute to non-jury tribunal

5. Consequencesa. Granfinanceira and Union Carbide/Schor are completely inconsistent.b. Must look to whether Congress provides jury trial for allocation of

adjudication to agencyb. Statutory Precision and Its Consequences

i. Irrebuttable Presumptions Doctrine (now abandoned)1. USDA v. Murray (1972)

a. Irrebuttable presumption must be “necessary or universally true” to pass muster

b. Where the private interests affected are very important and the governmental interest can be promoted without much difficulty by a well-designed hearing procedure, the Due Process Clause requires the Government to act on an individualized basis, with general propositions serving only as rebuttable presumptions or other burden-shifting devices

ii. Explicit Statutory Instructions – Delany Clause1. Extremely specific statutory command to the agency that if any substance is found in

the good to cause cancer in man or animals, the good cannot be approved.2. Today we know that 50% of all substances have been shown to be carcinogenic in

animals given the typical method of testing.a. In addition, Delaney clauses can be utilized unfairly – sales of sugar dropping

rapidly because of less-fattening additives, so hire a team of researches to force-feed mice the equivalent of 800 diet sodas a day until some carcinogenic signs appear.

3. FDA exempted substances that posed a de minimis risk of cancer.4. Court – Congress gave explicit command in the Delaney Clause, and therefore it must

be followed.5. Public Citizen v. Young (DC Cir. 1987)

a. Public Citizen sued the EPA in an attempt to require the removal of almost every pesticide from the market because of cancer risks.

b. Court – Delaney Clause does not contain an implicit de minimis exception.c. Secretary of EPA realized that application of Delaney Clause could have done

much more harm than good, so kept the Clause but through amendments, made it so the Clause could not be applied.

i. Have a tendency to react in emotional ways to headlines, and not do the work necessary to figure what the issue is really about.

6. Consequencesa. Congress has seen the possible dangers of regulating too restrictively, and

usually will stay away from Delaney Clauses in application.

i. Only 4 total Delaney Clauses – Cancer Causing1. 3 in the FDCA applicable to any detectable residue of drugs2. 1 in FIFRA for all pesticides

c. Pervasive Techniques of Legislative Controli. Statutory Control

1. Administrative Procedure Act (APA)a. Purports to establish uniform procedures for certain formal actions

(rulemaking and adjudication).b. Goal is to subject all federal administrators to a common set of minimum

procedural standards and to assure that those subject to regulation have an opportunity for court review of agency compliance.

2. Freedom of Information Act (FOIA)a. Agency must provide any information in their records within 20 days to a

requesting member of the public, unless falls within an exception. b. Imposes strong presumption in favor of disclosure.

3. Government in the Sunshine Act (Sunshine Act)a. Obligates agencies to provide notice of meetings at which agency business is

to be conducted and to meet in public unless the members, by majority vote, decide that the subject matter falls within one of nine exemptions

b. Applied to agencies headed by collegial bodies, such as FTC, SEC, CPSC4. National Environmental Policy Act (NEPA)

a. National concern for the environment and sets forth procedure to assure that agencies consider environmental values in the formulation of policy.

5. Data Quality Act (DQA)a. Make sure that agencies do not rely on bad or minimal data, and provides a

means by which a party can challenge the accuracy and relevance of information.

6. Civil Service Act7. Allocation of litigation authority between DOJ and agencies

a. Half of agencies can sue on their own behalf, and half must rely on US Attorneys.

ii. Legislative Oversight, Casework, and Influence1. Confirmation Process

a. Either you agree to do “x” as the Secretary, or you are not getting confirmed.2. Appropriations Process

a. Congress appropriates money, and can stipulate that “no funds be used for the Endangered Species Act”.

3. Oversight Hearings4. Casework

a. Congress can help individual constituents in dealing with their agencies – help SSA members get benefits, etc.

VI. Executive Supervision of Administrative Actiona. Constitutional Clauses

i. Vesting Clause1. Executive power is vested in the chief executive.

ii. Opinion in Writing1. President can require any officer of the United States to provide him an opinion in

writing – implying that officers work for the President in some way.iii. Take Care Clause

1. President shall take care the laws are faithfully enforced.iv. Commander in Chiefv. Unitary Executive

1. This is actually a theory, since there is no provision in the Constitution. No definitive answer here from Supreme Court.

a. Broad Theory – John Yui. Torture Memos – As long as President does not produce death or

permanent injury to a vital organ, the President can authorize anyone to do anything in his capacity, including ignoring treaty obligations.

b. Strong Version – Steve Calibresii. Congress can impose substantive and procedural restraints. However,

cannot stop the President from getting rid of any executive branch subordinate. In addition, President can veto EPA decision, even if Congress conferred decision to administrator.

c. Middle View – Piercei. In some circumstances, “for cause” limits on Presidents removal

power is permissible.d. Narrow View

i. Congress can restrict President’s removal power.vi. Appointments Clause

1. Formally confers on the President exclusive power to nominate someone to be an officer of the United States. Yet Congress can provide a means through which the Senate can reject the nominee.

b. President’s Power to Appoint and Remove Administratorsi. Controlling Congressional Attempts to Appoint and Remove Administrators

1. Buckley v. Valeo (1976)a. McCain-Feingold Bill imposed restrictions on ability of candidates for

political office to collect money.b. Federal Elections Commission was formed to enforce – Composition was six

members, serving staggered terms.i. 2 members each chosen by the President, Senate, and House

c. Court/Rule – Violates Appointment Clause because officers, whether principal officers or inferior officers, can only be appointed by the President. Senate’s role is to confirm, not to appoint.

d. Inferior officers can be appointed by Pres., Dept head, or court of lawi. Here, four members were chosen by Congress, which is a violation

because the Appointments Clause does not confer any appointment power on Congress.

ii. Civil Rights Commission can have officers appointed by Congress, but that is because of the nature of the powers of the Commission.

1. Civil Rights Commission simply reports to Congress, and cannot exercise any of its own power.

2. FEC, however, engages in conduct that can only be exercised by officers

a. Power to enforce lawsb. Power to issue a final decision of adjudicationc. Power to issue legislative rules

i. Legally binding rule of conduct.e. Rule - If individuals are performing roles that officers of the United States

perform, must be appointed by the President and confirmed by the Senate.2. Freytag v. Commissioner of IRS

a. Special Tax Judge is appointed by Chief Judge of the Tax Court, and given fair amount of power.

i. Initial decisions subject to deferential reviewii. Participates in panel decisions

iii. Three Possibilities1. Employee – Appointments Clause inapplicable2. Principal Officer –Appointed only by President3. Inferior Officer – Appointed only by President

b. Court – Constitutional, even though “officers”i. Majority – 5 Justices

1. Tax court is not a department because not a cabinet agency, therefore not part of the executive branch.

ii. Concurrence – 4 Justice1. Tax court is a department, even though not a cabinet agency

3. Landry v. FDIC a. Are ALJ’s inferior officers or employees?

b. Court – 2 Justice Majorityi. Administrative Law Judges are employees, not inferior officers,

because the agency can ignore the ALJ’s findings and conclusions pursuant to APA § 557(b)

1. No power to make final, binding decisions. Analogous to a special master who presides over a trial simply to gather a record.

c. Consequencei. Any change in the law that increased the legal effect of ALJ decisions

would make ALJs inferior officers, and would therefore force changes in the manner in which they are selected and removed

4. Bowsher v. Synar (1986)a. Nixon refused to spend Congress’ appropriations in the budget, so Congress

responded by enacting a statute that required the President to spend all appropriations

b. President and Congress disagreed over who should make the budget projections that would bind the President

c. Statute required the CBO and the OMB to make projections, and then send them to the Comptroller General, who would make the final projection that binds the President

d. Court finds this unconstitutional as it violates the separation of powers.e. Majority – 6 Justices

i. CG is an agent of Congress because Congress can remove CGii. Therefore, CG cannot determine spending levels because that is an

executive decision. This is retaining control over the execution of the Act – intruding into the executive function.

1. Yet this seems artificial – spending is different than appropriating?

f. Concurrence – 2 Justicesi. CG cannot determine spending levels because Congress can only act

in a way that binds the President – through bicameralism and presentment.

1. INS v. Chadha argument – without presentment subject to Presidential veto, Congress cannot take an action. Power to legislate, and can only be exercised with (1) same enactment by both houses of Congress, (2) subject to veto, (3) subject to overriding veto.

g. Dissenti. Comptroller General is not an agent of Congress

1. Nominated by the President, subject to Senate confirmation. In addition, can only be removed through process involving bicameralism and presentment. Therefore, is an officer of the United States

ii. Determining spending is not policy making.ii. Congress’ Power to Regulate the President’s Relationship with Administrators

1. What makes an agency independent?a. Existence of a “for cause” limitation on the President’s power to remove the

agency’s heads is the only distinction between independent and executive agencies

b. Independent agency run by not 1 head but collegial body of commissionersi. FTC independent b/c 5 commissioners serving set terms and only can

be removed ‘for cause’ii. Rare

2. Myers v. United States (1926)a. Congress enacted statute that President can’t remove Postmaster without

consent of Senate. President fired Postmaster anyway.i. Congress can’t interfere or restrict in any manner the President’s

power to remove executive officers at will (unlimited discretion)

b. Modern meaning: Congress can take action that has formal binding effect only by following procedures set forth in Constitution for enactment of legislation –bicameralism and presentment – and can’t circumvent this by giving power to self – can’t give self role in executive branch (veto power for self)

3. Humphrey’s Executor (1935)a. President removes head of FTC – no, can only remove “for good cause”b. Distinguished Myer because here not just purely an executive agency, but

independent (quasi-judicial and quasi-legislative) i. Agency charged with no policy making, but charged with enforcing

policy of the lawc. Congress can limit President power to “for good cause” when not purely

executive agency, but agency that works predominantly for Congressiii. Independent Agencies

1. US v. Weiner (1958)a. Congress created War Claims Tribunal to resolve WWII claims “according to

law.” President nominated members subject to Senate confirmation. Statute was silent re term of office and removal

i. Resolving claims in accordance with the law is adjudicatory (judicial)1. Not a political position, so not purely executive

b. Court embraces functional approach to determine whether an agency was “independent” and its members subject to plenary removal

i. Congress’ use of the label “independent” presumably cannot be conclusive as to all questions regarding the President’s relationship with that agency

c. Court draws inference that Congress intended to limit President’s removal power to “for good cause” as function was judicial

d. Wiener may still have meaning in some unusual contexts, but courts no longer assume that Congress intended to limit removal power when statute is silent on issue

2. Morrison v. Olson (1988)a. Whether removal restrictions impede the President’s ability to Perform his

Constitutional Duty – impermissible burden testb. Factors determining whether officer is “inferior” or “principal”

i. Subject to removal by higher Executive Branch official1. Inferior to AG because must comply with DOJ policies and

can be fired for cause;ii. Limited duration/tenure;

iii. Limited scope of duties;1. No power to make policy

iv. Limited jurisdictionc. Congress can place power to appoint Executive Branch employee outside of

the Executive Branch so long as function performed by officer is similar to that of the branch appointing (“congruity”)

i. IC is appointed by special 3-judge court and can be removed by AG only for cause

d. Congress can vest miscellaneous powers (executive and administrative) to appointing officials so long as power is incidental to appointment

i. In this case, Congress vested power to define scope of and supervise IC

1. Ministerial and passivee. Majority (8 Justices) – appointment by judiciary does not interfere with

President’s power to “take care that the laws be faithfully executed”i. Plenary control of independent counsel is not central to President’s

ability to control executive branchii. No attempt at congressional aggrandizement

1. Congress not giving itself power, just taking from Presidentiii. IC has no policy-making poweriv. President retains some control over independent counsel

1. IC at will of AG, who is at will of President2. DOJ policies in President’s control

a. Politics keep President from exercising …f. Dissent – Scalia

i. Prosecution has “always and everywhere” been an executive functionii. An alternative model of government

1. How address government corruption… uses Watergate example of why don’t need one – system works as is

2. Many think he’s right – best point in opinion – why no longer have an IC statute

iii. Court eliminated the prior fuzzy limit on congressional power without announcing a new limit

c. Executive Authority to Direct Agency Policyi. The degree in which the President may influence or even dictate the decisions made pursuant to

authority delegated by statute to others.ii. Article II places the President at the apex of the executive branch, and therefore, the

administrative hierarchy.1. Therefore, the President should be able to exert a great deal of control over

administrative officials and agencies.2. Yet Congress attempts to insulate the President at times form control.

iii. Youngstown Sheet & Tube Co. v. Sawyer (1952)1. Truman took possession of the Steel Mills on the brink of the Korean War after steel

workers went on strike.2. Took possession by issuing an executive order.3. Court hold Executive Order unconstitutional4. Jackson Concurrence – Three categories of Presidential powers

a. Power delegated by Congress to the Presidenti. Here, the President’s power is at its utmost, with the only limits

coming from the Bill of Rights.b. President exercises power in a statutory vacuum, his power is uncertain –

President acts with neither support nor disapproval from Congress.i. In re Neagle

1. Body guard, appointed by the President to protect Justice Fields, kills an innocent man and is arrested. Claims executive action

2. Court – in the absence of statutory powers, the President has residual powers

c. President acts contrary to the will of Congress, his power is “most dubious”i. Here is where this case falls. Congress specifically legislated in this

area, and forbids actioniv. Presidential Control Over Agency Action

1. Most Presidents complain about the inadequacy of controlling and coordinating agencies, and each has moved further in exercising control.

a. However, remember that most control is behind the scenes ad hoc (for the special purpose) with low visibility.

2. Reagan Administration Executive Order 12,291a. Applies only to major rules issued by Executive Branch agencies.

i. Rules not adjudications because President does not have the power to trump anything Court or Congress says. President has power only as something that is not inconsistent with statute.

1. All start with “to the extent consistent with law” – Agency must comply with anything said in executive order.

b. Scope – Not to adjudicationsi. Resource limitations – no way can look at everything agencies do.

Only rules – purely pragmatic.ii. Adjudication that is rarely if ever in the rule-making process

1. Requirement of Due Process and Neutral Decision maker2. This would raise serious due process questions.

c. Executive Branch Agenciesi. Have the power to direct independent agencies to take actions in the

context of rule and policy and making, but not good politically.d. Content – OMB can require an agency to delay publication of a major rule.

i. Before Agency sends rule to have it put in to the federal register, must submit it to OMB, and OMB can delay publication of the rule

ii. Conflict with 706(1) – Cannot delay for an unreasonable amount of time

iii. Conflict with statutory deadline – must issue the rule by certain time – President can’t trump a statutory deadline

e. Basically, OMB can require an agency to delay promulgation of a rule. When promulgating the rule, must first send it to OIRA, and OIRA reviews the rule.

i. Chevron dispute between OIRA and the agency.ii. President will usually win this dispute.

f. This process turned out to be not very effective because OMB and OIRA reviewed the major rule way too late in the game to make substantive changed.

i. to interpretive rules or policy statements – no binding effect3. Requirements under EO 12,292 / 12,866 / 13,258

a. Agency must use cost-benefit analysis as the basis for deciding which actions to take (must be most cost-effective)

i. President can’t always enforce this1. Not where Congressional statute says agency must rely on

something elsea. Delaney Clause, etc

2. EO says “to the extent consistent w/ the law”a. Thus , statutes can override it

3. Chevron supports the requirement of cost-benefit analysisa. Strengthened power of President vis a vis Congress

and Court, as well as vis a vis agenciesb. Agency must consult w/ OMB before issuing a major rule

i. Send over cost-benefit analysis, proposed rule and statement of basis and purpose

ii. OMB can require (once agency consults with it):1. Deferral of issuance of rule

a. OMB’s strongest powerb. Limited where Congress adds timeline to statute

i. Where Congressional and Executive timelines conflict, Congressional ones trump because legislative process is for Congress and EO says “to extent consistent with law”

2. Consultation with other agencies3. Consideration of additional data

a. This delays rulemakingb. Have to issue supplemental issuance of notice for

comments on the new data4. Executive Order 12,498

a. Requires every agency to come out with annual regulatory agenda describing every major initiative for the year

i. Includes more the just rules1. Focuses on the pre-rulemaking stuff

a. Agencies need lots of information before can even issue a notice of proposed rulemaking

ii. Tells people what it is planning to doiii. Includes its calendar

1. When likely to issue proposed or final ruleb. EO 12,498 is very burdensome on certain agencies (EPA)c. Effects

i. Drafters thought it would help OIRA focus on important issues before it was too late

1. In actuality, it caused way too much work, too early in process, before any kinks are worked out

ii. Unintended beneficial effects1. Members of the public who are affected by agency action

(lawyers, public interest groups, etc.) find out useful infoa. Helps them know what they need to focus on when

lobbying, etc.2. People who run agencies now know what’s going on in the

agencyv. Presidential Oversight of Regulatory Policy

1. Reagan EO 12,291a. Applies only to major rules issued by Executive Branch agencies.b. Applies only to the extent consistent with law.c. Authorizes OMB to require agency to delay publication.d. Requires CBA and rules consistent with CBAe. Authorizes OMB to require consultation with other agencies.f. Authorizes OMB to require consideration of additional data

2. Reagan Executive Order 12,498a. Requires Executive Branch agencies to issue periodic regulatory agendas with

information regarding pending and planned rulemakings.b. In addition, it puts the Vice President as head of the council to resolve disputes

between agencies and OIRA.3. Clinton Executive Order 12,866

a. Expands EO 12,498 requirements to apply to independent agencies as well.b. However, adds transparency requirements regarding status and

communications, as well as time limits.c. Clinton begins personally taking credit for the promulgation of rules.

4. Bush-43, Executive Order 12,866a. One change – Vice President apparently no longer has a role.b. Continues the Clinton practice of directing agencies to start rulemakings, but

adds directives to rescind or amend the rules.5. Bush-43, Executive Order 12,422

a. Requires each agency to designate in coordination with OMB a Regulatory Policy Officer, who is a political appointee and need not be an agency head.

b. This RPA decides whether agency can begin rulemaking or issue the rule.c. In addition, this includes major guidance documents