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THE CONSTITUTIONAL POSITION OF ADMINISTRATIVE AGENCIES a. What Is An Agency? What Is Administrative Law? Most broadly defined as legal control of government. Most narrowly it consists of those legal principles that define the authority and structure of administrative agencies, specify the procedural formalities that agencies use, determine the validity of administrative decisions, and outline the role of reviewing courts and other organs of government in their relation to administrative agencies. o Three Bodies of Administrative Law: (1) constitutional law, (2) statutory law, including Administrative Procedure act (APA), and (3) federal common law embodied in judicial decisions that don’t have clear constitutional or statutory source. What is An Agency? Agency means each authority of the US government, excluding the three branches of government (congress, judiciary, executive). Examples FTC, EPA, FCC, Library of Congress, Secret Service, PTO. Any government power that’s not one of the three branches of government is an agency. o APA § 551(1) “Agency means each authority of the Government of the US, whether or not it is within or subject to review by another agency, but does not include (A) congress, or (B) the courts of the US.” • APA says any kind of authority except congress and the courts. It doesn’t except the president. Agency’s Connection To Three Branches of Government Where do agencies fit in to this structure? o Article 1 “All Legislative Powers shall be vested in Congress, which shall consist of a Senate and House of Representatives” o Article 2 “ Executive Power shall be vested in a President” o Article 3 “Judicial Power shall be vested in one Supreme Court, and such inferior courts as Congress may from time to time ordain and establish.” Was It Framer’s Intent To Give Legislative, Executive and Judicial Power To Create Agencies? o No - Legislative + Executive Have No Power To Create Agencies Alito argues that Legislative + Executive Branches Don’t Have Power To Create Inferior Tribunals (Agencies) because if framers intended to allow them to create agencies, then would have explicitly included it in text the power to create subordinate bodies as it did with for judicial branch in article 3. o Yes – while constitution doesn’t spell out that the branches can create agencies, there is assumption for legislative and executives that they can. It is up to congress to create agencies for judiciary, judiciary doesn’t have power. constitution doesn’t forbid creation of agencies • Article 1 - Necessary + Proper Clause Article 1, Section 8, Clause 18 "The Congress shall have Power - To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof." Contemplates congress having subordinates that are actually in branch themselves. For example congress can make law saying we’re going to make agencies because contemplates congress making laws providing for themselves support personnel. • Article 2 – Section 2 “The President may require the Opinion, in writing, of the principal Officer in each of the executive Departments, upon any Subject relating to the Duties of their respective Offices” o Clearly there is assumption that executive will need executive departments to get things done. Also has procedure for confirming appointments of inferior officers. Also take care clause “he shall take Care that the Laws be faithfully 1
Administrative Law - Bierschbach
executed” is interpreted to mean he takes care by appointing agencies to execute law. • What Branch Does Agency Fall UnderWhich branch are agencies under? SEC has office of judges . . . where do they fit in. agencies do bunch of different things not clear where fit in constitutional structure. All we know is that not one of three branches of government.
Boyce Motor Lines v. US (1952) • Facts Interstate Commerce Commission (ICC) promulgates regulation that requires drivers of vehicles containing hazardous materials to “avoid, so far as practicable, and where feasible, by prearrangement of routes, driving into or through congested thoroughfares where crowds are assembled tunnels and dangerous crossings.” D in trucking business and drove through Holland tunnel with hazmats and truck exploded killing people. Charged criminally for violating ICC regulation. • Who Gave ICC Power to Promulgate This Law? Congress! ICC was delegated this power by Congress – Congress passed statute that says “ICC shall formulate regulations for safe transportation.” Usually agencies get their authority from congress through the agency’s organic/enabling statute (statute that creates the agency). ICC Regulation Vague Defendant argues that ICC regulation is overly vague and does not provide sufficient notice to D. here the congressional delegation was constitutional, but the ICC regulation was unconstitutionally vague. o Majority Can’t knowingly violate ICC statute because no way of knowing if conduct violates vague statute. o Dissent When congress vests ICC power to define unlawful conduct, agency must do so with precision. Here ICC failed to identify routes over which transportation of dangerous commodities is unlawful. Laws Which Constrain Agencies 1. Constitution Agency must promulgate regulations that give fair warning to put people on notice of law. 2. Organic Statute Agency can’t exceed power congress delegated to them in enabling statute that created the agency. 3. Federal Courts Judge made administrative common law. 4. Agency Regulations Each agency has their own rules and regulations for how standard of conduct and procedures for making laws. 5. Executive Order president can issue executive order telling agency what president wants them to do. President can say EPA in deciding rules to regulate environment must use cost benefit analysis. b. Relation of Agencies To Congress i. The Rise And Fall of The Nondelegation Doctrine 1. Separation of Powers And Checks and Balances • Separation of Powers + AgenciesSeparation of Powers doctrine insists that infringements on personal liberty be imposed only by rules of general application, promulgated by elected representatives, interpreted by independent jurists, and enforced by yet another branch of government. The creation of administrative agencies having each of the three types of powers that the constitution disperses among coordinate branches threatens the doctrine of separation of powers. Purpose of Nondelegation Doctrine – congress can’t delegate power given to it by the states/citizens (1) Accountability It ensures that significant policy decisions are made by the legislature, 2
Administrative Law - Bierschbach
the branch most responsive to the democratic will (2) Guidance For Agencies it assures that the agency receiving new jurisdiction will have an “intelligible principle” to guide its exercise (3) Judicial Review it allows courts reviewing agency action to test it against ascertainable standards. • Delegation + Congress’s Accountability When congress delegates to agencies there is no accountability – because congress is not accountable for legislation that that agency passes. Why we like accountability? A lot of legislation imposes burdens on our liberties and we want elected officials who have our interests in mind to make decisions on those sensitive morality issues. Also when congress legislates, they get more input because legislature from around the company rather than an agency in DC – which think increases the quality of the law. o HYPO Accountability Problem Congress thinks in public interest for RR to be affordable, but knows RR will go out of business if force them to lower their rates. So congress delegates power to regulate RR rates to agency which raises RR rates. Congress says to constituents I can’t believe agency did this, we didn’t do it, we don’t control them. If allow congress to delegate too much then will lose important check in checks and balances system. Why Congress Delegates? (1) Expertise Congress often delegates power to regulate rates to agencies because they are not economists and specialized commission has more expertise in a certain field. (2) Time congress doesn’t have the time to regulate this. (3) Continuity congressman change by the year, but more consistency if delegate to agency that is always there. (4) Independence agency will gather all the information and balance between competing priorities. Congress is tied to their constituents. Congress will delegate things away to agencies that want to insulate from lobbying. 2. Agency’s Power to Legislate • Non-Delegation Doctrine Congress Cannot Delegate Legislative Power Congress can’t delegate its legislative power and if it does then the legislation is struck down as unconstitutional. Constitution says “all legislative power shall be vested in congress,” so congress can’t delegate that power. Different View of Nondelegation Doctrine 1. Congress Can’t Transfer Any Legislative Powers The vesting of all legislative powers in congress is not only an initial allocation, but also a final one. Congress cannot transfer its legislative powers to any other institution 2. Congress Cannot Delegate Broad or Discretionary PowerWhen congress enacts a statute granting authority to the executive the statute amounts to or effects a delegation of legislative power if the scope of the grant is too broad or if it vests too much discretion in the executive. 3. No Delegation It Is ExerciseWhen congress enacts statute granting authority to executive there is no “delegation” of legislative power no matter how broad the grant of how much discretion is confers. Rather than delegating legislative power, congress has exercised it by enacting the relevant statute. Pre 1935 Supreme Court Cases prior to 1935 the supreme court upheld a number of delegations of legislative power under a variety of different theories. o Not Too Vague - The Brig Aurora – Court upheld Congress’s delegation to the President of the authority to lift an embargo of European trade when he found that the subjects of the embargo had “ceased to violate the neutral commerce of the US.” o President Factual Determination - Field v Clark (1892) statute giving president power to impose retaliatory tariffs when deems foreign tariff unreasonable or unequal. Court held president not given legislative authority because his powers were limited to determining a 3
Administrative Law - Bierschbach
and evaluating what’s going on in industry at time to see what’s unfair. such legislative action is not forbidden delegation. o War Contract – Lichter v US (1948) upheld constitutionality of Renegotiation Act which delegated to administrator power to recover excessive profits on renegotiation of war contracts.US v Grimaud (1911) statute gives secretary of agriculture authority to make provisions for protection against destruction upon public forests. In Schechter Poultry president regulating procedures for fair competition and relying on private parties to come up with standards. or where president was obligated to make specific finding prior to action. o Schechter Poultry v US (1935) NIRA delegated to president authority to approve codes of fair competition upon application by trade groups.” • 1935 Panama Refining and Schechter only in Panama and Schechter has the supreme court concluded that delegations have been unconstitutional. stabilize prices etc. Post Schechter Delegation – Wartime Delegations o Price Controls – Yakus v US (1944) Emergency Price Control Act gave administrator power to establish maximum prices on commodities when prices rose or to eliminate profiteering.Hampton v US (1928) statute gave president power to revise tariff when he determined necessary to equalize costs of production in US and competing country. Unconstitutional Delegation Congress didn’t establish standards to govern president’s action. • Procedural Safeguards in Panama Refining president regulating unfair competition and would have to engage in investigating. Secretary can only regulate if destruction of forests so that is constraint. Court justified “if congress shall lay down by legislative act an intelligible principle to which the person or body authorized to take action is directed to conform. o Panama Refining v Ryan (1935) NIRA (national industry recovery act) enabled president to prohibit transportation of petroleum in amount exceeding amount authorized by state.Bierschbach . collecting evidence.” Authority delegated wasn’t confined to specified acts or standards. if just vetoing that’s ok. President just deciding fact – whether foreign tariff is reasonable. Nevertheless. courts and public to ascertain whether administrator in fixing prices complied with those standards. o Cardozo Cardozo dissents saying no unconstitutional delegation in Panama but yes in Schechter because delegation was “unconfined and vagrant. • Delegation To Private Parties delegation here to private parties was unconstitutional because affirmatively coming up with the regulation. the nondelegation doctrine has never been overruled. Court upheld statute saying didn’t delegate legislative authority but merely gave secretary power to fill up the details. Delegation only kicks in when have to fight inflation. only unconstitutional if congress 4 • • Administrative Law . o General Rule of Panama and Schechtera delegation of legislative authority that is found to be wholly without standards specifying conditions pursuant to which it is to be exercised is unconstitutional. The Modern Doctrine Court very liberal in modern era. Legislature seemed to create a roving commission to inquire into evils and upon discovery correct them. President held unlimited authority to implement the prohibition because didn’t provide standard governing when the president was to exercise the authorized power. Intelligible Principle .o o fact upon which the tariff was contingent. President approved life poultry code. (broad discretion because based on president’s opinion) Fill In The Details . Court ruled standards expressed in EPC with statement of considerations required to be made by administrator were sufficiently definite and precise to enable congress. President could impose fine or imprisonment. Court held not necessary for congress to supply with specific formula because field involves flexibility. Unconstitutional Delegation Court says there were no adequate definitions on NIRA of subjects to which exercise of authority is to be addressed just says “Codes of Fair Competition” also no procedural safeguards for adoption.
Dealing With Delegations 1. 1. so power is limited. Breadth? All they are authorized to do is grant licenses. o Kent v. The lawmaking function of the sentencing commission is completely divorced from any responsibility for execution of the law or adjudication of private rights under the law. rents. Why Delegation Constitutional (1) judicial review – court not worried about president exceeding authority because there is possibility of judicial review that will check his power. Court applied the intelligible principle test. American Petroleum (1980) • Facts Occupational Safety and Health Act (OSHA) Secretary of Labor should set standards for dealing with toxic materials in the workplace. A delegation is only improper if the challenging party proves that there is an absence of standards governing agency. FCC doing it not private parties. several justices have strongly advocated its application. prices. Constitutional Avoidance (like Benzene case): Douglas thinks that the “right to travel is party of the liberty of which the citizen cannot be deprived without due process of law”. Amalgamated Meat (1971) Economic Stabilization Act (ESA) of 1970 gave president power to “issue such orders and regulations as he may deem appropriate to stabilize. Intelligible Principle Standard Congress must identify an “intelligible principle” to which the agency must conform. The Court will narrowly construe all delegated powers that curtail the Constitutional rights of citizens. by regulation.” President issues executive order establishing 90 day price wage freeze.Industrial Union Dept. so that it is impossible for a court to ascertain whether will of the legislature has been satisfied. of state was authorized to “grant and issue passports…under such rules as the President shall designate and prescribe. but Congress “has made no such provision in explicit terms. “which most adequately assures to the extent Administrative Law . passports to members or supporters of the Communist Party.provides no standards at all. Dulles (1958) Sec. 2. wages and salaries. (4) limited duration – rule has limited duration so not worried going to be applicable forever. Standard? there is a standard it is public convenience. ii. o o “The Benzene Case” . in effect. o Mistretta (1989) (See also Page 5 below) Sentencing Reform Act delegated the authority to promulgate mandatory federal sentencing guidelines to the US Sentencing Commission. The Court will only confront such conflicts when there is a clear statement by Congress delegating the challenged authority. HYPOIs There Standard? Congress passes statute saying FCC can grant licenses to companies for public convenience and interest. holding that the act’s declaration of purpose and goals and its specification of factors to be considered by the Commission provided an intelligible principle. (2) procedure – president must go through process to implement the rule so that constrains his power (3) legislative history – president can look to legislative history to get sense of what is allowable for a standard. SCALIA DISSENT: Delegation Unconstitutional Where Only Delegating Lawmaking Function – The Commission is. Broad Delegation • Dissenting Justices Argue Unconstitutional Delegation even though the supreme court has not struck down a federal statute as unconstitutional delegation since Panama and Schechter. Problem of Legislative Language a. To hold that Congress had delegated the authority to restrict travel would pose a Constitutional problem.Bierschbach 5 . upheld the SRA. a mini-legislature (“junior varsity”) since it has no function other than promulgating the guidelines. v.” and absent such a clear statement the secretary cannot so regulate.” Secretary then barred.
o What EPA Should Do EPA should adopt intelligible principles to guide its exercise of 6 Administrative Law . at least in the absence of “overbroad. EPA lacks any determinate criterion for drawing lines because failed to state intelligibly how much is too much. EPA issued rules revising primary and secondary national ambient air quality standards for particulate matter and ozone. • Court Strikes Down EPA Regulation Court strikes down EPA’s regulation because EPA didn’t articulate an intelligible principle to guide its application of the criteria it set out. Instead of saying delegation itself is unconstitutional because too broad. Because D failed to satisfy his threshold burden court doesn’t address what “extent feasible” means. Stevens just substitutes one delegation problem for another – now what does significant mean.Bierschbach . Dissent – Marshall the statutory requirements have been satisfied by agency because they did a cost benefit analysis – they found a risk. To make regulation agency first has to show that “significant risk” from exposure to benzene (significant risk language not in statute). Nevertheless. Before strike down statute. Concurrence – Rehnquist OSHA is an improper delegation because it leaves the choice of adopting a cost benefit analysis to the secretary of labor.” Secretary of Labor adopted regulation limiting occupational exposure to benzene to 1ppm on the basis that that was lowest level “feasible” without bankrupting industry. Agency didn’t show that there was a significant risk to justify the stringent environmental standard mandated by the act. There is no intelligible principle to guide agency’s exercise. No way for court to decide whether exercise is in accordance with statute because no ascertainable standards in statute. So for agency to decide if “reasonably feasible” it has to do a cost-benefit analysis. Steven’s solution of adding in “significant” risk language doesn’t fix the fact that congress is avoiding accountability for this legislation. the delegation doctrine stands for the notion that in a democratic society.Stevens Court found that statute was constitutional delegation. Now it will be the court’s fault for clarifying regulation. It remains as a potential check against the conferral of boundless discretion to administrative agencies.feasible that no employee will suffer material impairment of health. letting congress get away with not doing job. o Constitutional Avoidance Stevens says if don’t read “significant risk” language into the statute then statute will be unconstitutional in violation of nondelegation doctrine. but that agency didn’t properly execute its authority. Delegation and Standards the modern trend is for courts to uphold virtually all delegations of legislative authority. Congress is avoiding the effects of an unpopular choice. court interprets around it. Congress is suppose to decide what “feasible” means. rather than administrative agencies.” This requires Secretary set exposure limits at the lowest technologically feasible level that will not impair the vitality of the industry regulated. and arbitrary application of criminal sanctions in an area of constitutionally protected freedoms. Court reads congress’s delegation of power to agency narrowly. Agency regulation is unconstitutional because agency didn’t evaluate if there are any benefits of 1ppm and compare them to the cost. it shouldn’t be up to the agency to give content to that word. Marshall argues that the delegation doctrine is dead. so that agency regulation is unconstitutional because it exceeds their authority. Concurrence – Powell OSHA requires agency to engage in a cost benefit analysis before imposing substantial new costs on an industry. • • • • • • American Trucking v EPA (1999) • Facts Congress enacted Clean Air Act requiring EPA to establish national ambient air qualify standards “requisite to protect the public health” with an adequate margin of safety. standards of conduct ought to be prescribed by our elected representatives. In not sending OSHA back to congress to clarify. • Issue Did D appropriately find that benzene poses a significant health risk to the environment and that 1 ppm standard is “reasonably necessary or appropriate to provide safe or healthful places of employment” within meaning of OSHA? Majority .” Why Did Congress Delegate This Power Congress is delegating away the power to regulate benzene because they don’t want to take any political heat for regulating. except perhaps in areas affecting individual liberty. unauthorized.
But then congress would just be making the law itself and delegation would be pointless.” Congress could have gone through all the types of particular toxins in the air and make a bright line rule of how much ppm is permissible for each. then Agency might approve another dye that is more toxic but doesn’t cause cancer. o Court Holds Agency To Narrow Language Of Enabling Statute De Minimus Doctrine The court must look beyond the plain meaning of a statute to the purpose of the statute it its literal application would lead to absurd or futile results in a cost benefit sense or lead to a result directly contrary to the primary legislative goal. but EPA in theory could choose to eradicate any hint of direct health risk.” Scalia upholds the law saying he’s upheld more vague things in the past. o Why CAA Is Not Clear congress should have made the statute more clear. Young (1987) • Facts The Delaney Clause of the Color Additive Amendment provides that a color additive shall be deemed unsafe it is found by the FDA to induce cancer in man or animals. Saying if induces cancer then it is deemed unsafe – no wiggle room about it (though there is a little wiggle room. If EPA concludes no principle available it can report to congress with rationales for the levels it chose and seek legislation ratifying its choice. A cost benefit analysis is not available. the courts must defer to it. FDA wants to list some dies that have really low risk.Bierschbach . and not any other legislative power. • Court May the FDA allow an exemption from the Delaney Clause for trivial or “de minimus risks”? No. but still some risk of cancer. • Court Does Not Strike Down Clean Air Act Statute the problem is really that congress doesn’t explain what “requisite to protect the public health means. Congress basically made delegation as descriptive as possible – went as far is it could without making the law itself. But if as here the intent of congress was purposefully rigid. Lawmaking divorce from exercise of judicial power because not subject to control of any other body with judicial powers. Commission evaluates guidelines congress gave it (categories of D’s. In passing the Delaney clause congress intended that any unexpected or undesirable consequences should be remedied by it. minimus/maximums). but in reality this statute is worrisome from the nondelegation standpoint because granting EPA broad authority to regulate because didn’t give them clear standards. Congress intended that if this rule produced unexpected or undesirable consequences the agency should come to congress for relief – court refuses to be desired escape. The lawmaking function of the sentencing commission is completely divorced from any responsibility for execution of the law or adjudication of private rights under the law. o Delegation Unconstitutional Where Only Delegating Lawmaking Function Scalia dissents that this is unconstitutional delegation of legislative power because all that statute delegated was lawmaking function. Plain MeaningThe Delaney clause is very clear direct language not allowing much discretion. rather than saying “requisite to protect public health. If you force FDA to avoid carcinogens at all costs. doesn’t say what “color additives” are. Narrow Delegation • Mistretta Congress wanted to take away arbitrariness in judge’s decisions so delegated to sentencing commission the power to provide guidelines for judges to use when imposing sentences. Absurdity Doctrine allows Court to change language of statute to avoid absurd results. This is absurd. doesn’t say when to test. Once deemed unsafe FDA doesn’t have authority to list the dye. Public Citizen v. b.discretion. doesn’t say what to “induce” cancer (though that’s harder)). Holding Congress Accountable Court wants to hold Congress accountable for writing such a 7 • • • • Administrative Law . Commission didn’t engage in any research or do anything aside from taking law congress gave them in statute and enacting it under their own name. Court says Delaney Clause does not contain an implicit de minimus exception for carcinogenic dyes with trivial risks to humans.
Improving Laws Also. o Consent For AppointmentsAdvice and consent for appointments (usually rubber stampish and lax). Court says because it’s really a declaration of policy. o Why Is This Legislative Because absent this provision the only way to undo the stay of deportation is for congress to pass a statute. so if you found something carcinogenic then you knew it was really bad. Maybe in the future you can tell miniscule carcinogenic risks.exercise of that power by executive/agency. o Oversight If you don’t like what the agency is doing. Court says this is unconstitutional because it avoids correct procedure for passing a law in Art I of constitution. Procedural Safeguards of Rights Problems with one house veto is that rights can be trampled on without procedural safeguards. The initial INS decision was through a judicial hearing. both houses. One provision of that act allows either house or congress to pass a resolution disapproving such suspension of deportation. and (3) Veto reserved power in congress to nullify that exercise of authority. which the house did without explanation. dismantle it. • One House Veto Is Congress Unconstitutionally Passing Law Court says the House’s disapproval of the AG’s suspension order involving Chadha was an unconstitutional effort at lawmaking because revoking some of delegation given earlier to AG. Bicameralism . However. So this could be a case of science getting away from Congress.requires both house’s approval of a bill before it can become law. Members won’t try to hammer out a solid law. 2. This sends message to congress and might get congress to give an actual standard to be used. Other Legislative Response • Legislative Veto legislative veto is a clause in a statute that says that a particular agency action will take effect only if congress does not nullify it by resolution within a specified period of time. Generally. o Elements of Legislative Veto (1) Delegation . and House corrected this outcome without much debate. c.rigid standard. Implicit message is that if you don’t shape up we can use some of our harsher tactics. Relation of Agencies To The President i. Appointment Administrative Law . There has to be bicameralism and presentment. Also. then it will be a problem again and it might go back and forth between Congress and Court.all legislation must be presented to president for his signature or veto before becoming law.Bierschbach • • • 8 . if Congress just says something like “feasible”. Congress might have used this strict language b/c the state of science at the time could only detect carcinogens in large quantities.statutory delegation of power to executive/agency. (2) Exercise . Presentment . Congress might be lazy with passing initial statute knowing they have veto as a backup. you make them come in and explain themselves. INS v Chadha (1983) One House Legislative Veto Unconstitutional • Facts Chadha outstayed his visa. Court ruled that this legislative veto provision was unconstitutional. or simply by a committee. They vary: might have to be passed by one house. AG suspended his order of deportation under Immigration and Nationality Act. they can: o Cut FundingCut agency’s funding o Dismantle AgencyKill the agency. One worry is that lobby groups and special interest groups get an easier way to come in and bend things to serve their own needs Other Methods of Congressional Control There are still other ways for Congress to control. o Rewrite Enabling StatuteRewrite the statute that gives agency their authority. Purpose of veto was to allow congress an opportunity to oversee or veto agency decisions especially if acted under statute that gave them broad discretion. FDA cannot approve these food colorings.
they perform more than ministerial tasks . discretionary power to seek judicial relief – these are not merely an aid of legislative function of congress. courts of law include courts that carry out functions of courts by deciding cases. conduct trials. although special trial judges do no always render final decisions. Court distinguishes ALJ’s from Freytag STJ’s concluding that ALJ’s are employees. in the President alone. court of law or head of department. Freytag v. or in the heads of departments.they take testimony. rule on admissibility of evidence. whose appointments are not herein otherwise provided for. mainly focusing on fact that they don’t have authority to render final decisions and that reviewing body doesn’t have to defer to their factual findings. Appointment Clause Analysis if federal official is appointed by President. Supreme court held that special trial judges are inferior officers of US rather than mere employees for purposes of appointments clause. courts of law.” o President’s Power To Appoint Empowers the President of the United States to appoint certain public officials with the "advice and consent" of the U. Scalia disagrees and says only includes article 3 courts of law o Head of Department chief judge of tax court is head of department because autonomous agency that not overseen by superior agency. FDIC (2000) Administrative Law Judge – Employee • Administrative Law Judge ALJ conducts administrative proceedings including hearings for various federal banking agencies. Inferior Officers Appointed By President. and which shall be established by law: but the Congress may by law vest the appointment of such inferior officers. Commissioner (1991) Special Trial Judge In Tax Court – Inferior Officer • Special Trial Judge Is Officer Special trial judges are additional personnel who assist regular appointed tax court judges in their duties.” • Definition of “Officer” Officer is one who has executive-like power.Bierschbach 9 . If officer then president must follow appointments clause and get senate’s approval of appointment. Officer or Employee? First question .Article 2 Section 2 President “shall nominate. or heads of department power to appoint. Officer Or Employee • • Buckley v. have power to enforce compliance with discovery orders. other public ministers and consuls. judges of the Supreme Court. shall appoint ambassadors. Senate.• Appointment Clause . Valeo (1976) • Federal Elections Commission More substantial powers include enforcement power. as they think proper. If just have investigative powers then employee. • Appointment By Court of Law or Head of Department? o Court of Law is a tax court a court of law? Majority says “court of law” is not limited to article 3 courts of law. Courts of Law. in the courts of law. or Head of Department Appointment clause says inferior officers may be appointed only by president. This clause also allows lower-level officials to be appointed without the advice and consent process. and all other officers of the US. or Head of Department Appointment requirements may apply 1. Administrative Law . Landry v. If inferior officer congress may give president. Inferior Officer or Principle Officer? Second question – is federal official principle officer or inferior officer? If principle officer constitution requires appointment be by president and approved by senate. appointment clause doesn’t apply 2.is federal official officer or employee? If employee. Court of Law. DOJ and Scalia interpret head of department to mean not just cabinet level positions but other entities as well.S. and can render tax court’s decisions. Here commission has responsibility for conducting civil litigation in the courts for vindicating public rights – that makes commission “officer of US. 1. exercising “significant authority” pursuant to the laws of the US. and by and with the advice and consent of the Senate.
or courts of law without senate consent. And restricted to certain federal officials suspected of certain serious federal crimes o Limited Tenure IC office is limited in tenure – no time limit on the appointment but temporary in sense that IC appointed to accomplish single task and when completed office is terminated. Doesn’t have authority to formulate policy for government. o “Inferior” Inferior can mean not as important or powerful or inferior can mean subordinate (Scalia Dissent). 2. Court says IC is inferior officer. recommended findings of fact. and means of appointment for the office were specified by statute. o Office Established By Law the office was established by law which is a threshold trigger for the appointments clause. and handling all aspects of case in name of US. Olson (1988) Independent Counsel – Inferior Officer • Independent Counsel Ethics in Government Act allows for appointment of independent counsel to investigate and prosecute high-ranking government officials. fact that she can be removed by AG indicates she is in some degree inferior in rank and authority. filing information’s. Both exercise significant discretion. Landrey says this was critical to Freytag decision. o Engage In Fact Finding they engage in fact finding and take testimony o Defer To Factual Findings in Freytag Tax Court was required to defer to STJ’s factual and credibility findings unless they were clearly erroneous. and the duties salary. Scalia Dissent (1) Removal – Scalia says that IC is removable only for good cause or physical mental incapacity. makes own factual findings. conduct trials. o Limited Jurisdiction IC can only act within scope of jurisdiction granted by AG. o Duties Established By Law its duties are established by law – ALJ and STJ take testimony. Federal judge sitting in small district is not inferior in rank and authority. • Factors For Determining Whether Principle of Inferior Officer o Removal By Higher Ranking Official IC is subject to removal for cause by higher executive branch official – AG. Unlike prosecutors IC has no ongoing responsibilities that extend beyond accomplishment of mission appointed for. a. framing and signing indictments. or administrative duties outside those necessary to operate her office. But ALJ’s can never render the decision of the FDIC – ALJ must file a recommended decision. and have the power to enforce compliance with discovery orders. Court says although IC not subordinate to AG in that has independent discretion to exercise her delegated powers. Powers include initiating and conducting prosecutions. (2) Limited Duties not limited duties because act delegates to her “full power and independent authority to exercise all investigative and prosecutorial functions and powers of Department of Justice. Inferior Means Not As Important Morrison v. recommended conclusions of law and proposed order. Principle Officer Or Inferior Officer • Principle Or Inferior Officer once determine that a federal official is an “Officer of the US” must further determine whether that officer is an inferior officer whose appointment can be vested by statute in the President. Not limited jurisdiction. o Limited Duties IC empowered by act to perform limited duties – investigation and prosecution.” (3) Limited Jurisdiction + Tenure – not limited tenure because she continues to serve until she decides her work is substantially completed.• Factors For Determining Whether Officer “Any appointee exercising significant authority pursuant to the laws of the US is an “Officer of the US.” o Authority To Render Final Decisions STJ’s have authority to render the final decision of the Tax court in declaratory judgment proceedings and in certain small amount tax cases. no doubt that jurisdiction is small but far from unimportant. whereas FDIC board doesn’t have to defer to ALJ. so it’s harder to remove her than principal officers of the executive branch who can be removed by the president at will. rule on admissibility of evidence. Department heads.Bierschbach . 10 • Administrative Law .
11 • • • • • Administrative Law . half members appointed by president without confirmation by senate. judge credibility of witnesses and determine controverted questions of fact. CRC investigates voting rights discrimination and fraud. HYPO Private Parties Can’t Appoint Even Inferior Officers Congress creates Federal Open Market Committee. issues subpoenas for witnesses to appear. holds hearings. must be head of state or court of law and private party is neither. Probably constitutional. and other half are appointed by leadership in house and senate. assisting legislatures. Court says congressional committee is employee. Scalia majority court ruled they were inferior officers. Is this unconstitutional appointment o Employee Can say just employees doing research. hires staff. Inferior Means Subordinate Edmond v US (1997) • Members of Coast Guard Court of Criminal Appeals officials perform adjudicatory functions but do not conform to the requirements of Article III. Committee has 12 members – 7 appointed by president and confirmed by senate and 5 elected by board of directors of federal reserve bank (private financial institution). o Important Responsibilitiesreview court marshal proceedings that result in the most serious sentences to ensure that court marshal’s findings of guilt and sentence is correct in law and fact. But they’re not binding themselves they can also just change their mind. They’re not exercising significant government authority other than aiding legislative function. to set interest rates. This is probably ok. Is that constitutional? Text of appointment clause doesn’t prohibit it though does seem like separation of powers.Bierschbach . • Factors For Determining Whether Principle of Inferior Officer “inferior officer” connotes relationship with some higher ranking officer – must have superior.o Inferior Means Subordinate IC not inferior officer because she is not subordinate to any officer in executive branch (not even president). We’ll confirm appointment in ND if on list that ND senators give you. b. direct federal reserve bank. HYPO Senate Only Appoints House Senate adopts rule only going to appoint to house of representatives. Necessary condition for inferior officer status is that officer must be subordinate to another officer. One argument is appointment clause gives senate alone authority to choose. writing papers. o Exercise of Significant Authority This committee has significant authority – setting interest rates. studies legal developments. HYPO Congressional Committee Is Employee Congress sets up Civil Rights Commission. Inferior officers are officers whose work is directed and supervised at some level by principle officer – who was appointed by presidential nomination with advice and consent of senate. and they are delegating away authority constitutional commits to them to house. o Removable Scalia says fact that CAA judges are removable without cause indicates subordinate relationship. determine monetary policy on behalf of US. o Independently Weight Evidence unlike most appellate judges. so they are officers. Appointed by secretary of transportation (head of department). Private parties are not allowed to appoint them under appointments clause. most think it isn’t. HYPO Senate Puts Restrictions On Who It Will Confirm Senate informs president we’re only going to confirm district judges that you chose from short list prepared by senators in state where that judge will sit. collects information. Is Morrison Still Good Law? it isn’t clear whether Morrison is still good law after Edmond. CCA judges are not required to defer to the trial court’s factual findings but may independently weight evidence. President says you can confirm whoever you want as long as house agrees to the appointments. Power to remove officers is powerful tool for control o Power To Render Final Decisions Scalia says it is significant that CCA judges have no power to render final decisions on behalf of US unless permitted to do so by executive order.
and Veterans Affairs. Office of Management and Budget. Labor. o Court Statute restricting president’s ability to remove is unconstitutional. ii. State. FTC Act provides that commissioner may be removed from office by the president for “inefficiency. Statute requires that postmasters be removed only with “the advice and consent of the senate. judgment or loyalty. Health and Human Services. • • Humphrey’s Executor v US (1935) President Doesn’t Have Unfettered Removal Power of Officials Independent Of Executive Branch • Facts Humphrey appointed to Federal Trade States Commission (FTC) for 7 year term by president. Treasury. Congress changes method of appointment so that AG now appointees US attorney. or malfeasance in the office. and sues for back pay. and the Attorney General. Cabinet-level rank also has been accorded to the Administrator. President Can’t Control Executive Branch Officials. Administrative Law . decide cases according to how he wants. Transportation. ability. Under President George W. and was removed by the president without advice and consent of senate. There may be duties exercised by subordinates of a discretionary or judicial nature over which the president cannot exercise control. US attorney is very important in that can bring down multi billion dollar financial institutions. • President’s Removal Power because the president is vested with the power to enforce the laws of the land. Removal And Presidential Control Over Agency Action • • Constitution what it says about removal authority of officers? Constitution says officers can be removed through impeachment by congress.S. National Drug Control Policy. Interior. Myers v US (1926) President Has Unfettered Power To Remove Executive Branch Officials • Facts Myers was appointed postmaster general of Portland. The president’s ability to control subordinates is manifest under the executive powers conferred upon him by the constitution so that the statutes subject to his direction may be faithfully executed. o Policy Need president to be able to remove executive branch officials. it is imperative for the adequate implementation of that constitutional directive that he be deemed a having disciplinary powers to remove his subordinates.” Myers says president can’t remove him. the president is free to remove subordinates who make decisions of which he disapproves. Doesn’t say anything about executive. Trade Representative. but he can remove them. Defense. Homeland Security. Have to ask whether US Attorney is principle officer or inferior officer? o Is US Attorney Subordinate After Edmond question is are they subordinate to some other executive branch official? Look to how they can be removed and whether they can make final decisions. would be problem if president can’t remove.” President removed him. Director. Does she need to be appointed? If the nature of their authority has changed such that before might have been employee but now officer need to go through appointment process again. neglect of duty. President’s Cabinet The Cabinet includes the Vice President and the heads of 15 executive departments-the Secretaries of Agriculture. Humphrey brought action for back pay against US claiming he was wrongfully removed from office. But He Can Remove Them President can’t force officials to act in a certain way. President doesn’t have role in triggering impeachment. Commerce. Oregon. they can prosecute who they want regardless of what AG says. whenever he loses confidence in their intelligence. Environmental Protection Agency.Bierschbach 12 . All we have is case law which lays out lots of doctrine on this. Bush. Housing and Urban Development. Unless earlier method of appointing them was sufficient to cover their current appointment. Nevertheless. HYPO Inferior v Principle Officer Analysis US attorney by statute is appointed by president with advice and consent of senate. Education. and the U. of force them to violate terms of statute. the Director. because needs to be able to control executive branch and go forward with his policy agenda. Energy.• HYPO Inferior Officer Gets Promoted To Principle Officer Congress appoints FBI official to be Independent Counsel.
Here. presumptively unconstitutional unless purely legislative agency. Weiner v US (1958) Implied Removal For Cause Condition Where Agency Carries Out Inherently Judicial Functions • Facts Weiner appointed by President with advice and consent of senate to War Claims Commission. Commission had three year life and there were no statutory provision governing removal. so much as whether it was established to be independent of the president. Congress has no authority to give congressional agent executive power – congressional agent because subject to removal by congress and long history of being part of congress. because has legislative and judicial functions. And so congressional control over removal of the comptroller is unconstitutional intrusion into the executive function.Bierschbach 13 . or felony or conduct involving moral turpitude.Myer argue that this is unconstitutional because president needs to have power to remove comptroller who is performing executive functions – budget. For example. but doesn’t give president power to remove – can only be removed by joint resolution of congress. President removed Weiner from office and Weiner brought action against US for back pay. congress cannot pass statute limiting president’s power of removal of cabinet member even if carries out some legislative and judicial functions. restrictions upon president’s removal power of constitutionally proper. • Bawsher v Synar (1986) President Has Unfettered Removal Power Over Officials Carrying Out Inherently Executive Functions • Facts President appoints Comptroller General with advice and consent of senate. o Constitutional – Humphrey argue that supposed to be independent of executive so president doesn’t have to have power to remove. it has no application to an agency outside the executive branch that exercises quasi-judicial and quasi-legislative powers. Gramm-Rudman Act says if congress and president can’t agree on budget then comptroller issues report deciding what budget should be. Unconstitutional scheme for president to have power to appoint and congress power to remove – trying to make legislative officer carry out executive functions but president can’t remove. Comptroller may be removed by joint resolution of congress for the following reasons: permanent disability. Administrative Law . Comptroller is quasi legislative doesn’t only carry out executive function so not characterized as purely executive agency. neglect of duty.• Limiting Myers – Doesn’t Have Unfettered Removal of Agency Officials Court says Myers only applies to purely executive offices. HYPO Statute Says President Can Remove Comptroller Only For Cause Statute provides that comptroller is appointed by president with advice and consent of senate. FTC Independent Of Executive Branch whether congress may limit the president’s power of removal depends upon the character of the office. o Unconstitutional . • President Must Have Power To Remove Officials Carrying Out Inherently Executive Functions Gramm-Rudman act is unconstitutional because it gives comptroller power over the budget which is inherently executive function. While its dictum may have been broad enough to encompass all federal officers. FTC commissioner not purely executive official. The FTC was established outside the executive branch to exercise legislative and judicial responsibilities independent of the executive. • • Congress Can Only Have Removal Power Over Purely Legislative Officials Letting congress have authority over officers doing judicial or executive functions creates worry that congress will start acting like the court or executive and usurping their powers. Comptroller heads General Accounting Office and investigates way that federal money is spent – supposed to be independent of executive branch. malfeasance. inefficiency. o Court Comptroller function in Gramm-Rudman Act is executive in nature. but only subject to removal by president for cause. o Is Agency Independent of Executive? Doesn’t turn on what agency is doing. Congress can’t insulate those cabinet officials from presidential removal because want president to decide important policy decisions. Comptroller not doing anything more executive than SEC commissioner who we want to be independent. Where statute says congress must sign off on removal. body with power to adjudicate claims arising from WWII.
YES Congress can put for cause restriction because Chief Judge is carrying out inherently judicial functions. Independent Agency – if congress specified bi-partisan.• President For Cause Removal Over Quasi-Judicial Sentencing Commission . o Unconstitutional VA is not purely legislative agency so unconstitutional for congress to have power to remove.Bierschbach 14 . o Unconstitutional this is unconstitutional because congress has to give consent for removal.NO President must have unfettered ability to remove cabinet members. o President Can Have For Cause Removal Over Independent Administrative Agency In Mistretta have quasi-judicial sentencing commission created by congress in the judicial branch over which president has power to remove for cause. Unconstitutional for congress to put for cause limitation on president’s removal power of his cabinet members. Bierschbach says this is constitutional to put for cause restriction. • Advisory Commission If Congress creates commission that exercises president’s constitutional power in a binding way. if he is independent that’s not enough. independent of executive then it is ok to restrict president’s removal power. then president must have unfettered power to remove. Court says congress may establish an independent rulemaking body within the judicial branch to that extent that the commission doesn’t have vested powers that are more appropriately performed by other branches. President can have for cause removal powers over independent administrative agency.YES Congress can put for cause restriction here because FCC is independent agency. Myer – purely executive.Mistretta Sentencing Commission created by congress. But congress can create advisory commissions and put for cause restrictions on president’s power to remove.VA Deputy Assistant of Veterans Affairs only removable with consent of senate. Executive has power to appoint members with advice and consent of senate. Bowsher says unless officer is purely legislative then unconstitutional because don’t want congress aggrandizing power. o Chief Judge of Tax Court . but can only remove for cause.YES Congress can put for cause restrictions on president’s removal power of inferior officers or employees. statutorily in judicial branch. President must have unfettered power to remove administrator of EPA. FPC has duty to recommend to president who he should pardon. • HYPO President’s Power To Control Cabinet Members With Removal Power Congress passes law that says Secretary of Interior shall set speed limit between 35-65 for roads in national parks. o Assistant Secretary of Commerce . Doesn’t violate separation of powers. • HYPO Congressional Removal of Executive Officer . • HYPO President For Cause Removal of Certain Officials Congress tells president you can only remove the following officers for cause o Secretary of State or Secretary of Commerce . Any congressional involvement in removal is presumptively unconstitutional. o Federal Pardons Commission -YES President has constitutional power to give pardons. Secretary picks 50 but president tells her do 55. • HYPO Congressional Removal Of Executive Officer . just recommend so not restricting president’s power over purely executive functions because president has ultimate say. o Chairman of FCC .NLRB Chairman of National Labor Relations Board can only be removed by president for good cause and with consent and approval of senate. They do not have the power to actually grant pardons. Secretary would give in because otherwise Administrative Law . to formulate sentencing guidelines to eliminate disparity in criminal sentencing. longer terms. Weiner o Administrator of EPA -NO EPA is created by executive officer – not inferior officer more like cabinet member. • Summary Where does this leave us? Purely Executive Agency .Under Myers president must have unfettered removal power over purely executive officers – cabinet level officers.
Trucking industry sues saying president can’t set the law. FCC deciding whether it will regulate internet phone calls. Often statutes that create the independent agency empower president to choose chairperson. I want you to consider the safety of park visitors and the effect on wildlife population. • HYPOPresident Can’t Force Cabinet Member To Do Something Outside of Her Statutory Authority President tells Secretary of Interior set it at 75. And Separation of Power • Agency’s Power to Adjudicate although there was once vigorous debate over the issue of whether the legislature could delegate to an administrative agency quasi-judicial responsibilities. Most commentators say that’s not for cause. Relation of Agencies To Judiciary. o Executive Control Over Independent AgenciesIn terms of independent agencies presidents do have some control. and treaties” o Judges Have Life Tenure Why give judges life tenure? (1) Protecting Individual Rights – Administrative Law . Section 3. President can issue executive orders telling Secretary to take certain things into account so long as the congressional statute doesn’t prohibit it. arising under this Constitution. iii. require agency to ask president to submit budget requests. There is no Constitutional provision or statute that explicitly permits this.“The judicial power of the United States. aside from the vague grant of "executive power" given in Article II. But if statute doesn’t exclude cost benefit analysis then president can issue executive order. Section 2 – “The judicial power shall extend to all cases.Bierschbach 15 . • HYPO Defining For Cause President has power to remove FCC member for cause. President argues that neglecting duty if not doing what president thinks is best for country constitutes inefficiency. Even if president removes her though he still can’t set it at 75 by an executive order because statute gives Secretary of Interior authority not president. and in such inferior courts as the Congress may from time to time ordain and establish. DOJ represents them when involved in litigation. both of the supreme and inferior courts. Section 1 of the Constitution and the statement "take Care that the Laws be faithfully executed" in Article II. Section 1 . the laws of the United States. the result of failing to comply being removal from office. such delegation has since been deemed not to violate constitutional notions of separation of powers. Can argue that it is for cause because need strong executive to coordinate policy objectives and disregarding those policy objectives is cause for removal. Executive Orders • Executive Order US Presidents have issued executive orders since 1789.president can remove her because no for cause restriction. • Constitution Article 3. People resign quit and vacancies open up and president has ways of getting own people in there informally or formally. If statue says can’t use cost benefit analysis executive order saying must use it is invalid. This is important way for president to control actions by subordinate agency officials. President forces cabinet members in line by brandishing his removal power. o Executive Order 12866 Bush tries to draw more agencies into the requirements. President wants FCC to regulate it and calls up and tells FCC member to pus for regulation or president will remove for cause. Congress only gave secretary power to set it between 35-65mph. d. • Executive Orders Not Binding On Independent Agencies Executive orders don’t apply to independent agencies. President can’t force secretary to do something she has no power to do. shall be vested in one Supreme Court.” Article 3. in law and equity. Within 7 months after new president takes office usually have partisan majority on independent agencies to having people on there sympathetic to them. The judges. shall hold their offices during good behaviour. • Executive Orders Are Binding On Cabinet Members o HYPO President Can Issue Executive Order Telling Cabinet Member Factors To Consider In Setting Law President issues executive order telling secretary. Most executive orders are orders issued by the President to US executive officers to help direct their operation. Secretary considered those factors and set it at 35.
US Employees Compensation Commission and they awards Benson compensation in agency proceeding under a federal statute. o General Rule Congress can delegate public rights to Article 1 courts. Public right cases involve citizens on one side and government on the other – these congress can delegate to article 1 tribunals. and (2) whether injury occurred on navigable waters. which includes power to decide cases and controversies arising under laws of US. but can’t delegate ability to decide private rights cases to those courts. it didn’t occur on navigable waters.issues specific to service that judge won’t know anything about. • Congress Can Delegate Fact Finding In Private Rights Cases To Article 1 Courts This case involves a private right. o Legislative Tribunal (1) expertise . Congress Delegation of Judiciary Power • HYPO Article 3 Judicial Court v. limit frequency of appointments. Benson appeals saying he wasn’t my employee at the time. Argument made in all these cases is that judicial power vested in article 3 courts.cost more to go to court because have to get lawyer. (2) Separation of Powers – don’t want president and executive to accumulate too much power. So that article 3 courts can independently decide whether jurisdictional requirements of the statute have been satisfied. When one party sues another private party under a common law claim that is a case involving a private right. But where the factual determinations involve fundamental or jurisdictional issues. All other findings of fact by article 1 court will be reviewed by article 3 court using substantial evidence standard. • What is A “Case?” case is an adjudication of a private right which involves liability of one individual to another. might be able to represent yourself in front of board. All other findings of fact are subject to different standard of review – as long as substantial evidence supporting article 1 Administrative Law . Is that constitutional? It is still an open question of how much of public rights congress can delegate to article 1 tribunals. unbiased and removed from political process of campaigning and running for reelection. article 3 courts are free to engage in de novo review. Section 2 gives judiciary power over “cases”. and unconstitutional to force me to go to Article 1 Legislative court. Thousands of claims don’t want article 3 courts to be bogged down with this stuff • Can Congress Delegate Judicial Power Over Cases? Article 3.o constitution gives judges life tenure so that they remain independent. o Jurisdictional Facts Jurisdictional facts are those that trigger federal power. an employee suing an employer. Judicial Power Extends Only To Cases i.Bierschbach 16 . and congress can’t delegate away something it doesn’t have. But court says that congress to make things more efficient can delegate authority to article 1 courts to engage in fact finding before the case is brought to an article 3 court. o HYPO Congress Delegates All Criminal Prosecutions To Article 1 Court Congress passes law delegating prosecution of all criminal cases in article 1 court. Article 1 Legislative Tribunal If dispute over your pension would you go to War Veterans Pension Board or court. Pension board will have more expertise because have seen this stuff before and more attune to these kinds of issues (2) efficiency – board designed to deal with these narrow issues they will be faster processing it. • Policy Congress wants you in article 1 because set up to deal with those specifically. o Court (1) no bias. Crowell v Benson (1932) • Facts Knudsen was injured on the job while employed by Benson. Don’t want judges only to rule in favor of those with money.if going to appeal anyway then going to end up in this court so more efficient to bring directly here. (2) efficient . Court said these determinations will have de novo review by article 3 court. better procedures for dealing with this stuff (3) less expensive . here the two facts that trigger application of the Employee compensation statute are (1) whether he was employee.
than in bankruptcy courts. Why doesn’t court allow delegation here? Brennan says these cases are different (1) common law right – in Cromwell claim arose under federal law – wouldn’t have existed but for federal statute. Brennan . • Private RightPrivate rights involve controversies between two individuals. o Policy all these factors are taken into account to see whether there is threat of separation of powers. • Rule of Case Congress can delegate public rights to Article 1 courts. (2) extent to which non-article 3 forum exercises range of jurisdiction and powers normally vested only in article 3 courts. o Court O’Connor says CFTC has authority to adjudicate state contract claim. (3) level of review – in Cromwell there was more substantial review of what article 1 court is deciding. (3) origins and importance of right to be adjudicated (4) concerns that drove congress to depart from requirements of article 3. This is private right. P was the one who brought action in article 1 court. so congress not trying to usurp judiciary’s power and force litigants to go to agency. (2) narrow delegation – the statute here can bring in lots of disputes to bankruptcy court swallowing up many private rights. so waiver. Article 3 forbids substantial inroads into functions traditionally performed by judiciary.two different types of private right o Congressionally Created Private Rights when congress creates a substantive federal right. • Public Right these are controversies involving rights between the government and others. Schor (1986) Overrules Northern Pipeline. Here this is common law claim – contract claim is much closer to core of private rights. it may be vested in non-article 3 forum even if an analogous function has historically been performed by Article 3 courts. o Court Plurality of court says that congress cannot delegate to the bankruptcy court (an article 1 court) the ability to decide ordinary state contract claims.court’s findings article 3 court will uphold it. Bankruptcy judge heard breach of contract claim between private parties.Bierschbach 17 . Court declines to adopt formalistic rule rejecting Northern Pipeline • Current Test the current test for determining how much judicial power congress can delegate Administrative Law . it enjoys substantial discretion to prescribe the manner in which that right may be adjudicated. Congress can only delegate private rights where there is Article 3 review. but in Cromwell grant to the agency was narrow. • Distinguishing Cromwell In Cromwell there were also private parties on both sides. Under this scheme there was concurrent jurisdiction so that could go to court or to agency. Statute created reparations proceeding where disgruntled customer could claim damages for broker’s violation of Act. Affirms Cromwell • Facts Congress grants to CFTC the power to adjudicate ordinary stat law contract claims between individuals. Northern Pipeline (1982) Congress May Not Delegate To Bankruptcy Judge Right To Decide State Contract Claims • Facts Bankruptcy Act provides that Bankruptcy judges can decide bankruptcy matter and any civil proceedings related to the bankruptcy proceeding. Commodity Futures Trading Commission v. and so long as there was review by article 3 court it was upheld. Customer brought proceeding before CFTC and defendant argued state counterclaim and won. • Factors For Determining When Legislature Improperly Delegating Judiciary’s Powers (1) extent to which the essential attributes of judicial power are reserved to article 3 courts. If customer uses agency procedure then the act permits the agency to adjudicate any related state counterclaims. o Common Law or State Law Private Rights These include other private rights for example those created by common law or state law. Such powers may be vested in a legislative court or an administrative agency. D refuses to go to bankruptcy court to litigate his state contract claim. If the right is of legislative creation. which includes de novo review of jurisdictional and constitutional facts.
Dr sought injunction against Wisconsin board on grounds that commingling of investigatory and decision-making responsibilities deprived him of due process. Tension between efficiency and the guarantee of individual’s rights. o HYPO Too Indirect NJ already has too many lawyers. He says that can’t be constitutional. Just the fact alone that one entity is both investigating and prosecuting doesn’t make it unconstitutional. Guy who fails bar exam sues saying due Administrative Law . (4) Public v Private Right – if classic public right then delegation usually ok. If this was due process violation it would complete change the shape of the administrative state by requiring everything to be brought in independent article 3 courts. FEC. Board has power to conduct investigation and enforce provisions of licensing rules. Agency heads are specifically exempted from commingling prohibitions of APA. Is that due process violation? Does board have pecuniary interest? They have incentive to keep pearl vision out because takes away their business. The probability of bias is too great where adjudicator has pecuniary interest in outcome. have trial before mayor and he says you’re guilty. and state board suspends license to practice optometry. You are accused of violating ordinance. half of state solo practitioners and half work for pearl vision. Larkin (1975) • Facts Dr performed abortions at his office. common law or state law.Bierschbach 18 . Withrow v. Court says this is due process violation. Wisconsin medical board instituted proceedings for license suspension for violation of public health. o HYPO Indirect Pecuniary Interest State board of optometry made up entirely of solo practitioners. Don’t want congress to aggrandize itself and take power away from courts. They all have agency people who come investigate and then have proceedings or penalties and hearings also before same agency. This is due process violation because mayor has direct financial interest in you being found guilty. That makes things efficient. It’s as if you get arrested police and agents who do investigation then also sit at your trial as judge. Pecuniary interest doesn’t have to be direct but can be career related interest Gibson. Presumption of honesty and integrity not going to worry about this • Examples of Unconstitutional Combinations FunctionsThe following are examples where courts have said that it is unconstitutional for the same agency to be doing the combination of things. bar exam graded by practicing lawyers who have incentive to reduce competition.involves review of several factors: (1) Type + Quantity of Claims – What kinds of claims does the statute allow to be brought in the article 1 tribunal? Is net so wide that going to draw in lots of claims that are traditionally state or common law claims? Does the action arise from a federal statute?(2) Article 3 Review – is there review of article 1 tribunals findings by article 3 court? What is standard of review? (3) Separation of Power – is congress trying to unduly expand the scope of the agency’s power and taking away power from article 3 courts. • Application To Agency Heads SEC. FTC all do both. Association brings complaint to state board saying pearl vision violating rules of professional conduct. o HYPO Adjudicator Has Pecuniary Interest In Outcome Mayor of small town’s salary is paid from fines imposed by mayor for violations of local ordinances. Combination of Functions At Agency Head Level And Potential Bias • Tension – Don’t Want Agencies To Become Too Powerful Agencies have ability to adjudicate in same way that courts do – this is a fact of modern administrative state. Court says there is a presumption of honesty and integrity that must be disproved for it to be unconstitutional. if private right look to see if it is right under federal statute. • Combination of Functions sometimes the agency heads must both initiate the complaint and adjudicate it. But don’t want agencies to get too powerful. It is different office within agency but everyone knows each other. • Court Court says no violation of due process person investigating can be person deciding. ii. • Due Process Argument Larkin says this is unconstitutional because have same people who investigate me being the ones making decision of suspension.
” Vague Statutory Standard • Court Court says Chenerys win! Chenerys didn’t breach any fiduciary duty of fair dealing.Bierschbach 19 . This is not in public’s interest. SEC issues order to amend plan so that Chenerys can’t control Federal. This facilitates judicial review to let agency provide an explanation for their conduct rather than have judge deciding. o Exceptions To Chenery Rule (1) If Obviously Valid – if court thinks its so obvious that agency can easily provide a sufficient rational on remand. You said that this breached their fiduciary duty of fair dealing and this is not a grounds upon which statute gives you authority to strike down the reorganization plan.process violation claiming examiner had career incentive to fail him. • Chenery I Rule Court can only review reasons agency gave. If agency made clear mistake and sufficient rationale is staring them in face. they’ll just affirm. not court. which can be affirmed based on any grounds found in record. nothing in those rules say that Chenerys can’t buy up controlling share in reorganized company. SEC is uniquely situated to understand that dangers that arise when Chenerys maintain control. Court says this is not direct enough – the more direct interest the stronger the claim. So SEC order is null and void. • SEC Argument Not In Public InterestSEC says maybe we interpreted fiduciary duties wrong but we can reject the plan on a lot of other grounds. court has to remand. so should defer to us. they will uphold. Requirement of Consistency • Administrative Common Law APA is only 60 years old. SEC v Chenery I (1943) • Facts Chenerys were controlling directors of “Federal” a public utility holding company. What should court do? There is a presumption that congress was acting Administrative Law . sometimes courts won’t remand. but the statute doesn’t require that they state a reason. o Public Utility Holding Company Act Public Utility Holding Company Act of 1935 gave SEC broad powers to reorganize the public utility conglomerates. Principles of Administrative “Common Law” i. II. Chenerys purchased common stock which would again give them controlling interest in Federal so that they could retain control. Rule is that if a court finds that the explanation agency offered for action is insufficient. During reorganization of Federal. AN INTRODUCTION TO ADMINISTRATIVE PROCEDURE a. SEC is trying to get court to do decide whether reorganization plan is permissible under the statute. • Court’s ResponseAgency’s Duty To Interpret Law. Chenerys say SEC didn’t have authority. Allows SEC to reject new securities issuance in corporate reorganization if it concludes that “the terms and conditions of the issue or sale of the security are detrimental to the public interest or the interest of investors or consumers” allows SEC to approve a plan or reorganization that it deems to be “fair and equitable to the persons affected by such plan. • HYPO Statute Does Not Require SEC To Provide Reason For Rejection SEC rejects Federalists reorganization plan without stating a reason. Allowing incumbent managers to retain control is detrimental to public interest. Court doesn’t want to deal with policy making which is the job of the agency. Not Court Court says yes its true that SEC could have said that this is not in public’s interest based on agency’s expertise but you didn’t say that. and this is what congress wanted SEC to do. Courts “may not accept appellate counsel’s post-hoc rationalizations for agency action” – this is unlike lower court decisions. (2) Bolster Agency Rationale – if agency’s reasons are pretty good. Court says agency has to interpret statute. court will bolster it and pump it up a little bit and affirm. before that administrative law was judge made law. SEC found that Chenerys were fiduciaries and they were under duty of fair dealings not to trade Federal’s securities during reorganization and breach that duty when buying up preferred stock.
• Analogy to Jury Instructions Jury makes finding and jury instructions are erroneous. (2) that lead plaintiff to rely (3) reasonably (4) to his detriment. because Administrative Law . We cannot. Erroneous or unauthorized advice given by an agency official that contradicts a binding regulation is usually insufficient grounds upon which to sustain a case of estoppel against the government. Postal worker assures him that jewels are “semi precious” after consulting manual and therefore are eligible for insurance. They can offer alternative rationales etc.constitutionally when passing statute. If wrongly instructed. • District Court Remands Case For Agency To Distinguish From Controlling Precedent Regional director of NLRB didn’t distinguish controlling case. ii. Level of review is rational basis – if court can find any rational basis for statute it will uphold it. National Labor Relations Board (2004) • Facts Faculty of college want to be part of union. o Estoppel Factors (1) actions by defendant. then government is precluded from changing its position later on.Bierschbach 20 . There appellate court won’t say even if correctly instructed would have come out same way. Estoppel and Res Judicata 1. College appeals. but also facilitates judicial review of agency action in a manner that protects the agency’s predominant role in applying the authority delegated to it by Congress.Owen College v. We therefore remand to the NLRB for further proceedings. assume that such an explanation exists until we see it. But when it comes to congress court says that they are coequal branch of government and they are supposed to police agencies and offer publicly acceptable reasons. o Agency’s Responsibility To Determine How To Exercise Delegated Power Courts say it is the responsibility of the agency to determine how to exercise its delegated power. Court refuses to substitute its own view of why precedent is distinguishable – facilitate judicial review so that agencies make the decisions not the court. Generally agency must give notice before changes its interpretation so that public’s expectations are not being upset. How do we square this result with court not wanting to interpret statute? Why Different Level of Review For Agency Rulemaking Than Congressional Rulemaking? o Check On Agency’s Power very easy for agencies to act arbitrarily and capriciously – agencies can do whatever they want so courts need to police them more than congress. o Remand Requiring an adequate explanation of apparent departures from precedent thus not only serves the purpose of ensuring like treatment under like circumstances. ships the jewels and then they are lost in the mail. So reviewing court will have to think of reasons as to why congress made statute. District court remands back to agency to distinguish controlling precedent. Jeweler buys insurance. Congress has constitutional process for rulemaking that discourages them from arbitrary rulemaking – both houses.” NLRB certifies faculty offering lots of evidence that they are merely employees and not managers. Estoppel • Estoppel When person reasonably and detrimentally takes action in reliance on government’s position. Lemoyne. verdict overturned and new trial. and postal regulation says his jewels were precious and therefore postal service won’t insure. presidential sign off etc. Jeweler argues post office owes him money. Not going to step in and weigh for them. View juries more like agencies – jury’s prerogative to weigh evidence however think it should. NLRB only certifies collective bargaining units if don’t consist of people in “managerial positions. The NLRB may have an adequate explanation for the result it reached in this case. but didn’t’ distinguish from controlling precedent. District court says this calls for Chenery remand because we can’t tell what NLRB’s reasons were for treating this case different than controlling YU case. • HYPOMistaken Post Office ManualJeweler brings package of jewels to be shipped to post office. The manual was apparently mistaken. • Chenerys’ Options After This Decision Agency can offer reasons as to why not in public interest and support their findings. On remand NLRB will explain why distinguishable. It is very political decision and court doesn’t want to get involved. however.
000 appropriated for retired navy disability program. because payment would not be in violation of appropriation clause. OPM passes regulation saying changing it to 80% over 1 year. o Policy (1) Open Floodgates For Litigation – will create wave of litigation and liability for government. Schweiker v Hansen (1981) Administrative Law . (4) Protects Taxpayers – protects taxpayer against the ineptitude and incompetence of government workers • HYPO Broad Appropriation Statute says $100. because statute appropriating money says 2 years. Office of Personnel Management v. An award to Richmond under an estoppel claim would be in direct contravention of the statute because his income exceeds 80% for one year. Agencies will collude with claimants to hand out money in violation of statute. • HYPO Specific Appropriation Statute says $100. Richmond has part time job and wants to work overtime – but first goes to OPM and asks employee if this will make him ineligible. All that congress requires in this statute is that must be disabled and retired from navy. Estoppel will enable agency to override statute.Bierschbach 21 . Richmond lost his disability and said government should be estopped from denying him benefits. Payments to be made in accordance with provisions in this chapter. Here policy concern that agency will stop giving advice. Just in contravention of agency regulation but that’s no big deal. (3) Agency Wont’ Give Advice – court is concerned that agency will stop doling out advice so as not to be held liable. Before 1982 ineligibility resulted if retired employee’s income equaled at least 80% of former salary for two calendar years. employee says no because over two years. Would be more likely to apply estoppel in this case. (2) Agency Will Give Intentionally Erroneous Advice – Court is worried that employees can bind government. This is stronger case that giving money would violate appropriation clause. If postal employees can bind government every time interpret manual wrong way people will make claims. Here the money is already appropriated to program so strong case that he should recover. He asks agency employee and they say don’t worry it’s over 2 years you’ll be fine. o Richmond Explanation Richmond says that can’t succeed on estoppel claim if payment would be in contravention of statute appropriating money. then mail system will bleed to its demise. o No Estoppel Post office argues that if they are responsible for this error. Statutory language making appropriation is extremely important. Richmond (1990) Private Litigant May Not Recover For Estoppel Against US Government • Facts Richmond was welder who left his position after Office of Personnel Management (OPM) awarded him disability retirement for impaired eyesight. • HYPO Contravention of Agency Regulation Not Appropriation Statute Statute appropriating money says 80% over 2 years. clog up courts. As a policy matter even though this is good argument for estoppel.shipped package and bought insurance in reliance on manual. If just says appropriated to this program strong case that he should. Here to be eligible applicants have to follow procedures set out in statute. and drain of funds.000 appropriated for retired navy disability program. when government is involved there are often big systemic reasons for denying application of estoppel. If says only for payment made in accordance with subchapter stronger case shouldn’t’ get money. 1982 it was amended to 80% for one calendar year. This would hurt people that can’t avoid lawyers who rely on government’s help. what if agency doesn’t like one year rule they will intentionally advise people that it’s two year rule and people will recover. Under statute disability payments end if retired employee is restored to comparable earning capacity. Now his estoppel claim is stronger. • Private Litigant May Not Recover For Estoppel Against US Government o Appropriation Clause Under the appropriation clause money may be paid out only through an appropriation made by law – payment of money from the treasury must be authorized by a statute.
• Mendoza’s Collateral Estoppel Argument Mendoza says you violated my due process and you are estopped from claiming otherwise because court already decided arising out of same facts that due process violated. Might succeed under Richmond. • Social Security Act SS Act says entitled to benefits if file application. Basically court relies on policy argument. Don’t have to relitigate this. she declined to file a written application for benefits. If employee’s breach of the manual puts him in breach sufficient to estop her. Generally it is available in federal court if D have full and fair opportunity to litigate claim and it’s allowed under state law. Wasteful for government to have to appeal every case so that decisions won’t be used against them in future. US didn’t appeal. She was eligible but since didn’t file written application she doesn’t get payments. try to get agency opinion in writing like SEC no action letter which will be more binding on agency. • No Estoppel Court says while employee made an error in telling her she was ineligible for benefits. 68 Filipinos had already prevailed on the same claims in district courts –violation of due process. Agency regulation says only entitled to benefits if file written application. Schweiker her benefits are suspended only temporarily. if it were permanent forfeiture court might have treated differently.. o Explanation court says yes he made a mistake but she can’t recover. Res Judicata • Res Judicata the general principle of res judicata prohibits a subsequent suit on issues of fact or law already litigated and finally decided. This is still good law. Other courts allow agencies to reexamine their statutory and factual conclusions and change their minds at a later date • Nonmutual Offensive Collateral Estoppel Example – in case 1 driver of your car sues other driver and court finds negligence. • Declaratory Orders under the APA (§ 554(3)) parties may secure binding advice from a federal agency. Try to argue not in violation of appropriation clause. it did not cause her to take action or fail to take action that she could not correct at any time. • Nonmutual Collateral Estoppel Not Available Against Government Court says offensive non mutual collateral estoppel is not available against the government because don’t want to force government to appeal every adverse judgment. we don’t have to litigate it again. o No Appropriation Clause Violation she’s not asking for money to be paid out in contravention of the statute. However the issuance of a declaratory ruling is discretionary with the agency • Lawyer’s Tip in cases of egregious facts estoppel might be available. Administrative Law .Bierschbach 22 . in case 2 you sue driver of other car and say invoking nonmutual collateral estoppel negligence already decided by other court. then government is put at risk that every alleged failure by an agent to follow instructions to the last detail in one of a thousand cases will deprive it of the benefits of the written application requirement which experience has taught to be essential to the honest and effective administration of Social Security Laws. United States v Mendoza (1984) No Nonmutual Collateral Estoppel Against Government • Facts Mendoza challenged US government’s failure to implement law facilitating nationalization of alien veterans. Invokes offensive non-mutual collateral estoppel. Some efforts of administrative agencies to reverse prior decisions involving the same parties and facts have been struck down on grounds of being arbitrary and capricious.• Facts P inquired whether she was eligible for her mother’s insurance benefits under the Social Security Act and was erroneously informed by a government official that she was not. o Waste of Judicial Resources court says don’t want government to have to ignore budget concerns and government interest in alleviating crowded court dockets by appealing all adverse decisions in order to prevent elimination of further review. 2. since the payment complies with the statue – she made an application to government civil servant orally. Relying upon that advice.
injunctive. negative. (B) the courts of US. make point because believe in interpretation. o Inter Circuit Non-Acquiescence sometimes agencies refuse to acquiesce to interpretations of courts in other circuits – they’re not bound by that judgment. o Rulemaking“agency process for formulating. o Order “the whole or part of a final disposition. • HYPO NLRB Rule or Order?NLRB issues statement saying faculty of YU are hereby certified as bargaining unit under National Labor Relations Law. Why not acquiesce? Different party different facts. o Agency “means each authority of the US government. • HYPO Inter Circuit Non-Acquiescence SS administrator decides that soft tissue damage does not meet disability requirements. but does not include (A) Congress. Madison • Courts Can Refuse to Acquiesce Until “Law of Land” By Supreme Court Ruling. What does ALJ do? o Follow Boss ALJ would probably follow SS administrator because job is to implement law the way administration sees it. advice.” It fits into rule definition – agency statement of particular applicability having future effect interpret Securities Act. Policy is that non-acquiescence rule is necessary to generate circuit disagreements that will eventually produce a clarifying resolution from the Supreme Court. b. Informal rulemaking § 553 o Rule “the whole or part of an agency statement of general or particular applicability and future effect designed to implement. But really more like an order. informal actions. grant-making.Bierschbach 23 . Every single appeal from adverse judgment must be authorized by Solicitor General who has centralized oversight to make sure government taking consistent litigation positions. Applicant appeals to DC circuit and court says can’t deny benefits. For example rate making for utilities.o Political Argument decisions about whether government will appeal are very political.” Anything that’s not a rule except licensing. and so is bared from practicing before SEC.” APA applies to any entity exercising government authority except for congress and judiciary. interpret or prescribe law or policy” • “Particular Applicability”Language is confusing.” Anything that leads to rule is rulemaking • Formal v Informal Rulemaking different procedures required for formal and informal rulemaking. Formal rulemaking § 556 + § 557. If court forces government to appeal this would force them to ignore policy decisions they generally take into account. whether affirmative. or repealing a rule. You are ALJ in NY and people making claims for soft tissue damage. • Order is Catchall Order includes actions that agency takes like entering into contracts. and that position jives with political and policy priorities of executive. or declaratory in form. o Adjudication “agency process for formulating an order” Anything that leads to an order is adjudication. The Administrative Procedure Act APA – Administrative Procedure Act • Definitions § 551 APA Establishes procedures agency has to follow if engaging in rule making. Still SS's position that not eligible for disability. of an agency in a matter other than rulemaking but including licensing. o Both Orders Everyone agrees despite language of statute that both of these are orders under APA. • HYPO SEC Rule or Order? SEC proceeding where SEC determines “Gordon violates securities act as we interpret it. hoping party won’t appeal. Why include “particular applicability?” because certain kinds of rules apply to one or two people and want to include that in rulemaking procedures. Argument that not court’s job to say what law is. Administrative Law . Agency implements this view by denying disability benefits to soft tissue damage applicants and ALJ in DC affirms it. Controversial some say this violates Marbury v. amending. This also fits into statutory definition of a rule but seems more like an order. important to understand statutorily what these things mean and that’s what definitions deal with.
Can be cross examined go back and forth. everyone can come in and say what’s on their mind. City of Denver was required to offer parties notice and opportunity to be heard at some point before the tax became irrevocably fixed. his constitutional right to due process had been violated. Londoner contends that he is constitutionally entitled to oral hearing. interpret constitutional and statutory provisions. o § 702 Right of Review This section deals with standing who has right of review. and How To Choose Between Them i. “reviewing court shall decide all relevant questions of law. Much more effective than letter. it is impractical that they each be given a formal hearing otherwise machinery of government would break down. o No Due Process Violation court says that there was no due process violation here (1) Administrative Law . Before assessment city of Denver was required to afford parties notice and opportunity to file written objection.Judicial Review Lays out basic framework for Judicial Review of agency action o § 701(a) Presumption of Judicial Review of Agency Action “This chapter applies except where (1) statute precludes judicial review or (2) agency action is committed to agency discretion by law. • Processing Remarks More likely decision maker will process what you say if he has to be there to listen and he can’t ignore you.” Court implies if legislature had levied the tax oral hearing wouldn’t’ be required. followed by an apportionment of its costs among property owners.• APA Chapter 7 . (1) board of public works transmits to city council resolution authorizing paving of street after petition is filed by majority of owners of property fronting the street and after notice and opportunity for hearing on that petition. commits to some subordinate body the duty of determine whether in what amount and upon whom it shall be levied. Increases level of detail.Bierschbach 24 . • Court – No Oral Hearing Required when a large number of individuals are affected by agency action. (4) counsel then has to approve and adopt the assessment via ordinance after notice and opportunity for written objection. The Constitutional Distinction Between Rulemaking and Adjudication Londoner v Denver (1908) Adjudication – Oral Hearing Required • Facts Londoner was a property owner who objected to a tax assessment by the city of Denver based upon street improvements.” Talks about when court can set aside agency action etc. o § 706 Scope of Review This is most important section and sets out standard and scope of judicial review. • Procedure For Street Improvement The process is four steps.” Default rule is yes judicial review. The action taken here were analogous to that regularly performed by the legislature. (2) city counsel receives petition and passes ordinance adopting the resolution. due process of law requires oral hearing before final. (3) paving and board of public works figures out what costs are and then they apportion that cost through assessment on owners of property fronting the street. • Oral Hearing Requirement Court says constitutional minimum due process requirement for taking property is oral hearing. Bi-Metallic Investment v State Board of Equalization (1915) Rulemaking – Oral Hearing Not Required • Facts Denver real estate owner sought to enjoin State Bard of Equalization from increasing the valuation of all taxable property in the city by 40%. Orders. P argued that since he was given no opportunity to be heard. o Why Need Oral Hearing? • Participation Oral hearing is more participatory. • Accuracy Hearing may contribute to accuracy when issues simple. “Where the legislature of a state instead of fixing the tax by itself. Under Colorado statute the board of public works might order he paving of a street. Rules. Even though the legislature can significantly affect the property of individuals there is no constitutional requirement that a hearing be held before such action is taken. and determine the meaning or applicability of terms of agency action. c.
• Londoner + Bi-Metallic In Bi-Metallic court is effectively saying this is legislative type process and calls for legislative type response which is lobbying. RR refused arguing that the procedures employed failed to satisfy due process. Not clear that hearing requires everyone to come into court can have main plaintiff with class action type procedure. Adjudication • Effects Individuals Or Small Groups • Judicial Type Remedy (Injunction.Utility rates legislative action that only effects small number of people or casino regulations but only one or two casinos in state. o Court Court says violates due process. Would still be legislative type of rule. What. When) • • • • • Rulemaking Effects Large Groups Or Classes Remedy In Political Process (Lobbying) Statutes Are Prospective General Applicability Legislative Facts (Economic Policy. • Adjudicative Facts Adjudicative facts are those surrounding the actors in an agency proceeding (what happened. because possible to have adjudication that affects large group of people like in injunctive proceeding. Broad Data Gathering) Southern Railway v. In Londoner court says this is more like adjudication. But if small group not going to be effective lobbying. time for hearing was fixed to submit written objection but didn’t allow oral objections at hearing. Would that become an adjudication because only a few people? No. acting under VA law. but to lobby to lawmakers to change the law.Bierschbach 25 . small group of people and remedy available to them is due process. Virginia (1933) • Facts Highway commissioner of Virginia. As the supreme court noted. Clearly a requirement to expend money to eliminate a railway grade crossing a construct a bridge in its place constitutes to the taking of property. there is a “recognized distinction in administrative law between proceedings for the purpose of promulgating policy type rules or standards on the one hand. and how). Where. without notice or hearing ordered RR to eliminate a grade crossing and construct an overhead passage. Adjudication is more narrowly focused to parties effected.process was sufficient – there was some process. • Remedy – Lobbying Court says the recourse provided for such action. who did it. Since the statute conferring powers includes no provision for a hearing or judicial review it is unconstitutional. when. why. Damages) • Retrospective Effect • Particular Application • Adjudicative Facts (Who. is not to get due process hearing. • Tricky to say if effects large group of people then legislative decision. Lobbying is effective political remedy because if enough people affected that complain to their elected officials then will change the law. (2) impracticable too many people affected this is like legislative action which doesn’t implicate due process requirement of oral hearing – would be impracticable if required oral hearings giving each person effected which is whole city opportunity to be heard and nothing would ever get done. and proceedings designed to adjudicate disputed facts in particular cases on the other. where. o Adjudication v Rulemaking these decisions illustrate the fundamental distinctions between adjudication and rulemaking.” • Basing Rulemaking v Adjudication Distinction On Amount of People Affected Doesn’t Always Work. Administrative Law . But if Bill Gates effected he has political muscle to change the law. o Legislation Affecting Small Group Of People Price Regulation. o Adjudication Affecting Large Group of People In class action litigation thousands of people effected by private party or government action and use judicial remedy to try to repair it.
o Court Court agrees with Plaintiff that this was rulemaking and not informal adjudication. Individual developer. Economic considerations at large. o Entitled To Hearing When Landlord Refuses To Comply. When would a hearing be required? o Not Entitled To Hearing When Rent Controls Imposed when sets the general price that is very broad rulemaking no right to hearing. people in effected area. What benefit is he getting from hearing? he can generate some kind of controversy and political push back. developer sues saying due process violation and that he’s entitled to hearing. o Southern Railway legislature when deciding to eliminate grade structure thinks of cost benefit analysis. what effect has on spending of property owners. Yesler Terras Community Council v Cisneros (1994) • Facts HUD rules are that public housing tenant can only be evicted after a grievance hearing in front of a public housing authority. whose complaining. Fact gathering they do when making broad policy. have committee reports. retroactive in sense all facts already before court. city. Under Londoner seems hearing required. • Legislative Facts Legislative facts are the general facts to which the agency looks in deciding questions of law and policy. And Administrator Orders Reduction Then landlord comes in charges prices hire administrator orders reduction in price is there right to hearing then? Yes that’s when hearing is triggered. What informs that decision? If deciding how much need to raise taxes for entire city look to how much revenue city needs. o Adjudication Sounds like adjudication. Judicial type decision. Legislature takes everything into account. HUD certified Washington state eviction procedures as satisfying due process. people who live around this crossing and those who operating RR. If that still doesn’t alleviate the housing problem then Administrator can impose rent controls. In cases of criminal evictions HUD can bypass the procedure if it certifies a regular state court eviction procedures as satisfying due process. so under APA § 553 required to provide notice and opportunity for comment. Posner says this is rulemaking but he thought Londoner wrongly decided. Economic policy decision o • HYPO Zoning Permit Ordinance says no land may be developed without zoning permit from board of trustees. and at same time affected rights of broad category of individuals not yet identified. how much will it last. After trying maximum rents and failing Administrator imposes rent controls in war time. HUD didn’t’ give any effected parties a chance for notice and comment so therefore rule was invalid. P is evicted without grievance procedure and sues. but can’t get rule to be more favorable now.Bierschbach 26 .Southern Railway Adjudicative fact highway commissioner will eliminate this particular grade crossing he’s going to focus on interests of effected parties. Required to have notice and comment and didn’t so unconstitutional. o Bi-Metallic decision to raise taxes on entire county of Denver. Developer applies for permit and board without a hearing says no. who did it effect. to develop this land in this way. Administrative Law . Solicit views from RR. • Distinguishing Bi-Metallic if plaintiff had not paid his taxes and would have tried to impose penalty without hearing he would have had right to hearing. • HYPO Rent Controls Congress passes statute saying Administrator can recommend maximum rents in certain areas. How much did this cost. • Plaintiff Argues It Was Rulemaking HUD treated this certification of Washington eviction procedures as an adjudication – order stemming from an informal adjudication. Landlord charges higher prices. lobbyists. Court maintains that HUD’s certification met all the hallmarks of a rule – it had no immediate effect on anyone but permitted to evict in future without grievance. applying ordinance to individual seems adjudicative. operators. Ordinance doesn’t have any criteria for board of trustees to review applications. o Londoner if looking at how much assessment for paving this road thinking about who what where when of what happened in past. Ask for advice from highway commissioner. This is a legislative fact.
o More Notice To Parties Notice and wide public participation avoid the inequity of singling out a single defendant among a group of competitors for initial imposition of a new and inevitably costly legal obligation. National Petroleum Refiners Association v FTC (1973) • FactsFTC promulgated rule declaring that gas stations must post octane ratings on pumps. Then once court rules in FTC’s favor they’ll have to bring another suit. Failure to comply was declared to be an unfair method of competition under the FTCA. and another. ii. and data that is ordinarily les likely to be forthcoming in adjudication. Petroleum companies argued that congress did not give FTC rulemaking authority. They still might have to bring an action against people who violate the rule but now issue is did you violate it and not is it unfair trade practice.Bierschbach 27 . parties have opportunity to comply with rule o Treats Everyone Equally rulemaking treats everyone alike and doesn’t make examples of certain people • Policy Reasons Against Adjudication overbroad rules or under inclusive. Since rate are more specific than adjudicatory quasi judicial policy. • Argument That It Was Adjudication HUD’s attorney could have argued under APA §551(8) this was a license and not a rule. Yes. o Public Comment Rulemaking opens up the decisional process to a broad range of criticism. Sometimes safer to proceed incrementally . Court doesn’t pay much attention to statutory definition. Just says here’s definition and looks at its own considerations.. Might not want to lock yourself in • What If Proceeded By Adjudication FTC would issue cease and desist letter to parties.• Distinguishing Rule From Adjudication Court says there are two principle characteristics that distinguish rulemaking from adjudication: 1. have oral argument on whether it is unfair or deceptive. But on policy grounds court says that FTC needs to be able to make rules or wouldn’t be able to do their job effectively. • FTC Needs To Be Able To Make Rules Court agrees that under the statute it is a stretch to say that congress empowered FTC to make rules. May the Agency Make Rules? • Congress Can Empower Agency Only To Adjudication Or Make Rules Or Both Can congress tell agency you are empowered to do xyz only by adjudication. it only has power to proceed by adjudication. • Why Rulemaking Better Than Adjudication The use of rulemaking may be fairer to those regulated than case by case adjudication. advice. If statute does that that it is grounds to challenge agency who proceeds in way not specified by statute. o Efficient rule would say if don’t post then it’s deceptive. Rulemaking is prospective and has a definitive effect on individuals only after the rule is applied. Quesada (1960) • Facts Airline Pilots Association issued a ruling saying that “No individual who has reached his 60th Administrative Law . If adjudication know someone else held liable but still don’t know if it applies to you. o Opportunity To Comply if issue rule. Prospective v Retrospective Application because adjudication involves concrete disputes they have an immediate effect on specific individuals involved in the dispute. Airline Pilots Association v.efficiency cuts the other way. Wont’ cover every situation you need it to. 2. Congress creates agencies can tell them what they want so long as doesn’t violate constitution. Effecting Specific v Broad Class of People adjudication resolves disputes among specific individuals in specific cases whereas rulemaking affects the rights of broad classes of unspecified individuals. industry compliance is more likely simply because each company is on clearer notice whether specific rules apply to it. This saves lots of adjudicatory resources and judicial resources. Takes long time for rules to be implemented.
o Majority response to retroactivity argument Every case of first impression is in some sense retroactive. (2) Federal Aviation Act . o Too Much Delegation To Agency Court says it’s up to agency to make general policy determinations and so remanded to agency. iii.birthday shall be utilized or serve as a pilot on any aircraft while engaged in air carrier operations.this is judgment about safety which outweighs concern about property.” They went through notice and comment but didn’t have oral hearings because decided wouldn’t serve useful purpose and not in public interest. Chenery challenge that agency can’t proceed by adjudication but must proceed by rulemaking. and at least if have to proceed by way of rule Administrative Law . We’re not going to worry about it. Unfair to spring it on people without notice. therefore they should have had a more individualized right to a hearing. • Jackson Dissent Retroactive Legislation This is basically retroactive legislation – no fair warning of what’s going to happen. you shouldn’t be allowed to take away property with flimsy order. Court says this was antithesis of adjudication . or might want to proceed incrementally o Agency’s Discretion Court says so long as statute empower agency to engage in both rulemaking and adjudication. • Court Says SEC Not Required To Proceed By Rulemaking Court refuses to hold that announcement of new policy must always be accomplished prospectively through rules. Court says agency should have flexibility to announce new policy through rulemaking or retroactively through adjudication and this choice should be in discretion of agency. • Eliminating Right To Hearing By Rule FCC charged with giving broadcast licenses. Jackson thinks they should have proceeded by rulemaking that way the rule would have been prospective so that Chenerys’ or people like them have notice. Party sued saying applied to for license and was turned down because had 6 stations. Argued you can’t foreclose my right to hearing through a rule and supreme court says yes you can if the rule is valid. o Court court says that this provision of FAA only applies when reexamining a person’s license and doesn’t apply when agency makes a general rule. Chenery II (1947) Agency Not Required To Proceed By Rulemaking • Facts On Remand SEC issues another order rejecting the Federlist’s plan of reorganization.Bierschbach 28 . (1) Due Process – they have license to fly planes. But Jackson thinks that granting too much power to agency. This is retroactive upset to the Chenerys’ expectations through a retroactive announcement of a new order. o Court court says this really is general rule not individual so due process doesn’t apply. and being deprived of that license by this rule that says if over 60 can’t. might be problems which doesn’t have enough experience with yet to pass rule. o Not Ready To Make A Rule Court says agency needs flexibility to choose because. § 609 of the Federal Aviation Act requires the Administrator to hold a hearing and permit each pilot affected to submit evidence as to the fairness of the regulation before his certificate can be amended. and broad grant of authority for FTC to decide what kind of plan to approve. the agency ahs discretion how to proceed. Under statute if your application is turned down you’re entitled to a hearing.whether one labels the issuance of the regulation rule. P argues this was not a rulemaking but was an adjudication and so he was entitled to oral hearing before took away his property – license to fly planes • Plaintiff Argues This Is Adjudication Plaintiff argues that this is effecting very limited pool of people. or problems so specialized or varying in nature (fact specific) as to be impossible of capture within the boundaries of a general rule. Court says for safety reasons . FCC passed rule saying its not going to grant licenses to applicants that already have 5 or more stations. they can make up arbitrary reasons. Required to have oral hearing before taking away their property under APA. Must The Agency Make Rules? SEC v.making or not. Idea of private property is subject to reasonable limitations that flow from general rules.it was the formulation of a general rule to be applied to individual pilots at a subsequent time.
AGENCY ADJUDICATION AND THE DUE PROCESS CLAUSE a. Court might strike down because the policy change is so different (either make them do by rule. Justice Frankfurter argued in 1950 that merely because the interest conferred is deemed to be a privilege does not warrant the conclusion that government may revoke it arbitrarily o Privilege-Right Distinction on The Run beginning in the 1960’s several federal courts began to view the privilege-right distinction as archaic and ill-conceived. must have oral hearing written objection is not enough. liberty or property? (2) How much process is due? o Londoner says process is due if tax applying to small group of people. how much is due. Even though a person held no right (to a liquor license. he should have right to hearing because Administrative Law . Just the fact that government hurt you doesn’t mean entitled to due process. or only apply prospectively). must be deprivation of life. or property. but in rulemaking it doesn’t. Due Process and the constitutional floor is the more important. court will hold to higher standard. For adjudication generally. for example)the courts held that government could not deprive an individual of a liberty or property interest without due process of law o Due Process Explosion Goldberg v Kelly decision is high water mark holding of supreme court on question of what process is due. The Emergence of The “New Due Process” • Constitutional v. • In Londoner the agency tried to do an adjudication by passing a rule and the court says this was really a rulemaking and required to provide opportunity for oral hearing. without due process of law” Due process clause in 5th amendment applies to federal government and 14th applies to states. Bert wants a hearing o Seems bad because it is a badge of infamy. For rules. if agency changes position in adjudication. • Evolution of Due Process o Erosion of Privilege Concept the growth of government and its incensing and welfare functions made inevitable the result that adherence to strict notions of privilege would have onerous consequences. liberty. Alice is bus driver for local public transit authority. Alice wants a hearing o Her employment is at will she doesn’t have right to hearing 2. Her employment is at will. it’s the statutory standards that govern (since Due Process not apply to rules) Most of the time the applicable statute (APA and organic statute) and the agency’s own rule will usually establish procedures above constitutional floor. and court allows this. liberty. Bert lives in a small town where police chief routinely circulate to shopkeepers a flier picturing “suspected shoplifters. o Due Process Analysis (1) Does due process clause apply? Is this Life.Bierschbach 29 . Bi-Metallic says process not due because this is rulemaking. III. when you do adjudication Due Process applies. In Chenery II agency uses adjudication to make a rule.it is taking away property in such a way this is prospective and puts people on notice. But as long as government jumps through the right procedural hoops then it can deprive person of life. liberty or property. EXERCISE – WHEN IS PROCESS DUE? 1. • Sudden Change of Agency Policy There are some cases where some adjudications are so unexpected that even if statutory authority is there. or property.” He just learned that his face appears on the flier and police wants to distribute. or to travel. Statutory Procedural Requirements We know from Londoner and BiMetallic. • Due Process “No person shall be deprived of life. She has just received pink slip informing her that she is being discharged. • Lawyer’s Tip litigants can always argue that agency doesn’t have authority for rulemaking or adjudication under statute.
but say it was unfair. P denied charges and US produced no witnesses. Government fired her. who had right to fire her if investigation disclosed she was disloyal to government. o Liberty. o Cafeteria Workers v. it says you don’t get past question one because not deprivation of life. the evidence used to prove the government’s case must be disclosed to the individual so that he has an opportunity to show untrue. McElroy (1959) • Facts Greene was executive for a defense contractor. (1) Nature of loss (2) History/Past Practice (3) Accuracy (4) Text (meaning common law right of reputation is not as important as liberty interest) (5)Availability of other Remedies (6) Government Interest (7) right vs. must have hearing 5. She wants hearing with cross examination • Question 1 Due Process Clause Doesn’t Apply government employment is neither a liberty nor a property interest. liberty or property. Department of defense revoked her security clearance without hearing or explanation because failed to meet security requirements. • Things to Consider the following are things to consider in determining whether there is due process violation.Bierschbach 30 . • Analysis Analysis is confusing. didn’t get to hear other side’s facts. Court says because we’re concerned about fairness. and reasonableness of the action depends on fact findings. Greene v. Efficiency Bailey v. So not entitled to hearing before dismissal. • Court Doesn’t Address Due Process court doesn’t talk about due process. His shop has been cited by local safety inspector. But doesn’t stop at question one. nature of loss and history of government giving hearings so she should have too. Cathy wants a hearing o This is taking her property. Administrative Law . earlier decision might have been different statutory scheme. Court admits even at will employee can’t be fired for arbitrary or discriminatory reasons. What About Kent Kent it was the same procedure. Government fired her after learning that she was communist. Government informed her that learned that she was communist. Court says not deprived of life liberty or property because she has no constitutional right to be on the security base in the first place. Where government action seriously injures individual. Donald wants a hearing. privilege (8) value of additional procedures (9) “Dignity” (10) legislative facts (11) Gov. court goes on to question two and says the only process that is due is non arbitrary and capricious discharge. 4.don’t know if charge is accurate or just someone who hates him. Donald owns a chain of hotels and casinos. She had hearing with witnesses and testified at proceeding. Richardson (1950) • Facts Bailey hired by US government. o Constitutional issues of due process can be avoided because case is decided on other grounds. Ernie wants a hearing. we will read statute so that it doesn’t delegate authority to do this troublesome procedure (this is same as Kent). At hearing. Court doesn’t’ even address this question. Brawner argues that she should be advised of specific grounds for her exclusion and be accorded a hearing to refute them. Ernie owns a small machine shop. • Question 2 Bailey Thinks More Process is Due Bailey complaining that she didn’t get all the process that was due. McElroy (1961) • Facts Brawner had worked for more than six years at government cafeteria on security base. Bailey is different court. so due process clause is inapplicable. He has just learned that the local district attorney has decided to seek indictment against him for defrauding the public. Cathy has just learned that the state highway department has decided to condemn her house by eminent domain in order to demolish it and build an interchange for a new federally assisted highway. 3. she wants to cross examine the other side. lost his security clearance because of alleged association with communists. who said the company must install safety railings at considerable cost or else company must shut down.
need oral testimony. cross examination of adverse witnesses. Which he doesn’t. though it doesn’t say that. These procedures are valuable because court makes assumption easier for poor people to get point across in oral proceeding. it’s almost embracing the privilege versus right distinction. termination of welfare payments. that the job is a property interest. his right to employment elsewhere has not been infringed. beyond those provided by government. Court says we look to see whether there is any legal entitlement. full record. • Question 2 Oral Pretermination Hearing Required welfare recipient is without financial resources. to acquire useful knowledge. o it’s not clear that she needs hearing here. to establish a home and raise children. But when reason for discharge are rational no hearing required. Goldberg v. Administrative Law . Court lists extensive procedures. Here they said pretty grievous need and procedures are not that harsh. Roth claims failure to give him hearing violated 14th amendment. opinion with formal findings and statement of reasons for findings. she would be paid all monies erroneously withheld. It would be unconscionable to terminate benefits without a pretermination formal hearing in the face of this brutal need. b. court still as to address it. o Statutory Entitlement Is Property Interest Statute creates property right.Bierschbach 31 . o What Process Is Due? Court says statutory “fair hearing” provides recipient with full administrative review. fully deserved. impartial decision maker. • Question 1 Welfare Benefits Are Property government doesn’t even try to argue that welfare benefits aren’t property because AG knows not politically popular to make that argument. so no property interest here. If the welfare recipient prevailed at the formal hearing. Plaintiffs argue that entitled to hearing before benefits are terminated not after. Much of existing wealth in this country takes for of rights that do not fall within traditional common law concepts of property. Here O’s reputation has not been injured. can bring attorney. to the recipients they are essentials. • Balancing Test For Determining What Procedures Are Due Where does court get these procedural requirements from? Court draws them from some preexisting concepts of notice and opportunity but must be balancing between what you’re taking away from the person and the administrative cost of the procedure requiring government’s interest in conserving fiscal. Kelly (1970) Due Process Requires Pre-Termination Hearing • Facts Welfare recipients challenged NY procedures which sought to terminate their welfare without a formal pretermination hearing.based on religion for example. to marry. and to worship god. a pretermination opportunity to submit a written response. to engage in one’s occupation. • Individual Rights + Social Welfares – Reich it is more realistic today to regard welfare entitlements as more like property than a gratuity. Extent to which individual is entitle to procedural due process is largely influenced by extent to which would suffer loss. or maybe decided we’ll win on question two. Roth (1972) • Facts Roth hired as professor by Wisconsin State University for one-year term and wasn’t rehired at end of term. When Is Process Due? Board of Regents of State College v. and a post termination opportunity for a formal oral hearing. and in no sense a form of charity. court cites article and in end concludes that welfare benefits do constitute property. o Liberty liberty interests embrace the pursuit of happiness: the right to contract. The procedure was written notice. administrative resources. • Question 1 No Property Interest In Employment After One-Year Term Court says this is not about your need to keep your employment but about whether you have a statutory entitlement to that specific employment. Social security no longer regarded as luxuries or gratuities. Even though government doesn’t argue it. Property interests are defined by whether there is independent legal entitlement. There is no state law saying you have right to employment past one year term of contract you signed. it’s also not clear that because you can’t fire because of someone’s religion.
Court says can’t have unilateral property right. but step from an independent source. • Question 1 o Liberty Does she have liberty interest here? Not traditional liberty right to contract. Husband kidnaps kid and murders the child and then commits suicide. Not just statute or regulation but can be informal practice or custom. Argued that this really was tenure. Government may not deny a benefit to a person on a basis that it infringes his constitutionally protected interest. issuing a press release setting forth allegations of insubordination. Police had duty to use all reasonable means to enforce the restraining order. requiring that he be given an administrative hearing before board decides not to renew. • Sindermann + Roth In Sindermann there is provision in faculty guide saying that basically has tenure. Perry v. especially his interest in free speech. Suggested that if worked 7 years would continue to renew. Not endorsing he thought have right then have property interest. • School PolicySchool policy says has no tenure system but that faculty should feel that has permanent tenure as long as teaching satisfactory etc. Court says we do not believe that the provisions of Colorado law truly made enforcement of the restraining order mandatory. So he was entitled to oral hearing to prove his allegations that failure to renew was based on exercise of his free speech. Because well established tradition of police discretion exists with mandatory arrest statutes. there was an informally system of tenure that gave him a “property’ interest in continued employment. This is not merely his expectation that had tenure but court takes into account objective evidence of his legitimate claim of entitlement. Sindermann (1972) • Facts Sindermann was involved in a public disagreement with the Board of Regents. and police deprived her of entitlement to that right by not enforcing restraining order. o Property Second. Town of Castle Rock v Gonzalez (2005) • FactsGonzalez gets restraining order against her husband and asks police to enforce it.Bierschbach 32 . Court says all these things gives him chance to get him over hump of question 1. • Dissent Dissent says restraining order says that this “shall enforce” language was put in Administrative Law . o Property Did Colorado law give Gonzalez a property interest in having restraining order enforced by police? Gonzalez claims that state establishes property right and that she can’t be denied enforcement of that right without some kind of hearing. such as state law. Property interests are not created by the constitution. so property right created by school policy. the individual must have more than a unilateral expectation to it. He must have a legitimate claim of entitlement.• ExplanationIn order to have a constitutionally protected property interest. Sindermann brought 1983 action alleging removal was in retaliation for exercise of his 1st amendment rights. • Question 1 Yes Property Interest In Tenured Employment Is there property right? o LibertyFirst the court held that if the Board’s failure to renew Sindermann’s contract was in retaliation for Sindermann’s exercise of first amendment rights. Here P had no legitimate claim to reemployment after his one-year term. that action would be an unlawful infringement of constitutionally protected “liberty” regardless of the fact that Sindermann lacked tenure or a contractual right to renewal. • Sindermann’s Expectation Is court endorsing idea that Sindermann thought would get reappointed and had job security and therefore he has property right? No. to marry etc. Must be some objective evidence of legitimate claim of entitlement. court considered Sindermann’s claim that despite the absence of a formal tenure system at the college. In Roth it was one year contract with no right to renew or implication of renewal. protected by due process. and so the Board voted not to renew his contract. Gonzalez claims that she had a liberty and property right. She was denied enforcement without some kind of hearing.
Statute doesn’t even say they have to be rightly charged or charged on sufficient evidence. Administrative Law . Who has stronger claim? o Statute A Is this liberty or property interest? Statute says have right to continue employment and can only be dismissed for cause so this triggers property interest under Roth. right to marry. Also includes reputational harm so great that impinges on liberty. So they were meant to be mandatory statutes. Lots of things clear monetary value that wasn’t doing because she got this restraining order. But if state wants to rewrite statute not to give a right then not court’s problem. We don’t trust sates to apply procedure fairly when taking away rights. Substantive Right + Procedural Safeguards Can argue that there is property right in both because the only distinction is the process that entitled to rather than the actual property right. government employment. No Property B the way the law stands now a state could get away with the wording in statute B so that doesn’t give property right. Well if she didn’t have right to enforcement she could hire private protection maybe she would move. But as defined by scope of procedure city gives doesn’t seem to be real property interest. Maybe more mandatory than traditional property rights. Yes Property B there is substantive due process. This is argument Rehnquist made in dissent in Laudermille where statute in A seemed to grant property right. Sindermann says claim of entitlement could be based not just on state or federal law but also on government’s customs. • Yes Property A. Can argue that can take away procedural safeguards because government • Yes Property A. right to worship. But property doesn’t include subjective expectation. install alarms. o Property traditional property interests are land.” Statute B says “civil servants have right to continue employment unless and until state sends them written notice charging them with misfeasance. work shorter hours. Maybe there is no property interest here. Generally courts say if you’re protected in your employment and can only be dismissed for cause then that is property right. but not completely mandatory.Question 1 Analysis Is There Life. But property also includes Do you have legitimate claim of entitlement to something? New property rights include welfare benefits. right to contract. different house. or nonfeasance. Liberty Or Property Interest Being Taken Away? o Liberty Roth says liberty includes traditionally recognized concepts. HYPO Property Interest Depends On State LawTwo different sate statues? Statute A says “civil servants have right to continue employment unless and until misfeasance or nonfeasance. Scalia majority responds “property” usually means something with ascertainable monetary value. • REVIEW . policies or well established practices. disability benefits. must have some ascertainable monetary value. The role of courts is to provide an independent check on the procedures states use to take away substantive rights. o State B Is this property interest? State can simply send them letter saying charging you with malfeasance and they’re fired.Bierschbach 33 . Breyer and Souter don’t go so far as to say you have property interest in a process. but if reworded it wouldn’t have conferred property right. Then goes on to say that permanent employees can be dismissed without a hearing if employee fails to perform up to standards of job. Not every scheme that impacts private interests creates a property right. so doesn’t give right to her. There is clear sharp line between the substantive scope of a right and the procedural safeguards of that right that the statue ensure. o Property? does he have property right here? If just look at statute seems like he has property interest because employment with for cause termination. Roth says whether have property rights depend on the state’s law. • • HYPOCity Defines For Cause Employment City ordinance defines policemen as permanent employees.restraining order because police weren’t enforcing them in domestic violence cases. Police is fired and sues saying he is entitled to hearing. So if state establishes a property right courts have to make sure those procedures are fair.” Civil employee is dismissed and argues entitled to oral hearing. malfeasance. Property usually something that has ascertainable monetary value. or tangible personal property. Employees shall be terminable upon written notice from the state.
State argues look at the statute this isn’t property interest. But court says there is no evidence here that you won’t be able to get future jobs and suffer a stigma – no liberty interest. Recipient’s benefits are withdrawn without a pretermination oral hearing.• HYPO Property Or Breach of Contract City school hired part time coaches to work 20 hours per week for one year. Bierschbach says this probably would be viewed as ok today c. o Decision court says procedures provided were constitutional. Backs off robust procedural protections of Goldberg • • Question 1 Disability Benefits Are Property Clear after Goldberg if getting benefits and government is going to take them away that is property interest. State agency makes final determination. This is conceded. but that could seek post-termination hearing. decision based on record. it is reviewed by SSA. Says in bold “no individual entitlement. How Much Process Is Due? • • • Goldberg Hearing Requirement Majority in Goldberg said that all the requirements for a formal. Question 2 Do Procedures Satisfy Due Process The Procedures – someone who gets disability benefits has to fill out questionnaire with medical records and send to state agency for review. School hires Doris and doesn’t renew contract even though needs coach or next year. except for verbatim transcript and testimony under oath. Then recipient gets statement of proposed termination from state agency with justification.” Does Bert have right against reputational damage? o Liberty? The more serious the reputational harm + difficult of getting a job then courts will be more likely to hold that this is liberty interest. Posner dissent says this is just breach of contract claim. Mathews v Eldridge (1976) Balancing Approach For Determining Whether Procedure Was Sufficient • Facts Eldridge awarded disability benefits in 1968. Roth says I’m being fired and people will think that I’m a troublemaker. HYPO Liberty – Reputational Harm City issues statement that “Bert is active shoplifter. 1972 after reviewing her completed questionnaire and reports from her physician the Social Security Administration informed her that disability had ceased and offered her the opportunity to submit additional information. and if SSA approves termination it becomes effective after two months.Bierschbach 34 . right to bring lawyer. and principal doesn’t give reasons. trial type hearing must be conferred to a welfare recipient prior to termination of welfare payments. Then informed benefits were terminations. HYPO State Defines Scope of Right Congress replaces welfare scheme and instead provides block grants to states telling them to use the money in any manner reasonably calculated to accomplish purpose which is to move people off welfare to getting a job. o Property? Court here says property interest because had interest in second year. Goldberg says must have pretermination hearing with: oral hearing. notice and explanation for termination. Contract will be renewed so long as work is satisfactory and services are needed. Roth says states define property rights. Court says that this interest is not so great as compared with Goldberg Administrative Law . Recipient has opportunity to response in writing. Is every contract terminated early in breach of contract procedural due process violation? One consequence of Roth is that maybe they do. If principal decides services not needed must explain to coach in writing. cross examination. written decision with explanation. Court says to determine whether process is sufficient balance three things: (1) Individual Interest the private interest affected by the government’s action Individual Interest Affected Eldridge has interest in keeping his disability benefits. that he’s being ostracized and excommunicated then he has stronger claim to liberty interest.” This statute shall not be interpreted to entitle any individual to any monetary assistance under the terms of this program. impartial decision maker. But if Bert can show that it will be more difficult for him to get hob in town.
so under Matthews would be constitutional. poor and uneducated would have lots of difficulty in filing written pleadings. HYPO Machine Determines If Welfare Recipients Capable of Getting Job There is machine that determines with 100% accuracy by doing a brain scan whether someone is able to get a job.Bierschbach . I = $55 P=2. It doesn’t seem that the risk of error is so high. 1997) • Facts Chicago changed way to contest parking tickets saying if challenge ticket in person. Matthews narrows sphere of values of procedural due process. Court mentions – in response to Goldberg . At some point the costs of additional procedures outweigh the benefits.38. Guy sues saying violates procedural due process. Brennan wrote that one of things that made Goldberg problem is denied important procedural participatory values that citizens entitled to when trying to makes case to government. P claims this violated procedural due process because can’t cross examine the police officer. Government’s interest in avoiding the additional fiscal and administrative burdens of giving this extra process is greater than the benefit. • Posner’s Mathematic Formulation Posner says if Individual Interest (I) x Probably value of additional procedural safeguard (P) outweigh Burden to government (B) = then win on procedural due process grounds. Government removes hearing requirement and says everyone will be machine tested to determine eligibility. Value of Oral Pre-termination Hearing – if allowed oral hearing doesn’t seem like it will add much. police officer not required to appear.5% chance of increased accuracy = $1. and the probable value of increased procedures. Court focuses on Eldridge here who has money and not general category of disability recipients. Maybe more claims granted because natural human tendency to sympathize with injured person.where he needed the money to pay rent. not true in disability case. could be psychological.. As a general matter look at category of people affected and not person in front of court. • Distinguishing Goldberg Disability ordinarily can be determined accurately upon assessment of medical reports rather than evaluating truthfulness and credibility of witnesses. Risk of Error And Probable Value of Additional Procedural Safeguards what is the Risk of Error? SSA is evaluating medical issue and is reviewing documentation submitted by Drs as evidence. o Additional Value of Procedures here there is no probability that more procedure would be more accurate. Court makes assumption that disabled people aren’t as desperate as poor people because people only entitled to welfare if have no money. They look over the x-rays. the risk they pose for erroneous deprivation. And on top of that recipient can submit further written documentation to argue they are entitled. (3) Government’s Burden government’s interest is need to protect its finite fiscal and administrative resource Government Burden the financial and administrative costs of requiring a formal pretermination hearing could likely be substantial. • Assessing Accuracy + Risk of Error How do we know what accurate disability determination is? Let’s says studies show oral hearings result in more benefits being granted. (I x P > B). In welfare. (2) Risk of Error And Probable Value Of Additional Procedure the procedures utilize. if have oral hearings could cross examine Drs bring your own in. Question is 35 Administrative Law . whereas disabled people can get disability regardless of how much money they have. not 100% disability purely medical condition. But maybe due process requires more than just accuracy of procedural value. lab tests and Dr reports which goes to issue of eligibility. Can probe errors in written report. Goal of Accuracy v Participatory Value Mathews assumes that accuracy is the overriding goal. But on other hand. doesn’t mean correctly decided. And when close case gives to P. because most of evidence is documents. Is that persuasive that oral hearings should be taken into account in second factor? No doesn’t mean more accurate.we’ve seen what cost of constitutionalizing these procedures will be and it wasn’t good. • • Van Harken v City of Chicago (7th Cir.
000 challenged in person. Court says what process is due? requires notice of basis of classification and fair opportunity o rebut government’s factual assertions but not entitled to full trial.$1. This is what courts wind up trying to do. And how do you get from that to these precise requirements? Where do those come from? Seems they are kind of just making it up. • • Due Process Sum Up Question 1 Old distinctions between right v privilege is dead. Matthews test is repetitive presumably agencies or congress already did this balancing when decided what procedure to provide. Also ok if presumption in favor of government o Balancing Test How does court get to those requirements from Matthews test? They say weighty and sensitive government interest in time like this is the burden. Triggering Formal Rulemaking • Rulemaking Procedures The APA and the agency’s organic statute drive rulemaking procedure. Judicial Balancing v Agency Balancing This is example of Judge trying to do balancing. They generally have ongoing investigations and monitor areas where have jurisdiction (2) Private Citizens Constituents and Lobbyists can complain and write letter to senator Administrative Law . and the APA has procedures for when agency engages in rulemaking.000 parking tickets challenged. Due process is not at issue. . formal and informal. They don’t’ really say much with P. Argues that he should at least have some procedural opportunity to challenge his designation as enemy combatant. One criticism is why just tell courts to redo what political branches have already done. which triggers presidents power to hold him this way. but only 67.38 more than 67. but maybe agencies are in better position to do this type of balancing. Probable Value of Additional Procedural Safeguards – Added Value of Officer Appearing Court is weary of whether or not having the officer appear even benefits the contestant. Or protected liberty interest – courts look to judicial decisions carving out fundamental rights – like education. Maybe if need someone to make it up as check on other branches better to have judiciary do it. • • Hamdi v Rumsfeld (2004) • Facts US citizen captured in Afghanistan and held as enemy combatant given no opportunity at all to challenge detention or designating as enemy combatant. They seem to be mostly worried about a tourist being accidentally detained. and custom. They have better access to information. AGENCY RULEMAKING AND THE APA a. and how to go about it. Plus if have no procedure the marginal value of additional procedures is high. existence of protected interest is determined by some reference to federal statues. Question 2 Matthews balancing test is the law IV.Cost Of Having Police Officer Appear Court calculates how much it costs to have officer appear at every hearing. P the value of these procedures. state laws. The balancing here is almost impossible to do. Must have some legitimate claim to property. Takes a couple of hours for officers to attend = city would have to hire 67 full time officers a year. • Rulemaking Process How does rulemaking start? Who influences rulemaking> (1) Agency agency can say this is in pubic interest we should change it. although it is important for adjudication. Individual interest is liberty. 200. • Government Burden . The organic statute tells the agency what to do. We want to make sure that those kinds of people aren’t erroneously detained and there is some value in that Risk of Leaving Balancing To Government Maybe don’t always want to leave it to elected branches.000 police officers time.Bierschbach 36 . At end he says this is obviously less than government’s burden no due process violation. • Court Court balances Matthews test and says clearly private at stake is liberty which is great. How do you put weights on liberty and the burden. Posner says a little strange to make constitutional procedure depend on math.
procedure. then give interested persons opportunity to participate via written hearing. o Notice + Opportunity to Comment § 553(d) Two major requirements of informal rulemaking are notice and opportunity to comment on rulemaking. RR challenged rule on grounds that this was formal rulemaking and §556 and § Administrative Law . reference legal authority. Evidence. Almost the equivalent of trial. or good cause not to. general statements of policy.for a full and true disclosure of the facts. and can have a committee hearing where they call agency and say this is within your statutory mandate so make rule. this subsection does not apply (A) to interpretative rules. and cross examination. (3) Legislature Legislature can write a statute giving agency power to regulate in a certain area. unnecessary. and to conduct such cross-examination as may beinclude . Finally congressional subcommittee tells them you need to make a rule now. and give the proposed substance of the rule. and nature of public rule making proceedings. Oral Hearing If Statute Does Require Agency Hearing If statute requires that rules be made on the record after opportunity for an agency hearing then §556 is triggered and party is entitled to present his case by oral or documentary evidence. APA 553 RULE MAKING APA § 556(d) Hearings. ICC conducted two oral hearings on different occasions and couldn’t come up with suitable law. when a party will not be prejudiced thereby. Record As Basis Of Decision (b) General notice of proposed rule making shall be published in the Federal Register. Must state the time place and nature of the rule. or rules of agency organization. submit rebuttals. or contrary to • HYPO Rulemaking Process Under APA Agency wants to make a rule. US v Florida East Coast Railway (1973) • Facts Interstate Commerce Commission (ICC) promulgated rules designed to provide an economic incentive to RR to promptly return boxcars to their owners. Agency has to issue decision based on record and initial decision made by ALJ. and (3) either the terms or substance of the proposed rule or a description of the subjects and issues involved.Bierschbach 37 . (2) reference to the legal authority under which the rule is proposed. or (B) when the agency for good cause finds (and incorporates the finding and a brief statement of reasons therefore in the rules issued) that notice and public procedure thereon are impracticable. o Publication of Notice of Proposed Rulemaking § 553(b) First agency has to publish notice of proposed rulemaking in public register. no legal overlay. Powers§And Duties. to submit is entitled to present his case are named and either personally served or otherwise have actual notice thereof in accordance with law. Burden Of Proof. A partyunless persons subject thereto or defense by oral or documentary evidence. o Interested Persons Opportunity To Participate § 553(c) Written HearingIf Statute Doesn’t Require Agency Hearing if the statute doesn’t require rule to be made on the record after opportunity for agency hearing. or practice.to make a rule. after hearing” promulgate various rules affecting use of boxcars. adopt procedures for initial licenses an agency the time. (4) President can call agency and say I want you to address this topic via rule as part of my policy agenda. so ICC makes a rule without oral hearing first. Unless interpretive rule. how should they go about doing it? First they must see if they have authority under their enabling statue. Except when notice or hearing is required by statute. The Interstate Commerce Act provides that the ICC “may. Can send letters everyday and they have to read it. place. “interested persons” means anyone interested. The notice shall required rebuttal evidence. In rule making or determining claims for money or benefits or applications (1) a statement of may.
So court says unless congress explicitly tracked language of APA then we’ll give agencies a lot of freedom to make rules with lot less procedural constraints. thereby frustrating judicial challenges to agency action. and didn’t know what talismanic language to use that would trigger formal rulemaking requirements. Judge Friendly argues that ICC statute “After hearing” language actually did require trial type evidentiary hearing. § 556 and § 557 were not triggered because statue only said after hearing. What Does Statute Require When Says “Hearing” RR tries to argue that Interstate Commerce Act says after hearing so that requires oral hearing regardless of what APA says. just because not in formal rulemaking under APA doesn’t mean the enabling statute or the due process clause doesn’t require more procedure. Two Important Points Of Case (1) Must Track Language of APA For Formal Rulemaking This interpretation frees up agencies to do a lot of informal rulemaking because formal rulemaking is not triggered unless enabling statute tracks that language of APA. Idea of notice is to fully appreciate and be aware of and have chance to respond to all aspects of proposed rule relevant to substance and validity. The Rise and Fall of Hybrid Rulemaking • Interplay Between Rulemaking and Adjudication as a result of East Coast Railway most agency ratemaking is through informal. Courts would require opportunity to comment meaningfully which means agency had to disclose everything. Lengthy proceedings with oral hearings and cross examination not always necessary and takes too much time. Policy Issues With Decision As a matter of statutory interpretation this may not be a good decision because APA passed 50 years ago and enabling statutes were in existence way before then. o Lawyer’s Tip Even though formal rulemaking not triggered under the APA. Court concerned that formal rulemaking wastes money and is not always necessary. ICC tries to invoke this exception that the RR won’t be prejudiced. so it is only a paper hearing. doesn’t mean trial type proceeding.Bierschbach . Rehnquist says hearing under the act means hearing entitled to when make a general rule. Development of Hybrid Rulemaking Prior to Vermont Yankee many courts insisted that agencies promulgate their rules via “hybrid” procedures which were less than formal trial type procedures of § 556 and § 557 but more than informal notice and comment procedures. o Court Court says this was informal rulemaking.557 apply. (2) APA Not Only Procedural Constraint On Agency Rulemaking Must consider all procedural constraints on agencies. 38 • • • • • • Administrative Law . APA definition of rule includes setting rates. • • Is This A Rule? Yes? Ratemaking is clearly rulemaking. Must track language of APA precisely to trigger formal rulemaking. This frequently results in the absence of an agency record for purposes of judicial review. so oral hearing not required. District court says Florida was prejudiced so rule is invalid. b. notice and comment procedures. §556 + §557 not triggered. Formal Rulemaking Triggered If Statute Says Rules Must Be Made “On Record After Opportunity For Agency Hearing” Supreme court says that § 553 applies as this was informal rulemaking. Functional Considerations For Informal Rulemaking formal rulemaking procedures are often counterproductive and may not get to accurate result. legislative. and didn’t say on the record after opportunity for hearing. can still argue that based on language of enabling statute oral hearing is required. Exceptions To § 556(d) Oral Hearing Requirement § 553(d) says agency can dispense with hearing requirement if people won’t be prejudiced. And adopt procedures for submission of evidence in written form.
AEC instituted rulemaking proceedings to asses the environmental consequences surrounding spent nuclear fuel. If on appeal. Courts would end up saying that this is not permissible. While agencies are free to offer greater procedural opportunities. and impossible for agencies to comply they need notice of what procedures must be. trial type proceedings. there will be no clear test for agencies to follow. (3) Constitutional Constraints – Constitutional due process may require more procedural opportunities than those specified in APA. an electric utility. • • • • PROBLEMS . The NSDC rejected issuance of a license. Courts Can’t Require More Procedural Requirement Than APA the APA expresses the maximum procedural requirements that congress was willing to have the judiciary place upon agencies. This is hybrid rulemaking basically taking § 553 proceeding and trying to make it more formal. AEC did not offer the opportunity for formal. Once the rule is validly established the only issues left for court to review in enforcement proceeding is application of the rule – whether the rule applies to this plaintiff.Procedural Requirements for Agency Adjudication and Rulemaking After Florida East Coast 1. when the rules are applied and challenged the plaintiff can challenge the underlying validity of the rule. Hybrid Rulemaking Environmental groups were pushing for more procedure than APA required. Industrial concedes that Administrative Law . but not as formal as formal rulemaking. courts are not free to insist that they do. like Londoner then court can require more procedure. applies to the Environmental Protection Agency (EPA) for permission to discharge heated water into a nearby river. Vermont Yankee Nuclear Power v. and there is no way for court to do that if don’t have a record to review. o Criticism Many criticized that need meaningful review of what agencies are doing. Industrial. Courts can’t impose additional constraints. Want to make sure agencies not being lazy or actions misguided. all the agency has is a 20 page statement by one guy in support of their rule – a bare bones record – then judge can remand back to agency to explain itself and that it respond to comment. Exceptions To VT Yankee (1) Quasi-Judicial Determinations – if the agency is deciding a controversy involving a small number of persons. DC court granted their request. They wanted opportunity for oral hearing with cross examination of government’s evidence. (2) Changed Procedure – if the agency makes a totally unjustified departure from settled agency longstanding procedures. o Reasons (1) Unpredictable – if let courts just impose what procedures they think is required.• Challenging Rule After Passed another way that courts tried to review rulemaking was to say that though there are not a lot of procedures going into making the rules. technical or involve “issues of great public import?” Court says No. or (4) Exceptionally Compelling Circumstances. Natural Resources Defense Counsel (1978) • Facts VT Yankee sought permits from the Energy Commission to build nuclear power facilities. but offered de minimus procedures specified for informal rulemaking under § 553.Bierschbach 39 . organic statues and the APA. (2) Court Abusing Power – if there is no real guidance for agencies then courts can invalidate rules when don’t agree with them based on procedures that were supposedly required. Don’t want to allow court to make policy decisions. Courts Can Still Review For Arbitrary and Capricious Rulemaking you don’t need to impose procedural requirements to make sure agencies are not making rules improperly. Courts can still review rulemaking to see if arbitrary and capricious in violation of due process. EPA’s enabling statute prohibits the discharge of any pollutant unless the discharging entity has obtained a permit from the EPA. each of whom are exceptionally affected on individual grounds. • Issue may the judiciary insist that federal agencies offer procedures beyond those expressed in the APA where the substantive issues under consideration are complex. or it can strike for being arbitrary and capricious. Supreme court says circuit courts can’t do this – agencies are constrained by their own rules.
Administrative Law . This panel submits a report finding that Industrial had met its burden of proof. Others say go statute by statute no presumptions look deeply into each statute. Jury is still out on what triggers formal adjudication. and without any further oral hearing. Other courts defer to agencies reasonable resolution. Industrial appeals to the Administrator of the EPA. The ALJ denies Industrial’s request for a permit. Can argue that reasoning of Florida East Coast only applies to rulemaking and not to adjudication.” can demonstrate to the satisfaction of the agency that the EPA’s standards are more stringent than necessary to protect aquatic wildlife. Trigger is a little easier because it is adjudication. and they were entitled to opportunity to cross examine that new evidence. are permitted to offer evidence and cross-examine one another’s witnesses. o Does Florida East Coast Apply to Adjudication? – Not Necessarily Does Florida East Coast requirement that enabling statute track language of APA exactly to trigger formal rulemaking requirements? There is a fourway circuit split on this question. (2) What process is due? Even court did say this was property interest. Traditional public hearing usually means oral hearing with ability to probe the other side. Rehnquist says don’t ever really have oral hearings for legislative type determinations only have paper hearings so more evidence to think that no formal hearing required there.” The language here “after public hearing” does not trigger application of formal adjudication requirements of oral hearing.its discharges do not meet EPA’s effluent limitations. Entitled To Hearing Under Due Process (1) What is interest here? Company argues this is property right interest in entitlement to permit. who assembles a panel of six in-house advisers to assist with his technical review. Has the agency acted unlawfully? What are Industrial’s best arguments? Entitled To Hearing Under APA • Adjudication or Rulemaking?This seems like adjudication that deals with license under APA definition. Some courts say presumption in favor of formal hearing. Instead. the Administrator grants Industrial’s permit request. a) Is Company Entitled To Public Hearing? Industrial’s permit request is denied without a public hearing. Since permit not granted yet there is no hearing under due process. You are the lawyer for Save the River. probably apply balancing interest test and wouldn’t need formal hearing. If not granted then not taking away property. § 556(e) says that agency can only base its decision on the record that has been developed below. But here we are dealing with adjudication and adjudicatory facts with this company in particular who what where when why determinations. “after public hearing. Entitled To Hearing Under Organic Statute company can say that statute requires “public hearing” which denotes a true public hearing with an open forum where can voice concerns. Presumption for adjudication is you do have hearing – so read language more loosely to trigger § 554 formal adjudication requirements. b) A public hearing is held before an ALJ at which Industrial and a local environmental group. it seeks an exemption from those effluent limitations pursuant to § 316(a) of the enabling statute. Argument is formal proceeding says can only base decision on record that has been developed. Relying on this report. others say presumption against but just a presumption can overcome even though magic words don’t appear. • Formal or Informal Adjudication? Is it formal or informal adjudication? Florida East Coast says informal adjudication unless enabling statute tracks language of APA § 554 saying “on the record after opportunity for an agency hearing. Can argue that agency looked outside the record. But important point is that courts don’t think Florida East Coast applies to adjudication. which requires a permit to be issued to any discharging entity who. Save the River. Has the agency acted unlawfully? What are your best arguments? In Formal Proceeding Agency Can Only Base Decision On Record Below First argument is that this is formal adjudication so § 556 and § 557 apply. The rationale is that there are different presumptions and different constitutional considerations.Bierschbach 40 .
VT Yankee interpreted not to overturn these disclosure requirements. But if proposed rule is on subject A and agency issues final rule on subjects D and C. collects comments from interested parties. After Vermont Yankee. through adjudication. a) The rule is based on information that the agency failed to disclose in the NPRM. the question of whether its effluent limitations in general are more stringent than necessary to protect aquatic wildlife. Unlawful? No Oral Hearing Required § 553 § 553 doesn’t require an oral hearing and judiciary can’t impose those requirements on agency especially after VT Yankee. i. what are your best arguments? No Proceeding Required Save the River would probably lose. shall be made available to the parties. to an opportunity to show the contrary. a party is entitled. whether to relax its nationwide effluent limitations? From the information you’ve been given. and then issues a rule. c) The rule differs in its subject matter from the proposed rule described in the NPRM. e) The rule contains a “statement of basis and purpose.” as required by § 553. Court says it must be logical outgrowth of proposed rule. c) Same facts as b). refuses to hold oral hearings prior to promulgating a new rule. Chenery says SEC was allowed to do this. 3. 2. despite the fact that the information was already in the agency’s possession at the time the NPRM was issued. but the agency failed to initiate a new round of notice and comment based on the new information. Unlawful? When Renotice RequiredCourt usually says agency must renotice when new information is so significant that original notice didn’t adequately frame the issue so that people could comment meaningfully. d) What if EPA decides to resolve. except that the enabling statute makes no reference to a “public hearing. Unlawful? d) The rule differs in some of its substance and details from the proposed rule described in the NPRM.§ 556(e) The transcript of testimony and exhibits.Bierschbach • 41 . together with all papers and requests filed in the proceeding. This statement fails to respond to some important questions raised during the comment period by Administrative Law . an agency. must it provide an oral hearing? A decision “on the record”? Can Make Rules Through Adjudication EPA can decide whether to change their general permit standards through an adjudication. acting pursuant to § 553 of the APA. This would be defective because courts still tie into comment provision this requirements. on timely request. Unlawful? Must Disclose Evidentiary And Analytical Documents Relied Upon Connecticut Light and Power interprets § 553 to require an agency to disclose all evidentiary and analytical documents they rely upon. which have nothing to do with proposed rule then it is invalid. because not even required to do public hearing. b) The rule is based on information that came into the agency’s possession during the comment period. acting pursuant to § 553 of the APA. Otherwise agencies would have to renotice over and over again as new info came in and it would be burdensome. If the information doesn’t change all that much then don’t have to give new notice. When an agency decision rests on official notice of a material fact not appearing in the evidence in the record.e.. Agency Doesn’t Disclose Information In Notice of Proposed RulemakingAn agency. on payment of lawfully prescribed costs. So final rule is not invalid if doesn’t look like proposed rule. issues a notice of proposed rulemaking (NPRM). constitutes the exclusive record for decision in accordance with section 557 of this title and. Unlawful? When Rule Different From Proposed Rule the final rule doesn’t always look like the proposed rule because if they did then that means agency not taking any of comments into account. so no constraints on what evidence can take into account. This is true despite the fact that VT Yankee says courts can’t make agencies do more than what APA requires. can it do that? If it does.” Now does Save the River lose? Again.
specifically that in NRC’s notice of proposed rulemaking. they didn’t clearly specify the technical basis relied upon for formulating proposed rule. the agency shall incorporate in the rules adopted a concise general statement of their basis and purpose. Must Disclose Technical Basis For Proposed Rule NRC’s notice of proposed rulemaking failed to indicate or explain the technical basis on which it had relied in selecting the proposed rule. • No Reversible ErrorCourt finds that the notice was ok. This requirement survives Vermont Yankee. • § 553(c) “After consideration of the relevant matter presented. This explanation will assure public confidences in the rulemaking process. The agency still must publish the rule in the federal register. Unlawful? Statement of Basis And Purpose Agency is required to explain itself. Reviewing court will decide whether or not it adequately responded to the major comments it received. or contrary to the public interest. procedure or practice. Disclosure of the agency’s rational is important in order that reviewing court may fulfill its statutory obligation to determine whether the agency’s choice of rules was arbitrary or capricious. it is to be a process of reasoned decision-making. interested parties will not be able to comment meaningfully upon the agency’s proposals. Has Hybrid Rulemaking Risen Again Connecticut Light & Power v. but by the skin of their teeth. d. it was widely understood that these technical studies were driving the whole debate on fire protection and they were subject to criticism beforeand. unnecessary. o Opportunity to comment is meaningless if parties don’t know what supposed to be commenting on. it should explain the general bases for the rules chosen. Exceptions To APA § 553 • APA Exceptions To Notice And Comment § 553 requirement of an opportunity for notice and comment does not apply to (1) interpretative rules. Agency’s Explanation of Rule while agency need not justify the rules it selects in every detail. Agency commits serious procedural error when it fails to reveal potions of the technical basis for proposed rule in time to allow for meaningful comment. or (3) rules of agency organization. Opportunity For Interested Parties To Participate In Meaningful Way The process of notice and comment rulemaking is not to be an empty charade.Bierschbach . which includes the requirement to respond to major comments. Procedures by NRC came dangerously close to foreclosing useful participation in rulemaking process. Also the rules adopted differed in many respects from the proposed rule. If the notice failed to provide an accuracy picture of the reasoning that has led the agency to the proposed rule. (2) general statements of policy. One particularly important component of the reasoning process is the opportunity for interested parties to participate in a meaningful way in the discussion and final formulation of rules.important industry or public-interest groups. Court don’t find a reversible defect in this case because even though agency didn’t disclose it technical studies. and anybody involved in proceeding would have known. NRC (1982) • Facts Nuclear Regulatory Commission (NRC) establishes rules governing fire safety for nuclear power plants. o Interpretive Rules those that “merely clarify or explain existing law or regulations that are essentially hortatory and instructional. CT Light & Power objects to the program.” c. Otherwise agency will operate with one sided picture of the issue. and do not have the full force and effect of a 42 • • • Administrative Law . Important for agency to identify and make available technical studies and data that it has employed in reaching decisions to propose particular rules. or it just ignored them. but doesn’t have to solicit comments from interested parties. § 553(b) also authorized an agency to dispense with notice and comment when it “for good cause finds” it to be “impracticable.
1987) • Facts Congress mandated the creation of Peer Review Organizations (PROs) to oversee Medicare expenditures by doctors and hospitals. It’s just giving its explanation for what thinks term means. recognizing that strictly procedural measures may affect rights of parties. however it is not decisive. Ask the following questions. cannot be imposing rights and obligations and (2) must leave the agency and its decisionmakers free to exercise discretion. Cir. if answer yes to any then it is substantive legislative rule. but it’s prospective and a little tentative. Most substantive rules will also be interpretive rules in sense that they are explaining what statute means. The contract terms between HSHS and the PROs requiring hospitals to meet enumerated substantive standards were rules and regulations concerning goal setting and thus considered mere statements of policy. obligations or interests.C. HHS promulgated regulations concerning the organization. But a lot of statements of policy have practical effect of deeply effecting private interest. Court rejects substantial impact test concerning agency procedural rules.o o substantive rule. such that company buying airline gets airlines licenses. The existence of a substantial impact from the rule does not preclude a court from a finding that the rule is interpretive. It is a general prediction this is how we plan to apply law. • Present Binding Effect Test a rule is not an interpretive rule or general statement of policy if (i) it has a present effect on food producers. including accidents and illness within 10 days. Procedural Rules this includes actions that do not alter the rights or interests of parties but merely alter the manner in which parties present themselves or their viewpoints to the agency. American Hospital Association v Bowen (D. • • American Mining v. Procedural Rule + Statement of Policy Exception to APA Notice and Comment the agency rules and regulations regarding PROs are procedural in nature and thus exempt from notice and comment requirements..C. American Hospital just says if it affects private interest this it is a substantive rule. (1) No Adequate Legislative Basis For Enforcement Whether in absence of rule there would not Administrative Law . MSHA passes rule with notice and comment saying operators have to report specified instances. General Policy Statement general policy statement (i) must not have a present effect. o Statement Of Policy court says a statement of policy doesn’t establish a binding norm. Cir. 1993) Legal Effects Test • Facts Mine & Safety Health Administration (MSHA) has statutory authority to make rules for mine safety including authority to require operators to file reports.Bierschbach 43 . American Hospital Association v Bowen. Mine & Safety Health Administration (D. explaining what illnesses must be reported. o Court Court says PPLs are not substantive rules they are interpretive. activities and enforcement power of the PROs without notice and comment procedures under the APA. The PROs would contract with the Department of Health and Human Services (HHS) to review the performance of the doctors and hospitals. o HYPO FAA Approval For Sale Of Route FAA statute says airline that sell license to fly particular route to another airline has to get FAA approval. since they merely organize the PROs and did not impose direct substantive obligations on the hospitals. • Legal Effect Test If the interpreted rule has a legal effect then it is substantive. FAA decides not involved enough in M & A with airlines so interpret statute to mean where there is sale of controlling block of shares. Statement of policy doesn’t bind agency. Interpretative v Substantive Rules Interpretive rules merely clarify whereas substantive rules actually impact rights. Interpreting what it means to “sell a license” so interpretation with a substantive effect. Then agency issues PPL without notice and comment. A rule saying unfair trade includes not putting octane levels on pumps sounds like interpreting what unfair trade means but also affecting substantive right station owners. Court may consider the agency’s characterization of its own action. and (ii) the agency and its decision makers are bound by the regulations. must get FAA approval. because it’s not a final determination of issue or rights. but are in the form of an explanation of particular terms.
if it treats the document in the same manner it treats a legislative rule. Cir.” • Dissent Pronouncement is legislative only if it retains force of law in future proceedings. so can just point to that language and enforce it. but it also can be amended as a clarification. (2) Published in Federal Register Whether the agency has published the rule in the Code of Federal Regulations. FDA established action levels concerning adulteration providing food procedures with the maximum allowable levels of unavoidable contaminants.Bierschbach 44 . Present EffectCourt says this rule was binding on private parties. 1987) • Facts FDA authorized to bring court actions to condemn interstate shipment of food that is “adulterated”. o Court FDA action levels are binding legislative rules subject to notice and comment of § 553. but probably means we will. Since the FDA must still prove product is adulterated in an enforcement proceeding. FDA has even made several statements that the action levels are a binding on food producers and also considers it necessary for food producers to secure exception to the action levels How To Determine If Rule Is Binding Appalachian Power (D. FDA did not establish the action levels under notice and comment provisions of APA § 553. Binding on Agency Rule says agency expects to bring enforcement actions based on these levels. • Present Binding Effect Test 1. Cir. (3) Invoked Legislative Authority Whether the agency has explicitly invoked its general legislative authority (4) Amends Prior Legislation Whether the rule effectively amends a prior legislative rule. 2000) if the agency acts as if the document issued is controlling in the field. What makes rule binding? It imposes penalties. and all agency has to show is that you came with in statement X then it is a rule. Community Nutrition Institute v Young (D. Maybe it was amended to add additional content to the rule. Generally agencies issue policy statements in part to give parties some of notice and industries would prefer to get policy statement before hand . action level alone does not have force of law. if it bases enforcement action on the policies or interpretations formulated in the document. and rule is interpretive Agencies Will Stop Issuing Policy Statements one worry is that if start to say that agencies have to follow these burdensome procedures just to give guidance to the public. Federal register includes only those things that have become final rules. but passed legal effects test so not substantive.C. If agency can go to court and say you violated X. Court here says more clarification because was reporting requirement and this just fleshed it out more • PPL Not Substantive Court says yes it effected the interests of private parties and seems to impose new obligations because it said will be penalized if violate PPL. then the agency document is for all practical purposes “binding. Can expect could mean maybe we wont. • Air Transport v DOT (1991) Procedural Rules • Facts FAA promulgates a rule without notice and comments establishing a schedule of penalties Administrative Law . Here there would be an adequate legislative basis because the regulation says you have to report illness. Producers challenge saying this is substantive rule and have to go through notice and comment.C. But if agency ahs to show you violated the statute and give reasons why the violation should be upheld then it’s a statement of policy. they might retreat and make policy through pure adjudication instead where parties won’t have a heads up about what they are required to do. If agency doesn’t want it to be binding on parties they can say it’s just guidance 2. if it leads private parties or states to believe that it will declare permits invalid unless the comply with the terms of the document.be an adequate legislative basis for enforcement action or other agency action to confer benefits or ensure performance of duties.
Or where lower court overruled objections that should have been sustained o Clearly Erroneousreviewing court will overturn when lower courts findings are clearly erroneous. FAA says this is procedural rule.Bierschbach . Courts look to impact on parties and agency. Overview. o § 702 Right of Review Person is entitled to review if he suffered a “legal wrong” within the meaning of statute. like negligence. And Review of Agency Factual Findings • Standards of Review Questions of law and fact call for different standards. If you’re just looking to see whether something alters or effects rights then this would sweep in too many procedural rules to be treated as substantive. o § 706 Scope of Review Reviewing court shall decide all questions of law – this sounds like 45 • • • V. Scope of Review i. according to the provisions thereof. o Abuse of Discretiononly overturned when court abuses its discretion. Usually applies to jury determinations. the legal effect test. • This “Procedural Rule” Substantively Effects Rights Court explains that this really changes what defendants will have to go through in defending themselves and will effect their rights. This is the spectrum of review from least deferential standard to most deferential. and feels bound by it itself. Also if statute must be passed to get something done in time. or adversely affected or aggrieved by agency action within the meaning of a relevant statute. § 701(a) This chapter applies. how much it binds the agency. (Bierschbach likes this one). Dissent Dissent says that if the rule is controlling conduct involved in the presentation of your case then it is procedural.and rules governing how adjudication will be conducted. o De Novo questions of law are generally de novo review. APA Standards of Review § 701 – § 706 o § 701 Presumption of Review there is a presumption that judicial review is available unless the enabling statute precludes judicial review or it committed to agency discretion. o No Review reviewing court has no jurisdiction to review the findings of the lower court. except to the extent that . is entitled to judicial review thereof. JUDICIAL REVIEW OF AGENCY ACTION a. Best guidance is Appalachian Power if agency treats private parties as if rule is binding. The real question is whether this rule is a substantive rule. o No Rational Fact Finder reviewing court will only overturn if no rational fact finder could have found the fact at issue – he was speeding. Party has right to notice and hearing (administrative adjudication) before being forced to pay a monetary penalty under due process and APA. § 702(a) A person suffering legal wrong because of agency action. Court says no it is substantive. or (2) agency action is committed to agency discretion by law. Usually applies to mixed questions of law or fact. reviewing court does not need to defer. Good Cause Exception if giving notice + comment would allow public to immediately evade what agency trying to do then not necessary. • Administrative Law .(1) statutes preclude judicial review. But if it controls primary conduct outside of the courts in the real world then it is substantive. Notice and comment will be required where the rule substantially affects a civil penalty defendants right to an administrative adjudication. notice + comment not necessary SUMMARY There is no clear rule for when these exceptions will be invoked and upheld by courts. The overarching question is not whether it is interpretive rule. or statement of policy or procedures. then it is substantive rule.
or immunity. or limitations. Courts have “arbitrary and capricious” as requiring same inquiry as required by substantial evidence test. (C) in excess of statutory jurisdiction. The reviewing court shall— (1) compel agency action unlawfully withheld or unreasonably delayed. Findings of fact shall be conclusive if supported by substantial evidence on the record considered as a whole. Employer petitions for judicial review and court finds that not enough facts to support retaliation finding. capricious. privilege. As technical matter substantial evidence doesn’t apply but courts just say that arbitrary and capricious imports substantial evidence standards. • Factual Dispute In Formal Adjudication this is a classic factual dispute. Mere uncorroborated hearsay or rumor is not substantial evidence. In making the foregoing determinations. authority. and NLRB ordered employer .” Court says substantial evidence means look through whole record and look at evidence on both sides and say in light of all the evidence is there substantial evidence supporting the agency’s decision. Employer argued that NLRB’s conclusion was not supported by substantial evidence. and conclusions found to be— (A) arbitrary. and due account shall be taken of the rule of prejudicial error. Substantial evidence is more than mere scintilla. if case were before a jury. power. no reasonable person would have concluded that 46 • Administrative Law . the court shall review the whole record or those parts of it cited by a party. Universal Camera (2d Cir. findings. courts must evaluate the whole record in its entirety.de novo review. not merely those portions on which the agency relied. interpret constitutional and statutory provisions. 1950) • Facts NLRB reversed the hearing examiner’s findings that employee was discharged for insubordination. and determine the meaning or applicability of the terms of an agency action. It is such evidence as a reasonable mind might accept to support a conclusion. The hearing examiner found that the employee was not discharged for union activities. In determining whether an agency decision is supported by substantial evidence. the reviewing court shall decide all relevant questions of law. It is such evidence as would be sufficient to justify a refusal to direct a verdict. Substantial Evidence – Standard of Review For Agency Fact Finding standard of review for agency fact finding is substantial evidence. • Substantial Evidence Standard Applies To Review Of Fact Finding In Formal Rulemaking + Adjudication The substantial evidence standard is embraced by § 706(2)(E). • NLRB v. (E) unsupported by substantial evidence in a case subject to sections 556 and 557 of this title or otherwise reviewed on the record of an agency hearing provided by statute. and appealed to board within the agency and board reverses and says this was retaliation. an abuse of discretion. It applies to review of formal rulemaking or formal adjudication (where proceeding is subject to § 556 and § 557 or otherwise “on the record”).Universal Camera to reinstate the employee who they said was fired because of his involvement in union activities. or (F) unwarranted by the facts to the extent that the facts are subject to trial de novo by the reviewing court. § 706(a) To the extent necessary to decision and when presented. But § 706(2)(A) still applies to fact finding in informal proceedings and says that reviewed for arbitrary and capriciousness. or short of statutory right.Bierschbach . (B) contrary to constitutional right. or otherwise not in accordance with law. Court explains that we cannot say that with all these circumstances before him. Substantial Evidence Standard Also Applies To Review Of Fact Finding In Informal Rulemaking + Adjudication APA §706(2)(E) only applies to formal rulemaking and adjudication. (D)without observance of procedure required by law. and (2) hold unlawful and set aside agency action.
contrary evidence could be ignored and the agency decision could be sustained. (2) Could Reasonable Fact Finder Have Reached Conclusion when deciding whether test met or not ask whether a reasonable jury could have reached that decision. What Remains of Substantial Evidence Standard Substantial evidence standard is somewhere between clear error and no rational fact finder. If it is policy matter want to take reading of board over examiner – look to 47 • • Administrative Law . then defer to board. irrespective of how heavily the countervailing evidence may prevail. both sides. give his decision due weight. experiences examiner who had observed the witness and lived with the case has drawn conclusions different from the agency Board than when he has reached the same conclusion. Only overturn board’s decision if no reasonable person could conclude that retaliatory. (2) Standard of Review Is Between Rational Fact Finder + Clear Error as question somewhere between no rational fact finder test – could any rational fact finder find in a way that agency did. including evidence opposing agency board’s view. • Old Substantial Evidence Rule if substantial evidence was found toe exist anywhere in the record. if substantial evidence existed there. If case where ALJ would have better sense of the facts. (3) No Special Weight To Hearing Examiner In doing that don’t give any special weight to what hearing examiner found. neither should they be ignored. o Criticism Supreme court says when congress added in language “on the whole record” means must look at contrary evidence as well. (1) Look At Whole RecordSubstantial evidence means look at whole record both pros and cons. And for reviewing court examiner’s report is part of the record to be considered in determining whether agency’s decision is supported by substantial evidence. when viewed in light of entire record. (3) Hearing Examiner Determination Part of Record Although hearing examiner’s findings should not be conclusive by an agency. tough court never fully rejects no rational fact finder standard. Universal language suggests clear error. Universal Camera (US 1951) • Facts Supreme court overturned 2nd Circuit ruling that employee should be reinstated in accordance with agency board’s findings that his firing was retaliatory. and if enough evidence to support agency board’s findings. Court says ALJ hearing examiner’s determination should be considered as a factor – examiner report is part of the record. This approach gives no special weight to what hearing examiner found. NLRB v. experienced etc.employee’s testimony was one of the causes of his discharge. o Deference to Agency Board give deference to board because knows how competent examiner is. How Much Weight Give To Hearing Examiner Court says defer more to examiner when he is impartial.Bierschbach . but Mack used rational fact finder. o Hand’s Approach look to record as a whole. so that courts could merely examine one side of the case. so court must look at what examiner did. Reasons For Deference o Deference to Hearing Examiner if examiner impartial and experienced give more weight. Evidence supporting a conclusion may be less substantial when an impartial. And if there is a difference of opinion court should look closer. Standard For Considering Contrary EvidenceA reviewing court is not barred from setting aside a board decision when it cannot conscientiously find that the evidence supporting decision is substantial. Supreme Court’s Approach Substantial Evidence Test After Universal Camera (1) Look At Whole Record look at whole record. Give deference because examiner better at judging credibility of witnesses in front of him. And clear error test – was this finding clearly erroneous. both in favor and against what agency decided.
and Mack refused. In Chenery agency interpreted standard of fair and equitable. Union brought unfair labor charge before NLRB and NLRB found Mack guilty based on objective considerations that union continued to have support of majority of bargaining employees. Question of Law Or Fact Reasonable Doubt Of Majority Status? Argument That Agency Board Should Have Gotten More Deference (1) Board Closer To Facts can argue board had the facts. Not going to go through entire record. • Issue were the NLRB’s findings of act supported by substantial evidence on the record as a whole? ALJ and board say that Mack did not have a good faith reasonable doubt about majority employee’s union support. Board ignored lots of testimony from employees that they didn’t want the union to represent them. Breyer Dissent says yes agencies can make policy through adjudication. Would look at what jury believed and if that’s enough done. Acme appeals seeking judicial review.nature of question and defer to board if question of law. Did other employee’s witness this? Was witness indicted for perjury? If evenly split between two. Standard of doubt is policy making not fact finding it is an interpretive question. (2) Policy Decision Should Be Left To Board Whether Mack met the standard of “good faith reasonable doubt of majority status” is a law.Bierschbach . Board Did Not Consider Contrary Evidence NLRB raised every presumption against the employer and in the favor of the union’s position reviewing the evidence court finds that there as substantial evidence supporting the fact that the employer had a reasonable doubt as to the union’s support. Lot of good reasons especially when policy concerned to defer to board over hearing examiner. It did hold an independent secret ballot of the employees. Allentown Mack v National Relations Board (U. assuming nothing else in record shows jury crazy. Agency might think 20% against union is not sufficient. ALJ and NLRB board both find that Acme engaged in unfair labor practice. Maybe agency needs latitude here to make policy judgments so board to get deference • HYPO What It Means To Look At Both Sides of Record NLRB conducts unfair labor practice proceeding and charges Acme with intimidating employees out of forming union. They can’t say standard is more stringent now than what they were saying it was all along. Problem is agency has too much discretion to change their minds 48 • • • • Administrative Law . Rather agency than court interpret legal standard. o Reviewing Jury Finding – More Deferential If jury finding then court of appeals more likely to uphold because more deferential to jury.Chenery Chenery says that agencies can make policy in the guise of adjudication. Scalia says more complicated than Chenery because here the agency is not consistent in some places they say doubt and in other ratchet up meaning of doubt. and that there was no substantial evidence to support to the contrary. Union asked Mack to recognize it as the collective bargaining representative of the employees. Court says no substantial evidence supporting finding as employer had good faith reasonable grounds to doubt union’s retention of majority support. Employee testifies that president called meeting and said “if you join the union you will be fired” also left union member voodoo dolls with pins. Also if defer to board more predictable and reduce burden on courts because less people will appeal. Here agency could have issued rule saying presumption that no doubt until clear and convincing evidence to contrary. witnesses in front of him and can better gauge credibility and what really happened. must know what Acme’s testimony is. o Reviewing Court Must Look At Both Sides Will federal court of appeals hold uphold decision? Can’t decide just based on those facts. Rulemaking Through Adjudication . Employees didn’t think that union had support.S. but need 40%. 1998) • Facts Mack hires 32 employees to work at factor. which the union lost. Look to record as a whole and weigh both sides is substantial evidence test. The agency should be permitted to determine what is permissible to meet that legal standard that they set. but defer to hearing examiner if question of fact. At holiday party president said if join union you won’t get Christmas bonus. court of appeals would affirm the agency’s finding.
Bierschbach 49 . and defer somewhat. industry custom. dictionary. but the courts have long said that some questions of law are for some agencies to decide. legislative history. It is not the task of the court to substitute its judgment of factual questions for those of the agency if they are supported by evidence. and no guidance for courts who will be unable to determine if agency adhering tot heir laws. Hearst refused to bargain arguing that newsboys were not employees under the act.about what doubt means. • • Law For Legal. Factual. the reviewing courts’ function is limited. if arguing that court should defer to ALJ then frame question as question of fact. if supported by substantial evidence. Supreme court looks to history of the term employee and purpose of the legislation to ascertain the meaning of the word employee. Example – Are Newsboys Employees? Administrative Law . If court confused that agency changing mind about meaning then maybe remand for them to explain • Lawyer’s Tip If arguing that court should defer to agency try to frame the question as a question of law that implicates policy making authority. whose meaning is disputed 1. Legal Question legal question exists where the only dispute surrounds the meaning of a statutory term Mixed Question of Law And Fact includes cases in which there is some dispute over the propriety of the agency’s findings of raw facts and their application to statutory terms. Here the application of the statutory term “employees” to these facts should be upheld if they have support in the record and a rational basis in law. ii.What Does Employee Mean? o Mixed Question of Law And Fact where the question is of specific application of a broad statutory term in a proceeding in which the agency administering the statute must determine it initially. Example . the findings of the agency. o When Should A Court Defer or Give Weight To An Agency’s Determination of A Legal Question? NLRB v. o Legal Question issues of statutory interpretation are for the judiciary to resolve. giving appropriate weight to the initial legal determinations of the agency. are conclusive. but were independent contractors. With respect to these legal questions courts will defer to the agency’s judgment overturning the agency only if its legal determination is unreasonable. and says that employee doesn’t include newsboy. cannons of construction. o Maybe ok for agencies to make rules through adjudication so long as consistent and open about what those standards are. Boundary between questions of fact and law are blurry. statutory purpose. Court of appeals independently evaluated the issue and found that newsboys were not employees within meaning of statute. Statutory Interpretation OptionsHow should court go about defining employee? Court can look to case law. NLRB concluded that full time newsboys were employees under the National Labor Relations Act and certified the union. committee reports. & Mixed Questions o Factual Question in making factual determinations. Hearst Publications (US 1944) • FactsHearst refuses to bargain collectively with a union representing newsboys. • What Is An Employee? Statute doesn’t define employee. Review of Agency Legal Conclusions • • • Factual Question involves the review of an agency’s interpretation of raw facts as applied to a statute about whose meaning there is little dispute. common law precedent. and this causes no notice to regulated parties. impermissible or arbitrary. Court of appeals uses common law standards. To The Chevron Station • Legal Question APA instructs courts to decide all relevant questions of law. Ultimately court doesn’t say what employee is just says newsboy is employee.
didn’t set up fact finding body. If agency had brought an injunction then maybe more likely to defer. (2) Expertise (3) Political Accountability . submit comments. or interpreting the act. Administrative Law . o Policy For Deference The policies that usually justify deferral are not present in this case. Didn’t set up system where administrator could make these decisions. the validity of its reasoning. and agency determination is warranted in record and reasonable basis for it then courts should defer. Congress created office of administrator to do conduct research on when party is entitled to overtime. Less argument that political process will work well if defer because not binding on courts. This would get more deference because more well embedded process. while not controlling on the courts. if lacking power to control. So the administrator’s interpretations.Policy –There are essentially political choices and agencies will be politically accountable for these contentious policy decisions whereas courts will not be. (3) Political Accountability . When pass a rule. more than courts. (2) Agency Expertise – agency has expertise in this particular area. but not controlling” • Facts Employee of Swift brought an action under the Fair Labor Standards Act to recover overtime wages earned during the evening they were on call to answer fire alarms. The trial court decided as a matter of law the time spent by the employees in the fire hall does not constitute hours worked under the FLSA. so better at it. (US 1944) – WEAK DEFERENCE – “agency’s determination may guide courts. The weight given such interpretations depends on the thoroughness evident in its consideration. either congress. this is not a case where party challenging agency rulemaking or adjudication.Bierschbach 50 . by deferring court just effectuating congress’s intent. or agency • Facts EPA adopted regulation that defined each pollution emitting unit as a “stationary sources” thus any modification of the unit would require a permit.” This bubble concept allowed owners of plants to modify units within the plan so long as the total pollution emissions from the plant did not increase. (1) Congressional Intent – language makes clear that congress didn’t’ delegate this to agency. But can’t enforce through an agency proceeding. • Give Less Deference Where Agency Doesn’t Have Explicit Authority To Apply The Act The administrator can sue to enforce the act. and all those factors which give it power to persuade. and then decide newsboy is employee. Congress only allowed agency to go into court to make these determinations. or internal agency procedure for application of act. But here court does not defer to the administrator’s bullet which says this is overtime. • More Deference To Agency Determinations In Rulemaking Rather Than Adjudication If in the context of an adjudication agency decides that newsboy is employee. reflect a body of expertise to which the judiciary and litigants may resort for guidance. Administrator has power to bring injunctions against employers who do not pay overtime. Skidmore v. Chevron v Natural Resources Defense Council (US 1984) – strong deference. Skidmore doesn’t apply Hearst because (1) agency not party to action – the determination didn’t come from a formal adjudication or rulemaking. get input form newspapers all over country.interpretive bulletins are not binding so agency not really accountable. but doesn’t have primary responsibility for applying the act in the first instance. Here administrator filed an amicus brief citing his interpretive bulletin (practical guide) o No Congressional Delegation Hearst says for mixed questions of law and fact. (2) no congressional delegation to decide this – congress didn’t actually delegate to agency the responsibility of deciding these questions. will court give as much deference? Can argue that in adjudication hasn’t been as much public input as there would have been if agency passes a rule. o Administrator’s Involvement In Suit This case involves an employee suing an employer for back pay. Swift & Co. must bring case in federal court. EPA changed the regulation to allow states to define an entire plant as a “stationary source. Why Defer To Agency Interpretation? (1) Congressional Intent – congress created the agency to apply the Act and delegated to the agency the authority to interpret the act. its consistency with earlier and later pronouncements.
legislative history and purpose. (2) Clarity From All The Evidence – look at all the evidence. If however. as would be necessary in the absence of an administrative interpretation. religion. (2) Whether The Agency’s Answer Is Based On A Permissible Construction Of The Statute if the statute is silent or ambiguous with respect to the specific issue. and better to fill in the gaps than the courts. Supreme court. Cardoza Fonseca (US 1987) – SCALIA CONCURRENCE – SHOULD ONLY LOOK AT TEXT for STEP 1. Agency has been delegated the policy making ability and is at least a politically accountable body.” Is agency interpretation of discretionary deportation requirements correct. Mandatory suspension .Bierschbach . Do we want to defer if congress thought about it. but argument is that agencies are still experts. nationality or political believe. If the agency’s view is within the range of reasonableness. there is express delegation of the authority to the agency to clarify a specific provision of the statute by regulation. couldn’t come to agreement. look at whole body of law to see if fits in.didn’t consider question. • • • INS v. Does stationary source include an entire plant or just individual pollution. the court must give effect to the unambiguously expressed intent of congress. Did Congress Directly Speak To The Issue? How do we know when congress directly spoke to this issue? And whether intent of congress is clear? (1) Clarity On Its Face – can look to face of statute and see if clear. traditional tools of statutory construction. courts will defer. the court determines congress has not directly addressed the precise question at issue.Court of appeals held that CAA amendments didn’t’ allow EPA to permit use of the bubble concept because it would subvert the congressional goals of the CAA which was to reduce pollution. • Step One Whether Congress Has Directly Spoken To The Precise Question At Issue + Intent Clear 51 Administrative Law .INS required aliens to show “a clear probability of persecution” to prevent deportation. Courts working out. CHEVRON TWO-STEP TEST: Judicial Review of Agency’s Determination of Question of Law (1) Whether Congress Has Directly Spoke To The Precise Question At Issue + Intent Clear Whether congress has directly spoke to the precise question at issue? If the intent of congress is clear. Legal issue is is the EPA interpretation of stationary source a reasonable one. What does stationary source mean. dictionary etc and see if intent is clear. This is what Rehnquist cautions about in Benzene. Discretionary deportation . Agency Has Explicit + Implicit Authority To Fill In Gaps Stevens says if congress has explicitly left a gap for agency to fill in. • Then get to Chevron big change in law. that congress should really be deciding. the court does not simply impose its own construction of the statute. If we defer in these cases then allow congress to make wholesale delegation of political questions in violation of nondelegation doctrine. Do we really want to defer if congress didn’t think about it? Maybe worrisome. In such a case a court may not substitute its own construction of a statutory provision for a reasonable interpretation made by agency. o Why Defer To Agency Interpretation Rather Than Court’s? For whatever reason congress decided to leave this open . • Facts Immigration act AG is forbidden from deporting aliens under a finding that the alien’s “life or freedom is threatened” for reasons of race. didn’t make a decision and left it up to agency? Might encourage congress to do noting when confronted with sensitive political issues. EPA interpreting Clean air act amendment. Sometimes the legislative delegation to an agency on a particular question is implicit rather than explicitly. the question for the court is whether the agency’s answer is based on a permissible (reasonable) construction of the statute.Also INS can refuse deportation if “clear probability of persecution. wanted agency to do it – court says doesn’t need to know.
One clear line is in question one can only look at words and some external indications of what words mean. o In Deciding Question 1 Courts Should Only Be Permitted To Look At Text of Statute Scalia Concurrence worried that court may substitute its statutory interpretation after employing the traditional tools of statutory construction it will defer to agency interpretation only as a secondary measure when it is unable to construe the statute. • • MCI Telecommunications. Sweet Home (US 1995) • Facts Endangered Species Act made it unlawful for any person to “take” any endangered or threatened species. Do you need to be able to say no matter how hard we try we have no clue and then go to step 2 or do you say this can go either way this is our preferred view and then go to step 2. Best defense against this courts using question one in sneaky way is you can only look at the text.o Analysis Court says question is whether congress intended the standard to be identical (framing matters) and not whether intended them to be different. interpret them to have independent meaning. o Court’s Approach they go to dictionary and the context and purpose of act and say all this means secretary’s interpretation is reasonable. Ambiguity There are two different versions of ambiguity: (1) Sloppy Drafting . Not repudiating general idea of Chevron just saying step one is question for court to decide. Court doesn’t specify which ambiguity need to show in order for statute to be ambiguous.” DOI promulgated regulations defining “harm” to include modifying or degrading a habitat where it kills or injures wildlife. They can say yes congress addressed and it this is they’re intent.? Maybe but might just mean taking the animal not its habitat. Where is line between step one and two? As soon as start bringing in traditional tools of statutory construction lines between step one and two gets blurry now court is talking about well is this reasonable that is step two question. we will decide if statute is clear or not – deference doesn’t come in at this point. we don’t care what agency thinks.know something was meant. Looks like they’re in step two. Framing Of Issue If inquiry was whether congress clearly spoke to whether discretionary standard meant more likely than not.Bierschbach 52 . (2) Pure Ambiguity – pure ambiguity is where have no idea what was intended. totally up in the air. but if not clear then go to question 2. This gives them a lot of power to police entry point into deference. Cannons of Construction (1) interpret words of statute in light of works around it. • Step One Whether Congress Has Directly Spoken To The Precise Question At Issue + Intent Clear Is word take in statute ambiguous? Is it a taking of animal to chop down forest such that animal can no loner shelter or breed etc. then answer would have been no and case would have passed first test. This means court decides how to frame issue. but not clear and hard to figure out what was intended. One way to approach is to say look at take and statute and definition of term and say could go either way. Answer is that they didn’t mean them to be identical because language of statute is different – one says “well founded fear of persecution” and the other says “life or freedom would be threatened. (2) don’t interpret words to replicate words around them. 2. Illustration of how courts will approach Chevron question and how framing issue could make a difference • Court Decides Whether Congress Spoke To Issue Court says when it comes to step one in Chevron analysis. thereby avoiding having to apply the agency’s interpretation. Logging companies challenged regulation. v ATT (US 1994) Administrative Law .” Those are two different uses of language so clear that didn’t mean standards to be identical. Word “take” is defined by statute to include “harm. If ambiguous that should just end inquiry. Court looks to text and legislative history. Chevron In Action Babbitt v. If you can’t figure out by looking at text it’s ambiguous then you’re in step 2.
Stevens In Step Two Look At Statutory Policy. FCC relaxed the filing requirements for non-dominant carriers (in essence everyone except ATT). text doesn’t on it face foreclose this but don’t look deep into legislative history on this inquiry. o Cannon Of Constitutional Avoidance Bierschbach says statutory interpretation techniques similar. We must look beyond the statutory filing requirements to assess the statutory requirement behind the tariff filing. CHEVRON TEST REVIEW o Step One 53 • • • Administrative Law . not just confining itself to purpose of statute. Past Practices And Defer To Agency Stevens says even if the only dictionary definition of modify was “to make minor changes” more would be required to strike down the FCC’s decision to relax the filing requirements.• Facts US Code says all common carriers must file rate tariffs with the FCC. FDCA says FDA can regulate “drugs” defined as “article intended to affect structure or any function of the body. But court looks at FDCA as a whole and interprets statute in light of all surrounding provisions. because congress said FCC can only modify this stuff and modify means small changes. ATT petitions for review. plain congress has not give FDA authority seeks to exercise here. Its looking at entire regulatory scheme. Seems like this is clarity based on all the evidence Court Asserting Power court assumes that congress could not have intended to delegate a decision of such economic and political significance to an agency in so cryptic a fashion. Revision affects 40% of industry. History shows when congress wanted tobacco regulated did it by other means. As long distance competition became more open.” Tobacco companies objected on grounds that FDA did not have jurisdiction to regulate tobacco. FCC’s reading of statute is informed by a practical understanding of the role that filed tariffs play in the regulatory climate of industry. congress would not have wanted to ban tobacco. Therefore. but this change introduces whole new regime of regulation that congress didn’t establish. Clarity On Face or Clarity Based on All The Evidence? Is this clarity on face or all the evidence? On line because not clarity on face. Reading FDCA as a whole ad well as in conjunction with congress subsequent tobacco legislation. • Step One Whether Congress Has Directly Spoken To The Precise Question At Issue + Intent Clear question is does statute confer jurisdiction on FDA to regulate tobacco? Just looking at text it is not ambiguous.. Also if FDA were to regulate would have to ban outright because tobacco has no pharmacological benefit. Court considers the tobacco specific legislation congress has enacted over the past 35 years. If congress really intended FDA to regulate. as rate filings are essential to regulated industries. congressional intent is clear.Bierschbach . and concludes that congress did not speak to issue of FDA regulating tobacco. all other statutes congress has passed etc. FCC has ability to modify these requirements. congress can do so explicitly. • • FDA v Brown & Williamson Tobacco (US 2000) • Facts FDA promulgated regulations under FDCA regulating tobacco as a “drug”. This is huge assertion of power by court. Do we really want to allow deference when highly sensitive political questions involved? This is driving a lot of what court did here. didn’t think FDA had authority. FDA can regulate tobacco. Scalia says congress didn’t speak to issue of eliminating filing. and the FDA’s own view of what its jurisdiction was. which under FCC rule would be satisfied because market constraints on non-dominant carriers would obviate need for tariff filing. Issue is whether FCC rule is valid exercise of its modification authority? Step One Whether Congress Has Directly Spoken To The Precise Question At Issue + Intent Clear Is the word “modify” ambiguous? Dictionary definition of modify means “to change in a minor fashion” and not wholesale modification. Court goes way outside normal tools of statutory construction. FCC is allowed to make limited changes. In step 2 court says not reasonable interpretation and strikes FCC rule. Here the change is radical and fundamental. strikes at heart of common carriage section of communications act. Congress didn’t intend FCC to have such authority. Court strikes down wholesale delegation of major economic regulatory power as in Shechter Poultry to avoid nondelegation issues.
If Chevron suggests a two step test for the legality of agency interpretations of law. EPA interprets that to mean wetlands. DOL took the position that it could do so if the prior agreement specifically provided such a provision. If agency survives step one. • FDA v Brown & Williamson – O’Connor looks at statute as a whole. Should EPA be given deference under Chevron? No. having nothing to do with actual text of statute. If frame it that way have ambiguous question. Congress couldn’t’ have intended to give both agencies overlapping authority to interpret statute because of confusion that would result. Chevron applies. But Scalia says that Chevron test still applies. and legislative history of tobacco litigation in general. but court should decide the scope of EPA’s jurisdiction. Scalia thinks no distinction exists between what is a jurisdictional term. When Does Chevron Test Apply? o Agency Interpretation of Enabling StatuteChevron applies to agency’s interpretation of their enabling statute. then likely they will win. cannons of construction then court are doing statutory interpretation and never going to have situation where defer to agency. How does court frame the question? • FDA v Brown & Williamson . not going to defer to EPA. Chevron Step Zero • Step Zero What is Chevron’s scope? Does it apply to interpretative rules? litigating positions? these are the principle issues discussed in this section. this is for courts to decide. Wind up resting holding on bunch of reasons that don’t have anything to do with statutory text. o Agency Interpretation of Statute It Has Overlapping AuthorityWhat about statute that gives power to two agencies to administer? Banking statute that says two agencies to make rules in consultation. Instead framed it as question of jurisdiction “does statue confer jurisdiction on FDA” clear under 1 that it does not because congress passed bunch of other statutes etc. Step 2 Secret about step two is that court never strikes down agency interpretation under step two. o Agency Interpretation of APADoes Chevron apply to agencies interpretation of he APA? Did congress intend in passing to APA to give authority to agency to interpret it. Harris County (US 2000) Chevron Does Not Apply To Interpretative Rules Or General Statements Of Policy • Facts Harris county sought an opinion from Department of Labor as to whether it could schedule employees to use or take compensatory time (payment instead of overtime). whole code. Harris County imposed the requirement. For example if EPA interpreting statute that has to do with national labor. and employees sued on ground that no prior agreement under DOL’s Administrative Law .court didn’t frame it as “is tobacco a drug.Bierschbach 54 . 3. Point here is Chevron doesn’t apply if talking about statute that the agency has no responsibility to administer.o • What can you look at to determine if clear congressional intent or ambiguous? • Scalia says look only to the text of the statute. o Agency Interpretation of Jurisdictionmany courts hold that Chevron does not apply to agency’s interpretation of its own jurisdiction. His reasoning is that if you go beyond the statute and look at legislative history. the inquiry into Chevron’s scope might be taken to comprise a “step zero” in the form of an inquiry into whether courts should turn to the Chevron framework at all. Christensen v.” because that’s pretty ambiguous anything intended to effect structure of body. Even if agency changes its position. and if not clear then go to question 2. and defer. Lower courts don’t apply Chevron when agency determining scope of jurisdiction. Give deference to EPA when determining how to exercise its delegated power. Most courts say not going to give deference. looks at other provisions of FDCA as well. HYPO EPA Waters of The US CAA gives EPA jurisdiction over waters of the US.
don’t have to give deference see Skidmore? When Chevron cam down lots of people interpreted it as overruling Skidmore. But here court says that Chevron doesn’t even apply because this wasn’t notice and comment formal adjudication or rulemaking. Mead writes letter asking how they will be taxed in future. Here doesn’t apply because too ad hoc. agency change mind every day. or any other circumstance reasonably suggesting congress ever thought of classification rulings as deserving deference claimed for them here.interpretation. and doesn’t seem like congress intended for these rulings to have the force and effect of law. Court of appeals found that nothing in the statute or regulation prohibited employer from compelling the use of compensatory time. as by an agency’s power to engage in adjudication or notice and comment rulemaking. Policy + Criticism Court basically tells agencies if you want the power that comes with deference you’re going to have to jump through some procedural hoops. o Express Delegation express delegation of authority on particular question. What Chevron Applies To After Mead (1) Chevron Applies To Informal Adjudication or Rulemaking (Notice + Comment)Mead provides safe harbor for agencies. and Secretary of Treasury issued a ruling letter reversing the exemption status. Chevron provides that a court must give deference to an agency’s regulation interpreting an ambiguous statute.agency charged wit apply statute to make all sorts of interpretive choices.Bierschbach . This decision resurrects Skidmore and it is still good law. If they issue a rule through notice and comment rulemaking or adjudication then Chevron automatically applies (2) Chevron May Still Apply To Less Formal Proceedings Where Rule Has Force + Effect of Law Chevron might still apply in some less formal proceedings when think policies of deference especially present. • When Entitled To Chevron Deference? An administrative interpretation of a statutory provision is entitled to Chevron deference when it appears congress has delegated general authority to the agency to promulgate rules having the force and effect of law. Delegation of such authority may be shown in a variety of ways. The opinion letter here is neither a formal rule nor a formal adjudication subject to notice and comment procedures. Court Court says Chevron doesn’t apply because authorization and custom’s practice in making rulings doesn’t go through notice and comment process. o Implicit Delegation Sometimes legislative delegation to an agency on a particular question is implicit. but Skidmore distinguished itself from Hearst by saying administrator wasn’t delegated authority to implement rule through formal adjudication so it was just interpretive ruling. Assume congress contemplates administrative action with the effect of law when it provides for a relatively formal administrative procedure. Why didn’t court just say. 55 • • Administrative Law . and the agency’s interpretation was promulgated in the exercise of that authority. But on other hand this will force agencies to go through lengthy and costly notice and comment rulemaking which is inefficient and will slow things down. Also can imply from congress grant of rulemaking or adjudicatory power that congress would expect the agency to be able to speak with the force of law when addressing ambiguity in the statute or fills a space in the enacted law. • US v Mead (US 2001) • Facts Mead imports day planners. Between1989 and 1993 US customs treated them as under a tariff exempt form import duties. and rules more fair. • Does Chevron Apply To Statements Of Policy? Court says Chevron doesn’t apply to these types of opinion letters. Makes sense that Chevron overruled Hearst. giving public more input. and does not have the force of law. o Chevron Doesn’t Apply To Interpretative Rules Or General Statements Of Policy Is Skidmore Still Good Law? Under Skidmore court is not required to give deference to nonbinding statement of policy. Applying Chevron in these cases is good because forces agencies to go through notice and comment rulemaking. or by some other indication of a comparable congressional intent.
Gonzalez AG issues interpretive ruling.• What Are Rules That Have Force of Law? Court does make a lot of noise about Chevron only applies to rules that have force of law but doesn’t say what means by the force of law. so Chevron doesn’t apply – step zero case. like in Hearst where involved agency adjudication which is good evidence of congress’s intent to delegate power interpretation to agency. (1) is there ambiguity? (2) If so defer to reasonable construction on of agency. Only defer to agency interpretation that has force and effect of law. (2) To see if AG action fits into category two of Mead look to whether congress delegated power to delegate that rule and whether AG acted pursuant to that power. Mead (1) if agency action taken through notice and comment rulemaking or adjudication (formal and informal). If agency just changed its mind with no warning then have due process challenge. In end AG just doesn’t administer kind of authority to make medical judgments under this act that would be required to make this kind of decision. and court says this only includes informal notice and comment rulemaking and formal adjudication or rulemaking. No delegation not in Chevron framework. but here court Hearst doesn’t apply completely. Court says even if delegation in statute AG didn’t act pursuant to that delegation which required notice and comment.Bierschbach 56 . Skidmore not complete delegation. • Gonzalez • Facts AG issues interpretive rule saying allowing physician to prescribe lethal dose of drugs is not allowed by Federal Controlled Substance Act because not dispensing drugs for legitimate medical purpose. • • • • • • • Administrative Law . then agency interpretation subject to Chevron deference. Due Process Challenge Customs says you can import your stuff no tariff and then they say from now on tariff. Sounds a lot like step one analysis looking at language. Congress doesn’t delegate power to interpret to AG. Control is ambiguous word. No delegation not in Chevron framework. not through notice and comment rulemaking. For action to have force of law need to have congressional delegation and exercise of power pursuant to that delegation. only give deference to extent rule has power to persuade court. etc. Court says this is interpretive rule. then also subject to Chevron deference. (2) if agency action does go through notice and comment rulemaking. no notice and comment and not formal adjudication. As general matter congress didn’t want making medical judgments. Skidmore another mixed question. apply two-step test to see if court should defer. conferring with 5 individuals for medical judgments. Mead sue saying invalid exercise of agency authority why? Can never act arbitrarily under APA. statute says have to look at 5 factors no evidence and can really only do a lot of this in consultation with secretary of hhs. Provision in controlled substance act saying AG can promulgate rules relation to registration and control of manufacture distribution and dispensing of controlled substances. but was taken pursuant to a congressionally delegated power to act in that way and have the force of law. People think Skidmore not good law after Chevron. Control provision of statute not evidence of that delegation because that required notice and comment and AG didn’t promulgate pursuant. • Step Zero (1) AG action doesn’t fit into category one in Mead because interpretive rule wasn’t passed through notice and comment rulemaking. REVIEW Hearst says courts decide questions of law. Christensen says opinion letter or non-binding statement of policy is not subject to Chevron deference because opinion letters don’t trigger presumption that congress intended to delegate. but defer to agency on mixed questions of law and fact. To see if fits into (2) in Mead look to whether congress delegated power to AG to make that rule and whether AG acted pursuant to that power. Chevron whenever have agency interpretation of statute. These proceedings evidence congress’s intent to delegate interpretive authority to agency. Difference is process through which it has been run that’s what gives it force of law. so AG says I’m entitled to Chevron deference. though he has registration authority. Can challenge it on grounds of whether had notice and comment or not. but the process in which it was adopted. Not just talking about the legal effects of the law.
then agency would win in Chevron. policy like judgments or discretionary opinion. Is the agency’s process and its justification or rationale for its selection of a policy alternative that becomes the focus of this approach. but SCOTUS says you have to defer in this case (although the courts previous decision would still be relevant in the Step 1 part of Chevron). But if it didn’t like agencies. then it might defer. then we could say that whether or not court has acted. iii. Review of Agency Discretion And Policymaking – “Hard Look ”Doctrine • • • • • Arbitrary and Capricious Standard And The “Hard Look Doctrine” between the extremes of de novo review and strong deference to administrative decision making. Congress. then see if agency acted pursuant to a congressionally delegated power to act in that way and to have the force of law? This is Mead step two. and passes a regulation through notice and comment that requires farmers with runoff to get permit. This might fit in the review section of APA under arbitrary and capricious. o Remedy the normal remedy is a remand for further proceedings in which the agency may attempt to buttress its original policy choice with more extensive analysis and explanation. This really seems counter to Marbury. agency gets interpretation. Courts apply hard look to things in between. If yes.so if we follow intent. for agency legal interpretations do Chevron/Skidmore review. so isn’t it strange that the only thing that matters might be the order?) Policy (one of them) of Chevron is Congressional intent . (2) if no. HYPO Potential Challenges To LawEPA has authority over “waters” of the US and can regulate pollutants. Court may find the decision to arbitrary and capricious because it is not adequately explained or justified but the agency is free to try again. It has the effect of law. Courts seem a little confused by administrative law still. Marbury says courts say it. so it should be done via N&C. Can have rulemaking where say rule is invalid because didn’t go through right procedures and also invalid because exceed agency’s authority under the law. or maybe § 706(2)(C). Congress so far seems happy with Chevron. Is Chevron consistent with APA?Chevron didn’t even cite the APA.Bierschbach . then Skidmore applies and give deference to agency rules that are persuasive. o For agency fact finding in formal proceeding review is substantial evidence. As between Congress and the Courts. then they might not be happy that a agency is given so much law making power. Court gives probabilistic deference – agree with position if good reason to think agency correct. it doesn’t really give any powers to court from Congress. it depends on the politics about the time. (3) If no. Even if SCOTUS itself gave an interpretation. Can agency override the court? (if agency did it first. then Chevron framework applies. What are grounds for challenging this? 57 • Administrative Law .• Chevron + Step Zero Analysis (1) first see if agency action is notice and comment rulemaking or adjudication (formal or informal)? If yes then Chevron framework applies. Tension Between Chevron + MarburyIs there tension between Chevron and Marbury? Chevron says agencies say what the law is. Agencies Are Winners In Chevron Who wins and who looses? big winner would be the agency. under the APA they must be Notice and Comment. some courts have taken a “hard look” at the agency’s decisional process. while allowing the agency the discretion to determine policy. EPA interprets wetlands as waters. Rules that impose new duties and are basically legislative rules. In case like this where no notice and comment and can be characterized as legislative rule then can make the procedure argument too. Congress might be happy because now they can delegate away and to worry about it. You could have a case in which court says what statutory term means first. but Agency came up with an interpretation that was also reasonable. ensuring that they have considered all relevant issues and polices and taken a good look at the facts. Can Make Both Substantive + Procedural Challenges To Law Just because substantive aspects here can always make the procedural arguments. and then later agency says it means something different.
Challenge Legal Findings Can argue that wetlands are not waters within meaning of statute, and that EPA exceeded its authority. Court will apply Chevron Challenge Law As Arbitrary and Capricious Can also argue that this is arbitrary and capricious – fertilizer rule is weird and could have accomplished this through better method. This is in discretion of agency who has power to choose to implement their regulatory power. Hard Look Doctrine Applied-- Hard look is when evaluating what agency did, what studies relied on, how reached the decisions reached. Could mean take a look at procedures, making sure agency itself took hard look. Did it gather evidence, do testing, read comments, explain itself? But it could also be substantive, saying the court should look at the evidence itself and make sure agency decision made sense. The line between the two is not clear, and in the end it really means both.
Overton Park v. Volpe (US 1971) • Facts Secretary of Transportation authorized construction of an interstate highway through Overton park. Secretary made no formal findings explaining his decision and its consistency with federal statues, but provided litigation affidavits asserting that the decision was his and supportable by law. Federal legislation prohibited federal highway construction through public parts where “ a feasible and prudent alternative route exist.” • Arbitrary and Capricious APA requires reviewing court to overturn agency actions deemed to be arbitrary, capricious an abuse of discretion or otherwise not in accordance with law. Overton Park emphasized that his standard of review Is a narrow and that courts are not to substitute their judgment for that of the agency. In essence, one must prove that the agency’s action is without a rational basis, a difficult task to do. Standard of Review o § 701Presumption of Reviewability§ 701 subject to judicial review because no statutory prohibition on review and not committed to agency discretion by law. Narrow exception only applicable in rare instances where statues are drawing in such broad terms that in given case there is no law to apply. o § 706(2)(E) Substantial Evidence this is not formal adjudication or rulemaking, so doesn’t apply o § 706(2)(F) De Novo Review – Unwarranted By Facts de novo review of whether secretary’s decision was “unwarranted by facts” is authorized only in two circumstances: First when the action is adjudicatory in nature and when independent judicial fact finding when issues that were not before the agency are raised in a proceeding to enforce nonadjudicatory agency action o § 706(2)(A) Arbitrary and Capricious requires a finding that the actual choice made was not arbitrary, capricious, an abuse of discretion or not in accordance with law. To make this finding court must consider whether decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment. Although this inquiry into the facts is to be searching and careful, the ultimate standard of review is a narrow one, the court is not empowered to substitute its judgment for that of the agency. Overton Park Three Step Process For Judicial Review (1) Is Agency Acting Within Scope of Its Authority? the court construes the relevant statute to determine the scope and terms of the agency’s authority to determine whether the agency is acting within the authority conferred. The determination of the scope and terms of the agency’s authority determines the extent of the agency’s discretion if any. (2) Whether Agency Considered All Relevant Factors? If agency has discretion to choose among two or more courses of action, court decides whether agency exercised its discretion based on a consideration of relevant factors. What are secretary’s view of statutory terms “feasible and prudent?” Court didn’t say anything about what terms mean. It is a procedural problem if agency doesn’t explain, and can’t just offer post hoc explanation make up reasons after the fact have to explain as you were doing them like in Chenery. 58
Administrative Law - Bierschbach
Secretary didn’t explain whether considered feasible alternative route, statute requires secretary to decide whether feasible alternative route exists – and secretary offers no evidence. Court Remands Court remands and says we need procedural explanation based on what went into the decision at the time. Either (1) district court can look at everything that went into it, the whole record. But if it doesn’t exist or can’t get hold of materials, then (2) Can call in agency officials to testify to say what thought basing their decision on at time made it. Gives agency a change to go back and do it right. (3) If Agency’s Weighting of Factors And Course Chosen Were Arbitrary or Capricious Court will consider whether the agency’s weighing of the relevant factors and the particular course chosen were arbitrary capricious and abuse of discretion or otherwise not in accordance with law. What made secretary decide ok to put highway through a park. Why no feasible and prudent alternative route? Arbitrary + Capricious Arbitrary and capricious applies to whether feasible alternative route. Standard of review is substantial error, clearly erroneous, very deferential. Still require there be some rational connection between the evidence in record and agency’s’ conclusion. Agency can do whatever you do in terms of how procedurally deal with that stuff. But when comes time for substantive review you have to give an explanation. Court just saying we’re not doing your work for you supply that explanation. • Chevron Chevron is about coming in after fact and saying, is what agency did within range of reason. This case is about inputs, what went into decision at the time. Chevron was decided afterward.
Motor Vehicle Manufacturers v. State Farm (US 1983) • Facts NHTSA directs Secretary of transportation to issue MV safety standards that “shall be practicable, shall meet the need for motor vehicle safety, and shall be stated in objective terms.” NHTSA passed standards requiring seat belts, NHTSA amends statute to only require detachable seatbelts or airbags. Revision of rule is challenged as arbitrary and capricious. • Arbitrary and Capricious Standard normally agency rule subject to arbitrary or capricious standards, so rescission or modification of the agency’s action is subject to the same standard. The revocation constitutes a reversal of the agency’s former views as to the proper course. Therefore agency changing its course by revoking a rule is obligated to support a reasoned analysis for the change beyond that which may be required when an agency does not act in the first instance. Arbitrary and capricious standard applies to discretionary implementation of decision – this is pre Chevron. When Agency Rulemaking Deemed Arbitrary and Capricious Scope of review is narrow but agency must review the relevant evidence and provide a satisfactory explanation to its result including a rational connection between the facts and its conclusion. Agency rule could be deemed arbitrary and capricious if (1) the agency has relied on factors hat congress has not intended it to consider, (2) entirely failed to consider an important aspect of the problem, (3) offered an explanation for its decision that runs counter to the evidence, or (4) is so implausible that it could not be ascribed to a difference in view of the product of agency expertise. 1. Agency Failed To Consider Airbag Zoning Rule Agency decided passive seatbelts wouldn’t work, but did not consider a rule requiring only airbags. At the time agency did not address this option. Only after the fact did they say it would be difficult to fit in small cars, and bad PR to do it because expensive for car companies. This explanation is not something that court can uphold because agency didn’t say this at the time. 2. Too Quickly Dismissed Safety Benefits Of Automatic Seatbelts Agency never explained why didn’t consider non-detachable automatic seatbelts. Agency explained that there were some worries about being able to get out of car if drove into river. Only offered this explanation after the fact. 3. Court Takes Issue With How Agency Weighed This Evidence Would detachable seatbelts have had benefit or not. Court goes deep into agency’s view of evidence. This seems like substantive review as opposed to procedural review. Court says look maybe 59
Administrative Law - Bierschbach
weighted things wrong, view of evidence bad. That’s going pretty far says Bierschbach. b. Availability And Timing of Review i. Presumption of Reviewability + Preclusion of Review • Presumption of Reviewability § 701 § 701 Default rule is that there is presumption of judicial review. Even where the legislature has not explicitly provided for review, the absence of statutory authority for review is not interpreted by courts as constituting a problem. Only where there is a showing of clear and convincing evidence of contrary legislative intent should the court restrict access to judicial review. o Exceptions § 701 Exceptions to presumption of reviewability exist where (1) statutes preclude judicial review; or (2) agency action is committed to agency discretion by law. Statute That Precludes Judicial Review The presumption in favor of judicial review is strong, but statutes can preclude it. Congress might in enabling statute say we create agency A to do Z, and when it does Z it’s not subject to judicial review. Must be clear and convincing evidence in statute to preclude review – statute must explicitly say so though court sometimes find that it says so implicitly.
Block v Community Nutrition Institute (US 1984) Implied Preclusion • FactsAgricultural marketing Act authorized Secretary of Agriculture to issue milk market orders establishing minimum provides processors must pay producers for milk. Consumers challenged Secretary’s decision that higher price applied to reconstituted milk arguing made it uneconomical for handlers to process, and deprives consumers of source of less expensive milk. Statute empowers milk hinders to challenge way prices were set through agency process. Can consumers sue? • Implied Preclusion - Presumption of Review Overcome – o Look Beyond Express Language Of StatuteWhether and to what extent a particular statute precludes judicial review is determined not only from its express language, but also from the structures of the statutory scheme, its objectives, its legislative history, and the nature of the administrative action involved. o Must Exhaust All Statutory Remedies First Statute required handlers first to exhaust administrative remedies made available by the agency. After these formal administrative remedies have been exhausted, handlers may obtain judicial review of secretary’s ruling in any federal district court. The structures of this act indicates that congress intended only producers and handlers, and not consumers to insure that the statutory objectives would be realized. Illogical Wouldn't make any sense for congress to set up an elaborate scheme and at the same time allow consumers to go straight to court without participating in this process and let court make final decision when scheme for exhaustion of administrative remedies that applies to handlers. Supreme Court Supreme court says should have looked at scheme as a whole and wouldn’t make sense to give consumers. Classic illustration of implied preclusion from statutory scheme. Court says would defeat exhaustion requirement to give this to consumers. If handlers and consumers can just get together.
Bowen v Michigan Academy of Family Physicians (US 1986) Presumption of Reviewability • Facts Secretary of health issued regulation granting higher reimbursement levels from Medicare to family physical’s who were board certified than to those who were not board certified. Drs brought suit to challenge the regulation, arguing that distinguishing between board certified and non board certified physicians violated 5h amendment of Medicare act. Statutory scheme says can review decisions for challenging reimbursements under part A inpatient services, but doesn’t say anything about reviewing for part B outpatient services. • Challenging Regulation Itself Rather Than Determinations Made Under Regulation court distinguishes between challenging the method by which such amounts are to be determined rather Administrative Law - Bierschbach 60
Urged FDA to provide warning labels and prosecute those who intend to use drugs for human execution. iii. That’s because only going to be able to challenge it once. Where statues is drawn in such broad terms that in given case there is no law to apply.than the day to day reimbursement determinations themselves. They petitioned FDA. What does it mean for something to be committed to agency discretion by law? It means that there is absolute no law to apply. since the effectiveness of the agencies and the ultimate goal of national security depends on a reliable and trustworthy workforce. Says some areas like reviewing national security and executive decisions is not judicially cognizable – courts stay out of it. therefore no judicial review. o Strength of PresumptionPresumption is strong where challenging a regulation. Chaney (US 1985) rebuttable presumption of unreviewability when agency fails to initial enforcement proceedings(just like prosecutorial discretion not to indict). The director must have complete termination discretion to ensure the integrity of the agency’s employees. ii. No law to apply to this specific statutory claim o Policy the structures of the NSA and CIA suggest that termination decisions were committed to agency discretion. license. Webster v. EPA) • Facts Respondents were sentence to death by lethal injection. FDA commissioner refused to act on the enforcement requires. No Legal Standard no legal standard by which to measure agency action. Thus although agency action may be committed to its discretion by law. Nature of the claim matters. If he deems it to be national security threat. Functional View – Certain Areas Courts Don’t Get Involved In courts take a holistic view and don’t get involved in these decisions because of not good policy and for functional reasons. may terminate the employment of any officer or employee whenever he shall deem such termination necessary or advisable in the interest of the US. • Committed To Agency Discretion By Law Government says yes this is completely committed to agency discretion by law. or the equivalent or denial thereof. b. gives so much discretion that no standard by which to test legality. “in his discretion. but if no legal standard by which to measure legality of agency action then can’t review this. Statute says in his discretion when he deems it he can fire. 61 • • Administrative Law . Problem of Agency Inaction Heckler v. or failure to act” APA says failure to act counts as an action. Webster make that claim specific test. Presumption that can challenge validity of regulation under statute which has to do with general method of calculation.Bierschbach . but NOT FOR initiating rulemaking (Mass v. Much less doctrinal view of no law to apply and functional view of areas in which doesn’t make sense to get court involved Constitutional Claim Is Reviewable court says this his constitutional claim is reviewable. review is permitted where the agency abuses its discretion. NSA provides that director of CIA. • Agency Inaction Is Action how can they petition for review of inaction? § 551(13) “agency action” includes the whole or a part of an agency rule. Exception To Reviewability – “Committed To Agency Discretion By Law” • Committed To Agency Discretion By Law § 701(a)(2) APA allows judicial review except to extent statute precludes review or the agency’s determination is committed to its discretion by law. claiming the drugs used for injection were not approved for use in human executions and FDA was required to approve the drugs as safe and effective for human execution. Doe (US 1988) • Facts Director of CIA terminated employee because he was gay. Test For When Committed To Agency Discretion Two different views of what “committed agency discretion means” that come out of case : a. there is no way for case to review that. sanction. order. relief. Can review broad standards.
Agency decision not to enforce requires the presumption that judicial review is not available. Reviewable By Courts? Is This Reviewable? In case of wholesale abdication Bierschbach thinks courts will get involved. In compiling list EPA should consider 10 factors. So maybe you can get review of decision not to enforce. Policy involves research allocation agency expertise in determining not to enforce. areas that courts normally protect. costs and likely success of the enforcement. of those reasons not going to review FDA decision here. such decisions require a high level of agency expertise and coordination in setting priorities. Prosecutorial Discretion Third. Regulatory agenda will be guided by people guided to sue and not public interest. not to enforce are not coercive. Agency Expertise First. Functional Analysis here says no reviewability looks to 701(a)(2) committed to discretion by law. Assuming administrator applied guidelines and found dump not to be so bad. Court is saying decisions not to enforce more broadly concern because thousands to them every day. May be question of volume rather than qualitative difference in decision. such nonenforcement decisions are akin to prosecutorial decisions not to indict. How To Rebut The Presumption This presumption may be rebutted by showing that the substantive statute provides guidelines for the agency in exercising its enforcement powers. o Administrator Not Listing Any Dumps On List Statute hs these guidelines. the agency in such situations will not ordinarily be exercising “its coercive power over an individual’s liberty or property rights. Major policy decisions about how to use resources. Chaney The Chaney court relied on 3 features of nonenforcement decisions in arriving at presumption of unreviewability 1. or at least that’s the implication. Ordinarily the discretion of a prosecutor whether to initiate enforcement action has been shielded from judicial review. o Not Coercive agency refuse to enforce does not generally result in a coercive power over an individual’s liberty or property rights. o Agency Best Situated For Determining How To Use Its Resources agency decisions to enforce require balancing of many factors. In that case reviewing court would probably require agency to provide a 62 • • • • Administrative Law . Policy when agencies make enforcement decisions and use their enforcement power then that is good time for court to review it.• Inaction Is Committed To Agency Discretion By Law are failures to act precluded from review because they are “committed to agency discretion by law?” YES presumption that inaction is not reviewable. including whether a violation has occurred. EPA says this is unreviewable because committed to agency discretion by law. Dump not on site and citizens group petitions to have it put on. But when they don’t use coercive power ok not to review it because doesn’t effect anybody. 2. Non-enforcement decisions involve resource allocation. Agency best situated for determining how to use its recourses.” 3. When Can Get Review For Agency Decision Not TO EnforceThis is just presumption that can be rebutted by statute that provides guidelines for agency to follow in exercising its enforcement powers. o Like Prosecutorial Discretion agency refuse to enforce is similar to traditional executive branch power not to indict. The agency is better suited than the courts to make enforcement determinations. and administrator isn’t listing anything on ultra fund list. which traditionally involve executive control and judicial restraint. then not reviewable because he has discretion.Bierschbach . no focus for judicial review. HYPO Reviewability of Agency Inaction Congress passes statute saying EPA shall put waste dumps which in his judgment are seriously contaminated on ultrafund list which provides for expedited clean up of bad sites. Not Exercising Coercive Power Second. lot like prosecutorial discretion which is immune. cites “no law to apply” language but then it doesn’t seem to apply that test and goes off on functional analysis. Abdication is where agency consciously and expressly adopted general policy so extreme that amounts to abdication.
Bierschbach 63 . Administrator Only Listing Some Dumps . If constitutional claim. EPA doesn’t put on list because in minority community so don’t care. the court must examine the petition for rulemaking. • Reviewability of Agency’s Refusal To Make Rule Where Interested Party Petitioned For Rulemaking Decisions not to institute rulemaking are reviewable and are subject to abuse of discretion standard of review. issued regulation that prohibited soaring devices that were above a certain weight. and agency’s explanation for decision to reject the petition. Cir. Other dumps that meet criteria in similar way were listed. or otherwise not in accordance with law” under § 706(2)(A). conducting study to see if lighter should be forbidden as well and will address later on. pros and cons of rulemaking. For these reasons court says it will review decision not to amend an existing rule.” and. agency finds probably cause but doesn’t bring action. Congress expected that agencies denying rulemaking petitions must explain their actions. or wrongful action like that also amounts to an abdication. It does not order agency to Administrative Law . o Arbitrary And Capricious Standard of Review Case requires a determination of whether the Secretary’s failure to act was “arbitrary. o Distinguish Chaney (1) under APA agencies must allow parties to petition to institute rulemaking. Secretary of Agriculture exercising rulemaking power.” • Decision Agency gave court Conclusory statements made by people in agency and court says we need better reasons so send it back for agency to provide more reasons. But if it did more likely to review. etc. amendment.Discriminatory Intent What if petition is filed and there is allegation that meets statutory criteria. In Heckler court focuses on fact that no colorable claim is made that agency’s refusal violated constitutional rights. by forbidding the showing or selling of soared horses. when such petitions are denied. Example if statute says NLRB must bring unfair labor action if finds probable cause in 60 days.” Agency must allow parties to petition to institute rulemaking. court can enforce. Court Reviews Constitutional Challenges Can court review? Yes if there is constitutional claim. Agency says. • Many Exceptions To Presumption of Unreviewability of Agency Inaction it’s not as if decisions not to enforce are never reviewable. What Court ConsidersIn considering a refusal to grant a rulemaking petition. Change In Factual Basis Of Law when a petition has sought modification of a rule on the basis of a radical change in its factual premises court holds that “an agency may be forced by a reviewing court to institute rulemaking proceedings if a significant factual predicate of a prior decision on the subject (either to promulgate or not to promulgate specific rules) has been removed. (3) Refusals to institute rulemakings are likely to be relatively infrequent By contrast thousands of nonenforcement decisions made daily. an abuse of discretion. there are exceptions. to give “a brief statement of the grounds for denial. Taking bribes. 1987) Reviewability Of Agency Refusal To Institute Rulemaking • Facts Congress passed Horse Protection Act to end practice of soaring horses. whereas nonenforcement decisions are intensely factual decision. may alter statutory mandate. whereas APA doesn’t have provisions for petitioning to enforce a rule. (2) refusals to institute rulemaking turn upon questions o flaw. that since then studies have come out that show lighter soaring devices also ijnure horse and should amend regulation.o reason for this inaction or tell them to act. If statute clearly requires agency to bring action and they don’t courts can review as well. or repeal of a rule. This is easily reviewed by court because there is clear legal standard that triggers obligation to enforce. Court applies analysis similar to hard look doctrine –review will be extremely deferential but agency still needs to provide reasons. Congressional Remedy Congress could tell agency I’m not going to give you funding. o Interested Parties Can Petition For Rulemaking § 553(e) “Each agency shall give an interested person the right to petition for the issuance. court is more likely to review. American Horse Association complains. capricious. American Horse Protection Association v Lyng (D.C. the comments.
a party may ordinarily not seek judicial review of administrative agency action until she has first utilized all her appellate opportunities with in the agency. Supreme court embraces exception to agency inaction unreviewability saying this is reviewable because it is a decision not to make a rule. just regulated and would even have a delay to develop tech. not the case here. The courts will however occasionally review issues not raised below to avoid hardshi Rationale for Exhaustion: 64 • • • Administrative Law . Stevens says its not ambiguous. Judicial interference in administrative process would weaken agencies by encouraging parties to ignore their procedures. Stated differently.institute rulemaking. Apply Chevron (1) is air pollutant ambiguous within meaning of statute? If ambiguous defer to agency. o Distinguished from Tobacco Case Tobacco would have had to have been banned. You can give policy based reasons but have to tie them to this statute. it is clear from statutory text that air pollutant includes GHG emissions. and statute says to regulate any air pollutant. Exhaustion • Exhaustion no one is entitled to judicial relief until the prescribed administrative remedy has been exhausted. • Two Issues: (1) Is EPA interpretation of statute OK? And (2) Is EPA’s decision not to institute rulemaking OK? o EPA Interpretation of Statute What is standard of review? EPA says GHG emissions are not air pollutants within meaning of statute. not the case here. EPA says emissions are not air pollutants within meaning of statutory section. Also Tobacco case had other statutes enacted and statements that FDA lacked authority over tobacco. o Decisions Not To Institute Rulemaking EPA says even if GHG emissions are air pollutants we have discretion not to act. and not a nonenforcement decision. Court remands back to agency to either regulate or give reasons connected to statute for not regulating. Why Require Exhaustion (1) agency expertise . Exhaustion And Ripeness 1.party who is forced to exhaust her administrative remedies may choose not to appeal adverse judgment. CAA says administrator of EPA shall by regulation do standards applicable to air pollution to classes of motor vehicles that in EPA’s judgment causes or contributes to air pollution that reasonably expected to endanger public welfare. iv. (CO2 clearly within CAA’s definition of air pollutant.agency has been established to apply the statute in the first instance so desirable to allow the agency the first opportunity to develop the facts and apply the law. Massachusetts petitions EPA to prescribe regulation governing tailpipe emissions from cars. Statutory text forecloses EPA argument that GHG are not air pollutants. Waiver Of Unrepresented Or Unexhausted Claims ordinarily party must raise all issues before the agency before appealing its final decision to courts. Mass v EPA (US 2005) • Facts CAA says EPA shall by regulation set standards application to air pollution by classes of motor vehicles. Abuse of Discretion – EPA gives reasons that basically new president came in and policies changed – different priorities. EPA says • Supreme court embraces this view in Mass v EPA case. Judiciary can more efficiently employ its resources by reviewing the agency record than by compiling its own independent findings of fact (4) don’t want to weaken agency power . Court bats it away and says ok president has different priorities but that doesn’t change fact that statute says you need to regulate on this issue if satisfy this criteria. Then maybe court would say must institute rulemaking if don’t come back with reasons. (2) efficiency .more efficient to allow agency to proceed without interruption than to allow judicial review at the various intermediate steps (3) develop record judicial review is enhanced by allowing agency to develop a factual record and apply its expertise.Bierschbach .
reconsideration not necessary for finality. Separation of powers Allow agencies to correct mistakes o Common law test (when APA inapplicable McCarthy (1992 Blackmun) Involves a Bivens action (sue federal official for violation of individual rights. The federal prison system has a procedure for you to follow if you have been wronged: (1) consult people informally. procedure – forcing them to go thru procedure makes no sense Lack of institutional competence Type of relief o Bias: hard to determine that the agency has bias. debars him for 18 months – he’s upset because he did not technically break the rules. nonsensical b/c finality would not matter unless you had exhausted Darby (1993 Blackmun): Darby finds a loophole to get loans for multi-family dwelling. Exceptions (where required to exhaust): o The organic statute requires exhaustion o The regulation requires exhaustion (the agency can do w/o special procedure according to APA). makes more sense b/c the statute must do something o Finality: exhaustion is a separate requirement. Holding: McCarthy did not need to through administrative process b/c qualified for exception in exhaustion doctrine. the court created a balancing test (intensely practical): • Litigant’s interests o Undue Prejudice Unreasonable timetable Irreparable harm Defense to criminal liability (can challenge reg. Must follow this procedure before can courts. Agency claims has not exhausted administrative remedies. even though criminal prosecution) o Whether agency can grant effective relief Challenge to ag. He immediately challenges the agency decision in court. HUD never tells him that he can’t do it. hard to get there). but they are upset that he is doing this. (3) if you don’t receive satisfactory response by warden in 15 days. To create this exception.Bierschbach 65 . (5) court has 30 days to respond. generally are not really sympathetic to prisoners complaining about wrongful treatment. • Government’s interests o Allow correction of mistakes – always true. a constitutional claim). you can appeal w/in 20 days. in balance but not dispositive o No special expertise • Judicial system’s interests o Judicial economy o Creating a record o Administrative Exhaustion (APA applies) §704 (APA): “Otherwise final is final” whether or not reconsideration sought • Otherwise final is final could mean two things: o Exhaustion: can appeal without reconsideration. o So if the organic statute and the regulation is silent and it’s an APA case. then they do not have to exhaust (the bottom line is simple. Administrative Law . (2) file written complaint in 15 days. The agency therefore decides to debar him from participating in HUD game. • Holding: The court finds that 704 would be pointless if had to exhaust administrative remedies even after final decision before he appeals – there is no point for the APA to talk about finality in 704 if he still could not appeal without exhausting administrative remedies.
or adversely affected or aggrieved by agency action within the meaning of a relevant statute. Ripeness supposed to keep courts from getting involved unless truly have something to rule on. No factual development to be done. Drug companies must either break the law or burn old labels and print out news ones at considerable expense. through avoidance of premature adjudication. Ripeness Test Court evaluates both the (1) fitness of the issue for judicial decisions and (2) the hardship to the parties of withholding court consideration. is entitled to judicial review thereof.” This avoids premature adjudication of disputes that have not reached sufficient concreteness to warrant judicial interference. In case of purely legal question agency expertise isn’t going to help. 2. the circuits eventually caught on to Darby. from entangling themselves in abstract disagreements over administrative policies. “A person suffering legal wrong because of agency action. • • • Toilet Goods v. and it is a final agency action with nothing left for agency to do. No case or controversy until applied – courts don’t’ want to issue advisory opinions. Ripeness Policy Basic rationale of ripeness doctrine is to prevent courts. Nobody has been prosecuted yet by FDA • FDA’s Argument FDA says (1) this is completely unreviewable under § 702 because didn’t’ suffer legal wrong – no presumption of review.” (2) Can’t Challenge Law Until Applied To You . No worry of opening floodgates. Onerous burden either way. o Hardship To Parties From Withholding Review What is the impact of the regulation on plaintiffs. but that was not the case.Bierschbach 66 . Hardship here of withholding review is severe Court Explanation Government argues that if do pre-enforcement review it will be harder for us to enforce the law. If ever advising clients always tell them to exhaust. Ripeness • Ripeness when one seeks discretionary relief from the judiciary for an agency action. etc. and to protect agencies from judicial interference until administrative decision has been formalized and its effects felt in a concrete way by challenging parties. 37 drug manufacturers objected on grounds that commissioner has exceeded his authority. Gardner (US 1967) • Facts FDA passes regulation if inspectors are denied access to facilities FDA can withhold Administrative Law . Gardner (1967) Fitness + Hardship Test • Facts FDA promulgated regulation after notice and comment requiring drug manufacturers to include generic names on the labels of their prescription drugs. Court says this review will clarify immediately whether you are even permitted to enforce the law and assess penalties. o Look At Ripeness From Court’s Perspective Rightness is what is case look like from court’s perspective. This decision is unusual because complete disconnect between decision and exhaustion policies. Court says this is capable of judicial resolution because purely legal issue. Ripeness is whether case is well presented before court. Involves interpretation of statute.• This is such an important issue here b/c working through the administrative process is easy to mess up and can cause you to lose suit.FDA says can’t challenge every law you don’t like until it’s applied to you and then raise challenging law as defense. and avoids disruption of agency decision making until the impact thereof has run its course. the courts may resist review until the controversy is “ripe. This case was so surprising that some subsequent cases required exhaustion if means specified. • Bierschbach Explanation exceptions to exhaustion will generally revolve around hardship. The impact is sufficiently direct and immediate as to render the issue appropriate for judicial review. o Fitness of Issues For Judicial Resolution Rule is final and the dispute is over a purely legal issue of whether FDA exceeded its authority. Abbott Laboratories v. Not as if everyone will try to get out of draft by becoming sole surviving son and then changing. unlike exhaustion where looking at from agency perspective have they had chance to do what need to do.
Administrative law also has statutory component. Congress Anticipates Challenge To Statute Statute can clearly authorize the court to hear a challenge – 30 days after final whoever wants to challenge can go to DC court to do so. is entitled to judicial review thereof. Example agency relaxes restrictions on credit union. and that it is likely to be remedied by a favorable decision. Where Does Ripeness Requirement Come From? Prudential standing requirement that judges have constructed against background of constitutional norm of cases and controversies. Court says need to let it play out a bit more to see how agency applies the law. Court says here regulation is less directed at primary conduct of industry. must be vindication of your own legal right before come to court and sue – tort. Statutory Standing Requirements APA § 702 – “A person suffering legal wrong because of agency action. One who seeks judicial review must allege suffered some actual or threatened injury as a result of the illegal conduct of the defendant. statutory. Fact that regulation directed to agency enforcement priorities rather than primary conduct of companies has a lot to do with this Toilet Goods Case II • Facts FDA regulation expanded definition of color additives which FDA has to approve before manufacturers can use them. • Ripeness Testhere court says can’t bring pre-enforcement challenge. Toilet goods brings pre-enforcement action challenging the law. Can’t just say FAA regulating airways.who can march into court to sue to vindicate statute. You think violates statute. Don’t know yet if agency will enforce the law. o Fitness For Judicial Resolution Court doesn’t know if FDA will really withhold certification because law only says that they may withhold certification. • Ripeness Test Under first prong as long as legal issue and agency done everything it can do then challenge is ripe. Where congress anticipates challenge to regulatory scheme. Standing • Constitutional Standing Requirements Article 3 of constitution limits judicial power to cases and controversies. which raises different set of issues . In Abbott regulation says drug companies must print generic names on labels. that the injury is fairly traceable to that defendant’s actions. Competitors Have StandingAgency relaxes restrictions for standing when a competitor is challenging a law that benefits his competition.certification until access is granted. v. contract. Courts can hear cases and controversies which involves injury in fact. or adversely affected or aggrieved by agency action within the meaning of a relevant statute.” l o Must Be Vindication of Legal Right Courts say can’t point to law and say I don’t like it. Not clearly unconstitutional for court to hear case not ripe but strong prudential reasons not to. o Hardship To Parties From Withholding Review Court says it’s not clear that any parties will have to take any immediate burdensome action if court doesn’t hear the case. • • • • • HYPO Protecting General Legal Rights Secretary approves highway through park. do you have standing to sue? Ask question do you have legal right? Generalized Administrative Law . Court says this action is ripe for review. I have interest in living in country where planes not flying overhead all the time. Under second prong court says this is more like Abbot where putting party in position of breaking law or incurring significant expense so that there is hardship. bank challenges saying violates statute. Why? What’s difference between this and Abbot. o Zone of Arguable Interest P must show injury arguably within zone of interest protected/regulated by statute. Regulation doesn’t directly affect bank but has standing to challenge because injures banks business. Companies bring pre-enforcement action against agency. causation and redressability.Bierschbach 67 .
so banks can’t market data processing services. Want to be sure congress would have contemplated these kinds of people bringing suit Administrative Law . is asking if you have legal right is same as asking does P have cause of action so little bit of circular tests. prevent banks from obtaining monopoly control over credit and money. and securities deals competitors. What are the interests arguably protected by the statutory provision at issue.g. o Congressional Intent reviewability turns on congressional intent. This is totally incidental how much business stenographers have. Court rejects this test saying goes to merits of controversy and not issue of standing. Data Processing v Camp (US 1970) • Facts Comptroller says banks can provide data processing services to other banks and customers. banking statute purpose was to prevent banks from engaging in nonbanking activity. Thus congressional intent does not preclude securities dealer association from judicial review. Stenographer goes into court to say that rule violates the statute. or money lent. Purpose of banking statute was to protect potential competitors of banks from too much competition by banks. FAA says you don’t have standing o Is Stenographer In Zone of Interest? She has injury in fact. • • Clark v Securities • Facts McFadden Act only permits national banks to sell discount brokerage services to public. Zone of Arguable Interest Whether the interest sought to be protected by complainant is arguably within the zone of interests to be protected or regulated by the statute or constitutional guarantee in question? Is P within arguable zone of interest congress intended in creating statute? o Two Part Test Must Show: (1) Injury in Fact + (2) That In Zone of Interest. and can say arguable that one of purposes of regulation is to preserve jobs for bureaucrats that enforce the regulations. Other problem with legal rights tests. Zone of interest test requires two step analysis. Data processing challenges saying this is violation of Banking statute which says banks can only engage in “bank services”.Bierschbach 68 . • Who is Not In Zone of Interest? Zone of interest test denies a right of review if the plaintiff’s interests are 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. Side effect is it reduces number of individualized licensing hearings held. arising out of contract. • Zone of Interest TestIs McFadden Act arguably designed to protect securities dealers? Congressional intent in passing the act included the desire to limit national banks ability to branch without regard to state law. o Arguable As long as asserting some interest arguably related to statutory scheme you have standing. Association of securities dealers sued comptroller for exceeding his legal authority.grievance that right to enjoy public parks being violated. tort. property. HYPO Incidental Effects Not In Zone of Interest FAA enacts rule saying no pilots over age of 60. • Legal Rights Tests Legal rights test says individual only has standing if the right invaded is a legal one (e. Comptroller determined that discount brokerage services were not brokerages under act allowing national banks to open discount brokerage offices. and are the plaintiffs interests affected by the agency action in question among them. Hard to argue regulation for pilots is to make sure stenographers have stream of business. Would Data Processing have standing? Is there legal right to be free of banks providing these services? Can take some view of statute and say it does. or statute). One of problems with legal rights test is a lot of statutes that protected general rights of public would have lots of statutes aimed at protecting public welfare at large that nobody would be able to vindicate. The act limits the national bank branches to instate branches where deposits are received or checks paid. and stenographers have less business. Banking Statute Arguable that banking statute brings a competitor within the zone of interests protected by it. and forestalling dangers of unlimited banking.
so maybe within zone because have public interest argument. Interesting point. And any affect on market share affects competitors so therefore within zone of interest. • Zone of Interest regulating credit unions affects credit unions market shares. But not really in zone of interest. Banking organizations challenge interpretation because taking over their market share. or to groups within a well defined geographic region. NCUA interpreted it to permit credit unions to be composed of multiple unrelated employee groups. congress couldn’t have thought about this. Postal Employees union brings suit saying rule is invalid under statute. Not competitor. Can I go into court and sue? I have injury in fact because can’t hear that content. o Arguable? Isn’t it at least arguable that statute that gives monopoly is also designed to protect market share of this organization? And isn’t it arguable that contemplated that would mean more jobs for employees? National Credit Union v. Statute passed before there were even postal employees. Zone of Interest Summary Being with in zone of interest means that your interest systematically coincide with interests that congress meant to regulate or promote with the statute in question.General Public Interest I live in area in which Radio Station wants to broadcast subject specific content that I want to hear.Bierschbach 69 . How majority applies test is not good because everybody who establishes some kind of injury in fact pretty much has standing. Those cases are on border. DC circuit held that you are within zone of interest so who knows whether Supreme Court would agree or not. o Competitors Court allows competing businesses to get within zone of interest because of general thought that when regulate business by implication going to be some spillover on competition so think competitors are in it O’Connor Dissent O’Connor dissent says regulation meant to make sure credit unions responsible and solvent. • • • Administrative Law . American Postal Workers Union (US 1991) • Facts Statute gives USPS legal monopoly over certain kinds of mail delivery. • Zone of Interest Do they postal employees have standing? They have injury in fact because losing jobs. Court says no standing. Nobody had any thought at all about banks competing or market share.Air Courier Conference v. instead of USPS going to Italy will give to DHL. Postal services issues rule suspending operation of statute – and says in public interest for certain international routs postal service will give letters to private carriers and let them deliver. First National Bank (US 1998) • Facts Credit Union Act requires federal credit union membership be limited to groups having common bond of occupation or association. Just has to be arguable that coincide. HYPO Zone of Interest Test . o Public Interest Within Zone of Interest FCC has to consider public interest. Are they in zone of arguable interest? Purpose of statute was to protect revenues not to protect jobs. Usually this means if you’re a competitor you have standing. but still has to be arguable. FCC denied license under statute.
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