DEPARTMENT OF PUBLIC POLICY
POL611 Administrative Law Lecture Materials
© Chad J. McGuire, All Rights Reserved
I. General Introduction to Administrative Law
Administrative law may be defined as the following: • A body of law (constitutional provisions, statutes, regulations, court decisions, executive orders, directives, etc.) that: o Regulates the procedures agencies use in making rules and related policy decisions; o Controls the exercise of agency authority to enforce laws and regulations, and; o Governs the extent to which administration is open to public scrutiny (required transparency in agency decisions and processes). • A process that provides for review of agency decisions to ensure those decisions respect the requirements identified above.
The first bullet identified immediate above suggests administrative law is, in part, a way of relating to other areas of law. This suggestion means administrative law is not solely a category of law in itself, but rather a way of understanding how public entities that administer government are controlled by legal frameworks. Consider the fact that much of our government is premised on interactions with the public through administrative units: the Social Security Administration, Internal Revenue Service, Food and Drug Administration, Environmental Protection Agency, Immigration and Customs Enforcement, Federal Bureau of Investigation, etc. All of these ‘units’ of government are administrative entities, meaning they administer government benefits and obligations. The basis for most of these benefits and obligations comes from laws that are passed by Congress (the legislature). Congress does not have the capacity to personally implement all of policy goals identified in laws it passes (nor does it have the expertise in many instances), so it delegates the responsibility for implementing policy goals contained in passed legislation to administrative bodies (under the executive branch of government).1
For example, Congress has the power to tax the populace under the United States Constitution. Congress has acted upon this power by passing a law (statute) for taxing purposes, the Internal
Page 2 of 29 The degree to which agencies can act is bounded by the powers delegated by Congress; agencies can only act within the powers granted to them, primarily through the laws that delegate those powers to the agency. A conceptual representation of these limits through a continuum of congressional power is provided here:
As noted in the figure, there is a set limit on the amount of authority Congress may grant to agencies. For example, Congress cannot grant authority that exceeds its powers granted by the United States Constitution (separation of powers doctrine)2; the black line
Revenue Code. This law sets forth the basis of taxing various sources of income (wages, investment, etc.) from different entities (individuals, corporations, etc.), and includes a process for collecting taxes, monitoring collections, identifying potential abuses of the law, and seeking enforcement of the provisions of the law. Congress does not do these activities itself, but rather delegates the responsibility to an administrative unit of government created specifically for implementing the tax code. This administrative unit is the Internal Revenue Service, or IRS.
The limitations on congressional powers will be explained in greater detail later. However, as an example, we certainly know Congress cannot pass laws that violate basic constitutional protections like a law that requires individuals suspected of a crime to mandatorily provide selfincriminating information to law enforcement. Such a law would violate the Fifth Amendment right to protect oneself from self-incrimination (one can always voluntarily provide such statements to law enforcement, but they cannot be forced to do so).
Page 3 of 29 in the figure represents the entire amount of space in which Congress may legally authorize agency action. The green line represents an actual delegation of congressional authority to an agency. In this case Congress has passed a statute that delegates authority to an administrative entity. The extent of authority granted to the agency is bound by the green line; the agency cannot act beyond the green line in implementing the goals of the statute. The red line represents potential congressional authority that was not granted to the agency in the particular statutory delegation. For example, Congress may have the authority to grant the agency Powers A and B to meet a policy goal, but may choose to only grant the agency Power A under the statute to meet the goal; this is a choice by Congress bounded in the statutory language expressing the delegation of authority to the agency. Now back to the definition of administrative law. Subparts of the first bullet and the second bullet above identify that administrative law is also a discrete area of law in itself. Thus, administrative law is both a way of understanding the process of administering government services and a discrete set of rules that regulate how administrative units go about doing their work. The main law that regulates how administrative units go about doing their work is the Administrative Procedures Act, or APA. The APA is a federal law (copied in many states) that identifies the rules by which administrative entities go about doing their work. These rules are meant to ensure these agencies are consistent, fair, and open in the way they go about implementing their statutory responsibilities. In summary, the APA does this by first identifying the powers granted to agencies in general, and then identifying the rules (limitations) by which agencies can carry out those powers. Agency Powers: • Power to ‘Legislate’ (quasi-legislative powers): Agencies have the power to create regulations, or rules, that are official statements about how the agency is going about implementing its statutory obligations. These rules must be within the powers granted to the agency by Congress. We can know the limits of this power by looking to the statute and its delegation of responsibilities to the agency. For example, the IRS is empowered to make rules for the collection and enforcement of tax law. However, the IRS is not empowered to under tax laws to create new taxes; creating taxes is the purview of Congress and this power has not been delegated to an agency (and likely cannot under separation of power limitations). Power to ‘Administer’ (quasi-executive powers): In order to carry out its delegated functions, agencies often have to engage in executive branch-type functions that include, primarily, the power the enforce its responsibilities under statutory delegation. This includes the power to investigate, charge, and prosecute those it believes are violating the rules it has created to carry out a statutory goal. For example, the IRS has the power to audit your personal tax return to determine if you have properly identified all of your tax obligations. If it feels you have not done so the IRS can ‘audit’ you to investigate whether or not you have complied with tax law. If it believes you have acted fraudulently, then the IRS can bring ‘charges’ against you to determine the validity of your actions.
Page 4 of 29 • Power to ‘Adjudicate’ (quasi-judicial powers): Finally, agencies have the power to act as a finder of fact by creating tribunal settings in which evidence is presented to help the agency in carrying out its statutory obligations. For example, the IRS has the power to create ‘trial-like’ settings where evidence is presented before it to determine whether or not an individual has complied with federal tax law.
Agency Rules: • Rulemaking Process: Agencies must go through a specific set of procedures when making regulations (rules) that are intended to implement the policy goals of a law that allows for the development of such rules by delegating this power to the agency. Assuming the agency has the power to make the rule (assuming the agency is acting within the scope of the delegation from Congress), the APA requires the agency follow specific procedures in creating the rule. These procedures are laid out in the statutory provisions of the APA itself. The purpose of the rules are to ensure the process engaged in for the rulemaking is transparent to the public; a key to transparency is following notice and comment procedures where the proposed rule is made available for review and comments from the public. The main way this transparent process of rulemaking is done today is through informal rulemaking procedures identified by the APA. For more controversial rules, the APA provides the option of formal rulemaking procedures that are more substantial than informal procedures, including a process that acts more like a judicial trial where evidence is presented and ‘cross-examined’ to discuss the pros and cons of a proposed rule. Enforcement of Rules: Agencies must follow procedural due process requirements under the APA (based in constitutional law requirements) when they are taking action against an individual (or other recognized entity) based on enforcement of a rule. For example, if the IRS audits someone they expect to be evading tax obligations, the ‘audit’ must include due process; a procedure that allows the individual to: o Receive the charges against them; o Examine the evidence against them; o Cross-examine (challenge) the evidence against them; and o Present evidence in their defense. So, agencies are interesting entities. They have the ability to act in all areas of government, including quasi-legislative, -executive, and -judicial roles. However, these roles are not absolute. Agency conduct is bounded in a number of ways. • Agencies are limited through the process of legal doctrines that emanate from our framework of laws in the United States. For example, agencies cannot go beyond the powers delegated to them by Congress under a particular statute that grants
Page 5 of 29 them power; the delegation ‘bounds’ agency power to the extent of the delegation itself (as noted in the figure above and explained in greater detail later). • Agencies, like Congress, are also limited by constitutional constraints. No agency can take an action that violates the constitution and is thus found to be unconstitutional. The same holds true for Congress; it cannot pass a law that is facially unconstitutional (like a law segregating humans based on race) or asapplied unconstitutional (like a law that ends up being applied in a way that segregates humans based on race). Thus, agencies cannot implement a statutory goal in a way that violates constitutional protections. This can include substantive violations (the rule establishes a constitutional violation) and procedural violations (the way the rule is being followed results in a violation of due process rights). The Administrative Procedures Act (APA) is a statute that bounds agency conduct by requiring certain processes be followed. Agencies must follow the rulemaking process and enforcement of rules established within the APA.
Understanding how agencies are empowered to act, and also the limitations on their powers, is the foundation of administrative law. Once you have this understanding down you are in a prime position to fully begin to understand public policy within the context of the legal frameworks that define the implementation of policy directives once they have been legitimized by turning policy proposals into law. In addition, knowing the legal frameworks influence on administering government is essential to effective policy development, management, and evaluation. END OF SECTION.
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II. Legal Frameworks: The Big Picture
The study of public policy is closely tied to the operational issues surrounding government. Thus, we can look to how government operates in order to gain a sense of where public policy emanates, and the role of administrative law in the public policy process. We can begin our exploration with the foundational legal framework that exists in our federal government, The United States Constitution. Our federal constitution provides the framework from which public policy is created and thus helps us understand the ways in which policy develops, is implemented, and ultimately changed. For example, the U.S. Constitution mandates a separation of powers between the three branches of government: the legislature, the executive, and the judiciary. Each branch has the ‘capacity’ to make policy, but some branches of government are more entrenched in policymaking than others. If we understand the basic interactions between each branch of government from a policy standpoint, then we can begin to understand the administrative law principles at the heart of public management and this course.3 Let us begin by summarizing some basic constitutional responsibilities of each branch of government. The three branches of U.S. government are responsible for the following areas of policy concern: Legislative Branch • • • Development and acceptance of policy proposals (through bills) Legitimization of policy proposals (through passing laws) Delegation of policy implementation (identifying who is responsible for implementing and enforcing a law that has been passed). Evaluation of policies that have been implemented (reviewing, amending, and (possibly) repealing
It is important to note that each branch of government has the ability, in certain circumstances, to go beyond the basic interactions mentioned in this lecture. For example, although the legislature is primarily responsible for passing laws (the legitimization of policy initiatives), the executive also has the power in limited circumstances to directly pass ‘law-like’ policy initiatives (executive orders are one example). While acknowledging the capacity of the executive branch to engage in direct legitimization of certain policy proposals (and the judiciary as well through acts of judicial activism, or direct reinterpretations of constitutional or legislative intent), the focus in our discussion here is limited to understanding the basic principles underlying the major roles of each branch of government so that we might better understand the role of administrative law in this process. In short, we are limiting our view of the roles of government in order to understand the basic public policy principles that emanate from those roles under an administrative law context.
Page 7 of 29 statutes) Executive Branch • Development of policy proposals that are then submitted to the legislature (example is annual spending budget; President submits a budget proposal to Congress, but only Congress has the power to pass a budget – implement the proposal – through the spending clause of the federal constitution). Implementation of policies that have been legitimized by the legislature (implementing clean air standards that have been passed by Congress under the Clean Air Act) Enforcement of policies as part of the implementation process (the Attorney General – an executive branch officer – is responsible for prosecuting individuals/companies suspected of violating federal laws). Interpreting the actions of the legislature and executive branches to ensure those actions are in compliance with legal standards. For example, ensuring Congress has not overstepped its authority by passing a law that violates federal constitutional protections. Or, ensuring the President, or his executive branch members, have not gone beyond the authority granted to them by Congress when implementing a delegated responsibility; for example, reviewing the actions of the Drug Enforcement Agency to ensure they have not violated constitutional rights of suspected drug dealers as they go about enforcing drug laws passed by Congress. Evaluating policies to the extent those policies (in the form of statutes and regulations primarily) are in conflict with constitutional principles or statutory considerations (under a hierarchy of laws analysis – discussed below).
A. Hierarchy of Laws Concept – Conceptual Framework Now that we have some basic sense of the responsibilities of each branch of government, we need to place these responsibilities into a context that helps us understand them in relation to one another. For example, how might the judiciary determine when the executive branch is acting outside its delegated authority from the legislature? What framework, if any, is being used to judge the actions of the executive in
Page 8 of 29 relation to the statutory authority granted by the legislature? To help answer this question, we can consider the following figure entitled Hierarchy of Laws:
The hierarchy of laws shown above represents the three main kinds of ‘codified’ law found in the United States: constitutions, laws (statutes), and regulations (from administrative units of government). The pyramid you see here is meant to represent, roughly, how these categories of law relate to one another. For example, the constitution sits at the top of the pyramid suggesting it is the ‘supreme’ law of the land. Laws sit below the constitution and are created generally by legislation through the legislative branch of government. Regulations sit at the bottom of our pyramid here and reflect the rules created by (mostly) executive branch administrative entities (agencies for example). These regulations carry the lowest ‘weight’ of law, meaning they cannot conflict with laws passed by legislation. In addition, laws cannot conflict with the constitution. The framework identified in the hierarchy of laws helps us by making a few things clear: • First, regulations (the main kinds of ‘laws’ developed to implement legislative intent) are at the bottom of the pile when it comes to importance. From a policy standpoint this tells us that we should treat regulations with some degree of suspicion; in essence, we need to ‘check’ regulations to make sure they are in compliance with both the statutes that created the ‘legal space’ for the
Page 9 of 29 regulations, and also with the U.S. Constitution (and state constitutions where applicable) to ensure those regulations are in compliance with constitutional limitations on government action. • Second, we can connect the administrative functions of government to this overall legal framework. For example, we know government functioning in its regulatory capacity brings up both statutory and constitutional law considerations. This means we must have an awareness of what government is attempting to do and how that is influenced by other legal frameworks, both at the same level of a hierarchy (for example implementing one statutory goal and having that statutory goal impact other statutes) as well as different levels of hierarchy (implementing a statutory goal in a way that impacts constitutional rights).
B. Understanding the Hierarchy of Laws Framework in Relation to Administrative Principles By utilizing this hierarchy approach, a public policy professional can have a clearer sense of the impact legal frameworks are having on policy directions. For example, consider a policy professional charged with reducing automobile emissions. The basis for this policy goal comes from the recent passage of a statute, the Clean Air Law (CAL). The CAL, passed by Congress, states a goal of lowering emissions from automobiles but does not give specific details on how to do so. Rather, it delegates the responsibility for figuring out how to reduce emissions to the federal Environmental Agency (EA), an executive branch administrative agency. In addition to being given the power to figure out how to reduce auto emissions by creating regulations, the CAL also gives the EA power to enforce the regulations it creates and adjudicate those it believes to be violating the regulations.4 Beyond the goal of limiting auto emissions and delegating that power to the EA, the CAL has only one other provision: it exempts automobile manufacturing from the way in which auto emissions can be limited. In other words, the statute (the CAL) prevents the administrative entity (EA) from creating regulations that would interfere with the process of automobile manufacturing itself. Based on the powers delegated to it, the EA creates two regulations to implement the statutory goals of the CAL: • The first regulation requires automobile manufacturers to install certain equipment on their automobiles as part of their manufacturing process that helps to limit emissions from new automobiles.
The ability of an administrative agency to engage in all of the powers of government (legislative, executive, and judicial) is a fundamental principle of administrative law. Unlike the separation of powers doctrine under our federal constitution that limits government power in any one branch, administrative law principles allows administrative entities to engage in all three functions. This is described in greater detail elsewhere in the course. However, it is important to understand that administrators of government function in multiple roles when engaging in their administrative roles, creating law (regulations), enforcing laws, and adjudicating laws.
Page 10 of 29 • The second regulation prevents minorities from driving automobiles because there is evidence that minorities overwhelmingly tend to own and operate older automobiles with higher rates of emission. Thus, by preventing minorities from driving automobiles there will be a reduction in auto emissions because those old automobiles will be effective taken off the road.
We can look at these two regulations and ask the following questions under our hierarchy of laws framework: • • Are the regulations in conformance with statutory delegation, meaning does either regulation violate the statute upon which the regulation is based? Does either regulation violate constitutional principles?
The hierarchy of laws framework brings out these two questions because we know we are dealing with regulations, and based on the hierarchy of laws conceptual framework, we know that regulations sit at the bottom of our hierarchy. Thus, the regulations must be in conformance with both statutes and constitutional principles. If the regulation violates a statutory or constitutional principle, then it is invalid as a matter of law. C. Details of Statutory Delegation As indicated earlier, statutory delegation essentially means Congress – via legislative action – has delegated rights and obligations to the administrative entity: • Rights in the sense of empowering the administrative body (usually executive agency) to engage in certain actions it would otherwise not have the right to engage in without the statute explicitly or implicitly giving the agency the power. Obligations in the sense that the agency is obliged to follow the responsibilities given to it by the statutory delegation depending on the language contained in the statute regarding the delegation. For example, if the statute indicates the agency shall regulate air quality to achieve some goal, then the term “shall” is generally interpreted as mandatory language and the agency has no choice and is obliged to follow the statutory mandate. On the other hand, if the language of the statute reads that the agency may regulate air quality (in its judgment), then the agency may have an obligation under the statute to decide whether or not to regulate air quality, but not an absolute duty to actually regulate air quality. The language “may” is generally interpreted as permissive language leaving the agency with greater discretion.5
D. Agency Discretion Under Statutory Delegation
Any ambiguity whether a statutory delegation is mandatory or permissive is resolved by the judiciary.
Page 11 of 29 The other concept we need to identify before analyzing our hypothetical situation above is administrative discretion. Think of administrative discretion as the amount of room an agency has in implementing a statutory delegation. For example, a statutory delegation might be quite specific, stating that an agency is to engage in specific steps to achieve a statutory goal. Requiring the installation of a specific technology to ‘scrub’ sulfur from coal-burning power plants leaves little discretion; the agency simply ensures all coalburning power plants are installing and using the same ‘scrubber’ technology to filter out sulfur emissions. An alternative example with greater discretion may be a delegation that identifies a particular goal, like ‘clean air,’ but leaves it up to the agency to decide both what constitutes “clean air” and how to develop regulations in order to get to the goal of clean air; in this example there is a great amount of discretion left to the agency by the statutory delegation. • • Statutory language that is vague (without details) provides greater discretion to agencies when responsibilities are being delegated. Statutory language that is detailed and comprehensive provides less discretion to agencies.
Visually we can represent the concept of statutory delegation and discretion in the following schematic:
Page 12 of 29 The black box represents the extent of agency discretion granted by the legislature when delegating a statutory duty to an agency. Thus, all actions by the agency must be found to exist wholly within the box; any act by the agency that exists outside the box is outside of its discretion (and brings up hierarchy of law issues we will discuss in a moment). It is important to remember the box itself can vary in size: • • • There is no box when a statute does not delegate any obligations of the statute to an executive entity. There is a small box where a statute delegates very little responsibility to an executive entity in implementing the goals of the statute. There is a large box where a statute delegates lots of responsibility to an executive entity in implementing the goals of the statute.
Remember, the box created by the statute is one question that needs to be answered. However, we must also determine whether or not the box itself allows for the conduct it envisions. For example, a statute that gives authority to federal agencies to engage in actions that violate constitutional principles is an invalid statute, thus the box gave discretion to an agency it did not have the power to give (as the constitution represents the supreme law of the land). This is where the hierarchy of laws comes back into our minds as a conceptual tool by which we evaluate legal frameworks that involve administrative functions. With this information in-mind, let’s now go back and review the hypothetical explained earlier. Recall in the facts of the hypothetical, the EA created two regulations to implement the statutory goals of the CAL: • The first regulation requires automobile manufacturers to install certain equipment on their automobiles as part of their manufacturing process that helps to limit emissions from new automobiles. The second regulation prevents minorities from driving automobiles because there is evidence that minorities overwhelmingly tend to own and operate older automobiles with higher rates of emission. Thus, by preventing minorities from driving automobiles there will be a reduction in auto emissions because those old automobiles will be effective taken off the road.
Our job is to review these regulations and determine if they are valid under the principles set forth above. Let’s start with the first regulation: • The first regulation requires automobile manufacturers to install certain equipment on their automobiles as part of their manufacturing process that helps to limit emissions from new automobiles.
We know this regulation must fit within the box established by the CAL; thus we must look to the language of the CAL to see if there are any prohibitions on this regulation. While we don’t have the entire language of the CAL before us in the hypothetical, the following is stated:
Page 13 of 29 • Beyond the goal of limiting auto emissions and delegating that power to the EA, the CAL has only one other provision: it exempts automobile manufacturing from the way in which auto emissions can be limited.
Thus although the CAL granted the EA authority to lower auto emissions, it did restrict the way in which EA could go about limiting auto emissions by exempting automobile manufacturing processes. Now I agree there is some room for argument here on the language (what exactly is auto manufacturing?). However, without getting into semantics we can simply state the first regulation is an attempt to regulate the installation of equipment on automobiles and that may very well be a kind of regulation that deals directly with automobile manufacturing. Under this view the regulation would likely violate the limitation placed on agency action by the statute. As such, the regulation is likely outside the box created by the CAL in this case. The second regulation is different from the first: • The second regulation prevents minorities from driving automobiles because there is evidence that minorities overwhelmingly tend to own and operate older automobiles with higher rates of emission. Thus, by preventing minorities from driving automobiles there will be a reduction in auto emissions because those old automobiles will effectively be taken off the road.
Rather than regulating a manufacturing process by adding a component to new autos, this regulation prevents minorities from driving automobiles because of some claimed association between minorities and older polluting autos. The CAL is silent on such a regulation and thus we can say the regulation is clearly within the discretion granted to the agency by the statute itself; it is directed at reducing auto emissions, at least facially. So in looking to the relationship between the statute and the regulation there does not seem to be any violation of the hierarchy of laws principle. However, the regulation likely violates other federal laws (statutes) regarding discrimination, although we don’t know this precisely. What we do know is that the regulation certainly discriminates against people of particular races and national origins and therefore likely violates constitutional protections for such individuals. Therefore, while the regulation may be OK with the statute, it is not OK with constitutional principles. As a result the regulation cannot be considered authorized by the statute; although the statute is silent on the issue, no law passed by Congress is presumed to be intentionally unconstitutional. Thus, the limitation on the agency in this case – the limit of not being allowed to pass a regulation that is discriminatory – is presumed to exist in the statute without the statute explicitly saying so. So our hierarchy of laws shows itself as a powerful conceptual framework for analyzing administrative law principles, at least the principles of relationships between different kinds of laws and how those relationships create certain assumptions and analyses when set against the backdrop of statutory delegation and discretion. Together these principles help us understand how administrative law functions in relation to other legal frameworks.
Page 14 of 29 This is the BIG PICTURE of administrative law. If you understand it, then you have the important general framework understood and can move onto some of the details of this critical area of law. END OF SECTION.
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III. Controlling Administrative Entities Legislative and Judicial Controls
Recall that U.S. government is divided into three branches representing the separation of powers doctrine contained in our U.S. Constitution: • • • The legislative branch; The executive branch; and The judicial branch.
Administrative activities essentially take place in the executive branch of government. Thus, when we are thinking about controls on administrative entities, we are really talking about the roles played by the legislative and judicial branches of government in controlling the administrative units that sit within the executive branch of government. Thus, this section is focused on looking at the major (not complete) roles played by the legislative and judicial branches of government in influencing administrative actions emanating from the executive branch. A. Legislative Controls Legislative controls over agency actions have been discussed in some detail already under the framework of statutory delegation; congressional limitation of agency authority through limiting the amount of discretion granted the agency when passing a law. The main points interwoven into the introduction of administrative law concepts that highlight legislative controls are summarized below: Statutory delegation essentially means Congress – via legislative action – has delegated rights and obligations to the administrative entity: • Rights in the sense of empowering the administrative body (usually executive agency) to engage in certain actions it would otherwise not have the right to engage in without the statute explicitly or implicitly giving the agency the power. Obligations in the sense that the agency is obliged to follow the responsibilities given to it by the statutory delegation depending on the language contained in the statute regarding the delegation. For example, if the statute indicates the agency shall regulate air quality to achieve some goal, then the term “shall” is generally interpreted as mandatory language and the agency has no choice and is obliged to follow the statutory mandate. On the other hand, if the language of the statute reads that the agency may regulate air quality (in its judgment), then the agency may have an obligation under the statute to decide whether or not to regulate air quality, but not an absolute duty to actually regulate air quality. The language
Page 16 of 29 “may” is generally interpreted as permissive language leaving the agency with greater discretion.6 The other concept we need to identify in looking at legislative controls is administrative discretion. Remember administrative discretion is based on the powers delegated to the agency from the legislature (Congress) through a statutory delegation. The relationship between the kinds of powers available to be granted to the agency by Congress (the limits of congressional power), and the amount of power actually granted to the agency by the legislature within those outer limits placed on Congress is visually represented here:
Think of administrative discretion as the amount of room an agency has in implementing a statutory delegation. For example, a statutory delegation might be quite specific, stating that an agency is to engage in specific steps to achieve a statutory goal. Requiring the installation of a specific technology to ‘scrub’ sulfur from coal-burning power plants leaves little discretion; the agency simply ensures all coal-burning power plants are installing and using the same ‘scrubber’ technology to filter out sulfur emissions. An alternative example with greater discretion may be a delegation that states a particular
Any ambiguity as to whether a statutory delegation is mandatory or permissive is resolved by the judiciary.
Page 17 of 29 goal, like ‘clean air,’ but leaves it up to the agency to decide both what constitutes “clean air” and how to develop regulations in order to get to the goal of clean air; in this example there is a great amount of discretion left to the agency by the statutory delegation. • • Statutory language that is vague (without details) provides greater discretion to agencies when responsibilities are being delegated. Statutory language that is detailed and comprehensive provides less discretion to agencies.
Visually we can represent the concept of statutory delegation and discretion in the following schematic:
The black box represents the extent of agency discretion granted by the legislature when delegation a statutory duty to an agency. Thus, all actions by the agency must be found to exist wholly within the box; any act by the agency that exists outside the box is outside of its discretion (and brings up hierarchy of law issues we will discuss in a moment). It is important to remember the box itself can vary in size: • There is no box when a statute does not delegate any obligations of the statute to an executive entity.
Page 18 of 29 • • There is a small box where a statute delegates very little responsibility to an executive entity in implementing the goals of the statute. There is a large box where a statute delegates lots of responsibility to an executive entity in implementing the goals of the statute.
Remember, the box created by the statute is one question that needs to be answered. However, we must also determine whether or not the box itself allows for the conduct it envisions. For example, a statute that gives authority to federal agencies to engage in actions that violate constitutional principles is an invalid statute, thus the box gave discretion to an agency it did not have the power to give (as the constitution represents the supreme law of the land). This is where the hierarchy of laws comes back into our minds as a conceptual tool by which we evaluate legal frameworks that involve administrative functions. B. Judicial Controls Judicial controls over administrative acts cover two broad areas of review: • Ensuring the agency action is within the powers (box) delegated to the agency by the legislature. o This includes both the specific delegation created under a statute and the limitations placed on the agency action by other statutes (for example the APA)7. • Ensuring the agency action is in compliance with other legal limitations, most particularly constitutional requirements (such as due process requirements, protections against self-incrimination, protections against discrimination, etc.) One of the most important aspects of judicial review is the standard of review used by the courts when reviewing agency actions. Understanding the standard of review employed by the courts helps us better understand the extent of agency powers, particularly the way in which a court determines agency discretion in relation to the hierarchy of laws. In other words, what questions does a court ask itself when reviewing an agency act to ensure the act is within both constitutional limitations and statutory limitations? To answer this question we can review the Chevron doctrine of deference. Recall above that statutory delegations can be seen to create both rights and obligations on the administrative body; rights in the sense that the delegation grants power to the agency to have authority over a particular field (environmental protection, gun control, narcotics, tax collection, etc.), and obligations in the sense the delegation
For example, the judiciary might review a challenge to the agency action as not being within the powers delegated to the agency under a particular statute. In addition, the judiciary may review the agency action in relation to Administrative Procedure Act requirements, like whether or not the agency followed proper notice and comment procedures in its rulemaking process.
Page 19 of 29 limits agency action. The limits placed on agency action occurs in two ways; there are limits on the amount of power granted to the agency in a particular field, and also limits on the amount of discretion granted to that agency within a particular field. Where a statutory delegation gives detailed instructions on how the agency is to act (“agency shall engage in the following detailed approach in making the air clean: (1) find stationary sources of air pollution; (2) determine the amount of pollution; (3) use the approved method of control as stated in this statute; etc.), then there is little discretion left to the agency. Alternately, where the delegation is vague and thus provides little details on meeting a policy goal (“agency shall find ways to make the air clean”) there is greater discretion left to the agency in deciding how to meet the goal. Based on the above, judicial review employs the following two-prong approach under the Chevron Doctrine: • Look to the statutory language: is the language explicit, providing the agency with the ability to do what they have done? If yes, then the agency is operating within its statutory discretion (assuming the action does not violate other statutes or constitutional protections of course). If no, then ask the second question. Is the agency action a reasonable interpretation of the language set forth in the statute? o In answering this question, the court applies the doctrine of deference, meaning that an agency’s interpretation of the statutory delegation will be considered ‘reasonable’ so long as there is some connection between the language of the statute and the agency act. A visual representation of judicial review of agency actions is provided here:
Page 20 of 29 In the figure above, the red area represents constitutional prohibitions. Thus, even though Congress may act with authority in certain areas (like controlling speech), it cannot act in a way that violates a constitutional principle. Judicial review would include determining if the delegation is within the power of Congress; if the delegation was determined to fall within the red area, then it would be found unconstitutional. Under such circumstances both the statutory delegation and agency action would be found invalid. The yellow area represents a potentially valid area of authority held by Congress in its power to delegate. However, under the specific delegation provided in the statute, it is determined that Congress has chosen not to include this potential authority in its delegation to the agency. Thus, an agency action that is found to stray into the yellow area is judicially determined to be invalid because the action goes beyond the power delegated to the agency by Congress. The green area, like the yellow, represents a valid area of authority held by Congress in its power to delegate. Unlike the yellow area, however, the green area includes powers that were actually delegated to the agency through the statutory delegation under review. Thus, an agency action found to exist in the green area would be judicially determined to be a valid exercise of agency discretion. Remember, under Chevron, falling within the green area means the agency acted within both the boundaries of the field delegated to it and the agency action is also a reasonable interpretation of the agency delegation – i.e., it follows either the specific mandates of the delegation (if they are specific) or it follows the wide discretion offered in the delegation under the doctrine of deference. END OF SECTION.
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IV. Internal Administration
Most of what has been discussed already about administrative law focuses on external aspects of agency actions. For example, the hierarchy of laws indicates the general relationship between agency legal conduct (through the creation of regulations) and the role these regulations play in relation to other legal frameworks, particularly statutory and constitutional frameworks. In addition, other concepts like statutory delegation and the extent of agency discretion that flows from such delegations discussed the relationships between agency conduct and the outer limits of that conduct. What has not been discussed in any precise detail yet is the internal actions of the agency that result in formal agency ‘actions’ (for example the rule an agency ends up creating) and how those internal agency dynamics are controlled by administrative law principles. We have discussed some aspects of internal agency control mechanisms. For example, the Administrative Procedures Act (APA) has been mentioned as a federal law that dictates certain internal agency conduct. As noted, under the APA agencies must follow certain procedural requirements when creating regulations, such as the notice and comment requirements of informal rulemaking. In addition, when agencies are enforcing rules they have created they must respect certain constitutional safeguards such as procedural due process requirements. The focus on this section is on internal agency conduct, specifically focusing on its “quasi-powers” and the rights and responsibilities that flow from each power. By way of review, agencies, under administrative law principles, have the following powers: • Power to ‘Legislate’ (quasi-legislative powers): Agencies have the power to create regulations, or rules, that are official statements about how the agency is going about implementing its statutory obligations. These rules must be within the powers granted to the agency by Congress. We can know the limits of this power by looking to the statute and its delegation of responsibilities to the agency. For example, the IRS is empowered to make rules for the collection and enforcement of tax law. However, the IRS is not empowered under tax law to create new taxes; creating taxes is the purview of Congress and this power has not been delegated to an agency (and likely cannot under separation of power limitations). Power to ‘Administer’ (quasi-executive powers): In order to carry out its delegated functions, agency often has to engage in executive branch-type functions that include, primarily, the power the enforce its responsibilities under statutory delegation. This includes the power to investigate, charge, and prosecute those it believes are violating the rules it has created to carry out a statutory goal. For example, the IRS has the power to audit your personal tax return to determine if you have properly identified all of your tax obligations. If it feels you have not done so the IRS can ‘audit’ you to investigate whether or not you have complied with tax law. If it believes you have acted fraudulently, then the IRS can bring ‘charges’ against you to determine the validity of your actions.
Page 22 of 29 • Power to ‘Adjudicate’ (quasi-judicial powers): Finally, agencies have the power to act as a finder of fact by creating tribunal settings in which evidence is presented to help the agency in carrying out its statutory obligations. For example, the IRS has the power to create ‘trial-like’ settings where evidence is presented before it to determine whether or not an individual has complied with federal tax law.
The power to legislate is bounded primarily by internal rulemaking procedures under the APA. The power to administer – including the rights to investigate and prosecute – are bounded primarily by statutory delegations (creating the power) and constitutional constraints (limiting the power). Finally, the power to adjudicate is limited by procedural due process considerations. A. Power to ‘Administer’ – Agency Capacity and Personal Liberties In looking at different parts of internal agency administration, we can see that a good deal has already been provided on the power to administer, at least in terms of the role statutory delegations and constitutional limitations play in this power. For example, the degree to which an agency has a power to investigate, subpoena, and otherwise infringe on personal liberties is bounded by statutory authority on the one hand, and constitutional protections on the other hand. A visual representation of this limitation is presented here:
Page 23 of 29 Thus, when reviewing internal administrative powers (quasi-executive powers), you will note the materials (cases presented, summaries, points made) really focus on understanding just where the boundaries between the green area is in relation to the red areas in the above-referenced figure. One point to make here is that the relative position of the green area above is subject to change over time. For example, the following can occur: • Congress can amend a statute changing the amount of statutory authority delegated to the agency. In such a case the red box would move in one of two directions; the red box would move to the right if Congress limited the amount of statutory authority granted to the agency, and the red box would move to the left if Congress expanded the statutory authority granted to the agency. If Congress repealed the statute, then it is possible the entire green area would be removed, meaning the agency would no longer have any authority to regulate in the area if the statute granting authority ceased to exist. Cases interpreting constitutional limitations can refine our understanding of those limitations over time, thus moving the red block on the right of the diagram further to the left (where constitutional limits on government action are expanded), or further to the right (where constitutional limits on government action are contracted through case law). This is one reason U.S. Supreme Court cases are important; they help us understand the U.S. Constitution in relation to various facts over time, thus refining our knowledge of constitutional limitations on government action.
In some sense, we are drawn back to our hierarchy of laws where we are viewing the interactions between the powers granted to agencies (by statute) and the limitations on agency conduct in carrying out those powers (by constitutional protections). Indeed, we can review specific examples of agency conduct and consider the extent to which that conduct is ‘allowable’ under the statutory delegation, and then, the extent to which that conduct (even if allowable under statutory delegation) is constitutional? This is the conceptual framework by which agency administrative authority is analyzed. B. Power to ‘Legislate’ - Internal Rulemaking Procedures As noted earlier in our discussions, agencies have the power to make rules as a means to carry out the responsibilities granted to the agency under a statutory delegation. Recall, Congress can pass a statute that tells an agency to “make the nations waters clean” and let’s say the statute even includes a specific standard of what “clean water” means, thus making it easy to identify the goal in context (say no more than 10 parts per million of ‘pollution’ in the water – something quantifiable). This statutory goal is clear, but the means of achieving the goal is not clear. Because Congress did not explain the means in the statute, the agency is left to come up with ways of achieving the statutory goal; this is where rulemaking becomes an important function of an agency. Remember rulemaking is not adjudication, or things that bring us squarely into the agency’s quasi-judicial powers (that will be further explained below). In adjudication, an agency is applying facts in a way to resolve an outstanding question, just like facts would
Page 24 of 29 be presented in a hearing to come to a determination on an issue (a trial to determine the ‘guilt’ or culpability of an accused person). In adjudication the rules establishing guilt already exist and these rules are simply being applied to a set of facts: no new rules are being created. In a rulemaking procedure, the agency has set out to create new rules specifically. Thus the difference between adjudication and rulemaking can be identified (in difficult circumstances) by closely observing the goals of the process: • Where the goal is to create a new rule, then the process is most likely rulemaking (and thus must be done in accordance with Administrative Procedures Act (APA) rulemaking requirements: informal, formal, hybrid). Where the goal is to apply an existing rule to a set of facts, but not to create a new rule (or a new subset of an existing rule), then the process is most likely adjudication.
The importance of this distinction is really about following rulemaking procedures outlined in the APA. This most often occurs where an agency is attempting to couch an action that is fundamentally rulemaking in adjudicatory terms, thus avoiding the requirements of the APA. Of course, any agency action found to be rulemaking that does not comply with APA procedures is invalid as a matter of law – something to remember in understanding the importance of the distinction between the two activities. Agencies may sometimes opt for a more expedient way to implement a rule-like outcome and thus try to use adjudication as a way of creating what is in essence a rule. Some of the judicial tools developed to distinguish when this is occurring include: • • • Whether the decision in the adjudication has a substantial impact beyond the immediate facts presented. If it does, it may have ‘rule-like’ characteristics. Whether the decision is generally applicable: if so, more rule-like. Whether the decision has a future effect (goes beyond the bounds of the specific facts of the individual case: if so, more rule-like.
Under the Administrative Procedures Act (APA), there are two primary ways used to make rulemaking, and one hybrid method often employed in complex and technical settings. A summary of the three methods follows here: • Informal (APA §553) – Notice and Comment. Does not require a formal meeting of the public and government officials. A proposed rule is made public through lodgment in the Federal Register. The public has a certain amount of time to submit written comments to the proposed rule. The comments are considered by the government agency, and modifications might occur. If there are modifications, an updated proposed rule will be published in the Federal Register, and further comment sought. A deadline for this procedure is established, and the agency will ultimately submit a final rule for publication in the same Federal Register. Once a final rule, it is also given a specific citation in the Code of Federal Regulations (at the federal level). Once codified, it has binding effect (similar to law – or what we have referenced as the quasi-legislative power of the
Page 25 of 29 agency), but is the lowest form of law in our hierarchy of laws. • Formal (APA §556, 557) – adjudicatory procedure (trial-like). A very expensive proposition for agencies. Since it requires a trial-like procedure, it means a lengthy proceeding where evidence for and against the proposed rule is presented to a tribunal. It allows advocates for various positions to advance evidence in their favor, and cross-examine the evidence presented by other parties. Some of these formal rulemaking procedures have taken years to complete, resulting in little substantive change from the original proposed rule. Hybrid (APA §553-plus) – allows some testimony. Hybrid rulemaking has been favored in recent years for complex rules that might require more than an informal procedure, but still seeks some cost and time saving measures outside of the formal, trial-like procedures. In summary, parties from various interest groups are brought together at the invitation of the agency. The newly proposed rule is then discussed, and consensus-building efforts are initiated (the different viewpoints are attempted to be resolved during this process). Each party usually must give up some part of their position in order to facilitate the softening of other party interests. If it works correctly, there is a formal agreement at the conclusion of the sessions whereby a final rule is negotiated from the process. This process is somewhat similar to how international agreements (conventions) are struck between several nations.
We can see agencies certainly have the power to make rules, which is a quasi-legislative function. However, this power is not absolute, as the rule must be in-line with the legislative delegation of power granted to the agency (the rule cannot exceed the delegation granted by the statute). Similarly, agencies are not free to determine what is a rule and what is not. Often, in the interests of efficiency, an agency may wish to call a decision an interpretation or adjudication of a rule simply because a new rule generally requires a certain procedure before implementation (informal, formal, or hybrid). However, if a court determines the agency decision to have certain characteristics (future effect, general applicability, substantial impact), then the decision is determined a rule. If that rule did not follow the minimal requirements of informal rulemaking (APA §553), then it is invalid. The implications for agencies is obvious, as a determination of invalidity can effect numerous decisions made at the most basic levels of agency operations. C. Power to ‘Adjudicate’ - Internal Procedural Due Process Requirements The power of adjudication (quasi-judicial powers) is really about the agency having the capacity to act as finders of fact, apply legal standards (including rules passed by the agency) and rendering decisions for or against a party. For example, the IRS may conduct a hearing to determine whether a citizen has properly paid all taxes owed. The hearing is not an official court proceeding, but rather a formal hearing within the agency where representatives of the agency hear evidence (provided by other members of the agency) and apply rules to determine whether all taxes have been properly paid as set forth in federal law (the Internal Revenue Code in this example). The agency is given this
Page 26 of 29 ‘power’ because it is generally seen to be in the best position (from a resource and expertise standpoint) to make an initial determination on the claim (whether all taxes have been paid). The actions of the agency in its adjudicatory role are bounded in the same ways as described earlier regarding limitations on agency conduct. For example, the agency can only determine your culpability in relation to its statutorily delegated powers; the IRS could not adjudicate a citizen for illegal narcotic possession because the IRS is not empowered to implement federal drug law. In addition, the agency must comply with constitutional protections; it cannot engage in actions that deprive a citizen of constitutional rights as it proceeds in its adjudication. So, once again, we are focused squarely on the concept diagramed earlier under the agency’s power to administer where, like the power to administer, the green box of agency power to adjudicate is sandwiched between red boxes of statutory authority and constitutional limitations. A visual representation is presented here:
Many of the major issues that arise in agency adjudication have to do with constitutional protections, particularly procedural due process requirements. Procedural due process is a constitutional protection that ensures persons (usually citizens but not always) are afforded a sufficient procedure when government takes action against them. Generally, in order to qualify for procedural due process considerations, two things must be shown:
Page 27 of 29 • • There is government action (and any public agency action would likely meet this requirement); and The government action has impacted a property right of the person being impacted.
Thus, in order to trigger procedural due process safeguards, the government must act in a way that removes a property right. A property right can include a variety of things, for example one’s right to worker’s compensation or social security benefits (or one’s right to a determination of whether they qualify for those benefits if qualification is not automatic). There is an entire history of case law that discusses the evolution of understanding exactly what constitutes a property right so that government action affecting that right can be analyzed under constitutional procedural due process requirements. This history surrounds the distinction between a privilege (a right that can be earned but is not guaranteed by the U.S. Constitution) and a right (something automatically guaranteed by the U.S. Constitution). This distinction is almost irrelevant today based on the evolution of case law, and we now know that as long as some property right is at-stake (including the determination of one’s entitlement to a property right – like whether one is entitled to worker’s compensation benefits, a property right only earned under certain conditions that must be met), then procedural due process must be followed. The main issue in this area is not whether procedural due process is due (it is relatively easy to figure this out), but rather how much process is due? For example, does the denial of certain government benefits (like social security disability benefits) require a formal hearing, or is a summary review of a claim with a letter of denial sufficient? If a public university (a government ‘actor’ for purpose of procedural due process requirements) decides not to rehire an instructor after a one-year contract expires, is there a procedural due process requirement that must be followed? If so, how much? These are the kinds of questions that are involved when thinking about procedural due process, specifically: • Has the government action triggered procedural due process considerations? (This question is answered by the two-prong question identified earlier requiring government action and a property right at-stake). If so, how much process is due?
The amount of process that is due depends on the degree of property right at-stake: the greater the property right, the greater the amount of due process required. This concept is visually expressed here:
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As can be observed in the figure, the amount of procedural due process required has a positive relationship with the degree of property right at-stake; the greater the degree of property right at-stake, the more procedural due process required. The following examples help to place procedural due process requirements in context: • Someone who is charged criminally by the state with a crime that can result in a prison sentence has a property right to be free from inhibition at-stake. Because this property right is significant (probably one of the most important property rights in a free society), there is a significant amount of procedural due process required. The procedural due process requirement is satisfied by having a trial (a formal procedure where evidence is presented against the accused person and the accused has the right to confront (cross-examine) the evidence against them as well as present evidence in their defense.8
Note that those accused of a crime also are entitled to an immediate hearing to determine if there is sufficient evidence to hold the person for a trial on the charges (an arraignment hearing). This immediate hearing is another procedural due process safeguard that ensures there is a sufficient basis for the charges against the person. Even where charges are substantiated, the person is still entitled to a determination of ‘freedom’ prior to the trial (bail hearing) – yet another form of procedural due process.
Page 29 of 29 • Most states require children of a certain age to attend primary and secondary education (K-12). The requirement of mandatory education creates a property right in education. Thus, when the state deprives a student of their right to education, procedural due process considerations apply. Deprivations of the right to education span a variety of degrees, from a detention (little property right deprivation requiring very informal procedural due process – a quick discussion with the teacher or principal) to expulsion (significant property right deprivation generally requiring a formal hearing where evidence is presented and challenged). Public employees have a property right in their employment, and the amount of procedural due process required depends on the extent of the property right atstake. For example, an at-will employee has essentially no property right in future employment because there is no expectation of employment in an at-will relationship beyond immediate employment. Thus, there is very little procedural due process required: a letter giving notice of termination with no other reason will generally suffice. Public employees who have a contract for a specified term (say 2 years) have a future expectation of employment until the expiration of the contract. Thus, action taken against the employee before expiration of the contract would require more formalized procedural due process requirements. Finally, employees under substantial property rights, like civil service protection, required formal procedural due process requirements, which generally include notice and a hearing on the action against the employee.
In summary, the degree of formality of procedural due process rights depends on the property right at-stake: the greater the property right, the greater the degree of formality required. There is a fundamental tension between efficient administration and individual rights. Administrators may likely prefer the ability to make unilateral decisions based on the information they feel is most relevant, without having to consider additional insight or arguments from the individual. If administrative agencies were insulated from individual voices, it would undoubtedly lead to a more efficient administrative state. Of course, administrators can abuse their powers. As representatives of government, their decisions affect the citizenry in fundamental ways (welfare benefits, disability benefits, right to engage in business, the right to maintain personal and real property, etc.). As such, the U.S. Constitution demands individuals are given due process at some point during the agency decision-making process. Whether that process (and how much) is required to be given depends largely on the context of the case, and you now have a framework on determining when due process is required, and when it is, how much process needs to be given. END OF SECTION END OF DOCUMENT