Admin Law, 2008

PART I: ADMIN AGENCIES AND THE CONSTITUTION

The Nondelegation Doctrine

Analysis:
1. Three formulations of the nondelegation doctrine:
A. Congress can’t delegate period—minority view.
B. Nondelegation doctrine imposes limits—Congress can’t give away
unfettered power; must give guidelines but how much guidance is
debatable—widely-held view.
C. Posner-Vermuele: once Congress has passed a law and given it
away, it’s no longer w/in their purview and the exec/judiciary now
has the power. (But there are powers that Congress cannot give
away, like powers vested in sub-committees, constitutional powers
like Senate’s power to confirm, can’t give away power to vote etc.)
2. Goals promoted by the nondelegation doctrine:
A. Political accountability (since Prez is democratically elected)
B. Democratic values of representative govt and accountability—
decisions made by the collective Congress better protects freedom
and reflects will of the people.
C. Social K theory: representative decision-making allows people to
maintain certain private rights unless there is explicit authorization
to turn them into c/l wrongs.
D. Promotes rule of law values:
i. Promotes planning
ii. Transparency: tells you what is forbidden and what is
permissible
iii. Cabins discretionary authority of enforcement officials
iv. Constitution’s dual branch law-making
v. Promotes factions
3. Congress can’t grant unfettered discretion/ authority over very broad
subject matter. ~Schechter
4. Congress must provide intelligible principles to cabin discretion and
subject matter. It must provide meaningful guidance to the agency
and a court must be able to measure agency action against that
limitation to determine if there was compliance w/ Congress’ will.
~Amalgamated
5. Reverse engineering/constitutional avoidance: as administrative
agencies become more necessary for the bureaucracy to function, cts
might be persuaded by the end goal to infer “intelligible principles” or
point to terms in the statute and call them limiting terms in order to
save a statute and avoid answering the constitutional q.
~Amalgamated/Benzene
6. Limiting discretion: Benzene-look to the purpose of the statute in
order to infer limiting principles that Congress must’ve reasonably
meant
7. Limiting subject matter: American Trucking-the broader the subject
area, the more the need for limiting principles; but cts will not second-
guess Congress when it delegates policy-making authority to those
who execute or apply the laws

Cases
1. CASE: ALA Schechter Poultry v US

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A. Facts: NIRA granted power to Prez to enact codes of “fair

competition” by soliciting proposal codes from industry trade
groups that the Prez could then accept, reject or modify at will. D’s
were convicted of violating the Live Poultry Code of NIRA.
B. Held: SC strikes down the codes of “fair competiton” of NIRA
finding them to be an unconstitutional delegation of power to the
prez.
C. Reasoning:
i. Lack of stds to guide the Prez gives him unfettered discretion:
a. Subject matter: very broad—national economy
b. Discretion: “fair competition” is not defined by act or
jurisprudence unlike the terms “unfair;” has the power to
accept, reject or modify at will; only has to make sure that
the proposals come from “truly” representative trade
groups
ii. Prob is compounded by the fact that industry trade groups get
to propose the codes—conflict of interest
D. SC doesn’t offer stds to determine whether the subject matter is
too broad though.
E. HYPO: if NIRA were passed today, and Congress included language
like “unfair competition” or a reasonableness std, then probably
pass constitutional muster.
2. CASE: Amalgamated Meat Cutters v Connally
A. Facts: Meat Cutters Union challenged the Economic Stabilization
Act, which froze prices and wages and granted authority to prez to
enact further price/wage controls for a limited duration. This is the
third in a series of price stability acts. Occurs after APA is passed.
B. Held: The ESA is not a forbidden delegation of power since it
provides “intelligible principles” to guide the prez’ actions in the
form of inherent stds of “fairness and equity.”
C. Reasoning:
i. Intelligible Principle Rule: there has to be meaningful
guidance given by Congress to the Prez AND a court must be
able to review it later on to measure compliance w/ Congress’
will
ii. Unlike Schechter, there are intelligible principles here:
a. Discretion: The intelligible principles of stds of “gross
inequity” and “fairness” are inherent in the statute and
more comfortable since more experience w/ agencies by
this time.
b. Subject matter: limited to price/wage freezes in a limited
window of time
iii. Additional important hook: once the prez has developed stds at
the outset, he is locked in and must follow them.
iv. Political climate changed: APA has passed by this point and this
is the third in a series of similar acts.
v. Reverse engineering: SC is persuaded that the ESA is a
valuable and reasonable endeavor to address cost-push
inflation, so while they could strike it down for lack of explicit
intelligible principles, they are willing to read in guidelines to
avoid having to do so.
D. Schechter, distinguished:

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i. Subject matter: ESA’s subject matter is more narrow than

NIRA/national economy
ii. Discretion: “fair and equitable” seems as vague as “unfair
competition” but probably has more meaning by this point in
history
iii. No delegation to private groups here.
iv. APA has passed so less unsure about agencies by now.
3. CASE: Industrial Union v American Petroleum Institute (The Benzene
Case)
A. Occupational and Safety Hazard Act:
i. 3.8: the std requires conditions or practices, reasonably
necessary or appropriate to provide safe or healthful
employment and places of employment
ii. 6(b)(5): for toxic materials, the std is set at that which most
adequately assures, to the extent feasible, on the basis of the
best available evidence, that no employee will suffer material
impairment.
B. Facts:
i. OSHA has defined benzene to be a carcinogen. OSHA has
defined carcinogens to be a type of toxic material. Thus
benzene = toxic material. OSHA’s policy is that carcinogens
have no safe levels thus lowest feasible level is best.
ii. In 1971, per the Occupational Safety and Hazard Act, SoL set
the permissible exposure level to benzene at 10 ppm. OSHA’s
research said that 10 ppm would require millions in compliance
costs but did not quantify the amount of the benefits to each
category of workers (but according to their studies, the benefits
are probably small).
iii. OSHA recommends further limiting exposure level to 1ppm. (Ct
reasonably assumes that further limitations drive up
compliance costs.) OSHA did not have scientific evidence on
the effects but rather, assumed a direct correlation b/t
exposure and harm: the less exposure, the less harm, thus
OSHA wanted to lower as much as they could. They solicited
comments as to whether 1 ppm was feasible; did not solicit on
whether exposure to less than 10 ppm would produce health
benefits or not.
C. Held: SC says that as a threshold matter, SoL must find that
benzene poses a significant health risk and that a new, lower std is
reasonably necessary to combat that health risk.
D. Reasoning:
i. If the Ct agrees w/ the govt’s interpretation that the Act does
not require the risk from a carcinogen to be sufficiently
quantifiable and understandable, then that would amount to a
sweeping delegation of power and it “might be
unconstitutional” under Schechter, thus Ct implies an
intelligible principle into the statute in order to avoid the
constitutional question. (It’s not clear though that the SC’s
interpretation is unreasonable so plurality probably didn’t
abuse its authority.)
ii. The purpose of the Act was to eliminate significant risksof
harm, not to create a risk-free workplace. Congress could not
have meant to OSHA the power to regulate merely b/c the
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substance posed some harm. Under such an interpretation,

OSHA would have the power to impose enormous costs that
might produce little to no benefits.
iii. 3.8 says SoL has to promulgate stds that provide safe or
healthful employment. “Safe or healthful” means the absence
of significant health risks, which is a limiting principle that
allows OSHA to reach certain kinds of conduct only.
iv. Thus as a threshold matter, the SoL must first find that it is
more likely than not that benzene exposure is a significant
health riskthat can be eliminated through changes in practice.
“Significant risk” is not a mathematical straitjacket. SC leaves
it up to OSHA to define that and prove that it was met. It does
not require scientific certainty.
v. This is like Amalgamated—SC infers an intelligible principle to
cabin discretion and save the statute—SC probably considers
the purpose of the statute to be valuable. On the other hand, a
literal reading of 6(b)(5) seems to require that SoL issue
regulations even if one person is at risk of suffering material
impairment.
E. Powell concurrence: Even if OSHA had met its threshold burden of
proving that benzene is a significant health risk, the statute further
requires a cost/benefits analysis. Congress would not have
intended a policy that would significantly impair the US’ economic
competitiveness if OSHA could ignore economic considerations and
focus solely on health considerations.
F. Renquist, concurring in the judgment that the regulation is not
legal:
i. This is a flat out unconstitutional delegation of power w/ no
limiting principles.
ii. Is unwilling to infer a limiting term b/c doesn’t want cts to be in
charge of cleaning up Congress’ mess afterwards if Congress
always declines to put in limitations.
iii. Renquist is ok w/ the c/l std of reasonability b/c he has faith in
the cts and cts have plenty of experience with that. He’s
probably could not justify using reasonableness as a std for
agency regulations since agencies are perhaps more political
bodies and are likely to run amuck as opposed to cts.
G. Dissent
i. The plurality improperly requires the SoL to show that a
carcinogen is “more likely than not” a “significant health risk”
when all that the statute requires is the std be “reasonably
necessary or appropriate.” Nothing in the statute or the
legislative history supports the plurality opinion.
ii. It’s not proper for the cts to infer terms and “save” the statute.
Cts should stay out of this, a la Lochner.
iii. Ct should defer to the agency’s determination that exposure
more than 1 ppm posed a definite, albeit unquantifiable, risk
which further amounts to a significant risk.
H. Probs w/ ignoring the constitutional question and inferring in terms:
i. Reduces Congress’ incentives to legislate w/ particularity
ii. Maybe reflects a misunderstanding of the science, or of
carcinogens

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iii. Increases costs and uncertainties associated w/ interpreting the

rules
iv. Might lead to other cases where cts reject actual legislative
judgments
4. CASE: Whitman v American Trucking
A. Facts: Sec 109(b)(1) of the CAA instructs the EPA to promulgate
rules establishing “ambient air quality stds, the attainment and
maintenance of which, in the judgment of the Administrator, based
on the criteria of Sec 108, and allowing an adequate margin of
safety, are requisiteto protect the public health.” App Ct had
found that the EPA’s interpretation (but not the statute itself) of
“requisite” violated the nondelegation doctrine.
B. Held: A constitutional delegation of power need not require the EPA
to prove a “determinate criterion” for saying how much of the
regulated harm is too much. App ct reversed.
C. Reasoning:
i. When Congress confers decision-making authority to an
agency, Congress must lay down by legislative act an
intelligible principle to which the acting body must conform to.
ii. An agency cannot cure an unlawful delegation by adopting in
its discretion a limiting construction of the statute. The very
choice of opting in and opting out is an exercise of the
forbidden legislative authority.
iii. “Requisite” is an intelligible principle. SC agrees w/ the govt’s
definition of “requisite” to mean “sufficient but not more than is
necessary.”
iv. This provision is well w/in the outer bounds of Ct’s
nondelegation precedents. The degree of agency discretion
that is acceptable will vary according to the scope of the power
congressionally conferred. More agency discretion requires
tighter intelligible principles.
v. Where the agency power is extremely limited, the Act need not
provide intelligible principles. But when the EPA’s regs may
affect the entire national economy, substantive legislative
guidance may be necessary. Words like “imminent, necessary”
and “hazardous” (taken from Touby) are sufficient intelligible
principles. There is no requirement that agencies specify how
necessary or how hazardous something must be. Agency gets
to decide what “requisite” means.
vi. Cts will not second-guess Congress regarding the permissible
degree of policy judgments that can be left to those executing
or applying the laws.
vii. After this approval of a broad delegation of power, it’ll be
harder to get a majority on the Court to find an unconstitutional
delegation. The nondelegation doctrine has been weakened.
D. Thomas, concurring:
i. There must be some limit as to what authority Congress can
delegate, even if they tried to delegate w/ intelligible principles.
The existence of intelligible principles doesn’t automatically
justify a delegation.
ii. Can’t give big decisions to agencies, even if accompanied by
intelligible principles. Thomas is concerned w/ broad subject

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matter delegation and not totally persuaded by the efficacy of

intelligible principles to cabin authority.
iii. Prob is that Art I vests “all legislative powers” in Congress;
“intelligible principles” aren’t mentioned in the Constitution.

The Executive, Congress and Administration

Analysis
1. Congress can delegate quasi-judicial and quasi-legislative powers to
agencies that sit in the executive branch. Once Congress makes the
delegation, it cannot reserve power to one of its own houses in order
to exercise continuous authority over that agency. It must go through
dual-branch lawmaking to pass stds in order to ensure that the agency
has complied w/ its will. ~Myers/Humphrey’s
2. Reserving power to one house undermines the value of dual-branch
lawmaking, representative democracy and has the potential for a
hold-up game over the executive; might also result from undue
political influence over one house of Congress or more likely, a
subcommittee of that house. ~Myers/Chadha/Bowsher
3. Aggrandizement/Encroachment: thought to be a greater threat to
lawmaking b/c it erodes SoP, benefits of political accountability:
A. Myers/Chadha: one-house veto that results in greater power to a
unit than the whole entity is unconstitutional; we trust both houses
acting together
B. Bowsher: even reservations that seem to be functionally the same
thing as normal lawmaking may not pass constitutional muster
4. Independence: b/c the prez can continue to exercise his constitutional
functions despite the limits
A. Humphrey’s Executor: When the agent exercises quasi-judicial or
quasi-legislative power, Prez need not solely exercise removal
power if Congress has said so
B. Mistretta: look at the purpose and function of the delegation and
ask whether it goes to the core function of the branch w/ also
impeding it to determine constitutionality
C. Morrison: if the existence of the delegation won’t impede the
function of the executive, and there are good cause limitations,
then it probably means that the agency is not entirely
“independent,” and can be limited by Congress; although Congress
did not specify what “not entirely independent” means.
5. Truly independent agencies’ officers serve at the pleasure of the
president and can be removed at will.
6. Practically speaking, even if a president can’t find a rule-based reason
to remove an officer, he can exert other political pressure and other
tactics to make the job unattractive and effectively compel a
resignation. Agency heads often voluntarily leave on their own w/
regime changes.

Cases
1. Myers and Humphrey’s Executor
A. CASE: Myers v US-aggrandizement

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i. Myers is appointed as postmaster general; statute provides

that PG’s shall be appointed and may be removed by the
President and w/ the advice and consent of Congress.
ii. Held: The postmaster was a “purely executive officer” and thus
the prez should be able to control him. SC strikes down the
portion of the statute requiring the advice and consent of
Senate.
iii. Truthfully, the PG exercises quasi-legislative and quasi-judicial
duties including setting stamp prices, prosecuting postal-
related crimes, allocating the post office budget etc.
B. CASE: Humphrey’s Executor v US-independence
i. Prez wants to unilaterally remove FTC commissioner whose
views differ from Prez’. Law says Prez can only remove for
enumerated good cause reasons, ie malfeasance etc.
ii. Held: Myersdoes not control. Prez can only remove for reasons
given in the statute. The statutory restrictions are not an
unconstitutional encroachment into exec power.
iii. FTC commissioners exercise quasi-legislative and quasi-judicial
roles like making regs on antitrust issues and prosecuting
antitrust violations, consumer frauds etc.
C. The diff b/t Myers and Humphrey’s Executor:
i. In Myers, Congress had passed a law that reserved or
aggrandized power to the Senate to remove a PG in conjunction
w/ the Prez. When half of Congress is acting, it’s more
problematic—we’re worried about one house exercising power
to hold up the president, or making unconsidered decisions
since the other house isn’t participating; it tends to erode the
value of dual-branch lawmaking.
ii. In Humphrey’s Executor, Congress passed a law limiting the
ability of the Prez to remove commissioners but did not reserve
any power to any one house of Congress. Unless that law
encroaches on executive power or is unconstitutional in some
other way, the Prez must abide by the rule. The law was not
unconstitutional b/c the position was created by Congress to
carry into effect an independent regulatory agency that had
quasi-legislative and quasi-judicial powers as well as
enforcement powers. The law did not threaten SoP by
encroaching on the executive’s power or aggrandizing
Congress’ power—they weren’t giving themselves any extra
power.
iii. Hypo: If both houses of Congress pass a law to fire the PG, is
that constitutional? Yes considering the Prez has veto power—
the process would remain democratic and in accordance w/
dual-branch lawmaking.
2. CASE: INS v Chadha-aggrandizement
A. Facts: Under immigration law, the AG can choose to stay a
deportation if the deportation would result in ‘extreme hardship’ to
the alien. He must report this stay to Congress. If the House or
Senate then passes a resolution (legislative veto) denying the stay,
then AG must continue w/ the deportation. Here, AG stayed
Chadha’s deportation and the House passed a rez overturning that
decision w/o any public hearing, statement of reasons or recorded
vote.
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B. Held: The one-house veto is unconstitutional. One house of

Congress cannot veto a decision made by an agency that it has
delegated power to.
C. Reasoning:
i. By retaining power in the form of a one-house veto, that
increases the power of one house beyond their constitutionally
given maximum, thus it’s a new power. Alternatively, it’s
lawmaking by one house only. We’re less worried when
Congress gives power away. Congress cannot subdivide itself
and give power to individual units in a way that the entire
Congress doesn’t have. The Constitution lays out the only
permissible ways in which one house can act on its own.
ii. Majority’s arguments on presentment/bicameralism not that
persuasive b/c in each, at the time of the bill’s passing, the prez
and both houses approve of it. Might argue that this isn’t a
“law” thus no need to present to the prez but that creates a
slippery slope and raises q’s about what else Congress can do if
it can do more than pass laws.
iii. Majority will persuade by showing that there’s something diff
about entrusting one house versus an agency. We don’t trust
one house acting alone but rather, we trust both houses acting
together.
iv. There are no intelligible principles to guide the reservation or
delegation of power to itself.
v. We don’t want Congress to indicate its approval of legislative
change by inaction or the refusal to pass a one-house veto,
which could imply endorsement, acquiescence, passivity,
indecision or indifference. We want them to make affirmative
decisions.
3. CASE: Bowsher v Synar-encroachment
A. Facts: Under the Gramm-Rudman Act, the Prez can appoint a
Comptroller General (who seems to exercise both quasi-legislative
budgetary duties and quasi-executive budgetary duties) from a list
of candidates supplied by the Speaker of the House and the Senate
President. Senate must then confirm the appointee. The CG can
be removed from office at any time by a Joint Resolution of
Congress for one of the enumerated “for cause” reasons—
disability, inefficiency, breach of duty, malfeasance or moral
turpitude.
B. Held: Congress cannot retain removal power (beyond that in the
Constitution) over an executive agent exercising executive powers.
C. Reasoning:
i. The real issue is whether Congress gave any more power over
the CG than it had previously. It’s not clear that they did. The
joint resolution process is similar to the normal lawmaking
process. Congress seems to be giving itself authority very
similar to what it already possessed.
ii. Methods of Removal:
a. Joint resolution requires a presidential signature or a 2/3
override if prez vetoes—same form as a Bill. (Alternatively,
the Constitution calls for impeachment of the Prez, V-P, and
all civil officers of the United States, who may only be
impeached and removed for "treason, bribery, or other high
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crimes and misdemeanors.” Impeachment requires a

simple majority in the House followed by a 2/3 majority in
the Senate to convict.)
b. If the Joint Resolution provision didn’t exist and Congress
wanted to get rid of the CG, they could impeach him, have
the prez fire him or pass a new statute, eliminate the
position and create a new one.
c. If the prez agrees w/ the position, then impeaching is easier
than joint resolution.
iii. Majority holds that the Constitution does not contemplate an
active role for Congress in the supervision of executive officers.
If Congress could remove exec agents, then they’d interfere w/
SoP.
iv. But the Constitution only provides one way for Congress to
remove officers of the US: by impeachment, which is a long and
cumbersome process and also limited to cases of treason,
bribery or other high crimes and misdemeanors. If this is the
only way to remove, then Congress was trying to find an easier
way to the removal of exec agents.
v. Although Congress cannot reserve to itself the power to remove
executive officials, it can limit the prez’ ability to remove
certain officers, who exercise quasi-legislative or quasi-judicial
duties by definition, b/c the restrictions don’t really interfere w/
the Prez’ ability to carry out his constitutional duties. So
restrictions are not encroachments.
4. CASE: Mistretta v US-independence
A. Facts: Congress delegated power to the US Sentencing
Commission, a 7-member board, residing in the judicial branch.
The Commission has the legal power to write sentencing guidelines
that are binding on fed judges so as to reduce sentencing disparity.
Act empowered prez to appoint all members w/ advice/consent of
Senate, chosen from a list of candidates compiled by the Judicial
Conference of the US. Act also allows prez to remove members for
good cause, ie neglect of duty or other good cause shown.
B. Held: The Sentencing Commission is not an unconstitutional
delegation of power and does not encroach upon the judicial
function or violate SoP.
C. Reasoning:
i. Congress’ decision to create an independent body to
promulgate sentencing rules is not unconstitutional unless
Congress has vested in the Commission powers that are more
appropriately performed by another branch or that undermines
the integrity of the judiciary.
ii. Congress may delegate to the judicial branch nonadjudicatory
functions that do not invade the prerogatives of another branch
and that are central to the mission of the judiciary.
iii. Hypo: what if there’s a benzene commission, like the
sentencing commission, that only regulates benzene? That’s
probably an unconstitutional delegation; benzene isn’t part of
the typical judicial authority as the judiciary can only decide
cases and controversies but can’t make laws about benzene.
Sentencing on the other hand, is very closely related to what
judges already do.

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iv. How can the executive allow the NLRB to adjudicate labor cases
but the judiciary can’t enact a benzene commission? The core
functions are diff. Judges aren’t elected whereas the exec is,
thus we want judges to be insulated from political influence.
We don’t trust judges w/ issues that might be susceptible to
outside influence. We’re less concerned when the exec does
some adjudicating b/c at least he’s held politically accountable.
5. CASE: Morrison v Olson: independent
A. Congress passed statute that gave a court the power to appoint an
“independent counsel” to prosecute high level political officials;
prez could remove only for “good cause” per the statute.
B. SC ruled that such a delegation is constitutional b/c the existence
of the independent counsel did not prevent the prez from
exercising his constitutionally specified functions. The “good
cause” limitations did not impede the functionality of the
executive.
C. The independent counsel was not entirely independent b/c she
could be suspended for “good cause” by the prez, though the ct
did not specify what that is.

Article II Courts
Analysis
1. Jurisdictional facts are reviewed by an Art III ct de novo. ~Crowell
A. Brandeis Crowell dissent + response as to why de novo might be
better.
2. State law claims cannot be final and binding and only subject to
ordinary review by a non-Art III ct. ~Northern Pipeline/Union Carbide
3. Public rights can be adjudicated in legislative courts.
~Crowell/Northern Pipeline
4. Does the delegation impair either of Schor’s interests?
A. Personal: right to be heard in front of a judge free from the political
influence of other branches? Can be waived
B. Structural: Art III’s independence and role in the govt is
nonetheless protected
i. Extent to which the essential attributes of judicial power are
reserved to Art III cts and whether the extent to which the
legislative ct exercises the range of power and jurisdiction
normally reserved to Art III cts
ii. Origins and importance of the right at issue
iii. Concerns that drove Congress to depart from Art III

Cases
1. CASE: Crowell v Benson
A. Facts: Crowell, a deputy commissioner of the US Employees’
Compensation Commission makes a factual finding that Knudsen
was injured while employed by Benson on US waters. Thus
Knudsen is owed workman’s compensation. Benson sues to enjoin
enforcement arguing that Crowell’s factual determination to trigger
jurisdiction was unconstitutional.
B. Held: In private rights cases, agencies are allowed to make
ordinary factual findings but cts have to decide jurisdictional facts

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for themselves. But the decision must be reviewable by a court.

Remanded for dist ct to find the jurisdictional facts for itself.
C. Reasoning:
i. Private vs public rights:
a. Private: liability of one individual to another; has to be
decided by Art III cts even though an agency may make
some factual findings
b. Public: cases arising b/t individual and govt; can be decided
by legislative cts b/c the rights are issue are
congressionally-created thus govt can decide how to try
them; legislative cts ok as long could survive due process
challenges
ii. The “essential attributes” of decision must remain in an Article
III court, but so long as it does, Congress may utilize
administrative decisionmakers in those private rights caes that
arise in the context of a comprehensive federal regulatory
scheme.
iii. AT: jurisdictional facts: trigger application of the statute;
although an agency could make a jurisdictional fact
determination, it must be reviewed de novo by cts. But it’s
hard to determine what a “jurisdictional” fact and what an
“ordinary” fact is. (Cts are really using the
jurisdictional/ordinary fact distinction to categorize facts that
shouldn’t be determined by an agency.)
iv. AT: ordinary facts: can be determined by an agency; there’s a
history of using nonjudicial factfinding and there’s efficiency
gains due to agency expertise
D. Dissent, Brandeis:
i. There’s no doubt that the final arbiters of any fact or law q are
the fed cts. The only real question is whether these facts are
reviewed de novo or whether the ct reviews a record compiled
by the agency and then gives it deference.
ii. Brandeis says that the majority wants jurisdictional facts to be
found de novo by why not just let the administrative body
collect the record and then let the dist ct judge decide the
jurisdictional facts.
iii. Probs w/ Brandeis’ reasoning that it’s ok to let a judge look at
an admin record instead of de novo: admin agency has
incentives to skew the record in their favor so judge won’t be
looking at an impartial record.
2. CASE: Northern Pipeline v Marathon Pipeline
A. Facts: NP is reorganizing in bankruptcy ct, an Article I court which
had most traditional Article III powers. The relevant statute gives
bankruptcy cts jurisdiction over all “civil proceedings arising
under” the federal bankruptcy law or “arising or related to”
bankruptcy proceedings so MP filed a state law K claim against NP
in bankruptcy ct.
B. Held: Plurality struck down the part of the statute that allowed
bankruptcy cts to decide ordinary state law claims as being an
excessive delegation of adjudicatory powers.
C. Reasoning:
i. Plurality said that Art I cts could be military courts, territorial
courts or cts that adjudicated “public rights.”

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ii. The statute had impermissibly removed most, if not all, of the
essential attributes of judicial power from Art III cts and vested
them in non-Art III cts.
iii. Admin agencies can’t handle private rights cases b/c that would
create “substantial inroads into functions that have traditionally
been performed by the judiciary.” W/ public rights cases,
Congress created the right so can create presumptions, assign
burdens of proof or create special tribunals.
iv. Today:
a. If there’s a q of whether a claim even belongs in bankruptcy
ct, the issue goes to the dist ct. That decision can then go
to the appellate ct who looks at it de novo.
b. Bankruptcy cts settle assets and all related tort/K claims so
that payments/judgments and assets can be properly
divided. Then appellate court would review the bankruptcy
ct’s judgment under a “clearly erroneous” std which is more
deferential than de novo.
c. Practically speaking, the bankruptcy cts are doing most of
the work; de facto, there’s quite a bit of deference being
given to the bankruptcy ct’s findings.
d. Moving from Art I cts to Art III cts requires a de novo std of
review.
3. CASE: Commodity Futures Trading Commission v Schor
A. Facts: Schor the investor sues Conti the broker for reparations
under the Commodities Exchange Act in front of the Commission
(although he also had the option of sueing in fed ct for a violation
of the Act). Conti brings ordinary compulsory counterclaim for
debt in a fed court diversity action but at Schor’s request,
dismisses it and re-files before the agency. Schor loses, Conti wins.
Schor argues that the agency could not have constitutionally
adjudicated the state law counterclaim per Marathon.
B. Held: The Commission could adjudicate the compulsory state law
counterclaim w/o violating Art III. (There was no dispute about
Congress’ authority to allow the Commission to adjudicate the
reparations claims.) Under the Art III functional approach, Schor
waived any personal right to have his claim adjudicated in an Art III
ct and looking at the structural factors, the court found that
allowing the Commission to adjudicate the counterclaim would not
intrude on the judiciary.
C. Reasoning:
i. Art III serves two functions:
a. Structural: protects the role of the independent judiciary
1) Extent to which the essential attributes of judicial power
are reserved to Art III cts and whether the extent to
which the legislative ct exercises the range of power and
jurisdiction normally reserved to Art III cts
2) Origins and importance of the right at issue
3) Concerns that drove Congress to depart from Art II
b. Personal: safeguards litigants’ right to have claims decided
before judges who are free from potential domination by
other branches can be waived
ii. Ct was persuaded by:

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a. Class of counterclaims that Commission could here was

limited
b. Decisions on those claims was subject to judicial review
c. Efficiency to hear the counterclaim
4. CASE: Thomas v Union Carbide: Northern Pipeline establishes only
that Congress may not vest in a legislative court or non-Article III ct
the power to adjudicate, render final judgment and issue binding
orders in a traditional K action arising under state law, w/o the consent
of the litigants and subject only to ordinary appellate review.

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PART II: SCOPE OF REVIEW

Questions of Fact and Substantial Evidence for Formal

Rulemaking/Adjudicating
1. Application:
A. Applies to: questions of fact in on the record formal
rulemaking or formal adjudication (excludes notice-and-
comment rulemaking)
B. APA 706(2)(E): “The reviewing court shall hold unlawful and set
aside agency action, findings, and conclusions found to be
unsupported by substantial evidence in a case subject to sections
556 and 557 or otherwise reviewed on the record of an
agency hearing provided by statute…
C. Requires a record to be produced that is the basis of agency action
and can be reviewed
2. Meaning of “Substantial evidence:”
A. CASE: Universal Camera: “substantial evidence” is enough to
overcome a DV or to get past SJ—could a reasonable fact-finder
find for the nonmoving party? Ct says that they have to overturn
the agency’s decision if, by looking at the fair worth and testimony
of the evidence, a reasonable jury could find otherwise
B. Clearly erroneous (appellate std for reviewing trial ct) >
substantial evidence  SE more deferential
C. CASE: Allentown Mack Sales v NLRB
i. NLRB makes factual determination that Allentown had not
“demonstrated that it harbored a reasonable doubt, based on
objective considerations as to the incumbent union’s continued
majority status after the transition.” NLRB ordered Allentown
to bargain w/ the local union after deciding that 17/23 were
arguably in favor of no union was not enough to constitute
“reasonable doubt.” SC reviews the NLRB’s decision using the
SE test.
ii. “Substantial evidence” = employer had to show “reasonable
doubt” based on commonly understood legal principles.
iii. But really, SE = could a reasonable jury make the same finding
as the agency
iv. Ct grants deference to the NLRB perhaps b/c they have
experience and expertise as well as perhaps inchoate
institutional expertise that gives more meaning to the “17”
than the simple majority that the court thinks.
D. ALJ—Agency—Judicial Review
i. If an ALJ makes a decision, the agency can still go back and
review the ALJ’s decision de novo, but it is limited to
considering the record compiled in the proceeding by the ALJ.
ii. Unlike an appellate ct reviewing a trial judge’s findings of fact,
the agency can substitute its judgment for the ALJ’s. But when
the company wants judicial review of the Commission’s
decision, the ALJ’s finding is itself part of the record considered
by the ct, and if it is inconsistent w/ the agency’s position, it
undercuts the agency and could therefore affect a court’s
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determination of whether the agency’s finding is supported by

substantial evidence
iii. When an agency makes a finding inconsistent w/ the ALJ’s
finding that was based on demeanor evidence heard before the
ALJ, the agency’s determination is the weakest b/c the agency
cannot itself assess the demeanor evidence.

Mixed Q’s of Fact and Law and the SE Test (Pre-Chevron)

1. How to determine whether a q is a mixed q of fact and law:
A. Is the statute ambiguous b/c some terms are not clearly defined?
B. What is the purpose of the statute?
C. What kinds of acts would fall under the disputed term?  if no
clear answer here, then this q is a mixed question of fact and law.
i. Best way to answer this might not be a pure look at legal
materials, but rather, at factual situations.
ii. If this becomes a case by case basis, then might be better to
defer to the agency.
D. Apply the law to the facts.
2. Why might a court want to defer to the agency on a mixed q of fact
and law when there’s substantial evidence?
A. Comparative expertise: if you want the agency to consult matters
in the world, then we want the agency to make the determination
B. Comparative procedural advantage or capacity: reviewing cts are
appellate cts and don’t take testimony or witnesses so if the
answer can be found just by reference to legal materials, then it’s
ok for the ct to answer but if the answer requires facts, then ct is
not in the best position
C. Jurisdiction/authority: to whom has Congress given the power?
D. Judicial role or comparative legitimacy: cts are responsible for
demonstrating or explaining the law but when it comes to issues of
fact or policy, maybe we’d prefer the agency to do it b/c they have
a democratic pedigree, value judgments and we’d rather let the
democratic actor make the call
E. Narrowness/broadness: there are some q’s that a ct will have to
decide once for an entire statute but on the other hand, we might
want case by case analysis on q’s where an agency will have to
decide multiple times for the statute so give the agency slightly
more deference for their efficiency gains
3. CASE: NLRB v Hearst
A. Facts: Publisher of four LA papers refused to bargain collectively w/
a union representing newsboys. Publisher argued that they were
not required to bargain since the newsboys were not their
“employees” w/in the meaning of the National Labor Relations Act
terms. NLRB, after hearing, concluded that the regular full-time
employees were employees w/in the meaning of the Act. On
appeal, the App Ct independently examined the q of whether the
newsboys were employees and decided that they were not, based
on common law stds.
B. Held: The Board gets to decide—they are not employees.
C. Reasoning:
i. These are mixed q’s of law and fact and ct needs to address:

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a. Does the statute implicitly import the c/l def or some other
def?  Q of Law
1) Trying to determine the def of words.
2) Will consult: precedent, congressional records, context of
other statutes etc.
3) Ct will decide on its own—NLRA does not on its own,
import the c/l into the statute
b. What is the purpose of the Act?  Q of Law
1) Mostly legal considerations
2) Ct decides for itself—purpose is to end industrial strife
and equalize bargaining power
c. What type of workers are covered under the act?  Q of
Law
1) Look at statute itself, congressional records, dictionary
meaning
2) Compare policy outcomes of using diff definitions
3) Look at agency interpretation perhaps as a last resort
4) Ct ultimately defers on this q—NLRB can decide this on a
case by case basis or industry by industry basis
5) But the best way to answer this might not be to look at
legal materials but to look at the factual situation
d. Are these newsboys = “employees?”  Q of Fact
1) Apply the facts to the def of employee
2) If the agency gets to decide ultimately, then this q gets
folded into their earlier inquiry of what is an employee
ii. SC is additionally persuaded by:
a. The task of defining “employee” was given to the NLRB
since they were chosen to administer the act.
b. Everyday experience in the administration of the act gives
the NLRB unique familiarity and experience of employment
relationships, abilities and need for self-organization etc.
c. Generally q’s of statutory interpretation, esp when arising in
the first instance, are for cts to resolve but when the q is
one of specific application, the agency administering it
usually makes the call and the reviewing ct’s function is
limited.
iii. The Board’s determination should be accepted if it has “warrant
in the record” and a “reasonable basis in the law.”
iv. As the q moves from law to fact-based, the deference to the
agency increases.

Interpretive/Legislative Rules & Q’s of Law in the Pre-Chevron Era

1. Interpretive rules: publications by agencies that do not carry the force
of law; have the power to persuade
2. Legislative rules: carry the force of law and is the product of an
exercise of delegated legis power to make law through rules
3. How to distinguish b/t interpretive and legislative rules:
A. Look at the Act to see if Congress has delegated the regulation-
making authority to know that they can, not necessarily did,
promulgate a rule that has the force of law
B. Look at other regs to see if the agency has used its authority
before

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C. See if the agency meant for it to carry the force of law:

i. if it can be enforced w/o relying on another law or reg--
interpretive
ii. if it actually changes a prior legislative rule
iii. if it creates new duties (ie look at the procedure used)
4. CASE: Skidmore v Swift
A. Employees who alleged that they had worked overtime for being
“on call firemen” sued for overtime back pay. FLSA administrator
issued had issued an “interpretive bulletin” calling for overtime
pay. Trial ct and app ct said that as a conclusion of law, the time
spent working as on call firemen did not constitute overtime for
which the FLSA gave overtime compensation for. As a matter of
law, pursuing pleasure or performing personal chores while on call
did not constitute work.
B. Held: Trial Court is reversed. The court should defer to the
administrator.
C. Reasoning:
i. The rule here is an interpretive rule not a legislative rule or a
rule having the force of law.
ii. Skidmore deference rule: interpretive rules, while not
controlling on the cts, can effectively become binding on the
court, or be given deference to, if they have the “power to
persuade”
iii. The “power to persuade” will depend on:
a. Thoroughness evident in the considerations
b. Validity of its reasoning
c. Consistency w/ earlier and later pronouncements
d. All those factors which give it the power to persuade, if
lacking the power to control
iv. Distinguishing b/t a legislative rule and an interpretive rule:
a. Did Congress delegate regulation-making authority so the
agency knows that they can, but didn’t necessarily,
promulgate a rule w/ the force of law? Then expresses will
of Congress and more deserving of deference b/c is closer to
being a legislative rule
b. Look at other regs to see if agency has used its authority
before?
c. Did the agency intend for it to have the force of law? Look
at procedures used to make the rule. Look at what
obligations were created etc.

Chevron Deference and Policy Judgment Calls

1. The real Chevron test:
A. Preconditions to even getting to the Chevron analysis: Clear
Statement Principle (Kent v Dulles)
B. Step 0: As a threshold matter, did Congress give authority to the
agency to interpret the laws?
i. Mead Option 1-Explicit : Congress explicitly grants the power to
make rules with the force of law  implied congressional intent
to interpret as well Chevron deference
ii. Mead Option 2-Implicit: Congress grants the power to make
rules using NC rulemaking such rules imply force of law 

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implicitly includes congressional intent to interpret Chevron

deference
a. Why can the force of law derive from NC rulemaking?
b. B/c that entails deliberation, expertise, democratic decision-
making, thus justifying deference
iii. Christensen/Skidmore no go: If Congress neither 1) granted the
authority to interpret via explicitly granting the power to make
rules w/ the force of law, OR 2) granted the power to pass laws
via NC rulemaking/formal rulemaking, then no Chevron
deference, but perhaps Skidmore deference.
C. Chevron Step 1: Did Congress already resolve the issue w/ clarity
and precision or did they leave an ambiguity?
D. Chevron Step 2: If not, is the agency’s interpretation reasonable?
2. If an agency passes a rule w/ the force of law, using formal process
and that rule fixes an ambiguity in a statute committed to agency
implementation, then cts should grant Chevron deference to the
agency’s interpretation as long as it’s reasonable:
A. Did Congress clearly answer the question at issue or is there
ambiguity?
B. If there’s ambiguity and the agency offers a reasonable
interpretation, then cts should defer to the agency even if there
are other reasonable alternatives.
3. Chevrondeference is warranted when the agency is effectively
deciding questions of policy which are akin to mixed questions of law
and fact. The Chevron ct was inclined to grant deference b/c it
believed that the issue was better left to the political branches of govt
to resolve.
4. Why are these kinds of policy questions unique?
A. When judges make policy judgments, they are usually trying to
determine congressional intent and purpose using the canons of
interpretation, ie Step 1. When they cannot ascertain intent, then
they go to Step 2 which grants deference to an agency’s
reasonable policy judgment call.
B. Agency policy judgments are more tailored as the agency will pick
one reasonable interpretation from presumably competing
reasonable alternatives. Moving away from the backwards-looking
inquiry into Congressional intent and into a forward-looking
dialogue about the effects of particular policy proposals refocuses
the dialogue inside the agencies to the consequences of adopting
particular policies in light of their expertise and political
accountability.
5. Scalia’s defense of Chevron deference:
A. Rejects:
i. Agency expertise does not justify deference as a matter of law.
ii. SoP concerns and the need to have the political branches
ensure good policy (and avoid bad policy) outcomes, does not
justify deference as a matter of law.
B. Accepts:
i. In Step 1, a court will try to determine congressional intent
using the tools of statutory interpretation including dictionary
defs, statutory text, legislative history, and canons of
construction including policy judgments.
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ii. If the tools fail and can’t figure out purpose, a Step 1 ambiguity
arises:
a. If Congress intended a particular result but was not clear
about itgenuine q of law; cts should resolve.
b. If no single or particular intent is ascertainablego to Step
2.
c. But the quest for ascertaining legislative intent is generally
difficult b/c in most cases, Congress didn’t think about the
issue at all.
6. Ultimately, there isn’t a really great way to defend Chevron other than
to say that there are q’s the cts would rather not answer so let
agencies do it.
7. Is Chevron consistent w/ nondelegation principles or is this
nondelegation gone amuck?
A. It’s consistent w/ the limited use of nondelegation.
B. Since Congress intends to grant power to agencies, cts will defer to
the agency’s interpretive calls as well.
C. Response: This might be piling error on top of error. If the mistake
is substantial delegation in the first place, then allowing
interpretive powers just exacerbates the problem.
D. Response to that: If agencies are better adept at making policy
judgment calls, then let them do it, especially since their actions
are still subject to political accountability.
8. CASE: Chevron Inc v NRDC
A. Facts: Under the Clean Air Act, the EPA promulgated the “bubble
rule” which defined a “single stationary source” that emits
pollutants to be an entire entity like a plant or factory, instead of
individual units like buildings or smokestacks. NRDC sued to
change rule back to including individual units. The “rule” was
promulgated as a regulation and carried the force of law.
B. Held: Since Congress was unclear on the definition of “single
stationary source” but the agency’s interpretation is reasonable,
grant deference to agency’s interpretation.
C. Reasoning:
i. Defining “statutory source” seems to be a q of law and
ordinarily would be a q for the cts, but ct grants deference
anyway. The SC thinks that this is more of a question of policy
or a mixed q of law and fact and thus better left to the political
branches.
ii. Explicit/Implicit delegations:
a. This seems like an issue of statutory interpretation but SC
says that where there’s an explicit gap left for the agency to
fill, then there is an express delegation of authority to make
legislative rules that have the force of law as long as they
are not arbitrary, capricious or manifestly against the
purpose of the statute.
b. Sometimes the legislative delegation is implicit and in such
cases the court is not free to substitute its own judgment for
that of the reasonable judgment made by the agency.
c. What’s the diff b/t an implicit and explicit delegation? Not
clear but court doesn’t think it should matter anyway.

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iii. Chevron 2-step: 1) Did Congress address the issue directly or is

there ambiguity? 2) If ambiguous, defer to the agency as long
as it’s reasonable.

Step 0: As a threshold matter, did Congress give authority to the

agency to act w/ the force of law?
1. Step 0: Even if a ct wants to defer, as a threshold matter, did
Congress intend for the agency to make interpretive rules w/ the force
of law?
A. Option 1-Explicit :
i. Congress explicitly grants the power to make rules with the
force of law
ii. Implied congressional intent to interpret as well
iii. Chevron deference
B. Option 2-Implicit:
i. Congress grants the power to make rules using NC
rulemaking/formal adj
ii. Such rules imply force of law
iii. Implicitly includes congressional intent to interpret
iv. Chevron deference
C. Option 3-no go if informal
i. Christensen-opinion letter from agency not entitled to Chevron
deference b/c no indication that Congress intended for the
opinion letters to have the force of law
ii. Christensen-type “rules” get Skidmore deference possibly if it
has “power to persuade.”
2. No Chevron deference for when agencies are interpreting the APA b/c
it’s not a grant of authority to the agency—can’t give authority to
agency to interpret that which cabins their authority.
3. CASE: Christensen v Harris County
A. Facts: FLSA calls for overtime compensation to be paid in certain
cases. Harris County, looking to save money, asked the DoL what
to do. DoL replied in an opinion letter recommending a course of
action. County followed advice. P’s sued claiming that the policy
violated the FLSA. P and Govt argued that cts should give Chevron
deference to the opinion letters.
B. Held: Opinion letters are entitled to “respect” under Skidmorebut
only to the extent that those interpretations have the “power to
persuade.” Ct finds the agency interpretation unpersuasive.
Opinion letters not followed.
C. Reasoning:
i. SoL is interpreting the FLSA. Opinion letter was probably
written by a low-middle level employee but lacks the force of
law. At best, it might get Skidmore deference if it has the
“power to persuade,” though ct finds here that it’s not
persuasive.
ii. A lack of the force of law matters b/c that implies you don’t get
the procedural benefits of rulemaking, ie debate, deliberation
etc.
D. Scalia’s concurrence:

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i. Chevron deference is warranted if the rule is an authoritative

view of the DoL.
ii. Here, the letter + Solicitor General’s brief (cosigned by the
Solicitor of Labor) = DoL’s view on the matter. Having them
both on board indicates that this is an authoritative view of the
DoL.
iii. But no deference ultimately b/c agency interpretation is
unreasonable.
4. CASE: US v Mead Corp.
A. Facts: Mead challenges tariff classification for importing day
planners. Customs informs Mead by customs letter that they are
re-categorizing the day planners as “diaries” which now subjects
them to an increased tariff. Customs argues that their letters are
entitled to Chevron deference.
B. Held: Because SC concludes that as a threshold matter, Congress
did not intend for customs to have interpretive authority to re-
interpret the category of the day planners. Thus, don’t get to
Chevronanalysis at all. No deference.
C. Reasoning:
i. Threshold inquiry: did Congress intend for the agency to have
the authority to interpret in the first place?
ii. Ascertaining this is admittedly difficult but we can look to
proxies that will imply a congressional intent to delegate the
authority to interpret:
a. Option 1: Explicit – Explicit delegation of power to make
rules w/ the force of law  includes congressional intent to
interpret  Chevron deference
b. Option 2: Implicit – Process (delegation to make rules using
formal process, ie NC rulemaking)  Implies force of law 
congressional intent to interpret  Chevron deference
iii. Why is process a good proxy to ascertain congressional intent?
Formal processes (NC rulemaking, formal adjudication) involve
deliberation, consideration, expertise and democratic-decision
making, thereby justifying Chevron deference.
D. Stevens/Breyer concurrence:
i. Greater expertise and democratic legitimacy justify deference.
ii. Might say that if agency had the authority to use formal
process but didn’t, then they haven’t been awarded the
authority to interpret
E. Dissent, Scalia:
i. The authoritative position of an agency, as enunciated by the
agency head, should be enough for Chevron deference.
ii. There is no need to link the formality of the proceedings to get
to congressional intent.
iii. Practical FX of this decision are problematic:
a. Lead to lots of uncertainty b/c actors won’t know when there
is Chevron deference since there’s an open-ended exception
to what falls under “formal adj”
b. This might compel agencies to over-employ formal
rulemaking in order to get Chevron deference
c. That in turn could lead to ossification of the laws—Chevron
allowed agencies to be flexible but once the law solidifies,
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might become harder for agencies to adapt to new

situations.
d. Resurrecting Skidmore compounds the confusion.
F. Hypo: What if agency is explicitly given the authority to make rules
w/ NC rulemaking but instead makes policy using some other
method? Scalia would say that is good enough. Meadmajority
would probably say that it’s less clear but there might be
deference. Formal rulemaking in some other form might be good
enough to get the force of law if it entails similar characteristics
that make Chevron deference warranted for considerate
rulemaking.
5. CASE: Long Island Care

Chevron Step 1: What to look for to determine ambiguity or clarity:

1. Preconditions to get to Step 1: Clear Statement Principle
A. Even if statute clearly delegates absolute discretion to promulgate
regs, when constitutional rights are implicated, don’t get to
Chevron analysis. Ct decides b/c its unlikely that Congress even
thought about the issue w/ particularity. ~Kent v Dulles
i. CASE: Kent v Dulles: (pre-Chevron)
a. Congress explicitly gave authority to exec to promulgate
passport rules. Dir of Passport Office denied passport to
Kent on the basis that he was a communist.
b. There’s a clear delegation here but to uphold it would be to
deny Kent’s 5th Amendment right to liberty.
c. Clear Statement Principle: A more modest and targeted
version of the nondelegation doctrine; Congress, not
agencies, must make decisions when sensitive
constitutional issues are at stake; cts will not allow agencies
to make decisions when Congress has not thought about the
issue w/ particularity.
d. SC didn’t decide this on nondelegation grounds b/c there’s
no limiting principle, thus it might be forced to strike down
whole statute; instead Ct does something just shy of that.
B. Scalia’s Babbitt Dissent-finds the statute to be unambiguous b/c is
concerned with unconstitutional takings.
2. Step 1 Analysis: did Congress speak precisely or is there ambiguity
with regards to the question at issue?
A. Unambiguous: if ct can determine what Congress meant ideally by
a prima facie reading of the text or using few to no canons of
construction, then ct should follow the text w/o regard to what the
agency thinks b/c Congress has spoken clearly.
i. “On its face, the definition embraces all airborne compounds of
whatever stripe.” ~MA v EPA
ii. If text is unambiguous and calls for regulation, agency cannot
exercise discretion to opt out citing policy decisions. Can’t
argue Brown and Williamsonin reverse. ~MA v EPA
B. Even if the canons lean toward ambiguity, is there a policy trump
card that says Congress could not have possibly meant what the
agency wants to do? (Mead hasn’t happened yet but these are
pre-Chevron or Chevron Step 0 type considerations)

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i. MCI-as a matter of pure statutory construction, whether modify

means small or large change or whether the FCC reg is a large
or small change doesn’t matter for the bigger concern is that
the FCC is changing policy in a such a huge way and w/o an
explicit signal from Congress, we don’t want agencies to use
delegations of power to make implicit but huge changes—it’s a
kind of nondelegation argument but w/ no limiting principle, SC
just interprets “modify” to reach solution they want.
ii. Brown and Williamson-SC finds a way to prevent FDA from
gaining jurisdiction even though textually, tobacco seems to fit
the def of drug and combination product. Allowing the FDA to
regulate tobacco would allow them to regulate a huge industry
w/o an express grant from Congress, which is odd especially in
light of the whole host of other regs that control the tobacco
industry. This change in FDA policy occurs at the end of the
Clinton era and may be a last-minute grab at authority that
Congress would probably not have allowed.
C. Ambiguous: look at the text, dictionary definitions, congressional
purpose, legislative history and other canons to determine
ambiguity. ~Sweet Home
i. “Whether Congress spoke as to the precise q at issue” might be
an issue of framing.
ii. In Sweet Home-majority asks q of whether agency
interpretation is excluded.
3. CASE Babbitt v Sweet Home for Oregon
A. Facts: Endangered Species Act made it unlawful to “take” any
endangered species. Act further defined “take” to include: harass,
harm, pursue et al. SoI (who probably used formal process)
promulgated a rule further defining “harm” to mean kill/inure
viasignificant habitat degradation. Respondent landowners and
logging companies challenged the regulation defining “harm” and
argued that the SoI’s only means of preventing foreseeable habit
degradation is to buy the lands. SoI argued that the prohibition on
taking, which Congress defined to include “harm,” places a duty on
respondents to avoid harm that habitat alternation will occur
unless they first obtain a permit.
B. Held: Ct goes through two-step Chevron analysis and finds that
there is ambiguity and thus grants Chevron deference to the
agency’s interpretation of “harm.”
C. Reasoning:
i. The Step 1 question according to the majority is whether
Congress intended for “harm” to exclude kill/injure via habitat
modification. Majority says no and looks at:
ii. Dictionary: “harm” means to cause hurt or damage or to injure;
Majority says that if we limit the meaning to direct injury only,
then it would have no meaning diff from other words used to
define “take.”
iii. Purpose: Per Sec 2 of the Act: to provide a means whereby the
ecosystems upon which endangered species depend may be
conserved; supports EPA’s def of “harm.”

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iv. Legislative History: legislative reports indicate that Congress

intended for “take” to apply broadly to cover indirect and
purposeful actions.
D. Scalia’s dissent:
i. Offers an alternate dictionary that more narrowly defines
“harm” to mean direct harms.
ii. Says that “harm” refers to all the ingenious ways that people
can directly cause harm to wildlife, like draining a pond to hurt
a turtle.
iii. As a matter of statutory construction, “harm” should not take
on a meaning that is very diff from the other words used to
define “take.”
iv. The purpose is not as broad as the majority construes it to be;
Congress could not have meant to circumscribe seemingly
innocent actions or omissions that could cause large economic
disruption.
v. Under the SoI/majority’s acceptance of “harm,” lots of
foreseeable and unforeseeable conduct could be swept into the
statute. Scalia seems to be concerned w/ the possibility of
unconstitutional takings as all kinds of actions could become
part of a chain of causation that lead to the impermissible
wildlife degradation.
E. Takeaways:
i. The more uncertainty, the easier it is to show ambiguity.
ii. It’s not clear that this case holds true to prove lack of
ambiguity. A showing of clarity should rest on fewer canons.
4. CASE: MCI v AT&T
A. Facts: Communications Act authorizes the FCC to “modify” services
and rates required of telephone carriers. FCC promulgated rule
that forced AT&T, the historic long-distance carrier to pay tariffs
while lifting the tariff requirements on new entrants such as MCI.
MCI now wants Chevron deference for the agency’s
“modifications.”
B. Held: There is no ambiguity as to what modify means, so we don’t
get to ChevronStep 2. But there’s an independent reason not to
uphold the agency interpretation—Congress would not have called
for such a fundamental revision of the statute in the form of
agency interpretation.
C. Reasoning:
i. “Modify” is unambiguous; by most dictionaries means to make
incremental or limited changes. The FCC’s detariffing policy is
a major change and could only have been justified if made a
less than fundamental change to the Act’s tariff requirements.
ii. More importantly:
a. Rate filings are an essential characteristic of a rate-
regulated industry. It’s highly unlikely that Congress would
leave the determination of whether an industry will be
entirely or even substantially regulated to agency
discretion.
b. It’s even more unlikely that permission to “modify” would be
granted so subtly. Congress would not have intended such
a result by implicit delegation.

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c. The FCC is fundamentally revising the statute from rate-

regulation to protectionist scheme. That might be a good
idea but that was not the purpose when the law was
enacted.
D. Key takeaway: as a matter of pure statutory construction, whether
modify means small or large change or whether the FCC reg is a
large or small change doesn’t matter for the bigger concern is that
the FCC is changing policy in a such a huge way and w/o an
explicit signal from Congress, we don’t want agencies to use
delegations of power to make implicit but huge changes—it’s a
kind of nondelegation argument but w/ no limiting principle, SC
just interprets “modify” to reach solution they want.
5. CASE: FDA v Brown and Williamson Tobacco
A. Facts: After FDA had for many years disavowed any authority to
regulate tobacco products, FDA claimed that nicotine is a “drug”
w/in the meaning of the Food and Drug Act. Pursuant to the Food
and Drug Act, FDA promulgated regs intended to reduce tobacco
consumption.
B. Held: FDA doesn’t get jurisdiction to regulate tobacco products.
Such authority is inconsistent w/ the intent that Congress has
expressed in the Food and Drug Act’s overall regulatory scheme
and in the tobacco-specific legislation that was enacted
subsequent to the Food and Drug Act.
C. Reasoning:
i. While the definition of tobacco fits the definition of “drugs” and
“combination products” that would otherwise make the product
fall under FDA’s jurisdiction, SC says that if the FDA could
regulate tobacco, then under its own definition, it would have
to ban it altogether. Thus since Congress has already
foreclosed against that possibility and regulated tobacco in
other ways, Congress could not possibly have meant for the
FDA to have jurisdiction over tobacco.
ii. What’s really going on: SC finds a way to prevent FDA from
gaining jurisdiction even though textually, tobacco seems to fit
the def of drug and combination product. Allowing the FDA to
regulate tobacco would allow them to regulate a huge industry
w/o an express grant from Congress, which is odd especially in
light of the whole host of other regs that control the tobacco
industry. This change in FDA policy occurs at the end of the
Clinton era and may be a last-minute grab at authority that
Congress would probably not have allowed.
6. CASE: MA v EPA
A. Facts: CAA calls for EPA to regulate all “air pollutants.” Private orgs
petitioned to regulate the emission of CO2, claiming that it’s an air
pollutant. EPA takes public comments then denies the petition by
making Brown and Williamson Tobacco arguments to say that
Congress has not given authority to EPA to regulate CO2.
B. Held: SC says EPA can’t opt out of regulating CO2 when the Act
unambiguously calls for EPA to regulate all “air pollutants.”
C. Reasoning:
i. Unambiguous: “on its face…”

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ii. This is about agency refusal to regulate per an unambiguous

statute. Ct grants limited deference and almost heightened
judicial review.
iii. SC says that CO2 is an air pollutant and that statute sweepingly
authorizes the EPA to regulate air pollutants which include “any
air pollution agent.”
iv. EPA cannot opt out of regulating unless 1) CO2 is not an “air
pollutant” that “endangers health and welfare” or 2) some
other reason.
v. Unlike in Brown and Williamson, there is no evidence that
Congress meant to curtail the EPA’s power to regulate CO2.

Chevron Step 2
1. If court says statute is unambiguous in Step 1, then end of story.
2. If court is silent or says that statute is ambiguous in Step 1, then to go
Step 2.
3. At Step 2, agencies can get a second bite at the apply by changing
policies as long as reasonable.
4. Rule: a court’s prior judicial construction of a statute trumps an
agency construction otherwise entitled to Chevrondeference only if
the prior court decision holds that its construction follows from the
unambiguous terms of the statute and leaves no room for agency
discretion. This is permissible b/c these are policy inquiries~National
Cable v Brand X Internet Services
5. Agencies can change and even overrule courts at Step 2. To hold the
Step 2 interpretatin will lead to anomalous results depend on who gets
to it first. ~Brand X
6. What’s going on at Step 2?
A. Only get to Step 2 if there’s multiple reasonable alternatives that
give rise to “ambiguity” in Step 1.
B. So by the time to get to Step 2, the relevant q has virtually been
answered and nothing ever really get decided at Step 2.
C. If there are no good alternatives, then you never get past Step 1
b/c then the meaning of the statute must be unambiguous.

Hard Look Review

1. Hard look/arbitrary and capricious applies to q’s of fact arising in
informal adj and NC rulemaking.
A. APA 706(1)(A): ct shall hold unlawful and set aside agency action,
findings and conclusions if action is arbitrary and capricious or is
an abuse of discretion.
i. Looking for lack of reasonable consideration of relevant factors
and a clear error of judgment.
B. Requires reviewing court to engage in substantial inquiry:
i. Did agency act w/in scope of its authority?
ii. Was the actual choice arbitrary, capricious, an abuse of
discretion or otherwise not in accordance w/ the law?
iii. Did the agency follow the necessary procedural requirements?
C. Judicial review has to be a review of a record. Unlike formal
proceedings that produce a formal evidentiary record, for informal
proceedings, the ct will look at the body of information that the
agency was supposed to look at, at the time of decision-making

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(and give less weight to “evidence” concocted by lawyers for

litigation).
D. Presumption in favor of agency - as long as the agency’s
determination is reasonable, ct will not substitute its own judgment
for the agency’s.
2. Overton Park Hard Look Review: cts will review agency decision
for reasonableness based on the record before the agency at the time
it made its decision; ct will not substitute its own judgment for that of
the agency’s
3. State Farm Hard Look Review Plus: Cts will provide a harder, more
in-depth review if they are convinced that there is cause to question
the reasonableness of the decision.
A. Such a cause might be a suggestion that that the decision was
politically motivated and without regard to the facts.
B. Such a cause might be a rule rescission, major change, or
inconsistency absent a reasoned explanation
4. Purpose of hard look review:
A. Forces agencies to write down and create evidentiary trail for
judicial review
B. Ct can look at the evidence to make sure agency is acting w/in
statutory mandate by showing compliance
C. Want to see that statute isn’t being applied in disparate ways but
rather, being applied more generally and hasn’t been captured by
special interests
D. Might reach better policy outcomes if cts can impose their own
expertise on top of agency expertise
5. CASE: Overton Park v Volpe-informal adj
A. Facts: Statute prohibits the Secretary of Transportation from
approving fed funds to finance a highway that would run through
public parks if a “feasible and prudent” alternative exists. If no
such route is available, Secretary can authorize funds. In this case,
DoT approved funds for a highway through Overton Park but did
not release a statement of factual findings or indicate why they
believed that no prudent and feasible alternatives existed. The
decision was not made using formal process.
B. Held: SC reverses and remands. While formal findings are not
required, meaningful judicial review has to occur and cannot be
based solely on affidavits prepared for litigation.
C. Reasoning:
i. Judicial review is to be made on the basis of the “administrative
record” even though the agency decision was the product of
informal adjudication.
ii. The “administrative record” consists of the facts and
circumstances before the agency at the time that they made
the decision and it’s against this “record” that the decision’s
reasonableness is weighed.
6. CASE Motor Vehicle Mfrs’ Association v State Farm-NC rulemaking
A. Facts: pursuant to N/C rulemaking, NHTSA rescindsrequirement
that cars be equipped with passive restraints. NHTSA argues that
automatic restraints, a type of passive restraint, don’t confer
safety benefits and that airbags, another type of passive restraint,
are not installed frequently enough by auto mfrs to justify the

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passive restraint requirement. Auto insurers challenged the rule

change.
B. Held: Using hard look review, SC finds the agency’s rescission to
be arbitrary and capricious.
C. Reasoning:
i. Agency must examine relevant data and offer a satisfactory
explanation for its action including a rational connection b/t the
facts found and the choice made.
ii. An agency rule would be arbitrary and capricious if agency:
a. relied on factors which Congress did not intend for it to
factor in
b. failed consider an important part of the prob
c. offered an explanation that isn’t justified by the info before
the agency
d. offered an implausible explanation
iii. SC found that agency’s failure to consider alternate forms of
passive restraints before getting rid of the rule rendered the
decision as arbitrary and capricious. SC also questioned the
evidence and conclusions that agency relied on.
iv. SC stopped just short of saying that its own explanation
(virtually a substitute for the agency’s) was the right one
despite the agency’s.
v. NHTSA policy change coincided w/ regime change so SC more
suspicious.

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Admin Law, 2008

PART III: PROCEDURAL REQUIREMENTS

Due Process Considerations

1. A tax levied on a property owner for the purposes of improving a
public street that ran by his storefront requires due process in the
form of an opportunity for oral hearing. Ct persuaded by low
numerosity and lack of political power to use political process.
~Londoner v Denver
A. Benefits to an oral hearing:
i. Too easy to ignore paper submissions in protest
ii. Can easily clear up misunderstandings
iii. People’s rights are vindicated b/c they have their “day in court”
iv. Oral hearing will produce a transcript which might be useful to
give to media and make a political statement out of it
B. This is an adjudicative action. Form follows function.
2. When a rule of conduct applies generally to a large enough group of
individuals such that they have collective bargaining or political
power, then change should be done through general lawmaking; the
individuals affected do not have the right to a hearing b/c their due
process rights would be vindicated through the political process.
~Bimetallic Investment
3. Key differences to get to hearing:
A. Political power is a substitute for judicial process
B. Low numerosity
C. Individualized vs generalized determinations
4. Legislation delegating authority to highway commissioner to compel
railroads to build overhead passages in the name of public safety
without any provisions for judicial review or hearing is a violation of
the 14thamendment’s due process guarantee. Agency used the
process of sending letter to RR informing them to construct passage;
such action is an unconstitutional taking. Whole statute struck down.
~Southern Railway
5. Timing matters: due process and hearings requirements are pre-
depravation issues. Hearings take place early whereas judicial review
takes place later thus judicial review may heighten costs b/c of timing.

Adjudication vs Rulemaking
1. Adjudication-per the APA, it’s the agency process for issuing an
“order” or a final disposition of an agency matter other than
rulemaking; includes:
A. May or may not require a hearing or due process entitlement to
procedural requirements
B. Resolution of specific litigation controversies b/t adversary parties
C. Licensing
D. Agency decisions not to spend money on a project (informal adj-
Overton Park)
E. Authorizations like granting leases or rescinding K’s
F. Other non-rulemaking management and administrative functions
2. Rulemaking-equivalent of agency legislation; is a statement of general
or particular applicability and future effect designed to implement,

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interpret or prescribe law or policy or describing the organization,

procedure or practice requirements of an agency
A. Includes the approval or prescription for the future of rates, wages,
corporate or financial structures, prices, facilities, appliances,
services or allowances therefore or of valuation, costs, or
accounting or practices bearing on the foregoing
3. Formal, On-the-Record Adjudication
A. APA 554, which then triggers 556 and 557
B. Is required when:
i. Explicit: organic statute calls for the decision to be made “on
the record after opportunity for agency hearing.”
ii. Judicially imposed: when agency is imposing a sanction or
liability on a party; need for Londoner due process concerns to
be satisfied
C. Judicial review: “substantial evidence” std (which effectively
amounts to the “arbitrary and capricious” std b/c no one really
knows what it means)
D. Requires trial-type hearings, oaths, subpoenas, an ALJ judge
hearing evidence and witnesses
4. Informal Adjudication
A. APA rules don’t seem to govern informal adj procedures explicitly,
but prof thinks that Sec 555 on Ancillary Matters applies:
i. If nothing else applies, 555 is the procedural backstop
ii. Persons compelled to appear must be afforded the right to
counsel
iii. “Interested parties” can appear and be heard
iv. Agency must promptly explain reasons for denial unless it’s
obvious (e)
v. Requirement that agency takes action expeditiously
vi. You can always get a transcript of the agencies
B. Refers to agency decisions that don’t fit other categories.
C. Includes permitting procedures, grant procedures etc.
D. Overton Park-can be done w/o procedural due process b/c it
doesn’t impact anyone specifically as it’s public park
E. Judicial review: per Overton Park, “arbitrary and capricious”
F. For q’s of law where process is very informal, Mead says no
deference
5. Formal On-the-Record Rulemaking
A. APA 553(c), which then triggers 556 and 557
B. Is required when: organic statute provides that “rules . . . be made
on the record after opportunity for an agency hearing.”
C. Is a cumbersome and intense process
D. Florida East Coast: SC, concerned about the delays and other
dysfunctions caused by the formal rulemaking requirements,
severely restricted the coverage of the APA’s formal rulemaking
procedures by insisting that the relevant statute explicitly provide
for a “hearing on the record.”
E. Formal Rulemaking hearing: all parties apprised of the evidence,
CX witnesses, inspect docs, offer evidence in explanation or
rebuttal
F. Judicial review: substantial evidence test
6. Informal Rulemaking: Notice and Comment Rulemaking

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A. Triggered when the statute does not provide for a “hearing on the
record.”
B. APA 553 procedures:
i. Post notice in the Federal Register specifying time and place of
rulemaking proceedings, legal authority for issuance and
content of proposed changes
ii. Opportunity for interested persons to comment on the proposal
w/ written submissions, and at the option of the agency,
opportunity for oral argument
iii. After final rule promulgated, agency must issue a “concise
general statement” of the basis and purpose of the decision
a. “Concise statement” has, in reality, become relatively long
and extensive b/c agency write w/ anticipation of litigation
or to preempt lit
C. Over the past few decades, agencies have moved from
adjudication to NC Rulemaking to decide regulatory policy. Since
no formal record was necessary under NC rulemaking (unlike
formal rulemaking), cts needed to mandate some kind of record so
that it could later be reviewed by cts.
D. Judicial review: Hard Look/arbitrary and capricious
7. Organic statute can prescribe greater procedural formalities than APA
calls for. ~Florida East Coast Railway
8. Agency choice b/t rulemaking and adjudication: organic statute
typically won’t give a choice but there are other situations where
agency gets to choose.
9. Judicial control of agency choice of procedures: cts generally ok w/
letting agency pick and choose b/t rulemaking and adjudication as
long as they follow the procedural safeguards
A. A normal “rulemaking rule” must be promulgated via APA
procedures. Can’t evade process requirements by trying to create
a “rule” that applies prospectively (but not retrospectively) from an
adjudicative proceeding. If you want the precedent to apply
prospectively, use rulemaking. ~Wyman Gordon
B. Can’t enforce a “rule” if that rule is an unpublished policy written
only in an internal agency manual. Rule lacks legitimacy and
safeguards of rulemaking process. ~Morton v Ruiz
C. Hercules v EPA-DC Circuit upheld the EPA’s authority to adopt
pollution control requirements by rulemaking even though the
resulting rules only applied to a single plant. Since that was formal
rulemaking, the due process rights and procedures of the affected
party were upheld just as they would’ve been under adjudication.
D. CASE: NLRB v Wyman-Gordon
i. In an adjudicative proceeding, NLRB orders W-G to produce
employee roster to union, and relies in part on previous NLRB
adjudication of Excelsior. W-G challenges and argues that
Excelsior is procedurally invalid and cannot apply to it.
ii. Held: Yes, Excelsiorwas procedurally invalid b/c the “rule”
announced there was done through adjudication instead of
rulemaking. But since this is a separate adjudication, NLRB has
independent reason to validly order W-G to give up roster list.
iii. Reasoning:

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a. Excelsior“rule” was made in an adjudication and only

applied prospectively, not to the parties in that case. Can’t
skirt the protections of proper rulemaking by trying to make
a rule from an adj.
b. NLRB has historically not used the Act’s rulemaking
procedures but relies on adjudications.
c. Ct doesn’t seem to want to impose a brightline rule that
NLRB has to use rulemaking but in this case, probably
thinks that right result was reached despite some of the
impropriety of process.
iv. Benefit of rulemaking would be that all interested parties could
be heard as NLRB didn’t announce issue prior to ruling in
Excelsior. NLRB’s response is that if they were forced to
engage in rulemaking, then adjudications would be less tailored
and more equivocating.
E. CASE: Morton v Ruiz
i. Facts: BIA limits benefits given to Native Americans based on
an unpublished “policy” written only in an internal BIA manual.
Info is not public. Ruiz was denied benefits, determination
done by informal adjudication, probably by a letter to him.
ii. Held: BIA can’t escape formal rulemaking requirements by
relying on unpublished internal manual. The procedural
safeguards ensured by that process also put Native Americans
on notice so that they can then structure their conduct
accordingly.
iii. Can’t uphold this informal adjudication under Wyman-Gordon
b/c there, WG was put on notice of the roster requirement after
formal adjudication of Excelsior. Here, Ruiz never had notice.

Formal On-The-Record Rulemaking

1. Statute authorizing agency to act “after hearing” ≠ APA’s requirement
that formal rulemaking is made “on the record after opportunity for
agency hearing.” APA formal rulemaking is not triggered unless APA
language is expressly used orother language having the same
meaning could trigger 556 and 557 rulemaking process. ~Allegheny-
Ludlum Steel
2. “After a hearing” was satisfied by NC Rulemaking; doesn’t trigger
formal rulemaking. ~Florida East Coast
3. CASE: US v Florida East Coast Railway
A. Facts: ICC’s organic statute states that it “may, after hearing…”
change freight rates. ICC wants to set rates for RR’s who borrow
other RR’s freights. So this will affect some RR’s more than others.
Per NC Rulemaking, ICC solicits written submissions, including
challenges by Florida East RR (and others) petitioning for an oral
hearing, changes rates and rejects requests for oral hearings.
B. Held: SC rejects RR’s argument since the organic statute didn’t
explicitly use APA language or express clear intent for formal
requirements, no oral hearing.
C. Reasoning:
i. Only clear language indicating an intent or trigger words
requiring both a decision on the record and an opportunity for
an agency hearing will suffice. Cts are less strict about the

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magic language requirements when it comes to adjudications

b/c of greater need to protect due process rights there. If there
was an individualized determination here, then probably will
require a hearing on the record.
ii. For the purposes of the Londoner/Bi-metallic inquiry, should
Florida East Coast RR get a hearing?
a. Numerosity: affects all RR companies
b. AT: numerosity: this affects some RR more than others
c. No depravation of property. (Right to charge whatever you
want probably won’t count as a depravation of property; no
right to conduct business exactly how you wish)
d. So this situation is closer to Be-metallic and no need for
individualized determinations according to the SC.
iii. If this was closer to Londonerand Florida RR required
individualized determination, then due process concerns would
be met by moving to formal rulemaking or formal adjudication.
iv. Statute calls for hearing, so what would satisfy that? SC says
oral hearing not necessary to satisfy. The “paper hearing”
generated by NC Rulemaking was good enough to satisfy.
v. Now agencies typically get Chevron deference to define
“hearing” when they are interpreting their own organic
statutes.

Notice and Comment Rulemaking

Impx of Rulemaking
1. Florida East Coast encouraged agency to shift from adjudication to
rulemaking to develop law and policy, especially since rulemaking
need not be carried out using sticky trial-type procedures.
2. NC Rulemaking is subject to hard look review which requires an
evidentiary record. Agencies’ increasing use of NC Rulemaking
threatened to create a less rich record since interested parties
couldn’t engage in CX and thoroughly examine the reasons for NC
rulemaking.
3. Even when an agency’s enabling statute expressly requires it to hold a
hearing, the agency may rely on its rulemaking authority to determine
issues that do not require a case by case consideration. ~FPC v
Texaco
4. In an adjudicatory hearing, a litigant can’t challenge the validity of a
rule promulgated in NC Rulemaking. The procedural safeguards of NC
rulemaking itself provides sufficient procedural safeguards to the
eventual litigant. Use of the matrix rule affects a class of people so
should not and cannot be challenged in adjudicatory hearing.
~Heckler v Campbell
5. CASE: Heckler v Campbell
A. Using NC Rulemaking, HHS promulgates rule using matrix to
classify disability claimants into those who do and do not get
benefits.
B. In formal adjudication, ALJ, relying on the matrix, affirms claimant’s
denial of benefits.
C. App Ct, reviewing ALJ’s decision under SE Test, says ALJ should
have relied on specific evidence beyond that of the matrix.

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D. SC says rule using the matrix is allowable b/c matrix affects a class
of people rather than individuals.

Judicial Transformation of Sec 553 NC Procedure

1. How do you create a record for pre-enforcement review when the
validity of regs are challenged in court immediately after they have
been adopted and before they’ve been enforced against anyone?
2. Cts require agencies to develop an evidentiary base for their regs
through “paper hearing or “hybrid rulemaking” procedures that are
less formal than a full-fledged trial-type hearing but more substantial
than traditional notice and comment requirements.
3. Nova Scotia Food Products requirements for meaningful evidentiary
base?
A. Full disclosure: Sec 553(c) says that agency has to give interested
persons an “opportunity to participate...” For that to be
meaningful, the agency must disclose all its data.
i. W/o such a high std, can’t engage in meaningful hard look
review
ii. If you want to fight this in a political forum, then more agency
disclosure results in a better political fight.
iii. Drawback: reviewing cts often cherry-pick whatever info they
want to focus on to render their decision. (like State Farm)
B. Per Sec 539(c), agency shall publish a concise general statement
of their basis and purpose for the new rule.
i. Ct doesn’t require that agency must answer every single
concern possible.
ii. But practical effect is that the “concise statement” is anything
but. Agencies now write statement w/ threat of litigation in
mind.
iii. Here ct is emphasizing how info is conveyed to the public.
C. After Nova Scotia, NC Rulemaking has turned into an elaborate
“paper hearing” procedure often resulting in a record of millions of
pages. It allows for meaningful hard look review but raises costs to
agencies.
4. Vermont Yankee Nuclear Power clarifications to Nova Scotia
A. Generally speaking, Sec 553 establishes the max procedural
requirements which Congress was willing to have the cts impose
on agencies in conducting rulemaking.
B. Agencies are free to grant additional procedural rights in the
exercise of their discretion but reviewing cts are not free to impose
them if the agencies have not chosen to grant them.
5. Agency can’t rely on a new reason to justify its actions when it gets to
court—it must depend on the rationale it took at the time it made its
decision. ~Chenery I
A. W/ new rationale, it’s the lawyers tailoring to the litigation
B. Better notice function when responses are tailored to exactly what
the agency was considering at the time
C. Encourages more reasoned decision-making
D. Record produced will inform us as to what the agency was thinking
at the time
6. CASE: Vermont Yankee v NRDC

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Admin Law, 2008

A. Facts: On the issue of whether nuclear waste disposal should

affect the granting of licenses, NRC instituted a generic NC
rulemaking on wastes generated by a hypothetical “typical”
plant in lieu of case-by-case basis of adjudicating for new plant
licensing. As part of the NC rulemaking comments, Dr Pittman
offered testimony arguing that plan would produce little
environmental threat. On the basis of these conclusions,
Vermont Yankee was granted an operating license w/o affording
any hearing rights on the waste disposal issue in the Vermont
Yankee licensing adjudication.
B. Environmental groups challenged the license by arguing that
the rulemaking was defective. DC Cir agreed and reversed
license and rulemaking since the commission had failed to
expose and permit adequate adversary probing of waste
disposal issues.
C. SC reversed DC Circuit.
i. Even if there was a hearing for Vermont Yankee, there’s no
material q’s of fact left. No one disagrees on what kind of
plant VY is constructing so adjudication is cursory.
ii. Environmental groups want more process. SC says cts can’t
add more process above and beyond APA including trying to
import more procedure from the c/l.
iii. Organic statute can’t be read to impose process beyond APA
absent a very clear statement from Congress that statute
demands even more process.
7. CASE: Chenery I
A. Statute calls for SEC to certify public utility reorganization plans.
SEC denies certification for one reorganization citing violations of
equitable principles. On appeal, SEC justifies its decision on a new
reason—its policy expertise.
B. SC rejects new reason and remands. SEC can’t offer a new reason
on appeal. It’s actions will be judged by what it did at the time of
decision-making.

Exceptions to Sec 553

1. 553(a) says that the rulemaking provisions do not apply to:

A. Rules involving the military or foreign affairs function of the US

B. Rules involving matters relating to agency management or

personnel or public property, loans, grants, benefits and contracts

2. 553(b) says the following are exempt from NC Rulemaking procedures

and at the same time, don’t get Mead/Step 0 or Chevron deference b/c
of no force of law or procedure:

A. interpretive rules

B. general statements of policy

C. rules of agency organization, procedure and practice and

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D. agency findings for good cause that notice and public procedure
are impracticable, unnecessary or contrary to the public interest

3. If agency doesn’t use NC rulemaking, then they’ve either made an

interpretive rule or a kind of legislative rule and we have to strike it
down if it doesn’t comport w/ 553; it’s hard to tell the diff

4. “General statements of policy”

A. Don’t have the force of law thus they are meant to guide the
regulated entities but since they are not binding, they might not
offer as much guidance as a regulated entity might want.

B. Agencies might wish to shield their regs from the scrutiny of NC

rulemaking by casting would-be regs as “statements of policy” but
they would still be subject to scrutiny. ~Young Dissent

C. CASE: Community Nutrition v Young

i. Facts: FDA issued what it called a “general statement of policy”
indicating that it would not take enforcement measures for food
containing a certain level of contamination unless the
contamination reached a certain actionable threshold level.

ii. Held: DC Circuit held that this effectively made amounts lower
than the threshold level illegal. There was no evidence that
this was a tentative decision or that the agency would not
always follow its own policy, thus this is meant to have the
force of law and should have been promulgated through NC
Rulemaking.

5. Rules that are “interpretive”

A. Distinguishing legislative from interpretive rules: ~American

Mining

i. In the absence of the purported interpretive rule, would there

be an adequate legislative basis for enforcement or other
agency action to ensure compliance or enforcement?

ii. Is the ruled published in the Code of Federal Regs?

iii. Has the agency explicitly invoked its general legislative

authority?

iv. Is the rule effectively amending a prior legislative rule?

v. If “yes” to any  then yes legislative rule

B. At the ChevronStep 2 inquiry of reasonableness, agency disregard

of significant policy arguments will clearly count against it.
~American Mining

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C. CASE: American Mining Congress v DoL

i. Facts: DoL promulgates rules through NC rulemaking on illness
reporting requirements. DoL issues “Program Policy Letters” to
determine who has been “diagnosed” with an illness according
to the opacity of x-rays. PPL’s were not adopted through NC
rulemaking.

ii. Held: The PPL’s are interpretive and not subject to NC

rulemaking.

6. Agency’s “interpretation” of its prior regulations

A. CASE: Hoctor v USDA (lions and tigers case)

i. Facts: USDA uses NC rulemaking to issue reg that housing for
big cats must be “structurally sound.” At the suggestion of the
USDA, Hoctor built a 6-foot fence around his big cats. Then
dept issued internal memo saying that the fence must be at
least 8 feet high and cites Hoctor for violation. USDA claimed
that the 8-feet requirement was an “interpretive rule.”

ii. Held: 8-foot rule can’t be adopted w/o NC rulemaking.

iii. Reasoning: The 8-foot requirement, as opposed to 7.5 feet or 9

feet would be ok if made through NC rulemaking but the
“interpretation” here was not an interpretation of any specific
statutory provision and it was arbitrary in terms of being
“structurally sound.”

7. Rules of “procedure”

A. Rule: if agency’s alleged “procedural rule” encodes substantive

value judgments that encroach on a D’s due process or APA rights
to notice and hearing, then the rule must be passed through NC
rulemaking. ~Air Transport

B. Exempted rules of “procedure”-refer to rules that don’t govern the

primary conduct of persons but rather are more internal; ie if
agency passes procedural rule saying a permit must be filed in
duplicative, that is not subject to NC rulemaking.

C. Rules that prescribe a timetable for asserting substantive rights

are procedural and ned not use NC rulemaking. ~National
Whistleblower

D. CASE: Air Transport Association of America v DoT-vacated by SC

i. Facts: Congress authorized the FAA to establish a program of
admin penalties for violations of its act. FAA issued its “Penalty
Rules” implementing the program w/o NC Rulemaking. Penalty

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Rules include a schedule of fines as well as a comprehensive

adjudicatory scheme providing for formal notice, settlement
procedures, discovery, an adversary hearing before an ALJ and
an admin appeal. FAA argued that the Penalty Rules are of
“procedure” and are thus exempt from NC rulemaking.

ii. Held: DC Cir says a rule does not fall w/in the scope of the
exception merely b/c it has some “procedure.”

iii. Reasoning:

a. Test: a so-called procedural rule is not exempt from NC

rulemaking if it substantially affects a D’s right to an
administrative adjudication. Under the due process clause
and the APA, the D has a right to notice and a hearing
before being forced to pay a fine.

b. If agency’s choices “encode a substantive value judgment”

on the appropriate balance b/t a D’s right to adjudicatory
procedures and the agency’s interest in efficient
prosecution, then should be done through NC rulemaking

E. CASE: National Whistleblower Center v NRC

i. Facts: NRC changed its std for granting filing extensions from a
showing of “good cause” to a showing of “unavoidable and
extreme circumstances” as part of a goal to streamline the
schedule for license renewals. Std was not passed pursuant to
NC rulemaking.

ii. Held: DC Cir held that NRC was free to adopt this new std w/o
using NC rulemaking b/c rules that assert a timetable for
asserting substantive rights are procedural. And the new std
gave plenty of time to intervene.

The Availability and Timing of Judicial Review

1. APA 701 provides that APA’s judicial provisions don’t apply “to the
extent that:”

A. (1)-statute precludes judicial review or

B. (2)-agency action is committed to agency discretion by law

2. Abbott Labs-start w/ presumption of reviewability; only upon a

showing of “clear and convincing evidence” of a contrary legislative
intent can the cts restrict judicial review

APA 701(a)(1): No judicial review if statute precludes judicial review

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1. Preclusion can be explicit or implicit due to policy reasons.

2. Block/Bowen policy reasons to allow/deny judicial review to a potential

P:

A. Is there complete silence on potential P?

B. Is the potential P’s interests represented by another interested

party?

C. Will allowing potential P to sue disrupt agency’s relationship w/

other parties?

D. Congressional intent and purpose behind statute?

E. Inappropriate special interest influence that could be changed by

allowing P to sue?

F. Other policy concerns?

3. Bowen and Block make the Abbott Labs presumption weak; now it
seems like cts will made decisions on a case by case basis.

4. CASE: Block v Community Nutrition Institute

A. Facts: Under Act, Secretary of Agriculture sets the min price that
milk handlers must pay to milk producers for their milk. Milk
processed for drinking is highest priced. CNI challenged the
decision arguing that b/c the higher price also applied to
reconstituted milk, this made reconstituted milk less economical
for milk handlers to process, thus depriving consumers of a source
of cheaper milk. Statute says that milk handlers can challenge
Secretary’s orders in court after exhausting admin remedies.

B. Held: Ct holds that the consumers cannot challenge the agency’s

decision.

C. Reasoning:

i. Statute doesn’t address suits by consumers either way but b/c

of complete silence on the matter, ct is hesitant to allow
consumers to sue.

ii. Policy reasons to disallow CNI:

a. Worried about dragging Secretary straight into court

b. Issues involve technical and complex regs; parties are

repeat players

c. Don’t want consumers to ruin the bargains struck by

Secretary and milk handlers since Secretary is brokering
deals to keep milk prices stable

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d. CNI’s interest in keeping pricing down is identical to milk

handler’s desire to keep prices down to them

iii. Responses:

a. Consumers not part of original txns, didn’t have a voice so

let them in

b. If purpose of legislation was to protect consumers, then

more of a reason to let them in.

c. If the entire deal was a product of special interest influence,

then maybe want to let outsiders like consumers sue

3. CASE: Bowen v MI Academy of Fam Physicans

A. Facts: HHS passed a reg setting higher Medicare reimbursement

rates for “board-certified” fam physicians than for identical
services performed by non-board certified. An association of non-
board certified physicians sued claiming that the distinction
violated the Medicare Act and the 5th.

B. Held: Yes, the physicians can sue.

C. Reasoning:

i. Act doesn’t say anything about challenging the regs as a whole.

We can draw an inference from the silence that doctors can
sue. We know that patients can sue.

ii. This is unlike Community Nutrition:

a. Neither case says anything about the parties that want to
sue.

b. But here P’s interests are not really represented by any

other party

c. Major policy distinction: milk consumers will probably buy

milk even if the price goes up but it’s worse if docs stop
providing medical services b/c they aren’t being reimbursed
competitively. But it’s not clear that this is the right reason
since P has the simple solution of getting board certified.

APA 701(a)(2): committed to agency discretion b/c there’s no law to apply

1. Is a very narrow exception; only works when there’s no legal std or

judicially cognizable std by which to weigh the
lawfulness/unlawfulness of agency action.

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2. Overton Park-ct said the yardstick was the “reasonable or prudent

alternative” language; it’s a very open-ended std but SC says good
enough to be “law to apply”

3. Heckler Rule; absent a specific statutory limitation on an agency’s

prosecutorial discretion, the decision to enforce or not is committed to
agency discretion by law and cannot be reviewed by cts.

4. Norton Rule: discretionary agency action taken to comply or not

comply w/ a general statutory std cannot be reviewed if such review
would force a court to be a super-monitor.

A. Final dispositions can be reviewed by a court.

B. If cts force agencies to promulgate rule, then cts have to measure

compliance and ct will be turned into a continuous monitor.
(Counterargument is that this happens in many situations, so
judges do become overseers.)

5. If statute specifically requires an agency to undertake rulemaking,

then it does not have the authority to refuse to make the rule or
enforce it.

6. CASE: Heckler v Chaney

A. Facts: Prisons used drugs for lethal injection that hadn’t been
approved for that use. Death row inmates challenge the FDA’s
inaction or failure to take enforcement action against these
prisons.

B. Held: Food, Drug and Cosmetic Act did not prescribe any rules to
weigh the use of FDA’s prosecutorial discretion—the decision of
whether or not to take enforcement action was committed to FDA
discretion by law.

7. CASE: Norton v Southern Utah Wilderness Alliance

A. Facts: BLM, per Act, must “continue to manage [fed land] in a
manner so as not to impair the suitability of such areas for
preservation of wilderness.” People were driving ORV’s through
the park. Environmental group sued SoI under the APA for the
“failure to act” b/c org believed that BLM was not taking sufficient
action pursuant to the nonimpairment obligation.

B. Held: A failure to comply w/ general statutory stds is not subject to

judicial review but rather is committed to agency discretion.

C. Reasoning:

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i. SUWA sued under APA 706(1) which gives cts the authority to
“compel agency action unlawfully withheld or unreasonably
delayed.”

ii. SUWA acknowledges that it cannot compel the BLM to act in a

specific way but that it can compel some agency action of
compliance.

iii. SC says that SUWA is attempting to challenge a day-to-day

operation whereas Sec 706(1) applies to final agency actions
which are limited to discrete actions: whole/part of a final
agency order, rule, license, sanction etc.

iv. To allow this suit would inevitably require the cts to judge the
sufficiency of discretionary agency action and compliance w/
general statutory stds.

8. CASE: MA v EPA Redux

A. Facts: CAA says EPA “shall by regulation prescribe…stds” for
certain kinds of air pollution.

B. Held: EPA is statutorily required to act; key phrase is “shall

regulate,” thus EPA can’t duck the issue. They have to make a
judgment on whether CO2 is an air pollutant and then regulate it
based on that decision.

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PART IV: STANDING

1. Standing is a way for cts to control their dockets.

2. The ideal plaintiff is well-financed, a good representative of the

interests at stake, will litigate vigorously and is an experienced or
repeat player

3. P must have suffered an “injury in fact,” which comes from the “cases
and controversies” requirement of the Constitution. ~Sierra Club v
Morton

A. Injury in fact can be economic, noneconomic or even aesthetic

~Sierra Club

B. SC rejects the “special interest” theory; standing does not expand

to groups that have a “special interest” in the subject matter of the
litigation, that is not enough to show that the party was “adversely
affected” or “aggrieved” w/in the meaning of the APA. ~Sierra
Club

4. Lujan v Defenders of Wildlife Standing:

A. Injury in fact:

i. Concrete

ii. Particularized to P

iii. Not the result of some independent action of a third party not
before the court

iv. Aesthetic injury can be “injury in fact”

C. Causation by D

D. Redressability: P has to get something meaningful beyond the

‘warm and fuzziness’ of knowing that you’ve won

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