ADMINISTRATIVE LAW OUTLINE

1. JUDICIAL REVIEW OF ADMINISTRATIVE DECISIONS

a. Congress may sometimes in the agency’s enabling act specify the standard for judicial
review.
i. If the enabling act is silent on the grounds for review, § 706 of the APA fills the
gap by providing a laundry list of grounds on which a court may evaluate the
agency’s decision.
1. The best way to read § 706 is as a list of possibilities, not probabilities.
b. Beyond setting out the list of grounds, the APA says very little about the use of each of
the grounds, how they relate to each other, and how some of the terms ought to de
defined.
c. Section 706 provides that a court reviewing the legality of an admin agency’s action may
hold that action unlawful if the court finds the action to be:
i. arbitrary, capricious, an abuse of discretion , or otherwise not in accordance with
law;
1. This is what was left. Stated differently, the arbitrary/capricious standard
is the RESIDUAL ground of § 706.—
2. If the case is reviewable and no other standard fits, a court may
always review under the arbitrary/capricious standard.
3. Applies to informal rulemaking.
ii. contrary to constitutional right, power, privilege, or immunity;
1. look at cases where Cong tried to deny judicial review (explicitly and
implicitly) in statute, but there was a Const challenge left
iii. in excess of statutory jurisdiction, authority, or limitations, or short of statutory
right;
1. Statute does not authorize Agency to do what it has done
iv. without observance of procedure required by law;
v. unsupported by substantial evidence in a case subject to sections 556 and 557 (of
the APA) or otherwise reviewed on the record of an agency hearing provided by
statute; or
1. Only if case is subject to §§ 556 or 557 of APA
2. It is only formal rulemaking or an individual trial-type proceeding
that is subject to the substantial evidence standard
3. Substantial evidence: something more than a mere scintilla; such
relevant evidence as a reasonable mind might accept as adequate to
support a conclusion
vi. unwarranted by the facts to the extent that the facts are subject to trial de novo
by the reviewing court
1. A de novo proceeding is normally permissible ONLY when a statute
specifically authorizes it.
2. However, even in the absence of a separate statute, de novo review might
be warranted under the APA:
a. “when the action is adjudicatory in nature and the agency’s
fact-finding procedures are inadequate” OR
b. “when issues that were not before the agency are raised in a
proceeding to enforce nonadjudicatory agency action.”
c. *This is almost never invoked
vii. *On exam put the question in as many of these as possible
d. Standards of review under the APA

1
 i. Overton Park- When reviewing admin decisions that are not supported by formal
fact findings, courts should determine the scope of the appropriate official’s
authority, whether that authority was abused, and whether all applicable
procedural requisites have been observed..
1. Importance of Overton Park is that extraordinary procedure of probing
the deliberative processes of administrative agencies is not substantially
great, but not beyond the reach of the Court.
2. Also a sufficient record is needed to accommodate judicial review .
e. Judicial Review of Questions of Law
i. NLRB v. Hearst (paper boys)-Courts have traditionally shown the greatest
deference to agency decisions involving the applications of law to particular
facts.
1. where the question is one of specific application of a broad statutory
term in a proceeding in which the agency administering the statute
must determine it initially, the reviewing court’s function is limited
a. Examplein Hearst Ct determined whether Cong meant c/l of
newsboys, Ct defers to agency on its application
ii. Chevron: Where Cong has left an open question in its legislation, judicial
review of an agency’s interpretation of that question must be limited to
whether the agency’s construction is legitimate.
1. The above involves pure questions of statutory interpretation
2. What is a pure question? Those issues that involve only the meaning of
the words of the statute. They do not involve applying those words to a
particular situations
3. Chevron 2-step
a. (1) Court looks to whether Cong has spoken on the precise
question at issue (if Cong has spoken neither Agency nor Ct can
alter; Ct may use traditional tools of statutory construction to
figure intent)
b. (2) If Cong has not addressed the matter (Cong silent or
ambiguous) the Ct examines agency’s construction of its
statutory mandate
i. Ct must defer to agency if the ct concludes agency
action is reasonable.
iii. FDA v. B & W Tobacco: In extraordinary cases, there may be reason to hesitate
before concluding that Cong had intended an implied delegation to an agency to
filling the statutory gaps left by a statute’s ambiguity.
1. This was where FDA tried to extend regulations of the tobacco industry
iv. Skidmore (agency’s interpretation of its own rule)
1. Great deference rule: An agency’s interpretation of its own RULE will
both be helpful and perhaps persuasive, but it is NOT necessarily
controlling
f. Judicial Review of Question of Fact (or Policy)
i. De novo Review
1. This standard leaves no room for doubt.
2. A reviewing court need NOT pay any attention whatsoever to any of
the agency’s findings or conclusions.
3. The case comes into court as if there were no decision at the agency
level.
ii. Substantial Evidence Review
1. Formal Adjudication (Universal Camera)

2
 a. 2 stages
i. Fact gathering stage—proceeding before the ALJ
1. Agencies should be sensitive to the ALJ’s
findings on such as the credibility of
witnesses, b/c it is the ALJ who hears the
testimony BUT
2. The ALJ is not beyond question
ii. Final agency determination stage
b. Process of Agency adjudication
i. Initial decisions are made by an ALJ and must be
appealed to a higher level within the agency before
judicial review may be sought. The initial decision of the
ALJ is part of the record of agency proceedings that are
reviewed in court.
ii. Therefore when the agency reverses the decision of the
trier of fact (ALJ) on appeal within the agency, the
reviewing ct must take the reversal into account in
deciding whether the agency’s decisions is supported by
SE. The ALJ’s decision weighs against the higher level
agency’s decision
iii. A court performing review must review the record as
a WHOLE, examining both the evidence supporting &
opposing the agency’s decision, to determine whether
the decision is supported on the entire record by
substantial evidence.
1. A decision might fail the SE test, even though it
is supported by some evidence, when that
evidence is overwhelmed by other evidence to
the contrary.
2. Informal Adjudication
a. The usual stdrd of review is the arbitrary & capricious test. (ex:
Overton Park)
b. Substantial evidence applies to informal rulemaking ONLY
when provided by a particular statute. (ex: Benzene case)
i. Is there a difference?
1. maybe SE allows for greater judicial scrutiny of
the scientific or factual bases of agency
rulemaking.
c. Benzene: Before promulgating any permanent health or safety
standard, the Sec of Labor is required to make a threshold
finding that the toxic substance in question poses a significant
health risk in the workplace.
i. They did not produce any evidence on the
significance of the health risk, which was required by
the statute
iii. Arbitrary and Capricious
1. State Farm (seatbelt case): When an agency modifies or rescinds a
previously promulgated rule, it is required to supply a satisfactory,
rationally analysis supporting its decision.
a. Note that the recession of a rule is subject to the same standard
of review as the promulgation of a rule

3
 b. “The scope of review under the ‘arbitrary and capricious’
standard is narrow and a court is not to substitute its
judgment for that of the agency. Nevertheless, the agency must
examine the relevant data and articulate a satisfactory
explanation for its action including a rational connection
between the facts found and the choice made.”
c. “Normally, an agency rule would be arbitrary & capricious
if
i. the agency has relied on factors which Congress has not
intended it to consider,
ii. entirely failed to consider an important aspect of the
problem,
iii. offered an explanation for its decision that runs counter
to the evidence before the agency, OR
iv. offered an explanation for its decision that is so
implausible that it could not be ascribed to a difference
in view or the product of agency expertise.
d. In State Farm the Agency . . .
i. tried to take informal action here, instead of initiating a
new rulemaking.
ii. The agency tried to avoid making the record that a new
rulemaking would have made!
iii. The “hoops” are meant to focus the attention of all
interested parties on the subject and let them get stuff on
the record for judicial review.
iv. But an agency changing its course must supply a
reasoned analysis.”
2. AVAILABILITY OF JUDICIAL REVIEW
a. Jurisdiction (Can a court hear a claim?)
i. Federal Court Jurisdiction Over Petitions for Judicial Review
ii. Specific Review Statutes: Agency enabling acts often grant a right of judicial
review and explicitly create federal court jurisdiction over petitions for review.
iii. Federal Question Jurisdiction (most of time court of appeals hear the case)
1. If Congress has not provided for judicial review in an agency’s enabling
act, a party who meets APA and constitutional standing rqmts can bring
an action for judicial review in the district court under the Judicial
Code’s grant of district court jurisdiction over civil actions arising under
federal law.
2. Claims for review of agency action can easily meet the test for
jurisdiction under § 1331.
b. Reviewability
i. Agency Action-longstanding presumption that judicial review of this is available
(unless Cong says no or action committed to agency discretion by law )
1. APA sec 704 provides for judicial review of “agency action made
reviewable by statute and final agency action for which there is no
other adequate remedy in a court.”
a. This statute creates a strong presumption of reviewability for
final agency action
b. Gives judicial review of final agency action when no other
statute provides for review
ii. Statutory Preclusion of review

4
 1. Sec 701 specifies 2 situations where APA judicial review is not available
a. (1) When a statute “precludes judicial review” and
b. (2) when “agency action is committed to agency discretion by
law”
2. Explicit preclusion
a. Johnson v. Robinson-a statute prohibiting judicial review of the
decisions of the Admin of Veterans Affairs does not bar federal
courts from deciding constitutionality of veteran’s benefits
legislation
i. Sec 701(a)(1) above is applicable. Veterans Admin Act
provided that decisions of the VA on any questions of
law or fact under any law administered by the VA shall
be final and conclusive and no other official court of he
US can review it.
ii. General rule Cts are hostile to statutes that purport to
restrict people’s access to judicial review. Here
beneficiary determination is not subject to judicial
review
1. Might read case to suggest that there is a special
rule that Cong can preclude review of
determinations that aren’t constitutional
2. Better to say that Courts find more persuasive
factual reasons for precluding review than they
do constitutional reasons
3. Implicit preclusion
a. Cts have found that statutes implicitly preclude review when the
statutes channel review in particular ways or on behalf of
particular parties
i. Exists only when Congress is very explicit concerning
review (i.e. who can obtain review, how review should
be sought, etc. . .)
b. McNary v. Haitian Refugee-a statutory bar of judicial review of
individual case determinations does not prevent a court from
reviewing collateral constitutional challenges.
iii. Committed to agency discretion by law (sec 701(a)(2))
1. Very narrow exception which applies “in those rare instances where
‘statutes are drawn in such broad terms that in a given case there is
no law to apply.’”
a. Judicial review is not possible b/c there is no discernible
statutory standard against which to judge the legality of agency
action.
b. B/c Cong usually gives agency statutory guidance, this exception
rarely met
2. Webster v. Doe (CIA)-under Nat’l Security Act employee termination
decisions made by the CIA Dir are not judicially reviewable because of
his broad agency discretion.
a. Const claim was allowed b/c Cong cannot grant the director the
discretion to violate Const
b. Short answer-Although statutes can take away the ability to sue
over factual/legal determinations, they are not, unless very

5
 explicit and clear applicable, to prevent you from suing for
deprivation of constitutional rights.
3. Prosecutorial Discretion
a. Ct has been reluctant to allow judicial review of agency
decisions involving when to regulate or whom to prosecute for
violations w/i the agency’s jurisdictions
b. Heckler v. Chaney (inmates trying to prevent lethal injection)-
FDA refrain from enforcement proceedings and was not subject
to judicial review
i. There is a presumption of unreviewability; can be
overcome by statute (e.g. statute says must prosecute
everyone; thus, Cong can put in statute for review)
4. Regulatory Delay p.253
a. Questions whether inaction is final agency action?
b. APA allows judicial review of agency action that is
unreasonably withheld.
i. Unclear of meaning
ii. Means more than just not getting the answer when you
like
iii. Also means that you really can’t make an agency act if
agency thinks its resources are better spent elsewhere
c. Chao-here OSHA made a finding that a standard was not
sufficient, but lagged on promulgating a rule. B/c they openly
admitted an insufficiency they put pressure on themselves to do
something, but they just kept delaying. Due to the delay the court
got suspicious. The Ct, however, did not make OSHA act, but
they did give them some encouragement to proceed in the
rulemaking.
5. Resource Allocation and Appropriations
a. Lincoln v. Vigil: Rules of an agency organization are exempt
from notice and comment requirements of the APA..
i. In case Cong gave Agency some $ and gave broad
pronouncement to take care of Native Americans
ii. Ct says that a lump-sum appropriation was a
congressional determination that the agency, within
broad parameters, should determine how to spend
the money
1. so grants are unreviewable discretions to the
agency to decide how to appropriate lump sum
c. Standing to Secure Judicial Review
i. Relationship between standing and reviewabilitycommitted to agency
discretion b/c no law to apply b/c Cong has given no law/legal rights for the
agency to respect
ii. Gov’t did something a person does not like. Ct says, yea, but no rights were
violated. When the agency is not doing something directly to you, it is more
difficult to get standing.
iii. Basic Rule-you have to suffer some injury in fact and it must be legally
cognizable.
1. Must be more than worse off
2. Ct must be able to remedy you situation through a ruling
3. Must have a legal right

6
 a. OR put another way
i. Authorization by Const or legislative enactment
ii. A case or controversy
iii. Prudential limitations (e.g. zone of interests)
iv. APA sec 702a person suffering
1. (a) legal wrong b/c of agency action (violation of a legal right) OR
2. (b) adversely affected or aggrieved by agency action w/i the meaning
of a relevant statue is entitled to judicial review (this is zone of interests)
v. Legal Rights Test (must allege injury to a legally protected interest)
1. Court’s expansion of the definition of standing to include competitors
abandoned this prior approach by the Ct.
2. In Sanders Bros., the Ct acknowledged that the company had no right to
be protected from new competition.
a. This case gave express standing to “persons aggrieved;” the
court has interpreted this phrase in a manner that expands it to
competitors
3. This test goes to whether Cong can give you a legal right by passing a
statute or whether it must emanate from the Const
4. Camp-standing to challenge an order of an administrative agency is
established by a showing that the interest sought to be protected is
arguably w/i the zone of interest to be regulated by the statute or the
constitutional guarantee in question.
a. Competitive injury is a legal injury (here) b/c the statute was
aimed to protect someone in the plaintiff’s position
5. Barlow-the zone of interest test:
a. Very broad
b. Develop a factual record to demonstrate concrete harm (think
about the Lujan case below)
c. Zone of interest can include “aesthetic, conservational, and
recreational interest as well as economic interest as in Camp
d. ***The zone of interest test takes a political view of standing b/c
it asks not whether the plaintiff has a legal right at stake but
rather whether the plaintiff’s interests were considered by Cong
or the regulatory body.
vi. Constitutional Standing Rqmt: Injury Causation, Redressibility
1. Lujan-a person may not challenge an administrative regulation unless he
can demonstrate an imminent injury and redressability.
a. This is a more narrow zone of interestmust suffer an (1)
injury in fact (a) concrete and particular (b) actual or
imminent (2) must be a casual connection between injury and
agency conduct (3) injury can be redressed by favorable
judicial decision
i. For this must have a substantive impact on the claimant
ii. courts are reluctant to find standing when the person is
in a different position from everybody else
b. Petitioners wanted to establish precedent where they would not
need some type of direct connection with the place/animals in
order to have standing
vii. Things to know on the exam for standing
1. “Associational Standing” Associations have standing two ways:
a. Have standing to represent its own interests.

7
 b. Associations are legal entities that are directly affected.
c. Have standing to stand in for members.
i. It has to have members.
1. “Supporters” are not members.
2. Must pay dues, be involved, etc…
3. Assert their rights/complaints… if they want to
join, they can… but then assert on their own
behalf.
2. “Congressional Standing” No special standings privilege as a member
of Congress.
a. Any standing comes because something injures them in their
capacity as a member of Congress… NOT because they have
some type of special status/broader reach.
b. Could Congress, by statute, grant themselves special standing?
c. Probably not… but they could expand their breadth in other
ways.
d. Timing of Judicial Review
i. Judicial review may only be sought when (1) the claim is ripe, (2) when
administrative remedies have been exhausted, and (3) before the claim becomes
moot.
1. Claims may not be brought too early (ripeness), too late (mootness), and
(in some cases) without exhausting administrative remedies.
ii. An Examination
1. Finality: Focuses on when the agency has completed an action, so as not
to have courts interfere with ongoing agency activities (note that I may
have some finality material in the ripeness section)
a. Basically a petitioner has been told NO
2. Exhaustion: hoops petitioner must go through within agency…have
they exhausted these? Allows an agency the initial opportunity to
address a challenge to its action. By requiring persons to first appeal
their challenges to agency action w/i the agency itself, courts respect the
congressional placement of responsibility for administration of the law
in agency hands, enable them to cure their own mistake…
3. Ripeness: Too early? Is issue sufficiently developed for judicial
resolution or whether the issue would be better considered in a later
proceeding
4. Moot is it too late? A case is moot is there is no longer a live controversy
between the parties
a. Note last two derive from Const requirement of “case or
controversy;” either too early for an injury sufficient for standing
or tool late to remedy the decision
iii. Ripeness and Finality
1. not a question of whether you can sue, but of whether you can sue now
2. Sometimes a statue dictates when action is final or at least reviewable .
a. If none then you must analyze the case in terms of the judge-
made doctrines of ripeness and exhaustion to determine when it
is permissible to take a dispute out of an agency and into court
3. When are informal actions final?
a. When it has the effect of granting or denying permission to take
a requested course of action
b. Informal responses to inquiries

8
 c. *Tentative or incomplete decisions should not be reviewed
4. Ripeness
a. *note difference with exhaustionexhaustion doctrine is more
concerned with where w/i the agency’s structure the dispute lies.
b. A rule may be ripe upon promulgation (before enforcement) if
the issues are
i. (1) fit for judicial review and
ii. (2) the party seeking review would suffer substantial
hardship if review was delayed until enforcement
1. Essentially a fitness and hardship question
c. Abbot Labs-“where the legal issue presented is fit for judicial
resolution, and where the regulation requires an immediate and
significant change in the plaintiff’s conduct of their affairs with
serious penalties attached to noncompliance, access to the courts
under the APA and the Declaratory Judgment Act must be
permitted, absent a statutory bar or some other unusual
circumstance.”
i. Here review was appropriate because as soon as the
rule is implemented, it takes effect, because
companies must change and comply to make sure that
they do not get struck down and fined for violating the
new regulation
d. Gardner
i. Pre-enforcement review o.k. if (1) self-executing (2)
has immediate and substantial impact on respondents (3)
rules appear “prima facie” susceptible of reasoned
comparison w/the statutory mandate OR (3) there is
sufficient hardship to warrant pre-enforcement judicial
review (i.e. (a) immediately expensive to comply with
regulation or (b) special problems (risk of penalties)
arise for a party who violated the regulation)
ii. Short way to look at it
1. When applying for federal benefits not ripe
until you apply and they tell you no
2. When regulations force you to act claims are
usually seen as ripe before regulation acts on the
individual
5. Exhaustion of Admin Remedies
a. Cts only require complete exhaustion if the statute or regulation
says so
i. No general exhaustion requirement beyond APA sec
704’s finality requirement; if an agency is final within
that section then judicial review is allowed.
b. Not required in 3 narrow circumstances
i. Exhaustion would cause undue prejudice to the
protection of the rights at issue;
ii. The admin agency lacks power to grant effective relief
1. example: in McCarthy-prisoner sues prison
officials for damages b/c of alleged
unconstitutional conditions in prison

9
 iii. exhaustion would be futile because the admin body is
biased
c. Can overlap with ripeness
i. If court declines to hear an appeal b/c the litigant has not
exhausted available admin remedies, the matter is not
ripe for review.
iv. Res Judicata (claim preclusion) and Collateral Estoppel (issue preclusion)
1. Mendoza-Collateral estoppel will be applied to cases involving the US
only where the plaintiff was a party to the preceding litigation (this is
mutual collateral estoppel (same party); allowed against US)
a. CE may apply against the Gov’t only if it is mutual (i.e. involves
litigation b/t the same parties)
b. Nonmutual CE bars a party in a subsequent adjudication from
relitigating a point that it lost on in a prior adjudication against a
different party. This is not available against the US.
i. Reasonsgov’t would have to appeal all cases of first
impression, weaken the cts because they only get one
bite of the apple
3. ADMINISTRATIVE POLICYMAKING
a. Policy Making Instruments
i. Rulemaking
1. When agencies make policy through RULEMAKING, it is acting like a
legislature, and later the ONLY issue (when the agency brings an
enforcement action) is whether the regulated party violated the rule.
2. When agencies make policy in adjudication, they act much like common
law courts—announcing new “rules” in the course of deciding the
particular case before the agency.
ii. Informal policymaking:
1. Agencies often make policy decisions informally, without using either an
adjudicatory or rulemaking process. This is proper as long as it does not
appear that the agency was required to use a more formal procedure.
2. In informal decision-making, the agency must give notice of its decision
and provide a brief explanation.
3. R: This is MOST of administrative law—informal adjudication—going
to the agency and talking them into doing what you want—lots of
negotiating, understanding the politics of the situation, maybe even
threatening to file a petition, rule, or complaint.
4. “informal” means that there is no clear process prescribed by the APA or
the enabling act
iii. Legal Constraints on Choice of Policymaking Models
1. Due Process
a. Under certain circumstances, due process requires adjudication.
b. In most cases, however, the choice between rulemaking and
adjudication is left to Congress or to the agency under delegation
from Congress.
c. Requires notice and an adjudicatory hearing when agency
action affects a particular party and is based upon facts
specific to the situation of that party. These facts are referred
to as “adjudicative facts.”
d. Where agency action is based upon conditions common to
many parties in an area, such as the value of all property in a

10
 city, such general facts are referred to as “legislative facts,” and
a legislative process is constitutionally sufficient.
e. RARE that due process makes them do one or the other
2. Statutory Constraints look to p.337 (APA and specific enabling acts to
agencies)
a. The APA and the Choice of Policymaking Mode—p.367
i. The APA does NOT explicitly regulate the choice of
policymaking mode, but its definition of “adjudication”
and “rulemaking” provide some guidance on the choice.
ii. Basically, the APA provides that everything that is not
a rule is an order (and adjudication creates an
order). So, something cannot be BOTH rulemaking and
adjudication.
iii. The APA itself does not explicitly state when agencies
must engage in rulemaking or adjudication to make
policies.
1. However, agencies must employ an adjudicatory
process to issue orders against regulated parties.
2. Agencies make rule-like determinations in both
rulemaking and adjudication, and either is
proper as long as the agency has the power to
use the particular procedure and all the
procedural rqmts are observed.
iv. Agency Authority/Discretion to Make Policy by Rule
1. Agencies, like common law courts, often announce new rules in the
course of deciding matters in adjudication. However, there are policy
reasons favoring RULEMAKING as the procedure for formulating rules.
2. If an agency has statutory authority to make rules, then rulemaking
obviously is an appropriate procedure for making policy.
3. B/c rulemaking has several legal and policy advantages over adjudication
and informal policymaking, courts prefer policymaking by rule.
4. For advantages and disadvantages look to p.28 of Toni’s outline
5. Petroleum Refiners-The Trade Commission Act includes a provision
that specifically provides for rulemaking by the FTC to implement its
adjudicating functions
a. FTC decided to make policy by announcing broad generally
applicable rules rather than going case by case.
b. The Court allowed even though power not expressly in FTA
because FTC needed the power to this and it could be inferred
from the administrative scheme.
c. So unless the statute specifically sets forth procedure, agencies
can choose between adjudication and rule-making (also look to
agency’s enabling statute)
v. Agency Discretion to Make Policy by Order after Adjudication
1. Q: To what extent do agencies have a choice between making policy by
rule or order?
a. R: They have almost COMPLETE discretion, with limited
exceptions.
2. Some agencies, notably the NLRB, make policy primarily through an
adjudicatory process in which new rules of decision are announced in the
course of deciding particular adjudicatory matters.

11
3. B/c the APA’s definitions appear to contemplate rulemaking as the
procedure for formulating GENERAL rules, general rules stated as part
of a decision in an adjudication have been attacked as having been
promulgated without a proper rulemaking procedure.
a. The Court has rejected these challenges, although not
definitively, stating that the choice between adjudication and
rulemaking lies largely within the discretion of the agency.
4. Rulemaking in adjudication:
a. Agency has discretion on whether to adjudicate or make a rule;
however, the Court has never definitively approved the
making of general rules in an adjudicatory process.
b. Excelsior Underwear-One of the NLRB’s functions is to
conduct elections in which employees have the opportunity to
cast their ballots for or against representation under
circumstances that are free to not only from interference,
restraint or coercion, but also from other elements that prevent a
free and reasoned choice.
i. NLRB established a prospective rule (did not apply to
parties in case) through an order in this adjudicative
action.
ii. Ct basically says it is wrong, but allowed it anyway
iii. Because it is prospective rule Exclesior will not appeal
because the rule does not affect them in this voting and
the Union will not appeal because they could get an
unfavorable decision on appeal and the decision as it
stands leaves open opportunity for future voting.
c. Wyman-Gordon-the rulemaking provisions of the APA may not
be avoided by making rules in the course of adjudication
i. NRLB tried to apply rule announced in NLRB
ii. APA requires publication in the Federal Register of
notice of proposed rulemaking and of hearing;
opportunity to be heard; a statement in the rule of its
basis and purposes; and publication in the Fed Reg of
rule adopted.
iii. Problem was that in Excelsior NLRB made a
prospective rule in the prior decision above that did not
apply to the parties in that adjudicatory hearing
iv. In any event, here W was specifically directed by the
NLRB to follow a certain course of action; this
direction was part of an order and valid
d. Bell Aerospace-NLRB can make a rule through adjudication, but
in adjudicating it cannot read a new and more restrictive
meaning to a statute
i. The Board reversed itself on construction of its own
statute. The Court said this needs to be done through
proper procedures
ii. Thus
1. Agencies, in general, are free to make policy
through either a rule or adjudication EXCEPT

12
 a. If there has been detrimental reliance
on an interpretation then must have
rulemaking
vi. Policy by Manual
1. Morton v. Ruiz-before an agency may extinguish the entitlement of
potential beneficiaries, it must comply with its own internal procedures
a. Agency chose not to publish its eligibility requirements; it was
only in the manual; thus, before extinguishing rights an agency
must comply with own internal procedures.
b. Agency must establish eligibility requirements according to
established procedures.
c. Case partly stands for the proposition that limitations on
eligibility may not be newly imposed case by case, even on the
basis of reasoned opinions, because the limitations must be made
known in advance to persons adversely affected by them.
d. Clear that Court disapproves of non-public policymaking when
the policy arrived at restricts the rights of members of the public
b. Public Participation in Rulemaking
i. Rule-Making
1. Formal (APA §556, 557)
a. VERY Slow, time consuming and expensive
b. Involves notice, a hearing, an opportunity to present testimony,
and cross examine witnesses
c. Few statutes require (usually when they do Cong likely does not
want many rules promulgated)
2. Informal (APA § 553)
a. Notice & Comment
b. Fairly loose and not a highly constrained overproceduralized
process.
c. Basic requirements
i. (1) publish notice of the proposed rulemaking
ii. (2) opportunity for public comment
iii. (3) after consideration of comments, publication of final
rule
iv. (4) publication of concise general statement of the rule’s
basis and purpose
d. Notice
i. Sec 553: “General notice of proposed rule making shall
be published in the Fed Reg. The notice SHALL
include . . . either the terms or substance of the proposed
rule or a description of the subjects and issues involved.”
ii. Problems
1. Affected parties need sufficient notice to alert
them in advance that their interests are at stake
2. Notice must be sufficient enough to ensure
comments are informative enough to be useful
in its decisionmaking process
3. Original notice may not inform affected parties
of the damage the adopted rule would do to their
interest

13
 4. Final rule must have a direct relation to final
(can have notice about lawnmowers then
promulgate a rule about tvs)
iii. Notice allows (1) improved quality of rulemaking
through diverse public comment (2) fairness by giving
affected parties to express their views (3) effective
judicial review of the final rule by enabling critics to
develop evidence in record to support their objections
iv. Chocolate Manufacturer’s Assoc.-the notice of a
proposed rulemaking must contain either the terms or
substance of the proposed rule or a description of the
subjects and issues involved.
1. Agency does not have a carte blanche to
establish a rule contrary to its original
proposal simply because the agency receives
suggestions to alter the rule during the
comment period.
2. If the final rule materially alters the issues
involved in the rulemaking or if it substantially
departs from the terms or substance of the
proposed rule, the notice is inadequate.
3. Explanation of decision: General Concise Statement
a. APA § 553 requires the agency to “incorporate in the rules
adopted a concise general statement of their basis and purpose.”
i. Essentially repeats the notice of proposed rulemaking’s
explanation of what the agency is attempting to do in the
rule and why, as modified in light of further information
and comments received during the rulemaking.
b. The statement must contain a reasoned explanation for the
agency’s decision.
i. They don’t have to discuss every item of fact or opinion.
But, they need to enable the court to see what major
issues of policy were ventilated by the informal
proceedings and why the agency reacted to them as it
did.
4. Integrity of Record: Exparte Contacts
a. Ex parte contact is a communication by an interested party to an
administrator made outside the normal comment process
b. Can be made by a private person or members of Cong
c. APA rules
i. Informal rulemakingpermitted
ii. Formal rulemakingprohibited
1. Why? (1) Deprives parties of meaningful
opportunity on other matters considered by the
agency (2) violates the requirement that judicial
review be based on the whole record before the
agency (sec 706)
iii. Ex parte communications that occur before the notice of
proposed rulemaking are allowed
d. HBO v. FCC-the public record must reflect the representations
made to an agency so that relevant information supporting or

14
 refuting those representations may be brought to the attention of
the reviewing courts by persons participating in agency
proceeding.
i. The presence of secrecy makes it difficult to judge the
truth even when later disclosed by the FCC.
ii. Once a notice of proposed rulemaking has been issued,
discussion with interested parties should be prohibited,
and if made, a written document or a summary of
any oral communications must be placed in the
public file immediately.
5. Integrity of Record: Political Influence
a. Agencies are often contacted by executive branch officials and
members of Cong concerning pending rulemakings and other
administrative action
b. B/c agencies are part of the political system, these ex parte
contacts have presented courts with special problems
c. Sierra Club v. Costle-Clean Air Amends of 1977 provided that
EPA put all relevant documents that became available after a
proposed rule has been published be placed in the docket as soon
as possible after their availability
i. S objected to meetings b/t EPA and White House and b/t
EPA and a Sen. Also complained of EPA accepting 300
late comments. (note that S could not attack rule so
attacked the procedure)
ii. Ct says
1. Late commentsnothing in statute prohibits or
requires the EPA to accept late comments
a. Only thing is if they rely on them they
must put them in the record
2. Meetingsstatute says nothing about meetings;
Court stresses importance of these in
INFORMAL rulemaking; CT ALLOWS
a. Docketing is needed if meetings were
“of central relevance”
3. President has right to info and input in the
admin process
4. Cong ex parte contacts also allowed BUT
a. The content of the pressure must be
irrelevant or extraneous to the issues the
agency is considering AND
b. the agency must not be affected by the
pressure
5. So long as the agency offers an adequate and
independent basis for its rule, courts are likely
to excuse attempts at congressional and
presidential pressure
6. ***President and Cong may not attempt to
influence the outcome of adjudications
6. Integrity of Record: Agency Bias
a. One of the concerns of agency decisionmaking is that the
decisionmaker be fair to all parties concerned

15
 b. Rulemaking v. Adjudication (different standards)
i. Informal rulemakingdoes not require same
neutrality
ii. Adjudicationsmall measure of prejudgment may
be sufficient to disqualify decisionmaker from
process
c. Notice and comment rulemaking presupposes that the
decisionmakers at least consider the comments submitted
d. Ct standard—whether a disinterested observer may conclude that
the decisionmaker has in some measure adjudged the facts as
well as the law of a particular case in advance of hearing it
e. Legislative facts are ordinarily general and have no reference
to specific parties.
f. Proving a Close Mind
i. Must show (by clear and convincing) from public
and/or private statements that the decisionmaker is
convinced that the proposed rule is necessary w/o
regard to the substance of the comments received. This
is a STRICT STANDARD
ii. Assoc. of Nat’l Advertisers-An agency member should
be disqualified from decision-making only when it is
shown he has an unalterably closed mind
1. Here Comm’r made some statements prior to
rulemaking (TV ads for children)
2. Comm’r was considering legislative facts not
adjudicative facts
a. Expression of opinion before
rulemaking does not mean he can’t keep
an open mind during proceeding

7. Hybrid Rulemaking (Not in APA)

a. Informal rulemaking w/ Extra Hearings
i. Created by Statute: statute changes rules
ii. Non-statutory:
1. Judicial: courts decide that extra procedures are
necessary (after Vermont Yankee below this does
not happen much)
2. Agencies: usually valid if they decide to do; rare
that they do
iii. Natural Resources Defense Council (Vermont Yankee
in DC Circuit)-An agency has discretion to select the
most effective procedures to compile a record, but it
must scrutinize the record as a whole to insure that a
genuine opportunity to participate in a meaningful way
are provided to all.
1. Essentially, here decided the court decided it
can impose a higher standard for notice and
comment than the APA required; Ct does not
tell them what to do, only to do more
iv. Vermont Yankee (appeal from previous)-The adequacy
of the record in agency rulemaking proceedings is not

16
 directly dependent on the type of procedural devices
employed but turns on whether the agency has followed
the statutory mandate of the APA
1. Ct says DC Cir got it wrong; can’t impose
higher standard than the APA; that is for the
agency to decide
2. If informal rulemaking, so long as agency
meets the APA, the courts cannot impose
additional procedural devices to their original
plan (must come from Agency or Cong)
8. Exemptions from notice and comment sec 553
a. (1) military and foreign affairs (2) matters relating to agency mgt
or personnel (3) interpretive rules (4) general statements of
policy (5) rules of agency organization or practice (6) when the
agency finds that such procedures are “(a) impracticable, (b)
unnecessary, or (c) contrary to public interest
i. (3) Interpretive rules(i) whenever a regulation has an
impact on how people act it is legislative; (ii) if it
merely advises people in the agency on how to view
things it is interpretive (these are exempt)
1. 2 tests to determine
a. Substantial impactwhether the rule
has a substantial impact on the regulated
community
b. Legally Bindingif the questioned rule
is legally binding, it cannot be an
interpretive rule
ii. (6)(a) Impracticablegenerally means some emergency
dictates immediate rules w/o procedures
iii. (6)(b) Unnecessarymeans public would have no
interest in commenting on the rule
b. Sullivan-when an agency promulgates a regulation by notice and
comment, it may not subsequently repudiate that announced
meaning w/o proceeding through the notice and comment
rulemaking normally required for amendments of a rule.
i. This is an example of the interpretive v. legislative rules
ii. The agency could not alter, w/o notice and comment, the
abortion regulations in order to permit doctors to give
abortion counseling, unless it could be legitimately
characterized as an interpretation consistent with
language and purpose.
c. Hoctor-a legislative rule is valid only if promulgated after notice
and comment. (this is the animal fence case)
i. An agency must utilize APA procedures when
promulgating “legislative rules” which involve policy
judgments;
ii. “interpretive rules” are those that merely announce
how an agency interprets its own regulations , as well as
statutes.
iii. May have to look at case for the facts
c. ?Strengthening the Analytical Basis of Policymaking?

17
 i. Cost-Benefit Analysis
1. Gives useful info, but only tells you what it tells you
2. Sensitive to measurement/definitional techniques
3. Have to determine what is a cost and what is a benefit (note can have
unseen costs or benefits not taken into account)
4. Allows some to draw their data to make their policy look the best
5. May not match up with the way people think
6. The Cotton Dust Case-the OSHA Act requires OSHA to develop
standards that reduce or eliminate risk of health impairment to the extent
such standards are technologically and economically feasible.
a. Case dealt with the word “feasible” under OSHA Act” Does it
mean
i. “capable of being done” OR
ii. done within a reasonable amount of money
b. Basically court conducted its own cost/benefit analysis
c. *Not sure about this case
ii. Regulatory Impact Statements
1. Vermont Yankee-the adequacy of the record in an agency rulemaking
proceeding is not correlated directly to the type of procedural devices
employed, but turns on whether the agency has followed the statutory
mandate of the APA.
2. Stryker’s Bay-NEPA, while establishing substantive goals for the nation,
imposes on agencies a duty that is essentially procedural
a. Supreme Ct says that lower court overstepped its bounds by
deciding how the NEPA process should have turned out rather
than allowing the agency to do its job.
b. Once an agency has made a decision subject to NEPA’s
procedural requirements, the court’s role is to insure that the
agency has considered the environmental consequences
4. AGENCY ADJUDICATION
a. Adjudication
i. Formal
1. Just Plain “Adjudication”
a. Have hearing, make decision…
ii. Informal
1. Executive Action
2. Somebody in an office somewhere makes a decision.
3. Basically executive decision-making.
4. 98% of what agencies do…
5. Must persuade the agency official to exercise discretion in way that
benefits your client… use this with advocacy skills and knowledge of the
record.
6. Almost like lobbying.
b. Agency Authority to Adjudicate (when agency acts as the judge/jury)
i. Congress can delegate quasi-judicial powers to them. Why?…court’s are
overloaded, agency mission may require, agency quicker/cheaper, …real
reason…courts don’t want to hear all the crap.
ii. Separation of powers problem. B/c Article III vests the judicial power in the
Article III courts, it has been argued that administrative agencies usurp that
power when they adjudicate cases. However, the SC has approved a great deal of
agency adjudication.

18
iii. Private v. Public Rights—Court makes a distinction on whether agencies can
adjudicate
1. Public (Yes)
a. The adjudication of public rights may be assigned to
administrative agencies
b. Public rights = claims against the government
2. Private (Limited)
a. Private rights = legal disputes between private parties
b. The adjudication of private rights disputes in admin agencies is
suspect and may occur only under certain conditions.
iv. Current Law: Pragmatic Test:
1. Today courts use a pragmatic test to determine whether the assignment
of adjudicatory functions to an agency violates the sep of powers.
2. Use a BALANCING TEST that weighs:
a. The threat to Article III values AGAINST
b. The concerns that led to the assignment of adjudicatory authority
to the agency.
i. Primary question: whether the assignment of
jurisdiction to a non-Article III adjudicator threatens the
institutional integrity of the federal courts.
v. Factors: Some applied in Schor
1. Traditional Article III cases
a. SC’s review will be most exacting when Congress assigns
adjudication of a claim to an agency that is of the type
traditionally within the jurisdiction of the Article III courts.
b. Thus, in Schor, the Court stated that “where private, common-
law rights are at stake, our examination of the congressional
attempt to control the manner in which those rights are
adjudicated has been searching.”
c. Doesn’t mean they can’t adjudicate common-law rights—agency
in Schor did and court approved
2. Scope of Agency’s Jurisdiction: The broader the scope of the agency’s
jurisdiction, the more likely there will be a violation of Article III.
Conversely, the more an agency’s jurisdiction is confined narrowly to a
particular area, the less the perceived threat to Article III values.
3. Congressionally created rights
a. Agency jurisdiction over private rights disputes, where the
rights involved are congressionally created, is seen as LESS
threatening to Article III values than when the rights
involved arise from another source, such as state law.
b. Court analogizes congressionally created rights to public rights.
c. Conversely, where common-law or STATE statutory rights are
involved, agency jurisdiction is LESS likely to be upheld against
Article III challenge.
vi. Schor-agency adjudication of c/l counterclaims by the CFTC is not
unconstitutional.
1. In deciding whether the delegation of quasi-judicial power to a non-
Article III court is constitutional, the main question must be whether the
delegation tends to encroach on the essential attributes of judicial power
a. Not the case (1) this is a particularized area of law; the CFTC
has not been given broad authority t adjudicate c/l cases. (2) the

19
 level of review (‘weight of the evidence’) is not excessively
deferential; the enabling statute has not expanded the power of
the leg or exec at the judiciary’s expense
c. Due Process Hearing Rights
i. Ask (1) is there a life, liberty, or property interest at stake? (2) if so then what
process is due?
ii. Look to sec 554, 556, 557, and procedure
1. Has there been sufficient notice?
2. Has the person had opportunity to be heard?
iii. The issue is determined by applying federal due process standards to the
procedures already provided and asking whether those procedures are adequate.
If they are not then federal due process law mandates ADDING to those
procedures to bring them up to constitutional standards.
iv. Due process basics
1. requires a hearing at a meaningful time
2. specific requirements vary with situation, but essentially requires
following: (1) advance notice of hearing; (2) oral hearing in advance of
gov’t action; (3) right to counsel; (4) right to confront; (5) right to neutral
decision maker
3. whether more is required depends on Mathews test
v. Goldberg v. Kelly-welfare benefits may not be discontinued w/o a pretermination
hearing with the opportunity to present evidence and confront witnesses.
1. Welfare is a matter of statutory entitlement; therefore the
termination of these benefits must comply with procedural
safeguards “depending on the nature of the government function
and private interest involved.”
a. Welfare provides essential food, clothing, and housing;
depriving an individual of this is taking away a means to live
b. Thus they are so important to require a pretermination
evidentiary hearing
vi. Roth-there is no 14th amend or property interest denied a nontenured teacher
when he is dismissed, thus, no due process rights accrue
1. Just as welfare payments were created by statute, R’s job was defined
and created by his contract, which did not guarantee return after a year
2. This case illustrates the applicability of procedural due process. Before
such rights accrue, the party asserting their existence must establish they
have been deprived of a liberty or property interest.
vii. Arnett c. Kennedy (“Bittersweet Theory”)
1. You get a tenure… you get a “property right.”
2. Justice Rehnquist  Property right you get is only the procedure you get
before it is taken away… in essence, not a REAL property right.
viii. Bishop v. Wood
1. Same as above… Arnett
ix. Cleveland v. Loudermill
1. Once the government tells you it is a property right, they have to act like
you have the whole “bundle of sticks” that goes along with a normal
property right.
2. Basically, to give someone a job and tell them they have a property right,
but in reality you are lying to them because their job does not have as
much due process as normal due process… this is not acceptable.

20
 3. The right to due process is conferred by constitutional guarantee, not by
legislative grace.
4. It is wrong for employers to give employees hope that they will never
lose their job when in fact they can lose their job at any time.
x. Is there a “liberty interest” in one’s reputation?
1. No… if there is no legal effect, then you are stuck with it.
xi. O’bannon-nursing home patients have no constitutional right to participate in a
hearing concerning the revocation of the nursing home’s right to provide them
with nursing care at government expense.
1. The impact of decertifying a facility was indirect to the benefits
received by the nursing home patients and not a deprivation of any
interest in life, liberty, or property.
2. Fact that some hardship may occur (in this case moving) does not turn it
into a harm of property
xii. Requirements of due process
1. Mathews v. Eldridge-due process clause does not require a hearing prior
to termination of disability benefits
a. Ct makes a distinction from Goldberg; here disability
benefits are not as essential as welfare benefits
b. Supreme Court basically says here that there is an Eldridge Triad
P.552 (top); must look to
i. (1) Private interest affected…
1. the greater the interest (like welfare) the more
you need a pretermination hearing
ii. (2) Risk of Erroneous Deprivation….
1. compare the costs and error rates of what the
claimants want vs. what the gov wants
iii. (3) Government’s interest… burdens that additional
procedural safeguards will create.
1. Gov does not want to waste $
a. Cost of additional procedures
b. Expense of providing benefits to
ineligible recipients pending decision
2. Gov is suppose to best serve the public interest
a. Best use resources
c. Mathematical formula. “A” is the additional procedural
safeguard to which the individual asserts that he is entitled:
procedural safeguard, A, will be required IF AND ONLY IF
(amount at stake for individual) x (likelihood that administrative
error will be reduced by using A) < cost to the government of
granting A
2. Ingraham v. Wright-Supreme Court says that a student has a tort remedy
if they get wrongfully paddled. Therefore, there is no reason for the
student to have a pre-paddling hearing to see if they deserve the
paddling.
a. White Dissent: Says this is like throwing someone in jail for
speeding before trial and allowing them to bring a claim for
wrongful imprisonment if it turns out that they didn’t deserve jail
time.

21
 3. Town of Castle Rock v. Gonzales: People are not entitled to police
protection… there is some discretion to the police officers… it is their
option to protect, not really an obligation
xiii. Right to a Neutral Decision Maker
1. Most judges cannot be touched by politics, but administrators are
susceptible
2. Tumey v. Ohio-A decision maker whose pay depends on the outcome of
a case violates DP
3. Ward v. Village of Monroeville-if money can benefit decision maker in
anyway then they are also disqualified (here the judge is the mayor of the
city and judgments went into the city’s coffers)
4. Gibson v. Berryhill-Parties with substantial pecuniary interest in legal
proceedings should not adjudicate disputes involving those interests.
a. AL gave Optometry Bd power to determine what was unethical;
Bd said big stores such as LensCrafters was unethical
b. Bd was composed of private optometrist likely in competition
with big stores
5. Cinderella Finishing Schools-where a disinterested observer may
conclude that a decision-maker has adjudged the facts and law of a
particular case before hearing it, that decision maker must be
disqualified. (this is essentially the test)
a. Chairman of FTC had inferred some bad things about C at a
conference; C asked that he be recused
b. Note that officials may talk about job-related topics, but can’t go
too far
6. Withrow (in notes): as long as Bd doesn’t glue themselves to a stance
then they are permitted
7. Cheney: Scalia refused to recuse himself and stated reasons why (this is
where he got those plane tickets and went hunting Dick Cheney)
d. Statutory Hearing Rights
i. Evidence and Hearing Process
1. Portland Audubon Society: The APA’s ex parte communications ban
applies to the President and White House staff.
a. Why here and not in rulemaking?
i. This is an adjudication, determined on the record, and
after the opportunity for an agency hearing (these are
questions to be asked regarding the Congressional
committee)
ii. President is an interested party in the decision, who may
have a strong influence and effect on the agency
decision
b. APA sec 557 prohibits ex parte communications during an
administrative adjudicatory proceeding between agency
officials and interested parties (President is an interested
party).
i. An “interested party” is one having a greater degree of
persona, financial, or professional interest than a
member of the general public
ii. Supervision and Oversight of Administrative Hearing Officers (ALJs)
1. Note ALJs not really a judge, just a specialized decision-making
bureaucrat

22
 2. Heckler: A program targeting allowance decisions made by
administrative law judges violates the rights of the judges to decisional
independence pursuant to the APA.
a. ALJs were influenced in their decision making by the Bellmon
Review Program that analyzed allowance rates
5. ADMINISTRATIVE ENFORCEMENT
a. Questions to be answered
i. How can the demand for individual privacy be reconciled with the govt’s need to
monitor regulated behavior and investigate apparent violations?
ii. To what extent may the govt conscript private citizens into the role of policing
their own or others’ behavior?
iii. Is it fair to prosecute or punish one wrongdoer while letting others go free?
iv. To whom do we entrust the awesome task of judging guilt or innocence?
b. Level of enforcement depends on: p.690 article
i. Resources
ii. whether the violation has a victim
c. Monitoring Investigations
i. Done through inspections, reporting requirements, or subpoenas
1. For each must have a source of legal authority and will likely be limits
(both defined by statues, Const, regulations, and agency’s policy)
ii. Physical Inspections
1. Problems: (1) impose burdens on people and (2) enforcers tend to have to
be very selective in choosing inspections
2. Marshall v. Barlow: an administrative search under the OSHA Act may
not be conducted without a warrant
a. Probable cause justifying the issuance of a warrant may be
based not only on specific evidence of an existing violation
but also on a showing that reasonable legislative or
administrative standards for conducting an inspection are
satisfied with respect to a particular place of business.
b. This is the starting point to administrative searches
c. Note Stevens dissent says that the probable cause of
administrative warrants serves no purpose
3. Warrants for administrative inspections MAY issue without
probable cause.
a. The Courts in Camara & Marshall stated that PC is NOT
required to obtain a warrant for an administrative inspection.
b. Rather, an agency may obtain a warrant merely by showing
that normal legislative or administrative standards for
conducting an inspection are met.
c. Q: How do you tell whether the standards for an administrative
inspection are “reasonable” (the rqmt for homes/ordinary
businesses) or “an adequate substitute for a warrant” (the rqmt
for pervasively regulated industries)
i. Factors:
1. objective standards
2. rationally related to the purposes for the
inspections
3. fairly detailed
4. reasonable overall

23
 d. Pervasively regulated businesses (no warrant required)
(liquor dealers, gun dealers, mining companies, auto dismantlers)
i. 3 rqmts for dispensing with the warrant rqmt for
inspecting pervasively regulated businesses:
1. There must be a substantial govt interest
underlying the regulatory scheme;
2. Warrantless searches must be necessary to
advance the govt interest;
3. The regulatory scheme must supply standards
regarding the occurrence and scope of
inspections that provide an adequate substitute
for the safeguards of the warrant procedure.
ii. People in these industries are so heavily regulated that
they have LOWER expectations of privacy than the
owners of ordinary businesses.
iii. Compulsory Production of Information and Record Keeping Requiements
1. Agencies make businesses, by subpoenas, produce evidence that they are
complying with regulations.
2. Rarely do courts refuse to enforce subpoenas as “unreasonable.”
3. Forces companies to make records.
4. That way they cannot avoid obeying the laws just by not keeping
records… requires them to keep records of actually keeping record of
when they are following the law.
5. Ruckelshaus v. Monsanto: equitable relief is not available to enjoin a
taking of private property for a public use, duly authorized by law, when
a suit for compensation can be brought against the sovereign subsequent
to the taking.
a. Ct agreed M had a property interest in their trade secrets of
pesticides
b. But to qualify as a taking it had to have reasonable
investment-backed expectations that the EPA would
maintain data in strictest confidence, giving M a
compensable interest (note court pulled the “ripe” issue of
not seeking compensation in a lower court first)
c. Note too that courts are reluctant to get involved in a property
right that is essentially granted by the government
d. Prosecution and Private Enforcement
i. Agencies (think of prosecutors too) have discretion on targets for enforcement
1. *Agency decisions not to prosecute are not reviewable
2. Problems
a. Subversion of legislative intent
b. Political favoritism
c. Selection of easy targets
ii. Moog Industries: it is not within the scope of the reviewing authority of a court
of appeals to postpone the operation of a valid cease and desist order of the FTC
against a single firm until similar orders have been entered against that firm’s
competitors
1. FTC is alone empowered to develop an enforcement policy best
calculated to achieve the ends contemplated by Cong and to allocate
its available funds and personnel in such a way as to execute its
policy efficiently and economically

24
 iii. Universal Rundle Corp.: The Commission’s evaluation of the evidence and its
refusal to grant a stay of its cease and desist order should be overturned only
where such refusal constitutes a patent abuse of discretion.
1. Even if U had succeeded in demonstrating that all of its competitors
were in illegal price discrimination identical to its own Commission
would not necessarily have to enforce against the others.
2. Commission may engage in selective enforcement, but cannot
institute proceedings that will arbitrarily destroy one of many law
violators in an industry
3. Agency only has to articulate some rational basis for its decision here
iv. Citizen’s suits to compel public enforcement (or agency fails to enforce own
agency standards)
1. typically come from beneficiaries of the regulatory program
2. Problem is that most statutes are discretionary
a. Some statutes do, however, provide nondiscretion
3. Citizens’ suits cannot be based on the substance of the regulation, rather
that only can be based on an agency’s mandatory duty
4. Scott v. City of Hammond: A citizen’s suit may be brought to compel
agency action only where the act or duty required by statute is
nondiscretionary.
a. The Clean Water Act’s requirement that eh EPA promulgate
TMDLs where, as here, states have failed to do so within the
prescribed time period is nondiscretionary and thus open to
challenge through a citizen’s suit
5. Bennett v. Spear (in notes): where statutes prescribe procedures, courts
will generally let people sue for failure to consider those things, but
courts won’t determine what the decision should be.
6. BUSINESS AND OCCUPATIONAL LICESSING
a. EXAM: In FCC licensing questions, watch for questions raising Ashbacker and Storer
issues. On Storer issues, watch for an argument by the applicant that the FCC’s rule
should not apply in the particular case. Note that comparative hearings are no longer
required on renewals.
b. Occupational Licensing
i. Due Process & the Problem of Self-Regulation
1. Due Process hearing rights govern whether an agency is required to
provide a hearing and, if so, what process is required at the hearing. Due
process hearing rights attach when the govt deprives or threatens to
deprive a person of life, liberty, or property.
ii. Licenses are property interests.
iii. Why do we license?
1. The licensing of professions is almost ALL about protecting the
professionals (in the name of protecting the public).
2. There are licenses for lots of stuff today. Historically, the laws have not
been challenged. R says they are beginning to be in state courts and
many are succeeding. (EX: people who sell caskets must be in the
funeral home business—“for health reasons”—this makes no sense—
strike down as lacking a rational basis—naked favoring of one profession
over another); later overturened
c. 3 levels of occupational licensing:
i. Registration—if you engage in an activity, tell us.

25
 ii. Certification—govt certifies that persons have certain skills, but does not
prevent others who don’t have that certification from practicing the profession.
iii. Licensing—to practice a profession, must have a license from the govt
iv. NOTE: There can be an overlap between the categories. EX: lawyer in TN must
be licensed and MAY be certified as a civil trial specialist.
d. Standards for licensing: HIGH. Standards of discipline for people in the
profession/”club”: LOW.
e. What is the main type of regulation of professionals? Advertising. There is a good
reason—consumers want good service at a low price and want to know where to get it.
VS. Professionals want you to make decisions based on NON-economic factors—R says
this is so you get gouged.
i. Friedman v. Rogers: unless a statutory classification trammels fundamental
personal rights or is based on suspect distinctions, the classification is presumed
to be constitutional if rationally related to a legitimate state interest
1. Another battle b/t private optometrist and the commercial giants like
LensCrafters
2. Licensing Bd reserved 4 seats for private optometrist of TOA and 2
for others; optometrist that wanted commercial outfit complained
could not get a fair hearing (different from Berryhill b/c there Bd
investigated and prosecuted the claim)
3. The TOA Act was endorsed by the TOA, so the Ct says the
legislature can require the Bd be drawn from the organization that
has given the legislation consistent support
f. Alternative Constraints on Occupational Self-Reg
i. Antitrust p.753
1. Seldom does this work with the learned profession exemption
2. Does it apply to the states?
a. No
b. Many times, however, it is not the state that is involved
c. State can farm that power out of private entities, such as the
County Bar Association
i. Then it becomes harder not to apply antitrust laws, but it
is hidden
3. Bates (in notes): AZ Supreme is the real party at interest; it is not being
laundered through some other state organization (the bar)
a. ABA folded; the court determined that it wasn’t the consumer
interest being looked after, but the interest of law professors
ii. First Amendment p.757
g. Business Licensing—Entry Regulation
i. Intro
1. Broadcast licensingspectrum of wavelengths is a limited resource
(FCC must regulate in the name of “public interest, convenience, and
necessity”)
2. If you want a station, convince FCC you deserve a station more than
someone else
a. FCC has substantive rules (ex: # of stations, decency) and
procedural rules (directs how the FCC is to decide among
competitors)
3. Statutory Hearing Rightsmust be a genuine hearing

26
 a. Ashbacker Radio Corp.: whenever conflicting applications are
made for a radio license, the FCC must hear all the applications
together
i. This was where FCC granted one application without a
hearing and basically the other applicant had to
overcome first applicant’s presumption of a license
ii. Cong granted a right to a hearing; where two
applications are mutually exclusive , the grant of one
w/o a hearing deprives the loser of the opportunity
that Cong chose to give
1. Basically unless the FCC found no substantial
and material questions of fact it could not deny
4. Restricting Scope of Hearing Rights
a. Storer: The FCC is not required to hold a hearing before
denying a license to operate a station in a manner contrary to
public interest.
i. Cong gave FCC broad powers b/c of growing
complexity of communications industry, so their
promulgation of a rule preventing vast ownership was
not in derogation of hearing requirement
ii. Courts have generally upheld the practice of allowing
agencies to use rule-making authority to make
substantive rules that effectively limit the issues decided
at a hearing.
iii. To get a hearing, you have to file an application that is in
proper form… if you have the maximum number of
stations already, then this means you must state why the
new rule/amendment should be changed to allow what
you want.
b. Texaco (in notes): ct says agency can decided by rulemaking that
they aren’t going to accept certain kinds of tariffs
c. American Airlines (in notes): allows more expansive rulemaking
that alters hearing rights
ii. Licensing Standards (agency can basically do what they want)
1. Setting the Standards
a. Reynold’s beginning statement for this section—It:
i. Illustrates the problem that agencies have
ii. Illustrates the importance of good lawyering
iii. Provides a realistic view of how agencies are constrained
by law—some but not as much as they contend.
b. License renewal has long been one of the most controversial
elements of broadcast licensing. Although the Act long provided
that licensees have no property rights in their licenses and that
licenses may be revoked or not be renewed whenever such action
would be in the public interest, licenses have become very
valuable.
2. Tendency to favor incumbent license holders. The idea: If you have a
reasonable expectation of keeping the station, you’ll put more into it.
3. Despite the lack of statutory support for the practice, the FCC has
basically treated licensees as having a presumptive renewal right
(The 1996 Act explicitly gives them the power to do this)

27
 4. This is although the statute assumes that the FCC was required to hold a
comparative hearing with the same procedures and standards for
renewals as for new licenses.
a. Cowles p.779: basically FCC Commissioners voted 4-3 to grant
Cow an application over Cent, who had the advantage on all the
comparative criteria. The FCC, however, gave Cow the
advantage on the best practicable service standard and said that
gave edge.
i. Central Broadcasting: Ct basically says that FCC
decision in Cowles was not right concluding that the
FCC had created a de facto presumption in favor of
renewal. They notice that this is a sham.
iii. Clarity, Consistency, and License Administration
1. Jawboning urging people to do something without actually requiring
them to (EX: speeches before broadcasters’ organizations, personal
lobbying of the 3 major networks and a private entity that sets
“voluntary” guidelines)
a. One view: It’s very real
i. If the head of the FCC starts talking…they don’t have to
revoke a license…affiliates start talking to networks
(about how the FCC is complaining)…filters up the
chaim
b. This is good b/c
i. nobody is forced to do anything…you can ignore the
jawboning if you want and nothing will probably
happen.
ii. Way for system to be politically responsive…quicker
than rule change
iii. Cheaper for govt…don’t have to go through
enforcement/revocation proceedings
c. This is bad b/c
i. Agencies are able to do stuff by “administrative feel”
(like in Cowles)
ii. Don’t have to take a vote—nothing in public—
negotiating public policy while not complying with the
procedural safeguards designed to protect the public they
serve
iii. Unconstrained power—lots of discretion
iv. ABSENCE of a formal process.
d. Writers Guild of America v. ABC (ruling for “jawboning…the
line is very vague): No 1st Amd deprivation by the jawboning
(freedom of speech) but by official position (put pressure on
others)
i. EX: If the agency actually takes action AFTER
jawboning—you can say they prejudged the issue—
CAN throw it out!
iv. License Awards by Lottery and Auction: Is the Price Right?
1. Lotteries

28
 a. Advantage: useful when there are large numbers of applicants
and the public interest would be served by getting the service
started quickly.
b. Problem: they weight them—and if you do too much of that,
they aren’t lotteries anymore
2. Auctions
a. The great appeal is in the heat of bidding people will pay more
for something than it is worth.
b. Problem: They pay too much and they have trouble running
their business profitably. So, it is NOT necessarily in the FCC’s
or the public’s interest for them to way overbid.
h. Business Licensing-Rate Regulation
i. Here cases really have nothing to do with the issues of business licensing. They
turn more on statutory interpretation.
ii. Why regulate? To prevent monopolies (maybe)
1. Real reason is to prevent needless duplication of services to promote
efficiency
iii. Regulation
1. Regulators decide what is a fair rate of return; the regulated industries
then set their rates to determine their rates so they can meet that rate of
return
a. The rate of return can be inflated by the regulated industry (e.g.
jets, $200 phones, leather couches, CEO’s salaries, etc..)
b. Regulated industries should not be able to use their rates to meet
their rate of returns to subsidize other business (e.g. Bell South
engaging in the pizza delivery business)
2. Regulated industries must submit tariffs to the agency. The tariff is
the price they will charge and disallows the regulated industry to engage
in activities adverse to the tariff.
a. MCI v. AT&T: Case basically was one about interpretation of
the word “modify.” The Ct found that FCC, by detariffing the
phone industry (to spur competition), went beyond the powers it
had been granted to modify.
iv. AT&T v. Iowa Utilities Bd: An agency may regulate a field previously occupied
by state and local regulators. Local competition provisions were inserted into the
Communications Act and are thus subject to FCC’s rulemaking
v. De-Regulation:
1. This is suppose to help the disadvantage obtain services BUT . . .
a. Happens politically when someone has something to gain from
it.
b. De-regulation creates phony competition… “Confuseopolies.”
2. National Cable TV: A court’s prior judicial construction of a statute
trumps an agency construction otherwise entitled to Chevron deference
ONLY IF the prior court held that its construction flows from
unambiguous terms of the statute and leaves no room for agency
discretion.
a. Case dealt with interpretation of “telecommunications service”
b. ***Note Scalia’s dissent p. 825 that Court by this decision
created a doctrine where a judicial decision of the “best” rather
than “only” interpretation is subject to reversal by an agency.
vi. Problems with Regulated Industries:

29
 1. Sometimes technological advances will make a natural monopoly
obsolete.
a. Technology will make it so that the market can be competitive.
2. Hard to “half-regulate” industries.
a. Either de-regulate a lot, or not at all… something in between
does no good.
vii. Other
1. % return on investment…ideally set up to make % profit (no
more/no less)
a.
2. (company should do what set up to do (service)…not get into something
else to make $ (Bell South pizza delivery)
3. factor in technology change…risk investment…etc. when regulating
7. FREEDOM OF INFORMATION ACT
a. Background on p.830-33
b. “Agency Records” under FOIA
i. sec 552(a)(4)(B) says that federal district courts have jurisdiction “to order the
production of any agency records improperly withheld.”
1. Thus threshold question is “what is an ‘agency record’”
2. Kissinger: FOI does not compel an agency to retrieve records no
longer in its possession.
a. Statute says “improperly withheld;” that means possession
b. Records of Nat’l Security Advisor are not “agency records”
because part of white house staff
i. “Agency” generally refers to cabinet depts. and their
subordinate agencies (So State Dept. is subject to the
law)
c. Dissent-this decision encourages agency officials to remove
unflattering documents from agency possession
c. Exemptions from FOIA’s Disclosure Requirement
i. 552(b) lists nine exemptions
1. Cts have no power to find additional justifications for nondisclosure
2. Exemptions narrowly drawn (so must be narrowly construed)
3. Agencies must disclose “reasonably segregable portions of record”
a. So entire documents not exempt only matters
ii. NLRB v. Sears: NLRB App and Advise Memos upholding a decision not to file a
complaint are subject to disclosure, but those reversing such a decision are not
1. Intra-agency documents containing thought process of agency gen
counsel is exempted from FOI (like atty work product doctrine)
2. Memos that relate to a decision not to file a complaint basically reflect
the ending of a case and for that reason are much like final orders,
which are not exempt
3. This was where S tried to get these documents from NLRB to decide
their course of action in certain matters
d. Law Enforcement
i. Exemptions 7’s 2-step (1) document must be prepared for law enforcement
purposes (2) for exemption must be shown would interfere with law
enforcement, admin of justice, or constitute an invasion of privace
ii. FBI v. Abramson: Info originally compiled for law enforcement purposes does
not lose its Exemption 7 protection from disclosure if summarized in a new
document not created for law enforcement purposes.

30
 1. FOIA is silent on the issue, but amendment to this exemption
enlarged scope to records from “former files”
a. Somewhere (maybe in leg history) Cong also indicated that harm
of disclosing outweighed public benefits
b. Note the info was placed in a document not covered by the
exemption, but the info was taken from sources that were
2. This is where the journalist sought a compilation of records of
individuals who had criticized the Nixon Admin
3. Dissent: Cong explicitly mandated that FOIA exemptions are to be
narrowly construed. Ct has not done that here
e. Privacy
i. DOJ v. Reporters: Disclosure of he contents of law-enforcement records (i.e. rap
sheets) to a 3rd party constitutes an unwarranted invasion of personal privacy
1. Exemp 7(c) requires balancing of privacy interests with maintaining
“practical obscurity” of rap sheets against public interest for release
2. DOJ has 2 exceptions (1) subject of rap sheet may obtain a copy (2) rap
sheet may be used in prep for a press release to assist in arrests
3. Info on rap sheets may be available through diligent searches but not in
this DOJ’s type of summaries
4. When a 3rd party seeks no “official info” about a government agency,
but merely seeks records that the gov happens to be storing, the
invasion of privacy is unwarranted
5. Concurrence: agrees with judgment, but disagrees that Exemp 7(c)
requires balancing
6. Note-FOIA is so citizens can see what the gov is up to not to get info
about private individuals the gov might be tracking.

31