Admin Cases For Final

Commodity Futures Trading Commission v.
Schor
United States Supreme Court

478 U.S. 833 (1986)
Rule of Law
Congress may authorize agencies to adjudicate claims that otherwise fall within the
jurisdiction of Article III courts.
Facts
The Commodity Futures Trading Commission (CFTC) (defendant) regulates the trading of
commodity futures. Disgruntled customers may seek reparations from the CFTC for a broker’s
violations of the Commodity Exchange Act (CEA) or CFTC regulations. The CTFA promulgated
a regulation that allowed it to adjudicate any counterclaims that the broker might assert against a
consumer if such counterclaims arose out of the same transaction or series of transactions set forth
in the customer’s complaint. Such counterclaims were not mandatory; brokers could pursue their
action against the customer in state court as a contract action. Mr. Schor (plaintiff), a customer,
filed a complaint against a broker, Conti Commodity Services, Inc. (Conti), for numerous
violations of the CEA. In addition to defending itself from Schor’s claims, Conti filed a
counterclaim against Schor in the CFTC reparations proceeding. The CFTC ruled in favor of Conti,
and Schor sought judicial review. The court of appeals dismissed Conti’s counterclaim on the
ground that the CFTC’s authority to adjudicate Conti’s common law claims violated Article III of
the Constitution. The United States Supreme Court granted certiorari.
Issue
Does an agency necessarily violate Article III when it adjudicates state or federal claims willingly
submitted by the parties for initial agency adjudication?
Holding and Reasoning (O’Connor, J.)

No. Article III of the United States Constitution does not provide individuals with an absolute right
to the plenary consideration of every type of claim by an Article III court. The constitutional
guarantee of an impartial and independent federal adjudication is subject to waiver. Congress may
authorize agencies to adjudicate claims that otherwise fall within the jurisdiction of Article III
courts. When reviewing an Article III challenge, courts consider a number of factors, such as: the
extent to which the essential attributes of judicial power are reserved to Article III courts; the extent
to which the non-Article III forum exercises the range of jurisdiction and powers normally vested
only in Article III courts; the origins and importance of the right to be adjudicated; and the concerns
that drove Congress to depart from Article III’s requirements. Here, Schor clearly waived any right
he might have had to a full trial on Conti’s counterclaim before an Article III court by demanding
that Conti proceed on its counterclaim in the CFTC proceeding. In addition to this express waiver,
Schor’s choice to seek relief in an CFTC proceeding—not a state or federal court—effectively
waived his right to proceed before an Article III court. Schor’s Article III challenge also fails
because the CFTC’s adjudicatory powers do not impermissibly intrude on the province of the
judiciary and the CFTC’s limited jurisdiction over a narrow class of common law claims—such
as the counterclaim at issue here—does not create a substantial threat to the separation of powers,
especially because the decision to invoke the CFTC forum is left up to the parties. Accordingly,
the CFTC’s authority to adjudicate Conti’s counterclaim does not run afoul of Article III.
Goldberg v. Kelly

397 U.S. 254 (1970)
Rule of Law
When a state seeks to terminate welfare benefits, procedural due process requires the state
to provide the recipient with a pre-termination evidentiary hearing for the purpose of
determining the validity of discontinuing public assistance in order to protect the recipient
against an erroneous termination of his benefits.
Facts
Kelly (plaintiff) represented a group of residents of New York City receiving financial aid under
the federally assisted program of Aid to Families with Dependent Children (AFDC) or under New
York State’s general Home Relief program. Kelly brought suit against Goldberg and other New
York City and New York State officials (defendants) tasked with administering these programs.
The suit was brought in district court on the grounds that the state terminated such aid without
prior notice and hearing, thereby denying Kelly’s right of due process. The district court held that
a pre-termination evidentiary hearing was constitutionally required and granted Kelly’s relief. The
state appealed to the United States Supreme Court.
Issue
Whether a state that terminates public assistance payments to a particular recipient without
affording him the opportunity for an evidentiary hearing prior to termination denies the recipient
procedural due process in violation of the Due Process Clause of the Fourteenth Amendment.
Holding and Reasoning (Brennan, J.)

Yes. The state officials do not deny that procedural due process applied to the termination of
welfare benefits, as the termination of such benefits involve state action that adjudicates important
rights. Rather, the parties in the case disagree over the type of process that is constitutionally
required in a decision to terminate welfare benefits. Consideration of what procedures due process
requires under any given set of circumstances begins with a determination of the precise nature of
the government function involved as well as the private interest that has been affected by
governmental action. Welfare provides the means to obtain essential food, clothing, housing, and
medical care for recipients. Termination of aid, during the pendency of the resolution over
eligibility, might deprive an eligible recipient of the very means by which to live while he waits.
Only a pre-termination evidentiary hearing would provide a welfare recipient with procedural due
process because of the significant individual interests at stake. Additionally, important
governmental interests are promoted by affording recipients a pre-termination hearing. Hearings
promote the dignity and well-being of welfare recipients facing termination of life-sustaining
benefits. Thus, public assistance is not merely charity but a means to promote the general welfare
and secure the blessings of liberty for all people.. A state’s provision of proper hearings before
terminating such benefits is important for promoting the general welfare. The state wrongly argues
that the government’s interests in conserving fiscal and administrative resources outweigh the
recipient’s welfare interest. States can minimize costs by developing procedures for prompt pre-
termination hearings and by skillful use of personnel and facilities. Ultimately, the interest of an
eligible recipient in uninterrupted receipt of his public assistance, coupled with the state’s interest
that his payments not be erroneously terminated, clearly outweigh any of the state’s competing
concerns to prevent increases in its fiscal and administrative burdens. Thus, the stakes are
extremely high and deserve a pre-termination hearing of welfare benefits. This holding is qualified,
however, by noting that the pre-termination hearing is not required to take the form of a judicial
or quasi-judicial trial. Rather, a fair hearing for purposes of procedural due process can be
administrative in nature and should be conducted for the purpose of producing an initial
determination of the validity of the welfare department’s grounds for discontinuance of payments
in order to protect the recipient against an erroneous termination of his benefits. The state violates
their procedural due process rights because the state denied this opportunity to Kelly and other
New York City welfare recipients. The decision of the district court is affirmed.
Mathews v. Eldridge

424 U.S. 319 (1976)
Rule of Law
Whether an administrative procedure meets the constitutional guarantees of the Due Process
Clause requires a consideration of three factors: (1) the private interest at stake in the
administrative action; (2) the risk of an erroneous deprivation of this interest through the
procedures used, and the probable value, if any, of additional or substitute procedural
safeguards; and (3) the government’s interest, including the function involved and the fiscal
and administrative burdens that additional or substitute procedural requirements would
entail.
Facts
Mr. Eldridge (plaintiff) began receiving Social Security benefits in June 1968. In March 1972, the
state agency in charge of monitoring Eldridge’s medical condition sent him a questionnaire. Based
on Eldridge’s answers to the questionnaire and reports from Eldridge’s doctor and a psychiatric
consultant, the state agency informed Eldridge that he was no longer eligible for benefits. Eldridge
disputed this decision in writing, but the state agency terminated his benefits. The Social Security
Administration (SSA) accepted this determination and advised Eldridge that his benefits would
terminate after that month. The notification informed Eldridge that he had the right to seek
reconsideration by the state agency within six months. Eldridge did not request reconsideration,
but filed a lawsuit challenging the constitutionality of the administrative procedures used to
determine whether a Social Security recipient has a continuing disability. The district court and
court of appeals held that Eldridge had to be afforded an evidentiary hearing under the Due Process
Clause of the Fifth Amendment. Mathews, the Secretary of HEW, appealed.
Issue
Does the Due Process Clause of the Fifth Amendment require that the recipient of Social Security
disability benefit payments be afforded an opportunity for an evidentiary hearing prior to the
termination of his benefits?
Holding and Reasoning (Powell, J.)

No. Whether an administrative procedure meets the constitutional guarantees of the Due Process
Clause requires a consideration of three factors: (1) the private interest at stake in the
administrative action; (2) the risk of an erroneous deprivation of this interest through the
procedures used, and the probable value, if any, of additional or substitute procedural safeguards;
and (3) the government’s interest, including the function involved and the fiscal and administrative
burdens that additional or substitute procedural requirements would entail. Here, Eldridge’s private
interest is the uninterrupted receipt of his benefits pending the final administrative decision on his
claim. The procedure used to determine eligibility for his disability benefits—a medical
assessment of his physical or mental condition—is straightforward, easily documented, and
premised on a narrow amount of information. Additional or substitute procedural requirements
would have little value. On the other hand, the administrative and societal costs of affording an
evidentiary hearing prior to the termination of disability benefits would be high. For example,
affording such hearings would have a direct financial impact by increasing the number of hearings
and providing benefits to ineligible recipients pending decision would be expensive. Given the
consideration of these factors, the court concludes that an evidentiary hearing is not required prior
to the termination of Eldridge’s disability benefits. The decision of the lower courts is reversed.
Board of Regents v. Roth

408 U.S. 564 (1972)
Rule of Law
Procedural due process under the Fourteenth Amendments only protects “liberty” interests
in an individual’s reemployment by the state when the state’s actions have foreclosed the
opportunity for an individual to seek employment elsewhere, and protects “property”
interests in reemployment when an individual has a legitimate claim of entitlement to
reemployment by the state.
Facts
David Roth (plaintiff) was hired for his first teaching job as an assistant professor of political
science at Wisconsin State University-Oshkosh. He was hired for a fixed term of one academic
year. At the conclusion of this year, Roth was not hired for an additional term. Under Wisconsin
law, a state university employee could acquire tenure rights to employment after four years of
consecutive year-to-year employment. However, without tenure, relatively new teachers had no
right to employment beyond their initial one-year appointment. After the President of the
University informed Roth that he would not be rehired, he brought suit against the Board of
Regents of Wisconsin State University-Oshkosh (defendant) in district court on the grounds that
the decision not to rehire him for the next year infringed his Fourteenth Amendment rights. The
district court granted summary judgment for the Board of Regents on the procedural due process
issue, and the United States Supreme Court granted certiorari.
Issue
Whether procedural due process under the Fourteenth Amendment established protected liberty
and property interests for an individual denied reemployment.
Holding and Reasoning (Stewart, J.)

No. The Fourteenth Amendment’s guarantee of procedural due process applies to the deprivation
of individual liberty and property interests by the state. This guarantee is necessary because
distinctions between “rights” and “privileges” that once governed the applicability of procedural
due process rights were fully abolished in National Mutual Insurance Company v. Tidewater
Transfer Company, 337 U.S. 582 (1949). Additionally, due process protects property beyond the
actual ownership of real estate, and protects against deprivations of liberty beyond the sort of
formal constraints imposed by the criminal process. Roth claims he was deprived of a “liberty”
interest. The range of liberty interests protected by the Fourteenth Amendment include the right of
the individual to contract, to engage in any of the common occupations of life, to acquire useful
knowledge, to marry and raise children, and to freely practice religion. The constitutional meaning
of “liberty” is very broad. While under this broad view there might be some instances in which a
state’s refusal to re-employ a person might implicate that person’s liberty interests, this case is not
one of these instances. The state, in declining to re-hire Roth, does not make any charge against
him that might seriously damage his standing and associations in his community. Additionally, the
state does not impose on Roth a stigma or other disability that forecloses his freedom to take
advantage of other employment opportunities. It would impermissibly stretch the concept of
Fourteenth Amendment protections to suggest that a person is deprived of “liberty” when he
simply is not rehired in one job but remains free to seek another. Additionally, Roth claims that he
is deprived of a “property” interest. The Fourteenth Amendment’s procedural protection of
property is a safeguard of the security of interests that a person has already acquired in specific
benefits. These interests can take many forms. Thus, to have a property interest in a benefit, a
person must clearly have more than a unilateral expectation, but instead have a legitimate claim of
entitlement to it. Roth’s “property” interest in his employment at Wisconsin State University-
Oshkosh was created and defined by the terms of his appointment. Those terms specifically
provided that his employment would terminate at the end of one year, and make no provision for
renewal whatsoever. Based on the terms of his contract, Roth has absolutely no “property” interest
in or claim of entitlement to reemployment for an additional year. Roth’s interest is merely abstract
and not protected by procedural due process under the Fourteenth Amendment. The decision of
the district court is reversed.
Perry v. Sindermann

408 U.S. 593 (1972)
Rule of Law
A state college teacher is entitled to procedural due process prior to termination if the teacher
has a property interest in continued employment.
Facts
Robert Sindermann (plaintiff) was a teacher in the state college system in Texas for 10 years. For
the last four years of that time, Sindermann worked for Odessa Junior College (Odessa) as a
professor of government and social science. Sinderman was employed under a series of one-year
contracts and was appointed the co-chairman of the department. Odessa’s official faculty guide
stated that Odessa did not have a tenure system, but Odessa wanted all the faculty to feel that they
had a permanent tenure. During the 1968–1969 school year, Sindermann was elected president of
the Texas Junior College Teachers Association. Sindermann then aligned himself with a group that
advocated converting Odessa to a four-year university. Odessa’s Board (board) opposed
converting to a four-year university. At the end of the school year, Sindermann’s contract was
terminated and not renewed. The board did not provide an official statement of the reasons for the
nonrenewal. The board did issue a press release, alleging that Sindermann was insubordinate.
Odessa did not give Sindermann a chance to contest the nonrenewal. Sindermann then sued the
president of Odessa and members of the board (defendants), alleging a violation of the First
Amendment right to free speech and the Fourteenth Amendment guarantee of procedural due
process. The district court granted summary judgment in favor of the defendants. Sindermann
appealed, and the court of appeals reversed. The United States Supreme Court granted the
defendants’ petition for certiorari.
Issue
Is a state college teacher entitled to procedural due process prior to termination if the teacher has
a property interest in continued employment?

Yes. A state college teacher is entitled to procedural due process prior to termination if the teacher
has a property interest in continued employment. The Fourteenth Amendment requires
governmental employers to provide procedural due process to employees being terminated, if those
employees have a property interest in continued employment. Generally, employees who have a
contractual or legal right to continued employment, including those based on a formal tenure
system, have a property interest in continued employment. However, the requirement for a
property interest is not rigid or bound by technical forms. If there are rules or mutually explicit
understandings that support an entitlement to continued employment, then an employee has a
constitutionally protected property interest. Here, Sindermann has alleged sufficient facts to
establish a property interest in continued employment. Sindermann had been teaching for 10 years,
and Odessa’s policy granted de facto tenure status to all faculty. A unilateral expectancy of
continued employment is not sufficient to establish a property interest. However, contracts may be
written or implied. Sindermann has alleged facts that establish a property interest in continued
employment absent sufficient cause. Therefore, Sindermann is entitled to proceed with the lawsuit
and attempt to prove he had a property interest in continued employment. If the proof establishes
that Sindermann had a property interest, then Odessa would be obligated to provide a hearing to
contest the nonrenewal of his contract. Additionally, Sindermann is entitled to attempt to prove
that the nonrenewal violated his First Amendment right to free speech. A governmental entity may
not deny a benefit to an individual just because the individual exercises constitutional rights.
Therefore, even if Sindermann does not have tenure or a contractual right to continued
employment, Odessa cannot terminate his employment due to the exercise of his First Amendment
free-speech rights. Accordingly, the judgment of the court of appeals is affirmed.
Cleveland Board of Education v. Loudermill

470 U.S. 532 (1985)
Rule of Law
The Due Process Clause of the Fourteenth Amendment prohibits states from depriving
individuals of property without due process.
Facts
Loudermill (plaintiff) was employed by the Cleveland Board of Education (the Board) (defendant)
as a classified civil servant, who under Ohio law could only be terminated for cause, with a right
to administrative review if terminated. On his employment application Loudermill stated that he
had never been convicted of a felony. When the Board later discovered that Loudermill had been
convicted of a felony, he was terminated for dishonesty in his application without an opportunity
to respond to the charges of dishonesty or to challenge his termination. Loudermill brought suit,
alleging that the Board had deprived him of property without due process. The district court found
that Loudermill had a property interest in continued employment, and that the termination
procedures set out by Ohio law had been followed in Loudermill’s case.
Issue
May a state statute that creates a constitutionally protected property interest also limit the
procedures for enforcing that right?
Holding and Reasoning (White, J.)

No. Once a law confers a substantive right, a person may not be deprived of that substantive right
without constitutionally adequate procedures. The Due Process Clause of the Fourteenth
Amendment prohibits states from depriving individuals of property without due process. The
Constitution does not create or define property interests. Property interests are created and defined
by other sources, such as state law. Here, Ohio law creates a property interest in continued
employment because it permits termination of classified civil service employees only for cause.
The Board argues that the substantive right created under Ohio law is conditioned on the
procedures set out in that law for enforcing that right. It is undisputed that the procedures
prescribed in that law for terminating classified civil service employees were followed in
Loudermill’s case. The Board’s argument is based on a portion of the plurality opinion in Arnett
v. Kennedy, 416 U.S. 134 (1974), which held that when a law conferring a substantive right also
describes the procedures for enforcing that right, the two cannot be separated. However the
remaining six justices in Arnett specifically rejected that view. To the contrary, although a
legislature may confer a substantive right, once conferred the Due Process Clause of the Fourteenth
Amendment prohibits deprivation of that substantive right without constitutionally adequate
procedures. The lower court’s judgment is affirmed.
United States v. Florida East Coast Railway Co.

410 U.S. 224 (1973)
Rule of Law
When a statute requires that rules be made on the record after opportunity for an agency
hearing, the APA requires the agency to follow the procedures set forth in §§ 556-57.
Facts
The Interstate Commerce Commission (ICC) (defendant), which no longer exists, once regulated
various aspects of railroad transportation. The Interstate Commerce Act (Act) authorizes the ICC
to engage in rulemaking only “after hearing.” The statute does not require that such rulemaking be
on the record. After proposing a tentative order establishing rates for incentive payments, the ICC
determined that it would only receive comments in written form. The ICC adopted the order, which
two railroad companies (plaintiffs) challenged. The plaintiffs based their challenge on two
grounds: first, that the proceedings leading up to the order did not comply with §§ 556-57 of the
Administrative Procedure Act (APA); and second, that they were prejudiced by the ICC’s
determination to receive comments only in written form. The district court found that the APA
required that the ICC meet the formal rulemaking requirements of §§ 556-57 prior to issuing any
rules. The agency sought review of the decision by the United States Supreme Court.
Issue
Does the APA require the formal rulemaking procedures of §§ 556-57 prior to the promulgation
of a rule where the statute authorizing the establishment of the rule states that rulemaking may
only occur “after hearing,” but does not contain a requirement that the rule be made on the record?
Holding and Reasoning (Rehnquist, J.)

No. Sections 553, 556, and 557 of the APA govern agency rulemaking. The requirements set forth
in §§ 556 and 557 are stricter than those set forth in § 553. When a statute requires that rules be
made on the record after opportunity for an agency hearing, the APA requires the agency to follow
the procedures set forth in §§ 556-57. When a statute requires a hearing prior to rulemaking, but
does not also require that the rule be made on the record, § 553’s procedures apply. Here, the Act
requires that rulemaking occur after a hearing, but does not require that the rule be made on the
record. Therefore, only the rulemaking requirements of § 553 apply. Additionally, although the
Act does not expressly define the term “hearing”, it is clear that the statute’s “after hearing”
language does give interested parties the right to present evidence orally, cross examine witnesses,
or present oral argument to the agency decisionmaker. As such, the plaintiffs received the type of
hearing that the Act requires even though they were only allowed to present their comments in
written form.
Heckler v. Campbell

461 U.S. 458 (1983)
Rule of Law
The Secretary of Health and Human Services may rely on published medical-vocational
guidelines to determine a claimant’s right to Social Security disability benefits.
Facts
Carmen Campbell applied for disability benefits because a bad back and hypertension prevented
her from doing her job as a hotel maid. Campbell was 52 years old, had limited education, and had
difficulty speaking and writing English. Campbell could read and understand English well.
Campbell’s application for disability benefits was denied, and she requested a hearing, as permitted
by regulations, before an administrative law judge (ALJ) of the Department of Health and Human
Services (HHS). The ALJ determined that her back injury was not severe enough to render her
disabled, and then considered whether she had the ability to perform less strenuous jobs. The ALJ
concluded that Campbell retained the ability to do light physical work. Relying on medical-
vocational guidelines issued by HHS, the ALJ determined that a significant number of jobs existed
that a person of Campbell’s age and ability could perform. Accordingly the ALJ concluded that
Campbell was not disabled. Campbell appealed and the decision was affirmed by the Social
Security Appeals Council and the United States District Court for the Eastern District of New
York. The Court of Appeals for the Second Circuit reversed. It held that the medical-vocational
guidelines did not provide the specific evidence of alternative occupations that would be available
to Campbell. It also held that because of the reliance on the guidelines, Campbell was deprived of
the opportunity to provide evidence that she cannot perform the types of jobs noticed by the
guidelines. HHS appealed. The Supreme Court granted certiorari to resolve a conflict among the
circuits.
Issue
May the Secretary of Health and Human Services rely on published medical-vocational guidelines
to determine a claimant’s right to Social Security disability benefits?
Holding and Reasoning (Powell, J.)

Yes. The language of the Social Security Act and its legislative history demonstrates that Congress
intended to permit HHS to issue regulations determining whether certain occupations existed in
the national economy. Although the Act provides for individualized hearings based on evidence
adduced at the hearing, it does not bar HHS from utilizing rulemaking. This Court has held that
even where a statute expressly requires a hearing, the agency may rely on rulemaking authority to
determine issues that do not require case-by-case determination. FPC v. Texaco, Inc., 351 U.S.
192, 205 (1956); United States v. Storer Broadcasting Co., 351 U.S. 192, 205 (1956). If it were
not the case, the agency would have to waste time and resources relitigating issues that could be
resolved in a single rulemaking proceeding. The determination of whether certain jobs exist in the
national economy is an appropriate issue for rulemaking. It is not an issue that is unique to each
claimant. The ALJ made an individual determination as to Campbell’s individual abilities. It was
then appropriate for the ALJ to rely on the guidelines to determine that there were jobs in the
national economy that claimant, with her abilities, could perform. The judgment of the court of
appeals is reversed.
Citizens to Preserve Overton Park, Inc. v. Volpe

401 U.S. 402 (1971)
Rule of Law
When reviewing an agency decision, the Administrative Procedure Act (APA) requires
courts to consider: (1) whether the agency acted within the scope of its authority; (2) whether
the agency’s actions were arbitrary, capricious, an abuse of discretion, or otherwise not in
accordance with the law; and (3) whether the agency’s action met the necessary procedural
requirements.
Facts
The Secretary of Transportation (defendant) authorized the expenditure of federal funds for the
construction of a six-lane interstate highway through a public park in Memphis, Tennessee. Private
citizens and conservation organizations (plaintiffs) sought to halt construction, arguing that the
Secretary violated portions of the Department of Transportation Act of 1966 and the Federal-Aid
Highway Act of 1968 that prohibit the use of federal funds to finance the construction of highways
through public parks if a “feasible and prudent” alternative route exists. Under these statutes, where
no such alternative route is available, the Secretary may only approve construction through parks
if the plans are designed to minimize harm to the park. The Secretary did not include his factual
findings in the announcements regarding approval of the highway’s route and design. The
Secretary also did not indicate why no feasible and prudent alternative routes existed or why design
changes could not be made to minimize harm to the park. The Secretary moved for summary
judgment, which the District Court granted. The Court of Appeals for the Sixth Circuit affirmed,
and the plaintiffs sought review in the United States Supreme Court.
Issue
Does the absence of formal findings by an agency require remand where neither the APA nor the
authorizing statutes require such formal findings and where an administrative record exists?
Holding and Reasoning (Marshall, J.)

No. When reviewing an agency decision, the Administrative Procedure Act (APA) requires courts
to consider: (1) whether the agency acted within the scope of its authority; (2) whether the agency’s
actions were arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the
law; and (3) whether the agency’s action met the necessary procedural requirements. To determine
whether the agency action was arbitrary, capricious, an abuse of discretion, or otherwise not in
accordance with law, the court must analyze whether the agency’s decision was based on a
consideration of all the relevant factors and whether there has been a clear error of judgment. Here,
the Secretary acted within the scope of his authority, but his failure to make formal findings and
state his reason for allowing the highway to be built through the park hampers the court’s analysis
of whether his decision was arbitrary and capricious. The absence of such findings does not
mandate remand because neither of the statutes authorizing the Secretary’s exercise of authority
requires such formal findings. Additionally, the APA’s requirements regarding formal findings in
certain rulemaking and adjudicatory proceedings do not apply here. The administrative record in
this case will allow prompt review of the Secretary’s actions. Because the administrative record is
not before this Court and because the lower courts based their review on litigation affidavits, not
the whole administrative record, this case must be remanded to the District Court for plenary
review of the Secretary’s decision and for additional explanations of the Secretary’s decision if
necessary.
Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc.

467 U.S 837 (1984)
Rule of Law
When reviewing an agency’s construction of a statute that it administers, courts consider

two questions: (1) whether Congress has directly spoken to the precise question at issue; and
(2) if not, whether the agency’s answer is based on a permissible construction of the statute.
Facts
The 1977 Amendments to the Clean Air Act (CAA) required polluters in certain areas to obtain a
permit from a state regulator before building any new or modified stationary sources of air
pollution. The state regulator could only grant the permit if the polluter met specific requirements
regarding the abatement of new pollution. The Environmental Protection Agency (EPA)
promulgated a rule interpreting the term “stationary source” to include what the agency called a
“bubble policy.” Under this policy, an existing plant containing several pollution-emitting devices
could install or modify one piece of equipment without a permit if the alteration did not increase
the total emissions from the plant. The Natural Resource Defense Council (NRDC) (plaintiff)
challenged the EPA’s interpretation of the word “source.” Specifically, the NRDC argued that the
word referred to each individual pollution-emitting piece of equipment, which meant that a plant
would need to obtain a permit any time it created a new source of pollution or modified an existing
source if the effect were to increase the pollution from the source. Finding that this interpretation
best served the goals of the CAA, the court of appeals agreed with the NRDC. In reaching this
decision, the court recognized that Congress had not expressed an intent regarding the applicability
of the bubble concept to the permit program. The United States Supreme Court granted certiorari
to review the lower appellate court’s decision.
Issue
When a court reviews an agency’s construction of a statute that it administers, may the court
impose its own construction on the statute if the statute itself is silent or ambiguous regarding the
specific question at issue?
Holding and Reasoning (Stevens, J.)

No. When a court reviews an agency’s construction of a statute, it faces two questions. First, the
court must consider whether Congress directly addressed the precise question at issue. Second, if
the court finds that the statute is silent or ambiguous regarding the specific issue, it must consider
whether the agency’s answer was based on a permissible construction of the statute. Here,
Congress did not express an intent regarding the applicability of the bubble concept to the permit
program. Given the many competing interests at stake, the EPA’s use of the bubble concept was a
reasonable policy choice for the agency to make.
United States v. Mead Corporation

533 U.S. 218 (2001)
Rule of Law
A tariff classification ruling by the United States Customs Service is not entitled
to Chevron deference, but may be given respect according to its persuasiveness
under Skidmore.
Facts
Congress passed legislation providing that the United States Customs Service shall fix the final
classification and rate of duty applicable to imported merchandise pursuant to rules and regulations
prescribed by the Secretary of the Treasury. Under these regulations, the Headquarters Office or
any port-of-entry customs offices may issue a “ruling letter” to indicate the amount of money that
an importer owes for the importation of specific goods into the United States. A ruling letter is
binding on all Customs Service personnel until modified or revoked, and it may be modified or
revoked without notice to any person, except the importer to whom it was addressed. No person
other than the recipient of the ruling letter may rely on the letter or assume that the principles of
the ruling will be applied to another transaction. The Headquarters Office issued a ruling letter
classifying “dayplanners” imported by the Mead Corporation (Mead) (plaintiff) as “diaries” for
the purposes of assessing a tariff. Mead filed suit against the United States (defendant), challenging
the letter in the Court of International Trade (CIT). The CIT affirmed the ruling. The court of
appeals then reversed CIT’s decision. In reaching its decision, the appellate court declined to apply
the type of judicial deference called for by Chevron U.S.A. v. Natural Resources Defense Council,
Inc., 467 U.S. 837 (1984), because the ruling letter was not issued in accordance with notice and
comment rulemaking requirements. The United States Supreme Court granted certiorari to
consider the limits of Chevron deference owed to administrative practice in applying a statute.
Issue
Does a tariff classification ruling by the United States Customs Service
deserve Chevron deference?
Holding and Reasoning (Souter, J.)

No. The administrative implementation of a particular statutory provision qualifies
for Chevron deference when it appears that Congress delegated authority to the agency generally
to make rules carrying the force of law, and that the agency interpretation claiming deference was
promulgated in the exercise of that authority. Delegation of authority by Congress may be shown
in a number of ways, such as an agency’s power to engage in formal adjudication, notice and
comment rulemaking, or other indications of comparable congressional intent. Agency
interpretations that are not entitled to Chevron deference may still be entitled to some measure of
judicial deference under Skidmore v. Swift & Co., 323 U.S. 134 (1944). In Skidmore, the United
States Supreme Court held that an agency’s interpretation may merit deference based on the
specialized experience and broader investigations and information available to the agency and the
value of uniformity in the agency’s administrative and judicial understandings of what national
law requires. Here, the Customs ruling does not qualify for Chevron deference for a number of
reasons. First, the terms of congressional delegation under the governing statute give no indication
that Congress meant to delegate authority to Customs to issue classification rulings with the force
of law. Second, there is no indication that Customs intended to engage in lawmaking when issuing
ruling letters. For example, the classifications set forth in the letters are conclusive only between
Customs and the specific importer to whom the letter is addressed, and other importers are
specifically warned against relying on rulings not addressed directly to them.
Although Chevron deference does not apply here, a claim under Skidmore may be available given
the highly detailed nature of the regulatory scheme at issue. Accordingly, the judgment is vacated
and the case remanded for further proceedings.
Geier v. American Honda Motor Co.

529 U.S. 861 (2000)
Rule of Law
Ordinary preemption principles such as federal conflict preemption may apply to defeat
state common law tort actions based on strict products liability.
Facts
In 1966, the Department of Transportation issued the Federal Motor Vehicle Safety Standard
(FMVSS 208) under the authority of the National Traffic and Motor Vehicle Safety Act. The
standard required auto manufacturers to equip some but not all of their 1987 vehicles with passive
restraints. In 1992, Alexis Grier (plaintiff), driving a 1987 Honda Accord manufactured by
American Honda Motor Co. (Honda) (defendant), collided with a tree and was seriously injured.
Her car was equipped with manual shoulder and lap belts, but no airbags or other passive restraint
devices. Geier brought a state common law tort action against Honda arguing that although it was
in compliance with the FMVSS 208 standard, it should still be held liable for not equipping its
1987 automobile with airbags. FMVSS 208 contained an express preemption provision indicating
it could not be superseded by any state court laws to the contrary. The lower court held Geier’s
lawsuit was preempted by the federal standard and the corresponding federal act. The United States
Supreme Court granted certiorari.
Issue
Whether ordinary preemption principles such as federal conflict preemption apply to defeat state
common law tort actions based on strict products liability.
Holding and Reasoning (Breyer, J.)

Yes. Geier’s action for strict products liability based on a state standard is federally preempted by
the standard in FMVSS 208 because the state law actually conflicts with the federal law governing
use of airbags in 1987 vehicles. Ordinary preemption principles such as federal conflict preemption
may apply to defeat state common law tort actions based on strict products liability. “Ordinary
preemption principles” may include express preemption, where a federal law specifically states
that it preempts subsequent state laws, or conflict preemption, where the federal law preempts all
state laws that “actually conflict” with the federal standard. The express preemption provision in
FMVSS 208 does not operate to defeat Geier’s state court action, because the law also contains a
“Savings Clause” which removes common law actions from the range of actions preempted by the
federal standard. It does not make sense to exclude common law tort actions from the range of
actions held not preempted by the standard. Thus, the express preemption clause of FMVSS 208
cannot be held to preempt Geier’s state common law tort action. However, even if Geier’s action
is not expressly preempted, it may still be federally preempted if the state law on which Geier’s
action is based actually conflicts with the federal standard. This is based on ordinary federal
preemption principles which apply to this case despite the “Savings Clause” in FMVSS 208. The
state law requires airbags in all vehicles, including those manufactured in 1987. This directly
conflicts with the federal standard which requires manufacturers to install airbags in “some but not
all” of their 1987 vehicles. Thus, because the two provisions “actually conflict,” ordinary federal
preemption principles operate to hold that that FMVSS 208 preempts the state law. The federal
regulation adopted by the Department of Transportation favored a “gradual” phasing in of airbag
technology rather than a massive overhaul of all vehicular designs on the market. Geier’s common
law tort action based on a conflicting state law is defeated. The decision of the lower court is
affirmed.
National Labor Relations Board v. Hearst

322 U.S. 111 (1944)
Rule of Law
When reviewing an agency decision involving a mixed question of law and fact, courts review
(1) the facts found by the agency to determine whether the agency’s conclusion has “warrant
in the record” and (2) the agency’s explanation of its decision to determine whether the
decision has a reasonable basis in law.
Facts
The publishers of four Los Angeles daily newspapers (defendants) refused to engage in collective
bargaining with a union representing the “newsboys” who distributed their newspapers. The union
filed an unfair labor charge against the publishers with the National Labor Relations Board
(NLRB) (plaintiff). The NLRB rejected the publishers’ contention that the newsboys were not
entitled to the protections of the National Labor Relations Act (Act) because they were not
“employees” within the meaning of the Act. Under the Act, employers must engage in collective
bargaining with their employees. Congress did not define the scope of the term “employee” in the
statute. The United States Supreme Court granted certiorari.
Issue
When a court considers a question of statutory interpretation during the review of an agency
decision, must the court give weight to the judgment of the agency that administers the statute?
Holding and Reasoning (Rutledge, J.)

Yes. When reviewing an agency decision involving a mixed question of law and fact, courts review
(1) the facts found by the agency to determine whether the agency’s conclusion has “warrant in
the record” and (2) the agency’s explanation of its decision to determine whether the decision has
a reasonable basis in law. Although questions of statutory interpretation are for courts to resolve,
such resolution must take into account the judgment of the agency that administers the statute at
issue. Where the question involves the specific application of a broad statutory term in an agency
proceeding, a reviewing court’s function is more limited. Here, a review of the record and the
NLRB’s findings demonstrates that the board’s determination that specified persons were
“employees” under the Act has warrant in the record and a reasonable basis in law.
Universal Camera Corp. v. National Labor Relations Board

340 U.S. 474 (1951)
Rule of Law
A court should defer to a federal agency's findings of fact if they are supported by
“substantial evidence on the record considered as a whole.”
Facts
In 1946, the National Labor Relations Board (NLRB) brought a proceeding against Universal
Camera Corp. (Universal) for discharging an employee for testifying under the Wagner Act. The
case went to a hearing before a trial examiner of the NLRB. The trial examiner recommended that
the NLRB dismiss the complaint, and issued a report finding that Universal had not discharged the
employee in retaliation for his testimony. The NLRB rejected the report and ordered Universal to
reinstate the employee and to cease and desist from terminating employees for this reason. The
Court of Appeals for the Second Circuit upheld the order. Universal petitioned the Supreme Court
for certiorari, arguing that (1) the Second Circuit erred in holding that it was barred from taking
into account the report of the examiner on questions of fact because that report was rejected by the
NLRB; and (2) the NLRB’s order was not supported by substantial evidence on the record as a
whole.
Issue
Should a court defer to a federal agency’s finding of fact?
Holding and Reasoning (Frankfurter, J.)

Yes. A court should defer to a federal agency’s findings of act if the findings are supported by
substantial evidence on the record considered as a whole. In previous decisions, this Court
established “substantial evidence” as the proper test for courts reviewing the NLRB’s decisions.
However, this led to an assumption by courts that the standard was satisfied when the reviewing
court could find in the record evidence, which, when viewed in isolation, substantiated the NLRB’s
findings. Courts should not view the evidence in isolation; rather the substantiality of the evidence
must take into account conflicting evidence in the record. In short, the court must review the record
as a whole to determine whether there is substantial evidence. Here, the Court of Appeals did
consider the record as whole and thus applied the correct standard of review. However, the Court
of Appeals did not properly take into account the examiner’s findings. The examiner’s report is
part of the record and the court should take it into account. We remand to the court of appeals to
accord the findings of the trial examiner the relevance that they reasonably command in answering
the question whether the evidence supporting the NLRB’s order is substantial. Judgment vacated
and case remanded.
Industrial Union Dept., AFL-CIO v. American Petroleum Institute (The Benzene Case)

448 U.S. 607 (1980)
Rule of Law
In promulgating standards regarding exposure levels to carcinogens, the Secretary of Labor

must make appropriate findings that exposure presents a significant health risk in the
workplace at higher levels in order to set exposure levels at the lowest possible level.
Facts
The Occupational Safety and Health Act of 1970 (Act) delegated authority to the Secretary of
Labor to promulgate standards to ensure safe and healthful working conditions. According to
Section 3(8), standards created by the secretary must be “reasonably necessary or appropriate to
provide safe or healthful employment and places of employment.” Section 6(b)(5) of the statute
sets the principle for creating the safety regulations, directing the Secretary to “set the standard
which most adequately assures, to the extent feasible, on the basis of the best available evidence,
that no employee will suffer material impairment of health or functional capacity…”. Pursuant to
this Act, the Secretary promulgated a standard to regulate exposure to benzene, a carcinogen. The
Secretary took the position that no safe exposure level can be determined and that § 6(b)(5) requires
him to set an exposure limit at the lowest technologically feasible level that will not impair the
viability of the industries regulated. The American Petroleum Institute (plaintiff) took the issue to
court, and the Court of Appeals for the Fifth Circuit held the regulation invalid. The Supreme
Court granted certiorari.
Issue
May the Secretary of Labor set the lowest possible level for benzene exposure on the position
without making findings that exposure presents a significant health risk above this level?

No. The Secretary of Labor must make appropriate findings that exposure presents a significant
health risk in the workplace at higher levels in order to set exposure levels at the lowest possible
level. The Secretary may not fail to do so on the ground that scientific uncertainties concerning
this issue prevent him from making such findings. That puts the burden on industry to show that
benzene is safe at certain levels. The statute, however, puts the burden on the Secretary to show
that it is more likely than not that exposure to benzene at higher levels presents a significant risk
of health impairment. The Secretary has not done so. He has only stated that the benefits to
lowering the exposure level were “likely” to be “appreciable.” This finding is not supported by
substantial evidence. The judgment of the court of appeals is affirmed.
Johnson v. Robison

415 U.S. 361 (1974)
Rule of Law
A statutory provision barring federal courts’ review of decisions by the Veterans’

Administration does not preclude constitutional challenges to laws administered by the
Veterans’ Administration.
Facts
Robison (plaintiff), a conscientious objector during the Vietnam War, made a claim for educational
assistance benefits under the Veterans’ Readjustment Act of 1966. The Veterans’ Administrator
(defendant) denied his claim because as a conscientious objector, Robison had served only two
years of alternative service and had not fulfilled the statutory requirement of “active duty”.
Robison filed suit, claiming that the active duty requirement violated his right to equal protection
under the Fifth Amendment and right to religious freedom under the First Amendment. The
Veterans’ Administrator argued that Robison’s claim should be dismissed under § 211(a) of the
Veterans’ Readjustment Act because it bars federal courts from deciding the constitutionality of
veterans’ benefits legislation. Section 211(a) states that “the decisions of the Administrator on any
question of law or fact under any law administered by the Veterans’ Administration providing
benefits to veterans…shall be final and conclusive and no…court of the United States shall have
power or jurisdiction to review any such decision…”
Issue
Does a statutory provision barring federal courts’ review of decisions by the Veterans’
Administration bar federal courts from deciding the constitutionality of veterans’ benefits
legislation?
Holding and Reasoning
No. This court interprets § 211(a) to mean that it bars review of those decisions of law or fact that
arise in the administration by the Veterans’ Administration of the statute providing benefits.
Robison’s constitutional challenge is to the decision of Congress to create a class entitled to
benefits (military veterans who have been on active duty) that does not include others
(conscientious objectors who performed alternative civilian service). The purpose of the no-review
clause was so that (1) courts would not be burdened by veterans challenging how their benefits
claims have been determined, and (2) highly technical and complex veterans benefits decisions
will be decided in a uniform way. A constitutional challenge to the statute does not overly burden
the courts and does not require the court to consider technical considerations of Veterans’
Administration policy.
Webster v. Doe

486 U.S. 592 (1988)
Rule of Law
When Congress intends to preclude review of constitutional claims, its intent to do so must
be clear.
Facts
John Doe (plaintiff) began working for the Central Intelligence Agency (CIA) in 1973. Over the
course of his time at the CIA, Doe received excellent reviews and a promotion. In 1982, he
informed a CIA security officer that he was gay. The Director of the CIA (Director) (defendant)
then fired Doe on the ground that his homosexuality posed a threat to security. Doe sued the
Director, arguing that the agency’s decision to fire him violated the Administrative Procedure Act
(APA) and deprived him of his constitutionally protected rights to privacy, liberty, and privacy,
procedural due process, and equal protection. In response to Doe’s suit, the Director argued that §
102(c) of the National Security Act (NSA) precludes judicial review of his dismissal decisions.
The court of appeals found that Doe’s termination was reviewable. The United States Supreme
Issue
Can constitutional claims arising out an agency’s action be reviewable where the statute affording
the agency authority to engage in that action does not clearly preclude the review of constitutional
claims?
Holding and Reasoning (Rehnquist, C.J.)

Yes. Under § 701(a)(2) of the APA, courts may not review an agency decision where the agency
action is “committed to agency discretion by law.” Under this provision, an agency decision is
unreviewable where the statute is drawn in such a manner that a court would have no meaningful
standard against which to judge the agency’s exercise of discretion. Additionally, when Congress
intends to preclude review of constitutional claims, its intent to do so must be clear. Here, the
provision of the language and structure of the NSA indicate that Congress meant the Director to
have discretion over the termination of individual employees. As such, § 701(a)(2) of the APA
precludes judicial review of the Director’s termination decisions under the APA. Yet, it is not clear
from § 102(c) of the NSA that Congress intended to preclude review of colorable constitutional
claims arising out of the Director’s actions under that provision. Accordingly, the district court
may review a constitutional claim based on an individual discharge.
Heckler v. Chaney

470 U.S. 821 (1985)
Rule of Law
Section 701(a)(2) of the Administrative Procedure Act (APA) bars judicial review of agency
action where such action is “committed to agency discretion by law.”
Facts
Individuals who were sentenced to death by lethal injection of drugs in Oklahoma and Texas
(plaintiffs) filed a petition with the Food and Drug Administration (FDA). In their petition, the
plaintiffs argued that the FDA had not approved the use of such drugs for human executions. For
this reason, the plaintiffs contended that the states’ use of the drugs for human execution violated
various provisions of the Federal Food, Drug, and Cosmetics Act (FDCA). In their petition, the
plaintiffs requested that the FDA take certain investigatory and enforcement actions to prevent
such violations. The FDA refused the plaintiffs’ request. The plaintiffs then made a similar request
in federal court in a suit against the Secretary of Health and Human Services (Secretary)
(defendant). The United States Supreme Court granted certiorari.
Issue
Is an agency’s decision not to take enforcement action presumed immune from judicial review
under § 701(a)(2) of the APA?
Holding and Reasoning (Rehnquist, J.)

Yes. Section 701(a)(2) of the APA bars judicial review of agency action where such action is
“committed to agency discretion by law.” This section applies even where Congress has not
affirmatively precluded review. It bars judicial review when a statute offers no meaningful
standard off of which a court may judge the agency’s exercise of discretion. An agency’s decision
not to take enforcement action is presumed immune from judicial review under § 702(a)(2). This
presumption of unreviewability may be rebutted where a statute provides the agency with
guidelines for the exercise of the agency’s enforcement powers. Here, the FDCA provides no
substantive standards against which courts may base review. Accordingly, the FDA’s decision to
not take the enforcement actions that the plaintiffs requested is not reviewable under the APA.
Massachusetts v. Environmental Protection Agency

549 U.S. 497 (2007)
Rule of Law
(1) The Clean Air Act provides the Environmental Protection Agency with the statutory
authority to regulate new motor vehicle emissions greenhouse gases as an “air pollutant.” (2)
For standing to be appropriate, an actual case or controversy must be present, which is
characterized by a truly adversarial relationship. (3) Although an agency’s refusal to initiate
rulemaking is subject to judicial review, such review is extremely limited and highly
deferential.
Facts
After the Environmental Protection Agency (EPA) (defendant) declined several private petitions
to issue regulations governing greenhouse gas emissions from new automobiles, a group of states
(including Massachusetts) (plaintiffs) brought suit against the Environmental Protection Agency
(EPA) (defendant) seeking declaratory relief on the issue of whether the EPA had the statutory
authority to regulate greenhouse gas emissions under the Clean Air Act; and if so, whether its
stated reasons for refusing to do so were consistent with the Clean Air Act. The state of
Massachusetts alleged inter alia that the EPA’s failure to regulate these emissions would ultimately
result in loss of its coastal lands due to increased global warming from the emissions. The EPA
claimed that the Clean Air Act (CAA) did not authorize the agency to issue regulations to address
global climate change and, moreover, that Congress had not yet finished investigating the scientific
merits of climate change. The EPA further argued that it was not wise to regulate such emissions
at that time. The Court of Appeals for the District of Columbia Circuit agreed and held in favor of
the EPA. Plaintiffs appealed. The U.S. Supreme Court granted certiorari to review.
Issue
(1) Does the Clean Air Act provide the Environmental Protection Agency with the statutory
authority to regulate new motor vehicle emissions greenhouse gases as an “air pollutant”? (2) For
standing to be appropriate, must an actual case or controversy be present, characterized by a truly
adversarial relationship? (3) Is an agency’s refusal to promulgate rules subject to judicial review?
(1) Yes. Section 202(a)(1) of the Clean Air Act clearly provides that the EPA Administrator shall
promulgate standards applicable to the emission of any air pollutant from any class or classes of
new motor vehicles or new motor vehicle engines that, in the Administrator’s judgment, may
reasonably endanger the public health or welfare. The EPA argues that carbon dioxide, the basis
of greenhouse gas emissions, is not an “air pollutant” within the meaning of the CAA. However,
the definition of “air pollutant” is broad enough to encompass any air pollutant, including “any
physical, chemical…substance or matter which is emitted into or otherwise enters the ambient
air….” 42 U.S.C. § 7602(g). The EPA further claims it should not be required to issue regulations
addressing new car emissions standards because Congress has failed to issue a clear directive to
do so. Merely because Congress continues to review the plethora of scientific literature
surrounding global climate change does not negate the clear statutory authority provided to the
EPA to regulate new vehicle greenhouse gas emissions. Additionally, the EPA’s reliance on FDA
v. Brown & Williamson Tobacco Corp., 529 U.S. 120 (2000), is similarly misplaced. In FDA, the
Court held that tobacco products are not “drugs” or “devices” subject to regulation under the Food,
Drug, and Cosmetic Act. Congress never intended tobacco to be classified as a drug or device
subject to regulation by the FDA. Conversely, Congress afforded the EPA with clear statutory
authority to curtail the emission of substances that may cause harm to the public. Finally, the EPA’s
claim that it is not wise to issue regulations “at this time” is unavailing. The agency has failed to
offer any reason or explanation regarding why it is unwise to regulate greenhouse gas emissions.
(2) Yes. For standing to be appropriate, an actual case or controversy must be present, which is
characterized by a truly adversarial relationship. A plaintiff can show the existence of a truly
adversarial relationship by demonstrating that he has suffered a concrete and particularized injury
that is either actual or imminent; that the injury is fairly traceable to the defendant; and that it is
likely that a favorable decision would redress that injury. In a class action suit, only one member
of a class of petitioners must meet the required elements of standing to sufficiently demonstrate an
adversarial relationship. Massachusetts adequately met these requirements and standing is thus
appropriate. Although it is unusual for a sovereign state such as Massachusetts to have standing to
bring suit in federal court, Congress made no other provision for states to sue the EPA for failing
to regulate greenhouse gas emissions according to its Clean Air Act obligations. Massachusetts
already showed the existence of a concrete and particularized injury because it is well-documented
that exposure to greenhouse gas emissions would further exacerbate the problem of global
warming and would ultimately cause Massachusetts to lose coastal lands. Additionally, there is
sufficient causation between the EPA’s failure to regulate greenhouse gas emissions and this
injury, as the lack of regulations contribute to the problem of environmental damage from
greenhouse gases. Finally, although the impact would be small in light of the global problem of
greenhouse gas emissions, the EPA’s regulation of domestic emissions would, in fact, have an
impact on decreasing the amount of emissions in the environment and thus reducing the amount
of environmental damage to Massachusetts. On the merits, the EPA does have the authority under
the statute to regulate greenhouse gases. If the EPA refuses to do so, the EPA must state the reasons
for its refusal. (3) Yes. Although an agency’s refusal to initiate rulemaking is subject to judicial
review, such review is extremely limited and highly deferential. A court may reverse an agency
action found to be arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with
the law. Once the EPA responds to a rulemaking petition related to the emission of pollutants, its
reasons for action or inaction must conform to the Clean Air Act. Under the Clean Air Act, the
EPA may only avoid taking further action if it determines that greenhouse gases do not contribute
to climate change or if it provides some reasonable explanation as to why it cannot or will not
exercise its discretion to determine if they do. Here, the EPA refused to comply with the clear
statutory demands of the Clean Air Act. In failing to offer a reasoned explanation for its refusal to
decide whether greenhouse gases cause or contribute to climate change, the EPA acted in a manner
that was arbitrary, capricious, or otherwise not in accordance with law. The judgment of the court
of appeals is reversed and the matter is remanded for further proceedings consistent with the
opinion.
Norton v. Southern Utah Wilderness Alliance

542 U.S. 55 (2004)
Rule of Law
Section 706(1) of the Administrative Procedure Act (APA) authorizes federal courts to
compel agency action unlawfully withheld or unreasonably delayed.
Facts
The Bureau of Land Management (BLM) (defendant), an agency within the Department of
Interior, is required to manage public funds pursuant to the Federal Land Policy and Management
Act of 1976 (FLPMA). The FLPMA established a policy in favor of retaining public lands for
“multiple use management.” The term “multiple use management” describes BLM’s task of
striking a balance between the many competing uses to which land can be put. Under the FLPMA,
designated wilderness areas generally may not have any commercial enterprise, permanent road,
motorized vehicles, or manmade structures. Pursuant to the statute, the Secretary of the
Department of Interior (Secretary) (defendant) identified certain areas—known as Wilderness
Study Areas (WSAs)—to be subjected to further examination and further comment to evaluate
their suitability for a wilderness designation. Such an area in Utah was recommended as suitable
for a wilderness designation, but Congress failed to act upon the recommendation. The FLPMA
provides that, in such a situation, the Secretary is to continue to manage the land in a manner that
does not impair its suitability for preservation as wilderness. Off-road vehicles (ORVs) were being
used on the land. The Southern Utah Wilderness Alliance and other organizations (plaintiffs) sued
BLM, its Director, and the Secretary, seeking declaratory and injunctive relief for BLM’s failure
to act to protect public lands in Utah from damage caused by the use of ORVs. The United States
Supreme Court granted certiorari.
Issue
Does § 706(1) of the APA give courts the authority to enter general orders compelling agencies to
comply with broad statutory mandates?
Holding and Reasoning (Scalia, J.)

No. Section 706(1) of the Administrative Procedure Act (APA) authorizes federal courts to compel
agency action unlawfully withheld or unreasonably delayed. A claim under § 706(1) may proceed
only when the plaintiff has asserted that the agency failed to take a discrete agency action that it is
required to take. These limitations rule out broad programmatic challenges to agency action. Here,
although the FLMPA mandates the continued management of WSAs in a manner that does not
impair their suitability of such areas for wilderness preservation, the statute leaves BLM significant
discretion in deciding how to achieve this goal. Because the statute does not mandate the total
exclusion of ORV use, § 706(1) does not authorize judicial action. Accordingly, the lower court’s
decision is reversed, and the case is remanded for further proceedings.
Abbott Laboratories v. Gardner

387 U.S. 136 (1967)
Rule of Law
(1) In determining whether a case or controversy is ripe for adjudication, a court must
evaluate the fitness of the issues for judicial decision and the hardship to the parties of
withholding court consideration. (2) Judicial review of a final agency action by an aggrieved
person will not be cut off unless Congress clearly intended to prevent such review.
Facts
In 1962, Congress amended the Federal Food, Drug, and Cosmetic Act to require prescription drug
manufacturers to print the common or “established” name of their drugs in large letters along with
the “proprietary” or trade name of the drug on all packaging. Abbott Laboratories and thirty-seven
other prescription drug manufacturers (plaintiffs) brought suit against Gardner (defendant), the
federal Commissioner responsible for enforcing the new act, alleging that the Commissioner
exceeded his authority in making such a regulation. Abbott successfully sought injunctive and
declaratory relief in district court, but the court of appeals reversed. The United States Supreme
Issue
(1) Is the controversy surrounding the constitutionality of the prescription drug regulations ripe for
judicial adjudication? (2) Is a judicial review of an agency action available when the statute
governing the agency action does not expressly provide for such review?
Holding and Reasoning (Harlan, J.)
(1) Yes. In determining whether a case or controversy is ripe for adjudication, a court must evaluate
the fitness of the issues for judicial decision and the hardship to the parties of withholding court
consideration. Both prongs of the new ripeness test are satisfied in this case. Firstly, no questions
of fact remain to be decided in the case and all judicial issues are pure questions of law, thus fit to
be adjudicated. Secondly, the parties will suffer immediate and severe harm if consideration is
withheld. Without a ruling on this issue, Abbot is forced either to undergo a very costly and
wasteful rebranding of its products, or, in the alternative, risk severe civil and criminal penalties
from statutory noncompliance. Failure to decide the issues in this case severely impacts Abbott,
hence, the case is ripe for adjudication. The judgment of the court of appeals is reversed and
remanded for further adjudication. (2) Yes. Judicial review of a final agency action by an aggrieved
person will not be cut off unless Congress clearly intended to prevent such review. Under the
Administrative Procedure Act, final review of an agency action is available when authorized by
statute or when there is no other adequate remedy in court. The existence of a specific procedure
for reviewing certain regulations other than those at issue here does not necessarily mean that
Congress intended to bar other acts from judicial review. Here, no statutory authority in the food
and drug area specifically excludes pre-enforcement review. Additionally, the legislative history
supports the conclusion that the specific review provisions contained in the statute were designed
to give additional remedies, not to limit or eliminate other forms of review. Accordingly, nothing
in the FDCA itself precludes the plaintiffs’ action.
Gardner v. Toilet Goods Association

387 U.S. 167 (1967)
Rule of Law
Regulations that are self-executing, have an immediate and substantial impact on parties,
and appear susceptible of reasoned comparison with the statutory mandate without inquiry
into factual issues are subject to pre-enforcement review.
Facts
The Color Additive Amendments of 1960 (the CAA), 21 U.S.C. §§ 321-76, required all color
additives to be cleared and each batch certified as a matter of public safety. A color additive that
did not satisfy these requirements was considered unsafe and adulterated, and anyone who placed
such additives into the market was subject to inunctions, criminal penalties, and seizure of goods.
The CAA authorized the Secretary of Health, Education, and Welfare, Gardner (defendant), and
the Commissioner of Food and Drugs (Commissioner) to implement regulations giving effect to
these requirements. The Commissioner issued a rule that all diluents, which are color additive
mixtures that are not themselves color additives, were subject to the CAA. The Commissioner
determined that any substance intended only to color the human body, like most makeup, was a
color additive within the meaning of the CAA. Lastly, while hair dyes were exempt from certain
regulations if the labels included a notice instructing the user to conduct a patch test to check for
skin irritation, the Commissioner nevertheless concluded that if patch testing did not provide a
safeguard, the exemption was inapplicable. Multiple producers (plaintiffs) of goods that fall within
the Commissioner’s definition of color additives filed a pre-enforcement suit to enjoin the
regulations. The government asserted that such a challenge was improper before enforcement had
occurred, but the plaintiffs asserted that unnecessary compliance would cost tens of millions of
dollars, and noncompliance would subject them to severe penalties. The district court and the
United States Court of Appeals for the Second Circuit held that a pre-enforcement suit was proper,
and the government petitioned the United States Supreme Court for review.
Issue
Are regulations that are self-executing, have an immediate and substantial impact on the parties,
and appear susceptible of reasoned comparison with the statutory mandate without inquiry into
factual issues subject to pre-enforcement review?
Holding and Reasoning (Harlan, J.)

Yes. Based on Abbott Laboratories v. Gardner, 387 U.S. 136 (1967), regulations may be subject
to pre-enforcement review if they: (1) are self-executing, (2) have an immediate and substantial
impact on the parties, and appear susceptible of reasoned comparison with the statutory mandate
without the need for inquiry into factual issues. The chief consideration is whether the question is
appropriate for judicial determination and “the immediate severity of the regulations’”
consequences for the challenging parties. The Food, Drug, and Cosmetic Act, 21 U.S.C. 301 et
seq. does not bar pre-enforcement relief from regulations available under the Administrative
Procedure Act 5 U.S.C. 701-04 and the Declaratory Judgment Act, 28 U.S.C. § 2201. The
challenged regulations in this case relate to the Commissioner’s construction of the statutory
definition. The Commissioner used his rule-making authority to expand the definition of color
additives to which the CAA applies. The plaintiffs claim that this expansion went well beyond
what Congress intended. The cost of needless compliance with the statute for materials that ought
not to fall under the CAA is in the tens of millions. Meanwhile, noncompliance would subject the
plaintiffs to injunctions, seizure of goods, and criminal sanctions. Requiring the plaintiffs to make
that choice and await enforcement to challenge the regulations would be inefficient and costly for
the plaintiffs and the public. The suit may go forward. The judgment of the lower courts is
affirmed.
Association of Data Processing Service Organizations, Inc. v. Camp

397 U.S. 150 (1970)
Rule of Law
A plaintiff has standing to challenge an agency ruling when the challenged action has caused
him injury-in-fact and the interest sought to be protected is arguably within the zone of
interests to be protected by the statute or constitutional guarantee in question.
Facts
The, Association of Data Processing Service Organizations, Inc. (ADAPSO) (plaintiff), a trade
organization of data processing services companies, brought suit in a United States district court
to challenge a ruling by the Comptroller of the Currency holding that national banks could enter
the data processing business. Section 4 of the Bank Services Corporation Act of 1962 provides
that “no bank service corporation may engage in any activity other than the performance of bank
services for banks.” ADAPSO alleged that it had standing to challenge the ruling because a
national bank had started or had prepared to start performing data processing services previously
performed by one of ADAPSO’s members. The district court held ADAPSO did not have standing
and the court of appeals affirmed. The Supreme Court granted certiorari.
Issue
Does a plaintiff have standing to challenge an agency ruling when the challenged action has caused
him injury-in-fact and the interest sought to be protected is arguably within the zone of interests
to be protected by the statute or constitutional guarantee in question?
Holding and Reasoning (Stevens J.)

Yes. A court must first determine whether a challenged action has caused a plaintiff injury-in-fact.
Here, ADAPSO has satisfied this test. Not only will the ruling cause its members future loss of
profits, the ruling already has caused a loss of profits because a national bank has started or has
prepared to start performing data processing services previously performed by one of ADAPSO’s
members. Second, a court must determine whether the interest sought to be protected is arguably
within the zone of interests to be protected by the statute or constitutional guarantee in question.
The APA grants standing to a person “aggrieved by agency action within the meaning of a relevant
statute.” 5 U.S.C. § 702. This court finds that Section 4 of the Bank Services Corporation Act of
1962 brings a data processing service company competing with banks within the zone of interests
protected by the statute. We hold that ADAPSO has standing to sue and the case should be
remanded for a hearing on the merits.
Sierra Club v. Morton

405 U.S. 727 (1972)
Rule of Law
A membership organization’s mere interest in a problem, without a showing that its

members would suffer actual injury, is not sufficient to show that the entity has standing to
seek judicial review of an action by a federal agency.
Facts
The U.S. Forest Service issued a request for proposals to develop, for recreational purposes,
approximately 80 acres of undeveloped, naturally-beautiful land in the Sierra Nevada Mountains
of California called the Mineral King Valley. The winning bidder, Walt Disney Enterprises, Inc.,
proposed a $35 million complex of motels, restaurants, swimming pools, parking lots, a highway,
a ski resort, and other structures to accommodate 14,000 visitors daily. Representatives of the
Sierra Club (plaintiff), a membership entity with a special interest in national parks and land
conservation, filed suit in federal district court against Morton, the Secretary of the Interior, and
others (defendants) seeking declaratory and injunctive relief pursuant to the Administrative
Procedure Act (APA), 5 U.S.C. § 701 et seq., to prevent the Mineral King Valley development.
After a hearing, the district court granted Sierra Club’s request for injunction. Defendants
appealed. The court of appeals reversed, and held that the Sierra Club lacked standing to present a
justiciable claim. Additionally, the appellate court held that the Sierra Club had not made an
adequate showing of irreparable injury and likelihood of success on the merits to justify issuance
of the injunction. The U.S. Supreme Court granted certiorari to review.
Issue
Is a membership organization’s mere interest in a problem, without a showing that its members
would suffer actual injury, sufficient to show that the entity has standing to seek judicial review of
an action by a federal agency?

No. Sierra Club claims that the injury it would suffer should the Mineral King Valley development
proceed is the resulting change in the aesthetics and ecology of the area. Defendants argue that a
“change in scenery” is not a cognizable injury. While aesthetic and environmental well-being are
important ingredients of the quality of life, the “injury in fact” test requires more than an injury to
a cognizable interest. It requires that the party seeking review by one who is injured. Here, the
Sierra Club fails to articulate in its pleadings that its members use Mineral King for any purpose,
much less that they use it in a manner that will be substantially affected by the proposed
development. A mere interest in a problem is not sufficient by itself to render the organization
“injured” or “adversely affected” within the meaning of the APA. Such a holding could open up a
plethora of similar suits by entities having some interest in a particular issue without a showing
that it would suffer any injury from the complained-of activity. The court of appeals correctly held
that the Sierra Club lacked standing to maintain the present action. The judgment of the court of
appeals is affirmed.
Lujan v. Defenders of Wildlife

504 U.S. 555 (1992)
Rule of Law
Under Article III of the Constitution, a party does not have standing to litigate a generalized
grievance against the government in federal court if she suffered no personal injury other
than the harm suffered by all citizens.
Facts
Section 7(a)(2) of the Endangered Species Act of 1973 (ESA), as amended 16 U.S.C. § 1531 et
seq., requires federal agencies to consult with the Secretary of the Interior or Commerce before
undertaking actions that might jeopardize endangered or threatened species. The ESA provides
that any person may initiate a civil suit on her own behalf to enjoin anyone, including governmental
entities, from violating the ESA. In 1978, the Secretaries promulgated a joint regulation stating
that the ESA consultation requirement extended to federal actions taken in foreign nations. A new
joint regulation limiting the geographic scope to the United States and the high seas was proposed
in 1983 and adopted in 1986. Organizations dedicated to the protection of wildlife (plaintiffs) sued
the Secretary of the Interior, Lujan (Secretary) (defendant), seeking a declaratory judgment that
the new regulation’s interpretation was wrong and an injunction requiring the Secretary to restore
the initial interpretation of the geographic scope of the statute. The plaintiffs argued they were
injured because a lack of consultation for governmental activities abroad increases the rate of
extinction of endangered species. The Secretary moved to dismiss based on the plaintiffs’ lack of
standing. The district court granted the motion, but the court of appeals reversed and remanded.
The district court then granted the plaintiffs’ summary judgment motion and issued the injunction.
The appellate court affirmed. The United States Supreme Court granted certiorari.
Issue
Does a party have standing to litigate a generalized grievance against the government in federal
court if she suffered no personal injury other than the harm suffered by all citizens?
Holding and Reasoning (Scalia, J.)

No. A plaintiff may not litigate a generalized complaint against the government based on harm
suffered equally by all citizens. Standing under Article III of the Constitution contains three
elements. First, a plaintiff must have suffered an actual injury. An injury in fact is “an invasion of
a legally protected interest which is (a) concrete and particularized…and (b) actual or imminent.”
Second, the plaintiff must show a causal link between the harm and the conduct at issue. This
means that the injury is “fairly traceable to the challenged action…and not the result of the
independent action of some third party.” Third, it must be probable that a favorable verdict will
redress the harm. The burden is on the plaintiff to demonstrate these elements. Allowing citizens
to sue over an abstract “right” to have the Executive Branch follow statutory procedures implicates
the separation of powers doctrine. Here, the plaintiffs failed to show that threats to endangered
species cause them imminent injury. Their theories regarding an ecosystem, animal, or vocational
nexus justifying standing for individuals who want to study, see, or work with such animals are
too speculative. The plaintiffs also failed to show how a favorable outcome would redress their
alleged injury. Conjecture regarding redressability is insufficient to support standing. Additionally,
the plaintiffs have not suffered a “procedural injury” that justifies standing under the citizen-suit
provision of the ESA. The plaintiffs are suing over a generally available complaint about the
government, not seeking to enforce a procedural requirement that protects a separate, concrete
interest. Accordingly, the decision of the court of appeals is reversed.
Federal Election Commission v. Akins

524 U.S. 11 (1998)
Rule of Law
Prudential standing is satisfied when the injury asserted arguably falls within the zone of
interests to be protected or regulated by the statute in question.
Facts
The Federal Election Commission (FEC) (defendant) determined that the American Israel Public
Affairs Committee (AIPAC) was not a “political committee” and thus did not have to disclose its
members, contributions, and expenditures, as was required of political committees. A group of
voters (plaintiffs) appealed the FEC’s decision based on the Federal Election Campaign Act (Act),
which stated that “[a]ny person who believes a violation this Act . . . has occurred, may file a
complaint with the [FEC]” and that “[a]ny party aggrieved by an order of the [FEC] dismissing a
complaint filed by such party . . . may file a petition” in district court. The court of appeals reversed
the FEC decision. The FEC appealed, claiming that the plaintiffs lacked prudential standing to
bring the suit. The United States Supreme Court granted certiorari.
Issue
Is prudential standing satisfied when the injury asserted falls within the zone of interests to be
protected or regulated by the statute in question?
Holding and Reasoning (Breyer, J.)

Yes. To establish constitutional standing, a party must establish that its injury is concrete, fairly
traceable to the challenged action, and redressable. Prudential standing is satisfied when the injury
asserted by a plaintiff arguably falls within the zone of interests to be protected or regulated by the
statute in question. In the present case, the plaintiffs’ injury is that they were unable to obtain
information about the AIPAC that was relevant to their evaluation of candidates for public office.
Although this injury is widely shared, it is sufficiently concrete to meet the requirement under
Article III of the U.S. Constitution because the injury is definite and directly related to voting.
Furthermore, the injury is fairly traceable to the FEC’s decision because the decision directly
deprived the plaintiffs of the information they sought. Finally, the injury falls within the zone of
interests to be protected or regulated by the Act. The Act provides that “[a]ny person who believes
a violation this Act . . . has occurred, may file a complaint with the [FEC].” Certainly, the plaintiffs
believe a violation of the Act occurred, and under the terms of the Act itself, they have prudential
standing. As a result of the foregoing, the plaintiffs have standing to bring this claim. The case is
remanded to the FEC.
Friends of the Earth, Inc. v. Laidlaw Environmental Services, Inc.

528 U.S. 167 (2000)
Rule of Law
A controversy will be deemed moot on the grounds of voluntary cessation by the defendant
if the defendant proves there is no reasonable chance it could resume the offending behavior.
Facts
Friends of the Earth (FOTE) and several other environmental groups (plaintiffs) brought suit
against Laidlaw Environmental Services (defendant) alleging that the company was violating
provisions of the Clean Water Act (CWA) and its National Pollutant Discharge Elimination
System (NPDES) permit by emitting mercury into the environment. Laidlaw claimed that the
controversy was moot because it complied with all environmental regulations associated with its
NPDES permit. The district court determined that, because Laidlaw was in compliance with its
permit, it was inappropriate for FOTE to sue under the CWA. After this decision, Laidlaw closed
one of its main offending facilities. On appeal by FOTE, the court of appeals held that the case
was moot because Laidlaw’s compliance with the statute and closure of its offending facility
constituted a voluntary cessation of the offending behavior. The United States Supreme Court then
granted certiorari to determine the law surrounding mootness.
Issue
Whether the present case is deemed moot on the grounds of voluntary cessation because there is
no reasonable chance the defendant could resume the offending behavior.
Holding and Reasoning (Ginsburg, J.)

No. A court must cease to hear a case on mootness grounds if the defendant voluntarily ceases the
offending activity and there is no reasonable chance the defendant could later resume said activity.
When claiming mootness based on voluntary cessation, a defendant bears the high burden of proof
of showing that there is no reasonable way it could resume the offending behavior. Laidlaw did
not satisfy its burden of proof on this issue. The effect on the likelihood of future violations of
Laidlaw’s compliance with its NPDES permit and closure of its facility is a factual dispute. The
case is remanded for further factual determinations.
National Credit Union Administration v. First National Bank & Trust Co.

522 U.S. 479 (1998)
Rule of Law
For the purposes of establishing standing to pursue judicial review of an agency’s

interpretation of a statute under the APA, a plaintiff must demonstrate that his interests
arguably fall within the “zone of interests” protected by the statute.
Facts
The Federal Credit Union Act (FCUA) authorizes the chartering of credit unions at the national
level. Under § 109 of the FCUA, federal credit union membership is limited to groups having a
common bond of occupation or association, or to groups within a well-defined neighborhood,
community, or rural district. Pursuant to its interpretation of this provision, the National Credit
Union Administration (NCUA) (defendant) has permitted federal credit unions to be composed
entirely of unrelated employer groups, as long as these groups have their own common bond of
occupation. AT&T Family Federal Credit Union (ATTF) expanded its operations under this
interpretation and added several unrelated employer groups as members. Five commercial banks
(plaintiffs) challenged the NCUA’s approval of ATTF’s membership expansion under the
Administrative Procedure Act (APA). The United States Supreme Court granted certiorari.
Issue
Do financial institutions that are competitors of credit unions have standing under the APA to
challenge the NCUA’s interpretation of a statutory provision governing credit union membership?
Holding and Reasoning (Thomas, J.)

Yes. To have standing to challenge an agency interpretation of a statute under the APA, a plaintiff’s
interests must arguably fall within the “zone of interests” protected by the statute. To determine
whether a plaintiff’s interests are within this zone of interests, courts engage in a two-part inquiry.
First, they discern the interests arguably to be protected by the statutory provision at issue; and,
second, they examine whether the plaintiff’s interests are among such arguably protected interests.
Here, one of the interests arguably to be protected by § 109 of the FCUA is an interest in limiting
the markets that federal credit unions can serve. The plaintiffs are competitors of credit unions. As
such, they have an interest in limiting the markets that credit unions can serve. The NCUA’s
interpretation of the FCUA provision affected the plaintiffs’ interests. Accordingly, the plaintiffs
have standing to challenge the agency’s interpretation.

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