Contents

I. Introduction & Policy ............................................................................................................. 2

II. Constitutional Position of Agencies........................................................................................ 3
A. NON-DELEGATION ...................................................................................................... 3
B. LEGISLATIVE CONTROLS .......................................................................................... 5
C. EXECUTIVE AND AGENCIES ..................................................................................... 6
D. AGENCY STRUCTURE ............................................................................................... 10
III. PROCEDURAL REQUIREMENTS IN AGENCY ACTIONS ........................................ 13
A. AGENCY ACTIONS ..................................................................................................... 13
B. UNIVERSAL APA RESTRICTIONS ........................................................................... 14
C. FORMAL APA REQUIREMENTS .............................................................................. 15
D. COMMON LAW REQUIREMENTS ........................................................................... 16
E. RULEMAKING ............................................................................................................. 17
i. FORMAL RULEMAKING......................................................................................... 18
ii. NOTICE & COMMENT RULEMAKING ............................................................ 19
F. ADJUDICATION .............................................................................................................. 25
i. FORMAL ADJUDICATION ......................................................................................... 26
ii. INFORMAL ADJUDICATION ................................................................................. 26
G. Interplay between Rulemaking and Adjudication .......................................................... 27
IV. JUDICIAL REVIEW ......................................................................................................... 27
B. REVIEW OF LAW ........................................................................................................ 29
C. HARD LOOK REVIEW ................................................................................................ 36
D. AGENCY BIAS ............................................................................................................ 41
V. DUE PROCESS HEARING RIGHTS ................................................................................. 42
A. DUE PROCESS IN ADMIN LAW ............................................................................... 42
B. STEP ONE: DOES A PROTECTED INTEREST EXIST? ........................................... 42
C. STEP TWO: WHAT PROCESS IS DUE? .................................................................... 45
VI. REVIEWABILITY ............................................................................................................ 48
VII. Standing ............................................................................................................................. 54
VIII. RIPENESS, FINALITY AND EXHAUSTION............................................................. 61
A. RIPENESS ..................................................................................................................... 61

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 B. FINALITY ..................................................................................................................... 62
C. EXHAUSTION .............................................................................................................. 64

Administrative Law Outline – Spring 2017

I. Introduction & Policy

 Problems requiring agencies/regulations
o Externalities—actions cause costs for others and we want someone to
internalize it
o Collective action problems
o Inadequate information
o Natural monopolies—some businesses naturally end in monopoly
o Allocating scarce goods
o Rent control
o Prevent excessive competition
o Non-economic concerns: redistribution, fairness, paternalism, people bad at
CBA
 Sources of law
o (1) Constitution—no express provisions authorizing agencies. Although some
clauses imply a federal bureaucracy.
 Congress has broad authority to “create” governmental “offices” and
to structure officers “as it chooses.” Buckley. But in doing so,
Congress cannot touch on the President’s constitutional authority.
Buckley.
o (2) Specific statutes governing agency’s conduct
o (3) Agency’s own rules/regulations
o (4) Standards of proper procedure
o (5) Judge-made law
 What is an agency?
o APA—“Each authority of government”
 Excludes Congress, courts, and the President (according to Franklin)
o Creation—organic statute creating agency passed by Congress
 Theories of agency behavior
o Madison—reduces the power that government can exert on citizens
 Federalist 51—central importance of structural impediments to
accumulation of power, so create checks and balances
o Progressives—governance by impartial experts; government is science; not
much of a role for courts (technocrats handle issues)
o New Deal—associated with public interest theory of regulation
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  Landis—government regulates imperfections in the market;
administrators should have all authority; shouldn’t be hampered by
judges
 Separation of powers inadequate to deal with modern problems
o Concerns underlying APA (1946)—life cycle of an agency: become
complacent; industry capture
o Kahn—concerned with capture; agencies screwing up competition
o Public Choice Theory—collective action problems + issues with no one acting
in public interest
o Ideology Plays a Rule—few think it doesn’t matter which party is in power;
implication is deregulation
 Principle-agent problem
o Who do we want agency to be aligned with? Congress—more accountability;
producers; consumers?
 Working through issue spotter
o Start with the text of the statute
 Is there a delegation problem?
 What factual findings are required of the agency?
 If it’s really broad, probably a policy judgment (like “protect
health in an appropriate manner”)
 Options for administration wanting to undo regulations
o If something has not yet gone into effect, stop it
o Guidance documents can be undone through new guidance
o Congressional Review Act—congress can fast-track for legislative repeal for
regulations of law 6 months of an administration
o State Farm—implement new regulations to replace the old ones (time
consuming)

II. Constitutional Position of Agencies

A. NON-DELEGATION
 RULE: This issue is whether the statute delegated legislative power to the agency.
Louisiana Public Serv. Common (agencies have “literally no power to act . . .
unless and until Congress confers power upon [them]”). Congress must only have
provided an “intelligible principle to which the person or body authorized to [act]
is directed to conform.” Whitman. BUT take the construction that grants authority
with some meaningful principle to avoid the constitutional problem. Benzene
Case plurality
o Qualifications:
 Agencies cannot cure a constitutional problem by adopting a
narrow interpretation. Whitman

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  Non-delegation problems are less likely when statutory scope is
narrow. Whitman
 CASES:
o Schechter Poultry
 Background: NIRA permitted President to promulgate codes for
industry; broad delegation (ensure “fair competition”). There was
no limiting principle. President also gave regulatory power to non-
government actors who in turn regulated minimum wages and
maximum hours.
 Holding: The Court held that Congress can’t give the President
unfettered discretion; law struck down.
o NBC v. United States—regulation for “public interest, convenience, or
necessity” has a limiting principle. Here, it is best practicable service.
o The Benzene case
 Background: Statutory language is to promulgate rules “reasonably
necessary for healthful employment and to the extent feasible…”
OSHA made a default rule stating that 1ppm is the limit if the safe
level is unknown. Industry said no evidence less than 25ppm
harms people and the maximum is already 10ppm.
 Holding: reg unenforceable because standard not based on
appropriate findings.
 Plurality: OSHA must find a significant health risk in the
workplace under its organic statute, which provides the requisite
intelligible principle. [When there is delegation that could raise
doctrine, chose the narrower to avoid question about non-
delegation doctrine]
 Powell (concurring): “to extent feasible” means that costs don’t
outweigh the benefits (Cong intended CBA)
 Rehnquist (concurring): “to extent feasible” mushy standard. When
fundamental policy decisions are made, Cong should decide
 Marshall (dissenting): means lowest level that allows industry to
keep going
o NCTA v. U.S. (1974)—read Act narrowly to avoid constitutional problem.
Here, there was enough of an “intelligible principle” to avoid it.
o American Trucking Assoc. (D.C. Cir. 1999)
 Background: EPA statute—make standards about ozone quality
“requisite to protect public health” with regards to “severity of
effect, certainty of effect, and size of population affected.”
 Holding: D.C.C. said no intelligible principle here but EPA has
opportunity to create a determinate standard on remand. AKA it
can develop the “rough equivalent of a generic unit of harm that . .
. accounts for the population affected, severity, and probability.”
Agency could use a limiting construction of the statute to provide

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 an intelligible principle that would otherwise be unconstitutional
under non-delegation doctrine. [overruled in Whitman]
o Whitman (SCOTUS decision of Am. Trucking; 2001)
 Background: Statute—EPA must set standards “requisite” to
protect the American people.
 Holding: There IS an intelligible principle here; “requisite” means
sufficient but not necessary. This statute is unambiguous because it
is indistinguishable with past precedent. Congress has all
legislative powers and the Constitution does not permit “delegation
of those powers.” Congress must give an intelligible principle for
agency to conform to.
 Thomas Dissent—not relying on earlier cases; want to
reconsider allowing any degree of policy judgment.
 Stevens Concurrence—this is legislative power and that’s
ok (Court has never held this)
o Amalgamated Meat Cutters v. Connally (DDC 1971)
 Although there was a “blank check” grant of power, the delegation
of the Economic Stabilization Act was constitutional because
“broad equity” standard would limit the discretion of the agency,
as would “self-narrowing” (which is now bad law under American
Trucking)
B. LEGISLATIVE CONTROLS
 Legislative veto—invalidated in Chadha
o This was Congress’s preferred lever
o SCOTUS: need to have bicameralism and presentment under Constitution,
so this isn’t constitutional
 Dissent—Cong only keeping a little power they delegated
 Appropriations (power of the purse)
o BUT hard to keep up with agencies and you need to add to legislation
 Write specific legislation
o BUT need to constantly update, doesn’t apply to past enactments, and
don’t have the expertise
 Oversight hearings
o Call in agency heads and scold them
 Require congressional approval before regulations have effect—REINS Act
o Need to do this if over $100 million economic impact
o Time consuming
 Create deeper legislative history to explain purpose
o Easier to put in that to write legislation
o Some legislative history has bigger effect
 Congressional Review Act (“CRA”)

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 o Permits Congress to repeal regulations within 60 legislative days through
joint resolution of disapproval (rare)
o Still retrospective
 CASES
o INS v. Chadha (S. Ct. 1983)
 Facts: AG decided not to deport Chadha under delegated authority.
Congress says no, must be deported.
 Holding: struck down the legislative veto
 One house vetoing the use of agency power is
unconstitutional. Any action by one house must be
approved by the other house and signed by the President.
C. EXECUTIVE AND AGENCIES
i. Officer Appointments
a. Appointments Cl.  Art II, sect 2, cl 3: “[The President] shall nominate, .
. . with the advice and consent of the Senate . . . Officers of the United
States . . . . But Congress may vest the appointment of such inferior officer
. . . in the President alone, in the Courts of Law, or in the Heads of
Departments.”
 Categories
o (1) Principal Officers—president must appoint and Senate must
confirm.
o (2) Inferior Officers—if Cong legislates, can be appointed by either
President, courts, or Heads of departments
 “Heads of departments” means at least some connection with
Exec branch. Buckley
 Multimember bodies may constitute a “head of department” in
which Congress may vest the appointment power over inferior
officers. Free Enterprise Fund. A department is a “separate
allotment or part of business; a distinct province, in which a
case of duties are allotted to a particular person.”
o Mere employees—not covered by clause
 House CANNOT be involved in appointing officers; if they
are, not officers.
 Principal v. Inferior Officers: Consider (1) the Morrison factors and (2)
whether the person has a superior under Edmund
o (A) Morrison factors
 (1) The person is removable by a higher executive branch
official;
 (2) The person is empowered by the statute to perform only
certain limited duties;
 (3) The person’s office is limited in jurisdiction;
 (4) The person’s office is limited in tenure.

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 o (B) Having a superior is a necessary but not sufficient condition to be
an inferior officer; if no superior, then the officer is a principal officer.
Edmond. In Broadcasting System, the D.C. Circuit laid out three
factors relevant in determining whether a person has a superior:
 (1) subject to substantial supervision or oversight;
 (2) removable at will;
 (3) decisions subject to reversal by another
o *Agency must have a principal officer making decisions for the
department*
 Recess Appointments: Art. 2, sect. 2, cl. 3 when Senate is in recess,
President can appoint for vacancies (and can serve until the end of the next
session). However, the Senate is in session whenever it says it is. Noel
Canning. Intersession appointment of judges is permissible. See Evans.
 Officer Removal: The Constitution places the power to remove officers in the
President. Decision of 1789. “[T]he real question is whether the removal
restrictions impede the President’s ability to perform his constitutional duty,
and the functions of the officials in question must be analyzed in that light.”
Morrison. Following Morrison, the general rule is that the President can
remove executive officials for any reason and independent officials for good
cause.
o Qualifications
 The imposition of a “good cause” standard exercised by the
AG does not unduly trammel the Executive authority Morrison
 Multilevel good cause protection is impermissible under
Article II Free Enterprise (Peek-a-boo case)
 Congress cannot remove executive officers. Bowsher. An
official is an executive officer when he or she can decide how
or when to take action. Bowsher.
 Congressional powers post- Bowsher
 Can limit agencies but cannot have any hand in firing
agency heads
 Can limit when President can fire other officials (make
it “for cause”)
 Can initiate impeachment
 Can choose whether to create agencies at all.
o Directive Authority. The President’s authority to issue directives arises from
three separation bases: (1) constitutional authority; (2) statutory authority; and
practical considerations. These are always written in the form of a request but
operate as a mandatory order in practice.
 What power does the president have over independent agencies?
 FCC v. Fox (2009)—independent agencies sheltered from the
President.
 Can control budget requests through OMB

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  Seems like they can’t send orders (and say they will be fired if
not followed)—mostly write memos as a request
o Supervisory Authority. The OMB coordinates agency rulemaking to ensure
that regulations are consistent with applicable law. It shall provide guidance to
agencies and assist the President. Courts have said little about the legality of
OIRA review, and all the relevant EOs state that their requirements apply only
“to the extent permitted by law.”
 Visions for OIRA: centralized review of agencies (Reagan; CBA
reviews done through OMB); principles under Clinton: qualitative and
quantitative measures, benefits justify the costs—under Reagan they
had to “outweigh”); Obama order addresses equity, human dignity and
distributive impact
 “Significant Regulation”: OIRA only reviews significant reg (impact
over $100 million); also goes through OMB
 BUT takes all meeting requests
 Kills regulations; significant in making changes
 Takes a really long time to review
 OIRA functions:
 Ensure that rulemaking agencies can receive the specialized
information held by diverse actors within the Executive
 Promote a well-functioning process of public comment
o Sees itself as a convener for agencies to coordinate
 Critiques
 Too much focus on costs
 Concern about it being a potential violation of separation of
powers.
o Could be countermanding stuff that Congress wants
 Process is long
o Independent agencies—conventional distinction: heads of those agencies
have for-cause protection from firing. Tend to have multimember boards with
heads from separate parties with set, staggered terms

 CASES
o Buckley v. Valeo
 Background—members of Commission appointed by President
and confirmed by Senate and House; statutory language “if
they have significant authority pursuant to laws of U.S.”
 Holding—Appointment cl. applies; issue is if you’re an officer.
Took away powers. Result—can do investigations of
informative nature; can’t issue rulemakings, have hearings,
institute actions, etc.; no direct legal consequences of actions.
House has NO role in appointing officers.
o Morrison v. Olson (1988)

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  Facts: Independent counsel created by the Ethics in
Government Act. Designed to insulate independent counsel
from the DOJ. Selected by 3 judge panel
 Issue: Is she an inferior or principal officer?
 Holding: Inferior because of above characteristics
o Edmond v. US (1997)
 Holding: “Whether one is an inferior officer depends on
whether he has a superior”
 Doesn’t overrule Morrison
o NLRB v. Noel Canning ( 2015)
 Facts: Obama couldn’t get appointments through; Senate didn’t
technically go into recess (held pro forma sessions). Obama
made appointments and argued the Senate wasn’t actually in
session.
 D.C. Cir held that there is only one recess between Senate
sessions and the President can only fill the vacancy arising
during that recess.
 SCOTUS: The text is ambiguous; relied heavily on historical
practice. Every president has made recess appointments (that
did not merely arise during the recess) and those appointments
have been made during other recesses, not just the recess
between Senate sessions. BUT Senate is in session when it says
it is. The appointment is unconstitutional.
o Myers v. U.S. (1926)
 Facts: Myers appointed postmaster and Wilson removed.
 Holding: Article II’s vesting clause gave power to the President
to remove subordinates. Need unity and coordination of
executive branch (very pro-president).
o Humphreys Executor v. U.S. (1935)—Myers holding was really dicta;
President can remove officers but not if there is a quasi-legislative,
quasi-judicial power
o Morrison v. Olson (1988)
 Facts: Independent Counsel Act permitted group of three judges
to name independent counsels. The Act allows the AG to remove
them for good cause. Court held that this was constitutionally
permissible because the President has control over the AG, and
thus does not interfere with his ability to perform his
constitutional duties.
 Focus on whether the limitation on President’s ability to remove
will impede upon/interfere with his ability to “take care” that the
laws are faithfully executed. Abandons Humphreys decisions
about quasi-legislative view.

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 
Scalia dissent—this is taking power away from the president; in
favor of unitary executive
o Free Enterprise Fund v. PCAOB (peek-a-boo case)
 The Court held that multilevel protection is unconstitutional
because it interferes with the President’s ability to take care
that the laws are enforced. The SEC, which appointed PCAOB
members, could not remove a PCAOB Member. The President
could not remove SEC Commissioners without good cause.
This left the President powerless to intervene.
o Bowsher v. Synar (1986)
 Holding: “[W]e conclude that Congress cannot reserve for
itself the power of removal of an officer charged with the
execution of the laws except by impeachment.”
 Comptroller was executive official because he executed
a provision of the statute. Thus, Congress can’t fire
him.
D. AGENCY STRUCTURE
 Rules
o Bias Caused by Combination of Functions: The issue is that one person can
both initiate the hearing process and serve as the ultimate decision-maker in
the resulting proceeding. A “fair trial in a fair tribunal is a basic requirement
of due process.” The case law generally rejects the idea that the combination
of judging and investigating functions is a denial of due process. Withrow.
Separation of functions within agencies included in statutes but not
constitutionally required.
 Examples:
 a valid due process claim existed when the mayor adjudicated a
controversy while also having a direct economic stake in the
proceeding, since he received his payment through fees.
Tumey.
 a valid due process claim existed when the examining board
was all sole practitioners (optometrists) while most
optometrists worked in corporate forms; this permitted them to
wipe out half the competition in one swipe. Gibson.
 a valid due process claim existed where a school board
discharged a superintendent after four members of the board
expressed hostility toward the superintendent, and the
superintendent had exposed serious wrongdoing by each of
them. Valley.
 no due process claim existed where fines were used to
reimburse an agency for some of its enforcement costs because
no official’s salary depended on the fines and the sums

10
 collected were tied to expenses incurred rather than size of
penalty. Marhsall.
 no due process claim existed where an increase in the board’s
jurisdiction would increase its budget. Alpha Epsilon.
 Financial Interests. Those with substantial pecuniary interests in legal
proceedings should not adjudicate those disputes. Gibson. The
financial stake need not be as direct or positive as it appeared in
Tumey. At some point, it becomes too attenuated to matter/make a
difference.
o Separation of Functions within Agencies: Statutes and regulations create the
separation of functions within agencies.
 Heads of Agencies: Can perform all three traditional functions—
legislative, judicial, and executive.
 Administrative Law Judges (ALJs) and Agency Judges (AJs.)
Admin Law Judges (ALJs) Admin Judges (AJs)
- APA §554: removed from rest of - Ad hoc
agency - They can be supervised and
- function a lot like Article III judges hired by the agency
- head of an agency can reject the - Less of all the indicia of
ALJ’s decisions (hold over from independent that an ALJ has
Landis’ idea of expertise housed in - Not removed from agency
the agency) control
- under Edmund, if ALJ is not
reviewed by the agency head, then
they are principal officers and must
be nominated by the President and
confirmed by the Senate
- DC Cir case: Are ALJs inferior
officers or mere employees? Cert
petition will likely be granted.
Freytag v. IRS.
- ALJs can only be removed for cause

§ 554 Adjudications specs, p. 1007

 Questions on Regulation Itself: Rationales for regulation have shifted

over time.
o Noll: economic regulation doesn’t succeed in protecting
consumers but made more monopolies/good for large entities.
o Sunstein: Command and control regulation creates
inefficiencies (don’t tell people exactly how to comply). Focus
instead on ends rather than means.
o Breyer: Overprotection is undesirable because money cannot
be spent to alleviate other social problems that yield a greater

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 return for society. The public has irrational fears and agencies
are too responsive to such fears. Indeed, agencies often exhibit
(1) tunnel vision, (2) random agenda selection, and (3)
inconsistency.
 Main points:
 (1) Behavioral responses may increase risk of
harm following regulation;
 (2) Act of compliance might impose risks
 (3) The cost of compliance might have negative
impacts (wealthier v. healthier)
 Why have standards at all?
o Disclosure: massive info asymmetries between experts and
public
o Paternalism: people shouldn’t be allowed to make these
decisions; either they don’t understand or they do but the
government still doesn’t want them to do it.
o Biases: people have cognitive biases and tend to be optimistic
about risks/discount future self
o Bargaining power: might be too desperate to bargain
o Externalities: individuals impose costs to society as a whole
 Alternatives for Regulatory “Failure”
o Deregulation
o Mismatch theory—need to right tool to meet the problem
o Risk-based priority assessments—regulate what is a real risk
and not what people are worried about
o Economic incentives—ex. cap and trade
o Default rules—creating nudges for people (most won’t change
from default)
o Sunset legislation—have to revisit regulation (high costs)
o Transparency
 Ex: FOIA—enormous diff in opinion on how valuable
this is
 Ex: Government in the Sunshine Act
 Multimember commissions can’t meet unless
there is public notice (concern about
deliberating behind closed doors)
 Essentially means that commissions don’t meet
and everything is done at the staff level; law has
killed deliberation
 Cost-Benefit Analysis
o Concerns:
 (1) The framework is wrong: ignores important
considerations and value

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  (2) Methodology is flawed: difficult to quantify a
human life; focus on willingness to pay versus
willingness to accept versus revealed preferences; what
do we do about costs of irrationality in the public?
 (3) What do we do when cost and benefit estimates are
all over the place? Industry will overestimate costs
 (4) Data aren’t reliable and are too subject to
manipulation
o EO on Reducing Regulation and Controlling Regulatory Costs
(1/30/17)
 (a) every new regulation need to eliminate two regs
 Just focusing on costs—any new costs must be offset
by eliminating costs with two prior regs

III. PROCEDURAL REQUIREMENTS IN AGENCY ACTIONS

A. AGENCY ACTIONS
 RULES
o Rulemaking Verses Adjudication. For constitutional purposes, look at (1)
generality* and (2) prospectivity to determine whether the agency engaged in
rulemaking or adjudication. See Am. Airlines (rulemaking because no
individual action). [*SB: Generality more important]
 The more general and prospective it is rulemaking
 The more specific and retrospective it is adjudication
 APA Definitions:
 “Adjudication”. Adjudication is the catch-all for everything
that falls outside rulemaking. For instance, an “order” always
results from adjudication. § 551(7). The definition involves
many management and administrative functions that would not
be regarded as adjudication in a conventional sense and do not
trigger due process requirements.
 “Rule Making”. This “means agency process for formulating,
amending, or repealing a rule.” § 551(5).
 “Rule”. “[T]he whole or a part of an agency statement of a
general or particular applicability and future effect designed to
implement, interpret, or prescribe law or policy . . . or practice
requirements of an agency . . . .” § 551(4).
 Words “or particular” generally ignored.
 Small Class Exception in RM. Procedural due process triggers if a
small group of individuals is particularly affected by a general
directive that relies on individual facts. Londoner.
o Agency Discretion. Agencies are free to choose whether to address an issue
through either adjudication or rulemaking. Heckler. Even if a statutory
scheme requires individualized determinations, decision-makers have the
authority to rely on rulemaking to resolve certain issues of general
applicability, unless Congress clearly expressed an intent to withhold that
13
 authority. Am. Hospital. But the promulgated regulations must fully
implement the entitlement. Sullivan (childrens’ SSI entitlement).
o Procedural Rule Sources:
 organic statute (**Controls if there is a conflict with the APA)
 agency itself
 APA (the default)
 federal common law, i.e., Chenery
 constitutional due process
o Residual Act. The APA is a residual Act. Organic statutes govern if on point.
o Procedural DP. When agencies act like legislatures and pass rules, there are
no procedural due process constraints. Public has no right to appear before the
agency. Londoner.
 CASES
o Londoner – The Denver City Council taxed properties along the street for the
cost of paving. No state court could review this decision. The statute required
notice and opportunity for written objections. The Court held that, in the tax
context, due process requires that taxpayers must have a right to be heard at an
oral hearing before the tax takes effect, especially when no court can review
the decision.
o Bimetallic – Plaintiffs filed suit after a Colorado Board put in force an order
increasing the valuation of all taxable property in Denver for 40%. The Court
held that the Constitution does not impose any procedural requirements when
either legislatures or administrative agencies adopt general laws or rules.
B. UNIVERSAL APA RESTRICTIONS
 The following provisions apply to rulemaking and adjudication across the
board:
o a person compelled to appear before an agency is entitled to counsel or other
qualified representative, § 555(b), and can bring counsel or other
representative to agency proceedings, § 555(b).
o agencies shall conclude presented matters “within a reasonable time.” §
555(c).
o sanctions and substantive rules cannot be issued “except within jurisdiction
delegated to the agency and as authorized by law.” § 558(b).
o agency subpoenas authorized by law shall be issued . . . on a statement or
showing of general relevance and reasonable scope of the evidence sought. §
555(d).
o prompt notice shall be given of the denial . . . of a . . . request of an interested
person made in connection with any agency proceeding. . . . the notice shall be
accompanied by a brief statement of the grounds for denial. § 555(e).
o nothing in the APA “limit[s] or repeal[s] additional requirements imposed by
statute or otherwise recognized by law.” § 559.
o licenses require formal proceedings in accordance with §§ 556–57; agencies
can withdraw licenses without “notice by the agency in writing of the facts or
conduct which may warrant the action” and “opportunity to demonstrate or
achieve compliance with all lawful requirements”; but an agency need not

14
 provide notice or opportunity if willfulness, public health, interest, or safety
requires otherwise. § 558.
C. FORMAL APA REQUIREMENTS
 Hearings. § 556. This Section applies when either 553 or 554 require hearings.
§ 556(a). It also triggers § 557.
o Presiding Parties. § 556(b). There shall preside over the taking of
evidence:
 the agency
 one of more members of the body which comprises the agency; or
 one or more ALJs.
o Presiding Party Powers. § 556(c). Agency employees may:
 administer oaths and affirmations;
 issue authorized subpoenas;
 rule on offers of proof and receive relevant evidence;
 take depositions when the ends of justice are served;
 regulate the course of the hearing;
 hold conferences for settlement of simplification of issues;
 inform parties on alternative dispute resolution;
 require attendance at any conference;
 dispose of procedural requests;
 make or recommend decisions;
 “take other action authorized by agency rules consistent with this
subchapter.”
o Burden of Proof. The proponent of a rule or order has the burden of proof.
§ 556(d).
o Acceptable Evidence. Any evidence is admissible, but the agency as a
matter of policy shall provide for the exclusion of “irrelevant, immaterial,
or unduly repetitious evidence.” § 556(d).
o Sanctions. A sanction cannot be issued except on consideration of the
whole record or that part cited by a party. § 556(d).
o Record. The transcript of testimony and exhibits, together with all papers
and requests filed in the proceeding . . . shall be made available to the
parties. § 556(e).
 Decisions. § 557. This Section triggers when a hearing is required under 556.
o Initial Decision. A qualified employee (employee who presided over
hearing) shall initially decide the case, unless the agency . . . the entire
record to be certified for decision. § 557(b).
o Appeal. On appeal, the agency has the same powers as in the initial
decision, except as it may limit the issues on notice or by rule. § 557(b).
o If ¬ Presiding Over Hearing. If an agency makes a decision without
having presided over the evidentiary hearing, the presiding employee shall
first recommend a decision, except as to licenses. § 557(b). But this
procedure can be omitted if due and timely execution of agency functions
so requires. § 557(b)(2).
o Opportunity Pre-Decision. Before a decision, parties must have a
reasonable opportunity to submit:

15
  proposed findings and conclusions;
 exceptions to the decisions or recommended decisions;
 supporting reasons for the exceptions or proposed findings;
 The record shall show the ruling on each finding, conclusion, or
exception presented.
 All decisions . . . shall include a statement of:
 findings and conclusions, and the reasons or basis on all
material issues of fact, law, or discretion presented on the
record; and
 the appropriate rule, order, sanction, relief, or denial.
o Ex parte Interference. § 557(d).
 no interested person outside the agency shall make or knowingly
cause to be made to any member of the body comprising the
agency, administrative law judge, or other employee . . .
reasonably expected to be involved in the decision process . . . an
ex parte communication relevant to the merits. § 557(d)(1)(A).
 those involved in the decision cannot make or knowingly cause to
be made any ex parte communication relevant to the merits of the
proceeding to any interested person outside the agency.
§ 557(d)(1)(B).
D. COMMON LAW REQUIREMENTS
 Post Hoc Rationalizations. Agencies can only invoke justifications in court that the
agency actually relied upon in taking the action because judges must know what
considerations animated the decision. Chenery I.
 Agency Choice. Agencies can choose whether to act through rulemaking or
adjudication, and have the authority to make law through either route under their
organic statute. Chenery II. Even adjudications have retroactive effect, because an
adjudication must take effect at some point. Id. (although this has been scaled back a
bit by the D.C. Cir., which uses certain considerations to determine if retroactivity in
adjudication is allowed.) If the agency go through adjudication, must follow DP
limitations. Id.
 Retroactivity in Rulemaking. “Retroactivity is not favored in the law. Thus,
congressional enactments and administrative rules will not be construed to have
retroactive effect unless their language requires this result. By the same principle, a
statutory grant of legislative rulemaking authority will not, as a general matter, be
understood to encompass the power to promulgate the retroactive rules unless that
power is conveyed by Congress in express terms.” Bowen.
 Retroactivity in Adjudication (D.C. Circuit). “[C]ourts have not infrequently
declined to enforce administrative orders when in their view the inequity of
retroactive application has not been counterbalanced by sufficiently significant
statutory interests.” Wholesale Dept. There are five factors:
 (1) whether the particular case is one of first impression,
 (2) whether the new rule represents an abrupt departure from well
established practice or merely attempts to fill a void in an unsettled
area of law,

16
 
(3) the extent to which the party against whom the new rule is applied
relied on the former rule,
 (4) the degree of the burden which a retroactive order imposes on a
party, and
 (5) the statutory interest in applying a new rule despite the reliance of
a party on the old standard.
 Arizona Grocery Rules:
o agencies should almost always be entitled to change prior rules so long as this
occurs through rulemaking. Arizona Grocery.
o Agencies can change previous adjudications through a rule but not vice versa.
o Stare decisis in adjudication: agencies can change rules developed in
adjudication so long as the agency explains any change in the second
adjudication; legislative rules cannot be changed through adjudication.
Arizona Grocery. The explanation need only be reasonable.
o rulemaking is only alterable through rulemaking. Arizona Grocery.
o Agencies free to grant additional procedural rights in the exercise of
discretion, but reviewing courts are generally not free to impose them if the
agency has not chosen to grant them Vermont Yankee
 CASES
o Chenery I – The SEC approved a stock reorganization plan with everyone
except for the Chenerys, whom the SEC cut out although Chenerys followed
the law. It justified this on grounds that their precedents required this because
of a longstanding equitable principle of not letting management buy shares
during reorganization. However, the SEC had no rules or cases on this. Court
ruled that agency cannot rely on post-hoc rationalizations and can only invoke
rationales made at the time of the decision. Court said that on remand, the
SEC should promulgate a general rule that isn’t retroactive.
o Chenery II—SEC didn’t follow Court’s advice and just put expertise rationale
into reason for decision. The Chenerys argued that the SEC must make a rule
to stop them. Supreme Court held that the agency gets to choose whether to
proceed through RM or adjudication if it has authority to do both.
E. RULEMAKING
 General Rule. An agency can engage in rulemaking only to the extent that its organic
statute authorizes it to do so. But in many cases, the organic statute contains a catchall
provision authorizing the agency to issue such regulations as may be necessary. See
National Petroleum.
 Rulemaking v. Adjudication
Formality Informal
Rulemaking §553(a), (b), (d), €, 556, Informal (notice and
557 comment) under 553
Adjudication Formal adjudication under Informal (almost no APA
554, 556, 557 procedures)
 APA Overview
o §553 Rulemaking

17
 When is it formal? (c) “When rules are required by statute to be made
on the record after opportunity for an agency hearing, sections 556 and
557 . . . apply.”
 What does RM require?
 (b) Notice of proceedings
 (c) Opportunity for interested parties to participate with or
without an opportunity for oral presentation
 (c) Agency considers what is presented and has a “concise
general statement of basis and purpose”
 (d) effective in no less than 30 days
o §§556 and 557 Formal Rulemaking
 (b) presiding officer (generally an ALJ)
 (c) presiding officer has general control of the proceeding
 (d) parties entitled to present evidence, present rebuttal, and cross
examine
 (e) decision must be based on the record
 Due Process. Agencies are exempt from due process constraints when they issue
rules like legislatures. Bimetallic.
 Formal Proceeding Triggers. Formal RM triggers only when the organic statute
requires that rules happen “on the record after . . . agency hearing.” Florida East
Coast; § 553. (In FL case, not enough it was “after hearing”) The statute must
literally state the magic words: the statutory language is “virtually a touchstone test.”
Mobil Oil. If triggered, then §§ 556–57 also apply.
 Qualifications:
o agencies can limit the extent of a “hearing” through rulemaking. Texaco.
 So, agencies can make adjudication less meaningful through RM
o agencies can decide what a “hearing” is through rulemaking. Texaco.
o agencies may determine issues through rulemaking that do not require case-
by-case consideration even if issues important to result. Heckler (SSDI grid).
Some adjudicative facts might require fact-finding. See Zerbly.
i. FORMAL RULEMAKING
o General APA Rules. Formal rulemaking requires the procedures in § 553
as well as §§ 556 and 557.
 General Requirements:
 Notice. Notice of proposed rulemaking shall be published
in the Federal Register, unless . . . personal service or
actual notice. § 553(b). Notice shall include:
o (1) a statement of time, place and nature of
rulemaking;
o (2) reference to the legal authority;
o (3) terms or substance of the proposed rule or a
description of the subjects.
 Opportunity. Interests persons shall have an “opportunity
to participate in the rulemaking through submission of

18
 written data, views, or arguments, with or without
opportunity for oral presentation.” § 553(c).
 Concise Statement. After consideration, agencies shall
incorporate into the rules adopted “a concise general state
of their basis and purpose. § 553(c).
 Publication Date. The required publication or service of a
substantive rule must be made within 30 days before its
effective date. § 553(d).
ii. NOTICE & COMMENT RULEMAKING
o Perks of informal rulemaking: in formal, agency can only review ALJ’s
docket; informal, can rely on docs they generate themselves (not a closed
record); don’t have to reveal communications with other federal officials
o Additional Procedures. Courts cannot require procedural requirements
above those granted by the APA, “absent constitutional constraints or
extremely compelling circumstances” Vermont Yankee.
o Notice and Comment Requirements. In reviewing the record in notice
and comment rulemaking, the catch-all arbitrary and capricious standard
applies.
 Notice. Notice of proposed rulemaking shall be published in the
Federal Register, unless . . . personal service or actual notice.
§ 553(b). Notice shall include: (1) a statement of time, place and
nature of rulemaking; (2) reference to the legal authority; (3) terms
or substance of the proposed rule or a description of the subjects.
In the notice, the agency must include the technical and scientific
data on which the agency relies. Portland Cement. Agencies must
show their hand at the time they promulgate NPRM disclosing as
much relevant data as they currently possess. Id. Must publish
NPRM that provides adequate notice to afford interested parties a
reasonable opportunity to participate in the RM process. Florida
Power & Light
 Research. If failure to disclose scientific research actually
prevented presentation of relevant comments, then the
agency failed to consider all factors under hard look
review. Nova Scotia Foods. Agencies must disclose the
evidentiary and analytical documentation relied on in
proposing a rule to permit informed and effective comment.
Chamber of Commerce. But an agency may rely on
supplementary data that expands and confirms information
contained in the proposed rulemaking, so long as no
prejudice is shown. Kern County.
 Logical Outgrowth. The final rule must be a logical
outgrowth of the proposed rule. Long Island Care. This
turns on whether were put on fair notice, i.e., the regulated
entity “would have known that an issue in which they were
interested was ‘on the table’ and was to be addressed by a

19
 final rule.” Id. Standard is from the perspective of a
reasonable member of the regulated class.
o Qualifications:
 inconsistency – courts are inconsistent in
where exactly they look to determine the
adequacy of notice. “Logical outgrowth of
its notice.” Covad Communications.
“Logical outgrowth of the proposed rule.”
NRDC.
 related proceedings – “[We look to see if]
the final rule was a logical outgrowth—not
simply of the proposed rule—but of the
hearing and related procedures during the
notice and comment period.” National
Mining Ass’n.
 harmless error – if final rule is not a
“logical outgrowth,” the error is harmful
unless “the agency offers persuasive
evidence that all possible objections to its
final rules had already been given sufficient
consideration. Shell Oil.
 other comments – A non-commenting
stakeholder is not expected to have learned
that certain issues are on the table by reading
others’ comments. Fertilizer Inst.
 Opportunity. Interests persons shall have an “opportunity to
participate in the rulemaking through submission of written data,
views, or arguments, with or without opportunity for oral
presentation.” § 553(c).
 Concise Statement. After consideration, agencies shall incorporate
into the rules adopted “a concise general state of their basis and
purpose. § 553(c).
 Publication Date. The required publication or service of a
substantive rule must be made within 30 days before its effective
date. § 553(d).
 Post-Comment Docketing. The issue is whether post-comment
period discussions must be docketed in the rulemaking record.
 Oral Communications. No blanket requirement that post-
comment oral communications be docketed. But organic
statutes can create “fair inference[s]” that “summaries of . .
. oral communications be prepared.” Costle.
 Presidential Communications. Some conversations between
the President or his Staff might require docketing to ensure
due process, but where the President himself is involved the
courts should tread with “extraordinary care” given Article

20
 II considerations. Costle. Costle noted three circumstances
in which these conversations might be docketed:
o (1) conversation directly concerns the outcome of
adjudications;
o (2) no inherent executive power to control the rights
of individuals in such settings;
o (3) where a statute specifically requires that
essential “information or data” be docketed.
 Legislative Communications. It is proper for congressional
representatives to represent their constituents before
agencies engaged in notice and comment rulemaking.
Costle. But undue congressional interferences existed when
a “power member of Congress threatens to cut off funding .
. . [if certain agency action is not taken].” Volpe.
 Hard and Soft Data. Costle creates a distinction between
hard data and analysis, and soft arguments of policy and
politics. Hard data must be on the record; soft data need
not be on the record.
o General Rule, Exceptions. Agencies put a premium on avoiding N&C
RM to avoid responding to comments due to hard look review. Only the
good cause exception excludes notice and comment for substantive rules
(but a loss on good cause simply means the agency must go through
N&C). A substantive rule is one that either has (1) present binding effect
or (2) restricts agency discretion. American Bus. Agency exceptions
should be construed to preserve agency flexibility in dealing with limited
situations where substantive rights are not at stake. American Hospital.
RULES PASSED UNDER AN EXCEPTION RECEIVE SKIDMORE
RATHER THAN CHEVRON DEFERENCE BECAUSE THEY LACK
THE “FORCE OF LAW” UNLESS THE GOOD CAUSE EXCEPTION.
 The notice and comment procedures are inapplicable if:
 (1) a military or foreign affairs function. § 553(a)(1).
 (2) a matter relating to agency management or personnel.
§ 553(a)(2).
 (3) interpretive rules. § 553(b)(3)(A).
 (4) general statements of policy. § 553(b)(3)(A).
 (5) rules of organization, procedure, or practice. §
553(b)(3)(A).
 (6) good cause . . . that notice and public procedure . . . are
impracticable, unnecessary, or contrary to the public
interest. § 553(b)(3)(B).
 Distinction.
 Organic act—will trump APA rules; can make different
procedures but still limited by Constitution (like
promulgating regulations in certain time period)

21
  substantive rules – rules that grant rights, impose
obligations, or produce other significant effects on private
interests; formally and legally binding.
 interpretive rules – rules that merely clarify or explain
existing law or regulations. These rules are not binding and
do not cabin agency discretion.
 Procedural rules—do not affect the rights or interests of
parties, though they may govern the manner in which
parties assert their rights or interests.
 Appalachian Power – If the agency acts like the document
is controlling or treats it as a legislative rule, then the
document is binding for all practical purposes.
o The key is if it spells out pre-existing duty (then it is
interpretive and not a new rule). Look to see if its an
aggressive interpretation of a pre-existing law. If
they are treating it like a binding norm, need N&C.
 Exception 3, Interpretive Rules. These explain rules that merely
clarify or explain existing law or regulations. Ask whether the
purported interpretive rule has “legal effect.” Am. Mining.
 Am. Mining Legal Effect Test: If the answer to any of the
questions below is yes then the rule is legislative:
o (1) whether, without the rule, there would not be an
adequate legislative basis for enforcement action or
other agency action;
o (2) whether the agency published the rule in the
Code of Federal Regulations;
o (3) whether the agency explicitly invoked its
general legislative authority;
o (4) whether the rule effectively amend a prior
legislative authority.
 Precedents:
o Am. Mining – The Mine Safety Admin. issued
program policy letters that stated chest X-rays over
a certain opacity would be considered a diagnosis
that the employee had an illness. The Court held
that this was a legislative rule.
o Jerri’s Ceramic – The agency limited an exception
to “dangerously small” by ruling that the exception
only applied to “pieces.” The Fourth Circuit held
that this rule was legislative as “it radically changes
a previous longstanding position.”
o Hoctor – The agency issued an internal memo that
perimeter fences must be eight-feet tall for
“dangerous animals.” The Seventh Circuit held that
this was a legislative rule because the “8 foot”
choice was arbitrary give the statutory language.

22
 o Perez v. Mortgage Bankers: not required to do
N&C for changing interpretive rule
 Exception 4, General Policy Statements. Statements of policy
lack (1) present binding effect and (2) do not restrict agency
discretion. American Bros. The key question is whether the
agency can decide the other way despite the statement; if it cabins
agency discretion. Courts have come out in many different ways
on this.
 Precedents:
o Community Nutrition Institute – The FDA
established action levels. It required entities to
obtain exceptions to them. It stated that they
established a binding norm. The Court held that
action levels have a present binding effect based on
the agency’s conduct with respect to those rules.
o Telephone Association – The agency applied the
“guidance” in 299/300 cases, which led the Court to
hold that the agency treated the guidance more like
a substantive rule. Thus, notice and comment
procedures were necessary.
o Shalala – The Court held that the issuance of nine
general factors did not require notice and comment
because the list was non-exclusive. It also stated
that the rule did not “draw a line in the sand that,
once crossed, removes all discretion from the
agency and its enforcement personnel.”
 Exception 5, Procedural Rules. The notice and comment process
does not apply to interpretive rules, and receives arbitrary and
capricious review. Perez. “Where nominally procedural rules (1)
encode a substantive value judgment or (2) substantially alter the
rights or interests of regulated parties . . . the rules must be
preceded by notice and comment.” Air Transport.
 Precedents:
o Air Transport – The FAA issued “Penalty Rules”
that establish “procedures” for adjudication of civil
penalty actions. The Court held that notice and
comment is necessary because the procedural rights
affected the rights of regulated parties, not merely
internal agency operation.
 Exception 6, Good Cause. Where the agency for good cause
finds (and incorporates the finding and a brief statement of reasons
therefore in the rules issued) that notice and public procedure [] are
impracticable, unnecessary, or contrary to the public interest. If a
good cause exception likely exists, issue the rule through an
interim final rule so that the binding effect is immediate.

23
 Sometimes skip interim final rule and go to direct final rule (never
challenged)
 Qualifications:
o Chevron does not apply when agencies raise the
good cause exception. Sorenson. The review occurs
de novo.
 Situation Triggers:
o agency imposes new requirements that entities
might evade if notice is provided. DeRieux.
o agency must meet a statutory deadline assigned by
Congress. Clay Broadcasting.
o technical amendments, but can trigger notice and
comment as in Utility Solid.
 **Easiest for agency to get exception here usually
because there is some urgency
 If agency can’t get exception: 2 choices
 (1) promulgate rule through N&C
 (2) promulgate rule without N&C which isn’t legally
binding
o Interim Final Rules. This is where an agency issues and rule with a
statement of “immediate effect.” The issuance also serves as notice for a
final rule that eventually follows. But such rules must satisfy the good
cause exception before they have binding effect, or else the agency must
go through notice and comment rulemaking. They can be helpful in that
some are never challenged because no one cares.
o Negotiated Regulations. This is where an agency selects a facilitator to
convene meetings of stakeholders, who then come up with a final, agreed-
upon rule, including the rule’s specific language. Congress expressly
authorized this in the NRA. Supplements the 553 process; still go through
NPRM and comment process, but this is no longer where the action is
because everyone important has already commented; will be able to go
through 553 quickly. Problems: Who is at the table; what kind of
participation is appropriate; hasn’t produced results people wanted
o Results of added procedure: Agencies put everything in NPRM; huge
amount done before the 553 process; rulemaking process now a rule
adopting process. Agencies now issue Advanced NPRM or Notice of
Inquiry to get feedback to issue NPRM OR just talks to industry. The main
innovation of the APA was to open up process to public/reduce industry
capture, but big decisions made before N&C RM.
o Potential changes: E-rulemaking—let people have greater involvement:
studies have shown public comments can make a difference while others
show no change at all (even if 1 million comments); might be important
just for legitimacy in the eyes of the public even if agency doesn’t
consider comments; people might also be sending signals to President or
Congress by commenting; can have hybrid procedures in the organic act
which would control.

24
 o Guidance documents: OMB—make sure it’s just guidance; effect of this
Bulletin is to convert significant guidance documents into legislative rules
by adding more procedures.
 CASES
o Notice –
 Nova Scotia Food – The FDA failed to create a record for notice
and comment rulemaking concerning botulism in smoked fish.
Interested parties were thus uniformed of the scientific data that the
agency relied upon in issuing the rules. The Court held that an
agency must notify interested persons of the scientific research
upon which the agency relied to satisfy §553. In order for parties to
make comments, there needs to be a meaningful process and
disclosure of the data agency relied on
 Long Island Care – Need to give people basic notice so they
understand what the agency is actually considering and the realistic
possibilities
o Authority –
 National Petroleum (catch-all authorization) – Section 6(g) of
the FTC’s organic statute stated that it could “make rules and
regulations for the purpose of carrying out the provisions.” The
Court held that agencies can engage in substantive rulemaking
under such catch-all clauses.
o Formality –
 Florida East Coast – The Court held that “after hearing” does not
trigger the formal hearing requirement because it is not tantamount
to “on the record after opportunity for an agency hearing.”
o Procedure –
 Vermont Yankee – The lower courts required hearing rights on
waste disposal issues even though neither the APA nor organic
statute required such procedures. Argument was that the rules the
agency made denied parties meaningful opportunity to participate
by not being able to cross-examine agency. The Court held that
courts cannot can only employ the “statutory minima” procedural
requirements in a notice and comment rulemaking.
 Costle – The EDF challenged nine off-the-record, post-comment
meetings involving high administrative officials and Senator Byrd
and the White House. The Court held that such communications
need not be docketed in this case because the EPA made no effort
to base the rule on any “information or data” arising from those
meetings.
F. ADJUDICATION
 General Rule. Agencies prefer rulemaking whenever possible. However,
adjudication is necessary for (1) licenses or permits or benefits and (2) when the
agency enforces requirements set out in the relevant statute or regulation. Agencies
cannot adjudicate with prospective-only effect. (That’s really just a rule) Wyman

25
 Gordon. Remember, “adjudication” encompasses all agency action that is not
rulemaking.
 Formality Triggers. Whether a statute requires the adjudication to occur “hearing
on the record.” § 554(a). After Seacoast, “after hearing” is sufficient. If triggered,
then §§ 556–57 also apply. Agencies receive Chevron deference, in Step 2, as to
whether the statute requires formal adjudication. Dominion Agency.
o only the 9th circuit requires formal procedures for “public hearing” after
Dominion Agency.
o courts are more likely to interpret a statute as providing for a hearing on the
record where the agency imposes a sanction or liability. See Wong Yang.
o “shall grant a hearing” did not indicate a congressional desire for formal
procedures in Nuclear Commission.
 CASES
o Dominion Energy– The organic statute in question required an “opportunity
for public hearing.” The EPA concluded that the statute did not trigger a
formal adjudicatory hearing. The Court held that agencies receive deference
as to whether the statutory language triggers formal procedures.
i. FORMAL ADJUDICATION
o General APA Rules.
 Notice. § 554(b). Persons must receive notice:
 time, place, nature of hearing
 legal authority and jurisdiction;
 the matters of fact and law asserted
 Opportunity. § 554(c). Interested parties shall have opp. for:
 submission and consideration of facts, arguments, offers of
settlement, or proposal of adjustment when time, nature of
proceeding, and public interest permit;
 hearing and decision on notice under 556 and 557.
 Presiding Employees. § 554(d). Presiding employees cannot:
 consult a person or party on a fact in issue, unless on notice
and opportunity for all parties to participate;
 be responsible to . . . the supervision or direction of an
employee engaged in the performance of investigative or
prosecuting functions for an agency.
o Other Rules.
 Off the record communications from White House officials to
decision-makers in a formal adjudicatory hearing are unlawful.
Portland Audubon.
ii. INFORMAL ADJUDICATION
 RULES
o General Rule. There are no procedural requirements in informal
adjudication outside substantive review, however due process
requirements might trigger if a liberty interests is at stake. The
adjudication must also survive hard look review, and so the agency must
always create a record and have findings of fact under Overton Park.
26
 G. Interplay between Rulemaking and Adjudication
 Choice between rulemaking and adjudication
o (1) within agency discretion if they have the authority to do both
(complete deference from courts)
o (2) Generally, move from adjudication to rulemaking and a beefing up of
rules for rulemaking
 Advantages of rulemaking
o Clearer and more consistent
 Can’t rely on adjudication
o Prospective
o Perhaps get something procedurally fairer
 Natl Petroleum—less likely agency will rely on impermissible
factors and will have to be done publicly
o Costs not being passed off to individuals (like in adjudication)
o Rules v. standards—concern with RM that there isn’t individualized
justice with broad rule
o Scope of judicial review—adj= trial record; RM = less formal, harder for
court to say they were wrong
o Priority setting—RM can decide what they want to decide at level of
generality
o Longevity
o Less burdensome (although RM has become more ossified)

IV. JUDICIAL REVIEW

A. REVIEW OF FACT
 RULES
o Applicable Standard of Review. First, ask whether the organic prescribes a
standard of review for factual matters. If not, then ask whether the proceeding
is formal or informal and apply the applicable APA standard. Universal
Camera. Agencies rarely lose1 on factual matters because courts presume that
they have expertise.
 APA Informal Proceedings. “arbitrary, capricious, an abuse of
discretion, or otherwise not in accordance with law.” § 706(2)(A).
 APA Formal Proceedings. “unsupported by substantial evidence . . .
[on] the record [as a whole].” § 706(2)(E).
 Differences Between These Standards. The standards entail the same
deference under Universal Camera. However, the substantial evidence
standard arises on a closed record in formal proceedings, and thus the
court can examine the whole record. In informal proceedings, the
agency controls what is on the record to a much greater degree.
Further, in informal, agency look at stuff not shown or from private
parties.

1
Allentown Mack and Universal Camera are the only cases where the agency lost on findings of fact.

27
 o Levels of Deference:
 complete deference (no review)
 reasonable jury standard
 abuse of discretion
 clearly erroneous use of discretion
 no deference (de novo)
o General Rule, Deference. The “substantial evidence” standard is more
deferential than the “clearly erroneous” standard applied by federal courts of
appeal to district court findings. Universal Camera. The court must consider
the record as a whole, and cannot ignore evidence cutting against the agency’s
finding. The standard is not the reasonable jury standard. See Universal
Camera. The Court should intervene only when the agency has grossly
misapplied the fact-finding standard. Universal Camera. or ask whether an
unbiased decision-maker would have reached these findings. Zhen Li Lao.
(Reasonable person standard in Allentown Mack is an outlier)
 Application. A given amount of evidence might be substantial if there
is nothing going the other way, but not if it is undercut, or
overwhelmed, by contrary evidence. If agency wants to go against ALJ
report, becomes a burden of explication—need to explain why they
were wrong.
 Qualifications.
 ALJ examiners must receive weight especially if they were
present before the parties and witnessed demeanor. Universal
Camera
 secret, unannounced bias against a certain evidentiary type
might trigger a less deferential standard. Agency must make
these standards public. Allentown Mack (testifying Union
members)
 if technical expertise is involved, a reviewing judge might
sustain agency factual findings that the judge would not
otherwise to infer from evidence in the record. Stow Mfg.
 CASES
o Universal Camera—The issue was whether on a record as a whole there was
“substantial evidence (clearly erroneous)” to support the agency’s findings.
 Factual background—dispute over whether the employer’s motive for
firing the chairman was because of pro-union views or his quarrel with
another employee (which would be permissible for firing). NLRB
reversed a factual finding by an ALJ that it was because of the
altercation. The Court was reviewing the NLRB decision—was there
“substantial evidence on the whole record” (statutory language) for
NLRB’s decision.
 Camera 1: Second Circuit held that the Board erred in overturning the
examiner’s factual findings. Took evidence as a whole to mean
everything in the record. Can’t say that no reasonable person could’ve
concluded the Chairman’s testimony was one of the reasons for his
discharge.

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  Camera II Holding: Remanded the case because “courts must now
assume more responsibility for the reasonableness and fairness of . . .
decisions than some courts have shown in the past; reviewing courts
must be influenced by a feeling that they are not to abdicate the
conventional judicial function.” Have to look at everything in the
record. Agencies will have a greater burden to overcome ALJ
determination.
 On remand, the Second Circuit deferred to the factual findings
and held that the Board should have dismissed the case. Thinks
Court wanted them to use very substantial preponderance of
the evidence.
o Allentown Mack—The NLRB determined that Allentown lacked a reasonable
doubt, based on objective considerations, that the Union had a majority status
after a transition. Two employees had testified that Union lacked majority
support. However, the Board ignored these even though they created
reasonable, good faith reasons to doubt that the Union retained majority
support. (Undervalued the evidence.) Court held that the Board’s factual
finding that Allentown lacked a reasonable doubt was unsupported on the
record as a whole because the Board avoided inferences from the evidence
without substantive presumptions or evidentiary rules of exclusion. Board had
unstated standards about how it weighted facts and needed to make these
publicly available.
o Zhen Li Lao – The immigration authorities denied an immigrant asylum
because she lacked a well-founded fear of persecution by the Chinese
government should she return. Posner held that the immigration authorities
wholly failed to provide any support for this, and thus remanded the case to
the agency. He noted six disturbing attributes of agency proceedings like the
one in question.
B. REVIEW OF LAW
 BACKGROUND
o NLRB v. Hearst Publications (1944) – Two questions: (1) Does common law
govern the interpretation of the Wagner Act? Term employee—defined by the
common law or new definition? (2) If not limited to the common law, does
employee include newsboys? (application of law to fact)
 Holding: no deference on questions of law but huge deference on
finding of fact
 Comparative expertise and legitimacy—courts have expertise
on law
o Packard –Court doesn’t defer on “naked question of law”
o Move from Skidmore to Chevron more bright line approach; Court breaks
new grounds by appealing to democratic theory—agencies are the preferred
gap fillers/more democratically accountable
 Scalia: assumption of what Congress would have wanted
 RULES

29
o Skidmore Baseline: agency interpretations have persuasive authority whose
weight depends on the circumstances. Sliding scale of deference.
 Factors:
 (1) thoroughness of the agency consideration;
 (2) validity of the agency reasoning;
 *(3) consistency of the interpretation with past interpretations;
 *(4) any other factor that makes the interpretation persuasive:
o agency flip-flops/whether the interpretation was
longstanding
 *Most influential
o Chevron Deference: agencies receive deference when interpreting ambiguous
statutory language if Congress has delegated them power
 STEP 0: Did Congress delegate general authority to the agency to make
rules carrying “the force of law,” and did the agency promulgate the
interpretation in question in the exercise of that authority? Mead. Such a
grant can be implicit through: (1) “generally conferred authority”; or (2)
“other statutory circumstances” indicating that Congress expected the
agency to speak with the force of law when addressing ambiguity or filling
space (“gap-filling”) in the statute. Mead. The lodestar is the intent of
Congress. (Did Congress intend for decision to have the force of law?)
INVALIDATE the regulation if the interpretation is impermissible.
 Long Island Care Gap-Filling Circumstances:
o (1) where an agency rule sets forth important individual
rights and duties;
o (2) where the agency uses full notice-and-comment
procedures to promulgate a rule;
o (3) where the resulting rule falls within the statutory grant
of authority; and
o (4) where the rule itself is reasonable.
 Instances Where Chevron Does Not Apply.
o (1) agency litigating positions and positions advocated in
briefs for the first time;
o (2) agency acting as prosecutor;
o (3) agency interpretation of a statute enforced by many
agencies.
 Qualifications:
o de novo – every agency rule is subject to de novo judicial
determination over whether the particular issue is
committed to agency discretion. City of Arlington.
o Chevron normally applies only if the agency engaged in
formal adjudication or either formal or notice-and-comment
rulemaking, but Mead court left this open
o prior decisions – that the agency previously reached its
interpretation through means less formal than N&C RM,
does not automatically deprive that interpretation of the
judicial deference otherwise due. Barnhart.

30
 STEP 1: Has Congress directly decided the precise question at issue? This
turns on how many tools of statutory interpretation that the court employs.
 Interpretive Tools. Can look very broadly. (Brown & Williamson)
o statutory text;
o dictionaries; (although fight over Webster’s 3rd in Babbitt)
o legislative history;
o other statutes;
o context;
o absurdity, see Riggs;
o “grave” constitutional avoidance, see Rust (regulations
must pose “grave and doubtful constitutional questions”
before constitutional avoidance triggers).
o **SB: the more interpretive tools you use in Step1, the less
often you will ever get the Step 2. Also an issue of
confidence—how confident do you have to be to say it’s
clear?
 Qualifications
o broad discretion – when congress has entrusted the agency
with broad discretion, the court is reluctant to substitute its
views of wise policy. Babbitt.
o major questions doctrine – Major public policy issues
should be resolved by Congress because it “does not
delegate significant issues to an agency in cryptic
fashions”; therefore, reviewing courts operate in Step 1 and
give no deference. Brown & Williamson; MCI. Indeed,
“[w]hen an agency claims to discover in a long-extant
statute an unheralded power to regulate a significant
portion of the American economy, we typically greet its
announcement with a measure of skepticism.” Utility Air.
“Whether [tax] credits are available on Federal Exchanges
is a question of deep economic and political significant that
is central to this statutory scheme; had Congress wished to
assign that question to an agency, it surely would have
done so expressly.” King v. Burwell.
o jurisdictional rules – there is no difference between an
agency interpretation regarding jurisdictional and non-
jurisdictional grants. City of Arlington. The question is
always “whether the agency has stayed within the bounds
of its statutory authority. Id.
o context counts – there is no effectively irrefutable
presumption that the same defined term in different
provisions of the same statute must receive identical
interpretations. Duke Energy Corp.
 STEP 2: Agency determinations stand if “permissible” or “reasonable.”
 Under Mayo Foundation, overrule an action only if:
o (1) is inescapably precluded by the statute; or

31
 o (2) “arbitrary or capricious” in substance.
 Qualifications.
o to whom? – It is not always clear to whom courts should
defer when deference is appropriate. Give the deference to
the person statutorily empowered to promulgate and
enforce regulations. See Martin.
o judicial interpretations – prior judicial interpretations only
preclude an agency interpretation if it unambiguously
forecloses the interpretation, and therefore contains no gaps
for the agency to fill. Brand X. This means that the court
must state “this is the only permissible reading” or “reading
X is impermissible.” However, the court’s ruling remains
law.
o agency consistency – the consistency of an agency’s
positions is a factor in assessing the weight that position is
due; but Chevron deference will apply regardless if
applicable. Shalala.
o limiting standard – organic statutes require agencies to
impose some limiting standard, rationally related to the
Act’s goals.
o presidential interpretations – the President is not an
“agency” under the APA, and so courts cannot review
presidential determinations under arbitrary and capricious
review. Franklin.
 Policies underlying Chevron:
 agencies have an edge over courts in accountability and technical
expertise;
 deference reduces the disparateness and balkanization of federal
administrative law by limiting the number of circuit conflicts;
 Chevron incentivizes Congress to write laws with greater
precision;
 Congress implicitly delegated law-interpreting powers.

o CASES
 Step 0
 Mead—About letters from customs officials on tariff setting: no
notice and comment, told not to rely on them, any of 46 port and
customs officers can issue them. Ruling letter said day planners
fell under the “other” section in the rule. Court ruled these letters
don’t get deference because they do not have force of law. (Like
formal adjudication and N&C RM) But Skidmore remains good
law in that administrative interpretations can have persuasive effect
if Congress never intended the agency decision to have the force of
law.
 Gonzales (2006) – Under CSA AG can deny, suspend or revoke
registration inconsistent with the public interest. The AG

32
 determined that using controlled substances to assist suicide is an
illegitimate medical practice, and that dispensing or prescribing
them for such purpose is unlawful under the CSA. There was a five
factor test for public interest, but he didn’t use this either. The
Court held that the regulation falls outside Chevron because the
AG could promulgate rules relating only to “registration” and
“control”; he thus lacked power to determine what constitutes a
legitimate medical practice. Further, the interpretation does not get
Skidmore deference because the AG lacked expertise in the area
and failed to consult anyone outside DOJ
 Long Island Care – The Department engaged in N&C RM that the
minimum wage exemption for “domestic service employment”
extended to “companionship workers.” Plaintiff challenged this.
The Court held that the agency receives Chevron deference as to
its interpretation because the Act “refers broadly to ‘domestic
service employment’ and to ‘companionship services’; [i]t
expressly instructs the agency to work out the details of those
broad definitions.” So, the rule was reasonable (an alternative to
Chevron) combine step 1 and 2 and ask if agency interpretation
was reasonable
 Step 1
 Babbitt – The Secretary defined the prohibition on takings to
include “significant habitat modification or degradation where it
actually kills or injures wildlife.” The Court held that the
Secretary’s construction of “harm” was reasonable because the
text, structure, purpose, and legislative history indicated that the
provision in questions was ambiguous.
 MCI Telecommunications – The FCC Commission had the power
to “modify” tariffs and rates. Plaintiffs argue that “modify” only
permits incremental change. The Court held that the agency
interpretation is unreasonable because the meaning of “modify” is
clearly incremental change. It deemed that an elimination of the
crucial provision of the statute for 40% of a majority industrial
sector is much too extensive to be a modification. Stevens, in
dissent, objected to Scalia’s use of dictionaries—“they are not
substitute for close analysis of what words means as used in a
particular statutory context.”
 City of Arlington—Can an agency get deference on jurisdictional
questions? Majority: The question is whether the agency has gone
beyond what Congress permitted it to do. Can’t separate
jurisdiction from non-jurisdiction.
 Brown & Williamson – FDA asserted jurisdiction to regulate
tobacco products by claiming that nicotine is a “drug” and
cigarettes are “combination products.” Court had several reasons
why Congress intended not to give FDA this authority. First,
Congress had directly addressed the problem of tobacco and

33
 health. Second, Congress acted against the backdrop of the FDA’s
consistent statements that it lacked authority to regulate tobacco.
Third, Congress had rejected several proposals to provide the FDA
authority to regulate tobacco. Fourth, Congress passed other
tobacco legislation. The Court held that Congress precluded FDA
regulatory jurisdiction over cigarettes by the intent expressed in the
overall regulatory scheme, specifically the tobacco-specific
legislation. This was an exercise of the major questions doctrine.
o Dissent: Can’t reason from congressional silence. Later
laws don’t embody “no jurisdiction”; words of the statute
encompass cigarettes
 Massachusetts v. EPA – Plaintiffs sought to force the EPA to
regulate greenhouse cases. The EPA refused to examine whether
C02 contributed to global warming. The statute defined “air
pollutant” as “any air pollution agent or combination of such
agents, including any substance or matter that otherwise enters the
ambient air.” First, the Court found that the statute is
unambiguous—the EPA can regulate greenhouse gases if it so
chooses. (The text forecloses the EPA reading that it might not
mean CO2. Agency loses at Step 1.) The agency cannot avoid
regulatory action without providing some reasonable explanation.
Thus, the Court held that the “EPA has offered no reasoned
explanation for its refusal to decide whether greenhouse gases
cause or contribute to climate change. Its actions were therefore . .
. not in accordance with law.” But the Court noted that “[w]e only
hold that EPA must ground its reasons for action or inaction in the
statute.”
o Dissent: Clean Air Act doesn’t give EPA authority to
regulate green house gases—air pollution not defined. So
it’s ambiguous. Defer to EPA’s interpretation at Step 2.
 STEP 2—only invalidated in two cases—Michigan and MCI
 Chevron – The EPA allowed states to consider pollution-emitting
units as “stationary sources” so that owners were free to act as they
wished within their “bubbles” so long as the total emissions
coming from then became no worse. The Court held that the term
“stationary source” was ambiguous. As a result, the Court held that
the agency interpretation of the term should receive deference
under Step 2. Under Step 2, the agency determination is
acceptable.
 Entergy Corp—EPA concluded that strict standards regarding
“cooling water intakes” were not cost-benefit justified. The statute
required the “best technology available.” Other provisions in the
CWA use “best” but required CBA (not true here). Majority: (1)
dictionary does not disclose CBA; (2) statutory silence is not
dispositive/it would be absurd for them not to consider costs at all;
(3) agency has maintained that CBA is permissible for 30 years.

34
 Court held that the EPA interpretation that “best technology
available” permits CBA is reasonable because dictionary
definitions and statutory context suggest that this is a colorable
interpretation. Basically, used absurdity cannon to get to Step 2.
Breyer (con&diss): statute restricts but doesn’t forbid CBA. [SB:
doesn’t think Scalia is right that it’s absurd to read provision as
ruling out CBA; he is fighting the text of the statute]
 Brand X – The FCC issued a “declaratory ruling” that broadband
internet service provided by cable companies is an “information
service.” A previous Ninth Circuit ruling had held that cable
modem is a “telecommunications service.” The Ninth Circuit did
not say that this was the only permissible reading. The Court held
that judicial interpretations only preclude an agency interpretation
if they unambiguously foreclose the interpretation, and therefore
no gaps exist for the agency to fill. (Concern about creating a race
to the courthouse for an interpretation otherwise.)
 AT&T Corporation (failing Step 2) – Act opening up local
exchanges. Requesting phone carriers can obtain access to existing
network elements by showing that it is
necessary” for competition and an “impair[ment]” to its services
would result. The FCC defined “impairment” as anything that
would “decrease the quality, or increase the financial or
administrative cost of the service.” The FCC defined an element
“necessary’ even if the companies could get it on their own. The
Court held that the agency’s definition of impairment flunked
Chevron Step 2 because “impair” and “necessary” were rendered
meaningless in that providers could receive network elements in
the only circumstances that they ever would: an increase in price.
 Michigan v. EPA (failing Step 2) – The EPA interpreted
“appropriate or necessary” without any regard to cost. The Court
held that this was simply beyond the bounds of the statutory text. It
needed to consider cost to some extent.
o Auer Deference: agencies receive deference when interpreting their own
ambiguous regulations unless the interpretation is (1) plainly erroneous or (2)
inconsistent with the regulation. Seminal Rock; Auer. This deference is Step 2
deference so long as the interpretation is reasonable.
 Anti-Parroting Canon. Agencies do not receive deference when the
agency rule merely mimics the statute. Agencies cannot end-run around
Chevron through rulemaking.
 Fair Notice Rule. Auer does not apply when it would cause unfair
surprise. Christopher (agency acquiesced for a long time, and then
suddenly invoked Auer).
 Auer has broader application than Chevron:
 agency positions set out in amicus or appellate briefs. Auer; Chase
Bank.
 an internal agency memo. Couer.

35
 agency interpretation of a third party regulation. Coke.
but agency deference does not apply to agency regulations that
simply tracked the statutory language. Gonzales.
 Policies: there are there conceivable reasons for Auer deference:
 the agency possesses special expertise in executing its regulatory
program.
 the agency has special insight to the intent since it drafted the rule.
 it would be strange to give agencies deference when interpreting
statutes by not their own rules. This isn’t about congressional
intent because not interpreting statute.
 Arguments against Auer deference
 Decker v. Northwest Environ. Defense Center (S. Ct. 2013)—
agencies have incentive to be vague and flexible later; sep of
powers problem (enlarging powers through interpretation of own
rules); agency expertise irrelevant to interpretation
C. HARD LOOK REVIEW
 RULES
o Issue. Unlike review of law, hard look review concerns policy decisions made by
an agency, i.e., the language is clear but allows for agency discretion. So
basically, agency just trying to figure out what policy is because they have
discretion to do what they want. It asks whether agencies took a hard look at the
arguments presented, and explained their decision in light of these arguments.
 Challenging agency choice:
 (1) look at organic act to see if agency violated it
 (2) If not clear, go to APA 706(2)(A) catchall provision
 NOTE: to rescind rule, need to do through N&C; if guidance, can rescind
with mere guidance
 **Different from Chevron in remedy and approach. If agency loses here,
just go back and take a harder look. If you lose under Chevron, the
regulation is invalidated as arbitrary and capricious.
o General Rule. Courts must determine whether agencies have both taken a “hard
look” at the relevant evidence and policy alternatives, and made a reasoned
exercise of its discretion in a given case. Hard look review operates under the
arbitrary and capricious standard, § 706(2)(A), and implicates “the full
administrative record.” Overton Park. A rational connection must exist between
the facts found and the choice made. State Farm. Agencies must only consider
“significant and viable alternatives.” State Farm. The agency must also respond
to dissenting commissioners (D.C. Circuit). REMAND if failure on hard look
under § 706. [Basically need to anticipate what judges will think is viable]
 Qualifications:
 a failure to act is non-reviewable under hard look. Heckler.
 Overton Park Three-Step APA Analysis:
 (1) Construe the relevant statute to determine the scope and
terms of the agency’s authority to determine whether it is

36
 acting within the authority conferred. This determines the
extent of the agency’s discretion if any.
 (2) court next decides whether the agency weighed of the
relevant factors;
 (3) If the agency has discretion and based its decision on
relevant factors, the Court considers whether the agency’s
weighing of the relevant factors and the particular course
chosen were arbitrary, capricious, and abuse of discretion, or
otherwise not in accordance with law.
 Language from Case Law:
 Best Restatement. “[It] is well settled that an agency has a
duty to consider responsible alternatives and to give a reasoned
explanation for its rejection of such alternatives. Of course, this
duty extends only to significant and viable alternatives, not to
every alternative device thought conceivable by the mind of
man regardless of how uncommon or unknown that alternative
may have been. But with that sensible caveat, the fact remains
that “the failure of an agency to consider obviously alternatives
has led uniformly to reversal.” City of Brookings (D.C. Cir.
1987).
 Overton Park. “To make this finding the court must consider
whether the decision was based on a consideration of the
relevant factors and whether there has been a clear error of
judgment. . . . Although this inquiry into the facts is to be
searching and careful, the ultimate standard of review is a
narrow one. The court is not empowered to substitute its
judgment for that of the agency.” Overton Park.
 State Farm. 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. Consider whether the decision arose from a
consideration of the relevant factors and whether there is a
clear error of judgment.
 Fox Television (changing policy). The agency need not
demonstrate to a court’s satisfaction that the reasons for the
new policy are better than the reasons for the old one; it
suffices that the new policy is permissible under the statute,
that there are good reasons for it, and that the agency believes it
to be better, which the conscious change of course adequately
indicates. This means that the agency need not always provide
a more detailed justification than what would suffice for a new
policy created on a blank slate
 Qualifications:
 unintended factors – an agency rule is arbitrary and capricious
if the agency relied on factors which Congress has not intended
it to consider. State Farm.

37
  post hoc rationalizations – agencies cannot rely on post hoc
rationalizations. Overton Park.
 costs – agencies must always consider costs unless Congress
has explicitly held that they may not do so. Entergy Corp.;
EME Homer; State of Michigan v. EPA.
 changing course – After Fox (adjudication), agencies changing
their position must at least acknowledge the change and justify
the new position on the merits, but need not directly compare
the old and new policies and explain why the latter is
preferable. Fox. In State Farm (rulemaking), Agencies
changing their course . . . [must] supply a reasoned analysis for
the change beyond that . . . required when an agency does not
act in the first instance. State Farm. But “an agency must have
amply latitude to adapt their rules and policies to the demands
of changing circumstances.” State Farm. The Second Circuit
interpreted this to mean that “the agency must explain why the
original reasons for adopting the rule or policy are no longer
dispositive. . . . But such a flip-flop must be accompanied by a
reasoned explanation of why the new rule effectuates the
statute as well or better than the old rule.” New York Council.
 word count – State Farm does not require a word count; a short
explanation can be a reasoned explanation. State Farm.
 politics – political preference might be deemed a relevant
factor; but the law does not permit agencies to make policy
choices for purely political reasons. Fox.
 resource allocation – agencies receive more discretion when
the issue relates to resource allocation; it is reasoned decision-
making. WildEarth Guardians. BUT note that EPA lost in
greenhouse gases case because didn’t act/look at data before
denying petition to regulate.
 changing positions – (1) acknowledge that the position is
shifting (2) out of a belief that the new policy is superior; (3)
new policy is permissible under statute; (4) no empirical
evidence is necessary to change policy if the evidence might
never materialize. Fox Television. Common sense
justifications suffice. Id.
 administrative change – a change in administration is a
perfectly reasonable basis for agency reappraisal of its
programs and regulations. State Farm (Rehnquist, J.,
concurring).
 independent agencies – there is no difference between
executive and independent agencies with regard to the
justification necessary to change policy. Fox.
 Empirical evidence –if scant empirical evidence, agency
doesn’t need to address it/come up with it. Fox
 Consequences:

38
  agencies must develop an evidentiary record reflecting the
factual and analytical basis for their decisions, to explain in
considerable detail their reasoning, and to give adequate
consideration to the evidence and analysis submitted by private
parties.
o Otherwise, if there is an inadequate record, will have to
get the testimony of decision makers if there is a
showing of bad faith.
 agencies must develop relevant information about the effects of
the alternatives, and it must explain considerations involved in
choosing among them.
 agencies must show that they considered all strong arguments
made by opposing parties.
 a rule is arbitrary and capricious if the agency:
o (1) relied on factors that Congress did not intend the
agency to take into account or failed to account for
factors required by any authoritative source of law;
o (2) the action does not bear a reasonable relationship to
statutory purposes or requirements;
o (3) the asserted or necessary factual premises of the
action do not withstand scrutiny under the relevant
standard of review;
o (4) the action is unsupported by any explanation or
rests on seriously flawed reasoning;
o (5) the agency failed to give reasonable consideration
to an important aspect of the problems presented by the
action without adequate justification, like effects, costs,
or factual circumstances;
o (6) the action is inconsistent with prior agency policies
or precedent, without adequate justification;
o (7) the agency failed to consider or adopt an important
alternative solution to the problem, without an adequate
justification;
o (8) the agency failed to consider substantial
arguments—or respond to relevant and significant
comments—made by participants in the proceeding that
gave rise to the agency action;
o (9) the agency has imposed a sanction generally out of
proportion to the magnitude of the violation;
o (10) the action fails in other respects to rest on reasoned
decision-making.
 Agency defenses
 Might try to use Chevron and argue that it’s a new
interpretation—but then agency has to be clear it’s changing
this and not the policy (sometimes better to own up to policy
change)

39
  Chevron Step 2 v. Hard Look
 Remedies:
o Hard look: remand for failure to take hard look
o Step 2: invalidate regulation – interpretation deemed to
be unreasonable (can’t come back with same result like
you can in hard look)
 Evaluation:
o Hard look: focused on decision-making process
o Step 2: authority to act under a statute (don’t care how
you reached that decision)
 Level of deference—the same but looking at different materials
 Incentives
o Pre-Mead, want to do legal determination
o Now—probably prefer Chevron if available. If you get
Skidmore, probably want hard look route
 CASES
o Overton Park – The Secretary of Transport proposed a road that would cut
through a park. The organic statute stated that the Secretary shall not approve
highway funding unless no “feasible and prudent alternative” exists and harm
is “minimized.” This was an informal adjudication. Two claims: (1)
procedural—didn’t have formal findings about alternative routes, (2)
substantive claim—agency didn’t look at other alternatives. The Court held
that the Secretary failed to make formal findings as required for hard look
review. In holding this, the Court did not require any specific procedures, but
ruled that review is probing and on the whole record.
 Procedural claim—failed because this was informal adjudication.
Under the APA or organic act, formal findings not required
 Substantive claim—successful; needs to be baseline reasonableness
substantively for decision
o State Farm – Agency under Reagan deregulating automobile industry. The
agency should have considered “airbags only” policy for cars, and the failure
to do so was arbitrary and capricious because the statute stated that the agency
“shall meet the need for motor vehicle safety.” The agency argued that people
would simply detach the automatic seatbelts. The Court held that the agency
failed “to present an adequate basis and explanation” for rescinding the
passive restraint requirement and that the agency must either consider the
matter further or adhere to or amend Standard 208. Here, there was an
informal rulemaking, yet the organic act required there be a record. It would
be arbitrary and capricious to fail to engage with data that the agency should
consider.
o Massachusetts v. EPA – EPA denied petition for rulemaking on greenhouse
gases. The Court held that the EPA can refuse to regulate greenhouse gases,
but agencies must take a hard look under the relevant analysis; lost as a policy
matter. Statute says “in his judgment” for regulation—this isn’t a license to
ignore statutory text. The agency should have examined whether greenhouse
gases were dangerous to humans, and required regulation under the statute. If

40
 the scientific data is as bad as agency says it is, need to say so. The agency
lost on the resource allocation argument; this is rare.
o Fox Television Stations – The FTC promulgated regulations that a nonliteral
use of the word fuck and shit could be actionably indecent, even when used
only once. This was a change in the agency policy. The Court held that this
was neither arbitrary or capricious because even the nonliteral uses can shock
the conscious and harm children. The Agency was free to decide that the old
regime no longer tracked its overall enforcement policy. Agency needs to
show: new policy is permissible under the statute; agency believes it is better;
acknowledge it’s a change.
o WildEarth Guardians – The Court held that limited resources prevented the
agency from making a determination as to whether coal mines should be
added to the list of facilities for performance standards. This use of discretion
was permissible because the language in the statute gave them discretion to
exercise priorities.
o EME Homer – the EPA issued a two-step approach that identified which
emissions would “significantly contribute” to dirty air in a downward state.
The first prong was purely quantitative. The Court upheld the regulation on
grounds that the “Agency has chosen, sensibly in our view, to reduce the
amount easier, i.e., less costly, to eradicate, and nothing in the text of the
Good Neighbor Provision precludes that choice.”
o State of Michigan – the D.C. Circuit held that costs could be considered
because “health” alone would leave the EPA unable to determine
“significance” in light of the fact that ozone causes health effects at any level.
D. AGENCY BIAS
 RULE
o Bias Test, Adjudication. Ask whether a disinterested observer could
conclude that the agency has in some measure adjudged the facts as well as
the law of a particular case in advance of hearing it. Cinderella Career.
o Bias Test, Rulemaking. A Commissioner should be disqualified only when
there is a clear and convincing showing that the agency member has an
unalterably closed mind on matters critical to the disposition of the
proceeding. National Advertisers. This is almost impossible to prove.
 Qualifications:
 discovery – discovery is not typically available in APA cases;
but if a party makes a significant showing . . . strong,
substantial, or prima facie . . . that it will find material in the
agency’s possession indicative of bad faith or an incomplete
record, it should be granted limited discovery. National
Mediation Board.
o APA Rule. A presiding or participating employee may at any time disqualify
himself. On the filing in good faith of a timely and sufficient affidavit of
personal bias or other disqualification of a presiding or participating
employee, the agency shall determine the matters as a part of the record and
decision in the case. § 556(b).
 CASES

41
 o Cinderella Career – The FTC Commissioner refused to recuse himself from
a case wherein he made an impassioned speech against Cinderella for its
alleged false advertising. The Court held that the Commissioner should have
recused himself because his speech had the effect of entrenching him into a
position that would make it difficult if not possible for him to change his
position after consideration of the record. Litigants are entitled to an impartial
tribunal whether consisting of one man or 20.
 National Advertisers – Pertschuk, a chair of the FTC, gave a speech
suggesting that advertising aimed at children caused them harm. He later
issued a notice of proposed rulemaking that considered banning televised
advertising of sugared products on children’s programs. The Court remanded
to the district court to determine whether Pertschuk had an unalterably closed
mind as required by the new test.

V. DUE PROCESS HEARING RIGHTS

A. DUE PROCESS IN ADMIN LAW
 Application. Due process issues only arise in adjudication; they have no application
in rulemaking. DP speaks to deprivations of life, liberty, or property by the
government without due process of law.
 Constitutional Avoidance. The Court has avoided answering constitutional
questions when possible. See Greene (common law cross-examination); Cafeteria
Workers (security requirements)
o Post-deprivation procedures can satisfy due process: “mere postponement of
the judicial inquiry is not a denial of due process.” North Am. Cold Storage
(putrid chicken).
 History: Court rejects grievous loss and right/privilege distinctions of earlier cases in
Roth.
o Now, seems more like a balancing test as to whether DP applies.
B. STEP ONE: DOES A PROTECTED INTEREST EXIST?
 RULE. The π must have either a (1) liberty or (2) property interest to have due
process protection at all. Roth. This is only about procedural rights—typically pre-
enforcement hearings. Negligent actions by officials causing unintended loss of or
injury to life, liberty, or property are not deprivations under the due process clause.
Daniels.
o Liberty Interests. There are two types of liberty interests: (1) constitutional
and (2) entitlement from state law. Roth. Courts must decide what procedural
rights are due; “the due process clause gives the Judiciary an independent and

42
 final say on the adequacy of the procedures for determining and vindicating []
entitlements.” Loudermill.
 (1) Constitutional. The π must show that the right is “essential to the
orderly pursuit of happiness by free men.” This means that
opportunities must have been “foreclosed.” Roth.
 (2) Entitlement from State Law. An individual must have “a
legitimate claim of entitlement” through positive state law. Roth.
[State can put on memos, docs, etc. telling individuals not to rely on
language as positive law rights, but if at some point it is being treated
like it case the force of law, P has more room to challenge although
state still might win]
 Other Bases:
 Reputational Plus Deprivation (Const.). A mere reputation
harm due to governmental action does not implicate procedural
due process, unless the action actually implicates a liberty
interest, e.g., buying alcohol. See Wisconsin v. Constantineau.
Contra Paul v. Davis (distinguishing Constantineau).
 Prisoner Claims. In the prisoner context, there must be
“atypical significant deprivation” that would infringe upon a
convict’s liberty interest, such as involuntary commitment to a
mental hospital in Vitek. See Sandin. This requirement comes
in addition to the normal requirement of either a (1) liberty
interest or (2) property interest under the same analyses. Thus,
run both tests. Relatedly, in Meachum, the Court affirmed that
felons “have not forfeited all constitutional protections”—but
this category is likely narrow.
 Welfare. Before Roth, the Court has held that welfare
recipients must receive pre-deprivation hearings because they
would “suffer grievous loss” by becoming homeless if the aid
was terminated. But Roth reversed the Goldberg test.
o Property Interests. An individual must have a legitimate claim of
entitlement through positive state law. Roth. Property interests lack a
constitutional bottom, and thus states can take things without any process so
long as no entitlement exists under state law.
 Qualifications.
 state positive law can be statutes, regulations, or even de facto
programs as in Sindermann (teacher dismissed after 10 years

43
 of 1-year K; remanded to see if entitled based on de facto
tenure program)
 state law (not federal) governs whether a legitimate entitlement
exists. Bishop (N.C. district judge).
 courts, not the state, decides what procedures are required.
Loudermill (overruling Arnett).
 benefits which the official has discretion whether to issue or
not do not create property interest. Ridgely (FEMA).
 states can create new entitlements but cannot encroach on old
property interests found within the common law core.
Schneider.
 The weight of the protected interest is irrelevant—just about
whether you have an entitlement
 Upshots:
 the state can opt out of constitutional constraints by not
creating the property interest at all.
 the entitlements doctrine creates an incentive for the
government to avoid creating property interest.

 CASES
o Step 1 –
 Goldberg v. Kelly – The Home Relief Program terminated aid without
prior notice and hearing to welfare recipients. The legislature
permitted post-deprivation hearings. The Court held that pre-
termination hearings were required because the welfare recipients
would suffer “grievous loss” in that they would become homeless.
Court ended up rejecting grievous loss distinction in Roth.
 Board of Regents v. Roth – Roth was not rehired as a professor after
his one-year contract expired. First, the Court held that the termination
did not harm his reputational liberty interest because he could merely
seek another job. Second, the contract stated that respondent’s
employment would end on June 30. He thus had no property interest.
 Marshall dissent—it’s not burdensome for the government to
give reasons when they exist. Rejoinder—if you say he was
fired because he was incompetent, could deprive of liberty
through reputational harm.

44
  Sindermann – A teacher was dismissed after 10 years of one-year
contracts. He claimed that the college had a de facto tenure rule. The
Court held that the π deserved a hearing to determine whether this was
true.
 Kennedy v. Arnett—statute gave entitlement but also came with limits.
Court ruled that people must take the bitter with the sweet. Overruled
by Loudermill.
 Loudermill—state can’t give property interest and then limit the
process that’s due (this is up to the Constitution).
 Ridgely – The Court held that no property interest exists because § 408
of FEMA stated that the “President may provide financial or other
assistance.” Such a discretionary benefit does not create a property
interest.
 Wisconsin v. Constantineau – The Court held that posting notice of π
as a habitual drunkard on liquor stores violated due process because he
lost his right to buy liquor + defamed him.
 Paul v. Davis – In Louisville, the police circulated a list of active
shoplifters. The plaintiff was mistakenly placed on that list.
Nevertheless, the Court held that no due process violation occurred
because the list only damaged his reputation. Need a deprivation of a
liberty or property interest in addition to harm to reputation to trigger
DP.
 Mechum v. Fano – transfer to higher security prison does not
implicate liberty interest. Prisoners don’t give up all constitutional
rights—keeps important ones, but this case didn’t reach that level.
C. STEP TWO: WHAT PROCESS IS DUE?
 RULE. While according weight to the agency decision, balance the following
considerations in light of the interests of the claimant as opposed to the administrative
costs of constitutionalizing the necessary procedures:
 (1) the private interest that will be affected by the official action;
 (2) the risk of an erroneous deprivation of such interest through the
procedures used, and the probable value, if any, of additional or
substitute procedural safeguards;
 (3) the government’s interest, including the function involved and the
fiscal and administrative burdens that the additional or substitute
procedural requirement would entail.

45
o Calculation: value of additional procedures (“rate of error”) • interest of
claimant > increased burden on government.
o Qualifications:
 deference – substantial weight must be given to the good-faith
judgments of the individuals charged by Congress concerning the
government’s interest. Mathews.
 generality – the balancing analysis occurs on the general level—and
does not account for the facts of the particular case.
 post-deprivation remedies – the existence of post-deprivation
remedies is highly relevant to the Mathews analysis; stronger post-
deprivation remedies make the pre-deprivation rule less necessary and
lower the π’s interests at stake. More likely you are able to be made
whole post-deprivation, less likely to win here.
 always examine the risk of error given present practices.
 introducing lawyers into a proceeding imposes substantial costs on the
government even though the government does not pay for them; the
government has an interest in efficient and fast proceedings so that the
regulatory scheme can function. Walters.
 non-adversarial proceedings – Congress has an interest in preserving
a non-adversarial system. Shinseki.
 no process – a Mathews analysis can determine that no additional
procedure is due even though an entitlement exists. Ingraham.
 direct democracy – votes by neighbors to decide whether a particular
person or firm is a bad apple exemplifies popular justice—which is
dubious for due process purposes. Club Misty.
 intangible hearing benefits – an oral hearing requirement forces
recognition that decisions “affect the lives of human beings, a fact that
is often obscured by a number of papers and depersonalized
identification numbers.” Schweiker. Moreover, such oral hearings
foster a belief that “one has been dealt with fairly.” Id.
 California added a fourth Mathews factor: individual dignity; the first
Mathews factor could include “dignitary interests” but courts have not
accepted this interpretation.
o Precedents:
 Goss (student suspension) –The Court required the “rudiments of due
process” because a school can suspend a student for less than 10 days,

46
 which includes oral or written notice and explanation of the evidence
against him.
 Winegar (teacher suspension) – The court found that the injury to the
teachers reputation, in conjunction with suspension and transfer
following a fight with a student, implicated liberty interests. The court
distinguished Goss on grounds that the teacher’s interests were more
significant than those implicated by a short-duration student
suspension.
 Horowitz (academic evaluations) – The Court held that academic
evaluations of a student bear little resemblance to the judicial and
administrative fact-finding proceedings that traditionally have a full
hearing requirement. The decision rests on the academic judgment that
is by its nature more subjective and evaluative than the typically
factual questions presented in the average disciplinary decision, it
requires expert evaluation.
 Schweiker (health insurance, claims <$100) – The Court held that
the Medicare statute does not require a government employee for oral
hearings, since the statute required that the carrier-selected hearing
officers are “qualified” and “have a thorough knowledge of the
Medicare program.” The extra value of having a government decision-
maker is not great.
 Gray Panthers (health insurance, claims >$100) – The Court held
that the Medicare statute requires some kind of oral procedure even
though it stated that a hearing “shall not be available” if the amount in
controversy is less than $100.
 Loudermill (terminating for cause employees) – The Court held that
due process requires “some kind of hearing before the discharge of an
employee who has a constitutionally protected property interest in his
employment.” He has a right to oral or written notice of the charges
against him, an explanation of the employer’s evidence, and an
opportunity to present his side of the story—no more.
 Gilbert (suspension without pay) – The Court held that no pre-
suspension hearing is required when a suspended employee receives a
sufficiently prompt post-suspension hearing, the lost income was
relatively insubstantial, and fringe benefits were not affected.
 Ingraham (student paddling) –value of a pre-paddling hearing is low,
risk of child being paddled without cause insignificant although Court
found there is a liberty interest in not being interfered with.

47
  Heckler (disability grid) – not due more when government already
knows the outcome even though you think your case might be special;
move towards rules makes for greater consistency and efficiency.

o CASES
 Mathews – Government conceded that SSD benefits were entitlements
creating a property interest. P wants pre-deprivation hearing despite a
lot of procedure to ensure accuracy before the checks stopped coming.
Basically wanted an oral/evidentiary hearing. The Court held that the
SSA procedure sufficed because a terminated recipient has full
retroactive relief if she ultimately prevailed, which means her sole
interest is in the uninterrupted receipt of the income pending final
administrative decision. Here, written reports were acceptable for
accuracy and the government had an interest in the cost of the hearing
she wanted.
 Walters – The plaintiffs sought the right to their own counsel in claims
involving less than $10. The government would not provide these
lawyers, and so had 0 economic costs. However, the government has
an interest in efficient and speedy adjudications even if it does not pay.
 Ingraham – Plaintiffs sought pre-enforcement hearings before schools
in Florida paddled school children. First, the Court found that children
have a liberty interest in not being paddled. However, under the
Mathews analysis, the Court determined that no additional procedures
are due because teachers—the relevant witness—already saw what
happened, and thus a pre-paddling hearing would provide little added
benefit under Mathews prong 2. Thus, no additional procedure was
necessary under Step 2.
o Result
 Incentives for legislatures: keep things mushy so as to not create
reliance/entitlement plus give max discretion so they can change their
minds.
 If you know the Roth test is going to be satisfied and you want
minimal procedures, have a grid with no discretion to question
 no procedures you can demand because there is no benefit
 So, Roth and Mathews create opposite incentives.

VI. REVIEWABILITY
 RULES

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o Trigger Clauses. As a result of the following clauses in the APA, πs almost
always have a valid cause of action against an agency in federal court.
However, §§ 702–704 do not govern organic statutes. This is the problem:
organic statutes might preclude review under these APA provisions.
 § 702 – waives sovereign immunity for those wronged by agency
action so long as the π does not seek monetary damages.
 § 704 – provides π a cause of action for wrongs caused by agencies.
 § 703 – allows π to bring actions against agencies in a court of
competent jurisdiction.
 § 1331 – provides federal courts subject matter jurisdiction over
federal questions, which encompasses all suits against federal
agencies.
o General Rule. There is a strong presumption of reviewability: “judicial
review will not be cut off unless there is a persuasive reason to believe that
such was the purpose of Congress.” Abbott Labs. This requires a clear and
convincing showing that Congress did not intend judicial review. Abbott
Laboratories The presumption of reviewability extends to compliance orders.
Sackett. Moreover, courts can review agency inaction when the agency failed
to take an action that is legally required. Norton. But an exception to Chaney
and Norton exists where “the agency has consciously and expressly adopted a
general policy that is so extreme as to amount to an abdication of its statutory
responsibilities.” Chaney.
 (1) a statute excludes review either implicitly or explicitly
– § 701(a)(1) [could be organic act or special statute regarding suit]
 (a) Implicit Preclusion. Does a statute expressly preclude
review? With regard to constitutional claims, does it clearly
intend to preclude them? The Abbott Labs presumption governs
unless there is a strong reason to do otherwise. Block (outlier
case). Whether a statute precludes judicial review is
determined not only from its express language, the structure of
the statutory scheme, its objectives, its legislative history, and
the nature of the administrative action involved; implicit
preclusion is very rare. See Bowen (black letter); Block;
Fausto; Sackett.
o Standard of review: Preclusion requires “clear and
convincing evidence” in statute. Bowen
o Statutory Scheme. Block highlights that one might not
be able to sue based on the statutory scheme if review

49
 would have precluded everyone from suing. Block.
BUT under Bowen, just because some actions are
reviewable under one provision of the statute doesn’t
mean that other actions under same program not
reviewable.
o Omissions in Complex Schemes. In complex schemes,
the omission of a provision providing for participation
by the regulated or effected entities is sufficient reason
to believe that Congress intended to foreclose such
participation. Block.
o Disfavored Block Language. The presumption favoring
judicial review is overcome if preclusive intent “fairly
discernible in the statutory scheme.” Block.
o Narrow Reading. The Court in Sacket read the statute
narrow to avoid precluding judicial review on the
whole. This case represents the strength of the Abbott
Labs presumption. Sackett.
 (b) Explicit Preclusion. Absent explicitly preclusive statutory
language, is judicial review for these plaintiffs plainly
inconsistent with the statutory structure, or does that structure
otherwise indicate a Congressional intent not to allow these
plaintiffs to sue? Courts construe legislative language very
narrowly so that review is possible unless absolutely
prohibited. See Johnson.
 (2) agency action committed to agency discretion by law: The
statute is “drawn in such terms that in a given case there is no law to
apply,” i.e., there is no explicit or implicit preclusion of review, should
review nonetheless be denied on the ground that there is no law, in the
relevant statute or anywhere else, by which to assess the plaintiffs’
particular claim? Look at the organic act and determine whether the
agency head had discretion by law on the issue. Heckler; § 701(a)(2).
 Enforcement Actions. There is a presumption of non-
reviewability of an agency’s decision not to enforce a statute.
Heckler (failure to act).
o Exception. Non-enforcement might be reviewable if
“the agency has consciously and expressly adopted a
general policy [, i.e., pattern] that is so extreme as to
amount to an abdication of its statutory
responsibilities.” Heckler.

50
 Regulatory Actions. Plaintiffs may only sustain claims if the
agency (1) failed to take a discrete action that (2) it is legally
required to take. Norton. The scope of this review is
“extremely limited” and “highly deferential.” Massachusetts v.
EPA. In Webster, the Court examined (1) statutory language as
well as (2) the overall statutory structure to find the case non-
reviewable.
o Qualifications:
 there is reviewability if Congress requires the
agency to act within a time limit, i.e., Congress
required agency action. Norton.
 Without a time period, have to show
delay so extreme they aren’t acting in
good faith
 The more discrete the action the better for
review—if statute telling agency to do
something specifically, less likely to be in
discretion not to enforce. Norton
 there is reviewability if the EPA denied a
petition (or took another action) because the
agency issued a written decision that the Court
can consider under hard look. Massachusetts v.
EPA.
 Qualifications:
o Lump Sum Appropriations. allocation of funds from a
lump sum appropriation is an administrative decision
traditionally regarded as committed to agency
discretion. Lincoln v. Virgil.
o Non-delegation Problem. There may be a non-
delegation problem when there is “no law to apply”
because the agency can act without any limiting
principle. Webster. Yet the grant is very narrow in
cases like Webster, so this would likely fail.
o Constitutional Claims. Constitutional challenges to
agency actions are reviewable unless Congress very
expressly precludes such review, because a serious
constitutional problem would arise otherwise. Webster.
It is uncertain whether it is constitutional to foreclose

51
 constitutional claims. Webster. However, since
Congress need not create district courts, a colorable
argument exists that Congress need not provide review
over constitutional claims in district courts.
 Policy:
o agencies have scarce resources and must necessarily act
in some cases but not others. Heckler.
o complete judicial review might create a system in
which private interests dictate public priorities.

 CASES
o Statutory Exclusion –
 Implicit –
 Block – Consumers and non-profits sought review over the
price set by the Secretary for milk. Nothing in the statute
indicated that consumers cannot sue; no express provisions
existed on judicial reviewability. The Court held that no
reviewability existed because “allowing consumers to sue the
Secretary would disrupt the complex and delicate
administrative scheme because [the regulated entities] could
evade the statutory [exhaustion] requirement.” Here, the law
was about cutting a deal between the producers and handlers.
Handlers could have sued as consumers, so allowing this would
invalidate the whole regime.
 Bowen – The claim challenged a regulation that compensated
board certified physicians higher than non-board certified
physicians for the same services. Statute had express
provisions for review of one program but not another. The
Court held there is a strong presumption of reviewability—no
implicit preclusion based on this scheme.
 Fausto – The Court held that the CRA preempts other statutes
regarding monetary compensation after wrongful termination
because it is “designed to create a comprehensive system for
administrative and judicial review of adverse personnel
actions.”
 Sackett – The Court held that the presumption of judicial
reviewability extends to compliance orders. In light of this, the
Court refused to preclude review even though the government

52
 had strong arguments for why review would impose burdens
on the EPA. This shows the strength of the presumption.
 Explicit –
 Tracy – The Court held that judicial review existed because the
statute only precluded review over claims to benefits, not
terminations of benefits.
 Johnson – The statute denied judicial review over “any
question of law or fact under any law administered by the VA.”
But nothing in the legislative history suggested congressional
intent to preclude judicial review. Thus, the Court held that
review exists over the constitutional claim in question—
because that question went to a decision of Congress rather
than a decision of the administrator.
 Traynor – The Rehabilitation Act stated that “no judicial
review” is available. The Court nonetheless held that
reviewability existed because the statute only precluded
“decisions made in interpreting or applying a particular
provision of that statute to a particular set of facts.”
 Kucana – The immigration board had discretion to “grant or
deny a motion to reopen.” The Court held this reviewable
because the provision precluding review applied to
discretionary statutory decisions, but the discretion used here
was made discretionary by regulation.
 St. Cyr – The Court held that habeas review is available even
when the authorizing statute stated that “no court shall have
jurisdiction to review any final order of removal.”
o No Meaningful Law –
 Heckler – The Court held that agency refusal to act falls within the
agency’s prosecutorial discretion—agencies “have scarce resources
and must necessarily act in some cases but not in others.” This is
presumptively unreviewable unless the substantive statute contains
guidelines for the agency to follow in exercising its enforcement
powers.
 Norton – SUWA sought declaratory and injunctive relief because
BLM failed to act to protect public lands in Utah from damage caused
by off-road vehicles. The Court held that judicial review of agency
inaction is permissible when the agency failed to take a discrete act
that the statute legally required the agency to take. But here, the

53
 agency had discretion on how to manage federal land “so as not to
impair the suitability of such areas for preservation” under § 1782(c).
 Webster – The CIA director terminated an employee because he was a
homosexual. The organic statute stated that the director could
terminate employees whenever he thought that terminations was in the
best interests of the United States. The Court held that judicial review
is precluded because the statutory language “exudes deference to the
directors,” and thus “there is no law to apply . . . the choice was pure
discretion.” The only question would be whether the director, in his
discretion, deemed the termination necessary.
 Massachusetts v. EPA – EPA refused a rulemaking petition to
regulate greenhouse gases. The Court held review permissible because
the EPA had denied a rulemaking petition under § 553(e). The agency
had a duty to explain the denial under § 553(f). Consequently, the
Court could review the matter under hard look—a judicial standard
existed.

VII. Standing

 RULES
o State Court Standing. There are no constitutional restrictions on state court
standing.
o Federal Court Standing. Not going to allow public action. The inquiry is
whether the plaintiff must satisfy both (1) constitutional and (2) zone of
interest requirements. Flast is the exception.
 Flast Establishment Clause Exception. The Court permits a narrow
standing exception for instances in which Congress authorized suits
regarding the Establishment Clause. Flast. Taxpayers have to (1) show
a logical link between their status as taxpayers and the type of
legislative enactment attacked and (2) show the challenged enactment
exceeded specific constitutional limitations. This does not permit
Establishment Clause violations perpetrated by the President; only
federal statutes passed by Congress. Hein.
 (1) Constitutional Standing. (1) injury in fact; (2) causation; (3)
redressability. [Court takes “case or controversy” language in Article
III seriously]
 (A) Injury in Fact. The plaintiff must have suffered an injury in
fact—an invasion of a legally protected interest which is (a)
concrete and particularized; and (b) actual or imminent, not

54
conjectural or hypothetical. Lujan. The plaintiff must only
show that he or she has reasonable concern about: (1)
recreational, aesthetic, or economic interests. Laidlaw.
Proximity to the alleged harm appears to make a difference.
o concrete – the party seeking review must herself be
among the injured; a mere interest in a problem is
insufficient to render the organization adversely
affected or aggrieved. For instance, in Sierra Club the
organization lacked standing because never alleged that
any of its members would use the park. But merely
looking at cans (as a result of railroad rate increases)
constituted a sufficient injury to sue over railroad rates
in SCRAP.
o speculative – The alleged injury must be more than
speculative. For instance, the injury in Lujan I was
insufficient because plaintiffs merely alleged that they
one day wished to visit the crocodiles; the organization
must have members actually visiting the crocodiles.
o no plaintiff – the fact that no one else could have
standing does not make any one person a better
candidate for standing. Valley Forge.
o generalized grievances – the Court resists suits
“claiming only harm to the plaintiffs and every other
citizen’s interest in proper application of the
Constitution and laws, and seeking relief that no more
directly and tangibly benefits him than it does the
public at large.” Lujan.
o substantial risk – The Court found standing based on a
“substantial risk” that the harm will occur when the
harm may prompt the plaintiffs to reasonably incur
costs to mitigate or avoid that harm. Monsanto Farms.
o evidence of harm concerned about—Court ruled in
Laidlaw that the plaintiffs need not show actual
pollution from agency action; just need to show
dissuaded from going to park because of the activity.
This must be a reasonable concern.
o Certainly pending—injury to be certainly pending;
cannot be too speculative or attenuated, such as
potential injury through fear or surveillance. Clapper.

55
  (B) Causation. There must be a direct causal connection
between the injury and the conduct complained of—the injury
has to be “fairly ... trace[able] to the challenged action of the
defendant, and not ... th[e] result [of] the independent action of
some third party not before the court.” Simon. Agency
regulation forces A to do X. Causation should prove easy for
regulation entities—but very difficult for non-regulated
entities. See Simon (refusing to find causation where the
hospitals, the regulated entities, were not the plaintiff).
 (C) Redressability. It must be “likely,” as opposed to merely
“speculative,” that the injury will be “redressed by a favorable
decision.” Simon. So long as the court can cause some
incremental change by invalidating or requiring regulation,
then the injury is sufficiently redressable. EPA v. Mass. Thus,
for redressability, one must only show that the regulation at
least reduces the alleged injury to some extent. EPA v. Mass.
But redressability does not exist when (1) the money from a
civil penalty goes to the treasury and (2) the alleged violation
has ceased so that the damages award cannot have a deterrence
effect. Steel Co. Speculative that Congress will react/pass a law
in party’s favor. Coalition for Responsible Regulation
(regulated entity did not have standing).
 (2) Prudential Standing, Zone of Interest Requirement. A plaintiff
may bring suit so long as he is “arguably within the zone of interests”
that Congress intended to protect. ADPSO. This only requires that
some substantive provision within the statute benefits the plaintiff.
ADPSO. The standard is low; to fail the test, the plaintiffs’ interests
must be so “marginally related to or inconsistent with the purposes
implicit in the statute that it cannot reasonably be assumed that
Congress intended to permit the suit.” Clarke. This means that there
needs not be an indication of congressional purpose to benefit the
would-be plaintiff; just that you weren’t outside of the group meant to
be protected. Clarke; Patchak. No longer considered prudential or
about policy—just whether or not you have a cause of action under the
statute. Lexmark.
 Analysis. (1) Discern whether the plaintiffs’ interests are
arguably to be protected by the statutory provision at issue. (2)
Inquire whether plaintiffs’ interests affected by the agency
action are amongst them. In doing this, (1) look at any
substantive provision, and (2) there need be no congressional
purpose on point.

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 Language National Credit Union. “The proper inquiry is
simply whether the interest sought to be protected by the
complainant is arguably within the zone of interests to be
protected . . . by the statute. Hence in applying the zone of
interests test, we do not ask whether, in enacting the statutory
provision at issue, Congress specifically intended to benefit the
plaintiff. Instead, we first discern the interest arguably . . . to be
protected by the statutory provision at issue; we then inquire
whether the plaintiff’s interests affected by the agency action in
question are among them.” National Credit Union (holding
that the banks have standing under the APA to review the
FCUA’s interpretation of § 109 because “one of the [statute’s]
interests arguably to be protected by § 109 is an interest in
limiting the markets that federal credit unions can serve,” and
the banks have an interest in limiting these markets; everyone
understood this legislation was a battle between two groups).
 Live Issue. Whether industries that were non-existent when
Congress enacted the statute nonetheless have standing to sue
under the statute, e.g., Uber.
 Language. “Whether a plaintiff comes within the zone of
interests is an issue that requires us to determine, using the
traditional tools of statutory interpretation, whether a
legislatively conferred cause of action encompasses a particular
plaintiff’s claim.” Lexmark Int’l.
 Could be injured in fact but not within zone of interests. Ex—
decision to move to RM instead of adjudication means
stenographers will lose job. Congress wasn’t thinking about
them, so not in zone of interests.
 Examples:
o ADPSO – The petitioners sell data processors to
businesses generally and challenge a ruling by the
Comptroller of Currency that national banks may make
data processing services available to other banks and to
bank customers. The Court held that the ADPSO is
within the statutory zone of interests because they
suffer an economic injury, which falls under the “legal
interest[s]” protected within the statute.”
o Clarke – The banks challenged the comptroller’s legal
authority by permitting two national banks to open
officers that sold “discount brokerage services” to the
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 public under the McFadden Act. The Court held that the
plaintiffs met the zone of interest test because
“Congress has shown a concern to keep national banks
from keeping a monopoly control over credit and
money through unlimited branching.” Thus, “Congress
has arguably legislated against the competition that
respondent seeks to challenge, by limiting the extent to
which banks can engage in the discount brokerage
business.
o Lexmark Int’l – The Court concluded that Static
Control was within the confines of the Lanham Act
because the company could show “an injury to a
commercial interest in reputation or sales” and could
“show economic or reputational injury flowing directly
from the deception wrought by the defendant’s
advertising.” Static Control’s alleged injuries—lost
sales and damage to its business reputation—are
injuries to precisely the sorts of commercial interests
the Act Protects.
o Air Courier – The Postal Workers’ Union failed the
zone of interest test because their interests were so
tangential that the injury was unrelated to the statute.
This is the only case where plaintiffs were denied
standing based on the zone of interest test.
o National Credit Union – Banks attempted to expand
activities but received pushback from Credit Unions.
Banks thus sued the Credit Unions under a credit union
statute. But the banks were only competitors.
Nevertheless, the Court held that standing existed even
though the statute never mentioned banks at all. Banks
were in the background in the statute, which brings the
bank interests “arguably” into the zone of interest of the
statute.
o Patchak – The Court held that the Tribe had standing to
sue under the IRA because Congress enacted the statute
with the Tribe’s neighbors in the background even
though the act was about federal land acquisition and
statute never mentions them: “no one would doubt that
a neighboring landowner would have prudential
standing to bring suit to enforce the statute’s limits.”
“[N]eighbors to the use are reasonable—indeed,

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 predictable—challengers of the Secretary’s decisions:
their interests, whether economic, environmental, or
aesthetic, come within the IRA’s regulatory ambit.”
o Qui Tam Suits. The Court has reserved the question of whether qui tam suits
violate the constitution by empowering Congress to enforce the laws, which is
the Executive’s prerogative. Relators have Article III standing.
o Policies:
 there is a risk of collusive or at least insufficiently enthusiastic
litigation when plaintiffs lack and concrete interest and personal stake
in the matter.
 courts should only intervene to protect discrete individual interests;
otherwise decisions should be made politically, not judicially.
 If Congress wants anyone to have standing have penalties paid to
the injured person (so have injury, causation and redressability).
 Scalia—this is transferring duty of President to “take care” that
laws are faithfully executed. Could be taking away President’s
enforcement discretion.
 CASES
o Injury in Fact:
 Frothingham – The plaintiff was a taxpayer who argued that Congress
exceeded its power. His injury was the same as all other taxpayers.
Thus, the Court held that he lacked standing—the plaintiff requires
some harm more particular and a violation of a personal right.
 Flast – The Court carved out an exception for particularized injury
where an Establishment Clause violation is at issue.
 Sierra Club – The Court denied standing because the Sierra Club did
not allege that they had an injury different from the general public, as
they never colaimed that any of their members used the valley.
 Lujan – The Court denied standing because it is not enough for
plaintiffs to allege that, at some point in the future, one of their
members would want to see the crocodiles in Sri Lanka. The plaintiff
must demonstrate something more concrete.
 Laidlaw – The Court found standing because the plaintiff alleged that
they would not use a nearby river out of fear of pollution from a
factory upstream. This differed from Lujan in that the Lujan plaintiffs
had no concrete plants to return to Sri Lanka; in Laidlaw the plaintiffs

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 lived near the river and might return if they ever felt so inclined. Also
different than Steel Co for redressability because it was ongoing
conduct and majority argued that it stands to reason that if punished Ds
will rethink for the future.
o Causation:
 Simon – The plaintiffs argued that revenue ruling in question
discouraged hospitals from treating indigenous persons. Their injury
was a denial of care. They challenged a tax incentive statute that
defined charitable institutions as those who “accept some patients in
need of hospital services who cannot pay for them . . . to the extent of
its financial ability. The Court held that no causation existed because
“it is purely speculative whether the denials of service specified in the
complaint fairly can be traced to petitioners encouragement or instead
result from decisions made by the hospitals without regard to the tax
implications.”
o Redressability:
 Massachusetts v. EPA – The plaintiffs wanted the EPA to regulate
greenhouse gases. However, such regulations would have minimal
effect on whether the coastline receded. Nonetheless, the Court held
that redressability only requires “some incremental change.” Thus,
redressability existed here because the plaintiff established that
regulation might save some of the coastline, however minimally.
Dissent thinks no standing because this can’t have an impact. Majority
concerned that no one will be able to challenge a global problem if we
don’t allow incremental change to get into court.
 Steel Co. – Under the relevant statute, the court may award a civil
penalty. However, the treasury receives the monetary award and no
deterrence effect was impossible since the alleged conduct had ceased.
The Court held that the claim lacked redressability. The upshot is that
the plaintiff must have some “skin in the game” before the Court
recognizes standing.
 Laidlaw – The Court held that penalties for past conduct would deter
the defendants from future conduct because the alleged violations were
continuing, even though the treasury would receive any money from
the judgment.
o Generalized Grievances:
 Clapper – The plaintiffs alleged that the government would intercept
their communications, and this caused them to incur mitigation costs
just like the plaintiffs in Monsanto. However, the Court that the

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 possibility of communication interceptions was too speculative: (1)
chain of inferences necessary and (2) unfettered choices of a third
party. This made the alleged harms not “impending.” Plaintiffs bear
the burden of pleading and proving concrete facts showing that the
defendant’s actual action has caused the substantial risk of harm.
Plaintiffs cannot rely on speculation about the “unfettered choices
made by independent actors not before the court.”
 Hollingsworth – The petitioners sought standing to enforce
Proposition 8 in California because state officials declined to defend it.
“To be sure, petitioners did have a special role in the adoption of
Proposition 8. But once Proposition 8 was approved b the voters, the
measure became a duty enacted constitutional amendment or statute.
Petitioners have no role—special or otherwise—in the enforcement of
Proposition 8. They therefore have no personal stake in defending its
enforcement that is distinguishable from the general interest of every
citizen of California.”

VIII. RIPENESS, FINALITY AND EXHAUSTION

A. RIPENESS
 RULES
o General Rule. Position of the courts. There is a presumption in favor of
judicial reviewability. Abbot Labs. Need clear and convincing evidence that
there shouldn’t be judicial review. The judge must consider (1) the fitness of
the issues for judicial determination, as well as (2) the hardship to the parties
of withholding judicial consideration. Abbott Labs. Ripeness is not required
by the APA. But post-hard look, the agency has almost always explained
exactly how the statute will be enforced. Thus, the Court can typically
determine whether that application comports with the organic statute and
APA. So now, usually has to be something weird for ripeness to be an issue.
 Fitness. Ask whether the issues are purely legal questions, or whether
more factual development would better facilitate judicial review. Does
the court have enough information to rule on the pre-enforcement
challenge, or should the court wait for enforcement to actually take
place? More fit for judicial review if no facts to develop. For instance,
in Toilet Goods, the court found that the issues in question were fact
intensive and required further development.
 Hardship. What consequences will the parties face if the judge sits on
the issue? For instance, in Abbot Labs the parties would have incurred
substantial economic loss by reprinting every label to include the
generic drug name. But in Toilet Goods, the threatened hardship on the
parties was far lower, and thus the court waited to know more about
how the law would be implemented.
 Constitutional Core. Ripeness might have a constitutional core, but
this is uncertain because the prudential considerations are larger.

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 CASES
o Abbott Labs – The FDA issued regulations requiring the established name of a
drug to accompany each appearance of the drug’s proprietary name in all
labels. First, all parties agree that the issue is purely legal: whether the statute
was properly construed by the Commissioner to require the established name
of the drug to be used every time the proprietary name is employed. Second,
the regulatory impact is sufficiently direct and immediate to render judicial
review appropriate. The drug companies must incur the costs of changing all
the promotional materials of face prosecution, serious criminal and civil
penalties for the unlawful distribution of “misbranded” drugs.
o Toilet Goods – A regulation provided that the FDA would suspend batch
certification for cosmetics if the manufacturer refused to permit FDA
employees “free access” to all “manufacturing facilities . . . in the
manufacture of color additives.” First, the regulation stated that the
Commissioner may order inspection and, if denied, may suspend certification;
thus, “[a]t this juncture we have no idea whether or when such an inspection
will be ordered and what reasons the Commissioner will give to justify his
order.” Second, the Court noted that “no irremediable adverse consequences
flow from requiring a later challenge . . . by a manufacturer who refuses to
allow this type of inspection . . . [because] a refusal to admit . . . would at
most lead only to a suspension of certification services . . . , a determination
that can be promptly challenged through administrative procedure.”

B. FINALITY
 RULES
o General Rule. Has the agency decided? An agency must have issued a final
determination with legal consequences before judicial reviewability. Standard
Oil. This means that the agency has finished its process. The APA mandates
finality in § 704.
 Sackett Test:
 (1) determined rights and obligations
 (2) legal consequences flow from the issuance of the order
 (3) the issuance marks the “consummation” of the agency’s
decision-making process; the mere possibility that an agency
might reconsider in light of “informal discussion” and invited
contentions does not suffice to make an otherwise final agency
action non-final.
 Result: there might be a lot of things that cause injury but can’t be
challenged because they aren’t final.
 Might actually be some instances in which we don’t want
courts involved because of issues like expertise
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  SB: There is danger in treating courts like high priests because
other government actors shirk constitutional responsibilities

 CASES
o Standard Oil of California – The FTC issued a complaint against eight major
oil companies, asserting that had engaged in unfair methods of competition in
connection with the OPEC oil boycott. The FTCA permitted the FTC to
initiate by complaint administrative proceedings if they had reason to suspect
wrongdoing, but Socal argued they didn’t have any facts to do so. The Court
held that this was not final action because the complaint merely initiated the
proceedings and had no legal force and intervention by a court at this stage
“denies the agency an opportunity to correct its own mistakes and to apply its
expertise.”
o Franklin – The Court held that the agency determination was not final
because the Secretary of Commerce merely made a recommendation to the
President. The President made the final decision, and § 702 bars claims
against the President.
o Herman – The Seventh Circuit found the finality requirement met by a letter
sent by an assistant district director because “it established a legal duty; that
its receipt subjected the petitioner to a risk of civil penalties; and that there
were no mechanisms for internal appeal.”
o Sackett – The Court held that an EPA compliance order was final action:
“First, it determined the Sacketts’ rights and obligations: the Sacketts were
subject to double penalties if they ignored the order and EPA sought judicial
enforcement, and the Army Corps . . . would not process a construction permit
application for the Sacketts’ property as long as the compliance order was in
effect. Second, the order marked the consummation of the EPA’s decision-
making process. While the order offered to engage in further discussion, the
Sacketts were not entitled to any further review.”
o Holistic Candlers – The FDA sent a warning letter to members of the ear
candle industry stating that ear candles were “medical devices” that lacked
requisite FDA approvals. The D.C. Circuit held that the letters did not mark
the consummation of the agency decision-making process: the warning letters
merely gave “firms an opportunity to take voluntary and prompt corrective
action before [the FDA] initiates an enforcement action.” Second, the FDA
manual stated that the letters were an effort to achieve voluntary compliance,
and did not commit the FDA to enforcement action.

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C. EXHAUSTION
 General Rule. Has the plaintiff done enough? The APA does not require
exhaustion. Darby. However, the organic statute might require exhaustion. (Only
worry about it if this is the case)
o Argument that plaintiff didn’t exhaust all remedies when agency has not had
an opportunity to pass on the issue and is willing to review it.

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