Admin Outline Swapnots

I.
THE CONSTITUTIONAL POSITION OF ADMINISTRATIVE AGENCIES
a. What Is An Agency?
• What Is Administrative Law? Most broadly defined as legal control of government. Most
narrowly it consists of those legal principles that define the authority and structure of administrative
agencies, specify the procedural formalities that agencies use, determine the validity of
administrative decisions, and outline the role of reviewing courts and other organs of government in
their relation to administrative agencies.
o Three Bodies of Administrative Law: (1) constitutional law, (2) statutory law, including
Administrative Procedure act (APA), and (3) federal common law embodied in judicial
decisions that don’t have clear constitutional or statutory source.
• What is An Agency? Agency means each authority of the US government, excluding the three
branches of government (congress, judiciary, executive). Examples FTC, EPA, FCC, Library of
Congress, Secret Service, PTO. Any government power that’s not one of the three branches of
government is an agency.
o APA § 551(1) “Agency means each authority of the Government of the US, whether or not
it is within or subject to review by another agency, but does not include (A) congress, or (B)
the courts of the US.”
• APA says any kind of authority except congress and the courts. It doesn’t except the
president.
• Agency’s Connection To Three Branches of Government Where do agencies fit in to this

structure?
o Article 1 “All Legislative Powers shall be vested in Congress, which shall consist of a
Senate and House of Representatives”
o Article 2 “ Executive Power shall be vested in a President”
o Article 3 “Judicial Power shall be vested in one Supreme Court, and such inferior
courts ad Congress may from time to time ordain and establish.”
• Was It Framer’s Intent To Give Legislative, Executive and Judicial Power To Create
Agencies?
o No - Legislative + Executive Have No Power To Create Agencies Alito argues that
Legislative + Executive Branches Don’t Have Power To Create Inferior Tribunals (Agencies)
because if framers intended to allow them to create agencies, then would have explicitly
included it in text the power to create subordinate bodies as it did with for judicial branch in
article 3.
o Yes – while constitution doesn’t spell out that the branches can create agencies, there is
assumption for legislative and executives that they can. It is up to congress to create
agencies for judiciary, judiciary doesn’t have power. constitution doesn’t forbid creation of
agencies
• Article 1 - Necessary + Proper Clause Article 1, Section 8, Clause 18 "The
Congress shall have Power - To make all Laws which shall be necessary and proper for
carrying into Execution the foregoing Powers, and all other Powers vested by this
Constitution in the Government of the United States, or in any Department or Officer
thereof."
 Contemplates congress having subordinates that are actually in branch
themselves. For example congress can make law saying we’re going to
make agencies because contemplates congress making laws providing
for themselves support personnel.
• Article 2 – Section 2 “The President may require the Opinion, in writing, of the
principal Officer in each of the executive Departments, upon any Subject relating to
the Duties of their respective Offices”
o Clearly there is assumption that executive will need executive departments to
get things done. Also has procedure for confirming appointments of inferior
Administrative Law - Bierschbach 1
officers. Also take care clause “he shall take Care that the Laws be faithfully
executed” is interpreted to mean he takes care by appointing agencies to
execute law.
• What Branch Does Agency Fall UnderWhich branch are agencies under? SEC has office of
judges . . . where do they fit in. agencies do bunch of different things not clear where fit in
constitutional structure. All we know is that not one of three branches of government.
Boyce Motor Lines v. US (1952)

• Facts Interstate Commerce Commission (ICC) promulgates regulation that requires drivers of
vehicles containing hazardous materials to “avoid, so far as practicable, and where feasible, by
prearrangement of routes, driving into or through congested thoroughfares where crowds are
assembled tunnels and dangerous crossings.” D in trucking business and drove through Holland
tunnel with hazmats and truck exploded killing people. Charged criminally for violating ICC
regulation.
• Who Gave ICC Power to Promulgate This Law? Congress! ICC was delegated this power by
Congress – Congress passed statute that says “ICC shall formulate regulations for safe
transportation.” Usually agencies get their authority from congress through the agency’s
organic/enabling statute (statute that creates the agency).
• ICC Regulation Vague Defendant argues that ICC regulation is overly vague and does not
provide sufficient notice to D. here the congressional delegation was constitutional, but the ICC
regulation was unconstitutionally vague.
o Majority Can’t knowingly violate ICC statute because no way of knowing if conduct violates
vague statute.
o Dissent When congress vests ICC power to define unlawful conduct, agency must do so
with precision. Here ICC failed to identify routes over which transportation of dangerous
commodities is unlawful.
• Laws Which Constrain Agencies

1. Constitution Agency must promulgate regulations that give fair warning to put people on
notice of law.
2. Organic Statute Agency can’t exceed power congress delegated to them in enabling statute
that created the agency.
3. Federal Courts Judge made administrative common law.
4. Agency Regulations Each agency has their own rules and regulations for how standard of
conduct and procedures for making laws.
5. Executive Order president can issue executive order telling agency what president wants
them to do. President can say EPA in deciding rules to regulate environment must use cost
benefit analysis.
b. Relation of Agencies To Congress
i. The Rise And Fall of The Nondelegation Doctrine
1. Separation of Powers And Checks and Balances
• Separation of Powers + AgenciesSeparation of Powers doctrine insists that infringements on

personal liberty be imposed only by rules of general application, promulgated by elected
representatives, interpreted by independent jurists, and enforced by yet another branch of
government. The creation of administrative agencies having each of the three types of powers that
the constitution disperses among coordinate branches threatens the doctrine of separation of
powers.
• Purpose of Nondelegation Doctrine

(1) Accountability It ensures that significant policy decisions are made by the legislature,
the branch most responsive to the democratic will
(2) Guidance For Agencies it assures that the agency receiving new jurisdiction will have an
“intelligible principle” to guide its exercise
(3) Judicial Review it allows courts reviewing agency action to test it against ascertainable
standards.
• Delegation + Congress’s Accountability When congress delegates to agencies there is no

accountability – because congress is not accountable for legislation that that agency passes. Why
we like accountability? A lot of legislation imposes burdens on our liberties and we want elected
officials who have our interests in mind to make decisions on those sensitive morality issues. Also
when congress legislates, they get more input because legislature from around the company rather
than an agency in DC – which think increases the qualify of the law.
o HYPO Accountability Problem Congress thinks in public interest for RR to be
affordable, but knows RR will go out of business if force them to lower their rates. So
congress delegates power to regulate RR rates to agency which raises RR rates. Congress
says to constituents I can’t believe agency did this, we didn’t do it, we don’t control them.
If allow congress to delegate too much then will lose important check in checks and
balances system.
• Why Congress Delegates?

(1) Expertise Congress often delegates power to regulate rates to agencies because they
are not economists and specialized commission has more expertise in a certain field.
(2) Time congress doesn’t have the time to regulate this.
(3) Continuity congressman change by the year, but more consistency if delegate to
agency that is always there.
(4) Independence agency will gather all the information and balance between competing
priorities. Congress is tied to their constituents. Congress will delegate things away to
agencies that want to insulate from lobbying.
2. Agency’s Power to Legislate
• Non-Delegation Doctrine Congress Cannot Delegate Legislative Power Congress can’t

delegate its legislative power and if it does then the legislation is struck down as unconstitutional.
Constitution says “all legislative power shall be vested in congress,” so congress can’t delegate that
power.
• Different View of Nondelegation Doctrine

1. Congress Can’t Transfer Any Legislative Powers The vesting of all legislative
powers in congress is not only an initial allocation, but also a final one. Congress cannot
transfer its legislative powers to any other institution
2. Congress Cannot Delegate Broad or Discretionary PowerWhen congress enacts a
statute granting authority to the executive the statute amounts to or effects a delegation of
legislative power if the scope of the grant is too broad or if it vests too much discretion in the
executive.
3. No Delegation It Is ExerciseWhen congress enacts statute granting authority to
executive there is no “delegation” of legislative power no matter how broad the grant of how
much discretion is confers. Rather than delegating legislative power, congress has exercised it
by enacting the relevant statute.
• Pre 1935 Supreme Court Cases prior to 1935 the supreme court upheld a number of
delegations of legislative power under a variety of different theories.
o Named Contingency - Field v Clark (1892) statute giving president power impose
retaliatory tariffs when deems foreign tariff unreasonable or unequal. Court held president
not given legislative authority because his powers were limited to determining a fact upon
which the tariff was contingent. President just deciding fact – whether foreign tariff is
reasonable. (broad discretion because based on president’s opinion)
o Fill In The Details - US v Grimaud (1911) statute gives secretary of agriculture authority
to make provisions for protection against destruction upon public forests. Court upheld
statute saying didn’t delegate legislative authority but merely gave secretary power to fill up
the details. Secretary can only regulate if destruction of forests so that is constraint.
o Intelligible Principle - Hampton v US (1928) statute gave president power to revise
tariff when he determined necessary to equalize costs of production in US and competing
country. Court justified “if congress shall lay down by legislative act an intelligible principle
to which the person or body authorized to take action is directed to conform, such legislative
action is not forbidden delegation.”
• 1935 Panama Refining and Schechter only in Panama and Schechter has the supreme court
concluded that delegations have been unconstitutional. Nevertheless, the nondelegation doctrine
has never been overruled.
o Panama Refining v Ryan (1935) NIRA (national industry recovery act) enabled president
to prohibit transportation of petroleum in amount exceeding amount authorized by state.
President could impose fine or imprisonment.
 Unconstitutional Delegation Congress didn’t establish standards to govern
president’s action, or where president was obligated to make specific finding prior
to action. President held unlimited authority to implement the prohibition because
didn’t provide standard governing when the president was to exercise the
authorized power.
o Schechter Poultry v US (1935) NIRA delegated to president authority to approve codes
of fair competition upon application by trade groups. President approved life poultry code.
 Unconstitutional Delegation Court says there were no adequate definitions on
NIRA of subjects to which exercise of authority is to be addressed just says “Codes
of Fair Competition” also no procedural safeguards for adoption.
• Procedural Safeguards in Panama Refining president regulating unfair
competition and would have to engage in investigating, collecting
evidence, and evaluating what’s going on in industry at time to see what’s
unfair. In Schechter Poultry president regulating procedures for fair
competition and relying on private parties to come up with standards.
• Delegation To Private Parties  delegation here to private parties was
unconstitutional because affirmatively coming up with the regulation, if just
vetoing that’s ok.
o General Rule of Panama and Schechtera delegation of legislative authority that is
found to be wholly without standards specifying conditions pursuant to which it is to be
exercised is unconstitutional.
o Cardozo Cardozo dissents saying no unconstitutional delegation in Panama but yes in
Schechter because delegation was “unconfined and vagrant.” Authority delegated wasn’t
confined to specified acts or standards. Legislature seemed to create a roving commission to
inquire into evils and upon discovery correct them.
• Post Schechter Delegation – Wartime Delegations

o Price Controls - Yakus v US (1944) Emergency Price Control Act gave administrator
power to establish maximum prices on commodities when prices rose or to eliminate
profiteering, stabilize prices etc. Court ruled standards expressed in EPC with statement of
considerations required to be made by administrator were sufficiently definite and precise to
enable congress, courts and public to ascertain whether administrator in fixing prices
complied with those standards. Delegation only kicks in when have to fight inflation.
o War Contract – Lichter v US (1948) upheld constitutionality of Renegotiation Act which
delegated to administrator power to recover excessive profits on renegotiation of war
contracts. Court held not necessary for congress to supply with specific formula because field
involves flexibility.
• Liberal Delegation Court very liberal in modern era, only unconstitutional if congress provides
no standards at all.
o Amalgamated Meat (1971) Economic Stabilization Act (ESA) of 1970 gave president
power to “issue such orders and regulations as he may deem appropriate to stabilize, prices,
rents, wages and salaries.” President issues executive order establishing 90 day price wage
freeze.
 Why Delegation Constitutional (1) judicial review – court not worried about
president exceeding authority because there is possibility of judicial review that
will check his power. (2) procedure – president must go through process to
implement the rule so that constrains his power (3) legislative history – president
can look to legislative history to get sense of what is allowable for a standard. (4)
limited duration – rule has limited duration so not worried going to be applicable
forever.
o Intelligible Principle Standard Congress must identify an “intelligible principle” which
the agency must conform to. A delegation is only improper if the challenging party proves
that there is an absence of standards governing agency, so that it is impossible for a court to
ascertain whether will of the legislature has been satisfied.
 HYPOIs There Standard? Congress passes statute saying FCC can grant
licenses to companies for public convenience and interest. Standard? there is a
standard it is public convenience. Breadth? All they are authorized to do is grant
licenses, so power is limited. FCC doing it not private parties.
ii. Dealing With Delegations
1. Problem of Legislative Language
a. Broad Delegation
• Dissenting Justices Argue Unconstitutional Delegation even though the supreme court has
not struck down a federal statute as unconstitutional delegation since Panama and Schechter,
several justices have strongly advocated its application.
“The Benzene Case” - Industrial Union Dept. v. American Trucking (1980)

• Facts Occupational Safety and Health Act (OSHA) Secretary of Labor should set standards for
dealing with toxic materials in the workplace, “which most adequately assures to the extent
feasible that no employee will suffer material impairment of health.” This requires Secretary set
exposure limits at the lowest technologically feasible level that will not impair the vitality of the
industry regulated.” Secretary of Labor adopted regulation limiting occupational exposure to
benzene to 1ppm on the basis that that was lowest level “feasible” without bankrupting industry.
• Issue Did D appropriately find that benzene poses a significant health risk to the environment and
that 1 ppm standard is “reasonably necessary or appropriate to provide safe or healthful places of
employment” within meaning of OSHA?
• Majority - Stevens Court found that statute was constitutional delegation, but that agency didn’t
properly execute its authority. To make regulation agency first has to show that “significant risk”
from exposure to benzene (significant risk language not in statute). Agency didn’t show that there
was a significant risk to justify the stringent environmental standard mandated by the act. Because
D failed to satisfy his threshold burden court doesn’t address what “extent feasible” means.
o Constitutional Avoidance Stevens says if don’t read “significant risk” language into the
statute then statute will be unconstitutional in violation of nondelegation doctrine. Court
reads congress’s delegation of power to agency narrowly, so that agency regulation is
unconstitutional because it exceeds their authority. Instead of saying delegation itself is
unconstitutional because too broad. Before strike down statute, court interprets around it.

• Concurrence – Powell OSHA requires agency to engage in a cost benefit analysis before
imposing substantial new costs on an industry. So for agency to decide if “reasonably feasible” it
has to do a cost-benefit analysis. Agency regulation is unconstitutional because agency didn’t
evaluate if there are any benefits of 1ppm and compare them to the cost.
• Concurrence – Rehnquist OSHA is an improper delegation because it leaves the choice of
adopting a cost benefit analysis to the secretary of labor. Congress is suppose to decide what
“feasible” means, it shouldn’t be up to the agency to give content to that word. There is no
intelligible principle to guide agency’s exercise. No way for court to decide whether exercise is in
accordance with statute because no ascertainable standards in statute.
• Dissent – Marshall the statutory requirements have been satisfied by agency because the did a
cost benefit analysis – they round a risk. Marshall argues that the delegation doctrine is dead, at
least in the absence of “overbroad, unauthorized, and arbitrary application of criminal sanctions in
an area of constitutionally protected freedoms.”
• Why Did Congress Delegate This Power Congress is delegating away the power to regulate
benzene because they don’t want to take any political heat for regulating. Congress is avoiding the
effects of an unpopular choice. Steven’s solution of adding in “significant” risk language doesn’t fix
the fact that congress is avoiding accountability for this legislation. Stevens just substitutes one
delegation problem for another – now what does significant mean. In not sending OSHA back to
congress to clarify, letting congress get away with not doing job. Now it will be the court’s fault for
clarifying regulation.
• Delegation and Standards the modern trend is for courts to uphold virtually all delegations of
legislative authority, except perhaps in areas affecting individual liberty. Nevertheless, the
delegation doctrine stands for the notion that in a democratic society, standards of conduct ought to
be prescribed by our elected representatives, rather than administrative agencies. It remains as a
potential check against the conferral of boundless discretion to administrative agencies.
American Trucking v EPA (1999)

• Facts Congress enacted Clean Air Act requiring EPA to establish national ambient air qualify
standards “requisite to protect the public health” with an adequate margin of safety. EPA issued
rules revising primary and secondary national ambient air quality standards for particulate matter
and ozone.
• Court Strike’s Down EPA Regulation Court strikes down EPA’s regulation because EPA didn’t
articulate an intelligible principle to guide its application of the criteria it set out. EPA lacks any
determinate criterion for drawing lines because failed to state intelligibly how much is too much.
o What EPA Should Do EPA should adopt ineligible principles to guide its exercise of
discretion. A cost benefit analysis is not available, but EPA in theory could choose too
eradicate any hint of direct health risk. If EPA concludes no principle available it can report to
congress with rationales for the levels it chose and seek legislation ratifying its choice.
• Court Does Not Strike Down Clean Air Act Statute the problem is really that congress
doesn’t explain what “requisite to protect the public health means.” Scalia upholds the law saying
he’s upheld more vague thins in the past, but in reality this statute is worrisome from the
nondelegation standpoint because granting EPA broad authority to regulate because didn’t give
them clear standards.
o Why CAA Is Not Clear congress should have made the statute more clear, rather than
saying “requisite to protect public health.” Congress could have gone through all the types of
particular toxins in the air and make a bright line rule of how much ppm is permissible for
each. But then congress would just be making the law itself and delegation would be
pointless.
b. Narrow Delegation

• Mistretta Congress wanted to take away arbitrariness in judge’s decisions so delegated to
sentencing commission the power to provide guidelines for judges to use when imposing sentences.
Commission evaluates guidelines congress gave it (categories of D’s, minimus/maximums).
Congress basically made delegation as descriptive as possible – went as far is it could without
making the law itself.
o Delegation Unconstitutional Where Only Delegating Lawmaking Function Scalia
dissents that this is unconstitutional delegation of legislative power because all that statute
delegated was lawmaking function, and not any other legislative power. Commission didn’t
engage in any research or do anything aside from taking law congress gave them in statute
and enacting it under their own name. The lawmaking function of the sentencing commission
is completely divorced from any responsibility for execution of the law or adjudication of
private rights under the law. Lawmaking divorce from exercise of judicial power because not
subject to control of any other body with judicial powers.
Public Citizen v. Young (1987)

• Facts The Delaney Clause of the Color Additive Amendment provides that a color additive shall be
deemed unsafe it is found by the FDA to induce cancer in man or animals. Once deemed unsafe FDA
doesn’t have authority to list the dye. FDA wants to list some dies that have really low risk, but still
some risk of cancer.
• Court May the FDA allow an exemption from the Delaney Clause for trivial or “de minimus risks”?
No. Court says Delaney Clause does not contain an implicit de minimus exception for carcinogenic
dyes with trivial risks to humans. Congress intended that if this rule produced unexpected or
undesirable consequences the agency should come to congress for relief – court refuses to be
desired escape.
o Court Holds Agency To Narrow Language Of Enabling Statute
• De Minimus Doctrine The court must look beyond the plain meaning of a statute to the purpose
of the statute it its literal application would lead to absurd or futile results in a cost benefit sense or
lead to a result directly contrary to the primary legislative goal. But if as here the intent of congress
was purposefully rigid, the courts must defer to it. In passing the Delaney clause congress intended
that any unexpected or undesirable consequences should be remedied by it.
• Plain MeaningThe Delaney clause is very clear direct language not allowing much discretion.
Saying if induces cancer then it is deemed unsafe – no wiggle room about it (though there is a little
wiggle room, doesn’t say when to test, doesn’t say what “color additives” are, doesn’t say what to
“induce” cancer (though that’s harder)).
• Absurdity Doctrine allows Court to change language of statute to avoid absurd results. If you
force FDA to avoid carcinogens at all costs, then Agency might approve another dye that is more
toxic but doesn’t cause cancer. This is absurd.
• Holding Congress Accountable Court wants to hold Congress accountable for writing such a
rigid standard. FDA cannot approve these food colorings. This sends message to congress and
might get congress to give an actual standard to be used. However, if Congress just says something
like “feasible”, then it will be a problem again and it might go back and forth between Congress and
Court. Also, Congress might have used this strict language b/c the state of science at the time could
only detect carcinogens in large quantities, so if you found something carcinogenic then you knew it
was really bad. Maybe in the future you can tell miniscule carcinogenic risks. So this could be a
case of science getting away from Congress.
2. Other Legislative Response
• Legislative Veto legislative veto is a clause in a statute that says that a particular agency action
will take effect only if congress does not nullify it by resolution within a specified period of time.
They vary: might have to be passed by one house, both houses, or simply by a committee. Purpose
of veto was to allow congress an opportunity to oversee or veto agency decisions especially if acted
under statute that gave them broad discretion.

o Elements of Legislative Veto (1) Delegation - statutory delegation of power to
executive/agency, (2) Exercise - exercise of that power by executive/agency, and (3) Veto -
reserved power in congress to nullify that exercise of authority.
INS v Chadha (1983) One House Legislative Veto Unconstitutional

• Facts Chadha outstayed his visa. AG suspended his order of deportation under Immigration and
Nationality Act. One provision of that act allows either house or congress to pass a resolution
disapproving such suspension of deportation, which the house did without explanation. Court ruled
that this legislative veto provision was unconstitutional.
• One House Veto Is Congress Unconstitutionally Passing Law Court says the House’s
disapproval of the AG’s suspension order involving Chadha was an unconstitutional effort at
lawmaking because revoking some of delegation given earlier to AG. Court says this is
unconstitutional because it avoids correct procedure for passing a law in Art I of constitution. There
has to be bicameralism and presentment. Presentment - all legislation must be presented to
president for his signature or veto before becoming law. Bicameralism - requires both house’s
approval of a bill before it can become law.
o Why Is This Legislative Because absent this provision the only way to undo the stay of
deportation is for congress to pass a statute. Court says because it’s really a declaration of
policy.
• Procedural Safeguards of Rights Problems with one house veto is that rights can be trampled
on without procedural safeguards. The initial INS decision was through a judicial hearing, and House
corrected this outcome without much debate.
• Improving Laws Also, Congress might be lazy with passing initial statute knowing they have veto
as a backup. Members won’t try to hammer out a solid law. One worry is that lobby groups and
special interest groups an easier way to come in and bending things to serve their own needs
• Other Methods of Congressional Control There are still other ways for Congress to control.
Generally, they can:
o Cut FundingCut agency’s funding
o Dismantle AgencyKill the agency, dismantle it.
o Rewrite Enabling StatuteRewrite the statute that gives agency their authority.
o Consent For AppointmentsAdvice and consent for appointments (usually rubber stampish
and lax).
o Oversight If you don’t like what the agency is doing, you make them come in and explain
themselves. Implicit message is that if you don’t shape up we can use some of our harsher
tactics.
c. Relation of Agencies To The President
i. Appointment
• Appointment Clause - Article 2 Section 2 President “shall nominate, and by and with the
advice and consent of the Senate, shall appoint ambassadors, other public ministers and consuls,
judges of the Supreme Court, and all other officers of the US, whose appointments are not herein
otherwise provided for, and which shall be established by law: but the Congress may by law vest the
appointment of such inferior officers, as they think proper, in the President alone, in the courts of
law, or in the heads of departments.”
o President’s Power To Appoint Empowers the President of the United States to appoint
certain public officials with the "advice and consent" of the U.S. Senate. This clause also
allows lower-level officials to be appointed without the advice and consent process.
• Appointment Clause Analysis if federal official is appointed by President, Courts of Law, or

Head of Department Appointment requirements may apply

1. Officer or Employee? First question - is federal official officer or employee? If
employee, appointment clause doesn’t apply
2. Inferior Officer or Principle Officer?  Second question – is federal official principle
officer or inferior officer? If principle officer constitution requires appointment be by president
and approved by senate. If inferior officer congress may give president, courts of law, or heads
of department power to appoint.
• Inferior Officers Appointed By President, Court of Law, or Head of Department Appointment clause
says inferior officers may be appointed only by president, court of law or head of department.
1. Officer Or Employee
Buckley v. Valeo (1976)

• Federal Elections Commission More substantial powers include enforcement power,
discretionary power to seek judicial relief – these are not merely an aid of legislative function of
congress. If just have investigative powers then employee. Here commission has responsibility for
conducting civil litigation in the courts for vindicating public rights – that makes commission “officer
of US.”
• Definition of “Officer” Officer is one who has executive-like power, exercising “significant
authority” pursuant to the laws of the US. If officer then president must follow appointments clause
and get senate’s approval of appointment.
Freytag v. Commissioner (1991) Special Trial Judge In Tax Court – Inferior Officer
• Special Trial Judge Is Officer Special trial judges are additional personnel who assist regular
appointed tax court judges in their duties. Supreme court held that special trial judges are inferior
officers of US rather than mere employees for purposes of appointments clause, although special
trial judges do no always render final decisions, they perform more than ministerial tasks - they take
testimony, conduct trials, rule on admissibility of evidence, have power to enforce compliance with
discovery orders, and can render tax court’s decisions.
• Appointment By Court of Law or Head of Department?

o Court of Law is a tax court a court of law? Majority says “court of law” is not limited to
article 3 courts of law, courts of law include courts that carry out functions of courts by
deciding cases. Scalia disagrees and says only includes article 3 courts of law
o Head of Department chief judge of tax court is head of department because autonomous
agency that not overseen by superior agency. DOJ and Scalia interpret head of department to
mean not just cabinet level positions but other entities as well.
Landry v. FDIC (2000) Administrative Law Judge – Employee

• Administrative Law Judge ALJ conducts administrative proceedings including hearings for
various federal banking agencies. Court distinguishes ALJ’s from Freytag STJ’s concluding that ALJ’s
are employees, mainly focusing on fact that they don’t have authority to render final decisions and
that reviewing body doesn’t have to defer to their factual findings.
• Factors For Determining Whether Officer “Any appointee exercising significant authority
pursuant to the laws of the US is an “Officer of the US.”
o Authority To Render Final Decisions STJ’s have authority to render the final decision of the
Tax court in declaratory judgment proceedings and in certain small amount tax cases. But
ALJ’s can never render the decision of the FDIC – ALJ must file a recommended decision,
recommended findings of fact, recommended conclusions of law and proposed order.
Laundrey says this was critical to Freytag decision.
o Engage In Fact Finding they engage in fact finding and take testimony
o Defer To Factual Findings in Freytag Tax Court was required to defer to STJ’s factual and
credibility findings unless they were clearly erroneous, whereas FDIC board doesn’t have to
defer to ALJ, makes own factual findings.
o Office Established By Law the office was established by law which is a threshold trigger for
the appointments clause, and the duties salary, and means of appointment for the office
were specified by statute.
o Duties Established By Law its duties are established by law – ALJ and STJ take testimony,
conduct trials, rule on admissibility of evidence, and have the power to enforce compliance
with discovery orders. Both exercise significant discretion.
2. Principle Officer Or Inferior Officer
• Principle Or Inferior Officer once determine that a federal official is an “Officer of the US” must
further determine whether that officer is an inferior officer whose appointment can be vested by
statute in the President, Department heads, or courts of law without senate consent.
o “Inferior”  Inferior can mean not as important or powerful or inferior can mean
subordinate (Scalia Dissent).
a. Inferior Means Not As Important
Morrison v. Olson (1988) Independent Counsel – Inferior Officer

• Independent Counsel Ethics in Government Act allows for appointment of independent counsel
to investigate and prosecute high ranking government officials. Powers include initiating and
conducting prosecutions, framing and signing indictments, filing information’s, and handling all
aspects of case in name of US. Court says IC is inferior officer.
• Factors For Determining Whether Principle of Inferior Officer

o Removal By Higher Ranking Official IC is subject to removal for cause by higher executive
branch official – AG. Court says although IC not subordinate to AG in that has independent
discretion to exercise her delegated powers, fact that she can be removed by AG indicates
she is in some degree inferior in rank and authority.
o Limited Duties IC empowered by act to perform limited duties – investigation and
prosecution. Doesn’t have authority to formulate policy for government, or administrative
duties outside those necessary to operate her office.
o Limited Jurisdiction IC can only act within scope of jurisdiction granted by AG. And
restricted to certain federal officials suspected of certain serious federal crimes
o Limited Tenure IC office is limited in tenure – no time limit on the appointment but
temporary in sense that IC appointed to accomplish single task and when completed office is
terminated. Unlike prosecutors IC has no ongoing responsibilities that extend beyond
accomplishment of mission appointed for.
• Scalia Dissent (1) Removal – Scalia says that IC is removable only for good cause or physical
mental incapacity, so it’s harder to remove her than principal officers of the executive branch who
can be removed by the president at will. (2) Limited Duties not limited duties because act
delegates to her “full power and independent authority to exercise all investigative and
prosecutorial functions and powers of Department of Justice.” (3) Limited Jurisdiction + Tenure – not
limited tenure because she continues to serve until she decides her work is substantially completed.
Not limited jurisdiction, no doubt that jurisdiction is small but far from unimportant. Federal judge
sitting in small district is not inferior in rank and authority.
o Inferior Means Subordinate IC not inferior officer because she is not subordinate to any
officer in executive branch (not even president). Necessary condition for inferior officer
status is that officer must be subordinate to another officer.
b. Inferior Means Subordinate

Edmond v US (1997)
• Members of Coast Guard Court of Criminal Appeals officials perform adjudicatory functions
but do not conform to the requirements of Article III. Appointed by secretary of transportation (head
of department). Scalia majority court ruled they were inferior officers.

• Factors For Determining Whether Principle of Inferior Officer “inferior officer” connotes
relationship with some higher ranking officer – must have superior. Inferior officers are officers
whose work is directed and supervised at some level by principle officer – who was
appointed by presidential nomination with advice and consent of senate.
o Important Responsibilitiesreview court marshal proceedings that result in the most serious
sentences to ensure that court marshal’s findings of guilt and sentence is correct in law and
fact.
o Independently Weight Evidence unlike most appellate judges, CCA judges are not required
to defer to the trial court’s factual findings but may independently weight evidence, judge
credibility of witnesses and determine controverted questions of fact.
o Removable Scalia says fact that CAA judges are removable without cause indicates
subordinate relationship. Power to remove officers is powerful tool for control
o Power To Render Final Decisions Scalia says it is significant that CCA judges have no power
to render final decisions on behalf of US unless permitted to do so by executive order.
• Is Morrison Still Good Law? it isn’t clear whether Morrison is still good law after Edmund, most
think it isn’t.
• HYPO Congressional Committee Is Employee Congress sets up Civil Rights Commission, half
members appointed by president without confirmation by senate, and other half are appointed by
leadership in house and senate. CRC investigates voting rights discrimination and fraud, studies
legal developments, collects information, hires staff, holds hearings, issues subpoenas for witnesses
to appear. Is this unconstitutional appointment
o Employee Can say just employees doing research, writing papers, assisting legislatures.
They’re not exercising significant government authority other than aiding legislative function.
Court says congressional committee is employee.
• HYPO Private Parties Can’t Appoint Even Inferior Officers Congress creates Federal Open
Market Committee, to set interest rates, determine monetary policy on behalf of US, direct federal
reserve bank. Committee has 12 members – 7 appointed by president and confirmed by senate and
5 elected by board of directors of federal reserve bank (private financial institution).
o Exercise of Significant Authority This committee has significant authority – setting interest
rates, so they are officers. Private parties are not allowed to appoint them under
appointments clause, must be head of state or court of law and private party is neither.
• HYPO Senate Puts Restrictions On Who It Will Confirm Senate informs president we’re only
going to confirm district judges that you chose from short list prepared by senators in state where
that judge will sit. We’ll confirm appointment in ND if on list that ND senators give you. Is that
constitutional? Text of appointment clause doesn’t prohibit it though does seem like separation of
powers. Probably constitutional.
• HYPO Senate Only Appoints House Senate adopts rule only going to appoint to house of
representatives. President says you can confirm whoever you want as long as house agrees to the
appointments. One argument is appointment clause gives senate alone authority to choose, and
they are delegating away authority constitutional commits to them to house. But they’re not binding
themselves they can also just change their mind. This is probably ok.
• HYPO Inferior Officer Gets Promoted To Principle Officer Congress appoints FBI official to
be Independent Counsel. Does she need to be appointed? If the nature of their authority has
changed such that before might have been employee but now officer need to go through
appointment process again. Unless earlier method of appointing them was sufficient to cover their
current appointment.
• HYPO Inferior v Principle Officer Analysis US attorney by statute is appointed by president

with advice and consent of senate. Congress changes method of appointment so that AG now
appointees US attorney. Have to ask whether US Attorney is principle officer or inferior officer?
o Is US Attorney Subordinate After Edmond question is are they subordinate to some other
executive branch official? Look to how they can be removed and whether they can make final
decisions. US attorney is very important in that can bring down multi billion dollar financial
institutions, they can prosecute who they want regardless of what AG says.
ii. Removal And Presidential Control Over Agency Action
• Constitution what it says about removal authority of officers? Constitution says officers can be
removed through impeachment by congress. Doesn’t say anything about executive. President
doesn’t have role in triggering impeachment. All we have is case law which lays out lots of doctrine
on this. would be problem if president can’t remove.
Myers v US (1926) President Has Unfettered Power To Remove Executive Branch Officials
• Facts Myers was appointed postmaster general of Portland, Oregon, and was removed by the
president without advice and consent of senate. Statute requires that postmasters be removed only
with “the advice and consent of the senate.” Myers says president can’t remove him, and sues for
back pay.
o Court Statute restricting president’s ability to remove is unconstitutional.
• President’s Removal Power because the president is vested wit the power to enforce the laws
of the land, it is imperative for the adequate implementation of that constitutional directive that he
be deemed a having disciplinary powers to remove his subordinates, whenever he loses confidence
in their intelligence, ability, judgment or loyalty. The president’s ability to control subordinates is
manifest under the executive powers conferred upon him by the constitution so that the statutes
subject to his direction may be faithfully executed.
o Policy Need president to be able to remove executive branch officials, because needs to be
able to control executive branch and go forward with his policy agenda.
• President Can’t Control Executive Branch Officials, But He Can Remove Them President can’t force
officials to act in a certain way, decide cases according to how he wants, of force them to violate
terms of statute, but he can remove them. There may be duties exercised by subordinates of a
discretionary or judicial nature over which the president cannot exercise control. Nevertheless, the
president is free to remove subordinates who make decisions of which he disapproves.
• President’s Cabinet The Cabinet includes the Vice President and the heads of 15 executive
departments-the Secretaries of Agriculture, Commerce, Defense, Education, Energy, Health and
Human Services, Homeland Security, Housing and Urban Development, Interior, Labor, State,
Transportation, Treasury, and Veterans Affairs, and the Attorney General. Under President George
W. Bush, Cabinet-level rank also has been accorded to the Administrator, Environmental Protection
Agency; Director, Office of Management and Budget; the Director, National Drug Control Policy; and
the U.S. Trade Representative.
Humphrey’s Executor v US (1935) President Doesn’t Have Unfettered Removal Power of Officials
Independent Of Executive Branch
• Facts Humphrey appointed to Federal Trade States Commission (FTC) for 7 year term by
president. FTC Act provides that commissioner may be removed from office by the president for
“inefficiency, neglect of duty, or malfeasance in the office.” President removed him. Humphrey
brought action for back pay against US claiming he was wrongfully removed from office.
• Limiting Myers – Doesn’t Have Unfettered Removal of Agency Officials Court says Myers
only applies to purely executive offices. While its dictum may have been broad enough to
encompass all federal officers, it has no application to an agency outside the executive branch that
exercises quasi-judicial and quasi-legislative powers. FTC commissioner not purely executive official,
because has legislative and judicial functions.
o Is Agency Independent of Executive?  Doesn’t turn on what agency is doing, so much
as whether it was established to be independent of the president. For example, congress
cannot pass statute limiting president’s power of removal of cabinet member even if carries
out some legislative and judicial functions. Congress can’t insulate those cabinet officials
from presidential removal because want president to decide important policy decisions.
• FTC Independent Of Executive Branch whether congress may limit the president’s power of
removal depends upon the character of the office. The FTC was established outside the executive
branch to exercise legislative and judicial responsibilities independent of the executive. Here,
restrictions upon president’s removal power of constitutionally proper.
Bawsher v Synar (1986) President Has Unfettered Removal Power Over Officials Carrying Out
Inherently Executive Functions
• Facts President appoints Comptroller General with advice and consent of senate. Comptroller
heads General Accounting Office and investigates way that federal money is spent – supposed to be
independent of executive branch. Comptroller may be removed by joint resolution of congress for
the following reasons: permanent disability, inefficiency, neglect of duty, malfeasance, or felony or
conduct involving moral turpitude. Gramm-Rudman Act says if congress and president can’t agree
on budget then comptroller issues report deciding what budget should be.
o Court Comptroller function in Gramm-Rudman Act is executive in nature. And so
congressional control over removal of the comptroller is unconstitutional intrusion into the
executive function.
• President Must Have Power To Remove Officials Carrying Out Inherently Executive
Functions Gramm-Rudman act is unconstitutional because it gives comptroller power over the
budget which is inherently executive function, but doesn’t give president power to remove – can
only be removed by joint resolution of congress. Congress has no authority to give congressional
agent executive power – congressional agent because subject to removal by congress and long
history of being part of congress. Unconstitutional scheme for president to have power to appoint
and congress power to remove – trying to make legislative officer carry out executive functions but
president can’t remove.
• HYPO Statute Says President Can Remove Comptroller Only For Cause Statute provides
that comptroller is appointed by president with advice and consent of senate, but only subject to
removal by president for cause.
o Unconstitutional - Myer argue that this is unconstitutional because president needs to have
power to remove comptroller who is performing executive functions – budget.
o Constitutional – Humphrey argue that supposed to be independent of executive so president
doesn’t have to have power to remove. Comptroller not doing anything more executive than
SEC commissioner who we want to be independent. Comptroller is quasi legislative doesn’t
only carry out executive function so not characterized as purely executive agency.
• Congress Can Only Have Removal Power Over Purely Legislative Officials Letting congress
have authority over officers doing judicial or executive functions creates worry that congress will
start acting like the court or executive and usurping their powers. Where statute says congress must
sign off on removal, presumptively unconstitutional unless purely legislative agency.
Weiner v US (1958) Implied Removal For Cause Condition Where Agency Carries Out Inherently
Judicial Functions
• Facts Weiner appointed by President with advice and consent of senate to War Claims
Commission, body with power to adjudicate claims arising from WWII. Commission had three year
life and there were no statutory provision governing removal. President removed Weiner from office
and Weiner brought action against US for back pay.
• Focus On Nature Of Functions Performed By Agency the most important criteria in assessing

the president’s power of removal is the nature of the function performed by the office in which the
individual serves. Because WCC performed a function inherently judicial in nature, congressional
intent can be inferred that individual serving in that capacity can’t be removed from office by
president without cause. Implied for cause condition on president’s removal power
o Policy if quasi judicial agency don’t want president to have unfettered authority over it.
No inherent removal power in case like this – imply for cause condition.
• President For Cause Removal Over Quasi-Judicial Sentencing Commission - Mistretta

Sentencing Commission created by congress, statutorily in judicial branch, to formulate sentencing
guidelines to eliminate disparity in criminal sentencing. Executive has power to appoint members
with advice and consent of senate, but can only remove for cause.
o President Can Have For Cause Removal Over Independent Administrative Agency
In Mistretta have quasi-judicial sentencing commission created by congress in the judicial
branch over which president has power to remove for cause. Doesn’t violate separation of
powers. Court says congress may establish an independent rulemaking body within the
judicial branch to that extent that the commission doesn’t have vested powers that are more
appropriately performed by other branches. President can have for cause removal powers
over independent administrative agency.
• Summary Where does this leave us? Purely Executive Agency - Under Myers president must have
unfettered removal power over purely executive officers – cabinet level officers. Independent Agency
– if congress specified bi-partisan, longer terms, independent of executive then it is ok to restrict
president’s removal power.
• HYPO Congressional Removal Of Executive Officer - NLRB Chairman of National Labor

Relations Board can only be removed by president for good cause and with consent and approval of
senate.
o Unconstitutional this is unconstitutional because congress has to give consent for removal.
Bowsher says unless officer is purely legislative then unconstitutional because don’t want
congress aggrandizing power. if he is independent that’s not enough.
• HYPO Congressional Removal of Executive Officer - VA Deputy Assistant of Veterans Affairs
only removable with consent of senate.
o Unconstitutional VA is not purely legislative agency so unconstitutional for congress to
have power to remove. Any congressional involvement in removal is presumptively
unconstitutional.
• HYPO President For Cause Removal of Certain Officials Congress tells president you can
only remove the following officers for cause
o Secretary of State or Secretary of Commerce - NO President must have unfettered ability to
remove cabinet members. Unconstitutional for congress to put for cause limitation on
president’s removal power of his cabinet members. Myer – purely executive.
o Assistant Secretary of Commerce - YES Congress can put for cause restrictions on
president’s removal power of inferior officers or employees.
o Chairman of FCC - YES Congress can put for cause restriction here because FCC is
independent agency.
o Chief Judge of Tax Court - YES Congress can put for cause restriction because Chief Judge is
carrying out inherently judicial functions. Weiner
o Administrator of EPA -NO EPA is created by executive officer – not inferior officer more like
cabinet member. President must have unfettered power to remove administrator of EPA.
o Federal Pardons Commission -YES President has constitutional power to give pardons. FPC
has duty to recommend to president who he should pardon. They do not have the power to
actually grant pardons, just recommend so not restricting president’s power over purely
executive functions because president has ultimate say. Bierschbach says this is
constitutional to put for cause restriction.

• Advisory Commission If Congress creates commission that exercises president’s
constitutional power in a binding way, then president must have unfettered power to
remove. But congress can create advisory commissions and put for cause restrictions
on president’s power to remove.
• HYPO President’s Power To Control Cabinet Members With Removal Power Congress
passes law that says Secretary of Interior shall set speed limit between 35-65 for roads in national
parks. Secretary picks 50 but president tells her do 55. Secretary would give in because otherwise
president can remove her because no for cause restriction. President forces cabinet members in line
by brandishing his removal power. Must offer a reasoned explanation, and cannot change
the limit below the statutory prescribed range.
• HYPOPresident Can’t Force Cabinet Member To Do Something Outside of Her Statutory
Authority President tells Secretary of Interior set it at 75. Congress only gave secretary power to
set it between 35-65mph. President can’t force secretary to do something she has no power to do.
Even if president removes her though he still can’t set it at 75 by an executive order because statute
gives Secretary of Interior authority not president.
• HYPO Defining For Cause President has power to remove FCC member for cause. FCC deciding
whether it will regulate internet phone calls. President wants FCC to regulate it and calls up and tells
FCC member to push for regulation or president will remove for cause. President argues that
neglecting duty if not doing what president thinks is best for country constitutes inefficiency. Most
commentators say that’s not for cause. Can argue that it is for cause because need strong executive
to coordinate policy objectives and disregarding those policy objectives is cause for removal.
iii. Executive Orders
• Executive Order US Presidents have issued executive orders since 1789. There is no
Constitutional provision or statute that explicitly permits this, aside from the vague grant of
"executive power" given in Article II, Section 1 of the Constitution and the statement "take Care that
the Laws be faithfully executed" in Article II, Section 3. Most executive orders are orders issued by
the President to US executive officers to help direct their operation, the result of failing to comply
being removal from office.
• Executive Orders Are Binding On Cabinet Members

o HYPO President Can Issue Executive Order Telling Cabinet Member Factors To
Consider In Setting Law President issues executive order telling secretary, I want you to
consider the safety of park visitors and the effect on wildlife population. Secretary considered
those factors and set it at 35. Trucking industry sues saying president can’t set the law.
President can issue executive orders telling Secretary to take certain things into account so
long as the congressional statute doesn’t prohibit it. If statue says can’t use cost benefit
analysis executive order saying must use it is invalid. But if statute doesn’t exclude cost
benefit analysis then president can issue executive order. This is important way for president
to control actions by subordinate agency officials.
• Executive Orders Not Binding On Independent Agencies Executive orders don’t apply to
independent agencies.
o Executive Order12866 Bush tries to draw more agencies into the requirements.
o Executive Control Over Independent AgenciesIn terms of independent agencies presidents
do have some control. Often statutes that create the independent agency empower president
to choose chairperson, require agency to ask president to submit budget requests, DOJ
represents them when involved in litigation. People resign quit and vacancies open up and
president has ways of getting own people in there informally or formally. Within 7 months
after new president takes office usually have partisan majority on independent agencies to
having people on there sympathetic to them.
d. Relation of Agencies To Judiciary, And Separation of Power

• Agency’s Power to Adjudicate although there was once vigorous debate over the issue of
whether the legislature could delegate to an administrative agency quasi-judicial responsibilities,
such delegation has since been deemed not to violate constitutional notions of separation of powers.
• Constitution Article 3, Section 1 - “The judicial power of the United States, shall be vested in
one Supreme Court, and in such inferior courts as the Congress may from time to time ordain and
establish. The judges, both of the supreme and inferior courts, shall hold their offices during good
behaviour,” Article 3, Section 2 – “The judicial power shall extend to all cases, in law and equity,
arising under this Constitution, the laws of the United States, and treaties”
o Judges Have Life Tenure Why give judges life tenure? (1) Protecting Individual Rights –
constitution gives judges life tenure so that they remain independent, unbiased and removed
from political process of campaigning and running for reelection. Don’t want judges only to
rule in favor of those with money, (2) Separation of Powers – don’t want president and
executive to accumulate too much power, limit frequency of appointments.
o Judicial Power Extends Only To Cases
i. Congress Delegation of Judiciary Power
• HYPO Article 3 Judicial Court v. Article 1 Legislative Tribunal If dispute over your pension
would you go to War Veterans Pension Board or court.
o Court (1) no bias, (2) efficient - if going to appeal anyway then going to end up in this
court so more efficient to bring directly here.
o Legislative Tribunal (1) expertise - issues specific to service that judge won’t know
anything about. Pension board will have more expertise because have seen this stuff before
and more attune to these kinds of issues (2) efficiency – board designed to deal with these
narrow issues they will be faster processing it, better procedures for dealing with this stuff (3)
less expensive - cost more to go to court because have to get lawyer, might be able to
represent yourself in front of board.
• Policy Congress wants you in article 1 because set up to deal with those specifically.
Thousands of claims don’t want article 3 courts to be bogged down with this stuff
• Can Congress Delegation Judicial Power Over Cases? Article 3, Section 2 gives judiciary power
over “cases”. Argument made in all these cases is that judicial power vested in article 3 courts,
which includes power to decide cases and controversies arising under laws of US, and congress can’t
delegate away something it doesn’t have.
Crowell v Benson (1932)

• Facts Knudsen was injured on the job while employed by Benson. US Employees Compensation
Commission and they awards Benson compensation in agency proceeding under a federal statute.
Benson appeals saying he wasn’t my employee at the time, it didn’t occur on navigable waters, and
unconstitutional to force me to go to Article 1 Legislative court.
• What is A “Case?” case is an adjudication of a private right which involves liability of one
individual to another. When one party sues another private party under a common law claim that is a
case involving a private right. Public right cases involve citizens on one side and government on the
other – these congress can delegate to article 1 tribunals.
o General Rule Congress can delegate public rights to Article 1 courts, but can’t delegate
ability to decide private rights cases to those courts.
o HYPO Congress Delegates All Criminal Prosecutions To Article 1 Court Congress

passes law delegating prosecution of all criminal cases in article 1 court. Is that
constitutional? It is still an open question of how much of public rights congress can delegate
to article 1 tribunals.
• Congress Can Delegate Fact Finding In Private Rights Cases To Article 1 Courts This case
involves a private right, an employee suing an employer. But court says that congress to make
things more efficient can delegate authority to article 1 courts to engage in fact finding before the
case is brought to an article 3 court. But where the factual determinations involve fundamental or
jurisdictional issues, article 3 courts are free to engage in de novo review. So that article 3 courts can
independently decide whether jurisdictional requirements of the statute have been satisfied. All other
findings of fact by article 1 court will be reviewed by article 3 court using substantial evidence
standard.
o Jurisdictional Facts Jurisdictional facts are those that trigger federal power. here the two
facts that trigger application of the Employee compensation statute are (1) whether he was
employee, and (2) whether injury occurred on navigable waters. Court said these
determinations will have de novo review by article 3 court. All other findings of fact are
subject to different standard of review – as long as substantial evidence supporting article 1
court’s findings article 3 court will uphold it.
• Rule of Case Congress can delegate public rights to Article 1 courts. Congress can only delegate
private rights where there is Article 3 review which includes de novo review of jurisdictional and
constitutional facts.
Northern Pipeline (1982) Congress May Not Delegate To Bankruptcy Judge Right To Decide State
Contract Claims
• Facts Bankruptcy Act provides that Bankruptcy judges can decide bankruptcy matter and any civil
proceedings related to the bankruptcy proceeding. Bankruptcy judge heard breach of contract claim
between private parties. D refuses to go to bankruptcy court to litigate his state contract claim.
o Court Plurality of court says that congress cannot delegate to the bankruptcy court (an
article 1 court) the ability to decide ordinary state contract claims. This is private right.
• Public Right these are controversies involving rights between the government and others. If the
right is of legislative creation, it may be vested in non-article 3 forum even if an analogous function
has historically been performed by Article 3 courts. Such powers may be vested in a legislative court
or an administrative agency.
• Private RightPrivate rights involve controversies between two individuals. Brennan - two different
types of private right
o Congressionally Created Private Rights when congress creates a substantive federal
right, it enjoys substantial discretion to prescribe the manner in which that right may be
adjudicated.
o Common Law or State Law Private Rights These include other private rights for
example those created by common law or state law. Article 3 forbids substantial inroads into
functions traditionally performed by judiciary.
• Distinguishing Cromwell In Cromwell there were also private parties on both sides, and so long
as there was review by article 3 court it was upheld. Why doesn’t court allow delegation here?
Brennan says these cases are different (1) common law right – in Cromwell claim arose under federal
law – wouldn’t have existed but for federal statute. Here this is common law claim – contract claim is
much closer to core of private rights. (2) narrow delegation – the statute here can bring in lots of
disputes to bankruptcy court swallowing up many private rights, but in Cromwell grant to the agency
was narrow. (3) level of review – in Cromwell there was more substantial review of what article 1
court is deciding, than in bankruptcy courts.
Commodity Futures Trading Commission v. Schor (1986) Overrules Northern Pipeline, Affirms
Cromwell
• Facts Congress grants to CFTC the power to adjudicate ordinary stat law contract claims between
individuals. Statute created reparations proceeding where disgruntled customer could claim
damages for broker’s violation of Act. If customer uses agency procedure then the act permits the
agency to adjudicate any related state counterclaims. Customer brought proceeding before CFTC
and defendant argued state counterclaim and won.
o Court O’Connor says CFTC has authority to adjudicate state contract claim. Under this
scheme there was concurrent jurisdiction so that could go to court or to agency, so congress
not trying to usurp judiciary’s power and force litigants to go to agency. P was the one who
brought action in article 1 court, so waiver.
• Factors For Determining When Legislature Improperly Delegating Judiciary’s Powers (1)
extent to which the essential attributes of judicial power are reserved to article 3 courts, (2) extent
to which non-article 3 forum exercises range of jurisdiction and powers normally vested only in
article 3 courts, (3) origins and importance of right to be adjudicated (4) concerns that drove
congress to depart from requirements of article 3.
o Policy all these factors are taken into account to see whether there is threat of separation
of powers. Court declines to adopt formalistic rule rejecting Northern Pipeline
• Current Test the current test for determining how much judicial power congress can delegate
involves review of several factors: (1) Type + Quantity of Claims – What kinds of claims does the
statute allow to be brought in the article 1 tribunal? Is net so wide that going to draw in lots of claims
that are traditionally state or common law claims? Does the action arise from a federal statute?(2)
Article 3 Review – is there review of article 1 tribunals findings by article 3 court? What is standard of
review? (3) Separation of Power – is congress trying to unduly expand the scope of the agency’s
power and taking away power from article 3 courts. (4) Public v Private Right – if classic public right
then delegation usually ok, if private right look to see if it is right under federal statute, common law
or state law.
ii. Combination of Functions At Agency Head Level And Potential Bias
• Tension – Don’t Want Agencies To Become Too Powerful Agencies have ability to adjudicate
in same way that courts do – this is a fact of modern administrative state. But don’t want agencies to
get too powerful. Don’t want congress to aggrandize itself and take power away from courts. Tension
between efficiency and the guarantee of individual’s rights.
• Combination of Functions sometimes the agency heads must both initiate the complaint and
adjudicate it. Agency heads are specifically exempted from commingling prohibitions of APA.
Withrow v. Larkin (1975)

• Facts Dr performed abortions at his office. Wisconsin medical board instituted proceedings for
license suspension for violation of public health. Board has power to conduct investigation and
enforce provisions of licensing rules. Dr sought injunction against Wisconsin board on grounds that
commingling of investigatory and decision-making responsibilities deprived him of due process.
• Due Process Argument Larkin says this is unconstitutional because have same people who
investigate me being the ones making decision of suspension. It’s as if you get arrested police and
agents who do investigation then also sit at your trial as judge. He says that can’t be constitutional.
• Court Court says no violation of due process person investigating can be person deciding. Court
says there is a presumption of honesty and integrity that must be disproved for it to be
unconstitutional. Just the fact alone that one entity is both investigating and prosecuting doesn’t
make it unconstitutional.
• Application To Agency Heads SEC, FEC, FTC all do both. They all have agency people who come
investigate and then have proceedings or penalties and hearings also before same agency. It is
different office within agency but everyone knows each other. That makes things efficient. If this was
due process violation it would complete change the shape of the administrative state by requiring
everything to be brought in independent article 3 courts. Presumption of honesty and integrity not
going to worry about this
• Examples of Unconstitutional Combinations FunctionsThe following are examples where

courts have said that it is unconstitutional for the same agency to be doing the combination of
things.
o HYPO Adjudicator Has Pecuniary Interest In Outcome Mayor of small town’s salary
is paid from fines imposed by mayor for violations of local ordinances. You are accused of
violating ordinance, have trial before mayor and he says you’re guilty. This is due process
violation because mayor has direct financial interest in you being found guilty. The
probability of bias is too great where adjudicator has pecuniary interest in outcome.
o HYPO Indirect Pecuniary Interest State board of optometry made up entirely of solo
practitioners, half of state solo practitioners and half work for pearl vision. Association brings
complaint to state board saying pearl vision violating rules of professional conduct, and state
board suspends license to practice optometry. Is that due process violation? Does board have
pecuniary interest? They have incentive to keep pearl vision out because takes away their
business. Court says this is due process violation. Pecuniary interest doesn’t have to be
direct but can be career related interest Gibson.
o HYPO Too Indirect NJ already has too many lawyers, bar exam graded by practicing
lawyers who have incentive to reduce competition. Guy who fails bar exam sues saying due
process violation claiming examiner had career incentive to fail him. Court says this is not
direct enough – the more direct interest the stronger the claim.
II. AN INTRODUCTION TO ADMINISTRATIVE PROCEDURE
a. Principles of Administrative “Common Law”
i. Requirement of Consistency

• Administrative Common Law APA is only 60 years old, before that administrative law was judge
made law.
SEC v Chenery I (1943)

• Facts Chenerys were controlling directors of “Federals” a public utility holding company. During
reorganization of the Federals, Chenerys purchased common stock which would again give them
controlling interest in Federals so that they could retain control. SEC found that Chenerys were
fiduciaries and they were under duty of fair dealings not to trade Federal’s securities during
reorganization and breach that duty when buying up preferred stock. SEC issues order to amend plan
so that Chenerys can’t control Federals. Chenerys say SEC didn’t have authority.
o Public Utility Holding Company Act Public Utility Holding Company Act of 1935 gave SEC
broad powers to reorganize the public utility conglomerates. Allows SEC to reject new
securities issuance in corporate reorganization if it concludes that “the terms and conditions
of the issue or sale of the security are detrimental to the public interest or the interest of
investors or consumers” allows SEC to approve a plan or reorganization that it deems to be
“fair and equitable to the persons affected by such plan.” Vague Statutory Standard
• Court Court says Chenerys win! Chenery’s didn’t breach any fiduciary duty of fair dealing, nothing
in those rules say that Chenerys can’t buy up controlling share in reorganized company. So SEC
order is null and void.
• SEC Argument Not In Public InterestSEC says maybe we interpreted fiduciary duties wrong but
we can reject the plan on a lot of other grounds. Allowing incumbent managers to retain control is
detrimental to public interest. This is not in public’s interest, SEC is uniquely situated to understand
that dangers that arise when Chenerys maintain control, so should defer to us.
• Court’s ResponseAgency’s Duty To Interpret Law, Not Court Court says yes its true that SEC
could have said that this is not in public’s interest based on agency’s expertise but you didn’t say
that. You said that this breached their fiduciary duty of fair dealing and this is not a grounds upon
which statute gives you authority to strike down the reorganization plan. Court says agency has to
interpret statute, not court. This facilitates judicial review to let agency provide an explanation for
their conduct rather than have judge deciding. SEC is trying to get court to do decide whether
reorganization plan is permissible under the statute, and this is what congress wanted SEC to do.
Court doesn’t want to deal with policy making which is the job of the agency.
• Chenery Rule Court can only review reasons agency gave. Rule is that if a court finds that
the explanation agency offered for action is insufficient, court has to remand.
o Exceptions To Chenery Rule (1) If Obviously Valid – if court thinks its so obvious that
agency can easily provide a sufficient rational on remand, sometimes courts won’t remand,
they’ll just affirm. If agency made clear mistake and sufficient rationale is staring them in
face, they will uphold. (2) Bolster Agency Rationale – if agency’s reasons are pretty good,
court will bolster it and pump it up a little bit and affirm.
• HYPO Statute Does Not Require SEC To Provide Reason For Rejection SEC rejects
Federalists reorganization plan without stating a reason, but the statute doesn’t require that they
state a reason. What should court do? There is a presumption that congress was acting
constitutionally when passing statute. Level of review is rational basis – if court can find any rational
basis for statute it will uphold it. So reviewing court will have to think of reasons as to why congress
made statute. How do we square this result with court not wanting to interpret statute? Why
Different Level of Review For Agency Rulemaking Than Congressional Rulemaking?
o Check On Agency’s Power very easy for agencies to act arbitrarily and capriciously –
agencies can do whatever they want so courts need to police them more than congress.
Congress has constitutional process for rulemaking that discourages them from arbitrary
rulemaking – both houses, presidential sign off etc.

o Agency’s Responsibility To Determine How To Exercise Delegated Power Courts
say it is the responsibility of the agency to determine how to exercise its delegated power. It
is very political decision and court doesn’t want to get involved. But when it comes to
congress court says that they are coequal branch of government and they are supposed to
police agencies and offer publicly acceptable reasons.
• Analogy to Jury Instructions Jury makes finding and jury instructions are erroneous.
There appellate court won’t say even if correctly instructed would have come out
same way. If wrongly instructed, verdict overturned and new trial. View juries more
like agencies – jury’s prerogative to weigh evidence however think it should. Not
going to step in and weigh for them.
• Chenerys’ Options After This Decision Agency can offer reasons as to why not in public interest and
support their findings. They can offer alternative rationales etc.
Lemoyne- Owen College v. National Labor Relations Board (2004)

• Facts Faculty of college want to be part of union. NLRB only certifies collective bargaining units if
don’t consist of people in “managerial positions.” NLRB certifies faculty offering lots of evidence that
they are merely employees and not managers, but didn’t’ distinguish from controlling precedent.
College appeals, District court remands back to agency to distinguish controlling precedent.
• District Court Remands Case For Agency To Distinguish From Controlling Precedent
Regional director of NLRB didn’t distinguish controlling case. District court says this calls for Chenery
remand because we can’t tell what NLRB’s reasons were for treating this case different than
controlling YU case. Court refuses to substitute its own view of why precedent is distinguishable –
facilitate judicial review so that agencies make the decisions not the court. On remand NLRB will
explain why distinguishable.
o Remand Requiring an adequate explanation of apparent departures from precedent thus
not only serves the purpose of ensuring like treatment under like circumstances, but also
facilitates judicial review of agency action in a manner that protects the agency’s
predominant role in applying the authority delegated to it by Congress. The NLRB may have
an adequate explanation for the result it reached in this case. We cannot, however, assume
that such an explanation exists until we see it. We therefore remand to the NLRB for further
proceedings.
ii. Estoppel and Res Judicata
1. Estoppel
• Estoppel When person reasonably and detrimentally takes action in reliance on government’s
position, then government is precluded from changing its position later on. Generally agency must
give notice before changes its interpretation so that public’s expectations are not being upset.
Erroneous or unauthorized advice given by an agency official that contradicts a binding regulation is
usually insufficient grounds upon which to sustain a case of estoppel against the government.
o Estoppel Factors (1) actions by defendant, (2) that lead plaintiff to rely (3) reasonably (4)
to his detriment.
• HYPOMistaken Post Office ManualJeweler brings package of jewels to be shipped to post

office. Postal worker assures him that jewels are “semi precious” after consulting manual and
therefore are eligible for insurance. Jeweler buys insurance, ships the jewels and then they are lost in
the mail. The manual was apparently mistaken, and postal regulation says his jewels were precious
and therefore postal service won’t insure. Jeweler argues post office owes him money, because
shipped package and bought insurance in reliance on manual.
o No Estoppel Post office argues that if they are responsible for this error, then mail system
will bleed to its demise. If postal employees can bind government every time interpret
manual wrong way people will make claims, clog up courts, and drain of funds. As a policy
matter even though this is good argument for estoppel, when government is involved there
are often big systemic reasons for denying application of estoppel.

Office of Personnel Management v. Richmond (1990) Private Litigant May Not Recover For
Estoppel Against US Government
• Facts Richmond was welder who left his position after Office of Personnel Management (OPM)
awarded him disability retirement for impaired eyesight. Under statute disability payments end if
retired employee is restored to comparable earning capacity. Before 1982 ineligibility resulted if
retired employee’s income equaled at least 80% of former salary for two calendar years. 1982 it was
amended to 80% for one calendar year. Richmond has part time job and wants to work overtime –
but first goes to OPM and asks employee if this will make him ineligible, employee says no because
over two years. Richmond lost his disability and said government should be estopped from denying
him benefits.
• Private Litigant May Not Recover For Estoppel Against US Government

o Appropriation Clause Under the appropriation clause money may be paid out only
through an appropriation made by law – payment of money from the treasury must be
authorized by a statute. An award to Richmond under an estoppel claim would be in direct
contravention of the statute because his income exceeds 80% for one year.
o Policy
(1) Open Floodgates For Litigation – will create wave of litigation and liability for
government,
(2) Agency Will Give Intentionally Erroneous Advice – Court is worried that employees can
bind government, what if agency doesn’t like one year rule they will intentionally
advise people that it’s two year rule and people will recover. Estoppel will enable
agency to override statute. Agencies will collude with claimants to hand out money in
violation of statute.
(3) Agency Wont’ Give Advice – court is concerned that agency will stop doling out advice
so as not to be held liable. This would hurt people that can’t avoid lawyers who rely on
government’s help.
(4) Protects Taxpayers – protects taxpayer against the ineptitude and incompetence of
government workers
• HYPO Broad Appropriation Statute says $100,000 appropriated for retired navy disability
program. All that congress requires in this statute is that must be disabled and retired from navy.
Would be more likely to apply estoppel in this case. Here the money is already appropriated to
program so strong case that he should recover.
• HYPO Specific Appropriation Statute says $100,000 appropriated for retired navy disability
program. Payments to be made in accordance with provisions in this chapter. Here to be eligible
applicants have to follow procedures set out in statute. This is stronger case that giving money would
violate appropriation clause.
o Richmond Explanation Richmond says that can’t succeed on estoppel claim if payment
would be in contravention of statute appropriating money. Statutory language making
appropriation is extremely important. If says only for payment made in accordance with
subchapter stronger case shouldn’t’ get money. If just says appropriated to this program
strong case that he should.
• HYPO Contravention of Agency Regulation Not Appropriation Statute Statute

appropriating money says 80% over 2 years. OPM passes regulation saying changing it to 80% over 1
year. He asks agency employee and they say don’t worry it’s over 2 years you’ll be fine. Now his
estoppel claim is stronger, because payment would not be in violation of appropriation clause,
because statute appropriating money says 2 years. Just in contravention of agency regulation but
that’s no big deal. Here policy concern that agency will stop giving advice.
Schweiker v Hansen (1981)

• Facts P inquired whether she was eligible for her mother’s insurance benefits under the Social
Security Act and was erroneously informed by a government official that she was not.. Relying upon
that advice, she declined to file a written application for benefits. She was eligible but since didn’t file
written application she doesn’t get payments.

• Social Security Act SS Act says entitled to benefits if file application. Agency regulation says only
entitled to benefits if file written application.
o No Appropriation Clause Violation she’s not asking for money to be paid out in
contravention of the statute, since the payment complies with the statue – she made an
application to government civil servant orally. Might succeed under Richmond.
• No Estoppel Court says while employee made an error in telling her she was ineligible for
benefits, it did not cause her to take action or fail to take action that she could not correct at any
time. If employee’s breach of the manual puts him in breach sufficient to estop her, then
government is put at risk that every alleged failure by an agent to follow instructions to the last
detail in one of a thousand cases will deprive it of the benefits of the written application requirement
which experience has taught to be essential to the honest and effective administration of Social
Security Laws.
o Explanation court says yes he made a mistake but she can’t recover. Basically court relies
on policy argument. This is still good law. Schweiker her benefits are suspended only
temporarily, if it were permanent forfeiture court might have treated differently.
• Declaratory Orders under the APA (§ 554(3)) parties may secure binding advice from a federal
agency. However the issuance of a declaratory ruling is discretionary with the agency
• Lawyer’s Tip in cases of egregious facts estoppel might be available. Try to argue not in violation of
appropriation clause. try to get agency opinion in writing like SEC no action letter which will be more
binding on agency.
2. Res Judicata
• Res Judicata the general principle of res judicata prohibits a subsequent suit on issues of fact or
law already litigated and finally decided. Some efforts of administrative agencies to reverse prior
decisions involving the same parties and facts have been struck down on grounds of being arbitrary
and capricious. Other courts allow agencies to reexamine their statutory and factual conclusions and
change their minds at a later date
• Nonmutual Offensive Collateral Estoppel Example – in case 2 driver of your car sues other
driver and court finds negligence, in case 2 you sue driver of other car and say invoking nonmutual
collateral estoppel negligence already decided by other court, we don’t have to litigate it again.
Generally it is available in federal court if D have full and fair opportunity to litigate claim and it’s
allowed under sate law.
United States v Mendoza (1984) No Nonmutual Collateral Estoppel Against Government

• Facts Mendoza challenged US government’s failure to implement law facilitating nationalization of
alien veterans. 68 Filipinos had already prevailed on the same claims in district courts –violation of
due process. US didn’t appeal.
• Mendoza’s Collateral Estoppel Argument Mendoza says you violated my due process and you
are estopped from claiming otherwise because court already decided arising out of same facts that
due process violated. Don’t have to relitigate this. Invokes offensive non-mutual collateral estoppel.
• Nonmutual Collateral Estoppel Not Available Against Government Court says offensive non
mutual collateral estoppel is not available against the government because don’t want to force
government to appeal every adverse judgment.
o Waste of Judicial Resources court says don’t want government to have to ignore budge
concerns and government interest in alleviating crowded court dockets by appealing all
adverse decisions in order to prevent elimination of further review. Wasteful for government
to have to appeal every case so that decisions won’t be used against them in future.
o Political Argument decisions about whether government will appeal are very political. Every
single appeal from adverse judgment must be authorized by Solicitor General who has
centralized oversight to make sure government taking consistent litigation positions, and
that position jives with political and policy priorities of executive. If court forces government
to appeal this would force them to ignore policy decisions they generally take into account.
• HYPO Inter Circuit Non-Acquiescence SS administrator decides that soft tissue damage does
not meet disability requirements. Agency implements this view by denying disability benefits to soft
tissue damage applicants and ALJ in DC affirms it. Applicant appeals to DC circuit and court says
can’t deny benefits. You are ALJ in NY and people making claims for soft tissue damage. Still SS's
position that not eligible for disability. What does ALJ do?
o Follow Boss ALJ would probably follow SS administrator because job is to implement law the
way administration sees it. Argument that not court’s job to say what law is.
o Inter Circuit Non-Acquiescence sometimes agencies refuse to acquiesce to interpretations
of courts in other circuits – they’re not bound by that judgment. Why not acquiesce? Different
party different facts, hoping party won’t appeal, make point because believe in
interpretation. Policy is that non-acquiescence rule is necessary to generate circuit
disagreements that will eventually produce a clarifying resolution from the Supreme Court.
Controversial some say this violates Marbury v. Madison
• Courts Can Refuse to Acquiesce Until “Law of Land” By Supreme Court
Ruling.
b. The Administrative Procedure Act
APA – Administrative Procedure Act

• Definitions § 551 APA Establishes procedures agency has to follow if engaging in rule making,
important to understand statutorily what these things mean and that’s what definitions deal with.
o Agency “means each authority of the US government, but does not include (A) Congress,
(B) the courts of US.” APA applies to any entity exercising government authority except for
congress and judiciary.
o Rulemaking“agency process for formulating, amending, or repealing a rule.” Anything
that leads to rule is rulemaking
• Formal v Informal Rulemaking different procedures required for formal and informal
rulemaking. Formal rulemaking § 556 + § 557. Informal rulemaking § 553
o Rule “the whole or part of an agency statement of general or particular
applicability and future effect designed to implement, interpret or prescribe law or
policy”
• “Particular Applicability”Language is confusing. Why include “particular
applicability?” because certain kinds of rules apply to one or two people and want to
include that in rulemaking procedures. For example rate making for utilities.
o Adjudication “agency process for formulating an order” Anything that leads to an order is
adjudication.
o Order “the whole or part of a final disposition, whether affirmative, negative, injunctive, or
declaratory in form, of an agency in a matter other than rulemaking but including
licensing.” Anything that’s not a rule except licensing.
• Order is Catchall Order includes actions that agency takes like entering into
contracts, grant-making, advice, informal actions.
• HYPO SEC Rule or Order? SEC proceeding where SEC determines “Gordon violates securities
act as we interpret it, and so is bared from practicing before SEC.” It fits into rule definition – agency
statement of particular applicability having future effect interpret Securities Act. But really more like
an order.
• HYPO NLRB Rule or Order?NLRB issues statement saying faculty of YU are hereby certified as
bargaining unit under National Labor Relations Law. This also fits into statutory definition of a rule
but seems more like an order.
o Both Orders Everyone agrees despite language of statute that both of these are orders
under APA.
• APA Chapter 7 - Judicial Review Lays out basic framework for Judicial Review of agency action
o § 701(a) Presumption of Judicial Review of Agency Action “This chapter applies except
where (1) statute precludes judicial review or (2) agency action is committed to agency
discretion by law.” Default rule is yes judicial review.
o § 702 Right of Review This section deals with standing who has right of review.
o § 706 Scope of Review This is most important section and sets out standard and scope of
judicial review. “reviewing court shall decide all relevant questions of law, interpret
constitutional and statutory provisions, and determine the meaning or applicability of terms
of agency action.” Talks about when court can set aside agency action etc.
c. Rules, Orders, and How To Choose Between Them
i. The Constitutional Distinction Between Rulemaking and Adjudication
Londoner v Denver (1908) Adjudication – Oral Hearing Required

• Facts Londoner was a property owner who objected to a tax assessment by the city of Denver
based upon street improvements. Under Colorado statute the board of public works might order he
paving of a street, followed by an apportionment of its costs among property owners. Before
assessment city of Denver was required to afford parties notice and opportunity to file written
objection. Londoner contends that he is constitutionally entitled to oral hearing.
• Procedure For Street Improvement The process is four steps, (1) board of public works transmits to
city council resolution authorizing paving of street after petition is filed by majority of owners of
property fronting the street and after notice and opportunity for hearing on that petition. (2) city
counsel receives petition and passes ordinance adopting the resolution. (3) paving and board of
public works figures out what costs are and then they apportion that cost through assessment on
owners of property fronting the street. (4) counsel then has to approve and adopt the assessment via
ordinance after notice and opportunity for written objection.
• Oral Hearing Requirement Court says constitutional minimum due process requirement for
taking property is oral hearing. City of Denver was required to offer parties notice and opportunity to
be heard at some point before the tax became irrevocably fixed. “Where the legislature of a state
instead of fixing the tax by itself, commits to some subordinate body the duty of determine whether
in what amount and upon whom it shall be levied, due process of law requires oral hearing before
final.” Court implies if legislature had levied the tax oral hearing wouldn’t’ be required.
o Why Need Oral Hearing?
• Participation Oral hearing is more participatory, everyone can come in and say
what’s on their mind.
• Processing Remarks More likely decision maker will process what you say if he has
to be there to listen and he can’t ignore you. Much more effective than letter.
• Accuracy Hearing may contribute to accuracy when issues simple. Can be cross
examined go back and forth. Increases level of detail.
Bi-Metallic Investment v State Board of Equalization (1915) Rulemaking – Oral Hearing Not
Required
• Facts Denver real estate owner sought to enjoin State Bard of Equalization from increasing the
valuation of all taxable property in the city by 40%. P argued that since he was given no opportunity
to be heard, his constitutional right to due process had been violated.
• Court – No Oral Hearing Required when a large number of individuals are affected by agency
action, it is impractical that they each be given a formal hearing otherwise machinery of government
would break down. The action taken here were analogous to that regularly performed by the
legislature. Even though the legislature can significantly affect the property of individuals there is no
constitutional requirement that a hearing be held before such action is taken.
o No Due Process Violation court says that there was no due process violation here (1)
process was sufficient – there was some process, time for hearing was fixed to submit written
objection but didn’t allow oral objections at hearing, (2) impracticable too many people
affected this is like legislative action which doesn’t implicate due process requirement of
oral hearing – would be impracticable if required oral hearings giving each person effected
which is whole city opportunity to be heard and nothing would ever get done.
• Remedy – Lobbying Court says the recourse provided for such action, is not to get due process
hearing, but to lobby to lawmakers to change the law. Lobbying is effective political remedy because
if enough people affected that complain to their elected officials then will change the law. But if small
group not going to be effective lobbying. But if Bill Gates effected he has political muscle to change
the law.
• Londoner + Bi-Metallic In Bi-Metallic court is effectively saying this is legislative type process
and calls for legislative type response which is lobbying. In Londoner court says this is more like
adjudication, small group of people and remedy available to them is due process.
o Adjudication v Rulemaking these decisions illustrate the fundamental distinctions between
adjudication and rulemaking. As the supreme court noted, there is a “recognized distinction
in administrative law between proceedings for the purpose of promulgating policy type rules
or standards on the one hand, and proceedings designed to adjudicate disputed facts in
particular cases on the other.”
• Basing Rulemaking v Adjudication Distinction On Amount of People Affected Doesn’t

Always Work.
o Adjudication Affecting Large Group of People In class action litigation thousands of people
effected by private party or government action and use judicial remedy to try to repair it. Not
clear that hearing requires everyone to come into court can have main plaintiff with class
action type procedure.
o Legislation Affecting Small Group Of People  Price Regulation- Utility rates legislative
action that only effects small number of people or casino regulations but only one or two
casinos in state. Would that become an adjudication because only a few people? No. Would
still be legislative type of rule.
• Tricky to say if effects large group of people then legislative decision, because
possible to have adjudication that affects large group of people like in injunctive
proceeding.
Adjudication Rulemaking
• Effects Individuals Or Small Groups • Effects Large Groups Or Classes
• Judicial Type Remedy (Injunction, • Remedy In Political Process (Lobbying)
Damages) • Statutes Are Prospective
• Retrospective Effect • General Applicability
• Particular Application • Legislative Facts (Economic Policy, Broad Data
• Adjudicative Facts (Who, What, Where, Gathering)
When)
Southern Railway v. Virginia (1933)

• Facts Highway commissioner of Virginia, acting under VA law, without notice or hearing ordered RR
to eliminate a grade crossing and construct an overhead passage. RR refused arguing that the
procedures employed failed to satisfy due process.
o Court Court says violates due process. Clearly a requirement to expend money to
eliminate a railway grade crossing a construct a bridge in its place constitutes to the taking
of property. Since the statute conferring powers includes no provision for a hearing or judicial
review it is unconstitutional.

• Adjudicative Facts Adjudicative facts are those surrounding the actors in an agency proceeding
(what happened, who did it, when, where, why, and how). Adjudication is more narrowly focused to
parties effected.
o Southern Railway Adjudicative fact highway commissioner will eliminate this particular
grade crossing he’s going to focus on interests of effected parties, whose complaining,
people who live around this crossing and those who operating RR.
o Londoner if looking at how much assessment for paving this road thinking about who what
where when of what happened in past. How much did this cost, who did it effect, how much
will it last.
• Legislative Facts Legislative facts are the general facts to which the agency looks in deciding
questions of law and policy. Legislature takes everything into account.
o Southern Railway legislature when deciding to eliminate grade structure thinks of cost
benefit analysis, have committee reports. Solicit views from RR, operators, people in
effected area, city. Ask for advice from highway commissioner, lobbyists. Fact gathering they
do when making broad policy. This is a legislative fact.
o Bi-Metallic decision to raise taxes on entire county of Denver. What informs that decision?
If deciding how much need to raise taxes for entire city look to how much revenue city
needs, what effect has on spending of property owners. Economic considerations at large.
Economic policy decision
• HYPO Zoning Permit Ordinance says no land may be developed without zoning permit from
board of trustees. Ordinance doesn’t have any criteria for board of trustees to review applications.
Developer applies for permit and board without a hearing says no. developer sues saying due process
violation and that he’s entitled to hearing.
o Adjudication Sounds like adjudication. Individual developer. Judicial type decision,
retroactive in sense all facts already before court, to develop this land in this way. Under
Londoner seems hearing required. applying ordinance to individual seems adjudicative.
Posner says this is rulemaking but he thought Londoner wrongly decided.
• HYPO Rent Controls Congress passes statute saying Administrator can recommend maximum
rents in certain areas. If that still doesn’t alleviate the housing problem then Administrator can
impose rent controls. After trying maximum rents and failing Administrator imposes rent controls in
war time. Landlord charges higher prices. When would a hearing be required?
o Not Entitled To Hearing When Rent Controls Imposed when sets the general price that is
very broad rulemaking no right to hearing.
o Entitled To Hearing When Landlord Refuses To Comply, And Administrator Orders
Reduction Then landlord comes in charges prices hire administrator orders reduction in
price is there right to hearing then? Yes that’s when hearing is triggered. What benefit is he
getting from hearing?  he can generate some kind of controversy and political push back.
but can’t get rule to be more favorable now.
• Distinguishing Bi-Metallic if plaintiff had not paid his taxes and would have tried to
impose penalty without hearing he would have had right to hearing.
Yesler Terras Community Council v Cisneros (1994)

• Facts HUD rules are that public housing tenant can only be evicted after a grievance hearing in
front of a public housing authority. In cases of criminal evictions HUD can bypass the procedure if it
certifies a regular state court eviction procedures as satisfying due process. HUD certified Washington
state eviction procedures as satisfying due process. P is evicted without grievance procedure and
sues.
o Court Court agrees with Plaintiff that this was rulemaking and not informal adjudication, so
under APA § 553 required to provide notice and opportunity for comment. HUD didn’t’ give
any effected parties a chance for notice and comment so therefore rule was invalid. Required
to have notice and comment and didn’t so unconstitutional.
• Plaintiff Argues It Was Rulemaking HUD treated this certification of Washington eviction
procedures as an adjudication – order stemming from an informal adjudication. Court maintains that
HUD’s certification met all the hallmarks of a rule – it had no immediate effect on anyone but
permitted to evict in future without grievance, and at same time affected rights of broad category of
individuals not yet identified.
• Distinguishing Rule From Adjudication Court says there are two principle characteristics that
distinguish rulemaking from adjudication:
1. Effecting Specific v Broad Class of People adjudication resolves disputes among specific
individuals in specific cases whereas rulemaking affects the rights of broad classes of
unspecified individuals.
2. Prospective v Retrospective Application because adjudication involves concrete
disputes they have an immediate effect on specific individuals involved in the dispute.
Rulemaking is prospective and has a definitive effect on individuals only after the rule is
applied.
• Argument That It Was Adjudication HUD’s attorney could have argued under APA §551(8) this was a
license and not a rule. Court doesn’t pay much attention to statutory definition. Just says here’s
definition and looks at its own considerations.
ii. May the Agency Make Rules?
• Congress Can Empower Agency Only To Adjudication Or Make Rules Or Both Can congress
tell agency you are empowered to do xyz only by adjudication. Yes. Congress creates agencies can
tell them what they want so long as doesn’t violate constitution.. If statute does that that it is grounds
to challenge agency who proceeds in way not specified by statute.
National Petroleum Refiners Association v FTC (1973)

• FactsFTC promulgated rule declaring that gas stations must post octane ratings on pumps. Failure
to comply was declared to be an unfair method of competition under the FTCA. Petroleum companies
argued that congress did not give FTC rulemaking authority, it only has power to proceed by
adjudication.
• FTC Needs To Be Able To Make Rules Court agrees that under the statute it is a stretch to say
that congress empowered FTC to make rules. But on policy grounds court says that FTC needs to be
able to make rules or wouldn’t be able to do their job effectively.
• Why Rulemaking Better Than Adjudication The use of rulemaking may be fairer to those
regulated than case by case adjudication.
o Public Comment Rulemaking opens up the decisional process to a broad range of criticism,
advice, and data that is ordinarily les likely to be forthcoming in adjudication.
o More Notice To Parties Notice and wide public participation avoid the inequity of singling
out a single defendant among a group of competitors for initial imposition of a new and
inevitably costly legal obligation. Since rate are more specific than adjudicatory quasi judicial
policy, industry compliance is more likely simply because each company is on clearer notice
whether specific rules apply to it. If adjudication know someone else held liable but still don’t
know if it applies to you.
o Efficient rule would say if don’t post then it’s deceptive. They still might have to bring an
action against people who violate the rule but now issue is did you violate it and not is it
unfair trade practice. This saves lots of adjudicatory resources and judicial resources.
o Opportunity To Comply if issue rule, parties have opportunity to comply with rule
o Treats Everyone Equally rulemaking treats everyone alike and doesn’t make examples of
certain people
• Policy Reasons Against Adjudication overbroad rules or under inclusive. Wont’ cover
every situation you need it to. Takes long time for rules to be implemented.
Sometimes safer to proceed incrementally - efficiency cuts the other way. Might not
want to lock yourself in
• What If Proceeded By Adjudication FTC would issue cease and desist letter to parties, have oral
argument on whether it is unfair or deceptive. Then once court rules in FTC’s favor they’ll have to
bring another suit, and another.
Airline Pilots Association v. Quesada (1960)
• Facts Airline Pilots Association issued a ruling saying that “No individual who has reached his 60th
birthday shall be utilized or serve as a pilot on any aircraft while engaged in air carrier operations.”
They went through notice and comment but didn’t have oral hearings because decided wouldn’t
serve useful purpose and not in public interest. P argues this was not a rulemaking but was an
adjudication and so he was entitled to oral hearing before took away his property – license to fly
planes
• Plaintiff Argues This Is Adjudication Plaintiff argues that this is effecting very limited pool of
people, therefore they should have had a more individualized right to a hearing. Court says this was
antithesis of adjudication - it was the formulation of a general rule to be applied to individual pilots at
a subsequent time.
(1) Due Process – they have license to fly planes, and being deprived of that license by this
rule that says if over 60 can’t. Required to have oral hearing before taking away their
property under APA,
o Court court says this really is general rule not individual so due process doesn’t
apply. Court says for safety reasons - this is judgment about safety which
outweighs concern about property. Idea of private property is subject to
reasonable limitations that flow from general rules.
(2) Federal Aviation Act - whether one labels the issuance of the regulation rulemaking
or not, § 609 of the Federal Aviation Act requires the Administrator to hold a hearing and
permit each pilot affected to submit evidence as to the fairness of the regulation before his
certificate can be amended.
o Court court says that this provision of FAA only applies when reexamining a
person’s license and doesn’t apply when agency makes a general rule.
• Eliminating Right To Hearing By Rule FCC charged with giving broadcast licenses. Under statute if
your application is turned down you’re entitled to a hearing. FCC passed rule saying its not going to
grant licenses to applicants that already have 5 or more stations. Party sued saying applied to for
license and was turned down because had 6 stations. Argued you can’t foreclose my right to hearing
through a rule and supreme court says yes you can if the rule is valid.
iii. Must The Agency Make Rules?
SEC v. Chenery II (1947) Agency Not Required To Proceed By Rulemaking

• Facts On Remand SEC issues another order rejecting the Federlist’s plan of reorganization.
Chenery challenge that agency can’t proceed by adjudication but must proceed by rulemaking.
• Court Says SEC Not Required To Proceed By Rulemaking Court refuses to hold that
announcement of new policy must always be accomplished prospectively through rules. Court says
agency should have flexibility to announce new policy through rulemaking or retroactively through
adjudication and this choice should be in discretion of agency.
o Not Ready To Make A Rule Court says agency needs flexibility to choose because, might be
problems which doesn’t have enough experience with yet to pass rule, or problems so
specialized or varying in nature (fact specific) as to be impossible of capture within the
boundaries of a general rule, or might want to proceed incrementally
o Agency’s Discretion Court says so long as statute empower agency to engage in both
rulemaking and adjudication, the agency has discretion how to proceed.
• Jackson Dissent Retroactive Legislation This is basically retroactive legislation – no fair

warning of what’s going to happen, and broad grant of authority for FTC to decide what kind of plan
to approve. you shouldn’t be allowed to take away property with flimsy order. This is retroactive
upset to the Chenerys’ expectations through a retroactive announcement of a new order. Jackson
thinks they should have proceeded by rulemaking that way the rule would have been prospective so
that Chenerys’ or people like them have notice. Unfair to spring it on people without notice.
o Majority response to retroactivity argument Every case of first impression is in some sense
retroactive. We’re not going to worry about it.
o Too Much Delegation To Agency Court says it’s up to agency to make general policy
determinations and so remanded to agency. But Jackson thinks that granting too much power
to agency, they can make up arbitrary reasons, and at least if have to proceed by way of rule
it is taking away property in such a way this is prospective and puts people on notice.
• In Londoner the agency tried to do an adjudication by passing a rule and the court says this was really
a rulemaking and required to provide opportunity for oral hearing. In Chenery II agency uses
adjudication to make a rule, and court allows this.
• Lawyer’s Tip litigants can always argue that agency doesn’t have authority for rulemaking or
adjudication under statute.
• Sudden Change of Agency Policy There are some cases where some adjudications are so
unexpected that even if statutory authority is there, Court might strike down because the policy
change is so different (either make them do by rule, or only apply prospectively). if agency changes
position in adjudication, court will hold to higher standard.
III. AGENCY ADJUDICATION AND THE DUE PROCESS CLAUSE
a. The Emergence of The “New Due Process”
• Constitutional v. Statutory Procedural Requirements We know from Londoner and Bi-

Metallic, when you do adjudication Due Process applies, but in rulemaking it doesn’t. For adjudication
generally, Due Process and the constitutional floor is the more important. For rules, it’s the statutory
standards that govern (since Due Process not apply to rules) Most of the time the applicable statute
(APA and organic statute) and the agency’s own rule will usually establish procedures above
constitutional floor.
• Due Process “No person shall be deprived of life, liberty, or property, without due
process of law” Due process clause in 5th amendment applies to federal government and 14th
applies to states. Just the fact that government hurt you doesn’t mean entitled to due process, must
be deprivation of life, liberty, or property. But as long as government jumps through the right
procedural hoops then it can deprive person of life, liberty or property.
o Due Process Analysis (1) Does due process clause apply? Is this Life, liberty or
property? (2) How much process is due?
o Londoner says process is due if tax applying to small group of people, how much is due, must
have oral hearing written objection is not enough. Bi-Metallic says process not due because
this is rulemaking.
• Evolution of Due Process

o Erosion of Privilege Concept the growth of government and its incensing and welfare
functions made inevitable the result that adherence to strict notions of privilege would have
onerous consequences. Justice Frankfurter argued in 1950 that merely because the interest
conferred is deemed to be a privilege does not warrant the conclusion that government may
revoke it arbitrarily
o Privilege-Right Distinction on The Run beginning in the 1960’s several federal courts
began to view the privilege-right distinction as archaic and ill-conceived. Even though a
person held no right (to a liquor license, or to travel, for example)the courts held that
government could not deprive an individual of a liberty or property interest without due
process of law
o Due Process Explosion Goldberg v Kelly decision is high water mark holding of supreme
court on question of what process is due.
EXERCISE – WHEN IS PROCESS DUE?

1. Alice is bus driver for local public transit authority. Her employment is at will. She ahs just
received pink slip informing her that she is being discharged. Alice wants a hearing
o Her employment is at will she doesn’t have right to hearing
2. Bert lives in a small town where police chief routinely circulate to shopkeepers a flier picturing
“suspected shoplifters.” He just learned that his face appears on the flier and police wants to
distribute. Bert wants a hearing
o Seems bad because it is a badge of infamy, he should have right to hearing because
don’t know if charge is accurate or just someone who hates him.
3. Cathy has just learned that the state highway department has decided to condemn her house by
eminent domain in order to demolish it and build an interchange for a new federally assisted
highway. Cathy wants a hearing
o This is taking her property, nature of loss and history of government giving hearings so
she should have too.
4. Donald owns a chain of hotels and casinos. He has just learned that the local district attorney
has decided to seek indictment against him fro defrauding the public. Donald wants a hearing.
o Liberty, must have hearing
5. Ernie owns a small machine shop. His shop has been cited by local safety inspector, who said the
company must install safety railings at considerable cost of else shut down. Ernie wants a
hearing.
• Things to Consider the following are things to consider in determining whether there is due
process violation. (1) Nature of loss (2)History/Past Practice (3) Accuracy (4) Text (meaning common
law right of reputation is not as important as liberty interest) (5)Availability of other Remedies (6)
Government Interest (7) right vs. privilege (8) value of additional procedures (9) “Dignity” (10)
legislative facts (11) Gov. Efficiency
Bailey v. Richardson (1950)

• Facts Bailey hired by US government, who had right to fire her if investigation disclosed she was
disloyal to government. Government fired her after learning that she was communist. Government
informed her that learned that she was communist. She had hearing with witnesses and testified at
proceeding. Government fired her. She wants hearing with cross examination
• Question 1 Due Process Clause Doesn’t Apply government employment is neither a liberty
nor a property interest, so due process clause is inapplicable. So not entitled to hearing before
dismissal.
• Question 2 Bailey Thinks More Process is Due Bailey complaining that she didn’t get all the
process that was due, she wants to cross examine the other side. Court doesn’t’ even address this
question, it says you don’t get past question one because not deprivation of life, liberty or property.
Greene v. McElroy (1959)

• Facts Greene was executive for a defense contractor, lost his security clearance because of alleged
association with communists. At hearing, P denied charges and US produced no witnesses.
• Court Doesn’t Address Due Process court doesn’t talk about due process, but say it was unfair.
Court says because we’re concerned about fairness, we will read statute so that it doesn’t delegate
authority to do this troublesome procedure (this is same as Kent).
o Constitutional issues of due process can be avoided because case is decided on other
grounds. Where government action seriously injures individual, and reasonableness of the
action depends on fact findings the evidence used to prove the government’s case must be
disclosed to the individual so that he has an opportunity to sow untrue.
o What About Kent Kent it was the same procedure, didn’t get to hear other side’s facts.

Bailey is different court, earlier decision might have been different statutory scheme.
Cafeteria Workers v. McElroy (1961)

• Facts Brawner had worked for more than six years at government cafeteria on security base.
Department of defense revoked her security clearance without hearing or explanation because failed
to meet security requirements. Brawner argues that she should be advised of specific grounds for her
exclusion and be accorded a hearing to refute them.
• Analysis Analysis is confusing. Court says not deprived of life liberty or property because she has
no constitutional right to be on the security base in the first place. But doesn’t stop at question one,
court goes on to question two and says the only process that is due is non arbitrary and capricious
discharge. Court admits even at will employee can’t be fired for arbitrary or discriminatory reasons,
based on religion for example. But when reason for discharge are rational no hearing required.
o it’s not clear that she needs hearing here, it’s also not clear that because you can’t fire
because of someone’s religion, that the job is a property interest, it’s almost embracing the
privilege versus right distinction, though it doesn’t say that.
Goldberg v. Kelly (1970) Due Process Requires Pre-Termination Hearing

• Facts Welfare recipients challenged NY procedures which sought to terminate their welfare without
a formal pretermination hearing. The procedure was written notice, a pretermination opportunity to
submit a written response, termination of welfare payments, and a post termination opportunity for a
formal oral hearing. If the welfare recipient prevailed at the formal hearing, she would be paid all
monies erroneously withheld. Plaintiffs argue that entitled to hearing before benefits are terminated
not after.
• Question 1 Welfare Benefits Are Property government doesn’t even try to argue that welfare
benefits aren’t property because AG knows not politically popular to make that argument, or maybe
decided we’ll win on question two. Even though government doesn’t argue it, court still as to address
it.
o Statutory Entitlement Is Property Interest Statute creates property right, court cites
article and in end concludes that welfare benefits do constitute property.
• Individual Rights + Social Welfares – Reich it is more realistic today to regard
welfare entitlements as more like property than a gratuity. Much of existing wealth in
this country takes for of rights that do not fall within traditional common law concepts
of property. Social security no longer regarded as luxuries or gratuities, to the
recipients they are essentials, fully deserved, and in no sense a form of charity.
• Question 2 Oral Pretermination Hearing Required welfare recipient is without financial

resources, beyond those provided by government. It would be unconscionable to terminate benefits
without a pretermination formal hearing in the face of this brutal need. Extent to which individual is
entitle to procedural due process is largely influenced by extent to which would suffer loss.
o What Process Is Due?  Court says statutory “fair hearing” provides recipient with full
administrative review. Court lists extensive procedures, need oral testimony, cross
examination of adverse witnesses, can bring attorney, impartial decision maker, opinion with
formal findings and statement of reasons for findings, full record.
• Balancing Test For Determining What Procedures Are Due Where does court
get these procedural requirements from? Court draws them from some preexisting
concepts of notice and opportunity but must be balancing between what you’re taking
away from the person and the administrative cost of the procedure requiring
government’s interest in conserving fiscal, administrative resources. Here they said
pretty grievous need and procedures are not that harsh. These procedures are
valuable because court makes assumption easier for poor people to get point across
in oral proceeding.
b. When Is Process Due?
Board of Regents of State College v. Roth (1972)

• Facts Roth hired as professor by Wisconsin State University for one-year term and wasn’t rehired at
end of term. Roth claims failure to give him hearing violated 14th amendment.
• Question 1 No Property Interest In Employment After One-Year Term Court says this is
not about your need to keep your employment but about whether you have a statutory entitlement to
that specific employment. Which he doesn’t. Court says we look to see whether there is any legal
entitlement. There is no state law saying you have right to employment past one year term of
contract you signed, so no property interest here. Property interests are defined by whether there is
independent legal entitlement.
o Liberty liberty interests embrace the pursuit of happiness: the right to contract, to engage
in one’s occupation, to acquire useful knowledge, to marry, to establish a home and raise
children, and to worship god. Here O’s reputation has not been injured, his right to
employment elsewhere has not been infringed.
• ExplanationIn order to have a constitutionally protected property interest, the individual must have
more than a unilateral expectation to it. He must have a legitimate claim of entitlement. Property
interests are not created by the constitution, but step from an independent source, such as state law.
Here P had no legitimate claim to reemployment after his one-year term.
Perry v. Sindermann (1972)

• Facts Sindermann was involved in a public disagreement with the Board of Regents, and so the
Board voted not to renew his contract, issuing a press release setting forth allegations of
insubordination. Sindermann brought 1983 action alleging removal was in retaliation for exercise of
his 1st amendment rights.
• Question 1 Yes Property Interest In Tenured Employment Is there property right?

o LibertyFirst the court held that if the Board’s failure to renew Sindermann’s contract was
in retaliation for Sindermann’s exercise of first amendment rights, that action would be an
unlawful infringement of constitutionally protected “liberty” regardless of the fact that
Sindermann lacked tenure or a contractual right to renewal. Government may not deny a
benefit to a person on a basis that it infringes his constitutionally protected interest,
especially his interest in free speech. So he was entitled to oral hearing to prove his
allegations that failure to renew was based on exercise of his free speech.
o Property Second, court considered Sindermann’s claim that despite the absence of a
formal tenure system at the college, there was an informally system of tenure that gave him
a “property’ interest in continued employment, protected by due process, requiring that he
be given an administrative hearing before board decides not to renew. This is not merely his
expectation that had tenure but court takes into account objective evidence of his legitimate
claim of entitlement. Court says all these things gives him chance to get him over hump of
question 1.
• School PolicySchool policy says has no tenure system but that faculty should feel
that has permanent tenure as long as teaching satisfactory etc. Argued that this really
was tenure, so property right created by school policy.
• Sindermann’s Expectation Is court endorsing idea that Sindermann thought would get reappointed
and had job security and therefore he has property right? No. Court says can’t have unilateral
property right. Not endorsing he thought have right then have property interest. Must be some
objective evidence of legitimate claim of entitlement. Not just statute or regulation but can be
informal practice or custom.
• Sindermann + Roth In Sindermann there is provision in faculty guide saying that basically has
tenure. Suggested that if worked 7 years would continue to renew. In Roth it was one year contract
with no right to renew or implication of renewal.
Town of Castle Rock v Gonzalez (2005)

• FactsGonzalez gets restraining order against her husband and asks police to enforce it. Husband
kidnaps kid and murders the child and then commits suicide. Police had duty to use all reasonable
means to enforce the restraining order. Gonzalez claims that she had a liberty and property right, and
police deprived her of entitlement to that right by not enforcing restraining order. She was denied
enforcement without some kind of hearing.
• Question 1
o Liberty Does she have liberty interest here? Not traditional liberty right to contract, to
marry etc.
o Property Did Colorado law give Gonzalez a property interest in having restraining order
enforced by police? Gonzalez claims that state establishes property right and that she can’t
be denied enforcement of that right without some kind of hearing. Court says we do not
believe that the provisions of Colorado law truly made enforcement of the restraining order
mandatory. Because well established tradition of police discretion exists with mandatory
arrest statutes.
• Dissent Dissent says restraining order says that this “shall enforce” language was put in
restraining order because police weren’t enforcing them in domestic violence cases. So they were
meant to be mandatory statutes. Scalia majority responds “property” usually means something with
ascertainable monetary value. Maybe more mandatory than traditional property rights, but not
completely mandatory, so doesn’t give right to her. Property usually something that has
ascertainable monetary value. Well if she didn’t have right to enforcement she could hire private
protection maybe she would move, work shorter hours, different house, install alarms. Lots of things
clear monetary value that wasn’t doing because she got this restraining order.
• REVIEW - Question 1 Analysis Is There Life, Liberty Or Property Interest Being Taken
Away?
o Liberty Roth says liberty includes traditionally recognized concepts, right to worship, right
to marry, right to contract. Also includes reputational harm so great that impinges on liberty.
o Property traditional property interests are land, or tangible personal property. But
property also includes Do you have legitimate claim of entitlement to something? New
property rights include welfare benefits, disability benefits, government employment.
Sindermann says claim of entitlement could be based not just on state or federal law but also
on government’s customs, policies or well established practices. But property doesn’t include
subjective expectation. Not every scheme that impacts private interests creates a property
right, must have some ascertainable monetary value. Breyer and Souter don’t go so far as to
say you have property interest in a process,
• HYPO Property Interest Depends On State LawTwo different sate statues? Statute A says
“civil servants have right to continue employment unless and until misfeasance or nonfeasance.
Employees shall be terminable upon written notice from the state.” Statute B says “civil servants
have right to continue employment unless and until state sends them written notice charging them
with misfeasance.” Civil employee is dismissed and argues entitled to oral hearing. Who has
stronger claim?
o Statute A Is this liberty or property interest? Statute says have right to continue
employment and can only be dismissed for cause so this triggers property interest under
Roth. Generally courts say if you’re protected in your employment and can only be dismissed
for cause then that is property right.
o State B Is this property interest? State can simply send them letter saying charging you
with malfeasance and they’re fired. Statute doesn’t even say they have to be rightly charged
or charged on sufficient evidence. Maybe there is no property interest here. Roth says
whether have property rights depend on the state’s law.
 Substantive Right + Procedural Safeguards  Can argue that there is property
right in both because the only distinction is the process that entitled to rather than
the actual property right. This is argument Rehnquist made in dissent in Laudermille
where statute in A seemed to grant property right, but if reworded it wouldn’t have
conferred property right. There is clear sharp line between the substantive scope of a

right and the procedural safeguards of that right that the statue ensure.
• Yes Property A, No Property B the way the law stands now a state could get
away with the wording in statute B so that doesn’t give property right. Can
argue that can take away procedural safeguards because government
• Yes Property A, Yes Property B there is substantive due process. The role of
courts is to provide an independent check on the procedures states use to take
away substantive rights. We don’t trust sates to apply procedure fairly when
taking away rights. So if state establishes a property right courts have to make
sure those procedures are fair. But if state wants to rewrite statute not to give
a right then not court’s problem.
• HYPOCity Defines For Cause Employment City ordinance defines policemen as permanent
employees. Then goes on to say that permanent employees can be dismissed without a hearing if
employee fails to perform up to standards of job. Police is fired and sues saying he is entitled to
hearing.
o Property? does he have property right here? If just look at statute seems like he has
property interest because employment with for cause termination. But as defined by scope of
procedure city gives doesn’t seem to be real property interest.
• HYPO Property Or Breach of Contract City school hired part time coaches to work 20 hours
per week for one year. Contract will be renewed so long as work is satisfactory and services are
needed. If principal decides services not needed must explain to coach in writing. School hires Doris
and doesn’t renew contract even though needs coach or next year, and principal doesn’t give
reasons.
o Property? Court here says property interest because had interest in second year. Is every
contract terminated early in breach of contract procedural due process violation? One
consequence of Roth is that maybe they do. Posner dissent says this is just breach of
contract claim.
• HYPO Liberty – Reputational Harm City issues statement that “Bert is active shoplifter.” Does
Bert have right against reputational damage?
o Liberty?  The more serious the reputational harm + difficult of getting a job then courts
will be more likely to hold that this is liberty interest. But if Bert can show that it will be more
difficult for him to get hob in town, that he’s being ostracized and excommunicated then he
has stronger claim to liberty interest.
 Roth says I’m being fired and people will think that I’m a troublemaker. But court says
there is no evidence here that you won’t be able to get future jobs and suffer a stigma
– no liberty interest.
• HYPO State Defines Scope of Right Congress replaces welfare scheme and instead provides
block grants to states telling them to use the money in any manner reasonably calculated to
accomplish purpose which is to move people off welfare to getting a job. Says in bold “no individual
entitlement.” This statute shall not be interpreted to entitle any individual to any monetary
assistance under the terms of this program. Recipient’s benefits are withdrawn without a
pretermination oral hearing. State argues look at the statute this isn’t property interest. Roth says
states define property rights. Bierschbach says this probably would be viewed as ok today
c. How Much Process Is Due?
• Goldberg Hearing Requirement Majority in Goldberg said that all the requirements for a
formal, trial type hearing must be conferred to a welfare recipient prior to termination of welfare
payments, except for verbatim transcript and testimony under oath. Goldberg says must have
pretermination hearing with: oral hearing, cross examination, notice and explanation for
termination, right to bring lawyer, impartial decision maker, decision based on record, written
decision with explanation.

Mathews v Eldridge (1976) Balancing Approach For Determining Whether Procedure Was Sufficient
• Facts Eldridge awarded disability benefits in 1968. 1972 after reviewing her completed
questionnaire and reports from her physician the Social Security Administration informed her that
disability had ceased and offered her the opportunity to submit additional information. Then
informed benefits were terminations, but that could seek post-termination hearing.
o Decision court says procedures provided were constitutional. Backs off robust procedural
protections of Goldberg
• Question 1 Disability Benefits Are Property Clear after Goldberg if getting benefits and
government is going to take them away that is property interest. This is conceded.
• Question 2 Do Procedures Satisfy Due Process The Procedures – someone who gets
disability benefits has to fill out questionnaire with medical records and send to state agency for
review. Then recipient gets statement of proposed termination from state agency with justification.
Recipient has opportunity to response in writing. State agency makes final determination, it is
reviewed by SSA, and if SSA approves termination it becomes effective after two months. Court says
to determine whether process is sufficient balance three things:
(1) Individual Interest the private interest affected by the government’s action
 Individual Interest Affected Eldridge has interest in keeping his disability
benefits. Court says that this interest is not so great as compared with Goldberg
where he needed the money to pay rent. Court makes assumption that disabled
people aren’t as desperate as poor people because people only entitled to welfare if
have no money, whereas disabled people can get disability regardless of how much
money they have. Court focuses on Eldridge here who has money and not general
category of disability recipients. As a general matter look at category of people
affected and not person in front of court.
(2) Risk of Error And Probable Value Of Additional Procedure the procedures utilize,
the risk they pose for erroneous deprivation, and the probable value of increased procedures.
 Risk of Error And Probable Value of Additional Procedural Safeguards what
is the Risk of Error? SSA is evaluating medical issue and is reviewing documentation
submitted by Drs as evidence. They look over the x-rays, lab tests and Dr reports
which goes to issue of eligibility. And on top of that recipient can submit further
written documentation to argue they are entitled. It doesn’t seem that the risk of error
is so high.. Value of Oral Pre-termination Hearing – if allowed oral hearing doesn’t
seem like it will add much, because most of evidence is documents. But on other
hand, not 100% disability purely medical condition, could be psychological, if have
oral hearings could cross examine Drs bring your own in. Can probe errors in written
report.
• Distinguishing Goldberg Disability ordinarily can be determined accurately
upon assessment of medical reports rather than evaluating truthfulness and
credibility of witnesses. In welfare, poor and uneducated would have lots of
difficulty in filing written pleadings, not true in disability case.
(3) Government’s Burden government’s interest is need to protect its finite fiscal and
administrative resource
 Government Burden the financial and administrative costs of requiring a formal
pretermination hearing could likely be substantial. At some point the costs of
additional procedures outweigh the benefits. Government’s interest in avoiding the
additional fiscal and administrative burdens of giving this extra process is greater
than the benefit.
• Assessing Accuracy + Risk of Error How do we know what accurate disability determination is?
Let’s says studies show oral hearings result in more benefits being granted. Is that persuasive that
oral hearings should be taken into account in second factor? No doesn’t mean more accurate.
Maybe more claims granted because natural human tendency to sympathize with injured person.
And when close case gives to P, doesn’t mean correctly decided.

• HYPO Machine Determines If Welfare Recipients Capable of Getting Job There is
machine that determines with 100% accuracy by doing a brain scan whether someone is able to get
a job. Government removes hearing requirement and says everyone will be machine tested to
determine eligibility. Guy sues saying violates procedural due process.
o Additional Value of Procedures here there is no probability that more procedure would be
more accurate, so under Matthews would be constitutional.
• Goal of Accuracy v Participatory Value Mathews assumes that accuracy is the overriding goal.
But maybe due process requires more than just accuracy of procedural value. Brennan wrote that
one of things that made Goldberg problem is denied important procedural participatory values that
citizens entitled to when trying to makes case to government. Matthews narrows sphere of values of
procedural due process. Court mentions – in response to Goldberg - we’ve seen what cost of
constitutionalizing these procedures will be and it wasn’t good.
Van Harken v City of Chicago (7th Cir. 1997)

• Facts Chicago changed way to contest parking tickets saying if challenge ticket in person, police
officer not required to appear. P claims this violated procedural due process because can’t cross
examine the police officer.
• Posner’s Mathematic Formulation Posner says if Individual Interest (I) x Probably value of
additional procedural safeguard (P) outweigh Burden to government (B) = then win on procedural
due process grounds. (I x P > B). I = $55 P=2.5% chance of increased accuracy = $1.38. Question is
$1.38 more than 67,000 police officers time. At end he says this is obviously less than government’s
burden no due process violation. This is what courts wind up trying to do. Posner says a little strange
to make constitutional procedure depend on math.
• Government Burden - Cost Of Having Police Officer Appear Court calculates how much it
costs to have officer appear at every hearing. 200,000 parking tickets challenged, but only 67,000
challenged in person. Takes a couple of hours for officers to attend = city would have to hire 67 full
time officers a year.
• Probable Value of Additional Procedural Safeguards – Added Value of Officer Appearing
Court is weary of whether or not having the officer appear even benefits the contestant.
• Judicial Balancing v Agency Balancing This is example of Judge trying to do balancing, but maybe
agencies are in better position to do this type of balancing. They have better access to information.
Matthews test is repetitive presumably agencies or congress already did this balancing when
decided what procedure to provide. . One criticism is why just tell courts to redo what political
branches have already done.
Hamdi v Rumsfeld (2004)

• Facts US citizen captured in Afghanistan and held as enemy combatant given no opportunity at
all to challenge detention or designating as enemy combatant. Argues that he should at least have
some procedural opportunity to challenge his designation as enemy combatant, which triggers
presidents power to hold him this way.
• Court Court balances Matthews test and says clearly private at stake is liberty which is great.
Court says what process is due? requires notice of basis of classification and fair opportunity o rebut
government’s factual assertions but not entitled to full trial. Also ok if presumption in favor of
government
o Balancing Test How does court get to those requirements from Matthews test? They say
weighty and sensitive government interest in time like this is the burden. Individual interest
is liberty. P the value of these procedures. They don’t’ really say much with P. They seem to
be mostly worried about a tourist being accidentally detained. We want to make sure that
those kinds of people aren’t erroneously detained and there is some value in that
• Risk of Leaving Balancing To Government Maybe don’t always want to leave it to elected
branches. The balancing here is almost impossible to do. How do you put weights on liberty and the
burden. And how do you get from that to these precise requirements? Where do those come from?
Seems they are kind of just making it up. Maybe if need someone to make it up as check on other
branches better to have judiciary do it. Plus if have no procedure the marginal value of additional
procedures is high.
• Due Process Sum Up Question 1 Old distinctions between right v privilege is dead, existence
of protected interest is determined by some reference to federal statues, state laws, and custom.
Must have some legitimate claim to property. Or protected liberty interest – courts look to judicial
decisions carving out fundamental rights – like education. Question 2 Matthews balancing test is
the law
IV. AGENCY RULEMAKING AND THE APA
a. Triggering Formal Rulemaking
• Rulemaking Procedures The APA and the agency’s organic statute drive rulemaking procedure.
The organic statute tells the agency what to do, and how to go about it, and the APA has procedures
for when agency engages in rulemaking, formal and informal. Due process is not at issue, although
it is important for adjudication.
• Rulemaking Process How does rulemaking start? Who influences rulemaking>

(1) Agency agency can say this is in pubic interest we should change it. They generally
have ongoing investigations and monitor areas where have jurisdiction
(2) Private Citizens Constituents and Lobbyists can complain and write letter to senator
to make a rule.
(3) Legislature Legislature can write a statute giving agency power to regulate in a
certain area, and can have a committee hearing where they call agency and say this is within
your statutory mandate so make rule.
(4) President can call agency and say I want you to address this topic via rule as part of
my policy agenda.
HYPO  Rulemaking Process Under
APA § 556(d)  Hearings; Powers APA §And

553 Duties;
 RULEBurden
MAKING Of Proof; Evidence; Record As
Basis Of Decision
Step 1: Publish in the Federal Register (NPRM – notice of proposed rule making) w/ 3
requirements
A party is entitled§553(b)
to present his case or defense by oral or documentary evidence, to submit
rebuttal evidence, and to conduct such cross-examination as may be required for a full and true
Step 2: Give
disclosure any
of the interest
facts. In rulepersons opportunity
making or determiningtoclaims
participate §553(c)
for money or benefits or applications
for initial licenses an agency may, when a party will not be prejudiced thereby, adopt procedures
Step 3: Adopt a concise gen statement of their basis & purpose §553(c)
(b) General notice of proposed rule making shall be published in the Federal Register,
unless persons subject thereto are named and either personally served or otherwise have
actual notice thereof in accordance with law. The notice shall include -
(1) a statement of the time, place, and nature of public rule making proceedings;
(2) reference to the legal authority under which the rule is proposed; and
(3) either the terms or substance of the proposed rule or a description of the
subjects and issues involved. Except when notice or hearing is required by statute,
this subsection does not apply -

• HYPO Rulemaking Process Under APA Agency wants to make a rule, how should they go
about doing it? First they must see if they have authority under their enabling statue.
o Publication of Notice of Proposed Rulemaking § 553(b) First agency has to publish
notice of proposed rulemaking in public register. Must state the time place and nature of the
rule, reference legal authority, and give the proposed substance of the rule. Unless
interpretive rule, or good cause not to.
o Interested Persons Opportunity To Participate § 553(c)
Written HearingIf Statute Doesn’t Require Agency Hearing if the statute doesn’t
require rule to be made on the record after opportunity for agency hearing, then give
interested persons opportunity to participate via written hearing. “interested persons”
means anyone interested, no legal overlay. Can send letters everyday and they have
to read it.
 Oral Hearing If Statute Does Require Agency Hearing If statute requires that
rules be made on the record after opportunity for an agency hearing then §556 is
triggered and party is entitled to present his case by oral or documentary evidence,
submit rebuttals, and cross examination. Almost the equivalent of trial. Agency has to
issue decision based on record and initial decision made by ALJ.
o Notice + Opportunity to Comment § 553(d) Two major requirements of informal
rulemaking are notice and opportunity to comment on rulemaking.
US v Florida East Coast Railway (1973)

• Facts Interstate Commerce Commission (ICC) promulgated rules designed to provide an economic
incentive to RR to promptly return boxcars to their owners. The Interstate Commerce Act provides
that the ICC “may, after hearing” promulgate various rules affecting use of boxcars. ICC conducted
two oral hearings on different occasions and couldn’t come up with suitable law. Finally
congressional subcommittee tells them you need to make a rule now, so ICC makes a rule without
oral hearing first. RR challenged rule on grounds that this was formal rulemaking and §556 and §
557 apply.
o Court Court says this was informal rulemaking, so oral hearing not required. §556 + §557
not triggered.
• Is This A Rule? Yes? Ratemaking is clearly rulemaking, APA definition of rule includes setting rates.
• Exceptions To § 556(d) Oral Hearing Requirement § 553(d) says agency can dispense with
hearing requirement if people won’t be prejudiced. And adopt procedures for submission of
evidence in written form. ICC tries to invoke this exception that the RR won’t be prejudiced. District
court says Florida was prejudiced so rule is invalid.
• Formal Rulemaking Triggered If Statute Says Rules Must Be Made “On Record After
Opportunity For Agency Hearing” Supreme court says that § 553 applies as this was informal
rulemaking. § 556 and § 557 were not triggered because statue only said after hearing, and didn’t
say on the record after opportunity for hearing. Must track language of APA precisely to trigger
formal rulemaking.
• What Does Statute Require When Says “Hearing” RR tries to argue that Interstate
Commerce Act says after hearing so that requires oral hearing regardless of what APA says.
Rehnquist says hearing under the act means hearing entitled to when make a general rule, so it is
only a paper hearing, doesn’t mean trial type proceeding. Judge Friendly argues that ICC statute
“After hearing” language actually did require trial type evidentiary hearing.
o Lawyer’s Tip Even though formal rulemaking not triggered under the APA, can still argue
that based on language of enabling statute oral hearing is required.
• Policy Issues With Decision As a matter of statutory interpretation this may not be a good decision
because APA passed 50 years ago and enabling statutes were in existence way before then, and
didn’t know what talismanic language to use that would trigger formal rulemaking requirements.

• Functional Considerations For Informal Rulemaking formal rulemaking procedures are often
counterproductive and may not get to accurate result. Lengthy proceedings with oral hearings and
cross examination not always necessary and takes too much time. Court concerned that formal
rulemaking wastes money and is not always necessary. So court says unless congress explicitly
tracked language of APA then we’ll give agencies a lot of freedom to make rules with lot less
procedural constraints.
• Two Important Points Of Case (1) Must Track Language of APA For Formal
Rulemaking This interpretation frees up agencies to do a lot of informal rulemaking because
formal rulemaking is not triggered unless enabling statute tracks that language of APA, (2) APA
Not Only Procedural Constraint On Agency Rulemaking Must consider all procedural
constraints on agencies, just because not in formal rulemaking under APA doesn’t mean the
enabling statute or the due process clause doesn’t require more procedure.
b. The Rise and Fall of Hybrid Rulemaking
• Interplay Between Rulemaking and Adjudication as a result of East Coast Railway most
agency ratemaking is through informal, legislative, notice and comment procedures. This frequently
results in the absence of an agency record for purposes of judicial review, thereby frustrating
judicial challenges to agency action.
• Development of Hybrid Rulemaking Prior to Vermont Yankee many courts insisted that
agencies promulgate their rules via “hybrid” procedures which were less than formal trial type
procedures of § 556 and § 557 but more than informal notice and comment procedures. Courts
would require opportunity to comment meaningfully which means agency had to disclose
everything. Idea of notice is to fully appreciate and be aware of and have chance to respond to all
aspects of proposed rule relevant to substance and validity.
• Challenging Rule After Passed another way that courts tried to review rulemaking was to say
that though there are not a lot of procedures going into making the rules, when the rules are applied
and challenged the plaintiff can challenge the underlying validity of the rule. Courts would up saying
that this is not permissible. Once the rule is validly established the only issues left for court to
review in enforcement proceeding is application of the rule – whether the rule applies to this
plaintiff.
Vermont Yankee Nuclear Power v. Natural Resources Defense Counsel (1978)

• Facts VT Yankee sought permits from the Energy Commission to build nuclear power facilities.
The NSDC rejected issuance of a license. AEC instituted rulemaking proceedings to asses the
environmental consequences surrounding spent nuclear fuel. AEC did not offer the opportunity for
formal, trial type proceedings, but offered de minimus procedures specified for informal rulemaking
under § 553.
• Issue may the judiciary insist that federal agencies offer procedures beyond those expressed in
the APA where the substantive issues under consideration are complex, technical or involve “issues
of great public import?” Court says No.
• Courts Can’t Require More Procedural Requirement Than APA the APA expresses the
maximum procedural requirements that congress was willing to have the judiciary place upon
agencies. While agencies are free to offer greater procedural opportunities, courts are not free to
insist that they do.
o Reasons (1) Unpredictable – if let courts just impose what procedures they think is
required, there will be no clear test for agencies to follow, and impossible for agencies to
comply they need notice of what procedures must be. (2) Court Abusing Power – if there is no
real guidance for agencies then courts can invalidate rules when don’t agree with them
based on procedures that were supposedly required. Don’t want to allow court to make

policy decisions.
o Criticism Many criticized that need meaningful review of what agencies are doing. Want to
make sure agencies not being lazy or actions misguided, and there is no way for court to do
that if don’t have a record to review.
• Hybrid Rulemaking Environmental groups were pushing for more procedure than APA required.
They wanted opportunity for oral hearing with cross examination of government’s evidence. DC
court granted their request. This is hybrid rulemaking basically taking § 553 proceeding and trying
to make it more formal, but not as formal as formal rulemaking. Supreme court says circuit courts
can’t do this – agencies are constrained by their own rules, organic statues and the APA. Courts
can’t impose additional constraints.
• Courts Can Still Review For Arbitrary and Capricious Rulemaking you don’t need to impose
procedural requirements to make sure agencies are not making rules improperly. Courts can still
review rulemaking to see if arbitrary and capricious in violation of due process. If on appeal, all the
agency has is a 20 page statement by one guy in support of their rule – a bare bones record – then
judge can remand back to agency to explain itself and that it respond to comment, or it can strike
for being arbitrary and capricious.
• Exceptions To VT Yankee (1) Quasi-Judicial Determinations – if the agency is deciding a

controversy involving a small number of persons, each of whom are exceptionally affected on
individual grounds, like Londoner then court can require more procedure. (2) Changed Procedure – if
the agency makes a totally unjustified departure from settled agency longstanding procedures, (3)
Constitutional Constraints – Constitutional due process may require more procedural opportunities
than those specified in APA, or (4) Exceptionally Compelling Circumstances.
PROBLEMS - Procedural Requirements for Agency Adjudication and Rulemaking After Florida
East Coast
1. Industrial, an electric utility, applies to the Environmental Protection Agency (EPA) for permission
to discharge heated water into a nearby river. EPA’s enabling statute prohibits the discharge of any
pollutant unless the discharging entity has obtained a permit from the EPA. Industrial concedes that
its discharges do not meet EPA’s effluent limitations. Instead, it seeks an exemption from those
effluent limitations pursuant to § 316(a) of the enabling statute, which requires a permit to be issued
to any discharging entity who, “after public hearing,” can demonstrate to the satisfaction of the
agency that the EPA’s standards are more stringent than necessary to protect aquatic wildlife.
a) Is Company Entitled To Public Hearing? Industrial’s permit request is denied without

a public hearing. Has the agency acted unlawfully? What are Industrial’s best arguments?
 Entitled To Hearing Under APA
• Adjudication or Rulemaking?This seems like adjudication that deals with
license under APA definition.
• Formal or Informal Adjudication? Is it formal or informal adjudication?
Florida East Coast says informal adjudication unless enabling statute tracks
language of APA § 554 saying “on the record after opportunity for an agency
hearing.” The language here “after public hearing” does not trigger application
of formal adjudication requirements of oral hearing. Can argue that reasoning
of Florida East Coast only applies to rulemaking and not to adjudication.
Rehnquist says don’t ever really have oral hearings for legislative type
determinations only have paper hearings so more evidence to think that no
formal hearing required there. But here we are dealing with adjudication and
adjudicatory facts with this company in particular who what where when why
determinations. Presumption for adjudication is you do have hearing – so read
language more loosely to trigger § 554 formal adjudication requirements.
o Does Florida East Coast Apply to Adjudication? – Not Necessarily Does
Florida East Coast requirement that enabling statute track language of
APA exactly to trigger formal rulemaking requirements? There is a four-
way circuit split on this question. Some courts say presumption in favor
of formal hearing, others say presumption against but just a
presumption can overcome even though magic words don’t appear.
Other courts defer to agencies reasonable resolution. Others say go
statute by statute no presumptions look deeply into each statute. Jury is
still out on what triggers formal adjudication. Trigger is a little easier
because it is adjudication. But important point is that courts don’t think
Florida East Coast applies to adjudication. The rationale is that there
are different presumptions and different constitutional considerations.
 Entitled To Hearing Under Organic Statute company can say that statute
requires “public hearing” which denotes a true public hearing with an open forum
where can voice concerns. Traditional public hearing usually means oral hearing with
ability to probe the other side.
 Entitled To Hearing Under Due Process (1) What is interest here? Company
argues this is property right interest in entitlement to permit. Since permit not
granted yet there is no hearing under due process. If not granted then not taking
away property. (2) What process is due? Even court did say this was property interest,
probably apply balancing interest test and wouldn’t need formal hearing.
b) A public hearing is held before an ALJ at which Industrial and a local environmental group,
Save the River, are permitted to offer evidence and cross-examine one another’s witnesses.
The ALJ denies Industrial’s request for a permit. Industrial appeals to the Administrator of the
EPA, who assembles a panel of six in-house advisers to assist with his technical review. This
panel submits a report finding that Industrial had met its burden of proof. Relying on this
report, and without any further oral hearing, the Administrator grants Industrial’s permit
request. You are the lawyer for Save the River. Has the agency acted unlawfully? What are
your best arguments?
 In Formal Proceeding Agency Can Only Base Decision On Record Below First
argument is that this is formal adjudication so § 55 and § 557 apply. § 556(e) says that
agency can only base its decision on the record that has been developed below. Can
argue that agency looked outside the record. Argument is formal proceeding says can
only base decision on record that has been developed, and they were entitled to
opportunity to cross examine that new evidence.
• § 556(e) The transcript of testimony and exhibits, together with all papers
and requests filed in the proceeding, constitutes the exclusive record for
decision in accordance with section 557 of this title and, on payment of
lawfully prescribed costs, shall be made available to the parties. When an
agency decision rests on official notice of a material fact not appearing in the
evidence in the record, a party is entitled, on timely request, to an opportunity
to show the contrary.
c) Same facts as b), except that the enabling statute makes no reference to a “public
hearing.” Now does Save the River lose? Again, what are your best arguments?
 No Proceeding Required Save the River would probably lose, because not even
required to do public hearing, so no constraints on what evidence can take into
account.
d) What if EPA decides to resolve, through adjudication, the question of whether its effluent
limitations in general are more stringent than necessary to protect aquatic wildlife, i.e.,
whether to relax its nationwide effluent limitations? From the information you’ve been given,
can it do that? If it does, must it provide an oral hearing? A decision “on the record”?
 Can Make Rules Through Adjudication EPA can decide whether to change their
general permit standards through an adjudication. Chenery says SEC was allowed to
do this.
2. After Vermont Yankee, an agency, acting pursuant to § 553 of the APA, refuses to hold oral
hearings prior to promulgating a new rule. Unlawful?
 No Oral Hearing Required § 553 § 553 doesn’t require an oral hearing and
judiciary can’t impose those requirements on agency especially after VT Yankee.

3. Agency Doesn’t Disclose Information In Notice of Proposed RulemakingAn agency,
acting pursuant to § 553 of the APA, issues a notice of proposed rulemaking (NPRM), collects
comments from interested parties, and then issues a rule.
a) The rule is based on information that the agency failed to disclose in the NPRM, despite
the fact that the information was already in the agency’s possession at the time the NPRM
was issued. Unlawful?
 Must Disclose Evidentiary And Analytical Documents Relied Upon
Connecticut Light and Power interprets § 553 to require an agency to disclose all
evidentiary and analytical documents they rely upon. This is true despite the fact that
VT Yankee says courts can’t make agencies do more than what APA requires. This
would be defective because courts still tie into comment provision this requirements.
VT Yankee interpreted not to overturn these disclosure requirements.
b) The rule is based on information that came into the agency’s possession during the
comment period, but the agency failed to initiate a new round of notice and comment based
on the new information. Unlawful?
 When Renotice RequiredCourt usually says agency must renotice when new
information is so significant that original notice didn’t adequately frame the issue so
that people could comment meaningfully. If the information doesn’t change all that
much then don’t have to give new notice. Otherwise agencies would have to renotice
over and over again as new info came in and it would be burdensome.
c) The rule differs in its subject matter from the proposed rule described in the NPRM.
Unlawful?
d) The rule differs in some of its substance and details from the proposed rule described
in the NPRM. Unlawful?
 When Rule Different From Proposed Rule the final rule doesn’t always look like
the proposed rule because if they did then that means agency not taking any of
comments into account. So final rule is not invalid if doesn’t look like proposed rule.
But if proposed rule is on subject A and agency issues final rule on subjects D and C,
which have nothing to do with proposed rule then it is invalid. Court says it must be
logical outgrowth of proposed rule.
e) The rule contains a “statement of basis and purpose,” as required by § 553. This
statement fails to respond to some important questions raised during the comment period by
important industry or public-interest groups. Unlawful?
 Statement of Basis And Purpose Agency is required to explain itself, which
includes the requirement to respond to major comments. This requirement survives
Vermont Yankee. Reviewing court will decide whether or not it adequately responded
to the major comments it received, or it just ignored them.
• § 553(c) “After consideration of the relevant matter presented, the agency
shall incorporate in the rules adopted a concise general statement of
their basis and purpose.”
c. Has Hybrid Rulemaking Risen Again
Connecticut Light & Power v. NRC (1982)

• Facts Nuclear Regulatory Commission (NRC) establishes rules governing fire safety for nuclear
power plants. CT Light & Power objects to the program, specifically that in NRC’s notice of proposed
rulemaking, they didn’t clearly specify the technical basis relied upon for formulating proposed rule.
Also the rules adopted differed in many respects from the proposed rule.
• No Reversible ErrorCourt finds that the notice was ok, but by the skin of their teeth. Court don’t
find a reversible defect in this case because even though agency didn’t disclose it technical studies,
it was widely understood that these technical studies were driving the whole debate on fire
protection and they were subject to criticism beforeand, and anybody involved in proceeding would
have known.

• Opportunity For Interested Parties To Participate In Meaningful Way The process of
notice and comment rulemaking is not to be an empty charade, it is to be a process of reasoned
decision-making. One particularly important component of the reasoning process is the opportunity
for interested parties to participate in a meaningful way in the discussion and final formulation of
rules. Procedures by NRC came dangerously close to foreclosing useful participation in rulemaking
process.
o Opportunity to comment is meaningless if parties don’t know what supposed to be
commenting on.
• Agency’s Explanation of Rule while agency need not justify the rules it selects in every detail,
it should explain the general bases for the rules chose. This explanation will assure public
confidences in the rulemaking process. Disclosure of the agency’s rational is important in order that
reviewing court may fulfill its statutory obligation to determine whether the agency’s choice of rules
was arbitrary or capricious.
• Must Disclose Technical Basis For Proposed Rule NRC’s notice of proposed rulemaking failed
to indicate or explain the technical basis on which it had relied in selecting the proposed rule. If the
notice failed to provide an accuracy picture of the reasoning that has led the agency to the
proposed rule, interested parties will not be able to comment meaningfully upon the agency’s
proposals. Otherwise agency will operate with one sided picture of the issue. Important for agency
to identify and make available technical studies and data that it has employed in reaching decisions
to propose particular rules. Agency commits serious procedural error when it fails to reveal potions
of the technical basis for proposed rule in time to allow for meaningful comment.
d. Exceptions To APA § 553
• APA Exceptions To Notice And Comment § 553 requirement of an opportunity for notice and
comment does not apply to (1) interpretative rules, (2) general statements of policy, or (3) rules of
agency organization, procedure or practice. § 553(b) also authorized an agency to dispense with
notice and comment when it “for good cause finds” it to be “impracticable, unnecessary, or contrary
to the public interest. The agency still must publish the rule in the federal register, but doesn’t have
to solicit comments from interested parties.
o Interpretive Rules those that “merely clarify or explain existing law or regulations that
are essentially hortatory and instructional, and do not have the full force and effect of a
substantive rule, but are in the form of an explanation of particular terms. The existence of a
substantial impact from the rule does not preclude a court from a finding that the rule is
interpretive.
o General Policy Statement general policy statement (i) must not have a present effect
but imposing rights and obligations and (2) must leave the agency and its decision-makers
free to exercise discretion. Court may consider the agency’s characterization of its own
action, however it is not decisive. American Hospital Association v Bowen.
o Procedural Rules this includes actions that do not alter the rights or interests of parties
but merely alter the manner in which parties present themselves or their viewpoints to the
agency. Court rejects substantial impact test concerning agency procedural rules,
recognizing that strictly procedural measures may affect rights of parties.
American Hospital Association v Bowen (D.C. Cir. 1987)

• Facts Congress mandated the creation of Peer Review Organizations (PROs) to oversee Medicare
expenditures by doctors and hospitals. The PROs would contract with the Department of Health and
Human Services (HHS) to review the performance of the doctors and hospitals. HHS promulgated
regulations concerning the organization, activities and enforcement power of the PROs without
notice and comment procedures under the APA.
• Present Binding Effect Test a rule is not an interpretive rule or general statement of policy if (i)
it has a present effect on food producers, and (ii) the agency and its decision makers are bound
by the regulations.
• Procedural Rule + Statement of Policy Exception to APA Notice and Comment the agency
rules and regulations regarding PROs are procedural in nature and thus exempt from notice and
comment requirements, since they merely organize the PROs and did not impose direct substantive
obligations on the hospitals. The contract terms between HSHS and the PROs requiring hospitals to
meet enumerated substantive standards were rules and regulations concerning goal setting and
thus considered mere statements of policy.
o Statement Of Policy court says a statement of policy doesn’t establish a binding norm,
because it’s not a final determination of issue or rights. It’s just giving its explanation for
what thinks term means, but it’s prospective and a little tentative. It is a general prediction
this is how we plan to apply law. Statement of policy doesn’t bind agency.
• Interpretative v Substantive Rules Interpretive rules merely clarify whereas substantive rules
actually impact rights, obligations or interests. American Hospital just says if it affects private
interest this it is a substantive rule. But a lot of statements of policy have practical effect of deeply
effecting private interest. A rule saying unfair trade includes not putting octane levels on pumps
sounds like interpreting what unfair trade means but also affecting substantive right station owners.
o HYPO FAA Approval For Sale Of Route FAA statute says airline that sell license to fly
particular route to another airline has to get FAA approval. FAA decides not involved enough
in M & A with airlines so interpret statute to mean where there is sale of controlling block of
shares, such that company buying airline gets airlines licenses, must get FAA approval.
Interpreting what it means to “sell a license” so interpretation with a substantive effect. Most
substantive rules will also be interpretive rules in sense that they are explaining what statute
means..
American Mining v. Mine & Safety Health Administration (D.C. Cir. 1993) Legal Effects Test
• Facts Mine & Safety Health Administration (MSHA) has statutory authority to make rules for mine
safety including authority to require operators to file reports. MSHA passes rule with notice and
comment saying operators have to report specified instances, including accidents and illness within
10 days. Then agency issues PPL without notice and comment, explaining what illnesses must be
reported.
o Court Court says PPLs are not substantive rules they are interpretive.
• Legal Effect Test If the interpreted rule has a legal effect then it is substantive. Ask the following
questions, if answer yes to any then it is substantive legislative rule.
(1) No Adequate Legislative Basis For Enforcement Whether in absence of rule there would not
be an adequate legislative basis for enforcement action or other agency action to confer
benefits or ensure performance of duties.
 Here there would be an adequate legislative basis because the regulation says you
have to report illness, so can just point to that language and enforce it.
(2) Published in Federal Register Whether the agency has published the rule in the Code of
Federal Regulations. Federal register includes only those things that have become final rules.
(3) Invoked Legislative Authority Whether the agency has explicitly invoked its general
legislative authority
(4) Amends Prior Legislation Whether the rule effectively amends a prior legislative rule.
 Maybe it was amended to add additional content to the rule, but it also can be
amended as a clarification. Court here says more clarification because was reporting
requirement and this just fleshed it out more
• PPL Not Substantive Court says yes it effected the interests of private parties and seems to
impose new obligations because it said will be penalized if violate PPL, but passed legal effects test
so not substantive.
Community Nutrition Institute v Young (D.C. Cir. 1987)

• Facts FDA authorized to bring court actions to condemn interstate shipment of food that is
“adulterated”. FDA established action levels concerning adulteration providing food procedures
with the maximum allowable levels of unavoidable contaminants. FDA did not establish the action
levels under notice and comment provisions of APA § 553. Producers challenge saying this is
substantive rule and have to go through notice and comment.
o Court FDA action levels are binding legislative rules subject to notice and comment of §
553.
• Present Binding Effect Test

1. Present EffectCourt says this rule was binding on private parties. What makes rule
binding? It imposes penalties. If agency can go to court and say you violated X, and all agency
has to show is that you came with in statement X then it is a rule. But if agency ahs to show
you violated the statute and give reasons why the violation should be upheld then it’s a
statement of policy. If agency doesn’t want it to be binding on parties they can say it’s just
guidance
2. Binding on Agency Rule says agency expects to bring enforcement actions based on
these levels. Can expect could mean maybe we wont, but probably means we will. FDA has
even made several statements that the action levels are a binding on food producers and also
considers it necessary for food producers to secure exception to the action levels
 How To Determine If Rule Is Binding Appalachian Power (D.C. Cir. 2000) if

the agency acts as if the document issued is controlling in the field, if it treats the
document in the same manner it treats a legislative rule, if it bases enforcement
action on the policies or interpretations formulated in the document, if it leads private
parties or states to believe that it will declare permits invalid unless the comply with
the terms of the document, then the agency document is for all practical purposes
“binding.”
• Dissent Pronouncement is legislative only if it retains force of law in future proceedings. Since the
FDA must still prove product is adulterated in an enforcement proceeding, action level alone does
not have force of law, and rule is interpretive
• Agencies Will Stop Issuing Policy Statements one worry is that if start to say that agencies
have to follow these burdensome procedures just to give guidance to the public, they might retreat
and make policy through pure adjudication instead where parties won’t have a heads up about what
they are required to do. Generally agencies issue policy statements in part to give parties some of
notice and industries would prefer to get policy statement before hand .
Air Transport v DOT (1991) Procedural Rules

• Facts FAA promulgates a rule without notice and comments establishing a schedule of penalties
and rules governing how adjudication will be conducted. FAA says this is procedural rule. Court says
no it is substantive.
• This “Procedural Rule” Substantively Effects Rights Court explains that this really changes
what defendants will have to go through in defending themselves and will effect their rights. Notice
and comment will be required where the rule substantially affects a civil penalty defendants right to
an administrative adjudication. Party has right to notice and hearing (administrative adjudication)
before being forced to pay a monetary penalty under due process and APA.
• Dissent Dissent says that if the rule is controlling conduct involved in the presentation of your
case then it is procedural. But if it controls primary conduct outside of the courts in the real world
then it is substantive. If you’re just looking to see whether something alters or effects rights then
this would sweep in too many procedural rules to be treated as substantive.
• Good Cause Exception if giving notice + comment would allow public to immediately evade
what agency trying to do then not necessary. Also if statute must be passed to get something done
in time, notice + comment not necessary

• SUMMARY There is no clear rule for when these exceptions will be invoked and upheld by courts.
The overarching question is not whether it is interpretive rule, or statement of policy or procedures.
The real question is whether this rule is a substantive rule. Courts look to impact on parties and
agency, how much it binds the agency, the legal effect test. Best guidance is Appalachian Power if
agency treats private parties as if rule is binding, and feels bound by it itself, then it is substantive
rule. (Bierschbach likes this one).
V. JUDICIAL REVIEW OF AGENCY ACTION
a. Scope of Review
i. Overview, And Review of Agency Factual Findings
• Standards of Review Questions of law and fact call for different standards. This is the spectrum
of review from least deferential standard to most deferential.
o De Novo questions of law are generally de novo review, reviewing court does not need to
defer.
o Abuse of Discretiononly overturned when court abuses its discretion. Usually applies to
mixed questions of law or fact, like negligence. Or where lower court overruled objections
that should have been sustained
o Clearly Erroneousreviewing court will overturn when lower courts findings are clearly
erroneous.
o No Rational Fact Finder reviewing court will only overturn if no rational fact finder could
have found the fact at issue – he was speeding. Usually applies to jury determinations.
o No Review reviewing court has no jurisdiction to review the findings of the lower court.
• APA Standards of Review § 701 – § 706

o § 701 Presumption of Review there is a presumption that judicial review is available
unless the enabling statute precludes judicial review or it committed to agency discretion.
 § 701(a) This chapter applies, according to the provisions thereof, except to the
extent that - (1) statutes preclude judicial review; or (2) agency action is committed
to agency discretion by law.
o § 702 Right of Review Person is entitled to review if he suffered a “legal wrong” within
the meaning of statute.
 § 702(a) A person suffering legal wrong because of agency action, or adversely
affected or aggrieved by agency action within the meaning of a relevant statute, is
entitled to judicial review thereof.
o § 706 Scope of Review Reviewing court shall decide all questions of law – this sounds like
de novo review.
 § 706(a) To the extent necessary to decision and when presented, the reviewing
court shall decide all relevant questions of law, interpret constitutional and statutory
provisions, and determine the meaning or applicability of the terms of an agency
action. The reviewing court shall—
(1) compel agency action unlawfully withheld or unreasonably delayed;
and
(2) hold unlawful and set aside agency action, findings, and conclusions
found to be—
(A) arbitrary, capricious, an abuse of discretion, or otherwise not in
accordance with law;
(B) contrary to constitutional right, power, privilege, or immunity;
(C) in excess of statutory jurisdiction, authority, or limitations, or short
of statutory right;
(D)without observance of procedure required by law;
(E) unsupported by substantial evidence in a case subject to
sections 556 and 557 of this title or otherwise reviewed on the record of
an agency hearing provided by statute; or
(F) unwarranted by the facts to the extent that the facts are subject to
trial de novo by the reviewing court.
In making the foregoing determinations, the court shall review the whole record or
those parts of it cited by a party, and due account shall be taken of the rule of
prejudicial error.
• Substantial Evidence Standard Applies To Review Of Fact Finding In Formal Rulemaking

+ Adjudication The substantial evidence standard is embraced by § 706(2)(E). It applies to
review of formal rulemaking or formal adjudication (where proceeding is subject to § 556 and § 557
or otherwise “on the record”). Substantial evidence is more than mere scintilla. It is such evidence
as a reasonable mind might accept to support a conclusion. Mere uncorroborated hearsay or rumor
is not substantial evidence. It is such evidence as would be sufficient to justify a refusal to direct a
verdict, if case were before a jury. In determining whether an agency decision is supported by
substantial evidence, courts must evaluate the whole record in its entirety, not merely those
portions on which the agency relied.
• Substantial Evidence Standard Also Applies To Review Of Fact Finding In Informal

Rulemaking + Adjudication APA §706(2)(E) only applies to formal rulemaking and adjudication.
But § 706(2)(A) still applies to fact finding in informal proceedings and says that reviewed for
arbitrary and capriciousness. Courts have “arbitrary and capricious” as requiring same inquiry as
required by substantial evidence test. As technical matter substantial evidence doesn’t apply but
courts just say that arbitrary and capricious imports substantial evidence standards.
NLRB v. Universal Camera (2d Cir. 1950)

• Facts NLRB reversed the hearing examiner’s findings that employee was discharged for
insubordination, and NLRB ordered employer - Universal Camera to reinstate the employee who
they said was fired because of his involvement in union activities. Employer argued that NLRB’s
conclusion was not supported by substantial evidence.
• Factual Dispute In Formal Adjudication this is a classic factual dispute. The hearing examiner
found that the employee was not discharged for union activities, and appealed to board within the
agency and board reverses and says this was retaliation. Employer petitions for judicial review and
court finds that not enough facts to support retaliation finding.
• Substantial Evidence – Standard of Review For Agency Fact Finding standard of review for
agency fact finding is substantial evidence. Findings of fact I shall be conclusive if supported by
substantial evidence on the record considered as a whole.” Court says substantial evidence means
look through whole record and look at evidence on both sides and say in light of all the evidence is
there substantial evidence supporting the agency’s decision. Court explains that we cannot say that
with all these circumstances before him, no reasonable person would have concluded that
employee’s testimony was one of the causes of his discharge.
o Hand’s Approach look to record as a whole, both sides, and if enough evidence to
support agency board’s findings, then defer to board. This approach gives no special weight
to what hearing examiner found. Only overturn board’s decision if no reasonable person
could conclude that retaliatory.
(1) Look At Whole RecordSubstantial evidence means look at whole record both
pros and cons.
(2) Could Reasonable Fact Finder Have Reached Conclusion when deciding
whether test met or not ask whether a reasonable jury could have reached that
decision.
(3) No Special Weight To Hearing Examiner In doing that don’t give any special
weight to what hearing examiner found.
NLRB v. Universal Camera (US 1951)

• Facts Supreme court overturned 2nd Circuit ruling that employee should be reinstated in
accordance with agency board’s findings that his firing was retaliatory.
• Old Substantial Evidence Rule if substantial evidence was found toe exist anywhere in the
record, irrespective of how heavily the countervailing evidence may prevail, so that courts could
merely examine one side of the case; if substantial evidence existed there, contrary evidence could
be ignored and the agency decision could be sustained.
o Criticism Supreme court says when congress added in language “on the whole record”
means must look at contrary evidence as well.
• Supreme Court’s Approach Substantial Evidence Test After Universal Camera

(1) Look At Whole Record look at whole record, both in favor and against what agency
decided.
(2) Standard of Review Is Between Rational Fact Finder + Clear Error as question
somewhere between no rational fact finder test – could any rational fact finder find in a way
that agency did. And clear error test – was this finding clearly erroneous. Universal language
suggests clear error, but Mack used rational fact finder.
(3) Hearing Examiner Determination Part of Record Although hearing examiner’s
findings should not be conclusive by an agency, neither should they be ignored. And for
reviewing court examiner’s report is part of the record to be considered in determining
whether agency’s decision is supported by substantial evidence.
 Standard For Considering Contrary EvidenceA reviewing court is not barred from
setting aside a board decision when it cannot conscientiously find that the evidence
supporting decision is substantial, when viewed in light of entire record, including
evidence opposing agency board’s view. Court says ALJ hearing examiner’s
determination should be considered as a factor – examiner report is part of the
record, so court must look at what examiner did. And if there is a difference of opinion
court should look closer.
 How Much Weight Give To Hearing Examiner Court says defer more to examiner
when he is impartial, experienced etc. Evidence supporting a conclusion may be less
substantial when an impartial, experiences examiner who had observed the witness
and lived with the case has drawn conclusions different from the agency Board than
when he has reached the same conclusion.
 What Remains of Substantial Evidence Standard Substantial evidence standard is
somewhere between clear error and no rational fact finder, tough court never fully
rejects no rational fact finder standard.
• Reasons For Deference

o Deference to Hearing Examiner if examiner impartial and experienced give more
weight. Give deference because examiner better at judging credibility of witnesses in front of
him. If case where ALJ would have better sense of the facts, give his decision due weight.
o Deference to Agency Board give deference to board because knows how competent
examiner is. If it is policy matter want to take reading of board over examiner – look to
nature of question and defer to board if question of law, but defer to hearing examiner if
question of fact. Also if defer to board more predictable and reduce burden on courts
because less people will appeal. Lot of good reasons especially when policy concerned to
defer to board over hearing examiner. Maybe agency needs latitude here to make policy
judgments so board to get deference
• HYPO What It Means To Look At Both Sides of Record NLRB conducts unfair labor practice
proceeding and charges Acme with intimidating employees out of forming union. Employee testifies
that president called meeting and said “if you join the union you will be fired” also left union
member voodoo dolls with pins. At holiday party president said if join union you won’t get Christmas
bonus. ALJ and NLRB board both find that Acme engaged in unfair labor practice. Acme appeals
seeking judicial review.

o Reviewing Court Must Look At Both Sides Will federal court of appeals hold uphold
decision? Can’t decide just based on those facts, must know what Acme’s testimony is. Did
other employee’s witness this? Was witness indicted for perjury? If evenly split between two,
court of appeals would affirm the agency’s finding. Look to record as a whole and weigh both
sides is substantial evidence test.
o Reviewing Jury Finding – More Deferential If jury finding then court of appeals more likely to
uphold because more deferential to jury. Would look at what jury believed and if that’s
enough done, assuming nothing else in record shows jury crazy. Not going to go through
entire record.
Allentown Mack v National Relations Board (U.S. 1998)

• Facts Mack hires 32 employees to work at factor. Employees didn’t think that union had support.
Union asked Mack to recognize it as the collective bargaining representative of the employees, and
Mack refused. It did hold an independent secret ballot of the employees, which the union lost. Union
brought unfair labor charge before NLRB and NLRB found Mack guilty based on objective
considerations that union continued to have support of majority of bargaining employees.
• Issue were the NLRB’s findings of act supported by substantial evidence on the record as a
whole? ALJ and board say that Mack did not have a good faith reasonable doubt about majority
employee’s union support. Court says no substantial evidence supporting finding as employer had
good faith reasonable grounds to doubt union’s retention of majority support.
• Board Did Not Consider Contrary Evidence NLRB raised every presumption against the
employer and in the favor of the union’s position reviewing the evidence court finds that there as
substantial evidence supporting the fact that the employer had a reasonable doubt as to the union’s
support, and that there was no substantial evidence to support to the contrary. Board ignored lots of
testimony from employees that they didn’t want the union to represent them.
• Question of Law Or Fact Reasonable Doubt Of Majority Status?
• Argument That Agency Board Should Have Gotten More Deference

(1) Board Closer To Facts can argue board had the facts, witnesses in front of him and
can better gauge credibility and what really happened.
(2) Policy Decision Should Be Left To Board Whether Mack met the standard of “good
faith reasonable doubt of majority status” is a law. The agency should be permitted to
determine what is permissible to meet that legal standard that they set. Agency might think
20% against union is not sufficient, but need 40%. Standard of doubt is policy making not
fact finding it is an interpretive question. Rather agency than court interpret legal standard.
• Rulemaking Through Adjudication - Chenery Chenery says that agencies can make policy in
the guise of adjudication. Here agency could have issued rule saying presumption that no doubt
until clear and convincing evidence to contrary. In Chenery agency interpreted standard of fair and
equitable. Breyer Dissent says yes agencies can make policy through adjudication. Scalia says more
complicated than Chenery because here the agency is not consistent in some places they say doubt
and in other ratchet up meaning of doubt. They can’t say standard is more stringent now than what
they were saying it was all along. Problem is agency has too much discretion to change their minds
about what doubt means, and this causes no notice to regulated parties, and no guidance for courts
who will be unable to determine if agency adhering tot heir laws.
o Maybe ok for agencies to make rules through adjudication so long as consistent and open
about what those standards are. If court confused that agency changing mind about meaning
then maybe remand for them to explain
• Lawyer’s Tip If arguing that court should defer to agency try to frame the question as a question of
law that implicates policy making authority, if arguing that court should defer to ALJ then frame
question as question of fact. Boundary between questions of fact and law are blurry.

ii. Review of Agency Legal Conclusions
• Factual Question involves the review of an agency’s interpretation of raw facts as applied to a
statute about whose meaning there is little dispute.
• Legal Question legal question exists where the only dispute surrounds the meaning of a
statutory term
• Mixed Question of Law And Fact includes cases in which there is some dispute over the
propriety of the agency’s findings of raw facts and their application to statutory terms, whose
meaning is disputed
1. To The Chevron Station
• Legal Question APA instructs courts to decide all relevant questions of law, but the courts have
long said that some questions of law are for some agencies to decide. With respect to these legal
questions courts will defer to the agency’s judgment overturning the agency only if its legal
determination is unreasonable, impermissible or arbitrary.
o When Should A Court Defer or Give Weight To An Agency’s Determination of A Legal
Question?
NLRB v. Hearst Publications (US 1944)

• FactsHearst refuses to bargain collectively with a union representing newsboys. NLRB concluded
that full time newsboys were employees under the National Labor Relations Act and certified the
union. Hearst refused to bargain arguing that newsboys were not employees under the act, but were
independent contractors. Court of appeals independently evaluated the issue and found that
newsboys were not employees within meaning of statute.
• What Is An Employee?  Statute doesn’t define employee. Court of appeals uses common law
standards, and says that employee doesn’t include newsboy. Supreme court looks to history of the
term employee and purpose of the legislation to ascertain the meaning of the word employee.
Ultimately court doesn’t say what employee is just says newsboy is employee.
• Statutory Interpretation OptionsHow should court go about defining employee? Court can look to
case law, common law precedent, dictionary, legislative history, committee reports, industry
custom, statutory purpose, cannons of construction.
• Law For Legal, Factual, & Mixed Questions

o Factual Question in making factual determinations, the findings of the agency, if
supported by substantial evidence, are conclusive. It is not the task of the court to substitute
its judgment of factual questions for those of the agency if they are supported by evidence.
o Legal Question issues of statutory interpretation are for the judiciary to resolve, giving
appropriate weight to the initial legal determinations of the agency. Example - What Does
Employee Mean?
o Mixed Question of Law And Fact where the question is of specific application of a broad
statutory term in a proceeding in which the agency administering the statute must determine
it initially, the reviewing courts’ function is limited, and defer somewhat. Here the application
of the statutory term “employees” to these facts should be upheld if they have support in the
record and a rational basis in law. Example – Are Newsboys Employees?
 Why Defer To Agency Interpretation?  (1) Congressional Intent – congress
created the agency to apply the Act and delegated to the agency the authority to
interpret the act, by deferring court just effectuating congress’s intent. (2) Agency
Expertise – agency has expertise in this particular area, more than courts, so better at
it. (3) Political Accountability - Policy –There are essentially political choices and
agencies will be politically accountable for these contentious policy decisions whereas
courts will not be.

• More Deference To Agency Determinations In Rulemaking Rather Than Adjudication If in the
context of an adjudication agency decides that newsboy is employee, will court give as much
deference? Can argue that in adjudication hasn’t been as much public input as there would have
been if agency passes a rule. When pass a rule, get input form newspapers all over country, submit
comments, and then decide newsboy is employee. This would get more deference because more
well embedded process.
regulate new or modified stationery sources of air pollution v. Swift & Co. (US 1944)
• Facts Employee of Swift brought an action under the Fair Labor Standards Act to recover overtime
wages earned during the evening they were on call to answer fire alarms. The trial court decided as
a matter of law the time spent by the employees in the fire hall does not constitute hours worked
under the FLSA.
• Give Less Deference Where Agency Doesn’t Have Explicit Authority To Apply The Act
The administrator can sue to enforce the act, but doesn’t have primary responsibility for applying
the act in the first instance. So the administrator’s interpretations, while not controlling on the
courts, reflect a body of expertise to which the judiciary and litigants may resort for guidance. The
weight given such interpretations depends on the thoroughness evident in its consideration, the
validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors
which give it power to persuade, if lacking power to control.
o Administrator’s Involvement In Suit This case involves an employee suing an
employer for back pay, this is not a case where party challenging agency rulemaking or
adjudication. Congress created office of administrator to do conduct research on when party
is entitled to overtime. Administrator has power to bring injunctions against employers who
do not pay overtime. But can’t enforce through an agency proceeding, must bring case in
federal court. Here administrator filed an amicus brief citing his interpretive bulletin
(practical guide)
o No Congressional Delegation Hearst says for mixed questions of law and fact, and
agency determination is warranted in record and reasonable basis for it then courts should
defer. But here court does not defer to the administrator’s bullet which says this is overtime.
Skidmore doesn’t apply Hearst because (1) agency not party to action – the determination
didn’t come from a formal adjudication or rulemaking. If agency had brought an injunction
then maybe more likely to defer, (2) no congressional delegation to decide this – congress
didn’t actually delegate to agency the responsibility of deciding these questions, didn’t set
up fact finding body, or internal agency procedure for application of act, or interpreting the
act. Congress only allowed agency to go into court to make these determinations.
o Policy For Deference The policies that usually justify deferral are not present in this case.
(1) Congressional Intent – language makes clear that congress didn’t’ delegate this to
agency. Didn’t set up system where administrator could make these decisions, (2) Expertise
(3) Political Accountability - interpretive bulletins are not binding so agency not really
accountable. Less argument that political process will work well if defer because not binding
on courts.
Chevron v Natural Resources Defense Council (US 1984)

• Facts EPA adopted regulation that defined each pollution emitting unit as a “stationary sources”
thus any modification of the unit would require a permit. EPA changed the regulation to allow states
to define an entire plant as a “sationary source.” This bubble concept allowed owners of plants to
modify units within the plan so long as the total pollution emissions from the plant did not increase.
Court of appeals held that CAA amendments didn’t’ allow EPA to permit use of the bubble concept
because it would subvert the congressional goals of the CAA which was to reduce pollution.
• Then get to Chevron big change in law. Courts working out. Leal issue is is the EPA interpretation of
stationary source a reasonable one. What does stationary source mean. Does stationary source
include an entire plant or just individual pollution. EPA interpreting Clean air act amendment.
Supreme court.

• CHEVRON TWO-STEP TEST: Judicial Review of Agency’s Determination of Question of Law
(1) Whether Congress Has Directly Spoke To The Precise Question At Issue +
Intent Clear Whether congress has directly spoke to the precise question at issue? If the
intent of congress is clear, the court must give effect to the unambiguously expressed intent
of congress. If however, the court determines congress has not directly addressed the
precise question at issue, the court does not simply impose its own construction of the
statute, as would be necessary in the absence of an administrative interpretation.
(2) Whether The Agency’s Answer Is Based On A Permissible Construction Of The
Statute if the statute is silent or ambiguous with respect to the specific issue, the question
for the court is whether the agency’s answer is based on a permissible (reasonable)
construction of the statute. If the agency’s view is within the range of reasonableness, courts
will defer.
• Did Congress Directly Speak To The Issue? How do we know when congress directly spoke to
this issue? And whether intent of congress is clear? (1) Clarity On Its Face – can look to face of
statute and see if clear, (2) Clarity From All The Evidence – look at all the evidence, legislative
history and purpose, traditional tools of statutory construction, look at whole body of law to see if
fits in, dictionary etc and see if intent is clear.
• Agency Has Explicit + Implicit Authority To Fill In Gaps Stevens says if congress has
explicitly left a gap for agency to fill in, there is express delegation of the authority to the agency to
clarify a specific provision of the statute by regulation. Sometimes the legislative delegation to an
agency on a particular question is implicit rather than explicitly. In such a case a court may not
substitute its own construction of a statutory provision for a reasonable interpretation made by
agency.
o Why Defer To Agency Interpretation Rather Than Court’s? For whatever reason
congress decided to leave this open - didn’t consider question, couldn’t come to agreement,
wanted agency to do it – court says doesn’t need to know. Do we really want to defer if
congress didn’t think about it? Maybe worrisome, but argument is that agencies are still
experts, and better to fill in the gaps than the courts. Agency has been delegated the policy
making ability and is at least a politically accountable body. Do we want to defer if congress
thought about it, didn’t make a decision and left it up to agency? Might encourage congress
to do noting when confronted with sensitive political issues, that congress should really be
deciding. This is what Rehnquist cautions about in Benzene. If we defer in these cases then
allow congress to make wholesale delegation of political questions in violation of
nondelegation doctrine.
INS v. Cardoza Fonseca (US 1987)

• Facts Immigration act AG is forbidden from deporting aliens under a finding that the alien’s “life
or freedom is threatened” for reasons of race, religion, nationality or political believe. Mandatory
suspension - INS required aliens to show “a clear probability of persecution” to prevent deportation.
Discretionary deportation - Also INS can refuse deportation if “clear probability of persecution.” Is
agency interpretation of discretionary deportation requirements correct.
• Step One Whether Congress Has Directly Spoke To The Precise Question At Issue +
Intent Clear
o Analysis Court says question is whether congress intended the standard to be identical
(framing matters) and not whether intended them to be different. Answer is that they didn’t
mean them to be identical because language of statute is different – one says “well founded
fear of persecution” and the other says “life or freedom would be threatened.” Those are two
different uses of language so clear that didn’t mean standards to be identical. Court looks to
text and legislative history.
 Framing Of Issue If inquiry was whether congress clearly spoke to whether
discretionary standard meant more likely than not, then answer would have been no
and case would have passed first test. Illustration of how courts will approach
Chevron question and how framing issue could make a difference
• Court Decides Whether Congress Spoke To Issue Court says when it comes to step one in
Chevron analysis, we don’t care what agency thinks, we will decide if statute is clear or not –
deference doesn’t come in at this point. This means court decides how to frame issue. Not
repudiating general idea of Chevron just saying step one is question for court to decide.
o In Deciding Question 1 Courts Should Only Be Permitted To Look At Text of Statute Scalia
Concurrence worried that court may substitute its statutory interpretation after employing
the traditional tools of statutory construction it will defer to agency interpretation only as a
secondary measure when it is unable to construe the statute. This gives them a lot of power
to police entry point into deference. They can say yes congress addressed and it this is
they’re intent, thereby avoiding having to apply the agency’s interpretation. Best defense
against this courts using question one in sneaky way is you can only look at the text. If you
can’t figure out by looking at text it’s ambiguous then you’re in step 2.
2. Chevron In Action
Babbitt v. Sweet Home (US 1995)
• Facts Endangered Species Act made it unlawful for any person to “take” any endangered or
threatened species. Word “take” is defined by statute to include “harm.” DOI promulgated
regulations defining “harm” to include modifying or degrading a habitat where it kills or injures
wildlife. Logging companies challenged regulation.
• Step One Whether Congress Has Directly Spoken To The Precise Question At Issue +
Intent Clear Is word take in statute ambiguous? Is it a taking of animal to chop down forest such
that animal can no loner shelter or breed etc.? Maybe but might just mean taking the animal not its
habitat. If ambiguous that should just end inquiry. One way to approach is to say look at take and
statute and definition of term and say could go either way.
o Court’s Approach they go to dictionary and the context and purpose of act and say all this
means secretary’s interpretation is reasonable. Looks like they’re in step two. Where is line
between step one and two? As soon as start bringing in traditional tools of statutory
construction lines between step one and two gets blurry now court is talking about well is
this reasonable that is step two question.
• Cannons of Construction (1) interpret words of statute in light of works around it, (2) don’t
interpret words to replicate words around them, interpret them to have independent meaning.
• Ambiguity There are two different versions of ambiguity:

(1) Sloppy Drafting - know something was meant, but not clear and hard to figure out what
was intended.
(2) Pure Ambiguity – pure ambiguity is where have no idea what was intended, totally up in
the air.
 Court doesn’t specify which ambiguity need to show in order for statute to be
ambiguous. Do you need to be able to say no matter how hard we try we have no clue
and then go to step 2 or do you say this can go either way this is our preferred view
and then go to step 2. One clear line is in question one can only look at words and
some external indications of what words mean, but if not clear then go to question 2.
MCI Telecommunications. v ATT (US 1994)

• Facts US Code says all common carriers must file rate tariffs with the FCC. FCC has ability to
modify these requirements. As long distance competition became more open, FCC relaxed the filing
requirements for non-dominant carriers (in essence everyone except ATT). ATT petitions for review.
Issue is whether FCC rule is valid exercise of its modification authority?
Intent Clear Is the word “modify” ambiguous? Dictionary definition of modify means “to change
in a minor fashion” and not wholesale modification. Here the change is radical and fundamental,
strikes at heart of common carriage section of communications act, as rate filings are essential to
regulated industries. Revision affects 40% of industry. Congress didn’t intend FCC to have such
authority. FCC is allowed to make limited changes, but this change introduces whole new regime of
regulation that congress didn’t establish. Scalia says congress didn’t speak to issue of eliminating
filing, because congress said FCC can only modify this stuff and modify means small changes. In
step 2 court says not reasonable interpretation and strikes FCC rule.
• Stevens In Step Two Look At Statutory Policy, Past Practices And Defer To Agency Stevens says
even if the only dictionary definition of modify was “to make minor changes” more would be
required to strike down the FCC’s decision to relax the filing requirements. We must look beyond the
statutory filing requirements to assess the statutory requirement behind the tariff filing, which under
FCC rule would be satisfied because market constraints on non-dominant carriers would obviate
need for tariff filing.. FCC’s reading of statute is informed by a practical understanding of the role
that filed tariffs play in the regulatory climate of industry.
FDA v Brown & Williamson Tobacco (US 2000)

• Facts FDA promulgated regulations under FDCA regulating tobacco as a “drug”. FDCA says FDA
can regulate “drugs” defined as “article intended to affect structure or any function of the body.”
Tobacco companies objected on grounds that FDA did not have jurisdiction to regulate tobacco.
Intent Clear question is does statute confer jurisdiction on FDA to regulate tobacco? Just looking
at text it is not ambiguous, FDA can regulate tobacco. But court looks at FDCA as a whole and
interprets statute in light of all surrounding provisions. Court considers the tobacco specific
legislation congress has enacted over the past 35 years, and concludes that congress did not speak
to issue of FDA regulating tobacco. History shows when congress wanted tobacco regulated did it by
other means, didn’t think FDA had authority. Also if FDA were to regulate would have to ban outright
because tobacco has no pharmacological benefit, congress would not have wanted to ban tobacco.
Therefore, congressional intent is clear.
• Clarity On Face or Clarity Based on All The Evidence? Is this clarity on face or all the
evidence? On line because not clarity on face, text doesn’t on it face foreclose this but don’t look
deep into legislative history on this inquiry. Court goes way outside normal tools of statutory
construction, not just confining itself to purpose of statute. Its looking at entire regulatory scheme,
all other statutes congress has passed etc. and the FDA’s own view of what its jurisdiction was.
Seems like this is clarity based on all the evidence
• Court Asserting Power court assumes that congress could not have intended to delegate a
decision of such economic and political significance to an agency in so cryptic a fashion. Reading
FDCA as a whole ad well as in conjunction with congress subsequent tobacco legislation, plain
congress has not give FDA authority seeks to exercise here. This is huge assertion of power by
court. Do we really want to allow deference when highly sensitive political questions involved? This
is driving a lot of what court did here. If congress really intended FDA to regulate, congress can do
so explicitly.
o Cannon Of Constitutional Avoidance Bierschbach says statutory interpretation techniques
similar. Court strikes down wholesale delegation of major economic regulatory power as in
Shechter Poultry to avoid nondelegation issues.
• CHEVRON TEST REVIEW

o Step One
 What can you look at to determine if clear congressional intent or ambiguous?
• Scalia says look only to the text of the statute, and if not clear then go to
question 2. His reasoning is that if you go beyond the statute and look at
legislative history, whole code, cannons of construction then court are doing
statutory interpretation and never going to have situation where defer to
agency.
• FDA v Brown & Williamson – O’Connor looks at statute as a whole, looks at
other provisions of FDCA as well, and legislative history of tobacco litigation in
general.
 How does court frame the question?
• FDA v Brown & Williamson - court didn’t frame it as “is tobacco a drug,”
because that’s pretty ambiguous anything intended to effect structure of body.
If frame it that way have ambiguous question. Instead framed it as question of
jurisdiction “does statue confer jurisdiction on FDA” clear under 1 that it does
not because congress passed bunch of other statutes etc. having nothing to do
with actual text of statute. Wind up resting holding on bunch of reasons that
don’t have anything to do with statutory text.
o Step 2 Secret about step two is that court never strikes down agency interpretation under
step two. If agency survives step one, then likely they will win.
• When Does Chevron Test Apply?

o Agency Interpretation of Enabling StatuteChevron applies to agency’s interpretation
of their enabling statute. Even if agency changes its position, Chevron applies.
o Agency Interpretation of Jurisdictionman courts hold that Chevron does not apply to
agency’s interpretation of its own jurisdiction, this is for courts to decide. But Scalia says that
Chevron test still applies, and defer.
 HYPO EPA Waters of The US CAA gives EPA jurisdiction over waters of the US.
EPA interprets that to mean wetlands. Should EPA be given deference under Chevron?
No. Give deference to EPA when determining how to exercise its delegated power, but
court should decide the scope of EPA’s jurisdiction. Lower courts don’t apply Chevron
when agency determining scope of jurisdiction. Scalia thinks no distinction exists
between what is a jurisdictional term.
o Agency Interpretation of APADoes Chevron apply to agencies interpretation of he APA?
Did congress intend in passing to APA to give authority to agency to interpret it. Point here is
Chevron doesn’t apply if talking about statute that the agency has no responsibility to
administer. For example if EPA interpreting statute that has to do with national labor, not
going to defer to EPA.
o Agency Interpretation of Statute It Has Overlapping AuthorityWhat about statute
that gives power to two agencies to administer? Banking statute that says two agencies to
make rules in consultation. Most courts say not going to give deference. Congress couldn’t’
have intended to give both agencies overlapping authority to interpret statute because of
confusion that would result.
3. Chevron Step Zero
• Step Zero What is Chevron’s scope? Does it apply to interpretative rules? litigating positions?
these are the principle issues discussed in this section. If Chevron suggests a two step test for the
legality of agency interpretations of law, the inquiry into Chevron’s scope might be taken to
comprise a “step zero” in the form of an inquiry into whether courts should turn to the Chevron
framework at all.
Christensen v. Harris County (US 2000) Chevron Does Not Apply To Interpretative Rules Or General
Statements Of Policy
• Facts Harris county sought an opinion from Department of Labor as to whether it could schedule
employees to use or take compensatory time (payment instead of overtime). DOL took the position
that it could do so if the prior agreement specifically provided such a provision. Harris County
imposed the requirement, and employees sued on ground that no prior agreement under DOL’s
interpretation. Court of appeals found that nothing in the statute or regulation prohibited employer
from compelling the use of compensatory time.

• Does Chevron Apply To Statements Of Policy? Court says Chevron doesn’t apply to these
types of opinion letters. Chevron provides that a court must give deference to an agency’s
regulation interpreting an ambiguous statute. The opinion letter here is neither a formal rule nor a
formal adjudication subject to notice and comment procedures, and does not have the force of law.
o Chevron Doesn’t Apply To Interpretative Rules Or General Statements Of Policy
• Is Skidmore Still Good Law? Under Skidmore court is not required to give deference to non-
binding statement of policy. Why didn’t court just say, don’t have to give deference see Skidmore?
When Chevron cam down lots of people interpreted it as overruling Skidmore. But here court says
that Chevron doesn’t even apply because this wasn’t notice and comment formal adjudication or
rulemaking. Makes sense that Chevron overruled Hearst, but Skidmore distinguished itself from
Hearst by saying administrator wasn’t delegated authority to implement rule through formal
adjudication so it was just interpretive ruling. This decision resurrects Skidmore and it is still good
law.
US v Mead (US 2001)

• Facts Mead imports day planners. Between1989 and 1993 US customs treated them as under a
tariff exempt form import duties. Mead writes letter asking how they will be taxed in future, and
Secretary of Treasury issued a ruling letter reversing the exemption status.
• When Entitled To Chevron Deference? An administrative interpretation of a statutory

provision is entitled to Chevron deference when it appears congress has delegated general authority
to the agency to promulgate rules having the force and effect of law, and the agency’s
interpretation was promulgated in the exercise of that authority. Delegation of such authority may
be shown in a variety of ways, as by an agency’s power to engage in adjudication or notice and
comment rulemaking, or by some other indication of a comparable congressional intent.
o Implicit Delegation Sometimes legislative delegation to an agency on a particular
question is implicit. Also can imply from congress grant of rulemaking or adjudicatory power
that congress would expect the agency to be able to speak with the force of law when
addressing ambiguity in the statute or fills a space in the enacted law. Assume congress
contemplates administrative action with the effect of law when it provides for a relatively
formal administrative procedure.
o Express Delegation express delegation of authority on particular question- agency
charged wit apply statute to make all sorts of interpretive choices.
• What Chevron Applies To After Mead

(1) Chevron Applies To Informal Adjudication or Rulemaking (Notice +
Comment)Mead provides safe harbor for agencies. If they issue a rule through notice and
comment rulemaking or adjudication then Chevron automatically applies
(2) Chevron May Still Apply To Less Formal Proceedings Where Rule Has Force +
Effect of Law Chevron might still apply in some less formal proceedings when think
policies of deference especially present.
 Court Court says Chevron doesn’t apply because authorization and custom’s
practice in making rulings doesn’t go through notice and comment process, or any
other circumstance reasonably suggesting congress ever thought of classification
rulings as deserving deference claimed for them here. Here doesn’t apply because too
ad hoc, agency change mind every day, and doesn’t seem like congress intended for
these rulings to have the force and effect of law.
• Policy + Criticism Court basically tells agencies if you want the power that comes with deference
you’re going to have to jump through some procedural hoops. Applying Chevron in these cases is
good because forces agencies to go through notice and comment rulemaking, giving public more
input, and rules more fair. But on other hand this will force agencies to go through lengthy and
costly notice and comment rulemaking which is inefficient and will slow things down.
• What Are Rules That Have Force of Law? Court does make a lot of noise about Chevron only
applies to rules that have force of law but doesn’t say what means by the force of law. Not just
talking about the legal effects of the law, but the process in which it was adopted. Difference is
process through which it has been run that’s what gives it force of law.
• Due Process Challenge Customs says you can import your stuff no tariff and then they say from
now on tariff. Mead sue saying invalid exercise of agency authority why? Can never act arbitrarily
under APA. Can challenge it on grounds of whether had notice and comment or not. If agency just
changed its mind with no warning then have due process challenge.
Gonzalez
• Facts AG issues interpretive rule saying allowing physician to prescribe legal drugs is not allowed
by Federal Controlled Substance Act because not dispensing drugs for legitimate medical purpose.
Provision in controlled substance act saying AG can promulgate rules relation to registration and
control of manufacture distribution and dispensing of controlled substances. Control is ambiguous
word, so AG says I’m entitled to Chevron deference.
• Step Zero (1) AG action doesn’t fit into category one in Mead because interpretive rule wasn’t
passed through notice and comment rulemaking. (2) To see if AG action first into category two of
Mead look to whether congress delegated power to delegate that rule and whether AG acted
pursuant to that power. Court says this is interpretive rule, no notice and comment and not formal
adjudication. Control provision of statute not evidence of that delegation because that required
notice and comment and AG didn’t promulgate pursuant, though he has registration authority,
statute says have to look at 5 factors no evidence and can really only do a lot of this in consultation
with secretary of hhs. As general matter congress didn’t want making medical judgments. In end AG
just doesn’t administer kind of authority to make medical judgments under this act that would be
required to make this kind of decision. No delegation not in Chevron framework. Sounds a lot like
step one analysis looking at language.
• REVIEW
• Hearst says courts decide questions of law, but defer to agency on mixed questions of law and fact.
• Skidmore another mixed question, but here court Hearst doesn’t apply completely, only give
deference to extent rule has power to persuade court. Skidmore not complete delegation, like in
Hearst where involved agency adjudication which is good evidence of congress’s intent to delegate
power interpretation to agency.
• Chevron whenever have agency interpretation of statute, apply two-step test to see if court
should defer. (1) is there ambiguity? (2) If so defer to reasonable construction on of agency. People
think Skidmore not good law after Chevron.
• Christensen says opinion letter or non-binding statement of policy is not subject to Chevron
deference because opinion letters don’t trigger presumption that congress intended to delegate.
Only defer to agency interpretation that has force and effect of law, and court says this only
includes informal notice and comment rulemaking and formal adjudication or rulemaking.
• Mead (1) if agency action taken through notice and comment rulemaking or adjudication (formal
and informal), then agency interpretation subject to Chevron deference. These proceedings
evidence congress’s intent to delegate interpretive authority to agency. (2) if agency action does go
through notice and comment rulemaking, but was taken pursuant to a congressionally delegated
power to act in that way and have the force of law, then also subject to Chevron deference. For
action to have force of law need to have congressional delegation and exercise of power pursuant to
that delegation.
• Gonzalez AG issues interpretive ruling, not through notice and comment rulemaking. Congress
doesn’t delegate power to interpret to AG, so Chevron doesn’t apply – step zero case. To see if fits
into (2) in Mead look to whether congress delegated power to AG to make that rule and whether AG
acted pursuant to that power. Court says even if delegation in statute AG didn’t act pursuant to that
delegation which required notice and comment, conferring with 5 individuals for medical judgments,
etc. No delegation not in Chevron framework.

• Chevron + Step Zero Analysis
(1) first see if agency action is notice and comment rulemaking or adjudication (formal or
informal)? If yes then Chevron framework applies.
(2) if no, then see if agency acted pursuant to a congressionally delegated power to act in
that way and to have the force of law? This is Mead step two. If yes, then Chevron
framework applies.
(3) If no, then Skidmore applies and give deference to agency rules that are persuasive.
Court gives probabilistic deference – agree with position if good reason to think agency
correct.
• Can Make Both Substantive + Procedural Challenges To Law Just because substantive aspects
here can always make the procedural arguments. Can have rulemaking where say rule is invalid
because didn’t go through right procedures and also invalid because exceed agency’s authority
under the law. In case like this where no notice and comment and can be characterized as
legislative rule then can make the procedure argument too. It has the effect of law, so it should be
done via N&C. Rules that impose new duties and are basically legislative rules, under the APA they
must be Notice and Comment.
• Tension Between Chevron + MarburyIs there tension between Chevron and Marbury? Chevron
says agencies say what the law is, Marbury says courts say it. You could have a case in which court
says what statutory term means first, and then later agency says it means something different. Can
agency override the court? (if agency did it first, then agency would win in Chevron. so isn’t it
strange that the only thing that matters might be the order?) Policy (one of them) of Chevron is
Congressional intent - so if we follow intent, then we could say that whether or not court has acted,
agency gets interpretation. This really seems counter to Marbury. but SCOTUS says you have to
defer in this case (although the courts previous decision would still be relevant in the Step 1 part of
Chevron). Even if SCOTUS itself gave an interpretation, but Agency came up with an interpretation
that was also reasonable, then it might defer.
• Is Chevron consistent with APA?Chevron didn’t even cite the APA. Courts seem a little confused
by administrative law still. This might fit in the review section of APA under arbitrary and capricious,
or maybe § 706(2)(C).
• Agencies Are Winners In Chevron Who wins and who looses? big winner would be the agency.
Congress, it depends on the politics about the time. Congress might be happy because now they
can delegate away and to worry about it. But if it didn’t like agencies, then they might not be happy
that a agency is given so much law making power. Congress so far seems happy with Chevron. As
between Congress and the Courts, it doesn’t really give any powers to court from Congress.
iii. Review of Agency Discretion And Policymaking – “Hard Look ”Doctrine
• Arbitrary and Capricious Standard And The “Hard Look Doctrine” between the extremes
of de novo review and strong deference to administrative decision making, some courts have taken
a “hard look” at the agency’s decisional process, ensuring that they have considered all relevant
issues and polices and taken a good look at the facts, while allowing the agency the discretion to
determine policy. Is the agency’s process and its justification or rationale for its selection of a policy
alternative that becomes the focus of this approach.
o Remedy the normal remedy is a remand for further proceedings in which the agency may
attempt to buttress its original policy choice with more extensive analysis and explanation.
Court may find the decision to arbitrary and capricious because it is not adequately explained
or justified but the agency is free to try again.
o For agency fact finding in formal proceeding review is substantial evidence, for agency legal
interpretations do Chevron/Skidmore review. Courts apply hard look to things in between,
policy like judgments or discretionary opinion.

• HYPO Potential Challenges To LawEPA has authority over “waters” of the US and can
regulate pollutants. EPA interprets wetlands as waters, and passes a regulation through notice and
comment that requires farmers with runoff to get permit. What are grounds for challenging this?
o Challenge Legal Findings Can argue that wetlands are not waters within meaning of
statute, and that EPA exceeded its authority. Court will apply Chevron
o Challenge Law As Arbitrary and Capricious Can also argue that this is arbitrary and
capricious – fertilizer rule is weird and could have accomplished this through better method.
This is in discretion of agency who ahs power to choose to implement their regulatory power.
 Hard Look Doctrine Applied-- Hard look is when evaluating what agency did, what
studies relied on, how reached the decisions reached. Could mean take a look at
procedures, making sure agency itself took hard look. Did it gather evidence, do
testing, read comments, explain itself? But it could also be substantive, saying the
court should look at the evidence itself and make sure agency decision made sense.
The line between the two is not clear, and in the end it really means both.
Overton Park v. Volpe (US 1971)

• Facts Secretary of Transportation authorized construction of an interstate highway through
Overton park. Secretary made no formal findings explaining his decision and its consistency with
federal statues, but provided litigation affidavits asserting that the decision was his and supportable
by law. Federal legislation prohibited federal highway construction through public parts where “ a
feasible and prudent alternative route exist.”
• Arbitrary and Capricious APA requires reviewing court to overturn agency actions deemed to be
arbitrary, capricious an abuse of discretion or otherwise not in accordance with law. Overton Park
emphasized that his standard of review Is a narrow and that courts are not to substitute their
judgment for that of the agency. In essence, one must prove that the agency’s action is without a
rational basis, a difficult task to do.
• Standard of Review
o § 701Presumption of Reviewability§ 701 subject to judicial review because no statutory
prohibition on review and not committed to agency discretion by law. Narrow exception only
applicable in rare instances where statues are drawing in such broad terms that in given case
there is no law to apply.
o § 706(2)(E) Substantial Evidence this is not formal adjudication or rulemaking, so
doesn’t apply
o § 706(2)(F) De Novo Review – Unwarranted By Facts de novo review of whether
secretary’s decision was “unwarranted by facts” is authorized only in two circumstances:
First when the action is adjudicatory in nature and when independent judicial fact finding
when issues that were not before the agency are raised in a proceeding to enforce non-
adjudicatory agency action
o § 706(2)(A) Arbitrary and Capricious requires a finding that the actual choice made
was not arbitrary, capricious, an abuse of discretion or not in accordance with law. To make
this finding court must consider whether 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 Three Step Process For Judicial Review

(1) Is Agency Acting Within Scope of Its Authority? the court construes the relevant
statute to determine the scope and terms of the agency’s authority to determine whether the
agency is acting within the authority conferred. The determination of the scope and terms of
the agency’s authority determines the extent of the agency’s discretion if any.
(2) Whether Agency Considered All Relevant Factors? If agency has discretion to
choose among two or more courses of action, court decides whether agency exercised its
discretion based on a consideration of relevant factors. What are secretary’s view of
statutory terms “feasible and prudent?” Court didn’t say anything about what terms mean. It
is a procedural problem if agency doesn’t explain, and can’t just offer post hoc explanation
make up reasons after the fact have to explain as you were doing them like in Chenery.
Secretary didn’t explain whether considered feasible alternative route, statute requires
secretary to decide whether feasible alternative route exists – and secretary offers no
evidence.
 Court Remands Court remands and says we need procedural explanation based on
what went into the decision at the time. Either (1) district court can look at everything
that went into it, the whole record. But if it doesn’t exist or can’t get hold of materials,
then (2) Can call in agency officials to testify to say what thought basing their
decision on at time made it. Gives agency a change to go back and do it right.
(3) If Agency’s Weighting of Factors And Course Chosen Were Arbitrary or
Capricious Court will consider 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. What made secretary decide ok to put highway through a park.
Why no feasible and prudent alternative route?
 Arbitrary + Capricious Arbitrary and capricious applies to whether feasible
alternative route. Standard of review is substantial error, clearly erroneous, very
deferential. Still require there be some rational connection between the evidence in
record and agency’s’ conclusion. Agency can do whatever you do in terms of how
procedurally deal with that stuff. But when comes time for substantive review you
have to give an explanation. Court just saying we’re not doing your work for you
supply that explanation.
• Chevron Chevron is about coming in after fact and saying, is what agency did within range of
reason. This case is about inputs, what went into decision at the time. Chevron was decided
afterward.
Motor Vehicle Manufacturers v. State Farm (US 1983)

• Facts NHTSA directs Secretary of transportation to issue MV safety standards that “shall be
practicable, shall meet the need for motor vehicle safety, and shall be stated in objective terms.”
NHTSA passed standards requiring seat belts, NHTSA amends statute to only require detachable
seatbelts or airbags. Revision of rule is challenged as arbitrary and capricious.
• Arbitrary and Capricious Standard normally agency rule subject to arbitrary or capricious
standards, so rescission or modification of the agency’s action is subject to the same standard. The
revocation constitutes a reversal of the agency’s former views as to the proper course. Therefore
agency changing its course by revoking a rule is obligated to support a reasoned analysis for the
change beyond that which may be required when an agency does not act in the first instance.
Arbitrary and capricious standard applies to discretionary implementation of decision – this is pre
Chevron.
• When Agency Rulemaking Deemed Arbitrary and Capricious Scope of review is narrow but
agency must review the relevant evidence and provide a satisfactory explanation to its result
including a rational connection between the facts and its conclusion. Agency rule could be deemed
arbitrary and capricious if (1) the agency has relied on factors hat congress has not intended it to
consider, (2) entirely failed to consider an important aspect of the problem, (3) offered an
explanation for its decision that runs counter to the evidence, or (4) is so implausible that it could
not be ascribed to a difference in view of the product of agency expertise.
1. Agency Failed To Consider Airbag Zoning Rule Agency decided passive seatbelts
wouldn’t work, but did not consider a rule requiring only airbags. At the time agency did not
address this option. Only after the fact did they say it would be difficult to fit in small cars,
and bad PR to do it because expensive for car companies. This explanation is not something
that court can uphold because agency didn’t say this at the time.
2. Too Quickly Dismissed Safety Benefits Of Automatic Seatbelts Agency never
explained why didn’t consider non-detachable automatic seatbelts. Agency explained that
there were some worries about being able to get out of car if drove into river. Only offered
this explanation after the fact.
3. Court Takes Issue With How Agency Weighed This Evidence Would detachable
seatbelts have had benefit or not. Court goes deep into agency’s view of evidence. This
seems like substantive review as opposed to procedural review. Court says look maybe
weighted things wrong, view of evidence bad. That’s going pretty far says Bierschbach.
b. Availability And Timing of Review
i. Presumption of Reviewability + Preclusion of Review
• Presumption of Reviewability § 701 § 701 Default rule is that there is presumption of judicial
review. Even where the legislature has not explicitly provided for review, the absence of statutory
authority for review is not interpreted by courts as constituting a problem. Only where there is a
showing of clear and convincing evidence of contrary legislative intent should the court restrict
access to judicial review.
o Exceptions § 701 Exceptions to presumption of reviewability exist where (1) statutes
preclude judicial review; or (2) agency action is committed to agency discretion by law.
• Statute That Precludes Judicial Review The presumption in favor of judicial review is strong,
but statutes can preclude it. Congress might in enabling statute say we create agency A to do Z,
and when it does Z it’s not subject to judicial review. Must be clear and convincing evidence in
statute to preclude review – statute must explicitly say so though court sometimes find that it says
so implicitly.
Block v Community Nutrition Institute (US 1984) Implied Preclusion

• FactsAgricultural marketing Act authorized Secretary of Agriculture to issue milk market orders
establishing minimum provides processors must pay producers for milk. Consumers challenged
Secretary’s decision that higher price applied to reconstituted milk arguing made it uneconomical
for handlers to process, and deprives consumers of source of less expensive milk. Statute empowers
milk hinders to challenge way prices were set through agency process. Can consumers sue?
• Implied Preclusion - Presumption of Review Overcome – 

o Look Beyond Express Language Of StatuteWhether and to what extent a particular
statute precludes judicial review is determined not only from its express language, but also
from the structures of the statutory scheme, its objectives, its legislative history, and the
nature of the administrative action involved.
o Must Exhaust All Statutory Remedies First Statute required handlers first to exhaust
administrative remedies made available by the agency. After these formal administrative
remedies have been exhausted, handlers may obtain judicial review of secretary’s ruling in
any federal district court. The structures of this act indicates that congress intended only
producers and handlers, and not consumers to insure that the statutory objectives would be
realized.
 Illogical Wouldn't make any sense for congress to set up an elaborate scheme and
at the same tile allow consumers to go straight to court without participating in this
process and let court make final decision when scheme for exhaustion of
administrative remedies that applies to handlers.
• Supreme Court Supreme court says should have looked at scheme at a whole and wouldn’t
make sense to give consumers. Classic illustration of implied preclusion from statutory scheme.
Court says would defeat exhaustion requirement to give this to consumers. If handlers and
consumers can just get together.
Bowen v Michigan Academy of Family Physicians (US 1986) Presumption of Reviewability

• Facts Secretary of health issued regulation granting higher reimbursement levels from Medicare
to family physical’s who were board certified then to those who were not board certified. Drs
brought suit to challenge the regulation, arguing that distinguishing between board certified and
non board certified physicians violated 5h amendment of Medicare act. Statutory scheme says can
review decisions for challenging reimbursements under part A inpatient services, but doesn’t say
anything about reviewing for part B outpatient services.
• Challenging Regulation Itself Rather Than Determinations Made Under Regulation court
distinguishes between challenging the method by which such amounts are to be determined rather
than the day to day reimbursement determinations themselves. Presumption that can challenge
validity of regulation under statute which has to do with general method of calculation. That’s
because only going to be able to challenge it once.
o Strength of PresumptionPresumption is strong where challenging a regulation. Nature of
the claim matters.
ii. Exception To Reviewability – “Committed To Agency Discretion By Law”
• Committed To Agency Discretion By Law § 701(a)(2) APA allows judicial review except to
extent statute precludes review or the agency’s determination is committed to its discretion by law.
What does it mean for something to be committed to agency discretion by law? It means that there
is absolute no law to apply. Can review broad standards, but if no legal standard by which to
measure legality of agency action then can’t review this. Where statues is drawn in such broad
terms that in given case there is no law to apply. Thus although agency action may be committed to
its discretion by law, review is permitted where the agency abuses its discretion.
Webster v. Doe (US 1988)

• Facts Director of CIA terminated employee because he was gay. NSA provides that director of CIA,
“in his discretion, may terminate the employment of any officer or employee whenever he shall
deem such termination necessary or advisable in the interest of the US.
• Committed To Agency Discretion By Law Government says yes this is completely committed
to agency discretion by law, therefore no judicial review. Statute says in his discretion when he
deems it he can fire. If he deems it to be national security threat, there is no way for case to review
that. No law to apply to this specific statutory claim
o Policy the structures of the NSA and CIA suggest that termination decisions were
committed to agency discretion, since the effectiveness of the agencies and the ultimate
goal of national security depends on a reliable and trustworthy workforce. The director must
have complete termination discretion to ensure the integrity of the agency’s employees.
• Test For When Committed To Agency Discretion Two different views of what “committed
agency discretion means” that come out of case :
a. No Legal Standard no legal standard by which to measure agency action, Webster
make that claim specific test. gives so much discretion that no standard by which to test
legality.
b. Functional View – Certain Areas Courts Don’t Get Involved In courts take a holistic view
and don’t get involved in these decisions because of not good policy and for functional
reasons. Says some areas like reviewing national security and executive decisions is not
judicially cognizable – courts stay out of it. Much less doctrinal view of no law to apply and
functional view of areas in which doesn’t make sense to get court involved
• Constitutional Claim Is Reviewable court says this his constitutional claim is reviewable.
iii. Problem of Agency Inaction
Heckler v. Chaney (US 1985)

• Facts Respondents were sentence to death by lethal injunction. They petitioned FDA, calming the
drugs used for injection were not approved for use in human executions and FDA was required to
approve the drugs as safe and effective for human execution. Urged FDA to provide warning labels
and prosecute those who intend to use drugs for human execution. FDA commissioner refused to act
on the enforcement requires
• Agency Inaction Is Action how can they petition for review of inaction? § 551(13) “agency
action” includes the whole or a part of an agency rule, order, license, sanction, relief, or the
equivalent or denial thereof, or failure to act” APA says failure to act counts as an action.
• Inaction Is Committed To Agency Discretion By Law are failures to act precluded from
review because they are “committed to agency discretion by law?” YES presumption that inaction is
not reviewable. Agency decision not to enforce requires the presumption that judicial review is not
available. How To Rebut The Presumption This presumption may be rebutted by showing that
the substantive statute provides guidelines for the agency in exercising its enforcement powers.
o Agency Best Situated For Determining How To Use Its Resources agency decisions
to enforce require balancing of many factors, including whether a violation has occurred,
costs and likely success of the enforcement. The agency is better suited than the courts to
make enforcement determinations. Agency best situated for determining how to use its
recourses. Non-enforcement decisions involve resource allocation.
 Policy involves research allocation agency expertise in determining not to enforce.
Court is saying decisions not to enforced more broadly concern because thousands to
them every day. May be question of volume rather than qualitative difference in
decision.
o Not Coercive agency refuse to enforce does not generally result in a coercive power over
an individual’s liberty or property rights, areas that courts normally protect.
 Policy when agencies make enforcement decisions and use their enforcement power
then that is good time to for court to review it. But when they don’t use coercive
power ok not to review it because doesn’t effect anybody. Regulatory agenda will be
guided by people guided to sue and not public interest.
o Like Prosecutorial Discretion agency refuse to enforce is similar to traditional executive
branch power not to indict. Ordinarily the discretion of a prosecutor whether to initiate
enforcement action has been shielded from judicial review.
• Functional Analysis here says no reviewability looks to 701(a)(2) committed to discretion by

law, cites “no law to apply” language but then it doesn’t seem to apply that test and goes off on
functional analysis. Major policy decisions about how to use resources, not to enforce are not
coercive, no focus for judicial review, lot like prosecutorial discretion which is immune, of those
reasons not going to review FDA decision here.
• When Can Get Review For Agency Decision Not TO EnforceThis is just presumption that can be
rebutted by statute that provides guidelines for agency to follow in exercising its enforcement
powers. So maybe you can get review of decision not to enforce, or at least that’s the implication.
• Chaney The Chaney court relied on 3 features of nonenforcement decisions in arriving at

presumption of unreviewability
1. Agency Expertise First, such decisions require a high level of agency expertise and
coordination in setting priorities.
2. Not Exercising Coercive Power Second, the agency in such situations will not
ordinarily be exercising “its coercive power over an individual’s liberty or property rights.”
3. Prosecutorial Discretion Third, such nonenforcement decisions are akin to
prosecutorial decisions not to indict, which traditionally involve executive control and judicial
restraint.
• HYPO Reviewability of Agency Inaction Congress passes statute saying EPA in his shall put
waste dumps which is his judgment are seriously contaminated on ultafund list which provides for
expedited clean up of bad sites. In compiling list EPA should consider 10 factors. Dump not on site
and citizens group petitions to have it put on. EPA says this is unenforceable because committed to
agency discretion by law. Assuming administrator applied guidelines and found dump not to be so
bad, then not reviewable because he has discretion.
o Administrator Not Listing Any Dumps On List Statute ahs these guidelines, and
administrator isn’t listing anything on ultra fund list.
 Reviewable By Courts? Is This Reviewable? In case of wholesale abdication
Bierschbach thinks courts will get involved. Abdication is where agency consciously
and expressly adopted general policy so extreme that amounts to abdication. In that
case reviewing court would probably require agency to provide a reason for this
inaction or tell them to act.
 Congressional Remedy Congress could tell agency I’m not going to give you
funding, may alter statutory mandate, etc.
o Administrator Only Listing Some Dumps - Discriminatory Intent What if petition is
filed and there is allegation that meets statutory criteria. EPA doesn’t put on list because in
minority community so don’t care. Other dumps that meet criteria in similar way were listed.
 Court Reviews Constitutional Challenges Can court review? Yes if there is
constitutional claim, court is more likely to review. In Heckler court focuses on fact
that no colorable claim is made that agency’s refusal violated constitutional rights.
But if it did more likely to review.
• Many Exceptions To Presumption of Unreviewability of Agency Inaction it’s not as if decisions not
to enforce are never reviewable, there are exceptions. If constitutional claim, court can enforce. If
statute clearly requires agency to bring action and they don’t courts can review as well. Example if
statute says NLRB must bring unfair labor action if finds probable cause in 60 days, agency finds
probably cause but doesn’t bring action. This is easily reviewed by court because there is clear legal
standard that triggers obligation to enforce.
American Horse Protection Association v Lyng (D.C. Cir. 1987) Reviewability Of Agency Refusal To
Institute Rulemaking
• Facts Congress passed Horse Protection Act to end practice of soaring horses, by forbidding the
showing or selling of soared horses. Secretary of Agriculture exercising rulemaking power, issued
regulation that prohibited soaring devices that were above a certain weight. Agency says,
conducting study to see if lighter should be forbidden as well and will address later on. American
Horse Association complains, that since then studies have come out that show lighter soaring
devices also inure horse and should amend regulation.
• Reviewability of Agency’s Refusal To Make Rule Where Interested Party Petitioned For
Rulemaking Decisions not to institute rulemaking are reviewable and are subject to abuse of
discretion standard of review.
o Interested Parties Can Petition For Rulemaking § 553(e) “Each agency shall give an
interested person the right to petition for the issuance, amendment, or repeal of a rule.” and,
when such petitions are denied, to give “a brief statement of the grounds for denial,” Agency
must allow parties to petition to institute rulemaking. Congress expected that agencies
denying rulemaking petitions must explain their actions.
o Distinguish Chaney (1) under APA agencies must allow parties to petition to institute
rulemaking, whereas APA doesn’t have provisions for petitioning to enforce a rule, (2)
refusals to institute rulemaking turn upon questions o flaw, whereas nonenforcement
decisions are intensely factual decision. (3) Refusals to institute rulemakings are likely to be
relatively infrequent By contrast thousands of nonenforcement decisions made daily. For
these reasons court says it will review decision not to amend an existing rule.
o Arbitrary And Capricious Standard of Review Case requires a determination of
whether the Secretary’s failure to act was “arbitrary, capricious, an abuse of discretion, or
otherwise not in accordance with law” under § 706(2)(A). Court applies analysis similar to
hard look doctrine –review will be extremely deferential but agency still needs to provide
reasons.
 What Court ConsidersIn considering a refusal to grant a rulemaking petition, the
court must examine the petition for rulemaking, the comments, pros and cons of
rulemaking, and agency’s explanation for decision to reject the petition.
 Change In Factual Basis Of Law when a petition has sought modification of a rule on
the basis of a radical change in its factual premises court holds that “an agency may
be forced by a reviewing court to institute rulemaking proceedings if a significant
factual predicate of a prior decision on the subject (either to promulgate or not to
promulgate specific rules) has been removed.”
• Decision Agency gave court Conclusory statements made by people in agency and court says we
need better reasons so send it back for agency to provide more reasons. It does not order agency to
institute rulemaking. Then maybe court would say must institute rulemaking if don’t come back with
reasons.
Mass v EPA (US 2005)

• Facts CAA says EPA shall by regulation set standards application to air pollution by classes of
motor vehicles. EPA says
• Supreme court embraces this view in Mass v EPA case. CAA says administrator of EPA shall by
regulation do standards applicable to air pollution to classes of motor vehicles that in EPA’s
judgment causes or contributes to air pollution that reasonably expected to endanger public welfare.
Massachusetts petitions EPA to prescribe regulation governing tailpipe emissions from cars. EPA
says emissions are not air pollutants within meaning of statutory section.
• Two Issues: (1) Is EPA interpretation of statute OK? And (2) Is EPA’s decision not to institute
rulemaking OK?
o EPA Interpretation of Statute What is standard of review? EPA says GHG emissions are
not air pollutants within meaning of statute. Apply Chevron (1) is air pollutant ambiguous
within meaning of statute? If ambiguous defer to agency. Stevens says its not ambiguous, it
is clear from statutory text that air pollutant includes GHG emissions. Statutory text
forecloses EPA argument that GHG are not air pollutants.
o Decisions Not To Institute Rulemaking  EPA says even if GHG emissions are air
pollutants we have discretion not to act. Supreme court embraces exception to agency
inaction unreviewability saying this is reviewable because it is a decision not to make a rule,
and not an nonenforcement decision. Abuse of Discretion – EPA gives reasons that basically
new president came in and policies changed – different priorities. Court bats it away and says
ok president has different priorities but that doesn’t change fact that statute says you need
to regulate on this issue if satisfy this criteria. You can give policy based reasons but have to
tie them to this statute. Court remands back to agency to either regulate or give reasons
connected to statute for not regulating.
iv. Exhaustion And Ripeness
1. Exhaustion
• Exhaustion no one is entitle to judicial relief until the prescribed administrative remedy has been
exhausted. Stated differently, a party may ordinarily not seek judicial review of administrative
agency action until she has first utilized all her appellate opportunities with in the agency.
• Why Require Exhaustion (1) agency expertise - agency has been established to apply the
statute in the first instance so desirable to allow the agency the first opportunity to develop the
facts and apply the law. (2) efficiency - more efficient to allow agency to proceed without
interruption than to allow judicial review at the various intermediate steps (3) develop record -
judicial review is enhanced by allowing agency to develop a factual record and apply its expertise.
Judiciary can more efficiently employ its resources by reviewing the agency record than by
compiling its own independent findings of fact (4) not weaken agency power - party who is forced to
exhaust her administrative remedies may choose not to appeal adverse judgment. Judicial
interference in administrative process would weaken agencies by encouraging parties to ignore their
procedures.
• Waiver Of Unrepresented Or Unexhausted Claims ordinarily party must raise all issues
before the agency before appealing its final decision to courts. The courts will however occasionally
review issues not raised below to avoid hardship.
Myers v Bethlehem Shipbuilding (US 1938) Classic Exhaustion Requirement

• Facts NLRB files unfair labor practice against company. On day of hearing employer goes to court
asking for injunction against complaint because agency has no jurisdiction because he’s not
involved in interstate commerce. NLRB statute provides for hearing before ALJ.
• Challenging Agency Jurisdiction even when party alleges the agency has no jurisdiction over
the controversy, no one is entitled to judicial relief for a threatened injury until the prescribed
administrative remedy has been exhausted. NLRB will decide initially whether it ahs jurisdiction. If
the agency erroneously concludes that it does, then the error can be rectified by court on review.
o Not Entitled To Judicial Relief Until Administrative Remedy Exhausted Supreme
court says district court has no power to issue the injunction. It is agency’s exclusive right to
handle this controversy in the first instance. You can’t just march into court and get an
injunction when agency does something you don’t like. Not entitled to judicial relief until
prescribed administrative remedy is exhausted.
FTC v. Standard Oil (US 1980) Interlocutory Review

• Facts FTC issues complaint against oil company for unfair competition. Oil company files motion
to dismiss complaint saying that standard for instituting unfair compensation proceeding hasn’t
been meant. FTC denies motion. Oil company appeals to court on grounds that the cost and
disruption of defending itself constituted irreparable harm
• No Interlocutory Appeal Of Agency ActionSupreme Court says oil company can’t come into
court seeking an interlocutory appeal of an agency ruling, have to exhaust administrative remedies
first. Administrative remedies include going through agency hearing and trial before agency to see if
guilty or not. if not guilty just wasting judicial resources.
o No Piecemeal Review if take piecemeal review of these cases it will slow down agency
processes and take from agencies their power to review in first instance and to apply their
expertise to fact finding.
• Policies We need to let agencies apply their expertise, engage in fact finding, correct their own
mistakes, respect their autonomy, do that by letting them see their process through, conserve
judicial resources. Want to encourage litigants to respect what agency is doing.
McKart v US (US 1969) Criminal Cases

• Facts MCKart was convicted of willfully failing to report for induction to Army. Once his mother
died his classification changed on grounds that exemption for sole surviving son no longer applied.
McKart failed to appeal the reclassification. Then he was prosecuted criminally for dodging the draft.
Defends that reclassification was invalid.
• Exhaustion Not Required Court says that McKart didn’t waive his right to challenge statutory
interpretation. Why no exhaustion here?
o Criminal use of exhaustion in criminal cases may be exceedingly harsh, because individual
will be forced to go to jail without review of a potentially invalid order.
o Legal Question here the question is one of statutory interpretation, the resolution of
which requires no particular expertise by the administrative agency. Here it is purely legal
question further agency procedures wouldn't help. Question is if your mom dies are you then
eligible for exclusion as sole surviving son. Agency not going to add any major expertise
here.
o Exhaustion Not Clear In Statute statutory scheme, statute doesn’t’ say anything about
when required to exhaust whereas Meyers says at least a little more about here’s how works
you go before NLRB then go to circuit court this case doesn’t say anything bout any of that.
That factors in as well
• Bierschbach Explanation exceptions to exhaustion will generally revolve around hardship. This
decision is unusual because complete disconnect between decision and exhaustion policies. In case
of purely legal question agency expertise isn’t going to help. No factual development to be done. No
worry of opening floodgates. Not as if everyone will try to get out of draft by becoming sole
surviving son and then changing. If ever advising clients always tell them to exhaust.
2. Ripeness
• Ripeness when one seeks discretionary relief from the judiciary for an agency action, the courts
may resist review until the controversy is “ripe.” This avoids premature adjudication of disputes that
have not reached sufficient concreteness to warrant judicial interference, and avoids disruption of
agency decision making until the impact thereof has run its course.
o Look At Ripeness From Court’s Perspective Rightness is what is case look like from court’s
perspective, unlike exhaustion where looking at from agency perspective have they had
chance to do what need to do. Ripeness is whether case is well presented before court.
Abbott Laboratories v. Gardner (1967) Fitness + Hardship Test

• Facts FDA promulgated regulation after notice and comment requiring drug manufacturers to
include generic names on the labels of their prescription drugs. 37 drug manufacturers objected on
grounds that commissioner has exceeded his authority. Nobody has been prosecuted yet by FDA
• FDA’s Argument FDA says (1) this is completely unreviewable under § 702 because didn’t’ suffer
legal wrong – no presumption of review. “A person suffering legal wrong because of agency action,
or adversely affected or aggrieved by agency action within the meaning of a relevant statute, is
entitled to judicial review thereof.” (2) Can’t Challenge Law Until Applied To You - FDA says can’t
challenge every law you don’t like until it’s applied to you and then raise challenging law as defense.
No case or controversy until applied – courts don’t’ want to issue advisory opinions. Ripeness
supposed to keep courts from getting involved unless truly have something to rule on.
• Ripeness Policy Basic rationale of ripeness doctrine is to prevent courts, through avoidance of
premature adjudication, from entangling themselves in abstract disagreements over administrative
policies, and to protect agencies from judicial interference until administrative decision has been
formalized and its effects felt in a concrete way by challenging parties.
• Ripeness Test Court evaluates both the (1) fitness of the issue for judicial decisions and (2) the
hardship to the parties of withholding court consideration.
o Fitness of Issues For Judicial Resolution Rule is final and the dispute is over a purely
legal issue of whether FDA exceeded its authority. Involves interpretation of statute. Court
says this is capable of judicial resolution because purely legal issue, and it is a final agency
action with nothing left for agency to do.
o Hardship To Parties From Withholding Review What is the impact of the regulation on
plaintiffs. The impact is sufficiently direct and immediate as to render the issue appropriate
for judicial review. Drug companies must either break the law or burn old labels and print out
news ones at considerable expense. Onerous burden either way. Hardship here of
withholding review is severe
• Court Explanation Government argues that if do pre-enforcement review it will be harder for us to
enforce the law. Court says this review will clarify immediately whether you are even permitted to
enforce the law and assess penalties.
Toilet Goods v. Gardner (US 1967)

• Facts FDA passes regulation if inspectors are denied access to facilities FDA can withhold
certification until access is granted. Toilet goods brings pre-enforcement action challenging the law.
• Ripeness Testhere court says can’t bring pre-enforcement challenge. Why? What’s difference
between this and Abbot.
o Fitness For Judicial Resolution Court doesn’t know if FDA will really withhold
certification because law only says that they may withhold certification. In Abbott regulation
says drug companies must print generic names on labels. Court says here regulation is less
directed at primary conduct of industry. Don’t know yet if agency will enforce the law. Court
says need to let it play out a bit more to see how agency applies the law.
o Hardship To Parties From Withholding Review Court says it’s not clear that any
parties will have to take any immediate burdensome action if court doesn’t hear the case.
Fact that regulation directed to agency enforcement priorities rather than primary conduct of
companies has a lot to do with this
Toilet Goods Case II

• Facts FDA regulation expanded definition of color additives which FDA has to approve before
manufacturers can use them. Companies bring pre-enforcement action against agency. Court says
this action is ripe for review.
• Ripeness Test Under first prong as long as legal issue and agency done everything it can do then
challenge is ripe. Under second prong court says this is more like Abbot where putting party in
position of breaking law or incurring significant expense so that there is hardship.
• Where Does Ripeness Requirement Come From? Prudential standing requirement that judges
have constructed against background of constitutional norm of cases and controversies. Not clearly
unconstitutional for court to hear case not ripe but strong prudential reasons not to.
• Congress Anticipates Challenge To Statute Statute can clearly authorize the court to hear a
challenge – 30 days after final whoever wants to challenge can go to DC court to do so. Where
congress anticipates challenge to regulatory scheme.
v. Standing
• Constitutional Standing Requirements Article 3 of constitution limits judicial power to cases

and controversies. Courts can hear cases and controversies which involves injury in fact, causation
and redressability. One who seeks judicial review must allege suffered some actual or threatened
injury as a result of the illegal conduct of the defendant, that the injury is fairly traceable to that
defendant’s actions, and that it is likely to be remedied by a favorable decision. Administrative law
also has statutory component which raises different set of issues - who can march into court to sue
to vindicate statute.
• Statutory Standing Requirements APA § 702 – “A person suffering legal wrong because of
agency action, or adversely affected or aggrieved by agency action within the meaning of a relevant
statute, is entitled to judicial review thereof.” l
o Must Be Vindication Legal Right Courts say can’t point to law and say I don’t like it,
must be vindication your own legal right before come to court and sue – tort, contract,
statutory. Can’t just say FCC regulating airways, I have interest in living in country where
planes not flying overhead all the time.
o Zone of Arguable Interest P must show injury arguably within zone of interest
protected/regulated by statute.
• Competitors Have StandingAgency relaxes restrictions for standing when a competitor is

challenging a law that benefits his competition. Example agency relaxes restrictions on credit union,
bank challenges saying violates statute. Regulation doesn’t directly affect bank but has standing to
challenge because injures banks business.
• HYPO Protecting General Legal Rights Secretary approves highway through park. You think
violates statute, do you have standing to sue? Ask question do you have legal right? Generalized
grievance that right to enjoy public parks being violated. One of problems with legal rights test is
a lot of statutes that protected general rights of public would have lots of statutes aimed at
protecting public welfare at large that nobody would be able to vindicate. Other problem with legal
rights tests, is asking if you have legal right is same as asking does P have cause of action so little
bit of circular tests.
Data Processing v Camp (US 1970)

• Facts Comptroller says banks can provide data processing services to other banks and customers.
Data processing challenges saying this is violation of Banking statute which says banks can only
engage in “bank services”, so banks can’t market data processing services.
• Legal Rights Tests Legal rights test says individual only has standing if the right invaded is a
legal one (e.g. arising out of contract, property, tort, or statute). Would Data Processing have
standing? Is there legal right to be free of banks providing these services? Can take some view of
statute and say it does. Court rejects this test saying goes to merits of controversy and not issue of
standing.
• Zone of Arguable Interest Whether the interest sought to be protected by complainant is

arguably within the zone of interests to be protected or regulated by the statute or constitutional
guarantee in question? Is P within arguable zone of interest congress intended in creating statute?
o Two Part Test Must Show: (1) Injury in Fact + (2) That In Zone of Interest. Zone of
interest test requires two step analysis. What are the interests arguably protected by the
statutory provision at issue, and are the plaintiffs interests affected by the agency action in
question among them.
 Banking Statute Arguable that banking statute brings a competitor with in the zone
of interests protected by it. banking statute purpose was to prevent banks from
engaging in nonbanking activity.
o Arguable As long as asserting some interest arguably related to statutory scheme you
have standing.
• HYPO Incidental Effects Not In Zone of Interest FAA enacts rule saying no pilots over age of
60. Side effect is it reduces number of individualized licensing hearings held, and stenographers
have less business. Stenographer goes into court to say that rule violates the statute. FAA says you
don’t have standing
o Is Stenographer In Zone of Interest? She has injury in fact, and can say arguable that one
of purposes of regulation is to preserve jobs for bureaucrats that enforce the regulations.
Hard to argue regulation for pilots is to make sure stenographers have stream of business.
This is totally incidental how much business stenographers have.
Clark v Securities
• Facts McFadden Act only permits national banks to sell discount brokerage services to public. The
act limits the national bank branches to instate branches a where deposits are received or checks
paid, or money lent. Comptroller determined that discount brokerage services were not brokerages
under act allowing national banks to open discount brokerage offices. Association of securities
dealers sued comptroller for exceeding his legal authority.
• Zone of Interest TestIs McFadden Act arguably designed to protect securities dealers?
Congressional intent in passing the act included the desire to limit national banks; ability to branch
without regard to state law, prevent banks from obtaining monopoly control over credit and money,
and forestalling dangers of unlimited banking. Purpose of banking statute was to protect potential
competitors of banks from too much competition by banks, and securities deals competitors. Thus
congressional intent does not preclude securities dealer association from judicial review.
o Congressional Intent reviewability turns on congressional intent.
• Who is Not In Zone of Interest?  Zone of interest test denies a right of review if the plaintiff’s
interests are 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. Want to be sure congress
would have contemplated these kinds of people bringing suit
Air Courier Conference v. American Postal Workers Union (US 1991)

• Facts Statute gives USPS legal monopoly over certain kinds of mail delivery. Postal services
issues rule suspending operation of statute – and says in public interest for certain international
routs postal service will give letters to private carriers and let them deliver, instead of USPS going to
Italy will give to DHL. Postal Employees union brings suit saying rule is invalid under statute.
• Zone of Interest Do they postal employees have standing? They have injury in fact because
losing jobs. Are they in zone of arguable interest? Purpose of statute was to protect revenues not to
protect jobs. Statute passed before there were even postal employees, congress couldn’t have
thought about this. Court says no standing.
o Arguable? Isn’t it at least arguable that statute that gives monopoly is also designed to
protect market share of this organization? And isn’t it arguable that contemplated that would
mean more jobs for employees?
National Credit Union v. First National Bank (US 1998)

• Facts Credit Union Act requires federal credit union membership be limited to groups having
common bond of occupation or association, or to groups within a in well defined geographic region.
NCUA interpreted it to permit credit unions to be composed of multiple unrelated employee groups.
Banking organizations challenge interpretation because taking over their market share.
• Zone of Interest regulating credit unions affects credit unions market shares. And any affect on
market share affects competitors so therefore within zone of interest.
o Competitors Court allows competing businesses to get within zone of interest because of
general thought that when regulate business by implication going to be some spillover on
competition so think competitors are in it
• O’Connor Dissent O’Connor dissent says regulation meant to make sure credit unions responsible
and solvent. Nobody had any thought at all about banks competing or market share. Interesting
point. How majority applies test is not good because everybody who establishes some kind of injury
in fact pretty much has standing.
• Zone of Interest Summary Being with in zone of interest means that your interest
systematically coincide with interests that congress meant to regulate or promote with the statute
in question. Usually this means if you’re a competitor you have standing. Just has to be arguable
that coincide, but still has to be arguable.
• HYPO Zone of Interest Test - General Public Interest I live in area in which Radio Station
wants to broadcast subject specific content that I want to hear. FCC denied license under statute.
Can I go into court and sue? I have injury in fact because can’t hear that content. But not really in
zone of interest. Not competitor.
o Public Interest Within Zone of Interest FCC has to consider public interest, so maybe
within zone because have public interest argument. DC circuit held that you are within zone
of interest so who knows whether Supreme Court would agree or not. Those cases are on
border.

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I.

THE CONSTITUTIONAL POSITION OF ADMINISTRATIVE AGENCIES

• Agency’s Connection To Three Branches of Government Where do agencies fit in to this

Boyce Motor Lines v. US (1952)

• Laws Which Constrain Agencies

b. Relation of Agencies To Congress

i. The Rise And Fall of The Nondelegation Doctrine

1. Separation of Powers And Checks and Balances

• Separation of Powers + AgenciesSeparation of Powers doctrine insists that infringements on

• Purpose of Nondelegation Doctrine

• Delegation + Congress’s Accountability When congress delegates to agencies there is no

• Why Congress Delegates?

2. Agency’s Power to Legislate

• Non-Delegation Doctrine Congress Cannot Delegate Legislative Power Congress can’t

• Different View of Nondelegation Doctrine

• Post Schechter Delegation – Wartime Delegations

ii. Dealing With Delegations

1. Problem of Legislative Language

“The Benzene Case” - Industrial Union Dept. v. American Trucking (1980)

Administrative Law - Bierschbach 5

American Trucking v EPA (1999)

Administrative Law - Bierschbach 6

Public Citizen v. Young (1987)

2. Other Legislative Response

Administrative Law - Bierschbach 7

INS v Chadha (1983) One House Legislative Veto Unconstitutional

c. Relation of Agencies To The President

• Appointment Clause Analysis if federal official is appointed by President, Courts of Law, or

Administrative Law - Bierschbach 8

Buckley v. Valeo (1976)

• Appointment By Court of Law or Head of Department?

Landry v. FDIC (2000) Administrative Law Judge – Employee

2. Principle Officer Or Inferior Officer

a. Inferior Means Not As Important

Morrison v. Olson (1988) Independent Counsel – Inferior Officer

• Factors For Determining Whether Principle of Inferior Officer

b. Inferior Means Subordinate

Administrative Law - Bierschbach 10

• HYPO Inferior v Principle Officer Analysis US attorney by statute is appointed by president

ii. Removal And Presidential Control Over Agency Action

Administrative Law - Bierschbach 13

• President For Cause Removal Over Quasi-Judicial Sentencing Commission - Mistretta

• HYPO Congressional Removal Of Executive Officer - NLRB Chairman of National Labor

Administrative Law - Bierschbach 14

iii. Executive Orders

• Executive Orders Are Binding On Cabinet Members

d. Relation of Agencies To Judiciary, And Separation of Power

i. Congress Delegation of Judiciary Power

Crowell v Benson (1932)

o HYPO Congress Delegates All Criminal Prosecutions To Article 1 Court Congress

ii. Combination of Functions At Agency Head Level And Potential Bias

Withrow v. Larkin (1975)

• Examples of Unconstitutional Combinations FunctionsThe following are examples where

II. AN INTRODUCTION TO ADMINISTRATIVE PROCEDURE

a. Principles of Administrative “Common Law”

Administrative Law - Bierschbach 19

SEC v Chenery I (1943)

Administrative Law - Bierschbach 20

Lemoyne- Owen College v. National Labor Relations Board (2004)

ii. Estoppel and Res Judicata

• HYPOMistaken Post Office ManualJeweler brings package of jewels to be shipped to post

Administrative Law - Bierschbach 21

• Private Litigant May Not Recover For Estoppel Against US Government