Administrative Law--Outline of Issues

I. Constitutional Issues Article ILegislative Power (Nondelegation)

1) General Definitionthe enactment of rules (laws) Agency engages in: a. Rulemaking: Results in a rule. general applicability and future effect. b. Adjudication: results in an order. Retroactivity and particular applicability. Licensing is always a type of adjudication. 2) Agency examples: drafting and promulgating rules (regulations) with the force and effect of law.

3)

Separation-of-powers concerns: a) The legislature delegates legislative power (rulemaking power) to another branch or an independent agency (constitutional). --Panama Refining (violation) Schechter Poultry (violation); Mistretta (modern doctrine only requires an intelligible principle); American Trucking Assns v. U.S. EPA (no violation).
1. Mistretta Rule: The intelligible principle test applies to congressional delegations. As

long as the act by Congress includes an intelligible principle to which the delegee is directed to conform, the legislative action is not a forbidden delegation of legislative power. The Supreme Court of the United States has ruled it constitutionally sufficient if Congress clearly delineates the general policy, the public agency which it to apply it, and the boundaries of this delegated authority. Mistretta makes it clear, Scalias dissent notwithstanding, that the intelligible principle standard can usually be satisfied with a clear legislative purpose. It emphasizes a functionalist, rather than a formalist, justification for this.

Test for Intelligible Principal: Sufficient if Congress clearly delineates: This would satisfy the
nondelegation doctrine:

1. General policy 2. Public agency which is to apply it 3. Boundaries of the delegated authority

2.

Schecter Poultry (violation): Because fair competition can mean almost anything under the statute, Congress has delegated the regulation of virtually the entire economy to the president and to industry groups. If anything violates the nondelegation statute, this is it. Violation of the nondelegation statute.

3.

Panama (violation): Unconstitutional delegation of power to the president. Violation of the nondelegation doctrine. While administrative agencies predated the New Deal, they expanded greatly, in number, scope, and power, after it. Unconstitutional because there is no intelligible principle. Unlike in Hampton, there are no identified set of circumstances or restrictions that would enable one to predict, ex ante, why or when the president might ban shipments of Hot Oil.

GeneralRule for Intelligible Principal (Kent v. Dulles): The intelligible principle, vague though it may be, must come from Congress, or be capable of discovery in the statute by the Court, in order to satisfy the nondelegation concerns. The agency itself cannot discern it.

b)

The legislature delegates legislative power to an agency whose sole function is to promulgate rules (constitutional). --Mistretta (no violation): Junior Varsity Congress is okay.

c)

The legislature takes legislative actions without following prescribed means under Article I (unconstitutional). --Chadha (violation): legislative vetoes are unconstitutional under Article 1. Congress cannot repeal agency or presidential actions through the use of a legislative veto in violation of Article 1.

d)

The legislature gives itself the power to appoint officers of the United States. (unconstitutional) Congress can vest the power onto the President, the courts, or the Heads of Department to appoint inferior officers). --Buckley (violation): The 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 United States, 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 Department.

.
Officers: president alone can appoint an officer, with advice and consent of Senate or anyone else. Inferior Officers: Appointment by president, in the courts of law, or in the heads of departments (Agencies). (note: you have to be important to get this title). Congress vests the power in the president, courts of law, heads of deparment to appoint inferior officers. CONGRESS CANNOT APPOINT HEADS OF AGENCIES directly, etc.

Employee: Everyone else. Constitution doesnt apply to them (98% of bureaucracy), Congress can set up whatever system they want for hiring regular employees. e) The legislature actively supervises an executive official by giving itself removal power (unconstitional) --Bowsher (violation); (Myers (violation)
Bowsher: Congress cannot reserve to itself the power of removal of an officer charged

with the execution of the laws except impeachment.

Myers: Court held in favor of constitutionally based presidential removal power over executive officers (Congress cant give themselves any power over removal).

Article IIExecutive Power (Appointments and Removals)

1) General Definition: take care that laws be faithfully executed. Shift from concerns
about legitimacy of delegation to questions about how the elected branches (legislative and executive) can attempt to control the behavior of administrative agencies, and affect the decisions that they make.

2)

Agency examples: determininge.g., through inspections or issuance of subpoenaswhether, under the statutes and other laws it is responsible for administering, people are entitled to benefits (e.g., welfare, farm subsidies) or licenses (e.g., doctors) or are liable for sanctions (e.g., polluters); prosecuting violations; etc. Separation-of-powers concerns: a) The legislature restricts the executives power to remove executive officials --Humphreys Executor (no violation), Morrison (no violation)

3)

Humphreys: : Congress can limit presidential removal of officers in independent agencies.

b)

The legislature places restrictions on the executives power of appointment of principal officers

--there are conflicting views about the constitutionality of such restrictions

(see for example the Volokh excerpt passed out in class) but the Supreme Court has never invalidated any of them

Article IIIJudicial Power

General Definition: the official right to hear, consider and decide questions in controversy. Generally, in

the agency setting, there will be an agency adjudication, followed by an internal agency review of some sort, followed by judicial review in an Article III court. Legislative vs. Adjudicative: This is a different nondelegation problem. Whereas the previous section is concerned with delegation of legislative power, this section is concerned with (the potentially unconstitutional) delegation of judicial power.

Agency examples: issuing decisions and orders (e.g., imposing sanctions) 3) Separation-of-powers concerns: a) The legislature gives judicial power to non-Article III entities, including independent agencies.

--CFTC v. Schor (no violation): Arguments in favor of constitutionality: Efficiency

(functionalist): There are obvious efficiency and administrative gains to be had by adjudicating all the issues in a case in a single forum. The Court argues that you cannot stretch statutory text to an implausible degree. In this case, it was too strained a reading of the statutory language to hold that it did not confer jurisdiction upon the CFTC to hear state law counterclaims. Private Right: (Functionalist Perspective) a. OConnor admits that this is a private right, and doesnt try to twist it into the public rights bin. b. But she takes a highly functionalist approach. i. While private rights vs. public rights is not irrelevant, it is not dispositive either. ii. In private right situations the court will be more concerned about Article III violations, but there are some situations, as here, where the Article III concerns are not too serious.

b)

The legislature gives a court of law power to appoint executive officials who are inferior officers --Morrison (no violation)

Agencies

1) 2)

General Definition: Often perform all three of the powers granted in the Constitution: 1) rulemaking; 2) enforcement of the laws; 3) adjudication Separation-of-powers concerns: a) An agency officer performs more than one of the three powers in the same action --Withrow v. Larkin (no violation): Vesting the authority to investigate
and adjudicate in the same agency does not violate due process.

II.

Informal Rulemaking
A. Trigger for Informal Rulemaking Procedures (APA 553) --absence of language requiring a hearing on the record B. APA 553 procedural requirements 1) Agency issues a notice of proposed rulemaking in the Federal RegisterAPA 553(b)

Challenge: Notice failed to disclose all of the relevant data that animated the agencys thinking had important information which it failed to disclose (usually technical information) in the Notice and upon which its rule was ultimately based rule: agency commits serious procedural error when it fails to reveal portions of the technical basis for a proposed rule in time to allow for meaningful commentary (Connecticut Power) 2) noticefor agency receives new information that is directly relevant to its ultimate decision during the and-comment period (and doesnt publish it public comment)-1)

rule: final rule that is a logical outgrowth of the proposal does not require an additional round of notice and comment even if the final rule relies on data

submitted during the comment period (Building Industry Assn) BUT rule: Agency may rely on supplemental materials only when there is no prejudice to the interested parties No prejudice if materials only supplement (Chamber of Commerce) Challenge: Final Rule differs to some degree from the initially proposed rules in substance and details rule: agency adopting final rules that differ from its proposed rules is required to renotice when the so major that the original notice did not the subjects for discussion butagency need not renotice changes that follow logically from or that reasonably develop the rules proposed originally (Connecticut Power) Challenge: Agencys final rule concerns a subject that was not adequately flagged by the notice rule: public must be made aware of the agencys p roposals via the Notice (MCI Telecommunicationsnot assigned to read) 2) Interested parties are given an opportunity to participate APA 553(c) Challenge: agency procedures are not adequate rule-- Unless constitutional due process or an organic statute requires them, Courts cannot require additional procedures beyond those mandated in APA 553 (Vermont Yankee) 3) Publication of a concise general statement of basis and purpose for the ruleAPA 553(c) Challenge: agency did not adequately explain the rule it adopted

changes are adequately frame

it

rule: must indicate sufficiently the agencys reasons for the rules selected, so that the reviewing court is not faced with the task of rummaging through the record to elicit a rationale on its own (Connecticut Power) Challenge: agency did not respond to concerns raised by interested parties rule: agency not required to respond to every item of fact or opinion included in submissions from interested parties, but it must respond to those comments which, if true, would require a change in the proposed rule (Farm Credit Administration) Challenge: statement of basis and purpose responds in a lengthy way (adding supporting documentation not mentioned in Notice) to comments made by interested parties without other interested parties a change to comment on the comments rule: not a valid challenge--no right to comment in a never-ending way on the agencys responses to (Rybachek) C.

the giving agencys

comments

Exceptions from 553 procedural requirements:

1. 2. 3. 4. Good Cause Policy Statements Interpretive Rules Procedural Rules

III.

Formal Adjudication
A. Trigger for Formal Adjudication Procedures ( 554) --reference to a hearing B. APA 554, 555, 556 procedural requirements --Notice-- 554(b) --time, place, and nature of hearing --matters of fact and law asserted --Hearing-- 556(d)

--party is entitled to present his case or defense by oral or documentary evidence, --to submit rebuttal evidence, --to conduct such cross-examination as may be required for a full and true disclosure of the facts

IV.

Informal Adjudication
A. Trigger for Informal Adjudication Procedures ( 554) --absence of reference to a hearing B. Procedures Involved (see Overton Park, etc.) --APA--no procedures but adequate agency explanation required under arbitrary and capricious standard --Constitutional --IF person is being deprived of liberty or property (Roth) procedures required depend on three factors (Mathews): 1) 2) Private interest that will be affected by the official action Risk of an erroneous deprivation of such interest through the procedures used, and the probable value, if any, additional or substitute procedural safeguards Governments interest, including the function involved and the fiscal and administrative burdens that the substitute procedure requirement would

of 3) additional or entail

V.

The Choice Between Rulemaking and Adjudication

A. Chenery cases

VI.

Judicial Review (Standards of Review) A. B. Review of Findings of Fact in Formal Proceedings

1. Substantial Evidence Standard (Jury Standard)

Review of Findings of Fact in Informal Proceedings

1.

Arbitrary and Capricious Standard (Jury Standard)

C.

Review of Agency Legal Conclusions

1) Does Chevron Deference Apply? 1) Congress must have delegated authority to the agency generally to make rules carrying the force of law 2) Agencys interpretation claiming deference must have been promulgated in the exercise of that authority --if no, Skidmore deference is applicable 2) If yes, apply Chevron two-step 1) Congress must not have directly spoken to the precise question at issue 2) The agencys interpretation must be reasonable

D.

Review of Agency Discretion and Policymaking

1. Arbitrary and Capricious Standard (Hodgson, State Farm, FCC v. Fox Television Stations)