ADMINISTRATIVE LAW OUTLINE Wright Chapter 1: Introduction Admin lawThose legal principles that define the authority and

d 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 govt in their relation to administrative agencies. Collective goods problem: rather than contributing to a drug safety research fund, Wright sits back and watches others spend their $. Wright wants to wait for externality (spillover). o How do we make sure drug is ok before we sell to the public? o Lighthouse example: its impossible to put .50 in the slot to see the lighthouse. Under the technology of lighthouses cannot exclude non-paying persons. Once it is up and running, you cant exclude free riders. Classic collective good: you use it and it doesnt take away from others use. More than one person affected. How do you negotiate those rightstort law would be too confusing in this instance. Transaction costs here: so it may be most efficient for the govt to regulate what the mills can and cannot do. When to apply govt solutions To control a natural monopoly Get so dominate they can add new clients at lower rates than competitors ex. IPALCO cannot just raise rates, need govt approval Information problems: need to compensate for inadequate information consumers need to know enough to make a purchase ex. food labels, govt requires certain things be included on food labels If do not want to pay for it still okay, most people will so you will be a free rider (RX drugs) Collective goods (used by everyone, ex lighthouse): need to provide the right level Get same amount of use out of the product, not like eating a peach pie-if I eat some that is less left for you Cannot exclude someone from using a collective good if did not pay for it Externalities-spillover effects: negative (bad), positive (good) ex. Gary steel mill emissions emissions getting on laundry of nearby landowners; damage minimal, not worth it to negotiate Have two interactive activities (laundry and making mills), mill not paying these costs Families are not receiving any money from Ford when they purchase the steel, so govt imposes regulations re these spillover effects Not living in a market situation all the time: who controls the supply and demand in these situations ex. Doctors: they control the supply and demand See book for more explanation Redistribution Taking from A and giving to B ex. social security, and social security for disabled Not really saving for the future, really going to someone now Paternalism ex. seatbelt laws, helmet laws Govt will take care of you if there is an accident so they want to lessen chance of injury How the Government Regulates Formal Government Rule Informal Government Rule Result of formal rulemaking process Result of informal (notice and comment) rulemaking process (Section 553 rulemaking) Formal Government Adjudication Informal Government Adjudication

Some activities are formalsome are informal. There is also rule-making and adjudication. APA regulates in those 4 manners. 1177-78basic definitions. o Definition of rulecan be broad or narrow. Has to be of future effect. Cant be a retroactive rule. Formal ruleresult of a formal rule-making process Informal ruleresult of an informal rule-making processaka notice and comment rule-making. Aka: 553 rule-making 1. Most rule making is informal, faster 2. Notice and comment requirement a. Notice of proposed rule in federal register as well as a description of what the rule is to accomplish b. Time for public comment is allotted; do not need standing to comment c. Agency not required to respond to all comments, only major ones, may have more than one round of comments d. Reviewing courts will focus on whether the agency provided a concise statement of the rule with different standards of review Hard look review: giving teeth to the review process; making sure the agency does everything in absolute detail, not giving any deference the agency Substantive Rulesbig distinction between these and interpretive. These have force and effect of actual law. Binding on regular people. These have to go through notice and comment procedures under 553. Interpretive Rulesdo not have force and effect of law by themselves. Cant fine or put someone in jail on the basis of interpretive rule. Interpretive rule is supposed to interpret the real law. Tells you what the agency thinks the law is. Do NOT have to go through 553 process b/c they arent the law. The way the agency sets itself upcreated by statute. o Organizational rules do not have to go through APA. Not the law. o Agencies have to be authorized to exist. Must be given several powers. Powers come from Congress. Congress takes it upon itself to go through presentmentbicameralism. FCC must be created by statutecalled an organic statute. Congress gives charge to agencygo get em tiger. Promote the public interest. Very broad charter. See p. 1177APAlays out differences in matrix. Classic Regulatory Tools (p. 13) o More than one way of doing it o Cost of service ratemakingpublic utilities o Allocation in accordance w/ a public interest standardwhich will serve public better? TV/radio licenses o Standard Settinglimitations on how much you can pollute; clean air act. o Historically based price settingrefers to things like wage and price freezes imposed on the govt o Screening or Licensingbar exam o Fees or Taxesregulate how many people go to park by increasing fee

o Provision of Informationnon-coercive; standardized; food manufacturers have to list

various nutritional components

o SubsidiesGovt helping pay for law school o Non-coercive Efforts to produce cooperation through moral suasion or political
incentivesSmokey the Bear Chartp. 31 How much it costs to regulate various bad things. Listed by cost-effectiveness. Most effective: regulating unvented space heaters. Not effective: formaldehyde occupational exposure limit. Chart involves premature deathsmore than bad things in life than death (disability, injury). What counts as a premature death? p. 34 Refers to recent SC cases: o Heckler v. CheneyGive agencies freedom from judicial review when the agency does not act o Vermont YankeeLimit degree to which courts can impose procedural requirements on agencies Court cannot impose more procedures on an agency (second guessing) but other ways can: Congress [federal statutes] can always require an agency to do anything it wants procedurally Congress writes the statute from which the agencies derive their power Constitution poses requirements on agency procedures Due Process Clause Agencies can bind themselves to their own procedural rules not required by congress or constitution, but agency has said this is the way were going to do things procedurally o ChevronRequire the courts to pay particular attention or defer to agency interpretations of statutes (give substantial weight to what agency has done) Court can adopt two views: Deferential: rubber stamp what the agency has done, courts go along with whatever decision the agency has made Aggressive/less deferential: agency substitutes what it thinks for what the agency has done, second guessing agency decision

APAp. 1177 Adjudication is opposite of rule-making Outcome of adjudication is an order 552The Freedom of Information Act (FOIA) p. 11869 Exceptions to FOIA (know these) 553Rulemaking (notice and comment rulemaking); Has to publish a notice in Federal Register in advance that its going to go into rulemaking. Must give people then lead time to responddone w/ comment. Congress has to authorize the agency to engage in rulemaking agency must specify the statute that gives them the OK to make a rule. o This process does NOT apply in case of interpretive rules, general statements of policy, rules of agency organization Hard look doctrine (Judicial Review) o Refers to the attitude that the judge takes when they are looking at an informal rule 553 o Applied under standard of review-- 706. Cant be arbitrary or capricious. The more demanding it is, the more of a hard look it is.

o o

Or, by hard look, it means your concise statement of the rule must be extensive. (553) Can also apply it not just to concise statementyou can apply it earlier to the notice and comment provision.

554Adjudication Formal adjudicationbasically like a trial. We have to get the rules for informal adjudication from somewhere other than the APA. Suppose you had an informal adjudicationhow would you feel if you were an undocumented alien and you are picked up and a case is brought against you? How would you then feel if the guy who brings you in then judges you? Not enough humans here. You want different people involved. 556Hearings Generally, unless specified by statute, the burden of proof (rulemaking or adjudication) is borne by the proponent of that rule or order. Any oral or documented evidence may be receiveddont have to worry about hearsay rules. 701Judicial Review As long as theres somebody w/standing, you are going to get JR UNLESS o (a) 1) Statues preclude judicial reviewexpression by Congress. NOT very common. You are only going to find a congressional intent like this if Congress has said so w/ unmistakable clarity. Wright thinks the Constitution would be violated if you are failed to be given JR o (b) 2) Agency action is committed to agency discretion by law. Very rare case. 702Right of Review Standing under the APA is loose. All you have to be is adversely affected by agency action 706Scope of Review Generally in informal rulemaking, most of the p. 1198 applies: a court is supposed to set aside what agency has done if the agency fails any of the tests: o Arbitrary, abuse of discretion o Contrary to constitutional right, power, o In excess of statutory jurisdiction, authority, or limitations, or short of statutory righto W/out observance of procedure required by law o (E)only in FORMAL rulemaking and FORMAL adjudicationmust be supported substantial evidence in the record as a whole. More demanding standard than just not being arbitrary. The Overton Park SynthesisAnalysis of Agency Review Want to put road in or near Overton park. Run road through park or neighborhood? Parkonly disrupt squirrels. Public parkdont have to may morewe already own it. Because homes have sentimental value (ex: yearbook)people resist it. Must be reviewable: must be appropriate for courts to get to the merits of a case Look to section 701 of APA to decide if there is judicial review available. They must have standing. The presumption is for every final determination of the agency, the aggrieved party can get judicial review: o Two types where there is NO JUDICIAL REVIEW Where Congress/statute clearly precludes judicial review; must have clear and convincing evidence of an intent to do so; bad constitutionally Look for words like committed to agency discretion. When committed is omitted, there is broader discretion. Where a statute has committed decision to agency discretion; only when a statute is written so broadly there is no law to apply (ex. presidential pardon, no way to litigate) 6 Standardsp. 430 o Arbitrary, capricious, abuse of discretion, not in accordance w/ law. Lowest level of review. (Actually varies in its strength)

o Capricious: GW does not see much difference here than w/arbitrary o Abuse of discretion or otherwise not in accordance with law: applied when an agency
o violates, misunderstands or makes a decision contrary to the law Action failed to meet statutory/procedural/constitutional requirements Statutory: agency only makes regulations pursuant to statutes, may not amend them Procedural: Decision must be consistent with agency rules, must follow own procedural requirements whether made by Congress or not. Arizona Grocery o Substantial evidence in the record as a wholemore rigorous review. ALWAYS review that requires that the decision be made on the basis of an administrative recordmade solely on the basis of the compiled administrative record. This is a FORMAL proceeding. Acquired more often in adjudicating contexts than rulemaking contexts. Formal rulemaking is rareFL East Coast Railway Case. o De novoeven more rare. No deference at all. Start all over. 2 Narrow Circumstances: 1) Adjudication and the agencys fact-finding procedures were inadequatecan trigger de novo. 2) If we are talking about enforcing the rule or applying it 3) Usually, you need clear and convincing evidence. (EX: Presidential pardons) Arbitrary and capricious review is neither supposed to be too demanding on one hand or insufficiently demanding on the other hand. You dont want your decisions substituted by the agency. o Review should be searching and carefulthis is the HARD LOOK DOCTRINE. o 2 extremes: must be searching and careful, but its narrow as well. o There is a presumption that what the agency did is not unconstitutionalpresumption of validity. o 3 ways of applying hard look reviewif its more demanding, its the hard look doctrine. 706Interpreting Arbitrary and capriciouscan make it a high standard for what is arbitrary. 553Arbitrary and capricioushave to put notice in the federal record. Could apply demanding standard to this requirement. Can interpret this rigorously. 553concise and general statement might be construed as being TOO concise or general. If the agency hasnt offered sufficient grounds for its decision, court will not make them up court isnt there to be helpful. Court wont supply adequate justification. Chenery principle. Power of agencies to legislate Non-Delegation Doctrine By vesting all legislative powers in a Congress of the US, the Const seems to create a nondelegation doctrine o No provision expressly says Congress cannot delegate its power to others o However, courts have suggested such a prohibition Non-delegation at the state level: State ex rel. RR v. Chicago Facts: Shippers complained to MN RR Commission that rates for milk carried on passenger trains in MN were unreasonably high. Commission decided on an equal and reasonable rate, brought a mandamus action in state court to make the RR obey the order. Holding: 1) The powers given to the Commission are an acceptable conferring of authority to make decisions in pursuance of existing law not an improper delegation of legislative authority.

2) It is constitutional for a statute to deny courts the power to review a determination by an agency, setting certain rates as reasonable. Court thinking in terms of convenience and mood Not practical for the state legis whom only meets for 60 days to be specific re: freight charges, should be left to the expert agency Court says there is a difference btwn delegating legis authority and acting pursuant to the law; can have discretion under and pursuant to the law (W: not fooling anyone, when an agency makes a decision it is making the law) o Court is relying on authority to MAKE the law (bad) v. under and pursuant to the law (OK). Congressional powers; non-delegation doctrine

Too broad a delegation: ALA Schechter Poultry Corp. v. US RULECongress may NOT transfer to an administrative agency the power to establish the standards of legal obligations between parties under the regulation of the agency. Too much discretion was given to the president in approving or prescribing codes Here, the code-making authority was an unconstitutional delegation of legislative power Not enough guidance herewho knows what unfair competition is. This is delegation gone riot. BAD. Last time the SC invalidated federal legislation on the ground of overly broad delegation Gilberts: NIRA delegation that gave the President power to adopt codes of fair competition in cooperation w/ members of an industry. These codes were to set forth schedules of wages and prices, and other rules that would be binding upon entire industries. This delegation was held invalid. Rationale: The Supreme Court found an absence of standards to guide the President in deciding what regulations to impose upon various industries. The court was also heavily influenced by the lack of hearings or other procedures in adopting the codes, and was concerned by the rile of private industry in regulating itselfi.e. that large companies might succeed in having rules adopted that would harm their competitors. Modern approach to the non-delegation doctrine, most deferential: Amalgamated Meat Cutters v. Connally (Nixon price freeze case) RULEIn order for a delegation to be constitutionally valid, Congress must provide an intelligible principle defining its control and accountability specific enough to enable the courts to ascertain whether administrative action is w/in its scope Unlike Schecter, court finds a guiding principle other than w/in the text of the statute ALLOWED TO LOOK AT EVERYTHING IN ASCERTAING A GUIDING PRINCIPLE o Here, court looked to media surrounding the making of the statute, speeches, etc.; purpose; factual background; statutory context This is a complex administrative systemits unrealistic to think Congress can regulate this price freeze over time. Pragmatically necessary for delegation to the agency. Gilberts: Court held that the statuteunder which the President had imposed a wage price freeze sufficeintly marked out the field in which the President was to act by setting a base date and providing for adjustment of inequities. Legislative history and previous wage-price control statutes were held to indicate the congressional intent. Court also found relevant that Congress had provided a relatively short life span for executive authority (so that frequently Conrgess would have to reexamine the Presidents actions) and that judicial review was available. Industrial Union Dept, AFL-CIO v. American Peteroleum Institute (The Benzene Case)Status of the delegation doctrine today

RULEThe Sec of Labor must determine, prior to issuance, that an OSHA standard is reasonably necessary and appropriate to remedy a significant risk of material health impairment What made this a non-delegation doctrine case was the language 2 statutory sections in this: if you are thinking about regulating Benzene you have to: o STAGE 1: Section 38show its reasonably necessary for a safe, healthy environment. (significant risk) This is a threshold determinant. Might be a delegation problem, if agency has too much discretion. o STAGE 2: w/ regard to toxic pollutants: 6(b)5: mixture of strong and not strong regulation. no employee is left behind. Basically you have to get to no risk. Language: to the extent feasible So the extent feasible is much less proworker than other language. Mixture of both pro-worker and pro-company. As a result, we dont know what this statute means. It could mean to the extent its feasible for the industryinsure safety to point where its impossible or the industry is about to go out of business. Gilberts: The Court expressed severe doubts about the breadth of the delgationto OSHA, which left unclear whether the agency was to balance costs and benefits. It also expressed reservations about regulations that set standards w/out reference to the cost of satisfying them. As a result, the Court narrowly construed the statute, finding that first OSHA had to show that a significant risk existed at the concentration level shown. American Trucking v. EPA Statute violated the Nondelegation doctrine, but the court would have allowed the EPA to provide the missing intelligible principle itself Adequate margin of safetyozone standard. Has to protect the health. Is this enough guidance? Poorly written statutevague Does this provide enough guidance, or is this a nondelegation doctrine problem? o Court says it fails delegation doctrineno intelligible guiding principle. o Therefore, its insufficient for agency and public But court doesnt want to strike it downbut the court wants a more precise call from the agency w/ regard to the scope of its discretion. Scalia says you dont need a determinative criteria but you need intelligible guiding principle to guide the agency. o He also says that the scope of the delegation tells you what degree of discretion is allowed for the agency. If the area that the agency is considered w/ is narrow, then you dont need as much guidance from Congress. Ex: country elevators: Not that broad of a subject. Congress can leave this term undefined. Gilberts: This statute gives the EPA little guidance on where to set the standard; it does not indicate how much pollution is too much. Ability of the President to control administrative actors and the proper role of Congress The executive and the agenciesThe old learning Myers v. US RULE: The power to remove subordinates is inherent in the constitutional power of the President Senate cant reserve removal for themselves. Power grab by Congress Power over the executive branch lies with the president, not the president and Congress. Power should be with the president, if not the pres would lose power over his own branch

Idea: if the president wants to remove the postmaster in OR, he has to get the consent of the Senate. Congress is not just putting a limit on the president based on criteria, Congress is insisting on a role for itself. How does this comport w/ Article 2? Doesnt comport well says Taft. The President and no one else is supposed to take care that the laws are faithfully executed. Congress does the legislating and then has to let goCongress CANNOT reserve for itself the power to control an executive act. Gilberts: The Myers rule probably apples only to high ranking officials such as Cabinet officers who are directly involved in carrying out the Presidents policies at the highest level, b/c a removal restriction at this level would impede the Presidents ability to perform his constitutional rights. Removal of Executive Officers President has power to remove executive officials at will. Congress may impose restrictions on removal of officials. May not retain advice or consent power to remove officials. See Myers v. U.S. above. Humphreys Executor (U.S.) o Member of federal trade commission. Federal trade commission engages in quasilegislative and quasi-adjudicatory activities. FTC can make trade regulation rules and also adjudicate cases and impose fines on industries out there that violate trade regulation rules. Acts a little like Congress. o Example: Power to require gas stations to post octane ratings on the pump. o KEY: this would be different from Post Master (pure executive branch division). Post Master does not findings or general rules. Nor does he impose fines on public. Since he lacks this power, he is pure executive branch. o Meyers is different. Here, Congress is not reserving for itself any power. Statute doesnt say that the President can fire this person for differences. Statute says can do it but only for GOOD CAUSE. This is a limitation on the Presidents power to remove. o Why do you want to insulate? Would want to bc of quasi activities. If they do this every once in a while, dont you want those decisions to be made on the merits as oppose to on presidential politics. Dont want president to have power to call of FTC and tell them how to vote on their cases because they have for instance contributed to my campaign or something similar. o Holding: The President cannot remove officials whose agency functions are quasilegislative and quasi-judicial in nature, and not merely extensions of the Executive Branch of Government. Weiner o War Claims Commission case. This commission hears and determines war claims arising out of WWII. Suppose to be temporary. Then it will be done. o Congress fails to discuss how or when the war claims commission can be removed in the statute. War claims commission stays in existence for longer than it is suppose. o The President and one of the commissioners has a little tiff. So, now President wants him gone. Statute does say how commissioner should be removed. o Have to make up limitation on power of President to remove war claims commissioner. That is what court does. Says, even though no statute, we are going to imply a statute on the Presidents power to remove. Did this bc of the logic saw in Humphreys Executor. o Goes further than Humphreys Executor. Creates an implication from language. o Holding: The President has no power to remove agency commissioners of agencies whose function is purely adjudicatory. Congressional Involvement in Appointment and Removal of Executive Officials Appointment clause: Art. II, Sect. 2, Clause 2.

Congress MAY NOT appoint administrative officials. May appoint those who act merely in aid of legislation, such as officers who gather information or do research to help Congress decide whether and how to legislate. Officials appointed by Congress may NOT exercise authority under the laws of the U.S., such as prosecutorial or rulemaking. Congress has power over budget and legislation. This may influence or force the President to appoint those she may not wish to. POLITICS Congress MAY NOT participate in the removal of administrative officials. o Other than removal via impeachment and conviction, the Constitution contains no provision regarding the removal of officials. Court has held that Congress may not remove except by impeachment in House and conviction in Senate. o Bowsher v. Synar (U.S. 1986)Formalist, line drawing approach. Large budget deficits. So, re-election coming up. Getting a little nervous. Bottle and Ulysses metaphor. Take budget deficit and the cuts you make and take to president and then he will make cuts according to schedule so we will wind up with deficit that is lower than we want later. That arrangement is unconstitutional. Because Bowsher is carrying out the law. He is executing the law. It is unconstitutional even though Bowsher is supposedly under the control of Congress. He is removable by Congress on grounds slightly less than impeachment. Bowshers removal for less than impeachmenthave to specify for Congress for cause groundslike misconduct, malfeasance, etc. Bowsher can litigate that. Otherwisehave to have a joint resolution by Congress. Statute or law. Majority of both houses of congress and presentment to the president. So, can only get fired if all agree to fire him. He has to be extremely unpopular to be terminated. Holding: Congress cannot retain power to remove executive branch officers except by impeachment. Otherwise, this would violate the separation of powers because Congress would be interfering in the execution of the laws through the power to participate in the removal of officers of the U.S.

**NOTE: members of Congress may not serve as Administrative Officials. Incompatibility Clause of Constitution and Separation of Powers Executive Control of Administrative Agencies Article II places the President at the apex of the executive branch and therefore the administrative hierarchy. Inherent power in President has not really been clear throughout history. Unitary Executive Theoryholds that the Constitution vests all executive power in the President. Any attempt by Congress to insulate officials and agencies from complete presidential control is suspect and probably unconstitutional. This theory, includes Scalia as an advocate, is attractive for its simplicity and apparent adherence to constitutional text but does not reflect governing law. Presidential Control of Appointment of Executive Officials: The Appointment Clause Appointment Clause gives power to President to appoint officers of the United States. Congress may specify that inferior officers are appointed by the President alone, by the heads of departments or by the courts of law. Inferior v. Principal Officers: inferior may be appointed by alternative procedures. No clear substantive line between two types. o Principal: high-level officials in executive branch and heads of independent agencies. Cabinet members and commissioners are principal officers because there is no one in the government hierarchy between them and the President.

o Inferior: lower-level executive officials who are under the supervision of other executive
officials beneath the President. Morrison v. Olson (U.S. 1988) o Supreme Court upheld a statute that gave a court the power to appoint an independent counsel who would investigate crime and prosecute high-level political officials. o This case makes a hash out of all the other cases weve done. 8:1. Scalia dissent. o Independent counselputs people in jail. A prosecutor is not a quasi judicial official. They are pure executive official. Appointed by special court. Appointed through attorney general as a preacher of the presidentno IC unless the AG and Pres agree to have one appointed. Actual counsel appointed by this special court. Have one because we dont trust Pres to investigate himself or his minion. o Pres through AG can remove IC but only for good cause shownmalfeasance, inefficiency, inability to do job, etc. This can be litigated. o IC in this case must be an inferior officer or else cant have been appointed by pres. She is an inferior officerhas to conform to policies of department, tenure, etc. o But, what about removal? Previous cases seem to suggest that removal clause is going to create some problems. IC pure executive branch official. But the logic of those previous cases, the one thing we remembered was that there is a big difference between a postmaster of Portland, OR or the member of FTC or the War Claims Commission? The last two were quasi judicial. They imposed fines. o With same logicis pure executive branch official that means it is impermissible for congress to limit the pres power to remove IC. o BUTpragmatist is going to say thisthis other way is not pragmatic. It undercuts the reason for having IC. If can be removed by pres then no IC. SO, pragmatists take control. We think no point of statute if the IC is not going to be independent. o Want neutral so appearance of justice is done. o TESTlook in given case (case-by-case determination) and ask: Does the limitation of pres power to remove this official impair the pres power to carry out article II responsibilities. o This test is why Scalia dissents. Too general. This isnt law in any serious sense. Just saying, your job just got more pleasant. You can go home happy every night. Bc always decide separation of powers cases the way you feel whether you like the Pres or you like Congress. o Holding: The independent counsel was not entirely an independent agent because she could be fired for good cause which the Court did not define.

Incongruous Appointments Appointments made across departmental lines or by a court appointing an official to a position unrelated to law or legal processes (such as an undersecretary of a department) may be incongruous. These appointments may violate the separation of powers. Congressional Involvement in Appointment of Officers in U.S. Only power Congress has is its advice and consent powers. The Legislative Veto and Review of Regulations Legislative VetoUnder legislative veto, Congress reserved the power to reject agency action with a vote, depending on the particular provision, of both houses of Congress, by one house of Congress, or in some cases even by a single congressional committee. Legislative vetoes were not presented to the President for signature or veto. Congress used this for several decades to control agency action. Chadha DecisionSupreme Court held a one-house legislative veto unconstitutional. Formalistic Approach. o Deportation case. Attorney General temporarily stops deportation process. This statute has a legislative veto attached to it.

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o o

o o

Chadha is now going to be deported. So he challenges this overturning by one house. Says have to have both houses. You dont have the ability to do this by yourself. Should have to go through both houses and President. Court saysthere are some things that the houses can do by themselves such as impeaching, Supreme Court justices, and treaties. But, those dont include legislation. Therefore, cant do in this case. DISSENT: Justice Whitepragmatic approach suggests that since Congress had unconstitutionally delegated away its real legislative power, its not unconstitutional; its constitutionally sound to allow congress to recapture some of its originally assigned legislative authority through the one house legislative veto. Instead, they take a formalistic mind blowing approach. Holding: Where the action of either house of congress is legislative in nature, such action is subject to the presentment and bicameral requirements of Art. I of the Constitution.

After ChadhaAll legislative vetoes are unconstitutional. Congress created a new procedure in the new APA, chapter 8, under which agency rules can be rejected by a resolution that passes both houses of Congress and is presented to the President. Resolution must be introduced to Congress within sixty session days of Congress receiving notice of the rule and the major rules cannot become effective until after the sixty days have expired. Meets both bicameralism and presentment requirements. Post Benzene nondelegation casessince Benzene case, the Court has rejected several delegation challenges. Mistretta v. U.S. (U.S. 1989) Intelligible Principle Testcourt held that the acts declaration of purposes and goals and its specification of the factors to be considered by the commission, provided a sufficient intelligible principle. Court rejected Scalias dissenting argument that the statute was unconstitutional because the Sentencing Commission was a minilegislature since it had no function other than promulgating the guidelines. Scalia thought such a minilegislature was unconstitutional because its discretion was not incident to the performance of an executive function. Class Notes: o Scalia is more right than the majority. Criminal sentencing. Swing pendulum on sentencing back and forth. Discretionary sentencing to vary uniform sentencing. Just requires treating unlike things unlike. Be sensitive to context and circumstance. Then individualized sentencing and large discretion for judges. But, then similar crimes are given different sentences. There is a problem. So, create a US sentencing commission. Independent agency. Dont want politics involved. Not subject to presidential control. Passed by Congress. It gives guidancein a statute. Generalized, guiding principle. o Commissionjudges mostly and lay down more particularized standards. Some sort of sentence is adopted for a crime. Then you have provision for upward departures and downward departures based on various prior criteria. o Appointed by President, but upon recommendation of the Senate (Senate confirmation). Removed (federal sentencing commission) only by president. But, because independent, then must be terminated for good cause. o When and if the president wants to remove judge then must do so for good cause. President CANNOT remove them as federal judges nor can congress/president reduce their salary. o Functional approach. Mixing of powers. Dont have to have pure separation of powers could just have a checks and balances. o This looks like rulemaking. Not a case where one branch is giving power to another or keeping for self and harming others. o Is this a judicial power grab? If no sentencing commission, then who would be doing the sentencing? Individual federal judges.

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All you are doing is concentrating the sentencing authority within a few federal judges as oppose to given power among all city judges. This is concentrated power. Not taking power from one to another. All judicial power is staying with the judicial side. This is different than seizing the power of the other branch. Does not improperly add to the presidential power. Holding: Establishment of the U.S. Sentencing Commission is constitutional.

Intelligible Principle as generalized instructions: Under current law, relatively general statutory purposes or broadly stated instructions to agencies will supply an intelligible principle and thus meet the requirements of the nondelegation doctrine. Congressional Control of Administrative Agencies Informal Congressional Influence Congress has informal contacts with agency personnel to express their interests and interests of their constituents in the outcome of agency action. Congress also seeks information from agency officials and summon them to committee hearings to explain their actions. Congress influences agency action by pressuring the President to appoint officials favored by members of Congress. These officials owe their agency positions to members of Congress who retain influence over their actions at the agency. Formal Congressional Influence Congress can formally influence agency action through o Agency funding provisions in appropriations bills, o By statutorily restricting agency action, and o By overruling regulations under recent legislation that gives Congress sixty days to review major agency rules before they go into effect. Congress also have power by creating agencies with less Presidential control. Direct Supervision of Administrative Agencies Cost-benefit analysis. Office of Management and Budget created by Reagan. Influence agencies to do cost-effective regulation. Agencies budget requests are channeled through OMB giving the President another method of controlling agencies. Congress still may set budgets. Independent agencies are not located in the executive branch. Executive Order 12,291 o Answers questions you might have. Think in intelligent terms of cost-benefit analysis. o Limitationdoesnt apply to independent agencies. Reason is because it might raise constitutional problems because the order is given by the Pres and cant control the agency. Not really talking about formal rulemaking (rarekey caseFL Eastcoast Railway Case). Any other respect in which it would be contrary to statute, then dont apply. o Cost-benefit analysisregulations can sometimes cause problems. Can be well intended but can actually do more harm than good. o EXAMPLES: sometimes clean air regulations also have dirtier water. There are trade offs. Carcinogen example and food. Asbestos in breaks. o So, want to reduce costs of regulation. Make sure that the benefits exceed the costs otherwise, why regulate. Choose way to regulate with the least net cost. Be sure to consider non-quantifiable costs and benefits. Just because hard to quantify, that doesnt mean that it is zero. Must also examine the non-monetary costs. TWO APPROACHES

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Line drawingtakes what majority says and decides that Congress has improperly reserved for itself control over the execution of the laws. What is going on in BowsherCongress is not aggressively reaching out to seize power that belongs to the executive. Confession of ones own weakness. Know that may have power now but wont be able to have it later, so take itbudget example. Not a power grab. Functionalist Approachmajority approach Power of Agencies to Adjudicate

Crowell v. Benson (1932) [George says very important case = blockbuster] {Public, Private
and Constitutional rights doctrine} o Facts: Benson sued to enjoin enforcement of a workers comp claim made by Crowell (D), a deputy commissioner of US Employees Compensation Commission, contending the enabling act was unconstitutional in that it vested adjudicatory power in adm agency. Jurisdictional facts: Was person here injured while being employee as opposed to IC Injury on the navigable waters on US o Whether something counts as navigable waters varies for different purposes (environment, safety, etc) o Holding: Congress may not substitute an adm agency for constitutional courts for final determination of the existence of facts upon which enforcement of the constitutional rights of a citizen depend o Dont have to worry about questions of law b/c agencys findings will be freely determined by any reviewing ct (no harm) o Public v Private rights (two types of facts) Public rights = may be assigned to adm agency b/c historically public rights disputes could have been decided within the govt w/o any adjudication and public rights did not exist at common law b/c of sovereign immunity so they can now be assigned to adm agencies and not violate Article III. Crowell first case in which SCT approved the adjudication of private rights dispute by adm agency. (RM) Stringent requirements from Crowell = de novo review for questions of law and questions of jurisdictional fact (RM) Lenient requirements = ct allowed deferential review of agencys factual determinations b/c the ct viewed the agencys function similar to that of masters and juries who often aid Art III judges; and it might actually preserve judicial power by not overwhelming cts with controversies, while maintaining judicial control thru de novo review (RM) o Ct says there are still limits dont go wild we have examples now where cases of matters of fact can be determined by third parties hearing examiner, ALG, etc but there are still limits Ct says there are some limits that just stick in their craw (2 types of cases): o Two exceptions to agencies finding facts: Matters of jurisdiction fact Dont want to allow A thru even factual findings to be the determination b/c it is in their jurisdiction (they could interpret their own mandate wrongly gone power mad and we dont want this so we cannot allow them to be the final say to tell them how broad their scope and jurisdiction is need to reel them in ) Matters of constitutional fact

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o o

Dont want to allow govt A bureaucrats to have the final say over your const rights which are important Have to have judicial determination by fed ct for const rights according to this case those determinations mean nothing if you take them to fed ct they wont just not give very much deference they will completely redetermine the facts on their own new record (de novo) Part of this case that is kind of dead now jurisdictional Facts have be determined de novo by reviewing ct > Current state of law jurisdictional fact doctrine in the sense that crowell says jurisdictional facts have to be completely re-determined = pretty much dead why too inconvenient pointless, time consuming , wastes the cts time Not specifically overruled though - so in this specific kind of case still follow Crowell v. Benson and there has to be a new determination (confined to its facts so need similar facts for it to apply) Current law: A Pragmatic Test = Today cts use a pragmatic test to determine whether the assignment of adjudicatory functions to an agency violates the separation of powers. Constitutional fact doctrine (private right that bear upon your constitutional rights)= degree of deference is less if talking about a constitutional right being implicated . Dont want to allow govt A bureaucrats to have the final say over your const rights which are important Doctrine got started with takings (violates const) Why would SCT review obscene films - residue from const doctrine theory is they do this b/c freedom of speech is one of our most important rights so they will make sure obscenity is really there and offensive o Really suppose to reweighing facts b/c you want to err on side of free speech How heavily must an agency weigh fact-finding by its own ALJ?

Universal Camera (3 cases) [Review of Questions of Fact] o Facts: Retaliatory discharge case. Finding by ALJ makes certain findings of facts and
conclusions of law ALJ gets case first and hears and determines that case sometimes it is just the ALJ that hears witnesses they are the only ones in position to notice tone in voice or if witness fidgeted no eye contact, etc.. When full board reviews, they look at transcript. Witness credibility will vary sometimes it makes a big difference and other times it wont make much difference at all Some situations where the board has better access to agency expertise= how safe is it if I touch this irradiated rod to decide that kind of thing not W credibility > best scientific evidence we are capable of better to be able to consult real expert (agency scientists) full board can do that batter than ALJ So some situations where you would want to respect the board and others where you would want to respect the ALJ Statute itself says consider the whole record after all the report of the ALJ itself is part of the record so has to count for something and it cannot be zero may not be wroth very much but it counts for something looking for substantial Evidence the ALJ report is probably not substantial need more than a scintilla!

o Substantial Evidence test = means such relevant evidence as a reasonable mind might
accept as adequate to support a conclusion (withstand a directed verdict on the ground that a reasonable jury could only have one view of facts) Ct must look at the record as a whole (and not just evidence supporting agencies decision as they did in the past; now less deferential than in past = this is a more rigorous test)

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Special circumstances:

Witness credibility determinations: If the agencys decision relies on witness credibility, it takes a great deal of contrary evidence to convince a ct that the agencys decision lacks substantial evidence. Agencys decision is entitled to great deference b/c able to observe witness. Agency reversals of ALJ decisions: The initial decision of the ALJ is part of the record of agency proceedings that are reviewed in ct. When an agency reverses the decision of the trier of fact on appeal within the agency, the reviewing ct must take the reversal into acct in deciding whether agencys decision is supported by substantial evidence (The ALJs decision weighs against the agencys decision).

Rigor or Deference in judicial review of agency determinations of law, fact, and policy when an agency adjudicates, makes substantive rules, or non-binding rules

Allentown v. Mack (1998) o Facts: Allentown (P) was accused by local 724 of unfair labor practices. Local 724 filed
a charge with the NLRB (D), which found Allentown guilty of unfair labor practices b/c it did not have a good-faith reasonable doubt about the extent of support for local 724 among Allentowns employees when it conducted a poll of employees. NLRB very politically sensitive board but not a model of your impartial agency Holding: Basing its actions on statements from a substantial portion of its employees provides a company with reasonable good-faith grounds for doubting the degree of union support; polls taken on that basis are valid. Doesnt have to be more certain than not or more reasonable than not Just need reasonable good faith suspicion Lesson learned: If you allow agency to find whatever facts they want to you have thereby in effect allowed the agency to change the law and cts would lose a great deal of control over agencies. Reviewing cts cannot give up completely their power to review findings of fact Politics has a big role in this case and facts

Republican stand point: have testimony by some of the workers that they believe union does not have the support We know hearsay counts for something and if you have 1 or more workers that say this why cant you as owner of AM based on that and other things I have heard putting everything together I now harbor a good faith reasonable doubt o Std is not clear and convincing E Democratic standpoint: what circumstances existed when this person said I dont think the maj supports the union it was said in response to a Q posed by the people who are just about ready to decide to hire or fire you Pressure for getting job Board is going to think undue influence Board is going to say in circumstances where there is just obvious potential for coercion we will give what that employer says zero weight not b/c it is hearsay but b/c it is not worth anything = inherently coercive holding chaps job hostage until waiting for the answer that boss wants

Smyth v. Ames (1898) [Constitutional fact doctrine] o Facts: The Nebraska Legislature set a maximum rate on railroads operating within the
state which precluded the railroads from recovering their operating expenses.

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o Holding: The fixing of rates must be based on the fair value of the property being used
by a corporation for the public convenience to ensure the corporation receives just compensation for its service. As to a degree still = there is an argument to be made under Crowell that constitutional rights are at stake idea would be if you have a pubic utility monopoly and are franchised (have to supply everyone but no competition) there are going to be heavily regulated by the state and state will dictate the rate of return on their investments = if you go to far you may be confiscating utility property = almost a taking eminent domain Rate of return should be commiserate to other ventures that have similar degree of risk fairly recompense stock of capital many ways to calculate far be it from use, reviewing cts, for us to tell you to apply one method to another If rates too low similar to a taking (eminent domain) SCT is backing away from constitutional doctrine

Hope Natural Gas o Facts: George combined this case with Smyth above o Holding: A rate order which is not unjust or unreasonable in effect is not subject to judicial review even if the method used contains some infirmities Constitutional duty for court to reweigh the facts For practical purposes the const fact doctrine is dead in this area except for free speech

53 Eclectus Parrots [Review of Questions of Law] o Facts: Allen (D) appealed from a summary judgment ordering the forfeiture of 53
eclectus parrots to customs.

o Holding: The definition of wild bird extends to any foreign bird whose species is
o o normally found in a wild state if the country of origin protects the species. Dispute over which definition to use for wild bird: One definition (govt) = wild bird normally found in the wild state and other (importer)= a bird that no one has any success in domesticating not bread in captivity untamed parrots no breeding of parrots US govt wins here with their definition Want to argue from neutral standpoint that govt definition is better b/c it is generally easier and cheaper to apply in a given case than importers definition Dont get demographic shifts too often found in wild will not change rapidly will be something you can look up quickly and cheaply Definition of importer more particularized and more fact sensitive what you deem to be relevant can vary rapidly and no single authoritary place to look it up very vague unpredictable and complicated Simplicity ease of application in particular context apply a general legal term is easier under govt definition than importer Degree of deference that cts should accord to Agency should vary depending on whether we are defining a general term or if it is a situation where we are applying facts to a particular legal principle Going to defer more in cases in which legal problem is application of law to particular set of facts Unless not complicated then ct may do (like valid will) Defer less if it is a general term Conclusion = less deference to Agency if just defining legal term more deference when applying legal term in particularized context NOTE: GENERALLY Burden is on proponent of rule/order to go forward w/process and bear burden of proof. If you want a rule or order adopted, then you bear burden of proof.

o o

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 Hearst Publications [Review of Questions of Law Application to particularized Facts] o Facts: The NLRB found that newsboys selling Hearst (D) newspapers were employees o o o
o under the NLRA and therefore Hearst was ordered to engage in collective bargaining with their representative. Holding: A reviewing court must accept an agencys application of a broad statutory term if such application is supported in the record and has a reasonable basis in law. Definition of employee is for the courts (RM) [pure legal question/pure statutory interpretation Application of definition is for the agency (RM) when question is one of specific application of a broad statutory term deference to agency and cts function is limited Pg 275 suppose to look at leg hx > look at terms of statute and purposes underlying the statute = this is the ct determining what the law is So dont ask how much they should defer ct starts out by brushing agency aside and say well figure it out by looking at the above and they decide what we conclude is that Congress wanted to extend the scope somewhat (expand collective bargaining) [Pg 276 btm] The ct says boards determination is acceptable if it as warrant in the record and a reasonable basis in the law = they are admitting there is no single right answer even to a legal Q but as long as not a crazy interpretation we the ct are going to then refer to it. Ct recognizing we cannot just ignore accumulated experience of the A b/c they deal with this kind of problem every day ct does not see that wide variety Uniformity of law problem if all cts defer to what the agency wants = get more uniformity and stability if all 30 of the cts defer = uniform, homogenous labor law across country has to be something beneficial to that If get cts giving all diff answers then it would be different for each employee depending what ct they are under (judicial jurisdiction) = costly and inefficient.

Legislative rules v. Agency Interpretations [From Pollys notes] o Two differences: Interpretative Rule Procedurally: Does NOT have to go through notice and comment procedure Does not get tested/tried by public opinionits the agencys best guess at what congress meant by a particular term in a statute NOT a binding rule of law just an agencys statement of its own view of congressional law, judgment of how they predict a case will come out only there for guidance * Gets less deference o However, Swift, defers to an interpretative rule

Legislative rule aka Substantive rule Done pursuant to congressional authorization congress has allowed the agency to make binding lawthis is just as binding as an actual statute This is real law that has gone through both authorization by congress and notice and comment been tested by public commentary * Gets more deference [usually] o Upcoming cases, Cardozo Fonseca, MCI do not defer to legislative rule o Sometimes dont want to defer to a legislative rule politics can play role which party in charge of house, change statute a lot under which they work

SCOPE OF REVIEW OF AGENCYS LEGAL INTERPRETATIONS

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Rigor or deference in judicial review of agency determinations of law, fact and policy when an agency adjudicates, makes substantive rules, or non-binding interpretive rules. An Agency interprets law when it: Adjudicates a case and writes a decision Adopts an interpretive rule Adopts a legislative rule

Traditional rule (based on APA 706) was that the court could substitute its own judgment for the agencys legal interpretations, but the following cases have eroded that power Skidmore v. Swift & Co. (1944), p. 243 Legislative Rules v. Agency Interpretations Weak Deference Holding: Courts, in determining controversies not committed to the jurisdiction of any agency, may take account of reports, recommendations, and opinions of administrators.

Legislative rule: The product of an exercise of delegated legislative power to make law through rules. Valid if within the granted power issued pursuant to proper procedure and reasonable as a matter of due process. o Also called substantive rule. Does have to go through notice and comment. o Legislative rules, adopted by agency, have the force and effect of law. The agencys power to adopt it was delegated by Congress via a statute. Interpretive rule: Any rule an agency issues without exercising delegated legislative power to make law through rules. Not binding on courts but may be persuasive. o They dont have to go through the notice and comment process. Agency just promulgates it based on its expertise. o These, by themselves, dont have the force and effect of law. Just the agencys best guess about what it thinks the law of Congress is. This decision may have been made via an extremely informal agency process Means that the rule in Skidmore is an Interpretive Rule. Legislative/substantive rules, because Congress authorizes them, should get more deference from reviewing courts. If you disagree with a legislative rule, youre not only disagreeing with agency, but also with Congress power to delegate to that agency. o Often, like in this case, legislative rules get struck down by courts and when interpretive rules get upheld. BIG IDEA: If the issue is technical, DEFER. If its not technical, DONT DEFER. Court gives weak deference to agencys interpretation, taking into consideration the agencys expertise. Factors related to weak deference: o Consistency o Contemporaneousness o Thoroughness of consideration o Reenactment o Agency expertise o Public participation CHART NOTES

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(Everyone has THE CHART in your notes already Ive just included my notes so you can compare with yours. Feel free to delete this section of the outline.) General Rule: Chevron is more deferential than Skidmore. Not exactly right. Overlap of Chevron and Skidmore curves show that you can have the same amount of deference for a certain agency decision/interpretation under both cases. Skidmore deference, in some circumstances, is stronger than some cases where theres Chevron deference. Skidmore high deference: Case in which there is a great deal of agency expertise and experience thats crucial to the case. Court will defer to that. The more an agency has expertise and experience thats relevant to the case, the more we want to defer to that. Skidmore low deference: we can test the validity of the agencys reasoning p. 246. Thats almost no deference at all. Deference means that the court will not second-guess or critique you, even if it disagrees. If Im checking the validity of your reasoning, Im not being deferential. KEY: 1A Christensen at 306 1B Mead at 314 .. Scalia always is on Chevron, or else free judicial review On Chevron if agencys authoritative high-level view is somehow known. Scalia doesnt believe in Skidmore. Chevron or nothing. This includes interpretive rules. Scalia often stops with Chevron Stage 1 or on less deferential (left) side of Chevron. If Chevron doesnt apply, he thinks the courts are on their own. Although he likes to apply Chevron to lots of things (formal adjudication, notice and comment substantive rules, also interpretive rules), he sometimes applies it but cuts off the process early and doesnt defer at all to the agency (skipping Stage 2). 2 Christensen at 306 . Thomas Agency interpretations lacking the force of law (legislative or substantive rules, but not interpretive rules) get only Skidmore deference, not Chevron deference. But compare Barnhart at 1271-1272 (saying that there are times that interpretive rules not having the force of law - should get Chevron deference, based on factors). 3A Christensen 3B Christensen. Breyer and Ginsburg - At 3A (on Chevron), if Congress delegated the necessary authority to the agency to do what they did, but on 3B (Skidmore), if it did not grant the necessary authority (consider degree of agency experience/expertise). Apply same level of deference, no matter whether you apply Chevron or Skidmore. 4A - Mead 4B Mead.. Souter Giving some Skidmore deference Give Chevron deference (only) if the agency actually acted somehow pursuant to some sort of explicitly OR implicitly intended congressional grant of legal authority. (Pretty broad Scalias fuss unwarranted?) On chart, degree of deference could be anywhere in there, as long as its on the Skidmore curve. In Mead, theyre not really narrowing Chevron as much as Scalia thinks.

SO. If Chevron (Step 1) does not apply, Breyer/Ginsburg/Souter/Thomas apply Skidmore, and Scalia would give free judicial review to decide whether Chevron even applies. If something less than a NOTICE AND COMMENT rule or formal adjudication (where Chevron clearly applies), look to Barnhart factors at 1271-1272 in deciding whether to apply Chevron (i.e. agency expertise, importance, interstitiality). Agency expertise factors into whether to apply Chevron or Skidmore AND how much deference under Skidmore should be given. Its relevant to both decisions.

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Also, if Congress has reenacted the same statutory language with a knowledge of the agencys position/view/interpretation, that is usually presumed to validate the agencys position. Infer that Congress wasnt unhappy with the agencys interpretation. Chevron, Inc. v. Natural Resources Defense Council (1984), p. 250 Agency Interpretation of stationary source Modern View: Strong Deference Holding: In the absence of clear congressional intent, courts must accept the reasonable interpretation of administrative statutes given by the agency. Courts may not fashion their own interpretation of the statute that encroaches on the rulemaking power of the agency. Unless the regulation, arising out of interpretation of a statute, is arbitrary, capricious, or manifestly contrary to the statute, it must be upheld. Here, the regulations were proper. BIG IDEA: Ambiguous statutory terms should be interpreted by agencies rather than courts, so Court must give effect to a reasonable agency interpretation of a statute unless that interpretation is inconsistent with a clearly expressed congressional intent. o If Congress expressly or implicitly delegated law-interpreting power to the agency, the Court must follow any reasonable agency interpretation of an ambiguous statute. Chevron introduced the era of STRONG deference: A court MUST (not may) defer to the agencys interpretation of law. Court establishes a 2-step process for judicial review of agency interpretations of law: (1) Ask whether the statute is clear (or, if Congress has directly decided the precise question at issue) (2) Ask whether, if the statute is ambiguous, the agency interpretation is permissible or reasonable. (If so, the agency interpretation is to be upheld.) Chevron deals with an interpretive rule. Weight should be given to contemporaneous agency interpretations of statutes. o More weight given to interpretations adopted after accumulated experience (as opposed to contemporaneous) in enforcing that interpretation.

BREAKDOWN of the 2 STAGES: Starting with a separation of powers focus (legislature does the legislating), go to the FIRST STEP: TO LOOK FOR SOME SORT OF UNAMBIGUOUS, SPECIFIC INTENT OF CONGRESS ON THE PARTICULAR QUESTION AT ISSUE. o If Congress has done that, the case is OVER. (Rarely the case.) Agency would have to follow congressional intent bottom line because the agency has no authority to defy Congress. The court has no business overriding what Congress has done, either. Increases the power of the agency. If youre looking for Stage 1 specific intent, you do NOT CONFINE YOURSELF TO LOOKING AT THE FACE OF THE STATUTE. Consider and consult ANY traditional canons of statutory construction not just the text. (Even a dictionary.) STAGE 2: The DEFERENTIAL STAGE. o 2 kinds of gaps that Congress might leave for an agency (whatevers left when congress hasnt left specific instructions): Explicitly-left gaps Implicitly-left gaps o For an explicitly-left gap, Agency can fill it in any way, AS LONG AS ITS NOT ARBITRARY. o For an implicitly-left gap, if Congress has intentionally delegated to the agency the gapfilling, then the test is one of AGENCY REASONABLENESS. Court will uphold any

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reasonable filling of an implicitly-left gap. If its unreasonable, the reviewing court will strike it down. Theres a little more discretion for the agency if the gap is expressly, explicitly left. This probably isnt a real difference between these standards. Chevron Court doesnt find any specific intent on the part of Congress at Stage 1. Goes to Stage 2. Finds reasonableness, so the Court upholds what the agency has done in this case

Quick Review of Chevron Test: STAGE 1: Is there unambiguous, specific intent of Congress on the particular question at issue? If not, go to stage 2. o Determine intent by looking at all traditional tools of interpretation (text, structure of statute, circumstances, legislative history, dictionaries). STAGE 2: Court gives some deference where a gap is left open for agencies to fill. o If gap is explicitly left, Court applies more deferential review for arbitrariness. o If gap is implicitly left, Court applies less deferential review for reasonableness. Changing scope of Chevrons 2-stage test for judicial review of an agencys interpretation of key statutory terms. INS v. Cardoza Fonseca (1987), p. 264 Holding: Asylum can be granted without a more likely than not showing. The 2 statutes created completely separate tests. Immigration Acts created a right not to be deported that applies much more narrowly than the discretionary grant of asylum. Tests are different in scope. In a way, this is really just a Chevron Stage 1 case where you stop there, finding a clear congressional intent on the interpretation at issue. BUT. The intent of Congress in this case is really more of a NEGATIVE specific intent rather than a POSITIVE specific intent. 2 separate statutes in question. o One requires that its more likely than not that the person would be persecuted in order to forbid the AG from sending them back. o The other requires a well-founded fear of persecution. INS has been interpreting well-founded fear of persecution as meaning more likely than not. o How much deference should this get? Not overly much. We may not know what Congress intended in a positive sense, but we know what they did NOT mean in a negative sense. We know that they didnt mean the INS interpretation. o Court STOPS at Chevron Stage 1. That gives a definitive result that intent is evident NEGATIVELY. Christensen v. Harris County (2000) Not every interpretation is entitled to strong deference like an agencys legal interpretation contained in an interpretive rule or policy statement. Issue: What weight should the divisions opinion letter be given in the courts determination of statutory construction? Holding: The opinion letter should be given no weight. The interpretation at issue is in the form of an opinion letter from the division not a formal adjudication or from notice-and-comment rulemaking. Such interpretations are entitled to respect, but only to the extent that they have the power to persuade. o Here, the agencys interpretation is unpersuasive, and deserves no weight.

Court tries to adopt a sensible rule: Giving Chevron deference to a formal adjudication (uncontroversial) or to formal rulemaking because Congress has given the agency the authority to adopt binding rules by its own intent.

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o Court applied Skidmore and its factor analysis instead of Chevron. Decided that
Skidmore should be applied to interpretations contained in interpretive rules or policy statements. o So what would NOT get Chevron deference? Stuff thats short of that like opinion letters, which do not have the binding force of law. What else? Interpretive rules Policy statements Agency manuals Opinion letters Interpretations arising out of formal agency adjudication qualify for strong deference, as long as the adjudicating agency also had rulemaking power.

Case: United States v. Mead Corporation (2001) Not every interpretation is entitled to strong deference like ruling letters written by agencies. Holding: A tariff classification has no claim to judicial deference under Chevron because there is no indication that Congress intended such a ruling to carry the force of law; under Skidmore, however, the ruling is eligible to claim respect according to its persuasiveness. On the face of the statute, theres no congressional intent to give Customs classification rulings the force of law. No Chevron deference unless: o Congress has granted lawmaking power IN THIS CONTEXT to the agency; AND o The agency must actually have acted pursuant to that delegated lawmaking power. The delegation of authority may be explicit or implicit. Unclear on what to do with informal adjudication which is what this case is about. Court is reluctant to give a ruling letter a lot of deference. Might give it deference under certain circumstances like: o Longstanding interpretive rule o Well reasoned interpretive rule

Court applied Skidmore instead of Chevron, considering that the rulings applied to an area in which the agency had technical expertise.

Chao, 291 F3d 219. Discusses Mead. We didnt cover this or the law review note on the syllabus in class, but review your copy of the article that was on reserve for an overview of the Chevron cases. Barnhart v. Walton (2002) Informal Agency Decision Borderline Case whether to apply Chev. def. Holding: The fact that an agency previously reached its interpretation through means less formal than "notice and comment" rulemaking does not automatically deprive that interpretation of judicial deference. Whether a court should give Chevron deference to an agency interpretation that did not emerge out of notice-and-comment rulemaking depends upon the interpretive method used and the nature of the question at issue. Ct. attempted to determine when to apply Chev. or Skid. deference in regard to informal agency decisions. Wright says this is a balancing test that is used in a borderline case. Factors to consider: Interstitial nature of legal question: Question that lies between 2 main strands not of major significance matter of filling in holes Expertise of the agency: always an exam answer - Expertise is a consideration that in both Chev. and Skid. def.

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Importance of question: Should cut in favor of Chev. def. Another canon of statutory construction - if something is an important question, you can likely assume that Cong. had an intention in the matter = less Chev. def. Complexity of administration: If complex to administer, will want to defer more to the agency. Careful consideration over a long period of time: If agency has taken something seriously or if agency has adopted a certain view even casually but over a long period of time = more def. Factors are not all inclusive. Krzalic v. Republic Title (2002) Case decided after Barnhart Holding: The more technical the issue, the less guidance the statute provides to its correct resolution, the more sensible the agency's decision, and the more deliberative and empirical the procedures used in the decision = greater the deference. When a statute administered by a federal agency is unclear and the agency is authorized to interpret it, the agency's interpretation, unless unreasonable, may bind a reviewing court. Posner says that the Barnhart case attempts to merge Chev. and Skid. Wright does not agree with this dont take it seriously dont put this on exam. Per Wright - Barnhart is to help you decide in a close case whether Chev. def. applies. Edelman v. Lynchman College (2002) By amending a law without repudiating a regulation, Congress suggests its consent to the agency's practice. Ct. basically said that Chev. and Skid. do not matter the agency was exactly on point in its interpretation agency did exactly what the ct. would have done de novo. Wright says this was a made up standing in the shoes of the agency test Wright says this is abandoning method! All the previous cases dont seem to matter to this ct. MCI v. ATT (1994) J. Scalia (dictionary case) Stage 1 Chev. Case Stage 1 Chev. case Lack of def. to agency Scalia does not go past stage 1 of Chev. found unambiguous Cong. intent on the precise issue so no reason to defer to agency (Wright says this rarely happens) he never looked to leg. hx. or context of statute. Holding: An agency's interpretation of a statute is not entitled to deference when it goes beyond the meaning that the statute can bear. The agency did not modify the statute, they fundamentally changed it and this is not allowed. The plain meaning of modify did not allow the FCC to eliminate the tariff requirement. Public Citizen v. Young (1987) Stage 1 Chev. Case ROL: If a court finds the FDA's construction contrary to clear congressional intent = no deference. Case involved Delaney Clause - If something causes ca to any degree then it is completely prohibited. FDA attempted to interpret meaning of statute to be more flexible Ct. said no. Cong. intent was very clr. = case stopped at Stage 1 of Chev. (no def. to agency) Wright says: If you can get to step 2 of Chev., the ct. will likely uphold the regulation. If stopped by step 1, then the ct. will not uphold the regulation. Am. Textile v. Donovan (1981)

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Basically a Chev. stage 1 case but Chev. at Ct. of App. when decided Facts: OSHA interpreted Act as requiring the most stringent standards that were economically and technically feasible. Am. T. argued that a cost-benefit analysis must be used. Holding: Standard was reasonably necessary under OSHA - that it protected employees' health to limits of technical and economic feasibility, and that cost-benefit analysis was unnecessary. (improve worker safety up to point that business could be in financial trouble imposing greater reg. cost threatens to put out of business) ROL Substantial evidence = such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. The reviewing court must take into account contradictory evidence in the record but 2 inconsistent conclusions from the evidence does not prevent an agency's finding from being supported by substantial evidence. The reviewing court intervenes only when the substantial evidence standard appears to have been misapprehended or grossly misapplied by the court below. (rarely happens) When the agency has failed to articulate a rationale, the cts are not expected to scrutinize the record to uncover and formulate a rationale explaining an action. Ct. found clear intent of Cong. = step 1 Chev. case. Cong. specifically intended this meaning of the word feasible. Ct. used this along with plain meaning of feasible to determine that Cong. intended a feasibility analysis and not a cost benefit analysis. The clear statement limit to Chevron deference when important liberties are at stake Kent v. Dulles (1958) DO NOT GIVE CHEVRON DEFERENCE IF THERE IS A SIGNIFICANT LIBERTY INTEREST AT STAKE!!! Holding: The SC reversed the judgment, which had affirmed the denial of passports to petitioners. Held that the Secretary of State only had authority to withhold passports for reasons relating to citizenship or allegiance or to criminal or unlawful conduct. ROL: Traveling is a personal right = "liberty. If "liberty" is to be regulated, it must be pursuant to the law-making functions of Congress. Where liberties are involved, the courts will construe narrowly all delegated powers that curtail or dilute them. Case does not follow the steps of Chev. If ambiguous, cannot have stage 1 case. Given the ambiguity of the language of this case should have gone on to stage 2. Under Chev., this case would have come out the other way because of the Clear Statement Doct. Clear Statement Doctrine (CSD): Idea is that Congress must provide a clear statement for courts to allow certain results to be reached. If there are 2 ways of interpreting statute one way raises the possibility that statute is unconst. 2nd way of interpreting statute will not raise any const. issues The ct. will choose the interpretation that is less controversial. Down side = if you are always going to assume that Cong. did not intend to raise a const. issue by adopting statute this may sometimes violate cong. real intent. Cong. may have wanted a judicial determination. If CSD applied, may deny cong. their day in ct. CSD limits Chev. def. when important liberties are at stake. Basically, ct. wanted to give P a passport (it would be unconst. not to do so) so ct. interpreted the statute in a manner that was const.

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Review of Questions of Policy Roadmap Policy decision = agency determines whether regulations is necessary and what level of regulation is appropriate. Ex. EPA decides what level of pollutant to allow into atmosphere. Informal rulemaking policy decision reviewed under Arb. and Cap. test. Formal rulemaking and adjudication policy decision reviewed under substantial evidence test. Arbitrary and Capricious Test Agencies make decisions : based on consideration of relevant factors including alternatives without a clear error of judgment under the correct legal standard Agency must thoroughly explain decisions Reviewing cts. must determine: was the inquiry searching and careful the standard of review is a narrow one and the ct. cannot substitute its judgment for that of the agency Standard of Review of Informal Rulemaking APA 553 Arb. and Cap. Test Substantial evidence review only applies to inform. rulemaking when provided by the enabling statute. Only real diff. between A & C test and SE test = SE allows for greater judicial scrutiny of scientific or factual bases of agency rulemaking. Standard of Review of Informal Agency Action (Informal adjudication) A & C Test Standard of Review for Deregulation Deregulation = revocation of regulation SOR = same test that applies to the initial promulgation of the regulation. (usually the A & C test) HARD LOOK DOCTRINE (HLD) HLD can be applied anywhere, but mainly applied in rulemaking. HLD involves 553 (rulemaking) and 706 (arbitrary and capricious) of APA. 553 only applies to informal rulemaking. 706 is a broader way of applying HLD. 706 A & C Test is applicable to everything the agency does. (rulemaking, final decisions, everything!) All final decisions must pass 706, be within statutory authority, and be constitutional. Difference between 553 and 706: sometimes agency decisions must pass higher test than 706 like the substantial evidence test this is a more demanding standard than arb. and cap. HLD applied to ensure that the agency really took the notice and comment process seriously. Agency must read the comments adequately consider the comments respond to the most important or cogent comments Nothing to stop a ct. from saying you have not adequately considered the comments or have not adequately responded to comments (ex. scanty 10 pages of response) Affirmative Duty: To survive the HLD, the agency must lay out in adequate detail the reasons for its actions and discuss the alternatives. Must explain logic and show work. Conflict = Chev. is very deferential and HLD is not very deferential. Chev. and HLD could both apply. How do you decide between Chev. def. and HLD? Why would you apply over the other? No clear answer. A matter of politics if a reviewing ct. likes what it sees, it will use Chev. If the ct. does not like what it sees, will use HLD.

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Aggressiveness of review is also dictated by a judges personality. Some cts. distrust agencies more than others. Some agencies have better reputations than others and will receive more deference. Consider whether the agency assisted in the drafting of the statute. An early judicial hard-look case of agency licensing

Scenic Hudson v. FPC I and II (1965 and 1971) Epitome of HLD Facts: P asserted that agency did not adequately consider alternate plans in developing a power plant. Holding: The agencys discretion in granting licenses is limited by statutory authority. The agency must consider alternative projects even after the close of hearings in order to protect the environment. 2 months after decision there is a request to reopen the record, o there is a statute that requires agency to open record for good cause showing Agency rejected alternate plan in less than 10 pages. Ct. said this was insufficient consideration = failed the consideration of alternatives under the A & C Test. This is HARD LOOK, b/c agency looked/discussed important problem, but not enough pages. Need substantial evidence! After 5 yrs and 19,000 pages, Ct. said this was sufficient. However, after 5 yrs, the plan was no longer viable. HLD is double-edged sword here it was applied for good against evil. How do you defend this? You want the 2nd Cir. to defer to the agency on a certain number of occasions because want uniformity. There are other times when diversity is wanted. (This was not a gen. rule that affected the entire country just NYC different environmental values in diff. areas of the country NYC v. Grand Canyon.) Judicial hard-look on the 706 substantive merits versus very demanding procedural standards under 553 Ethyl Corp. Case 2 heavy weight judges get into a fist fight over how court should review highly technical decision. Procedural HLD: Judge B says to focus on making the agency hop through the correct procedural hoops. Can apply HLD rigorously if you wish but apply it in a way that demands the agency goes through the correct procedural hoops. Reviewing ct. can check up on what the agency did just by forcing agency to do the work. Like a checklist of procedural steps. Prevents agency from being too casual. Specialized Courts for Substantive Hard Look Review: Judge L suggests that courts must acquire the technical expertise to decide these cases. Cong. wants ct. to do something substantively not just force the agency to do something procedurally. Wright says this is impossible! (Math Court - HH could be the judge) This time as a moderate hard-look informal adjudication Overton Park v. Volpe (1971) (2nd time around) Cts. disagree how much rigor to apply in regard to the HLD. Ct. going back and forth between HLD (553) and Arbitrary and Capricious (706). End up at arbitrary and capricious review even though the court swings from one extreme to the other Hard look review does not overturn an agency decision, just remands it for the agency to fix it HLD = thorough and probing in-depth review. The standard in this case was narrow but not totally HLD. Cost of overly aggressive review:

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If the cts. continually use an aggressive review and remand decisions back to agencies, the agencies will then take a wait and see attitude. Agencies may then stop engaging in rulemaking because it is too time-consuming and expensive. Ex. Agency attempting to create formal rule for seatbelt manufacturing. Ct. keeps sending rule back for revision. Agency gets sick of this and then just waits for accidents to happen. After this, agency can recall certain cars with problematic seatbelts. Problem = people have to die to recall!

4 McCases Considering relevant factors under hard-look doctrine

Pension Benefits v. LTV - Pension Benefit Case: Very deferential

Agency in this case failed to explicitly discuss some relevant part of policy. You would think under the HLD, this case would be dead but the ct. did not apply it. This ct. says if we remanded rules every time an agency failed to explicitly consider a relevant part of policy, the process would be too slow. Agency only has limited time and budget. National Coalition v. Thomas - Mango Case: Agency promulgated rule that gave these mango-growing countries a little slack in regard to some chemical in mangos. Orig. reason agency gave for this was to help economy of poor foreign country. Ct. said orig. rationale outside scope of consideration and remanded rule. Agency kept the same standard and changed the rationale. (so it will stand up to scrutiny of ct.) New rationale = helping the American public interest. Although this may seem silly, the next time the agency promulgates a rule, they may be more careful. What is a clear error of judgment under hard-look doctrine?

Community Nutrition v. Bergland - School Lunch Case:

Rule regarding the infusion of nutrients into school cafeteria junk food. Need to look at someone elses notes mine were terrible on this case!

Microcomputer v. Riley:
Agency is trying to decide whether to apply new rule retroactively decision based on new policy and research. Applying a rule retroactively does not require agency expertise anyone can do this. Arizona Grocery Principle: Agency allowed to change mind about rule but must give satisfactory justification. Exception to Chev. def.: goes to consideration that is not agency specific anyone can understand the topic as well as the agency dont need any expertise in the area so you dont have to give Chev. def.! Example: There is no agency that receives deference for a passage of the APA because it is just a gen. statute. Choosing Between HLD and non-HLD Review of Agency Rules or Decisions Syracuse Peace v. FCC (1989) This case does not apply HLD deferential case. ROL: Complete factual support is not necessary for agency policy judgments to be valid. Facts: FCC refused to enforce the Fairness Doctrine against a media station based on a finding that application of the doct. was not const. compelled. Fairness Doct.

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Broadcasters must indicate that they have addressed major issues of community concern in their programming. Must allow other voices [dissenting from your own] access to media outlet to rebut what you say. FD now not viable because of all the different radio and tv stations now it has a chilling effect on speech. Ct. will often defer to an agencys prediction because they are an expert. Am. Dental v. Martin (1993) Ct. did not apply HLD A & C review does not have to be Hard Look. OSHA case involving universal precautions. Posner economist discussed the cost effects of all the precautions says the agency did not take this into consideration but otherwise did a good job (still was deferential). Basically, the ct. said this is complicated so defer to the expert agency. Standard was one of reasonableness: Cts. obligation is to patrol the boundaries of reasonableness. Ct. knew it was not an expert and the agency did not casually drift through problem. In applying HLD look at the size of the record and the expertise of the agency. Agency receives much discretion in deciding who the rules apply to. If the agency had to make different rules for each special situation, the rules would never be finished and this would cost lives. Clarity, Fair notice, and the value of the agency rules in limiting agency discretion and possible corruption versus sensitive, individualized, equitable treatment Boyce v. US Facts: The district court dismissed charges in an indictment against Boyce holding the regulation allegedly violated was impermissibly vague and could not carry criminal sanctions. RULE: An agencys regulation may be read in conjunction w/ its authorizing statute to avoid invalidation on the basis of vagueness. B/c the statute requires specific intent to commit the violation, and b/c practicability is not an impermissively vague term, those subject to the regulation are put on adequate notice of its proscriptions. We are not talking about a statutory crime. Its a regulatory crime. Congress passes a statute but the statute itself authorizes the agency to specify what the crime is going to be. Regulatory crimes should be more specific than statutory crimes. Holmes made a test for vagueness in Connellya statute is unconstitutionally vague if persons of ordinary intelligence must necessarily guess at its meaning and differ as to its application. Court said this is going to suffice. We arent going to enact something into the criminal law and box ourselves in so we cant prosecute it by demanding more clarity than is REASONABLE to ask. Regulation that criminalizes this activity recognizes that you may not have much choice so the regulatory crime discusses taking steps to avoid congestion as long as its practical. You may have had no choice in the matter. Theres a strong mens rea requirement here too. Unlike tort where it may be strict liability, here you have to show willful indifference or recklessness. o Thus, this is not a statute you are going to see violated a whole lot. A corporate D is already sufficiently deterred from using an unusually necessary route b/c if they do, they are increasing the likelihood of strict liability. Forsythe County, Georgia v. The Movement Facts: When the Movement proposed to demonstrate in opposition to the federal holiday honoring the b-day of MLK, prompting the county to impose a $100 fee. The Movement sought

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injunctive relief and alleged that the ordinance requiring paying a fee for a parade permit was unconstitutional b/c it granted too much discretion to the govt official setting the fee. RULE: A law subjecting the exercise of First Amendment freedoms to the prior restraint of a license must contain narrow, objective, and definite standards to guide the licensing authority. Ordinance gave too much discretion w/out proper guidance Inherently biased and unpredictable; agency discretion needs to be controlled especially where 1st amend rights are at stake Possibility of a $1000 fee could have a substantially different impact on who you are and what you want to say. Uncontrolled discretion leading to conscious or unconscious BIAS. If you are trying to decide how much law enforcement needs to be at a rally, it depends on how controversial that a group is. Could give a group the maximum just b/c you dont like themBAD. We need something to control the unfettered discretion of the county decision maker. o Court says we want ADEQUATE STANDARDS. Some discretion will be left to decision maker, but you dont want excessive discretional authority. You want NARROW OBJECTIVE AND DEFINITE STANDARDSmust be articulated somewhere in ordinance or in policy

Soglin v. Kauffman The purpose of NOT being vague is allow people a fair opportunity to guide their conduct. Misconduct IS VAGUE Not enough guidance; leaves lots of discretion in the hands of the Administrator Hornsby v. Allen (too much discretion) Hornsby wants to provide citizens of the land opportunity for a liquor permit. Through admin law we control the location and quality of these liquor stores and licenses. Hornsby says it violates her due process. You cant yell due process violationyou have to show govt deprived you of a protected liberty or property interest created by a source such as state law. Whats the liberty interest that this person was deprived? Has she been deprived? If so, its a 1983 claim. Unguided discretion v. flat standards The only people who get liquor license are people who have support of the alderman in that district. Must have objective standards. Why are you granting or not granting liquor licenses? No way to control bias, favoritism, partiality, arbitrariness, or corruption. Here there is unbridled discretionBAD. Need some standards. Standards dont always have to go right to the merits. You could use a lottery system if you wanted. Cannot make decisions based on political grounds, must be made on the actual merits of the case; court found this to be too much discretion Holmes v. NYC This decision indicates that agencies exercising adjudicatory powers must first limit the scope of a broad delegated power by adopting their own standards, either by rulemaking or case-by-case adjudication DP requires some restraints on excessive agency discretion; standard publicized objective standards to limit arbitrary discretion by the decision maker o Here, maybe a lottery subsidized housing Possibility of corruption w/out some restraints Need to articulate some kind of system of stds - anything but have to have something o No way to control bias, impartiality, corruption, etc.. - Nothing to stop someone from saying here is a bribe - if no stds cannot check up on that thing

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Fook Hong Mak v. INS (general rules are just fine) Sometimes inflexible, general rules are just fine, have to have uniformity and credibility, work as a deterrent of the behavior you do not want Deciding on a case by case basis here would require the agency to take up too much time INS has system that will allow you a transit authorization if you are just passing through the US 8 days. o FHM extends this to 6 months. Not just not allowing it in FHMs caseits a fixed rule. NO one can do this. You are better off w/ a simple rule. Courts arent good w/ determining rare exceptions. Will create more uncertainty in the law. If we have a fixed rule that says they cant stay, that is going to be a good rule 90% of the time. Agency has realistically admitted that they wont do better than that and if they have another rule, theyll drop down. If you have a flat rule, that sets up certain incentives for persons (run risk or not) If you hold open a door to a rare exception, you 1) create a slippery slope and 2) open the floodgates Asimakopoulos v. INS (rejecting respect for general rules) Facts here are different, dealing with a married couple who stayed too long, past their visa and they have children here If claimant can show the three factors listed in the statute agency must exercise discretion General rules are good, but they must be tailored with equity when unsuspected cases come up combining the two principles together RANDOM review GW put on board THE GREAT WHEEL OF ADMIN LAW 1) Historically, control mostly by agencyadjudication 2) But rulemaking then seems generally more efficient and fairer 3) Which leads to more agency rulemaking in general 4) But FORMAL rulemaking too cumbersome/time consuming (FL East Coast RR case) 5) So less formal rulemaking and more informal rulemaking (same case) 6) But so little admin regard is traditionally required in informal rulemaking that fair judicial something is difficult. (Pacific States Box) 7) So courts then tend to make informal rulemaking somewhat more like formal rulemaking a. Beefed up 553 review (all parts) OK. (HARD LOOK) b. Beefed up s 706 review OK (HARD LOOK) c. Additional merely court-imposed procedural requirements (however) struck down in Vermont Yankee 8) But beefed up informal rulemaking (hard look) often too cumbersome for some agencies (see State Farm), so agencies react w/ a new emphasis on other means a. Ex: product recalls, mere interpretive rules. 9) But emphasis on e.g. car recall orders dangerous and inefficient 10) So back to more rulemaking and back to step two for another circle? Requiring satisfactory and consistent agency explanations and the agencys initial choice between rulemaking and adjudication Chenery (3 cases)Requiring Consistent Litigation Two key points of all three cases o The reviewing court, even SC, will not supply a justification for an agency decision when the agency did not provide one itself Congress has given the agency policy discretion

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It does not want a reviewing court taking over case and plugging in its own policy Rules can be unfair if they severely disappoint reasonable expectations of past govt promises As a general rule rulemaking is preferred because it is prospective in application whereas adjudication tends to be retroactive in application Some but not all agencies can engage in both rulemaking and adjudication Should not use rulemaking when do not know what a broad rule would implicate, can decide narrowly through adjudication o Adjudication allows agency to build up law affects one person o When know the consequences then the agency may issue a rule affecting everyone o

More on Chenery (I) Supreme Court is in position of saying what equity is. They overrule the agency on that ground. o But SC says they could maybe come up w/ another reason for the same result. BUT NOthey will NOT supply a satisfactory reason. Agencys decision has to stand or fall based solely on the grounds that the agency offers. SC cannot help. Congress wanted the AGENCY and not the COURTS to come up w/ the policy determination o This is defining the will of Congress. o If the agency got it basically right its OK More on Chenery (II) Under remand SEC says theyll find another means for their outcomerely on agency experience and expertise Has the SEC laid down a general rule that says none of this behavior is acceptable? o NOChenerys say its retroactive. They say they need prospective rulemaking. SC says: o In the abstract, rulemaking is better than adjudication. But that is just a general preference. Grounds: rulemaking encompasses a wider range of parties and they are all treated equally. o This doesnt mean you ALWAYS have to rulemake. There are times when adjudication is better that rulemakingif the agency doesnt have much experience w/ this issue. An agency must follow its own rules unless and until a departure therefrom is sufficiently explained Brennan v. Giles and Clotting Facts: OSHA held Gilles not answerable for safety violations causing injuries to employees of a subcontractor based on an unexplained departure from the past rule of decision in similar cases RULE: Agencies must explain departures from agency rules which are dispositive of a case. Although the question of what constitutes a violation of an agency rule is w/in the discretion of the agency, determinations on like facts must be consistent, or such inconsistencies must be explained to avoid a reviewing court labeling it arbitrary. Agencies are bound to their own rules until they explain why they are departing Here have adjudications where one rule was used and w/out explanation the rule was changed Most likely the agency did not review its record thoroughly re: its prior precedent AN AGENCY MUST FOLLOW ITS OWN RULES UNLESS AND UNTIL A DEPARTURE THEREFROM IS SUFFICIENTLY EXPLAINED GOOD TO KNOW: Agencies must follow their own rules. Rules promulgated formally may be changed in subsequent rulemaking.

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Rules formally adopted cant be informally abrogated. Retroactive changes are disfavored. Agencies must apply their rules as written. (Allentown Mack) Agencies may not be required to follow informally promulgated internal rules. (Schweiker) Brennan, Ashbacker, Bechtel, Central Florida/Cowles, Arizona Grocery, Caceres, Schweiker v. Hanson, OPM v. Richmond Ashbacker Radio Corp. v. FCC (1945) Statutory hearing rights. Where 2 bona fide applications are mutually exclusive, the grant of one without a hearing to both deprives the loser of the opportunity to prevail that Congress chose to give him. Bechtel v. FCC (1993) - FCC had adopted an integration preference whereby applicants seeking to operate a new radio station who proposed to integrate the management and ownership of the new station were preferred and rewarded. Continued application of the integration preference is arbitrary and capricious and therefore unlawful. Part of the problem was that the FCC had no evidence supporting its reason for the policy and because there were no objective criteria to measure its benefit. Cowles Florida Broadcasting, Inc. (1976) TV station operation faced a competing application at renewal time from Central Florida Enterprises, Inc. Initially, FCC granted Cowles renewal application even though Central FL had a better case on the merits. DC Circuit reversed, saying that FCC had created a presumption in favor of renewal. FCC then affirmed renewal. Arent you supposed to follow your own rules until you adequately explain why youre departing from them? Court thinks that the FCC doesnt ever want to deny an application for renewal. Wants to support the renewal expectancy. Arizona Grocery v. Atchison, Topeka & Santa Fe Rwy (1932) RR shipping rates set by ICC prospectively. Orders reparations to RRs after getting better info. Is that ok? NO. Just because we now have better information doesnt make any difference. The agency is bound by its rules until it appropriately changes them. Cant change them retroactively. An agency must follow its own rules (until they are properly changed via adequate explanation of why its departing from its own rule). Caceres, Schweiker, and OPM v. Richmond are possible exceptions to AZ Grocery Rule United States v. Caceres (1979) Restricts AZ Grocery principle. Surveillance was obtained in violation of IRSs own rule. The requirement that agencies follow their own regulations should be enforced only in cases falling under the APA. Not an APA case (because it was an internal IRS rule), so the agency is not bound by its own rules. Exception - Criminal evidence suppression. THE LIMITED POSSIBILITIES OF ESTOPPEL AGAINST AGENCIES Courts usually hold that the doctrine of equitable estoppel doesnt apply to the government. (Law governing estoppel of the government has gone from hardly any estoppel, to some estoppel, back to hardly any estoppel.) Schweiker v. Hansen (1981) Back toward little or no estoppel of the government. Misinformation provided by a government official combined with a showing of misconduct (even if its not violation of a legally binding rule) is NOT sufficient to require estoppel. Agent didnt follow the Claims Manual, but the Claims Manual is not a regulation It has no legal force, and it doesnt bind the SSA. Office of Personnel Management v. Richmond (1990) Disability pay. Court doesnt decide whether an estoppel claim could ever succeed against the government. Instead, just decides the case on narrower grounds that this would be unconstitutional under the Appropriations clause of the Constitution. Ways in which an agency might adopt and then change its policies:

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Adopt a policy thru adjudication and then adopt and enforce a change in that policy in a second adjudication. o General rule: An agency may change its policies thru adjudication if those policies were originally made via adjudication. Adopt a policy thru rulemaking and then adopt and enforce a change in policy thru adjudication. o Arizona Grocery holds that such changes are per se invalid. Adopt a policy thru rulemaking and then change that policy thru a second rulemaking proceeding. COLLATERAL ESTOPPEL OF AGENCIES AND THE LIMITS THEREOF

United States v. Mendoza (1984) - In cases not involving the government, an identity of party litigants is NOT necessary for application of collateral estoppel. A distinction was made in this case due to the unusual position the government plays in litigation (its involved in a LOT variety and quantity of it). Nonmutual collateral estoppel doesnt apply against the government. RETROACTIVITY IS DISFAVORED Bowen v. Georgetown University Hospital (1988) - DC Circuit invalidated HHS rule on procedural grounds, and the next year, HHS held new, procedurally proper rulemaking proceedings and reissued the original rule with retroactive effect. An agency may not exercise its rulemaking authority to promulgate cost limits that are retroactive. Congressional enactments and administrative rules will NOT be construed to have retroactive effect unless their language requires that result. WHEN IS AN INDIVIDUALIZED AGENCY HEARING CONSTITUTIONALLY REQUIRED? NUMBER OF PERSONS AFFECTED AND DISTINCTIVENESS OF THE EFFECTS Londoner v. Denver (1908) - Assessment on Ps property for costs of paving a public street. The councils action in authorizing the improvements without notice and opportunity for hearing did not violate due process because it didnt involve any assessment on the taxpayers. The councils approval of the assessment without opportunity for an oral hearing, however, was unconstitutional. Bi-Metallic Investment Co. v. State Board of Equalization (1915) - Tax Commission ordered a 40% increase in the valuation of all taxable property in the city of Denver. Agency orders and rules that will affect vast numbers of people may be adopted without affording every interested party a direct opportunity to be heard. It would be impractical in cases like this. This case involves legislative facts, whereas Londoner involved an issue requiring evaluation of adjudicative facts.

Factual differences between Londoner and Bi-Metallic are the key to granting a hearing in one case but not the other. o Londoner Just a few people in Denver. Narrow, specific problem. Each of the people may be affected differently. o Bi-Metallic All the people in Denver, who will all be affected the same way.

Legislative facts are those that primarily involve determinations of broad policies or principles of general application. Dont usually concern the immediate parties, but help the tribunal decide questions of law and policy and discretion. Ex. How, in general, should you decide child custody cases? Adjudicative facts are the facts about the parties and their activities, i.e. who, what, when, where, how, why. The kind of facts that go to the jury in a jury case. Ex. Childs best interest is in living with Parent A v. Parent B. Southern Railway v. Virginia (J. McReynolds Majority) Facts: Southern Ry. (P) contended that a VA, D, statute, which allowed the State Highway Commissioner to eliminate grade crossings on private land without prior notice, deprived it of constitutional rights not to

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be deprived of property without due process. Statute had no way to appeal the decision once made. Place called Antlers, VA and lots of carnage there. So, VA decided without any advance notice to the railroad and no hearing and no evidence, that there needs to be a crossing there and it has to be according to accompanying plans and submission. Ex parte decision. Holding: A state statute which allows an administrative officer to make final factual determinations without notice, hearing or evidence, violates the 14th Amendment right to due process. Notes: Railroad has burden of showing that the agency did something arbitrary. In this case, there is no record and therefore, no way to prove this. As a result, there is a DPC violation. The tearing down and new erection of the crossing requires money. Without hearing, or due process, depriving citizens of property. State cant do that. ***This case goes beyond Londoner in one respect: it supports a claim that the argument for a hearing is strengthened by the fact that an administrator, as opposed to the state legislature itself, is making the decision. Thus, even if ok for the state legislature to decide, not ok for the administrator to decide. Stones Dissent: Commissioners power is valid because it allows him to abate public nuisances and provides adequate review. Using Rulemaking Power to Facilitate Enforcement of the Agency Mandate through Later Adjudication Pg. 652-659The Procedural Requirements of the APA and the Interplay between Rulemaking and Adjudication. Definition of Agency: section 551(1) APA. 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 o Congress o Courts of the US o Governments of the territories or possessions of the US o Government of the DC or except as to the requirements of section 552 of this title o Agencies composed of representatives of the parties or of representatives of organizations of the parties to the disputes determined by them o Courts martial and military commissions o Military authority exercised in the field in the time of war or in occupied territory OR o Functions conferred by section There is a fundamental distinction between rulemaking and adjudication: o Rulemaking: agency process for formulating, amending, or repealing a rule. 551(5). o Adjudication: Whole or part of a final dispositionof an agency in a matter other than rulemaking but including licensing. 551(6), (7). This definition sweeps into the category almost every variety of administrative decision other than issuance of rules. Includes: litigation between adverse parties, licensing, and penalties. Also includes many management and administrative functions (different from DPC). APA grants a right to a trial-type hearing in adjudication ONLY where a relevant statute provides for decision on the record after opportunity for agency hearing. Organic Statute Requirement of Decisions on Record After Opportunity for Hearing? Policymaking Rulemaking YES Formal On-the-Record Rulemaking 553(c), 556-557 NO Informal Notice and Comment Rulemaking 553

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Rules be made on the record after opportunity for an agency hearing. Must be explicitly stated in statute. Procedures: formal, on the record rulemaking with evidence by an ALJ through trial type hearing (cross, etc.). Also opp. to appeal.

Adjudication

Formal On-the-Record Adjudication 554, 556-557 Look for explicit language. Decision on the record, after the opportunity for agency hearing. If no explicit language, look for a sanction or liability imposed on a party. Look for constitutional due process cases. Similar to civil trial procedures

General notice of proposed rulemaking in Federal Register, specifying time and place of proceedings, legal authority relied on, and content or subject matter of rules. Opportunity for comment (written or oral argument) Issuance of a concise general statement of their basis and purpose Provision, with substantive rules, that they shall not be effective in less than 30 days after promulgation. Informal Adjudication No APA procedure If a court is faced with having to review an informal adjudication, then look to record of agency. If there is none, then do discovery or remand to agency to do so and then proceed.

RULEMAKING Advantages to Making Policy by Rule Clarity Better decisions: legislative notice and comment process allows for greater public input and better crafter decision. Comprehensive decisionmaking: have one uniform rule and dont have to adjudicate case by case. Fairness: better advance knowledge and no singling out. Expedited hearings: only issue in adjudication is whether the party violated the rule. Arguments against Agency Power to Make Policy by Rule Goes against Congressional intent: congress intended to hold hearing on all if it didnt state otherwise. There should be a right to a hearing on all issues. Congressional power to change and not agency: if Congress didnt explicitly say this rule is ok, then should be resolved by the courts. National Petroleum Refiners v. FTC (J. Wright Majority) Facts: It was thought that the FTC did not to possess the power to make substantive rules. Here, new deal, so FTC says we think we have the power to make substantive rules to aid in adjudication. We think we can make rule regarding unfair trade practices. New rule: if you run a gasoline station and if you fail to post octane ratings, it counts as an unfair trade practice and unfair trade competition. Holding: The FTC is empowered under the Federal Trade Act to promulgate rules defining statutory standards of illegality.

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Notes: Rulemaking is fairer to the regulated parties because o Industry contextif dont have rule, then have to do adjudication and enforcement on case-bycase basis, which is difficult. o Rule is binding. Good for consistency, but difficult because more cumbersome. o People will violate until it is applied to them. So, say all are bound by this determination. It is an unfair trade practice. Then only have to prove simple stuff like-Did he have octane rating shownjust need a picture. With rulemaking, every person has the ability to make their presence felt and offer their commentary. Some sort of record. Congress hears from a variety of witnesses when passing a statute. Better because hearing a lot of different peoples views. Rulemaking takes in more data and more comprehensive, but more cumbersome. Formal Rulemaking NOW Rare There is a strong presumption against formal rulemaking. Even if statute says hearing that is NOT enough to require formal rulemaking. U.S. v. Florida East Coast Railway Co. (J. Rehnquist Majority) Facts: FL East Coast Railway (P) contended that the Interstate Commerce Commission (D) could not set a per diem charge on freight cars without a full evidentiary hearing, which did not occur in this case. Losing a lot of freight cars, or at least they were coming in late. So, thought would create charge as an incentive to get them in faster. Holding: The APA does NOT require a formal evidentiary hearing in a rulemaking determination by the ICC. Notes:

RESULT: For there to be formal rulemaking by Congress, it has to be very explicit about it. Presumption against formal rulemaking and for informal rulemaking. WHY? Formal rulemaking is too cumbersome in this type of setting. QUESTION: Want intelligent judicial review, but how can you have this if there is no record required for the informal rulemaking? So, what we are going to try to do is to try to put some teeth into informal rulemaking. Try to make informal rulemaking a little more serious. Add some elements of formalization. o Normally Notice Comment Concise general statement Ex: could fudge the borderline between substantive rules and interpretative rules (agency policy). If fudge the difference, and start relying more on interpretative rules, that would avoid problem of 553 bc dont need notice and comment. o Statute creates you. o Statute says to make some rules. o Put out rule with notice and comment. o Make vague and generalized. o Brilliancevague substantive rule. Agency uses this one rule as the only substantive rule. They use this one to springboard off the other rules. Now just interpret the rule. Dont have to do all that other shit. o If the court buys the idea that all of these things are really interpretative rules, you the agency are home free. You get to be concrete and specific as want, but nothing has to go through notice and comment. Interpretative rule is not binding in and of itself. o Advantages: low cost and provide pretty reliable information. o Disadvantages: not binding. Weasly invasion of the whole notice and comment process. HYPO: what counts as substantive rule and what is an interpretative rule?

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o o

o
o

Know that substantive rule goes through notice and comment. Fence for lions, tigers, and bearshas to be structurally soundis that all you need? Is everything else an interpretative rule? What if now interpretative rule? Structurally sound means it has to be 8 ft high. Is that an interpretative rule? POSNER saysnot merely an interpretative rule. Structurally sound doesnt tell you that much. Hockner case. WRIGHT: lets attack this problem in a pragmatic kind of way. Is 8 ft rule interpretative or substantive? Ask about process. If just enforcing, then substantive rule. Is there a real point in sending through notice and comment? Would it improve the accuracy of the rule? Etc. Go to the experts. Determine how high do tigers jump. Worry about the lions and harm.

Douglas Dissent: Railway was prejudiced by being limited to written objections to what is essentially a ratemaking order. As such, the informal procedure violated the APA and the order is invalid. Pg 677Notice and Comment Rulemaking Procedures Biggest issue is that it does not create an evidentiary record. Cant Wait Until Enforcement Action to Challenge Basic Logic of a Rule FPC v. Texaco (J. Douglas Majority) Facts: The FPC (D) rejected, without a hearing, Texacos (P) application for a certificate allowing gas sales to pipeline companies. Section 7 of the Natural Gas Act provided that FPC shall set hearings on applications for certificates to public necessity which were required before a company could sell natural gas to pipeline companies. Under its rulemaking power, the FPC enacted regulations to preclude escalation of prices. Rules allowed FPC to dismiss an application, without a hearing, if it contained elements of such escalation provisions. Texacos application contained such provisions. Holding: The FPC can validly deny a hearing on applications if the application does not conform to commission standards promulgated under the rulemaking power. Notes: FPC says not taking contracts with this escalator clause. FPC has a rule that says you cant have these. Rejects contract of those who submit with the prohibited clause. o Dont get a hearing bc should have been in on notice and had a chance to comment when it happenedInformal rulemaking. o Once last thing you could try would be to say, I think I have special circumstances in my case and therefore there should be a waiver. I deserve a hearing. Still a Bi-Metallic case and not a Londoner case. Whole rational in Bi-Metallicnot everyone is effected the same. Court said you should have had assessment earlier. Stewarts Dissent: The failure to hold a hearing allowing P to elicit and challenge evidence was a denial of meaningful judicial review. Rules May Replace Individualized Expert Testimony in Adjudications Heckler v. Campbell (J. Powell Majority) Facts: Campbell (P) was denied disability benefits when the Department of Health and Human Services (D), using published guidelines, determined that she was not disabled. DHHS was using regulations that factored in a persons age, health, education, and experience and set forth rules regarding whether a significant number of jobs would exist for which the applicant was qualified. If there were jobs, no benefits. Holding: The Department of Health and Human Services may rely on published medical-vocational guidelines to determine a claimants right to social security disability benefits.

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Notes: Grid system is a new system. The old system relied more on experts. Problems with having this expert testify. Experts cost a lot and can be inconsistent themselves. So, ok to allow individualized assessment by a nonexpert. Substantive 706 and Procedural 553 Hard Look Doctrine in Informal Rulemaking U.S. v. Novia Scotia Food Prods. (J. Gurfein Majority)Must disclose data basing rule on to have meaningful notice and comment. Facts: Nova Scotia (D) appealed from an order of the district court enjoining them from processing hotsmoked white fish in violation of regulations promulgated by the FDA (P). While FDA did go through notice and comment for the formal rulemaking process, it did not indicate or disclose the data it relied on making it impossible for anyone to comment. Additionally, it did not adequately deal with Ds concerns. Holding: Agency notice and comment rulemaking proceedings must develop a sufficiently complete administrative record upon which to predicate adequate judicial review. Notes: Similar to Posner case with HIV and other diseases. Even if you have to put on plastic gloves you are not going out of business. POSNERthinks raising cost of medical care. But court said increasing public health. But here, not much botulism historically recorded with white fish. So, dont really have to worry about this. What we will do instead of cooking at high temp is to dump it in a nitrite solution to kill the botulism toxin. Should be ok. Weyerhauser v. Costle (J. McGowan Majority)-People have to have chance to notice and comment. Facts: Weyerhauser (P) challenged the EPAs (D) adoption of regulations, pursuant to the Clean Water Act, limiting the effluent discharges of pulp, paper, and paperboard mills. The EPA did calculations which it did disclose the first time in notice and comment, but then made recalculations that it did not disclose in notice and commentnaughty little agency. Holding: The absence of the factual basis and legislative purpose underlying an agencys actions in the record, coupled with the denial of the opportunity to comment on these facts, undermines the usual assumption that agency notice and comment proceedings, by virtue of their accessibility to public scrutiny, will achieve rational results. Notes: Have to tell interested parties what thinking about doing and what relying on and where got calculations. Otherwise, no meaningful opportunity to be heard. TheoryHard Look Doctrinesometimes effective use of informal rulemaking requires more than one round of notice and comment. If, as a result of comments, they get from first round, they end up with something radically different, then they have to allow another round because someone might want to comment now that didnt want to comment then. Abolition of Hybrid Judicially-Imposed Agency Procedures Beyond Substantive or Procedural Hard Look Vermont Yankee Nuclear Power Corp. v. Natural Resources Defense Council (J. Rehnquist Majority) Facts: The court of appeals invalidated Vermont Yankees (D) license to operate a nuclear power plant, holding the Atomic Energy Commission (D) had not engaged in adequate rulemaking proceedings under the APA in establishing the licensing standards used to grant the license. The proceedings of D did conform to section 553 of the APA. Holding: Except in rare circumstances, a reviewing court cannot impose upon agencies more stringent procedural requirements than those enumerated in the APA. Notes: Have to realize that APA was a political compromise.

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Court was going beyond its power to say that the agency should do more than what 553 requires for fairness reasons. Hybrid rulemakingmore formal, but not so informal. Should have allowed oral cross of witnesses. Not required by informal rulemaking. Even rigorous hard look of 553 does not require, but the court thinks it would have improved the rulemaking process. Cant go beyond hard look and go out to hybrid rulemaking. Why: because that upsets the political burden that was struck by the APA, the political compromise. Three ways in which might be ok to go beyond APA. o If the constitution itself requires this, such as DPC, then that would be ok if court required this. o Also could go beyond APA if Congress told them do so by saying it is ok for you to go beyond 553. Congress would be overruling its own statute. o If agency, itself, took it upon itself to make a more thorough or formalized procedure, that would be ok as long as Congress did not object. Not permissibleif court says, on own motion in our wisdom, we think you, the agency, should have gone further than you did. WHY? If agency realistically feels that a reviewing court will demand that they, the agency, go beyond 553, the agency will preemptively adopt more elaborate procedures. Will take so long and be so cumbersome.

Substantive Rules Versus Interpretative Rules, Statements of Agency Policy, and Procedural Rules Am. Hospital v. Bowen (C.J. Wald) Facts: Department of Health and Human Services (D) promulgated regulations concerning peer review organizations without following notice and comment procedures. This was with regards to Medicare expenditures. This is a procedural rule. Holding: The requirement of notice and an opportunity for comment does not apply to interpretative rules, general statements of policy, or rules of agency organization, procedure, or practice. Notes: Informal rulemaking is getting to be a burden from the previous cases. One thing to do is to say that not going to go through informal notice and comment rulemaking because the court will just tell me that I havent complied with 553 or 706. So just going to send a general rule through notice and comment. But from then on out, I am going to claim that the rest are interpretative rules. Idea is that it will speed things up, less expensive. But, what if abusing the process. Could be doing under the guise of interpretative rules, but really substantive. Three things that dont go through notice and comment: o Statements of agency policyinformal guidance. Pg 708. Tentative idea without binding agency. Doesnt impose any duties of its own force. Doesnt commit the agency. o Interpretative rules. Pg 707. Substantive v. interpretative rules. Interpretative rule can do things like predicting agency activity or explaining ambiguous terms. There are going to be cases where the borderline between substantive and these other three categories is going to be unclear. Interpretative rules clear up ambiguities. Boundary is very unclear, though. By explaining this ambiguous term, seems like substance. o Statements of agency organization practice or procedurenot substantive rule. Pg 709. Substantive rules can have substantive impact on the party. But procedural rules wont have this same impact. HARD to tell difference. Congress said substantive v. procedural and not importance. Theory being expediency and speed outweighing help to public.

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Court sayswe are going to call substantive if it encodes a substantive value judgment on part of Congress. If rule puts stamp of agency approval or disapproval, then it is substantive. o Ex: Something already forbidden to do. Cant pry open paint can lid with screwdriver. Now, what is the penalty? What if say fine of 1cent every 10 times you do it. But, if you say penalty is death. Or $10 million fine. Could argue that put stamp of agency disapproval and yet still a procedural rule. Borderline case. NO Clear distinction.

Community Nutrition v. Young (Per Curiam) Facts: The FDA (D) established the maximum levels of unavoidable contaminants it would permit before taking action to condemn interstate shipments of adulterated food. Peanut Toxin case. Holding: An agency must give notice and comment when the regulations it promulgates have a substantive effect. Notes: Majority saysaction levels are currently binding in and of themselves. Agency says that it will be deemed adulterated if they violate the action level. All have to ask is has the action level been violated. Therefore, substantive rule and should have gone through notice and comment. Judge Starr Dissentingif you look at what happens in any agency prosecution you will discover that these action levels should not be substantive rules. The agency cannot successfully condemn any peanut just by showing violated the action level. According to the statute, the FDA would have to show not only that but also have to show on the merits that 20 parts per billion really is dangerous. Then isnt Ken Starr right. Agency still has burden of proof. Starrs Dissent: Action levels offer guidance to the regulated community. In an enforcement proceeding, FDA would still have to prove adulterated. Therefore, the action level does not have the force of law in subsequent proceeding. Hoctor v. U.S. Department of Agriculture (C.J. Posner) Facts: Animal Welfare Act, designed to assure humane treatment of animals, authorizes the Secretary of Agriculture to promulgate such rules as he may deem necessary to carry out purposes of the Act. The BIG CAT case with a rule after notice and comment regarding structurally sound. 8ft fence required but Hoctor only had 6ft. Hoctor says this is substantive and should have had notice and comment. Holding: When substantive rule, must allow for notice and opportunity for comment. Notes: Should have allowed animal owners such as Hoctor a chance to comment. Substantive rule. Air Transport Assn of America v. Dept of Transportation Maj: Edwards Issue: Whether respondent governmental agencies (FAA) were obliged to engage in notice and comment procedures before promulgating a body of regulations governing the adjudication of administrative civil penalty (FAA argued the Penalty Rules were exempt b/c they were rules of agency organization, procedure, or practice.) Holding: This is not exempt from the requirements of notice and comment (fine involves putting a stamp of disapproval on conduct and it affects primary conduct = substantive rule) Cannot call something a procedural rule just b/c it looks procedural sometimes they encode a substantial value judgment or substantially alter the rights of the parties and if so then have to go thru N/C o 553(b)(A) > rule does not fall within the scope of the exception just b/c it is capable of being labeled procedural.

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 Under both the APA and the DPC a party has a to notice and a hearing before being forced to pay monetary penalty Dissent: Silberman Not pure substantive or procedural > it is a continuum or a spectrum He thinks procedural b/c does not affect the substantive norm Moral: line btwn substantive and procedural = FUZZY (case could have gone either way) Procedural Due Process and Agency Practice **Need to have state action to have due process claim** Procedural Due Process (from Cheryls Outline) Meaningful Hearing at a Meaningful Time 10 characteristics Unbiased tribunal neutral decision maker notice of the proposed action and the grounds asserted for it opportunity to present reasons why the proposed action should not be taken (oral) the right to present evidence, including the right to call witnesses the right to know opposing evidence the right to cross examine adverse witnesses decision based exclusively on the evidence presented right to counsel requirement that the tribunal prepare a record of the evidence presented requirement that the tribunal prepare written findings of fact and reasons for its decision The timing of a hearing: North American Cold Storage v. Chicago [Pre-hearing not required when public safety would be at risk from waiting] pg 794 Maj: Peckham Facts: Chicago Health Officials summarily seized North Americans frozen poultry, declaring w/o hearing that it was unfit for human consumption [they were storing chickens at wrong temp] Issue: Is a hearing required Holding: No. Due process does not require a prior hearing where administrative action is required to be immediate in nature. [Putrid or unfit food presents health risk- power to seize food is inherent power of a public health official.] They do get post deprivation hearing o For sake of public health and sanitation one could argue there is a public interest in taking away birds as soon as hear about it and then have hearing later o If have hearing before seizure > it could be several weeks o Owner could see that birds are kind of bad, but may try to get rid of them anyway so there is a risk to public health (if waiting for hearing) Burden of proof of showing unfitness for human consumption is on the city that seized the chickens > so it is a win win situation b/c either NACS wins or public wins o IF no temp records any more = no evidence > then city will lose and will have to pay fair market value of birds to NACS Definition of Interests Entitled to Procedural Protection Goldberg v. Kelly [Welfare benefits are a matter of life or death therefore need pre hearing] pg 798 > Case illustrates the breadth of what is property. Maj: Brennan Facts: Kelly and other recipients alleged they were deprived of due process b/c they were afforded no hearing prior to the decision of welfare authorities to terminate their benefits Holding: Welfare benefits can only be terminated after a hearing (with minimal safeguardsincluding the opportunity to be heard on his own behalf)

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 Welfare is an income stream that people anticipate (you and the govt = mutual anticipation) = govt
cannot take away w/o DP of law o Need pre hearing b/c does not help to have it post and then the person starves to death o The weight of claimants interest is a factor you use among others when you are deciding what kind of hearing is due but it does not solve the initial question whether there is a hearing at all (weight does not give person a hearing) have to be entitled to a hearing in the first place then look at weight To figure out whether a hearing is needed: o Two step process: Whether due process must be afforded Need to determine the precise nature of the govt function and the private interest that has been affected by govt action Whether cross examination is required In almost every setting where important decisions turn on Qs of fact, DP requires an opportunity to be confront and cross adverse W Pre hearing has 1 function: o To produce an initial determination Complete record is not needed needs to be speedy Just use minimal safeguards Judge has to give you a decision made only on the basis of the adm record compiled at the hearing have to give reasons (not formal statements of facts etc.. but some reasons) Need: o Have to have timely notice of hearing itself in advance o Opportunity to present your case (present their E and arguments orally) o Opportunity to confront adverse witnesses (cross-examine)

Board of Regents of State College v. Roth [To have a property interest need more than desire or abstract need] Maj: Stewart Facts: Roth contended that the Board of Regents denied him due process when they failed to rehire him as an assistant professor w/o giving him a reason or affording him an opportunity for a hearing. Rule of law: There is no 14th Amendment or property interest denied a nontenured teacher when he is dismissed; therefore, no due process rights accrue. First step = nature of the interest at stake (Weighing process not first) o look to see if the interest is within the 14th Amendments protection of liberty and property Here he has a unilateral desire to be rehired (not mutual) Does not get a hearing b/c only bare desire no protected property interest need mutuality and state law provision or contract (his property interest extinguished after 12 mths the length of his contract) Roadmap: SCT rejected the grievous loss test in Goldberg and accepted a test based on state or fed statutes or regulations, for creation of property interests. 1) legal entitlements create property interests external sources to constitution create property interest. Needs to be a mutual claim to entitlement (state and recipient) 2) Entitlement exists when interest is governed by criteria, rather than discretion Ex: if state or employment K provides govt employee may not be terminated except for good cause, then employee has property interest and due process must be followed. If employee is at will then no claim of entitlement and no due process.

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3) Entitlements are created by substantive, not procedural law. If staute provides procedural protections only then no entitlement exists. Ex: Procedural constraints n gotv action usuallu insuffiecient to creat entitlement

Perry v. Sindermann [minimal property right due to implied contract (teachers handbook)] Facts: teacher employed by state college system for ten yrs under a series of 1 yr Ks; no tenure system - the board voted not to hire b/c of some public thing no hearing offered. Teacher claimed implied tenure system which gave him a property interest and was protected by due process. Rule: An interest is a property for due process purposes if there are mutual understanding supporting a claim of entitlement to a benefit which may be invoked at a hearing Handbook said as long as teaching skills are satisfactory > really college could say you are not satisfactory, but they could have been mistaken about that. Property = broad range of interest Holding: Respondent must be given an opportunity to prove the legitimacy of his claim of such entitlement in light of policies and practices of the univ Respondent would have a liberty interest if fired for free speech issues Roadmap > Perry = Implicit Entitlements Subsequent Judicial Evolution of Property and Liberty Goss v. Lopez Ct held that a state grants a free education to all students and Ohio may not w/d the right to education on ground of misconduct w/o fundamentally fair procedures to determine whether the misconduct has occurred {state action here} If have a duty to show up for school you have a property interest DP here does not require a full blown bench trial just to have the opportunity to some sort of oral hearing to dignify the process Not life or death here just a kid > he will recover Needs opportunity to state your case briefly Cleveland v. Loudermill [Abolishes Bitter with the Sweet doctrine] Facts: Security guard was dismissed b/c he lied on his application about having a previous felony (did not serve any time). Trying to convict him for lying not for being convicted of the felony. Ct here disagrees with Rehnquists take the bitter with the sweet (from Arnet v. Kennedy) o Sweet = entitlement to employment on particular grounds created by state statute o Bitter with the sweet = if going to take the sweet part of the job you must also accept the procedures that can take that right away This case says you do not necessary have to take the bitter with the sweet > state has given you something sweet part > dont have to take the minimal procedure with it (bitter) Once state has given you a present they cannot control the procedures (hypo of getting present with duct tape and saying take this back and rewrap it) Did not have to create a civil service tenure system, but once you did, created a property interest Once you give someone those substantive rights, the procedures that must be followed are set by the 14th amend DPC Mathews v. Eldridge [3 step balancing test to determine what process is due] Maj: Powell pg 833

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 Facts: Eldridge contended that he was denied due process when his SS benefits were terminated
w/o an evidentiary hearing

Rule: An evidentiary hearing is not required prior to adverse adm action if the adm procedures
provided adequate safeguards against error. Different than Goldberg - Here disability adm giving pretty decent pre-deprivation process by putting in the record the reasons why person is no longer eligible and have to allow you to respond. So pre process is not worthless. Individual claimants interest is not as strong as in Goldberg (SS not means tested like welfare) Factor 1 = look at weight/gravity of the claimants constitutionally protected interest o Claimants interest will point in favor of the earlier and more elaborate hearing Factor 2 = The govts interest (have to weigh) o Interests is opposed to that of the claimant If have to pay for more elaborate earlier hearings = more money In favor of later cheaper hearings Polycentricity problem (have to take money out of somewhere else to use for more elaborate hearing) Their interest is kind of split (not simply opposed to claimant) they have an interest in making sure claimant really is eligible and that they get their benefits if they deserve them Factor 3 = the difference in the error rates btwn the process the govt offers and the process the claimant wants o Obviously claimant wants more costly earlier hearing o Want to know given the difference in the costs, is that extra cost worth it in terms of reduced error? o If claimant gets what he wants is that hearing going to be more accurate reach a better result? Roadmap > SCT rejected Goldbergs argument that a pre-deprivation hearing is due if govt action threatens significant harm. The Court stated that once it is determined that an action will deprive a person of a protected interest, you must look to the 3 factors. 1) The stronger the private interest is in being free from deprivation, the more procedure is required under due process 2) Govt has an interest in preceding with no more process than already afforded 3) Risk of erroneous deprivation if additional procedure is not afforded- greater risk the stronger the claim to additional procedures University of Missouri v. Horowitz [Hearing procedures require expertise not for the court to decide] Facts: Medical student at Univ. of Miss Med school terminated from program on several grounds including inadequate clinical rounds. She does not get to present her case but she gets to talk to the dean. She received notice statement of the reasons/grounds and an opportunity to respond or react to grounds cited against her. Question is does she deserve more? Need to apply the three factors o What is her interest o Govt interest? o Error rates??

Procedure here deemed adequate b/c not a trivial dismissal = key thing was her clinical
performance was inadequate Med school would know. Need to leave it to the expertise of the medical school dean. Holding per George: We SCT have no business second guessing med school personnel to see who is adequate med student or not Roadmap > Ct held that the consultative review process employed was sufficient

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Post deprivation remedies as a Substitute for Pre-deprivation Agency Hearings Ingraham v. Wright [other remedies available] pg 848 Maj: Powell Facts: Plaintiffs claimed they were denied due process when they were given corporal punishment by school officials w/o a judicial hearing. Ct first found liberty interest in not being paddled. Then looked at what process is due. Used 3 part Eldridge balancing test. Rule: There is no due process right to a judicial hearing prior to the imposition of corporal punishment on school kids b/c the burden such hearings would place on the govt outweighs the kids interest in being free from unjustified punishment Holding: DPC does not require notice and a hearing prior to the imposition of corporal punishment in the public schools, as that is authorized and limited by common law. Ct says well you can get meaningful post injury relief > legal relief state tort action of 1983 Ct here says supposedly whether the student deserves it or not, it is best left to the judgment of the school/authority Ct here not going to second guess it. Roadmap > The ct held the existence of common law remedies, coupled with the low incidence of abuse, meant due process did not require a hearing in advance of inflicting punishment RECAP OF Procedural Due Process: First Step = is there state action? Second Step = is a hearing required? Yes if there is a life, liberty, or property interest involved o Need to determine the precise nature of the govt function and the private interest that has been affected by govt action Govt benefits, licenses, and govt employments have been recognized as property interests (called new property) o Have to determine if statute, contract, state law, etc created an entitlement to the govt benefit (need mutual understanding) Cannot be unilateral desire or abstract need Third Step: Once a hearing is required, determine what kind of hearing is necessary: Eldridge balancing test (3 factors): o 1) Strength of private interest o 2) Govt interest o 3) difference in error rates btwn the two proposed processes (try to argue more than states desire to save time and resources, maybe an emergency necessitates quick action) FREEDOM OF INFORMATION ACT (FOIA) FOIA grants public access to most agency records. Records sought must fit definition of agency record. Agency record: records created or obtained by the agency in the course of doing the agencys work must be under agencys control at time of request. Involves genuine disinterested journalists or scholars obtaining useful info. to give us a better grasp on how our gov. functions. Easy to obtain records. Just fill out 1 page form and give reason for request. May get charged a fee but can be waived if have a public interest reason. No standing requirement to utilize the FOIA dont need a legally good reason can just be curious. If determined that gov. wrongly refused to give docs. can get attny. fees. Time limits the gov. has to comply with request 9 Exemptions to the FOIA

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National Security national defense or foreign policy Internal Personnel Rules & Practices protection of employee privacy (medical records) and protection of agency from harassment Documents Governed by Statutes That Direct Non-disclosure enabling statute must explicitly say that records cannot be disclosed (may just be certain records) Confidential Business Information trade secrets Privileged Agency Materials attny. work product, attny. client privilege, deliberative process privilege: agency is in the middle of a project cannot have these work in progress papers want to prevent the agency from being cross-examined Investigatory Records involves criminal proceedings wouldnt want MTPs family finding out how the gov. is tapping their phones Financial Institution banks Geological Exploration oil wells dont want competitors getting maps of where all the oil is (could also be covered by confidential business info.) Exemptions should be narrowly construed. Burden of proof is on the agency to prove that an exemption exists. FOIA does not prevent agency from voluntarily disclosing confidential info. Reverse FOIA action: person who does not agency to release any info. in regard to them has a claim of action.

Roadmap exam tips: Make sure the agency has possession of records at time of request. More than 1 exemption may apply to the requested records. APA provides judicial review of an agency decision to release records. Privacy-based exemptions balancing test: publics need to know v. potential invasion of privacy Requirements of Agency Separation of Functions and Independence Wong Yang Sung Facts: Another deportation case. P argued that the judicial and prosecutorial functions of the agency were merged in violation of the APA. Holding: The APA precludes an agency from allowing the exercise of its judicial and prosecutorial functions by the same person. In this case the same person did not act as prosecutor and judge, however, the inspector acted as prosecutor and one of his inspector buddies acted as judge. This is not an objective and fair situation for the plaintiff. Not likely that the inspector judge will act without bias toward his buddy who is prosecuting the case they have to continue working together! Not obvious what section of the APA the agency violated but the US Const. requires due process! This plaintiff deserved at minimum an adequate hearing that was unbiased. Judicial Review of Agency Inaction Heckler v. Chaney

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 Facts: P sued to enforce an agency to enforce its own requirements. Lethal injection case against the FDA. Guy on death row argued that the lethal combo of drugs had never been tested so should not be approved for use. Holding: An agency has discretion in enforcing its own requirements. APA allows for judicial review of agency action or inaction, but not of agency functions committed to agency discretion. The courts defer to the agencys expertise. A decision not to enforce does not involve coercion upon an individuals liberty or property = courts interest in failure to enforce is not strong. Unless something in the enabling Act requires enforcement of its provisions or regulations, agency will not be held under a duty to enforce. Court compared the agencys discretion to that of a prosecutors. Pros. have discretion in deciding what cases to prosecute and to prioritize. Same with agency and obviously testing lethal injections was not at the top of the list for the FDA. PRESUMPTION OF NON-REVIEWABILITY OF DECISION NOT TO ENFORCE Exceptions: Cong. has provided actual guidelines for the agency regarding when to use discretion whether to enforce and the agency refused to follow guidelines of when to use discretion. If decision not to enforce violates an individual Constitutional right. Agency mistake: agency does not believe they have the jurisdiction to enforce the statute = legal mistake. Ct. wont tell them what to do but will tell them that they have the power to enforce. If agency inaction is so complete that the agency has abdicated its power. Suspected wrong-doing of agency. Extreme case like someone bribing agency official. Roadmap Supreme Ct. reluctant to allow judicial review of agency decisions when to regulate or whom to prosecute. APA 701(a)(2) committed to agency discretion by law - Presumption against review of agency discretion regarding whether to enforce a regulation. Up to the agency to balance factors regarding whether to enforce reg. or not. How to rebut presumption against review of agency inaction: o Enabling Act requires agency to act under certain circumstances or within a certain time period. o Constitutional challenges to agency action or inaction Standing to Challenge Agency Action Sierra Club Facts: SC = a professional environmental group. SC filed a claim against an agency in charge of wilderness in regard to Disney World building a theme park destroying scenic beauty. Agency argued that SC lacked standing b/c no direct injury to SC. Holding: A plaintiff must suffer a direct injury to have standing in a suit. Key point: SC did not establish that any of its members actually used the wilderness area for recreation all you need to show for standing is that you suffered a direct injury. If SC had gotten standing w/o alleging that members did not use area would have been great for them b/c they would have a precedent saying that any time environmental group sued on environmental issue would always have standing. Standing can be based on environmental or non-tangible injury. Local injury: locals that are directly affected may have a conflict of interest with some big environmental group. Why? A settlement offer. Maybe Walt Disney willing to give lg. amt. of money to those citizens who are directly affected by the completion of the theme park. Environmental group would say not to take the stinky money.

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 IMPORTANT: Never want to ignore standing! Could stop a lawsuit much more easily than litigating and winning a jury verdict. Constitutional aspects of standing: Art. III - adjudicate distinct cases and controversies not just general debate!! Must be a distinct, concrete, palpable injury actual, imminent, or present. Injury must be traceable to conduct of D. Needs to be direct and not too attenuated. Redressability legal relief must cure your problem. Non-Constitutional aspects of standing: Prudential aspects of standing: can waive aside and grant standing Raising the rts. of 3rd parties Political questions Must be in zone of interest sought to be protected by statute Example: 2 toy companies - Statute that says toys have to be safe. Who would be in the zone of interest of protection of the statute? A child. What about the other toy manufacture? Unsafe toys are cheap and now that I have to produce these safe toys = a lot of $$. Ct. would likely say that the co. does not fit in the zone of interest of the person who is supposed to be protected by the statute. Roadmap Constitutional Underpinnings of Standing Doctrine Art. III o Cases and Controversies: Plaintiff has suffered an injury-in-fact must be significantly affected - cannot be an abstract injury aesthetic and economic injury is sufficient Injury is traceable to the challenged conduct must be able to link the injury in some believable manner to the conduct (proximate cause) Injury is redressable by a favorable judgment plaintiff needs to have a personal stake in the outcome of the case so she will benefit if the case is won Prudential Limits on Standing (not Constitutional) o Judge-made doctrines that limit access to the federal cts. beyond the basic const. standing requirements. Plaintiff may not raise a generalized grievance challenging gov. action that affects many people to a small degree Plaintiff may not assert the rights of a 3rd party o Congress may overrule prudential limits b/c not based on Const.

Standing Revisited the Last Day of Class these cases will not be on exam SCRAP Case where a group of law students challenged a decision regarding RR rates and how these rates will adversely affect the consumption of recycled goods. Ct. found standing although story was not that tenable per Wright. Maybe Supreme Court just liked these crazy kids. Lujan v. Wildlife Key point: The amount of proof required for standing varies depending on the stage of the lawsuit that you have reached. Injury should not be too speculative or remote. Injury must be direct, immediate, and palpable. Duke Power Case

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 Nuclear power plant case. People did not want this plant to be built based on 2 reasons: some future speculative reason of a possible explosion and damage to the environment that will occur immediately. Ct. held that first reason was too remote and speculative but the second reason was okay and allowed standing. BAKKE Affirmative action case involving a student who was denied entry into med. school. Student did not say that his injury was the direct result of affirmative action. Ct. found special standing on basis that student was only allowed to compete for 84 out of the 100 available spots b/c 16 were specifically reserved for minorities and student was not a minority. Ripeness of Agency Action for Challenge Abbott Labs v. Gardner Facts: Abbott sought judicial review of an agency order prior to its enforcement. The regulation required drug manufacturers to use the generic name, along with the trade name, of medications every time the trade name appeared. Holding: Agency action is ripe for judicial review when the issues presented are fit for judicial decision and the parties will suffer hardship if judicial decision denied. Ct. held that the hardship was sufficient b/c it would be very costly for the drug manufacturers to print new labels and destroy those already in stock; and the manufacturers were at risk of criminal penalties if they did not comply. Ct. determined that Abbott would suffer great hardship if judicial review denied. Under APA any final agency decision is available for review by any aggrieved party. Must have final agency action! Dont want to have agency action reviewed by ct. too soon. If you wait a little longer may get a better agency record. This would be better than a ct. b/c of agency expertise. Cong. may have wanted agency to make the first determination not a ct. To determine ripeness 2 main issues Fitness of the issue: legal issue further expertise on agency is irrelevant. Fit for judicial resolution. Hardship to the parties: Party would suffer a hardship by waiting to adjudicate. Would be expensive for company to comply or if company does not comply with new regulation, may receive a huge fine. This = hardship. If any kind of public health interest or risk of disease, ct. would allow challenge to go forward but rule would still be in effect to protect public health. Roadmap Ripeness and Mootness: When a case is brought too early or too late, either there is not yet an injury sufficient for standing or injury has ended, and a favorable judgment will not remedy it Ripeness in Administrative Law: o APA 704 grants right to judicial review of final agency action for which there is no other adequate remedy in a court. o Agency adjudications are final when the ajudicatory process has completely ended and the agency has issued its decision. o An agency rule may be ripe for review before enforcement if the issues are: fit for judicial review and the party seeking review would suffer substantial hardship if review delayed. o Definition of fit for judicial review: If no further factual development is necessary for the issue to be resolved. Purely legal issues are fit for review. o Definition of hardship: If it would be expensive to comply with the regulation immediately (which might be ultimately be overturned) and if special problems would

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arise for a party who violated the regulation to provoke an enforcement action (in order to get judicial review). Exhaustion of Administrative Agency Internal Remedies McKart Facts: Gov. argued that M could not raise the defense of erroneous selective service classification at crim. trial b/c he failed to exhaust his administrative remedies. Holding: Administrative remedies need not be exhausted prior to judicial review where the validity of the agency action is merely a function of statutory interpretation and the burden of denial of judicial review outweighs the underlying interests of the exhaustion rule. Exhaustion of remedies: must pursue administrative appeals before filing judicial lawsuit. Constitutional reasons: separation of powers (dont want cts intruding on exec. branch) Want to allow agency to create admin. record. (the agency can generate a better record than the ct. can do this faster, cheaper) Cong. may have wanted agency to apply its expertise and did not want agency to be bypassed. Dont want to set up incentives for people to bypass admin. remedies. This was not the type of case that would benefit from an agency hearing. Not debating a lot of facts Doesnt require a lot of admin. discretion or policy making The issue in this case was a pure legal question and the ct. could decide as well as the agency. Did not need agency expertise to answer issue. Balancing Test: Plaintiffs interest v. agency interest B/c harm to this guy was so substantial, court decided to override the important agency interest. Did not require exhaustion in this case. Civil rights cases dont require administrative exhaustion largely for admin. reasons Roadmap Exhaustion of Remedies Doctrine: o Challengers must exhaust all remedies within an agency before seeking judicial review. o 3 Exceptions: exhaustion would cause undue prejudice to the protection of the rights at issue the administrative agency lacks power to grant effective relief the exhaustion would be futile b/c the administrative body is biased o Policy behind Doct. Avoids needless judicial intervention into administrative affairs Allows an agency to correct its own errors Sharpening the issues and the administrative record for judicial review Agencies Versus Courts and Primary Jurisdiction Nader v. Allegheny Airlines Facts: Ct. of App. stayed Naders suit for tort claim b/c deciding whether overbooking flights was fraudulent was within the primary jurisdiction of the agency. Holding: The doctrine of primary jurisdiction does not apply to suspend judicial proceedings on a common law cause of action where there the issues to be decided by the ct. and those to be decided by the agency are not absolutely inconsistent. Based decision on fact that Nader did not claim that the airline had violated any provision of the agencys enabling Act or had violated its tariff filed with the agency. Primary Jurisdiction Doctrine: If a courts decision would encroach upon a determination to be made by the agency, the ct. should suspend the action and send it to the agency. If the ct. were to decide the case on its merits, it would no way infringe upon the agencys decision. Common law tort claims are decided by the courts all the time so dont need agency expertise. A ct. may just send a part of the case or some issue back to the agency b/c:

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agency can create a better record less expensive may not ever have to hear this case in fed. ct. b/c claimant is happy with agency decision. Kind of like appt. a special master.

Roadmap Primary Jurisdiction Doctrine: requires that certain claims be heard in an agency either before, or instead of, an action in a court. o Doct. provides that a if a claim is within the substantive jurisdiction of an agency, it must be heard first by that agency, even if the facts give rise to a claim otherwise recognized by a court.

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