Admin Law Outline_Banzhaf

April 5, 2018 | Author: Anonymous | Category: Social Science, Political Science, Government
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Admin Law Outline

Topic 1: Introduction to Administrative Law I.

II.

Definition: Administrative law is the body of general rules and principles governing administrative agencies (How they do their own work, and how work results can be viewed or reviewed by the President, Congress and Courts) a. Functions: Administrative law is NOT the substantive law adjudicated by agencies, or the procedure followed by agencies i. (1) Rulemaking- Regulations promulgated by agencies (CFR) 1. Under agency rulemaking power, agencies can pass criminal statutes violation of which can be a felony ii. (2) Adjudication- Social security/immigration decisions 1. Decide specific factual situations 2. More cases adjudicated in agencies than cases filed in federal courts b. Source: Constitution, federal statutes, E.O.’s, court decision, and agency’s own rules and guidelines i. Agency organization dictated by statute (NOT constitution) ii. Focus: Process-oriented (as opposed to tax law practiced by IRS) iii. Administrative Agencies: Any governmental authority other than a court or a legislative body- “All authorities and operating units of the government except for the constitutionally established entities” (Congress, President and Courts) iv. Created by statute (definitions under APA on page 1437 and 1404) c. Goals: Admin law attempts to increase social/political freedom by making government interworking’s more transparent and encouraging individual gov’t participation i. Many agencies have a division of functions to keep ALJ’s isolated 1. But not always – OSHA is the inspector, judge and jury 2. Newer agencies have more energy, before negative precedent d. Output: Agencies make regulations (CFR), decide disputes, license activities or individuals, enforce regulations (inspect, penalties) i. Not all elements are listed in organic statute- might be listed in later statutes Types of Agencies: Two patterns for agency organization a. Administrative Agencies: Headed by single administrator who serves at President’s pleasure, often within larger entities headed by members of President’s Cabinet i. Non-Independent (within the executive branch)- led by one person 1. Pres. has near unlimited power to dismiss for whatever reason ii. Ex: OHSA or Dept. of Labor (usually Administrators) iii. Sometimes independent agencies are housed within administrative agencies (FERC within DOE- 5 members have term appointments and removal protection making it “independent”) b. Independent Regulatory Commissions: Free standing bodies whose members can be removed from office by President only for “cause” i. Until 1910 all agencies were within the executive branch (State, DOD, DOJ, etc.), then Congress created more agencies with a certain amount of independence from the executive branch ii. Sometimes headed by people (usually Commissioners) who have term tenure or for-cause removal protection- are not subject to immediate dismissal by President (with exceptions). 1. Sometimes independent agencies have a single individual who has term tenure and for cause removal protection (SSA) c. Regulatory Agencies: Issuing rules, inspecting or punishing violation w/ governmental authority d. Non-Regulatory: Agency reaches outside its own area to achieve results by traditional government means i. Not using governmental powers (GSA- has an impact on things outside their spheres)

ii. Ex: National Zoo is not a regulatory agency because they just regulate behavior within their sphere e. Examples: Some agencies deal with small area- FCC deals with broadcasters exclusively, some with wide area- OSHA- anyone who employs someone 1. Non-Independent and Non-Regulatory: State department, FBI 2. Non-Independent and Regulatory: FDA, OSHA: Within HHS which is under the department controlled by an executive 3. Independent and Non-Regulatory: CIA, NASA, influence outside conduct 4. Independent and Regulatory: FTC, NRLB, NRC – insulated from Presidential control, multi-member heads, fixed terms, for-cause removal f. Presidential Preferences i. Carter- wanted to inventory all agencies ii. Reagan- wanted cutback on agencies (deregulation) 1. Many political initiatives require new agencies iii. Clinton- wanted to reform Medicaid, required new bureaucracy iv. Bush- 9/11 made him increase expansion in agency (size & number) v. Obama- Greatly expanded administrative agencies 1. TARP, stimulus funds, auto industry, Dodd-Frank, CFPB g. Issues: Alternatives to establishment of administrative agencies i. Issue with unelected bureaucrats getting policy and discretionary power ii. Step 1: Is there a problem?  Do we need to get the government involved? 1. Organ donation- voluntary 2. Common law regimes: Courts 3. Statutory law regimes: Legislature, enforceable by Court iii. Step 2: Do we even need an agency to remedy the problem? 1. Need uniformity, special experience or expertise, etc. iv. Step 3: How should it be addressed? 1. Courts- Usually can address, unless there is no law to apply to the topic 2. Legislature- Congress can pass a statute setting out the substantive law, but sometimes don’t want congress making specialized decisions 3. Agencies- Give an existing agency new authority, or new agency? III.

Procedure a. Congress has broad authority to create and structure agencies subject to certain constitutional limitations i. Might think Agencies violate Separation of Powers (co-mingling of legislative, executive and judicial functions AND indep. agency’s insulation from presidential oversight) ii. But constitution authorizes Congress to make laws “necessary and proper” for ensuring powers are exercised effectively – (Art I, §8, cl. 18) b. Agencies can only exercise powers they have been delegated, but Congress entrusts agencies with many policy-setting powers, and high “discretion” i. Jurisdiction can be vague like “in the public interest” or “to protect public health”

Topic 2: Delegation of Regulatory Lawmaking Power (Rulemaking/Legislative Power) I. Delegating to the President v. Cabinet a. The Non-Delegation Doctrine: Legislative power delegated to Congress cannot be re-delegated to the Executive or to the Courts i. Congress can’t delegate legislative powers to agency – Constitution gives congress responsibility to exercise “all legislative power” – (Art I §1) 1. When Congress delegates quasi-legislative power – might be abdicating responsibility to exercise powers its responsible for under Article I

ii. Congress can’t delegate adjudicatory powers to an agency so that it undermines the federal courts’ authority to exercise “the judicial power of the US” – (Art III, §1) 1. When Congress delegates quasi-judicial power, worry it’s undermining powers conferred on federal courts by Article III iii. Contingency Doctrine: Executive isn’t legislating, just “filling in the details” and implementing a certain group of principles based on the occurrence of a condition that Congress wasn’t sure would happen 1. Article I: “All legislative power granted shall be vested in a Congress” 2. Courts must uphold statute unless unconstitutional (Marbury v. Mad.) iv. Ensure an orderly government administration- Congress responsive to popular will b. Formalist: Cannot delegate adjudicative or legislative power to an agency because delegated power is “executive” not “legislative” - no difference in that power given to president or within the executive branch c. Functionalist: Rejects theory that delegated power is really the president’s - whoever got the delegation has the power- decision-making now becomes subject to the APA or a sunshine statute II.

Delegation of Legislative Authority a. To what extent can you delegate to an agency legislative and adjudicative power? i. Aggrandizement- When congress tries to have more control over agencies than what is constitutionally allowable ii. Encroachment- Congress tries to allocate duties and responsibilities in a way that appears to violate a constitutional principle b. Intelligible Principle Standard: So long as Congress lays down in legislation an intelligible principle to which person authorized to exercise the delegated authority is can conform, such action is NOT a forbidden delegation of legislative power (Misretta) 1. Found in the purpose section of organic statute OR can infer from other statutes OR legislative history OR problem itself OR common sense 2. Usually Court Congress to give broad rulemaking power to agencies – can give executive agencies power to take actions with legislative effects based on agency’s policy judgments as long as Congress give them an overarching policy within which to act (like “public interest”) ii. Analysis: Look at procedural protections as much as substantive standards 1. Agencies may try and reduce necessary power delegated to them- cure vagueness by adopting more procedural protection 2. Ex: FTC/FCC’s mandate is broad and vague, but so many procedural requirements, it’s ok (want transparency, comments, etc.) c. Goals: Reason for upholding broad delegations is pragmatic- more functional. Practical understanding that “increasingly complex society . . . Congress simply cannot do its job absent an ability to delegate power under broad general directives” (Misretta) d. The Brig Aurora (1813): Statute authorizing Pres. revive statute giving favorable trading status to France if Pres. felt countries were violating US neutral commerce 1. Usually delegate power to the head of a Cabinet or a free-standing agency who then delegate to internal units (President has to ascertain a fact) ii. Issue: Did the statute give the President too much legislative power by allowing him to decide when the statute imposing the embargo would be suspended? iii. Holding: No. The Court UPHELD presidential authorization to give favorable trading status to countries if they were violating neutral commerce under the Contingency Doctrine: President wasn’t legislating, just allowing previously enacted legislation to become effected 1. An area where the President has primary authority (dealing with foreign nations) iv. Rule: If an intelligible principle principal is present then the delegated power is “executive” not “legislative”

III.

e. Field v. Clark (1892): Tariff Act – normally requires duty free imports, but Pres. could suspend if he felt that the other country was unfairly taxing US exports 1. The statutory delegation was to the President personally ii. Rule: Congress can enact legislation the effect of which depends on the President’s determination that a “named contingency” exists iii. Holding: UPHELD the Act’s allowance of presidential suspension of duty free imports if other country was unfairly taxing US import- It didn’t give president legislative powers, because it only gave him discretionary powers to execute the law in a certain way based on the occurrence of a specific condition f. Waman: UPHELD Congress’ delegation of federal rules of process to SCOTUS – they are just filling in the details (not a legislative function) g. US v. Grimaud (1911): Conviction of people who grazed on public land, Congress had given President power to make regulations to set aside land for public forest reserves 1. Statute didn’t let Secretary make rules “for any purpose,” but had to be rules to insure that these reservations are preserved ii. Holding: UPHELD Act- Difficult to separate legislative power to make laws from administrative authority to make regulations BUT congress can give agencies power to “fill in the details” without giving them actual legislative power 1. Expanded the Contingency Doctrine (Field, Brig) because here, the executive made the rules, not just implementing rules made by Congress h. J. W. Hampton v US: (1928): Tariff Act of 1922 allowed President to change statutory schedule of tariffs on goods at President’s discretion if there was unequal exchange i. (Taft): Congress cannot give up its legislative powers and give them to the President or Judiciary, BUT the extent of the assistance one branch can give to another are fixed “according to common sense and inherent necessities of the governmental coordination” ii. Rule: As long as Congress gives out an “intelligible principle” by which a person authorized to fix rates is directed to conform, its not a forbidden delegation of legislative power (president only executes the law, he doesn’t make it) iii. UPHELD- There was a sufficient intelligible principle for the agency to follow Limitations on Delegation of Legislative Power: a. Expansion of government during the passing of these two statutes before 2 cases i. Government plagued by lack of transparency - where code was, when modified, etc. ii. Court had tremendous hostility to dramatic expansive of federal regulatory authority wanted opportunity to halt expansion (not have CFR, public comment, etc.) b. Panama Refining v. Ryan (1935) (hot oil case): Statute allowed the President to regulate oil in excess of state quotas by executive order – change pricing/stop allow oil transport i. Holding: Court found that this was an INVALID, impermissible delegation to the executive because there was NO intelligible principle for the President to follow, so President was virtually legislating, so that isn’t allowed 1. Congress can’t assign this power to the President, because Legislature should regulate IC commerce, and the 19 substantive standards were insufficient as an “intelligible principle” – too much agency discretion ii. Cardozo (dissent): Thought there was constitutional delegation- would have upheld 1. It shouldn’t matter the number of standards, because if there was a standard, and president complied with one, that’s allowed 2. Banzhaf says that Cardozo is correct here- do have standards by which to guide agency discretion to come into play c. Schecter Poultry v. US (1935) (sick chicken case): Congress allowed Pres. to approve trade codes for fair competition (submitted by industry) if certain elements met i. Holding: Was an INVALID delegation- violated delegation doctrine – even though there were standards, the standards weren’t well defined ii. Hughes: There were no explicit guidelines, on how to define “fair competition,” – can’t delegate to private groups an essential legislative function and there were no adequate

IV.

administrative procedures for the approval of the trading codes 1. Setting standards for industries was much more liberal than yes/no to oil transportleaves too much discretion to President to set standards iii. (Cardozo): Unlike Panama Refining, where all Pres. is authorized to do is to prohibit transportation, yes or no black/white- here he agreed with majority, said it violated delegation doctrine because there was no limit to the president’s power here. Power was not “canalized” but “unconfined and vagrant” iv. Notes: If you have sufficient procedural protections, that may overcome vague and general kind of delegation. 1. Ex: publish reasons for decision, have public comment period, etc.) (especially if their substantive standard is “within the public interest” then significant procedural protections) d. Yakus v. US (1944): Congress authorized Administrator to promulgate regulations fixing “fair and equitable prices” during war (court may have given agency additional “war power”) i. Rule: Should only say its an impermissible delegation if its impossible to decide whether the will of Congress has been followed or not ii. Holding: UPHELD- There are enough details set out that we can determine what Congress wanted – not too much discretion given to the agency here iii. Might be moving from a formalist emphasis on separation of powers to a functionalist concern with effective checks on delegated powers iv. Purpose of Delegation Doctrine: 1. (1) Provide guidance to the agencies 2. (2) Provide for a substantive standard when agency’s actions are under review by the courts (“intelligible principle”) Functionalist Emphasis on Encroachment a. Mistretta v. US: (1989): US sentencing commission- created federal crime penalties i. Holding: UPHELD Congressional delegation to an agency set up in judicial branch because there was a sufficient intelligible principle that the authority could use ii. Blackmun: Functionalist: Separation of powers is flexible, no S of P violation here 1. Founders didn’t require that the branches be entirely separate and distinct, wanted to focus on effective government (Jackson in Youngstown- “separateness but interdependence, autonomy but reciprocity”) iii. Different characteristics that should inform commission’s judgment for penalties- so better left to a specialized body than the legislature 1. Ok to have some degree of comingling of functions, as long as there is no danger of aggrandizement or encroachment of powers b. Trucking I: American Trucking v. EPA (1999): DC Circuit Court of Appeals i. CAA required EPA to set “primary standard” to protect public health with adequate margin of safety, and a “secondary standard” to protect public welfare ii. Holding: The court STRUCK DOWN for lack of an “intelligible principle” to use- “protect public health” is too vague (what is the “requisite level of safety”?) 1. Like Benzene case: Could interpret statute to narrow what’s otherwise a more broad authority iii. The court wanted to give agency the opportunity to use an interpretation that doesn’t violate the delegation doctrine SO court allowed the agency to adopt a more precise standard that wouldn’t violate delegation doctrine 1. EPA needs to make a threshold finding setting how their standards were developedotherwise too much influence over American life without justification without any constraints 2. Davis Principle- agency should adopt a more narrow construction 3. By supplementing substantive standard in the statute it cures problem. c. Trucking II: American Trucking v. EPA (1999) DC Ct. Ap. Petition for Rehearing

i. EPA said that there was a limiting intelligible principle under the CAA ii. The court followed Chevron instead of Industrial Union and deferred to the agency’s reasonable interpretation of a statute of an ambiguous principle by which to guide its exercise of delegated authority 1. BUT the “intelligible principle” itself was ambiguous, and not clear that the agency applied the principle d. Trucking III: Rehearing of American Trucking v. EPA (date?) Denying EPA’s Petition for Rehearing En Banc i. The court UPHOLDS finding that “requisite to protect public health” was enough of an “intelligible principle” ii. Constitutional avoidance canon used- APA should be used to limit EPA’s discretion under the arbitrary and capricious standard 1. Davis’ Principle- agency can cure a weakness by coming up with an interpretation of its own- but this was REJECTED iii. The court said that it never suggested that an agency can cure an unconstitutional delegation of power by making a limiting interpretation of the statute e. Trucking IV: Whitman v. Trucking Association (2001): EPA has authority to set AAQS i. Whether EPA has to look at costs of achieving an adequate standard of safety ii. Scalia- Interpreted in its statutory and historical contact, §109 bars cost considerations for the NAAQS setting processiii. Holding: Court UPHELD statute as delegation with sufficient “intelligible principle” 1. Provision requiring protection of public health granted EPA allowable discretion“well within the outer limits of the non-delegation precedent” 2. EPA made judgments, but that’s not conclusive for delegation purposes- EPA wasn’t exercising legislative power, just implementing a statute Notes: Don’t need intelligible principles to allow EPA to define “country elevators,” but would need intelligible principle to allowed EPA to interpret “public health” **Court hasn’t used delegation doctrine to invalidate a federal statute since 1936 (?), but has used it to interpret a statute narrowly** f.

Industrial Union v. API (Benzene case) (1980): OSHA directed agency to set safety standards providing safe/ healthful place of employment using latest scientific knowledge i. Holding: Plurality opinion STRUCK DOWN as potentially violating the delegation doctrine– Court didn’t allow OSHA to interpret the statute so broadly ii. Powell: Section 3(a) doesn’t preclude CBA, need to look at whether industry can bear costs of reducing the safety standard – invalid how OSHA interpreted 1. Issue here is how to balance scientific harm against cost of compliance iii. Stevens: Problem was delegation –Act requires Secretary to make threshold finding that the working conditions are unsafe before implementing regulations 1. Like Schecter Poultry - no explicit guidelines, on defining “fair competition,” or “safe” here- Congress probably didn’t intend to give Sec. power to determine what’s “safe” iv. Rehnquist: Said it violates the delegation doctrine –only justice to find that statute would be invalid regardless of how interpreted 1. Benefits of Non-Delegation Doctrine (Locke) 2. (1) Provides recipient of any delegated authority an “intelligible principle” to guide the exercise of the delegated discretion- guide agencies 3. (2) Courts reviewing the exercise of delegated legislative discretion must be able to test them exercise against ascertainable standards- guide courts 4. (3) Ensures that important policy choices are made by Congress to be consistent with orderly governmental administration- decisions aren’t made by politically unresponsive agency- congress can’t “punt”

v. Notes: Maybe ultra vires- what is the scope of the power and how it was exercised? 1. Congress probably didn’t want to give Secretary power to create standards that would have huge costs for the industry with little benefit to workers a. Congress probably didn’t understand the implications of the determination of whether something is a carcinogen 2. If the only limitation was feasibility, no CBA is required, then there is no safe lower limit (down to zero), that’s a delegation issue a. To save statute- plurality narrowed the statute by construction b. New interpretation: the Sec has to make the determination that there is a risk/something is unsafe, and since no decision was made, decision was ultra vires g. Chevron v. NRDC (1984): EPA’s CAA passed, different interpretations of “source” under Carter and Reagan – DC Circuit said can’t change interpretation, i. Holding: UPHELD as an agency reasonably interpreting statute ii. Stevens: When a court reviews an agency’s construction of a statute it must ask: 1. (1) Did Congress speak directly to the precise question at issue? If YES, then the Court should defer to Congress’ stance 2. (2) If NO, then ask if the agency’s construction of the section in question a permissible interpretation of the statute? iii. Rule: When a statute is ambiguous on the precise issue, a court should defer to a reasonable interpretation of the statue by the agency responsible for administering it 1. Congress can decline to make basic issues, especially when its so technical that they can’t do it, or if it’s too politically contentious to decide, want agency to do it- but regardless of the reason, it’s allowed 2. If Congress has explicitly left a gap for the agency to fill, there is express delegation of authority to the agency to elucidate a specific provision of the statute by regulation. iv. Notes: Holding is in contrast to Rehnquist’s belief that policy decisions should be made by legislature not the courts 1. Very deferential. Dramatic contrast to the view of Rehnquist in Industrial Union 2. Where to put this – legislative delegation issue- but ultra vires? V.

The Doctrine of Ultra Vires a. Courts will strike down an agency action as utra vires (outside authority/beyond the power) if the agency goes outside or beyond its delegation of power. b. Congress could set broad policies in statutes, agencies could fill in details i. If agencies were doing it wrong, congress could clarify c. Direction: Court theoretically is working with Congress to prevent agencies from exercising a power congress didn’t intend for them to have d. Cure: Congress would have to amend the statute to cure ultra vires problem. i. Ex: Regulate weather “within the public interest” (vague) 1. Cure: If we want agency to be able to do something, amend statute to give it greater authority e. Differences from Non-Delegation: Under delegation- court isn’t letting agency do what it wants (cure with a substantive standard for an intelligible principle) i. Working against Congress- Congress wants them to do something, but courts are limiting agency’s authority f. Similar to Non-Delegation Doctrine: i. Working against Congress- Congress wants them to do something, but courts are limiting agency’s authority g. Example: Federal Hemline Commission i. Statute to regulate “hemlines:” Can they regulate dresses or skirts, or is it ultra vires if regulated pants

1. No idea as to purpose for statute- so don’t know if it should include pants 2. Meant for modesty or to keep women warm? ii. Cure Ultra Vires: Could change to say “hemline including length of pants and suits” iii. Cure Delegation Doctrine: Set an intelligible principle “regulate length of skirts to preserve modesty” (reason for regulation) VI.

State and Federal Delegation Doctrine: a. Federal judges are more respectful of federal agencies, but there is less effective oversight from the public and industry for state agencies i. Judges are more wary of allowing federal agencies to act- more direct impact on daily life (books in school, roads, zoning, etc.) ii. Less publication, less public awareness about state agencies’ purpose b. Boreali v. Axelrod (1987): Challenged NYC’s ban on smoking under the Public Health Law as too vague, restricted smoking, but not in bars – no scientific expertise i. Holding: NY Court of Appeals found it INVALID- no real reason why 1. Legislative function to balance competing health cost and privacy interests violated the state-level non-delegation doctrine- exemptions for bars and at small restaurants have no considerations of public health ii. (1) Agency constructed a regulatory scheme with too many exceptions with social concerns (carved out bars) (ULTRA VIRES?) iii. (2) Agency didn’t just fill in the details, but created its own broad regulatory regime from a blank slate (DELEGATION DOC?) iv. (3) Agency exceeded scope of authority delegated to it- acted in an area where legislature failed to come to an agreement- too controversial (ULTRA VIRES?) 1. Inferences from negative legislative action isn’t favored- can’t show what they intended based on what they didn’t do v. (4) No expertise was involved in the development of smoking regulation- just banned it (DELEGATION DOC?) 1. Regulations might involve more common-sense than scientific – don’t always need technical expertise vi. Rule: Difficulty in getting legislation passed shouldn’t be a reason to defer it to the agenciespeople’s elected representatives should resolve difficult problems

Topic 3: Delegation of Regulatory Adjudication (Adjudicative Power) I. Delegation of Adjudicative Power – 7th Amendment Issues a. Article III of Constitution suggests problems with adjudicative authority in agencies i. 6th Amendment: Criminal prosecutions get public trial by impartial jury ii. 7th Amendment: Suits at common law, the right of trial by jury shall be preserved iii. Statutes may be void for vagueness – this is the counterpart in adjudicative authority to the intelligible principle doctrine with legislative authority 1. Cure a void for vagueness issue: Promulgate more specific regulations that clarify the vague statute OR issue a “cease and desist” order, then that party then knows that he has violated the vague statute and is on notice that if he continues violating action, he will suffer the penalty b. Old Standard: Divide all agency proceedings involving adjudication as either involving private rights or public rights (Crowell) i. Historically allowed delegation of adjudicatory power to non-Article III entities if it was a (1) military court, (2) territorial court, or (3) tribunal for public rights (Northern Pipeline) 1. Public rights – Created by the statute - usually where the government is a party – delegation of adjudication passes constitutional muster (claims people had against the

government, ok to be heard only by non-Article III courts because under doctrine of sovereign immunity, didn’t have to allow them to be heard at all 2. Private rights – Individualized rights like contract law, but adjudication of private rights usually created constitutional problems c. New Standard: Look at whether delegation impairs either an individuals’ interest in having a claim adjudicated by an impartial Article III judge or the structural interest in having an independent judicial branch decide matters that have traditionally fallen within the core of Article III business. (Schor factors) while also keeping in mind due process considerations requiring an Article III court to play a role d. Crowell v. Benson: (1932): Longshoreman Workers Act gave federal tort-substitute for injuries i. Statute allowed the delegation of adjudicative power – courts had substantial reviewing power, and the Act didn’t expressly preclude review by Article III courts ii. Holding: Court UPHOLDS the delegation of adjudicative power over public rights to nonArticle III courts. Allowed judicial review of agency decisions for questions of law, but limited authority to review questions of fact. 1. Reasons: (1) efficacy of the plan depends upon finality of determinations of fact, (2) Plan provides for due process (notice, being heard, etc.), (3) And Article III courts still get the final determination of non-jurisdictional facts. iii. Rule: The doctrine of public rights vs. public rights used in Murray’s Lessee is no longer valid because there is no requirement that determination of fact in constitutional courts shall be made by judges (i.e. juries). 1. Looks to historic practice of courts of equity and admiralty – courts of equity allowed non-article III courts to take part in some of proceeding (like fact-finding) e. NRLB v. Jones & Laughlin: (1937) i. 7th amendment jury trial right would rarely attach to typical regulatory programs ii. Holding: 7th Amendment only applied to proceedings in the nature of a suit at common lawand National Labor Relations Act was unknown to common law f. Curtis v. Loether: (1974): Fair housing provision of Civil Rights Act – right to jury trial? i. Holding: Court found that 7th Amendment does apply to actions enforcing statutory rights if it creates legal rights and remedies. 1. Congress can determine the primary statutory legal rights and remedies, and who can enforce ii. Rule: 7A generally inapplicable in administrative proceedings where jury trials would be incompatible with whole concept of administrative adjudications and substantially interfere with agency’s role in statutory scheme g. Atlas Roofing v. OSHA: OSHA could give penalty upon finding of safety violation i. White: When “public rights” are being determined, congress can decide that a jury forum would be incompatible, can delegate adjudicative authority to agency 1. Ex: Government suing in its sovereign capacity to enforce a public right created by a statute within the power of congress to enact 2. Private rights are sill reviewable by the courts and can have a jury- K, tort, etc. ii. Holding: Violations requiring a civil penalty can be reviewable by the court system (like public rights are reviewable by Article III Court), but findings of fact made by the ALJ are conclusive if supported by evidence iii. Rule: The 7th Amendment does not prohibit Congress from assigning fact-finding function to administrative forum where jury would be incompatible – 7A is no bar to the creation of new rights or their enforcement outside of regular court of law 1. Right to a jury trial turns not solely on nature of issue but the forum in which it is to be resolved. iv. Notes: Court still refers to distinction between private and public rights but the distinction doesn’t work well – important to look at formalist/functionalist approach 1. When do they apply one approach over the other? No idea.

2. Formalism – Look at 4 corners of constitution/statute and don’t look beyond it to decide constitutionality with no weighing or balancing. When court applies formalist approach, it almost always strikes down. 3. Functionalist – Court looks beyond the words and look to balancing/reasonableness. Much broader and more forgiving review. h. Northern Pipeline v. Marathon: NP filed in Bankruptcy Court and sued Marathon on state-law K claim – Act allowed bankruptcy court to decide state K claim with limited Article III court review i. Holding: The Court INVALIDATED the bankruptcy courts’ acceptance of an unconstitutional assignment of adjudicatory power to decide state K claim outside of Article III courts. 1. It is a necessary but not sufficient condition that the gov’t must be a party for public rights – even though bankruptcy reorganization is a public right, state contract claims are private rights, so legislative agency can’t hear it a. Not an Article III judge, not a public right = strike it down 2. This is an extreme delegation of adjudicative powers to non-Article III judges – but plurality opinion, so close to succeeding! (Plurality, so read narrowly) ii. Rule: Congress can constitutionally assign cases of involving public rights to “legislative” courts for resolution, but not state-law private right, contractual causes of action 1. Bankruptcy courts have too much power. District courts can appoint a special master to conduct proceedings and make findings, but they are an adjunct. The bankruptcy judges aren’t mere adjuncts for federal district courts 2. Bankruptcy judges lacked the protections afforded to Article III judges (life tenure, secure pay), judicial power must be found in an independent judiciary – why aren’t agency officials considered “independent judiciaries” – in other cases talk about how they are assumed to have special unbiased judgments? a. See C&W Fish v. Fox and Winthrow v. Larkin iii. Approach: Plurality = Formalist: No balancing or weighing importance for delegating. 1. Rehnquist (concurrence): None of the cases has gone so far as to sanction the type of adjudication in which Marathon will be subjected against. 2. White (dissent): Functionalist approach. Constitutional values should be balanced against legislative responsibilities - the presence of judicial review and absence of high political interest insure that Bankruptcy Court wouldn’t weaken the judiciary. i.

Thomas v. Union Carbide: FIFRA permitted EPA to use one manufacturer’s data about effects of its product in considering another manufacturer’s later application. 1. Act provided for binding arbitration if parties couldn’t agree on the amount and limited, but didn’t preclude Article III review of arbitration proceeding ii. Holding: Thomas: Court UPHELD Act: Licensing provision creates the relationship between the data submitter and later registrant, and federal law supplies rule of decision. 1. Repudiates the Northern Pipeline public/private distinction definition iii. Rule: Congress can create a seemingly “private” right that is so closely integrated into a public regulatory scheme as to be a matter appropriate for agency resolution with limited involvement by the Article III judiciary iv. Approach: Functionalist: Focus on purpose served by statutory delegation of adjudicatory power and impact of delegation in “independent role of judiciary in constitutional scheme,” rather than doctrinaire reliance on formal categories. 1. Purpose of the legislation must be weighed against the intrusion of the right and when that balancing is done, there is little encroachment on Article III powers v. Factors Considered: (1) Manufacturers’ rights in their data were more fitting of public right with a public purpose (safeguard public health, instead of a purely private right- created by statute not common law), (2) Arbiter is selected by agreement of parties or appointed on a case-by-case basis by an independent federal agency (free from political influence), (3) Act does not preclude judicial review even though review was limited

j.

CFTC v. Schor: Trading through broker at CFTC-regulated firm, Shor filed administrative complaint under Commodity Exchange Act, Broker counterclaimed alleging violation of CEA i. Issue: Can Congress allow the Commission to adjudicate compulsory counterclaims? 1. Counterclaims were like those that non-article III bankruptcy judges were unable to adjudicate under Northern Pipeline ii. Holding: O’Connor: Yes. Court UPHELD Act– Commission can hear broker’s counterclaims without violating Article III iii. Rule: Constitutionality of a congressional delegation of adjudicative functions to a non-Article III body must be assessed by reference to purposes underlying Article III requirements– Courts should not rely solely on the language of the Constitution. 1. Functionalist: Want to (1) Structural: Protect the role of an independent judiciary and (2) Personal: Safeguard litigants’ right to have claims decided before judges who are free from potential influence by other branches a. Litigant waived his right to an independent judiciary by counterclaiming in the administrative hearing b. More efficient to have the permissible counterclaims adjudicated with the main claim, the actual claim heard is a very small part of judicial business and the decisions were subject to judicial review 2. Balance: (1) Whether the essential attributes of judicial power are reserved to Article III courts, (2) The extent to which the Non-Article III forum exercises range of jurisdiction/powers normally vested in Article III courts, (4) Origins and importance of right to be adjudicated, (5) Concerns that drove congress to depart from requirements of Article III. iv. Notes: Difference between Crowell: CFTC only deals with a “particularized area of the law, in contrast, the bankruptcy courts extended to broadly “all civil proceedings arising under cases related to cases under title 11 (more efficient to hear counterclaim here than new case) 1. CFTC orders are only enforceable by order of the district court 2. CFTC orders are reviewed under the same “weight of the evidence” standard under Crowell, not the “clearly erroneous” standard of Northern Pipeline 3. BUT is a private right, so look more closely- Congress has given only limited CFTC jurisdiction over narrow class of common law claims and unchallenged adjudicative function doesn’t create a S of P threat k. Granfinancera: Plaintiff’s 7A rights were violated by refusing a right to a jury trial for a claim to recover money fraudulently transferred by the bankrupt party i. Holding: Brennan: INVALIDATED refusal of jury: D had right to jury because the claim was legal not equitable – recovering money transfer was a private right. 1. Was a private right because it was neither a (1) public right nor a (2) private right so closely intertwined with a public regulatory program (like Union Carbide FIFRA case) ii. Rule: Test: Did congress, acting for a valid legislative purpose create a seemingly private right that is so closely integrated into a public regulatory scheme that it’s appropriate for agency resolution with limited involvement by Article III courts? Not here! Congress can only deny trials by jury in actions at law in cases where “public rights” are litigated iii. Approach: Functionalist – federal government doesn’t have to be a party for a case to revolve around “public rights” – diverged from Northern Pipeline holding that government as a party is necessary but not sufficient for a public right iv. Scalia (dissent): Public rights must be only between government and others 1. Advocated a formalist approach l. Stern v. Marshall (2011): Anna Nicole Smith case – bankruptcy issue i. Holding: Even though bankruptcy court had statutory authority to enter judgment on core counterclaim, it lacked the constitutional authority to do so under Article III. 1. Bankruptcy court wasn’t subject to the constitutional assurances of independence which would allow adjudication of debtor’s state law claim

ii. Rule: Bankruptcy court cannot enter final judgment on the counterclaim even though the statute attempts to distinguish between the core functions and non-core functions where this would purportedly be permissible iii. Notes: Question: How far can we go in terms of turning things which are handled by courts over to agencies? iv. Experts say – this is a relatively narrow holding in an unusual case because state law counterclaims are not frequent 1. But – fair reading of plurality and concurring opinion points to an extension of the Stern holding that would prevent Bankruptcy Court from entering final judgments on certain other claims 2. No clear limits have emerged because of these obscure Court opinions.

Topic 4: Congressional and Presidential Impact (Appointment & Removal) I.

Congressional & Presidential Regulatory Outcomes: Appointment & Removal a. Three Branches: Article I – Legislative, Article II – Executive, Article III – Judicial b. Article III, §2, cl. 2: “The President . . . shall nominate, and by and with the advice and consent of the senate, shall appoint officers of the US . . . but Congress may by law vest the appointment of such inferior officers as they think proper in the President alone, in the courts of law or in the heads of departments” i. Appointments clause doesn’t give Congress power to appoint “officers of US” c. Invalid Congressional control of administrative agencies: i. (1) Appointing administrative officials (like Buckley), (2) Having members of Congress serve on administrative bodies (like Metro Washington Airports), (3) controlling removal of administrative officials (like Bowsher), (4) by exercising a legislative veto over administrative action (like Chada), and (5) oversight power. d. Framers didn’t want Congress to have the power to create agencies and then fill them too

II.

Congressional Control Over Agency Action a. INS v. Chada (1983) Student from US, tried to get deported –Immigration & Naturalization Act said either house could veto AG’s order that Chada stay i. Deportation could be reinstated if a house of congress disagreed with INS ruling ii. Background: Congress wanted to delegate powers to president, but reluctant to give that power up, so gave executive power, but reserved the right to overrule executive decision (discussion of APA amendment to make legislative reviews generic) 1. Presentment: Article 1, §7: Present legislation to Pres. before adoption 2. Bicameralism: Article 1, §1&7: No law could take effect without the concurrence of the prescribed majority of the members of both houses iii. Holding: Burger: Legislative veto provision of Act allowing a one-house veto over executive orders was UNCONSTITUTIONAL – action wasn’t within any of the express constitutional exceptions authorizing one House to act, and as an exercise of legislative power, it was subject to Article I requirements 1. Appropriate body to deal with rights is the judiciary, not the legislature 2. House’s disapproval had the purpose and effect of altering the legal rights, duties and relations of persons outside the legislative branch iv. Approach: Formalist: Need stronger division between executive and legislative 1. Efficiency of government is not the goal- presumption of constitutionality 2. Need presentment and bicameralism if actions are “properly regarded as legislative in character and effect” v. Powell (concurring): This invalidates all legislative vetoes- frequently used historically – the Court should have decided the case on narrower grounds

vi. White (dissenting): Bad to take away legislative veto- congress has to make laws all very specific now, or leave all lawmaking to the executive and independent agencies 1. Legislative veto was a democratic tool used to keep government structure in check without overburdening congress – functionalist approach vii. Notes: Very broad opinion, usually courts shy away from a constitutional argument, or make a narrow holding – but here the decision impacted many statutes 1. Maybe SCOTUS wanted to discourage Congress from expanding this legislative veto into the APA 2. Many of these statutes still exist because people lack standing to challenge b. Bowsher v. Synar: OMB/CBO were to independently estimate federal deficit, and tell Comptroller General, who was to identify cuts needed deficit exceeded statutory limits 1. Congressional Budget Office (Article I), OMB (Article II) – wanted to insulate Comptroller from special interest groups due to the importance of their decisions so had budget cutting authority as executive, with the Comptroller removable by congress ii. Holding: Burger: INVALID- Congress encroached on the power of the executive by vesting executive functions in the Comptroller, who is answerable to Congress iii. Approach: Formalist - Congress wanted Comptroller as an officer of legislative branch, but tasked with executing the laws (executive) so Congress is intruding on executive function (like Chada) iv. Rule: Congress can’t reserve for itself the power of removal of an officer charged with execution of the laws except by impeachment 1. Congress can’t have control over the execution of the laws because that would essentially give Congress control over execution of laws through veto power by removing officer who didn’t execute the laws correctly v. White (dissent): No actual threat to separation of powers (functionalist approach) 1. Congress can’t reserve an executive role for itself or its agencies, but removal of Comptroller isn’t a Congressional execution of the laws- the statute articulated the limited job of the agency vi. Blackmun (dissent): If Congress attempts to remove him improperly, then it would be S of P issue, but should be allowed to have Comptroller until then- functionalist vii. Notes: Congress can only act through legislating – can’t do indirectly what they can’t do directly (Chada applies to independent agencies) c. Buckley v. Valeo: Federal Election Act tried to set campaign finance reform i. Holding: Court found statue authorizing Congress to appoint officials to serve on Federal Election Commission an INVALID violation of Article II 1. These congressional leaders weren’t within the “courts of Law or “heads of Department” that the Constitution said Congress could appoint ii. Rule: Congress CANNOT appoint an officer of the US besides those officers authorized by Article I to assist in the legislative process d. Metropolitan Washington Airports v. Citizens (1991): Federal airports transferred to Commission operated by VA, MD and DC, Act gave Review Board right to veto Commission’s decisions, but Review Board as made up of Congressmen i. Holding: Stevens: Court found Act INVALID because Congress can’t vest in itself agents with executive power 1. If they were being executive, can’t do that because Congress isn’t executive AND if they were being legislative, can’t do that because violates Article 1 Section 7 (bicameralism & presentment) ii. On Remand: Didn’t put Congressmen on the Review Board, but put individuals who are registered voters not in DC, MD or VA, and are on lists of candidates supplied to Commission by House and Senate 1. DC circuit struck down and SCOTUS refused to hear it again

III.

Presidential Control Over Agency Actions: Appointment a. Article II allows president to appoint “Officers of the US” with advice and consent of senate i. Congress can invest power to appoint “Inferior officers” in the President, Courts of law, or heads of departments” b. Morrison v. Olson (1988) Superfund law, DOJ’s OGC may have given false testimony, Morrison appointed as special investigatory counsel, served subpoenas i. If certain criteria are met, AG must call judges of the Special Court who must appoint an independent counsel, who could be removed for “good cause/disability” ii. Holding: Rehnquist: Since the Independent Counsel was an inferior officer, the inter-branch appointment was permissible unless it impaired the ability of the Executive Branch to perform its functions - “good cause” removal provisions don’t impermissibly undermine or impede on the executive branch functioning 1. Does NOT disrupt the proper balance between the branches iii. Approach: Functionalist- Allow appointment of prosecutors in judiciary contempt cases, (policy reasons) iv. Test for finding whether legislation is an impermissible intrusion on S of P: (Morrison v. Olson) 1. Does it limit his ability to “take care” and faithfully execute the laws? 2. Does it impede his constitutional duties? 3. Does he still have effective control over the executive branch? v. RULE: No violation of the separation of powers by increasing the power of one branch at the expense of another. Grounds for finding that she is an inferior, not a principle officer, so no violation of the appointments clause (is she subordinate/independent, scope of jurisdiction, extent of duties) 1. Ability to remove someone at will isn’t imperative to carrying out executive functions (different than Weiner and Buckley principle) 2. Subject to removal by a higher executive official (AG), only performed limited duties (only one task), no policy making duty 3. Court can terminate to be used narrowly when task is virtually completed (functional) vi. Scalia (dissenting): Law has to be struck down because (1) Criminal prosecution is an exercise of "purely executive power" as guaranteed in the Constitution and, (2) the law deprived the president of "exclusive control" of that power (Congress can’t qualify by adding limits to that exclusive control) 1. Two checks against abuses of power, can impeach a person who impedes investigations, and political check, remove president at next election vii. Notes: Should have independent counsel investigating executive wrongdoing 1. Most people think it falls under Myers, not Humphreys, but Rehnquist thinks its more like Humphreys, but establishes a different test c. Freytag v. Commissioner of IRS (1991): Whether Tax Court (Article I, leg) qualifies as a department or a court of law (can special trial judges be appointed by the chief judge?) i. Rule: Tax Court judges are inferior officers, BUT Department is only a division of the executive branch - But Tax courts are courts of law for appointments purposes 1. Don’t want to let the power to appoint be a way to decrease public accountability ii. Holding: Blackmun: Allowed even though Tax Courts are within the legislature (Article I), court of law, because the court makes adjudicative decisions 1. BUT then how do the freestanding or independent agencies fit? 2. Limiting definition of “Department” 3. “Inferior Officers” includes special trial judges on US tax court – president can appoint them if Congress vests power in President instead of “Courts of Law” iii. Free Enterprise- Adopted reasoning of “self-contained entities in executive “branch” where class of duties are allotted to a particular person

d. Edmund v. US (1997): Military judges have neither limited jurisdiction nor limited tenure – Court found them to be “inferior officers” (other factors for determining inferior than Morrison) i. No power to issue final decisions unless permitted by superiors, who were appointed ii. Inferior/Superior: Inferior if you have a superior/have a relationship with a higher ranking officer below the President, have work which is directly supervised at some level by a person who is appointed by the president and confirmed by the senate iii. Officers or Not: Whether they exercise significant authority over the laws of the US (Case) e. Misretta v. United States: President appointed members to Sentencing Commission, approved by senate, 3 of 7 are federal judges – attorney general is non-voting member i. Holding: Blackmun: Court UPHELD Sentencing Commission act. The vesting of nonadjudicatory activities in the judicial branch DOES NOT violate S of P ii. Approach: Functionalist: Separation of Powers not violated with an independent commission in judicial branch – flexible, and practical approach used here 1. Commission is not controlled or accountable to the judicial branch, doesn’t add to judicial branch powers, Commission has no judicial authority 2. Delegation doctrine: had guidelines and protocols, so clear about what congress wanted- delegation doctrine was probably not violated 3. Not too political (which would be executive), not beyond their expertise (not deciding foreign policy) 4. Executive and legislative branches voted for it (ok here, but argument didn’t work in Chada or Bowsher) iii. Test: Does the extrajudicial assignment undermine the integrity of the judicial branch? NoThe commission is only focusing on the development of rules, not sharing judicial powers in decision-making iv. Scalia (dissent)- Constitution not a suggestion, but a structure to be followed closely f. Intercollegiate Broadcasting v. Copyright (2012): Copyright Royalty Judges issued a final determination adopting royalty structure i. Holding: Court INVALIDATED Act for appointments clause violation. CRJ’s were principal officers who had to be appointed by president and confirmed by the Senate 1. Can’t have principal officers who are able to be removed by Librarian of Congress, so remedy by changing Judges to be “inferior officers” ii. Inferior or Superior? Have little substantive oversight, librarian can only remove for cause, rate determinations weren’t reviewed or corrected by any other officer within the executive branch – so they were probably superior officers – but changed status 1. Ratemaking has huge control over the industry, so need to make sure constitutional appointment and supervision of authority IV.

Presidential Control Over Agency Actions: Removal a. Court allowed “for cause” removal power whether or not person was purely executive or quasijudicial/legislative – turned on impediment to executive functioning in Morrison i. Court now takes a functional approach in reviewing congressional restrictions on President’s removal of officials (1) What type of function do they exercise? (2) Are they a principal or inferior officer? (Morrison)) b. Myers v. US: Postmaster General fired Postmaster of Oregon before end of 4-year term i. Postmaster and cabinet members serve under a Tenure of Office Act ii. Holding: Taft: Court UPHELD presidential authority to remove postmaster even though his statutory term was longer (Postmaster is purely executive) iii. Rule: The power to remove inferior executive offers, like that for superior executive officers, is incident of the power to appoint them, and is in its nature an executive power 1. Congress can’t participate in the exercise of executive power iv. Holding: President has exclusive power to remove executive branch officials whose functions are purely executive- doesn’t need approval of Senate or other legislative body 1. (Dissent): Prescribing conditions under which an officer can be removed is a

legislative duty 2. (Dissent): Myers was an inferior officer, so should follow other rules about discharging him c. Humphreys Executor: FDR tried to remove FTC commissioner before his tenure was up 1. FTC commissioner made investigations and reports to Congress, and proposed judicial decrees for the courts, so both quasi-judicial and legislative ii. Holding: Court INVALIDATED removal. Congressional intent was to create body independent of executive authority, except in selection – Commissioner was quasi-x 1. Congress can make place limitations on heads of independent agencies to dismissal for things like “for cause” to insulate from political pressure 2. Coercive power of removal threatens independence of commission, plus Commission had a very limited role, limited power iii. RULE: If the officer is quasi-legislative or quasi-judicial, and not purely executive, then separation of powers prevents placing an unlimited power of removal in Pres. d. Weiner Case: Since president couldn’t dictate the outcome directly, he couldn’t do so indirectly by having the power over their firing i. Holding: Commissioner who was wrongfully removed could be sued for back pay 1. Didn’t decide if he could get job back –even if they get back pay, Pres. could violate and fire ii. Rule: No express provision that someone could be fired without cause, but Court found it implied in statue because the agency exercised quasi-adjudicative powers e. Sierra Club v. Costle (1981): EPA issued new sulfur emission standards, lower standard would have been hard for economic stability (opposed by Senator Byrd and Pres. Carter) 1. Proposed draft rules, written comments, documents and written responses from interagency review process during rulemaking should be in the docket ii. Holding: It WAS NOT necessary for due process to docket a face-to-face policy session between EPA officials and the President after the comment period because the rule wasn’t based on any information arising from that meeting. 1. Don’t need to document every single rulemaking session 2. How is this an appointment/removal power issue? Isn’t it due process? f. Portland Audubon v. Endangered Species Committee (1993): Litigation about timber sales in the habitat of northern spotted owl: ESA’s 7 member committee can authorize exemptions from Act during on-the-record hearing before ALJ and report by Sec of DOI 1. Section 557(d) prohibits ex parte communication between an agency decisionmaking member, and an “interested person” outside the agency 2. Numerous “off the record” meetings between white house and agency ii. Holding: The committee’s proceedings are subject to the ex parte communications ban, and POTUS is an “interested person” under the Act, so his communications are covered by the provision 1. The Committee’s decisions are “quasi-judicial” so are adjudications under the section - even though President appointed commission members, can’t dictate an outcome iii. Congress hasn’t invaded any legitimate constitutional power of President in forbidding him to attempt to influence a Committee decision – if President could influence decision, would destroy the integrity of all federal agency determinations iv. Rule: When an agency performs a quasi-judicial/legislative function, its independence must be protected 1. President is not “an agency” and if he was, his actions would be reviewable by the judiciary under an abuse of discretion standard g. Free Enterprise Board v. PCAOB (2010): PCAOB members can be removed for “good cause” by SEC Commission, and Commission can be removed by pres. for inefficiency, duty neglect, malfeasance (multilevel protection from removal for PCAOB members)

i. Holding: Roberts: Court INVALIDATED Act, but allowed Board to continue its duties – the removal process was contrary to Article II’s vesting clause – Act denied the President the right to remove inferior officers directly 1. Decision of whether “good cause” exists isn’t with the president, but in the Commissioners, who aren’t under direct Presidential control ii. Approach: Formalist: Diffusion of powers is a diffusion of accountability 1. Board members are inferior officers whose appointment congress may permissibly vest in a “Head of Department,” but President can’t here hold his subordinates accountable, so his execution of the laws is impaired 2. Rejects Freitag – doesn’t worry about “Department” definition distinction iii. Bryer (dissent): No S of P issues- doesn’t interfere with President’s executive power V.

Presidential Direction of Regulatory Outcomes a. Delegation: Statutes usually delegate decisional authority to a named federal official (Cabinet Secretary, Administrator, head of a Commission, etc.) instead of the president i. Stages of Regulatory Activity: (1) Agenda-setting, (2) Negotiation of Standards, (3) Implementation, (4) Monitoring, (5) Enforcement ii. Methods of Influence: Clinton was able to influence/dictate the content of agency rulemakings and policy making (formal executive memoranda to executive agency heads, Bush had “signing statements” when signing a statute into law 1. Influence by fear of his removal power, and his help in budgetary maters 2. Courts don’t pay attention to signing statements- little increase in authority re Congress, but most authority still comes from his saying how statutes should be interpreted and which ones are on his priority lists iii. Increasing Politicization: Number of political appointees not stable, varied across agencies and time with how close agency’s policy views were perceived to be aligned with the Agency’s 1. Issues with loyalty, trust and competence in agencies between career and political appointees - need intra-agency checks and balances- make sure people on the inside have long-term knowledge and no conflicts of interest like political’s might have (close ties to industry after administration’s end) iv. Obama Administration: Disavowed signing statements, but then used, appointed policy special advisors/czars 1. But no real formal authority- can’t control budgets, hire or fire or promulgate regulations – just powerful people influencing others 2. Czars make cabinet secretaries middle managers – disrupt executive power flow (plus Czars have no accountability to Congress/voters) b. Legal Basis for Presidential Directory: i. Little Judicial Review: President’s directory authority has had little judicial review 1. Marbury v. Madison: President should use his discretion, accountable to his country, political character, and his conscience a. No review of executive officers except by President 2. Myers v. US: Even presidential power to remove doesn’t equate with power to direct particular regulatory outcomes 3. Youngstown: ii. “Take Care” Clause: President has authority to execute laws (even those that mention Secretary as head) because President has power to execute all federal laws 1. Need a strong unitary executive to ensure effective governance iii. General Deference: Deference among executive officials to presidents opinion –need presidential oversight/ directory to make regulation democratically accountable 1. Maybe president has more oversight over everything- but can’t dictate outcomes? Oversight as different from accountability 2. Accountability vests ultimate decisional authority in a person who is elected (President is most accountable)

VI.

3. Popular control keeps check on unitary executive from becoming a dictatorship – don’t want public power to be seized by private interests Law & Economic Discussion a. Libertarian Paternalism- Making it harder to do something, but not prohibiting it i. Behavioral regulatory approach that manipulates how choices are framed to consumers (Volokh Law Website- says L.P. will fail) 1. Ex: Soda size limitations, but can buy as many as you want ii. Way of presenting alternatives - Nudge principle 1. Ex: check box to sign up or check box to opt out of Retirement Plan iii. Change is designed to benefit your own welfare b. Behavioral Economics: Econ & psychology shows that people are not always rational – risk adverse, ex: lottery tickets c. Veblen Goods: Theory of the Leisure Class (price goes up, you buy more- status) d. Banzhaf: Favors government intervention in some circumstances

Topic 5: Other Legislative & Administrative Controls I. Congressional Direction: Appropriations & Spending a. Legislative Influence on Agencies: i. Standing Committees: Oversight, hearings are designed to increase agency pressure, threats of investigation ii. Appropriations/Funding: Determine agency funding, not only x amount, but dictate what to spend it in (limitations and riders) 1. Legislative bodies write laws which impact executive agencies a. Can put riders in appropriations bills (“and no portion of this appropriation shall be used for ___”) 2. Funds can be authorized in the legislation, but then have to be appropriated 3. Legality: No SC case has addressed whether appropriations directing agencies to act or not unconstitutionally infringes upon president’s authority 4. Limitation rider- says that agency can’t spend any of the appropriated money to engage in a specific activity a. Used to prohibit finalization of particular proposed rules b. Prohibits the development of regulations on particular statues or issues c. Limitation riders help congressional majorities more under divided government than under a unified government 5. Allowed as “spending retrenchments,” don’t require orders from House Rules Committee to reach the floor, less Presidential ability to remove individual riders 6. Agencies can work around appropriations limitation – might issue a guidance document instead of a regulation or another agency with overlapping statutory authority might take the responsibility 7. Substantive riders- Impel (or impede) regulatory action (“can’t use this to pay for a salary if that person will prohibit the enforcement of x”) 8. Presidential “impoundment” or refusal to spend money for certain activities 9. Programmatic impoundments- if money no longer needed, no mandate to spend it iii. Congressional Review Act: iv. Agency Proceedings: Legislature can participate in agency proceedings 1. Rulemaking: No limits on Congressional ability to submit proposals for rulemaking or comments on existing rulemaking proceedings 2. Adjudicatory: Congress can initiate and participate in many agency proceedings (but some limitations) b. Executive Influence on Dependent Agencies: i. Califano from HEW (not HHS): Hard to get agencies to operate 1. Political’s or career people might be resistant to change

ii. Harder to inject new ideas into agencies – hard to implement new strategies because of bureaucratic inertia (but more stability?) c. Executive Influence on Independent Agencies: i. Harder to influence an independent agency, but possible. ii. Budget Control: OMB of executive branch controls agency budget requests iii. Litigation: Question of legal defenses in defense of an Agency is made by DOJ/ executive branch, not by the agency (including settlement agreements) iv. FOIA: Information requests go through executive branch agency – may influence response v. Signing Statements: Used by president when legislation passed, often in relation to agencies (not a veto, but not an endorsement) vi. Impoundment: President can impound various funds vii. Czars: Ability to appoint czar has persuasive power, but how does that impact agencies? viii. Limitations: Limits on removal power - FTC Chairman: Paul Randixon: President asked him to leave for new administration, but refused to leave office 1. Can’t fire Commissioners if the have a term limit EXCEPT for cause 2. Difficult to determine what is “cause” and how established 3. Most employees are protected by civil service b. Other Influences on Agencies: i. Industry - if regulatory agency deals with a small industry/smaller interest groups 1. FDA has close ties with drug companies/ FCC and Broadcasters ii. Media has large influence on agencies – different today (blog/twitter) 1. Peace symbol, front page of Washington Post, trademark case shut down application iii. Public Interest Organizations also influence

Topic 6: Methods of Obtaining Judicial Review (Damages) II. Methods of Obtaining Judicial Review, Damages Actions, Suing States a. Specific Relief: Injunctions, Declarations & the Prerogative Writs i. Banzhaf: Favors more expansive judicial review, narrower reading of doctrines intended to prevent judicial review (mootness, standing, etc.) ii. More review creates more agency expense, harms public interests, adds to delay of agency actions, weaken agency action b. Historical Judicial Review: i. Judicial Review in France: Had to bring a common-law cause of action (strong presumption against judicial review) 1. Agencies treated like people – charge with conversion for tax issues c. Means of Getting Judicial Review of Agency Decisions: i. APA is not a source of jurisdiction, then frame action (not like a common law) but within boundaries of APA 1. But 28 USC §1331 – federal question statute – provides jurisdiction for suits in federal district courts raising questions under federal law 2. Or under the specific statute – details review by a court of appeals (usually) a. But what if the organic statute doesn’t make its statutory jurisdiction exclusive – can they use either that statute or 1331 or something else? b. What about if they’re raising a claim not exactly within the provision allowing judicial review? i. Might allow suits failure to act under that specific portion ii. Issues: Sometimes not clear which court to go to because statute may not be as clear about where to review (if file in wrong court, issues with Statute of Limitations if refilling) iii. Specific Statutory Review: A statute sets process for judicial review 1. As long as your situation falls within the statutory requirements, you get the review

2. Ex: FTC says “person ordered to cease and desist from unfair trade practice may seek judicial review of a final order by filing in US court of appeals” 3. Normally in Court of Appeals – appeal from an agency decisions is similar to an appeal from lower court (petition for review) iv. General Statutory Review: 1. Ex: Same FTC, but want to appeal something that isn’t a “final” order – doesn’t fit in specific statutory framework a. TRAC: Where a statute says final action reviewed in court of appeals, bring all actions in court of appeals because otherwise might affect future statutory powers to review decisions {hard to know what fits in this rule} 2. Normally but NOT always in District Court – need jurisdiction a. Still have to find jurisdiction and a cause of action v. Non-Statutory Review: 1. Federal courts only have jurisdiction given to them by statute (§1337: commerce, §1342: deprivation of constitutional rights by state officials, or §1331: federal question, §133x: diversity), so have to give the courts that statutory jurisdiction 2. Have to use historical writs, etc. because no particular statue a. Ex: Equitable maxims 3. Issues: Injunction, writs are remedies, not causes of action a. Sometimes in district court, or force agency to go to court d. Prerogative Writs: Originate in British law (common law), equitable rights with equitable relief i. Most equitable rights or actions come with equitable maxims 1. May have a legal right, but if relief you want violates an equitable action, can be denied remedy (“Equity won’t reward dirty hands, etc.”) ii. Certiorari: Order by a higher court directing a lower court to send the record in a given case for review – like SCOTUS petitions iii. Habeas Corpus: Challenging validity of holding person; demands that a prisoner be taken before the court to determine whether there is lawful authority to detain the person iv. Mandamus: Remedy/Order issued by higher court used to compel or to direct a lower court or a government officer to perform ministerial/non-discretionary duty (ex: license) 1. But limited, because few governmental duties are purely non-discretionary 2. If an official goes beyond his discretion: Can still seek a remedy in the nature of mandamus to compel them to stay within ‘zone of discretion’ a. 28 U.S.C. §1361: “District courts shall have original jurisdiction of any action in the nature of mandamus to compel an officer or of the US or any agency thereof to perform a duty owed to the P” b. Ex: 20 years of fireman service, right to retire and get pension i. Pension Board said no, court declined to consider the order because would “Let a Public Mischief” which was an equitable doctrine v. Prohibition: Directing a subordinate to stop doing something the law prohibits; vi. Procedendo: Sends a case from an appellate court to a lower court with an order to proceed to judgment; vii. Quo Warranto: Requiring a person to show by what authority they have to hold office/exercise a power; viii. In Re: An action brought on behalf of something which is not properly able to represent itself (historically wives had no legal capacity so, sued on their behalf) 1. Bribes MD Governor/VP: Guilty, but not required to give $ back a. GW Students brought suit: Agent and principle- if someone bribes an agent, then the principle has a cause of action against the principle to recover the funds b. Qui Tam- Can recover from an injury for a person who is dispossessed and not able to bring the action

ix. Writs all impact agency behavior and policy (unlike damages which is just $$) 1. Not really a suit against the sovereign because sovereign didn’t order its agents to violate the law (certain relief is codified- determines what rights you can seek) e. Damages: Good option- “sue the bastards” if you have a tort claim – less issue with standing and cause of action because more explicit 1. Sue agency or the individual – more likely to have impact on agency action 2. Contingency fee- so makes it easier for poor people to sue 3. If agency action injured a private party, could sue in tort or contract for damages ii. Tort Action: Sue agency or the individual – more likely to have impact on agency action 1. Contingency fee- so makes it easier for poor people to sue 2. No need for new common law theory, don’t have to worry about standing, because you got tort-ed AND it’s a good way to deter government repeating mistakes - $$ 3. Banzhaf loves tort actions – “most effective way of getting judicial review of agency actions because potential for assessing real and substantial damages” (sometimes punitive) both against governmental official and governmental unit 4. Limitations: Sometimes agency did wrong, but didn’t commit a tort, but strong public interest in redressing wrong-doings to citizens a. (1) P must have suffered significant harm of torts-damages injury type i. Not like Mass v. EPA damage – injury-in-fact b. (2) Injury must be a TORT (not just the agency violated procedure) 5. Issues: State or Federal? Action against a governmental unit (state or municipality) or an individual (cop to AG)? Cause of action constitutional or common law? Is the person being sued immunity from suit (qualified or absolute)? How to overcome? a. If tort claims are allowed to get too broad, it might “dampen the artier” of gov’t officials who will no longer have the courage of convictions to carry out their official duty – or nobody would run for those positions 6. Cures: (1) Give immunity (qualified or absolute) or (2) Allow them to sue government entity but NOT the individual (shield employees) a. Scales of immunity – maybe need immunity because deal with more people so more potentially aggrieved by your actions – things you do are more likely to be harmful/controversial to average person (big decisions about spending allocations, disability claims, etc.) b. Give absolute immunity because if point of immunity is to prevent wasting official’s time with too many suits, discovery may be too intrusive c. Don’t want people just putting causes of action in the complaint and letting them sue III.

Damages actions against government officials ARE VALID when: i. Looking at the existence and nature of enforcement mechanisms when trying to obtain damages for statutory AND constitutional violations b. (1) Constitutional Violations are Committed in the Course of Their Duties i. Consider “constitution” to be a statute giving certain causes of action 1. Court won’t imply when there is an alternative effective remedy, court perceives a special factor counseling hesitation or if it is difficult to define a workable cause of action 2. Federal Tort Claims Act (FTCA) immunity form personal liability doesn’t extend to constitutional wrongs ii. Historical: Used to be immune if you acted “in good faith or in reasonable belief” but that didn’t work because both subjective (good faith) and objective (reasonable belief) iii. Now: “Knew or should have known” that actions violated the constitution, then enjoys no immunity (objective)

iv. State Officials: Statutory action for constitutional violation damages: 42 USC §1983: Persons acting under color of state law- meant to create a dividing line between suing feds (Bivens) and suing state (§1983) 1. States/state agencies can’t be sued under this statute 2. Judges get absolute immunity, others get qualified immunity v. Damages claims against state/local officials in individual capacity are subject to the same official immunity defenses available to federal officials in Bivens actions vi. Statute can be used to seek damages against government entities below the level of the state itself – entities can’t assert immunity defenses, but limited liability for their employees’ actions vii. Bivens Actions: Action can’t be brought against an agency or a top official just because of their supervisory position (applies to federal officials who violate US constitution) 1. Ex: Applied to members of Congress- even though blatantly firing someone because of their gender, can’t be sued (but can under equal protection) c. (2) State and Local Officials Commit Certain Federal Statutory Violations i. Common Law: Originally, no immunity- tax collector would be sued, and he would have to pay (not the government) 1. But then judges didn’t want to abide by that, so created absolute immunity for them – now applies to any employee exercising discretion ii. Law Enforcement: Police are largest single gov’t agency, wrong decisions are more likely to create harm 1. Lower level officers have no immunity from common law suits because they do not “exercise discretion,” but higher officials do have immunity (differentiate by rank) iii. Federal Officials: Absolute immunity, because always considered to be exercising discretion 1. Suing for “wrongfulness” under CL tort, have issue with absolute immunity SO: Bivens Action- Some torts arise out of statutes – court implies new cause of action for statutes d. Suing States to Enforce Regulatory Obligations i. Some statutes require state agencies to conform to same regulations as private parties 1. Sometimes federal courts allow enforcement of a federal obligation imposed on a state actor by suing the responsible state official seeking an injunction that the official conform his conduct to federal law (Ex Parte Young- pg. 1205) 2. Congress can require that states consent to suit in order to get some benefit that the Federal government doesn’t already give them ii. As long as regulation is not “commandeering” the process of state government, and Congress makes sufficiently clear that states are to be included in the class of those regulated, SCOTUS hasn’t brought up 10th amendment claims (“Powers not granted to the federal government nor prohibited to States are reserved for the states and the people”) iii. Can impose substantive obligations on states, but can’t create legal enforcement of those obligations 1. SCOTUS has held that states’ sovereign immunity from suit without their consent is embodied in the Constitution – Article I doesn’t give Congress the power to abrogate this immunity iv. States can’t assert sovereign immunity in actions by the US (if US sues a state) e. Suing Cities/Municipalities to Enforce Regulatory Obligations i. Cities as entities can be sued for constitutional torts under §1983: Applies to “persons operating under color of . . .” ii. City responsible for respondeat superior- if the agent is liable, then ordinarily the employer becomes liable – but not the way it works under §1983- no automatic respondeat superior 1. Entity liable only if the official was acting “in accordance with the policy or practice of the municipality” (so have to show that it’s the policy/practice of the city – like certain methods are involved in training, or encouraged) iii. Municipalities have immunity? NO (but not liable for punitive damages)

1. Maybe an individual officer would be off the hook, but not the city f. Suing Federal Officers to Enforce Regulatory Obligations i. Federal government has no sovereign immunity under the FTCA ii. (1) Diplomats, foreign nationals (look at statute) iii. (2) Some intentional torts (but not all- decided by statute) iv. (3) Torts from which gov’t were exempted (rule for law enforcement officer) 1. People who have the power to arrest and detain v. (4) Discretionary Function Exemption (excepts the government if what’s involved is a discretionary exception) 1. No good clear test of what that means- but maybe distinction between “governmental and proprietary” (too simplistic- not used anymore) a. If gov’t is engaged in an activity normally done by private groups (hospitals), then can be held liable 2. Whether it required “governmental discretion” a. Ex: Plane hijacking, Waco, TX situation (Reno) g. Process for Interim Relief: i. §705 of the APA: Allows reviewing court, on application for certiorari/ appeal/writ, to issue a process for postponing date of an agency action or to preserve statutes or rights pending conclusion of review proceedings ii. Power to issue a “stay” doesn’t need statutory authorization – part of traditional tools for the administration of justice iii. Considerations for an application for a Stay: (VA Jobbers) Petitioner must: 1. (1) Strong showing that moving party is likely to prevail on merits of its appeal a. Without such a substantial indication of probable success, there would be no justification for the court's intrusion into the ordinary processes of administration and judicial review. 2. (2) Without such relief, moving party will be irreparably injured. a. Mere injuries, however substantial, in terms of money, time and energy necessarily expended in the absence of a stay, are not enough. If compensatory relief will be available, weighs heavily against a claim of irreparable harm. 3. (3) The issuance of a stay will not substantially harm other parties interested in the proceedings. a. Determine whether, despite showings of probable success and irreparable injury on the part of petitioner, the issuance of a stay would have a serious adverse effect on other interested persons. What qualifies as the equitable judgment that a stay represents? 4. (4) Show where lies the public interest

Topic 7: Standing to Invoke Judicial Review I. Standing to Invoke Judicial Review a. Complicated because often used as a cover if judges don’t want to deal with a substantive issue (like ripeness, mootness), judicial deference to legislature for political decisions b. Standing: Justice Douglas: “Generalizations about standing to sue are largely worthless” 1. Standing is a jurisdictional requirement – so challenge can be raised at any time 2. Constitutional – courts can only hear Cases & Controversies 3. Prudential – can be altered or eliminated by statute, judicially created ii. Historical progression of standing - Change in 20th century to allow more individual claims for judicial protection from gov’t action without a common law injury (and courts agreed) 1. More difficult when litigants aren’t impacted differently than the rest of population (Flast v. Cohen tax case), environmental regulation where many groups had a stake

iii. (1) Invasion of Legally Protected Right 1. Only people who were ordered by government to act who could challenge iv. (2) Expansion of government benefits 1. Expansion of standing with Medicaid, GI bill, etc. v. (3) Protecting the general public interest/welfare 1. Clean air, safe cars, etc.- those who clearly have standing were those who were told to do something, but more issues about those not directly regulated vi. (4) Incentive to Third Parties 1. Tax benefits to encourage hospitals to help poor people vii. Shows shifting opinion about role of judiciary in the regulatory process 1. Normally, in private rights model, who could seek relief was not recognized as distinct from whether the complaint stated a cause of action viii. J. Scalia argued that access to the courts should be more difficult for regulatory beneficiaries than for members of the regulated communities c. Allen v. Wright: Asked SCOTUS to invalidate government action authorized by the normal democratic political process i. Are the judiciary, legislature and executive branch in the same position when individual is attempting to force agency to comply with their authorizing statute? II. Historical Standing  Standing under the APA a. Alexander Sprunt v. US: Challenge to the Interstate Commerce Act- Commission to set “just and reasonable” rates for RR carriages i. SC didn’t recognize standing as an inquiry separate from case on the merits ii. Their organization wasn’t harmed by higher rates, can’t be harmed from government creating competition – NO STANDING iii. No legally protected right to be free from competition b. Tennessee Electric v. TVA: Private utility claimed creating TVA exceeded Congress’ Article I power i. SCOTUS: Neither statute or constitution gave companies right to be protected from competition c. At this point, got rid of the “legal right” test, and began the “aggrieved person” standing d. APA 5 USC §702: “A person suffering a legal wrong because of agency action or adversely affected or aggrieved by agency action within the meaning of a relevant statute is entitled to judicial review thereof” i. Standing challenges are really statutory challenges to how agencies exercise their regulatory authority ii. APA Standing: Doesn’t actually mention “standing” so maybe it just codified existing standing law requiring a legal interest unless statute empowers aggrieved people to sue 1. OR APA §702 confers a right of review to anyone adversely affected in fact by agency actions or aggrieved within the meaning of any statute e. FCC v. Sanders: Communications Act of 1934: Radio station sued because of issuance of a FCC license to a competitor i. Even though no legal right to be protected from competition, SC allowed it because statute gave standing to “any other person aggrieved” by agency action ii. SCOTUS found congressional granting of standing to that class – best people to vindicate the public interest were the public themselves f. Scripps-Howard Radio v. FCC: Communications Act: Purpose of Act was to protect public interest, private litigants have standing only as representatives of the public interest

i. SO “person aggrieved” statutory grant creates a “private attorney general” because can sue as a private individual, ONLY IF you represent the public interest (sue because grant of license damages public interest) g. Associated Industries of NY v. Ickes: i. Rule: Can’t give standing to bring suit to determine the constitutionality of a statute if there is no justiciable controversy BUT Congress can give Attorney General OR another nonofficial public officer statutory right to bring suit to prevent an officer from violating his statutory powers (therefore is an actual controversy) 1. Court found plaintiff’s DO HAVE STANDING ii. Congress can’t give standing to someone who doesn’t meet the Article III case or controversy – but can designate them to give people the right to sue on behalf of the public interest (private attorney general) iii. Notes: Sometimes Congress creates private AG’s in citizen suit provisions – so more people can bring actions- provides with incentives (attorneys fees, treble fees) 1. BUT encourages people to litigate for small technicalities which might not be in the public interest h. Church of Christ v. FCC: Challenge by public representatives to a license renewal of a stationalleged radio had racial and religious biases – wouldn’t play MLK (DC Circuit) i. Holding: Burger: FCC had to allow standing to some appellants – don’t need direct, economic injury from the administrative action –– DO HAVE STANDING 1. Broadened category of injury (no longer economic), was a less tangible injury 2. Don’t need a “legally protected interest” to intervene anymore – intervention should be allowed whenever the person seeking intervention would satisfy constitutional standing requirements ii. Rule: The point of standing is practical and functional- only those with a genuine interest in the proceeding can participate, thus the radio listeners have genuine interest in licensing iii. Consumers are best indicators of public interest, but Commission doesn’t have to give everyone standing, can set criteria to determine who qualifies as a “listening community” i. Agency v. Constitutional Standing: Not an Article III case originally, so no constitutional standing requirement – issue is whether they could intervene in proceeding before the agency i. Sometimes associations can be the best representatives of public interest ii. Church of Christ was an existing procedure – interest of how well the broadcast was serving their viewers was central to FCC’s purpose, people seeking to intervene are clearly people protected by the statute j. Associational Standing: Still has to meet injury in fact, causation, redressability to bring suit in a federal court, but need to meet the three requirements PLUS i. (1) At least one member of the organization must have independent standing ii. (2) Interest that association seeks to protect is germane to the organization’s purpose iii. (3) Lawsuit doesn’t require participation by individual members – organization is capable of representing the members k. Scenic Hudson Preservation Conference: NYC blackout power crisis, proposal to build a large reservoir and pump water up at night, and release it during the day i. Hudson River Fishermen- needed to prove injury in fact because most other landowners were counties or factories ii. Holding: UPHELD standing, and expanded the Church of Christ standing requirement 1. Should be granted standing because (1) no opportunity to intervene in proceeding (no agency hearing on issue) (2) Interest which they were asserting wasn’t central to the case, but was peripheral (agency worried about power standards, not river pollution, recreational uses), (3) Not clear that plaintiff’s were among those meant to be protected by that agency (power generation v. fishermen) 2. So courts needed to protect the litigants’ claims and grant standing iii. Rule: Litigants can secure standing if they are aggrieved within the meaning of the statute because of the preservation of scenic integrity was in small statutory provision

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1. Expanded Church of Christ’s holding to include broader standing Association of Data Processing v. CAMP: Trade organization challenged Comptroller that national banks could enter data processing business 1. Zone of Interest Test: (1) Does plaintiff allege that the challenged action has caused him injury in fact (economic or non-economic)? (2) Is the interest sought to be protected by plaintiff is arguably within the zone of interests to be protected or regulated by the statue, constitution, or a public interest in which Congress recognized the need for review of administrative action? a. First is a constitutional requirement (Article III case or controversy) b. Second part of the test is prudential – for the purpose of judicial economy, but not a constitutional requirement ii. Holding: Douglas: NO STANDING because (1) no invasion of a legal interest (property, contract, protected against tortious invasion or one founded on a statute which confers a privilege), (2) which is protected by a legal right (freedom from competition isn’t a legally protected right) iii. Rule: If the interest sought to be protected is arguably within the Z of I sought to be protected or regulated by the statute or constitutional guarantee, Court should grant standing (Tennessee Electric v. TVA) 1. But look at statutory purpose and congressional intent in determining scope of standing (zone of interest) iv. Trend toward enlarging the class who may protest administrative action Barlow v. Collins: Challenge by tenant farmers of a Dept. of Ag regulation assigning crop payments, someone would be hurt regardless of agency action i. Brennan: Applied the “Zone of Interest” standard ii. Thinks only the first step should be used- the second one is just like the discredited inquiry that P has to show government action invaded his “legally protected interests” Sierra Club v. Morton (1972): SC challenged USFS’s permitting of Disney park i. Plaintiff wanted to create standing that didn’t require pleading specific facts showing individual members being specifically impacted ii. Holding: Court found NO STANDING – Organization cannot aggregate interests and injuries of their members - no ideological plaintiff can have standing (4-3 decision) iii. Test: Court recognizes non-economic injury (environmental well-being) 1. Stewart: “Injury in fact” test requires more than an injury to a cognizable interest 2. Requires the party seeking review to be among the injured iv. Just because it’s a public action from a public interest group doesn’t mean that individual members need to have a proven injury in fact – no proof here of how members injured 1. Prudential limitation on standing – prevent flood of suits by only allowing those who have a direct stake in the outcome to bring the suit Notes: Shockwave through environmental community i. Was a ploy to get around “plaintiff shopping” to get plaintiff’s who meet certain criteria and just reason to sue – regarded as a major roadblock by anyone who would want to bring environmental action in the future US v. SCRAP (handout) (1973): GW students tried to restrain enforcement of orders allowing RR’s to collect a surcharge, said ICC didn’t do an EIS under NEPA i. Holding: DO HAVE STANDING under §704 because the students used the forests and mountains in the Washington area to hike and fish, and this was disturbed by the non-use of recyclable goods caused by rate increase ii. Standing is not confined to those who show economic harm (even though Data Processing and Barlow had economic injuries), aesthetic and environmental well-being recognized too 1. Aesthetic and environmental well-being are valid and just because shard by many rather than the few, doesn’t make them less deserving of protection 2. Otherwise, the most injurious and widespread government actions could be questioned by nobody- cannot accept that conclusion

iii. Test: Plaintiff has to show that he has been or will be perceptibly harmed by the challenged action (not just imagine that he could be) 1. No reason to adopt threshold for standing beyond the “adversely effected” or “aggrieved” (as opposed to “significantly affected”) 2. Defendants could have asked for a more definitive statement about where they would be harmed (what forests would be cut?) iv. Notes: Included CEQ as “involuntary plaintiff” (could move to be realigned or say that they didn’t care- both are bad options, so had standing through CEQ too) 1. Goal: Don’t want people suing just to “vindicate the value interest of concerned bystanders” III.

Procedural Rights: Standing & Article III Requirements a. Administrative law uses procedural requirements to improve agency decision making, control regulatory power and improve legitimacy of agency action (NEPA process) b. Lujan v. Defenders of Wildlife: Challenged DOI rule interpreting ESA to only apply domestically as opposed to on international government projects - injured by potentially not being able to see certain animals after international projects destroy their habitats. i. Holding: Scalia: NO STANDING – no proof of actual injury, and no redressability, and difficulty in proving causation ii. Rule: To be heard, P must have: (1) Injury in Fact- invasion of legally protected interest which is concrete and particularized (injury affects P in a personal way), and actual or imminent, not hypothetical (2) Causal Connection between injury and conduct complained of (fairly traceable to challenged action of the defendant, not result of a third party not before the court) (3) Redressability- Likely, not speculative, that injury complained of will be redressed by a favorable court decision iii. Party invoking federal jurisdiction bears the burden of establishing the elements 1. Higher threshold when P’s injury arises from government’s allegedly unlawful regulation of someone else- “when the P is not himself the object of the government action or inaction he challenges, standing is not precluded but is substantially more difficult to establish iv. Injury: General government grievance doesn’t have an Article III case or controversy v. Redressability: District Court ordering the Secretary wouldn’t actually provide relief for the endangered species, as the agencies wouldn’t have to follow his orders, other $ sources vi. Separation of Powers: Congress can’t give just anyone a right to sue - is executive not judicial right to make sure the laws are faithfully executed vii. Kennedy/Souter (concurring): Might recognize procedural injury standing viii. Blackmun/O’Connor (dissent): Enough evidence for trial on whether D was injured- let jury decide, just because you can’t show the exact place where a species is killed doesn’t mean you can’t show injury- “ecosystem nexus” argument works ix. Notes: Without good showing that it’s protected information, can file FOIA request and get whatever information (unless protected) 1. Appointment of special counsel – debate-gate: alleged that citizens have interest in seeing that justice be done, lawyers want to see laws be enforced, had particularized interest because of past association with the special counsel 2. Procedural harm- special prosecutor statue provided that people can petition AG who is required to act c. Steel Co. v. Citizens for a Better Environment: (1988) i. Holding: NO STANDING: Emergency Planning and Community Right to Know Act didn’t constitutionally authorize private suits alleging past Act violations ii. Past activities are not sufficient for Article III Case or controversy. If the only remedy for noncompliance penalties are paid to the US, not the individual plaintiff, doesn’t meet Lujan d. Federal Election Commission v. Akins: FEC interpreted PAC to be a group with a “major purpose” in nomination or election of candidates

i. Holding: Plaintiffs HAVE STANDING – Court allowed procedural standing, (denied in Lujan), but found Congressional intent to give this class a claim ii. Injury in Fact: Inability to obtain information on list of donors/amounts 1. Congress can create procedural rights, violation of which give rise to Injury in Fact (even if small, can support action). These injuries were sufficiently concrete and particular – need to evaluate candidates who receive $ from this group iii. Scalia (dissenting): APA shouldn’t allow individual enforcement of executive regulation against a third party – this generalized grievance is widely shared AND undifferentiated e. National Credit Union v. First National Bank: Allowed banks to challenge regulations that permitted credit unions to enroll unaffiliated members i. Holding: Thomas: HAVE STANDING: Court does NOT require Congress to specifically intend to benefit a particular class of plaintiff’s for them to meet the zone of interests test ii. Rule: To be within the ‘Zone of Interest’ protected by statute, the court doesn’t need a congressional indication of purpose to specifically benefit the would-be plaintiff, just has to relate to their interests (more loose zone of interest test) 1. One of the Act’s goals is to limit the market that federal credit unions can serve – changed interpretation impacts Bank’s – don’t want an unfair advantage iii. O’Connor (dissenting): Majority is misinterpreting the Z of I test – should require that the P’s alleged injury fall within the Z of I sought to be protected by provision in question iv. Notes: Postal Workers: Previously had a monopoly, now allowed FedEx and UPS to compete, employees denied standing to enforce laws because they lack competitive injury f. Simon v. Eastern Kentucky: Challenged rule not requiring non-profit hospital to treat indigents i. Holding: Powell: NO STANDING – Even if injury by hospital is alleged, insufficient case or controversy if no hospital is a named D- can’t address injury done by a third party that is not present in court ii. Injury in Fact: Were being denied hospital services iii. Traceability: Speculative whether denial of service can be traced to petitioner’s encouragement through tax benefits iv. Redressability: Even if granted relief, might not redress injuries because hospitals could just choose to lose non-profit status, then they wouldn’t be required to provide indigent care v. Rule: To have standing, the court must be able to craft redress that addresses the party’s injuries, and the party causing the injury must be before the Court vi. Notes: Could have pleaded that IRS claims “caused” instead of “encouraged” hospitals not to treat indigents - just need a “good faith belief” that this would happen (analyst saying that without tax deduction hospitals wouldn’t function) 1. SCRAP had 5 pages of standing with multiple alternatives g. Allen v. Wright: (1984) IRS code allowing racially-discriminatory schools to have tax-exempt status - racially segregated private schools expanded during desegregation, still getting tax ben’s i. Holding: O’Connor: NO STANDING: Right to have Gov’t act in accordance with the law isn’t sufficient for standing – the indirect injury here is too attenuated ii. Rule: Injury must be distinct and palpable, not abstract or hypothetical, must be fairly traceable (causation) and relief must be likely to follow from a favorable decision iii. Injury in fact: Claim they’re injured by lack of opportunity to received a desegregated education BUT this is not fairly traceable to government conduct – fairly traceable only if there were enough racially discriminatory private schools (but poor pleading problem) 1. No injury from theoretical discrimination- need to actually apply and be rejected iv. Flast v. Cohen: Taxpayer standing is too attenuated- taxpayers don’t have standing just because they suffer a minute injury in fact 1. Exception if it directly violates a spending clause (church funding which violated separation of powers) v. Notes: IRS changed tax code, and congress blocked– their intent was clear, plus Court shouldn’t decide how agencies should spend their resources for prudential reasons

IV.

Traceability & Redressability a. FOE v. Laidlaw: CWA allowed citizen to bring civil action against any person alleged to be in violation of an effluent standard– D complied with NPDS, but free to resume behavior i. Holding: Ginsburg: Court found STANDING. D said there no demonstrated proof of harm to the environment from mercury discharge violations but the injury was the perception that river was polluted - not the actual pollution (aesthetic and economic injury counts) ii. Standing because these people lived by river, knowing pollutants were in water, injured their way of life, pollution still occurring when suit filed (adequate injury in fact) 1. But this injury cant be an unfounded fear, “reasonable concern” 2. Civil penalty as a deterrent (redressability) iii. RULE: Defendant has the “formidable burden” of showing that it is absolutely clear that the allegedly wrongful behavior couldn’t reasonably be expected to reoccur – then is moot- could change management, new practices, etc. b. Massachusetts v. EPA: Org’s asked EPA to regulate GHG emissions under CAA i. Holding: Stephens: Massachusetts has standing under Article III to challenge EPA’s requirement of federal regulation of GHG emissions under the CAA ii. Congress gave states a right to sue the government under the CAA for withholding action unlawfully- to protect their sovereign interests (standing to enforce a procedural right to challenge denial of rulemaking petitions) 1. Standing- whether petitioners have such a personal stake in the outcome of the controversy as to assure that concrete adverseness (Baker v. Carr) iii. Injury: Massachusetts would be harmed by global warming because it has a large coastal property- rising sea levels would harm them (Sovereign interest independent of its citizens) 1. Just because injury is widespread doesn’t lessen its protection iv. Causation: EPA recognizes a connection between GHG and global warming v. Redressability: Just because EPA can’t stop global warming, doesn’t mean that they can’t take steps to try and slow or reduce it – will slow the pace and relieve an injury to the state vi. Rule: If there is sufficient proof of injury in fact, causation and redressability, then the petitioner has standing to bring a constitutional claim. vii. Roberts/Scalia/Thomas/Alito dissenting: The challenges are “nonjusticiable,” redress of these grievances are ‘the function of Congress and Chief Executive,’ not federal courts, redress wouldn’t help petitioners specifically, but all humanity c. Standing by Banzhaf: i. Banzhaf thinks causation element in Mass v. EPA is even more extended and attenuated than SCRAP. Look at Georgia suing to protect its own citizens (Parens patriae) ii. Banzhaf sued about lung cancer- causation- if a smoker dies of lung cancer then probably from smoking but more difficult to establish if smoker dies from a stroke or heart attack 1. Companies couldn’t claim assumption of risk because states didn’t assume anything, their citizens did – then could use statistics (if only 30% is valid, then get 30% of money for state) iii. Be thorough about pleadings- allege everything, lots of alternatives, take time and space in your pleading- lay out as many as possible, slightly different phrasing iv. Add as many good types of plaintiffs- who can add new injury or causation, etc. v. Be creative about theories (like 3rd party beneficiaries for hospitals, involuntary plaintiffs) 1. There is no adverse precedent if a new theory vi. Plead as specifically as you dare – look at what the court says “need more specific pleading” (‘tends to do that’ or this ‘encourages this’ instead of this makes this happen’) vii. Make them want to take the case- appropriate for the court to become involved, if you don’t take it, these horrible things will happen 1. Include policy arguments if judge is receptive to it- why is standing helpful here, why should/shouldn’t it be construed strictly viii. Use supporting quotation – Massachusetts had better language than Lujan

1. Clearly distinguish cases that are against you ix. If you can assert a procedural injury, burden of causation is greatly decreased 1. If there is a procedural injury, only have to show that the procedural step was connected to the substantive result

Topic 8: Reviewability (Presumption, Express & Implied Preclusion) I. Presumption: Express & Implied Preclusion a. Statute could implicitly foreclose judicial review i. Standing and Reviewability: Congress can create injuries (procedural) and give standing to a certain class, but if no standing for any plaintiff, then maybe just not reviewable? b. APA Reviewability: Review under §707 abuse of discretion unless under §701: Preclusion & Restriction: Chapter applies except that: i. (1) Statutes preclude judicial review (either expressly or by implication); OR ii. (2) Agency action is committed to agency discretion by law. iii. APA now creates a strong presumption of review c. Courts least likely to find reviewability where it’s a broad constitutional issue, more likely if it’s a question of fact or mixed question of law and fact II.

Implied Preclusion a. Implied Preclusion: Nothing written saying you can’t do it, but implication that it shouldn’t be reviewed (from history, statute’s terms/structure, or problem it addresses/type of agency, etc.) i. Review will generally be permitted unless there is a reasonably clear indication of an attempt to preclude review (APA PASSED IN 1946) ii. Precluded not by express language, but by the structure of the statute and provisions for alternative methods for review b. Before APA: Switchmen’s Union v. National Mediation Board: Union lost a representation battle with a rival union, wanted to challenge an election decision made by the Board i. Holding: NOT REVIEWABLE. If Congress had wanted the judiciary to review the Mediation Boards’ decisions, they would have “made its desire plain” BUT the statutory language points to the decision that Congress DID NOT want the courts to hear it ii. Other Reasons: Didn’t want to drag out the controversy (courts are slow), it was a mixed question of law and fact, only involved one union, made it more difficult to review iii. Notes: This case is usually distinguished, instead of followed today c. After APA: Changed presumption toward reviewability unless explicitly says not to d. Abbott Laboratories v. Gardner: Background of FDA implementing rule requiring disclosure of generic name on bottle “every time” brand name was mentioned i. Issue: Did congress intend for judicial review of pre-enforcement of FDA rulemaking? ii. Rule: Judicial review of a final agency action will be presumed unless there is “persuasive reason” to believe Congress wanted otherwise iii. Holding: Court ALLOWED REVIEW. Court changed pre-enforcement review presumption – Court respected Congress’ intention for broad scope of APA reviewability iv. Court finds it RIPE - Companies want to sue now before they have to use challenge to rule as a defense – make themselves look like they’re hiding 1. Injunction: Had to claim irreparable harm that if they disclose too much information, would lose competitive advantage, don’t want to be seen as violating the law and have the public repercussions v. Fortas (dissent): Shouldn’t allow an injunction on a matter crucial to public health vi. Notes: Both sides moved for SMJ – so government made the error of saying that there were no facts at issue – so court can decide it as a matter of law

1. Government should have said facts were undecided, and tried to make it not-ripe for judicial review e. Block v. Community Nutrition Institute: Agricultural Marketing Act set minimum prices between milk handlers and producers, issue over delay in assigning pricing scheme i. Holding: O’Connor: Reversed court of appeals- found that there was NO STANDING ii. Standard then: The ‘clear and convincing evidence’ standard 1. Only use that to support presumption for finding judicial review of administrative action (unless Congress’ preclusion is “fairly discernible”) iii. Rule: The presumption favoring judicial review is overcome when congressional intent to preclude judicial review is “fairly discernible” in the statutory scheme 1. Don’t strictly apply the clear and convincing evidence standard – use the lower, easier “fairly discernible” test iv. View intent legislative history or specific statutory language – statute says that the buyers cannot obtain review of the process only after they exhaust administrative remedies 1. Original statue had no judicial review provision – complex statute so would have made sense to include that language if they had intended review f. Bowen v. Michigan Academy: Family physicians challenged HHS regulation that set higher Medicare reimbursement levels for board certified physicians than non-board certified. i. Issue: Are Part B issues reviewable? (Part A provides for judicial review, Part B does not) ii. Holding: REVIEWABLE. Legislative history provides specific evidence of Congress’ intent to foreclose review of amount determinations (minor matters) but matters to which Congress didn’t delegate to private carriers are susceptible to judicial review 1. Not an amount determination, but method for obtaining amounts (don’t want to have federal review for every claim) BUT review for method is permitted iii. Here, the presumption for allowing judicial review hasn’t been adequately overcome iv. Rule: Congress ordinarily intends that there be judicial review, and a contrary intent must be expressed with “clear and convincing evidence of an intent to withhold” judicial review 1. Mere failure to provide specially by statute for judicial review is no evidence of intent to withhold. Heavy burden on agencies to prove that Congress did not mean to prohibit judicial review v. So goes back to “clear and convincing evidence from “fairly discernible’?? g. Thunder Basin Coal v. Reich: Non-unionized mine workforce was being represented by two employees without the miners’ knowledge (Dept. of Labor required posting of representation) i. Owner sued in district court to enjoin regulation enforcement (pre-enforcement review) 1. Challenged statute not on its face, but as it applied to him ii. Federal Mine Safety Act required Commission to review challenges to enforcement, THEN reviewed by court of appeals (allowed pre-enforcement review in district court in two circumstances, neither of which were present there) iii. Holding: Blackmun: Statute’s comprehensive scheme of enforcement and administrative review IMPLICITLY PRECLUDES a pre-enforcement challenge 1. Because they had explicitly provided for review in separate agency, implies preclusion of review in Article III courts – depends on the circumstances 2. Could only get review by not complying with regulation, then forcing agency to begin enforcement proceedings (pay penalty only after Commission, then Court of Appeals decision) iv. Notes: Banzhaf Rule: If ruling of agencies are to be appealed and reviewed by another agency, then review by Article III courts is precluded h. Free Enterprise Fund v. Public Co. Accounting: Act stated that PCAOB rules and orders were reviewable by the SEC then by Court of Appeals i. Rule: Provisions for agency review do not restrict judicial review unless the ‘statutory scheme’ displays a ‘fairly discernible’ intent to limit jurisdiction, and the claims at issue are ‘of the type congress intended to be reviewed within the statutory structure’

ii. Holding: REVIEWABLE- No way for plaintiff’s to pursue constitutional claims in the agency- didn’t turn on fact-bound inquiries within the SEC’s special competence iii. Notes: Free Enterprise is different than Thunder because of facial/as applied distinction 1. Can an agency rule on a constitutional issue? Depends on if its facial or as-applied challenge – Can challenge the method or the process used by the agency, but agency can maybe review the constitutionality of one specific instance 2. Agency can’t decide whether the statute that created them is constitutional 3. Can’t act on a facial challenge striking down its own statute – attack on the structure of the agency themselves III.

Express Prelusion a. Express Preclusion: Statute explicitly says that this issue is not reviewable i. Statute says no decision shall be reviewed by any court of law bla bla bla ii. But to what extent can congress pass a statute to prohibit review of constitutional issues? b. Strong judicial hostility to being told they can’t review things (can encourage the court to shy away from finding express preclusion if you make them want to hear the case) i. Presumption of judicial review is strongest when there is a constitutional challenge – need interpretation of a statute that gets you around those ii. BUT just because you raise a constitutional claim does NOT mean court gets to hear it, but when language cuts off review of a serious constitutional challenge- needs very clear statement of congressional intent c. McNary v. Haitian Refugee Center: Haitian Refugee Center challenged INS practice implementing amnesty program fro certain alien farmworkers created by the Act i. Agency said it was unreviewable- §210 said no review “of a determination respecting an application” referred to prohibiting direct review of denials of amnesty status, like here 1. Allowing individual claims wouldn’t allow a judge to see unconstitutional pattern of all claims – also people would have to surrender for deportation to receive judicial review – seems unfair ii. Holding: Stevens: REVIEWABLE. Section §210(e) of the act prohibited review of an individual denial not to challenge of unconstitutional practices for application processing d. VETERANS BENEFITS: Before 1970, no judicial review of veterans benefit determinations allowed. DC circuit interpreted prohibition “concerning a claim for benefits” to not apply to reviewing agency action terminating benefits 1. SO Congress enacted §211(a) provision prohibiting “jurisdiction to review any such decision by an action in the nature of mandamus or otherwise” ii. Johnson v. Robison: Challenged 1A and 5A rights in denying benefits 1. Holding: Brennan: Claim didn’t arise under interpretation of the statute, but in the ability of Congress to legislate the Act itself - REVIEWABLE a. SO: §211(a) doesn’t preclude review of claims that VA procedures violated DP or that VA regulations exceeded statutory authority 2. Rule: Prohibition of review of administration of the statute by the VA wasn’t under review, but the challenge was to Congress’ ability to create a statutory class entitled to benefits which excluded one eligible group iii. Traynor v. Turnage: VA promulgated rule defining “primary alcoholism” as “willful misconduct” making people ineligible to use aid under GI bill 1. Holding: White: Text and legislative history of §211(a) provide no clear and convincing evidence of any congressional intent to preclude a suit claiming that §504 of Rehabilitation Act invalidates previous Act - REVIEWABLE e. HABEAS CASES: 28 USC §2241: Jurisdiction on all federal courts to hear petitions for write of habeas corpus- in 1962 changed review of deportation orders from the district court to the court of appeals (things changed after 9/11)

i. INS v. St. CYR: St. Cyr pleaded guilty to criminal offense, AG’s discretion to waive deportation withdrawn by two acts constraining judicial review of deportation acts 1. Holding: Stevens: Strong presumption in favor of judicial review, need a clear statement of congressional intent to repeal HC jurisdiction- REVIEWABLE 2. Rule: Preclusion of review of purely legal question raises Constitutional Questions under the Suspension Clause: Article I, § 9: “The Privilege of the Writ of Habeas Corpus shall not be suspended, unless when in Cases of Rebellion or Invasion the public Safety may require it.” 3. Scalia (dissent): No ambiguity of congressional intent to preclude judicial review under the IIRIRA and AEDPA ii. Hamdan v. Rumsfeld: Rasul v. Bush found that HC was available and due process applied to non-US citizens being detained in Guantanamo 1. Detainee Treatment Act – “No court shall have jurisdiction to hear application for HC by Guitmo detainees, except for limited review given to exclusive jurisdiction of DC circuit for those claims pending on or after date of enactment of Act” 2. Holding: Stevens: Government’s belief that DTA had immediate effect of repealing federal jurisdiction over future and past HC actions is WRONG a. REVIEWABLE - Statutory interpretation doesn’t make Subsection (1) cases included into type to which restrictions were intended to apply

Topic 9: Reviewability (Committed to Agency Discretion by Law) I. Scope of Review of Administrative Action: Present Day Framework a. Difference between APA §701(2) committed to agency review, and §707 review an abuse of discretion (“except to the extent that…” is under 701) i. As long as decision falls within the statute’s zone of discretion, then not overturned because falls within §701(2), but if beyond the zone, then is an abuse of discretion under §707 b. Overton Park v. Volpe: City park near Memphis, private citizens said Sec. of Transportation violated Federal-Aid Highway Act and by proposing to build a highway through the park 1. Statue said that he “may approve if no feasible and prudent alternative” ii. Holding: Marshall: REVIEWABLE. Doesn’t fall under “committed to agency discretion” exception, no clear and convincing evidence Congress wanted to preclude review 1. §701(a)(1) applies when Congress expressed an intent to prohibit judicial review, (a)(2) applies when statutes are so broad there is no law to apply iii. Rule: If there is a legalistic standard for the court to use in reviewing the decision, then it is not committed to agency discretion by law, and court can review it 1. No need for statute unless Secretary has to find that alternatives “present unique problems” – so there is law to apply 2. No indication that Congress didn’t want judicial review and no legislative intent to restrict access to judicial review iv. Secretary’s decision is entitled to a “presumption of regularity” v. (1) Step 1: Decide whether Secretary acted within the scope of his statutory authority. 1. Congress only set out a small range of choices – could the Sec have reasonably believed there were no other choices? vi. (2) Step 2: Decide whether the Secretary’s choice was “A&C, abuse of discretion.” 1. Was decision based on all relevant factors, was there a clear error of judgment? 2. No statement of why he didn’t think design changes could be made, no factual basis for finding of attempt to preserve public lands vii. (3) Step 3: Decide whether Secretary’s action followed necessary procedural requirements. 1. Failure of Secretary to make formal findings and state his reasons for allowing highway to be built through the park

2. BUT absence of findings doesn’t require case be remanded- no requirement of formal findings viii. Notes: Potential Standards of Review 1. Substantial Evidence- Used when agency action is taken pursuant to rulemaking provision of APA, or based on public adjudicatory hearing a. Not applicable here because not rulemaking, hearing 2. De Novo- Authorized if (1) action is adjudicatory in nature and agency fact-finding procedures were inadequate, (2) independent judicial fact-finding when issues that were not before the agency are raised in a proceeding to enforce non-adjudicatory agency action (this one) a. Informal rulemaking here c. Heckler v. Chaney: Challenge by death row prisoners to regulate execution drugs i. FDA said its jurisdiction in that area unclear, not able to interfere with state criminal justice practice, no danger to public health from no regulation, so declined rulemaking petition ii. Holding: Rehnquist: UNREVIEWABLE. Agency’s decision not to prosecute or enforce is within its discretion, decided based on a complicated balance of factors within its area of expertise (agency sets its own priorities) 1. When an agency doesn’t act, not infringing upon individual’s liberty or property rights which court normally is called on to protect 2. This falls within the special province of the executive not reviewable by the courtsit’s their responsibility to “take care that the laws be faithfully executed” iii. Rule: Review isn’t permissible if the statute is drawn so that a court would have no meaningful standard against which to judge the agency’s exercise of discretion 1. “Prosecutorial discretion” includes what are the chances of winning, does this fit within our agency guidelines, etc. - presumption against reviewability, BUT this presumption is rebuttable agency violated established guidelines iv. Breannan (concurring): Court properly decides that non-enforcement actions are reviewable where (1) agency wrongly claims that it has no statutory jurisdiction to reach certain conduct, (2) agency engages in a pattern of non-enforcement of clear statutory language, (3) agency has refused to enforce a regulation lawfully promulgated and still in effect, or (4) the nonenforcement decision violates constitutional rights 1. Worried about intrusion into Article II function- ensure that prosecutions are carried out – “take care that the laws are faithfully executed” v. Marshall (concurring): Judicial review is not more important when agency acts against members of the regulated community than when it refuses to act for regulated beneficiaries 1. Can review agency’s decisions not to enforce just like other actions, but subject to the same abuse of discretion standards vi. Notes: APA §551(13) Includes agency action as “a failure to act” d. Farmworker Justice v. Brock: Farmworker sought review of a denial for rulemaking petition. i. Holding: REVIEWABLE. Fewer petitions for rulemaking, but prosecutors have thousands of petitions to prosecute – need justify failure to rule-make under APA if petitioned ii. Rule: Heckler does not apply to petitions for rulemaking – non-reviewability supported by the fact that agencies should decide how to use their own resources, and this is not a case of state’s coercive power being used against a citizen’s liberty or property 1. Differences from Heckler. (1) Doesn’t recognize Heckler Court’s identification of executive discretion (2) Moved toward Marshall’s concurring position in HecklerDidn’t extend presumption of un-reviewability (3) In Heckler, was a decision not to rule-make, 2. Prosecutors frequently decide not to prosecute, fact-rich decisions, but decisions not to rule-make are less frequent, turn on scope of agency’s authority 3. Even if reviewable, very high deference given to agency iii. Deference is so broad that the process is similar to non-reviewability e. Lincoln v. Vigil: Indian Health Service phased out a program, by not allocating $ to it

i. Holding: UNREVIEWABLE. When a lump sum appropriation is challenged, unreviewable because whole purpose of a lump sum is to give agency discretion on how to spend 1. Should have had a congressional earmark, then wouldn’t be discretionary – congress is always free to restrict agency discretion ii. Rule: Traditionally treated as committed to agency discretion by law: (1) Decisions not to take enforcement action, (2) refusals to grant reconsideration of an action because of a material error, (3) decisions to terminate an employee in the interests of national security AND (4) decisions about allocating funds from a lump-sum appropriation f. Webster v. Doe: (1988) CIA employee told employer he was gay, told he was a threat to national security, Secretary dismissed him under §102(c) i. §102(c) gives Secretary discretion to terminate employment of anyone deemed to be a threat to national security, so the statute is very discretion-heavy with significant deference to Director’s determination of interests of the United States ii. Holding: §701(a)(2) precludes judicial review of discharge decisions because there is no standard for the court to apply- statute is too broad 1. Non-constitutional claim: Committed to agency discretion 2. Constitutional claim: NOT committed to agency discretion- would present serous constitutional issues if court couldn’t review – constitution provides the law to apply under Overton Park, iii. No clear congressional intent to preclude review of constitutional claims, and the heightened requirement from the constitutional issues arising form denying a litigant a forum for constitutional claims was not met here 1. Discovery limitations could preserve national security questions iv. O’Connor: Agrees in part, but Congress can close lower courts to constitutional claims sometimes, but thinks that it was precluded here v. Scalia (dissenting): Maybe should include common law and prudential concerns under 701(a)’s “law to apply,” but court doesn’t do that 1. There is a sufficient standard to apply to review it- can’t terminate out of personal vindictiveness g. Banzhaf’s Constitutional Questions: If arguing something committed to agency discretion by law, try to reframe it as a constitutional issue, and then get in under “law to apply” under second prong of Webster i. Scalia in Webster said no serious constitutional questions are posed by denying judicial review of constitutional claims ii. Courts try to construe statutes to not raise constitutional claims – want to leave some avenue for judicial review of constitutional questions (difficult for Gitmo detainee cases) 1. Article III, §1 – judicial power vested in SC and in such inferior courts as Congress may establish 2. Banzaf: Congress can take jurisdiction away from certain courts, but the issues must be able to go up to the SCOTUS iii. Traditional View: Congress should not use its power to withdraw jurisdiction – but power does exist as part of constitutional system of checks and balances 1. Otherwise court could hold everything legislature does unconstitutional, so congress can decide that courts don’t get to review some cases a. Maybe legislative acquiescence legitimates judicial review in a democracy – congress hasn’t tested the courts on it 2. But SCOTUS has never held that congress can foreclose all judicial review of a constitutional claim – Plenary power iv. Essential Function Argument: Uses constitutional history, structure and purpose to insist that Congress cannot withdraw jurisdiction when the result would be to vitiate the essential functions of the federal judiciary 1. Was first discussed about SCOTUS appellate jurisdiction, but then what is the “essential function” of the judiciary?

2. Maybe if congress’ essential function is to follow the popular will, maybe the court’s essential function is to protect the individual? v. Independent Unconstitutionality Argument: Finds limits on Congress’ jurisdictionwithdrawing power in constitutional provisions outside of Article III 1. Can’t limit through a restriction that violates constitutional right (“no power to hear cases brought by minorities”) 2. Equal protection clause prevents or due process prevent congress from withdrawing jurisdiction over certain kinds of cases 3. If agency’s determination is later used for criminal proceeding, need some judicial review of agency’s decision (Crowell v. Benson) 4. But what about if person is harmed by denial of something that isn’t a liberty or property interest – so it’s unlawful, but not unconstitutional?

Topic 10: Control over Informal Decision-Making & Discretion I. Banzhaf Lecture: Davis (Police Discretion, Judicial Discretion” books) a. His views on “committed to agency discretion by law” especially with police/prosecutors i. Discretion is necessary for justice, but there is significant unnecessary discretion – other judicial systems don’t have as much and do ok b. “Need a new jurisprudence that covers all of justice, not just the easy half” i. No discretion in criminal statues – but in practice, even though not set forth in the law, police exercised significant discretion ii. Police frequently decline to prosecute if storeowner asked them to, or if they paid them back, or if too young, etc. arrest prostitutes but not men, etc. iii. Police’s Strict Enforcement Day– show that police can’t enforce all infractions – too many statutes with so many crimes it’s assumed that police will exercise discretion c. Powers: Discretionary power to prosecute is the most important i. Negative power to withhold prosecution is even greater – less protected from abuse because no occasion to review d. Alternatives: German system: If prosecutor has a suspect, and fact and law seems clear but declines to prosecute, has to fill out a detailed form describing why he’s declining to prosecute i. That statement can be reviewed by the trial judge, and can be ordered to prosecute (made available to injured party) e. Remedy: Reexamine the amounts of discretion, and where it’s too much, cut it back i. Make decisions somehow reviewable, and with remaining discretion, better controlled and canalized/channeled/limited ii. Use the common law technique to develop limits on discretion: Any time that an agency has discretion, implied that they can control discretion by adopting rules 1. Can challenge agency’s refusal to not take prosecutorial action if there is a clear statutory mandate to act iii. Occupy Wall Street: New issues about long-term protesting 1. Davis would approach by recognizing discretion – if they stepped off the sidewalk everyone would be arrested, camping without a permit 2. Decisions should be made by highest ranking officer there – write a brief report on why he did what he did (sets precedent) 3. Then eventually rulemaking proceeding, inviting stakeholders Topic 11: The Timing of Judicial Review I. Exhaustion of Administrative Remedies a. Whether agency has internal procedures for remedying errors that should be used before going to court –inquiry depends on whether statute has exhaustion wording (APA §704)

b.

c.

d.

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i. Still assuming you’re likely to win on the substantive argument, have standing ii. Easiest way to duck the substantive issues if you can get out on procedural/timing issue, so need to make court convinced that they have to hear the case Test: Are there additional steps within the administrative process that he plaintiff seeking review could take, if there are, generally (but not always) want to require plaintiff to take those additional steps before seeking judicial review Purpose: Don’t want litigant short-circuiting agency proceedings by taking judicial review i. Allow agency to perform functions within its special competence, correct its own errors, develop a record adequate for judicial review ii. Harm of delaying review, character of issue – how gross is error, adequacy of procedure as a remedy, what extent would review hurt or harm parties, interest of parties, value of agency adjudication Reasons: Constitutional separation of functions (Article II agencies have a different constitutional function) want to keep separation between them i. If congress has made it clear that it goes one way- have to defer to that ii. Judicial economy- don’t want to bother courts if higher up chain in agency could remedy any error BUT might not compel people to go through agency proceeding if the agency lacks jurisdiction to hear the case, or if the action is unconstitutional as applied, etc How to Decide: Step 1: Look at statute- if it’s reasonably clear that congress wants litigant to work through the agency first, then courts will generally defer to the legislature 1. If not explicit (but implied), then court might have more leeway ii. Step 2: (1) What is the harm to the litigant if we don’t allow him premature review, and if we force him to go through the process? (2) What is the character of the harm? (3) Grossness or obviousness of the issue (clear on its face – then exhaust would be futile) but if more difficult, let agency work at it first 1. Irrevocable, incalculable? Or inconsequential? iii. Step 3: Are there any administrative remedies available, and are they adequate? iv. Step 4: (1) Extent to which the court would interfere with the administration of the agency, (2) What are interests of the parties? (3) What is the value of the agency proceeding? (Respected, expert, experienced agency and court wants the benefit, then let agency develop record, but if they think less of them- court is less likely to require exhaustion) Exceptions to Requiring Administrative Exhaustion: i. If agency can’t give P adequate relief, (substantively or procedurally like prisoner case) ii. Agency remedy would be futile (remedy is a sham from agency bad faith, bias) iii. If undue agency delay which may make remedy inadequate (old people and Medicare) iv. Agency action/inaction has a chilling affect on first amendment rights 1. Like the students at GW and drafting v. Failure to exhaust remedies due to agency’s failure to inform litigant of his remedies vi. Waiver – agency can waive requirement to exhaust remedies (work fair statute)

g. Myers v. Bethlehem Shipbuilding: NRLB began an unfair practice hearing against Bethlehem, D got an injunction from district court against further administrative proceedings i. Issue: Does P have to go through agency review to decide if agency has jurisdiction to hear the case? P claims irreparable harm if required to do so ii. Holding: Brandeis: Yes. NEED EXHAUSTION. Congress had the power to give authority primarily to agency rather than judiciary- but in dismissing it, did resolve some of the claim iii. Rule: A litigant can’t get around the statutory rule requiring exhaustion of administrative remedies by claiming that the agency’s asserted claim is groundless 1. As long as agency procedures are fair, & have adequate review of those procedures, then constitutional to require somebody to exhaust proceeding 2. Clearly a factual issue- need agency to develop a record iv. Notes: How to get judicial review? Board would have to go to the courts and ask for an order of enforcement- THEN person could challenge agency’s authority to order them

h. The Draft Cases: McKart: McKart free from draft as being sole son of father KIA, but when mother died, he was drafted, didn’t report i. Holding: NO EXHAUSTION. This is an issue of statutory interpretation of his exemption status, don’t need the agency to resolve the question first – question of law, not fact 1. No reason to think many people will ignore agency and go right for the courts because if they’re wrong, criminal prosecution & jail (20 year sentence) ii. Rule: In a criminal procedure (when behind bars while “exhausting” agency procedure) don’t require exhaustion unless interests underlying the exhaustion rule clearly outweigh the severe burden imposed upon the registrant if he is denied judicial review iii. Notes: If court precluded raising of constitutional claims here would be a big issue (using the courts to force people into draft, so can’t make courts ignore potential constitutional issue along with it) i. The Draft Cases: McGee: Student, graduate program would “probably qualify” for exemption, but he never requested ministerial student status, reclassified, didn’t appear before induction i. Holding: NEED EXHAUSTION. Not an issue of administrative expertise or statutory interpretation like McKart, but here the issue turned more on fact – agency is better 1. Actions jeopardized the interest in administrative fact gathering – which is committed primarily to agency’s discretion with limited judicial review ii. Test: Would allowing similarly situated registrants to bypass the administrative process would impair the Selective Service’s ability to perform its functions? iii. Notes: Allowing agency to hear the case means full agency review without opportunity for judicial oversight – maybe SOL passed on judicial? 1. Decisions made by local draft boards- need uniformity in these cases, and would be serious because some get drafted and die, and some don’t j. McCarthy v. Madigan: Prisoner sought damages for unconstitutional denial of medical care i. Holding: NO EXHAUSTION. (1) Damages sought weren’t available through prison grievance process, (2) 8th amendment claim of deliberate indifference to medical needs implicated prison – they were biased 1. Major purposes of exhaustion: (1) protect the authority of the agency, and (2) promoting judicial efficiency. Let agency correct mistakes without being undermined by frequent appeals (develop a full record) ii. Rue: The Court should decline requiring administrative exhaustion if: 1. (1) Requiring administrative remedy may cause undue prejudice to subsequent assertion of a court action (ex: unreasonable time frame) 2. (2) Inadequate Administrative Remedy - Doubt if agency is empowered to grant effective relief (ex: like constitutionality or statutory interp.) 3. (3) Inadequate Administrative Remedy - Body is biased, predetermined issue. k. Types of Constitutional Claims: (1) Constitutional as applied, (2) unconstitutional procedures, (3) unconstitutional on its face i. Usually require exhaustion in first two (agency has some competence and ability to decide not to act, presumably can correct procedures if their procedures are unconstitutional ii. BUT agency can’t hear the constitutional claim against the statue that authorizes the agency’s existence in the first place (so court doesn’t always require exhaustion here) l. APA Actions Reviewable: i. APA §704: Agency action made reviewable by statute and final agency action for which there is no other adequate remedy in a court are subject to judicial review. m. Darby v. Cisneros: Darby sought review of an ALJ decision that he engaged in improper financial practices – HUD regulations make ALJ’s decision final unless Secretary at his discretion reviews the ALJ’s finding – after that party’s request i. Holding: NO EXHAUSTION. Under APA and agency here, no requirement of exhaustion as a prerequisite to judicial review unless required in the statutory rules

1. §704 shows that litigant seeking judicial review of a final agency action under APA doesn’t have to exhaust administrative remedies unless exhaustion is expressly required by the statute or the agency rules ii. Rule: Federal courts can adopt other prudential limitations- but APA doesn’t have requirements other than following statutory or agency procedures II.

Primary Jurisdiction a. Way to resolve procedural and substantive conflicts – doesn’t involve judicial review of an administrative decision – so different than other doctrines – decision before they hear case b. Arises When: Court has jurisdiction, but there is a significant overlap with an administrative agency in jurisdiction or expertise that might have an impact on what court decides i. Court might have independent ground for jurisdiction (can have PJ over one issue but not the whole case) ii. Jurisdiction that a court has in a case might be based on one statute, but a second statute might give the agency jurisdiction c. Other Kinds: Incidental Jurisdiction (decide incidental facts- are they married or not?) – but rarely defer to agencies, because no real expertise in those determinations i. Mutually Exclusive Jurisdiction- Court and agency don’t overlap (injured at work, workers comp OR tort- depends on whether it arises out of his work - whether it was work related or frolic and detour-depends who has J) 1. Both agencies and courts can hear tort/workers comp, so just depends who gets it first decides – either can decide if it was at work or not, then send to court or agency depending on the ii. Exclusive Jurisdiction- Only the agency has jurisdiction (like court can’t fine a TV station for a violation- exclusive jurisdiction is at FCC) 1. FCC’s decision can later be reviewed by a court, but not at first 2. Court dismisses for exclusive jurisdiction, not primary jurisdiction iii. Superseding Jurisdiction- Used to have overlapping jurisdiction between court and agency, but there is a subsequent statute that gives so much power to an agency, that by implication it has taken away jurisdiction by the court (like shipping) d. Function: Allows court to use experience, expertise, let someone go first i. Doesn’t allocate power between court and agencies, only decides who goes first, not who has last say ii. But if it does delegate, court gives power to agency, then the agency would have power over what evidence to allow, what factual record is iii. Fact-specific policy: Need for uniform resolution of particular regulatory issue, Degree to which proper resolution is likely to require agency’s specialized expertise, Risk that judicial resolution would impede agency’s ability to accomplish regulatory mission 1. BUT primary jurisdiction can create delay and litigation expense if final agency order is reviewed by the court eventually e. Texas & Pacific v. Abilene Cotton: Shipper sued in federal ct for excessive railroad rate i. Rule: Federal courts have discretionary power to decline to hear case until agency decided 1. Even though statute preserved common law remedy, court found that Abilene must go through the Interstate Commerce Commission first 2. Want to ensure uniformity in rate setting (less concerned with expertise), don’t want agency to impede agency to function ii. Holding: White: Act can’t be held to destroy itself – Congress hadn’t thought it through because if all judges could substitute opinion for what agency would do, then no uniformity f. Far East Conf. v. US: Anti-trust action brought by DOJ, Federal Maritime Board approved practice and then SC found that practices violated Shipping act and Sherman Act, 6 years later i. Different statute gives court jurisdiction (Anti-Trust) than agency (federal maritime board)

1. Some administrative agencies can approve transactions that would otherwise be illegal if they meet certain criteria of serving public interest, then immunized from the Anti-Trust law – but complex economic balancing ii. Holding: DEFERS. Court evokes primary jurisdiction – defers to Federal Maritime Board to decide if appropriate to immunize these actions (judicial deference, agency advocacy) 1. Notes: Potential other issues at stake – DOJ wanted an injunction (equity), and DOJ could have filed before board, so they were forum-shopping for best remedy? III.

Finality a. Whether the action complained of is complete and authoritative rather than part of a larger decisional process that is still ongoing b. FTC v. SOCAL: FTC had “reason to believe” SOCAL was using unfair oil trading practices i. SOCAL filed a suit claiming that FTC only brought suit in response to political pressure ii. Holding: Court said complaint should be dismissed – Commission’s issuing a complaint was NOT A FINAL AGENCY ACTION under APA, so not judicially reviewable before agency adjudication was finished 1. Immediate review wouldn’t have served efficiency or enforcement of the act 2. Allowing these proceedings would open the floodgates and seriously interfere with agency proceeding iii. Rule: Complaint was not a definitive statement – no legal force/practical effect upon SOCAL’s business operations – no immediate judicial oversight needed iv. If SOCAL had legit claim, would likely win before the agency – no need to involve court v. Notes: If it’s committed to agency discretion by law (unchangeable) BUT if it’s not yet a final agency decision, just a timing issue – later reviewable c. Pepsi v. FTC: FTC sued Pepsi, Pepsi said bottlers were indispensible parties, FTC denied i. Holding: ALLOWED APPEAL. Reviewing court is in a better position to assess the matter when “all the cards have been played,” BUT immediate review of interlocutory agency action can be granted in some, unusual circumstances 1. FTC’s denial of party joinder request was a final agency action but committed to agency discretion who is an indispensible party ii. Rule: Review is most likely when petitioner can make a credible claim that failure to grant immediate review will result in irrevocable loss of right asserted (Alabama Power) iii. Notes: Normally not an immediately appealable order- has to wait until proceeding is over – this is just the Pepsi circuit- the Coke circuit went the other way 1. There is a strong presumption of reviewability – even if there is review for A and B, and you’re doing it for C or D, doesn’t mean that you don’t get any review – don’t get it in the court of appeals, might have to go to the district court d. National Automatic Laundry v. Shultz: Requested letter that Laundromat employees not covered by amendments to fair labor standards act, D. of L. took opposite position i. Holding: Court found letter to be FINAL. Need for authoritative determination before a ruling is final, but want ability for agency to reconsider ii. Rule: When a general interpretative ruling is signed by the agency head, entitled to deference as a matter of fact and law – shows finality and ripeness and is subject to judicial review iii. Court must balance: (1) Suitability of issues for court review, (2) hardship to parties of withholding review, (3) finality – what is the affect of the ruling 1. Decision is far more final, more formal, because everyone was a party to this, this decisions made at the outset will be in all advantage- don’t have to look individually 2. Was reviewable- compare/contrast with Helco – this wasn’t hypothetical, was particularized – mostly legal, not aided by further factual development 3. Accept the ruing of a board/commission/head of agency as presumptively final a. Rebuttable if stated as tentative or subject to reconsideration e. Helco Case: Blue poppyseeds – dye white poppyseeds blue i. (1) Suitability of Issues for Court- Requires fact finding and some expertise

f.

g.

h.

i.

IV.

1. Agency knows what occurs during dying of seeds better than court (fact) ii. (2) Hardship to Parties of Withholding Review – More speculative, no current dying business iii. (3) Finality- Informal advisory opinion, hypothetical facts, if it provided judicial review of all opinions, would dry up source of opinions Franklin v. Mass: State tried to regain seat lost in the house because of reapportionment i. SCOTUS found that it was not a final action – president isn’t an agency under AA so review isn’t available when action becomes final by presidential decision ii. Once president acts upon recommendation, no longer reviewable Dalton v. Specter: Secretary of Defense actions wasn’t final since reports identifying closure of military bases have no direct consequences i. But if you were a base, and was improperly put for closure would have no review because once president made decision was unreviewable, but not final until he did – catch 22. Flue-Cured Tobacco v. EPA: Sued EPA alleging that a report was a final agency action and that EPA violated Radon Act by not including industry representative in an advisory committee i. Holding: Court of Appeals found NO FINAL AGENCY ACTION. Created no legal right, only allowed research, statute denied EPA regulatory authority ii. Rely on APA § 702 (review if adversely aggrieved) and §704 (limited to final agency) iii. Agency action is final when: (1) Definitive statement of agency’s position, (2) Action has direct and immediate legal force requiring immediate compliance, (3) Challenges to agency’s actions involve legal issues fit for judicial resolving, (4) Immediate judicial review would speed enforcement and promote judicial efficiency Bennett v. Spear: (1) action must mark consummation of agency’s decision-making process (not tentative or interlocutory), (2) action determines rights or obligations from which legal consequences will flow

Ripeness a. Whether the action is fit for judicial examination now, as opposed to waiting for some future event b. Rule: Balance: (1) Fitness of issues for judicial consideration at the time review sought, (2) Hardship to parties of withholding consideration {how much harm, how serious, who is harmed? When will harm occur? If harm isn’t immediate- maybe ok to let it ripen, can litigant stake steps to prevent harm (similar to exhaustion)} c. Ripeness Doctrine Intended to: Reserve judicial machinery for imminent, not abstract problems i. Issue should be sufficiently clarified before court is asked to decide them (judicial economy) ii. Courts reluctant to decide fact-heavy, expert-needed cases unless necessary to do so iii. Courts should refrain from deciding constitutional issues, and if they must, they should decide it narrowly based on those specific (and well-developed) facts d. Historical: In England, Courts would issue advisory opinions – changed in the US i. We have a more distinct separation of powers and functions than England ii. Congress in 1934 passed declaratory judgment act – controversy must be definite and concrete and have an adverse legal interest (but court said some ripeness issues because something that hasn’t happened yet) e. Abbott Laboratories v. Gardner: Background of FDA implementing rule requiring disclosure of generic name on bottle “every time” brand name was mentioned, then pharmaceuticals sued FDA saying agency exceeded tis statutory authority i. Holding: Harlan: IS RIPE. Regulation is a finalized agency decision whose impacts being felt by suing party - and a purely legal question ii. Court changed presumption that pre-enforcement review isn’t allowed 1. Agency action has a real impact on industry action – regulation by ‘raised eyebrows’ (different than Flue Cured – even though it has impact, not reviewable) iii. Rule: Judicial assessment of need for supervision, safeguards to protect interests and enforcement problems

iv. Notes: No exhaustion required because no steps to exhaust- putting your license on the line isn’t really a remedy (plus this issue may never become “riper” – might just acquiesce and then it wouldn’t ever come more ripe) 1. If you lower barriers to ripeness, allow regulators to delay whatever regulations would be f. Lujan v. National Wildlife Federation: BLM’s opening public lands to private development i. Holding: Scalia: NOT RIPE. Land withdrawal review program was an overall program that didn’t qualify as a final agency action – program managed on a case by case basis 1. No standing because a general policy – didn’t allege individualized harm 2. Didn’t have to follow SCRAP because relying on Rule 56 SMJ instead of a potential Rule 12(b) motion to dismiss in SCRAP ii. Harm of delaying isn’t great and don’t want to set precedent of courts reviewing general policy that might be modified later, doesn’t require anyone to do anything right now iii. Rule: An agency’s regulation is not considered ripe for judicial review under APA until scope of controversy has been reduced to manageable proportions and there is a concrete action applying regulation to claimant’s situation that harms him 1. Exception if a substantive rule requires P to immediately adjust his conduct – action then is ripe immediately whether or not APA explicit statutory review is provided g. Reno v. Catholic: Immigrants rights groups challenged INS regulations that narrowly interpreted Act rendering plaintiff classes ineligible for amnesty i. Holding: O’Connor: IS RIPE. Most of the challenges weren’t ripe until an immigrant had applied for benefits and been denied, but a suit challenging a benefit-conferring rule isn’t necessarily unripe just because P hasn’t applied for the benefit. 1. Exception if it’s inevitable that challenged rule will be in P’s disadvantage (and firm prediction that P will apply and be denied benefit) then might be justiciable 2. Different than Abbott - not a pre-enforcement suit against a duty-creating rule, even if you succeed here, wouldn’t benefit until you’ve applied, and then might be denied for other reasons (but no incentive to apply – if you’re denied stakes too high ii. Rule: Court allows pre-enforcement review of duty-creating rule, but not benefit-creating rule (squares with Lujan because explicit statutory language can cure ripeness issue) iii. Notes: Sometimes congress imposes strict statutory time limits to seek judicial review, and unexcused failure to obtain pre-enforcement review precludes later challenges, but excusable if challenge isn’t ripe until past statutory period h. Eagle-Picher: 90 day review period for reviewing 1. Want to encourage certainty and predictability – don’t want too long before it goes into effect before it’s been implemented for too long ii. Rule: If there is any doubt of ripeness of a claim, petitioners must bring the challenge in a timely fashion or risk being barred – courts aren’t suited to guessing what should have happened in the past (don’t want retrospective ripeness analysis) 1. Constitutional – Court is very reluctant to save a late petitioner from the strict timeliness requirement to make a retrospective ripeness determination UNLESS events occur after the statutory period that creates a challenge that didn’t previously exist or if a claim is indisputably not ripe until agency takes further action i. National Park v. Interior: Issue over whether contracts to run concessions in national parks fall under Contracts Disputes Act i. Act has certain advantages for contractor, but DOI issued in its notice and comment period that concession contract is not defined by Contract Disputes Act 1. SCOTUS reversed – NOT MOOT, but NOT RIPE 2. Harm isn’t serious – should await a concrete dispute about a particular concession contract ii. Thomas: Task of applying CDA rests with agency contracting officers, section for notice doesn’t command anyone to do/not do anything – no legal rights

iii. Determining whether action is ripe for judicial review depends on: (1) fitness of the issues for judicial review, (2) hardship to parties of withholding court consideration iv. Fitness: Is a “final agency action” and is “purely legal” 1. But further factual development would help deal with legal issues v. Hardship: No hardship because impact of regulation wasn’t felt immediately and no irremediable adverse consequences flow from requiring a later challenge vi. Stevens (concurring): Found it RIPE- it’s as fit for judicial decision as it will ever be vii. Breyer (dissenting): Petitioners alleged sufficient concrete monetary harm in the form of increased bidding costs to allow both standing and ripeness V.

Reprise a. Ticor Title Insurance v. FTC: (DC Court of Appeals) i. Facts: FTC claimed Ticor illegally restrained competition by fixing prices for tile search and examination services ii. Edwards: Would affirm district court on prudential ground of exhaustion - no exhaustion exception is applicable because commission’s exercise of enforcement powers isn’t clearly unconstitutional and only irreparable harm is from cost 1. Court’s interest in avoiding premature judicial involvement is heightened if P raises a constitutional challenge to agency action 2. Exhaustion: Looks at position of party seeking review – is he trying to shortcut the administrative process? a. Exceptions: (1) Agency’s assertion of jurisdiction violates clear right of petitioner by disregarding specific statutory, regulatory or constitutional directive, (2) postponement of judicial review will cause P irreparable injury (not just money) 3. Ripeness: Look at relationship between courts and agencies and whether agency needs to do anything else before a court can review iii. Williams: Challenged action wasn’t final– merges exhaustion and ripeness 1. Exhaustion: Discusses steps a litigant must take (judge-made prudential) 2. Ripeness: Depends on fitness of issues for judicial review (judge-made prudential) 3. Finality: Looks at the conclusiveness of agency activity, similar to balancing test for interlocutory appeals (analysis is essential when court’s reviewing authority depends on granting appeal of “final” agency action) a. Final if thy impose an obligation, deny a right or fix a legal relationship (not including cost of the proceeding, and not including agency position that might be changed - SOCAL) iv. Green: Affirm district court, courts shouldn’t interfere with agency proceedings, even though it meets the exhaustion test, doesn’t pass ripeness test 1. Exhaustion: Want to permit an agency to formalize its policies, apply its expertise and develop a factual record a. Absence of harm doesn’t harm judicial review under exhaustion 2. Ripeness: Courts must determine if there is a purely legal question or if a need for further factual development, whether agency would benefit from delay of review until agency policy has been finalized

Topic 12: Differences Between Rulemaking & Adjudication I. Procedures for Administrative Action: Differences Between Rulemaking & Adjudication a. Constitution says little about the structure of the Federal government i. Sometimes rulemaking can turn on scientific fact (like litigation), sometimes adjudication sets general policy, sometimes APA adjudication is informal

ii. Banzhaf: Agencies can be determined to make decisions regardless of procedural protections, BUT ill-informed decisions are worse- make sure you get opportunities iii. Justice Douglas: Most provisions in bill of rights are procedural b. Constitutional Protections: Set floor for protection (death penalty- most procedure) i. 5th Amend and 14th Amend.: No person deprived of life, liberty or property without due process of law (applies to federal and state agencies) 1. Here, due process of law refers to some kind of fact-finding proceeding (like a trial or a hearing) but nature and requirements vary with circumstances ii. Minimum: Entitled to NOTICE and OPPORTUNITY to participate in some extent (presentation of evidence) iii. Distinguish classes of government actions in which a person is entitled under constitution to some kind of due process protection c. Agency Procedures: Legislative functions (rulemaking), Judicial functions (adjudication), and then Executive decisions (most of agency action- no procedures) i. Scope of review/procedural protections change if it’s adjudicatory or rulemaking d. APA: Definitions under §551: 1. Every agency final disposition is either a RULE or an ORDER 2. Very fact-dependent to decide if it’s a rule or an order (Bi-Metallic) ii. (6) Order: the whole or a part of a final disposition, whether affirmative, negative, injunctive, or declaratory in form, of an agency in a matter other than rule making but including licensing; e. Adjudication: §551(7): Agency process for the formulation of an order; i. Adjudicative-type facts: Relate to a specific group – type of facts which go to a jury, involved if something bad happens to one or more parties 1. Ex: Might not be entitled to a hearing- disputing public interest of showing full frontal nudity - legislative fact- doesn’t involve specific, broad and forward looking 2. Formal: Some proceedings are required to be “on the record” (ex: ratemaking) 3. Informal: Not required to be on the record (designated by APA) – only require prompt notice of denials of requests and brief statement of grounds for denial f. Rulemaking: §551(5): Agency process for formulating, amending, or repealing a rule; i. Legislative-type facts: Don’t relate to any specific party- generalized, broad facts 1. Usually forward looking, what happens if we do X 2. Closer relationship between overt policy authority and case decision in administrative adjudication ii. §551: (4) Rule: the whole or a part of an agency statement of general or particular applicability and future effect designed to implement, interpret, or prescribe law or policy or describing the organization, procedure, or practice requirements of an agency iii. Process: (1) A decision to carry out a statutory responsibility, (2) developing a proposal within the agency with advice from outside, (3) notice and comment period. (4) final rule iv. Scope: Rulemaking can be either formal or informal- Those provisions relating to formal hearings are applicable to only certain proceedings (on the record or not?) 1. Licensing is mentioned as adjudication- but applications for licensing II. Distinguishing Between Rulemaking & Adjudication: Under the Constitution/ Due Process a. Londoner v. Denver: Landowners weren’t consulted about tax for paved roads, but petition said they would have time to object before the passage of ordinance assessing their costs i. Issue: Is the charter provision finding that a proper petition had been filed without notice to the landowners a denial of due process under the 14th Amendment? ii. Holding: SCOTUS says NO- legislature can authorize general road improvements without notice & comment, BUT have to give a hearing before assessing costs – VIOLATED D.P.

b.

c.

d.

e.

1. No individual has a right to notice and hearing before the street is paved (legislative function) BUT the assessment of costs is more particularized (adjudicative), and so how much they benefited from the street was particularized iii. Rule: Due process requires that at some stage of the proceeding before a tax becomes irrevocably fixed taxpayer shall have a chance to be heard, have notice 1. Due process requires notice and opportunity to be heard iv. Notes: If they set price/square foot maybe not entitled to hearing because that’s general and set across the board, but in Londoner, it’s more adjudicative because based on what was the value of the property which could be in dispute Bi-metallic Investment v. State Board: Was the raising of taxes without the opportunity to be heard a violation of a Denver property owner’s 14th amendment right to due process of law? i. Holding: NO D.P. VIOLATION. ii. Rule: The concept of due process does not apply to general lawmaking. Where a rule of conduct applies to more than a few people, impracticable that everyone should have a direct voice in its adoption, otherwise government couldn’t operate 1. If all proper state machinery used, then the state can pass a uniform tax without DP violations iii. Notes: High correlation between # parties impacted generality of the facts, and admin v. legis. iv. Difference between Londoner and BiMetallic: Here, matter decided in which all are equally concerned, but in Londoner, small group that were effected, and in each case on individual grounds, so right to a hearing 1. Davis: Party in a tax or assessment has a right to be heard when decision based on individual ground, but not when action is based on general grounds v. Ex: (Douglas) Bolls v. Willingham: Statue designed to keep prices from growing during wartime from scarcity – if rented by specific date, then rate charged at that date has to be fixed, but if after, could change it 1. Holding: SCOTUS upheld procedure – no right to trial-type proceeding because congress can delegate rulemaking to an agency (applies to more than a few peoplenature of general statute) 2. Banzhaf: Application of a specific factual circumstance- what is value of apartment? But no trial – because SMJ- no material facts if affidavits 3. If entitled to trial-type adjudicative hearing, not before agency, can be remedied if given de-novo review before the court Minnesota State Board: How would requiring opportunity to be heard be defined and enforced? Impossible – government would “grind to a halt” so focus on prudential concerns i. Rule: Constitution does NOT grant members of the public a right to be heard by public bodies making decisions of policy (right to speak doesn’t mean right to listen) ii. Holding: In a republic that direct public participation in government policymaking is limited – disagreement should be done at the polls Coniston Corporation v. Village of Hoffman Estates: Coniston said that their DP was violated when Village’s Board refused to approve a site plan for land development i. Holding: Legislative decision, so no due process violation ii. Rule: Legislature isn’t required to judicial-ize zoning – land use permitting decision is legislative in nature – can range widely over political considerations – open-ended facts and “ill-defined” here, judiciary has to make “more reasoned judgments” which isn’t needed here City of East Lake: Apartment permit denied- Rules said changes in land use had to be approved y majority vote in referendum i. SCOTUS: Referendum isn’t a delegation of power – requirement that zoning has to change with majority vote doesn’t violate constitution because property belongs to people anyway ii. Smoking Referendum: passed in the state, tobacco company said if you get signatures, referendum (5% of population) then automatically statue is held, and would be voted on in next election

1. But different than City of East Lake, if group was small, they could veto something that the state legislative body wanted f. Pro-Eco v. Board of Commissioners: Petitioners protested ordinance that issued a moratorium on building landfills i. Holding: Not entitled to procedural rights. Board is an elected body that acted legislatively – didn’t deny ProEco a permit, enacted generally applicable ordinance ii. Rule: Governing bodies can enact generally applicable laws (legislate) without affording affected parties notice and opportunity to be hard iii. More procedure may be required if legislation affect only a small class of people 1. There was a public meeting, and Pro Eco attended iv. Notes: Prospective, general zoning ordinance, impacted class is large and open, then rulemaking and no adjudicative facts, so no DP requirements 1. But adjudication pretending to be legislation- only one person wants a landfill, and applies a general rule that applies to only one person (ProEco) g. Decatur Liquors v. District of Columbia: Liquor license owner sued DC for an amendment to the liquor code declaring a moratorium on single unit sales i. DC circuit court held that DC didn’t violate it – made a general moratorium on 73 stores in Ward 4 (none of other wards) ii. Holding: Individualized hearings would be impractical and unnecessary – maybe issue if there was a dispute over whether store was included in the zone, but this moratorium achieved the legislative goal – not individualized – no DP violation 1. No adjudicative issues- just link between sales and legislative goal, which is a legislative policy decision – whether there is a problem with drunks is a public policy issue h. Wong Yang v. McGrath: Chinese man arrested for overstaying shore leave as member of a shipping crew – administrative hearing- inspector recommended deportation i. Holding: SCOTUS found that APA applied to deportation hearings- adjudications have serious impact on private rights of individuals 1. Adjudicative proceeding – involved one individual, specific facts 2. Worried there weren’t enough safeguards to prevent arbitrary decisions ii. APA Goals: (1) Ensure greater uniformity of procedure, standardize administrative practice among all agencies (originally McCarran-Summers bill), (2) Change embodying in one person duties of prosecutor and judge (no comingling of functions) 1. APA doesn’t require complete separation of investigating and prosecuting functions- but wouldn’t allow comingling of investigative and decision-making functions in Wong case iii. Rule: Aliens have due process rights in deportation hearings (but APA rarely cited in federal due process cases now) iv. After passage of the APA, said that whenever DP required a hearing, adjudication under the APA would be required – but then Congress amended the APA after this to not require a hearing

i.

**Maybe APA isn’t equipped for the new, complex issues agencies deal with?** Workers Compensation v. Greenwich: Harbor Workers Compensation Act and Black Lung Benefits Act, Dept. of Labor followed “true doubt” rule for claims i. Issue: Whether “Burden of proof” under §556(d) (“except as otherwise provided by statute, the proponent of a rule or order has the burden of proof.”) refers to the burden of going forward (burden of establishing a prima facie claim) OR the burden of persuasion (burden of establishing a preponderance of the evidence) ii. Holding: Department can’t allocate burden of persuasion in a way that conflicts with APA iii. “Burden of Proof” not defined in statute, so construe it from legislative history leading up to 1946 (which was burden of persuasion)

Topic 13: Rulemaking under the APA I. Administrative Procedure Act Overview a. Every agency’s “final disposition” is either a rule or an order i. Rule: Whole or part of an agency statement of general or particular applicability and future effect designed to implement, interpret or prescribe law or policy or describing the organization, procedure or practice requirements of an agency ii. Order: Whole or a part of a final disposition whether affirmative, negative injunctive or declaratory in form, of an agency in a matter other than rule making but including licensing b. APA §553: Rulemaking i. (a) Applies to everything except: Military or foreign affairs, matter relating to agency management (loans, benefits, contracts) ii. (b) General notice, FR publication unless persons affected have actual notice or its excepted iii. (c) Agency has to give people a chance to comment – with or without opportunity for oral presentation (commenting period) c. Hierarchy: Constitution  Statutes by Congress  Regulations by Agencies  Interpretations and guidance documents by Agencies  Advice letters/policy docs by Agencies i. Constitution provides a floor, but not a ceiling (just establishes minimum rights) d. Types of Rulemaking Procedures: i. (1) No Procedure (Procedural Exceptions): No procedure required in certain circumstances 1. Agency’s statutory interpretation rules- not ordering anyone to do anything 2. General statements of agency policy 3. Rules regarding agency’s organization and practice (which offices report where) 4. When agency “for good cause” finds N&C are impracticable, unnecessary or “contrary to the public interest” 5. Other: Military or foreign affairs, management and personnel, loans/K’s, etc. ii. (2) Notice & Comment: Provides some ground between nothing and full trial (most common) 1. If agency wants to make a rule (or amend, modify rule) then publishes NPR in FR – what it wants as a rule, plus statement of its basis (jurisdiction) and purpose (why agency needs the rule) 2. Provides an opportunity for any interested party to present their views (factual or legal or policy considerations) 3. INFORMAL RULEMAKING iii. (3) Adjudicative Rulemaking: Must have adjudicative procedure (find facts) before they have to promulgate the rule – required by statute to incorporate an evidentiary proceeding – more rules have far reaching economic, industry consequences 1. Lobbyists have found it’s a good way to interfere and challenge it even if you won’t win on the merits (paralysis by analysis) 2. FORMAL RULEMAKING e. Procedures Used to Create Regulations i. Process: Formulate agency priorities  ID regulatory plan (check with EO 12,866(4))  place on agenda  formulate draft analysis (submit to OIRA, revision if needed)  publish Notice for Potential Rulemaking  consider public comments  change/or publish 1. Scalia: “Constant and accelerating flight away from individualized, adjudicatory process to generalized disposition through rulemaking” 2. Not focused on one party like adjudication, maybe more efficient because doesn’t have to re-look at similar facts ii. Judges can rarely require procedural protections beyond those outlined in the APA, specific statute’s requirements or agency’s own regulations iii. If authorized by statute and adopted, regulations have legally binding effect on the gov’t f. Formal v. Informal Rulemaking

i. Whether it’s formal or informal depends on whether rules are required by statute to be made on the record after opportunity for an agency hearing – depends on organic statute under which the agency is operating 1. Agencies try to avoid formal rulemaking- (1) abandon program, (2) develop techniques to reach same regulatory goal without a hearing, or (3) promulgate noncontroversial regulations through negotiation and compromise ii. Informal: APA §553: Notice-and-comment rulemaking, most commonly used today 1. iii. Formal: APA §§556 & 557: Formal rulemaking is on-the record process similar to a trial 1. Rarely used today, common when agency wanted formality to require testing of agency assumptions through cross-examination, g. US v. Florida Railway: Interstate Commerce Commission issued a regulation establishing incentive rates to send empty freight cars back to owners i. Rule: UPHELD agency’s procedure- just because the organic statute has the word “hearing” in the Act, didn’t activate §553(c)’s requirements 1. In a rulemaking proceeding, and statute uses “hearing” presumption against it being an adjudicatory type proceeding – but rebuttable ii. SCOTUS has found that words with the same meaning as “on the record and after hearing” can trigger provisions of §557/§557, but “after hearing” doesn’t meet this 1. “Hearing” in adjudicatory setting normally means one thing, but don’t want to impose it unless congress really meant it- they didn’t use the full magic words iii. Notes: Previous cases had required hearing for ratemaking, but not in individual circumstances – “hearing” isn’t dispositive, but “on the record and after hearing” might be? h. National Petroleum Refiners v. FTC (DC Cir.): Unless legislative history shows clear intent to the contrary, courts should resolve uncertainty about the scope of agency’s rulemaking authority in favor of finding a delegation of full measure of power to agency i. Vermont Yankee v. NRDC: NRC issued Vermont Yankee a license to build a plant in Vermont (1 permit for construction, 1 permit for operation) i. Facts: Rulemaking to decide the spent fuel issue – so wasn’t an issue in the adjudicatory proceeding, rule said it was negligible so no longer in controversy 1. NRDC didn’t want to substitute procedures for adjudication of Vermont Yankee for procedures for rulemaking for spent fuel permitting ii. Issue: Was the NRC allowed to issue a rule on the case’s issue instead of using adjudication procedures to determine the scope of environmental effects at a specific hearing? iii. Holding: Yes. Courts can’t impose additional procedural requirements on an agency that went beyond what was required constitutionally, under the APA, and the governing statute iv. Rehnquist: APA establishes maximum procedural requirements Congress was willing to have courts impose on agencies in conducting rulemaking 1. If agency is making a quasi-judicial determination where a small number of people are impacted, sometimes additional procedures may be required to afford aggrieved individuals due process (US v. Florida RR) SO Court remanded to Ct. App. to determine if rulemaking procedures were adequate under APA 2. Don’t want unpredictable judicial review, shouldn’t need as much procedural protection used in adjudicatory hearings for rulemaking v. Rule: When due process clause is not implicated and an agency’s governing statue contains no specific procedural mandates, the APA establishes the maximum procedural requirements a reviewing court may impose on agencies j. NRDC v. EPA (App. Ct. 9th Cir): Logging issue based on the bark and debris created by log bundles on their way to sawmills (significant change in how agency was to enforce rule) i. Holding: The final Rule didn’t afford interested parties the opportunity to comment on whether Alaska’s proposed change in zone of deposit definition conformed to substantive requirements of Alaskan law – needed to include whether change required issuing a conditional permit or a denial of the whole permit

ii. Rule: The law doesn’t require that every alteration in a proposed rule be reissued for notice and comment- draft and final versions don’t have to be identical, BUT a final rule which is different must be a logical outgrowth of the proposed rule 1. Test: Whether interested parties could have reasonably anticipated the final rulemaking from the draft – whether new N&C would give a new opportunity for interested parties to offer comments that would make agency modify the rule iii. Reasoning: Final rule doesn’t have to be identical to the draft, but should be a logical outgrowth of it so the parties reasonably could have anticipated the outcome, but that wasn’t the case here – surprised parties so no adequate opportunity to submit their comments – need next round of N&C to update rule k. US v. Nova Scotia Food (App. Ct. 2nd Cir): Food poisoning issues so FDA issued NPR for smoked or salted fish. Nova Scotia responded – said they would destroy fish if heating it to that level, and so recommend different processing requirements for that fish i. Issue: Claimed FDA used undisclosed evidence in promulgating the regulation ii. Holding: Regulation was invalid because of insufficient procedure, should have disclosed the scientific basis for their determination iii. Rule: If failure to notify interested persons of the scientific research upon which the agency was relying actually prevented the presentation of relevant comment, agency may not be found to have considered “all relevant factors” iv. Reasoning: Agencies have discretion in formulating basis for the rule, but can’t just make it up- have to show the scientific report they’re basing their decision on – and should have acknowledged impact on ‘commercial feasibility’ 1. Prof. Davis wants to include whatever factual information the agencies considered as part of the record for judicial review v. Notes: Sometimes the regulatee who wants to challenge has to go to court, or other times (like here) wait until enforcement action brought, then can challenge regulation l. American Radio Relay v. FCC (DC Cir 2008): FCC adopted rule approving instillation of devices on power lines to transmit broadband internet access, but this interferes with HAM radios 1. Five studies of field tests were uncovered by FOIA request – FCC placed them on the record after rule was promulgated ii. Rule: Agency can’t just cherry-pick the parts of a scientific report that it wants to rely on agency must make the whole record available especially where undisclosed portions might undercut agency’s ultimate decision iii. Holding: No APA §553 requirement that agency disclose other information as part of the N&C – plain text of statute says N&C before issuing a rule, then concise general statement of basis and purpose of rule iv. Notes: Courts upset when there isn’t adequate disclosure, when information is incomplete, added late, etc. – undercuts meaningful N&C and procedural protections 1. How to reconcile Nova Scotia & American Radio Relay & - ammunition to go after the agency after the fact- not always clear what agency should do in rulemaking process 2. If you’re an agency, put as much as possible on the record, allow comment, and “bullet proof the opinion” to not allow regulatory lawyers to delay v. So were they required to have everything on the record or no? m. Independent US Tanker v. Dole: Secretary of Transportation issued a payback rule determining how federal subsidies for building tanker vessels could be paid back i. Issue: Must an adequate concise general statement address how a regulation furthers goal of statute under which its issued? ii. Holding: Notice doesn’t need to be exhaustive, indicate, but the statement needed to indicate major issues of policy raised in the proceeding, why agency chose what they did, why alternatives were rejected

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1. Needed more discussion of how rule meets statutory objective of keeping American merchant marine fleet, why secretary established economic efficiency as most important reasons for the rule (not in statute) iii. Rule: The more complex the proceeding, the more explanation needed in the rule iv. Notes: Maybe the court is reading requirements in, or recognizing that concise general statement of basis & purpose is designed to be an elastic concept US v. Dean (Court of Appeals 11th Cir): i. Facts: Defendant traveled in interstate commerce and failing to register as a sex offender (have to register wherever you are located) ii. Issue: Was the SONRA retroactive rulemaking without notice and comment a valid exception under §553(b)’s “good cause” exception? iii. Reasoning: Good cause exception should be read narrowly but exception is an important safety valve – allowed for temporary gas shortages 1. Circuits split as to whether there is an actual public safety risk in “delay” 2. AG had delayed issuing the rule 7 months already – but this doesn’t matter – agencies had to consider the rule iv. Holding: Good cause because agency had sole discretion in rulemaking- public safety argument validated AG’s bypassing of notice and comment (don’t need emergency if delay could cause real harm) – NO NOTICE & COMMENT NEEDED v. (Concurring): AG failed to show good cause to avoid notice & comment under APA, Congress could have decided on its own if it applies retroactively so Congress didn’t think there was an emergency – but concurs because it was a harmless error – even with notice and comment, SONARA would have been promulgated as it was Utility Solid Waste v. EPA (DC Cir): Involved EPA cleanup of PCB spills – EPA had a rule with stringent standards for spills, then 1998 rulemaking lessened the requirements because of mistake i. Reasoning: The “good cause” exception isn’t an escape clause and is to be narrowly construed – the change here was important and substantive so they should have been given the opportunity to comment 1. If you justify “good cause” here, need: “Time pressures don’t permit N&C, delay is serious, if mistake is minor and inconsequential, if delay would permit improper financial manipulation, don’t publish if all impacted can be named and served/notified, but don’t apply here” ii. Holding: Agency has the inherent authority to correct minor mistakes (but more in adjudication than rulemaking), but this wasn’t an emergency setting that allowed bypassing of N&C- not a time when the goal of the regulation would be defeated by prior notice GE v. EPA (App. Ct. DC Cir): EPA issued a guidance document on how to conduct the PCB risk assessment to decide if they can use an alternative method for disposing of PCB waste i. Rule: If a document expresses a change in substantive law or policy (not an interpretation) which agency intends to make binding or administers with binding effect, can’t rely on statutory exemption for policy statement but must use APA rulemaking procedures ii. Holding: APA PROCEDURES NOT FOLLOWED. The BCK Risk Assessment Review Guidance Document is a legislative rule because it imposes binding obligations on applicants to conform applications to Guidance Document 1. Binding on its face- directed companies to follow two forms of risk assessment and practical effect – required forms of risk assessment iii. Rule: A rule is binding if agency intends it to be, or treats it as such (EPA does in this case), and it is a legislative rule, not guidance document, if it imposes binding obligations. Center for Auto Safety v. NHTSA: Under National Traffic and Motor Vehicle Safety Act, manufacturer has to give recall and offer a free remedy if product has a safety related defect 1. Policy guidance said agency may be ok with letters showing low and high risk areas for the recall, based on objective factors, issued letters but never sued

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ii. Holding: This was a policy statement- NOT A RULE. Under Bennett v. Spear- policy guidelines can’t be final agency action unless they are the consummation of the agency decision-making process AND determine legal rights or consequences 1. Agency never codified regional recall practices in binding regulation iii. Rule: If a policy guideline creates de facto compliance, but not legal compliance, it still imposes no binding legal obligation or right, and so is not a final agency action requiring APA rulemaking N&C before its promulgation. iv. Reasoning: The policy guidelines don’t meet both parts of the Bennett test- don’t determine legal rights, obligations or consequences (not a final agency action) v. Notes: Company can always do a general recall – in Center for Auto Safety- either not require you to do something you’re otherwise required to do, but in GE, you have to do the calculation in one of two ways 1. Two cases used to show no simple line: effect must go beyond agency itself, not just that agency will accept x and z, but that you must do it Air Transport Association v. FAA: Challenge to FAA letter interpreting regulation setting maximum flight time limitations– letter describing how “look back rest” is calculated i. FAA published a notice in FR with intent to enforce existing regulations, trade association challenged, said need N&C because the Letter was a substantive rule ii. Holding: NO N&C NEEDED – letter is an interpretation of its own FAA regulation (exempt) 1. The interpretation was already “fairly encompassed” within existing regulation, the letter doesn’t impose new rights or obligations, and it was the first gloss on the statute’s interpretation, would need N&C if revising an existing interpretation tho iii. Rule: Examine whether interpretation carries the force of law, or whether it spells out a duty already encompassed within the regulation the interpretation references

Rulemaking Initiation & Development a. Rulemaking either begins with (1) agency or, (2) public initiation, (3) or negotiated rulemaking i. Step 1: Decide what issues warrant rulemaking. (Policy judgments, substantive mandate) ii. Step 2: Develop concrete proposals. (Consult with others inside/outside agency) 1. Check with White House’s regulatory plans under E.O. 12866 iii. Staff Organization: (1) Team Model- (most common) team of representatives of all interests in outcome of rulemaking process, (2) Hierarchical Model- single office is responsible for all of rule except final determination of whether it’s consistent with statue, (3) Outside Advisor Model- single office has primary responsibility but calls upon other offices for advice as needed, (4) Adversarial Model- offices with different perspectives are forced to reconcile before issuing rule (Team used most often) 1. EPA- convening a full working group isn’t needed for many rules b. Professional Pilots v. FAA: No measure to distinguish safe/too old pilots so kept 60 i. Holding: Decision not to institute a rulemaking was based on merits of existing Rule – FAA’s retention of rule was still rational (no data on safety of old pilots b/c blocked by rule) 1. Risk of finding out if they’re safe is greater than benefit that having them around longer would provide – court found that the decision was reasonable under the circumstances ii. Rule: Agency refusals to initiate rulemaking are reviewable but lenient standard especially if agency has chosen not to regulate for reasons ill suited to judicial resolution (budget/policy) iii. Notes: Look at Farmworkers and Heckler v. Cheney 1. Could have looked at studies of lay people, probably same for pilots, but pilots already have to go through 6 month tests, or allow it longer in non-passenger flights where safety concern isn’t as great c. Massachusetts v. EPA: SCOTUS reviewed EPA’s decision not to regulate greenhouse gases i. Rule: Agency decisions not to rulemake are different than decisions not to prosecute – less frequent, more legal as opposed to factual, subject to special formalities (including public explanation) which non-prosecutorial decisions are not

ii. Holding: UPHELD decision not to regulate GHG. Decisions not to rulemake are subject to judicial review- but deferential and extremely limited. d. HBO v. FCC (DC App. Ct.): FCC had a three year N&C rulemaking proceeding adopting 4 amendments to rules governing programs that could be shown by paid services like HBO i. Holding: Due process requires setting aside the Commission’s rules because the rule was generated by compromise in ex parte communications – not at the agency’s discretion in deciding what was in the public interest ii. Rule: Communications received before issuance of a formal notice of rulemaking don’t need to be published BUT if that information forms the basis for the agency action, then it must be disclosed iii. Dissent: Overton Park doesn’t require this – nothing in statute requires specific findings or regulations limited to the full administrative record (narrow the holding) e. C&W Fish v. Fox (DC App. Ct.): NOAA issued rule banning certain nets in mackerel fishing i. Request for rulemaking had been repeatedly denied, no new evidence to support a policy change, but new director reversed the decision and approved the ban ii. Rule: Individual should be disqualified from rulemaking only when there has been a clear and convincing showing that the Department member has an unalterably closed mind on matters critical to the disposition of the proceeding 1. Discussion of policy or advocacy on a legal question isn’t sufficient to disqualify an administrator – upholds his decision on the ban iii. Holding: Factual basis for a rulemaking is so closely intertwined with policy judgments that we would obliterate rulemaking if they equated a statement on an issue of legislative fact with unconstitutional prejudgment iv. Notes: You might intentionally appoint people to positions that have a specific bias, so can’t say there is no predisposition even in independent agencies – having a strong opinion on something isn’t enough to invalidate a proceeding, but a bias/financial/prior involvement interest is different

Topic 14: Adjudication under the APA I. Banzhaf’s Steps to Fighting a Case: a. (1) Look at DP, then at the Organic Statute – they spell out what procedures agencies are required to follow (courts can enforce, but not create more under Vermont Yankee) b. (2) Then look at agency’s own procedures, then (at last resort) look at the APA c. When is a “hearing” required to be a formal hearing? i. (1) Statute uses the words “on the record;” ii. (2) If Congress has spoken directly on the precise issue and said that there should be a formal hearing on the record; OR iii. (3) If the agency itself interprets that statute to require a formal hearing on the record iv. Order from adjudication must include findings, conclusions, reasons for decision II. Adjudication under the APA a. Section 555 details procedural requirements for both formal & informal proceedings i. No guarantee of supplying counsel to indigents in agency proceedings ii. b. Formal Adjudication: Statute references APA §554, 556, 557 or states “on the record after opportunity for agency hearing” i. Then the agency is restricted to the record in making its determinations 1. Just like Rulemaking, if they use the exact words, but if less than that, maybe not ii. Entitled to notice, discovery, intervention, settlement/ADR, at hearing, matters of fact and law asserted, evidentiary hearing, heard by an agency member or ALJ iii. Entitled to cross examination “as required for full disclosure of the facts,” sometimes get oral testimony

iv. Still ranges from very detailed, formal hearings, to less formal-formal hearings c. Informal Adjudication: §555- right to notice, right to appear, and can appear with counsel, limited discovery, enforcement of subpoena, prompt explanation of denial, some prior warning or opportunity to correct problems in licensing proceedings (and you don’t get an ALJ) i. If hearings aren’t required to be “on the record” then those relevant formal adjudication APA provisions don’t apply – just APA 555 (plus due process requirements) (Citizens Awareness) ii. APA §555 has provisions applicable to all agency proceedings, but no real specific proceedings for informal adjudication in particular III. Formal Adjudication a. Formal - Includes virtually all elements associated with a trial (listed in 556) i. Seacoast – early approach that has since been discredited (said that “hearing” when used in an adjudicative hearing ordinarily implies a formal hearing, we will presume that “hearing” means a hearing on the record when used regarding an adjudicative proceeding) ii. Citizen’s Awareness – rulemaking could be used to require a scaled-back hearing iii. Chevron – major shift of authority from the courts to the agencies; 2-part test 1. BEFORE CHEVRON – would have applied Seacoast and found that it meant a formal hearing 2. DURING CASE – EPA had interpreted the statute to mean an informal hearing; Court held that the EPA interpretation is reasonable iv. Dominion – overrules Seacoast presumption and applies Chevron analysis; statute that required “an opportunity for a public hearing” b. Seacoast Anti-Pollution v. Costle: Public Service Company wanted permit to discharge heated water into tributary of Gulf of Maine after being run through nuclear generating system i. Don’t need exact “on the record” in statute to trigger APA – what type of hearing did congress intend to provide? 1. Decision is factual, doesn’t set policy, rights of one applicant affected- more adjudicatory than legislative (this statute only required a “public hearing”) 2. Disputed facts – presumption that a hearing is needed for adjudicative proceeding ii. Rule: Unless a statute otherwise specifics, an adjudication hearing subject to judicial review must be on the record iii. Holding: Statute didn’t say that it doesn’t have to be on the record – no indication of contrary congressional intent – so rebuttable presumption toward formal/on the record if the organic statute calls for a “public hearing” iv. Notes: Different than presumption for rulemaking (where presumption is not on the record (South Florida/Vermont Yankee)) c. Citizens Awareness v. US (1st Circuit Court of Appeals): Atomic Energy Act requires a hearing upon the request of any person whose interest may be affected, so NRC interpreted a portion of statute to require a hearing on the record under the APA i. Holding: The degree of formality that a hearing must afford does not necessarily turn on the presence or absence of an explicit statutory directive 1. Absent an explicit directive, if the nature of the hearing intended is clear, that intention governs 2. Seacoast is still good law – APA doesn’t require cross examination, only where required for full and true disclosure of the facts ii. The new “hearing” rules adopted by the NRC are consistent with the APA, so doesn’t matter what kind of hearing the NRC is required to conduct for licensing iii. Rule: There are only minimum hearing requirements under APA (5 USC 55(d): requires that agency provide a hearing before a neutral decision maker and allow each party an opportunity to present his case or defense by oral or documentary evidence, to submit rebuttal evidence, and to conduct such cross examination as may be required for a full and true disclosure of the facts”

1. Agency can repeal that their internal procedures required to those minimum required under the APA (in this case repeal discovery provisions and limitation of crossexamination to where “necessary to ensure an adequate record for decision”) 2. APA doesn’t require specific discovery devices in formal adjudications iv. Concurring: Formal/on the record hearings – must follow APA 554, 556, 557 1. APA leaves agencies with flexibility in tailoring on the record hearings procedures 2. The agency must give notice of legal authority and matters of fact and law asserted. § 554(b). 3. The oral evidentiary hearing must be presided over by an officer who can be disqualified for bias. § 556(b). 4. Presiding officers cannot have ex parte communications. §§ 554(d), 557(d)(1). 5. Parties are entitled to be represented by attorneys. §555(b). 6. The proponent of an order has the burden of proof. §556(d). 7. A party is entitled to present oral or documentary evidence. §556(d). 8. A party is entitled “to conduct such cross-examination as may be required for a full and true disclosure of the facts.” §556(d). 9. Orders can be issued only on consideration of the record of the hearing. §556(d). 10. The transcript of testimony and exhibits is the exclusive record for decision and shall be made available to parties. §556(e). 11. The decision must include “findings and conclusions, and the reasons or basis therefor, on all the material issues of fact, law, or discretion presented on the record.” §557(c)(3)(A). d. Chevron v. NRDC: It was unclear if single factory was stationary source, or if both are single stationary source – difference of interpretation of “stationary source” under CAA i. Rule: A court may not substitute its own construction of a statutory provision for a reasonable interpretation made by the administrator of an agency 1. Step 1: Has Congress “directly spoken to the precise issue” in question? If Congress’ intent is clear- court and agency must defer to that 2. Step 2: If Congress hasn’t addressed the question at issue, and the statute is silent or ambiguous on that issue, ask if the agency’s interpretation is based on a permissible construction of the statute - interpretation upheld if it is reasonable ii. Holding: EPA’s interpretation was reasonable – shift power from courts to agency to decide what is a reasonable policy choice (found congress didn’t have an intent on bubble concept) iii. Notes: Many courts extend Chevron deference to agency determinations about when on-therecord adjudication is required 1. Court has rejected that statutory requirement of a “hearing” triggered formal rulemaking procedures (US v. Florida RR) e. Dominion Energy v. Johnson: Involved a request for a discharge permit: EPA rejected application for permit renewal – refused to grant evidentiary hearing on administrative review i. Rule: APA’s procedures for formal administrative adjudications apply in every case of adjudication required by statute to be determined on the record after opportunity for an agency hearing ii. Holding: Agency’s conclusion that evidentiary hearings are unnecessary and that Congress in using phrase “opportunity for public hearing” didn’t mean to mandate evidentiary hearings seems reasonable – entitled to Chevron deference iii. Under Seacoast would have presumption that when “hearing” is used it means “evidentiary hearing,” but applying Chevron, the agency’s interpretation is given great weight, so court should uphold 1. Seacoast didn’t hold that Congress clearly intended the term “public hearing” in §402 of the CWA to mean “evidentiary hearing” 2. Based its interpretation from the legislative history of the APA – so it was ambiguous because could obviously find no explicit congressional intent

National Cable: A court’s prior judicial construction of a statute trumps an agency construction otherwise entitled to Chevron deference only if the prior court decision holds that its construction follows from the unambiguous terms of the statute and thus leaves no room for agency discretion i. If agency’s decision is going to deny liberty or property – then constitutional due process might come in and require an evidentiary hearing g. Armstrong v. CFTC (3rd Cir): Most adjudicatory hearings aren’t conducted by the agency – conducted by ALJ’s, then the initial determination then goes to agency, who can adopt or not adopt, then issue the final agency order 1. CFTC affirmed ALJ’s decision saying “ALJ reached a substantially correct result” 2. Want to ensure separation of functions under APA §554(d) ii. Conclusory statements/statements that fail to identify what the agency decided are inappropriate (Formal adjudication- looking at what §557 means) iii. Holding: This violates §557(c) because it does not permit intelligent appellate review 1. Summary affirmance of all or part of an ALJ’s opinion must leave no guesswork regarding what the agency has adopted 2. Also, CTFC and ALJ violated §557(c) by not addressing the requirements of the statute for conviction iv. Notes: If you agree with it, accept it all, or disagree with all, but if agency adopts most of it spell out what they disagree with f.

IV.

Administrative Notice a. Rule of Convenience: Requirement that ALJ should take notice of adjudicative facts whenever the ALJ at the hearing knows of information that will be useful in making the decision (looking at whether it’s legislative or adjudicative facts in deciding when notice is appropriate) i. Judicial notice is useful in a trial proceeding, more useful in administrative proceeding, substantially more broad in administrative proceeding b. Castillo v. INS: INS judge denied asylum, said mother was lying and none of the three had wellfounded fear of prosecution because of their political opinions i. Petitioners were given no notice or opportunity to be heard whether notice should be taken or whether political changes relaxed their fears of returning ii. Don’t have juries, so not worried about usurping their functions, want agencies to develop expertise and experience in certain areas, don’t need an expert to tell them things they develop an understanding of (worried about boredom, unnecessary delay) iii. Holding: Board should not have resolved the question of the effect of the change in government on petitioners without giving them notice of its intent to do so and an opportunity to show cause why notice should not be taken, or should have supplemented the record with further evidence 1. The legislative fact of who was in power was debatable – should have had opportunity or petitioners to rebut this iv. Notes: Prof. Davis: Notice of legislative (general law and policy) facts may be taken more liberally than notice of adjudicative (immediate party) facts c. Envirocare v. NRC: Envirocare requested a hearing and to intervene to oppose the amendment for radioactive waste received i. Federal agencies sometimes allow people to intervene in an administrative proceeding even though they wouldn’t have standing to challenge an agency’s final action ii. Whether Envirocare could intervene turns on statutory interpretation – organic statute required Commission to hold a “hearing on the request of any person whose interest may be affected by the proceeding” – so how do you define “interest”? 1. Ambiguous so Chevron applies 2. Petitions for judicial review of denial for motion to intervene DENIED iii. Possible to have standing for admin that is lower than standing requirement for courts, because not limited by Art III

iv. Case: Statute is ambiguous: not clear to what extent congress in 1950s wanted to give standing (especially since standing was restricted at that time) v. Office of Communication of Church: First time associational standing was allowed 1. Issue: Based on Chevron, could the FCC limit the ability review licensing discussions (such as the one at issue in OCCC)? 2. Took place when court encouraged public interest groups to intervene – but in Envirocare, courts read standing more narrowly, began deferring to the agency’s interpretation of the law on standing requirements 3. Distinguish Envirocare from OCCC: Interveners in Envirocare aren’t coming in to protect the public interest, but are their to protect their own economic interests (which the court stresses isn’t part of the statute) V.

Ex Parte Communication & Procedures a. Ex Parte Communication: Oral or written communications not on the public record with respect to which reasonable prior notice to all parties is not given – prohibited under APA §557(d) i. Ask whether the communications are between “interested parties” and “relevant to the proceeding” b. Morgan I (1936): Cases consolidated fixing the maximum rates to be charged by market agencies for buying and selling livestock 1. Statute said “after a full hearing” secretary could fix rates, petitioners challenged because their cases hadn’t been heard separately and the Secretary hadn’t personally heard or considered oral arguments or made the decision ii. Rule: The rule “the one who decides must hear” doesn’t mean the Secretary of the agency has to preside over the hearing, read the whole record, but the person who is deciding has to be familiar with the record 1. Rule doesn’t preclude administrative procedure in obtaining the aid of assistants in the department. To the extent the statue permits it, can delegate to a subordinate. c. Morgan II (1938): Gov’t formulated no issues or statements of its proposed findings – no opportunity to examine findings prepared until they were served with the order (many ex parte communications) i. Rule: Right to a hearing embraces not only the right to present evidence but also reasonable opportunity to know the claims of the opposing party and to meet them 1. Here, there was no specific complaint of government’s claims ii. Issues: Did the ex parte communications invalidate the decision? iii. Holding: NO. While inappropriate, the communications weren’t enough to vacate the proceedings since they were short and were general for the most part. 1. Secretary didn’t listen to oral arguments, read briefs but that’s it, so the hearing examiner’s report must be made a part of the record. d. FTC v. Cement Institute: FTC alleged that the cement group engaged in unfair methods of competition. One cement company thought Commission was prejudiced and biased against the Portland cement industry – Commission refused to disqualify itself i. Rule: Commission has the specialized knowledge that Congress wanted As long as the decision-maker’s mind is not irrevocably made up, then not biased, so don’t need to disqualify. 1. Cement industry had the chance to cross-examine and show trade practices that were under attack which they thought were within the range of legally permissible business activities – so would win on merits regardless of why the case brought ii. Reasoning: If a normal judge has bias, then hears the case, then has to step down for bias, but the ALJ’s are triers of fact, only this one place can hear the case iii. Holding: No denial of DP to allow a judge to hear a case after he expressed viewpoint that a certain conduct was prohibited. This belief, even if true, wouldn’t disqualify the Commission from hearing the case – Commission properly refused to disqualify itself

e. Winthrow v. Larkin: Doctor who preformed abortions was investigated, said combination of investigatory and adjudicatory roles on the Medical Examining Board violated Due Process i. Due process requires a “fair trial” but there was no reason to suspect that board was prejudiced by its investigation 1. Biased if: prosecutor has a pecuniary interest in the outcome, or if he has been the target of personal abuse or criticism from the party before him ii. Adjudicators are presumed to be honest (look at other protections in APA §554(d) that people who investigate or prosecute can’t participate in adjudicating EXCEPT those in an agencyagencies have less presumed bias) iii. Rule: The combination of investigative and adjudicatory functions doesn’t constitute a due process violation, but it doesn’t preclude a court from determining from those specific circumstances that the risk of unfairness is intolerably high f. PATCO v. Federal Labor Relations: - Professional Air Traffic Controllers Organization called members on strike in violation of statute forbidding federal employees to strike their employer i. Statutory prohibition on ex-parte contacts under §557(d). DOJ gave evidence of improper contact between labor leaders and member Applewhaite during PATCO case proceeding 1. (1) Meeting between Member Applewhaite and FLRA GC (Gordon) 2. (2) Lewis’ calls to Fraizer and Applewhaite 3. (3) Applewhaite’s dinner with Shanker 4. Requests for statuses are allowed, but no communication to or from an interested person, not on the public record, relevant to the merits of the proceeding ii. Holding: Do NOT need to vacate FLRA decision – none of communications had an effect on final decision, no corrupt tampering, no party benefited from improper contact, no deprivation of opportunity to refute arguments 1. Presumption of honesty for those serving as adjudicators – no demonstrated inability to fairly decide the case – UPHELD FLRA order 2. Test: Was the agency’s decision-making process because of the improper ex parte communications, irrevocably tainted to as t o make ultimate judgment of the agency unfair to innocent party or to the public interest 3. Look at (1) gravity of the ex parte communication, (2) whether contacts may have influenced agency’s ultimate decision, (3) whether party making improper contacts benefited from agency’s ultimate decision, whether contents of communications were unknown to opposing parties (so no opportunity to respond), (4) whether vacation of agency decision and remand for new proceedings would be useful iii. Remedies: Either disclose the previously withheld information, or make violating party explain why case shouldn’t be dismissed against them g. Pension v. LTV Corp: LTV reorganized pension arrangements without old liabilities i. Holding: The determination was lawfully made by informal adjudication, minimal requirements are set forth in APA §555- doesn’t include elements at issue – but failure to provide them where Due Process Clause doesn’t require them, is not unlawful ii. Rule: Vermont Yankee does apply to informal adjudication – courts can’t impose greater procedural requirements than required under the APA 1. At most, Overton Park suggested that requirement that agency action not be “A&C” imposes a general “procedural” requirement by mandating that an agency take whatever steps it needs to provide an explanation that will enable courts to evaluate the agency’s rationale at the time of the decision. h. SEC v. Chenery: i. Facts: Public Utility Holding Company Act tried to prevent pyramid structure form public utility industries collapsing like in the Great Depression 1. Required notice and opportunity for hearing registered holding company to limit operations of a part of a single integrated public utility system

i.

j.

ii. Test: Reviewing court must look at an agency’s judgment by the grounds invoked by the agency. If the grounds are inadequate or improper, the court can’t affirm action by substituting more adequate or proper basis iii. Court needs to be able to identify “with such clarity as to be understandable” what basis the agency is finding on, so the court can test it against that 1. Approved under the ground of Judicial Authority (didn’t create new rule) 2. On that basis the order COULD NOT stand – Commission didn’t rely on any established principles of law or equity to justify their reorganization order iv. Rule: Chenery I: SEC could only create a new principle of law through rulemaking, BUT in Chenery II: Choice between making policy through rulemaking OR adjudication (ad hoc litigation) lies in the informed discretion of the administrative agency v. Holding: Just because the agency didn’t anticipate this problem, and issue a rule, doesn’t mean that it can’t hear the case – should still deal with problems 1. Every case of first impression has a retroactive effect, whether the new principle is announced by a court or by an administrative agency (unless it produces a result contrary to a statutory design or legal and equitable principles) 2. Court’s review of an agency decision is the same whether the new principle or an established one is used as the basis for the decision 3. Retroactive application may be unfair but not unconstitutional 4. Agencies should, as much as possible, proceed with rulemaking 5. Implication of Chenery is that yes, this choice is reviewable but it is extremely limited vi. Notes: JB: suppose court makes a decision for the wrong reason. The CA will apply “harmless error” if the decision falls under a similar reason. Different for Admin agencies. 1. JB: Make sure to have as many reasons as possible to review-proof decision 2. Courts impose rules with retroactive impacts all the times in private law cases (eg. Finding strict liability where there once wasn’t) 3. Courts however don’t have rulemaking so they have to operate retroactively. Agencies, however, can act prospectively. Is it unfair when they act prospectively instead of retroactively. Basis for part of the holding in this case NRLB v. Bell: Bell refused to bargain with buyers of one of its facilities saying they were outside the collective bargaining process, NRLB said they were allowed to unionize i. Holding: Powell: NLRB can’t reinterpret Act to exclude managerial employees susceptible to conflicts of interest if unionized ii. Rule: Chenery II: An agency can reverse itself and announce new principles in an adjudicative proceeding, so long as there is not significant reliance on the previous precedent. iii. Board isn’t precluded from announcing new principles in an adjudicative proceeding- choice between rulemaking and adjudication is first within the Board’s discretion 1. Adjudication is appropriate in this context – no broad rulemaking that could be used to apply to all situations – very fact-specific factors 2. No fines or damages involved here – no issue from retroactive application 3. People impacted by adjudicatory decision are given full opportunity to be heard 4. Consider: Whether there is strong industry reliance on the existing policy 5. But need complete explanation of the fundamental change in policy because all of Board’s decisions point to the opposite result iv. Holding: (1) Need to remand allow Board apply legal standard to determine status of buyers, (2) Board didn’t need to use rulemaking to find that buyers weren’t managerial employees Bowen v. Georgetown University Hospital: Government reimburses health care providers for costs in treating Medicare beneficiaries – Secretary of HHS can promulgate cost-reimbursement regulation – can have retroactive corrective adjustments i. Holding: Court allows Secretary authority to establish procedure for making adjustments to regulation prescribing computation, but applies to case by case adjudication, not rulemaking

1. Presumption against retroactive adjudicative decisions unless expressly allowed by statute – but no express authorization for retroactive rulemaking – Leg History says prospective authority to set cost limits, not retrospective ii. Scalia (concurring OR DISSENT?): Rules under APA have future effect, not past 1. Rule that has unreasonable secondary retroactivity may be A&C and invalid 2. Can’t look at Chenery II because that was adjudication and this is rulemaking

Topic 15: Scope of Review of Administrative Action I. Standard of Review a. Reviewing Cases: Almost all statutes delegate authority for agencies to decide cases, and also for their decisions to be reviewed by a federal court i. Scope = how much deference a court pays agency ii. Sometimes reviewed “de novo,” if a constitutional issue, court replaces agency’s judgment, but usually give discretion to the agency (assumes agency understands the subject matter best) b. Why is Standard of review so complicated: i. Prof’s Pierce/Davis: Difficult to come up with standards for scope of review 1. Different standards even for the same agency action ii. Initially, lack of notion of scope of review. Courts would avoid making determinations on scope of review by narrowly standing and broadly interpreting timing doctrines. iii. Only scope of review to really come along clearly is the “substantial evidence” test. Once this was completed, courts tried to come up with new standards of review iv. Chevron messed everything up. Still trying to figure out how the decision impacts standards of review that existed v. Agencies sometimes act like juries, legislators, executive as well as a number of actions where they overlap. As a result difficult to draw line for where scope of review is c. Historical Scope of Review i. APA exempts interpretive rules from going through a process 1. Courts generally give little deference (wide scope of review) for interpretive rules, but if they are legislative rules (which normally need N&C), then given very narrow scope of review – usually uphold them 2. Courts, when reviewing legislative in nature (substantive impact) historically have given narrow scope of review, but not looking harder at them 3. Courts, when reviewing interpretive rules, changed even before Chevron, if it’s technical, agencies have more expertise 4. Courts should honor agency’s awareness of what congress intended – close ties between congress and agencies – so more reasonableness test instead of more procedure-focused ii. Hard Look Doctrine: A wider scope of review – because many courts have had a lot of experience with the agencies, and are far more cynical of the agencies iii. Reasonableness Test: 1. Reasonableness test – relevant evidence which a reasonable mind might find adequate to support an adequate fact or conclusion – like the test a judge should apply in deciding if case should go to a jury 2. Like on appeal- could reasonable people have found this? Can go back and change iv. Rightness Test: 1. Court upholds agency decision even if they think it’s correct (legal issues) 2. Applies where agency statute requires adjudicative hearing on the record – applies when agency does conduct adjudicative proceeding 3. Applies to findings of fact in an adjudicative proceeding where rulemaking requires an adjudicative proceeding (but not always)

4. Not always required in situations where it’s not required to be on the record (like airbag rulemaking case) v. Substantial Evidence Test: 1. First Iteration: Agency decision with regard to a fact will be upheld – abandoned. a. No scope of review by court: decision regarding a fact will be upheld by a court (ie. court would always except agency fact-finding) b. Scope of review is virtually null because of the total control over facts 2. Second Iteration: For every finding of fact, we look in the record for some evidence in support of that fact. Provided that there is more than a scintilla of evidence in support of that fact, we will sustain that finding of fact. a. Under this standard, courts would uphold the finding of fact even if there was other evidence that discredited the supporting evidence 3. Modern Iteration: Substantial evidence on the whole record a. Universal Camera. Court looks at both sides. Doesn’t want to secondguess the agency’s finding of facts. b. Applies to rulemaking, not informal adjudication (Overton Park) d. Steps to Decide Proper Scope of Review i. Step 1: Is it Rulemaking or Adjudication? 1. Rulemaking – Is it N&C? Is it adjudicative-like? Is there no proceeding? 2. Adjudicative – Is it formal? Is it informal? 3. Is it neither? ii. Step 2: What is the Nature of the Issue? 1. Facts: adjudicative or legislative facts? 2. Findings: Is the finding on primary inferences or secondary inferences? a. Primary/ basic inferences– how the credibility looked, what their response to the testimony was b. Secondary inferences – inferred from primary facts, make inferences to something for which there are no direct facts c. Should give deference to a court with regard to the basic or immediate facts BUT more deference for derivative or secondary facts – agency has a greater expertise in that area 3. Issue: Is it legal? Factual? A mixed question law/fact? 4. Interpretation: Did agency define statutory term in adjudicative proceeding (eg. Chevron)? Was this determination jurisdictional? e. Shaw Supermarket v. NRLB: Supermarket had a vote, voted against unionizing, but before vote taken, bosses said they would retaliate against collective organizing i. Previous NRLB cases held that employer’s bargaining from scratch statement didn’t amount to threat of regressive bargaining – can’t find no violation in previous cases, and a violation here – very similar facts ii. Rule: An agency has a duty to explain its significant departure from its own prior precedent so that a reviewing court can understand the basis for agency’s action and clearly judge the consistency of the action with the agency’s mandate. 1. Only cases where “bargaining from scratch” comment was found to be a violation was if it was accompanied by discriminatory treatment of labor organizers, which didn’t occur here iii. Don’t require agencies to “microscopically examine prior cases,” but here there was a clear line of precedent which they disregarded f. Universal Camera v. NRLB: Issue over whether an employee had been fired for testifying in support of union’s position in NRLB proceeding or because he was a bad employee i. NRLB’s organic statute said “facts if supported by evidence shall be conclusive” ii. Court interpreted that to be “substantial evidence” – enough adequate to support a conclusion

1. Should still give Board’s decision deference – got to see witnesses, have a more holistic view of the evidence 2. Board’s findings are entitled to respect, but they should be overturned when a record before the Court of Appeals precludes the decision from being justified by the witness’ credibility or informed judgment on the matters 3. If agency disagrees with the primary inferences, will give their findings somewhat less weight because they weren’t there, and didn’t observe, BUT with regard to secondary inferences, the agency’s finding will be given greater weight iii. Holding: A court will defer to a federal agency’s findings of fact if supported by "substantial evidence on the record considered as a whole." iv. APA requires consideration of the whole record – reviewing court is not barred from setting aside a Board decision when it can’t find that the evidence supporting the decision is substantial, when viewed in light of the whole record, including the evidence opposed to the Board’s decision g. NRLB v. Hearst: Whether newspaper delivery boys are “employees” under NRLB Act i. Look at the purpose of the Act (prevent interruption of commerce through strikes), what was congressional intent for worker protection? ii. Holding: NLRB's interpretation of the Act was not erroneous. When an administrative agency engages in "specific application of a broad statutory term in a proceeding in which the agency administering the statute must determine it initially, the reviewing court's function is limited.” 1. Congress entrusted factual determinations of the Board- it’s not the court’s function to substitute its own inferences of fact for the board’s when the latter have support in the record 2. (1) Is it taken on a state-by-state basis? NO- federal uniformity a. Congress obviously didn’t intend “patchwork”- telling agency that it can’t be based upon a state by state basis 3. (2) As a matter of Court’s determination, can’t be based on common law standards a. Don’t look as much at the technical, legal classification and look more at the classification that would accomplish the legislative goals iii. Rule: Board’s determination is to be accepted if it has “warrant in the record” and a reasonable basis in law II.

III.

Review of Interpretive Rules a. Skidmore v. Swift: Employees were hired to answer alarms, but they rarely occurred 1. Whether time falls within or without the Act is a question of fact to be resolved by a finding of the trial court ii. Rule: Rulings and interpretations of the agencies aren’t controlling on the courts, but are a body of experience to which courts can resort to for guidance. Weight of judgment depends on the thoroughness of its consideration, validity of its reasoning, consistency with precedent, and persuasive power iii. Holding: It is the Court’s responsibility to decide if cases fall within or outside of the Act, agency decisions are not conclusive and aren’t an interpretation of the Act which binds a district court - but they are a response to more specialized experience and information 1. Step 1: Interpretive Rule or Legislative? Here it’s interpretive 2. Step 2: Scope of Review? Agency decision is not controlling, wide variation, standard isn’t really helpful Review of Informal Decision-Making a. Since it’s informal, not really as developed a record as would otherwise have b. Citizens to Preserve Overton Park v. Volpe: Statue said that the Secretary “may approve {the road} if no feasible and prudent alternative”

i. Reasoning: Secretary’s post-hoc rationalizations regarding a decision to authorize construction of a high way didn’t provide an adequate basis for judicial review under §706 ii. Marshall: §701 of APA provides that action of each authority of the government is subject to judicial review except where there is a statutory prohibition on review 1. No indication that Congress didn’t want judicial review and no legislative intent to restrict access to judicial review a. No clear and convincing evidence to preclude review, looked at the “no law to apply” test- if no basis for court to rely upon in reviewing the decision, then it’s committed to agency discretion iii. Standard of Review: §707 of APA determines Standard of Review: arbitrary, capricious, abuse of discretion or otherwise not in accordance with the law, OR if the action failed to meet statutory, procedural or constitutional requirements 1. Substantial Evidence- Used when agency action is taken pursuant to rulemaking provision of APA, or based on public adjudicatory hearing a. Not applicable here because not rulemaking, was adjudicative 2. De Novo- Authorized if (1) action is adjudicatory in nature and agency fact-finding procedures were inadequate, (2) independent judicial fact-finding when issues that were not before the agency are raised in a proceeding to enforce non-adjudicatory agency action (this one) iv. Secretary’s decision is entitled to a “presumption of regularity” v. Notes: Can’t use substantial evidence, because no formal findings of fact are required, so substantial evidence test DOES NOT WORK 1. Step 1: Interpretive or Legislative? Informal Rulemaking 2. Step 2: Standard of Review: Arbitrary & Capricious- narrow standard, deferential to the agency – usually applied to statements of policy/appropriateness or judgment, difficult standard to apply a. Probably a “hard look” doctrine case c. Motor Vehicle v. State Farm: Issuing improved standards for motor vehicle safety i. Rule initially required the instillation of seatbelts in all automobiles – later rescinded ii. Issue: Was the Agency’s rescission of the seatbelt requirement standard A&C? iii. Reasoning: Motor vehicle safety standards are to be promulgated under the informal rulemaking procedures of §553 of the APA 1. DO NOT treat revocations of rules the same as refusals to promulgate standards iv. They tried to rely on Vermont Yankee, but court isn’t requiring any procedures for the agency to follow, just identifying a technological alternative under the existing standard v. Holding: A&C because the agency didn’t even explain what uncertainties existed 1. Agency didn’t only not require compliance through airbags, but didn’t even consider airbags as a passive restraint – no findings and no analysis to justify the choice made (airbags were one of two proposed solutions originally) vi. Rule: The Court cannot supply a reasoned basis for the agency’s action that the agency itself has not given – the agency must cogently explain why it has exercised its discretion in a given manner, and an agency changing its course must supply a reasoned analysis vii. Step 1: Agency said it was like petition for rulemaking, with huge deference ot agency but really modification of a rule, so is RULEMAKING viii. Step 2: Standard of Review: Arbitrary & Capricious – part of it might be governed by the substantial evidence – are the finding of fact adjudicative or more legislative? 1. Agency has to provide a “reasoned analysis” so maybe hard look doctrine – did they rely on factors congress didn’t intend for them to consider – does it offer explanation that runs counter to evidence before the agency (which is more of a factual – so it’s a cluster) ix. Dissent: Willing to accept idea that change in administration might be significant enough to justify a change in regulation

d. Chevron v. NRDC (1984): EPA’s CAA passed, different interpretations of “source” under Carter and Reagan – DC Circuit said can’t change interpretation, i. SCOTUS reversed: Case changed the standard of review when an agency interprets a portion within its statute – courts used to give little deference ii. Rule: Unless congress has spoken unambiguously on a the precise issue, then the agency’s interpretation controls unless it is unreasonable 1. Agency interpretation is given controlling weight unless it is arbitrary, capricious, or manifestly contrary to the statute. 2. Step 1: Legislative or interpretive? Interpretive 3. Step 2: Standard of Review? A&C, with two part test e. MCI v. American Telephone: FCC can “modify” any requirement of common carriers obligation to file tariffs with FCC – have to file tariffs and charge only field rates under §203 i. Rule: An agency’s interpretation of a statute is not entitled to deference when it goes beyond the meaning that the statute can bear 1. De-tarrifing policy can be justified only if makes a less than radical change in the Act’s tariff requirement – deregulation was A&C ii. Reasoning: Word “modify” has a connotation of increment or limitation 1. Commission’s desire to increase competition by altering statutory requirements isn’t permissible – agency can’t decide a better method for achieving statutory goal iii. Holding: Elimination of crucial provision of the statute for 40% of a major sector of the industry is too extensive to be considered a “modification” and thus is invalid iv. Step 1: Interpretive v. Step 2: If you strictly uphold Chevron, congress hadn’t spoken directly on the precise issue vi. Notes: “Modify” isn’t a term for which this agency has particular expertise, plus Chevron didn’t enlarge the agency’s jurisdiction, but this would have greatly enlarged their power without requiring additional procedures f. FDA v. Brown: FDA asserted its jurisdiction to regulate tobacco in 1996 i. Holding: O’Connor: FDA’s assertion of jurisdiction was unwarranted – FDA’s approach to cigarettes wouldn’t regulating of advertising and labeling, but not sale wouldn’t make “drugs” safe or take them off of the market 1. No room for tobacco products within FDCA’s regulatory scheme, Congress has passed numerous statutes all based on the fact that FDA has no jurisdiction ii. Rule: Chevron finds that ambiguity in a statute provision is an implicit delegation from Congress to fill in the statutory gap. However, to decide if “Congress has spoken directly” look not just at the statute, but also at the context 1. Congress has repeatedly excluded FDA from authority to regulate tobacco – so they have spoken directly to this issue (even though indirectly) 2. Banzhaf: Thinks its clear that Congress didn’t speak directly on that issue – so should follow Chevron iii. Holding: Congress could not have intended to delegate a decision of such economic and political significance to an agency in so cryptic a fashion iv. Breyer (dissent): Agencies are politically accountable, this decision will be either overturned by congress, or supported by the executive g. SWANCC v. ACOE: ACOE interpreted §404(a) to include authority over an abandoned sand and gravel pit which is habitat for migratory birds i. Issue: Did Congress intend for §404(a) to be extended to these types of water bodies, and if so, is its regulation consistent with the Commerce Clause? ii. Rule: Congress’ definitional use of “waters of the US” does not constitute a basis for reading the term “navigable waters” out of the statute. Where an agency interprets a statute invoking the outer limits of Congress’ power we expect a clear indication from Congress to do so (thus Chevron is not appropriate) 1. There is no clear statement form congress authorizing the extension of Congressional power to cover such a broad area

2. Would impinge upon state’s traditional power to regulate land and water use, and congress specifically wanted to “recognize, preserve and protect primary responsibilities and rights of the states” iii. Holding: No. Congress did not intend such expansive authority to be given to the Corps, and so doesn’t address the Commerce Clause issue. Where an otherwise acceptable construction of a statute would raise serious constitutional problems, the Court will construe the statute to avoid such problems unless such construction is plainly contrary to the intent of Congress iv. Chevron deference is not appropriate – prudential desire not to needlessly reach constitutional issues (creates exception to Chevron’s step 2’s deference), but also think that statue is on its face un-ambiguous so doesn’t need to give Corps any deference v. Stevens/Souter/Ginsburg/Breyer (dissent): Clear case of environmental regulation, not land use regulation, so federalism concerns aren’t relevant h. FCC v. Fox Federal law prohibits broadcasting of “indecent language” i. Issue: Is the FCC’s new rulemaking changing its position a valid exercise of its statutory authority? ii. Rule: An agency does not always need to provide a more detailed justification than would suffice for a new policy created on a blank slate – only needs to if new factual findings are available or when prior policy has engendered reliance that must be addressed iii. Reasoning: Can set aside agency action that is A&C under APA §706, but a court can’t substitute its judgment for that of the agency 1. Scalia: No heightened standard under APA if agency is changing its position a. Can’t just ignore that it’s changing course, still has to articulate its reasons for new position, but doesn’t have to show why this is better 2. Declines to address constitutional first amendment issue- cannon of constitutional avoidance 3. Rational to no longer differentiate between literal and nonliteral uses, require repetitive use of non-literal uses (rational that giving word a safe harbor would lead to more widespread use) iv. Holding: Yes. Commission’s new enforcement policy and order finding broadcast indecent are not A&C. 1. They acknowledged that they were changing course (discussion issue), AND notified that previous holdings were “no longer good law” (reliance issue) v. Notes: Hard look – agency has to look harder at what is before it, or that the court has a harder scrutiny of review 1. Later had inadequate notice of violation – so struck it down for due process, still ducking first amendment issue

Topic 16: The Due Process Explosion- Expansion of Due Process Requirements

Other Information: e. Equal Protection: In some situations they apply rational basis test meaning anything goes. Strict scrutiny a much higher bar.

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