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USE IRAC FORMAT
Statutory Interpretation Issue (Chevron)
Rule: Agencies often have to interpret statutes in determining what type of rule to adopt, and
these interpretations are subject to judicial review under section 706 of the APA, which directs a
court to hold unlawful agency action “not in accordance with the law” and “in excess of statutory
jurisdiction, authority, limitations or short of statutory rights.” SCOTUS in Chevron v. NRDC
required courts to show deference to agency’s statutory interpretation under certain
circumstances. Under step 1 of the Chevron two step test for judicial review of a rule that
contains a statutory interpretation the court must apply Congress’s statutory language.
Sometimes the court will determine ambiguity of the language by using the “plain meaning test”
where they look to see how an objective observer would understand the text of the statute (ex:
dictionary definition of the word). At other times, the court will start with the language of the
statute, but will also consider the entire stature, and its object and policy (this can include the
legislative history as well).
If the statutory word or words are ambiguous or if the intent of congress is unclear the court will
move to step two. At step two the court should ask whether an agency’s interpretations constitute
a “permissible construction of the statue.” A court defers to an agency’s construction of the term
unless it concludes that the interpretation is unreasonable. Sometimes, SCOTUS avoids the entire
Chevron test and avoids deferring to agency interpretation. In King v. Burrell the court explained
that the deference at step 2 rest on the theory that the statute’s ambiguity constitutes an implicit
delegation by Congress to the agency to fill in the “statutory gaps” but in “extraordinary cases”
there may be evidence to conclude that Congress has not intended that delegation. Reasons to
avoid Chevron may exist if the issue of interpretation presents a “question of deep economic and
political significance” that is central to the statutory scheme. The court may also consider the
agency’s expertise in the underlying policy issue related to the meaning of the statutory term.
Agency Delay
Rule: Section §555(e) of the APA requires that agencies give “prompt notice” of a petition
denial, along with a statement explaining the grounds for denial. §706 of the APA dictates that
courts shall “compel agency action unlawfully withheld or unreasonably delayed.” While the
APA does have a definitions section, it does not define the terms “prompt notice” and
“unreasonably delayed.” Since statutory language is often interpreted by case law, we can look to
Telecommunications Research & Action Center v. FCC for clarification. The court must
determine whether an agency’s delay is so egregious as to warrant mandamus. To do this, the
Court will apply the following test in: (1) the time agencies take to make decisions must be
governed by a rule of reason; (2) where Congress has provided a timetable or other indication of
the speed with which it expects the agency to proceed in the enabling statute, that statutory
scheme may supply content for this rule of reason; (3) delays that might be reasonable in the
sphere of economic regulation are less tolerable when human health and welfare are at stake; (4)
the court should consider the effect of expediting delayed action on agency activities of a higher
or competing priority; (5) the court should also take into account the nature and extent of the
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interests prejudiced by the delay; and (6) the court need not find any impropriety lurking behind
an agency lassitude in order to hold that agency action is unreasonably delayed.
Agency Denial of a Petition
Rule: The scope of review for the denial of a rulemaking petition is very narrow, limited to
ensuring the agency has, "adequately explained the facts and policy it relied on, and that the facts
have some basis on the record." Arkansas Power & Light Co. Once a response for a petition for
rulemaking has been given, its reasons for action or inaction must be based on the authorizing
statute and must be reasoned enough as to not be, "arbitrary and capricious." Massachusetts v.
EPA. As stated in Mass v. EPA, judicial review on agency denying a petition for rulemaking is
highly deferential to the agency and the court “may reverse any such action found to be . . .
arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.”
Exceptions from Notice and Comment
Rule: The APA provides that “rules of agency organization, procedure, or practice” are exempt
from the general notice and comment requirements of section 553.” In JEM Broadcasting
Company, Inc v. FCC, the court states the “the ‘critical feature’ of the procedural exception ‘is
that it covers agency actions that do not themselves alter the rights or interests of parties although
it may alter the manner in which the parties present themselves or their viewpoints to the
agency.” (Substantial Impact Test). The APA’s procedural exception embraces cases in which
“the interests ‘promoted by the public participation in rulemaking are outweighed by the
countervailing considerations of effectiveness, efficiency, expedition and reduction in expense.’”
(JEM: Balancing Test) Further Air Transport Association of America, the Court held that under
the "good cause" exemption, notice and comment procedures are not required if an agency finds
that such procedures would be impracticable, unnecessary, or contrary to the public interest.
Agency’s Lack of Notice
Rule: Under Section 4 of the APA, notice of proposed rulemaking in the Federal Register must
contain “either the terms or substance of the proposed rule or a description of the subjects and
issues involved.” The purpose of this requirement is to ensure that interested parties have a
sufficient description of proposed changes so that they can participate in a discussion about rules
that will ultimately affect them. The final rule cannot be so substantially altered after a comment
period that interested parties were not put on notice which issues were at stake. If the final rule
materially alters the issues involved in the rulemaking or if the final rule “substantially departs
from the terms or substance of the proposed rule,” the notice is inadequate. Chocolate
Manufacturers Association v. Block.. In Block, notice was insufficient when flavored milk was
suddenly prohibited even though it had historically been a permissible part of the diet, no
previous proposals had been made for its removal, and considerable discussion of the risks of
high sugar content in both the proposed rule and preamble were silent on the issue of flavored
milk. The drastic and sudden prohibition of flavored milk was “not in character with the original
scheme or a logical outgrowth of the notice.”
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Ex Parte Communication:
informal rulemaking: Rule: In formal rulemaking the APA places specific prohibition on ex
parte communications (communications made to decision-makers in the agency outside of the
prescribed (and public) procedures. Section § 553, on the other hand does not exclude such
contacts in informal rulemaking. Congress can, and sometimes does prohibit or limit such
contacts in an agency’s mandate, and an agency can adopt prohibitions or limitations on its own.
The Sierra Club ruling ruled that the APA did not generally ban ex parte contact in informal
rulemaking.
informal adjudication: APA prohibits ex parte for formal adjudication. However, there is no
such prohibition for informal adjudication. Ex parte communications is prohibited to someone
involved in decisional process (ALJ, agency head or member of board) from any interested
person outside the agency; or from the agency person to the interested party with respect to the
merits of a particular case that are not made on the record to which all parties had notice.
Interested person is “any individual or person with an interest in the agency proceeding
greater than the general interest the public as a whole may have.” However, in Professional Air
Traffic case, the court held that improper ex parte communications, even when undisclosed in
during agency proceedings, do not necessarily void an agency decision. To determine whether an
agency decision is voidable due to such communications, court must analyze whether, as a result
of the communications, the agency’s decision-making process was irrevocably tainted so as to
make the ultimate judgment of the agency unfair. PATCO set forth factors to be considered: (1)
the gravity of the ex parte communication; (2) if the ex parte communication influenced the
decision; (3) whether the party engaging in the ex parte contact benefitted from it (4) whether the
contents of the ex parte communications was known to the opposing party; (5) would remand
serve a useful purpose.
Judicial Review-Substantial Evidence (SCOPE OF JUDICIAL REVIEW)
The APA mandates a review for substantial evidence for cases of formal rulemaking or formal
adjudication. In the absence of a statute specifying the standard of review, agency actions are
reviewed under an arbitrary and capricious standard. Courts have struggled to define substantial
evidence in meaningful terms. Substantial evidence is more than a mere scintilla. A decision is
supported by substantial evidence only when a reasonable mind could accept it as adequate to
support the conclusion. Universal Camera Corp v. Nat’l Labor Relations Board. The review is
fairly deferential. In making this review the court will look at all relevant evidence in the record,
that both support the agency’s determination and undercut the determination.
Relevance of ALJ’s Findings
Although an agency may conduct formal rulemaking or formal adjudication itself, it is far more
common to use an ALJ, who makes factual findings and a recommended, or initial, decision.
Although the APA provides that the agency may ultimately make any decision that it could have
made had it heard the evidence initially, the ALJ’s factual findings are part of the record for
judicial review. The agency is not required to accept the ALJ’s factual findings, but it may not
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completely ignore them, and must provide some explanation for reaching a different conclusion.
Although reviewing courts defer to the findings of the agency, not the findings of the ALJ, courts
will give greater scrutiny to agency decisions that overturn the decision of the ALJ, especially for
findings that the ALJ was uniquely situated to make, such as determinations of witness
credibility based upon demeanor. [Universal Camera Corp. v. NLRB,
Court Review of the Record
The APA requires a court to review the entire record to determine whether an agency decision is
supported by substantial evidence. A court may not stop reviewing the record as soon as it
encounters substantial evidence supporting the agency decision, but it must continue examining
the record to see if additional evidence casts doubt on the agency decision. [Universal Camera
Corp. v. NLRB
Judicial Review-Arbitrary-and Capricious Review (SCOPE OF JUDICIAL REVIEW)
The APA sets forth a roadmap for judicial review of agency decisions. APA Section 706(2)(a)
states that courts shall hold unlawful and set aside agency action this is “arbitrary, capricious or
an abuse of discretion” . In the absence of a statute specifying the standard of review, agency
actions are reviewed under an arbitrary and capricious standard. The reviewing court must
conduct a “searching and careful” inquiry into the facts to determine whether the agency decision
was the result of a clear error of judgment. However, the agency’s decision is entitled to a
“presumption of regularity.” [Citizens to Preserve Overton Park, Inc. v. Volpe)
. Arbitrary-and-capricious agency action includes:
• reliance on factors which Congress did not intend for the agency to consider,
• failure to consider an important aspect of the problem,
• offering an explanation for its decision that ran counter to the evidence, and
• offering an explanation so implausible that it could not be ascribed to a difference in view or
the product of agency expertise. Motor Vehicle Ass’n v. State Farm Mut. Auto. Ins. Co.,
Exclusions from Judicial Review Under the APA
Section 701(a) of the APA sets forth a basic presumption of judicial review for a party “suffering
legal wrong because of agency action, or adversely affected or aggrieved by agency action,” so
long as no statute precludes such relief or the action is not one committed by law to agency
discretion. The APA further provides for judicial review “of agency action made reviewable by
statute,” and for review of “final agency action for which there is no other adequate remedy in a
court.” The APA’s “generous review provisions must be given a hospitable interpretation.”
Abbott Laboratores v. Gardner. Only upon a showing of “clear and convincing evidence” of a
contrary legislative intent should the courts restrict access to judicial review.
In Abbott, the Court analyzed the legislative history of the regulation and concluded that the
specific review provisions were designed to give an additional remedy and not to cut down more
traditional channels of review. Additionally, a statute’s silence in some areas does not mean
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review is precluded. Only upon a showing of clear and convincing evidence of contrary
legislative intent will review be precluded.
The presumption may be overcome by inferences of intent drawn from a statutory scheme where
the intent to preclude judicial review is “fairly discernible” in the detail of the legislative scheme.
Block v. Community Nutrition. In Block, a regulation provided for judicial review of dairy
regulations by dairy handlers but was silent on whether consumers could participate in these
actions. SCOTUS concluded that the statute did preclude consumers from participating because
of the disruption to the statutory scheme because the handlers could sue via the consumers,
bypassing certain other requirements before judicial review.
Protected Interest (Property and Liberty)See Cheat Sheet
Rule: The Supreme Court in Board of Regents v. Roth, stated: “to have a property interest in a
benefit, a person clearly must have more than an abstract need or desire for it. He must have
more than a unilateral expectation of it. He must, instead, have a legitimate claim of entitlement
to it”.
Denial or adequacy of Due Process)See Cheat Sheet
Rule: In Matthew v. Eldrige the court established the rule that governs all determination of
whether the due process provided was sufficient. First, one must consider the private interest that
will be affected by the official action. Second, consider the risk of the erroneous deprivation of
that interest under the required procedures and the likely reduction of the risk by requiring more
or different procedures. Lastly, consider the government’s interest in using the required
procedures, as opposed to more or different procedures.
Scope of Employment Q:
Rule: In Evening Star Newspaper Company v. Kemp, a taxi cab driver was shot and killed while
on a break, when his coworkers took his handgun out of his cab and began “reckless and
irresponsible horseplay.”Id. The court in Kemp looked at a number of factors to determine if the
employee created “new and added peril[s] to which the employee by his own conduct [had]
needlessly exposed himself.” The court determined that the employee was killed during an
“enforced lull” in his working time, which was condition of his employment. Therefore, the
employee could not be denied benefits because he was not actively engaged in his physical job,
rather this lull in his work was a part of what his employer expected of the employees.
Choice of Adjudication or Rulemaking:
Rule: As long as an agency has the statutory authority to use either rulemaking or adjudication,
the agency’s choice of which method to use is a matter of agency discretion, not to be secondguessed by the courts. Agencies may employ rulemaking to preemptively decide an issue even
when a statute specifically provides for adjudication. SEC v. Chenery Corp. NLRB. V.
Aerospace.
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Chenery rule for retroactivity: “Retroactivity must be balanced against the mischief of
producing a result which is contrary to a statutory design or to legal and equitable principles. If
that mischief is greater than the ill effect of the retroactive application of a new standard, it is
not the type of retroactivity which is condemned by law.” The case of Retail, Wholesale and
Department Store Union v. NLRB set forth five considerations : (1) whether the particular case
is one of first impression (2) whether the new rule represents an abrupt departure from wellestablished practice or merely attempts to fill a void in an unsettled area of law (3) the extent to
which the party against whom the new rule is applied relied on the former rule (4) the degree of
the burden which a retroactive order imposes on a party (5) the statutory interest in applying a
new rule despite the reliance of a party on the old standard
Policy Statements:
Policy statements are issued by an agency to advise the public prospectively of the manner in
which the agency proposes to exercise discretionary power in subsequent adjudication or
rulemaking. A policy statement does not purport to interpret an existing duty in a regulation or
statute, it announces the agency’s intent to adopt a new duty in some future adjudication or
rulemaking (but it is not binding until adopted by those means). The “binding effect” test
distinguishes policy statements from legislative rules: Whether the statement of the agency
imposes a new duty or merely announces the intention to impose a new duty at some future time.
The rule for general statements of policy is that the statement cannot have present effect and does
not impose any rights or obligations. The statement leaves the agency and its decisionmaker free
to exercise discretion. Additionally, the agency’s characterization of its action is not decisive, but
it is a factor that courts consider. See American Hospital Association v. Bowen
Reliance by public on a nonlegislative rule that the government later refuses to follow.
Rule: Estoppel is the reasonable reliance on a definite misrepresentation from an authorized
person, to the claimant’s detriment. The estoppel of the government by courts, based on reliance
of nonlegislative rules and representations is ordinarily not granted. (Richmond) Where there is
erroneous oral or written advice given by a government employee and a private party relies on
such advice, such reliance cannot give way to estoppel if it contradicts a law of Congress.
(Richmond). However, The Court in Heckler stated that a party claiming estoppel must “have
relied on its adversary’s conduct ‘in such a manner as to change his position for the worst.’” The
Court also relied upon a reasonableness requirement, stating that the party claiming estoppel did
not know nor should have known that the government’s conduct was misleading.
Final Agency Action:
Rule: APA § 704 limits reviewability of agency action to that “made reviewable by statute [or]
final agency action for which there is no adequate remedy in a court.” SCOTUS has said whether
agency action is “final agency action” for purposes of judicial review depends on two
conclusions. First, is that the agency’s decision is final in the sense of being the culmination of
the agency’s consideration of the matter and not a tentative preliminary determination. SCOTUS
has given 2 slightly different reasoning behind the second conclusion. In Abbot Laboratories v.
Gardner and again in Franklin v. Massachusetts, the court phrased the second requirement as
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“whether the agency’s actions impact is “sufficiently directed and immediate” and has a “direct
effect…on day to day business.” In Bennet v. Spear, however the court said the “action must be
one by which ‘rights and obligations have been determined’, or from which ‘legal consequences
will flow.’”
Exhaustion
Prior to the passage of the APA, the Supreme Court established a common-law doctrine that a
party seeking judicial review of agency action must first exhaust administrative remedies. This
doctrine still applies to agency actions to which the APA does not apply. Under this doctrine a
party must exhaust all administrative remedies, such as appeals within the agency, before judicial
review is available. Three exceptions exist that allow a party to seek judicial review without
exhausting administrative remedies: (1) impairment of judicial relief, (2) the agency’s inability to
provide the requested relief; and (3) futility due to agency bias or prejudice. McCarthy v.
Madigan.
APA section 704 requires a party to exhaust administrative remedies in only two circumstances:
(1) when expressly provided by statute, or (2) when required by agency rule and the action is
automatically stayed pending appeal., Darby v. Cisneros. A party who does not administratively
appeal an agency action has failed to exhaust administrative remedies only when the relevant
statute or agency rule mandates an administrative appeal. If such an appeal is discretionary, the
party may forgo it and seek direct judicial review. Id.
Ripeness
The doctrine of ripeness precludes judicial review of cases that are not sufficiently ready for
adjudication. In Abbott Laboratories v. Gardner, the Supreme Court devised a two-part test for
determining ripeness: (1) the fitness of the issues for judicial decision; and (2) the hardship the
parties would suffer if the court did not decide the case. Abbott Laboratories v. Gardner. The
Fitness for judicial decision factor considers the extent to which the court is being asked to
decide an appropriate legal issue, as opposed to a factual matter more appropriate for agency
decision. For example, a court does not have the authority to decide whether a particular drug is
safe. However, a court does have authority to review the FDA’s determination that a drug is safe.
Additionally, The greater hardship a party will suffer if a court withholds review, the more likely
it is that the case is ripe for adjudication. Generally, this criterion favors pre-enforcement
judicial review, that is, review of agency regulations that impose penalties for their violation,
without the need to test the regulations by violating them. Abbott Laboratories
Privileged or Confidential Commercial or Financial Information-FOIA
Courts have adopted two tests for determining whether commercial or financial information
supplied to a government agency is confidential, depending upon whether the private party
voluntarily supplied the information to the agency, or was compelled to provide the information.
[Nat’l Parks & Conservation Ass’n v. Morton, Critical Mass Energy Project v. Nuclear
Regulatory Comm’n. For information that a party must supply to an agency, the information is
confidential only if disclosure is likely to either: (1) impair the government’s ability to obtain
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information in the future, or (2) cause competitive harm to the party from whom the information
was obtained. Nat’l Parks. The D.C. Circuit has adopted a different test for voluntarily disclosed
information. Such information is exempt from disclosure only if is the type of information that a
party would not customarily release to the public. Critical Mass Energy
The Sunshine Act
The Sunshine Act applies only to agencies headed by a multi-member commission, that is,
independent regulatory agencies. § 552b(a)(1). The Sunshine Act defines a meeting as the (1)
deliberations of (2) enough members to take action on behalf of the agency, that (3) determine or
result in conduct or disposition of agency business. The Sunshine Act applies only to gatherings
where deliberations occur. Deliberations require discussing agency business. For most agencies
a quorum—usually comprising a majority of commission members—is required to conduct
agency business. A gathering must determine or result in conduct or disposition of agency
business to qualify as a meeting under the Sunshine Act. Gatherings of individuals other than
members, such as subordinates, are also exempt. Under this definition, a meeting occurs when
the discussion between agency members is sufficiently focused so as to cause or be likely to
cause the participating members to form reasonably firm positions regarding matters pending or
likely to arise before the agency. This definition excludes informal background discussions
between agency members but does not require the gathering to result in official agency action.
FCC v. ITT World Communications, Inc.,
FOIA
FOIA requires government agencies to make available to the public certain agency records.
FOIA requires (1) agencies to disclose (2) records to the public, upon a request that (3)
reasonably describes the records and (4) complies with published procedures for requests. [5
U.S.C. § 552(a)(3).] FOIA defines agencies more broadly than the rest of the APA. Under FOIA,
agencies include all executive and independent regulatory agencies, as well as governmentowned or government-controlled corporations and the Executive Office of the President.
However, FOIA’s definition of agency does not extend to the president, his personal staff, or
entities that exist solely to advise the president. FOIA imposes no limitations on who may
request agency records. A party seeking disclosure need not show any need for the information.
Additionally, The exemptions to disclosure are narrowly construed. Agencies have the burden of
proving that records fall into one of the exemptions.
Section 552(b) lists nine categories of information exempt from FOIA disclosure requirements,
known as the FOIA exemptions. These are: 1. classified information; 2. internal agency
personnel rules and practices; 3. matters specifically exempted from disclosure by some other
statute; 4. trade secrets and other privileged or confidential business information that the agency
has obtained from someone else; 5. internal agency documents that would ordinarily be
undiscoverable in a civil action against the agency; 6. personnel files, medical files, and similar
files the disclosure of which would invade personal privacy; 7. records or information compiled
for law-enforcement purposes the disclosure of which could cause harm; 8. certain records
relating to the regulation of banks and other financial institutions; and 9. certain geological and
geophysical information and data.
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Glomar Responses
Agencies may respond to a FOIA request by refusing to acknowledge whether the sought records
exist, if disclosure of the very existence of the records would compromise national security.
Extra INFO
The advantages to adjudication are that
it:
The advantages to rule-making are that
it:
(1) provides flexibility in eliminating the
rule-making burdens;
(1) creates a bright-line rule that is
applicable to all;
(2) the resulting action is only binding to the
parties;
(2) gives sufficient notice so defendants
have a chance to adhere to the new policy;
and
(3) is less time-consuming and less
expensive; and
(4) less likely to garner national attention.
The disadvantages to adjudication are that it:
(1) singles out one defendant;
(2) is only binding on the parties involved;
(3) is not suitable for unforeseeable
problems; and
(4) seems unfair to those singled out
defendants who are punished for violating a
policy without sufficient notice.
(3) is more likely to garner national
attention, which can provide public input.
The disadvantages to rule-making are
that it:
(1) may create rules that are still ambiguous;
(2) is more time-consuming and expensive;
and
(3) can solicit negative attention from those
that oppose the rule.