Legislation and Regulation
Huntington, Spring 2021
Corti
I.
Statutory Interpretation
BASIC TOOLS AND RULES
Text
Structure
Purpose
Precedent
Canons of
Construction
Legislative History
1.
Theories of Statutory Interpretation
Textualism
How would a reasonable person
understand the text?
 Common usage
 Look exclusively at the
text, but also admit when
the text is not enough.
Commonalities
Differences
Purposivism
What is the general aim of the
legislation?
 Look to congress’s reasons
for adopting legislation (leg
history- the text doesnt
always express the purpose)
Intentionalism
What would legislatures have
intended in this specific
situation?
 This approach has
fallen out of favor in
more recent years.
Rely on the same tools of construction but each emphasizes different ones
Legislative Supremacy – how judges act/what is their role:
 Faithful Agent vs. Relational Agent
o Faithful Agent- doesn’t look to intent. Plain meaning alone, congress can
write a better law if it wants to (Scalia- textualist approach.
o Relational Agent- implement legislative purpose in unforeseen
circumstances.
Purposivism
 We can’t know what Congress intended in each situation, so what was their broad purpose?
 Spirit vs. letter of the law
o Don’t be nitpicky – what’s the animating spirit of the law
 Figure out the purpose, then interpret the statute to promote that purpose
 Focus on the broad problem being addressed
 Hart and Sacks Approach: Assume the legislature is made up of reasonable persons enacting
reasonable statutes for a reasonable purpose BUT can’t give the words a meaning they can’t bear
Textualism
 Shorter leashes for judges and legislators
o Judges should interpret what’s there
o Legislators should pass more precise laws and not rely on courts to clean up their messes
o Separation of powers
 To respect the legislature, apply the words of the statute
o The legislature can always change statutory text if they don’t like the courts’
implementation
 Scalia
o Textualism is a more democratic method of interpretation bc legislatures are
democratically-elected representatives of the people
o Using purposivism gives the judge more leeway; judges usually end up finding their own
preferences in the statute
o Judges SHOULD NOT consult or rely on legislative history – they may end up reading
their own intent into the legislative history bc you can always find something to support
your particular view
 There is rarely a collective understanding for most issues – Congress is made up
of 535 members!
o Shouldn’t rely on committee reports bc legislators themselves don’t read them; Congress
should be more careful in passing laws
Intentionalism (outdated; has fallen out of favor)
 Court tries to recreate legislature’s intent for the specific fact pattern in front of the judge; may try
to recreate things that aren’t there
 Rector, Holy Trinity Church v. United States (1892): Did Congress mean to exclude pastors
when it criminalized efforts to assist or encourage bringing in foreigners “to perform labor or
service of any kind”?
o Court held that Congress likely did not intend to exclude pastors/ministers; intent was to
stay the influx of cheap, unskilled labor
 “Of any kind” invites broad interpretations, but these can lead to absurd
circumstances
 When statute was passed, there were broad concerns that the importation of
foreign laborers diluted the labor market and lowered wages for all. Congress
wanted to restrict migration of cheap unskilled labor, not a “surplus of brain
toilers” (from testimony before Congress)
 Committee report indicates bill aimed to restrain immigration/importation of
foreign laborers  these immigrants “degrade” US labor, remain isolated from
Americans, live in poverty, and generally do not become citizens
2.
Classic Approach
New Textualism/
Textualism
Legislative Purpose and
Dynamic Statutory
Interpretation
Evolution of Statutory Interpretation
A.
TEXT
TEXT
Plain Meaning
Ordinary vs
Specialized Meaning
Cocktail Party v.
Dictionary Meaning
 Ex:
Presume that Congress used a term or phrase in its ordinary meaning unless
Congress specifies a technical meaning.
 Ex: tomatoes as a veggies in common usage unless specified to be fruit
for technical audience. (tomato case)
Cocktail Party Rule What is the plain meaning where if you used it at a
cocktail party no one would look at you funny.
 Ex:
Dictionary Usage: In recent years supreme court justices have referred to dictionaries
more and more after doing so had gone out of style after the New Deal. Lots of
discussion and disagreement over which words need to be defined by dictionary, which
dictionaries to use, which definition within a dictionary should be used, and whether
dictionary definitions are relevant at all.
 Ex: Taniguchi v. Kan Pacific Saipan (“interpreter”)
Exceptions
Absurdity Doctrine
Scrivener’s Errors
B.
CANONS OF CONSTRUCTION
SEMANTIC CANONS
Generally
Ejusdem
Generis
Expressio Unis
Noscitur a
Sociis
Useful but not determinative. Tool. Meaning of text.
A sibling of noscitur a sociis, ejusdem generis translates as "of the same kind, class, or nature."
When general word follow specific words, the general words are construed to embrace only
objects similar in nature to those objects enumerated by the preceding specific words. The same
is true if the order is reversed. Deployment of ejusdem generis involves a judgment- often a
debatable one- about what it is that makes the times in the series 'similar'.
 See Ali v. Federal Bureau of Prisons ("any other law enforcement officer").
Words omitted may be just as significant as words set froth. "expressio (or inclusio) unius est
exclusio alterius" means "expression (or inclusion) of one thing indicates exclusion of the other".
Basically, the enumeration of certain things in a statute suggests that the legislature had no intent
of including things not listed or embraced.
 Example of non-usage: Court refused to apply this maxim in Holy Trinity since there
was enumerated exceptions and the priest was not one of them.
Words travel in packs. This latin maxim translates to "it is known from its associates". In other
words, light may be shed on the meaning of an ambiguous word by reference to words associated
with it.
Consistent
Usage
 See
See below
Whole Act Rule
Presumption
Favoring Consistent
Meaning
Presumption of
Meaningful Variation
It is reasonable to presume that the same meaning is implied by the use of the same
expression in every part of the act.
Presumption Against
Surplusage
Cardinal rule of statutory interpretation that no provision should be construed to be
entirely redundant.
Further presumption that a change of wording denotes a change in meaning.
Couple with expressio unis- where congress includes particular language in one section of
a statute but omits it in another, it is generally presumed that Congress acts intentionally
and purposely in the disparate inclusion or exclusion..


Ex: “Cattle, pigs, chickens, and other animals.” animals doesn’t mean “all
animals” because the other words would become redundant
As opposed to the Belt and Suspender approach
Rule Against
Interpreting a Provision
in Derogation of other
provisions
An important corollary of the whole act rule is that one provision of a statute should not
be interpretated in such a way as to derogate from other provisions of the statute (to the
extent possible)
 West Virginia v. Casey ("a reasonable attorney's fee")
Title/Preamble of §
Presumption of
Purposeful
Amendment
No Elephants in
Mouseholes
Can provide clues to statutory meaning
Statutory Amendments are meant to have real and substantial effect.
Congress doesn't usually alter fundamental details of a regulatory scheme in vague
or ancillary provisions.
Grammar Rules
Punctuation
Single/Plural +
Male/Female
May vs. Shall
The punctuation canon has assumed at three form (1) adhering to the strict English rule
that punctuation forms no part of the statute; (2) allowing punctuation as an aid in
statutory construction; and (3) looking on punctuation as a less-than-desirable, last-ditch
alternative aid in statutory construction. The third approach seems to have prevailed as the
majority rule. But this canon has not played a major role in SC jurisprudence.
In determining the meaning of any act or resolution of congress, unless the context
otherwise indicates, words importing the singular include and apply to several persons,
parties, or things; words importing the plural include the singular. He also includes She
and vise versa.
When a statute uses mandatory language like "shall", rather than "may", courts often
interpret the statute to exclude discretion to take account of equitable or policy factors.
Again, in ordinary usage the two are often used interchangeably.
And/ Or
Last Antecedent
Terms connected by the disjunctive "or" are often read to have separate meanings and
significance. Another issue is that in ordinary usage these two terms are often used
interchangeable and they mean different things in different contexts.
Referential and qualifying words or phrases refer only to the last antecedent, unless
contrary to the apparent legislative intent derived from the sense of the entire enactment.
- Ex: in a statute providing that "the limitation of an action will not be extended
beyond six years of the act or omission of alleged malpractice by a non-discovery
thereof." here, the thereof only refers to the act or omission of alleged malpractice.
Golden Rule Against "interpreters should adhere to the ordinary meaning of the words used, and to the
grammatical constriction, unless that leads to any manifest absurdity or repugnance, in
Absurdity
which case the language may be varied or modified, so as to avoid such inconvenience, but
no further."
- Be humble. Consider how other people use language. Be helpful to the project
rather than hyper technical.
SUBSTANTIVE CANONS
General
Reflect basic principles of legal system. Carry more weight than semantic canons. Thumb
on scale of value/policy.
How to Use Canons: Three Possibilities
1. Tiebreaker- sometimes courts will treat a substantive canon as merely a
tiebreaker that affects the outcome only it, at the end of the basic interpretive
process, the court is left unable to choose between the two competing
interpretations put forward by the two parties.
2. Presumptions– courts might treat the substantive canons as presumptions
that, at the beginning of the interpretative process, set up a presumptive
outcome, which can be overcome by persuasive support for the contrary
interpretation.
3. Clear Statement Rules– which purport to compel a particular interpretive
unless there is a clear statement to the contrary.
o Clear statement rules when they may be overcome by clear statutory
language
o Super-Strong clear statement rules when they may be overcome only
by extremely clear statutory text (basically a targeted statement of
textual meaning).
In Pari Materia
When similar statutory provisions are found in comparable statutory schemes,
interpreters should presumptively apply them the same way.
Canon of
Constitutional
Avoidance
Federalism
Avoid interpretations that would render a statute unconstitutional or that would raise
serious constitutional difficulties.
 See Zadvydas v. Davis (“reasonable time” detention case)
Interpret Statutes not to encroach upon core areas of state sovereignty
- Presumption against preemption.
Rule of Lenity
Rule against applying punitive sanctions if there is ambiguity as to underlying
criminal liability or criminal penalty. If choosing between two interpretations choose
the more lenient one for the accused.
Absurdity
Courts should rule against the textual interpretation when a literal reading will
produce absurd results.
C.
LEGISLATIVE HISTORY
LEGISLATIVE HISTORY
Types
Committee Reports
Most judges and scholars agree that committee reports should be considered as
authoritative leg history and should be given great weight. Compared to other types of leg
history, this is by far the most used by supreme court in recent times at least.
 Well informed authors
 Accessible documents
 But there are limitations:
o Sometimes there just isn't a committee report!
o Sometimes it is just as ambiguous as the statute itself
o Sometimes the usefulness of certain statements in reports
sold be viewed skeptically.


Successive Versions
of a Bill
Subsequent
Legislative Action or
Inaction

Floor Statements
Hearing Testimony
Purpose


See Blanchard v. Bergeron (“reasonable fee”)
Language taken out & put into the bill
Inaction: Law says X, Court says 2X, Legislature does nothing and by
implication are okay with the interpretation
 Action: Court interprets one way, Legislature uses term again, impliedly
ratifying judicial interpretation
 Treat all of these with a grain of salt since they are highly susceptible to
manipulation.
 May show what drafters heard before deciding the law, concerns, political
dynamic.
Using it for Purpose
 When the bill is passed, legislators implicitly endorse committee reports
 Coherence Counter
o helps discern purpose instead of court judgment, resolves issues.
Reveals how Congress thought about the bill through the process
Legitimacy Counter
o Dictionary is the equivalent, hasn’t gone thru bicameralism or
presentment either - History is not law, but it helps understand
meaning of the statute
Reliability Counter
o It actually restrains judicial activism because it provides a
congressional basis for interpretation
Textualist Critique of
Leg History




Can be used to completely misconstrue a statute based on statements by a few
legislators from committee reports.
Coherence
o Is there really a uniform/specific way to find out intent/desire of
Congress?
Legitimacy
o Is it Consitutional? Doesn’t Judicial Activism undermine
Bicameralism and Presentment?
o The History is NOT law. It is subjective intent of individual
legilsators.
Reliability
o The committee’s views are not reflective of congress as a whole –
no such think as collective intent
o Is it Probative?
o Isn’t it just an expansion of judicial discretion?
Current Role of Leg
History
Balance between traditional use & new textualism
 Focus on the TEXT. If still ambiguous, then look to Legislative History (to
resolve ambiguities)
o Don’t use it to CREATE ambiguities when text is clear
o Sometimes used to understand what sense Congress was using term in
Other Uses of Leg
History
-
Specialized meaning
Context matters
II.
Regulation
A.
Intro to Admin Law
ADMINISTRATIVE LAW
Generally
o
Administrative Agencies are all the authorities and operation units of the government that are not
constitutionally established entities: so not congress, president, or the courts.
o Created by Organic Statute
o They are all agencies even if they go by many names: agencies, departments, boards,
commissions, etc...
o Agencies are agents of the three branches and they must be created by statute.
Two Types of  Independent Agencies
Agencies
 Some agencies are regulatory commissions, headed by mutli-member bodies (free standing
bodies whose members can only be removed by the president for cause). Thus sometimes
called independent agencies.
o Ex: FTC
 Executive Agencies
 Headed by a single administrator who serves at the president’s pleasure.
o Ex: OSHA nested within Dept of Labor
What they do
o Individual agencies can set priorities, administer budgets, make rules, decide cases, and pursue
enforcement actions, and in doing so exercise legislative, executive, and judicial powers that
would be split up at the Constitutional level among the three branches.
o Congress will usually pass a general, broad strokes statute and delegate the development of
standards, adjudication of violations, and promulgation of guidance to a public admin agency or
private group
 Public enforcement has shifted to the bureaucratic model, away from prosecutorial model –
government agency or dept itself adjudicates the individual prosecutions or makes the rules,
and the only role for courts is limited judicial review of what the administrators have done.
 Resulting concern is: Congress is giving its legislative power away to the executive agencies
 Is this an unconstitutional delegation?
Nondelegation o Rule: As long as Congress lays down an intelligible principle to which administrators must
Doctrine
confirm, it is a constitutionally permissible delegation of Congress lawmaking powers.
o See Whitman and Gundy.
o Debate: pg 14 of LR#2
PROS
CONS
 Agencies have greater expertise than Congress
 Less accountable to the people than Congress.
 They can be more efficient than Congress
We cant vote them out directly.
 Less partisan; fewer politics involved; more insulated
 Congress can shift blame to agencies (pass the
from political influence
political buck)
 Able to provide more details
 Agencies susceptible to capture.
 Flexibility – agencies are much more nimble, they can
 Too much flexibility / unbridled discretion
adapt their regs, respond to public comment, etc..
 Arbitrary decision making
So how do we reign
in agency power?
1. Procedural Constraints (APA)
2. Political Control
3. Judicial Review
B.
APA – Procedural Constraints
Procedural Constraints (APA)







The APA is a framework statute. Sets default procedural rules for agencies to follow; it applies unless organic
act says othersie.
What it does substantively can be summarized with 4 headings:
1. Provides that agencies must issue guidance as to their rules and procedures, and organization,
2. States the essentials of the several forms of administrative powers.
3. Detailed requirements for admin hearing and decisions in cases in which statutes require such hearings.
4. Sets forth a simplified statement of judicial review designed to afford a remedy for every legal wrong.
APA's 4 goals according to scholars:
1. The codification of administrative procedure
2. The achievement of uniformity, standardization, and simplification
3. The curbing of arbitrary administrative excesses and
4. The publicizing of administrative acts
Admin agency decisions are rules or orders
 RULES: think statutes
o Forward-looking, broad/general.
o Basic guidelines that apply to all people engaging in that conduct
 Ex: OSHA guidelines re benzene x/ppm
 ORDERS: think judicial decisions; officially—final disposition of a controversy involving statutory or
agency rules.
o Backward-looking, specific/narrower, directly applicable only to a particular party, but still
binding on everyone else.
o Precedential effect- binding for future actors
 Ex: OSHA fines a workplace for violating benzene req.
Formal Rule Making
(APA §§ 556, 557)
Exception not the rule: Only when rules are required
by statute to be made on the record after
opportunity for an agency hearing does formal
rulemaking under §§ 556 and 557 apply.
o Those are the magic words in the organic statute
o Incredibly onerous and burdensome – Ex: FERC
Informal Rulemaking
(§ 553)
Requirements:
o NOTICE -- §553(b)
o COMMENT -- § 553(c)
o PUBLICATION -- § 553(d)
Ex: Dept of Ed (same sex education proposed rule)



Formal Adjudication
§§ 554, 556, 557
Only needed when required by statute (organic or
subsequent)
Orders are precedential
Made by admin judges, boards, commissions, etc...
o Ex: NLRB decision
Informal Adjudication
(Not covered in APA)
 Huge broad category
o Still an order
o Can look very different from agency to agency
o Still backward-looking and applicable only to a
single party
o Ex: Plan B letter
***interpretive rules and policy statements (Guidance Docs) are outside of the matrix.
1.
Notice and Comment Rulemaking
Notice and Comment (Informal) Rulemaking
APA § 553
553(a): Exceptions to notice and comment
 (1) military or foreign affairs function of the US
 (2) matter relating to agency management or personnel or to public property, loans, grants,
benefits, or Ks. (housekeeping, don’t need public weighing in)
553(b): Notice – sets out process for informal / notice and comment rulemaking
 An agency typically issues a notice in the federal register, proposing to take certain action,
providing background data and information, and establishing a period in which interested
members of the public may respond with comments.
 General notice of proposed rule shall be published in Fed Reg unless a person subject thereto
are named and either personally served or otherwise have actual notice thereof in accordance
w/ the law. This notice shall include:
o 553(b)(1): a statement of the time, place, and nature of public rulemaking proceedings; (2)
reference to the legal authority under which the rule is proposed; and (3) either the terms
or substance of the proposed rule or a description of the subjects and issues involved.
 Rule: Interested parties must have the opportunity to make Meaningful Comment. If
proposed rule is based on a scientific decision, the scientific data should be included
in the notice of proposed rulemaking – parties cannot make meaningful comments if
they don’t know what evidence the agency is relying on (purposivist reading - not
actually required by the APA).  See Nova Scotia
 Interpretive Rules Exemption: except when notice or hearing is required by statute, this
subsection does not apply:
o (A) to interpretive rules, general statements of policy, or rule of agency organization,
procedure, or practice; OR
o (B) when the agency for good cause finds (and incorporates the finding and a brief
statement of reasons therefore in the rules issued) that notice and public procedures
thereon are impracticable, unnecessary, or contrary to the public interest. ((???))
553(c): Comment + Concise Statement– interested persons must have opportunity to make comments.
After considering comments, the agency must put a concise general statement of basis and purpose into
the final rule.
 Rule: The concise and general statement in the final rule must include salient comments and
how the agency responded; it should allow observers to understand what major policy issues
were debated and raised and why the agency reacted the way it did. (purposivist - not actually
required by the APA).
 Exam Tips:
o If underlying or organizing statute is silent regarding rulemaking process, use notice and
comment.
***Courts are very deferential regarding content/policy behind a rule, but they are meticulous
regarding procedure.
Also: under 553(c) – formal rulemaking when rules are required by statute to be made on the record
after opportunity for an agency hearing, §§ 556 and 557 of APA apply instead.
Case
Example
Nova Scotia
 NPRM said food must be cooked at high temp. NS said this would ruin their industry and that
the rule should only apply to certain species of fish. FDA ignores their comments and doesn’t



Why have
these
restrictions?






The Final
Rule



Types of
Challenges



give explanation as to why they ignore them. NS brings procedural challenge saying FDA
violated the APA. They did not provide any data to base their decision off of and they tried to
produce it post hoc instead which the court did not like.
Record Rule: on appeal, an agency must rely exclusively on the record made before the
agency to determine the validity of the regulation. (ex; comments, final rule, etc..)
Disclosure Rule: Agency bears the burden of adducing a reasoned presentation supporting the
reliability of its methodology. If the failure to notify interested person of the scientific research
upon which the agency was relying actually prevented the presentation of relevant comment,
the agency may be held not to have considered all relevant factors in violation of § 553(b). See
Nova Scotia.
Response Rule: Must make an effort to respond to comments. It is not in keeping with the
rational process to leave vital questions, raised by meaningful comments, completely
unanswered. (§553(c))
Accountability
Public Participation
Produces a record similar to leg history
o Builds a record for judicial review
o Acts as a defensive maneuver in anticipation of challenge
Improve quality of the rule and work product
Constraint on government power
Political (public) oversight
Concise and general statements are not so concise after all! These are everything but the final
rule language.
The comments are categorized into groups
o Courts want to make sure agency addressed major concerns at least generally – don’t have
to respond to comments individually.
Interim final rule: sometimes there is an interim final rule, which goes into effect immediately
(must be for good cause) but there is still an opportunity to comment. However, agencies
usually keep interim rules unchanged.
Procedural Challenge: Nova Scotia example
Substantive Policy Challenge: primarily look at final rule; may look at record to see what
happened
Note: much harder to win a substantive policy challenge because courts tend to defer to agency
judgment!
Positives
Fairness
Advance planning
Prospectivity
Uniformity
Flexibility
Accessibility and Clarity of
formulation
7. Judicial Review
1.
2.
3.
4.
5.
6.
Critiques
1. Complex and time consuming
2. More expensive
3. Defeats the purpose of having a nimble agency in the first place.
Restricts flexibility and efficiency
4. Incentivizes agencies to find other other, less costly ways to
pursue their policy objectives channeling them into procedures
that have very few safeguards (adjudication or guidance docs,
etc.)
2.
Adjudication
Adjudication
APA §
554
554(a): this section applies, according to the provisions thereof, in every case of adjudication required by
statute to be determined on the record after opportunity for an agency hearing, except to the extent that there is
involved . . .
554(b): Notice Requirement
 Persons entitled to notice of an agency hearing shall be timely informed of (1) the time, place, and
nature of the hearing; (2) the legal authority and jurisdiction under which the hearing is to be held; and
(3) the matters of fact and law being asserted.
RULES
554(c): Hearing Requirement (“due process” ish)
 The agency shall give all interested parties opportunity for (1) the submission of consideration of
facts, arguments, offers of settlement, or proposals of adjustment when time, the nature of the
proceeding, and the public interest permit; and (2) to the extent that the parties are unable so to
determine a controversy by consent, hearing and decision on notice and in accordance with sections
556 and 557 of this time.
No Post Hoc justifications for action, Agency not the court, needs to provide reasoning when taking action,
not after when being reviewed. Must articulate your reasons when you make the decision. (Chenery I)
o Chenery I rule- A reviewing court must judge the propriety of a determination/judgment
(authorized by an agency alone) solely by the grounds invoked by the agency.
o If those grounds are inadequate or improper, the court is powerless to sub in a different more
adequate basis to justify the determination. So that basis relied on must be set forth with such
clarity as to be understandable.
Complete Discretion between RM and Adj. – Agencies have complete discretion in choosing between
notice and comment rulemaking and adjudication. (Chenery II)
- Agencies also have discretion in policymaking – it is okay for an agency to change its mind through
adjudication.
o NLRB v. Bell Aerospace: NLRB had long ruled one way, but was now changing to a new rule
with a new interpretation through adjudication. People had relied on the previous ruling.
 Court held that this was fine. Notihing indicated abuse of discretion or statutory violation
***After Chenery and Bell some agencies rely exclusively on adjudication (like NLRB). Especially since the
APA is silent on any restraints.***
Formal
Formal Adjudication = trial like adversarial hearings that typically involve the agency seeking to impose some
vs.
sort of penalty on a regulated party.
Informal
o Binding -- although they can be appealed
Adj
o Require an opportunity for oral presentation
Informal Adjudication = no formal requirements
o Ex: ruling letter, no action letter, licensing decisions  think plan B letter
o Benefits: More efficient, quicker, better rules that are able to develop over time.
Pros
Cons
 Flexibility, Timeliness, Efficiency, Foreseeability
 Undemocratic - No public participation, less accessibility
o Case-by-case may lead to better decisions
and clarity of formulation
-
o
o
Work their way towards a more general rule
instead of starting with one and having to
clarify issues.
Pragmatic, lets the agency resolve the.
problem in front of them at the time
3.

No notice: affects the entire industry, we want everyone
on notice, transparency from the agency is important.
o Retroactivity?
o Lack of advance planning allowed to industry
o Too much power to agencies
o Less fair than rule making potentially
Guidance Documents
Guidance Documents
APA 553(b)(A)-(B): Exception to N & C

Except when notice or hearing is required by statute, this subsection does not apply (A) to interpre(ta)tive rules, general
statements of policy, or rules of agency organization, procedure, or practice; or (B) when the agency for good cause
finds (and incorporates the finding and a brief statement of reasons therefor in the rules issued) that notice and public
procedure thereon are impracticable, unnecessary, or contrary to the public interest.
Substantive/Legislative Rule: introduces a new legal requirement; legally binding
 Rules passed through formal process or notice and comment; also includes adjudications.
 Rule When agency is first articulating a new obligation, it has to follow the relevant APA process (See
American Mining).
Colloquially referred to as Guidance Documents:
Interpretive rules- clarifies existing legal duty; legally binding; “what we meant”
 Interprets statute OR agency action (rule/adj)
 Provides greater understanding to an existing legal duty
 Rule: When agency is further articulating/refining an existing legal obligation (like through issuing an interp
rule), the agency does NOT have to go through the whole APA process again (American Mining)
Statement of policy- statements issued by an agency to advise the public prospectively of the manner in which the
agency proposes to exercise discretionary power; “how we might enforce it”
 States how the duty will be enforced; non-binding on both the agency or the regulated entity.
 Can be issued at any time w/out comment period; agency only obliged to provide an explanation adequate
enough to give the reviewing court a basic understanding of the action.
 Describes what agency is likely to do in the future, but they can change their mind.
o Ex: GE v. EPA – PCBs Guidance document, bound both outside entities to use certain reporting
methods and bound the agency to accept certain methods of reporting/measuring.
APA § 553(b)(A): exempts interpretive and statements of policy from notice and comment requirements
 §552(a)(1)(D) requires that they be separately stated and currently published in the federal register for the
guidance of the public when they are of general applicability.
Determining
1. In the absence of the rule would enforcement be impossible?
if a rule is
2. Has the agency published the rule in the CFR?
substantive:
3. Has the agency explicitly invoked its general leg authority?
o Could be in (1) preamble or (2) in actual statute at beginning of CFR language.
4. Does the rule effectively amend a prior leg rule?
**If yes to any of these, it is a legislative, not interpretive rule**
Example
Dear Colleague letter on sex discrimination (Obama years)
o Uses mandatory language to clarify “prompt and equitable resolution”
 Disclaims that it is a substantive rule by inserting a footnote
 Implications: investigations, adjudicative/appellate review, cross- exam, fact-finding under
preponderance of evidence standard.
Then Trump rolls it back
o Is that a bug or a feature?
Substantive Rule
Pro: more insulated from
procedural challenge; binding
Interpretive Rule
Pro: quick; just clarifying an existing
duty; binding
Con: onerous, takes a long time, Con: potential procedural
expensive, etc..
vulnerabilities
Statement of Policy
Pro: quick, cheap, flexible
Con: non-binding on both agency and
regulated entity
C.
Political Control
Political Control
Congressional and Presidential Oversight
 Congress- invests in the oversight function to determine whether its laws are being properly applied, its funds well-spent,
and its powers respected.
 President- exerts a measure of control in an effort to assure that agencies minimize overlapping jdxs and conflicting
missions, weigh costs as well as benefits before taking action, and defer to the White House as necessary for faithful
execution of laws.
Congress
Congress wants to make sure its laws are being properly applied, its funds well-spent, and its powers
respected.
 Courts traditionally give Congress broad leeway to engage in aggressive oversight activity in recognition of
Congress’ constitutional responsibility to monitor what the executive branch is doing right or wrong.
 Strategies for Congressional Constraint
o Police Patrol strategy: legislators and their staffs regularly monitor to discover bureaucratic drift
o Fire Alarm strategy: saves congressional resources as members wait to hear the alarm raised by
interested parties upset about agency policy.
 Externalizes oversight; once alarm is sounded, members can begin aggressive oversight and
they can ignore otherwise.
 Methods of Congressional Control
o Oversight Committees
 Each House establishes committees with jdx over different topics; these committees oversee the
agencies
- Can call agency personnel to testify in hearing
o Informal Oversight
 However, most oversight is informal and done outside formal committee hearings
- Lawmakers try to influence agency officials as policy is formulated or may try to
intervene on constituents’ behalf
- Rules prohibit some forms of communication(especially during formal adjudication),
but members of Congress have other ways to communicate with bureaucrats (including
subtle or veiled messaging through media or aides for example)
o Budgeting
 Appropriations: Congress authorizes agencies to do things, but then it also has to give them
money through appropriations.
 Basically can tell agencies what they can with the money they give them.
o Design of Agency Structure
 Ways in which in addition to APA Congress tries to control what agencies do. (adding procedure)
o Confirmation
 Senate plays role in having to confirm top political appointees; typically approves almost all of
them, but even the threat of rejection can be powerful as a result.
 Cons of Leg Oversight
Leg Perspective
Agency Perspective:
- Leg committees are also subject to industry - Oversight hearing may push agencies away from
capture
public oriented agendas – they already have to
- Time spent on peg oversight is time not
deal with division workable strategies and fending
spent on fundraising , casework, or enacting
off industry attack
new programs for constituents (leg
- Vigorous oversight power may lead to
perspective)
overreaching or violation of indiv rights
- Influenced by partisan politics
(Communist witch hunts in the 50s)
-
Presidential The President exerts a measure of control in an effort to assure that agencies minimize overlapping jdxs and
Oversight
conflicting missions, weigh costs as well as benefits before taking action, and defer to the White House as
necessary for faithful execution of laws.
 President has special oversight advantages:
i.
Prez has a national constituency (as compared to Congressional reps) and
ii.
Prez has unique responsibility to superintend the execution of many statutes at once.
 History
- Nixon created OMB
- Reagan’s exec order charged OMB with responsibility of reviewing and approving federal rules from
executive agencies
 Agencies were required to submit “major rules” to OIRA for review ~rules likely to have annual
effect on economy of at least $100mm or result in “major increase” in costs/prices or in “significant
adverse effects” on competition, employment, or productivity.
 Potential benefits had to outweigh potential costs at the time
- Clintons exec order required OMB review for “significant regulatory action” and increased cost-benefit
analysis factors
 Agencies could only propose or adopt regs only upon a reasoned determination that the benefits
justify its costs
 Required reg policy officers (RPOs – OIRA point persons at exec agencies)
- Bush required RPOs to be presidential appointees, no rulemaking without RPA consent.
OMB/
OMB- Office of Management and Budget
OIRA
 Instructed to perform a “quality of life” review, which involved circulating an agency’s proposed rules
related to environmental quality, consumer protection, and certain matters of the public health to other
agencies for comment and subsequent feedback.
CostBenefits
Analysis
OIRA  Sits within OMB and oversees and coordinates regulatory policy. OIRA reviews “significant regulatory
action” and agency is responsible for engaging in a CBA to justify such action, which is very detailed and
submitted to OIRA.
i.
What is significant regulatory action?
 rules likely to have annual effect on economy of at least $100mm or result in “major
increase” in costs/prices or must be submitted to OMB/OIRA for approval.
ii.
Process:
 Rule goes to OIRA, they circulate I to affected orgs and experts in house who comment;
then back to agency for N & C; then final rule back to OIRA again.
 CBA is not dispositive. Agencies are simply requires to show that the benefits justify
the costs, not that they outweigh them.
 Criticism:
i.
meddles beyond its competence with agencies that are more specialized and expert in relevant facts
and laws
ii.
OIRA unduly politicizes the regulatory review process bc of its intimate ties to White House
iii.
White House has its own policy preferences that may conflict with agency’s.
iv.
Agencies would have a lot more latitude in policymaking if not for OIRA
v.
Agencies may use guidance docs to bypass N&C but not OIRA.
 Pros
o Forces administrator to ID goals
o Allows for empirical comparison of alternatives
o Accountability makes agency decision more transparent because it is made public.
o Makes sure gov only takes those actions with some net benefit to society. We want to make
sure we are using scarce resource to greatest effect. Efficiency.

Cons
o
o
o
o
o
o
Can trivialize future harms  hard to justify spending money to reach future benefits far away
(see climate change)
Costs are often much easier to calculate than the benefits.
Tries to monetize difficult things (eg. Emotional harm)
Easy to manipulate analysis by changing assumptions
Difficult to quantify many factors
Impersonal  but what is the alternative???
D.
Judicial Review of Agency Action
Judicial Review: Generally
Only final agency actions are reviewable. There are four different kinds of challenges to an agency action one can
bring in federal court:
1. Constitutional  attacks delegation (“intelligible principle”) (Whitman)
2. Procedural  didn’t follow APA procedure (ex: Nova Scotia)
3. Substantive Policy w/OUT statutory interpretation State Farm
4. Substantive Policy w/ statutory interpretation  Chevron
5 U.S.C. § 706 Scope of Review
To the extent necessary to decision and when presented, the reviewing court shall decide all relevant questions of law,
interpret constitutional and statutory provisions, and determine the meaning or applicability of the terms of an agency
action. The reviewing court shall–
1. Compel agency action unlawfully withheld or unreasonably delayed; and
2. Hold unlawful and set aside agency action, findings, and conclusions found to be–
A. Arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law;
B. Contrary to constitutional right, power, privilege, or immunity;
C. In excess of statutory jdx, authority, or limitations, or short of statutory right;
D. Without observance of procedure required by law;
E. Unsupported by substantial evidence in a case subject to sections 556 and 557 (formal adj.) of this title
or otherwise reviewed on the record of an agency hearing provided by statute; or
F. Unwarranted by the facts to the extent that the facts are subject to trial de novo by the reviewing court
In making the foregoing determinations, the court shall review the whole record or those parts of it cited by a party,
and due account shall be taken of the rule of prejudicial error.
1.
Substantive Challenge (w/out statutory interpretation)
Substantive Challenge – State Farm
Substantive challenge is a challenge against agency’s decision-making process, but not whether it followed APA
procedure
 If X, Y, and Z are allowed under statute, why did agency choose X?
 If the agency has policy discretion, how did agency exercise that discretion?
Standard of Review  Arbitrary and Capricious [§706(2)(A)]
Arb & Cap Rule: Agency must examine the relevant data and articulate a satisfactory explanation for its action
including a "rational connection between the facts found and the choice made."
 Agency rule is arbitrary and capricious if the agency has:
o relied on factors which Congress has not intended it to consider,
o entirely failed to consider an important aspect of the problem,
o offered an explanation for its decision that runs counter to the evidence before the agency, or
o is so implausible that it could not be ascribed to a difference in view or the product of agency
expertise.
 The court may not supply a reasoned basis for its action that the agency itself did not supply.
State Farm
Takeaway: Rescissions should be reviewed with the same standard as the initial rule.
Facts: statute’s goal was to increase safety in traffic accidents and delegated authority to Secretary
of Transpo. NHTSA issued standard 208 mandating airbags or passive seatbelts. After
administration turnover, new Sec reopened rulemaking. Ultimately NHTSA rescinded 208’s
passive restraint requirement – stated it could no longer find passive restraint requirement would
produce significant safety benefits.
 Holding: decision to rescind was arbitrary and capricious.
o NHTSA never explained why not seatbelts AND why not airbags
o Ignored evidence that people did actually use detachable belts
o Was too quick to dismiss safety benefits of auto seatbelts
 Anything depended on has to be in the administrative record.
o Did not address counterarguments; need to justify their choice, but they didn’t do
that here.
 Concurrence: (Rehnquist) there was a political shift during the process, which is a
legitimate reason to rescind a regulation, that’s how democracy works!
FCC v. Fox
Holding: We find no basis in the APA or in our opinions for a req that all agency action that
changes prior policy be subjected to more searching review.
 The act mentions no such heightened standard
 And State Farm neither held nor implied that every agency action representing a policy
change must be justified by reasons more substantial than those required to adopt a policy
in the first place.
Commerce v.
NY
Pretext:

Which record should the court consider? The OG admin record or the expanded record
ordered by the District Court?
o Rule- While an agency must disclose the basis for its action, judicial review is
ordinarily limited to evaluating the agency's contemporaneous explanation in light
of the existing admin record. Further judicial inquiry into executive motivation's
represents a substantial intrusion into the workings of another branch of gov. A
court may not reject an agency's stated reasons simply because the agency might
also have unstated reasons.
 Narrow Exception- a reviewing court is permitted to order an expanded
record to inquire into the mental processes of an agency decision-maker
based on a strong showing of bad faith or improper behavior.
o The record showed that the Sec wanted to reinstate the citizenship Q and tasked the
agency "to find the best rationale" to do so.
“While an agency is permitted to have both stated and unstated reasons for its decision, an agency
decision will be considered pretextual if the sole stated reason (here Voting Rights Act) 'seems to
have been contrived.”
2.
Agency Statutory Interpretation
Substantive Challenge w/ Statutory Interpretation– Chevron
Skidmore Rule: “Skidmore Respect”rulings, interpretations, and opinions of the agency are not controlling on
courts, but they are a body of experience and informed judgments that courts and litigants may use as
guidance.
Weight of agency judgment depends on:
 Thoroughness of evidence in consideration
 Validity of its reasoning
 Consistency with earlier and later pronouncements
 Catch all – all those factors which give it power to persuade
Facts: πs were firefighters who were required to stay overnight as part of their employment. They were
paid for time they spent responding to alarms, but not paid for any other time.
Chevron
Holding: agency interpretive rule was guide on how to settle such disputes: nothing in statute or court
holdings precluded waiting time from being counted as working time.
Chevron 2 Step:
1. Has Congress spoken directly to the precise question at issue? (ex: what “modify” means)
 If Yes-----end of the matter. Court and agency must give effect to the clearly expressed
intent of Congress.
 If No----proceed to second step.
2. Did congress explicitly delegate authority to agency to interpret a portion of the statute, or did
Congress implicitly leave it to agency to interpret (silence or ambiguity)?
 Explicit Do State Farm: Such regulations are given controlling weight unless they are
arbitrary, capricious, or manifestly contrary to the statute.
 ImplicitWas the agency's statutory interpretation reasonable?
o If Yes---defer to that
o If No----can overturn.
- Note: court may not sub its own stat construction instead of a reasonable
interpretation made by the admin of the agency.
Facts: The EPA reg promulgated to implement the permit req allows a State to adopt a plantwide
definition of the term "stationary source". "stationary source" according to CFR- means any building,
structure, facility, or installation which emits or may emit any air pollutant subject to regulation under the
Act. Allows for a "bubble" interpretation- if an existing plant contains multiple pollution emitting devices,
new ones can be added or existing ones modified if the alteration/addition does not increase the pollution
above the total limit for all the devices combined.
Applied in Chevron:
1. Congress did NOT speak to the interpretation (single vs. bubble). Proceed to step 2.
2. Congress left an implicit gap.
o EPA can’t enforce/enact the Clean Air Act w/out defining what a stationary source is.
Also it does not matter why there is an implicit gap, just that there is.
o Is it a reasonable interpretation?  YES
- Considers competing factors?  YES
MCI
Mead
Kisor
Facts: FCC granted a rate-filing exception to non-dominant carriers: 47 USC §203(b) authorizes FCC to
“modify” any requirement of §203
Holding (Scalia): “modify” is not ambiguous – has connotation of incremental or limited change 
textualist argument.
o Structure this requirement is at the heart of the reg scheme, so Congress couldn’t have meant an
expansive definition of “modify” because the requirement is so important.
o Once Step 1 of Chevron is satisfied, analysis ENDS.
U.S. v. Mead Corp.: Customs could issue ruling letters but wasn’t clear what kind of authority those
letters had and if they should get Chevron deference. Mead imported “day planners” classified as duty-free
but Customs HQ issued ruling letter classifying them as bound diaries subject to tariff.
 Court held that there was no indication Congress intended the ruling to carry the force of law, but
the ruling was entitled to Skidmore respect
o Ruling was still binding on the party, but not on others
o Customs issued 10k-15k rulings per year from 46 different offices – lack of centralized
decision-making seems “not so considered”; also no delegation on face of statute
Mead asks: what did Congress want? Did Congress want the agency to interpret in a way that binds
the public?
Seminole Rock & Auer: give “super deference” when an agency issues an interpretive rule that interprets
their own requirement
 Since this is the agency’s rule, surely they know best
 Courts should not get involved; agencies should interpret their own rules
Courts will defer to agencies!
UNTIL: Kisor!!
Kisor was a marine denied benefits for PTSD, based on the interpretation by the Dept of Veteran Affairs
of its own regulations.
 The lower court Auer-deferred. And the supreme court granted review to determine whether
courts should continue to afford Auer deference to agency interpretations of its own
regulations.
Important Markers to consider when Auer deference is and is not appropriate.
 The regulatory interpretation must be one actually made by the agency. (must be
"authoritative")
o See first full ¶ on 1099 for examples, doesn’t look like subway conductor
would count?
 Agency's interpretation must in some way implicate its substantive expertise.
o That’s why congress delegates some lawmaking authority to them so this
interpretation must implicate the reason for that delegation.
o "so the basis for deference ebbs when the subject matter of the dispute is
distant from the agency's ordinary duties or falls within the scope of another
agency's authority.
o More technical the rules the more sense this makes to defer to agencies
 Agency's reading of the rule must reflect "fair and considered judgment" to receive
Auer deference.
o Which means that a court should decline to defer to a merely "convenient
litigating position" or "post hoc rationalization advanced" to defend past
agency action against attack.
o Also no "unfair surprises" to regulated parties
o So courts almost never give Auer deference to an agency construction
"conflicting with a prior" one.
III.
APA
APA § 553: Rule-Making
(a)This section applies, according to the provisions thereof, except to the extent that there is
involved—
(1) a military or foreign affairs function of the United States; or
(2) a matter relating to agency management or personnel or to public property, loans,
grants, benefits, or contracts.
(b)General notice of proposed rule-making shall be published in the Federal Register, unless
persons subject thereto are named and either personally served or otherwise have actual notice
thereof in accordance with law. The notice shall include—
(1) a statement of the time, place, and nature of public rule making proceedings;
(2) reference to the legal authority under which the rule is proposed; and
(3) either the terms or substance of the proposed rule or a description of the subjects and
issues involved. Except when notice or hearing is required by statute, this subsection does
not apply—
(A) to interpretative rules, general statements of policy, or rules of agency
organization, procedure, or practice; or
(B)when the agency for good cause finds (and incorporates the finding and a brief
statement of reasons therefor in the rules issued) that notice and public procedure
thereon are impracticable, unnecessary, or contrary to the public interest.
(c)After notice required by this section, the agency shall give interested persons an opportunity
to participate in the rule making through submission of written data, views, or arguments with or
without opportunity for oral presentation. After consideration of the relevant matter presented,
the agency shall incorporate in the rules adopted a concise general statement of their basis and
purpose. When rules are required by statute to be made on the record after opportunity for an
agency hearing, sections 556 and 557 of this title apply instead of this subsection.
(d)The required publication or service of a substantive rule shall be made not less than 30 days
before its effective date, except—
(1) a substantive rule which grants or recognizes an exemption or relieves a restriction;
(2) interpretative rules and statements of policy; or
(3) as otherwise provided by the agency for good cause found and published with the
rule.
(e) Each agency shall give an interested person the right to petition for the issuance, amendment,
or repeal of a rule.
(Pub. L. 89–554, Sept. 6, 1966, 80 Stat. 383.)
APA § 554: Adjudication
(a)This section applies, according to the provisions thereof, in every case of adjudication
required by statute to be determined on the record after opportunity for an agency hearing, except
to the extent that there is involved—
(1) a matter subject to a subsequent trial of the law and the facts de novo in a court;
(2) the selection or tenure of an employee, except a [1] administrative law judge
appointed under section 3105 of this title;
(3) proceedings in which decisions rest solely on inspections, tests, or elections;
(4) the conduct of military or foreign affairs functions;
(5) cases in which an agency is acting as an agent for a court; or
(6) the certification of worker representatives.
(b)Persons entitled to notice of an agency hearing shall be timely informed of—
(1) the time, place, and nature of the hearing;
(2) the legal authority and jurisdiction under which the hearing is to be held; and
(3) the matters of fact and law asserted. When private persons are the moving parties,
other parties to the proceeding shall give prompt notice of issues controverted in fact or
law; and in other instances agencies may by rule require responsive pleading. In fixing
the time and place for hearings, due regard shall be had for the convenience and necessity
of the parties or their representatives.
(c)The agency shall give all interested parties opportunity for—
(1) the submission and consideration of facts, arguments, offers of settlement, or
proposals of adjustment when time, the nature of the proceeding, and the public interest
permit; and
(2) to the extent that the parties are unable so to determine a controversy by consent,
hearing and decision on notice and in accordance with sections 556 and557 of this title.
(d)The employee who presides at the reception of evidence pursuant to section 556 of this
title shall make the recommended decision or initial decision required by section 557 of this title,
unless he becomes unavailable to the agency. Except to the extent required for the disposition of
ex parte matters as authorized by law, such an employee may not—
(1) consult a person or party on a fact in issue, unless on notice and opportunity for all
parties to participate; or
(2) be responsible to or subject to the supervision or direction of an employee or agent
engaged in the performance of investigative or prosecuting functions for an agency. An
employee or agent engaged in the performance of investigative or prosecuting functions
for an agency in a case may not, in that or a factually related case, participate or advise in
the decision, recommended decision, or agency review pursuant to section 557 of this
title, except as witness or counsel in public proceedings. This subsection does not
apply—
(A) in determining applications for initial licenses;
(B) to proceedings involving the validity or application of rates, facilities, or
practices of public utilities or carriers; or
(C) to the agency or a member or members of the body comprising the agency.
(e)The agency, with like effect as in the case of other orders, and in its sound discretion, may
issue a declaratory order to terminate a controversy or remove uncertainty.
IV.
Agency Implementation Under the Administrative Procedure ACT: Definitions: 5
U.S. Code § 551 – Definitions
 (4) “rule” means 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 and
includes the approval or prescription for the future of rates, wages, corporate or financial
structures or reorganizations thereof, prices, facilities, appliances, services or allowances
therefor or of valuations, costs, or accounting, or practices bearing on any of the
foregoing;
o Broad, future oriented (meant to dictate future behavior), happen through
rule making, affects everyone in the industry
 (5) “rule making” means agency process for formulating, amending, or repealing a rule;
 (6) “order” means 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;
o Case specific, and after it is decided has precedential value on future cases
o Past issue not probative, enforcement,
 (7) “adjudication” means agency process for the formulation of an order;
 (10) “sanction” includes the whole or a part of an agency— (A) prohibition,
requirement, limitation, or other condition affecting the freedom of a person; (B)
withholding of relief;(C) imposition of penalty or fine; (D) destruction, taking, seizure, or
withholding of property; (E) assessment of damages, reimbursement, restitution,
compensation, costs, charges, or fees; (F) requirement, revocation, or suspension of a
license; or (G) taking other compulsory or restrictive action;
 (11) “relief” includes the whole or a part of an agency—(A) grant of money, assistance,
license, authority, exemption, exception, privilege, or remedy; (B) recognition of a claim,
right, immunity, privilege, exemption, or exception; or (C) taking of other action on the
application or petition of, and beneficial to, a person;
 (14) “ex parte communication” means an oral or written communication not on the
public record with respect to which reasonable prior notice to all parties is not given, but
it shall not include requests for status reports on any matter or proceeding covered by this
subchapter.
APA § 706 Judicial Review: To the extent necessary to decision and when presented, the
reviewing court shall decide all relevant questions of law, interpret constitutional and statutory
provisions, and determine the meaning or applicability of the terms of an agency action. The
reviewing court shall—
(1) compel agency action unlawfully withheld or unreasonably delayed; and
(2) hold unlawful and set aside agency action, findings, and conclusions found to be—
(A) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance
with law;
(B) contrary to constitutional right, power, privilege, or immunity;
(C) in excess of statutory jurisdiction, authority, or limitations, or short of
statutory right;
(D) without observance of procedure required by law;
(E) unsupported by substantial evidence in a case subject to
sections 556and 557 of this title or otherwise reviewed on the record of an agency
hearing provided by statute; or
(F) unwarranted by the facts to the extent that the facts are subject to trial de novo
by the reviewing court.
In making the foregoing determinations, the court shall review the whole record or those parts of
it cited by a party, and due account shall be taken of the rule of prejudicial error.