ADMINISTRATIVE LAW
HEINZERLING | SPRING 2020
I.
INTRODUCTION
WHAT IS AN AGENCY?

Administrative law = law governing the forms, functions, and activities of government agencies
APA § 551(1)
(1) “agency” means each authority of the Government of the United States, whether or not it is within or
subject to review by another agency, but does not include—
 (A) the Congress;
 (B) the courts of the United States;
 (C) the governments of the territories or possessions of the United States;
 (D) the government of the District of Columbia; or except as to the requirements of section 552 of this
title—
 (E) agencies composed of representatives of the parties or of representatives of organizations of the parties
to the disputes determined by them;
 (F) courts martial and military commissions;
 (G) military authority exercised in the field in time of war or in occupied territory

Definition of “agency”
o Dictionary definition
 “Someone acting on behalf of another, or providing a particular service”
 Meet this characteristic: fidelity to the principal  created and acting in response
to congress, constrained also by POTUS and judicial review
 “Having action and capacity to act”
 Can respond to emerging problems in a fact-driven way
 If constrain agencies too much as agents due to their fidelity, then won't have capacity to
act  but if they have too much freedom, then will they act as you want?
o APA §551(1)
 Authority = any officer or board, whether within another agency or not, which by law has
authority to take final and binding action (i.e., rules, adjudications, sanctions) with or
without appeal to some superior administrative body
 Cabinet level officers are "agencies," lesser officials are too if they have sufficient
decision-making authority
 Is POTUS an agency?
o NO  Franklin v. MA - need explicit inclusion of POTUS due to respect for
separation of power and unique position of president/special nature of
the presidency
Franklin v. MA (1992)
Holding: [O’CONNOR] POTUS is not an "agency" under the APA, as there is no express statement subjecting
POTUS to APA review
 Out of respect for the separation of powers and unique constitutional position of the President, find that
textual silence is not enough to subject POTUS to the provisions of the APA  would require an express
statement by Congress
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Where do agencies come from?
o Agencies are NOT required by the Constitution  created by (1) Congressional statute OR (2)
Presidential allocation of resources placed at his disposal by Congress
o Organic act - a legislative act which creates, empowers, defines and limits an agency
Basic structure of agencies
o (1) Ultimate decision-making authority  either single-headed or multi-headed
o (2) Removal authority of agency heads  either executive agency or independent agency
 Executive agencies – those headed by ppl that serve entirely at the pleasure of POTUS and
are subject to unlimited presidential approval
 Independent agencies – those headed by ppl that POTUS cannot remove at will
 Given tenure term by statute, w/ provision authorizing removal earlier by POTUS
for misconduct or cause
o Encompasses things like criminal dishonesty or gross incompetence but
not ordinarily understood to include making policy decisions which
POTUS disagrees with
 Does NOT mean they have no political control—overseen by Congress; also have
judicial oversight. In addition, presidents have begun to cajole/pressure the
independent agencies
o Single-headed agencies are almost all executive agencies and multi-member agencies are almost
all independent
 Single headedness + executive both promote accountability (blame single administrator
for mistakes then POTUS for keeping that administrator)
 Multi-member + independence both promote disinterested professionalism (less
vulnerable to special interest and presidential influence)
Why do we have agencies?
o Expertise
 Congress, POTUS, courts don’t have the necessary scientific/specialized backgrounds
o Some insulation from politics (expertise better trusted than Congress), but mildly accountable
o Continuity
 Permeant civil service staff protected by tenure and not subject to political reprisal
 Thin layer of political appointees at the top
 Institutional knowledge
o Ability to address problems (somewhat) quickly
 Congress is bound by the legislative process
 Courts couldn’t do this work, as they are largely reactive, rather than proactive
o Need some sort of delegation of power
Tensions
o Tension between politics and expertise
o Constitutional status
o Power yet lack of direct political accountability
o We want agencies to get things done (quick, agile, etc.), but we also put in place elaborate
procedures to constrain their (relatively unchecked) power
DISTINCTION BETWEEN RULEMAKING AND ADJUDICATION

Agency exercises authority to make legally binding decisions through:
o (1) RULEMAKING
 Results in a rule/regulation, which functions like a statute
 APA §551(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
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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 (2) ADJUDICATION
 Results in an order, which functions like a court judgment
 APA §551(6) - (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
Why does this distinction matter?
o Has legal implications (i.e. availability of legal review)
o Has process implications
RULEMAKING
ADJUDICATION
General
Specific
(BUT rulemaking can be so specific it only effects a
(BUT can have general effect through precedent)
few entities)
Forward-looking – preventing future conduct
Backwards looking – responding to past action
(BUT legislature often responding to past problems)
(BUT court can issue forward-looking orders)
Reviewable; more procedural hurdles (i.e. public
Non-reviewable
notice and comment)
 THUS: Much overlap between the two categories  distinction important, but very hard to maintain
o Note that even APA conflates two in its definition (note that APA definition not very important)
 Most helpful difference between the two lies in applicability: rules = general; adjudications = specifically
named parties
Londoner v. City & County of Denver (1908)
Facts: The charter of Denver confers upon the city the power to make local improvements and to assess the
cost upon the property specially benefited. After the city paved a street and then taxed Ps for the cost, Ps
brought a suit alleging violation of DP because there was no hearing before the tax was assessed, although Ps
had the opportunity to submit written objections.
Holding: [MOODY] Denver’s process violated DPC  need to have personalized hearings in order to satisfy DPC
requirements
 Where a legislature delegates a process to an agency, DP demands more process—i.e. a chance to be heard
in person and present evidence
 The ability to submit a written comment is not enough on its own—a hearing affords the opportunity for a
conversation; assures the taxpayer someone is actually listening; individuals affected may have access to
special information that will change an agency’s mind on their particular case
Takeaway:
 (1) When a small number of people are exceptionally affected on individual grounds, DP requires that
they be given an individual hearing
 (2) BUT hearing does not need to be equivalent of full judicial proceedings
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Bi-Metallic Investment Co. v. State Board of Equalization of Colo. (1915)
Facts: The Colorado Board of Equalization increased the value of all taxable property in Denver by 40%, thereby
increasing property taxes by 40%. P challenged the assessment as a violation of DP because it had no
opportunity to be heard before the assessment.
Holding: [HOLMES] Where an agency rule applies to a large number of people, DPC does not require that each
person have an opportunity to be heard regarding the rule’s adoption
 “Where a rule of conduct applies to more than a few ppl it is impractical that everyone should have a direct
voice in its adoption…There must be a limit to individual argument in such matters if gov is to go on”
 Distinguishes case from Londoner
o Relatively small number of people vs. large number of people  impractical
o Affected on individualized grounds (personal stories matter) vs. general grounds (could hear
from any one citizen and story would be same)
o Rights are still protected b/c ppl have the power of voting  can exercise control over
legislature if they do not like the rules they pass
 Difference than Londoner: one person aggrieved can't vote someone out of office, large
group have much more ability to act collectively
Takeaways:
 (1) Where an agency rule applies to a large number of people, DPC does NOT require that each person
have an opportunity to be heard regarding the rule’s adoption
Assoc. of Irritated Residents v. EPA (D.C. Cir. 2007)
Facts: EPA signed consent agreements with 2,568 animal feeding operations (AFOs) under which each AFO will
assist in developing an emissions-estimating methodology and the EPA will not pursue actions against AFOs. Ps
argue the agreements are rules disguised as enforcement actions and the EPA did not follow notice and
comment procedures for rulemaking required by the APA
Holding: The agreements do NOT constitute rules, but are enforcement actions/adjudications within the EPA’s
statutory authority and are thus unreviewable by the court
 Agreements only defer enforcement of the statutory requirements temporarily and do not change a rule of
conduct since the EPA can still pursue violations
 Agreements do not express the agency’s implementation of any provisions of the Acts, but implements a
preliminary step to the enforcement of the Acts
 Agreements make no definite statement of enforcement or interpretive practices the EPA will apply in its
regulatory decision-making
Takeaways:
 (1) Agreements to not pursue enforcement actions are NOT rules, but are enforcements
actions/adjudications
 (2) Issue is that it does look like an enforcement action taken alone, but when you clearly look a nearly
3000 of them together, it sure looks like the APA definition of a rule  EPA did this strategically to prevent
review and prevent a public process
THEORIES OF AGENCY BEHAVIOR
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Statutes + court decisions re: agencies reflect theories of agency behavior that are dominant at the time
o Not how ppl should be, but how they are—what motivates agency personnel?
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Different conceptions of agency behavior
o Madison – Federalist No. 51 (1787)
 Government is a reflection on human behavior—"If men were angels, no government
would be necessary”
 People are ambitious and can be corrupted  government structures are
necessary to guard against corruption and desire for power
 "The great difficulty lies in this: you must first enable the government to control the
governed; and in the next place, oblige it to control itself."
 "Check on the checkers" dilemma: we want agencies to act, but we want to
restrain them at the same time.
o Eastman – The Place of the Independent Commission (1928)
 Once independent agency administrators are selected, political affiliation ceases to be of
consequence  different view than Madison
 Critiques:
 Overly optimistic
 Everyone has partisan beliefs
 Congress chooses to make multi-member commissions balanced politically 
doesn’t that indicate that Congress doesn't believe what Eastman is saying?
o Landis – The Administrative Process (1938)
 Agencies should be nimble, have wide authority to deal with the problems of the day
 Lauding the person who says "what can I do about this problem" before saying "what
does the law say I can do?"
 Functionalist approach
 Preserving prerogatives of agencies to take action
 Wary of what the courts purport to be experts in—worried about the courts eliminating
expert agency functions
 Agency no longer for the casual officer seeker  civil servants should be "bred to the
facts" - not politicos, but experts who are responsive to the underlying fact
 Highly technocratic, like Eastman
o Bernstein – Regulating Business by Independent Commission (1955)
 Agency Life Cycle Theory
 (1) Initially begins in an aggressive, crusading spirit; firm with opposition; broad
view of responsibilities; daring and inventive
 (2) Over time, agencies get worn down by industries they are intended to regulate
 inactivity & agency capture theory
o Become like business managers, protective of the industries
o Noll – Reforming Regulation (1971)
 Agency Capture Theory: agencies inevitably become too close to the industries they are
designed to check; system reinforces a pro-industry bias
 How does agency become dominated by entities it’s supposed to be regulating?
 (1) Regulated industry has a concentrated interest in fighting agency decisions
o Greater incentive than general public
o Concentrated vs. diffused general public  public has less incentive and
harder time organizing
 (2) Process through which agency heads are chosen
o Tacit approval by regulated industry—they're the ones who pay attention
 (3) Agencies are dependent on regulated agencies for the information on which
they make decisions
o Agency has to rely on industry to some extent  means:
 Information can be skewed
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 Agency might be inclined to play nice
o Might go one step further than they have to avoid legal fights
o James Q. Wilson – Politics of Regulation (1980)
 Agencies aren’t crusading and aggressive, but are defensive, risk-adverse, and scandal
minimizing
What period are we in now?
o Hard to say there's one view—highly polarized
o (1) “Deep state”
 Across administrations, the civil service will do what it wants  need more political
control
o (2) Appetite to return to technocratic views
 Not as idealistic as earlier periods—still need political controls
 Evidence, fact-based administrative process
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II.
THE CONSTITUTION AND THE ADMINSTRATIVE STATE
SEPERATION OF POWERS
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The administrative state seems to blend all three government functions (legislative, executive, judicial) all in
one body—the agency  is this even constitutional?
Madison, Federalist Nos. 48 & 51 (1787)
o "Power is of an encroaching nature", i.e. those with power will attempt to control everything they
can  need to actively preserve "separate and distinct" quality of the branches of government
o Need to check ambition with ambition
FORMALISM vs. FUNCTIONALISM
o Formalism – the only sharing of powers is where the Constitution permits; otherwise power
must be exercised separately
 See Burns & Markman - "Our system of government, properly viewed, is not ‘separated
institutions sharing powers.' Rather, it consists of three branches assigned different
powers and responsibilities”
 Argument is that it is consistent w/ Constitution
 Branches not permitted to expand its own authority by encroaching upon powers
conferred on another branch
 PROBLEM: this approach basically makes ALL of the administrative state unconstitutional
o Functionalism – flexible approach, b/c what matters is a government that works
 Agencies can exercise all three of the governmental functions
 Inadequacy of simple tripartite form of government to deal w/ modern problems
 Unavoidable given Congress' need to delegate the making of policy for a complex
econ and the equal incapacity (and undesirability) of the courts to resolve all
matters involving "adjudication"
 How do we make this lenient approach work with separation of powers?
 Can have activity elsewhere in government that doesn't belong in one of those
places, as long as the branch overall has the ultimate exercise of that authority
 Read constitution to see that confers authority not on branches, but heads of
branches  left Congress free to make whatever arrangements it deemed
necessary and proper for the pursuit of governmental purposes
 PROBLEM: may be more “realistic,” but does not contain enough safeguards against
abuses of power; does not adequately deal with power “abdication,” only branches
growing at the expense of each other.
o If formalists are right, then a whole lot of our government is unconstitutional. If functionalists
are right, there's a level of discomfort as it all merges together.
 Is there a middle ground?
 Should we undo some of it?
o SCOTUS has gone back and forth on both approaches; has not clearly made up its mind
 Today, block of 5 formalist justices
AGENCIES & ARTICLE I: NON-DELEGATION
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Non-delegation = prohibition on the assignment of legislative power by Congress to the Executive
o Modern administrative state is impossible w/o broad delegations of power; is also where current
structure of government strays farthest from Constitutional design
o Non-enforcement of NDD is the place where Functionalism is most triumphant
o Enforcement of the NDD would have single greatest impact for administrative law
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o
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Major debate today about whether there are any limits left under NDD; if there is, how do we
enforce them?
 Does nondelegation comport with originalist understanding of the constitution?
Non-delegation challenges have succeeded exactly TWICE (both in 1935), but still lives on as a valid principle
of statutory interpretation, still has challenges brought
PRE-NEW DEAL ERA
 Series of NDD challenges to statutes where Congress gave POTUS power to fill in details of statute, with
SCOTUS upholding all statutes
o However, in many of these cases where Congress delegated broad power, POTUS already had
some power (i.e. commander-in-chief)
o Structure was that Congress set out a policy and POTUS/agency would decide when the policy
was triggered based on a fact being found
 Some factors in making decision to trigger; but also a judgement component
 Court sets "intelligible principle" idea in J.W. Hampton, Jr. & Co. v. US (1928): "If Congress shall lay down by
legislative act an intelligible principle to which the person or body authorized to fix such rates is directed to
conform, such legislative action is not a forbidden delegation of legislative power."
o "Common sense and the inherent necessities of the governmental co-ordination" must be
considered  quite functionalist
NEW DEAL ERA
 These two cases are the ONLY time NDD has been used to strike down a statute
o One challenge has been to figure out what these cases mean (they are still good law) in light of
cases that follow
 Is it that Panama just had zero standard, while Schechter delegated to private companies?
Panama Refining Co. v. Ryan (1935)
Facts: §9(c) of the National Recovery Act authorized POTUS to prohibit interstate and foreign transportation of
petroleum produced in excess of limits set by states. POTUS issued an EO to prohibit interstate transportation.
P challenged §9(c) on the ground that it is an unconstitutional delegation of legislative power.
Holding: [HUGHES] “The Congress has declared no policy, has established no standard, has laid down no rule”
which would guide the president’s action under the provision  unconstitutional delegation
 §9(c) gives POTUS an “unlimited authority” to determine policy, to lay down a prohibition or not as he sees
fit, with absolutely no limit or guidance in either direction; no process requirements
 Laying out policy goals in statute is insufficient  don’t constrain authority
 Dangerous to simply "assume" that POTUS will act in the public good  the problem here lies in
Constitutional authority, rather than motive.
Takeaway:
 (1) Where Congress fails to provide ANY limit or guiding principle to the executive or executive agency
charged with carrying out its legislation, it has violated the non-delegation principle.
A.L.A Schechter Poultry Corp. v. US (1935) [“Sick Chicken Case”]
Facts: P convicted for violating "Live Poultry Code” under §3 of the National Recovery Act. Act empowered
POTUS to approve codes of fair competition set by industries upon finding the code didn’t create unfair
competition. LPC was approved by POTUS, and fixed the number of hours for workdays, general labor
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provisions, prohibited unfair methods of competition, etc.  overall, industry codes had sweeping authority
over national economy.
Holding: [HUGHES] The code is an unconstitutional delegation of legislative power
 Act does not define “unfair competition.” Instead, allows industry to propose whatever is wise and
beneficial for the broad purposes of rehabilitation and expansion of their trade or industries  Such a
delegation to industry is utterly inconsistent with the constitutional prerogatives and duties of Congress
 Similarly, Congress cannot delegate legislative power to POTUS to exercise unfettered discretion to
make/approve whatever laws he thinks may be needed or advisable for rehabilitation of industry
o Here, here are no real limits set on the exercise of POTUS' discretion  act does not prescribe
any rules of conduct, has no standards except for a broad, general aim
Takeaways:
 (1) Congress may not delegate legislative power to the executive or a regulated industry without
providing strict standards by which that power should be exercised.
MODERN ERA
 SCOTUS rejected all nondelegation challenges for several years
American Trucking Assoc. v. EPA (D.C. Cir. 1999) /Whitman v. American Trucking Assoc. (2001)
Facts: Under Clean Air Act, EPA administrator set air quality standards “allowing an adequate margin of safety,
as requisite to protect public health.” D.C. Cir. held CAA provision was unconstitutional delegation in because
the EPA had interpreted the statute to provide "no intelligible principle" to guide the agency's exercise of
authority  says EPA needed to have interpreted statute in a way that narrowed its own discretion
Holding: [SCALIA – 9-0]
 Statutes are either unconstitutional or not—not up to agency to correct defect
o Idea that an agency can cure an unconstitutionally standard-less delegation of power is
contradictory—doing so in itself would be an exercise of forbidden legislative authority
 Thus, Q is whether statute is unconstitutional: hold that it is
o "Requisite" is a sufficiently intelligible principle—means "sufficient but not more than
necessary
o Degree of discretion in most agency action—certain degree of discretion (like here) is
acceptable
Takeaways:
 (1) An agency cannot “fix” a non-delegation problem by limiting its own authority
o Removed one avenue for reviving NDD
Gundy v. US (2019)
Facts: There was a circuit split on whether Sex Offender Registration and Notification Act (SORNA) violated the
NDD—under Act, AG is delegated authority to determine whether the Act should apply to ppl convicted before
it was enacted. Congress gave the AG no criteria for making this decision.
Plurality: [KAGAN] Finds that there is an intelligible principle b/c expectation in statute is that AG will register as
many sex offenders as possible
 If SORNA’s delegation is unconstitutional, then most of Government is unconstitutional
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Concurrence: [Alito] Agrees w/ Kagan’s reasoning under the traditional NDD, but thinks it’s time to revisit NDD
Dissent: [GORSUCH]
 First argues that many good things from more thorough enforcement of NDD
o More representative—want lawmakers making decisions, as they are electorally accountable
o Will produce greater deliberation of laws
o Protection of liberty against the encroachment of powers (i.e. law)
 Creates a three-part test for determining whether Congress has unconstitutionally divested its legislative
power:
o (1) Congress can make the policy choices, then may leave it up to executive branch to “fill in the
details”
o (2) Congress can prescribe a rule of conduct, then may make the application of that rule
depend on executive fact-finding
o (3) Congress may assign the executive and judicial branches certain non-legislative
responsibilities
 Current intelligible principle doctrine has no basis in original meaning of constitution
o However, some of the decisions the court has reached under "intelligible principle" may be
consistent with more traditional teachings (i.e. can be squared with 3-part test above)
Takeaways:
 (1) Now have a majority on court who want to revisit and take stronger stance on NDD
o 4 conservatives in Gundy + Kavanagh (see denial of cert in Paul v. US (2020) – noted views
raised "thoughtfully" by Gorsuch in Gundy dissent may warrant further consideration in future
case; also wrote that Congress must expressly and specifically decide major policy questions
itself—can delegate to the agency the authority to regulate and enforce, but cannot delegate
authority to agency to decide the major questions itself)
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Have 5 possible NDD tests
o (1) Intelligible Principle
o (2) Gorsuch’s 3-part test (Gundy dissent)
o (3) Kavanagh’s "major question of econ and political significance"
o (4) Steven's sweeping regulatory authority (Benzene)
o (5) Rehnquist’s fundamental decisions must be made by Congress (Benzene concurrence)
USE OF NDD TO REWRITE STATUTES
 Different use of NDD: not to strike down a statute, but to rewrite it  comes from principle of
constitutional avoidance
o If you see constitutional issue will arise if you don't narrow statute, you trim statute to avoid it
Industrial Union Dep't, AFL-CIO v. Amer. Petroleum Inst. (1980) [“Benzene Case”]
Facts: OSHA Act delegated authority to Labor Sec. to promulgate standards to ensure safe and healthful
working conditions, including regulation of toxic materials. Stds created must be “reasonably necessary or
appropriate to provide safe or healthful employment and places of employment.” Statute required Sec. to “set
the standard which most adequately assures, to the extent feasible, on the basis of the best available evidence,
that no employee will suffer material impairment of health or functional capacity." Sec. promulgated a std for
benzene, which had evidence it was linked to cancer at 10ppm. Took position that for carcinogens, when no
safe exposure level can be determined, must set std as low as feasibly possible while not impairing the viability
of the industries regulated, so set benzene std at 1ppm.
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Plurality: [STEVENS] The Sec. exceeded his authority by setting a standard without knowledge that the new
standard was necessary to provide safe & healthful employment
 Need to find (1) quantitative risk and (2) determine std reasonably necessary or appropriate to reduce risk
to impose regulation
o Here, Sec. did not establish that there was a health risk at 1ppm
 If did not require this finding, the statute would be a sweeping delegation of legislative power that might
be unconstitutional under NDD  a construction of the statute that avoids this should be favored
o Otherwise, OSHA would have the power to impose enormous costs that might produce little,
discernable benefit, given that there are 1000s of substances in the workplace that have been
identified as possible carcinogens
Concurrence: [REHNQUIST]
 Problem is that Congress does not define “extent feasible”  this is an unconstitutional delegation
o Balance between statistical human lives and an industry’s resources in regulating hazardous
substances is a matter of legislative policy, but here it is left to agency w/ no guidance
o Congress can’t delegate fundamental policy choice to agencies  if they do, these policy Qs
will ultimately go to the courts, and courts shouldn't be making such a decision
Takeaways:
 (1) When the court is faced with a provision that appears to be an impermissible delegation of the
authority, it will use tools of statutory interpretation to try to narrow the delegation of power
AGENCIES & ARTICLE II: APPOINTMENTS & REMOVAL
APPOINTMENT OF AGENCY OFFICIALS
Appointments Clause - Art. II, §2, Clause 2
... and [the President] shall nominate, and by and with the Advice and Consent of the Senate, shall appoint
Ambassadors, other public Ministers and Consuls, Judges of the supreme Court, and all other Officers of the
United States, whose Appointments are not herein otherwise provided for, and which shall be established by
Law: but the Congress may by Law vest the Appointment of such inferior Officers, as they think proper, in the
President alone, in the Courts of Law, or in the Heads of Departments.
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Appointment clause in action
o Principal Officers - appointed by POTUS w/ advice and consent of Senate
o Inferior Officers - appointed by POTUS, courts, or head of department
o Employees - not included in clause, do not need to be appointed within this framework (civil
servants)
Whether individual is an officer or employee  per Lucia v. SEC, test is whether they (a) have a continuing
position established by law and (b) exercise significant authority pursuant to laws of US
Lucia v. SEC (2018)
Facts: SEC had 5 ALJs, who were selected by staff members. ALJs rendered decisions, which could be reviewed
by Commission, or if opted not to, would become the action of the Commission. Lucia argued the proceeding
against him was invalid—claimed SEC’s ALJs were officers subject to the Appointments Clause, and thus must
be selected by Commission (which counts as head of department), not by SEC staff.
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Holding: [KAGAN] An ALJ is an officer rather than an employee, because they have a continuing position
established by law and exercises significant authority pursuant to the laws of the US.
 Framework for distinguishing between officers and employees comes from two cases:
o (1) An individual must occupy a “continuing” position established by law to qualify as an
officer
 Germaine held that “civil surgeons” (doctors hired to perform various physical exams)
were mere employees because their duties were “occasional or temporary”
o (2) Whether the individual exercises significant authority pursuant to the laws of the United
States (per Buckley v. Valeo)
 No elaboration of a test for significant authority; however, in Freytag v. Commissioner
(1991) applied the non-elaborated “significant authority” test to adjudicative officials
who were basically identical to Commission’s ALJs and found them to be officers
 Could take testimony, conduct trials, rule on the admissibility of evidence, have
the power to enforce compliance with discovery orders  exercise discretion
in carrying out these important functions
 Decisions can be final and binding (if Commission declines to review)
REMOVAL OF AGENCY OFFICIALS
 Apart from impeachment, Constitution says nothing explicit about removal of non-elected executive officials
 Can draw 4 possible inferences about executive removal from Constitution:
o (1) B/c impeachment only mode specifically mentioned, it is the only permissible method
o (2) Removal is an executive function vested to the President by Art. II (Unitary Executive Theory)
o (3) Mode of removal follows the mode of appointment (e.g. official appointed by POTUS w/
Senate advice can only be removed in same manner)
o (4) Congress can set whatever terms of removal are N&P when it creates offices
 Decision of 1789 – First Congress settles on inherent presidential removal power
Myers v. US (1926)
Facts: Myers was appointed as a Postmaster by and with the advice and consent of the Senate under the
Postmaster Act of 1876. The Act also required Senate approval for removal. The President removed Myers
without Senate approval.
Holding: [TAFT] POTUS can unilaterally remove Myers
 Endorses Madison’s reasoning behind decision of 1789; should be given credence b/c decision by First
Congress w/in 2 years of Constitutional Convention
 Reasons
o By vesting executive power in POTUS, Art. II intended to grant him power of appointment and
removal except as expressly provided otherwise by Article
o No indication of limits on removal, unlike appointments
o Appointees serve under POTUS  more aware of officials’ defects than Senate
o Founders would have never designed a system which granted Cong unlimited discretion over
the operation of Executive Branch and power to fundamentally weaken it
o Would be unreasonable for Cong to have power to thwart POTUS from having loyal men under
him  would make it difficult for POTUS to take care that the laws were faithfully executed
Takeaways:
 (1) Case cited in support of unitary executive theory
12
Humphrey's Executor v. US (1935)
Facts: FTC Act of 1914 specifies that commissioners serve 7-year terms; can be removed by POTUS for
inefficiency, neglect of duty, or malfeasance of office. Humphrey had been appointed to FTC by Hoover in 1931.
In 1933, FDR asked Humphrey to resign; refused, so FDR declared him removed.
Holding: FTC Act was intended to limit POTUS's power to remove FTC commissioners. Limitations are
constitutional b/c FTC Commissioners are not executive officers and thus POTUS does not have power of
removal.
 DISTINGUISHES Meyers rather than overturning  position, unlike Meyers’, is not purely executive, but
quasi-legislative and quasi-judicial, specifically designed to be independent and not under the executive
 Removal at-will by POTUS would threaten Commission’s independence
o Congress specifically designed FTC to be independent—wanted expertise, technocrats, and
non-partisan position
Takeaways:
 (1) Power of POTUS to remove an officer over authority of Congress depends on character of office
o For purely executive officers, POTUS has unilateral power  Myers
 How to determine whether officer is an executive officer? Example in Bowsher v. Synar
(1986) – determining spending cuts assigned to Comptroller General; Court determined
that deciding cuts was an executive task  thus, Congress could not give itself the
power of removal over CG beyond impeachment
o For other officers, Congress can limit POTUS’ removal power (i.e. “for-cause” provisions)
 (2) Conservatives on court want to rule that Humphrey’s Executor is a limited exception and potentially
overturn it  Seila Law v. CFPB
o Kavanaugh on D.C. Cir. held CFPB structure was unconstitutional b/c is headed by single
director and limitations on presidential removal of agency heads are only permissible when the
agency is multi-membered
o Decision said unlimited presidential removal is baseline  trend of giving more and more
power to POTUS
Free Enterprise Fund v. Public Company Accounting Oversight Board (2010)
Facts: Sarbanes-Oxley created PCABO, an agency responsible for regulating the economy under the oversight of
the SEC, an independent agency. The PCABO Commissioner (appointed for 5-year terms) was granted a doublelayer of job protection (SEC Commissioners could remove PCABO Commissioners for-cause only, and POTUS
could remove SEC Commissioners for-cause only).
Holding: [ROBERTS] Double-layer structure is unconstitutional b/c it gives POTUS no meaningful control
 While court has upheld restrictions on POTUS's removal power (i.e. Humphrey’s Executor, in those cases,
only one level of protected tenure separated POTUS and officer
 Act deprives POTUS of ability to hold Board members accountable directly; cannot hold SEC Commissioners
accountable for their supervision of Board members, b/c only removable for cause
o Impairs POTUS's ability to execute the laws, as he cannot hold his subordinates accountable
 Arrangement is contrary to Art. II's vesting of exec power in POTUS and incompatible w/ Constitution's
separation of powers
o If allowed arrangement to proceed, where would it stop? How many layers could be insulated
from removal?
o Ppl don't vote for officers, they vote for POTUS, and look to him to guide his deputies  w/o a
clear and effective chain of command, public will be unable to pass judgement on POTUS's
efforts
13
o
Constitution requires POTUS to oversee execution of laws  fact that a procedure is
convenient or efficient cannot save it if its contrary to constitution
Dissent: [BREYER]
 Majority doesn’t show how two layers are meaningfully different than one layer of protection
 ALJs in independent agencies are subject to double cause removal  worries that Lucia's holding that they
are officers + this holding would invalidate that arrangement  concern that decision is a major shift
o To save ALJs, court will have to make hard distinction between PCAOB functions and ALJ
functions (Roberts indicates this in footnote, that ALJs perform different adjudicatory function)
o But in Lucia, court is bringing ALJs closer to POTUS by making them inferior officers
Takeaways:
 (1) Double layer structure is unconstitutional b/c it prevents POTUS from fulfilling his Article II duty to
ensure that the laws are faithfully executed
 (2) Concerning implications for ALJs

Common thread between appointments and removal cases: worry about accountability
o If make it too remote from POTUS, will dilute accountability, b/c POTUS is electorally accountable
(this assumes that POTUS is significantly accountable; which is debatable)
UNITARY EXECUTIVE
 Unitary Executive: Constitution's vesting of executive powers in the person of the President rather than in
the executive department as a whole
o Advocates of unitary executive reason that POTUS has supervisory authority over all discretionary
decisions vested by statute in executive officials; otherwise Congress could effectively vest
executive power in subordinate officials
 Debate over unitary executive has largely focused on issue of removal
o Unitarians suggest unlimited amount of removal power; non-unitarians urge differing degrees of
Congressional power to restrict presidential removal
o Debate over whether it gives POTUS power to make all executive decisions and accordingly nullify
any decisions contrary to his instructions  if that's true, does POTUS actually need removal
power to effectuate executive power?
14
III. STATUTORY CONSTRAINTS ON AGENCY BEHAVIOR
APA STRUCTURE


The APA was enacted in 1946, following the New Deal and a newfound need to constrain agency behavior
o We largely have a different understand of APA requirements than what the text suggests
o Organic statutes may supplement, replace, or exceed requirements of APA  always check
organic statutes
4 main topics covered in the APA
o (1) Agency disclosure of info (APA § 552(b))
o (2) Availability, timing, and form of judicial review of agency action (APA §§ 701-705)
o (3) Scope of review of agency decisions (APA § 706)
o (4) Procedures agencies must employ when making decisions (APA §§ 553-554, 556-557)
 Procedural framework relies on two fundamental distinctions
 (A) RULEMAKING v. ADJUDICATION
 (B) FORMAL vs. INFORMAL
o “Feast or famine” dichotomy – a lot of process required under formal
proceedings, hardly any at all under informal proceedings
o Formal proceedings (§§ 556-557) require agency to provide elaborate,
trial-type hearings and must justify decisions solely on basis of materials
presented in the proceedings. Informal proceedings (§§ 553-554) have
minimal requirements.
FORMAL RULEMAKING



Requirements of Formal Rulemaking
o Decisionmaker presides (i.e. agency/agency official)
o Notice of hearing so public can attend
o General rules of evidence apply
o Opportunity for oral testimony and cross-examination
o Ban on ex parte communications
o Decision must be on the record
What is the trigger for Formal Rulemaking?
o (1) If statute states “proceedings must be on the record after an opportunity for agency
hearing”
o (2) Functional equivalent of above phrase
Formal Rulemaking is virtually non-existent today; seems like a categorical mistake to many
o “Today . . . formal rulemaking is the Yeti of administrative law. There are isolated sightings of it in
the ratemaking context, but elsewhere it proves elusive.” - Thomas
o Labor and time intensive process (e.g. five years of FDA hearings to withdraw approval of one
drug; ten years to make a rule about what % of peanuts is peanut butter)
o Reasons in favor of Formal Rulemaking are weak:
 Transparency (but Informal Rulemaking has these requirements too, though not written
into text of APA)
 Ban on ex parte communications
 Democratizing (but is this really true—much easier to submit comment then attend a
hearing  in the end, more industry capture b/c industry is the only one who attends)
15
United States v. Florida East Coast Ry. (1973)
Facts: Esch Car Act of 1917 authorizes Interstate Commerce Commission to set rules relating to car-hire rates
“after hearing.” In 1966, ICC announces investigation into care hire practices; thought it had to use formal
rulemaking and process reflected this. Investigation ended with no rule; launched another investigation in 1967
and again thought it was engaging in formal rulemaking and again ended with no rule. Congress then grills ICC
for inaction. Scared by Congress, ICC in 1970 adopted a new rule, eschewing formal requirements and denying
all requests for formal hearing and oral testimony. ICC thought it was still engaging in formal rulemaking, but
that § 556(d) does not require them to provide oral hearing/CX when “the parties will not be prejudiced
thereby” (“escape clause”).
Holding: [REHNQUIST] ICC’s rules are valid b/c the Esch Car Act does not require formal rulemaking procedures
 (1) Formal proceedings not required
o Language of Esch Act requiring ICC to act "after hearing" was not the equivalent of a
requirement that a rule be made "on the record after opportunity for agency hearing" (based
on US v. Allegheny-Ludlum Steel Corp.)
o It does not matter that ICC thought it had to conduct a formal hearing  agencies’
interpretations of APA do not get deference
 (2) Esch Car Act does not require more procedures than the APA requires
o Meaning of hearing is a broad word, that doesn't always mean in-person, trial type hearing
Takeaways:
 (1) Formal requirement is only triggered if the statute in question includes the “magic words” – “on the
record after notice and an opportunity for a hearing”
o Sets a HIGHER bar for triggering formal proceedings
o While the Court leaves open the possibility that functionally equivalent words could trigger
requirements, lower courts have never held that language other than language above has
triggered formal requirement  essentially created a bright line test

A modern example: The Food, Drug, and Cosmetic Act, 21 USC § 521(d)(1)
o FDA faced with a problem where antibiotics in animal feed were causing antibiotic resistance in
humans
o Language of the Act empowers the FDA to, "after due notice and opportunity for hearing to the
applicant," issue an order withdrawing approval of the feed  FDA interprets this as requiring
them to use formal rulemaking
 Thus, FDA decides to instead ask for voluntary action from manufacturers
 This is an ERROR: not the magic words! Does not mention “on the record”
FORMAL ADJUDICATION


Unlike Formal Rulemaking, no SCOTUS decision on when Formal Adjudication is triggered
Three possible approaches from circuit courts:
1
2
Approach
Treat cases just like FERC  require “magic words” (or functional
equivalent) to trigger formal proceedings
Presume a formal adjudication is required unless the statute states
clearly otherwise; any language in an organic statute calling for a
hearing triggers formal adjudication (opposite approach to West
Chicago; now abandoned by 1st Circuit)
16
Case
West Chicago
Seacoast
3
Agency’s discretion determines whether or not a formal hearing is
required: application of Chevron  if a statute is ambiguous,
agency’s interpretation is given deference as long as it is
reasonable.
Chemical Waste Mgmt.
City of West Chicago, IL v. NRC (7th Cir. 1983)
Facts: NRC decided to grant a company (KM) a license amendment, allowing them to demolish certain buildings
and store the contaminated soil onsite. Chicago had appealed the agency’s decision—in appeal, NRC had
considered written materials, but denied Chicago’s request for a formal, trial-type hearing. The AEA stated “the
Commission shall grant a hearing” upon request of any interested person. NRC argued a hearing is required by
the Act only for a construction permit.
Holding: Formal adjudication was not required.
 NRC did not violate their own regulations in failing to provide formal hearing
o B/c get deference to interpretations of their own regulations (Seminole Rock/Auer)
 NRC did not violate AEA in failing to provide formal hearings
o Use approach of FERC  AEA does not contain magic words
o In absence of magic words "on the record," Congress must clearly indicate its intent to trigger
the formal provisions of the APA
 Informal procedures satisfy DPC requirements
o No deprivation of life, liberty, or property interest—those are not involved here
Takeaways:
 (1) This approach = an agency need not hold a formal hearing in adjudication UNLESS
o (A) the agency’s organic statute contains magic words, per FERC
o (B) Congress clearly intended for the agency to hold a formal hearing
Seacoast Anti-Pollution League v. Costle (1st Cir. 1978)
Facts: EPA granted a company, PSCO, a permit and an exemption to discharge heated water into an estuary
[license/permit = adjudication under APA]. The Federal Water Pollution Control Act allowed for EPA to grant an
exemption when certain requirements were met "after opportunity for a public hearing." Decision was made at
very selective, non-formal hearing at administrator level. P, an environmental group, challenged the decision,
and were denied a hearing by EPA, which asserted that APA does not apply to proceedings under FWPCA.
Holding: Formal hearings are required.
 APA requirements apply to FWPCA
 Precise words "on the record" don't need to be used to trigger APA (disavowing West Chicago/FERC
approach)  resolution turns on the substantive nature of the hearing Congress intended to provide
o Adversarial hearings determine individual situations rather than policy disputes  exact kind of
quasi-judicial proceeding for which the adjudicatory procedures of APA were intended
o If not on the record, could be decided on basis of evidence that court would never see, or that a
court could not be sure existed  cannot believe Congress could intend such a result
 THUS, formal hearings are required for adjudicatory hearing unless there’s evidence to the contrary in
statute
Takeaways:
 (1) This approach = presumption that formal procedures are required for all adjudicatory hearings, unless
statute says otherwise
17
NOTE: 1st Cir. no longer follows this approach; have moved to Chemical Waste Mgmt. approach [BUT this
approach could still be viable, as has not been addressed by SCOTUS]
Chemical Waste Mgmt. Inc. v. EPA (D.C. Cir. 1989)
Facts: Under the Resource Conservation and Recovery Act, the EPA administrator is empowered to require
corrective action if he/she determines that hazardous materials have been released into the environment, but
those subject to such orders get a “public hearing.” EPA promulgated regulations saying that informal
adjudicatory procedures could be used when a corrective-action order required a facility to undertake interim
corrective measures that would not be particularly expensive or complex. These informal hearings did not all
for direct or CX of witnesses. CWMI challenged the use of informal procedures
Holding: Pursuant to Chevron, informal procedures are reasonable.
 Court applies a straight Chevron analysis  the statute in question is ambiguous, therefore the agency’s
interpretation prevails as long as it is reasonable
o Statute is ambiguous
o Agency's interpretation is perfectly reasonable - "public hearing" does not necessarily mean
"formal hearing"
Takeaways:
 (1) This approach = If a statute is ambiguous about whether a formal adjudication is required, then under
Chevron deference the court will defer to the agency's interpretation of the statute, as long as that
interpretation is reasonable

Chemical Waste Mgmt. is the dominant approach among circuits today
o Arguments against this approach:
 (1) Do we really want to give agencies deference about own procedures?  is it putting fox in
charge of henhouse?
 (2) When agency is deciding whether to apply formal requirements, isn't it in part interpreting
APA? FERC in a footnote says no deference for agency’s interpretation of APA (interpreting
APA when interpreting whether organic statute triggers formal APA requirements)  appears
to have been forgotten by courts applying Chevron deference
o Arguments in favor of this approach:
 (1) Broad trend towards deference  Approach makes great deal of sense - Chevron rules the
world (until we hear otherwise) when it comes to agency's legal judgements when it comes to
their own statutes
 (2) Isn't agency the one that knows best what process to use?
INFORMAL RULEMAKING


Dominant means of making agency decisions that have binding legal effect on third parties
o Some (e.g., Kenneth Culp Davis) say the process is one of the greatest inventions of modern
government
Looking at text of APA § 553, the requirements seems very slim:
o (1) Notice of Proposed Rulemaking
 Time, place, and manner of public proceedings
 Reference to legal authority
 May state proposed rule itself, substance of rule, or even just a general description of subjects
and issues involved
o (2) Public Comment
18


Must provide an opportunity to participate in the rulemaking through submission of written
data, views, or arguments, with or without opportunity for oral presentation
 1947 DOJ Manual on APA – agency must consider all relevant matter presented; but rules do
not exclusively have to be made on the basis of the record
o (3) Concise general statement of basis and purpose upon adoption
 1947 DOJ Manual on APA - no elaborate analyses, findings of fact, or conclusions of law are
necessary
In practice, informal rulemaking procedures require MORE than the text of the APA  procedurally
maximal
o (1) Notice of Proposed Rulemaking  procedurally maximal
 Must disclose critical evidence (data, studies) in agency’s possession at proposal stage or
when becomes known
 established in Portland Cement Ass'n v. Ruckelshaus (D.C. Cir. 1973); see CT Light &
Power and American Radio Relay League, Inc. v. FCC
 Must be a reasonable link between proposed and final rule ("logical outgrowth")
 Agency must already have an eye on what it might want to do at final stage to avoid
logical outgrowth problem
 Why have these requirements?
 Allow for meaningful public comment—can’t intelligibly comment upon a rule that
you didn’t see coming, or comment upon methodology, etc. if data is not disclosed
o (2) Public Comment
 Vermont Yankee says courts cannot add more procedures here than what APA requires
o (3) Final Rule
 Statement of basis and purpose—requires detailed explanation of why agency made its
decision and why they are doing it in the face of comments received
 Why have these requirements?
 Allow for meaningful judicial review— record must enable court to see what major
issues of policy were raised and why the agency reacted to them as they did
Vermont Yankee Nuclear Power Corp. v. Natural Resources Defense Council, Inc. (1978)
Facts:
 Lead-in to case: 1970s D.C. Cir. had a bloc of liberal, activist judges who were worried about capture + the
implementation of a slew of new fed health, safety, and environmental statutes. All were in favor of
procedural activism  invented "hybrid APA rulemaking", which involved judicially grafting onto basic
§553 notice-and-comment requirements a series of procedural additions. Held that NPRs must reveal all
underlying studies and data in the agency's possession, and statement upon adoption of a rule required
detailed explanation of why agency made its decision and why they are doing it in the face of comments
received. Also required more at the public comment stage, like CX and oral hearing.
 Case: NRC issued a rule under AEA dealing with waste disposal; used informal rulemaking procedures to
apply the rule to all license requests. The D.C. Circuit held the rule was invalid because NRC used
inadequate procedure (e.g., no discovery or cross-examination) when promulgating the rule.
Holding: [REHNQUIST] D.C. Cir improperly required NRC to employ rulemaking procedures in excess of those
required by text of APA
 APA establishes MAXIMUM procedural requirements courts can impose on agencies  agencies
themselves are free to choose to grant additional procedures
o Not to say that an agency decision would never be overturned for failure to add procedure, but
such a circumstance would be EXTREMELY rare (has never happened)
 Reasons to not allow courts to graft on extra requirements:
19
o

(1) Procedurally Maximal Ruins Efficiency - If we require more, agencies will ALWAYS opt for the
most laborious process possible and we’ll lose all the efficiency that comes with informal
rulemaking in the first place
o (2) Predictability – judicial review process should be predictable, not “ad hoc,” whatever the judge
feels is the “appropriate” process under the circumstances
o (3) Avoid Court Second Guessing Decisions - courts will use record—developed later—to second
guess decisions, even though agency did not have that info at the time of making decisions about
procedure
However, last sentence seemingly condones procedures beyond APA when it states that courts should
focus their review on whether decision was supported by the explanation in the record, and not stray
beyond that to explore procedural format or impose additional procedural requirements  what record??
No requirement in text of §553
Takeaways:
 (1) Courts MAY NOT add more stringent procedures for the comment phase of notice and comment
rulemaking, though agencies may offer additional procedures if they choose to
o Live controversy over whether this holding applies NARROWLY to comment phase or
BROADLY to all phases of informal rulemaking
Connecticut Light and Power Co. v. NRC (D.C. Cir. 1982)
Facts: After a fire in nuclear power plant in 1975, NRC issued a rule regarding technical guidelines for evaluating
fire safety. CLPC challenged the rule, arguing the notice was inadequate because (1) the final rules differed in
major respects from the proposed rule and (2) the technical data was not in the NPR.
Holding: Reluctantly uphold NRC’s rule—afford less than exemplary procedures, but did meet minimum
acceptable requirements
 (1) Difference between Final and Proposed Rule
o Final rules were a logical outgrowth of rules as proposed
 NPR clearly reveled the precise subject matter and issues as required by APA
 Final rules were just a more stringent version of proposed rules
o Re-noticing is only required when changes are so major that original notice didn't adequately
frame the subjects for discussion
 (2) Disclosure of Technical Data
o Disclosure of data required so there can be meaningful commentary
o Here, NRC did rely on technical studies that were not disclosed in NPR, but this rulemaking
process took place against a background of 5 years during which NRC explored safety proposals
in a public forum and technical studies were exposed to comment  this background
sufficiently allowed for meaningful comment
Takeaways:
 (1) Final rules must be a LOGICAL OUTGROWTH of proposed rule  must be “REASONABLY
FORESEEABLE”
American Radio Relay League, Inc. v. FCC (D.C. Cir. 2008)
Facts: FCC adopted rules regulating the use of the radio spectrum to prevent interference with radio
communications. The FCC relied on five studies, which they disclosed but heavily redacted. Said the redacted
portions were internal communications; P alleged the redacted parts explained methodology and data that
called into question the agency’s conclusions
20
Holding: The agency must provide the unredacted studies
 Agencies must reveal the technical studies and data upon which it relies in its rulemaking – allows for useful
criticism; can’t hide data that undermines decision
o No precedent allowing for agency to cherry pick which info it discloses, no confidentiality
considerations implicated here
 HOWEVER, failure to disclose for public comment will only lead to a rule being set aside if the petitioner
can show that they suffered prejudice from the agency's failure to provide an opportunity for public
comment
o Ps establish that here: allowing such omissions in data and methodology may make it impossible
to reproduce an agency's results or assess its reliance upon them
Takeaways:
 (1) To allow full opportunity for comment, agencies must reveal the technical studies and data upon
which it relies in its rulemaking
Mid Continent Nail Corp. v. US (Fed. Cir. 2017)
Facts: DOC had a “Limiting Regulation” rule implementing anti-dumping laws. DOC later withdrew the Limiting
Regulation—didn't use notice and comment procedures to repeal the rule. Initially, DOC claimed it could repeal
rule using "good cause" exception in §553; then claimed that repeal of rule had been foreshadowed in certain
NPRs, so that the repeal was the logical outgrowth of various other rulemaking proceedings in which notice and
comment procedures had been followed.
Holding: Repeal of LR was not logical outgrowth of earlier NPRs and thus DOC failed to provided adequate
notice under APA.
 When agency repeals a rule, it has to go through same process as when it issues a rule
 There was no NPR, b/c there was no logical outgrowth
o Prior NPRs didn’t even mention rule or give any indication it could be repealed
o "Something is not a logical outgrowth of nothing"
o “Cannot bootstrap notice from comment” – just b/c someone happened to comment on topic
does not mean there was adequate notice of the topic


Stages of Informal Rulemaking
o Advanced notice of proposed rulemaking (ANPRM)
o Notice of proposed rulemaking (NPR)
o Public comment
o Notice of data availability (NODA) - when agency comes into possession of info during rulemaking
and wants to rely on it
o Final Rule
 Preamble (Fed Reg)
 Text (CFR)
o Reconsideration
Criticism of Current Informal Rulemaking System
o Agencies advised to go procedurally maximal
 Criticism: process of informal rulemaking has become so robust it's become "ossified"
o Produces “filter failure”  No really effective way for an agency to determine what information it
wants to hear about in the comment phase and what it does not, so it takes in millions of
comments for each rule
 Benefits the regulated industry, who can slow down the rulemaking process by inundating
the agency with information and thoughts.
21

Democratic in theory, but often the industry itself is the only one chiming in, so we don't
get the "robust public debate" aimed at
PROCEDURAL RULES; INTERPRETIVE RULES AND POLICY STATEMENTS

Not all rulemaking is subject to APA procedures  APA exempts “interpretive rules, general statements of
policy, or rules of agency organization, procedure, or practice” from § 553 requirements (see § 553(b))
PROCEDURAL RULES
 Procedural rules = "rules of agency organization, procedure, or practice"
 How to determine if something is a procedural rule vs. a legislative/substantive rule?
o Example: rule prescribing scope of discovery or evidentiary presumptions in adjudicatory hearing—
seems procedural, but can influence outcome so would it be substantive?
o No clear answers  D.C. Cir. took a stab at the issue in Air Transport Assoc., but case was ultimately
dismissed as moot and vacated, so has no formal legal status, though frequently offered as persuasive
authority
Air Transportation Assoc. of America v. Department of Transportation (D.C. Cir. 1990)
Facts: The FAA promulgated the Penalty Rules—which established a schedule of civil penalties and a
comprehensive adjudicatory scheme, providing for formal notice, settlement procedures, discovery, adversary
hearing, and appeal—in order to implement new provisions of the Federal Aviation Act. There was no notice
and comment before promulgating PR, and FAA argued they were not needed as the PR met the “rule of
agency procedure” exception to § 553.
Holding: [EDWARDS] B/c the rule substantially affected civil penalty defendants' right to avail themselves of an
administrative adjudication, cannot be promulgated w/o notice and comment
 Rather than focusing on whether a particular rule is "procedural" or "substantive," employ functional
analysis: where nominally procedural rules encode a substantive value judgement or substantially alter
the rights or interests of regulated parties, the rules must be proceeded by notice and comment
 Here, rule does not meet exception b/c it substantially affects a civil penalty defendant's right to an admin
adjudication
o In implementing this rule, FAA made discretionary choices concerning what process civil penalty
defendants are due; each of these choices encoded a substantive value judgement on the
appropriate balance btw a D's rights to adjudicatory procedures and FAA's interest in efficient
prosecution
Dissent: [SILBERMAN] Rule meets the procedural exception
 Lines btw substance and procedure hard to draw, but Congress made distinction critical when it passed the
APA  therefore obliged to implement a viable distinction between procedural and substantive rules,
which the majority opinion abandons
 Articulates a different test: Substantive rules that regulate primary conduct—direct, control, or condition
the behavior of individuals or institutions; procedural rules are the furthest away from regulating primary
conduct—deal w/ enforcement or adjudication of claims of violation of substantive norms, but do not
purport to affect the substantive norms
Takeaways:
 (1) No clear test for procedural vs. substantive rules
 (2) In JEM Broadcasting Co., Inc. v. FF (D.C. Cir 1994), court suggested that Silberman's insistence on
categorical distinction btw procedure and substance was likely to prevail
22
o
o
Facts: FCC adopted "hard look" rules which called for rejection of broadcast license applications
w/o opportunity for amendment if app didn't unambiguously include all req material. P wanted to
correct an error in its app, challenged for being promulgated w/o notice and comment
Holding: Rules were procedural
 Addressed Air Transport by saying it extended the "value judgement" rationale further than
any other case of the circuit, and to the extent that it would suggest a different result in
this case, disavow it
INTERPRETIVE RULES & POLICY STATEMENTS
 Typically, legislative/substantive rules (those that create rights or obligations for regulated parties) are based
on interpretations of organic statues and/or reflect general policies adopted by the agency  how do they
differ from "interpretive rules" or "general statements of policy"?
 4 possible tests for determining whether a rule is interpretive vs. substantive:
1
TEST
Legal Effects Test



2
3
Substantial Impact Test

[Not widely used]

Impact on Agencies Test


4
American Mining Test

DESCRIPTION
If rule creates a binding norm on parties = legislative, if not =
interpretive
o A legislative rule operates just like a statute, and a
violation of such a rule is grounds for liability w/o
anything further
o An interpretive rule merely offers an agency's opinion
on matters and violations are not sufficient ground for
liability—agency must further prove that the conduct
in question violates legislative rule/statute
A properly adopted substantive rule establishes a standard of
conduct with the force of law - PG&E v. FPC (D.C. Cir. 1974)
o Thus, if agency wants to characterize rule as
interpretive, cannot use rule as binding law in
subsequent adjudications
Problem: promotes agency gamesmanship—practical effects
on interpretative on industry same (going to comply b/c on
notice), even if legal effects are not  agency knows this, and
will use interpretative rules to avoid N&C
N&C required for rules that have a substantial impact on
regulated parties
Problem: Highly dependent on industry reaction rather than
agency’s intention or conduct. Also, no plausible grounding in
test or history of §553; Vermont Yankee has generally been
taken to invalidate this
If the agency follows/applies the rule as binding  legislative
rule
o If the agency intends to be bound by the rule, it is a
legislative rule – United States Telephone Ass’n
o If the guidance document leaves discretion to agency
officials, it is NOT a legislative rule – P2C2 v. Shalala
Problems: requires knowledge of agency history; must wait
long after issuing guidance to determine whether it is a
substantive rule (have to wait until there’s a body of action)
Semi-return to Legal Effects, but looks at:
23
o


(1) Whether there would be an adequate basis for
enforcement absent a substantive rule
o (2) Whether the rule is published in CFR
o (3) Whether the agency has invoked its legislative
power in making the rule
 Pretty easy to skirt this requirement—just
don’t cite
o (4) Whether the rule amends a prior substantive rule
If answer to any question is yes, then have a legislative rule
Thus, test turns on what agency intended to do
o Not just 4 corners of the document, but the intent
agency has
o Did they intend to issue something with force of law vs.
what they actually said about it
U.S. Telephone Association v. FCC (D.C. Cir. 1994)
Facts: FCC issues a fine schedule without N&C and applied it in 300 cases. FCC argued it was a “general policy
statement” and not a binding, substantive “rule.” USTA challenged, arguing it required N&C prior to
promulgation.
Holding: [SILBERMAN] The penalty schedule is not a policy statement and thus should have been put out for
comment under the APA
 The distinction between an interpretive rule and a legislative rule is the agency’s intention to bind itself to
a particular legal position
o Not enough for agency just to state "non-binding" - can say it w/o really meaning it
o Instead, look to history of agency decisions
 Here, it’s clear agency intended to be bound
o Seems hard to imagine that agency would publish such an exhaustive framework for sanctions if it
did not intend to use that framework to cabin its discretion
o Schedule of fines applied in 300 cases, FCC only departed from it in 1 of these cases
Takeaways:
 (1) An agency policy statement is a legislative rule if the document was intended to be binding on the
agency  IMPACT ON AGENCIES TEST
Professionals & Patients for Customized Care v. Shalala (5th Cir. 1995)
Facts: The FDA has a longstanding policy of not punishing small retail pharmacists for mixing their own drugs.
After big pharmacies start doing this, the FDA promulgated a rule with nine (non-exhaustive) factors that it “will
consider” in determining whether to initiate an enforcement action. P2C2 challenged the rule, claiming notice
and comment proceedings were required, but the FDA contended the factors were merely for “internal
guidance.”
Holding: The rule was a policy statement, not a binding rule
 FDA consistently classified the rule as a policy statement
 Rule affords opportunity for individual determinations: list "not intended to be exhaustive," other factors
"may be appropriate for consideration in particular cases," even if factors are present, FDA retains
enforcement discretion
24
o
Just b/c agency officials consistently followed the guidelines does not mean they didn’t retain
discretion
Takeaways:
 (1) Where an agency makes clear (to employees and to regulated industry) that it leaves itself discretion
in applying a rule, the rule is “interpretive”
American Mining Congress v. Mine Safety & Health Admin. (D.C. Cir. 1993)
Facts: MSHA rules required that certain occupational illnesses be reported to the agency within 10 days of their
diagnosis. MSHA “policy program letters” (PPLs) establish that certain x-ray readings count as diagnoses of lung
disease and must be reported. AMC challenged the PPL for being promulgated w/o N&C, but MSHA claims they
are merely “interpretive rules.”
Holding: [WILLIAMS] The letters are interpretive rules and are thus not subject to N&C requirements.
 Look to FOUR INDICATORS for an agency’s intention:
o (1) Would the agency have a basis for this enforcement without making a substantive rule here?
(i.e. the Legal Effects test).
o (2) Is the rule published in the CFR?
o (3) Did the agency explicitly invoke its legislative authority?
o (4) Does the rule in question amend a prior substantive rule?
 Here, a consideration of the four questions reveals that the PPLs are interpretive
Takeaways:
 (1) Established 4 factors to use in determining whether rule is legislative or interpretive
o In a recent case (Perez) SCOTUS indicated this was the test, but no binding decision
INFORMAL ADJUDICATION


Text of APA (§ 555) imposes essentially NO procedural constraints on informal adjudication
Courts have established there needs to be some sort of record w/ an explanation of the decision
Citizens to Preserve Overton Park v. Volpe (1971)
Facts: Under the DOT Act of 1966 and the Federal-Aid Highway Act of 1968, Sec. Trans. cannot authorize
highway construction through a park if there is a “feasible and prudent” alternative route or, barring that,
without taking “all possible planning” to minimize harm. Sec approved a highway through Overton Park without
explaining in findings why there was no alternative or more mitigation efforts. P claimed that Sec's action is
invalid w/o these formal findings and that Sec did not make an independent determination but merely relied on
the judgement of Memphis City Council.
Holding: [MARSHALL]
 Std of review is A&C
o Inquiry must be thorough, probing, in depth BUT review is narrow
o Under this std, agency is entitled to a “presumption of regularity”
 Cannot meet A&C std by filing post-hoc affidavits with court (which lower court authorized)  remand for
review to take place based on the record, rather than post-hoc affidavits
o To review an agency's decision, courts need a record where the agency explains why it made its
decision
o Don’t normally probe the mind of agency decisionmakers by requiring post-hoc affidavits
25
Takeaways:
 (1) To review an agency's decision under informal adjudication, courts need a record where the agency
explains why it made its decision
o ISSUE: is this in tension w/ Vermont Yankee? Is grafting on additional procedural requirements that
are mentioned nowhere in APA
Pension Benefit Guaranty Corp. v. LTV Corp. (1990)
Facts: ERISA allows gov to cancel a company’s pension plan and take it over; also allows gov to restore the plan
if the company bounces back. PBGC cancelled LTV’s plan when the company appeared to be going bankrupt,
then later restored the plan and reinstated LTV as plan administrator. LTV challenged restoration decision; 2nd
Cir. held decision was A&C b/c PBGC's decision making process of informal adjudication lacked adequate
procedural safeguards.
Holding: [BLACKMUN] Decision to reinstate LTV’s plan was procedurally adequate  not A&C
 While there is some tension between Vermont Yankee and Overton Park, cases are not necessarily
inconsistent
o Vermont Yankee stands for general proposition that courts are not free to impose procedural
requirements that have no basis in APA
o At most, Overton Park suggests that § 706(2)(A) of APA imposes a general procedural requirement
that an agency take whatever steps it needs to provide an explanation that will enable the court to
evaluate agency's rationale at time of decision
 Here, 2nd Cir. didn't suggest that administrative record was inadequate to enable court to fulfill its duties
under §706; rather, its ruling focused on fundamental fairness to LTV  no need to impose any specific
procedural requirements
Takeaways:
 (1) When an agency undergoes informal adjudication, it need only provide some contemporaneous
explanation – no formal procedural requirements
THE CHOICE BETWEEN RULEMAKING AND ADJUDICATION


Per Chenery II, the choice between making policy through RULES or through ADJUDICATION lies with the
agency
Why would an agency choose one or the other?
o Adjudication – quicker process, avoid notice & comment requirements; avoid OIRA review
o Rulemaking – more formal
o Since Chenery II, the distinction between the two matters less
SEC v. Chenery Corp. (1943) ["Chenery I"]
Facts: During a reorganization of D by SEC, Ds bought preferred stock that would entitle them to keep control
of D. This was not against the law or SEC policies. In an informal adjudication, SEC cited common law principles
to not allow D to retain control of the corporation.
Holding: [FRANKFURTER] Agency’s decision was A&C  remanded to provide further justification for the
decision
 SEC based its decision on judicial precedents and principles of equity  but cited cases do not support
these propositions in any way
26


SEC cannot add post hoc rationalizations for their decisions—reasons must be provided
contemporaneously
Thus, "grounds upon which an order must be judged are those upon which the record discloses the action
was based"
Takeaways:
 (1) An agency’s decision must stand or fall based on the explanation the agency gave at the time the
decision was made
o Court cannot provide its own reasoning
o Court will not accept post hoc rationalizations
 (2) Relief = remand to agency to give new explanation
o But don't we dislike post hoc rationalizations?  some tension; but unless we tell agency if
they get it wrong, has to fall, then we have to accept this
SEC v. Chenery Corp. (1947) ["Chenery II"]
Facts: On remand, SEC made the same decision through informal adjudication, but this time based on expert
reasoning given at the time of the decision. In its decision, SEC explicitly stated it was not going to make a rule,
and it might or might not apply this principle in the future. Chenery Corp. appealed, claiming SEC could not
reach this conclusion by order/adjudication, but rather has to promulgate a rule to be applied in future cases.
Holding: [MURPHY] The SEC did not need to issue a rule to make this policy because an agency can choose
between rulemaking or adjudication when making a policy
 The suggestion in Chenery I that the SEC could make this a rule if it wanted to doesn’t mean its failure to do
so deprives them of the statutory ability and duty to make a decision on this case at all
 Rigidly requiring rulemaking would make admin process inflexible and incapable of dealing with specialized
problems that arise  cannot insist agency act by general rule or individual order
o Some problems that cannot be reasonably foreseen will inevitably arise, and certain issues
cannot be immediately addressed in a general rule adopted before an agency has sufficient
experience to determine the appropriate standard
o Or agency might not have had sufficiently experience with a particular problem to warrant
rigidifying it into a hard and fast rule
o Or problem might be so specialized and varying in nature as to be impossible to capture w/in
boundaries of a generalized rule
Dissent: [JACKSON]
 This is no different from Chenery I, the majority simply had a “change of heart.” By allowing agency to go
back and fix reasoning, puts most admin orders over and above the law
 Agencies should not be able to make legal decisions (i.e., adjudication) without previous legal authority or a
statute on which to directly rely
Takeaways:
 (1) Agency has discretion to make policy through rulemaking or adjudication
 (2) The policy devised by the SEC applied to Chenery Corp. retroactively (nothing prohibited the purchase of
stock at the time they bought it)  cases after Chenery II cut back on retroactivity
o See Trump Administration’s EO on “no unfair surprise” in rulemaking
27
IV. SCOPE OF REVIEW OF AGENCY ACTIONS
STANDARDS OF REVIEW




Std of review for agency actions under APA differ from civil procedure stds  governed by APA § 706
Why are stds of review important?
o Tells us what court’s attitude is towards agency decision  Forgiving? Deferential? Skeptical?
o Creates predictability and uniformity
Why should we have different stds of review?
o Agencies issue different kinds of judgements
o In some cases, agency is more competent than courts; in others, not so
When court is reviewing an agency action: always determine what std of review is + what court says that
std of review looks like
APA § 706
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 556 and 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.
TYPE OF DECISIONS UNDER REVIEW
Informal Proceeding
Agency
Informal Proceeding
Factfinding
Agency Interpretation of a Statute
Agency Legal
Agency Interpretation of a Regulation
Conclusions
Agency Interpretation of an
Interpretive Rule/Policy Statement
Agency Discretion & Policymaking
28
STANDARD OF REVIEW
Substantial Evidence – Universal Camera
Arbitrary & Capricious – Ass’n of Data Processing
(though functionally equivalent of Substantial
Evidence)
Chevron Deference
Auer/Seminole Rock Deference
Skidmore Deference
Arbitrary & Capricious
REVIEW OF AGENCY FACTFINDING
FORMAL FACTFINDING PROCEEDINGS

Governed by § 706(2)(E) – Substantial Evidence Std
o If the two stds are different, substantial evidence is slightly more stringent than A&C
Universal Camera Corp. v. NLRB (1951)
Facts: NLRB brought a proceeding against UCC for discharging an employee for testifying under the Wagner Act.
The case went to a hearing before a trial examiner of the NLRB, who found that UCC did not fire the employee
in retaliation for his testimony. NLRB rejected the examiner’s report and ordered Universal to reinstate the
employee.
Holding: [FRANKFURTER] Case is remanded b/c lower court failed to consider trial examiner’s report as part of
the record
 Std of review = substantial evidence
o Issue here is that there’s 3 statutes: (1) Wagner Act - “if supported by evidence,” (2) Taft
Hartley Act (amends Wagner Act) - "the findings of the NLRB as to the facts, if supported by
evidence, shall be conclusive"; (3) APA § 706
o Court holds that “Congress expressed a mood” in Taft Hartley Act – intended std to be same as
APA, wants courts to do a better job, look to whole record and not be so deferential
 Under substantial evidence std, WHOLE record should be reviewed, not just the parts of the record that
supports the agency’s decision  trial examiner’s report should be included, even if agency did not
ultimately rely on it
Takeaways:
 (1) Under Substantial Evidence std, court must look to the whole record
 (2) Substantial Evidence is skeptical, stricter, less deferential
 (3) Courts are likely going to conform std in organic statute w/ APA stds of review
INFORMAL FACTFINDING PROCEEDINGS

Governed by A&C std
o Remember that organic statutes can always specify a more rigorous std of review (i.e. Substantial
Evidence; to the extent that it is any more rigorous)
Association of Data Processing Service Organizations v. Board of Governors of the Federal Reserve System
(D.C. Cir. 1984)
Facts: Under 12 U.S.C. § 1848, Fed BOG issued an order (adjudication) finding a bank-holding company’s nonbanking activities were closely related to banking. Fed BOG also issued a rule that allowed all banks to engage
in these non-banking services going forward. Issue is what std of review should be, as have both an
adjudication and a rule—identical decisions, just that one applies to a specific bank and other applies
nationwide.
Holding: [SCALIA] Both decisions governed by Substantial Evidence std
 It would be odd for an agency decision to pass A&C std but fail substantial evidence review for the same
action
29
o

“Orders” will go to the circuit courts and be reviewed under substantial evidence while “rules”
will have to go through the District courts and face A&C review. Why would Congress require
two separate proceedings in separate forums with separate standards for the same facts?
It is difficult to distinguish between the standards, and it is preferable to have broad principles that apply
across multiple contexts  thus, hold that stds are substantially the same
Takeaways:
 (1) For findings of fact, the Substantial Evidence and A&C stds are substantially the same
o Many courts consider the two standards to merge; but some courts reject this merger and
consider substantial evidence to be a slightly stricter std of review
REVIEW OF AGENCY LEGAL CONCLUSIONS

Despite the language of § APA 706, agencies have long received a substantial measure of deference for many
of their legal conclusions  the precise domain and scope of that deference has been and continues to be
major battleground in admin law
PRE-CHEVRON CASES
 Complicate current project of SCOTUS to narrow or eliminate Chevron deference  show a long history of
deference
o Court would have to root out more than Chevron
o Congress has passed a lot of statutes against this longstanding backdrop of judicial deference—what
do we do with this Congressional reliance?
 Series of Pre-Chevron cases
o Gray v. Powell (1941) – for pure legal Qs, agencies do not get deference; but deference is afforded to
agencies for their application of law to facts
o NLRB v. Hearst Publications (1944) – follows Gray framework: court will review de novo (i.e., no
deference) pure legal questions (e.g., what is an employee), but will defer to agencies’ interpretation
of a statute (e.g., whether newsboys are employees) if it is (1) warranted in the record, and (2) has a
reasonable basis in the law
o Packard Motor Car Co. v. NLRB (1947) – court refused to give deference to agency in very similar case
to Hearst (determining whether foremen were employees). Says it is a pure legal Q, and even if
looked to agency, NLRB’s practice would not guide courts, b/c had been inconsistent [court’s decision
is possibly due to much wider impacts on industry compared to Hearst, fear of deferring to NLRB too
often]
Skidmore v. Swift & Co. (1944)
Facts: Firefighters employed at Swift factory sued to recover overtime under FLSA. Had not been compensated
for the time they spent overnight at factory, only time actively spent responding to alarms. DOL Administrator
recommended consider all on-call time as time worked, except for hours spent eating or sleeping.
Holding: [JACKSON] The findings of the Administrator are not conclusive or binding on the courts, but should be
afforded deference given his experience
 Whether to grant deference depends on a multi-factorial approach:
o Thoroughness in its consideration
o Validity of its reasoning
o Consistency of interpretation over time
o All other factors that give agency power to persuade
30
Takeaways:
 (1) Deference may be appropriate, even when the agency does not have direct, formal responsibility
for administering a statute (i.e. when it is NOT speaking with the force of law)
 (2) The AMOUNT of credit/deference given to that agency is up to court


Pre-1984, the state of the law required reviewing courts to conduct the following inquiry:
o (1) Does the agency administer the statutory provision at issue?
 If no  agency gets, at most, some measure of deference under Skidmore
o (2) Is the agency's legal interpretation a pure legal Q that can be asked and answered w/o knowing
anything about the particular dispute before the agency?
 If no  Agency presumptively gets strong measure of deference, unless factors counsel
otherwise
 If yes  court presumptively reviews de novo, unless factors counsel otherwise
o (3) If Congress has expressly entrusted the law determination function to the agency, then courts
must honor the congressional allocation of authority and give agency's decision great deference,
regardless of the classification of the Q
Problem: law was inconsistent, unpredictable, messy
CHEVRON DEFERENCE
 Determines when an agency gets deference for an interpretation of a statute which it administers
CHEVRON FRAMEWORK
STEP 0: MEAD TEST (Determines whether agency interpretation is eligible for Chevron deference)
A. Did Congress intend to give the agency the authority to speak with the force of law?
B. Did Congress intend to give the agency the authority to speak with the force of law?
o If NO  Skidmore Deference
o If YES  Continue to Chevron Step 1
CHEVRON TEST
1. Has Congress precisely spoken to the question of law?
o If UNAMBIGUOUS  Statute controls
o IF AMBIGUOUS  Continue to Step 2
2. Is the agency’s interpretation reasonable?
o If YES  Deference
Chevron U.S.A. v. Natural Resources Defense Council, Inc. (U.S. 1984)
Facts: 1977 amendment to the Clean Air Act required states to establish permit program for “stationary
sources” of air pollution. EPA promulgated regulation defining “stationary sources” to include “bubble”
concept. NRDC challenged definition as contrary to the Act.
Holding: [STEVENS] As Congress with silent w/ respect to the precise issue at Q, EPA's interpretation was
reasonable.
 When a court reviews an agency's construction of the statute which it administers, confronted w/ 2 Qs:
o (1) Whether Congress has directly spoken to the precise Q at issue
 If intent of Congress is clear, that is the end of the matter—the court (and agency) must give
effect to the unambiguously expressed intent of Congress
 However, if the court determines that Congress has not addressed Q at issue, the court does
not simply impose its own construction on the statute  step 2
31
o


(2) If statute is silent or ambiguous w/ respect to the specific issue, the Q is whether the agency's
answer is based on a permissible construction of the statute
An agency's power extends to filling both implicit and explicit gaps that Congress may have left in a statute
Here, statute was ambiguous and EPA’s interpretation was reasonable (agency is in best position to balance
competing policy interests in light of everyday realities and expertise)
Takeaways:
 (1) Establishes two-step test for deference—if Congressional intent is clear, follow it (look to normal tools
of statutory interpretation). If it is not, the agency gets deference as long as its interpretations are
reasonable.
 (2) It does not matter if the delegation for agency “gap filling” is explicit or implicit

There are several “OFFRAMPS” for Chevron deference  instances where court determines agency’s
interpretation is not available for Chevron deference
o Mead – determination of whether interpretation is eligible for Chevron deference
o Gonzales v. Oregon – no deference when regulation declares something criminal which had not
been criminal (did not hold this, but seems like ripe area for Chevron to be carved out based on
opinion)
o King v. Burwell – no deference when Q is “major issue,” i.e. a matter of great econ and political
significance
o Encino Motor Cars v. Navarro (2016) – no deference for procedurally defective agency
explanation
 Agencies are allowed to change approach but need to acknowledge that making change
and explain reason. Here, agency changed interpretation of FLSA and didn't acknowledge
change  SCOTUS though this was a procedural defect and gave no Chevron deference
o But see City of Arlington v. FCC – court rejects “offramp” for jurisdictional Qs
U.S. v. Mead (2001)
Facts: Under the Harmonized Tariff Schedule (statute), Customs is authorized to classify & fix the rate of duty
on imports. Mead’s day planners were classified as duty-free until Customs issued a ruling letter classifying
them as bound diaries (increase from 0% to 4% tariff), citing dictionary definition. Ruling letters were not
subject to N&C, not published, only applied to specific matter.
Holding: [SOUTER] A tariff classification has no claim to judicial deference under Chevron, as there was no
indication that Congress intended such a ruling to carry the force of law; BUT could be eligible for Skidmore
deference—remand to figure out
 Agency interpretation of statutory provision qualifies for Chevron deference when (A) Congress
delegated authority to agency generally to make rules carrying the force of law, and (B) the
interpretation claiming deference was promulgated in exercise of that authority
 (1) Did Congress delegate agency to speak w/ force of law?  NO
o Delegation of such authority may be shown in a variety of ways: agency's power to engage in
adjudication or rulemaking (including N&C rulemaking), or some other indication of a
comparable Congressional intent
o Here, no adjudication/rulemaking, and no other indication that Congress meant to delegate
authority to Customs to issue classification rulings with the force of law
 (2) Was agency interpretation promulgated in exercise of that authority?  NO
o No indication that agency set out to engage in lawmaking
o No N&C; don’t treat letters as binding precedent on 3rd parties; 10-15k letters issued a year by
46 offices
32

This doesn't mean classifications are outside the scope of any deference whatsoever—Chevron didn't
eliminate Skidmore's holding that an agency's interpretation may merit some deference
Takeaways:
 (1) Establishes when agency decision is outside Chevron framework altogether—"beyond Chevron pale"
 (2) Might get deference under old multi-factorial test of Skidmore—surprising reemergence Skidmore
decades later

Based on Mead, interpretive rules do not get Chevron deference
o Not promulgated in exercise of the authority to make law—by definition, interpretative rule is not
intended to have a legally binding effect
 True even if the agency employs N&C procedures for interpretative rules (would pass Mead
part 1, but not part 2)
o However, SCOTUS has indicated that court will look at full range of circumstances to see if it’s TRULY
an interpretative rule
 Not just title, but how agency has treated rule, its reliance on rules in taking legal action
thus, don't rest w/ agency's classification of rule
Gonzales v. Oregon (2006)
Facts: DOJ interpretative rule determined that using controlled substances to assist suicide is not a legitimate
medical practice, and therefore prescribing or dispensing them for this purpose is unlawful under Controlled
Substances Act.
Holding: [KENNEDY] Court refuses to give deference under Auer, Chevron, or Skidmore
 For Chevron: interpretative authority has to be delegated to official interpreting statute  here, AG had
some power to interpret statute, but no power to declare medical std, which is under state law
 Declaring something criminal which had not previously been criminal under statute is a vexed action for an
agency to take
Takeaways:
 (1) Concern when agency is criminalizing conduct that would otherwise not be criminal  in the future,
seems likely that court will narrow Chevron by refusing to give deference to agencies’ interpretations of
criminal statutes
o Recent Gorsuch concurrence in bump stock case—need to be extra careful in cases of personal
liberty, thus should not be deferential
King v. Burwell (2015)
Facts: Issue was whether federal subsidies for health insurance are available for insurance bought on federal
exchanges. ACA refers to subsidies for exchanges "established by state." IRS interpreted statute to allow for
subsidies for fed exchanges  does IRS interpretation get deference?
Holding: [ROBERTS] IRS interpretation does not get deference
 (1) Found statute was ambiguous
 (2) But IRS does not get deference
o Not eligible for Chevron deference because this is such a huge provision: billions of dollars at
stake, health insurance of millions of ppl, central to the statutory scheme  Q of great econ
and political significance
33

o
B/c it’s such a huge Q, think had congress wished to assign that Q to an agency, surely
would have do so expressly ("In extraordinary cases, however, there may be reason to
hesitate before concluding that Congress has intended such an implicit delegation")
Moreover, IRS is not an agency w/ health expertise—unlikely would have delegated Q to
agency
Takeaways:
 (1) Establishes "major issues” exception to Chevron—decline to extend deference for questions for great
economic and political significance
o Issue: Statues can be accidentally ambiguous  Congress couldn't have been clearer about
ambiguity they did not intend
City of Arlington, TX v. FCC (2013)
Facts: Telecommunications Act of 1996 imposed specific limits on state and local power to regulate cellphone
towers/antennas. One of these limits was that states/local governments must act on siting application "within a
reasonable period of time after the request is duly filed." Long delays persisted, so companies asked FCC to
clarify what a "reasonable period of time" was. FCC issued a declaratory ruling that "reasonable period of time"
= 90-150 days. P claimed agency cannot interpret a statutory provision that goes to its own jurisdiction—that’s
the agency interpreting its own power.
Holding: [SCALIA] Chevron applied to FCC's interpretation; rejects any purported distinction between
"jurisdictional" and "non-jurisdictional" agency interpretation
 The Q is simply whether the agency has stayed w/in the bounds of its statutory authority
o If the agency's assertion is based on a permissible interpretation of the statute, then the courts
must defer to the agency
 Here, Chevron applies b/c Congress unambiguously vested FCC w/ authority to administer the Act through
rulemaking and adjudication
 (Issue: Is this putting the fox in charge of the henhouse?)
Dissent: [ROBERTS] “The danger posed by the growing power of the administrative state cannot be dismissed.”
Courts should go provision-by-provision and ask whether Congress intended to give the agency interpretive
authority over the specific provision at issue (issue: how would Congress single intent to give interpretative
authority if accidentally left statute ambiguous?)
Takeaways:
 (1) There's no distinction jurisdictional/non-jurisdictional Qs—both can get deference
o Seems to be in tension w/ King v. Burwell, which indicates there is a difference between major
and non-major Qs

CHEVRON STEP 2: what is a “reasonable” interpretation?
o Both cases below use a very textualist, de-contextualized approach
Michigan v. EPA (U.S. 2015)
Facts: Hazardous air pollution program under CAA applies to fossil-fuel-fired power plants if EPA determines
such regulation is "appropriate and necessary." EPA made such a determination while indicating that costs
were not to be considered in the threshold determination of the appropriateness, although the agency did not
foreclose consideration of costs at other stages of regulatory process.
34
Holding: [SCALIA] It was unreasonable to interpret the statue to exclude consideration of costs
 Even under deferential Chevron std, agencies must operate w/in the bounds of reasonable interpretation
 this strayed beyond those bounds
o Read naturally, phrase "Appropriate and necessary" requires at least some attention to cost
 Costs = broad category, beyond econ costs
 It is irrational, never mind appropriate, to impose billions of dollars in economic costs
in return for a few dollars in health or environmental benefits
Dissent: [KAGAN] Agreed that consideration of costs was an essential part of the statutory structure, but
argued that such consideration at later stages of the regulatory process sufficed to sustain the initial decision to
regulate
 Majority responded by saying that dissent's reasoning contradicts Chenery I  court may uphold agency
action only on the grounds that the agency invoked when it took the action: EPA said cost was irrelevant to
determination—not that the consideration of costs at subsequent stages ensures costs won't be
disproportionate to benefits
Takeaways:
 (1) In determining whether regulation is appropriate, agencies must engage in reasoned decision-making,
which requires the agency to consider all relevant factors, including costs
o Given prevalence of word appropriate in U.S. Code (and similar words like "reasonable"),
holding is significant and has resulted in lots of litigation
o When see word “appropriate”:
 Think through statutory context
 Does it require agency to consider costs (“must”)
 Does it allow agency to consider costs (“may”)
Van Hollen, Jr. v. FEC (DC Cir. 2016)
Facts: Bipartisan Campaign Reform Act banned corporations and unions from funding electioneering
communications; but SCOTUS then held corporations and unions could not be barred from electioneering
communications. FEC now had to decide how BCRA's disclosure requirements should apply to a class of
speakers Congress never expected would have anything to disclose. BCRA required disclosures for other
allowed communications under the Act, so FEC decided to promulgate a rule that corporations or unions had to
disclose $1000+ donations if made for the purpose of electioneering communications.
Holding: Interpretation was reasonable
 Applied an approach Congress used elsewhere in statute
o P argued Congress's failure to include a purpose provision for electioneering communications
when it did so for other sections precludes FEC from later adding in a purpose requirement 
expressio unius canon of construction
o If were interpreting statute directly, argument would have bite; but canon operates different
when reviewing agency action: have consistently recognized that a congressional mandate in
one section and silence in another often suggests not a prohibition, but simply a decision not to
mandate any solution (i.e. to leave Q open to agency)
 Even if there's a purpose in statute, doesn't mean Congress wanted it pursued maximally at all costs in all
places
o Chevron demands court's deference when agency's interpretation is a reasonable
accommodation of conflicting policies that were committed to the agency's care by the
statute
35
Takeaways:
 (1) Expressio unius canon of construction doesn’t apply in Chevron framework—take silence to mean that
Congress left it to agency to make decision
o Canons should give way when we're talking about statutory interpretation in the agency
context
 (2) Agency has discretion to make decisions about policy tradeoffs between goals Congress implicated as
long as interpretation is reasonable

Can agencies change their interpretations?  YES: as long as statute is ambiguous, may be multiple
reasonable interpretations and agency is not bound by prior judicial constructions of the statute
National Cable & Telecommunications Ass’n v. Brand X Internet Services (U.S. 2005)
Facts: Communications Act of 1934 subjects all “telecommunications services” providers to “common-carrier
regulations” and allows the FCC to determine who falls under this heading. FCC promulgated a regulation that
classified broadband internet providers as an information service, not a telecommunications service, thus
exempting them from common carrier regulations. 9th Cir. vacated FCC’s ruling, grounding its holding in a prior
9th Cir. case (AT&T Corp. v. Portland), which held cable modem service was a telecommunication service.
Holding: [THOMAS] The 9th Circuit erred in refusing to apply Chevron
 A court's prior judicial construction of a statute trumps an agency construction that would otherwise be
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 b/c there is no gap to
fill
 Allowing judicial precedent to foreclose agency from interpreting an ambiguous statute would allow a
court's interpretation to override an agency's  Chevron's premise is that it's for agencies, not courts, to fill
statutory gaps
 The court in Portland held only that the best reading was that cable modem service was a
telecommunications service, not that it was the only permissible reading of the statute  not
unambiguous, so Chevron should have been applied
Takeaways:
 (1) A court’s ruling on an agency interpretation is binding ONLY if the court ruled that the statute was
unambiguous
 (2) Allows for agencies to change their interpretations
o One of the reasons for Chevron is uniformity and predictability—doesn't this undermine that?
 Note: Thomas says he would now overturn decision

Chevron deference highly contested  5 sitting justices have criticized Chevron deference



ARGUMENTS IN FAVOR OF CHEVRON
Expertise of agencies relative to courts
Agencies are (mildly) politically accountable
Makes sense as a presumption of Congressional
intent [LH does not buy this at all]
ARGUMENTS AGAINST CHEVRON
See Jack Beerman (“failed experiment”)
 Contrary to APA
 Has no adequate theoretical basis
o Based on legal fiction that congress meant
to delegate interpretative authority to
agency when leaves ambiguity—in most
cases, ambiguity is accidental [LH agrees
with this]
 Doctrine is confusing and uncertain
36

Encourages irresponsible agency and judicial
behavior
o Agencies free to disregard congressional
intent and impose their own policy views
o Courts can brush off serious challenges to
agency decisions by invoking Chevron w/o
engaging w/ whether agency is thwarting
congressional intent
Breyer’s argument (as a law professor)
 Aren't courts the ones who are good at statutory
interpretation? Why would we think agencies
better at interpreting statutes than courts are?
Raises Constitutional Issues (see Thomas’ dissent in
MA v. EPA)
 Issue of NDD - if statute is ambiguous, isn't that
saying Congress didn't provide instructions to
agency?
 Issue of Art. III - under Art. III, judges have
authority to say what law is  Chevron could be
a problem b/c it takes that authority away from
them?
AUER/SEMINOLE ROCK DEFERENCE
 Determines when an agency gets deference for an interpretation of its own REGULATION
o Related to Chevron, also under attack—but important to keep separate, as two doctrines might
have separate fates
 Bowles v. Seminole Rock & Sand Co. (1945) - agency's construction of its own regulation becomes
controlling unless it is plainly erroneous or inconsistent w/ the regulation; re-affirmed in Auer v. Robbins
(1997)
 No Auer deference for “parroting regulations” – Gonzalez v. Oregon
o Occurs when there’s a statute, regulation that just copies text of statute, and then rule
interpreting the parroting regulation
o In such cases, Q would just actually be about statute; regs are not giving specificity to statutory
scheme or reflecting the agency’s expertise
Christopher v. SmithKline Beecham Corp. (2012)
Facts: Pharmaceutical sales reps sued for overtime under FLSA. Whether they were eligible for overtime under
FLSA turned on whether they were outside salesman. FLSA tasked DOL with interpreting “outside salesman,”
and DOL promulgated regulation saying it applied to those whose primary duty was to make “sales.”
Interpreted regulation in an amicus brief in 2009, said sale involved “transfer of title.” Under this
interpretation, pharma reps would be eligible for overtime.
Holding: Interpretation is not eligible of Auer deference b/c there was no fair warning  creates unfair
surprise
 Generally, the DOL’s interpretation of the regulations is entitled to controlling deference. However, no
deference is warranted where, as here, the pharma industry has reasonably interpreted the regulations to
exempt reps without challenge or any enforcement action since the 1950s
37
Takeaways:
 (1) Seems to signal some dissatisfaction with Auer—deference may not be available when there are
concerns about fairness
 (2) At same time, court doubles down on availability of Auer, even when agency announces
interpretation in procedurally informally setting, such as filing of an amicus brief
Kisor v. Wilkie (2019)
Facts: Court takes Q of whether Auer should be overruled.
Holding: [KAGAN] Manages to save Auer deference by confining it  ESTABLISHES 8 LIMITS ON AUER
DEFERENCE
 (1) Mut be genuine ambiguity in regulation itself
o Court has to examine the regulation closely
 (2) Have to find genuine ambiguity based on traditional interpretation rules
o Have to look at history and context, etc. beyond the language of the text
 (3) Interpretation has to be a reasonable interpretation
o Requirement for deferring under Auer is same as deferring under Chevron  tightens test
(4)
Interpretation
has to be agency's authoritative position on the matter

 (5) Interpretation has to implicate substantive expertise of agency
o See Gonzales v. Oregon
 (6) Interpretation can't just be parroting of underlying statute
o See Gonzales v. Oregon
 (7) Has to be agency's fair and considered judgement
 (8) Cannot be any unfair surprise
o See Christopher
Takeaways:
 (1) Have a very divided court on Auer deference
o 4 justices said to keep it b/c it's sensible
o 4 justices said to dump it b/c it's bad
o 1 justice (CJ Roberts) didn't join part of opinion that said it's sensible, but did join part that said that
getting rid of it would upset reliance to such an extent that it would be unwise as a matter of stare
decisis to overrule Auer





ARGUMENTS IN FAVOR OF AUER
Assumes particular congress intent - congress
would want courts to defer to agencies
Agencies are the authors of own regulations - they
know best what the regs mean
Qs often come down to Qs about policy implicates expertise, where agencies have an
advantage
Promote uniformity and consistency - one agency,
deciding what regs mean; versus many courts
coming to different conclusions about what regs
mean
Stare decisis - would be hugely disruptive to undo
Auer deference: decades of interpretations relying





38
ARGUMENTS AGAINST AUER
Separation of powers - problematic to give power
to write law and interpret law to one body
History does not support the idea that this
practice has been with us since the founding
(3) Deference = judicial abdication; not constraint
on agencies
End run around APA procedures; APA preamble to
§ 706 says courts will determine Qs of law
Agencies have incentive to promulgate vague
rules
o Gives agencies incentive to promulgate
"mush"—highly vague regulations that
they can interpret any way they want later
on deference, and ppl rely on those
interpretations

(although theory has been empirically
discredited, idea still remains)
Issue of interpretive rules
o True interpretative rules do not have force or effect of law
o If you give interpretative rule Auer deference, isn't that giving interpretative rule force and effect of
law? Then wouldn't interpretative rules which get Auer deference need to go through N&C
rulemaking?
 Perez v. Mortgage Bankers Ass’n (2014) – FN 4: majority says no, even when interpretation is
given Auer deference, Auer does not have the effect of converting interpretative rule into
legislative rule—court is the one deciding the meaning; thus, no force of law simply because
gets Auer deference
REVIEW OF AGENCY DISCRETION & POLICYMAKING
APA § 706(2)(A)
The reviewing court shall hold unlawful and set aside agency action, findings, and conclusions found to be
arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law



Hard Look Doctrine – requirement created by courts that agencies give reasons for their decisions and that
those reasons make sense (i.e. be consistent with the underlying record)
o Applies to discretionary decisions that involve policy—agency faces a range of decisions, any of which
would be consistent w/ law and facts
o Why have this requirement?
 Judge Leventhal in Greater Boston Television Corp. v. FCC - “reasoned decision-making
promotes results in the public interest by requiring agency to focus on values served by its
decision and hence releasing the clutch of unconscious preference and prior prejudice” 
forces agency to make better decisions
o Where does requirement come from?
 APA § 706
 Courts thought it was inherent in process of judicial review to require agencies to give reasons
for what they did and have those reasons make sense
 Nature of decisions rendered = rules complex, more discretionary  need to have
something for court to look at in order to have meaningful judicial review
Requirement applies to both substantial evidence and A&C stds of review
o See Industrial Union Dept. v. Hodgson; see also T-Mobile South, LLC v. City of Roswell, GA (2015)
(SCOTUS stating substantial evidence review means agency needs to provide statement of reasons)
What do agency reasons have to entail?
o Reviewing courts can scrutinize and reject any and every aspect of a rule for failure to give reasons
and have those reasons make sense (Industrial Union Dept. v. Hodgson)
 Requirement of explanation applies to all aspects of rulemaking, at every level of the
rulemaking—agencies must explain each aspect of their decisions; must explain it in enough
detail that reviewing court can understand their reasoning
 Looking for agency to do its homework, explain why choices make sense, explain why
arguments against don't make sense
o Agency must lean into expertise—must be evidence that they exercised their expertise (State Farm)
 Expert discretion is the lifeblood of the admin process
 Must bring expertise to bear on question
o Must be rationale connect between facts found and choice made (State Farm)
 Must be consistent with underlying record
39
o



“Because” is not a reason—agency can’t make decision merely because they have the power to do so
(Puerto Rico Sun)
o If decline to regulate based on agency’s priorities, need to have real engagement with underlying
statutory language and structure and explain how this authorizes declining to regulation (MA v. EPA)
o Reasons cannot be a lie/pretextual (Dept. of Commerce v. New York)
Requirement applies equally to initial promulgation of policy and changes/revocations of policy
o Agency’s view of what is in public interest may change, either with or without change in
circumstances, but an agency changing its course must supply a reasoned analysis - Greater Boston
o REVOCATION
 Scrutinized same as initial regulation, per State Farm
o CHANGES
 Per FCC v. Fox, change in policy requires:
 (1) Agency has to show an awareness of the change
 (2) Agency has to show good reasons for new policy; but DOES NOT have to show that
they are better reasons than the reasons for the old policy
 Agency needs to explain change in factual findings or disturbing reliance interest, as
emphasized by Kennedy’s concurrence in FCC v.
What is the appropriateness of political considerations in this process?
o State Farm – even though agency changed its mind b/c of change in administration, reason for
decision cannot be “we won the election/POTUS told us to do it”  decision still has to be supported
by facts, evidence, etc.
o Sierra Club v. Costle (D.C. Cir. 1981) – even if there is presidential involvement, decision should be
explained in terms of the evidence and underlying law
 Thus, even if real reason for agency decision is b/c POTUS told them to do it, Court says we
don’t need to know this reason  as long as there are actual reasons, based on the evidence
and the underlying statute, it's okay if actual decision was influenced by other
considerations/unstated reasons
 HUGE PROBLEM: creates real gap between record for public and reasons given to
public, and private record and private reasons  no knowledge, no accountability
What is the difference between A&C review and Chevron step 2?
o In recent years, courts have been increasing equating method of analysis under Chevron Step 2 and
A&C
o SCOTUS weighed in briefly in footnote in Judulang v. Holder (2011)
 Was reviewing Board of Immigration Appeal's denial of discretionary relief from deportation;
said case required court to decide whether the Board's policy was A&C under APA  drops
footnote
 Footnote says that if the court considered decision under Chevron, it would be the
same, b/c std is the same
 BUT that A&C better std here b/c there's no text - in order to raise Chevron Q,
decision needs to be interpreting a statute
o Thus, analytically very closely related, but doctrinally important to keep them separate, b/c they may
diverge at some point
o Encino Motor Cars may have muddled this
 Held that when there's defect of explanation in statutory interpretation (i.e. no explanation),
agency is deprived of Chevron deference
Industrial Union Dep’t, AFL-CIO v. Hodgson (D.C. Cir. 1974)
Facts: OSHA regulations set stds for asbestos dust in workplaces; DOL made policy decisions in implementing
stds. P challenged Dept. of Labor’s decisions to (1) give all industries the same target date for compliance with
rule, and (2) to req different retention periods under the rule for different types of records; specifically, only to
req 3 years for monitoring records.
40
Holding: Remanded to agency due to insufficient reasoning.
 Court says DOL needs to explain effective date decision better—why do they need uniform stds?
o Explained decision on basis that "reasons of practical administration would preclude a variety
of stds for different kinds of workplaces"—makes sense for workplaces w/in same industry; for
different industries, this general reference is not enough—no evidence of reasoning or
justification in record
 Court says DOL provided no reasoning for 3-year period of monitoring records—needs to supply reasoning
Takeaways
 (1) Reviewing courts can scrutinize and reject any and every aspect of a rule for failure to give reasons
and have those reasons make sense
 (2) Requirement applies to both sub evidence and A&C stds of review
Motor Vehicle Manufacturers Ass’n v. State Farm Mutual Automobile Ins. Co. (1983)
Facts: National Traffic Motor Safety Act passed in 1966; NHSTA charged with setting standards. NHTSA had
been wrestling for years how to—and if to—enact regulations for passive restraints. Carter Admin came to
conclusion to offer car manufacturers with choice between automatic airbags or passive restraint seatbelts.
Reagan comes into office, says era of big gov is over + econ was in trouble; this leads NHSTA rescinds passive
restraint requirement. Reason for decision was conclusion that most passengers would detach seatbelts; thus,
safety improvements would not be as great as previously estimated.
Holding: [WHITE] Remanded to agency as the deregulation was A&C b/c NHSTA failed to present adequate
basis and explanation for rescinding the requirement.
 Should deregulation face a more stringent std than initial reg?  court says no; revocation should be
scrutinized same as initial regulation
 The rescission was A&C
o (1) NHSTA gave no consideration to only requiring airbags—not a single sentence
 No evidence that agency brought its expertise to bear on the Q—MUST do this
 Worried about capture if there’s no reasoning that reflects expertise
o (2) NHSTA was also too quick to dismiss safety benefits of automatic seatbelts
 Again, didn’t bring expertise to bear on Q—if do, will get a lot of discretion
 Agency can’t simply say that there's “substantial uncertainty” as a justification for its
actions  must explain evidence which is available and offer a rational connection
between facts found and choice made
Takeaways:
 (1) Enormous case for affirming requirement of giving reasons and scrutiny of those reasons
 (2) Has big implications for changes in administrations—still need to provide reasoned explanation
Puerto Rico Sun Oil Co. v. EPA (1st Cir. 1993)
Facts: PRSO applies to renew permit under CWA. States can impose stricter requirements over EPA through
their certification of permit issued by EPA. PR’s certificate did not include mixing zone analysis—shortly after
issuing certification, ask EPA to hold off issuing final permit, b/c they were reconsidering mixing zone analysis.
EPA went ahead and issued final permit anyways.
Holding: Vacate EPA's order adopting the permit and remand for further proceedings. Decision based on the
present record appears manifestly A&C.
41

EPA's action in adopted the permit was not flawed by procedural error; no violation of any substantive
provisions of CWA either  problem w/ EPA's decisions is simply that the outcome appears on its face to
make no sense—result is so odd that it must be A&C
o EPA keeps pointing to regulations to show that it was allowed to do what it did procedurally—
but what's missing is any reason why EPA should want to frustrate PR’s clear desire to
reconsider mixing zone analysis for this permit and move with “sinister speed”
o There might be some explanation for EPA's action other than mechanical desire to reach a
rapid conclusion w/o regard to whether result is sound—but EPA needs to actually provide it
Takeaways:
 (1) Case stands for the principle that “because” is not a reason. Can't do it just because they are the agency
and they have the power—reason has to make sense; can't be a pure power grab.
FCC v. Fox Television Stations, Inc. (2009)
Facts: Communications Act of 1934 established system of broadcast licenses subject to conditions. One burden
on licensees is statutory ban on indecency, which Congress instructed FCC to enforce. In its enforcement, FCC
initially distinguished between literal and nonliteral uses of evocative language; and that deliberate and
repetitive use was required for finding of indecency for nonliteral expletives (fleeting and isolated utterances
okay). However, in commission's 2004 Golden Globes Order, FCC changed its mind, declaring for the first time
that a single nonliteral use could be actionably indecent. Provided three reasons: (1) categorically exempting
such language would likely lead to more widespread use; (2) first blow - action was necessary to safeguard
children; (3) technological advances make it far easier to bleep out a single use of an expletive.
Holding: [SCALIA] FCC’s reasoning was adequate.
 Policy changes are not held to a higher std of review
 When making a policy change, agency must:
o (1) Demonstrate awareness that it’s changing its position
o (2) Show there are good reasons for the new policy—but no req that agency shows new
reasons are better than the reasons for the older one
 When new policy rests upon factual findings that contradict those that underlay prior policy or prior policy
has engendered serious reliance interest - must provide reasoned explanation for disregarding facts and
circumstances that underlay or were engendered by prior policy
 Policy change decision was not A&C
o (1) FCC acknowledged it was changing position
o (2) FCC’s reasons for expanding scope of enforcement activity were entirely rational
 It’s obvious that it’s harmful to children and that it will lead to increased use—don’t
need a study of this
 It’s not A&C that this is a case by case decision
Dissent: [BREYER]
 FCC didn’t consider/explain 1A implications  majority rejects this; there’s not stricter scrutiny under A&C
std when there's constitutional implications
Takeaways:
 (1) Clarifies requirements for agencies' justifications of policy changes
o Doubles down on some parts of State Farm - need to be aware of change, provide justification
o Stakes out new ground by specifically and emphatically saying new reasons don't need to be
better
o Mocking of expertise in decision-making is strikingly different than State Farm
42
Massachusetts v. EPA (2007)
Facts: Environmental groups petitioned EPA to issue rule under CAA regulating mobile sources and their carbon
dioxide emissions. EPA denied this petition for rulemaking; said (1) it had no authority to regulate greenhouses
gases under CAA; and (2) would not act even if it did have authority. Reasoning for refusal to act was that: (a)
causal link between greenhouse gases and rising temp "cannot be unequivocally established"; (b) any
regulation would piecemeal and would conflict w/ POTUS's comprehensive approach (a voluntary program); (c)
unilateral EPA regulation might hamper POTUS's ability to persuade key developing countries to reduce
greenhouse gas emissions.
Holding: [STEVENS] (1) EPA had the statutory authority to regulate greenhouse gases; (2) it’s stated reasons for
refusing to regulate were inconsistent with the statute.
 Denial of petition for rulemaking can be reviewed
o Key differences btw denial and refusal to initiate enforcement proceedings (which generally
cannot be reviewed)—less frequent; involve legal rather than factual issues; subject to
formalities (like public explanation)
o However, such review is “extremely limited” and “highly deferential”
 (1) CAA authorizes EPA to regulate greenhouse gases
o Statute is broad; unambiguous
 (2) EPA’s reasons for not regulating were not consistent w/ statute
o While statute does condition exercise of EPA's authority on formulation of a "judgement",
"judgement" is not a license to ignore statutory text—must exercise discretion w/in terms of
statutory language
o Under terms of statute, EPA either need to find endangerment, no endangerment, or that
uncertainty is so profound cannot possibly choose what to do—can’t make decisions based on
policy considerations
 EPA can’t avoid regulating by saying it’s “uncertain”—if the scientific uncertainty is so
profound that it precludes EPA from making a reasoned judgment as to whether
greenhouse gases contribute to global warming, EPA must say so (i.e. must bring
expertise to bear on Q, per State Farm; must speak in scientific, expert terms)
Dissent: [SCALIA]
 EPA should get deference for interpretation of CAA; therefore, statute does not require EPA to make
determination about greenhouse gases
o [Isn’t this a Q of massive political and economic significance—shouldn’t King v. Burwell be
deployed here?  conservative justices are less concerned with power of agency when
deciding NOT to regulate; concerned only when agencies are imposing regulatory obligations]
Takeaways:
 (1) Once an agency responds to a request for rulemaking, it must ground its reasons for action or inaction
in the authorizing statute—it may not point to external policy rationales
After MA v. EPA, what discretion is left to agencies in choosing not to regulate?
 Does NOT stand for proposition that agency w/ regulatory authority must exercise that authority in every
case; can decline to do so by specifically talking about why the language of the statute authorizes that
declination
o Reasons based on agency's priorities need to have real engagement with underlying statutory
language and structure—cannot say that agency doesn’t feel like regulating, it’s too hard, don’t
care, etc.
 Example: WildEarth Guardians v. EPA (D.C. Cir. 2014)
43
o
o
EPA denied petition for regulating emissions from coal mines. Cited resource constraints; that coal
emissions were only 1% of all greenhouse gas emissions and thus higher priority was to regulate
larger sources, so would not regulate at this time
Court held that EPA’s refusal to initiate rulemaking was valid because their reasons were
consistent with the underlying statute
 Agency didn’t say it wouldn’t regulate, said it wouldn’t regulate at this time—statute
charged EPA with publishing list of sources of pollution “from time to time”
 Agency allowed to prioritize b/c goal of CAA is to reduce harmful emissions—decide how
to best marshal limited budgetary and personnel resources to carry this out
Department of Commerce v. NY (2019)
Facts: In March 2018, Commerce Sec Wilbur Ross announced in memo that he was reinstating the citizenship Q
on the Census. Said was doing so at request of DOJ, which needed improved data for purpose of enforcing VRA.
Memo explained why citizenship question would be the best way to collect this data.
PH: P asked district court to complete admin record; granted motion—documents added revealed that Ross
began to consider adding Q soon after he was appointed in early 2017; had attempted to elicit citizenship data
requests from agencies; eventually persuaded DOJ to request data. District court also simultaneously granted
P’s request for discovery outside of admin record, due to strong preliminary showing that Ross acted in bad
faith. Then held decision was A&C.
Holding: [ROBERTS]
 (1) [Roberts + 4 conservatives] Decision was consistent w/ evidence in record and thus not A&C
o Reasons on their own terms made sense and adequately explained
 (2) [Roberts + 4 liberals] However, decision must still be remanded b/c it was based on a pretextual
rationale
o District court was wrong to order discovery when it did, but this info would have come out
eventually
o Although no particular step in proceedings stands out as inappropriate; viewing the evidence as
a whole, the evidence tells a story that does not match the explanation Ross gave for his
decision
o Sole stated reason was desire to develop evidence to aid in enforcement of VRA—this reason
"seems to have been contrived" (thinks Secretary lied - not his true reason)
 Review of decision is deferential, but cannot exhibit naivety
 Accepting contrived reasons would defeat the purpose of project of giving reasons in
admin law
 "The reasoned explanation requirement of administrative law, after all, is
meant to ensure that agencies offer genuine justifications for important
decisions, reasons that can be scrutinized by courts and the interested public.
Accepting contrived reasons would defeat the purpose of the enterprise. If
judicial review is to be more than an empty ritual, it must demand something
better than the explanation offered for the action taken in this case."
Takeaways:
 (1) Can have multiple reasons, but stated reasons cannot be a lie
o HOWEVER, this case is likely to RARELY come into play b/c (a) usually judicial review is limited
to contemporaneous admin record—usually no probing of decisionmakers minds through
discovery, per Overton Park; (b) agencies can have other unstated reasons, as long as stated
reasons were part of why acted as it did, per Sierra Club v. Costle
44
V.



PRESIDENTIAL CONTROL OF AGENCY DECISIONMAKING
POTUS can exert control over Agency Rules through the Office of Information and Regulatory Affairs
(“OIRA”) of the Office of Management and Budget (“OMB”)
o OIRA review only applies to executive agencies; recent move towards covering independent agencies
o Every President starting with Nixon had some form of review over agency rulemaking processes, but
the OIRA process emerged in its current form under Reagan
What’s Reviewed?
o Proposed rules; final rules; NPRs
o Guidance documents
 For many years, OIRA reviewed guidance documents; Bush issued EOs formally covering them
 Bush EOs revoked by Obama  but OMB director said EO was not designed to undo that
 Bottom line: OIRA will review whatever guidance documents they want to
o Bottom line: OIRA administrator has complete authority to figure out what gets reviewed
 Most rules come in under the “novel question” category, rather than economically significant
rules
Who Reviews?
o OIRA (both director and career staff)
o White House personnel
o Agency political and career staff
o POTUS and VP (VP has jurisdiction to resolve disputes between agencies and OIRA; has not happened
since Gore)
o Any other agency with equities in the matter
o Any individual member of Congress can pressure
o Members of public w/ clout with the White House can pressure
o Bottom line: Process relies on cast of characters well beyond person/entity charged with making
decision; often well outside agency or even federal gov
EO 12291 [Reagan Administration]
Overview:
 Specified that CBA would be std of review for agency rules
 Specified that OIRA w/in OMB would oversee
 Specified review of all “significant regulatory action”
o Effect of $100 million or more on economy in a year
o Create a serious inconsistency or otherwise interfere w/ action taken/planned by other agency
o Materially alter budgetary impact of entitlements, grants, etc.
o Raise novel legal or policy issues arising out of legal mandates, POTUS’s priorities
OLC Review:
 EO does not empower OBM Director or task force to displace the relevant agencies in discharging their
statutory functions or in assessing and weighing the costs and benefits of proposed actions
 The fact that POTUS has constitutional implied statutory authority to supervise agency decision-making
suggests that supervision is more readily justified when it does not purport to displace, but only to guide
and limit, discretion which Congress has given to a particular subordinate official. A wholesale displacement
might be held inconsistent w/ the statute vesting authority in the subordinate official
Critiques:
 Displacement - Process displaces the agencies; wasn't their choice at the end of the day
 Delay - Caused lots of delays: rules go to White House and never come out
45



Opaque - Don't know why rules didn't come out, why changed
Conduit for industry
CB skew - Test skewed against rules where benefits hard to monetize; hard to look for future - especially
true for environmental and health and safety rules
EO 12866 [Clinton Administration – HAS BEEN IN EFFECT SINCE 1993; STILL IS TODAY]
Overview:
 Rescinds EO 12291
 Tries to address the critiques of EO 12291
o Reaffirms primacy of agencies over OMB/POTUS
 BUT also gives POTUS and VP final say where there is a conflict between OIRA and the
agency
o Sets deadlines for review process; only allows one 30-day extension (120 max)
 BUT in reality, deadlines not followed
o Communications w/ outside parties to be disclosed
 BUT if there are no written documents at a meeting, only thing disclosed is attendees,
date, and topic—no record of discussion
o Changes made at behest of OIRA to be explained
 Almost never done
o Rejected rules had to have explanation
 Written return letters, explanations of decisions elevated beyond OIRA—almost never
done
o Loosen grip of CBA a bit - explicit nods to worries about distributive impacts; equity;
elimination of reduction of discrimination or bias, even if they cannot be quantified  soften
cost-benefit analysis criterion by mentioning unquantifiable benefits
EO 13563 [Obama Administration]
Overview: Obama seeks comments on how to redo/fix the agency review process, but EO just reaffirms EO
12866


Why have Presidents embraced this process?
o Bottom line: Gives them power—and why would they give up power that predecessors freely
exercised?
o Preventing inconsistency/redundancy among different agencies
o Concern about too much regulation – many are outdated; don't make sense  makes regulations
better, more efficient, more modern
o POTUS has this power as manager of the executive branch
 Kagan – presumption that delegation authority to agency is a delegation of authority to
POTUS
o Rules might conflict w/ POTUS’s policy priorities
CRITIQUE: Process of OIRA regulatory review disrupts the fundamental features of Administrative Law
o (1) Gives ppl and entities not charged by Congress w/ making the relevant decision the power to
make the relevant decision
 This includes POTUS, who has power to remove agency officials
 Assumption today is that greater power to remove officials includes lesser power
to direct them in the jobs Congress has assigned to them
o (2) Introduces extra-legal criteria for agency decisions
 Requirement of formal cost-benefit analysis  vast majority of statutes do not require or
contemplate CBA
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o
o
o
o
(3) Injects starkly political criteria into processes that do not call for those political criteria in
statute
 EOs state the criteria apply to the extent permissible by law
 BUT in the age of Chevron, White House knows that agencies get deference 
not shy at all about pressuring agencies to accept interpretation of statute that
White House prefers (i.e. that statute permits CBA)
 Hard for environmental, health and safety, forward-looking rules to pass CBA
(4) Introduces facts that are not subject to public rebuttal into regulatory analysis
 Meetings w/ OIRA are not public; record of meeting not publicly disclosed
 Upends purpose of comment period
(5) Process complicates the prohibition on providing a contrived reason for agency’s decision
(6) Process is not transparent
 Agencies more or less “check” their rules with OIRA before they are actually promulgated
to ensure they won’t fail
 Lots of informal meetings with industry that go unrecorded  worry about industry
capture of POTUS  upends public process of admin law; creates private process
 Transparency provisions in EOs not followed
EO 13771 [Trump Administration “2-for-1 Rule”]
Overview:
 Requires agencies to rescind 2 rules for every 1 new rule issued
 Sets a limit on private expenditures due to regulation ("regulatory budget") that must be less than zero
(must take back more expenditures than imposed
o Only thing that matters is agency meeting regulatory budget  not looking at benefits ("cost
nothing analysis")
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VI. AVAILABILITY OF JUDICIAL REVIEW
INTRODUCTION TO AVAILABILITY OF REVIEW




All the ways ppl challenging agency actions can lose w/o even getting to merits of action
o All doctrines favor the government
5 key questions concerning timing and availability of judicial review:
o Whether judicial review of specific agency action is available
o For whom such review is available
o What form the action for judicial review must take
o Where an action for judicial review must be brought
o When action for judicial review is appropriate
Authorization of judicial review
o Constitution grant federal judiciary power to hear all cases arising under the constitution, laws, or
treaties of U.S. (Art. III, § 2, clause 1); while Congress has given federal district courts jurisdiction
over all civil actions arising under the constitution, laws, or treaties of U.S. (28 U.S.C. § 1311)
o APA § 704 provides “agency action made reviewable by statute and final agency action are
subject to judicial review”
 Suit under § 704 can be maintained only if: (1) another statute provides jurisdiction in a
federal court and (2) there’s a waiver of sovereign immunity (normally APA § 702)
o APA § 703 provides for general statutory review of agency action in absence of a special statutory
review proceeding  “special statutory review proceeding” = review provision targeted at a
particular agency or subject matter
 Many organic statutes have “special review provisions” where Congress specifies precise
form and timing for judicial review for particular agency actions
Have a strong presumption in favor of judicial review
o "The availability of judicial review is the necessary condition, psychologically if not logically, of a
system of admin power which purports to be legitimate or legally valid" - Louis Jaffe
PRECLUSION OF REVIEW

APA § 701(a) has two exceptions to judicial review: (1) statute precludes judicial review; (2) action
committed to agency discretion by law
o In line with strong presumption in favor of review, courts have tried hard to find that statutes
allow review—even when statutes explicitly preclude review in some regard
 “APA embodies a presumption of judicial review that is overcome only when there is
persuasive reason to believe that such was the purpose of Congress”  need “clear and
convincing” evidence of Congressional intent to preclude review
EXPRESS PRECLUSION
 Express Preclusion = Congress explicitly provides by statute that judicial review is unavailable
 Courts have been reluctant to entirely preclude review, even when statutory language seems to do so
expressly
 Example: Veteran’s Benefits cases
o Congress specified that decisions of VA Administrator “on any question of fact or law concerning a
claim for benefits or payments under a law administered by VA shall be final, and no other court
shall have power to review any such decisions”
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o

D.C. Cir. construed language to preclude review of attempts to obtain benefits, and not decisions
by VA to terminate benefits  said Congress would have stated if it wanted to apply to
terminations  Congress turns around and adds that language in
o D.C. Cir. then holds that the preclusion statute does not bar judicial review of the constitutionality
of benefit statutes and regulations; later aff’d by SCOTUS in Traynor v. Turnage (1988)
Serious doubts about whether the Constitution permits Congress entirely to preclude consideration of claims,
especially constitutional claims  even when some statutory claims are precluded, Court almost always won't
allow preclusion of constitutional questions
IMPLIED PRECLUSION
 Implied Preclusion = a congressional intent to preclude review is implied by the overall statutory scheme or
legislative history
Block v. Community Nutrition Inst. (1984)
Facts: Agricultural Marketing Act of 1937 allows Sec. Ag. to issue market orders to stabilize prices for milk and
milk products, keeping prices high enough that producers keep producing. Consumer group sued to challenge a
particular order regarding reconstituted milk prices.
Holding: [O’CONNOR] Consumers cannot actually request judicial review under this statute, as they are
precluded by implication
 "Consumers" are not mentioned anywhere in the rules process laid out by the statute—ONLY the
Secretary, handlers, and producers are involved  this implies that only these listed parties are to be
included in the review process as well. There is "simply no room" for consumer parties without disrupting
the whole statutory scheme.
 Allowing in consumer suits would allow consumer to sue without having to exhaust all administrative
remedies—but text requires handlers to exhaust all admin remedies  consumers must be impliedly out
Takeaways:
 (1) The presumption of judicial review may be overcome by congressional intent to preclude judicial
review that is “fairly discernible” in the detail of the legislative scheme
 (2) Even though decision is awkward, it is still good law— still cited for proposition that judicial review is
sometimes implicitly precluded
o Awkward b/c era of concern about industry capture, but leaves consumers out—would this
really have been Congressional intent?
Bowen v. Michigan Academy of Family Physicians (1986)
Facts: MAFP challenged an HHS regulation that set the amounts that private insurers must pay physicians for
various services under Medicare Part B. HHS contended that two statutory provisions, 42 U.S.C. §§ 1395ff and
1395ii, forbade judicial review of any issues relating to Medicare Part B payments
Holding: [STEVENS]
 In a previous case, SCOTUS had decided that b/c Congress had detailed review for amount of benefits
under Part A but not Part B, impliedly meant to preclude review of Part B benefit amounts
 Here, SCOTUS decides that Congress intended to bar judicial review only of determinations of the amount
of benefits to be awarded under Part B, not challenges against the method used
49
Takeaways:
 (1) Court begins with the strong presumption that Congress intends judicial review of administrative
action; this presumption will NOT be overcome without “persuasive reason to believe that such was the
purpose of Congress”
o Statutory scheme similar to that in Block—why don’t cases come out the same?
 (2) Even where some claims are specifically precluded, other types/questions may still be reviewable,
given the “strong presumption” of reviewability
Sackett v. EPA (2012)
Facts: EPA issues a compliance order telling a couple they cannot build their dream home on their property
because it is a wetland under the CWA. Sacketts want to challenge compliance order. CWA provides EPA a
menu of options for compliance—compliance order, civil enforcement action (takes place in court),
administrative penalties (reviewable in courts)—but doesn't mention anything about reviewability of
compliance orders. EPA argued that this b/c structure explicitly provided review in some circumstances and not
others, implication that Congress didn't want review in areas didn't mention
Holding: Compliance order is reviewable
 There is nothing in the CWA which expressly precludes judicial review under the APA or otherwise; there is
no suggestion that Congress sought to exclude compliance order recipients from initiating a judicial review
process
Takeaways:
 (1) Reaffirms the presumption of reviewability
o Court rejects EPA’s arguments, even though the statutory construction could suggest there is
no judicial review
o Strong signal from SCOTUS in recent case—presumption of reviewability be deployed even
where one might infer from statute that it would be precluded

An agency that interprets its own statute to impliedly preclude judicial review would NOT receive Chevron
deference from the courts:
o Agency is not interpreting its statute, but interpreting the APA, for which it receives no deference
– FERC
o Judicial review (federal question) is not within agency expertise – King v. Burwell
o Agencies may determine the scope of their authority/jurisdiction, but not judicial jurisdiction –
City of Arlington
o Courts have authority to determine their own jurisdiction
COMMITTED TO AGENCY DISCRETION



Per APA § 701(a)(2), review is precluded when an action is committed to agency discretion by law
In Overton Park, SCOTUS called this a “very narrow exception”
o Created “no law to apply std”: §701(1)(2) precluded review only where statues conferred such
enormous discretion on agencies that judicial review was literally impossible
o BUT issue with Overton Park’s “no law to apply” std: APA specifically authorizes review of abuse
of discretion in § 706(2)(A)—so how are discretionary actions unreviewable?
 Heckler v. Chaney clarifies this: Unreviewable when no meaningful std against which
court can judge agency’s exercise of discretion  would be impossible for court to
evaluate agency action in these circumstances for abuse of discretion
This narrow exception is generally limited to specific, special circumstances:
50
o
o
o
National security cases
Agency decisions not to enforce statute they administer
Allocations of lump sum appropriations
Heckler v. Chaney (1985)
Facts: Death row inmates sued, wanted FDA to stop allowing states to use combinations of drug for lethal
injection which had not been approved by FDA. FDA said it would not interfere w/ states' capital punishment
processes and would not take action against the states for using the unapproved drug combinations.
Holding: [REHNQUIST] Decisions not to enforce are an action committed to agency discretion by law, and thus
is non-reviewable
 Long-standing decision that an agency’s decision not to prosecute or enforce is a decision generally
committed to an agency’s absolute discretion
 Such decisions are unsuitable for judicial review: Involves balancing of agency priorities, which agencies are
more equip than courts to do
 By not acting, not using coercive power over ppl  no liberty or property interest involved in agency's
decision not to enforce a statute; not infringing upon areas courts are usually called upon to protect
 While Congress can rebut this presumption, no rebuttal in FDCA
Takeaways:
 (1) Agency’s decision not to take enforcement action are presumed to be immune from judicial review

Recent formulation of the doctrine in Dept. of Commerce v. NY (2019):
o “[W]e have read the § 701(a)(2) exception for action committed to agency discretion ‘quite
narrowly, restricting it to those rare circumstances where the relevant statute is draw so that a
court would have no meaningful standard against which to judge the agency’s discretion.’ And
we have generally limited the exception to ‘certain categories of administrative decisions that
courts traditionally have regarded as committed to agency discretion,’ such as a decision not to
institute enforcement proceedings, or a decision by an intelligence agency to terminate an
employee in the interest of national security”
STANDING



Standing = determination of whether a particular plaintiff is a member of the class for whom review is
available
Two dimensions to standing in admin law:
o (1) Constitutional – certain min requirements that any P must satisfy in order to bring action in
federal court
o (2) Statutory – Ps who satisfy min constitutional requirements for challenges to agency action
must additionally be appropriate plaintiffs under agency’s governing statues
ELEMENTS OF STANDING
o (1) INJURY IN FACT
 P suffered an invasion of a legal interest which is (a) concrete and particularized and (b)
actual/imminent, not hypothetical
 [NOTE: Standing is the only part where P's injury matters in an admin law case;
only fact-based part of admin law  injury not part of case on the merits
o Standing doctrine might require stronger proof of injury than statute
requires
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

o
o
Example: In MA v. EPA, to establish standing, Ps had to show the
very injury they wanted EPA to find—before they could get a
ruling on whether EPA had to think through whether ppl are
being endangered, had to show that they were likely to be
endangered
Thus, unsettles precautionary regulatory regimes by requiring more concrete
injury  current standing doctrine is in tension w/ features of admin state and
modern regulatory statutes]
(2) CAUSATION
 Causal connection between the injury and the conduct complained of
 I.e. injury result of agency action
(3) REDRESSABILITY
 Must be likely (as opposed to merely speculative) that the injury will be redressed by
favorable action
 Requirement of redressability DOES NOT require P to show that the outcome will
be different if agency re-does process if they have procedural right (Lujan FN 7)
Lujan v. Defenders of Wildlife (1992)
Facts: Sec. Interior promulgates a rule that ESA protections only apply in US and the high seas (i.e. not abroad).
ESA had citizen suit provision, allowing any citizen to sue official for violations of statute. Ps sued to challenge
the interpretation, seeking an injunction requiring the Secretary to restore the initial interpretation of the
geographic scope of the statute. Ps argued they were injured because a lack of consultation for governmental
activities abroad increases the rate of extinction of endangered species.
Holding: [SCALIA] Plaintiffs DO NOT have standing
 Ps do not establish an actual imminent injury
o Said they hoped one day to visit locations abroad “someday” and would be deprived of
opportunity to see animals  injury is too vague and speculative
 Ps raising only a general available grievance about government—claiming harm to every citizen’s interest in
the proper application of constitution and law and seeking relief that no more directly and tangibly benefits
him than it does the public at large—does not state an Art. III case or controversy
Takeaways:
 (1) Reaffirms injury in fact requirement
 (2) Congress may not grant standing to citizens with no concrete injury
 (3) Standing turns on who's filing suit and what their interest is—under modern doctrine, regulated
entities have easier time establishing standing than regulatory beneficiaries


ISSUE: inclusive, all comers spirit of administrative law undermined by modern law of standing  threatens
to take away from forward looking, modern, collective perspective of the regulatory state
o For certain kinds of interests (especially environmental), standing doctrine real barrier to courts
 skews process in favor of regulated entities
o Standing law tries to fit modern problems into rigid, common law mold
 Not good at protecting future - requires actual or imminent harm
 Not good at protecting against risk
 Not good at protecting against collective threats that are shared by all – can’t protect
majority through courts, per Scalia in Lujan
Right now, four SCOTUS justices are sticklers for standing; wouldn't be surprised to see standing requirements
for administrative actions to become stricter
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EXHAUSTION




Exhaustion, finality, ripeness all get to the TIMING of judicial review—cannot bring a case too prematurely or
too late
Exhaustion = requirement that challengers exhaust remedies within the agency before seeking court review
Requirements come from two sources: statutes and common law
o Statutory exhaustion – statute may require parties to present arguments to an agency before
those arguments can form basis of a judicial action (e.g. rehearing requirements)
o Common law exhaustion – courts generally require parties to employ agency internal review or
rehearing processes if agency provides them, regardless of whether statutorily required, before
coming to court
o NO exhaustion requirement in APA § 704
 SCOTUS weighs in in Darby v. Cisneros (1993)  in cases governed by APA, federal courts
can only require exhaustion if:
 (1) a statute the agency is administering expressly requires it, or
 (2) an agency rule expressly requires it and stays the effect of the regulation while
judicial review is pending
 Exhaustion doctrine continues to apply as a matter of judicial discretion in cases
not governed by the APA
Why require exhaustion?
o Protects agency's authority to decide
o Efficiency: agencies make mistakes  give them a chance to correct themselves before involving
the full bureaucracy of the judicial system
FINALITY


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”  APA § 704 creates cause of action for review of
FINAL agency action
o There’s nothing preventing Congress from passing a special review statute which allows review of
non-final agency action BUT no such statute has ever been passed  in practice, finality is a
prerequisite to all judicial review of agency action
o Courts generally harmonize finality requirements in statutes to be consistent w/ APA’s finality
requirements
Test for Finality: (slightly updated since Abbott Laboratories v. Gardner)
o (1) Action must mark consummation of agency's decision-making process
o (2) Action must be one by which rights or obligations have been determined, or legal
consequences will flow
FTC v. Standard Oil Co. of CA (1980)
Facts: FTC issued complaints against 8 oil companies, stating they had “reason to believe” the companies were
violating unfair competition statute. Adjudication of the complaint’s charges began before an agency ALJ and
was still pending 7 years later when Standard Oil filed suit, challenging the complaint as baseless.
Holding: [POWELL] Complaint does not constitute final agency action and thus is not reviewable
 (1) Action is not a definitive statement of agency’s position
o Complaint is definitive on its face, but is not definitive when you look to entire process: just the
first step in process of hearing, appeal, etc.
 (2) Action has no legal force
53
Complaint only requires agency to respond to charges  burden of response does not equal
legal consequence
Judicial intervention into the agency process would deny the agency an opportunity to correct its own
mistakes and apply its own expertise; want to prevent piecemeal review of each step of the
administrative process
P confuses exhaustion with finality
o


Takeaways:
 (1) Actions are final when they are definitive statements of an agency’s position and have a direct and
immediate effect (status of law) on the day-to-day business of the complaining parties (immediate
compliance)
o Agency action is not “final” just because it has some kind of adverse effects on people
Air Brake Systems, Inc. v. Mineta (6th Cir. 2004)
Facts: NHTSA's Chief Counsel issued advisory letters stating that Air Brake’s brake system did not meet agency’s
safety stds. NHSTA posted letters on its website, which had adverse impact of Air Brake’s business, but did not
begin statutory process for determining whether brakes were noncompliant. Air Brakes challenged (1)
statement that brakes didn't meet stds, (2) statement that according to their legal interpretation, warning lights
required; (3) authority of NHSTA chief counsel to issue opinion letters. Issue is whether advisory letters
constitute final agency action.
Holding: [SUTTON]
 (1) Determination that brakes don’t meet safety stds is not final because it is tentative in nature
o Agency letters based on hypothetical facts or facts submitted to agency are non-final (vs.
findings made by agency itself through formal statutory process)
o Agency actions are not final if based on ruling of subordinate officials
 (2) Warning light requirement not final b/c don’t have legal consequences
o This determination is not hypothetical—either requires feature or doesn’t
o However, determination didn’t determine rights/obligations/have legal consequences
 One indication that an agency interpretation has requisite legal consequences if is
agency can claim Chevron or Auer deference for it
 No Chevron claim, b/c interpreting a regulation, not a statute (plus fails Mead
test—not making law)
 Skidmore deference doesn’t help, b/c it permits courts to consider agency’s
expertise and ability to persuade, not its ability to speak w/ legal effect
 Auer/Seminole Rock deference would have the requisite legal consequences,
but NHSTA didn’t claim deference here
o Indicates that agency's own representations about the nature of a
decision it has made relevant to determining the finality, and thus the
reviewability, of that decision
 (3) Chief counsel is not a subordinate official  has authority to issue final decisions
Takeaways:
 (1) By tying finality to deference, courts are conflating finality and merits of case
o Courts have long reviewed agencies' policy statements and interpretive rules without
questioning whether they were reviewable final agency actions  however, lately courts have
increasingly held that policy statements and interpretive rules are not reviewable final actions
unless they are binding on the public or the agency
54

o
o
Merges the test for finality with the test for whether an interpretative rule or policy
statement is a legislative rule requiring N&C
Seems to imply action is final only if agency is likely to win
But recently, Perez v. Mortgage Bankers Ass’n, SCOTUS was reviewing interpretative rule, no
suggestion it was not final  SCOTUS declines to find that having deference equates to force of
law  casts doubts on Air Brakes line of cases
RIPENESS



Ripeness = the agency action is appropriate for judicial resolution at this time
o Powerful doctrine: P could still not get review even if has standing, has exhausted administrative
remedies, and the agency action is final
Why require ripeness?
o Courts want to avoid entanglingly themselves in abstract disputes
o Don’t want to prematurely interfere w/ agency processes
In determining ripeness, courts evaluate 2 factors:
o (1) Fitness = no further factual development is necessary for the issue to be resolved
 Purely legal question
o (2) Hardship = P will suffer hardship if review was delayed until after enforcement
 Requires compliance now, requiring party to do something they would not otherwise do
 affect on “primary conduct”
Abbott Laboratories v. Gardner (1967)
Facts: Pharma manufacturers challenged an amendment to the FDCA, arguing the Commissioner exceeded his
authority in making a new regulation that required prescription drug manufacturers to print the common or
“established” name of their drugs in large letters along with the proprietary or trade name. Sought review of
the amendment, even though it had not yet been enforced.
Holding: [HARLAN] FDA’s action is ripe for adjudication
 (1) Fitness for judicial resolution?
o Rule is final
o Purely legal claim - nothing more to be done here in terms of wondering what the controversy will
look like  fit for review now
 (2) Hardship to parties if judicial review is withheld?
o Would the parties suffer if the courts held off on deciding this now until enforcement actually
comes about? Yes  big impact on the companies here right now.
 Rule requires the companies to comply now by changing ALL their labels
 This is a sensitive industry: people depend on drug companies to be “trustworthy.” The rule
puts companies in a position where they can either lose money complying or lose
credibility with customers by refusing to comply and thus putting themselves in risk of
penalties
Takeaways:
 (1) Two-step inquiry for ripeness – (A) fitness for judicial review (legal question, no further agency action
to come) and (B) hardship to parties if review is withheld (look to nature of industry, “comply now or
break the law” set up)
 (2) Makes pre-enforcement review routine
o Abbott majority dismisses dissent's concern that everyone will race to sue once rule announced 
but expectations about consequences turned about to be quite unrealistic
55



Forum shopping
Inconsistent judgments from different courts
True that pre-enforcement rule doesn't automatically stay rule  but this just means step
one of challenges is often a request for preliminary injunction while judicial review takes
place. Plus, courts have often stayed rules that go to public health and safety (which Abbott
majority didn't think would happen)
Toilet Goods Ass’n v. Gardner (1967)
Facts: FDA promulgated a rule which stated that of a company refuses full access to FDA inspectors at all
manufacturing facilities where color additives are used, the Commissioner may suspend their certifications
(barring them from selling or marketing their products). Ps argued the Commissioner exceeded his authority.
Holding: [HARLAN] Validity of statute not ripe for judicial review
 Rule is final
 BUT there is not sufficient hardship to Ps because it does not affect their primary conduct
o Unlike Abbott, where the companies had to immediately change their labels in order to comply
with the rule, there are no such immediate consequences for the companies here
o The regulation states only that the Commissioner may order an inspection and a permit may be
refused  discretion
 Judicial review would be clearer in the context of a specific application of this regulation 
P can always challenge suspension of certificates
Takeaways:
 (1) An agency decision is not ripe for review where the parties’ day-to-day, primary conduct is not
affected, and they are not required to change their behavior at all in order to “comply”
o Announced same day as Abbott; notable for coming to a different result on whether review was
available immediately
Ohio Forestry Ass’n, Inc. v. Sierra Club (1998)
Facts: National Forest Service developed management plan for national forest in OH. Under the Plan, certain
amounts of logging and clearcutting were permitted, though the Plan itself did not authorize the cutting of
trees—additional permit required for cutting down trees. Sierra Club challenged the plan, arguing it improperly
allowed for too much logging and clearcutting.
Holding: [BREYER] Sierra Club’s claim is not ripe for judicial resolution
 (1) Whether delayed judicial review cause hardship to Ps?  NO
o Sierra Club’s primary conduct is not affected
o Plan does not inflict harm upon Sierra Club’s interests at the moment—can file suit if someone
actually applies for logging permit
 (2) Whether judicial intervention would inappropriately interfere w/ further admin action?  YES
o Would inappropriately interfere with the agency’s efforts to refine its policies through revisions to
or applications of the Plan
 (3) Whether the courts would benefit from further factual development of the issues presented?  YES
o Review of the claim now would require time-consuming judicial consideration of the details of an
elaborate, technically based plan
o Plus, if Service develops/refines plan more in response to specific permit applications, review might
not even be necessary
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Takeaways:
 (1) Ripeness doctrine is another place where see privileging of regulated entities over regulatory
beneficiaries
o Allowed review by those who want gov to stop doing something; blocked actions by those
who want gov to start doing something
o Sierra Club wanted to challenge the rule at its broadest, and now has to bring extremely
narrow challenges instead (“this application in particular is inappropriate” vs. “the whole plan is
against environmental law”)
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