Choosing the Appropriate Standard
for Review
1. Parties’ Choices
Overton Park: The Court had to pick a
standard from Section 706
2. Options were:
a. The arbitrary/capricious standard;
or
b. The substantial evidence standard
or
c. De novo review
Substantial Evidence Review
• Consolidated Edison Co. v. NLRB, 305
U.S. 197 (1938)
• Court construed the term evidence as it
was used in the LMRA to mean
“substantial evidence”
• Substantial evidence is “something more
than a mere scintilla.” “relevant evidence
as a reasonable mind might accept as
adequate to support a conclusion.”
Substantial Evidence
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Reasonableness
Objective factor
Does it matter what the judge thinks?
No, if a reasonable person could have
arrived at the same conclusion as an
agency, then agency’s decision
• STANDS
Universal Camera
• Written by Justice Frankfurter, a professor
of administrative law prior to being named
• Written just after APA enacted
• Determined that Congress’ use of the term
“substantial evidence” was consistent with
Congress’ use prior
• Synonymous with earlier usages of the
term
Universal Camera
• “must do more than create a suspicion of
the existence of the fact to be
established…[i]t must be enough to justify,
if the trial were to a jury, a refusal to direct
a verdict when the conclusion sought to be
drawn from it is one of fact for the jury.”
• Does this make everything crystal clear?
Universal Camera: Process of
Substantial Evidence Review
• Two stages:
1. Fact gathering stage: proceeding
before the ALJ
2. Final agency determination stage
• Manner in which court reviews the agency
record: Burden falls on the lower federal
courts
• Must review the record as a whole
Picking the Standard: Factual
Determinations
• Overton: citizens’ group wanted either
substantial evidence test or a de novo
review
• Government wanted arbitrary/capricious
standard
De Novo Review: Overton
• Does a court have the authority to provide a de
novo hearing? Usually-- no
• May be warranted :
1. “ when the action is adjudicatory in nature
and the agency’s fact-finding procedures are
inadequate”’
Or 2. “when issues that were not before the
agency are raised in a proceeding to enforce
nonadjudicatory agency action
Substantial Evidence Review
• Express language of ¶706
• Review is performed “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….”
• Decision in Overton not the outgrowth of
formal adjudication
Arbitrary/Capricious Review
• Residual ground in ¶706
• If reviewable and no other standard fits
Picking the Standard: Questions of
Law
• “Somewhat different” tests applied
• Distinguishing between questions of fact
and law: sometimes difficult
• How to distinguish: no bright line test
• Mixed questions of fact and law or
“questions of ultimate fact”
The general standard of judicial
review
• Appellate court: authorized to set aside
finding of fact if … “clearly erroneous”
• District judge may set aside jury
findings…”if no reasonable jury could
reach the factual determination at issue”
• Jury is accorded “extra measure of
deference”
APA
• 5. U.S.C. ¶¶556 and 557: [fact finding]:
then fact finding must rest on “substantial
evidence.” ¶706(2)(E)
• 5 U.S.C. ¶706(2)(A): fact finding may be
set aside only if “arbitrary [or] capricious.”
“Mixed question” of fact and law
• NLRB v. Hearst Publications
• NLRB requires employers to negotiate
with “employees”
• Are “newsboys,” employees of the
newspaper publishers?
•
Hearst: Background
• No dispute about what the “newsboys” did
• Had permanent newsstands in various
locations and sold Hearst newspapers
• Generally compensated only for paper
sold
• Not on salary; no guarantee of
employment
• If don’t sell the paper, don’t get paid
Hearst: Background
• Hearst did not challenge the statute on
constitutional grounds
• Management regarded newsboys as
independent contractors
• Hearst fought their unionization because
1. not employees
2. LMRA applied to employer/employee
3. therefore, no union
4. If no union, no obligation to bargain
Hearst: Background
• NLRB: cites Hearst fro unfair labor
practice
• Ninth Circuit: uses common law definition
of respondeat superior: reversed NLRB,
newsboys were not employees and
therefore not eligible to bargain
• Supreme Court …..
Hearst
• Supreme Court reverses
• Agrees with NLRB
• Looks at the legislative history: LMRA
indicates that the common law was not
dealing with the problems of labormanagement relations
• Any reliance on common law concepts to
interpret statute is …..MISPLACED
Hearst
• Defer to the agency
• “[w]here the question is one of specific
application of a broad statutory term in a
proceeding in which the agency
administering the statute must determine it
initially, the reviewing court’s function is
limited….”
• “Warrant in the record” and “reasonable
basis in the law”
Scientific Judgment: Interplay of
Fact, Policy, and Interpretation
• Industrial Union Department v. American
Petroleum Institute (p. 846)
• Benzene Case
• OSHA had to promulgate a standard for
workplace exposure to benzene
• First Secretary adopted a legal limit of 10
ppm averaged over 8 hours of exposure
(American National Standards Institute)
Benzene case
• OSHA then received a report from
NIOSH—stating benzene exp could cause
leukemia—recommended a lower exp limit
• OHSA position vis a vis carcinogen—no
level safe
• OSHA sets a 1 ppm/8 hrs maximum exp
limit as an emergency standard in 1977
• OSHA conducts elaborate rulemaking,
including oral hearing. Final rule 1 ppm
Benzene Case
• OSHA’s command is to regulate “to the
extent feasible” and “on the basis of the
best available evidence.”
• To set a standard “which most adequately
assures…that no employee will suffer
material impairment of health or functional
capacity ….” if regular exposure to the
hazard over working life
Benzene Case
• OSHA interprets with a pro-safety thrust
• OSHA looked at:
(a) whether its standard was tech.
achievable
(b) whether it would “threaten the
financial welfare of the affected firms or
the general economy.”
• OSHA determines 1 ppm feasible
Benzene Case
• Supreme Court reverses
• Interprets the Act as requiring Sec. of
Labor to find that workplaces are not safe
and the proposed standard reasonably
necessary to remedy a “significant risk” of
material health
• Court looks to the statutory def. of
occupational safety and health”
Benzene Case
• Statutory definition : “means a standard
which requires conditions, …reasonably
necessary or appropriate to provide safe
or healthful employment and places of
employment.”
• OSHA did not focus on this standard
• Failed to demonstrate there were provable
dangers to workers exposed to 10 ppm
Benzene Case
• Justice Stevens: provides practical
grounds for judicial caution in 2nd guessing
complex policy making
• How does a Court decide this?
• Judgment often follows the Courts’ built-in
level of confidence in the agency that is
judging
Availability of Judicial Review
• Should review be made available?
• Availability depends on statutes
Reviewability: Whether
• APA lists two categories of cases that are
NOT reviewable:
701(a)(1): statute precludes review
701(a)(2): when agency action is
committed to agency discretion by law
a. Statutory preclusion
• Johnson v. Robison, 415 U.S. 261 (1974)
• Plaintiff had done alternative service in lieu
of serving in the military
• Argued that the VA’s refusal to provide
alternative service was violation of equal
protection
• When challenge the constitutionality of the
enabling act on its face, preclusion does
not apply
Express Preclusion
• “The decisions of the Admin on any
question of law or fact under any law
administered by the VA providing benefits
for veterans and their dependents or
survivors shall be final and conclusive and
no other official or any court of the US
shall have power or jurisdiction to review
any such decision by an action in the
nature of mandamus or otherwise.”
Express preclusion
• Language interpreted by courts to permit
review of constitutional challenges and,
sometimes, of other generic challenges—
unless language is absolutely express and
clear
• Clearly erroneous vs. substantial evidence
standard—which standard provides more
latitude for courts’ authority to secondguess?
Express/Implied Statutory
Preclusion
• Whether broad agency discretion already
exists;
• The expertise and experience necessary
to understand the subject matter;
• The managerial nature of the agency
• The propriety of judicial intervention and
the ability of a court to insure correct
results;
Express/Implied Statutory
Preclusion
• The need for informality and speed in
agency decisions; and/or
• Whether other controls on agency
discretion exists
Implied Preclusion
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Block v. Community Nutrition Institute:
Bizzare?
Is this preclusion or standing?
Bottom line: If Congress wants to
preclude review by statute, it must spell it
out.
Preclusion of Action: Committed
to Agency Discretion
• Remember Overton Park: “committed to
agency discretion”?