Admin 2004
1
ADMINISTRATIVE LAW OUTLINE
Professor Andrew Popper
Spring, 2004
Assignments
The assigned cases must be read. There will be discussion regarding each case. Readings between cases are not required (except as
specified during the course of the semester) but are useful. Readings per class: Stay five cases ahead for each class.
1/12/04
Class Notes
Idea: Want gov’t to be less, but want services to be more . . .
 About governance – about how the US is governed
 Final Exam: 3 1/2 hour. Popper provides case outline for class, but exam is closed-book.
o Things that are statutorily mandated are not open for discretion by the agency or the courts
o apopper@wcl.american.edu
o E-Rulemaking  significance of being able to file comments electronically.
o Popper Contact Info
o phone: (202)274-4233 (office); Rm: 404
o home: (301)897-5636
- Entitled to judicial review except
o when specifically prohibited by statute
o ???
- Law School is a good example of administrative law – good example of the power of agencies
Historically – Administrative Procedure Act (APA)
- built around APA – the organizing statutory vehicle for admin law – Title V (begins at § 551 of Title V)
- includes lots of legislation w/ which we are familiar, i.e., FOIA and E-FOIA, Gov’t in Sunshine & Privacy Laws, Regulatory
Flexibility Act, Regulatory Negotiation Act
- Notably not in the APA are the rules for privatization of gov’t function and the world of gov’t contracts.
- Privatization of Gov’t Function
o Specific review of the courts engaged in review of agency action (court rules have own section NOT in the APA)
o Major movement – privatization – shift of gov’t function from the gov’t to private contractors
o I.E. – Dept. of Defense has active full-time employees 10,000 on specific regulatory tasks, but has 100,000
contractors doing similar functions. So, the idea of privatizing is a dominant force and dominant problem in admin
law b/c when you give to private entities by contract gov’t jobs – raise lots of problems of due process, etc. b/c
private does not have agency structure or experience.
o So, privatization is located w/in the domain of gov’t contracts
o Governs the transfer to private parties is Contract Law and lawyers are the people who govern this.
o Lawyers draft contracts, implement the private gov’t
 i.e., medicare governed by lawyers and often by contract.
 Disputes over contract are often resolved by ADR and not administrative adjudication.
 Basic protections – rulemaking & adjudication that apply to agencies to NOT apply to private contractors
that are implementing the gov’ts will.
 Moral Hazards: w/ the limited mechanisms are great; poss for conflict of interest is great.
 Private must be profit maximizing whereas gov’t entities need not be profit maximizing.
 Agencies can implement a policy that may not be popular at the time is implemented – i.e., certain civil law
 Supreme Ct. decided in Shepard Poultry that giving gov’t responsibility to private entities is unC. Said
congress can delegate responsibility to agencies, but not to private entities. BUT – this is not considered
good law, b/c have been delegating gov’t resp.
- So, APA does not subsume the biggest piece of regulatory action – privatized activity
- base APA structure is simple
o §551 of APA defines the basic terms of ad law (rule, law, license, etc.)
o §553 of APA sets out in simple terms rulemaking
 Rulemaking  is the process whereby agencies make rules
 Gov’t agencies when obligated to do so, or when chose to do so, have the responsibility of producing
Admin 2004
2
regulations
Congress does not regulate – agencies do
Congress does not govern – agencies do
Contrary to the non-delegation doctrine – agencies are the tactile source of gov’t
President does not govern domestic policy – the goal of the President is to lead, not to govern (establish
agenda). President’s power is limited and he governs not thru the white house but thru agencies
§554 of APA – basic statute for process of Adjudication
 rulemaking
 resolution of disputes – adjudication
 licensing is an adjudicatory decision
 all independent judgments by agencies are adjudicatory judgment (ie, parking ticket)
 formal adj – trial by hearing
 informal – everything else that is not rulemaking
§556 – sets out the rules for formal hearings
 Most rulemaking is informal– notice-and-comment rulemaking
 Formal – rule must come from a trial-like process, ie, labor, employment, discrimination fields)
 burden of proof: substantial evidence (higher than preponderance) – closer to clear and
convincing evidence.
 Reliable, probative and substantial to support a decision. But does not include the term
“competent”. Competent means supported by testimony that is NOT hearsay. In agency life,
hearsay is admissible.
 BIG DIFFERENCE – hearsay is admissible in admin hearings.
§701-706 of APA set out basic ideas for judicial review
 2 Exceptions:
 Congress decides non-reviewable
 Committed to the discretion of the agency, then no judicial review




o
o
o
Administrative Litigation
- What is ad lit like?
- What is unique about the correlation requirements between evidence & outcome. (i.e., when you try a case, that the evidence
needs to be important to deciding the outcome – shouldn’t be a surprise.) This is true in ad to an extent
o Consider  putting a stepping station for Pepco and will be buying bulk power. Pepco proposes a new station.
Who gets involved?
 Pepco – as an applicant has the burden of proof
 Staff from public utility commission of DC, Virginia, & MD
 FDRC
 EPA
 State Dept. Protective agencies
 Citizens Groups – favor environmental protection that don’t want the station built; favor cheaper power
(disgusted w/ Pepco prices); Save the Woodchuck Foundation, Chamber of Commerce that needs power
 licensing is adjudicatory – but have 10 parties involved. Although Pepco has the burden of proof, have
evidence that will come in from 10 parties.
 CASE – 10 parties, that have standing, that can intervene, clear interest, and all the want to present
evidence – so cannot use prepon of evidence standard.
 How does this work? How does the decision-maker decide?
 Unique – correlation – how can you use the legal process to regulate all of this information? Title
V requires that you establish a basis for what you are doing when you establish a rule, but that
does not mean that the agency must
 Rulemaking – correlation is next to impossible – b/c goal is to produce a rule that carries out the
intent of Congress.
o fair & just rule – so agency must be educated
o people submit comments to the agency – which represents their viewpoint, and the
agency educates itself. The mission is to educate.
o The rule that the agency chooses to pick does not necessarily have to meet the interests of
any of the groups.
 Conflict: Between best possible & Fairness
 Fairness – preponderance of evidence
 Statutory – best information wins
- When does the action of an agency become a rule?
Admin 2004
3
-
Stare decises, when dealing w/ agencies
o basic idea that there is no stare decisis when dealing w/ ad law
o on the otherhand, agency accountability & credibility is the dominant issue faced by govts at every level – so having
no stare decises does nothing for gov’t.
-
What happens when in Pepco HYPO – the agency decides that it is going to grant the license, but sets out some limitations.
Has the agency issued a rule? NO – issued an order granting a license. But, what if the conditions are such that other
stations have not implemented in the past. When does the agency action become a rule? Are agency decisions precedent?
Who Governs?
- Separation of Powers
o Congress establishes policy
o Agencies implement that power
o Executive guides agencies by the appointment process
- So what happens when a Court overrules the power of an agency?
o What happens to the classical constructs of power? The court is then making public policy.
o Every judicial decision that sets aside the decision of an agency is a violation of sep of powers b/c the courts are
making public policy.
o Chevron  says that the lower cts must think thru sep of power – if an agency has done something thru a rule, an
interpretation, something that is rule-like in nature, that complies w/ what Congress says, and if reasonable in the
way they have done it, court cannot overturn it – Deference. If a ct is required to defer to the decision of an
agency – locking in the functions constitutionally of the courts and the agencies.
o Since Chevron, a number of decisions that have begun to chip away at Chevron.
 What kinds of decisions fall under Chevron?
 Judicial Activism – cts make public policy, don’t care about sep of power
 Judicial Restraint – not just conservative, but constitutional mandate. When are the courts obligated to
interfere and when are they obligated to stay away?
 Agencies need space in order to function – difficult to be an agency, difficult to govern. Need to
be able to make decisions. Which means that agencies need courts to defer to their decisions . . .
- How are the rights of those subject to regulatory actions, then how are private people protected?
-
Whether/How To Regulate
o Historical bases for Regulation
 Go thru significant changes to the extent we accept regulation
 Most common variable affecting the extent of regulation is the power of the president
 1968 – 1973 – Nixon – explosion for regulation
 Carter – deregulation.
 Reagan – see programs put into place.
o Current bases for reg
o Why do we regulate
o Public Perceptions of Reg
1. INTRODUCTION
A. Read Ch. 1 in Bonfield [Read for 1/14]
 Administrative Agencies are units of gov’t other than the legislature and the courts
o Agencies typically have legal power to affect the rights or duties of individuals and entities outside the gov’t
o Agencies administer or execute law under powers delegated to them by statutes.
o May be headed by a single official or by several officials
o May be called a department, commission, board, or other name
o Most agencies are part of the executive branch but others are independent of the executive.
o Most agency heads are appointed by the chief executive, in some states, agency heads are elected
o Agencies vary in size, number of determinations made each year
o Regulatory Agencies– they enforce a mandatory scheme of prohibition or obligations (such as
environmental protection).
o Benefactory Agencies – disburse benefits, such as Social Security
 Administrative Law deals w/ the legal principles common to all administrative agencies, including the procedures that
agencies use to carry out their functions and the rules relating to judicial review of agency actions.
o Admin Law also defines the role of the courts, the legislature, and the chief executive, vis-à-vis agencies.
o It does NOT deal with the substantive law enforced by agencies.
Admin 2004
4
o Procedural law, NOT substantive
 Administrative Procedure Acts (APAs) –
o General, meaning that they apply to all or most agencies rather than to just one or a few.
o Comprehensive, meaning that they deal w/ the main problems in admin law: public access to agency info,
agency rulemaking procedure, agency adjudication procedure, and judicial review.
o Enacted in 1946, the APA established the fundamental relationship bwn regulatory agencies and those whom
they regulate – between government, on the one hand, and private citizens, business, and the economy, on the
other hand.
o The balance that the APA struck between promoting individuals’ rights and maintaining agencies’ policymaking flexibility has continued in force, with only minor modifications, until the present.
1/14/04 Class Notes
Example: When an agency set of decisions for a particular market will provide a better, more efficient system than an open market.
Administrative law is a question about capitalism.
- Answer by Pres.  in best of situations no regulation at all – if each trade choice is a ballot, then the balloting of the open
market will create a result that is more indicative of the public desire than any regulatory body could produce. But, this is
rhetoric, an ideology.
- Current Trend: Market Forces over Regulation
- But, the historical mission  contemplates the existence of a regulatory state and that the purpose of gov’t is to limit itself.
Gov’t will exist and then the challenge is how small can we make it while still maintaining the important
- Why don’t open market forces always produce what is best for our society? Answer: Not everything that we want is
consistent with majoritarian will. Not everything we need is how we would vote if given the chance.
- People purchase things based on self-interest
- If you make the assumption that individuals will act the way which is best for them individually  so profit maximizes and
efficiency seekers – BUT we have greater over-arching values which must be protected
o public health
o protection of intellectual property
o freedom of information
o Constitutional goals  free speech
o But, our individual choices may not be consistent with maintaining these programs
- So, regulation is necessary
- But, must be careful about the reasons for regulation
History of DeRegulation
- 19th Century  debate over the size of gov’t
o size of the bank
o development of interstate commerce
- 20th Century
o series of failures in the workplace
 devastating accidents – death
 no workplace safety
 a consequence of market force
- Modern Revolution of the Regulatory State
o Regulation means executive power
-
Are federal administrative agencies part of the executive or legislative branches?
o don’t really know
-
It is impossible to see an agency as part of Congress, but it is definitely connected to it.
Conflict  Desire for less gov’t vs. Need for public services
Carter  announced that he would clean up the regulatory system (blamed the economic recession on this)
o Deregulation – to abolish regulatory lag (make agencies more efficient). Thought this would reduce costs and put
the US back in bounds economically
o This turned into aborition of regulation itself. Instead of making agencies more efficient, the actors made some
agencies non-existent.
Enter the ‘80s with an aggressive program in place by Carter
Implemented by Reagan.
-
This tension is always there  there has never been a period of complete contentment.
Admin 2004
5
Why have regulation at all?
- 1. Why not let Congress implement them by passing laws that they exist – letting the Courts enforce?
o Congress doesn’t have the tactical skills to regulate
o They are elected – not experts
o They have too many other things to do
o They don’t have a forum for hearings so any disputes that come up as a consequence have no where to be heard
o As an institution, they are subject to political abuse b/c Congress is a political entity
- 2. What are the circumstances that necessitate regulation by agencies?
o public benefits: health care, protection of intellectual property, constitutional rights, etc.; drivers licenses . . .
o Get the ability to deal with a huge number of cases  courts are not set up to deal with millions of cases. But you
can have thousands of ALJ, etc. that can resolve the disputes that arise within the gov’t.
o They can set broad standards and they can provide oversight. Courts are not capable of great oversight
 regular reporting to agencies
 regular inspection by agencies
o Consistency  Agencies can give market actors a sense of regularity
o Can provide on-going expertise
o Flexibility  agencies are much more flexible than courts (courts are bound by stare decisis) and Congress (bound
by passing in both houses and pres. approval)
 flexibility and responsiveness in the face of crises
o Expertise/Specialization 
 i.e., transportation, food – want people with a deep understanding making the decisions.
 When there is a market failure with mad cow diseases  we look to the agency responsible.
 When there is not enough flu vaccine  who is blamed? The Gov’t b/c it is a public need
o FAA – air traffic control. People want airline safety.
Argument for Agencies/Regulation
- Pro-regulation person – think airplanes overcroweded, lack of service to small areas. The price structure of airline industry
is irrational – can fly from Washington to Paris for less than it costs to fly from Washington to Pittsburgh.
Justice Breyer has frequently written about why we regulate. Breyer is a progressive.
- Breyer & Scalia are both extreme experts on administrative law
- Breyer says that the justifications for regulation are really economic, but must look at economics broadly. Monopolies are a
reason to regulate.
o In a capitalist society – people are motivated to succeed – people believe it is good to beat our competitors. So a
natural tendency (which we support) – but the end product is that someone WINS
o Winning creates profit maximization – and when you win big, you get monopoly power – and get the opportunity to
charge whatever you want for the service.
o SO – monopoly power and excess profits are the first reasons to regulate – b/c at the end of the cycle, the system
doesn’t produce the good we are looking for.
- Breyer also says that the idea of externalities in our complex world require regulation. Things are never as they seem
o there are always hidden costs that can’t prepare for
o so regulation brings down barriers that prevent entry into certain areas
- The reason to presuppose the existence of a regulatory state is equal access to information
- Unequal bargaining power – there are certain inevitable bargaining powers in the market. Need reg structure to ensure
equal bargaining power.
Argument Against Agencies
Risks With Agencies
- not accountable to anyone
o to control, Congress can cut an agency’s budget, but they can only cut it so far
- special interest can capture the agency and thus the agency is no longer acting objectively
o agency head begins to relate more with the field he’s regulating than the public he supposed to protect.
o there comes a point where objectivity is no longer reliable. But, this is not the point at which the person is kicked
out – they are moved up – the longer you are in gov’t the more you move up.
- incompetence – ad law has a good faith premise – that those who regulate act in good faith
o threat to good faith premise falls on compensation scales
o money drives our vision of competence – belief that someone making $1 M is more competent than someone making
$10,000. So, there is a fear of incompetence
- Favoritism  who are the preferred entities that you are regulating?
o contractors that are particularly well-treated
Admin 2004
-
-
6
Preference for Well-Counseled, Sophisticated Entities  ratio between amt of money people spend on attorneys and
lobbyists and their success with a regulatory agency. The well-counseled will get better treatment that un-educated people
who expect the agencies to do all the work for them
Regulation means loss of market force – regulators fix public choice balloting
o how many permits
o what countries with which we will trade freely
o level of pollutants
If the conflict between good regulation & private market being most efficient is understood – move to next conflict
CONFLICT
Fairness/Due Process Elements of Decisions VS Equality of Decisions on the Other Hand
Who makes the better decision? Someone with access to lots of information.
- to be fully informed, a regulator needs complete access to information, which means that privacy must be compromised.
- presumptions of privacy, presumptions of innocence, access to counsel, the right of cross-examination  all restrict the flow
of information
- fairness in decision-making against privacy interests
- balance individual interests with collective interests
o i.e., if we want the tightest airline security possible, then need to give up privacy rights – x-ray everything
- It depends on the regulatory goals that you have!
- Conflict Between Privacy & Fairness in the Regulatory World
Sources of Administrative Law
- Agencies get power from legislation
- United States Code, State Statutes – where they get their power to act
- The interpreter of law is the Courts by constitutional mandate
- After Congressional laws are interpreted, get to regulation
- regulation – a rule that an agency creates at the fed. level. The existence of regs are facts and all that are either proposed
or adopted are listed in the federal register
- FEDERAL REGISTER  publishes everything that the gov’t proposes
- If adopted, goes into the CFR (Code of Federal Register)
- CFR  regulations are written out  where the adopted interpretations, guidelines, and statements of consideration are
published.
o Agencies produce interpretations and guidelines, which do not require public rulemaking. These are published in
the CFR
- Agency decisions – agencies, like courts, resolve disputes. There are reports of agency decisions
- Presidential Docs  weekly compilation of pres. documents
Independent & Executive Agency
both are governed by admin law
- independent: more removed from the political process
o i.e., SEC
o usually a collegial body – group of Commissioners
 Commissioners are appointed for a certain number of years and almost impossible to remove
o anything that says Commission has greater
- executive – single administrator that serves at the pleasure of the president
o cabinet level – defense, transportation
o presidents control executive agencies
o The term follows the president (person is removable by pres) and term ends with the president
- Both types exists like mini-monarchies
o At top: Administrator/Commissioner
o But really look like gov’ts – courts, app courts, hearings
o a lot of agencies look like state gov’ts
Non-governmental Entities
- Privatization – transfer of power from gov’t entities to non-gov’t entities
o Some are chartered organizations
 Port Authority
 Red Cross
 Fannie Mae
Admin 2004
-
-
7
Inter-Gov’t entities/agreements
o Medicaid
Contracting Out to Non-governmental Services
o the contract provides the gov’t right
o will have to wait and see what this will produce in terms of public interest
o receiving public money does not mean that a company has to set up like an administrator
o private entities carrying out public function
Delegation
o Delegation involves 2 things:
 1. Fact that Congress can only delegate the power that it has; and
 courts usually catch these mistakes
 i.e. Congress delegates power to agency to hold criminal trials – but they don’t have this power
b/c it belongs to the Executive
 Congress cannot delegate away powers that are specific in the Constitution. Congress cannot
delegate to IRS and Treasury the power to tax
o but can delegate administrative procedures for carrying out these functions.
 2. Congress has to delegate with precision
 If congress does not delegate w/ precise provisions, it violates Separation of Powers
 How precise does Congress have to be so that it is not transferring its power under the Commerce
Clause to govern?
o FTC – suppose to regulate and deal w/ unfair methods of competition – are they
constitutionally precise delegations
o Imprecise delegations – sep of power issues. If rulemaking by an agency is the vehicle by
which the agency creates policy, then the delegation is insufficient.
o A VERY fine line
Class Notes 1/21/04
Discussion of State of the Union Address
- presentment/bicameralism  how does policy become law and how does a governor govern
o faith-based initiative  don’t preceed thru rulemaking b/c gives a lot of credit to divergent viewpoints that aren’t
really important to the issue
o Executive Order  doing something that escapes the reviewability of administrative law
o Executive Orders are non-reviewable (no judicial review).
To get into Court, must have both:
- Standing
- Case and Controversy
- Courts do not review interpretations, b/c its just opinions.
- When agencies issue an interpretive order, its not reviewable b/c it
- Agencies always have the option of avoiding the totality process by interpretations
o once the movement its applied, then its reviewable
o and when in court, the review of an interpretation is more penetrating than that of rules b/c there has been no
notice and comment, no public scrutiny at all.
-
Suggests that a rule has credibility in court  more so than an interpretation
E.O. is also an opinion – so this is also a very powerful device. The president is using a power of the White House.
EO not necessarily enforceable of its own merit, and its open to critisizm.
Social Security:
- substantive: force of private market (is this a better vehicle)
o public investment process thru SS
conflict between market theory (money goes to the market) & the “lock box” idea (money in safe place that no one touches)
o conflict represents fundamental viewpoints
What did The President NOT say 
- if president articulates a progressive agenda (clean up environment, etc.) then open yourself up to critism about “where will
we get the money”
- Administratively  no new big programs
- Election and campaign will focus on domestic and foreign policy
THE RULEMAKING-ADJUDICATION DISTINCTION – Generally, when general facts are at issue, rulemaking will be permitted; but
Admin 2004
8
where specific facts are at issue, adjudication will be necessary.
- these cases important for distinguishing what agencies can/cannot do
B. Adjudication
Londoner, 210 U.S. 373 (1908). pg. 73
[Read for 1/14]
FACTS
Londoner (P) a landowner in Denver (D), brought suit against the City
challenging the assessment of a tax for the cost of paving the street abutting his
property on the grounds that he was denied due process of law.
Londoner was provided with notice of the assessment, but the notice only fixed a deadline for the filing of
complaints and objections and not a time for a hearing. Subsequently, w/o further notice or hearing, the city council
enacted the assessment.
The City of Denver argued that its actions were supported b/c the landowners had the opportunity to submit any
objections in writing.
Trial Court held for Londoner.
Supreme Ct. of Colorado held for Denver.
Supreme Court of US held for Londoner.
ISSUE
-
-
-
Where a tax is to be assessed upon property owners, do those affected by the tax
have the right to argue their side and support their allegations by proof?
due process case involving the opportunity to be heard (by speech)
How did the decision get made that there should be improvements?
o City Counsel votes – legislative judges
o In this case, suggestions for improvements can also be made by petition.
 The legislative process is a rule-based process for prospective (should we build a road?)
o Similarly, a proposal for a rulemaking in an agency can come from a recommendation of an agency.
In admin law, have rules about standards that should be set. Legislative in nature, and b/c of this, they are not adjudicatory.
o Hard to envision what a trial would look like in Congress.
Once the counsel decided to build the road, then had to pay for it.
The process & decision about who should pay for what is NOT a legislative judgment; however a judgment about what is
deductible is a legislative judgment
What was the basis for the amount of money each landowner would pay?
o The benefit they rec’d from the new road  from footage, how much property is affected by the roadway.
Why doesn’t a written petition suffice?
Answer
FOUNDATION for conceptualizing adjudicatory rights in ADMIN LAW
1. small number of people
2. not equally effected
3. interests are fairly specific
4. effect is essentially retroactive
When dealing w/ small number of people, Con requires a process by which each person effected can state a claim. Due
Process will not let your property taken from you
If an agency is going to do something to you specifically, then you have a right to a hearing.
However, what a “hearing” has changed over the years
Londoner establishes basis for adjudication where gov’t is in conflict with an individual.!!!!!
C. Rulemaking
Bi-Metallic, 239 U.S. 441 (1915). pg. 75
[Read for 1/14]
BI-METALLIC OPENS THE DOOR TO REGULATION BY THE GOV’T BY RULE
- a power to issue rules, but not a right that is absolute  there is judicial review, but the issue of jr, is how much can you
review?
FACTS
Bi’Metallic Investment Co. (P) sued Colorado (D) to enjoin enforcement of an
order increasing property taxes in Denver. Bi-Metallic argued that it was entitled to an opportunity to be heard in
opposition to the order.
Admin 2004
9
ISSUE
Are all property owners entitled to an opportunity to be heard prior to adoption of
an administrative order which increases property taxes?
HELD
NO. Agency orders and rules which will affect vast numbers of people may be
adopted w/o affording every interested party a direct opportunity to be heard.
COURT
It would be impractical to allow all individuals affected to offer a direct voice in
support of or in opposition to an order. Thus, the Constitution is satisfied by the fact that, as voters, the TPs
involved exercise power, direct or remote, over those responsible for the order.
Legislative Facts: are those which primarily involve determinations of broad policies or principles of general
application, e.g., whether every tract of land in a large city has been under-assessed for property tax
purposes.
RULE
When an agency rule will affect a vast number of people, the Constitution does
NOT require that each be given an opp to be heard directly for the purpose of arguing in favor of or against its
adoption
HELD
YES. The proceeding need not be a strict judicial proceeding, however, but the
requirement of a hearing is not satisfied by the mere opportunity to submit objections in writing. Therefore, the
assessment in this case was void.
Class Notes 
- This is an executive decision, so did not consult the public regarding the decision. so, similar to Londoner in that nobody
was asked.
- How are members of the public protected from arbitrary action?
o the process of election (to throw out the rascals) – but this is an awfully distant
Court  there must be some limit on the rights of individuals if gov’t is to go on
The beginning of rulemaking.
- Agencies are going to have to issue things prospective and will obviously affect people’s property.
- Argument: the gov’t needs to be able to function somehow
- There will be an administrative state in the US  they will issue rules that will affect property. But if everytime an
individuals rights are affected, everyone is allowed a hearing, would never get anything else done.
- So, although hearings would be preferable,
- Held: no individual right to a hearing
Argument: if my client is substantially effected by a rule, its inconceivable that the client cannot get a hearing. So, the idea of
substantial impact.
- but, sub impact is universally rejected, b/c it is expected that people will be substantially effected.
Why is this such an important case (after the rulemaking issue).
- establishes the ability of the early part of the federal regulatory state to exist
- established the authority to regulate RR rates  interstate commerce
Do the homeowners in this case have any other rights?
- Ultimately, if a homeowner doesn’t pay, then the gov’t will take them to court and the issue can be adjudicated in court.
- challenge individually how the across-the-board rate effects the individual person. Can not challenge the rate (40%), but
can challenge how the rate affects your property.
D. Bowles (supplement) [Read for 1/14]
FACTS
WWII – Gov’t enacted price control act. In certain areas, rents would be capped at pre-war
levels. And there was an administer to look at the rates to determine whether they were too high
or not.
 managerial assessment
ISSUE:
The validity of the state court injunction that ruled the State process unconstitutional
Admin 2004
10
COURT:
Affirms the process of the agency
Court considers this type of case:
o reasonable process & see no reason to let a state court undo the process that has been established – state ct. cannot
undo a federal regulatory scheme; AND
o we’re at war – draining our energy that should be put to that effort. Constitutional by-pass national security case.
o Con does not require all public acts to be done in town meeting.
o Question becomes one of timing: When does a challenge take place.
 A: If its property that’s taken, the challenge can happen after the fact, b/c property can always be given
back (can always make someone whole by giving them money)
 If it was a liberty interest, however, liberty interests CANNOT be replaced
 distinction bwn liberty & property
-
The case shows what happens when the gov’t exercises “unbridled discretion”  doing something w/o a process to protect
us.
Popper  Bowles Opens Question: If Bowles had gone thru normal process (and not short-cut), good chance that she would
have won the case.
Idea: The state court action to challenge the federal agency ruling. About a taking of property, a rent-reduction -> individual judgment that is a taking
Idea: also a jxd issue here  which court should hear the case.
-
-
Also: finality case  a process for review that wasn’t completed. If a matter isn’t complete that starts at an
administrative agency, then a court shouldn’t hear it (kind of like exhaustion of remedies).
Finality doctrine  before it is ready for review, must have a final agency action
Exhaustion  set up agencies to sort thru thousands of claims, so must exhaust administrative remedies and hopefully that
will help sort out problems.
o exceptions: if criminal liability or unconstitutional act, then exhaustion can be waived. EX  if TV station lose its
license b/c failed to pay a fee. And in addition to paying fee, must go thru another licensing hearing, then the FCC’s
time-lag may be such that it can go straight to court.
Waiver Case  if you don’t go thru the processes established in agencies, then may waive the right to judicial review.
Access to the court for review is NOT automatic (lots of concerns)
- in this case
o statute: contemplated issue that was administrative
- P initially filed her claim in GA state court.
E.
-
Scope of Judicial Review – Issues of Legal Interpretation
Can a court undo the decision of an agency b/c the decision just seems unwise.
Is there room w/in Art. III for judges to exercise judgment about the wisdom of legislation
What role do judges play in forming the administrative state?
How much power to courts have?
Bush is all wrapped up on the role that courts play in formulating public policy.
1983  PSC v. Mid-LA gas (9 months before Chevron).
- question of the nat’l gas policy developed by FEC
the interpretation of the agency of the nat’l gas policy came before the Sup. Ct.
- Ct. decides that although it understands the commission, thinks its contrary to the history, philosophy of the natural gas act.
Chevron, 467 U.S. 837 (1984). pg. 560
- Raises questions of deference, stare decisis
- Appointment Power
- Ability of the President to Govern
- These cases are about getting the rule of deference down  b/c this is what gets tested. The relationship bwn courts and
agencies.
o However, Chevron is most about the President and about the difficulties of being President and the problem of
running the country. How the executive powers get exercised and the separation of powers.
o Fact is that what is in play here factually, is an explicit executive judgment about the balancing bwn fiscal
Admin 2004
11
o
FACTS
incentives to create a stronger infrastructure w/o creating strong environmental controls AND the goals of NEPA
of improving the environment on the other hand.
Matter of Executive Power and whether this power is easily subordinated to the courts.
The Natural Resources Defense Council (P), an environmental protection group, challenged an EPA (D) regulation
that adopted a plantwide definition of the term “stationary source”
Congress amended the Clean Air Act of 1977 to address states that had failed to attain the air quality standards
established by the EPA. Due to a change in administration, the EPA went thru a difficult process promulgating
regulations for the amendments. In the end, the EPA adopted a definition of “stationary source” – that is, a building
that emits air pollutants – that allowed an existing plant to get permits for new equipment that did not meet the
standards as long as the total emissions from the plant itself did not increase.
P challenged the regulation. The Ct. of Aps set aside the regulation and Chevron (D), an affected party, appealed.
ISSUE
Are agency regulations resulting from express congressional delegation of authority given controlling weight unless
they are arbitrary or manifestly contrary to the statute?
HELD
YES. Agency regs resulting from express congressional delegation of authority are given
controlling weight unless they are arbitrary and manifestly contrary to the statute.
COURT
The Clean Air Act did not explicitly define “stationary source”. If Congressional intent is clear from the statute,
courts must give effect to that intent. However, where Congress has NOT
directly addressed the question, there is an express delegation of authority to the relevant agency to fill the gap
and elucidate the statute with a regulation.
HERE, Courts must give the regulation (of the agency) controlling weight and therefore, can strike it down ONLY if
it is clearly wrong or arbitrary. In this case, Congress did not have a clear intent on the scope of “stationary
sources.” Congress gave the EPA authority to define the term in regs, and the Ct. of Aps should NOT have
substituted its own judgment for the EPA’s decision.
RESULT – gives agencies very broad powers to define their own boundaries of authority. The Court noted that the policy
arguments should be directed to the legislators and administrators rather than to the courts.
What was being reviewd? A rule – regulation promulgated by the EPA
- normally in a RM (by § 706 subpt. 2 APA act)  rulemakings are reviewed in terms of their process, whereas adjudications
are reviewed by substance
- RM  if the process is fair, then the rule is not arbitrary or capricious
In this case, substance is being reviewed  there was nothing wrong with the process
Question was whether Chevron’s decision was accurate
Court of Appeals stated that the EPA was wrong, used economic instead of environmental process . . .
- bubble concept: view factory site as having a bubble over it
Circuit Court said bad decision b/c allows new source development w/o regulating it. Not improving environment, just keeping it in
place
What is the ultimate standard the Supreme Court suggests to test the substance?
- 2-Step Process
1. Does the statute have clear meaning
o If YES, then agency decision is given NO DEFERENCE
o If NO, then go to (2)
2. Assuming statute is not clear, but ambiguous
i. Whether the interpretation of the agency is reasonable. If reasonable, then the Court must give
deference to the agency’s discretion.
Class Notes
1/18/04
Step 1:
- If a law is unambiguous (e.g. CLEAR and explicit in what it says), then the decision of an agency is entitled to NO
DEFERNCE whatsoever.
Admin 2004
12
o
o
The job of the agency is to implement the law – it is a level of mistake in the law
Usually, cases end up with an argument over whether or not the statute is ambiguous.
Step 2:
- If the law is ambiguous, (or even if unambiguous, but there is still a question about HOW to implement the objective), then
there is still judgment by an agency in rules, regs, etc. . . .
o Whose judgment is involved in a rule?
o since Carter, its explicitly the judgment of the President that is in play in agencies and therefore the rules
o OIRA  has awesome power to overview proposed rules and regulation – rule review. Every agency is required to
participate in formal means where the rule goes thru the White House system to get clearance for the rules to make
sure it is in line with what the President wants to do
o Question becomes  what to do when looking at the judgment of the President and not the courts.
-
-
-
Statutory mandate  you can’t pollute w/o getting a permit. The States were supposed to develop rules to deal with new
state pollution. States that didn’t yet met the EPA mandate, then states were supposed to do something to deal with the air
quality. And, if the states don’t do anything, then EPA can step in.
o statute is ambiguous – nothing is implicit
State Rule  new source of pollution is not really so new if there is a balance . . .
Ct. Ap  says EPA standards only have one acceptable interpretation, and that is that there would be no point in having a
NEPA enforced by EPA if the goal was to maintain the existing quality of the environment.
o What is wrong with this analysis? If Congress had wanted to say that the permitting process had to be used to
IMPROVE the air quality, then Congress would have said it explicitly. In fact, they didn’t even really explain what
they meant
o Ct. Ap inserted its value structure.
Problem is that there is no meaning in the statute of “stationary source”.
With ambiguous statute, power of president in play; when unambiguous statute, power of legislature in play
Rationale for Chevron Case  Court must figure out if the agency’s rules are a reasonable interpretation of the legislative
mandate
o If reasonable, the Court is not in a position to undue the decision, and therefore, must give the decision high
deference.
 In this case, the EPA’s definition/interpretation of “stationary source” is reasonable.
 Court says its not which is the BETTER interpretation of the statute, it means REASONABLE
interpretation, and therefore, its entitled to deference.
 WHY is the best interpretation doesn’t win? B/C that would be a separation of powers problem. The
president has won the election and so he has control of this . . . this is not for the Court to second-guess
the President. This is the President’s power!
 What does this say about stare decisis and administrative law? There isn’t any. When it comes to the
regulatory state, there cannot be stare decisis b/c the regulatory state changes every 4 years, and the
incoming President would not have the ability to govern.
 What does this do for those who are majorly effected by rules? E.G. Long-term company may love this
rule when passed, but the later down the road, a future president changes the regulations. From a
business perspective, the court is allowing the agency to double-back on administrative policies (no
consistency)
 lack of consistency  effects the public’s willingness to follow the administrative regulations.
 The inconsistency of AGENCIES  tells us why there is lobbying (about money, about
information). The right to influence elections. When consider the lack of stare decisis in
administrative law, go out and support a candidate that will change the regulatory program.
 In Chevron, in admin law, every President has the right to redo regulatory programs  it is not up to the
courts to undue the legislative process (undue presidential elections).
 Court says  a new presidency is a basis for changing regulatory policy – elections count
 POINT  Congress (changes every 2 years)  and can change administrative policies  if Congress
does this clearly, then will overpower the President. The problem comes in, however, b/c in Congress,
there are conflicting ideas and therefore, Congress will pass laws that are not clear . . .
 Federal Judges are not there to make judgments as to the meaning of Congressional Acts – federal
judges have no constituency; their job is limited – there job is NOT to second-guess the Congress or the
President.
 Keep in mind, this is a rulemaking (subject to notice and comment) and not just the President
authoritatively making up rules. New rules are subject to some review of public.
 Moreover, In previous case we discussed, Court “we are not going to support the decision of this agency
b/c we believe that it is inconsistent with the legislative history of the gas act?
Admin 2004
13
o
 The norm is deference  so mainly look at cases where a court does NOT give deference.
In NOT reasonable,
F. The Limits of The Chevron Doctrine
Christenson v. Harris County, 120 S.Ct. 1655, 529 U.S. 576 (2000). (supplement). pg. 45, 51.
Question: The extent to which an agency’s interpretation warrants deference (as opposed to a rule).
For rulemaking, as a general proposition (pg. 717)  5 USC § 553(b)(3)(A)
- Question: how is an interpretation different from a rule that comes form a rulemaking ( a quality of public engagement)
o interpretations do NOT have public participation and are non-reviewable b/c no case & controversy. But, once in
place and applied, then reviewable
- Interpretation about comp time, and what level of deference should be given to agency actions that are not purely
adjudicatory or as a result of a rulemaking.
- In 1997, Auer v. Robbins, agencies interpretations of their own rules are entitled to deference
-
Interpretation about comp time, but boils down to the question of ambiguity, and how it effects the review of
interpretations
o Chevron, if statue is unambiguous (clear), no deference to agency
 if ambiguous (unclear), then move into world of reasonableness
o Christenson  if regulation is ambiguous (not clear), must deal with Auer deference (and matter of the agency’s
judgment)
 If unambiguous (clear), then NO deference to the agency, look at clear meaning of the regulation.
-
If employees work more than 40 hours/week, then build comp time or get paid time 1/2 or better.
Public employers have limited budgets, and just b/c people work a lot, doesn’t mean that the employers have more money.
So, they would rather give employee’s a day of comp time, etc.
o Invariably, employees contend that FLSA gives them the options of time or money.
o Emr’s contend the get to make the decision
o Often, this issue is decided by statute or contract . . .
In this case, interpretation from DOL that absent a prior agreement, an employer can not force an ee to take comp time
instead of money.
Ap Ct  said the DOL is wrong
DOL says can’t compel ees to take one option or another w/o an agreement
Supreme Court  policy stmts and guidelines is not what Chevron was about, but interps. and guidelines are entitled to
some deference b/c
o But an interpretation that is contained IN a rule, then Chevron would apply
o If interpretation is outside the rule, then not a regulation, then should look at Auer – is interpretation of existing
rule where ambiguity? Agency interpretations of their own regulations are entitled to deference
o BUT, will not give deference if the agency reg being interpreted is NOT ambiguous (if the agency regulation clear,
plain-meaning) then no deference to the agency interpretation
 If clear, then court’s job to define the plain-meaning of the rule
 Problem: b/c this regulation (for most people) is ambiguous; and therefore, the court’s decision saying
that this was CLEAR – was seen as taking a big chunk out of Chevron.
 The question of ambiguity/non-ambiguity is fluid  b/c most can be interpreted either as clear or
as requiring interpretation.
-
FACTS
County workers sued their employer for violating the Fair Labor Standards Act. The county rec’d an advice letter
from the Acting Administrator of the Wage and Hour Division of the Labor Dept, supporting the employees’
reading of the Act, but had not complied with it.
COURT
Interpretations such as those in opinion letters—like interpretations contained in policy statements, agency manuals,
and enforcement guidelines, all of which lack the force of law—do not warrant Chevron-style deference. Instead,
interpretations contained in opinion letters are “entitled to respect” under our decision in Skidmore v. Swift, but only
to the extent those interpretations have the “power to persuade.”
HELD
The County is allowed to implement its policy b/c FLSA did not speak to the issue.
NOTE
Chevron  Court must give effect to an agency’s regulation containing interpretation of an ambiguous STATUTE
Admin 2004
14
Skidmore  Interpretations in opinion letters are entitled to respect under Skidmore, but only to the extent that those
interpretations have the power to persuade.
Auer  An agency’s interpretation of its OWN regulation is entitled to deference BUT only if the REGULATION is
ambiguous.
Christensen  Interpretation of regulation (in opinion letter, etc.) does NOT warrant deference where the regulation is clearly
permissive.
- restoration of a body of case law that says that courts should be respectful of agency decisions (different than deference)
and the amount of respect is different
o amount of agency work – higher respect
o public expectation – certain things agency’s do upon which people should be able to rely, and the higher the level
of public expectation, the higher the level of respect.
o kind of interpretation/action from the standpoint of its very nature  if this is the kind of day-to-day decision an
ageny must make, then not really looking at something that is entitle to a whole lot of respect (this types of
decisions are predominantly adjudicatory – and therefore, Chevron doesn’t apply)
Statute
Chevron  Deference to agency’s interp. of ambiguous
statute
Skidmore  Agency opinion interps get respect, but only to
the extent that they have the power to persuade.
1.
2.
Regulation
Auer  Deference to Agency’s interpretation of its own regulation.
Christensen  No deference from Opinion interp. where regulation
is clearly permissive.
Does agency have power to do what its doing?
a. Chevron, etc.
Are the agency’s actions constitutional?
a. due process – does not come into play unless there is an interest that is Constitutional
b. until 1960’s – it was Constitutional if there was a “right” – then justified implementation of due process
i. but, if it was a privilege, then did not implicate due process (i.e., working somewhere, immigration,
licensing)
c. late ‘60’s  whether right or privilege was discretionary, so moved to liberty or property interest
i. If so, Constitutional interest implicated
1. Liberty – if have liberty interest, then deserve due process before that right can be taken away
2. Property – statutes, grants, contracts
ii. If not, then Constitutional not implicate
d. Without a right/privilege, liberty/property, arguments must become common-law or statutory instead of
Constitutional
e. With liberty/property, before process is due, must know about the nature of particular right or interest involved
i. nature of individual’s interest
ii. nature of gov’ts interest (broader policy implications, statutory implications)
f. Are these interests existing or new?
g. What is the probability of error? How good is the process?
h. Prof  due process, l/p interest, if so, is it effective based on indiv. interest, gov’t interest, temporality of interest,
and the probability of error. Then, a balancing of these . . . the more explicit the interest, the more Constitutional
the process should be
i. the more vague the gov’ts interest, the less the courts should be involved, the less constitutional the process
must be.
Admin 2004
15
2. DUE PROCESS
- to what extent does the Const. form an addl. scheme of governance
- the notion of reciting an entitlement – and getting an elaborate hearing – not a reality of the practice of law.
 common law country (US) – what gets tested on issues like what kind of hearing & what gets heard – common law questions
 Prof  approaches this section as a means of collecting arguments
 whether you want to fight for or against elaborative due process
 late 1940’s/50’s  old way to look at due process
 Current  the concerns about terrorism & security  issues concerning when and if a trial should occur. The extent
to which nat’l sec. & nat’l def. constitutes a legitimate means to bypass due process
 Finance, Savings & Loans  the extent to which a gov’t entity
 2 Alternatives in Due Process Arguments (will always be a hearing of some type 
the question is when):
1. Hearing Before
2. Hearing After
 Fayhee v. Maloney (U.S. 1947)  1st round of Savings & Loan scandals. The Fed. Gov’t b/c it serves as a guarantor of
assets  a trustee that seized all assets and closed down Long Beach Federal.
 argued a “taking” PLUS
 a damage to reputation is irreparable
 Sup. Ct. looks at question as to whether there should have been a hearing in advance
 delegative authority  whether the admin. agency acting consistent with the authority it is given.
o consistent & clear?
 If outside authority, the would seek a writ to intervene
 The answer here was YES  the agency had the proper authority
 Next Question  can the gov’t take the assets before a hearing is held on the suspicion that the assets are being
wasted?
 Court decided that money was property
 Gov’t Interest  powerful as guarantor; Public Interest  property interest
 Decided that the nature of the gov’ts interest is MORE than the public’s interest  b/c if the money is lost, then
the gov’t has no way to recover it, but the gov’t must write a check. And the gov’t has a public-trust obligation
in confidence in the entire system of loans. The private individual, nothing must do or can do if the money is
gonce

 What is the probability of error? How good is the process
 Although not a hearing, there is a lot of filed info, and the fed. home loan admin. has specific expertise in the field
 The greater the specific expertise of the agency, the more faith the courts have put in the probability will make a
coherent & reasonable decision is really high.
 Ct. says  this is a heavily-regulated institution. The more a line of commerce is regulation  the more it has the highest
level of due process.
 Matthew v. Eldridge  ct. upholds a seizure prior to the hearing, w/ these added factors
 Probable Cause Finding In order to do this, FAA administrator had to make a probable cause finding  gives
confidence
 agency had expertise & some type of internal review
 This is property being seized, but its just property
 Property can be address AFTER the fact; Liberty CANNOT
 Viable Remedy in Tort Given the nature of the seizure, there are obviously remedies in TORT.
 If there is a remedy available in Tort, need to examine closely whether its just an argument or if its real.
 B/C of sovereign immunity, may not really be a remedy
 Court decides that the above issues pale in comparison to public health
In re U.S. v. Chaunecy (U.S. 1950)
 Involves the War Rides Act (during WWII)  gave people in armed forces the ability to a US service person the ability to
marry a person overseas  and to bring home this person and person would become a US citizen
 Facts  Service Man marries woman overseas, essentially, they get to immigration and are stopped b/c the Attorney
General (function thru war dep’t) is making decision case by case  which allowed Atty Gen to refuse to comply w/ War
Rides Act if there is a security threat.
 But, this was statutorily allowed
 Court says the need for nat’l security historically can outweigh the rights of an individual.
 Court says Gov’t Interest (in Nat’l Security) is dominant & the Indiv. Interest is NOT
 Court  affirms the existence of the secret evidence doctrine
Admin 2004
16
 No obligation to disclose the evidence that they have
Congress  what Congress does; Congress can undue. What Congress does, the courts may not undue.
 Private Bill passed which allowed her into the country
 Atty Gen then send thru a bill to limit private bills in the immigration areas (which exists today)
Green v. Mackelroy (1959)
 Security clearance revoked w/o a hearing. And the security clearance was the totality of the job.
 Court believed cast serious doubt on the propriety of the decision b/c heard that the decision was based on his wife’s
opinion/alleged support of Communism
 Stripping security clearance is not easily reperable by money
 Court held in a case like this, with interest like this, hearing must come first.
 As soon as the gov’t basis for a claim b/c factitious, hard to say
 In Gov’t Expertise area, cannot make a technical argument
 Complaintant WINS

5th Amendment  applies to the federal gov’t and provides that no person shall “be deprived of life, liberty, or property,
without due process of the law.”
- To what extent gov’t agencies may provide “process” when they make decision that have a negative impact, but that are not
administered through the courts
- Consider whether a hearing is a good way to limit and structure an agency’s discretionary power over individuals
A. North American Cold Storage (1908) (supplement)
Cs.Atn
IL State Statute a violation of Due Process violation of 14th Amendment
FACTS
Removed the “bad” food w/out a hearing.
ISSUE
Is the state statute in conflict with due process of 14th Amendment?
HELD
NO. The right for the State to seize and destroy food is based upon the right and duty of the
State to protect and guard.
1.
Delegation of Authority?
a. In present case, YES!
2. If authorized, is it constitutional? Does it violate due process?
a. The individual has an interest in property
b. But gov’t interest in public health in welfare is GREATER
c. Public health is a greater interest
3. Probability of Error?
a. Can have a hearing after the fact &
b. Can be made whole by money – they will get their money back
c. The question often becomes REPUTATION  but ct. doesn’t really address it
Not that there is a right to destroy food; but a right to act summarily (before)
Prof  food is such a direct threat to the public.
- important for the police to function quickly and effectively.
Adamamsom v. Milwaukee (1915)  very similar case
- dealing w/ a seizure of Milk
- no process given  milk poured out on premise that it was spoiled
- Supreme Court  don’t need hearing before the fact b/c this can be remedied by money
B. Cafeteria Workers, (1961) (supplement)
Class Notes (2/2/04)
 What did she do to cause her badge to be revoked
 She was careless w/ her badge  she kept losing it!
 She asks for a hearing before her badge is taken  she’s denied a hearing
 Her interest: JOB  wants to keep working & needs a badge to keep working
 Court recharacterizes her interest as LOCATION  We’re not taking her work away from her, just can’t work here.
o Therefore, work location issue!
 Govt Interest: Efficiency of operation in a secured facility.
o Gov’t has a power interest in security on a gov’t based
Admin 2004




17
o Argues that in order to protect that interests, needs power to keep from the facility those who offer a threat
Question: Is the gov’t right in its failure to provide a hearing?
o is the gov’ts interest really compromised?
o she was just inefficient; NOT selling secrets to other side
Court  places due process limits on gov’t action
o If they had acted arbitrarily, then it would not have been ok. Would be one thing if they said they were dimissing her
b/c she was Methodist
o Is it really arbitrary? NO – b/c lost security badges floating around are dangerous.
DISSENT  a vicious attack on the nat’l security rationale
Right/Privilege Case, rather than liberty/property case
o Argument for a hearing in advance ( in a right/privilege case) of taking is LIMITED
FACTS Short-order cook on naval factory, who need security badge to work. Failed security clearance,
which was affirmed. She requested a hearing, which was denied. She was offered employment
elsewhere.
Cs. Actn.
Action against Sec. of Defense, and Lieutenant Commander seeking to compel return of P’s
identification badge so that she may reenter the Gun Factory and resume her former
employment.
Issues
Was the commanding officer of the Gun Factory authorized to deny the P access to the
installation in the way he did?
If authorized, did his action in excluding her operate to deprive her of any right secured to her by
the Constitution?
COURT Did the commanding officer have authority?
o First, the Sup. Ct. stated that it must find explicit authorization from the Congress or the President, authorizing
the procedure which was followed.
o Congress has provided the Sec. of the Navy with powers, but also that the President must approve them
o In this case, President Truman did approve and presidential approval has been recognized by the Supreme Court
with the sanction of the law. “The responsibility of the commanding officer for his command is absolute, except
when, and to the extent, relieved therefrom by competent authority . . .”
- Was the Admiral’s action a violation of 5th Amendment Due Process
o Court  b/c she had no constitutional right in the first place, she was not deprived of a liberty or property by this
action.
o Consideration of what procedures due process may require under any set of circumstances must:
 begin with a determination of the precise nature of the gov’t function involved as well as of the private
interest that has been affected by gov’t action.
 When the private interest is a mere privilege subject to the Exe.’s plenary power, it has been
traditionally held that notice and hearing are not constitutionally req’d.
o Private Interest  Ct states that the only interest denied P was the opp to work at one isolated and specific military
installation.
 PLUS  the gov’t function was not the power to regulate or license (as lawmaker) an entire trade or
profession, BUT to manage the internal operation of an important federal military establishment.
o COURT  therefore, this decision was not arbitrary or discriminatory, but entirely rational and in accord with the
contract.
o Court indicates that they have this power even if they merely thought P was garrulous or careless with her
identification badge.
(Between 60’s & 70’s series of cases)
Series of Cases on Education  students excluded from school
- 5th Circuit  (Dixon v. Alabama) when you throw people out of school w/o a hearing,
o education not a privilege, it’s a right
o its irreplaceable – cannot replace, i.e., 10 days of school
o If irremediable right, must have hearing in advance
C. HEARINGS & WELFARE TERMINATION: DUE PROCESS & MASS JUSTICE
Goldberg v. Kelly, 397 U.S. 254 (1970)., pg. 22
Admin 2004
-
18
Why was Goldberg written, why wasn’t it excepted out by §553(a)(2)
o §553 only applies to rulemakings
o Goldberg, is an adjudication  an order involving an individual case
o order defined (pg. 711)  §551(6)  order  means the whole or a part of the final disposition, whether
affirmative, negative, injunctive, or declaratory in form, or an agency in a matter other than rule making but
including licensing.
Cs. Actn.
State law is a violation of procedural due process of 14th Amendment
FACTS Current System:
 caseworker concludes recipient is no longer eligible, first discusses w/ recipient
 then, recommends termination of aid to unit supervisor
 if unit sup. agrees, sends the recipient a letter stating the reasons & notifying him that w/in 7 days
he may request that a higher official review the record.
 If reviewing official affirms, the aid is stopped immediately and the recipient is informed by
letter.
Appellees challenge the absence of any provisions for the personal appearance or the recipient before the
reviewing official.
 HOWEVER, the last letter does state that a recipient MAY request a post-termination “fair
hearing” where recipient may appear personally and offer oral evidence, etc.
 A recipient whose aid is not restored by a fair hearing, may have judicial review.
ISSUE
Whether a State that terminates public asst. payments to a particular recipient w/o
affording him the opp for an evidentiary hearing prior to termination denies the recipient
procedural due process in violation of the 14th A.
QUESTION
What sort of appeal procedure must be provided when the recipient does not agree with
the welfare dept.’s decision to terminate benefits?
Proc. History
Ps sued in Fed. Dist. Ct. alleging that NY state & city officials terminated their aid w/o
prior notice and hearing, thereby denying them due process.
Dist. Ct. HELD  ONLY a pre-termination evidentiary hearing would satisfy the
constitutional command, thereby rejecting the state’s post-termination fair hearing.
HELD that due process requires an adequate hearing before termination of welfare
benefits, and the fact that there is a later constitutionally fair proceeding does not
alter the result . . .
Narrow Issue
Whether the Due Process Clause requires that the recipient be afforded an evidentiary
hearing BEFORE the termination of benefits.
Sup. Ct. Although some gov’t benefits may be administratively terminated w/o affording the
recipient a pre-termination evidentiary hearing, when welfare is discontinued, ONLY a
pre-termination evidentiary hearing provides the recipient w/ procedural due process.

the termination of aid pending resolution of a controversy over eligibility MAY deprive an eligible
recipient of the very means by which to live while he waits

Appellant argues  that public interest is outweighed by countervailing gov’t interests in conserving fiscal
and administrative resources, and that these interests justify the delay of any evidentiary hearing.

COURT  the pre-termination hearing has one function ONLY: to produce an initial determination of the
validity of the welfare dept.’s grounds for discontinuance of payments in order to protect a recipient
against an erroneous termination of his benefits.

Issues Determined by the Goldberg Court:
 The right to a continued flow of welfare benefits is an interest which is protected by due process.
 The demands of procedural due process are flexible and contextual rather than rigid and noncontextual. Application of that concept requires a balancing of interests in light of the particular
circumstances.
Admin 2004
19

-
-
-
Due Process requires a hearing BEFORE welfare benefits are terminated. A post-termination
hearing is not sufficient.
 A pre-termination hearing must include specified ingredients.
the brief pre-review was done by the caseworker’s supervisor  which establishes an impartial decision-maker problem
Raises a primary constitutional issue: legal issue  Whether the welfare recipient’s outweighs the gov’ts interest???
o Thus, the definition of “livihood” is important
o The means of survival  sustenance  PROPERTY interest & LIBERTY interest
Is there a right to counsel?
o There is a right to have counsel present, but NOT a right to a attorney.
This is the case where the court says the whole issue of privilege is overdone, if there is a liberty or property interest
involved, then can move to the next step.
The hearing itself, w/o an attorney, has been a question/issue since the day the case was decided.
o B/C these hearings do not follow the rules of evidence, argument that average welfare person can handle it.
o Burden of Proof: gov’t – proponent of the order.
 Another reason why court says this is something
Dissent (black)  going to limit benefits b/c the gov’t is going to be more careful about giving out benefits in the first place
o Plus, if the gov’t turns out to be right, unlikely that the gov’t will get the money back.
Try to make a clean sheet of Goldman Hearing’s
o hearing before unbiased tribunal in advance of a
taking
o have notice of gov’ts action;
o get to call witnesses;
o get to see evidence that will be used against you
(confrontation right)
o get to have a decision that is based on the evidence
itself (correlated w/ the evidence)
o means there is a right to a record
o right to a reasoned decision
o right to counsel present.
a.
b.
c.
contested facts are the single most important reason to have a hearing!
if there are not inconsistent facts, then an adjudicatory hearing (witnesses, etc.) is not important.
Fair hearing  important to system; part of Constitution; good way to get at/look at contested facts
Class Notes 2/4/04
2. What is the harm of the fully elaborated Goldberg hearing?
3. Political Ideals  What is the agenda that a majority supports that limits the adjudicatory process? From what political line
does the limit on Goldberg stem – that says fair hearings are a bad thing?
a. If its just the efficieny argument, is an inquisical, is that really efficient.
b. Did Goldberg overdo it?
c. Unbiased tribunal
i. is about separation of functions  to ensure that the decider of the hearing is not an investigator of the
case (which is expensive). Means  more people. A separate group of people in order to have
d. Notice of Proposed Action & Grounds/Basis
i. Gov’t bears the burden of proof
ii. Once the preceeding is initiated, it must go forward
iii. 10 yrs. after Goldberg, the ques. of notice in admin. proceedings came to Sup.Ct.  Adams v. Parker &
Parker v. Block (1984)
1. Adkins  Sup. Ct. said Goldberg (and notice) was not specifying any particular type of notice,
and therefore, the computer card is OK. We did not mean some type of elaborate notice (no
service of process necessary).
e. Opportunity to Present Reasons Why Action Should Not be Taken
i. Cost levels very high
ii. B/C Goldberg did not ensure the presence of counsel, the right to show evidence on your own behalf  is
problematic b/c of the lack of an attorney.
1. The likelihood of one of these people being able to hire an atty is very slim.
2. Not many legal aid lawyers, so many of these cases are handled by caseworkers
3. So, the hearings have turned into a very confusing environment  and
f. Right to Call Witnesses/Right to Know Evidence Against You
Admin 2004
20
g.
h.
Right to have a decision based on the evidence presented
i. important aspect of Goldberg
ii. this a correlation right – decision must correlate w/ the record and forms an obligation on the right of the
gov’t
iii. the standard for judicial review, is substantial evidence.
iv. What is substantial evidence? Somewhere in the record there has to be something substantial to support
the decision. So, it could be only1 document  so long as it communicates credibly and probatively the
underlying basis of a decision.
v. correlation requirement  means that there has been a review of the whole record, where at least some of
the docs must support
vi. NOTE: This req’t does NOT exist in RMing  no requirement that it is supported by sub. evidence – but
does not have to correlate w/ docs presented
vii. Means  must reinvent thru a record, facts that are already known  and therefore, the adjudicatory
process for development of a record, is problematic
Right To A Reasoned Decision
4.
Prof  Today, a Goldberg hearing is not very common (not the norm).
- modified & reduced procedures are the way things work
- 1996 – public assistance law (amendments to Title IV) – moved toward temporary assistance. The Legislation says “This
part (what passes for welfare) shall not be interpreted to entitle any family to assistance under any section in this part”
o Purpose of this Legislation  A lawsuit in which a person claims that public asst is property is BLOCKED by
Congress saying that it is not.
o Saying that public assistance is NOT a property interest. Means that there is no longer a constitutional right to a
hearing.
 Designed to defeat a constitutional arguemt
 Legislation  the state plans should provide an indication of how the state will provide opps for
participates that have been adversely effected to be heard in an administrative process  means that the
right to an after-the-fact hearing. The statute adopts the view that an after-the-fact hearing (provides
money) which is fine for property.
o Property  for the most part, does not come from the Constituion, it comes from common law, statutes, tradition,
etc.
o BAR EXAM  important that if there is not a Constitutional right to a hearing, do not assume that there is not a
right to a fair hearing  the right just comes from something other than the due process clause.
-
Goldberg’s sustaining life
o No longer right/privilege
o the right/privilege way is NOT the way to look at constitutional entitlements
o But, despite the distinction of right/privilege, cts uniformly look at the entitlement and weigh
o The notion of liberty/property comes out of Goldberg and lives on, but is not dominant.
D. INTERESTS PROTECTED BY DUE PROCESS: LIBERTY & PROPERTY
Board of Regents v. Roth, 408 U.S. 564 (1972)., pg. 33
The Different Means by which the Courts have limited the procedural requirements imposed by due process
1. Entirely excludes certain interests from the categories of “liberty” and “property”
2. Describes due process requirements as variable rather than fixed and dependent on the particular context in which they arise.
3. Identify the action in question as generalized, not individualized.
FACTS
Asst. Prof. was not rehired after his one-year teaching contract was up.
Cs. Action
That the Wis. State Statute violated his 14th Amendment rights
Wis. Statute  a state univ. teacher can acquire tenure as a “permanent” employee only
after 4 years of year-to-year employment. State law clearly leaves the decision whether
to rehire a nontenured teacher for another year to the unfettered discretion of university officials.
 violated his freedom of speech (neg. comments about univ. administration)
 no reason for nonretention and lack of opp for hearing violated procedural due process
District Ct.
Granted summary judgment for respondent on procedural issue  ordering the Univ. to
provide him w/ reasons and a hearing.
Ct. of Aps
Affirmed
Admin 2004
ISSUE
21
Whether the respondent had a constitutional right to a statement of reasons and a
hearing on the University’s decision not to rehire him for another year?
NO – he did not!
 Teacher did NOT have a property interest sufficient to require a hearing, etc.
 The terms of employment did not mention an interest in re-employment  they merely provided
when the employment would terminate
Class Notes  2/4/04
- Roth argued that the School didn’t renew the K b/c of his beliefs and things he said. And that he had a real interest in being
able to express himself (1st Amendment) in his writings and in class, and he argued that he at least had a right to see if the
decision was based on his expression. And, he argued that he had a reputation interest. And, the fact that the position was
renewed (just not with him). Argued that the school could do something unlawful and secretive!!!
- So, this case is NOT about being reappointed; its about getting a hearing
- Roth, therefore, is at the heart of the series of cases that consider liberty/property interests.
- Question  was there, by the in the dark decision by the State, a denial of liberty/property interest such that a hearing was
req’d.
- Argument that he was stigmatized from the School’s failure to continue the K?
o School argues that b/c they didn’t say anything, that Roth cannot be stigmatized.
o But Roth argues that it can  that the mere fact of not re-hiring him is the stigmatism. By saying nothing, the State
takes a course that is dangerous  and the State should be compelled to give an explanation
o State’s argument in Response  Cafeteria Workers v. Elroy  He’s not stigmatized. He has the right to work
anywhere else  we didn’t say anything bad about him.
o Roth  counters that getting a job is not the issue, but that they are affirming arbitrariness, by accepting decisions
in the darkness
- Court embraces that something affirmative must happen.
- State had other arguments, as well . . .
o Waiver  you saw the K and agreed to this beforehand. The whole point of the K was so the school could make a
choice.
o But what about a reasoned choice?
- What about his 1st A argument (liberty interest)?
o 1. Dist. Ct. gives it summary judgment  a motion for summary judgment is an invitation to submit information,
affidavits of proof to put in the record. So, the Supreme Ct. says even though the standard is to view the facts in the
light most favorable to the loser, there is nothing in the record to look favorably upon.
o 2. The interest in holding a teaching job is not a speech interest. Not an inherent free speech right. The problem
then, is that even if there is not an inherent free speech right, if the decision was made based on something Roth
said, then he should have a liberty interest
o
- Marshall’s Dissent  anytime something happens with a job, should be considered a property interest. Property that has a
value.
Sup. Ct. HELD
1.
2.
Delegation of Authority to the School?
a. YES – state law clearly leaves the decision whether to rehire a nontenured teacher for another year to the unfettered
discretion of university officials.
Is it Constitutional? Does it violate due process?
a. Dist. Ct.  weighed the interests, concluding that Teacher’s interest in reemployment outweighed the University’s
interest in denying him re-employment summarily.
b. BUT  should look to the nature of the interest at stake  Must look to see if it is a liberty or property interest?
c. NO liberty interest
i. did not seriously damage his standing and associations in his community
ii. did not base nonrenewal on a charge, i.e., dishonesty (if they had, a liberty interest would be invoked)
iii. did not prevent him from seeking employment elsewhere
iv. Court says stretching it too far to suggest that a person is deprived of “liberty” when he simply is not
rehired in one job but remains as free as before to seek another.
d. No Property Interest
i. welfare benefits are property interest (Goldberg).
ii. employment secured under contract or tenure is a property interest
iii. Therefore, to have a property interest in a benefit, a person must have more than an abstract need or
desire for it. Must have more than a unilateral expectation of it – instead, must have a legitimate claim
of entitlement to it.
Admin 2004
22
iv. B/C the contract provision in the present case secured NO interest in re-employment, the teacher did NOT
have a property interest sufficient to require a hearing when the University declined to renew his Contract.
E. Perry v. Sindermann, 408 U.S. 593 (1972). (supplement)
Cs.Actn.
1st Amendment (freedom of speech); 14th Amendment (procedural due process)
History
District Court  granted summary judgment to the University, concluding that the Prof. had no
cause of action against the Univ. b/c his K of employment terminated and the school did not have
a tenure system.
Court of Appeals  reversed, holding (1) that despite the Prof.’s lack of tenure, the nonrenewal
of his K would violate the 14th A (if it was based on his protected speech); and (2) that despite
the Prof.’s lack of tenure, the failure to allow him an opp for a hearing would violate due process
IF the Prof. could demonstrate an expectancy of re-employment
ISSUE
Whether the Professor’s lack of a contractual or tenure right to re-employment, taken alone,
defeats his claim that the nonrenewal of his K violated the 1st & 14th Amendment?
HELD
NO!
But the Supreme Court held that the Prof. must be given an opp to prove the legitimacy
of his claim of entitlement in light of “the policies and practices of the institution.”
COURT
Reasons for which the gov’t may not deny a benefit to a person:
(1) On a basis that it infringes his constitutionally protected interests (especially freedom of speech). Such
interference with constitutional rights is impermissible. Speiser
But, gov’t MAY deny benefit for:
(2) Tax Exemptions
(3) Unemployment Benefits
(4) Public Employment
Supreme Ct.  Therefore, the Prof.’s lack of contract or tenure “right” to re-employment is immaterial to the free
speech claim.
Supreme Court  held that the Dist. Ct.’s grant of summary judgment improper.
In Class
- similar to Roth, but Perry has a lot more information
- Perry knows that he has been criticized for years and that the Administration is unhappy about it.
- Plus, Perry had been teaching for 10 years  in the common law of academia, the time of tenure is 10 years – so, bolsters
his “property right” argument
- However, he was still on a renewable K.
- Case gets argued that there is an expectation of re-employment and at least and arguable claim about speech.
- This case reversed the lower court, and therefore, held that there is enough info here to necessitate a hearing. B/C a
hearing will likely reveal how legitimate his expectation of re-employment.
- SO  the hearing b/comes the vehicle for finding out if there was a liberty/property interest.
- Basis for hearing  due process, plus in review of summary judgment looking at the facts in a light most favorable to Perry.
- Roth  was in the exact same situation  needed a hearing to establish the entitlement of the action.
Due Process
- begins with the nature of the right (is it, or is it not something that is facially a liberty/property interest), not the weight
of the right, that gets you in the door
- The Court in Perry said that the nature of the right is close enough to get you a hearing.
- The Court finds that either the property or liberty claim required ventilation of the summary judgment.
F. Hornsby, 326 F.2d 605 (1964). (supplement)
Cs.Actn.28 U.S.C. § 1343  to redress an alleged deprivation of civil rights; and
28 U.S.C. § 2201 to obtain a declaration of her rights.
FACTS Appellant – Mrs. Hornsby – is an unsuccessful applicant for a license to operate a retail
liquor store in Atlanta. All she did was apply.
ISSUE
Admin 2004
23
HELD
If Ms. Hornsby’s facts are true, then the Board acted arbitrarily.
In Class
- power of executive and of legislature at the state level in play here
- power of exercise of administrative judgment
- Prof  there is a difference bwn a new applicant applying for a right and someone who already has a right that is being
taken away.
- Said that the decision of the license was made by a legislative body.
- State argues that the license is a privilege and that there is no record req’t b/c they are a legislature.
- BUT, licensing is (by definition) an Adjudicatory Process
o Once the ct. decides an adjudicatory process, the case is basically over
o There is not a goal to disempower the legislative process, but goal to
- Protections: (If you are in an adjudicatory procedure)
o you get Goldberg rights
o There has to be in advance, a set of particular standards. Legislature can only delegate the power you have and
you must delegate with clarity (and the legislature has that obligation), otherwise, you can’t possibly have a fair
hearing, b/c you can’t know what against the evidence is being held to.
-
Lesson on where adjudicatory entitlements come from.
Lesson on how legislature should delegate authority
Class Notes 2/9/04
- Idea – For a President to govern, need to be in charge of the agencies – and need to have a ct. system that respects that
- Otherwise, no power to govern at all . . .
- Frequently, the Treasury Dept. & Commerce & CIA  not that there is no presidential control, but that they are on-going
institutions and might make transitions more smooth . . .
- Executive Branch  administrative agencies run under the direct control of an agenda established by the President (federal
level) or the Governor (state level).
o every time the President speaks  talking about executive power & thus administrative law
G. Goss v. Lopez, 419 U.S. 565 (1975). (supplement)
FACTS
For Constitutional Questions, ASK:
- Existing process?
- Challenge to Process?
- How did rights of parties change?
- Was the change significant?
-
After being suspended for “disruptive or disobedient conduct,” none of the students were giving a hearing to determine
the operative facts underlying the suspension, BUT each (together with his/her parents) was offered the opp to attend a
conference subsequent to the effective date of the suspension to discuss the student’s future.
-
District Court  decided the students were denied due process of the law b/c they were suspended w/o a hearing,
holding that the State law was unconstitutional
-
Student Demonstration (why the kids were disciplined)  free speech issue (liberty)
i. speech, vote, travel  liberty interests stated in Constitution
ii. When speech at issue, argument that w/in the protected regime of Roth
iii. 1st Evaluation to Consider Whether a Constitutional Argument
1. Look to See if there is a liberty or property interest involved
a. NATURE of the entitlement, not weight of entitlement
b. Roth  no inherent free speech interest in being a teacher
c. IS there an inherent free speech interest in being a student? In this case  not framed as
liberty, but instead as property
2. Property comes from contracts, statutes (argument sources)
a. There is a statute that says you are supposed to go to school.
b. Did the parties conclude that there was no inherent speech interest???
i. Property claims are definable b/c of statutes, contracts, grants, history, tradition
 arguments for them  but not likely to demand the same protective regime as
liberty interests. Liberty interests are not usually quantifiable in dollars –
Admin 2004
24
3.
property interests are, b/c if its property, the hearing can be held after the
altercation and remedied by money.
ii. Property argument puts the client’s issue at risk
c. Right to free speech (qualified right) – i.e., yell “fire” in a crowded theatre. First
Amendment is not absolute. Speech, in education setting, is absolutely a qualified right
 over the years the court has said that free speech in schools is important, but it must
be weighed against the importance of the educational environment. So, sometimes a
liberty interest doesn’t give as firm footing as a property intersest
d. Property interest has the benefit of clarity  the statute says . . .
e. Nature of the right gets you in the door
f. Weight of the right often comes into the consideration of weighing and balance
Matthews Analysis  If there is an interest, must decide what process is due.
Existing Process
- Ohio law – fairly elaborate process takes place after a suspension
- Under this process, what remedy is present in this after-the-fact procedure?
i. reinstatement
ii. compensation for restoration of the time lost – recognizing that what was lost (temporally); want class
notes  want to restore what was wrongfully taken
iii. It is very hard to remedy a suspension from school!!!!!
- P’s Argument: Deprivation of property right based on statutory right to education.
i. Suspension itself comes summarily  school system makes decision
ii. What is school’s argument for why they must act summarily?
1. the ability to act quickly in an emergency, an ability to maintain order . . .
2. responsible for thousands of students (not just the few)  that is the school’s main responsibility
 therefore, if we have to wait for witnesses, court reporters, etc., would have to wait weeks, and
in that time, we compromise the rights of numerous students just to test the school’s judgment
-
Constitutional Issue in this Case? Were the high school students denied their due process rights by not receiving?
Whether an obligation to maintain a safe & stimulating environment supercedes the speech interests of a small
number of students? Whether the right to on-going education supercedes the right to quality education? Whether a
10-day suspension is de minimis. (b/c if its an inconsequential loss, then doesn’t compromise their overall education
and quality).
i. The nature of the interest  classical property argument. Remember, just b/c property is found, does not
mean there is a right to education of a particular quality (similar to housing cases).
-
What kind of hearing do you get?
i. notice and a rudimentary hearing  a chance to present their side of the issue prior to the suspension!!!!
ii. radically different than a Goldberg hearing
-
How different is the existence of the right of the deprived (after this decision)?
i. Goss hearing is really nothing more (and means nothing more) than the student is given a right to
explain his side of the story to someone other than the direct accusing individual.
ii. Goss Hearing  happens almost summarily
iii. Initial process of Goss Hearing that is some kind of base review of the student’s side of the coin before
action is taken
iv. The cost to the system is minimum
v. No Court Reporters, No Witnesses, No Attorneys  always
Dissent  says that the hearing that will result after Goss will present major disciplinary problems (but has not turned
out to be true)
-
-
Does Goss represent a trend against Goldberg hearings??? YES
-
Main Points of Goss:
1. When a remedy is generally unavailable, an after-the fact hearing is not workable
2. Just b/c you have lib/pro claim that can base an argument, does NOT mean that you will get a
Goldberg hearing (Goldberg was sustenance – life or death, Goss was not)
-
Questions Raised by Goss?
i. Do I have lib/pro interest that allows constitutional argument
Admin 2004
25
ii. If so, what is req’d next?
1. Property Interest in Goss  based on language in statute  What if the statute had said, here’s
the interest, this is how fulfilled, and this is the hearing rights. What’s the value of the state’s
explanation of
2. If the State can declare a property interest – can a state also define the terms of its cessation?
a. Loudermill  says that merely b/c a state has the power to define property rights, does
not mean that it has the unrestricted power to take the right away. Once the property
right is established, then the right has constitutional force. And, if the state’s process
for removing the right is not constitutional, then the state’s process will be set aside!!!
Supreme Court:
- Held: Students facing temporary suspension have interests qualifying for protection of the Due Process Clause, and due
process requires that the student be given
i. oral or written notice of the charges against him; and
ii. if the student denies the charges, an explanation of the evidence the authorities have and an opportunity to
present his side of the story.
-
General Rule: Notice and hearing should precede removal of the student from school.
H. Loudermill, (1985), pg. 42
Loudermill  says that merely b/c a state has the power to define property rights, does not mean that it has the unrestricted power to
take the right away. Once the property right is established, then the right has constitutional force. And, if the state’s process for
removing the right is not constitutional, then the state’s process will be set aside!!!
FACTS
Loudermill worked as a security guard for the Cleveland Bd. of Ed. On his application,
Loudermill stated that he had never been convicted of a felony. When the Bd. discovered
that he had been convicted of grand larceny, it fired him.
Loudermill was not afforded any opportunity to respond to the charges. Under Ohio
Law, civil servants can be terminated only for cause and are entitled to an administrative
hearing following discharge.
At Hearing  a referee recommended reinstatement, but the Commission upheld the
dismissal
District Court  dismissed Loudermill’s action
Ct. of Aps  Reversed
Supreme Ct.
Held
Due Process Clause provides that certain substantive rights – life, liberty, and property –
cannot be deprived except pursuant to constitutionally adequate procedures.
Property cannot be defined by the procedures provided for its deprivation.
The right to due process is conferred by the constitutional guarantee.
In Class
- What mistake did the security guard make?
o Lied on his application  said that he had never been charged with a felony (but he thought it was a misdemeanor)
- Under State Law  public employees have a right to a hearing AFTER . . .
- Initial Hearing; Reviewed by Administrative Board; then  Loudermill moves this case out of the State system  file suit in
federal court (alleging the whole process is unconstitutional)
What is Unconstitutional About this Process?
1. Argue (a) timing issue; (b) learning differences incapable; (c) liberty interest; (d) property interest
2. Property interest in public employment – so w/o there is no due process
a. But keep in mind, its just property, and property can be remedied
3. Liberty Interest  argued that he was denied a speedy hearing  liberty interest in the prompt processing of a claim.
And that the denial of prompt processing creates a loss  claim this under § 1983.
Admin 2004
26
Conclusion property interest is real (determined by statute)
If state defines property interest, does State have the power to define how to take that property interest away?
- NO – State may articulate a process, but once the interest has constitutional weight, the process must follow the due process
of 14th Amenemnd
Which process is due???
- How does the Court decide this????
o Private Interest of Individual
 property interest – not a survival interest
o Gov’t Interest – gov’t has an interest in efficiency
o Risk of Error
o Overall Fairness & Justice – ct. looks
- How does the court decide the process in this case???
o What is so important about this case??? Court says due process provides an initial process against mistake in
decisions. And, its important to decide whether the grounds against the employee are true.
o About the opportunity to be heard – about the value of a hearing
o The baseline opportunity to be heard is fundamental to due process
o Do not get full-blow Goldberg hearing, but it is a check against gov’t misconduct
o Some check is a fundamental check of Constitutional law – and Loudermill is the 1st time (w/ a State right) the
court says once something has constitutional posture, must be some check against mistaken decision-making.
o When there is no basis for determining the adequacy of agency action in something of constitutional import, then
the action is unconstitutional
 4th Amendment requires a magistrate approval – there is at least some initial check!!!
- How solid is Loudermill?
o Its not uniform, but it is basic. Even in cases where ct. says a hearing after-the-fact is sufficient.
I.
Sandin, 1995, pg. 47
Procedure
Appeal from court of appeals decision holding that there was an issue of material fact as
to whether a state prisoner was denied a liberty interest in violation of Due Process.
Brought §1983 – arguing that denied a civil right to due process.
FACTS Conner, a state prison inmate, was serving a sentence of 30 yrs – Life. He was sentenced
to 30 days in solitary confinement for resisting a strip search. Conner was granted a
hearing, but was not allowed to present witnesses.
Ap. Ct.
Held that there was a disputed issue of material fact regarding whether Conner was
deprived of liberty w/o due process b/c he was disciplined for misconduct and the prison regs contained
nondiscretionary standards applicable to misconduct.
ISSUE
Does the DP Clause prohibit states from infringing on the prisoner’s freedom from
restraint by passing regs that have the effect of either impermissibly lengthening the
duration of a prisoner’s sentence, or subjecting a prisoner to an atypical and significant
hardship that deviates from the normal conditions of prison life?
Legal Issue? timing? liberty? property?
Need to know whether there is a residual liberty interest in incarcerated individuals?
Sup. Ct Yes
But, in the present case, the punishment neither subjected Conner to a significant
deprivation of a liberty interest, not did it impermissibly lengthen the duration of his
sentence.
Held
Neither the Hawaii Reg, nor the DP Clause, afforded Conner a protected liberty interest
that would entitle him to the procedural protections
TEST: Prohibits states from infringing on the prisoner’s freedom from restraint by passing regs that have the effect of either:
1. impermissibly lengthening the duration of a prisoner’s sentence, or
2. subjecting a prisoner to an atypical and significant hardship that deviates from the normal conditions of prison life?
Admin 2004
27
In Class
- Is there a liberty interest for prisoners????
o This case is a series of cases . . . .
- Same methodology for making a Constitutional Argument:
- Is Liberty Interest?
- What Process is due if that interest will be affected adversely?
Back in the day, ct. held that states can create liberty (as well as property) interests if it effects things such as the length of the
sentence. BUT  if the state does not substantively affect the prisoner’s rights, then does not invoke constitutional issues.
Substance  became a mechanism for prisoner’s to argue; put federal courts into the business of managing prisons
On what methodology does the Court settle to decide whether there is a liberty interest?
- Consequence of the Punishment must reveal atypical and significant hardship of prison life
Supreme Court HELD  That
- Does NOT hold that a prisoner has no liberty interest . . . but if the adverse action does not affect materially and
substantially that interest, then that which the State is doing doesn’t lessen the liberty interest and therefore is not subject to
Constitutional definition, and is therefore, subject to State Statute.
What did not happen in this case? NO DEPARVATION!!!
1. MUST define the interest
2. MUST define the depravation
-
Loudermill – opportunity to be heard
Sandin—need to establish depravation (and depravation must be constitutional argument)
1978 – Memphis Light & Craft, 436 U.S. 1 – Supreme Ct. had to deal a property interest
o had utilities cut off
o Supreme Ct. decides the Petitioner is right  in this instance, must have a right to a hearing before depravation of
the right
o Importance of a hearing before adverse action where you cannot get a remedy after-the-fact
 NO possible way of restoring warmth

TIMING OF TRIAL-TYPE HEARINGS
- Even if the gov’t action has worked a deprivation of liberty or property – What process is due?
- Goldberg determined that a trial-type hearing must be held BEFORE termination of benefits.
- Matthews  Asks whether trial-type hearings must be provided before termination of benefits to disabled persons under
Title II of SSA.
-
J.
Mathews, 1976, pg. 52
- Important for establishing the process of what to do after a liberty/property interest is identified
- How you decide what process is due after you find prop
- How to organize essay answers
- 1. gov’t interest
- 2. interest in individual
- 3. probability of error
- 4. Basic Fairness & Justice
i. Comes out over the years of cases. When trying to decide by its nature of what process is due, there is an
1. individual experience & public perception
2. credibility of gov’t entity and its capacity to govern is predicated on the public perception that it
proceed fairly, particularly when an adjudicatory action is being taken  especially when
effecting specific individuals
3. Then the fairness of the process is in play, and public judgment is given
4. Post Matthews courts are much more likely to talk about the fairness of the process . . .
- 5. Money  Matthews opened the door to monetizing
i. introduced a cost/benefit analysis that doesn’t have the grandeur of what we think of when we thaink of the
constitution, etc.
ii. A process can be too expensive to implement, and Matthews allows for that outcome
Admin 2004
28
iii. Justice has a cost  Justce has a price
iv. If the cost of the hearings is astronomical (and what is at risk is miniscual) then what is at risk doesn’t
seem worth the cost (the process)
v. Prior to Matthews, it seemed unethical to say that we put a price on hearings . . . but this meaning has
been given to Matthews.
Matthews Factors
SET OF CRITERIA:
1. Government Interest
2. Individual Interest
3. Probability of Error
4. Basic Fairness & Justice
5. Money
Question:
-
-
-
-
When rights are taken away – is more important – than when a person is trying to get rights in the first place
Gov’t bears the burden of proof b/c wants to take the benefit away
The Existing Process was one w/ which the gov’t complied
Does the Fair Hearing (articulated in the statute) have to occur prior to or after the depravation
Not deciding whether there was a liberty/property interest; instead, what process is due????
How is this not like Goldberg
i. public benefit based on a claim disability that was acknowledged as rightly due, and then all the sudden,
decided the right wasn’t due anymore
Basic Idea: Not that these are not property/libery entitlements
Assuming it is an entitlement  how important is it
The nature of the entitlement gets you in to argue the constitutional issue
The weight of the benefit  determines which process is due
Gov’t  this is NOT survival money
i. not public ass’t money, not “do or die” money
ii. So the
Individual Interests  maximizing an employment benefit that the individual claims they are entitled to – not as strong
an interest as welfare (sustenance)
Probability of Error (how likely is it that a hearing before the fact
i. Idea: disability is a situation that involves experts, medical reports, etc. . . . .  not things that require oral
testimony, cross-examination of witnesses
1. Prof  later papers say that this case is classist
ii. Experts can be believed, whereas
iii. Lower levels of society need
The quality of written material is most definitely a risk of error
Popper  thinks that the probability of error should be based on how much information is supplied to the gov’t when they make a
decision.
The gov’t has to make most of its decisions before a hearing.
- so have to begin to think about the information is there
- therefore, in the practice of law, tend to begin providing a lot of information to the gov’t
- WHY SO MUCH PAPER WORK IS DUE  FOR TAX, CRIMINAL,
The notion of scientific data vs. personal disputes  if a credibility issue is in play, the atty must make the decision of whether to fight
for a prior hearing.
- personal disputes are not readily reviewable
- OR  is it a weighing out of known facts
Distinction Between Before & After: A weighing of known facts OR personal disputes that are not readily reviewable.
Gov’t Interest  doesn’t want add’l burden of prior hearings when it has plenty of information
- the effect: if you are a gov’t lawyer, you want to stop the benefits as soon as you get info – b/c if you are right, you will
never get the money back
Admin 2004
29
E-mail Popper for more information about whether this Case was the right thing to do
Procedure
Appeal from an order for an administrative hearing
Issue
Whether the DP Clause requires that prior to the termination of SS disability benefit
payments the recipient be afforded an opp for an evidentiary hearing?
Facts
Eldridge was awarded SS disability benefits in June 1968. In March 1972, Eldridge was
asked to complete a questionnaire about his disability. After reports from doctor, the
State SS Agency mailed a letter stating it had tentatively determined that his disability
had ceased.
The Letter  included a stmt of reasons for the termination and advised Eldridge that he
could request addl. time in which to submit more info pertaining to his condition.
 statement of reasons
 advised Eldridge he could request reasonable time to obtain and submit addl. info
Final Determination  of the termination by the State agency was accepted by the SS
Administration. Eldridge was notified of the termination and advised of his right to seek
reconsideration.
Plaintiff Argued that DP req’d a pretermination evidentiary hearing.
Dist. Ct. Concluded that the administrative procedures abridged Eldridge’s DP right, holding that
an evidentiary type of hearing prior to termination was necessary.
Ap.Ct.
Affirmed
Gov’t
Concedes that disability benefits are a property interest protected by the 5th A. The
Gov’t argues that the existing admin procedures provide all the process that is constitutionally due.
Sup.Ct. Resolution requires analysis of the gov’t and private interests that are affected.
Consider 3 Distinct Factors:
1. Private Interest that will be affected by the Official action;
2. The risk of an erroneous deprivation of such interest thru the procedures used, and the probable value (if any) of addl. or
substitute procedural safeguards; and
3. The Gov’ts interest (including the function involved and the fiscal and admin burdens) that the add. or substitute procedural
req’t would entail.
 Eligibility for disability benefits are NOT based upon financial need
In Class, 2/11/04
- Primaries – ripe for administrative reform
o In our legal system, what is a political party? – what part of the gov’t is that?
o What are the rules for political parties? And, why are they not part of a gov’t system?
o What is the downside of having them function outside of the administrative system?
- Can a federal gov’t w/hold money from states if the states don’t comply w/ federal requirements (established by Congress?
YES  in fact, w/holding funds is a main way of disciplining noncompliance
o big issue in environmental law 
 1. funding/benefits can be cut
 2. licensing can be w/held for projects at the State level
o Has to be part of the delegated authority – in order to enforce it
- Imposition of Federal Authority on States
o Existing process?
o Challenge to Process?
o How did rights of parties change?
o Was the change significant?
K. Ingraham v. Wright, 430 U.S. 651 (1977), pg. 64
Elements of a Hearing – Courts employ the balancing formula of Matthews & Eldridge to determine what process is due as well
Admin 2004
30
as when it is due.
-
-
This case has a prominent position in admin law: If there are available tort remedies that reduces the necessity of
admin process
i. Like in Matthews, the cost of hearings plays a part in whether a hearing takes place
ii. Ingraham  outing of tort  reduces the necessity of a due process-based hearing in advance of adverse
action
Paddling Case  however, the evidence in the case showed that the vast majority of spankings
Case dealing w/ the presence of physical punishment
First Question: Roth/Perry Question
(1) Is any kind of physical beating cruel and unusual if its administered by the public school system?
a. provoked a staggering debate about whether beating is a part of our history
(2) BUT  court said beating is not a problem, its part of our history. Of course, excessive beating is a problem, but that is
not an issue here
FACTS
Students at a FL junior high school were subject to disciplinary paddling, which consisted of paddling the student on
the buttocks with a flat wooden paddle (measuring less than 2-feet long, 3 to 4 inches wide, about ½ inch thick)
ISSUE
Whether the common-law remedies for excessive corporal punishment constitute DP turns on the
analysis of the competing interests at stake.
Is Due Process Implicated?
(1) Delegation of Authority to Public Schools?
a. YES  common law rule that teachers may impose reasonable but not excessive force to discipline a
child.
(2) Is it a Constitutional Issue – Does it violate Due Process?
a. YES  DP Clause  the State cannot hold and physically punish an individual except in accordance
w/ DP of the law.
b. Although there is a de minimis standard w/ which the Constitution is concerned, where school
authorities deliberately decide to punish a child for misconduct by restraining the child and
inflicting appreciable physical pain, the 14th A liberty interests are implicated.
c. Child’s LIBERTY INTEREST in avoiding corporal punishment while in the care of public
school authorities
-
Is this interest the same as the Goss interest?
NO. Court acknowledges that it’s a 14th A liberty interest based on the simple definintion of “liberty”. Liberty means
moving w/in the parameters of your own free-will w/o being beaten.
HOWEVER, JUST B/C THERE IS A LIBERTY INTEREST, IS NOT A FORE-GONE CONCLUSION THAT YOU HAVE TO HAVE A
HEARING BEFORE IT HAPPENS!!!!
What process is due?
Supreme Court indicates that this determination requires analysis of the competing interests at stake, viewed against the background of
history, reason, and the past course of decisions, requiring consideration of 3 Distinct Factors:
1. Private Interest 
- child’s liberty interest in avoiding corporal punishment is subject to historical limitations.
- Although an invasion of personal security gives rise to a right to recover damages, this right is qualified justification  no
recovery against a teacher who gave only moderate correction to a child.
- Therefore, there can be no deprivation of substantive rights as long as disciplinary punishment is w/in the limits of the
common-law privilege.
- BUT  children do have a strong interest in procedural safeguards  that minimize the risk of wrongful punishment and
provide for the resolution of disputed questions of justification.
2. Gov’t Interest 
- maintaining discipline in schools
3. Risk of Error 
- LOW  b/c of the FL state laws, teachers are unlikely to inflict corporal punishment unnecessarily or excessively
when a possible consequence of doing so is the institution of civil or criminal proceedings against them.
- COURT  costs outweigh benefits
With the
Admin 2004
31
o low incidence of abuse
o openness of schools
o common-law safeguards already in place
the risk of error that may result in violation of a schoolchild’s substantive rights is minimal.
4.
Overall Fairness & Justice
- A Constitutional requirement would significantly burden the use of corporal punishment as a disciplinary measure
- Elimination or curtailment is a decision for the legislature – NOT the courts
(1) What is the Existing Process?
a. FL State Laws provide:
b. If the punishment inflicted is later found to have been excessive (not reasonably believed at the time
to be necessary for the child’s discipline or training) the school inflicting it may be held liable in
damages to the child
c. AND, if malice is shown, they may be subject to criminal penalties
(2) What is the Challenge to the Process?
a. That the child’s liberty interest would be better protected if the common-law remedies were
supplemented by administrative safeguards of prior notice & hearing
(3) How did the rights of the students change?
(4) Was the change significant?
HELD
8th Amendment Issue: Supreme Court held that corporal punishment was NOT cruel and unusual punishment in
light of the long history of its use and the common law rule that teachers could impose reasonable but not excessive
force to discipline a child
Due Process Issue  Supreme Court held that DP does NOT require notice & hearing prior to the imposition of
corporal punishment b/c the practice is authorized and limited by the common law.
Why do we having hearings?
- To determine the accuracy of facts (disputed facts)
- If you have all of the information you need, then do not need a hearing
Fairness Interests of the Parties (if no uncontested facts) then are not satisified by a hearing.
-
This case  merely b/c a liberty interest exists does NOT mean that a hearing must exist, b/c the hearing will most likely
explore the presence or the absence of misconduct?
Did the student do what he/she is accused of doing – could have a hearing about that
BUT  The question is about the severity of the punishment
What would be the poinkt of a hearing afterwards if it is determined that the punishment was excessive????? There is no
remedy then – OR the remedy is in TORT
MUST Evaluate
- govt BROAD, time, money, order in school’
- right of individual  do not include not being spanked, only include not being spanked excessively
- prob of error  doesn’t matter to an extent b/c if this was a mistake, if the punishment was excessive, then the full spectrum
of remedies available in tort and are not necessary here
- fairness 
- money
Dischenvy v. Winebago Co  Court syas that not all common-law duties are constitutionalized right.
DISSENT
Arguing that traditional tort remedies do nothing to prevent punishment based on mistaken facts (so long as the
punishment is reasonable from the disciplinarian’s point of view).
Additionally – the lawsuit occurs AFTER the punishment has been finally imposed  the infliction of physical
pain cannot be undone.
There is every reason (like Goss) to require an informal “give-and-take” between student and disciplinarian as a “meaningful hedge”
against the erroneous and irreparable injury.
Admin 2004
32
3. INVESTIGATION
- Deals with the 4th Amendment
o the politicization of the 4th A dialogue is not in sync with the practice of criminal law
o often, 4th A errors often screw up cases so that they are thrown out
- Administrative Law
o Overview of a sense of the civil regime of search & seizure
o The business of civil search is more important than criminal search  is judged by how often lawyers get involved.
- E-mail Popper for UPDATE
o Warrantless Searches are constitutional in the civil domain as long as they are reasonable
o Unreasonable searches have always (and remain) unconstitutional
o Question: What’s reasonable?????
o Are there exceptions to the warrant requirement???
- Historic Exceptions to Warrant Req’t
o Consent
 Unlike criminal, will not immediately result in an arrest  in civil cases, is possible to say NO
o Emergency
 For civil searches, involves national emergency, poisoned food
o Statutory Searches
 border search
 the statute can obviate the necessity of the warrant b/c the Constitution allows that.
o Financial Interests  gov’t insurance of money and trust responsiblity
o Plain View
o Pervasively Regulated Industries
 If an industry is pervasively regulated, than any privacy they had, they lose as a result of the regulatory
scheme
 If the regulation itself produces an expectation of privacy, then the exception doesn’t exist
 Most regulatory schemes establishes that any expectation of privacy does not
 Requirements:
a. Must be a genuinely regulated industry
b. Has to be some gov’t interest in the field to justify warrantless entry
i. what gets argued most  what is the gov’t interest
Question: When does a civil search b/c a criminal investigation? When an inspector finds evidence of arson.
Basic Rule: If the basic purpose of the search is civil, as long as a good-faith inquiry, then the transition to a criminal search is
almost seamless
A. Camera v. Municipal Ct. of San Francisco, 387 U.S. 523 (1967). (supplement)
FACTS Public Health Inspector entered an apt. bldg to make an annual routine inspection for
possible violations of the city’s Housing Code. The inspector confronted the appellant and demanded to
inspect his space. Appellant refused b/c the Inspector lacked a search warrant.
2.
3.
4.
Delegation of Authority to Search?
i. YES – allowed by the city’s municipal code -- § 503 – Right to Enter Bldg.
Constitutional Issue?
i. YES – 4th Amendment -- a search of private property w/o proper consent is “unreasonable” unless it has been
authorized by a valid search warrant.
ii. Because private interest to dwell in reasonable security and freedom from surveillance, the right to search MUST be
decided by a judicial officer (NOT a policeman or gov’t enforcement agent).
iii. COURT  it is ridiculous to say that an individual and private property are only protected by the 4th Amendment
when the individual is suspected of criminal behavior.
What is the Existing Process?
i. When the Inspector demands entry, the occupant has NO way of knowing whether enforcement of the municipal code
involved requires inspection of his premises, no way of knowing the lawful limits of the inspector’s power to
search,or whether the inspector himself is acting under proper authorization.
ii. A resident may ONLY challenge the Inspector’s decision to search by refusing entry and risking criminal
Admin 2004
5.
6.
7.
HELD
33
conviction
iii. And, even if the occupant refuses entry, he may never learn any more about the reason for the inspection than that the
law generally allow housing inspectors to gain entry.
iv. Practical Effect of this System: leaves the occupant subject to the discretion of the official in the field.
What is the Challenge to the Process?
i. That it violates the 4th Amendment by not requiring a warrant to search.
What Process is Due? Search Warrant
i. Private Interest  right to privacy
ii. Gov’t Interest  in the public interest to protect the health and safety of the public
iii. Probability of Error  HIGH b/c the occupant has no way to challenge the inspection, other than refusal and thus
criminal conviction
iv. Overall Fairness & Justice
What Process is Due? Probable Cause
i. Private Interest  privacy
ii. Gov’t Interest  to prevent even the unintentional development of conditions which are hazardous to public health
and safety
1. Govt’s interest is GREAT – the maintenance of community health
2. Reasonableness of Inspections:
a. long history of judicial and public acceptance
b. public interest demands that all dangerous conditions be prevented or abated
c. b/c inspections are neither personal nor aimed at discovery of evidence, they involve limited
invasion of the citizen’s privacy.
iii. Probability of Error
Supreme Court held that administrative searches of the kind at issue here are significant
intrusions upon the interests protected by the 4th Amendment.
Camara v. Municipal Ct of the City and County of San Francisco (US 1967) (supplement)
 Inspector was checking whether ground floor was being used as a residence, which was against building code of
building. Under state housing code, searches allowed at any time and if occupant refused they were subject to
criminal action.
 Prof's notes: what is the state's power to define constitutional interest? State PROBABLY has the power to
define a constitutional interest.
 (cf. to due process analysis in which state has the power to define a property interest, Laudermill—
however, states don't have uncontestable power to define the way in which property is taken away b/c
constitution ONLY concerns itself w/ deprivation of property, not w/ establishing property). Must satisfy
constitutional methodology to do so.
 Interests of the state are clear in this case—public safety, public health, urban blight, decay, need to cut
back on practices of slum landlords. Question becomes—why did ct decide this case the way it did? Is
the passage of the statute sufficient to notify parties that their privacy interests are compromised? Why
is statute insufficient given this notice and strong govt interests? If you're looking at the ind'l, there are
some risks that go beyond civil remedy to criminal liability, so this isn't really about a civil search, it's
about a civil search that's predicate to a criminal investigation which requires probable cause. If civil
search, then reasonable basis is all that's needed, so judge will readily give it—however, this nominal
requirement of presentation to judge to get warrant is worth it and required.
o State argues that this process is stupid, b/c they'll just get warrants to cover large areas, so
warrants create a problem that compromises privacy. Argument that there's a constitutionally
sufficient, but substantively meaningless that ultimately doesn't help people but harms them
instead by giving govt stronger power.
o Response: searches are intrusive, often a predicate for criminal investigation, warrants are not
cumberson and even if issued in a summary manner at least they're issued, we don't make an
assumption of bad faith—at least if rubber stamp the issuer will ask why they're needed which is
a req't that protects people, which is all that was at stake here.
o This case changed the way that civil searches took place. Also meant that PC and emergency
not needed to get a civil search warrant—instead such warrants can be achieved easily, but the
point is that they NEED TO GET THEM b/c WARRANTS PROVIDE A BASELINE
PROTECTION, and are worth it.
o Routine, periodic inspections of all areas can be a sufficient description of a place to be
searched.
Admin 2004
34
o
-
This case is a critical piece of our constitutional history re: civil searches.
Companion case, See v Seattle, held that commercial facilities have privacy interests, and also governed by 4th amend
analysis.
o Leads to question of what is the privacy interest of a commercial facility.
o When are warrants needed for commercial facilities?
o What are the privacy interests involved in commercial facilities?
B. Marshalls v. Barlow’s Industries, 436 U.S. 307 (1978) (supplement)
Marshall v. Barlow's Inc. (US 1978) (supplement)

Arguments: Govt argued they had rt to enter b/c OSHA said they could search any facility w/in OSHA's jurisdiction per
section 8(a). And that if entry is refused, then they have the rt to go to district ct to compel admittance. This hearing is
about whether the statute authorized the search, and if so is the proposed search being carried out pursuant to statute's
requirements, and if so district ct could issue an order compelling the search (an agency can't grant an order for forcible
entry, b/c that requires the power of the ct which agencies don't have—this boils down to a delegation question). Thus, this
hearing is NOT about whether a search is substantively warranted under the facts. Not about whether there is a reasonable
basis for the search.
 * Employer challenged the SEARCH SCHEME itself since they can't challenge whether search is allowed.
Whether warrantless searches in this setting are permissible or not?
 * Arguments that FAVOR a warrantless search:
o Want to surprise the business owner
o Govt interest in public safety
o Necessity of inspection outweighs the privacy interests of the business owner, whose interests are limited
as a business since it's not an ind'l.
 Arguments followed pattern from due process cases!
 Govt argues that 4th amend only prohibits Unreasonable searches & seizures, and search is reasonable in this
case.
 Prof's notes:
 Why does govt lose in this case given its strong case? OSHA is NOT pervasive regulation, despite the govt's
argument. If OSHA is pervasive regulation, that everything and everyone would be pervasively regulated—govt's
position is too broad in this case b/c OSHA doesn't really regulate anything, it's merely a gen'lly imposed
regulation, not about a genuinely regulated program (OSHA doesn't regulate a particular industry).
 At a minimum there must be possibility to challenge warrant and require warrant to institute some sort of
protections.
 Govt hated this case b/c govt has a lot of fields like OSHA, thereby limiting govts power to search (compare to
other broad regulatory programs like OSHA). Raises question, when is regulation specific enough to not require a
warrant?
-
FACTS  Inspector asked to search private area of business. Business mgr asked for search warrant and refused the search
when the inspector did not have one. The Dt.Ct. granted an order compelling the search, but the Company sought injunctive
relief against the warrantless search.
-
Procedural History: Dist Ct. held that the 4th Amendment req’d a warrant for the type of search involved here and that the
stautory authorization for warrantless inspection was unconstitutional. (based on Camera).
-
Gov’t Argues: that warrantless inspections to enforce OSHA are reasonable w/in the 4th A and relies on the state statute,
which authorizes inspection of business premises w/o a warrant and which the Sec. urges represents a congressional
construction of the 4th A.
-
Supreme Court  Warrant Clause of the 4th A protects commercial bldgs (as well as private homes).
1.
2.
3.
Delegation of Authority to Search?  YES – OSHA empowers agents of Secretary of Labor to search the work area of any
employment facility w/in the Act’s jxd.
a. Purpose of the Act: to inspect for safety hazards and violations of OSHA regs
b. NO search warrant or other process is expressly req’d under the Act.
Constitutional Issue? YES. Warrantless Search violates 4th Amendment privacy interest
What Process is Due?
a. Private Interest? To safeguard the privacy & security of individuals against arbitrary invasions by gov’t officials
b. Gov’t Interest  protection from safety hazards and OSHA violations
Admin 2004
35
c.
d.
HELD
i. Warrantless searches afford the opportunity to inspect w/out prior notice and hence to preserve the
advantages of surprise.
Probability of Error?
i. High – warrantless searches gives almost unbridled discretion upon executive and administrative officers as
to when and whom to search
Overall Fairness  Court says that requiring warrants to inspect will NOT impose serious burdens on the inspection
system or the courts.
A warrant will provide assurances from a neutral officer that the inspection is reasonable under
the Constitution, is authorized by statute, and is pursuant to an administrative plan containing specific neutral
criteria.
C. Donovan v. Dewey, 452 U.S. 594 (1980) (supplement)
 Arguments:
 That argument for public health is VERY specifically discussed in statute.
 Govt addresses the pervasively regulated interest, public health is specific in statute, and a long history of public
acceptance of this (i.e. you agree to go into mine business, you know this will happen b/c it's happened for as long
as we've had mines). Becomes a condition of doing business in mines.
 * If questions answer in affirmative, then you're under the Donovan, rather than Marshall analysis framework.
 Prof's notes: this case applies to most cases that are available today. Including application to drug testign!!! -->
More specific guidelines, giving technical notice of a specific regulated interest, none of which applied to the OSHA
search from Marshall.
There was a series of cases in 80s about aerial photography, whether it was somehow not contemplated by drafters of 4th amend.
- anything based on waiver, argument is that it's consensual
- for gen'l overflight, it's plain view
- issue boils down to what is consent, and when does it happen? Dewey: consent can come from public expectation plus
specific regulation??
- What is genuine consent? Voluntary, non-coerced, not based on deception.
- In public assistance area, the question of consent gets litigated over and over again, see e.g. Wyman v. James.
-
FACTS  A federal mine inspector attempted to inspect quarries owned by Waukesha Lime & Stone Co. (in order to
determine whether all 25 safety and health violations uncovered during a prior inspection had been corrected.
o After an hour, the president ended the search (unless inspector obtained a search warrant).
o The Inspector issued a citation for the inspection termination and subsequently filed suit seeking to enjoin them
from refusing to permit warrantless searches of the facility
-
Procedural History  Dist. Ct. granted summary judgment in favor of the Company on the ground that the 4th A prohibited
the warrantless searches.
-
ISSUE  Does the FMSHA (which authorizes warrantless searches) violate the 4th Amendment?
-
HELD  Warrantless inspections of the MSHA do NOT offend the 4th Amendment
o Gov’t Interest  improving the health and safety conditions in the Nation’s underground and surface mines
o Warrant req’t might impede the specific enforcement needs of the ACT
1.
Delegated Authority?  YES -- §103(a) of Federal Mine Safety & Health Act – authorizes warrantless inspections of
underground and surface mines
a. Requires the Sec. of Labor to develop detailed mandatory health & safety standards to govern the operation of the
Nation’s mines
b. Purpose: to insure compliance with the standards and to make follow-up inspections to determine whether
previously discovered violations have been corrected
c. Grants Mine Inspectors a right of entry and indicates that no advance notice is necessary
d. If Inspection is Refused  Secretary is authorized to institute a civil action to obtain injunctive or other
appropriate relief.
2. Constitutional Issue?
D. Wyman v. James, U.S. 1971 (supplement)
Wyman v. James, (US 1971) (supplement)
Admin 2004
36

Practice had been that to determine who was sleeping w/ whom was part of implementing AFDA system, b/c if
unmarried and sleeping together, govt wanted to calculate both incomes in determining welfare benefits. See King
v. Smith which knocked out that system, on the strength of Wyman v. James.
 Arguments: P argues that her home is her private space, NOT a commercial facility, so she doesn't waive her interest in
privacy simply b/c she receives public benefits—that's crushingly unconstitutional to make her receipt of public benefits
contingent on violation of her constitutional rights.
 Prof's notes:
 We must understand the NATURE OF CONSENT as set forth in this case. The opinion is 'really striking.' Case
blows off 4th amend analysis by saying that home visits aren't searches for 4th amend purposes, then decides the
case as if it's arguing in the alternative, holding that if they are searches, they're REASONABLE searches b/c it's a
moderating function based on the needs of the statute and are unique based on the beneficial character of the
welfare benefits.
o But if you don't like those 2 arguments, then there's more: this is really about the children so it's the
children's privacy interests that are involved in AFDC benefits, and the children aren't complaining
here—not parents' interests, but children's interests involved. Also, gov'ts right to protect its property,
i.e. welfare benefit (govt's fiduciary responsibility to protect its own money).
o Look at visits as part of caseworkers job- necessary.
o Methodology is clear in this case. This isn't about forcible entry—not midnight searches to see who is
sleeping w/ whom. Gen'ly speaking it's a good idea b/c these happens 10s of 1000s of times throughout
the US in all cities, so what would be the point in getting warrants?
o Ct classifies this as "in-home interviews" which aren't searches.
o Prof points out that you should wonder why the Ct did this. ANSWER: CONSENT SEARCHES ARE A
PART OF GOVT INQUIRY, SEPARATE FROM OTHER CLASSES OF SEARCHES. They're so
basic to what govt does, that they're needed. If you don't draw the line here, then where do you draw it?
Will you need warrants to secure tax info, etc.

Practice had been that to determine who was sleeping w/ whom was part of implementing AFDA system, b/c if
unmarried and sleeping together, govt wanted to calculate both incomes in determining welfare benefits. See King
v. Smith which knocked out that system, on the strength of Wyman v. James.
4. Adjudication
Administrative Agencies are not bound by the hearsay rule or any other of the conventional rules of evidence, but only by the
looser standard of due process of law
- Goldberg Hearing  the format for adjudication – exceptional for a hearing, not exceptional for adjudication.
o not bound by hearsay, BUT
o due process does apply  even though an after-the-fact hearing, and even though the classical constructs of
admissibility/inadmissabiltiy don’t apply, they apply generally in the terms of fairness.
o When litigating an administrative case, the attorneys can establish the level of procision to bring to adjudicative
hearing, and the more process included, the better off you will be.
o Often, the quality of lawyering is based on the degree that attorneys realize that they are in charge.
 i.e., new commander on a military base  they are not given command, they must take command  An
attorney must TAKE the opportunity; take charge; take control
 Courts don’t set aside adjudications if there is substantial evidence (even if the court doesn’t like the
decision). An appeal is a review of the record.
 The time to represent the client is during the hearing and there is MUCH opportunity during a hearing.
o The more formal the hearing, the better the outcome  simply b/c the more informal, the more contaiminated the
proceeding can seem
o Daubert  process by which judges screen expert witnesses
 Posner  Daubert does NOT apply to administrative agencies, BUT the spirit of Daubert DOES APPLY
Basics of Adjudication
- The world of admin adjudication dates back to founding of interstate commerce commission (end of 19th Century) 
established to deal w/ defacto monopoly railroads  to regulate w/ destroying competition  to facilitate real growth and to
provide incentives to grow the industry
o done thru licensing of the rail industry
o licensing is inherently adjudicatory
o 100-year history of hearings
o i.e., similar to the cable industry today
- The hearings were a presentation by staff of agency (giving its position to grant/deny a license); the RR (applicant) that
wants the authority; and the competitior that either want to keep the license from being issued (don’t want to face the addl.
Admin 2004
-
-
37
growth of the competitor); interveners (farm groups, interest groups  that have a powerful interest in grant/denial of the
license).
NOT plaintiff v. defendant (not one on one). 5 or 6 different parties presenting their interests in a setting. One clear on the
surface goal, but under the surface, multiple agenda items  a complicated process.
o Who should cross examine?
o How can this work efficiently?
o If not a formal model, then what kind of record do you get?
About ½ a century, a mirror image of “regular” court hearings
Proof  preponderance of the evidence in admin adjudication
o But, using the “regular” courtroom style, how can anyone ever decide on the preponderance of the evidence (each
group has gobs of evidence).
o Basic Question: Can’t make the judgments based on preponderant standards  must be something more/something
different.
o New Deal  FDR administration  the way to get out of the depression (reignite economy) is thru regulatory
programs, price control.
o Question: How can the regulation be done fairly, and can they continue to use the wobbly model???? NO –
 When are you done?
 When is there enough evidence to support a decision?
 One reasona APA was years in making
1. Some idea what formal rulemaking would look like, some idea what formal look
2. Formal Adjudication §554-557  trial-like adjudication (Goldberg).
3. Informal Adjudication  everything else
i. agency decision
ii. agency sending out a letter
iii. every level up to a hearing
4. APA Act Problems (2 main problems)
i. What is the appropriate standard for reviewing informal adjudication?
1. Nobody agreed – no agreement
2. No part of the APA that deals with informal adjudication
ii. What is the evidentiary threshold req’d to make the decision that the action of the agency should be
upheld?
1. not clear & convincing
2. can’t be what the agency likes
3. (battle over language that goes on for years). 1944 – NRLV v. Hurst, 322 U.S. 111  deals w/
whether “news boys” are employees (can bargain with others) or are independent contractors
(cannot engage in collective bargaining).
a. questions about who defines statutory terms????
b. Deeper Problem: Question of when looking at a record w/ lots of factual material
(coming out of adjudication)
c. NOTE  the adjudicatory process creates RULES (so attys must be careful)  will
effect how people act in the future.
d. Adjudication  creates unofficial “rules”(even though no official rule is produced) that
others will follow. Adjudicatory pronouncements effect the state of law itself, so the
process by which you review is important
e. HURST  Court said that the decision was going to be acceptable if it had “warrant in
the record” and had a “reasonable basis in the law”
i. warrant in the record  factual sufficiency
ii. reasonable basis in the law  legal sufficiency
iii. Judiciary committee thought this was too broad, and wanted to be more explicit
(more specific about data, etc.)  evolution of the term substantial evidence &
substantial means the evidence itself has substantiality (not a preponderance of
the evidence).
1. substantiality must be substantive  it’s the quality of the evidence
(not the amount) that counts
 1946  Committee adds “reliable” & “probative value”
 reliable 
 probative 
 Both of above are
Tri-Part Test
Admin 2004
38



-
substantial
reliable
probative
Competency is NOT included in the test 
Agencies follow the relaxed rules of evidence  the reason hearsay is admissible is b/c competency is NOT a requirement
Problem: What if the entire record is based on hearsay???? Can this be reliable and probative???
Historically
- Ex Parte Communications  In eliminating the competency req’t, also a debate about information  and ex parte
information (meaning between some parties, but not all in the litigation procees, for example, one atty and a judge).
o Core ex parte problems:
 bribery/fraud  obviously inappropriate, bribery is a felony
 informational  passing comment in elevator/hallway. In most agencies, the ALJ work at the same place
as the staff, and the discussions are inevitable.
o If the goal is to inform administrators, shouldn’t information from any source be admissible and appropriate. If you
are going to allow hearsay evidence, why disallow ex parte evidence?
o What’s wrong with ex parte communications?
o In RULEMAKING no explicit prohibition against base information forms of ex parte communication.
o ADJUDICATION  balancing due process w/ informational needs on the other  so ex parte communications are
tricky.
 non-formal  courts are permissive when an appellate challenge is that there was an ex parte
communication
 formal adjudication 
- Ex Parte Prohibited in the following instances:
o where it creates a secret, secondary record (and the public has been dupped, the “real” record is a sham).
o OR, if it frustrates judicial review b/c the real record/real information that the agency uses in making its decision
comes in ex parte.
A. Overton Park, 401 U.S. 402 (1971) (supplement)
- question of looking at adjudicatory process itself at basic level
- rasised questions about judicial review & record  what kind of record is sufficient to support a decision.
-
Underlying Hearing  adjudicatory process  NOT about developing standards for the future
o standard that requires before they grant a permit for the highway, the Dep’t had to evaluate feasible alternatives
Public Policy Implications  use of public land, use of park land
o BUT, for citizens of Overton Park, NOT a public policy issue, very real
-
What suggests the policy options for the use of public land for these projects? The concern underlying these projects?
o Using public land for highways keeps the cost down, no eminent domain! Saves money.
o Gov’t Argues: they want to do this b/c it is cost-effective
-
Process used in this case: Debated in front of the Memphis City Council  dominated by Memphis City of Commerce
o Secretary agreed w/ local officials that the highway should be built through the park
o What’s wrong with this heaing? City Councils are not constructed as adjudicatory forums (no one protecting the
side of the park interests).
o Statute involved said ONLY that there should be a public hearing, but did not specify the type of hearing.
NOTE  its expensive to build roads thru cities that are already established  which is why I95 does not go thru DC
Supreme Court said that the statute was taking the park land out of the mix (even though its an important issue)
o Policy Choice made to use the park land was corrupt – BUT even though court says this. The job of judicial review
is NOT to review the decision-making process. The wisdom judgment is the judgment of Congress, not the courts.
 Supreme Court here, violates judicial review  b/c talking about the policy decicion even though the
statute doesn’t state that they cannot build highways through public lands.
 NOT supposed to be probing the mind of the administrator
o The Court does NOT have a record for judicial review. The only thing that is there is the Secretary stating that
they agreed with the presentations.
o B/C there is NOT a record, why doesn’t that produce a trial de novo???
 trial de novo  start over in court (bypass agency). That option was denied here.
 The basis for a trial de novo is limited. A reviewing court will take a case away from an agency if:
-
Admin 2004
39

o
o
o
There is constitutional fact question. For example, is the island in the middle of the river federal
or state property?
 Agency is seeking to impose a remedy and there has NOT been a previous adjudicatory
proceeding. (Sanctions w/out underlying fact finding)
 You can show a “new lawsuit”  Based on what the agency has done, a harm has been created
and the harm is judiciable and a cause of action that would conform w/ the req’ts of §1331 (can
only be litigated in federal court)
 The statute states that if the agency fails to conform to requirements, then trial de novo
Stuck with basic adjudication (permit process) to which there is NO RECORD for judicial review. So, the matter
has to go back to the agency
The absence of any findings in this case is fatal.
Why not decide that judicial review is not allowed when the agency ???
 2 exceptions to judicial review:
 if statute precludes
 agency action committed to agency decision by law
When there is law to apply to fact, will not win the argument that the agency decision is NOT reviewable
- In the present case, the agency was req’d to look at other options, park options, etc.
- So long as there is law to apply to fact, then a court must be able to review
Court says cannot affirm the decision b/c nothing to review  case goes back to the agency (back to district court for supplemental
finding  to have court look thru record to see if any info had been missed).
- follow up court decision  could not say that there were no problem alternatives.
- TN sued the federal gov’t  arguing that although they hadn’t argued alternatives, that was not their problem, they needed a
highway . . .
In adjudicatory world, a public hearing is a REAL hearing (even if informal) and a hearing does NOT consist of a one-sided person
saying I agree with them.
-
info about de novo review
Supreme Court’s contribution to the hard-look doctrine  how hard should they look??? Hard enough to penetrate the
decision, hard enough to understand what the agency did.
o need to understand the substance of what the agency is doing – hard look
o like Chevron is a case to discipline courts to be respectful the discretion exercise
o Problem with Hard Look  Federal judge gets complicated case, spend lots of time educating self, but then the
decision will be biased (b/c then how can they step back to look only at the substantiality upon which the decision
was made). Hard to not invade the wisdom/judgment of the agency/record.
Class Notes—2/23/04
Adjudication in Administrative Practice
- attorneys have the power to change the way that a hearing works
- hard look doctrine  how courts assess what an agency has done in the admin process (on its face) – how hard a look
should judges take at the adjudicatory process, at the outcome? How much should they impose their newly acquired
judgment
o If a hard look, and judge has become fully informed  can the judge extract bias/opinions formed during studying
the record, and then make a base-line judgment about whether the evidence is substantial and reliable in support of
the decision
o Difficult for judges to do  not a debate that judges are supposed to take seriously the responsibility of judicial
review.
o Posner Case  most current case on judicial review.
- Dilemma is the separation of powers – conflict bwn legislature, judiciary, and executive
o produced different schools of thought:
 1. Judge Basilon  process-based review
 focus had to be on process – the way in which an agency decided; how open, how clear
 scruitiny of methodology; the way adjudication functions, the best way to ensure that agency
had functioned appropriately and that the decision was support
 saying need to trust the legal system; need to have a reliable process that when inspected comes
out with a respected
 Getting into the substance of what an agency decision means getting into the policy of the agency
 and therefore the substantive assessment is not the appropriate place to go when reviewing
Admin 2004
-
-
40
decision
 Look at record, if there is legal support, then don
 2. Judge Leventhal  substance-based review
 judges have been reviewing in substance (science, med. tech) for the last century – judicial
review involves this
 have to look at substance, have to look at the nature of the decision, and if it holds up to scrutiny,
have to back out
 Hard Look is part of appellate review. Court of Appeals (in judicial review) must also look at the
facts . . . .
o Prof  debate is unresolved and judges in each circuit have different views, and attorneys do not control which
judge will pass a decision down
o Different schools of thought exist – so can use each new decision as a way to shape admin law
Q: The role of courts and necessity of hearing itself?
Supporters of judicial restraint  favored process-based review
Predicate  that there be some kind of hearing at all  debate w/in hard look. What if there is no hearing at all – decision
of agency – how does judicial review work then? What is the reviewable content?
o Clinton  certain matters that had to be decided summarily – huge battles around this
o Gov’t Contracts 
What review required to do?
What kind of hearing has to take place?
How can you take a hard look if there is nothing at which to look?
After Overton Park, would think that Sup.Ct. would have come down differently.
B. ***Lujan v. G & G Fire Sprinklers, Asimov Supplement, p. 3
- Harm alleged: State withheld $135,000 in payments b/c they alleged the contractors violated the wage statute (not paying
employees correctly).
o Contractor argued that not gov’ts decision how they spend the money  they had a contract for the right to the
money.
- State says no BEFORE any adjudicatory process
- Contractor complains about lack of money & that the process is flawed b/c there is no process
o When seek judicial review of a taking – would review the hearing . . . but no hearing or process to review (just a
notice stating that they won’t give the money)
- Assuming a property interest, should there have been a prior hearing?
o No hearing  after the fact hearings are fine for property, and the claim in this interest is at best a property
depravation
o Problem w/ this strategy is that there is no obvious hearing after-the-fact  and becomes clear that the State is not
inclined to do anything at all Why is it ok that there is no hearing?
 Court characterizes it as a contract dispute  there is a process, state contract damage litigation  state
has a process for civil suits (don’t bother us for takings problems)  Court says there is a ready rememdy
 Contractor argues that this is governmental action and the case will take years . . . . . . .
o Sup. Ct. says of timing argument  it just takes some time . . . lawsuits take time . . . .
o Ingraham  (similar to Ingraham) ct. says that a hearing can provide a remedy anyway, so should go to court
- Bottom line  adjudicatory hearings not a consequence of statutory demand are NOT a matter of right.
o Example of a process where the parties made the assumption that a hearing would be a matter of right (b/c there
was property) . . .
- What is not in the opinion  the lawyers did NOT treat this case as the issue of whether they got a hearing at all (they
assumed they would get a hearing). A matter of how you conceptualize the process. How would you argue that a hearing
was something client should have had?
o Willingham – to run to court when there is an existing process, is not a good idea . . .
o In state agency, could have gone to state court to fight this . . . and the state court MIGHT be receptive
o BUT  what would you argue in order to get an administrative hearing?
 Go to statute, look at delegation, similar statutes, etc. (in this case, the statute is ambiguous)
 Look at past practice  precedent, history,
 Something more than a property interest is at risk  the right to contract!!!!
 w/in the prenumbral common-law interest of propert
 Can’t have Ks w/ state that are not followed through – argue due process problem – what process is due?
 Would argue Matthews  not just after-the-fact property  important b/c credibility of doing business
with state
 Fundamental Reason for a hearing/trial for anything? There are facts to be found. In this case, there is a
dispute as to the nature of the employees and to which category they fit into best. This is the place to
Admin 2004
41
o
o
o
o
establish the record.
Arguing Matthews.
Argue Gov’ts Interest  would characterize the gov’ts interest as not being consistent with the process. Govt does
not want to have to have an admin process each time there is a disagreement; instead go to court. ARGUMENT
should be, no you wouldn’t; shouldn’t go to court b/c so formal, time-consuming
Argue efficiency of agency action  agencies can act more quickly and efficiently than courts
Argue about admin authoritarianism  not good that the gov’t can fine someone $135,000 w/o a hearing at all 
gov’t takes on the image of a powerful and not accountable entity.
C. Richardson v. Perales (supplement)
- Assuming a hearing is held, where a record will be produced  what kind of evidence involved, what rules apply, what is
optional, what is not?
- Rules of evidence is relaxed  general sense of fairness
- Hearsay Question  what if a decision of an agency is based entirely on hearsay?
o NY courts – cases involved workers’ compensation – Carroll v. Knickerbocher  block of ice fell on man 
problem was that no one saw it fall. Wife claims he was injured 112 N.E. 507  high state court says they are
sympathetic, but that it was nothing but hearsay and if hearsay is not supported by more than a residuum of
evidence, then cannot be used.
o Carroll has a corollary  Schuler v. Dressler 46 N.E.2nd 886 (1943)  different from Carroll b/c fellow
employees saw. Question was whether an admin decision that awarded benefits would be upheld and were the
observations sufficient corroborating evidence to support a residuum of evidence.
o Today – phenomenon – fundamental evidentiary presentation is hearsay (summary report). Schuler says this is
common evidence and if something supports it, then the mass of evidence (even if hearsay) is good evidence.
- Ad. Decision
o stmt of legal basis for decision – usually statutory
o explanation of the record – substantial evidence
 stmt of reasons, explanations, how conclusions correlate w/ the record itself
- Bottom Line  must include recitation of evidentiary basis – and if just hearsay, can run into trouble
- Look at handout, pg. 9  you can get in hearsay (but there is concern about it). If there is evidence that supports the
hearsay (not just a shred of evidence)
ABOUT THE LITIGATION PROCES
- Claimant for disability benefits
- State has doctors who say he is paranoid . . .
Issue  What procedural due process is required with respect to examining physicians’ reports in a social security disability
claim hearing?
HELD  Supreme Ct. reverses and remands to the District Court to determine whether the Sec’s findings are supported by
substantial evidence.
Facts & Procedural History
- P filed a claim for disability insurance benefits under the Social Security act in State Agency
o State Agency had a doctor examine him – dr. found nothing wrong
- State Agency denied the claim
- P requested reconsideration
o State Agency arranged for 2nd examination by psychiatrist w/ neurology specialty
- Bureau of Diasability Insurance of SSA denied the claim
- P requested a hearing before an examiner
o State Agency had P diagnosed by other doctors that confirmed the previous doctors’ findings
- State Agency scheduled the hearing
o written notice was given to P and a copy to his attorney
o Notice contained a definition of disability, asked P to bring all medical and other evidence, afforded him opportunity
to examine the Agency’s evidence, informed him that he could bring his own physician and witnesses to the hearing,
and that he could have an attorney
- Hearing Examiner (based on the medical reports and testimony of Doctor who had not examined P) found that P had not met
his burden of proof.
- Appeals Council held that the Hearing Examiner was correct
- Summary Judgment  both sides moved for summary judgment
- 5th Circuit  noted the absence of any request by P for subpoenas and held that b/c P had the right but did not exercise it, he
was not in a position to complain that he had been denied the rights of confrontation and cross-examination.
o HELD  hearsay evidence in the case was admissible under the Act, and specifically, that the written reports of
the physicians were admissible in the administrative hearing, Dr. Leavitt’s testimony was admissible  BUT, that
Admin 2004
-
-
-
-
-
42
all of the evidence together did not constitute substantial evidence when it was objected to and when it was
contradicted by evidence from the only live witnesses. Says the record is uncross-examinable and that cross
examination is a fundamental right – so there was no hearing at all. Held that the evidence was insubstantial
 Insubstantial b/c in order to move into the requirements of reliable, probative, and substantial  there
must be a piece of real evidence to confront
o P argues that there is something fundamentally wrong – the record exists entirely of hearsay
Does Agency have Authority?
o yes – Congress provided that Sec has full power and authority to make rules/regs and to establish procedures
o Sec MUST
 make findings and decisions
 give reasonable notice on request and opp for a hearing
 and during the hearing, to receive evidence
Gov’t Function Involved?
Private Interest? NOT taking away benefits
Fundamental Fairness? Sup.Ct. holds fair process
During the hearing, State has a doctor (who did not examine the P) review the other doctor reports
Supreme Court  hearsay itself IS admissible!
o But, is a problem about what is substantial evidence?
 substantiality has to do with a reasonability perception
 “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion”
o Tied notion of sub.evidence to the findings – admin adj requires a decision that links the fact and decision (more
than Article III courts). An ALJ must link the evidence to the record in a way that a reasonable mind would be
willing to accept
NOW  if a big record, must point to specific facts that will support a reasonability request.
Court viewed attys failure to subpoena as a waiver of the right to cross examination
o Prof—not a compelling rationale. ALJ job will question people b/c not Article III judges – there job is to implement
a statute. If the attys are not asking the right questions, then it’s the ALJ’s job . . .
Medical records, however, are even allowed in Article III courts
No debate over whether this is admissible evidence – it is obviously admissible
The q is wehtehr it is sufficiently substantial
What right was involved here?
o P argued, like Goldberg
o Court said no survival here, a hearing was provided
o Prof  at fundamental constitutional level, its
Once in due process door, becomes a question of weight that will define the level of process provided. Allegation that
process is insufficient b/c allowed decision based entirely on hearsay.
If the court had found this a compelling liberty interest, or serious property interest, might have been less evidence in
allowing hearsay to support the decision in its entirety
-
Bottom Line 
o (a) failure to subpoena that constituted a waiver (attys screwed up);
o (b) constitutional characterization (not a continuing interest, as compared to new interest) and therefore that the
process should be limited;
o (c) lack of necessity of cross-examination or standard medical record (they are an exception to hearsay in regular
courts) so the quality of evidence was sufficient, not like other kinds of hearsay;
o (d) these are disability benefits (1/2 million cases a year – if require a full hearing, will cost too much and can’t
afford it;
o (e) nothing wrong w/ process, agency provided an opp for cross-examination, doesn’t have to provide a guarantee;
substantial evidence (reasonable minds accept as adequate) was met (relevant evidence that has probative value).
-
3rd Circuit  construes Richardson as an element of fundamental fairness to which a claimant is entitled – every claimant
has a right to cross-examination
-
NOTE  Richardson & expert witnesses  expert witness is paid to testify, so is always an issue . . . attorneys want to make
sure the testimony will be one that supports the interest of the client.
o In admin adjudication, experts have inherent credibility (once an accredited expert).
o Prof  a tendency (esp. in medical field) to overgeneralize. A general practicioner, or back specialist. Can knock
an expert out by challenging credibility! SHOULD CROSS-EXAMINE EXPERT WITNESSES. A problem b/c of the
inherent credibility rule.
Admin 2004
-
43
In Admin adjudication  can ask for the expert’s stmts in advance
NOTE  number of facts to which hearing officer gave official notice
o official notice – equates to judicial notice. Ct. gives judicial notice to facts that are uncontested or obvious, once
this happens shifts burden to otherside to confront the fact.
o In Admin process, which facts will an agency permit to be noticed?????
 APA – allows official notice of any “material fact”
D. Cowan (supplement)
- Claimant sets his sweater on fire when lighting cigarette and claims entitled to benefits
- Important  how is it that the hearing officer goes about deciding whether compensation is appropriate?
o Go to plant to determine whether smoking is acceptable at employer
o Employer does not have to be at fault, just has to be whether it occurred during employment
o Find  cigarette butts on bathroom floor.
- What is wrong with this evidence? If the job is to implement a statute, then what is wrong with this?
o You cannot cross-examine the decision of a hearing officer – nothing in the record! Direct observation is just a
flash; a moment
Class Notes 2/25/04
- Grow v. Ramirez (U.S. 2004)  a search of a home by alcohol, tobacco, and firearm folks  duel premise of search: civil
ordinance & criminal search
o The warrant was inadequate in that it didn’t adequately describe the things to be seized.
o The Court held that the faulty warrant violated the 4th Amendment, and held that there is civil liability
o Affirms the notions and parameters of a search that we discussed and gives rise to the liability options in the event
of an inadequate search.
o “No reasonable officer could believe that a warrant that did not meet the req’t was valid”
-
What we are discussing now: How to Prove a FACT in the Adjudicatory Process (substantial, probative, reliable)
o Informal Adjudication  if often an everyday event for attorneys dealing w/ agencies
-
Cowan – sometimes the best way to get info is not necessarily the acceptable way to get information. B/C it doesn’t work
w/in an adjudicatory hearing, then the best way does not turn out to be an acceptable  cannot cross-examine an
observation.
o If an observation is all that you have, no way of challenging truth, of challenging
o Argument for challenger  in adjudicatory system where you need both sides to be able to challenge the evidence,
then the “best way” is a black and white world. Fairness dictates an opportunity to confront.
Handout
- Basic Rule  computer generate evidence is hearsay, its admissible, and it requires a proper foundation to be established,
and that the foundation is provided in court by a human who can testify a little bit about how that information was put
together.
E. Wirtz v. Baldor Electric Company, 337 F.2d 518 (1963). (supplement)
Court of Appeals for the District of Columbia
- Involves the validity of data – and the prevailing average minimum wage. Gov’t put together a survey
- NEMA objects to the survey
- The Gov’t argued that in order to get the info for the survey, they had to promise confidentiality  and that the businesses
would not respond to the survey otherwise . . .
- Bureau of Labor Statistics, Mr. Samuels, supervised the survey, and testified about it in court. But, in court, said he couldn’t
tell about the source –similar situation to Richardson
- NEMA  not happy  thinks the survey is flawed b/c they did a survey that showed discrepancies.
- Procedural Mechanism  filed a subpoena duces tecum (to get documents) of a list of the recipients of a survey. The
subpoena is denied  and they decide that there is an inherent self-interest of the declarants coupled with the fact that
NEMA cannot cross-examine the declarants.
-
Secretary reviews and finds confidentiality more important than cross-examination – decision is later reversed
-
Basic Rule: has not changed since Wirtz, this type of evidence is admissible – the question is “for what use”  inherently
in any computer-generated evidence, some core of evidence will not be admissible (i.e., whoever created the program that
organized the information)
Admin 2004
44
-
Question of Wirtz: How much foundation evidence must you present????
RULE: The party presenting evidence has to provide supporting arguments, data, foundation. Without this, there is
no substantiation, no cross-examination
-
Seacoast  if all the evidence relied on cannot be cross-examined, then the case must be sent back
-
Court said that the evidence was admissible but that the witness was impeached. Therefore, cannot rely on it, it is not
substantial
How does this decision carry over to computer-generated evidence in general – in the agency world, must be someone who
can testify about the methodology of the production and
-
-
-
-
-
Issue:
o
Whether the Sec of Labor properly based his determination of the prevailing min. wages in the industry on a broad
survey conducted under his auspices, where at the same time he declined to disclose at the hearing the underlying
data on which the wage conclusions in the survey were based, and (b) uncontradicted evidence was submitted
by the industry which cast serious doubt on the accuracy and reliability of the survey’s results?
Procedure:
o Sec. of Labor appeals from a District Court order setting aside his determination (under the Walsh-Healey Public
Contracts Act) of the prevailing min. wage in the electrical motors and generators industry.
Does the Agency have Authority?
o Walsh-Healey Act provides that all wage determinations shall be made
 on the record after opportunity for a hearing
 review may be had within 90 days after determination is made by any person adversely affected or
aggrieved
APA
o the proponent of the rule (SEC OF LABOR) shall have the burden of proof
o every party shall have the right to present his case or defense by oral or documentary evidence, to submit rebuttal
evidence, and to conduct such cross-examination
o Review courts shall set aside agency action, findings, and conclusions found to be w/o observance of
procedure required by law; unsupported by substantial evidence.
-
Government Interest
o disclosure of the confidential info might negatively effect gov’t procurement of info in the future
o However, court states that it finds nothing in the Walsh-Healey Act, Fulbright Amendment, or APA which would
empower the court to release the Secretary from conforming to the procedural statutory commands for such reasons.
Nor, any cases from the Supreme Court which relieve Secretary of the statutory obligations.
-
Private Interest
o cross-examination of the evidence
o right to test evidence
-
Fundamental Fairness
o NO  court thinks this procedure violates the essential canons of fairness laid down by Supreme Court – cannot
have a full hearing unless the right to cross examine has been afforded.
-
HELD  the admission of wage tabulations from undisclosed confidential data failed to accord the appellees the
adequate opportunity for rebuttal and cross-examination
-
Issue of reliable, probative, and substantial evidence
o the appellees strongly attacked the reliability of the survey
o Secretary had the burden of rebutting the doubt if intending to rely on the survey
F. Seacoast Antipollution League v. Costle (supplement)
Court of Apps – 1st Circuit (1978)
- Question: 2 sets of problems
o 1. What kind of hearing do you need when the phrase used to describe the hearing was “public hearing”?
o 2. Methodologically, what is the way to prove a fact?
Admin 2004
45
-
EPA decides to grant the permit in this case.
What process did the EPA have to constitute? Statute said that there had to be a public hearing and in that hearing, EPA
was to evaluate whether its standards were being implemented.
-
EPA established a panel of experts (after the initial decision was made) to make a decision.
Court specifically states that off-the-record information does not necessarily get shut-out just b/c its an adjudication.
o EPA’s argument: Even though this affects one company, it has a broader, environmental, public-policy effect. – So
not bound by the hearing . . . .
o Petitioner’s Win: b/c if there is an obligation for judicial review, cannot base a decision on OTHER
INFORMATION that is not on the record.
-
Essence of fairness in the adjudicatory process is the NOTION OF A REAL RECORD. This process cannot be fair if the
basis of the decision is secretive. (EPA argues Louderman – opp to be heard).
The predicate of this is what makes the adjudicatory process constitutional
Q: Why bring this case?
o EPA hasn’t guaranteed a victory
o Adjudication works!!! With all of the information and with the power to cross-examine, then the client has is fair
o how the process gets improved – part of the client’s interest is to get a fair hearing (will be a report, a record, and
will be reviewed, will be public scruity, and will be based on info that was there (not secretive info).
-
-
Does the Agency have Authority?
o §301 of FWPCA directs the EPA to promulgate effluent limitations
-
§ 554(a) of the APA  applies to every case of adjudication req’d by statute to be determined on the record after
opportunity for an agency hearing
o Court states that this section of the APA was intended to include adjudications which have serious impact on private
rights.
Court
o Adjudication  If specific statutory language of an adjudication requires a hearing, then it means on the record
o Rulemaking  hearing in statutory language does not mean “on the record”
-
-
Held  In adjudication, a statutory call for a hearing means a formal hearing “on the record” pursuant to § 554.
o Remanded the decision to the Administrator because he based his decision on material not part of the record
o HELD that Congress is presumed to intend formal adjudicatory procedures in a statute governing adjudication when
is uses the word “hearing”
-
Private Interest
o primarily the rights of the applicant are affected  decision of whether to issue a permit to allow discharge of a
pollutant
G. Heckler v. Campbell, 461 U.S. 458 (1983)., 100
- Involves External Sources – a public external source, which is the basis for the decision that affects adversely the Plaintiff in
this case
o Plaintiff is denied SSBenefits  claims that there is a dispute about what this person can do in the local economy
given the injury.
o Gov’t argues that it knows for a fact that there is work for the person, and that they won’t give disability benefits b/c
the person hasn’t tried to find work.
o Plaintiff  argues how does the gov’t know that – it hasn’t produced any evidence – an external source that it relies
on
o HHS develops grid thru a rulemaking – and this is what it relies on
o
- What is the obvious deficiency of this process?
o the underlying data – critical evidence is not available
o Can’t cross examine a grid.
- Point: a public rule was produced – it was fair – and thus it is legitimate
- Rulemaking – can establish classes and criteria
- HOWEVER – this is not why the case was decided
o What happens when a rule effects an adjudication? Can a rule dispose of an adjudication?
 Why is the application of the grid ok?
 No facts to be found here – the rulemaking found the facts. There are no more facts to be found
Admin 2004
46
so how would you cross examine.
Important: In adjudication, can find facts in many different ways, and sometimes, when facts have already been found, an
adjudication is not necessary.
-
Facts
o
o
-
-
Campbell was denied disability benefits when the Dep’t of Health & Human Services, using published guidelines,
determined that she was not disabled.
 Considered factors:
 health
 education
 experience
 set forth rules regarding whether a sig number of jobs would exist for which the applicant was
qualified
 If such jobs did exist, the benefits would be denied
Prior to the rules, experts made benefit determinations on a case-by-case basis.
Procedural History
o Campbell was denied benefits after rules were adopted
o Social Security Appeals Council & District Court upheld the decision
o Appeals Court reversed – holding that the HHS must identify specific alternative jobs for an applicant.
Court
o The findings of HHS were individualized – HHS compared her qualifications w/ the standards and then made a
determination.
o The requirement of individualized treatment does not prohibit an agency from using standards not requiring case-bycase treatment
o The present method affords claimants ample opp to present evidence.
o ONLY after considering that evidence was a decision made.
H. Morgan v. U.S., 298 U.S. 468 (1936)., 110
BEFORE THE ADVENT OF THE APA
When a decision is made by someone acting in good faith, but the decision made is not clear based on the information before the
decision-maker when the decision was made
- statute: that seems to suggest that Sec. of Ag is the person to establish rates for Kansas City Stock Yards . . .
- RULE: (1) The one who decides MUST hear; (2) if a statute says that a decision has to be based after a hearing “on the
record” that means the adjudicatory process have the hallmarks of the trial and that the record must be the basis of the
decision. Suggest the basic fairness formula.
- Negative Rule  Judicial Review is NOT a mental probe! Instead, about the necessity of a record assembled and accessible
to a decision-maker and bearing some relation to the decision which is actually made.
- Raises problems:
o If the one who decides must hear (i.e., one designated in statute) – then Morgan problem: federal agency must make
thousands of decisions each year – one person cannot possibly make all of the decisions if they must be based on the
record.
o As a consequence, after Morgan, establishment of delegated decisions in agencies, as long as the appropriate
person sees it at the end of the line.
- Bottom Line  necessity of an actual trial to decide if the decision-making process w/in this agency was fundamentally
flawed.
- Fairness  the record itself is the font of equity – the record is the only way you can rely on the absence of substantial
prejudice.
- In this case, a series of complaints about process:
o began w/ commodity dealers complaining that each rate req’d a hearing of its own . . . that the trial examiner that
looked at initially had not filed an initial report (initial decision).
o And that the initial report was made by Acting Someones – who was not the person that heard personally the
evidence  and therefore, had to be relying on non-record information.
o Secretary’s (agency’s) response  that this process (from bottom up) seemed good)
o Court  says that merely reciting the legitimacy of a process does not make it legitimate  it must actually be
legitimate! The difference bwn showing and telling . . . .
o The off-record facts in THIS case are of consequence  how were they treated?
 If the hearing itself is a charade – and then later on, someone else makes a decision – then the hearing is
Admin 2004
47


-
-
-
-
-
like off-record facts.
Basically, everything is non-record
The predicate of fairness is a record, and the problem here is that there was not a record.
o
Court  the duty undoubtedly will be an onerous one (in Morgan I).
On what did the agency seem to rely to make its decisions (that the ct found unacceptable)?
o the briefs that were filed by the parties
o The Secretary relied on changing economic conditions relied on by the department – and the court says not the basis
for a decision.
Morgan I – suggests an impossible format:
o 1. the every day business of agencies involves someone shifting and analyzing info for someone else.
Can you shift/analyze info w/out creating new information??? The shifting/analyzing is all non-record information . . . how
is it different than bias???
Morgan -- establishes the idea that non-record information biases a hearing!!!
Facts
o
o
Sec of Agriculture set livestock rates, although he delegated the hearing to the Ass’t Sec
According to law, the Sec must hold formal hearings in order to make the quasi-judicial decision of setting the
livestock rates.
o The Sec of Ag designated to the Ass’t Sec to hold hearings and hear evidence w/ regard to the livestock rates.
o Ps challenged the rates arguing that the Sec set the rates although he had not heard or considered the arguments
presented at the hearing
Procedural History
o Ps filed suit in District Court – claiming that the rates were set arbitrarily
o District Court dismissed the action
Rule
o Agency decisions in formal hearings must be made by officers who have heard and considered the evidence
presented.
Court
o Findings of facts by agencies in formal hearings are conclusive
o HOWEVER, in determining whether an agency has complied w/ the statutory req’t for conducting the hearing, the
recitals of the agency are not conclusive – otherwise an agency could foreclose review by stating that it had followed
correct procedures.
o The decision maker at the agency has the duty to hear and consider the evidence before making the rate
determination.
o Reverses the District Court
Class Notes 3/1/04
- The issue to set aside a judgment – SeaCoast – problem w/ non-record information in an adjudication (one of the most
common problems in admin – its in every case b/c as decision-makers, we all bring into info we derive from our
past/experiences).
- Question: When is something that has influenced your point of view a problem to the extent that reliance on that opinion that
a decision based on it should be redone?
o From Sea Coast, the standard used was the use of extra-record evidence substantially prejudices .
o Bottom Line for fairness is whether the decision is based on the information provided or fairly available – and if
decision not based on that info, then it is inherently unfair. Most important part of fundamental fairness.
- Problem becomes – that you cannot expect that b/c you provide information upon which a decision favoarable to your
position that the judge will decide in your favor . . .
- From Sea Coast, the notion of substantial prejudice will allow for a decision to be set aside . . .
- In hear say  even though its admissible, if the decision is based entirely on it, then raises an inherent fairness problem . . .
- One way to understand the role of decision-makers – is to look at how external information gets evaluated . . .
I. Andrews v. ALRB (1981), 123
In Class
- Involves bias – usually the standard is “unalterable-closed mind”  but proving this is risky business
- You are challenging the contention that the decision-maker is immoral – b/c it is fundamental to due process that the
decision-maker is impartial.
- Basis for the Challenge to the decision-maker’s objectivity?
o the decision-maker had worked at a firm that consistently represented one side of this problem
- Court  said that a lawyer’s practice could be evidence of a lawyer’s political or social disposition . . . but that is not
Admin 2004
-
-
-
-
J.
-
-
-
48
necessarily a basis for recusal . . .
How do we know the decision-maker is not making the decision based on bias? B/C we can look at the record – the record
must be correlated with the decision. If the process/decision is arbitrary/capricious/abuse of discretion, then it will be
evident in the record.
Not good for the challengers  b/c they really had nothing to point to in order to demonstrate bias
Question: What about the appearance of impropriety?
o Appearance is in the “eye of the beholder” – disqualification cannot come just from appearance.
Standard (for knowing if bias is shown):
o If the fact finder credits insubstantial evidence & if the decision itself ignore irrefutable evidence – aka 
looking at the record.
RULE: Even if the nature of a lawyer’s practice could be taken as evidence of is political or social outlook such evidence is
irrelevant to prove bias.
Must have bias against person & case  does not matter if biased against subject matter
o bias  “the mental attitude or disposition of the judge towards a party to the litigation, and not to any views that he
may entertain regarding the subject matter involved”
Rationale: the more politically or socially sensitive a matter, the more likely it is that the ALO (like most intelligent citizens)
will have at some time reached an opinion on the issue – this is a result of human beings . . . .
Court  our courts have never req’d the disqualification of a judge unless the moving party has been able to demonstrate
concretely the actual existence of bias.
Allentown Mack Sales v. NLRB, (1998) (supplement) 118 S. Ct. 818
Overview:
o Involves the continuation of a union . . .
o Question about whether good-faith belief or reasonable doubt
o Was the refusal to bargain an unfair labor practice?
 Company undertook secret ballot to figure this out – which was supervised by a Priest (and is used to
justify the company’s actions to not bargain).
o What was the NLRB’s process?
 Court said that the decision making process was facially rational
o What was not acceptable at the agency??? The way they applied the reasonable good-faith standard . . .
Bottom Line: Not just the process (the process is fine), not just the good-faith standard (its fine)  this is an adjudication
which requires a substantial evidence test. This is an interpretation, and when issued w/in an adjudication, they must be
supported by the record.
o This case involved an on-the-record fact finder, so if some of the decision is based on unsubstantiated evidence, then
can be an argument for bias.
Similar to Heckler  an agency makes rules in the course of an adjudication – by what standard are those rules judged?
Substantial Evidence is used to judge an adjudication
What was the doubt created by the testimony of Dennis March? If this kind of glaring evidence (that creates doubt) in the
record, then cannot affirm that the deicision is support
RULE:
- When an interpretation is inserted into an adjudication and is fundamental to a finding, it must be supported by the same
record basis that supports the decision.
o In this case, not that the scheme of decision-making was wrong, was that the record did not support the decision.
o Why did Supreme Court grant cert here? Adjudication is retroactive; only involves a couple of parties (normally) -- here, have an adjudication that does both rmaking & adjudication
o Stare Decisiis – when an agency uses adjudication to make rules, it cannot be unbounded by its decision to do so.
Consider the real-world effect of the decision . . . . generalized & common to labor law – and the court understood
this – understood that it would happen frequently, and therefore the agency needs to support a shift by a record that
supports the decision of the case.
Deeper Question: how does this decision affect Chevron? Why wasn’t deference granted to this decision? Court says that you have
to support an interpretation (in an adjudication) w/ substantial evidence.
- Does this undercut Chevron? Has the agency’s judgment been undermined?
o The problem to the interpretative process – when applied – the judicial scruity to review is more penetrating . . . so
an advance interpretative rule would not likely have solved this problem
- Court – an agency is not free to derive inference freely –
- PROF  the beginning of the Court’s attack on Chevron (judicial attack on the president)
Admin 2004
49
Since this Case:
- to apply sub. evidence to an interpretation in an adjudication is a gauntlet. If they want a new way of doing something that
affects so many people, then agency should have had a rulemaking. And, if agency colors it as an adjudication, then needs to
be able to support it.
- Prof  clear articulation of Morgan – unclear basis undermines
- Cannot use adjudications for a vehicle for turning interpretations into rules
Class Notes 3/3/04
- What if something doesn’t have a hearing process?
o gov’t entity involved hasn’t in a voluntary way, provided a process . . . [potential exam question]
o you can impose certain harms, sactions, ect., and then wait to see if som
o Question  using all the material we’ve done . . . is that system correct????? If a client came to you could you
challenge the process and ask for a hearing???
o Part of what we’ve been talking about  how atty’s establish the process
- What if the forum isn’t established???
o many of the cases we’ve read have involved hearings that are inadequate, although some have dealt w/ no hearings
at all.
o Hornsby v. Allen  case where there was no hearing, just a decision.
Ex Parte Communications
- more confusing/difficult at state/local level
- whereas at the federal level, everyone knows that ex parte communications are bad . . . and in Washington, news travels fast .
. . . and the FBI will get involved (federal offense)  actual teeth in the mechanism when someone goes over the line
- Idaho Case  can see the tension bwn the majority and the dissent
K. Professional Air Traffic, (D.C. Cir. 1982), 132
- Issue: certain contacts between agency heads & others while the PATCO case was before the FLRA
- APA § 557(d) governs ex parte communications during an adjudication
1. applies only to ex parte communications to or from an “interested person”
2. Gov’t in Sunshine Act defines “ex parte” communication as “an oral or written communication not on
public record to which reasonable prior notice to all parties is not given, but not including requests for
status reports on any matter or proceeding”
3. prohibits communications “relevant to the merits of the proceeding”
- Disclosure of ex parte communications serves 2 interests:
1. to prevent the appearance of impropriety from secret communications in a proceeding that is
req’d to be decided on the record.
2. as an instrument of fair decisionmaking; only if a party knows the arguments presented to a
decisionmaker can the party respond effectively and ensure that its position is fairly
considered. – when those interests of openness and opportunity for response are
threatened by ex parte communication, the communication must be disclosed.
- Administrative Remedies for Ex Parte Communications
o 1. disclosure of the communication and its content; and
o 2. requiring the violating party to show cause why his claim or interest in the proceeding should not be dismissed,
denied, disregarded, or otherwise adversely affected on account of the violation.
- Case Law on Ex Parte Commuications
o under case law, improper ex parte communications (even when undisclosed during agency proceedings) do not
necessarily void an agency decision. Rather agency proceedings that have been blemished have been held to be
voidable.
o Court must consider: whether (as a result of improper communications) the agency’s decisionmaking process was
irrevocably tainted so as to make the ultimate judgment of the agency unfair:
 the gravity of the ex parte communication;
 whether the contacts may have influenced the agency’s ultimate decision;
 whether the party making the improper contacts benefited from the agency’s ultimate decision;
 whether the contents of the comm were unknown to opposing parties, who therefore had no opp to respond;
and
Admin 2004
50

FLRA
-
whether vacation of the agency’s decision and remand for new proceedings would serve a useful purpose.
the principles here are not hard to identify or controversial
agency officials and lobbyists  do have dialogue all the time, and that there is a value in that . . . and to come down to hard
on the dialogue is to go against traditions and suppress info that is coming in.
Extra Record Informaiton  and how do you deal w/ it as a litigator
Also, involve discussions about discretion (Chevron)  when should courts back off and allow agency discretion to be
unbridled . . . .
All thru the field of ex parte communications  will see passing references to respecting agencies’ ability to control itself,
discipline itself, etc.
About the necessity of confrontation and the difficulty of ascertaining truth
Ex parte are non-confrontable communications
-
First remedy of ex parte is notice of the comm in the record
o so, this makes it seem confrontable, BUT it really has a temporal quality about it that is not confrontable. B/C
when the comm takes place, judgements/opionins are set, and is not something that can later be changed 2 to 3
months down the road.
-
About Truth  do the comm contaminate the record
-
OVERVIEW 
o involves decertification of PATCO as a result of an agency ruling  question about whether PATCO should be able
to continue representing air-traffic controllers.
 What lead to the decertification challenge? air-traffic controllers went on strike b/c of internal decisions
made by PATCO, which shut down the airports. Pres. Reagan  viewed this as violating a federal
principle. He thought that fed. employees (by contract) responsible for public health & safety did not have
the ability to go on strike. (although other remedies were available to them . . .)
 Therefore, b/c they went out on strike, President Reagan fired them . . . .
 In the meantime, President designated military employees to serve as air-traffic controllers (thus,
interfering with NLRA)
 This was a nat’l disaster b/c all the airlines shut down . . .
Process results in a hearing (and the hearing is what the case is about  the concerns of the indiv. hearing officers)
Judge – giving the task of determining if there had been inappropriate ex parte comm that would render the decision invalid
3 Exchanges that become
o What is the exchange???
o Why was it problematic?
o What did the court do?
-
1.
2.
3.
Sec. of Transp. called one agency decision-maker (issue of timing) (meeting bwn ALJ & council)
o What did the court do about the first discussion?
o Court held that they can have all the discussions they want as long as they watch what they are talking about 
court also says that the discussions were indiscrete, but nonetheless, the court allows the matter to go forward.
o (This was a discussion overall of the legality of strikes of public employees)  involved the basic philosopical
Bwn ALJ and Office of the Secretary on procedure
o raises question of how quickly can we solve the issue of getting rid of the striking employees – what is the most
efficient way to proceed? i.e., speed up to a week (instead of 25 days)
o Applewaite told him that he needed to file a motion for an expedited process – gave advice
o Court 
 says it is correct info, which is kind of like public info
 and simply giving advice on an expediated process does NOT mean that the comm was corruptive
 this did not give unfair info to one side
o
Dinner bwn Applewaite & Shanker
o Shanker says that decertification will kill the union and will kill public labor law in general  position that it was a
volatile issue/decision.
o He says this b/c this is his business, he represents public employees  tells applewaite to preserve the business
o ultimately, FLRA voted to revoke Patco’s certification  so obviously the conversation did not change the outcome
of the case
o What happened in the discussion that caused the complaint?
 Shanker was intentionally trying to influence a judicial officer
Admin 2004
51



In fact, Applewaite works as an arbitrator 
The complaintant believed that the discussion included an unstated threat against Apple whaite if he
decided against the interest of PATCO
NOT a bribe, and not even clear what language was used
What makes a discussion a concern in terms of ex parte communications?
o must be bwn an interested person & a party member and judicial officer
o discussion not on the record
o discussion that concerns the issue of the case  that could potentially contaminate a decision
If disclosure does not satisfy the problem: then there are remedies:
- issue a show-cause order (why the parties should not lose)
o problem w/ this, b/c a show-cause punishes a client for the wrong-doing of a representative
- ethical sanctions
- exclusion of that lawyer
BUT  before the sanctions, there has to be a threshold of wrongfulness:
- (standard of the case)
- IRREVOCABLE TAINT  the discussion must be so bad as to irrevocably taint the decision
- SeaCoast  substantial evidence standard
Bottom Line: Tells you that most informal discussions (not a part of the proceedings) do not affect the outcome . . . Most ex parte
communications go unpunished. Most can be cured by notice.
- so, dispite something resembling real adjudication, there is a level of ex parte comm and
What was the court’s attitude about Albert Shanker???
- The court comes down hard on Shanker  but not on the judge
- Court says that the Judge could not have known why Shanker wanted to invite him to dinner (ha!)
- Court – instead of sanctions  the court gives a real tongue-lashing to Shanker
Bottom Line  it takes a very substantial violation for the court to come down on them
L. LaSalle v. County of Lake (supplement)
- unique b/c an agreement regarding the use of resources entered into bwn the state and some attys beforehand
- Question: what to do about lawyers that move from gov’t practice to private practice?
o Sidler has legally-acquired info (that is non-record data – that cannot be readily cross-examined).
- Court
o Court will not let him continue on the case b/c he has a relationship w/ the agency
- What is the standard for a lawyer? DIRECT & SUBSTANTIAL RELATIONSHIP W/ THE CONFIDENTIAL
INTERESTS OF THE PARTY ON THE OTHERSIDE
- Clear ethical issue
BUT  the difficult question is if the firm itself should be disqualified???
- What did the firm do to uphold the integrity? They kept Sidler away from the info as soon as the motion for disqualification
was filed  they came clean . . . as soon as they knew, they put up a screen bwn Sidler and the info.
- In Washington, this is an everyday challenge . . . and firms do this all the time . . .
What are the steps of screening?
- deny access to docs/ files
- fees
- discussions
- most important piece involves timing – the time frame in which the screening must occur. IT MUST TAKE PLACE AT
THE OUTSET OF REPRESENTATION (not when the atty discloses it).
o the atty/client privilege is activated upon the initial contact (no fee, contract, etc. req’d).
-
In this case, the law firm did not screen the atty soon enough – was a fatal flaw!!!!
-
General Rule: If you have substantial and personal involvement in a case w/ gov’t and then move to public sector, you
cannot participate in that world EVER (b/c have confidential information).
o BUT, the rule is moved down depending on your relationship w/ the case. For example, if you are leading the case,
then cannot switch over . . . however if you are just down in the trenches, it depends . . .
Admin 2004
52
Time Frame Is Important!!! (from which an executive employee can move to private realm and back . . . current administration
currently holds that 1 year is the time . . . )
M.
-
Simone, 158
Should there be an independent tribunal?
For whom do the ALJ’s work
Simone says that they ought to be independent & then should use OPM to control the cases and who they are assigned to –
better idea to manage personnel
o the only argument against this is expertise and this argument is just a myth . . .
N. Verkuil, 159
- holds the opposite of Simone – ALJ are not just judges, they are instituting statutes – and they should stay w/ each agency
and not be bumped around
Prof  does not think that the issue of expertise is the important factor—instead, the debate is about what happens w/ people over
time when they work for an agency.
- For ALJs that really become identified w/ an agency, they become bitter, difficult, angry people that give agency a hard time,
- OR they become completely captured by the agency
5. Rulemaking
A. Bowen, 230
Class Notes  3/3/04
- First problem: What can you make rules about?
o In the terms of the ways agency function, and when they set out to regulate
- In Bowen, the problem is simple  can you regulate activity that has already occurred? Can you produce a rule to deal w/
a problem?
- Issue
o Can a rule be applied retroactively?
 NO! Supreme Court holds that the rule is invalid  and that retroactive rulemaking is wrong – its wrong
b/c the Constitution says that its wrong
- Constitutional Issue  due process – you cannot pass a law condemning behavior that at the time was legal.
- Congress could have empowered the agency to engage in retroactive rule – BUT, Congress did not, so it is not allowed . . .
Why can Congress pass a law to empower an agency to participate in retroactive rulemaking when if an agency does it w/o
authority means that the agency is acting unconstitutionally
- Bowen requires precedence. Critisism is that no one can see the future and that Bowen seems to suggest that if you ban
retroactive rulemaking altogether are things that will happen in the future, which is extremely limited
- Critique: will create an unexpected reaction to a notice of a proposed rule  people will react wildly b/c of the prospective
req’t.
- Many interpretations of Bowen 
o that Bowen only applies to pure retroactive rulemaking  only past behavior w/ legal effect; not behavior w/ no
legal effect
-
-
Why did the court say that Congress can pass a law that will allow for retroactive rulemaking where it is unconstitutional for
the agency to do it on its own?
o Obviously, w/o Congressional delegation, the rulemaking will be unconstitutional.
o Congress cannot delegate a power it doesn’t have . . . so does Congress really have the power to retroactively make
law . . . YES – Congress does it all the time . . . real problems w/ what congress does and how they dole out
responsibility.
however, prof not sure that congress really has the authority to delegate the authority.
Class Notes  3/15/04
- Paulie v. USDA (9th Cir.) 2004  discussed Bowen – whether Bowen has survived over the past couple of decades. Bowen
is a prohibition on retroactive rulemaking and is important b/c it’s the sup ct’s contribution to agency guidance (rather than
a prohibition on retroactive rulemaking). Adjudictaions, however, function retroactively all the time and in the process
produce new rules. BUT  the problem is that if an agency is involved in a field that comes upon practice, behavior, etc.
that is in conflict with the purpose of the agency, what is the agency to do?
- 9th Circuit  says that Bowen is the right approach and that retroactivity is disfavored in law.
- There are obvious exceptions and Congress may say that a statute is intended to be used retroactively
o should the agency say that now it knows how folks are behaving, that they will henceforth promulgate a rule to deal
Admin 2004
53
o
o
o
o
o
o
w/ the behavior (and let the previous offenders get away with it)?
OR  should the agency go after those people?
Delegation – how broadly can you view the delegations
So, when an agency goes after someone retroactively, usually relying on the delegations—i.e., SEC (how broad can
you get w/o offending the overbreadth of due process).
Usually an agency can do this when necessary to protect public safety.
Allowed to do in adjudication b/c agencies are protected by courts when they try to adjudicate.
 Agencies usually win in court b/c it is hard to be an enforcement agency and so when an agency chooses
adjudication, it gets a boost from the court
 On the other hand, when an agency chooses rulemaking, courts are suspicious  b/c rulemaking is
legislation by people who are not accountable.
Rulemaking  when agencies merely interpret, then no judicial review. So, when courts get a hand on a
rulemaking, are tougher on it b/c they are suspicious of it.
o
o Judicial review of RM vs. AD –
 ad  sub evidence (review of substance)
 rulemaking  (process based) arbitrary/capricious or an abuse of discretion
says of RMing, when looking at a rulemaking, are not supposed to look at substance.
-
Judicial Review of Rulemaking & Rules  spotted history 
o adjudications where rules are produced are common  and produces common-law force (which is a real force in
the U.S.)
-
Problem of Retroactivity 
o spans both rulemakings and rules from adjudications
-
If retroactive rulemaking is unconstitutional, then why is it Constitutional for Congress to give the authority for
retroactivity????
o 9th Circuit does not
Point from Bowen Rules (by design) are supposed to guide future behavior
o 1. it is undemocratic b/c agencies are not elected officials BUT
o 2. rulemaking is the most profound expression of direct democracy that we have.
-
-
RM is more direct democracy than anything that Congress does  public has a very direct role
o i.e., public gets to file comments on rules
B. Florida East Coast, 247
3/15/04
- Q: Rulemaking & Formality  rulemaking is usually notice & comment, but on the other hand  in a formal rulemaking,
there is a record/correlation req’t
o §§ 556 & 557 governs formal rulemaking
o §553  informal process
- D.C. Circuit  stating that there are not many formal rulemakings anymore . . .
- So, the problem w/ FL East Coast is that it seems merely historical to us now; however, will see w/ regularity, formal rule
- Q of FL East Coast: Can you argue the necessity of formal rulemakings b/c of the general language of the statute or b/c
of the effect the rule will have on a client???
-
-
-
What was the adverse impact of the parties that challenged the action of the agency???
o The agency said they wanted higher rental rates for the RR cars, which would have an adverse affect on business.
o Why did the agency want to enforce a substantial increase in rental rates? What would the agency get out of it?
There was a shortage of RR cars, and so if they increase the price, there would be more of an incentive to create
more cars . . .
What did the opponents of the agency say that the agency did wrong?
o Said agency should have held a formal hearing
o Argued that the agency’s facts were wrong
o a RMing is not a trial (cannot cross-examine in a RM)
Agency choice of procedure is PROTECTED (as long as there is a rational basis) – has been protected by Sup.Ct. since ‘20s.
Admin 2004
-
54
Q: What is the meaning of the phrase “after a hearing”  argued that Congress wouldn’t have used this phrase if it hadn’t
intended a formal hearing.
Also argued, when an impact of a proposed rule is as monstrous as THIS, then there must be a hearing (due process requires
it b/c if this rule passes, then there is a taking.
-
Dist. Ct.  agreed w/ plaintiff
Sup. Ct.  agency wins
HELD  the word “hearing” doesn’t mean a trial
-
Is there any language that Congress could have used to necessitate a trial-like hearing??? Must say formal hearing on-therecord.
o hearing on-the-record  meaning that there is evidentiary link bwn the evidence and the record.
-
Court said this is fine b/c it is broad-based and it is prospective
Overall, Congress believes that if you are acting prospectively, then does not require a trial, b/c cannot have a trial for the
future.
RateMaking is rulemaking b/c it applies to a class of rates (applies to the future, prospective)
Licensing is adjudicatory
-
Dissents  rejects the above argument and states that if something has a profound impact on someone and effectuates a taking, then
why wouldn’t you have a trial beforehand???
- argument about substantial impact and prospectivity
FL East Coast HELD  formal hearings for rulemakings are not preferred
- background is not as easy/clear, and for example, if you see something big coming at your client from
an agency, want to figure out a way to force an adjudication
C. Pacific Gas, (supplement) 506 F.2d 33
Interpretive Rules  (other side of RM)  rules issued w/ no process at all
- §553 contemplates informal rulemaking
- 1. general sub. rules that have a process
- 2. interpretive rules for which no process is needed and no judicial review is req’d
- Q: Whether there will be any notice at all before an agency acts.
- interpretive rules are fundamental to the agency process
o informal RM is cheaper than a hearing
o BUT, interpretive rules are cheaper than informal rulemaking
- Q: When and how easily can an agency issue interpretive rules?
Starting Point:
- Interpretive Rule  supposed to clarify a statutory term or reminds parties of existing duties; or that tracks and organizes
requirements and obligations
o NOT intended to produce new substantive rules
- Legislative rules (substantive rules – rules of law)  judicially reviewable, prospective in general. Become substantive if
they supplement a statute (as opposed to merely clarifying a statute). I.E., if they change a policy, rather than merely
remindng parties of a position. If agency action grants rights or imposes obligations, then it is a substantive rule.
Pacific Gas
- Problem: in light of a shortage of natural gas, should the product be allocated based on pre-existing contracts or by a
priority list established by the agency
o prior use v. contract
- Agency decided to go with prior use, w/ the exception that you could challenge the decisions later down the road
- Agency said that their interpretation was “prior use”  and that the agency was just clarifying.
- Plaintiffs argued that this was NOT interpretative, that agency made a rule ….
- The problem w/ interpretation is that it is NOT reviewable until it is enforced.
- Agency problem  if it had gone thru a RMing, would have taken too long and they were in a crises for gas
- Ps argued  you can’t have exceptions to a POLICY, and therefore, it must be a rule (b/c it has an exception to it).
-
Court held that it was just a general policy statement and as a policy stmt (like an agency manual)  agencies need to be
Admin 2004
55
able to issue them w/out being encumbered by process b/c they are just an interpretation – can challenge it once it is
enforced.
RFA  open acknowledgment of the substantial impact of interpretive rules  req’s n&c when it will substantially affect
small businesses …
-
D. Vermont Yankee, 254
- Similar to Chevron, b/c comes in the spirit and time when Sup. Ct. is trying to figure out the roles of courts in agency action
- FACTS  license application to go forward w/ a nuclear power plant; begins w/ a construction permit. Then need to get an
operating license
- Problem  the fuel cycle of the plaint is coming under attack
o They were in the middle of an adjudication (b/c dealing w/ the one company) but then the agency decides to deal w/
the problem once and for all by starting a rulemaking in the middle of an adjudication (while they were in the
middle of a trial). Said they needed a to make rules b/c they didn’t know what standards to apply to the tiral
- Rulemaking differences:
o the process of discovery is unavailable
o no cross-examination
o goal of RMing is to educate the agency, and therefore relying on off-record info isn’t a problem
-
RULE from Vermont Yankee  A rule cannot be disturbed so long as the agency complies with the
statutory minimum (APA), it is not w/in the discretion of the court to change the process.
o And, just b/c the court can think of a better way to do it, is not a good enough reason to
overturn the rulemaking
o Courts must require that agencies comply with APA minimum, and courts may not go
beyond that
pg. 258 (book)  Court created an outline for anyone attacking an agency rulemaking
- To attack a RMing, need to argue the circumstances of the individual case
o nature of the issues
o agency history  this case is elevating agency common law
o the future lies in arguing the exception  established the different categories where you can challenge a rule.
Class Notes 3/17/04
-
-
-
POINT: Agencies make law & this point can be missed when studying rulemaking – they make law in the same way that
courts and the legislature make law. Often don’t think of these individuals as lawmakers (often think of them as people who
are just using the system; attorneys)
Contrast w/ Civil Law countries  making laws are more legislative …
Formal Rulemaking
Informal Rulemaking (notice-and-comment)
Policy Statements & Interpretive Rules
o do not have a specific process, although different agencies have different modalities that they follow ….
o i.e., Vermont Yankee, establishing discipline on the judiciary  states that there can be in the statute additional
procedures coming under the statute from Congress – the add’l req’ts cannot come from judicial review BUT from
Congress
o When an agency enforces this interpretive rule, then it is opened to judicial review  then does allow a court to
take a hard look at it b/c the rule has not gone thru any checks …
Vermont Yankee  courts must lay off beyond the procedural minimum
o tells courts to be careful
Hard Look Doctrine (in contrast): In order to make the threshold ltd determination – must look carefully at the agency (hard
look)
E. Morton v. Ruiz (supplement)
- Vermont Yankee  judicial review
- Morton  Important case for how agencies function
- Facts: An Indian who chose to live off reservation for work.
Procedural History
Admin 2004
-
56
P appealed the denial of benefits to the Dist. Ct.
Dist. Ct.  dismisses case
Court of Aps  reverses
Supreme Court  affirms the court of appeals
Question  about the basis of structure on which the agency’s decision was made
Congress  provided a broader interpretation of the statute. If the agency is going to narrow the interpretation, must
publish notice of this fact
- Rule  not supposed to produce and enforce eligibility standards on an ad hoc basis.
BUT  this is a substantive rule (not interpretive rule) – and therefore, changes the eligibility requirements – when there is
something of this import, then something more than a reference in an internal manual is necessary
-
RULE
- When Congress directs an agency to delineate rules, evolving rules by announcement or by an interpretive process does
not cut it.
o Agencies must promulgate rules in order to not act arbitrarily.
- Mortan stands as a check – there can be circumstances where the stand
1. If the production of standards is using adjudication (instead of rulemaking) on an ad hoc basis
2. Using interpretive rules when Congressional mandate seems to suggest making rules in a more
defined way
3. The power of an agency to administer a Congressionally mandated program requires agency to
formulate power and policy & that their proper function (says 9th Circuit in 1993) is to fill in policy
gaps pursuant to congressional mandate.
-
FACTS
SO, although agencies are supposed to do what the BIA did, there are restrictions on how they do it and the BIA did not meet
all of the requirements.
An Indian (Native American) couple moved off of an Indian Reservation, but later attempted to collect benefits from
the Indian agency (BIA). The agency refused to give the rights b/c it claimed that Indians not living on a reservation
did not fall within the people who could claim the benefits.
Although the Supreme Court stated that Congress granted the authority to the BIA to limit who could receive the
benefits. The Court rejected the agency’s argument that Congress did not intend those excluded Indians from the
benefits, instead holding that because the agency failed to publish to the public its rule of excluding non-reservation
Indians from the benefits, that the agency must provide benefits to the Indian couple.
HELD
That Congress intended the statute to include Indians on or near reservations and that the Indian couple fall within
this boundry.
COURT
The agency produced an interpretive rule in an internal agency manual
F. HBO, 264
- agencies making law and how to deal w/ the difference bwn agencies and other forms of the legal process (where there are
clearer rules, for example, ex parte communications)
- important for understanding the function of judicial review – judicial review is a part of this or else it would be dangerous
- 7th Circuit  said HBO is a Case about secrecy
FACTS
- about producing rules for cable television
- FCC is seeking to keep a spectrum for TV signals public & that the networks don’t charge for it
PROBLEM
- After LOTS of interested comments were submitted (millions), the agency attempted to sift and organize all of the information
COURT’S CONCERN
- even if you can construct a reason for the decision on the record, when there is such a huge conflict bwn parties here (and an
ex parte communication intended to influence) that is not document
1.
2.
Engaging in behavior designed to influence the decision after the close of notice-and-comment
Public deception
a. the public genuinely are deceived b/c the public believes that what is in the stmt of basis in purpose is what the
agency says it is
Admin 2004
-
57
How can you have judicial review of a record if its not really the record
This case is about people acting in a way they should not have; acting inappropriately …. provides a great argument for HBO.
- When there is expert information coming upon which agencies rely that are not documented, are a problem.
G. Sierra Club, 267 (D.C. Cir. 1981)
-
on-the-record decision making – can argue that this is a fairly formalized process
So unlike much of notice-and-comment rulemaking, there is a stricter req’t. Although not an official rulemaking process
does require an official record that is req’d (and not just by the APA)
APA – only that the outcome need not be arbitrary & capricious
here  add’l req’t that the rule be based on the record
Communications
1. Senate Staff  staff that worked for key members of the Senate. COURT found it acceptable; believed that the EPA should
be communicating w/ senate staff, and not only is it appropriate but that it doesn’t even need to be docketed.
a. The nature of the information is important
b. Standard for docketing – essential information
i. was it no where else in the record
ii. was it docketed?
c. The court is extremely liberal with White House staff
d. Intra-executive branch communication bwn
2. Dialogue with Member of Senate  2-part test:
a. improper if advocating factors not listed in statute itself; and
b. if the agency relies on them
c. COURT  said that this communication was appropriate
3.
-
-
rulemaking & political bias
o there comes a point where an agency official has been so influenced that the rulemaking is a sham … this has been
indicated by courts continuously.
Acceptability of lobbying & political influence
Sierra Club  although the case involved contacts between the white house and the senate, the tone of the
opinion is not condemning
- Learnable Abstraction  what would make a dialogue with a Senator or a Congressman problematic
- Dialogues bwn members of Congress and regulatory agencies (despite separation of powers) are
encourages/supposed to happen
o PROF  in listening to candidates – keep saying that they don’t want a gov’t run by political insiders.
What they are saying resonates and is an effective campaign devise (used by most candidates).
Odd to match up this case (and others like it) with the political process and then to match that with
the tenor of this opinion. The tenor of this case is supposed to reflect public sentiment
- More troubled when about a privileged/valued item of the agency that must be presented
- More troubled when judicial review is a problem
- BUT, on the whole, encourage communications
1. Regime of permissiveness – get from the court
2. Regime of generalized political science expectation
3. Political public discourse that condemns the dialogue
a. the feeling of the opinion (that seems to encourage inside dialogue) conflicts
with political campaigns that condemn the dialogue
i. weird for politicians to take this stance b/c they ARE insiders – they
are, therefore, condemning themselves
- “Unalterably closed mind”  the only basis for attacking someone for a recusal
Rulemaking
- PROBLEM: Where does the info come from that is the basis for the rule that governs
Admin 2004
58
o
o
o
where does it come from
how do you get it
These cases ask this question of when you can attack, CA Hotel (at the end of the process)
 Sierra  at begninng of the process
3/22/04
California Hotel
- IMPORTANT case for the EXAM
- Basic Q: The end product of what looks like a rule; what it needs; provides a list
- similar to the Goldberg list
- Broader Task: articulated in dissent  asking the majority what they are talking about?
FACTS
- Decision by State Labor Bd about wages and hours of hotel employees.
- Challenge by Trade Ass’n  about the nature of making law thru the rulemaking process  what do you
have to prove at the end of the day to show that you made a good regulation?
- Challenge: Statement of basis and purpose was improperly drafted and does not
H. California Hotel & Motor Ass’n v. Industrial Welfare Comm’n, (Cal. 1979). pg. 286
a. NATURE
i. Appeal of an agency order permitting exemptions from the order’s time restrictions
b. FACTS
i. The Industrial Welfare Comm’n (IWC) enacted Order 5-76, which raised wages and regulated the hours
and working conditions of hotel employees. While the Comm’n had jxd over 15 industries, it allowed
exemptions for 7 of those industries from time restrictions.
ii. The CA Hotel & Motor Ass’n appealed the Comm’ns order, contending that its industry (the public
housekeeping industry) should also be exempted from the regs on hours of work
c. RULE 
i. A IWC order must contain a statement as to the basis upon which that order was enacted as
determined by a majority of the commissioners.
d. ISSUE
i. Must an IWC order contain a statement as to the basis upon which that order was enacted as determined by
a majority of the Commissioners?
ii. YES
e. ANALYSIS
i. The state & federal APAs differ as to the necessity of explanatory statements in agency rulemaking.
ii. However, although federal courts adopt the approach taken in the present case, the federal standard does
not require the agency to address EVERY ISSUE raised in the rulemaking process  the agency is req’d
to provide an adequate basis for judicial review in respect to the major issues raised and the agency’s
response to those issues.
Broad
-
Rule that the stmt of basis and purpose has a goal to it (not just an idle thought).
want people to be confident that the reg is one that makes sense; produces reasonable behavior
Look more at the language of the ACT and in more formal rules, look at what the basis must contain
Basic TEST for all rulemaking (not interpretive)  whether the decision passes muster on an
arbitrary/capricious standard
- A decision and rulemaking must include something that suffices for legal sufficiency of the action of the
agency (in add’n to the statutory authority)
o legal sufficiency  found in case law  what makes it a legally sufficient act??? If you don’t have
this, the rule becomes vulnerable (i.e., W-G case  the problem is that there is a legal insufficiency
b/c the agency is wrong in the way that it proceeded)
o Must have something that shows a connection bwn the agency action and the legal sufficiency
f. COURT
Admin 2004
59
i. 6 reasons for an effective stmt of basis:
PROF says VERY important to LEARN
1. stmt satisfies leg. mandate of §1177
2. facilitates meaningful judicial review of agency action
3. subjects the agency, its decisionmaking processes, and its decisions to more
informed scrutiny by the Legislature, the regulated public, lobbying and pubic
interest groups, the media and the citizenry at large.
4. induces agency action that is reasonable, rather than arbitrary, capricious, or
lacking in evidentiary support
5. by publicizing the policies, considerations and facts that the agency finds
significant, the agency introduces an element of predictability into the admin
process – which allows the regulated public to anticipate agency action and to
shape its conduct accordingly
6. public justification of its orders, rules, regs, and policies stimulates public
confidence in agency action by promoting both the reality and the appearance
of rational decisionmaking in government ….
g.
i. A reviewing court will ask 2 Questions when it reviews a rule:
1. Did the agency act within the scope of its delegated authority?
2. Did the agency employ fair procedures?
3. Was the agency action reasonable?
a. A reviewing court will uphold agency action unless the action is arbitrary, capricious, or
lacking in evidentiary support
b. A court must ensure that an agency has adequately considered all relevant factors, and
has demonstrated a rational connection bwn those factors, the choice made, and the
purposes of the enabling statute
ii. The COURT defines a standard to evaluate the stmt of basis req’d by § 1177
1. stmt of basis will necessarily vary depending on the material supporting an order and the terms of
the order.
2. The stmt should reflect the factual, legal, and policy foundations for the action taken.
3. The stmt must show that the order adopted is reasonably supported by the material gatered by or
presented to the commission—through it own investigations, the wage board proceedins, and the
public hearings—and is reasonabley related to the purposes of the enabling statute.
4. The stmt is NOT equivalent of the findings of fact that a court may be req’d to make.
5. Stmt of basis is an explanation of how and why the commission did what it did.
a. IF terms of the order turn on factual issues, the stmt must msut demonstrate reasonable
support in the admin record for the factual determinations.
b. IF the terms turn on policy choices, an assessment of risks or alternatives, or predictions
of economic or social consequences, the stmt of basis must show that the distinctions
drawn are reasonably support by the admin record and are reasonably related to the
purposes of the enabling statute.
COURT  the Statement of Findings is NOT sufficient as the stmt of basis
i. Other sections require that an Order be published and mailed to employers. The order in question, Order 576 does NOT mention the Stmt of Findings, and the stmt was NOT published or mailed to the employers,
therefore, the stmt simply remained in the Admin Record and does NOT satisfy all of the sections on the
stmt of basis.
ii. The stmt does NOT address salient comments and alternatives presentd during public hearings on the
proposed ORDER
1. The Comm’n did not explain how it distinguished adequate from inadequate collective bargaining
agreements.
2. The Comm’n did not explain why it exempted other industries , but not the public housekeeping
industry
iii. PROF  in effect a “to whom it may concern letter” (i.e., generalize stmt that didn’t seem
to address the elements req’d by a stmt of basis and purpose and therefore deficient).
iv. Court  specifically said that the agency failed to address why they exempted some
industries and not others. Failed to address salient comments from the public. Failed to
Admin 2004
60
discuss and address alternatives in the public record (filed by the public); and Failed
h.
i.
j.
-
-
-
-
HELD  The Comm’n failed to include an adequate stmt of basis in Order 5-76 as req’d by sections 1177,
1182, and 1184, and therefore Order 5-76 is invalid.
RULE  The court has inherent power to make an order appropriate to preserve the status quo pending correction
of deficiencies.
i. Therefore, the Court ORDERED that the order remain operative pending further proceedings to be taken
promptly by the Comm’n.
ii. WHY? Because the Order had been in effect for 3 years and the minimum wage order was of critical
importance to a significant number of employees, who bear no responsibility for the deficiencies of the
order.
DISSENT
i. Believes that the majority’s instructions on the standard for the basis is MUCH too detailed.
ii. Contrasts it w/ § 553 of APA  which states that an agency (after receiving written comments, “shall
incorporate in the rules adopted a concise general statement of their basis and purpose”
1. The APA does NOT require a statement of findings of fact
2. Nor does the APA require an elaborate analysis of the rules or of the considerations upon
which the rules were issued
3. Rather, the stmt is intended to advise the pubic of the general basis and purpose of the rules …
Morton  an adjudication where supreme court says that when congress put out a criteria – it was
insufficient for the agency to only have it in an agency manual
HERE  if the statute says that you must consider some points, then should consider the point.
Dissent  expresses astonishment at this opinion
o “concise and general statement of basis and purpose” is all the APA says …
o Dissent relies on Prof. Davis (a rulemaking minimalist and author of § 553)
o Prof  problem of correlation. The dissenting judge is saying that the decision is not correlating to
the record  the decision is not supported
ONE SIDE  its not up to the court to penetrate anything unless its arbitrary/capricious. The agency
does not have to explain – if there was an explanation req’t, then notice & comment would be “on the
record” and the standard would be “substantial evidence” and therefore b/c this is not true, producing
rules can happen with a general basis of support
o governance is a business of exchange  we expect that there will be generalities, and sierra club
(will be dialogues)
MAJORITY  comes from election campaign rhetoric. Agencies have potential for being authoritarian;
unaccountable ruling  fairness is found in the record and this record stinks
o not discussing alternatives
o not discussing salient facts
o argues that they need a record that gives them confidence!
These are different points of view  and you can attack the basis of a rulemaking based on the amount of
information provided in it.
No doubt that a rule must be based on a stmt of basis and purpose
Also, no doubt that the consideration
MUST raise policy consideration
If there are choices being made, then the agency must explain
THESE ARE REQ’TS OF AVOIDING A JUDGMENT OF ‘ARBITRARY’  THOUGH NOT A REQ’T OF THE
APA
o arbitrary – if no reason for the decision
o caprise
o abuse of discretion  if other options are presented and an agency does NOT consider the other
alternatives
Admin 2004
61
I. E.O. 12866, Clinton (1993). pg. 304
3/22/04
Contrast with CA Hotel – after-the-fact attack
- before a rule is placed before the public, factors to be considered
- screening process that must be considered
- Political Content of regulation  EO 12866
- Most important EO in the field of ad law
o states the president’s governance of the ad state
o product of Clinton administration
o has precursors over the past 2 decades
- Front End of RMing  considerations an agency must make.
o action by several different federal entitites that go into screening process of a rule before its
made available for public review
o Political Discourse (sierra) – what people are saying; the effects on a constituency
- Corollary to this EO exists in EVERY state
o task: 3 or 4 reviews that different labels  proposed regs will be tolerable based on their
effects on business.
o Business in the US is over-burdened by reg – and if streamlined, will be more viable, so should look
at rules before they are issued, before they have a constituency … the executive owes the peopl
- Down Side  if n&c rulemaking is really a process of publishing comments and acquiring evidence  then a
pre-judgment rule by a political process is in conflict with Informal Rulemaking
- EO 12291-- Other Exe. Order  OMB  review responsibility. Decide whether the regulatory impact
analysis generated by agency address the critical question  whether the benefits of the rule outweigh
the costs that the rule would impose
o explain content, the reason, who will be affected, who will pay for it
o up until this, the notion of reg cost was not done at a sophisticated level
o BUT  if OMB vetos a rule, there is NO judicial review (no record generating other than the
impact analysis itself)
- 3 CFR 1.8 (the way OMB does this)
- Added to it – a consistency with the administration analysis: for an agency to issue a rule, the rule had to
be consistent w/ the overall goals of the administration
o PROBLEM IS THAT IF RULEMAKING is meaningful, then it should not be about something that is
already pre-judged. Would be like having a criminal trial w/ no presumption of innocence.
- ORIA  w/in this agency, a process that must be followed
o functions under the Paperwork Reduction Act (amended in 1995)
o legislation to minimize paperwork on individuals, small businesses
o BECOME  a more pointed review by OIRA of desk officers that collaborate w/ other OMB folks
using the same criteria so that the exe can pursue his mission in a meaningful way
o Many instances where the OIRA has stopped the production of a rule
- Other Legislation PRE-RULEMAKING
o Reg Flexibility Act (5 USC 601 – part of APA)
 law designed to ensure that the impact on small business of rules is minimized
 idea: to slow down agencies by compelling
1. OMB – formal reg impact
2. OIRA – reg impact PLUS analysis plus political impact
3. Reg Flexibility Act – interests of small business
- Intended Mandate Legislation (2 USC 1501) – cannot produce a rule that obligates the states to expend
funds
o deals w/ “federal arrogance”
o Tort Reform – primarily state law. But always a complaint that fed gov’t imposes will on the state
Admin 2004
-
62
w/out providing any help.
RULEMAKING  cannot create a rule that produces obligations at state level w/o providing info on how it
will be paid for …
a.
b.
c.
d.
e.
J.
-
At the federal level, a series of Presidential Executive Orders have mandated that executive-branch agencies engage
in CBA (cost-benefit analysis).
In deciding whether and how to regulate, agencies should assess all costs and benefits of available regulatory
alternatives, including the alternative of NOT regulating.
Costs and Benefits  includes both quantifiable measures (to the fullest extent that these can be usefully estimated)
and qualitative measures of costs and benefits that are difficult to quantify, but nevertheless essential to consider.
i. In choosing among alternative reg approaches, agencies should select those approaches that maximize net
benefits (including potential economic, environmental, and public health and safety, and other advantages;
distributive impacts; and equity), unless a statute requires another regulatory approach
Each agency shall assess both the costs and the benefits of the intended Regulation and, recognizing that some costs
and benefits are difficult to quantify, propose or adopt a regulation only upon a reasoned determination that the
benefits of the intended regulation justify its costs
i. Significant Regulatory Action  means any regulatory action that is likely to result in a rule that may:
1. Have an annual effect on the economy of $100 million or more or adversely affect in a material
way the economy, a sector of the economy, productivity, competition, jobs, the environment,
public health or safety, or State, local, or tribal governments or communities
For those matters involving significant regulatory action, the Agency shall provide to OIRA the following (as part of
the agency’s decision-making process:
i. An assessment, including the underlying analysis, of benefits anticipated from the regulatory action . . .
together with, to the extent feasible, a quantification of those benefits;
ii. An assessment, including the underlying analysis, of costs anticipated from the regulatory action . . .
together with, to the extent feasible, a quantification of those costs; and
iii. An assessment, including the underlying analysis, of costs and benefits of potentially effective and
reasonably feasible alternatives to the planned regulation, identified by the agencies or the public . . . and
an explanation why the planned regulatory aciotn is preferable to the identified potential alternatives . . .
SEC v. Chenery, 332 U.S. 194 (1947) (supplement, pg. 132)
The next 3 cases all concern making law  so fit into the rulemaking section (even though they are
adjudications)
Q: (from Bowen)  retroactivity
Laws are made by administrative decisions as much as they are through legislation
What’s the deal w/ retroactivity w/ enforcement
1. Common law effect of adjudication w/ guiding principle – law-making perspective
a. common law arguments:
(begin w/ assumption that courts protect adjudication) – so to go after
something from an adjudication – would argue
i. agency action was truly unexpected
1. no way of knowing as a client that this was going to happen
2. the more “truly unexpected” the more likely the court to find
that it was retroactive and wrong
ii. party who engaged in the behavior was justifiable doing so
“justifiable reliance on prior agency action”
iii. enforcement creates new liability/obligation 
1. i.e., in Bowen, evidence that the hospital knew the change was
coming so lessend their argument
2. If congress has denounced retroactivity in the field, then
client wins
iv. Agency does not need to do this; does NOT enhance any statutory
goal; better off publishing in advance of prosecuting someone for
this – flip the burden back to the agency
Admin 2004
63
1.
Lawbreakers will go free argument – if not talking about
something tremendous, then why do something that leaves a
bad taste in your mouth?
v. Mortan v. Ruis & Horsnby – before enforcing something, must have
criteria, and if criteria should be followed
1. retroactivity – no critera; just general stmts in legislation
and now someone is attempting to enforce in an adjudication
where there are few critera
2. agencies make rules thru adjuciation (not the preferred
process) but is a way of life
-
2. What’s the effect on the individual/entity being prosecuted for an action/behavior
that when it occurred was not condemned or req’d. – individual justice perspective
From Bowen  retroactivity is bad b/c rules are supposed to be prospective
o however, Congress can also allow this to go forward
Chenery – judge agency action on what the agency states as the basis for its decision
- more important  involves q of retroactivity
FACTS
- in a period of reorganization, have mgmt deciding that the shares they receive will be preferred stock
- At the time they did this, there was NOTHING that said that mgmt could not buy preferred stock
- SEC decides they can’t do that  go after them …. tell them its not fair, equitable, or fair to investors
o SEC based this decision on the argument that the mgmt has a fiduciary duty – that this was not fair
from SEC perspective and therefore something they have the power to condemn even though
nothing states it
- Agency issuing order in adjudicatory proceeding condemning conduct that at the time it was done, nothing
condemned it
COURT
- Adopts the justification for the SEC doing this: the SEC’s duty and THEY HAVE EXPERTISE IN THIS
FIELD (they are the ones who are expert).
- Even though its retroactive, the Court accepts this  there is an enforcement mechanism in place (
o Judge this by looking at the nature of the misconduct. HERE – sufficiently egregious misconduct
and when weighed against the retroactivity, the misconduct is worse
o States that they would prefer that the agency state the regulation/issue a rule thru rulemaking
rather than conducting an adjudication
b.
c.
d.
e.
NATURE
i. 2nd time in Supreme Court
1. 1st time  the Court held than an order of the SEC could not be sustained on the grounds upon
which the agency acted and remanded the case back to the SEC for further proceedings
2. 2nd time  On remand, the SEC reexamined the problem, recast its rationale and reached the
same result.
ISSUE
i. Whether the SEC’s action is proper in light of the principles established in the Court’s prior decision?
RULE from 1st case 
i. A reviewing court, in dealing with a determination or judgment which an administrative agency is
authorized to make, must judge the propriety of such action solely by the grounds invoked by the
agency.
1. If those grounds are inadequate or improper, the court is powerless to affirm the administrative
action by substituting what it considers to be a more adequate or proper basis.
Corollary Rule 
i. If the administrative action is to be tested by the basis upon which it purports to rest, that basis must
be set forth with such clarity as to be understandable.
Admin 2004
64
1.
f.
-
It will not do for a court to be compelled to guess at the theory underlying the agency’s action; nor
can a court be expected to chisel that which must be precise from what the agency has left vague
and indecisive  The court must know what a decision means before the duty becomes its to
say whether it is right or wrong.
FACTS
i. The SEC had been dealing with the reorganization of a holding company (Federal)  the officers,
directors, and controlling shs of Federal purchased a substantial amount of preferred stock over-thecounter, and under the company’s 4th reorganization plan, the preferred stock was to be converted to
common stock of a new corporation.
ii. On the basis of the purchases of preferred stock, the mgmt would have rec’d more than 10% of the new
common stock
iii. Admitted that the mgmt’s purpose in buying the preferred stock was to protect its interest in the new
company – plain that there was NO fraud or lack of disclosure in making the purchases.
iv. SEC did not agree w/ the 4th Reorganization plan  arguing that Federal’s directors and officers owed a
fiduciary duty NOT to trade in the secs of Federal during the reorganization period.
v. Therefore, the plan was amended to provide that the preferred stock acquired by mgmt (unlike the preferred
stock held by others) was NOT to be converted into new common stock; but to be surrendered for
dividends.
vi. As amended, the SEC approved the plan over the mgmt’s objections
vii. 1st Case:
1. Supreme Court pointed out that courts do not impose upon officers or directors a fiduciary duty to
shareholders, which would preclude them (merely b/c they are officers or directors) from buying
and selling the corporation’s stock.
2. Therefore, the SEC’s application of “court standards” to its decision does not pan out.
3. Neither the SEC nor Congress had promulgated any general rule prohibiting the action; AND the
only judge-made rule dealt with fraud or mismanagement.
viii. After Remand:
1. The surviving corporation (Federal Water) applied to the SEC for approval of an amendment that
would provide for the issuance of the new common stock to Federal’s management that had
bought the old preferred stock.
2. SEC denied the application
3. Court of Appeals  reversed the SEC b/c it felt the Supreme Court’s prior decision precluded the
SEC’s action.
4. Supreme Court  The SEC (the second time) avoided the fatal error of relying on judicial
precedents that do not sustain its decision. Instead, the SEC concluded that the proposed
transaction is inconsistent with several of its other standards, and therefore, by drawing heavily
upon it accumulated experience in dealing with utility reorganization, the SEC expressed its
reasons with clarity and thoroughness that sufficiently support the underlying basis of the
SEC’s order.
DISSENT
o allows agencies to enforce in areas in which they don’t have rules
o unsuspecting members of the public
o Administrative Authoritarianism – allowing executive too much power
K. NLRB v. Wyman Gordon, 394 U.S. 759 (1969). Pg. 358
Class Notes 3/24/04
- adjudications get studied in rulemaking section, but adjudications make rules …
- In adjudications, there is no public input
- the agency’s choice of process is a Chevron-protected aspect of admin law
o if agency decides to use adjudication to make a law, then its entitled to chevron deference
o Q: Is this always true? Can agencies always make rules thru adj.? (bypassing rulemaking rules?)
o IF YES, then why ever have a rulemaking. Why not wait for a time where the issue comes up and
prosecute an entity/company for a rule that has never been articulated and charge them and
thereby create a new rule?
Admin 2004
65
o
-
-
-
Why would an agency choose rulemaking?
 good faith answer: want the public’s input; comments have a value  there is a lot to learn
about what does/does not work in an industry
 Congress has the power to offset a rule (rarely uses this power)
 adjudication is narrow  targets a specific situation and a specific point; and doesn’t
necessarily have legs (although does have a common-law effect, but will be narrowed).
 Rulemaking does not require the agency to become an advocate, whereas adjudication does
 Rulemaking, not limited completely by the record (no evidentiary process). The standard for
judicial review of adjudication is substantial evidence, which is harder than the arbitrary
and capricious standard of rulemaking.
 judicial review of adjudication will be more penetrating
 adjudications get set aside and sent back to the agency WAY more than rulemakings
…
 Why use adjudication?
 direct, clear, and can’t always project in advance how they want to proceed, and
agencies need to be able to control the enterprises that are their responsibility.
 ossification: becomes like bone; frozen; takes years  so adjudication is fast (even
if the agency loses)
3 Cases say that courts are inclined to protect the adjudicatory power of agencies (Chenary, Wyman,
Wyman)
BUT  also involves the issue of fairness
o when adjudication surrounds an action that was ok at the time they did it
W-G  battle of certification status
o challenge to NLRB
 NLRB has promulgated NO rule that says that mgmt has an obligation to turn over a list and
so the mgmt says they don’t have a duty to do this
Basis for bd and union to contend that mgmt at W-G has the duty to turn over the lists?
o In Excelsior (prior case), agency had ordered this to happen
COURT says that the precedent is sufficient basis (therefore like a rule) and therefore a sufficient basis
REMEMBER: that there is a legal basis requirement in rulemaking
COURT says that the NLRB has legal sufficiency
PROBLEM b/c this was not produced in a rulemaking; did not allow an opportunity for parties to be heard
 not that there was something wrong w/ Excelsior as decided, the problem is can you use the
decision in Excelsior as the legal sufficiency in the W-G case
Chenary holds that the basis that the agency states as its legal basis is what the court has to consider  cannot
be something that is made up.
- HELD: the court dodges the basic question. Oversight of elections is important, so the agency needs to be
able to oversee and issue orders (agency cannot oversee prospectively) so the orders are ok . . .
- Does the NLRB have the obligation to oversee a process? YES
- The order stands alone (don’t need Excelsior)
- Can you adjudicate anything you want & what about the problem of retroactivity?
DISSENT
- argues that this rule is prospective. Dissent states that the NLRB is acting on Excelsior and that Excelsior
is not the proper basis and because the rule states that agency action must be considered on the basis
stated by the agency (and that the agency used the basis of excelsior) and therefore that it is not ok.
- Must be tested on what you say you are relying on . . .
- Harlan: says of Excelsior  that its an invalid rule b/c excelsior is limited to its facts, and therefore it
Admin 2004
66
can’t be a basis and if it is the baiss the NLRB used, then it trivializes the APA.
a. NATURE
i. Action to enforce subpoena or to have injunction issued
b. FACTS
i. The NLRB (P) ordered an election among employees of the Wyman-Gordan Company (D), in which the
employees were to choose between 2 unions, or to have no union representation at all.
ii. In order to facilitate campaigning by the unions, the NLRB ordered W-G to furnish each union w/ a list
containing the names and addresses of all W-G employees.
iii. Judicial Relief: When the company ignored this request, as well as a subpoena issued by the NLRB, the
NLRB sought judicial relief (asking for enforcement of its subpoena OR (in the alternative) for an
injunction compelling compliance w/ the NLRB’s order.
c. PROCEDURAL HISTORY
i. District Court  ordered W-G to furnish the employee lists
ii. 1st Circuit Court of Appeals  reversed, holding that the NLRB’s order was grounded on the invalid rule
established in the Excelsior Underwear Case  in which the NLRB had (w/o conducting any type of
rulemaking proceeding) issued a rule of prospective application only, that employers must furnish employee
lists prior to union elections.
iii. Supreme Court  granted certiorari to consider the validity of this rule
d. ISSUE
i. May decisions reached in agency adjudications have the force of rules even though they are not
promulgated pursuant to the rulemaking procedures mandated by the APA?
e. HOLDING
i. NO  In the Excelsior case, the req’ts for a valid adjudication had been met, but since the requisites for
rulemaking had NOT been, the prospective “rule” announced in that case cannot be enforced as a rule at
all.
ii. In the present case, W-G is obligated to furnish the unions w/ employee lists b/c it was ordered to do so in
the course of an adjudicatory proceeding validly conducted by the NLRB.
f. CONCURRENCE (Black)
i. Although this opinion reaches the correct result, it errs in assuming that a proceeding resulting in ONLY a
prospective ruling may not be an adjudication. An agency should be permitted, w/o beginning anew w/ a
rulemaking proceeding, to decide that a decision reached in the course of an adjudication should have
prospective application only.
g. DISSENT (Douglas, J.)
i. The Excelsior “rule” was not a product of a rulemaking as described by the APA. The rulemaking
procedures prescribed by the APA are designed to require agencies to take account of public opinion and
needs, and the NLRB should not be permitted to enforce a “rule” promulgated in derogation of the
procedures mandated by the Act.
h. DISSENT (Harlan, J.)
i. The Excelsior rule, being of prospective application only, was clearly a rule which could have be validly
promulgated only after compliance with the rulemaking provisions of the APA. If the NLRB may apply an
invalid rule in an adjudicatory proceeding, then the APA is w/out any effect.
L. NLRB v. Bell, 416 U.S. 267 (1974). Pg. 363
Single
-
factual question: are buyers employees for purposes of the NLRA?
in the context of an adj, the NLRB decided that buyers are employees (not management)
if employees, therefore, they are entitled to collective bargaining (creating & certifying a union)
MGMT  thought this was insane
COURT OF APPEALS
- sides w/ mgmt, and that this question is VERY important and that it can’t be decided in a single moment –
has an impact on thousands of people
- says undeveloped record, all kinds of facts required, no chance for public imput, there is a need to
formulate NEW POLICY (not case resolution)
- prospective effect of this decision (if becomes a rule) is dramatic  effects tons of people and lots of
money
- HELD: the decision of the NLRB is WRONG and needs to be ventilated in a public forum
Admin 2004
67
SUPREME COURT
- REJECTS argument of appeals court
- a remand on a conflict of interest question & the NLRB’s interpretation of “conflict of interest”  court is
protecting this adjudicatory part
- COURT establishes when it is in an adj that courts should be amenable to rules being announced (since they
can’t be promulgated):
o when generalized standards would not provide the right answer – when need all the facts to get to
the right answer & when in the adjudication all the facts are present
o this is the appropriate setting to do this in an adjudication – b/c better to do this on a case-by-case
basis
o When the complexity and diversity of a problem make it suited only to an adjudication
o PROBLEM: notice denied for everybody as well as to these parties  people that would have
wanted to participate and where closed out b/c this was an adj.
-
End up w/ a general approval of adj – but not very precise b/c remanded on substantive error b/c NLRB had
misinterpreted a long line of cases
Go back and do again  what you say is the decision
Bottom Line Holding: Adjudicating cases can set agency policy
- different than articulating a rule
- adjudication can be more like an interpretive rule – agency is stating what they think
- HERE – think that buyers are employees
2nd  can announce methodology
- ALSO – can announce standards for making that decision in an adjudication – how
agency will decide this issue in the future to certain groups
This occurs all the time
- Are there circumstance when an agencies articulation of a policy in and adjudication will get
rejected???
o not many cases where an agency uses adj and in so doing, produces policy, and a court later says
that they are violating fund due process or the APA
- Ford Motor (1981)  case where the FTC is dealing w/ an unfair practice that had an adverse effect on
consumers concerning repossessing cars when payments have not been made … problem b/c there is a profit
made that is not shared with the people from which the car was repossess
o FTC issued a series of rules in an adjudication against Ford Motor and issued an order (an in the
decision issued a number of rules about repossession)
o 9th Circuit  decide that this is a rule and when you obviously use adjudication to do what is clearly
a rule
 “abuse of discretion” – agency has discretion to choose process (and its protected) but that
the agency abused it here
 Agency not enforcing discrete violation of a policy, instead going after an industry – and
decided this b/c FTC sends out its decision to attorney generals of all 49 states, so in
effect, they gave notice of an outcome as if it had been a rule and disseminated it broadly
so that everyone will understand that this is the law
But, all in all  this is about retroactivity and projecting into the future w/ adjudication
a. NATURE
Admin 2004
68
b.
c.
d.
e.
f.
i. Appeal from decision denying enforcement of order
FACTS
i. Bell Aerospace Company (D) refused to negotiate w/ the elected representatives of a group of buyers,
contending that they were managerial employees outside the scope of the NLRB (P).
ii. The NLRB disagreed, finding the refusal an unfair labor practice.
PROCEDURAL HISTORY
i. Court of Appeals  denied enforcement of the resulting NLRB order, contending in part that although the
NLRB was not precluded from finding the buyers were not managerial employees, b/c of a long line of
precedent to the contrary, it could not do so by adjudication
ii. From the above decision, the NLRB appealed
ISSUE
i. Is it within the NLRB’s discretion to announce new principles either in an adjudicative proceeding or by
resort to the Admin rulemaking process?
HOLDING
i. YES  the NLRB’s decision in this respect is entitled to great weight.
ii. There is nothing that indicates an abuse of discretion in the present case
iii. Concern about adverse consequences are speculative, since the NLRB has not yet finally determined that
buyers are managerial
iv. Adjudication will allow a full and fair consideration of all relevant issues
DISSENT (White, J.)
i. Disagrees with the Court’s holding that managerial employees, as a class, are not w/in the ambit of the
NLRB.
Negotiated Rulemaking (TBA)
Class Notes 3/23/04
- conceptualized in law review articles and then put into place (as a test) and then was put into law in 1996
- §561 – negotiated rulemaking act
o commands for all agencies to consider whether they would be better off negotiating a rule (rather
than promulgating)
o to convene a group that represent the diverse interests in a field; sit around a table; consider all
alternatives; and come up with a solution
- Every agency has to have a negotiated rulemaking committee
o that consider whether a problem is appropriate for negotiation
o Committee is to look at a problem (not a proposed rule)
o For example, when a student is seeking financial aid after the age of 21 . . .
o And then decide whether the problem is suitable for negotiation
o IF YES  then can you identify the interests of who would negotiate the rule (who are the people,
do they have representatives)
o Each person has one vote, including the agency
o Concern: will it balanced? Appropriate number of representatives on both sides
- This does not produce a RULE, but instead  produces a proposed rule (and therefore has a high level of
acceptability
- A Way of getting a better rule that is proposed
- Consensus Requirement
- Discussion of whether unanimity is a requirement
- Process is less adversarily
Judicial Review
- The content of a negotiated rulemaking is non-discoverable
- BUT, the results are not binding on an agency
- Riley  agency decides to do something different
- In deciding that agency is not bound by the decision of the negotiated rulemaking, know that proposed
rules can change
DOWNSIDE
- incredibly dangerous (from anti-trust viewpoint) b/c get competitiors in a rule and its non-disclosable.
Admin 2004
-
69
BUT, to counter, can come up with suggestions that are much more inspired and accurate
Negotiated Rulemaking – 3/29/04
- the whole concept is weird b/c the only place where laws are negotiated are here . . .
- Q: due process question – if a group of people picked & negotiate  then doesn’t present a due
process
o trick: b/c negotiated rulemaking is a predicate to rulemaking  NOT the actually rulemaking. If
successful, it becomes the proposed rule that the agency can then take to the public and upon which
the public may then comment
- negotiated rulemaking = evidence  what’s admissible
o BASIC RULES  things that occur in context of negotiation are confidential and not readily
discoverable. The info can not be something to which the parties will later be held and not truthtested  b/c it is a negotiate
o General Rule: The action of the negotiation is NOT binding on the agency  might be a use of
privatized decision-making but not something the agency is obligated to follow, even in the
proposed rule
o Negotiated rules CAN change after the negotiation comes to an end  so important to remember
what will happen down-the-road (from both evidence & due process standpoint).
o Consider  prof  one of the things that presents the future of administrative practice.
Regulatory functions will beome partnership w/ private sphere – or will be contracted out to the
private sphere.
o Negotiated Rulemaking represents  The most government-esque of gov’t functions – making
regulations
o Negotiated Rulemaking  is the first step towards privatizing rulemaking
6. Agency Control and Delegation
Industrial Union – pre-Chevron decision
- important b/c one cut that can be made is why is there any involvement in this decision is that isn’t this up
to the judgment of the agency
- ONE OPINION  “benezene case”  has been diluted by Chevron – a case where there was no respect for
what the agency had done
- PROF  doesn’t agree – thinks important b/c of what Reinquist says about delegation and non-delegation
o most important (concurring opinion) that Reinquist wrote in this field. His point-of-view is cited
over and over again . . .
o The majority in this case gets used for regulations themselves….. but not cited as often as Reinquist
- Articulation of Non-Regulation – Congress as representative of public has to make the critical decisions
that govern our political and social world
o so, congressional standards must be clear; intelligible, appearance and content of judgement
o cannot give to an agency carte-blance to legislate
o BASE-LINE must be with congress not agencies – w/o the guidance, the agency’s are acting
unlawfully b/c they are legislating
o Constitution states that the power to legislate is vested w/ Congress and if
o Courts are acting unC when they restructure an agency’s decision (Chevron) – when by judicial
review they affirm the action of an agency which is an action that is no more than legislation
o Major attack on the regulatory state – that the role of regulation is a role for Congress
o Debate bwn leg. power vested in Congress & necessary & proper clasue that suggests that Congress
will create a gov’t that will then carry out as is req’d the mandates of the people by Congress
o “necessary & proper”  works to fill in the gaps
o DEBATE 
Admin 2004
70
o
-
 1. notion of power of Congress to make public policy
 2. n&p – suggests that Congress must create gov’t – won’t govern itself
Precise delegation form Congress is NOT the norm  b/c when Congress has a problem to solve, it
is usually not lookoing at something so specific
o
A part of del involves the oversight of congress in not only delegation but the execution of gov’t – how
those that carry out the will of Congress will behave
Assuming Congress has that power in the interstitial power to create leg force w/out precision – IT
CANNOT DO SO W/O RESPONSIBILITY
When Congress puts into play something w/ financial impact – and doesn’t put into play – can end up a
situation like benezine
Chada  case that deals w/ congress coming back and looking at what its done & saying what it likes or
does not like
o set forth a process that made the delegation process less of a problem knew there had to be
vestage of discretion
o so, for congress to take back the activity after it occurs and to change it, can only happen in
rulemaking
What is the essential imprecision that gives rise to this case  what was unclear????
- when this case was decided – seen as a case about cost-benefit analysis
- should legislation be governed by c-b analysis?
- Are the regs balanced against the overall cost? This regulation doesn’t really tell you.
- HOLDING – can Congress use a phrase like “reasonably necessary”? NO
o Court overturned the standard
o 2 justices joining in decision but disagreement over why they are doing what they are doing
o conflict bwn conservative public choice AND liberal
 basic republicanism (reinquist)  policy decisions made by elected reps at a certain level
that decisions are best when they are made after looking at a broad range of trade-offs;
legislatures have to make these choices; so that Congress has to be more precise
 liberal  N&P  Congress as an entity capable of fending for itself (dealing w/ an agency
who has misbehaved).
- Result of this decision  lays ground work for Chevron – an all-out 20-year fight on the exercise of
discretion – how much discretion does an agency have and what level of deference must be given to
the decision of an agency????
- This case – says “not so much” when comes to basic policy questions
- CHEVRON – if Congress is clear, then agency has discretion
o If Congress is not clear, then agency does not have as much discretion
- Critique of this case this decision is hypocritical b/c this decision says that courts are not supposed to
legislate (violation of sep of powers) not supposed to substitute judgment (Vermont yankee) – and that is
exactly what this case is . . .
o “don’t do what I do; do what I say”
When in an agency:
- List from VY of what can attack
- List from Chevron of limitations
Admin 2004



71
A. Industrial Union, 404
FACTS
- Pursuant tot eh Occupational Safety and Health Act, the Secretary of Labor promulgated a safety standard which limited the
exposure of workers to the chemical benzene. Section 6(b)(5) of the Act provided that the Sec “shall set the stnd which most
adequately assures to the extent feasible,” that employees will not suffer harm from exposure to toxic chemicals. American
(P) sought to enjoin the application of the Sec’s standard.
ISSUE
- May Congress delegate to administrative agencies the power to set standards in applying statutory laws w/o specific
legislative guidelines?
HOLDING
- NO  The section of the Act is precatory and gives the Sec no indication where on the continuum of relative safety he
should draw the line.
B. ***Whitman v. American Trucking Association, Asimov Supplement, p.9
- AS LONG AS DELEGATION PROVIDES A SUFFICIENTLY INTELLIGIBLE PRICIPLE, THERE IS
NOTHING UNCONSTITUTIONAL ABOUT IT
- What are the delegation problems in this case?
 what does “requisite” mean – here is a problem of EPA’s interpretation – does it go beyond the limits of
ambiguity; permissible expression after Chevron???
- Q: Whether EPA’s action went beyond the limits of ambiguity – and essentially re-legislate -dealing w/ problem of costs
- Argued that it’s wrong for the EPA to deal w/ the problem of costs
 look at statute – does it provide the power to do “x” – base delegation
 This statute did not delegate from Congress to the agency to consider costs
 Court says that b/c not delegated, that the agency shouldn’t be doing it . . .
- Does this case open the door for the non-delegation argument again? That Reinquist’s view is correct?
That congress should behave like a superagency???
 does NOT hold that the non-delegation doctrine is readily available when there is a challenge to the
precision of agency language – PROF finds this important b/c he thinks this is a reasonable
interpretation of the case, but not what the case has come to mean . . .
 Underlying circuit court opinion held that Congress had not provided sufficient info (non-delegation)
- Whitman, however, thru outcome suggests thtat that is not the bottom line. Who failed to
articulate an intelligible principle in this case (congress or the agency???)
 the agency  the supreme court does not relish revising non-delegation as a ready means of attack
b/c it is a risk for the court to get into non-delegation – not going to state that non-delegation is
the way to go
-
-
suggestion in this case of ageny’s ability to cure the gray zones left by congress – this decision states that
the agency CANNOT do this unless congress delegates the authority to the agency to deal w/ the gray
area
if congress has told the EPA to consider the cost structure, then the EPA could have done it
C. Commodities Futures, 478 U.S. 833 (1986). Pg. 429
-
ISSUE – whether congress can give to the agency the power to deal w/ this issue w/o violating the
Constitution
What is it about Article III courts that make them a better place for dispute resolution??? B/C they
don’t have an interest in the outcome.
Courts, by constitutional mandate, are independent  judges are not beholden to anybody
Court faces the question  is the CFTC a decent place to resolve a dispute like this???
 expertise; history in area; continuity
Admin 2004
72
 classical functionalism – agency doing what it can do best – why worry about sep of powers + the parties
seem to agree that they don’t need to do this in federal court (waiver theory) + some protections (sub.
evidence review that comes out of agency case) and if there is to be an enforcement action, must come
from court not an agency
 Flip Side  this function is supposed to be in federal court –
 IN THIS CASE – functionally speaking, must make some compromises (maybe b/c this is adjudication
instead of rulemaking . . . )
-
When the agency goes beyond de minimus intrusion – this case is not really a threat –
There is a problem if Congress structures an agency to operate like a Court – when it’s a coincidental
operation for an agency to decide de minimus decisions w/in its expertise; its ok.

FACTS
- Schor (P), dissatisfied w/ the performance of certain commodity futures investments he had made, filed an action seeking
reparations w/ the CFTC (D) against Conti (D), a commodities broker. Conti counterclaimed for payment of certain fees.
The CFTC ALJ ruled in Conti’s favor in both complaint and counterclaim.
- Schor appealed, contending that the CFTC had no jxd to enteretain common law counterclaims
- Court of Appeals  dismissed the counterclaim, holding that the CFTC lacked jxd.



SUPREME COURT
ISSUE  Is the adjudication of common law counterclaims by the CFTC unconstitutional?
HOLDING
- NO, not unconstitutional
1. CFTC considers such jxd to be valid and the views of an admin agency towards matters germane to it
are given great weight
2. Does not violate Article III  which is meant to ensure a free and independent judiciary.
Main Question: Whether the delegation tends to encroach on the essential attributes of judicial power?
- HERE, it does not b/c only a particularized area of law is implicated here – the CFTC has not been given braod power to
adjudicate common law cases.
- ALSO  decisions of the CFTC ALJ are subject to de novo review.
- AND  the level of review – weight of the evidence” – is not excessively deferential
- Therefore, the enabling statute has not expanded the power of the legislature or executive at the expense of the judiciary and,
therefore, was valid.

D. Chadha, 441
3/31/04 Class Notes
- general problem: How does Congress control agencies
 relationship bwn Congress and the President – power struggle
- delegation is the obvious methodology that congress uses to control the action of the president
- Chada is about how Congress goes about the business of control
- Q: legislative veto
- Petitioner – comes to US legally, gets a VISA, VISA expires but he doesn’t leave. INS issues a show-cause
order that states that they will deport him unless he can show why he should not be deported
 this is a non-discretionary act
- Chada has options:
 leave peacefully
 go into hiding
 ask for a hearing – formal, Goldberg-like hearing
E. Morrison, 478
Question  power of the executive
- reality that things are never truly separate
- Ethics in Gov’t Act and function of the Special Prosecutor – Atty General has the power to appoint a
Admin 2004
-
73
Special Prosecutor
Q: Who investigates the executive
ICA calls into action the judiciary, congress, and executive to perform a particular task – and if so – then
plops out a person who is separate of all of the branches but somehow beholden to each branch.
Justice Jackson – says that the problem w/ presidenetial investigations is that investigators get too
involved
Morrisan says that the problem about SI when investigating the executive is that they are not quite willing
to acknowledge when its over (that they will face pressure to continue and too strong to resist)
To fire the independent counsel, is to declare defeat (on the part of the executive – i.e., if Clinton had
ordered Reno to fire Starr – he would have looked guilty to the public).
This Case:
- Appointsments Clause says that the Pres. appoints, but that Congress by law, may vest the appointment of
inferior officers as they deem proper. Art. II § 2
- Some exceptions for inferior officers
- Morrison becomes the foundation for the whole investigation and civil cases that occurred for Clinton
F.
-
Clinton v. City of New York, (supplement) 524 U.S. 417
basic case on line-item veto
Clinton  executive power that is clipped
Chada – congressional power is clipped
Morrison – all branches of gov’t being woven together and cast
Corut  says the president doesn’t have the power to amend or edit legislation.
Breyer  thinks this decision is bad from a functional standpoint.
Question of Standing
- general rule in admins law that standing is not a big problem
- from ConLaw, taxpayer standing has always been a problem (not easy – but not an admin law problem). Idea
that a person’s investment in society by the virtue of the fact that they pay taxes is not a basis for the
person to challenge the gov’t
- Similarly, challenges by members of Congress of agency decisions (the executive) simply b/c they are
members of Congress are ones for which standing has been a problem
- Most agency cases that get into court don’t raise any of these issues b/c they are there for purposes of
judicial review for which standing is already decided by the statutes
- When in court for an agency issue, usually means that you’ve already been a party at the agency level (i.e.,
adjudication) – rulemaking, the route to appeal is well established in the statute
- Standing becomes an issue when the challenge is NOT when agency failed to get enough – claim that
that which the agency has done has caused a civil harm  i.e., §1983 cases. What the agency did
harmed the client. This is not a case for judicial review. For these cases, you are in district court (not
appellate) b/c not an appeal. For these cases, you must establish standing.
This Case  highly complex standing case
- objective req’ts that court sets are necessary b/c there is a political response that happens in every staff
for every member of Congress when something doesn’t go their way
- They decide to sue b/c the statute that set out line-item veto, anticipated the standing problem and said it
was challengable assuming you have injured persons that go beyond members of Congress.
- This case  one in which the new statute that allowed for line-item
- Can Congress create a basis for standing for federal court standing just b/c it wants to????? (gets into sep
of powers issues)
 YES – Congress can pass laws that expand the jxd of the federal courts; would they want to? NO;
Admin 2004
74
have they? NO
-
Supreme Court has been critical of this methodology b/c they don’t want to be told when the courts have
standing
For standing req’ts here are tough
Breyer’s Critique  that the opinion of the point from a formalist standpoint is correct, except when
dealing w/ issues of budget
G. FDA v. Brown and Williamson, (supplement) 120 S. Ct. 1291
4/5/04
Deference & Delegation  when is a power appropriately delegation and what is the connection between a
meaningful delegation and how does that affect deference.
not necessarily a cornerstone of Ad Law, but a case study that courts have accdept
When an agency, by its own action, appears to exp[and its authority, it will attempt more strict judicial
review  as a matter of lit strategy, that to attack it, argue that the action is an expansion of delgated
authority (which violates separation of powers)
- Delegation establishes parameters
- If the argument is made successfully that agencies are expanding authority, then will likely win
This case:
- From the FDA’s standpoint, thought they were dealing w/ solid components of establisehed authority
(public health, drugs and delivery devices  well established)
- Industry argues that the FDA does not have authority and just b/c agency declares it has authority does
not mean that it does have authority.
-
-
-
-
-
Q: Did Congress say explicitly that cigarettes/tobacco registration is something that the FDA is not
supposed to touch????
 If not the FDA, who has authority over cig/tob???? Congress declares that it has authority over
this.
 FTC has had authority over tobacco since the ‘60s  consumer protection law that delegates to
FTC
(i) its this law that the industry argues creates exclusivity
HELD (in terms of Chevron) 
 delegations that are ambiguous
(a) if legislation creates an ambiguity and the reg that the agency produces creates ambiguity, if
what they do is reasonable, then their judgment is entitled to deference
(b) ambiguous public health regulation HERE, so the agency acted reasonably so the agency
 legislation unambiguous  to what extent is the action entitled to deference
(a) does NOT get deference b/c what counts for deference is the intent of congress (if clear
what congress intended, then the act of the executive (if not consistent w/ intent, then a
violation of sep of powers).
Q: Is it really unambiguous that Congress decides that tobacco is out of the scope of the FDA
Court  says that there is no question that Congress has said that FDA should NOT be doing this despite
the FDA’s arguments
 Therefore, they are in Chevron I  if unambig, do not go to Chevron II
(a) Chevron I (by saying unambiguous) ends the debate.
Q: How much power is really reserved for the courts????
 Popper  shows tremendous power of the courts. If a court wants to avoid a question, courts have
Admin 2004
-
the power to do so.
COURT  declared the legislation unambiguous and then could go forward
-
Next § -- Judicial Review – courts have numerous ways
75
7. Judicial Review
A. Universal Camera, 340 U.S. 474 (1951). pg. 536
4/5/04 Class Notes
Judicial Review  looking more broadly at the role of federal courts and the types of issues that get
litigated.
Basic Principles that dominate modern admin law:
- Agency decision is tested based on the explanation the agency provides for its action
 in order to get clarity thru judicial action, cannot be making things up after the fact
- The record is as important as the rule  the record gives the process legitimacy
 public willingness to regulation relies on good-faith
 the nature of the review varies on what the agency does
 adjudication – substantial evidence test
 rulemaking – process based test
-
Universal Camera  battle over reinstatement order
On Appeal  this case is one of the central cases in Ad Law b/c
Q: What is the standard by which the Board can review the evidence?
-
Frankfurter  example, a record w/ 5 docs in it. One shows employee fired for stealing, another shows
that the employee criminaly threatened the employer. But, the other 3 docs show that the employer has a
significantly impaired judgment; charged and convicted of assault and battery and convicted of securities
fraud
 If agency decides on the 2 docs, then what is the court supposed to do w/ the other 3 docs???
 Substantial Evidence Test – So, does the court look at the substantial evidence that the agency
cites OR look at all of the evidence?
 Courts should look at ALL of the evidence!!!!!!
-
Circumstance in which the agency ignored 3 docs, and favored 2 docs  what should a reviewing court
do???
Q: Priorities/Preferences for different types:
- credibility – who is lying – the person who hears first has a better window into the veracity than the court
- interpretive matter – decision of initial hearing officer is not necessarily the one upon which to rely
- meaning of the law question – the courts are best suited to decide
- End up w/ a mixed system of preference for evidence that emerges from this case.
This is a Chevron/Deference Problem
B. Connecticut State Medical v. CT Board of Examiners, 546 A.2d 830 (1988). pg. 558
- When people look at this cast  most think “what happened to Chevron, Yankee, Overton Park, and
expertise in general”
- Is this just an anomaly or is there another way to explain it?
Admin 2004
-
76
Case: What gets deference in judicial review?
market theory  explains the attack and should explain the judicial theory taking a hard line
 doctors (AMA) attacks/challenges the decision of the podiatrists
 the doctors (their market position) would like to keep the podiatrists as far down the ladder as
possible  doctors don’t want competition from podiatrists
 this is a market protecting use of the administrative process
3 or 4 ways Post Chevron that courts use to not give deference: [important for exam!]
(1) Declare that the legislation is unambiguous (Brown and Williamson)
a. owe no deference
b. something as clear as “tolerance levels for a toxin environment” – but circumstances
change/the environment changes – so even a number is not unambiguous
(2) Make
a.
b.
c.
d.
e.
f.
the Universe Camera Argument – this is not about Chevron, this is purely about law
this is a question of law, not fact or expertise
law is best interpreted by courts
fact (demeanor)  must give preference to person who watches the person testify
policy – give deference to agency (handles policy)
law – for courts b/c they do it best
“This is an interpretation of law separated from fact” and therefore does not fall w/in
Chevron –
(3) Concede that you are dealing w/ an ambiguity – the statute is NOT unambiguous – then argue
that the decision is arbitrary or random – does NOT meet Chevron II
a. doesn’t survive based on time-tested analytical methods
b. doesn’t survive precedent
c. argue that there are time-tested things the agency has relied on over the years and that the
agency is not following that now
i. Chevron I – Is it ambiguous???
1. If not, then gets deference
2. If ambiguous, go to Chevron II
ii. Chevron II (if ambiguous) – Is the agency’s interpretation reasonable???? Even if
the court doesn’t agree w/ it, as long as the decision is reasonable, then the court
must give deference.
1. Counterargument  that the decision is random/unreasonable
(4) The
a.
b.
c.
d.
e.
legislature did not intend for the agency to have discretion in this area.
delegation questions
what the empowerment of the agency is – what power was it given
if this argument is successful, then it is unbeatable
matter of overall legislative intent to the agency
agency is NOT a policy-making entity – agency is NOT supposed to be making public policy
FACTS of CT State Medical
- FN  anytime an agency expands its authority, that agency is in trouble (Brown v. Williamson)
 It’s one thing to be w/in the parameters of the legislation, but another thing when the agency
moves into a whole new area
 Brown  argued not a new area
Admin 2004
-
-
77
Legitimate Argument – b/c when an agency expands its jxd, it is legislating
 an agency can “make” law, but should not legislate
Trial Court  ankle is NOT part of the foot
Appellate Court  affirms Trial Court
Statute  podiatrity is diagnosis & treatment of foot problems
 Is meaning of “foot” a question of fact or law?
(a) law – if yes, then the court need not give deference to the agency
(b) fact – goes to expertise of agency & deference comes back into question
(c) COURT  decisional preference for factual deference to go to agency (universal camera)
(i) it depends on whether you are interpreting the statute (if you are interpreting a statute,
then you are dealing w/ a question of law)

When is an agency’s legal interpretation of a component of a statute given deference?
(a) COURT  when its been subjected to judicial scrutiny before (already giving decisional
preference to the court).

What about deferring to agency for its expertise? (Chenery)
(a) COURT  only a rationale if its been a practice over a period of time
(b) If agency has expertise and its time-tested and have shown up in previous cases, then they do
have expertise
(c) This is not a matter of “feet” but a matter of statutory construction – agencies do not have
expertise in statutory construction, the courts do
(d) When interpreting statutory construction, preference goes to the court

What about legislative history?
(a) COURT  it’s not conclusive; its almost not admissible
(b) Why wouldn’t it be conclusive or admissible? You cannot cross-examine legislative history. It’s
unexaminable hearsay – so if it is the foundation of a trial, then you can question it.
(c) Legislative history is a matter of evidence – and can be treated as evidence and therefore
questioned.
This case is Brown v. Williamson is a
 agency expanding jxd and then asking for deference
 Court does not always give deference especially when engaging in the arrogance of expanding own
authority.
C. Chevron, 560 (review)
- Question of judgment – who’s decision gets respected is an important theme in judicial review
- Ambiguity Problem (Popper)
 One Theory/Approach: keep in mind that APA struction that is in place for Chevron is a way of
explaining the entire decision  there is one theory that all the hooplaw over Chevron is
unnecessary b/c the APA says that the level for deference is arbitrary & capricious  which must
mean that you would defer to an agency if the agency makes sense . . .
(a) most statutes of necessity have ambiguity and when agency’s do the task of making rules, they
must be given space to use their judgment, given an opportunioty to surivive – if use substantial
evidence level, then agencies will not be able to function – so arbitrary & capricious is a much
lower standard so that the agency will be supported
(b) so giving “deference” – is only giving a label to the APA – not giving anything new.
 Problem that Chevron deals w/ that is different than the APA – problem of multiple, conflicting
policies & values
Admin 2004
78


(a) the APA never dealt w/ this in an effective way
(b) US v Shimmer – talks about the power of the courts
(c) the value construct of Chevron is the contrast of an appellate court’s view/value strucuture &
the executive
(i) i.e., Court thinks clean air act means clean up air
(ii) agency – means don’t give out permits to those who won’t clean up air quality
(iii) Supreme Court  decides that the agency’s values are the ones that matter  doesn’t
matter what the court thinks because the agency’s view was rationale
(d) fluidity of the political process (not discussed in the APA) – but is touched upon in Chevron
(i) an election counts – a president cannot be paralyzed by the inability to act
(ii) so, there is a value to this – allows the executive to act
(iii) but cannot change the rules in major industries every 4 years (so there must be some
continuity) – Chevron agrees w/ this but also knows that rules are not carved in stone
Important in terms of Executive Power & Executive Authority
It’s a rulemaking; NOT an adjudication – and even though the 2 can seem similar – Chevron was
written for a rulemaking – rulemakings do have the force of law (different than interpretations)
D. United States v. Mead, Asimov Supplement, p. 25
- qualifies & limits Chevron –-> if Congress clearly delegates authority to an agency that gives agency the
power to make rules that carry the force of law, Chevron applies (pristine rulemaking!)
- BUT  pristine rulemaking is becoming uncommon – expensive, unruly, and ossifying (turns the process into
bone)
- NOT appropriate to use mead when there has been a classically-constructed rule (notice, comment, etc.)
- Q: When doesn’t Chevron apply??? (this case is about getting around Chevron)
- 1. de novo review – established by statute – then the legislature did NOT intend Chevron deference –
judiciary has already been given the power to question what the agency did.
- 2. If action of the agency is a simple observation (does to dispose of a problem of a single person) then
even if its rule-like, it does NOT get Chevron deference (b/c more like adjudicatory)
- If the public is unlikely to see what the agency does as something designed to be relied on, Mead
says public is problaby right  don’t want to give too much power to the executive
- What happens when you are not looking at a pristing rulemaking that is a consequence of rulemaking
authority – can the court ignore what the agency did?
 NO - -mead says go back to Skidmore v. Swift – agency always gets some level of respect
 Scalia – thinks this sliding scale respect is bad – thinks it’s like a grade – if it gets a “D,” then gets
no respect, but if instead, it gets an “A” – it gets a greater level of respect
Messages from MEAD 
- Congress should be more clear (not great) in defining those areas to which the agency should be given
deference – b/c deference will only be giving when Congress
- Agencies, you’ve become lazy – you may think rulemaking is ossifying, but that is the way you should make
rules – don’t hide policy in adjudications or interpretations
- Hard Look is important – means looking at what agency does and then acting on it
FACTS
- customs letter that declares taxable things
- Does the customs letter get deference???
- Issues thousands of the ruling letters a year – which are subject to review, and the process ends up in
court
- The agency does not bind itself by these letters – individual rulings are not something on which others may
rely
Admin 2004
-
79
These are individual case rulings that are not designed to have precedential value.
MEAD (learnable propositions)
- When you get Skidmore respect, when you get Chevron deference
- The statute gives the US Customs Service the right to issue these letters . . . so, why couldn’t these
parties rely on this decision – why was this an unreliable outcome?
4/12/04
Deference:
authority of courts to change what agencies do, when can they be changed?, etc.
In context: assume rep an indiv who has significant dealings with the gov’t, and you
follow revenue rulings closely, and if they can change not by the agency but by
the court, will that change your strategy? (advertising, etc)
o
Decisions that will cost billions of $ to change if they do change and then the Ct
changes that decision, and your investment is wrong, does it mean you have wait for
final jud review before you can rely on the decision of the agency?
What are the courts doing changing these decisions when the role of the agency is
defined? This is a tough questions
Reasons
o
Decisional deference in Chevron is not as strong as it may have appeared in the
outset
o
These weren’t supposed to be policy decisions, not intended to be precendetial, so
argument of the public relying on them is not as strong
Stat structure itself is problematic, the fact that you have review built in, means
that the Chevron shield is not as strong
Unleashes a torrent of literature and Scalia's dissent
o
Heart of his dissent:
(1)
the notion of the quality of decision to the deference in balance of
power between ct and agencies,. There are decisions given to agency bec of
structure of gov’t, idea of them given mere deference, seem wrong to
Scalia
(2)
opinion does not give credit to level of decision
•
the higher the level of the decision, the more respectable it is
•
idea of these being overturned or not entitled deference is a big
mistake
what to do with indiv adj of private rights?
o
Less likely to be entitled to deference [NOTE 1]
Setting aside decision bec of subs Є bec they are adj is a real
problem
Motor Vehicle (p 592)
 very much like Mead in the sense of deference, like Univ Camera and Overton Park
o all seem to say the same thing: that agencies have an obligation to get it
right, and in absence of well formulated decision they run the risk of having
the decision set aside
o punishment a court has a range to set aside the not the normal way to think
ofdecision of the agency what agencies do, not in the mentality of the
Chevron case
- procedure here is of consequence
 Action that prompts the decision: rescission of a regulation
- If the rescission had been characterized as inaction, do you have a diff outcome?
Diff between rescission and inaction by the agency
- This wasn’t just a decision, that they would not longer apply the decision, they
went further, and initiated a procedure,
- Agency coming out having a proceeding, and saying that the current rule is a bad
idea, and rescind the rule,
o
Let the public know where the agency stands
o
Not just the act of prosecutorial discretion
Admin 2004
80
Why brought by insurance Cos?
o
They were getting insurance claims, and wanted to have different standards,
o
If the rules are in place, then the number of people getting in accidents goes
down
Between 1970 and 85 there is a continual process of hearings on this matter
o
Rules in place were contradictory, but mostly set up targets on years down the
road what had to be in cars
The basic rationale for this decision?
o
Seat belts were ineffective, and would not need the safety standards they
needed to meet
Costing $ without the benefits
o
Cost/benefit question, need at least 13% increase in safety to justify the
cost,
o
So rescind the reg
It is NOT agency inaction, so it is reviewable
o
Agencies are not free to change reg policies
Chevron, agencies have to be free to make changes, is that inconsistent with
this?
o
You have to provide a decision based on a record that supports the outcome
o
The problem was not a denial of political power, but when they do, they have to
set out with level of sufficiency what they are doing
rescinding a rule in NO diff than making a rule, the same standards apply
o
Since this I a rule the std of review if “arbitrary capricious”
o
Assessment of alternatives: if you do something along these lines with
significant repercussions on the public, we are not saying you have consider all
alternatives, you have to provide a decision with a developed record, it is owed if
you want respect or deference to the decision
o
Does it mean that rulemaking has a correlation requirement (promulgate/rescind
a rule only in the record there is support, and can correlate it)?
No, You cannot decide if a decision is arbitrary unless you look at record
It does not mean that an agency will be tested using a correlation required in
rulemaking as in adj
Is does mean that there has to be a record supp,
and that it is reasonable,
The record has to support the conclusion
Does NOT mean that the info has to come from public
submittals, that is where correlation ends
The specific decision to rescind, in the end has no other support, other than
the political reason to de- regulate
What factors in this decision make it arbitrary?
SET STAND TO ARBITRARYNESS LOOK FOR IT IN CASE, IMPT!
o
If Congress says to consider certain factors, you have to do so
o
Agency did not consider important options
o
What they have cited is not consistent with what they have on their record
Bowen
-
-
(p 632)
a case that raises the problem: preclusion of jud review
basic requirements of when is review permissible, and when it is precluded
Jud review is presumptive:
Set aside only when:
(3)
by statute
(4)
by agency action committed to agency discretion by
law
agency action is generally not reviewable b/c it is purely fact, the agency knows
more
diff from the way benefits are regulated
here: funds to aliphatic physicians v. regular physicians
Part A administration: gov’t, generally reviewable,
Part B administration: insurance carriers,
Admin 2004
-
-
-
-
81
Jud review under A established by statute
B is silent on review
 This silence that the gov’t contends which constitutes the basis for the
preclusion arg
 If gov’t had intended review, it would have said so like in A
 Silence means no jud review, nothing to apply, no legal std, so nothing to
review, just a fact question
 Jud background under B, Amount determinations are not under jud review The
whole idea of part B is to take out some of the costs out
Gov’t arg:
 Clear and convincing Є that Congress intended to block review, assumption is
that agencies have
 Imply preclusion
 Congress says nothing of jud review
 Gov’t arg is WRONG: When Congress is silent, there IS jud review
The real reason why review takes place though is
 The method (scheme) is being reviewed here will NOT get reviewedo
Just money
better change to GETo
Scheme decision is made review. No longer up to
Congress, reviewing ITS scheme
 Challenging the regulation, not anyone determination
 By attacking the reg generally, the petitioners get to go to court
This case: Basic position on jud review
Heckler (p 638)
- agency discretion which is un-reviewable because “it is committed to agency
discretion by law”
- prisoner committed to death claims that the drugs used for capital punishment
violated the FDCA as “safe and effective” and complained to the FDA
- the FDA Commissioner refused, claimed a different construction of the law, and also
relied on his discretion not to enforce when there is no serious danger to the
public health or scheme to defraud
- Lower court: FDA’s refusal was reviewable and abuse of discretion
- Sup Ct:
 Before anyone adversely affected by agency action can ask for review of such
action, they have to make sure the action does not fall under those which are
not reviewable under APA §701(a), where:
(1) statutes preclude judicial review; or
(2) agency action is committed to agency discretionby law
 FDA claims action in this case falls under §701(a)(2)
 In Overton the Ct said the diff between (a)(1) and (a)(2) is that
(a)(1) Congress expresses intent to preclude jud review; but in
(a)(2) applies even when Congress has not precluded it, but there is no
standard to review against
 THIS Ct disagrees with “narrow construction” of (a)(2), which required a
presumption of reviewability
 In this case there is no affirmative act of approval, so there can be no
presumption of judicial review
 Jud review a decision not to prosecute or enforce is unsuitable bec such a
decision involves:
1. Balancing of factors which are within the agency’s expertise (the
agency is better equipped to deal with the ordering of its
priorities)
2. Agencies do not usually act in areas that the courts protect, so
when it does act, its actions are at least reviewable to see if it
exceeded its statutory powers
3. Also, decision not to enforce is comparable to decision not to
indict by the prosecutor, in that it is an executive charged by the
Admin 2004
-
-
82
Constitution
4. The agency’s decision not to take enforcement should be presumed
immune from jud review under (a)(2)
•
Presumptively unreviewable, if there is a substantive statute
with guidelines for the agency then the presumption is rebutted
•
Congress did not set agencies free to disregard legislative
direction in the stat scheme
(a)(2) remains narrow, but included are the agency’s decision not the institute
investigative or enforcement proceedings, unless Congress indicated otherwise (to
decide whether agency action is reviewable)
Class Notes:
 Prisoners set to death by legal injection, they complain that the FDA should not
allow the product used to kill them
 The FDA decides it will not look into it at all, that this is not a matter for
them, they have not done anything that justifies an FDA proceeding, unless
“serious danger to the public health or scheme to defraud”, it will not look
into it
 Petitioners say that without an FDA decision they have no place to go, so they
want the FDA to act,
 FDA says they do not have to act, nothing requires action
o
Problem: jud precluded, if state precludes it or agency action committed to
agency distinction
o
FDA says not acting is prosecutorial discretion
o
What do you do when agency decides not to act?
WILL FINISH NEXT CLASS
E. Heckler, 638
Class Notes 4/14/04
(1)
What is the point of barring review? What is achieved when you bar review???
(2)
(3)
Standing  what is the point of this lawsuit. If the P wins, does the P actually get what the P is
complaining about? Often, then answer is NO
If the parties that are in court that would win, could not get a remedy that addresses the
wrong, then there is no standing. See Art. III, § 2.
1. i.e., taxpayer suits  just b/c someone pays taxes, does not mean that he/she has
standing to bring suit.
Heckler  dealing w/ a drug used for legal injections
(1)
FDA  business is to deal w/ products that put the public at risk
(2)
Commissioner – wrote that if there is a serious danger to public health or a scheme to defraud
the public, they would be compelled to act.
(3)
ISSUE  A drug that is not labeled properly is being used as a lethal injection, is this a danger
to public health?
(4)
Executed people for crimes are not the public (at least in terms that the FDA views the public).
(5)
ISSUE  The extent to which determinations by the FDA not to exercise its enforcement
authority over the use of drugs in interstate commerce may be judicially reviewed?
(6)
Argument:
ii. The extent to which the stmt by the FDA is a policy stmt? Prof  this is a policy stmt on
enforcement so not reviewable . . .
(7)
By the FDA choosing not to act, argument is that it prohibited the Petitioners from getting
access to court. W/O a final decision by the FDA, they could not go to court.
(8)
Supreme Court in Dunlop, held that this is a situation where the agency should be compelled
to act.
Admin 2004
83
1.
Problem  there were other methods of review regarding execution – in fact, legally
mandated other options
2. Dunlop arguments do NOT work when there are other means available
Q: § 553(e) PETITION of the APA  (pg. 717)  “Each agency shall give an interested person the right to
petition for the issueance, amendment or repeal of a rule”
1. Argument: § 553(e) – explicitly the “right to petition” – difficult to compel the gov’t
to act, but can go to court and compel an agency to act.
a. UNDER §553(e)  CAN PETITION FOR AGENCY ACTION
2. § 555(e)  “Prompt notice shall be given of the denial in whole or in part of a
written application, petition, or other request of an interest person made in
connection w/ any agency proceeding.
b. UNDER §555(e)  AGENCY MUST RESPOND
(1)
HERE  agency said that it didn’t want to respond to the petition, but under 553(e), says they
must respond . . . why did this fail in this case????
1. Why did the 553(e) petition fail???
2. A: If anytime you want to challenge an action of gov’t, the only thing would have to
do is file a 553(e) petition and the agency would be compelled to respond
substantively (which puts it on the record) and therefore would be judicially
reviewable.
3. Cannot apply 553(e) broadly!!!!!  would clog up courts, etc.
(2)
Basic APA and judicial review
iii. Conflict bwn 706 & 701
1. 706  lists the bases for setting aside the decision of an agency
a. 706(a) arbitrary, capricious, an abuse of discretion, or otherwise not
in accordance of law
2. 701  get judicial review is precluded by 2 acts:
a. statutes preclude judicial review, or
b. agency action is committed to agency discretion by law.
3. If review is precluded by 701, then how do you get to 706???
iv. How does this case resolve the conflict? When is agency action committed to agency
discretion by law????
1. This Case  If the statute has guidelines for the agency to follow, then the agency
acts of discretion w/in those guidelines IS reviewable which emanates from § 702
(Right of Review)
v. If you are aggrieved by a discretionary act???? One approach, if there are statutory
standards that guide an agency, then the agency must live inside those guidelines and
therefore somewhere the agency can look to see if the agency has complied w/ the
guidelines
vi. If Congress has established clear standards, then agency must abide by them
vii. When is an action of an agency NON-REVIEWABLE??? (WHAT THIS CASE IS KNOWN
FOR)
There is no law to apply
(1)
If there is no law to apply to the agency discretion, then there is no standard by which to judge
the agency discretion
(2)
Agency action is committed to agency discretion by law when there is no law
1. When Congress has sent NO guidance
(3)
PROBLEMS:
Admin 2004
84
(4)
(5)
(6)
(7)
2. If agency is just out there, no statutes, no guidance, then major problem b/c
agencies can do whatever they want.
CASE LAW – ideas of “agency action committed to agency discretion by law” is a narrow
exception!
“Agency action committed to agency discretion by law” is an interpretation  This case 
interpretation  if there are no guidelines at all
Court says that agency inaction doesn’t deny a liberty property or interest.
Marshall’s opinion in this case  agency exercise of prosecutorial discretion is not normal
prosecutorial discretion.
1. When dealing w/ criminal case & victim and the state decides not to act, protected
by prosecutorial discretion and the angered party is likely to be the victim of a
crime. Crimes, historically, are private events.
2. Marshall says that administrative law is public – the client is the public – the
goal of the agency is the public. Therefore, if the agency decides not to get
involved when there is a chemical spill, the person is not necessarily asking for just
themselves. If the agency decides not to act, the person has nowhere else to go
(unlike in criminal, where person can bring a tort suit).
3. Marshall  there out to be a way that forces agencies to explain by clear and
convincing evidence that their inaction is justified.
Exhaustion – Darby – court said that exhaustion is not a jxd req’t for getting into court – instead, that it is a
prudential req’t (part of good judgment).
(1)
exists so that agencies can correct their own mistakes – decisions by agency officers are often
changes
(2)
also allows for the expression and vindication of rights for people who do not have access to
federal courts.
(3)
Argument: To be a party in front of an administrative agency, requires an expression of
interest and an assurance that you are not duplicating
(4)
To be a party in an Art. III court, however, requires much more – i.e., standing, etc.
(5)
So, exhaustion at the agency level gives a voice to many interests and individuals that would not
have a voice
EXCEPTIONS TO EXHAUSTION RULE
(1)
Series of exhaustions developed in the common law of admin law that deal w/ the futility of
going to the agency
1. UTILITY EXCEPTIONS
2. the delay of going thru the process would only make judicial review meaningless . . .
3. i.e., Howard Stern & FCC
4. There are circumstances where a constitutional right is implicated b/c the time
involved precludes the judicial review from having any effect
5. Can argue a long line of consistent agency action . . . . and the agency always does the
same thing, and it will take 2 years and will cost client . . .
(2)
IF THE AGENCY HAS DEMONSTRATED BIAS – NOT A FAIR FORUM
6. If you can show agency has not heard cases fairly, or not treated people fairly
Admin 2004
85
3 PRONG TEST FOR EXHAUSTION
1. hardship/extent of injury if forced to stay at the agency
2. looking at clarity or doubt of agency’s jxd – if extremely clear that agency does not have jxd,
the equity does not compel you to be there
3. The need to allow for the expression of agency expertise
Exhaustion of Remedies requirement is IMPORTANT b/c if your client’s interests will be better represented in court or if the
agency is strongly against your client’s interests, then important to remember . . .
Another doctrine that can effect
PRIMARY JXD  a vast, old admin law doctrine
(1)
tied up in the notion that there are certina things as a matter of common sense should go first at the agency level
(2)
I.E, if agency has ability to grant immunity for a certain act, the agency HAS to do this before it can go to court,
but need a record in court
(3)
PRIMARY JXD – is not a jxd req’t, it not constitutional req’t, its prudential
(4)
Arguments about this
7. Usually arguments by agencies – “We need to decide this first”
8. Legal equivalent of etiquette
(5)
Boil down to a question of protocol and necessity
9. To go to court, must have an agency record
10. Agency needs an opportunity to develop a record in the field (needs a shot at this)
(6)
4/19/04  Classnotes
(7)
primary jxd  can easily find caselaw where primary jxd is a factual matter, can find courts
saying that it must be developed further
(8)
the order of events in which cases are decided  need a better record (which can be developed
at the agency level)
(9)
Isn’t some factual matters primarily legal? YES  example from Popper  Ralph Nadar
bumping cases. Nadar got ticket on Rabbi and has a reserved seat and gets bumped. Instead of
taking this and getting a free ticket on the next plane. He files a lawsuit, claiming fraud  that
overbooking is a deceptive practice
11. Primary Case  whether these events constitute fraud  Court says that the
question of “what is fraud” is a legal question
12. Dep’t of Transportation argued that it is a factual question
13. Bottom Line: Assume the typical overbooking scenario  is this a fraud/deceptive
practice/something that was actionable
14. example of the “end” of primary jxd
(10)
These theories  are disaggregated for study purposes: exhaustion, ripeness, standing, etc. . . .
(11)
Limitations on jxd of the federal courts  in Ad Law, this is an illusion. These 5 factors
become completely interwoven arguments  when get a question like this on the BAR, will see
that these factors are not completely separate from the rest.
(12)
Important to understand protective jurisdiction  protecting the federal courts from:
(13)
Overload  fed courts are not set up to be the primary source for resolution of suits
viii. people appointed for life
ix. federal courts were not intended for general dispute resolution (that was intended to
happen on the state level)
x. by default, thru history, there is no place else for people to go  Congress is not acting,
States are not adequate to act on inter-State actions
(14)
Separation of Powers
xi. standing, ripeness, finality, exhaustion, primary jurisdiction
xii. studying sep of power  who makes policy decisions? (Congress-federal; legislature-state)
xiii. APA – says that an agreived party has a right to pursue judicial review. JR of a federal
Admin 2004
86
decision is not something to check the policy  its intended to check for mistakes, laziness,
etc. APA intends for something to be remanded to the agency – not the court deciding what
to do
xiv. intended to be oversight – not policy making – only oversight as a check on the
executive
xv. courts have a role – to (at state level) determine legal right; federal level  the role is not
as ex
xvi. These doctrines are ways of pulling back  disengaging the courts!
(15)
(16)
(17)
(18)
(19)
(20)
(21)
(22)
(23)
(24)
(25)
(26)
(27)
Standing  the heart and soul of jxd litigation (unlike the 4 doctrines that follow, standing has
a solid constitutional foundation in Art. III, which requires a “case and controversy”)
Idea that you have the “right” litigant that has experienced a federal injury (the claim of
injury derives from a statute). Person needs to be injured by something stated in a statute
After standing, idea that there has to be a nexus between the harm alleged by the gov’t (injury)
and the interest of the Plaintiff  injury must be connected to the act of the Defendant. (Why
would people sue the gov’t  why are there standing problems? B/C the gov’t has MONEY and
the gov’t is AVAILABLE).
1. Purpose behind these doctrines are to separate out the cases that are a genuine
concern but that do not have a nexus to the gov’t entity
STANDING  When there is a lawsuit, the idea that the suit must make sense, brings us
almost appropriately into court so long as the lawsuit is worth your time (worthwhile).
REMEDY  the remedy itself must be a meaningful remedy
2. doesn’t really blossom until Simon
3. Simon raises the question of whether the remedy will satisfy why the litigatnts have
brought the suit to court
4. How does this get implemented???
Standing starts well before the APA  with an expection in aPA that the courts are there to
patrol against executive excess  which is a dangerous proposition – b/c shouldn’t be the case
that any citizen could challenge any gov’t action b/c they disagree – b/c then any citizen would
have standing whenever gov’t acts
Judicial Review  the first cases acted to limit people from bringing just any case
Early staining law  person bringing suit had to be someone so carefuylly defined in the statute
that it was completely clear that this person was the litigant
(thru 60’s)  Interest involved in 1st round of standing  private, substantive, legallyprotected interested  whole body of case law stating that this interest had to be recognized
under common law.
5. But idea that the interest was private and from common law  conflicts w/
statutory interest
NOW  end up w/ a jumble  substantive legal right w/in the zone of interest protected by
the statute
When the APA passed, the judiciary committee (in 1945) took the position that there was
nothing in the federal common law w/ the notion that an aggrieved party has a right to judicial
review – b/c standing cases are about litigation for damages.
6. thought judicial review has to do w/ checks and balances
7. thought that standing had to do w/ damages
8. thought that a “lawsuit” was different from judicial review
After the APA passed & declaration that these are separate problems, have a list of cases htat
Admin 2004
87
(28)
(29)
(30)
say the opposite  begin to exclude basic judicial review on the premise that the litigant
doesn’t have the requisite common law
Gives rise to notion of private atty general – intended as a congressional bypass of standing
 1st (Icky’s v. Associate Industries) (1943) – Congress is competent to create a private atty
general.
9. Congress saw the problem and began to use pag as a way to get around the problem
10. Courts did not like PAG cases  and didn’t think it should be the normal mode for
standing
1965 action of the executive is subject of mass controversy in the US (beginning w/ civil
rights). The actions of agencies are in conflict w/ policies  people try to take the gov’t to
court but then can’t get there.
5th Circuit begins to respond. Then, Supreme Court, being generally acdcomodating of this
point of view  thinks standing is too complicated/too rule bound and is time to reeevaluate
F. Assn. Data Processing, 397 U.S. 150 (1970) pg, 649.
(1)
beginning of a whole new way of thinking about federal courts
(2)
What are courts for? What are they for when it comes to agencies?
(3)
FACTS  When banks do anything other than banking, then they put at risk our financial
security. Banks should only bank.
(4)
This case is about the idealized vision of banks—that banks should be banks
(5)
Comp. General – decided that banks needed to make money b/c interest rates were not at a
level that would allow them to profit as is.
(6)
Banks argued that their financial success would actually increase their obligation to the public,
etc.
(7)
If this goes forward, banks become competitive w/ people whose business it is to sell data
processing.
(8)
The data processing people think this decision (decision of Comp General)
(9)
PROBLEM  competitors standing suit  limited traditionally to statues designed to protect
competition (and the Banking Act is not one of them)
1. and, decision of the Comptroller is not a competitor decision
(10)
Court decided “competitive injury” b/c the injury is separate from the statute
INJURY IN FACT:
(11)
Court decides its an economic injury  the constitutional translation of injury has been too
narrow and need to focus on wehtehr you can ensure before the court  CONCRETE
ADVERSENESS  the opposite point of view from what the gov’t has done
(12)
If you can show concrete adverseness
(13)
The idea of loss profits was enough to say there was injury even though this statute did not
deal w/ it
INJURY W/IN THE ZONE PROTECTED BY THE STATUTE
(14)
Problem is that the Ass’n is NOT a protected party under the staute – the statute is about the
banks
(15)
So, how does this fall w/in the zone of interest protected by the statue?
1. the zone of interests under the statue is not personalize
2. the court does not say “protected party”  instead, says “protected interest” and
the data processing industry has a protected interest that is clear  how they
will be affected by the banks entering into their market
(16)
When looking at the statue, need only have an interest that is protected by the zone of
interest
Admin 2004
88
(17)
(18)
(19)
TREND  to enlarge the group of people who can bring an admin action
THIS IS A TRANSITION MOMENT BY THE COURT  strong presumption in favor of
judicial review (access to the court). To allow reviewability to be limited by the standing
conventions that limit lawsuit is a mistake. This is review!!!!!!!!
END UP  w/ a companion case – and a dissent by Brennan & White
1. Brennan & White  think the “zone” is constitutionally unnecessary  think that
they should be even more broad; more expansive
2. Concen about the “merits analysis” of this case  how much do you have to look into
the crystal ball to see if this lawsuit will come up w/ a legitmate solution to fix the
problem.
3. Why is this an important case??? Opening up doors to federal courts and
announcing new assumptions. Takes away over-burden, common law stuff.
i. NOT HERE  crystal ball of standing – not decided here
ii. Next round of cases deal w/ injunctions try to use injunction
language to try to solve standing problems -- “sub likelihood of
outcome on the merits”
iii. Effectiveness of an outcome is raised in this case – how can the
Comptroller do anything that will make data processors more
profitable b/c data processors are not in the comptroller’s reach?
G. Simon v. Eastern Ky., 426 U.S. 26 (1975). (supplement) VERY IMPORTANT CASE (POPPER)
(1)
pg. 162 
(2)
question of connection  the remedy is not going to fix this person’s problem
(3)
If you can’t make it right, then you shouldn’t be doing this
(4)
Can link to Chevron & mead  concern about court’s articulating policy – if courts articulate
wrongfulness (w/ no remedy) then articulating policy
(5)
FACTS 
1. Ps organize b/c they have a concern about accessibility of healthcare services
2. revenue ruling handed down on 501(c)3  henceforth, the public service
responsibility means that you have to provide access to those in critical need
(emergency room/emergency care).
3. Hospital arguing that they can’t expect the hospitals to provide for free all of these
expensive services
4. Plaintiffs  well-populated individuals that have been denied emergency care 
they were injured
HELD
5. Do the Ps have standing???? NO  b/c the court says the injury they are
claiming is against the hospital and the hospital is not a Defendant.
a. no matter what you do, the Comptroller is not going to be able to provide
long-term health care
b. the Ps have the wrong party in court
c. Court says that the Ps have to bring a lawsuit where at the end of the day, a
remedy is possible, otherwise we are making policy, we are overburdened!
6. Does the remedy address the harm of the party you are talking about? From this
case, no hospital could be forced to open its doors!!!
(6)
3P Fed. Jxd when looking at someone; when injury is less than direct, the req’t of concrete
adverseness presumes.
(7)
the req’ts from standing are going to go up considerable – demands on P are going to be much
more exacting – TaxPayer standing – its 3P, its distant, it
(8)
No subt. likelihood that the victory is going to right the wrongs of this case
Admin 2004
89
(9)
3P  evolving idea of indirect litigation that Simon slams in this face  basically brings an end
to Ass’ns bringing lawsuits – no longer possible after this
i. no just identifying party
(10)
DISSENT
1. think this is outrageously formalistic
2. think these parties are fine to challenge this position
pg. 167
(11)
H. Duke Power, 438 U.S. 59 (1978) (supplement)
(1)
is there anything that suggests that the claims here have a better remedy than the claims in
SIMON? NO
(2)
Popper thinks the nexus remedy of this case is the same as in Simon
(3)
HERE  Ps allege that if you add up foreseeable damages, then it would be more than the limits
of the Price Anderson Act
1. They argue that if this plant is built, then there would be a taking
2. They talk about the increase in the temperature of the cooling, the ambient
radiation, interference w/ the river, reduced land values (taking argument), people
will be living in FEAR, and worry about threats of large releases.
3. Arguing that the limitation on recovery is wrong, but more importantly, if you
changed the limitation into “real damages” then the People will get that the plant
won’t be built (which is what they want – won’t be built b/c cannot get financing).
4. Similar idea (decision) as in Simon
5. Price Anderson Act, however,
6. Critique  that this is the same as Simon, but that here the Plaintiffs win
(4)
(5)
(6)
(7)
(8)
(9)
Congress created a pricing limitation of $560 M dollars  Congress says that there cannot be
unlimited liability
IDEA  we have a nat’l investment into nuclear power
Congress chose the option of limiting damages to $560 M.
(14)
Popper  there is no real answer as to why this was decided differently than Simon
This case involves the same
HERE  the court says there are ways to look at standing – and decided that these people
do have standing, and so let’s look at the Merits
On the merits, tells everyone that the PAA is constitutional
This is very constitutional
Court wanted to ensure the continuity of nuclear power – so court let this sneak by on standing
so that it could state that the PAA is constitutional.
IMPORTANT  language of standing
1. personal stake in outcome
2. distinct & palpable injury
3. injury in fact of personal rights is a way of analyzing the interests of the P
4. couple that with the substantial likelihood that the relief requested will redress the
wrong
When you look at these cases, a desparate attempt to reduce standing to 3 Elements
(15)
DUKE suggests that there are 3 elements of standing
(10)
(11)
(12)
(13)
(1)
Admin 2004
90
(16)
(17)
Critique  if standing is a political doctrine, here is where the politics gets expressed
ITS ABOUT HOW STANDING GETS APPLIED:
1. Simon – applied acutely
2. Duke – applied vaguely
3. Court decided how it wanted to apply standing.
Class Notes 4/21/04
(18)
Guantonomo Bay  Breyer arguing that they are aggrieved.
1. oral argument (4/20)
2. potential EXAM PROBLEM!!!! Look into this
(19)
STANDING
1. Duke is a political decision  if you can find a nexus here, then good for you
2. This really broadens nexus
3. After Duke, a number of political cases where the court uses the Duke standards
and moves to different sub-areas (these 2 cases not assigned)
a. Valley Ford Christian
i. P alleged that the Establishement clause of 1st amendment was
violated when the Fed Gov’t gave a tax benefit, or land-based
benefit to a religious institution. People upset about religious
ii. HELD  When people challenge the action of an agency, and the
challenge is the alleged wrongful use (or misuse) of federal funds,
then the requirement for standing is “enormously stringent”
a. When you challenge ripeness of a decision as opposed
to impact on you, the court makes it very difficult
b. For you to have an injury that the Court is wiling to
talk about, then you have to show that your injury is
more significan and personal than that suffered by
every other person in the country that is also a
TaxPayer
iii. Regardless of how wrong the gov’t is, there is a very stringent test
in place  suffer a greater injury than other TaxPayers
iv. Popper  doesn’t know how anyone could satisfy the standard
v. The court did not want to decide this case
b. Allen v. Wright (1984)
1. Parents of AA children who sued IRS for its failure to
develop appropriate standards for private schools who were
openly discriminating
2. The challenge wasn’t to the school; but to the IRS  that
their failure to deal with this was wrong  claimed that this
was distinct and palpable injury
3. Simon  in order to get what they want, the IRS has to
change its rule, and as a consequence the school would then
have to stop discriminating
4. HELD  sdimply b/c the parents found themselves wronged
and were offenede  not sufficient personal injury to bring
the parties w/in the injury requirement to satisfy standing
5. Ask yourself: What would it take????? Popper  nothing
more to show a violation of the civil rights act, but if the
aciotn is directed at the gov’t itself (IRS), and want to sue
Admin 2004
91
them b/c it was unconstitutional, then you are in the same
position as every other member of the publie  you cannot
turn yourself into Congress.
6. This court was visciously attacked by the Left as “closing the
courthouse door”
7. Popper  thinks this is a tough case b/c as compelling as the
Ps are  but if you grant standing here can sometimes seem
ok, but if you grant standing too frequently to an action of
the gov’t, have to worry about who is making the decision in
the end
8. Similar to Substantive Due Process (where the court is
deciding)
I.
Lujan, 655
(1)
political issues
(2)
Articluation that there are only 3 req’ts for stnaidng (similar to Duke)
1. 3 REQUIREMENTS FOR STANDING
(3)
concrete injury  not a hypo injury
(4)
causal connection bwn injury and D’s conduct (something the D did)
(5)
a likelihood that the injury itself would be redressed if the P wins
(6)
Lujan is interpreted by future courts, is that standing should be reduced to the above 3 items
(7)
This Case
1. Citizenship Provision  statute that seems to suggest that a challenge should be available to
people who want to take steps to contest the propriety
2. Endangered Species Act  injunction provision that allows people to challenge the Fed. Agencies
and enjoin them  a rule is the subject of this case
3. RULE being challenged: The secretary doesn’t have to consult the actions outside the U.S.
(extraterritoriality rule)  this is a localized statute that has bounds to it and that species
protection in this legislation cannot mean much more (b/c of nature of congress) and that
species throughout the world. Applies to US and seas but not the whole world
4. Ps challenging this law  claiming that there is a flaw to this rule  species don’t respect
traditional political boundaries bwn countires – and ecosystems are not based on country bordies
(i.e., bwn US and Canada)
5. The problem is that in order to be in court – must have standing
6. You have standing b/c you have a foothold/threshold of citizenship, but still must show that you
have a “real” injury and an interest w/in the zone of interest that the statute protects.
(8)
What is the nature of the injury Ps claim & the interests they cite w/in the statute?
1. “real” means personal (distinct, palpable)
2. injury = that they would like to see the animals that may be lost  upset that sometime in the
future they will not be able to see the animals
(9)
COURT  dismisses the Ps rudely, “beyond all reason”  not happy about this
(10)
Court rejects their statement and says that there loss is not enough of a loss b/c they don’t have standing  they
can’t assert the interests that this statue allows.
(11)
Who could have standing under this statute?
(12)
IMPORTANT  get the list – this is the case on which everyone relies (3 pieces for standing)
(1) P must have an injury-in-fact
(2) Injury must be to a legally-protected interest
a. must be concrete, personalized, and w/in the zone of interest set up by the statute (Popper sees as sep
req’t)
b. injury must be proximate, iminite
c. must be a causal connection bwn the injury and the conduct that is the subject of the complainte (Popper
sees as sep req’t
d. injury must be the responsibility of the party sued (and not some other party)
e. Q: What would this remedy actually do  what would the steps be to protect these species?
f. Must be redressed by a faborable decision
g. If the P is not the object of the action against whom the lawsuit is brought, then standing becomes very
Admin 2004
92
difficult (the P in this case couldn’t show that it was the object – P was not an endangered species)
i. just caring about something makes you no different than any other person  so the standard for
standing is very difficult
ii. If YOU are actually injured, then the standard is lower . . .
Different Views:
(13)
(14)
(15)
(16)
(17)
J.
One View  Not the job of the court to say the wisdom of the president or of Congress
We do not have to agree w/ this, but know that this is a way of looking at separation of powers.
Kennedy/Souter  said that the real problem here were the affidavits (didn’t show an injury)
Stevens  thought the affidavits were fine (showed injury) but thought that the regulation was consistent w/ the
statue
Blackmun/O’Conner  say that everyone is wrong – that this is a good challenge and that the subject of the act
is being hurt by the agencies rule
Bennett v. Spear, (supplement) 520 U.S. 154
(1)
Case that is also about citizen suits – any person who has been harmed – about efficient wildlife
(2)
interesting after story  Bennett is often read as a finality case (i.e., DC Circuit)  case is over when there has
been a meaningful consummation of the agency’s decision-making process.
(3)
A court could hear a case under a citizenship provision if it has satisfied itself that the agency is done (if the
court is satisfied with this)
(4)
This is used more for finality than for standing
(5)
FACTS
1. the project (rerouting water) and that the rerouting will put at risk 2 endangered species.
2. Argument  water level will be too low after the rerouting
3. What are the options here when one contends that a proposed federal action is going to threaten
an endangered species?
a. Biological Finding  agency finds that it will either endanger or it will be fine
(6)
(7)
(8)
(9)
(10)
(11)
(12)
(13)
(14)
(15)
Challenge to the Gov’t determining that the project needed to be put on hold by the irrigation district who didn’t
think it should be put on hold  they needed/wanted the water
Challenge in the form of judicial review of a biological opinion issued by the service
What gives power to these folks to make this challenge?
1. They actually use the irrigation water so they
2. 1. They are direct users
3. 2. § of the Endangered Species Act that sets this up for challenge
COURT  this challenge seems to make sense
Gov’t  argues that they don’t have standing  that they do not have interests w/in the zone of interest
protected by the statute.
1. The interests here, under this statute, gov’t argues are “endangered species” – NOT WATER
2. Therefore, the gov’t argues that they fail the zone of interests test (Simon)
The COURT, instead, went back to “allow for challenge”; zone of interest should be interpreted broadly  here
is the court saying “we welcome you” – congress said that they want suits in this area, so bring it on
And, only 3 req’ts
1. injury to you
2. traceable to action of D
3. if in your favor, project will be built, and the water will come your way
Court says constitutional limitations to standing, but that here the zone-of-interest is adequate b/c the
permissive range of this statute is BROAD (did not require a “legal wrong” as other statues have)
B/C they are not challenging the wisdom of the legislation, only challenging the propriety of this specific
rule
REASON  that this worked here, is b/c STANDING IS POLITICAL (this is a political judgment) – Popper
definitely thinks that standing is
RIPENESS
(16)
(17)
(18)
Bennett is often viewed as a “ripeness” and finality case
Another way, show that you are aggrieved, that the agency is done, and you should be able to go to court under
Title V
Declaratory Judgment/Injunctive Relief/Getting a Stay against the agency (step bwn standing and ripeness)
1. Q: under Decl. Judgment Act & APA that says that agencies can issue declaratory judgements
2. Before moving to Abbott, think
Admin 2004
93
3.
4.
(19)
(20)
(21)
(22)
Courts are not likely to issue declaratory judgment b/c of finalaiyt, but agencies are not
The Legislative Structure sets up declaratory judgments as a good idea  before everything hits
the fan  go to the entity that can act and see if they can help  if not, then must wait for case
and controversy
At level of fed court, getting a declaratory judgment is next to impossible
1. ripeness, finality, fitness of resolution by the court pose problems
2. What is a purely legal issue?
3. Is the issue adequately away from the agency?
4. Is it fit for dec. judgment?
5. Is there a hardship to the party?
Abbott – comes in and start to think about WHEN (timing question)
If you look at Bennett as one that involves the consummation of agency action and the declaration of rights –
looking at the timing issue of declaratory judgment and the interim step before full-board judicial review
Ripeness Doctrine  9th Circuit – says continues to be important (a few months ago)
K. Abbott, 675
(1)
RULE that brings this case into court  FDA passes a rule that says if you list a trade label, must also list the
generic label
(2)
The pharmaceutical companies had a problem – they could either comply with the rule (which means relabeling
all products – and cost a fortune) OR they could decide not to follow (so then all products issued would cause
problems)
(3)
So  they make the perfect ripeness argument  This time, you have to hear this b/c for you not to decide
this conclusively puts us in an impossible position
(4)
Gov’t  argues not ripe, not reviewable, question is not final,  and that the only thing the party has is
standing (injury-in-fact are convincing). Gov’t does not want this to go to court, b/c every single time a rule is
issued would give rise to a pre-enforcement challenge – therefore would be setting a precedent that would make
it difficult to be a federal agency. Plenty of wasy that courts can apply fairness after-the-fact  asking the court
to interfere now in a judgment that is not their place
(5)
Counter Argument  think about the market, the harm to pharmacies
(6)
(7)
(8)
COURT  “ripeness”  the court states that unless it is barred by statute, that the parties have a right to be
heard in court
1. Ps made the right arguments – activated the interests of the court
2. If you position yourself properly, its all about the facts and the political vision of the court
3. The pharmaceutical industry got to the court w/ their argument
Got remanded to the Ct. of Aps to determine whether the regulation was w/in the jxd power of the
Agency
But  the success of the pharm industry here is legendary – so pivot from here to make an argument that the
Courthouse door should be opened.
8. FOIA
Class Notes 4/26/04
(9)
EXAM  May 5th (9 AM), Room 100 & 101
i. closed book
ii. case outline
iii. relevant sections of APA
(10)
FREEDOM OF INFORMATION ACT
i. Idea of FOIA is basic—began in 1966—idea is that gov’t records should not be secret
ii. Not a consequence of 60’s revoluation or Viet Nam – something in place in State Level, and
then permeated thru Congress
iii. Idea that as gov’t—had a great deal of over-classified info in the name of security and that
other info was
iv. To make data available to the public
1. “Any person” – does not say “citizen”
2. The primary requested turned out to be attorneys (2nd most are journalists)
followed by business interests in general
Admin 2004
94
(11)
(12)
3. Idea in debate that this would increase accountability to the public  but the above
v. The ACT – has been a study in case law of what the EXCEPTIONS mean.
vi. RULE  gov’t should make available to the public data and information UN LESS subject to
one of nine exemptions
vii. Exp. 1  nat’l security exception
viii. Right from the beginning, agencies were overburdened with work from the FOIA
1. time limits that were statutorily set  were really in the nature of hope, not reality
ix. E-FOIA  amended in the 90’s to include and allow for electronic dissemination of info
so that this would satisfy the gov’t responsibility, but in actuality it extended the gov’ts
time limits
x.
The Act covers all of Federal Gov’t, includeing the executive branch, but not the President
i. includes FBI, CIA—but of course is limited
ii. anything discoverable under the RFCP, is available under the FOIA
In gov’t practice, however, serving and interrogatory to get info for a court case may be better
than filing a FOIA request
(13)
Premise of FOIA In order for people to be cooperative, must believe that the gov’t is
operating in good faith. GOOD FAITH & VOLUNTARY COMPLIANCE is very important and a
main premise of
(14)
Purpose  the people under stand, see and believe the legitimacy of gov’t initiatives, they will
be more willing to comply with them volunatarily
In the past couple of years, lots of talk about the FOIA and Nat’l Security
At the state level, there is a FOIA-type legislation in every state
Popper  watching Arkansas State Law has closed info about the state water system (b/c
the state has a fear that terrorists may affect the water system)  also modified so that it
could call an executive session more easily
Constant Critique
i. Scalia  has issues w/ FOIA
Act applies to all gov’t agencies; also applies to advisory committees under the Federal
Advisory Committee Act
1. Advisory Committee’s tend to be large organizations, i.e., NIH
2. so the Act has been gone beyond the “classic” federal agencies
3. NOTE  goes beyond the APA
Privacy Act
1. HIPPA  healthcare privacy data
2. privacy legislation is designed to create a counter-force against the FOIA’s
dissemination of info
3. PA—sanctions both gov’t & private for dissemination of information about a person
that is private
In order to secure info, must provide a “reasonable description of information”
1. must state w/ some level of clarity, the docs or items that you are interested in
getting
2. If you don’t know what they are, then can ask the gov’t to provide for you to provide
INDEX OF THE DOCS IT HAS IN ITS POSSESSION
a. Vaughn Index  (Vaughn v. Rosen)  person has a right to request an index
W/In FOIA, all agencies (exec. & independent); entities under FACA; Pres is not subject to
FOIA, but the executive offices of the president are
“advising the president on public policy or public functions” – will not see it
(15)
(16)
(17)
(18)
(19)
(20)
(21)
(22)
(23)
Admin 2004
95
(24)
(25)
(26)
(27)
(28)
(29)
(30)
(31)
(32)
(33)
(34)
Allowed out by FOIA
1. But, if it deals w/ the advisory of a proposed rule, then YES
2. If they are going to go forward w/ a rule and why, etc.
Nat’l Security Council – not included
EXEMPTIONS
Nat’l Security/Presidential Secrecy/Foreign Policy/Nat’l Defense – broad exemption that is
interpreted narrowly
Internal Agency Rules & Practices  Gov’t as a policymaker & litigatgator – how an agency
functions. Find agency manuals. Agencies argue that “manuals” reveal strategic issues for the
agency in litigation. Gov’t also argue that this also sets up a quick route for getting around
regulations. Argues that the public doesn’t have an interest in the internal functioning of
agencies.
i. Counter  huge interest in knowing how gov’t allocates res
Specific Legislative Exclusions/Withholding Statutes -- Congress in delegating power, states
directly in enabling statute, that certain info is not available under the FOIA
i. has been interpreted broadly
Trade Secret & Confidential Business Information
i. purpose  not to reconfigure competitive forces in any sector of the economy by compelling
disclosure
ii. IP definition  internal information used for gain
iii. Restatement of Torts definition is much more narrow.
iv. Reverse FOIA cases  where a private entity sues the gov’t to try to block disclosure
v. The Act of Disclosure is in the Nature of an Order by the Agency, and falls under
adjudication  so the standard is “abuse of discretion”
1. That the agency decision to disclose is an abuse of discretion
Private/Personal Info & Inter-Agency Communications  that are confidential b/c part of the
gov’ts role as a participant in a dispute
i. Numerous Categories w/in this exemption:
1. Atty/Client communications
2. Atty/Clinet work product
ii. Gov’t Deliberations regarding its decisions in a certain case
iii. Sensitive, but not necessarily classified information
Medical/Personal Records that constitute an invasion of privacy
i. requires info that is unwarranted; no broader public purpose in the medical records not
part of a public dialogue
ii. Privacy ACT  gives this more directly but this is the stem of HIPPA
Investigatory Reocrds Compiled for Criminal Records – to prevent the disclosure of information
that would impede law enforcement. Idea that for effective prosecution, the gov’t have some
control over the info.
i. Argument over what this means  you can get your own rap sheet; but not clear whether
anyone can get your rap sheet. If there is a way of protecting a criminal cast, then it is
within this exemption
ii. If it would impede law enforcement
iii. If it would impede or sacrifice a person’s right to a fair trial
iv. If the data is an unwarranted violation of personal privacy – includes medical information
v. If it includes police technique
vi. Fugitives usually do not have FOIA rights
vii. Confidential sources are not w/in the protection of FOIA
Financial Institutions – banks that are subject to regulatory process & have data that must be
filed w/ gov’t, but no public interest in the info
Admin 2004
96
(35)
(36)
i. Purpose  safeguard those institutions, their customers, and their regulating agencies
Natural Resources  oil wells, mineral claims, “drill-hole data” of geological
i. privacy interest in keeping great discoveries confidential
ii. difficult to carve out a clear path for this exemption
The Quill  publication for journalists in general – and provides a lot of information on how to
file FOIA requests
A. NLRB v. Sears, 421 U.S. 132 (1975) pg. 510
(37)
FOIA request. Seaars is looking for memo filed by regional counsel which gives its reasons for going forward
w/ prosecution.
1. advice
(38)
Q: What is secret/What is not?What falls w/in the exemptions?
(39)
Advice Memos that Cosntitute final action of an Agency – are subject to the FOIA
1. no longer any warrant for their non-disclosure – the decision has already been made
2. in a certain sense is precedent
(40)
What is NOT available is  Prosecution Decision (as opposed to an advice memo). If weighing
out pros and cons – not something you want litigants to get a hold of, and not something that
should be reveal to the media b/c not good for the public to know that information
(41)
Popper  if you are a gov’t enforcer, last thing you want the public to know is the exact that
thing that will cause litigation. Don’t want the public to know the “tolerance levels”
1. Interest in not letting that info out
B. Chrysler, (1979), pg. 519
(42)
involved several employees that wanted to use FOIA to release info it had filed
(43)
Chrysler sued the DIA saying that they could not relesse these reports
(44)
Q: Does Chrysler have any basis to be in court? (jurisdictionally)
1. b/c once the info is turned over to the gov’t, should trust the gov’t
2. BUT – Chrysler did not trust the gov’t
(45)
Outcome of the Case 
1. Courts have been interpreting this oppositely . . .
2. Do not rely on the fact that Chrysler provides a constitutional basis, b/c this is up in the air
(46)
A challenge that is judicial review & difference bwn district court injuction
1. same as judicial review of standing v. standing wehre a law-suit is filed in court seeking money
damages
2. much more difficult for TPs to file in district court  much easier if your contention is that the
gov’t did not have an adequate record on which to rely
3. SAME W/ FOIA  difficult if you have independent law suit – seeking injunction; much
easier if saying that the agency was wrong
FOIA will not be a major part of the EXAM
Exam
(47)
(48)
(49)
(50)
(51)
(52)
3 ½ hour exam
½ short answer/ ½ essay
Short Essay – direct question
Long Essay – more in-depth discussion
SHORT:
i. Retroactivity – explain this to a client
ii. Difference bwn Adjudication & Rulemaking
LONGER:
i. Exercise of Discretion on part of agency and deference on part of the court – as a theme
ii. Function of Gov’t itself is a theme – who does what and why
iii. Sep. of Powers -- when an agency would act instead of a court
iv. Constitutional Piece of Ad Law 
1. can you structure a decent due process
2. whether a liberty/prop interest
3. due process critique
Admin 2004
97
v. Use of Evidnece & Information  question is What is the more important function of agency deciswion
makers – to be optimally informed, or to be optimally fair?
1. search and seizure
2. Optmal Info – privacy rights in search and seizure and to have rec requirements go out the window
b/c best for gov’t to have all info
a. Trade off – public acceptability
b. Access to information and its relation to fairness – POPPER THINKS THIS IS AN
IMPORTANT THEME