Administrative Law Outline
Administrative Law is the code of “Civil Procedure” for the bureaucratic state.
Complexity
 Many and diverse agencies
 Combining many functions
 With varying kinds of accountability
 Trying to wear “one-size fits all” procedures.
 With changing politics, mandates and personel
Combining Separated Powers
Legislative
Executive
Judicial
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All three of these functions are moved into the agency
Legislative-Rulemaking
Executive- Investigative Prosecution
Judicial-Adjudicative
How Agencies Are Affect By the Branches
1. Legislator- Congressional Outsight {budget hearings, changing of the
laws}
2. Executive Oversight- OMB, President. {Bush has appointment powers,
budget games and he shit-can anyone he wants}.
3. Judiciary- Judicial Review {Statutory level they check on agency
discretion}.
4. Other- The press, professional/technical sense.
What Do We Want Bureaucrats To Be Accountable For
1. Democratic- Should the be responsive to elected officials and the public at large;
should this policy based rather than fact based.
or
2. Technocrat; Informed and governed by best available technical and professional
knowledge; completely fact based.
One-Size Fits All Agency Conduct
 When Congress creates a new agency (Office of Homeland Security), or
gives an old agency a new functions, if the particular law says nothing
about what procedures to use for making decisions, then the APA applies
and determines the result.
 Often times Congress will tinker with hand-crafted procedures for each
function. These individual procedure laws can wholly or partly replace
the APA or supplement it.
 There are also general procedural statutes (NEPA, Reg Neg)
 The APA gets amended and interpreted differently over time.
 In some instances agencies have the power to define their own procedures,
within limits.
 All of this has to be consistent with the Constitution.
Two Ways to Analyze Procedures
 Formalist – The letter of the law.
 Functionalist – What is the purpose.
*** The dilemma is that neither of this work as a universal axiom for Administrative
Law***
Navigating the APA
1) Is the government body a federal agency? {not courts, not Congress, etc}
2) Is there an agency action? {What is an action?}
3) Is it an adjudication or rulemaking?
4) Is it formal or informal?
5) Is the action reviewable or unreviewable?
6) What is the scope of the review?
RULEMAKING
§551(4) of the APA
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“Rule” – means the whole or part of an agency statement of general or particular
applicability and future effect designed to implement, interpret, or prescribe law
or policy or describing the organization, procedure, or practice requirements of an
agency and includes the approval or prescription for the future of rates, wages,
corporate or financial structures of reorganization thereof, prices, facilities,
appliances, services, of allowance thereof or of valuations, costs, or accounting, or
practices bearing on any of the foregoing.
“Rule Making” – Means agency process for formulating, amending, or repeating a
rule.
§ 553 – “Rule Making”
 Exceptions to Rule Making:
1) Military of foreign affairs function of the United States
2) Matters relating to the agency management or personnel or to public
property, loans, grants, benefits, or contracts.
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General Notice of proposed Rule Making should be published in
the Federal Register.
** The general notice requirement does not apply when you are dealing with:
 Interpretive rules, general statements of policy, or rules of agency organization,
procedure, or practice; or
 When the agency finds good cause that notice and public procedure thereon are
impracticable, unnecessary, or contrary to the public interest.
When Can You Get An Oral Hearing?
1) Based on statute- When rules are required by statue to be made “on the
record” after opportunity for an agency hearing, sections 556 and 557 of
this title apply instead of this subsection.
2) Agency procedural regulation.
3) Independent agency decision in a case.
Problems 2.1 (p 51).
 You can lobby the EPA
 Petition the EPA (if they deny petition, then you may have grounds for judicial
review).
 Congressman’s Office
 Do you go to staff level of the agency or higher?
 What your goal is to frame the issue in a way that the agency thinks that your
position is in their best interest.
 Use the press
 Look for allies!
Telecommunications Research & Action Center v. Federal
Communications Commission
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750 F. 2d 70 (D.C. Cir 1984) (65)
This is rate making situation in which TRAC says that ATTV overcharged
people.
TRAC filed a petition with the FCC in 1979.
The FCC issued a public comment, but after 5 years they do nothing.
The claim by TRAC is unreasonable agency delay.
Factors the court says should be viewed:
1) The time the agencies take to make the decisions must be governed by a
“rule of reason.”
2) Where Congress has provided a timetable or other indication of the speed
with which it expects the agency to proceed in the enabling statute, that
statutory scheme may supply content for this rule of reason.
3) Delays that might be reasonable in the sphere of economic regulation are
less tolerable when human health and welfare are at stake.
4) The court should consider the effect of expediting delayed action on
agency activities of a higher or competing priority.
5) The court should also take into account the nature and extent of the
interest prejudiced in delay.
6) The court need not find any impropriety lurking behind agency lassitude
in order to hold that agency action is “unreasonably delayed.”
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Does the FCC have a reason why it took them 5 years? Is this not arbitrary if they
do not?
The court realizes that the agency has priorities, but what is unreasonable delay?
§ 706 – Scope of Review
“To the extent necessary to decision and when presented, the reviewing court shall decide
all relevant questions of law, interpret constitutional and statutory provisions, and
determine the meaning or applicability of the terms of an agency actions—
1) Compel agency action unlawfully withheld or unreasonable delay; and
2) Hold unlawful and set aside agency action, findings, and conclusions found to
be—
(A) Arbitrary and Capricious, an abuse of discretion, or otherwise not in accordance
with law;
(E) Unsupported by substantial evidence in a case subject to section 556 and 557 of
this title or otherwise reviewed on the record of an agency hearing provided by
statute..etc.
Arkansas Power & Light Co. v. Interstate Commerce Commission
725 F.2d 716 (D.C. Cir 1984) (70)
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Case involved the movement of coal by rail, the shippers realized that because
coal can only be transported by rail, they jack-up the prices.
The APL petitioned the ICC for a rulemaking, to collect data about the rail rates.
ICC rejected the petition.
They are denied a rulemaking ,what are the reasons:
1) That this would be unduly burdensome- an enormous amount of time and
resources. If the distribution of costs were on the industry would this have
been different?
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2) The current system is working fine- That they are regulating too much
already and they do not want to regulate further
3) They give due deference to the agency
The court says that hardly often will they force an agency to make a record, such
review under the APA for denying a rule is very narrow. Such review is limited to
ensuring that the agency has:
Agency:
1) Adequately explained the facts and policy concerns that it relied on.
2) The facts have some basis in the record.
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The court in this case finds no reason to force the rule.
Record:
1) Petition
2) Denial
3) Any other agency paper work.
Overton Park- The record can consist of something that looks like a trial transcript, or
whatever collection of papers that you can put together.
** Congressional Deadlines- That the agency must do “X” by “Y”
** Executive Formalism- They can tell the agency how to handle early rulemaking.
1) regulatory agenda- tell the agency what is coming and how to plan for regulations.
2) Regulatory analysis requirement- economic cost-benefit of the rule and who it
benefits.
Northern Spotted Owl v. Hodel
716 F. Supp. 479 (W.D. Washington 1988) (71)
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This case involved the preservation of the old growth forest.
The ESA states that when you are determining whether or not to list a species on
the ESA list, your determination can only be based on scientific data.
In this case the USFWS, turned down the petition to list the NSO on “the list,” but
they failed to give a reason as to why they made their determination.
They made this determination even though their own USFWS scientist stated that
the NSO should be on the list.
Was this an abuse of discretion by the USFWS?
They needed to give some factual support for their reasoning, but here they failed
to so—the court responded by giving the USFWA 90 days to come-up with a
reason why they made their decision.
Rule Making Procedures
American Hospital Association v. Bowen
834 F. 2d 1037 (D.C. Cir 1987) (77)
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In 1982, Congress amended Medicare to have Peer Review Organizations
(“PROs”), whose job was to monitor, “some or all of the professional activities”
of the providers of Medicare services in their area.
The AHA has brought this claim on the basis that Health and Human Services,
(“HHS”) issued a series of directives and transmittals governing the PRO without
providing Notice and Comment.
The HHS has claimed that the directives that they issued fall under APA § 553(A)
“interpretive rules, general statements of policy, or rules of agency organization,
procedure, or practice.”
The key question is whether the directives that are being issued are a) Substantial
or b) Procedural.
Is this a substantive value judgment?
Is this approving or disapproving behavior?
The court says that “had the HHS inserted a new standard of review governing
PRO scrutiny of a given procedure, or to have inserted a presumption of invalidity
when reviewing certain operations, its measures would surely require notice and
comment, as well as close scrutiny to insure that it was consistent with the
agency’s statutory mandate. But this is not the case here.
The manual imposes no new burdens on the hospitals that warrant notice and
comment.
They hold that this is a procedural rule and not subject to notice and comment.
Air Transport Association of America v. Department of Transportation
900 F.2d 369 (D.C. Cir 1990) (80)
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The FAA changed regulations, which raised the monetary penalty to $10,000 for a
violation of aviation safety standards.
They also instituted the Penalty Rules, which established a schedule for civil
penalties.
The FAA stated that they did not have a Notice and Comment period because the
changes that were implemented were simply procedural in nature.
The court stated that because the Penalty Rules affect the civil penalty defendant’s
right to avail themselves of an administrative adjudication, they have a legitimate
interest in being involved in the rulemaking process.
Denial of § 553(A) exception.
Three Things To Consider in Analyzing Adjudication or Rulemaking
a. Accuracy – That you don’t get shitty decisions. Accuracy is more
important in adjudication than in rulemaking.
b. Efficiency- Efficiency is more important in rulemaking. You also do not
want to spend too much time or money.
c. Fairness/Acceptability- Public acceptability in both rulemaking and
adjudication.
JEM Broadcasting Company, Inc. v. Federal Communications
Commission
22 F.3d 320 (D.C. Cir 1994) (85)
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The FCC acting pursuant to its “hard look” rules, dismissed JEM’s application
without providing JEM an opportunity to correct its error.
In 1985, the FCC has set-up this “hard look” procedure in an attempt to make
the process more efficient and to weed out incomplete applications.
JEM contends that the “hard look” rules cannot be applied against them because
the rules were promulgated without notice and comment in violation of the
APA.
The FCC contends that, they already had this type of procedural set-up, all they
did was move the process “up front”, all they did was adjust the timing when
they implemented the Hard Look Test.
Yet, does this not a substantive affect on the rights of the parties?
The court rules that efficiency was of importance to the FCC and this was
simply a procedural decisions.
They also say that Air Transport is no longer binding precedent in the D.C.
Circuit in that it extended the “value judgment” rationale too far.
Rule Making: Formal, Informal, Hybrid
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By the 1970’s problems among the many agencies came to a head.
The capture began to become to problem, as the industries that were suppose to be
regulated, were setting the regulations.
In the 70’s they needed a set of rules instead of judicial precedent it was too
cumbersome and disorganized.
They needed uniform rules
The decided to look at good procedural practice.
There was a change nationally in law and economics
They began to use Hybrid Rulemaking.
United States v. Alleghany-Ludlum Steel Corp.
406 U.S. 742, 92 S.Ct. 1941, (1972) (92)
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As a result of the Esch Act, there was a fee that was charged on companies for
using someone else’s railcar.
Disappointed by the rule implemented by the ICC, Alleghany, sought judicial
review.
They argued that the Esch Act required the ICC to hold a hearing before they
promulgated a rule.
The Court said that you do not always need to have a hearing unless it actually
says that the decision must be made “on the record.”
You do not need those exact words, but there must something similar to this to
have a formal rulemaking.
United States v. Florida East Coast Railroad Co.
410 U.S. 224, 93 S.Ct. 810 (1973) (92)
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The case was brought to decide is there should be a formal rule making under §
556 of the APA.
Within the statute it stated that the commission should act following a “hearing.”
The court, relying on Alleghnay-Ludlum, stated that, “the word “hearing” in the
Interstate Commerce Act did not necessarily embrace either the right to present
evidence orally or to cross-examine opposing witnesses, or the right to present
oral argument to the agencies decisionmaker.”
Unless forces them to do so the Court does not want to afford a formal
rulemaking.
Should the result be different if the FERC was being affected disproportionately.
Vermont Yankee Nuclear Power Corp. v. Natural Resources Defense
Council, Inc.
435 U.S. 519, 98 S.Ct. 1197 (1978) (94)
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The NRDC contended that the absence of discovery or cross-examination denied
it a meaningful opportunity to participate in the rulemaking proceedings of the
Atomic Energy Commission (“ACE”).
The court says that the court below assumed that additional proceedings would be
a good idea because it would result in a more adequate record because the
interested parties would have more of a chance to participate.
The court says that adequacy of the “record” in this type of procedural devices
employed, but rather turns on whether the agency has followed the statutory
mandate of the APA or other relevant statute.
Courts cannot impose additional rulemaking procedures on agencies
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If we were to give a full hearing to all parties this would seriously interfere with
the intent of Congress.
** The limits of functionalism in FECRC and Vermont Yankee
Kenneth Culp Davis – “An Approach To The Problems of Evidence” (96)
 Adjudicative Facts – The kind of facts that go to a jury in a jury case.
 Legislative Facts – General facts that help government institutions decide
questions of law, policy and discretion.
 Support for a rule can be proved by both adjudicative and legislative.
 In functional philosophy, if you unpack the legislative you get to the adjudicative
facts. (Problems with Davis’ theory).
Informal Rulemaking Requirements
 The APA requires that a general notice of proposed rulemaking shall be published
in the Federal Register.
 These are called NPRMs or NOPRs
 Publication in the Federal Register is “constructive” notice of a rule and is legally
sufficient even if an affected or interested party is unaware of the notice.
 The NPRM must include, “time, place, and nature” of the public proceedings.
 Many agencies have added requirements for instance a preamble that gives
background to the rule and describes what the rule is intended to do.
 Many agencies have began to require more than the NPRM, simply so the courts
do not decide that the notice given was not sufficient.
 A common “hybrid” requirement that has been added by Congress is that agencies
be allowed to include different type of background data as part of the NPRM.
 One of the largets problems has become when a agency provides notice for a
rulemaking and the later comes out with a final rule that is different from the
proposed rule; how much change between the two is needed before you need to
have an additional notice requirement.
 If you make them give notice all the time, they will not change the rule; but if you
give to much deference, then they will do whatever they want.
United States of America v. Nova Scotia Food Products Corp.
568 F. 2d 240 (2d Cir. 1977)
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Smoked fish which is processed by the appellant, was determined to be
“adulterated” by the Food and Drug Administration (“FDA”) under the Food,
Drug and Cosmetic Act.
The point of contention are the T-T-S standards that Nova Scotia has to follow.
What the FDA was that they established one guideline for smoked fish, in order
for Nova Scotia to meet this requirement it would kill the Whitefish and was
economically unfeasible.
The Bureau of Commercial Fisheries asked for a species-by-species regulation.
The FDA did an experiment that was terrible.
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The appellants argue that there is an inadequate record upon which to predicate
judicial review, and that the failure to disclose to interested parties factual
material upon which the agency was relying vitiates the element of fairness which
is essential to any kind of administrative action.
Basically, they argue that the § 553 APA requirement that the agency decision
include a “concise general statement of…..basis and purpose” was inadequate in
this case.
They state that “In this circuit we have said that it is arbitrary and capricious for
an agency to not take into account all relevant factors in making its
determination.”
In this case they did not take all factors into consider when making their decision.
“Concise General Statement Test:
We do not expect the agency to discuss every item of fact or opinion included in
the submissions made to it in informal rulemaking. We do expect that, if judicial
review which Congress has thought it important to provide is to be meaningful,
the concise general statement of basis and purpose mandated by Section 4 will
enable us to see what major issues of policy were ventilated by the informal
proceedings and why the agency reacted to them as it did.”
Based on Relevant Facts
Relevant- Legislative/Agency – What should
be considered from both angles.
“Clear Error of Judgment”
“Zone of Reasonableness”
Overton Park
Fish- health hazards, killed people, probability
of an outbreak, seriousness of issue.
Irrelevant- Campaign Contributions, Press
Hysteria, Inconveniences.
Cost on the economy
What Makes Up the Record For Judicial Review?
 Notice – Alternatives, agency evidence, the evidence should be in the actual
rulemaking record.
 Comment – This is the next step; this focuses on the record and is a record of any
comments that are made concerning the notice.
 State Basis & Purpose (“SBP”)- This is the response by the agency to any of the
comments.
** These together make up the record for judicial review**
Nova Scotia- The problem here is that the agency did not lay out the entire record. You
have to lay out the record and let individuals comment on the record.
Chocolate Manufacturers Association v. Block
755 F.2d 1098 (4th Cir. 1985) (104)
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The CMA contends that the Department of Agriculture (USDA) did not provide
notice that the disallowance of flavored milk would be considered, and second
that the Department gave no reasoned justification for changing its position about
the nutritional value of chocolate in the food distributed under its authority.
The court did not reach the second issue, but ruled on the first that the CMA the
department provided inadequate notice and therefore, that it must reopen the
comment period on the rule.
The core question is if “interested parties” we given a chance to comment on the
rule.
What the USDA did was that thy setforth an original rule, that was to be
commented on, nowhere in that rule did it mention that flavored milk what not be
allowed in the WIC program.
In the final rule, the deleted flavored milk, from the list of substances that would
be allowed.
The USDA said that this was a complete change from the original rule, due in part
to the fact that they received 78 comments from interested parties in favor of
delisting flavored milk.
The question of adequacy of notice should be determined on a case-by-case basis.
Two Tests:
1. (1st Circuit) “Notice is adequate if the changes in the original plan ‘are in
character with the original scheme,’ and the final rule is a ‘logical
outgrowth’ of the notice and comment already given.
2. (Other Circuits) “If the final rule materially alters the issues involved in
the rulemaking or, if the final rule ‘substantially departs from the terms of
substance of the proposed rule,’ the notice is inadequate.
The court in this case sides with the CMA to reopen the comment period.
Opportunity for Comment
 § 553 (c) requires that agencies to provide interested persons an opportunity to
comment ‘through submission of written data, views, or arguments.”
 There is no requirement for an oral presentation or hearing.
 There is no specified time period.
 In formal rulemaking there is a ban on ex parte communications.
 § 553 does not prohibit such contacts in informal rulemaking, although it is
sometimes prohibited in an agency’s mandate.
Ex Parte Communications
Home Box Office v. Federal Communications Commission
567 F.2d 9 (D.C. Cir. 1977) (113)
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Formal Rulemaking – No ex parte.
Informal Rulemaking- Not mentioned in the APA.
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In this rulemaking the FCC was contemplating lossening what cable providers
could provide to their viewers.
In this case, the FCC following the notice and comment period, allowed
negotiated with the parties about a possible solution.
After the rule was adopted, HBO challenged the rule, one of the grounds was the
presence of ex parte communications.
The court asked the FCC to provide the court with a list of all the ex parte
communication so that the court decide what was said during these negotiations.
The court says that not all information that is collected by the agency during the
informal rulemaking must be on file for the public, at the same time, that
information which formed the basis of the final rulemaking must be available to
the public.
They go on to say that there should not be ex parte communication, but if there is
the agency should put a written document or a summary of any oral
communications in the public file, so that interested parties can comment.
Sierra Club v. Costle
657 F. 2d 298 (D.C. Cir 1981) (116)
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This case involves ex parte communications during the EPA’s adoption of a rule
concerning the 1977 amendments to the Clean Air Act.
The Environmental Defense Fund (“EDF”) complains that an ex parte blitz by the
Coal Industry influenced the decision of the EPA to set their standards.
There concern stems from comments that were filed after the comment period;
and meetings between EPA officials, government official and private parties
concerning these standards.
The Court’s scope of review was determined in this case by the CWA which
states that you can only overturn an agency decision for procedural error if:
1. His failure to observe procedural requirements was arbitrary and
capricious.
2. An objection was raised during the comment period, or the grounds for
such objection arose only after the comment period and the objection is
“of central relevance to the outcome of the rule,” and
3. “the errors were so serious and related to matters of such central relevance
of the rule that there is a substantial likelihood that the rule would have
been significantly changed if such errors had not been made.”
ADD TO THIS CASE
D.C. Federation of Civic Associations v. Volpe
459 F.2d 1231 (D.C. Cir. 1971) (124)
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This case found that Congressional pressure on an agency can be considered
improper.
The court required two conditions to be met before you can overturn a rulemaking
on the grounds of congressional pressure:
1. The content of the pressure upon the Secretary is designed to force him to
decide upon factors not made relevant by Congress in the applicable
statute.
2. Second, the Secretary’s determination must be affected by those
extraneous considerations.
** The court stated that while they expect Congressional Representatives to represent
their constituents, there are some instances that need to be checked**
Statements of Basis and Purpose
 § 553(c) requires agencies, “after consideration of the relevant matter presented,
[to] incorporate in the rules adopted a concise general statement of their basis and
purpose.
 The SBP can differ depending on the statute.
Hybird Rulemaking
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This includes statutes that have added procedural requirements to the basic
informal APA rulemaking requirements.
Presidential Executive Orders that require that certain procedural requirements
that must be completed before a rule can be promulgated.
Examples: NEPA
Regulatory Flexibility Act- That requires agencies to create a Regulatory
Flexibility Analysis whenever they propose a rule that may have a significant
economic impact on a substantial number of small businesses, organizations or
governments.
Paperwork Reduction Act – This act require agencies to engage in a notice and
comment procedure prior to imposing any reporting or recordkeeping requirement
on persons.
Unfunded Mandates Reform Act of 1995 – Which provided parliamentary
restrictions on legislative bills that would impose unfunded mandates –federally
imposed enforceable duties on either state, local, or tribal governments or the
private sector, to prepare a statement assessing the effect of the regulation.
Negotiated Rulemaking
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Convenor, Facilitator, Mediator & Arbitrator.
Benefits of Reg. Neg. – 1) Shorten the N/C period --- less likely to have judicial
review, makes the process more efficient. 2) Reduces litigation. (How true are
these benefits).
Mediator – Neutral 3rd party, helps parties come to an agreement, they make a
bargain work. They allow the sides to actual rational, help define interests and
help parties see the other side.
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Arbitrator- Neutral 3rd party, private sector usually looking for resolution. Judgelike.
Convenor – Feasibility, study of negotiated rule-making. They make sure all
interests are represented. Can the parties agree?
Facilitator – This is the next step. They set the ground rules; chair the meetings;
move discussion along in productive direction; formulate the issues.
Convenor ----------- Facilitator ------------ Agreement (Then you do the Rulemaking and
the Notice and Comment)
** Does this give parties a double shot at the process, so that after they see the opposing
sides weaknesses they can expose them in the Notice and Comment period.
 You could get rid of the N/C period, but the Negotiated Rulemaking is not open to
the public. Additionally, if you have no N/C stage then you go from Reg. Neg to
Judicial Review with no record to look at on judicial review.
Public Access To Agency Processes: FOIA
Freedom of Information Act : FOIA
 §552 of the APA is generally referred as the Freedom of Information Act.
 §552(a)(3) requires that agencies, “upon any request for records which reasonably
describes such records and is made in accordance with published rules stating the
time, place, fees and procedures to be followed, shall make records promptly
available to any person.”
 §552(b) provides nine specific exemptions to this general requirement:
1. Classified information
2. Internal agency personnel rules and practices
3. Information specifically exempted from disclosure by statute
4. Private commercial or trade secret information
5. Inter-agency or intra-agency, privileged communications
6. Personnel, medical, or similar files the disclosure of which would
constitute a clearly unwarranted invasion of privacy
7. Information compiled for law enforcement purposes
8. Information related to reports for or by an agency involved in regulating
financial institutions;
9. Geological information concerning wells
Time Limits
 FOIA requires that an agency receiving a proper request for records to determine
within 20 working days whether to comply with the request.
 If it denies the request it must explain the reason why and inform the person of
any integral appeal opportunities. If a person seeks such an appeal, the agency has
20 working days to decide the case.
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If the agency fails to meet the deadlines, the requester may treat the failure as a
denial and seek judicial review.
Yet a court may allow the agency additional time if it can show that “exception
circumstances” exist and that the agency is exercising due diligence in responding
to the request.- this is the main reason why agencies are never sued over the time
requirements nor do they even attempt to give you a reply in 20 days.
FOIA Fees
 Agencies may charge fees to recover the direct costs of search, duplication, and
review associated with commercial requests.
 Agencies are not to charge any fee for the first two-hours of search time and the
first 100 pages of duplication for any non-commercial request, or if the cost of
collecting the fee would exceed the amount of the fee.
Judicial Review Under FOIA
 If an agency denies an FOIA request, the requester may seek judicial review
under FOIA itself, not Section 706 of the APA.
 Differences Between 706 and FOIA review:
1. The defendant agency, not the plaintiff requester, has the burden of proof
to justify its actions
2. The court determines the case de novo; it is not limited to reviewing the
agency record, and it is not to defer to the agency’s decision.
3. The FOIA authorizes reasonable attorneys fees and costs if the plaintiff
substantially prevails
FOIA request
 FOIA refers to requests by ‘any person’, this includes foreign citizens,
corporations and governments, illegal non-resident aliens and prison inmates
 Equally important is that the person does not need to show any reason why they
want the records.
 In order for a record to be an ‘agency record’ the agency must actually possess the
record in question. Even if the agency may legally own the record, but it is not in
the agency’s possession, the agency is not required to produce the record.
Bureau of National Affairs, Inc, v. DOJ
724 F.2d 1484 (D.C. Cir. 1984) (631)
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This court was asked to decide if appointment calendars, phone logs and daily
agenda of government officials are “agency records” subject to disclosure under
FOIA.
The EDF in this asked for the appointment calendars and telephone logs of six
OMB officials.
The DOJ and OMB claim that they are not “agency records” subject to disclosure
under § 552(a)(4)(B) of FOIA.
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The looked at four factors to determine if this was “agency action” whether the
documents were:
1. In the agency’s control
2. Generated within the agency
3. Placed into the agency’s files
4. Used by the agency for any purpose.
When looking at these factors the court says that they will look at the totality of
the circumstances surrounding the creation, maintenance, and use of the document
to determine whether the document was an agency record, and not if the
document is physically within an agency.
Telephone message slips – These are not “agency records” there is no real way
that you can tell the difference between personal and business calls.
Daily Agendas – These are “agency records” because they were created for the
express purpose of facilitating the daily activities of the Antitrust division. They
also said that the agency can take what appears to be purely personal material.
Appointment Calendars – These are not “agency records” First they were not
distributed to other employees, but were retained solely for the convenience of the
individual officials. Second, the daily agendas were created by Mr. Baxter’s
secretary for the express purpose of informing other staff of Mr. Baxter’s
whereabouts during the business day.
The court looked at 1) Impropriety and 2) Internal decision-making
DOJ v. Tax Analyst
492 U.S. 136, 109 S. Ct. 2841 (1989)
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The question is whether FOIA requires the DOJ to make available copies of the
district court decisions that it receives in the course if litigating tax cases on
behalf of the Federal Government.
The court held that they do.
FOIA requires on the district courts “to enjoin the agency from withholding
agency records and to order the production of any agency records improperly
withheld.”
Federal jurisdiction is dependent on showing that:
1. Improperly
2. Withheld
3. Agency Records
The court says that two things must be satisfied for requested materials to qualify
as “agency records”
1. An agency must, ‘either create or obtain’ the requested materials ‘ as a
prerequisite to its becoming an agency record within the meaning of the
FOIA.
2. The agency must be in control of the requested materials at the time the
FOIA request is made.
The court holds that these are “agency records.” The relevant issue being whether
an agency covered by the FOIA has created or obtained the materials sought, not
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whether the organization from which the documents originated is itself covered
by the FOIA.
Second, the court clearly controls the district court decisions that Tax Analysts
seeks.
Dissent
 They say that the purpose of FOIA was not so businesses could pass off their
costs on to the government, which is ultimately passing theses costs onto the
taxpayers.
** On some level is there not an economic benefit to getting the FOIA information.
*** The Tax Analyst decision basically narrowed the precedent set by BNA.
FOIA Exemptions
1. Classified Information
 This is classified pursuant to an executive order, not a statute, which can
change from President to President.
 This can become a problem when merely acknowledging the existence of
a document may disclose national security information.
 Courts are extremely reluctant to substitute their judgment for that of the
agency when it comes to national security.
2. Internal Personnel Rules
 Internal personnel rules and practices of the agency.
 This exemption can often depend on the value to the public of the information
which in many instances goes against the idea that you need not give a reason
why you want the information under FOIA.
3. Specifically Exempted by Statute
 There are a number of statutes by their terms try to maintain the
confidentiality of information in the government’s possession (i.e. raw census
data is prohibited from being used for other than statistical purposes.)
 Congress must prohibit disclosure absolutely or must provide particular
criteria for withholding or particular types of information to be withheld.
4. Confidential Business Information
 This applies to trade secrets and commercial or financial information if it is
obtained from a person and is either privileged or confidential.
 There is some dispute as to what is a trade secret; but as a baseline most
courts require that the information to be commercially valuable, used in one’s
business, and maintained by the company in secrecy.
 In order to be exempt as being commercial or financial the information must
have been obtained from a person, not generate by the government itself, but
the person that provided the information need not be the person to whom the
information relates.
National Parks and Conservation Association v. Morton
489 F.2d 765 (D.C. Cir. 1974)
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Appellant brought this action under the Freedom of Information Act seeking to
enjoin officials of the Department of Interior from refusing a permit inspection
and copying certain agency records concerning concessions operated in National
Parks.
The District Court granted the injunction on the grounds that the information
sought was exempt under §552(b)(4) of FOIA; that this fit under the “trade secrets
and commercial or financial information obtained from a person and privileged or
confidential.
In order to bring a claim of this exemption you must show that the information is:
1. commercial or financial.
2. obtained from a person, and
3. privileged or confidential
The test for what should be considered “confidential” is an objective one.
There is no definition of the word, but the court has the Senate Report language
which says:
This exception is necessary to protect the confidentiality of information which is
obtained by the government through questionnaires or other inquires, but which
would customarily not be released to the public by the person from whom it
was obtained.
The court also be satisfied that the non-disclosure is justified by the legislative
purpose which underlies the exemption.
Commercial or financial matter is “confidential” for purposes of the exemption if
disclosure of the information is likely to have either of the following effects:
1. to impair the Government’s ability to obtain necessary information in the
future; or
2. To cause substantial harm to the competitive position of the person from
whom the information was obtained.
In this case since the parks are required to give this information to the
government, there is presumably no danger that public disclosure will impair the
ability of the Government to obtain this information in the future.
The exemption may also be invoked by private parties who has provided
commercial of financial information and the public disclosure of such information
would cause him substantial harm to his competitive position.
The court remanded this case to look at whether there was a likelihood of
substantial harm to the competitive positions of the parties from whom it has been
obtained.
Distinction Between Mandatory and Voluntary Submission of Information
 Government – They want to get the information as easily as possible.
 General Public – Want accountability on all parties; they want the parks to be
used efficiently.
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Competitors – Disclosure, financial interest
** In the case above concessionaire wants to obtain the information. You have a
monopoly in the National Parks; you could lose that monopoly.
** The problem is that although they have a monopoly by giving away the information
they could lose the monopoly by another group doing it more efficient. At the same time
there should be more competition.
Critical Mass Energy Project v. Nuclear Regulatory Commission
975 F.2d 871 (D.C. Cir 1992) (647)
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Appellant seek the release of certain reports that have been provided to the
Nuclear Regulatory Commission by the Institute of Nuclear Power Operations on
the understanding that they will be treated as confidential.
They looked at National Parks, they reaffirmed the test that came from this case,
but additionally held that, the information sought is given to the Government
voluntarily, it will be treated as confidential under Trade Secrets Exemption, if it
is of a kind that the provider would not customarily make available to the public.
In 1984, the Critical Mass Energy Project (“CMEP”) asked the NRC, pursuant to
FOIA, to provide it with copies of the Institute for Nuclear Power Operations
(“INPO”) reports.
The NRC denied the request, finding that they contained confidential commercial
information and were therefore protected from disclosure by the Trade Secrets
Exemption.
CMEP brought this suit, challenging the definition of “confidential” presented in
National Parks, the court says that although there are problems with National
Parks none of these problems are serious enough to abandon the precedent.
The court said that in National Parks they indicated that the government interest is
unlikely to be implicated where the production of the information is compelled,
they have since pointed out that there are circumstances in which disclosure could
affect the reliability of such data.
Thus, when dealing with a FOIA request for information the provider is required
to supply the government impact inquiry will focus on the possible effect of
disclosure on its quality.
They say that when the information is given voluntarily there is a different aspect
of governmental interest in securing confidential information. The purpose in
these situations is to encourage cooperation with the Government by persons
having information useful to officials.
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If organizations are not sure that the information will remain confidential they
will not give it to the government, thus impairing the governments ability to make
well-informed decisions.
Thus, when information is obtained under duress, the Government interest is in
ensuring its continued reliability; when that information is volunteered, the
government interest is in ensuring its continued availability.
The court goes on to say that the distinction between voluntary and compelled
information must be made when applying the “competitive prong.”
In the case of voluntary submission under the Trade Secrets exemptions is the
protection of information that, for whatever reason, “would customarily not be
released to the public by the persons form whom it was obtained.
Accordingly, while we reaffirm the National Parks, test for determining the
confidentiality of information submitted under compulsion, we conclude that
financial or commercial information provided to the Government on a voluntary
basis is “confidential” for the purpose of the Trade Secret exemption if it is of a
kind that would customarily not be released to the public by the persons from
whom it was obtained.
The court discusses the “immunity bath” that there is nothing in the APA that
makes them give up this information, so basically it is left up to agency discretion.
FOIA Exemptions (continued)
5) Inter – or Intra-Agency Memoranda – This exempts inter and intra agency
memorandum and letters, “which would not be available by law to a party other than
an agency in litigation with the agency.” The Supreme Court has recognized five
broad categories that fit within this exemption.
1. Executive Privileged Material
2. Attorney Work-product
3. Attorney-Client Confidential Communication
4. Confidential Commercial Information of the Government Itself
5. Factual Statements made to aircrash investigators
 Courts have often times used a functional approach when looking at this
exemption, including documents from persons participating in the decisionmaking
process, such as advisory committees, consultants, and contractors. The
relationship to the agency has brought these people within the exemption.
6) Personal Privacy – This protects “personnel and medical files and similar files
the disclosure of which would constitute a clearly unwarranted invasion of
privacy. The supreme court has given a broad reading to the nature of the files
subject to this exception, finding that they refer to “detailed government records
on an individual which can be identified as applying to that individual.”
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Whether disclosure of the record would constitute “a clearly unwarranted invasion
of privacy.” This requires a balancing between the public interest in disclosing the
information and the private interest in maintaining confidentiality. Often times
records can be disclosed by deleting identifiable information, thereby protecting
the privacy interest.
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The case law established that only individuals have a privacy interest under
exemption 6, not corporations or business associations.
7)
Law Enforcement Records – This exempts records compiled for law
enforcement purposes, but only if the record would cause one of six specified
harms.
 Interfere with enforcement proceedings, deprive a person of a fair
trial, constitute an unwarranted invasion of privacy, disclose the
identity of a confidential source, disclose confidential investigate
techniques and procedures, or endanger the life or safety of law
enforcement personnel.
8) Financial Institution Records and Oil Well Data – The purpose is to
protect information about financial institutions which the government
collects in the course of its regulatory functions.
Reverse FOIA Suits
 The question arises, what recourse is there for the person to whom the information
relates to influence or object to the government’s release of information pursuant
to an FOIA request.
Executive Order 12600 Pre-disclosure Notification Procedures For
Confidential Commercial Information
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This was an executive order which told the head of each agency to notify the
submitters of records containing confidential commercial information that the
records are going to be disclosed.
This also provides the submitter a period of comment after he has received the
notice.
The agency has ten days to notify the submitter about the request.
The submitter then has 20 days to appeal the decision.
Chrysler Corporation v. Brown
441 U.S. 281 (660)
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Chrysler was required by the DOL under its Federal Contract Compliance
Programs, pursuant to EO 11246, to provide reports about its affirmative action
programs and the general composition of the workforce.
Chrysler has made two arguments against releasing the information:
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1) That disclosure was barred by the FOIA
2) That it was inconsistent with 18 U.S.C. § 1905
Chrysler relies on exemption 4, the Trade Secrets Exemption in its argument that
there is no need to disclose the information.
The Court holds that Congress did not limits an agency’s discretion to disclose
information when it enacted the FOIA. It necessarily follows that the Act does not
afford Chrysler any right to enjoin agency disclosure.
Chrysler further argues that if they can bring a case under FOIA then they bring a
case under the Trade Secrets Act.
That § 1905 (TSA) is applicable to the type of disclosure threatened in this case,
and that it affords Chrysler a private right of action to obtain injunctive relief.
They then look at the “Housekeeping Statute” § 301, which provides that, “The
head of the executive department or military department may prescribe
regulations for the government of his department, the conduct of its employees,
the distribution and performance of its business, and the custody, use and
preservation of its records, papers and property. This section does not authorize
withholding information form the public or limiting the availability of records to
the public.”
The court tells Chrysler that there is no implied right of action, but they can get
agency action set aside. § 10(a) of the APA, provides that “[a] person suffering
legal wrong because of an agency action, or adversely affected or aggrieved by an
agency action….is entitled to judicial review thereof.”
In this case Chrysler tried to use FOIA #4, the court says that the agency has
discretion, so after the other two laws did not work Chrysler used the APA to go
after the agency action.
Setting Aside Action By An Agency
 Arbitrary and Capricious
 Contrary to Constitutional Right
 Violation of Statute
 Without Procedure required by Law.
Federal Advisory Committee Act (665)
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This imposes limitation on the executive branch’s use of advice of committees
that include private persons.
FACA sets a two-year limit for all advisory committees, except those created by
statute with a different period, but it allows the President or agency head to extend
a committee for an additional two years.
The problems that lead to FACA were based on undue influence, that: 1) there
was a limited membership designed to reflect one point of view, 2) the relative
secrecy in which advisory groups operated.
FACA addressed these by:
1. Requiring the membership of advisory committees be fairly balanced in
terms of the points of view represented and the functions performed by the
advisory committee.
2. No meeting can occur without the presence of a federal official or
employee, and the officer or employee is authorized to adjourn the
meeting at time he determines it to be in the public interest.
3. Openness requirement- that the committees keep detailed minutes of each
meeting and copies of all reports received, issued, or approved by the
advisory committee.
Public Citizen v. DOJ
491 U.S. 440 (1989) (669)
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The question is whether FACA extends to the DOJ’s use of the ABA to choose
judicial candidates at the federal level.
The main issue is what is the meaning of the word “utilize” in the context of
FACA.
The court says that a literalistic reading of FACA would bring the ABA within the
ambient of this legislation, but it would also bring into this law many other groups
that the Congress could not have intended to include.
Hence they say that when Congress passed FACA they did not intend that the
ABA be included as an “advisory committee.”
The court also says that this could cause some serious Constitutional issues, to
include the ABA within the ambient of FACA – in that it infringed on the
President’s Article II power to nominate federal judges and violated the doctrine
of separation of powers.
Northwest Forest Resource Council v. Espy
846 F. Supp. 1009 (D.D.C. 1994) (675)
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The plaintiff contended that FEMAT constitutes an advisory committees under
FACA, and hence the public had a right to participate in the process.
The defendants tried to argue that FEMAT was not an advisory committee, but
the court answers by saying that unless FEMAT can fit within one of the
exceptions under FACA, then they are an advisory committee.
One of the exceptions is that wholly governmental committees are not governed
by FACA.
The defendant tried to persuade the court that five outsiders that, who were state
officials were actually employees of the federal government when they were
working on FEMAT; the court dismissed this.
The FEMAT people also tried to argue that the FEMAT process was “open”
because you had people from all walks of life that allowed for different people to
be heard.
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In the end the court said that they violated FACA by not allowing public
participation or fitting with one of the exceptions of FACA.
Sunshine Act (679)
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Founded on the idea that the government’s business should be open to the public.
The requirement of the Sunshine Act is that, “every portion of every meeting of
an agency shall be open to public observation.
Limitations:
1. definition of agency – “headed by a collegial body composed of two or
more individual members, a majority of whom are appointed to such
position by the President with the advice and consent of the Senate, and
any subdivision thereof authorized to act on behalf of the agency.” (i.e.
FCC, FTC, subject to SA).
2. definition of meeting – In order to for the Sunshine Act to apply there
must be a meeting of at least a quorum of the members of the agency
required to take action.
3. There are exceptions where the public interest is better served by keeping
the meeting closed. These exceptions mirror many of the FOIA exception,
the three additional exceptions are:
1. “accusing a person of a crime, or formally censuring any person.”
2. “in the case of agencies, regulating currencies, securities, or
commodities, information the disclosure of which would likely
lead to significant financial speculation or significantly endanger
the stability of any financial institution, or in the case of an agency
it would likely significantly frustrate implementation of a proposed
agency action.
3. Information relating to an agency’s issuance of a subpoena,
participation in a civil action, or the conduct of formal agency
adjudication
In order to give effect to the requirement for open meetings, the Sunshine Act
requires agencies to give at least seven days notice of a meetings subject matter,
time, place, and whether the meeting will be open or closed. Notice must also be
published in the Federal Register.
FCC v. ITT World Communications, Inc.
466 U.S. 463 (1984) (681)
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This case required the court to decide if the Sunshine Act applies to informal
international conferences attended by members of the FCC.
At the time of the meeting only three US companies provided oversees record
telecommunication services.
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The respondent in this case has argued that the Consultative Process sessions are
“meetings” under the SA.
The court held that SA does not require the Consultative Process are neither
“meetings” nor a meeting “of the agency.”
§ 552b(a)(2) limits the acts application to “where at least a quorum of the
agency’s members….conduct or dispose of official agency business.
The court says that the SA does not extend to deliberations of a quorum of the
subdivision upon which matters not within the subdivision’s formally delegated
authority. Such deliberations lawfully could not “determine or result in the joint
conduct or disposition of official agency business” within the meaning of the act.
For these reason the court says that the FCC did not take part in “meetings” as is
stated under the SA.
Judicial Review
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§ 706 directs the reviewing courts to hold unlawful agency action “not in
accordance with law,” and agency action “in excess of statutory jurisdiction,
authority, limitations, or short of statutory right.”
Chevron v. Natural Resources Defense Council, Inc.
467 U.S. 837 (1984) (148)
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The major issue in this case was agency discretion.
The NRDC brought this case after the EPA promulgated a rule which interpreted
the words, “stationary source” to include what the agency called a “bubble
policy.” In other words, the EPA defined the words, “stationary source” to include
all of the pollution-emitting devices within the same industrial group as though
the plant was encased within a single bubble.
The court declared that there is a two-part that must be applied to agency
discretion.
1. Has Congress directly spoken to the precise question at issue.
2. If Congress is silent or ambiguous on the issue, then the Court must ask
the question whether the agency’s interpretation is reasonable or
permissible.
Chevron Deference
 The key for the agency is step one. They want to be able to show that Congress
was ambiguous when they made the law.
 The question that remain is: How do you determine the language of the statute?
 Do you do through the entire legislative history in an attempt to get the
Congressional attempt (liberal) or;
 Do you do what Scalia says and what it says in the statute is what is there and that
is what the Congress intended (literalist).
Problem 2-9 Radiated Chicken Case
 The problem in this example was the difference between “equivalent” and
“same as.” It says that the USDA must make sure the poultry is subject to the
to inspection the “same as” that is applied to poultry in the US.
 It also says that the USDA should subject poultry that standards that are
“equivalent to” those in the US.
 “ same as” seems to mean identical; whereas “equivalent” means similar to.
 Australia attempts to say that “same as” is a functional identical and that can
do different things that achieve the same ends.
 On the other hand, we have laws and there are reasons why we do not want to
have our chicken radiated.
 The Congressional Record, took out “at least equal to” and replaced it with
“same as.”
 The Senate Markup kept the language “at least equal to”
 The Congressional language is the one that was voted on, does that cut in
favor of the floor definition?
 Who makes the call, the FDA or Judicial Review---probably the FDA, they
are politically accountable and the law may be changed later if needed.
Substantive Decisions
 When an agency promulgates a rule, it reaches two types of substantive decisions.
First, it determines on the basis of the evidence available to it, what are the
relevant facts. Next, it decides what type of rule, if any, is appropriate in light of
the those facts, choosing the regulatory option that will best further its statutory
mandate.
 Judicial Review under § 706 involves three issues: (1) what is the scope of
review: “arbitrary & capricious” or “substantial evidence”? (2) what constitutes
the rulemaking record to be reviewed by the court? (3) what obligations does the
scope of review impose on an agency to explain its decision?
Scope of Review
 § 706 stated that “substantial evidence” standards applies when an agency must
comply with sections 556-557 which involves formal rulemaking.
 Thus, normally in informal rulemaking the “arbitrary and capricious” standard
applies.
 “Substantial Evidence” This instructs the court to uphold a rule if it finds the
agency’s decision to be “reasonable” or the record contains, “such evidence as a
reasonable mind might accept as adequate to support a conclusion.”
 “Arbitrary and Capricious” This instructs the court to engage in a substantial
inquiry, a thoroughm probing in-depth review, to find arbitrariness, the court must
consider whether the decision was based on a consideration of relevant factors
and whether there has been a clear error of judgment.
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Post-Overton Park, the courts have also had to go over the record from the
informal rulemaking. The “record” basically includes any-and-all information
given to the agency for the rulemaking.
Overton Park is also the origin of the need for an agency to explain its decision in
informal proceedings. Consequently, this contemporaneous explanation was
similarly subject to judicial review.
Rulemaking Record
 § 706 requires the court to review the “whole record” when determining whether
to affirm a rule. What constitutes the ‘whole record” is the qiuestion.
 In formal rulemaking, you a have a substantial evidence standard, which means
that you have “evidence,” which includes testimony and evidence which the court
can review.
 In Overton Park, the court determined that the record would include, the
information that the agency actually considered in making its decision. This
usually includes, Federal Register notice for the proposed and final rule, the
comments that were submitted and any studies or data created or used by the
agency that were not published in the notices.
Adequate Explanation
 Judicial review over the years has focused on the fact that agencies need to provide
“adequate reasons” for the adoption of a rule.
 When an agency lack “adequate reasons” its actions is considered “arbitrary and
capricious”. But the court will usually remand the matter to the agency for an
explanation.
 The courts since Overton Park have applied a “hard look” standard to both “informal
rulemaking” as well as “informal adjudication” In that they have stated that “the court
must ensure that the agency, “has given reasoned discretion to all of the material facts
and issues.”
Problem 2-10
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The FTC promulgated a rule that required used car dealers to post on a window a
standard sticker that contained several consumer warnings, the two most
important being the Warranty Disclosure and Mechanical Defects Disclosure.
In 1983, before judicial review of the rule, the FTC announced that it would
reconsider its regulation, and the court remanded the rule back to the
Commission.
A Consumer Union sought review of the revised FTC decision.
Is this a policy decision by the Reagan administration and if so can do anything
about that?
Based on Motor Vehicles Manufacturers v. State Farm, you have to a reason
why the agency chose to do this. That there is some rationale for their decision. A
connection between the facts and the agency decision.
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There is a Wisconsin Law that actually did the same thing as the original and so
far the law has failed to make cars safer, in fact it has simply made people only
feel safer.
Other things were: dealer knowledge of defects and buyer knowledge under the
defects disclosure provision.
Hence the FTC says this is not solely a policy decision by Reagan.
Opponents of a rule – should always argue pure politics and look for judicial
review.
Supporters of a rule – look for rationale to tie to your advancement. The record
should be your basis. You need to control the record because that is what the court
will look at on review.
Motor Vehicle Manufacturers Assoc. v. State Farm Mutual Automobile
Ins. Co.
463 U.S. 29 (1983) (176)
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In 1981, the Sec of Transportation reopened a rulemaking because of changed
economic situations and difficulties to the automobile industry (the rule dealt with
mandatory passive restraint regulations).
Months later after notice, comment and written hearing, they issues a final rule
rescinding the passive restraint requirement.
They stated that unlike when the original rule was issued, they could no longer
see that this rule would produce significant safety benefits.
The Motor Vehicle Safety Act indicates that motor vehicle standards should be
promulgated under the informal rulemaking procedures of § 553 of the APA.
Hence this standard should be set aside if it is found to be arbitrary and capricious
or abuse of discretion, etc.
The court says that the agency must explain the evidence which is available, and
must offer a “rational connection between the facts found and the choice made.”
In this case the court states that the NHTSA did not offer a rational connection
between the facts and why they made the decision that they did, and although they
have the option of changing a rule, they must explain there reason for doing so
and in this case, the reason was not rational.
Dissent stated that as long as the agency stays within the bounds set by Congress
it is entitled to assess administrative records and evaluate priorities in light of the
philosophy of the administration.
Overton Park (note) – OP suggests that §706(2)(A), which directs a court to ensure that
the agencies decision is not arbitrary and capricious, imposes a general procedural
requirement of sorts by mandating that an agency take whatever steps needs to provide an
explanation that will enable the court to evaluate the agency’s rationale at the time of
decision.
Problem 2-11 Do you always bring an appeal?
 First is the use of effective advocacy during the legislative and rule-making
process, but if that fails?
 The first issue is whether the company has alternatives other than a court
challenge that may be less expensive, more effective or both.
 Second issue to be considered in deciding on the advisability of a court challenge
is vulnerability of the rule.
 Third, what will be the cost to your company in bringing the appeal?
Problems 2-12 Appeal for Purposes of Delay?
 Is it ethical to challenge a rule simply because you want to delay the use of that
rule?
 The difference between representing your client the best of your ability or just
bringing a frivolous claim
 Rule 11 of the FRCP.
Adjudication
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Formal v. Informal
Formal (§ 554, 556, 557) – This is in many ways like a jury trial without a jury
and instead you have an ALJ presiding.
Informal – There are no specific requirements, but there are requirements that are
applicable to all agency proceedings. The following are some of these rights:
The right in any proceeding to be represented by counsel or, if allowed by the
agency, by an other-qualified representative, the right of interested persons to
appear before an agency in any proceeding “so far as the orderly conduct of
public business permits”, the right to have an agency decide the issue within a
“reasonable time,” etc.
Normally, an agency will develop procedures applicable to particular types of
informal adjudication and publish them in the Code of Federal Regulations. These
requirements may be additions made by the agency or statutory mandates placed
on the agency by the Congress.
The difference between informal and formal is of importance, § 554 of the APA
states that formal adjudication applies “in every case of adjudication required by
statute to be determined on the record after an opportunity for an agency hearing.”
If section 554 applies then so does sections 556 and 557.
If 554 does not apply, the agency may provide for an adjudication governed only
by the minimal APA requirements of sections 555 and 558, whatever due process
might require, and whatever some other statute might require.
Problem 3-1 The NEA Hearing Process
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The NEA basically says that the hearings are not subject to sections 554, 556,
557, because they are questions of what is obscene, which is a question of
opinion.
Is there a due process question to be answered here?
These are not formal hearings under the APA, what rights do you have left?
Seacoast Anti-Pollution League v. Costle
572 F.2d 872 (1st 1978) (198)
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This is a pollution case dealing with thermal pollution, and the need to get a
permit to discharge the pollution into the water.
LOOK AT THE STATUTE
The petitioners assert that the proceedings that which the EPA used to decide this
case contravened certain provisions of the APA governing adjudication.
The court says that under the Federal Water Pollution Control Act (“FWPA”) you
are provided a public hearing, but it does not say that the hearing be “on the
record.”
They do not extend HBO
The court says that although it does not need to say “on the record” exactly to
have a formal adjudication, there is a substantive issue that needs to be addressed.
The court looks toward the statute and says that the statute does not indicate that
the determination need not be on the record, and we find no indication of a
contrary congressional intent.
Therefore the court says that this proceeding should be adjudicate under §§ 554,
556, and 557 of the APA.
Compare this to rulemaking in Florida East Coast
City of West Chicago v. US Nuclear Regulatory Commission
701 F.2d 632 (7th Cir. 1983) (202)
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Kerr-McGee was licensed to handle radioactive material in the City of Chicago.
The City demanded a hearing a went to court to get an injunction.
They were granted the injunction, KM was enjoined from their activities and the
judge told the NRC to give notice to the City and consider any request for a
hearing that the City might make.
The NRC did so and rejected the City’s final attempt to get a formal, trial type
hearing.
The City points the Atomic Energy Act (“AEA”), which requires the NRC to
grant a “hearing” if requested when it includes granting, suspending, revoking or
amending a license.
The issue in this case is what type of “hearing” should the City get; they say
section 556, 557 “formal,” the NRC says “kiss-my-ass.”
The court says that you do not need to see in the statute, “on the record” but in the
absence of those words, Congress must clearly indicate its intent to trigger the
formal, on-the-record hearing provision.
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The City points to the fact that in the past the AEA did hold formal hearings on
issues similar to this, the court says that is great, but it does not say in the statute
that they must hold a formal hearing.
The court says that unlike the “on the record” requirement of the FWPCA, there is
no indication even in the judicial review Section of the AEA, the governing
statute, that Congress intended to require hearings under the APA….the point,
look to Congressional intent.
Chemical Waste Management, Inc. v. EPA
873 F.2d 1477 (D.C. Cir. 1989) (204)
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The petitioners are seeking review of an EPA regulation that grants an informal
procedure for administrative hearings under RCRA.
Subsection (a) of RCRA section 3008 deals with the assessing of civil penalties.
The EPA promulgated procedural regulations to implement the “public hearing”
provision of section (a). These procedures conform to the provision of the APA
for formal adjudication.
However the statute only calls for formal hearings to challenges of subsection (h)
corrective action orders that include a suspension or revocation of interim status
or an assessment of civil penalties for noncompliance.
Other issues do not get a formal hearing.
The CWA wants a formal hearing and they argue that an informal hearing is
inconsistent with the intent of Congress.
This case is post-Chevron, so they give it the Chevron two-step:
1) Has Congress spoken to the precise question at issue, and if
not
2) Then they must ask whether the agencies answer is based
on a permissible construction of the statute, if so they must
defer to the agency.
The court decides that under Chevron that Congress has not given enough
guidance on this issue.
Therefore they concluded that the agency had provided a reasonable explanation
for its choice of informal adjudication.
Adjudication
 Pre-Chevron they looked at the facts and if it mentioned “hearing” in the statute
they would grant a formal hearing.
 Post-Chevron no clear congressional intent, meant agency discretion.
Adjudicatory Procedures
1. Notice:
o The APA requires that the proceeding begin with
NOTICE that includes the time, place, and manner of the
hearing; the legal authority for the hearing, and the
matters of fact and law asserted by whoever is bringing
the proceeding. 554(b)
2. Intervenors:
o The APA states that “as far as orderly conduct of public
business permits, an interested person may appear before
an agency” in a proceeding.” 555(b)- formal or informal,
rulemaking or adjudication
o Who can intervene? The court in Office of
Communication of United Church of Christ v. FCC held
that “if a person has standing to appeal the decision of the
agency, as a matter of the case and controversy
requirements of the Constitution, the person has a right
to intervene.
o However the D.C. Circuit held that standing and the right
to intervene are not held by the same standard when
intervention is sought under an agency mandate.
Envirocare of Utah v. NRC (pg. 210)
3. Settlement:
o The APA has always provided that there should be an
opportunity before a hearing for the parties to settle or
adjust their dispute. 554©, 556©(6).
o Administrative Dispute Resolution Act of 1990 allows
APA to use ADR techniques. Sections 571-583
4. Administrative Law Judges
o If there is a hearing, the APA states that one of three
entities must oversee the taking of the evidence: the
agency, one or more members of the body that comprises
the agency, or one or more Administrative Law Judges
(ALJs).
o Virtually all APA hearings are presided over by ALJ.
o ALJ has same types of authority as a Federal judge in a
trial without a jury.
o 555© allows the ALJ to administer oaths, issue
subpoenas, rule on offers of proof, receive relevant
evidence, take depositions, etc.
o 557(b) allows agencies to decide if ALJ is making final
decision or merely recommending decision to agency.
o ALJs function like judges but are not independent
because they are employees of the agency- tension,
neutrality etc.
o 554(d) prohibits empoloyees of agency from participating
in ALJ’s decision except as witness or counsel. This is
known as the Separation of Functions.
o 3 exceptions to the separation of functions:
 1- Initial licensing
 2- Proceedings involving validity or
application of rates or practices of public
utilities or common carriers
 3- “The agency or a member or members of
the body comprising the agency.
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ALJs are subject to disqualification in cases
of personal bias. 556(b)
5. The “Split-Enforcement” Arrangement:
 APA allows for head of agency to serve as both
prosecutor and adjudicator, however Congress has
“SPLIT” these functions in two areas:
o 1- The Occupational Safety and Health
Administration (OSHA)
o 2- The Mine Safety and Health Administration
(MSHA)
o The OSHRC, an independent 3 member board
adjudicates OSHA cases.
o Creates the problem of what agency do you defer
to- OSHA or OSHRC
6. Burden of Proof:
o APA specifies that the proponent has the burden of proof.
556(d)
o In Director, Office of Workers’ Comp. Programs v.
Greenwich Collieries, the court clarified that this means
“burden of persuasion” not “burden of production.”
o APA requires that an agency’s decision “be supported by
and in accordance with the reliable, probative, and
substantial evidence.” 556(d)
o Substantial evidence does not mean quantity but rather
quality of evidence.
o Burden of persuasion requires at least a preponderance
of the evidence. Greenwich Collieries.
o 556(d) allows for hearsay evidence and other typically
excluded evidence so long as it is not irrelevant,
immaterial or unduly repetitious. However following
Richardson v. Perales, it is clear that hearsay cannot be
the sole evidence in a decision. (215)
7. Testimony and Documents:
o Ordinarily, the APA entitles parties to present their case
by oral or documentary evidence, to submit rebuttal
evidence, and to conduct cross-examination. 556(d)
o However, in adjudications involving claims for money or
benefits or applications for initial licenses, the agency is
allowed to provide for the submission of evidence in
written form, rather than orally. Id.
8. The Record and Ex Parte Communications:
o The transcript of testimony and exhibits, together with
any papers filed in the proceeding, constitutes the
exclusive record for decision. 556(e)
o This EXCLUSIVITY of the record created in the
proceeding is what marks “FORMAL” adjudication and
rulemaking under APA.
o While “INFORMAL” proceedings also have records,
those records were not necessarily compiled in a
“proceeding.”
o To protect exclusivity, the APA prohibits ex parte
communications during APA adjudications- sanctions etc.
See 557(d)
9. Appeals:
o Once an agency makes an initial decision, it becomes the
final decision of the agency unless there is an appeal.
o Agencies employ different appeal procedures. Some use
Review Boards. Others have Appeals Councils with
appellate judges.
o The most important distinction between litigation appeals
and agency appeals is that the APA states that “the
agency has all the powers which it would have in making
the initial decision.” De novo- not restricted to errors like
in traditional appeals. They can reexamine everything.
10. State Adjudication:
o Most states mirror Federal procedures.
o Some states employ “Central Panels” for ALJs, which
means they are not employees of the agency but instead
grabbed from a centralized pool.
11. Applying Adjudicatory Procedures:
o See problem 3-2: OSHA Hearing Procedures- pg. 218
MY SHIT
Notice
 The APA requires that the proceedings begin with notice that includes the time,
place and manner of the hearing, the legal authority for the hearing and the
matters of fact and law asserted by whoever is bringing the procedding.
Intervenors
 The APA states that, “as far as orderly conduct of public business permits, an
interested person, may appear before an agency” in a proceeding.
 This provision applies to both formal and informal rulemaking and adjudication.
 It is not clear though what it means to “appear” before an agency? Actual
appearance v. amicus.
 Office of Communication of United States Church of Christ v. FCC (1966) –
that if a person has standing to appeal the decision of the agency, as a matter of
the case and controversy requirements of the Constitution, the person has a right
to intervene. (Supreme Court case – pre-Chevron)
 Envirocare of Utah v. NRC (1999) – D.C. Circuit held that you can intervene “if
your interests may be affected by the proceeding” (they applied Chevron).
Settlement
 The APA has always provided that there should be an opportunity before a
hearing for the parties to settle or adjust their dispute.
Administrative Law Judges
 If there is a hearing one of three entities must oversee the hearing: 1) the agency;
2) one or more of the bodies that comprise the agency; or 3) and ALJ.
 As a practical matter the ALJ always presides.
 The ALJ has the same types of authorities as a federal judge without a jury
(administer oaths, issue subpoenas, settlement, evidence, etc.)
 However, unlike a judge, an ALJ is are employees of the agency that they work
for.
 The ALJ is subject to disqualification for personal bias or other reasons from
hearing a case, but it does not specify a standard.
Burden of Proof
 The APA specifies that the proponent has the burden of proof. Which actually
means the “burden of persuasion” rather than the “burden of production”
** For the record there is a bunch of other shit, that I did not cover, because we did not
cover it in class. (pages 209-218)**
Problem 3-2 OSHA Hearing Procedures
 Problems based on an OSHA violation for not wearing the proper safety
equipment when working with paint fumes.
 Lane argues that OSHA used the wrong regulation and that OSHA failed to carry
their burden of persuasion because they used hearsay-the affidavit of the inspector
to carry their burden.
National Labor Relations Board v. Local Union No. 25 IBEW
586 F.2d 959 (2d Cir. 1978) (219)
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Ernesto Flores filed a complaint with the NLRB alleging that the union has
engaged in unfair labor practices by failing to provide him with a job referral
because he was not a member of a union.
The ALJ decided that the IBEW was wrong in its action and then he went on to
decide the legality of Article XI of the collective bargaining agreement.
The IBEW argues that the judges decision that Article XI is invalid violates the
APA because this issue was not in the briefs and was brought up at no time prior
to the judge deciding the issue.
Hence the respondents did not receive notice that is required by the APA.
Southwest Sunsites, Inc. v. FTC
785 F.2d 1431 (9th Cir 1986) (220)
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The petitioner is appealing the decision of an FTC Commission’s ruling on the
grounds that using a new deception standard violates the APA.
The petitioners sold land in Texas and as result the FTC lodged a complaint
contending that the petitioner engaged in unfair and deceptive practices in
violation of section 5 of the FTCA.
The ALJ used a standard that stated, “any advertising representation that has the
tendency and capacity to mislead or deceive a prospective purchaser is an unfair
and deceptive practice.”
The Commission applied a “new standard” “The commission will find deception
if there is a representation, omission or practice that is likely to mislead the
consumer acting reasonably in the circumstances to the consumer’s detriment.
Petitioners contend that this violated section 554(b) of the APA which requires
that they be “timely informed of the matter of fact and law asserted.”
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The court says that the purpose of the notice requirement of APA is that the party
proceeded against “understood the issue” and was afforded full opportunity” to
justify his conduct.
The court says that the commissioner made his decision based on a standard that
more narrow, but completely subsumed in, the prior theory. All evidence relevant
to the old theory was necessarily relevant to the new.
John D. Copanos and Sons, Inc. v. FDA
854 F. 2d 510 (D.C. Cir. 1988) (222)
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Under the Food Drug and Cosmetic Act (FDCA), the FDA after due notice and
opportunity for hearing to the applicant, can withdraw its prior approval for the
product
The standard to measure these products is the FDA’s “Current Good
Manufacturing Practice” (CGMP) regulations.
Drugs produced in violation of the CGMP are deemed adulterated without the
agency having to show proof that they are actually contaminated.
The petitioner was told on several cases that they were in violation and in
response told the FDA that they would come into compliance. Finally, the FDA
published a notice in the FDA to withdraw the petitioners drugs (NDAs and
NADAs).
The Notice for Opportunity for a Hearing (NOOH) stating that if Kanasco wanted
a hearing that had to submit information that will show why the FDA should not
rule against, if they fail to give information, there will be no hearing and summary
judgment is order against Kanasco.
By Notice, the FDA withdrew the drug and denied the hearing request.
The agency may by regulation provide for summary withdrawal of approval when
there is no “genuine and substantial issue of fact that requires a hearing.
In this case Kanasco did not provide the information, so the FDA rules against
them.
Wallace v. Bowen
869 F.2d 187 (3d Cir 1989) (226)
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The petitioner was denied social security disability insurance benefits.
He appeals on two grounds: 1) He argues that the ALJ’s reliance upon medical
expert testimony expert testimony obtained after the hearing without an
opportunity to cross-examination by Wallace denied his due process rights. 2) He
maintained that the ALJ’s decision is not supported by substantial evidence.
The Social Security Act states that, “if a hearing is held, shall on the basis of
evidence adduced at the hearing, affirm, modify or reverse his findings of fact and
such decision.”
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The court says that based on this statute the ALJ cannot rely on post-hearing
reports for their decision without giving the claimant an opportunity to crossexamine.
The court looks at Richardson v. Perales and says that an opportunity to crossexamine is an element of fundamental fairness of the hearing to which a claimant
is entitled under this act.
Ex Parte Communications
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Ex Parte communications do not affect informal adjudication, only formal
adjudication.
The prohibition of ex parte communications applies to “any interested party
outside the agency.”
When agencies are engaged in formal adjudication, section 554(d) prohibits an
employee or agent engaged in the performance of investigative or prosecuting
functions” in a case (or a factually related case) from participating or advising in
any aspect of the agency’s decision in that matter.
Thus, section 554(d) bars communication between an employee and the ALJ an
administrator, or any member of a Commission or Board, who is responsible for
making a decision in a matter in which the employee has served as an investigator
or prosecutor.
Problem 3-3 White House Contacts
Problem 3-4 Internal Agency Contacts
PATCO v. FLRA
685 F.2d 547 (D.C. Cir 1982) (236)
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Case came about in response to Reagan (the greatest President in the last 70 yrs.)
fired the Air Traffic Controllers after they went on strike.
The FLRA considered the case, but during the decision-making process of the
PATCO, there were some allegations of ex parte communication by members of
the FLRA staff.
The ALJ that reviewed the ex parte matter came up with three instances to be
reviewed.
1. Meeting between Member Applewhaite and FLRA General Counsel
Gordon – This was non-PATCO related. But during the meeting Ms. Stern
entered the office of Applewhaite and discussed in front of Gordon, a
memo dealing with strikes. They did not talk about PATCO at any time.
2. Secretary Lewis’ Telephone Call to Members Frazier and ApplewhaiteThis was not a call about PATCO but to tell Frazier that the strike
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negotiations were not going as smoothly as had been reported. There was
no further talk about the PATCO issue.
3. Member Applewhaite’s Dinner with Albert Shanker – Shanker was the
President of the American Federation of Teachers and on the Executive
Council of the AFL-CIO. These two men were friends outside of the work
atmosphere. Mr. Shanker admits that he wanted to have dinner with
Applewhaite to discuss the PATCO problems, in response, Applewhaite
said nothing.
APA 557(d) governs ex parte communications, the three features that are relevant
here are:
(1) Section 557(d) only applies to ex parte communications to
or from an “interested person.” The term was intended to
be wide and inclusive, basically a person with an interest in
the agency proceeding that is greater than the general
interest the public as a whole may have.
(2) “Ex parte” is defined as “an oral or written communication
not on the public record to which reasonable prior notice to
all parties is not given.”
(3) Section 557(d) explicitly prohibits communication
“relevant to the merits of the proceeding.” Congress
explicitly note that the statute does not prohibit procedural
inquires or other communications “not relevant to the
merits.”
Remedies: 1) Disclosure of communication and its content. (2) 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.
Things to look at for remedies: the gravity of the ex parte communications;
whether the contracts may have influenced the agency’s ultimate decision;
whether the party making the improper contacts benefited from the agency’s
ultimate decision; whether the party making the improper contacts benefited from
the agency’s ultimate decision; whether the contents of the communications were
unknown to opposing parties.
The court in this agreed with the ALJ that the ALJ that the ex parte contacts here
at issue had no effect on the ultimate decision of the FLRA.
They stated that the worst instance was the last case with Shanker and that was
not to the degree that it lead to any procedural unfairness on any of the parties.
Stone v. FDIC
179 F.3d 1368 (Federal Circuit 1999) (246)
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Stone was fired from the FDIC for submissions of false requests for leave.
Stone appeals on the basis that there was ex parte communication dealing with his
firing.
He says that the ex parte information introduced new highly prejudicial
information against him. Which he says violates his due process.
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Stone wants the court to use the “harmless error test” The objective test would not
focus on whether the deciding official actually would have reached the same
result if there had been no procedural defect, but rather would focus on whether
the error is so likely to have prejudiced the deciding official that the proceeding
should be voided.
The court states that Stone’s due process claim is dependent on his having a
property right in his continued employment.- his was a civil servant so, yes.
What process is due to Stone? The Supreme Court has rules that an a public
employee deservers a right to respond to the allegations against him.
The introduction of ex parte communication affects a pubic employees due
process right to notice and the opportunity to respond.
Not all ex parte communication will be a procedural defect that is so substantial
that it undermines the due process guarantees and entitles the claimant to a new
hearing.
Only those communications that introduce new information, they should also look
to see if the employee had a chance to respond to this information, it is totally
new or just cumulative.
If the board finds that new information has been introduced by means of ex parte
communication, then a due process violation has occurred and the former
employee is entitled to a new constitutionally correct removal procedure.
Due Process Hearings
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In determining the Due Process Clause, the first issue is whether the clause
applies at all; the second issue, presuming the clause applies, is what procedures
are required.
B. Due Process Hearings:
o The Due Process Clause (5th and 14th- Federal/State) provides that no
person shall be deprived of life, liberty, or property without due
process of law. It can be either SUBSTANTIVE or PROCEDURAL.
o Administrative Law deals with Procedural due process problems.
o Determining procedural requirements of the Due Process Clause:
 1- Whether the clause at all?
 2- Assuming the clause applies, what procedures are
required?
 The Due Process Clause requires the government to
hold some type of hearing before it deprives an
individual of “life, liberty, or property” based on the
resolution of disputed factual issues pertaining to the
person.
 Two prerequisites to whether due process applies:
 1- Individualized decision-making
 2- Deprivation of a property or liberty
interest.
Individualized Decision Making
Londoner v. Denver
210 U.S. 373 (1908) (251)
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Plaintiffs in this case have a file a suit to relieve them of a tax that they being
forced to pay for the cost of paving a street upon which their land is abutted.
The question raised by the landowners is that the assessment was made without
notice and opportunity for hearing to those affected by the law, thereby denying
them due process.
The court says that these taxpayers should have right to be heard about this issue.
It was not enough in this situation that they had an opportunity to submit in
writing their thoughts about the tax.
The court says that a proceeding about the taxation should be given to these
people for due process reasons.
The city council in this case was acting as an arm of the state, so these people
have due process rights.
Bi-Metallic Investment Company v. State Board of Equalization
239 U.S. 441 (1915) (252)
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This was a suit to enjoin the SBE from putting in force an order that would
increase the valuation of all taxable property in Denver 40%.
The plaintiff had broad this suit on the grounds that it was not heard on this issue
and therefore its property will be taken without due process.
The question is that when all people are equally affected do they have a right to be
heard.
When the general public is affected the only remedy you have is to go to your
elected representatives and get them to change the laws.
This is distinct from Londoner
Protected Interests
Problem 3-5 Definition of Property and Liberty
 Jeremy is charged with plagiarism for quoting sentences from judicial decisions
without using quotations.
 He violated the honor code.
 He was given a right to go before the committee, given the notice of charge, he
wanted to have counsel and he pleaded ignorance, he also told the Honor

Committee that he was told by his sister, a lawyer with the Public Defender that
she had done things like this all the time. He also called on other students to
testify to their understanding of the Honor Code. These requests were denied.
MY OPINION – THE LITTLE DOUCHEBAG DESERVED IT
Property Interest
 To determine whether the due process clause applies, a court must assess whether
the government’s action constitutes a deprivation of life, liberty, or property, for if
it does not, due process is not required at all. Prior to 1970, the court distinguished
between rights and privileges (government employment, welfare).
 The court abandoned the rights/privileges distinction in Goldberg v. Kelly 397
U.S. 254, (1970) – The Court reasoned that in modern society the loss of a
government entitlement, such as a welfare benefit, had the same adverse impact
on a person as when the government deprived someone of private property.
Board of Regents v. Roth
408 U.S. 564 (1972) (257)
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Roth was hired to teach at Wisconsin State University-at Oshkosh.
After a year he got shit-canned, he only had a contract for a year.
He brought this suit saying that the failure of the University to give him notice to
that he would be working there for the next year, violated his due process rights.
The court says that they did not make any charges against him that may hurt him
in the community when they fired him. If so, they would have had to had gave
him notice and an opportunity to be heard Wisconsin v. Constantineau
In order to have a due process claim you must have a property interest and in this
case he did not have one. Even a property interest in a benefit Goldberg, can give
you a property interest, in this case there was not interest, at the end of the year
his property interest was extinguished (the length of the contract).
Liberty Interests
 Liberty means freedom from bodily restraint or injury.
 According to Meyer v. Nebraska, “liberty includes all of those privileges long
recognized…..as essential to the orderly pursuit of happiness by free men.”
 Thus, the court held that the government triggers due process protection when it
denies or revokes a person’s license to engage in a profession.
Paul v. Davis
424 U.S. 693 (1976)
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Respondent has brought this case stating that the petitioner defamed him and that
he is looking for relief under the 14th Amendment.
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Paul put out a flyer that listed the name and photograph of people that had been
arrested for crimes in high density shopping areas. The purpose of the flyer was to
alert businessmen in the area that these people may strike again.
The respondent claims that this flyer violates his liberty rights.
He filed this claim for defamation on the grounds that he has been imputed with
criminal behavior which is defamation pre se.
The court says that reputation alone, without some more tangible interest such as
employment does not establish a “liberty” or “property” interest to the degree to
bring about a procedural protection under the Due Process Clause.
This has been called the “stigma-plus” test, that if all you have is the stigma, this
stigma must also subject someone to a disability.
Codd v. Velger
429 U.S. 624 (1977)
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Respondent alleges that he was wrongfully dismissed from his job as a NY
Policeman. At the time he was a probationary officer so he did not have a
property interest, but he claimed that he should have hearing due to the
stigmatizing material placed in his file by the police department.
He alleges that information put in this file has kept him from getting other jobs.
The fact of the matter is that he signed a release to allow his records to be
released.
The question is whether circumstances fall within Board of Regents v. Roth
The court says that in order to bring a suit under the Due Process clause there
must be some factual dispute between an employer and a discharged employee
which has some significant bearing on the employees reputation.
The respondent failed to prove the factual dispute, so there is no claim., there was
no need to have an “opportunity to refute the claim.”
Dissent: the purpose of the hearing should be two-fold; First, to establish the truth or
falsity of the charge, and second, to provide a basis for deciding what action is warranted
by the facts.
Shands v. City of Kennett
993 F.2d 1337 (8th Cir. 1993) (265)
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The city council dismissed the plaintiffs who were volunteer firemen for
attempting to undermine the authority of the Fire Chief.
The City’s letter stated that there reason for dismissal for insubordination and
misconduct.
The council released a letter to dispel rumors and misinformation concerning the
discharges.
The firemen claim that the City deprived them of a 14th Amendment liberty
interest without due process.
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The firemen claim that have been stigmatized by statements made about them;
they also claim that they were deprived of their procedural due process rights by
failing to provide a fair and meaningful hearing for them to publicly clear their
names.
A government employee is entitled to procedural due process in connection with
being discharged from employment only when he has been deprived of a
constitutional protected property or liberty interest.
To show that they had their liberty interest deprived the plaintiffs had to show that
a city official in discharging the plaintiffs, publicly made allegedly untrue charges
against them that would stigmatize them so as to seriously damage their standing
in the community or foreclose future employment opportunities.
In this case, they could not show that there was a level of stigma high enough to
implicate a constitutionally protected liberty interest.
Administrative Law Outline
Boyer
I. Initiating Rulemaking (48-74)
APA 553, 556, 706
Agency Inaction
Telecommunications Research & Action Center v. FCC
Denial of a Petition
Arkansas Power & Light Co. v. Interstate Commerce Commission
Northern Spotted Owl v. Hodel
II. Rulemaking Procedures (74-91)
Exceptions
1. General
2. From Notice and Comment
American Hospital Assn. V. Brown
Air Transport Assoc. of America v. Dept. of Transportation
JEM Broadcasting Co., Inc. v. FCC
Formal, Informal or Hybrid Rulemaking
III. Informal Rulemaking (91-111)
IV. Ex Parte and Related Problems in Rulemaking
V. Hybrid Rulemaking
VI. Access to Info.
A. FOIA
B. FACA
C. Sunshine
VII. Judicial Review:
A. Statutory Interpretation
B. Rationality
VIII. Adjudication Procedures
IX. Ex Parte Communications
X. Interests Protected by Due Process
XI. What Process is Due?
What Hearing Procedures Must Be Used?
Matthews v. Eldridge
(SC 1976) (p.268)
F: Filed action relying on Goldberg v. Kelly ( that held that due process was required an
evidentiary hearing prior to the temporary deprivation of funds. It held that welfare
assistance is given to be on the very margin of subsistence).
I: Whether the D.P.C. of the 5th Am. requires that prior to termination of SS disability
benefits the recipient be afforded an opportunity for evidentiary hearing?
H: An evidentiary hearing is NOT required prior to termination of disability benefits
R: Sets forth 3 factors to consider:
(1) whether private interest is affected by action;
(2) Risk of erroneous deprivation of interests thru procedures used and
probative value of additional/substitute procedures
(3) Gov’t interest (including fiscal/admin. burdens)
R: Court distinguishes disability from welfare (Goldberg).
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They say that in determining whether what has been provided here is
constitutionally sufficient requires an analysis of the governmental and private
interests that are affected.
Eligibility for disability benefits, in contrast to welfare benefits, is not based on
financial need.
Court says the private interest is uninterrupted relief, not sole source of income.
Medical assessment is reliable, unbiased, routine w/med. reports so risk of error
is less (but, how unbiased are they really??). Also, admin. burden would be high
b/c cost of hearings would increase.
The cost of protecting those whom the process has found to be undeserving may
come out of the pocket of those who are more deserving because the resources
that they have are limited.
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** “essence of D.P. is the requirement that ‘a person in jeopardy of serious loss [be
given] notice of the case against him and opportunity to meet it.’”
3 primary interests in determining proper procedures embodied in Matthews’ 3 part
test: acceptability (private interest), efficiency/cost (public interest), and accuracy
(risk of error/value of change).
Note Cases:
Richardson v. Perales: held no right to confront/cross-examine MDs re written health
evaluations for termination of disability benefits b/c this is less important where
credibility is not likely to be an issue.
Goss v. Lopez: held student in HS had legitimate entitlement to continued enrollment
when suspended and this required minimal procedures to satisfy due process
requirements (but not cross-examination, counsel or witnesses). Ct. uses balancing
approach: harm suffered; number of actions; cost to educational institution).
Cleveland B of Ed. V.Landermill: exigent considerations taken into consideration –
Board had probable cause, independent source and substantial interest in immediate
removal of security guard from premises.
Paul v. Davis: Deny d.p. claim for shoplifter flyer b/c tort of defamation provides legal
remedy for harm.
Daniels v. Williams: only deliberate decisions of gov’t officials will trigger proced. D.P.
Problem 3-6
Law student got hearing in front of student, assistant dean, and appointee by dean.
Recommended 1 year suspension and Dean decided to expel. Pretty good argument that
Dean had irrevocably closed mind (under Winthrow). But, tough to overcome
presumption of honesty/integrity.
Board of Curators of the University of Missouri v. Horowitz
435 U.S. 78 (1978)

Med student was dismissed by P during final year for failure to meet academic
standards (poor performance for a while – attendance, hygiene, negative
evaluations).
 P claims deprivation of liberty or property interest w/in meaning of 14th Am.
H: P’s decision was proper and claim cannot stand.
R: P must first show dismissal deprived her of liberty or property interest to get
procedural protection under 14th Am.
 In order claim property interest she would have had to have shown that her “seat”
at the university was a property interest; instead she choose to go after the liberty
interest in that it substantially impaired her opportunity to continue her medical
education
 The states that they are not going to decide if she had either property or liberty,
because the proper procedures were accorded – decision was careful and
deliberate. Which is what is need for due process.
 Court cites Goss and notes that even in school disciplinary setting, the Court has
stopped short of requiring formal hearings. Judgment is by its nature more
subjective and evaluative than typical factual Qs presented in average disciplinary
action decision.
Osteen v. Henley

13 F.3d 221(7th Cir. 1993)
P expelled for two years b/c fight. Claiming University violated D.P. by not
allowing him to have an attorney.
H: No right to counsel in student disciplinary proceedings.
 R: Ct. uses Matthews 3 prong test (indiv. right; risk of error; burden on
gov’t).
 Violation of state law is not a D.P. violation. Interruption by judge not valid
argument not good b/c this was to confine student to issue. Re: counsel, student
has right to consult w/atty, but not for him to participate. Also, sanction involves
no subtleties of law or facts – judgment rather than rule-guided.
 At most he has the right to get advice from an attorney, but the lawyer need not be
allowed to participate in the proceeding in the usual way; cross, etc.
Neutral Decisionmaker
Withrow v. Larkin
(SC 1975) (278)
MD got in trouble w/examining board. Brought D.P. claim b/c same people who
investigated charges were going to be ones adjudicating them.
I: Does this violate D.P.?
H: No. Combination of investigative and adjudicative functions in one place do not
automatically violate D.P.
R: Presumption of honesty and integrity in the Board.
 Difficult burden of persuasion to overcome—must convince, under realistic
appraisal of psychological tendencies and human weaknesses that risk of actual
bias/prejudgment so practice must be forbidden to guarantee D.P.
 Fact they took part in prior investigation does not necessarily mean that their
minds were irrevocably closed during evidentiary proceeding – Section 5 of APA
exempts agencies’ prohibition of combined investigatory and prosecutorial roles.
 Assume state administrators are men of conscience and intellectual discipline.
**Note: Bias is usually a personal attack/bribe; racial or other hatred.
 Prejudgment means previous decision on this case. Also, when adjudicative
facts in dispute, as opposed to legislative/legal, combination of roles can be
problematic – but must show the bias or prejudice – irrevocably closed mind.
XII. Choice of Rulemaking or Adjudication
Judicial Review:
1. The Substantial Evidence Standard: Substantial evidence standard comes from
§706(2)(E). This standard gives deference to agencies. Court’s role is not to
second-guess agencies, but to make sure decisions were Rable and within the
zone of the agencies’ expertise.
2. Substantial Evidence and the ALJ’s Credibility Findings:
Problem 3-8:
Testimony of boss and employee. Employee claims rights violated b/c sexist boss. Boss
says she did not like him b/c he did not ask her on dates. ALJ found Boss’ testimony
more credible.
Penasquitos Village Inc. v. National Labor Relations Board
(9th Cir. 1977) (286)

2 of P’s employees discharged. Allege that discharge illegal. NLRB reversed
decision of ALJ holding that P had not wrongfully discharged employees in
violation of NLRA.
H: Set aside Board’s order b/c have to give ALJ the benefit of the doubt, particularly on
matters of witness credibility.
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R: Generally, the Board’s factual determinations will be treated as conclusive if
“supported by substantial evidence on record as whole.
 But, here, weight is given to ALJ’s determinations of credibility b/c he or she sees
witnesses and hears them testify,
 While Board and reviewing courts look only at cold records.
 Note, though, that Board also gets deference b/c of expertise in labor-management
relations. Court finds that record as a whole did not contain substantial evidence
of unfair labor practices – decision rests primarily on discredited testimony.
Dissent: Leery of dependence on ALJ’s ability to discern credibility.
Note: **ALJ gets deference on credibility and demeanor issues.
**Agency gets deference on determinative inferences.
Jackson v. Veterans Administration
(Fed. Cir. 1985) (292)
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P fired by D agency based on 5 separate incidences of misconduct. Following
hearing b/f ALJ, P’s removal was revoked. Upon review,
Board reversed the ALJ (based on 2 of the 5 incidents). Court focuses on 2 of the
5 incidents in question (alleged kiss of employee and alleged request for kiss from
another employee).
I: Whether the Board’s evaluation of the weight of the evidence is Rable
(supported by substantial evidence) taking into consideration the ALJ, who heard
the witnesses, had evaluated the D’s evidence as insufficient to meet
preponderance of evidence standard?
H: Re first incident, goes more to credibility, so overruling ALJ was wrong. Re
second incident, goes more to facts b/c ALJ did not focus on credibility, so
Board’s ruling is sound. Court upholds Board’s discharge based on that one
incident.
NLRB v. Hearst
(SC 1944) (297)
 mixed Qs of Law and Fact:
F: D, publishers of 4 L.A. newspapers, refused to bargain collectively w/a union
representing “newsboys.” Newsboys filed unfair labor charge against D and NLRB
granted it.
I: Are “newsboys” “employees” w/in the meaning of the NLRA?
H: Court defers to Board’s determination.
R: Where the Q is one of specific application of a broad statutory term (i.e., employee)
in a proceeding in which the agency administering the statute must determine it initially,
the reviewing court’s function is limited.
 If agency determination has: “(1) warrant in the record” and (2) a Rable basis
in law,” it is to be accepted. Court applies this standard and finds agency
determination that newsboys are employees appropriate.
 Here, mix Q of fact (re newsboys) and law (re legal status as employee). Mostly
derivative inferences by Board.
Problem 3-8:
Dan Darby v. Female Trucker. ALJ finds Darby to be a more credible witness and rules
against employee. Can NLRB reverse? Are ALJ’s conclusions sound? Only grounds for
reversing ALJ would be to undermine his inferences (like in dissent in Penasquitos). Re:
derivative inferences, they are weak at best based on timing…
**NOTE:
(1) Q of Fact = don’t need law to make determination. Q of Law = don’t need facts
to make determination. But, rarely are there pure Qs of either fact or law. Often
it is a gray-area w/mixed Q of law and fact (p.296). Generally speaking, agencies
get more deference on Q of fact and courts considered more competent re Q of
law.
(2) Types of Factual inferences:
a) testimonial inferences (credibility/demeanor) and
b) derivative inferences (situational)
Problem 3-9:
Dead, adulterous guard. Mixed Q of fact and law – did employee’s death arise “out of
and in the course of employment”? Dead guard’s wife argues yes and TVA argues no.
Standard is broad statutory term, so Board’s determination will be upheld so long as there
is (1) warrant in the record; and (2) Rable basis in the law.
XIII. Choice and “Nonlegislative” Rules
**Legislative Rules = Rules that are legally binding (have legal force and effect)
Nonlegislative Rules = Agency pronouncements that advise the public of the
agencies’ view on an issue (but are not, by themselves, legally binding). Examples of
nonlegislative: admin. manuals, technical reports, congressional testimony, speeches to
industry groups.
A. Adjudication:
1) Advantages and disadvantages
Problem 4-1: FTC Adjudication: Re regulation of refunds.
(1) if adjudication, may be able to apply refunds retroactively. But, there is a
reliance/fairness issue b/c previous standards indicated it was legitimate.
Did not have notice. Ask: could petitioner have looked at body of
law/policy and say practice may be questionable. ALJ decisionmaker –
independent but may be giving deference to agency.
(2) if rulemaking, would apply across the board – clean up the industry.
Takes longer, people have say in rule to a point. Ask if going after entire
industry or only a few entities??
2) Legal Constraints
NLRB v. Bell Aerospace Co. Division of Textron Inc.
(SC 1974) (324)
I: (1) Whether Ps interpretation of NLRA standard of “managerial employees” to include
only certain employees of D (not buyers) is correct?
(2) Whether, in determining whether certain “buyers” are managerial employees, the
NLRB must proceed by Rulemaking or Adjudication.
H: (1) P applied wrong legal standard – some buyers are managerial employees.
(2) NO.
R:
 The court stated that the NLRB did not have to invoke rulemaking to determine if
certain buyers were managerial employees
 Although rulemaking would be more thorough and clear, it was not required.
 The Court of Appeals that thought that it should be rulemaking because it applied
to all involved.
 Cites Chenery and Wyman-Gordon for proposition that P “is not precluded from
announcing new principles in an adjudicative proceeding and that the choice b/w
rulemaking and adjudication lies…w/in the Board’s discretion.” Board’s
judgment that adjudication best serves their purposes is “entitled to great weight.”
 There are some cases where the choice would be arbitrary and abuse of discretion
and violate the APA this is not one of them.
 This is not a case of fines or damages or imposition of new liabilities, so burden is
not too bad.
 Gives agency discretion over what process to choose.
Retail, Wholesale and Department Store Union v. NLRB
(DC Cir. 1972) (326)
retroactivity case:
F: NLRB retroactively applied a new policy to P’s actions in failing to hire back
permanently replaced strike workers. They said co’s are obligated to offer reinstatement
to strikers.
 This was done through an adjudication rather than a rulemaking.
H: In this case, retroactive application was bad.
R: Applied:
(1) Chenery balancing test
 retroactivity must be balanced against mischief of producing result
which is contrary to statutory design or legal and equitable principles
– if mischief greater than ill effect of retroactive application of new
standard, it is not type of retroactivity which is condemned by law).
(2) Also lists some consideration for applying test:
 whether case of first impression;
 whether new rule represents abrupt departure from well established
practice or merely attempts to fill void in unsettled area of law;
 extent to which party against whom new rule is applied relied on former
rule;
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degree of burden which retroactive order imposes on party;
statutory interest in applying new rule despite reliance of party on old
standard).
**The court says that this was there second shot at this law that they had already
provided a rule and this was a case of 2d impression, the fact that they adjudicated after
they forced them to change already once, is completely wrong. They are being punished
for conforming.
B. Nonlegislative Rules
1) Advantages
 Minimum requirements on agencies for nonlegislative rules (i.e. technical
assistance programs/speeches…).
 Conflict b/w external and internal accountability:
a) external accountability: structured participation + judicial
review
b) internal accountability: Checks for standard
procedures/professional norms/funding abuses by getting
everyone on same page.
Problem 4-5 (345):
OSHA says employee may accompany inspector. Could do it as legislative rule, but
would you want to do it w/informal action (policy)? This would be non-binding and
open to challenge by other interpretations. If go rulemaking, lower standard of review
b/c arbitrary and capricious – so, if policy questions have data on both sides, …
2) APA Procedures
Spectrum: Adjudication
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Rulemaking
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Informal Action
Re: Rulemaking, have Legislative (require notice and comment); Interpretive (may or
may not be required to be in the federal register); Policy (minimal requirements).
3) Distinguishing Nonlegislative from Legislative Rules
a. Policy Statements—issued by agency to advise public prospectively of
manner in which agency proposes to exercise a discretionary power in
subsequent adjudication or rulemaking.
 Announces agency intends to adopt new duty in future (distinguished
from adjudicative procedures that asks whether statement imposes a
new duty or merely announces the intention to impose a new duty at
some future time—courts use a binding test to distinguish policy
statements from legislative rules.)
American Hospital Association v. Bowen
(1987) (350)
F: Congress empowered HHS to promulgate rules governing PROs. Parties agree
regulations were in conformance w/§553 of the APA, but challenges a series of directives
and transmittals (including a RFP).
I: Whether Dept. of Health & Human Services erred by not first undertaking notice and
comment rulemaking in implementing peer review system?
H: HHS did NOT err and D.C. wrongly invalidated parts of RFP it deemed legislative.
Rule: General policy statements merely announce tentative plans for future and are
not binding norm. Substantive rules establish a conduct which has the force of law
in subsequent proceedings. Parameters fuzzy.
R: RFP is a nonbonding general statement of policy b/c binds neither agency nor
PRO…merely initial communication b/f negotiations.
 The purpose of the general policy statement is to allow the agency to
announce their “tentative intentions for future,” without binding
themselves.
 There is no binding norm.
 Two part test set forth in American Bus Association v. United States
1. Unless a pronouncement acts prosepectively, it is a binding
norm. Thus a statement of policy may not have a present effect:
“a general statement of policy is one that does not impose any
rights and obligations.”
2. Is whether a purported policy statement genuinely leaves the
agency and its decisionmakers free to exercise.
** The court said that an agency’s characterization of its own actions, while not decisive,
is a factor that we do consider.**
Community Nutrition Institute v. Young
(1987) (353)
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FDA issued notice to food industry identifying acceptable contamination for food
that would not institute enforcement proceedings.
Court held this statement was binding on the agency and therefore was a
legislative rule.
Rule is legislative if it is binding on the agency, regardless of whether it is
also binding on regulated entities.
b. Interpretive Rules – interprets or clarifies the nature of duties previously
established by an agency’s mandate/regulation (it is not binding itself and
can be ignored, but courts can give it some minimal level of deference).
Problem: 4-7: USDA Interpretive Rule
USDA issued an internal memorandum that dangerous animals must be inside fence at
least 8 feet high – inspector told her she needs to comply.
American Mining Congress v. Mine Safety & Health
Administration
(D.C. Cir. 1993) (357)
Issue: Whether Program Policy Letters of the Mine Safety and Health Administration,
stating agency’s position that certain x-ray readings qualify as diagnoses of lung disease
w/in meaning of agency reporting regulations, are interpretive rules under the APA?
HELD: YES.
Rule: Look at:
1. In the absence of the rule there would not be an adequate legislative basis
for enforcement action or other agency action to confer benefits to ensure
the performance of duties;
2. whether the agency has published the rule in the Code of Federal
Regulations;
3. whether the agency has explicitly invoked its general legislative authority; or
4. whether the rule effectively amends a prior legislative rule. If answer to any
of the Qs is affirmative, it is legislative rather than an interpretive rule.
R: Conclude this is interpretive. No legislative gap that required PPL as a predicate to
enforcement action. Nor did agency purport to act legislatively or include letter in code
of federal regulations.
** In these cases, the grounds for review are on a failure to follow 553 of APA.
*** The agency relies on the exemption of 553(b)(3)(A)
Metropolitan School District v. Davilla
(1992) (361)
F: Challenges d.c.’s grant of S.J. in favor of Metropolitan School District, holding that a
letter purporting to interpret part B for the IDEA was a legislative ruling subject to notice
and comment procedures of APA.
 In a letter, Navia stated that OSERS interpreted the IDEA to require states to
continue services for disabled children who are expelled or suspended for an
extended period for reasons unrelated to their disability.
 Position was not published in the Federal Register or the Code of Federal
Regulations and public comments were not solicited b/f it was issued.
 School district sued b/c it places a large financial burden on school districts and
districts are entitled to notice of proposed rule and opportunity for comment.
H: Court reverses and remands in favor of Davila and Dept. of Education – they are
entitled to judgment as a matter of law.
Rule: APA does not require agencies to follow notice and comment procedures in all
situations – 553(b)(3)(A) excludes interpretive rules, general statements of policy, or
rules of agency organization, procedure or practice.
 Starting point of court’s inquiry is agencies’ characterization of rule (not
disposative, but relevant factor).
 Legislative rules have force and effect of law – binding upon courts as
congressional enactments.
 Interpretive rules are given deference, but do not bind courts.
R: Letter simply announced OSER’s construction of IDEA and is an interpretive rule.
The letter interprets Supreme Court cases, the language of the Act and the legislative
history of the Act – classic tools reviewing body relies upon to determine the meaning of
a statute.
 Merely states what OSERS thinks statute means rather than creating new law,
rights or duties.
 Therefore, letter satisfies general test of an interpretive rule.
Note: prevailing authority rejects use of the substantial impact test as independent
means to distinguish nonlegislative from legislative rules (whether or not
pronouncement has a substantial impact on rights or duties of public) b/c it is
inconsistent w/section 553 – exempts nonlegislative rules regardless of their impact.
4) Legal Protection of Reliance on Nonlegislative Rules:
Alaska Professional Hunters Association, Inc. v. FAA
(1999) (366)
F: FAA published a “Notice to Operators” aimed at Alaskan hunting and fishing guides
who pilot light aircraft as part of their guiding service – requiring guides to abide by FAA
regulations applicable to commercial air operations.
 Beginning in 1963, the FAA, through its Alaskan Region, consistently advised
guide pilots that they were not governed by the regulations dealing w/commercial
pilots.
 This advice stemmed from Administrator v. Marshall (held did not require a
commercial aviation license b/c Marshall’s flight w/hunter in search of polar bear
was merely incidental to his guiding business, in part b/c he had not billed for it
separately).
 Not clear whether the FAA officials in DC were aware of the advice given. In
1992, the FAA issued a report expressing concern about safety records of guide
pilots w/o commercial licenses and in 1998 w/o responding to petition for
rulemaking by the Alaska Professional Hunters Association, the FAA published is
“notice to operators in the Federal Register.
I: Whether Section 553 of the APA required the FAA to proceed by way of notice and
comment rule making rather than by announcement in the Federal Register?
H: Notice and comment was required.
Rule: In Paralyzed Veterans, this Court held that rulemaking as defined by Section
551(5) includes not only the agency’s process of formulating a rule, but also the
agency’s process of modifying a rule – significant revision of an agency’s
interpretation of a rule is in effect amending a rule – where need notice and
comment.
R: Even if the FAA had in mind an interpretation different from its Alaskan Region,
guides and lodge operators in Alaska had no reason to know this – those regulated are
entitled to know the rules by which the game will be played.
Association of American Railroads v. Dept. of Transportation
(1999) (386)
F: Roadway Worker Protection Rule established procedures to protect roadway workers
from accidents involving trains.
 Dispute over precise amount of information about a red flag (notifying on-coming
trains that they are about to encounter employees working on the tracks) that
paragraph (c)(5) requires the dispatcher to give the train engineer.
 The FRA incorporated its view of this paragraph in a Workplace Safety Technical
Bulletin issued w/o notice and comment – directing that they must be provided
w/advance notification of type and exact location of the unattended red flags.
 AAR claims that the FRA had previously interpreted the paragraph as not
requiring this, and that the APA requires the agency to issue the bulletin thru
notice and comment rulemaking.
I: Whether Bulletin was subject to notice and comment rulemaking?
H: No –
R:
 The FRA never adopted a definitive interpretation of the paragraph that it could
change only thru notice and comment rulemaking.
 This case differs from Alaska Professional Hunters b/c:
 (1) none of the evidence comes close to the express, direct and uniform
interpretation present in that case;
 (2) issue had been subject to no official agency proceeding – no administrative
common law;
 (3) unlike guide’s reliance, nothing in record suggests that RRs relied on
Gavalla letter in comparable way – not claiming members made large
expenditures based on interpretation or altered business practices in a significant
manner.
 Read various letters relied on by AAR not as evidence of a firm agency policy,
but as agency’s initial efforts to respond to dispute over meaning of the
paragraph…controversy over meaning not resolved until issued technical bulletin.
XIV. Reviewability and Standing:
A. Introduction: First question is whether court has jurisdiction, one element of
which is whether the plaintiff has standing.
B. If a P has standing, a court must still have a statutory grant of jurisdiction over the
particular type of case.
C. Next, must have a cause of action (statute granting P some judicially enforceable
right Section 702 – cause of action is limited to persons suffering legal wrong or
those adversely affected/aggrieved w/in meaning of relevant statute).
D. Section 704 then deals w/finality doctrine. Section 704 deals w/exhaustion of
remedies.
E. Finally, common law doctrine of ripeness…
F. Standing: (has the P suffered an injury or about to suffer an injury cause by
the alleged illegal action, and would a favorable court decision remedy or
avoid that injury?)
1) Injury in Fact: If gov’t action injures a 3rd person in some real fashion,
then the person has suffered a sufficient injury for standing
purposes…court has resisted purely theoretical injuries.
2) Causation and Redressability: Whether the injury is the result of the gov’t
action – and would a favorable decision remedy the injury? Causation and
redressibility can’t be purely speculative.
3) Prudential Requirements: Not based on the constitutional requirement of
case and controversy – requires that injury suffered is not a generalized
grievance suffered equally by large numbers of people and that P is not
asserting the rights of a 3rd person. Note that Section 702 limits judicial
reliance on this requirement by providing cause of action to any person
suffering legal wrong b/c of agency action.
4) Standing in the States: Most developed own rules similar to federal.
5) Litigation of Standing:
Lujan v. Defenders of Wildlife
(1992) (441)
F: Challenging rule promulgated by Secretary of Interior interpreting the ESA to render it
applicable only to actions w/in US or on high seas.
 Claim lack of consultation re certain funded activities abroad increases the rate of
extinction of endangered species.
I: Whether the respondents (P) have standing to seek judicial review of rule?
H: Court of Appeals failed to apply correct rule – hold that respondents have not made a
requisite demonstration of at least injury and redressability.
Rule: Constitutional minimum of standing contains three elements: (1) P must have
suffered an injury in fact that is concrete and particularized and actual or imminent
(not conjectural or hypothetical); (2) must be a causal connection b/w injury and
conduct complained of and injury has to be fairly traceable to challenged action of
D and not result of independent action of 3rd party; (3) must be likely as opposed to
merely speculative that injury will be redressed by a favorable decision.
 If P is an object of the gov’t action at issue, there’s ordinary little question that the
action/inaction has caused him injury.
 But, when Ps asserted injury arises from gov’ts allegedly unlawful regulation of
someone else, more is needed. Often hinges upon response of regulated 3rd party
– burden on the P…
 Injury in fact test requires more than just cognizable injury. Affidavits don’t
show how damage to species will produce imminent injury to Ps.
 Also fail redressability b/c agencies funding projects not parties to case, so d.c.
could only order Secretary to revise regulations to require consultation for foreing
projects – would not remedy the alleged injury unless funding agencies bound by
Secretary’s regulation (open Q). Also, agencies supply only fractional amt. Of
funding
 Generalized grievance cases not enough…
FEC v. Akins
(1998) (421)
F: FEC determined American Israel Public Affairs Committee is not a political
committee as defined by FECA and has therefore refused to require them to make
disclosures.
H: Respondents, group of voters, have standing to challenge the Commission’s
determination in court and remand for further proceedings.
R:
 Congress specifically provided in FECA that any person who believes a violation
of the Act has occurred may file a complaint w/the Commission.
 Prudential standing is satisfied when injury asserted by P arguably falls w/in zone
of interests to be protected/regulated by the statute in question – failure to find
anything in statute limiting standing to political parties or candidates suggests
Congress intended to include voters.
 Injury in fact is inability to obtain information – purpose of law.
 Where a harm is concrete, though widely shared, the court has found injury
in fact.
Cause of Action
Note: Overton Park – relevant language is that judicial review is available unless there is
no law to apply. Marker of a new attitude
Statute – judicial review applies except to extent statute forbids judicial review or
if they were committed to agency discretion by law--presumption that agency actions
Reviewable. 706—court authorized to set aside agency action if arbitrary & capricious,
abuse of discretion or otherwise not in accordance w/law.
Air Courier Conference of America v. American Postal
Workers Union
(1991) (432)
F: Union sued challenging international remailing regulation that allows the Postal
Service to suspend PES restrictions upon any mail route where the public interest
requires suspension.
 Claimed that rulemaking record was inadequate to support a finding that
suspension of the PES for international remailing was in the public interest.
 Postal Service argues unions don’t have standing to challenge suspension of PES
for international remailing.
I: Whether postal employees are w/in the zone of interests of PES, so that they may
challenge the action of US Postal Service in suspending operation of PES w/respect to
paractice of private courier services called international remailing.
H: They are not w/in zone of interest…
Rule: Under Section 702, respondents must establish they have suffered a legal
wrong and that they are w/in the zone of interests sought to be protected through
PES (that injury complaining of falls w/in the zone of interests sought to be
protected by the statutory provision whose violation forms the legal basis of his
complaint).
R: Court of Appeals found union had standing b/c revenue protective purposes of PES
relate to Union’s interest in preventing reduction of employment opportunities.
 So, must inquire whether it was Congress’ intent in enacting PES – language does
not support argument that it was intended to protect jobs w/Postal Service.
 To accept a more broad level of generality in defining the relevant statute could
deprive the zone-of-interests test of virtually all meaning.
National Credit Union Administration v. First National Bank
& Trust Co.
(1998) (435)
F: Challenge NCUA’s approval of charter amendments b/c contrary to law in that
members of new groups did not share a common bond of occupation w/ATTF’s existing
members as statute requires.
H: Respondents’ interest in limiting market that federal credit unions can serve is
arguably w/in the zone of interests to be protected by the provision of the statute – and
respondents have prudential standing to challenge the NCUA’s interpretationer
Rule: There does not have to be an indication of congressional purpose to benefit the
would-be P.
 The proper inquiry is whether the interest sought to be protected by the
complainant is arguably w/in the zone of interest to be protected by the
statute – not whether congress specifically intended to benefit P.
Two Part Test:
1. What are interests that are “arguably to be protected” by the
statutory provision at issue.
2. Then you ask whether the plaintiff’s interests are affected by the
agency action in question are among them.
 In this case one of the arguable interests to be protected was an interest in limiting
the markets that federal credit unions can serve.
R: Prior cases find that competitors of financial institutions have standing to challenge
agency action relaxing statutory restrictions on activities of those institutions.
 There is a link b/w provision of statute in question and interest in limiting markets
that federal unions can serve and respondents certainly have an interest in limiting
the markets that federal credit unions can serve.
Dissent: Terms of the statute do not suggest a concern w/protecting business interests of
competitors.
Exclusions from Judicial Review Under the APA
1) Statutory Preclusion
Abbott Laboratories v. Gardner
(1967) (443)
F: Involved a big battle against regulation by pharmaceutical industry.
 Had promulgated some regulations that industry trying to challenge.
 Promulgated requirement that every time print name for drug printed on label,
also had to use the established/generic name/content/testing of drugs. Regs
passed as a rule.
 Challenging the rule here. Pharmaceutical agencies had a lot of exposure…if
waited to challenge, would be in a lot of trouble.
 Gov’t said this is unreviewable and can’t challenge issue b/c statute provides for
certain kinds of review, but does not provide for review of labels,…so implicitly,
does not allow.
 Saying if not say reviewable, statute implicitly prohibits review.
I: Whether they could challenge the rule or wait until the rule was enforced?
H: Decision is reviewable.
Rule: Sets the default assumption about judicial review—actions reviewable unless
good reason to not make them reviewable.
 Gov’t relies on no statutory authority for argument that pre-enforcement review is
unavailable, but insists instead that b/c statute includes specific procedures for
such review of certain enumerated kinds of regs…
 Purpose of APA was to facilitate judicial review, so have burden of showing not
reviewable.
 Legislative history shows that remedies are designed to provide additional
remedies and not curb already existing remedies.
 No evidence Congress intended to preclude this remedies.
Block v. Community Nutrition Institute





(1984) (446)
Two classes of milk (drinking and eating) and how milk is classified affects price
Technology had moved on to make powdered milk – so fight is that it could be
considered class 2 product so could be sold cheaper, but add water and because
class 1.
Agency regulated price of that milk and said handlers only had to play class 2
price and then would pay back some of prices on surplus items (if buy class 2
milk and later use for reconstituted milk, have to pay it back b/c reconstituted
milk competing w/real milk).
Consumer’s Union arguing ought to be cheaper b/c not as good, etc. (Class 1
farmers argued this b/c don’t want to worry about competition). Dept. of Ag went
with them b/c program set up to protect dairy farmers and keep price from going
up (don’t want destructive competition).
The consumers are attacking the order – seeking judicial review and Dept. of Ag
says no. Gov’t argued why statutorily precluded b/c there were administrative
remedies and even though statute did not address specific issue, when look at
statute as whole allows handlers and producers, not consumers to challenge.
I: Whether ultimate consumers of dairy products may obtain judicial review of milk
market orders (adjudication) issued by Sec. Of Agriculture under authority of the
Agricultural Marketing Agreement Act of 1937?
H: Consumers may not obtain judicial review of such orders.
R: If look at whole statutory scheme, consumers are precluded from review b/c only
handlers and producers able to challenge.
 Adjudication is b/w parties – which are handlers and producers over what prices
are paid b/w two, not prices paid at grocery store.
 Statutory scheme precludes them.
Problem 5-4: Environmentalists and Land Exchanges:
FLPMA authorizes exchange federal lands for non-fed…if public interest served by trade
and value equal. DOJ argues not w/in zone of interest and suit impliedly precluded b/c
statute provides for arbitration by the parties to a land exchange when there is dispute
over proper valuation of properties involved in exchange.
- Assume arbitration between the buyer and seller rather than 3rd parties (Sierra
Club) (like themilk case). Could argue that they are specifically left out of the
statutory structure.
- Could argue that bad decision if harmed interest of consumers – if consumers did
not get their own interests represented. Distinguish milk case b/c in Block,
consumers were effectively represented by class 2 guys. Here, the gov’t w/o real
profit motive, so could argue that this is different b/c interest of Sierra Club
members were not effectively represented.
So, precluded by statute is often argued w/grounds of what is impliedly granted in statute.
Trying to infer statutory scheme impliedly precludes.
XVI. Exclusion from Judicial Review
Committed to Agency Discretion
II. Committed to Agency Discretion: Section 701(a): About how agencies relate to
the Court.
A bit of a contradiction – committed – difficult to reconcile w/provision that agency
action can be set aside if abuse of discretion – if discretionary actions unreviewable,
could not get judicial review.
Sort Out: Overton Park case seemed to give clear evaluation – in case, decision by Dept.
of Transportation to provide funding to build 4 lane highway thru a park.
 Gov’t said can do this b/c it is committed to agency discretion. If agency wins, no
review of decision until or unless Congress/Pres intervene.
 Court said committed to agency discretion means that there is essentially no law
to apply—it would be substituting own judgment for agencies.
 So, only when NO LAW TO APPLY—not happen often.
Heckler v. Chaney

(1985) (451)
Inmates on death row brought case against food and drug agency claiming that
drugs used to execute were not approved for human execution (not tested and
likely not produce intended painless death intended).
 Unapproved use of approved drug against FDCA. FDA Commissioner argued:
(1) FDA jurisdiction in area generally unclear but should not be used in this area –
may not have jurisdiction to review this problem (constitutional); (2) were they to
have jurisdiction, able to decline issue under inherent agency discretion—action
committed to agency discretion by law under 701(a)(2).
 There is a presumption of unriewability unless statute gives clear intent.
H (455): The Act’s enforcement provision commits complete discretion to Secretary to
decide how should be exercised—PRESUMPTION OF UNREVIEWABILITY – for
decisions NOT to enforce.
 Unless statute creates criteria or guidelines for enforcement, inmates lose.
 IS THERE LAW TO APPLY!!!
Rule: Five pieces to this that have to do w/fundamental ways of thinking about
administrative law:
1. Whether violation has occurred;
2. Q of how spend agency resources;
3. Q whether agency likely to succeed;
4. Particular action best fits agencies’ overall policies;
5. Whether agency has enough resources to do this at all…Sort of
expertise argument…they have to figure out how to best follow
through w/their purposes (a lot of balance involved).
R: Another factor here was the apparent absence of coercion (but, ricky b/c decision not
to take action allows state to exercise most coercive power).
 Agencies refusal to not execute power similar to prosecutor in executive branch,
and as much as they are enforced to ensure law enforced – Art. 2 gives power to
executive branch (separation of powers).
 Was a tradition that non-precautionary decisions committed to discretion and no
reason to believe APA wanted to alter this tradition.
 But, court speculates that constitutional issues may be reviewable.
Brennan and Marshall concurrence: Other areas may be reviewed -- Marshall also says
might be reviewable under a deferential standard.
*Note: Case throws big dam in Overton Park
Webster v. Doe
457 (1988)
F: CIA employee. Good reports and promoted. 1982, voluntarily tells security officer he
is a homosexual.
 Agency reviews records and says homosexuality poses threat to security.
 Director fires him.

He argues arbitrary and capricious abuse of discretion reached w/o considering
appropriate procedures, termination deprived of property/liberty/privacy, and
search transgressed procedural processes and equal protection (p.458).
 Gov’t says decision unreviewable b/c committed to agency discretion by law.
H: Decision is unreviewable.
R:
 Statute says whenever director shall deem termination necessary or advisable in
interest of US—standard exudes deference to director. Shall deem, necessary,
advisable and language gives discretion.
 Structure of the Act analysis—purpose of act is for security.
 Say, however, that constitutional violations are not excludable…
Scalia dissent: Says committed to agency discretion not just no law to apply or balance.
By the time the APA passed, there were lots of common law rules committed to
discretion – understand this as adopting common law traditions of judicial reviews
(political question doctrine, sovereign immunity, official immunity, prudential limitations
upon ct.s equitable powers). Says Q is was it traditionally kind of function exempt from
judicial review.
Problem 5-5: Refusal to Waive Regulation
General Delegation to DOT to make regs and promote safety. If have history of epilepsy,
won’t be able to drive and rehabilitation act that says no discrimination against people
w/disabilities. Like Webster, try to get into Court w/Constitutional claim (due
process/equal protection). Problematic on procedural side b/c don’t have much to go on
to say screwed procedurally.
- Look at statute—authorized to waive application of any regulation, could argue
there is no law to apply b/c it is under agency’s discretion.
- But, rehabilitation act is law to apply b/c prohibits discrimination based on
disability. May find case law and regs that further confine discretion of agencies.
- But, traditionally committed to discretion argument. This is external action on
public rather than internal action (?).
- W/national security, reason to not make it judicially reviewed b/c makes it public
on record, but w/driving record, not traditionally committed wholly to discretion.
Not quite like those other decisions—look at is this something that has
traditionally been treated as judicially scrutinized and administratively reviewed.
Think about tradition of this kind of decision making.
- Need to be functionist re discretion AND look at statute. Way to overcome no
law is to argue that there is law in another statute.
But, very deferential statute, so will be difficult…
XVII. Timing
1) Finality
Taylor-Callahan-Coleman Counties District Adult Probation
Dept. v. Dole
(1991)(469)
F: Opinion letter saying patrol officers are exempt from the FLSA and then 2 letters
saying not exempt.
 Action challenging two letters on ground that it was a legislative rule –
without notice and comment. Argued that were legislative rules w/o
notice and comment and were contradictory.
I: Are they final enough to trigger action?
H: Court dismisses claim b/c action complained of is NOT final agency action
Rule: Cite Abbott Labs, which asks:
1. Whether action is definitive statement of agency’s position;
2. Whether actions have status of laws w/penalties for noncompliance;
3. Whether the impact on P is direct and immediate; and,
4. Whether immediate compliance was expected.
R:
- Letter only serves as an indicator of agency construction unless the court directs
otherwise or subsequently decides that the opinion was incorrect
- Not final/binding
- Letter expressly limited to factual circumstances.
Appalachian Power Co. v. EPA
(2000)(473)
F: Challenging validity of portions of an EPA document available on website.
 Case involves “periodic monitoring guidance.”
 Guidelines say must follow even if other non-periodic monitoring
requirements apply.
 This would raise the cost of compliance, so Appalachian Power is
challenging the rule.
H: Set aside guidance b/c impermissibly went beyond regulation – it commands, requires,
orders, dictates…
Rule: Binding if treats same way as legislative rules; bases enforcement action on
policy/interpretation – if lead private party to believe negative impact if do not
comply (BUT, not all binding documents are final, so must ask:
(1) does the action mark consummation of agency’s decision making process (not
tentative or interlocutory) AND
(2) The action is one by which rights or obligations have been determined or from
which legal consequences will flow.
R: Subject to change clause is not determinative – all laws are subject to change but are
still judicially reviewable.
2) Exhaustion:
McCarthy v. Madigan
(1992) (479)
F: Prisoner attempted to bring suit claiming prison is not dealing adequately w/physical
and mental grievances. Prison claims he did not exhaust administrative remedies.
I: Whether federal prisoner must resort to internal grievance procedure b/f he may initiate
suit?
H: In instances where exhaustion has not taken place, if it is not specified in the statute,
balance individual concerns w/administrative interests. Here, the individual concerns are
more compelling.
Rule: Court should first look to Congressional intent – whether Congress specifically
mandates that the agency procedures must be exhausted. (mandatory)
 If no mandate, should balance the interest of the individual in retaining
prompt access to federal judicial forum against countervailing interest
favoring exhaustion (protection of agency authority and promotion of
judicial efficiency).
Three circumstances where individual interests weigh heavily:
(1) unRable/indefinite timeframe; This may prejudice the individual.
(2) if the is doubt re: whether agency is empowered to grant effective relief;
(3) Administrative agency is shown to be biased.
R: Here, Congress did not address the issue and the individual interest outweighs the
agency interest b/c unreasonable timetable and no damages remedy in internal grievance
procedure (only remedy sought).
Darby v. Cisneros







509 U.S. 137 (1993) (482)
Written by same justice but w/different result.
Mortgage insurance subsidizing low-income housing.
Gov’t blacklisting.
Court has different take as does in McCarthy:
In McCarthy, administrative process longer?
And, this is a businessman, rather than a prisoner.
Ruled section 704 – should only have exhaustion if clearly mandated by statute,
otherwise, do not have to have exhaustion to go to court.
 Reflects attitude like Vermont Yankee and Chevron where reviewing courts have
been more sensitive to legislative directives and less willing to muck around in
common law.
Note: 704 says judicial review available for final agency action for which no other
remedy available in agency…
 Statute could say discretionary appeal OR mandatory appeal. With mandatory,
have to take it.
 Discretionary would be certiorari.
 704 tells us that if it is discretionary, don’t have to exhaust it b/c says unless
agency otherwise decides by rule that action is operative.
 When is it binding? If says binding after appeal, then maybe don’t have to
exhaust.


When it is a mandatory appeal, must exhaust.
Ask: is appeal for sure AND what will happen while waiting for appeal.
Problem 5-7: School loan hypo:
He has two other driving schools engaged in serious improprieties and if suspend loans
this will place burden on all businesses. Could argue suspension of funds is compeling.
If could get to court immediately, still not likely that relief would come b/f end of
semester. Small window of opportunity to get suspension pending appeal (temporary
relief provision of APA). Timing argument: if does not get into court but still wins later,
it does not help him for the first semester – harp on remedy. Particularized action
relating to one company so looks more like adjudicative that does not apply. Are these
individual actions?
- Fits type where someone is receiving a benefit (subsidy). Q arises re eligibility.
Maybe should suspend license so don’t cause harm – suspend pending
adjudication. Depending on circumstances, may want to continue throughout
suspension.
- Is it like Darby? No. ALJ decision is not binding until appeal. So, have appeal
as of right and non-binding. So, probably would have to exhaust. Could argue
that it is similar to McCarthy and suspension of funds will create serious harm –
argue these are different decisions. In McCarthy saw discipline side and $$ side.
Separate enough that court says if force to exhaust, will not speak to $$ side
(different remedy). Similarly, here, emergency action and determination re
whether get into program, is going to different issues (suspension more of a
probable cause/imminent harm type of thing, whereas termination goes through
two stages and finally comes to final decision). Could argue that should not be
required to go thru process while suspension pending and should bypass
exhaustion of underlying proceeding. Colorable argument…
Practice Point: When confronted w/one of these situations where not clear, ask if can
bounce into court to get resolved or if could use administrative processes. Answer driven
by perception of what is likely to happen at agency level. Tactical decision.
3) Ripeness
Abbott Laboratories v. Gardner
(1967) (489)
H: Issue is appropriate for judicial resolution at this time.
Rule: Ripeness doctrine’s basic rationale is to prevent courts, thru avoidance of
premature adjudication, from entangling themselves into abstract disagreements
over administrative policies, and to protect agencies from judicial interference until
the administrative decision is formalized…
Two things to consider:
(1) Fitness of issue for judicial decision (determination of Q was purely legal –
interpret statute, so fit for judicial review – this is good here) AND
(2)Hardship to parties of w/holding court consideration – ask if direct and
immediate impact on parties of regulation.
R:
Issue is purely legal one – both sides approached as matter of congressional intent
Find that regs are final agency action w/in meaning of Section 704.
Said great hardship b/c forced to comply and alternative is criminal/civil
penalties and risk too great (impact direct and immediate and cost severe for
sensitive industry) No issue as to how issues played out. – interp of statute is
the question.
- Gov’t argues will only enforce this prospectively. If agency says from start, will
not lay penalties for past conduct, should that be good enough? P. 503, says if
agency had put in affidavit of finality, court might decline legal intervention if
agency says ruling is tentative.
- Hardship: no commercial charges. On public side, might be able to argue there is
hardship to consumers if they overlook one-time disclosures of common aspirin
name.
Dissent: Court’s opening Pandora’s box – federal injunction will now threaten programs
and should require stronger showing that will be expense and burden for non-compliance
(and compliance).
-
Ohio Forestry Association, Inc. v. Sierra Club
(494)
-
Timber harvesting plant.
Not cite specific plan, but long-term plan for forest.
Plan is only one step in the larger plan to cut trees.
When implement, have to go through lots of steps re each specific area.
This allows step for some sort of hearing.
Then, can still be challenged at appeal court after process.
Sierra Club against – think violates NFMA and violates duties as public trustees.
Re fitness of issues, say that the plan will get more specific and difficult to argue
at this general stage – need to resolve factual details first.
Unclear in the opinion what complaining about in terms of issues that does not
apply here.
Distinguish argument that cutting too much and motorized recreation – first
argument not good enough b/c may change over time.
But, recreational issues will not go through this elaborate process at a later time –
that might be why the court says that if they had pled this earlier, this may have
overcome the ripeness issue.
Note case on 500 – Toilet Goods:
- Regulation that said could immediately revoke approval dye if manufacturers
refuse to admit FDA officials. This case was decided at the same time Abbott
Labs was decided.
- Argument on industries side is similar – this will cause harm and undermine
consumer confidence in products and.
- Decided differently because say have no idea when inspection will be ordered.
Assumption is that agency writing letter for fun of it.
-
-
Probably what was determinative here is language that this will depend not
merely on inquiry into statutory purpose, but concurrently on an understanding of
what types of enforcement problems are encountered by FDA – not just that
going into workplace, it is a lot about how they do it.
Need more facts about enforcement process than have now.
Problem 5-9 (499):
Q – can developer get review of this?
- What are developer’s choices?
(1) Immediate judicial review of compliance orders or
(2) Administrative Appeal – don’t know if have to do this step.
(3) Get permit. To do this, have to go through lots of time-consuming steps.
(4) Keep building and defend penalty action.
- Assume discretionary appeal. Then, if want to go for immediate judicial review,
do they have to exhaust.
- EPA will argue have to get permit, but under McCarthy would argue that will take
a significant amount of time and lose money b/c of delay.
Applying this to HYPO re wetlands:
- It is different b/c judicially reviewing overall plan may change decision. But,
with wetlands, it is smaller decision – not a big policy challenge that needs to be
refined at later stages of process. So, arguably, could argue that it is ready for
judicial review – won’t mess up agency activity.
- Arguments re role of court’s ability to assess challenges to plan. Court may say
these are abstract issues – broad-based challenge to plan. When allow policy
level challenge, allows court to check administrative decisions that may never
give rise to dispute. Court worried about abstract opinions on hypothetical
situations – not in conformity w/Article 3 of the Constitution.
XVIII. Delegation Issues:
To test, Court uses following types of Constitutional interpretations:
(1) literal, formalist approach – strict interpretation;
(2) functional approach – court determines whether Congress has gone too far in
commingling of powers by using core function test (approves commingling of powers as
long as one branch’s exercise of power does not jeopardize the “core function” of another
branch – instead of trumpeting independence as value in itself, inquiry is whether it is a
concept necessary to protect fundamental branch interests. Authority to delegate
rulemaking power to agencies comes from necessary and proper clause (I, 8).
1. First Phase
Initially, used the “named contingency” test. Since the ‘30s Courts have used the
“intelligible principle” test – Congress does not violate the prohibition against delegating
its legislative powers as long as it sets the boundaries of the agencies’ authority. But, if
delegation is broad and ambiguous, it may not offer sufficient guidance to courts re
extent of agency’s authority to promulgate rules…
2. Second Phase
Here, the Court declared unconstitutional provisions of legislation which fail to provide
any intelligible principle – standards, rules, definition of
circumstances/conditions…invalidated three provisions of New Deal legislation…
3. Third Phase
Since the 1930’s the Court has approved all legislation it has reviewed for compliance
w/nondelegation doctrine…
Mistretta v. US
(1989) (511)
F: Sentencing Reform Act of 1984 consolidates power that had been exercised by
sentencing judge and Parole Commission to decide what punishment an offender should
suffer.
- Done by creating Commission, appointed by President, to devise guidelines to be
used for sentencing.
- Convicts brought suit arguing that the Sentencing Commission was constituted in
violation of the established doctrine of separation of powers, and that Congress
delegated excessive authority to the Commission to structure the Guidelines.
I: Constitutionality of Sentencing Guidelines promulgated by US Sentencing
Commission.
H: Do not agree that Congress has granted the Commission excessive legislative
discretion in violation of the constitutionally based nondelegation doctrine.
R: So long as Congress shall lay down by legislative act an intelligible principle to which
the person/body authorized to exercise delegated authority is directed to conform, such
legislative action is not a forbidden delegation of legislative power. Applying intelligible
principle test,
- Court has deemed it constitutionally sufficient if Congress:
1. clearly delineates the general policy,
2. the public agency which is to apply it
3. and the boundaries of this delegated authority (driven by practical
understanding that Congress can’t do its job absent ability to delegate
power under broad general directives).
COMPARED TO PAGE 515
R:
- Delegation of authority sufficiently specific and detailed (goals to assure meeting
of purposes of sentencing as set forth in Act, provide certainty and fairness in
meeting purposes of sentencing and to reflect advancement in knowledge of
human behavior as it relates to criminal justice process
- Congress provided specific tool for Commission to use – guidelines system
- Act sets forth more than merely an intelligible principle or minimal standards.
4. State Practice
Unlike SC, some state courts have intervened and declared delegation unconstitutional,
but some states have declined to do this. Some state courts have also been more precise
about what constitutes an intelligible principle.
5. Statutory Interpretation
SC has used the nondelegation doctrine to give narrow constructions to statutes that
might otherwise have violated the doctrine. Says a construction of the statute that avoids
open-ended grant should be favored.
International Union, United Automobile, Aerospace & Agricultural
Implement Workers of America v. OSHA
(518)
F: Nat. Association for Manufacturers claims Congress has given no guidance for rules
issued under specific provisions of OSHA – provisions used to extend regulation of
dangerous tools (lock out and tag out) to virtually all equipment in almost all industries.
H: Reject claim that Congress violated nondelgation doctrine, but find that interpretation
offered by OSHA is, in light of nondelegation principles, so broad as to be unreasonable.
Remand for further considerations in light of the Court’s finding that the statute could
overcome the nondelegation issue by reading it to include some limiting interpretation –
such as providing for cost-benefit analysis.
R:
- Cite Benzine – where applied narrow construction to OSHA b/c otherwise statute
would make such a sweeping delegation of legislative power that might be
unconstitutional. So, current interpretation of nondelegation doctrine is to apply it
in form of giving narrow constructions to statutory delegations that might
otherwise be though unconstitutional –require clear statement by Congress…
- OSHA’s proposed analysis of this provision of the statute would give the
executive branch untrammeled power to dictate…
- In the absence of a clear mandate in the Act, it is unreasonable to assume that
Congress intented to give OSHA unprecedented power over American industry
that would result from the Gov’ts view.
- Reject OSHA’s view that Section 3(8) may impose any restriction it chooses so
long as it is “feasible.” Read it instead to provide for a cost-benefit analysis.
Note: When SC reviewed later case (American Trucking Association), it observed it had
never suggested that an agency can cure an unlawful delegation of legislative power by
adopting in its discretion a limiting construction of the statute.
Problem 6-1: Indian Trust Lands
Tribe applied to Dept. of Interior to acquire 90 acres 7 miles from tribe’s reservation.
Purpose of acquisition = create industrial part to stimulate economic development for
tribe. Dept is authorized, in its discretion, to aquire any lands within or without existing
reservations for purpose of providing land for Indians. Section 465 responds to lossed
land of tribes (allotment policy) – purpose of legislation to rehabilitate Indian’s economic
life and give chance to develop initiative destroyed by past century. Legislative history:
Section authorizes purchase for landless Indians – continued occupancy depends on
“beneficial use” by Indian occupant and heirs; to provide land for Indians who have no
land or insufficient land and who can use land beneficially…and acquisition of land for
farming is keystone of program.
- If represent City, what legal arguments make against purchase and chance of
winning?
- Would outcome be different if issue a matter of state constitutional law?
Delegation of Judicial Review
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1. Article III, Section 1: Judicial power in US shall be vested in SC and such
inferior courts as Congress may ordain…
Murray’s Lesse (1855) upheld a summary procedure that permitted gov’t to
recoup $$ owed it by customs collectors w/o judicial review – Article III did not
apply b/c under doctrine of sovereign immunity the gov’t may be sued only w/its
constent
Cromwell v. Benson court rejected argument that Commission’s fact-finding
violated Art. III b/c there was review by an Article III court. Court focused on
distinction b/w cases of private right and those that arise b/w gov’t and persons
subject to its authority in connection w/performance of constitutional functions of
executive or legislative departments. – determined adjudicating private right b/c
involved liability f one individual.
**Whereas Murray’s Lessee permits Congress to eliminate judicial review
completely concerning public rights, Cromwell requires such review concerning
private rights, although Congress can require a deferential scope of review.
Public right – one arising in case b/w govt and person subject to its authority.
Private right – one involving liability of one indiv. to another under law.
1982 – Court began to alter approach and altered definition of private right –
distinguishing based on whether state common law or federal law.
In 1986, in below case, Court rejected public/private rights distinction as
appropriate test for determining scope of Congress’ power to rely on non-Article
III adjudicators.
Commodity Futures Trading Commission v. Schor
(1986) (526)
F: The Commission had promulgated a regulation that allowed it to adjudicate any
counterclaims that broker might assert if arose out of same transaction – to permit
efficient resolution of claims (broker could still choose to file in state court). Schor filed
complaint against broker alleging broker had violated the CEA. Broker then voluntarily
presented its claim against Schor in CFTC reparations proceeding. CFTC ruled in
broker’s favor and Schor sought judicial review.
I: Whether Commodity Exchange Act empowers Commission to entertain state law
counterclaims in reparation proceedings, and if so, whether the grant of authority violates
Article III?
H: The limited jurisdiction that the CFTC asserts over state law claims as a necessary
incident to adjudication of federal claims willingly submitted by parties for initial agency
adjudication does not contravene separation of powers principles or Article III.
R:
- Precedent demonstrates that Art. III does not confer on litigants absolute right to
consideration by Art. III court – and this right can be waived (Schor waived any
right may have possessed to full trial of counterclaim when demanded broker
proceed w/conterclaim in reparations proceeding rather than district court –
selected form of review). Even where no express waiver, election to forgo right
in state or federal court by seeking relief in CFTC proceedings is an effective
waiver. But, waiver alone is not dispositive b/c institutional interest…
- In determining extent to which non-Article III tribunal impermissibly threatens
the institutional integrity of Judicial Branch, Court has declined to adopt
formalistic and unbending rules that may constrict Congress’ ability to innovate
action – eye to practical effect of congressional action…
- Factors look at (none determinative: (1) extent to which essential attributes of
judicial power are reserved to Art. III courts; (2) extent to which non-Art. III
forum exercises the range of jurisdiction and powers normally vested only
inArt. III courts; (3) origins and importance of right to be adjudicated; (4)
concerns that drove Congress to depart from requirements of Art. III.
- Adjudicatory powers only depart from traditional agency model re CFTC’s
jurisdiction over common law counterclaims.
- Re private rights, court has rejected attempt to make determinative. But, where
private, common law rights are at stake, our examination of congressional attempt
to control manner in which those rights are adjudicated has been searching.
- Here, Congress authorized limited jurisdiction over narrow class of common law
claims – and have choice, so not threaten separation of powers…
Problem 6-2: Pesticide Royalties and Limited Judicial Review
FIFRA requires manufacturer of chemical to conduct comprehensive animal studies.
Amended law authorizes the EPA to consider previously submitted data only if follow-on
applicant has offered to compensate original registrant for use of data and requires
binding arbitration if parties can’t agree on amount of compensation. Decision of
arbitrator subject to judicial review only for fraud, misrepresentation or other misconduct
(not amount). For Judicial Dept – could perform research themselves, so choosing to do
this. Also, efficiency and expert concerns. For chemical co., argue that traditionally
reserved to Art. III courts and unlike Commodity Futures b/c no other state remedy
available.
XIX. Legislative Veto
The Legislative Veto, p. 537
- unconstitutional – violates requirements of presentment and bicameralism
- pre-unconstitutional finding, veto popular because Congress could give general
authority to agency and still retain power over individual actions.
Presentment and Bicameralism
INS v. Chadha
462 US 919, 1983 (538)
Issue: Does legislative veto comply with bicameral and presentment clauses of Art I?
Facts:
- Chadha came to US from Kenya on student visa
- After visa expired Chadha filed for extension under 244(a)(1) of Immigration Act
- Att Gen approved extension and submitted to congress for review
- Hs of Reps vetoed Chadha’s extension
Found:
- Art. I provides for bicameralism and presentment
- These standard not met by this action
Held: No, legislative veto doesn’t comply w/ bicameral and presentment clauses of Art I.
“Be it enacted”
“Be it resolved”
- One house only – one house veto.
- Both houses, no Pres – concurrent resolution
- Both houses, plus Pres – joint resolution
Chadha speaks to one house veto.
Suspension and deportation
1970’s – “private bill” – like regular legislation except it goes to the relief of an
individual rather than to the general public.
Private bills are pork but also designed to fill some of the wholes and gaps in the
immigration system – huge potential of abuse – wealthier immigrants get bgetter
treatment.
Regularisation of process – move from Congress to Attorney General
In Chadha, AG exercised power to suspend deportation but this still had to be approved
by both houses of Congress, but if either house vetos then that is enough.
In practice, the private bills hardly ever got vetoed by the President.
Functionally, does this order of House, Senate, President presentment make sense?
- Originally things were conceived as a Republic, not a Democracy.
- Formal structure is important and we should stick to it
White’s Dissent:
- Functionalism should triumph over formalism
- The legislative veto is common practice and does not violate Art. I.
Note: Subtext is that mechanism was empowering the wrong people and enforcing
political compromises that were not helpful to the system.
Note: Chadha definitely got rid of one house vetos but what we don’t know is the
variance on that suggested by the note cases.
If it’s a joint resolution we’re probably alright because it mimics the formalist structure.
Severability clauses – any time challenging constitutionality want to check for this.
If part of this enactment is held to be unconstitutional the other part will still be in effect.
Problem 6-4 Legislative Review
a) Congress sometimes needs to have more time. It
would be bad policy to allow an indefinite stay.
c)
Some kind of political accountability on top of and around administrative procedures.
Enhancement of legislative involvement in the rulemaking process – quasi legislative,
why shouldn’t Congress be involved. Courts, however, feel that the formal
rearrangement of Constitution is not allowed should only be subject to amendment
process.
Appointment and Removal
- Fed and State bureacracies are a balance between career and politically appointees
- Most agencies are headed by political appointees and staffed predominately by
career civil service.
- Political appointees are heads of organisations but also some of their staff.
o Principal officers must be appointed by the President.
o Inferior officers can be appointed by President or Dept Heads or Judiciary
Appointment
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- Buckley v. Valeo –
FEC orginally set up to have 6 voting members (2 – Pres, 2 – house, 2- senate)
but can’t do this because you are giving house and senate the ability to write rules
and enforce rules (executve function).
Morrison v. Olsen
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Independent Counsel’s are OK due to balance between political appointees and
civil servants.
IC are in the inferior officers category.
Removal
- Independent Agencies
o Usually multi-member agencies
o Removed only for “good cause” – usually –
Humphries v. Executor
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Legisltive removal activitiy
o Controller general had special function in Reagan era to report to
President on the two major offices of budget.
o Court said this goes to far in encroaching on Pres removal power.
o Comptroller Gen’l can be removed only by Congress but in making his
decision on the budget he is making executive decisions, therefore, he
can’t be subject to removal by Congress if he is an executive.
o Keep branches as separate as possible.