ADMINISTRATIVE LAW
PROFESSOR ADLER – SPRING 2010
SECTION I: INTRODUCTION.......................................................................................................... 4
GENERAL BACKGROUND ................................................................................................................................... 4
Functions of Agencies .................................................................................................................................................... 4
Agencies Generally ........................................................................................................................................................ 4
Statutes ......................................................................................................................................................................... 4
New Deal and the APA............................................................................................................................................... 5
The Administrative Procedure Act (1946, post New Deal) ........................................................................................... 5
Sources of Challenging Agencies ..................................................................................................................................... 5
NON-DELEGATION DOCTRINE ....................................................................................................................... 5
Language and Meaning ................................................................................................................................................. 5
Open Texture of Law (H.L.A. HArt)......................................................................................................................... 5
Clarity and Constitutionality ......................................................................................................................................... 6
A.L.A. Schechter Poultry Corp. v. US (SCOTUS, 1935) ......................................................................................................................... 6
MISTRETTA V. US (SCOTUS, 1989) ....................................................................................................................................................... 7
SECTION II: ADJUDICATION .......................................................................................................... 7
THE ADMINISTRATIVE PROCEDURE ACT (1946) ....................................................................................... 7
Definitions..................................................................................................................................................................... 7
Adler’s Clarifications..................................................................................................................................................... 8
Roadmap of “On-the-Record” Adjudication Under the APA........................................................................................ 8
Formal and Informal Procedures .................................................................................................................................. 10
CONSTITUTIONAL CONSTRAINTS: PDP ...................................................................................................... 11
Central Themes in Due Process Jurisprudence .............................................................................................................. 11
Judge Friendly’s Elements of a Fair An unbiased tribunal ........................................................................................... 11
General Framework for PDP Questions ...................................................................................................................... 12
GOLDBERG v. KELLY (SCOTUS, 1970) ............................................................................................................................................ 12
BOARD OF REGENTS OF STATE COLLEGES v. ROTH (SCOTUS, 1972) .......................................................................... 13
Liberty ........................................................................................................................................................................ 14
PERRY v. SINDERMANN (SCOTUS, 1972) ....................................................................................................................................... 15
CLEVELAND BOARD OF EDUCATION v. LOUDERMILL (SCOTUS, 1985) ..................................................................... 15
MATHEWS v. ELDRIDGE (SCOTUS, 1976) ...................................................................................................................................... 16
Cost Benefit in General................................................................................................................................................ 17
APA CONTRAINTS: FORMAL ADJUDICATION .......................................................................................... 17
Administrative Law Judges ......................................................................................................................................... 17
Adjudicative v. Legislative Facts .................................................................................................................................. 17
ALJ and Administrator/Commissioner ...................................................................................................................... 17
Federal Statutory Hearing Rights ................................................................................................................................ 17
Process of Formal Adjudication ................................................................................................................................... 18
SEACOAST ANTI-POLLUTION LEAGUE v. COSTLE (1st CIRCUIT APPEALS, 1978) ................................................... 18
Under §556(d), you have a presumptive right to cross-examination .............................................................................. 18
EPA Violation of §556(e) ......................................................................................................................................... 19
Ex Parte Contacts ...................................................................................................................................................... 19
UNITED STATES v. FLORIDA EAST COAST RAILWAY (SCOTUS, 1973) ........................................................................... 19
RICHARDSON v. PERALES (SCOTUS, 1971) ................................................................................................................................... 19
APA CONTRAINTS: INFORMAL ADJUDICATION ..................................................................................... 20
PENSION BENEFIT GUARANTY CORP. v. THE LTV CORP. (SCOTUS, 1990) ................................................................. 20
§555 Governs Informal Adjudication .......................................................................................................................... 20
CALIFANO v. YAMASAKI (SCOTUS, 1979) ...................................................................................................................................... 21
SECTION III: RULEMAKING ..........................................................................................................21
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CONSTITUTIONAL CONTRAINTS: PDP ........................................................................................................ 21
LONDONER v. CITY AND COUNTY OF DENVER (SCOTUS, 1908).................................................................................... 21
BI-METALLIC INVESTMENT CO. v. STATE BOARD OF EQUALIZATION OF COLORADO (SCOTUS, 1915) . 22
APA CONSTRAINTS: FORMAL RULEMAKING ........................................................................................... 22
§553: RULEMAKING – only applies to substantive legislative rules ....................................................................... 22
Types of Rules ............................................................................................................................................................. 23
Adjudicatory v. Legislative Decisions ........................................................................................................................... 23
WIRTZ v. BALDON ELECTRICT CO. (DC COURT OF APPEALS, 1963).............................................................................. 23
Violation of §556(d) ................................................................................................................................................... 23
Formal Rulemaking v. Formal Adjudication ............................................................................................................... 23
APA CONSTRAINTS: INFORMAL RULEMAKING (I.E. “NOTICE AND COMMENT”) .................. 23
Procedures for IR ......................................................................................................................................................... 24
AUTOMOTIVE PARTS & ACCESSORIES ASS’N v. BOYD (DC CIR., 1968) ......................................................................... 24
NAT’L TIRE DEALERS & RETREADERS ASSOC. v. BRINEGAR (DC CIR., 1974) ........................................................... 24
MOTOR VEHICLE MANUFACTURERS v. STATE FARM (SCOTUS, 1983) .......................................................................... 24
§706(2)(a) – Arbitrary and Capricious Review .......................................................................................................... 24
PACIFIC STATES BOX & BASKET v. WHITE (SCOTUS, 1935) ................................................................................................ 25
UNITED STATES v. NOVA SCOTIA FOOD PRODUCTS CORP. (2nd CIRCUIT APPEALS, 1977) .............................. 25
VERMONT YANKEE NUCLEAR POWER v. NATURAL RESOURCES DEFENSE COUNCIL (SUPREME
COURT, 1978) ............................................................................................................................................................................................... 26
For IR, there’s no ban on ex parte contacts .................................................................................................................. 26
ASSOCIATION OF NATIONAL ADVERTISERS, INC. v. FTC (DC APPEALS 1979) ........................................................ 26
THE ADJUDICATION-RULEMAKING CHOICE ......................................................................... 27
i.e. whether or not to have a legislative rule.................................................................................................................... 27
CHOICE TO HAVE A LEGISLATIVE RULE ................................................................................................... 27
Legislative Rule ........................................................................................................................................................... 27
HECKLER v. CAMPBELL (SCOTUS, 1983) ........................................................................................................................................ 27
NATIONAL PETROLEUM REFINERS v. FTC (DC APPEALS, 1973) ...................................................................................... 29
AIR LINE PILOTS ASS’N v. QUESADA (2nd CIRCUIT APPEALS, 1961) ............................................................................... 30
US DEP’T OF AGRICULTURE v. MURRAY (SCOTUS, 1973) ..................................................................................................... 31
Legal Constraints on Legislative Rules......................................................................................................................... 31
CHOICE NOT TO HAVE A LEGISLATIVE RULE ......................................................................................... 31
SECURITIES & EXCHANGE COMMISSION v. CHENERY CORP. (SCOTUS, 1947) ........................................................ 31
Rule v. Precedent ......................................................................................................................................................... 32
BOWEN v. GEORGTOWN UNIVERSITY HOSPITAL................................................................................................................. 32
MORTON v. RUIZ (SCOTUS, 1974) ...................................................................................................................................................... 32
AMERICAN MINING CONGRESS v. MINE SAFETY & HEALTH ADMINISTRATION (DC APPEALS, 1993) ..... 33
Interpretive Rules ......................................................................................................................................................... 33
Legislative Rules v. Interpretive Rules .......................................................................................................................... 33
Interpretive Rules & Policy Statements ........................................................................................................................ 34
SEPARATION OF POWERS ............................................................................................................. 34
CONGRESSIONAL AND PRESIDENTIAL CONTROL OF AGENCIES ................................................ 34
THE LEGISLATIVE VETO.................................................................................................................................... 34
INS v. CHADHA (SCOTUS, 1983) .......................................................................................................................................................... 34
APPOINTMENT AND REMOVAL ..................................................................................................................... 36
BUCKLEY v. VALEO (SCOTUS, 1976) ................................................................................................................................................ 36
Appointments Clause (Art. II, §2) ............................................................................................................................. 37
RECAP: .................................................................................................................................................................... 37
BOWSHER v. SYNAR (SCOTUS, 1986) ................................................................................................................................................ 38
HUMPHREY’S EXECUTOR v. U.S. (SCOTUS, 1935) ...................................................................................................................... 39
MORRISON v. OLSON (SCOTUS, 1988) ............................................................................................................................................. 40
EXECUTIVE ORDERS AND REGULATORY REVIEW .............................................................................. 42
Overview ...................................................................................................................................................................... 42
Does the President Have the Executive Order Power?? ................................................................................................ 42
YOUNGSTOWN SHEET & TUBE CO. v. SAWYER (SCOTUS, 1952) ...................................................................................... 43
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What is the Effect of This Power?................................................................................................................................ 43
Rulemaking ................................................................................................................................................................. 43
706(2)(a): Arbitrary and Capricious Challenge ........................................................................................................... 44
Adjudication ............................................................................................................................................................... 44
EXECUTIVE ORDER 12866 – Cost Benefit Order ........................................................................................... 44
INFORMAL CONTROL .......................................................................................................................................... 45
SIERRA CLUB v. COSTLE (DC Circuit 1981) ..................................................................................................................................... 45
DC FEDERATION OF CIVIL ASSOCIATIONS v. VOLPE (1970’s) .......................................................................................... 46
SECTION VI: JUDICIAL REVIEW................................................................................................... 46
SCOPE OF REVIEW................................................................................................................................................. 46
APA PROVISIONS............................................................................................................................................... 46
Jurisdiction .................................................................................................................................................................. 46
CHEVRON, USA v. NATURAL RESOURCES DEFENSE COUNCIL (???, 1984) .................................................................. 47
INS v. CARDOZA-FONSECA (1987) .................................................................................................................................................... 48
FDA v. BROWN AND WILLIAMSON TOBACCO CORP. (SCOTUS, 2000) ........................................................................... 48
US v. MEAD CORP (SCOTUS 2001) ...................................................................................................................................................... 48
CITIZENS TO PRESERVE OVERTON PARK v. VOLPE (SCOTUS, 1971) ........................................................................... 49
NLRB v. HEARST PUBLICATIONS (SCOTUS, 1944) ..................................................................................................................... 50
Universal Camera Corp. v. NLRB (1951) ................................................................................................................................................. 50
REVIEWABILITY, TIMING, AND OTHER THRESHOLD ISSUES.......................................................... 50
Threshold Issues........................................................................................................................................................... 50
Cause of Action ........................................................................................................................................................... 51
Jurisdiction .................................................................................................................................................................. 51
Sovereign Immunity ..................................................................................................................................................... 51
Reviewability under APA ........................................................................................................................................... 51
Framework for Reviewability ....................................................................................................................................... 52
JOHNSON v. ROBISON (SCOTUS, 1974) ........................................................................................................................................... 52
HAMDI v. RUMSFELD (SCOTUS 2009) .............................................................................................................................................. 53
WEBSTER v. DOE (SCOTUS, 1988) ...................................................................................................................................................... 53
HECKLER v. CHANEY (SCOTUS, 1985) ............................................................................................................................................ 54
MASSACHUSETTS v. EPA (SCOTUS, 2007) ....................................................................................................................................... 55
FRANKLIN v. MASSACHUSETTS (SCOTUS, 1992) ........................................................................................................................ 55
RIPENESS: FITNESS AND HARDSHIP............................................................................................................. 56
ABBOTT LABS v. GARDNER (SCOTUS, 1975) ................................................................................................................................ 56
TOILET GOODS ASS’N v. GARDNER (SCOTUS, 1965) .............................................................................................................. 57
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SECTION I: INTRODUCTION
GENERAL BACKGROUND
FUNCTIONS OF AGENCIES
 Regulating Markets (SEC, NLRB)
 Health and Safety (OSHA, NHTSA, FDA)
 Social Welfare (SSA, NIH, VA)
 Financial System (Fed. Reserve, FDIC)
 Environment (EPA)
 Physical Security (Military Agencies)
AGENCIES GENERALLY
o Hard to give a good description of what an agency really is
o Picture of fed government that there are three branches of government is not a good one
o It’s better to think of agencies as NOT in executive but as independent entities separate from the
executive
 Individual entities with legal status but outside of the branches set up by the Constitution
o Each constitutional branch has control mechanisms over the agencies
 Congress  statutory control; appoints agency heads (gives consent); lots of informal
control
 President  main role in agencies; sometimes appoints agency heads on his own
- Executive agencies  heads removable at will
- Independent agencies  heads removable for cause
- Executive order power
 Judiciary  judicial review
- APA creates general right to go to court to challenge agency actions
o Two chief ways agencies exercise coercive power over individuals
o Adjudication  PDD and ADA constraints
o Rulemaking  PDD and APA constraints here, too
o APA Definition of Agency: §551(1) - “agency” means each authority of the Government of the United States,
whether or not it is within or subject to review by another agency, but does not include—
(A) the Congress;
(B) the courts of the United States;
(C) the governments of the territories or possessions of the U.S.;
(D) the government of the District of Columbia;
or except as to the requirements of section 552 of this title—
(E) agencies composed of representatives of the parties or of representatives of organizations of the
parties to the disputes determined by them;
(F) courts martial and military commissions;
(G) military authority exercised in the field in time of war or in occupied territory; or
(H) functions conferred by sections 1738, 1739, 1743, and 1744 of title 12; chapter 2 of title 41;
subchapter II of chapter 471 of title 49; or sections 1884, 1891–1902, and former section 1641(b)(2),
of title 50, appendix;
 Internal Structure
o Headed by a single administrator (EPA, IRS)
o Headed by a board of commissioners (FTC, SEC)
o Adjudication and rule making are two ways that agencies make legally binding decisions
STATUTES
 “Organic Statute” (this isn’t a legal term)  sets up the agency
o Specifies procedures, states goals, and gives agency mission
o i.e. Food Drug and Cosmetic Act (FDA), Occupational Safety and Health Act (OSHA), Clean Air and
Clean Water Act (EPA), Motor Vehicle Safety Act (NHTSA)
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 “Crosscutting statutes”
o Applies to all bodies falling with the definition of an agency  bind across the board
o i.e. National Environmental Policy Act (NEPA) says that whenever an agency takes an action which
has an effect on the environment, it must do certain things; also FOIA and the APA
NEW DEAL AND THE APA
 New Deal led to an increase in the size of the federal government and lots of new agencies, APA created in 1946
 Time of huge jurisprudential change in Con Law; “Switch in Time” which occurred around 1937
 Until 1937 - struggle b/w Pres Roosevelt and Court about constitutional legitimacy of New Deal measures
 Pre-1937: 3 major constitutional norms aggressively enforced by Supreme Court:
o Substantive Due Process - prohibits substantively arbitrary, unreasonable state action; major
constraint on regulations
o Commerce Clause (Art. I, § 8) – seen as limited power because of Lochner categorization
o Non-Delegation Doctrine
 Legitimacy of national, regulatory admin state open to serious question
 Post-1937 these 3 challenges disappear, not enforced  Court’s much more deferential
o Schechter is the only case found to violate non-delegation clause.
o SDP – Court hasn’t struck down ordinary economic regulation post-1937
o C.C. – broader construction/increased scope; Court sustained national statutes under the power
 APA and PDP claims  new way to limit agency decision-making
o APA specifically enacted to fill the trench that’s left in the wake of these constitutional changes
 Emergence of due process cases an important category of constitution litigation  directly relates to government
activism
THE ADMINISTRATIVE PROCEDURE ACT (1946, POST NEW DEAL)
 “Catch-up” statute trying to provide law to cover legit agency practices that were already growing up
 Fairly detailed code only for formal, on-the-record agency hearings, through which many agencies enunciated
policy as well as enforced the law until the 1960s.
 APA has many fewer for adopting prospective rules – gap remains unfilled despite rulemaking importance
SOURCES OF CHALLENGING AGENCIES
 5th and 14th Amendment Due Process
 APA
 Other statutes that limit how the agency can engage in adjudication or rulemaking
NON-DELEGATION DOCTRINE
***No Longer Enforced***
LANGUAGE AND MEANING
 Article I, §1: “All legislative Powers herein granted shall be vested in a Congress of the United States…”
 Prohibits Congress from delegating away its legislative power and regulates how much discretionary authority
Congress may delegate to an agency
OPEN TEXTURE OF LAW (H.L.A. HART)
 Every statute has a zone of open texture
 National Parks Statute 1: No vehicle may be taken into any National Park; National Park Service (NPS) is
empowered to fine.
o Determinate statutory guidance
o No constitutional problem with Art. I §1
 National Parks Statute 2: The NPS shall ensure that parks remain clean and quiet; NPS is authorized to issue rules
and impose fines on violation
o Indeterminate statutory guidance
o This could be problematic because of delegation
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 However, vehicle is still a problem in Hypo 1
o Hypo 1 has an indeterminate boundary area when it comes to the definition of a vehicle (do roller
skates and toy motor cars count?), but there is a core of determinacy where the statute clearly applies
(cars, buses)
CLARITY AND CONSTITUTIONALITY
A statute is unconstitutional under Art I, §1 if it has an unjustified degree of indeterminacy. (This is still a
doctrine, but it’s no longer enforced)
 Language is determinate when ordinary speakers would not reasonably disagree on the meaning
 Because everything is indeterminate to some degree, we should think of determinacy in terms of the core area,
where there are clear applications, rather than the boundary
 It’s difficult to determine whether something has an unjustified degree of indeterminacy
 Pros and Cons of Indeterminacy
o PROS
 Agency can use its expertise
 More flexible for the agency; the cost of changing legislation is high
 Agency can flush out standards through adjudication
 The legislature is captured by powerful special interest groups
o CONS
 Congressional expertise
 The agency may be captured by interest groups
 Congress is more representative than the agency of majoritarian characteristics
 Statutory specificity gives people notice
 Potential Sources of Statutory Interpretation (many of these are contested)
o Ordinary meaning of the language
o Dictionary (Hart argues that this is bad because it crowds out all indeterminacy and thus may be
contrary to the underlying goals of the statute; this is also using language to resolve the discrepancy in
language)
o Legislative History
o House/Senate committee reports
o Statements by individual members of congress
o Purpose of the statute, i.e. environmental protection, safety, health, market efficiency
o Structure, i.e. each provision is relevant, so if one provision mentions specifically that bikes cannot be
on wilderness trails, then bikes are probably not considered vehicles in the general statute
A.L.A. Schechter Poultry Corp. v. US (SCOTUS, 1935)
FACTS: NIRA sets up a governing scheme to get firms in an industry to agree to codes of fair competition. It allowed
the president to approve the codes (weird because usually cabinet official). NIRA contained procedural (application by
trade group, membership, possibility of hearing) and substantive (codes shall not promote monopolies, interstate
commerce limitations, effectuate policy of statute) requirements. Government issues Live Poultry Code, whose
enforcement included criminal penalties and injunction. The government sought to punish Schechter Poultry for its
wholesale violation of a poultry industry code. Schechter raises 3 constitutional objections: Delegation challenge (Art. 1
§1); Interstate transactions (Commerce clause); 5th amendment (violates individual rights)
MAIN ISSUE: Whether this was a violation of the non-delegation doctrine
HOLDING: It is a violation because delegation was too broad – Congress failed to articulate any policy or standard that
would serve to confine the discretion of the authorities to whom Congress has delegated power – Court says that there
is unjustified indeterminacy
Since Schechter, there has not been a single case where the court has sustained a non-delegation challenge;
Article I, §1 is now essentially an unenforced constitutional norm.
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 Federal Trade Commission and NIRA compared
o FTC
 Adjudicatory body that decides on a case-by-case basis whether a practice is an “unfair
method of competition.”  quasi-judicial
 Has procedural protections, i.e. hearing, opinion, judicial review
o NIRA
 The president has rulemaking power to make Codes of Fair Competition
 Provides for notice and hearing
o However, these distinctions does NOT necessarily explain the court’s decision or make NIRA
unconstitutional
O Rather than overruling the previous cases, the Court distinguished them by declaring that the degree
of specificity of the standards must be considered in relationship to the degree of power conferred on
an agency and the procedural protections given to the persons subject to that power
MISTRETTA V. US (SCOTUS, 1989)
***Current Law for Non-Delegation Challenges***
FACTS: Congress passed the Sentencing Reform Act of 1984 that created a US Sentencing Commission as an
independent body within the judicial branch whose job was to replace indeterminate sentencing with determinatesentencing
ISSUE: whether the US Sentencing Commission violates the separation of powers principle, and whether Congress had
delegated excessive authority to the Commission to structure the guidelines
HOLDING: This is not a non-delegation problem because the goals are clearly laid out and there are strict guidelines,
nor does it violate the principle of separation of powers
“INTELLIGIBLE PRINCIPLE DOCTRINE” – so long as Congress lays down by legislative act an
intelligible principle to which the agency is directed to conform, such legislative action is not a forbidden
delegation of power; not enforced since 1935
 What does this mean? Possibilities…
o The language is determinate (although there’s always a zone of open texture)
o There not an unjustified degree of indeterminacy
o Given the intrinsic difficulty of making the call as to whether there is an unjustified degree of
indeterminacy, Art. 1 §1 has become an unenforced constitutional norm
 Political Question Doctrine
o Sometimes the court says explicitly that something is a “political question” which means that they owe
it total deference
o Non-delegation isn’t a political question because the court has never explicitly said it is, but in practice
it’s dealt with in the same way
SECTION II: ADJUDICATION
THE ADMINISTRATIVE PROCEDURE ACT (1946)
DEFINITIONS
 Adjudication: agency process for the formulation of an order
o This seems to encompass any decision by an agency having any legal effect unless that decision can be
characterized as a rule – whatever that is
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This, like rule making, is subject to formal hearing requirements only to the extent that it is an
“adjudication required by statute to be determined on the record after an opportunity for agency
hearing.”
o The APA supplies a generic form of formal hearing process, but only for those instances in which
some other statute requires that formal process be employed
o Administrative adjudicatory processes may range across a spectrum of formality from the internal
mental operations of a single individual to protracted judicial-style proceedings before multi-member
commission with all the accoutrements of an adversary trial
o APA stands virtually mute on requisite characteristics of any adjudicatory process short of proceeding
required by some other statute.
Order: the whole of part of a final disposition, whether affirmative, negative, injunctive, or declaratory in form, of
an agency in a matter other than rule making but including licensing
Licensing: Includes agency process respecting the grant, renewal, denial, revocation, suspension annulment,
withdrawal, limitation, amendment, modification, or conditioning of a license
License: includes the whole or part of an agency permit, certificate, approval, registration, charter, membership,
statutory exemptions or other form of permission
Rule Making: agency process for formulating, amending, or repealing a rule
Rule: Whole or part on an agency statement of general or particular applicability and future effect designed to
implement, interpret, or prescribe the law or policy
o
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ADLER’S CLARIFICATIONS
 APA definitions aren’t very helpful because they’re so broad and technical and the definition of rulemaking could
technically cover what’s issued in Seacoast
 ORDER: A formally specific legal directive by an agency which is addressed to an individual by name,
changing the individual’s legal position in some way – either a negative legal positions (imposing a
duty) or positive (granting a liberty).
o Individual can be a natural or artificial person (i.e. corporation, like PSCO)
o Similarities between rules and orders
 Order: PSCO may use the system
 Rule: All plants may use a once-thru system
 In both of these the agency is bound by a statute, they both may affect a large or small
number of individuals
 i.e. in Seacoast, although the EPA is addressing only one party, many others are effected by
the outcome (i.e. tourists, other nuclear plants, etc.)
o Court looks at the formal difference – a person addressed by name as opposed to a large class of
people

Although the courts have adopted this it’s not the only possibility
 LICENSING: might be any directive that creates a liberty (a liberty is an absence of duty)
o Hypo: EPA says: all plants may use a once through system
o Intuition says this isn’t a licensing because it’s not an agency order that creates a liberty
ROADMAP OF “ON-THE-RECORD” ADJUDICATION UNDER THE APA
 INITIATION
o §553(b): Agency must notify parties of the time, place, and nature of the hearing and of the legal
authority under which it is to be held
 INFORMAL SETTLEMENT
o §554(b): After a formal adjudicatory hearing is announced, an agency is still required – “when time,
the nature of the proceedings, and the public interest permit” – to give the parties the opportunity to
propose offers of settlement or other resolutions of the issues that may obviate the need for a hearing
 INITIAL DECISION MAKER
o §556(b): Unless some other statute designates the initial decision maker in a formal hearing, an agency
may decide to leave the taking of evidence to the agency itself, to one or more members of the body
that constitutes the agency, or to an administrative law judge (ALJ is by far the most common)
 EXCLUSIVITY OF THE RECORD; EX PARTE CONTACTS
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§556(e): Transcript of testimony, the exhibits, and all other formally filed papers constitute “the
exclusive record for the decision” in a formal APA hearing
o §557(d)(1)(A), (B): In any on-the-record proceedings, once the hearing is “noticed,” there may be no
ex parte communication “relevant to the merits of the proceeding,” between “any interested person
outside the agency” and any “member of the body comprising the agency, administrative law judge, or
other employee who is or may reasonable be expected to be involved in the decisional process of the
hearing
o §554(d): If the hearing is adjudicatory and not for the purpose of determining an initial licensing
application, the presiding officer is forbidden to “consult” any “person or party” – presumably,
whether or not the person is “interested” or outside the agency – “on a fact in issue, unless on notice
and opportunity for all parties to participate.”
o Notable exceptions to the bar against ex parte contacts…
 §554(d): there is no statutory prohibitions against ex parte contacts between the persons
constituting the agency and the presiding officer at a formal hearing
 §557(d)(2): or against persons other than the presiding officer giving information ex parte to
Congress about the merits of a proceeding
o §557(d)(1)(C): If an impermissible contact does occur, it must, once discovered, be made part of the
public record, and
o §557(d)(1)(D): the agency, ALJ, or other official presiding at a hearing may impose sanctions including
dismissal of a claim
 EVIDENCE AND RULES ON PROOF
o §556(d): parties of formal APA hearings are entitled to present their case by oral or documentary
evidence, to submit rebuttal evidence, and to cross examine witnesses
o APA grants agencies broad power to determine the varieties of oral or documentary evidence to be
admitted at formal hearings, and, in connection with formal rulemaking or initial license applications,
the agency may limit the parties to written presentations “when a party will not be prejudiced thereby”
 PRODUCTS OF THE HEARING
o §557(b): unless an agency itself presides at the formal hearing and thus makes all relevant decisions
itself in the first instance, it has two options regarding the form of the ultimate decision to result from
that hearing. It can treat the outcome of the hearing as the agency’s “initial decision,” which become
final unless a party seeks to have the agency change it. Alternatively, it can provide that the decision
shall constitute only a tentative decision or recommendation, which must be formally adopted by the
agency in order to be implemented.
o §557(c): any decision, whether initial, tentative recommended, or final, must include statements of
findings and conclusions on all material issues of fact, law, and discretion, and must contain the rule,
order, sanction, relief, or denial thereof that is the consequence of the hearing
 ADMINISTRATIVE APPEALS
o §557(b): when the agency permits other officials to preside at a hearing and make the initial decision,
the agency may still provide for an administrative review – such review may be an appeal as of right or
at the agency’s discretion. Some agencies set up internal boards to hear appeals, reserving certiorarilike discretionary review to themselves. In reviewing a subordinate’s decision, the agency “has all the
powers which it would have in making the initial decision except as it may limit the issues on notice or
by rule.”
o
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PROVISIONS THAT APPLY TO BOTH ALJ &
AGENCY
SPECIAL INSULATIONS FOR ALJ
§ 556(B) – IMPARTIALITY (THIS MIGHT BE
FINANCIAL IMPARTIALITY – MAIN THING IS
PREJUDGMENT, YOU’RE NOT ALLOWED TO
PREJUDGE)
§ 554(D)(1) – ALJ CAN’T HAVE AN EX PARTE
CONSULTATION WITH A PERSON/PARTY
ON FACT IN ISSUE
§ 556(C) – EMPOWERS PRESIDING OFFICIAL
§ 554(D)(2) – STRUCTURAL INSULATION:
ALJS MAY NOT BE RESPONSIBLE TO
ENFORCEMENT STAFF
IN CONTRAST, THE COMMISSIONER CAN
BE INVOLVED IN WRITING A RULE, IN
DECIDING IF VIOLATION OF A RULE
SHOULD BE INVESTIGATED, AND IN
ADJUDICATING THAT CASE
§ 556(D) – ORAL HEARING PROVISION
§556(E) – EXCLUSIVE RECORD FOR
DECISION
§ 557(C) – ENTITLEMENT TO DECISION
§ 557(D) – EX PARTE CONTACT
RESTRICTIONS
§ 555(B) – RIGHT TO BE ATTENDED BY
COUNSEL
ALJ
ARTICLE III JUDGE
Civil servants appointed by agency
Pres appoints with Senate advice and consent
APA § 7521 – removable “for cause” as determined
by the Merit Systems Protection Board
Life tenure, removable only by impeachment
APA § 3105 - assigned to cases in rotation; no
inconsistent duties
APA § 5372 – Agency does not set ALJ salaries
APA § 554(d)(2) – separate from Agency staff
FORMAL AND INFORMAL PROCEDURES
Rulemaking
Adjudication
Formal
§553, 556, 557
§554, 556, 557
Informal
§553
§555
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

Formal Adjudication  comes into play only if some other statute uses the trigger language; either “hearing on
the record” or “after hearing”
o Triggering structure is set up by §554(a)
Informal Adjudication  governed only by §555
CONSTITUTIONAL CONSTRAINTS: PDP
CENTRAL THEMES IN DUE PROCESS JURISPRUDENCE
 Tradition
o Whether the procedures at issue conform to the customary processes of law
o The problem is identifying a single tradition and with value presuppositions
 Natural Rights
o Begins with a basic moral premise concerning individual autonomy
o There are problems with the applications – the set of procedural rights necessary to preserve
individual dignity seems infinitely expansive – there are no clear principles of limitation
o In an increasing secular society, moral pronouncements with constitutional interpretations seem
suspect with no attachment to revealed truth and no empirical underpinning
 Interest Balancing
o This is the dominant contemporary mode of due process
o Requires consideration of:
 Magnitude of interest of private parties
 Governmental interest in procedural efficiency
 The likely contribution of various procedural ingredients to the correct resolution of
disputes
o Court performs a social welfare calculation to determine whether society will be better or worse off if
it honors the claim to more formalized procedure
o Advantages
 Adaptability to virtually any question of procedural adequacy
 Recognition that judgments about process adequacy necessarily involve trade-offs between
collective and individual rights
o Defects
 Interest balancing suggests that given a good enough reason, the government can use
whatever process it wants
 Seems to contradict the basic libertarian presuppositions of the test that it would implement
 Information requirements of a rigorous utilitarian calculus are very substantial and perhaps
excessive
 NOTE: SCOTUS has never chosen a single approach, nor has the court achieved
consistency
JUDGE FRIENDLY’S ELEMENTS OF A FAIR AN UNBIASED TRIBUNAL
 Notice of the proposed action and the grounds asserted for it
 An opportunity to present reasons why proposed action should not be taken
 The right to call witnesses
 The right to know evidence against oneself
 The right to have a decision based exclusively on the evidence presented
 The right to counsel
 The making of a record
 The availability of a statement of reasons for the decisions
 Public attendance
 Judicial review
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GENERAL FRAMEWORK FOR PDP QUESTIONS
1. IS THERE A DEPRIVATION OF LIFE, LIBERTY OR PROPERTY?
(Only one of these is necessary to trigger DP)
A. PROPERTY
Need a “Legitimate Claim of Entitlement”  There is (1) some non-constitutional source of law that limits
the state’s decision and (2) is sufficiently determinate to engender reliance (objective standard)
Potential Sources: statute’s language or intent, historical practice, etc.
Court looks to see if the language is mandatory rather than permissive
B. LIBERTY
Roth has a list of liberty interests
Can be grounded in the Constitution
Includes coercion, denial of a tangible benefit paired with stigma, etc.
2. HOW MUCH PROCESS IS DUE?
Court determines what process is due (Loudermill)
Uses Mathews Balancing to make the determination
NOTE: The concept of property means different things in different contexts, i.e. property for the purposes of the
takings clause is narrower than for due process; First Amendment claims are completely different
GOLDBERG v. KELLY (SCOTUS, 1970)
FACTS: Residents of NY receiving AFDC or aid from NY’s general home relief program challenge the constitutional
adequacy of the procedures for notice and hearing prior to termination of financial aid
Procedure before the case
(i) Initial agency decision by a caseworker or supervisor (agency staff) to terminate
(ii) Notice
(iii) Request for review by supervisor (staff) with written submissions
(iv) Termination
(v) Hearing before an independent state hearing officer (administrative judge)
(vi) Judicial Review (article III judge)
ISSUE: The main issue is whether the due process clause requires that the recipient be afforded an evidentiary hearing
before the termination of benefits
HOLDING: The Court holds that a predetermination oral evidentiary hearing is required by procedural due process, but
these hearings do NOT need to take the form of a judicial or quasi-judicial trail
(a) Procedural protections that are added:
(i) Timely and adequate notice detailing the reasons for a proposed termination
(ii) Right to present evidence orally and to know the evidence against you and cross examine
(iii) Must be allowed to retain an attorney (but not appointed)
(iv) Impartial decision maker
(v) Decision maker’s conclusion must rest solely on legal rules and the evidence adduced at the
hearing, and the reasons for the determination should be stated and the evidence relied upon
indicated
(b) Doesn’t tell us how to balance, doesn’t tell us what property is, doesn’t tell us what the court’s
role is
New property rights in things previously seen as benefits (i.e. welfare, government jobs) which results in
constitutionally mandated due process
Court quotes from an article by Professor Reich in which he argues
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(a) A high proportion of property in the US consists of intangible entitlements to continuing
benefits
(b) A high proportion of those entitlements flow from government
(c) The traditional legal approach to property protects the entitlements of the rich but not the poor
Although the court adds more procedural elements, there are still parts of Friendly’s list that are missing
 no right to counsel (court only gives the right to retain counsel – this is a mere formality because the claimants are
so impoverished; there’s no right to a funded council)
 no public attendance
 no unbiased tribunal
 no full record/opinion required
 there’s also no pre-termination judicial review
Court picks and chooses from Friendly’s list because of expense. Each of these safeguards won’t necessarily
improve the accuracy of the hearing
 How do you fix this so the process isn’t as expensive?
o Make criteria for termination very specific  replace social workers with bureaucrats
o Make criteria very open-ended instead of moving towards bright line rules
Goldberg signals a change, but doesn’t exactly explain exactly what the doctrine is – the next series of cases provide this
NOTE: The due process clause does NOT say that no person should be affected by governmental action without due
process; rather it says that no person should be deprived of life, liberty, or property without due process of law
BOARD OF REGENTS OF STATE COLLEGES v. ROTH (SCOTUS, 1972)
FACTS: Roth was hired for a fixed term on one year at WI State University - Oshkosh, and was not rehired the
following year. He expected to be rehired, but the college never game him any assurance that he would be retained
behind the first year
ISSUE: whether the failure of University officials to give Roth notice of any reason for non-retention and lack of hearing
violated 14th amendment PDP. (note: in this case there’s NO procedure, unlike in Goldberg where there was procedure
but the court said it wasn’t enough)
HOLD: Court holds that this employment is not protected by due process: “to have a property interest in a benefit, a
person clearly must have more than an abstract need or desire for it. He must have more than a unilateral expectation of
it. He must instead have a legitimate claim of entitlement to it.”
Roth did not have a property interest significant enough to require the University to give him a hearing when they didn’t
renew his contract.
Furthermore, no liberty interest is implicated: there was no suggestion that the respondent’s good name, reputation,
honor, or integrity are at stake, or that the State imposed on him a stigma or other disability that foreclosed his freedom
to take advantage of other employment opportunities
MARSHALL’S DISSENT  anyone who is denied a government job deserves a hearing because a job is pretty
important
DOUGLAS’S DISSENT  If someone has an important interest, then they should have a hearing
For a property interest you need a Legitimate Claim of Entitlement (i.e. claim of entitlement grounded in nonconstitutional law that is sufficient to create reliance and is sufficiently determine)
Liberty CAN be grounded in the Constitution
Potential Sources of LCE
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





State statutes
Regulation
Contract
Judicial decisions
Practice of history – one can’t exercise discretion irrationally  Sindermann
Statute’s intent
o i.e. if the state law about licenses says that its purpose is to ensure good teachers – if this was the case,
Roth could appeal to the purposes of the statute – he’s a good teacher and the point of the statute is
to educate
What is a Legitimate Claim of Entitlement?
 “All teachers will be reemployed if they score > 80 on the annual exam”
o Legal argument available  scored above 80
o Reasonable reliance
 Clear and determinate such that it’s the kind of thing that people can base their expectations
on  sufficiently clear to create expectations
 “All teachers reemployed if competent”
o Legal argument available  “I was competent”
o Reasonable reliance
o Sufficiently determinate
 “All teachers reemployed at discretion of university”
o Legal argument available  although text doesn’t give me any clear standard, nonetheless, given the
underlying purpose of the statute, which ahs to do with education, it’s not a good idea not to
reemploy me. I’m a great teacher
o TOO BAD  not the kind of non-constitutional law that would ground reliance
The source of non-constitutional law must be sufficiently specific
 “Teachers shall be reemployed at the discretion of the University” (like Roth) – no LCE
 “All teachers who score more the 85% on annual teachers’ exam must be rehired.” – likely LCE
 “All teachers shall be rehired except for incompetence of bad behavior.” – this type of for-cause standard
generally created an LCE (see Loudermill)
 In Roth, the statute says something like “teachers shall be reemployed at the discretion of the University,” this did
not create a LCE
 Note: in these cases, process is given where the law is more clear but not where it’s vague – this seems a little backward
Mandatory v. Permissive Language
 i.e. “teachers shall be rehired” v. “teachers may be rehired.”
 This is not crucial, but it’s part of the same idea – if it’s permissive it point to conditions that are relevant, but it’s
less clear about what the statute means
LIBERTY
 Created by the Constitution itself
 All different kind of liberty interests – paradigm is coercive enforcement
 Roth provides a list of liberty interests
o “Not merely freedom from bodily restraint, but also the right of the individual to contract, to engage
in any of the common occupations of life, to acquire useful knowledge, to marry, establish a home
and bring up children, to worship god according to the dictates of his own conscience and generally
to enjoy those privileges long recognized”
 When looking for a liberty interest, if it’s not on the Roth list, try to reason by analogy
 “Stigma +”
o Stigma alone isn’t a deprivation of liberty, but denying someone a tangible benefit AND stigmatizing
them (casting out their reputation) does count as an infringement
 Hypo: Roth can’t work in any school – this affects his occupational liberty, but there’s no stigma attached – it
doesn’t say he can’t teach anywhere b/c he’s a bad guy
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
Hypo: website describing Roth as a bad teacher – Paul v. David said this doesn’t implicate liberty
Roth has a colorable 1st Amendment claim if he can show that he was fired b/c of protected speech, even if he
doesn’t have an independent entitlement to benefits
 Roth can take his 1st Amendment claim to federal or state court, but not basis for administrative hearing
Court didn’t allow showing of “grievous loss” because that part of Goldberg was dicta. Goldberg didn’t hold
that grievous loss implicated a property interest. No mandatory test.
Post-Roth, agencies can respond to procedural impositions by:
(1) making statute or rules more indeterminate or
(2) repealing the statute entirely.
Where statutes are indeterminate and SCOTUS isn’t enforcing non-delegation doctrine, we need protection of
constitutional PDP. Irony of Roth is that where our statutes are most indeterminate, we lose PDP.
PERRY v. SINDERMANN (SCOTUS, 1972)
FACTS: Sindermann’s one-year contract was not renewed although he’d been teaching in the Texas state college system
for 10 years
HOLDNG: Court help that Sindermann had a LCE despite the lack of any formal tenure status at the college because
he relied upon several statements contained in the college’s publications that indicated the college’s intent to retain
indefinitely any employee who had taught at the college for more than seven years as long as the teacher’s performance
was satisfactory – the reliance on these statements was enough to turn a unilateral expectation into a LCE
Informal practices and unwritten rules can lead to an LCE
CLEVELAND BOARD OF EDUCATION v. LOUDERMILL (SCOTUS, 1985)
FACTS: Loudermill was discharged from employment because he never told them he was a felon. He had no
opportunity to respond to the charges against him prior to removal. Ohio statute says that classified civil servants can
be terminated only for cause and may obtain administrative review after discharge.
ISSUE: What predetermination process must be accorded to a public employee who can be discharged only for cause?
HOLD: while the legislature may elect not to confer a property interest in public employment, it may not
constitutionally authorize the deprivation of such an interest once conferred without appropriate procedural safeguards
– The Ohio statute had created an LCE because it said that Loudermill couldn’t be terminated without cause
In this case, Loudermill deserved a pre-termination opportunity to respond, coupled with post-termination
administrative procedures as provided by the Ohio statute.
Transition case between Roth/Sindermann and Mathews
Once there is life, liberty, or property, courts independently determine what process is due
“For cause” creates an LCE
The majority restates the general rubric of Roth
 “Property interests are not created by the Constitution, they are created and their dimensions are defined by
existing rules or understandings that stem from an independent source such as state law,” the court then finds that
the procedural dimensions of the right to discharge only for cause under the Ohio statute are defined not by state
law
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Some hearing should occur prior to the government’s deprivation of one’s life, liberty, or property, but the
formality requires for the pre-deprivation hearing will depend on the promptness and fullness of any postdeprivation hearing that may be available to claimant
Effect  creates an incentive for the stat to make statutes indeterminate so that there wont’ be a sufficient LCE for
courts to come in and say that the procedures aren’t good enough.
Note: a statute like “all competent teachers should be reemployed” would presumably be specific enough post-Loudermill
to create a property interest.
Distinguishing Arnett v. Kennedy (SCOTUS, 1974)
 Arnett says that procedural claimants must take the bitter with the sweet (i.e. Ohio was generous to grant jobs with
substantive protections, but as part of that, people have to deal with procedural limitations.)
 But in Loudermill, the court gives more than the states gives – how is this consistent with Arnett?
 Arnett was a plurality, and thus, since there’s no majority it isn’t binding – the court can depart from the prior
plurality without overruling it because it’s not official doctrine. Ergo, the court can add procedural entitlements
that the state or federal legislature hasn’t specified in the statutes.
 Generally, as a matter of constitutional doctrine, the “bitter with the sweet” idea isn’t used – and now,
post Loudermill, it’s definitely not used with procedural due process
MATHEWS v. ELDRIDGE (SCOTUS, 1976)
FACTS: Eldridge’s disability benefits were cut off when the government determined that he was no longer disabled.
The existing procedure for terminating benefits included: 1) proposed determination; 2) notice; 3) disclosure of file; 4)
written participation (send in objection); 5) termination; 6) post-termination hearing. A property interest is created by
the disability statute  “unable to engage in gainful activity because of medical impairment” is sufficiently specific to
constitute a property interest
ISSUE: whether the due process clause of the 5th Amendment requires that prior to termination of Social Security
disability benefit payments the recipient be afforded an opportunity for an evidentiary hearing.
HOLDING: Court held that an evidentiary hearing is not required prior to the termination of disability benefits and the
present administrative procedures fully comport with due process. Court seems to say that you should use this test
when you need due process.
Mathews Balancing test:
(a) Private Interests that will be affected
(b) Public/Government Interest (Government’s interest and financial administrative burdens of addition procedural
requirements)
(c) Impact of Procedure Claimed, Error Reduction (Risk of erroneous deprivation of such interests through the
procedures used and the probably value, if any, of additional or substitute procedural safeguards)
BOTTOM LINE: if you are deprived of a protected interest, you are going to be allowed to have some type of
hearing, maybe written, maybe oral, pre- or post-termination.
Inherent in this balancing test is the idea that we need to tolerate some level of error. The question is how
much?
This is NOT a straight cost-benefit analysis
 This case is asking courts to engage in open-ended, moral balancing – not just cost benefit. Must also consider
fairness and distributive justice
Distinguishing Goldberg from Mathews
Court notes that the private interest at stake is less weighty than in Goldberg, and that the procedure would be less
good at reducing error because of the nature of medical evidence
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COST BENEFIT IN GENERAL
 Basic notion is efficiency
 Technical explanation: aggregating monetary equivalents: willingness to pay/willingness to accept amounts
 In theory – you’re supposed to do cost benefit for everyone in the population
o For each person, you need to measure the well-being impact using money
o To do this, we must ask how must each individual is willing to pay for each provision
 Money isn’t a perfect metric for measuring well-being, but it’s usable
 Hypo: there is a group of eligible beneficiaries for some government benefit (disability, ss, welfare, etc.) who
are, under current procedures being wrongly denied the benefit. The total amount wrongly denied per year is
$1 million. How much should society spend on procedures to correct the error? Adler suggests that the cost
shouldn’t be more than the benefit.
o i.e. the cost to the taxpayers shouldn’t be more than the benefit to the beneficiaries, which suggests
that we shouldn’t pay any more for extra procedure.
 Adler says: if you take cost benefit, even in a sophisticated form, it’s only a method of tracking overall wellbeing, not of distributive justice, ergo, it’s difficult to think of Matthews as a strict cost benefit test. Rather
than cost benefit, Mathews seems to be a more open ended moral balancing which considers overall welfare as
well as fair distribution.
 Intrinsic benefit of procedure – “process values”
o Adler says that participation has intrinsic well-being benefits separate from potential accuracy and
balancing should take this into account as well
APA CONTRAINTS: FORMAL ADJUDICATION
NOTE: Almost everything from Friendly’s list is provided for under formal adjudication, except the right to a public
hearing
ADMINISTRATIVE LAW JUDGES
 Not Article III judges
 They’re not protected from the political process like federal judges, but they’re protected through §3105, random
assignment
 They are civil servants appointed by the agency
 Action may be taken against them only for good cause
 §5372 protects their pay, APA, Office of Personnel Management sets ALJ pay, not the agency employing the ALJ
ADJUDICATIVE V. LEGISLATIVE FACTS
 Adjudicative Facts: facts about parties and their activities, businesses, and properties
 Legislative Facts: generally don’t concern the immediate parties, but are general facts that help the tribunal decide
law or policy
ALJ AND ADMINISTRATOR/COMMISSIONER
 Morgan Precedent – Initially, SCOTUS said that the administrator is supposed to make a personal decision – it
can’t be ghost written/adjudicated by staff, but this was reversed – a person can now rely on others to make the
decision.
 Separation of Functions
o The administrator may combine functions, i.e. he can be involved in rulemaking and in the
determination that a party violated a rule
o The ALJ may NOT combine functions - §554(d)(2): AJL can’t report to individuals involved in
prosecution, presumably this means that the ALJ can’t be involved in prosecution
FEDERAL STATUTORY HEARING RIGHTS
 Statutes are the starting point for determining the existence of hearing rights
o Does the organic statute require any hearing?
o If so, is it “public hearing on the record”?
17
 Does the organic statute modify or add to the APA-proscribed procedural elements?
 If a hearing is required, but APA requirements aren’t triggered, what sort of hearing is necessary?
PROCESS OF FORMAL ADJUDICATION
 §554  sets up triggering structure
o §554(b)  notice
o §554(c)  pre-hearing briefing and proposals of settlement; if that doesn’t happen then get to next
step
 §556  hearing
o §556(b)  presiding at hearing
 limited to agency, ALJ, one or more of commissioners
 Creates ability for agencies to create ALJs
 Notion of impartiality, regardless who presides
o Hearing leads to decision  particular directive with opinion
 §557  decision
o §557(b)  links with §556
 ALJ presides over hearing, but who makes the decision?
 ALJ could make decision or just hear the hearing then certify hearing up to agency for
decision
o §557(c)  what happens with decision
 Opinion
 Directive
SEACOAST ANTI-POLLUTION LEAGUE v. COSTLE (1st CIRCUIT APPEALS, 1978)
FACTS: EPA granted PSCO a permit to pollute. Petitioners assert that the proceedings by which the APA decided the
case contravened certain provisions of the APA governing adjudicatory hearings. Respondents say that the APA doesn’t
apply to proceedings held pursuant to §316 or §402 of the Federal Water Pollution Control Act; Relevant statute is the
FWPCA, which grants a discharge permit for pollutants after “public hearing” (§402), and which requires exemption in
certain cases after “public hearing” (§316)
HOLDING: the words “after public hearing” or “after hearing on the record” in the organic statute is sufficient to
trigger formal adjudication. PSCO gives additional information, which injures §556(d)  oral hearing requirement.
Administrator’s consultation with in-house panel violates §556(e)  record compiled during hearing process should be
exclusive record for decision
Formal Adjudication Is Required if There’s Triggering Language in the Organic Statute (“after hearing on the
record”)
§556(d) – Presumptive right to cross-examination
9th Circuit: “Hearing” is enough to trigger Formal Adjudication
Everywhere Else: Need precise language “Hearing on the Record” – “hearing” or “public hearing” isn’t
enough (Chemical Waste, D.C. Circuit)
UNDER §556(D), YOU HAVE A PRESUMPTIVE RIGHT TO CROSS-EXAMINATION
 PSCO provided supplemental information, which was okay, but the problem was the Seacoast wasn’t allows to
cross examine
Note: Adler says we must distinguish between two ways that a hearing can be oral: presenting your own evidence and
challenging the other side’s evidence
§556(d)
NORMAL CASE
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LAST-SENTENCE CASE
(rule making, determining claims
for money or benefits or
Initial Presentation of Evidence
Absolute right to present oral or
written evidence
Challenging other side’s evidence
Presumptive right to crossexamine, as requires for full and
true disclosure
applications for initial licenses)
Court may adopt procedures for
submission of all or part of
evidence in written form when a
party will not be prejudiced
thereby
Presumptive right to cross
examine, as required for full and
true disclosure
EPA VIOLATION OF §556(E)
 §556(e) says, “the transcript of testimony and exhibits, together with all papers and requests filed in the
proceeding, constitutes the exclusive record for decision…”
 Administrator was allowed to consult with an in house panel, but if he relied on the information
gathered, it must be in the record (which was the violation here)
 Sifting and analyzing isn’t a violation of §556(e) – but the consultation can’t provide for new first order
evidence.
 Problem was that the administrator relied on information not on the record
EX PARTE CONTACTS
 §557(d) is a per se rule against ex parte contacts from interested persons outside the agency
 §554(d)(1) deals with ALJ ex parte contacts – ALJ can’t have ex parte contact even with an administrator
 §556(e) deals with what the administrator relies upon
 Any in-house contact with an administrator is fine, as long as he doesn’t rely upon it, otherwise it’s a
violation of §556(e)
UNITED STATES v. FLORIDA EAST COAST RAILWAY (SCOTUS, 1973)
(Rulemaking)
FACTS: Interstate Commerce Commission (ICC) adopted per diem boxcar charges without a formal hearing. The
organic statute said: ICC “may, after hearing” issue rules establishing such charges. §1(14)(a). Florida East Coast argued
that the language required formal rule making proceedings. (i.e. oral hearing.)
HOLDING: “Hearing” or “public hearing” is not sufficient to trigger formal rulemaking as required by §553(c)  need
something like “hearing on the record”
To trigger formal rulemaking, organic statute must say “hearing on the record.” “Hearing,” or “Public
Hearing” is not enough
RICHARDSON v. PERALES (SCOTUS, 1971)
Facts: Perales is claiming disability benefits. Had hearing in front of examiner, where his own doctor testified that he
was injured, but adverse evidence (from government doctors) was submitted by written reports. Such evidence would
be hearsay in regular courts (out of court statement admitted for its truth.)
Issue:
 1. Does the APA prohibit the admission of hearsay evidence?
 2. Does the plaintiff’s inability to cross-examine violate APA?
Holding:
 1. “Hearsay, under either Act, is admissible up to the point of relevancy.”
o § 556(d): Allows admission of oral OR written evidence, EXCEPT for anything irrelevant or
repetitive  Any relevant evidence is admissible.
 2. Right to cross-examine is WAIVABLE – Perales did not subpoena any witnesses, so he has waived that
right.
o § 556(d) test: Use cross-examination whenever it would improve accuracy (“as may be required for a
full and true disclosure of the facts” )
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
 Adler would read this broadly, although SCt has not resolved
§556(d)  Hearsay is admissible up to the point of relevancy
All APA rights are waiveable
Admissibility of Hearsay Evidence
 §556(d): any relevant evidence may be introduced – this includes hearsay
 In contrast, FRE allows all relevant evidence except hearsay
 §556(d): Hearsay is admissible up to the point of relevancy, and subject to cross-examination under 556(d), but
here, because Perales waived his right to a subpoena, cross-examination isn’t an issue
Cross Examination
 If oral or written evidence comes in, you can cross examine under 556(d), presumptively by subpoena
 Reasons for limiting cross examination
o APA: if cross-examination is not important for accuracy (don’t look at the cost like Mathews)
o PDP: uses Mathews balancing test – if CE is not important for accuracy – this is less likely to grant
cross-ex b/c you’re balancing under other things.
APA CONTRAINTS: INFORMAL ADJUDICATION
PENSION BENEFIT GUARANTY CORP. v. THE LTV CORP. (SCOTUS, 1990)
FACTS: PBGC administers a government insurance program under ERISA; PBGC terminated LTV’s plan because of
insufficient funds. Then LTV settled with workers so as to put them in same position they would have been in under
the old plan. (“Follow-on” plans – an abusive practice that results in PBGC subsidization)...PBGC reevaluated and
issued a notice of restoration with minimal procedures  no written submission, no opportunity to challenge facts.
LTV refused to comply. Claims that the restoration, which was an adjudication, was arbitrary and capricious (§706(2)(A))
Not even minimal triggering language in ERISA, so not a formal adjudication. Instead it’s an informal adjudication
HOLDNG: Upheld agency’s procedures:
o Courts should be highly deferential to agencies in interpreting agencies’ organic statutes to create
procedural requirements. Reaffirms Vermont Yankee and rejects Califano
 Courts should hesitate to infer procedure where agency has declined to do so: Where organic
statute contains no specific procedural mandates, no inference
Courts should be VERY deferential to agencies in imposing procedural requirements under the agency’s
organic statues - do not invalidate agency procedure under a governing statute unless there’s a clear violation
of the agency’s governing statute or the APA
“When the due process clause is not implicated and an agency’s governing statute contains no specific
procedural mandates, the APA establishes the maximum procedural requirements a reviewing court may
impose on agencies.”
706(2)(a) does apply to both formal and informal proceedings, but it is NOT a source of participatory
procedures (i.e. hearing rights.)
§555 GOVERNS INFORMAL ADJUDICATION
 But doesn’t afford any hearing rights.
 Provides minimal requirements
 Right to be attended by counsel
 Right to subpoena under certain conditions
 Right to brief statement when agency denies written petition
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No property interest because the statute is so vague: “restore when appropriate,” “whenever it advances the purposes of
Employee Retirement Income Security Act (ERISA)”
Potential Sources of challenge to agency action in Pension Benefit:
 APA provision governing FA (§ 554, § 556, § 557)
o  Not triggered by ERISA
 APA provisions governing IA (§ 555)
o  Provision is a whole lot of nothing – virtually nothing on Friendly’s list is in play
 PDP challenge
o Property interest: ERISA says PBGC may restore when appropriate and consistent with duties under
the Act
  Too open-ended to create an LCE under Roth
o Liberty interest: Must be grounded in the Constitution, and it isn’t here
 Organic statute challenge (ERISA):
o “When appropriate and consistent with duties under this Act”
  Case would be easier if statute were more specific – but it’s very broad
 Deference to agency interpretation.
 APA provision forbidding “arbitrary and capricious” agency action (§ 706(2)(a)):
o Court confirms that §706(2)(a) is not an independent source of hearing rights. Denial of a hearing
does not violate that provision.
CALIFANO v. YAMASAKI (SCOTUS, 1979)
FACTS: SSA §204(a) deals with recouping disability benefit overpayments through deduction of future payments.
Secretary made an ex parte determination that an overpayment occurred, notified recipient, and shifted burden to
recipient to either (1) seek reconsideration to contest accuracy of determination, or (2) ask secretary to forgive the debt
and waive recovery in accordance with §204(b), which precludes recouping where the secretary finds that recipient is
without fault and recovery would defeat the Act’s purpose to be inequitable, or without good conscience.
HOLDING: Court holds that an opportunity for pre-recoupment hearing (court says there’s an implicit right to an oral
hearing) is required when the recipient requests waiver under §240(b), although the statute (like in PBGC) doesn’t speak
specifically to procedure.
§240(a) doesn’t require oral hearing because of the nature of the evidence – written submissions are adequate for
resolving most §204(a) disputes. §240(b) requires an evaluation of fault, which requires assessing recipients credibility
which makes written submissions inadequate.
More creative reading of statutes asked for here  not controlling because Pension Benefit is later; Court declined to
follow
SECTION III: RULEMAKING
CONSTITUTIONAL CONTRAINTS: PDP
LONDONER v. CITY AND COUNTY OF DENVER (SCOTUS, 1908)
FACTS: City Council paved a road and levied a tax against nearby landowners to pay for the road. Londoner, one of
these landowners claims that they weren’t able to contest at this hearing. Procedures in place  notice of proposed
taxes, written submissions by individuals, city council makes decision.
HOLDING: There is notice and a written hearing, but the court didn’t think it was enough in this case; Court holds that
a pre-tax oral hearing is required. Violates PDP because it’s like an adjudication
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SMALL CLASS EXCEPTION: Even if the agency issues a “rule” it will be treated as an order for PDP
purposes if it (1) applies to a very small number of people, and (2) rests on specific facts about the particular
people
This case triggers PDP because it’s really an order, not a rule, and only orders trigger PDP.
For this exception to come into play, the agency must have relied upon adjudicative rather than legislative
facts.
Small class exception to the general doctrine that DP doesn’t apply to rulemaking
A Rule is a formally general directive, except a formally general directive that (1) applies to a very small number of
persons and (2) rests on specific facts about the particular people. (This, for all intents and purposes, makes it an order,
and thus is will be treated as an order for this analysis)
The small class exception is also relevant to the APA
 You could argue that something is actually an adjudication and thus should be dealt with using x, y, z
BI-METALLIC INVESTMENT CO. v. STATE BOARD OF EQUALIZATION OF
COLORADO (SCOTUS, 1915)
FACTS: Tax Commission increased the assessed value of all property in Denver by 40%, and the commission ostensibly
didn’t follow any procedures before doing this
HOLDING: Court holds that when a rule of conduct applies to more than a few people, it’s impracticable that everyone
should have a direct voice in its adoption – their rights are protected by power over those who make the rules.
PDP Does NOT apply to rules – it’s impractical that everyone should have a voice in its adoption
An agency could issue a rule like “no teacher who fails to score above 70 on the annual exam shall be reemployed” –
there is no PDP claim
“No person without a B.A. may teach in this state” – this infringes upon liberty, but PDP doesn’t apply because it’s a
rule
Note: APA doesn’t apply to Londener or Bi-Metalic because they’re state, not federal agencies
APA CONSTRAINTS: FORMAL RULEMAKING
§553: RULEMAKING – ONLY APPLIES TO SUBSTANTIVE LEGISLATIVE RULES
 Section applies to rulemaking.
o Exceptions § 553(a):
 Military/foreign affairs function of the US
 Or matter relating to agency management/personnel/public
property/loans/grants/benefits/contracts
  So SSA disability benefits would fit into this exception (seems big)
 § 553(b): Notice
o Does not apply to:
 Interpretative rules, policy statements, rules of agency procedure
 Good cause exception – when agency finds “good cause” that notice and public comment
are impracticable, unnecessary, or contrary to the public interest
o  But many agencies choose to follow process voluntarily, even though they fall into this HUGE
category of exceptions under §553(a)(2)
 § 553(c): Comment and statement of basis and purpose
o Only in play if § 553(b) is in play
22
 If organic statute says “hearing on the record”, the § 556 and § 557 are in play (FL East Coast)
 Congressional authorization to make legislative-like decisions is presumed to have authorized legislative-like
procedures – unless the organic statute clearly mandates formality
TYPES OF RULES
Substantive Rules
 Legislative Rules – restructure adjudication, have full force and effect of law
 Interpretive Rules – relevant legal standard remains the same, but the interpretive rule has some weight (same
weight as precedent); policy statements
 ADLER SAYS: If an agency has gone through notice and comment rulemaking, it’s a legislative rule, otherwise
it’s interpretive
Procedural Rules
ADJUDICATORY V. LEGISLATIVE DECISIONS
 Bi-Metallic says: where a rule of conduct applies to more than a few people, it’s impracticable that everyone should
have a direct voice in its adoption
 but congress enacts private legislation affecting individuals and courts decide class actions, ergo, number of people
is relevant but not dispositive.
 Legislative judgments are forward-looking, which adjudicatory judgments are retrospective
 Factual basis: adjudicative facts are about the parties and their activities while legislative facts don’t concern
immediate parties but are general facts that help decide questions of law, policy, and discretion
 Parties have little to contribute with legislative facts, but with adjudicative facts they can affect accuracy
WIRTZ v. BALDON ELECTRICT CO. (DC COURT OF APPEALS, 1963)
FACTS: Walsh-Healy Statue orders an agency to issue a formal rule “on the record after opportunity for a hearing”
establishing minimum wage in a certain industry. The Department of Labor used wage tables determined by a survey to
support their rule. The Dept. refused to disclose the underlying data that was collected confidentially.
HOLDING: Court finds a violation of §556(d), because there was no opportunity for cross-examination with regard to
the information used in the tables – the underlying data must be available to the opposing parties to the extent necessary
for rebuttal and cross-examination. Act requires that all wage determinations be made “on the record after opportunity
for hearing”  trigger procedures in §556 per Florida East Coast.
The agency must provide its underlying data for meaningful cross-examination and rebuttal
VIOLATION OF §556(D)
 DOL didn’t disclose the info they used to create the tables, and thus there was no opportunity for crossexamination
NOTE: Formal Rulemaking is relatively rare in practice because it embodies so many features of a judicial trial. IR
requires much less, so agencies choose to do this since most statutes don’t trigger FR
FORMAL RULEMAKING V. FORMAL ADJUDICATION
 In both cases, cross-examination can be eliminated if there’s no prejudice (i.e. if it’s not requires for full and true
disclosure of the facts)
 “Last Sentence” Cases apply to formal rule making (i.e. court may adopt procedures for submission of evidence
only in written form if the party is not prejudiced thereby)
 §554 doesn’t apply to rule making, ergo there’s no bar on in-house consultation
APA CONSTRAINTS: INFORMAL RULEMAKING (I.E. “NOTICE AND
COMMENT”)
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PROCEDURES FOR IR
 §706(2)(a)  ACR
 §553  duty to respond to comments
 §553  Disclosure  implicit in right to comment, which is not meaningful if the agency can rely upon
contestable material with no opportunity to refute
 §553  Final rule must be logical outgrowth of initial notice
 §706(2)(c)  within statutory requirements
AUTOMOTIVE PARTS & ACCESSORIES ASS’N v. BOYD (DC CIR., 1968)
 Facts: Motor Vehicle Safety Std No. 202 requires new US manufactured passenger cars be factory-equipped with
front seat head restraints that meet specific federal standards. Auto accessories manufacturers claimed invalid b/c
lacked FRM 556/557 requirements
 Legislative history indicates Congress intended informal RM. Didn’t include 556, 557 triggers.
 “Secretary will utilize the informal rulemaking procedures of §553 and that he need hold a formal hearing under
§556/557 only if he determines that such a hearing is desirable.”
 Court defines what is required by the standard in the act as “concise general statement of basis and
purpose”
 Requirement of a statement of basis and purpose must be interpreted in a manner consistent with a
reviewing court’s need “to see what major issues of policy were ventilated by the informal proceedings
and why the agency reacted to them as it did.”
NAT’L TIRE DEALERS & RETREADERS ASSOC. v. BRINEGAR (DC CIR., 1974)
 FACTS: Federal Motor Vehicle Safety Std No. 117 forces all tire dealers to permanently label retreaded tire side
w/info
 Determination arbitrary under APA §706. Permanent labeling doesn’t significantly relate to Act’s purpose.
 Lots of N & C responses that the permanent labeling is economically unfeasible and unreasonably costly.
 Agency can base decision on info available in its files and upon its expertise, but can’t allude to info outside the
record where powerful doubts exist by on-the-record comments as to practicality  agency rationale put
forward not plausible given the comments  arbitrary
 Substance and procedure seemingly merging in rationality review of laws; failure to get sufficient evidence
on practicability substantive, failure to respond procedural?
 Assumption that review for arbitrariness is less demanding than review for substantial evidence is mistaken.
MOTOR VEHICLE MANUFACTURERS v. STATE FARM (SCOTUS, 1983)
FACTS: NHTSA administers the Motor Vehicle Safety Act: “NHTSA shall issue rules that meet the need for motor
vehicle safety.” In 1977 NHTSA issued the passive restraint rule, but repealed it in 1981. The Insurance companies are
challenging this by saying that it’s a violation of 706(2)(a)
HOLDING: rescission of the rule was arbitrary and capricious because there was no good reason for not requiring
airbags (they didn’t look to all the options, etc.) – for something to NOT be arbitrary and capricious, you need
contemporaneous reasons – not post hoc rationalization
For a rule to survive a §706(2)(a) challenge, there must have been actual, contemporaneous rationality
Adler thinks that §706(2)(c) would have been available in this case, but D chose not to use it.
This is one of his favorite cases (part of the “crucible”)
§706(2)(A) – ARBITRARY AND CAPRICIOUS REVIEW
 This is important because there aren’t as many constraints in informal RM
 The agency’s actual, contemporaneous reasoning is captured in the statement of purpose, and the court
must rule that these reasons are good enough.
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 This is more demanding than the minimum rationality a statue must bear in order to withstand analysis
under DP
 See footnote 9 in State Farm: “We no not view as equivalent the presumption of constitutionality afforded
legislation drafted by congress and the presumption of regularity afforded an agency in fulfilling its
statutory mandate.” – different standard of review – stricter standard
 Legislative SDP is minimal rationality: as long as the court can imagine some reason and some
facts supporting governments decisions it will be sustained
 Post Lochner, SDP challenge to at least an economic agency rule will fail
 Maybe the point of the APA is filling in for the constitutional constraints that have been gone
since 1937
Because 706(2)(a) doesn’t apply to congress – if they don’t like the fact that a court invalidated a statute, then they can
legislate and there won’t be any arbitrary and capricious challenge.



PACIFIC STATES BOX & BASKET v. WHITE (SCOTUS, 1935)
Facts: State agency promulgates rules relating to the size of strawberry boxes (state agency not subject to APA, and
it’s pre-APA anyway.)
Issue: Does this rule violate rights under DP clause of 14th Amendment?
Holding: No. Arbitrary and capricious (substantive challenges) to agencies exercising delegated power is
hypothetical rationality, at least for traditional police powers delegated by the Constitution. Indifferent to
legislative motives or reasoning.
SDP scrutiny of an agency decision is going to be done using hypothetical rationality
UNITED STATES v. NOVA SCOTIA FOOD PRODUCTS CORP. (2nd CIRCUIT
APPEALS, 1977)
FACTS: FDA promulgated a rule requiring hot-process smoked fish be heated by a certain type of controlled heat
process (TTS). Appellants argue that the regulation is invalid of §553 violations, specifically non-disclosure of evidence,
and that the agency wasn’t sufficiently responsive to comments.
HOLDING: The court rules that this is a violation of §553 because the agency was not responsive to written
comments, and did not disclose their evidence
For comments to be meaningful, the agency must disclose the data upon which they rely and they must be
sufficiently responsive to comments
(Court in effect mandates a quasi-official record)
Articulation requirement is explicit
 §553(c): …the agency shall incorporate in the rules adopted a concise general statement of their basis and purpose…
§553 Requires an agency to give “interested persons an opportunity to participate in the rule making through
submission of written data, views, or arguments, with or without the opportunity for oral presentation.”
 Implicit requirement of responsiveness: agency doesn’t have to respond to each comment individually, but must
at least respond to the main points
Final rule must be logical outgrowth of initial notice.
Some change is fine but radical change isn’t.
§706(2)(a) does NOT require all of this
Why does the court read these implicit requirements into §553?
25
 By requiring the agency to disclose evidence, it seems like the court is essentially mandating a public record – in a
way, in a common law fashion, the court is building up the requirements and essentially mimicking the
requirements for formal rulemaking but mandating an official record
 What’s important is the language of meaningful comment – need all the available information for this
 Note: this case does NOT violate 706(2)(a) because reasoned decision-making does not require public
participation, not does it require comment or evidence disclosure.
NOTE: Although this is a lower court decision, it’s generally followed.
VERMONT YANKEE NUCLEAR POWER v. NATURAL RESOURCES DEFENSE
COUNCIL (SUPREME COURT, 1978)
FACTS: This involves an operating license hearing during which issues about environmental concerns arise. Nuclear
Regulatory Commission then enacts a rule that says that for purposes of licensing nuclear plans, the environmental
effects of disposing spent fuel won’t be counted – zero cost and zero weight is attached to the environmental effects of
spent fuel. Public interest groups want cross-examination, and full oral hearing
HOLDING: Court holds that §553 never requires cross-examination rights or oral presentation of direct evidence.
§553 does not require cross examination or oral presentation of evidence
Courts should defer to agencies regarding procedural requirements of statutes (not constitutional DP);
deference to agency decisions on statutory procedural grounds
Two readings
1. Broad  Courts defer to agencies regarding procedural questions under all statutes
2. Narrower  Courts defer to agencies regarding procedural questions under agency organic statutes
This is only in regards to the agency’s organic statute, not cross-cutting
§706(2)(a) does NOT require participatory procedures
NOTE: In this case there is both adjudication (nuclear plant licensing) and rulemaking (relevance of disposal to approval
of nuclear plants)
FOR IR, THERE’S NO BAN ON EX PARTE CONTACTS
 Although there still are some protections, there’s still opportunity for interest groups to influence people behind
closed doors
 Pro-prohibition – comments are not fair and full w/ ex parte
 Anti-prohibition – they’re already prohibited in formal, so what’s the point of prohibiting them in informal – it
seems implied that that are fewer restrictions in informal.
ASSOCIATION OF NATIONAL ADVERTISERS, INC. v. FTC (DC APPEALS 1979)
FACTS: FTC made a rule regulating children’s advertising and D challenged the rule based on the chairman’s
impartiality because he’d made anti-advertising statements at an earlier time. Limited cross-examination right in the FTC
statute on certain issues
ISSUE: Whether chairman is disqualified from presiding over the rulemaking because of his openly anti-advertising
stance
For an agency member to be disqualified for impartiality, there must be clear and convincing evidence (i.e.
compelling proof) that they have an unalterably closed mind on matters critical to the disposition of the
proceeding
This is essentially an impossible standard to fulfill.
26
Note: there are different notions of impartiality – financial bias and prejudgment. This doctrine seems to deal with the
prejudgment of adjudicatory facts
§556(b) – formal adjudication - The functions of presiding employees and of employees participating in decisions in
accordance with section 557 of this title shall be conducted in an impartial manner
THE ADJUDICATION-RULEMAKING CHOICE
I.E. WHETHER OR NOT TO HAVE A LEGISLATIVE RULE
CHOICE TO HAVE A LEGISLATIVE RULE
LEGISLATIVE RULE
 Restructures the inquiry in adjudication so that the inquiry simply becomes what is the status of the claimant
under the rule  this is the only hearing right you have
 Legislative rules truncate whatever hearing rights you have through a statute
 Truncates, restructures, and limits the issues with respect to your hearing
 This is why §553 puts fairly substantial requirements on legislative rulemaking
 Courts will read statutory rulemaking authorization pretty generally to authorize a legislative rule
Possible Objections to Legislative Rules
 Statutory/APA right to hearing in Adjudication (but the court in Campbell says that if an agency’s statute simply
talks about “hearings” this means hearings as limited by the valid legal rules that the agency issues)
 Procedural Due Process
PDP Analysis of Agency’s Use of a Legislative Rule
 Bi-Metallic says the process that leads up to the grid rule itself is not subject to PDP
 Assuming there’s a protected interest, PDP applies to the structure of hearing, NOT to the choice to use a
legislative rule to truncate adjudication
 PDP only gives you hearing rights as structured through valid legislative rules – you only get hearing rights
concerning the application of legislative rules
 HYPO: If agency said “we will adjudicate disability claims using only written hearings”
 This WOULD be a PDP claim because Loudermill says that although agencies may try to limit hearing rights,
courts need not defer
Note: it’s not really a choice between the two because even with the rule in place, there’s still some
adjudication – what the legislative rule does is truncate the issues involved in adjudication
HECKLER v. CAMPBELL (SCOTUS, 1983)
FACTS: Administrators relied on grid rule to determine disability status rather than determining status on a case-bycase basis as had been done until 1978. SSA issues the grid rule to determine status and whether there are actually jobs
for people like her through informal rulemaking. Grid based on four dimension (physical ability, age, education, previous
work). Seems like Act gives applicants right to some kind of hearing
ISSUE: Whether the Secretary of HHS may rely on grid rule to determine a claimant’s right to SS benefits
HOLDING: the use of grid rule does not conflict with the statute and they’re not arbitrary or capricious
Legislative rules define and narrow relevant legal framework for adjudication – one only needs to argue over
the applicability of the rule
27
Grid Rule is a Legislative Rule
Even when the agency’s statute requires it to provide a hearing, this is trumped by the agency’s rulemaking
authority.
 Can only have hearing rights as it relates to your status under the rule
Grid rule challenge
 At the agency stage can challenge ONLY status under grid rule
 BUT can challenge the grid rule itself at judicial review stage
28
Triangular way of looking at things:
(1) What is Campbell’s status under the grid rule (i.e. which of the categories does she fit into?) – Formal oral
adjudicatory hearing
(2) Whether there’s a correlation between the grid rule and the statute – grid rule promulgated pursuant to §553
informal rulemaking
(3) Are there jobs for Campbell? There is no procedure where she gets to raise this issue
Grid Rule: People with certain
characteristics receive benefits
Issue 1:
Formal
Adjudication
Issue 2:
Informal Rulemaking
Statute: “Disability benefits if
not gainful work available in
national economy
Issue 3:
Disappears because
of legislative Rule
Campbell
Before the grid rule the issue was the claimant’s status under the statute, now it’s the status under the grid rule
 Before the rule she could introduce evidence on the availability of jobs, engage in cross-examination, get an
opinion on the issue from an ALJ
 When LR is in effect, all of the §556 elements only apply to what is the individual status under the rule; she gets
no hearing re: what jobs are in the national economy
The Court notes that there may be exceptions in certain cases, but Adler thinks this is fluff
 How could you tell what the exception would be?
 Why doesn’t Campbell have an exception?
Legal objection to the use of legislative rules
 No statutory authorization to issue legislative rule
 Not raised in this case because SSA: “Adopt reasonable and proper rules and regulations to regulate and provide
for the nature and extent of the proof and evidence and the method of taking and furnishing the same.”
 Although there’s no clear authority to issue LRs, VT Yankee and Pension Benefit say that an agency gets deference in
interpreting the statute and rule making authority
Benefits of using Legislative Rules
 Less expensive than case-by-case adjudication
 Status under the grid rule is clearer, rules provide notice
Costs of using Legislative Rules
 Rules and both under and over-inclusive relative to the underlying statute
 Leads to some inaccurate results
Note: a §706(2)(a) challenge to the decision to have a rule at all is VERY difficult
NATIONAL PETROLEUM REFINERS v. FTC (DC APPEALS, 1973)
FACTS: FTC’s governing statute, Trade Commission Act, says the FTC is empowered to prevent “unfair methods of
competition.” FTC issues bright line rule regarding octane posting. They enforce this rule by an initial adjudicative
hearing before an ALJ for a cease and desist order.
ISSUE: Does FTC have power to issue legislative rules given the ambiguous rulemaking provision and given the fact
that FTC hasn’t asserted rulemaking power from inception in 1914 until 1962
29
HOLDING: Yes. SCOTUS bends over backwards to read the Act as granting FTC rulemaking power. Just because
they haven’t used it since Schechter doesn’t mean that they can’t start using it now
Courts should read ambiguous rulemaking grants to authorize legislative rules
Without a rule saying that the failure to post octane ratings is unfair, the issue in the case would be whether, in this
particular case, it’s unfair not to post ratings. With the legislative rule, the only question is whether they did or did not
post the ratings.
NOTE: Rules also have an incentive effect (i.e. if the agency says that it’s unfair not to post ratings, then businesses will
have an incentive to post)
Octane Rule: Gas station
owners must post octane
ratings
Informal Rulemaking
Statute: Unfair
methods of
competition”
Formal
Adjudication
This issue
disappears
Petroleum Refiners
Challenges to the claim that agency’s act allows the issuance of rules
 FTC doesn’t claim to be able to authorize rules until 1962
 The rulemaking grant is ambiguous and congress has put more specific rulemaking grants in certain areas on the
assumption that the general provision doesn’t authorize legislative rules
 Schechter says the FTC is not a rulemaking body but rather an adjudication agency
AIR LINE PILOTS ASS’N v. QUESADA (2nd CIRCUIT APPEALS, 1961)
FACTS: FAA promulgated a regulation saying that no individual who has reached his 60th birthday shall be utilized or
serve as a pilot on any aircraft while engages in air carrier operations
ISSUE: Whether this is invalid because it was issued without the holding of adjudicatory proceedings required by the
APA, or whether the regulation deprived the pilots of property in their pilots’ licenses without DP
HOLDING: This is a rule being applied to individuals; it’s not adjudication.
The use of a valid legislative rule to narrow a hearing right is consistent with PDP, even if it provides no
exceptions
Court finds both a property interest and a liberty interest, but there’s no PDP violation because it’s a rule (Bi-Metallic).
This is a rule because it applies generally and is forward-looking.
“Elaborate procedural requirements are patently incompatible with the expectation with which Congress intended that
the Administrators should act in the promulgation of safety rules.”
The age 60 cut off is not arbitrary and discriminatory; it’s reasonable because supported by medical evidence and
aviation experts.
30
US DEP’T OF AGRICULTURE v. MURRAY (SCOTUS, 1973)
FACTS: USDA had a rule which made the entire household of which a “tax dependent” was a member ineligible for
food stamps for two years: (1) during the tax year for which the dependency was claimed, and (2) during the next 12
months. During these two-periods of time §5(b) creates a conclusive presumption that the “tax-dependent’s” household
is not needy and has access to nutritional adequacy.
HOLDING: The deduction taken for the benefit of the parent in the prior year is not a rational measure of the need of
a different household with which the child of the tax-deducting parent lives and rests on an irrebuttable presumption
often contrary to fact – it therefore lacks a critical ingredient of due process
 Food Stamp Act §5(c): No food stamps for household members if someone is claimed as a tax dependent by
someone else
 Court holds that this is invalid because it’s an irrebuttable presumption that Murray is not poor
 “Tax dependency in a prior year seems to have no relation to the “need” of the dependent in the following year.”
 SDP claim (i.e. rule is arbitrary)
 PDP claim (statute should be applied directly v. through an intermediary rule – this claim has failed)
 Constitutional right to an exception – but if there’s a right to an exception in every case, then the rule disappears.
 What about an extreme case? Absent a clear way to determine extremity, it’s best that courts let this doctrine die
 Irrebuttable presumption doctrine is abandoned in 1974
Irrebuttable Presumption doctrine (Constitutional right to an exception in extreme cases) became defunct
after the 1970s
LEGAL CONSTRAINTS ON LEGISLATIVE RULES
 Agency must be authorized to issue a Legislative Rules (Petroleum Refiners construes RM authority generously)
 One could challenge it as violating the underlying statute
 §706(2)(a) – but this usually won’t work
 One could challenge a rule as over or under inclusive, but there’s no requirement that scope between the rule and
the statute match up – no need for fit.
 LR is not subject to PDP  Campbell
Arguments that won’t work
 SDP – no SDP rights outside of privacy
 PDP doesn’t apply to the RM-ADJ choice
 Irrebuttable presumption is a dead doctrine
 If a general right to exemption was argued, the rule’s function would unravel – there are no generic exceptions
Bottom Line
o Agencies, legally, have a lot of discretion to use legislative rules to restructure adjudication as long as they
comply with §553 and §706(2)(a) and all the other doctrines above
CHOICE NOT TO HAVE A LEGISLATIVE RULE
SECURITIES & EXCHANGE COMMISSION v. CHENERY CORP. (SCOTUS, 1947)
FACTS: Public Utility Holding Company Act (PUHCA): Public utility holding companies must be reorganized to rid
layer structure. Reorganization plans were submitted to SEC for approval. Plans must be “fair and equitable” and “not
detrimental to the public interest” – this is an open-ended delegation. Under the plan, the management continues to
have majority control. SEC disapproves of this practice and the plan, and says that although there’s no proof of outright
fraud, there’s potential for fraud and conflict of interest. Chenery challenges this because there were no rules in place
and they lacked notice.
HOLDING: uphold agency decision; agency had discretion in deciding whether or not to issue a legislative rule.
31
Unless a statute clearly requires rulemaking, an agency can choose whether or not to issue a legislative rule,
and the courts will generally defer to the agency’s decision.
Application of a pre-existing, open-ended statutory standard in adjudication is not a retroactivity problem.
Legality of the agency’s failure to issue a legislative rule
 Although some lower courts have found DP violations in an agency’s failure to issue a legislative rule – this is
basically defunct and DP failures are rarely found in a failure to issue a legislative rule
 No PDP because there’s no PDP constraints on rulemaking – also, court defers to the agency’s choice to engage
in rule making or adjudication
 §706(2)(a) – generally, not having a legislative rule isn’t arbitrary and capricious (Bell Aerospace)
 “The choice made between proceeding by general rule or by individual ad hoc litigation is one that lies
primarily in the informed discretion of the agency.”
 Unless a statute is clear in requiring rulemaking, Pension Benefit and VT Yankee call for deference in the agency’s
reading of the statute
RULE V. PRECEDENT
 The utterances in the Chenery administrative decision may seem rule-like
 This is precedent, not rule
 If decisions like that functioned as legislative rules, then agencies would never go through the process of rule
making.
 A decision like this is given more weight that non-legal commentary, but it doesn’t have the force of a rule
 Parties can argue that the precedent is wrong and that the judge misconstrued the statute and that there should
have been a different result – this isn’t the same with rules
 The agency can’t decline to follow a rule the way they can decline to follow a precedent
BOWEN v. GEORGTOWN UNIVERSITY HOSPITAL
 Case says that an agency may not issue a retroactive legislative rule unless there’s clear statutory authorization
 Example of retrospective rule: tax laws – saying in 2002 that if you engaged in something then you must do x, y, z.
Retroactive criminal penalties are always unconstitutional, but there are some cases where retroactive would be
okay (i.e. tax)
 Prospective rules are presumptively authorized unless the statute withdraws the authority, but when it comes to
retroactive rules, it’s the opposite – there’s a presumption against retroactivity
Presumption against retroactive legislative rules unless explicitly authorized by statute.
MORTON v. RUIZ (SCOTUS, 1974)
FACTS: The statute says the benefits could be given to Indians living on or near reservations. BIA has no LR, but the
internal manual says they’ll reserve benefits only for NAs living on reservations. Ramon Ruiz was denied general
assistance benefits from the BIA because he resided outside the boundaries of the reservation. The agency denies him
benefits based on the internal manual, which is NOT a legislative rule.
HOLDING: Congress had not consciously restricted relief funds to Indians who resided on reservations so the agency
should promulgate some standard by which to adjudicate individual cases so it’s not ad hoc.
Absent LR, agency must directly apply statute. Agency still has discretion not to engage in LR.
BIA’s manual statement is an interpretive rule or policy statement, NOT a legislative rule.
Assistance eligibility requirements must be published for it to be a real legislative rule; if not, the determination is ad hoc
How can we reconcile this with Chenery?
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



Maybe here we have a rare §706(2)(a) violation
Maybe this is overruling Chenery and now we’re policing legislative rulemaking more broadly
Adler thinks that this isn’t an outlier, but that all the talk of rulemaking is dicta
Could argue that Ruiz’s real holding was wrong because Ruiz lived near the reservation and congress intended for
him to have aid
 Adler thinks that this is a condition case – i.e. if an agency wants to put in place and follow a standard that doesn’t
exactly track the statutory standard, it must do this through rulemaking.
 This is really a decision about the fact that the agency violated its statute.
Ways to read Morton
 One possibility: BIA is required to issue a LR, which results in tension with Chenery
 ADLER SAYS: the agency violated the statute “on or near;” the statute was misapplied
 Agency truncated the statute without a LR, the court rejects the agency’s authority to do this
 This would be consistent with Chenery
 Also consistent with VT Yankee because it’s about substantive not procedural issues
HYPO: If the agency had said during adjudication the x miles away wasn’t “near” enough, that would be okay because
the agency would be interpreting the statute.
Here, the agency treated the manual as a LR and didn’t allow the statute to come into play in adjudication, which was a
violation.
AMERICAN MINING CONGRESS v. MINE SAFETY & HEALTH
ADMINISTRATION (DC APPEALS, 1993)
FACTS: The agency is supposed to promote mine safety and issues an LR saying “diagnoses of occupational diseases
must be reported to the agency.” The agency issues Program Policy Letters (PPL) that clarify what “diagnosis” means.
PPLs do not afford notice and comment.
ISSUE: Whether the PPLs of the Mine Safety and Health administration stating the agency’s position that certain x-ray
readings qualify as “diagnoses” of lung disease within the meaning of the agency reporting regulations, are interpretive
rules under the APA.
HOLD: Yes, these are interpretive rules and there’s no requirement for the agency to engage in notice and comment
rulemaking for these.
Interpretive rules don’t require notice and comment
Legislative rule says certain illnesses must be reported to the agency when diagnosed. The interpretive rule clarifies that
by explaining what a “diagnosis” is.
INTERPRETIVE RULES
 Serve the same purpose as precedent  they have some weight bearing on agency adjudication, but they don’t
redefine or truncate issues like legislative rules do.
 In this case, the court defines an IR as a rule or statement issued by an agency to advise the public of an agency’s
construction of the statutes or rules which it administers
 Aren’t subject to the rules in §553
 Have less force than legislative rules
 Difference between interpretive rules and agency precedent is only the context in which they’re issued
LEGISLATIVE RULES V. INTERPRETIVE RULES
 When is a general statement by the agency an interpretive rule rather than a legislative rule? Courts have different
approaches
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 “Intent to bind” test  “does it look like the agency intends to have this function like a legislative rule?” If so,
it’s a legislative rule and must be issued in compliance with §553
o Can take a broad or narrow reading (narrow is taken by D.C. circuit) but the intent to bind is still
confusing.
 In American Mining the court uses a narrower 4-prong test (if the answer to any prong is affirmative, it’s a
legislative rule)
(1) Whether in the absence of the rule there would not be an adequate legislative basis for enforcement
action or other agency action to confer benefits or ensure the performance 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
 Adler’s Test: was it issued during notice and comment rulemaking? If the agency engaged in RM
process, then it’s a LR and it can restructure adjudication
o Adler’s test isn’t the law of the land – the tendency of the lower courts is to follow a narrow test or a
broader test for characterizing rules as being legislative even if the agency hasn’t written the rule
pursuant to §553
NOTE: The code of federal regulations is NOT the federal register; the code of federal regulations is the regulatory
analog of the U.S. Code
INTERPRETIVE RULES & POLICY STATEMENTS
 APA permits agencies to issue IRs (§553 includes them in the language)
 ADLER SAYS: APA permits IRs, which function like agency precedent – they’re persuasive but not binding.
Won’t distinguish between IRs and policy statement – both are general agency statements that aren’t LR
 Only difference between IRs/policy statements and precedent is the point at which they are issued
 IRs issues outside the adjudicatory time
 Precedent is announced during adjudication
SEPARATION OF POWERS
CONGRESSIONAL AND PRESIDENTIAL CONTROL OF AGENCIES
Agencies aren’t solely a part of the executive branch; there are statutorily created agencies, plus three constitutionally
created institutions that oversee the administrative state
Congress can control agencies by statutes
 Legislative supremacy is embodied in §706(2)(c)
Issue here: what are the legally permissible control mechanisms by which the three branches can exercise control over
agencies short of passing a statute?
 Constitutional and sub-constitutional restraints (i.e. APA)
THE LEGISLATIVE VETO
INS v. CHADHA (SCOTUS, 1983)
FACTS: Immigration and Nationality Act allows for the deportation of certain aliens and allows the AG to suspend the
deportation. The suspension can be overturned by a vote of the house or the senate alone. In this case, the legislative
judge suspends Chadha’s deportation, but then the house subcommittee issues a resolution vetoing the suspension of his
deportation
HOLDING: Legislative veto violates Art I, §7 – the bicameralism and presentment clauses.
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Legislative action (adjudication) by congress must be exercised in accordance with bicameralism and
presentment
No legislative veto.
Court Says: “Legislative Action by the Federal Government must comply with bicameralism and the
presentment clause”
 Bicameralism and Presentment are the basic structure for legislation – need the majority of both chambers and the
President’s signature for enactment. If it’s not signed by the president, you need 2/3 of each chamber.
 By “Federal Government” the court means Congress
 By “Legislative Action” the court means legal action (i.e. action which changes rights and duties)
ADLER’S REFINED HOLDING:
Legal action by congress must be exercised in accordance with bicameralism and presentment. The court strikes down
the legislative veto – Art I, §7 applies not only to RM, but to all legal action
Chadha is adjudication  it’s a formally particular legal statement made to Chadha and five others that defines their
rights. “Legislative Action” doesn’t mean rule making but rather legal action
Congress ends up being tightly restrained in the ways that it can control agencies short of passing statutes –
the president is not as tightly constrained.
What is the Court Saying?
 SCOTUS seems to be saying that legislative action by the federal government must comply with bicameralism and
presentment clauses
 What the court REALLY seems to be saying, is that if congress is going to issue a general directive, it
must be pursuant to bicameralism and presentment, but it’s different for agencies
 Legislative – general legal directive, supreme legal directive (i.e. statutes) – something that has legal effect
 Maybe the court is saying that congress may not adjudicate? If so, why don’t they just say that rather than striking
down a ton of legislative vetoes (Adler says this won’t work – see below)
Legislative vetoes are unconstitutional post-Chadha
 One-House, two-house, and committee vetoes
HYPO: Report and Wait Mechanism
 “Major” agency rules shall be reported to congress and are not effective for 60 days after issuance
 Congress may by statute repeal the rules
 This is constitutional under Chadha – there’s no legal action here by Congress without Bicameralism and
Presentment because it’s a statute
 This is okay if Congress turns the agencies into “mere proposers” whose rules are not effective until Congress
legislates.
 This is fine because nothing that Congress is doing represents legal action with Bicameralism and Presentment
 Congressional Review Act: Agency must report all rules to Congress and for special subcategory (i.e. major rule)
there’s also a delay in the effective date – Congress can overturn by statute
HYPO: Environmental RM Agency – “Agency shall ensure that the environment remains reasonably clean.”
Agency only has RM (not adjudication or enforcement) power. Congress wants one-house legislative veto.
 Unconstitutional under Chadha, although this might be a good way to inject democratic values
 It would allow Congress to pick and choose rules without going through the democratic requirements of B&P.
Just because an initial decision is democratic doesn’t mean that later actions taken pursuant to the decision will be
democratic. Congress establishing initial structure doesn’t mean legislative vetoes will be democratic.
Possible alternative bases for Chadha
 “This is an adjudication, which is unconstitutional by Congress.”
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 Not an accurate statement of legal doctrine. Private bills - statutes singling out particular people for
benefits - enacted all the time and not unconstitutional
 Congressional adjudication is contemplated in other situations (i.e. impeachment)
 Given its long standing practice of conferring benefits, a proposition that Congress couldn’t
adjudicate wouldn’t be true
 Adjudication by Congress doesn’t satisfy PDP  a possible argument, but unclear how court would rule
 Bill of Attainder prohibits Congress from imposing punishment on a particular person. Although this isn’t
criminal punishment, it’s sufficient hardship and is motivated by retributive judgment  possible argument.
Problems with the holding
 Legislative vetoes become less troubling as we move from committee veto (really troubling) to one house (middle)
to two house (less worrisome)
 Committee veto of adjudication is really upsetting, but what about a two-house veto of agency rulemaking?
Normative Concerns re: Legislative vetoes
 Vetoes of adjudication – notion that we need an impartial process
 We don’t want low-visibility decisions (i.e. committee chair veto without public awareness), but two-house veto is
open to public awareness
 Vetoes may be political
HYPO: Open ended statute: “Authorizes agency action and authorizes legislative veto by house or committee”
 No non-delegation problem (this is a dead doctrine)
 Could argue legal constraints as a matter of DP of under the APA to limit agency action
 706(2)(a), 554—557 or 553  all constrain the action
 BUT don’t apply to legislative veto b/c Congress is excepted from APA definition of agency. House
doesn’t need APA informal hearing and veto won’t be subject to A&C review  suspicion of broad
delegation of power to agency and Congressional legislative veto powers that aren’t constrained.
APPOINTMENT AND REMOVAL
BUCKLEY v. VALEO (SCOTUS, 1976)
FACTS: Federal Election Commission does information-gathering, rulemaking, adjudication, and enforcement (i.e. can
initiate civil action). They have six voting commissioners who are appointed as follows: 2 (Senate President pro
tempore), 2 (speaker of the house), 2 (president). Both house and senate must confirm all six nominees.
HOLDING: In this case, the appointments clause was violated for all six commissioners, regardless of whether they are
inferior or principle officers of the US.
Officers of the US – one who exercises adjudicative, rulemaking, or enforcement authority – must be
appointed pursuant to the appointments clause
FEDERAL OFFICIALS
 Members of Congress
 President
 Article III Judges
OFFICERS OF THE US
 Principle
 Inferior
ADDITIONAL CATEORIES
 Employees of the US (recognized in footnote in Buckley) – lesser functionaries subject to the officers of the US
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The Head of an agency is the principal officer, lower positions with significant authority are inferior officers, and
everyone else in the agency is an employee
Framework: We have an organic statute, which provides for the structure of agency heads, and we have to decide
whether or not it’s constitutional
APPOINTMENTS CLAUSE (ART. II, §2)
 Only applies to officers of the US – President must appoint principal officers of the US with Senate advice and
consent. However inferior officers (i.e. non-principle) may (permissive) be appointed in three different ways: (1) by
President alone, (2) by heads of departments (i.e. cabinet secretaries), and (2) by courts of law.
 What exactly is the distinction between principal officers and inferior? Buckley doesn’t address this because the
mechanism used in the FEC act doesn’t comply with any of the requirements
For purposes of the appointments clause, an officer is someone who exercises significant authority
 “Any appointee exercising significant authority pursuant to the laws of the US is an “Officer of the US” and
therefore must be appointed in the manner prescribed by §2, clause 2 of the article.”
o Court says that rulemaking, adjudication, and enforcement all count as significant functions 
this is disjunctive
 Thus, if they are exercised by the agency, it’s unconstitutional because the commissioners weren’t appointed
pursuant to the appointments clause
 Implies that we don’t want someone isn’t an officer of the US to have these functions
HYPO: If we couple information gathering with subpoena power
 This is probably fine – a pure information gathering agency, even with subpoena power, is different because the
subpoena power is purely ancillary to what they’re doing
 But once it goes beyond this and any of the other functions come into play, then the appointments clause is
implicated.
 The court means the various modalities by which governmental officials change the legal rights of
individuals.
 The exception is subpoena power – we could have a congressional agency with jut subpoena power,
but beyond that the appointments clause comes into play
Officers of the US v. Officer of Congress
 Officer of the US – any person exercising significant authority pursuant to the laws of the US (including not
only enforcement, but also any of the classic ways in which government can change legal positions of a private
person, i.e. rulemaking and adjudication), Art II, §2 appointment applies.
 Officer of Congress – someone who congress appoints to do something
Both Buckley and Chadha view Congress’s job as legislating, NOT controlling governance (i.e. legislative
vetoes, appointments)
RECAP:
Appointments Clause does NOT provide Congressional role in appointing officers, principal or inferior.
“Officers of the US” doesn’t include employees of US = lesser functionaries subordinate to US Officers
Nothing in Buckley denies Congress “all power to appoint its own inferior officers to carry out appropriate
legislative functions.” Court has explicitly recognized a category of Officers of Congress.
Categories of Federal Actors:
 President
 Members of Congress
 Federal Judges
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


Officers of the US – Appointments Clause only covers these folks
(= persons exercising significant authority pursuant to laws of US)
Includes functions of RM, adjudication, and enforcement
 Principal Officer of US
 Inferior Officer of US
Employees of US = lesser functionaries subordinate to Officers of US
Officers (employees) of Congress (Congressional control in selection)
BOWSHER v. SYNAR (SCOTUS, 1986)
FACTS: President signed into law the Balanced Budget and Emergency Deficit Control Act of 1985, meant to eliminate
the federal budget deficit. Automatic reduction provisions: Comptroller general recommends spending cuts to the
president. Then the president must issue a “sequestration” order mandating the spending reductions specified by the
Comptroller General unless Congress reduces spending by legislation.
Comptroller general is appointment by the president with Senate consent. He issues mandatory budget reduction order.
If the deficit is above a certain target, OMB reports to Comptroller General who exercises a budget-cutting function.
There is no problem with appointment. He is removable by impeachment or a joint resolution of Congress “for cause”
(i.e. disability, neglect of duty, ineffectiveness, malfeasance, moral turpitude)
HOLDING: Given the functions of the agency, its head can’t be removed by Congress. Congress may only remove
officials like the CG by impeachment because they are officers of the US as defined by Buckley.
Congress may not remove officer of the U.S. except through impeachment
Adler’s reading
 Congress may have no role in the removal of any officers of the US as defined by the significant authority test of
Buckley except by impeachment
The fact that that Comptroller executes the law, but is removable by congress violates the principle of
separation of powers
 Separation of powers – the first section of each article “vests” the corresponding power in each branch. These
“vesting clauses” create the idea of separation of powers.
 Article II, §4 talks about the removal of officers – “The President, Vice President and all civil officers of the
United States, shall be removed from office on impeachment for, and conviction of, treason, bribery, or other
high crimes and misdemeanors.”
 For congress, given the principle of separation of powers, the court reads this as both a floor and a ceiling
Why does the court rely on “separation of powers” rather than Article II removal power?
 Executive officers may be removed by methods other than impeachment
 This clause, unlike the appointments clause, is not exhaustive
The mechanism struck down in this case involves a joint resolution of congress (i.e. a statute) – this shows
how serious the court is in regulating congress’s role in removal – even a full-fledged joint resolution is
unconstitutional
Buckley and Bowsher create symmetry between appointment and removal of officers of the US – congress is
limited on both ends.
 After this case, Congress has no non-impeachment role in removing officers of the US (i.e. any official with
executive, legislative, or judicial functions.)
 Bowsher no congressional removal of officers, and Buckley says no congressional appointment
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Officer in Prosecutorial agency:
Congress can’t have role in appointment (aside from
confirmation).
Officer in Rulemaking agency:
Congress can’t have role in appointment (aside from
confirmation).
At a minimum, Bowsher says that Congress can’t have
a role in removal either.
Weird to prohibit Congress’s role in
Appointment but not in removal. Intuition
is for symmetry.
This decision is consistent with Chadha, which prohibits legislative vetoes whenever they amount to legal
action by Congress
 This is consistent because allowing Congress a removal power would mean that it controls the officer and can
coerce him, which is akin to a legislative veto
Appointment Power v. Removal Power
 Is one functionally more powerful than the other?
 With appointments, you can choose something at the beginning, but removal power is a constant threat
Chadha, Buckley, and Bowsher all limit congressional non-legislative authority. Bowsher creates
appointment-removal symmetry.
 On the removal side, the constitutional text is fuzzier
 There’s no removal clause (although the Constitution does talk about the removal of officers through
impeachment – but this isn’t as comprehensive as the appointments clause) – impeachment isn’t the sole modality
by which you can remove an officer of the US
 It’s best to read Bowsher and Buckley as a pair – although the court doesn’t specify what subset of officials cant be
removed except through impeachment, it makes sense to say that any “officer of the US” in the Buckley sense also
applies to Bowsher
HUMPHREY’S EXECUTOR v. U.S. (SCOTUS, 1935)
***This Test is No Longer Used***
FACTS: Roosevelt requested the Humphrey resign from the FTC because of ideological differences. Humphrey refused
and Roosevelt removed him. Organic statute said the President could remove FTC commissioners “for cause.”
Challenges come from Art. II, §1 and §3 (executive power with president and take care clause)
HOLDING: This restriction on the presidential removal power is fine.
Only purely executive agencies mandate “at will” removal. It’s fine under that constitution if there are
restrictions on the presidential removal of heads of independent agencies.
Independent v. Executive Agencies
 Very little difference
 Appointment procedure for agency heads is the same – appointment clause is in play
 Vast majority of people who work in the agency are civil servants
o Appointed by merit, removable for cause
 Both subjected to statutes which may or may not be open ended
 Only constitutionally interesting difference has to do with removal of agency heads
 Executive  removable at will by president (including for policy differences)
 EPA, FDA, NHTSA
 Independent  President’s removal power to constrained by the “for cause “provisions” (this
provides some insulation), sometimes they can’t remove at all (like the independent council)
 FTC, NLRB, SEC, FCC, ICC, FEC
FTC is an independent agency
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 Gathers information
 Enforces unfair method of competition statute through cease and desist orders
 Adjudicates violations of fair competition on a case-by-case basis
Issue in this case: are the restrictions on the president’s removal power valid under the Constitution?
Two-Step Inquiry:
(1) Statutory Questions: Does the organic statute explicitly or implicitly restrict the president’s removal power?
 FTC Act says that the commissioner can be removed by the president for various stated causes, but it’s not clear
whether this is necessary or sufficient. Court says here it’s necessary, i.e. absent one of the causes, the president
can’t remove
(2) Constitutional Question: is this restriction constitutional?
 Challengers say that this violates separation of powers (Art I, §1) because the president is not able to remove at
will
 Also violates the “take care” clause (Art II §3 – president must take care that the laws by faithfully executed)
An agency is purely an executive agency if it only has enforcement powers – only in this case would the vesting
clause and take care clause come in to mandate at will removal.
MORRISON v. OLSON (SCOTUS, 1988)
***Current Doctrine***
FACTS: Independent Counsel is appointed by a Special Court (Art III Judges) upon the Attorney General’s application.
IC is removable by AG for cause. Function is prosecution  purely executive. This is constitutional because IC is an
“inferior officer.” President does not have removal power.
HOLDING: This is fine.
Independent agencies are constitutional where the removal restriction doesn’t impede the President’s ability to
fulfill his constitutional duty
Same Two-Step inquiry from above
(1) Statutory Questions: Does the organic statute explicitly or implicitly restrict the president’s removal power?
 If no, then congress has created an executive agency and there’s not constitutional objection
 If so (i.e. only for cause, or only by the AG), then this is, by statute, an independent agency, and we must ask…
(2) Constitutional Question: is this constitutional?
 Separation of Powers? Take Care Clause?
New test
 Does the limitation on presidential removal impede the president’s ability to fulfill his constitutional duty?
 A more function/balancing test than HE
 Although this test is different, the result of H.E. would have been the same
 What does this mean? What are the circumstances under which a restriction of the president’s removal power will
be unconstitutional?
 We don’t know – the court in Morrison doesn’t tell us
Inferior officer test
 She’s subject to removal by a higher executive branch official other than the President (a subordinate)
o Some degree of significant supervision or control by a principal officer
o Edmond case says this is dominant factor
 She can only perform limited duties
 Her office has limited Jurisdiction
 She has a limited Tenure
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(note inferior can be appointed other than by the president)
Reasons for New Test
 Independent Council is removable by the AG “for cause” or when the special division terminates the
investigation. President has NO removal power, ergo, this is an independent agency.
 BUT, Court says it’s hard to think of a purely executive agency, but this looks like it’s executive because it does
enforcement and prosecution – Thus under H.E. this lack of presidential removal power would be
unconstitutional
 Ergo, Court makes up new test
Adler’s interpretation of this test
 Test asks in an open-ended way: What are the pro’s and cons of full-blown presidential oversight?
 Pros:
 Democratic legitimacy of presidential connection
 President can correct various kind of agency pathologies (i.e. interest group capture, lack of efficiency)
 Cons:
 Agency has more expertise than the Whitehouse
 Concern about presidential conflict of interest (this is what’s going on in Morrison)
 P’s involvement may decrease quality of agency decision-making
ADLER SAYS: where we have an agency that’s involved in rulemaking or enforcement, independence is
constitutionally questionable absent some conflict of interest type story. Where the agency is involved in adjudication
then independence should be a little more constitutionally secure – because of conflict of interest, you want more
political insulation. But even in these cases, where the agency doesn’t have adjudicatory function, there may be reasons
for limiting the president’s removal power.
Court’s Deference to Congress’s Structural Choice
 Court has upheld independent in H.E., Morrison, and Mistretta – balancing test is used deferentially
 Pattern seems to be that the Court is going to be reluctant to find an independent agency unconstitutional because
it will defer to Congress’s structural choice
 One reason may be that because of Bicameralism and Presentment, the President must have agreed in the first
instance with setting up the agency
Was the Court right to change the test?
 H.E. is a better interpretation of the Constitutional provisions, which speak to “executive” power and thus maps
more closely to the functional (purely executive) test
 H.E. is a bright-line test, which Morrison is more open ended (suggests that you could have an enforcement agency
that is not executive yet won’t be independent). BUT – Bright-line tests can be both over and under inclusive
 Morrison is open ended, so it can lead to a correct result every time, but it’s more difficult to apply
Presidential v. Congressional Roles
 Over all picture
o Very restrictive of Congress’s role
 Buckley: no Congressional role in appointment of Officers of the US (other than senate
consent)
 Bowsher: No Congressional role in removal of Officers of the US (consistent with Chadha)
o President has a major role
 Appointment (as least permissible and maybe mandatory)
 AND in removal.
 Why accept Presidential but not congressional involvement?
 Congress’s constitutional role is legislative activity – the Court is channeling congress’s legislative role
by limiting its other functions
 Majoritarian Democracy, in which president is a salient actor v. Interest Group Politics
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EXECUTIVE ORDERS AND REGULATORY REVIEW
OVERVIEW
 An executive order is a formal presidential directive that’s published in the federal register.
 We’re concerned with the effect of these formal published presidential orders on agency decision-making. (We’re
focusing on rulemaking examples)
 Statutes can be addressed to the president, or to someone else
 If they’re addressed to the president, then the president can issue rules himself, or can delegate the task of issuing
rules
o 3 U.S.C. §301 expressly permits the President to delegate to executive officials who are subject to
Senate confirmation any function that Congress has vested in the President by statute
 Ex. “President shall issue rules that meet need for motor vehicle safety.” If P delegates
power und MVSA to head of NHTS, it’s ok under statute.
 Scope of P’s EO power is not at issue
 More typically, a statute will be addressed to an official other than the president (see State Farm)
o Ex. MVSA  Secretary of Transportation shall issue rules that meet the need for motor vehicle safety
Two Questions:
(1) Does the president have executive order power?
(2) What is the effect of this power on 706(2)(c) and 706(2)(a)?
DOES THE PRESIDENT HAVE THE EXECUTIVE ORDER POWER??
ADLER’S VIEW
EO power with Executive but not Independent Agencies
Executive order power should be generally seen as coupled with removability at will. If is removability at will is
constitutionally mandated, so is executive order power. It’s up to congress to choose whether add removability at will,
so it’s up to congress to choose whether or add EO power, but Adler assumes it goes together
Congress can set up any one of the following possibilities
(1) Independent Agency where
(a) Agency head is removable only for cause
(b) President does not have exec. order power
(2) Executive Agency where
(a) Agency head is removable at will
(b) President have executive order power
(3) Independent Agency where
(a) Agency head is removable for cause
(b) President has exec. order power
(4) Executive Agency where
(a) Head is removable at will
(b) President lacks exec. order power
NOTE: Where the president has “at will” removal power, the head of the agency will do the president’s bidding
When does the President have executive order power?
 Traditional “Scholarly” view (less “presidentialist” view)
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 Where a statute is addressed to an agency, the president lacks executive order power in general
 President lacks the power to direct agency action with respect to both executive and independent
agencies
 Unitary President View (Pro-presidentialist)
 President has EO power over executive and independent agencies
 Adler/Kagan’s View
 President has EO power over only Exec, but not independent agencies
 Given Morrison deference, Congress has much discretion in creating an independent or executive
agency  Adler thinks decision of subjecting agency to EO power largely a congressional choice
 If congress wants to mix and match it can, i.e., okay to have removable at will but no EO power
 Question of EO power is just a question of statutory construction
Usually, a statute won’t speak about EO power, so ADLER thinks that it goes along with the removal power.
(i.e. if the head is removable for cause, Adler presumes that the president lacks EO power absent a specific statement to
the contrary. But technically, congress can set up any of the 4 choices.)
BOTTOM LINE:
Executive order power should be generally seen as coupled with removability at will. If is removability at will is
constitutionally mandated, so is executive order power. It’s up to congress to choose whether add removability at will,
so it’s up to congress to choose whether or add EO power, but Adler assumes it goes together
Presumably, even with independent agencies, there’s still a certain class of orders that the president can issue.
YOUNGSTOWN SHEET & TUBE CO. v. SAWYER (SCOTUS, 1952)
 President Truman issues EO to Secretary of Commerce (exec. agency) to seize steel mills.
 Court invalidates the EO
 Secretary’s power to seize the mills under the order must have its source in a grant of power to the president
either from the constitution or from a constitutionally enacted statute
 As court interprets the statutes in Youngstown, no gov’t official had been authorized the power to seize the steel
mills. Where Secretary lacked power, couldn’t be granted through EO.
 Youngstown is the extraordinary case where there was no statutory authorization whatsoever. Thus it’s not really
relevant to our discussion of the first issue where statutory power is vested in President or officials.
In Youngstown, there is not explicit statutory authorization for the agency official to take the challenged action
However, in State Farm, the statute clearly authorizes someone to do something – NHTSA can enact or repeal passive
restraint rules, so the auto industry can’t say they’re free from regulation, the issue is just who gets to make the decision.
In State Farm, the statute was not issued to the president, but the question is can the president control the regulations?
WHAT IS THE EFFECT OF THIS POWER?
What’s the effect of a duly issued presidential order on judicial review?
Depends on what kind of legal challenges are being raised, Options:
RULEMAKING
706(2)(c) Substantive Violation Challenge
(Agency action violates underlying statute)
EO Should not override ministerial (i.e. clear) 706(2)(c) violations in rulemaking
 Ex: President’s EO says to repeal the air bag rule and SF claims that repealing air bag rule violates MVSA.
 Marbury/Kendall talk about ministerial duties
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 Marbury says that when something is ministerial, the presence of an executive order shouldn’t change the judicial
review
 Ministerial means clear, determinate – an incontestable duty.
 Kendell and Marbury say: In cases of a clear violation of the underlying statute and thus a successful 706(2)(c)
challenge, Court should correct the violation regardless of the EO
What About Unclear Violations?
 Given Chevron’s deference, we don’t need to answer this question
 In general, courts enforce 706(2)(c) deferentially (Chevron), although some say that courts shouldn’t be so
deferential
 ADLER SAYS: when there’s an unclear violation, Court is bound by law, regardless of whether the violation’s
clear or not. Presidential intervention shouldn’t change the judicial result.
 Chevron alludes to an answer: in general, if underlying statute is unclear, the court shouldn’t step in but rather
defer to agency when dealing with a § 706(2)(c) claim.
706(2)(A): ARBITRARY AND CAPRICIOUS CHALLENGE
ADLER SAYS: A duly issued executive order overrides a 706(2)(a) challenge. (The difference between this and
706(2)(c) is that this is procedural and that is substantive.)
 If the president really has EO power, then the agency is bound to obey  ergo, true EO power should override
706(2)(a)
 Adler thinks we should follow this absent a clear congressional speech to the contrary
 APA doesn’t apply to President; it only governs agencies (Franklin v. Mass.)
 You can’t argue the EO is A&C, only that the agency action is A&C
 State Farm’s dissent would have been correct if an EO was issued, but it wasn’t
ADJUDICATION
 HYPO: NHTSA chooses to use adjudication (Chenery – permissive choice) to recall cars
 Two methods of influence:
o 1. General/Cross-Cutting EO: NHTSA should prioritize safety. (Like 12866)
  Analysis here is the same for rulemaking.
o 2. Case-Specific EO: Prez instructs NHTSA to take a particular action against a particular firm.
  Different: Could implicate PDP concerns
 Could also violate some provisions of the APA if formal rulemaking.
EXECUTIVE ORDER 12866 – COST BENEFIT ORDER
 May change any day now
 Amended by 13422, which was put in place by Clinton and kept in place without major modifications by Bush;
originated in 12291, which was put in place by Regan
 It’s a structural, overarching order with various parts, some focus on agency use of CBA
 CBA applies to executive agencies, not independent agencies, applies to legislative rules used in internal
rulemakings, doesn’t apply to orders, and there’s an exemption for formal rulemaking
 Two separation requirements
o Substantive  in issuing rules, the agency must comply with the CBA standard where permitted by
law (statute)
 it would be more controversial if the order required agencies to do things regardless of their
organic statute – but this isn’t the case. 1(b)(6) puts together the CD standard
o Procedural  for sufficiently major rules (more than $100 million per year), the agency has to prepare
a fairly extencive CBA document, which is then sent to OMB for review.
 Resolution of conflicts provision: if the OMB and the agency can’t work it out – conflicts can be resolved by the
president and the chief of staff
 Final point: this is not judicially enforceable – if the agency does engage in CBA and prepares the document, this
may be something that the court can consult in doing judicial review, but if the agency fails to comply with the
order, they don’t get judicial relief, rather the pres and the OMB has to enforce the order, not the courts
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 Cost benefit has a loose and a strict sense – CBA in the loose sense in simply considering the pros and cons, in
the strict sense, CBA is the sum of the willingness to pay
 If you look closely at 12866 it says that agencies should try to do this in the strict sense, but doesn’t mandate it –
the extent to which the pres. and OMB are satisfied is up to OMB.
 Other thing, like we talked about in CB re: Matthews – Adler views cost benefit as a rough proxy for overall wellbeing, it is NOT a particular good mechanism for capturing equity and distributional things
 Diff between 12866 and 12291 - encourages agencies to attend to equity.
 In theory CBA in the strict sense is thinking about different sections of the population who will be affected by the
rule (some positive some negative) and you want to reduce the effects to money values.) What’s the money
equivalent to the effect of the individual? We do this by asking what the individual is willing to pay for the rule, or
what the individual is willing to accept in compensation if they’re harmed by the rule.
 The new section 4(c) makes the regulatory policy officer a gate keeper for rulemaking (note: regulatory policy
officer must be a presidential appointee)
 4(c) applied to both independent and executive agencies – this is a strong assertion of presidential power
 If one doesn’t think that the president in general has the power to issue executive orders to independent agencies
without some other authorization, then this is not okay
INFORMAL CONTROL
Formal Control Mechanism: Appointment, Removal, Legislative Veto, Executive Orders
Informal Control Mechanisms: Ex Parte Contacts
SIERRA CLUB v. COSTLE (DC Circuit 1981)
FACTS: EPA engages in IR under the CAA. They revised regulations dealing with the permissible level of emission
from coal burning plans. Enviro groups challenge the rule as being too lenient. The industry feels it’s too strict and both
sides engage in furious ex parte lobbying. The rule enacted is less stringent than the one seemingly being implemented.
Challenge is based allegation on the Ex Parte Contacts by the Whitehouse and Congress influenced RM results. At one
point, the EPA was thinking about a stricter limit, but backed down
No constraint on ex parte contacts by the president or congress during informal rulemaking
The Clean Air Act has additional requirements for disclosure of evidence: that documents of central relevance to
rule making must be publicized, and placed in the public docket. All evidence (regardless of whether it’s relied upon)
must be placed in the public record.
 This is more stringent that APA §553 which requires
 (1) If agency’s relying of evidence in promulgating the rule, the agency must publish their evidence ex ante (N.S.)
 (2) If the agency doesn’t want to rely on evidence, then there’s no requirement for publication
CAA does not prohibit ex parte contacts
Rulemaking
Adjudication
Formal
Not allowed under APA § 557(d)
Not allowed under APA § 557(d)
There may be PDP constraints to
presidential ex parte contacts.
Informal
Not prohibited
Possible PDP challenge.
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Because Informal Rule making doesn’t prohibit ex parte contacts by individual citizens, it would be weird to
prohibit ex parte contacts by the president – why constrain the president more than a private citizen? Court
says that Congress, like President, can have ex parte contacts
Formal Rulemaking, §557(d)(2): Congress may ask an agency ex parte about the case, and Congress may give info
without violating §557, but Congress can’t dictate
DC FEDERATION OF CIVIL ASSOCIATIONS v. VOLPE (1970’s)
Dead Letter
 Sen. Natcher wanted a bridge built, and told Secr of Transportation he’d withhold mass transit funds unless
bridge was built.
 Rule – 2-prong test of when IR can be overturned on grounds of Congressional pressure:
o (1) Pressure on agency to decide based on extraneous, statutorily irrelevant considerations
o (2) Pressure affected the agency decision
 Strictly applying test would radically change the way D.C. works. Congress always pressuring agencies.
 In theory, there’s a D.C. Federation test, but in practice it’s a dead letter
 So there’s no practical constraint on Congressional ex parte contacts in informal rulemaking
We still have 706(2)(a) and 2(c) review if improper pressure leads to an inappropriate result.
SECTION VI: JUDICIAL REVIEW
SCOPE OF REVIEW
APA PROVISIONS
§701 – Explains what’s reviewable
 Two types of unreviewability under the APA
 701(a)(1) – Statutes preclude judicial review (Johnson v. Robinson)
o This provision says that there is a §702 cause of action, but it’s barred by another statute
o In deciding whether another statute bars judicial review, we have to bring in all the relevant sources of
statutory interpretation (test, structure, legislative history, etc.)
 701(a)(2) – agency action committed to agency discretion by law (Doe & Chaney)  no other law
 701(a)(2) and (1) are disjunctive – you’re barred if the court finds either one applicable
§702 – Broad cause of action
 Creates a broad cause of action for challenges to agency actions (as defined in §501(13)
 Contains a specific waiver of sovereign immunity for cases seeking non-monetary damages (money damages can
still be a problem)
 Assuming you can meet the other threshold exceptions, you can move to §706
§706 – Kinds of challenges
 Goes through the kind of challenges that you can make, if you succeed on the merits
 706(2)(a)  arbitrary and capricious
 706(2)(b)  constitutional challenges (i.e. PDD, EP, First amendment)
 706(2)(c)  substantive statutory challenge to agency action
 706(2)(d)  procedural challenges to agency action both from organic statute and APA
o Challenges in the 550’s would come into court under this heading
 706(2)(e)  not supported by substantial evidence
 706(2)(f) – we should ignore this
JURISDICTION
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 Unless the organic statute says something about jurisdiction, default jurisdiction is 28 U.S.C. §1331 (The district
courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the
United States.)
 Sometimes there are special jurisdictional provisions where people go right to appeals court
CHEVRON, USA v. NATURAL RESOURCES DEFENSE COUNCIL (???, 1984)
FACTS: In 1980, the EPA issued a smoke stack rule, but then shifted and issued a bubble rule – this is an executive
agency engaging in deregulation. The issue here is whether the bubble rule is a valid interpretation of the Clean Air Act.
Bring a §706(2)(c) challenge
HOLDING: The agency choice is fine.
Two-step test  Is the statute clear? Is the agency’s decision reasonable?
Clear Error standard for striking down statutory challenges to agency decision under agency’s organic statute
NOTE: This holding is only applicable to a statute that an agency has a specific duty to administer – it’s NOT for
crosscutting statutes like the APA
This is a §706(2)(c) challenge – the rule is inconsistent with the statutory language and thus impermissible
Court give deference to the agency’s interpretation of the substantive issues
 Review of statutory claims employs a “clear error” standard
 This applies to both independent and executive agencies because it’s based on agency expertise, not executive
deference
Two-step test:
1) Is the statute clear? (§706(2)(c))
 If yes  Either a clear violation or requirement and inquiry ends
 If no  step 2
2) Is the agency decision unreasonable? (§706(2)(a))
 Is this a reasonable/permissible interpretation of statue?
What is step 2 really adding?
 If a decision is unreasonable in step 2, won’t it also be a violation under step 1?
 Is there any independent meaning?
 A decision could be arbitrary and capricious but be fine under Step 1
 Possible interpretation: only look at the text for step 1, but at step 2 look at legislative history, structure, etc.
 BUT SEE Cardoza-Fonseca
ADLER: Step 2 is an “unreasonable” claim of procedural arbitrary and capriciousness, while step 1 addresses
true §706(2)(c) challenges, so…
1) Is the action a clear violation of the underlying statute (706)(2)(c)?
 This is the statutory inquiry – use the clear error standards
2) If not, is the action arbitrary and capricious under §706(2)(a)?
 Looks for a flawed reasoning process – an agency decision may be consistent with the statute, but still have flawed
reasoning
Reason for Adler’s interpretation: Even if the statute is indeterminate, the court can still say that the reasoning that led to
the decision was arbitrary and capricious
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Adler says: anyone who’s uncomfortable with the demise of the non-delegation doctrine, should be
uncomfortable with Chevron. The Court is saying that 706(2)(c) isn’t going to deal with cases when the
indeterminacy of the statute is high.
For 706(2)(c) purposes, the presence of executive orders doesn’t matter – it doesn’t override clear 706(2)(c)
violations, and given Chevron’s level of deference, the court shouldn’t step in for unclear violations
While VT Yankee and Pension Benefit require deference to agency where there is a procedural challenge,
Chevron says there should be a similar deferential stance when dealing with substantive challenges





INS v. CARDOZA-FONSECA (1987)
Facts: Two different statutory standards interpreted by INS – worded differently, but interpreted by agency as the
same:
o 243(h): Deportation must be withheld if alien’s “life or freedom” would be threatened
o 208(a): Asylum may be granted b/c of “persecution or well-founded fear of persecution”
  BOTH interpreted as “clear probability of persecution”
Issue: Can agency interpret different statutory language in the same way?
Holding: Fails at Step 1 – Congress had spoken clearly by phrasing the standards in different language. This makes
clear that the two standards are not the same.
o Court suggests that a Step One Inquiry includes all relevant sources of statutory interpretation
(although Justices differ over what sources are relevant)
 Text (if this is the only criteria, agency wins)
 Structure
 Legislative history
 Dictionary
 Purpose
FDA v. BROWN AND WILLIAMSON TOBACCO CORP. (SCOTUS, 2000)
Facts: Whether cigarette falls into FDCA definition of “drug” and “device”.
Holding: Failed at Step One: Congress had spoken directly to the issue, and ruled out cigarettes as being covered
by the act.
o First, since cigarettes could never be “safe”, they could never be “safe and effective” to be marketed 
Didn’t fit under act
o Second, Series of statutes directed at cigarettes that Congress intended to keep them on the market.
  Read together, precluded FDA’s reading.
US v. MEAD CORP (SCOTUS 2001)
FACTS: Customs services issued a ruling letter that the Mead Daily Planner is now subject to “diary” tariffs. (Issuing a
ruling letter is like informal adjudication). Issue is whether this tariff classification gets Chevron-type deference
HOLDING: no Chevron deference because it doesn’t carry the “force of law.”
Substantive Challenges to Informal Adjudication do not get Chevron deference
This case is really just cutting back of substantive deference to informal orders.
The court says that this doesn’t get deference because it doesn’t have “force of law,” but ADLER says is
DOES have force of law. (“force of law” deals with whether of not something is legally binding, i.e. whether it changes
someone’s legal position)
 Formal and Informal Rulemaking and Adjudication ALL have the force of law
 Interpretive rules and policy statement don’t have the force of law
The Court is collapsing the idea of “force of law” which the procedures that led up to the decision. This is a
case of informal adjudication.
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MEAD is about substantive rather than procedural challenges
 What if the customs service put in place a procedural rule? These don’t have to be adopted pursuant to notice
and comment rulemaking.
 BUT - Until Pension Benefit and VT Yankee are overruled, we should treat that as still being enforced
BUT Skidmore deference may apply (if agency decision is persuasive – thoroughness of consideration? consistent with
others? Expertise?). “It is deference proportional to the power to persuade”
HYPO: FTC issues a rule: “We believe that the failure to post octane ratings is unfair” (FTC can set unfair methods of
competition)
 Mead says that b/c the above rule is interpretive (i.e. no notice and comment) there is no Chevron deference
 Assume the FTC is enforcing this rule through formal adjudication (cease and desist orders come from formal
adjudication)
 Without an interpretive rule in place, the issue in challenging a cease and desist order under the statute is whether
the statute is properly applied in that case. If this is the issue in formal adjudication, the agency will get Chevron
deference with regard to this.
 Interpretive rules don’t get Chevron deference, but it’s not clear that this really matters, because the rules don’t
restructure the adjudication very much, and the agency gets deference with regard to that particular order
When does Chevron Apply?
Yes, order
Yes
Relatively Formal
Proceeding?
Yes (§554, 557)
Yes (§556, 557)
Informal Adjudication
Yes
NO
Informal Rulemaking
Yes
Force of Law
Formal Adjudication
Formal Rulemaking
Interpretive Statements
PROCEDURAL challenges
706(2)(D)
Chevron Applies?
Yes
Yes
Prob Not – Skidmore
(intermediate level of
deference)
Yes – see Nova Scotia,
Yes
Heckler – n & c, etc. (§553)
Maybe
Maybe
Maybe
Under Vermont Yankee and Pension Benefit, agency will have deference on
procedural challenges: BUT: agency doesn’t even have to have an elaborate procedure
to issue this procedural rule b/c §553 only applies to substantive procedural rules. Thus,
maybe only deference to non-substantive procedural rules.
CITIZENS TO PRESERVE OVERTON PARK v. VOLPE (SCOTUS, 1971)
FACTS: Secretary of Transportation authorized the expenditure of federal funds for the construction of a six-lane
interstate highway through Overton park. Petitioners say this violates §4(f) of the DOT Act of 1966, as amended, and
§18(a) of the federal-aid hwy act of 1968. The statute says that you can’t build a HWY through a park when there’s a
reasonably prudent alternative. Volpe authorized funds for a HWY through Overton Park in Memphis. This is informal
adjudication, which is why the secretary gets away with having almost no procedure.
Judicial Review must be based on the record before the agency at the time of decision
 IA  No hearing and no statement of readings
 Court reviews initial order authorizing the funds
 Parties are trying to introduce affidavits, but Court holds that judicial review must be based on record before
agency at time of its decision
Official Agency (Contemporaneous) Record Requirement
Record before agency
Formal Rulemaking (556, 557)
§556(e); official record, exclusive basis
for decision
Formal Adjudication
§556(e); official record, exclusive basis
for decision
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Agency’s actual reason
§557(c); required to publish opinion
§557(c)
Informal Rulemaking
Nova Scotia’s interpretation of §553(c)
§553(c); statement of basis and
purpose
 agency must put evidence in
record for comment
Informal adjudication
No requirement
No requirement to give reasons
This is weird because the courts would review where there would be fewer procedural requirements
Informal adjudication (alt.)
Actual material before administrator
Overton says take depositions; Pension
Benefit says to remand to agency for a
(post-hoc) statement
How to determine “actual reasons” for purposes of § 706(2)(A) review?
 Overton Park – court may look to subjective mental states of agency decision maker – i.e. take depositions.
 Pension Benefit - where no public statement of reasons, remand for statement by the agency. (Note: where
there is a public statement of reasons, the court will look at that.)
 Court has retreated to Pension Benefit rule given these considerations:
 The logic of inquiry pushes you toward Overton Park, but the rule is hugely burdensome to agencies.
 Also, if Overton Park is the rule, then why not also do it in formal rulemaking/adjudication and informal
rulemaking even when there is a public statement of reasons? There would be a real undermining of the public
statements.
NLRB v. HEARST PUBLICATIONS (SCOTUS, 1944)
FACTS: NLRA says: “Firms must engage in collective bargaining with employees.” NLRB determines in a formal
adjudication that the newsboys are employees and orders Hearst to bargain with them.
APA §706(2)(e) overrules deferential standard in Hearst and allows courts to strike down agency decisions for
lack of substantial evidence, but this is duplicative of §706(2)(a) and (c)
 Hearst challenges order, saying that the agency decision was not supported by substantial evidence. (Current
706(2)(e) Challenge)
 However, the court gives much deference to the agency
 706(2)(e) only applies in judicial review of formal adjudication and rulemaking (the types of decisions where 556
and 557 are in play)
 §706(2)(e) review is quite deferential.
o Adler and Scalia  duplicative of 706(2)(a) and (c) and thus that it is superfluous.
o The only way to see 2(e) as doing any type of work is to suggest that it’s a more intensive kind of
review
Hearst could have challenged this using
 §706(2)(a) – based on the evidence, the finding and reasoning process was arbitrary (de novo)
 §706(2)(c) – NLRA doesn’t authorize this order (this is de novo review – what does the court think the statute
means?)
Universal Camera Corp. v. NLRB (1951)
o
Challenge to NLRB decision – question was whether the examiner’s decision, based on personal exposure to
witness’ testimony, was part of the “whole record” on which NLRB’s decision had to be judged.
o Court addressed broader questions: Expressly overrules Hearst/Edison std of review – must take into
account all evidence on record.
o Congressional intent in passing APA was to impose a stricter standard – so courts will abide that
REVIEWABILITY, TIMING, AND OTHER THRESHOLD ISSUES
THRESHOLD ISSUES
 Cause of Action  §702
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




Jurisdiction  Constitutional v. non-constitutional
Sovereign Immunity  §702 waives sovereign immunity of US
Timing (ripeness, finality, mootness, exhaustion)
Standing (who gets to bring the suit? Must relate somehow to your own interest)
Reviewability  §701
CAUSE OF ACTION
 Gives you the legal basis/right for bringing suit
 APA § 702 (first sentence) – Any person suffering legal wrong b/c of agency action or adversely affected /
aggrieved by agency action w/in meaning of relevant statute is entitled to judicial review
o Broad right of agency review
 APA § 551(13) defines “agency action” = rule, order, or failure to take action.
 Heckler v Cheney: broad judicial review under §702 that includes agency inaction undermined by other doctrines
(timing, §701)
JURISDICTION
 Does this particular court have jurisdiction?
 If the statute silent on the appropriate court, then you go to Federal District Court under 28 USC § 1331.
 Sometimes the organic statute will specify a court to go to, i.e., Court of Appeals in MVSA/State Farm
SOVEREIGN IMMUNITY
 § 702 – waives sovereign immunity for non-monetary challenges to agency action (i.e., injunctive, declaratory
relief)
REVIEWABILITY UNDER APA
 § 701(a) – No judicial review if:
o § 701(a)(1) – statute precludes judicial review
 Comes into play when some statute other than APA (organic or other statute) explicitly bars
judicial review or is best interpreted as barring judicial review.
o § 701(a)(2) – agency action is committed to agency discretion by law
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FRAMEWORK FOR REVIEWABILITY
Statutory claims
Does § 701(a)(1) or § 701(a)(2) bar review?
Judicial Review
Constitutional claims
Is review barred by
 § 701(a)(1) – non-APA statute explicitly or
best interpreted to bar judicial review
 § 701(a)(2) – “no law to apply”
Adler view – special factors that weigh against
reviewability
If so, is that unconstitutional?
No – generally Article III or PDP challenges will
not succeed.
 § 701(a)(1)? No, unless Congress clearly
specifies. (Clear statement rule – Robison);
seems like there would be an Art. III problem if
people didn’t have access to courts
 § 701(a)(2)? No; not applicable to constitutional
claims. (Webster)
Can only bar challenge because it’s a political
question (unusual)
If so, is that unconstitutional?
We don’t know b/c Robison and Webster do not reach
this issue. Instead they promulgate clear statement
rule and interpretation of § 701(a)(2), which will
mean that we don’t usually get to this issue, but it
hints it would be unconstitutional.
JOHNSON v. ROBISON (SCOTUS, 1974)
FACTS: VA statute gives educational benefits to veterans who served on active duty. Conscientious objector Robison is
denied benefits. §211 of the act bars judicial review. Robison challenges this based on violations of constitutional
provisions.
HOLDING: He can bring constitutional challenges.
Clear Statement Rule: Statements barring judicial review of agency action won’t be read to bar constitutional
claims unless it’s clear that that’s what congress intended.
VA §211: “No review of any VA decision of questions of law or fact arising under the VA statute”
APA §701(a)(1): no judicial review if it’s precluded by a statute
Court doesn’t say whether barring judicial review of constitutional claims is unconstitutional. (They’re probably
worried that this is the case, which is why they come up with this “clear statement” rule)
HYPO: Robison* is not a conscientious objector, but he is denied benefits and thus seeks judicial review claiming that
the VA misinterpreted the statute – he DID serve on active duty, but the VA denied him benefits. Does he get judicial
review?
 No, review is clearly barred under the VA statute
 This is a paradigmatic application of §211 – the statute is incorrectly applied
 No review where statutes preclude judicial review (§701(a)(1)) – you must look to the organic statute
to see if it’s precluded
Why isn’t precluding judicial review unconstitutional?
 It’s not a problem under Art III because congress created the lower federal courts and thus their jurisdiction is
within congressional control
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 What about PDP? Isn’t judicial review a part of PDP? (On Friendly’s list)
 In practice, PDP challenges to judicial review have not been very successful
 There’s no liberty interest in receiving a government benefit
 Could try to meet the Roth LCE test and then use Mathews balancing
Why are the Constitutional Claims not barred if you can bar Statutory claims?
 Could be that SCOTUS is safeguarding the constitution, barring Constitutional review may violate Marbury
 The constitution isn’t option for congress and agencies the way that statutes might be.
Note: Adler has not found a case where the court has found a sufficiently clear intent to bar constitutional review
HAMDI v. RUMSFELD (SCOTUS 2009)
FACTS: Hamdi detained as an enemy combatant under ACMF. He challenges detention claiming that the statute has
been misapplied to him. In particular he challenges the procedures the government uses to classify him as an enemy
combatant (affidavit of government official saying he’s an enemy combatant plus limited review by courts. Government
argues for review with “some evidence standard”
HOLDING: PDP generates some kind of hearing, and absent an agency hearing there must be fuller judicial review
Limits
 This is a case where there’s no agency process at all
 Court suggests that if there were more process they wouldn’t hold this way
 Also, this is detention, which is a very important interest
 Similar to Boumedienne, but about a different constitutional issue
WEBSTER v. DOE (SCOTUS, 1988)
FACTS: National security act §102(c): “Director may terminate employment whenever he deems it necessary/advisable
in the interests of the US.” Doe was fired because of his sexual orientation. He raises 706(2)(a) and Constitutional
challenges
HOLDING: Court finds that §701(a)(2) bars review even if review is not barred under §701(a)(1). But he can still bring
constitutional challenges
701(a)(2) bars review when there is “no law to apply” – “Special Factors” bar review
Black letter doctrine – Overton Park; Webster; Chaney: § 701(a)(2) comes into play when there is “no law to
apply.” -- no substantive guidance to the agency, no law to apply  court can’t engage in review
 Here, statute seems to impose no substantive constraints on agency decision; national security interest?
Scalia and Adler:
 Even with an open-ended statute, there’s still 706(2)(a), so there’s always “law to apply.”
o For any statute, there will always be some content or act that violates it
o Beyond that, there are independent constraints like 706(2)(a), which requires reasoned decisionmaking
 Scalia (in dissent) agrees: 701(a)(2) puzzling b/c can always imagine a constraint on the agency
 Appears that 701(a)(2) and 706(2)(a) are in tension and conflict with one another
 Usually exception for court to find 701(a)(2) unreviewability  here, there’s a national security interest and an
extremely open-ended organic statute, directive that seemingly imposes no substantive constraints and only one
procedural constraint (sincerity on part of the director)
“Special Factors”
 Court says the “special factors” bar judicial review (this is where common law comes in)
 Based on 701(a)(2), courts adopt their own common law principles to deal with the issue of reviewability – they
can decide that certain types of cases are not reviewable
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 Chaney’s special factor was inaction – the court said they didn’t think that suits challenging inaction should be
reviewable
 Here the special factor is national security + absence of substantive constraint on the agency
 Highly open ended statute will likely be a “special factor”
Bottom Line: You have 701(a)(2) unreviewability when certain special factors come into play and those factors will be
articulated by the court on a case-by-case basis. It’s a NARROW exception (that’s been applied only to nonconstitutional claims)
So basically whenever the court decides that something is not reviewable.
HECKLER v. CHANEY (SCOTUS, 1985)
FACTS: Prison inmates petitioned FDA alleging that lethal injection drugs violated the FDCA and were not approved
for human executions. (FDCA regulates drugs – says drugs should be safe and effective) Claimed that FCA had failed to
enforce the statute and bring a §706(2)(a) challenge
Per §701(a)(2), agency non-enforcement is not reviewable
Reviewability of inaction
 This DOES fall under §702 Right of Review because inaction counts as action (§551(13)), but court says that
agency action is non-reviewable under §701(a)(2)
 This doctrine covers cases when the agency hasn’t thought about enforcement, and when it has thought about
enforcement, but hasn’t done anything
o Reasoning: the court doesn’t want to create perverse incentives for the agency to pretend they
hadn’t thought about enforcement
 If there are no standards, then it’s impossible for the court to evaluate for abuse of discretion
Contrast with State Farm
 Rights and duties were change in State Farm, even though it was inaction whereas here no rights or duties changed
 Action includes all kinds of cases where the agency changes legal rights or duties (i.e. issuing, repealing a
rule/order)
 In this case, they’ve taken no enforcement steps
EXCEPTIONS
 Inaction would be reviewable if congress provided a sufficiently clear enforcement mandate in the statute
o Ex. FDCA says agency must seize all life-threatening drugs that violate the statute
 If there was statutory guidance with respect to the enforcement then it’s reviewed
 also – non-enforcement may still be challenged on constitutional ground
None of these barred by §701(a)(2)
 Issuance of a rule
 Repeal of a rule (State Farm)  in effect it is action because they’ve changed legal obligations
 Issuance of an order
 Rescission of an order
701(a)(2) Overton Park: applies in different circumstances; even where Congress hasn’t affirmatively precluded review,
court needs meaningful standard against which to judge agency discretion
Rule: For refusals to enforce, generally presume judicial review not available b/c committed to agency absolute
discretion.
Reasons for the presumption of no judicial review
- Balancing of factors that are peculiarly w/in agency expertise
o where resources best spent, if agency likely to succeed, consistent policy
o agency better than the court at ordering its priorities
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-
When no action, generally not exercising coercive power
o not exceeding statutory powers
Enforcement action decisions have traditionally been committed to AG discretion – prosecutorial
discretion
PRESUMPTION of unreviewability is rebuttable where substantive statute has provided guidelines for the
agency to follow in exercising its enf powers
Ct not the best to police agency performance or interest balancing; first a decision for the legislature
o APA 701(a)(2) not overcome by enforcement provisions of the FDCA
Adler
 Difference is that in the other cases, agency has reached a decision and there’s something to review
 With non-enforcement cases, it’s not necessarily the case that the agency has a made a decision at all
 Courts don’t want to force agencies to make decisions when its resources are more appropriately placed elsewhere
 decision forcing
Leaves to Congress the question of whether agency’s decision not to institute decisions should be judicially reviewable =
presumption of unreviewability absent specific statutory language providing guidelines for enforcement
**Nothing like this has happened in Chaney. No one’s legal rights or duties have changed. FDA did not issue order
that prison could use drugs or that prison couldn’t use drugs. They just refused to act.
Bottom Line: 701(a)(2) can be a challenge against both agency action and inaction. Chaney finds inaction in agency’s
non-enforcement is not reviewable. The inaction doesn’t change legal rights or duties. On the other hand, repeal of a
rule (State Farm) or failure to modify (Horse) may be reviewable.
MASSACHUSETTS v. EPA (SCOTUS, 2007)
FACTS: Lots of organizations ask EPA to regulate GHGs under §202 of the Clean Air Act. EPA considers, decides not
to issue a rule, and issues a statement saying they don’t have authority under §202 to issue rules on GHGs and even if
they did have the authority, it would be a bad exercise of EPA’s discretion because of the lack of research
Holding: Failure to enact a rule is reviewable under a highly deferential and extremely limited review.
Agency failure to issue a rule IS reviewable.
Court reads §553(e) and §555(e) together
 553(e): “each agency shall give an interested person the right to petition for the issuance, amendment, or repeal of
a rule.
 555(e): prompt notice of the denial of the application, accompanied by a brief statement of the grounds for denial
 This is consistent with the holding that the failure to issue a rule is reviewable
 in contrast, there’s not right to petition for enforcement or to get a brief response.
 However, one could argue that the court got this wrong by saying that an alternate reading of 555(e): there needs
to be a proceeding. i.e., if there is a RM, then there is a right to notice of denial of petition and explanation, but
when there’s no proceeding then 555(e) doesn’t attach.
Adler
 Thinks this is a sloppy misreading of §553(e)
 Also means that any time somebody petitions an agency for a rule making, the agency has to give reasons why
they’ve declined to issue a rule AND that decision is subject to review  HUGE PROBLEM
FRANKLIN v. MASSACHUSETTS (SCOTUS, 1992)
FACTS: Mass challenges the inclusion of overseas personnel in census information and calculation for representative.
Census Act: Secretary of Commerce takes the census, then delegates authority to the Bureau of the census, then issues a
non-binding report and calculation which is submitted to the president, who in turn report to Congress on the number
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of reps per state. Mass. raises §706(2)(a) challenge and a Census Clause challenge against Sec. of Commerce and
President
HOLD: Court won’t hear the case because the secretary’s action isn’t final.
Per §704, in order to challenge an agency action, it must final
President not an agency for the purposes of the APA; all challenges are gone
Finality = action a consummation of an agency’s decision-making process and directly determines legal rights and duties




Agency’s action is not final because the president has discretion to change it
The president’s action is final, but you can’t challenge it because he’s not an agency
§551 and §701(b) define agency, but neither explicitly includes or excludes the president
Court worries about limited presidential discretion, and thus wants a clearer statement from congress before the
president is considered an agency.
Court DOES adjudicate the merits of the constitutional objection
 Bivens  Constitution creates its own cause of action
 If a government official has done something unconstitutional, you can go to court and sue regardless of any
statutory authorization
HYPO: President issues an executive order to NHTSA telling them to repeal the passive restraint rule
 Franklin says you can’t challenge the president’s action
 Court hasn’t addressed whether you could challenge NHTSA – Adler thinks that even in this case, when the
president has executive order authority, §702 and the rest of the APA applies to the agency (Franklin doesn’t
contradict this)
RIPENESS: FITNESS AND HARDSHIP
Both Abbott Labs and Toilet Goods have finality, but issue that arises is ripeness (a kind of common law, judge-made
doctrine)
Jud review doctrines are cumulative  you have to get over each of the separate threshold elements
ABBOTT LABS v. GARDNER (SCOTUS, 1975)
FACTS: FDA issues an LR. FDCA says FDA may issue rules for “efficient” enforcement,” and FDA issues a rule that
says manufacturers are required to post generic drug names every time the proprietary name is posted. FDA tries to bar
pre-enforcement review
HOLDING: This is ripe.
Ripeness involves evaluating both the fitness of the issues for judicial decision and the hardship to the parties
of withholding the court consideration
Pre-enforcement of a rule is OK
Conduct regulating rules satisfy the “hardship” prong
Abbott Labs Ripeness Test:
(1) Fitness
 Would this be more fit at a later time?
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 This won’t be a problem with adjudication because there wouldn’t be a later point where you’d
challenge the rule
 For rulemaking, this also isn’t a problem because, per Overton Park, in evaluating challenges, the court
will look at the agency’s record at the time of decision for §706(2)(a)
(2) Hardship  Most critical issue
 Is there sufficient hardship to the parties if we wait until enforcement?
Fitness is not an issue in this case (see Overton Park record requirements)
In considering Hardship…
 In this case, it’s a conduct regulating rule  imposes legal duties backed by sanctions
 Could result in lots of hardship if it was enforced.
Ripeness doctrine – “basic rationale is to prevent the courts, through avoidance of premature adjudication, from
entangling themselves in abstract disagreements over administrative policies, and also to protect the agency from judicial
interference until an admin decision has been formalized and its effects felt in a concrete way by the challenging parties”
TOILET GOODS ASS’N v. GARDNER (SCOTUS, 1965)
FACTS: FDA issues a Legislative rule stating that certification for color additives may be suspended if inspection is
denied.
HOLDING: This is NOT ripe
Waiting until you’re denied a benefit or waiting until your certification “may” be revoked does not constitute a
hardship.
If cosmetic manufacturers don’t permit a site search, the FDA may suspend certification of the site.
This fails the “hardship” prong of the ripeness test.
 This is not a conduct regulating rule
 It does not have onerous sanctions
 Said agency “may” impose sanction
Benefit conferring rules generally don’t satisfy the hardship prong. There can be no judicial review until the
particular benefit is refused.
 Reno v. CSS - agency defines class of beneficiaries and the agency says that you must have certain characteristics to
have the benefits – court says no hardship
Issuing/repealing an Order – you will always have finality, fitness, and hardship.
Pre-enforcement challenges to issuing/repealing a Rule – fitness shouldn’t be a problem (b/c of overton park); main issue
is hardship – Abbot says yet to hardship for conduct regulating rules, but with other types of rule (i.e. denial of benefits),
it’s not clear that there’s hardship.
Enforcement challenge generally
o FDA order  firms go to court to challenge order
o FDA goes to court, suing firms for violating rule  can challenge rule then because it’s possible to challenge rule at
that point  challenge of rule is a defense (see Schechter)
o Challenges are available at the enforcement stage, whether that means that affected party is going to initiate
challenge OR if party is brought into court by US and then raises challenge as a defense
 §703  agency action is subject to review both in civil and criminal proceedings for enforcement
 In fact, there are SO MANY enforcement stage challenges that court really wants to make sure it makes
sense to challenge rule at pre-enforcement stage
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