Admin Law Outline
(Fall 2012 / Textbook: Cass, Administrative Law (6th ed. 2011))
1. Accountability to Congress
a.
Non-Delegation Doctrine
i. Standard: has Congress created an “intelligible principle” to guide the executive in his execution
of the law?
ii. Why are we concerned about delegation of legislative power?
1. We want to maintain separation of powers
2. We want laws to be enacted by people we elect, not field of independent experts
3. We want Congress to write statutes with sufficient specificity so that people will know if
what they are doing is illegal
4. To allow for judicial review, court has to know whether someone is complying with
regulations or not, and court can only do so if it’s clear what the regulations are
Constitutional delegations
J.W. Hampton Jr. & Co. v. United States (1928)
Facts: Congress passed Tariff Act of 1922 giving the
President the authority to revise certain tariff duties
whenever he determined revision to be necessary to
“equalize the costs of production in the United States and
the principal competing country.”
Held: Tariff Act of 1922 is constitutional. Congress had
delineated an “intelligible principle” for the President to
follow. Moreover, the determination delegated seemed so
complex as to defy legislators’ competence.
Whitman v American Trucking (2001)
Facts: Clean Air Act. Congress gave EPA power to determine
exposure levels for certain pollutants. The EPA was
supposed to set the level at a number that was “requisite to
protect the public health.” EPA set exposure level for ozone
at 0.08 ppm over an eight hour period.
Held: Statute has “intelligible principle.”
Interstate Commerce Commission Act of 1887
Interstate Commerce Commission to set "just and
reasonable rates" for railway transport. Held constitutional.
Federal Trade Commission Act
Congress directed the agency to regulate "unfair methods of
competition in or affecting commerce, and unfair or
deceptive acts or practices in or affecting commerce." Held
to be constitutional delegation.
Federal Communications Commission Act
Commission was to allocate frequencies “as public
convenience, interest, or necessity requires.” Held
constitutional.
Unconstitutional delegations
Schechter Poultry (US 1935)
Facts: Congress passed National Industry Recovery Act
(NIRA), as a result of which industry and trade
organizations were permitted to set standards governing
their industry or trade. The President would then approve
the code as long as: (1) the association who created the
codes “impose[d] no inequitable restrictions on admission
to membership therein and [were] truly representative,”
and (2) the code was not designed to “promote monopolies
or to eliminate or oppress small enterprises and [would]
not operate to discriminate against them, and [would] tend
to effectuate the policy” of the Act.
Held: NIRA violates non-delegation doctrine. The Act
delegated rule-making power to private groups, and “[s]uch
a delegation of legislative power is unknown to our law and
is utterly inconsistent with the constitutional prerogatives
and duties of Congress.” The “representativeness” and
“antimonopoly” provisions provided only minor restraints
on the consent or scope of codes, leaving the proponents of
a code to “roam at will” and the President to “approve or
disapprove their proposals as he may see fit.”
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b.
c.
The Legislative Veto
i. Legislative veto = opposite of non-delegation doctrine (Congress is trying to retain power rather
than give it away)
ii. INS v Chadha (1983) The legislative veto is an unconstitutional retention of congressional
authority.
1. Facts: Chadha is British citizen of Kenyan origin who overstays his visa in the US. INS
Administrative Law Judge orders his deportation suspended. This suspension is
transmitted to Congress. House uses legislative veto power written into the Act to
override ALJ’s finding and order Chadha deported.
2. Held: Legislative veto is unconstitutional.
a. Burger majority / formalist opinion:
i. When Congress legislates, it must do so through bicameralism and
presentment.
ii. The House, when vetoing suspension of deportation, took legislative
action.
1. Legislative action = action that has “the purpose and effect of
altering the legal rights, duties and relations of persons . . .
outside of the legislative branch”
iii. Therefore, Congress violated the Constitution by allowing House to
enact legislation without complying with bicameralism and presentment
requirements.
b. White dissent / functionalist opinion:
i. White’s position is that Congress is not taking legislative action when it
invokes the legislative veto and therefore does not need to comport with
the requirements of bicameralism and presentment. This is not
legislative action; rather, it’s a convenient mechanism to facilitate the
functioning of modern government.
c. Powell concurrence:
i. Legislative veto is unconstitutional because House was making
adjudicatory determination. This is a narrower grounds for finding the
Act unconstitutional and would preserve the legislative veto in other
instances.
Other Means of Control
i. Appropriations
ii. Legislative Oversight
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2. Accountability to the President
a.
Appointments: the constitutionality of an appointment provisions turns on whether the officer being
appointed is a principal officer or an inferior officer.
i. If principal officers  must be nominated by President and then appointed by President with the
advice and consent of the Senate. Art. II, Section 2.
ii. If inferior officer  Congress can vest appointment power in President, heads of department, or
courts of law
1. How do you tell if person is inferior office or principal officer?
a. Edmond v. United States (US 1997) factor:
i. Whether the officer has a superior. Inferior officers are officers
whose work is directed and supervised at some level by other
officers appointed by the President with the Senate’s consent.
ii. In Free Enterprise Fund v. Public Company Accounting Oversight Board
(US 2010), the court quoted Edmond v. United States in assessing
whether the appointment of the officials who headed the Public
Company Accounting Oversight Board, which was not done by the
President with the advice and consent of the Senate, was constitutional.
Applying that standard, the Court in Free Enterprise Fund held that the
members of the Board are not principal officers; they are inferior
officers. The Board’s work is overseen by the SEC Commissioners, who
are appointed by the President with the Senate’s consent. For example,
the Board’s rules and its imposition of sanctions on accounting firms are
subject to approval and alteration by the SEC. Moreover, members of the
Board are removable “at will” by the SEC Commissioners. In other
words, the Board members were held to be inferior officers because
they have, for their superiors, officers who were appointed by the
President with the Senate’s consent.
b. Morrison v. Olson (US 1988) factors:
i. Whether the officer can be removed by a high executive branch
official
ii. Whether the officer has only certain, limited duties
iii. Whether the office is limited in jurisdiction
iv. Whether the office is limited in tenure
v. In Morrison v. Olson, the statute at issue was one that authorized
“independent counsels” to investigate and prosecute crimes by highlevel federal officials. Under the statute, an independent counsel was not
appointed by the President with the advice and consent of the Senate.
Instead, she was appointed by a panel of three federal judges. The case
arose when the target of an investigation by Independent Counsel Alexia
Morrison challenged the method of Morrison’s appointment on the
ground that she was a principal officer and, as such, could be appointed
only the President with the consent of the Senate. The Court in Morrison
rejected that argument, holding that independent counsels were inferior
officers. In so holding, the court assessed four factors. First, independent
counsels could be removed (though only for good cause) by a higher
executive branch official, i.e. the Attorney General. Second, independent
counsels had only certain, limited duties: namely, those of investigation
and prosecution. Third, their offices were limited in jurisdiction,
reaching only certain serious federal crimes by certain high-level federal
officials. Finally, their offices were limited in tenure; once a particular
investigation and any related prosecutions were finished, the
independent counsel’s office ended. In sum, the Court classified
independent counsels as inferior officers based on the nature and scope
of their duties and the fact that they were removable by a high executive
level official.
iii. If employee  Constitution doesn’t say anything about how they should be appointed. Any body
independent of the above, but not Congress, can do the appointing (e.g. Civil Service Commission).
1. How do you tell if it’s an employee?
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a.
b.
c.
The test is whether the tasks are established by law, are significant, the
discretion that’s exercised is significant, and the individual can exercise
independent, final authority. If that is the case, the person is shunted up to
“officer” land. Freytag v. Commissioner of Internal Revenue.
Selection of “employees” can be done by exam.
Bulk of the civil service would fall under employee category
b. Removal
i. Congress may restrict President’s power to remove an executive officer at will (power established
in Myers) as long as . . .
1. There’s no direct Congressional involvement in removal; Congress itself can’t be doing
the removing. Bowsher. In Bowsher v. Synar, the Court held that the Comptroller
General’s exercise of executive authority, in recommending budget cuts to the President
in accordance with the Gramm-Rudman-Hollings Act, was unconstitutional because the
Comptroller General was removable by Congress for reasons of inefficiency, neglect, or
good cause. Congress was therefore exercising influence over the executive branch.
2. The restrictions on removal do not “impede the President’s ability to perform his
constitutional duty.” Morrison v. Olson. In order to determine whether the removal
restrictions impede the President, the court must look to whether the officer whose
removal procedure is at issue performs a core executive function. If so, then the
restrictions are more likely to be held unconstitutional. On the other hand, if the
officer is not performing core executive functions, then the removal provisions are
Core executive functions: prosecution,
more likely to be upheld. Morrison v. Olson is one such case where the removal
foreign policy, execution of laws, law
restrictions were found to be constitutional. There, the Attorney General could
enforcement, seeing that laws are
only remove the independent counsel “for good cause.” The Court upheld this
faithfully executed
statutory “for cause” restriction on the Executive’s removal power because the
restriction did not impede the President’s ability to perform his duties. The Court
Core legislative functions: legislation,
based its determination on the facts that the independent counsel was “an inferior
investigating the impact of its
officer . . . , with limited jurisdiction and tenure and lacking policymaking or
legislation
significant administrative authority.” The authority that the independent counsel
did possess was restricted “primarily to investigation and, if appropriate,
prosecution of certain federal crimes.” The independent counsel did not have the
authority to formulate policy for the government or the authority to conduct any
administrative duties outside of those necessary to operate her office.
a. In a case after Morrison, the Court addressed whether Congress can give an
executive officer multiple layers of protection from removal. The court said no, in
Free Enterprise Fund. Under the Sarbanes-Oxley Act, which created the Public
Company Accounting Oversight Board, members of the Board could be removed
by the SEC only for good cause. The SEC Commissioners, in turn, were
themselves subject to removal by the President only for good cause. The Board
members thus enjoyed “two layers of good-cause tenure.” The Court held that
the limitations prevented the President from holding members of the Board
accountable for their actions, thereby violating separation of powers principles.
The restrictions hampered the President’s ability to carry out his or her duty to
take care that the laws are faithfully executed.
c. Solutions for remedying faulty appointment/removal provisions
i. Appointments
1. If principal officer is being appointed improperly:
a. Make it so that appointment is done by President with advice and consent of the
Senate
b. Make the position more like an inferior officer
c. Limit the powers of the office so that they are solely advisory. Then the person
would not be an officer at all.
ii. Removal
1. If restrictions are not constitutional  provision must be amended so that removal can
be done at will
2. If restrictions are constitutional  then they may be upheld
3. Analysis to figure out whether executive orders are constitutional. Youngstown (Jackson concurrence).
a. If Congress has delegated authority to act, then the President is not acting only with his own authority but
with the authority delegated by Congress. This is where President’s powers are at their highest ebb.
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b.
c.
i. Example  when President conducts a cost-benefit analysis of legislation proposed by Congress.
Where Congress hasn’t specifically legislated, and the President acts, the President relies on his
independent powers as well as any power that Congress may not have exercised in which Congress and
the President share powers.
If President takes action contrary to what Congress directs, the President’s powers are at their lowest ebb.
i. Example  warrantless domestic wiretapping in Bush administration.
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4. Administrative Action: Rulemaking vs. Adjudication
a.
Rulemaking
Adjudication
Overview
i. Three basic sources of administrative law: (1) Constitution, (2) Administrative Procedure Act, (3)
enabling statutes
ii. Due Process Constraints on Policy-Making
1. Londoner v Denver (policy-making by adjudication). When policy is made on
individual grounds, due process requires agency to hold hearing to allow
individuals to present their case.
a. Facts: Denver Board of Public Works had authorized a street to be paved. Board
simultaneously decided to assess the cost against each property owner on the
street in an amount commensurate with the benefit conferred on each party, as
determined by the Board.
b. Held: under due process clause, there should be no tax unless there’s an
opportunity to be heard – an oral hearing where homeowners can put forward
argument and proof.
2. Bi-Metallic Investment Co v. State Board of Equalization (policy-making by rule). When
policy applies to a class of people, very little process is required.
a. Facts: Colorado Board of Equalization and the Tax Commissioner increased value
of all taxable property in Denver by forty percent. No notice or opportunity to be
heard was given to individual property owners.
b. Held: Due process requirements in this case are minimal; agency isn’t required
to have a hearing. Grievances can be voiced through the legislative process.
iii. Administrative Procedure Act.
1. Definitions
a. Definition of “Rule” – the whole or a part of an agency statement of general or
particular applicability and future effect designed to implement, interpret, or
prescribe law or policy or describing the organization, procedure, or practice
requirements of an agency and includes the approval or prescription for the
future of rates, wages, corporate or financial structures or reorganization
thereof, prices, facilities, appliances, services or allowances therefor or of
valuation, costs, or accounting, or practices hearing on any of the foregoing. §
551(4).
b. Definition of “Adjudication” – agency process for the formulation of an order.
§ 551(7).
2. What is required under the APA once we determine a policy is made by rule or
adjudication?
Informal
Formal
APA § 553
APA §§ 556, 557
The agency must publish notice of rulemaking in the
A legislative hearing is held on a rule after a
Federal Register. This allows people to send in
notice is published in the Federal Register.
comments to the General Counsel’s office or for a lawyer
People submit an application to testify at the
to send a brief to the GC. The GC reads the comments
hearing. It’s not an adversarial trial, but a
and creates a rule based on all of the input. The rule is
legislative hearing. You present a brief or
then published in the Federal Register. It takes about 30 statement, offer comments, and get asked
days to implement.
questions. The rule is then published in the
Federal Register.
APA § 555(e) (notice and brief explanation)
APA §§ 554, 556, 557 (like a trial)
Prompt notice shall be given of the denial in whole or in
The agency shall give all interested parties
part of a written application, petition, or other request of opportunity for the submission and
an interested person made in connection with any
consideration of facts, arguments, offers of
agency proceeding. Except in affirming a prior denial or
settlement, etc. An administrative law judge will
when the denial is self-explanatory, the notice shall be
preside over the hearing. All decisions are part of
accompanied by a brief statement of the grounds for
the record and shall include a statement of
denial.
findings and conclusions, and the reasons or
basis therefor, on all material issues of fact, law,
or discretion presented on the record, as well as
the appropriate rule, order, sanction, relief or
denial thereof.
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b.
Policymaking by Rule
i. National Petroleum Refiners. The agency has discretion on whether to create policy through
adjudication or rulemaking
1. Facts: FTC issued rule that gas retailers have to post octane level of the gas at the pump.
The FTC issued this rule under the auspices of its mandate to prohibit unfair methods of
competition and unfair or deceptive acts or practices. The idea is that low octane gas is
bad for small precision engines, so to protect cars and ensure that people don’t overpay
for high-octane levels they don’t need, the octane level should be posted.
2. Held: Policy-making by rule here is okay. Court bases decision on policy reasons (see
chart below).
Policy Considerations in favor of Rule-Making
- Greater fairness to the regulated community. A rule is clear and puts everyone on notice. Avoids subjecting one company
to cease and desist process at the expense of others.
- Allows for efficient resolution of policy arguments. Policy arguments don’t have to be rehashed in each adjudication.
- Participation. As a matter of good governance, we want participation.
- It calls on a variety of parties to come in and take part in the proceedings, so it allows for agency to draw on expertise in
the community.
- Rule of law considerations: (1) greater certainty to the regulated community, (2) less likelihood of retroactivity.
c.
Policymaking by Order after Adjudication
i. Excelsior Underwear, Inc. – Agency announced a policy by order but did not apply it to the
parties in the adjudication.
1. Facts: Campaign to elect union to represent workers at Excelsior Underwear. Employer
sent literature to workers about how terrible it would be with union representation.
Employer refused to give union the addresses of its workers, so union couldn’t respond
to employer’s allegations.
2. Held: NLRB decides that Excelsior Underwear doesn’t have disclose the addresses of its
employees, but in the future, employers will have to.
ii. NLRB v Wyman-Gordon -- Agencies can announce rules of general applicability and future
effect in adjudicatory proceedings as long as the new rule is applied in the proceeding in
which it is announced
1. Facts: Wyman Gordon refused to give out addresses of employees. NLRB said that
Wyman-Gordon had to give out addresses based on rule in Excelsior. Wyman Gordon
argued that abide by appropriate APA rule-making procedures, so Excelsior rule is
invalid.
2. Held: Supreme Court upholds decision by NLRB that Wyman Gordon must hold election
and must disclose employees’ addresses.
a. Fortas plurality: The later-in-time Wyman-Gordon adjudication was lawful, even
though the Excelsior one was not. In the Excelsior decision, the agency announced
a new rule but did not apply it to the parties.
b. Black plurality: The initial Excelsior adjudication was proper and hence it was
proper for the Wyman-Gordon adjudicator to rely on it.
Policy Considerations in favor of Adjudication
- Tradition. In the common law system, we are accustomed to the role of adjudicators in setting down policy
determinations. Adjudicators set precedent that elaborates on the law. We are very familiar with this role of adjudicators
as policy-makers.
- Allows for flexibility.
 Judge can define the rules in curtailed, limited fashion that applies to issues at hand w/o having to anticipate the
whole range of problems that might emerge in the wider realm.
 Allows policy to be made incrementally based on specific facts. Policy can change course depending on how
facts play out rather than being bound by strict rule, which can only be changed by difficult process.
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iii. NLRB v. Bell Aerospace (US 1974) -- The court will give great deference to the agency's
decision to make policy through adjudication as long as the affected party hasn't relied in
good faith on agency's earlier decisions, and as long as the policy doesn't impose new
liabilities, or if the problem is really complex to justify case-by-case development of a
standard.
1. Facts: The NLRB had long interpreted the National Labor Relations Act to exclude
“managerial employees” from the Act’s coverage. In the early 1970s, the Board reversed
itself and held that managerial employees were covered by the Act unless their
“participation in a labor organization would create a conflict of interest with their job
responsibilities.” Under this new understanding of the Act’s coverage, the Board
determined that buyers working for Bell Aerospace were entitled to the protections of
the Act, including the right to organize and engage in collective bargaining. Bell
Aerospace petitioned for review of a Board order compelling it to bargain with the union
representing the buyers. Bell argued that the NLRB’s decision extending the Act’s
coverage to managerial employees was erroneous and that, even if the Act could be
construed to cover the buyers, in light of prior Board decisions excluding buyer’s from
the Act’s coverage, the Board should have engaged in rulemaking.
2. Held:
a. On the issue of the proper construction of the Act, the court held that
“managerial employees” are not covered by the Act.
b. On the issue of whether the Board must engage in rulemaking if it decides that
the buyers should be covered by the Act, the court held that, the choice between
rulemaking and adjudication lies in the first instance within the Board’s
discretion. However, there may be situations where the agency’s reliance on
adjudication would amount to an abuse of discretion or a violation of the Act.
Those situations include where a regulated party has substantially relied on
what the agency determined in previous adjudications and where the instant
adjudication creates new liabilities. On the other hand, where the problem is
really complex, case-by-case development through adjudication is justified.
iv. Summary of Adjudication: The decision whether to use rulemaking or adjudication lies largely
w/in the discretion of the agency. Courts are reluctant to impose policy-making by rule or
adjudication on agencies.
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5. Rulemaking
a.
Rulemaking
Requirements of Informal Rulemaking
Informal
APA § 553 (notice, comment, concise general statement
of basis and purpose)
The agency must publish notice of rulemaking in the
Federal Register. This allows people to send in
comments to the General Counsel’s office or for a lawyer
to send a brief to the GC. The GC reads the comments
and creates a rule based on all of the input. The rule is
then published in the Federal Register. It takes about 30
days to implement.
Formal
APA §§ 556, 557
A legislative hearing is held on a rule after a
notice is published in the Federal Register.
People submit an application to testify at the
hearing. It’s not an adversarial trial, but a
legislative hearing. You present a brief or
statement, offer comments, and get asked
questions. The rule is then published in the
Federal Register.
i. How to know when agency is required to undergo formal rulemaking process? The enabling
statute will require the agency to make the rule “on the record after opportunity for an agency
hearing.” See United States v Florida East Coast Ry Co (US 1973).
1. Vermont Yankee (US 1978) courts cannot impose procedural requirements on
agencies beyond the informal rulemaking requirements listed in APA § 553
a. Rationale: (1) intent of Congress; Congress intended for there to be only two
rulemaking procedures: formal and informal; (2) agencies are in the best
position to determine what the appropriate procedure is for them in
promulgating rules.
b. Facts: DC Circuit tried to impose additional procedural rulemaking requirements
on the Atomic Energy Commission. Supreme Court reversed.
ii. Otherwise, agency is obligated to only comply with informal rule-making procedures.
1. Notice (NPRM).
a. Policy reasons behind notice requirement (Small Refiner Lead Phase-Down Task
Force v EPA):
i. (1) improving the quality of rulemaking by allowing the rule proposed
to be “tested by exposure to diverse public comment”
ii. (2) affording fairness to affected parties by giving them an opportunity
to express their views
iii. (3) allowing more effective judicial review of the final rule by enabling
the rule’s critics to develop evidence in the record to support their
objections
b. Chocolate Manufacturers Assn v Block (4th Cir 1985) Notice is adequate if final
rule is a logical outgrowth of the proposed rule.
i. Facts: USDA managed a program that subsidized nutrition for underprivileged pregnant women and mothers with children. USDA and
Congress become concerned about the composition of the food
supplements arranged for by the program. Specifically, there is a
concern about too much sugar. USDA responds by issuing a proposed
rule that would limit the number of sugary items available through the
program. USDA eliminates chocolate milk in the final rule after
comments are received on the proposed rule.
ii. Held: Notice was inadequate. Final rule was not outgrowth of the
proposed rule b/c in the history of the program, milk was included
freely and there was no mention of chocolate milk in the preamble to the
proposed rule.
c. United States v Nova Scotia Foods Prods Corp (2d Cir 1977) Notice has to
disclose studies and data relied upon in drafting the proposed rule
i. Facts: FDA promulgated a rule requiring all producers of canned fish to
heat the fish to a certain temperature before canning to avoid spread of
botulism. Nova Scotia fails to comply, so FDA seeks injunction. Nova
Scotia argues notice was inadequate b/c it didn’t explain the scientific
findings behind its proposed rule or explain how the heating
requirement would adequately deal with the risk of botulism.
ii. Held: Notice was inadequate. Court strikes the rule.
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d.
Sierra Club v Costle (DC Cir 1981) Ex parte contacts and late comments that
are “of central relevance to the rulemaking” shall be entered into the
docket with adequate time to respond
i. Facts: EPA developed a rule to reduce the amount of sulfur dioxide
emitted by coal burning power plants. To develop this rule, the EPA
engaged in a “hybrid” rule-making process required by the Clean Air
Amendments of 1977. In addition to the informal rule-making
requirements set forth in APA § 553, the EPA provided an opportunity
for hearings involving oral presentations of data, views, or arguments.
After the close of the rulemaking proceeding, the Environmental
Defense Fund objected to: (1) comments filed after the close of the
official comment period, and (2) meetings between EPA officials and
various government and private parties interested in the outcome of the
final rule, all of which took place after the close of the comment period.
ii. Held: EDF’s objections were dismissed. Agency listed content of the
important comments in the record.
iii. Home Box Office v FCC (DC Cir 1977) If “competing claims to a
valuable privilege” [e.g. right to broadcast] are involved, ALL ex
parte contacts must be docketed
1. Facts: FCC was considering extending restrictions on
programming from subscription television to cable television.
These restrictions forbade subscription television operators
from broadcasting: (1) sports events of the sort regularly
carried on commercial TV during the preceding two years, (2)
feature films more than two and less than ten years old, (3)
series-type programs, and (4) commercial advertising. In
response to objections against these restrictions, the FCC
opened up a new rulemaking proceeding to reconsider the pay
cable rules. The FCC ultimately reenacted the rules largely in
their existing form. The plaintiffs in this case brought suit
alleging that the FCC engaged in ex parte contacts between the
close of oral argument and the adoption of the rule, when the
rulemaking should have been closed while the Commission was
deciding what rules to promulgate.
2. Held: remanded to the FCC with instructions to hold an
evidential hearing to determine the nature and source of all ex
parte pleas and other approaches that were made to the FCC
after the issuance of the first notice of proposed rulemaking.
3. Why is court non-chalant about ex parte comments in Sierra
Club v. Costle whereas the HBO court was very trouble with ex
parte comments?
a. In Sierra Club, the agency actually did enter the
substance of what it considered to be important
comments into the record, which was not what the FCC
did. So not only is the agency action less suspicious in
Sierra Club, but also the concerns about fairness and
availability of judicial review are alleviated.
b. In Sierra Club, some of the ex parte communications
were made between the agency and other individuals
within the executive branch. The court in Sierra Club
appreciates that, in a rulemaking, the political actors
are actually constitutionally authorized to supervise
what the agency is doing and influence the kinds of
policies that are being adopted by the agency.
c. There’s no valuable privilege at stake in Sierra Club.
The agency is setting general standards there, whereas
in HBO v. FCC, the agency is action is more like an
adjudication that effects specific parties.
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4.
Policy rationale behind recording ex parte communications
a. Judicial review. Improves court’s ability to determine
whether the agency was adequately weighing the
interests of all parties.
b. Opportunity for contestation. Public should have ability
to engage in back-and-forth to come up with expert
rule.
c. Due process concerns. Participants in the rulemaking
process should all feel like their concerns have been
responded to.
2. Comment. The public must be given an opportunity to comment orally or in writing on
the proposed rule.
3. Concise general statement of basis and purpose.
a. United States v Nova Scotia Foods Prods Corp (2d Cir 1977) Concise general
statement must be explain why significant alternative was rejected
i. Facts: FDA promulgated a rule requiring all producers of canned fish to
heat the fish to a certain temperature before canning to avoid spread of
botulism. Nova Scotia fails to comply, so FDA seeks injunction. Nova
Scotia argues that the concise general statement of the rule’s basis and
purpose failed to respond to objections presented in response to the
proposed rule: (1) that rule is overbroad (failed to distinguish b/w diff
types of fish); (2) the rule creates an unbearable burden on the industry
(heating to such high temp would destroy white fish product); (3) the
rule didn’t take into consideration the feasible alternatives.
ii. Held: Court upheld the objection. Court strikes the rule.
iii. Exemptions from § 553
1. Requirements in § 553 don’t apply to: “interpretative rules, general statements of policy,
or rules of agency organization, procedure, or practice, or when the agency finds good
cause”
2. “Interpretive rule” exception
a. Hoctor v United States Department of Agriculture (7th Cir 1996) p 497 An
interpretive rule is (1) a logical and automatic result of a legislative rule
and (2) is not binding
i. Facts: Hoctor deals in exotic animals. He violates USDA’s 8 foot fence
rule. He says the rule is invalid b/c it wasn’t promulgated in accordance
with notice and comment requirements. USDA argues that 8 foot fence
rule is an interpretation of structural strength regulation. Because it’s an
interpretation, it didn’t have to go through notice and comment rulemaking requirements; it falls under the exception in § 553(b).
ii. Held: Eight-foot fence rule is a “legislative” rule, so must go through
notice and comment requirements. The eight-foot standard is not a
logical and automatic consequence of the structural strength standard,
and the rule is binding whereas an interpretive rule is only advisory.
b. National Family Planning and Reproductive Health Association Inc. v Sullivan (DC
Cir 1992) p 491 Where a rule is a complete reversal from an earlier
legislative rule, it is itself a legislative rule rather than an interpretive rule
i. Facts: Title X of the Public Health Service Act provided that
appropriated funds could not be used in programs where abortion was a
method of family planning. In 1988, HHS promulgated by notice and
comment rulemaking a much broader prohibition on abortion
counseling or referrals including a “gag rule” that made it unlawful for
care providers in clinics funded by Title X to discuss with clients the
availability of abortion. In the wake of public pressure, President George
H.W. Bush directed HHS not to apply the regulations in a way that
interfered with the doctor-patient relationship. In response, Secretary of
HHS issued Directives instructing care providers that they were able to
discuss abortion with their patients. National Family Planning then
objected to the Directives, claiming that they were legislative rules that
11
3.
had to be passed according to the notice and comment requirements of §
553.
ii. Held: The Directives are legislative rules that must be made according to
§ 553. The Directives are a complete reversal from the earlier legislative
“gag” rule.
“General statement of policy” and “rules of agency organization” exception
a. Lincoln v Vigil (US 1993) p 506
i. Facts: Indian Health Service decided to close a New Mexico clinic to
redirect its resources towards children in need of mental health care.
This decision was issued in a memo. The plaintiffs challenged the
decision to close the clinic by claiming that the decision should have
been issued according to notice and comment rulemaking procedure.
ii. Held: decision to close the clinic fell within one of two exemptions to §
553 – either the general statement of policy exemption or the rules of
agency organization exemption.
1. General statements of policy are statements issued by an
agency to advise the public prospectively of the manner in
which the agency proposes to exercise a discretionary power.
The term includes an announcement like the one issued by the
Indian Health Service, in which the agency decided to
discontinue a discretionary allocation of unrestricted funds
from a lump-sum appropriation.
2. Rules of agency organization are rules about internal
organization and employment practices.
12
6. Adjudication
a.
Constitutional Authority to Adjudicate
i. CFTC v Schor (US 1986) Agencies can hear non-common law claims as long as Article III
courts are reserved the powers of enforcement and review. Agencies can hear common law
claims as long as power is reserved to Article III courts, there is a limited grant of power to
the agency, and policy considerations [such as reducing high volume of litigation in Article
Use CFTC
III courts, drawing on expertise of the administrative agency, and equalizing disparate
analysis when
situations of the litigants] favor the scheme.
administrative
1. Facts: Schor sued Conti (commodities broker) alleging that Conti violated the
tribunal is
Commodity Exchange Act and CFTC regulations. Schor filed claim with the CFTC. Conti
adjudicating
counterclaims in the CFTC for money owed to him by Schor. Schor claims that the CFTC does not
private claim
have jurisdiction over state law counterclaims brought in reparations proceedings.
2. Held: CFTC can hear the state law counterclaim. Schor waived his personal right to file his
claim in an Article III court and separation of powers concerns are not violated here.
i. What are the factors the court looks at when trying to decide whether this delegation of
jurisdiction has violated separation of powers principles? The concern is that adjudication of
common law claims in administrative tribunals might violate separation of powers.
1. The traditional private vs. public right distinction. Whether a claim is based on a private
right or a public right depends on two factors: (1) whether the parties are both private [if
What’s a
so, then the right is private] or whether one party is the government [if so, the right is
private claim?
public]; and (2) the source of the claim [if common law, private right is being invoked].
Adjudication of private rights has traditionally been within the jurisdiction of Article III
courts. The basic function of an Article III courts is to protect private rights, which are
thought to be very foundational rights.
2. Extent of the judicial power that’s been conferred on the agency and the extent of the
judicial power that’s been retained by the Article III courts. If the power of enforcement of
the administrative agency’s order and the power to review the order has been reserved
to an Article III court, then it is more likely that the court will find that the administrative
agency’s jurisdiction over a common law claim does not violate separation of powers
principles.
3. Congress’ rationale. If Congress’ rationale is to engage in “jurisdiction stripping,” then the
agency’s jurisdiction over the common law claim is more likely to be rejected. However, if
Congress has legitimate reasons for granting this jurisdiction to an agency, then the grant
of jurisdiction is more likely to be upheld. One of the reasons found to be legitimate in
CFTC v Schor is that it would be expedient to consolidate related claims in a tribunal that
has expertise in CEA/CFTC regulations violations and that is more efficient and less
expensive than Article III courts. Furthermore, the administrative tribunal is part of an
independent agency, so is free from political pressures.
b. Constitutional Due Process: the Interests Protected
i. Is there a right protected by the Due Process Clause such that an adjudicative procedure would be
required?
ii. Traditional view: rights vs. privilege dichotomy
1. When it came to deprivation of rights (something that existed prior to government), a
hearing was due
2. When it came to privileges (something granted to you by the government), no hearing
was required
iii. Goldberg v Kelly (US 1970)
1. Due Process Clause requires an evidentiary hearing before a recipient of welfare
benefits can be deprived of such benefit
2. Facts: Plaintiffs are residents of NYC receiving financial aid under the federally assisted
program of Aid to Families with Dependent Children (AFDC). They want to have a right to
an oral hearing before their benefits are terminated.
3. Held: Plaintiffs have a protected interest, but court is not clear on whether it’s life, liberty,
or property. The litigants did not contest this issue. The procedure that is due to
plaintiffs:
a. Notice that benefits will be terminated based on the caseworker’s
recommendation and unit supervisor’s approval of the termination
13
b.
In response to that termination notice, the claimant can request an oral pretermination hearing
c. For the pre-termination hearing, the claimant must be allowed to retain an
attorney if he so desires
d. The claimant or his counsel will be given the opportunity to make an oral
argument and cross-examine the witnesses
e. The claimant’s eligibility determination should be made by an unbiased decisionmaker
f. The decision-maker’s conclusion as to the recipient’s eligibility must be based on
the legal rules and evidence adduced at the hearing and should be explained in a
brief statement (though the statement does not need to amount to a full opinion
including formal findings of fact or conclusions of law)
g. ONLY AFTER the oral hearing will a claimant’s benefits be terminated, if the
unbiased decisionmaker so concludes
iv. Board of Regents v Roth (US 1972) In order to have a property interest, a litigant has to have a
legitimate claim of entitlement that is established generally by a positive statutory
instrument
1. Facts: Roth is untenured professor. One-year appointment. Doesn’t get rehired at close of
his appointment. Decision not to renew his contract was taken without any process
whatsoever. Roth sues the state of Wisconsin. He wants a hearing about why he was
terminated and wants to be provided with reasons.
2. Held: Roth’s interest in getting his contract renewed for another year is not a right
protected under the Due Process Clause.
a. Roth was not denied his “liberty” where he simply is not rehired in one job but
remains as free as before to seek another.
i. Examples of liberty interests = interest in maintaining a good reputation
(so if Roth had been fired on a charge of dishonesty, then a hearing
would be warranted) or interest in ability to find other jobs (so if state
had invoked regulations barring him from all other public employment
in state universities, then a hearing would be warranted).
b. Roth was not denied his “property” because he had no statutory entitlement to
his employment. Whether one has a “property right” depends on enactments by
legislature and not by case law.
v. Perry v. Sindermann (US 1972) Court will look to informal statements and expectations that
are created for people who are in a state work place to determine whether or not there is a
protected property interest
1. Facts: Teacher whose contract had not been renewed alleged that ambiguous assurances
of continued employment contained in official college publications created a system of
“de facto tenure” on which he had legitimately relied.
2. Held: allegations were sufficient to withstand a motion for SJ on the ground that P lacked
a “property interest.” The college publications justified his claim of entitlement to
continued employment absent “sufficient cause.”
vi. Cushman v Shinseki (Fed Cir 2009) Veteran’s disability benefits are a protected property
interest because they are nondiscretionary, statutorily mandated benefits (i.e. a veteran is
entitled to benefits upon a showing that he meets the eligibility requirements set forth in
the governing statutes and regulations)
1. Facts: Veteran who suffered injuries in Vietnam sued for veterans’ benefits. He was an
applicant who had been denied and alleged he was denied a property interest.
2. Held: Entitlement to veteran’s disability benefits are nondiscretionary, statutorily
mandated benefits that are a property interest protected by the due process clause.
c. Constitutional Due Process: the Procedure Due
i. Mathews v Eldridge (US 1976) Identification of the specific dictates of due process requires
Use this test
consideration of three factors: (1) the private interest that will be affected by the official
before
action; (2) the risk of an erroneous deprivation of such interest through the procedures
determining if
used, and the probable value, if any, of additional or substitute procedural safeguards; and
procedure
(3) the government’s interest, including the function involved and the fiscal and
should be
administrative burdens that the additional or substitute procedural requirement would
granted before
entail
or after
deprivation
14
1.
2.
Facts: Eldridge’s disability payments were terminated upon a finding that he was no
longer eligible for benefits and before an opportunity for an oral hearing. Eldridge claims
that his disability benefit payments should terminate only after he has had an
opportunity for an oral hearing and the administrative law judge has made a
determination based on that hearing that he is no longer eligible for benefits.
Held: Disability benefits payments can be terminated before the opportunity for an oral
hearing.
a. Prong One: Private interest in being denied benefits before an oral hearing is
low. The disabled worker’s need is likely to be less than that of a welfare
recipient, who was found to be in need of a pre-termination hearing, because the
disabled worker is probably less destitute. The beneficiary more likely has other
assets beyond the disability benefits such as earnings of other family members,
workmen’s compensation awards, tort claims awards, savings, private insurance,
public or private pensions, veterans’ benefits, food stamps, and public assistance.
b. Prong Two: The risk of an erroneous determination here is low, and the
procedural safeguards already in place are comprehensive. The procedural
safeguard that is already in place – the paper record documenting the changes in
the beneficiaries eligibility – is more complete than the basis for the termination
in Goldberg. Moreover, the nature of the determination is technical in the sense
that it’s based on medical evidence, and therefore is more objective than the
hearsay evidence on which termination was based in Goldberg.
c. Prong Three: Government interest in maintaining fiscal efficiency and its
interest in an expeditious administration of the procedure is strong.
Issues of Procedural Due Process in Schools
Goss v Lopez (US 1975) a public school must conduct a
Ingraham v Wright (US 1977) no pre-determination
hearing before subjecting a student to suspension
hearing is required before subjecting student to
Facts: Student was suspended from high school based on
corporal punishment
the fact that she was being disruptive. Student claimed a
Facts: Student was subjected to corporal punishment for
liberty interest in going to school and in avoiding the stigma failing to respond to a teacher’s instruction. Student claimed
that is associated with suspension.
a liberty interest in avoiding unmerited corporal
Held: School must hold pre-determination hearing (not a
punishment.
full-scale adversarial hearing, but an informal one).
Held: No pre-determination hearing is required
Why do these cases come out differently? Mathews test:
 Private interest: suspension results in significant loss to the individual whereas spanking is less of a loss
 Substitute procedural safeguards: person subject to corporal punishment can bring tort suit whereas person subject to
suspension probably has no claim in district court
 Government interest: degree of intervention that would have been required for a pre-corporal punishment hearing
would have been really burdensome; societal interest in speedy corporal punishment as a useful corporal tool
d.
Statutory Hearing Rights
i. Formal Adjudication – APA §§ 554, 556, 557
1. To determine whether a formal adjudication is warranted, look to the enabling statute. If
the enabling statute says that the adjudication must be determined “on the record after
opportunity for an agency hearing,” then we are in formal adjudication land.
2. What do you get when there’s a formal adjudication?
a. Persons entitled to receive notice of the hearing shall receive notice of the time,
place, and nature of the hearing as well as the matters of fact and law asserted.
APA § 554.
b. Parties can present oral and documentary evidence. APA § 556.
c. Parties can submit rebuttal evidence and conduct cross-examination. Id.
d. A record will created for the parties that includes findings and conclusions, and
the reasons or basis therefore, on all material issues of fact, law, or discretion
presented on the record. APA § 557.
3. Portland Audubon Soc’y v Endangered Species Committee (9th Cir 1993) When an
agency engages in formal adjudication, ex parte communications between the
agency and the President/his administration are prohibited
a. Facts: The Endangered Species Act prohibited federal agencies from taking
action that would threaten or endanger species on the endangered species list,
15
such as the spotted owl. The Bureau of Land Management applied for an
exemption the Endangered Species Act so that it could auction off 44 tracts of
land for logging purposes. The Endangered Species Committee then approved
exemptions for 13 of the 44 tracts based on a report issued by the head of the
Committee, the Secretary of the Interior, assessing the risks of the exemption to
the spotted owl as well as the economic benefits of allowing logging. The
Portland Audubon Society challenged the exemptions that were granted on the
basis that there were inappropriate ex parte communications made by the
President and his Administration to the Committee members pressuring them to
grant the exemptions.
b. Disposition: remanded to Committee to hold an evidentiary hearing to
determine the nature, content, extent, source, and effect of any ex parte
communications that may have transpired.
ii. Informal Adjudication -- APA § 555(e)
1. If the enabling statute requires an adjudication that is NOT “on the record after
opportunity for an agency hearing,” then we are in informal adjudication land.
2. What do you get in informal adjudication land?
a. Basically just a right to notice that the decision has been made and a summary
statement of rationale: “Prompt notice shall be given of the denial in whole or in
part of a written application, petition, or other request of an interested person
made in connection with any agency proceeding. Except in affirming a prior
denial or when the denial is self-explanatory, the notice shall be accompanied by
a brief statement of the grounds for denial”
3. If your client wants more process than is afforded by APA § 555(e), then you have to
argue that Due Process requires more. Use Goldberg v Kelly, Board of Regents v Roth,
Perry v Sindermann, Mathew v Eldridge.
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6. Judicial Review
a.
APA Standards of Review
i. Standard of review that court will apply depends on the agency’s enabling statute and APA § 706
1. APA § 706
a. (2) Court shall hold unlawful and set aside agency action, findings, and
conclusions found to be –
(A) arbitrary, capricious, an abuse of discretion, or otherwise not in
accordance with law;
(B) contrary to constitutional right, power, privilege, or immunity;
(C) in excess of statutory jurisdiction, authority, or limitations, or short of
statutory right;
(D) without observance of procedure required by law;
(E) unsupported by substantial evidence in a case subject to sections 556 and
557 of this title or otherwise reviewed on the record of an agency hearing
provided by statute; or
(F) unwarranted by the facts to the extent that the facts are subject to trial de
novo by the reviewing court.
ii. Affidavits are not the best evidence for agency to give to a court to explain its decision b/c that’s
post-hoc reasoning that was engineered for the proceeding. To be on the safe side, Secretary of an
agency should develop an agency record that explains agency’s reasoning and conclusions.
iii. Policy behind judicial review
1. There’s a danger that if an agency is entrusted to create its own rules, apply them, and
then adjudicate whether they’ve been applied correctly, there will be tyranny. To combat
that risk, courts must have the power to check that an agency has acted within the scope
of its powers.
2. Public choice view. Congress has struck bargains with public interest groups, so it’s
important for agencies to abide by what Congress has done to ensure the political
process functions.
3. Public interest view. Congress represents the public, so what Congress mandates the
agencies to do represents the will of the public. We want to make sure that agencies do
what democratically elected legislatures told them to do.
iv. Citizens to Preserve Overton Park v Volpe (US 1971) example of APA § 706(2)(A) & (C) in
action
1. Facts: Memphis City Council and Secretary of Transportation approved a plan that would
allow for construction of a highway running directly through Overton Park in Memphis,
TN. The Department of Transportation’s enabling act, the Federal-Aid Highway Act,
required the Secretary to ensure that (1) there was no feasible and prudent alternative to
the proposed route through the park, and (2) all possible planning had been done to
minimize harm to the park should there be no feasible and prudent alternative. The
Citizens to Preserve Overton Park sued, alleging that Secretary Volpe failed to comply
with the requirements of the Federal-Aid Highway Act and that his decision was unlawful
under APA § 706.
2. Held: There were feasible and prudent alternatives to constructing the highway through
the park, and there were additional ways to minimize harm to the park under the
proposed plan. In violating the Federal-Aid Highway Act by approving the proposed plan,
the Secretary also violated APA § 706(2)(A) & (C).
a. “Feasible and prudent alternative” – There were alternatives to constructing the
highway through the park, namely by routing it to the north or south of the park.
The alternatives should not be weighed with consideration to economic effects of
those alternatives. Rather, preservation of parkland is to be given a priority.
b. “Minimize harm” – Improved drainage planning, tunneling under the park’s
creek, and increased depression of the roadway would minimize harm to the
park. The record didn’t fully explain whether these mechanisms were
considered, and if they were, why they were rejected.
c. APA § 706(2)(A) – Secretary must prove that his decision was not arbitrary and
capricious and that he followed the necessary procedural requirements. When
something is grounded in fact, it is not “arbitrary and capricious.”
17
d.
b.
APA § 706(2)(C) – Because Secretary Volpe has misinterpreted his authority by
engaging in a balancing test when weighing the alternatives to the proposed
route, he exercised powers in excess of his statutory authority.
Questions of Fact or Policy – Arbitrary and Capricious
i. When does court apply the arbitrary and capricious standard of review?
1. Informal adjudication or informal rulemaking
ii. THE STANDARD: In reviewing a question of fact or a policy determination, the court should
apply the arbitrary and capricious standard. For the policy determination to be upheld, the
agency must examine the relevant data and articulate a satisfactory explanation for its action
including a rational connection between the facts found and the choice made. Motor Vehicles Assn
v State Farm. Normally, an agency rule would be arbitrary and capricious if the agency has relied
on factors which Congress has not intended it to consider, entirely failed to consider an important
aspect of the problem, offered an explanation for its decision that runs counter to the evidence
before the agency, or is so implausible that it could not be ascribed to a difference in view or the
product of agency expertise. Id.
1. Agency must examine the relevant data and articulate a satisfactory explanation for its
action including a rational connection b/w the facts found and the choice made. Normally
an agency rule would be arbitrary and capricious if the agency has relied on factors
which Congress has not intended it to consider, entirely failed to consider an important
aspect of the problem, offered an explanation for its decision that runs counter to the
evidence before the agency, or is so implausible that it could not be ascribed to a
difference in view of the product of agency expertise.
iii. How to challenge an agency action:
1. Point out alternatives the agency didn’t consider
2. Point out flaws in the scientific evidence that the agency relied on or in the reasoning it
used to draw conclusions from those scientific studies
iv. Motor Vehicles Assn. v. State Farm (US 1983) The Dept of Transportation’s rescission of the
passive restraint requirement of Standard 208 was arbitrary and capricious because it
failed to consider alternatives and drew conclusions unsupported by the facts
1. Facts: The Secretary of Transportation had promulgated Standard 208, which required
car manufacturers to install passive restraints in cars in the form of either airbags or
automatic belts, pursuant to the National Traffic and Motor Vehicle Safety Act of 1966,
which was created for the purpose of “reducing traffic accidents and deaths and injuries
to persons resulting from traffic accidents.” In 1981, however, Secretary of
Transportation Andrew Lewis decided to rescind Standard 208 because it appeared that
very few car manufacturers would choose the airbag option due to expense and that the
automatic seatbelt option would not have the benefits that it was predicted to have
because of the ability to detach the automatic seatbelt.
2. Held: Rescission of Standard 208 was arbitrary and capricious; agency has to re-start the
rulemaking proceeding. Three reasons why arbitrary and capricious: (1) NHTSA gave no
consideration whatever to modifying Standard to require airbags; (2) too quick to
dismiss the safety benefits of automatic seatbelts; and (3) agency failed to articulate a
basis for not requiring non-detachable belts under Standard 208.
Failed to consider alternatives
The agency failed to consider a viable alternative – a rule
that would require car manufacturers to install airbags
rather than giving the car manufacturers a choice. The Court
stated that at the very least, this alternative way of
achieving the objectives of the National Traffic and Motor
Vehicle Safety Act should have been addressed and
adequate reasons given for its abandonment.
Drew conclusions unsupported by the facts
The Court stated that there was no direct evidence in
support of the agency’s finding that detachable automatic
belts could not be predicted to yield a substantial increase
in usage. Rather, the empirical evidence, consisting of
surveys of drivers of automobiles equipped with passive
belts, revealed more than a doubling of the usage rate
experienced with manual belts. The agency argued that the
doubling of seatbelt usage in these studies could not be
extrapolated to an across-the-board mandatory standard
18
The agency also failed to articulate a basis for not requiring
non-detachable belts. Rather, it treated the non-detachable
belt together with the ignition interlock device and stated
that such use-compelling devices would complicate the
extrication of an occupation from his or her car. The Court
indicated that the agency should have analyzed the
continuous seatbelts option in its own right and, because it
did not, the agency failed to offer a rational connection
between the facts and judgment required to pass muster
under the arbitrary-and-capricious standard.
because the passive seatbelts were guarded by ignition
interlocks and purchasers of the tested cars are atypical in
the sense that they are more likely than the average person
to be interested in using safety features in the first place.
The Court pointed out flaws in the agency’s reasoning. One
such flaw was that inertia – a factor which the agency’s
studies had found significant in explaining the low usage
rates for seatbelts – worked in favor of, not against, use of
the protective device. Thus, there would be grounds to
believe that seatbelt use by occasional users would be
substantially increased by detachable passive belts.
v. Federal Communications Commission v. Fox Television Stations Inc. (US 2009) The same
evaluation under the arbitrary and capricious standard applies whether the agency is
enacting policy or changing an existing policy
1. Facts: Via adjudication, FCC determined that one use of a nonliteral use of an indecent
word would constitute a violation of the ban on indecent language. This policy was a
departure from its earlier policy that required repetitive usage of a word to constitute a
violation. In explaining this change, the FCC said (1) that bleeping/delay systems
Example where
technology had advanced making it easier to bleep out single uses of objectionable
agency
language; (2) that it made no sense to distinguish between whether one uses the relevant
terms as an expletive or as a literal description, thereby suggesting that nonliteral and
adjudication was
literal uses should be treated the same (i.e. one use constitutes a violation); and (3) that
not arbitrary and
the FCC’s new “contextual” approach to fleeting expletives was better and more
capricious
constituent with the agency’s general approach to indecency than was its previous
categorical approach, which offered broadcasters virtual immunity for the broadcast of
fleeting expletives.
2. Held: The change in policy was not arbitrary and capricious. The agency’s reasons for
expanding the scope of its enforcement activity were entirely rational and at least as
good as its decision to enact the policy in the first place.
3. Dissent (Breyer): wants an explanation for why the agency is changing its policy; it’s not
enough to justify the policy was within the scope of its power granted by the enabling act.
The agency should explain why the circumstances have changed.
While as recently as the 1980's the Court was very firm in its arbitrary and capricious review when an agency adopted a
change in policy, see State Farm, the current status of the law is that if the rationale behind changing policy courses is as
good as the reason for adopting the initial course, the Court will defer to the agency, see FCC v. Fox.
c.
Questions of Fact or Policy – Substantial Evidence
i. When does a court review for substantial evidence? When agency has made policy by formal
rulemaking or formal adjudication or when the enabling statute says so.
1. APA § 706(2)(E) provides that a court shall hold unlawful and set aside agency action
“unsupported by substantial evidence in a case subject to Sections 556 and 557 of this
title or otherwise reviewed on the record of an agency hearing provided by the statute”
2. In addition, there are some statutes that specify “substantial evidence” review although
the agency action is not formal rulemaking or formal adjudication (e.g. Occupational
Safety and Health Act)
ii. What does substantial evidence mean?
3. It is more than a “mere scintilla”; it is “such relevant evidence as a reasonable mind might
accept as adequate to support a conclusion”; it is evidence sufficient to withstand a
motion for a directed verdict. It is a less rigorous standard than “clearly erroneous,” but is
more rigorous than “no basis in fact.” Universal Camera Corp. v. National Labor Relations
Board (US 1951).
4. The agency’s “findings are entitled to respect, but they must nonetheless be set aside
when the record before a [court] clearly precludes the [agency’s] decision from being
justified by a fair estimate of the worth of the testimony of witnesses or its informed
judgment on matters within its special competence or both.” Universal Camera Corp. v.
National Labor Relations Board (US 1951).
19
d.
ii. Universal Camera Corp. v. National Labor Relations Board (US 1951) – In conducting a review
based on the substantial evidence standard, the court needs to independently review the
record in its entirety rather than apply a deferential standard to the agency’s findings.
1. Facts: The NLRB determined (via formal adjudication) that the plaintiff was discharged
due to the defendant’s resentment against him for engaging in labor organization
activities in violation of the National Labor Relations Act. The NLRB did so despite the
conclusion of the trial examiner that the evidence failed to sustain the allegations. The
Second Circuit agreed with the NLRB, but on appeal the Supreme Court directed the
Second Circuit to make an independent review of the record as a whole, including the
trial examiner’s findings. On remand, the Second Circuit concluded that the trial
examiner’s findings should be accorded more deference because of the trial examiner
was in the best position to evaluate the credibility of the witnesses on whose testimony
the outcome depended.
iii. The Benzene Case (US 1980) – Example of situation where agency did not pass the
“substantial evidence” test.
1. Facts: The Secretary of Labor promulgated a policy (via informal adjudication) to reduce
the permissible occupational exposure to benzene from 10 parts benzene to million parts
air to 1 part per million. The Secretary based its decision to reduce the exposure level on
studies indicating that chromosomal damage could result from exposures below 25 ppm,
the Infante study which disclosed seven excess leukemia deaths in a population of about
600 people over a 25-year period, and the “Italian shoe study” which showed a doubling
of leukemia deaths among Italian shoemakers exposed to concentrations of between 150
and 200 ppm. Extrapolating this data, OSHA argued, indicated a danger of adverse health
effects at 10 ppm and that, therefore, 1 ppm was the appropriate level.
2. Held: In applying the substantial evidence standard of review, the Court held that the
Secretary exceeded his power in setting the exposure level to 1 ppm. The Court identified
weaknesses in the scientific basis for the Secretary’s conclusions and relied on findings
by industry’s expert, Dr. Richard Wilson, who found that, at an exposure of 10 ppm, at
most two cancer deaths every six years would be observed in the exposed population of
30,000 workers. Such a risk was not sufficient to constitute a “significant harm,” as
required by Occupational Safety and Health Act.
Questions of Law
i. When an agency is interpreting its enabling statute, it is involved in an analysis of a question of
law
ii. The old way of reviewing agency determination on a question of law:
1. NLRB v Hearst (US 1944)
a. Facts: The NLRB had ordered Hearst to bargain collectively with its “newsboys,”
based on a finding that the newsboys were “employees” of Hearst, as that term is
used in the National Labor Relations Act. Hearst argued that the statute should
be interpreted to incorporate the common law distinction between “employee”
and “independent contractor,” and that, under that test, the newsboys were
independent contractors. The NLRB argued that the definition of “employee”
under the Act was one more tailored to the Act’s distinctive purposes of
protecting workers in subordinate bargaining positions and promoting labor
peace.
b. Held: The Court said that Congress did not intend the Act to import common law
standards, but the Court left it up to the NLRB to decide whether newsboys
would be covered under the term “employee.” On the question of whether
Congress intended the Act to import common law standards, the Court appeared
to decide the question independently and definitively, by direct reference to
statutory language, purpose, and history. But on the question of whether
newsboys were included in the definition of “employee,” the Court deferred to
agency expertise because of (1) the agency’s understanding of the basic mission
of the agency, and (2) the agency’s understanding of the different kinds of
workplaces in which an “employee” is located.
iii. How courts review questions of law now (see next page)
20
21
1.
Skidmore v Swift & Co (US 1944) A court should give deference to an agency’s interpretation of its enabling
statute. However, in deciding how much deference to give the agency, the court will consider the agency’s
thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and
later pronouncements, the expertise of the agency on the specific question, and whether the agency had
opportunity to consider the question over a long period of time.
a. Facts: Seven persons employed as private firefighters in Swift’s meat packing plant sued their employer to
recover payment for overtime worked. They claimed that time spent in the company’s “fire hall” at night, while
on call to respond to alarms, was “working time” under the Fair Labor Standards Act, and thus entitled them to
overtime pay. In contrast, the Administrator of the Wage and Hour Division of the Labor Department
interpreted the statute to exclude sleeping time, but include waking on-duty time within the definition of
working time.
b. Held: The Supreme Court reversed the district court, which had read the statute independently, saying that the
district court should have given at least some modest degree of deference to the Administrator’s
interpretation.
iv. REASONS FOR DEFERENCE: The Administrator’s policies are made in pursuance of official duty,
based upon more specialized experience and broader investigations and information than is likely
to come to a judge in a particular case.
v. CAVEATS: However, the weight of such a judgment in a particular case will depend upon the
thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier
and later pronouncements, and all those factors which give it power to persuade, if lacking power
to control.
2.
Chevron test:
(1) Is the intent of Congress on the precise question at issue clear? If the intent of Congress is clear, then the court,
as well as the agency, must give effect to the unambiguously expressed intent of Congress.
a. How to determine intent of Congress? Look to definitions section of the statute, dictionary definitions,
legislative history, general purpose of the statute, principles of statutory construction.
(2) If the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the
agency’s interpretation is based on a permissible construction of the statute. Under this prong of the analysis,
the court is very deferential to the agency’s interpretation of the statute.
3.
Chevron v Natural Resources Defense Council Inc. (US 1984) If Congress has not directly spoken to the precise
statutory interpretation question at issue, then deference should be given to the agency’s interpretation of
the statute.
a. Facts: Congress passed the Clean Air Act Amendments in 1977 to improve national air quality. The CAAA
required “nonattainment” (dirty air regions) states to establish a permit program regulating “new or modified
major stationary sources” of air pollution. The EPA regulation promulgated to implement this permit
requirement allowed a state to adopt a plant-wide definition of the term “stationary source,” as opposed to a
definition that identified a “stationary source” as a single smokestack. Environmental groups challenged this
definition as an unreasonable construction of the term “stationary source.”
b. Held: the EPA’s definition of the term “source” is a permissible construction of the statute. Neither the
statutory language nor the legislative history of the statute provided guidance on what Congress intended for
the definition to be. Therefore, deference should be given to agency’s interpretation.
4.
Reasons for deferring to agencies:
a. Agencies are experts in the field, as opposed to judges
b. An agency to which Congress has delegated policymaking responsibilities may properly rely upon the
incumbent administration’s views of wife policy to inform its judgments, whereas judges are not supposed to
use their personal policy preferences to guide their review of agency action
c. Agencies are accountable to the people through the Chief Executive, and it is appropriate for these agencies
within the executive branch to make such policy choices
22
Examples of Step One Analysis under Chevron
Example of Step Two Analysis under Chevron
MCI Telecommunications Corp. v American Telephone &
Telegraph Co. (US 1994) In applying first step of the
Chevron analysis, the court may look to dictionary
definitions to determine if the statute is ambiguous on
its face.
Facts: FCC had interpreted the word “modify” in its enabling
statute to exempt a large category of communications
providers from the duty to file rates charged for
communication services with the Commission, which those
communications providers had traditionally been required
to do. This interpretation was challenged by AT&T as
beyond the scope of its authority.
Held: The term “modify” does not permit the FCC to exempt
nondominant carriers from filing its rates with the FCC. In
reviewing dictionary definitions of the term “modify,” the
court finds that the dominant definition is “to make minor
changes.” The FCC’s action was not a minor change because
it eliminated a crucial provision of the statute for 40% of a
major sector of the industry.
Dissent: Rather than look to the dictionary definition of the
term “modify,” the dissent looks to whether the exemption
is consistent with the purpose of the act, which is to ensure
that carriers do not charge unreasonable or discriminatory
rates. In doing so, the dissent chooses to employ a different
method of statutory interpretation than does the majority.
Babbit v. Sweet Home Chapter of Communities for a Great
Oregon (US 1995) In determining with the agency has
reached a permissible construction of the statute, the
court relies on the ordinary meaning of the word or
phrase at issue, the broad purpose of the enabling act,
statutory provisions that would be rendered ineffectual
should the word be interpreted otherwise, and the
policy behind deference to agency interpretation where
the statute is ambiguous.
Facts: In interpreting the word “harm” in the Endangered
Species Act, the Secretary of the Interior issued a regulation
defining the phrase as including “significant habitat
modification or degradation where it actually kills or injures
wildlife by significantly impairing essential behavioral
patterns, including breeding, feeding, or sheltering.” A
group of landowners and loggers brought a declaratory
judgment action asking for a declaration that the Secretary’s
regulation was inconsistent with the Act. According to the
plaintiffs, “harm” required direct applications of force
against protected species.
Held: There is a plausible realm of interpretations of the
phrase, and the Secretary’s interpretation is one that fits
within that realm. In so concluding, the court looked to (1)
the ordinary meaning of the word as provided in the
dictionary, (2) the broad purpose of the ESA to protect
endangered species, (3) the Congressionally authorized
issuance of permits for takings that would otherwise
prohibit takings that had incidental harms, and (4) the
general reasons for deferring to a plausible reading of the
statute by an agency, including its expertise in the area, the
decision by Congress to delegate its administrative powers,
and the complex policy choices involved.
Dissent: The plain meaning of “harm” cannot include
various economic activities that would alter the
environment of the spotted owl and woodpecker. Scalia
relies on two principles of statutory interpretation not
employed by the majority: (1) he implies the common law
definition into the statute and (2) he looks at other words
that constitute “take” and determines whether “harm”
conforms with the general conception of the term.
Food and Drug Administration v Brown & Williamson
Tobacco Corp. (US 2000) Whether Congress has directly
addressed the interpretation of a statutory term must
be guided to a degree by common sense as to the
manner in which Congress is likely to delegate a policy
decision of such economic and political magnitude to an
administrative agency.
Facts: FDA issued a rule designed to prevent the marketing
of tobacco products to young people. To do so, the FDA
claimed that it had legal authority to regulate tobacco
products because nicotine was a “drug” and cigarettes were
“drug delivery devices” as those terms are used in the FDCA.
The tobacco industry challenged the rules on the grounds
that the structure and history of the FDCA precluded an
interpretation that it authorized the FDA to regulate tobacco
products.
23
Held: Congress intended to exclude nicotine and cigarettes
from the jurisdiction of the FDA. Court reached this
conclusion based on three reasons: (1) It looked to
congressional policy drawn from other pieces of legislation.
These other pieces of legislation focus on the importance of
the tobacco industry to the American economy and
specifically address the regulation of tobacco without
actually banning it; (2) The FDA had previously rejected
authority to regulate tobacco. Congress likely incorporated
this commonly understood limitation on jurisdiction into
the statutory meaning of the FDCA; (3) The regulation of
tobacco presents an extraordinary case in that the tobacco
industry constitutes a significant portion of the American
economy and has a unique place in American history and
society.
Massachusetts v. Environmental Protection Agency (US
2007) In determining whether the statute is ambiguous
on its face, the court looks to the plain language of the
statutory text.
Facts: Massachusetts petitioned the EPA requesting that it
regulate carbon dioxide emissions from automobiles under
the mobile source provisions of the Clean Air Act. The EPA
denied this petition on the basis that greenhouse gases, such
as carbon dioxide, cannot be “air pollutants” within the
meaning of the Act, and therefore the EPA did not have
jurisdiction to regulate in that area.
Held: EPA does have jurisdiction to regulate greenhouse
gases. In so deciding, the Court looked to the plain language
of the Act, in particular the definitions section of the Act and
the general grant of authority therein. The Court finds that
the EPA is directed to promote standards whenever there is
an air pollutant emitted by vehicles that contributes to air
pollution, and air pollutant is defined as anything that is a
physical or chemical substance that is emitted into or
otherwise enters the ambient air. Based on this language,
the Court concludes, Congress has quite specifically directed
the EPA to take action under these circumstances. In
distinguishing Brown & Williamson, the Court said that in
the area of tobacco regulation, the legislative history
indicated that cigarettes and tobacco were not within the
FDA’s purview. The legislative history surrounding the
Clean Air Act and the EPA’s regulation of greenhouse gases
did no such thing.
Dissent: Scalia maintains that the statute is ambiguous
under step one, and that under step two the agency came to
a reasonable interpretation in concluding that air pollution
is only that which affects the air that people breathe, not the
air circulating in the upper reaches of the atmosphere.
24
7. Availability of Judicial Review
a.
b.
c.
d.
Justiciability Doctrines
i. Reviewability: what can be reviewed by courts
ii. Ripeness/final agency action/exhaustion of administrative remedies: When can review be
sought
iii. Standing: who can seek review
Rationale behind requirements of justiciability
i. Noble purpose for excluding litigants has to do with consideration to balance of powers b/w
Articles I, II, and III and the power of administrative agencies. This is a legitimate reason for
essentially barring the courthouse.
ii. Ignoble rationale has to do with the reluctance on the part of courts to actually decide politically
controversial cases. Courts are the least dangerous branch because they have very few tools to
enforce their judgments if they go contrary to the will of the elected branches. Court’s power rests
a lot on their ability to claim they are acting in a legitimate fashion. There are instances in which
they won’t tread into controversial actions. So justiciability is a way for them to punt.
Final agency action
i. When informal agency action has effect of granting or denying permission to take a requested
course of action, court might consider it as final agency action.
ii. If agency answers request for action with a firm statement that it has decided not to act, that
decision can be a final agency action subject to judicial review.
iii. However, if an agency has not answered a request for action or has explained its inaction as delay
for further study of whether action is appropriate, inaction may not be final agency action subject
to judicial review.
Reviewability: Statutory Preclusion
i. APA § 701(a)(1) provides that the chapter of the APA dealing with judicial review does not apply
“to the extent” that statutes preclude judicial review
ii. Why would Congress want to bar review of administrative agency decision?
1. Expertise of the agency. The agency is more aware than an Article III court is of the
problems experienced by the agency’s constituency.
2. Judicial economy. By barring judicial review, Congress preserves judicial resources.
3. Agency efficiency. If courts are afforded the power of judicial review, then the agency
will have to devote its resources to litigating its decisions in court rather than devoting
its resources to managing the administration of the agency.
iii. Johnson v. Robison (US 1974) General presumption of reviewability can be overcome if
Congress, in the agency’s enabling statute, intended to bar judicial review.
1. Facts: The administrator of the Department of Veterans denied a claim by Robison, a
conscientious object during the war in Vietnam, for educational assistance benefits under
the Veterans’ Readjustment Act of 1966. The administrator denied the claim because
Robison had served only two years of alternative service and had not fulfilled the
statutory requirement of “active duty.” Robison then filed suit in district court attacking
the constitutionality of the active duty requirement. He claimed the provision violated his
rights to equal protection of the law guaranteed by the Fifth Amendment and to religious
freedom guaranteed by the First Amendment.
2. Held: The Supreme Court said that the court does have jurisdiction to consider Robison’s
constitutional claims. In coming to this conclusion, the court based its decision on a few
factors:
a. The court found that the language of § 211(a) of the Veterans’ Administration
Act prohibiting judicial review appeared to be aimed at review only of those
decisions of law or fact that arise in the administration by the Veterans’
Administration of a statute providing benefits for veterans. Robison’s
constitutional challenge was not to any decision of the Administrator, but rather
to a decision of Congress to create a statutory class entitled to benefits that did
not include conscientious objectors who performed alternative civil service.
b. The Board of Veterans’ Appeals had previously disclaimed authority to decide
constitutional questions in other cases. When faced with a problem of statutory
construction, the Court shows great deference to the interpretation given the
statute by the officers or agency charged with its administration. Therefore, the
25
e.
Court deferred to the agency’s ruling that it did not have jurisdiction to consider
whether § 211(a) is constitutional. However, if Article III courts were also barred
from reviewing the constitutionality of the provision, then Congress’ power
would go unchecked.
c. The legislative history surrounding the amendment of § 211(a) did not
demonstrate a congressional intention to bar judicial review of constitutional
questions. Congress had two primary purposes in enacting the no-review clause:
(1) to insure that veterans’ benefits claims would not burden the courts and the
Veterans’ Administration with expensive and time-consuming litigation, and (2)
to insure that the technical and complex determinations and applications of
Veterans’ Administration policy connected with veterans’ benefits decisions
would be adequately and uniformly made. Constitutional challenges would not
contravene the purposes of the no-review clause because they could not be
expected to burden the courts by their volume nor do they involve technical
considerations of Veterans’ Administration policy.
iv. Gott v. Walters (DC Cir 1985) A question of law or fact that has been decided by the agency
and made in the course of applying the agency’s enabling statute may be statutorily
precluded from judicial review.
1. Facts: the DC Circuit considered a procedural challenge to the Veterans’ Administration’s
handling of veterans’ claims relating to illnesses allegedly caused by exposure to
radiation after the bombing of Hiroshima and Nagasaki, Japan, and after aboveground
tests of atomic weapons in the United States. To succeed on a claim for benefits, a veteran
must establish that the illness was “contracted in the line of duty.” After a congressional
investigation of the VA’s handling of these claims, the VA and the Department of Defense
issued a “VA Radiation Program Guide” and a document entitled “VA Radiation Claims
Procedures.” Veterans and others brought suit claiming that the VA and DOD violated the
APA by adopting these documents without employing APA notice and comment
procedures and without publishing them in the Federal Register.
2. Held: § 211(a) of the Veterans’ Administration Act precluded review. If the court reviews
agency decisions that have been made in the course of applying the veterans’ benefit
statutes, then Congress’s purpose of keeping the courts out of the day-to-day decisionmaking of the VA would be frustrated. If a court ordered the VA not to apply the Program
Guide or Procedures without promulgating them according to APA procedures, then the
courts would have to monitor individual VA decisions to make sure that its order was
being followed.
Reviewability: Committed to Agency Discretion
i. APA § 701(a)(2) excludes agency action from judicial review “to the extent” that the agency action
is “committed to agency discretion by law”
ii. Citizens to Preserve Overton Park v. Volpe (US 1971) General presumption of reviewability
may be overcome if there is no law to apply in the agency’s statute. Here, there was law to
apply.
1. Facts: Two federal statutes prohibited the Secretary of Transportation from using federal
funds to finance construction of highways through public parks if a “feasible and
prudent” alternative existed. When the Secretary approved funds for a highway through
Overton Park in Memphis, his action was challenged. He claimed that the action was not
judicially reviewable because it was committed to his discretion.
2. Held: The Supreme Court disagreed with the Secretary, saying that “this is a very narrow
exception,” which applies “in those rare instances where ‘statutes are drawn in such
broad terms that in a given case there is no law to apply.’” Here, the Secretary was
governed by a statutory requirement – that the Secretary could not build the highway if a
“feasible and prudent” alternative existed – that plainly provided “law to apply.” “Feasible
and prudent” alternatives referred to any alternatives that would be physically possible
and eliminate harm to the park.
iii. Webster v. Doe (US 1988) Agency actions falling within the domain of national security are
likely to be found unreviewable by courts under the theory that there is “no law to apply.”
Constitutional claims, however, are reviewable.
1. Facts: The plaintiff challenged the Director of the CIA’s ability to fire him because he was
a homosexual. The Director contended that the National Security Act, which permitted
the Director to “terminate the employment of any officer or employee of the Agency
26
f.
whenever he shall deem such termination necessary or advisable in the interests of the
United States,” allowed him to fire employees for their sexual orientation. The plaintiff
challenged the agency action on the basis that it was arbitrary and capricious in violation
of APA § 706, it was an abuse of discretion, and was reached without observing the
procedures required by law and CIA regulations. He also complained that the Director’s
termination of his employment deprived him of constitutionally protected rights to
property, liberty, and privacy in violation of the First, Fourth, Fifth, and Ninth
Amendments. Lastly, he asserted that his dismissal transgressed the procedural due
process and equal protection of the laws guaranteed by the Fifth Amendment.
2. Held: Though the administrative law claims were barred from judicial review, the court
could hear the plaintiff’s constitutional claims.
a. With regard to the administrative law claims, the court denied judicial review
due to concerns that judicial review would require the CIA to expose intelligence
information, which would ultimately be harmful to national safety. The court
based this finding on statutory construction of the National Security Act.
b. With regard to the constitutional claims, the Court found nothing in the National
Security Act to suggest that Congress meant to preclude consideration of
constitutional claims arising out of the actions of the Director in his firing
determinations. Where the intent of Congress to preclude judicial review of
constitutional claims is not clear, the court has the power of review. The power
to review constitutional claims is important in ensuring that Congress has not
granted agencies discretion to violate the Constitution.
Reviewability: Decisions Not to Act
i. APA § 555(e): “Prompt notice shall be given of the denial in whole or in part of a written
application, petition, or other request of an interested person made in connection with any
agency proceeding . . . [T]he notice shall be accompanied by a brief statement of the grounds for
denial.”
ii. Review of Agency Decision Not to Prosecute/Enforce (reviewed on arbitrary & capricious
basis)
General presumption is that agency decision not to enforce is unreviewable. However, that presumption may be overcome
if the substantive statute has provided guidelines for the agency to follow in exercising its enforcement powers.
Presumption has been overcome
Dunlop v. Bachowski (US 1975):
The statutory language of the National Labor Relations Act
indicated that the Secretary of Labor had to bring an
enforcement action when he found probable cause to
believe that a violation of the NLRA had occurred and had
not been remedied.
1.
Presumption has not been overcome
Heckler v. Chaney (US 1985):
The statutory language of the Food, Drug, and Cosmetics Act
indicated that the Secretary was authorized to conduct
examinations and investigations; the statute gave no
indication of when an injunction should be sought; and the
provision providing for seizures of offending foods, drugs,
and cosmetics was framed in the permissive.
Dunlop v. Bachowski (US 1975) In the case of agency inaction, the Secretary must
provide an explanation for his failure to act. If the explanation is not arbitrary and
capricious, then the reviewing court should uphold the Secretary’s decision not to
act.
a. Facts: The Secretary of Labor decided not to pursue a civil action to set aside a
United Steelworkers of America district election despite the allegations by a
defeated candidate, Bachowski, that some members were not informed of the
election, that some locals failed to hold the election at all, and that in some locals
the secrecy of the ballots had been compromised. The Secretary decided not to
file a civil action on the basis that Bachowski would have lost even if these
wrongs had not occurred. Bachowski then filed an action in federal court seeking
an order compelling the Secretary to file suit to set aside the election,
complaining that the Secretary’s actions were arbitrary and capricious.
27
b.
2.
3.
4.
Held: The Supreme Court said that, based on the statute’s mandatory language
(that the Secretary must bring a civil action against a labor organization to set
aside the invalid election should he find probable cause to believe that a
violation has occurred and has not been remedied), Bachowski was entitled to
judicial review of the Secretary’s decision not to bring suit. In reviewing the
Secretary’s decision, the Court held, the district court should not conduct a wideranging factual inquiry into the propriety of the Secretary’s decision. Rather, the
district court should order the Secretary to provide a statement of reasons for
the decision not to bring suit and should base its review only on that statement.
The court should reject the Secretary’s decision only if the statement “evinces
that the Secretary’s decision is so irrational as to constitute the decision
arbitrary and capricious.”
How is arbitrary & capricious standard of review in the case of inaction different from
arbitrary & capricious standard of review in the case of agency action?
a. In the case of agency action, the court reviews the whole record.
b. In the case of agency inaction, the court reviews only the statement given by the
Secretary explaining his failure to act.
Heckler v. Chaney (US 1985) The general presumption that the agency’s decision not
to enforce is unreviewable may be overcome if the substantive statute has
provided guidelines for the agency to following in exercising its enforcement
powers. Here, the presumption of unreviewability was not overcome.
a. Facts: The plaintiffs had been sentenced to death by lethal injection. Plaintiffs
first petitioned the FDA, claiming that the drugs used by the States of Oklahoma
and Texas for the purpose of lethal injunction, although approved by the FDA for
the medical purposes stated on their labels, were not approved for use in human
executions. Because they were not so approved, the use of these drugs in human
execution constituted a violation of the FDCA’s prohibitions against
“misbranding.” They also argued that the FDCA’s requirements for approval of
“new drugs” applied, since these drugs were now being used for a new purpose.
b. Held: There is a presumption of unreviewability of agency’s decisions not to act.
That presumption can be overcome where the agency’s decision not to act is not
discretionary. However, where the agency’s decision to act is discretionary, the
presumption of unreviewability cannot be overcome.
i. Here, the presumption was not overcome because the language of the
FDCA allows for a lot of discretion with regard to bringing an
enforcement action. Specifically, the FDCA provides that “[t]he Secretary
is authorized to conduct examinations and investigations,” and the
provisions for seizure of offending foods, drugs, or cosmetics is similarly
framed in the permissive.
ii. The policy statement made the FDA Commissioner reflecting on the
scope of FDA jurisdiction over the unapproved use of approved drugs
for human execution, relied on by the Court of Appeals as a statement of
law cabining the agency’s discretion, was held by the Supreme Court to
not overcome the discretion granted to the agency by its enabling
statute.
Why are agency decisions not to enforce presumptively unreviewable? (Heckler v.
Chaney)
a. An agency decision not to enforce often involves a complicated balancing of a
number of factors which are peculiarly within its expertise. The agency must not
only assess whether a violation has occurred, but whether agency resources are
best spent on this violation or another, whether the agency is likely to succeed if
it acts, whether the particular enforcement action requested best fits the
agency’s overall policies, and indeed, whether the agency has enough resources
to undertake the action at all. The agency is far better equipped than the courts
to deal with the many variables involved in the proper ordering of its priorities.
b. When an agency refuses to act it generally does not exercise its coercive power
over an individual’s liberty or property rights, and thus does not infringe upon
areas that courts often are called upon to protect.
28
c.
An agency’s refusal to institute proceedings shares the characteristics of the
decision of a prosecutor in the Executive Branch not to indict, which is a decision
that has long been relegated to the special province of the Executive branch
inasmuch as it is the executive who is charged by the Constitution to take care
that the laws be faithfully executed.
iii. Review of Agency Decision Not to Engage in Rulemaking (reviewed on an arbitrary & capricious
basis)
1. Massachusetts v. Environmental Protection Agency (US 2007) Agency’s denial of
rulemaking petitions are not presumptively unreviewable. When an agency denies
a petition for rulemaking, it must be prepared to explain its decision not to engage
in rulemaking. Otherwise, its inaction will be held to be arbitrary and capricious.
a. Facts: A group of 19 private organizations filed a rulemaking petition asking
EPA to regulate greenhouse gas emissions from new motor vehicles under § 202
of the Clean Air Act. EPA denied the rulemaking petition on the basis that: (1) the
Clean Air Act does not authorize EPA to issue mandatory regulations to address
global climate change, and (2) that even if the agency had the authority to set
greenhouse gas emissions standards, it would have been unwise to do so at the
time. It would be unwise to do so, the EPA explained, due to the equivocal link
between greenhouse gases and human activities. Furthermore, EPA regulation
would conflict with the President’s comprehensive approach to reducing the
impact of motor vehicle emissions. The private organizations sought review of
the EPA’s decision not to engage in rulemaking in federal court.
b. Held: The Supreme Court reviewed the agency’s denial of a petition for
rulemaking on an arbitrary and capricious basis. In its analysis, the court found
that, under the clear terms of the Clean Air Act, the EPA can deny the petition for
rulemaking only if it determined that greenhouse gases do not contribute to
climate change or if it provided some reasonable explanation as to why it cannot
or would not exercise its discretion to determine whether they did. Because the
EPA offered no reasoned explanation for its refusal to decide whether
greenhouse gases cause or contribute to climate change, its action was arbitrary
and capricious.
iv. Why are agency decisions not to prosecute presumptively unreviewable while agency decisions
not to engage in rulemaking not presumptively unreviewable?
1. Volume of the decision-making in the enforcement context vs. RM context. The decision
making on enforcement is much more voluminous, so any interference by the courts is
considered to be more burdensome on the agency.
2. The nature of the determination that’s being made when an agency is deciding not to
enforce vs. when agency is deciding not to engage in RM. Agency decision not to engage in
RM is based on considerations of law and policy. Agency decision not to enforce is based
on facts. A court is considered to be less expert on the facts than it is on the law. Given
that enforcement determinations entail assessment of probability of success, court is less
willing to intervene.
3. Petitions for RM are generally followed by fairly extensive agency reasons as to why not to
engage in RM. In the RM context, the agency has engaged in a far more considered
exercise about whether or not to use its authority and expertise in a particular area. In
the enforcement context, even though agencies do have a duty to respond to petitions to
enforce the act (according to 555(e) of the APA), the decision tends to be extremely
cursory. It’s much less fleshed out so it’s harder for court to come in and review that
decision to not go ahead.
g.
Ripeness
i. A party’s claim is ripe for review when (1) the legal issues are fit for judicial resolution and (2)
withholding judicial consideration would cause hardship to the parties. Abbott Laboratories v.
Gardner (US 1967).
29
h.
Standing
i. History
1. Before enactment of the APA, a plaintiff had to prove that he satisfied the elements for a
writ of action against the government or that he satisfied the elements for a common law
claim
2. The APA revamped the system; it made actions against the government presumptively
reviewable – “democratic revolution”
ii. Note: still need to meet constitutional standing requirements despite citizens’ suit provision
(authorizes private parties to sue other private parties or government officials for violating
statutes and regulations)
iii. Standing test from Association of Data Processing Service Organizations, Inc. v. Camp (US 1970):
1. To establish standing to challenge government action, the plaintiff must meet: (1)
constitutional standing requirements, and (2) prudential standing requirements.
a. The constitutional standing requirements: injury, causation, redressability
i. Constitutional standing requirements cannot be overridden by statute.
b. The prudential standing requirements
i. Prudential standing requirements can be overridden by statute
ii. Prudential standing requirements are loosely based on the statutory
language of APA § 702: “A person suffering legal wrong because of
agency action, or adversely affected or aggrieved by agency action
within the meaning of a relevant statute, is entitled to judicial review
thereof.”
iii. But the prudential standing requirements are more basically
requirements that the court has evolved in its discretion to assure that
cases decided by courts are most appropriately decided by courts. So
court takes into consideration judicial economy, separation of powers,
etc.
1. So, for example, one of the prudential standing limitations is
that if an injury is suffered equally by all, then courts are not the
appropriate forum to redress the injury. Rather the political
branches are the more appropriate institutions.
iv. Prudential Standing
1. For a plaintiff to have prudential standing, he must pass the “zone of interests” test.
a. Zone of interest test = “Whether the interest sought to be protected by the
complainant is arguably within the zone of interests to be protected or regulated
by the statute or constitutional guarantee in question.” ADAPSO.
i. The test requires that a person who brings a case must be within the
zone of interests of the statute that the person claims is violated. You
have to look at who/what interests did Congress mean to protect.
b. It’s a very permissive test.
Example of plaintiffs being within “zone of interest”
Association of Data Processing Service Organizations, Inc. v.
Camp (US 1970)
Facts: Suit was brought against the Comptroller of the
Currency by companies that performance data processing
services for other businesses. The Comptroller had ruled
that national banks could sell certain data processing
services to their customers and to other banks, thus
competing with the plaintiff companies. The plaintiffs
claimed they were in the zone of interest protected by the
Bank Service Corporation Act of 1962, which stated that,
“No bank service corporation may engage in any activity
other than the performance of bank services for banks.”
Example where plaintiffs are not in “zone of interest”
(this is the last time since 1991 that Supreme Court denied
standing based on zone of interests test)
Air Courier Conference of America v. American Postal
Workers Union (US 1991)
Facts: Postal workers’ unions tried to challenge the Postal
Service’s suspension of its monopoly over international
remailing services, under which international air mail is
bypassed by sending letters to foreign countries and
depositing them directly into the foreign postal systems.
Held: the union’s members lacked standing because statutes
granting the Postal Service’s monopoly and allowing the
Service to make exceptions to that monopoly were written
with the public interest in an efficient mail service, and not
the interests of postal workers, in mind.
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Held: The Supreme Court held that the Bank Service
Corporation Act gave the plaintiffs a “legal interest” that
protected them against violations of the Act, so the plaintiffs
had standing. The Court based this conclusion not only on
the language of the statute but also on its legislative history.
The legislative history of the statute suggested that Senators
were concerned about banks engaging in nonbanking
activities, and that therefore the statute could be read to
protect a whole host of interests. In applying the “zone of
interest” test, the Court was very permissive in that it only
required a plausible explanation for how the statute runs to
the benefit of various categories.
v. Constitutional Standing
1. Three parts:
a. Injury-in-fact
i. An invasion of a legally-protected interest which is (a) concrete and
particularized (meaning that the injury must affect the plaintiff in a
personal and individual way) and (b) actual or imminent, not
conjectural or hypothetical. Lujan v. Defenders of Wildlife (US 1992).
b. Causation
i. There must be a causal connection between the injury and the conduct
complained of. The injury has to be fairly traceable to the challenged
action of the defendant, and not the result of the independent action of
some third party not before the court. Lujan v. Defenders of Wildlife (US
1992).
c. Redressability
i. It must be likely, as opposed to merely speculative, that the injury will
be redressed by a favorable decision. Lujan v. Defenders of Wildlife (US
1992).
2. Injury-in-Fact
a. Injury complained of must be actual or imminent.
i. Lujan v. Defenders of Wildlife (US 1992) Here, the injury was not
actual or imminent.
1. Facts: The plaintiffs challenged a rule promulgated by the
Secretary of the Interior interpreting § 7 of the Endangered
Species Act of 1973 in such fashion as to render it applicable
only to actions within the United States and not to actions in
foreign countries. The plaintiffs attempted to establish their
injury by claiming that the ESA rule’s failure to protect
endangered species in foreign countries would limit their ability
to observe those endangered species in the future.
2. Held: The plaintiffs have not shown injury. The plaintiffs injury
is not actual or imminent in the sense that they do not have
plans to travel to the countries where the animals they are
concerned about might go instinct.
b. Procedural violation by itself does not satisfy constitutional standing’s
injury requirement.
i. Lujan v. Defenders of Wildlife (US 1992)
1. Facts: The plaintiff, Defenders of Wildlife, argued that the
statutory requirement for inter-agency coordination created a
procedural right to such coordination in the public enforceable
by any person.
2. Held: The Court rejected this argument, perceiving it as
showing nothing more than a generalized grievance with an
alleged agency failure to comply with the law. Allowing the
plaintiffs standing based on a procedural violation argument
would violate separation of powers in that the appropriate
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forum to ensure the functionality of government is the
executive and legislative branches.
3.
Redressability
a. Lujan v. Defenders of Wildlife (US 1992) example of where plaintiffs have
failed to establish redressability
i. Facts: The plaintiffs sought a declaratory judgment that the new
regulation requiring consultation only for actions taken in the United
States was in error and an injunction requiring the Secretary of the
Interior to promulgate a new regulation restoring his initial
interpretation – that the obligations imposed by the Endangered Species
Act extend to actions taken in foreign countries.
ii. Held: The plaintiffs’ alleged injury would not be redressed by the relief
sought. Even if the Department of Interior promulgated a new
regulation restoring its initial interpretation, that regulation would not
be binding on agencies providing funding for foreign projects.
Furthermore, the money that US agencies give comprises only a small
portion of the total funding for these foreign projects. If that fraction of
funding were to be eliminated, the projects would probably still
continue and the species would probably still be harmed.
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