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Administrative Law

Segment One
Title

General tips for this class:

  1. Understand main opinion and dissents.
  2. Major cases: Londoner, VT & Yankee, Overton Park, Florida East Coast Railways, Chevron, Mead, Abbot Labs
  3. Read the APA, arrange the material in relation to the APA, whether it applies, and if so, how.
  4. Understand the historical progression of administrative law. Being able to arrange the general climate of the different time frames will help in understanding why the courts decided how they did at different times.
  5. Go to class. Exam was based on what he covers in class. Exam was closed book. Therefore, attendance, good class notes, and participation is key.

 

In the Beginning

Date

Regulatory Theory

Events

1700 – 1875

Strict separation of powers (Madison)

Classic period

1875 – 1932

 

Administrative Agencies Born

Interstate Commerce Commission

1932 – 1945

Enthusiasm for agencies (Landis, Eastman)

 

New Deal

1945 – 1962

Uneasy proponents (Frankfurter, Jackson)

Moderate Enthusiasm

 

APA

WWII

1962 – 1980

Capture Theory (Bernstein; Noll)

Criticism

Reform

1980 – Present

All branches can fail

Cost Benefits

Increased presidential involvement with agency action

 

Theories of Agency Behavior

  1. Madison: we enable government to control and oblige it to control itself
  2. Eastman: commissions are independent; politics should not matter once appointed
  3. Landis: men of professional attainment with government as a career; hope that these experts will make the best decisions
  4. Bernstein: agencies all well and good, but eventually they get stuck
  5. Noll: hard to battle agencies alone; over-responsive to the interests they are supposed to control
  6. Wilson: need more publicizing of the agency action; capture theory right for some agencies but not all; industry specific versus issue specific agencies

 

Responses to Capture theory

  1. Deregulation
  2. Increased transparency in agency actions

 

Separation of Powers

  1. Strict
    1. Formalist view
    2. 3 branches must stay separate
    3. Rationale
      1. Government should be small
      2. Laws should be general and prospective (fairness & equity)
      3. These beliefs only work with strict separation of power
    4. Judicial action is retroactive and specific, but limited power
      1. Juries
      2. Constitution constraint
      3. Statutory constraint
    5. Favor rules over standards or balancing tests
    6. Constitutional Argument
      1. No separation of power clause in Constitution
      2. Griswold “penumbras & emanations” allow broadening branches from the structural constraint of 3 branches defined by 3 articles
      3. Textual argument, vesting clauses

 

  1. Lenient
    1. Functionalist view
    2. Constitution is evolving
    3. Discretion allowed
    4. Constitutional Argument
      1. No hard and fast limits to power of the 3 branches
      2. Horse and buggy: not realistic to interpret in 1776 context
      3. Flexibility and efficiency
      4. Natural overlaps exist
      5. Necessary and Proper
      6. Vesting clauses more ceremonial/organizational

 

Separation of Powers v. Checks & Balances

  • C&B are exceptions to the separation of power for the benefit of preventing unchecked use of a power by one branch
  • C&B make sure no one branch has too much power
  • Functionalists concerned with C&Bs

 

Separation of Power Case Summary

Court’s Feelings

Situation

Cases

Okay

Congress encroaching on Executive Branch power, but not taking the power

Morrison, Humphrey’s Executor

Worries

Expanding Congressional power

Buckley, Chadha, Bowsher, Myers

Okay

Expanding executive power

Mistretta

 

 

 

Agencies and Article I

Up to the New Deal, real limits on policy making decisions Congress can delegate. Congress had a limited ability to delegate. (see Panama; Schecter)

After the New Deal, court gives up trying to limit Congress’ delegation abilities. Congress can pretty much delegate anything to the administrative agencies. (see Mistretta; American Trucking)

 

Panama v. Ryan

  • Hot oil case
  • Agency had to decide whether to adopt the state’s rule for interstate oil shipments
  • Court struck down delegation as too broad; no guidance to the President in deciding

 

Schecter Poultry v. US

  • Sick Chicken
  • Agency empowered to set up codes of fair competition for all industries
  • Despite a weak policy statement at the head of the authorizing statute, the Court struck down delegation as too much power/discretion granted to the President
  • Last time a delegation gets struck down as too broad

 

Mistretta

  • Modern thought on delegation
  • Sentencing guideline delegation
  • Court found delegation appropriate because Congress provided some “intelligible principle” to guide the decision process (i.e., range of topics, scheme to use, starting point for sentences, factors)

 

American Trucking v. EPA

- Delegation of power to set clean air standards “to protect public health” to EPA was held to be proper

 

 

Agencies and Article II - Appointments

 

The Appointments Clause

  • Appointment power shared by the President and the Senate
    • Congress defines the office
    • President appoints officer
    • Senate approves appointee
  • Appointment of inferior officers may be delegated to
    • President
    • Courts
    • Heads of departments

 

Buckley v. Valeo

  • Appointment scheme
    • 2 by President, 2 by House, 2 by Senate
    • All must be confirmed by both houses of Congress
    • Congress trying a power grab
  • Two issues
    • House and Senate given appointment power
    • Both houses required for confirmation
  • Reading appointments strictly, this is unconstitutional
  • Necessary and Proper Argument
    • Congress argued regulation of elections is within Congress’ powers
    • Necessary and proper allows Congress to enact means to regulate
    • Court: Necessary and Proper alright except when it violates the Constitution
    • MR: Is this consistent with Mistretta?
  • Etiquette Argument
    • Appointments Clause is just protocol
    • Would render the clause meaningless and yield an odd result
  • Superior Officer Defined
    • Whether the person exercises significant authority pursuant to the law
    • Affects the legal rights and duties of a person
    • Here, we are dealing with a superior office, thus subject to the Appointments Clause

 

Morrison v. Olson (1988)

  • Is the appointment of independent counsel by the courts a valid delegation?
  • Appointments Clause allows delegation to the courts only if the officer is inferior.
  • Factors Considered
    • Subject to removal by higher authority
    • Limited duties
    • Limited jurisdiction
    • Limited tenure
  • Scalia dissents
    • All factors point to defining superior
    • His test would be whether the officer has final authority, if so then superior
    • This is not the only factor, but a necessary factor

 

Edmond v. US (1997)

  • Silent reversal of Morrison by Scalia
  • CGCA judges appointed by DoT head; are they inferior officers?
    • JAG can remove
    • Court of Appeals for Armed Forces can overturn decisions
    • Thus, inferior
  • Ignores Morrison’s logic; dissent thinks should look to other powers given to the office in determining if inferior

 

 

Agencies and Article II – Direction & Removal

 

Relatively silent about limits on President’s ability to direct agency action.

 

Competing Points of View

  • Unitary Executive (Formalist)
    • Strict separation of powers
    • Myers is a formalist case
    • Without ability to remove, the executive cannot perform executive functions
    • Based on Article II § 1(1) Vesting clause putting all power in President and agency officers are helpers of the President
    • President can remove agency officer
  • Congressional Discretion
    • Vesting Clause is merely setting up organizational structure
    • President has limited powers
      • Article II powers granted
      • Powers delegated by Congress
    • Article II also includes the Take Care clause which forces President to enforce laws even if it is against himself or his officers
    • President cannot remove agency officer unless permitted by organic statute

 

Myers v. US

  • Failing argument: Advice and Consent required to appoint, why not to remove as well?
  • Winning Arguments
    • President needs way to enforce and direct power, thus needs removal power
    • Vesting Clause gives President all traditional executive powers; traditionally, executives have the power of removal

 

Humphrey’s Executor v. US

  • Independent agency head was removed because his views didn’t match the president’s
  • Court held the removal restriction of an independent agency officer valid
  • Distinguished
    • Executive Officers
      • Removable at pleasure of president
    • Quasi-judicial and Quasi-legislative Officers
      • Removable only for cause per statute
  • Under Myers, this removal would be alright

 

 

Morrison v. Olson

  • Independent Council Removal
  • Overruled prior cases and focuses on the officer’s function and whether limiting removal will “unduly trammel on executive authority”

 

Executive Order 12866

  • Presidential attempt to control what the agencies are doing
  • Requires agencies to
    • Define major objectives
    • Review existing regulations
    • Submit new regulations for centralized review (OMB)
    • VP has power to resolve conflicts between OMB and agency
      • Ideally, President would win because unitary executive
      • Factually, the agency should win; President limited to removal as remedy for disagreement
    • Cost benefit analysis
  • Limited application to independent agencies
  • Does not trump statutory requirements
  • No judicial review under this Executive Order

 

Cost Benefit Analysis

  • If benefits greater than costs, go for it!
  • Figure out cost by monetizing life value per risk by looking at wage premiums
    • How much do people get paid to assume a riskier job?
  • Criticisms
    • Discretion is very subjective
    • Value of life calculation assumes informed decision
    • As compared to what?
    • Ignores the future

 

Chadha v. INS

  • Supreme Court found unconstitutional a statute in which Congress tried to reserve power to veto DOJ decision to deport

 

Bowsher v. Synar

  • Supreme Court found unconstitutional a provision allowing Congress to remove the Comptroller as well as delegating him the authority to make budget cutting decisions
  • Did not respect the separation of powers because Congress essentially had control over an executor of the laws

 

 

Procedural Limits on Agency Action

Key is to focus on what action the agency is taking.  Is it a rule making (prospective and general?  Is it an adjudication (retrospective and particular)?

 

Generally: Less hearings for rule making than adjudications because:

  1. Bimetallic and Londoner
  2. Classical theory says general and prospective not as dangerous as individual and retrospective
  3. Rule making relies on general, legislative facts.  Adjudications rely on particular, adjudicatory facts. Under appeal, the general facts an agency uses during a rule making are easier to reconstruct than the particular facts adjudication uses to reach its decision.

 

Londoner v. Denver

  • Tax for road repairs applied differently across residents
  • Two Issues
    • Spending
      • The decision to repair the road was acceptable because it does not raise any Due Process worries.
      • Spending decisions are discretionary and don’t need procedural checks
    • Taxation
      • Taxes assessed after private meeting
      • Because property was taken without process, we have Due Process claim
      • Does not have to be formal process, but at minimum needed
        • Notice
        • Chance to present arguments at a public hearing
  • Had legislature assessed the tax à no hearing needed
  • Had court assessed the tax à full hearing
  • An agency assesses the tax à Something in between needed “Londoner Hearing”

 

Bimetallic

  • Property is being deprived, thus we have a Due Process claim
  • However, because the tax is generally applied, nothing is required
  • Londoner Hearings appropriate only where limited set of people are impacted
  • Let the democratic process work it’s magic where large number of people are impacted

 

Yesler v. Cisneros (9th Circuit)

  • Eviction without grievance hearings allowed if state court eviction procedures satisfy Due Process
  • HUD claims it was an adjudication
  • Plaintiff says it was a rule making
  • Court held this was a rule and because the agency did not follow notice and comment procedure in promulgating the rule, the rule is invalid

 

 

 

 

 

 

 

 

 

 

 

Formal

Informal

Rule Making

Doesn’t really exist

Organic Statute (e.g., “made on the record”, “after agency hearing”)

§§ 556, 557

 

See Seacoast

 

§ 553

 

See Bimetallic, FL East Coast Railroad, City of West

 

Adjudication

§§ 554, 556, 557

Organic Statute

APA Silent

Maybe § 555 (?)

 

See Londoner

 

 

Florida East Coast Railroad

  • Railway car rental rate setting
  • Was a “formal hearing” required on the final rule where the organic statute provided for rule making “after hearing”?
  • In 1917, this organic statutory language would have required a formal hearing
  • Under modern view, “after hearing” interpreted differently depending on the agency action
    • Rule making: informal
    • Adjudication: formal
  • This is an example of why there is so much informal rule making today
  • Formal rule making can only be established by clear language in the organic statute indicating rules made
    • After a hearing
    • On the record

 

 

Consider also the change in the type of rules agencies promulgated.  In the early years, they were working mostly on rate regulations.  Because of the strong Due Process considerations, these rule makings required hearings that are more formal.  As time went on, agency rules were more general, focusing on the environment and safety.  These types of general rules require hearings that are more informal.

 

Seacoast (1st Cir., 1978)

  • Polluter exemption challenged
  • Found the statute required full formal hearing under § 556(e)
  • § 556(e) violated because the final ruling was based on a report published after the formal hearing and not subjected to a subsequent hearing

 

Chemical Waste v. EPA (DC Cir., 1989)

  • Statute allowed EPA to
    • Apply civil penalties and grant licenses
    • Permit interim operating licenses
    • Issue corrective action notices to polluters
  • Statute said all required “public hearings” were required but did not define it
  • Agency interpreted it differently for each of the actions
  • Court applied Chevron test and found
    • Congress was ambiguous on what public hearing meant
    • The agency’s interpretation reasonable

 

DC Circuit Changes Procedures for Rulemaking

  • § 533 has three requirements
    • Notice of proposed rulemaking
    • Hearing
    • Statement of basis and purpose for final rule
  • Expanded to require
    • Underlying studies or data used in making the rule
    • Final rule must be a “logical outgrowth” of initial noticed rule
    • Statement of basis and purpose must include
      • Main issues identified
      • Responses to significant comments submitted
  • Vermont & Yankee draw APA requirements as a minimum

 

Vermont & Yankee [big deal case]

  • Procedure used by the NRC not enough
  • Supreme Court said the APA was all it needed and there was sufficient basis in administrative record for the Agency’s decision
  • Three readings of this rule
    • Narrow: In § 553 hearing cases, cannot require more than public comment required by the APA.
    • Broad: In § 553 cases, cannot require more than the APA sets forth.
    • Super Broad: The APA should be strictly construed in all cases.
  • Generally, this case stands for the proposition that no changes to hearing requirements set forth in the APA.

 

Consider § 553 Expansions

  • Notice and comment: expanded requirements, okay
  • Hearing: expanded requirements NOT OKAY
  • Statement of basis and purpose: expanded requirements, okay

 

Why expand Notice and Comment and Statement of basis and purpose, but not the hearing requirements under the APA?

  • § 553 uses “shall” for notice and statement, but not for hearing
  • Predictable rules for notice and statement; none for hearing
  • Paper hearing faster than formal hearing helping agencies fulfill their policy role efficiently

 

CT Light and Power v. NRC

  • Fire prevention rules
  • Court bends over to find this okay
  • Breaking down procedural barriers to foster regulation

 

What makes for more regulation?

  • Increased process (early view; Landis)
  • Decreased process (modern view; ossification)

 

Statutory Hybrid Rulemaking

  • Clean Air Act as an example
  • By statute, incorporates expanded notice and comment procedures
  • Requires rule be made based on information in the administrative docket

 

Procedural Requirements for Informal Adjudication

APA is generally silent on informal adjudications.  Per VT & Yankee, the court cannot read in any requirements. The only source of requirements would be the organic statute or Constitutional considerations.

 

 

 

Overton Park v. Volpe

  • Agency decision to fund the building of a highway through a park
  • Lower Court
    • Statute allocated discretion to the agency
    • Not clear what, if any, judicial review was allowed
    • No procedures required (APA, statutory, or Constitutional)
  • Supreme Court
    • Statute does not allow for agency discretion
    • Judicial review is proper
    • Procedures for review material
      • Depose the agency officials
      • Administrative record
        • Legal fiction
        • What the agency had before it when it made its decision
  • As a result, more written findings produced by an agency for informal adjudications; they are not required under the APA but if the agency acts without one, it is likely the court will force the agency to come up with one.
  • Remanded the case for the agency to present their explanation for the decision

 

PBGC v. LTV

  • Overton Park is a narrow exception to Vermont & Yankee

 

 

 

Procedural Limits on Agency Action - Exceptions

Important because as agency requirements for rulemaking expand, agency’s try to couch their actions as falling into one of these exempted categories to skirt having more process imposed.

 

  1. § 553 (a)
    1. military
    2. foreign affairs
    3. benefits statutes
  2. § 553 (b)
    1. Interpretive rules (non-binding)
    2. General policy (non-binding)
    3. Rule of agency organization, process, or practice
    4. Emergency for good cause

 

Air Transport v. Dept. of Transportation

  • Majority does not examine rule as strictly procedural or strictly substantive
  • Majority looks at importance of the rule
    • Affects rights outside the agency à no exception
    • Internal agency organization and operations à exception
  • Reads the § 553 exceptions narrowly, and together, so as to only capture those things that the agency needs to do to work efficiently.
  • Dissent believes in strict application of the APA, per Vermont & Yankee; should determine what is procedure and what is substance

 

Pacific Gas Analysis

 

Time 1

Time 2

Agency Must Prove

Chevron deference

Adjudication

No action

Adjudication

- Historical use as a reasonable means for allocation?

- Violated historical use?

None, if not decided after a formal adjudication

Substantive Rule

- Rule promulgated

- Rule challenged and approved

- Historical use is reasonable

- Adjudication in the form of enforcement

- Violated historical use?

Yes, for rulemaking

Policy Statement

- Statement issued

Adjudication

- Historical use as a reasonable means for allocation?

- Violated historical use?

None, if not decided after a sformal adjudication

 

Policy Statements

  • Legal Effects
    • If has no legal effect then excepted from § 553 requirements
    • Allowed agencies to skirt § 553 by “threatening”
  • Substantial Impact Test
    • Didn’t last long because it expanded procedures beyond the APA requirements
    • This violated Vermont & Yankee
  • US Telephone v. FCC
    • If agency treats “policy statement” as binding, it ceases to be a policy statement and is subject to § 553 procedures
    • Weakens policy statements because
      • Less specific
      • Unlikely to be followed by those regulated by the agency

 

Interpretive Rules

  • Like policy statements
  • How to distinguish from regular rule
    • Agency invokes rulemaking authority
    • Policy amends or is inconsistent with prior rule
    • Published in the Federal Register
    • Legislative basis for the rule

 

 

 

Chenery I

  • SEC rejects re-organization plan which had insiders buying stock
  • SEC invoked equity principles in adjudication action denying re-organization
  • Supreme Court says SEC was wrong because
    • Equity doctrine applied incorrectly
    • Even if applied correctly, nothing in the record supports their conclusion

 

Chenery II

  • On remand, the SEC had 3 options
    • Issue an order with general justification
    • Issue an order with specific justification ß the one they choose
    • Promulgate a rule
  • District Court says wrong under their reading of Chenery I
  • Supreme Court says SEC not limited to rulemaking
  • Two Issues
    • Rulemaking v. Adjudication
      • Adjudication alright in this case because
        • Agency needs to deal with unforeseen problems
        • Leverage agency expertise
        • Problem so specialized a rule won’t work
    • Retroactive v. Prospective
      • Balancing test used to determine if retroactive application is alright
        • If mischief greater than ill effect of retroactive application of new standard then okay
      • Look to the statutory design and see if it includes agency discretion to enable it to response to dynamic situations within its expertise.
      • Factors
        • Case of first impression
        • Departure for established practices or fill void of unsettled law
        • Extent of reliance on former rule
        • Burden of retroactive application
        • Statutory interest in applying new rule
      • Critiques
        • Could be unfair
        • Could be open to agency abuse of discretion

 

Retroactivity Summary

  • Agency Adjudication: balancing test
  • Agency Rulemaking: not unless authorized by statute
  • Civil statute: retroactive okay w/in Due Process limits; presumption of prospectivity
  • Criminal statute: not allowed
  • Judicial decisions: unclear

 

 

Heckler v. Campbell

  • Disability determination for SS benefits
  • Agency published guidelines to help determine each case but statute provided for individualized determinations
  • Court allowed the guidelines because
    • Individuals could challenge the decision on their case
    • Rule was generally applicable
    • Took into account all the applicable statutory considerations

 

 

 

Judicial Review

Jaffee: Without judicial review, there is no real check on agency power.  Need judicial review to have a legitimate administrative law system.

 

“Substantial Evidence Rule”

§706(2)(e) unlawful agency action if “unsupported by substantial evidence in a case subject to §§ 556 or 557 or other wise reviewed on the record of an agency hearing”

 

What question is the court being asked to review?

Question Type

Example

Rightness or Reasonableness?

Technical Term

Finding of fact (pure fact)

Does Chadha gamble?

Reasonableness

Substantial Evidence (formal adjudication)

Arbitrary and capricious

(informal adjudication)

Conclusion of law (pure law)

Moral character determination, is it as defined at time of enactment or at time of application?

 

Reasonableness

Chevron

Application of law to fact (mixed question)

Is Chadha’s gambling good moral character as of ___?

Reasonableness

Chevron

Policy

Is Chadha staying in the public interest?

Reasonableness

Arbitrary and capricious

Hard look review

 

Benzene Leukemia Case

  • Parts per million standard case where agency could not determine the dose-response curve and passed a zero parts regulation
  • Court found unreasonable because no facts to support any standard less that 10 ppm (safe does not equal risk free)
  • Frontier science is ripe for policy discretion

 

 

Universal Camera

  • ALJ found for the employers but the agency Board reversed
  • On review, the court can look at not only the favorable agency evidence but may also consider a contrary prior ALJ decision.
  • APA requires review of the whole record

 

Substantial Evidence Spectrum

Less deferential

 

 

 

Clearly Erroneous

Judge’s decision reviewed

 

Agency Substantial Evidence

Universal Camera

 

Substantial evidence (jury standard)

Pre-Universal Camera

More deferential

 

 

A court could uphold a clearly erroneous decision under substantial evidence.

 

 

Allentown Mack

  • Scalia
    • words mean what they mean (textualist)
  • Frankfurter
    • what was Congress’ mood when it passed the statute (contextualist)
    • Use same for judging agency action
    • Consider ALJ findings as part of the record
    • Consider Board’s rejection in the review
    • No automatic deference to either ALJ or Board
  • APA
    • Board overturn means the ALJ decision never happened
    • ALJ decision part of the record
  • Ultimately lands on giving some weight to the ALJ decision, but not quite full de novo review
  • Courts give deference to ALJ decision where ALJ relied on demeanor evidence (Kimm)

 

Data Processing v. Federal Reserve

  • Challenge of a rule and order preventing bank from performing non-banking activities
  • Under APA proper review
    • Rulemaking (§ 553) – arbitrary and capricious
    • Adjudication (§§ 556,557) – substantial evidence
  • Organic statute implies substantial evidence for all allowing more judicial review but the language used is the same as used in the APA thus equivalent
  • Bottom line
    • Under the APA, arbitrary and capricious equivalent to agency substantial evidence under Universal Camera

 

Judicial Review – Questions of Law

 

Simple Pre-Chevron Approach – NLRB v. Hearst

  • Are newsboys employees?
  • If a pure question of law then no deference to agency
  • If mixed question, then deference to the agency if
  1. Warrant in the record; and
  2. Reasonable basis in the law
  • Deference given here
  • Benefits
    • Preserve traditional judicial role as arbiters of law
    • Keep mixed questions within the agency’s expertise

 

Complex pre-Chevron Approach – Packard v. NLRB

  • Are foremen employers or employees?
  • Agency receives no deference in this mixed question case
  • Need more factors to decide level of deference because of the complexities of issues agencies handle
  • Factors
    • Whether agency construction rendered when statute passed
    • Construction of longstanding application
    • Consistent application
    • Public reliance
    • Interpretation involved “public controversy”
    • Interpretation based on expertise or of a technical and complex subject
    • Whether agency has rulemaking authority
    • Whether agency action necessary to set statute in motion
    • Whether Congress was aware of interpretation and did nothing to repudiate
    • Whether agency expressly addressed application of statute to proposed action
  • Consider these reasons why no deference given
    • Big issue at stake (labor dispute)
    • Distrust of the NLRB as having a pro-labor slant
    • Agency has been inconsistent in applying the statute
  • Complex pre-Chevron Rule
    • Simple rule is default
    • Mixed questions get no deference when considered with the factors
    • Pure questions may get deference with the factors

 

Skidmore v. Swift & Co.

  • Could firemen get overtime pay for standby time?
  • Different result than in Hearst because the agency does not administer the statute sued under
  • Agency had provided rulings, interpretations, and opinions on the Act the private suit was based on
  • Deference under Skidmore
    • Congress did not confer deference to the agency
    • Agency’s experience and informed judgment can be used for support if
      • Thoroughness in consideration
      • Validity of reasoning
      • Consistency
      • All other factors which give power to persuade
  • Essentially, agency earns deference by demonstrating they are experts on the topic

 

Chevron Deference [big deal case]

  • No more distinguishing pure questions and mixed questions

 

  1. Did Congress address the issue?
    1. If yes, then done à follow will of Congress or its delegation of the issue to the agency’s discretion
  2. If not, or not adequately, is agency interpretation reasonable?
    1. If yes à deference
    2. If no à no deference

 

Under Chevron, the agency interpretation does not have to be right only reasonable.

 

4 Reasons for Deference under these conditions

1. Congress intended to accommodate different interests, but didn’t do it specifically enough

2. Congress wanted the agency to decide using its expertise

3. Congress did not consider the issue

4. Congress did consider but could not form a consensus

 

Justification for Chevron Test

  • § 706 “court shall decide all relevant questions of law”
  • Court gets decision on matter at hand; only the questions raised in the case
  • Court gets decision on all questions of law
  • In absence of deference in the organic statute, the court decides the interpretation
  • If deference provided in the organic statute, then deference holds

 

Competing Thoughts about Chevron

  • Pierce
    • Courts are actually making policy decision on close legal questions
    • If it’s close, why not let the agency use their expertise
    • Counter argument: courts make these types of decisions outside the agency context, they are able to do it there, why not allow it here?
  • Scalia
    • Chevron is not compulsory thus no separation of powers issue
    • Approach is much cleaner than the multifactor analysis
  • Merrill
    • Worried about agency accountability
    • Is there a Marbury issue here as well

 

­Chevron Step-Zero

  • Does Chevron apply?
    • Does the agency administer the statute?
      • Special responsibility with respect to the act
      • Not just applying the statute
      • Example: Federal Trade Commission
        • Does not administer the Federal Tort Claim Act à Chevron inapplicable
        • Does administer the Fed. Trade Commission Act à Chevron applicable
    • Is the agency engaging in rulemaking (applies) or policy statement (does not apply)?

 

 

 

 

 

Wagner

  • EPA ordered clean up and then superfund reimbursement statute passed
  • Do payments apply retroactively?
  • Agency interpretation was no
  • Does Chevron deference apply?
    • Administer the statue? EPA is the purse string holders
    • Enough? Yes
    • Chevron deference applies

 

Edelman v. Lynchburg College

  • EEOC doesn’t generally administer Title VII but is delegated some procedural rulemaking authority
  • Rule being challenged was procedural
  • Does Chevron deference apply?
    • Administer the statute? The powers to invoke this rule explicitly delegated to EEOC
    • Yes, Chevron applies

 

Adams Fruit v. Barrett

  • Is a state workers compensation law pre-empted by federal law?
  • Single provision seemed to indicate no Chevron deference, even though the agency administered the entire statute.

 

Christensen v. Harris County

  • Opinion letter from agency to the county not entitled to Chevron deference
  • The agency has the rulemaking authority but
  • Letter did not have the “force of law” thus no Chevron deference

 

US v. Mead

  • Tariff ruling letters not given Chevron deference
  • Does not administer the statute under which deference is sought

 

Three Levels of Delegated Deference

  1. Express deference
  2. Chevron
  3. Skidmore

 

Also consider when Auer deference kicks in; Auer deference when agency is interpreting its own rule.

 

Rapaport v. Office of Thrift Supervision

  • Several agencies interpret specific provision
  • No Chevron deference because it could get messy if competing interpretations result
  • Dissent says makes sense, but should allow deference if all interpretations agree

 

Gonzales v. Oregon [good summary case for deference]

  • State passed assisted suicide law
  • 1971 regulation empowers AG to make sure legitimate practice is happening
  • 2001, AG issues interpretive rule that assisted suicide is not legitimate practice
  • Auer deference? no because not interpreting own regulation
    • If agency interpretation “parrots” the statute à no Auer deference
  • Chevron deference? No because AG doesn’t administer the statute (Mead); no delegation
  • Skidmore deference? No because AG’s interpretation is not persuasive

 

Chevron Two Step Reconsidered

  1. Step 1
    1. How precise?
      1. Texas Power v. EPA (DC Cir, 1996) statute said “actual” usage in statute, but court found this to be imprecise enough to warrant deference to EPA
    2. How clear?
      1. Factors
        1. language of statute
        2. immediately surrounding context of statutory lang
        3. context of entire act of which statute is a part
        4. context of the entire universe of legislation
        5. general background and purpose of the statute
        6. statute’s legislative history
        7. canons of construction
        8. consequences of different interpretations
        9. good social policy
      2. MCI v. ATT interpretation of “modify” found to mean small change by using textual analysis (Scalia opinion)
  2. Step 2
    1. How reasonable?
      1. ATT v. Iowa Utility Board (US, 1999) “necessary” and “impair” abilities of newcomers to phone market; agency thought necessary was anything that cost the newbie; court didn’t like this interpretation; Step 2 failure

 

NCTA v. Brand X

  • Is an agency bound by a prior court interpretation?
  • Yes if court did not cite unambiguous Congressional construction as interpretation
  • Otherwise, defer to the agency’s interpretation over the prior judicial interpretation
  • Scalia dissent: agency could wind up taking an action the court had previously found unlawful

 

 

 

 

Judicial Review – Policy Review

 

When reviewing policy decisions of agencies, courts have employed three types of review

  1. Arbitrary and capricious
  2. Hard look
  3. Reasoning process review

 

The Court essentially has 5 options for the review

  1. “no intelligible principle”
  2. “minimal rationality”; not completely ridiculous (very deferential)
  3. substantive review (less deferential)
  4. procedural review
  5. hard look review

 

 

Consider the Shift in Deference

Question Type

Early

Later

Legal

APA; no deference

Chevron

Policy

Very deferential

Less deferential; hard look

 

 

Greater Boston v. FCC

  • Leventhal pens the hard look terminology
  • Agency must give hard look to the key issues
  • If agency gave the issues a thorough analysis, action is okay

 

Lawson, What is Under Review in Policy Review?

  1. Decision making outcome?
    1. Substantial evidence
    2. What did the agency decide
  2. Decision making procedure?
    1. Hoop jumping
    2. How the agency reached and issued its decision
  3. Decision making process?
    1. Chain of reasoning
    2. Why the agency decided the way it did

 

MVMA v. State Farm

  • Safety restraints case
  • Agency must examine relevant data and articulate satisfactory explanation for its actions included “rational connection between the facts and its choice”
  • Arbitrary and Capricious if
    • Relied on factors Congress did not intend
    • Failed to consider important aspect
    • Offered explanation that was counter to evidence
    • So implausible it could not be ascribed to difference in view or product of agency expertise
  • Agency failed to give the issue delegated to it a hard look thus standard fails

 

 

 

Corrosion Proof Fittings (5th Cir, 1991)

  • Hybrid rulemaking statute grants EPA power to ban any toxic substance with some limitations
  • Court finds agency failed to give this a hard look because
    • Unquantified benefits outweigh cost assertion is bunk
    • Reasonable basis not provided
      • Didn’t consider alternatives
      • Didn’t consider alternatives’ toxicity
      • Didn’t consider burden of ban
      • Didn’t consider partial ban
    • Cost benefit was not complete

 

Judicial Review and Procedures

  • Need additional procedures to get court into position to
  • What is the proper level of judicial involvement?
    • Lenient procedures & lenient review
    • Strict procedures & strict review
    • Strict procedures & lenient revived (Bazelon)

 

US Dept. Treasury, Bureau of Engraving and Printing v. FLRA (DC Cir, 1993)

  • FLRA inconsistently interpreting the provision determining when bargaining is appropriate with federal employees
  • Agency has three choices
    • Follow prior interpretations
    • Distinguish why the interpretation is changing
    • Distinguish this case’s circumstances
  • Because discretion is being applied, it must be done so rationally

 

Chevron Step 2 & Hard Look

  • Could be one of two things
    • Reasoning review
      • Did agency select interpretation reasonably?
      • Why did the agency pick the interpretation?
    • Outcome review
      • Is the agency interpretation reasonable?
  • Unsettled area of law

 

 

Availability of Judicial Review

 

History

  • Sovereign immunity initially prohibited suits against the government
  • Government started waiving immunity
  • Eventually, gets to the point where you can sue the government official under normal tort action
    • Tort suit against agency official
    • Agency official defends arguing action was authorized by statute
    • Court then reviews
      • Does statute authorize the action?
      • Is the action constitutional?
  • Once APA enacted, sovereign immunity still waived, but
    • suits against agency authorized rather than needing to sue agency official
    • federal statutory law
    • remedy is injunctive
  • This saw the rise of official immunity
    • Qualified official immunity
      • Act does not clearly violate constitutional or statutory rights a person should have reasonably known
    • Absolute official immunity (e.g., judges, President for acts while in office)

 

Types of Review under APA

  1. General statutory review § 704
    1. Used if organic statute is silent on mode/availability of review
    2. No time requirements to file suit
    3. Initiate proceeding in District Courts
  2. Special statutory review § 703
    1. Used if organic statute contains provisions for review
    2. Organic statute trumps
    3. Modern special review typically requires
      1. Prompt review (e.g., 60 days)
      2. Review limited to courts of appeals

 

Preclusion

  • Express Preclusion
    • By default, the APA provides judicial review
    • Can be precluded by statute
    • Courts very reluctant to read statutory preclusion provisions broadly
    • Will step in if Constitutional challenge raised
  • Implied Preclusion
    • 1960s, when more suspicious of the agencies, clear and convincing evidence was needed to preclude judicial review (high bar)
    • Case
      • Order received special statutory review
      • Silent on whether rules receive the same
      • Court says clear and convincing evidence not present to preclude judicial review of rules
    • Block
      • Milk price case where silence was enough allow consumers to sue where a others were precluded

 

 

“Committed to agency discretion by law”

  • In Overton Park, there was “no law to apply” (e.g., public interest standards), so there was nothing for the courts to use for review.
  • Heckler v. Cheney denied review of FDA refusal to exercise discretion to prosecute drugs used for lethal injection death penalty.
  • Lincoln same problem, lump sum appropriation not judicially reviewable
  • Issues with this approach
    • Is there ever the case where there is no law to apply?
    • Is there a relationship between preclusion and agency discretion? Silence is implied preclusion à no law to apply?
    • Relationship between CADBL and judicial review for abuse of discretion?

 

Traditionally Exempt from Review

  • Webster v. Doe
    • CIA director terminates openly gay employee
    • Majority precludes arbitrary and capricious claim by saying there is no law to apply to the discretion given to the CIA director in hiring decisions
    • Allows the Constitutional argument to stand
    • Scalia’s dissent is the key though, as it is adopted by other courts
      • CADBL is meant to apply to the common law causes of action
        • Political questions, sovereign immunity, respect for the coordinate branches, diplomatic immunity, national security, military, prosecutorial discretion, lump sum apportionments
      • Other provision applies to statutory preclusion
      • On the Constitutional issue, thinks this falls into a traditional area the court does not get involved with, so let it go

 

Exhaustion

  • Before bringing action in court, party must pursue all available avenues within the agency for review
  • Justifications
    • Judicial efficiency
    • Let agencies correct their own mistakes
  • Exceptions
    • Irreparable harm to the party seeking review by denying it
    • Agency not authorized to provide the remedy sought
    • Agency is shown to be biased or have prejudged the issue

 

Finality

  • Let the lower body finish proceeding before raising issue for appeal
  • APA § 704 provides review once proceeding finalized
  • How to tell if final
    • Definitive statement; AND
    • Legal force
  • Displaces common law exhaustion doctrine by ???
  • FTC v. Socal FTC files complaint of anticompetitive action against Socal who is denied review because the complaint is not a final agency action.

 

 

 

 

Ripeness

  • Traditional modes for challenging
    • Wait until rule is enforced against a party and challenge rule then
    • Explicit pre-enforcement model: challenge immediate if available under statute (e.g., Hobbes Act)
  • Abbot Labs v. Gardner  (adds third way to challenge a provision)
    • FDA labeling requirements rule
    • Reviewability
      • Statute had special review for orders
      • Silent on rules
      • Court holds for general review under APA
    • Finality
      • Binding & legal impact à final
    • Ripeness
      • Issue is fit for review
      • Imposes a hardship on the parties if not decided now
      • Source of this is unknown, perhaps equitable doctrine?
  • Toilet Goods Ass’n v. Gardner
    • Search and review of formulas must be made available to FDA
    • Decided same day as Abbot and found not ripe
      • No immediate effect
      • Agency still working out the scheme
      • Defer until real facts to apply to a specific case
  • Ohio v. Sierra Club
    • Logging rights permit procedures put into place
    • Club wants to sue early, without any specific logging taking place
    • Not ripe
    • Hard to show ripeness on procedural rule challenges
      • See also Reno v. Catholic Social Services
  • Overripeness
    • If specific pre-enforcement statute in place, it trumps
      • Could limit review period
      • Could extend review period
    • Hobbes Act is somewhere between special and general review
      • Applies special review to certain agencies  (i.e., FCC, FMC, NRC, DoT, Fair Housing)
      • General review to others

 

Standing

  • History
    • Early on, standing was not readily available à lets agencies get work done
    • 1940 - 1950 à still strict
    • 1960 – 1970 à everyone gets standing; suspicious of agencies
    • 1980 – 1990 à moderately strict
    • 2000 – Present à slightly less strict
  • Types of Standing
    • Constitutional
      • Always required
      • Elements
        • Injury in fact
        • Causation
        • Redressible
    • Prudential Standing / Statutory Standing
      • Elements
        • Asserting own rights
        • Not too abstract of a disagreement
        • Within the zone of interest
          • Complaining party must fit within the statutory category of parties protected by the statute
          • Expandable by Congress to the limits of Constitutional standing
  • Standing and the APA
    • § 702
      • Suffered legal wrong; OR
      • Adversely affected or aggrieved by agency action
    • Initially, legal wrong was limited to common law legal wrongs
    • Adversely affected was limited to any special standing provided for in the organic statute
    • Camp
      • expanded the APA notion and allowed anybody adversely affected to have standing under the APA
      • Limited to those within the zone of interest
        • In a good position to raise the issue?
        • How well the plaintiff’s issue aligns with the statutory issue protected?
      • Anyone misaligned with the purpose of the statute, does not count (e.g., hackers)
    • Which statute’s zone of interest?
      • Air Courier focused whether the plaintiff was within the zone of interest of the provision sued under; court overlooked broader statutory scheme and zoomed in only on the provisions related to the claim
    • Zone of interest holding
      • Arguably within the zone of interest
        • Would congress have intended to prevent you from getting review?
        • More broad
        • Camp; Clarke
      • Within the zone of interest
        • Congress intended you to have review through legislative history or in the statute
        • More narrow
        • Air Courier v. AFL-CIO; Bennett v. Spear
    • Citizen suit provisions
      • No zone of interest required
      • Only Constitutional standing required

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