Administrative Law

Spring 2000

Professor William Fox

Outline by

Christopher S. Lee

I.        Introduction and Overview

II.     Congress, the Agencies, and the “Non-Delegation” Doctrine

A.     The New Deal

1.      Panama Refining

2.      Schechter

B.     The Modern Formulation

1.      Mistretta

2.      Industrial Union

C.     Problem:  Delegation Handout

II.     The Agencies and the Executive Branch

A.     Appointment of Agency Officers

1.      Buckley

2.      Morrison

3.      Weiss

4.      Edmond

B.     Removal of Officers

1.      Myers

2.      Humphrey’s Executor

3.      Bowsher

4.      Morrison

III.   Agency Powers

IV.  Obtaining Information from the Government

A.     FOIA

B.     Federal Privacy Act

V.     Agency Policymaking:  Rule v. Order

VI.  Agency Policymaking:  Rulemaking

VII.  Constitutional Due Process

VIII.     Agency Policymaking:  Adjudications

IX.  Judicial Review of Agency Action

A.     Preclusion

B.     Standing

C.     Exhaustion, Ripeness and Primary Jurisdiction

D.     Review on the Merits

Focus:

How Agencies make decisions

Rules

Adjudication

Judicial Review

Cardinal Rules

1.   Administrative agencies have powers only insofar as Congress authorizes.

No Common Law Agencies

No Court Agencies

No Self-Created Agencies

2.      Better win the case at the agency level.

Courts won’t bail out sloppy lawyering at the agency level. 

Courts rarely reverse agency decisions.

3.      Know your agency.

Statutes

Regulations

Nuisances

Politics

Gossip

Ultra Vires – In excess of powers.  Within boundaries of statute.

Canon of Construction

1.      With a list of items, the inclusion of one item means the exclusion of all other items.

2.      Saving phrase – “but not limited to”

3.      See Article III, Section 2 for exhaustive list of saving phrases.

The Non-Delegation Doctrine – The Early New Deal

1.      Grounds

·        Separation of Powers

·        Gov’t can’t give power to private persons/private sector.

·        Must have proper boundaries.

2.      Commerce Clause

3.      Key Cases – Still Good Law

·        Panama Refining

·        Schechter

See Cardozo Dissent

Purpose Approach – What was Congress’s Goal?

·        Carter Coal

·        Private persons can’t be given legislative authority

The Non-Delegation Doctrine – The Modern Approach

1.      Facial v. As Applied

·        Facial – Looks only to statute.

·        As Applied – Looks to see if Agency’s actions are constitutional.

·        SC – Moving from Facial to As Applied.

2.      Cases

·        Mistretta – Sentencing Commission

·        Industrial Union – Benzene & OSHA

                                                                           i.      Cost/Benefit Analysis

                                                                         ii.      Statistical Interpretation

                                                                        iii.      J. Rehnquist – Non-Delegation; Breath of fresh air?

                                                                       iv.      Economic v. Technical Feasibility

3.      Supreme Court

·        Needs good sense of Congressional limits of legislation.

·        Get grip on recent cases.

4.      Non Delegation v. Ultra Vires

·        Non Delegation = Challenge to Statute

·        Ultra Vires = Challenge within the boundaries of the Statute asks if it is within the agency’s power to carry out function.

Rule Making Diagram

1.      Notice of Proposed Rule Making

2.      Components

3.      Final Rule

Problem A – Chainsaw Kickback problem

1.      Delegation – What Standard?

2.      Delegation – To Whom?

3.      Purposeful or Deliberate Ambiguity

4.      Definition of “Reasonable”

5.      Non-Delegation charge defeated by Court.

6.      Nader – Private sector making rules is bad

7.      Fox – If Agency follow Rule Making Process, OK for private sector to provide input and guidance.

8.      Syntax

·        Shall – Mandatory, Non-Voluntary

·        May – Discretionary, Voluntary

Government agencies can’t discriminate against suspect classifications – Strict Scrutiny.

Government agencies can discriminate against non-suspect classifications – Rational Bas.

Commerce Clause

1.      Includes

·        Interstate Commerce

·        Foreign Commerce

·        Indian Nations

2.      SC Application

1.      Local

2.      Economic

3.      Findings – or lack thereof

Congressional Powers

1.      Budget

2.      Oversight

3.      Confirmation of Appointees

4.      Investigative & Subpoena Powers

Reasons for Removal

1.      Inefficiency; or

2.      Neglect of Duty; or

3.      Malfeasance in Office

4.      Good Cause is not Mere Whim; but not defined either.

Agency Adjudication

1.      Ultra Vires – Not in most Enabling Acts; but

2.      Agency can create policy using Rule or Order, making adjudication possible.

3.      See Agency Powers . . .

·        APA

·        Enabling Act

·        Ethics in Government

·        Paperwork Reduction Act

·        FOIA

4.      ALJs don’t have contempt powers - Fox

·        No statutory authority

·        No Agency Rules

·        HHS has refused to write contempt rules for ALJs

Problem D

1.      Corporations ARE NOT permitted to take the 5^th Amendment against self-incrimination.

2.      SC, after Civil War, recognized Corps. as entities with due process rights.

3.      Facially incriminating documents are protected by the 5^th Amendment.

4.      Non-facially incriminating documents are not protected by the 5^th.

Problem E – Agency Subpoena Power

1.      Subpoena duces tecum – calls for person and documents to appear

2.      Every agency has subpoena power.

3.      Private sector parties may issue subpoenas.

4.      Agency must have rules of procedure showing relevance.

5.      Virtually no limits to subpoena power.

6.      Subpoena Process

·        “Show Cause”

·        Bifurcate

·        Burden of Production – Going Forward

                                                                           i.      Show substance/subpoena

                                                                         ii.      Non-compliance with subpoena àContempt (ult. sanction)

·        Burden of Persuasion

7.      Conclusion

·        Agency

·        Party

·        Broad Swipe

·        Compliance required, unless protected by 5^th Amendment

·        Failure to Comply à Show Cause à Contempt

·        Not much room to resist

·        Negotiation permitted during “Show Cause” stage.

Criminal Procedure

1.      Immunity Granted for:

·        Oral Testimony; or

·        Production of Documents

2.      Once Prosecutor offers immunity, witness must:

·        Testify; or

·        Produce documents

3.      Types of Immunity

·        Use

                                                                           i.      Narrow

                                                                         ii.      Can’t use things said or documents produced

                                                                        iii.      Can use other documents obtained

                                                                       iv.      5^th Amendment

·        Transactional

                                                                           i.      Broad

                                                                         ii.      Entire set of events/Transaction

                                                                        iii.      Cant be prosecuted for entire transaction

Problem F – 4^th Amendment – Search and Seizure

1.      Right v. Process

2.      Right of people to be protected from unreasonable search & seizure.

3.      Process

·        Warrant request

·        Probable cause

·        Oath or affirmation; particularly describing search and seizure.

4.      Prior to 1970 Agency inspections were not considered a search.

5.      After 1970, Agency inspections are considered a search.

6.      4^th Amendment protects virtually nothing in Agency searches.

7.      Exceptions to warrant requirement

·        Border searches

·        Some welfare searches

·        Emergencies

·        Plain View

FOIA

1.      Any person may make a FOIA request.

2.      Any Gov’t records can be requested.  Anything Gov’t has is a record.

3.      Examples

                                          i.Give me all your records.

                                        ii.Give me all records on a specific area.

                                       iii.Give me letter dated xxx x, xxxx

4.      Federal Privacy Act

                                          i.Protects records of private individuals from disclosure.

1.      Prohibits disclosure

2.      Criminal and Civil Penalties

3.      Right to access & Right of correction

                                        ii.Does NOT protect dead persons’ records.

                                       iii.Applies only to information held in a “system of records”

1.      Retrievable information

2.      Smaller chunks of information

3.      Must be ID’ed by each agency

4.      Must specify by name in CFR

                                      iv.Presumption against disclosure

                                        v.Exemptions

1.      Law Enforcement

2.      Statutes

5.      Agency required to give requestor yes/no answer w/in 20 days of initial request.

6.      Appeals are required within 20 days.

7.      Judicial Review

                                          i.SMJ – U.S. District Court

                                        ii.Venue – Broad Options

1.      Requestor resides

2.      Records reside

3.      Washington, DC

                                       iii.Complaint

                                      iv.Appeal

8.      Standing = Personal injury in fact

9.      If agency’s actions are “reasonable”, then agency’s decision stands.

10.  Courts defer to agencies if “reasonable”

11.  De Novo

                                          i.No deference to agency

                                        ii.Court is in command, can do anything.

12.  Cases

                                          i.Bonner v. State Department – Representative sampling permitted, but must be legitimate.

                                        ii.Critical Mass Energy v. NRC – Trade Secrets

1.      Impairs future information gathering

2.      Substantial competitive harm

                                       iii.State Department v. Ray – Privacy Exemption

1.      Personal Medical files

2.      Clearly unwarranted

3.      Invasion of personal privacy

                                                              Right to privacy ends with death.

                                                    Only live persons have right to privacy.

                                      iv.DOJ v. Press Reporters – Law Enforcement Exemption

                                        v.Morgan v. DOJ – Rough Notes sealed after in camera review

13.  Any disclosable FOIA information is NOT protected by the FPA.

14.  FPA is a right to retrieve personal information.

15.  Government Sunshine Act – Open meetings in public

Rule & Order

1.      Rulemaking

                                          i.Formal

                                        ii.Informal – Majority; Notice & Comment period.

                                       iii.Sec. 553

2.      Adjudication

                                          i.Formal

1.      Sec. 554-558 of APA

2.      Sec. 556-557 – Specific

3.      APA Adjudications – Rare

a.       Compliant

b.      Evidentiary Proceeding

c.       ALJ Presides

                                        ii.Informal

1.      Sec. 554

2.      Formal case, no proceeding

3.      Broad spectrum

3.      Hybrid Rulemaking

                                          i.Intermediate process

                                        ii.20% of all rules

4.      Cases

                                          i.Chenery I, II, and III

1.      SC declares rulemaking GOOD.

2.      Rules only apply to future effect.

3.      Rules don’t govern past activities.

4.      30 days must past prior to enforcement of new rules.

                                        ii.Wyman-Gordon – NLRB Union/Employee List

1.      SC – Not properly announced Policy; uses Chenery holding and finds no abuse of disclosure.

2.      Challenged on Sec. 553

a.       Substance – Ultra Vires

b.      Procedural Defect – Creates Invalidity

                                       iii.Bell Aerospace – NLRB Managers v. Employees Definition

1.      Criteria

·        Complexity

·        Reliance

·        New Liability

·        Penalties

2.      SC – No agency reversal on Rule and Order

5.      Review

                                          i.Agencies can do anything they want.

                                        ii.Chenery – shows lead-time isn’t required, but is fair and proper.

                                       iii.SC – Nudged agencies towards rulemaking.

                                      iv.Due Process is NOT required for rulemaking.

                                        v.Scalia – Downplays rulemaking

·        Flawed

·        Too loose, free-form

·        Make new laws with Adjudication

6.      Decisionmaking

                                          i.Applicable to parties and future parties – Most Common

                                        ii.Purely Perspective – future Parties Only

                                       iii.Fully (permissible) retroactive - Rare

Rulemaking Sec. 553

1.      Outgrowth from New Deal Agencies.

2.      Establishes uniform process in Federal Government.

3.      Process, not substance.

4.      Military & Foreign Affairs Exemptions.  Executive branch grant of power.

5.      de minimus Government exemptions.

6.      Steps

                                          i.      NPRM – Notice of Proposed Rulemaking

                                        ii.      ANPRM – Advanced Notice of Proposed Rulemaking (discretionary)

                                       iii.      NOI – Notice of Inquiry – Agency’s plea for help.

                                      iv.      Ultra Vires – Rules must be consistent with enabling statutes.

                                        v.      Terms – Text of Proposed Rules

                                      vi.      Description of subjects, subject matter of rule

                                     vii.      Solicitation of Comments – Must invite persons to comment

                                   viii.      Publish NPRM in Federal Register

1.      Exemptions

a.       Named Persons

b.      Personal Service – FRCP

                                      ix.      Exemptions to NPRM Use

1.      Interpretative Rules

2.      Good Cause – Emergencies

a.       Difficult to prove

b.      Must be Plausible

c.       SC very strict on review.

                                        x.      “Interested Persons” – Anyone may comment, not just “aggrieved” parties.

                                      xi.      Broad discretion for “Consideration”

Formal Rulemaking – U.S. v. Florida East Coast Ry.

1.      Oral Hearing

2.      Verbal Transactions

3.      Testimony

4.      Adversarial proceedings

5.      Presiding Commissioner/Judge

6.      Based on the Record

7.      “After Hearing”

                                          i.      Focus of Rehnquist Decision

                                        ii.      Informal Rulemaking

8.      Legislative Drafting for Formal Rulemaking

                                          i.      Verbatim from Sec. 556-557

                                        ii.      Incorporation by reference to Sec. 556-557; but allows potential for future changes.

                                       iii.      “On the record, after opportunity for agency hearing.”

9.      Formal Rulemaking tends to stop agency dead in tracks.

Informal + Hybrid Rulemaking – Vermont Yankee v. NRDC

1.      Oral hearings

2.      Review of documents

3.      Hybrid – Mixture of Sect. 553 & 556/557

                                          i.      More than minimum

                                        ii.      Less than formal

                                       iii.      Avoids discovery and cross examination

4.      SC unanimously sides with Agency.

5.      Sect. 553

                                          i.      Lists Maximum Procedures Required

                                        ii.      Lists Minimum Procedures Required

                                       iii.      SC Window

1.      Constitutional Constraints

2.      Extremely Compelling Circumstances

6.      SC makes clear in this case that Agencies are experts and should be left alone by lower courts.

Substantive v. Interpretative Rules

1.      Substantive Rule

·        Legislative rules

·        Equivalent of statutes

·        No meaningful difference between legislative rules and substantive rules

·        Must obey

2.      Interpretative Rules

·        Thou Shalt Not…

·        Does not have force and effect of law.

·        Explains or clarifies a substantive rule.

3.      Guidelines

·        Don’t lightly ignore anything agency says regarding policy or interpretative rule.

·        Look, pay attention, work.

4.      No specific definition of Substantive v. Interpretative Rules

Substantive                                                                                                                                                                                                                                                                                   Interpretative

NPRM                                                                                                                                                                                                                                                                                                                                                                        No

Comments                                                                                                                                                                                                                                                                                                No

Considered by Agency                                                                                                                                                

FR Statement & Purpose                                                                                                                                             ?

30 Days After Notice                                                                                                                                                                                                                    No

Retroactive Rulemaking

1.      See Sect. 551

2.      Plausible construction, not Plausible administration

3.      SC occasionally permits retroactive rulemaking

Ex Parte Rulemaking Communications

1.      Strict rules for ex parte communications.

2.      No rules for ex parte rulemaking.

Estoppel

1.      No Estoppel against state or Federal government.

2.      Rely on erroneous information at your own peril.

3.      Policy

·        Too much liability with 3 million employees.

·        May shut down advice from employees.

·        Encourages discipline.

4.      Some agencies (IRS) permit written letters to justify estoppel.

5.      Agency may grant a declaratory ruling permitting estoppel, but rare and time consuming.

Constitutional Due Process

1.      5^th & 14^th Amendment Due Process Clauses, no removal of “life, liberty, or property without due process of the law.”

2.      Focus on liberty or property interests in the hands of a person/corp.

3.      Rarely applied in Admin Law.

4.      Threshold Analysis

a.       Whether

                                                                           i.      Is any due process required?

                                                                         ii.      Usually no due process required, but occasionally is req.

b.      When

                                                                           i.      Timing

                                                                         ii.      When must due process be given?

                                                                        iii.      Back end or front end?

c.       What kind

                                                                           i.      Elements

                                                                         ii.      What are the procedures agencies have to follow?

5.      EXAM

a.      Issue Spotting

b.      Issue Resolution

c.       Spot problems and resolve with answers to When & What kind.

6.      Cases

a.       Goldberg v. Kelly – Still good law

b.      Goss v. Lopez

c.       Mathews v. Eldridge

7.      Elements of Due Process, see Fox p. 147

a.       Notice

b.      Hearing – Opportunity to comment

                                                                           i.      Oral hearing

                                                                         ii.      Examine Witnesses

                                                                        iii.      Neutral decisionmaker

                                                                       iv.      Opportunity for counsel

                                                                         v.      Exclusively on the hearing record/decision

1.      No arbitrary decisions

2.      Exclusivity Requirement

8.      Mathews Test

a.       Private Interest Affected – Due Process analysis

b.      Risk of Error – Is more service less?

c.       Government Interest – Cost concerns

9.      Sources of Authority

a.       APA Sect. 556 – 557

b.      Agency Enabling Act

c.       Agency Rules

d.      Orders of ALJs

10.  Process

a.       Participation - Broader

b.      Discovery – APA, FOIA

c.       Rules of Evidence – relevant evidence

11.  Official Notice v. Judicial Notice

a.       Official notice broader than judicial notice.

b.      Party given opportunity to respond to official notice.

12.  Burden of Proof – Proponent’s responsibility

13.  Standard of Proof – Preponderance

14.  Agency Decision

a.       Initial Decision

                                                                           i.      Findings of Fact

                                                                         ii.      Conclusions of Law

b.      Intra Agency Review/Appeal

15.  Section 700

a.       701 – Judicial Review

                                                                           i.      Narrow grounds to overturn decision.

                                                                         ii.      Numerous ways to avoid Judicial Review

                                                                        iii.      Most agency decisions affirmed by courts.

b.      702 Right of Review

                                                                           i.      Adverse Action

                                                                         ii.      Narrow Grounds

                                                                        iii.      No sovereign immunity for declaratory damages

c.       703 – Form and Venue

                                                                           i.      Most agencies provide SMJ

                                                                         ii.      See enabling acts

d.      704 – Actions Reviewable – Final Order

e.       705 – Injunctive

f.        706 – Scope; Heart, On the Merits

                                                                           i.      Aggrieved

                                                                         ii.      SMJ

                                                                        iii.      Venue

                                                                       iv.      Remedy

                                                                         v.      Final Order

                                                                       vi.      Then Review on the Merits

Judicial Review

1.      Process

a.       Whether?

b.      When?

c.       What Kind?

2.      Courts Reviewing Agency Actions

3.      Whether Process

a.       Subject Matter Jurisdiction – Sources

                                                                           i.      Enabling Act

                                                                         ii.      28 USC 1331

1.      Federal Question

2.      Arising Under Jurisdiction

3.      No Amount in Controversy Issue

b.      Preclusion – See 701(a)(1-2) for preclusion areas

                                                                           i.      Statutory Preclusion

                                                                         ii.      Committed to Agency Discretion Preclusion

c.       Overton Park v. Volpe

                                                                           i.      Unanimous SC Decision

                                                                         ii.      Preclusion – Presumption in favor of Judicial Review, which is not overcome except in clear and convincing, evidence to the contrary.

                                                                        iii.      Statutory Preclusion – Congressional announcement saying review is not permitted.  VERY RARE.

                                                                       iv.      Committed to Agency Discretion

1.      Subtle topic

2.      Nothing for court to review.

3.      Agency makes the final call.

4.      Rare, limited examples.

5.      Examples

a.       Cargo Preferences Act – U.S Gov’t shipments must be under U.S. Flag vessels.

b.      Federal Security Clearances – Agency’s decision to grant or deny clearance is final.

d.      Standing – Another “Whether” question

                                                                           i.      Door-closing proposition

                                                                         ii.      If court decides no standing, then no option to pursue litigation in Federal judicial system.

                                                                        iii.      See Article III, Sec. 2 – Cases or Controversy – Standing

1.      Certain Q’s Fed Court’s can’t address:

a.       Mootness

b.      Federal Question Advisory Opinions

c.       Political Questions

2.      Plaintiff must show injury sufficient to bring court hearing and agency action.

3.      One person, one vote:  Baker v. Carr, Apportionment.

4.      Aggrieved – Must demonstrate personal state in outcome.

e.       Data Processing v. Kemp

                                                                           i.      Conjunctive “AND” Test – Must Show Both Elements

1.      Personal Injury, economic or otherwise; AND

2.      Within zone of interest protected by statute, constitution or Federal Common Law.

                                                                         ii.      Data Processing demonstrated economic injury.

                                                                        iii.      Must demonstrate Feds can’t do something via Fed. Law.

                                                                       iv.      Sierra Club v. Morton (1972)

1.      Challenged the “or otherwise” language.

2.      SC found no injury to members demonstrated.

f.        George Washington University Law School Groups

4.      “When”

a.       Timing Question – Like Due Process

b.      Only AFTER “Whether” question answered YES (Standing)

c.       Most times “Whether” is YES

d.      Final Order Doctrine – Sec. 702-3

                                                                           i.      Primary Jurisdiction

                                                                         ii.      Ripeness

                                                                        iii.      Exhaustion

e.       Primary Jurisdiction

                                                                           i.      Threshold Analysis

                                                                         ii.      Injury – Dispute Options

1.      Federal Court

2.      Agency

                                                                        iii.      SC – Agency must hear dispute 1^st.

                                                                       iv.      Rare exceptions – Nader v. Allegany Airlines

f.        Ripeness

                                                                           i.      Is there something legal that the court can address?

                                                                         ii.      Ex) Court can’t decide safety of drug, FDA’s responsibility.

                                                                        iii.      See Abbot Labs v. Gardner – Generic drugs case.

                                                                       iv.      Ripeness Test

1.      Case must be “fit” for Judicial Review; AND Court must be able to resolve the issue (Ultra Vires).

2.      P must show harm if Judicial Review withheld.

g.       Exhaustion

                                                                           i.      Twin with Ripeness

                                                                         ii.      Process

1.      Look at Agency Organization

2.      Determine where the dispute lies.

3.      Must exhaust all agency remedies before pursuing Judicial Review in Federal Court

4.      Final decision usually must come from Secretary’s office, or Chairman of the Agency.

                                                                        iii.      Exceptions

1.      Futility

2.      Congressional Exceptions – FOIA

3.      Emergency Exceptions

5.      “What Kind”

a.       Enabling Act

b.      706 – Laundry list of grounds for review

c.       Judicial Review

                                                                           i.      Fact Finding

                                                                         ii.      Questions of Law – Interpretation of Statute

d.      Fact Finding

                                                                           i.      De novo Review

                                                                         ii.      Substantive Evidence

                                                                        iii.      Arbitrary, capricious, and abuse of discretion

e.       De novo – normally not permitted by courts.  Permitted by statutes for some agencies.  SC – No deference to any Agency of Fact; FOIA

f.        Substantive Evidence

                                                                           i.      Form of Judicial Review

                                                                         ii.      Applied only to 556/7 Proceedings

                                                                        iii.      “Formal Adjudication” ONLY

                                                                       iv.      NOTE:  Some enabling acts require substantive evidence BEYOND 556/7

                                                                         v.      Substantive Evidence on the record as a whole.

                                                                       vi.      Must look at all evidence, pro& con.

                                                                      vii.      NOTE:  Distinguish preponderance requirement – “More than a scintilla”

                                                                    viii.      Review performed by Appellate Courts ONLY, not by SC.

g.       Arbitrary & Capricious Abuse of Discretion

                                                                           i.      “Hard Look” Technique

                                                                         ii.      Rigorous look at the entire record.

                                                                        iii.      “Reasonable” – If agency action deemed reasonable, then it must be upheld.

                                                                       iv.      J. Scalia – Reasonableness is the key; if action reasonable, then upheld.

6.      Conclusions of Law

a.       Agency interprets its enabling act.

b.      Judicial Review of interpretation of own statute.

c.       Test – Does the agency have authority to regulate issue?

d.      Agency determining its own authority.

e.       Test

                                                                           i.      Statute – if clear on face, Judicial Review stops.

                                                                         ii.      If there is ambiguity, then agency interpretation is considered reasonable.

f.        See Brown & Williamson case challenging FDA’s interpretation of regulation of tobacco.  SC focused on step 1 and found Congress wanted tobacco marketed, therefore FDA had no authority to regulate.

7.      Law

a.       Agency interpretation of statute.

b.      Agency interpretation of regulations (substantive rule)

c.       Great deference to agencies, but not controlling.