I. Introduction 1. Organic Statute a. Congress can delegate power to an agency – but it can not delegate its law making power b. In a sense – the agencies make law and interpret their own regulations c. But what are the standards that govern the agency once created? 2. Problem: How do we regulate agencies (4th Branch of Gov‟t)? 3. Two Principal Agency Functions: a. Adjudication which leads to “orders” b. Rulemaking which leads to “rules” 4. Legitimacy: a. Agencies develop expertise at some particular type of problem – they are more adept at a particular area than Congress b. Scalia: Agencies garner legitimacy b/c they are created by the legislature which is accountable to the people. i. To have them monitored by the judiciary would take away their accountability
II. The Procedural Framework for Administrative Action p. 250 – The effect of the agency is to foreshorten the judiciary and the legislative procedures into a continuous government act 1. When the agency is making policy informally or when it is making rules and having adjudications What the agency is doing is solving entire problems, not just one aspect A. Adjudication v. Rulemaking Londoner v. Denver p. 238 Adjudication: If there are a small number of people, exceptionally affected by the administrative agency‟s order, then a hearing can be had. Bi-Metallic Investment Co. v. State Board of Equalization p. 241 Rulemaking: If the rule is of general applicability and applies uniformly across the group, then a hearing can be had. It is impracticable that everyone should have a direct voice in government. Modern Application: These two cases are the foundation for evaluation of DP 1. You have a right to an appearance before your rights are irrevocably taken away 2. DP requires that you not be deprived of life, liberty, without DP of the law Legal Justice v. Substantive Justice 1. Legal: Pre-existing goals to follow in any given situation 2. Substantive: Pre-determined goals, and you decide particular rules/regulations to advance these goals
3. Which one is administrative law? a. Does it eliminate the line b/w legislation and adjudication b/c you legislate and adjudicate according to the goals of the agency – ends justify the means? B. The Administrative Procedure Act of 1946 Wong Yang Sun v. McGrath p. 254 Full array of formal APA adjudication procedures would apply 1. Court is trying to figure whether the text of the APA governs the process of hearing or, whether it is governed by the constitution itself 2. Justice Jackson defers to the APA (Jackson Approach) a. He allows the APA to govern DP b/c Congress delegated b. He gave quasi-constitutional legitimation to the APA c. He also felt that there should be a fluid adaptation of the APA text as times changed d. He discerns APA purposes through its legislative intent and then makes it work to achieve those purposes 3. This case is overruled – t/f it is not certain that Congress wants to apply the elaborate APA procedures in every case in which the federal government is required by DP to provide some kind of hearing Dickinson v. Mary E. Zurko et al. p. 264 A court must use the substantial evidence test of §706 unless some other law clearly requires application of a different standard. (see also “displacement” below”) 1. A court should be more deferential to an agency via the APA than it would be reviewing a court. a. Court/Court v. Court/Agency review 2. The APA was not meant to restate, but was to limit the procedures of judicial review to what the APA itself says (Justice Breyer Approach) a. This is a pretty rigid view of the APA b. Compare w/ Justice Jackson and his fluid approach How do you treat the APA? 1. Do you make the APA internally uniform (Breyer) or do you make it uniform as to every outside interpretation? Greenwich Collieries p. 269 1. What does “Burden of Proof” mean? a. O‟Connor – what is the original definition in 1946? What was the framers intent? i. This gives the APA uniformity throughout time b. Souter – APA language is ambiguous i. Must look to legislative history to determine ii. He says legislative history is not ambiguous, while O‟Connor says it is
2. O‟Connor for the majority – meaning Unless Congress says specifically otherwise as to the meaning of a word, the APA will apply as it was originally Threshold Question: How are you going to interpret the APA? 1. Why was that approach taken? a. Keep APA as an anchor – constant as it was in 1946 b. Allow the APA to be flexible w/ changing times 2. If you choose to follow it exactly as Congress meant it, then you have problem of “What did Congress mean?” 3. If you choose to follow the changing nature of society approach, then you run into how to interpret the APA in light of change. C. Outside the fundamental categories: Information Gathering Adjudication: 1. Informal – The little OSHA inspector out at the poultry farm making the decision in his own little way w/out any appealable ability 2. Formal – On the record Rulemaking: 1. Informal – Notice and Comment – not on the record notice is made, and comment is given 2. Formal – On the record The APA doesn‟t purport to govern everything every agency does 1. APA doesn‟t set out purposes or principles of Administrative Law, each agency does Civic Republican Theory p. 78: In a republic citizens govern themselves, and they need an apparatus to govern themselves with. (this is one author‟s opinion and it not necessarily true) 1. In Notice and Comment Rulemaking we have the best opportunity for citizens to be heard a. This allows for more citizen responsibility § 553 Rulemaking 1. § 553(a) – §553 does not apply to a. Military Affairs b. Agency management of personnel, public property, loans, grants, benefits, or contracts 2. § 553(b) – General Notice of a proposed rule shall be in the Federal Register, the notice shall include a. Statement of time/place b. Reference to legal authority under which rule is proposed c. Terms or substance of the proposed rule or description of subjects/issues involved d. § 553 does not apply
i. To interpretative rules, general statements of policy … ii. When agency for good cause finds that notice and public procedure thereon are impracticable … 3. § 553(c) – After notice is given in the register, then interested parties shall be given an opportunity to participate in rulemaking a. After all consideration of materials is given, they only have to consider it – nothing more – then the agency shall incorporate in the rules adopted a concise statement of their basis and purpose b. When the rules required by statute are to be made on the record, after an opportunity for an agency hearing, § 556 and § 557 apply instead of this subsection c. The agency is free to make a rule based on any other information it wants to. It is not limited to what it is given 4. § 551(4) “Rule” – the whole or part of an agency statement of general or particular applicability and future effect designed to implement, interpret, or prescribe law or policy or describing the organization, procedure, or practice requirements of an agency. 5. § 551(5) “Rulemaking” – The agency process for formulating, amending, or repealing a rule Information Gathering 1. Should inspections be structured and seen as “police inspections?” 2. Or is the idea to have the regulatory agency to be in some sort of partnership w/ the regulated agency D. Rights not to cooperate Marshal v. Barlow‟s Inc. p. 295 A warrant must be obtained to inspect business premises for compliance with safety rules, despite the danger that the employer might conceal defects while the inspector gets a warrant. To obtain a warrant, the inspector must establish that his choice of this particular employer was based on reasonable standards. To authorize a warrantless inspection: 1. The business must be subject to close and detailed regulation (heavily regulated industry for example) 2. The statute must meet 4th Am. reasonableness standards a. A substantial government interest in the regulatory scheme b. Warrantless inspection is necessary to further that scheme c. Statute must perform the functions of a warrant by advising the owner of the business that periodic searches will be made and the statute must limit the time, place, and scope of the inspections. 1. Basically, you need a warrant unless it is an exception: a. Heavily regulated industries i. Auto Junkyards
ii. Gun and Liquor dealers iii. Mines 2. So how much deference should the Courts give to Congress when they delegate power regarding the 4th Am. right against unreasonable search and seizure? 3. Must allow for the element of surprise. If you get a warrant, you lose this element. a. Ex Parte Warrant – Warrant w/out notice of the opposing party. This has never been expressly allowed, but it happens all the time.
III. Administrative Adjudication in Action A. Seacoast; Initial Hearings Seacoast Anti Pollution League v. Costle p. 325 First Circuit: A federal statute requires a “hearing” when licensing is involved. The organic statute did not state whether the hearing should be “on the record.” The court required formal adjudication because the statute appeared to contemplate that formal adjudication be conducted. p. 328 – “we are willing to presume that, unless a statute otherwise specifies, an adjudicatory hearing subject to judicial review must be on the record. An agency may not rely on evidence that is outside the record. Under the APA the transcript of testimony and exhibits, together with all the papers and requests filed in the proceeding, constitutes the exclusive record for decision. (§ 556(e)) Chemical Waste Management v. EPA D.C. Circuit: When statute is ambiguous about adjudicatory hearing requirements, the court is required to uphold a reasonable agency interpretation of the statute. But you must first look to the organic statute. The tension b/w the two is that Seacoast wants the APA to always apply and Chemical Waste Management wants to first look at the organic statute APA § 554 Adjudication (§§ 554, 556, 557) How do you decide what triggers formality in adjudication? What triggers § 554, and thusly §§ 556, 557? 1. The APA requires for itself to be followed for every agency adjudication required by statute to determined to be “on the record” (APA § 554) (Two items, both must be satisfied) a. (1) Is the action an “Adjudication?” and; i. If the end result is an “order” 1. the whole or part of a final disposition of an agency in a matter other than rulemaking, but including licensing (APA § 551(6)) ii. Order includes licensing – t/f licensing is resolved by adjudication b. (2) Does the organic statute or the constitution (think DP requirements) require a hearing on the record
2. The organic statute does not have to say explicitly “on the record” to trigger the APA § 554 3. The default position is formal on the record adjudication when the organic statute does not say (both Seacoast and Chemical Waste Management) a. Conversely, there is a presumption when it says “on the record” that §§554, 556, 557 apply as well. 4. Possible Reason for requiring adjudication to be “on the record”: a. Adjudication = quasi judicial t/f in a judicial proceeding, on appeal, you need a record to review, so apply similar logic to quasi judicial B. Participation in Adjudication How do you determine how much intervention is going to be allowed? 1. Testimony has to be helpful if it is going to be on the record 2. The agency has to be able to say that there is substantial evidence when they justify their determination 3. In an agency proceeding – the agency does not have to give you full party status if you‟re an intervenor a. If the agency is going to allow you intervenor status, it must decide if the intervention is going to be helpful 4. Parties attempt to intervene b/c their legal rights or other legal interests may be affected by the proceeding and they have a position they believe will not be adequately represented by the named parties and the agency staff Office of Communications of the United Church of Christ v. FCC p. 334 Discretion: Generally agencies permit such intervention as long as the new party or parties will not unduly complicate the proceeding. Often the intervention is conditional: The intervenors can participate on some issues, but not all, or are limited in their use of discovery or cross examination. 1. The FCC covers vast numbers of people, it can‟t oversee everyone‟s interests 2. On the other hand The FCC can‟t effectively represent listener interests unless it has listener participation (it has statutory obligation to serve and hear public interests) 3. So what is the standing of listeners? a. If they have standing in court, it does not follow that they have standing in agency i. They might be denied intervention in the agency proceeding if it would unduly complicate the proceeding or otherwise violate the agency‟s own rules (§ 555(b)) 1. You want to look to the organic statute first, before looking to the APA § 555(b), to decide if the agency should allow statements from people who do not have full party status 2. Courts have not given any compulsive force to § 555(b) b. If they have standing before an agency, it doesn‟t follow that you have standing before a judicial proceeding
i. Ultimately it depends upon if the party could make a significant contribution to the administrative proceeding whether they are allowed intervenor status in the agency proceeding C. Evidentiary Issues in Adjudication 1. Agency hearings are more inquisitorial rather than adversarial 2. If the agency is going to serve public interests it must hear all sorts of viewpoints (Public Interest Representation Model; see also below) a. FCC for example Even though it is supposed to be the expert, and thus why would it need partisan viewpoints, it is to allow reasonable viewpoints in b. The point of democracy is to have a representative government 3. The arguments against allowing participation: a. Too many partisan views one way or the other b. History has shown it doesn‟t work c. The breadth of information to be processed just won‟t work d. How expert are the experts? Judicial Review of Administrative Process: 1. How should the rules be shaped by agencies to help assist courts later in the case when the courts have to review an agency decision APA § 551 v. § 555(b) 1. § 551 says “interested parties” 2. § 555(b) says “interested persons” 3. Is there a difference? 4. Either way, “interested” must be defined Deference to the agency‟s definition is proper as long as it is reasonable APA § 556 Rules of Evidence Professor says this section says very little But § 556(d) – says about initial licensing, as a subsection for rules of evidence APA § 557 Initial Decisions, etc. § 557(b) – also makes an exception for initial licenses Displacement Zurko again – Whether displacement of APA § 559 has occurred? 1. APA § 559 Allows for the organic statute to modify the APA, but it must do so explicitly 2. However, what about Initial Licensing and Seacoast? a. Initial licensing is treated specially – under § 556(d) oral presentation can be ruled out i. The organic statute allows for an opportunity for public hearing anyway though
b. Yet, in Seacoast, which dealt w/ a licensing, says it is going to judge the proceedings according to the standards set forth in APA §§ 554, 556, 557 i. The judge never goes through a §§554-557 analysis though ii. Instead he looks to the organic statute c. He never deals with why the APA built in exceptions to initial licensing d. He never reasons out why the organic statute displaced the APA in this instance Public Interest Representation p. 346 1. If a decision affects not just Jones and Smith, but the people downstream as well (meaning it is polycentric) – then how do we encompass their rights as well? 2. Justice Burger – Must get the concerned people into the process a. The people who are concerned will get themselves in there 3. On the flip side: But the concern is: Can interest groups influence the process (the whole purpose of an interest group is to advocate an agenda) a. Do interest groups really have any power? b. An agency can take comments – but will they really go sifting through all the comments? c. Taking all comments could “gum up the works” – paralysis by analysis 4. Another point: If courts want to make a good faith effort to understand all the adjudications, etc. that agencies spew out – how are they going to judge that landslide of information? 5. If the public beneficiary loses, is it because of his own lack of persuasion, or is it because of institutional barriers? 6. p. 352 ** Middle ¶ Is cross examination required for full and true disclosure of the facts? (Seacoast v. Costle) a. Has the court concluded that the language of the EPA statute has operated to take the proceeding out of the special provision for initial licenses in the APA, so that the only question is whether cross examination was required for a full and true disclosure of the facts? i. This way it takes away from the court the necessity to determine what “party” or “prejudice” means under the APA as applied to the case ii. All that is left is deciding if cross examination is required b. Procedures will be governed not only by the APA, but also by the specific statutes underlying the particular proceeding Evidence § 556(d) – only speaks generally about evidence – t/f most of evidence is dealt w/ in organic statute of the agency Castillo-Villagra v. INS Rule of Convenience: The ALJ should take notice of adjudicative facts whenever the ALJ at the hearing knows of information that will be useful in making the decision.
General rule is that any relevant evidence is admissible in administrative proceedings, regardless of the rules of evidence applicable in civil litigation. Thus, hearsay evidence is admissible regardless of whether it falls under one of the hearsay exceptions 1. In this case, he this is the default rule, but there may be necessary concomitants a. In this instance it is rebuttal that is necessary at the trial level b. But what about the credibility of the concomitant? in this case the credibility of the immigrants who are given the opportunity to rebut 2. Basically – Agencies have a whole lot of flexibility to figure out what they do w/ respect to evidence 3. Once they formulate a rule, they must live w/ that rule until they change it Findings § 557(c): There must be a brief statement of findings The agency EE must CONSIDER the submissions of the parties Armstrong v. Commodity Futures Trading Commission p. 369 By the time the agency action is judicially reviewable (a final judgment), the agency must take responsibility for the decision – it can‟t pin the judgment on the ALJ This is mandated by § 557 – the agency must take responsibility 1. What does § 557 require the brief statement of findings say? a. Must show how a conclusion is reached 2. However, it is not sufficient for the agency head to simply say that the ALJ‟s findings are substantially correct a. This would mean that the reviewing court can‟t be sure which of the findings are correct b. Since the agency must take responsibility, the reviewing court would not be sure which findings the agency is taking responsibility for/affirming 3. Therefore, should the Agency not take TOTAL responsibility for the ALJ, then the reviewing court can vacate the agency head‟s affirmation meaning that the agency should say that the decision was FULLY correct by the time they put their stamp on it D. The presiding officer §554(d) The presiding officer shall be pursuant to § 556 § 556 The presiding officer shall be an agency head, a member of the body which comprises the agency, or an ALJ § 554 p. 1340 – Shall be impartial, can issue a subpoena if authorized by organic statute, If they publish rules they have to live by them. § 554 p. 1338 – Presiding officer shall make a recommended decision § 554(e) transcript of testimony … a party is entitled to show the contrary upon timely request (as in Castillo)
Central Platte Natural Resources Dist. v. Wyoming p. 378 The presiding officer is the closest thing that an agency proceeding has to a judge. But contrary to a judge, the agency officer will have expert knowledge regarding questions of general fact. Therefore, it is desired that the presiding officer be a specialist, as long as they are not engaged in investigative or prosecuting functions at the same time as advising in the decision. They can not have 1. Prejudged the facts; 2. Pecuniary bias; 3. Personal animus. 1. It was okay that the state used their own hydrologist in a proceeding as a decider 2. Expertise, does not equal bias Do not confuse impartiality w/ “Child Like Innocence” Nash v. Bowen p. 386 ALJ‟s are supposed to be independent. Therefore, to achieve a modicum of control over them and achieve rational across the board decisions, you have to change the organic statute to reflect those desires. E. Morgan; Notice and Hearing Morgan I The one who decides must hear, however, the hearing must be in a substantial sense, you do not have to hear w/ your ears. Morgan II In some circumstances, the ALJ must provide some sort of proposed decision to the parties so that they can focus their arguments to the agency head the APA makes a requirement that there be some intermediate reports. Morgan IV The reviewing Court is not allowed to probe the mental processes of the one who decided. Unless the decision is challenged as an abuse of discretion and the decision maker has failed to explain the decision or make findings and conclusions (Overton Park) 1. The APA, in a way, supplants these decisions 2. Therefore, Morgan IV takes away what the court gave in Morgan I a. How can you police Morgan I, if you‟re not allowed to probe the mental processes? – you can‟t police what he “heard” 3. However, the agency will try and delegate decision making authority to lower level staff in order to satisfy Morgan I 4. (NLRB v. Mackay Radio p. 400) Retreat from Morgan II
a. Where the parties are fully aware of the nature of the agency‟s complaint and its proposed action, and are afforded a full opportunity to be heard on the issues, no report of proposed findings is necessary b. T/f in broad in unfocused proceedings, the contentions of each party must be made known to the other BEFORE the matter is ultimately submitted 5. So while the person who is the decision maker must become familiar w/ the record so that he can make an informed decision (essence of Morgan I) logic dictates that he can‟t become too familiar b/c the sheer vastness of the amount of documents 6. Morgan II – indirectly requires these intermediate reports – this gives NOTICE to the parties of what they are defending against – this is analogous to D‟s in court
F. Cement Institute; Multiple Roles FTC v. Cement Institute p. 408 It is desirable for the commission to have a view, and cumulatively desirable for the commission to gather expertise of the subject matter that it is regulating 1. A decision maker who has already made up their mind about issues of law or policy is not disqualified 2. Similarly, a decision maker who has made up their mind on issues of legislative facts (facts that do not concern the individual party) is not disqualified. 3. Otherwise expertise would be seen as a handicap rather than an advantage a. As long as the decision maker does not have a closed mind on the issue 4. The fact that they have multiple functions is okay b/c that is how Congress designed the agencies 5. When you are concerned about outcome as Administrative Agencies are, there is going to be bias 6. Basically: a. You want expertise b. Congress has purposely assigned multiple functions c. T/f bias, although inherent, is defeated by these first two Withrow v. Larkin p. 414 Combination of functions at the level of the agency heads has been held not to violate the requirements of due process 1. APA § 554(d) allows for agency heads to have multiple functions 2. Unless there is an intolerably high risk of unfairness 3. What is an intolerably high risk? a. If the agency head has shown prejudgment as to a specific party b. If the agency head is incapable of altering previously fixed beliefs 4. Exceptions to both Withrow and Cement Institute are: Applications for Initial Licensing, proceedings for rates, the agency itself
F. Problem of Contacts Professional Air Traffic Controllers Organization (PATCO) v. FLRA p. 423 A reviewing court has discretion whether or not to vacate a decision tainted by ex parte contacts. It should consider whether the contacts irrevocably tainted the proceeding so as to make the ultimate decision unfair. 1. § 554(d) – ex parte – means only w/ in agency as b/w prosecutor and decider a. These two parties may not talk about facts or policy issues b/w each other b. They can not be in interaction period – even on the record c. But other agency members can interact 2. § 557(d) – ex parte contacts is interested persons in general, not just the adjudicator and the prosecutor a. This is wider in scope than § 554(d) b. This applies to any formal adjudication c. So the decider or any other relevant person may not have ex parte contacts w/ an “interested person” d. But just what is an interested person? Must figure that out. e. However, putting the ex parte contact “on the record” will absolve the agency member of this ban. 3. The agency can speak to who an “interested person” is in its organic statute and put them under the purview of § 557(d) 4. There is an exception to ex parte contacts w/: Initial Licensing and Rate Making G. The Constitution’s Vesting of the Judicial Power Crowel v. Benson – Private Rights USSC gave Congress the check to give power to allow creation of non Article III adjudicatory agencies. Congress can creates new statutory rights b/w private individuals and assign the adjudication of these rights to agencies as long as there is sufficient judicial review. 1. Questions of Law: Court must be allowed de novo review or darn near close to it 2. Questions of Fact: Court does not have de novo review – it is in question at this point a. Instead, court is only allowed to review when “clearly erroneous” b. The APA never expressly allows for these types of review by the courts 3. § 556(e) – adjudication must be impartial a. But earlier – it was said that deciders did not have to be impartial b. To reconcile – Must be impartial as to findings of fact, and active in light of the interpretation of the statute b/c he‟s an expert** 4. Why move to allow Non Article III system of adjudication? a. Congress felt that the Courts couldn‟t be trusted to implement statutes that departed so radically from the common law 5. Due Process – DP can be satisfied by merely leaving the option of DP process open if need be w/out giving it fully
a. There is no requirement in the Constitution for any court other than the USSC – the lower courts were legislatively created b. So the argument goes that you only need a judicial-like process b/c there is not constitutional requirement of any court‟s period, except USSC c. T/f, the court‟s can‟t require that all adjudication be with them, they can only require adequacy of DP rights d. So court requires only adequate judicial review Commodity Futures Trading Commission v. Schor & Northern Pipeline v. Marathon Pipe Line Co. The adjudication of claims involving “private rights” (claims b/w individuals) generally can not be assigned to a non-Article III court. (Northern Pipeline) However, if there is a claim b/w a private individual and the government, this can be properly adjudicated by an agency i.e. – rights that arise out of a statute (Schor). 1. Brennan‟s Dissent in Schor (he wrote the majority for Northern Pipeline: a. The balance of where adjudication will be held is now balanced in favor of agencies and not the court b. He also says that this is not what is necessarily wrong b/c court‟s aren‟t even constitutionally required, but what is wrong is the loss of DP to individual‟s private rights c. You need to give those DP 2. He gave 3 categories that were allowed to be outside of Article III courts in Northern Pipeline (These 3 categories still hold true, but are added upon what is allowed from Schor and Crowell) a. Territorial Courts b. Military Courts c. Public Rights (Litigation b/w the Government and somebody else) So how do you blend the cases (Schor/Northern/Crowell) together? 1. Northern: Creates 3 categories of courts that can be outside of Article III 2. Crowell: Sets out another type of situation where adjudication can be outside Article III: a. If what is happening is reviewable by the courts, i.e. fact intensive, so that there can be de novo/or close to it review 3. Finally, there is a balancing aspect under Schor: a. Balance b/w Congress‟ Desire v. Article III values b. The value to having an individual judge under Article III c. What about when the party consents to be outside of Article III? d. Must pay attention to Consent & Judicial Review 4. If there is a decision that an agency trial is necessary under any of the above 3 options you must still consider the need for a jury a. A jury may be necessary for DP and the agency may not be equipped for a jury trial b. Could the need for a jury trial trump Congress‟s intentions? c. Whatever your conclusion, DP has to be served
5. Finally – a private right can be transmuted into a public, and possible agency adjudication a. Union Carbide – The Private right was so bound up in a public right, you don‟t have an enforceable right in Article III court At the end of the day you: 1. Deal w/ cold hard private right, not a gov‟t scheme of regulation = Article III 2. Deal w/ Grey area b/w public and private = Balance maybe agency maybe Art. III 3. Deal w/ cold hard public right = agency adjudication 4. Law: Judges adding requirements to the ones in the statute is disfavored Random Point: Pay attention to timing of organic statute – was it pre-APA? If did not contemplate the APA, and the APA does not necessarily supersede it. It depends on how much Congress intended for the area to be regulated by the APA or left to the organic statute/agency Random Point: APA §§ 551(9), 554(d), 556(d), 557(d)(1) are all places where initial licensing is treated differently.
IV. Constitutional Background to Administrative Rulemaking A. The Constitution’s Vesting of the Legislative Power Whitman v. ATA Non-Delegation Doctrine: Congress can‟t give away its power to legislate. It must give a particular set of intelligible principles. The intelligible principle will actually be filled in by the agency. The principle itself furnishes very little guidance, giving a certain degree of discretion and thus lawmaking is inherent in it. 1. The agency is the implementer of Congress‟s wishes 2. The court has only struck down an agency statute twice under the non-delegation doctrine – but it must be kept in mind Form v. Function Justice Brennan (for the plurality) in Northern Pipeline: Formalistic he wanted a highly formal (broke out into 3 categories and those 3 alone) method. Justice White (dissenting) in Northern Pipeline: Functionalist No real difference b/w the work that goes to Article I (agency) courts and Article III courts. Article III courts are not read out of the constitution, rather it is balancing constitutional values and legislative responsibilities 1. p. 64 bottom – White seems to think that agencies are really just little “law makers” doing the heavy lifting by filling in the details of the Congressional delegation under an “intelligible principle”
2. p. 27 middle – The filling in of the details of policy set forth by Congress in statutes (intelligible principle) is really the essence. They give meaning and content to the vague contours set forth. 3. So is the conferring of legislative power complete? Are there any real limitations to the agencies or is the toothpaste out of the tube? What is the real force of the nondelegation doctrine? a. On a related note – the Constitution was created to give checks and balances – yet the agencies are outside of the structure, can they still be regulated? B. “Non-Delegation and its Future § 553(c) After consideration of the relevant matter presented (by the comment process), the agency shall incorporate in the rules adopted a concise general statement of their basis and purpose. 1. T/f there must be: a. Consideration by the agency of the comments b. A prepared statement of reasons for the rule Non-Delegation Issues to Look For: 1. What was the will of Congress? a. Was this delegation overbroad – i.e. handing over all music regulation to prevent kids from hearing certain things (too conservative) 2. Does the delegation of power threaten to co-mingle separation of powers? 3. Is the Administrator acting w/ in the legislative will? Mistretta v. U.S. Scalia Dissent: Delegation of rulemaking authority w/out other responsibilities is invalid 1. p. 80-81 (David Schoenbrod and Peter Schuck) a. Schoenbrod – agency mandates are too broad, Congress only does half its job Congress distributes rights w/out imposing the commensurate duties b. Schuck – Agency lawmaking is more: Accessible; Meaningful; Effective 2. p. 83 Lisa Schultz a. Courts owe Congress a greater degree of leeway to formulate delegations under constitutional law than they owe agencies to exercise those delegations under administrative law. b. Thus we must respect Congress‟s determination and relinquishment of authority C. Looking at the Administrative State Formalism v. Functionalism 1. Formalism: Committed to strong substantive separations b/w the branches of government, finding support in the traditional expositions of the theme of pure separated powers, such as the maxim that the legislature makes, the executive
executes, and the judiciary construes the law. Thus formalist attempts to ensure that exercise of governmental power comports strictly w/ Articles I, II, and III as laid down in the constitution. a. Formalism implicates three distinct branches of gov‟t b. It wants bright line rules as a restraint to judging i. As a consequence of this, gov‟t is restrained from responding in new and innovative ways c. Court is to strike down anything not expressly provided for in the Constitution d. It limits the passage of law to that strictly laid out in the Constitution i. This makes it difficult for Exec. and Legis. branches to work together 2. Functionalism: This asks whether an action of one branch interferes with one of the core functions of another. The sharing of powers, in itself, is not repugnant to the functionalist, nor is the formation of alliances among the branches, as long as the basic principles of separated powers are no impaired. a. It looks for separate branches, but w/ interdependence b. It looks for autonomy, but reciprocity c. There is a higher amount of discretion in functionalism d. It encourages cooperation among the branches, and thus would permit Exec. and Legis. branches to work together 3. Possible Middle Ground: Go with formalist approach until it no longer meets the needs, then move on to functionalism 4. Purposivism: You try and achieve the purposes of the document. The problem is, how do you decide what the purposes are?
V. Administrative Rulemaking in Action A. § 553 Rulemaking = quasi-legislative, not quasi-judicial like adjudication - Most rulemaking is informal (some is formal under § 553, and thus §§ 556, 557) - Informal = Notice and Comment - Formal rulemaking is very inefficient § 551(4) – Defines Rule - p. 483 – Any of these can be a “rule” Comments: 1. Hybrid Rulemaking: The agency‟s interpretation of its own organic statute or the DP clause may require more a. An organic statute can require beyond § 553 rulemaking meaning the agency can make formal rulemaking procedures necessary b. Meaning the agency has interpreted their organic statute that way OR c. The organic statute has expressly mandated it 2. Court will bootstrap in this scenario – and require the agency to make a record to have a basis for judicial review (a paper hearing)
§ 553 1. § 553(a) – This section applies except to: a. Military or foreign affairs b. Matter relating to agency management or personnel … 2. § 553(b) – General notice shall be published in the federal register a. Statement of time, place, and nature of public rulemaking b. Legal authority under which the rule is proposed c. Substance or description … d. Escape Clauses: There are two of them i. Interpretive rules, general statements of policy ii. Agency finds for good cause … 3. § 553(c) – No requirement of formality, concise and general statement, if rules are on the record - § 556, 557 apply (but doesn‟t outline how this is triggered) 4. § 553(e) – Interested person shall have the right to petition for the issuance, repeal, or amendment of a rule United States v. Florida East Coast Railway Co. p. 487 Under Rulemaking – a reference to a “hearing” in the organic statute is not enough to require an agency hearing – i.e. “after a hearing” will not trigger §§ 556, 557 as in adjudications under § 554 You have to make a further inquiry to decide if you need “on the record” under § 553 1. Court makes a presumption that rulemaking is off the record. Opposite of Adjudication. 2. Unless Congress says Subject to 556/557 “on the record” only 553 applies 3. This is a USSC decision saying that there is a presumption a. For Adjudication there is no USSC decision saying one way or the other on the presumption of “on the record”, there is a circuit split Sugar Can Growers Cooperative of Florida v. Ann M. Veneman p. 493 If it looks like a rule, § 553 is going to apply unless one of the exceptions from § 553(a)(1)-(2) applies. 1. An agency can take themselves out of an exception if they want too. You‟d have to look hard at the federal register to find if they did or not. 2. Vacating v. Remanding the decision: a. There is precedent either way – the court has discretion from precedent to do either b. In the DC Circuit (under this case) the court can do either B. Vermont Yankee; “General Facts” Vermont Yankee Nuclear Power Corp. v. Natural Resources Defense Council, Inc. p. 499 Courts are not free to require the agencies to follow additional rulemaking procedures not prescribed in the APA or the organic statute, such as oral argument or cross examination.
1. Discretion as to formulation of policy is left to the agency a. Agency is in a better position to design procedural rules adapted to the particularity of the industry 2. Why give discretion? a. Prevention of MMQBing by the court‟s agencies have to make decisions for what procedures to grant before they know the outcome. And the courts could require the agency to involve more procedure after the fact, removing the flexibility of the agency i. An agency can‟t just gear up and require a formal adjudication b. Consistency The APA is trying to create regularity, courts must allow it to do this, otherwise, the court can come in and impose their will – creating an ad hoc system i. Courts tend to do Court like things when they get involved, and this means imposing procedures ii. Agencies are experts in their area – so what is a judge really going to do other than much things up by imposing judge like things c. Clarity or Separation of powers are other arguments as well 3. Possible Narrow Reading of Vermont Yankee: You can‟t turn an informal procedure into a formal one, and that is what was done by allowing cross examination. Cross examination is a very formal thing. So this could be a rail against allowing cross examination in informal proceedings. 4. Will imposing procedural demands on agencies create: a. Ossification – will too many rules lead to ossification and stagnation of the process? b. Or a stable APA – do we give a limited number of rules to create stability and formalize thus leading to a more efficient system of judicial review? C. Notice and Opportunity NRDC, Nova Scotia, and Independent Tankers are cases that have survived Vermont Yankee – so pay attention to them** NRDC v. EPA p. 519 A final rule which departs from a proposed rule must be a logical outgrowth of the proposed rule. The essential inquiry focuses on whether the interested parties reasonably could have anticipated the final rulemaking from the draft permit. 1. What about the Wash, Rinse, Repeat problem? – when do you get to comment again on rules that come out of the agency that are a result of the initial comment period? 2. Does this rule seem to be contrary to Vermont Yankee doesn‟t this impose a vague “after the fact” ability for the courts to come in and practice hindsite? a. You have to anticipate wiggle room for this type of stuff b. Although the trend is towards textualism (Vermont Yankee) the courts are just not satisfied w/ the process that comes from the agencies so they put a little oomph in it
3. This rule contemplates a record from which to derive what the “logical outgrowth” is however, there is no APA guidance as to what the record is or supposed to be a. The term “record” is left open and ambiguous by the drafters of the APA United States v. Nova Scotia Food Products Corp. p. 524 Court will require a statement of findings and reasons as part of the final rule as a result of the “concise and general statement” requirement of § 553. This statement enables a reviewing court to see what major issues of policy were ventilated by the informal proceedings and why the agency reacted the way it did. 1. As a result, the findings are neither concise nor general 2. “Bootstrapping” Judge requires the statement of findings and reasons by bootstrapping up from the requirement of Judicial Review a. Issue 1: He requires a record of all scientific findings b. Issue 2: He requires a statement beyond the “concise and general” c. Logic = We can‟t form an adequate judicial decision w/out a record i. Meaning – we can‟t have judicial review w/out these other things, so we must need those (bootstrapping) 3. The APA does not provide for this case‟s point of view But the court is trying to encourage better rules, which is still good law 4. The record is to be the agency‟s record not a new one compiled by the court a. It is for the agency to consider the details (i.e. the FDA is to understand what botulism in whitefish is, not the court. The court can‟t figure that out) D. “Concise and General Statement”; Exceptions Independent U.S. Tanker Owners Committee v. Dole p. 540 The adequacy of the statement of basis and purpose is linked w/ the court‟s obligation to ascertain whether the rule is arbitrary and capricious. The statement needs to ventilate major issues involved so that the court can determine whether the rule is arbitrary. 1. Bork, the Justice, made the textualist argument for Vermont Yankee 2. But in this case, he says that you can‟t allow too literal of a reading (this raises flags) 3. He also makes up the remedy available: (DC Circuit) a. You are allowed to vacate the rule – he is supposed to do this when there is a violation of the APA b. But then he exercises a power to w/ hold the mandate (this is no where in § 553) Utility Solid Waste Activities Group v. EPA p. 552 End Result: Even though § 553 doesn‟t require a paper record in a Notice and Comment hearing, and Vermont Yankee would seem to say that the court can‟t add this requirement this isn‟t the case b/c you could be required to provide a paper record in a Notice and Comment proceeding
The agency will err on the side of more elaborate procedure in order to insulate themselves from the court review in case the court requires a record. This in turn, prevents MMQBing
E. How to Make Policy SEC v. Chenery Corp. p. 556 & NLRB v. Bell Aerospace The choice b/w proceeding by general rule or by case-by-case adjudication generally lies w/in the discretion of the agency. However, where retroactive application of a new policy would have serious adverse consequences, a reviewing court may find that the agency abused its discretion. Rulemaking: Is prospective, therefore the parties subject to it are on notice and cannot be surprised by a retroactive change in the law. They apply across the board. This method is not subject to separation of functions and ex parte contacts. Published in Federal Register making it accessible to the public Pros: 1. It avoids costs of legislative fact finding through trial like procedures 2. It eliminates need to re-litigate policy issues in the context of disputes with no material differences in adjudicative facts 3. Yields much clearer rules than can be extracted from a decision involving a specific dispute alone 4. It provides much clearer notice of what is permissible or not 5. Avoids the widely disparate temporal impact of agency policy decisions made through ad hoc adjudication 6. It allows all potentially affected segments of the public to participate in the process of determining the rules that will govern their conduct and affect their lives Cons: 1. B/c rulemaking is more open – it leads to ossification – too much input, paralysis by analysis, over proceduralization 2. Agency policies are also more vulnerable to in rulemaking b/c of the accessibility to outsiders Adjudication: Is case by case, and has retroactive application of a new principle to the parties in the case. Usually singles out an individual or individual company. Input only comes from parties to the case. Subject to restrictions regarding separation of functions and ex parte contacts. Not readily accessible to non-parties. 1. This is different from Chevron discretion, which is filling in the gaps This is discretion to choose b/w methods 2. The court says they have discretion to choose absent abuse of discretion but this never happens 3. Justice Jackson Dissent:
a. Can‟t leave it to the discretion of the agency to put the flesh on the bones of the statute whenever they feel like it b. They need to conform to some rules c. Parties need to be able to know what set of norms they need to comply w/ d. The law is reduced to mere futility if it is unknown and unknowable 4. Why choose adjudication over rulemaking? a. One possible reason is b/c once an agency puts out notice of a proposed rulemaking, people can start “shooting” at the target – you can see where the agency is going b. Agency might want to prevent that F. Prospectivity Bowen v. Georgetown University Hospital p. 578 Legislative rules are ordinarily prospective in application, although interpretive rules are frequently retroactive. Absent an express grant of authority from Congress, agencies are not authorized to adopt retroactive legislative rules. 1. Kennedy: There was no express grant of authority in the organic statute to allow the agency to adopt retroactive regulations a. There is some language in there, but it is sparse b. Kennedy avoided making a ruling on the APA by doing this 2. Scalia (concurring): The APA, by its own terms, prohibits retroactive rules. § 551(4) defines rule as an agency statement of “future effect” t/f a rule must be prospective. He applies the opposite w/ Adjudication, saying it must be retroactive. a. The future of the court is probably w/ Scalia‟s method b. Scalia made a textualist argument Presumably Congress can override the APA w/ the organic statute though c. Scalia wants to eliminate the ambiguity that Kennedy retains 3. Scalia also mentions Secondary Retroactivity: a. Future consequences from past behavior – the real affect is in the future b. Secondary Retroactivity is okay unless arbitrary and capricious 4. If an agency wants to act retroactively – all it has to do is proceed by adjudication Epilepsy Foundation of Northeast Ohio v. NLRB p. 574 There is soundness in allowing flexibility in choosing b/w prospectivity and retroactivity when it comports to notions of equity and fairness.
G. Rulemaking and the Executive OMB Quad 1: Consultations E.O. 12866 §4 Submit to OIRA Return to Agency for possible revisions: (possible presidential intervention) Quad 3: Submit to OIRA Possible Returns for Revisions Presidential Intervention Agency Quad 2: Formulate Priorities Regulatory Plan Unified Regulatory Agenda Formulate Draft and Supporting Analyses: (This is what forms the process for NPRM) Quad 4: APA § 553 Stage 1: NPRM Stage 2: which leads to N&C Stage 3: Leads to Promulgation of Rule
1. Agency can‟t start off in Quad 4 it must go through steps first a. The president can ask for info from the agency and get in the middle of the process – just how much involvement is a question 2. Agency must follow steps prior to Quad 4 or else it is in violation and a right of judicial review is created a. Must follow the E.O. 12866 AND Small Business Regulatory Enforcement Act 3. None of the steps in Quad 2 are binding on the agency 4. There is a back and forth b/w Quad 1 & 2 a. OIRA gives tries to give effect to the president‟s policies, which have become more influential in recent presidencies So the OMB and OIRA push the president‟s agenda 5. There is a back and forth b/w Quad 3 & 4 a. OIRA will give its input and the draft is redrafted in light of OIRA‟s comments 6. Net Result: The agency only truly controls Quad 4 7. Does adding this level of review make the system more effective or does it lead to ossification b/c there is more analysis? a. OIRA has scientists and staff that look through all of the agencies proposed regulations and see if the agency is comporting w/ the President‟s agenda b. They also look to see if agencies are conflicting w/ each other Thus helping to resolve conflicts 8. Who are the OIRA staff: a. Outside agents, but they will be sympathetic to what they want to do
9. Once the agency goes public w/ its plan and agenda: a. You already have a heavily influenced process A lot of heavy lifting may have gone on prior to Quad 4 b. The court only looks at what happened in Quad 4 t/f they are looking at an already heavily influenced process c. All of the goings on in Quad 1 is off the record – so court doesn‟t have access d. Agency might not want to fight president‟s agenda either 10. This leads to the question Isn‟t the agency supposed to be doing the bidding of Congress – not the president? G. Making the Decision Sangamon Valley Television Corp. v. US p. 665 In some situations, a proceeding that is nominally rulemaking is really more like adjudication in the sense that it decides a dispute b/w several outside parties. In this situation, ex parte contact from one of the disputants is improper, and will result in setting aside the agency rule. 1. The FCC proceeded by rulemaking instead of adjudication in order to avoid the restrictions that are inherent in ex parte contacts w/ an adjudication. 2. This was even though there was only one party Thus is was a sham by the FCC HBO v. FCC p. 666 Ruled that ex parte contacts in rulemaking were unfair to members of the public who were cut out of the backroom dealing. Moreover, the court could not review a rule that resulted from ex parte contacts rather than from the record that was made by public comments. Net Result: 1. Ex parte contacts are prohibited in adjudication (unless put on the record). If ex parte contacts are made, then the party making the contact may be penalized, and a decision that may have been tainted may be vacated by the court. 2. In contrast, ex parte communications are generally permitted in rulemaking unless a statute or regulation prohibits OR unless the situation is nominally rulemaking and is actually more like adjudication. a. In such a case, ex parte is prohibited. 3. T/f HBO is not correct. 4. Also HBO could be contrary to Vermont Yankee b/c the court adds a procedural requirement not set forth in the APA. Comments: 1. In HBO, Judge Wright requires that he witness an adversarial exchange b/w people on the record There is no such requirement that allows this 2. Judge Wright requires fundamental notions of DP and FAIRNESS once again DP does not apply in Rulemaking this is according to Bi-Metallic and this is the rule
3. Sunshine Act only banned ex parte contacts in adjudication – can‟t be used in rulemaking
E.O. 12866 Agencies must adopt a regulatory assessment early in the adoption process of a significant regulatory action. The regulatory assessment must make a careful examination of alternative approaches and perform a cost-benefit analysis. 1. This order is enforced by OIRA 2. Judicial Review is granted by Small Business Regulatory Enforcement Fairness Act
VI. Judicial Review of Administrative Action A. The categories; Consistency of Application § 706 Scope of Review Shaw‟s Supermarkets, Inc. v. NLRB p. 908 Duty of Consistency Agencies are free to change legal or policy positions take in prior adjudicatory decisions, but they must explain when they have done so and why. They are not at liberty to ignore prior precedents w/out explanation. 1. Breyer uses CL doctrine, not statutory authority, to come up w/ this outcome and this is never explicitly stated in the decision 2. But how was it framed? a. Probably quoting Atchison b. Bottom of p. 911** – “Unless an agency either follows precedent or consciously changes the rules developed in its precedent those subject to the authority of the agency cannot use its precedent as a guide for their conduct, nor will that precedent check arbitrary agency action.” c. Corollary If the agency said this was a rational course to pursue, then there was a reason to follow it in the first place. T/f presuming that they were rational in the first place, now that they are stopping, there should be a reason for stopping 3. If pressed you might say that Breyer used the Arbitrary and Capricious standard 4. This case is useful for when an agency has easy precedent BUT what about an agency like the IRS where each situation is unique, making it nearly impossible to follow precedent? a. In this situation it would be impossible to do – so court‟s won‟t enforce it 5. Accardi Doctrine: An agency must follow prior adjudication regulations until they are validly rescinded or amended
Butz v. Glover Livestock Commission Co., Inc. p. 915 Agency‟s remedy must be upheld unless it is without warrant in law or justification in fact. There mere fact that the remedy was unusually severe did not necessarily indicate that the suspension violated this standard. 1. J. Brennan does not follow the consistency doctrine in this case Why? a. This case is quasi - criminal sentencing – and agencies normally don‟t have discretion in the criminal realm b. At the time this case was decided though The agency in this case did have discretion to sanction c. The agency had discretion w/ in its general sentencing guidelines – and the agency only has to follow its guidelines d. So the mere fact that this sentence was more severe than normal, did not make it invalid or inconsistent necessarily e. T/f the agency acted “consistently” and w/in its discretion – and there is no justification for turning it over B. Consistency Continued Stieburger v. Heckler p. 922 Agencies must apply the law of the circuit that they are in. They must acquiesce to that Circuit‟s law. 1. Arguments for this rationale: a. You can‟t be a legal actor in a circuit and not follow the precedent of that circuit b. If agency is allowed to follow its own rule, then the litigant will have to have resources to litigate two different sets of law c. If Agency has problem w/ this, they can complain to the USSC or ask Congress for a change 2. Arguments Against: a. Congress wants agencies to come up w/ uniform law b. Agency has a responsibility to apply its statute w/ nationwide uniformity – so it should be able to decide which standard to use C. Universal Camera Universal Camera Corp. v. NLRB p. 940 A court will not set aside an agency finding if it is supported by “substantial evidence” based on the whole record. The whole record means that the court must look at both sides of the record. It is not sufficient to merely look at the evidence that supports the agency‟s conclusion. Substantial Evidence means relevant evidence that a reasonable mind might accept as adequate to support a conclusion.
Court must give any discrepancy b/w the Agency decision and the ALJ‟s decision a “hard look.” Generally, a disagreement b/w the two detracts from substantiality of the evidence that supports the agency‟s findings. 1. The Court found that Congress had expressed a “mood” in the APA favoring stricter review of agency determinations of fact than had formerly been the practice 2. The court must reach its own conclusions after reviewing the record for substantial evidence on the whole a. By the time the agency is done it must take responsibility for what it has done including the facts b. The court must look to see if the agency has done this correctly c. If the agency departs from the ALJ‟s findings, the court must assess the correctness of the agency independently d. The court must give the ALJ no weight or simply accept the ALJ‟s findings as true unless clearly erroneous. 3. The reviewing court of this standard should be the Court of Appeals § 706(2)(E) – “Substantial Evidence” 1. Substantial Evidence necessarily deals w/ formal proceedings under §§ 556 & 557 (i.e. formal adjudication) – it refers to only §§ 556 & 557 a. There is a record required in these types of proceedings – and w/ records – you need to apply substantial evidence standard § 706(2)(A) – “Arbitrary and Capricious” 1. Arbitrary and Capricious is used w/ informal proceedings b/c there is no record to review t/f substantial evidence can‟t be used D. More on review of factual determinations Allentown Mack Sales and Service v. NLRB p. 953 When the agency is applying a different evidentiary standard than the one claimed to be articulated, the USSC will review the application of the substantial evidence test by the lower court. T/f you must apply the standard that you articulate. Two Issues: 1. Meaning of “Doubt” a. Scalia: Uses the dictionary definition – and assigns it a particular meaning b. At this point he should remand b/c he imposes a new meaning and the NLRB must see if they have met this standard 2. Universal Camera led us to believe that the reviewing court should be the Ct. of Appeals So why does the USSC take this case? a. He leaps over the Court of Appeals and starts reviewing the evidence on his own Kermit Bloch testimony b. But her never saw Kermit, the ALJ is the one who did
c. He does this b/c: i. It seems that the NLRB is applying a different standard than the one they articulated 3. This disallows agencies to develop as the CL did they are not free to push the limits of their standards to come up w/ new law Association of Data Processing Service Organizations v. Board of Governors p. 965 There is no difference b/w substantial evidence and arbitrary and capricious tests Do NOT make the mistake of not calling it “Substantial Evidence” when it is formal and “Arbitrary and Capricious” when informal though 1. If you need to figure out which standard of review to use – how do you go about it? a. You start w/ the organic statute b/c it can modify the APA if it does so explicitly b. From there you‟ll have to discern from the text 2. To have substantial evidence you also need a record to review 3. Arbitrary and Capricious is the default, catch all position E. Overton Park and State Farm Citizens to Preserve Overton Park v. Volpe p. 989 I. De Novo Review: De novo is permissible only when a statute specifically authorizes it. It must be triggered by something outside of the APA. De Novo review might be possible under the APA when: 1. The action is adjudicatory in nature and the agency‟s fact finding procedures are inadequate. 2. When issues that were not before the agency are raised in a proceeding ot enforce non-adjudicatory agency action. II. Arbitrary and Capricious: The standard for informal agency action is arbitrary and capricious. (APA § 706(2)(A)). To make this finding the court must consider whether the decision was based on a consideration of the relevant factors and whether there was a clear error of judgment. The inquiry should be searching and careful, but narrow. The court is not empowered to substitute its judgment for that of the agency. III. Substantial Evidence: Substantial Evidence is required in a case subject to §§ 556 & 557 or otherwise reviewed on the record of an agency hearing provided by statute. 1. This is also known as the “hard look doctrine” a. Court must familiarize itself w/ the record and the agency‟s reasoning process in order to decide whether in fact the decision was reasonable 2. Camp v. Pitts – The court will only consider material that was before the agency at the time it made the decision
Motor Vehicle Manufacturers Association v. State Farm Mutual p. 1002 The arbitrary and capricious standard applies to the policy or discretionary determinations embodied in the adoption, modification, or revocation of legislative rules. In supporting the rule on judicial review, the agency is limited to the reasons articulated in the statement of basis and purpose. The agency may not concoct additional explanations at the time of judicial review 1. The court says that rescinding the passive restraint requirement is arbitrary and capricious b/c: (all reasons) p. 1009 bottom a. They didn‟t have any evidence to support their decision b. They didn‟t explain the evidence which was available c. They didn‟t offer a rational connection b/w the facts found and the choice made – didn‟t explain why the changed their mind d. The agency must consider alternatives and must give reasons e. What effect does Chevron Doctrine have on this? i. Does it just boil down to how much deference you‟re going to give? 2. For example J. Rehnquist p. 1012 a. Does not believe agency was Arbitrary and Capricious b. He also points to the change in administration for the change in policy c. How much effect can this have and can this alleviate the agency from being brought under the Arbitrary and Capricious review? d. Rehnquist seems to think so F. Chevron Chevron v. Natural Resources Defense Council p. 1026 Step 1: Has Congress spoken clearly to the precise question at issue? 1. If the intent of Congress is clear that is the end of the matter b/c the court and the agency must give effect to Congress‟s clear will a. To determine clarity: i. Look at dictionary definitions of terms of statute ii. Try to put disputed portion of statute in context of the rest of it iii. Look at other statutes passed by Congress in the past iv. Legislative History Step 2: If answer to Step 1 is “The statute is silent or ambiguous w/ respect to the precise issue” Then Step 2 1. If agency adopts a reasonable OR permissible interpretation of the relevant statutory provision then that reasonable interpretation must be deferred to a. This determination is similar to the court‟s power to determine whether agency decisions are arbitrary and capricious 1. Court‟s now act w/ deference to agencies working w/in their bounds 2. The law is more than what is just made clear – and we can‟t just leave to the agency‟s determination what Congress doesn‟t make clear w/out policing by the courts
3. p. 1043 – Chevron is a recognition that sometimes interpretation requires more than uncovering the legislative will – must also look to extra-textual considerations to guide you how a statute should best be understood 4. p. 1037 – link up w/ Mead Relationship b/w Chevron and Motor Vehicle: (2 different tests) 1. Chevron asks whether Congress has spoken clearly to the precise issue … etc. If yes, then give effect, if no, move on to step 2 2. Motor Vehicle asks if the court finds that after exercising a hard look, the agency has acted arbitrary and capricious (did agency give: particulars, explain why it changed its mind, or look at all the relevant factors?) 3. Chevron focuses on the language and whether the meanings are acceptable according to the 2 step test 4. State Farm focuses on the process of the agency and whether or not it is arbitrary and capricious 5. If you are operating at Chevron Step 1 and the agency passes it you can still move on to State Farm (The agency will have to pass both tests) 6. Chevron = Deference ----- Motor Vehicle = Hard Look G. MCI MCI Telecommunications v. AT&T p. 1052 In the event that there relevant statutory language is ambiguous – and the agency gives it a meaning that clearly delegates too much authority on the agency (not reasonable) – the court can resolve that ambiguity in a way that more accurately reflects Congress‟s intention b/c the agency has violated the “Arbitrary and Capricious” standard under Chevron. The delegation of power must be explicit or implicit from Congress to be afforded Chevron deference. 1. Congress could not have intended to delegate a decision of such economic and political significance to an agency in such a cryptic fashion. 2. Congress could not have ambiguously delegated such a large responsibility 3. In this case, Scalia uses the dictionary to arrive at a fixed meaning for “modify” a. There is no way that in 1934 (when the organic statute was written) that Congress meant for the FCC to be able to give modify such a broad reach that it encompassed the modern telecommunications industry as the FCC has construed it 4. He uses the dictionary to transfer power from the agency to the court b/c now it is the court relying on some extrinsic material to come up with the definition thus putting the power in the court a. As opposed to granting Chevron deference where the agency is free to come up with a meaning 5. He uses the dictionary to come up with a meaning from an accumulation of meanings 6. Using this “textualist approach” is different slightly from Chevron b/c:
a. Chevron allows for ambiguity b. MCI textualism comes up with a fixed meaning c. Using the textualist approach cabins judges and is this desirable?? 7. At any rate Scalia is able to narrow agency authority under Chevron a. But does he have any statutory authority from the APA? H. Mead; Skidmore Skidmore v. Swift & Co. p. 985 Rulings, interpretations, and opinions of the administrator of the agency, while not controlling upon the courts by reason of their authority, do constitute a body of experience and informed judgment to which courts and litigants may properly resort for guidance. The weight of deference given will depend upon the thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier pronouncements, and all those factors which gave it power to persuade, if lacking power to control.
United States v. Mead Corp. p. 1068 A provision qualifies for Chevron deference when it appears that Congress delegated authority to the agency generally to make rule carrying the force of law, and that the agency interpretation claiming deference was promulgated in the exercise of that authority. Delegation of authority may be shown in a variety of ways, as by an agency‟s power to engage in adjudication or notice and comment rulemaking, or by some other comparable congressional intent. An interpretation is more worthy of deference if the agency carefully considered it at a high level. (Skidmore). Similarly, the formality by which the interpretation is expressed is relevant to deciding how much deference is owed. 1. The majority in this opinion wants a variety of deference given of varying administrative actions The court needs to tailor to variety 2. Congress delegates both explicitly and implicitly a. “It can be apparent from the agency‟s generally conferred authority and other statutory circumstances that Congress would expect the agency to be able to speak w/ the force of law when it addresses ambiguity in the statute or fills space in the enacted law, even one about which „Congress did not actually have an intent‟ as to a particular result.” 3. Indicator = was the action on the record/formal 4. Scalia Dissent why does formality automatically equal force of law? Formality alone does not create power. a. Why does formality of procedure, which the majority opinion says is a good indicator or Chevron Deference, have to be linked w/ agency power to resolve authoritatively questions of law? p. 1077 middle ¶
b. Why can‟t agency be given the force of law by other means? Resolve ambiguities other ways. P. 1078 Middle ¶ “Surely …” c. It is impossible to live w/ the indeterminacy of Skidmore p. 1079 bottom i. Scalia wants on/off switch – and license to use dictionary and plainly wants to simplify 5. Mead does not overrule Chevron It focuses on the delegation of power and ambiguity is no longer a sufficient indicator that there has been a delegation a. In other words it takes away the “default” to there being a delegation of power to the agency under Chevron § 706 p. 1247 1. § 706 is what controls unless the organic statute supplants it
On the Record Proceeding Findings of Fact Substantial Evidence Notice & Comment Arbitrary & Capricious Informal Adjudication Arbitrary & Capricious
Judgment (application of law to fact). This is basically the same as below.
Court must accept agency‟s interpretation if it is reasonable. Chevron is applicable, or legislature delegated application issue to the agency. Give “Hard Look.” “Hard Look” – Arbitrary & Capricious Review. Court must not substitute its judgment. Court must defer.
Discretion (policy formulation). This is basically the same as below.
Conclusions of Law
Court must defer to agency‟s reasonable interpretation if interpreted law is ambiguous. Chevron, MCI, Skidmore, Mead. No De Novo Review
Same. Look at: Chevron, MCI, Skidmore, Mead. No De Novo Review.
Same. Look at: Chevron, MCI, Skidmore, Mead. No De Novo Review.
VII. Process Herein of Londoner, Bi-Metallic, and Goldberg Goldberg v. Kelly A hearing must occur before the deprivation of liberty or property occurs. Due Process protects entitlements. A statement of findings and conclusions is necessary where a “trial type” hearing is required by DP. In either Adjudication or Rulemaking, the process must include the right to oral communication w/ the decision maker. Londoner – Defines adjudication Bi-Metallic – Defines rulemaking