Administrative Law Outline Prof. Nina Mendelson prepared by W.A. Novomisle (not sure year Fall 2003?) I. OVERVIEW: ADMINISTRATIVE AGENCY FUNCTIONS AND RELATIONSHIPS Remember that this is the Fourth Branch – it is not contemplated in the Constitution All agencies get their authority from somewhere! Either Congress or the Pres What do the agencies do? -license/permit behavior -Visas and work permits a la ECNS/INS -Taxation and penalties IRS -Parks and Natural resource maintenance -HUD -Entitlements -Standard setting like EPA and OSHA Agencies do all three functions of the government – executive, legislative and judicial FDA v. Brown and Williamson Tobacco (tab A) three major topics: the meaning of the statute (judicial), the agency interpretation of the statute, concern over the FDA changing its mind over time. First the meaning of the statute: The Ct. returns to the intent of the original enabling Congress (not a very strict constructionist move). The original congress did not want the FDA regulating tobacco. Also points out that no statute was passed enabling the FDA to control. Dissent points out there is no statute saying that it is not in the FDA‘s scope. Ct. seems overall concerned with the scope of the reg, wanted the leg to pass it. Agency‘s interp of the statute: it seems reasonable on its face. But the Ct. makes a step one Chevron move to say that Congress has spoken on this issue. Very bizarre discussion about how if they were to regulate it at all, they should ban tobacco; but they don‘t so therefore the interp is unreasonable! Change of mind – more on this with time. II. THE CONSTITUTIONAL STATUS OF THE FOURTH BRANCH A. ARTICLE I CONSTRAINTS ON AGENCY LAWMAKING UNDER ARTICLE I (NONDELEGATION) Art I § 1 ―all legislative powers herein shall be vested in a Congress‖ Art I § 8 Cl. 18 ―necessary and proper‖ to execute the foregoing powers All the Ct. looks for is an ‗intelligible principal‘ Only two cases ever stuck down, both in 1935
Schecter: couple of problems: first the delegation is to a trade association, not a part of the government. Also there are contradictory goals in the statute without any guidance on how to balance resolve this tension. So strike down because (1) not accountable and (2) lack of Congressional Control Amalgamated Meat Cutters: Very broad language is upheld. Why? Time limited, self limited (must follow own rules), only the government is involved. Aggressive statutory construction – the POTUS must avoid gross inequality even though not in the statutory language. Note that the two above decisions do not help with Separation of Powers concerns! They are focused on abuse of agency discretion. Benzene: An exercise in aggressive statutory construction to avoid nondelegation problems. Stevens would read in a requirement that there be significant health costs. Powell is even more aggressive and would ask for a nexus requirement. Rehnquist was the most influential. He wants Congress to give more guidance than they have. He wants the intelligible principle to go so far as to give a ―judicially enforceable standard.‖ The other part of the Rehnquist concurrence is that he agrees with the dissent in that Congress cannot avoid balancing lives against $$ - the difference is that dissent thinks that Congress did it, and majority does not think they did. In the end Benzene majority adds a statutory requirement to avoid the Constitutional problems. They add to the statute that OSHA can only regulate if there is a ―significant risk‖ though this is not in the statute at all. Take home message – nondelegation as statutory construction! Perverse result is that the Ct. tries to constrain the agency, but by forcing them to consider costs, they are actually increasing their discretion in rulemaking. Lockout/Tagout: The Ct. takes the nondelegation principle even further. Now the Ct. is concerned that there is no guiding principle on what OSHA will regulate and what OSHA will not regulate. But rather than striking the regulation down as unconstitutional, they ask the AGENCY to give the intelligible principle. On remand the agency comes up with 6 reasons for the rule they made. Ct. rejects every one of them except for ―overriding purpose to provide a high degree of employee protection.‖ The rule is saved on that explanation alone. Whitman v. American Trucking: The EPA wants to lower acceptable limits for Ozone and Particulate Matter in ambient air. Problem is that these are non-threshold pollutants so there is no such thing as a ―safe level.‖ EPA does its best to determine the appropriate criteria, transient health effects, etc. and the Ct. rejects all of the science. The statute is clear – it is inappropriate to consider costs. The D.C. Cir. is getting really aggressive here in the intelligible principle doctrine. It has left the idea of Sep of Powers and is now using this to attack agency science and policy. Looking for ―determinate criteria‖ for how
the agency is coming to its decision. The problem is that this was in high tension with Arb & Cap. review as well as Chevron deference. Another problem with determinate criteria is that it is much more strict than the standard that Cts. would hold a legislature to – if 62 does not get Medicare, but 63 does, this is arbitrary and almost assuredly upheld. Supreme Court ends all of this in American Trucking. The unanimous Ct. says that the statute is unambiguous, costs cannot be considered, and even though there is a huge economic impact, the Agency did what it was supposed to do in issuing the regulation. Note FN 4 in opinion. There is an Executive Order that every agency must consider costs – so the EPA looked at them in the drafting process. But because the statute does not allow consideration of this, the Ct. does not look to any of these questions. This is in tension with Benzene because there is the concern of a huge expensive rule where there is some ambiguity over the science. But ultimately 1) the Clean Air Act was supposed to be technology forcing (Breyer) 2) the states implement so there is less concern over the gov‘t imposing heavy costs onto industry 3) Benzene needed aggressive construction to save the statute, but in Am Trucking the Ct. was saying that the AGENCY cannot be required to clear up a statute. B. ARTICLE III CONSTRAINTS ON AGENCY ADJUDICATION There are four themes for the delegation issue over adjudicatory power: 1) Constitutional Text, 2) Checks and Balances as well as Separation of Powers 3) Lack of political isolation if adjudicated in an Agency 4) Judicial expertise. Crowell v. Benson: An agency is allowed to adjudicate any public right, but only limited private rights. Public rights are between a private individual and the government. Private rights are strictly between private individuals. The strange thing is that the claim is a workman‘s compensation claim where the employer is liable to the employee if the agency adjudication says so. So this is a statutorily created liability between private individuals. And the Ct. glosses over this, although the claim is analogous to a private right, not a public one, they still allow agency adjudication. There is a strong functionalist tendency in the decision. The idea is that there is judicial review, and therefore the delegation is okay because Federal Cts. are not totally cut out of the loop. The Ct. makes a strange exception that is not really used any more – the Ct. carves out jurisdictional facts, i.e. those that are needed to determine if the statute applies, and in those cases the Fed. Ct. does de novo fact finding, rather than the typical deference to the record developed in the Agency. Northern Pipeline: Cuts the other way. The Ct. strikes down a delegation of authority. Here the S.Ct. does not allow a bankruptcy court to adjudicate a private claim, a contractual dispute. There are the same functionalist reasons to allow for the delegation as in Crowell but the Ct. takes a more textualist approach. Contracts are CORE private rights and that cannot be
adjudicated out of Art. III. Brennan distinguishes Crowell based on the standard of review that the Fed. Ct. would apply. Bankruptcy review is the ―clearly erroneous‖ standard of review, and that is more deferential than the ―not supported by the evidence‖ standard that a decision would get if done in an agency. Therefore, b/c agencies get a more strict review, then they also get more leeway to delegate. The debate: which is more deferential? Not entirely clear b/c Universal Camera makes ―substantial evidence‖ review seem VERY deferential – like a JNOV standard. However, after Allentown Mack the standard may not be all that deferential at all, so perhaps this line of reasoning is still valid. This debate is not on the exam. To what extent can Congress delegate adjudicatory powers? Public vs. Private Rights Public –a private claim integrated to a statutory schedule (Thomas) Private-state law based (CFTC case) Thomas v. Union Carbide Unanimous SC decision found that delegation to EPA to adjudicate controversies b/t pesticide makers re compensation for information was constitutional Is a private right but one ―created by congressional statute‖ o Essentially looks like one party is paying another for a service—but it is the government that allows the second party to have access to the information—looks more like a public right. o Congress created the right and can attach whatever conditions to it wants, didn‘t have to create this right at all in the first place. (should argument apply to rights, for example, such as rights for non-citizens?-still need to be constrained by human/civil rights, due process etc. BUT what about Art III concerns? Can‘t we just have separate courts/ process…equal protection claims might arise…are there political influences on the separate body that might compromise fairness, is the body truly independent) CFTC v. Schor Customers can sue brokers who have allegedly violated the act—for reparations under the statute, can bring suits in either forum, but there is Is this process more efficient—consolidate issues etc in one forum? But the counterclaims are usually brought in state courts… Schor chooses agency jurisdiction, but the broker counterclaims in state court—Schor loses then claims that this tribunal did not have the right to decide such a case… DC circuit read the statute narrowly, that the tribunal could not decide the counterclaim, but the SC disagrees and evaluates the Art III issues. o Court takes a functional or balancing approach: these are private claims…but O‘Connor looks at the purpose of the statute and how much Art III power (to review) remains after the delegation o Schor had the right to choose b/t the two courts, but by going to the CFTC he waives the right to have private right adjudicated by an Art III court.
o Structural concern over having an independent judiciary—is there an art III court that retains some attributes of judicial review/ supervision (as in Crowell). o How much is the agency doing really? Only making decisions about claims closely related to the statute –a narrow particularized area of law o Congressional purpose—useful and functional, or was intention to cut judiciary out (in which case we should be more concerned, SOP problem). Here parties have to consent to jurisdiction, only limited role in adjudication, intent is not to circumvent Art III courts. What if Schor had a CFTC claim and a pendant state law claim for fraud against Conti? Then Conti decided he preferred a state court to decide the case—does this make a difference that he does not waive right, does not agree to CFTC jurisdiction? Does the Art III evaluation differ? Could it possibly be that the statutory scheme is ok for Schor but not Conti—is this inconsistent? For private claims, is appellate review always necessary? Could we have saved Northern Pipeline, just give de novo review for everything? So far we have looked at 2 things: Rulemaking: quasilegislative powers Adjudications: resolution of disputes over actions that already happened, backward looking, focused on individual cases, quasi judicial --the extent to which Congress is constrained from delegating such powers by Art I and Art III. -- both of these are means to accomplish goals that Agencies have been asked to carry out in statutes. Agencies have a lot of discretion in deciding which method to use and when. REAL LIFE EXAMPLE: Statute and regs re inspection and weapons on planes… -there is no mention of knives, what can the FAA do to keep knives as out of sterile areas (where only people who‘ve gone through security are present). Options? Pass a regulation defining what explosive, incendiary, deadly or dangerous weapons may be… Stop someone with a knife and charge them with a civil penalty What is the better course of action? Rule on books- advance notice—cheaper to issue a rule than case by case litigation? Want flexibility—can‘t anticipate all types of dangerous weapons—want an open rule and ability to pursue other cases… Should airport screeners be fed employees or not? Make sure people on the ground enforcing the rules understand the rules/ purpose—might be better to employ rulemaking…is this more expensive? Generally worded rules might be better Purpose of looking at this to demonstrate the extent of discretion allowed in deciding b/t rulemaking and adjudication, for efficiency and practical matters. III. WHAT AGENCIES DO AND THE APA A. RULEMAKING AND ADJUDICATION – CONSTITUTIONAL DUE PROCESS LIMITS
Due Process Clause- does it have application to agency actions that everyone thinks is legislative in nature? When as a matter of constitutional law is a hearing required for agency action? Londoner Denver city wants to pave sidewalk, cost is divided among the fronted properties. Property owners allowed to file written objections—court finds that this is insufficient o Hearing can be informal, but some forum is necessary o Why should there be an oral hearing—more powerful/ more guarantee that opinions will be heard and considered, can challenge other‘s presentations Bi-Metallic Property tax—levied by assessing property multiply by the tax rate—can increase it two ways: 1) reassessment or 2) increase in tax right Here, since all tax payers are in the same position—would be impractical to allow all people to have a say…
-Rule that we take away from these two cases: due process requires some sort of hearing where? What‘s the distinction b/t these two cases? Number of people affected o If only a small number of people, have less democratic power, want to give them a hearing in lieu of the electoral process o Practicability (but isn‘t harder for a larger group of people to mobilize and organize than a smaller group of people?) Nature of case/specific facts o Discrete tax assessment—fear of arbitrariness o Generalized Policy issue (Bi-Metallic) Don‘t we want input from different person‘s—though unlikely that issue varies that much by individual o Does the issue vary by individual—does each person have specific information, etc that are relevant in the case (Londoner) Increases the value of hearing ―adjudicative facts‖ Example: Rental control post WWII for areas affected by defense activities, Administrator can establish ―defense rental areas‖ or set max rents that will be ―generally fair and equitable‖ giving ―due consideration‖ to rents as of April 1, 1941. o At what point should a hearing be held? When administrator sets a ―defense rental area‖ Issues an order fixing rents at April 1, 1941 rates or the first rent charged after April 1, may be reduced if higher than prevailing rents A particular landlord‘s rent is deemed too high, Administrator orders a reduction (case specific factors might guide the administrator‘s discretion here, want a hearing?)
Administrator denies the LL protect to the validity of the ordered reduction A court reviews the denial of protest o Is this case factually analogous to Londoner where parties affected do not have electoral power… Rulemaking v. Adjudication Hearing required for something that is quasi-adjudicative, not for rulemaking. How do we tell the difference? o Discrete effect of rule? Vs. large group of people affected o Do issues vary more with individuals, each might have more info… o How useful will a hearing be (though useful info may come from individuals in broader issues) o Is the action prospective in nature? Legislation looks to the future/ new rules announced; adjudication based more on present/ past facts and existing laws…(not perfect indicator, what about injunctive relief?, can court holdings announce ―new rules‖) o If something looks adjudicative, due process says we need a hearing, if it is legislative, no hearing required as a matter of due process (so the same action undertaken by legislature would nullify need for hearing—subject to election, bigger group—better info/ process? courts don‘t want to intrude on legislative process-SOP problem, more concerned about looking at agency actions). What is the value of a hearing? o Make people feel like their opinions matter (introduce different views) B. THE APA FRAMEWORK FOR RULEMAKING AND ADJUDICATION Formal Rulemaking = §§ 553, 556, 557 Formal Adjudication= §§ 554, 556, 557 Informal Rulemaking = §§ 553 (notice and comment) Informal Adjudication= NOTHING in APA Magic Language = ―on the record‖ Rule = ―An agency statement of future fact of particular applicability and generally meant to implement or proscribe policy‖ Informal Rules (N&C) are reviewed under APA §706 Arbitrary and Capricious Authority to make rules: National Petroleum Refiners Assoc. v. FTC: Agency passes rule that failure to post octane ratings is unfair competition per se and then adjudicates to enforce this rule. The regulated entities complain that FTC does not have the authority to issue this rule. Agency wins at S.Ct., they say that the agency is not limited to only promulgating rules regarding adjudication and information; the Ct. said that they can make substantive rules as well. Ct. was persuaded that the power increased efficiency and flexibility and (2) this is fairer than case by case adjudication.
2. FORMAL RULEMAKING AND FORMAL ADJUDICATION Triggering Formal Rulemaking: U.S. v. Florida East Coast Railway Comm‘n: To trigger a formal rulemaking the APA says that the authorizing statute must read : On the record following a hearing…‖ The Interstate Commerce Comm‘n‘s statute said ―after hearing‖ – Ct. said that this did not trigger formal requirements. This is in a bit of tension with FDA v. Brown and Williamson Tobacco because the original passing Congress probably did want formal rulemaking, but it was passed before the APA, so the full formal requirements did not exist at that time. But the Ct. bases its decision on the desires of the current Congress. Tension with Londoner/BiMetallic also. The Ct. says that the rule about the railway boxcars are legislative facts – how bad is the nationwide boxcar shortage, etc. But π is at the end of the rail, and they are disproportionately affected, the types of adjudicatory facts that may require a hearing under Londoner. Take home message: Cts. are generally less strict about formal hearing requirements when dealing with rulemaking. But there is more of a due process concern when it comes to adjudication. 3. INFORMAL NOTICE AND COMMENT RULEMAKING
A. PRE-APA JUDICIAL REVIEW
Pacific States Box: If there is a state regulation or there is a non-APA covered statute, then this standard applies. It is basically a rational basis review. And the Ct. does not even look at the fact finding by the agency. Any post-hoc rationalization is good enough, even if done by the Court.
B. REVIEW OF A RULE ON APPLICATION
The quandary that the APA leaves the judiciary in is this: Arb and Cap review is not much review at all. They could have been deferential to the agency under this standard, and then in an adjudication get more strict on ―substantial evidence‖ or they can beef up the A&C standard. They beefed. FPC v. Texaco: There was a statutory guarantee that license would not be pulled without a hearing. The agency made a rule that said no licenses if you have an escalator clause. Then denied a renewal to Texaco‘s license without a hearing. Justice Douglas said no hearing needed because there was no factual dispute! So the rule gives notice, but then no process afterwards in adjudication. American Airlines: Rule stopped letting passenger planes carry cargo that they used to carry. The airlines say that they get adjudication on this. The Ct. said no – the policy is broad, prospective, and appropriate for a rule, not a trial. This goes even beyond Texaco above because here the airlines had a license, not up for renewal, but in the middle of the license it becomes worthless and contrary to the agencies rules.
This is a prudential doctrine. The thing to remember is that if it appropriate for rulemaking, the Ct. wants to channel that behavior as desirable. Airline Pilots Assoc. v. Quesada: Again moving even further into allowing the agency to make rules. The statute says that the FAA must give a hearing if modifying a license. The FAA passes a rule that is bright line, when over a certain age you cannot be licensed. Ct. upholds rule as appropriate for rulemaking. 1) Direct 2) Prospective 3) Suitable for rulemaking 4) applied to broad class 5) Generalized. Heckler v. Campbell: Again the statute contemplates hearings to determine if a person is eligible for disability benefits. There is a hearing held, but the agency has passed a rule that makes a grid – find your age, education, experience and it will tell you if you are disabled or not. Appellate Ct. overturns the denial of benefits because they feel the hearing was not meaningful. The S.Ct. upholds the rule. They feel the prudential doctrine of allowing this to be decided in rulemaking to make the hearings more streamlined. If there is a hearing, then it is all done for the sake of deciding any issues that are out of the scope of the rule. NOTE: In FN 14, the Ct. points out that the agency does allow for a consideration of individual circumstances, discretion is up to the agency. Take Home message: Cts. allow for a lot of issues to be pulled into rulemaking and out of adjudication with limited review of the agency and its policies. If however the rule has constitutional problems or it was done without notice and comment then the Ct. may allow the rule to be attacked in an adjudication.
C. JUDICIAL COMMON LAW OF INFORMAL RULEMAKING
Judges now try to review the rules themselves. APA § 553 gives the procedural requirements, and then § 706 gives the standard for review. Nova Scotia: Ct says that § 553 A&C has some substantive component, so for this to be useful they must ―provide an opportunity for comment.‖ for this to be meaningful the agency must disclose all their data – VERY AGGRESSIVE statutory interpretation, there is no record requirement in the APA § 553. Second Aggressive Statutory interpretation; the statute needs a ―concise general statement of basis‖ and the Ct. turns this into a (not concise) requirement that the Agency respond to every significant comment it receives. Rulemaking is now 100‘s of pages. Vermont Yankee: S.Ct. puts an end to the trend started in Nova Scotia. The authorizing statute has a ton of process. The Agency wants to simplify some of this by taking care of waste disposal concerns with rulemaking. The NRC relies on one Drs. opinion really heavily and the NRDC wants to cross ex this dude. D.C. strikes down rule under A&C b/c there is not a full exploration and full dialogue on the issues. D.C. Cir does not make it clear if it has a problem with the substance or the procedure. S.Ct. says NO. Looks at it as a procedural requirement. §553 is not a minimum, it is a maximum. But in practice it is actually § 553 plus Nova Scotia. Ct. does allow the agency to increase the process it must go through, but the Ct. cannot do this. Can be read as stating that Cts. are not experts in process; look only to statute. Exception is due
process or Constitutional issues. Places the onus on Congress to put good procedures in place, the Ct. will not step in.
D. EXCEPTIONS TO NOTICE AND COMMENT RULEMAKING; INTERPRETIVE RULES, ETC.
Interpretive rules do not have the force of law, and thus they do not need to go through all of the procedures that other rules need to go through. But these guidance statements still affect the behavior of the regulated entity. How do you identify an interpretive guidance? ―if it creates a new binding obligation then it is § 553‖ but if it ―elaborates an existing obligation‖ then it is interpretive. American Hospital Assn‘n v. Bowen: It is only a tentative statement of the agency‘s future plans, and they reserve discretion. So it is not required to go through § 553 process. Note that the thing to consider is whether there is any discretion remaining for the agency – if not then it is likely a rule. Also look to the way the agency treats the statement. If they act like it is binding, then the Ct. can be persuaded that it is a rule and should get the § 553 process. Other point to take away from this is that the agency is using a private organization. But the Ct. is not all that bothered by this. Perhaps they are moving away from concerns in Schecter. CNI v. Young: The above concerns strike down a FDA warning on action levels. They tried to bind the regulated entities and they required applications for exceptions to this action level. Seems a lot like a rule, so the Ct. forces N&C process. American Postal Assoc.: The postal service changes the way they calculate retirement benefits with MASSIVE impact to employees and retirees. The Ct. upholds as INTERPRETIVE: - Do not look to effects - Not based on delegation of authority, the agency gets to decide what to call it - If it was a ―new entitlement or obligation‖ it would have been a rule. Here it was a reinterpretation of the words ―average pay‖ that screwed 113,000 people. - So long as there are (1) words the agency can interpret and (2) both meanings are plausible, then the agency can call it an interpretive statement and avoid process. American Mining Congress: The statute says ―lung disease.‖ The Agency has an interpretive statement that if a miner has 38% or more dark lung on the x-ray, then it is lung disease. Is this an interpretive statement, or a rule? Criteria the Ct. uses: - Without it being a rule, is the legislative enactment enough for the agency to take the actions that it took? This is another way of looking for new binding obligation - Has the agency published in the CFR? looking for the way the agency is treating its own statement - Did the agency cite legislative authority when issuing the rule? If the agency invokes quasi-legislative authority, then Ct. wants to hold them to N&C process. - Is this an amendment of a prior rule? Really the first one is the key – that goes to whether the agency is doing something new and binding. The other three are more geared to a waiver type argument.
National Family Planning: She did not say much about this in class. The message seems to be that the argument about a statement having wide ranging effects cuts both way. If there are large effects, then we want to call it a rule because it is so broad. But everything needs some interpretation at some point, so these statements allow for some flexibility and keeps the process running smoothly. Otherwise, EVERYTHING the agency did would be forced into N&C process. The case itself however is about the last point in American Mining Congress. Keep in mind that with these interpretive statements, they can still be challenged in court at least once. Hoctor: The agency rule says ―structurally sound housing for animals‖ An agent tells the π that a 6 ft fence is enough. Then an interpretive statement comes out and says that 8 ft is needed. The Court says that this is a RULE! This is in a lot of tension with American Mining Congress. The only apparent way to reconcile them is that in this case there appears to be some reliance on the agent‘s statements. The other weaker way to reconcile this is that here there is a supposed interpretation of the agency‘s own rule, and in AMC there was interpretation of the statute. Why interp of the statute should make it more likely that it be called an interpretive statement rather than a rule is not entirely clear. Appalachian Power: Recent decision, the S.Ct. is concerned about all of these interpretive statements being issued. They put some brakes on the trend, and some teeth into the waiver argument. They look at the way the EPA is treating this statement. The agency is willing to take over the state function of permit issuance if they do not comply. There is boilerplate language that the Ct. does not think is irrelevant, but it is overcome in this case by the way that the Ct. treats the issue. 4. APA CONSTRAINTS ON MAKING POLICY THROUGH ADJUDICATION. Recall Petroleum Refining case – there the agency could take something out of adjudication and put it into rulemaking. These cases are the opposite. This is the dominant way that the NLRB functions. This is policy making through precedent, basically what the Courts do with the common law. Chenery: This is occurring pre-APA. The agency‘s statute says ―fair and equitable‖ and in the ―public interest.‖ The SEC is going after management that bought preferred stock so that they could remain in control after the forced reorganization. The SEC in adjudication finds this to be an unfair and deceptive practice. - The Court only looks at the reasons the SEC gave for this determination - SEC goes back on remand and looks at the statute. Then comes up with the same conclusion and grounds it in the statutory language. Then they win at the S.Ct. The Ct. allows them to make a new rule even though this is adjudication. The problem is that there was no rule, and no notice. So the policy is arrived at in adjudication and then applied retroactively and then is upheld! - One main difference with rules is that because this is not a rule, it can be argued over again in subsequent adjudications.
NLRB v. Wyman-Gordon: In an earlier adjudication the NLRB sets it policy. The policy is that an employer has to give the employees an address list of everyone that works there for purposes of organizing a union. In the previous adjudication it was announced as a rule – but not applied retroactively. - Ct. REJECTS this. They say that you cannot make a rule in adjudication that only applies prospectively. It must be done in rulemaking. - Ct. may also be motivated because this is a strong rule that has been issued. - But this is strange because then they still order that the address list be given up. - There is some dispute on whether this is a rule or an order. It seems to fit the definition for either. And if it was a rule, then it did not have to (by the APA) apply retroactively. Perhaps what is going on is that the Ct. feels this is the right rule promulgated in the wrong way. So they force APA process. Bell Aerospace: The Ct. is faced with two questions: 1) Did the NLRB get the law right (are buyers managerial?) and 2) Can the NLRB decide this through adjudication? The Ct. reaffirms Chenery 9-0. Agency gets its choice. It is a highly individualized decision if something is managerial, so they allow the agency to decide on their own. Remains of Wyman-Gordon: - Cannot only issue prospective rules in adjudication - Strong rules – Must do X – are inappropriate for adjudication - Softer rules – X is managerial – is okay of adj. Constraints on this: May not be able to impose large penalties retroactively. The factors: - Reliance by the regulated entity - Fine/Damages imposed cuts in favor of rulemaking - Due Process – the cannon of statutory construction is that laws are presumed not to be retroactive. - How closely tied to the statute is the policy? The further you get, the more likely that you need to do it in § 553. Morton v. Ruiz: Very complex and troubling case. The question is whether a policy can be set by a manual. The Court in this case says no, you cannot set a policy by BIA manual. -Congressional intent is a bit unclear, but Ct. seems to feel strongly that it was not just on the reservation, but ―on or near. - Ct. is concerned about notice to entities because the manual is only internal. - Ct. is also concerned about consistency because others did get benefits. - One view is of this case is that the BIA made policy by manual and is then enforcing it case by case. The Ct. rejects doing it this way. - It seems like Chenery where there was notice, decision, and application of the policy. Distinguish b/c 1) more like Chenery I where there is no explanation why the agency is doing something different, and why the policy is as it is in the manual 2) Ct. doesn‘t trust the BIA in general 3) Inconsistent application of the policy 4) case predates Bell Aerospace which reaffirmed Chenery – though this may limit it. C. CONSTITUTIONAL DUE PROCESS CONSTRAINTS ON AGENCY PROCEDURES.
1. INTRODUCTION Historical view is that if a private individual could not do something to another private individual, then the government could not do it either unless they gave some kind of process. Thus, if there was a parallel at common law that is the process you would be given. In employment at will, there is no need for process to terminate. This was clear into the 1950s. In the 1970‘s the change came about because there was a revelation that individual wealth was tied into the benefits someone got from the government. So there was a push to give this more process than would have been given under the state common law analogues. Also pertinent is the reliance interest involved. The revolution had two parts: 1) the breakdown of the rights/privileges distinction and 2) put due process in areas they would not touch before like schools, military and hospitals. All motivated by a distrust of the government. 2. THE PRESENCE OF A LIBERTY OR PROPERTY RIGHT Goldberg v. Kelly: The Due Process Revolution is here. Abolishes the rights/privilege distinction. The statute does give the process, but it is only a post-termination hearing. The question is whether there needs to be any pre-termination process. -The Ct. looks at the Federal Statute as a source of new protected statutory entitlements. This is the new property. - Note that at this point in time these Due Process rights are individualized in nature, this reasoning has not been extended to collective rights. Roth and Perry v. Sindermann: The Ct. depends less on whether there was a grievous loss, rather the focus turns to whether the gov‘t has limited its own discretion, focus on reliance and expectation interests. Roth: It was a 1 year employment contract. It was not renewed and claim is that it was retribution. π wants reasons and a hearing. What are the liberty interests here? contract, marriage, worship, all Constitutional Liberty interests. What about property interests? These MUST come from a statute, they cannot come from the Constitution. The reason is that the Gov‘t must bind itself, no unilateral reliance. The tension is between protecting expectations and avoiding gov‘t abuse. See legalines pg 107 for good summary. Sindermann: Here there was tenure and that was an interest. It is distinguished from Roth because there is a more clear 1A violation and there is also tenure, not a 1 year contract. So there is a more concrete reliance. It was remanded. The key here is in the nature of the reliance interest. It must be mutual. If only the π relied, but the gov‘t did not do something affirmative to induce reliance, then it does get DP protections. You cannot get a right from the Constitution, it must come from elsewhere also so the Ct. does not look like it is making this stuff up. American Manufacturers v. Sullivan: Patient is challenging a decision to not pay for a prescription prior to a hearing. The claim is that the statute says the employer will pay for
―reasonable and necessary medical expenses‖ she has a prescription, and thus it should be covered. The Ct. rejects this; there is no property right that has been created until the expense is approved. Prior to that, they can deny without any Constitutionally required process. 3. THE PROCESS DUE WHEN THERE IS A RIGHT: Values that Due Process upholds (Friendly article) - Severity / Significance of the private interest - Burden on the Government (time plus money and resources) - Dignitary / Participatory rights and interests - Avoiding biased decision maker - Congressional intent for adversarial or non-adversarial proceedings. - the type of question, i.e. fact-finding Because these factors are largely empirical, there is no really consistent way to predict the process that you will get if you have a liberty/property interest at stake. Goldberg v. Kelly: The Ct. ends up giving something VERY close to a judicial hearing. Lots of process. They arrive at this because of a balancing test – it is the π‘s harm suffered against the gov‘t interest in taking care of these issues summarily and quickly. The Ct. is concerned with the desperation that can occur with loss of welfare. Also spins it so the gov‘t is interested in preventing social malaise so d/n want to incorrectly terminate benefits. Based on a casual empiricism that more process gives better results. Mathews v. Eldridge: The three part balancing test to determine what process is due: - The weight of the private interest - The weight of the gov‘t interest - Value of additional process (risk of error in the process) This is similar to Goldberg but more concern on accuracy and less on dignity. Here no oral hearing is required. The reasons basically hinge on the Ct. thinking that oral testimony will not increase accuracy. Here also the Ct. gives no consideration to the dignitary benefits of process – they are solely concerned with accuracy. Never since Goldberg has oral arguments been required. Loudermill: This is the case that rejects the ―bitter with the sweet.‖ The security guard was terminated because he stated on his employment application that he had never committed a felony. He was convicted for grand larceny, but he thought it was a misdemeanor. He was given a post-termination hearing, he wanted a pre. Ct. feels that he needs some kind of hearing, but less than Goldberg. Straight Mathews analysis, the only concern is with accuracy, not dignitary. Ct. also says to balance out the gov‘t interest in not having felons work as security guards, they could suspend without pay. Walters: The statute only allows a lawyer to recover $10 in VA benefits cases. The process is non-adversarial. The Q the Ct. has to answer is if DP requires the π to have an opportunity for a lawyer? The private interest is keep their benefits. But this is a lower benefit than Loudermill and Goldberg because VA is not need-based. The Gov‘t interest is partially paternalistic – keep
lawyers away from benefit $$, also keeping the proceedings non-adversarial. Ct. gives #2 a lot of weight, thinks lawyers will muddle the issues and make them more adversarial. The big piece is that lawyers do not increase accuracy of proceedings. They might in complex cases, but DUE PROCESS is TARGETED at the middle of the road case, not the worst-case scenario. Perhaps this case could have been a winner if reframed as a liberty interest in getting competent counsel, not a property interest in getting your benefits? Gilbert v. Homar: Another three part balancing test to determine what kinds of process needed. The cop was arrested in a drug raid, suspended w/o pay, and then charges dismissed a year later. Clear protected property interest. Balance: - Private interest in loss of pay; length of time? permanent? No discussion of the dignitary interest. - Gov‘t interest in public confidence and keeping bad cops off the beat - Minimal value to additional procedures. The cops was arrested and charges were filed. That seems to be enough of an accuracy check for the Ct. What does he get? A prompt post-suspension hearing, that is all. What is the difference with Loudermill: Big part is firing v. suspending. Other part is that the Ct. downplays the private interest and upplays the gov‘t; this is not a baseless suspension, charges were filed and that is apparently a big deal. Brock v. Roadway Express: Potentially adds a fourth element to the Mathews balancing test. Here OSHA ordered an employer to rehire an employee. The employer claims that DP allows it to have a full evidentiary hearing before reinstatement. Now the Ct. balances: - Employer‘s interest in controlling the makeup of its workforce - Gov‘t interest in highway safety - Gov‘t interest in protection from retaliatory discharge - Employee interest in keeping job This can be read as the employees interests bolstering the Gov‘t interest, or it can be a new prong. This may potentially extend what qualifies as an interest – how far does this go to beneficiaries? All the way to motorists on the road? IV. JUDICIAL CONTROL OF AGENCY ACTION A. SCOPE OF REVIEW AND DEFERENCE TO AGENCY ACTIONS 1. REVIEW OF AGENCY DETERMINATIONS OF FACT FOR “SUBSTANTIAL EVIDENCE” This is the language that is used in APA § 702(E) ―supported by substantial evidence.‖ This ONLY APPLIES to formal agency actions, both adjudications and rulemaking. Note also that APA § 706(2)(f) allows for de novo review but is only very rarely used. Usually if the authorizing statute says so or it the Ct. feels the Agency totally blew it.
Universal Camera: The hearing examiner says that the termination was not reprisal. The NLRB reviewing board disagrees, it was reprisal after all. The District Ct. is left to decide which determination to give more weight to. Board is told statutorily to not defer to the Hearing Examiner! S.Ct. says that District Ct. must review on the Whole Record. Then they imply that to reverse an agency decision is a standard similar to JNOV – so if at least ―one juror‖ could so decide, uphold. On one had it is deferential, but on the other hand you look at the entire record. Allentown Mack: Some thought that this signaled a new approach to the way the Ct. would look at Substantial Evidence. Not clear if it caught on or not though. This is the NLRB listening to managers tell them that they did have a good faith basis to call for a union recertification election because they asked employees trying to get rehired in the interview if they supported the union or not. Here the Supreme Court is second guessing the INFERENCES the NLRB is making from the testimony taken. This seems to be more than the whole record review in Universal Camera. Ct. may also be concerned that the NLRB is hiding policy in what it is calling ‗fact finding.‘ An implication of this is that if the Ct. thinks that the Agency‘s fact finding is based on an unwritten policy then it is freer to review the Agency findings. Summary: Substantial Evidence is only on the record, but it is on the whole record. test is if a reasonable mind would accept this. This is also a balance between the Cts. review and the agencies discretion. The question of whether this is a sufficient check on agency bias is still unanswered. 2. DISTINGUISHING QUESTIONS OF LAW FROM QUESTIONS OF FACT The Judge Friendly tautology: If you do not need to know any more facts, then it is a question of law. If nothing is disputed at law, then it is a question of fact. Pre-Chevron questions of law were treated de novo! Therefore agencies tried to get things into facts to get more deferential review. 53 Eclectus Parrots v. United States: hard to tell if ‗wild birds‘ is a legal question or a factual question. Thus, the Ct. accepts that wild = as found in natural state and then tries to apply this. O‘Keefe and O‘Leary: Both are cases dealing with the ‗zone of danger‘ for liability under the workman‘s compensation statute. The Ct. feels that zone of danger is a factual determination like causation. If the condition of employment created the zone of special danger, then the employee is covered. The Ct. is HIGHLY deferential to the agency to say that this is a question of fact, but the Ct. is willing to look at both contextual inferences and policy. 3. REVIEW OF AGENCY DETERMINATIONS OF LAW BEFORE CHEVRON NLRB v. Hearst: NLRB decision that newsboys are employees and not independent contractors. Mixed Q of policy and law – what legally makes an employee, and how do these facts apply to
this standard? Here the Ct. does its own analysis because undoubtedly questions of law are for the Ct. to decide. But then the application of this broad law to newsboys is given deference by the Ct. Basically the Ct. says that the statute gives the agency a lot of discretion to adjudicate these questions. Rely on agency expertise. Skidmore v. Swift: The question is whether time spent waiting for a fire alarm is overtime. The Labor department has issued an interpretation that it is, but there is no rule. The Ct. comes up with the 4 factors to give deference to the agency: - Thoroughness of examination and reasoning - Validity of Reasoning - Consistency - The Power the rationale has to persuade the nice thing about this for the agency is that gives them some deference, but the bad thing is that it is not total deference. The agency has to spend a lot of time explaining itself. 4. THE CHEVRON DOCTRINE AND REVIEW ON DETERMINATIONS OF LAW Chevron v. NRDC: The EPA rule is over whether something is a ―new source‖ or not. The EPA feels that if a plant is expanded or added to, then the source is not new, just the total emissions must remain constant. This rule prevents an increase in emissions, but it is not technology forcing. This rule was considered politically to be pandering to industry. Unanimous Court has 2 step process: 1) Has Congress Spoken directly to this issue? 2) If unclear, then defer to a reasonable agency interpretation. Court upholds the agency rule in Chevron. This is a pure legal question in front of the court, though there is policy mixed into it – do we want to be technology forcing? Compared with Hearst this is a significant move. There it was also a legal question with policy mixed in, and the Ct. reviewed de novo. The Ct. has completely ignored APA § 706 that says the Ct. is supposed to review de novo. Consider the change since Hearst: - On mixed questions of law and fact, pre-Chevron you deferred under Hearst because of agency expertise. Post Chevron you defer as long as the agency is reasonable - On pure legal questions pre-Chevron you reviewed this de novo; now under Chevron you defer! This is the big change. Young v. CNI: Revisit the Q of aflatoxin in corn. MUST the FDA set the tolerance level for aflatoxin? This is purely a question of statutory construction. Pre-Chevron this would have been decided de novo in Ct. But post-Chevron the Ct. says that the statute is ambiguous, and that the agency reasoning is reasonable, so they uphold.
A. CHEVRON STEP ONE – A CLEAR CONGRESSIONAL STATEMENT
INS v. Cardozo-Fonseca: Formal Adjudications get Chevron deference on questions of law. This is a question 1 problem. The statutory language used two different phrases in different places. The agency interpreted them in the same way. Each individual interpretation would have been reasonable, but the Ct. says that Congress used different language, and that represents unambiguous intent for the standards to be different. So far Mixed Questions and Pure Legal Questions get Chevron deference So far formal adjudication and informal rules get Chevron deference. Bowen: A lawyer‘s brief does not get Chevron deference. Congress did not want lawyers to interpret the law. Not public, and not binding (but so what?). Ct. seems preoccupied with the idea of a post-hoc rationalization being given Chevron deference, so lawyer‘s briefs do not get it. Dole v. United Steel Workers: OMB is a Whitehouse agency with oversight over agencies. They want to force employers to keep MSDS sheets on file. The Ct. rejects this. When interpreting the paperwork reduction act, the statute, they look to the statutory language itself, the legislative history, and the policy and purpose of the statute as a whole (make it all work together). They decide that this statute was not meant to affect private recordkeeping burdens. End it on step 1. Babbitt v. Sweet Home Chapter: Scalia dissent is all about step 1. The majority decides it on step 2. The case is about construing the language of ―taking.‖ Tony is angry because mowing the lawn could be a statutory violation. This is a matter of framing the question asked in step one. Scalia feels that it is ―did Congress intend to include habitat destruction?‖ The majority interprets as ―did Congress preclude habitat modification from harm?‖ Scalia‘s methods are often emulated. Formalistic, textualistic. Take = legal definition Harm = must have something in common with all the other words in the list. he divines Congressional intent from all of this. (Of course the counterargument is that every word must have meaning and cannot be nullified.). Avoid Constitutional Problems = there may be tension with the takings clause in the 5A. He feels that if Congress is going to butt-up against a Constitutional problem then he wants explicitly clear language. [See Kent v. Dulles] Can‘t stomach the result = if the interpretation yields a result that is just nuts, then this could not have been what the Congress intended to pass. Note – the second and third points above undercut Chevron deference because it takes Constitutional Q‘s away from the agency. MCI v. ATT: Pure legal question on what actions the agency can take under the word modify. This turns into a debate about dictionaries. The Scalia majority gets rid of Webster‘s Third – even though it is used by Cts all the time. Modify cannot equal a fundamental change, maybe modify really cannot mean nullify. So they strike it down as a step one analysis. Again Scalia says that this is a decision of such magnitude that the Congress would delegate implicitly. But this seems to be in tension with the facts of the Chevron originally.
American Mining Congress: When is something waste – is smelting slag covered? Ct. looks to statutory purposes to figure out this heavily factual determination of what is waste. But when the Ct. is the one that determines Statutory Purposes, not the Agency, this narrows the Agencies discretion. Then, from the statutory purpose, the Ct. defines what Congress meant by discarded. But this is only appropriate if you think that the term discarded in the first place has any ambiguity. If it is clear, then this argument is additional reason the agency was wrong, but it is not needed. Summary of Step One: It includes - Statutory Language (textualism) - Legislative History (Cardozo-Fonseca and American Mining Congress) - Statutory Purposes (problematic under rationale of Chevron, done in AMC). - Can‘t stomach the result. This may be driving FDA v. Brown and Williamson Tobacco as well as MCI v. ATT and Babbitt dissent - Cannons of Construction generally trump Chevron deference, but it is not clear this should be the way it works.
B. CANNONS OF CONSTRUCTION AND AVOIDING CONSTITUTIONAL ISSUES
Kent v. Dulles: The administrator of the agency cannot impinge on the right of travel. The reasoning is pretty weak. It basically looks like the Agencies cannot get deference on a Constitutional Question. Rust v. Sullivan: Gag-rule on Abortion Clinics to get federal $$. Ct. upheld the rule because it was vague Congressional intent and reasonable interpretation. The problem is that it poses a grave Constitutional question, and the Ct. still upholds it. Problematic! Also note that in this case there is a change in mind, and the Ct. upholds by applying Chevron deference.
C. CHEVRON STEP TWO – “A PERMISSIBLE AGENCY INTERPRETATION”
There is only once that the S.Ct. has struck down an agency rule on step II. The Court looks at: - Text of the Statute and its structure (looking for inconsistencies) - Legislative History - Policy Expertise of Agency and purposes of the Statute. BUT THIS IS THE SAME LIST AS STEP I !! Really this is a difference in orientation rather than substance. The Ct. is looking more for significant tension with the statute. Ohio v. Dept. of the Interior: Battle over how to value the damage in these environmental claims under CERCLA. The first issue is the agency rule on the ―less of‖ either types of damage calculation. The Ct. does a statutory purposes analysis to decide that Congress was clear that they did not want lower damages. The Ct. is getting pretty aggressive with statutory interpretation to strike down on Step I.
Then the next issue is on preference for Market Valuation. The Ct. feels that in things like natural parks this would systematically undervalue the resource. So they find that it is contrary to Congressional intent on a Step 2 analysis. Generally the Ct. seems to feel that the Agency was moving in a different direction than Congress was, although each one of the interpretations may have been individually reasonable.
D. WHEN CHEVRON APPLIES; THE RETURN OF SKIDMORE
Christensen: Do interpretive rules without present binding legal effect get Chevron deference? The county tries to get out of paying overtime. What they do is okay under an agency interpretation, if there is an agreement. There is no agreement, and the county does it anyway. NO DEFERENCE because there is no binding effect to the agency‘s interpretation. This is the return of Skidmore, now an interpretation only gets Skidmore deference, not Chevron because it is not binding. This is an entirely judicially created doctrine, and it is based solely on the fact that the interpretation does not have the force of law. Main concern is that there is a lack of Congressional Intent. But this seems to be full of it too. See notes for full explanation. Mead: The crucial Chevron case. Informal Adjudication to determine that Mead has to pay a tariff. The Agency says that it is the official policy, but also says that it is not binding on them. Court SAYS NO DEFERENCE. If the agency had used its rulemaking or adjudicatory powers to make rules carrying the force of law, then give deference. Not here. The Ct. limits Chevron here because they INSIST on DIRECT evidence of Congressional Intent. Really the Cts reasoning sounds a lot like can‘t stomach the result. But this is a threshold issue of the standard of review, not a question about the strength of the step II analysis. The concern the Ct has is about thousands of opinions being binding on the agency. Main failing of the Ct. is to successfully distinguish why an informal adjudication would not get Chevron deference yet a formal adjudication does. They say that the process aspect is not dispositive. And the force of law argument is not that great b/c adjudication is only precedential. This has not settled the informal adjudication debate however. There are reasons that if there were not hundreds on folks giving out thousands of opinions that we would bind the agency and give Chevron deference. Elian Gonzalez. 5. ARBITRARY AND CAPRICIOUS OR HARD LOOK REVIEW Scenic Hudson: This is the procedural hard look. The Ct. wants to make sure that the Agency considered all of the factors that they were supposed to look at under the statute. (this is not APA). Overton Park; This is the landmark case. The Ct establishes a two question test for arbitrary and capricious: Did the Agency act within the scope or authority of law? (not really part of the test, give deference on this) REALLY 1) did the agency consider all of the relevant factors? 2) Was there a clear error in judgment? Here there was deference given the agency on (a), but the Ct. still overturned the agency on #2. But there was a ton of process! The Ct. did not care. The last
important piece of this is that it is only on the record review – the Ct. will not allow for post-hoc rationalizations. The Ct. is policing to make sure that the agency acted within the law procedurally. The Ct. feels that environmental groups did not get their fair shake in the process. On the first Q of relevant factors: this is limited to the particular statute. No consideration of 3rd parties. If Congress does not list the appropriate factors, then the Ct. will try to infer them. On the second Q of clear error of judgment: RARELY used. This is the very stupid decision test, like ketchup is a vegetable or fortified candy is nutritious. State Farm: This is the big seatbelt battle. The big legal decision is that under the APA a rescission of a rule is subject to A&C procedural examination, the same as if it was a rule promulgation. § 706 includes repealing a rule. The intellectually hard thing is that how do you distinguish non-action in the first place from revocation? Court insists on a rational connection between the facts found and the action taken. A pretty hard look. They do not need to consider every alternative, but the Ct. felt that they did consider airbags enough, so it failed the A&C standard. 6. “ARBITRARY AND CAPRICIOUS” OR “HARD LOOK” CONTINUED Corrosion Proof Fittings: I read this, but it was not discussed in class 7. ESTOPPEL AND AN AGENCY’S OBLIGATION TO FOLLOW ITS OWN RULES Arizona Grocery: Cited for the proposition that an agency must follow its own rules. Really it is just that an agency cannot change a rule through an adjudication. Rules can only be changed with other rules. Caceres: Complaint that IRS did not follow its own rules. They tape recorded a conversation without permission when the agency‘s rules said to not do that. Ct. feels that it is clear that the agency should have followed its own rules. The Ct. feels that the rule was set by the agency, so they get to set their own remedy as well. And in this case the Ct. says that 5A gives no remedy and neither does the Congress. But note that APA remedy is that a Ct. may set aside any decision contrary to law. Caceres does not extend remedies beyond this to DP. What rules does the agency have to follow? - Must follow N&C rules. Arizona Grocery and affirmed in State Farm - Informal Policies and guidance: not as clear. If reliance, perhaps should follow like in Morton v. Ruiz. But then Schweiker points the other way, a claims manual has no legal force. Balance concerns over fairness, notice and reliance against agency self-regulation.
Schweiker: He relied on what he was told by an agent. They were wrong, and he applied for a retroactive payment. The authorizing statute allowed for this. π argues the agency is estopped from denying this benefit. Ct. says NO. Concerned with the public fisc, and also concerned with control over all of the agency employees. The standards that must be met to estop an agency: - Misrepresentation of FACT or AFFIRMATIVE misconduct - Reasonable Reliance/ deferment to the agency - Management of the employees. Richmond Richmond: see above. The Ct. is balancing encouraging employees to give advice against the potential harm from mistakes, that is why they strike down. Also same concern over the public treasury as before. Note that reliance on statute in Goldberg was enough, but here it is not enough to rely on what the agency told you. B. AVAILABILITY AND TIMING OF JUDICIAL REVIEW 1. REVIEWABILITY APA §§ 701, 704 = generally Cts. can review a ―final agency action‖ if no other adequate remedy. Abbott: There is a presumption of reviewability. The Ct. will look for ―clear and convincing‖ evidence that a decision by an agency is not reviewable. There are two exceptions to this. The first one is if the statute precludes review if there is ―clear and convincing‖ evidence that review is not appropriate. (2nd one later) This is explored in Johnson: The VA denied benefits to him because he was a conscientious objector. The π claims that you cannot foreclose the review of a Constitutional issue. But here the Ct. says that it was not the agency that decided to not give benefits. It was clearly Congressional action, and they are the ones that made the Constitutional decision. Therefore the Administrator is not the one that made the decision. Thus Congressional action is reviewable on Constitutional issues. The Q on whether Congress can take Constitutional questions made by the Agency out of review is still unanswered. Block v. CNI: Here there is no statutory language precluding review and there is no legislative history precluding review. Despite this the Ct. feels that there is clear and convincing evidence that this is not reviewable. Here it find this in Congressional intent from the way the statute internally works. They do not see consumers of milk in the statute, only farmers and producers, so they limit the reviewability to those parties. Summation: Look to - Statutory Language
- Congressional History and Intent - Functional Concerns of the Statute Johnson is more typical than Block. Second exception to reviewability under the APA is ―committed to agency discretion.‖ Overton Park: It can be reduced to Congress gave us no law to apply. This can mean two things: - Agency has broad discretion but Congress d/n want to exceed its legal authority. So if standard was appropriately applied is a reviewable question. - Agency is the final judge in some circumstances of its own actions!! No review. In Overton Park the Ct. found law to apply, so they felt that it was reviewable. This is NECESSARY but it is NOT SUFFICIENT for a Q to be reviewable. Heckler v. Cheney: Decisions to not enforce are presumptively NOT enforceable. One argument is that this is core prosecutorial discretion in the executive. The Q is not if there is law to apply. The Ct. also looks to comparative expertise and the need to prioritize resources. They also look to see if the agency decision is somehow coercive and to tradition and history. Suggests in FN 13 that if there was a broad decision by the agency to not enforce a particular rule, etc. then they might review. Marshall concurrence would give lots of deference, but he would make it reviewable. This would lead to lots of litigations and problems particularly if you think that Congress should be making this call. Note that the Ct. feels that the decision to not enforce is less coercive, but that is not clear at all if you are the regulated beneficiary, and not the regulated entity. Webster v. Doe: a person got fired from the CIA and they want review. The agency claims that there is no law to apply, so not reviewable. The Ct. agrees. But really, that is not what is going on here. There is law to apply. The reason is that this is committed to agency discretion – the statute exudes deference to the director, and for good reason. you do not want to be able to depose and challenge decisions this sensitive. There is still a debate not on the exam about whether Constitutional Questions may be foreclosed from review. 2. STANDING The question is who is the right party to bring a suit.
A. PRUDENTIAL STANDING
The APA says that ―a person suffering legal wrong‖ or ―adversely affected or aggrieved within meaning of the statute‖ has standing. But the judiciary has glossed this over.
Flast: Very unusual case because the Ct. will allow any taxpayer to have standing. The Ct. only requires a logical link between your status and the gov‘t action AND nexus between the status and legal claim. This has been limited to its facts. Schlesinger: Even though statute said any person, the Ct. said no standing because it wanted an injury in fact. Data Processing: Here the Ct. is muddling though what injury in fact means and what ―arguably within the zone of interests is talking about. It is starting to look at Congressional Intent as well. Clarke: This is a very lax standard. Ct is satisfied with a plausible relationship between the π‘s interests and the purpose of the statute. Two points. (1) This is significant expansion of standing because you only need to have a concrete interest in the way the statute is administered. (2) This is also an efficient doctrine because standing can be examined without any questions on the merits. Air Courier Conference: Can the Postal service suspend its monopoly. The workers union wants to say no. The S.Ct. says that they do not have standing to bring a claim. They do have injury in fact, but they are not in the zone of interests. The statute was concerned with profitability, not the workers. Congress did not contemplate any private attny generals running around. NCUA v. First National: Credit Unions are supposed to be organized around a common bond. The Agency significantly broadens the definition of common bond and banks get pissed that they are getting more competition. Ct. does not look to Congressional Intent. The Ct. goes back to the plausible relationship test and says that they do have standing. Reconcile with Air Couriers: NCUA is about competitors, so perhaps they are better suited to litigate aggressively. But do you really think that because Air was not a competitor they would not litigate aggressively? Since Bennet v. Spear you do not look to prudential concerns if Congress has spoken.
B. CONSTITUTIONAL STANDING OR ARTICLE III STANDING
Sierra Club v. Morton: The three factors for Article III standing - Injury in fact - Causation - Redressability The Ct. defines injury in fact very broadly. Includes $, aesthetics, well-being. SCRAP: Here there is a long line of causation to lead to the agency decision to increase rates on RR. The Ct. allows it to go, they feel that the injury is concrete enough as alleged. The thing here
is that the case is at the 12(b)(6) stage, so allegations are taken as true as well. They will have a big problem with causation in the proofs stage. Lujan v. Defenders of Wildlife: The Ct. does not want to be a forum for generalized policy disagreements. There are two major holdings of Lujan - Injury in Fact: even if Congress says that you can sue you need to have Art. III standing with a cognizable, concrete, imminent harm. The plan to return someday is not concrete. But if you had a ticket then it is real. - Any Person Can Sue does not get you around Article III. But Congress is allowed to define the injury in fact and so can broaden the class of individuals with standing. Consider Lujan with Sep of Powers concerns. This reduces the role of both the judiciary and Congress. This limits Congressional ability to put a check onto an agency by allow beneficiaries to sue. Allen v. Wright: The parents sue over school tax emption for segregated schools. The Ct. says no standing because the harm is too generalized. But the problem here is that stigma is recognized at law. this is purely judicially created, not grounded in anything. *** Note that for a procedural claim there is no need to show anything other than an injury in fact, there is no causation and no redressabilty showing needed. Duke Power: Argument over a subsidy – the damage cap is what allows this plant to be built. Ct. agrees because if the damage cap is removed there is redressability. Back to Allen v. Wright: But here there is an economic impact, but the Ct. says that there is no redressability. How to reconcile? - In Allen there are more third parties - Subsidy is much larger in Duke than Allen (factual consideration) - Allen may have a longer chain of causation Bennet v. Spear: The Bureau of Reclamation is part of the Dept of the Interior. The Fish and Wildlife service has to give their opinion on impact of their irrigation plan. The FWS says the plan will hurt the fish. If the BoR follows FWS then they are shielded from suit under the Endangered Species Act. The Ct. says that there is injury in fact. The challenge is by Ranchers that want the irrigation plan and they are challenging the FWS opinion. But the BoR does not have to follow the plan. There are legal consequences, not economic consequences. Legal consequences of the opinion are enough to show causation. Redressability is found, even though it is making a big assumption that the BoR will follow the FWS opinion. The really puzzling here is that Lujan says that you do not need anything besides injury in fact if it is a process challenge.
Steel Company: VERY IMPORTANT CASE. The Ct. ends up saying that there is no standing because there is no redressability. The Δ is already in compliance, so the injunction would have no effect. Laidlaw: Goes way back on Steel Company. The resurrects deterrence as a viable interest and it accepts the civil penalties provision as enough to show redressability. - Makes injury in fact broad – the lower Ct. found no damage done to the environment, but here the injury includes deterrence and civil penalties. These are all very factual questions 3. TIMING Ripeness is prudential Abbott Labs: Feels this is ripe. It has the force of law and it carries heavy penalties. So ripe. Toilet Goods: Even though it is a rule it is not ripe. The Ct. does not think that it will change behavior so they want to wait for an adjudication and then get a factual record. Also helps that there is little penalty. Weight hardship to π if wait against hardship to the agency if do not wait against benefits to the Ct. if they wait Shultz: A very function decision to review a opinion letter. Even though it does not have the force of law. Big thing is that the agency is done considering the issue, so it looks final and waiting will not change matters. Ct. also here is finding that risk of penalties is enough. Lujan c. NWF: The Ct. will not review the broad decision to reconsider a lot of permits. Part of this is a policy question that the Ct does not want to get into, another is that there are 100‘s of other permits that have to issue before impact, so make them litigate each one of those individually. CONGRESS CAN OVERRIDE RIPENESS Franklin v. Massachusetts: The Ct. says that the secretary‘s report to the president is not final on the census even though the pres will not change a thing. The Ct. uses very formalistic reasoning to make this decision unreviewable.
B. WAIVER AND EXHAUSTION
Is there something else that should be done before invoking the power of the Courts? Myers v. Bethlehem Shipbuilding: The Ct. will not allow for an interlocutory appeal to take this from the agency. Finish it out there before coming to Ct. C/N pull out a single issue for review. This review of an adjudication is very similar to review in appellate courts
Mathews v. Eldridge: Ct. wants everything to be presented to an agency before they will allow for review, but they will review non-exhausted claims sometimes. Again parallel to normal Ct. proceedings because this is consider an interlocutory appeal to a collateral issue. Here the interlocutory nature of the appeal is a Constitutional Question so there is less concern on interfering with Agency territory. Bowen v. NYC: Ct. is forcing review of a decision. The Ct. says that the definition of mental illness is already set by the agency and will not change therefore there is no reason to wait. Simms v. Apfel: Generally no new issues on appeal. But here the Ct. allows there to be some. The Ct. is persuaded by the short form that is quickly filled out AND the fact that this is a nonadversarial procedure.
C. WAIVER RULES TO RULEMAKING
NWF v. EPA : the NWF feels that EPA rejected option B too quickly and just went with A. The EPA says that you waived it in the N&C rulemaking and they win on this. There was process in place, and the NWF missed its opportunity so the Ct. applies a waiver doctrine to preclude litigating this issue out. Ct. is primarily concerned with π‘s sandbagging – make all the arguments that you are going to make in N&C.