Administrative Law Seidenfeld Fall 2007 I. Why agencies? Why not stick to traditional notions of law (Congress makes law, judiciary interprets, executive enforces)? *Book hypo—Migrant worker example: no water, bathroom facilities. Causes public health issues, etc. -Other than agencies, how do you create a system to remedy this problem? A. Legislature could create a statute— PROBLEMS: 1) Based upon politics. The farmworkers don‘t vote. [counter—it still effects the rest of the electorate by spreading diseases] *Special interest politics—to what extent do you trust legislature to properly take care of the problem? 2) Competency—is Congress best suited to making these decisions? Does Congress have requisite expertise? -Congress does have staff…but there may be a tension between politics and expertise. 3) If the statute is incorrect, it will be difficult to correct the statute. One shot—and often, if the issue is detailed, it will require correction. 4) Efficient use of resources 5) How to monitor? Legislative Prescription— a) If private, subject to the same problems as common law b) If public, still reactive in nature B. Courts could regulate—make this a tort-PROBLEMS: 1) Jurisdictional problems—limited to state courts; reactive in nature 2) Expertise of courts—judiciary is not best equipped to deal with sweeping societal issues. Hard for judges to get the kind of information available to legislatures. 3) Private causes of action—letting the workers sue for unsanitary conditions: a) Problems with incentives b) sophistication of workers c) civil suits are reactive in nature d) cost of suit/access to attorneys/cost of state resources C. What are the Criteria for Evaluating competing systems? 1) Competence to set standards a) Expertise b) Accountability for value judgment c) Processes for Deliberation 2) Monitoring and Enforcement a) Incentives and resources (all kinds of problems for private parties) b) Proof of violation and causation 3) Jurisdictional Limits—if system, at point 1, causes problems at point 2, want system that corrects problems at all points D. So, Create an Administrative Agency- Seidenfeld likes agencies 1) Can develop expertise 2) Accountability—somewhat politically accountable (less than legislature, more than courts). -Can the agency legitimately resort to pure value judgments? Depends on how closely constrained by politics 3) Generally flexible and proactive—need not define precise rules before implementing, but can adjust to problems as they occur.
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4) Overcome coordination and jurisdictional problems—can define and implement public interest as defined by deliberative process. PROBLEMS: 1) Potential lack of respect for legal rights 2) Interest group influence & capture (good or bad?)—S thinks agencies are less beholden to interest groups than legislature. 3) Runaway agencies and imposition of idiosyncratic values 4) Inefficiency and sloth—problem of entrenched bureaucracy. ConclusionAgency structure should: 1) Encourage, and respect, the participation of stakeholders 2) Ensure democratic accountability 3) Create incentives for agency to pursue public, rather than idiosyncratic, interests E. 1. 2. What is Administrative Law? In a sense, it‘s procedure; in other senses, it‘s more substantive (e.g. standard of review/agency accounting for it‘s actions—substance or procedure??) Admin law is any aspect of the government that is not the legislature, president, or court (not in the whitehouse or capitol), attorney general is the head of the department of justice – job is not to just do what the president tells you rather it is to run the agency. So, what is Administrative Law? Seidenfeld: the interaction of the agency with other entities/institutions. [see slide on p.2 of materials]. Interaction with: a. President (president advises agencies & vice versa; additionally, the president appoints (& fires) some agency heads) b. Judiciary [Article 3 courts] (all different ways) c. Congress (one way—Congress to agencyenables agency; gives discretion; provides procedure); What kind of oversight does Congress have d. Press (one way—agency to press) – freedom of information act e. Regulated entities (2 ways—agencies tell entities what to do; entities give agencies information) f. Regulatory beneficiaries (Mostly one way—beneficiaries give agencies information [exception— regulations which only create beneficiaries, e.g. welfare]) * If an entity/beneficiary sues an agency, there are hurdles one must clear (standing, ripeness, finality, exhausted administrative remedies)…however, this is another form of agency interaction. 4. Admin. Law DOES NOT cover internal agency action (this is public administration; Exception—how agency treats its internal review officers/ALJs) Agency structure 1. 2. 3. 4. Agency head (i.e. EPA Administrator)(―on top of the graph‖)( this is an individual or a body and makes the decisions) Program Offices (i.e. Air, Water, Hazardous Waste) – defined by the substantive areas that the agency regulates Enforcement (police force within agency) – this is for agencies that have responsibility for enforcing the rules – thus there will be an investigative office, example the department of justice Adjudicatory Body – the agency will have within it a group of people who adjudicates disputes (formal appeals go to admin law judge (separate from the rest of the agency), then appeals council [in some agencies, the appeals council is the agency head]) Service Offices (provide services to other parts of the agency--consumer affairs/personnel/ research [usually made up of economists]/general counsel/PR)
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F.
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G. And finally, S‘s def. of agency: any aspect of gov‘t that makes any decision or action other than the specified branches (Congress, President, Judiciary). H. AGENCY ACTION - What decisions do agencies make? –(the first three are the most important; notice that they take over the role of the main three branches of government.) a. *Rulemaking (quasi-legislation)
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b. c. d. e. f. g. I.
*Make policies Investigation Enforcement/Prosecution *Adjudication (however, agencies cant put someone in jail.) Management - Internal Management decisions Education- (ex. Agency tell people to stop smoking)
Why Administrative Law? Theoretical Justifications for the Administrative State 1. Transmission/Formalist Model (1880s Railroad rates)—Agency implements the value laden decisions of the Legislature. Agency doesn‘t make the decisions itself b/c they‘re political. •Agency to implement statute to carry out Congress‘s will (almost like a special master) •Notion of Politics as irrelevant at agency level (fiction) Special master is an assistant to the judge in helping him to make a decision – but is this out of line with the constitution in that judges are suppose to apply the law? NO the judges need assistance in finding out the law. Decisions are to based only on the facts Expertise Model—Prevailing notion of market not working properly. Desirable for Gov‘t to be pervasive. There are discretionary poliy choices, but not vaule laden – if only everyone knew what the the agency knew then we would all agree with the agency‘s decision – this way it is not politics Agency expertise to determine what is best within regulatory program Professional standards – we trust what they say in the same way we used to trust what the doctor told you to do – yet we stopped trusted agencies in the 30‘s •Issues are technical rather than political (fiction—still involves choices between competing values) -Legislature‘s Role—Tell agency of problem; tell agency to fix it [like going to a doctor and telling him your symptoms] 3. Legal Process/Pubic Interest (WWII till ‗60s) (at the time, a surprising amount of consensus that this is the proper theory); APA is an example Adjudication: o Procedures – trial type procedure o Review – facts: independent determination of the law Rulemaking: o Public hearing then the agency makes a decision based on what the people want Review is to ensure agency stays within its authority Agency is to act in accordance with its institutional competence to further the public interest Agency action is justified if it seeks to further the goals of its authorizing statute (Mission Statement) and agency follows appropriate procedure (procedure is the constraint). –For adjudication – trial type procedures and insulation from politics –For rulemaking – notice and comment procedures; politics a necessary factor -PROBLEM—agencies became friendlier with the entities they regulate
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Interest Group Model (still a common view) •Role of agencies is to deliver gov‘t benefits to competing interest groups •Optimistic view (Pluralist) – access to administrative proceding; level playing field among all the interest groups; fair procedure would be important; must have transparency, which faclitates political accountability; simulates markets by facilitating delivery of goods to groups with greatest
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overall interest in regulatory outcome. If the value to a smaller interest is great enough, then the overall value to society outweighs the competing concern. -Converts the bureaucratic democracy to a market (and fails, because gov‘t is a monopoly…) •Pessimistic view (Public Choice) – gov‘t generates monopoly rents by granting regulatory protections to various constituents (―I‘ll finance you‘re campaign if you pass favorable rules‖). -Problems—difficulty in coordinating the masses results in under-representation of the masses, resulting in small focused groups winning more than they should; monopoly rents *This view led to Ralph Nader, et al, forming interest groups to try to gain representation for the traditionally under-represented interest groups. 5. Deliberative Democracy—Want Stakeholder Involvement (accounts for non-economically rational actions of people) (re-read ―civic republican justification…) Generat consensus on values Access to proceedings Public interest oriented justificiations for agency action To try to achieve consensus among stakeholders •Process to allow empathetic interactions that can change preferences (i.e. political values) •Agencies accountable to all three branches of government •Agency must explain its decision in terms of factors Congress (politics?) makes relevant
II.
Political Constraints – Political Oversight of Administrative Agencies A. Hypo—EPA adopts a rule that changes how industry must act when it modifies air-polluting power plants. Congress is unhappy with the rule—what recourse does Congress have? 1. 2. 3. 4. ―Power of the Purse‖ (most commonly used)—take away the agencies‘ money. Pass an overriding law Power of Appointment (although at this point, it‘s too late) Hold Congressional hearings/investigations
B. Threat of Overriding by Legislation - Power to pass a law overriding agency rule
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-Problems: -Inertia! •Procedural Barriers -Congress not only needs majority vote but also an individual backing the bill. -Lack of Time –Committee system—must get through both houses in identical language. –Party system and party leadership (e.g. debate in Senate; rules committee in House) -House Rules Committee—must also approve, because otherwise the rules associated with passing the bill can be so cumbersome as to ensure that the bill won‘t pass. •Need to Overcome Executive Support for Agencies –Requires either veto-proof majorities, or leveraging of pressure from other issues -Aside—Congressional Review Act—―Fast-Track System‖— Need to overcome executive support is evidenced by the lack of impact of the Congressional Review Act – (fast track legislative review without committee veto possible). Only one of 407 rules has been overturned, and that was a Clinton midnight rule. C. Appropriations—is this more effective? Yes—Congress must pass an appropriations bill, whereas there is no overarching need to pass legislation which modifies a rule. Reduces the impact of the Procedural Barriers. D. Committee Oversight—why is this a threat? Makes disputes public. Comitte hearings – congress can call hearings to review the actions of agencies and they can force heads of agencies to resign •Effective because oversight threatens: –Direct legislative reversal –Reduction in agency budget or specific appropriations –Agency head‘s reputation—in extreme cases, the agency head can lose her reputation (e.g. Gorsuch—Reagan‘s head of EPA—and she hasn‘t been heard of [politically] since) E. Presidential Authority to Dictate Particular Policies 1. Return to Hypo—what if President doesn‘t like the rule? What recourse does he have? a. Fire Agency Head (maybe) -President could incur political costs, both through Congress and the public. (e.g., imagine if GWB fired Colin Powell…) i. President has this authority, but Congress may restrict that authority (Independent agencies—ICC, FCC, etc.—President cannot remove, as the heads serve fixed terms of office). Executive agencies, however, are different—serve at pleasure of President. -BUT Morrison v. Olson—Congress can restrict President‘s power to remove even purely executive official (in this case, the prosecutor of the executive branch) if functional approach to separation of power so warrants. But see Scalia—President can remove principal officers at will and inferior officers for subordination. b. Executive Order (Directive) (tells agency head what to do (or not to do)).
ii.
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i.
Traditional view is that President does not have power to dictate particular policies. (For purposes of this course, this is likely the correct answer) ii. Originalists argue that executive power is vested in President alone, and therefore President does have this power. (dep‘t head is president‘s alter ego, acting in p‘s stead; ergo, he can be dismissed at P‘s will) iii. Elena Kagan—Congress can restrict President‘s power, but it does not do so when it allows President to remove agency head at will. Therefore, Congress has awarded President authority of oversight. (S—is this not Congress recognizing the influence of the President, as opposed to the actual authorized dictation of agency rules?) Ex: Reagan makes a statement that agency is adopting a rule for the Family Planning Council to omit the use of the word ―abortion.‖ Agency adopts this rule—is this just influence, or is it Reagan making a rule? Rust v. Sullivan c. Other Means for Presidential Influence on Special Policies. i. ii.
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General influence—pressure, cajoling, threats to go public… Quare—is this not what the president is doing when he issues a directive? Similar, but according to S, not the same…difference between influence and actual authority to change… (Consider: Persuasion may be more than persuasion, and command may be less than command) iii. Emergency/Technicality rules Just a Thought: Should we have agency laws if we really don‘t need them?
III.
What sources of law limit agency‘s authority? A. Constitution B. Authorizing statute C. Enabling Act D. Administrative Procedure Act E. Agency Rules
IV.
Quasi-Judicial v. Quasi-Legislative Action
A. Procedural due process 1. Londoner v. Denver Plaintiffs were assessed taxes after city paved road alongside their property—tax was assessed to those specially benefitted. wrote to object and sought a hearing; did not allow a hearing. Issue: Whether authorizing a tax, without notice to the landowners, violated due process. H: No hearing = no due process; ordering tax payments requires a hearingwhen action is quasi-judicial. -―Where [a body subordinate to the legislature] det‘s whether, in what amt., and upon whom it shall be levied…due process of law req‘s the taxpayer an opportunity to be heard [before the taxes are fixed].‖ The P was against the way in which the tax was levied against them. Court said that the people should be able to engage in a hearing before they are taxed. Holmes dissents 2. Bi-Metallic Tax increase for all property owners in Denver (up 40%) mandated by State Board of Equalization. s objected, stating they did not have an opportunity to protest the new assessment, and sought a hearing.
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H: Due process does not protect you because this is a generally applicable law—more property owners in Denver than on 8th avenue (Londoner). ―Where a rule of conduct applies to more than a few people, it is impracticable that every one should have a direct voice in its adoption.‖ Due process does not apply. This was a legislative decision thus there is no need for a hearing. 3. If action is judicial in nature, due process applies. (Londoner—a few parties rights are determined). If action is legislative in nature, due process does not apply. 1. First question does the due process apply? Applies to quasi-judicial but not quasi-legislative agency action. So, what‘s the difference? A. The more general implies quasi legislative. B. More Prospective = More likely to be legislative = based on conduct that will occur in the future. C. Rule of law: more that it is based on already established decisions = the more judicial it is; less standards to guide decision = more quasi legislative. Factors (not clear-cut—usually fuzzy): -Prospectivity (i.e. notice of future law change) v. Retroactivity (back dated law) (only part of the difference— some adjudicatory actions may still be prospective) -RELIANCE! Reliance interests are greater for retroactive actions, since in theory, a prospective action gives notice, allowing people to plan for changes such as selling property or motifying behavior. •Protection of reliance interests more important when action is retrospective, and sense of fairness and justice counsels that individual be directly involved in proceeding when such interests are upset. •But note that prospective decisions can upset reliance interests too! -Generality—legislative actions affect broad classes equally while judicial actions are focused on particular individuals or entities. •Propriety of fact-finding at a judicial type hearing –Adjudicatory versus legislative facts *Example—suppose in Bi-Metallic, the board said it was only dealing with Mile-High Stadium. The issue is ―What‘s the value of the stadium‖, versus ―Are the property values in Denver generally over-valued?‖ and the party one would ask is the property owner. The more general, the less likely the affected parties will have relevant information— general, legislative facts are more suited to reading, examination, policy, etc., whereas adjudicatory facts = ―what happened.‖ –Pragmatics – the number of parties and feasibility of trial type hearings •Propriety of political accountability –The size and influence of the directly affected class compared to the relevant electorate (see BiMetallic) -Creating Rule of Law (Institutional Competence)—legislative actions create policies and rules while judicial actions apply policies and rules to particular situations. [key—create v. apply] •Propriety of Judicial Oversight –When policies and rules already exist, courts can apply them without making value judgments; other wise courts are not engaged in legal decision-making, but policy-making. -Courts are good at applying standards, but not so good at creating standards. •Propriety of Legislative Oversight –When rules already exist, legislative decisions can reflect politics in the negative sense of raw transfers of wealth to appease interest groups 4. Seidenfeld: ―What‘s really going on‖—why did Holmes write opinion in Bi-Metallic and rely upon the ―Number of people‖ which is a weak argument? B/C Holmes dissented in Londoner—he thought there was not a difference. This was about store-owners not wanting the street paved and definitely not wanting to pay for it; ergo, Holmes thought it was quasi-legislative. Additionally, raising property values resemble quasi-adjudication, but Holmes has to reconcile with Londoner—reverts to poor argument of ―Number of People.‖
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Overlap between all the factors—even legislative v. adjudicatory 5. Coniston v. Hoffman Estates (Posner, 7th Cir.) Developer applied for approval of a development. Not approved by County Board and no opportunity provided for a hearing. H: Zoning decisions are inherently legislative, because they involve balancing of factors that are not known in advance. This is not applying existing law, and therefore not judicial in nature. ―No due process required.‖ [Does 7th Cir. ignore the fact that this affects only one person with a particular property? What of the fact that the zoning regulations are already set? Not general; not policy making; but nonetheless do not have to comply with due process] Concern of Arbitrary Action—when actions seem arbitrary, it‘s often and indication that something else is going on. The way around arbitrary action is explanations! (Generally, though, courts tend not to follow thisusually treat zoning as quasi-legislative) 6. Richardson v. Eastover—Town decides to clean up Main Street, due to shootings, drugs, fights and noise. Declined to renew licenses of all four bars on Main Street, even though bar owners were not responsible for any of the illegal conduct. The court declined to decide whether the decision triggered due process, deciding instead that the bar owners were given a sufficient hearing. Should due process attach to this decision? -Arg that this is legislative: policy oriented; (might be a taking, though) -Arg that this judicial: mere denial of the renewal of licenses, rather than an announcement of a policy of main street no longer being a suitable location for bars. NOT GENERALLY APPLICABLE. -Retroactive v. Prospective? Some of each… -Legislative fact v. adjudicative facts? Some of each—the town is implementing a general policy objective of trying to prevent fights and noise (legislative). However, adjudicative facts include the owner‘s knowledge of facts regarding his particular bar. Create some type of Matrix here for arguing whether something is quasi legislative or judicial )include the different factors mentioned for ―deciding‖.
Due Process Analysis—Question 1: Quasi-judicial or Quasi-legislative? B. Question 2—is the claimed interest protected by the due process clause? 1. Historically, there was a distinction between rights and privilegesrights were protected by due process; privileges were not. Now, both liberty and property interests are protected. Goldberg v. Kelley—welfare benefits are protected under due process clause. Erodes the distinction between rights and privileges—instead, new goal is prevention of arbitrary government action. *Result of ―New Property‖—Prof. Reich argues that gov‘t largess has resulted in a change in emphasis, a change in what is important to individuals.
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* Ct. advocates test of balancing individuals‘ interest in a hearing with entity‘s interest in failing to hold a hearing. (consider adding due process shit form gey’s class) 3. Board of Regents v. Roth State entered into a contract for one year with a professor. State did not renew the contract (there was no indication in the contract that he would be retained for more than a year). No hearing. : This is arbitrary; I‘m out of a job, and they didn‘t tell me why. It‘s really because I spoke out against the system H: Due Process does not require a hearing. No property or liberty interest—there is no tenure *Liberty interest (Natural Law)—―those privileges long recognized as essential to orderly pursuit of happiness‖ (e.g. natural rights—right to contract, right to engage in legal occupations, raise children, religion—essentially, COURT CREATED). Here, did not take away right to occupation
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b/c it didn‘t infringe upon his right to be a professor at another school. This is only based on what the court is making up. *Property interest—―defined by government. Statutes, constitution, etc‖Positive Law. Must be more than a unilateral (subjective) claim of right—must be a mutually recognized expectation for benefit (objective manifestation of agreement). An entitlement; a reason to say ―I deserve that.” 4. Perry v. Sindermann Teacher was fired without a hearing. Here, there was an unspoken tenure system that had attained (employed for ten years). H: Due Process required—manual states that if standards are met, teachers won‘t be fired. This was also the practice of the university. This is sufficient to create a property interesta mutually recognized expectation. S says that Sinderman had a property interest since he had tenure (presumably renewable contract); but Perry (other case) had no property interest because he had a contract which no expectation should have arose as to it being renewable. 5. HYPO—A prisoner (Joe) is transferred from a medium security to max security prison as a result of a prison uprising. Not clear who started this uprising, but the finger was pointed at Joe. Did this switch deprive Joe of a property or liberty interest? Pro: No liberty interest once one is in prison [and actual holding—uses different standard of liberty for prisoners. Uses entitlement analysis—―you could have been sent to max security right off the bat, so you don‘t have any entitlement not to be there now‖] Con: He‘s obviously lost some freedom 6. Same facts, but prison protocol indicates that changes in prison must be predicated upon problematic behavior. -Due process is probably needed—―mutually recognized expectation for benefits.‖ 7. Say the prisoner gets transferred to Mental Health Ward. Due process required? -Likely to have a liberty interest—stigma of going to a mental ward; lost liberty interest of having to take pills, etc. ****Must have Stigma + -Does this interfere with mutually recognized expectations? Probably—it‘s not mutually recognized when convicted that you‘ll be transferred to the psych ward and treated with drugs that cause side effects. 8. Application of Entitlement Approach -There is tension—the goal of due process is to constrain discretion, but discretion may only be constrained when standards exist (quasi-adjudicatory role) when arguably discretion is less needed. 9. HYPO—hospital has a policy that a DR will not lose his privileges unless he is unfit to practice. DR has his privileges removed without a hearing—sues for reinstatement. After filing suit, the hospital holds a hearing and then finds him unfit. Due Process Violation? a. b. Ct: DR had a property interest in his hospital privileges which cannot be withdrawn without due process Due process was met by the later hearing but that hearing came too late and that the doctor was entitled to salary or lost income between his firing and the time of the hearing. He got the back pay.
C. Entitlement Approach Applied 1. Irony of the due process entitlement approach—it only applies when already has something akin to a contract right (an entitlement), or other legal right, but does not apply where no right existsstate commissioned arbitrariness. 2. Creating Entitlements (from most recognized to least recognized)
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a. b. c. d. 3.
Receipt of Benefits Based on Prior Determination of Eligibility-sufficient Receipt of Benefits Without Prior Determination of Eligibility (Institutional Practice)—usually insufficient Claim of Initial Entitlement to Benefits w/o Prior Receipt (Obtaining Benefits rather than Keeping Them)—usually insufficient fro DP Claim of Entitlement Based on (Gov’t) Contractual Relationship
Initial Receipt of Benefits •Goldberg v. Kelley dicta suggests that claimant has a right to hearing on initial entitlement •Reliance interest for initial entitlement is less –but goes to weight of interest, not type, contrary to teachings of Roth & Perry—Not, ―is there an interest?‖, but ―what is involved—do both parties recognize this?‖ •Lower courts have recognized such interests as protected property –Rehnquist suggests, in dissent from denial of cert on one of these lower court cases, that this is an (unacceptable) extension of due process analysis—suggests receipt is important.
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Claim Based on Contractual Relationship a. AMMI—Employees, whose benefits were withheld under a provision of the PA Workers Comp statute, sued, arguing that they have an entitlement to benefits and therefore are due a hearing before payments are delayed. –Majority distinguishes interest in claim for payments from interest in payments –Ginsburg adds gloss that majority merely holds that plaintiffs don‘t have property interest in immediate receipt (pragmatics—can‘t expect an immediate, day-to-day determination), but have one in receipt (in general)— –Breyer and Souter concur, suggesting that in some circumstances, past receipt of benefits would give plaintiffs right to continuation until a hearing (again, emphasis on receipt) –Stevens concurs, suggesting that contract -hearing satisfies due process. Remedy is under contract law. b. G&G Sprinkler Government was in contract with a contractor, who was in contract with a sub-contractor. Sub failed to pay employees adequate amount, in violation of CA Labor Code. By code, CA withheld money to con., who withheld to sub. Sub argued that this money couldn‘t be withheld w/o a hearing. –Held that claim for payment under a contract creates no present entitlement to payment. –Hence ordinary process for resolving contract dispute satisfies due process –Not clear if adopting Stevens rationale from AMMI or majority rationale with different wording
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What does the entitlement approach require? What constitutes an entitlement? a. Ambiguity in Standard –Court deferred to state / agency judgment rather than inquire into whether those affected and the state generally treated the standard as creating an expectation of entitlement b. Standards that Leave Discretion –Board of Pardons v. Allen – as long as standards are given to guide agency discretion, they create property interest. (The existence of the standards were the only important thing here) Sufficient guidance was given therefore he was entitled to a hearing. Guidance is enough. –Kentucky Dep‘t of Corrections – standards create property interests only if they mandate outcomes in particular factual situations (i.e. if a reviewing court could reverse agency for misapplication of standard)The more the discretion the less likely there is an entitlement. c. Procedure or substance? The entitlement approach only applies to the substantive expectations, not procedural expectations. Entitlement Approach only applies to Substantive Due Process! d. Procedural guidelines will allow you to take the case to court but it doesn‘t entitle you to a reasoning for being fired. A violation of procedure is not an entitlement claim but a deprivation of property because the P loses his/her property – that is his right to trial. A violation of procedure doesn‘t automatically give you an entitlement claim in federal court.
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D. Liberty Interests--What constitutes a privilege that is recognized as essential to the pursuit of happiness? 1. Court provides a normative component a. e.g., the right to engage in a common occupation, but not prostitution or a bookie b. Reputation +, but not reputation alone… (These are the two liberty interest ―tests‖) Constantineau—town drunk couldn‘t buy alcohol, so he was entitled to due process (defamation and removal of liberty) Paul v. Davis- was labeled a shoplifter by the town, and wants a hearing; distinguishing Constantineau, ct. holds reputation alone is not sufficient for entitlement [is this positive law creeping in? THINK!] Meachum v. Fano line of prison cases that stated prisoners were not entitled to the same standard of due processhearing is req‘d before a prisoner is transferred to a psychiatric facility.
2. 3. 4.
E. What Process is Due? 1. Matthews v. Eldridge is receiving disability benefits from SSA; four years later, after a questionnaire and contacting his physician, the SSA determines that he is no longer eligible for the benefits. Process he has available: State agency determination; review of state agency determination; appeal to an ALJ in front of SSA (all the while, is not receiving benefits). : I need an evidenciary hearing before they cut off my benefits (see Goldberg v. Kelley). Issue: Does due process require this? H: Due Process means different things in different situations—allows flexible procedures and provides a test to determine when more procedure is appropriate. 3 factor balancing (squishy) test: -Private interest deprived (benefit) – Degree of potential deprivation – (P‘s interest = value of interest) -Risk of erroneous deprivation without additional procedure; value of additional or substitute procedural safeguards (benefit) – Fairness and reliability of Existing Procedure – (decrease in th probability of erroneaous deprivation) -Government interest in not having additional procedure (cost) – Burden of additional procedures on the state *So, the test is (Private Interest or value to P) x (Risk – % decrease in erroneous deprivation) > or < than Gov‘t Interest – (cost to gov of additional procedures) Seidenfeld does not think that the Plaintiff always loses this. -The court applied this test to the average claiment instead of subjectively. 2. Now, Due Process test is: Quasi-judicatory or quasi-legislative? Is the interest protected? (i.e. Property or liberty? (Goldberg and Roth)) ? What is the value of the interest? (Matthews balancing test) How did the Matthews Court apply its own test? a. Private interest: ―Being deprived of disability benefit is not as dire as that of being deprived of welfare—he can still receive other forms of gov‘t benefit/ income / etc.‖ S: ―Shouldn‘t this be evaluated according to the actual value of the benefits to the ? Why only say it has no value b/c he has other things to fall back on?‖ Roofner: The court achieved this result with regard to the larger picture—the value to the average ; it is not as concerned with the private interest to this particular , even though it might affect his private interest more than the average disability payment. [What is the lesson? Don‘t focus on the value of procedure to your client, but rather, the value to the whole class of s] See also: (1)Lasater Case: about adoption. Judge deviated from using ―average person case.‖ (2) National Association of Radiation Survivors: Dealt with soldiers in WW2 watching explosion of a bomb. 30 years later, man of those had cancer problems. Issue came up as o how much the Vets had to pay for lawyer, but a Vet agency tried to limit this. Main point: in Matthews, the evaluation is based on the average person, but NARS says that the court can calculate for the ―subclass‖ if such a class does actually exist. (Seidenfeld wrote part of this brief) *Other problem—this test is extremely subjective, and differs according to the preferences of individual judges.
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b.
The Value of Additional Procedure (Risk of erroneous decision) -The court limited its analysis to instrumental value Focused on whether additional procedure would increase accuracy, rather than make an outcome more acceptable (fairness; value of involvement) for those seeking benefits. *Also focused on value of adversarial procedures, rather than on alternative models to provide neutral professional assessment (neutral doctor assessment; attempt to find a job) [Chris—Isn‘t this implicitly contradictory? This focuses on the value of additional adversarial procedure, but the point of the case is that due process means different things in different situations]
c.
What is the gov‘t‘s interest in refraining from additional procedure/Cost to state: -Administrative burden of additional procedures (how much would extra procedures cost in direct dollar expenditures) See Matthews. -May interfere with other interests, aside from direct costs. E.g., potential for procedures to interfere with the state program. See Ingraham v. Wright.
d.
At some point, the agency is entitled to deference, and separation of powers requires that the court trust the agency as experts. This begs the question, why subject the agency to review at all? Politics—scarce resources might lead the agency to cut corners, save costs, and lead to judicial doubt of the agencies‘ motives, even though they are trusted as experts. ―We don’t want this statute to be undermined by the day-to-day politics of agency operation.‖
Due Process On Exam: Step 1 Quasi-Legislative(No DP); Quasi Judicial? Step 2: if Quasi Judicial (Must be a Liberty or Property interest for DP: Property interest= entitlement analysis, must have a right to something (see Perry, Roth, GG Sprinkler (no contracts) Liberty Interest= must have ―stigma +‖ or a deprivation of a ―natural right. (see Step 3 but the question becomes ―What Process is Due? sometimes ―no process is due process‖. Matthews 3 part test is the main standard to look towards here, but be sure to consider how a ―subclass‖ can alter the formula (see Lasater, National Ass. Of Radiation Survivors) F. What is the Impact of Post-Deprivation Procedures? HYPO--Under Florida Dep‘t of Agriculture statute, the Department may confiscate property to prevent the spread of disease among the state‘s crops. Under Department regulations, the state will cut down any citrus tree within 600 yards of a tree infected with citrus canker. Landowner with a healthy lime tree within 600 yards of diseased trees sues to enjoin the state from cutting down his tree until the state establishes that his tree is a threat to agricultural crops. Tree owner claims that cutting down the tree without a hearing establishing that his tree poses of threat of spreading a communicable plant disease is a violation of his due process rights. What outcome? 1. 2. H: No need for pre-deprivation procedures when: -Procedure would impose delay that gov‘t could not afford (emergency situations such as contagious disease)exigency. -Post-deprivation avenues for redress against the state for erroneous deprivation exist, such as a hearing and compensation for the value of the meat plus interest. -fit in Matthews v. Eldridge Analysis: -(Value to the P here = only the lost value from the time it was taken till when they can prove that it was erroneously taken) x (% decrease in erroneous deprivation) < >(cost to gov‘t of additional procedure = potential for many to become sick) *Seidenfeld—this might reflect an antiquated notion of what constitutes a hearing—adversaries, etc. **What is the nature of the exigency? US v. James Daniel (5-4)seizing real property to exert control against an indicted drug dealer is not sufficiently exigent, as real property isn‘t going anywhere. North American Cold Storage—Chicago has authority to destroy any meat deemed putrid. wants predeprivation hearing.
12
3.
The presumption of ―some kind of hearing‖: -Judge Friendly—advocated more flexible hearing procedures along with a principle that the state is required to give ―some kind of hearing‖ prior to deprivation. -Goss v. Lopez—seemed to adopt Friendly principle and held that state could not suspend student from school without at least confronting student and giving him an opportunity to tell his side—using the term ―some kind of hearing.‖ The value of losing days of school might be low but the cost of additional procedure (just talking to the student) is trivial. *This didn‘t last long
4.
Ingraham v. Wright—FL case, challenging corporal punishment as a violation of due process. ―Liberty interest that should not be deprived without a hearing.‖ Ct: Yes, this was a liberty interest, but no additional process is required.(One of Seidenfeld‘s favorite cases) -State school system may authorize teacher to paddle a student as discipline without any prior procedure to ensure that the punishment meted out is warranted. -Ingraham and the impact of availability of post-depravation procedure on: –Value of interest at stake (Ct: not strong*—traditionally and historically, kids have been paddled in school) *What of the fact that in a pure property (monetary) interest case, there is a good chance that post-deprivation remedy will not make totally whole ( this is not a purely monetary interest), whereas with a liberty interest, there is not a comparable post-deprivation remedy? Can‘t get pain/embarrassment/etc. back. Not fungible with money The student could pursue a claim under state tort law. –Risk of erroneous deprivation (Ct: important factor—a) deterrent effect of criminal/civil sanctions are sufficient [don‘t need pre-deprivation remedy because of the sufficient postdeprivation remedy – fear of suit will deter the teacher from beating students] b) additionally, Ct states that additional process would not increase accuracy because the teacher is in the room and sees the behavior (!)*) *Seidenfeld—Decision-maker‘s should not be allowed to see evidence themselves. This reduces the impartiality of the decision-maker. Also, in some sense, the teacher has a personal stake, and what they saw may be mistaken… -Also, what of the ―color of state law‖ which might make it more difficult to recover from the teacher (11th amd., etc.) –Government interest in preventing added procedure— a. Additional direct cost is a factor b. In Ingraham, the effectiveness of corporal punishment could be undermined by requiring a pre-paddling hearing—disruption in classroom, etc.
5.
Impact of Post-Deprivation procedures—summary a. Need to fit the analysis into the Matthews v. Eldridge framework (see Zinerman v. Burch—prisoner was being treated by anti-psychotic drugs; while he was under influence, the wardens made him sign a release stating he was committed to the state hospital voluntarily. CT: If a person acts negligently or intentionally to break the rules, a hearing won‘t help.) b. Question becomes, again, what interest is being protected? It is not clear what constitutes the delineation of liberty interests … c. Must remain awareness of alternate approaches such as North Am. Cold Storage principle—post-deprivation d. Prison cases—distinction between accidents and negligence (which may not create a deprivation).--> must show intent, see three cases below. e. What about notice as an alternative to process? Think ―bike locks‖…
W/ procedural due process mental state = bottom line must show that the state intentionally robbed you of your liberty or property interest. 1) Parrat v. Taylor (1981): prison case, went to solitary and while there he received a hobby kit. This got into the mailroom and disappeared, he sued prison for procedural dp cuz they took his prop w/o giving him a hearing first. Court here ducked the issue but noted that this was a random and unauthorized act of a state employee, not an established state procedure. So it was neg and not intentional, but court said that a tort remedy was sufficient ―process‖…LATER CASES say Parrat is NOT a procedural dp case cuz the best P could show was that the state lost the kit negligently. 2) Hudson v. Palmer (1984): prisoner had his room given a shakedown for contraband and broke some of his stuff or something and officer discovered a ripped pillowcase, COURT said this was just negligence so u do not have a procedural due process claim.
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3) Daniels v. Williams (1986): overruled the part of Parrat that had suggested a negligently inflicted loss could amount to a deprivation of due process in the absence of a state tort remedy. Inmate slipped and feel on a pillow negligently left on a stairway. Bottom Line Hudson v. Palmer and Daniels v. Williams stand for the fact that u must show intentional deprivations, if u can only show that the gvt negligently did something then that is NOT enough to establish procedural due process.
V.
APA Procedural Requirements A. Must memorize and know
Procedural Requirement \ Decision Mode Rulemaking (not order) Adjudication (order)
Formal
Informal
Less Than Informal
Trial Type (Some exceptions) §§556 & 557 Trial Type §§554, 556, & 557
Notice and Comment §553 (substantive rules) Nothing, or §555 ―Ancillary matters‖ (??? Not clear if this applies or not)
Publication §552 (ALL rules, including procedural & interpretive) Not Applicable
B. HYPO—Wetlands Preservation Act1. EPA wants to implement a rule requiring contractors to acquire a permit What procedures must the EPA follow (ie. what steps must it take) in order to adopt this rule? First, must determine if this is rulemaking or adjudication -Def of a rule is found at 551(4)—―general or particular applicability and future effect (prospective) designed to implement, interpret, or prescribe law or policy (additionally, rate setting is a rule, despite having characteristics of adjudication)‖ Next, must determine whether this rule requires formal or informal requirements Def.: ―Formal rulemakeing‖ requires ―trial type‖ procedures—sworn statements, creation of a record, etc. Def.: ―Informal rulemaking‖ requires notice and an opportunity for public to comment So, which one does this require? § 553(c)—sets ―Notice and Comment‖ procedure for informal record, but only requires trial type proceedings when the agencies‘ statutes and rules require such proceedings. In this hypo, there is no indication that formality is required. The agency must give notice of the rule, which is published in the federal register. Then they must allow a period of comment (reasonable time – 30-60 days). The rule can take affect no sooner than 30 days after publication. Suppose a statute/agency rule did not require a hearing (formal) but required a submission of comments and opportunity for rebuttal comments? This extra procedure would have to be followed—the APA sets a minimum, and the agency/legislature is free to impose additional procedure. [Comment procedure is located at §553(c)] 1. § 559 the statute takes precedent over the agency, there may be common law reguirements in which the EPA must follow even if this is additional procedure Suppose the statute required a hearing and any rule adopted be supported by evidence in the hearing record? Agency must follow §§556 & 557. *Some differences in Formal Hearings and Trials—taker of evidence does not have to write the opinion; FRE do not necessarily apply i. ii. §556—―Hearings, ALJs – witnesses, testimony, powers & duties, burden of proof, record as basis of decision (exceptions for in §557) §557—―Initial decisions, conclusiveness, review by agency, submissions by parties, contents of the decision, record.
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2.
Now, EPA wants to fine a builder for violating the rule— Adjudication or rulemaking? Adjudication—―agency process for the formulation of an order.‖ Is the fine an order? Order: §551 (6): ―any disposition of an agency in a matter other than rule making.‖ (order is defined in the negative.) Is this rulemaking? No—it is retroactive, rather than prospective. b) What Procedure does this require? §554—Formal—―In every case of adjudication required by statute to be det. on the record after opportunity for an agency hearing.‖ c) If statute had authorized EPA to fine violators, but had not said it must first hold a hearing and make determinations based on the hearing record, what procedures would the EPA have to follow? -This is an order, and therefore is not a rule. The statute does not require a formal hearing; the APA makes no mention of Informal adjudication (only formal adjudication for orders). Seidenfeld: agencies make informal adjudications all the time—day-to-day matters ARE adjudications, but we won‘t require a hearing for every single one. a) -But see §555—―Ancillary matters.‖ Some (very few) courts have held that this applies to all agency matters. [S—this was originally intended for attendant circumstances in existing adjudications—think ―ancillary jurisdiction from civ pro‖—and this causes some problems, uncertainty with broadly applying §555]. §555e Supreme Court dicta indicates that this may apply in every agency action. *What process does §555e entitle a person to? Probably not much…
3.
Landowner wants a permit from EPA—fills out a standard questionnaire, responds to questions on the questionnaire, and the agency then makes the decision based upon the responses. a) Is this a permit rulemaking or adjudication? Definition of ―order‖ includes a license; def. of license includes permits. We know we‘re in adjudication; under the APA, there is no such thing as an informal adjudication; §555(e) would seem to indicate licensing always requires formal adjudication; however, courts have read ―licensing‖ the same as other orders, and only require a formal hearing when required by rule/statute. §558 applies specifically to licenses, and suggests that §556/7 (trial) applies; the courts interpret the statute to say that 556/557 only apply if the statute determines that a hearing is necessary.
4. Ernest wants the EPA to pass a stricter rule a) How can he attempt to get EPA to adopt the rule? §553—any person can petition the agency for a rule and a rulemaking proceeding; there is no obligation for the EPA to consider your application on the merits and it may merely flatly reject the rule.
5. What is the recourse if the party does not like the EPAs decision? a) §702—Judicial Review
6. Seidenfeld Rambling: § 553—provides exceptions to whom the rulemaking rules apply, ex. Military; internal agency management. Importantly, full N&C procedure is not required for: Interpretative rules, general policy statements, or rules of agency organization, procedure, or practice; when agency finds for good cause that notice and public procedure are impractable, unnecessary, or contrary to the public interest (emergency rules). -This is Seidenfeld‘s Publication/Less than informal rulemaking. Only req. is that the rule must be published before it is used against someone. C. Trigging Formal Adjudication 1. §554: ―this section (formal adjudication) applies in every case of adjudication to be determined upon the record after opportunity for agency hearing.‖ the language that triggers formal proceedings is the same for either an administrative or judicial action, it is just listed in a separate section. This is the precise same language that is utilized for triggering formal rulemaking. a. What if the statute said, regarding rulemaking, only that the rule must be implemented after a ―hearing‖ but does not mention a record?
2.
15
If the statute stated that a ―hearing‖ is required, and the statute predated the APA, the presumption was that the hearing is to be formal (with the establishment of a record). That is, until FL. E. Coast RR, where the Ct. ignored the date of the statute, and only required a formal hearing when the statute calls for a ―hearing on the record.‖ ii. If the statute stated that a hearing is required, and the statute was enacted after the APA, the presumption is that the required hearing is informal. iii. Generally, courts were more willing to allow informal process for rulemakings (exception: ratemaking)— ―this is legislative—we want to free up parties to use informal process…there must be some kind of indication that Congress intended a decision on the record.‖ Therefore, most* rulemaking is only required to be informal (notice and comment). i. *Occasionally, there are ―hybrid‖ procedures which require more than notice and comment and less than a decision on the record… **This is also a minimum—an agency can choose to have more procedure than the APA requires. 3. So, what about adjudication? Since the language is the same, does this also apply to adjudication? Or is there something inherently different about adjudication? 1. What is adjudication? Broadly: day-to-day determinations; determinations of rights—everything that is not a rule i. ii. For routine/everyday matters, Congress intended the APA to impose no burden on agencies For significant adjudicatory matters, Congress expected that the agency would be required by statute or practice to hold a formal trial-type hearing.
2.
What if the statute uses the term ―hearing‖ (or even ―public hearing‖) for adjudication but does not state ―on the record?‖ i. Rulemaking – ―hearing‖ alone does not mandate that eh agencysue formal procedures (§§ 556 & 557) ii. Seacoast v. Costle (Presumptively Formal) 1. ―hearing‖ alone in adjudication – presumption that formal (§§ 554, 556, 557) procedures are required a. Overcome it – explicit language in statute or legislative history CWA permit for water pollution discharge—hotwater from a nuke. Issue: what effect will the hotwater from backflushing have on the life that is further down the estuary? CWA: can still get a permit if you can show that EPA‘s standards are more strict than is required to maintain life; statute provides for a ―hearing‖—issue is whether this requires a formal hearing on the record. Ct: There needs to be a hearing. There are experts who have told the administrator what to do; this advice needs an opportunity to be cross-examined. -Presumption that the word ―hearing‖ in the context of adjudication triggers trial-type proceedings. **When statute calls for a hearing in adjudication, the hearing is presumptively ―formal‖ under the APA. Problems with SeaCoast— -Is the solution to this problem requiring a hearing? Won‘t this lead to a battle of the experts? How helpful will cross-examination be? -Statute requires ―public hearing‖—what the court is requiring is not what the AEC statute intended when it was drafted.
iii. City of West Chicago (not presumptively formal) a. Unless the stature includes a regiment that the decesion be based on a record or other language indicating Congress intended procedure be formal – no formal procedures are required. Kerr McGee sought a materials handling license to decommission a nuclear material milling facility and dispose of radioactive wastes on site. City of W. Chi., where facility was located, asked for formal
16
hearings. NRC determined that it need not hold such hearings when requested under AEC because it used the term ―hearing.‖ Ct.: The language itself is dispositive—there is identical language in the rulemaking proceeding; adjudicatory language dealing with Rulemaking which the Supreme Court has already interpreted. We will follow the Supreme Court’s interpretation. ―When statute calls for ―hearing‖ the hearing required is not presumptively formal.‖ Seidenfeld: The Atomic Energy Act was overseen by joint committees of the Senate and House; problem of people asking for hearings and slowing things down. AEC: ―We need the flexibility to dispense with trial type hearings—we want to operate with informal hearings/written requests.‖ Congress: ―You cannot escape the formal hearing requirement, but now, you only must have a hearing when someone requests it.‖ (S: ―Is this not a good indication that Congress intended a formal hearing?‖) -Problem with this application of Florida Eastcoast Railroad—opinion acknowledged that, with respect to rulemaking, hearing can mean a number of things. With respect to adjudication, however, there is no something else—―the alternative to formal adjudication is nothing.‖ -In adjudications, more likely to have facts for which evidentiary hearings are appropriate. iv. Chemical Waste—EPA is required by RCRA provision to have a hearing before corrective orders. EPA: this does not require a formal hearing. a. Cheveron – if statute is silent or ambiguous, agency defers to reasonable/permissable interpretation! Hearing in statute is generally silent or ambiguous – among the three cases and approaches to the law this seems to be the trend. Ct: No need for formal hearing… ―public hearing‖ requires formal APA adjudication only if the hearings in question could lead to a civil penalty or the right to continue operations. -Use of term ―public hearing‖ is ambiguous—we must defer to the agency interpretation of its own rules under Chevron Problems—what statute was court interpreting? Not clear whether it‘s interpreting RCRA or APA. -Additionally, Congress writes procedures into the statute to check the agency—Does this make the invocation of Chevron appropriate? v. How do you reconcile these cases? You don‘t… -Most Ct‘s—read the individual statutes and try to discern the intent…
vi. So, the different and competing approaches are with Seidenfeld critics: -presumptively formal—may result in burdensome proceedings (Seacoast) could be very expensive, issue might not really be appropriate for a hearing now only followed in 9th Cir. -presumptively informal—eliminates procedure which may protect against arbitrary action (City of West Chicago) SC‘s rationale is wrong, ―hearing‖ doesn‘t mean you get much process, this could influence agencies to not give process Now followed only in 7th Cir. -Chevron (problem—agency will do what is in its best interest [presumptively not formal] which may eliminate the very procedure that is there to protect the regulated party) **It will always be in agencies best interest to push back on required procedure** (Chemical Waste/Chevron Deference) this is just asking ―what does hearing mean,‖ and not ―is hearing appropriate.‖ S would like to see the agency needing to be required to give reason for turndowns.--> Most. Cir, -Devine legislative intent—does legislative intent really mean anything? (used by most ct‘s) iii. Citizen Participation in Formal Adjudication 1. Usually, the agency and the regulated entity are parties. Who else can be parties? a. Do parties have to meet Art. 3 requirements? Not as a matter of Art. 3, because administrative adjudication is not a court. However, enabling statutes may allow standing that is broader than Art. 3.
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b.
c. d. e.
Traditional view—adjudication was not political, but an application of law and policy to facts; courts role was to protect rights (liberty & property) of those directly subject to regulation; agency role was to represent the public interest; remedy for dissatisfaction with agency was appeal/lobbying to political overseers. Formalist model—must have a legal interest (no standing; no need for it; the interests being determined don‘t effect you.) Expertise model—gov‘t is the expert, so you don‘t need representation. Ignores politics. Interest group model—agencies respond to interest group pressures, and courts role is to ensure level playing field in agency proceedings (equalize opportunities for interest groups to convince agencies). Any person who has an interest as a regulated entity or regulatory beneficiary entitled to be represented in adjudications. Agency given discretion only to ensure against redundant representation and presentation of evidence. *These interest groups will likely have standing for judicial review; therefore, there is a solid argument for inclusion in the agency proceeding to allow admission of evidence into the record so the review will be meaningful.
2.
Cases a. Office of Communications of the United Church of Christ v. FCC -Group sought to intervene on the re-licensing of a radio station (which allegedly played racist diatribes and did not provide opportunity for the counterpoint, e.g., NAACP)—showed effect and would have Art. 3 standing; FCC denied the intervention. Ct.: Right to intervene is liberal. We don‘t buy that FCC has gov‘t expertise and will work in the public‘s interest. -S: this is a liberal ―highpoint‖ of administrative intervention—establishes argument that administrative and judicial intervention ought to be tied. ―If one can go before a court to represent his interest, one ought to be able to go in front of an agency.‖ *For the most part, though, agency intervention is still liberal, and has not constricted as judicial standing has narrowed. b. But See Envirocare—―no connection between judicial standing and agency intervention.‖ -Rejects presumption of right to intervene set out in UCC—rolls back somewhat the notion of liberal right to intervention. -Looks to direct legislative intent about who should intervene -Reliance on Chevron doctrine [was reliance appropriate???] Facts: was the only entity authorized to take transported waste from nuclear sites (other plants had authority to store waste on-site—non-transported). NRC authorized movement to other sites-- sued, stating that this had impacted its interests (economic [breaking up monopoly]; also, protects the public safety) - had Article 3 standing (and NRC stated it could seek review in court, but couldn‘t intervene in the proceeding)—Injury in fact, zone of interests, etc. Holding: Article 3 doesn‘t apply—just as admin. standing can be more liberal (see UCC), it can also be more restrictive. -Seidenfeld—how did the court arrive here? ct: Look at legislative intent about who should intervene, considering the era (and thus, theoretical approach) in which the statute was passed. If the statute was enacted before 1970, Congress probably did not intend liberal intervention—rather, the traditional/legal process model would exclude the intervention, as the agency would represent the public interest. -Seidenfeld: is Envirocare the law? He doesn‘t know… *Probably still ‗liberal intervention‘ (UCC) generally allowed—however, there are cracks—if you can show Congress didn‘t intend to allow intervention, or show ambiguity (and use Envirocare‘s dubious* reliance upon Chevron for statutory interpretation) ***Possible Test Question—Effect of time period/theoretical approach. Currently, Art. III standing is becoming more restrictive—will administrative intervention follow?
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3.
―An agency is not an umpire calling balls and strikes‖—a party to formal agency adjudication does not necessarily (or even usually) have the same rights as he would if he were a party to a judicial proceeding—parties may have witnesses/evidence limited. * §555(b)—parties have a right to appear in person and be represented by counsel; have a right to ask to present evidence/witnesses (may not be granted).
4.
Seidenfeld: ―Courts make legal judgments and factual determinations‖—the theory is courts are a-political. However, agencies (especially under the interest group model) respond to interest group pressures—this is pure politics. This creates an argument for relaxing Art. 3 requirements, which exist partially to reduce the court‘s political motives/clout.
iv.
Evidence on which an agency can rely in formal adjudication 1. 2. 3. 4. 5. Explicitly, the Florida Rules of Evidence do not apply in agency decisions. §557(b)—ALJ may hear the evidence on which the agency decides Still must show ―materiality‖ and ―relevance‖ In other situations, the FRE do apply (i.e. privileges—attorney-client, etc.)—privileges are considered more important than the finding the truth. Hearsay evidence is generally admissible; can call witnesses to summarize other witnesses; can create a hypothetical and lead witness through answering the questions. Why? Because the ALJ is a lawyer and knows what is going on, whereas the jury may be misled. Notice Judicial Notice – 1. Adjudicative facts – obvious, known, or subject to objective varification 2. Legislative facts – general, help the court determine what the law is or is going to be – no limitations on use of legislative fact (don‘t have to be told in advance, not entitled to rebuttal) Official Notice – (Steps) 1. What facts can the agency notice? Any relavant material 2. Then must Inform the parties that agency will take notice. – subject to review of abuse of discretion 3. Allow a party to show cause why notice should not be taken or further evidence should be allowed. 4. Consider whether to allow a party to testify about the fact. 5. Find the facts based on the record (including notice and perhaps other evidence) – reviewable by looking at whether there was substantial evidence in the record
6.
a. Castillo-Villagra v. INS Deportation proceeding—Nicaraguans sought asylum, attempting to show that if they were deported, they would be threatened by the Sandanistas. The Board of Immigration Appeals took administrative notice of an election in Nicaragua and determined that because the Sandanistas had lost, the threat to the s had disappeared. was not given an opportunity to rebut the notice and present evidence supporting their argument that, despite the election, would still be endangered if they were deported to Nicaragua. The board could take notice of any of the facts and should. -Standard here is from the Imigration and nationalization act -The error was in the 3rd step in not allowing the party to show cause why notice should not be taken.
Ct.: It was not improper to take notice of the election (legislative facts); however it was improper to take notice of the inferences (fear of persecution is unfounded due to regime change) the board drew from the noticed facts without opportunity for rebuttal [S: This means they can take notice of adjudicative facts! Agency‘s capacity for notice is therefore broad! However, there must be an opportunity for rebuttal for controversial facts]. -Judicial notice is proper for non-controversial facts…Administrative notice is broader—though better suited for ―legislative facts‖, administrative notice can be used for judicial facts
19
b.
Squishy Test—Agency has discretion of whether to take notice, and of whether to allow rebuttal evidence, and even whether to warn whether notice will be taken (reviewable for abuse of discretion). As the facts grow in controversial nature, the decision not to warn or allow rebuttal evidence is more likely an abuse of discretion. Procedure for Official Notice: Agency decides to take official notice ↓ Agency must let parties know of intent to take notice and allow them to respond ↓ parties proffer proof that notice is improper ↓ ↓ agency decides to hold Agency declines to hold hearing on hearing on the factual issues factual issue ↓ ↓ agency decides factual issue agency decides factual issue ↓ ↓ judicial review of fact fact finding judicial review of decision not to (substantial evidence standard) hold hearing (abuse of discretion std.)
c.
d.
Why do we let agencies take notice that is broader than judicial notice? -Expertise -Efficiency -―Do what‘s right/best‖ nature of agency, rather than a judge, who decides who had the best argument. May want to seek a more appropriate/policy-oriented outcome than is encapsulated by the arguments -Judicial Review also serves as a check Comparison (with judicial notice) -Judicial notice is much narrower—courts may take notice only of facts that are uncontroversial in nature. -Official Notice is broader, but attended by protective procedures
e.
Suppose INS held a hearing, and all that existed was the s fear (unlike the actual case where the state dep‘t report indicated s fears were well founded) and a letter from his brother? Can the agency take official notice of contradicting evidence? -Yes—agency can reject testimony; once the agency takes notice, it is as good as any evidence in the record. (They must explain why they think they‘re right and your wrong, but there is no requirement to enter countervailing evidence into the record. Limit may be judicial review.) -S—does this give you pause? Do you question the agency‘s purpose/motives? *Intimation in the opinion—notice can be taken WITHOUT PROCESS for uncontroversial legislative fact…occasionally, however, other courts will remand procedurally, even noncontroversial legislative facts.
1.
Hearsay Evidence State i. Burden on Gov‘t ii. Hearsay to support gov‘t fact iii. Nothing else in the record b. FRE do not apply—―hearsay‖ is allowable this isn‘t heard in front of a jury or a general judge; the ALJ presumably has expertise, and will know when he‘s being duped c. While hearsay is admissable things such as confessions to a preach will not be permissable because there is the policy to promote the privilege of confession in church. d. Under Federal law, an agency finding will be upheld if supported by substantial evidence—such evidence may be entirely hearsay (and therefore inadmissible in court) a.
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[Aside—What about Florida law? ―Substantial and competent‖ evidence. (―competent‖ evidence is evidence that is admissible in a court of law—THIS MEANS THAT IF THE DECISION IS BASED ENTIRELY UPON HEARSAY, THE AGENCY DECISION CANNOT STAND)] ii. ALJs Role in Adjudications 1. In the Federal system, the ALJ is an employee of the agency. *He is the trier of fact for the agency. This is comparable to having a trial judge as an employee for an appellate judge. Problematic? *However, ALJs are not subject to supervision (at least, on a day-to-day basis) by anyone involved in investigation or prosecution—they are in a ―separate box‖ in the agency structure. 2. AJs—preside over disputes that are not subject to the requirements of APA. AJs can be a judge in one case, a prosecuting attorney in another. Do not have the mandatory independence required by APA. Ex Parte Rules--§554(d)(1) (―ALJ may not consult [another] on a fact in issue unless on notice and opportunity for all parties to participate‖) and §557(d)(1) but could presumably consult with a law clerk. Central Platte Nat. Resources v. Wyoming (Neutrality) Water use controversy upon the Platte river. At the hearing, the agency (realizing this would be technical) used an expert to preside over the hearing (essentially used her as an additional ALJ). However, she had written a study regarding the need for water/demands upon the Platte river—the very issue in the case. Next, she advised the Director as to what the outcome of the case should be—it happened to coincide with what she had previously indicated in her publication. Issue: Does the expert‘s previous publication indicate her bias/unfitness for assisting in the decision? Additionally, she has knowledge of the facts from outside the proceeding, and the decision is supposed to be based upon the record. Ct.: Prejudgment—Everyone prejudges; ALJs having opinions about the law and policy; this does not disqualify them from presiding; otherwise, many ALJs would be disqualified in many circumstances. -However, with respect to facts, an adjudicator who has actually ‗prejudged‘ the FACTS, should be disqualified. A person can have prior knowledge, but this prior knowledge cannot become prejudgment. * Hypo—in the federal system, can an ALJ call up his friend during the proceeding and ask for information? -No—Ex Parte rules— §554- once an ALJ/decision maker is assigned to the case, he cannot talk to ―outside‖ sources (cant talk with others about a fact or issue in an administrate proceeding). The information must be on the record, and the parties need to have an opportunity to rebut. -However, this does not apply to the head of an agency who is talking with someone else to help them make a decision on the case, as long as the prosecuting side does not consult with the agency head. *Hypo—can an agency assign a specific ALJ to a case (in the Central Platte case, the expert was hired specifically for the case)? Here, per S, the difference is legislative v. adjudicative (again)—the expert above was hired for her expertise on legislative facts. 5. Agency Management of ALJs a. Agencies may direct ALJs about how to conduct hearings, including telling them the weight they should give to expert witnesses, and the proper length of hearings and opinions. Agency may set a reasonable production quota for ALJs (at least, in a context like the SSI disability program where claims are handled in large volume). Nash v. Bowen—SS case. Program imposes review of ALJs whose approval rate for benefits is higher than the agency would like (that is, every single case would be reviewed sua sponte, for deviance from SS‘s goals—―you‘re a problem and we‘re watching‖). ALJ bring pro se action stating this review impairs ―decisional independence‖, as specified under APA.
3.
4.
6.
7.
21
Ct.: ―The [agency‘s] efforts through peer review to ensure that ALJ decisions conformed with his interpretation of relevant law were permissible so long as such efforts did not directly interfere with ‗live‘ decisions.‖ -Reasoning behind setting benchmark for reversal rates—ALJs hear large numbers of cases; if they‘re applying the same law, their reversal rates should be roughly the same; if they‘re not, then there is an inherent unfairness/arbitrariness as the persons chances of recovery are primarily determined by the ALJ presiding over his hearing; also, inconsistency may reflect deviation from agency policy; AND ANYWAY—they still get judicial review after the ALJ hearing. S: ―IF it is not the facts that are different [and, statistically, they‘re probably not that different given the large number of cases] then inconsistency reflects a deviation/error in application of agency policy, WHICH IS THE AGENCY‘S JOB TO MAKE.‖ The case suggests that an agency would step outside of its allowed managerial role if it aimed to limit the number of cases by an ALJ resulting in a certain outcome; however, an agency may be able to use outcomes as a reason for focusing attention on ALJ decision if the outcomes indicate a potential problem with 1) quality of decisions, or 2) application of agency policy. 8. S: You can see how politics plays a role in administrative law would never have a politically accountable entity reviewing the decisions of federal judges and deciding the law was improperly applied.
G. Institutional Nature of Decisionmaking in Formal Proceedings [S—this is the real crux of why an agency proceeding is different than a judicial proceeding]
1.
Morgan I (1936) [precedes APA, which responded to these cases—however, while this is ratemaking and therefore rulemaking (if under the APA) there is little difference in any formal proceeding] Ratemaking proceeding regarding stockyards in Kansas City. Sec. of Agriculture to make a decision about maximum rates. There was: a hearing, lots of testimony, enormous record. The stockyards filed a brief based on the record stating what the rates should be (according to them); the new Secretary, who did not hear the arguments, relied upon the briefs, review of the record, and a memo by a staff member that was not disclosed to the Stockyards. Ct.: Statute requires a full hearing; in order for the hearing to be a ―full‖ hearing, ―he who decides must hear” (and the hearings in question were not in front of the presiding Secretary who ultimately made the decision). -Is reading part of the transcript enough? -Can (and should) you impose on the agency the requirement that it should look and act more like a court because the statute requires formal hearings? -This ―He who decides must hear‖ is a judicial notion, despite the fact that this is rulemaking.
2.
Morgan II (1938)—―Whatever the Secretary did, it was sufficient to satisfy the requirements of a full hearing.‖ Ct. ignored the problem that Secretary didn‘t hear—buys into some notion of institutional decisionmaking (implicit rejection of Morgan I ―he who decides must hear‖ rule). HOWEVER, Ct. has a problem with lack of notice—parties need to know each other‘s arguments, and need notice of how the agency/staff believe case should be resolved. Reaction/Discussion of the propriety/result/logic of the Morgan cases. a. After Morgan—the parties that may preside in a formal proceeding are: i. ii. iii. iv. b. ALJ (formal adjudication) Member of the agency (the head) Entire Agency (whole board) For rulemaking, can have a party that is not an ALJ (i.e. AJ)
3.
Parties‘ Procedural Rights: i. To present sworn testimony and other relevant evidence
22
ii. iii. c.
To cross examine witnesses (although oral testimony may be dispensed with in rulemaking or initial licensing if no party is detrimentally affected) Offer findings of fact and conclusions of law prior to the initial/recommended agency action
Post Hearing decision i. ii. Presiding officer issues initial or recommended decision becomes final if agency doesn‘t act or it is not appealed In rulemaking or initial licensing, a qualified employee other than one who presided may issue initial or recommended decision.
d.
Parties rights wrt initial or recommended decision—Must be given opportunity to file exceptions to initial or recommended decision (focuses the issues for the agency head) S: Another way to get around Morgan is to delegate the final decisionmaking authority to the ALJ. Hypo: What if, after a recommended order and briefs on exceptions, the agency head reviews the order. In addition, he has a member on his staff write a memo and consult others (i.e., ALJ, other known authorities, etc.)? Does this not defeat the whole purpose of requiring notice? *Ex Parte Rules (designed to guard against this)--§557—In rulemaking and adjudication, no party outside of the agency may communicate with anyone in the decisionmaking body about ―any relevant matter.‖ -Violation requires an entry into the record of all ex parte communication; may also result in the violator losing the case or contested issues. -§554—ADJUDICATION ONLY—Presiding officer may not consult ex-parte with any person about an issue of fact in the proceeding. Cannot: -Be responsible to or supervised by any person engaged in investigating or prosecuting the case. -No person involved in prosecuting or investigating on the case may be involved in making the decision on the case except as a witness or counsel in the public proceeding But—the Agency (i.e. the Head) is exempt from the ex-parte provisions of §554. -Therefore, the agency may supervise prosecutorial staff; initiate a proceeding and participate in decisionmaking; may talk to anyone about facts of the case (EXCEPT the prosecutorial staff, as that would result in the STAFF‘s violation of the section)
e. f.
g.
Final Agency Decisions—what is required? i. Findings of Fact ii. Conclusions of law iii. Explanation of the Decision Armstrong v. Commodity Futures Trading Comm. A was charged with failing to register/various crimes. ALJ found that A had control, and should be liable for the actions of his employees. The agency affirmed, but stated that the findings of fact were ―substantially correct.‖ Ct.: We don‘t know what the findings are—agency said ALJ was ―substantially correct‖ but did not identify what was (partially?) incorrect. How detailed must the findings be? Ct.: Must be sufficiently detailed to reveal the path the agency took. ―A decision by an ALJ that is only ‗substantially correct‘ should be fully correct by the time an agency imprints its seal of approval.‖
ii.
Informal Adjudication—procedural requirements are not specified in APA, except possibly §555 1. To what does §555 apply? a. b. c. The section heading is titled ―Ancillary Matters‖—in order to be ―ancillary‖, something must have already occurred (at least linguistically) HOWEVER, §555(a) states that the section applies as specified by the section. How does one align/reconcile §(b) and §(e)? i. §(b) has 3 sentences regarding appearing before an agency
23
ii. §(e)states that it applies in ―in any agency proceeding‖ 2. §555(b)—governs, among other things, who may appear before the agency in which matters. 3 sentences: a. b. c. A person ―compelled to appear before the agency‖ would seem to govern parties and witnesses subpoenaed in ongoing proceeding ―A party‖ would seem to govern those already involved in a proceeding, or those who will be parties when a proceeding is convened. ―An interested person in any issue in a proceeding and in connection with any agency function‖ seems to apply to any party legitimately addressing the agency in an agency matter.
The letter of §555(b): a. b. c. ―Person Compelled to Appear‖ is entitled to be represented ―Party‖—is entitled to appear in person or by counsel ―Interested Person‖—is entitled to appear ―for the presentation, adjustment, or determination of an issue, request or controversy in a proceeding…or in connection with an agency function.” -Aside—who would be an interested person and not a party? S: Few people. An interested person, following UCC, is probably entitled to be a party. However, an interested person is entitled to appear in connection with any agency function, whereas a party is only entitled to appear in any agency proceeding. *Question becomes, is ―agency proceeding‖ different than ―any agency function‖? -APA defines ―Agency proceeding‖ as rulemaking, adjudication, and licensing. What is left (for ―in connection with any agency function‖)? Attorney Generals manual seems to indicate that ―in connection with any agency function‖ was meant to include the masses of the day-to-day agency functions—this would seem to indicate that ―Agency Proceeding‖ is meant to include only FORMAL ADJUDICATIONS, rulemaking, and licensing. -S: This is a conflict between the language of the APA, which indicates ―agency proceeding‖ includes informal adjudication, and the AG manual, which indicates that ―agency proceeding‖ does not include informal adjudication. d. SO§555(e): ―Prompt notice shall be given of the denial in whole or in part of a written application, petition, or other request of an interested person in connection with any agency proceeding.‖ a. b. Requires notice and an explanation of a denial of request in an agency proceeding—however, the language does not clarify what this agency proceeding is. ―Agency Proceeding‖ either : i. ii. Does not include the mass of administrative routine of an agency (AG manual) Includes all adjudications including the mass of informal adjudications (APA language) (LTV Corp; lower court cases; but cf. Overton Park).
3.
LTV a. Facts: LTV‘s pension fund was insured by the PBGC (a federal corp protecting pension funds). LTV: ―we‘re 2.1 billion short of our future guaranty for our pension fund—we‘re going bankrupt.‖ PBGC: ―We will recognize that you are entitled to the ERISA insurance—you are no longer responsible for your pensions.‖ However, ERISA does not fully insure the pensions, and steelworkers were unhappy. LTV: Now, following ERISA, we‘re doing well enough to make up the difference—―whatever ERISA won‘t cover, we will now cover.‖ PBGC: ―Timeout—the whole point of ERISA is that the workers take a hit—shouldn‘t use ERISA to make its workers whole. You are no longer entitled to ERISA protection AT ALL.‖ This is Notice of denial (§555(e)). LTV refused to comply, and PBGC sues. PBGC is denied enforcement at DC and 2d cir. Ct.: Due process does not apply; therefore, the procedure LTV is entitled to is supplied by the APA. *Vermont Yankee—―a court cannot require more process than is supplied by the APA.‖
b.
24
*But, 2d Cir. had said ―fundamental fairness‖ requires a hearing. *SC overrules, in LTV: ―Fundamental fairness‖ is not required by APA—all APA requires is §555(e)—―entitled to notice of denial‖, and LTV has already received this. c. S: Does this create a conflict/problem under §555(b)? Clearly, LTV is a party. The question is, is this an agency proceeding? It must be, because §555(e) only applies in agency proceedings…but in that case, sentence #2 of §555(b) would indicate that LTV is entitled to appear—this was NOT ADDRESSED by the Court. The state of the law is therefore unclear/unresolved/muddy; however, LTV would seem to indicate that §555(b) does not include informal adjudication.
d.
VI.
Rulemaking in Action A. Procedures that must be used 1. Sugar Cane Growers v. Veneman DAg. paid sugargrowers not to produce sugar—if growers participated in the program, they received sugar from the surplus to sell as if they had grown it themselves. 2 kinds of producers—sugarbeets, to whom subsidy was significant; sugarcane, to whom subsidy was not valuable. Agency changed the rule for the program (in order to encourage more competitive bidding) by a ―Notice of Program Implementation‖ in the Fed. Reg. sues for a failure to provide notice and comment. Gov‘t: This is ―like‖ a gov‘t contract—it does not impose requirements; it merely states what the gov‘t will do if parties apply for/participate in the subsidy program. Def. of Rule: Any statement, prospective in nature, that announces or implements agency policy. *However, a rule that prescribes agency procedure does not require notice and comment procedures. See §553(b)(3)(B). S: Agency screwed up by not characterizing the rule as this. Ct.: This is a rule—needed opportunity for notice and comment. 2. Types of Rules a. Legislative Rules (for this class, ‗Regulations‘) -Have binding substantive effect on parties and agency -Require: formal rulemaking, informal rulemaking, or less-than-informal procedure (for good cause. §553) Procedural Rules -Attach legal force to conduct that involves interaction with the agency. Does not require notice and comment. §553(b)(3)(B).--> must publish this in the federal register Guidance Documents -Do not have binding legal impact—state how the agency plans to act in future proceedings. -2 kinds: I) Statements of General Policy (―we‘re telling you in advance how we‘ll use our discretion to exercise/enforce something that already has legal force‖), and II) Interpretative Rule—(―The statute requires us to do something, but this something is not clear, so we (???)‖)
b.
c.
3.
Procedural a.
4.
Attach legal impacts to conduct that involves ineraction with agency – published in Fed. Reg. and CFR Guidance Documents a. Interpretive Rule and Statement of Policy b. State how agencies plan to act in future proceedings c. Published in Fed Reg if used to affect ―person‖ adversely
25
B. §553 1. Informal Rulemaking a. Idea for rule b. Decision to undertake rulemaking c. Formulation of rulemaking proposed d. Notice of proposed rulemaking (NOPR) e. Comment period f. Agency consideration of comments g. Publication of final rule §553 (b) a. No notice and comment b. Effective immediately ―Notice and Comment‖— a. Agency proposes rule; comments come in; agency reviews comments; makes decision. IN THEORY, this is straightforward—however, the idea to even propose a rule must come from somewhere. The decision to undertake rulemaking is itself complicated. Need: -Idea for Rule -Decision to Undertake Rulemaking -Formulation of Proposal -Notice of Proposed Rulemaking (in Fed. Reg.) -Comment Period -Agency Consideration of Comments -Publication of Final Rule (if adopted) Sources of Idea for Rule i. ii. iii. iv. d. Agency Head or Staff—either part of agency agenda, or to address specific problem agency has experienced. Bottom-up, or top-down. Administration—part of presidential agenda Congress—Part of congressional agenda; constrains agency or forces action. Private Entity—pursuant to petition §553(e)
2.
3.
b.
c.
Developing a Proposed Rule i. ii. iii. Agency Staff—―Team‖ decides if further consideration is warranted, and may develop alternatives During this time, investigations are performed—scientists, economists, regulated parties, etc. Once the Agency gets to the point of deciding to propose a rule, it must: -Engage in a Cost-Benefit Analysis -Impact/Protection on Small Businesses -Analyze the effect on State, Local, & Tribal gov‘ts -Paperwork Reduction Act
*Cannot proceed until this is approved by Office of Management and Budget e. § 552 Agency may not use guidance document to adversly anyone in an agency proceeding unless agency publisher in Fed Registrat, or person has actual notice C. Required Procedures and Determination of Facts in a Rulemaking 1. Vermont Yankee—―A screed against judicial intervention with legislatively set guidelines.‖ Except as required by due process or in exceptional circumstances, a court may not order an agency to engage in procedures in addition to those required by the APA. Rationale
2.
26
a.
b.
Judicial Expertise—Courts can require/examine procedure; courts are not so good at creating policy, making broad substantive determinations entrusted to agencies i. Agency should choose procedure because it has expertise S: Procedures can be used to determine outcomes—when used in this manner, procedure can be essentially political. However, if procedure is used to make agency decision LESS transparent, it creates a problem for political oversight. Thus, if you want to avoid doing something you could ask congress to add more procedure which would delay enforcement. i. Procedures may be intended to burden or facilitate agency regulation
3.
STATUTORY HYBRID PROCEDURES a. Statutory hybrid procedures require some sort of hearing but relax some of the requirements of formal proceedings A common example is requiring cross-examination but allowing agency to conduct it and limit it. Opens up process to judicial control -Compare Harry Bryant (funeral home practices) with Corrosion Proof Fittings (EPA asbestos rule)
b. c.
4.
REVIEW OF TECHNICAL SCIENTIFIC FACTS a. Courts are often unable to understand, let alone resolve, such facts. DC Cir. debate: i. Bazelon approach – ensure full hearing procedures to allow parties to create record including questioning of commenters ii. Leventhal approach – court must immerse itself in the issue to ensure that agency seriously considered all objections and alternatives to its determination [closer to substantive review, rather than securing the ct‘s role as merely requiring procedure]
5.
LTV REVISITED a. b. c. Application of Vermont Yankee principle to adjudication Detailed Facts and Background on LTV Lower court (2d Cir) held that fundamental fairness required that LTV be given the opportunity to state its position LTV HOLDING--The Vermont Yankee principle applies in adjudication as well as rulemaking. (Fundamental fairness is not a compelling argument)
6.
Open Question – if court feels it needs more procedure to evaluate whether the agency decision was arbitrary and capricious, is that an exception?
D. Meaningful Notice of a Proposed Rule and the Rulemaking Record 1. What goes in the Notice of a Proposed Rule? a. Seidenfeld: There are 3 kinds of records: i. Public Record—revealed to the public as part of the notice and comment proceedings—But STILL, it‘s a closed record) ii. Agency Record—information before agency at the time the agency promulgates the rule iii. Judicial Record—information that a court may consult to perform its task of reviewing the rule b. Are there differences between the 3 records? S: No. The notion of a Judicial Record is that it‘s closed—but so is the public record, and also the agency record. S: ―It‘s clear that when the statute was passed Congress did not intend the agency to promulgate informal rules with only a closed record. However, the courts have chipped away, in their desire to create something like a record for review.
c.
27
d.
APA §553 reqs for NOPR: ―General description of subject matter rule will address, or language of the proposed rule.‖ What if the final rule differs from the proposed rule? i. ii. Model State Act (and several states)—new comments are required whenever the final rule differs substantially from proposed rule Federal Law—―Logical outgrowth test‖—[are these different? In theory? In practice?] NRDC v. EPA AK had to certify that log transfer facilities (sending timber down rivers) were meeting CWA req‘s. Proposed rule had a standard for woody debris—each LTF could have a 1 acre facility of up to 4 inches on bottom, but an understanding that 1 acre was not to be strictly enforced. Final rule—no limit on size, with a strict enforcement of the 1 acre standard for required remediation. Issue: Whether the parties could have known the EPA was going to change the rule in such a manner. Ct.: ―When the final rule departs so much from the PR that the parties would be surprised by it, it violates the ‗logical outgrowth‘ req. The agency is required to re-notice the rule.‖ Seidenfeld: This is close to the Model State Act analysis—question becomes, ―Has the rule changed a lot?‖ *Would the industry have anticipated this change? Is the final rule more of a surprise than noticed from the proposed rule? S: Court should not focus on surprise, if it is the natural evolution of the rulemaking process… iii. Seidenfeld‘s favorite case
e.
AMA v. IRS Taxable income for non-profits. AMA sells its journal; if the revenues from selling the journal exceed the cost of production, then non-profits must pay tax on the profits. Additionally, AMA collects revenues from memberships. Rule at issue: How much of the membership funds are attributed to the journal? Rule had a list of 7 factors to determine taxability. AMA did not file comments; after comment period, IRS changed the rule to a 3 factor test (which would cause AMA to pay taxes). Issue: AMA: ―This is a new rule—7 factor squishy test to a 3 factor test. We should be allowed an opportunity to comment on the new rule. Ct.: ―You should have known that there was a chance that the system would be changed. As a commenter, you bear the risk that the rule will change outside the scope of the rule as it is proposed, and you fail to comment at your peril.‖ THE LOGICAL OUTGROWTH TEST IS THE ―RULE‖ FOR DECIDING IF THERE NEEDED TO BE RE-NOTICE/COMMENTS OF AN AGENCY DECISION Nuts and bolts of Logical Outgrowth Test ―The extent to which parties are on notice that the agency might issue the rule as it finally did.‖ Traditionally, did not focus on significance of changes from proposed to final rule Focuses instead on whether the nature of the proposal put persons on notice that the issue was on the table iii. Courts seem to have deviated from traditional logical outgrowth towards ―Substantially different.‖ g. S: Does the logical outgrowth test include the comments on the table? *Under either standard, the test does not consider the offered comments. Can you use the comments AT ALL in finalizing a rule? *Under ―logical outgrowth‖, the comments can provide evidence of what a reasonable person thought the evidence meant? i. ii.
f.
h.
28
2.
Should the commenter or the agency bear the risk of missing the comment? Competing arguments—desire to involve all the commenters (―let everyone have their say‖), v. burden on agency of requiring re-notice for every proffered comment.
a.
3.
If the comment is to be meaningful, there must be an opportunity to comment upon the basis (factual, scientific, etc.) of the proposed rule. However, this is somewhat antithetical to the notion of an agency record that is broader than the public record. a. Nova Scotia Regulation imposed a procedure for smoked fish to minimize the risk of botulism. (who violated rule until this enforcement action was brought) complained that the rule would make ‗whitefish‘ unmarketable. had submitted comments that the rule was not necessary for whitefish. Alleged defects: a) No support for application to whitefish in the record; b) the record was incomplete because the basis for the rule was not subject to comment; c) in the final rule agency did not answer s comment about the applicability of alternative procedures. Ct.: a) & b) When the agency issued the proposed rule, it stated that it relied on scientific studies, but did not make studies available for comment. This is unacceptable [for purpose of this case]— interferes with notion of comment being meaningful. c) The agency did not make a ‗concise general statement‘ (per §553) wrt ‘s suggestion to provide different standards for individual fish to sanction silence wrt vital questions would render a ‗concise general statement‘ less than adequate as a safeguard against arbitrary decision-making. b. Competing objectives—agency expertise v. propriety/arbitrariness/balance of power of allowing a rule based upon undisclosed scientific evidence. Additionally, there must be a basis for judicial review—if the study is not in the record, the court cannot review whether rule was ok or not. S—how is this situation (where agency has information prior to notice) different from where the agency acquires information subsequent to comment? ―The agency claims expertise. To the extent they know they‘re relying on a study, they should cite that. However, if they don‘t know, they don‘t have to cite it. This could lead to grossly extended rulemaking periods.‖ Re: this issue—there is a split in the circuits. Generally, if the agency is relying on a study in order to promulgate the proposed rule, it should be included in the record. The split is whether, when the agency receives new information as a result of the comment, whether the agency has to re-notice the rule. (worry of even more protracted rulemaking and private parties abusing the system v. transparency of process) Suppose the agency imposes the final rule, and Nova Scotia says ―we‘ve done this for 75 years, and haven‘t had a botulism problem. This whole study is flawed.‖ If the issue is whether the study was right—not whether it was properly admitted to the record—what recourse does NS have? Renotice?
c.
d.
e.
f.
*
Not requiring re-notice indicates that there is a distinction between public record and agency record. So, question is, what record is relied upon in the judicial review record? If agency is not required to admit information to agency record that shows its study is suspect, it is almost a corollary that judicial review must be based upon a record broader than the agency record. However, if the Nova Scotia rule is adopted and the three records are the same, new information at judicial review will not be utilized, but the rulemaking process may be delayed indefinitely as the rule is re-noticed.
29
POINT: At some point, parties must be allowed to take issue with the information in the record— the difference in the circuits is whether this occurs via re-notice or at judicial review.
VII.
Circumventing Rulemaking by Adjudication – Using Adjudication to make policy A. Unlike Courts/Legislatures, agencies are authorized to promulgate policy via two avenues—the question is, do they have a choice? B. Policy-Making by Adjudication 1. What are the advantages of rulemaking to implement policy v. adjudication, and vice versa?
30
a.
Rulemaking—can broadly implement a universal, consistent regulation. Greater certainty for regulated entities. Efficiency—don‘t have to continuously re-defend the policy. Prospectivity— Gives Notice! *Given these benefits, why would an agency ever NOT use rulemaking? See infra.
b.
c.
Adjudication—less complex than rulemaking (although, as the number of adjudications increase, this advantage decreases). Keeps agency from getting pigeonholed. Closes/allows loopholes— allows case-by-case decision on ambiguities in code/regs (―we didn‘t know we needed a rule here...‖ Unforeseeable policy needs). Can consider new solutions/problems with different parameters/policy percolation. Quicker in implementing policy than rulemaking. Don‘t allow agencies to make policy by adjudication because they have the alternative of rulmaking whereas courts do not.
2.
Chenery—pyramid structure (holding companies) of utilities was prohibited by ―Public Utility Holding Company Act.‖ Required utilities to re-organize according to a plan supervised by the SEC; chairs of the company bought stock on the free market in the reorganization (i.e., $50 in bonds was converted to stock, and the price will go up to $55). SEC approved the plan for all bonds except those bought by the chairs—―violation of fiduciary duties—cannot get a screaming deal at the expense of your shareholders.‖ Ct (Chenery I)—―does not violate CL fiduciary duty.‖ Remands. On remand, SEC rejects the Board‘s arrangement on policy grounds. Ct (Chenery II)—―if this is based upon the policy the agency wishes to promulgate, it‘s acceptable to prohibit.‖ On remand the agency would still not allow trade while there were plans in front of the agency. *This is a different judicial result for the essentially the same agency result (albeit via different reasoning/justification). **Seidenfeld‘s response to the argument ―I wasn‘t on notice that this was to be the agency result‖—they almost lost the case in the first place—this was a risky gray area. Ct.: Rulemaking is good, but we have to be careful about hamstringing the agency. Blackletter: Agency with rulemaking as well as adjudicatory authority may create new policy by adjudication—it is within the agencies‘ discretion. ―Informed discretion‖ The chenery‘s did not know about the policy until the case was heard. Is this the same rule as before? Chenery I was a quesiton of fiduciary law. Then Chenery II was more about making a policy by the agency. This policy was not contrary to the feduciary law. Thus, it was not completely unexpected by Chenery. The agency cannot be expected to foresee every potential policy concern. If the policy cannot be enforced then people can always find loopholes in the letter of the law. The benefit of rulemaking from adjudication is that there is a real life situation. It is also cheaper and faster. Agency may not foresee the problem. Rulemaking allows for uniformity and does not create ideas for exceptions. Public input allows for better information and policy. ―The Self-Conscious Use of Adjudication for Policy-Making‖—Next Question—what is the limit of this discretion? a. Bell I—Who is entitled to take advantage of NLRA ―permission to unionize?‖ (without this permission, unionizing is illegal—an antitrust act). Under NLRA, ―employees‖ (not managers) could unionize. However, a distinction between classes of managers arose. -Employer: You (buyers) are not entitled to collective bargaining. At issue: whether buyers (classified as managers; have some discretion; however, do not have ability to make fundamental policy) are actually ―employees‖ and can unionize? On judicial review: : ―For 35 years, you have said managers are not employees. In order to reverse this policy, you need to make a rule.‖ Ct.: Chenery says agency can choose adjudication to make policy, when it is writing on a blank slate. Here, there is a longstanding practice of a contrary interpretation.
3.
31
What Bell adds: Although the agency has informed discretion wrt mode of policy-making, the choice of mode of policy-making itself is subject to judicial review for abuse of discretion. The court required Bell to go back and negotiate with the union. -Factors in abuse of discretion: 1. Reliance must be reasonable – there is a long standing clear rule in which there is reliance 2. significant reliance interest - must have had a reason to rely on the law; is there a harm What constitutes reasonable and significant reliance is uncertain. The DC cercuit has place more emphasis on reasonable realiance rather than significant reliance. iii. Reasonable reliance and a significant reliance interest (S: if you find both of these, the agency will be in trouble if it changed policy via adjudication) [Applied to Bell: no reliance interest—requiring collective bargaining doesn‘t hurt the employer, as this result would have occurred had the policy been promulgated by a rule]. Overview: -Discretion ot make policy by adjudication -Chenary II -Bell Aerospace -Retroactive Affects of Agency Changes in Policy -Due process concerns -Wyman-Gordon -Court says that the D doesn‘t have to know for sure that the conduct is prohibited only that it might be prohibited C. Retroactive application of policy (―Might adjudication lead to injustice?‖) 1. Due Process Concerns a. Hypo: agency interprets an ambiguous statute or reg and then changes interpretation i. Line of due process cases says that a party must have fair notice of what is required of it before it can be subject to criminal prosecution or civil penalty *What does this ―fair notice‖ necessitate? S: if there is a sufficient degree of uncertainty whether the conduct might be illegal, due process does not require ―fair notice.‖
b.
Hypo2: Agency changes interpretation or policy, and imposes a penalty retrospectively based on new interpretation or policy. i. Epilepsy Foundation—―when there is ‗substitution of new law for old law that was reasonably clear‘ the new rule may justifiably be given prospective only effect.‖ [BUT, retroactive effect is appropriate for ‗new applications of existing law, clarifications, & additions‘] Reasonable Reliance: Was the rule clear at the time the employer acted? Compare US v. Chrysler: agency may not find a person in violation of a reg based on a new interpretation unless the person was on ‗fair notice‘ of the interpretation. * ―Fair notice of the interpretation‖ is narrower—limits what agency can do [Chris: WHY? What is the distinction here???)
ii.
2.
What if order only involved a retrospective penalty? a. b. APA seems to say that announcement of such a policy is a rule (which courts cannot make) Epilepsy—―we cannot order the employer to pay backpay—this would be retroactive application of policy.‖ HOWEVER, if it cannot be applied retroactively, it must be applied prospectively ONLY. This is the realm of rulemaking, which courts do not have the authority to do. Wyman Gordon case suggests that agency cannot make a new policy in an adjudication and apply it only prospectively—this ceases to be an order, and becomes a rulemaking, and therefore should have been done according to APA guidelines.
c.
32
d. e.
*Maybe the real issue is, ―Who can enforce a violation of this doctrine?‖ The only person who can take advantage of the W-G rule is the one who got screwed by not having the policy applied. What does this do to Epilepsy? E: must apply prospectively only; contra W-G: cannot apply prospectively only. Aside--DC Circuit doctrine allowing prospective application of changed policy seems at odds with Wyman Gordon.
3.
What happens when Rulemaking causes a retroactive application of policy? a. b. c. APA def. of rule: ―decision that is prospective which announces or implements policy.‖ Scalia: a rule cannot be applied retrospectively Bowen: (same result as Scalia, but different analysis)—Agency: ―this is a correction of an old rule that was applied incorrectly. An adjustment—everyone was on notice.‖ Ct.: There is a presumption against retroactive rulemaking (contra Scalia—rulemaking cannot be retroactive, ipso facto); statutory analysis of whether Congress intended to allow retroactive rulemaking. Ct. finds no such intent—orders case by case adjudication. NONETHELESS, a rule with only prospective application may still have some retroactive effect by upsetting reliance interests S‘s Evaluation of Bowen: •Usual distinction between rules and adjudication based on reliance interest – entity must know the law when acting •Bowen – hospitals had no reliance interest because knew what the agency considered to be the correct rule •More generally, distinction between retroactive and prospective does not correlate perfectly with greater and lesser impact on reliance interests
d.
e.
D. Rulemaking to Eliminate the Need for Fact-Finding Hearings 1. Context: An agency is authorized to make a decision (e.g., issue a license) only after a formal hearing -The agency issues a rule that eliminates the inquiry into certain factual issues, and may eliminate the hearing altogether (e.g., FCC limits the number of broadcast licenses an entity may own. An entity with that many licenses seeks an additional one. FCC dismisses the application without a hearing!) *In order to do (x), you need a hearing…but agency can restrict fact-finding by making a rule!! Yehman v. FAA—FAA rule req‘s all commercial pilots to be under age of 60 (for safety purposes). FAA issues licenses under a particularized adjudicatory proceeding. Issue is not whether FAA can issue this rule, but rather, when can the agency grant an exception? Ct.: Agency practice stated that the pilots must proffer a compelling test to overcome the ‗no exceptions‘ rule, even though exceptions were permitted by statuteagency was justified in rejecting pilots‘ proposal. 3. Am. Airlines v. CAB—Statute req‘d all airlines get approval for the rates they charged for carrying cargo/passengers. Rates were dependent upon nature of the transport, but were applicable to all passengers and cargo based upon its destination. Rates were subject to agency approval. Conditions on licensees: e.g., if you had a license, you agreed to charge only what the license approved. Conditions were det‘d by individualized hearings. Any change in the license was to be det‘d by formal adjudicatory hearings. -More Background: CAB passed a rule stating that only cargo planes are allowed to use ―block space rates‖—rents space on plane at a discount, but guarantees payment, even if nothing is shipped. CARRIERS CAN NO LONGER CHARGE BASED UPON THE NATURE OF THE SHIPPED ITEM. (rule only applied to solely freight carriers—not ones that carry passengers)—passenger carriers wanted ability to do this, too. This is a change to licenseholders‘ licenses, and it was not done by adjudication (as statute would seem to require), but by rulemaking. Ct.: agency may issue rules that eliminate the need for a hearing before making a decision that, by statutory mandate, must be made after a formal hearing. An agency can issue these rules EVEN when
2.
33
they alter the rights attached to existing licenses that, by statute, cannot be altered except after formal rulemaking. Rationale: agency is implementing general policy that cuts across large classes of carriers. Rulemaking, not adjudication, is best suited for these decisions. -License holders are protected by a) fact that they will not be alone in bearing brunt of regulation (rule effects broad class of carriers), and b) judicial review to ensure classifications and restrictions on certificates are ok. So, the standard for changing a license by rulemakings is: Public interest, convenience, and necessity. Dissent: if a license is changed, a hearing is required by the statute. This is changing existing legal rights by rulemaking, not changing future legal rights. This is singling out carriers within the class. The new rule of law the majority implements states that so long as the rule effects a broad group (compare the whole class) and doesn‘t single out a single person, it‘s ok. Per Seidenfeld: ―Well reasoned opinion.‖ If agency changed the license of a single carrier, adjudication would be req‘d. When it cuts across a broad class of individuals, the protection is political—many others would be similarly disadvantaged, and you can take this to Congress. 4. SSA disability determinations-a. b. SSA resolves 1.5 million claims for disability annually; 600,000 go before an ALJ. ALJ is criticized for inconsistency of decisions, high reversal rates, slow speed, etc. Grid rule is implemented to overcome these deficiencies. Created categories, predetermined to decide whether individual could perform in the national economy. For those who clearly fell within the categories of the grid, no hearing was needed. Heckler v. Campbell—(SSA grid)—agency may eliminate factual inquiries from hearings by rule. Grid rule improves a) consistency, b) responsiveness to politically accountable head, and c) efficiency and timeliness of hearings. Rulemaking as factfinding!
c.
5.
Evaluation of Heckler and Cab—did the rules in these 2 cases play the same role in eliminating hearings? Is there a distinction between rules that reflect general factual conclusions, and those that reflect policy choices by the agency? Both of these cases determined facts by rules which defined broad classes…again, inquiry is: Public interest, necessity, convenience. *In the SSA, it is easier to apply this inquiry to the facts—SSA was mandated to make a factual inquiry; it was not asked to determine the standard, whereas CAB defined a new licensing standard. In Heckler, agency is not defining a standard, as in CAB—it is defining facts by a rule.
6.
WNCN Listeners Guild—―an agency may adopt a rule (even one that does not perfectly correlate with statutory criteria) without providing an escape clause or waiver provision.‖ -S—unlike legislation, agency rules often reserve an ―out‖ or an escape clause? Why? Notion of prosecutorial discretion—if there wasn‘t a discretionary provision, there might be unjust/inequitable application…similar to, i.e., a prosecutor not bringing a case due to notions of fairness. -BUT—sometimes agencies may not reserve this escape clause (see WNCN). -WNCN v. Heckler—should rule of WNCN (i.e., no escape valve needed) apply to rules like the grid rule? In SSA context, there is a provision: ―if party has a unique situation, they are free to ask for consideration as to whether to apply grid.‖ Under WNCN, could the agency not include this provision? How far does this go?
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VIII.
Agency Issuance of Guidance Documents A. Under the APA, Publication Rules are 1) Interpretative rules, and 2) General Statements of Agency Policy. Do not require n&c procedure. 1. §552—―Anytime an agency issues a rule, it shall publish the rule in the Fed. Reg. If it isn‘t published, it may not be used against an individual unless that individual has actual notice.‖ S: He‘s not sure what happens when the rule isn‘t published. [so what??]
B. What do guidance doc‘s look like? 1. AK hunting guides—fly folks into the brush. Are these commercial pilots? The guides would like to know…write the head of the FAA regional license. FAA answers ―No—unless there is money paid specifically for the flight itself, you are not a commercial pilot.‖ *Is this a rule? YES—prospective in nature, announcing (interpreting) agency policy. 2. Hypo2—EPA field inspectors; given a manual on what to look for. Guidance document? Yes— prospective (―Inspectors, this is what to look for‖)—a gen. statement of policy.
C. What are the Pros/Cons of guidance documents? 1. Pros -Provide Notice of what agency is likely to do -Gives binding guidance to low-level officials—Consistency -Quick & Efficient 2. Cons -No opportunity for public to respond/contradict that statement -Minimizes public record -Upsets reliance interest (more than w/notice & comment; less than w/ adjudication). D. APA Provisions for Guidance Documents 1. Exempt from notice and comment; §552 requires publication in Fed. Reg.; if not published, it cannot be used against a regulated entity. Sole Procedural Requirement.
36
2.
Why have these? Why exempt them from notice and comment? Do not have the force of law— don‘t give authority other than what agency could already do—a clarification. Other justification—it could do this (i.e., adopt an interpretation) in an adjudication.
E. Interpretive rules (remember, they‘re not ―technically‖ binding until adjudication—merely a heads-up; however see AK air pilots) 1. 4 issues: a. b. c. d. 2. How is a legislative rule distinguished from a guidance document? What impact does an interpretive rule have? Timing of judicial review (if the guidance document can be reviewed right away, it reduces the risk of prosecution, or alternately, the cost of compliance) What deference do they get upon review?
Distinguishing an Interpretive rule from legislative rule a. b. Old Way—would agency have authority to make this in an adjudication? If so, N&C is not needed. Current way (in vogue in DC Cir. and 7th Cir)—analysis: does language of statute ―fairly encompass‖ the interpretation? S: ―what does ‗fairly encompass‘ mean?‖ Usually, leads to whether there is ―fair notice‖ (1. If you read statute, would you know that you might not be able to engage in that conduct, or 2. requirement that agency can only tell you what you should have known (narrower; S: if this is the test, why even have an interpretive rule?)) S: Both of these focus on substance, to determine a procedural point—this jumps the gun. [Chris: but when can substance and procedure ever be totally divorced?] Guernsey v. Shalala—Hospitals protested agency calculation of Medicare reimbursements, due to contravention of GAAP. ―This violates a background norm.‖ Ct.: This is an interpretive rule to advise the public of the agency‘s construction of its statute and regs. Besides, the rule does not say GAAP applies.
c. d.
3. 4.
*Isn‘t this a rejection of ―Fair Notice‖? If ―fair notice‖ were the test, wouldn‘t a person reading the statute be surprised that a background norm didn‘t apply? Tiger Hypo What deference do agencies get? -Ct‘s are very deferential to agency interpretations of its own rules. See Guernsey. As one commentator described, this is a commission for the Congress to enact ―mush‖ and for the agency in turn to ―promulgate mush,‖ knowing its interpretation will be upheld so long as the interpretation the agency eventually gives the rule is not ―plainly erroneous?‖ BUT, desire to avoid regulatory vagueness is responsible for DC Cir‘s ―Fair Notice‖ *Again, reflects different priorities wrt an essential tension—fairness to regulated party v. desire for effective, efficient regulators
5. a. b.
What use are interpretive rules? Suppose that rule is determined (procedurally) to be an interpretive rule. You refuse to comply. What outcome? Explicit in §552(a)(2)—―interpretive rules may be used as precedent.‖ Interpretation is not what is violated; what is violated is the regulation, which has the force and effect of law. -So, what good is an interpretive rule? 1) if party‘s argument is one that interpretive rule has already addressed (No new issues), ALJ HAS to follow—his job is not to re-interpret what agency has already re-interpreted; 2) ALJ can say, ―you violated the regulation, and the agency already responded to your argument‖ citing the interpretive rule as precedent. *What if the factual scenario differs? (e.g., Our tigers are incapable of jumping 8 feet— different conditions from the agency study) If only an interpretive rule, the party is free to offer this information and the ALJ can decide against the agency. **Agency must explain why this does not hold sway (rationale approach)
37
***Note: if agency goes after [game park for having inadequate fences] without an interpretive rule, it cannot be fined…however, if interpretive rule provides a guideline, it may have provided ‗reasonable notice‘—agency may now subject party to fines. c. May an agency, in adjudication, readopt an interpretation that a court previously reversed when part of an interpretive rule because the interpretive rule was procedurally deficient? Probably— would argue that old interpretation provided reasonable notice. ―Much ado about nothing‖ problem—agency issues a guidance document to its employees— ―here‘s what to look for when looking for illegal tiger enclosures.‖ Published in CFR, but Ct holds that it is not ‗fairly encompassed‘ in statutory language, and therefore should have been issued by notice and comment (merely a procedural defect). Agency does not correct defect, but nonetheless issues a citation to a gamepark with an ‗insufficient‘ fence. Gamepark: Your rule has already been struck down. Answer: Bell indicates that the agency can do this by adjudication— this is an adjudication. It does not matter that the agency already had this rejected on procedural grounds. *What‘s the point of striking down interpretations on procedural grounds if adjudication can implement the same (rejected) policy? At best, might gain a minimal ability to defend upon 2d Bell Aerospace ground. F. Statements of Policy 1. Policy Statements a. Statements informing public or agency staff of the policy that the agency intends to apply in the future. They don‘t have independent force of law. b. PG&E – if the agency had the authority to apply the policy in adjudications it is not a legislative rule. c. If the statemnet definitively states what the agency intended to do in the future adjudications it is a legislative rule. d. If agency labels a rule a guidance document, or if the agency does not use N&C rulemaking and does not infolke another exception then the rule is a guidance document. But, an interested person can challenge the guidance document immediately on substantive grounds in court. 2. 3. 4. As with interpretive rules, S.o.P. indicate how an agency intends to exercise its legally granted discretion. (Unlike interpretive rules, S.o.P. do not interpret existing positive law) Procedure: ―Less than informal‖ againmust be published in fed. reg. before it is used against a party; no notice and comment needed. Issues (again): a. b. c. d. 5. When does an agency statement of future effect announcing policy require notice and comment proceedings? What is the impact of a policy statement? When is such a statement ripe for judicial review? What are the standards of review for such statements?
6.
Legislative rule v. Statement of Policy a. GE v. EPA—EPA had a rule regarding cleanup of PCBs (here‘s what to do; if you don‘t like this, you can use an alternative method), of which GE manufactured. Q.: What kinds of alternative methods are acceptable. Guidance Document: Look at cancer and non-cancer risks. GE: This isn‘t an alternative—this is binding, and is therefore a legislative rule. Issue: Should EPA have utilized notice and comment before issuing this guidance document? I#1: is the Guidance Document binding? [Aside: Binding v. Exceptions: a rule can be binding, and still allow exceptions; the agency has the discretion whether or not to grant the exception, and the seeker has the burden of proving the rule shouldn‘t apply to him] S: If the court will let the agency say ―You violated the rule, therefore you‘re in violation,‖ it is binding.
b.
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c.
I#2: Is the guidance document pragmatically binding? Ct.: Look at the language—if written in language that indicates agency will act in accordance with statement, it is a legislative rule. Does it look like you’ve made up your mind? [S: this is the DC Cir; he doesn‘t think it fits w/ Shalala] S: Suppose Agency publishes this in the Fed. Reg. and labels it a guidance document—is this not sufficient to indicate that the doc. is not binding? For it to be binding, notice and comment is req‘d. Alternative Standard (not usually used)—If the agency has the authority to exercise the discretion in particular cases as described in the statement, then the rule is a policy statement. Same standard as interpretive rule. (Focuses on substance, rather than procedure) Problem—what if regulated parties follow the guidance document, even though they know it‘s not technically binding? This is the pragmatically binding problem—worry that agency will abuse this, and circumvent notice and comment procedure. S: They could do this anyway! Would you rather them not issue a rule, and not know what they‘re thinking? Shouldn’t care about whether it’s binding, but whether the agency could do this anyway by adjudication. 6. Impact of Statement of Policy a. b. c. 7. No independent legal force Does the statement have any legal impact as: precedent? Deference on review? Notice of change in agency policy?
d.
e.
f.
S‘s critique of Current Doctrine Problems: a. b. c. d. e. Discourages agencies from issuing guidance documents Deprives regulated entities of notice of agency intentions Deprives parties of safe harbors—regulated entities can‘t say ―can‘t fine us, we‘re doing what you told us.‖ Forfeits a mechanism to ensure consistent exercises of discretion in day-to-day ops. Doesn‘t change agency‘s ability to adopt the expressed policy via adjudication. (S: after the policy statement is rejected as an improperly promulgated rule, EPA can still use this precise argument in the order)
8.
S‘s Proposed Alternative a. A guidance document is not a legislative rule when it is promulgated without the agency going through notice and comment rulemaking, AND the agency does not identify another exception (i.e., good cause, or that rule is procedural). Sometimes, within a N&C rulemaking, there is accompanying interpretation (agency: ―this is what we mean right now…but it‘s subject to change‖); S would interpret this as legislative history and not a binding legislative rule. Impact of document is same as if the statement was issued as part of a prior adjudication— provides notice; provides precedent (which parties can argue does not apply to them) Key point: Guidance document will be reviewable substantively upon publication—the standard will be, ―does agency have authority to issue this per adjudication?‖ If the answer is yes, then the rule will be upheld Standard of review—―hard look‖ variant on arbitrary and capricious.
b.
c. d.
e. 9.
Advantages of S‘s approach: a. b. Do not tie up agency with procedural rules regarding guidance documents; encourage agency to issue GD Would this lead to abuse? S: Under the current approach, even if a court strikes down the GD on procedural grounds, the agency can STILL implement the substance in an adjudication… Additionally, allows for judicial review of the substance before the agency applies the case…
c.
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IX.
Judicial Review (―The core of administrative law…‖) 50% OF THE EXAM!!!!! A. Intro: 1. 2. 3. Discussion supra encompassed review of compliance with procedural rules. Judicial review is governed by 5 USC §§701-06. §706 provides the bases for judicial review—6 bases: a) beyond statutory right/authority [legal claim]; b) failure to follow procedure; c) exercised discretion in an arbitrary or capricious manner; d) constitutionality; e) supported by the record [was there a factual basis?]; f) did the agency fail to provide a basis of review in instances where court will review de novo? In sum, this amounts to four parts: a) violate substantive legal req‘s? b) violate procedural req‘s? c) adequate support by facts? d) arbitrary or capriciousness?
4.
B. Why have judicial review? Why isn‘t politics a sufficient check? 1. 2. 3. 4. Some cases are small enough to fail to register on the political radar screen…inertia of actual political bodies…ALSO, political influence from key individuals in Congress or administration may be improper. Keep agency within legal authority [This justifies review of facts at SOME level, or else agency could simply find whatever facts necessary to reach predetermined outcome]. Ensure that agencies act carefully [S: Politicians don‘t usually consider ―care‖, but rather, bottom lines…we may like our agencies to act carefully, and the best way to ensure this may be review] Provide Legitimacy—review gives force to agency decisions and provides legitimacy in the eye of the (government dis-trusting) public; police against manipulation of process against any stakeholder…
C. Standards of Review (contra bases of review, supra). (This is old history; aka, this is background material). *S: This discussion is about the traditional understanding of these standards of review. 1. De Novo Review—questions of law; appellate court does not pay any heed to lower court decisions. Anew. -Rarely comes up in review of administrative decisions today. -Reviewing court decides the issue as if the agency had never done so. 2. Clearly Erroneous—reviewing court is reviewing findings of fact made by a judge. -Deferential, but only slightly deferential. -Traditionally (not currently in ad law), reviewing court examines the facts; makes it‘s own determination, then appraises its certitude in its determinations; in doing so, it judges if the lower court‘s decision was a substantial leap from its own judgment. -Not explicitly invoked by §706; but is the standard under some statutorily provided review. 3. Substantial Evidence Test—reviewing court is reviewing findings of fact made by the jury -More deferential than clearly erroneous standard; rather than top-down review (per agency), it is bottom up; however, it also judges ―reasonableness.‖ -Governs review of fact finding for all decisions in which the agency is statutorily or constitutionally required to make by formal adjudication. -Traditionally (but not currently in ad law), court will cull record and compare the record to the agency decision. If it cannot find sufficient support in the record to convince a reasonable person of the agency‘s findings, it will reverse… -S: Although it‘s traditionally more deferential than clearly erroneous, it‘s hard to find a situation where one will result in a reversal and the other will not.
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4.
Arbitrary and Capricious review—(Catch-all; applies to any agency action other than those subject to a specified standard; also, this is the same as a Rational Basis review). Traditionally, review was comparable to that of a court reviewing a (non-suspect class) statute for constitutionality—―is there a legitimate relationship between the goals of the agency and the action, in light of the record?‖; ―will this pass the laugh test at the Kennedy School of Government?‖
D. Universal Camera v. NLRB 1. Factual Background: Employee was fired—if it‘s b/c he called the personnel manager a drunk, his firing is justified; if he was fired b/c he was a union organizer, it‘s an unfair labor practice. Factual issue: Why was he fired? Procedural Posture: ALJ believes manager, and finds that firing is not an unfair labor practice. Board reverses ALJ—―he was fired due to initiating union activities. Question 1: What kind of review is being sought? a. Depends upon whether question is one of fact or one of law—how does one define/separate the two? ―Anti-Union Animus‖ has elements of law, but in this case, no one is questioning this definition—mostly a question of fact. So, a question of factbeing reviewed for substantial evidence.
2. 3.
b. 4.
When does the substantial evidence test apply, and what does it mean? a. Review for substantial evidence after §556-§557 proceedings—formal proceedings! *If this had been an informal proceeding, what standard would apply? Arbitrary & Capricious. b. What is the basic (old) ―Substantial Evidence‖ standard? i. ii. Learned Hand: ―The kind of evidence on which responsible persons are accustomed to rely in serious affairs.‖ ―Such relevant evidence as a reasonable mind might accept as adequate support for a conclusion.‖
c.
Court: the APA changed the Substantial Evidence standard. i. ii. ―The determinations are to be based upon the whole record‖ Ct.: This means that you can‘t ignore evidence that undercuts the agency…must also consider the effect/weight of countervailing evidence.
d. e.
f.
PROBLEM: Lower court did not consider the ALJ‘s finding. ―Whole record‖ is broader than just the evidentiary record—it includes the ALJ finding. S: How do you take into account what the hearing officer said when the agency has the entire authority to decide the case? Lower Ct.: We have no principled manner of giving the ALJ finding weight while still allowing the agency to have full decision-making authority. Un. Camera: ―You must take this in to account.‖ So, the question becomes, how do you take the ALJ finding in to account? How should the substantial evidence be applied in this scenario? *J. Frankfurter: ―One cannot express these differences in words/formulae. Congress expressed a mood to be more exacting & tougher on the agency; therefore, the reviewing court should reflect this ‗tougher mood‘ (!).‖ [Upon remand, the 2d Cir. expressed that it was still at a loss—it couldn‘t find a middle ground between de novo review, and the deference it previously gave to the agency.]
g.
Impact of ALJ Findings: APA states that the agency shall have ―all the powers which it would have‖ had the agency, rather than the ALJ, made the initial decision. *APA further states, however, that the ALJ decision is part of the record on review. *Un. Cam—an agency must take into account the ALJ det. when making its final findings of fact.
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-On Remand—2d Cir. draws a distinction between primary and secondary factual inferences. So, the agency must accept ALJs findings as to primary facts—primary facts are those where there is a direct statement (i.e., This is what happened—―it rained that day‖), but may make it‘s own secondary factual inferences (i.e., b/c it rained, got wet). h. How have other courts resolved the Un.Cam. conundrum? i. Pensaquitos Village—distinction between testimonial and policy-based inferences. ―Agency must defer to the ALJ on matters of credibility (especially demeanor), unless there is some objective basis indicating the credibility determination is unreasonable—Agency can reverse ALJ if credibility det. is clearly erroneous.‖ S: Clearly erroneous standard works it‘s way in through the back door. Dissent: Credibility/demeanor is unreliable. We should not be overconfident—dissent would defer to the agency overturning ALJ so long as there is an explanation (agency must say WHY it came out in a different manner than the ALJ), and not require a clearly erroneous standard.
ii.
i. 5.
Bottom line—this is squishy.
Allentown Mack Sales v. NLRB (a, is deference dead?, and b, if not using usual meaning of language, state it up front.) Have a company that was bought out by its management, and downsized it. At old company, there was a union—if (as the NLRB ruled) it‘s the ‗same‘ company, the same union would stay in place. did not want to deal with union, and had 3 options: a) hold a formal NLRB-administered poll, b) hold an internal poll of employees, or c) stop bargaining with union. can do (b) and (c) only if it has a good faith, reasonable doubt. Courts have not read it as changing the standard. Pre-Allentown standard of reasonable that takes into account agency knowledge and experience. Allentown says lay standard of reasonable finding. a. b. What is being reviewed? Finding of fact—whether co. had a good faith, reasonable doubt. This is a formal proceeding, therefore, the agency is to be affirmed if its decision is supported by substantial evidence. S Ct. reviews NLRB‘s interpretation of ―good faith, reasonable doubt‖ as ―substantial uncertainty.‖ ii. Substantial Evidence—every employee the managers talked to disavowed the union. S: These statements were all in the context of job interviews, which the NLRB has found unreliable. Additionally, they relied on statements made by employees about other employees; this is contra to a long line of agency precedent. S: Why have agencies then? Who is the court to come in and say that it knows how to better evaluate the evidence? S: How is this different from de novo review. iii. S: the ―good faith, reasonable doubt,‖ standard was itself promulgated by adjudication. iv. S: The question now is how far this will go…why did the court apply the test itself rather than merely state what the test is? The court could have defined ―good faith reasonable doubt,‖ then remanded. Instead, it applied the standard itself. v. This means that if you have a client that wants review, you would argue that Allentown changed the standard. If you‘re the agency, you‘d say the standard is the same, and it was a tough case. Open Question—whether Allentown signals a less deferential standard for substantial evidence. Second part of the opinion—: ―we‘ve always interpreted reasonable doubt as ‗reason for disbelief‘, not ‗substantial uncertainty.‘‖ Ct.: Improper—should be interpreted as ―uncertainty.‖ See dictionary. It‘s bad policy to have NLRB adopt a term, and then use it via an alternate definition. If you‘re going to use an alternate definition, it must be stated clearly (shouldn‘t make people wade through the mush/interpretation to figure out what standard applies). i. *S: This reason is likely why the court took the case. However, in order to get there, it may have wrecked ―substantial evidence.‖
c.
E. What do you do with something OUTSIDE the formal §§ 556-57 framework? What standard applies in N&C rulemaking? Arbitrary & Capricious—the fallback provision. See §706(2)(A).
42
1. a.
What is the difference between this and the ―substantial evidence‖ test? Traditionally, Arbitrary & Capricious was less demanding (so long as you don‘t get laughed at, you are deferred to) ADPSO v. Board of Gov‘s of Fed. Reserve (the leading case—DC Cir.)—bank holding companies were required to get prior reg. approval before engaging in nonbanking activities. Ct.: The standard under the ‗arbitrary and capricious‘ test for review of facts is the same as the standard under the ‗substantial evidence‘ test. (Difference is the open v. closed record.) i. Why? How are §706(2)(A) and (E), which clearly have different language, the same? Nature of the Record! *Scalia: How can there be? Nothing fits between the two—how can a decision that is not supported by substantial evidence not be arbitrary and capricious? (S (countering): WHY did Congress include 2 different standard if they didn‘t mean it?) (AS: (E) applies to a closed record, and this standard has traditionally applied as such. When you don‘t have a closed record (i.e., rulemaking), you can‘t apply the closed-record standard. In each case, what is required is an agency explanation) -S: ―I don‘t know if I buy this distinction, but it is true that A&C was traditionally applied to legislative matters, whereas Substantial Evidence was traditionally applied to matters that were judicial in nature.‖ -S: Scalia has other problems: Congress USED substantial evidence with respect to informal rulemaking in other statutes—indicates that Congress intended difference in the standard. AS: They didn‘t know what they were doing…(!) c. 5th, 11th, & 9th Circuits interpret the Substantial Evidence test as tougher than A&C (contra ADPSO)— however, they don‘t say exactly HOW it‘s tougher. (think Frankfurter: ―it‘s a mood‖ v. Scalia: ―if you can‘t articulate a difference, then there is no difference‖). S: if there is a difference, it is that it will accept larger leaps in logic under A&C—but it cannot precisely articulate what this difference is. Reviewing Facts which cannot be proven (i.e., rulemaking) i. ―Trans-scientific facts‖—either pragmatically or technically cannot be proven; predictive of future event; agency can only explain WHY it acted, but can‘t prove that it was correct in so acting. Current trend (per S: reflecting a distrust of agencies) to require scientifically acceptable data—Data Quality Act and agency action.
b.
d.
ii.
e.
Nature of the rulemaking record (S: tension w/DQA): Congress intended that the record be open to include matters beyond those before the public This creates a tension with meaningful opportunity for comment, as there may be no chance to verify sources on which agency relies to draw factual conclusions. iii. Policy choice of making record that is before the public, or allowing the record for judicial review to include info not before the agency. i. ii.
F. 1.
Applying Facts to law Historical basis a. Hearst v. NLRB— Question of whether ‗newsboys‘ were employees for purpose of National Labor Relation act. If they were, they entitled to unionize. (S: these weren‘t schoolkids—grown men, using their sales to support the family). : These are independent contractors, not employees, and not entitled to unionize. ―Must look to CL definition of employee.‖
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Ct.: 1) Employees cannot be a CL definition, b/c that would result in differing administration of the statute in different states—it must be a broader term than a mere CL def. of employee. I #2—Was the agency position (that the newsboys were employees) justified? A mixed question of fact and law—whether the newsboys were employees was a question of fact, but by doing so, it is saying something about what the statute means. An application of law to the facts. Ct.: ―The nature of this inquiry—who is an employee in this context—is best served by a case-by-case basis. This is best left to the agencies, to det. if they fall within the bounds of the statute.‖ (S: This makes it start to sound like a legal issue.) Ct.: As long as there is warrant in the record and a reasonable basis in law, the agency decision will be upheld. (REMEMBER, this is a historical building-block case.) b. Import Seidenfeld slide—indicating that deference is entitled to agency decisions regarding the boundary of law and facts—sometimes, the hair is split fine… Packard Motor Car—question of whether foremen on an automobile assembly line are employees under NLRA. Clearly, at CL, foremen would be employees. BUT, for the purposes of NLRA, are these employees (v. management) and entitled to unionize? Boardemployees. Ct.: ―A naked question of law,‖ and the board got it right—affirms b/c it‘s correct, not b/c it‘s entitled to deference. S: Why is this ―a naked question of law‖ when Hearst is not? What is the difference? When are you ―applying law to facts‖ and when is it a ―naked question of law?‖ *If you merely look at the cases you probably CAN‘T find a difference. However, difference may be whether statute indicates a Congressional intent—―so important‖ that Congress must have had a result in mind, and that therefore the court is broadly interpreting a generally applicable law. (S: HOW do you det. when there was Congressional Intent? Ct. implies a ―constructive‖ Congressional intent when it so chooses…) d. Skidmore v. Swift—people work at meatpacking plant as firefighters; want overtime for time they spent waiting around. Court treated the issue as one of fact, resolved by appropriate findings of the trial court. NONETHELESS, the opinions of the Administrator (stating that waiting time is employment time), as expressed in an interpretive bulletin (manual) and informal rulings were entitled to due respect. Ct. reverses the Trial Ct. for failing to show due respect. Dissent: S: This is an application of law to fact, BUT this was a private action—how is it that the court cannot make the decision? It‘s not an AdLaw case. J. Jackson: NONETHELESS, the administrator is the expert—his opinion should be entitled to respect. ―The weight of such a judgment in a particular case will depend upon the thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier & later pronouncements, and all those factors which give it power to persuade.‖ S: So now, this implements a 3d kind of standard—Skidmore deference. i. Skidmore Principle and Interpretation -Issue in Skidmore mostly one of law, or at least, applying law, than fact. No one debated the conditions of employment—only their significance re: overtime pay.
c.
ii.
Resultsome courts deferred to agency interpretations, when there is a long history of a legal interpretation.
e.
So, for mixed questions: -―Application of Law to Facts‖—Hearst—agency is entitled to deference -―Naked questions of law‖—2 standards: i. De Novo—Packard ii. Skidmore deference
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G. Review for exercises of Agency Discretion— 1. ―Arbitrary & Capricious‖--§706 (discretion does not fall into the other categories; the default is ‗arbitrary & capricious‘) S: Agency findings of fact, which are not required by an agency proceeding; OR for trial de novo; OR for any discretionary policy decision ―arbitrary & capricious‖ standard. Overton v. Volpe (leading case)—Congress passed a statute with the aim to protect parkland from use by building roads. ―If road is fed. financed, then b/f the road is built, it must be reviewed by Sec. Of Trans., and the Sec. must det. that the proposed location is the best location for the road.‖ No hearing req‘d. In Memphis, Sec. planned to route I-40 through a park. a. b. c. d. Which questions are reviewable and which are excepted from review? Must an agency provide reasons for its decision? What is the record the court is to use on review? Operationally, how should courts go abour applying arbatrary and capricious standard?
2.
3.
Issues raised: a) Secretary merely signed proposal—Sec. did not make findings and did not explain his decision in light of the federal statutes. Ct.: No—there is no req. in the statute or the APA to make the Sec. render findings. (HOWEVER, keep reading… ) b) Secretary did not even make the decision, as req‘d by statute. Ct.: General rule that you can‘t challenge the decision-makers mental processes—presumption of regularity. HOWEVER, keep reading… c) EVEN if Sec. did make the decision, it was arbitrary and capricious Ct.: must look at whatever was in front of the Secretary—the whole record. If he gives no reasons at all, then there will be a trial to det. what Sec. considered at the time. (Effectively, an exception to the presumption of regularity—―if there is no record for the decision, then we will probe to find the real reason for the decision.‖) This has led to agency decision makers providing (some?) reasons— avoid trials! d) arg.: ―Act committed to agency discretion, and therefore, not reviewable at all.‖ [S: as long as there is law to apply, then there is some constraint to discretion] 4. Black letter result of OvertonReasoned decision-making. Presumption of regularity req‘s the ct. to evaluate the decision based upon the reasons given (presumed to be actual reasons). However, if no reasons are given, the decision-maker‘s mental processes may be probed. How far does the presumption go? *Nuclear plant straddling a fault in CA; compensation (shock absorbers) was compromised by a engineering screw-up. Nonetheless, the plant was approved by NRC—allegation that the real reason for approval (economic pressure) was not the reason cited. DCCir: the fact that one commissioner has indicated there is a contrary reason for the decision is not sufficient; this would give any dissenting commissioner to much power. S: Under this standard, the only way to rebut the presumption of regularity is through direct evidence— i.e., a copy of a check for a bribe. 6. a. b. The record on review— The record for judicial review is what was before the agency at the time it made its decision Exceptions:
5.
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i. ii.
New factual developments [S: PSC makes a rate determination; subsequently, price of oil drops dramatically] Agencies raising an issue or fact after interested parties have had a chance to comment on it. [S: if a petitioner could have foreseen an objection and did not act upon it, they‘re going to lose—cannot ―sandbag‖ agency, and add to record on judicial review. However, if agency does something new, and the commenters did not have a chance to respond, the ct. will allow addition to the record.]
7. a. b. c.
Post-Hoc Rationalization Overton Park—Ct. must consider official decision by agency, and hence, must ignore subsequent facts unless they were b/f the agency when it acted. Particularlycourts cannot credit post-hoc rationalization HOWEVER, courts are moving away from this standard of refusal to credit post-hoc rationalization. Some judges will evaluate such reasoning if there are reliable indications that the rationalization was actually studied and a deliberate basis for agency decision. Overton‘s Operational standard—what should the courts require for ―reasoned decisionmaking‖? a. Reasons should be based on relevant factors (as det‘d by statute) LTV revisited—―a reviewing court shall not require the agency to take into account policies other than those that are included in the statute the agency is implementing.‖ S: In short—an agency need not include policies or statutes other than those the agency administers. S: There is something to this ―relevant factor‖ test, as restrained by statutes agency administers— eliminates surprises, as perceived by agency, for what is a relevant factor. HOWEVER, should this be the outcome in, say, an ERISA case, where the agency is, definitionally, cross-applying statutes? Agency must not have made a clear error in judgment. This amounts to a reasonable-ness test. Points i. ii. iii. iv. Most agency exercises of dicretion are judically reviewable. Agencies need not give contemporaneaous reasons for their decidions, ut if they don‘t they forfeit the ―presumtption of regulatory‖ Reviews based on reasons agency gave and the record on review is that before the agency when it makes its decision, but Court will require reasoned decision making by the gency and will engage in something akin to ―hard look review‖!
8.
b. c. d.
H. Hard-look doctrine—what are the courts looking for when they engage in review for ―arbitrariness & capriciousness?‖ 1. Leventhal v. Bazelon debate revisited. a. Bazelon: i. Courts are not capable of making technical judgments; however, they must ensure that there is opportunity for the creation of a complete record. Procedural Protection. ii. The record will either demonstrate that agency action is irrational, or the agency will prevail iii. Ultimately, public and political process constrain the agency iv. Vermont YankeeREJECTS the Bazelon approach. (S: What‘s left?…see Leventhal) b. Leventhal: Ct‘s have to be allowed to review substance, not to substitute its judgment, but to keep the agency honest. Ct. must steep itself in the facts, and require an explanation. ii. Courts role is to ensure the agencies take a ―hard look‖ at the issues raised. iii. Vermont Yankee left open the question of whether the arbitrary and capricious standard embodies the Leventhal approach… i.
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2.
Air Bag case—Secretary of Transportation was charged with implementing passive restraints for cars. Considered airbags and automatic seat belts. a. History: NHTSA wanted to ensure use of safety belts—―admission interlock.‖ PO‘ed the populace; Congress prohibited admission interlocks. ii. Next stepNHTSA looked into airbags. Tech. proved a constraint…abandoned airbag approach. iii. 1981 (Carter Admin.)—―we need airbags‖ iv. Reagan election—―this is too invasive…we‘re going to do rulemaking re: rescinding the old rule.‖ After examination, agency states ―passive belts alone won‘t work‖ and abandons the rule, without regard to airbags. i. b. Ct.: Agency must consider all relevant alternatives (9-0). i. Agency rejected passive restraints, based upon seat belts…did not consider an ―airbags only‖ rule. Agency needs to explain why it did not consider an airbags only rule. A relevant factor is ―consideration of reasonable alternatives,‖ which includes ‗airbags only.‘ Why is ―airbags only‖ a relevant factor? What does the ct. consider, and how does the agency know what the ct. will consider a relevant factor? Ct.: You previously had an ―airbags only‖ rule (rejected by the ct., and since modified)—you should have known that this was an option.
ii.
c.
Adequacy of data re: automatic safety belts—agency rejected automatic belts as more expensive than the benefit it would provide. (6-3) Some data indicated that people used automatic belts. Agency: ―atypical car buyers—if you pay for it, you‘re going to use it. The average driver will disconnect the belts.‖ ii. Ct.: Agency does not address ―inertia‖—whether people will be too lazy to disconnect automatic belts. This is a relevant factor—agency must consider it. (S: why is this relevant? ‗Cause the judge said so… Agency: how could we have known this?) iii. Agency is allow to use uncertainty (b/c benefits are uncertain, agency will restrain from imposing costs on industry)—however, it must explain exactly how it concluded the benefits were uncertain, in light of the record, and why it did not seek additional information if the record indicates such info would have helped resolve uncertainty. i.
d.
Holding: Agency must consider reasonable alternatives (failure to consider airbags only was unreasonable…who decides what alternatives are reasonable (the Judge!)) and must consider relevant factors (failure to consider inertia of having to detach airbags was unreasonable…who decides what factors are relevant (the Judge!)). [Most people think this is an adoption of the Leventhal position] So what is the Hard look test for arbitrary and capriciousness? 4 aspects (mostly quasi-procedural) a. Did the agency provide meaningful opportunity for public participation? Notice and comments (as limited by LTV—―cannot force procedure other than those req‘d by statute/constitution‖) Did the agency consider all reasonable alternatives? Did the agency consider all relevant factors? (Includes any statutory requirements. Additionally, agency must explain why it proceeded as it did—assumptions, technical models, data sets for evaluation, why it drew conclusions from such) *S: These are procedurally oriented—while the ―hard look‖ test is somewhat invasive, it doesn‘t tell the agency it is incorrect—it merely states the agency has not sufficiently explained itself. [Chris—how is this ―only‖ procedural?] d. Did the agency commit a ―Clear error of judgment‖—we see your reasoning, your logic, and we think it‘s totally incorrect. (see Overton Park) *S: this is probably substantive (for a, b, and c, the court will require more procedure, and then the agency can return with exactly the same result—for clear error, additional procedure cannot correct the defect).
3.
b. c.
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**Ct‘s are reluctant to reverse due to ―clear error,‖ and it was not part of Leventhal‘s original ―hard look test.‖ ***S: USPS—builds a post office in upstate NY. Reports that there would be no resulting aesthetic environmental impact. Ct.: ―putting a tutu on an elephant and calling it a ballerina‖—can‘t say this monstrosity would have no aesthetic impact I. Impact of Hard Look Review 1. ―Invasive‖ judicial review— a. b. 25-30% of rules that are challenged under this basis are reversed Decreases flexibility—leads to agencies incurring additional costs due to increased study, analysis, time, and staff to consider additional factors before promulgating a rule—ossification of rulemaking. *Ossification process by which things calcify and become ―rock hard‖ this man rambles way to much….. Agency Uncertainty (―will this pass judicial review‖?) Delay & Increased cost of rulemaking (commenter strategic behavior (tons of comments) & adversarialism; Paralysis by analysis) iii. Poorer Quality Decisions (?) (allows judges to substitute their preferences for agency judgment, and this results in no perceivable improvement of agency rules) i. ii. c. 2. Result—provides incentive to avoid rulemaking
Alleged impact on use of rules: a. b. c. Rulemaking becomes protracted & costly Agencies try to avoid notice & comment (instead, make by policy by less-than-informal rulemaking or adjudication) Agencies avoid changing policy if issues raised are controversial.
3.
S: Doesn‘t the emphasis on explanation result in pushing the real power down from the agency heads to lower level bureaucrats, who control the information? Air bag case—criticism: court wanted science when the issue was political. If the issue is political, then shouldn‘t the check be the political branches (i.e., the president)? Suggested alternatives: a. b. c. Return to original understanding of arbitrary and capricious review (pass-fail review) Substitute fast-track political review Leave it totally to politics
4.
5.
6.
S‘s response to criticisms of hard look review (he wrote LR articles on this) a. Prevalence of judicial review is overstated: *S (off the cuff)—frequent statement in law reviews (up until 2 years ago): ―virtually every EPA rule is challenged in court, and 30-40% of these rules are overturned.‖ However, empirical analysis has shown that this isn‘t true—3% of all rules & 20% of notice and comment rules; 35% of ―important‖ (controversial) rules are challenged. *Even with rules that are challenged, not all are challenged on arbitrary and capricious grounds. *Further, rules that are challenged are not reversed as frequently as the LR critics argue b. The polity demands analysis & deliberation *People don‘t want glib, purely political decisions.
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c.
Data on number of rules indicates that the pace of rulemaking has not slowed down. *While cost and delay may be real (though delay may not be bad), there might not be a real institutional incentive to fail to promulgate rules.
d. e.
Court can only remand and agency usually essentially reinstates the rule. S: ―Psychology of Accountability suggests hard look review improves agency decisionmaking‖— *Predictions that ossification will lead to poorer policies in specific instances have proven false. S‘s bottom line: the real issue is the cost of ossification v. the benefit of better decisionmaking.
J.
Chevron and Review of Statutory Interpretation 1. Facts—dealing with sources of air pollution under the EPA. ―New Source Performance Standards‖— new sources have to use better technology. Question is, what if you take an old plant and increase the output—is this a new source? Shouldn‘t you allow for revamping old sources? Wouldn‘t this create incentive to leave belching dinosaurs? Led to ―Bubble concept‖—can increase capacity, so long as the total pollution is equal or less to that emitted from the original facility, even if it would not comply with the ―NSPS‖. Issue: Whether ―bubble‖ is consistent with the CAA ―stationary source‖ definition—EPA constructs ―stationary source‖ to be an entire facility (―bubble‖), while each source w/in a facility is conceivably a ―stationary source.‖ PH: Lower court looked to policy—what was purpose of the act; adopted a ―static judicial def. of the term ‗stationary source‘ when it had decided that Congress itself had not commanded that def.‖ Essentially, it‘s ambiguous, and I‘ll resolve that ambiguity in accord w/ the policy of the act. Ct.: We agree the act is ambiguous, but it isn‘t your job to decide ambiguities. ―The ct. does not simply impose its own construction of the statute—rather, . . . if the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency’s answer is based on a permissible construction of the statute.‖ 2 step inquiry for an agency interpretation of a statute it administers: a. Is the statute silent or ambiguous with respect to the question facing the agency? (if no, the ct interprets the statute in accordance with its meaning on this issue) If yes, then the ct. defers to any permissible/reasonable agency interpretation.
2.
3.
4.
5.
b. 6.
Questions under the Chevron doctrine: a. b. c. d. What sources of law may a reviewing court consult at step one? How is a statute deemed ―ambiguous‖? (S: why is policy not a source of law for interpretation?) How much deference should a court exhibit at step one—what counts as sufficient silence or ambiguity? How much deference should a court exhibit at step two—what counts as a reasonable interpretation? What, if any, are the exceptions to when Chevron apply?
7.
Cardoza-Fonseca (Stevens trying to stuff Pandora back in the box)—articulation of the sources ct. looks to for step 1. a. ―Traditional tools‖ of statutory interpretation: -The text -Related provisions/statutes -Leg. history (?) (A schism--conservatives don‘t like it: it‘s not part of the statue (and therefore, don‘t know if the majority that passed the statute would agree); Congress did not
49
vote on it; can be abused to slip things in and attempt to expand the scope) (S: on one hand, this can be abused; however, it is a fact that the legislature itself relies on the committee reports to summarize the bill and influence their vote). -Leg. Purpose (?) (Arg against—this allows the court to CREATE a purpose, and thus, legislate. This is what was overruled in Chevron, so at least in that context, it‘s doubtful that this (by itself) is valid to support a judicial interpretation) -Canons of interpretation (rules about how to interpret statutes) -2 kinds: Text based and Policy Based. *Text based—e.g., ―inclusion of one thing is the exclusion of another.‖ -Universally recognized linguistic usage -Other textual canons (S: Chevron should trump these…) *Policy based—e.g., ―don‘t decide a constitutional issue if it can be avoided.‖ (S: this canon is sufficiently important so as to be more important than Chevron— e.g., ANYTHING implicates the 1st Amd; the agency does not consider constitutional issues; it would hamstring the agency if every issue were decided on constitutional grounds). -Clear statement rules—(e.g., 11th Amd.—Congress has power to abrogate, but it must do so clearly.) (S: Chevron should trump some and not others—in some situations, the agency is capable of considering the impacts on the states, and in those situations, would rely on Chevron; in other scenarios where the agency is incapable of taking impacts into account, Chevron should not trump. To what extent can the agency take into account the underlying policy?) -Independent policy based canons **Courts generally invoke any relevant canon at step 1. ***Critique of use of Canons canons are invoked to resolve ambiguities (S: when a ct. invokes a canon, it means that the ct. is not using the ―usual way of resolving the issue‖) -Chevron provides an alternative that often will be superior (as a matter of policy, democracy, leg. intent) b. Summarizing—what tools of statutory construction should cts use to resolve ambiguities and silence at step 1? Should canons be used? i. ii. 8. Options are to either resolve at step 1 using canons, or declare statute silent and ambiguous and proceed to step 2 deference. S: Generally, he would prefer to look to the basis of the canons
Chevron Applied a. Activisim at Step One—two fundamental choices:
*If a judge is able to decide what she believes is the meaning of a statute, she should vote for that meaning rather than defer (more active—―If I can figure a meaning, I vote for it‖the current trend; Scalia: ―Chevron is not an abdication of responsibility—if I can decide a meaning, I‘ll vote for it‖) -OR: *If a judge concludes that reasonable jurists could disagree as to the interpretation wrt the issue facing the agency, she should find the statute silent or ambiguous and defer to the agency. (less active) i. S: leads to absurd results—5-4 decision, with the majority and minority each having a diff. interpretation, but yet, they don‘t find ambiguity. ―You can always find some clear meaning.‖ Exam tip—―Using the traditional tools, here are two approaches, depending on how active you want to be‖, then discuss the ramifications of activism/less activism.
ii.
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*Arg in favor of less active approach: agency expertise, agency accountability; agency as a policy-making organ, v. judiciary; *Arg for more active approach: judicial role in ―saying what the law is;‖ separation of powers (formalism); prevents abuse / runaway agenciespower capture; political rent seeking b. MCI v. ATT—FCC made tariff-filings optional for all non-dominant carriers (i.e., change of manner in which FCC regulated rates. [tariffs are rates and conditions of service, in this context]. Previously, the FCC would review tariff filings for reasonableness. The statute didn‘t change, but the style of regulation did [become more competitive, compared to ATT‘s near-monopoly when the statute was enacted]). Problem—statute required that all carriers had to file tariffsinflexible approach to rate regulation, and discouraged entry of non-dominant carriers into the market. ATT sues only carrier subject to this new interpretation sued based on inconsistency of agency practice w/language of the statute: ―every company must file tariffs.‖ -: Statute states ―FCC may modify its reg. regime as the public interest requires.‖ Here, this is what the public interest requires—not requiring tariffs for non-dominant categories is in the public interestencourage competition. Issue: whether ―modify‖ can encompass this kind of wholesale change in a regulatory scheme? Ct. (Scalia): ―Modify‖ does not mean to change wholesale; it means to tweak, make minor changes. Clear Meaning! (While this rule is economically sensible, it isn‘t consistent with the statute)based upon ―clear meaning‖ as det‘d by 5 dictionaries (and expressly ignores a different dictionary definition of ―modify.‖) Discussion: This is a case of why Chevron could be good—have an agency that‘s on top of the political environment and is reacting to dynamic changes, and have a court that overrules based upon construction of the 1934 meaning of the statute. *Example of Hypertextualism.—active ct. at step 1. c. Rust v. Sullivan (non-active ct. at Step 1—downplays canons)—Can HHS impose gag rule prohibiting all individuals in family planning clinics receiving fed. aid from discussing abortion? (Highly political rule; also has First Amd. ramifications—Dr.‘s: ―You can‘t dictate what we tell our patients, just b/c you‘re providing funding‖) Ct.: Court deferred to agency rule via Chevron; Court ruled that the HHS interpretation did not raise a significant con. question; *Canon that the ct. shouldn‘t decide cases that have constitutional ramifications if they can be avoided—downplayed ―not a sig. Con. issue.‖ d. Brown v. Williamson (Textualists ignoring plain meaning)—FDA wants to regulate cigarettes as a ―drug delivery mechanism‖, per statute that says they can regulate drugs. Previously, they didn‘t think of cig‘s as a drug; however, they learned that cig‘s were, ―as a matter of intent,‖ designed to be a drug delivery device. Ct.: The assumption has always been that FDA does not have authority to reg. tobacco, and therefore, Congress has always vested the authority to reg. cigarettes with the Dept. of Interior. -Why the deviation from plain meaning? (S: Scalia is two-faced…) Ct. relies on context— Congress had passed other statutes that would not make sense if FDA had authority to regulate… (S: Why not make the agency pay the cost? See slides…) e. i. Activism at Step Two—Fundamental approaches
Extremely deferential: Ct. reverses only if it finds that the agency interpretation ―fails the laugh test at the Kennedy School of Gov‘t.‖ Rust v. Sullivan. This is the standard ct’s generally use.S: The problem is this mixes up a standard of review with a standard of decision-making, with the result being that the most crass knee-jerk politics (everything bad about interest group politics) is okay.
51
ii.
Ad hoc det. of deference—court reverses if it finds that the interpretation falls outside the bounds allowed by the silence or ambiguity. ATT v. Iowa Utilities Bd. (only case where agency has been reversed at step 2) (S & Chris: how is this different than a step 1 analysis?) iii. Reasoned Decision-making (arg‘ed for by commentators)—Ct. requires the agency to explain why it chose the interpretation it didpromotes deliberative democracy; additionally, even if this passes Chevron‘s step 2, still should be challengeable as arbitrary & capricious, yielding to the hard look test (S: this is not the actual practice of the ct. actual practice is ―if you win at step 2, it is not challengeable as arbitrary and capricious.‖) 9. When to apply Chevron—is there an alternative? a. S: Remember that, before Chevron, the ct‘s employed ―Skidmore‖ deferencethe judge states ―I am responsible for ultimately det‘ing the law, but if the agency is consistent, reasonable, etc., I will give their interpretation some weight.‖ S: In order to understand these models, must analyze the underpinnings and models of Chevron. FormalistS rejects—Congress would be the experts, with the agency merely implementing Congress‘ will. ii. Expertiseseems to call for broad Chevron deference, due to notion of agency as experts iii. Legal ProcessAgency would get deference if you can show Congress intended to defer to agency, and the agency followed the appropriate/intended procedures. iv. Pluralistic DemocracyCt. should always defer to agency, b/c agency is politically accountable (optimist). Limitation might be keeping interest groups from paying monopoly rents. v. DeliberativeDefer to agency due to increased accountability; ct.‘s role is to ensure that the agency actually deliberates and does not merely kowtow to interest groups. i. c. Christenson v. Harris Co—Does the min. wage law allow state and local gov‘ts to req. employees to use comp. time rather than force the employer to pay cash compensation? -Dep‘t of Labor issued an opinion letter interpreting the statute as prohibiting gov‘ts from ordering employees to use comp. time. [This is an Interpretive Rule]. Is this opinion due Chevron deference? DC Cir (Thomas was the judge (before he became a justice))—―This is not a Chevron case—we will apply Skidmore deference, b/c this was an interpretive rule w/o the force of law. Additionally, we‘re not persuaded by the agency‘s interpretation—agency loses…‖ *S: This IS Skidmore—the Dep‘t of Labor does not have the authority to issue rules in this context—all it can do is prosecute. What this says: ―If agency does not have ultimate authority (Congress reserved it), Chevron does not apply.‖ S: This knocks out the expertise argument as a justification for Chevron; if anything, it advocates legal process ―Congress didn‘t give them the job, then they can‘t do the job…‖ **This is a limited case—does not address what to do when agency DOES have rulemaking authority, and chooses not to use it—is this entitled to deference, since Congress HAS delegated the authority? d. US v. Mead (Ct. adopts legal process model—―a matter of intent‖) i. Touchstone of Chevron deference—―statutorily conferred authority and other statutory circumstances‖ imply that ―Congress would* expect the agency to be able to speak with the force of law when it addresses ambiguity in the statute, or fills a space in the enacted law‖implied intent. *S: This is looking for ―Constructive‖ intent, rather than ―implied‖ (meaning actual, intended) intent to fill in the gaps. [This is S‘s minority viewmost folks would say this is a matter of implied intent.] ii. Mead—as a matter of legal process, have to construct intent of Congressthis is evidenced by the USE of the process, i.e., Notice and Comment. If the agency has not used authority as conferred by Congress, the agency does not get Chevron deference—that is, if the agency promulgates interpretive rules, it is entitled only to Skidmore deference. **NOTICE AND COMMENT IS THE TOUCHSTONE OF IMPLIED INTENT -S: How do you know when Congress would expect the agency to speak with the force of law?
b.
52
Mead—a matter of Congressional intent; to determine that intent, look to see if Congress gave the agency authority to act with the force of law. iii. Next,What does it mean to speak with the force of law? Of course, formal* proceedings and notice and comment would satisfy this test. *S: What does ―formality‖ have to do with the force of law? What about emergency rules? iv. Problems with Mead as stated a) What does it mean to have ―Force of Law?‖ -―Binding effect‖—Rules and adjudications have binding effect on parties w/in bounds of the order; courts can enforce this. -Influence on subsequent cases—orders have force of law if they have both direct binding effect and precedential value. *Do interpretive rules have binding effect? No. But they do have precedential effect. b) At issue in Mead—a ruling letter (for importing notebooks); by statute, they have no precedential effect, but they do have binding effect for the parties. The court says this is insufficient for ―Force of Law‖S: does this mean you need both precedential value and binding effect in order to have the force of law? c) There is ambiguity about what Mead means in the abstract—what does ―Force of Law‖ mean, since the ruling letter clearly was binding upon the parties to the transaction.
v.
Problems with Mead as applied—what Mead does. a) ―Touchstone is N&C and Formal Procedure‖ S: What does formal procedure have to do with binding effect and precedential value? NOTHING. There are plenty of agency practices which are binding AND have precedential value and are NOT done through formal procedures—an order is an order is an order. b) ―Many different offices can issue ruling letters‖ S: What does this have to do with the force of law? A party is just as bound by a ruling letter from a local office as from headquarters—clearly binding. Also, has some precedential effect, as the agency must explain why it takes a different position. S‘s minority position: ―Mead said force of law, but didn‘t mean it. Ct. was concerned that agencies were getting deference when it may not have carefully considered the matter. Ct: ―We want the agency to 1) carefully understand that it will have precedential effect; 2) done at a level where there is political accountability (and not done surreptitiously), and 3) make the rule with care.‖ S: These have nothing to do with the force of law—more of a reasoned decisionmaking. d) Result of Mead—case-by-case determination of whether the type of ruling warrants Chevron def. c) *Type of ruling = class of rulings authorized by regulatory scheme (broader than the individual action, but narrower than the procedural categories under the APA (formal, informal, less than informal, rulemaking or adjudication). e) Open Questions after Mead—does Chevron deference apply to: *Informal adjudication? (Binding, precedential, but don‘t use formal procedures—what result?) *Formal adjudications like SS disability rulings? (Order, binding, precedential, but 1200 ALJs making thousands of ruling a year—what if a few of these slip by? Owed Chevron deference?) *Legislative rules made under the ‗good cause‘ exception to §553? *Guidance documents issued pursuant to explicit statutory authority? f) Feder: Aren‘t all of these only factors to weigh—binding effect, precedential value, formal procedures, and many different offices? S: I agree—we are the minority view. The vast majority of the commenters have focused on what the Court said in the abstract—focus on ―Force of law.‖
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vi. Scalia’s Dissent a) If ―Force of law‖ is the test, why does procedure matter? b) Pragmatically, rejection of Chevron implies acceptance that judiciary is ultimately responsible for filling statutory gaps. *Lose flexibility and accountability in gap-filling interpretationi.e., if someone challenges an interpretive rule before it is subjected to N&C rulemaking, and the rule is overturned, the court has said what the law is—the agency can no longer change its mind; it cannot promulgate N&C rules. *Perverse effects, depending on whether court decides issue before or after agency issue a legislative rule. Increases agency authority because Skidmore deference applies to step one as well as two.
c)
X.
Access to Judicial Review—How do you get to court? A. Barriers to suit (or, alternatively, req‘s for seeking relief from admin. action) 1. Cause of Action—Look to organic statute, APA, and/or Common Law. Nonetheless, b/c you are suing the gov‘t, there may be prerequisites: a. Prudential Standing (e.g., ―zone of interests‖) b. Exhaustion Jurisdiction— a. Subject Matter b. Article 3 Standing Standing & Ripeness Sovereign Immunity
2.
3.
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a. b.
Waiver of Sovereign Immunity in statute If no waiver, suit against official in his official capacity (Ex parte Young)
B. Methods of obtaining review (causes of action) (This is the order to look to for causes of action1) Special Statutes, 2) general statutes (APA), 3) CL) 1. Special Statutory provision (in organic/authorizing statute) a. b. Provide Subject Matter Jurisdictionusually, to Court of Appeals Provide Cause of Action i. Special Venue ii. Special Statutes of limitations iii. May provide for prudential standing c. Waives Sovereign Immunity General Statutory Review a. APA (prospective relief)--§704 Provides cause of action if other remedy is not available, or is inadequate (―otherwise aggrieved, or inadequate‖) ii. Only for final agency action iii. Overrides exhaustion req (but allows agency to reimpose exhaustion if agency agrees to stay action pending exhaustion) iv. Limited waiver v. APA does not provide jurisdiction, b/c it doesn‘t tell you what court to go to—does not matter, though, as Fed. Q. Jurisdiction works fine—42 U.S.C. §1331. i. b. FTCA—Cause of Action for damages for torts committed by fed. officials; however, exception for intentional torts and actions involving official exercises of discretion. Not jurisdictional—fed. Q. provides jurisdiction. Tucker Act--for contract breach and takings by fed gov‘t
2.
c. 3.
Non-Statutory Review (CL damages, injunctive and declaratory relief, and 5 Special Writs) a. b. c. Depends on fiction that official who acts contrary to law acts outside his official capacity Officials enjoy immunity for actions not clearly beyond their statutory authority Check slide**
C. Ripeness of Agency Action for Judicial Review 1. Mirrors the Constitutional provisions, but nonetheless, is different. a. Do not need ripeness in front of an agency (not an Art. III ct.) Is a rule subject to judicial review when the agency issues it (pre-enforcement review), or must the party wait until it is adversely applied? a. Abbott Labs---rule req‘d drug manufacturers to place scientific name (rather than trade name) on the label. Man‘ers challenged the rule prior to application—challenged under the APA and Declaratory judgment act ―aggrieved by a final agency action, you may seek review.‖ §702. Issue: Preenforcement review. Ct.: Pre-application review is ok when 2 factors are met: 1) Fitness for judicial review, and 2) Hardship on the petitioners. 1) Applied: Fitness for judicial review—―whether this is beyond the agency‘s authority‖ a purely legal question (don‘t need further factual development). [S: pure legal questions and Constitutional questions are the easiest kinds of challenges—don‘t need further development—FACIAL CHALLENGES! Pre-enforcement review is available for any facial challenge]
2.
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*Only as-applied challenges are not ripe immediately upon promulgation of the rule [challenge which depends on specific circ‘s surrounding application, or challenge depends on new facts not available at the time rule was promulgated] Additionally, this is final agency action. 2) Applied: Hardship—―have to decide whether to invest in changing labels (if rule is valid), or whether to not comply and run risk of penalties and liabilities.‖ (―Horns of a dilemma‖). S: A rule that prescribes conduct imposes a hardship, so long as a violation imposes a penalty. [Toilet Labs—does not impose a hardship, as it only requires regulated entities to allow access; does not prescribe conduct‖Secondary regulation‖—merely authorizes further gov‘t action]. Harder Questions: What about guidance documents? Ex.: AK Hunters—No Hardship! We‘re not changing any legal obligation—you don‘t have to do anything different… ii. Under DC Cir., a rule is a guidance document only if it is not binding—if it is not binding, how will there ever be a hardship?? (there won‘t).Guidance documents are not ripe for review! iii. BUT, under S‘s and traditional approach, wouldn‘t the guidance document still put the regulated entity on the same ―horns of dilemma‖ as any other rule? i. 3. Is pre-enforcement review desirable? Ossification (inundation of fed ct‘s w/ rule challenges) v. settling uncertainty. a. 4. S: empirical evidence does not indicate that ct‘s are actually inundated by rule challenges…
b.
Review at behest of (putative) beneficiaries— a. b. c. If rule is not reviewable upon promulgation, then putative beneficiaries are denied opportunity to seek review on grounds that rule is too lenient. Pre-enforcement review empowers public to bring claims that rule is not sufficiently stringent. What about statutes that don‘t regulate conduct (i.e., ―if you meet certain criteria, you are entitled to benefits‖). See Reno—statute (changing classification from illegal alien to legal alien) was construed narrowly. Aliens are denied review
5.
What happens when the authorizing statute calls for rule challenges within a specific time? S: Unless the challenge is one that would not have been ripe within that time, you must bring your challenge within that time. D. Finality 1. Final Agency will always be required if the cause of action is under the APA. §704. (might be different if the cause of action is under an organic statute). What makes an agency action final? a. b. c. d. Must distinguish between interlocutory matters and those that resolve a controversy. Are substantive rights being determined (again, how does this clarify?). S: Determining when an agency action is sufficiently ―concrete‖ to allow meaningful judicial review (that is not unduly intrusive). S: The Test: ―Has the agency culminated its decision-making process wrt the issue?, AND, ―Does the action have the force of law?‖ i. Courts have struggled with this test wrt guidance documents—agency has culminated its process, but technically, the action does not have the force of law. ii. Under the current DC Cir. version, guidance documents would be final iii. Under traditional/Leventhal approach, they might be, depending upon the level of the agency decisionmaker. iv. Latest SC opinion—National Park Service and Federal Contract Act [find cite]. 3. Current Finality action in the courts—
2.
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a.
b.
c. d.
APA provides for action, or failure to act…parties have tried to force agencies to perform nondiscretionary duties, BUT—how can a failure to act be final agency action? The agency has not culminated it‘s decision, and it does not have the force of law. SC has granted cert: ―Even though this is not final agency action in the sense that you‘ve culminated your decisionmaking process, the fact that you have violated a statutory deadline means that there is sufficient finality.‖ Compels agency action. Intrusive. But is trying sufficient? Trying to meet the deadline is not sufficient (11th Cir)…Agency can not merely reply ―we‘re working on it.‖ S: So, when is nonaction final agency action? When the agency is trying?
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