ADMINISTRATIVE LAW – GLICKSMAN – FALL 2010
I. THE ADMINISTRATIVE STATE
A. Introduction to Administrative Law
-Administrative law concerns the legal issues surrounding the implementation of regulatory and benefit programs
Organic statute
→ Mandate/Process/Review
→ Decision
-An agency is “each authority of the government of the United States, whether or not it is within or controlled by
another agency” excluding Congress, the courts, and the President (APA §551)
-A lot of this depends upon what kind of agency we’re talking about:
1) Executive Agency
2) Independent Establishment
3) Independent Agency
An executive agency is:
-established as a department or within a department
-headed by a single individual (typically) who is removable at will by the President
An independent agency is:
-free standing (not within any department)
-headed by a board or commission with multiple members not removable at will by the President
An independent establishment is sort of a hybrid (i.e. EPA – free standing but single individual)
-Agencies regulate private conduct or implement public service/welfare programs
-Economic justifications for market intervention: Inadequate Information, Noncompetitive Conditions, Public goods
-Non-economic justifications for market intervention: Concentration of wealth, Non-market goods
Agency Advantages
1) Efficiency (streamlined process, relieve burden on Congress and the courts)
2) Expertise (specialization and experience)
3) Bureaucratic Neutrality (policy decisions on the merits, less directly political)
-The essential administrative law conflict: expertise and efficiency vs. accountability
-Agencies serve public interest, deserve deference vs. Agencies interfere with individual liberty, need safeguards
-Shared oversight of agencies:
Congress grants authority subject to standards and procedures
President appoints and removes officials and directs supervision
Courts review agency action for compliance with established standards and procedures
ADMINISTRATIVE LAW – GLICKSMAN – FALL 2010
B. Agencies and Modes of Action
-Agency Modes of Action:
1) Rule making
2) Policy making by adjudication
3) Mass adjudication
4) Informal action
5) Investigation and enforcement
Example Agency:
EPA
NLRB
SSA
IRS
FCC
AGENCY STRUCTURES
Agency
EPA
NLRB
SSA
IRS
FCC
Composition
Single Head
5 Mbr. Board
Single Head
Single Head
5 Mbr. Board
Appointment
Pres + Sen
Pres + Sen
Pres + Sen
Pres + Sen
Pres + Sen
Term
Indefinite
5 yrs.
6 yrs.
Indefinite
5 yrs.
Removal
At Will
For Cause
For Cause
At Will
For Cause
Location
Independent
Independent
HHS
Treasury
Independent
Status
Executive (?)
Independent
Executive (?)
Executive
Independent
C. The Administrative Procedure Act (APA)
-APA is codified at 5 U.S.C. §§ 551-559, 701-706
-Overview:
1) Basic concepts (definition of “agency”, rulemaking vs. adjudication)
2) Rulemaking
3) Adjudication
4) Enforcement
5) Judicial Review
-SEC v. Chenery established the principle that agency decisions can only be sustained on the basis of the reasons
given by the agency at that time
-Two basic sections of provisions
1) §§ 551-559, which set out requirements and procedures for rules and rulemaking
2) §§ 701-706, which govern judicial review
§551 – Definitions:
(5) “rule making” – agency process for formulating, amending, or repealing a rule
(4) “rule” – the whole or a part of an agency statement of general or particular applicability and future effect
(7) “adjudication” – agency process for the formulation of an order
(6) “order” – the whole or a part of a final disposition, whether affirmative, negative, injunctive, or declaratory in
form, of an agency in a matter other than rule making but including licensing
ADMINISTRATIVE LAW – GLICKSMAN – FALL 2010
ADJUDICATION VS. RULEMAKING
CASE
ACTION
CHARACTERISTICS
RATIONALES
Londoner (Adjudication)
Bi-Metallic (Rulemaking)
Special Assessment
Broad Valuation Increase
Few People
Many People
Especially Affected
Affected the Same
Individualized Grounds
Policy Grounds
Fundamental Fairness
Too Costly
Not Politically Accountable
Political Accountability
Judicial Facts
Legislative Facts
§552(a): “Except to the extent that a person has actual and timely notice of the terms thereof, a person may not in
any manner be required to resort to, or be adversely affected by, a matter required to be published in the Federal
Register and not so published.”
§553 Exceptions:
(a) This section applies…except to the extent that there is involved-1) A military or foreign affairs function of the United States; or
2) A matter relating to agency management or personnel or to public property, loans, grants,
benefits, or contracts
(b) Except when notice or hearing is required by statute, this section does not apply
1) to interpretive rules, general statements of policy, or rules of agency organization, procedure,
or practice
2) when the agency for good cause finds that notice and public procedures thereon are
impracticable, unnecessary, or contrary to the public interest
§553(b) and (c) set out requirements for informal “notice and comment” rulemaking
Three steps: (1) notice, (2) solicitation of comment, (3) incorporation of the final rule
§553(d) deals with final date and establishment of rules
-Rulemaking “triggering language”:
§553(c): …when rules are required by statute to made on the record after opportunity for an agency hearing,
then the agency must abide by formal rules of §§556 and 557
-Adjudication “triggering language”:
§554(a): …in every case of adjudication required by statute to be determined on the record after opportunity for
agency hearing, except to the extent that there is involved--(six exceptions)
ADMINISTRATIVE LAW – GLICKSMAN – FALL 2010
-Formal Adjudication
1) Timely notice (§554(b))
2) Opportunity for settlement (§554(c)(1))
3) Hearing under §§556 & 557 (§554(c)(2))
a. ALJ and Agency (§556(b), 557(b))
b. Hearing rights (§556(d))
c. Ex parte contacts (§554(d)(1), 557(d))
d. Separation of functions (§554(d))
4) Substantive evidence review
-Reviewability exceptions
§701(a): This chapter applies, according to the provisions thereof, except to the extent that—
(1) statutes preclude judicial review
(2) agency action is committed to agency discretion by law
§702: A person suffering a legal wrong because of agency action, or adversely affected or aggrieved by agency
action within the meaning a relevant statute, is entitled to judicial review thereof…
§704: Agency action made reviewable by statue and final agency action for there is no other adequate remedy
in court are subject to judicial review…
-The APA indicates three things about judicial review:
1) Whether judicial review is available
2) When judicial review is appropriate
3) The extent of the rigor with which courts are supposed to conduct judicial review
§706: Scope of review
To the extent necessary to decision and when presented the reviewing court shall…
1) Compel agency action unlawfully withheld or unreasonably delayed, and
2) Hold unlawful and set aside agency action, findings, and conclusions found to be
a) Arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law
b) Contrary to constitutional right, power, privilege, or immunity
c) In excess of statutory jurisdiction, authority, or limitations, or short of statutory right
d) Without observance of procedure required by law
e) Unsupported by substantial evidence in a case subject to §§556 and 557
f) Unwarranted by the facts to the extent that the facts are subject to trial de novo
In making the foregoing determinations, the court shall review the whole record.
§559:
-The various APA provisions do not limit or repeal additional statutory requirements
-These various APA provisions do not limit or repeal general requirements from other Congressional statutes
Richardson v. Perales
-Issue was whether agency violated due process and the APA by relying on documentary hearsay evidence in
making the determination denying disability benefits
-SC upheld SSA’s denial of benefits: plaintiff had access to reports and opportunity for cross-exam and subpoena
-Considerations of practicality and cost: it would be prohibitively expensive if every claimant had the right to crossexamine every doctor who produced a report in the case
ADMINISTRATIVE LAW – GLICKSMAN – FALL 2010
Robinette v. Commissioner of the IRS
-IRS held Robinette in default on his previously agreed to offer-in-compromise
-Tax Court reviews IRS hearing decision under an “abuse of discretion” standard of review (very deferential)
-Review of administrative law decisions is “ordinarily limited to consideration of the decision of the agency…and of
the evidence on which it was based” (therefore, no presentation of new evidence on review)
-Without a clear statutory intent to displace this aspect of the APA, its provisions may not be superseded
-Additional evidence is limited to that which explains the hearing officer’s determination; it is not an opportunity for
a de novo presentation (as Robinette had argued)
D. Agencies and Separation of Powers
-The Supreme Court has invoked two different models of the separation of powers:
1) Formalist model
-The Constitution creates three distinct branches with three distinct powers
-Agencies are part of the executive branch, therefore can only exercise executive power
2) Functionalist model (predominant)
-The lines among the three powers blur and frequently overlap (no discrete boundaries)
-Agencies fall in the area of maximum overlap and perform various functions
Regulations = legislative
Enforcement = executive
Administrative Adjudication = judicial
FCC v. Fox Television Studios
-issue is whether FCC change in policy to ban “fleeting expletives” was arbitrary and capricious
-even though agencies have broad power to change policy, they cannot do so for merely political reasons
E. Agencies and Legislative Power
-Agencies have no inherent authority – their authority comes from statutes (from Congress)
-Separation of powers principles arising from Article I place constraints on agencies, including the nondelegation
doctrine, bicameralism, presentment, and the rule of law
-The protections provided by bicameralism and presentment are not present in agencies
-The nondelegation doctrine posits that Congress may not delegate its legislative power
-The exercise of delegated lawmaking authority is permissible, however, if the organic statute establishing the
agency contains an “intelligible principle” to guide the agency (this delegation promotes efficiency, expertise, etc.)
-Factors which also may involve impermissible delegation of authority:
1) Breadth of power (problematic if too broad)
2) Recipient of authority (problematic if infringes on executive authority through delegation or delegates to
private parties with a stake in the decision)
3) Subject of power (problematic if power is one that is defined for a specific body)
4) Procedural safeguards (problematic if there are none)
5) Criminal Sanctions (problematic b/c creation of criminal offenses is a legislative function)
6) Judicial review (problematic if there is none)
-When in doubt, uphold; Court hasn’t struck down a statute on non-delegation grounds since the 1930s
-Congress developed a technique for overcoming obstacles to agency overview and review; it passed a number of
statutes that gave it the power to veto agency decisions and regulations
ADMINISTRATIVE LAW – GLICKSMAN – FALL 2010
-The Court struck down the legislative veto as unconstitutional in Chadha v. INS, where because it alters the legal
rights of those affected by the veto (violates either bicameralism, presentment, or both)
-The line-item veto was a technique which allowed the President to veto parts of statutes instead of entire statutes
-In Clinton v. City of New York, the Court found the line-item veto unconstitutional
-In some statutes, Congress has adopted “wait and see” provisions, which delay the effect of the regulations until X
days after their adoptions (allows Congress to evaluate the regulations)
F. Agencies and the Judicial Power
-Congress often delegates to agencies the authority to adjudicate cases
-The question is when agency adjudication crosses over into and infringes on “judicial power”
-Constitution imposes three sets of constraints on adjudication:
1) Art. III vesting of judicial power in the Supreme Court and lower courts
2) Seventh Amendment right to a jury trial
3) Due Process clause of 5th Amendment
-Art. I ALJs lack the protections of Art. III judges (like lifetime tenure)
-Agency adjudication occurs without a jury
-Agency adjudication may be without judicial review and/or invest prosecutorial and fact-finding power in one
body, which could interfere with due process
-In Murray’s Lessee, SC held that Congress can withhold from the jurisdiction of the federal courts issues involving
public rights, even if those rights fall under the courts’ jurisdiction (comes from doctrine of sovereign immunity)
-In Crowell v. Benson, SC held that agency’s fact-findings are conclusive on review if they are supported by the
evidence and agency’s authority; also permitted adjudication of private rights but only if statute provided for review
-If the dispute is one that involves public rights (one in which the government is a party), Congress can assign
review of all matters concerning those rights to Art. III judges with no judicial involvement at all
-If the dispute is one that involves private rights (all parties are private parties), agency adjudication is permissible,
as long as the “essential attributes of judicial power” are reserved to the courts on appeal from the agency decision
-The current definition of public rights also includes a dispute in which the government is not a party but the case
involves a statute that creates liability among private parties
Commodity Futures Trading Comm’n v. Schor
-The court upheld the allocation of authority, holding that Schor waived any interest he might have had to
guaranteed consideration in federal court b/c he filed the original fraud claim before the agency and did not object to
the adjudicator’s hearing of the claim until the adjudicator ruled against him
-Distinguished between the individual litigant’s personal rights to have an issue litigated in a federal court, and the
broader institutional interest of the government and the public (some rights to Art. III resolution cannot be waived)
The Schor test:
(1) Whether the court or the agency exercises the “essential attributes of judicial power”
(2) The nature of the right at issue (public vs. private)
(3) The reasons Congress has for delegating adjudicating authority to the agency
-The essential attributes of judicial power are reserved for Art. III federal courts
ADMINISTRATIVE LAW – GLICKSMAN – FALL 2010
-In Granfinanciera, the Court said that if a statutory cause of action is not a public right for Art. III purposes, then
Congress may not delegate the authority to adjudicate it to a non-Art. III court
-Granfinanciera, adopted a broad interpretation of public rights:
“The crucial question in distinguishing between public and private rights in a case in which the government is not a
party is whether Congress, acting for a valid legislative purpose pursuant to Article I, has created a seemingly
private right that is ‘so closely integrated into a public regulatory scheme as to be a matter appropriate for
agency resolution with limited involvement by the Article III judiciary.’”
-Congress can’t just convert a private right into a public right by integrating it into a public regulatory scheme
Exempt?
Easy Schor
Article III
Apply S
Character of
Public
Private
the Right
Exempt
7
th
G. Agencies and the Executive Power
Constitution vests in the President the executive power of the United States (Art II, §1)
-The President “shall take care that the laws be faithfully executed” (Art II, §3)
Five issues (appointment/removal/oversight):
(1) Can Congress directly appoint agency officials?
(2) Can Congress assign authority of appointment to someone other than the President?
Invalid E
1. Wa
2. No CL
ADMINISTRATIVE LAW – GLICKSMAN – FALL 2010
(3) Can Congress directly remove executive officials?
(4) Can Congress restrict the President’s removal authority?
(5) What happens when the President’s orders and statutory authority conflict?
-Art. II §2:
[the President] shall nominate, and by and with the Advice and Consent of the Senate, shall appoint…all
other Officers of the United States…
…but the Congress may by Law vest the Appointment of such inferior Officers, as they think proper, [a] in
the President alone, [b] in the Courts of Law, or [c] in the Heads of Departmetns
Buckley v. Valeo: “Officers of the United States” include “any appointee exercising significant authority pursuant to
the laws of the United States”
-The Court said that significant authority does not include investigative and information-gathering functions
-But significant authority does include adjudication, rulemaking, and enforcement functions that involve
implementation of existing laws rather than the passage of the new ones
Three basic questions under Buckley:
(1) Is the official an “officer of the United States” so as to be subject to the clause?
(2) If yes, then is the officer a principal officer or an inferior officer?
(3) Is the particular means chosen for appointment of the inferior officer proper?
-Crucial to determine whether official is a principal officer or an inferior officer
-Four factors to determine whether officer is principal or inferior (from Morrison v. Olsen):
(1) Subject to removal by a higher Executive Branch official
(2) Empowered by the Act to perform only certain, limited duties
(3) Limited in jurisdiction
(4) Limited in tenure
-But see Edmond (if you answer to a supervisor directly appointed by the President, you are an inferior officer)
-Officials qualify as heads of Department only if they operate on Cabinet-level, i.e. Secretaries (Freytag v. C.I.R.)
-But see Free Enterprise Fund v. Public Co. Accounting Bd. (all freestanding agencies that are not subordinate to
any principal officers qualify as Deparments for the purposes of the Appointments Clause)
-This contradicts, if not overrules, Freytag
-An official at an independent agency could argue that he is not required to abide by an executive order because the
President lacks the authority to supervise independent agencies in that manner
-City of Albuquerque v. U.S.: three-part test to establish whether executive order can be judicially enforced
(1) Executive order must have some specific statutory foundation
(2) Neither statute that provides basis for executive order nor the order can preclude judicial review
(3) Must be an objective standard by which courts can judge
-The President has the power to remove unconditionally (Myers)
-However, removal of officials discharging “quasi-legislative” or “quasi-judicial” functions restricted to “for cause”
(Humphrey’s Executor)
-Congress can’t reserve for itself the power to remove an official charged with executing the laws, except by
impeachment (Bowsher)
ADMINISTRATIVE LAW – GLICKSMAN – FALL 2010
QL or QJ Functions Valid
Inferior, Nonpolicy
Officer Valid
Core Executive Function
on)
Step 1: Removal
Provision
Principa
Policymaking
Congressional Consent
ForInvalid
Cause
(go o
Invalid
II. SCOPE OF JUDICIAL REVIEW
A. Introduction to Judicial Review
-“Scope of review” refers to the issues that are subject to judicial review
-“Standard of review” refers to the degree of deference courts give to the agencies
DEFERENCE ARGUMENTS
Pro-Deference
Anti-Deference
Congress has delegated authority to the agency
It is critical to have meaningful judicial review
Agencies typically have more competence/expertise
Agencies sometimes are captured or abuse their power
Agencies more familiar with administrative record
Familiarity with record not always implicated
ADMINISTRATIVE LAW – GLICKSMAN – FALL 2010
Inefficient for courts to engage in de novo review
Courts must protect rights
Key provision of the APA is §706:
-Authorizes reviewing courts to decide all relevant questions of law, interpret constitutional and statutory provisions,
and determine the meaning of applicability of the terms of agency action
-Courts can compel agency action or hold unlawful and set aside agency action that is found to be
…arbitrary, capricious, or an abuse of discretion…in excess of statutory jurisdiction, authority, or
limitations…unsupported by substantial evidence…
-Courts shall review the whole record that was before the agency
-Agencies make three sets of determinations: (1) Factual, (2) Legal, and (3) Policy
-Facts: both “judicial” and “legislative” facts are subject to the “substantial evidence” test if it applies, or the default
“arbitrary and capricious” standard if it does not
-Law: interpretation of statutory and other legal questions would appear to be de novo, but is not always de novo
review because courts sometimes always defer to agency legal determinations
-Policy: because policy decisions are “ultimate” decisions of the agency which involve mixed questions of law and
fact, the courts typically defer under the “arbitrary and capricious” standard
ISSUE
SECTION OF APA
STANDARD OF REVIEW
Constitutional violation
§ 706(2)(B)
de novo
Statutory compliance
§ 706(2)(C)
de novo; but see Chevron
Procedural compliance
§ 706(2)(D)
de novo
Findings and
conclusions
Informal RM
§ 706(2)(A)
arbitrary and capricious
Formal RM and
Adjudication
§ 706(2)(E)
§ 706(2)(A)
substantial evidence (findings)
arbitrary and capricious (reasoning)
-The question on judicial review is not whether the agency’s result is correct, but whether its reasoning provides a
sufficient explanation for that result
-Facts of the record + Interpretation of the statute = Agency decision, which yields the ultimate policy choice
Application of §706: Overton Park
-statute said that the Transp. Sec. could authorize use of federal funds on any project requiring the use of a public
park only if (1) no feasible and prudent alternative and (2) program includes all possible planning to minimize harm
-Opponents of the highway on review argued that Secretary did not indicate why no feasibly and prudent alternative
existed or why design changes that would reduce impact were unavailable
-The court held that §706(2)(F) did not apply – facts not subject to trial de novo
-Application of de novo review standard under 706(2)(F) limited to circumstances “when the action is
adjudicatory in nature and the agency factfinding procedures are inadequate” or “when issues that were not
before the agency are raised in a proceeding to enforce nonadjudicatory agency action”
-Court emphasized that the “generally applicable standards” of §706 contemplate a “substantial inquiry” consisting
of three questions:
ADMINISTRATIVE LAW – GLICKSMAN – FALL 2010
(1) Whether the agency acted within its authority the scope of its statutory authority
(2) Whether the agency’s ultimate choice was “arbitrary and capricious” or an “abuse of discretion”
(3) Whether the agency committed procedural errors
-In SEC v. Chenery, the Court made it clear that the agency’s decision must stand on the reasons provided by the
agency – the reviewing court cannot substitute its own reasons for the decision
Allen v. Barnhart: “Any attempt to save the decision” by making additional fact findings “usurps the ALJ’s primary
responsibility to determine that question in light of the various case-specific considerations outlined in Trimiar.”
B. Substantial Evidence Review
-Three typical standards of review for administrative decisions
1) Substantial evidence
Formal rulemaking and adjudication governed by §§556-557 of APA
Other contexts if the organic statute so requires
2) Arbitrary and capricious (most deferential)
Default standard under APA if substantial evidence does not apply
Informal rulemaking and adjudication
3) Clearly erroneous (least deferential)
Applies if organic statute so requires
-The inquiry: Whether the agency’s finding is reasonable based on the reasoning given in light of the record
-Leading case for substantial evidence test was for years Universal Camera
-Substantial evidence is “more than a mere scintilla” and “such relevant evidence as a reasonable mind might accept
as adequate to support a conclusion”
-As long as agency’s conclusions are reasonable in light of the facts, the court must uphold the agency’s conclusions
-These include findings based on both direct evidence and circumstantial evidence (inferences)
-Agency generally has to give some explanation and justification as to why it made inferences
-The decision that the courts are supposed to review is the decision of the agency, not the ALJ
Center Construction Co. v. NLRB
-Court aff’d the Board on each allegation except for one issue; it agreed with ALJ’s factual finding on credibility of
witnesses because ALJ is able to observe demeanor of witnesses and better ascertain their credibility;
Two types of inferences:
-Testimonial inferences are based on witness demeanor
“Inferences that a fact to which a witness orally testified is an actual fact because the witness so testified
and observation of the witness induced a belief in his testimony”
-Derivative inferences are based on other aspects of the testimony (i.e. inconsistencies)
“Inferences based on facts as to which no witness orally testified but which the ALJ inferred from facts
orally testified by witnesses whom the ALJ believed”
-The agency must have substantial reason to justify reversing an ALJ’s testimonial inferences but does not need
special justification to reverse an ALJ’s derivative inferences (greater discretion to reject derivative inferences)
C. Review of Statutory Interpretation under Chevron
Arguments for judicial deference to agency’s statutory interpretation:
ADMINISTRATIVE LAW – GLICKSMAN – FALL 2010
1) Agency has expertise
2) Congress delegated substantive policymaking authority to the agency, including the power to fill in
statutory gaps and ambiguities
3) Agency is in a better position to understand the policy implications of competing interpretations of a statute
-The leading case is the Chevron case
-Court said that, for the purposes of the Clean Air Act’s requirement that a permit is required for increased discharge
from any “source,” a single facility w/ two buildings is a single “source”
-The Chevron test:
1) “If the intent of Congress is clear and spoken to the matter at issue, that is the end of the matter; the court,
as well as the agency, must give effect to the unambiguously expressed intent of Congress”
2) “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”
-If the statute is clear on its face or Congress has spoken, we don’t care what the agency says
-If the statute is unclear or ambiguous, the agency’s interpretation deserves deference
What sources of law do we look at whether it is a step 1 or step 2 case?
-Step 1: Traditional tools of statutory construction: text of the statute, inferences from other provisions of the statute
or other statutes, canons of statutory construction, dictionary definitions, and legislative history (LH is controversial)
-Step 2: Whether the agency construction is within the discretion created by the ambiguity identified in step 1
-Courts have acknowledged the overlap between Chevron step 2 and the arbitrary and capricious standard
-Chevron step 2 focuses on the agency’s interpretation of its power, while arbitrary and capricious standard focuses
on the agency’s process of implementing that interpretation
Alliance for Community Media v. FCC
-Five separate rules from the FCC’s order, so five separate Chevron analyses
-Key provision of Act dealt with Local Franchising Authorities (LFAs) authority to issue or not issue new cable
franchises: franchising authorities “may not reasonably refuse to award an additional competitive franchise”
-Court says that the term “unreasonable” is inherently ambiguous, so not a Step1 case
-The terms “reasonable” and “unreasonable” opened up the “free range of agency discretion”
-Court addresses each of the specific rules under Chevron step 2 analysis (see breakdown in text)
D. Review of Statutory Interpretation under Chevron Alternatives
-Chevron continues to be important in determining whether agencies are entitled to deference, but in recent years the
Supreme Court has added another preliminary step to determine whether Chevron applies at all (Chevron step zero)
-Before Chevron, the cases concerning judicial review of agency statutory interpretation were Hearst and Skidmore
-In Hearst, issue was whether newspaper publishers had committed an ULP by refusing to bargain with newsboys
1) Pure questions of law can be resolved w/o any consideration of the facts (no deference owed)
2) Mixed question of law & fact – some deference due to expert agency
2 part test: Does it have (1) warrant in the record and (2) reasonable basis in law
-In Skidmore, the issue was whether employees could claim OT pay under FLSA
-Court held that the reviewing court had not given sufficient weight to the Administrator’s views:
ADMINISTRATIVE LAW – GLICKSMAN – FALL 2010
“The weight of the agency’s judgment in a particular case will depend upon
[1] the thoroughness evident in its consideration,
[2] the validity of its reasoning,
[3] its consistency with earlier and later pronouncements, and
[4] all those factors which give it power to persuade, if lacking power to control.”
-In Christensen, the Court found that “interpretations contained in policy statements, agency manuals, and
enforcement guidelines” which lack the force of law are not entitled to Chevron deference
- “Does the agency action have the force of law?” If no, Chevron does not apply
They’re entitled to “respect” under Skidmore, but only if they have the “power to persuade”
-In Mead, the Court said the degree of judicial deference depends on the context
-The factors relevant to deciding how much deference is due include
(1) the degree of the agency’s care,
(2) its consistency, formality, and relative expertness, and
(3) the persuasiveness of the agency’s position.
-An agency’s statutory interpretation qualifies for Chevron deference when it appears that
(1) Congress delegated authority to the agency generally to make rules carrying the force of law, and
(2) The agency interpretation claiming deference was promulgated in the exercise of that authority.
-Such a delegation may be shown in different ways, such as statutory power to engage in adjudication or notice-andcomment rulemaking, “or by some other indication of a comparable congressional intent.”
-Rulemaking is the best example of authority to make rules carrying the force of law
-Formal adjudication is another example of authority that carries the force of law
-In Barnhart v. Walton, the Court interprets Mead as saying that whether Chevron deference applies depends
upon “the interpretive method used and the nature of the question at issue”
-Factors:
(1) the interstitial nature of the legal question
(2) the related expertise of the agency
(3) the importance of the question to the administration of the statute
(4) the complexity of that administration
(5) the careful consideration the agency has given the question over a long period of time
-Does Barnhart merge Mead and Skidmore into a single inquiry?
-Chevron says de novo review if the statute is clear, deference if statute is ambiguous
-Cardoza-Fonseca says de novo review on pure questions of statutory interpretation, even if the statute is ambiguous
-In Long Island Care at Home, the Court identified an “ultimate question”:
“Whether Congress would have identified, and expected, courts to treat an agency’s rule, regulation,
application of a statute, or other agency action as within its delegation to the agency of gap filling authority.”
-A court assumes that Congress intended it to defer to the agency’s determination where:
(1) an agency rule sets forth important individual rights and duties,
(2) the agency focuses fully and directly upon the issue,
(3) where the agency uses full notice-and-comment procedures to promulgate a rule,
(4) where the resulting rule falls within the statutory grant of authority, and
(5) where the rule itself is reasonable
ADMINISTRATIVE LAW – GLICKSMAN – FALL 2010
Step 2: Functions
Step 3: Officer
Except
Purely
Legislative
E. Arbitrary and Capricious Review
-Comes from APA 706(2)(A), which directs courts to “hold unlawful and set aside agency action, findings, and
conclusions found to be…arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.”
-Arbitrary and capricious test usually viewed as a deferential test
-Several important decisions involving how Courts should use the arbitrary and capricious test:
-Overton Park: court must “consider [1] whether the decision was based on a consideration of the relevant
factors, and [2] whether there has been a clear error of judgment.”
-Baltimore Gas & Elec. Co.: court must determine “whether [the agency] has [1] considered the relevant
factors and [2] articulated a rational connection between the facts found and the choice made”
-In the State Farm case, the Court took a more aggressive posture toward review
-Four part State Farm inquiry:
(1) Did the agency rely on improper factors which Congress didn’t intend it to consider?
(2) Did the agency fail to consider an important aspect of the problem?
(3) Does the explanation for the decision run counter to the evidence before the agency?
ADMINISTRATIVE LAW – GLICKSMAN – FALL 2010
(4) Does the explanation for the decision so implausible that it could not be ascribed to a difference in
view or the product of agency expertise?
-If you are the agency, you want to start w/ Baltimore Electric and avoid Overton Park
-If you are challenging the agency, you want to start w/ Overton Park and avoid Baltimore Electric
Bluewater Network v. EPA
-EPA set emissions standards for snowmobile manufacturers; environmental groups challenged the standards
-Court said that 70% standard for application of advance technologies was arbitrary and capricious b/c EPA offered
no reasoning for ending older products or decision to go with 70%
-Court said that EPA’s decision not to adopt catalyst technology standards was not arbitrary and capricious because
EPA relied on relevant data (from jet skis) to predict expected emissions and based its reasoning on this data review
III. LEGISLATIVE RULEMAKING
A. Rulemaking Authority
-APA defines rulemaking as the “agency process for formulating, amending, or repealing a rule”
-Agency rules and regulations are binding
-If agency establishes a rule, the parties may not re-litigate the underlying validity of the rule; the time to attack the
rule is during the process when it is being adopted
-Agencies have no inherent authority to make rules; it must come from a statute
-Some statutes give general grants of authority to adopt regulations (i.e. CWA §501)
Under this kind of delegation, courts tend to be more deferential (see Nat’l Petroleum Refiners Ass’n)
-Other statutes give more specific and confined delegations of authority to adopt regulations
-Rulemaking procedures give agencies “resource-saving flexibility” and create greater fairness and certainty
-Congress is reluctant to authorize agencies to make rules w/ retroactive effects because (1) authorizing retroactive
rules creates due process problems, and (2) the APA requires that agency regulations must have “future effect”
-Courts interpret statutes narrowly when agency’s regulations have potential retroactive authority to avoid finding
that agency regulations would violate due process
-Issues concerning retroactivity often revolve around whether rules have primary or secondary retroactive effects
-Secondary retroactive effects do not make previous action unlawful, but affect the consequences of past activity
(i.e. investments that will no longer be profitable b/c of tax code changes)
-Primary has more obvious due process implications; Courts unlikely to uphold primary retroactive effects
-Court are much more willing to apply rules that have retroactive secondary effects (reasonability test)
-The question in Spencer County is whether the rule established had primary or secondary retroactive effect because
the rules changed regarding construction states dates (an example of secondary activity)
-Spencer permits secondary as opposed to primary retroactive effects
-In American Hospital, Court refused to find that NLRB’s choice to use a rule instead of adjudicatory procedures
was arbitrary and capricious because the hospitals were similar enough to justify a rule
-In SEC v. Chenery (Chenery II), the Court adopted a balancing test for secondary retroactive effects:
If the mischief of producing a result which is contrary to a statutory design or legal/equitable
principles is greater than the ill effect of the retroactive application of a new standard, it is not the
type of retroactivity which is condemned by law.
ADMINISTRATIVE LAW – GLICKSMAN – FALL 2010
B. Initiation of Rulemaking
-The agency’s agenda may be driven by:
1) Pressure from the President
2) Top policy-making officials (i.e. EPA Administrator) or other agency officials
3) Congress
4) Members of the public
-Congress may prompt agency action through the adoption of legislation establishing a regulatory program and
either authorizing or requiring agency action
-When an agency fails to act, Congress may also hold hearings or enact statutory directives and deadlines
-Many organic statutes allow for attempts by private citizens or interest groups to induce agencies to begin
rulemaking proceedings; APA §553(e) gives all “interested persons” the right to petition agencies to issue a rule
-All “final actions” such as a denial of petition for rulemaking, are subject to judicial review
-Denial of a rulemaking petition is a reviewable final action; however, the agency’s failure to respond may or may
not be reviewable (“unlawfully withheld” or “unreasonably delayed”)
-In the TRAC case, the D.C. Circuit identified six factors to consider in determining whether review is available
based on unreasonable delay:
1) The time agencies take to make decisions must be governed by a “rule of reason”
2) Where Congress has provided a timetable or other indication of the speed with which it expects the
agency to proceed in the enabling statute, that statutory scheme may supply content for this rule of reason
3) Delays that might be reasonable in the sphere of economic regulation are less tolerable when human
health and welfare are at stake
4) The court should consider the effect of expediting delayed action on agency activities of a higher or
competing priority
5) The court should also take into account the nature and extent of the interests prejudiced by delay
6) The court need not “find any impropriety lurking behind agency lassitude in order to hold that agency
action is ‘unreasonably delayed’”
-In Heckler v. Cheney, the Court held that an agency’s decision not to enforce a statute or regulation is
committed to agency discretion and is not reviewable (under APA §701(a)(2))
-The denial of a petition for rulemaking is susceptible to judicial review (Massachusetts v. EPA)
-The standard of review is arbitrary and capricious (under §706)
-Even in Massachusetts v. EPA, regulation was not automatic (judgment of Administrator), but Court found that
agency’s refusal to regulate based on statutory text amounted to arbitrary and capricious rulemaking
-If interest group prevails on the merits of challenging a refusal to promulgate a rule, Court is very unlikely to order
EPA to initiate a rulemaking procedure; instead it will ask EPA to “do-over” and rethink the question
C. Types of Rulemaking Procedures
-The core rulemaking provision of the APA is §553
-All agencies must comply with the APA rulemaking procedures unless there is an applicable exemption under the
APA itself or under the agency’s organic statute
Possible sources of rulemaking procedures:
ADMINISTRATIVE LAW – GLICKSMAN – FALL 2010
-The APA (default)
-The Due Process Clause
-The agency’s own organic statutes
-The agency’s own regulations
-Agency organic statutes can replace APA statutes with weaker ones (but they usually require more than APA)
-Agency regulations cannot authorize weaker procedures than the APA or the agency’s organic statute
-The DP Clause overrides any other procedural rules if they are not sufficient to meet constitutional requirements
Except High Level?
De
StepThoroughness
Zero: Does Chevron
Power to Persuade Not Lawmaking; Apply
Cardoza-Fonseca; Negu
Step One:
Clear /Ambiguous
-The first question is: Adjudication or Rulemaking?
-Adjudication if and only if it resulted in an “order” (otherwise, it’s a rule so Rulemaking)
-An adjudication involves a resolution of a past problem, while a rule involves the implementation of a future effect
-In Florida East Coast Ry. Co., the Court distinguished “proceedings for the purpose of promulgating policy-type
rules or standards…and proceedings designed to adjudicate disputed facts in particular cases”
-The second question is: Do any of the APA procedures for rulemaking apply?
-§553 has some exceptions:
(a) does not apply to
(1) a military or foreign affairs function, or
(2) a matter relating to agency management or personnel or to public property, loans,
grants, benefits, or contracts
(b) does not apply to
ADMINISTRATIVE LAW – GLICKSMAN – FALL 2010
(1) interpretive rules, general statements of policy, or rules of agency organization,
procedure or practice, or
(2) when agency for good cause finds (and incorporates that finding into a statement) that notice
and public procedure thereon are impracticable, unnecessary, or contrary to the public interest
-§553 provisions apply to both the notice provision and comment obligation
-Courts tend to construe the “good cause” exception narrowly, and are especially suspicious of agency invocation of
the good cause exception if the delay appears to have been caused by the agency itself (Duquesne Light Co.)
-§552(a): “Each agency shall separately state and currently publish in the Federal Register for the guidance
of the public—
…(D) substantive rules of general applicability adopted as authorized by law, and statements of
general policy or interpretation of general applicability formulated and adopted by the agency”
-Unless a person has “actual and timely notice” of the terms of a regulation, he “may not be required to resort to, or
be adversely affected by, a matter required to be published in the Federal Register and not so published.”
§553(d): The required publication or service of a substantive rule shall be made not less than 30 days before its
effective date, except
(1) a substantive rule which grants or recognizes an exemption or relieves a restriction,
(2) interpretive rules and statements of policy, or
(3) as otherwise provided by the agency for good cause found and published within the rule
-§553(b): General notice of proposed rulemaking shall be published in the Federal Register, unless persons
subject thereto are named and either personally served or otherwise have actual notice thereof.
The notice shall include—
(1) a statement of the time, place, and nature of public rulemaking proceedings,
(2) reference to the legal authority under which the rule is proposed, and
(3) either the terms or substance of the proposed rule or a description of the subjects and issues involved
-§553(c): “After notice required by this section, the agency shall give interested persons an opportunity to
participate in the rulemaking through a submission of written data, views, or arguments with or without
opportunity for oral presentation. After consideration…the agency shall incorporate in the rules adopted a
concise general statement of their basis and purpose. When rules are required by statute to be made on the
record after opportunity for an agency hearing, sections 556 and 557 of this title shall apply…”
-In U.S. v. Allegheny-Ludlum and U.S. v. FL East Coast Ry., the court rejected arguments that statutory provisions
requiring the ICC to set certain rates “after hearing” triggered formal rulemaking requirements because the
provisions did not include language specifying that the hearings must be “on the record”
-Vermont Yankee held that “absent constitutional constraints or extremely compelling circumstances the
agencies should be free to fashion their own rules of procedure and to pursue methods of inquiry capable of
permitting them to discharge their multitudinous duties” (what are “extremely compelling circumstances”?)
-Agencies can go beyond requirements of the APA and their organic statute, but courts cannot force them to do so
-It is not uncommon for Congress to provide explicitly in an agency’s organic statute that the substantial evidence
standard of review applies, particularly in association with “hybrid” rulemaking procedures
ADMINISTRATIVE LAW – GLICKSMAN – FALL 2010
-Courts are generally unlikely to hold that due process requires that agencies do more than §553
-More often than not, the substantial evidence test applies to adjudication, and so the presence of a provision
requiring that judicial review of the agency action be governed by the substantial evidence standard might be argued
to indicate an adjudication and not rulemaking (but that alone probably not enough to overcome Vermont Yankee)
D. Elements of Notice and Comment
-Three basic components of rulemaking under §553
1) Must give notice
2) Must give an opportunity to participate in the rulemaking
3) Must incorporate a concise general statement of basis and purpose
-Notice under §553(b) must be sufficient to fairly apprise interested persons of the issues involved
-The Courts have elaborated by providing three related purposes to notice (p348):
1) Notice improves the quality of agency rulemaking by ensuring that agency regulations will be “tested by
exposure to diverse public comment”
2) Notice and the opportunity to be heard are an essential component of fairness
3) Notice enhances the quality of judicial review
-Three steps for complying with APA’s procedures – §553(b) & (c):
1) Agency must publish a “general notice of proposed rulemaking” in the Federal Register, unless
persons subject to the rule are named and either personally served or otherwise have actual notice
2) After providing notice pursuant to 553(b), the agency must provide to the interested persons “an
opportunity to participate in the rulemaking through submission of written data, views, or
arguments with or without opportunity for oral presentation”
3) After the relevant matter is presented, the agency shall incorporate in the rules adopted “a concise
general statement of their basis and purpose”
§553(b) specifies the minimum content of a notice of proposed rulemaking:
(1) A statement of the time, place, and nature of the rulemaking proceedings,
(2) A reference to the legal authority upon which the agency is relying to adopt the rule, and
(3) Either the terms or substance of the proposed rule or a description of the subjects and issues involved
-The notice and comment process is not an “on the record” procedure; the agency may take into account other
outside information besides solicited comments
-However, the courts have held that agencies are required to take those comments into account
-Violation of 553(b) when agencies fail to make available to the public info upon which they base proposed rules
-A “concise general statement of basis and purpose”:
-Typically in the form of a preamble which explains the agency’s justification for the rule and summarizes the
agency’s response to comments
-Statement of basis and purpose must be “sufficiently detailed and informative to allow a searching judicial scrutiny
of how and why the regulations were actually adopted” and to allow a court to determine whether agency’s action
was arbitrary and capricious. (Spencer County)
Did the agency fail to consider an important factor?
Did the agency rely on factors which Congress did not intend?
-The statement of basis and purpose turns significantly on the amount and character of the comments – if there
weren’t many comments, statement will be simple, if there were many comments, statement will likely be elaborate
ADMINISTRATIVE LAW – GLICKSMAN – FALL 2010
-In the 1970s, Courts interpreted 553(b) and (c) of the APA to mean:
1) Agencies must develop a rulemaking record that includes the public comments
2) Agencies must explain how it reacted to significant public comments
-These are often referred to as the “paper hearing” requirements
-Some courts went further and imposed procedural requirements on agencies that were broader than the
requirements of the APA; SC put an end to this in Vermont Yankee (but not paper hearing requirements)
-Agency can rely on information after the close of the notice and comment period if it is particularly important
and/or pertinent to the newly available information
-The most problematic cases involving agency reliance on newly available information involve neutral third party
sources of information (as opposed to more clearly biased sources that have a stake in the outcome)
-Agency has to say, in its statement of basis and purpose, where the information comes from that is relying on
-Agency has no obligation to respond to an issue that was not a subject of comment, but is raised by the commenting
individual or organization later after the announced final rule
-Some organic statutes impose more stringent procedures than the APA requires for notice and comment
rulemaking, but less than formal rulemaking (“hybrid” procedures)
-The CAA is one of these hybrid procedures (see Northeast Maryland Waste Disposal Authority)
-When agency violates APA notice and comment requirements, what remedy is appropriate?
-Two choices:
1) Vacate the rule and remand the rule for reconsideration
2) Remand the rule without vacating it (rule remains in effect pending agency fix)
-Court in Northeast MD Waste Disposal Authority case identifies reasons for vacate/not vacate:
1) Whether the error is easily cured
2) Whether invalidation of the rule would be disruptive of the entire statutory program
-A third option is allowing an agency to publish the information it should have published in the first place and
permitting comment on that new information (courts rarely choose this option)
E. Special Problems of Notice and Comment Rulemaking
Does agency have to go through a 2d round of notice & comment if it changes its approach after comment period?
-If final rule is “logical outgrowth” of the previous rule, agency need not redo the N & C process (South Terminal)
-This depends upon whether the final rule differs so much from the proposed rule that parties were not on notice so
as to be able to participate in the comment process and protect their interest
-When determining if the notice provided interested parties a fair opportunity to participate, the test is whether the
initial notice would fairly apprise interested persons of the subjects and issues on the table (Chocolate Mfrs.)
-That depends on how well the initial notice serves the policies underlying the notice requirement:
1) Improving agency decisionmaking
2) Treating interested persons fairly
3) Facilitating judicial review
Do ex parte communications between agency officials and members of the public violate certain requirements of
notice and comment procedures?
-An ex parte communication is “an oral or written communication that is not on the public record with respect to
which reasonable prior notice is not given”
-An agency’s reliance on ex parte communications creates problems:
ADMINISTRATIVE LAW – GLICKSMAN – FALL 2010
1) Interested persons who lacked an opportunity to respond may be treated unfairly
2) Agency does not have the benefit of critical comment on the information
3) Quality of judicial review may suffer because information is not included in the record
Adverse consequences of ex parte communications:
1) Increased risk of agency capture/reliance on irrelevant factors
2) Interference with judicial review
3) Deprivation of opportunity to comment
-The APA explicitly limits ex parte communication in adjudication and formal rulemaking, but says nothing about
ex parte communications in the context of notice and comment rulemaking
-Ex Parte communications prohibited in rulemaking proceedings involving “conflicting claims to a valuable
privilege” (Sangamon Valley)
-Ex parte communications tend to produce a hidden record and are inconsistent with “fundamental notions of
fairness implicit in due process” (HBO v. FCC)
-In the Viacom case, the court limited the holding of HBO to cases involving competing claims for a specific
valuable privilege “under circumstances similar to adjudication”
Sierra Club v. Costle
-Ex parte communications can benefit decisions rendered in rulemaking proceedings
(1) Promotes accessibility of agencies to the public
(2) Allows agencies to drum up public support for rules
(3) Allows agencies to help regulated entities plan for compliance, reducing need for enforcement
(4) Facilitates flow of info to the agency, providing stronger factual and policy foundation for regulations
-After Sierra Club, if an agency gets ex parte communications after the end of the comment period and wants to rely
on the communications, it must put them in the record and re-open the comment period
-The courts treat ex parte communications differently based on their (1) source, (2) content, and (3) timing
-Ex parte communications subject to fewer restrictions in informal rulemaking than they are in adjudication
F. Hybrid Rulemaking
-Hybrid rulemaking procedures are procedures that are more extensive than notice and comment procedures but
less extensive than formal rulemaking procedures
-They can come from:
1) Due Process clause
3) Judicial requirements
2) Organic statutes (the most prevalent)
4) Agency regulations
-Due Process rarely, if ever, requires trial type processes for rulemakings
-Judicial requirements are limited and much less prevalent now because of Vermont Yankee
1) Hybrid procedures can enhance participation in important rulemaking
2) Hybrid procedures can confirm agency discretion
3) Hybrid procedures force agencies to develop and more extensive rulemaking record
-EPA organic statutes contain a number of hybrid rulemaking procedures (i.e. CAA, TSCA, SDWA, RCRA)
G. Regulatory Impact Analysis
-There are several regulatory impact statutes which require agencies to consider other factors in adopting rules
ADMINISTRATIVE LAW – GLICKSMAN – FALL 2010
-The most prominent is the National Environmental Policy Act (NEPA), which forces agencies to take into account
environmental factors and prepare an impact statement to accompany actions with significant environmental effects
-Other possible regulatory values include: federalism, protection of private property rights, energy security, etc.
-The most prominent and controversial, however, is consideration of economic costs and effects
-Executive Order 12,866 requires agencies to do a cost-benefit analysis
-Characteristics of regulatory impact analysis:
1) What kinds of agency action “trigger” a particular regulatory impact analysis?
Usually depends upon whether a proposed rule is “significant” based on impact
2) Analytical requirements: usually some kind of impact statement and some requirement of
consideration of whether the proposed rule is really justified in light of that impact
3) Consultation requirements: many of the regulatory impact assessments require agencies conducting
rulemakings to provide opportunities for input beyond APA reqs
4) Substantive requirements: most regulatory impact analyses are procedural, but some have substantive
bite (i.e. EO 12,866 which requires agency to choose more cost-effective and least costly alternative)
5) Judicial review: clear when the statute or order indicates that there is no opportunity for judicial review,
but in some cases the answer is unclear
IV. POLICY MAKING BY ADJUDICATION
A. Constraints on Using Adjudication to Make Policy
-Agencies engaged in adjudication do it on a case by case basis (NLRB) or engage in “mass adjudication” (SSA)
-Advantages to making policy through adjudication (p431):
1) Flexible
3) Political insulation
2) Immediate
4) Opportunity to obtain oral testimony
-Disadvantages:
1) Potential unfairness (i.e. issues of retroactivity, disparate resolutions)
2) Lack of access/information
-Agencies have no inherent authority to adjudicate anything; the authority must be delegated to the agency through
the organic statute (this authority is often subject to limitations)
-The APA can also limit agency authority to adjudicate through its definitions of rulemaking and adjudication and
the ban on “arbitrary and capricious” rulemaking
-The Due Process clause can also limit agency authority to adjudicate
§551:
(7) “adjudication” – agency process for the formulation of an order
(6) “order” – the whole or a part of a final disposition, whether affirmative, negative, injunctive, or
declaratory in form, of an agency in a matter other than rule making but including licensing
-Just because there is an adoption of a broad rule does not mean it’s not adjudication
-Agency adjudicates if it makes law as a court would, as opposed to how Congress would (A.P.W. Prods. Co.)
Wyman-Gordon – two issues:
(1) whether Excelsior Underwear is valid, and (2) if Excelsior Underwear is not valid, is Wyman-Gordon valid?
Issue
Excelsior Underwear valid?
Wyman-Gordon valid w/o
Excelsior Underwear?
Result
Plurality (4)
No: Rule b/c Prospective
Yes: Reasoning Clear
Wyman-Gordon Valid
ADMINISTRATIVE LAW – GLICKSMAN – FALL 2010
Concurrence (3)
Yes: Reasonable
No: Insufficient Explanation
Wyman-Gordon Valid
Dissent (2)
No: Rule b/c Prospective
No: Insufficient Explanation
Wyman-Gordon Invalid
Total
No: 6-3
No: 5-4
Wyman-Gordon Valid (7-2)
-The key to Wyman is: the NLRB cannot promulgate a result with solely prospective effect
-Rely on Londoner and Bi-Metallic and compare the characteristics of rulemaking vs. adjudication to determine
whether the method the agency chose was arbitrary and capricious
-Unless the organic statute restricts the agency’s authority to use adjudication, the choice between rulemaking and
adjudication “lies primarily within the informed discretion” of the agency (Bell Aerospace)
-Reasons to use adjudication instead of rulemaking:
1) Some issues are unforeseeable (only come up in the context of a dispute)
2) Agency may not have had sufficient experience with a particular problem
3) Problem may be so specialized and varying in nature as to be impossible to capture within the
boundaries of a general rule
B. The Problem of Retroactivity
-Retroactivity disfavored in the law b/c it seems unfair to change the rules for conduct that has already occurred;
various constitutional provisions reflect an anti-retroactivity principle (i.e. Ex Post Facto Clause)
-As long as retroactive application of a statute is rationally related to a legitimate legislative purpose, due process is
satisfied and the courts should not interfere
-There is a presumption against retroactivity, and in the absence of explicit language providing for retroactivity,
the issue is a matter of statutory interpretation; the courts will look to statutory text and context to resolve the issue
-The presumption against retroactive legislation extend with even greater force to retroactive rulemaking by
administrative agencies, which requires an explicit authorization in the agency’s organic statute
-However, courts have been more tolerant of retroactivity in the context of adjudication
-Adjudication by courts is inherently retroactive – retroactivity in adjudication is the rule
-Chenery balance test: “If the mischief of producing a result contrary to statutory design or to legal and
equitable principles is greater than the ill effect of the retroactive application of a new standard, it is not the
type of retroactivity which is condemned by law”
-Court established a new test in Retail, Wholesale:
(1) Whether the particular case is one of first impression
(2) Whether the new rule represents an abrupt departure from well-established practice or merely
attempts to fill a void in an unsettled area of law
(3) The extent to which the party against whom the new rule is applied relied on the former rule
(4) The degree of the burden which a retroactive order imposes on a party
(5) The statutory interest in applying a new rule despite party’s reliance on old standard
-In which case is retroactive application more objectionable? Cases of second impression
-If an agency is going to allow a new policy or approach in adjudication, it must apply that order retroactively to the
parties, because if it applied it only prospectively, then it would be rulemaking (Wyman-Gordon)
ADMINISTRATIVE LAW – GLICKSMAN – FALL 2010
-In a case of second impression, that obstacle does not exist, so retroactive application is more objectionable
-Additionally, in a case of second impression the rule has already been adopted so the adverse party in case 2 lacks
the opportunity to persuade the agency not to adopt the change in policy
C. APA and Non-APA Adjudication
-APA §554 spells out the procedures for formal adjudication but says very little about informal adjudication (so we
need to look to agency’s organic statutes, agency regulations, and due process clause)
-The APA trigger for formal adjudication: §554(a)
-§554(a) requires formal adjudication under §§554, 556, and 557 in every case of adjudication required by statute to
be determined on the record after opportunity for an agency hearing
-The applicability of formal adjudicatory procedures under this provision depends upon:
1) whether there is an adjudication
2) whether the organic statute requires that a hearing be conducted
3) whether the organic statute requires that the hearing be “on the record” (or similar)
4) whether an exception applies (i.e. §554(a)(6))
-Courts have interpreted the triggering language of 554(a) more expansively than the triggering language of 553(c)
-Some courts have treated a statutory reference to substantial evidence review as evidence of congressional intent
that formal adjudication applies (Indus. Union Dep’t)
-The presumption of Seacoast was abandoned in City of West Chicago – even if a statute requires a hearing, without
the magic words – “on the record” – Congress must clearly indicate its intent to trigger formal adjudication
-In Chemical Waste Mgmt. the D.C. Circuit treated the interpretation of hearing requirements in the organic statutes
as subject to the two-part Chevron test – if the statute is not clear and the agency’s construction is reasonable, then
deference to the agency’s determination is required
-Key procedures for formal adjudication:
1) Notice – person notice of the hearing to affected parties under §554(b)
2) Hearing – must be conducted “on the record”
-§556(e): record developed during the hearing is the exclusive record for decision basis
-§557(d): ex parte communications are strictly limited
-§556(d): parties have broad participatory rights to present evidence and cross-examine
-§556(d): the proponent of an order bears the burden of proof
3) Decision: final decisions must include findings and conclusions w/ supporting reasons
-§557(c) allows parties to submit proposed findings of fact and conclusions
-Final decisions must include findings and conclusions with supporting reasons
4) ALJs: formal adjudications are conducted by administrative law judges
-§556(c) outlines ALJ powers
-§557(b) authorizes de novo review by the agency
-ALJs have a fair deal of protection and independence (not subject to removal by their agency)
-ALJs can issue subpoenas, rule on the admissibility of evidence
-The conclusion of the ALJ is either (1) a “recommended” decision that becomes final only if the agency adopts it
OR (2) a decision is presumptively valid and becomes final if the agency declines to review it
-The agency can solicit new evidence or call for an entirely new hearing
Drukker Communications, Inc. v. NLRB
ADMINISTRATIVE LAW – GLICKSMAN – FALL 2010
-The issue was whether five trucking employees should have been entitled to vote or not; Drukker wanted to
subpoena Abrams, who was at the settlement hearing
-Typically if an ALJ says that he won’t issue a subpoena, the court will defer
-Here, however, the court overturned the ALJ’s decision to not allow the subpoena because it found that the
testimony would be relevant, there would be no negative effect on the public interest, there would be no detrimental
effect on agency processes, and the explanation was highly plausible
-The court’s need for the evidence outweighed any possible harm to the public interest
-Informal adjudication is really defined by exclusion – if the process doesn’t qualify as rulemaking or formal
adjudication, it is necessarily informal adjudication
1) Is it rulemaking or adjudication? (as defined in APA)
2a) If rulemaking, look to §553(c)
2b) If adjudication, look to §554(a) – formal under §556-57, if not then informal
-Requirements for informal adjudication come from organic statutes and agency regulations (and maybe DP clause)
-If there are no explicit requirements in the organic statutes or agency regulations, agencies have a broad range, and
courts can’t second guess them because of restrictions on judicially-created procedures from Vermont Yankee
-A determination in the first proceeding should not be conclusive in the second proceeding if there are different
levels of procedural thoroughness and formality (Van Leer)
-Key procedures for informal adjudication
1) Notice: after-the-fact notice required under APA §555(e)
2) Hearings
-Usually result of agency investigation (i.e. NLRB election investigation)
-Hearing officer, not ALJ, presides
-If evidentiary hearing is held, it resembles formal APA adjudication
3) Decision
-No requirement of specific findings of material fact
-No recommended decision by hearing officer
4) Role of hearing officers
-APA §554(d) separation of functions provisions not applicable
-Not afforded same independence from agencies as ALJs
D. Ex Parte Communications
-Courts are generally tolerant of ex parte communications in rulemaking, but more strictly limited in adjudications
-The question is whether a particular communication could affect an agency’s decision on the merits
-Ex parte communications are defined at APA §551(14) as “an oral or written communication not on the public
record with respect to which reasonable prior notice to all parties is not given, but it shall not include
requests for status reports on any matter or proceeding covered by this subchapter”
-APA restrictions can be supplemented by organic statutes or agency regulations
-the restrictions on ex parte communications don’t apply to settlement negotiations
-The APA deals with ex parte communications in two different provisions (outside of definition):
1) §554(d):
-§554(d) generally prohibits the employee who presides at a formal adjudication from:
i) Consulting a person or party on a fact in issue, unless all parties are provided notice and an
opportunity to participate
ADMINISTRATIVE LAW – GLICKSMAN – FALL 2010
ii) Being responsible or subject to the supervision or direction of an employee engaged in the
performance of investigative or prosecutorial functions for an agency
-§554(d) exceptions:
i) Ex parte matters “authorized by law” (i.e. permitted by agency’s organic statute)
ii) Only applies to consultations on a “fact in issue”
iii) Doesn’t apply to proceedings such as applications for initial licenses and utility rates, etc.
2) §557(d):
-applies exclusively to communications between persons inside and outside the agency
-prohibition on any “interested person” outside the agency making an ex parte communication relevant to a
matter in the proceeding to any agency employee in the adjudicatory process
-prohibition on any agency employee involved in the adjudicatory process making an ex parte
communication relevant to a matter in the proceeding to any “interested person” outside agency
-§554 only applies to formal adjudications, while §557(d) applies to formal rulemaking
-§554(d) prohibits only EPCs respecting “facts in issue”, §557(d) covers EPCs on any issue “relevant to the merits”
-§554(d)’s separation of functions provisions limit EPCs within the agency, while §557(d)(1) applies only to
contacts between ALJs and persons outside the agency
-Remedies for improper EPCs are spelled out in §557(d) to a greater extent than in §554(d)
-PATCO interpreted “interested person” to mean someone who has an interest greater than that of the general public
Remedies for improper EPCs under the APA:
-If ex parte communication discovered before decision is rendered, §557(d)(1)(C) requires that it be added to record
-ALJs can also require that the party who made the ex parte communication submit an argument as to why their case
should not be dismissed (decisions in proceedings involving EP communications voidable but not necessarily void)
-Under §557(d)(1)(D), the agency receiving the ex parte communication should deny the claims of the party making
them only if that sanction is “consistent with the interests of justice and the policy of the underlying statutes”
-Judicial review of the agency’s decision based on the allegedly improper ex parte communications
PATCO factors:
1) The gravity of the ex parte communication
2) Whether the communication may have influenced the decision
3) Whether the party making the communication benefited from the decision
4) Whether opposing parties knew of the communication and had an opportunity to rebut
5) Whether vacation and remand of the decision would serve a useful purpose
V. PROBLEMS OF MASS ADJUDICATION
A. Adjudicatory Bureaucracy
-The adjudicatory bureaucracy (like SSA) faces questions and issues regarding the Due Process clause
-SSA administers two different programs:
1) Old Age, Survivors, and Disability Insurance (OASDI) – traditional “social security”
2) Supplemental Security Income (SSI) – need based (claimant’s income level)
-The Social Security Act defines disability as “the inability to engage in any substantive gainful activity by reason of
any medically determinable physical or mental impairment which can be expected to result in death or which has
lasted or can be expected to last for a continuous period of not less than 12 months.”
-Major disability issues:
1) whether an impairment exists
2) whether it can be expected to result in death or last at least 12 months
ADMINISTRATIVE LAW – GLICKSMAN – FALL 2010
3) whether it is severe enough to prevent a claimant from returning to his or her past work
4) what other work the claimant is still able to perform
5) whether there are jobs that exist in the national economy that a person with the claimant’s impairments
and vocational background (age, education, experience) could perform
Follow Statute
Go to 554
Step Two: Defer if
Yes
Reasonable
Adjudica
tionApply
or
Lawmaking
Yes
Rulemaki
Chevron
ng?
Exceptio
Go to 553
n Apply?
Pure Q. of Law
A
(553(a) &
(b))
Publish in
Formal
FR (552);
Christensen
RMMead
553(d)
Barnhart
Triggered
Publish ? (553(c)) Go
NPRM
&
Several levels of decisionmaking and procedures:
(1) State “disability determination service” (DDS) funded by SSA and subject to its supervision
(553(b))
(2) Hearing before a federal ALJ, subject to review by SSA’s Appeals Council
(3) Judicial review in federal district court (subject to ordinary rights of appeal)
ADMINISTRATIVE LAW – GLICKSMAN – FALL 2010
-If initially denied by DDS, claimant may request reconsideration by state agency and may provide add’l evidence
-If DDS denies benefits on reconsider, claimant may request a de novo hearing before ALJ (formal, on the record)
-If claimant loses at ALJ hearing, he may file appeal with Appeals Council (de novo, on record from ALJ hearing)
-If Appeals Council denies review or denies evidence, judicial review available in District Court
-District Court determination may be appealed to Circuit Courts, and to Supreme Court on certiorari
B. Impact of Rules
-One way for SSA (or other agency) to cut down on its workload is to adopt regulations
-The idea is to address an issue that is likely to occur in a number of adjudications by issuing a regulation that will
take that issue off the table in subsequent adjudications
-The agency promulgates these regulations; they must be consistent with statutes and with DP
-In Storer Broadcasting Co., the Court upheld an FCC regulation and approved a kind of administrative summary
judgment, when “the undisputed facts establish a violation of a regulation”
-Agency may use rulemaking authority to determine issues that don’t require case-by-case consideration (Texaco)
- SSA has created medical-vocational “grids” – Court upheld the validity of the SSA grids in Heckler v. Campbell
-A claimant is entitled to findings on historic facts (individual capacities) but not on general facts (statistics)
-The grids cannot be used if the claimant has both exertional impairments and non-exertional impairments
Three issues concerning the use of rulemaking and related procedures:
1) What limits does the law place on regulations and similar processes?
2) Is it proper for agencies to rely on non-legislative rules to foreclose issues?
3) Under what circumstances is it appropriate for agencies to invoke the doctrine of official notice to
resolve factual issues in adjudications?
-The grids cannot automatically establish that there are jobs in the national economy when a claimant has severe
exertional and non-exertional impairments (Sykes, citing Burnham)
-There is, however, considerable variety among the courts of appeals regarding the scope of the limitation on the use
of the grids when a claimant has exertional and non-exertional impairments
-A regulation can substitute for notice and comment rulemaking if ALJ specifically relied upon it; SSA can rely on a
SSR if there is a “proper fit” between the facts of a given case and the way in which the ruling impacts the facts of
the case (Allen)
-When an agency decision rests on administrative notice of a certain fact, the party must be given the opportunity to
contest the applicability of that ruling - §556(e)
-In the face of criticism, the SSA abandoned its former policy of non-acquiescence
-Under its new approach, when a judicial decision reverses the SSA, it determines whether the decision invalidates
an agency regulation of other guidance document
-If so, the SSA will issue an Acquiescence Ruling providing guidance on how adjudicators within that circuit should
comply with the rule (see Sykes, Allen)
C. Due Process and the Problem of Mass Justice
-Due Process clause prohibits the government deprivation of “life, liberty, or property without due process of law”
-Liberty and property interests play a part in administrative law
Three questions in due process analysis:
ADMINISTRATIVE LAW – GLICKSMAN – FALL 2010
1) Whether agency has made the kind of decision that triggers procedural DP safeguards
2) Whether person alleging violation of due process rights has an interest that is protected by the DP Clause
3) If answer to the first two is yes, whether the procedures that agency used satisfy or violate due process
-Fact-based deprivations are likely to trigger due process issues (adjudication, see Londoner)
-Policy-based deprivations unlikely to trigger due process issues (rulemaking, see Bi-Metallic)
-In Goldberg v. Kelly, the Court rejected the traditional rights-privileges distinction and held that due process
guarantees must be afforded before the government is allowed to terminate welfare benefits
-Property interests now include more than traditional property “rights”
-Government benefits are “more like property than a gratuity”
-In Board of Regents v. Roth, the Court held that “to have a property interest in a benefit, a person clearly must have
more than an abstract need or desire for it. He must have a more than a unilateral expectation of it. He must, instead,
have a legitimate claim of entitlement to it.”
-Thus, a federal or state statute can create a “legitimate claim of entitlement”
-Roth also indicated that a person may have a property interest (and due process applies) in benefits that have
already been acquired and an agency is attempting to terminate, as opposed to acquiring benefits for the first time
-The next question is “Did the government use the correct procedures?” – were they sufficient?
-Due process requires “minimum procedural safeguards, adapted to the particular characteristics of welfare
recipients, and to the limited nature of the controversies to be resolved” (Goldberg)
-Goldberg held that:
1) Pre-deprivation hearing must be at a meaningful time and a meaningful manner
2) Recipient must have timely and adequate notice detailing the reasons for the proposed termination
3) Recipient must have opportunity to confront adverse witnesses and present arguments and evidence
4) Recipient must be allowed to retain an attorney, but not necessarily to have attorney at hearing
5) Case must be resolved by an impartial decisionmaker
6) Decisionmaker’s conclusion has to rest solely on the legal rules and evidence adduced at the hearing
7) The welfare recipient is entitled to a statement of reasons for the decision and a summary of the evidence
-The Court responded to criticism about the Goldberg factors with its decision in Mathews v. Eldridge
Mathews v. Eldridge
-The Court enunciated a test to govern the question of what kind of process is due:
1) The nature and importance of private interest that will be affected by the official action
2) The risk of an erroneous deprivation of such interest through the procedures used, and the probable
value, if any, of additional or substitute procedural safeguards
3) The Gvt.’s interest, including the function involved and the fiscal and administrative burdens, that the
additional or substitute procedural requirement would entail
-Court distinguished interest here (disability benefits) from the interest in Goldberg (welfare benefits) where the
recipient might face “brutal need” and found a low risk in erroneous deprivation of the interest (unlike Goldberg)
Mathews v. Eldridge test:
ADMINISTRATIVE LAW – GLICKSMAN – FALL 2010
No
No
Cu
N
rre
ot
ntl
D
y are adequate (Flatford)
-An absolute right to cross-examination
is is not required in benefits cases; interrogatories
En
a
Hearing Components:
Traditional Evidentiary Hearing bl
“Some Kind of Hearing” ga
Oral Hearing
e Opportunity to respond ge
May present evidence and call Witnesses
d Oral testimony limited, Limiteddscope
inmay be limited
Know evidence, Cross-Examine witnesses
Hearsay admissible, Cross-exam
SG
Right to counsel
May be denied counsel
A?
Decision on the record
Not absolute
Rulemaking
-Due process “demands impartiality on the part of those who function in judicial or quasi-judicial capacities”
(Schweiker)
-Presumption “of honesty and integrity in those serving as adjudicators” – the party claiming the bias has the burden
of rebutting that presumption (i.e. pecuniary interest, adjudicator has been the target of criticism by the party)
D. Protected Interests
-The interest question is separate from the procedural DP question
-Claimant must have legitimate claim of entitlement, not an abstract claim or desire
-Must be an independent source of law that creates this claim of entitlement (i.e. statutes)
-The Court has recognized at least three broad categories of benefits that may be property:
(1) Government employment, (2) Licenses and permits, and (3) Government benefits
-Unlike property interests, there’s no one single test for determining liberty interests
-Meyer v Nebraska denoted a number of potential liberty interests, including
“the right of the individual to contract, to engage in any of the common occupations of life, to acquire
useful knowledge, to marry, establish a home and bring up children, to worship God according to the
dictates of his conscience, and generally to enjoy those privileges long recognized…as essential to the
orderly pursuit of happiness by free men.”
-There are also a variety of possible liberty interests:
(1) Freedom of movement
(4) Stigma plus
(2) Bodily integrity
(5) Education
(3) Pursuit of a calling
-“Stigma plus” means that a loss of reputation alone is insufficient to trigger DP protections
ADMINISTRATIVE LAW – GLICKSMAN – FALL 2010
-Likely to be a liberty interest in elementary and secondary education, but not public higher ed
-Under the Mathews test, the Court considers:
(1) “the private interest that will be affected by the official action”
(2) “the risk of an erroneous deprivation of such interest through the procedures used, and the
probable value, if any, of additional or substitute procedural safeguards”
(3) “the Government’s interest, including the function involved and the fiscal and administrative
burdens that the additional or substitute procedural requirements would entail”
-If an interest doesn’t qualify, it doesn’t matter how important it is to the individual
-If the interest is the right kind of interest, the importance of the interest is relevant in determining whether the
procedures were sufficient under due process or not
-The more important a property or liberty is, the greater the loss suffered by the individual and the greater the need
for pre-termination hearings (the impact a deprivation will have on a person)
-Three key aspects of DP: notice, hearing, right to unbiased decision-maker
-The notice must be “meaningful” by sufficiently enabling the claimant to participate in the hearing
-Under Mullane, notice must be “reasonably calculated, under all the circumstances, to apprise interested
parties of the pendency of the action and afford them an opportunity to present their objections”
VI. INFORMAL AGENCY ACTION
A. Informal Agency Action
-Informal action can take the form of rules or adjudication decisions
-Legislative rules are rules that result from formal rulemaking or notice & comment rulemaking
-Nonlegislative rules are rules that fit the definition of a rule but were not promulgated through formal rulemaking
or notice & comment rulemaking
-Nonlegislative rules are exempt from §553 procedures under §553(b)(A), which applies to “interpretive rules,
general statements of policy, or rules of agency organization, procedure, or practice”
-Interpretive rules and policy statements are also exempt from publication timing requirements
-APA requires that non-legislative rules be published in the Federal Register to provide notice; if they are not, they
cannot be applied against a party who lacks actual notice of them
-Many IRS regulations are nonlegislative rules:
“Interpretive regulations” adopted pursuant to the general grant of 26 U.S.C. §7805(a)
“Temporary regulations” issued under good cause exemption in §553(b) of the APA
“Procedural regulations” exempt from notice and comment req’s under §553(b) of APA
“Revenue Rulings” provide the IRS’s interpretation of how the IRC applies to a particular set of facts
“Revenue Procedures” provide guidance and instruction concerning procedural matters
-Legislative rules are binding and have force of law and thus are entitled to Chevron deference
-Interpretive rules do not have the force of law and are not entitled to Chevron deference
-Taxpayer-specific guidance from IRS that doesn’t quite fit into informal rulemaking or adjudication:
-Private Letter Ruling: statement issued to a taxpayer by IRS advising the taxpayer how the IRS would interpret and
apply the tax laws to a specific set of facts (usually related to corp. reorg.)
-Determination Letter: applies principles and precedents previously announced by the IRS to a specific set of facts
ADMINISTRATIVE LAW – GLICKSMAN – FALL 2010
-Technical Advice Memoranda: express the IRS’s view on how the Code, IRS regulations, or judicial precedents
should apply to a specific set of facts
Boulez v. CIR
-Issue is whether an oral agreement between taxpayer and official of the IRS was valid
-IRS argued before D.C. Circuit that §7122 of IRC prohibits oral compromise agreements
-D.C. Circuit held that §7122 is ambiguous, so agency has discretion
-Secretary has spoken: Treas Reg 301.7122 requires that all offers of compromise be in writing
-Court holds that Secretary possesses the authority to “prescribe all needful rules and regulations for the
enforcement” of the IRC – the regulation was mandatory, not directive as Boulez claimed
-If the agency wants to adopt regulations that have the force of law, they must go through the Secretary
-Estoppel claims against the government subject to different rules than against private parties (Fed. Crop Ins. Corp.)
-Hierarchy of agency action for IRS:
Statute (greatest weight)
Legislative Regulation
Revenue Rulings
Revenue Procedures
Delegation Orders
Informal Adjudications of taxpayer deficiencies
Oral agreements (no weight whatsoever)
B. Nonlegislative Rules and Their Limits
-Nonlegislative rules meet the definition of a rule under §551(4) of the APA
-Not usually binding on the public (because they lack the force of law)
-Exempt from APA’s notice-and-comment rulemaking procedures
-But the agency issuing them must publish them, pursuant to §552(a)
-Sometimes agencies or parties defend their own noncompliance with rules on the grounds that they are
nonlegislative and therefore not binding
-Courts used to define legislative rules as those that did not have a “substantial impact”
But this definition not that effective since procedural rules can have substantial impact
-Other courts focused on the agency’s intent
A rule was legislative if Congress delegated legislative power to the agency and if the agency intended to
exercise that authority when it adopted the rule
-What courts do today is define each subcategory of nonlegislative rules separately:
1) Interpretative (or interpretive) rules
2) General statements of policy
3) Rules of agency organization, procedure, or practice
-Rules of agency organization, procedure, or practice are exempted “to ensure that agencies retain latitude in
organizing their internal operations” (Bowen)
- Batterton test: exemption for procedural rules “covers agency actions that do not themselves alter the rights or
interests of the parties, although it may alter the manner in which the parties present themselves…to the agency”
-Another test: Courts sometimes distinguish between rules that affect/govern primary conduct (substantive) and
rules that affect/govern secondary conduct (procedural)
ADMINISTRATIVE LAW – GLICKSMAN – FALL 2010
-Procedural rules may be binding on the agencies that adopted them
-The IRS may be bound by a procedure (such as a Revenue Ruling) if the taxpayer reasonably relied on the
procedure and the action constituted arbitrary and capricious decisionmaking (Estate of Shapiro)
-An interpretive rule is a statement that advises the public of the agency’s interpretation of a statute it administers
or a legislative rule it has issued
-A policy statement is a statement which advises the public of how an agency intends to exercise a discretionary
power
-The underlying statute or legislative regulation referenced by an interpretive rule is binding
-The mere fact that a rule is stated in binding language does not prevent it from being an interpretive rule
-Four part test from American Mining Cong. to determine whether a rule is interpretive or legislative:
(1) whether in the absence of the rule there would not be an adequate legislative basis for
enforcement action or other agency action to confer benefits or ensure the performance of duties
(2) whether the agency has published the rule in the Code of Federal Regulations
(3) whether the agency has explicitly invoked its general legislative authority, or
(4) whether the rule effectively amends a prior legislative rule
-If the answer to any of those is yes, the rule is legislative and not interpretive
-A rule has the force of law only if:
1) Congress has delegated legislative power to the agency, and
2) The agency intended to exercise that power in promulgating the rule
-An agency intended to exercise its power to issue rules with the force of law if:
1) There would not be an adequate legislative basis for enforcement action or other agency action to
confer benefits or ensure the performance of duties in the absence of the rule in question
2) The agency has published the rule in the Code of Federal Regulations
3) The agency has explicitly invoked its general legislative authority, or
4) The rule effectively amended a prior legislative rule
-A rule is interpretive, rather than legislative, if it is not “issued pursuant to legislatively-delegated power to make
rules having the force of law” or if the agency intends the rule to be no more than an expression of its construction
of a statute or rule (American Medical Ass’n)
-One important question in determining whether a rule is legislative or interpretive is whether the agency issuing
the regulation is giving substantive content to vague statutory language
-No Chevron deference to agency regulations unless Congress delegated authority to the agency to make rules
carrying the force of law, and the agency’s interpretation was promulgated in the exercise of that authority (Meade)
-A true interpretive rule will not typically trigger Chevron deference
C. Estopping Agencies
-The elements of estoppel are (1) reasonable (2) reliance on an act or representation (3) detrimental to the party
-However, the government is treated specially when taxpayers try to estop the IRS
-In Heckler, the Court indicated that estopping the government on the account of a government employee would
undermine public obedience to government directives and advice
-However, the Court refused to hold that the government can never be estopped
-The government interest might be outweighed by individual interests in extreme cases
ADMINISTRATIVE LAW – GLICKSMAN – FALL 2010
-One context in which estoppel is per se prohibited: Where estoppel would require monetary payments in a manner
not authorized by statute (Office of Personnel Mgmt. v. Richmond)
-The Appropriations Clause prohibits the Court from estopping the government in this way
-Potential applicability to the tax context, but only if the remedy involves extracting money already in the treasury
Fredericks v. C.I.R.
-Issue is whether to apply estoppel against IRS
-Must show “affirmative misconduct” in addition to three traditional elements of estoppel
-Court finds that the misrepresentations rise to the level of affirmative misconduct (“affirmative, authorized acts”)
-Factors to consider when estopping the IRS:
(1) Impact of the estoppel on the public fisc
(2) Whether government agents who made the misrepresentation were authorized to act as they did
(3) Whether the government misconduct involved a question of law or fact
(4) Whether the government benefited from its misrepresentation
(5) The existence of irreversible detrimental reliance by the party claiming estoppel
-The facts in Morgan v. C.I.R. were less egregious, so did not amount to “affirmative misconduct”
D. Reliance, Retroactivity, and Nonlegislative Rules
-Issues with retroactive application:
1) Constitutional limits on retroactive change in position (due process)
2) Provisions in the organic statute may provide for retroactive application of rules
3) Judicial determinations that reversals of policy represent arbitrary and capricious rulemaking
-Retroactive actions may violate due process rights of retroactively affected individuals
-Retroactive application of statutes is permissible as long it is supported by a “legitimate legislative purpose
furthered by rational means” for application (Pension Benefit Guaranty)
-Nonlegislative rules are nonbinding – agencies reserve the right to change their mind
-Interpretive rules do not create new duties; they interpret existing statutes or regulations
-If a person who engages in conduct that violates a statute looked at an informal guidance document that ok’d the
conduct, then any violation of law was not willful
-If an agency repudiates previous informal advice, individuals can argue inconsistency
-Can argue that the change of position violates Equal Protection (but unlikely to prevail)
-Can argue that repudiation of prior position amounts to arbitrary and capricious deicisionmaking
-If an individual relies on an agency’s informal advice regarding a regulation, and over time others rely on that same
informal advice, the informal advice has been incorporated by the statute or regulation
-In these circumstances, the agency can only change the interpretation by using the same process applicable to
formal modification of the rule itself, i.e. N&C rulemaking (Alaska Professional Hunters Ass’n)
ADMINISTRATIVE LAW – GLICKSMAN – FALL 2010
VII. AVAILABILITY AND TIMING OF REVIEW
A. Preclusion of Review
-Threshold justiciability/reviewability doctrines (clamaint must satisfy all for court to reach the merits):
1) Jurisdiction
2) Revieweability
3) Standing
4) Cause of Action
5) Timing
1) Jurisdiction (almost always, if not always, going to be present)
-Organic statute typically vests jurisdiction in federal court(s)
-Federal question (28 U.S.C. §1331)
-Mandamus statute (28 U.S.C. §1361)
2) Reviewability – §701(a) of APA applies except to the extent that
(1) Statutes preclude judicial review, or
(2) Agency action is committed to agency discretion by law
-Does a statutory provision that explicitly bars judicial review cover the particular challenge in question?
-Does the presence of an explicit provision authorizing review of certain issues implicitly preclude review of others?
-Supreme Court has declared existence of a presumption in favor of judicial review
-Origins of the presumption:
(1) Constitutional basis: Article III, Due Process,
(2) Statutory basis (APA): §701 (intro), §702 (1 st sentence), §704 (1st sentence)
-§702: A person suffering legal wrong because of agency action, or adversely affected or aggrieved by agency
action within the meaning of a relevant statute, is entitled to judicial review thereof.
-§704: Agency action made reviewable by statute and final agency action for which there is no other adequate
remedy in a court are subject to judicial review.
-Judicial review of the government’s decision not to enforce a law might infringe on the executive branch
-The McAnnulty case distinguished between factual findings and legal determinations: preclusion of review of
factual findings is permissible, but precluding judicial review of administrative acts would likely violate due process
-In Abbot Labs, the Court said that the APA’s generous review provisions must be given a “hospitable
interpretation” and held that review is available under the APA unless the organic statute provides “clear and
convincing evidence” of a contrary legislative intent
-In Block, the Court held that the presumption in favor of judicial review may be overcome “whenever the
congressional intent to preclude judicial review is fairly discernible in the statutory scheme”
United Food and Commercial Workers Union
-Issue is whether a federal court has authority to review a decision of the NLRB’s GC dismissing an unfair labor
practice complaint pursuant to an informal settlement in which the charging party refused to join
-Court held that dismissal not subject to judicial review under either amended NLRB or the APA
-Congress intended to vest broad prosecutorial discretion in the GC, free of the Board’s control
ADMINISTRATIVE LAW – GLICKSMAN – FALL 2010
-Court found a clear Congressional intent to preclude review
B. Unreviewable Agency Discretion
-§701(a)(1) applies where Congress has expressed an intent in statutory judicial review provisions that agency
action not be subject to judicial review
-§701(a)(2) applies where review is not feasible because there is “not law to apply” under the substantive
delegation of authority, whether or not Congress has provided explicit or implicit evidence of an intent that review
be available
-There is a “basic presumption of judicial review…so long as no statute provides such relief or the action is not one
committed by law to agency discretion” (Abbott Labs, FTC v. Standard Oil)
The Key Question in Applying § 701(a)(2)
Impairment
Severe?
RFC to Retu
Past Wor
RFC to
Engage in
Other
Meet or Equal Listings?
SGA?
-The committed to agency discretion exception is “very narrow” and applies only “in those rare instances where
statutes are drawn in such broad terms that in a given case there is not law to apply” (Overton Park)
ADMINISTRATIVE LAW – GLICKSMAN – FALL 2010
-§701(a) focuses on Congressional intent in statutory judicial review provisions
-§701(a)(2) is based not on intent but on feasibility based on the statute’s substantive provisions
-701(a)(2) only applies to block review when
(1) there is no law to apply (Overton Park)
(2) there is no meaningful standard against which to judge the agency’s exercise of discretion (Heckler)
(3) when there is no manageable standard for a court to determine whether the agency has committed an
abuse of discretion under §706(2)(A) (e.g. Sierra Club v. Glickman)
-Even though 701(a)(2) is a narrow provisions, there are cases where its conditions are satisfied
-Certain subject matter areas are more likely to involve unreviewable discretion than others – one of those is
national security, another is when the issue is constitutional in nature (Webster v. Doe)
-Congress intended to afford unreviewable discretion when it provided a lump sum appropriation (Lincoln v. Vigil)
-Other circumstances for discretion include:
1) Agency decisions not to prosecute
2) Agency refusal to grant reconsideration
-Are pragmatic considerations relevant? Some factors may be:
1) Judicial competence to review the decision
2) Extent to which review by courts would interfere with agency statutory responsibilities
3) The nature and importance of the interest of the person seeking review
- Lower Ark. Valley: There is unreviewable discretion for purposes of §701(a)(2) if either:
(1) There is no law to apply, or
(2) Other factors (i.e. structure of statute) demonstrate that judicial review is precluded
-Even if a statute provides no law to apply, that doesn’t necessarily preclude review because there are other sources
of law that may provide for judicial review (i.e. agency regulations or land use plans)
New York Racing Ass’n, Inc. v. NLRB
-Court said that courts should begin by looking at the statutory language
-Looked to legislative history, structure of the statute, and language in the statute that indicated inherent discretion
-Court acknowledged that courts just don’t have the expertise to second-guess some agency determinations
-In Leedom v. Kyne, the Court held that the district court had jurisdiction “to strike down an order of the Board
made in excess of its delegated powers and contrary to a specific prohibition in the Act” (exception is narrow)
C. Agency Action and Inaction
APA provisions relevant to the scope of available judicial review:
-§702 allows a person adversely affected or aggrieved by “agency action” to seek judicial review
-§704 makes final “agency action” reviewable
-§706(1) authorizes the federal courts to “compel agency action unlawfully withheld or unreasonably delayed”
Lujan v. Nat’l Wildlife Fed’n
-Plaintiff alleged that Bureau of Land Mgmt was violating its land management statute
ADMINISTRATIVE LAW – GLICKSMAN – FALL 2010
-Court (Scalia) held that the plaintiffs lacked standard, but also that they failed to identify any agency action that
triggered a right to review under §702 (but he was wrong)
-Programmatic actions are not particularized enough to qualify as agency action; the traditional job of the
courts is to resolve issues that involves individual rights (can’t challenge the program, only its individual decisions)
-§551(13): An “agency action” includes “the whole or part of an agency rule, order, license, sanction, relief or
the equivalent or denial thereof, or failure to act”
Heckler v. Chaney
-Court held that FDA decision not to prosecute prisons for off-label use of drugs for lethal injections not reviewable
-An agency decision not to enforce is subject to a reverse presumption that it is not reviewable
-Three factors provide the basis for the Court’s decision:
1) An agency’s decision not to enforce involves a complicated balancing of factors that are within the
agency’s expertise, but not within the Court’s expertise
Like use of agency resources and whether the action fits agency’s overall policies
2) An agency’s refusal to initiate enforcement action generally does not involve the exercise of its
coercive power over an individual’s liberty or property rights
3) An agency’s refusal to enforce in a particular case is analogous to the decision of a prosecutor in
the Executive Branch not to indict someone; separation of powers concerns
-But Heckler says that the presumption may be rebutted if the substantive statute has provided guidelines for the
agency to follow in exercising its enforcement powers (there is “law to apply”)
Must provide evidence of a standard that requires the agency to act
-Refusals to promulgate rules are susceptible to judicial review, although such review is “extremely limited and
highly deferential” (Massachusetts v. EPA)
-There must be a clear showing of Congressional intent to preclude judicial review of constitutional claims
-A claim under §706(1) “can proceed only where a plaintiff asserts that an agency failed to take a discrete action that
an agency is required to take” (Southern Utah Wilderness Alliance)
D. Overview of Standing
Barriers to reviewability:
1) Actions committed to agency discretion by law
2) Standing
-Standing law has both a constitutional component and a non-constitutional component
-Non-constitutional component broken into statutory and prudential requirements
STANDING REQUIREMENTS
NON-CONSTITUTIONAL
CONSTITUTIONAL
STATUTORY
Zone of Interest
PRUDENTIAL
No 3d-Party
No Generalized
ADMINISTRATIVE LAW – GLICKSMAN – FALL 2010
Source of
requirement
Required
Showing
Article III, § 2 of the
U.S. Constitution
(1) Injury in Fact
(2) Causation
(3) Redressability
Standing
Grievances
Statutes (e.g., APA
§ 702)
Court-created
(judicial selfgovernance)
Court-created
(judicial selfgovernance)
Plaintiff’s alleged
injury falls within
the zone of interest
of Constitutional or
statutory provision
Plaintiff asserts
its own rights
Not a generalized
grievance
-Constitutional requirements come from Art. III, §2 (“cases or controversies”)
-Three part test: (1) Injury in fact, (2) Causation, (3) Redressability
-Plaintiff must allege that (1) he suffered an injury in fact, (2) the alleged injury was caused by the conduct
complained of, and (3) the injury can be redressed by a favorable decision
-Causation involves the connection between the agency’s decision and the injury
-Redressability involves the connection between the alleged injury and the award by the court
In most cases, if the plaintiff can show causation he can show redressability
-Allen v. Wright: Standing is built essentially on separation of powers
1) The Court has used standing law to restrict the cases heard in federal courts
Internal limit on judicial power: Adversarial interests traditionally resolved by judicial resolution
2) The Court has used standing law to keep issues out of courts which belong in political process
External limit on judicial power: Courts shouldn’t intrude upon the other two branches
3) The Court has used standing law to protect the Executive Branch from Congress’s overreach
Protection against Congress trying to delegate executive oversight to the Courts
-Prudential requirements can mean anything that is not constitutional, or only to those judicially self-imposed
-Congress has the authority to waive the non-constitutional (statutory/prudential) requirements, but obviously cannot
waive the constitutional requirements
-Statutory standing requirements requires proof that the interest that the plaintiff is trying to vindicate falls within
the zone of interest that the statute or provision was designed to protect
-The question is whether the statute grants to the plaintiff some judicially enforceable right
-The test is whether the plaintiff has “arguably suffered” an injury (from §702)
In Bennett v. Spear, the Court said Congress intended to waive the zone of interest requirement, because it said that
“any person” (within Art III reqs) could bring suit
-Prudential standing requirements are court-created
1) Plaintiff must assert his own rights, instead of rights of third parties not before the court
2) Injury cannot be a generalized grievance suffered equally by large numbers of people
-Third party standing prohibition is different from the injury in fact test – even a person who has been injured cannot
assert the rights of third parties (i.e. doctor cannot challenge denial of Medicare money to patient)
ADMINISTRATIVE LAW – GLICKSMAN – FALL 2010
-For injury in fact, plaintiff must show that the injury is
(1) concrete and particularized, and (2) “actual or imminent, not conjectural or hypothetical”
-If plaintiff can show concrete injuries, it doesn’t make any difference under the generalized grievance test that a lot
of other individuals are suffering those concrete injuries
Byers v. Intuit, Inc.
-Plaintiffs sued tax preparer corporations and the IRS, alleging that they overpaid to e-file
-Court found that plaintiffs were able to meet injury in fact, causation, and redressability
California Ass’n of the Physically Handicapped
-If plaintiff challenges agency’s failure to regulate, it’s not the same as challenge to regulation
-Issue was whether failure require long-form procedure use was responsible for alleged injuries
-Court found that the Association failed to meet the causation requirement
-If plaintiff is complaining that the government has regulated it, it is alleging direct harm
-If plaintiff is complaining that the government has failed to regulate, it is alleging indirect harm
The failure to regulate allows the third party to injure the party
-When the plaintiff is not himself the object of the government action or inaction he challenges, standing is not
precluded, but it is ordinarily “substantially more difficult” to establish (Defenders of Wildlife)
E. Constitutional Standing Requirements
-Another Constitutional provision (besides Art. III, §2) that affects standing – Article II’s “take care clause”
-Allowing certain plaintiffs to sue would create judicial infringement on the President’s right to “take Care that the
Laws be faithfully executed” (Allen v. Wright)
-Even statutes that allow “any person” to sue are still subject to constitutional requirements on standing
-Permitting Congress to “convert the undifferentiated public interest into an individual right” to bring suit in court
would allow it to transfer to the courts the Executive’s constitutional duty to “take care…” (Allen)
-What kinds of injuries qualify? “Traditional injuries” and environmental, aesthetic, or recreational injury
-In Sierra v. Morton, Court refused to allow the group’s ideological injuries to qualify as injury in fact; but injuries
of aesthetic, environmental, or recreational nature may qualify
-In environmental cases, there must be some kind of geographic nexus between the agency action being challenged
and the specific resources which the plaintiff says have been impaired
-There also must be a temporal nexus between agency action being challenged and plaintiff’s alleged injury – must
be “imminent” if it hasn’t already occurred
-A risk of injury can qualify as a concrete actual or imminent injury if there is a “substantial probability” that the
injury will occur (Natural Res. Def. Council – ozone & skin cancer)
-An abstract statistical probability was insufficient (Public Citizen)
-The Supreme Court has given mixed signals on whether increased risk is good enough
Massachusetts v. EPA (greenhouse gas emissions harms met injury requirement)
Summers v. Earth Island Inst. (statistical probability cannot meet injury requirement)
-Can Congress define injuries by statute that can meet the injury in fact requirement?
ADMINISTRATIVE LAW – GLICKSMAN – FALL 2010
Yes – “Congress has the power to define injuries” but only if it identifies the injury it seeks to vindicate and
relates it to a class of plaintiffs entitled to bring a suit (Defenders of Wildlife)
When can procedural and informational injury satisfy the requirement?
-Private citizens may enforce procedural rights “so long as the procedures in question are designed to protect some
threatened concrete interest that is the ultimate basis of standing” (Defenders of Wildlife)
-Must link the procedural injury to a concrete interest (but standards for causation and redressability are relaxed)
-Informational injuries meet the requirement when the unavailability of the information hindered the ability of the
plaintiffs to exercise the right to vote
F. Prudential Standing Requirements
Prudential aspects of standing:
-Prohibition on third party standing is a court-created judicial self-restraint
-Prohibition on generalized grievances is judicial self-restraint but also flip of particularized requirement
-Zone of interest requirement has its roots in statutory requirement of §704
-A “widely-shared” grievance is not necessarily a generalized grievance – the injury in fact shared by many is not a
generalized grievance as long as it’s concrete and particularized
-If a widely-shared grievance is abstract and indefinite, that will not give rise to standing
-§702 provides a right to review to any person affected by agency action “within the meaning of the relevant statute”
-The test is whether the plaintiff’s interests are “arguably among” the zone of interests Congress intended to protect
-Rule against third party standing is to ensure that lawsuits are brought by those who are affected
-Courts have some exceptions:
1) Associational standing – association brings lawsuit on behalf of its members if its members must have
all been affected in the same way and the interests are relevant to the association’s purpose
2) Litigant can bring suit on behalf of a third party if the litigant has suffered some kind of injury, the
litigant has some close relation, and third party is hindered from bringing suit (i.e. parents)
G. Timing of Review
Timing doctrines: whether the party is entitled to review at that time
1) Finality
2) Exhaustion 3) Ripeness
4) Primary Jurisdiction
-The finality doctrine precludes a party from seeking judicial review of an action that is not yet final
-The exhaustion doctrine authorizes dismissal of a challenge to administrative action by a party that has not
exhausted its administrative remedies
-The ripeness doctrine bars judicial review on the ground that it is premature
-The primary jurisdiction doctrine deals with whether a court should defer resolution of a challenge until an
agency with concurrent jurisdiction over the problem has dealt with it
-The finality requirement is concerned with whether the agency has arrived at a definitive position on the issue that
inflicts an actual, concrete injury
-The exhaustion requirement involves an inquiry into whether the allegedly injured party failed to pursue
administrative procedures which could have provided that party with a remedy
-Finality looks to the conclusion of activity by the agency (what the agency has/has not done)
-Exhaustion is directed to the steps a litigant must take (what the plaintiff has/has not done)
Three aspects of exhaustion:
ADMINISTRATIVE LAW – GLICKSMAN – FALL 2010
1) Claim must be presented to an administrative agency before seeking judicial review
2) Claimant must follow through all levels of agency procedures and appeals
3) Plaintiff may be barred from raising issues in court that were not raised before the agency
Purposes of exhaustion:
1) Protecting authority of agencies, not courts, to administer regulatory programs
2) Promoting judicial efficiency
Exceptions for exhaustion:
1) No need to exhaust if exhaustion would cause delay that would preclude adjudication later
2) No need to exhaust if agency would lack the authority or competence
3) No need to exhaust when agency is biased so exhaustion would be futile
-In Darby, the Court concluded that exhaustion is governed by the third sentence of §704:
“Except as otherwise expressly required by statute, agency action otherwise final is final for the
purposes of this section whether or not there has been presented or determined an application for a
declaratory order, for any form of reconsideration, or, unless the agency otherwise requires by rule
and provides that the action meanwhile is inoperative, for an appeal to superior agency authority.”
-When the APA applies, exhaustion of administrative remedies is a prerequisite to judicial review only when
(1) expressly required by statute, or
(2) an agency rule requires appeal before review and the action is made inoperative pending that review
-“Courts are not free to impose an exhaustion requirement as a rule of judicial administration where the
agency action has already become ‘final’ under §704”
-Finality comes from §704
-Purposes of finality: efficient judicial review and providing a more complete record for review
Factors for finality:
FTC v. Standard Oil listed four factors:
1) whether action is a definitive statement of the agency’s position
2) whether action has direct & immediate legal force requiring immediate compliance by regulated entities
3) whether the challenge involves legal issues fit for judicial resolution
4) whether immediate judicial review would speed enforcement and promote judicial efficiency
Franklin v. Massachusetts listed three factors:
1) whether the impact of the agency action is sufficiently direct and immediate and has a direct effect on
day-to-day business
2) whether the action is the ruling of a subordinate official or is otherwise tentative
3) whether the agency has completed its decisionmaking process
Bennett v. Spear has two factors:
1) The action must mark the “consummation of the agency’s decisionmaking process”
2) The action must be one by which “rights or obligations have been determined” or from which “legal
consequences will flow”
-Finality focuses on the status of the agency’s consideration of an issue
-Exhaustion focuses on the conduct of the litigant seeking review of the agency’s decision
-Ripeness focuses on the institutional relationship between the agency and the court
ADMINISTRATIVE LAW – GLICKSMAN – FALL 2010
-The more recent trend has been to allow regulated entities to seek review immediately upon the promulgation of a
rule, instead of waiting until initiation of enforcement proceedings against it
-Withholding judicial review now must impose some kind of hardship on the plaintiff to be ripe (Abbott Labs)
-Ohio Forestry: must consider three factors in determining whether a case is ripe for review:
1) Whether delayed review would cause hardship to plaintiffs
2) Whether judicial intervention would inappropriately interfere with further administrative action
3) Whether the court would benefit from further factual development of the issues presented
-Relevant considerations for Primary jurisdiction:
1) Whether the question at issue is within the experience of judges or involves technical or policy
considerations peculiarly within the expertise
2) Whether the question is particularly within the agency’s discretion
3) Whether there is a substantial danger of inconsistent rulings
4) Whether a prior application to the agency has been made
-Must determine whether the court should dismiss the case or stay the case (usually stay)