Administrative Law Breyer

From wikilawschool.net. Wiki Law School does not provide legal advice. For educational purposes only.
Jump to navigationJump to search
Administrative Law
Authors Breyer
Sexton
Stewart
Walmsley
Sunstein
Vermeule
Herz
Text Image of Administrative Law and Regulatory Policy: Problems, Text, and Cases [Connected Casebook] (Aspen Casebook)
Administrative Law and Regulatory Policy: Problems, Text, and Cases [Connected Casebook] (Aspen Casebook)
Taught by
Taught at
Related course(s)


Agencies overview

  • Created by the Administrative Procedures Act (APA)
  • Congress enacts an enabling/organic statute that
    • Creates an agency
    • Empowers an existing agency
    • Gives agency authority to do certain things to put the statute into action, like
      • Fleshing out what the statute means by
        • Making rules and regulations
        • Issuing guidance documents and interpretive rules
        • Adjudicating disputes via orders
      • Enforcing violations (of both the statute and the agency’s rules/regs) by
        • Injunctions, cease and desist orders, or sanctions
        • Adjudication that advances or changes policies
    • Permits anyone affected by statute OR agency’s actions or inactions to petition for rulemaking
      • And sometimes to sue!
  • When do (and/or should) agencies act?
    • Market fails to regulate (pushback on economic state of nature)
    • Redistribute wealth/increase equality
    • Collective values are implicated (i.e., public television standards)
    • Combat disadvantage and societal caste systems (racism, civil rights)
    • Govt paternalism requires involvement
  • Influence of each branch of govt on agencies
    • Legislative branch
      • Creates agencies (both exec and independent) through legislation
      • Oversees agency activity
      • Funds agencies through appropriations
      • Conducts hearing on agency activities
    • Executive branch
      • Governs executive agencies (staffs, appoints, removes)
      • Oversees (and staffs) independent agencies (with Congress)
    • Judicial branch
      • Reviews agency actions (sometimes)


Framework questions to consider

  • How broad was the delegation of authority?
  • How much power did Congress/the President retain?
  • What is the agency empowered to do?
    • How?
  • How can the courts oversee the agency?
  • Are there any restrictions on judicial review or intervention?


Development of Administrative Law

  • 1775-1875 – laissez-faire era
    • strong aversion to powerful central govt
    • adversarial legalism = constant court challenges to govt taking too much leeway
    • belief in market forces to push competition in free markets → economic state of nature
    • Marbury v. Madison reinforced limits on fed govt’s power → “We say what the law is”
    • Regulation largely don by common law
  • 1875-1930 – traditional model of admin law
    • authorization by Congress
    • goal = ensure compliance with fair procedures
    • availability of judicial intervention → A procedures must facilitate judicial review
  • 1930s-1940 – New Deal era
    • rise of presidential power and independent admin agencies
    • lots of new legislation creating lots of new bureaucracy
    • Panama Refining Co. and Schecter (1935) – Natl Industrial Recovery Act (NIRA) unconstitutional b/c P delegated power without an “intellible principle” for As to follow
    • FDR packed Sup. Ct. with agency-friendly judges
  • 1945-1962 – the APA and the maturation of traditional admin law
    • SEC v. Chenery (1943) – A must clearly state basis upon which its decisions are made; Court cannot provide them if reasons are not explicitly given
    • 1947 – Administrative Procedures Act (APA) passed
      • required publication of regulations
      • instituted notice-and-comment (N&C)
      • required courts to uphold A decisions as long as they are not “arbitrary and capricious”
        • statutorily-mandated deference!
  • 1962-1980 – Critique of Agencies and “Public Interest” Admin Law
    • civil rights movement led to lots of new agencies created for health, welfare, and public safety
      • courts gave lots of deference to As with health and welfare purpose
    • 1966 – Freedom of Information Act (FOIA) → required govt to release info upon request
    • 1971 – “capture theory” formalized in economic treatise → reflected growing skepticism in As
      • public saw As to be serving well-organized industry groups
      • backlash against backroom deals, lobbyist control, and “industry capture”
  • 1980-present – Presidential administration and the “cost-benefit state”
    • 1980 – deregulation under Reagan
      • estd Office of Info and Regulatory Affairs (OIRA) w/in Office of Mgmt and Budget (OMB)
        • agency to oversee what all other agencies are doing → slows down A activity
    • 1980-90s – wave of deregulation of telecomm, aviation, trucking, and other industry
    • 1993 – Clinton issues EO urging all exec As to conduct cost-benefit analysis (C-BA) in making determinations, emphasizing quantifiable measures → economics dominated regulation
    • 2011 – Obama issues EO directing As to include non-quantifiable elements in C-BA
    • 2017 – Trump elected → promises deconstruction of administrative state



Sources of law governing agencies

  • Constitution
    • Appointments clause
    • “Take care” clause
    • “Necessary and proper” clause
    • due process clause
  • Legislation by Congress → “organic” or “enabling” statute
    • As often created in response to a particular issue, or given authority under some new law
    • Establishes goals, authority, leadership structure, and adjudicatory power for A
  • Judge-made/common law
  • Rules created by the agency itself under APA § 559
  • The APA
  • Administrative tribunals w/in exec branch that oversee agencies (i.e. OIRA)


Formalism v. functionalism

  • Formalism = turns on specific language of statute; strongly associated with textualism
  • Functionalism = expounds on abstract principles and seeks to meet underlying goals of legislation


Tools of statutory interpretation

  • Major questions doctrine
    • “Congress does not hide elephants in mouse holes” → if C wants A to do/make decisions on something major, it will say so explicitly
  • Specific trumps general
    • More specific descriptions of something override a general statement elsewhere
  • Greater includes lesser
    • Larger units encompass smaller units that comprise it
  • Expression of one thing excludes another (“expressio unius”)
    • “C knows how to say X; they did it elsewhere, but not here → therefore, X is excluded”
    • Cf. with “language may comprehend many different scenarios, where only a few are expressly mentioned as examples”
  • Constitutional avoidance
    • J will not interpret something in a way that creates a conflict with the Constitution


Non-delegation doctrine


BIG Q – Can C delegate its powers to the executive branch?

  • Constitution’s vesting clauses
    • Art I – C has legislative power
    • Art II – P has exec power
    • Art III – J has judicial power
  • Separation of powers is actually a system of checks and balances
  • Principles v. pragmatism
    • Three POVs
      • 1) vesting ALL legislative power in C is final → no further delegation possible
      • 2) C can delegate unless scope of grant is too broad
      • 3) C doesn’t delegate legislative power, it exercises it by giving authority to As
    • Pragmatic POV = 2
      • Things need to get done, and C can’t do it all
      • Flexibility w/in guardrails
      • J has power to decide whether guardrails are constitutional
    • Problem with 3
      • If court loses ability to constrain C, C can delegate whatever power it wants → separation of powers issue!


Policy – Should we have a strong non-delegation doctrine?

  • Yes, because
    • Accountability (for Congress)
    • State of nature – regs infringe on liberty
    • Framers intended collaborative lawmaking w/in C, not consecutive lawmaking (C, then As)
  • No, because
    • As are more/better informed to put statutes into practice
    • Would mean less transparency in bulky laws that C can hide behind


Schecter Poultry (1935)* Statute – NIRA provided that various industries should write “codes of fair competition” which the exec branch shall approve if 1) no inequitable restrictions and 2) they don’t promote monopolies

    • Narrowly-defined concept of “unfair competition” already exists (for Fair Trade Comm.)
  • Facts – Schechter challenged criminal conviction for violating “Live Poultry Code” enacted under NIRA
  • Holding – delegation of legis power to exec branch w/o a specific standard is unconstitutional
    • “Establish codes of fair competition” did not set clear principle for executive to follow
    • Basically permitted the exec branch to regulate the entire economy
      • No definition of “fair competition,” unlike “unfair competition”
      • NOTE – important that exec was meant to further delegate to industry groups w/expectation of self-regulation → makes delegation much more problematic
    • BUT a broad delegation with “restrictions” on exec’s “discretion” would be permissible


American Trucking v. EPA (1999) and Whitman v. American Trucking (2001)* Statute – CAA requires EPA to establish primary and secondary NAAQs for pollutants

    • Primary = level requisite to protect public health w/adequate margin of safety
    • Secondary = requisite to protect public welfare
  • Facts – EPA set acceptable levels of ozone from 0.9 to 0.8 ppm
  • Ct. App. – EPA failed to state intelligibly the appropriate NAAQs → CAA’s directive to EPA re: pollutant levels IS an unconstitutional delegation → remanded so EPA could set levels
  • Sup Ct.’s Holdings
    • Congress, not the agency, must articulate an intelligible principle for A to follow
      • NOT A’s responsibility to salvage an overly broad delegation by restricting its own discretion in implementation
      • If a violation exists, it occurs at delegation not implementation
    • CAA’s delegation is NOT unconstitutional → “requisite to protect public health” is enough



Non-delegation takeaways

  • Non-delegation IS still a canon of statutory interpretation, but a weak one
  • As cannot cure overly broad delegations from C (Am. Trucking)
    • C must revise an unconstitutionally broad delegation to enable As to continue their work
  • Almost any intelligible principle will suffice, as long as it comes from Congress
  • Courts will interpret statutes to find a sufficiently narrow/intelligible grant of legislative power whenever possible → preserves existing As
  • Open Q – is delegation to private entities permissible as long as it is accompanied by an intelligible principle (Assoc. of Amer. Railroads), or is there a per se rule against it?


Tools of congressional control over agencies

  • Statutory precision → very specific delegations of power
    • Cabins exec authority very narrowly
    • Often sacrificed for political deals
    • Works against judicial deference to As
  • Oversight hearings
    • Agency heads can be called before C to justify their actions (i.e., DEA sex parties)
  • Appropriations
    • As can’t do anything w/o funding from C
    • Budget restrictions can be surprisingly specific!
  • Advice and consent on appointments
    • Senate can drag feet on confirming instead of outright rejecting candidates → “slow walk”
    • Extent of Senate influence depends on position being filled
  • Casework and constituent service
    • Reps/senators provide a resource for voters working with recalcitrant As
  • Congressional Review Act
    • Allows C to oversee AND override what agencies are doing
  • Legislative veto
    • limited by the separation of powers



“Separation of powers” violations* Congressional self-aggrandizement → expansion

    • C vests in itself or its agents executive or judicial powers it shouldn’t otherwise have
    • Specifically a problem that plagues Congress
  • Encroachment → reduction
    • One branch (usually C) reduces the powers of another branch
    • NOT necessarily accompanied by aggrandizement!



INS v. Chadha (1983)

  • Facts – Chadha, a Kenyan immigrant overstayed visa and was ordered to be deported → AG suspended order based on extreme hardship → House of Reps passed resolution to overturn AG’s decision with only a voice vote on the floor and no deliberation
  • Statute – Immigration and Nationality Act (INA) § 244 – If either Senate or House passes resolution (by simple maj) stating it doesn’t want to suspend deportation, AG shall follow through with deportation
  • Holding – Action by only one House of C under § 244 violates the Constitution because all legislation requires bicameralism and presentment to the president
    • Art. I requires BOTH Houses to pass a bill and all bills/orders/resolutions to be presented to P
    • Only C as a whole can execute legislative power
    • Also: C’s review of AG’s decision may be adjudicatory → congressional aggrandizement of judiciary’s province
  • Dissent (White)
    • Functionalist argument = separation of powers’ purpose is accountability and good governance
      • Court should further those underlying principles, not unnecessarily formalistic rules
      • If this structure enhances accountability, it’s fine
    • Resolution not to suspend deportation is not legislation anymore than pres veto is legislation
  • Upshot
    • Legislative veto provisions in 200+ statutes were invalidated
    • C can’t retain veto power over A decision, but it CAN delegate veto power to someone else!



Congressional Review Act (1996)

  • Gives C 60 legislative days after an agency reg is passed to pass a resolution to override regulation AND preclude further regulations until remedial legislation is passed
    • Attaches any time a regulation is finalized by A
    • Only 51 members of Senate + majority of House required to block regulation
    • NO possibility of filibuster
  • Consider --
    • [possible] alternative to legislative veto
    • Pre-Trump – used only once → Trump admin – used 13x so far to challenge A action
  • Policy Q –
    • Is it better to have stricter procedures to create regs, or procedures to overturn regs more easily?
      • Current procedures to overturn regs are much less restrictive than the former!
    • What about overturning “midnight rulemaking” aka implementing a rush of regulation when A heads are on way out at change of administration to try to block new admin’s policies?
      • Turns on who you trust more, Congress or agencies…


Other Congressional checks on executive

  • To oversee regulations (probably not going anywhere)
    • REINS Act → reqs congressional approval of “major rules” [$100M+ effect on econ]
    • SCRAP Act → attempt to repeal CRA
  • To retaliate against overreaching P
    • Obstruct nominations
    • Obstruct legislation to slow agenda down (filibuster, filibuster-by-amendment, “holding floor”)
    • Obstruct routine operations (object to unanimous consent requests, force reading of amendments, object to meeting times for hearings) → limited efficacy/limited time frame



Congressional control takeaways * C DOES retain control after delegation, just not by one House alone

  • Valid tools = CRA, appropriation, oversight hearings, constituent services, Senate advice and consent
  • Most expedient method (real time) was legislative veto, which Chadha found unconstitutional



Presidential control over agencies


P may struggle to get As to cooperate because

  • C, not P, delegates power to As
  • As have broad discretion to decide what to prioritize
  • Js will almost always defer to budget-based and enforcement decisions by As
  • P doesn’t have control over A staffing decisions beyond appointment power
  • C subcommittees and 3P interest groups work more closely with As than P
  • Inexperienced appointees are ineffective w/in A structure



Two types of P authority over As

  • Directive → can P tell A officials what to do?
    • can install A head who aligns with P’s political goals
    • can issue regulatory EOs
  • Supervisory → what powers of A oversight does P have?
    • Hiring/firing [removal threat]
    • OIRA can be gatekeeper over regs that come out of As (see chart)



Executive orders

  • EO = order from P outlining policy goal or general framework that As have to work within
  • Power to issue = “take care” clause of Constitution
    • Per Goldsmith – the “take care” clause is aka the “completion” power → filling in the details
  • What can P prescribe in EOs?
    • Procedures → yes
    • Rules of decision → maybe
    • Require issuance or non-issuance of certain regs OR following OIRA → v controversial
  • Force of law?
    • Binding to extent they govern removal of an agency head
    • Limited to people within agencies addressed in EO



OIRA and its development* Overarching review board that examines every regulation that comes out of exec As

    • Created in 1980 by C’s Paperwork Reduction Act to prevent duplicative regulation
    • Formalized by Reagan’s EO in 1981
      • Instructs all exec As to perform [economic] C-BA of regulations and then submit to OIRA for review
      • Regs only published once they go through OMB
    • Fleshed out by Clinton’s EO in 1993
      • Highlights regulatory alternatives, performance-based reg, cost-effectiveness analysis
      • Inserts regulatory policy officers (RPOs) in each agency (OIRA spies?)
      • Reqs list of all regulations submitted to OIRA, with significant ones noted and presented in greater detail
      • Puts OIRA on tight deadlines for approving regs
      • Disputes between OIRA and agency resolved by P!
    • Expanded by GWB in 2007
      • A must ID “specific market failure” or other specific problem that warrants agency action for new regs
      • RPO will be one of P’s appointees w/in A → given veto over ALL regulation
      • Required “diluted” regulatory review for guidance documents (not just rules/regs)
    • Revised by Obama in 2009
      • Withdraws GWB’s EO and reaffirms Clinton’s
      • Requires retrospective regulatory reviews
      • Encourages use of “best available science” and counting “non-quantifiable” costs/benefit
      • Suggests that independent As should comply w/provisions as far as legally permitted
    • Empowered by Trump
      • Set “one in, two out” policy for regulation → required net zero costs
      • Required annual regulatory cost budget
      • Sought to unify the regulatory agenda
  • Policy theories
    • Effort to coordinate a fractured branch of govt
    • Executive overreach to interfere with regulators
    • Only way for democratically-elected leader to combat “deep state” action by unelected indivs
  • NOTE – independent As NOT required to report up to OMB → regs approved by Commission/Board


  • Advantages
    • Ensures rationality
    • Facilitates collaboration btw As
    • Reduces bloating of admin state
    • Prevents duplication, especially of conflicting regs
    • Staffed by people particularly qualified to assess C-BA performed by As
    • Unifies policy goals [reduces conflict btw P and As]
    • Reduces cost [$ and time] of challenges to reg
    • Consolidates info from multiple sources [Cass Sunstein’s POV]
    • Minimizes bureaucratic inertia
    • Avoids industry capture of an A
    • National accountability for P
  • Disadvantages
    • Gives OIRA (and P) way too much control
    • No transparency
    • Still susceptible to lobbying/corruption/capture (and more dangerous b/c of shroud)
    • Contrary to legislative intent by delegating auth to As
    • No statutory authority for its expanded role → attempt by P to take back power
    • Staffed by generalists, not experts/specialists in a given industry
    • Gives the “veneer” of science
      • Methodological concerns with C-BA
      • Making “willingness to pay” the measure of “cost” is wealth-sensitive
    • Creates regulatory delay [“paralysis by analysis”]



Appointments * Art II, § 2 – “appointments” clause of Constitution

    • Pres shall nominate, and w/advice and consent of Senate, appoint all officers of the U.S.
    • C may give P, the courts, or heads of depts unilateral power to appt inferior officers
      • C can ALSO impose qualifications on appointees, EVEN IF they significantly limit P’s pool of potential appointees
  • Big Qs
    • Can C limit P’s power to appoint?
    • Can C limit P’s power to remove?


Who is a “principal officer”?

  • Someone with “significant authority” beyond merely legislative duties who must be appointed by P with advice and consent of Senate
  • C CAN impose “reasonable and relevant” qualifications on potential appointees!



Buckley v. Valeo (1976)

  • Facts – C enacted FECA creating the Federal Election Commission, an indep A made up of six voting members w/quasi-legislative and adjudicative functions
    • Two of six voting members appointed by P, two from House subcommittee, two selected by C
  • Issue – Does FECA violate the Appointments Clause? → Depends on whether six voting members are “officers of the U.S.” → what is an officer?
  • Holding – Yes, FECA is unconstitutional because
    • “officer” = any appointee exercising “significant authority”
      • distinct from employee!
      • Tasks constituting “significant authority” are those that go beyond legislative role
        • if only legislative duties → essentially acting as agent of C → okay
    • Whether indiv is an officers turns on responsibilities, not title
      • Prevents C from giving someone lots of important duties but saying “not an officer!”



What determines “significant authority”?

  • 1) significance of matters resolved
  • 2) discretion exercised
  • 3) finality of decisions OR
  • 4) per Office of Legal Counsel, positions with
    • a portion of fed govt’s sovereign power
    • continuing/ongoing authority (not one-off authority)



Who is an “inferior officer”?

  • someone appointed w/in an A, who can be selected by P, the courts, or A dept heads alone
  • meaning of “inferior” – “subordinate” v. “not as important”
    • D.C. Cir. → subordinate
      • Relies pretty heavily on Edmond factors and not enough on Morrison (i.e., answering to someone w/more authority)
    • Sup. Ct. → ambiguous!



Morrison v. Olson (1988)

  • Facts – Ethics in Govt Act created Office of Independent Counsel to investigate/prosecute senior exec branch officials, to be appointed by three federal judges on a “Special Division” who were to be appointed by Sup. Ct. Chief Justice
    • IC had full power and independent authority to exercise all investigative and prosecutorial functions of DOJ and AG, removable by AG only for cause
  • Issue – Is appt of IC by court unconstitutional? → depends on whether IC is an inferior officer
  • Holding – IC is an inferior officer → appt by court and w/o Senate confirmation NOT unconstitutional
    • Inferior officers are those who
    • 1) are subject to removal by higher exec branch official, even though not “subordinate” in sense that he answers to anyone
    • 2) have only certain limited duties (investigating senior exec branch officials, no legislating)
    • 3) have limited jurisdiction and tenure (arguably temporary)
  • Dissent (Scalia)
    • tenure, duration, and duties are not as important as plain meaning of word “inferior”
    • “inferior” means “subordinate” → if officer is not subordinate to anyone, he is a principal officer → appointment by anyone other than P w/Senate confirmation is unconstitutional


Edmond v. U.S. (1997)

  • Facts – Coast Guard Criminal Appeals judge appointed by Sec. of Transportation w/o Senate consent, with decisions subject to review by U.S. Ct. of Appeals
  • Issue – Is the Coast Guard judge’s appointment by Sec. unconstitutional? → is the judge “inferior”?
  • Holding – Coast Guard Court judge is an inferior officer → appointment is constitutional
    • Work is directed/supervised by another presidential appointee
    • Court does not have power to render final decisions on behalf of the U.S.
  • Reconciling Edmond and Morrison
    • Doesn’t overrule Morrison, but might make reporting to a higher-up sufficient for “inferiority”


Free Enterprise v. PCAOB (Peekaboo)

  • PCAOB created by C as an indep regulatory commission to oversee and regulate accounting firms that audit public companies, with five members appointed by Securities and Exchange Commission
    • Has power to issue rules, investigate firms, and order sanctions, under supervision of SEC
  • Issue – Does this structure violate the appointments clause?
  • Holding – No, because the PCAOB appointees are inferior officers
    • Overseen by/reports to SEC, which has power to remove them → powerful method of control
  • BUT CONSIDER – are commissions “departments” as contemplated by art. II § 2?



Inferior officer analysis if inferior, CAN be appted by head of another branch of govt w/o Senate conf

  • 1) subject to removal
  • 2) perform limited duties
  • 3) narrow jurisdiction
  • 4) limited tenure
  • 5) work directed and supervised at some level by principal officer (Edmond)



Recess appointments

  • P has power to fill vacancies that may happen during Senate recess by granting commissions which expire at the end of the next session of the Senate
    • Senate approval NOT required!
  • Vacancies don’t have to arise during recess, just exist (Noel Canning) → when is Senate in recess?



NLRB v. Noel Canning (2014)

  • Obama appointed three members of NLRB while Senate was in pro forma sessions in Jan 2012
  • Issues
    • Is Senate “in recess” when it holds pro forma sessions every three days?
    • Does Recess Appointments Clause grante P the power to fill vacancies only during official Senate recess?
  • Holdings – No to both, unanimously
    • A “pro forma” session prevents a recess appointment from being valid
    • Vacancies can be filled during official AND unofficial recesses (i.e. intrasession)
  • NOTE 1– Noel Canning does NOT establish a set length of time that must be met for valid recess appt
    • 3 days too short, 10 days probably long enough
  • NOTE 2 – art II, § 3 says P can force C to adjourn for as long as he thinks proper if Houses of C disagree as to time of adjournment


How else can Senate constrain P’s appointment discretion?

  • Refusal to confirm
  • Refusal to hold hearings/vote
  • Schedule pro forma sessions every 3 days
  • Hammer appointees at hearing



POLICY – Should C have power to constrain P discretion in appointments?

  • Yes – preventing nepotism/abuse of power by bad presidents
  • No – separation of powers must be respected
  • What constraints are appropriate?
    • Minimum required experience
    • No undisclosed personal relationship?


Removal


P’s firing power for executive offers

  • No explicit constitutional authority!
  • Implicit in art. II executive powers, esp. “take care clause”
  • Essential to P’s ability to ensure laws are faithfully executed, aka necessary to promote P’s agenda


Myers v. U.S. (1926)

  • Facts – statute provided that postmasters may only be removed by P w/advice and consent of Senate → Pres Wilson removed Myers from office unilaterally
  • Holding – unconstitutional to require Senate advice and consent for P to remove agency administrator
    • P needs to have total control over executive officers in order to his job → loyalty is paramount
    • Prior decision affirmed ability to unilaterally remove dept heads → no reason why other officers can’t be removed too
    • “vesting” clause and “take care” clause [questionably applicable…]
  • Rule – if exec officer is appointed by P with Senate advice and consent, then he is removable by the president alone [eventually watered down]
  • NOTE – Removal of inferior officers appointed by P alone CAN be limited by C
    • Both aggrandizing and encroaching!


Humphrey’s Executor (1935)

  • Facts – FTCA created Fed Trade Comm to enforce antitrust law/consumer protection → four commissioners could only be removed by P for “malfeasance, inefficiency, or neglect of duty”
  • Issue – Can C constitutionally restrict P’s ability to remove commissioners only for cause?
  • Holding – P’s ability to remove commissioners CAN be limited to “for cause only”
    • Fundamentally necessary to keep three branches separate
    • Giving P unfettered removal power threatens the independence of a commission
    • FTC is an indep agency, not an exec dept → quasi-legis/quasi-judicial functions, NOT purely executive
  • Rule – Whether P can remove an officer w/o congressional limits depends on the character of office
  • Reconciling w/Myers
    • FTC is not “purely executive” → only purely exec officers (like postmaster) should be under total P control
      • emphasis on duties [until Morrison...]


Morrison v. Olson

  • Facts – after being created by C and appointed by 3 special judges appointed by Chief Justice, Office of Indep Counsel can only be fired for cause by AG (appointed by P w/Senate advice and consent)
  • Issue – Can C restrict exec’s removal powers over IC?
  • Holding – C can restrict executive’s removal powers over IC [maybe wrongly decided!]
    • real Q is whether removal restrictions impede P’s ability to perform his constitutional duty
    • Imposition of “good cause” standard does not “unduly trammel” executive authority
    • IC is inferior officer controlled by another appointee, whom P has power over
    • C not trying to increase its own powers at expense of exec branch → no aggrandizement
  • Dissent (Scalia)
    • Vesting clause gives P all executive power, not some → govt investigation and prosecution is “quintessentially executive”
    • Limited removal power impedes P control
    • Totally violates Myers and Humphreys
    • Eradicates line btw when C can and can’t limit P’s removal power



Free Enterprise Fund v. PCAOB

  • Facts – P appoints SEC w/Senate advice and consent, removable only for cause → SEC appoints Board [inferior officers], removable only for cause
  • Holding – two layers of “for cause” removal unduly trammels P’s removal authority and interferes w/P’s power to faithfully execute the law
    • P is already limited in ability to fire SEC comms, and SEC comms can’t fire Board except in limited circumstances → no oversight/compulsion for Board to behave
    • SEC not responsible for Board actions, only their own determination of whether “good cause for removal” is met → P can no longer control Board’s conduct
    • “Diffusion of power carries with it diffusion of responsibility”
    • Convenience and efficiency are not the objectives or hallmarks of democratic govt
  • Dissent
    • Multilayer protection is pragmatic move to ensure govt can continue functioning w/o constant threat (or cycle) of removal at will


Independent agency characteristics

  • Multiple members at top level (commissioners or board members)
  • Require for-cause removal
    • v.v. heads of executive agencies, which can be removed at will
  • Staggered terms for fixed # of years, often corresponding to number of members (one opening/year)
  • Bi-partisanship → not more than bare majority of members from any one party
  • NOTE – fine line between “independence” and “encroachment on executive” → can’t be too indep!


TAKEAWAY – New Q re: propriety of removal restrictions is whether they unduly interfere w/P’s obligation to take care that the laws are faithfully executed


Agency Policymaking: Rulemaking and Adjudication


Agency choice between ADJ and RM


SEC v. Chenery Corp. [Chenery I] (1943)

  • SEC protects investors by regulating “securities” aka ownership interests in publicly traded corps (stocks, bonds, options)
  • Public Utility Holding Co. Act of 1935 – required SEC registration of utilities, SEC approval of engaging in non-utility business (to avoid risk of outside investment affecting solvency), mandatory divestiture/reorganization to simply structure, and voluntary reorganization to be approved by SEC
    • § 7 -- issuing new stock must be “fair and equitable,” not “detrimental to interests of investors”
  • Facts – Federal Water Service Corp. (Federal) voluntary merged w/another utility
    • only preferred and class A common stock holders entitled to exchange shares for common shares in new company
    • Federal officers/directors/controlling shareholders (Chenerys) who owned class B common stock purchased enough Federal preferred stock on open market to give them a controlling block of shares while reorganization/merger was being negotiated
    • SEC refused to approve reorganization plan privileging Chenerys’ newly acquired preferred stock on principles of equity
      • as Federal’s managers, Chenerys had fiduciary duty not to trade in corp’s securities while reorganization was going on, even though no fraud/insider trading
      • stock could only be surrendered at cost + 4% interest, not converted into common stock
  • Holding – A order cannot be upheld unless the grounds upon which A acted in exercising its powers were appropriate; court will not provide a permissible rationale that A didn’t use
    • Under PUHCA, SEC could have, but did not, set its own standard for enforcing terms
    • SEC purported to act as a court of equity would → must judge its actions based on the grounds it invoked for decision
    • equity” does not preclude reorganization Chenerys wanted or justify SEC denial
    • Court will not assume what the agency meant to say
    • If SEC HAD based decision on expertise, it would have been fine! → courts will defer
  • Dissent (Black) -- functionalist
    • SEC did not disavow agency/policy grounds for denying stock transfer
    • SEC will just revise reasoning and reach same outcome → wastes time to send it back
  • TAKEAWAY – A action must be measured by what A DID, not by what it might/could have done
    • Not for the court to determine how to administer the statute
  • Different treatment of lower court v. agency decisions by reviewing courts


Federal Water Service Corp. (1945) – Chenery I on remand

  • SEC again denied Chenerys’ stock transfer on individual basis → did not pass rule or publish statement
  • Reasoning
    • conflict of interest when mgmt. purchases stock during reorganization
    • PUHCA doesn’t limit SEC’s authority to disapprove transactions to cases w/clear misconduct
    • Incentive to misuse mgmt. power must be removed → reduce harm to investors/public
  • Argument
    • Even though Sup. Ct. said in dicta that a RM would be appropriate here, SEC didn’t have to
    • Proceeding on case-by-case basis is fine until timing is ripe to pass a rule



SEC v. Chenery Corp. [Chenery II] (1947)

  • Facts – Chenerys appealed SEC’s decision on ground that w/o evd of misconduct, SEC may not prohibit stock purchase transactions through a retroactive order → must be done through general rule, which only applies prospectively
  • Holding – A MAY take action against a Π even where no rule exists and without making a prospective rule through RM process (i.e., by acting through ADJ)
    • Although RM is preferable, any rigid requirement re: A action would make admin process inflexible and incapable of dealing with specialized problems
    • Deference to SEC’s “accumulated experience” and general expertise
  • Dissent
    • Not fair to Chenerys! → SEC is taking their property
    • SEC’s “accumulated experience” had never confronted this problem!
    • Takes very narrow view of “expertise”


Agency’s quasi-legislative and quasi-judicial roles


Londoner v. Denver (1908)

  • City of Denver paved road in front of Π’s house → homeowners bore cost based on factors calculated (or not) by city, w/notice that fixed deadline for filing complaint/objections but no opp for hearing
    • Π’s complaint = procedure for determining his portion of cost and inability to demonstrate that cost was inappropriately apportioned were subject to challenge [procedural challenge]
  • Holding – regulations that affect people on case-by-case basis are adjudicative and require due process → failure to provide hearing violated procedural DP
    • Agency action is adjudicative because
      • Didn’t affect everyone universally
      • applied to each homeowner differently based on particular circumstances of property



Bi-Metallic Investment Co. v. Colorado (1915)

  • Facts – State board determined that property was undervalued in Denver → imposed rule that ALL assessments were to increase 40%
    • Π wanted independent hearing to determine whether his property was really worth 140% of prior value
  • Holding – where agency action affects everyone equally and creates a rule of general applicability, individuals have no right to hearing
    • Agency action here is rulemaking b/c 1) uniform and mechanical increase (not a reevaluation of each piece of property) and 2) not case-by-case



Reconciling Londoner and Bi-Metallic

  • Costs of ADJ hearing
    • LOW in Londoner (one street of homeowners) v. HIGH in Bi-Metallic (everyone in city)
  • Increase in adjudicative accuracy via hearing?
    • HIGH in Londoner (one homeowner’s corner lot = unusual circumstances) v. LOW in Bi-Metallic (same outcome would probably result)
  • Legislative v. adjudicative facts?
    • Facts relied on in Londoner are adjudicative (personal to case/about parties) v. Facts relied on in Bi-Metallic are legislative (will help decide Qs of law and policy)
  • Why should As hold hearings if legislatures don’t have to?
    • Might need more facts to pass a general rule; obtain more input from affected groups
  • Why isn’t paper participation enough?
    • Value in being heard; more buy-in from public on eventual decision; “procedures are for losers”



RULE – where life, liberty, or property is at stake, the Constitution requires “due process” hearings when an agency adjudicates, but NOT when it makes rules


Legislative v. adjudicative facts

  • Legislative
    • Do not concern immediate facts
    • General facts which help the tribunal decide Qs of law/policy/discretion
    • As/staff MAY decide these
    • Parties have little to nothing to contribute to developing these facts
    • Adversarial legalism is not required to determine disputed issues
  • Adjudicative
    • Evidentiary facts about parties and their activities, businesses, properties
    • Usually answer who, what, when, where, how, why, and motive
    • Should NOT be determined w/o giving parties a chance to know and meet unfavorable evd
    • Parties know about the facts concerning themselves and their activities than anyone else


Adjudication

  • Doctrinal themes – When is RM or ADJ required? What procedures must be followed, and when?
  • Broader themes – what are the intended/unintended consequences of RM and ADJs? When might As prefer to proceed via RM v. ADJ or v.v.? Is this a good system? How can it be improved?


POLICY – Why would we want As to have adjudicative power?

  • Take strain off judicial system
  • More flexibility than RM
  • Exercising caution in decision-making
  • Efficiency/familiarity with applicable rules/goals regulations try to meet
  • Dignity – provides a different forum for people to have their say when they are specially affected
  • Political check against tyranny of the majority
  • Legitimation/bolstering civic trust



Threshold Q – is it constitutional for C to delegate judicial branch’s power to As?

  • Does it violate SoP for art I legislature to delegate art III adjudicative powers to art II agencies?
  • Development of case law
    • Crowell v. Benson – As can only find facts and decide public rights (those created by govt) rather than private rights (arising under state/common law)
    • Marathon Pipeline – bankruptcy courts can’t adjudicate private law claims that arise under state law but are related to BKR
    • Thomas v. Union Carbide – mandatory binding arbitration btw two private parties required by EPA w/limited judicial review permissible b/c it arose out of broader public (regulatory) scheme
    • CFTC v. Schor – A can hear compulsory state law C-claims arising under claim against broker (w/escape clause to art III courts)


  • TAKEAWAYS
    • As have power to adjudicate SOME private claims, a/l/a their adjudicative powers don't impermissibly impair structural interest in an independent and impartial judiciary
    • Litigants do NOT have absolute right to art III courts, BUT
      • A adjudication of strictly private (CL or equity) claim should fail when it is
        • separate from broader statutory scheme
        • with limited judicial review
        • no escape route to art III courts
    • formalist line drawing exercises eventually collapse


Rulemaking Adjudication
Informal §§551, 553 § 551
Formal §§ 551, 553, 556, 557 § 551, 554, 556, 557


APA definitions and requirements for agency action * § 551 – definitions

    • “rule” – whole/part of A statement of general or particular applicability and future effect designed to implement, interpret, or prescribe law or policy or describing the organization, procedure, or practice requirements of an A
      • includes approval/future prescription of rates, wages, corp or financial structures or reorgs, prices, facilities, appliances, services, allowances, valuations, or practice thereof
    • NOTE – this definition guides ALL A decisions!
  • § 552 – FOIA
  • § 553 – [informal] rulemaking (aka “notice and comment”) [N&C]
  • § 554 – adjudications
  • § 556 and § 557 – governs formal RM and ADJ


Procedures of the APA

  • purpose = to constrain agency discretion
  • informal RM – creating, amending, or repealing a rule AFTER notice and opportunity for comment
  • formal RM – creating, amending, or repealing rule based on record created in trial-like hearing
    • huge constraint on agencies
    • v. rare after Florida East Coast (required “magic words” from § 554(a) to signal formal RM → C stopped putting those words into organic statutes)
  • informal ADJ – A decision resulting in order
    • not a lot of procedure
    • hardly mentioned in APA
  • formal ADJ – A decision resulting in order after trial-like hearing



Q – Does A’s organic statute require a decision “on the record” after opportunity for “hearing”? → ensuing procedure must be FORMAL [Florida East Coast]* if it only requires ONE, informal procedure permitted!



Sources of A procedural requirements

  • Congress
    • APA
    • Organic statute (w/at min same standards as APA, and sometimes more)
  • Constitution (due process)
    • DP hearings required when A adjudicates, NOT when it makes rules
  • Courts (common law)
  • A’s own procedural regulations
    • As must follow their own internal guidelines
    • SEPARATE from APA reqs



NOTE – Raising a const challenge to A procedure can circumvent organic stat’s preclusion of judicial review!


Dominion Energy v. Johnson (2006)* NOTE – first exposure to Chevron and Brand X

    • Chevron – when enabling statute is silent/ambiguous, court will defer to a reasonable agency interpretation of the stat; if C has spoken clearly, A gets no deference for a contrary interp
    • Brand X – where A was owed Chevron deference on an issue but there was a previous federal court opinion on the precise issue before A acted, court must defer to A’s subsequent interp and reverse its own prior precedent to conform to A’s rule
      • UNLESS decision clearly states it was based on stat’s unambiguous language (so Chevron deference inappropriate)
  • Facts – Clean Water Act requires EPA to provide an opportunity for public hearing before it issues a variance permit
  • Issue – does language of CWA require formal ADJ under APA?
    • Seacoast – statute isn’t clear, but it’s reasonable to require formal ADJ → yes
    • EPA post-Seacoast – follows informal ADJ, which it determined was applicable through informal RM (N&C)
  • Holding – CWA does NOT require formal ADJ under § 554; EPA interp controls per Brand X
    • “public hearing” doesn’t necessarily mean “evidentiary hearing,” much less “on the record”
    • Chevron applies to EPA’s interp of CWA provision and EPA interp trumps Seacoast holding per Brand X b/c lower court didn’t require formal ADJ on grounds that stat was unambiguous
  • Upshot – C must use specific words to trigger formal adjudication






Formal adjudication* Prehearing

    • § 554(b) – notice -- A must notify parties of time, place, nature of hearing, legal authority for it, and matters of fact and law asserted by A
    • § 554(c) – opportunity to settle – after ntc/before hearing, A reqd to give parties chance to settle
    • discovery
      • no formal discovery standard under APA
      • parties can request “discovery” through FOIA requests
      • § 555(b) – A has “discovery” power through “inspection” authority and “recordkeeping” reqs to extent provided by organic statute
      • § 556(c) – A has discretion through own regs to deny subpoena reqs
  • Hearing
    • Presider = A EE, nearly always admin law judge (ALJ)
    • evidence [§ 556(d)] – FREs do NOT apply → all relevant, non-duplicative evd is admissible
      • many As have own procedural regs re evd
    • burden of proof
      • proponent bears burden
        • in enforcement proceeding = A
        • in license/permit applications = private party
      • standard though to be burden of persuasion rather than production
    • standard of proof = preponderance of evd unless specified by statute or Constitution
  • Post-hearing
    • ALJ decision
      • Must include statement of findings/conclusions and reasons/basis thereof on ALL material issues of fact, law, or discretion
      • 2 types of decisions
        • recommended = to be considered by A in making final decision
        • initial = final if not appealed, but appealable to higher authority w/in discretion
    • A’s final decision
      • § 557(b) – A reviews ALJ’s recommended decision or appealed initial decision de novo
      • must include statement of findings/conclusions and reasons/basis thereof on all material issues of fact, law, or discretion
      • A can simply adopt ALJ’s decision ONLY IF it agrees on BOTH outcome and reasoning
    • Quorum = not specified by APA, but often noted in organic statute


What process is due?

  • Traditional model of due process = right v. privilege
    • Rights [life, liberty, property] may not be taken away [thru ADJ] w/o hearing to make sure law is being properly applied
    • Privileges [given at-will] may be taken away w/o hearing b/c interest not protected by law
  • Definition of “property” protected by due process began to expand as govt grew



Goldberg v. Kelly (1970)* Facts – Π recipients of federal/state aid challenged NY fo terminating welfare benefits w/o prior notice and hearing on due process grounds

    • Process of termination = ntc by letter w/reasons for termination w/chance to ask for higher review by written statement
      • if ineligible upon review, benefits stop immediately and letter w/reasons sent
      • opportunity for post-termination in-person hearing w/retroactive restoration
  • Holding – due process requires that welfare recipients get evidentiary hearing before benefits terminate
    • Two-step test
      • 1) Does due process apply?
        • Welfare is a statutory entitlement
        • Termination is a state action adjudicating important rights
        • Welfare is more like a property than a gratuity
      • 2) What process is due?
        • Depends on extent of “grievous harm”
        • Here, recipient’s desperate need outweighs govt’s interest in efficiency
    • Hearing reqs
      • Need not be a judicial trial, BUT recipient must be able to cross-ex witnesses
      • Opportunity to be heard must be tailored to capacities/circumstances of those speaking
    • Min procedural safeguards
      • Notice, able to retain attorney (not provided), orally present argument, confront Ws
      • Decision re: eligibility based only on legal rules/hearing evd
      • officer must state reasons for determination and evd relied on
    • Hearing serves interests of human dignity, factual accuracy, accessibility (v. written statement)



Board of Regents v. Roth (1972)

  • After 1 year at university, Π not rehired → no hearing, no reasons given
    • Under state law, tenure at public university takes 4 years AND decision to rehire 1-yr appointee committed to discretion of university officials
  • Holding – Failure to provide hearing for rehiring decision does not violate DP b/c DP does not apply (Step 1 of Goldberg test)
    • To determine whether DP applies, look to “the nature of the interest at stake”
      • NOT to the “weight” of the harm – balancing only applies to Step 2
    • No “liberty” interest denied b/c state did not impugn his good name/reputation
    • No “property” interest denied b/c Π not entitled to rehiring



Perry v. Sindermann (1972)

  • Π teacher at state college w/no formal tenure system was fired after public controversy w/school board
    • Faculty guide stated that faculty members should feel they have “permanent tenure” as long as their teaching is “satisfactory” and they “display a cooperative attitude”
    • District Court granted MSJ against Π teacher → no property interest protected by DP
  • Holding – property need not be rigidly defined, but right must come from independent source
    • Language from faculty guide might create a property interest in Π → should have chance to prove it at trial



Liberty interests arising under due process

  • Constitutionally protected freedoms
    • Speech, travel, religion, supervise children’s upbringing
  • Reputational interest (“stigma plus”)
    • Paul v. Davis – police circulating Π’s name/picture in “active shoplifter” publication w/o DP did not infringe liberty interest of reputation
  • Imprisonment/commitment to a mental institution
    • Significant changes in conditions of confinement can amount to new deprivation of liberty



Mathews v. Eldridge (1976)

  • Facts – SSA determined Π no longer eligible to receive disability benefits under Social Security Act
    • did not provide in-person hearing
    • did give notice, reasons, opp to review med repors and respond in writing/submit addtl evd
  • Holding – Hearing NOT required b/c current procedures appropriately protect interest at stake
    • NOTE – no dispute that SOME DP procedures are necessary b/c SS benefits are statutory entitlements representing property
  • Rule – What process is due requires a balancing of three distinct factors:
    • 1) private interest that will be affected by official action,
    • 2) risk of an erroneous deprivation in light of current procedures and probable value (if any) of additional or other procedural safeguards, AND
    • 3) govt’s interest, including fiscal and administrative burdens of addtl/other procedures
  • addtl procedures reqd ONLY IF benefit of addtl procedures x Π’s interest > increased govt burden





Winegar v. Des Moines (1994)

  • Facts – teacher got into physical fight w/student → suspended w/o opportunity for oral evd hearing
  • Holding – liberty interest implicated b/c of reputational harm of suspension/transfer → process reqd = opp for oral evd hearing, including presentation of evd and cross-X of witnesses
    • BUT could be before OR after decision to suspend


Goss v. Lopez (1975) – Student found w/weed suspended after opp to present his side of story → process okay* Hearing necessary b/c suspension can have adverse effect on rep

  • School attendance mandatory and also “required” for life success


U. Missouri v. Horowitz (1978)

  • med student dismissed after ntc of deficiency, chance to improve, and chance to present views to dean , but w/o chance to appear before termination committee → process okay
  • No hearing reqd b/c admission into program is voluntary, implicates 3P interests in successful students



TAKEAWAY = 2 step Goldberg test for due process claims* 1) Does due process apply?

    • Has there been a deprivation of something that qualifies as “life, liberty, or property”? (Roth)
    • Definition of property is not rigid, but right must exist from indep source (Perry)
    • Discretionary language does not create entitlement to property (Roth)
  • 2) If yes, what process is due?
    • Balance three factors:
      • 1) private interest that will be affected by official action,
      • 2) risk of an erroneous deprivation in light of current procedures and probable value (if any) of additional or other procedural safeguards, AND
      • 3) govt’s interest, including fiscal and administrative burdens of addtl/other procedures



NOTE -- agency ADJs terminating govt welfare/social service benefits ALWAYS trigger federal DP protection


Rulemaking authority


Who can do what?

  • Not ALL As can make rules (but most can) → look to organic statute for authority/duties from C
  • while rulemaking power encompasses formal AND informal, most RMs are informal (N&C)


Natl Petroleum Refiners Ass’n v. FTC (D.C. Cir. 1973)

  • FTC wanted to make trade regs re: octane rating numbers on gas pumps to give specificity/clarity to “broad standard of illegality” described in organic statute instead of individually adjudicating violations
    • FTC Act permits FTC to define “unfair competition” and penalize violations in ADJ-like procedures, BUT can also make rules/regs “from time to time” to root out unfair comp too
  • Holding – FTC has RM authority from statute → can make rules directly rather than proceeding by ADJ
    • A has good practical reason for wanting to RM; fears of abuse greatly exaggerated
    • RMs more favorable because
      • More consistent → fairer to regulated parties, promotes industry compliance
      • Opens up process of policy innovation to criticism, advice, and more data
      • Avoids singling out one ∆ among a group of competitors that all may be in violation
      • Creates bright line rules faster
      • More specific in scope than ADJs
    • “Resource-saving flexibility” by letting As decide whether RM or ADJ is more appropriate and whether to actually take action after N&C
  • Takeaway – courts will generally push ambiguous provisions towards giving agencies RM power




RM v. ADJ



Why would an A prefer an RM to an ADJ or v.v.?

  • RM’s comprehensive record = participation by multiple groups → representation (pro-RM)
  • Agency commitment in RMs is HIGH → harder to change! (pro-ADJ)
  • RM procedures reviewed under A&C standard, but RM substance can’t be challenged → very deferential (pro-RM)



Possible limitations on agency choice between RM and ADJ

  • APA definitions and procedural specifications
    • NLRB v. Wyman-Gordon
    • Morton v. Ruiz
  • APA § 706 “arbitrary and capricious” review
    • Bell Aerospace



NLRB v. Wyman-Gordon (1969)

  • Background – NLRB decided companies had to give lists of EE names/addresses to unions wanting to organize → published rule of general applicability after proceeding involving Excelsior Underwear
    • Prospective only → Excelsior didn't have to comply
    • General applicability
    • Invited some other interested parties to participate in decision
    • didn’t do N&C
  • Facts – Wyman-Gordon challenged requirement to apply Excelsior decision to own EEs
  • Issue – May A order a party to comply w/agency “rule” that didn’t go through proper RM but was articulated in prior ADJ proceeding involving another party?
  • Holding – W+G must comply with NLRB decision
  • Plurality (Fortas+3) – Excelsior = rule adopted by ADJ, so invalid → BUT still okay to apply to W-G
    • Propounds “harmless error” rule – NLRB’s decision would have been eventual outcome anyway, so uphold it
    • Highly functionalist
  • Concurrence (Black+2) – Excelsior = ADJ order, even though prospective only → okay to apply to W-G
  • Dissent (Douglas+Harlan) – Excelsior = rule adopted contra procedures, so invalid → not applicable
    • Just b/c Chenery II says As may adjudicate in absence of formal rules doesn’t permit As to ignore proper ADJ procedures
    • Procedures restrain agencies and thus must be followed



  • NOTE – This holding is extremely flawed!
    • Even if NLRB made decision retrospective to apply to Excelsior, it still wouldn't fully be an ADJ order b/c it is generally applicable
    • Chenery I says that A action must be measured by what it did, NOT by what it might/could have done → completed ignored by this holding
    • NO precedential value (rationale of holding only adopted by four justices)



Morton v. Ruiz (1974)

  • Facts – Snyder Act permitted Bureau of Indian Affairs (BIA) to provide benefits to Indians “living on reservations,” but denied benefits to Ruiz b/c he lived 15 miles off reservation based on language of enabling statute and provision in private BIA manual which set geographic limit on “on reservation”
  • Holding – No, BIA improperly used discretion to limit eligibility b/c manual didn’t go through N&C
    • Legislative history of Snyer act indicates that “on reservation” should be broadly interpreted
    • Both APA and BIA’s internal policies required publication of substantive policies (including privileges/benefits available and eligibility for same)
    • In making rules affecting substantial rights and obligations, A must remain consistent w/legislation AND follow own internal procedures
      • Even if internal procedures are more cumbersome than APA
    • Eligibility requirement was NOT published OR decided upon by N&C → fatal to BIA
    • Substantive rights cannot be extinguished by ad hoc determination (aka people need notice)
  • NOTE – holding does NOT have to be reconciled w/Chenery II b/c issue is not denial of benefits, but of compliance w/procedures for doing so



NLRB v. Bell Aerospace (1974)

  • Facts – NLRB had traditionally classified buyers as managerial EEs in ADJs, but revised classification to “non-managerial” to bring buyers w/in protection of NLRA
  • Holding – As can reverse prior ADJ orders via ADJ; RM is NOT required to undo ADJ policy
    • Chenery II gives A power to choose between ADJ and RM
    • facts presented are adjudicative → only Bell Aero is affected
    • No major reliance interests since ADJs only affect immediate parties
    • No fines/damages associated with change in position
    • Here, each org uses buyers differently → no “generalized standard” that is being changed
  • NOTE – Only RMs can undo RMs!



Impact of RMs on ADJ hearing rights

  • Shift to RMs from ADJs in 1970s
  • Effects
    • fewer, narrower, and “avoided” ADJs
    • As no longer had to start from scratch to establish position → hearings shorter, more fact-based
    • Takes “interesting” issues off the table b/c RM establishes standard
    • Less “fair” to parties because not as individualized
    • Courts less able to decide if A’s rule complies w/underlying statute (b/c substance of RMs is not reviewable!)



FPC v. Texaco (1964)

  • Facts
    • statute provides that applications for natl gas licenses “shall be set for hearing”
    • FPC has (properly adopted) rule prohibiting “escalator” price clauses
    • Texaco submit application for license w/escalator clause → FPC rejects application w/o hearing
  • Issue – Can A validly deny a hearing required by organic statute on grounds that application doesn’t conform to standard promulgated through N&C RM?
  • Holding – a hearing req in an organic statute does not preclude A from particularizing standards through RM and barring at threshold those who do not meet regs or show reasons in public interest why rule should be waived
    • Holding otherwise would undermine entire purpose of making regs → would require A to deny apps on case-by-case basis
    • Regulation narrows the issues for determination at hearing; doesn’t remove access entirely



Notice-and-comment rulemaking procedures

Formal RM* Governed by §§ 553(a), (b), (d), and (e), 556, and 557

  • Only applies when rules are “required to be made on the record after opportunity for agency hearing
    • Very uncommon after Florida East Coast (1973)
    • requiring magic words for formal RM is highly obstructionary move by Congress
  • Includes procedure very similar to formal ADJ, but
    • Open to all interested parties
    • Anyone can present evd/argument
    • Anyone can be cross-examined in a trial-type procedure
  • Creates very substantial record of everything presented to/considered by A
    • § 557(d) – When party won’t be prejudiced, A may adopt procedures for submitting all/part of evd in written form
    • § 556(e) – As may use an official notice procedure as long as party has opportunity for rebuttal



N&C rulemaking (APA § 553)

  • Requirements
    • (b) notice – general ntc of proposed RM shall be published in Fed Reg and shall include
      • time, place, and nature of proceedings,
      • reference to authority under which rule is proposed, and
      • terms or substance of proposed rule or description of subjects/issues involved
    • (c) comments– after notice, A shall give “interested persons” chance to participate in RM by submitting written data, views, or arguments with OR w/o opportunity for oral presentation
      • after receiving comments, A must incorporate a concise statement of comments’ basis/purpose into adopted rule
    • (d) publication – substantive rules must be published/served at least 30 days before effective
    • (e) petition – interested parties have right to petition for issuance, amendment, or repeal of rule


Notes on various informal RM processes

  • comment process can be repeated as many times as A wants before promulgated final rule
  • A can SKIP N&C period when it is impracticable, unnecessary, or contrary to public interest
  • When A adopts an “interim final rule,” A immediately implements the version of the rule it wants
    • BUT (theoretically) revises rule after comment period as needed
    • Typically occurs in more emergent situations
  • Negotiated RM – before comment period, A negotiates with interested parties to draft proposed rule



POLICY – what do we want from agency actions?

  • Consistency w/congressional intent
    • Proper statutory interpretation
    • Interpret gaps consistently w/legislative history and policy
  • Furtherance of public interest and interest of specified constituents
    • Fully informed decision with consideration of relevant factors
    • Outcome NOT driven by power interest groups or agency members’ career concerns
  • Efficiency
    • Low compliance costs, resource-saving measures
    • Process not TOO slow or burdened by ossification/excessive review
  • Fairness/justice
    • No capricious, ad hoc determinations
    • Due process



Importance of the record to RM process* Judicial review happens at appellate level, not district court → no opportunity for fact-finding or record-building! → reviewing court depends on the record created during RM process

  • APA § 706 requires reviewing court to examine the whole record [or those parts cited by a party] in reviewing challenged agency action



U.S. v. Nova Scotia Food Products Corp. (2d Cir. 1977)

  • Facts – FDA made regs by N&C RM re: production of smoked whitefish after multiple poisonings
    • Nova Scotia claim rule was commercially infeasible → challenged A’s admin record, failure to disclose basis for decision, and inadequate general statement of basis and purpose of rule
    • Only record was through FDA files and memories of those participating in RM
    • FDA ignored comment submitted re: alternative method of making whitefish safe to eat
    • FDA did not make scientific data about alternative process available to public
    • No response to comment re: regs destroying whitefish industry
  • Holding 1 -- § 553’s requirement of a “concise general statement of… basis for decision” means A must develop a sufficient record upon which to predicate judicial review
  • Holding 2 – usually, all data A relied on must be disclosed to interested parties
    • Failure to disclose data for public comments means A didn’t consider “all relevant factors” [because all arguments weren’t able to be presented]
    • Record is inadequate if “vital questions” raised by commenters are left unanswered
    • Record should disclose whether certain factors were clearly considered
  • NOTE – court (likely) reversed A action on “arbitrary and capricious” basis under § 706



Avoiding reversal for arbitrary and capricious rulemaking* Properly respond to all comments

  • Develop a complete record
  • Provide public with all info relied on, especially science



Vermont Yankee v. Natl Resources Defense Council (1978)* Facts – Atomic Energy Comm (AEC) adopted “zero release” rule to grant license for nuclear energy plant w/o resolving safe waste disposal problem → said new plant normally wouldn’t emit radioactivity

    • Rule challenged → D.C. Cir. said rule was procedurally defective for not permitting adequate adversarial probing
      • AEC complied w/all procedures technically required by APA/other statutes!
  • Issue – Can an A decision be procedurally defective or inadequate where A otherwise complied with statutory minima?
  • Holding – Generally, A decisions that comply with statutory requirements of APA and organic statute cannot be held to be procedurally defective (though exceptions are possible)
    • APA establishes max procedural requirement C was willing to have courts impose on As in RM
    • Circumstances requiring more procedures should be extremely rare
    • Appellate court unjustifiably intruded into process by requiring “full technical exposition” of every facet to be disclosed
    • The record may still be inadequate and can be remanded, but Court needs to not second-guess agency judgment
      • Ask: do the facts found match the outcome? → goes to arbitrary and capriciousness
  • Takeaway – court should NOT be able to pile procedures onto agency action, even though A can add procedures itself (in addition to APA and organic statute)



Perez v. Mortgage Bankers Assoc. (2015)

  • Statute = 1938 Fair Labor Standards Act created floor of reqs for how ERs treat EEs
    • established min wage and overtime compensation requirements except for “exempt EEs”
      • exempt EEs = those w/o tie between compensation and hours worked
      • includes “bona fide” executive, admin, or professional capacity or “outside salesman”
    • gave Sec. of Labor authority to “define and delimit” categories of exempt admin EEs
    • NOTE – companies want their EEs to be exempt!
  • Facts –
    • 1999 and 2001 – Dept of Labor writes opinion letters that mortgage loan officers NOT exempt
    • 2004 – DOL does N&C RM to insert new section into regs on exempt EEs
      • gives example for exemption of “EEs in financial services industry who generally meet reqs for admin exception,” EXCEPT where primary duty is selling financial products
      • MBA asks whether mortgage loan officers can exempt under new regs
    • 2006 – DOL gives opinion letter that mortgage loan officers are exempt under new regs
    • 2010 – DOL reneges on position that loan officers are exempt → loan officers NOT exempt
      • MBA argues that DOL had to do N&C to reverse position
  • Issue – Can DOL change its position on whether loan officers qualify as exempt w/o doing N&C?
    • DOL is interpreting its own regulations re: who is an exempt EE
  • Holding – A CAN change its position without doing a N&C RM when it is merely reinterpreting its own, properly adopted rule
    • Legal authority = APA § 553 – exempts from N&C interpretive rules and statements of policy
      • No right to N&C under APA when A changes interpretation
    • Applied Auer deference – courts are highly deferential to A interpretations of their own regs
  • Rule – the procedures used to set a policy are acceptable procedures to change it
    • Here, “policy” set by opinion letters → can be reversed/reinterpreted by opinion letters
  • PROBLEM – Auer deference creates incentive for As to make vague regulations that “comply” with vague statutory grants and then interpret it differently over time without proper N&C procedures


Fairness arguments in Perez



Exceptions to N&C requirements

  • Purposes of exceptions from N&C (American Hospital Ass’n)
    • Preserve agency flexibility in limited situations where substantive rights not at stake
    • Accommodate situations where policies promoted by public participation in RM are outweighed by countervailing considerations of effectiveness, efficiency, expediency, and cost reduction
  • Competing POVs re: N&C exceptions – efficiency v. fairness
    • Positive = exceptions are useful attribute promoting efficient functioning of govt
    • Negative = exceptions are ruse for getting around N&C that undermines transparency
  • Used very frequently by As!!



Rulemaking and publication* Exception from N&C RM procedures is NOT exemption from

    • Giving notice OR
    • publishing eventual rules!





  • APA § 553(c) – As must use notice and comment procedures EXCEPT for
    • Non-legislative, non-substantive rules
      • Interpretive rules
      • General statements of policy
      • Rules of agency procedure
    • Good cause
      • Impracticable, unnecessary, or contrary to public interest



Exception 1: interpretive rules [§ 553(A)(1)]* Interpretive rules v. substantive rules

    • Interpretive = instructional or informational statements of A’s position on what statute or regulation means
      • merely clarifies existing law
      • Does NOT have force of substantive rules/legislation
    • Substantive = regulations that create law, grant rights, or impose obligations
      • significantly affect private interests
      • change existing law or policy
  • Purpose of exception = lets agencies explain ambiguous terms in legislative enactments w/o cumbersome proceedings
    • Rationale – arguably no real change in legal obligations w/pronouncement of interp rule



American Mining Congress

  • Members of AMC challenged “permanent policy letter” (PPL) which categorized way miners were determined to be disabled and thus whether they were entitled to payment from AMC
  • TEST – if answer to any of following Qs is YES, rule has legal effect (so is legislative not interpretive)
    • 1) Does rule provide the only adequate basis for an enforcement action by agency?
    • 2) Has the agency published the rule in the CFR? [NOTE – later deleted]
    • 3) Has the agency explicitly invoked its legislative authority?
    • 4) Does the rule effectively amend a prior legislative rule?



Quick holdings

  • Am. Postal Workers Union – USPS’s new method of calculating retirement benefits for part-time workers based on “avg annual basic salary” examined “time worked” instead of “time on call”→ reduced pay of 100k+ postal workers
    • Held: rule can have substantial impact and STILL be interpretive!
      • not amending a prior legislative rule → interpretive rule
  • Hoctor v. Dept of Ag – internal memo required pens for lions/tigers to be 8 feet tall, but A regulation only requires housing that is “structurally sound” to protect/contain animals → Π cited for 6 ft pens
    • Held: internal memo was basis for enforcement action b/c Π could have been in compliance w/agency reg → NOT an interpretive rule
  • Jerri’s Ceramic Arts – CPSC made legislative rule that excluded “paper, fabric, yarn, fur, plastic, and string” and pieces thereof from designated “dangerous small objects” → revised to apply exclusion only to pieces that might become detached, bringing small objects made of those materials w/in designation
    • Held: revision effectively amended prior legislative rule → NOT an interpretive rule



Exception 2: general statements of policy [§ 553(A)(2)]* General statements of policy = explanations of how agency may exercise discretion in future

  • Purpose = allows As to announce tentative intentions for future to give industries/people guidance without binding themselves to something
    • Rationale – no present binding effect; does not cabin discretion



American Business 2-criteria test for general statements of policy* A statement of policy

    • 1) must NOT impose new or different rights or obligations
    • 2) MUST leave decision-makers with discretion
      • A’s own characterization of discretion is non-dispositive factor



Examples

  • Publishing policy plan in case of disaster → GSP
  • Citation guidelines for when to cite violators, but retaining discretion to choose to cite → GSP
  • Adopting new statistical methodology for calculating unemployment statistics → NOT a GSP
    • Imposes new obligations!
  • FDA issued order specifying “action levels” at which food “will be deemed” contaminated from which producers must seek exemptions → NOT a GSP
    • Imposes new obligation AND limits inspectors’ discretion
  • FDA IDed 9 non-exhaustive factors it will consider in deciding whether to initiate enforcement action against pharmacies creating new drugs → GSP
  • Congressional creation of PROs that will contract with HHS to review whether hospitals satisfy standards for Medicare $$, where HHS required the PROs to make sure hospital met or tried to meet certain standards → GSP
    • No new obligations for hospitals b/c they are already reqd to let agency inspectors in



U.S. v. Texas

  • DAPA set up program where low-priority illegal aliens can get deportation deferment
    • default position under the program was approval
    • INS issued memorandum with 150 pages of special instructions
  • Holding – NOT a GSP b/c instructions don’t leave room for meaningful discretion by agency EEs
  • Dissent (Scalia) – program IS a GSP
    • agency “decisionmaker” who needs to retain discretion is the agency head, not lower-level EEs
    • agency head can properly bind his own EES
  • NOTE – this might have been wrongly decided!
    • Each application was decided on a case-by-case basis
    • Agency EEs did not have to approve applicants even if they fit all the criteria
  • Upshot – leaves open Big Q of “what counts as evidence of non-discretion”?


Exception 3: Rules of agency organization, practice, or procedure (ROP) [§553(A)(3)]* ROP = internal procedural rules that reflect how agency is organized and accomplishes its objectives

  • Purpose – give agencies flexibility in structuring the organization of their operations
  • Rationale – procedural rules don’t affect the substantive rights/interests of parties, though they may govern the manner in which parties assert their interests/rights
  • Substantive v. procedural rules
    • Substantive = regulate primary conduct directly
    • Procedural = regulate procedures → primary conduct affected only incidentally



Am. Transport Assoc. test for ROPs

  • Notice and comment required if rule
    • 1) alters the rights, interests, or obligations of the regulated parties
    • 2) encodes a substantive value judgment or a tacit stamp of approval for some type of conduct



Examples

  • DOL published criteria/method by which OSHA can specifically select ERs for routine safety inspections, changing prior policy of casting wide net for inspections → ROP
    • All ERs potentially subject to inspection under prior policy
  • After Congress reqd home health agencies (HHAs) to designate intermediaries to seek Medicare reimbursement rather than apply directly to A, A instructed HHAs to begin using 49 govt-designated, state-wide intermediaries, which reassigned 864 HHAs → NOT an ROP
    • Changes the HHAs’ rights, obligations, and interests



NOTE – guidance docs are particularly tricky!

  • Prospective effect
  • A is much more likely to use than N&C or formal ADJ
  • Okay without N&C, even if it constrains agency discretion, as long as it doesn’t
    • Remove discretion entirely OR
    • Bind A to a particular course of action
  • If an informal RM doesn’t comply with N&C but needed to, court will likely void the “rule” BUT it can be repromulgated by A using N&C



Exception 4: “good cause” [§553(B)]* Catch-all exception that exempts A from N&C (NOT rule publication!) when it finds that N&C is impracticable, unnecessary, or contrary to the public interest

    • A must incorporate finding of “good cause” and brief statement of reasons in rules issued
    • Used when A makes direct final rules
  • Purpose – to cover situations where allowing N&C doesn’t make sense
  • Rationale – sometimes it’s necessary
  • Examples
    • A is imposing price freeze, and advance notice would cause price hikes
    • A has looming deadline from Congress (i.e. end of fiscal year)
    • A is correcting a type or clerical error in a prior reg



Doe v. Lhamon (pending)

  • Facts
    • Dept. of Educ’s Office of Civil Rights is guided by Title IX, which prohibits sex discrim in educational institutions that receive federal funding
      • Can restrict $$ to institutions that don’t comply IF there has been a formal adjudication
    • 1996 – N&C for “sexual harassment guidance”
    • 1997 – guidance adopted via N&C that did not mandate any particular form for sexual misconduct investigations → no evidentiary standard
    • 2011 – OCR published “Dear Colleague” letter
      • styled as a “significant guidance document” claiming not to add reqs to applicable law
      • said schools MUST use “preponderance of the evd” standard in sexual misconduct proceedings, NOT “clear and convincing evd” standard
      • used as basis for enforcement actions against a number of universities even though OCR sought “voluntary compliance”
  • Issue – did OCR use unlawful procedures in promulgating 2011 letter?
  • ASK – Does it fit an exception?
    • Interpretive rule? → NO – no adequate basis for enforcement, effectively amends prior legis rule
    • Statement of policy? → NO – imposes different obligations, no discretion for decisionmakers
    • ROP? → NO – encodes value judgment re: sex discrim’s effect on sexual misconduct hearings



Creating the record and ex parte communications

  • What is a record?
    • Created inside agency throughout RM process
    • Documents process and substance of decision-making
    • Facilitates judicial review as exclusive basis for decision
      • basic element of adversarial judicial system
  • What is an ex parte communication?
    • Communication w/a decisionmaker (usually a judge) w/o other party present and off the record
  • Q – what is the danger of ex parte communications (EPCs) to the record?
    • takes pivotal info/decision-making out of the record/public eye
  • Q – why forbid EPC with art. III judges?
    • diminishes judicial confidence to permit EPCs
    • creates appearance of corruption
    • violates basic premise of adversarial system, i.e. that the parties control the development and presentation of evd with equal access to the decision-maker
  • Q – why let legislators talk to anyone while making law?
    • Law applies to everyone
    • Legislators can be voted out of office
    • Legislators are inherently not neutral, nor expected to be
  • Critical but conflicting principles as applied to agency proceedings
    • Fostering public confidence → weighs against EPCs
    • Encouraging flexibility and cooperation btw regulators/regulated→ weighs in favor of EPCs



Access to the decision-maker in the APA

  • Key distinction = formal v. informal
  • § 556(e) – the record is the exclusive basis for a decision
    • implicitly prohibits non-harmless EPCs in any formal proceeding (ADJ or RM)
  • § 554(d)(1) – forbids ALJ to consult anyone on a “fact in issue” w/o giving all parties chance to participate
  • § 557(d)∫ -- forbids ex parte communications
    • no interested person (not just a party) can talk or write about the merits of a proceeding to the agency or the ALJ
    • any communication about merits must be on record
    • Upshot – if a party (or agent) approaches ALJ, party can be thrown out BUT case still proceeds



PATCO v. FLRA (D.C. Cir. 1982)

  • Facts
    • FLRA oversees labor disputes btw fed govt and federal EEs
    • After air traffic control strike, FAA applied to have PATCO’s certification as union for FAA EEs revoked → granted by FLRA in formal adjudication → PATCO sought judicial review
    • Before oral argument, DOJ raised allegations that FLRA’s consideration of de-certification case was marred by EPCs
      • Phone calls placed by Dept of Transportation Secretary to FLRA members
      • Dinner convo btw FLRA members and president of major public sector education union
  • TEST –is the decision-making process irrevocably tainted by EPC?
    • 1) Gravity of EPCs
    • 2) Whether EPC influenced outcome
    • 3) Whether party making EPC benefited
    • 4) whether EPC contents were unknown to opposing party
    • 5) whether vacating and remanding would serve a useful purpose
  • Holding – although EPCs with IPs occurred, EPCs were harmless and revocation is valid
    • DOT EPC was about expediting process, not merits
    • Union pres EPC not improper b/c it didn’t contain threats if FLRA didn’t decide for PATCO
    • Harmless error b/c FLRA’s decision went against PATCO anyway, so no benefit from EPC
    • Parties weren’t unfairly deprived of chance to refute argument in EPCs



EPCs and informal agency action (N&C RM)


Q – is there a record for informal agency action?

  • Often yes, especially b/c of move towards “paper hearing” RMs that create document record thru N&C
  • § 557(d) does not prohibit EPCs in informal actions



Sangamon Valley TV Corp. v. U.S. (D.C. Cir. 1959)

  • Facts
    • FCC did N&C to decide whether to move a TV station license from Springfield to St. Louis
      • Opposed by Π, but favored by his opponent Signal Hill
    • SH pres repeatedly spoke/gave gifts/wrote letters to FCC commissioners while proceeding was pending about need to switch station → FCC decided to move license, didn’t put ltrs in N&C file
  • Issue – should the court void an N&C RM action due to improper EPC?
  • Holding – Yes, N&C RM should be void when improper EPCs made by party w/a strong self-interest
    • Basic fairness requires public transparence; outcome was in SH’s favor



HBO v. FCC (D.C. Cir. 1977)

  • Facts – FCC adopted regs restricting cable TV programming after N&C and oral args for industry
    • Participants sought out individual commissioners during pendency to discuss (ex parte and in confidence) the merits of the rule under review
    • HBO challenged rules → D.C. Cir demanded detailed list of EPCs → FCC produced 60 pages
  • Holding – EPCs improper b/c there was no way to know if they affected the outcome
    • EPCs problematic generally b/c
      • Lack of transparency → possible that there is one admin record (N&C) for the public and another for the FCC and compatriots
      • Make it hard to review decision → the record suffers, and agency action can’t be reviewed if the actual decision is based on communication court doesn’t have
      • A procedures must be conducive to judicial review


  • New rule for EPCs in N&C [that is probably no longer good law!]
    • communications received prior to formal notice of proposed rulemaking (NPRM) do not have to be included in file, BUT if it forms the basis for A action, it must be disclosed somehow
    • once NPRM issued, A officials should not discuss merits of RM w/any interested person
  • NOTE – Vermont Yankee basically guts this b/c forbidding EPCs is a “procedure”



ACT v. FCC (D.C. Cir. 1977)* Facts – FCC did N&C (w/lots of comments) on potentially prohibiting commercials in children’s TV programming; also had oral args and panel discussions → broadcasters began to comply

    • FCC chair privately met w/Natl Assoc. of Broadcasters → NAB amended code to limit ads
    • FCC concluded RM w/advisory opinion but declined to adopt specific regulations
  • Holding – meeting btw NAB and FCC chair was NOT an impermissible EPC
    • FCC gave reasons for its decision to rely on self-regulation by industry
    • “impolitic” to not invite comment on NAB proposals, but not abuse of discretion; no coercion
  • Upshot – HUGELY narrowed HBO! → should only apply to conflicting private claims to valuable priv



Judicial Review



APA § 706 – judicial review

reviewing court shall hold unlawful and set aside agency action that is

*

    • a) arbitrary and capricious
    • b) in violation of the Constitution
    • c) outside agency’s statutory authority
    • d) done w/o proper procedures [usually in context of § 553 challenge to N&C RM]
    • e) unsupported by substantial evidence in formal proceedings [§ 556 and § 557, or per statute], or
    • f) unwarranted by acts subject to trial de novo by reviewing court (basically non-existent)
    • AND review the whole record when making such determinations



Questions of fact* Agency fact-finding most OFTEN occurs in formal ADJ, and to lesser extent in informal ADJ

    • Fact-finding less common in formal RM (b/c rarely used), informal N&C (b/c generalized)
  • What standard of review?
    • If formal proceeding → “substantial evd” standard
    • If informal proceeding → “arbitrary and capricious” standard



APA § 706(2)(E) – the reviewing court shall hold unlawful and set aside agency action, findings, and conclusions found to be… unsupported by substantial evidence in a case

  • subject to §§ 556 and 557 [formal procedures] OR
  • otherwise reviewed on the record of an agency hearing provided by statute
  • NOTE – scope of review is the WHOLE record
    • Informal RMs are not addressed by 706(2)(E), but they ARE subject to JR of fact-finding



NLRB v. Universal Camera Corp. I (1950)* Facts – NLRB protects EEs right to organize, governs collective bargaining between unions and private-sector ERs, prevents/remedies unfair labor practices by private sector ERs and unions

    • 1935 – Wagner Act aka NLRA gave EEs right to form union → held constitutional in 1937
      • says that “findings of Board as to facts, if supported by evd, shall be conclusive”
    • 1946 – APA passes despite concerns re: agency power → adopts “substantial evd” and “A&C” standards of review of A action
    • 1947 – Taft-Hartley Act amends NLRA to prohibit unfair labor practices/certain union activities and adopts “substantial evd” standard (vetoed by Truman → overridden by C)



  • NOTE – NLRB’s standard of review of ALJ’s decision is usually de novo [but refer to organic statute]
    • Examiner rejected complaint b/c he doesn’t believe pro-union firing conspiracy occurred
      • Makes credibility determination in oral testimony, not written record
  • 2d Circuit – “substantial evd” has NOT broadened scope of review, just codified it → so what standard?
    • Doesn't look at Examiner’s report → can’t overturn NLRB, but thinks its fishy
  • Holding – Examiner’s report IS part of the record → basis for Examiner’s decision must be considered → 2d Circuit erred in not considering Examiner’s findings!
    • Particularly important that Examiner’s assessment was a credibility determination → credibility cannot appropriately be assessed by Board (or appellate court!)
  • On remand – Board’s finding that C was fired for testifying was NOT supported by “substantial evd”
    • Concurrence in 2d Cir. – still need to be deferential to Board; only mistake was not examining Examiner’s report, which binds the Board ONLY to “testimonial/primary inference” [aka credibility]
  • Takeaways
    • APA and Taft-Hartley require substantial evidence
    • Substantial evidence requires looking at the record as a whole – evd FOR and AGAINST, and the “whole record” aka everything that went into a decision
    • Gives the fact-finder a lot of power on appeal!



Allentown Mack v. NLRB (1998)* Q – under NLRB precedent, what options does an ER have when he suspects the incumbent union no longer has majority support from its EEs?

    • 1) request formal, Board-supervised election for new union
    • 2) withdraw recognition from union and refuse to bargain
    • 3) conduct internal poll of EE support for union
  • Facts – Allentown Mack acquires new branch → hires 32 of 45 former EEs, all in AFL-CIO union
    • 8 EEs said they no longer supported union; 1 said if vote were taken today, union would lose; 1 said entire night shift (5-6) did not want the union = 15 total (not majority!)
    • AM refused to bargain with AFL, conducted poll → AFL lost 19-13 and brought claim to NLRB
    • NLRB said AM guilty of unfair labor practices b/c not shown reasonable doubt, based on objective consideration, that AFL lacked majority support
  • Issue – Did substantial evd support NLRB’s finding that AM had NOT demonstrated reasonable doubt?
  • Holding (Scalia) – substantial evd = what a reasonable jury would find → NOT enough evd for NLRB to say AM didn’t have reasonable doubt
    • Impossible for a rational factfinder to say AM didn’t have reasonable, good faith grounds to be uncertain about majority support for AFL
    • Chastises NLRB for claiming “reasonable doubt” standard but actually requiring more from ERs
  • Pushback – how many EEs’ testimony is required to establish “reasonable doubt”?
  • Dissent – NLRB decision WAS appropriate
    • ALJ and NLRB was right to exclude EEs’ testimony b/c it was given during job interviews conducted by prospective ERs and EEs would want to distance themselves from union



So what does “substantial evd” require?

  • More than minimum rationality, but less exacting than clear error; definitely less than de novo
  • Unclear how it compares to A&C, BUT
    • Courts defer to agencies under BOTH substantial evd and A&C about 70% of the time
  • Formulations
    • Requires evd in an amount that would justify a trial court in refusing to direct a verdict the other way (Allentown Mack)
    • More deferential than “clearly erroneous” test that appellate courts apply to district court findings of fact



Hard look review and the “arbitrary and capricious” standard


What is “arbitrary & capricious” [A&C]?

  • A “catch-all” standard of review for items that aren’t explicitly discussed in APA § 706
  • Applies in informal proceedings (RM and ADJ) and discretionary/policy decisions
    • BUT it can apply to formal proceedings! Not limited to informal/discretionary only
  • Remember: very similar to substantial evd standard!
  • Largely based in procedure, even though it feels substantive
    • ASK: did A check all the boxes as it marched through its decision-making? Did it thoroughly consider its decision AND the alternatives available to it?




Overton Park v. Volpe (1971)* Facts – proposed addition to cross-country I-40 highway would make it cut through public park in Memphis

    • § 4(f) of DOTA and § 18(a) of Federal Aid to Highways Act prohibited federal funding for highways through public parks if a “feasible and prudent alternative” exists, and requires program to include ALL possible planning to minimize harm if path through park is reqd
    • Sec. of Transportation accepted city of Memphis’ determination that there was no feasible alternate route instead of making own inquiry
      • No formal fact-finding (b/c proceeding was informal ADJ), no indication why no feasible alt routes exited or why design couldn't change to reduce harm
    • Πs sued on grounds that DOT decision was A&C b/c of lack of formal findings
      • ∆ argued he had broad discretion and the decision was not arbitrary (based on two post-hoc affidavits)
    • Holding – DOT action is reviewable, BUT can’t answer questions re: HLR test on basis of record before the court → remanded
      • Affidavits with post hoc rationalizations are insufficient
      • The “whole record” is not present
      • Action reviewable b/c
        • No indication that C sought to prohibit judicial review, esp not by C&C evd
        • Does not fall w/in exception for action “committed to agency discretion” where there is “no law to apply”
      • What standard of review?
        • Broad discretion (for ∆) → NO, b/c statutory language/rationale prioritizes parkland over pretty much everything else
        • Substantial evd → NO, b/c not a formal RM or ADJ
        • De novo → NO, b/c only authorized in very narrow circumstances
        • A&C → YES, b/c DOT’s decision gets “hard look review”
          • Can be applied to any A action that doesn’t get Chevron deference, especially if it involves health, safety, or the environment
      • NOTE – Court did NOT say DOT’s decision was A&C! only that it didn’t have enough info to decide one way or another
    • Hard look review
      • 1) Did A act w/in scope of authority?
        • What is A’s scope of authority?
        • On the facts, is A’s decision reasonably w/in that range?
      • 2) Was decision A&C or an abuse of discretion? [First articulation of A&C standard!]
        • Was decision based on consideration of relevant factors?
        • Has there been a clear error of judgment [w/o subbing own jdgmt]?
      • 3) Did action follow necessary procedural reqs? [no]
    • Upshot – signals transition from political to judicial controls over decisions broadly affecting a wide range of community interest



MVMA v. State Farm (1983)

  • Natl Traffic & Motor Vehicle Safety Act authorized DOT to issue practicable vehicle safety standards stated in objective terms
  • Facts
    • 1967 -- DOT issued Std 208 requiring all cars to come w/seatbelts
    • 1969 – proposed revision to require all cars to come with passive restraints → highly unpopular
    • 1972 – amended Std 208 to require full passive protection (seatbelt or airbag) for cars after 1975, and either passive restraints or seatbelts with interlock until then → highly unpopular
    • 1974 – Congress prohibited DOT safety standards from requiring interlock or buzzer
    • 1977 – DOT issued mandatory reg requiring either airbags or passive restraints (60/40 ratio)
    • 1980 – Reagan elected
    • 1981 – DOT rescinded Std 208 stating “no longer able to find that automatic restraint req would produce significant benefits,” citing changed econ circumstances and difficulties of auto industry
  • Issue – Was the DOT A&C in rescinding its regulation and changing its position by appealing to “changed circumstances”?
  • Holding – A action is A&C if
    • A relied on factors C didn’t intend it to consider
    • A failed to consider an important aspect of the problem
    • A offered an explanation counter the evd
    • A’s decision is so implausible that it can’t be ascribed to a difference in view or a product of agency expertise
    • Additional points
      • A must examine the relevant data and articulate a satisfactory explanation for its action
      • Reviewing court may not set aside an agency rule that is rational, based on consideration of relevant factors, and within scope of A’s statutory authority (Overton Park)
      • Scope of review is narrow → Court should not substitute own judgment for agency’s, BUT it also shouldn't try to make up for agency deficiencies (Chenery)
      • Decisions “of less than ideal clarity” should stand if A’s path is reasonably discernable
  • Outcome – A did not carefully/fully consider all the factors of the problem and did not supply a reasoned analysis for its change in position → decision WAS A&C
  • Rehnquist’s dissent
    • A’s view on passive restraints NOT A&C b/c the change was the result of an election/new administration brought about by public opinion
  • Reconciling State Farm and Vermont Yankee
    • VT Yankee prohibits more procedures, but State Farm just requires following existing procedures



Role of politics in HLR

  • HLR is a check against politics → don’t want As swinging pendulum too much w/o cause
  • CP (Rehnquist in State Farm) -- HLR can undercut the political process and public opinion



How should law deal with agency changes in interpretation or policy choices?

  • Weakest response = A only has to acknowledge that it knows it is changing position
  • Stronger response = To undo a policy, A has to provide at least as much reasoning as it took to create it (but not more) [FCC v. Fox]
  • Per Brand X court – inconsistency is not a basis for declining to analyze new interp under Chevron
    • Unexplained inconsistency is, at most, a reason for finding it A&C



FCC v. Fox (2009)* Communications Act of 1934 – prohibits broadcast licensee from uttering an “obscene, indecent, or profane language” by radio communication, enforceable by bines, suspension, or license revocation

  • Facts
    • FCC issued “profane language” policy (via order) in effect from 1975-2004
      • “indecent” = language re: sexual/excretory activities/organs when kids may be watching
      • distinguishes between literal and nonliteral uses of “fuck” and “shit”
        • literal use = single use is enough for violation (each instance examined in context)
        • nonliteral use = repetitive use required for violation
    • 2001 – FCC signals new approach wherein “fleeting” uses of sexual/execratory words, even where literal, weighs against indecency finding (but not official policy)
    • 2004 – FCC makes official policy change via order that nonliteral use of F and S words only can be actionably indecent even when used only once! (w/retroactive application)
      • occurred after Bono said “fucking brilliant” at Golden Globes → no penalty for NBC b/c no notice, and not an issue under prior policy
    • FCC’s justifications
      • Never held “fleeting expletive” to be a safe harbor – only in dicta/individual staff rulings
      • Allowing “fleeting expletives” would encourage more use, make kids “take first hit”
      • Prior “strict dichotomy” btw intensifiers and literal uses is artificial b/c both are offensive
      • Expletives are easier to bleep out now w/technology
    • Rejected by 2d Cir as A&C b/c FCC should have provided a “more substantial” explanation when changing its policy
  • Holding (Scalia) – A need NOT provide more substantial explanation when it changes prior policy
    • no basis under APA or case law to require a more searching review to change policy → all that is required is a “reasoned analysis” for [new] policy choice (State Farm)
    • A must show awareness of change, but need not explain why reasons for new choice are better
    • Here, FCC’s reasons given are sufficient → NOT A&C
  • Dissent (Stevens)
    • b/c FCC is an indep A, strong presumption that its initial view reflect the views of the Congress that delegated power → should be privileged
      • pushback by Scalia – FCC is indep of president, not C
  • Dissent (Breyer +3)
    • Explaining a change requires more than justifications for why policy is good → Must give a more complete explanation stating why a new policy is needed
    • Does not mean a “heightened standard of review” b/c reasons need not be “better” than reasons for old policy



Mass. v. EPA (2007)* Facts – Challenge to EPA’s failure to regulate greenhouse gases (GHGs) arguably required judicial review of A policymaking (under A&C SOR) rather than statutory interpretation (under Chevron)

    • EPA justified failure to regulate based on various policy judgments, including pre-existing programs for global warming, concerns about interfering with president’s foreign negotiations, and inefficacy/inappropriate timing
  • Holding – EPA lacked statutory authority to refuse to regulate based on policy; regulatory decision can only be based on scientific evd re: whether GHGs contribute to air pollution and endanger public
  • Result under Overton Park – same, b/c A acted outside of statutory authority by basing reasons on policy, not sciene
  • Result under State Farm – same, b/c EPA relied on factors C didn’t intend it to consider (i.e., policy) AND b/c they failed to consider scientific aspect of problem
  • NOTE – if EPA had justified delay in determination based on resource constraints and discretion to prioritize, some lower courts would have been okay with it! → “resources” = “get out of jail free” card



TAKEWAYS * Under APA § 706, a reviewing court shall set aside A action found to be A&C

  • Judicial review must be made on the record as a whole for both formal AND informal actions (subst. evd AND A&C)
    • If no evd of the grounds on which A made decision → matter can be remanded
  • A&C is proper SOR of 1) fact-finding in informal A actions AND 2) formal and informal policymaking
    • Substantial review only applies to formal procedures w/a factual record to examine
  • When reviewing an A’s policy choice, court must consider whether
    • 1) decision was based on consideration of relevant factors and
    • 2) whether there was clear error of judgment (Overton Park)
  • Court may not substitute own judgment for A’s (Overton Park)
  • A must examine relevant data and articulate a satisfactory explanation for its action, including a “rational connection” btw the facts and the choice made (State Farm)
  • A action is A&C if A
    • acts outside of statutory authority (Overton Park)
    • relied on factors which Congress had not intended it to consider (State Farm)
    • entirely failed to consider an important aspect of the problem (State Farm)
    • offered an explanation for its decision that runs counter to the evd before A (State Farm)
    • decision is so implausible that it could not be ascribed to difference in view or product of A expertise (State Farm)
  • Court may not supply a reasoned basis that A itself has not given (State Farm)
  • Court can uphold decision of “less than ideal clarity” if A’s path is reasonably discernable (State Farm)
  • A is required to consider reasonable alternatives to an adopted rule, but not EVERY conceivable altern.
  • Court will defer to A’s decision on truly technical matters on which only A has expertise
  • When A changes policy,
    • 1) it must acknowledge the change
    • 2) new policy must be legally valid
    • 3) A must offer rationale for new policy choice, but
    • 4) A need not show reasons are “better”



Statutory interpretation


APA § 706 – the reviewing court shall decide all relevant questions of law, interpret constitutional and statutory provisions, and determine the meaning or applicability of the terms of an agency action


POLICY -- Limits on judicial review of legal Qs

  • Congress can limit JR of an A’s determination of a legal Q because
    • C delegates its own legislative authority → permitting A interp is part of delegation
    • Separation of powers
  • Congress should limit JR of A’s determination of a legal Q b/c
    • A has expertise/experience
    • Judicial efficiency/economy – court shouldn't have to answer every small question
    • Leaves room for policy judgment by A



JR of A statutory interp Pre-Chevron* Method 1 = deference to A application of statute to facts unless no rational basis/demonstrably irrational

  • Method 2 = reject construction of statute that is inconsistent w/stat language or that would frustrate C’s purpose
  • Two opposing POVs = defer to reasonable A interpretations v. “courts are final arbiters of stat meaning”



NLRB v. Hearst Publications* NLRA guarantees rights of private sector EEs to form unions/engage in collective bargaining → NLRB tasked w/enforcement

  • Facts – newspaper companies refused to bargain w/newsboys on grounds that they aren’t “EEs” w/in NLRA → at formal hearing, NLRB board decided that full-time newsboys were EEs → circuit court independently examined Q after hearing and held newsboys NOT EEs under NLRA
  • Plain issue = whether newsboys are EEs under NLRA
  • Issue (per Hearst) = whether circuit court erred by holding newsboys are not EEs under NLRA where such reading is consistent w/common law and statute is silent as to definition
  • Issue (per NLRB) = whether circuit court erred by independently examining whether newsboys are EEs given formal ADJ by NLRB, a govt A created specifically to administer NLRA
  • Holding = court must look to history, terms, and purposes of legislation to determine whether independent review of A decision is warranted
    • Legislative purpose = broad solution to workplace conflict over rights
    • Legislative history = C conceptualized “EE” more broadly than CL definition of master/servant
    • Text of statute = defining “EE” primarily assigned to NLRB
    • NLRB has everyday experience on the matter
    • Where Q is one of specific application of a broad/general statutory term in a proceeding in which A administering statute must first define it, court’s review is limited



Skidmore v. Swift & Co. (1944)

  • Fair Labor Standards Act set max hrs/min wage and guaranteed 50%+ for OT work
  • Facts – 7 firefights sought OT for ours spent at meat-packing plant waiting to answer v rare alarm calls
    • No law (statutory or CL) precludes “waiting hours” from being “working hours”
    • Wage & Hour Admin (WHA) in Dept of Labor published bulletin re: classifying waiting time
      • “Sleeping/eating time NOT work hours, but everything else might be → be flexible!”
    • WHA had considerable experience in ascertaining work time, BUT
      • DOL does NOT have delegated authority under FLSA (can’t issue rules, do enforcements, or act w/force of law) and wasn't even party to case
  • Issue – what weight should reviewing court give to an A’s conclusion re: relevant statutory authority that is NOT reached as a result of adversary proceedings w/fact-finding and conclusions of law?
  • HoldingA’s conclusion, though not binding, carries persuasive weight based on
    • The thoroughness of the consideration
    • The validity of reasoning
    • Consistency w/earlier/later pronouncements [NOTE—maybe less important after FCC v. Fox!]
    • All other factors that give it power to persuade, if not control
    • Each case must stand on its own facts!



Is there actual deference to A under Skidmore?

  • Interp #1 – If we find your position persuasive, we will agree with it → no specific deference
  • Interp #2 – we don’t find your position persuasive by argument alone, BUT b/c of your role, we may still be persuaded → some deference?



Chevron USA Inc. v. NRDC (1984)

  • Facts – Conflict arose over whether “stationary source” as used in the Clean Air Act referred to factories as a whole (the “bubble concept” applied by EPA and espoused by Chevron) or each individual polluting structure (espoused by NRDC)
    • If former, factories could reduce net pollution and still expand
    • If latter, each offending structure must be fixed → greater reduction in pollution
  • Issue – whether EPA’s designation of an entire plant as a “stationary source” was contrary to the CAA given statutory language, legislative history, and its own prior policy interpretations
    • In directly relevant section, “stationary source” = “any stationary facility or source of air pollutants which emits 100+ tons/yr” → good for Chevron
    • In different, not directly applicable section, “stationary source” = “any building, structure, facility, or installation which emits 100+ tons/yr” → good for NRDC
  • Holding – when a court reviews an A’s construction of the statute which it administers, it must ask
    • 1) Has Congress directly spoken on the precise question at issue? If yes → A must give effect to unambiguous congressional intent.
    • 2) If statute is silent or ambiguous w/r/t the specific issue, was A’s interpretation based on a permissible construction of the statute?
    • Court determines congressional intent by plain language, canons of stat interp, and legis history
  • Rationale
    • “power to administer statute” requires making rules to fill in gaps → where C consciously leaves a gap in a statute, it implicitly delegates power to A to fill it → will be accepted unless unreasonable or A&C
    • Reasons for deference
      • Agency expertise/experience
      • Judicial econ (avoid circuit splits, promote national uniformity, reduce Balkanization)
      • Predictability for industries/the public
      • Forces Congress to be precise/clear (b/c if the courts decide, Congress will be lazier if it thinks the courts will come on on their same side; or if liberal As/conservative C or v.v.)
      • Gives As flexibility/expedience to act
      • Allows for political accountability when As do things the public dislikes
      • Because Congress says so
  • Outcome – C had no specific intent as to bubble concept → EPA’s interpretation was reasonable


Chevron analysis


Step Zero: Does Chevron even apply?


U.S. v. Mead (2001)

  • Facts – Congress fixed tariff schedule for U.S. imports by giving Sec. of Treasury authority to promulgate rules to ensure uniform appraisal of goods/classification of duties → 42 U.S. Customs Offices abide by Scty’s regs in fixing final classification and applicable tax
    • One office issued a ruling letter to Mead classifying 3-ring binders are diaries → 4% tax
    • Ruling letters only applicable to limited transactions/goods, issued w/o N&C/publication/hearing
  • Holding (8-1) – A interpretations get deference only when 1) C delegated “force of law” authority to A generally, and 2) interp claiming deference was promulgated in the exercise of that authority
    • Delegation may be shown by
      • A’s power to engage in RM/ADJ
      • “some other indication” of congressional intent
    • Here, C did not give U.S. Customs Offices authority to make rules w/force of law!
      • No N&C, no formal ADJ, no “other indicators” (10k ltrs/yr, binding only on specific parties w/little reasoning)
      • Scty’s has force-of-law authority, but Customs Offices do not get that authority by proxy
    • Classification rulings are best treated like interpretations in policy statements, agency manuals, and enforcement guidelines → subject to Skidmore respect only
  • Dissent (Scalia) – Chevron should apply to all authoritative agency interpretations, aka when the A’s GC determines the ruling should be defended
    • majority position is not sound/sustainable; no link btw formality of procedure used and Congress’s intent
    • Mead’s practical effects = confusion re: whether Chevron applies, artificial increase in N&C, unnecessary delay in policy development
  • NOTE – “force of law” is different/broader than authority to conduct formal legislative procedures!



Legislative v. interpretative rules

  • Legislative rule = product of an exercise of delegated legislative power to make law through rules
    • If administrator makes a legislative rule that is constitutional, within its delegated power, and properly issued, it is controlling upon courts as “law”
  • Interpretative rule = any rule an agency issues w/o exercising delegated legislative power (which they may or may not have!)
    • If administrator has discretionary power but not delegated power, he may state how he will exercise discretion → results in interpretative rules → court may give effect of law to these rules, but is not bound to do so



Christensen v. Harris County (2000) [pre-Mead]* Holding – Chevron does NOT apply to an “opinion letter” of the acting DOL WHA re: whether a public ER could compel EEs to take vacation to use up accumulated “comp time”

    • tried to draw bright line btw formal agency docs (orders) and less formal ones (opinion letters)
  • Scalia concurred w/jdgmt but argued Chevron does apply



Barnhart v. Walton (2002)

  • Holding – Chevron applies to SSA’s interp of “disability” even though issued as an N&C reg only after litigation began b/c it confirmed a longstanding agency view (albeit reached w/o public process)
    • Neither strategic N&C nor informal development of interp before precluded Chevron application


    • Chevron applies b/c of
      • 1) interstitial nature of legal Q
      • 2) A’s expertise
      • 3) importance of Q to administering statute
      • 4) complexity of administration, and
      • 5) careful consideration A gave to Q overlong period of time [sounds like Skidmore…]
  • NOTE – this case is hard to square with Mead



King v. Burwell (2015)

  • Facts – 2nd major challenge to ACA → gave IRS power to prescribe all rules and regs for enforcement
    • Per statute, tax credits available only to people enrolled in exchanges “established by the state”
    • After N&C, IRS issues rule saying “estd by state” covered exchanges set up by HHS too
  • Holding – before applying Chevron, courts must determine if issue falls into “major questions doctrine”
    • Court hesitates to conclude C intended implicit delegation to A in “extraordinary cases”
    • Qs of “deep economic and political significance” would have been expressly assigned to an A if C wanted A to have interpretive authority
    • Very unlikely that C would have intentionally delegated this authority to the IRS, which lacks any expertise in health insurance policy
    • Would be too destabilizing to permit As to have ability to undo this interpretation of the ACA
    • No discussion of Mead OR Skidmore!
      • Even though Mead gives us a framework for applying Chevron which fits action here, Court doesn’t use it
      • definitely passes Step Zero and may have even gotten Chevron deference…
  • Outcome -- IRS’s reg re: meaning of “estd by state” is NOT entitled to Chevron deference



City of Arlington v. FCC (2013)* Telecomm Act of 1996 limits traditional authority of state/local govts to regulate location and construction of wireless towers/antennae by giving FCC rulemaking authority to carry out Act

    • Stat says state/local govts must act on wireless site applications w/in “a reasonable time” → FCC interprets that as “150 days” in a declaratory ruling [not through N&C]
  • Holding (Scalia) – reviewing court should apply Chevron and defer to an A’s interpretation of its own jurisdiction under its organic statute
    • Jx v. non-jx interpretation is a false distinction → could frame any Q of agency action as jx
  • Dissent (Roberts +2) –- Court should NOT defer to A’s jurisdictional determination b/c
    • Concerns about giving As too much interpretive power/defining scope of own power and reducing power of courts to reign them in
    • Court doesn't defer unless C wants it to, and court decides if that’s what C wants



TAKEAWAY – at Step Zero, ask: “Was the agency interpretation claiming deference promulgated pursuant to authority Congress delegated to the agency to make rules with the force of law?” (Mead)* Sometimes includes “Did the agency exercise its powers by acting with the force of law?” [RM/ADJ]

  • Even if the agency is interpreting its own jurisdiction, it is still okay (City of Arlington)
  • Exception – even if A interp passes Mead test, NO Chevron deference if it involves major Qs of deep political/econ decisions that C couldn’t have reasonably expected A to resolve
  • Formality of procedures used is less important than whether C delegated power to make law



Step One: Has Congress spoken clearly?


FDA v. Brown & Williamson Tobacco (2000)* Statute – Food and Drug Cosmetic Act of 1938 grants FDA authority to regulate “drugs,” “devices,” and “combination products” of the two

    • “drugs” = “articles (other than food) intended to affect the structure/any function of the body”
    • “devices” = instrument, apparatus, machine… or other article intended to affect the structure or any function of the body”
  • Facts
    • 1996 – FDA concluded it had authority to regulate nicotine (a “drug”) and cigarettes/dip (“combination products”) → issued regs intended to reduce tobacco consumption by minors to reduce overall incidence of disease and death
    • FDA had previously explicitly/repeatedly disavowed that it had jx to regulate tobacco
  • Holding – FDA’s assertion of jx is impermissible and exceeds the bounds of its authority b/c FDCA is not ambiguous (Chevron Step One)
    • Structural arguments
      • FDCA’s core objective is to ensure regulated products are “safe/effective for intended use” and manufacturers can’t market a drug/device where potential for death/injury is not offset by therapeutic benefit → FDA would HAVE to ban nicotine entirely instead of merely regulating
        • BUT C statutorily precluded removal of tobacco from market in legislation more recent AND more specific than FDCA
      • C has issued six more statutes governing tobacco → comprehensive statutory scheme
    • Historical arguments
      • FDA has always said it lacks jx [but doesn’t really matter b/c A can change position…]
      • C has legislated against backdrop of no FDA jx for 30 years [but dissent: “legis atmosphere” is not law unless embodied in statute]
      • Silence (by C) is acquiescence in FDA’s abdication of jx → C ratified position that FDCA doesn’t give FDA tobacco jx by rejecting bills that would have given FDA jx [but dissent: silence indicates delegation in all other respects!]
        • Also, how much can be read into legislative inaction?
    • Major Qs doctrine
      • C would not implicitly delegate authority to regulate something so pivotal to U.S. econ
        • Shouldn’t this have happened at Step Zero stage per King v. Burwell?
  • Dissent – the purpose of the FDCA/FDA is to regulate in the interest of public health → regulating tobacco use by minors is unquestionably a public health issue, and thus w/in FDA’s jx
    • Congressional silence is delegation, NOT acquiescence
    • Policy changes are okay and can be caused by change in president (Rehnquist in State Farm)



Mass. v. EPA (2007) – How does this pertain to Chevron Step 1??* Clean Air Act – EPA shall by regulation prescribe standards applicable to the emission of any motor vehicle air pollutant if EPA believes it may reasonably be anticipated to endanger public health/welfare

    • “air pollutant” = any physical or chemical substance or matter emitted into or which otherwise enters the ambient air
  • Issue 1: Does EPA have authority to regulate emissions from new cars?
    • SOR = APA § 706(2)(c) – in excess of stat auth
  • Issue 2: If yes, are EPA’s reasons for refusing to regulate consistent with CAA?
    • SOR = APA § 706(2)(a) – A&C
  • Holding 1 – EPA has authority to regulate GHG emissions b/c the statute is unambiguous
    • Stat text says “any air pollution agent, including any physical/chemical substance” → v broad
    • Circumvents B&W – EPA would only regulate, not ban anything; no congressional conflict w/instruction for EPA to regulate; EPA never claimed no jx; C seemed to assume EPA could reg
  • Holding 2 – EPA’s alternative basis for decision (that regulating CO2 is currently “unwise”) is divorced from statutory text and therefore unreasonable/A&C
    • EPA refused to comply with clear statutory command → no reasoned justification for declining to form scientific judgment or refusal to decide whether GHG cause/contribute to climate change
    • EPA must ground its reasons for action/inaction in the statute
  • Dissent (Scalia) – NOT unambiguous that EPA had to regulate
    • EPA gave valid reasons for deferring judgment, but majority ignored them
    • Definition of “air pollutant” is more limited than majority’s POV
    • Broad examples of “air pollutants” are still limited by more specific preceding language





Step Two: Was the agency’s action reasonable?

  • Given that A has interpreted its statute in the face of congressional silence/ambiguity, was its resulting interpretation and policy “permissible” or “reasonable”?
  • Basically an A&C question, but more deferential than HLR
    • Sup. Ct. has only invalidated A action at Step Two twice



Step Two problems

  • Interp #1 – court should set aside an A interp only if it runs up against a clear expression of congressional will (“manifestly contrary to statute”)
    • still makes Q about meaning of statute, which should have been addressed in Step One → collapses Steps One and Two
  • Interp #2 – court should NOT inquire into congressional instruction b/c that’s the realm of Step One; court should instead assess whether A’s decision is reasonable on the merits/not A&C in substance
    • Inquiry is about substantive policy choice → collapses Chevron inquiry w/judicial review of A policy choices under something like A&C standard



Entergy Corp. v. Riverkeeper, Inc. (2009)* Clean Water Act -- EPA had authority to regulate cooling water intake structures at point sources by setting standards that reflected “best tech available for minimizing adverse environmental impact”

  • Facts – EPA set natl performance standards that required significant reductions in environmental harm but NOT the tech that would achieve the highest reductions b/c they would only achieve small gains for a much high cost of compliance (not C/B justified)
  • Holding (Scalia) – EPA’s view that CWA’s “best tech available” (BTA) standard for “minimizing” environmental impact permits C/B-based policymaking is reasonable (if not the most reasonable) interp
    • “minimizing” admits of degree, not necessarily “greatest possible reduction”
    • “minimizing” does not mean “eliminating,” and C has used “eliminating” elsewhere in stat → does not foreclose use of CBA
    • re: “best available,” what makes something “best” – most advantageous v. most efficient?
    • Reasonable for EPA to conclude that CWA’s silence on C/B analysis is not preclusive
    • NOT reasonable to interpret section as requiring tech whose cost is “wholly disproportionate” to its benefits
    • If C has directly spoken to an issue, then A interp contradicting what C said would be unreasonable (and thus fail Step Two, but also Step One initially…)
    • NOTE – majority opinion basically follows Interp #1 above (statutory intent, not A&C review)
  • Concurrence (Breyer)
    • Drafting/legis history make clear that C intended CWA to restrict, but not forbid, C/B analysis
    • Forbidding C/B analysis entirely would lead to irrational results
    • EPA’s approach, given expertise, rests upon a “reasonable interp” of CWA’s legis history
  • Dissent (Stevens, Souter, Ginsburg) – C/B analysis NOT a reasonable interp of CWA’s directive
    • Majority skips Step One – unless costs are SO high that it makes the best tech not “available,” C has decided costs are outweighed by benefit to environment
    • Major Qs doctrine
    • C knows how to authorize C/B analysis, which it did for other parts of CWA but not here



Michigan v. EPA (2015)

  • Facts – 1990 amendments to Clean Air Act require EPA to study the hazards of power plant emissions and determine if reg is “appropriate and necessary”
    • study completed in 1998 → EPA determines reg appropriate/necessary in 2000 (w/o C/B A)
      • appropriate = mercury emissions posed risks to human health, and controls available
      • necessary = act’s other requirements didn’t eliminate risks
    • EPA issues proposed rule in 2011 w/multiple C/B As at different stages → found reg would cost industry $9.6B/yr, w/$4-6M in direct benefits/yr BUT total benefits of $37-90B/yr
  • Holding (Scalia, 5-4) – EPA’s conclusion that reg was “necessary and appropriate” was unreasonable because it refused to consider costs at outset
    • C didn’t require regulation → it told to EPA to determine if it should regulate
    • “appropriate” includes consideration of all relevant factors (Allentown Mack) → impossible to know if regulation is truly appropriate if you don’t consider costs
    • A may not entirely fail to consider an important aspect of the problem (State Farm)
    • As have long treated costs as a centrally relevant factor in deciding whether to regulate → unreasonable to say that costs were irrelevant
    • Can uphold A action ONLY on grounds on which A acted (Chenery)
  • Dissent (Kagan) – NOT unreasonable for A to not consider costs at outset → conclusion should stand
    • EPA explicitly said it would (and did) take costs into account in developing standards
    • Harm from emissions was more than sufficient to justify regulation
    • Impossible to accurate measure costs at the outset anyway
    • Micromanaging EPA’s rulemaking violates C’s allocation of authority
    • Statutory language instructs viewing things as a whole
  • Concurrence (Thomas) – As don’t deserve deference at all and Chevron has gone too far



Natl Cable and Telecomm Assoc. v. Brand X (2005)

  • Facts – FCC ruled after N&C that broadband internet provided by cable companies is an “info service” not a “telecomm service” → broadband internet NOT subject to Telecomm Act of 1996
    • 9th Circuit vacated based on previous case construing Telecomm Act to include cable modem internet as a telecomm service
  • Holding – prior judicial construction of a statute trumps A’s construction otherwise entitled to Chevron deference ONLY IF prior decision holds that construction follows from unambiguous terms of the statute and thus leaves no room for A discretion
  • Dissent (Scalia) – Agencies should not be able to overrule the courts b/c separation of powers



Auer v. Robbins (1997)* A interp of its own regulation controls UNLESS it is plainly erroneous or inconsistent with the reg itself

  • NOTE 1– most courts see this standard as equivalent with Chevron
  • NOTE 2 – Scalia hates Auer deference
    • Gives As incentive to be vague, allows them to rely on internal memos and unpublished materials, enables them to get out of rescinding rules by reinterpreting them w/retroactive effect




Access to the Courts


Relevant concepts re: availability of judicial review

  • Jurisdiction (fed courts are courts of limited jx → has C given jx on such matters? [default = a fed Q]
    • i.e., Securities & Exchange Act – “a person aggrieved by a final order of the Commission… may obtain review of the order in the U.S. Court of Appeals…”
  • Sovereign immunity → Has the govt waived it?
    • Not usually an issue when suing an agency officer individually
    • Resolved for “agency” action by APA § 702
  • Reviewability → is the particular claim reviewable by the courts?
    • Did C intend such claims to be reviewable?
  • Standing → constitutional and prudential requirements
    • Constitutional – injury in fact, causation, redressability
    • Prudential – w/in zone of interests, not generalized grievance, not asserted on behalf of 3P
  • Timing → ripeness, finality, exhaustion



Reviewability * Judicial review of agency action is NOT always available! → look at organic statute

  • Even when available, courts might HAVE to defer to agency findings (Chevron, etc.)



POLICY – why should there be any claim not subject to judicial review?

  • A have expertise on things courts don’t know
  • C clearly gave A decisional authority
  • Consistency/avoiding circuit splits
  • Judicial economy → better than wasting court’s time w/simple issues of a v high volume
  • Accountability for political players → can’t pass the buck to the courts on unfavorable decisions
  • Some claims should be immune
  • If you like an active bureaucracy, JR just slows things down



BUT can Congress legitimately preclude access to Art. III courts? → as yet unchallenged…

  • Constitution grants C authority to “create” federal courts (hence grant OR limit jx)
  • No direct constitutional authority for giving As unreviewable discretion!



Relevant APA provisions

  • § 704 – actions reviewable
    • JR is available for agency action made reviewable by statute or final agency action for which there is no other adequate remedy in a court
  • § 702 – right of review
    • a person suffering legal wrong b/c of agency action, OR adversely affected/aggrieved by agency action w/in the meaning of a relevant statute, is entitled to JR
  • § 551 – definitions
    • (13) – “agency action” = the whole or part of an agency rule, order, license, sanction, relief or the denial thereof, or failure to act
  • § 701 – application; definitions
    • JR applies EXCEPT when
      • Statutes preclude JR or
      • Agency action is committed to agency discretion by law
    • Per principle of expressio unius est exclusion alterius, agency action is reviewable in EVERY situation other than two two [the expression of one thing excludes all others] → creates presumption of reviewability



Presumption of reviewability (Abbott Labs)* A action WILL be reviewable unless there is a persuasive reason [by clear and convincing evidence] to believe C intended to cut off JR → VERY strong presumption in favor of JR!

  • ASK –
    • 1) Is there an express statutory preclusion of review?
      • Would precluding review create a constitutional conflict? → if yes, JR available
      • Constitutional claims are always reviewable!
    • 2) Is this agency action or inaction?
      • If action → (rebuttable) presumption of reviewability
      • If inaction → (rebuttable) presumption of unreviewability



Implicit preclusion


Block v. Community Nutrition Institute (1984)* Agricultural Marketing Agreement Act of 1937 – contemplated dairy handlers and producers (not consumers!) working with Sec’ty of Ag on price regulation of milk products

    • Permitted handlers to obtain review of prices in art. III courts after exhausting admin remedies
      • BUT did not otherwise explicitly preclude price challenges by any party
    • Ag. Sec’ty classified reconstituted milk as drinking milk, not milk powder → higher price f
      • Regs challenged on behalf of milk consumers
  • Issue – given general presumption of reviewability, is consumers’ challenge to milk prices reviewable?
  • Holding (9-0) – NO, consumers’ challenge to milk prices is NOT reviewable b/c statutory structure and language implicitly precludes JR
    • Presumption of JR can be overcome
    • Statute created complex scheme of cooperation that excluded consumers
    • b/c handlers are also consumers, permitting consumers to challenge milk prices renders meaningless statutory requirement that handlers exhaust admin remedies before JR
    • Abbott Labs’s “C&C evd” standard is not as strict as evidentiary standard → only needs to be “fairly discernible” in statutory scheme that C intended to preclude JR
    • POLICY – handlers can represent consumers’ interests → consumers not without recourse



Bowen v. Michigan Academy of Family Physicians (1986)

  • Facts – challenge to HHS reg giving board-certified docs higher Medicare Part B reimbursements
    • Part A = hospital insurance → reviewed by Sec’ty, w/explicit possibility of JR for determinations of amount of benefits or eligibility under Part A AND B
    • Part B = medical insurance → Sec’ty shall set procedures for people receiving late/insufficient Part B payments with review by carrier
    • § 405(h) – findings/decisions of Sec’ty after hearing shall be binding; no action against the U.S. or the Sec’ty shall be brought under fed Q jx to recover on any claim arising out of this chapter
      • intended to keep cases out of court!
  • Holding (9-0) – HHS regs ARE reviewable (presumption of reviewability NOT rebutted)
    • Just b/c some acts are made explicitly reviewable does NOT exclude others from JR too
      • Expressio unius does NOT apply when reading statute to see if it precludes JR
    • Right to review is too important to be beaten by “slender and indeterminate evd of legis intent”
    • Preclusion of reviewability limited to determinations of amounts of benefits, NOT method of determination (which goes beyond individual claimant)
    • Would be illogical to read statute to preclude JR of all controversies except trivial ones (which get reviewed by carriers)
  • TAKEAWAY – court will always read a preclusion narrowly!
  • NOTE – footnote 12 invokes “constitutional avoidance” canon of stat interp.



Explicit preclusion


Johnson v. Robison (1974)

  • Veterans’ Benefit Act – § 211(a) used to read “decision of Administrator on any Q of law or fact concerning a claim for benefits or payments under any law administered by the VA shall be final/conclusive and no other official or court shall have power or jx to review decision”
    • D.C. Circ. in Tracy v. Gleason – preclusion of JR applies to “claim for benefits,” NOT agency action terminating benefits
    • C amended § 211(a) – “any Q of law or fact under any law administered by the VA providing benefits for veterans… shall be final and conclusive…”
  • Issue – Does VBA § 211(a), providing explicit preclusion of any Qs of law/fact under any law administered by VA re: benefits preclude review of the VBA’s constitutionality?
  • Holding – the courts MAY still review a statute’s constitutionality even where the text of the statute precludes JR of any decision made under any law administered by the agency
    • Constitution is not administered by the VA (or any agency)
    • C cannot take away J’s power to determine constitutionality of legislative action



TAKEAWAY – explicit preclusions only survive when 1) narrowly drawn court is backed into it and 2) no constitutional issue is implicated


“Committed to agency discretion”* Reconciling APA §§ 706 and 701

    • § 706 – court shall set aside A decision that is an abuse of discretion (merits)
    • § 701 – JR applies except to the extent action is committed to A discretion (reviewability)



Overton Park v. Volpe (1971)* Sec’ty of Transportation adopted Memphis city council’s finding that route through park was acceptable/necessary w/o formal findings of fact or indication why no feasible alternative routes existed

  • Holding – Sec’ty decision IS reviewable for arbitrary and capriciousness b/c
    • there is no indication that C sought to prohibit JR and there’s no showing of C&C evd of legis intent to restrict access to JR (Abbott Labs)
    • does not fall w/in exception for action “committed to A discretion”
      • v narrow
      • only where “statutes are drawn in such broad terms that there is no law to apply”
        • here, “no feasible alternative” requirement and “all precautions available” provision means Sec’ty had guidelines to meet to avoid abuse of discretion
    • JR is NOT available if
      • Explicit/implicit statutory preclusion
      • Absence of judicially cognizable standards by which to judge agency action, considering
        • Nature and importance of interests
        • Problems w/allowing JR in this area
        • Technical nature of issue
  • Problem – there is always law to apply! → § 702(a)’s A&C standard




Heckler v. Chaney (1985)

  • Facts – death-row inmates argued that FDA had to deem lethal drugs “safe” for execution before they before they could be used for non-medical purposes, and take enforcement action against everyone selling/using them for execution until such time → FDA refused to enforce
    • FDA’s position – unclear if it had jx, and even if it did, it had inherent discretion to decline to pursue certain enforcement actions [‘resources’ trump card!]; historically had only enforced against off-label use when part of scheme to defraud consumers
  • Holding (Rehnquist) – executive admin agency’s decision to exercise its discretion not to undertake certain enforcement actions is [generally] NOT subject to JR under the APA
    • A usually has absolute discretion as to enforcement (or non-enforcement) → agency inaction receives presumption of unreviewability
    • Presumption CAN be rebutted when
      • 1) A claims its inaction is based on a lack of jurisdiction
        • jx Q is “pure Q of law” → assessed under Chevron
      • 2) A exhibits pattern of non-enforcement amount to an abdication of its duty [v rare]
    • Policy reasons
      • 1) “complicated balancing of factors” in deciding whether to enforce (VT Yankee)
      • 2) prosecutorial discretion by As under executive branch → analogous to not reviewing AG’s decision not to prosecute certain cases
      • 3) A’s refusal to act doesn’t exercise coercive power over person’s liberty or property rights → due process concerns not implicated
  • Concurrence (Marshall)
    • rejects distinction in presumption btw action and inaction → refusals to enforce, like preclusion, should be presumptively reviewable in the absence of “C&C” congressional intent to the contrary under the abuse of discretion standard
    • Refusals to enforce could stem from conflict of interest → should be remediable
    • Some JR of reason for A inaction always required to see whether presumption is rebutted
    • BUT would uphold FDA’s non-enforcement on the merits as NOT abuse of discretion
  • CONSIDER – if enforcement isn’t “committed to A discretion,” what DOES § 701(a)(2) encompass?
    • Personnel decisions (Webster v. Doe – CIA firing)
    • Procedure of enforcement decisions maybe?
    • Budget appropriations/allocation
  • UPSHOT – case has been narrowly construed to apply only to enforcement inaction NOT based on statutorily-required A action (like mandatory RM in Mass v. EPA)
    • does not foreclose avenues of review other than APA




Standing


Constitutional reqs –

art. III “cases and controversies”

Prudential reqs –

Judge-made; NOT reqd for citizen suits auth’ed by C

Injury in fact (concrete/particularized, actual/imminent) Not generalized grievance
Causation W/in zone of interests

(NOT “zone of people”!)

Redressability

(by courts!)

Not asserting 3P’s rights (except associational and limited 3P standing)


Standing w/r/t admin law* two types of cases

    • parties are object of regulation → should always have standing
    • parties are beneficiaries of regulation → should not have standing (higher threshold per Lujan)
  • A party may have standing to bring a claim in art. III courts against A action if
    • They are “aggrieved w/in the meaning of the relevant statute” per APA § 702 OR
    • The organic statute explicitly provides standing



Prudential standing


Data Processing v. Camp (1970) – “injury in fact” and “zone of interests” * Bank Service Corp Act § 4 – “no bank service corp may engage in any activity other than the performance of bank services for banks”

  • Facts – Office of Comptroller of Currency (OCC) makes rule that lets natl banks make data-processing services (DPS) available to other banks/their customers → stiffened competition against companies whose primary business is selling DPS
  • Issue – Do DPS sellers have standing under the APA to challenge OCC’s rule on the gorund that OCC’s regulation contravenes BSCA § 4?
  • Holding – Yes, DPS sellers have standing under the APA to challenge OCC’s rule w/r/t/ BSCA § 4
    • Affirms art. III’s “case or controversy” clause as basis for standing in admin law
    • States “injury in fact” standard for constitutional standing → goal of keeping out “fake” harm
    • Establishes “zone of interests” test by interpreting APA § 702, which permits “anyone aggrieved” by agency action within meaning of organic stat to bring suit
      • Congress can decide “who” is aggrieved based on the statute’s meaning/purpose
      • Interest may reflect “aesthetic, conservational, recreational, and economic” values
  • Outcome – BSCA § 4 arguably brings a competitor w/in the zone of interests protected by statute
  • Upshot – “legal” injury is no longer mandatory for standing! → replaced by “injury in fact”



Clarke v. Securities Industry Assoc. (1987) – “arguably within the zone of interests” * Statute = limited “general business” of natl bank to its HQ, limited “branches” to only those kids that states permit state banks to establish, defined “branch” as “any branch place of business at which deposits are received, checks are paid, or money is lent”

    • Statutory purpose = give national banks competitive equality with state-chartered banks by letting them branch only to the same extent as state banks
  • A action = A interpreted “discount brokerage” offices are NOT “branches” under the statute → permitted national banks to open ‘offices’ selling discount brokerage services to the public
    • Securities dealers, who would face stiffer competition as result, sued under APA
  • Holding – the essential “ZOI” inquiry is whether C intended for a particular class of Π to be relied on to challenge agency disregard of the law → not an especially demanding test!
    • Q is NOT whether the congressional purpose was to benefit the ostensible Π
    • Π is NOT arguably w/in ZOI if interests are “so marginally related or inconsistent w/purposes implicit in the statute that it cannot reasonably be assumed that c intended to permit suit”
    • C wanted to keep natl banks from gaining monopoly control over $$ thru unlimited branching → Π competes w/banks to keep monopoly at bay → C has arguably legislated against competition
  • Outcome – securities dealers with profit interest arguably belonged to the statute’s zone of interests



BIG POINT – you MUST know the statutory purpose to determine “zone of interests”!


Air Courier Conf. v. Am. Postal Workers Union (1991)

  • Statute = gave postal service monopoly over carrying letters, but allows service to suspend restrictions on particular mail routes when “the public interest requires”
    • Purpose = protect postal revenues from competition
  • A action = postal service issued reg suspending its monopoly to allow private couriers to deposit w/foreign postal services letters to be delivered in those countries
    • Postal workers union faced curtailment of labor demand → challenged reg under APA
  • Holding – postal workers NOT arguably w/in ZOI b/c their interest was their EM opportunities, not ensuring postal service’s revenue → statute has nothing to do with ensuring employment for workers



NCUA v. First Natl Bank & Trust Co. (1998)

  • FCUA § 109 – federal credit union (FCU) membership limited to groups w/common occupation/assoc.
    • Purpose = make credit available and promote thrift thru natl system of cooperative credit unions
  • A action = NCUA permitted FCUs made of multiple unrelated ER groups, each w/own common bond
    • Banks challenged under APA on grounds that permitting multiple unrelated groups made FCU membership available to more people and drew them away from banks
  • Holding – banks are w/in ZOI b/c of competitive interest in limiting markets FCUs can serve (under Data Processing and Clarke)
    • Distinguished from Air Couriers b/c postal statute regulated competition and postal workers’ interest was unrelated to competitive interest
  • Dissent – statute is not interested in competition! Purpose is securing financial stability for members → banks outside ZOI
  • Outcome – NCUA loses on merits b/c statute was unambiguous under Chevron Step 1
  • Upshot – competitor interest will almost always satisfy ZOI test!



Exceptions to prudential standing requirements


Associational standing

  • Exception to prudential req that Π not assert someone else’s rights
  • Association can sue on behalf of its members when
    • 1) individual members would have standing to sue on their own right
    • 2) the interests the assoc seeks to protect are germane to the org’s purpose
    • 3) neither claim asserted nor relief requested requires indiv members participate in suit
  • Sierra Club – associational standing denied b/c org didn’t allege harm to any individual members
  • SCRAP – associational standing upheld b/c members said increase in littering that would result from rise in railroad rates for recycled materials would harm them personally [aesthetic harm]



Third party standing

  • Π must show
    • 1) injury as a result of the denial of the 3P’s rights
    • 2) an obstacle to the 3P’s direct assertion of rights, and
    • 3) Π must be an appropriate representative [Does this require a close relationship? Hmmm…]
  • Singleton v. Wulff (1976) – physician had 3P standing to vindicate abortion rights since women cannot establish standing throughout entire pendency of lawsuit, since pregnancy is only 9 mos



Citizen suit provisions

  • Bennett v. Spear (1996) – where relevant statute authorizes suit by “any person,” prudential requirements are not applicable
  • Statutes may confer a cause of action on individual citizens which permits them to sue agencies for procedural violations → nullifies prudential requirements, brings everyone into zone of interest, but does NOT create an injury in fact! (See Lujan)



Injury in fact


Lujan v. Defenders of Wildlife (1992) – articulates injury in fact reqs; citizen suit limitations* Endangered Species Act (ESA) requires As to consult w/Sec’ty of either Interior or Commerce to ensure actions are not likely to jeopardize any endangered species

    • Contained “citizen suit” provision permitting any person to institute a civil suit to enjoin anyone (including govt) in violation of chapter (including not consulting with Sec’tys)
  • A action = Interior and Commerce initially promulgated joint reg interpreting ESA to apply to actions taken in foreign nations → jointly revised to limit geographic scope to U.S./territorial waters
  • Π’s injury – environmentalists claimed the revised rule misinterpreted the ESA and that w/o consultation, foreign projects by U.S. agencies were more likely to raise extinction rate
    • Harm alleged – environmental degradation and extinction jeopardy in other nations
    • 3 “nexuses” of inury – ecosystem (anyone in same ecosystem aka world), animal (anyone interested in animals), and vocational (anyone who works with animals)
  • Holding 1 – Πs do not have standing b/c they have failed to show that they would suffer any “actual or imminent” injury-in-fact [first articulation!]
    • Inability to observe an animal species in a distinct location, even for aesthetic reasons, IS a cognizable injury for standing purposes, BUT
      • “someday” intentions to do NOT support a finding of “actual or imminent” harm
      • Πs had no firm plans to return to see animals theoretically threatened → not imminent
      • Πs hadn’t seen the degradation of habitats they posited → not actual
    • Mere interest in species or vocation doesn’t amount to injury; ecosystem theory unavailing
  • Holding 2 – C cannot confer standing on all citizens by a citizen suit provision for procedural violations → there MUST still be an injury-in-fact that is concrete and particularized!
    • Standing for “citizen suits” only available where
      • Πs are trying to enforce a procedural requirement which, if disregarded, could impair a separate concrete interest of theirs;
      • Concrete injury has been suffered by many persons, OR
      • C has created a concrete private interest in outcome of suit against a private party for public benefit (by giving $$ to victorious party to be shared w/citizen who alerted govt)
    • C can’t write around constitutional requirements of standing, including injury in fact
    • Allowing C to turn undifferentiated public interest in A’s compliance w/law [generalized grievance] into indiv right enforceable in court improperly gives exec power to ensure “laws are faithfully executed” to courts
      • Courts province is vindicating individuals’ rights, not public rights
  • Concurrence (Kennedy + Souter)
    • Affiants didn’t go far enough in proving their injury → airlines tickets would have helped
    • C DOES have the power to define injury, it just didn’t do so here
  • Dissent (Blackmun + O’Connor)
    • Reasonable factfinder could conclude Πs would soon return to project sites → satisfies “actual and imminent” standard
    • Court cannot say procedural injuries as a class are insufficient for standing → some procedural rights are inherently enmeshed with substantive rights [narrows holding]



Mass v. EPA (2007)* Πs, including state of Massachusetts, alleged harm in form of loss of coastline from rising sea levels caused by global warming and injury to soverign territory as result of EPA’s refusal to regulate GHGs

    • EPA argued 1) Πs alleged generalized grievance and 2) injury isn’t concrete and particularized
  • Issue – assuming CO2 and other GHGs lead to global warming and rising seas, does Massachusetts have standing to challenge EPA’s refusal to regulate CO2 emissions from U.S. motor vehicles?
    • REMEMBER – Mass. is beneficiary of regulation, not object → much higher standard of proof per Lujan!
  • Holding (Stevens) – YES, Massachusetts DOES have standing
    • Mass has special position as a “state” → has sovereign interest in all earth and air w/in its domain beyond that of its citizens
      • Mass also owns a lot of coastline, but not determinative!
    • Mass has injury-in-fact even though climate change risks are widely shared b/c loss of coastline, even incremental loss, was concrete, particularized, and occurring
  • Dissent (Roberts) – Mass does not have standing
    • If injury in fact is global warming, it is not particularized b/c everyone is affected
    • If injury in fact is loss of coastal land, it is not actual or imminent b/c GW had not enough a significant effect
    • Redress sought is “changing global atmosphere” → not within purview of courts
  • BIG POINTS –
    • 1) lower redressability and immediacy requirements of constitutional factors when C provides a procedural right to sue
    • 2) injury in fact can be widely shared! → rolls back earlier case law suggesting that widely shared harms can’t establish standing
    • 3) baby steps in redressability are still sufficient → rolls back Lujan’s rejection of “micromarginality” of a remedy
    • 4) Kennedy joined only b/c Mass = sovereign Π, and MAYBE b/c C conferred a procedural right



Allen v. Wright (1984)* parents of black children sued IRS for not denying tax-exempt status to private schools that discriminated based on race, even though kids had directly applied to those schools, on grounds that IRS’s failure to act would slow/undermine desegregation efforts w/in school district

    • claimed stigmatic injury from mere fact of govt aid to discriminatory private schools
  • Holding – NO cognizable injury-in-fact b/c harm alleged was not particularized
    • Πs would have to show that they had personally been denied equal treatment by the discriminatory conduct



Causation and redressability


Simon v. E. Ky. Welfare Rights Org. (1976)

  • Facts – Indigent patients challenged IRS tax ruling giving hospitals tax-exempt status even when they turned away non-emergency patients, despite earlier ruling that such hospitals must accept indigent patients “to the extent of its financial ability”
  • Holding – NO standing for lack of causation and redressability
    • Art. III’s “case or controversy” requires that fed courts redress only those injuries traceable to challenged action of a ∆, NOT injury from indep action of 3P non-party
    • Injury by hospitals (in form of denied access) is insufficient to establish standing b/c hospitals are not a party!
    • Purely speculative whether denials of access can be traced to generous tax policy



Allen v. Wright (1984)

  • Facts – Parents of black children sued IRS for not denying tax-exempt status to private schools that discriminated based on race
  • Holding – NO standing b/c no causation – injury from diminished ability to receive education in racially integrated school, while cognizable, is not “fairly traceable” to challenged govt conduct
    • Too attenuated of a causal connection
    • Too many intervening 3Ps (i.e., private schools)



NOTE – NO standing where redressability is speculative! BUT even incremental redress is sufficient


Duke Power Co. v. Carolina Env. Study Group (1978)

  • Facts – environmentalists near nuclear power plants challenged constitutionality of Price-Anderson Act, which limits liability of privately-owned nuclear plants in case of accidents → argued that provision encouraged building more power plants b/c it gave people econ protection
  • Holding – Πs’ claim WOULD be redressable by courts b/c of “but for” causal connection btw Price-Anderson Act and plans to construct more nuclear plants
    • if Act is unconstitutional and liability provision is eliminated, fewer plants would be built



Mass v. EPA (2007)* Issue 1 – is there causation btw EPA’s refusal to regulate and MA’s loss of coastal property?

  • Holding 1 – YES, causation IS established btw EPA’s refusal to regulate and MA’s loss of coastal land
    • EPA admits (while arguing against degree to which) carbon emissions from new cars affect GW → refusal to regulate “contributes” to MA’s injuries, even in a miniscule way
  • Issue 2 – given link btw GHG levels and loss of coastal property, is MA’s injury redressable by EPA’s regulation of GHG?
  • Holding 2 – YES, EPA’s regulation of GHG would redress MA’s injury, EVEN IF only incrementally
    • While regulating emissions will not reverse GW, that doesn’t remove court’s jx to decide whether EPA has duty to try to slow/reduce it
  • Pushback – Is it clear that U.S.’s efforts to reduce GHG emissions will necessarily slow the pace of global emissions levels? → assumes a lot about 3P behaviors!



Clapper v. Amnesty Intl (2013)

  • Attorneys and NGOs challenged FISA amendment that allowed surveillance of communications of “non-U.S. persons” located outside U.S. who were suspected national security threats
    • Injury = incurring travel costs to communicate w/clients to avoid being watched themselves
  • Holding – Πs’ claim is not fairly traceable to govt action
    • Π can’t manufacture standing by inflicting harm [travel costs] based on fears of hypothetical future harm [being listened to by govt]
    • Other cases where preventative measures constituted injury involved more certainty of impending action
  • Dissent – disagrees that this case is distinguishable from other cases
    • Lawyers can't just wait to see if their clients’ communications happen to be intercepted



Informational standing* Organic statute confers standing by giving citizens a right to certain info from an agency

  • Costs
    • Lots of litigation in court
    • addtl uncertainty w/in agencies and regulated entities as to what they must provide/who can sue
  • Benefits
    • Transparency in agencies
    • Info about the intensity of a group’s ideology
    • More informed vote re: candidate’s ideology
  • Like statutory standing for procedural reqs [citizen suits], BUT harder to establish injury in fact



U.S. v. Richardson (1974)

  • Facts – Π challenged govt’s failure to disclose CIA expenditures, allegedly violating constitutional req in art. I, § 9, cl. 7 that “a regular statement and account of the receipts and expenditures of all public money shall be published from time to time.”
  • Holding – claim was a non-justiciable “generalized grievance” b/c the impact of Π is plainly undifferentiated and common to all members of the public
  • Narrow reading = lack of taxpayer standing under a particular Constitutional informational req
  • Broad reading = depriving public of certain info is generalized grievance not amounting to injury-in-fact
  • UPSHOT – taxpayer standing is almost never recognized



FEC v. Akins (1998)

  • FECA – “political committees” (PCs) must register w/FEC and disclose contributions and expenditures
    • “PC” = any group which makes more than $1000k in expenditures in any given year
    • “expenditures” = covers money spent for purpose of influencing any election but EXCLUDES “communication by an org to its members” a/l/a it is
      • a membership org/corp AND
      • not organized primarily for purpose of influencing nomination/election of any indiv
    • Two-part citizen suit provision
      • 1) anyone can file a complaint if they believe Act has been violated
      • 2) JR limited only to “any party aggrieved by an order of the Comm.” dismissing a complaint the party filed
  • AIPAC, an “issue-oriented org” has lobbied official and disseminated info re: candidates → group of voters asked FEC to treat AIPAC as a PC and compel disclosure of contribs/expends
    • FEC rejected AIPAC’s claim that its expenditures were “communication w/its members” b/c AIPAC spent $1k+ in meeting w/and introducing AIPAC to candidates BUT
    • FEC concluded disclosure unnecessary b/c AIPAC was not a PC since “major purpose” was not nominating/electing candidates
  • Issue – Do voters suffer injury in fact by being deprived of info from disclosures that would be required if AIPAC was a classified as a “PC”?
  • Holding – Πs have standing to bring suit against FEC’s determination
    • established injury-in-fact → info would help Π (and others) evaluate candidates/AIPAC’s role in a specific election and make informed voting decisions
    • causation → injury [lack of info] fairly traceable to FEC’s action [APIAC classification]
    • satisfied prudential standing
      • failure to obtain relevant info is injury of kind FECA addresses
      • not generalized grievance though widely shared b/c harm is “concrete and particular” not “abstract/indefinite” in nature
    • C can create rights that bypass prudential requirements
    • Richardson read narrowly to distinguish
      • Constitutional provision v. statutory provision (more narrow)
      • Taxpayer standing v. voter standing
  • Dissent (Scalia, + O’Connor/Thomas) – NO, Πs do not have an injury in fact by being deprived of info as a result of FEC’s classification
    • Maj decision confers ability for private person to bring an exec agency into court to compel enforcement against a third party
    • FECA only gives right to JR to person aggrieved by FEC order refusing to provide info, NOT refusing to compel disclosure by a 3P
    • Injury is not particularized → “generalized grievance,” and Richardson (read broadly) governs
    • A’s refusal to commence enforcement action is committed to agency discretion!



Standing summary


Constitutional requirements

  • NOTES
    • derived from art. III “cases and controversies” req
    • C can’t override by statute
    • Procedural injuries relax causation/redressability reqs
  • 1) injury in fact
    • Lujan – injury in fact requires invasion of legally-protected interest that is
      • a) concrete and particularized, not abstract, and
      • b) actual or imminent, not conjectural/hypothetical
    • Injuries recognized:
      • Economic (Data Processing)
      • Particularized stigma/lack of diversity (Allen)
      • Aesthetic/recreational/environmental (Sierra Club)
      • NOT value-based or “mere interest”
      • NOT increased risk (except maybe with health, environment, safety?)
    • Special cases
      • Mass v. EPA – states with sovereign interests
      • Procedural/informational injuries created by Congress allowing suit for deprivation
  • 2) causation
    • Lujan – injury must be
      • a) fairly traceable to challenged agency action
        • Duke Power – existence of nuclear power plants fairly traceable to corporate liability shield
        • Simon – denial of healthcare not fairly traceable to IRS
        • Allen – school segregation not fairly traceable to IRS
      • b) not the result of independent actions of 3P
        • Simon and Allen
    • Especially small contributions to injury do not preclude standing (Mass v. EPA)
    • Easy for regulatory object to prove causation; “substantially more difficult” for regulatory beneficiary (Lujan)
    • Where causation is attenuated, harder to establish causation
    • Harm to oneself due to fear of govt intervention does not establish causation (Clapper)
  • 3) redressability
    • rule = injury must be likely to be redressed by court action, not merely speculative
      • size of contribution of court action to redress injury is irrelevant (Mass v. EPA)
      • where redress depends on intervening/indep actions of 3Ps, too speculative to find redressability (Simon; Allen)
      • self-imposed burdens based on fear and speculation are manufactured injuries which cannot confer standing (Clapper)



Prudential requirements

  • NOTES
    • Court-developed doctrines
    • Congress can relax or eliminate by statute
      • i.e, “suit by any person” eliminates prudential reqs
  • 1) arguably w/in zone of interests
    • The invaded interest claimed must be “arguably w/in the zone of interests protected or regulated” by the statute for standing (Natl Credit Union)
    • If interest is “so marginally related or inconsistent w/statute,” no standing (Clarke)
    • Where statute protects against competitive injury/expands market, competitors are arguably w/in ZIO, but competitive interests not a guarantee (Data Processing/Natl Credit Union)
    • ASK – Did Congress intend these Πs to be relied on to challenge the agency?
      • Focus on interest, not Π → what does the statute DO?
  • 2) no third party standing
    • rationale – party must represent its own interests
    • associational standing permitted when
      • a) members would otherwise have standing
      • b) the interests org seeks to protect are germane to its purpose and
      • c) neither claim asserted nor relief requested requires participation of indiv members
    • 3P standing permitted only when
      • a) injury results from denial of 3P’s rights
      • b) obstacle to 3P’s direct assertion of rights and
      • c) Π is appropriate representative
  • 3) no generalized grievances
    • rationale – avoid overflowing courts; use political process
    • Mass v. EPA – “widely shared” does not mean “non-justiciable” so long as Π can point to specific harm
    • Richardson – govt spending decisions are generalized grievances; taxpayer standing almost never recognized
    • Akins -- C can override presumption against generalized grievances via statute by granting bounty or other concrete interest (like disclosure of info)



Statutory standing

  • procedural standing/citizen suits
    • procedural injury results from govt failing to follow procedures
    • injury MUST still be concrete and particularized, actual and imminent; but causation and redressability may be relaxed (Lujan fn. 23; Mass v. EPA)
    • Citizen suit provision cannot confer standing to everyone w/o necessary injury-in-fact (Lujan)
    • Statutes now tend to grant standing to “aggrieved” persons → implies that constitutional standing reqs must be met
  • informational standing
    • rule = class of interested persons suffer injury in fact when agencies fail to collect information required by statute
    • harm is concrete and particularized, though widely shared (Akins)
    • information helps us hold elected officials accountable



Timing


Ripeness

  • justiciability doctrine preventing courts from premature adjudication (Abbott Labs)
    • ensures problematic A action has had concrete effect instead of just conjectural/abstract
    • protects agencies from judicial interference until a decision has been formalized
  • legal basis
    • art. III limits on judiciary’s power
    • prudential reasons for refusing to exercise jurisdiction
      • may still be considered on court’s own motion, even if not raised by parties
  • APA § 706 – actions reviewable
    • A action is reviewable (and therefore “ripe”?) when it is
      • Made reviewable by statute or
      • Final agency action for which there is no other adequate remedy in a court
    • Preliminary, procedural, or intermediate agency action/rulings not directly reviewable ARE subject to review on the review of final agency action
  • Is it reviewable?
    • ADJ? → YES, b/c orders are final
    • RM?
      • After rule is promulgated and post-enforcement → YES, b/c Π was enforced against
      • Before rule adopted → NO, at least under APA, b/c action is not “final”
      • After rule adopted, but before enforcement → YES, as long as controversy is ripe
        • Pre-enforcement challenges are presumptively ripe under Abbott test
        • Relief HAS to be injunctive/declaratory
        • Most rule challenges occur pre-enforcement
    • Informal action? → tricky and unclear!
      • depends on reversibility v. absoluteness; bindingness of decision on agency/lower staff
    • Agency inaction → presumptively NOT reviewable
      • ASK – has A’s inaction ripened into outright refusal to act?
  • Ripeness in admin law pre-Abbott Labs
    • Presumption of unripeness until ADJ (U.S. v. LA and Salt Lake RR (1927))
    • Most rule challenges occur post-enforcement
    • Ripeness shifts from formal to functional doctrine → 3 considerations made presumption of “unripeness” easy to overcome (CBS v. U.S. (1942))
      • Will waiting cause injury?
      • How will waiting affect A?
      • How will immediate review affect the courts?



Abbott Labs v. Gardner (1967)

  • 1962 amendment to FDCA – required drug manufacturers to print drug’s generic name prominently and in type at least half as large as the brand name
    • Purpose = promote competition, ensure doctors/patients have choices
  • FDA’s N&C regs – generic name must always accompany each appearance of proprietary name
    • Mfctrs challenged rule as beyond statutory authority → sought injunction to stop enforcement
      • If rule were enforced, mfctrs would have to either
        • 1) comply and incur significant costs by reprinting all labels OR
        • 2) not comply and be fined/incur reputational costs
  • Issue – Can parties who will be aggrieved by enforcement of agency rules seek pre-enforcement JR of the rule under the APA?
  • Holding – injunctive/declaratory relief is discretionary and courts will only consider such conflicts if they are ripe for JR, based on two-part test [in practice, two steps; not a balancing]
    • court must evaluate
      • 1) the fitness of the issues for judicial decision-making
        • is action final w/in meaning of APA
        • is question presented purely legal?
      • 2) the hardship to the particular parties of withholding court consideration
        • rooted in equity or maybe art. III, not the APA
    • Here,
      • 1) fitness of issues → YES
        • purely legal Q = whether FDA properly construed statute
        • final agency action = includes any “rule,” and FDA’s action was N&C RM
      • 2) hardship to parties → YES
        • impact of regs upon Π is sufficiently direct/immediate (no good alternative)
    • Where legal issue is fit for jud. resolution and regulation requires immediate/significant change in Π’s conduct w/serious penalties for noncompliance, access to courts MUST be permitted
      • Fairly easy standard to meet! Many rules come w/penalties and present legal issues


Toilet Goods Ass’n v. Gardner (1967)

  • 1960 amendment to FDCA expanded FDA’s authority to regulate color additives → FDA issued rule that manufacturers who deny FDA access to “facilities, processes, and formulae” involved in color additives could have certification required for marketing suspended until access permitted
  • Holding – NOT ripe for JR b/c hardship to parties has not yet materialized
    • Issue presented IS a pure Q of law, but
    • Regulation serves notice only that FDA MAY order inspection and certification MAY be refused → regulations’ validity will depend on what types of enforcement problems FDA encounters
      • No adverse consequences from requiring a later challenge
  • Pushback – but what about trade secrets?



Gardner v. Toilet Goods Ass’n (1967)

  • 1960 amendment to FDCA prohibited manufacture and distribution of color additives unless approved by FDA as safe, subject to criminal sanctions → FDA issued rule providing that “color additives” include dilutents, narrowly construing statutory exemption for hair dyes
    • effect = expanding preexisting definition of “color additives”
  • Holding – RIPE for JR b/c
    • 1) issue presented is pure Q of law/statutory construction
    • 2) manufacturers had to comply at substantial expense or defy regulations at risk of serious sanctions
  • Dissent – majority is empowering federal district court judges to halt and delay regulations that are intended to protect consumers
    • Pushes As away from RM and towards ADJ → less consistency/transparency
    • Exacerbates public choice concerns by giving industry too much power (b/c easier to get standing as a regulatory object)





Finality* Codified in APA § 704

  • Two conditions must be satisfied
    • 1) action consummates agency’s decision-making process – NOT interlocutory/tentative
    • 2) action must be one by which “rights or obligations have been determined”
  • Examples
    • Warning letters → NOT final (per D.C. Cir.)
    • Compliance orders → FINAL (per Sup. Ct.)
    • Statements of general policy – NOT final
      • BUT procedures used to create them/whether they should have gone thru N&C ARE



Exhaustion

  • Refers to steps a private citizen must take before obtaining JR
  • Types of “exhaustion”
    • Classical exhaustion
    • Interlocutory appeal
    • Waiver of unpresented claims
  • Ripeness v. exhaustion
    • Ripeness = will A take another action?
    • Exhaustion = is there something a private citizen should do through agency to solve problem?
  • Policy justifications
    • Avoiding wasted resources (w/in agency and w/in judiciary)
    • More complete record on review
    • Respects congressional intent (created alternative avenue to JR by statute) and sep. of powers




Classical exhaustion [generally required]


Myers v. Bethlehem Shipbuilding Corp. (1938)

  • Π tried to circumvent NLRB complaint structure by filing injunction w/dist ct. to deny NLRB jx
  • Holding – dist ct did NOT have jx to grant Π’s injunction
    • No claim that statutory provisions re: review were illegal (aka unconstitutional)
    • Statutory scheme gives NLRB exclusive jx → suggested implied preclusion → dist ct. lacks jx
    • Π has not exhausted remedies as C prescribed (i.e., hearing by ALJ and review by NLRB) before seeking JR → exhaustion can’t be circumvented by claiming complaint is groundless


Three exceptions to classical exhaustion req* 1) would cause undue prejudice to subsequent court action

    • unreasonable/indefinite time frame for admin action
    • irreparable harm to Π (e.g., welfare benefits)
  • 2) agency lacks power to grant effective relief, even after exhaustion
    • agency may lack institutional competence (e.g. issue presents constitutionality Q)
    • challenge may be to adequacy of agency procedure itself
  • 3) agency bias of predetermined issues
    • would be futile to go through agency channels b/c agency position already “decided”
    • e.g., AG has taken public stance on issue; FTC chairman perceived to be biased


Interlocutory appeals [generally not allowed]


FTC v. Standard Oil Co. (1980)

  • After FTC filed complaint against ∆ Standard Oil, ∆ filed MTD w/FTC ALJ → after ALJ rejected MTD, ∆ appealed to district court instead of continuing onto hearing on the merits through FTC ALJ
  • Holding – issuance of a complaint has no legal force and, if groundless, poses no undue hardship other than having to defend against it (applying Abbott)
    • Policy justification for denying interlocutory appeals
      • Interferes w/proper functioning of agency and burdens courts
      • Provides opportunity for A to correct mistakes/apply expertise
      • Disfavor of “piecemeal review” – inefficient, possibly unnecessary
      • A will ultimately address whether Act was violated → no miscarriage of justice
      • Prevents turning prosecutor into defendant before ADJ is over


Waiver of unpresented claims [generally, unpresented claims waived both in court and before agencies]

  • REMEMBER -- after agency adopts a rule, party making challenge cannot raise a new argument against the rule that wasn’t presented at N&C stage


McKart v. U.S. (1969)

  • Facts – Π’s father killed in WWII, so Π classified as non-draftable b/c “sole surviving son” → Π’s mother dies → local board erroneously reclassifies Π to remove “sole surviving son” exemption → Π doesn’t contest reclassification before board → Π gets drafted and fails to report → criminal conviction! → Π challenged → govt argues that even if reclassification erroneous, Π waived claim by no contest
  • Issue – is Π barred from raising argument that he is exempt from draft before courts because he didn't raise claim before agency?
  • Holding – NO, Π is NOT barred b/c exhaustion doctrine is relaxed in criminal cases like this one
    • Even though typically, his case would have been waived
    • Issue was solely one of statutory interpretation (pre-Chevron) → no agency expertise needed, not at agency discretion
    • Unlikely to burden the govt too much to permit JR in these cases (b/c criminal liability is rare)
  • NOTE – probably “wrongly” decided, but court will make exceptions b/c alternative is unjust