Substantive law deals with the regulations made by ...



Substantive law deals with the regulations made by agencies, admin law deals with the laws that rule those agencies. Section 551 of Administrative Procedure Act defines what an administrative agency is. Basically anything but the courts, congress and, although the definition does not say so, the president (Franklin v. Massachusetts).

Independent agencies, unlike executive agencies, their heads don’t serve at the pleasure of president but are committees and stager and rotate members every so many years, no one party can rule the agency, multimember bodies that not one single president can change.

Agencies are created and empowered by legislations and some are set out as independent and some are executive agencies.

Either regulate private conduct or carry out entitlement programs (distribute benefits from the government).

Two main branches:

• How agencies do their work: the processes they follow in doing their work. Administrative Procedure Act. Main statute we’ll be looking at: Formal procedure (spelled out) But we also will look at in practice how it’s done, so the informal procedural not really written down in manual or statutes. He’s hesitant to use the formal or informal names b/c they will have a different meaning later on.

• Review and oversight. There are constraints on executive. Judicial review mainly, although the voters and congress also constrain the president and executive. We’ll mostly read about judicial review of executive action. How is that done, are there general standards for the power of the ct to look over the shoulders of government agencies. On what basis can a ct say to an executive agency that they’ve messed up. Those standards are not very precise. When agencies get too heavy handed there’s a general outcry for government to get off our backs and is interfering with people’s lives and with the workings of the free market place. So many times in the law itself there is a requirement that agencies engage in economic analysis of cost-benefit to balance the interests at stake: private and public.

Fundamental question addressed by Administrative law is how can the legal system establish limits on the pervasive power that those agencies have and at the same time allow them to do their work and not unduly restrict individual freedom. The new deal created a much more powerful government and recognized that we need it and we need the instruments to control society and yet we need to establish control over the controllers that have so much discretion. THIS is the broader issue, the policy behind the agencies and the concern of how do we protect individual rights. There is a lot of constitutional law and political theory.

So watch for general principles that apply to any agency and more specific applications for a particular agency. So the peculiarities of any agency will shape the way general principles apply.

01-09-08

The three functions of agencies:

Rule making

Adjudication and

Investigation.

Rulemaking: agencies publish their regulations in the Federal Register. And then the gov’t publishes them annually in the code of federal regulations (CFR).They are subject to judicial review of whether they have surpassed the agencies statutory authority. Only valid if agency follows the procedural requirements applicable to rulemaking.

Two types of rulemaking:

Formal and informal. Formal has three steps: notice, chance to participate and statement concise and general of their basis and purpose (of the regulations). Generally done this way except for interpretive rules, statements of policy, etc. or for good cause for bypassing the notice stage of rulemaking.

Adjudication: Some agencies cannot adjudicate violations of statutes they enforce and they can only sue in federal courts. Others can administratively enforce. Some can do compliance orders (like injunctions) and penalty orders (equivalent of fines). Clean water act allows EPA to issue orders and obtain penalties administratively w/o going to ct. Cases are tried in front of an administrative Law judge, usually someone from the agency but subject to salary paid by someone else and under review by someone else to ensure independence.

Investigation: some agencies have power to compel persons to turn over to them information or to inspect the premises where they work or reside.

APA is codified in title 5 of the US Code. Section 551 has the definition. Section 552 is actually seldom considered part of the APA because it is actually FOIA (Freedom of information act).

Let’s look at 551; How does the statute define rule making and adjudication? The statute applies to agencies and those are defined as each authority of the government of the US but basically not courts or congress and case law has determined that the president is also not an agency.

Agency action in 551 (13): includes the whole or a part of an agency rule, order, license, sanction, relief, or the equivalent or denial thereof, or failiure to act (so when they don’t act, you’re allowed to sue them for that too!)

(5)Rule making: agency process for formulating, amending or repealing a rule.

(4) Rule: agency statement of applicability whether general aplicability (or specific, but usually general applicability) of future effect, designed to implement a particular policy. KEY is that it is FUTURE effect. (see the whole definition).

PLEASE NOTE: Agencies promulgate regulations and/or rules, legislature pass statutes.

(7) Adjudication: agency process for the formulation of an order (NOT A RULE, PLEASE NOTE THIS) So orders come from adjudication, rules from rulemaking.

(6) Order: whole or part of a final disposition whether affirmative, negative, injunctive, or declaratory in form, of an agency in a matter other than rule making but including licensing. (so, in other words, anything that is not a rule, is an order.

Two Types of rulemaking proceeding under APA:

Informal: §553 (notice and comment). Usually the majority of rules are made this way.

Formal: §556 and 557. Nickname is trial type rule making. Conducted in a way you would expect a formal court proceeding to be done. “On the record” rulemaking. Meaning only information that can affect the rule is the information that goes to the record of that proceeding. Formal is seldom done. And the editors say that it really doesn’t make sense to engage in rule making through this process. That’s why almost no one does it. BUT there is a certain trigger that has to be in the agency’s governing statute that says it has to be “on the record” hearing for formal to be used.

But there is another type, not under the APA: hybrid. More than informal but less than formal. May require some input from public whether in writing, oral or electronically. So the APA does not require it but the statute does require it so the editors have called it a hybrid. So it reminds us that agencies are ruled not only by the APA but also by their own enabling legislations, the statute that creates the agency. So it is from those additional requirements specific to that agency that the hybrid procedures come.

Adjudication under APA:

1- formal adjudication is under §554, 556,557. Trial type on the record.

But mostly, day to day adjudication is informal. Since the APA does not address them, they are subject to judicial review on the basis of not being done according to the enabling statute, and they can also be subject to due process challenges.

Because these mirror the separation of powers in the government, we may have some problems perhaps even constitutional problems because these all are vested in the same agency and that may give them too much power. Historic background: note 2 on page 28. The APA in large part is a response to those concerns. It limits the powers and sets out ground rules and procedures that agencies must follow to do all their functions. The APA was a compromise between business and proponents of the New Deal and high regulation. Business lost in the sense that way more regulation is there, but they won a victory with the APA because they have limited those agencies’ powers to do what they do and the potential for abuse. The APA slows down the government and makes it so that things need to be on the record and there’s not as much arbitrariness. So APA comes out of a highly charged political context.

Also, on page 29 there are some objectives or purposes for APA:

• Meaningful participation on government decision processes that affect your property and life. Very much a democratic value

• Accuracy in the fact finding. Bring to light info that is relevant and necessary for agency to do its job.

• Efficiency in getting the job done.

• Acceptability of the fairness of the procedure by the general public and the participants.

There are also tradeoffs between the procedures and the substantive requirements. See note 6.

Note 7 pokes a hole in what you might be tempted to go for in a stereotype as to who favors more procedures in government. Not necessarily always the public.

Note to self: regarding Hanson. Look at California APA and the enabling statute for the state mining board to see if they are allowed to delegate the regulation of mines to counties, and whether the procedural requirements are also passed down to the county level.

1-14-08:

Lawyer Helen problem. Clean Water act and wetlands problem for building the retirement home. Why would she meet with Jay (lawyer from army corp of engineers)? Get information from him directly, identify what the specific problem or obstacle is under the agencies interpretation of regulation and get a quicker resolution to the problem.

Why should it be Jay? Why not the phone person who said a permit would be required? There might be a tribal custom here that lawyers prefer to talk to other lawyers. There’s a presumption that at least Jay would be able to direct you to the right person to talk to if it’s not true. Perhaps the assumption that the lawyer could influence the outcome of the case. Maybe the bureaucrat that gave you the advise had no clue of what he said.

Should jay meet with Helen? Maybe duck! That way you could potentially avoid a lawsuit. But his job is to serve the public, so shouldn’t he serve Helen? He could also just listen to her without any guarantees that he will say anything, but at least it gives him an idea as well as to what may be coming down the line as far as litigation maybe. Or if the agency has an outreach open door policy or clinic type thing.

What should her strategy be? Why not just sue the corps to find out if the permit applies or not? Time and money to litigate. She has not exhausted her administrative remedies. It is not reviewable yet because there is no final adjudication. She may want to do some legal research, photograph the area where she wants to build (lay of the land) (timing problem if the area doesn’t look the same all year round! Are there more ducks or less ducks? So if Jay thinks there are wetlands, do you shred them? Maybe not? So it may not be the best thing to do. As far as arguments:

• Legal arguments: if you do some legal research as long as it doesn’t break the bank for the client, perhaps it’s even a good idea to give them a quasi-brief laying out your legal arguments. That way Jay can refer to them when presenting the case to higher ups, etc.

• This may not be good precedent to set for the agencies from the point of view of resources. Public relations perspective, etc.

• Personal: client had expectation of retiring in this property and does agency really want to defeat that expectation on a technicality?

• Equitable consideration: why make them get a permit when others in the area don’t have it? It would set the agency after the others and may backfire as strategy, but maybe not, because your client’s interest is to be protected at the expense of everyone else.

Jay has an interest in not getting the agency sued. The Department of Justice are the litigators that represent federal agencies in litigations but agency lawyers would be involved anyway and agency budget is not going to be happy. Publicity which is not good for the agency. IN this case, not only the agency is blamed but the department under which it is and the president himself!

Problem 1-2 page 31. Jay knows SCOTUS decided a case that addressed one type of land and whether it was subject to the permit requirement. That land hosted migratory birds, was not navigable and was not connected to interstate waters so it was not subject to Clean Water Act. So Corps Chief counsel issues a memo to be followed by all divisions. Memo was never under notice and comment under 553. So it was not adopted as rulemaking process said under 553. The memo says that act does apply to lands where if there is degradation or destruction that would affect interstate commerce b/c it is used for recreational purposes. What is that memo? It is an interpretive rule because it has a future effect but it is within the exception to notice and comment under 553(b) saying that interpretive rules are not subject to notice and comment because it is a statement of policy or an interpretation of a court ruling, etc. So it probably has some weight since it was written by his superior and he’s supposed to follow it. BUT since it doesn’t go through notice and comment it is not published by federal registers so Helen does not know about it! But under FOIA they are supposed to publish an interpretation of law of general applicability, so Helen can find it and public knows about it. Except to the extent that a person has actual and timely notice of a person can not be made bound if the agency is supposed to publish it. Timely and actual notice is when Jay tells her.

January 16:

STUDY AIDS:

If we need extra help in this class get examples and explanations admin law second edition 2006 author is Funk, Seamon? One of the authors of our book. Also may check out Questions and answers by Weaver, another author of the book, but Ken does not do exams like that. There’s also a Understanding lexis nexis series book, and a nutshell for admin law. There’s also Admin law stories. Just like we had tort stories. The cases there are discussed thoroughly with contextualization etc. All of these should be in the library.

Problem 1-3 on page 32:

Jay says the wetlands are under the regulation b/c it may affect recreational waters nearby and as such interstate commerce. What is that letter reflecting his opinion?

Adjudicatory order? Sounds like he made a specific determination. But it has future effects and implements a policy, so since it sets precedent, it feels like a rule as well. Not a clear language to the question. But usually a rule is written in more general applicability language than an order. We’re probably on more solid ground saying it’s an order because it is more specifically applicable. HOWEVER, it’s also not a final disposition because he probably does not have the authority to issue an order, there’s been no process, and no request to issue a disposition from the agency. It sounds like it’s just an opinion. Does this have as much force as the General counsel memorandum? Probably not.

If it’s not a rule or an order, what is it under the APA? Nothing! Section 545 says the triggering requirements for going through trial proceedings are not called out in this situation. There’s no statutory language saying that before you write a letter like this you need a hearing.

But Helen does not like it. What should she do? File the permit. Jay may be wrong, and they still need a final adjudication and there are procedural requirements that need to be exhausted. You may also work with the agency to find some accommodations rather than sue immediately.

Problem 1-4:

Jay says it’s not subject to the regulation. And she can go ahead without a permit. What should the National Wildlife Federation do? How would they find out? His letter is not subject to the publication requirements because it’s not like the memorandum from general counsel. So I suggested having a mailing list of interested parties and organizations so they can be informed of any construction going on in the area.

If the NWF does not like jay’s letter, it can try to lobby Jay to change his mind and require a permit. All this lobbying and involvement of third parties will be covered later on. We have also issues of ripeness and standing.

Who is the client when you’re a government lawyer? Apparently the agency you represent.

Ethics: page 42.

Should Jay grant the permit and go along with the President or not grant it because it is inconsistent with the agencies’ view? According to Fein, the president is your boss and he was elected and his policy preferences should be respected. Assumption in electoral process is that where there are ambiguities, if a president directs an interpretation within the bounds of the law, you should obey it. But who is your client? The public interest broadly? How do you deal with that? Should your personal feelings about the public interest color your actions as lawyer for the organization?

January 23, 2008

Rulemaking:

The most important part of an agency’s function because it is to rules and regulations we turn most often, not to statutes when we need to understand what laws apply.

Chronological process:

Initiation of rulemaking:

At least four sources:

• Statutory mandate may call for regulations to be made and even if statute does not say it but agency knows it needs to then:

• Within the staff recommendation. Staff intiated rulemaking. Bottom up

• Top Down: prompt letters from the Office of Management and Budget (OMB) or the president memos.

• 553 (e) petitions for rulemaking: agencies will give opportunity for interested parties to petition for rulemaking.

553 (c) governs formal rulemaking that requires an “on the record” rulemaking as per the statute. It sends you to sections 556 and 557 to follow those directions. Most rulemaking, however, is done according to notice and opportunity to comment under 553, the informal rulemaking.

553(b) tells you about the notice that needs to be published in the federal register (NOPR (notice of proposed rulemaking)). There could be challenges to the content of the NOPR if they were not accurate because if the notice does not alert interested public of what the real issue was, there is no notice at all.

Notice is the first requirement of informal rulemaking under 553.

553(c) says that agency will offer an opportunity to comment in a written views and comment. Hence, notice and comment. Written comment. No requirement of hearing.

Also under c, it says that after comment, the agency will include a concise general statement of its basis and purpose (for whatever rule they decided to adop) and it is published in federal register.

The rest of c tells you about the formal rulemaking stuff and sends you to 556, 557.

So 553 is the main event or arena as far as procedures required. But they also have to abide by the own agency’s procedures to rulemaking. CFR publishes the rules of the agencies. (?) it also publishes the agencies’ own internal rules. They are also published on the websites. Some agencies are also allowing submissions of comments electronically. They also have to comply with constitutional requirements and judicial review on these is appropriate, but courts cannot make rules for agencies otherwise. Also they have to comply with the organic statute that created the agency and follow those directions (and those may require a hearing). And other statutory requirements. Also, the use of an advisory committee by an agency is governed by a particular statute and there are procedures for how other agencies and people can have input into the rulemaking (regulatory negotiation). Judicial interpretations of 553 affect rulemaking as well. Last source are presidential executive orders: like regulatory impact analysis reports that are required: they call for the cost-effectiveness or economic impact of regulations.

Input from people who would like rulemaking from the agency:

Problem 2-1: Fifra problem about pesticide. You need a license to sell it and to do that you need to show that it is effective and safe for the environment. SO you need tests and experiments. To do those you need a permit and that can be costly and time consuming. There is an exemption from the permit for chemical pesticides for small field tests. Your company makes biotech bioengineered bacterial based pesticides and those are not included as chemical pesticides. They want to do small field tests but don’t want the permit process. What do you do? Since you need to get them exempted as well, where do you go? You basically want the rule changed. But to whom do you talk? You might want to form a coalition with allies who do know how to deal with the agency, maybe people who have opposed the chemical pesticides to see if they can push the cause forward. You can call anyone there and ask them to talk to them, NO ethical problems there. If you treat them to lunch, that could become dicier. You can also file the petition to get the ball rolling but the agency may take as long as they want as long as it is reasonable… what ever that means! You can just write a letter requesting the rulemaking, it does not have to be any specified paper (but check anyway). No attorney needed. Any interested person.

You should also file for the permit at the same time so you can get both processes going. Some natural allies would be environmental groups who want chemicals gone, retailers, consumers, agricultural workers, lobbyists from Washington, especially because it gets national attention for the issue, or a Washington lawyer who knows his way around this agency.

What arguments would you make? That this is also benefiting the agency because it makes them look good that they are providing incentives for non-chemical pesticides and that benefits the environment. You approach it from the point of view of the agency and what their benefits are in changing the regulation and align your interests with those of the agency. And send the petition according to the agency’s requirements for a petition.

So when you file and agency does not act on it, what do you do?

Can you challenge non action? Yes, under section 702 allows legal review by a person harmed by an agency action. How is inaction the same as action? The definition in 551 includes failure to act! So that’s what action means: action or inaction. Failure to act=action. 706 is scope of review: reviewing ct shall compel agency action when unreasonably delayed action or unlawfully denied. (read) So you may have an interlocutory appeal to a court. Sometimes courts can issue a writ of mandamus ordering agencies to take action or engage in rulemaking. Trac case, the court is hesistant to force agency to act. They don’t want to interfere with the discretion of the agencies in setting priorities. They set out some 6 factors as to what to look at when assessing agency delay. But they find that four years delay is unreasonable so instead of issuing a mandamus, they retain jurisdiction. They are very reluctant. IN the spotted owl case they give the agency 90 days to come back and tell them why they made the decision and why it’s not “arbitrary and capricious”.

553 e allows people to petition for rulemaking from an agency. Federal clearn air act allows California to impose more stringent standards to protect the air from pollution but whatever standard California takes don’t take effect until the EPA applies it. So Ca petitioned for rulemaking and EPA just sat on it and CA sued for failure to act along with other 14 states regarding Ca’s tail pipe emissions standards, and EPA finally denied the petition, since this is a final adjudication it is being appealed. Under section 702 you can get judicial review if you have been harmed by agency action (or inaction according to section 551. Remedy section 7 something says court can compel agency action.

However, the TRAC case and even the spotted owl case reveal that the courts are very reluctant to compel any kind of action from agencies and have great deference for agencies. So, in TRAC the ct retains jx and in the owl they give the agency more time to state why they decided what they decided. In TRAC there are six criteria as to whether the ct should issue a mandamus: 1- the time they take to make decisions must be governed by a rule of reason 2- the rule of reason may be guided by any timetables set out by congress 3- delays that might be reasonable in the sphere of economic regulation are less tolerable when human health and welfare are at stake 4- ct should consider the effect of expediting delayed action on agency activities of a higher or competing priorities 5- the ct should also take into account the nature and extent of the interests prejudiced by the delay and 6- the ct need not find any impropriety lurking behind agency lassitude in order to hold that agency action is unreasonably denied.

But should the ct be able to re order the agency’s priorities? What if you have several lawsuits sending agency in different directions and now they have several projects in top priority? That’s why cts may be reluctant to get into that.

If the ct were to find that the time is unreasonable what kind of remedy is available? Ct can issue a writ of mandamus, or can request a timetable or cooperative dialog to determine what is reasonable. BUT the likelihood of success in any lawsuit against an agency for this type of thing is slim to none.

If, however, the agency denies petition, how likely is it that a ct will reverse the determination of the agency? The APA requires a brief statement of the reasons for the denial. Agency can claim it’s busy reviewing other cases or current policy is working well.

• Arkansas Power and light co. v interstate: ct determines that denial of petition is the right thing to do. Ct found the agency had sufficiently explained itself and that the alternatives proposed by agency were good enough to solve the petitioner’s problems. It currently allowed a case by case basis review and the ct determined that was sufficient. Agency says that compiling the database is going to be too resource consuming for both railroads and agency. If an agency has a choice based on the organic statute of using rulemaking or some other mechanism to operate, then the agency’s choice, as long as well supported, will stand.

• Northern Spotted Owl says that decision not to list the owl contrary to even agency experts opinions was capricious and arbitrary under section 706(2)(A). and agency did not explain how they rationally decided what they decided. No explanation and no logical connection between experts and the decision. So ct gives them an additional 90 days to amend and explain why they came up the other way. They remand the case to lower ct and give agency deference to come and explain their decision. They could have ordered them to include the owl but they are reluctant to get into an area where the agency has the expertise.

So what if and agency says they will go through rulemaking and do so and then decide they won’t after all? What would court do then? Having gone through the process, and reaching the “wrong” decision (not to do the rulemaking) the ct is in a better position to determine if the decision was right or wrong. If it is well explained ct will probably uphold. Whereas when the agency only declines to engage in rulemaking, the ct does not have much to work with.

A ct is more likely to defer to agency when agency has sat on the case than when it has acted!

By the way, the DC circuit is the font of wisdom regarding administrative law because that’s where most cases are brought since the agencies are there and you have venue there. Also, some statutes specifically state that you must bring the action in DC.

EXCEPTIONS TO RULEMAKING:

553(a): General exceptions: out of any rulemaking at all under APA. So it does not send you to 556 or 557 .

• military or foreign affairs functions and rules involving agency management or personnel or involving public property, loans, grants, benefits or contracts.

and then specific exceptions in 553(b): so not subject to notice and comment requirements. does not apply to:

• interpretive rules

• rules of organization and procedure or practice

• general statements of policy and

• other rules for which notice and public procedures are:

o impracticable, (when the due and required agency functions would be unavoidably prevented by its undertaking public rule making proceedings)

o unnecessary (minor technicalities and public is not particularly interested)

o or contrary to the public interest (if there is no public interest in this issue the agency does not have to do this) (my question is whether this is the correct interpretation of public interest…Ken shares my discontent with this interpretation)

o and good cause needs to be shown for these.

But agencies appear to think that the burden of notice and comment are heavier than the benefits.

But the conundrum is to decide whether something is a procedural rule or a substantive rule. Three cases: American Hospital Assn v Bowen, air transport association of America v dept. of transportation, and finally JEM broadcasting co. v. FCC.

In American Hospital the ct says that if a rule or agency action also encodes a substantive value judgment or puts a stamp of approval or dissaproval on certain types of behavior and it has a substantial impact on a party. Usually a procedural rule affects the agency or HOW a party presents himself to the agency but not his substantive rights.

January 30, 2008

SEE page 97 for federal register online: .

GPO stands for the government printing office

back to the rule that notice and comment does not apply to internal regulatory rules, interpretive rules and general statements of policy or other for which it is impracticable, unnecessary, or contrary to public interest.

Three cases: Am Assoc. Hospitals, air transport case (no longer binding precedent) and JEM broadcasting. Not clear what the tests are for determining what is a procedural rule and what is a substantive rule that needs notice and comment. Is the agency action one that alters the rights or interests of the parties or is it one that alters the manner in which the parties present themselves or their viewpoints to the agency. But it is very difficult to determine which kind of rule it is, just like in civ pro the eerie cases showed.

These exceptions should be construed narrowly because they go against the policy of openness and democracy and offering opportunities for both the public to participate and for the agency to learn from that input. What about the good cause?

Interim final rule: when an agency adopts a rule without notice and comment it sometimes invites the public to make comments saying the agency will consider it if appropriate and make changes if needed.

What about invalidating a rule that a ct found had not gone through notice and comment? Tehre’s already reliance on those who have began compliance with the regulation so some challenges may be forthcoming.

Formal, informal, and hybrid rulemaking: how do you determine when a rulemaking needs to be formal, on the record, on some fixed visual form so the ct can review it to determine that agency based its decision strictly on something that’s on the record. So QuESTIon is: what does the statute have to say to trigger the formal procedures requirement.

Three cases: Us. Allegheny Ludlum steel corp. , USv Florida East Coast railway and Vermont Yankee.

In Ludlum, the ct says that the enabling or organic statute does not have to specifically say “on the record” but it does have to say something very similar to that effect. If it just says hearing it’s just a hearing but does not trigger “on the record” 556 and 557 formal rulemaking proceedings. But in Florida East coast railway co. renquist says that the meaning of the words will vary depending on whether the hearing is required in a rulemaking procedure or in an adjudicative proceding. Adjuducative is more court like. We should not too readily throw formality in hearings that have to do with rulemaking (legislative facts) since it is more fact finding and information finding than when we do an adjudication which is more like a trial. Hence if a “hearing” is required for rulemaking, it deos not necessarily mean on the record, but if it’s an adjudication, it is likely more formal. In fact in this case, renquist says that hearing does not mean an actual hearing and it can mean a paper submission.

Cts are very reluctant to construe a hearing to mean “on the record”.

Vermont Yankee case. The supreme court slaps down the dc circuit court of appeals because they had remanded a rule to the Atomic Energy commission because they had said that yes, they conducted to discovery or cross examination in their rulemaking. SCOTUS said cts cannot add more procedures to agencies beyond what the APA requires them to do or their statutes require them to do, unless there are some constitutional constraints that require it. The ct says Monday morning quarterbacking is not good and would encourage the agencies to do formal rulemaking in anything they do and therefore the efficiency of the agency would be compromised.

• Informal rulemaking:

553 B (1,2, and 3): what’s to be on the notice. Read it. Time, place and nature and also legal authority under which the rule is proposed and either the terms or substance of the proposed rule or a description of the subjects and issues involved.

Struggle is whether you go through notice again when you change the final rule again because of comment. How much change is too much change? The idea is to have “fairly apprised interested persons” and if the final rule is a “logical outgrowth of the rulemaking procedure” then you’re ok.

We had a discussion on the beef producers case and the chocolate manufacturers case. Chocolate was a stronger case than the hypo of the beed.

Electronic dockets that automatically publish comments may change the landscape bc they give notice to the other parties with an interest.

Statute APA does not say anything about what the time period should be for receipt of comments so it’s usually stated by the agency. There is a timing instruction in so far as the agency has to publish it 30 days before it takes effect. Probably so that if there are challenges they can take place and stays can be issued.

February 4, 2008

Ex-Parte communications:

553 does not say anything about communications with the agency outside of the comment stage or procedure. For formal procedures there are provisions. in 551 there is a definition of Exparte communications: communications made to decision makers in the agency outside of the prescribed and public procedure, so basically any private communications that don’t comply with openness and transparency of 553 and don’t provide an opportunity of notice to the other interested parties. In 557 d it says that no interested person outside the agency shall make or knowingly cause to be made to any member of the agency … an exparte communication relevant to the merits of the proceeding. And in other parts of 556 and 557 it is evident that decisions can only be made on stuff that’s on the record, so any exparte by definition is ruled out because they cannot make decisions based on this.

Problem 2-6: beefers have now called in the congressional cavalry and the senators want to meet with the department of agriculture. What can you do as lawyer for the department? The secretary of the president also wants a briefing from you.

There are about 4 different legal tests discussing whether these are allowed or not.

Sangamon Valley discusses that due process prohibits ex parte contacts when rulemaking involves “conflicting claims to a valuable privilege”: the airwaves. The government gives you the right to use the airwaves and so when they take it away, it’s a due process case, whereas in the beef case, we’re only dealing with lost profits and nothing to do with removing a license. So Sangamon Valley was more of an adjudicatory decision because they were deciding who would get the license. IN the beef case the analogy is not that close.

What about the APA? Could it help us to determine whether we can take the call of senate or the president? No, the APA is silent about communications outside of the comment making period. Maybe congress did want the exparte communications to go on in this case since they did not specifically bar it. Rulemaking was supposed to be informal and more free form. Lobbying is arguably a good thing.

In HBO the court points out that exparte communications don’t allow for those communications to be on the record available to review, it’s an insult to the judicial process. So there is always the concern that if the record is not clear and there are secret matters that were taken into consideration for decision, the court cannot really review the decision. So record is incomplete or misleading. Also, what’s the use of the public comment period if you will allow exparte communications that are not subject to rebuttals. Ct says that once the process has been closed, any agency member should not be talking to any interested party, BUT if they do, the communications should be made public to allow the other parties to see it. Is this still good law? Possible although Sierra club seems to overrule it, but Sierra is not an APA case, it is more about the hybrid requirements under the Clean Air Act. BUT Vermont Yankee obliterates the HBO case because in HBO the ct basically imposses new procedural requirements to the agency’s requirements for rulemaking. So HBO is a very weak precedent.

In Sierra Club the ct says, under the clean air act , and under Vermont Yankee Case, the ct cannot impose additional requirements. They find that the Clean Air Act does not say anything about information coming in in writing after the comment period, so the information can be considered as long as it is publicly available and placed on the record and on the docket. Oral communications also should be summarized and placed in the record IF THEY ARE RELEVANT. So the difference is that here the ct does not say these comments should not happen, they say they can take p[lace but because of a specific provision in the clean air act, you need to make them public IF THEY ARE RELEVANT. Because it supports the record and allows the ct to review better. Ct also cautions against requesting communications be made public between agency and president since that’s executive power and also violates Vermont Yankee and they would take power the constitution does not give them (it’s legislative power). They also say that congress can talk to agencies because it is legislative unless it hijacks funding of an agency. Open communication has a lot of plusses and everyone should be involved in it. Cts are not likely to stop those communications.

And even though HBO is not enforced, and the law does not require the docketing of exparte communications, the agencies usually want to do it anyway.

Second possible approach is some sort of interpretation of the silence in the APA as the HBO case. DC has never overruled it but has also never followed it because of Vermont Yankee. So it is unlikely that the strong avoidance after pihblic comment that HBO called for would be enforced.

Third source of limitation governing contact with senators would be a statute telling you that you cannot meet with anyone. IN the school lunch statute it could say that you cannot or that if you do, you need to document it. But the statute would be necessary because the APA is silent in this.

Fourth source is agency regulations on the subject of exparte communications then you call them to the attention of the secretary. Why might an agency make the choice to restrict the exparte communications during the rulemaking period? Covers you against this sort of thing, and insulates you from charges that you’re playing favorite.

So if agency does decide to meet with everyone and pass the rule, what can beefers do? Lobby congress, sue the agency, or petition for repeal of a rule since you can always petition for rulemaking.

Other issues we read about:

Non-delegation of powers. The whole thing about bicameralism and presentation, and how the acts are written without “intelligible principles”. IN the Whitman case ct said that congress had said enough because congress had said “requisite” requirements and they deemed that enough. Scalia said agencies are not legislating biut simply executing the laws passed by congress. Stevens said that it is legislating and it’s ok because there is enough general guidance from congress. I think they’re executing through legislating!

February 6, 2008:

The same kind of concerns come up in states. A constitutional challenge came up against the California coastal commission b/c they were unconstitutionally structured due to who was allowed to appoint members of the commission and remove them. The executive branch appointed them and congress could remove them, and that was not constitutional because it would be one power intruding on the powers of another. The law was re-written so that congress could appoint some members and they cannot be removed unless for good cause and they cannot remove the ones appointed by the governor.

Issue of legislative veto under Chada. Congress had given power to the attorney general to decide a case but then they could overturn his decision. However, this violated the bicameralism and presentation doctrine and the separation of powers and both houses of congress need to act and in this case it was unicameral, so it was not legislative and therefore congress outside of its power. If congress does not like what an agency is doing, it can pass a law to change it, but it has to be a law. So Congress created this “express regulation review” (this is not the real name) under “Congressional review of Agency Rulemaking Act” where they have devised a way to quickly issue a law that prohibits a proposed regulation from an agency. So, the rulemaking process may involve some legislative review or some other kind of bureaucracy before there is finality in a rulemaking.

Next week we’ll be reviewing judicial review of rulemaking.

Hybrid rulemaking. Page 126.

These require procedures beyond informal rulemaking but not quite as big as the formal rulemaking. Definitely beyond APA. Some of these requirements come from the statutes establishing the agencies themselves, others come from further legislation from congress and executive orders. And some agencies have had their own internal practices be more than required because they want to produce a record that will pass muster judicially, even though under Vermont Yankee cts cannot add more requirements than organic statutes and APA.

Legislative:

The firs of the added requirements that historically kicks off the notion of agency rulemaking to account for additional type of concerns is that National Environmental policy Act that required Environmental Impact statements, thus asking the agencies to stop and think about the impact any rule will have. Some of the new requirements, like the regulatory flexibility act, are procedural, identification of alternatives that will accomplish the same effect but at the least economic impact on the regulated entities.

Should this kind of legislation that requires extra things be interpreted or have judicial review so that if the analysis is not done carefully the agency can be stopped? In NEPA there was to be none except for the counsel advocate of the SBA. But then in Srefa the legislation said that there was judicial review where the cts could remand it to the agency. So there is some reluctancy to add teeth to enforcement. So they limited the remedy, because they want to let agencies do their work but constrain what they do so they don’t have too much economic impact. Then there’s the paperwork reduction act. Requires agencies to do notice and comment before imposing any reporting or recordkeeping requirement on persons. Unfunded mandates reform act of 1995 establishes agencies have to discuss the why, how, etc of every rulemaking they want to do if it will result in costs of over 100 million on state, local, etc government.

Office of information and regulatory affaird (OIRA) has the power to review all these agency procedures to approve of disapprove these measures from agencies. This office is under the Office of Management and Budget (OMB) which is in the white house.

Executive: Reagan asked in 1981 for cost-benefit analysis from agencies to conduct this before enacting any regulation that is a major rule (impacting $100 million or more in the economy. All other presidents adopted similar views or executive orders. The epitome of this was during the contract with America era of Gingrich that every law had provisions requiring cost-benefit analysis and it never passed (it’s hard to measure benefits and many laws would never be passed). But we still have the same requirement by the executive orders and OIRA has to review all the rules that would have that impact of 100 million. Bush amended Clinton’s order and wants to make some changes in the regulatory power: OIRA still reviews but is broaden to include review to guidance documents and added that no rulemaking shall commence until approval by the agency’s regulatory policy officer (which as per the same EO will be appointed by the president within 60 days after this EO is passed). So there’s controversy over that, but it is the internal organization of the executive branch. More hands on than we’ve seen before.

What kinds of impacts should agencies look at before promulgating a rule:

• Environmental: NEPA, global warming (probably will be soon), environmental justice (impact on poor communities)

• Economic: RFA – impact on small business

o Executive orders

▪ Unfunded mandates

▪ inflation

• Health

• Family

• Civil Litigation: to what extent will the agency action promote litigation will create rights to sue. Not add to the litigation burden

• Federalism: state rights

• Property: land use etc.

• Trade

• Energy supplies

So now all those impact statements or considerations become part of the record and therefore judicial review will look at this.

Negotiated rulemaking: Negotiating regulations or Regulatory Negotiations:

When the rulemaking comes from an ADR where both sides of an issue meet with the agency and the rule that gets implemented is the compromise from both parties. This is not Instead of the APA notice and comment process though, so the agency facilitates this so they can come up with a proposed rule that will then be subjected to notice and comment. But the criticism is that it becomes private law instead of public law and public interest may not be served by the two parties that participated in the negotiation. And if the agency sees something that does not square with its mandate of political orientation it may be reluctant to add it because it will upset the agreed to proposed regulation, so the agency is not complying with its responsibility.

It is not used a lot and its success is iffy. Tehre is a list of factors on page 39 that the administrative commission. Some considerations that would help answer whether a regulation is a good candidate for negotiated regulations.

Missed class on February 11 or so.

02/11/08

This material – statutory interpretation and application of the rule

APA § 706 – Judicial Review

Reviewing court shall

• compel agency action unlawfully withheld or unreasonably delayed and;

• hold unlawful and set aside agency action, findings, and conclusions found to be

o Arbitrary, capricious, and abuse of discretion, or otherwise not in accordance with law;

▪ Review of informal rulemaking actions

▪ “Arbitrary and/or capricious test”

o Contrary to constitutional right, power, privilege, or immunity;

▪ Constitutional violations

o In excess of statutory jurisdiction, authority, or limitations or short of statutory right

▪ Review of informal rulemaking actions

o Without observance of procedure required by law

▪ Procedural violations

o DEALS w/ FORMAL RULEMAKING ( not supported by substantial evidence in a case subject to 556 and 557 or otherwise reviewed on the record of an agency hearing provided by starute OR

▪ Formal rulemaking issues

▪ “substantial evidence test”

o Unwarranted by the facts to the extent that the facts are subject to trial de novo by the reviewing court

▪ Hardly applied b/c trial de novo rare

If courts are asked to substantively review agency actions ( what power should they have

• Usually seen as a question of deference ( what degree of deference should be given to an agency action

CHEVRON – VERY IMPORTANT! JUDICIAL REVIEW OF AGENCIES

Statute being interpreted is a section of the Clean Air Act

• But universally interpreted as a showing how to interpret the APA

o B/c although CAA has a separate provisions for judicial review

▪ But exactly the same language as the APA

Court – Concludes that if agency makes a reasonable compromise of conflicting interpretations ( courts has to give deference ( cannot replace their own interpretation for that of the agency’s

• BUT FIRST has to be AMBIGUITY in the STATUTE and possible interpretation

2 Step Chevron Process

Step One

• Is there ambiguity in the language

o If no ambiguity and intent of Congress is clear ( review ends

▪ Then is court’s job to say the language is unambiguous and enforce it

Step Two

• IF there is ambiguity ( have to determine whether agency’s interpretation is unreasonable

Reasoning for Deference in second step

• Agency is the expert ( more knowledgeable about the issue

o Were given the power to interpret the statute by Congress

• Judges are not part of the political branch

o Agencies are part of the executive branch

▪ Since agencies are the one that are politically responsible for the interpretation they are the ones that should be making the interpretations

▪ Heads of the agency are accountable for agency actions so they should be the ones making the interpretations and fill the gaps left by Congress

VERY IMPORTANT CASE!!

Problem 2-9

Congress has new statute for processing chickens

• Has section for imports from other countries

USDA interprets law as allowing countries other than Canada and Mexico to have standards that are AT LEAST equal to standards and methods in US

• Congressional statute says the same

So the National Broiler Council wants to challenge USDA’s interpretation

Challenging law because THE SAME means in their view exactly like US standards

• NBC doesn’t like this because will increase competition from other countries

o And other countries may be using safer methods ( which will make their products more desireable and force US growers to adopts those methods

• What are the other concerns of ABC other than Australia?

o Is there a concern that poultry may be less safe?

▪ If less safe and causes health scare ( might turn consumers against poultry in general

▪ Might be less expensive than US standards and cause unfair competition

• What arguments can be made under CHEVRON for NBC

o Text of Law

▪ That Congress’ language is unambiguous because clearly says THE SAME which = exactly/identical

← Look to definition in dictionary in Random House Dictionary

← In same statute Congress used two different words ( one for Canada and Mexico ( another word for other countries

• So clearly indicates that these words cannot mean the same thing ( Or else would have used one word

▪ Purpose of law is to prevent adulterated or mislabeled poultry from entering country

← So the word same fills that purpose and doesn’t leave any gaps

• Legislative history

o Congressional record explicitly struck out “equal to” in amending law and replaced w/ “the same”

▪ Issue as to whether legislative history is appropriate to look to in determining whether statute is ambiguous

← Some justices say yes others no

← So change shows that they wanted “same” to = identical NOT equivalent

← Technical amendment

Probably cannot be resolved at stage one of Chevron

• b/c dictionary gives different meanings of “same”

• legislative history does not clarify meaning intended by Congress

So what arguments under Step Two can NBC make?

• Can attempt to argue that the interpretation is unreasonable

o Look at statutory purposes and use them to back ideas that interpretation is unreasonable b/c it is contrary to purpose of the statute

Chevron case: how to interpret an agency’s power under APA under section. Issue is whether Agency’s interpretation is consistent with statutory language. First step: see if the language of congress is clear. If it is, that is the end of the matter. The agency must give effect to the unambiguously expressed intent of congress. If Congress has not directly addressed the precise question, ct cannot impose its own construction of statute. Step two: In that case, the question for the ct is whether the agency’s answer is based on a permissible interpretation of the statute..

In Chevron , the ct does not decide whether you can use a bubble concept for the clean air act or the requirements apply to each machine, and the ct says that the agency found a reasonable way of interpreting the clean air act. So the bubble concept wins and the industries can use offsets in other machines as long as the total mets the standard.

February 13, 2008:

Then he talked about the poultry case. It basically has to do with the Supreme Court deciding whether to look beyond the basic language of the statute to determine, in the first step of Chevron. In this case it’s not clear then what the statute means, there is ambiguity. So under Chevron, you go to the second part of Chevron and see if the agency’s interpretation filled the gap or solved the ambiguity in a way that is based on a permissible interpretation of the statute. The argument for the poultry industry is that the regulation has interpreted the statute in a way that defeats the safety intent of the statute, therefore it is not a sensible accommodation. There may be an overlap between step two of Chevron and the standard of review of arbitrary and capricious. So when you get to step two you dig into all sorts of comments back and forth to see if this is a reasonable accommodation and therefore a reasonable interpretation. So it’s not a procedural inquiry as to whether the agency thought this through, it’s a substantive enquiry as to whether the agency’s interpretation is a reasonable accommodation of the statute.

NEXT SECTION: Substantive Challenges to rulemaking. Not an issue of how the law is interpreted, it’s whether the rationality exists in the decision of the agency. 706 says that the ct can review and decide on the lawfulness of the regulations. Includes three issues:

• What’s the scope or standard of review

• What’s the content of the rulemaking record the agency has to compile . Review is pointless if ct does not have a good record to review

• Extent of the agency’s obligation to explain itself.

We now discuss each of these.

Scope of review: Substantial evidence test applies to formal rulemaking.

Arbitrary and capricious remains for informal agency action.

Third possibility, a statute that changes the applicable standard of review, so substantial evidence level of review, may be applicable to informal or hybrid rulemaking if the congress placed it in the organic statute.

But what’s the difference between the two standards? Learn the lingo and use it as applicable EVEN if the ct eventually the court does exactly the same thing!

Arbitrary and capricious test, the leading case for both rulemaking and adjudication is Overton park case 1972, the ct for the first time gets aggressive as to what the arbitrary and capricious standard means. Ct needs to engage in a substantial inquiry. Searching and careful, but narrow standard of review., Whether the decision was based on relevant factors and whether there Was there clear error of judgment. Sometimes known as the hard look approach or doctrine.

Not clear whether the hard look is referring to how the ct looks at the agency’s decision, or whether it applies at whether the agency took a hard look at the facts and evidence and relevant factors.! So when you see hard look is it talking about agency’s or ct’s taking a hard look.

The ct had been highly deferential and basically it has been like the economic law review under substantive due process. Overton park changes that. Overton is also the origin of the record keeping procedural requirement. In a later case the ct explains that it is not at odds with Vermont Yankee b/c it imposes a general procedural requirement of sorts by mandating that an agency take whatever steps it needs to provide an explanation that will enable the ct to evaluate the agency’s rationale at the time of the decision. 706 talks about a record the ct may review, so this is not another requirement imposed by the cts, it’s in the APA. Record is All the things the agency considered in making the decision.

Agencies have developed a habit of providing written explanation of how and why they adopted the rule to prove there was a Consideration of relevant factors at the time of the decision.

Arbitrary and capricious test would be failed if the agency:

• Relied on factors congress had not intended it to consider

• Totally failed to consider an important aspect of the problem

• Offered an explanation that runs counter to the evidence before the agency

• Or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise.

Also, the ct cannot provide a rational explanation that the agency itself has not given. BEDROCK PRINCIPLE.

Motor vehicle manufacturer assoc. v State Farm insurance (1983): legacy of overton park. The scope of review under arbitrary and capricious is narrow and ct cannot substitute its judgment for that of the agency. (Chevron) But the agency must examine the relevant data AND articulate a satisfactory explanation for its action including a rational connection between the facts found and the choice made. Arbitrary and capricious would be usually found when an agency relied on factors not intended to be considered by congress , entirely failed to consider an important aspect of the problem, offered an explanation that runs counter to to the evidence before the agency OR is so implausible that it could not be ascribed to a difference in view or the product of the agency’s expertise. The ct here held that the agency had not adequately explained why they were rescinding the rule instead of revising it to require airbags or the kind of seat belt that does not un-attach.

So for formal procedures we get the substantial evidence standard. Informal get the arbitrary and capricious. And the step two of chevron overlaps with arbitrary and capricious it seems.

Problem 2-1: page 166. Warranty disclosure and mechanical defects disclosure rules. The Federal Trade Commission reconsidered the rule and after accepting further comments took out the mechanical defects disclosure. This is informal rulemaking unless the statute mandated it to be formal. The statute in the middle of page 168 seems to say substantial evidence and calls a rulemaking record, which may be indicative of a formal procedure requirement. So if I represent the consumer union:

• Has the agency gotten the facts wrong since the first issue they need to address is what are the relevant facts

• What type of rule is appropriate given those facts.

In this case, they never do explain how they go from saying dealers know about the defects to saying they really don’t know about it. If I were the response it would penalize the dealers trying to be honest, and that the agency did receive more information after the fact and that they took that into consideration. I would also refute the Wisconsin study with the Minnesota study. But in this case, Ken does not think that any of the four factors are strong enough to be considered an arbitrary and capricious rule. The strongest argument for consumers union is the fact that the evidence was strongly in the favor of the dealers knowing the defects when they get the cars.

So use the four factors from Overton Parka and State Farm to discuss any problem about informal rulemaking.

IN page 161: consolidated cases, which is before APA, says that substantial evidence is that if the ct finds the agency’s decision to be reasonable or the record contains such evidence as a reasonable mind might accept as adequate to support that conclusion.

On page 162 there is an explanation of why the two standards have converged: because records are now required after Overton park, which reduces the difference between formal and informal procedures. Secondly, the agency has to explain itself and show a rational connection between the decision and the evidence on record, which is also very similar to the formal requirement.

Also, cts can suggest in dicta a solution, but not in any binding way unless congress’s clear language makes that solution required.

ADJUDICATION: 556, 557 proceedings relating to an order which is anything that is not rulemaking, including licensing. Final dispositions in a matter other than rulemaking and can range from trial type proceedings to decisions as to whether or not you get a federal loan or SS benefits. So it’s residual in the sense that it’s anything not rulemaking.

There are some fundamental challenges in promoting agency efficiency and maintaining individual interests In justice and rights.

Formal or APA adjudication under 557 and 558: cannot based decision on anything not on the record (556 e), .

Informal adjudication or non APA adjudication. There is a record but it contains whatever was before the decision maker that was considered relevant but it does not necessarily involve a hearing and may include other things that were received in comments stage.

Threshold: what is the magic language in the statute setting up the law or agency? Again not “on the record”. If the language or threshold is not met, what’s left”? 557 is left (some miscellaneous stuff) And 555 may apply. Due process might apply. Statutory requirements. Agency regulations as well. This combination can be less than what is required under formal APA adjudication. Some reference to the Wong Yang Sung case which basically says that due process still applies. But since the treshold question has not been solved by the Court yet, we have some appellate cases.

Problem 3-1 page 198.

NEA on obscene art. Statute says NEA shall hold a hearing to determine whether any work is obscene. The argument is that affords the affected party an opportunity to participate in the hearing. And it allows judicial review. Which indicates a record may be required.

Seacoast is the first case: it points that a public hearing is required. Same circuit has since overruled this.

City of West Chicago v Nuclear regulatory commission: ct takes a different approach and says there was no reason to say this was a formal hearing required case.

Chemical Waste Management v EPA. Ct says this is a chevron case. Ken says this is a procedural manner which is not a chevron matter. And therefore counterproductive to the spirit of the APA because the agency can run amock and have no oversight if the ct will defer to it for both substantive as well as procedural stuff.

Section 554 c provides for 1-notice to all parties interested to have an opportunity. Section b says time, place and nature of hearing, legal authority and matters of fact and law asserted.

554 c says that they submit all their stuff including offers of settlement and if they cannot agree, there is a hearing and decision on notice and in accordance to sections 556 and 557.

But when can you become an 2-intervenor in an action or adjudication? When are you a party? That seems to be a chevron issue and the agency decides.

There are 3-settlements possible.

4- ALJ: usually an employee of the agency or a board that was elected to do this. Usually they are fairly independent in that they get their pay level and ratings from the civil service system (Merit system protection board), so they can be neutral and not feel allegiance to an agency. They preside over hearings, settlements, they can take official notice (the equivalent of judicial notice) and they either decide the case or make a recommendation to the agency. They can be disqualified for bias. Similarly, exparte communications are restricted in considerable detail. Outside members or even members of the agency cannot communicate with the judge if they are engaged in either investigatory or prosecutorial capacities. Types of decisions: Most are initial decisions (557(b?) when a judge makes a decision it becomes the decision of the agency UNLESS there is a timely appeal by the agency or it takes the matter for review. On appeal or review the agency has the same powers as it had in making the initial decision (de novo) so it’s not bound by what the ALJ has decided. Also, the agency gets to decide the ALJ role insofar as saying what he does, recommendation or final decisions.

Hypo: OSHA on page 218. 3-2. Autobody Appeals the citation because the citation was under the wrong regulation.

Issues: if there is a wrong regulation being cited in the citation, is the notice proper? According to National Labor Relations Board case on page 220, the proper citation needs to be in complaint because Lane cannot amend the complaint expost facto. But in NLRB they got to the hearing and something else was brought up that had not been in the citation. However in the Lane case, they did know what it was because they got there and discussed the issue and argued about it, even if the citation was wrong.

In the Southwest Sunsites case the ct says that the purpose of the notice requirement in the apa is satisfied if the party proceeded against “understood the issue and was afforded full opportunity to justify its conduct. So if this were applied to Lane, the paintshop could argue that it cited the wrong regulation and then it gave a new meaning to an ambiguous regulation, so it’s kind of a moving target. However, the interpretation that really matters is the interpretation from OSHA because under the split enforcement issue with OSHA says that even though the adjudicatory commission gets to adjudicate, it has to defer to the interpretations of the regulations by OSHA, not by OSHRC. In that case, we go back to Chevron and find that it is reasonable to interpret as that.

In Copanos, the drug company has a notice that FDA is thinking about withdrawing their NDA. They respond by requesting a hearing but the FDA denies the hearing and summarily withdraws their NDA. Copanos says they can’t do that b/c it violates APA since they have the right to a hearing. Ct says no, the agency can set up that there are cases in which they can withdraw it without hearing. Ct says they had notice of violation before and had enough time to comply.

What about the affidavit of the OSHA inspector in the hypo? Is there anything in the APA that says that you cannot rely on hearsay. In 556 it says that it has to be probative and substantial. But should the case be resolved on hearsay alone. In administrative cases evidence is usually admitted in contravention of hearsay as long as there is some reliability. Besides in this case, Lane had a chance to subpoena the inspector and did not. As per Richardson v. perales. Under 555 d it says that agency subpoenas will be issued by agency upon request.

Ex-parte communications: There is always a conflict because the judge is related to the agency. Even though they’re independent, they are part of the agency and have social interactions, budgetary interactions, etc. There’s an incestuous aspect to this. But bottom line is that there is lots of opportunity for communication all over the building. So the rules for exparte tries to set up boundaries as to how it can happen.

APA speaks to it.557(d).

557(d) A-No interested person outside the agency shall make or knowingly cause to be made to an ALJ or a member of the adjudicatory board or involve in the decision, an exparte communication relative to the merits of the proceeding.

557(d)B- the road is two ways, so the ALJ cannot make communications to the outside party.

557(d)C- IF there are, then this section says that they should be:

Placed on the public record of the proceeding. Whether oral or written, and if oral memos need to say what they are.

557(d) D- Upon receipt of communication by party, ALJ or decision body can issue an order to show cause why they should not penalize you by ruling against you. The party is entitled to present a case and rebut this and even to conduct cross examination.

554 d is the bar to internal exparte communications. So no one involved as prosecutor or investigator can engage in exparte either.

Problem 3-3: Spotted owl problem. Bush White House was involved in pressuring for the exemption to be issued to the bureau of land management to sell the land to the logging companies but the Northern spotted owl lived there and would become extinct if this is allowed. Committee granted the exemption to the BLM. There were two steps: BLM petitions for exemption from the Endangered Species Act that forbids the sale of federal land if it supports an endangered species. The secretary of the interior is to review application and decide whether it is complete and meets the statutory requirements. If it does, then secretary holds a formal adjudication and prepares report to the committee. Then the act requires the committee to make a final determination ON THE RECORD (so the triggering words are there for hearing and all the trappings of due process). SO, in this case we have the secretary issuing an adjudicatory decision that is not final but a recommendation (remember there can be two types, final and recommendation) and in this statute it says it is not a final decision, and the governing body makes final decision. There is a challenge by an environmental group saying that some members of the committee were subject to exparte communications. There is evidence that some members of the Bush White house met not only with Lujan who was the secretary of the interior but also with the head of the EPA who is also a member of the adjudicatory committee.

So under 557 d those communications would not be allowed because it would be exparte from an outside interested person. But is yeuter, this particular person making the communications, an interested person under 557 d? Patco case says “interested person is intended to be a wide inclusive term covering any individual or other person with an interest in the agency proceeding that is greater than the general interest in the public as a whole may have. The interest need not be monetary nor the person need be a party, intervenor, etc. and can include parties, competitors, public officials and non profit or public interest organizations and associations with a special interest in the matter regulated.” Under this definition, Mr Yeuter would be an interested person and therefore would not be allowed to engage in this kind of exparte communications and the environmental group is right. So these communications should be put on the record under 557(d)(D). But what about executive privilege? That gets dicey. They could also void the decision under 557(d)(D). What it must do is put them on the record. What it MAY do is void the decision. But to void decision it must show that BLM had anything to do with the Yueter guy asking for them to exonerate them from requirement. If the agency does not do any of these, the ct can void the decision. BUT this is not from the APA, it is silent on the judicial remedy for this type of violation but ct in patco says that they will follow case law regarding exparte communications. There’s a list of factors to be looked at to ask if agency’s decision was tainted so as to make the decision unfair. Page 242: These are from patco.

• whether contacts may have influenced the agency’s ultimate decision; Here make sure you look at threats, coercion, promises, collateral pressure on the decision maker, but it is not part of these factors list. Just something to look at for the final. Corrupt tampering with the adjudicatory system.

• The gravity of the communication: is it at the core of what the committee was deciding.

• whether part making the improper contacts benefited from the agency’s ultimate decision;

• whether contents of communications were unknown to opposing parties who therefore had no opportunity to respond;

• and whether the vacation of the agency’s decision and remand for new proceedings would serve a useful purpose.

In this case all could met but the question is whether they would really change it, would it be a useful purpose. Under Chevron, the ct is not able to do much more than order it remanded.

In the Patco case we have a second time the case is there on the issue of exparte communications to the decision makers who were trying to decide whether to decertify the unions of air traffic controllers.

Now: Communications from within the agency. Page 235. Problem 3-4.

• Steps employed:

o Notice of charges

o Hearing by grievance committee

o Recommendation to commander (that he not be removed b/c army had not proved he did the deed!).

o General removes the guy.

• This is not a case under APA because it is a military thing, it is an employee personnel issue, and there’s nothing saying it has to be made on the record. Under 551 subsection 1 says agency does not mean military in some respects. But there’s inconsistency with some language re military in 554.

• So all provisions regarding hearings etc and exparte communications don’t apply. The problem is that after the recommendation was made to commander there were talks to the general by the legal counsel and that’s when the general decides to remove him. So there is a due process problem.

• In this case as in the Stone case, there is a notion of a property right in employment and mr Stone, as our client does too, has a property right in employment and had to be fired for cause and did not have a chance to a hearing after legal counsel talked to the general. However, it is not clear in our problem whether the communications between counsel and the general included new information so as to be considered exparte. There may be no new facts, just new legal arguments based on the same facts.

DUE PROCESS HEARINGS:

Some of the sources of procedural requirements:

• APA

• Underlying statute

• Constitutional Due processes: both for federal or state under 5th or 14th amendment.

• State constitutional provisions for due process

• Agency’s own internal regulations and procedural rules.

• Judicial review requirements but these largely relate to the creation of a record (Overton park case).

Two basic requirements for procedural due process:

• Deprivation of a liberty or property interest

• In an individualized decision proceeding.

Londoner was the case where some land owners opposed a tax levied to make a road. And Bimetallic was the case where they were complaining about a tax that was levied on everyone. So the ct makes a difference between them because the larger the number of people, the more opportunity to change things through the political process rather than the judicial process. In Londoner is a relatively small number of people affected in individualized way. If it is a policy determination, we may not need a hearing under due process. If it is a fact specific or determination of facts that could be disputed where there would be benefit in cross examination and discovery etc. then the due process hearing is more needed. Fact specific individualized decision. The former is more about legislative facts and the latter is more about fact finding.

WHAT IS A HEARING? WHAT KIND OF PROCESS IS DUE?: in Londoner, Ct says that a hearing does not mean in writing. And you should be able to argue orally and submit evidence.

PROTECTED INTERESTS: Liberty, property. But liberty is more than just physical freedom. And property does not include entitlements (welfare, etc) but the Ct says in GOLDBERG v. KELLY that entitlements are the property interests of the poor and the entitlement of the rich are in the form of property. Before Goldberg you could not have a property interest in an entitlement to a benefit. This was new property. So the ct eliminates the rights/privilege distinction. So if the government deprives you of this property interest then you have a right to a hearing And sets the stage for further attributes of what kind of a hearing.

Liberty cases:

Roth case: leading case of what liberty interest mean. In Roth, the ct says that the right to engage in a chosen profession is a liberty interest that is protected. Furthermore, they state that anything said that will affect his future career, where his reputation is at stake, is something that threatens that interest. IN Paul v Davis, it says that it’s not only necessary that it has the stigma but stigma plus, so that it does have to affect his ability to work. Suicide attempt while in training and they fire him and place in his record that he did that. The lower court says that’s enough. But the supremes sort of bypass that and says that there’s no reason to have a hearing if there is no dispute about the facts!

So applying this to Jeremy: if there is no dispute that he plagiarized, there’s no need for hearing. BUT there is a dispute as to whether that rises to the level of an honor code violation so a hearing would not be pointless. As Stuart says in Codd v. Velger there are more points to a hearing than just figuring out undisputed facts.

Shans v, City of Kennett: the court says that just the dismissal is not enough because there is not enough stigma. However, Ken says that he disagrees because the allegations of misconduct are bad enough. So in our Jeremy case it would probably be the same since he would have trouble getting in law school.

But what about a property interest? Often people will allege both. Roth gives you basic touchstones as to when someone has a property interest. He would have to have a strong claim of entitlement and not just an expectation. But in Jeremy’s case, he could claim an interest in at least finishing the semester since he paid for it. That sounds like a claim of entitlement, not just an expectation. These entitlements are not created by the constitution but by external rules or understandings that stem from an independent source. There is, in Jeremy’s case, an implied contract with the university. In Perry v. Synderman, the ct also seems to find an implied contract. IS the issue one that has a substantial enough interest to warrant a hearing.

Goss v. Lopez: ten day suspension of a high school student. SCOTUS says he has a legitimate claim of entitlement to be there , so a minimal procedure is required. Difference is that High school is mandatory. It defeats his OBLIGATION under state law to do that. Goss suggests that there is an entitlement to continue education.

Osteen case: page 277. State university. What procedures are due if there is a property interest. Ken personally thinks there is a stronger liberty interest than a property interest.

Goldberg v. Kelly: with respect to welfare benefits it’s not enough that you get the hearing afterwards because you need the money coming in order to survive, so the hearing needs to be beforehand. When there are cases, however, involving seizures or emergencies, the ct has said that the hearing can come after, so that the public interest in preventing the dangerous sutuation overrides the need for a prior hearing. But Golberg spoke about the interest of welfare recipient in procedural protection, the ct says with a lot of detail something very akin to a full fledged trial. But apparently that was very circumscribed to those facts. But Richardson v. Perales says that maybe you don’t have the right to cross examine. Goldber is historic because it characterizes government entitlements as protected interest, rather than just a privilege.

Mathews v. Elridge has become the leading case. After you determine what procedure you need and that you have a protected interest, THEN you determine what specific proceedings you need. Three factors to be weighed:

• The private interest that will be affected by the official action.

• The risk of an erroneous deprivation of such interest through the procedures used and the value, if any, of additional or substitute procedural safeguards;

• government’s interest including the function involved and the fiscal and administrative burdens that the additional or substitute procedural requirement would entail.

IN jeremy’s case, the Matthews test would tend to shift the scales in his favor because his interest is fairly strong, the government’s interest will not be extremely burdened by having the hearing and in fact, the school would probably be more burdened by the student being kicked out. Although the school can say that honesty and high ethical standards are a very strong interest for the school. There’s also some administrative costs involved in the hearing. A strong argument can be made for both. So what about the second factor then. Everything will hinge on that. There was a procedure and he was heard and made a statement to the committee. But was it enough? If fellow students were not allowed to testify as to their understanding of the honor code, then they’re not looking at some possible ambiguity. What about not having a lawyer present? Osteen says that in the academic context you have no right to representation. You don’t want to make it into a mini trial and you want to give professors academic freedom! (there we go again with Hsieh’s favorite pet peeve!). There’s also an increase in cost and so you look at the inefficiency of the process and the burden on the institution even when there is a huge loss to the student. In Osteen, he had a student advocate. Jeremy did not even have that.

There’s also a note at the end of the Horrowits case saying that cts would generally not want to be meddling in academic matters even in state institutions. Their self policing is to be respected. This would go into the matthews v. Elridge factors as well.

Next time: neutral decision maker issue

Neutral decision maker is a requisite of due process. What about the Dean’s involvement with the Jeremy issue: 554 (d) says that presiding employee may not have supervisory authority over the investigatory body within agency and in this case the board decided and supervised the members of the board. Under 554 (d) there are three exemptions from the requirement of a bar of participation in both an investigation and a decision from an agency if:

• Determining applications for initial licenses

• Proceedings involving rates, facilities and practices of public utilities

• To the agency or a member or members of the body comprising the agency (rule of necessity: if the only way the agency can act is to include some board members who are tainted, either for conflict of interest or because they have participated in the investigatory process, etc, then you allow them to do it). THE AGENCY HERE MEANING THE HEAD OF THE AGENCY OR THE THREE MEMBER BOARD OF WHATEVER THAT RULES OVER THE AGENCY, NOT ANYONE BELOW THEM. SO IT WOULD BE SOMEONE LIKE THE SECRETARY OF STATE, OR SOMEONE LIKE THAT.

Withrow v Larkin: is a state case referring to a licensing board where the board both made factual findings and conducted a hearing AND then would conduct a second hearing to take license away. So since this is not within APA it does not matter and even if it was, the exemption above would probably apply. The contention that the combination of investigative and adjudicatory functions necessarily creates an unconstitutional risk of bias has to overcome the presumption of honesty and integrity and most courts have decided that just because judges have ruled one way before does not mean that they are approaching this with a closed mind.

Back to Jeremy, did the dean already make up his mind before the hearing? It would seem so, but where do you go to see if the procedures are constitutionally sound? Mathews Elridge. Remember this. Did he get the procedural protections he should have been afforded. He pointed out that maybe a sanctioning hearing would have been good because he would have been given a chance to address the impact on him of being expelled.

Judicial review of adjudications: There are various ground for review set up on 706: Contrary and capricious, contrary to constitutional right, in excess of statutory jurisdiction, without observacnce of procedure, unsupported by substantial evidence in a case subject to 556 and 557 (formal), and unwarranted by the facts to the extent that the facts are subject to a review de novo.

Universal Camera case: Post APA. Changes the view that the review was very deferential if there was a scintilla of evidence supporting agency’s decision, but now you have to find substantial evidence in reference to evidence against it also. It’s still deferential but not as much. So they have to view the whole record, including evidence against, would a reasonable mind be able to formulate the same conclusion. Analogous to overcoming a motion for directed verdict. Reasonable minds would say this record is sufficient to support the agency’s conclusion.

But what happens when the ALJ comes out one way and the agency later overrules him and reaches a conclusion contrary to the ALJ: should that disagreement have any bearing on what the court will do. Does the reviewing ct. have to follow just one? 557b says the agency can start fresh and ignore what the ALJ has said because they can make the decisions de novo with all the powers it would have had if it had made the decisions originally. So should the court simply ignore the ALJ? No, the whole record on which the reviewing ct has to base its decision includes the ALJ’s decision. Evidence supporting a conclusion may be less substantial when there is a disagreement with a judge who was actually there and saw the witnesses and made determinations of credibility and the agency only gets a cold record.

Problem 3-8: Helen testifies that the president of the company, Darby, was pressuring her to not allow the union in the company or to resist joining a union and that would violate the National Labor Relations Act. ALJ determines that the president was credible and the woman was not so the ALJ rules that there was no violation of the act. The board (NLRB) wants to find differently. What should we show?

Penasquitos case: two employees are fired and allege that they were fired because they wanted to unionize. Company claims they were not working but watching babes in bikinis. The ALJ says there was no violation of the NLRA because the manager was more credible than the other two witnesses. The NLRB reviewed de novo and found a violation. Ct in this case says that there are two kinds of inferences: testimonial inferences and derivative inferences. Testimonial inferences are inferences made from hearing testimony of witnesses, demeanor, etc. Derivative inferences are drawn from the evidence itself. The court suggests that if the derivative inferences are based on testimonial evidence discredited either expressly or by implication by the ALJ. The ct will weigh heavily the ALj’s factual determinations based on testimonial evidence in their review. Derivative evidence in this case is the fact that the guys were fired the day before union elections in which they were to participate. The court holds that the NLRB erred because the record as a whole does not contain substantial evidence of unfair labor practice. The ct says that credibility played a major role and the ALJ testimonial inferences reduced dramatically the substantiality of the board’s derivative evidence. The dissent in the case says that witnesses can be read wrong because they can lie on the stand and effectively. But this view is not one that we can base an effective administrative system. So we will have to rely on a trier of fact to come up with credibility determinations and inferences.

Based on Jackson v. Veterans administration: the board would have to write a decision that downplays the importance of the testimonial inferences and ups the importance of derivative inferences. We can also talk about the ALJ and why he was biased because he wrote an opinion that rests so heavily in a biased testimonial influence.

• So for formal adjudications the standard of judicial review is SUBSTANTIAL EVIDENCE and this applies to fact finding. The other end of spectrum are questions of law. NO delineation in APA as to how to review a question of law. It’s clear that it’s for courts to review. 706 (2)(c). Courts determine question of law. But what about mixed questions: application of law to facts. That’s a lot of what the agencies are called to do .

NLRB v. Hearst: leading case. Upholds agency determination that newsboys are employees within the meaning of the NLRA . So when it’s a specific determination of law the agency can do it.

But judicial review looks at two factors.

Warrant in record (are there facts to support what the agency concluded) and reasonable basis in law (is this a reasonable interpretation of what the law says).

In O”leary case ct says that cts don’t always separate the facts from the law and it’s really a single entity that has substantial evidence. This approach is similar to Chevron in rulemaking.

Frst facet to determine is whether this is possibly a legal matter only. If so the court decides. If not, it’s a mixed question and the agency is involved.

Problem 3-9: park ranger naked in car with woman who dies of carbon monoxide poisoning. Is there a warrant in the record to find he was not within scope of employment? Under evening star ct says that unless the activity is so unreasonably that it severs the connection with employment, if he was in the right place he was under scope of employment. Here however, it could be construed as unreasonable to be with the woman. But under Durah, it says that he was in the right place and that to find that simple misconduct severs the relationship is not warranted. Employer could argue this was not a usual break. But is there enough to support the agency finding? Maybe. But is this a reasonable interpretation of what the law says? Nope. The law says that it needs to be construed broadly. If the facts are sufficiently ambiguous, there probably is enough to support, but when we come to the law interpretation, that’s where it probably fails. Ct would probably remand it to agency to explain why the agency ruled that way in view of the statute.

INFORMAL ADJUDICATION and the arbitrary and capricious review: we know that arbitrary and capricious test applies under state farm to informal rulemaking. It also applies to informal adjudication.

Citizens to preserve Overton Park v Volpe. Seminal case in this. So Justice Marshall talks about 706(2) and says that in all cases abcd are available and applicable. 706 e is more limited b/c it’s for formal adjudication and rulemaking. Prior to this case 706 f says that ct can review de novo, but after overton, it seems clear that this section is hardly ever used and the fact that there was not a hearing is not considered enough to bring you to review de novo.

Ct oulines the steps to use for this review of informal adjudication. Why is this adjudication? B/c it’s not rulemaking. So when there is a decision of what to do it is adjudication if it is individualized and not something that applies to everyone (which would be rulemaking). Steps of judicial review:

Three steps:

• Whether secretary acted within scope of his authority and discretion. Within range of what statute sets out for him to do.

• Whether the actual choice made was arbitrary, capricious an abuse of discretion or otherwise not in accordance with law. Was it a rational decision to make?

• Whether secretary follow the necessary procedural requirements.

The ct eventually makes the decision based on the third prong. The secretary failed to make formal findings that state his reason for allowing the highway to be built. All the ct has is after the fact affidavits stating the post hoc rationalization. Ct says that they need a record to review (under 706 at the bottom, because they do not have the full record and cannot know how the secretary made his decision, the ct finds that it has to be remanded and the agency has to explain how they got to their decision. So this case establishes that a full record is required to see what was in front of decision maker at time of decision and why the decision maker made that decision (two things). It is discouraged to bring agency heads to ct to explain how they reached decision unless it is the only way to find out b/c it is disruptive to do that. It’s also unrealistic b/c decisions are not individual decisions, they are institutional decisions and secretary just signs them. Adequate reasons being provided, and there must be some rationality to decision. Inconsistency is looked at suspiciously. Equal justice under law, like cases being treated alike, stare decisis. Nothing requires agencies to be consistent but reviewing cts will look unfavorably at inconsistencies.

Two immigration cases:

Yepez prado and Davila bardales. And problem 3-10: airforce pilot who claims he’s gay but wants a waiver to the discharge which is ok to grant.

• The agency board did not explain why they found that there was no unusual circumstances in this case where there is an outstanding record. So there is a procedural gap. That would be under Yepez Prado. We don’t know what “Unusual circumstances” means. Also, if they had explained it, you also need to understand how the factors were waived, not just what factors were considered. IN Yepez, ct says that there are a bunch of mitigating circumstances and one bad fact, and the BIA did not explain how they weighed the evidence. So arbitrary and capricious standard is there to say this does not add up.

• Under Bardales, this decision is inconsistent with other agency decisions because the waiver has been granted before to other pilots who have required them.

Came in late on 3-19? They were talking about corporations not having 5th amendment rights against self incrimination but individuals do so sometimes they give personal immunity to the individual so they can use their testimony to convict corporation.

CHOICE OF PROCEDURES AND NON-LEGISLATIVE RULES: types of procedures in comparison to one another recognizing that often agency has a choice if statute is silent, ambiguous or even states that the agency has a choice.

We studied that non formal rulemaking is not required as per 553 in interpretive rules, general statements of policy or procedural rules. So they are not subject to notice and comment requirements and by definition are not binding. So how much force and weight if any do those kinds of pronouncements have on both agency itself and on courts?

There is a distinction between binding rules (adopted through notice and comment now called legislative rules), interpretive rules or general statements of policy do not have binding powers on others.

So choices are:

Rulemaking (Legislative rules)

Rulemaking (non-legislative rules): interpretive and general statements of policy OR

Adjudication (this is done on case by case basis, of course).

Often agency can accomplish a lot through non-binding rules or pronouncements b/c most people will comply with agency they need to work with.

We will study:

Advantages and disadvantages of agency’s choice.

Legal limits on agency’s choice between the options.

Issues and problems that arise under each option.

Problems in the chapter: FTC has choice of making laws through adjudication and through rule making.

Problem 4-1 adjudication: by FTC. When car is reposed, dealer pays bank, re-sells car and if there’s anything left it goes refunded to original owner. Dealers were calculating resale value at wholesale not retail so people were receiving less money in refunds than they should. No one would litigate because of cost-benefit of litigation. Should the FTC apply rulemaking or adjudication to decide the value that should be used?

CFR: Code of federal regulations.

Advantages of rulemaking:

it would be a bright line rule: it would set the value to use as the retail value not wholesale, it could spell out sanctions (he’s iffy about this because the statute may already have that and agency may not have the authority to say this), specify how to calculate retail value,

It would be prospective

All dealers would learn about it

All dealers would be bound if we go through notice and comment.

Cost and efficiency of this versus cost and inefficiency of adjudicating every case.

More buy in and transparency and inclusiveness than in adjudication.

Education of the agency in the respect that they may be unaware of industry practices that preclude a certain result. Since more people can comment, there’s more opportunity for that.

Advantages of adjudication:

Evolution of policy: not every case is the same so the rule may not be applicable to every case in the same way.

More applicable to fact specific issues. The NLRB has been a great fan of adjudication instead of rulemaking because the statute is very fact dependent, so rulemaking would not be as efficient.

Also, it would shield them from being lobbied by management and labor groups because adjudication prohibits ex-parte communications! Exclusivity of on the record only. But 555b says that an interested person may appear before an agency so the adjudication can include interested non-parties, like amicus briefs.

Cost: it’s cheaper to adjudicate one than to rule-make, but if there are successive litigations it may be more expensive, unless they set precedent. You can chose the worst violator out there to make your point. But not a good idea because someone will come to rescue him and then you’re losing. Better to mount case well against a worthy opponent.

There’s more restrictions on rulemaking (hybrid ad-ons) office of budget (OMB), executive orders, etc, so adjudication might be cheaper and more efficient.

Case on page 321, Chennery v. SEC. The choice of what procedure to use, adjudication or regulation, rests with the agency as long as they have that power and leeway by statute. But you can use adjudication if it will be retroactive in nature. Retroactivity is not a bad idea but it is subject to close analysis. Based on Chennery, there’s a deferential approach to agency’s in their decision to use rulemaking or adjudication. As to the retroactivity of effect, the concern is that other companies who have treated employers the same way or done the same acts, might be charged. But if the statute was there before and there is not an issue of reliance on a board pronouncement previously noted, then there is no issue with making retroactive because the rule has not changed. But is it a surprise? Does it impose a new liability with respect to actions that were undertaken before this new rule was enunciated. Balance whether to apply the new rule retroactively goes against the main purpose of the statute or the spirit of the statute. If the remedy is a cease and desist order, there is not much of an effect.

He reiterated the importance of the Chennery guideline that the agency has the discretion of deciding which route to take.

Retroactivity seems to be ok for adjudication if case of first impression because necessarily it will be retroactive to parties of litigation, but for rulemaking it seems to be not as well accepted because there is no notice, However, in the case of cease and desist notice from adjudication, that is considered notice. Also, there is some precedential value in decisions from adjudications. Retroactivity seems to be ok when congress has granted such authority to the agency.

In most cases dealing with the NLRA the NLRB has decided policy and rules on adjudicative basis. But that’s mostly because making rules that would apply to everyone would be hard in cases that are so fact sensitive.

Applying to Country Bob, we see that this may not be as fact sensitive. CB may say it’s a surprise, but not really because UCC already has the rule there and it’s just a question of what method to use to calculate refund.

Regarding penalties: It could be that there is adjudication going on at the same time as rulemaking. In which case, what would the ct do? Also, there could be rulemaking going on and adjudication comes up either because right hand does not know what left hand is doing, or because there is a particularly egregious case the agency decides to pursue.

But the double dipping by the agency may undercut the rulemaking because if the ct decides that one is better than the other, why are they doing the other?

How might the ct be influenced if agency is required to engage in hybrid rulemaking? It might help CB because it points to rulemaking being needed. Although agency can say that it is not mandated to use rulemaking, and that it only means that WHEN they engage in rulemaking they must use some additional statutorily imposed requirements.

What can the agency impose retroactively as far as penalties? Depending on the penalty. If there are no penalties, it may look like agency is using adjudication to make a rule, that is prospective policy which is defined as rulemaking, not adjudication. IN Gordon Wyman case the ct talks about how a penalty has to be imposed (I think?) because otherwise it is considered rulemaking. IN the case of FTC v Country Bob, the best option would be to issue an injunction or a cease and desist order and that has immediate effect so it can be enforced and it does not look like rulemaking. Agency does not have to order refunds, but can simply issue a cease and desist order.

What if refund are ordered? Then the argument has to be that it’s not fair as a matter of retroactive application because under page 328, Retail, wholesale and dept. store union v NLRB there was a case decided in the interim and the board wants to apply retroactively. Ct says you look at factors to decide if ok to apply retroactively.

• Whether case is of first impression: in that case the interim case was already decided.

• Whether it represents an abrupt departure from well established practice or is it merely filling in the gaps of an unsettled area of law.

• The extent to which the party against whom the new rule is applied relied on the former rule. (estoppel)

• The degree of the burden which a retroactive order imposes on a party

• The statutory interest in applying a new rule despite the reliance of a party on the old standard.

Retroactivity is not bad when issue of first impression because both parties would expect to lose and it is likely that the remedy would apply and the benefits also to the parties who brought the case in the first place, otherwise why would they bring it up in the first case. Second case, however, is not the same case.

So this is an important area of agency constraints.

RULEMAKING ISSUES:

1- Does the agency have the authority? Only if the legislature has given it to it. If the statute is unclear, cts will likely decide that the agency can proceed through promulgation of legislative rules.

2- can a rule explicitly address and resolve an issue that otherwise would have been a fair case for adjudication: Broadcast case where the agency does not even allow an adjudication to be asked for because the guy already has the maximum number of stations, therefore the adjudication was moot. But the only reason why there was a maximum number was because of rulemaking, and the ct says it’s ok and that’s why that question was not open for adjudication, acc. to Supreme court. NO hearing needed b/c no material facts o be decided. Even if broadcaster did not have an opportunity to challenge the particular decision to have a maximum number anyway. But Did they not already have that opportunity in the rulemaking process? They did and the law needs to be settled at some point.

Retroactive effect of rulemaking. Usually not a problem because rules are to be prospective. Bowen case in page 336. What happens when the process slows it down and agency sets it to be retroactive. Many rules are proposed to be retroactive to the time when the rulemaking began and it is allowed. IN the Bowen case the court said that unless congress granted specific power to agency, the agency will not be able to do so. So in the absence of an express grant of authority by congress to agency they cannot. This is from Bowen case. But how express does it have to be?

Ambiguity of rules: GE case v EPA: A due process issue may arise when an agency’s regulation in ambiguous. Regulation of PCBs and how to dispose of them. GE inserted another step that was a recycling step before disposing by incineration of the PCBs. EPA says it goes against the regulation b/c reg says you must incinerate. Ct says that’s ok because EPA’s interpretation is logically consistent with the regulation. GE says that under 706 (2)(A) this is arbitrary and capricious and cannot stand. Ct says it’s ok. Maybe not the greatest interpretation of the agency’s own regulation, but admissible b/c it’s not plainly wrong. The ct accords a lot of deference to the agency’s own interpretation. The ct says, however, that the regulation is not ascertainably certain and it does not allow people of good faith to imply it. Ct says that there is a constitutional violation and under 706(2)(c) they cannot go against constitution and there is a fine which amounts to property deprivation and they did not have fair notice of what it meant. “Where the regulation is not sufficiently clear to warn a party of what’s expected of it an agency may not deprive a party of property by imposing civil or criminal liability.” The editors make a difference between this and fair warning of agency’s charges against a regulated agency in an adjudication proceeding. So, if you have to guess what a regulation means, it’s not fair to ask you to comply. So why is there not a violation in Bell and the chennery cases? Because there was no money involved and therefore no property deprivation involved.

Problem 4-4: OSHA mine equipment order that fines them 25,000. There is a constitutional problem b/c there is a fine. If it only said cease and desist, a constitutional issue would not exist. Ct would probably have deference to OSHA and there is no surprise of guesswork.

NON LEGISLATIVE RULES:

those are of two types: policy statements and interpretive rules. 553 B says these are not subject to notice and comment and they are not legally binding, but most regulated entities would follow them and so they are very, very used. Interpretive rules are statements issued by agency to advise public of the agency’s construction of the statute and rules which it administers. So there has to be already an existing rule that is being interpreted. Policy statements are issued by agency to advise public prospectively of the manner in which the agency proposes to exercise a discretionary power. Tentative statement of what the agency will or may do either in rulemaking or adjudication. Even though they’re not subject to APA notice and comment, they are subject to publication requirements and if not followed it limits their use.

If EPA had one like this, it would no longer present a case where GE was surprised by the agency’s interpretation.

Advantages: more efficiency b/c not subject to notice and comment. And it undercuts the surprise element. However, it also undercuts the education of the agency. But predictability for regulated entities is a good thing.

Also, entities will mostly follow the non-legislative rule even though not legally binding b/c they want to curry the agency’s favor or they want to do the right thing and want to avoid the expense and trouble of being involved in litigation.

It can also be used as management tool b/c the employees would know what the agency wants to do and would apply it in rulemaking and adjudication therefore creating uniformity as to how to apply it.

Disadvantages: No public input so no agency education and the public does not feel heard and there is less buy-in.

Agency may act on purpose or not as if the non-legislative rules are binding and that undercuts the purpose of the APA.

Challenge: if someone wants to challenge it, it’s harder to do because it’s not in effect yet! There’s no final decision or action by agency so you cannot get judicial review.

Also, people can rely on agency’s statement but since it’s not binding they can change its mind.

Problem 4-5: Walk around pay issue by OSHA. How should it present its position that walk around time should be paid by companies to employee rep who’s walking around with them? Adjudication is better to plug in gaps when agency does not yet have all the data to write a rule, OR when the circumstances vary so much that a generally applicable rule does not make sense b/c the cases are very fact specific. IN this case, rulemaking would be better b/c it’s simple and clear-cut that it needs to be paid. But, which kind of a rule: non-legislative or APA based rulemaking? In 553d2 there are publication requirements. A publication of a interpretive rule or statement of policy does not needs to be published for 30 days before they take effect (as substantive rules do ). And in 552(A)(1)(d) it says, however, that they need to publish it in the Federal Registry. In this case, it is a fairly clear issue and therefore it is likely that publishing an interpretive rule would accomplish the task and there would be compliance. And since it is published in the Fed reg. we eliminate the surprise objection. However, maybe there is something to learn about why employees should not be compensated and then notice and comment would be preferable. It could be that these employees are already being compensated by their union for doing this.

Distinguishing legislative and non-legislative rules: same kind of problem as distinguishing between procedural and substantive rules. If you have a policy statement you have something prospective. But what if it appears as if it is imposing a legal obligation on someone now? If notice and comment procedures have not been satisfied there is a procedural error and therefore not binding. Problem 4-6: Osha adopted a policy statement and embodied it in the employee manual instructing OSHA inspectors to cite employers who don’t pay for walk around. Companies are challenging this because there is a new legal obligation being created here so it looks as though they tried to bypass notice and comment. They try to bring a declaratory judgment that rule is invalid. Argument for OSHA: it’s just a policy statement. And it odes not become binding until the split enforcement unit of OSHA that does adjudication decides to adopt policy as enforceable. BUT the argument fails because the ct decided in page 214 that it would defer to OSHA agency and not to the enforcement branch’s interpretation of the rule. For the other side, it does create another duty because nowhere in the statute does it say that they need to pay them. The manual was changed to say that employers will be charged, not that they might be charged. And according to American Bus assoc. case, it needs to leave the agency with some discretion to decide per case, and in this case it does not leave any leeway to charge or not to charge.

policy statement actas only prospectively, does not impose any new legal obligations. But what if it appears that it does have some duty that it imposses but notice and comment has not been followed then it will be invalidated and not be legally valid. But if it’s improperly adopted the agency has to go back to square one and will not be on the books. However if it’s not invalidated because it is held as being merely a policy statement, then it is entitled to judicial deference in judicial review and it’s doing what it needs to do. So from agency’s point of view is better to have a well done policy statement that will not be invalidated.

From the book and class: Agency’s power to issue rules is limited to the authority delegated by congress. Agencies do not have the authority to give rules retroactive effect without an express grant from congress. Retroactivity not favored by law. Adjudication retroactivity is better than rulemaking retroactivity.

Nonlegislative rules: when agencies do not use notice an comment for nonlegislative rules, cts give them the same standard of deference.

Criteria set out in American Bus Association v. US cited in Bowen to discern whether something is a legislative or nonlegislative rule:

• Unless a statement acts prospectively, it is binding and therefore a rule. General statements of policy do not impose any rights or obligations, they do not have a present effect.

• Secondly, whether the purported policy statement genuinely leaves the agency and its decision maker free to exercise discretion ( so more of a guideline than a firm rule to be applied on a case by case basis)

IN Bowen the Court decided that the requests for proposals were merely descriptions of what HHS wanted to see in the proposals from the peer review organizations and not set in stone. So they were general statements of policy. They must be tentative intentions for the future without binding the agency. They were not binding and therefore were exempt fro notice and comment of 553. In fact some contracts were known to differ from the RFP guidelines so they were not binding b/c agency retained discretion to approve or not.

A rule is legislative even if it’s just binding on the agency. Example of FDA saying it would not prosecute levels below certain things. So that level was legislative because it bound the agency and thus is legislative and should have been adopted after notice and comment.

Interpretive rules are not binding until one of two things happens:

• Interpretation is adopted in adjudication

• Interpretation is adopted via rulemaking after notice and comment.

Whether an agency thinks a statement is only interpretive or a rule is given some weight but it’s not determinative of what the ct ultimately finds it to be.

In American Mining Congress v Mine safety and health administration, the court sets out a test with four factors to determine whether a statement is legislative or not:

• Whether in absence of the rule there would not be an adequate legislative basis for enforcement action or other agency action to confer benefits or ensure the performance of duties.

• Whether the agency has published the rule in the code of federal regulations (CFR).

• Whether the agency has explicitly invoked its general legislative authority OR

• Whether the rule effectively amends a prior legislative rule (in which case, any amendment must also be done by notice and comment).

An amendment is not simply providing more details about what a rule means. And in this case, ct finds that the agency was not acting legislatively when it accepted that an x ray could be deemed a diagnosis for purposes of the act.

In Metropolitan regarding the question from a school district as to whether they can must continue to provide educational services to a disabled child if the child was suspended for reasons other than his disabilities. Agency says yes, that’s how they interpret the statute. District challenged on basis of it being a legislative rule and ct says no, it merely interprets the statute and is not subject to 553 n&C. It only reminds affected parties of existing duties under statute, it does not create any new duties, law, rights, etc. No change in policy takes place.

Interpretive rules can be given weight if they clearly interpret the statute underlying them. Court will look at the source of where the new rule comes from and if it is based on a statute then it is

Problem4-7: The animal dealer with the 6 foot fences when a memorandum comes out saying the fences need to be 8 feet tall. According to the mine case the first requirement is that “Whether in absence of the rule there would not be an adequate legislative basis for enforcement action or other agency action to confer benefits or ensure the performance of duties” This case it creates a new duty to have a fence of 8 feet rather than 6 feet.

ESTOPPEL and reliance: nobody likes to be told something and then be told something else. Is there any judicial protection available for someone who relies.

Problem 4-8: Jones was told by USDA inspector to make the fence 6 feet high. There is an argument for reliance. Although not as big as Alaska for 30 years. It was not in writing. It was just an inspector, not the agency, unlike Alaska, she has not forgone an opportunity to participate in the rulemaking.

Alaska Professional Hunters association v FAA:

Pilots are told more than 30 years ago by Alaska branch of FAA that they are not regulated the same as commercial pilots because they don’ offer their services for a fee, their flying service is part of a tour package to go fishing and hunting and not mostly to transport people. FAA orders a study and gets concerned about safety there and pilots request a rulemaking. Before rulemaking takes place FFA published a notice to Operators in the Federal register. And it says in the future it will treat these guides as commercial operators. Association claims that goes against previous interpretation and they had relied for 30 years on it. Ct agrees and says that any amendment should be done through notice and comment, and that they had not been allowed to participate in all the N+C that affected the rulemaking for commercial pilots in 30 years because it did not affect them but could have changed the outcome had they known. And the advise they were given was in place for over 30 years and they built whole industries around it therefore it could not be changed just like that w/o notice and comment. Also this came from a case that was adjudicated “Marshall” saying pilots like them would not be regulated. If you have an interpretation of a regulation that has been relied on, you have to go through 553 notice an comment procedure to amend your previous interpretation. So the ct really makes it into an APA case rather than an estoppel case.

This case sort of goes against Vermont yankee because it creates more procedures than required in Vermont yankee.

Association of American Railroads v Dept of transportation: a different case arises here because the negotiated rulemaking produced the rule of using flags to announce to the train they needed to slow down. The dept says they must tell the exact location of the men at work and the RR says no, that’s a new requirement and it was not negotiated that way and they only wanted to use flags alone and not people to warn trains of exact locations, etc. They try to use estoppel because for two years they did it that way, agency had not required that and thus it is a departure and as such subject to 553 n+c. Ct says not so. The two emails were not definite interpretations from the agency and agencies should be allowed some time to digest and discuss interpretation of rules before making their statements binding on them and the only thing that made it official was the bulletin detailing the procedure. Ct distinguishes Alaska b/c in this case there was no reliance, no detriment suffered, no capital expenses made based on the emails, nothing was done differently than it would have been done.

Until Alaska, it was assumed that an agency did not have to go through notice and comment to amend an existing interpretive rule. APA does not require it, but ct says it must. How does that square with Vermont yankee where ct says cts cannot impose additional requirements not required by APA? I suppose that once an agency has “adopted” a non legislative rule either via adjudication or by rulemaking, it becomes the same as a legislative rule and therefore the n+C requirements apply. IN Alaska there was reliance for 30 years so it could be seen as acquiescence and adjudication????

Relying on advise from an agency:

In Heckler v Community Health Services: the medicare provider relies on the information provided by the “fiscal intermediary” travelers insurance company on whether some services provided were reimbursable. Travelers says yes, they claim it and then medicare says no, give us back our money it was not reimbursable. Provider sues and says they relied on advise of government’s agent (travelers) Ct says no, they should have known better than to rely, they should have known themselves b/c the law is there for everyone, and they did not rely because they did nothing different and in reality they just had an interest free credit from the government for all those years and cannot claim estoppel. Ct also refuses to say that government is absolutely immune from lawsuits of this kind, but in this case they don’t need to decide it b/c plaintiff cannot prove they detrimentally relied. Those who deal with the government are expected to know the law. Also, advise was not written!!! (?)

In Office of personnel management v Richmond the issue is again a person who gets advise from an unemployment advisor working for the government and he loses 6 months of benefits so he sues to get those back and ct says no because in this case estoppel of the government would require a violation of a statute since they would have to give benefits to someone who does not qualify for them. Again ct refuses to give a blanket ruling against suing the government on estoppel doctrine. Here the government says that there’s a separation of powers issue and having the executive agency’s comment that goes against statute given force of law would go against the legislative power. One of the core argument that the government should be able to be sued for estoppel would tie the hands of givernment. There are too many decisions and too many steps to go through before finality is reached.

Appeal of Eno. Woman loses welfare because acc to agency she is not doing the rights kinds of things to get employment but every time they saw her weekly they just asked her if she was seeking employment, she said yes, they let her go. Then they take her entitlement away without due process and that is unfair. She reasonably relied on the fact that she was doing it right and no one told her otherwise, no chance to cure so to speak. Denial of due process for withdrawing benefit was the basis for reversal on this one. She relied to her detriment and lost her entitlement to something she had a right to and it was based on differing interpretations of a pamphlet, and it would not be a statutory violation to reinstate her.

Also, it is well established that one cannot be held criminally liable for acting in reasonable reliance upon the advice of a government agent.

Happy Puppy case: regulation says the puppies cannot be shipped if they are subjected to excessive heat or cold. They relied on inspector’s advise that they could ship the puppies and get slapped with a fine. ALj says there was as procedure t get a ruling. Happy puppies has attempted to get it but it would take too long. But ALJ says that they knew that any advise would be second best. Here, unlike in Heckler, there is real property loss, bc in Heckler the money was not theirs in the first place here the 2000 fine was a loss for the company. Also here they rely on agent from agency and not on third party like Heckler relied on travelers’ insurance. But ct says usually that when dealing with the government you must turn square corners, so it’s pretty much caveat emptor, because your lack of knowledge of the law will not exempt you from obeying it. With regards to eno, we have an ambiguous law and the clarification was the advise of the agent. But again, unlike ENo who was told time after time she was good to go, here HP only heard once, knew the regulation was ambiguous, and HP is not losing something as big as a lifeline which unemployment is.

Judicial deference to non legislative rules:

This bears on the agency’s choice of what kind of procedure to use to articulate a regulation or position.

Generally agencies get more deference from cts. in questions of fact finding or application of law to facts and cts keep to themselves the ability to interpret statutes.

We are looking for a formula that will give the cts guidance as to what to do in dealing with agencies. And whether the power to do certain things belong to agencies or cts. No clear definition of where the power lies.

Ordering chaos:

Four different types of agency actions:

• Informal rulemaking: Standards for judicial review of interpretation of law, findings of fact, mixed questions of law and facts or application of law to facts.

So what are the different standards of review

| |law |fact |Application (mixed questions of law |

| | | |and facts |

|Informal rulemaking rulemaking |chevron |706(2)A Arbitrary and Capricious |706(2)(A) State farm |

| | |standard. State farm case | |

|Formal adjudication or rulemaking |Hearst v NLRB case |Substantial evidence 706(2)(E) |Hearst v NLRB. Whether there is |

| |And the procedure to analyze it is |Universal camera and consolidated |factual warrant in records and |

| |Chevron: has congress spoken, if not, |Edison cases. |reasonable basis in law (this last one|

| |agency has power to interpret. | |is chevron again). |

|Informal adjudication |?. |Overton park. 706(2)(A) This case |Overton park 706(2)(A) |

| |Chevron??? |precedes state farm and explains | |

| |They did this in the elian Garcia |arbitrary and capricious standard with| |

| |case. |respect to informal rulemaking that | |

| | |was later applied in State Farm | |

|Interpretive rules (re statute) |Skidmore case: very weak deference and|NA because it’s an interpretation of |NA bc it’s only interpretation of law.|

| |depends on how thorough, validity of |law | |

| |reasoning, consistency w/ other | | |

| |decisions. Only persuasive. Guidance. | | |

| |Not authoritative like chevron. Mead | | |

| |is leading case. | | |

|Interpretive Rules regarding an |Seminole rock case: there is even |NA. Only law interpretation |NA only law interpretation |

|agency’s own regulations |stronger deference to agency’s | | |

| |interpretation of its own regulations | | |

| |b/c they know what they meant. However| | |

| |agency cannot simply parrot or | | |

| |paraphrase the statute and call it its| | |

| |own. That’s bootstrapping! | | |

Skidmore Case: weak deference. Guidance only and depending on whether there was a thoroughness evident in consideration of agency’s rule, validity of its reasoning, and the consistency with earlier or later pronouncements. Under chevron, the ct will only look at whether congress has spoken and if not whether the law is ambiguous and if so, whether the agency ‘s interpretation is reasonable. IN Skidmore, the ct can inject their own appraisal of what the statute means.

Christensen: Opinion letter from labor dept. saying employers can chose to mandate time off instead of paying for overtime. Ct says the letter did not go through notice and comment, so no rule, so only skidmore deference. And they find that letter is not persuasive so they don’t follow it.

Scalia says all of this should be given deference as in chevron in his dissent. Souter says in Mead that no, the cts should tailor its response depending on the case b/c every agency works differently and every statute works differently so one size fits all approach does not work.

Mead case: Force of law notion: only when congress appears to have delegated authority to the agency to make rules carrying force of law (even implicitly if circumstances show agency was exercising law making authority).

Barnhart: changes everything because it says that SOMETIMES an agency’s interpretation will have the force of law depending on whether congress meant for cts to defer to an interpretive rule or policy statement in light of the interpretive method used and the nature of the question at issue. So it needs to be case by case to see if Chevron applies to agency’s interpretive rules of a statute.

Seminole rock: Agency’s interpretation of own regulations. There is even stronger deference to agency’s interpretation of its own regulations b/c they know what they meant. However agency cannot simply parrot or paraphrase the statute and call it its own. That’s bootstrapping.

From book:

Reviewability:

1-First question is whether court has jurisdiction. Three elements of that:

• Standing

• grant of jurisdiction to court

Within Standing:

• Prudential strands and

• Constitutional strands: case and controversy

Within grant of jx:

• Statutory grant

• Grant under 1331 “arising under”

• Did P state a cause of action:

o statute that grants P an enforceable right? always go to 702 as default. To establish cause of action, five requirements:

▪ Agency must have performed agency action as defined by 551(13)

▪ Appeal must not be of a kind excluded from judicial review

▪ Cause of action is limited to persons suffering a legal wrong: gov’t action interferes w/ person’s constitutional, staututory, or common law rights, OR you are adversely affected or aggrieved by action or are you in the zone of interest of the statute?

▪ Finality doctrine: 704 says only agency action specifically reviewable by statute or final agency action for which there is no adequate remedy in court is reviewable under APA. Ask, how is this supposed to be? If there is no remedy in court, how can they review it? That goes against redressability.

▪ Exhaustion of remedies doctrine: 704 says that agency action is final even if person has not applied for internal agency review UNLESS statute or agency rules requires it.

▪ And then there’s the sixth element from common law of ripeness. You cannot challenge pre-emptorily before enforcement against you unless statute specifically asks you to.

Venue is usually found in DC because all agencies reside there, but statutes also tell you where to find it.

Also, sometimes a ct will stay a case to wait for ‘primary jurisdiction” from the agency.(This is Ken’s favorite doctrine bc no one else knows about it). This is done when the litigation is between two individuals, as opposed to an agency and an individual. In this case, the determination of who wins may hinge on an agency’s determination of what the law is in the field contested. Or this is a citizen’s suit while there is a simultaneous agency proceeding regarding this issue. So the argument is that agency has the primary jurisdiction over this b/c the agency has the expertise to deal with this. So ct will defer to agency and will suspend the proceedings until there is a resolution of case in the administrative forum.

STANDING: Lujan case is the leading case on this still. Constitutional strand: requires a sufficient connection between the P and the lawsuit, otherwise is not considered a case and controversy. Test of standing:

• Injury: Has the P suffered an injury or is about to suffer one that is (particularized and concrete)

• Causation: Caused by or about to be caused by D

• Redressability: That is redressable by the ct, meaning a favorable court decision would remedy the harm.

With respect to the injury: it must be injury in fact, not purely, ideological and theoretical in nature. Not taxpayers suit because government spending does not individually affect your own tax bill (Richardson). But, public interest groups and organizations, under the doctrine of associational representation, have standing if they can prove three things:

• One of its members would have standing to bring lawsuit

• The lawsuit relates to the purposes of the organization

• The lawsuit does not require participation of the individual members (so action is not for damages but for declaratory relief or injunction).

So that makes it harder to do b/c these groups have to find a member that would actually suffer and injury.

With respect to causation and redresability, you have to prove the injury was caused by the action although sometimes that standard has been relaxed to the point of absurdity where the RR’s fees being hiked would lead industry to recycle less because they would have to pay more for transport and there would be more trash in the woods where the law students hiked!!!

Prudential Strand: Assumption that since these are not constitutionally required, they can be overridden.

• No third party standing. Except that if it affects your rights indirectly you can: bartender suing b/c new reg prohibiting sales to over 21 affect his profits, employer suing b/c law prohibits him from hiring females for certain tasks and that affects his right to contract, etc.

• No assertion of generalized or abstract grievances (these are best left to political branches of government).

• Person must be within the zone of interest of the statute (what the law is supposed to be protecting, the class of people the law is supposed to be protecting)(Mostly administrative rules and seldom applied according to epperson)

Standing in the states: each state has developed its own rules and federal rules don’t necessarily apply.

Case of Lujan v Defenders of Wildlife: ct under Scalia says they don’t have standing because they cannot show injury in fact, it’s not clear that agency caused the harm or injury and that even if ct found in their favor, the international agencies would not continue to harm the environment and habitat of the endangered species. So no harm, no causality, no redressability. Scalia also mentions a separation of powers issue because the court would be vindicating a public concern, instead of a private right (which is the role of the court under Marbury v Madison) and to grant courts that duty is to transfer it to them from the executive branch’s take care clause duties and congress cannot do that by statute. So congress cannot create cause of action for public rights.

Some commentators point to the fact that these kinds of private attorney generals lawsuits are needed because otherwise things would go unchecked since the regulated will not bring suit.

Friends of the Earth v Laidlaw found standing for environmental plaintiffs for something called “reasonable fear” of swimming downstream from a dump of chemicals. So apparently the burden has been shifted from the P to show that there is actual harm to the D to show absence of injury and therefore no reasonable fear.

In Federal Election Commission v. Akins: ct sides with P that he has standing bc his injury is particularized since it affects his right to vote. He wanted some Israeli organization labeled as a PAC and agency does not so the records of the AIPAC are not revealed. Ct says p is within zone of interest and congress wanted to protect that kind of voting right so they satisfy prudential standing. They also find actual injury caused by agency decision and it is redressable. Scalia dissents and blasts them b/c in Richardson they said taxpayers suits were not ok and Richardson had also asserted that not knowing the CIA’s expenditures prevented him from voting intelligently. Majority say that general injury is not enough to prevent standing because mass torts are allowed and they affect a bunch of people the same. Scalia says every arm is different and therefore the issue is whether it is undifferentiated and that Richardson’s injury as Akins injury is not different from the injury that every other taxpayer suffers.

More recently in Massachussets v EPA ct says that a state has standing to sue bc states are different from people and they have an interest in their land and the air and the sky, etc. So, since global warming is causing land to dissapear under water, Mass can show actual injury caused by EPA’s lack of action to regulate emissions from cars. And it is redressable. EPA claims that even if they did, Mass would sink anyway b/c china and Europe are polluting. Ct says that even so, nothing prevents them from regulating to delay that sinking and that every little bit helps. Also, the standard for redressability goes down severely. Whereas Scalia stated in Defenders that the remedy had to be shown to be likely, not just speculative, to fix the issue, Stevens (who concurred in the judgment in Lujan v Defenders but not in the lack of standing holding) says that all we need to show is that there is SOME POSSIBILITY that the requested relief would prompt D to reconsider its decision that harms the P. Granted that injury in this case was much stronger than in Defenders but even the causation is relaxed b/c EPA claims they did not cause it alone, and ct says they caused some of it and that’s enough. This case definitely has a much more relaxed standard but it may be a weird case in standing law. There’s a more generous treatment of the standing requirements. But beware b/c ken said that the difference in redressabilty standard between likely and some possibility refers to procedural cases and not substantive cases like MA v EPA.

Problem 5-1: animal rights issue where the animal legal defense fund who challenge the regulations undertaken by Dept. w/o notice and comment. This is an associational representation doctrine so they have to show they actually have at least one member who is harmed, it is the goal of the organization, and the lawsuit does not require participation of the individual members (so action is not for damages but for declaratory relief or injunction). So if they can show that one of their members is a zookeeper or works w/ the animals, they could argue that the psychological damage to the animals makes them violent and therefore places them at higher risk. Also they do research and it would hamper their research when they’re not in a more natural setting. It could also be argued that the visitors have an esthetic interest that is cognizable bc they’re not having as much fun going to the zoo, and it is upsetting to see the primates suffering. So there are recreational and esthetic interests that can suffice. So there is an injury and it is likely they can show a member who could sue. But they have to show there is current interaction and not simply that in the past they’ve gone to the zoo and plan to do so again, as the lujan case. How about causation? Since this is a choice for the zoo, whether or not they use the cages, the causation link is weak because the zoo could still choose to not have the caged animals. But the argument would be that if it were not permitted, the zoo would not have a choice! And given the spirit of the statute to protect the animals’ welfare, it goes contrary to the goal, but this is substantive and does not go to the causation or standing issue. As far as redressability, it is likely that a favorable court decision would fix the issue and solve the problem.

Next time we’ll revisit spotted owl from standing perpective… and how does Akins relate.

In Lujan v defenders of wildlife, Scalia says in a footnote that if a person has been accorded a procedural right to protect his concrete interests, he can assert that right without meeting all the normal standards for redressability and immediacy. So if there is a procedural right being asserted, like the prohibition against exparte communications, or notice and comment, you don’t have to show everything necessarily. But must you still show an injury in fact? Beware of things that everyone suffers. That’s a taxpayer suit and banned. So even if you have a procedural injury, you still have to show a particularized injury to a specific group of people or an individual. But Akins muddies the water on that. Bc in Akins edges on that direction of allowing a more generalized harm and hence the whole issue as to why we allow mass torts where a bunch of people have the same injury and courts allowing suits where a harm is concrete, though widely shared. But the dissent blasted them saying that even in mass torts, the injuries were particularized because every arm torn is a separate particularized injury. So the ct seems to think the prudential strand of no generalized interests is met here. Scalia says that if we allow the cts to do that, to tell the executive what to do regarding an injury that affects the whole electorate the same way, then you give them a power they did not have bc they only have the power to restore individual rights.

Violations of procedural regulations? In Akins Breyer says that there is standing because there was an injury to their voting rights since they had no information about this Israeli committee to decide which candidates had donations from them, there was causality and the injury was redresable. Also ct finds prudential standing because they were in the zone of interest contemplated by the statute setting up the election committee and the PAC law. But, as Jen pointed out, the ct never really addresses how it is redressable. Can the plaintiff show there is a likelihood that re-evaluation by the agency would rectify the problem. The standing is decided at an earlier point in the case. So we first solve the issue of standing before we even go into the merits of the case.

Agency action Requirement:

Under 702 a person who has suffered a legal wrong or is adversely affected by agency action is entitled to judicial review thereof.

The issue is what agency action is and for that we go to the definitions in 551.

Lujan v national wildlife federation. Scalia says seems to think that a program is not an agency action. A program is a whole and not a specific action. Many individual actions were being challenged and even actions to be taken and he finds that there is no standing for some of the Ps because they only hike in one small part of the land and the agency cares for a huge part of the land. But the others seem to have standing bc there was an actual order to open up some lands for development. But even if they show standing, there was no specific final agency action that they challenge they just challenge the “program” which is many orders. No specificity to find agency action. Does that conglomeration of agency decisions over time meet the definition of 551 (13)? Ct says no.

Norton v Southern Utah wilderness alliance:

Suit to compel agency action to protect the land that could be defined as wilderness from damage from Off road vehicles. Ct says that they cannot do that bc there is division of powers between judiciary and executive and courts cannot determine in what way the agencies should comply with something and in this case there is no agency “inaction’”. It all comes down to whether the action is required to be taken by the statute? Or is there another action the agency could take to comply with the statute? If so, it is discretionary and not reviewable.

Problem of the cars that need to be recalled by informing the owners. Policy is developed by agency for regional recall and there is a complaint to be filed in court to ask for an injunction compeling it to require national notification. Is this an action the agency is required to take? There is agency action, not inaction, but a policy or an interpretive rule. If so, then is it reviewable yet or do we need something more final? It’s not legally binding so should a ct review it? Yes, if found that it is a legislative rule trying to be passed w/o procedures.

Exclusions from Judicial review: Under 701 you don’t get judicial review in two instances:

• When the statute says you don’t

• When the agency action is committed to agency discretion.

701 b also excludes from the definition of agency Congress, courts, governments of territories or possessions and DC, ct martials and military commissions, parties.

In Block the ct says that congress did not have to be that clear in their intent to preclude from judicial review. It is enough to find that they had the intent by seeing if they intended to rely on a class to challenge agency disregard of the law. So in this case which involved milk handlers challenging a price protection reg. the congress said that in the rest of the statute congress gave the right to other people and they had to go through administrative remedies. So the wrds from the case are “ the standard is met and the presumption favoring judicial review is overcome whenever the congressional intent to preclude judicial review is “fairly discernible in the statutory scheme”’.

Problem 5-4: BLM trades land to a landfill and Sierra court challenges bc valuation of land is not fair. But Sierra is not a party. Abbott lab case says that unless congress has said no judiciary review, there is review. Presumption of judicial review. But Block lowers the standard to where if you find fairly discernible intent in the scheme, then you don’t have the right either. But here, since Sierra club is not a party, they’re not included in the mandated arbitration and therefore could bring a lawsuit. Bc the statute says that the trade is ok as long as it serves public interest. In this case, the sierra club is in the position of a watchdog and should be in a position to sue. Block says that in that case preclusion of the suit does not pose any threat to the statutory objectives. IN this case, preclusion of the suit would be a threat b/c the landfill people will never sue the BLM bc it is not in their interest. Also the statutory scheme is so complex as compared to the simple scheme in this case about land trades, that it’s clear that congress looked at all the players in the milk case and could have allowed judicial review but did not. IN this case, it’s easy and the presumption for reviwability remains intact. So in this case it’s an uphill battle to show congress wanted to preclude judicial review.

The second part of 701 says that when an agency action has been committed to agency discretion by law. But 706 (2)(A) gives judicial review for agency action under the arbitrary and capricious standard for agency discretionary acts. The answer is that “discretion” means a different thing in both of those. There are some things that are so fully in an agency’s discretion that cts should not get into it.

Heckler case: unapproved use of an approved drug as a lethal injection. Ps want FDA to investigate this unapproved use which not necessarily did what they said it did. FDA refuses to investigate and take enforcement action. Ct says it is unrevieable. Ct analogizes to prosecutorial discretion of whether or not to prosecute a case. This case quotes Overton park and says that if there is no law to apply, then the agency action stands. But it really has more to do with the judiciary inability to get involved in these decisions where the agency has all the knowledge. In Webster, the CIA agent was fired for being gay and the ct says again that there was no law to apply bc the statute gave that discretion to the agency head. There has to be suitability for review. In Lincoln the health fund for the Indian kids is terminated by agency and ct says they will not review bc agency needs discretion to decide how to spend its funds.

BUT decisions to refuse rulemaking is reviewable. So it does not seem to be a parallel between that and decisions not to enforce. Difference could be that a petition for rulemaking is given by the APA and the APA says that if it is denied you have to explain why you declined. In the FDA lethal injection case it’s more a case of priority setting which cts are wary to do.

In Heckler: Marshall dissents by saying that in prosecutorial discretion you’re dealing with something that already happened and that there is no urgency whereas the agency actions have urgency.

So what do we do when a statute overlaps an agency’s discretion given by organic statute. Epileptic driver whose license is taken away bc secretary refuses to issue a waiver which is in his discretion to do. But the federal rehabilitation act says you cannot discriminate against individuals with handicaps under any program or activity conducted by any executive agency. So, this is not a case where we have “no law to apply”. Also, this is not a case where the cts would be setting priorities for the agency. This is more of an adjudication because it has to do with whether or not a license is given and licensing is reviewable. Individualized adjudication. If there is a meaningful standard by which to judge an agency action even if it is a collateral statute, you can review.

So my question as to whether it would be reviewable if Webster had been a woman rather than a gay man and thus protected by title 7 is still up in the air because it would not be a case of no law to apply BUT ultimately it goes to whether the ct should be getting involved in this kind of thing or not, and in the Webster case since there is a national security issue, it’s kind of iffy whether the ct would review.

Also, always include a constitutional claim! Webster’s constitutional claims are not dismissed as are his claims under the apa. So always add a constitutional claim.

CAUSE OF ACTION:

Any person is entitled to judicial review who has suffered a legal wrong by an agency action and it can be by statute giving that right or as per the APA if they are adversely affected or aggrieved by agency action within the meaning of a relevant statute. Then you have the prudential limit on standing that says you must be within the zone of interest of the statute.

So, you must have standing, both constitutional and prudential, cause is by agency action and must be reviewable by statute or given to agency, and must have a cause of action.

Case of the Air couriers v. Postal office: ct concludes the interest of the postal workers in keeping their jobs is not within the zone of interest that congress had when it enacted the statute setting up the monopoly of the postal office. The main reason behind the monopoly was to ensure the postal service was available to the public at large, but it was never to protect the jobs of the postal workers, so the ct finds they are not within the zone of interest. Somewhat unusual case.

By contrast, in the credit union case, the ct finds that the commercial banks are within the zone of interest that congress had in mind when it restricted the membership in credit unions! So in this case, even though congress does not say that banks are protected by statute, the ct finds they must be since congress restricted the markets available for credit unions.

Problem 5-6: cattle grazing problem in Muir forest. The plan to restrict grazing does not affect current permits but future renewals. Ranchers say that the EI Statement is inadequate bc it does not address alternatives that are better for environment and still would allow them to graze. The argument for the government is that the ranchers are not within zone of interest of either the NFMA and NEPA. But ranchers could argue that part of both is multiple use and range use and that NEPA says maintain harmony and fulfill economic requirements of present and future generations. This is about beneficial productive use of lands. So the ranchers would have an argument. Standing could be had by a rancher whose permit will expire fairly soon.

But is it redressable? He says yes, because this is a procedural argument they only need to show that there is a likelihood that if the ct orders them to re-do the EIS, that it would come out the other way and benefit the ranchers. Jen had the question I had as to how this was procedural and he said NEPA was strictly procedural.

Bennett v Spear (1997) said that a statute like Endangered Species Act which allows any person to sue under its citizen suit provision, actually either eliminates any zone of interest requirement OR extended the zone of interest to all persons with constitutional standing.

Notes say that a person is always within zone of interest if she’s regulated. The zone if interest only comes up for lawsuits by the third persons who are not regulated but are equally affected, like competitors.

TIMING:

Finality focuses on agency. Has the agency finished its work?

Exhaustion of administrative remedies and procedures. Focuses on the litigant

Ripeness focuses on the ct and its ability to do its job properly. Is this case in a posture such that the ct can do its job in the proper way.

FINALITY: APA 704. Agency action made reviewable by statute and final agency action for which there is no adequate remedy in a court are judicially reviewable. BUT preliminary, procedural, or intermediate agency action or ruling not directly reviewable is subject to review on the review of the final agency action.

You cannot have final agency action UNLESS there is agency action rather than the program being challenged in Lujan.

There are three slightly different formulas offered by SCOTUS:

• Franklin test: Whether the decision making process has been completed and the result will directly affect the parties.

• For an agency decision to be final it needs to be one by which rights or obligations have been determined or from which legal consequences will flow.

• Whether the decision maker has arrived at a definite position. Page 498 Darby approach. … get this from someone else.

So there is a lack of clarity as to what the criteria are for determining finality.

Problem 5-7: FLSA problem about workers that had little hours in one job but could get more hours by working in employer’s other company that was entirely separate. A worker files complaint because he’s not getting paid overtime. The wage and hour division of dept of labor sends a letter saying that they won’t prosecute this time but they will continue to monitor the case and they might be prosecuting if they find more violations. The employer is not being adversely affected, arguably so no standing! But there are statements as to legal consequences that will follow if he continues. Some of the factors he discussed was Who issued the letter: the Callahan case had a higher official writing them, also the letters being directed at the client and not to a third person (like in Callahan where the letters were sent to another county), whether the letters responded to particularized circumstances of the recipient of the letter. Since the health care operator had the letter sent to him, it seems to have a stronger case to have court review.

In Appalachian Power. (have not read) the judge blasts the agency’s attempt to make a lot of law through nonlegislative rules to avoid notice and comment. The judge says that this will be considered final agency action. He says this is clearly intended to have legal consequences. It’s not tentative and interlocutory.

In our case of the FLSA we don’t have a run around the rules, it is clear that it is not a command but clearly will have consequences and is intended to be final. So even though there is no final agency action here in the sense that there is no harm yet, the expectation is clear that you’re supposed to change conduct and it will affect you and it seems definitive position. Is there a concrete injury? Maybe if you are mandated to pay overtime from now.

Exahaustion issues can come up in 2 different contexts:

Judicial relief sought when agency is in process still

Litigant attempts to challenge agency actions and ct says they cannot be there bc they did not exhasust remedies even if they are no longer available (otherwise it would defeat the prpose of having those remedies and would give a free pass.

There is distinction between exhaustion under APA and non APA is in Darby v. Cisneros.

McCarthy is non APA case, what considerations are behind exhaustion doctrine. 2 overriding purposes:

Promote authority of agency,

• We should defer to congress intent to have agency take care of this

• Application of agency expertise

• Allowing agency to correct its own mistakes

• If you allow disregard for agency’s process it corrodes the effectiveness of the agency.

Promoting judicial efficiency:

• If agency corrects its own errors ct does not have to and you avoid judicial involvement at all.

• Sets up a more complete record for judicial review bc the agency would compile a bigger record.

But McCarthy indicates that in some cases there should be a balance between those and the interests of the party. Ct says that monetary conmpensation was not avialbale through the agency here, so even if he brought it before administrative remedies were exhausted, since remedy was not available, in this case, it may be warranted to provide review.

Darby: Procedure under APA. He sues under APA challenging HUD determination but has not requested internal review by HUD and the ct says he does not have to. Section 704 does not require exhaustion, it just requires a final agency action and the statute has to specifically require or an agency rule has to specifically require that internal review mechanisms be exhausted before judicial review is granted, Since the statute here did not require it, then it did not have to.

Second requirement is that the the agency also require by rule that the action is inoperative for an appeal to superior agency or authority. Since you’re not being hurt now while appealing intra-agency, we will not review it because you could have waited for agency to review it.

So statute must require exhaustion and agency action must be stayed until review is done, before ct will find that they cannot review a case under APA 704 since APA 704 does not require exhaustion. So they must require you to do it and must be protected while you’re doing it, before the ct says that you need to exhaust remedies. This makes it fairly available for people to get into court.

Problem onpage 499:

First question:

Is this an apa case? Yes, Crane claims APA

Does the statute mandate exahaustion? No, there does not seem to be a statute mandating exhaustion.

Is it a final decision? No, it is an interim step, not a final determination. Under the second sentence of 704 it says that if an interim ruling is not reviweable right away, they are nonetheless reviweable when the whole case goes up on review aafter final agency action. So even if the interim emergency rule were not reviewable, it would be after the final determination comes down.

Is the entity protected while this is going on? No, the emergency ruling stopped the program.

If he does not appeal to the secretary, is he barred from asking for judicial review? Apparently not because the language is not clear and convincing! That administrative appeal is required before he requests judicial review even though he is protected while the appeal to the secretary would be going on.

This doctrine of exhaustion is alive and well in state laws and it seems to have more breadth and flexibility than in Cisneros and Darby. So make sure you do attempt exhaustion of admin remedies before going to state court.

Issue exhaustion: judge made doctrine. Can you raise an argument in ct that you did not raise in the agency. Have you put them on notice and given them an opportunity to address the concerns. Idea is that agency should not be tricked in a proceeding. And it may be specified by statutes as well, so watch to see if you can raise an issue that was not presented in the admin proceeding.

Ripeness: relates to ability of cts to resolve disputes at a particular time. Overlaps with finality, but in some cases you would have an argument but not another. Overlaps with standing too. Protects agency from cts getting into things where the agency has not yet made a final decision:

Are issues fit for judicial review at this time?

Is there harm to the parties if judicial review is withheld?

Abbott lab case: challenge to labeling rule from FDA. Everytime a name is used on a label, established name (generic name ) also has to be said. In this case, the ct determines that it is ripe because it is a staright forward interpretation of statute whereas Toilet Goods case, is not only a regulation but it depends on facts before a hardship can be established. In Abbott there is an immediate hardship because you have to change all your labels. ABBOT CASE OPENS DOOR TO PRE-ENFORCEMENT REVIEW AND Fortas says that under section 705 they would ask also for a stay in the regulation and that would be bad for the safety, environment, etc. and it would slow down regulations of agencies from taking effect. He, of course, assumes that the ct would grant the injunction, but in reality the injunction would not be lightly granted.

Problem 5-9:

Problem 5-10: ripeness problem might be that the order is not self enforcing and there might not be enough of a record developed for a ct to look at .

5-11: FOIA he says it is a legal issue. How about a hardship? No payment has been demanded yet. But argument is that the prospect that you have to deal with added costs, may discourage the seeking of information.

2007 exam on Wednesday.

3 hours and a quarter.

Last year’s exam:

Sam taxi driver in AZ got a license. Provision in statute giving

The statute says there is a hearing.

Is there a need for a real hearing if it only says that there is a written request for reviwing

What’s the significance of advisory posed in website? Is agency trying to pass a rule without n and c? If not, is it force of law. Even if only inter[ertive rule needs to be posted in federal registers and if not was he notified. Is it, alternatively, exempt bc procedural rule? Should revocation be imposed bc he has not been shown to lack qualifitcatoins? Due process concern, adjudicatory concern of individualized? Property interest since he relied for 15 years? Liberty interest to engage in occupation? How about he relied on it bc agency did not enforce? What about mathews v elridge? Additional safeguards? 558c provision that deals with license revocation. Requires written knowledge of grounds for revocation. Estoppel argument. Also bowen factors to determine whether rule or policy statement. Application of law is erroneous and so it’s arbitrary and capricious result like overton park bc informal.

2nd question: go into revieability: standing, mootness, ripeness. Etc. Prudential as well as constitutional strands of standing. Did congress intend to preclude reviewability? Was it given to unfettered agency discretion? Bc the statute says qualifications it does not seem like the agency has unfettered discretion, unlike that CIA case where head could fire people as he wanted. Here they need to pay attention to the qualifications issue.

Cause of action, legal wrong or adversely affected, zone of interest.

Finality: definitive statement, etc. abbott factors.

Ripeness: ready and hardship protection while waiting for review, etc.

• MAKE SURE WE WRITE THE PROBLEMS AND ADVANTAGES OF NON LEGISLATIVE RULES. MAKE SURE WE HAVE SEACOAST AS OVERULED AND THE PRINCIPLES IN CHEM WASTE followed.

Question about the eagles and how to arrive at a rule that will withstand judicial review. Choice of procedures:

• Wait for adjudication formal or informal: impose a definition in that context. Involves waiting for violator and takes longer. And keeps the definition in the context of an individual proceeding. Hearst would apply to judicial review.

• Rulemaking: notice and comment. Opens prcesss to public inpit, allows process to reach wider audience. Chevron would apply to judicial review. Legislative and non legislative bc non legislative would then be applied to adjudication.

• Negotiated rulemaking process was also mentioned by some students.

*Section 551 of Administrative Procedure Act defines what an administrative agency is. Basically anything but the courts, congress and, although the definition does not say so, the president (Franklin v. Massachusetts).

Either regulate private conduct or carry out entitlement programs (distribute benefits from the government).

* Section 552 is actually seldom considered part of the APA because it is actually FOIA (Freedom of information act).

*Fundamental question addressed by Administrative law is how can the legal system establish limits on the pervasive power that those agencies have and at the same time allow them to do their work and not unduly restrict individual freedom. The new deal created a much more powerful government and recognized that we need it and we need the instruments to control society and yet we need to establish control over the controllers that have so much discretion. APA was the compromise.

*The three functions of agencies:

Rule making

Adjudication and

Investigation.

I-Rulemaking: agencies publish their regulations in the Federal Register. And then the gov’t publishes them annually in the code of federal regulations (CFR).They are subject to judicial review of whether they have surpassed the agencies statutory authority. Only valid if agency follows the procedural requirements applicable to rulemaking.

• Two types of rulemaking:

• Formal:

o has three steps:

▪ notice,

▪ chance to participate and

▪ statement concise and general of their basis and purpose (of the regulations). Generally done this way except for interpretive rules, statements of policy, etc. or for good cause for bypassing the notice stage of rulemaking.

• informal.

II-Adjudication:

• Some agencies cannot adjudicate violations of statutes they enforce and they can only sue in federal courts.

• Others can administratively enforce.

• Some can do compliance orders (like injunctions) and penalty orders (equivalent of fines). Clean water act allows EPA to issue orders and obtain penalties administratively w/o going to ct. Cases are tried in front of an administrative Law judge.

III- Investigation: some agencies have power to compel persons to turn over to them information or to inspect the premises where they work or reside.

Agency action in 551 (13): includes the whole or a part of an agency rule, order, license, sanction, relief, or the equivalent or denial thereof, or failure to act (so when they don’t act, you’re allowed to sue them for that too!)

(5)Rule making: agency process for formulating, amending or repealing a rule.

(4) Rule: agency statement of applicability whether general applicability (or specific, but usually general applicability) of future effect, designed to implement a particular policy. KEY is that it is FUTURE effect. (see the whole definition).

(7) Adjudication: agency process for the formulation of an order (NOT A RULE, PLEASE NOTE THIS) So orders come from adjudication, rules from rulemaking.

(6) Order: whole or part of a final disposition whether affirmative, negative, injunctive, or declaratory in form, of an agency in a matter other than rule making but including licensing. (so, in other words, anything that is not a rule, is an order.

Two Types of rulemaking proceeding under APA:

Informal: §553 (notice and comment).

Formal: §556 and 557. trial type rule making. Conducted in a way you would expect a formal court proceeding to be done. “On the record” rulemaking. Meaning only information that can affect the rule is the information that goes to the record of that proceeding. there is a certain trigger that has to be in the agency’s governing statute that says it has to be “on the record” hearing for formal to be used.

not under the APA: hybrid. More than informal but less than formal. May require some input from public whether in writing, oral or electronically. So the APA does not require it but the statute does require it so the editors have called it a hybrid. So it reminds us that agencies are ruled not only by the APA but also by their own enabling legislations, the statute that creates the agency. So it is from those additional requirements specific to that agency that the hybrid procedures come.

Adjudication under APA:

1- formal adjudication is under §554, 556,557. Trial type on the record.

But mostly, day to day adjudication is informal. Since the APA does not address them, they are subject to judicial review on the basis of not being done according to the enabling statute, and they can also be subject to due process challenges.

Because these mirror the separation of powers in the government, we may have some problems perhaps even constitutional problems because these all are vested in the same agency and that may give them too much power. Historic background: note 2 on page 28. The APA in large part is a response to those concerns. It limits the powers and sets out ground rules and procedures that agencies must follow to do all their functions. The APA was a compromise between business and proponents of the New Deal and high regulation. Business lost in the sense that way more regulation is there, but they won a victory with the APA because they have limited those agencies’ powers to do what they do and the potential for abuse. The APA slows down the government and makes it so that things need to be on the record and there’s not as much arbitrariness. So APA comes out of a highly charged political context.

Also, on page 29 there are some objectives or purposes for APA:

• Meaningful participation on government decision processes that affect your property and life. Very much a democratic value

• Accuracy in the fact finding. Bring to light info that is relevant and necessary for agency to do its job.

• Efficiency in getting the job done.

• Acceptability of the fairness of the procedure by the general public and the participants.

There are also tradeoffs between the procedures and the substantive requirements. See note 6.

Note 7 pokes a hole in what you might be tempted to go for in a stereotype as to who favors more procedures in government. Not necessarily always the public.

Who is the client when you’re a government lawyer? Apparently the agency you represent.

Ethics: page 42.

According to Fein, the president is your boss and he was elected and his policy preferences should be respected. Assumption in electoral process is that where there are ambiguities, if a president directs an interpretation within the bounds of the law, you should obey it. But who is your client? The public interest broadly? How do you deal with that? Should your personal feelings about the public interest color your actions as lawyer for the organization? Book breaks it down into public interest, agency or government. It seems the book leans towards agency being your boss. But if president has a possible interpretation of the law, then you follow it.

Rulemaking:

The most important part of an agency’s function because it is to rules and regulations we turn most often, not to statutes when we need to understand what laws apply.

Chronological process:

Initiation of rulemaking:

At least four sources:

• Statutory mandate may call for regulations to be made and even if statute does not say it but agency knows it needs to then:

• Within the staff recommendation. Staff intiated rulemaking. Bottom up

• Top Down: prompt letters from the Office of Management and Budget (OMB) or the president memos.

• 553 (e) petitions for rulemaking: agencies will give opportunity for interested parties to petition for rulemaking.

553 (c) governs formal rulemaking that requires an “on the record” rulemaking as per the statute. It sends you to sections 556 and 557 to follow those directions. Most rulemaking, however, is done according to notice and opportunity to comment under 553, the informal rulemaking.

553(b) tells you about the notice that needs to be published in the federal register (NOPR (notice of proposed rulemaking)). There could be challenges to the content of the NOPR if they were not accurate because if the notice does not alert interested public of what the real issue was, there is no notice at all.

Notice is the first requirement of informal rulemaking under 553.

553(c) says that agency will offer an opportunity to comment in a written views and comment. Hence, notice and comment. Written comment. No requirement of hearing.

Also under c, it says that after comment, the agency will include a concise general statement of its basis and purpose (for whatever rule they decided to adopt) and it is published in federal register.

The rest of c tells you about the formal rulemaking stuff and sends you to 556, 557.

So 553 is the main event or arena as far as procedures required. But they also have to abide by the own agency’s procedures to rulemaking. CFR publishes the rules of the agencies. (?) it also publishes the agencies’ own internal rules. They are also published on the websites. Some agencies are also allowing submissions of comments electronically. They also have to comply with constitutional requirements and judicial review on these is appropriate, but courts cannot make rules for agencies otherwise. Also they have to comply with the organic statute that created the agency and follow those directions (and those may require a hearing). And other statutory requirements. Also, the use of an advisory committee by an agency is governed by a particular statute and there are procedures for how other agencies and people can have input into the rulemaking (regulatory negotiation). Judicial interpretations of 553 affect rulemaking as well. Last source are presidential executive orders: like regulatory impact analysis reports that are required: they call for the cost-effectiveness or economic impact of regulations.

Input from people who would like rulemaking from the agency:

Problem 2-1: Fifra problem about pesticide. You need a license to sell it and to do that you need to show that it is effective and safe for the environment. SO you need tests and experiments. To do those you need a permit and that can be costly and time consuming. There is an exemption from the permit for chemical pesticides for small field tests. Your company makes biotech bioengineered bacterial based pesticides and those are not included as chemical pesticides. They want to do small field tests but don’t want the permit process. What do you do? Since you need to get them exempted as well, where do you go? You basically want the rule changed. But to whom do you talk? You might want to form a coalition with allies who do know how to deal with the agency, maybe people who have opposed the chemical pesticides to see if they can push the cause forward. You can call anyone there and ask them to talk to them, NO ethical problems there. If you treat them to lunch, that could become dicier. You can also file the petition to get the ball rolling but the agency may take as long as they want as long as it is reasonable… what ever that means! You can just write a letter requesting the rulemaking, it does not have to be any specified paper (but check anyway). No attorney needed. Any interested person.

You should also file for the permit at the same time so you can get both processes going. Some natural allies would be environmental groups who want chemicals gone, retailers, consumers, agricultural workers, lobbyists from Washington, especially because it gets national attention for the issue, or a Washington lawyer who knows his way around this agency.

What arguments would you make? That this is also benefiting the agency because it makes them look good that they are providing incentives for non-chemical pesticides and that benefits the environment. You approach it from the point of view of the agency and what their benefits are in changing the regulation and align your interests with those of the agency. And send the petition according to the agency’s requirements for a petition.

So when you file and agency does not act on it, what do you do?

Can you challenge non action? Yes, under section 702 allows legal review by a person harmed by an agency action. How is inaction the same as action? The definition in 551 includes failure to act! So that’s what action means: action or inaction. Failure to act=action. 706 is scope of review: reviewing ct shall compel agency action when unreasonably delayed action or unlawfully denied. (read) So you may have an interlocutory appeal to a court. Sometimes courts can issue a writ of mandamus ordering agencies to take action or engage in rulemaking. Trac case, the court is hesistant to force agency to act. They don’t want to interfere with the discretion of the agencies in setting priorities. They set out some 6 factors as to what to look at when assessing agency delay. But they find that four years delay is unreasonable so instead of issuing a mandamus, they retain jurisdiction. They are very reluctant. IN the spotted owl case they give the agency 90 days to come back and tell them why they made the decision and why it’s not “arbitrary and capricious”.

553 e allows people to petition for rulemaking from an agency. Federal clearn air act allows California to impose more stringent standards to protect the air from pollution but whatever standard California takes don’t take effect until the EPA applies it. So Ca petitioned for rulemaking and EPA just sat on it and CA sued for failure to act along with other 14 states regarding Ca’s tail pipe emissions standards, and EPA finally denied the petition, since this is a final adjudication it is being appealed. Under section 702 you can get judicial review if you have been harmed by agency action (or inaction according to section 551. Remedy section 7 something says court can compel agency action.

However, the TRAC case and even the spotted owl case reveal that the courts are very reluctant to compel any kind of action from agencies and have great deference for agencies. So, in TRAC the ct retains jx and in the owl they give the agency more time to state why they decided what they decided. In TRAC there are six criteria as to whether the ct should issue a mandamus: 1- the time they take to make decisions must be governed by a rule of reason 2- the rule of reason may be guided by any timetables set out by congress 3- delays that might be reasonable in the sphere of economic regulation are less tolerable when human health and welfare are at stake 4- ct should consider the effect of expediting delayed action on agency activities of a higher or competing priorities 5- the ct should also take into account the nature and extent of the interests prejudiced by the delay and 6- the ct need not find any impropriety lurking behind agency lassitude in order to hold that agency action is unreasonably denied.

But should the ct be able to re order the agency’s priorities? What if you have several lawsuits sending agency in different directions and now they have several projects in top priority? That’s why cts may be reluctant to get into that.

If the ct were to find that the time is unreasonable what kind of remedy is available? Ct can issue a writ of mandamus, or can request a timetable or cooperative dialog to determine what is reasonable. BUT the likelihood of success in any lawsuit against an agency for this type of thing is slim to none.

If, however, the agency denies petition, how likely is it that a ct will reverse the determination of the agency? The APA requires a brief statement of the reasons for the denial. Agency can claim it’s busy reviewing other cases or current policy is working well.

• Arkansas Power and light co. v interstate: ct determines that denial of petition is the right thing to do. Ct found the agency had sufficiently explained itself and that the alternatives proposed by agency were good enough to solve the petitioner’s problems. It currently allowed a case by case basis review and the ct determined that was sufficient. Agency says that compiling the database is going to be too resource consuming for both railroads and agency. If an agency has a choice based on the organic statute of using rulemaking or some other mechanism to operate, then the agency’s choice, as long as well supported, will stand.

• Northern Spotted Owl says that decision not to list the owl contrary to even agency experts opinions was capricious and arbitrary under section 706(2)(A). and agency did not explain how they rationally decided what they decided. No explanation and no logical connection between experts and the decision. So ct gives them an additional 90 days to amend and explain why they came up the other way. They remand the case to lower ct and give agency deference to come and explain their decision. They could have ordered them to include the owl but they are reluctant to get into an area where the agency has the expertise.

So what if and agency says they will go through rulemaking and do so and then decide they won’t after all? What would court do then? Having gone through the process, and reaching the “wrong” decision (not to do the rulemaking) the ct is in a better position to determine if the decision was right or wrong. If it is well explained ct will probably uphold. Whereas when the agency only declines to engage in rulemaking, the ct does not have much to work with.

A ct is more likely to defer to agency when agency has sat on the case than when it has acted!

By the way, the DC circuit is the font of wisdom regarding administrative law because that’s where most cases are brought since the agencies are there and you have venue there. Also, some statutes specifically state that you must bring the action in DC.

EXCEPTIONS TO RULEMAKING:

553(a): General exceptions: out of any rulemaking at all under APA. So it does not send you to 556 or 557 .

• military or foreign affairs functions and rules involving agency management or personnel or involving public property, loans, grants, benefits or contracts.

and then specific exceptions in 553(b): so not subject to notice and comment requirements. does not apply to:

• interpretive rules

• rules of organization and procedure or practice

• general statements of policy and

• other rules for which notice and public procedures are:

o impracticable, (when the due and required agency functions would be unavoidably prevented by its undertaking public rule making proceedings)

o unnecessary (minor technicalities and public is not particularly interested)

o or contrary to the public interest (if there is no public interest in this issue the agency does not have to do this) (my question is whether this is the correct interpretation of public interest…Ken shares my discontent with this interpretation)

o and good cause needs to be shown for these.

But agencies appear to think that the burdens of notice and comment are heavier than the benefits.

But the conundrum is to decide whether something is a procedural rule or a substantive rule. Three cases: American Hospital Assn v Bowen, air transport association of America v dept. of transportation, and finally JEM broadcasting co. v. FCC.

In American Hospital the ct says that if a rule or agency action also encodes a substantive value judgment or puts a stamp of approval or dissaproval on certain types of behavior and it has a substantial impact on a party. Usually a procedural rule affects the agency or HOW a party presents himself to the agency but not his substantive rights.

January 30, 2008

SEE page 97 for federal register online: .

GPO stands for the government printing office

back to the rule that notice and comment does not apply to internal regulatory rules, interpretive rules and general statements of policy or other for which it is impracticable, unnecessary, or contrary to public interest.

Three cases: Am Assoc. Hospitals, air transport case (no longer binding precedent) and JEM broadcasting. Not clear what the tests are for determining what is a procedural rule and what is a substantive rule that needs notice and comment. Is the agency action one that alters the rights or interests of the parties or is it one that alters the manner in which the parties present themselves or their viewpoints to the agency. But it is very difficult to determine which kind of rule it is, just like in civ pro the eerie cases showed.

These exceptions should be construed narrowly because they go against the policy of openness and democracy and offering opportunities for both the public to participate and for the agency to learn from that input. What about the good cause?

Interim final rule: when an agency adopts a rule without notice and comment it sometimes invites the public to make comments saying the agency will consider it if appropriate and make changes if needed.

What about invalidating a rule that a ct found had not gone through notice and comment? Tehre’s already reliance on those who have began compliance with the regulation so some challenges may be forthcoming.

Formal, informal, and hybrid rulemaking: how do you determine when a rulemaking needs to be formal, on the record, on some fixed visual form so the ct can review it to determine that agency based its decision strictly on something that’s on the record. So QUESTION is: what does the statute have to say to trigger the formal procedures requirement.

Three cases: Us. Allegheny Ludlum steel corp. , US v Florida East Coast railway and Vermont Yankee.

In Ludlum, the ct says that the enabling or organic statute does not have to specifically say “on the record” but it does have to say something very similar to that effect. If it just says hearing it’s just a hearing but does not trigger “on the record” 556 and 557 formal rulemaking proceedings. But in Florida East coast railway co. renquist says that the meaning of the words will vary depending on whether the hearing is required in a rulemaking procedure or in an adjudicative proceeding. Adjuducative is more court like. We should not too readily throw formality in hearings that have to do with rulemaking (legislative facts) since it is more fact finding and information finding than when we do an adjudication which is more like a trial. Hence if a “hearing” is required for rulemaking, it does not necessarily mean on the record, but if it’s an adjudication, it is likely more formal. In fact in this case, renquist says that hearing does not mean an actual hearing and it can mean a paper submission.

Cts are very reluctant to construe a hearing to mean “on the record”.

Vermont Yankee case. The supreme court slaps down the dc circuit court of appeals because they had remanded a rule to the Atomic Energy commission because they had said that yes, they conducted to discovery or cross examination in their rulemaking. SCOTUS said cts cannot add more procedures to agencies beyond what the APA requires them to do or their statutes require them to do, unless there are some constitutional constraints that require it. The ct says Monday morning quarterbacking is not good and would encourage the agencies to do formal rulemaking in anything they do and therefore the efficiency of the agency would be compromised.

• Informal rulemaking:

553 B (1,2, and 3): what’s to be on the notice. Read it. Time, place and nature and also legal authority under which the rule is proposed and either the terms or substance of the proposed rule or a description of the subjects and issues involved.

Struggle is whether you go through notice again when you change the final rule again because of comment. How much change is too much change? The idea is to have “fairly apprised interested persons” and if the final rule is a “logical outgrowth of the rulemaking procedure” then you’re ok.

We had a discussion on the beef producers case and the chocolate manufacturers case. Chocolate was a stronger case than the hypo of the beef.

Electronic dockets that automatically publish comments may change the landscape bc they give notice to the other parties with an interest.

Statute APA does not say anything about what the time period should be for receipt of comments so it’s usually stated by the agency. There is a timing instruction in so far as the agency has to publish it 30 days before it takes effect. Probably so that if there are challenges they can take place and stays can be issued.

February 4, 2008

Ex-Parte communications:

553 does not say anything about communications with the agency outside of the comment stage or procedure. For formal procedures there are provisions. in 551 there is a definition of Exparte communications: communications made to decision makers in the agency outside of the prescribed and public procedure, so basically any private communications that don’t comply with openness and transparency of 553 and don’t provide an opportunity of notice to the other interested parties. In 557 d it says that no interested person outside the agency shall make or knowingly cause to be made to any member of the agency … an exparte communication relevant to the merits of the proceeding. And in other parts of 556 and 557 it is evident that decisions can only be made on stuff that’s on the record, so any exparte by definition is ruled out because they cannot make decisions based on this.

Problem 2-6: beefers have now called in the congressional cavalry and the senators want to meet with the department of agriculture. What can you do as lawyer for the department? The secretary of the president also wants a briefing from you.

There are about 4 different legal tests discussing whether these are allowed or not.

Sangamon Valley discusses that due process prohibits ex parte contacts when rulemaking involves “conflicting claims to a valuable privilege”: the airwaves. The government gives you the right to use the airwaves and so when they take it away, it’s a due process case, whereas in the beef case, we’re only dealing with lost profits and nothing to do with removing a license. So Sangamon Valley was more of an adjudicatory decision because they were deciding who would get the license. IN the beef case the analogy is not that close.

What about the APA? Could it help us to determine whether we can take the call of senate or the president? No, the APA is silent about communications outside of the comment making period. Maybe congress did want the exparte communications to go on in this case since they did not specifically bar it. Rulemaking was supposed to be informal and more free form. Lobbying is arguably a good thing.

In HBO the court points out that exparte communications don’t allow for those communications to be on the record available to review, it’s an insult to the judicial process. So there is always the concern that if the record is not clear and there are secret matters that were taken into consideration for decision, the court cannot really review the decision. So record is incomplete or misleading. Also, what’s the use of the public comment period if you will allow exparte communications that are not subject to rebuttals. Ct says that once the process has been closed, any agency member should not be talking to any interested party, BUT if they do, the communications should be made public to allow the other parties to see it. Is this still good law? Possible although Sierra club seems to overrule it, but Sierra is not an APA case, it is more about the hybrid requirements under the Clean Air Act. BUT Vermont Yankee obliterates the HBO case because in HBO the ct basically imposses new procedural requirements to the agency’s requirements for rulemaking. So HBO is a very weak precedent. Vermont came after so it possibly overruled HBO

In Sierra Club the ct says, under the clean air act , and under Vermont Yankee Case, the ct cannot impose additional requirements. They find that the Clean Air Act does not say anything about information coming in in writing after the comment period, so the information can be considered as long as it is publicly available and placed on the record and on the docket. Oral communications also should be summarized and placed in the record IF THEY ARE RELEVANT. So the difference is that here the ct does not say these comments should not happen, they say they can take p[lace but because of a specific provision in the clean air act, you need to make them public IF THEY ARE RELEVANT. Because it supports the record and allows the ct to review better. Ct also cautions against requesting communications be made public between agency and president since that’s executive power and also violates Vermont Yankee and they would take power the constitution does not give them (it’s legislative power). They also say that congress can talk to agencies because it is legislative unless it hijacks funding of an agency. Open communication has a lot of plusses and everyone should be involved in it. Cts are not likely to stop those communications.

And even though HBO is not enforced, and the law does not require the docketing of exparte communications, the agencies usually want to do it anyway.

Second possible approach is some sort of interpretation of the silence in the APA as the HBO case. DC has never overruled it but has also never followed it because of Vermont Yankee. So it is unlikely that the strong avoidance after public comment that HBO called for would be enforced.

Third source of limitation governing contact with senators would be a statute telling you that you cannot meet with anyone. IN the school lunch statute it could say that you cannot or that if you do, you need to document it. But the statute would be necessary because the APA is silent in this.

Fourth source is agency regulations on the subject of exparte communications then you call them to the attention of the secretary. Why might an agency make the choice to restrict the exparte communications during the rulemaking period? Covers you against this sort of thing, and insulates you from charges that you’re playing favorite.

So if agency does decide to meet with everyone and pass the rule, what can beefers do? Lobby congress, sue the agency, or petition for repeal of a rule since you can always petition for rulemaking.

Other issues we read about:

Non-delegation of powers. The whole thing about bicameralism and presentation, and how the acts are written without “intelligible principles”. IN the Whitman case ct said that congress had said enough because congress had said “requisite” requirements and they deemed that enough. Scalia said agencies are not legislating but simply executing the laws passed by congress. Stevens said that it is legislating and it’s ok because there is enough general guidance from congress. I think they’re executing through legislating!

February 6, 2008:

The same kind of concerns come up in states. A constitutional challenge came up against the California coastal commission b/c they were unconstitutionally structured due to who was allowed to appoint members of the commission and remove them. The executive branch appointed them and congress could remove them, and that was not constitutional because it would be one power intruding on the powers of another. The law was re-written so that congress could appoint some members and they cannot be removed unless for good cause and they cannot remove the ones appointed by the governor.

Issue of legislative veto under Chada. Congress had given power to the attorney general to decide a case but then they could overturn his decision. However, this violated the bicameralism and presentation doctrine and the separation of powers and both houses of congress need to act and in this case it was unicameral, so it was not legislative and therefore congress outside of its power. If congress does not like what an agency is doing, it can pass a law to change it, but it has to be a law. So Congress created this “express regulation review” (this is not the real name) under “Congressional review of Agency Rulemaking Act” where they have devised a way to quickly issue a law that prohibits a proposed regulation from an agency. So, the rulemaking process may involve some legislative review or some other kind of bureaucracy before there is finality in a rulemaking.

Next week we’ll be reviewing judicial review of rulemaking.

Hybrid rulemaking. Page 126.

These require procedures beyond informal rulemaking but not quite as big as the formal rulemaking. Definitely beyond APA. Some of these requirements come from the statutes establishing the agencies themselves, others come from further legislation from congress and executive orders. And some agencies have had their own internal practices be more than required because they want to produce a record that will pass muster judicially, even though under Vermont Yankee cts cannot add more requirements than organic statutes and APA.

Legislative:

The firs of the added requirements that historically kicks off the notion of agency rulemaking to account for additional type of concerns is that National Environmental policy Act that required Environmental Impact statements, thus asking the agencies to stop and think about the impact any rule will have. Some of the new requirements, like the regulatory flexibility act, are procedural, identification of alternatives that will accomplish the same effect but at the least economic impact on the regulated entities.

Should this kind of legislation that requires extra things be interpreted or have judicial review so that if the analysis is not done carefully the agency can be stopped? In NEPA there was to be none except for the counsel advocate of the SBA. But then in Srefa the legislation said that there was judicial review where the cts could remand it to the agency. So there is some reluctancy to add teeth to enforcement. So they limited the remedy, because they want to let agencies do their work but constrain what they do so they don’t have too much economic impact. Then there’s the paperwork reduction act. Requires agencies to do notice and comment before imposing any reporting or recordkeeping requirement on persons. Unfunded mandates reform act of 1995 establishes agencies have to discuss the why, how, etc of every rulemaking they want to do if it will result in costs of over 100 million on state, local, etc government.

Office of information and regulatory affaird (OIRA) has the power to review all these agency procedures to approve of disapprove these measures from agencies. This office is under the Office of Management and Budget (OMB) which is in the white house.

Executive: Reagan asked in 1981 for cost-benefit analysis from agencies to conduct this before enacting any regulation that is a major rule (impacting $100 million or more in the economy. All other presidents adopted similar views or executive orders. The epitome of this was during the contract with America era of Gingrich that every law had provisions requiring cost-benefit analysis and it never passed (it’s hard to measure benefits and many laws would never be passed). But we still have the same requirement by the executive orders and OIRA has to review all the rules that would have that impact of 100 million. Bush amended Clinton’s order and wants to make some changes in the regulatory power: OIRA still reviews but is broaden to include review to guidance documents and added that no rulemaking shall commence until approval by the agency’s regulatory policy officer (which as per the same EO will be appointed by the president within 60 days after this EO is passed). So there’s controversy over that, but it is the internal organization of the executive branch. More hands on than we’ve seen before.

What kinds of impacts should agencies look at before promulgating a rule:

• Environmental: NEPA, global warming (probably will be soon), environmental justice (impact on poor communities)

• Economic: RFA – impact on small business

o Executive orders

▪ Unfunded mandates

▪ inflation

• Health

• Family

• Civil Litigation: to what extent will the agency action promote litigation will create rights to sue. Not add to the litigation burden

• Federalism: state rights

• Property: land use etc.

• Trade

• Energy supplies

So now all those impact statements or considerations become part of the record and therefore judicial review will look at this.

Negotiated rulemaking: Negotiating regulations or Regulatory Negotiations:

When the rulemaking comes from an ADR where both sides of an issue meet with the agency and the rule that gets implemented is the compromise from both parties. This is not Instead of the APA notice and comment process though, so the agency facilitates this so they can come up with a proposed rule that will then be subjected to notice and comment. But the criticism is that it becomes private law instead of public law and public interest may not be served by the two parties that participated in the negotiation. And if the agency sees something that does not square with its mandate of political orientation it may be reluctant to add it because it will upset the agreed to proposed regulation, so the agency is not complying with its responsibility.

It is not used a lot and its success is iffy. Tehre is a list of factors on page 139 that the administrative commission. Some considerations that would help answer whether a regulation is a good candidate for negotiated regulations.

02/11/08

This material – statutory interpretation and application of the rule

APA § 706 – Judicial Review

Reviewing court shall

• compel agency action unlawfully withheld or unreasonably delayed and;

• hold unlawful and set aside agency action, findings, and conclusions found to be

o Arbitrary, capricious, and abuse of discretion, or otherwise not in accordance with law;

▪ Review of informal rulemaking actions

▪ “Arbitrary and/or capricious test”

o Contrary to constitutional right, power, privilege, or immunity;

▪ Constitutional violations

o In excess of statutory jurisdiction, authority, or limitations or short of statutory right

▪ Review of informal rulemaking actions

o Without observance of procedure required by law

▪ Procedural violations

o DEALS w/ FORMAL RULEMAKING ( not supported by substantial evidence in a case subject to 556 and 557 or otherwise reviewed on the record of an agency hearing provided by statute OR

▪ Formal rulemaking issues

▪ “substantial evidence test”

o Unwarranted by the facts to the extent that the facts are subject to trial de novo by the reviewing court

▪ Hardly applied b/c trial de novo rare

If courts are asked to substantively review agency actions ( what power should they have

• Usually seen as a question of deference ( what degree of deference should be given to an agency action

CHEVRON – VERY IMPORTANT! JUDICIAL REVIEW OF AGENCIES

Statute being interpreted is a section of the Clean Air Act

• But universally interpreted as a showing how to interpret the APA

o B/c although CAA has a separate provisions for judicial review

▪ But exactly the same language as the APA

Court – Concludes that if agency makes a reasonable compromise of conflicting interpretations ( courts has to give deference ( cannot replace their own interpretation for that of the agency’s

• BUT FIRST has to be AMBIGUITY in the STATUTE and possible interpretation

2 Step Chevron Process

Step One

• Is there ambiguity in the language

o If no ambiguity and intent of Congress is clear ( review ends

▪ Then is court’s job to say the language is unambiguous and enforce it

Step Two

• IF there is ambiguity ( have to determine whether agency’s interpretation is unreasonable . Under plain meaning approach and

Reasoning for Deference in second step

• Agency is the expert ( more knowledgeable about the issue

o Were given the power to interpret the statute by Congress

• Judges are not part of the political branch

o Agencies are part of the executive branch

▪ Since agencies are the one that are politically responsible for the interpretation they are the ones that should be making the interpretations

▪ Heads of the agency are accountable for agency actions so they should be the ones making the interpretations and fill the gaps left by Congress

VERY IMPORTANT CASE!!

Problem 2-9

Congress has new statute for processing chickens

• Has section for imports from other countries

USDA interprets law as allowing countries other than Canada and Mexico to have standards that are AT LEAST equal to standards and methods in US

• Congressional statute says the same

So the National Broiler Council wants to challenge USDA’s interpretation

Challenging law because THE SAME means in their view exactly like US standards

• NBC doesn’t like this because will increase competition from other countries

o And other countries may be using safer methods ( which will make their products more desireable and force US growers to adopts those methods

• What are the other concerns of ABC other than Australia?

o Is there a concern that poultry may be less safe?

▪ If less safe and causes health scare ( might turn consumers against poultry in general

▪ Might be less expensive than US standards and cause unfair competition

• What arguments can be made under CHEVRON for NBC

o Text of Law

▪ That Congress’ language is unambiguous because clearly says THE SAME which = exactly/identical

← Look to definition in dictionary in Random House Dictionary

← In same statute Congress used two different words ( one for Canada and Mexico ( another word for other countries

• So clearly indicates that these words cannot mean the same thing ( Or else would have used one word

▪ Purpose of law is to prevent adulterated or mislabeled poultry from entering country

← So the word same fills that purpose and doesn’t leave any gaps

• Legislative history

o Congressional record explicitly struck out “equal to” in amending law and replaced w/ “the same”

▪ Issue as to whether legislative history is appropriate to look to in determining whether statute is ambiguous

← Some justices say yes others no

← So change shows that they wanted “same” to = identical NOT equivalent

← Technical amendment

Probably cannot be resolved at stage one of Chevron

• b/c dictionary gives different meanings of “same”

• legislative history does not clarify meaning intended by Congress

So what arguments under Step Two can NBC make?

• Can attempt to argue that the interpretation is unreasonable

o Look at statutory purposes and use them to back ideas that interpretation is unreasonable b/c it is contrary to purpose of the statute

Chevron case: how to interpret an agency’s power under APA under section. Issue is whether Agency’s interpretation is consistent with statutory language. First step: see if the language of congress is clear. If it is, that is the end of the matter. The agency must give effect to the unambiguously expressed intent of congress. If Congress has not directly addressed the precise question, ct cannot impose its own construction of statute. Step two: In that case, the question for the ct is whether the agency’s answer is based on a permissible interpretation of the statute..

In Chevron , the ct does not decide whether you can use a bubble concept for the clean air act or the requirements apply to each machine, and the ct says that the agency found a reasonable way of interpreting the clean air act. So the bubble concept wins and the industries can use offsets in other machines as long as the total meets the standard.

February 13, 2008:

Then he talked about the poultry case. It basically has to do with the Supreme Court deciding whether to look beyond the basic language of the statute to determine, in the first step of Chevron. In this case it’s not clear then what the statute means, there is ambiguity. So under Chevron, you go to the second part of Chevron and see if the agency’s interpretation filled the gap or solved the ambiguity in a way that is based on a permissible interpretation of the statute. The argument for the poultry industry is that the regulation has interpreted the statute in a way that defeats the safety intent of the statute, therefore it is not a sensible accommodation. There may be an overlap between step two of Chevron and the standard of review of arbitrary and capricious. So when you get to step two you dig into all sorts of comments back and forth to see if this is a reasonable accommodation and therefore a reasonable interpretation. So it’s not a procedural inquiry as to whether the agency thought this through, it’s a substantive enquiry as to whether the agency’s interpretation is a reasonable accommodation of the statute.

NEXT SECTION: Substantive Challenges to rulemaking. Not an issue of how the law is interpreted, it’s whether the rationality exists in the decision of the agency. 706 says that the ct can review and decide on the lawfulness of the regulations. Includes three issues:

• What’s the scope or standard of review

• What’s the content of the rulemaking record the agency has to compile . Review is pointless if ct does not have a good record to review

• Extent of the agency’s obligation to explain itself.

We now discuss each of these.

Scope of review: Substantial evidence test applies to formal rulemaking.

Arbitrary and capricious remains for informal agency action.

Third possibility, a statute that changes the applicable standard of review, so substantial evidence level of review, may be applicable to informal or hybrid rulemaking if the congress placed it in the organic statute.

But what’s the difference between the two standards? Learn the lingo and use it as applicable EVEN if the ct eventually the court does exactly the same thing!

Arbitrary and capricious test, the leading case for both rulemaking and adjudication is Overton park case 1972, the ct for the first time gets aggressive as to what the arbitrary and capricious standard means. Ct needs to engage in a substantial inquiry. Searching and careful, but narrow standard of review., Whether the decision was based on relevant factors and whether there Was there clear error of judgment. Sometimes known as the hard look approach or doctrine.

Not clear whether the hard look is referring to how the ct looks at the agency’s decision, or whether it applies at whether the agency took a hard look at the facts and evidence and relevant factors.! So when you see hard look is it talking about agency’s or ct’s taking a hard look.

The ct had been highly deferential and basically it has been like the economic law review under substantive due process. Overton park changes that. Overton is also the origin of the record keeping procedural requirement. In a later case the ct explains that it is not at odds with Vermont Yankee b/c it imposes a general procedural requirement of sorts by mandating that an agency take whatever steps it needs to provide an explanation that will enable the ct to evaluate the agency’s rationale at the time of the decision. 706 talks about a record the ct may review, so this is not another requirement imposed by the cts, it’s in the APA. Record is All the things the agency considered in making the decision.

Agencies have developed a habit of providing written explanation of how and why they adopted the rule to prove there was a Consideration of relevant factors at the time of the decision.

Arbitrary and capricious test would be failed if the agency:

• Relied on factors congress had not intended it to consider

• Totally failed to consider an important aspect of the problem

• Offered an explanation that runs counter to the evidence before the agency

• Or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise.

Also, the ct cannot provide a rational explanation that the agency itself has not given. BEDROCK PRINCIPLE.

Motor vehicle manufacturer assoc. v State Farm insurance (1983): legacy of overton park. The scope of review under arbitrary and capricious is narrow and ct cannot substitute its judgment for that of the agency. (Chevron) But the agency must examine the relevant data AND articulate a satisfactory explanation for its action including a rational connection between the facts found and the choice made. Arbitrary and capricious would be usually found when an agency relied on factors not intended to be considered by congress , entirely failed to consider an important aspect of the problem, offered an explanation that runs counter to to the evidence before the agency OR is so implausible that it could not be ascribed to a difference in view or the product of the agency’s expertise. The ct here held that the agency had not adequately explained why they were rescinding the rule instead of revising it to require airbags or the kind of seat belt that does not un-attach.

So for formal procedures we get the substantial evidence standard. Informal get the arbitrary and capricious. And the step two of chevron overlaps with arbitrary and capricious it seems.

Problem 2-1: page 166. Warranty disclosure and mechanical defects disclosure rules. The Federal Trade Commission reconsidered the rule and after accepting further comments took out the mechanical defects disclosure. This is informal rulemaking unless the statute mandated it to be formal. The statute in the middle of page 168 seems to say substantial evidence and calls a rulemaking record, which may be indicative of a formal procedure requirement. So if I represent the consumer union:

• Has the agency gotten the facts wrong since the first issue they need to address is what are the relevant facts

• What type of rule is appropriate given those facts.

In this case, they never do explain how they go from saying dealers know about the defects to saying they really don’t know about it. If I were the response it would penalize the dealers trying to be honest, and that the agency did receive more information after the fact and that they took that into consideration. I would also refute the Wisconsin study with the Minnesota study. But in this case, Ken does not think that any of the four factors are strong enough to be considered an arbitrary and capricious rule. The strongest argument for consumers union is the fact that the evidence was strongly in the favor of the dealers knowing the defects when they get the cars.

So use the four factors from Overton Parka and State Farm to discuss any problem about informal rulemaking.

IN page 161: consolidated cases, which is before APA, says that substantial evidence is that if the ct finds the agency’s decision to be reasonable or the record contains such evidence as a reasonable mind might accept as adequate to support that conclusion.

On page 162 there is an explanation of why the two standards have converged: because records are now required after Overton park, which reduces the difference between formal and informal procedures. Secondly, the agency has to explain itself and show a rational connection between the decision and the evidence on record, which is also very similar to the formal requirement.

Also, cts can suggest in dicta a solution, but not in any binding way unless congress’s clear language makes that solution required.

ADJUDICATION: 556, 557 proceedings relating to an order which is anything that is not rulemaking, including licensing. Final dispositions in a matter other than rulemaking and can range from trial type proceedings to decisions as to whether or not you get a federal loan or SS benefits. So it’s residual in the sense that it’s anything not rulemaking.

There are some fundamental challenges in promoting agency efficiency and maintaining individual interests In justice and rights.

Formal or APA adjudication under 557 and 558: cannot based decision on anything not on the record (556 e), .

Informal adjudication or non APA adjudication. There is a record but it contains whatever was before the decision maker that was considered relevant but it does not necessarily involve a hearing and may include other things that were received in comments stage.

Threshold: what is the magic language in the statute setting up the law or agency? Again not “on the record”. If the language or threshold is not met, what’s left”? 557 is left (some miscellaneous stuff) And 555 may apply. Due process might apply. Statutory requirements. Agency regulations as well. This combination can be less than what is required under formal APA adjudication. Some reference to the Wong Yang Sung case which basically says that due process still applies. But since the treshold question has not been solved by the Court yet, we have some appellate cases.

Problem 3-1 page 198.

NEA on obscene art. Statute says NEA shall hold a hearing to determine whether any work is obscene. The argument is that affords the affected party an opportunity to participate in the hearing. And it allows judicial review. Which indicates a record may be required.

Seacoast is the first case: it points that a public hearing is required. Same circuit has since overruled this.

City of West Chicago v Nuclear regulatory commission: ct takes a different approach and says there was no reason to say this was a formal hearing required case.

Chemical Waste Management v EPA. Ct says this is a chevron case. Ken says this is a procedural manner which is not a chevron matter. And therefore counterproductive to the spirit of the APA because the agency can run amock and have no oversight if the ct will defer to it for both substantive as well as procedural stuff.

Section 554 c provides for 1-notice to all parties interested to have an opportunity. Section b says time, place and nature of hearing, legal authority and matters of fact and law asserted.

554 c says that they submit all their stuff including offers of settlement and if they cannot agree, there is a hearing and decision on notice and in accordance to sections 556 and 557.

But when can you become an 2-intervenor in an action or adjudication? When are you a party? That seems to be a chevron issue and the agency decides.

There are 3-settlements possible.

4- ALJ: usually an employee of the agency or a board that was elected to do this. Usually they are fairly independent in that they get their pay level and ratings from the civil service system (Merit system protection board), so they can be neutral and not feel allegiance to an agency. They preside over hearings, settlements, they can take official notice (the equivalent of judicial notice) and they either decide the case or make a recommendation to the agency. They can be disqualified for bias. Similarly, exparte communications are restricted in considerable detail. Outside members or even members of the agency cannot communicate with the judge if they are engaged in either investigatory or prosecutorial capacities. Types of decisions: Most are initial decisions (557(b?) when a judge makes a decision it becomes the decision of the agency UNLESS there is a timely appeal by the agency or it takes the matter for review. On appeal or review the agency has the same powers as it had in making the initial decision (de novo) so it’s not bound by what the ALJ has decided. Also, the agency gets to decide the ALJ role insofar as saying what he does, recommendation or final decisions.

Hypo: OSHA on page 218. 3-2. Autobody Appeals the citation because the citation was under the wrong regulation.

Issues: if there is a wrong regulation being cited in the citation, is the notice proper? According to National Labor Relations Board case on page 220, the proper citation needs to be in complaint because Lane cannot amend the complaint expost facto. But in NLRB they got to the hearing and something else was brought up that had not been in the citation. However in the Lane case, they did know what it was because they got there and discussed the issue and argued about it, even if the citation was wrong.

In the Southwest Sunsites case the ct says that the purpose of the notice requirement in the apa is satisfied if the party proceeded against “understood the issue and was afforded full opportunity to justify its conduct. So if this were applied to Lane, the paintshop could argue that it cited the wrong regulation and then it gave a new meaning to an ambiguous regulation, so it’s kind of a moving target. However, the interpretation that really matters is the interpretation from OSHA because under the split enforcement issue with OSHA says that even though the adjudicatory commission gets to adjudicate, it has to defer to the interpretations of the regulations by OSHA, not by OSHRC. In that case, we go back to Chevron and find that it is reasonable to interpret as that.

In Copanos, the drug company has a notice that FDA is thinking about withdrawing their NDA. They respond by requesting a hearing but the FDA denies the hearing and summarily withdraws their NDA. Copanos says they can’t do that b/c it violates APA since they have the right to a hearing. Ct says no, the agency can set up that there are cases in which they can withdraw it without hearing. Ct says they had notice of violation before and had enough time to comply.

What about the affidavit of the OSHA inspector in the hypo? Is there anything in the APA that says that you cannot rely on hearsay. In 556 it says that it has to be probative and substantial. But should the case be resolved on hearsay alone. In administrative cases evidence is usually admitted in contravention of hearsay as long as there is some reliability. Besides in this case, Lane had a chance to subpoena the inspector and did not. As per Richardson v. perales. Under 555 d it says that agency subpoenas will be issued by agency upon request.

Ex-parte communications: There is always a conflict because the judge is related to the agency. Even though they’re independent, they are part of the agency and have social interactions, budgetary interactions, etc. There’s an incestuous aspect to this. But bottom line is that there is lots of opportunity for communication all over the building. So the rules for exparte tries to set up boundaries as to how it can happen.

APA speaks to it.557(d).

557(d) A-No interested person outside the agency shall make or knowingly cause to be made to an ALJ or a member of the adjudicatory board or involve in the decision, an exparte communication relative to the merits of the proceeding.

557(d)B- the road is two ways, so the ALJ cannot make communications to the outside party.

557(d)C- IF there are, then this section says that they should be:

Placed on the public record of the proceeding. Whether oral or written, and if oral memos need to say what they are.

557(d) D- Upon receipt of communication by party, ALJ or decision body can issue an order to show cause why they should not penalize you by ruling against you. The party is entitled to present a case and rebut this and even to conduct cross examination.

554 d is the bar to internal exparte communications. So no one involved as prosecutor or investigator can engage in exparte either.

Problem 3-3: Spotted owl problem. Bush White House was involved in pressuring for the exemption to be issued to the bureau of land management to sell the land to the logging companies but the Northern spotted owl lived there and would become extinct if this is allowed. Committee granted the exemption to the BLM. There were two steps: BLM petitions for exemption from the Endangered Species Act that forbids the sale of federal land if it supports an endangered species. The secretary of the interior is to review application and decide whether it is complete and meets the statutory requirements. If it does, then secretary holds a formal adjudication and prepares report to the committee. Then the act requires the committee to make a final determination ON THE RECORD (so the triggering words are there for hearing and all the trappings of due process). SO, in this case we have the secretary issuing an adjudicatory decision that is not final but a recommendation (remember there can be two types, final and recommendation) and in this statute it says it is not a final decision, and the governing body makes final decision. There is a challenge by an environmental group saying that some members of the committee were subject to exparte communications. There is evidence that some members of the Bush White house met not only with Lujan who was the secretary of the interior but also with the head of the EPA who is also a member of the adjudicatory committee.

So under 557 d those communications would not be allowed because it would be exparte from an outside interested person. But is yeuter, this particular person making the communications, an interested person under 557 d? Patco case says “interested person is intended to be a wide inclusive term covering any individual or other person with an interest in the agency proceeding that is greater than the general interest in the public as a whole may have. The interest need not be monetary nor the person need be a party, intervenor, etc. and can include parties, competitors, public officials and non profit or public interest organizations and associations with a special interest in the matter regulated.” Under this definition, Mr Yeuter would be an interested person and therefore would not be allowed to engage in this kind of exparte communications and the environmental group is right. So these communications should be put on the record under 557(d)(1)(C). But what about executive privilege? That gets dicey. They could also void the decision under 557(d)(1)(D). What it must do is put them on the record. What it MAY do is void the decision. But to void decision it must show that BLM had anything to do with the Yueter guy asking for them to exonerate them from requirement. If the agency does not do any of these, the ct can void the decision. BUT this is not from the APA, it is silent on the judicial remedy for this type of violation but ct in patco says that they will follow case law regarding exparte communications. There’s a list of factors to be looked at to ask if agency’s decision was tainted so as to make the decision unfair. Page 242: These are from patco.

• whether contacts may have influenced the agency’s ultimate decision; Here make sure you look at threats, coercion, promises, collateral pressure on the decision maker, but it is not part of these factors list. Just something to look at for the final. Corrupt tampering with the adjudicatory system.

• The gravity of the communication: is it at the core of what the committee was deciding.

• whether part making the improper contacts benefited from the agency’s ultimate decision;

• whether contents of communications were unknown to opposing parties who therefore had no opportunity to respond;

• and whether the vacation of the agency’s decision and remand for new proceedings would serve a useful purpose.

In this case all could met but the question is whether they would really change it, would it be a useful purpose. Under Chevron, the ct is not able to do much more than order it remanded.

In the Patco case we have a second time the case is there on the issue of exparte communications to the decision makers who were trying to decide whether to decertify the unions of air traffic controllers.

Now: Communications from within the agency. Page 235. Problem 3-4.

• Steps employed:

o Notice of charges

o Hearing by grievance committee

o Recommendation to commander (that he not be removed b/c army had not proved he did the deed!).

o General removes the guy.

• This is not a case under APA because it is a military thing, it is an employee personnel issue, and there’s nothing saying it has to be made on the record. Under 551 subsection 1 says agency does not mean military in some respects. But there’s inconsistency with some language re military in 554.

• So all provisions regarding hearings etc and exparte communications don’t apply. The problem is that after the recommendation was made to commander there were talks to the general by the legal counsel and that’s when the general decides to remove him. So there is a due process problem.

• In this case as in the Stone case, there is a notion of a property right in employment and mr Stone, as our client does too, has a property right in employment and had to be fired for cause and did not have a chance to a hearing after legal counsel talked to the general. However, it is not clear in our problem whether the communications between counsel and the general included new information so as to be considered exparte. There may be no new facts, just new legal arguments based on the same facts.

DUE PROCESS HEARINGS:

Some of the sources of procedural requirements:

• APA

• Underlying statute

• Constitutional Due processes: both for federal or state under 5th or 14th amendment.

• State constitutional provisions for due process

• Agency’s own internal regulations and procedural rules.

• Judicial review requirements but these largely relate to the creation of a record (Overton park case).

Two basic requirements for procedural due process:

• Deprivation of a liberty or property interest

• In an individualized decision proceeding.

Londoner was the case where some land owners opposed a tax levied to make a road. And Bimetallic was the case where they were complaining about a tax that was levied on everyone. So the ct makes a difference between them because the larger the number of people, the more opportunity to change things through the political process rather than the judicial process. In Londoner is a relatively small number of people affected in individualized way. If it is a policy determination, we may not need a hearing under due process. If it is a fact specific or determination of facts that could be disputed where there would be benefit in cross examination and discovery etc. then the due process hearing is more needed. Fact specific individualized decision. The former is more about legislative facts and the latter is more about fact finding.

WHAT IS A HEARING? WHAT KIND OF PROCESS IS DUE?: in Londoner, Ct says that a hearing does not mean in writing. And you should be able to argue orally and submit evidence.

PROTECTED INTERESTS: Liberty, property. But liberty is more than just physical freedom. And property does not include entitlements (welfare, etc) but the Ct says in GOLDBERG v. KELLY that entitlements are the property interests of the poor and the entitlement of the rich are in the form of property. Before Goldberg you could not have a property interest in an entitlement to a benefit. This was new property. So the ct eliminates the rights/privilege distinction. So if the government deprives you of this property interest then you have a right to a hearing And sets the stage for further attributes of what kind of a hearing.

Liberty cases:

Roth case: leading case of what liberty interest mean. In Roth, the ct says that the right to engage in a chosen profession is a liberty interest that is protected. Furthermore, they state that anything said that will affect his future career, where his reputation is at stake, is something that threatens that interest. IN Paul v Davis, it says that it’s not only necessary that it has the stigma but stigma plus, so that it does have to affect his ability to work. Suicide attempt while in training and they fire him and place in his record that he did that. The lower court says that’s enough. But the supremes sort of bypass that and says that there’s no reason to have a hearing if there is no dispute about the facts!

So applying this to Jeremy: if there is no dispute that he plagiarized, there’s no need for hearing. BUT there is a dispute as to whether that rises to the level of an honor code violation so a hearing would not be pointless. As Stuart says in Codd v. Velger there are more points to a hearing than just figuring out undisputed facts.

Shans v, City of Kennett: the court says that just the dismissal is not enough because there is not enough stigma. However, Ken says that he disagrees because the allegations of misconduct are bad enough. So in our Jeremy case it would probably be the same since he would have trouble getting in law school.

But what about a property interest? Often people will allege both. Roth gives you basic touchstones as to when someone has a property interest. He would have to have a strong claim of entitlement and not just an expectation. But in Jeremy’s case, he could claim an interest in at least finishing the semester since he paid for it. That sounds like a claim of entitlement, not just an expectation. These entitlements are not created by the constitution but by external rules or understandings that stem from an independent source. There is, in Jeremy’s case, an implied contract with the university. In Perry v. Synderman, the ct also seems to find an implied contract. IS the issue one that has a substantial enough interest to warrant a hearing.

Goss v. Lopez: ten day suspension of a high school student. SCOTUS says he has a legitimate claim of entitlement to be there , so a minimal procedure is required. Difference is that High school is mandatory. It defeats his OBLIGATION under state law to do that. Goss suggests that there is an entitlement to continue education.

Osteen case: page 277. State university. What procedures are due if there is a property interest. Ken personally thinks there is a stronger liberty interest than a property interest.

Goldberg v. Kelly: with respect to welfare benefits it’s not enough that you get the hearing afterwards because you need the money coming in order to survive, so the hearing needs to be beforehand. When there are cases, however, involving seizures or emergencies, the ct has said that the hearing can come after, so that the public interest in preventing the dangerous situation overrides the need for a prior hearing. But Golberg spoke about the interest of welfare recipient in procedural protection, the ct says with a lot of detail something very akin to a full fledged trial. But apparently that was very circumscribed to those facts. But Richardson v. Perales says that maybe you don’t have the right to cross examine. Goldber is historic because it characterizes government entitlements as protected interest, rather than just a privilege.

Mathews v. Elridge has become the leading case. After you determine what procedure you need and that you have a protected interest, THEN you determine what specific proceedings you need. Three factors to be weighed:

• The private interest that will be affected by the official action.

• The risk of an erroneous deprivation of such interest through the procedures used and the value, if any, of additional or substitute procedural safeguards;

• government’s interest including the function involved and the fiscal and administrative burdens that the additional or substitute procedural requirement would entail.

IN jeremy’s case, the Matthews test would tend to shift the scales in his favor because his interest is fairly strong, the government’s interest will not be extremely burdened by having the hearing and in fact, the school would probably be more burdened by the student being kicked out. Although the school can say that honesty and high ethical standards are a very strong interest for the school. There’s also some administrative costs involved in the hearing. A strong argument can be made for both. So what about the second factor then. Everything will hinge on that. There was a procedure and he was heard and made a statement to the committee. But was it enough? If fellow students were not allowed to testify as to their understanding of the honor code, then they’re not looking at some possible ambiguity. What about not having a lawyer present? Osteen says that in the academic context you have no right to representation. You don’t want to make it into a mini trial and you want to give professors academic freedom! (there we go again with Hsieh’s favorite pet peeve!). There’s also an increase in cost and so you look at the inefficiency of the process and the burden on the institution even when there is a huge loss to the student. In Osteen, he had a student advocate. Jeremy did not even have that.

There’s also a note at the end of the Horrowits case saying that cts would generally not want to be meddling in academic matters even in state institutions. Their self policing is to be respected. This would go into the matthews v. Elridge factors as well.

Next time: neutral decision maker issue

Neutral decision maker is a requisite of due process. What about the Dean’s involvement with the Jeremy issue: 554 (d) says that presiding employee may not have supervisory authority over the investigatory body within agency and in this case the board decided and supervised the members of the board. Under 554 (d) there are three exemptions from the requirement of a bar of participation in both an investigation and a decision from an agency if:

• Determining applications for initial licenses

• Proceedings involving rates, facilities and practices of public utilities

• To the agency or a member or members of the body comprising the agency (rule of necessity: if the only way the agency can act is to include some board members who are tainted, either for conflict of interest or because they have participated in the investigatory process, etc, then you allow them to do it). THE AGENCY HERE MEANING THE HEAD OF THE AGENCY OR THE THREE MEMBER BOARD OF WHATEVER THAT RULES OVER THE AGENCY, NOT ANYONE BELOW THEM. SO IT WOULD BE SOMEONE LIKE THE SECRETARY OF STATE, OR SOMEONE LIKE THAT.

Withrow v Larkin: is a state case referring to a licensing board where the board both made factual findings and conducted a hearing AND then would conduct a second hearing to take license away. So since this is not within APA it does not matter and even if it was, the exemption above would probably apply. The contention that the combination of investigative and adjudicatory functions necessarily creates an unconstitutional risk of bias has to overcome the presumption of honesty and integrity and most courts have decided that just because judges have ruled one way before does not mean that they are approaching this with a closed mind.

Back to Jeremy, did the dean already make up his mind before the hearing? It would seem so, but where do you go to see if the procedures are constitutionally sound? Mathews Elridge. Remember this. Did he get the procedural protections he should have been afforded. He pointed out that maybe a sanctioning hearing would have been good because he would have been given a chance to address the impact on him of being expelled.

Judicial review of adjudications: There are various ground for review set up on 706: Contrary and capricious, contrary to constitutional right, in excess of statutory jurisdiction, without observacnce of procedure, unsupported by substantial evidence in a case subject to 556 and 557 (formal), and unwarranted by the facts to the extent that the facts are subject to a review de novo.

Universal Camera case: Post APA. Changes the view that the review was very deferential if there was a scintilla of evidence supporting agency’s decision, but now you have to find substantial evidence in reference to evidence against it also. It’s still deferential but not as much. So they have to view the whole record, including evidence against, would a reasonable mind be able to formulate the same conclusion. Analogous to overcoming a motion for directed verdict. Reasonable minds would say this record is sufficient to support the agency’s conclusion.

But what happens when the ALJ comes out one way and the agency later overrules him and reaches a conclusion contrary to the ALJ: should that disagreement have any bearing on what the court will do. Does the reviewing ct. have to follow just one? 557b says the agency can start fresh and ignore what the ALJ has said because they can make the decisions de novo with all the powers it would have had if it had made the decisions originally. So should the court simply ignore the ALJ? No, the whole record on which the reviewing ct has to base its decision includes the ALJ’s decision. Evidence supporting a conclusion may be less substantial when there is a disagreement with a judge who was actually there and saw the witnesses and made determinations of credibility and the agency only gets a cold record.

Problem 3-8: Helen testifies that the president of the company, Darby, was pressuring her to not allow the union in the company or to resist joining a union and that would violate the National Labor Relations Act. ALJ determines that the president was credible and the woman was not so the ALJ rules that there was no violation of the act. The board (NLRB) wants to find differently. What should we show?

Penasquitos case: two employees are fired and allege that they were fired because they wanted to unionize. Company claims they were not working but watching babes in bikinis. The ALJ says there was no violation of the NLRA because the manager was more credible than the other two witnesses. The NLRB reviewed de novo and found a violation. Ct in this case says that there are two kinds of inferences: testimonial inferences and derivative inferences. Testimonial inferences are inferences made from hearing testimony of witnesses, demeanor, etc. Derivative inferences are drawn from the evidence itself. The court suggests that if the derivative inferences are based on testimonial evidence discredited either expressly or by implication by the ALJ. The ct will weigh heavily the ALj’s factual determinations based on testimonial evidence in their review. Derivative evidence in this case is the fact that the guys were fired the day before union elections in which they were to participate. The court holds that the NLRB erred because the record as a whole does not contain substantial evidence of unfair labor practice. The ct says that credibility played a major role and the ALJ testimonial inferences reduced dramatically the substantiality of the board’s derivative evidence. The dissent in the case says that witnesses can be read wrong because they can lie on the stand and effectively. But this view is not one that we can base an effective administrative system. So we will have to rely on a trier of fact to come up with credibility determinations and inferences.

Based on Jackson v. Veterans administration: the board would have to write a decision that downplays the importance of the testimonial inferences and ups the importance of derivative inferences. We can also talk about the ALJ and why he was biased because he wrote an opinion that rests so heavily in a biased testimonial influence.

• So for formal adjudications the standard of judicial review is SUBSTANTIAL EVIDENCE and this applies to fact finding. The other end of spectrum are questions of law. NO delineation in APA as to how to review a question of law. It’s clear that it’s for courts to review. 706 (2)© Courts determine question of law. But what about mixed questions: application of law to facts. That’s a lot of what the agencies are called to do .

NLRB v. Hearst: leading case. Upholds agency determination that newsboys are employees within the meaning of the NLRA . So when it’s a specific determination of law the agency can do it.

But judicial review looks at two factors.

Warrant in record (are there facts to support what the agency concluded) and reasonable basis in law (is this a reasonable interpretation of what the law says).

In O”leary case ct says that cts don’t always separate the facts from the law and it’s really a single entity that has substantial evidence. This approach is similar to Chevron in rulemaking.

Frst facet to determine is whether this is possibly a legal matter only. If so the court decides. If not, it’s a mixed question and the agency is involved.

Problem 3-9: park ranger naked in car with woman who dies of carbon monoxide poisoning. Is there a warrant in the record to find he was not within scope of employment? Under evening star ct says that unless the activity is so unreasonably that it severs the connection with employment, if he was in the right place he was under scope of employment. Here however, it could be construed as unreasonable to be with the woman. But under Durah, it says that he was in the right place and that to find that simple misconduct severs the relationship is not warranted. Employer could argue this was not a usual break. But is there enough to support the agency finding? Maybe. But is this a reasonable interpretation of what the law says? Nope. The law says that it needs to be construed broadly. If the facts are sufficiently ambiguous, there probably is enough to support, but when we come to the law interpretation, that’s where it probably fails. Ct would probably remand it to agency to explain why the agency ruled that way in view of the statute.

INFORMAL ADJUDICATION and the arbitrary and capricious review: we know that arbitrary and capricious test applies under state farm to informal rulemaking. It also applies to informal adjudication.

Citizens to preserve Overton Park v Volpe. Seminal case in this. So Justice Marshall talks about 706(2) and says that in all cases abcd are available and applicable. 706 e is more limited b/c it’s for formal adjudication and rulemaking. Prior to this case 706 f says that ct can review de novo, but after overton, it seems clear that this section is hardly ever used and the fact that there was not a hearing is not considered enough to bring you to review de novo.

Ct outlines the steps to use for this review of informal adjudication. Why is this adjudication? B/c it’s not rulemaking. So when there is a decision of what to do it is adjudication if it is individualized and not something that applies to everyone (which would be rulemaking). Steps of judicial review:

Three steps:

• Whether secretary acted within scope of his authority and discretion. Within range of what statute sets out for him to do.

• Whether the actual choice made was arbitrary, capricious an abuse of discretion or otherwise not in accordance with law. Was it a rational decision to make?

• Whether secretary follow the necessary procedural requirements.

The ct eventually makes the decision based on the third prong. The secretary failed to make formal findings that state his reason for allowing the highway to be built. All the ct has is after the fact affidavits stating the post hoc rationalization. Ct says that they need a record to review (under 706 at the bottom, because they do not have the full record and cannot know how the secretary made his decision, the ct finds that it has to be remanded and the agency has to explain how they got to their decision. So this case establishes that a full record is required to see what was in front of decision maker at time of decision and why the decision maker made that decision (two things). It is discouraged to bring agency heads to ct to explain how they reached decision unless it is the only way to find out b/c it is disruptive to do that. It’s also unrealistic b/c decisions are not individual decisions, they are institutional decisions and secretary just signs them. Adequate reasons being provided, and there must be some rationality to decision. Inconsistency is looked at suspiciously. Equal justice under law, like cases being treated alike, stare decisis. Nothing requires agencies to be consistent but reviewing cts will look unfavorably at inconsistencies.

Two immigration cases:

Yepez prado and Davila bardales. And problem 3-10: airforce pilot who claims he’s gay but wants a waiver to the discharge which is ok to grant.

• The agency board did not explain why they found that there was no unusual circumstances in this case where there is an outstanding record. So there is a procedural gap. That would be under Yepez Prado. We don’t know what “Unusual circumstances” means. Also, if they had explained it, you also need to understand how the factors were waived, not just what factors were considered. IN Yepez, ct says that there are a bunch of mitigating circumstances and one bad fact, and the BIA did not explain how they weighed the evidence. So arbitrary and capricious standard is there to say this does not add up.

• Under Bardales, this decision is inconsistent with other agency decisions because the waiver has been granted before to other pilots who have required them.

Came in late on 3-19? They were talking about corporations not having 5th amendment rights against self incrimination but individuals do so sometimes they give personal immunity to the individual so they can use their testimony to convict corporation.

CHOICE OF PROCEDURES AND NON-LEGISLATIVE RULES: types of procedures in comparison to one another recognizing that often agency has a choice if statute is silent, ambiguous or even states that the agency has a choice.

We studied that non formal rulemaking is not required as per 553 in interpretive rules, general statements of policy or procedural rules. So they are not subject to notice and comment requirements and by definition are not binding. So how much force and weight if any do those kinds of pronouncements have on both agency itself and on courts?

There is a distinction between binding rules (adopted through notice and comment now called legislative rules), interpretive rules or general statements of policy do not have binding powers on others.

So choices are:

Rulemaking (Legislative rules)

Rulemaking (non-legislative rules): interpretive and general statements of policy OR

Adjudication (this is done on case by case basis, of course).

Often agency can accomplish a lot through non-binding rules or pronouncements b/c most people will comply with agency they need to work with.

We will study:

Advantages and disadvantages of agency’s choice.

Legal limits on agency’s choice between the options.

Issues and problems that arise under each option.

Problems in the chapter: FTC has choice of making laws through adjudication and through rule making.

Problem 4-1 adjudication: by FTC. When car is reposed, dealer pays bank, re-sells car and if there’s anything left it goes refunded to original owner. Dealers were calculating resale value at wholesale not retail so people were receiving less money in refunds than they should. No one would litigate because of cost-benefit of litigation. Should the FTC apply rulemaking or adjudication to decide the value that should be used?

CFR: Code of federal regulations.

Advantages of rulemaking:

it would be a bright line rule: it would set the value to use as the retail value not wholesale, it could spell out sanctions (he’s iffy about this because the statute may already have that and agency may not have the authority to say this), specify how to calculate retail value,

It would be prospective

All dealers would learn about it

All dealers would be bound if we go through notice and comment.

Cost and efficiency of this versus cost and inefficiency of adjudicating every case.

More buy in and transparency and inclusiveness than in adjudication.

Education of the agency in the respect that they may be unaware of industry practices that preclude a certain result. Since more people can comment, there’s more opportunity for that.

Advantages of adjudication:

Evolution of policy: not every case is the same so the rule may not be applicable to every case in the same way.

More applicable to fact specific issues. The NLRB has been a great fan of adjudication instead of rulemaking because the statute is very fact dependent, so rulemaking would not be as efficient.

Also, it would shield them from being lobbied by management and labor groups because adjudication prohibits ex-parte communications! Exclusivity of on the record only. But 555b says that an interested person may appear before an agency so the adjudication can include interested non-parties, like amicus briefs.

Cost: it’s cheaper to adjudicate one than to rule-make, but if there are successive litigations it may be more expensive, unless they set precedent. You can chose the worst violator out there to make your point. But not a good idea because someone will come to rescue him and then you’re losing. Better to mount case well against a worthy opponent.

There’s more restrictions on rulemaking (hybrid ad-ons) office of budget (OMB), executive orders, etc, so adjudication might be cheaper and more efficient.

Case on page 321, Chennery v. SEC. The choice of what procedure to use, adjudication or regulation, rests with the agency as long as they have that power and leeway by statute. But you cannot use adjudication if it will be retroactive in nature. Retroactivity is not a bad idea but it is subject to close analysis. Based on Chennery, there’s a deferential approach to agency’s in their decision to use rulemaking or adjudication. As to the retroactivity of effect, the concern is that other companies who have treated employers the same way or done the same acts, might be charged. But if the statute was there before and there is not an issue of reliance on a board pronouncement previously noted, then there is no issue with making retroactive because the rule has not changed. But is it a surprise? Does it impose a new liability with respect to actions that were undertaken before this new rule was enunciated. Balance whether to apply the new rule retroactively goes against the main purpose of the statute or the spirit of the statute. If the remedy is a cease and desist order, there is not much of an effect.

He reiterated the importance of the Chennery guideline that the agency has the discretion of deciding which route to take.

Retroactivity seems to be ok for adjudication if case of first impression because necessarily it will be retroactive to parties of litigation, but for rulemaking it seems to be not as well accepted because there is no notice, However, in the case of cease and desist notice from adjudication, that is considered notice. Also, there is some precedential value in decisions from adjudications. Retroactivity seems to be ok when congress has granted such authority to the agency.

In most cases dealing with the NLRA the NLRB has decided policy and rules on adjudicative basis. But that’s mostly because making rules that would apply to everyone would be hard in cases that are so fact sensitive.

Applying to Country Bob, we see that this may not be as fact sensitive. CB may say it’s a surprise, but not really because UCC already has the rule there and it’s just a question of what method to use to calculate refund.

Regarding penalties: It could be that there is adjudication going on at the same time as rulemaking. In which case, what would the ct do? Also, there could be rulemaking going on and adjudication comes up either because right hand does not know what left hand is doing, or because there is a particularly egregious case the agency decides to pursue.

But the double dipping by the agency may undercut the rulemaking because if the ct decides that one is better than the other, why are they doing the other?

How might the ct be influenced if agency is required to engage in hybrid rulemaking? It might help CB because it points to rulemaking being needed. Although agency can say that it is not mandated to use rulemaking, and that it only means that WHEN they engage in rulemaking they must use some additional statutorily imposed requirements.

What can the agency impose retroactively as far as penalties? Depending on the penalty. If there are no penalties, it may look like agency is using adjudication to make a rule, that is prospective policy which is defined as rulemaking, not adjudication. IN Gordon Wyman case the ct talks about how a penalty has to be imposed (I think?) because otherwise it is considered rulemaking. IN the case of FTC v Country Bob, the best option would be to issue an injunction or a cease and desist order and that has immediate effect so it can be enforced and it does not look like rulemaking. Agency does not have to order refunds, but can simply issue a cease and desist order.

What if refund are ordered? Then the argument has to be that it’s not fair as a matter of retroactive application because under page 328, Retail, wholesale and dept. store union v NLRB there was a case decided in the interim and the board wants to apply retroactively. Ct says you look at factors to decide if ok to apply retroactively.

• Whether case is of first impression: in that case the interim case was already decided.

• Whether it represents an abrupt departure from well established practice or is it merely filling in the gaps of an unsettled area of law.

• The extent to which the party against whom the new rule is applied relied on the former rule. (estoppel)

• The degree of the burden which a retroactive order imposes on a party

• The statutory interest in applying a new rule despite the reliance of a party on the old standard.

Retroactivity is not bad when issue of first impression because both parties would expect to lose and it is likely that the remedy would apply and the benefits also to the parties who brought the case in the first place, otherwise why would they bring it up in the first case. Second case, however, is not the same case.

So this is an important area of agency constraints.

RULEMAKING ISSUES:

1- Does the agency have the authority? Only if the legislature has given it to it. If the statute is unclear, cts will likely decide that the agency can proceed through promulgation of legislative rules.

2- can a rule explicitly address and resolve an issue that otherwise would have been a fair case for adjudication: Broadcast case where the agency does not even allow an adjudication to be asked for because the guy already has the maximum number of stations, therefore the adjudication was moot. But the only reason why there was a maximum number was because of rulemaking, and the ct says it’s ok and that’s why that question was not open for adjudication, acc. to Supreme court. NO hearing needed b/c no material facts o be decided. Even if broadcaster did not have an opportunity to challenge the particular decision to have a maximum number anyway. But Did they not already have that opportunity in the rulemaking process? They did and the law needs to be settled at some point.

Retroactive effect of rulemaking. Usually not a problem because rules are to be prospective. Bowen case in page 336. What happens when the process slows it down and agency sets it to be retroactive. Many rules are proposed to be retroactive to the time when the rulemaking began and it is allowed. IN the Bowen case the court said that unless congress granted specific power to agency, the agency will not be able to do so. So in the absence of an express grant of authority by congress to agency they cannot. This is from Bowen case. But how express does it have to be?

Ambiguity of rules: GE case v EPA: A due process issue may arise when an agency’s regulation in ambiguous. Regulation of PCBs and how to dispose of them. GE inserted another step that was a recycling step before disposing by incineration of the PCBs. EPA says it goes against the regulation b/c reg says you must incinerate. Ct says that’s ok because EPA’s interpretation is logically consistent with the regulation. GE says that under 706 (2)(A) this is arbitrary and capricious and cannot stand. Ct says it’s ok. Maybe not the greatest interpretation of the agency’s own regulation, but admissible b/c it’s not plainly wrong. The ct accords a lot of deference to the agency’s own interpretation. The ct says, however, that the regulation is not ascertainably certain and it does not allow people of good faith to imply it. Ct says that there is a constitutional violation and under 706(2)(c) they cannot go against constitution and there is a fine which amounts to property deprivation and they did not have fair notice of what it meant. “Where the regulation is not sufficiently clear to warn a party of what’s expected of it an agency may not deprive a party of property by imposing civil or criminal liability.” The editors make a difference between this and fair warning of agency’s charges against a regulated agency in an adjudication proceeding. So, if you have to guess what a regulation means, it’s not fair to ask you to comply. So why is there not a violation in Bell and the chennery cases? Because there was no money involved and therefore no property deprivation involved.

Problem 4-4: OSHA mine equipment order that fines them 25,000. There is a constitutional problem b/c there is a fine. If it only said cease and desist, a constitutional issue would not exist. Ct would probably have deference to OSHA and there is no surprise of guesswork.

NON LEGISLATIVE RULES:

those are of two types: policy statements and interpretive rules. 553 B says these are not subject to notice and comment and they are not legally binding, but most regulated entities would follow them and so they are very, very used. Interpretive rules are statements issued by agency to advise public of the agency’s construction of the statute and rules which it administers. So there has to be already an existing rule that is being interpreted. Policy statements are issued by agency to advise public prospectively of the manner in which the agency proposes to exercise a discretionary power. Tentative statement of what the agency will or may do either in rulemaking or adjudication. Even though they’re not subject to APA notice and comment, they are subject to publication requirements and if not followed it limits their use.

If EPA had one like this, it would no longer present a case where GE was surprised by the agency’s interpretation.

Advantages: more efficiency b/c not subject to notice and comment. And it undercuts the surprise element. However, it also undercuts the education of the agency. But predictability for regulated entities is a good thing.

Also, entities will mostly follow the non-legislative rule even though not legally binding b/c they want to curry the agency’s favor or they want to do the right thing and want to avoid the expense and trouble of being involved in litigation.

It can also be used as management tool b/c the employees would know what the agency wants to do and would apply it in rulemaking and adjudication therefore creating uniformity as to how to apply it.

Disadvantages: No public input so no agency education and the public does not feel heard and there is less buy-in.

Agency may act on purpose or not as if the non-legislative rules are binding and that undercuts the purpose of the APA.

Challenge: if someone wants to challenge it, it’s harder to do because it’s not in effect yet! There’s no final decision or action by agency so you cannot get judicial review.

Also, people can rely on agency’s statement but since it’s not binding they can change its mind.

Problem 4-5: Walk around pay issue by OSHA. How should it present its position that walk around time should be paid by companies to employee rep who’s walking around with them? Adjudication is better to plug in gaps when agency does not yet have all the data to write a rule, OR when the circumstances vary so much that a generally applicable rule does not make sense b/c the cases are very fact specific. IN this case, rulemaking would be better b/c it’s simple and clear-cut that it needs to be paid. But, which kind of a rule: non-legislative or APA based rulemaking? In 553d2 there are publication requirements. A publication of a interpretive rule or statement of policy does not needs to be published for 30 days before they take effect (as substantive rules do ). And in 552(A)(1)(d) it says, however, that they need to publish it in the Federal Registry. In this case, it is a fairly clear issue and therefore it is likely that publishing an interpretive rule would accomplish the task and there would be compliance. And since it is published in the Fed reg. we eliminate the surprise objection. However, maybe there is something to learn about why employees should not be compensated and then notice and comment would be preferable. It could be that these employees are already being compensated by their union for doing this.

Distinguishing legislative and non-legislative rules: same kind of problem as distinguishing between procedural and substantive rules. If you have a policy statement you have something prospective. But what if it appears as if it is imposing a legal obligation on someone now? If notice and comment procedures have not been satisfied there is a procedural error and therefore not binding. Problem 4-6: Osha adopted a policy statement and embodied it in the employee manual instructing OSHA inspectors to cite employers who don’t pay for walk around. Companies are challenging this because there is a new legal obligation being created here so it looks as though they tried to bypass notice and comment. They try to bring a declaratory judgment that rule is invalid. Argument for OSHA: it’s just a policy statement. And it odes not become binding until the split enforcement unit of OSHA that does adjudication decides to adopt policy as enforceable. BUT the argument fails because the ct decided in page 214 that it would defer to OSHA agency and not to the enforcement branch’s interpretation of the rule. For the other side, it does create another duty because nowhere in the statute does it say that they need to pay them. The manual was changed to say that employers will be charged, not that they might be charged. And according to American Bus assoc. case, it needs to leave the agency with some discretion to decide per case, and in this case it does not leave any leeway to charge or not to charge.

policy statement actas only prospectively, does not impose any new legal obligations. But what if it appears that it does have some duty that it imposses but notice and comment has not been followed then it will be invalidated and not be legally valid. But if it’s improperly adopted the agency has to go back to square one and will not be on the books. However if it’s not invalidated because it is held as being merely a policy statement, then it is entitled to judicial deference in judicial review and it’s doing what it needs to do. So from agency’s point of view is better to have a well done policy statement that will not be invalidated.

From the book and class: Agency’s power to issue rules is limited to the authority delegated by congress. Agencies do not have the authority to give rules retroactive effect without an express grant from congress. Retroactivity not favored by law. Adjudication retroactivity is better than rulemaking retroactivity.

Nonlegislative rules: when agencies do not use notice an comment for nonlegislative rules, cts give them the same standard of deference.

Criteria set out in American Bus Association v. US cited in Bowen to discern whether something is a legislative or nonlegislative rule:

• Unless a statement acts prospectively, it is binding and therefore a rule. General statements of policy do not impose any rights or obligations, they do not have a present effect.

• Secondly, whether the purported policy statement genuinely leaves the agency and its decision maker free to exercise discretion ( so more of a guideline than a firm rule to be applied on a case by case basis)

IN Bowen the Court decided that the requests for proposals were merely descriptions of what HHS wanted to see in the proposals from the peer review organizations and not set in stone. So they were general statements of policy. They must be tentative intentions for the future without binding the agency. They were not binding and therefore were exempt fro notice and comment of 553. In fact some contracts were known to differ from the RFP guidelines so they were not binding b/c agency retained discretion to approve or not.

A rule is legislative even if it’s just binding on the agency. Example of FDA saying it would not prosecute levels below certain things. So that level was legislative because it bound the agency and thus is legislative and should have been adopted after notice and comment.

Interpretive rules are not binding until one of two things happens:

• Interpretation is adopted in adjudication

• Interpretation is adopted via rulemaking after notice and comment.

Whether an agency thinks a statement is only interpretive or a rule is given some weight but it’s not determinative of what the ct ultimately finds it to be.

In American Mining Congress v Mine safety and health administration, the court sets out a test with four factors to determine whether a statement is legislative or not:

• Whether in absence of the rule there would not be an adequate legislative basis for enforcement action or other agency action to confer benefits or ensure the performance of duties.

• Whether the agency has published the rule in the code of federal regulations (CFR).

• Whether the agency has explicitly invoked its general legislative authority OR

• Whether the rule effectively amends a prior legislative rule (in which case, any amendment must also be done by notice and comment).

An amendment is not simply providing more details about what a rule means. And in this case, ct finds that the agency was not acting legislatively when it accepted that an x ray could be deemed a diagnosis for purposes of the act.

In Metropolitan regarding the question from a school district as to whether they can must continue to provide educational services to a disabled child if the child was suspended for reasons other than his disabilities. Agency says yes, that’s how they interpret the statute. District challenged on basis of it being a legislative rule and ct says no, it merely interprets the statute and is not subject to 553 n&C. It only reminds affected parties of existing duties under statute, it does not create any new duties, law, rights, etc. No change in policy takes place.

Interpretive rules can be given weight if they clearly interpret the statute underlying them. Court will look at the source of where the new rule comes from and if it is based on a statute then it is

Problem4-7: The animal dealer with the 6 foot fences when a memorandum comes out saying the fences need to be 8 feet tall. According to the mine case the first requirement is that “Whether in absence of the rule there would not be an adequate legislative basis for enforcement action or other agency action to confer benefits or ensure the performance of duties” This case it creates a new duty to have a fence of 8 feet rather than 6 feet.

ESTOPPEL and reliance: nobody likes to be told something and then be told something else. Is there any judicial protection available for someone who relies.

Problem 4-8: Jones was told by USDA inspector to make the fence 6 feet high. There is an argument for reliance. Although not as big as Alaska for 30 years. It was not in writing. It was just an inspector, not the agency, unlike Alaska, she has not forgone an opportunity to participate in the rulemaking.

Alaska Professional Hunters association v FAA:

Pilots are told more than 30 years ago by Alaska branch of FAA that they are not regulated the same as commercial pilots because they don’ offer their services for a fee, their flying service is part of a tour package to go fishing and hunting and not mostly to transport people. FAA orders a study and gets concerned about safety there and pilots request a rulemaking. Before rulemaking takes place FFA published a notice to Operators in the Federal register. And it says in the future it will treat these guides as commercial operators. Association claims that goes against previous interpretation and they had relied for 30 years on it. Ct agrees and says that any amendment should be done through notice and comment, and that they had not been allowed to participate in all the N+C that affected the rulemaking for commercial pilots in 30 years because it did not affect them but could have changed the outcome had they known. And the advise they were given was in place for over 30 years and they built whole industries around it therefore it could not be changed just like that w/o notice and comment. Also this came from a case that was adjudicated “Marshall” saying pilots like them would not be regulated. If you have an interpretation of a regulation that has been relied on, you have to go through 553 notice an comment procedure to amend your previous interpretation. So the ct really makes it into an APA case rather than an estoppel case.

This case sort of goes against Vermont yankee because it creates more procedures than required in Vermont yankee.

Association of American Railroads v Dept of transportation: a different case arises here because the negotiated rulemaking produced the rule of using flags to announce to the train they needed to slow down. The dept says they must tell the exact location of the men at work and the RR says no, that’s a new requirement and it was not negotiated that way and they only wanted to use flags alone and not people to warn trains of exact locations, etc. They try to use estoppel because for two years they did it that way, agency had not required that and thus it is a departure and as such subject to 553 n+c. Ct says not so. The two emails were not definite interpretations from the agency and agencies should be allowed some time to digest and discuss interpretation of rules before making their statements binding on them and the only thing that made it official was the bulletin detailing the procedure. Ct distinguishes Alaska b/c in this case there was no reliance, no detriment suffered, no capital expenses made based on the emails, nothing was done differently than it would have been done.

Until Alaska, it was assumed that an agency did not have to go through notice and comment to amend an existing interpretive rule. APA does not require it, but ct says it must. How does that square with Vermont yankee where ct says cts cannot impose additional requirements not required by APA? I suppose that once an agency has “adopted” a non legislative rule either via adjudication or by rulemaking, it becomes the same as a legislative rule and therefore the n+C requirements apply. IN Alaska there was reliance for 30 years so it could be seen as acquiescence and adjudication????

Relying on advise from an agency:

In Heckler v Community Health Services: the medicare provider relies on the information provided by the “fiscal intermediary” travelers insurance company on whether some services provided were reimbursable. Travelers says yes, they claim it and then medicare says no, give us back our money it was not reimbursable. Provider sues and says they relied on advise of government’s agent (travelers) Ct says no, they should have known better than to rely, they should have known themselves b/c the law is there for everyone, and they did not rely because they did nothing different and in reality they just had an interest free credit from the government for all those years and cannot claim estoppel. Ct also refuses to say that government is absolutely immune from lawsuits of this kind, but in this case they don’t need to decide it b/c plaintiff cannot prove they detrimentally relied. Those who deal with the government are expected to know the law. Also, advise was not written!!! (?)

In Office of personnel management v Richmond the issue is again a person who gets advise from an unemployment advisor working for the government and he loses 6 months of benefits so he sues to get those back and ct says no because in this case estoppel of the government would require a violation of a statute since they would have to give benefits to someone who does not qualify for them. Again ct refuses to give a blanket ruling against suing the government on estoppel doctrine. Here the government says that there’s a separation of powers issue and having the executive agency’s comment that goes against statute given force of law would go against the legislative power. One of the core argument that the government should be able to be sued for estoppel would tie the hands of givernment. There are too many decisions and too many steps to go through before finality is reached.

Appeal of Eno. Woman loses welfare because acc to agency she is not doing the rights kinds of things to get employment but every time they saw her weekly they just asked her if she was seeking employment, she said yes, they let her go. Then they take her entitlement away without due process and that is unfair. She reasonably relied on the fact that she was doing it right and no one told her otherwise, no chance to cure so to speak. Denial of due process for withdrawing benefit was the basis for reversal on this one. She relied to her detriment and lost her entitlement to something she had a right to and it was based on differing interpretations of a pamphlet, and it would not be a statutory violation to reinstate her.

Also, it is well established that one cannot be held criminally liable for acting in reasonable reliance upon the advice of a government agent.

Happy Puppy case: regulation says the puppies cannot be shipped if they are subjected to excessive heat or cold. They relied on inspector’s advise that they could ship the puppies and get slapped with a fine. ALj says there was as procedure t get a ruling. Happy puppies has attempted to get it but it would take too long. But ALJ says that they knew that any advise would be second best. Here, unlike in Heckler, there is real property loss, bc in Heckler the money was not theirs in the first place here the 2000 fine was a loss for the company. Also here they rely on agent from agency and not on third party like Heckler relied on travelers’ insurance. But ct says usually that when dealing with the government you must turn square corners, so it’s pretty much caveat emptor, because your lack of knowledge of the law will not exempt you from obeying it. With regards to eno, we have an ambiguous law and the clarification was the advise of the agent. But again, unlike ENo who was told time after time she was good to go, here HP only heard once, knew the regulation was ambiguous, and HP is not losing something as big as a lifeline which unemployment is.

Judicial deference to non legislative rules:

This bears on the agency’s choice of what kind of procedure to use to articulate a regulation or position.

Generally agencies get more deference from cts. in questions of fact finding or application of law to facts and cts keep to themselves the ability to interpret statutes.

We are looking for a formula that will give the cts guidance as to what to do in dealing with agencies. And whether the power to do certain things belong to agencies or cts. No clear definition of where the power lies.

Ordering chaos:

Four different types of agency actions:

• Informal rulemaking: Standards for judicial review of interpretation of law, findings of fact, mixed questions of law and facts or application of law to facts.

So what are the different standards of review

| |law |Determining which facts are relevant. |Application (mixed questions of law |

| | |Did they discount relevant facts |and facts. Now that you correctly |

| | | |determined which facts are relevant, |

| | | |did you apply the law to those facts |

| | | |correctly. |

|Informal rulemaking rulemaking |chevron |706(2)A Arbitrary and Capricious |706(2)(A) State farm |

| | |standard. State farm case | |

|Formal adjudication or rulemaking |Hearst v NLRB case |Substantial evidence 706(2)(E) |Hearst v NLRB. Whether there is |

| |And the procedure to analyze it is |Universal camera and consolidated |factual warrant in records and |

| |Chevron: has congress spoken, if not, |Edison cases. |reasonable basis in law (this last one|

| |agency has power to interpret. | |is chevron again). |

|Informal adjudication |?. |Overton park. 706(2)(A) This case |Overton park 706(2)(A) |

| |Chevron??? |precedes state farm and explains | |

| |They did this in the elian Garcia |arbitrary and capricious standard with| |

| |case. |respect to informal rulemaking that | |

| | |was later applied in State Farm | |

|Interpretive rules (re statute) |Skidmore case: very weak deference and|NA because it’s an interpretation of |NA bc it’s only interpretation of law.|

| |depends on how thorough, validity of |law | |

| |reasoning, consistency w/ other | | |

| |decisions. Only persuasive. Guidance. | | |

| |Not authoritative like chevron. Mead | | |

| |is leading case. | | |

|Interpretive Rules regarding an |Seminole rock case: there is even |NA. Only law interpretation |NA only law interpretation |

|agency’s own regulations |stronger deference to agency’s | | |

| |interpretation of its own regulations | | |

| |b/c they know what they meant. However| | |

| |agency cannot simply parrot or | | |

| |paraphrase the statute and call it its| | |

| |own. That’s bootstrapping! | | |

Skidmore Case: weak deference. Guidance only and depending on whether there was a thoroughness evident in consideration of agency’s rule, validity of its reasoning, and the consistency with earlier or later pronouncements. Under chevron, the ct will only look at whether congress has spoken and if not whether the law is ambiguous and if so, whether the agency ‘s interpretation is reasonable. IN Skidmore, the ct can inject their own appraisal of what the statute means.

Christensen: Opinion letter from labor dept. saying employers can chose to mandate time off instead of paying for overtime. Ct says the letter did not go through notice and comment, so no rule, so only skidmore deference. And they find that letter is not persuasive so they don’t follow it.

Scalia says all of this should be given deference as in chevron in his dissent. Souter says in Mead that no, the cts should tailor its response depending on the case b/c every agency works differently and every statute works differently so one size fits all approach does not work.

Mead case: Force of law notion: only when congress appears to have delegated authority to the agency to make rules carrying force of law (even implicitly if circumstances show agency was exercising law making authority).

Barnhart: changes everything because it says that SOMETIMES an agency’s interpretation will have the force of law depending on whether congress meant for cts to defer to an interpretive rule or policy statement in light of the interpretive method used and the nature of the question at issue. So it needs to be case by case to see if Chevron applies to agency’s interpretive rules of a statute.

Seminole rock: Agency’s interpretation of own regulations. There is even stronger deference to agency’s interpretation of its own regulations b/c they know what they meant. However agency cannot simply parrot or paraphrase the statute and call it its own. That’s bootstrapping.

From book:

Reviewability:

1-First question is whether court has jurisdiction. Three elements of that:

• Standing

• grant of jurisdiction to court

Within Standing:

• Prudential strands and

• Constitutional strands: case and controversy

Within grant of jx:

• Statutory grant

• Grant under 1331 “arising under”

• Did P state a cause of action:

o statute that grants P an enforceable right? always go to 702 as default. To establish cause of action, five requirements:

▪ Agency must have performed agency action as defined by 551(13)

▪ Appeal must not be of a kind excluded from judicial review

▪ Cause of action is limited to persons suffering a legal wrong: gov’t action interferes w/ person’s constitutional, staututory, or common law rights, OR you are adversely affected or aggrieved by action or are you in the zone of interest of the statute?

▪ Finality doctrine: 704 says only agency action specifically reviewable by statute or final agency action for which there is no adequate remedy in court is reviewable under APA. Ask, how is this supposed to be? If there is no remedy in court, how can they review it? That goes against redressability.

▪ Exhaustion of remedies doctrine: 704 says that agency action is final even if person has not applied for internal agency review UNLESS statute or agency rules requires it.

▪ And then there’s the sixth element from common law of ripeness. You cannot challenge pre-emptorily before enforcement against you unless statute specifically asks you to.

Venue is usually found in DC because all agencies reside there, but statutes also tell you where to find it.

Also, sometimes a ct will stay a case to wait for ‘primary jurisdiction” from the agency.(This is Ken’s favorite doctrine bc no one else knows about it). This is done when the litigation is between two individuals, as opposed to an agency and an individual. In this case, the determination of who wins may hinge on an agency’s determination of what the law is in the field contested. Or this is a citizen’s suit while there is a simultaneous agency proceeding regarding this issue. So the argument is that agency has the primary jurisdiction over this b/c the agency has the expertise to deal with this. So ct will defer to agency and will suspend the proceedings until there is a resolution of case in the administrative forum.

STANDING: Lujan case is the leading case on this still. Constitutional strand: requires a sufficient connection between the P and the lawsuit, otherwise is not considered a case and controversy. Test of standing:

• Injury: Has the P suffered an injury or is about to suffer one that is (particularized and concrete)

• Causation: Caused by or about to be caused by D

• Redressability: That is redressable by the ct, meaning a favorable court decision would remedy the harm.

With respect to the injury: it must be injury in fact, not purely, ideological and theoretical in nature. Not taxpayers suit because government spending does not individually affect your own tax bill (Richardson). But, public interest groups and organizations, under the doctrine of associational representation, have standing if they can prove three things:

• One of its members would have standing to bring lawsuit

• The lawsuit relates to the purposes of the organization

• The lawsuit does not require participation of the individual members (so action is not for damages but for declaratory relief or injunction).

So that makes it harder to do b/c these groups have to find a member that would actually suffer and injury.

With respect to causation and redresability, you have to prove the injury was caused by the action although sometimes that standard has been relaxed to the point of absurdity where the RR’s fees being hiked would lead industry to recycle less because they would have to pay more for transport and there would be more trash in the woods where the law students hiked!!!

Prudential Strand: Assumption that since these are not constitutionally required, they can be overridden.

• No third party standing. Except that if it affects your rights indirectly you can: bartender suing b/c new reg prohibiting sales to over 21 affect his profits, employer suing b/c law prohibits him from hiring females for certain tasks and that affects his right to contract, etc.

• No assertion of generalized or abstract grievances (these are best left to political branches of government).

• Person must be within the zone of interest of the statute (what the law is supposed to be protecting, the class of people the law is supposed to be protecting)(Mostly administrative rules and seldom applied according to epperson)

Standing in the states: each state has developed its own rules and federal rules don’t necessarily apply.

Case of Lujan v Defenders of Wildlife: ct under Scalia says they don’t have standing because they cannot show injury in fact, it’s not clear that agency caused the harm or injury and that even if ct found in their favor, the international agencies would not continue to harm the environment and habitat of the endangered species. So no harm, no causality, no redressability. Scalia also mentions a separation of powers issue because the court would be vindicating a public concern, instead of a private right (which is the role of the court under Marbury v Madison) and to grant courts that duty is to transfer it to them from the executive branch’s take care clause duties and congress cannot do that by statute. So congress cannot create cause of action for public rights.

Some commentators point to the fact that these kinds of private attorney generals lawsuits are needed because otherwise things would go unchecked since the regulated will not bring suit.

Friends of the Earth v Laidlaw found standing for environmental plaintiffs for something called “reasonable fear” of swimming downstream from a dump of chemicals. So apparently the burden has been shifted from the P to show that there is actual harm to the D to show absence of injury and therefore no reasonable fear.

In Federal Election Commission v. Akins: ct sides with P that he has standing bc his injury is particularized since it affects his right to vote. He wanted some Israeli organization labeled as a PAC and agency does not so the records of the AIPAC are not revealed. Ct says p is within zone of interest and congress wanted to protect that kind of voting right so they satisfy prudential standing. They also find actual injury caused by agency decision and it is redressable. Scalia dissents and blasts them b/c in Richardson they said taxpayers suits were not ok and Richardson had also asserted that not knowing the CIA’s expenditures prevented him from voting intelligently. Majority say that general injury is not enough to prevent standing because mass torts are allowed and they affect a bunch of people the same. Scalia says every arm is different and therefore the issue is whether it is undifferentiated and that Richardson’s injury as Akins injury is not different from the injury that every other taxpayer suffers.

More recently in Massachussets v EPA ct says that a state has standing to sue bc states are different from people and they have an interest in their land and the air and the sky, etc. So, since global warming is causing land to dissapear under water, Mass can show actual injury caused by EPA’s lack of action to regulate emissions from cars. And it is redressable. EPA claims that even if they did, Mass would sink anyway b/c china and Europe are polluting. Ct says that even so, nothing prevents them from regulating to delay that sinking and that every little bit helps. Also, the standard for redressability goes down severely. Whereas Scalia stated in Defenders that the remedy had to be shown to be likely, not just speculative, to fix the issue, Stevens (who concurred in the judgment in Lujan v Defenders but not in the lack of standing holding) says that all we need to show is that there is SOME POSSIBILITY that the requested relief would prompt D to reconsider its decision that harms the P. Granted that injury in this case was much stronger than in Defenders but even the causation is relaxed b/c EPA claims they did not cause it alone, and ct says they caused some of it and that’s enough. This case definitely has a much more relaxed standard but it may be a weird case in standing law. There’s a more generous treatment of the standing requirements. But beware b/c ken said that the difference in redressabilty standard between likely and some possibility refers to procedural cases and not substantive cases like MA v EPA.

Problem 5-1: animal rights issue where the animal legal defense fund who challenge the regulations undertaken by Dept. w/o notice and comment. This is an associational representation doctrine so they have to show they actually have at least one member who is harmed, it is the goal of the organization, and the lawsuit does not require participation of the individual members (so action is not for damages but for declaratory relief or injunction). So if they can show that one of their members is a zookeeper or works w/ the animals, they could argue that the psychological damage to the animals makes them violent and therefore places them at higher risk. Also they do research and it would hamper their research when they’re not in a more natural setting. It could also be argued that the visitors have an esthetic interest that is cognizable bc they’re not having as much fun going to the zoo, and it is upsetting to see the primates suffering. So there are recreational and esthetic interests that can suffice. So there is an injury and it is likely they can show a member who could sue. But they have to show there is current interaction and not simply that in the past they’ve gone to the zoo and plan to do so again, as the lujan case. How about causation? Since this is a choice for the zoo, whether or not they use the cages, the causation link is weak because the zoo could still choose to not have the caged animals. But the argument would be that if it were not permitted, the zoo would not have a choice! And given the spirit of the statute to protect the animals’ welfare, it goes contrary to the goal, but this is substantive and does not go to the causation or standing issue. As far as redressability, it is likely that a favorable court decision would fix the issue and solve the problem.

Next time we’ll revisit spotted owl from standing perpective… and how does Akins relate.

In Lujan v defenders of wildlife, Scalia says in a footnote that if a person has been accorded a procedural right to protect his concrete interests, he can assert that right without meeting all the normal standards for redressability and immediacy. So if there is a procedural right being asserted, like the prohibition against exparte communications, or notice and comment, you don’t have to show everything necessarily. But must you still show an injury in fact? Beware of things that everyone suffers. That’s a taxpayer suit and banned. So even if you have a procedural injury, you still have to show a particularized injury to a specific group of people or an individual. But Akins muddies the water on that. Bc in Akins edges on that direction of allowing a more generalized harm and hence the whole issue as to why we allow mass torts where a bunch of people have the same injury and courts allowing suits where a harm is concrete, though widely shared. But the dissent blasted them saying that even in mass torts, the injuries were particularized because every arm torn is a separate particularized injury. So the ct seems to think the prudential strand of no generalized interests is met here. Scalia says that if we allow the cts to do that, to tell the executive what to do regarding an injury that affects the whole electorate the same way, then you give them a power they did not have bc they only have the power to restore individual rights.

Violations of procedural regulations? In Akins Breyer says that there is standing because there was an injury to their voting rights since they had no information about this Israeli committee to decide which candidates had donations from them, there was causality and the injury was redresable. Also ct finds prudential standing because they were in the zone of interest contemplated by the statute setting up the election committee and the PAC law. But, as Jen pointed out, the ct never really addresses how it is redressable. Can the plaintiff show there is a likelihood that re-evaluation by the agency would rectify the problem. The standing is decided at an earlier point in the case. So we first solve the issue of standing before we even go into the merits of the case.

Agency action Requirement:

Under 702 a person who has suffered a legal wrong or is adversely affected by agency action is entitled to judicial review thereof.

The issue is what agency action is and for that we go to the definitions in 551.

Lujan v national wildlife federation. Scalia says seems to think that a program is not an agency action. A program is a whole and not a specific action. Many individual actions were being challenged and even actions to be taken and he finds that there is no standing for some of the Ps because they only hike in one small part of the land and the agency cares for a huge part of the land. But the others seem to have standing bc there was an actual order to open up some lands for development. But even if they show standing, there was no specific final agency action that they challenge they just challenge the “program” which is many orders. No specificity to find agency action. Does that conglomeration of agency decisions over time meet the definition of 551 (13)? Ct says no.

Norton v Southern Utah wilderness alliance:

Suit to compel agency action to protect the land that could be defined as wilderness from damage from Off road vehicles. Ct says that they cannot do that bc there is division of powers between judiciary and executive and courts cannot determine in what way the agencies should comply with something and in this case there is no agency “inaction’”. It all comes down to whether the action is required to be taken by the statute? Or is there another action the agency could take to comply with the statute? If so, it is discretionary and not reviewable.

Problem of the cars that need to be recalled by informing the owners. Policy is developed by agency for regional recall and there is a complaint to be filed in court to ask for an injunction compeling it to require national notification. Is this an action the agency is required to take? There is agency action, not inaction, but a policy or an interpretive rule. If so, then is it reviewable yet or do we need something more final? It’s not legally binding so should a ct review it? Yes, if found that it is a legislative rule trying to be passed w/o procedures.

Exclusions from Judicial review: Under 701 you don’t get judicial review in two instances:

• When the statute says you don’t

• When the agency action is committed to agency discretion.

701 b also excludes from the definition of agency Congress, courts, governments of territories or possessions and DC, ct martials and military commissions, parties.

In Block the ct says that congress did not have to be that clear in their intent to preclude from judicial review. It is enough to find that they had the intent by seeing if they intended to rely on a class to challenge agency disregard of the law. So in this case which involved milk handlers challenging a price protection reg. the congress said that in the rest of the statute congress gave the right to other people and they had to go through administrative remedies. So the wrds from the case are “ the standard is met and the presumption favoring judicial review is overcome whenever the congressional intent to preclude judicial review is “fairly discernible in the statutory scheme”’.

Problem 5-4: BLM trades land to a landfill and Sierra court challenges bc valuation of land is not fair. But Sierra is not a party. Abbott lab case says that unless congress has said no judiciary review, there is review. Presumption of judicial review. But Block lowers the standard to where if you find fairly discernible intent in the scheme, then you don’t have the right either. But here, since Sierra club is not a party, they’re not included in the mandated arbitration and therefore could bring a lawsuit. Bc the statute says that the trade is ok as long as it serves public interest. In this case, the sierra club is in the position of a watchdog and should be in a position to sue. Block says that in that case preclusion of the suit does not pose any threat to the statutory objectives. IN this case, preclusion of the suit would be a threat b/c the landfill people will never sue the BLM bc it is not in their interest. Also the statutory scheme is so complex as compared to the simple scheme in this case about land trades, that it’s clear that congress looked at all the players in the milk case and could have allowed judicial review but did not. IN this case, it’s easy and the presumption for reviwability remains intact. So in this case it’s an uphill battle to show congress wanted to preclude judicial review.

The second part of 701 says that when an agency action has been committed to agency discretion by law. But 706 (2)(A) gives judicial review for agency action under the arbitrary and capricious standard for agency discretionary acts. The answer is that “discretion” means a different thing in both of those. There are some things that are so fully in an agency’s discretion that cts should not get into it.

Heckler case: unapproved use of an approved drug as a lethal injection. Ps want FDA to investigate this unapproved use which not necessarily did what they said it did. FDA refuses to investigate and take enforcement action. Ct says it is unrevieable. Ct analogizes to prosecutorial discretion of whether or not to prosecute a case. This case quotes Overton park and says that if there is no law to apply, then the agency action stands. But it really has more to do with the judiciary inability to get involved in these decisions where the agency has all the knowledge. In Webster, the CIA agent was fired for being gay and the ct says again that there was no law to apply bc the statute gave that discretion to the agency head. There has to be suitability for review. In Lincoln the health fund for the Indian kids is terminated by agency and ct says they will not review bc agency needs discretion to decide how to spend its funds.

BUT decisions to refuse rulemaking is reviewable. So it does not seem to be a parallel between that and decisions not to enforce. Difference could be that a petition for rulemaking is given by the APA and the APA says that if it is denied you have to explain why you declined. In the FDA lethal injection case it’s more a case of priority setting which cts are wary to do.

In Heckler: Marshall dissents by saying that in prosecutorial discretion you’re dealing with something that already happened and that there is no urgency whereas the agency actions have urgency.

So what do we do when a statute overlaps an agency’s discretion given by organic statute. Epileptic driver whose license is taken away bc secretary refuses to issue a waiver which is in his discretion to do. But the federal rehabilitation act says you cannot discriminate against individuals with handicaps under any program or activity conducted by any executive agency. So, this is not a case where we have “no law to apply”. Also, this is not a case where the cts would be setting priorities for the agency. This is more of an adjudication because it has to do with whether or not a license is given and licensing is reviewable. Individualized adjudication. If there is a meaningful standard by which to judge an agency action even if it is a collateral statute, you can review.

So my question as to whether it would be reviewable if Webster had been a woman rather than a gay man and thus protected by title 7 is still up in the air because it would not be a case of no law to apply BUT ultimately it goes to whether the ct should be getting involved in this kind of thing or not, and in the Webster case since there is a national security issue, it’s kind of iffy whether the ct would review.

Also, always include a constitutional claim! Webster’s constitutional claims are not dismissed as are his claims under the apa. So always add a constitutional claim.

CAUSE OF ACTION:

Any person is entitled to judicial review who has suffered a legal wrong by an agency action and it can be by statute giving that right or as per the APA if they are adversely affected or aggrieved by agency action within the meaning of a relevant statute. Then you have the prudential limit on standing that says you must be within the zone of interest of the statute.

So, you must have standing, both constitutional and prudential, cause is by agency action and must be reviewable by statute or given to agency, and must have a cause of action.

Case of the Air couriers v. Postal office: ct concludes the interest of the postal workers in keeping their jobs is not within the zone of interest that congress had when it enacted the statute setting up the monopoly of the postal office. The main reason behind the monopoly was to ensure the postal service was available to the public at large, but it was never to protect the jobs of the postal workers, so the ct finds they are not within the zone of interest. Somewhat unusual case.

By contrast, in the credit union case, the ct finds that the commercial banks are within the zone of interest that congress had in mind when it restricted the membership in credit unions! So in this case, even though congress does not say that banks are protected by statute, the ct finds they must be since congress restricted the markets available for credit unions.

Problem 5-6: cattle grazing problem in Muir forest. The plan to restrict grazing does not affect current permits but future renewals. Ranchers say that the EI Statement is inadequate bc it does not address alternatives that are better for environment and still would allow them to graze. The argument for the government is that the ranchers are not within zone of interest of either the NFMA and NEPA. But ranchers could argue that part of both is multiple use and range use and that NEPA says maintain harmony and fulfill economic requirements of present and future generations. This is about beneficial productive use of lands. So the ranchers would have an argument. Standing could be had by a rancher whose permit will expire fairly soon.

But is it redressable? He says yes, because this is a procedural argument they only need to show that there is a likelihood that if the ct orders them to re-do the EIS, that it would come out the other way and benefit the ranchers. Jen had the question I had as to how this was procedural and he said NEPA was strictly procedural.

Bennett v Spear (1997) said that a statute like Endangered Species Act which allows any person to sue under its citizen suit provision, actually either eliminates any zone of interest requirement OR extended the zone of interest to all persons with constitutional standing.

Notes say that a person is always within zone of interest if she’s regulated. The zone if interest only comes up for lawsuits by the third persons who are not regulated but are equally affected, like competitors.

TIMING:

Finality focuses on agency. Has the agency finished its work?

Exhaustion of administrative remedies and procedures. Focuses on the litigant

Ripeness focuses on the ct and its ability to do its job properly. Is this case in a posture such that the ct can do its job in the proper way.

FINALITY: APA 704. Agency action made reviewable by statute and final agency action for which there is no adequate remedy in a court are judicially reviewable. BUT preliminary, procedural, or intermediate agency action or ruling not directly reviewable is subject to review on the review of the final agency action.

You cannot have final agency action UNLESS there is agency action rather than the program being challenged in Lujan.

There are three slightly different formulas offered by SCOTUS:

• Franklin test: Whether the decision making process has been completed and the result will directly affect the parties.

• For an agency decision to be final it needs to be one by which rights or obligations have been determined or from which legal consequences will flow.

• Whether the decision maker has arrived at a definite position. Page 498 Darby approach. … get this from someone else.

So there is a lack of clarity as to what the criteria are for determining finality.

Problem 5-7: FLSA problem about workers that had little hours in one job but could get more hours by working in employer’s other company that was entirely separate. A worker files complaint because he’s not getting paid overtime. The wage and hour division of dept of labor sends a letter saying that they won’t prosecute this time but they will continue to monitor the case and they might be prosecuting if they find more violations. The employer is not being adversely affected, arguably so no standing! But there are statements as to legal consequences that will follow if he continues. Some of the factors he discussed was Who issued the letter: the Callahan case had a higher official writing them, also the letters being directed at the client and not to a third person (like in Callahan where the letters were sent to another county), whether the letters responded to particularized circumstances of the recipient of the letter. Since the health care operator had the letter sent to him, it seems to have a stronger case to have court review.

In Appalachian Power. (have not read) the judge blasts the agency’s attempt to make a lot of law through nonlegislative rules to avoid notice and comment. The judge says that this will be considered final agency action. He says this is clearly intended to have legal consequences. It’s not tentative and interlocutory.

In our case of the FLSA we don’t have a run around the rules, it is clear that it is not a command but clearly will have consequences and is intended to be final. So even though there is no final agency action here in the sense that there is no harm yet, the expectation is clear that you’re supposed to change conduct and it will affect you and it seems definitive position. Is there a concrete injury? Maybe if you are mandated to pay overtime from now.

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