Admin Summary:

1I.Non-Delegation

3II.Constitutional Constraints on Adjudication: Procedural Due Process

5III.APA Framework for Formal Adjudication

7IV.APA Constraints: Formal Adjudication

8V.APA Constraints: INFORMAL Adjudication

9VI.Constitutional PDP Constraints on Rulemaking

10VII.APA Constraints on Formal Rulemaking

11VIII.APA Constraints on INFORMAL Rulemaking

15IX.The Adjudicating Rulemaking Choice

19X.Congressional and Presidential Control

27XI.Judicial Review

I. Non-Delegation: ON EXAM: Look to see if theres a standard; then ask to whom the decision making power is given1. Congress cant delegate away its legislative power. The legislature must at least make the fundamental policy choices, leaving the agency to decide the more precise questions.

2. Source: Art. I 1: Legislative function is vested solely in Congress3. Meaning: Current doctrine from J. W. Hampton, Jr. & Co. v. U.S.: congress must articulate an intelligible principle of law Mistretta. Congress can delegate rulemaking authority to an agency, but its grant of authority cannot be an unjustifiably indeterminate.a. H.L.A. Hart: everything is indeterminate, but there are pros/cons for indeterminacy:i. Pro Indeterminacy:1. Agency expertise2. Allows for case-by-case decisionmaking; standards can be fleshed out through adjudication3. Legislative capture dominated by special interest groups takes power away from Congress4. Agency flexibility (Congress, on the other hand, would have to amend statute)5. More presidential control (more democratic)

ii. Anti-Indeterminacy:1. Agency capture to special interest2. Congressional Controlmay be more democratic?3. Congressional expertise?4. Notice to affected parties (through statutory specificity)4. Application The Intelligible Principle Doctrine: Congress can delegate rulemaking/adjudicatory power to agency/private individual, but the indeterminacy in the delegation cannot be unjustifiably high; to tell this, weigh the above factors.a. The delegation must be to a public authority and not to a private board or group (Schechter and Carter Coal gave local coal boards the power to set minimum coal prices no delegation to private groups, at least explicitly)

b. NB: this is dead letter law. 5. Sources of Statute Interpretation

a. Ordinary meaning of language of the statute

b. Dictionary (not very helpful)

c. Legislative History

i. House & Senate Committees reports accompany statutes

d. Structure of a Statute

e. Purpose of Statute (Congressional Record)

f. Member Statements

6. Cases: a. Schechter Poultry Corp. v. U.S. (1935), handouti. Issue: Congress delegates to President the power to set standards of fair competition as drafted by private groups.

ii. Holding: There are insufficient standards guiding the Presidents discretion (Panama Refining Co. v. Ryan); Indeed, the President may take no action at all; Therefore violates the Intelligible Principle Doctrine. (Also, there are problems with the private groups being able to essentially set their own legislative standards for conduct; self-regulating).

b. Mistretta v. U.S. (1989), handouti. Issue: Delegation of promulgation of Sentencing Guidelines to the US Sentencing Commission

ii. Holding: General guidelines or purposes delegated are sufficient to withstand the doctrineII. Constitutional Constraints on Adjudication: Procedural Due Process (on exam: ask 1) whether process is due, 2) what kind, 3) when is it due)1. Adjudication: agency process that results in orderformal particular legal directive/statement addressed to particular individual; where the final outcome rests of facts specific to the case; essentially any final disposition by an agency in a matter that is not a rulemakinga. This is allowed as long as it does not upset Article III power of the courts (taken as a given for now, will come into play through Scope of Judicial Review)

2. Procedural Due Process: a. Goldberg v. Kelly, pg 322: DP requires some things of Friendlys list(316) where would suffer a grievous loss from a deprivation (Supplanted by Matthews). Raises Qs of what DP requires and what is a lib/prop interest. Only a liberty or a property interest may trigger PDP. This is the greatest extent recognized of PDP and has not been expanded since the decision; seems to glorify oral presentation and cross-examination; holding was that there had to be a pre-termination review according to the elements of Friendlys list3. Trigger (the whether): Absent a claim that arises under another provision of the Constitution, You need a legitimate claim of entitlement for a 5th/14th PDP claim: Is there a liberty/property right?a. Liberty:i. Government must infringe some interest created by the DP clause/Const. itself: so there must be coerce, prohibit, stigma (attached to the fired person in Board of Regents of State Colleges v. Roth, pg 354 1. Liberty to contract

2. Engage in common occupations of life

3. To acquire useful knowledge

4. To marry, establish a home and bring up children

5. To worship God, and to generally enjoy privileges long recognized as essential to the orderly pursuit of happiness by free men)6. Liberty can also be denied through a stigma plus the denial of a tangible benefit (Paul v. Davis).b. Property:i. Grounded in non-Constitutional law (state law, statutes, admin rules, CL, K, unwritten practice, judicial precedent, practice or history, appeal can be made to the purposes of the law).1. Perry v. Sinderman, pg 360 unwritten practice of rehiring was enough (implicit entitlement)ii. Reliance interest:1. Generated from specificity of statute (but see HLA HART) sufficient to generate reliance.2. Look for mandatory or criteria defining words such as shall, not, may (e.g. shall not be dismissed without good cause), instead of discretionary wordsiii. DUE PROCESS IS AN INDEPENDENT CONSTITUTIONAL INQUIRY once the property interest has been established (and thus not limited to the process given by the statute granting the property).

1. Look to the Constitution for DP liberty rights, not the statute that generated them. Cleveland Board of Education v. Loudermill, pg 367. DP is an independent judicial Q. State could have denied Loudermill the right to be fired only for cause, but once it gave that grant, the level of DP granted by the Constitution must be followed.

2. Rejects the bitter w/ the sweet approach of Arnett. (Plurality in Arnett v. Kennedy had said that, since a state has discretion whether to grant an LCE, the state may take away the LCE by a level of DP granted within the statute granting the LCE and not some universally separate DP); Given Goldberg v. Kelly, pg 322, once a state chooses to grant an LCE, it may not take the LCE away without a required level of DP).

3. The right to have a common job is a property interest.

c. How Much Process is Due? (Mathews v. Eldridge, pg 337)i. 3 Factor Balancing Approach:1. Private interest2. Government interest (cost)3. Risk of erroneous deprivationa. This tells you which of Friendlys list you incorporate.b. What is the function involved and the fiscal and administrative burdens that the additional or substitute procedural requirement would entail?

d. Reasons for limitation:i. Language of DP clause; dont want to open floodgates, concerns about judicial activism/values.e. Application (CBA):

i. Find a DP interest, either property (reliance from statute etc.) or liberty interest (const.)

1. See if prop interest is sufficient and the reliance is generated from specific and mandatory statute

ii. Matthews balancing test after mentioning reasons for limiting.

1. CBA is a test to see how much efficiency is gained; proxy for overall wellbeing (DO A CBA ON EXAM?)

APA RequirementsInformalFormal

Adjudication-NOT 554, 556, 557

-PBGC554, 556, 557

-Seacoast Anti-Pollution League v. Costle

-Is triggered also if sufficient triggering language under the authorizing statute (normally an organic statute); NEED TO FIGURE OUT WHAT COUNTS AS TRIGGERING LANGUAGE

Rule-Making553553, 556, 557

III. APA Framework for Formal Adjudication:

1. Formal Adjudication governed by 554, 556, 557, or by sufficient triggering language under the authorizing statute (normally an organic statute).2. APA Framework for adjudication:

a. 554 Triggers formal adjudicationi. 554(a): triggering provision to determine whether formal or informal (hearing or hearing on the record)

ii. 554(b): notice to parties, settlement

iii. 554(c): opportunity for pre-hearing submissions

1. if no settlement, jump to formal procedures of 556-57.

iv. 554(d)1. (1): Ex parte contact ban except when he notifies all parties and allows them to participate in the contact

2. (2): ALJ must be separate from enforcement staff, cannot be supervised by investigating/prosecution group (but doesnt apply to agency).

b. 556:

i. 556(b): presiding officer at hearing (evidence gathering process)

1. must be impartial

2. separate from enforcement

ii. 556(c): powers of the presiding officer

iii. 556(d): provision for oral hearing: party can submit oral evidence, submit rebuttals and conduct cross-examination as required for full and true disclosure of the facts not unlimited!!!1. Can adopt written hearing if other party not prejudiced

iv. 556(e): exclusive record: hearing process is a process of building a record which ( exclusive record of decision

c. 557:

i. 557(b): decision maker: where ALJ presides, need not issue a decision, can just certify the record to the agency for decision; but if the presiding officer makes an initial decision, that becomes the decision for the agency unless thre is an appeal to or review on motion of the agency within time provided by ruleii. 557(c): decision must include (i) statement of findings/conclusion; (ii) and reasons.

iii. 557(d): no ex parte contacts w/ person outside agency; can contact persons inside agency subject to 554d limitations; is grounds for adverse ruling1. 554(d)(2)(C) exempts administrator from ex parte contact ban

2. Communication w/ president could be problematic depending whether he is inside or outside the agency (Adler says outside is OK).

3. EO probably ok because public record?3. Informal Adjudication: not too many guarantees

a. 555(b): can be represented by counsel, interested person may appear before agency for determination of an issue in connection w/ agency function.

b. 555(d): right to subpoena

c. 555(e): prompt notice of denial.

d. But Overton park requires a de facto administrative record (not formal public record).

e. PDP probably dont want EO interfering unless its very rule-like.IV. APA Constraints: Formal Adjudication:

1. Seacoast Anti-Pollution League v. Costle (1st Cir.), handouta. Is APA formal adjudication applicable?

i. Words in organic statute sufficient to trigger formal adjudication under 554(a) (and 556, and 557).

1. Hearing on the Record

2. Public Hearing

3. Hearing

ii. However, the Circuits muddled the language requirement and now:

1. Hearing, Hearing on Record, and Public Hearing sufficient for 9th Circuit

2. Hearing on the Record (and not hearing or public hearing sufficient for D.C. Cir. and most other cir.s

b. Was no cross-examination OK?

i. Agency allowed written submission to respond to PSCOs backflushing.

ii. YES, OK: Only have a presumptive right to cross-examine under 556(d), and only when its required for a full and true disclosure of the facts.

1. (Remanded to see if cross-exam necessary.

c. Was admin seeking addl evidence from in-house technical panel OK?

i. Not outside of the agency so within 557(d), ALJ CANT consult a person or party but the agency CANii. If panel consisted of people who were involved in investigation or prosecution, would be 554d violation (applies to agency and ALJs in FA), but this is not the case here b/c they werent involved in enforcementiii. However 556(e) was violated, limits decision-making to the record, cannot add in new evidence/info on the record1. Even though Experts are necessary, administrator has job of making highly technical decisions that he may not know much about. But the record did not support the conclusion until supplemented by the panel2. Panel can only sift and analyze existing material and not new facts.

3. They therefore violated 556(e) of the APA because this information was not in the record on which the Administrator relied. The case is therefore remanded because the Administrator based his decision on material not a part of the record.4. ADLERS HYPO: the administrator is trying to determine whether the industry standard is the appropriate standard; this shows that a good proxy for whether there is a 556(e) violation is whether there should have been cross examination as required by 556(d) (for full and true disclosure of the facts) based upon the kind of evidence added/sifted5. Also consider that it may violate 706 b/c JR needs to be made on the whole record (OP)d. Richardson v. Perales, pg 413:

e. Independent medical advisor reviews s medical testimony and says condition is only mild. This is hearsay evidence.

i. Is hearsay okay under 556(d)?

1. Yes, no limitation on hearsay as all relevant info can be submitted, so as long as its relevant, hearsay is OK.

ii. But has a presumptive right to cross-examine (556(d)), but waived his right to subpoena.

f. doesnt have to be able to cross-examine Dr. under 556(d), just when it would increase the accuracy of the decision (full and true disclosure) and the balance against admin. concerns. (balancing prongs are 1) intrinsic benefit of testimony, 2) cost of testimony (incl. time delays and ability to handle the caseload), and 3) increase in accuracy)i. Not the strongest case for this point because waived his cross-examination right.

ii. Accuracy is weighted heavily b/c full and true disclosure is required by APA, not simply reasonably accurate

V. APA Constraints: INFORMAL Adjudication:

1. Pension Benefit Guaranty Corporation v. LTV Corporation, handout:

a. Pension Benefit didnt really have any procedures for determining that LTV was healthy enough to restore pension plans (beside LTV making follow-on plan).

i. LTV had no opportunity to rebut.

b. This was OKAY substantively under INFORMAL APA Adjudication.

i. No triggering language under 554.

1. Wide discretion given to agency in the authorizing statute termination shall be reversed if deemed appropriate under PBGCs powers under the subchapter; DP is not implicated

ii. 555 doesnt have too many rights and courts cannot add to the APA 555 restraints on IA: See Above and VY deference.

c. 706(2)(A) Arbitrary and Capricious doesnt apply because it doesnt really apply to procedural rights, only substantive decision-making.

i. However, if it did apply, the only requirement is that the agency must be able to explain its action (PBGC) in the order on the basis of the record as it was at the time of the decision making (Overton Park).d. PDP argument wasnt raised, but could have been a good one.

i. Is there a property interest?

1. Does LTV have a legitimate claim of entitlement to the Plan?

2. Look to ERISA to see if theres mandatory language with a reasonably high degree of specificity within statute itself.

ii. Is there a liberty interest?

1. Maybethey were being forced to administer the program.iii. HOWEVER, the problem with a PDP argument is that this is a restoration and not a deprivation of property and only requiring LTV to confine its liberty to the extent that it had before it approached the PBGC for what essentially became a bailout of its pension planse. Pension Benefit seems to announce general principle that courts should be deferential with respect to procedural challenges under agencys organic statute (also VT Yankee) procedural deference.

2. Califano v. Yamasaki, pg 395: ADLER SAYS THIS IS SUPERSEDED BY PBGCa. Must Secretary provide old age and disabled social security beneficiaries opportunity to request hearing prior to initiation of recoupment procedures?

i. Does Social Security Act 204 require a pre-recoupment oral hearing as a matter of

1. PDP? Nope

2. Court seems to have said there that absent a specific procedural mandate, an agencys organic statute will not be read to impose procedural obligations.

a. In this case, the requirement of a pre-recoupment oral hearing was found in the SSA 204 itself

ii. This is an older case than Pension Benefit. Current courts are more deferential.; ADLER thinks that PBGC is now governing law3. Overton Park: needs an administrative record.

a. Must go back and see what info was available to decision maker at time of decision. Might have to depose or remand to agency.

VI. Constitutional PDP Constraints on Rulemaking:

1. Rulemaking: ***Use these terms!!!***

a. Formally general legal directive that rests on general principles and is addressed and applicable to a broad class of persons.

i. Always future looking governs present and future conduct

ii. Decision not based on past conduct

iii. PDP applies when rule applies to small # of people and rests on specific facts unique to each individual affected by the rule, even if a general directive. (Londoner).b. Sources of constraints on rulemaking:

i. Uses some of 553, 556, 557

ii. Substantive statute courts usually very deferential to agencies on substantive statutes

iii. Constitution (PDP) not really applicable to rulemaking that has general applicability to a large number of people (Bi-Metallic)

iv. Arbitrary and Capricious (706(2)(A)).

2. Londoner v. Denver (1908), handouta. Denver assesses tax for one district for road work. Notice by publication, and opportunity to present written evidence. No hearing.

b. No hearing violates PDP. Significantly affects landowners interest.

i. a relatively small number of persons was concerned, who were exceptionally affected upon individual grounds.3. Compare with Bi-Metallic v. State Board of Equalization of Colorado (1915), handouta. Colo. raised property taxes for Denver only by 40%. argues violation of PDP

b. No PDP violation. Hearing not required.

i. When rule applies to more than a few people, impractical that everyone should have voice. Those rights are protected in the political process.

4. Adlers synthesis:

a. PDP does not apply except if theres a Londoner small class exception, then it is treated like an order for purposes of PDP. There needs to be both a small number of people affected and the rule must rest on specific, as opposed to general facts.VII. APA Constraints on Formal Rulemaking:

1. Triggering of APA formal rulemaking 553(c): when rules are required by statute to be made on the record after opportunity for agency review (remember FL East Coast Holding), 556(d), 557(c&d) apply, not 553 or 554(d)(1 or 2)a. 553(b) = notice and comment rulemaking; applies only to Substantive Rule Making (not Procedural Rule Making, Or Any Non-Legislative Rule Making Interpretive Rule or Policy Statement)b. 553(a)(2) 553 doesnt apply to Matters relating to benefits, contracts, grants, loans. Or non-legislative but interpretive rules. BUT: Most agencies voluntarily comply with 553.

c. 553(C) opportunity to express view with or without opportunity for oral hearing.

2. Whats the difference between formal rulemaking and formal adjudication:

a. 554(d) (or maybe all of 554) applies only in Formal Adjudication

b. 556 (d) just have presumptive right to oral evidence (if youre not prejudiced, then can be written); and a presumptive right to cross-examine (like F.A.) (Seacoast)3. Formal rulemaking is RARE because its so cumbersome.

4. DIFFERENT TYPES OF RULES:

a. PROCEDURAL RULES: Internal policymakingb. SUBSTANTIVE RULES:

i. Legislative Rules:

1. Rules w/ force and function of law. 553 applies. Notice & Comment

2. Rule that adds or changes legal requirementseffects actual change in existing law or policy and creates new rights or duties.

ii. Interpretative rules and policy statements (non-legislative)

1. 553 does NOT apply. No N & C

2. Interpret existing legal duties. Functions like precedent.

c. When is a rule-like statement by an agency an interpretative or legislative rule?

i. Intent to bind test: did the agency intend it to be binding?

1. Adler says this is confusing. Best way to figure out is to see if agency has gone through notice and comment rulemaking.

5. Wirtz v. Baldor Electric Co. (D.C. Cir.), handouta. Sec. of labor refused to give info that he based min. wage decision on. This violated 556

b. Held: this is formal rulemaking because had triggering language.

c. Important difference between formal adjudication/formal rulemaking = In formal adjudication, there is an absolute right to present direct evidence through oral or written testimony and a presumptive right to cross-examination. In formal rulemaking, there is a presumptive right to present direct evidence orally and a presumptive right to cross-examination. (last sentence of 556).

VIII. APA Constraints on INFORMAL Rulemaking:

1. APA Requirements under 553 for informal rulemaking:a. 553(b) = notice and comment rulemaking (publish in fed. Register & responsiveness to comments) plus statement of basis and purpose.; Notice and comment requirements do not apply to Interpretive Rules, Statements of Policy, Rules of Agency Organization/Procedure/Practice or when Agency for good cause finds that the requirement is impracticable, unnecessary, or contrary to the public interest.b. 553(a)(2) 553 doesnt apply to military or foreign affairs or matters relating agency management or personnel or to public property, loans, grants, benefits, or contracts. BUT: Most agencies voluntarily comply with 553

c. NOT REQUIRED (Nova Scotia): oral hearing, material neednt be submitted under oath, no opportunity for cross-exam; theres no ban on ex parte contacts (but if theyre relied upon, must appear in the record to allow for comment and judicial review).

2. 553 requirements: From Nova Scotia.

a. Right to (written) Commentb. Right to Adequate response to comments submitted (comments in total, not a right to a response to a specific comment)c. Adequate disclosure of evidence agency relies upon (relevant info should be supplied so as to get meaningful comments)d. Articulation Requirement

e. Logical outgrowth (of the rule proposed for comment to one finalized) (this is read into the statute)

3. 706(2)(A) cant be arbitrary and capricious. Requires reasoned decision-making at the time decisions were made and must be thorough, probing, and in depth enough to explain decision (Seacoast and 556(c)).4. The statute itself; (702(2)(C)

4.5 Automotive Parts & Accessories Association v. Boyd, pg 500: FR not triggered by requirement of substantial evidence in the record as the basis for JR

4.6 National Tire Dealers & Retreaders Association, Inc. v. Brinegar, pg 512: Keep in mind that no APA test applies to subsequent legislation (that passes rules or standards) b/c the APA can be superseded by other enabling legislation; however, the record must plausibly support the ultimate conclusions of the agency under IR and that the substantial evidence test for review must be satisfied by the 553 record

5. STATE FARM: Motor Vehicle Manufacturers Association of U.S., Inc. v. State Farm Mutual Automobile Insurance Co., pg 520: Substantive APA constraints

a. Act: issue motor vehicle safety standards that shall meet the need for motor vehicle safetyi. Passive restraint and airbags rule, then after Reagan, NHSTA, after notice and comment, rescinds the rule.

b. State Farm objects and court upholds that that this was Arbitrary and capricious under 706(2)(A) b/c the agency did not consider the alternatives to repeal of the rule:

i. Reason (1) for being arbitrary/capricious = NHTSA gave no consideration to modifying the rule to require just airbag technology (without passive seatbelts)

ii. Reason (2) for being arbitrary/capricious = NHTSA did not adequately explain why they dismissed the safety benefits of passive seatbelts

iii. Reason (3) for being arbitrary/capricious = NHTSA failed to articulate why they didnt choose to amend the rule and rather included nondetachable passive belts.c. APA Constraints and JR apply to rulemaking and to the rescission of rules already passed

6. 706(2)(A)

a. Requires reasoned decision making (BUT NOT a participatory right necessarily). The court doesnt focus on the outcome per se, but on the agencys reasons and analysis that gave rise to the decision.

b. No presumption of validity; no presumption that the agency carried out its mission with regularity (State Farm Fn. 9)

c. ADLER: 706(2)(A) requires ACTUAL, CONTEMPORANEOUS RATIONALITY (no post hoc rationalizations)d. Rational basis review is less strict that 706(2)(A) review. (State Farm). This is because the actual reasons are needed. (Rational Review is saved for SDP and minimum rationality of Legislative and Agency actions)e. Note: 706(2)(c) may be satisfied (requiring compliance with the underlying statute) even if 706(2)(a) is not satisfied

i. ADLER: Why not just use the change-of-administration rationale (change of priorities and view on the means to accomplish safety presumably backed by the popular will b/c this administration was just elected)

7. U.S. v. Nova Scotia Food Products Corp. (2d Cir), pg 535 Procedural APA constraints on informal rulemaking.

a. FDA issues time-temp-salinity regulation via informal rulemaking.

b. 553 was followed (notice, comment, statement of basis).

i. But Comments said the rule was commercially infeasible and accuses FDA of not being responsive to its comments and that it failed to disclose evidence upon which rule was based (which in turn didnt allow for a real opportunity for comment).

c. 553(c)

i. Implicit is requirement for responsiveness to comments submitted.

ii. Doesnt need to be extensive, just addressed and considered.

d. Also needs public disclosure of evidence relied upon (The agency must make a contemporaneous record).i. Articulation.

ii. Otherwise, cant have meaningful comment ( arbitrary.

iii. ( need a de facto public record.

iv. (this right doesnt come from 706(2)(A) [See Pension Benefit] and 556 isnt applicable)

v. Logical outgrowth.e. The record must be thorough, probing, and in depth (Meanwhile, FR would require more a complete record)

f. A court may legitimately add to the record later by finding facts; however

g. ADLER: Ex-Parte Contacts: does not appear to be a ban on ex parte contacts in IR (as there are for FR in 557(d)) but Nova Scotia may require them to become part of the record to avoid A&C

8. Vermont Yankee v. NRDC, pg 550: (oral hearing/cross-exam not reqd in informal rulemaking)

a. Atomic Energy Act: Operating license proceeding. This was adjudication, but during this, the agency starts rulemaking proceeding under 553 regarding disposal of long term waste.

i. NRDC wasnt given the chance to cross-examine, just to present evidence.

ii. NRDC believes it had right to cross-examine.

b. Court Holds:

i. Court cannot read procedural requirements beyond those required by the APA in 553c. This case stands for the proposition that Courts should greatly defer to agencies in interpreting their own statutes on procedural [and probably interpretive] rules (same as Pension Benefit)d. Clearly, the Court in the past has interpreted the APA to require certain procedures (see Nova Scotia, basis and purpose statement and informal record). Its thus hard to see how these decisions survive Vermont Yankee. The principle of deference to agencies in interpreting statutes, however, has been mainly applied to agency organic statutes, not cross-cutting statutes such as the APA. Thus, the read-in requirements of informal rulemaking stand.9. Ex Parte Contact and Bias Restrictions in Rulemaking (Keep in mind on the exam the concerns about captive agencies and captive legislators)a. In Assn. of Natl Advertisers, Inc. v. FTC, pg 577, the Court holds that administrators need not be impartial decision makers during an informal rulemaking procedure.

b. TEST = A Commissioner should be disqualified only when there has been a CLEAR AND CONVINCING showing that the agency member has an UNALTERABLY CLOSED MIND on matters critical to the disposition of the proceeding. (There must be a clear and convincing showing that rebuts a presumption of administrative regularity).i. The Court here enunciates a test, but it is an EMPTY test.

1. Administrator can have an opinion; do not want uninformed, unthinking, or inarticulate decision makers

ii. In this case, the chairman of the FTC (Pertschuk) is clearly partial but SCOTUS says he did not have an unalterably closed mindc. Reliance on Vermont Yankee for great deference to agency action and Dissent in State Farm that president should be able to change agency personnel based on ideology

d. 556(b) still requires an impartial decision maker for administrative facts and disqualification of the presiding decision maker can still occur through a PDP analysis

e. NB: There is no ban on ex parte contacts in 553. The Court has not read one into 553.

i. Even though not barred by 553, the contacts shouldnt be able to add evidence in secret because all evidence that the agency uses in consideration of a proposed rule must be disclosed prior to comment.

ii. Nova Scotia seems to stand for the proposition that undisclosed ex parte contacts result in an 707(2)(a) A&C violation on review

IX. The Adjudicating Rulemaking Choice:

1. Controlling Adjudication Through Rule-making:

a. Costs/benefits to rules:

i. Costs: rules are over- and under-inclusive relative to underlying statute. ( People eligible for disability benefits under statute may not get benefits under the rule.

1. And the converse, even though an activity doesnt comply with the rule (that automatically makes it unfair) its not really unfair competition.

ii. Benefits: Less expensive, clear notice of bright-line rule, accuracy (having adjudications under statute every time would lead to different results).

1. Dont have adjudicate same issue.

b. Legislative Rules: Change the nature of the adjudication: no longer adjudicating under the statute, but under the rule. The only remaining Q is whether the is under the rule, (not whether theyre under the statute).

i. Statute: promote safe driving ( Leg. Rule: dont drive > 65 mph

Statute: no unfair competition ( Leg. Rule: post octane ratings

ii.

2. Heckler v. Campbell, pg 451: (agency can rely on rules to resolve certain classes of issues arising in individualized benefit determinations).

a. Statute says disability ben. if no gainful work in natl econ. Rules issued defining disability: grid rule which shows if work is unavailable based on 4 factors. (Campbell) is denied.

b. Possible objections:

i. Statutory right to hearing: still have right to hearing, but now just to see where you fit in on the rule (grid); IS THIS THEN A FORMAL ADJUDICATION.

ii. Statutory authority to issue rules is presumed absent clear intent.

iii. PDP: Rulemaking isnt subject to PDP, really, (see Bi-Metallic), but adjudications under the rule/grid are (see Roth, Sindermann, Goldberg).

1. The court rejects the PDP claim, stating that Matthews v. Eldridge balancing test (determining what procedures are necessary to satisfy PDP) are irrelevant when the agency has promulgated valid regulations.

2. When accuracy is fairly tested during the rulemaking, the rulemaking proceeding itself provides sufficient procedural protection.

3. So, even if there is a property interest, Matthews v. Eldridge test would not apply.

a. See Quesada below.

iv. 706(2)(A)- Yes, its a constraint, cant be A and C and rule cant violate organic statute.

3. The Power to Make LRsa. National Petroleum Refiners Association v. FTC, pg 475: (unless the statute specifically prohibits it, the court will read such a power to issue legislative rules into it)

i. Prior to rule, issue in adjudication would be whether the particular failure to post is unfair competition.

ii. Octane rule narrows the adjudication just to whether the gas station posted the ratings or not.

iii. FTC can promulgate rules defining the meaning of statutory standards of the illegality that the FTC is empowered to prevent (The agency may shorten and simplify the adjudicatory process and clarify the law in advance to aid in the orderly conduct of its business U.S. v. Storer Broadcasting Co.)iv. unless the statute specifically prohibits it, the court will read such a power to issue legislative rules into it; not everything must be explicit in the enabling legislation and if there is a gap between what is allowed and what is prohibited, Congress must have intended to allow the agency to confront unforeseen issues (Public Service Commission of State of New York v. FPC).4. Airline Pilots Assn. v. Quesada, pg 460: (valid rulemaking doesnt invoke PDP during the later adjudication PDP is at the rulemaking stage)

a. FAA has rule pilots over 60 must retire. This rule passed during valid 553 procedure of notice, comment, etc. wants individual hearings or otherwise violation of PDP

b. Doesnt violate PDP because only harms the whole class of people (pilots), which is okay after Bi-Metallic.

5. UDSA v. Murry, pg 128 (irrebuttable presumption)

a. Cant get food stamps for 2 years if someone in household is claimed as dependent by someone else

b. Held: irrebuttable presumption b/c no overlap w/ rule and statute, large irrationality and doesnt apply to underlying goals.

c. While not overturned, but hasnt been used to strike down since this case in 73; ADLER says it dead letter law6. Discretion to Adjudicate (choice bet. rule-making and adj.)a. Agency has discretion to issue rule or adjudicate first (SEC v. Chenery)

b. But Retroactive legislative rule-making prohibited, absent clear statutory authority to do so. (Bowen v. GTown Hosp.) because of the notice requirement to the target audience (Excelsior)7. SEC v. Chenery Corp., pg 602 (agency has broad discretion in choosing bet. rulemaking and adj. subject to 706(2)(A))

a. Mgmt buys stock during reorganization. SEC denies approval for reorg. b/c of this. SEC uses governing statute (fair and equitable) as basis for denial.

b. Chenery argues that agency failed to first issue a general rule.

c. HELD: Agency is given deference in choosing between legislative rules and adjudication (Deference is that of Minimum Rationality Review VT Yankee).

d. Retroactive legislative rule-making is prohibited absent a clear statutory authorization to do so.

i. But, you can still apply open-ended statutory standards to a novel case, without that same kind of retroactivity

ii. Essentially, this means that the agency has the discretion to make a rule, adjudicate, or make a LR through an adjudication by precedential value (see below)

e. The general statements the Agency says in the adjudication, while not a rule does have precedent value. Thats not as strong as a legislative rule, but is influential.; the failure to issue a LR is not ordinarily A&C and there is no PDP problem either8. NLRB v. Bell Aerospace (Reaffirms Chenery)

9. Problems with relying on adjudication: availability of prior warning, opportunity of parties affected to participate in policy-making, agency adherence to consistent policies.

10. Required Rulemaking:

11. Morton v. Ruiz, pg 612: (cannot limit rights of individuals based on unpublished and ad hoc determinations)

a. The statute governing general assistance benefits available to Indian states that they are available to Indians living on or near the reservation.

b. BIA has a non-legislative rule, developed through adjudication that eligibility benefits are limited to Indians on reservations.

c. Ruiz lives 15 miles away from reservation and was denied benefits b/c of this

Holding:

d. The court reversed b/c it was based on NON-legislative rule that wasnt promulgated through APA rulemaking procedures. i. But this is at odds with Chenery: which said that agency had discretion. ii. Also, court said that congress didnt intend to limit benefits to Indians just ON it wanted all NEAR.

e. Morton seems to say that agency needs a legislative rule:

i. But Chenery said that it was agencys choice.

f. Three ways to resolve this:

i. Chenery is overruled, courts are going to police Adjudication/Rulemaking Distinction more closely

ii. Chenery still good law, but there is a 706(2)(a) violation in this specific case

iii. Something else: the adjudication here was against the statute, a violation of 706(2)(c), but there is an open question whether a LR must comport with a statute completely in order to satisfy 706(2)(c).

1. The Result is that most circuits require LR comportment with the statute and an LR must be made through a rulemaking while others still allow LR development through Adjudicatory hearings as in Cheneryg. But: B/c no legislative rule, the agency should have applied the statute, which it didnt do! h. If there were a legislative rule, the statute would not have been applied, but absent legislative rule, must follow statute i. This is not VT Yankee (procedural), but Chevron (substantive).12. Interpretive Rules Not subject to 55313. American Mining Congress v. Mine Safety & Health Admin., pg 587a. Federal Mine Safety Health Admin (MSHA) issues a legislative rule that says whenever any of certain occupational illnesses/injury are diagnosed, the operator must report the diagnoses to MSHA w/in 10 days. This includes certain mining diseases.

b. MSHA issues a program policy letter (PPL) said that diagnoses includes certain x-ray results.

i. No notice and comment under 553, relying on interpretive rule exemption of 553(b)(3)(A).

c. TEST FOR DETERMINING LEGISLATIVE RULES:

i. Legislative if in the absence of the rule, there would not be an adequate legislative basis for an enforcement action or other agency action to confer benefits.

ii. Legislative if it has been published in the Code of Federal Regulations (if published in the CFR, the agency has explicitly said that it is a LR)iii. Legislative if the agency has explicitly invoked its statutory authorityiv. Legislative if rule effectively amends or repudiates a prior legislative rule.

v. ADLER would add that: was it subject to the requirements of notice and comment rule making? if so, then it is a LR.

( Not a legislative rule just because it intends to bind

d. 553 Anticipates that agencies are going to have agency interpretive rules, that are going to be binding, but they won be as binding as a legislative rule that complied w/ the N & C rulemaking; Interpretive Rules fill the hot air between LR and Overarching Statements of PolicyLR (legally forceful) Precedents (Ruiz) Interpretive Rules Overarching Statements

(More legally forceful(

( More General(X. Congressional and Presidential Control: (Remember and look to the non-delegation doctrine as well as this section)1. Introduction:

a. Formal Control Mechanisms:

i. Appointment

ii. Removal

iii. Legislative veto

iv. Executive orders

2. Legislative Veto:a. Congress can enact statutes to exert control over administrative agencies. Just need bicameralism and & Press signature.

b. INS v. Chadha, pg 95:i. House of Reps alone wanted to veto attn. gen.s suspension of deportation.

ii. Court invalidates the legislative veto because its against Art. I 1 and 7: bicameralism (both houses required to pass legislation or any legal effectuation unless Constitution explicitly states that only one house has the power ex: Approving Treaties) and Art. I, 7, Clause 3: presentment (all legal effectuations subject to bicamerialism are required to be present to the President for approval).

1. The Framers did not want Congress to get around bicameralism and presentment by semantically calling legislation something else and so they tied the legal effect of the legislation to the bicameralism and presentment requirements; If either or both are not met by the legislation, then it does not have legal effectiii. ( ALL LEGAL (legal includes rulemaking, adjudication, enforcement) ACTION BY CONGRESS MUST COMPLY W/ BICAMERALISM AND PRESENTMENT.; all forms of Legislative Veto are struck (1 house, 2 house in concurrent resolution, committee veto)iv. Normative concerns about legislative veto:

1. need impartial adjudication process

2. visibility of decisions: 2 house veto is much more salient.

3. decisions by congress are political

4. No judicial review of house/committee veto typically.

v. ADLERs Alternative holding: Congress may not adjudicate:1. Private bills or specific legislation that grants benefits

2. Congress may not pass Bills of Attainder; specific laws requiring punishment

3. PDP case? Lack of PDP in congressional proceedings?

3. Congresss Power to Appoint and Remove Administratorsa. Buckley holds that Art II 2 constrains appointment of officers of the US who have significant authority (test: rulemaking, adjudication, or enforcement) (a broad reading); so too with removal congress can not be involved in the removal of Officers of the US (except for impeachment).

4. Buckley v. Valeo, pg 190:

a. Fed. Election Comish. 6 voting members w/ 4 non-pres (2 by Speaker, 2 by Pro Temp) appointments.

i. FEC has rulemaking, adjudication, enforcement, advisement, and other powers

b. Under Appointments Clause of Art. II 2, Principal Officers of the US must be appointed by Pres w/ senate confirmation.

i. Inferior officers may be appointed by: pres alone, courts of law, heads of depts.

c. RULE: Principal Officers are persons exercising significant authority pursuant to the laws of the US, which include rulemaking, adjudication, and enforcement.

i. Test (Buckley Fn 162):

1. is the officer supervised or subject to removal by a higher power other than the president?

2. Is the extent of their tenure limited or statutorily defined3. are their duties limited or do they have Enforcement, Rulemaking, or Adjudication authority4. and jurisdiction limited. (Morrison)

ii. Since Congress appointed some of the officers, its invalid.; Congress may not make an appointmentiii. Further, the president can remove this class of demi-officer outside of the Impeachment Clause but Congress may not (However, according to Bowsher, Congress still can remove through the Impeachment Clause)

iv. ADLER thinks the court is creating a non-constitutional classification of officer, between Officer of the US and Employee of the US.

v. Also ADLER thinks that Buckley is saying that Congress may only be involved in the appointment of Officers of the US by advice and consent.

5. Bowsher v. Synar, pg 202:

a. Congress wants to cut deficit. Comptroller General was removable by joint resolution of Congress + Press sign, for cause.

i. CG would engage in executive action by requiring the president to cut spending if spending is a certain amount over a target.b. HELD: This removal power was too great and Unconstitutional under the separation of powers (which give Congress the impeachment power under Art. II 4).

i. The removal provision gives Congress retained control over the [exec] CG, but Chada said that congress had to give up control after passing the act.

ii. And the CG is an executive function (enforcement/prosecution, implementation).

iii. ADLER: Congress may only remove by Impeachment Clause if there are executive, adjudicatory, or rulemaking functions (is an Officer of the US)

6. Presidents Power to Appoint and Remove Administratorsa. Pres has more power than Congress, especially since Chadha, Buckley, and Bowsher.

b. Tests for Independent vs. Executive Agency

i. Old Test: The difference between an executive agency and an independent agency after Humphreys Executor is whether Congress has limited the removal power of the president regarding the officer to for cause UNLESS the agency only has executive functions (then by definition it is an executive agency).

ii. New Test: Humphreys Test plus Congress cannot impede the Press ability to fulfill a constitutional duty (first seen in Myers, later confirmed in Morrison)c. Whats the Constitutional Basis for attacks on restrictions on the Press removal power?

i. Art. II 1 vests executive power in the president.

ii. Art. II 3 pres shall take care that the laws be faithfully executed.

d. How do you know if these provisions are violated?i. Myers test: Postmaster removable only with consent of senate (INVALID restriction)ii. Humphreys test: independent agency status (insulation from pres removal at will) if agency is purely executive. (bright line test)

1. given this test, the agency is fine here because: Here, the office was very independent and non-partisan, so supposed to be free from interference. The agencys function wasnt purely executive. But meant to exercise judgment w.o hindrance or leave of any other government official.

iii. But The Morrison test: changes the doctrine: Fuzzy test: Does a restriction on presidential removal impede the Presidents ability to fulfill his constitutional duty. This is a much more open ended test balance the pros/cons of press control.

7. Humphreys Executor v. U.S., pg 220: (old test: Congress can limit Press power to remove when necessary to create independent quasi-agencies)

a. Humphry appointed comish of FTC by Hoover, FDR then asks him to step down.

b. Under act, pres can only remove for cause. Here there was no cause.

c. Court Holds that presidents power to remove can be limited by Congress depending upon the nature of the officer.

i. Here, the office was very independent and non-partisan, so supposed to be free from interference. The agencys function wasnt purely executive. But meant to exercise judgment w.o hindrance or leave of any other government official.

d. Humphreys (OLD) test: if not an agency is purely executive, then it may be independent (and therefore no removal power w/o cause could be imposed).

8. Morrison v. Olsen, pg 231:

a. Independent counsel case: removable by Atty General for cause. IC appointed by special division ct (an art III ct set up by congress).

i. Indep. Counsels functions are purely executive in nature (prosecutions and enforcement). But he wasnt removable at will.

b. Since this is a purely executive function under Humphreys Executor, it should be an executive agency (and plenary removal power). But this isnt what the court holds.

c. The new test: Does a restriction on presidential removal impede the Presidents ability to fulfill his constitutional duty. This is a much more open ended test. ADLER SAYS BALANCE the pros/cons of press control.

i. Pros:

1. Democratic legitimacy of the Presidents connection

2. Corrects different kinds of agency pathologies (interest group capture vs. the Presidents interest in efficiency)

ii. Cons:

1. Agency not oversight

2. Conflict of Interest

3. Inefficiency

iii. Here, the indep counsels power is so limited, and isnt central to the functioning of the executive branch.

d. Also ADLER: Rulemaking and Enforcement should be in two separate agencies while Adjudication can fall into either

9. Whats the right test for Art. II 1, Art II. 3?a. Morrison: impede press ability.

b. Humphrys: purely executive. Bright line test. Once you add adjudication/rulemaking, then not purely executive.

For Pres ControlAgainst Pres Control

democratic legitimacy of president.

Pres oversight enhances accuracy of agency decision making (cost-benefit: pres may be better at taking into account the value to citizens as a whole pres oversight interferes with agency expertise.

Inappropriate where agency adjudicates

Conflict of interest (Indep. Counsel)

c. Morisson purely executive function, not removable at will by pres. The court changes the test from Humphreys to whether the restriction on removal impedes the presidents ability to fulfill his constitutional duty.

d. Adler thinks we ( need a good idea of where we want the president involved in agencies.

e. It seems the court will apply this with a good deal of deference (like the non-delegation cases).

f. Also, the inferior officer distinction, the court has recently shown that the first reason given by the Morrison court is perhaps the most important.

g. Note the difference in power (pres seems to have more) and this is interesting from a representativeness perspective. Also from a delegation perspective, congress delegates oversight, seemingly to the president:

i. some think that the pres is more majoritarian

1. but thats really only when congress acts in its sub-unit ways

2. and even tho pres is national election winner, its still an electoral college.

ii. Also, presidents veto power can he order agencies to do something, and perhaps overrule their rulings.

10. Regulatory Review and Presidents Executive Order Power10.1 Department of Justice Memo for Stockman

Presidents control of the Administrative Agency heads is subject to legislation passed by Congress and must conform both substantively and procedurally

Yet, the legislation cannot supersede Presidential authority under the Constitution to faithfully execute the laws

Independent agency heads may only be removed for cause (but the President does get to select them for appointment at will)

10.2 Shane: Political Accountability in a System of Checks and Balances: The Case of Presidential Review of Rulemaking

CBA and OMB requirements apply to all agencies, even independents, during the Reagan administration; Clinton then limited this to a time requirement and OMB cannot hold up indefinitely regulations based on a delayed CBA.

Clinton also develops sunshine laws to show the pressures exerted on OMB.

10.3 Kagan: Presidential Administration

The Presidents standing among the public (popularity) affects his ability to effectuate his regulatory agenda

Try to balance between agency ossification and overzealousness

See the table below for scope of presidential power to influence agencies by EO (Yes for Executive Agencies; No for the Independent Agencies)10.4 Agency Organization

10.4.1 Head: Principal Officer of the US

10.4.2 Inferior Officers of the US

10.4.3 Employees: Employees of the US11. Executive Orders: very little case law.

a. EO power reconcilable with Youngstown (Shot down Trumans EO power to stop strikes in steel mills)?

i. Yes, because, the organic agency statutes were imagining here delegates rulemaking power to someone (e.g., State-Farm to NHTSA). In Youngstown, there was no statutory authorization for president or sec of commerce to step in to the steel mills. So that was dealing with could someone do that Our case is concerned with can the president do that.

b. Scope of EO Power:

c. Issue 1: When does the Pres have an EO poweri. Statute addressed to Pres:

1. Congress can give Pres specific duties, as long as it doesnt conflict w/ an explicit Constitutional provision (Schechter)

2. Pres can delegate then to agency but retain EO power under the Sub-Delegation Act 3 USC 301.

ii. Statue addressed to Agency:

Scope of Presidential EO Power

Traditional ViewUnitary Exec. ViewKagan/Adler View

Executive Agency (agency head removable at will)NO EO power, unless the statute delegates EO power to the president in that areaYes, has EO power.YES

Independent Agency (removable for cause)NO EO power, unless the statute delegates EO power to the president in that areaYes, Has EO power (contra Morrison) unless explicitly limited by Congress.Presume NO. But the organic statute can grant. There are also non-legal pressures on agency head to follow president.; So EO power follows Presidents ability to remove administrators at will.

d. Issue 2: Assuming duly given EO, what is the effect of an EO on Judicial Review? To what extent does this power affect 706(2)(C) [in excess of statutory authority] and 706(2)(A) review?

i. If theres a Clear violation of statute: If an agency has committed a clear violation of its statute due to an EO, the EO will not effect 706(2)(C) review, because agencies are bound FIRST by the statute, and courts must fulfill their statutory duties notwithstanding presidential orders!

1. President cant override laws passed by Cong. (Marbury and Kendell)

a. Youngstown (Congressional Pre-Emption of EO power)

i. The President has EO power if the Constitution grants him a power (of if granted by Congress) e.g., EO power necessary to enforce a Cong. or Cons. Power

ii. Presidential action cannot contradict Congress express or implied policy (subject to Constitutional grant of power making Congress act uncons.)iii. There are independent powers which are allowed if Congress is inert, indifferent, or quiescent (implicit authorization)

2. This issue is mooted by Chevron. Which says that courts should give deference to agency interpretation of the statute.

ii. For 706(2)(A) A&C review (which states that agency must engage in reasoned decision-making). This is normally aggressive review.

1. Adler believes that EO does trump 706(2)A review because this is an additional check on the agency, not the president. EOs are public and published formal orders. The public and obvious reasons given (the EO) makes this a little unnecessary. Held this in Franklin.

e. Do the 553 Requirements (notice and comment, etc.) also apply when theres an EO? Adler isnt sure.

f. The president also has the power to gather info through the Opinions in Writing Clause of the Constitution Article II 3.: could garner enough information from other agencies or lower agency staff in order to find a cause for removal

g. NB: ( President can issue a general executive order that can be applied in all adjudications, but not a case-specific order. Otherwise theres a PDP issue.

12. EO 12,866: Pres requires agencies to adopt regulatory analysis for all major rules (a CBA). Enforced by OMB.

a. As effective currently by 13,422:

b. Applies to:

i. Executive Agencies but not Independent Agencies

ii. Legislative Rules issued in internal rulemakings

iii. Formal Rulemaking

c. Requires:

i. Substantive

1. Section 1(b)(6) of 13,422: Agency rules must satisfy CBA standard

a. Presumption against Congressional Intent that when delegation is to lower executive agency that Congress would have intended that the President cannot make rules

b. 13,422 makes sure to incorporate this concern by saying that the requirement only applies as is consistent with the law

ii. Procedural

1. Section 6 of 13,422: For sufficiently major rules (>$100M in costs), then the agency has to prepare a document for review by OMB (OMB REVIEW)

a. Resolution of conflicts provision: if OMB and Agency cannot agree on CBA standard, then it depends on agency discretion to issue rule

i. Resolution is by President and Chief of Staff (under Bush)

ii. Is not Judicially Enforceable; President and OMB enforces order, not the courts

13. Informal Control a. Presidential Contacts: governed by 557(d) and PDP

b. Congressional Contacts: 557(d), PDP, and DC Federation (p. 575) (1. Content of pressure is designed to force decision upon factors not relevant in the organic or relevant statute and 2. the pressure was a factor in the agencys decision) in which Congress pressured agency to make decision, and pressure was effective. Ct said this was OK. (ADLER: 557(d) does not exempt Congress).i. ( only constraints are PDP and 557(d)

ii. Sierra Club:

1. Comments ok if not of central relevance to the outcome of the rule

2. If comments are centrally relevant, they must be placed into the docket, then ok

c. EX Parte Contacts:

i. President is considered an interested person outside the agency under 557(d), which governs only formal adjudication/rulemaking (so doesnt apply to informal)

ii. Executive Orders arent covered by 557 because they are published and public.

iii. But, in informal adjudication, theres still a PDP claim

iv. Informal rulemaking: ex parte generally allowed. (Sierra Club v. Costle)

d. Sierra Club v. Costle, pg 563:

i. EPA informal rule about coal emissions. ACT provides that EPA can put doc in the record after comment period is over and to define which docs are of central relevance and thus need to be included.

ii. (NB, this is more inclusive than the Nova Scotia requirement [in which only docs relied upon had to be included].

iii. s challenge ex-parte contacts with Pres and Congress (Sen. Byrd).

iv. RULE: informal rulemaking doesnt prohibit ex pare contacts by Congress or the Pres. b/c lobbying efforts are crucial to rulemaking.

1. Unless expressly forbidden by Congress, intra-executive contacts may take place during and after the comment period. Presidential prodding is part of process congress envisioned.

v. Since this is informal rulemaking, 557(d) bar on ex parte contacts doesnt come into play (no ban on ex parte communication in informal rulemaking).

vi. NB: while this may seem undemocratic, decisions are still subject to 706(2)(a) and 553 review.

XI. Judicial Review:

1. Scope of Review: (706, Chevron, Mead, Overton Park)

a. Under VT Yankee and Pension Benefit, court will defer to agencies when interpreting procedural decisions.

b. Under Chevron, if Congress expressly or implicitly delegated law-interpreting power to the agency, court must follow any reasonable agency (substantive) interpretation of an ambiguous statute. This is strong deference.

c. Chevron applies to independent and exec agencies and adjudication and rule-making, but not to informal adjudication (Mead). Chevron should apply where agency decision has force of law doesnt have to be legally binding, tho; this basically means when decision was adopted/issued in relatively formal way; and other various factors (not indicated what they are); also, Chevron does not apply to multi-agency statutes, such as the APAd. If no Chevron deference (Informal Adjudication), then they get Skidmore deference.

Force of LawRelatively Formal Proceeding?Chevron Applies?

Formal AdjudicationYes, orderYesYes

Formal RulemakingYesYesYes

Informal AdjudicationYesNOProb Not Skidmore

Informal RulemakingYes Yes see Nova Scotia, Heckler n & c, etc.Yes

Interpretive StatementsMaybeMaybeMaybe

PROCEDURAL challenges 706(2)(D)Under Vermont Yankee and Pension Benefit, agency will have deference on procedural challenges: BUT: agency doesnt even have to have an elaborate procedure to issue this procedural rule b/c 553 only applies to substantive procedural rules. Thus, maybe only deference to non-substantive procedural rules.

2. Record and Substantial Evidence3. Threshold issues: (see below)a. Cause of action- 702

b. Jurisdiction

c. Sovereign immunity

d. Reviewability - 701(a) Overton Park

i. 701(a)(1) congress expressed intent in statute to prohibit judicial review (Robison)

ii. 701(a)(2) - (statute is broad [no law to apply], but agency action is committed to agency discretion by law) but this probably means that the court has authority to identify special circumstances in the course of developing its own principles of reviewability (Webster v. Doe) and when agency fails to enforce. Only if there are specific statutory guidelines requiring enforcement, or colorable constitutional challenge does 701(a)(2) not bar review.

e. Standing

f. Timing

i. Finality 704

ii. Ripeness

1. Fitness of the issues for immediate review

2. Hardship to the parties that would result if the court withheld review

iii. Exhaustion

4. Why deference to agency? expertise; agencies are accountable to president; easier to draw line with a clear error test.

5. SCOPE OF REVIEW: a. 706:

i. 2(a) a&c doesnt rely on organic statute but rather on agency actionsii. 2(b) constitutional challenges

1. 1st Amendment

2. Non-delegation

3. PDP

4. Presentment

5. Appointment

6. Etc.

iii. 2(c) substantive statutory claims (usually organic statute) agency deference in Chevroniv. 2(d) procedural statutory claims agency gets deference from VT Yankee and Pension Benefit and SEC v. Cheneryv. 2(e): Hearst6. Chevron v. NRDC, pg 795: deference to agency in substantively interpreting organic statute

a. Clean air act says count stationary source. EPA says entire plant (and not smoke stack) is one source.

b. Two part test:

c. Chevron Part 1: Court decides if congress has given in the statute a clear plain meaning. This is a clear error test of high deference.

i. INS v. Cardoza-Fonseca, pg 815: court can use the traditional tools of statutory construction (text of legislation (plain meaning of language), dictionary, structure of the legislation, legislative history, purpose, etc.) can come into play in step 1 if relevant.

1. NB, this can cause some interpretative error, so text and structure are/should be given primacy.

2. But if the legislative history is super clear, even if text is clear the opposite way, then you can use that: see Zuni Public Schools.

ii. Procedural challenge: see VT Yankee and Pension benefit for agency deference. Chevron applies and extends this deference to substantive interpretations.

iii. (If there is clear meaning and agencys interpretation differs, Ct will reverse. If not plain meaning, court will move to step 2.

d. Chevron Part 2: Court should determine whether the agencys interpretation is a reasonable interpretation. Court shouldnt apply its preferred interpretation, just see if agencys is reasonable.

i. 706(2)(A) review to determine if reasonable: hard to see how its a second step.

ii. U.S. v. Shimer: if the accommodation of conflicting policies were committed to the agencys care by the statute, it may only be disturbed if it appears from the statute or its legislative history that the accommodation reached by the agency is one that Congress would not have sanctioned

7. U.S. v. Mead Corp., pg 802: (Chevron deference doesnt apply to informal adjudication)

a. Customs service issued an informal order.

b. Whether Chevron applies depends on:

i. Whether agency decision has the force of law

1. (all rulemaking adjudication has force of law, though, but interpretive rules probably dont).

ii. Whether agency decision was adopted/issued in a relatively formal way

1. all but informal adjudication and interpretative rules are in a relatively formal way. Informal rulemaking is pretty formal (see Nova Scotia).

iii. Other (unspecified) factors.

iv. The level of deference to give is Skidmore deference: agency interpretations are entitled to respectbut only to the extent that those interpretations have the power to persuade.v. ADLER: So the deference given is only for the procedures the agency decides upon and not the substantive result

8. Agency Records:InformalFormal

OrdersThe Actual Record (material, public or non-public) on which the agency actually relied (BUT NO INDEPENDENT REQUIREMENT OF A FORMAL RECORD)Record under 556(e) is the basis for JR

Legislative Rules553 and Nova Scotia requirements (no requirement for a record) BUT there must be a right to comment; adequate response to comment, disclosure for comment of evidence agency used for decision, articulation requirementRecord under 556(e) is the basis for JR

InformalFormalAgencys Reasons Requirement?

Orders706(2)(a) just looks to see that the choice was not made A&C, abuse of discretion or otherwise not in accordance with the law; the court is not empowered to substitute its own judgmentthis means that the agency is subject to more requirements in this box than for FA, IR, or FR; PBGC cut back on this requirement and said that the preferred course is to remand to the agency for a statement of reasons (as long as not post hoc rationalizations need to be reasons relied upon at the time of the decision)557(c): opinion must be provided

Legislative Rules553(c): look at statement of basis or purpose of the rule557(c): opinion must be provided

9. Citizens to Preserve Overton Park v. Volpe, pg 784: 706 review should be done on the full administrative record before the agency at the time the decision is made, not post-hoc rationalizations; This comports with and will prove the State Farm requirement that the agency considered the alternatives:a. FORMAL RULEMAKING: Record mandatory under 556(e) Same in 557(c)- need statement of reasons and rule.

b. FORMAL ADJUDIATION: Record mandatory under 556(e) Same in 557(c)- need statement of reasons and rule.

c. INFORMAL RULEMAKING: Record NOT mandatory but 553(c) & Nova Scotia (agency must release information agency relied upon) de facto requires some information (right to comment, disclosure for comment of evidence agency used for decision), which is required by Overton Park. (articulation of statement of basis of decision)d. INFORMAL ADJUDICATION:

i. Not usually supposed to take affidavits So how is this record supposed to be made? Agency isnt supposed to rely on them (publicly) and make them public at the time, but is supposed to show them on review as what you relied on then.

ii. But PBGC said preferred course of action is to remand to the agency for a determination of its reasoning at the time of decisioniii. The agency has discretion according to the APA whether to release a record or not; there may be PDP violations in not having a record

10. Substantial Evidence - 706(2)(E) (applies only to formal rulemaking/adjudication)11. 706(2)(E) agency decisions in formal adj and rulemaking only are to be supported by substantial evidence.

a. NLRB v. Hearst, pg 825 pre APA.

i. Agency disagrees, but after formal adjudication, issues order to recognize newsboys as employees; upheld under substantial evidence standard of JR where there must be warrant in the record and a reasonable basis in the law, something more than a mere scintilla or such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.b. What does it do thats additional to 706(2)(A) and (C) challenges?

c. 706(2)(C) challenge saying that the agencys interpretation substantively violates the (meaning of the) statute

i. If inconsistent w/ statute (after Chevron deference), then reverse here.; but Standard of Review of the statute itself is de novoii. See if A&C, if reversed, remand to agency for determination of the reasoning of decision

d. 706(2)(A) arb and capricious challenge:

i. Maybe can claim that agency ruled against weight of evidence? (scintilla method). NOPE! 706(2)(A) already looks to the whole record (see State Farm).

e. ( Adler thinks probably doesnt do any more than just increase the level of scrutiny and decreases the amount of deference given to agency decisions.

i. Levels of deference: 1) De novo review by court (least deferential); 2) = Clear Error; 3)706(2)(E) there must be warrant in the record and a reasonable basis in the law, something more than a mere scintilla or such relevant evidence as a reasonable mind might accept as adequate to support a conclusion (Consolidated Edison Co. v. NRLB); 4) Chevron Deference 706(2)(A and C); 5) Anything goes? (most deferential).

12. Cause of Action - 702a. Organic statute may have a cause of action, but often there isnt. But, APA 702 provides the cause of action to a person suffering legal wrong because of agency action. APA 551 defines agency action as a rule (formulating, amending, or repealing a rule), order (agency process for the formulation of an order), or license (whole or a part of an agency permit, certificate, approval, registration, charter, membership, statutory exemption or other form of permission), or the denial thereof or failure to act.; this is the backstop cause of action; almost always creates a cause of action for an aggrieved party13. Standinga. See Mass. v. EPA.14. Jurisdictiona. District ct under general jx of the court, unless statute specifies otherwise

b. 703: First consideration is the jx stated by the organic statute, but then under 28 U.S.C. 1331 (Federal Question Jurisdiction)15. Sovereign Immunitya. In Overton Park, Volpe is sec. of trans. Why isnt sovereign immunity a problem? Because 702 says seeking relief other than money damages against state official waives sovereign immunity. Claims for benefits arent really money damages.

b. 702: Action for relief other than money damages names the official as the designated defendant to waive sovereign immunity (declaratory relief or injunction generally)16. Reviewability Timing, and other Threshold Issuesa. Refer to 701

b. Limitations arent constitutionally problematic:

i. This bar or preclusion isnt constitutionally problematic (ok under Art III, sup cts limited jx and congresss right to say what can go in district cts; and as far PDP claim goes, not very successful).

c. Constitutional challenges: 706(2)(b)

d. Non-constitutional challenges: 706(2)(A); Statute: substantive (706(2c) procedural (706(2d); APA 553-57.

17. 701(a)(1): congress expressed intent in statute to prohibit judicial review

a. Can look to language / other relevant sources of interpretation to see if you can review; can be implicit if review is channeled away from the courtsb. Constitutional challenges will be allowed barring another clear statement intending that they are precluded: statute barring judicial review will NOT be read to bar review of constitutional challenges absent a clear statement to the contrary.

i. This is because the constitutional challenge (in Robison) was against Congress who limited benefits not to conscientious objectors.

c. Johnson v. Robison, pg 878i. was denied application for educational assistance as a veteran because he was a conscientious objector (and completed alternative civil service).

ii. Court held that 38 USC 211(a) (non-review provision) DID NOT bar Constitutional challenges (under 1A and EP) under 706(2)(B).1. If the statute had been read to bar constitutional challenges, then there would have been serious constitutional concerns with the statute; the policy of SCOTUS (Marbury) is to read a statute (if possible) as not constitutionally defective and so this statute was able to be read as not barring constitutional challenges review

iii. Keep in mind that review can be barred if the statute confers discretion on the agency. The statute here barred challenges under the statute (though not Constitutional challenges).

18. 701(a)(2):

a. No judicial review when agency action is committed to agency discretion by law Black Letter Law: claim isnt reviewable when there is no law to apply. i. Even where congress hasnt affirmatively said no judicial review, theres no review when there isnt any standard against which to judge the agencys exercise of discretion. Also bars a challenge to non-enforcement (Chaney) unless organic statute permits it.

b. Scalia/ Adler thinks this is misleading because theres always law to apply every statute has content and 706(2)(A) creates content.

i. ( Cant be a no law apply test

ii. Cant be a some discretion test

c. ( Probably something like the court sets up its own set of principles to use

i. ( this probably means that the court has authority to identify special circumstances in the course of developing its own principles of reviewability.

d. Webster v. Doe, pg 895:

i. CIA director fired gay guy. Statute (National Security Act section 102): director can fire whenever necessary to or advisable in the interests of the US

ii. Statutes language and structure indicate that its directors discretion so 706(2)(a) claim is barred by 701(a)(1&2)1. Text:

a. when director deems it necessary for national security. The use of deems strongly implies agency discretion.

2. Structure also adds support.

3. Very open-ended

4. And content/ context (national security) provide special circumstances that allow the court to duck out.iii. But Constitutional Claims arent barred under Robison1. Scalias dissent in Webster is much more accurate (see above)19. Decision not to issue rule:

a. Heckler v. Chaney, pg 922: (agencys refusal to enforce is unreviewable)

i. 701(A)(2) bars review of non-enforcement, because court should have deference to agencys decisions not to prosecute or enforce.

1. Agency has expertise to do the balancing test

2. Its like the prosecutorial discretion

3. (ADLER thinks these reasons are b.s: same thing was at play in State Farm, and the real reason is that its hard and worries the court to find some reasoning in the agency b/c theres no requirement); 551 views agency non-action as an action as well; but this doesnt control in this case (not enforcing rules is subject to agency discretion and is not an action); presume that non-enforcement = non-reviewable.

a. Action:

i. Issuing Rule

ii. Issuing Order

iii. Repealing a Rule

iv. Rescinding an Order

b. Non Action:

i. Not choosing to enforce a rule/order

ii. Different from State Farm because state farm had agency action because the agency passed a rule, then got rid of it. Here, it never did anything legal.

iii. Court wants to not give review in non-enforcement to incentivise the agency to consider lots of new rules (that they may or may not enforce)1. Reasoning:

a. Decision not to enforce involves complicated balancing

b. Nonenforcement does not involve coercion

c. Prosecutorial discretion

20. Decision not to enact rule:

a. Amer. Horse Protection Assn. v. Lyng, pg 934: failure to enact rule is not presumptively unreviewable.

i. Agency decides not to change rule even tho its found to not cover devises that sore horses.

ii. Distinguished from Heckler v. Chaney:

1. Difference between issuing rules to fulfill statutory mandate and enforcement.

2. 553(e) allows interested parties to petition for change/issuance/repeal of rule, and when denied, agency must give a brief statement for grounds of denial (555(e)).

a. NB:!! 555(e) is only in connection with an ongoing agency proceeding!!! The court effectively ignored this part of 555(e). So theres a broad rule that interested parties are now forcing agencies to consider all this crap, even if theres no ongoing proceeding!

i. Adler thinks this is bullshit: This should NOT be taken as a right to petition for a rule and be entitled to some response. But that seems to be the case now after Mass. v. EPA, handout. EPA v. Massachusetts allows a private right of action when an agency refuses to issue a rule that is necessary to fulfill a requirement of a Congressional statute (mandate)iii. Holds: that 701(a)(2) doesnt bar review of the failure to make rules. Chaney doesnt apply.

Reviewable Agency Choices (actions, agency has done something which is legally effective):Non-Reviewable Agency Choices:

Issuance of Order (Overton Park)Agency inaction

Issuance of Rule (Nova Scotia)Agency non-enforcement

Repeal of Rule (State Farm)

Repeal of Order

Constitutional challenge (unless statute clearly says otherwise [Robison])

Non-enactment of Rule when necessary for statute enforcement (Lyng)

21. Timing Finality & Ripenessa. FINALITY: 704 (final agency action)

i. agency has completed its decision-making process and the decision determines legal rights and duties

ii. Practically, the issuance and repeal of legislative rules and of orders is going to be final.

1. interpretative rule (some cts have found to be final b/c they can have impact)

2. agency decision to commence an adjudication or investigation (or in theory a rulemaking) more of an issue

b. Franklin v. Massachusetts, handouti. Bureau of Census (Dept. Commerce) takes the census, Sec. of Comm. transmits the report to Pres (agency action, but not final), who reports to Congress (final action, but pres is not agency). Challenge under 706(2a) A&C and constitutional challenge (Overcounting of the census clause b/c Secretary counts overseas personnelii. Secretarys report carries no direct consequences for the reapportionment, it serves more like a tentative recommendation than a final and binding determination. (This is the FRANKLIN TEST for finality)1. Direct and Immediate impact on day to day business required (Abbott) but not found

iii. Court holds that not a final agency action so cant review

c. RIPENESS:

i. Purpose: Prevent the courts, through avoiding premature adjudication, from entangling themselves in abstract disagreements over administrative policies; And to protect agencies from judicial interference until administrative decision has been reached and its effects felt in a concrete way upon challenging parties

ii. Is the legal issue appropriately fit for adjudication at this time

1. Burden

2. Time to challenge or does agency have to act first (OP)

d. TEST:

i. Fitness of the issues for immediate review

1. Should be a question of law, not fact or discretion.

2. Would the reviewing benefit from postponement?

3. Is there something that changes between: (1) Rulemaking --- (2) Pre Enforcement Challenge ---- (3) enforcement challenge.

a. a 706(2)(c) at pre-enforcement Challenge seems to be a purely legal question for the court (abbot labs)

b. 706(2)(a) A & C challenge?

i. Overton Park: need the agency record at the time! So adding new evidence after the rulemaking isnt changing anything!; ADLER: Generally, for purposes of 702, causes of action should be fit

4. Abbott Labs is a conduct regulating rule (that is, it imposes a duty backed by sanctions) while Toilet Goods, the rule does not regulate conduct but simply says that agency may impose order (sanctions)

a. These may also be distinguished by their benefit conferring property (Reno); There was no benefit to Toilet conferred (nor in Abbott but one could be taken away).ii. Hardship to the parties that would result if the court withheld review.

1. loss of goodwill, crim penalties, heavy reliance, etc.

2. When you move to benefit conferring rules, a pre-enforcement challenge might fail because no hardship.e. Abbott Labs v. Gardner, pg 961, handouti. Facts:

1. FDA says formal drug name has to be at least half as large as the proprietary name.; FDA requires through a LR that the company post the generic name of drug in labeling and advertising for the brand nameii. Fitness for review: 1. The challenge came before enforcement of the rule actually occurred

2. All thats left is a purely legal question (Storer); the court believes the regulations at issue are final agency action (have finality as required in 704) and nothing more will come before enforcement.

iii. Hardship to the parties:

1. Failure to comply will result in crim penalties, confiscation, loss of goodwill.

iv. ( Ripe.f. Toilet Goods Assn. v. Gardner, pg 968, handouti. Facts:

1. Companies have to get FDA approval to use coloring in their goods; FDA rule requires inspection of facilities in order to determine compliance with the rule and if inspection is denied, then approval to use may be denied (suspended)ii. Fitness for review:

1. ADLER SAYS YES: But: Not at this point; FDA only may suspend certifications, and it could better decide in legal framework of concrete challenge to look at FDAs enforcement problems and the risk of trade secret disclosure.

iii. Hardship to the parties:

1. No hardship to the party.; no general public interest; compliance costs do not matter (expenditures in the interim to comply with a rule that may be struck down during a proceeding in which a defense of of 706(2)(a) or (c) were raised)iv. ( not ripe.

EXTRAS:

22. The president is not an agency for purposes of the APA.

a. 701-06: 701(B) defines agency and says each authority of the govt of the US, excluding congress, the courts, and some others (not specifically the pres).

b. Note that in 551 Same definition of agency.

c. President is still subject as an outside the agency person to the ex parte contact restraints of 557d

d. In relation to EO powers:

i. If Act addressed to Pres, pres can do what he wants and cant make a 553 challenge and cant have a 702 cause of action.

ii. Franklin in this case may mean that pres isnt bound by 553 and president cannot be sued under 702 cause of action.

1. By extension, when addressed to sec. of transportation, eg, and Sec repeals on an EO power, the parties would sue the sec.

a. Can you read Franklin to say that the suit should be dismissed?

i. Adler thinks NO. In this case we do have an agency (the sec.) and the fact of an E.O. isnt gonna mean that a clear 706(2)(C) disappears. When pres steps in, assuming eo power, still an agency.

23. 706(2)(A) Arbitrary and Capricious:

a. Court should engage in a substantial inquiry with thorough, in-depth review (Overton Park).

i. First see if its committed to agency discretion (you can tell by interpreting the statute), and thus Chevron would apply.

ii. Were all the relevant factors considered? The Whole administrative record?

b. Should only reverse if agencys decision was unreasonable: a clear error of judgment. Overton Park.

c. Policy decisions in legislative rules (think State Farms rule to get rid of seat belts [look above]) can be reviewed for arbitrary and capricious adoption.

i. There needs to be actual, contemporaneous rationality. Not a minimum of rationality.

1. In state farm, eg, the agency (among other things) didnt say why they couldnt just change the rule to just require air bags.

2. explain the evidence available and offer a rational connection between the facts found and the choice made.

- recession of rule must be supported as well as promulgation of rule

- agency must make "rational connection between facts found and choice made"

- must consider alternatives

- decision must be supported by record, no post hoc rationalizations

Arbitrary & capricious if:

Failed to consider relevant factors

considered irrelevant factors

counter to evidence

implausible

failed to offer explanation

no rational connection between facts found and choice made

d. 706(2)(A)

i. Isnt a source of participatory procedures. Vt Yankee, Pension Benefit.Formal Adj. 554, 556, 557

553 informal rulemaking

Grid Rule

Claimant

Statute

Cut Off!

Goldberg v. Kelly: s welfare benefits terminated before oral hearing; DP was 1) caseworker determination, 2) notify beneficiary of termination, 3) allow 7 days for beneficiary to respond by letter to the supervisor of the caseworker (reviewing official), 4) right to a post-termination fair hearing before an ALJ, 5) JR of decision

Friendlys List:

An unbiased tribunal

Notice of the proposed action and the grounds asserted for it

An opportunity to present reasons why proposed action should not be taken

The right to call witnesses

The right to know evidence against oneself

The right to have a decision based exclusively on the evidence presented

The right to counsel (NOT REQUIRED BY GOLDBERG)

The making of a record (see APA)

The availability of a statement of reasons for the decision (see APA)

Public attendance (NOT REQUIRED BY GOLDBERG)

Judicial review (see scope of review)

Timing

Roth: , teacher, wasnt rehired and there was no reason and no review

Perry v. Sinderman: Property interest generated implicitly from rehiring practice of teachers that wasnt done here.

Loudermill: , security guard lies on application, fired w/o pre-termination hearing. Can only be fired for cause according to state law. However, DP rests on the Constitution. A government employee has a high level of private interest in his job.

Matthews v. Eldridge: SSA disability recipient had benefits terminated; only post-termination hearing allowed, pre-term written submission is okay. The private interest in disability payments is less than the Goldberg interest in survival (by welfare benefits).

PSCO operates nuclear power plant, wants permit from EPA; claims violations of APA. EPA: APA doesnt apply. EPA Admin requested addl info from PSCO about backflushing, gave other parties the opportunity to comment on PSCOs submission, and stated that he would hold another hearing if requested. A hearing was requested and denied. The Administrator made a final decision following the technical panels recommendations and, with the additional information submitted, reversed the Regional Administrators decision.

Compare with U.S. v. Florida East Coast Railway, pg 387 (for triggering Formal Rulemaking; requires hearing on the record alone hearing and public hearing are insufficient.)

Richardson v. Perales: SSA denies benefits to disabled truck driver using substantial evidence standard, based on written medical reports in the face of opposing oral testimony. SC holds written medical reports are admissible even though hearsay rule. Cross-examination only allowed for full and true disclosure. DP not implicated when failed to request subpoenas.

Pension Benefit v. LTV: LTV could no longer fund its pension, so PBGC terminated and took on these plans, at a lower level. LTV then negotiated and made some follow-on plans that made up the difference. PBGC finds the follow on plans to be an abuse b/c of drain on trust fund. PBGC issued to LTV that it was restoring the pension plans because of LTVs changed circumstances (i.e., pulling out of financial trouble). LTV Refused to comply. PBGC did not have any real procedures: it didnt apprise LTV of the material on which it was to base its decision, didnt give LTV adequate opportunity to offer contrary evidence, nor did it provide statement showing its reasoning

Motor Vehicle Manufacturers Association of U.S., Inc. v. State Farm Mutual Automobile Insurance Co., pg 520; Issue: Passive restraint rules requiring seatbelts and airbags promulgated, finalized in 1977 and then repealed without a rulemaking in 1981; NHTSA allowed to issue standards that meet the need for safety; can NHTSA repeal a rule without a further rule making

U.S. v. Nova Scotia Food Products Corp., pg 535; Issue: TTS rule promulgated without disclosure of the scientific basis on which the requirement was developed and no response to comments saying that TTS is commercially infeasible.

Vermont Yankee Nuclear Power Corp. v. Natural Resources Defense Council, Inc., pg 550; Nuclear Regulatory Commission sets relevancy of evidence of disposal at nuclear power plants at 0 and allows license, NRDC wants to be able to orally present (which it did) and cross examine the hearing, which began a rulemaking process for disposal of nuclear waste

Humphreys Executor validated that agencies could make rules or adjudicate; this was reaffirmed in NRLB v. Wyman-Gordon (but with an admonishment that a rule rather than order should be made), and finally given full force in NRLB v. Bell Aerospace, where the NRLB was allowed a significant change in policy under its discretion during an adjudication, subject to the caveats that 1) the diversity and complexity of a problem may a