Allocation of Powerslegalnook.com/olf/7bdb79e88eda81bd62673ea77f6ec50eb12edba2.… · Formal...

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Can divide our semester up into 3 parts ----- See Powerpoint Can bring our casebook and any outlines we have prepared Design & Political Control I. the constitutional and procedural law that regulates agencies of government other than legislatures and courts The source of agency powers The exercise of agency powers The control of agency powers by the legislature, the executive, and the judiciary It is about … Admin Law is… Identification of a problem Agency is one possible response Identification of possibile solutions Identification of stakeholders and their interests Why Agencies? An agency has its origin in enabling legislation Line or independent agency? Single or collective head? Issues of form Research and publicity Rulemaking Licensing Investigation and enforcement Adjudication Ratemaking Issues of Function That legislation has to deal with: Design Lesson 1 - Introduction Moribund at federal level Alive and well at the state level The premise that a legislature may delegate its powers to an agency only under carefully controlled conditions expressly set out in the enabling act Has its origin in separation of powers One constraint on the legislation is the Non-delegation Doctrine Enabling Legislation Allocation of Powers federal state local legislative executive judicial F E D E R A L I S M H O M E R U L E SEPARATION OF POWERS Allocation of Powers Lesson 2 - Delegation Doctrine Form of exam will be about the same as ones on TWEN State Fed Rule Adj We will get the full instructions and the common fact pattern a few days before the exam…some facts that are more discreet will not be given FINAL EXAM: Final Review Wednesday, December 01, 2010 10:35 AM FINAL Page 1
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Transcript of Allocation of Powerslegalnook.com/olf/7bdb79e88eda81bd62673ea77f6ec50eb12edba2.… · Formal...

  • Can divide our semester up into 3 parts ----- See PowerpointCan bring our casebook and any outlines we have prepared

    Design & Political ControlI.

    the constitutional and procedural law that regulates agencies of government other than legislatures and courts

    The source of agency powers◊

    The exercise of agency powers◊

    The control of agency powers by the legislature, the executive, and the judiciary ◊

    It is about …

    Admin Law is…

    Identification of a problem

    Agency is one possible response ◊

    Identification of possibile solutions

    Identification of stakeholders and their interests

    Why Agencies?

    An agency has its origin in enabling legislation

    Line or independent agency? ►Single or collective head?►

    Issues of form◊

    Research and publicity ►Rulemaking ►Licensing ►Investigation and enforcement ►Adjudication ►Ratemaking►

    Issues of Function◊

    That legislation has to deal with:

    Design

    Lesson 1 - Introduction

    Moribund at federal level○

    Alive and well at the state level○

    The premise that a legislature may delegate its powers to an agency only under carefully controlled conditions expressly set out in the enabling act

    Has its origin in separation of powers•

    One constraint on the legislation is the Non-delegation Doctrine Enabling Legislation

    Allocation of Powers

    federal

    state

    local

    legislative executive judicial

    F E D E R A L I S M

    H O M E R U L E

    SEPARATION OF POWERS

    Allocation of Powers

    Lesson 2 - Delegation Doctrine

    Form of exam will be about the same as ones on TWEN

    State Fed

    Rule

    Adj

    We will get the full instructions and the common fact pattern a few days before the exam…some facts that are more discreet will not be given

    FINAL EXAM:

    Final ReviewWednesday, December 01, 201010:35 AM

    FINAL Page 1

  • Separation of Powers

    localpeople

    local

    state

    national

    LEG

    EXEC

    JUD

    checks and balances

    legislative review of rules (lesson 16) ○

    oversight ○

    investigation ○

    funding ○

    direct contact or “case work”○

    legislative veto (next slide) •Legislative controls take various forms

    Forms

    INS v. Chadha (no legislative veto at federal level)

    Ohio allows; Kentucky prohibits•Legislative veto may be permissible at state level

    Legislative Veto

    Lesson 3 - Legislative Control

    Presidents and governors indirectly control agencies through their powers to appoint and remove officials who execute the laws and exert influence through executive oversight

    Contrast the effect of unitary and plural executives •Legislative encroachments include independent counsel laws, dismissal or for cause, and appointment for terms

    Fewer forms of executive controlForms

    Lesson 4 - Executive Control

    Slides on Open Records and Open Meetings Acts available in Briefing Book on TWENOpen Government

    Lesson 5 - Citizen Control

    The public? The government as a whole? The branch? The agency? Its officers? •Identification of the client of the government lawyer

    Promote administration policy? Serve the public interest? Just a hired gun?•The lawyer’s obligations

    Officer holders; political and policy advisors•Lawyers in non-traditional roles

    Challenges

    Model Rule 1.13: “A lawyer employed or retained by an organization represents the organization acting through its duly authorized constituents.”

    Restatement (3d) of the Law Governing Lawyers, : No universal definition of the client of a government lawyer is possible. (Section 97, comment c)

    Ethics

    Lesson 6 - Control By Lawyers

    Exercise of Agency PowersII.

    Londoner and Bi-Metallic•Rulemaking is comprehensive; adjudication is incremental•Rulemaking involves “legislative facts”; adjudication involves adjudicative facts•Difference between “rule” and “order”•Adjudication and rulemaking each has its advantages and disadvantages•

    Rulemaking/Adjudication Distinction

    APA 551(4) •MSAPA 1-102(10) •KRS 13A.010(2) •ORC 119.01(C)•

    Rule defined•

    Order defined •

    Definitions

    Lesson 7 - Rulemaking Adjudication

    FINAL Page 2

  • APA 551(6)•MSAPA 1-102(5)•KRS 13B.010(6) (“final order”)•ORC 119.01(D) (“adjudication”)•

    Order defined •

    Participation by all affected parties•Apt procedure for questions of policy•Applies prospectively•Uniformly binds classes of persons•Regularized process for political input•Agency is in control of its agenda•Obviates need for re-litigation•Rules are widely published and accessible•Easier executive and legislative oversight•

    Advantages of Rulemaking•

    Allows agency to make law step by step•Allows agency to handle the new and unexpected•Often less expensive and time consuming than rulemaking•No need to resolve internal agency disputes•Resolves ambiguities in laws and rules•

    Advantages of Adjudication•

    Ordinarily the option to proceed by rulemaking or adjudication is the agency’s•In states, agencies may have to proceed by rule (as in Kentucky) •

    Agency Choice•

    Constitution•

    Generic acts (APA, NEPA)•Enabling acts•

    Statutes•

    Agency rules•Executive orders•Common law•

    Sources of Procedural Requirements

    Dignitary function•Acceptability•Accuracy•Consistency•Empowerment•Improve decisions and the exercise of discretion•Improve judicial review•

    Purposes of Due Process

    Deprivations of life, liberty, property•To what does it apply?•

    Matthews balancing•What procedures does it require?•

    Pre-deprivation, post-deprivation, both•When must the agency supply those procedures?•

    Due Process Clause Analysis

    Traditional forms of property (e.g., right to own and use goods)•“New property” (e.g., entitlements, tenure)•

    Loudermill•

    Property interests “are created and their dimensions are defined by existing rules or understandings that stem from an independent source such as state law.”

    Statute that creates property cannot prescribe the procedure for taking it away.•

    Property Interests

    Traditional forms of property (e.g., right to own and use goods)•“New property” (e.g., entitlements, tenure)•

    Loudermill•

    Property interests “are created and their dimensions are defined by existing rules or understandings that stem from an independent source such as state law.”

    Statute that creates property cannot prescribe the procedure for taking it away.•

    Liberty Interests

    Exclude the interest from property or liberty•Describe due process are variable rather than fixed and dependent on the context•Identify the action in question as generalized, not particularized or as something other than a deprivation

    Means courts use to limit the procedural requirements imposed by due process•Limitations by Courts

    Lesson 8 - Adjudication: Is Process Due?

    “The fundamental requirement of due process is the opportunity to be heard ‘at a meaningful time and in a meaningful manner.’” Matthews v. Eldridge

    •How Much Process is Due?

    Used for both what (elements of a hearing) and when (pre-deprivation, post-deprivation)•

    private interest that will be affected by the official action•risk of an erroneous deprivation and the probable value of additional procedure•government’s interest, including fiscal and administrative burdens•

    Three factors:•

    Balancing Test

    Unbiased tribunal•Notice of the proposed action and the grounds asserted for it•

    Elements of a Hearing

    Lesson 9 - Adjudication: How Much Process Is Due?

    FINAL Page 3

  • Notice of the proposed action and the grounds asserted for it•Opportunity to present reasons why proposed action should not be taken•The right to call witnesses•Testimony under oath•The right to know the evidence against you•Right to have a decision based exclusively on the record•Right to counsel•Making of a record•Availability of reasons for decision•Public attendance•Judicial review•

    formal adjudication is not required absent clear indication of Congressional intent•Federal: magic words - “on the record”•

    State: most states require an external source to trigger; MSAPA 4-101 has an inclusive definition•

    Statutory Right to a Hearing

    Agency need not provide an adjudicatory hearing on an issue already addressed by rule.•Points up interplay between rulemaking and adjudication•

    Limiting Issues

    Lesson 10 - Statutory Hearing Rights

    The one who decides must hear?•Intermediate reports•Exclusive record•

    Conflict between institutional and judicial decision making models•Decision Making

    Problem rooted in the combination of legislative, executive, and judicial authority in the “Fourth Branch”

    Adversaries can’t be decision makers or advisors to decision makers•Exception: rule of necessity•

    Separation of Functions

    APA 556(b) permits removal for personal bias or other disqualification (pecuniary interest)•Pre-decisional bias (prejudgment) versus bias at hearing (personal animus?)•

    Bias

    Further conflict between institutional and judicial models of agency adjudication•Refers to contacts with persons outside the agency (recall separation of functions)•

    Ex Parte Contracts

    APA 557(d) - interested persons can include members of Congress•Legislative Pressure

    Lesson 11 - Quasi-Judicial Decisions

    Administrative searches•Investigative subpoenas•Reports and filings•

    Power to Obtain Information

    To conduct a valid search requires consent, a warrant, exigent circumstances, or an exception permitting a warrantless search

    Lower threshold than criminal warrant•Warrant requires probable cause “in the administrative sense”•

    Exigent circumstances = emergency•Exceptions for “pervasively regulated businesses”•

    Administrative Searches

    (1) must be for a legislatively authorized purpose, (2) information sought must be relevant to the authorized purpose, (3) information must not be in agency’s possession, (4) information must be adequately described, and (5) proper procedures must be followed

    No showing of probable cause is necessary•

    Investigative Subpoenas

    Typically required of regulated parties by enabling acts•No testimonial privilege in records required to be prepared and maintained•

    Reports & Filings

    Rules of evidence not strictly applied•Residuum rule•

    Evidence•

    Analogous to judicial notice in civil litigation•Reflects application of agency expertise•

    Official notice•

    Hearing Phase

    Lesson 12 - Pre-Hearing & Hearing

    Findings of fact and conclusions of law•Res judicata and collateral estoppel•Stare decisis•Equitable estoppel•***********We were gonna go back to this after A Well Founded Fear exercise but didn’t b/c of problems so not as much emphasis on this part.**********

    Post-Hearing PhaseLesson 13 Decision & Effect

    Lesson 14 & 15 - A Well Founded Fear

    Executive Order 12866•Regulatory analysis•

    Cost-benefit analysis•Ohio JCARR•Kentucky ARRC•

    Review of RulesLesson 16 - Oversight

    FINAL Page 4

  • Kentucky ARRC•

    Executive Orders •Executive Oversight •

    Congressional Review Act •ARRS in Kentucky •JCARR in Ohio•

    Legislative Oversight •

    Oversight

    Informal (notice and comment) rulemaking•Formal (trial-type) rulemaking•Hybrid rulemaking•

    Rulemaking procedures:•Implementation

    APA 553; MSAPA Article III•Adequate notice•Reasonable time for comment•Federal rule: final rule must be the “logical outgrowth” of notice and comment•State (MSAPA) rule: final rule must not be “substantially different” from proposed rule•

    Informal Rulemaking

    Triggered by “magic words”•“When rules are required by statute to be made on the record after opportunity for an agency hearing, sections 556 and 557 of this title apply instead of this subsection [553(c)].”

    Formal Rulemaking

    Vermont Yankee v. NRDC•In the absence of constitutional constraints or extremely compelling circumstances, a court may not impose rulemaking procedures on an agency beyond those set out in section 553.

    Agency can impose hybrid rulemaking on itself•

    Hybrid Rulemaking

    Lesson 17 - Initiating Rulemaking

    role of agency head •ex parte communications •bias and prejudgment •ethical obligations of government attorneys•

    Procedural regularity•

    Findings and reasons•Issuance and publication•

    Rulemaking

    APA 553(c)•MSAPA 3-106(c)•

    Agency decision makers must actually consider the written and oral submissions received in the course of the rulemaking

    •Agency Head

    Problem of the captive agency•Can’t take the politics out of politics•

    Ex Parte Communications

    Presumption of regularity•“Unalterably closed mind” standard•“The legitimate functions of a policymaker, unlike an adjudicator, demand interchange and discussion about important issues. We must not impose judicial roles upon administrators when they perform functions very different from those of judges.” p. 281

    Bias

    satisfies legislative mandate •facilitates meaningful judicial review•allows more informed scrutiny by Leg •induces reasonable (not arbitrary and capricious) action •introduces predictability •promotes public confidence •

    Fulfills several functions:•Findings & Reasons

    Lesson 18 - Rulemaking: Decisional Processes

    Under APA and MSAPA, rules don’t take effect immediately•

    three tests (next slide)•Duty to publish a rule that “adversely affects substantive rights”•

    Issuance & Publication

    An unpublished interpretation affects substantive rights when it changes existing rules, policy, or practice

    Consider whether the interpretation deviates from the plain meaning of the statute or regulation at issue

    An agency rule is substantive if it is of binding force and narrowly limits administrative discretion•

    Three Tests

    Lesson 19 - Rulemaking: Issuance

    Good cause•Exempted subject matter•Rules of procedure•Nonlegislative rules•

    Exemptions from rule making•Implementation

    impracticable, unnecessary, or contrary to the public interest•APA 553(b); MSAPA 3-108 •

    Good Cause Exemptions

    Lesson 20 - Exemptions

    FINAL Page 5

  • impracticable, unnecessary, or contrary to the public interest•

    KRS 13A.170, 13A.190•ORC 119.03(F), 119.04•

    Emergency rules:•

    APA 553(a)(1) - military or foreign affairs•APA 553(a)(2) - agency management or personnel or public property, loans, grants, or contracts•MSAPA 3-116 - ten exceptions•

    Exempted Subject Matter

    APA 553(b): does not apply to “rules of agency organization, procedure, or practice”•“When a proposed regulation of general applicability has a substantial impact on regulated industry . . . notice and opportunity for comment should first be provided. Karst Metals, p. 334

    State APAs don’t contain this exemption•

    Rules of Procedure

    Legislative rules are rules issued by an agency pursuant to an express or implied grant of authority to issue rules with the force of law.

    Non-legislative rules are not based upon delegated authority and do not have the force of law.•Non-legislative rules generally divided into “interpretive rules” and “general statements of policy”•

    Non-Legislative Rules

    statements operate only prospectively•statements must not establish a “binding norm” or be “finally determinative of the issues or rights to which addressed”

    APA 553 exception for “general statements of policy” applies where: •Policy Statements

    At the extremes:•Rule is not interpretive where statute authorizes an agency to impose a duty and where absent the rule the legislative basis for enforcement would be inadequate.

    Rule is clearly interpretive if the agency has no rulemaking authority with respect to the subject area of the rule.

    Interpretive Rules

    Lesson 21 - Non-Legislative Rules

    Control Through the CourtsIII.

    Review of findings of basic fact•Review of issues of legal interpretation•Review of discretionary determinations in adjudication (lesson 24)•Review of discretionary determinations in rulemaking (lesson 24)•

    Review on the Merits

    Trial de novo•Independent judgment on the evidence•Clearly erroneous•Substantial evidence•Some evidence•Facts not reviewable at all•Standards above make sense only in relation to each other•

    Scope of Review

    Court must look at the whole record, not just the part that supports the agency•Substantial evidence test•

    Requires “a definite and firm conviction that a mistake has been committed”•Clearly erroneous test•

    Findings of Basic Fact

    Approach in most states•Weak deference•

    Approach in the federal courts (Chevron) and in some states•Strong deference •

    Issues of Legal Interpretation

    Lesson 22 - Judicial Review I

    “First, always, is the question whether Congress has directly spoken to the precise question at issue. If the intent of Congress is clear, that is the end of the matter. . . .”

    •Chevron Step I

    If, however, the court determines Congress has not directly addressed the precise question at issue, . . . the question for the court is whether the agency’s answer is bases on a permissible construction of the statute.

    •Chevron Step II

    Chevron applied to a legislative rule•Skidmore deference applies to less formal agency pronouncements (interpretive rules and policy statements)

    But see Mead (“Did Congress expect the agency to be able to speak with the force of law?”)

    Treats the agency interpretation as relevant, but court need not uphold it unless the court is persuaded that agency is correct

    Skidmore Deference

    Lesson 23 - Judicial Review II

    Used to review both formal and informal adjudications•Used to review sanctions, purposes of action, justifications, proportionality, etc.•

    Arbirtrary and capricious test•

    Ask: what are the boundaries of the agency’s discretionary power?•Touchstone is reasonableness•

    Review of Discretion in Adjudication

    Review of Discretion in Rulemaking

    Lesson 24 - Judicial Review III

    FINAL Page 6

  • Same arbitrary and capricious test•Hard look review (federal approach) vs. soft look review (state approach)•Hard look: court closely scrutinizes to make sure that the agency carefully deliberated and offered detailed explanations for its actions

    Soft look: extremely deferential – upholds action if there is any conceivable basis for it•

    Review of Discretion in Rulemaking

    Injunction and declaratory judgment•

    Mandamus•Certiorari•Procendendo•Prohibition•habeas corpus•quo warranto•

    Extraordinary writs •

    Causes of Action

    No inherent right to appeal•Explicit statutory review procedures•

    CPLR Article 78•Administrative procedure statutes •

    28 USC 1331•No explicit statutory review procedure •

    Jurisdiction

    Federal: presumption of reviewability•States: vary considerably in their approaches to judicial review•

    Preclusion of Review

    No law to apply•Agency has broad discretion to marshal its limited resources•

    Commitment to Agency Discretion

    Failure to act is a kind of agency action for the purpose of the APA•Reviewable only where it involves a failure to act that is legally required•

    Agency Inaction & Delay

    Lesson 25 - Remedies

    Does a party have a sufficient stake in an otherwise justiciable controversy to obtain judicial resolution of the controversy?

    To satisfy constitutional minimum, plaintiff must demonstrate 1) and injury in fact that is 2) fairly traceable to the actions of the defendant and 3) can be redressed by a favorable decision.

    No third party claims•No raising generalized grievances•Be within the statutory zone of interests•

    Prudential considerations•

    Litigant must assert his own legal rights and interests and cannot rest his claim on legal rights and interests of third parties (exception for civil rights)

    •Third party standing•

    StandingLesson 26 - Getting Into Court

    Finality: Courts only review “final orders.”•Ripeness: Issues must be sufficiently mature•Exhaustion: Whether a person currently before an agency must stay within the agency•Primary jurisdiction: Whether the dispute must be given to an agency first and taken to court after agency action is concluded

    TimingLesson 27 - Staying In Court

    FINAL Page 7

  • We're not going to study substantive law but law that is common to all agencies-

    Chapter 1 IntroductionTuesday, August 17, 20109:27 PM

    Ch.1 Page 8

  • Admin agencies are units of government other than the legislature or the courts•Agencies usually have legal power to affect the rights or duties of persons outside the government•Agencies administer or execute law under powers delegated to them by statute•Most agencies are regulatory meaning that they enforce a mandatory scheme of prohibitions or obligations, such as environmental protection or local planning and zoning…other agencies are benefactory, meaning that they disburse benefits such as welfare of Social Security

    Admin law deals with the legal principles common to all admin agencies, including the procedures that agencies use to carry out their functions and the principles of judicial review of agency actions

    §1.1 Administrative Agencies & Administrative Law

    §1.1 Administrative Agencies & Administrative LawFriday, August 20, 20109:50 PM

    Ch.1 Page 9

  • NO NOTES•§1.2 Reasons for Studying Administrative Law

    §1.2 Reasons for Studying Administrative LawFriday, August 20, 20109:53 PM

    Ch.1 Page 10

  • This book constantly compares state & federal materials•State admin law is important in its own right•Many differences between federal and state admin law•

    §1.3 State & Federal Administrative Law

    §1.3 State & Federal Administrative LawFriday, August 20, 20109:54 PM

    Ch.1 Page 11

  • Principal sources of admin law are federal and state constitutions, statutes, and judge-made common law•Of special importance are admin procedure acts (APAs)•APAs are general meaning they apply to most agencies rather than just one or a few•

    Enacted in 1946 and established fundamental relationship btw regulatory agencies and those whom they regulate

    Landmark [federal APA] was the bill of rights for the new regulatory state•

    State acts usually apply to most or all agencies of the state but do not cover local agenciesAPAs of more than half of the states are based in whole or in part on the 1961 Model State APA (MSAPA)

    Most state APAs enacted btw 1955 and 1980•

    §1.4 Administrative Procedure Acts

    §1.4 Administrative Procedure ActsFriday, August 20, 20109:54 PM

    Ch.1 Page 12

  • Suppose state legislature has been deluged with complaints about unfair practices in the auto insurance industry…legislature isn't sure exactly what prolem is…enacts vague statute prohibiting unfair and discriminatory auto insurances practices….Act creates an agency called Auto Insurance Commission (AIC) to enforce it since it won't enforce itself

    Research & Publicityi.Rulemaking --> Act will authorize AIC to adopt rules to ID and prohibit unfair/discriminatory practices (i.e. no different premiums for different zip codes)

    ii.

    Licensing --> statute creating AIC may authorize it to license auto insurance companies or insurance brokers…AIC will issue rules establishing the qualifications for obtaining a licesne (Such as financial qualifications, education, experience, or an exam)…the rules will also specify what licensees may & may not do and will set forth sanctions for violating the rules, such as revocation of the licenses

    iii.

    Investigation & Law Enforcement --> if a violation is detected, the agency must be empowered to initiate enforcement action, because statutes and rules will not enforce themselves, and members of the public may lack the resources, the will, or the information to do so

    iv.

    Adjudication --> an adjudication is an agency determination of particular applicability that affects the legal rights or duties of a specified person (as distinguished from rules which have general applicability)…for example AIC might adjudicate whether license of particular insurance company should be suspended or revoked b/c of a violation of AIC rules

    v.

    Ratemaking --> admin price fixing is common technique, particularly in situations of natural monopoly like local phones, gas, electric, cable tv or when market failures of one sort or another are thought to prevent the market from functioning properly (i.e. rent control)

    vi.

    Judicial Review --> judicial review of admin action occurs frequently…broadly speaking courts review final agency action (both rules and adjudication) for errors of law and for reasonableness in finding facts or exercising discretion

    vii.

    Legislature & Executive Review --> both the legislature and executive branches of government scrutinize agency actions…legislature investigates agency action and often amends or repeals agency enabling statutes….governor will appoint the head or heads of AIC and governor's staff will keep track of AICs activities…governor may have authority to remove AIC agency heads for any reason….however if AIC is an independent agency then governor can remove heads only for good cause….statute may also give governor authority to delay or veto agency rules….governors have substantial control over AICs budget; they can request budges increases or decreases and in many states have a line item veto that can be used to decrease agency's current spending

    viii.

    How will AIC go about enforcing the statute?•

    §1.5 A Snapshot of the Administrative Process

    §1.5 A Snapshot of the Administrative ProcessFriday, August 20, 201010:04 PM

    Ch.1 Page 13

  • Admin process should be lawful and fair and produce accurate results at acceptable cost•Process must strive for legitimacy, meaning that exercise of power by admin agencies is recognized by regulated parties and the community at large as politically acceptable

    Legislature can and often does control agency action through oversight, new legislation, or cutting the budget…at both federal and state levels the executive branch has numerous tools to scrutinize and control agency rulemaking, up to and including removal of the agency heads

    §1.6 Agency Legitimacy & Administrative Law

    §1.6 Agency Legitimacy & Administrative LawFriday, August 20, 201010:20 PM

    Ch.1 Page 14

  • Chapter 7 Control of Agencies by the Political Branches of GovernmentFriday, August 20, 201010:24 PM

    Ch.7 Page 15

  • An examination of the role of political bodes in controlling agency action requires consideration of two fundamental constitutional principles: separation of powers and checks and balances

    •§7.1 Introduction

    §7.1 IntroductionFriday, August 20, 201010:25 PM

    Ch.7 Page 16

  • §7.2 Delegation of Legislative Power to Agencies

    Despite the necessary and proper clause, however, the nondelegation doctrine maintains that Congress' power to delegate its legislative authority is limited

    Nondelegation doctrine invokes both separation of powers and checks and balances argument….separation of powers argument is that the Constitution assigned all legislative power to the legislature; therefore Congress cannot transfer any part of that power to administrative agencies…checks and balances argument recognizes that delegation to agencies may be inevitable, but insists that the legislature impose adequate limits on the discretion such agencies can exercise

    §7.2.1 The Nondelegation Doctrine & Federal Agencies

    Marshall field & Co. v. Clark, 143 US 649 (1892) sounded themes of both separation of powers and checks and balances….a statute empowering the President to raise tariffs and suspend trade with foreign countries "for such time as he shall deem just"….the President was to take this action if he deemed the tariffs imposed by such countries on American goods to be unequal and unreasonable

    Power given to President in the Field case above was far more significant than a mere power to "ascertain the fact" of whether a "given contingency" had occurred. It was indeed "the making of law"…a decision about whether foreign tariffs are unequal and unreasonable, and thus justify retaliation, calls for subtle judgment and entails deeply political as well as economic calculations

    From time of Field case until 1930s Supreme Court continued to assert that a nondelegation doctrine existed yet it upheld every delegation in a line of cases that involved steadily more sweeping transfers of power to federal agencies….in those cases, the Court applied the nondelegation doctrine by attempting to ascertain whether Congress had established an "intelligible principle" or a "primary standard" to guide the delegate in making the decision….the most frequently cited case is J.W. Hampton Jr. & Co. v. United States, 276 U.S. 394 (1928) which noted that "if Congress shall lay down by legislative act an intelligible principle to which the person or body authorized to [regulate] is directed to conform, such legislative action is not a forbidden delegation of legislative power."

    In 1935 the Supreme Court twice held statutes unconstitutional under the nondelegation doctrine…it was an early New Deal Measure….these cases were the first and last Supreme Court decisions to overturn statutes as invalid legislative delegations to administrative agencies

    Another example is "hot oil" where new oil discoveries in Texas led to massive overproduction lest other producers deplete the oil pool…in Panama Refining Co. v. Ryan, 293 US 388 (1935) the Supreme Court invalidated tis deldgation

    The second decision invlidated a much more important and vastly more sweeping decision….codes of fair competition in Section 3 of the NIRA which said President could prescribe max and min prices to be charged, wages, hours and working conditions of labor, levels of production, and many other competitive practices which previously had been determined by market forces…violations of a code were a criminal offense….in A.L.A. Schecter Poultry Corp. v. US, 295 US 495 (1935), the Supreme Court invalidated §3 under the nondelegation doctrine….Supreme Court held unanimously that the delegation to the President to adopt "codes of fair competition" was invalid because NIRA lacked an adequate standard to govern the drafting of codes

    §7.2.1a From Field to the New Deal

    Following Schecter and Panama decisions the Supreme Court returned to its pre-1930s practice of giving lip service to the nondelegation doctrine, while upholding ever more sweeping and vaue delegations…for example, in Yakus v. United States, 321 US 414 (1944), the Court upheld (with a single dissent) a delegation in the Emergency Price Control Act of 1942 to the Price Administrator to fix max prices….like NIRA, the 1942 Act was designed to deal comprehensively with an economic emergenc - in this case, the inflationary spiral generated by WWII….Yakus was convicted of selling beef for a price in excess of a ceiling set by Administrator…Court distinguished Schecter on ground that NIRA failed to provide standards for codes of fair competition and b/c the delegation to write codes was to private companies in industries to be regulated rather than public officials

    •§7.2.1b From the New Deal to the Present

    Despite Supreme Court's post 1935 practice of never invalidating a delagtion, a number of minority opinions have argued that doctrine still exists and should be aplied…other decisions narrowly construe statutes to avoid delegation problems

    In American Trucking, the Supreme Court declared that the nondelegation doctrine still exists, but it passed up an opportunity to actually apply it

    §7.2.1c Revival of the Nondelegation Doctrine?

    Facts of the Case:Acting under authority of the Occupational Safety and Health Act of 1970, the Secretary of Labor, after having demonstrated a link between exposure to benzene and leukemia, set a standard reducing the airborne concentrations of benzene to which workers could be exposed. The standard reduced the allowable amount from 10 parts per million (ppm) to one ppm. This case was decided together with Marshall v. American Petroleum Institute.

    Question:Did the Secretary exceed his authority to set standards?

    Conclusion:Yes. The Court agreed with the Court of Appeals that the Secretary had acted without knowledge that the new standard was necessary to "provide safe and healthful employment" as mandated by the Act. Nothing in OSHA's administrative record indicated that exposure to benzene at 10 ppm

    Industrial Union Department, AFL-CIO v. American Petroleum Institute, 448 U.S. 607 (1980)•

    Professor's Notes:Delegating statute must have intelligible standard to guide decision maker for federal laws

    -

    §7.2 Delegation of Legislative Power to AgenciesFriday, August 20, 201010:25 PM

    Ch.7 Page 17

  • the Act. Nothing in OSHA's administrative record indicated that exposure to benzene at 10 ppm would cause leukemia and that exposure to one ppm would not. Since the Secretary had not made a threshold finding that exposure to 10 ppm posed significant health risks, he was powerless to promulgate the new standard.

    Facts of the Case:Whitman v. American Trucking Ass'ns, Inc., 531 U.S. 457 (2001)•

    Section 109(a) of the Clean Air Act (CAA) requires the Environmental Protection Agency (EPA) Administrator to promulgate national ambient air quality standards (NAAQS) for each air pollutant for which "air quality criteria" have been issued undersection 108.

    1.

    In 1997, Carol Browner, the Administrator of the EPA, revised the ozone and particulate matter NAAQS. 2.Afterwards, her revised NAAQS were challenged in court. 3.The District of Columbia Circuit found that section 109(b)(1), which instructs the EPA to set standards, delegated legislative power to the Administrator in contravention of the Federal Constitution because the court found that the EPA had interpreted the statute to provide no "intelligible principle" to guide the agency's exercise of authority.

    4.

    The court remanded the NAAQS to the EPA. 5.The courts also held to its rule that the EPA could not consider implementation costs in setting the NAAQS. 6.Additionally, the court rejected the EPA's position that the implementation provisions for ozone found in Part D, Subpart 2, of Title I of the CAA, were so tied to the existing ozone standard that the EPA lacked the power to revise the standard.

    7.

    Question:Does section 109(b)(1) of the Clean Air Act unconstitutionally delegate legislative power to the Administrator of the Environmental Protection Agency? May the Administrator of the EPA consider the costs of implementation in setting national ambient air quality standards under section 109(b)(1)? Does the Court of Appeals have the jurisdiction to review the EPA's interpretation of Part D of Title I of the CAA, with respect to implementing the revised ozone NAAQS?

    Rule:In a delegation challenge the constitutional question is whether the statute has delegated legislative power to the agency…must have intelligible principle to guide decision making when delegating….in this case requisite means sufficient butnot more than necessary so it is okay

    Analysis:It is true that the degree of agency discretion that is acceptable varies according to the scope of the power congressionallyconferred.

    Conclusion:No, no, and yes. In an opinion delivered by Justice Antonin Scalia, the Court held that the CAA properly delegated legislative power to the EPA, but that the EPA could not consider implementation costs in setting primary and secondary NAAQS. Moreover, the Court held that the Court of Appeals has jurisdiction to review the EPA's interpretation of Part D of Title I of the CAA related to the implementation of the revised ozone NAAQS; however, the EPA's interpretation of Part D was unreasonable.

    Kent v. Dallas S.Court 1958 -- statute appearted to give Sec. of State unconstratined discretion to decline to issue passports…Court said SOS could only do this in 2 situations (1) doubts about whether the applicant was a citizen or about whether the applicant would use the passport for illegal activitiy…thus couldn't deny peeps who were members of the communist party

    The court has often narrowly construed statutes to avoid cons problems•

    §7.2.2 The Nondelegation Doctrine & State Agencies

    Notes & Questions (pg.385)•

    Thygesen v. Callahan, 385 N.E.2d 699 (Ill. 1979)Facts:The currency exchange owners and operators alleged that the total absence of standards or guidelines rendered § 19.3 of the Act, codified at Ill. Rev. Stat. ch. 16 1/2, para. 49.3 (1977), unconstitutional.

    1.

    The court found that § 19.3 delegated the power to regulate rates to the Director. 2.The court determined that the legislative delegation was valid if it identified the persons and activities potentially subject to the regulations, the harm sought to be prevented, and the general means intended to be available to the Director to prevent the identified harm.

    3.

    The court concluded that the legislature in § 19.3 identified the persons and activities potentially subject to the regulations, but made no attempt to identify the harm sought to be prevented.

    4.

    The court further determined that there were no meaningful standards to guide the Director in setting maximum rates. 5.The court concluded that the legislature unlawfully delegated its power and that § 19.3 was unconstitutional.6.

    Issue:Was this task unconstitutionally regulated in Illinois state law?

    Rule:

    "(1) The persons and activities potentially subject to regulations;(2) the harm sought to be prevented; and(3) the general means intended to be available to the administrator to prevent the identified harm."

    In an attempt to endow the requisite of intelligible standards with a conceptual foundation, the Stofer court declared that a legislative delegation is valid if it sufficiently identifies:

    Analysis:Here, as in Stofer, the legislature clearly satisfied the first prong of the test. Those subject to regulation under section 19.3 of the currency exchange act are community and ambulatory currency exchanges, and the regulation is limited to the activities ofcashing checks and issuing money orders. In contrast to Stofer, the legislature made [**702] no attempt to identify the "harm sought to be [***8] prevented" in delegating to defendant the power to set maximum rates and did not sufficiently identify the "means intended to be available * * * to prevent the identified harm." Section 19.3 is devoid of any reference to the harm to be remedied. The currency exchange act contains no other provision which indicates, explicitly or implicitly, general purposes

    Ch.7 Page 18

  • to be remedied. The currency exchange act contains no other provision which indicates, explicitly or implicitly, general purposes which the legislature might have intended to foster with respect to setting rates for cashing checks and issuing money orders.Act fails to identify any purposes which the legislature might have sought to attain by providing for the establishment of maximum check-cashing and money-order rates.

    Conclusion:The court reversed the judgment of the trial courtHere, where the legislature has not only failed to provide any additional standards to guide defendant's discretion, but has failed to communicate to defendant the harm it intended to prevent, it is clear that the legislature has unlawfully delegated its power to set such [***10] maximum rates. Held section 19.3 of the currency exchange act (Ill. Rev. Stat. 1977, ch. 16 1/2, par. 49.3) unconstitutional; therefore, the judgment of the circuit court is reversed.

    Notes & Questions (pg.393)Delegation in the states --- Many state supreme courts insist that a delegation of authority to an agency may not be upheld absent adequate statutory sandards that constrain the agency's discretion…assuming a state strongly enforces the nondelegation doctrine, is Thygesen a persuasive app of the doctrine

    On 1 occasion the US Supreme Court invalidated a federal statute providing that max hours and min wages agreed upon by a majority of affected miners and mine-operators would be binding upon the rest of them --> Carter v. Carter Coal Co. (1936)…Court stressed dangers inherent in a delegation of governmental authority to private parties

    Since 1936 the fed. Courts have upheld a # of delegations of governmental authority to private enterprises…•

    For example in a 1997 Texas case invalidated a leg. Scheme whereby a private foundation was empowered to establish boll weevil eradication zones and conduct elections of cotton farmers within each zone…if majority of cotton farmers in a zone voted favorably the foundation assessed each farmer a fixed amount (whether or not they agree d and whether or not their crop was infested) and spent the $ on projects to eradicate the dreaded weevil…farmers who failed to pay were guilty of a misdemeanor and their crop was destroyed whether or not infested with weevils…in ruling court noted that courts should subject private delegations to a more searching scrutiny than their public counterparts and the court employed many factors for showing invalidity of the delegation: foundation was subject to only minimal control by a state agency, foundation not only made rules it also had power to apply them to particular farmers; foundation board members (themselves cotton farmers) had a pecuniary interest in the foundation's activity; the foundation's rules were backed up by the criminal law; the delegation of authority was not limited by cost or duration; there was no guarantee that the board members would have any special training or experience; and the legislature provided few statutory standards to guide the Foundation

    •in constrast, a significant # of state cases have overturned delegations to private persons or entities•

    Ch.7 Page 19

  • This section examines the legitimacy of legislative delegations of adjudicatory power to agencies --- the power to determine rights or duties of particualr person based on their individual circumstances….the materials pertaining to legislative decisions are equally applicable here

    Northern Pipeline Constr. Co. v. Marathon Pipe Line Co. US Supreme Court 1982 --> Supreme Court invalidated a statute that assigned the trial of all the issues In a bankruptcy case, including breach of contract issues, to bankruptcy judges….b/c bankruptcy judges were not appointed according to reqs of Art. III they lacked life tenure and salary protection….K cases involve private rights and must be decided by an Art. III judge

    Crowell v. Benson, 285 U.S. 22 (1932) is the first United States Supreme Court decision which approved the adjudication of private rights by an administrative agency, not an Article III court. The Court held that the United States Employees' Compensation Commission satisfied Fifth Amendment Due Process and the requirements of Article III with its court-like procedures and because it invests the final power of decision in Article III courts

    Also said something about Cromwell case here which was the case which S.Court held could be decided btw employer and employee on navigable water

    §7.3 Delegation of Adjudicatory Power to Agencies

    §7.3 Delegation of Adjudicatory Power to AgenciesFriday, August 20, 201010:29 PM

    Ch.7 Page 20

  • Commodity Futures Trading Commission v. Schor478 U.S. 833 (1986)Background:

    Facts.

    The Commodity Exchange Act (CEA), 7 U.S.C. § 1 et seq., prohibits fraudulent conduct in the trading of futures contracts. In 1974, Congress amended the Act to create a more comprehensive regulatory framework for the trading of futures contracts. To that end, Congress created an administrative agency called the Commodity Futures Trading Commission (CFTC). One of the duties assigned to the CFTC was the administration of a quasi-judicial reparations procedure by which customers of commodities brokers could seek legal redress for brokers’ alleged violations of the Act or other CFTC regulations. One of theCFTC’s regulations also provided the agency to adjudicate counterclaims “arising out of the same transaction or occurrence orseries of transactions or occurrences set forth in the complaint”. The section of the statute and the CFTC regulation at issue in this case, both of which were intended to provide an inexpensive and expeditious method for the settlement of futures contract-related claims, were challenged by the customers of a broker as being violative of Article III of the United States Constitution.

    The Commodity Futures Trading Commission (CFTC) is an independent agency that enforces the Commodity Exchange Act (CEA).

    1.

    The CFTC was authorized to adjudicate claims for damages, or reparations, brought by customers of brokers for brokers’ violations of the CEA or CFTC regulations.

    2.

    The CFTC also issued a regulation permitting itself to adjudicate counterclaims brought by brokers in reparations proceedings. 3.Schor sued his broker, ContiCommodity Services of America (Conti), claiming it was responsible for the negative balance in his trading account with Conti.

    4.

    Conti counterclaimed, and the CFTC ruled in its favor. 5.Schor then questioned the CFTC’s authority to adjudicate the counterclaim, and the agency rejected the challenge. 6.The Court of Appeals reversed.7.WIKI:In February 1980, respondents Schor and Mortgage Services of America, Inc. filed complaints with the CFTC against brokerage firm ContiCommodity Services, Inc. (Conti) and Richard L. Sandor, one of the firm’s employees, alleging violations of the CEA. Meanwhile, Conti filed an action under diversity jurisdiction in the United States District Court for the Northern District of Illinois to recover the debit balance in Schor’s account. Schor filed a counterclaim in the federal suit, asserting the same charges against Conti it had made in its complaint to the CFTC. Schor moved to dismiss the district court action, but the judge declined. Conti then voluntarily dismissed the suit, in order to present its counterclaim against Schor for the debit balance as a defense in the CFTC action.The Administrative Law Judge (ALJ) in the CFTC reparations proceeding ruled in Conti’s favor on both claims, and it was at that point Schor challenged the CFTC’s jurisdiction to hear Conti’s counterclaim against him. The ALJ rejected this contention, and the CFTC declined to review the decision. Schor then petitioned the United States Court of Appeals for the District of Columbia Circuit for review. The Court of Appeals held that the CFTC had jurisdiction over Schor’s claim against Conti, but not over Conti’s state-law based counterclaim against Schor for the debit balance, seeking to avoid the constitutional problems faced in Northern Pipeline Construction Co. v. Marathon Pipe Line Co., 458 U.S. 50 (1982). The U.S. Supreme Court granted certiorari, vacated the judgment, and remanded the case back to the Court of Appeals for further consideration under Thomas v. Union Carbide Agricultural Products Co., 473 U.S. 568 (1985). The Court of Appeals reinstated its previous judgment, and the Supreme Court granted certiorari again.

    Issue.Did CFTC’s assumption of jurisdiction over common law counterclaims violate the Constitution?

    Synopsis of Rule of Law.Article III, Section:1 of the Constitution provides that the “judicial power of the United States shall be vested in one Supreme Court and in such inferior Courts as the Congress may from time to time ordain and establish.” However, Courts must apply theprinciple that “practical attention to substance rather than doctrinal reliance on formal categories should inform application of Article III.”

    Analysis:Justice O’Connor, writing for the majority, addressed the statutory interpretation issue first. She held that the D.C. Circuit created a false distinction between the CFTC’s jurisdiction over state law counterclaims and counterclaims arising under the CEA, simply to avoid a constitutional problem, and ignored the legislative intent of Congress in doing so. The situation faced by the litigants here was common: a claim and counterclaim arising out of the same transaction and occurrence, and it was well within the statutory jurisdiction of the CFTC to adjudicate such both actions. This is in keeping with Congress’ intent to create a

    Commodity Futures Trading Commission v. SchorThursday, August 26, 20102:17 PM

    Ch.7 Page 21

    http://en.wikipedia.org/wiki/Commodity_Exchange_Acthttp://en.wikipedia.org/wiki/Title_7_of_the_United_States_Codehttp://www.law.cornell.edu/uscode/7/1.htmlhttp://en.wikipedia.org/wiki/Futures_contracthttp://en.wikipedia.org/wiki/United_States_Congresshttp://en.wikipedia.org/wiki/Commodity_Futures_Trading_Commissionhttp://en.wikipedia.org/wiki/Complainthttp://en.wikipedia.org/wiki/Article_III_of_the_United_States_Constitutionhttp://en.wikipedia.org/wiki/Article_III_of_the_United_States_Constitutionhttp://en.wikipedia.org/wiki/Diversity_jurisdictionhttp://en.wikipedia.org/wiki/United_States_District_Court_for_the_Northern_District_of_Illinoishttp://en.wikipedia.org/wiki/United_States_District_Court_for_the_Northern_District_of_Illinoishttp://en.wikipedia.org/wiki/Involuntary_dismissalhttp://en.wikipedia.org/wiki/Voluntary_dismissalhttp://en.wikipedia.org/wiki/Administrative_Law_Judgehttp://en.wikipedia.org/wiki/United_States_Court_of_Appeals_for_the_District_of_Columbia_Circuithttp://en.wikipedia.org/wiki/United_States_Court_of_Appeals_for_the_District_of_Columbia_Circuithttp://en.wikipedia.org/wiki/Northern_Pipeline_Construction_Co._v._Marathon_Pipe_Line_Co.http://en.wikipedia.org/wiki/Certiorarihttp://en.wikipedia.org/wiki/Vacated_judgmenthttp://en.wikipedia.org/w/index.php?title=Thomas_v._Union_Carbide_Agricultural_Products_Co.&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Thomas_v._Union_Carbide_Agricultural_Products_Co.&action=edit&redlink=1http://en.wikipedia.org/wiki/Sandra_Day_O%27Connorhttp://en.wikipedia.org/wiki/Statute

  • within the statutory jurisdiction of the CFTC to adjudicate such both actions. This is in keeping with Congress’ intent to create a more efficient means of adjudicating such disputes, as well as the administration’s interpretation of the statute.She then turned to the Article III issue. O’Connor chose to interpret Article III liberally, examining the underlying purposes of adjudication of cases by an independent judiciary. The right to be heard by an Article III tribunal is not absolute, and is subject to waiver by the parties. In this case, Schor waived his right to a trial with respect to Conti’s counterclaim, and elected to have the entire dispute resolved before the CFTC. It was only after the CFTC ruled against him that he challenged the agency’s jurisdiction. To O’Connor, Schor’s actions constituted an express waiver of his right to a civil trial.Additionally, O’Connor held Congress’ grant of judicial power to the CFTC for the adjudication of state-law counterclaims did not intrude on the powers of the judiciary. She concluded that while Congress could not vest administrative agencies with ancillary or pendent jurisdiction of all claims, it was not outright forbidden for them to do so. Unlike the situation in Northern Pipeline, not only were the CFTC’s orders reviewable in the U.S. district courts, the CFTC was not granted the full powers of an Article III court, and the parties were given the option of invoking the agency’s jurisdiction, rather than being compelled to use it. Furthermore, any issue of intrusion upon the powers of state courts was irrelevant, O’Connor reasoned, because federal courts may exercise ancillary jurisdiction over state law claims anyway.Justice O'Connor's majority opinion was joined by Burger, Ch. J., and White, Blackmun, Powell, Rehnquist, and Stevens, JJ.

    Held.No. The limited jurisdiction that CFTC asserts over state law claims as a necessary incident to the adjudication of federal claims willingly submitted by the parties for initial agency adjudication does not contravene separation of powers principlesor Article III. The CFTC’s powers departed from the traditional agency model only in respect to its ability to adjudicate counterclaims arising from the same transaction. This did not impermissibly intrude on the providence of the judiciary.

    Dissent. Article III, Section: I seems to prohibit the vesting of any judicial functions in the Legislative and Executive branches, but the court has recognized three narrow exceptions: territorial courts, courts-martial, and courts that adjudicate certain disputes concerning public rights. The judicial authority of non-Article III federal tribunals should be limited to these few, long-established exceptions. Concurrence. None.

    Discussion. The CFTC’s assertion of common law counterclaims is incidental to, and dependent upon, adjudication of reparations claims created by federal law, so any intrusion on the Judicial Branch is de minimus.

    Ch.7 Page 22

    http://en.wikipedia.org/wiki/Sandra_Day_O%27Connorhttp://en.wikipedia.org/wiki/Statutehttp://en.wikipedia.org/wiki/Article_III_tribunalhttp://en.wikipedia.org/wiki/Pendent_jurisdictionhttp://en.wikipedia.org/wiki/Ancillary_jurisdiction

  • Professor's Notes:Held-In Northern Pipeline the court defined "public rights" as matters arising btw government and private

    persons…private rights were defined as the liability of 1 private person to another…according to plurality in Norhtern Pipeline, Congress could not delegate authority to a non-Art. III tribunal to decide questions of private rights…but Cromwell case upheld a delegation to an agency of authority to adjudicate a dispute btw two private person over a statutory form of tort liability --- but only if a reviewiing court had power to independently review questions of law and jurisdictional fact

    1.

    Cromwells's jurisdictional fact holding is considered to be a relic of bygone era even though it was never formally overruled

    2.

    State Cases and adjudication of private rights --> a # of state decisions have insisted that adjudication of private rights of the sort traditionally handled by courts cannot be vested in admin agencies

    3.

    Jury Trials…Atlas Roofing Co. v. Occupation Safety & Health Rev. Comm'n 1977 S.Court --> employer challenged validity of OSHRC to impose civil $ penalties up to $10k per violation…S.Court held that the employer had no right to a jury under the 7th Am. b/c civil penalties were a means of enforcing a "public right" rather than a "private right"…Court observed that the OSHRC decisions were judicially reviewable both as to law and fact

    4.

    Only the judiciary may impose a sentence of imprisonmnet….Wong Wing v. US 1896 Supreme Court -> indicated that a person may be temporarily detained by an agency pending proceedings to decide whether exclusion or expulsion as an illegal alien is appropriate, and that an alien may be administratively excluded or expelled from the country…however an illegal alien may not be sentenced to prison without the protection of a judicial trial

    5.

    A legislature can delegate to an agency the power to adopt rules, the violation of which will be crimes punished by a court…in these situations the legislature has decided that violations of the rules will be criminal offenses….seee US v. Grimaud 1911 S.Court

    Notes & Questions (pg.402)

    Notes & Questions (pg.402)Monday, December 13, 20104:54 PM

    Ch.7 Page 23

  • Most direct means by which a legislature may control agency action is by specifying its desires in the agency's enabling act at the onset

    •§7.4 Legislative Controls

    §7.4 Legislative ControlsThursday, August 26, 20101:56 PM

    Ch.7 Page 24

  • A veto that allowed Congress to block a federal executive or agency action taken under congressionally delegated authority.

    the Supreme Court held the legislative veto unconstitutional in INS v. Chadha, 462 U.S. 919

    legislative veto.•§7.4.1 The Legislative Veto & Control of Federal Agencies

    §7.4.1 The Legislative Veto & Control of Federal AgenciesThursday, August 26, 20101:57 PM

    Ch.7 Page 25

  • Immigration & Naturalization Service v. Chadha462 US 919 (1983)

    Facts:In one section of the Immigration and Nationality Act, Congress authorized either House of Congress to invalidate and suspend deportation rulings of the United States Attorney General.

    1.

    Chadha had stayed in the U.S. past his visa deadline. 2.Though Chadha conceded that he was deportable, an immigration judge suspended his deportation. 3.The House of Representatives voted without debate or recorded vote to deport Chadha. 4.This case was decided together with United States House of Representatives v. Chadha and United States Senate v. Chadha.

    5.

    Issue:Did the Immigration and Nationality Act, which allowed a one-House veto of executive actions, violate the separation of powers doctrine?

    Rule:Congress may not promulgate a statute granting to itself a legislative veto over actions of the executive branch inconsistent with the bicameralism principle and Presentment Clause of the United States Constitution.

    Analysis:The Court rebutted Congress's assertions as follows: (1) § 244(c)(2) of the Immigration and Nationality Act is severable from the rest of the act pursuant to the express severability clause § 406. The legislative history of § 244 supports the proposition that Congress, frustrated with the process of passing private laws to provide relief for deportable individuals, would likely not have been willing to retain the private law mechanism rather than ceding all power to the Attorney General. (2) The Attorney General and INS did not waive their right to challenge the constitutionality of the statute by enforcing the statute. (3) The action is a genuine case with adequate representation in favor of sustaining the act provided by the houses of Congress asamici curiae. (4) The case is a judicable question, not exempted by the political question doctrine; the constitutionality of a statute is a question for the courts.The Court then presented its affirmative reasoning: (5) When the Constitution provides express procedures, such procedures must be strictly observed. Two such provisions are bicameralism and presentment in the enactment of law. (6) The presentment process —especially the President's veto power—was intended by the Framers to provide a mechanism by which the executive branch could defend itself against legislative encroachment and could prevent ill -conceived policies. (7) Similarly, the bicameralism requirement was formulated in order to hinder congressional action and thereby prevent legislative encroachment. (8) The action of the House of Representatives is legislative in nature because (a) it modifies rights and duties of individuals outside the legislative branch; (b) the enactment would otherwise have required a private law, which is a legislative function; and (c) the nature of the action is inherently legislative. (9) When the Framers intended to authorize Congress to exercise power outside of the bicameral and presentment principles, it provided alternate procedures explicitly; other procedures cannot be admitted. (10) Because the action of the House of Representatives was legislative, but did not conform to the mode of action specifically stated by the Constitution for legislative action, it is therefore invalid, unenforceable, and not binding.

    FN20. See also U.S. Const., Art. II, § 1, and Amdt. 120.

    There are but four provisions in the Constitution, FN20 explicit and unambiguous, by which one House may act alone with the unreviewable force of law, not subject to the President's veto:

    (a) The House of Representatives alone was given the power to initiate impeachments. Art. I, § 2, cl. 6;(b) The Senate alone was given the power to conduct trials following impeachment on charges initiated by the House and to convict following trial. Art. I, § 3, cl. 5;(c) The Senate alone was given final unreviewable power to approve or to disapprove presidential appointments. Art. II, § 2, cl. 2;(d) The Senate alone was given unreviewable power to ratify treaties negotiated by the President.

    Conclusion:The Court held that the particular section of the Act in question did violate the Constitution. Recounting the debates of the Constitutional Convention over issues of bicameralism and separation of powers, Chief Justice Burger concluded that even though the Act would have enhanced governmental efficiency, it violated the "explicit constitutional standards" regarding lawmaking and congressional authority.The Supreme Court held that the resolution of the House of Representatives vetoing the Attorney General's determination is constitutionally invalid, unenforceable, and not binding.

    Professor's Notes:bicameral, adj. (Of a legislature) having two legislative houses (usu. called the House of Representatives, or the Assembly, and the Senate). • The federal government and all states except Nebraska have bicameral legislatures.

    -

    legislative veto. A veto that allowed Congress to block a federal executive or agency action taken under congressionally delegated authority. • The Supreme Court held the legislative veto unconstitutional in INS v. Chadha, 462 U.S. 919

    -

    Bicameralism and presentment are the essence of the democratic process

    -

    Counterweight to unregulated delegation doctrine seems like Congress should be able to step in and say "that's not what we meant" … one of the justices said that the delegation doctrine is an invention akin to the legislative veto

    -

    If head of committee is against president then nothing will get done

    -

    INS hearing is adjudicative | AG Review is executive | Congressional Committee Review is adjudicative and herein lies the problem

    -

    Congress can get around this by passing a law or even a private bill/law such as a law that says "so and so shall be a citizen of the United States"

    -

    Immigration & Naturalization Service v. ChadhaThursday, August 26, 20101:57 PM

    Ch.7 Page 26

    http://en.wikipedia.org/wiki/Founding_Fathers_of_the_United_Stateshttps://web2.westlaw.com/result/documenttext.aspx?ss=CNT&mt=Westlaw&n=1&cnt=DOC&rlt=CLID_FQRLT9258453413298&scxt=WL&service=Find&rp=%2fFind%2fdefault.wl&vr=2.0&cxt=DC&rlti=1&sv=Split&fn=_top&ifm=NotSet&cite=462+US+919&rs=WLW10.08#F020201983129415https://web2.westlaw.com/result/documenttext.aspx?ss=CNT&mt=Westlaw&n=1&cnt=DOC&rlt=CLID_FQRLT9258453413298&scxt=WL&service=Find&rp=%2fFind%2fdefault.wl&vr=2.0&cxt=DC&rlti=1&sv=Split&fn=_top&ifm=NotSet&cite=462+US+919&rs=WLW10.08#B020201983129415https://web2.westlaw.com/find/default.wl?tc=-1&docname=USCOARTIS3CL5&rp=%2ffind%2fdefault.wl&sv=Split&rs=WLW10.08&db=1000546&tf=-1&findtype=L&fn=_top&mt=Westlaw&vr=2.0&pbc=738D7C8D&ordoc=1983129415https://web2.westlaw.com/find/default.wl?tc=-1&docname=USCOARTIIS2CL2&rp=%2ffind%2fdefault.wl&sv=Split&rs=WLW10.08&db=1000546&tf=-1&findtype=L&fn=_top&mt=Westlaw&vr=2.0&pbc=738D7C8D&ordoc=1983129415

  • Professor's Notes:Held-Legislative Acts. --- majority holds that House's veto of AG's decision to suspend deportation was

    legislative and invalid b/c of a failure to atisfy the bicameralism and presentment provisions of the US constitution

    1.

    Extension of Chadha to rulemaking --> Court evidently intended its Chadha opinion to apply to both adjudication and rulemaking situations…only a few weeks after Charda without even pausing to write an opinion, the Court affirmed two lower court decisions that had struck down legislative veto provisions in a rulemaking context

    4.

    The Chadha decision has essentially eliminated the legislative veto as a tool for disapproving admin rules, but the device has not disappeared entirely…most notably, Congress has continued to enact provisions requiring agency to obtain the approval of appropriations committees for various expenditures

    6.

    Congressional Review Act --> put in during Contract with America Advancement Act of 1996 --> commonly called the Congressional Review Act --> applies throughout fed. Government…requires that virdually all rules of gen. applicability adopted by virtually all agencies be submitted to Congress and to the Government Accountability Office before they take effect….rule must be accompanied by a report containing various items of information about the rule…distinguishes btw major and non-major rules --> a major rule is one determined to be economically significant by OIRA under Exec. Order 12,866..there are about 75-100 major rules each year --> a non-major rule may take effect whenever the agency determines but a major rule cannot take effect for at least 60 calendar days after it is submitted to Congress (or, in some situations, a longer period)…..in case of either major or non-major rules Congress can nullify the rule by enacting a joint resolution of disapproval…a joint resolution is like a statute; it must be approved by both houses and signed by the Pres (or repassed by 2/3 of each house if Pres. Vetoes it)

    7.

    Seperation of powers --> post-Chadha cases from S.Court have reinforced cons. Constraints on Congress's abiilty to control admin actions but Courts doctrinal analysis has not been consistent….instead of relying squarely on textual provisions such as bicameralism and presentment clauses involved in Chardha the Court has sometimes used the separation of powers doctrine in its nontextual aspect….casees like Bowsher (discussed later) are one of these..in Bowsher Court found implicit in the Cos a command that Congress play no direct role in the execution of the laws and therefore Congress may not revmoe an officer who is engaged in executive functions even if it complies with the bicameralism and presentment clauses of the Constitution….even the possibility of such removal DQs an officer from wielding exec power…in Bowsher it meant that the Comptroller General could not perofmr executive task of determining how much spending would have to be cut from the federal budge in order to meet the deficit reduction targets of the Gramm-Rudman-Hollings balanced budget legislation

    9.

    Presidential Revision --> Court revisited the reasoning of Chadha when it struck down the Line Item Veto Act in Clinton v. City of New York in 1998…Court held Act uncons. Allowing for line item veto on a budget asserting that the cancellation procedure would have allowed the President, in legal and practical effect, to amend the appropriations act by repealing a portion of it; the Presentment clause did not allow him to do that unilaterally; to permit the Pres to create a different law - one whose text was not voted on by either House of Congress or presented to the Pres for his signature would alter the carefully drawn lawmaking procedures of Article 1 §7 according to the Court

    10.

    Notes & Questions (pg.415)

    Notes & Questions (pg.415)Monday, December 13, 20105:22 PM

    Ch.7 Page 27

  • Professor's Notes:Held-

    Congress is in session for the bulk of each year and states are not so creative methods of facilitating legislative control over admin may be more defensible at state level than at federal level….state legl far less able than members of Congress to exercise influence through informal oversight mechanisms such as hearings or direct contract with administrators

    i.

    State legislative vetoes --- Many state legislatures have adopted legislative veto provisions authorizing a single legislative committee to exercise disapproval authority over agency regulations

    1.§7.4.2 The Legislative Veto in the States

    §7.4.2 The Legislative Veto in the StatesThursday, August 26, 20101:59 PM

    Ch.7 Page 28

  • Professor's Notes:Held-

    Oversight committeesInvestigations and hearingsFunding measuresDirect contacts

    Aside from amendment or repeal of substantive legislation and the various forms of legislative veto there are some other controls a Congress or state legislature uses:

    •§7.4.3 Other Legislative Controls

    §7.4.3 Other Legislative Controls - doneThursday, August 26, 20102:00 PM

    Ch.7 Page 29

  • Presidents and governors indirectly control agency action by exercising their authority to appoint and discharge officials who execute the laws

    This section considers the scope of this authority as well as the extent to which Congress or a state legislature may limit or even share in the exercise of appointment and removal powers

    §7.5 Executive Control: Personnel Decisions

    §7.5 Executive Control: Personnel DecisionsThursday, August 26, 20102:03 PM

    Ch.7 Page 30

  • Professor's Notes:Held-Qualifications are usually upheld unless the infringe too much on chief executive officers power•

    §7.5.1 Appointment of Officers

    §7.5.1 Appointment of OfficersThursday, August 26, 20102:04 PM

    Ch.7 Page 31

  • Buckley v. Valeo*US Supreme Court (1976)424 US 1

    Facts of the Case:In the wake of the Watergate affair, Congress attempted to ferret out corruption in political campaigns by restricting financial contributions to candidates.

    1.

    Among other things, the law set limits on the amount of money an individual could contribute to a single campaign and it required reporting of contributions above a certain threshold amount.

    2.

    The Federal Election Commission was created to enforce the statute.3.

    Issue:Did the limits placed on electoral expenditures by the Federal Election Campaign Act of 1971, and related provisions of the Internal Revenue Code of 1954, violate the First Amendment's freedom of speech and association clauses?Rule:Disclosure of association membership and contribution status are generally protected by the First Amendment. However, when this information is sought to quell potential corruption and misuse of funds, the benefit of disclosure outweighs the harm to the particular individual.

    Conclusion:

    First, it held that restrictions on individual contributions to political campaigns and candidates did not violate the First Amendment since the limitations of the FECA enhance the "integrity of our system of representative democracy" by guarding against unscrupulous practices. Second, the Court found that governmental restriction of independent expenditures in campaigns, the limitation on expenditures by candidates from their own personal or family resources, and the limitation on total campaign expenditures did violate the First Amendment. Since these practices do not necessarily enhance the potential for corruption that individual contributions to candidates do, the Court found that restricting them did not serve a government interest great enough to warrant a curtailment on free speech and association.

    In this complicated case, the Court arrived at two important conclusions.

    Professor's Notes:It is for Congress to decide which expenditures will promote the general welfare and in this case the electoral process needed cleaning up

    -

    Principal officers are always selected by president and inferior officers may be with Congress approval but line between two is unknown at best….Morrison gets into this a bit

    -

    The Case in our book is about appointments and strips appointing from some offices from Congress

    -

    Footnote 162 of Bukcley states that mere employees of an agency (who do not exercise significant authority pursuant to the laws of the United States) need not be hired pursuant to the Appointments Clause at all…sometimes hard to think who is an employee as opposed to being an officer of the US

    -

    Springer v. Government of Phillipine Islands --> legislative power, as distinguished from executive power, is the authority to make laws, but not to enforce them or appoitn the agents charged with the duty of such enforcement…the latter are executive functions

    -

    State appointments --> state governors appoints most executive branch officers some with and some without legislative confirmation..other exec branch officials are voted in

    -

    Regulating Politics --> in cases that like Buckley involve regulation of the political process, state courts have displayed a variety of approaches…one being balancing test, which is on pg.438 (1) nature of power exercised by agency (2) degree of control by legislature (3) was legislature usurping exec (4) practical results of the blending

    -

    Legislatures as appointees --> can't do it while you're in office and states follow suit for the most part (pg.439 top)

    -

    Qualifications --> legislatures routinely prescribe the qualifications exec. Appointees must meet…usually upheld at both fed and state lvl unless too infringing

    -

    Buckley v. ValeoThursday, August 26, 20102:04 PM

    Ch.7 Page 32

  • Professor's Notes:Held-

    §7.5.2 Removal of Officers

    §7.5.2 Removal of OfficersThursday, August 26, 20102:06 PM

    Ch.7 Page 33

  • Professor's Notes:Held-Kansas court put in balancing test (pg.438)•

    Except in its provisions on impeachment the fed Cons. Does not expressly speak to the ? Of removing admin officials from office

    Myers v. US S.Court 1926 --> Congress could not limit Prezs removal power over any officer of US who Prez appointed…less than a decade later in Humphrey court said some of the language in Myer had been too broad

    §7.5.2a The Rise of the Independent Agency

    §7.5.2a The Rise of the Independent AgencyThursday, August 26, 20102:07 PM

    Ch.7 Page 34

  • Humphrey's Executor v. United States395 U.S. 602 (1935)

    Facts:President Hoover appointed, and the Senate confirmed, Humphrey as a commissioner of the Federal Trade Commission (FTC).

    1.

    In 1933, President Roosevelt asked for Humphrey's resignation since the latter was a conservative and had jurisdiction over many of Roosevelt's New Deal policies.

    2.

    When Humphrey refused to resign, Roosevelt fired him because of his policy positions. 3.However, the FTC Act only allowed a president to remove a commissioner for "inefficiency, neglect of duty, or malfeasance in office."

    4.

    Since Humphrey died shortly after being dismissed, his executor sued to recover Humphrey's lost salary.5.

    Issue:Did section 1 of the Federal Trade Commission Act unconstitutionally interfere with the executive power of the President?

    Rule:

    Analysis:

    Conclusion:The unanimous Court found that the FTC Act was constitutional and that Humphrey's dismissal on policy grounds was unjustified. The Court reasoned that the Constitution had never given "illimitable power of removal" to the president. Justice Sutherland dismissed the government's main line of defense in this case which relied heavily on the Court's decision in Meyers v. United States (1926). In that case the Court upheld the president's right to remove officers who were "units of the executive department." The FTC was different, argued Sutherland, because it was a body created by Congress to perform quasi -legislative and judicial functions. The Meyers precedent, therefore, did not apply in this situation.

    Professor's Notes:Independent agencies such as the SEC cannot have their heads removed by the president without good cause

    -

    Most fundamental thing about ind. Agency is that its head or heads cannot be removed by pres except for "good cause"

    Exec. Branch agencies on the other hand are typically cabinet depts.

    Independent Agencies --> Red. Reserve Board, Nuc Reg. Commission, SEC, FCC are all examples…done so these agencies can make their decisions without political influence

    -

    Removal of adjudicators --> Wiener v. US 1958 S.Court --> court invalidated Pres removal of member of War Claims commission….congress had established comm. With 3 year life span to resolve claims of injured vets..statute said nothing about how a commish could be removed….Court held that b/c comm. Had been created to adjudicate according to law the philosophy of Humphrey precluded Pres from removing its members simply b/c he wanted his own appointees to serve instead

    -

    No removeal withou cause○

    Heads can appoin staff on their own authority○

    Greater authority to conduct litigation○

    Ind. Agencies do appear to have more autonomy from pres control than executive branch agencies have

    -

    However, both ind. & exec. Agencies work closely with the Pres in fomulating policy and in mediateing inter -agency disputes….plus all submit budgetary request each year

    -

    In shorth, the de facto independence of an agency from pres control epends much more on political factors than on whether the agency is formally independent

    -

    Humphrey's Executor v. United StatesThursday, August 26, 20102:07 PM

    Ch.7 Page 35

  • Professor's Notes:Held-Humphrey's Executor has always been a controversial decision•

    Supreme Court responded to this in Morrison v. Olson•

    §7.5.2b Removal Issues in the Modern Era

    §7.5.2b Removal Issues in the Modern EraThursday, August 26, 20102:08 PM

    Ch.7 Page 36

  • Morrison v. OlsonUS Supreme Court 1988487 U.S. 654

    Relevant Facts: The Ethics in Gov't Act of 1978 in part created the office of "Independent Counsel," which would be implemented to investigate and if appropriate prosecute certain high-ranking gov't officials for violations of federal criminal laws.

    1.

    After being notified of a possible offense, AG has 90 days to decide whether to apply to the Circuit Court of D.C. for the appointment, which then appoints the prosecutor and defines their jurisdiction.

    2.

    Indep. Counsel proceeds until she reports it is "completed" or when the Circuit Court deems it as such.3.DF Olson, then head of Department's Office of Legal Counsel, was accused of providing misleading testimony to a congressional subcommittee.

    4.

    Indep. Counsel Alexia Morrison appointed to investigate.5.Olson moved to quash her subpoenas on the ground the above graph was unconstitutional. Court of Appeals agreed, this Court reverses.

    6.

    Issue:Under constitutional law, is the Ethics in Government Act of 1978 invalidated by the Attorney General's

    ability to apply to the Circuit Court of D.C. for appointment of "Independent Counsel" after AG's investigation into the possibility of prosecuting certain high-ranking gov't officials is warranted?

    Holding:Yes. The Independent Counsel, is , in fact, an inferior officer of the executive department, and the judicial branch has not stepped on the executive toes in the implementation of this law.

    Court's Rationale/Reasoning:First off, there was no Appointments Clause violation. So is Morrison an inferior or principal officer, the latter of which makes the Act violative of the Appointments Clause. Morrison it was determined was inferior, as being subject to removal by Atty General for good cause, is empowered to perform only certain duties, and is otherwise to comply with policies of Justice Dep't, and has limited tenure.Congress can create some interbranch appointments of inferior officers, such as court -appointed commissioners, which had limited prosecutorial powers. It is understandable there might be some concern over the judiciary exerting too much power over the independent counsel, but since the Court of Appeals had no further say than appointing Counsel, there was no incongruity interbranch appointments.The Court does not see the Special Division's supervising of the Indep. counsel as a significant encroachment upon executive power or upon the prosecutorial discretion of the Indep. counsel, despite the fact that its supervision alone is not typical of traditional judicial powers. The duty of this Court is to construe the Statute narrowly, thus, their supervision over Indep. counsel is not to the extent that past legislation has undertaken, whereby powers from another branch are usurped; here the discretion to remove the appointee lies solely in the hands of the Atty General.Neither does the "good cause" removal provision in the statute. The functions by the appointee are executive as those under a law enforcement provision. Even though Indep. counsel exercises a great deal of discretion and judgment, this Court does not see how the President's need to control the exercise of that discretion is so central to the functioning of the Executive Branch as to require as a matter of constitutional law that the counsel be terminable at will be the President.There is no judicial usurpation of properly executive functions either. There are no Federal hearings to remove officers, and the appointment of the Indep. counsel themselves is not an executive function, since Congress has vested that authority in the judicial. But the court cannot appoint special counsel themselves; the appointment must come from the Atty General, of the executive.Last, there is no impeding on the powers of the executive branch in any way that is impermissible. It can be argued that the Atty General and the rest of the executive has no power over the nominee: they cannot appoint them, the President's supervisory position in somewhat diminished, and does not determine counsel's jurisdiction. However, Atty General may remove for good cause and the term specified is small.

    Rule:Appointments clause portion at work here: "...but the Congress may by Law vest the appointment of such inferior officers, as they think proper, in the President alone, in the Courts of Law, or in the Head of Departments."OYEZ: Conclusion: The Court addressed a number of constitutional issues in this case and upheld the law. The near-unanimous Court held that the means of selecting the independent counsel did not violate the Appointments Clause; the powers allocated to the special court did not violate Article III; and the Act was not offensive to the separation of powers doctrine since it did not impermissibly interfere with the functions of the Executive Branch

    Important Dicta:The language of the "excepting clause" admits no limitation on interbranch appointments, but "congress has what the Court calls "as they think proper" gives it significant discretion to determine whether it is proper to vest the appointment of executive officials in the "courts of Law."

    Dissenting:(Justice Scalia): By application of this statute in the present case, Congress has effectively compelled a

    Professor's Notes:From Youngstown: While the Constitution diffuses power the better to secure liberty, it also contemplates that practice will integrate the dispersed powers into a workable government. It enjoins upon its branches separateness but interdependence, autonomy but reciprocity.

    -

    Note that executive can fire this person at will○

    This line of thinking is not a huge burden on the president b/c it does not mess with exec power all that much

    -

    The Ethics in Government Act of 1978 created a special court and empowered the Attorney General to recommend to that court the appointment of an "independent counsel" to investigate, and, if necessary, prosecute government officials for certain violations of federal criminal laws.

    Facts of the Case:

    Did the Act violate the constitutional principal of separation of powers?

    Question:

    The Court addressed a number of constitutional issues in this case and upheld the law. The near-unanimous Court held that the means of selecting the independent counsel did not violate the Appointments Clause; the powers allocated to the special court did not violate Article III; and the Act was not offensive to the separation of powers doctrine since it did not impermissibly interfere with the functions of the Executive Branch.

    Conclusion:

    From Notes: Legislative Removal - while Humphrey, Wiener, and Morrison declare that Congress may limit the President's power to remove some agency officials, it does no follow that Congress may retain for itself the power to remove officials engaged in administrative functions….indeed Congress lacks that power, according ot Bowsher v. Synar which is discussed in Morrison

    -

    First, appellant is subject to removal by a higher Executive Branch official.

    1.

    Second, appellant is empowered by the Act to perform only certain, limited duties.

    2.

    Third, appellant's office is limited in jurisdiction….independent counsel can only act within the scope of the jurisdiction that has been granted by the Special Division pursuant to a request by the Attorney General

    3.

    Finally, appellant's office is limited in tenure. 4.

    Principal vs. Inferior…in this case subject was inferior-

    Bowsher only denies Congress a formal role in discharging agency officials…on an informal lvl, members of Congress can extort enormous influence on an admins decisions about whether particular agency officials will stay or go

    -

    Cabinet members help shape policy based on current administration's wishes

    -

    Question is: is the job the job of a principal officer and if you are then you ask if they were nominated by pres and confirmed by Senate

    -

    Mo