ClassNotesAdministrativeLawAdler

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Administrative Law

Professor Libby Adler

Wednesday, May 28, 2003 (Class 1)

• Office Hours: Monday 1pm-3pm

• Hypothetical: Congress discussing legislation governing sale of alternative medicines. Alternative medicines not tested with same standards as drugs.
• Lack of expertise on issue, solutions
  • Get expert to testify
  • Delegate agency (e.g., FDA) or create agency to deal with substantive problem
• Create "Alternative Medicines Bureau" (AMB) to regulate alternative medicinal products.
• What does AMB need?
  • Testing authority
  • Money
  • Authority to make rules
• Limits on agency regulations:
  • Enabling statute (ultra vires)
  • Can't violate constitution
• Need to have some way to stop agency--some right of action.
• Agency needs to have some coercive power to enforce regulations.
• Needs some sort of adjudicatory review process--internal and external.

• Constitution, Article I Section 1: All legislative powers shall be vested in Congress (elected representatives).
• Central themes
  • What is proper role of unelected bureaucrats in a democratic system?
    • Separation of powers
  • Procedural due process.
    • If agency has authority to enforce regulations against private entity, what process should be afforded?
    • Are courts better than agency at enforcing regulations? Judicial authority issue.
  • What happens if agency promulgates regulation inconsistent with legislative policy?
    • What recourse do private parties have?
  • Historical and political context.

Monday, June 2, 2003 (Class 2)

• Legislative grants of statutory authority to executive agencies
• How far can delegation go?
• Article I Section 1 of Constitution says "all legislative powers invested in Congress."

Amalgamated Meat Cutters v. Connally

[337 F. Supp. 737] 1971 District of Columbia Court of Appeals (cb62)

• Economic stabilization act of 1970 authorized President to issue executive order to stabilize prices, and to delegate authority to an agency.
• Nixon created "Cost of Living" council, which issued order under act freezing wages and salaries for 90 days.
• Union had contract for wage increase when wages were frozen, sues.
• Union seeks declaratory judgment that act and order are unconstitutional: too much power to President.
• Union's position
  • Panama Refining and Schechter Corporation, both dealing with New Deal Legislation "National Industrial Recovery Act."
  • Panama Refining permitted President to exclude certain oil products from interstate commerce, but gave no criteria. Held to be unconstitutional delegation of legislative power.
  • A.L.A. Schechter Poultry Corporation: President could approve industry codes of competition. Codes had to be "representative" of industry practice and could not promote monopoly. Insufficient statutory guidance, gave President too much discretion.
  • Non-delegation doctrine
• Employer's position
  • Yakus: 1944 case involving "Emergency Price Control Act". Statute required maximum prices be "generally fair and equitable" and giving due consideration to prevailing prices. Sufficient guidance to uphold statute.
• Court holds there is no difference "in kind" between legislature and agency; question is one of limits.
• Burden is on plaintiff to prove an absence of standards such that it would be impossible to ascertain whether legislature's will had been obeyed.
• Court finds there are standards in act: President can't single out an industry; Yakus provides some guidance.
• Although Act itself does not provide context for "fair and equitable," legislative history does. Just difference in "drafting style."
• Short time limit, thus Congress can revisit if it doesn't like what President is doing.
• APA gives union option for contesting act, but:
  • Exception to APA permits agency to avoid notice and hearing in certain cases, this was upheld in Yakus, similar to this case.
  • How will judicial review under APA know whether regulation was valid given lack of standards?
• Non-delegation doctrine, while still valid, is rarely used in administrative law. Last Supreme Court ruling striking down law under non-delegation doctrine was 1935.

Whitman, Administrator of Environmental Protection Agency, et al. v. American Trucking Associations, Inc., et al.

• §109 of Clean Air Act grants EPA power to set air quality standards and review them every five years.
• Court of Appeals held that §109, as interpretted by EPA, did not provide intelligible basis for setting NAAQS; EPA could render statute constitutional by reinterpreting it.
• Supreme Court holds that agency cannot cure constitutional deficiency by interpretting statute in a more limited way; agency's voluntary self-denial has no bearing on non-delegation.
• Question: has Congress articulated intelligible principle for agency to follow?
• Standard: uniform standards at level which is requisite to protect public health. Similar to standards approved in other cases.
• Bottom line: Court will be deferential to Congress.
• Stevens' Concurrence (joined by Souter): power delegated is legislative but within limits and thus constitutional. If same standards had been issued by Congress, everyone would agree they were legislative.
• Thomas: Constitution does not speak of "intelligible principles." Could be case where intelligible principle exists but too much power has been delegated.

Industrial Union Department

• Union: OSHA requires safety at all cost.
• Employer: Safety should be balanced with cost.
• Rehnquist: by not being clear, Congress passed on difficult question to agency.

• Ways to Control Administrative Agencies
  • Accountability of executive
  • Legislative
  • Judicial

Sun Ray Drive-In Dairy, Inc. v. Oregon Liquor Control Commission

[517 P.2d 289] 1973 Oregon Court of Appeals (cb75)

• Oregon liquor commission may refuse to license applicant if it has reasonable grounds to believe that there are sufficient licensed establishments in area or not in public interest or convenience.
• Sun Ray Drive-In Dairy denied license, challenges denial.
• Liquor control officer rejected license because of area residents complaints, large number of existing outlets, not a broad inventory of groceries (abandoned).
• Supervisor had no "yardstick," used part experience and judgment to uphold officer's recommendation for denial.
• Director of licensing reviews decision: "creamed peas" test--not enough groceries to be legitimate.
• Court says it cannot review because there are no standards to review against--how to measure sufficiency, how important are public objections, etc..
• Policies are unwritten rules passed on orally, without stabilizing effect of written word.

Summary

• Amalgamated Meat Cutters and American Truckers: non-delegation doctrine is not of much use.
• Difference between legislative function and administration action is not "one of kind" but "one of degree."
• What degree?
  • Intelligible principle doctrine
  • Deference to Congress
• Clear policies and rules don't necessarily have to come from legislature.
• Standards must come from somewhere.

Assignment #1

• Not "heavy lifting"--approximately 2 hour assignment
• Short memo to insure you understand difference between legislative statute and agency regulations
• Choose agency, find regulation issued by agency pursuant to statutory authority.
• One page memo to supervising attorney explaining the situation.
• Due on Monday.

Wednesday, June 4, 2003 (Class 3)

Review

• Amalgamated Meat Cutters, while not overruling non-delegation doctrine, left it practically useless in most cases.
• Sun Ray Drive-In Dairy: Oregon court was comfortable with absence of clear policy language from legislature, but uncomfortable with lack of clear policy from liquor commission. Agency is at fault; not legislature.

Continued Legislative Control of Administrative Agencies

Immigration and Naturalization Service v. Chadha

[462 U.S. 919] 1983 United States Supreme Court (cb86)

• Chadha is student who overstayed visa, became deportable.
• Under § 242(b), Chadha could be deported after a hearing.
• § 241(a)(1): allows INS to decide not to deport someone otherwie deportable.
• § 244(c)(1): one house of Congress can veto suspension of deportation.
• Resolution passes in House with little debate, denying six suspensions.
• 9th Circuit: INS sides with Chadha.
• Problem: Congress is not completing legislative process--usually Congress can only act when both houses pass and presented to President.
• Four specific exceptions to bicameral and presentment requirements: impeachments, impeachment trials, approval of presidential appointments, treaties.
• Must get approval from both houses for legislative acts; adjournment is example on non-legislative act.
• Court finds action was legislative.
• Why is action not legislative when Attorney General acts but it is when Congress acts? Because Attorney General is limited by legislation.
• Powell concurrence: Opinion is too broad. Congress was encroaching on judicial rather than executive authority.
• White dissent: legislative veto insures accountable executive.
• Congress has impossible choice between putting all details into statute or hand over policymaking power to agencies.
• Rehnquist dissent: legislative veto is not severable; whole statute should be struck.
• Options in absence of legislative veto
  • Pass legislation through both houses and approve by president (or override presidential veto)
  • Power of the purse
  • Congressional review act
  • More specific statutes

Commodity Futures Trading Commission v. Schor

[478 U.S. 833] 1986 United States Supreme Court (cb108)

• Statute: Commodity Exchange Act; prohibits certain conduct in commodities futures trading.
• Prohibits conduct by brokers; enables customers to seek redress before Commission. Reparations are enforceable in court.
• Schor is customer of broker Conti, has debit balance, claims broker violated CEA.
• Conti filed suit against Schor simultaneously in Federal District Court, seeking balance of claim. Schor makes counterclaims of CEA violation.
• Schor moves for dismissal because of CFTC process; court refuses; but then Conti agrees to have all claims heard before Commission.
• Administrative Law Judge (ALJ) rules in Conti's favor on claim and counterclaim.
• Schor then claims that Commission doesn't have jurisdiction over state law counterclaim.
• ALJ rejects Schor's claim.
• District of Columbia Circuit Court of Appeals considers whether CFTC can hear counterclaims in light of Northern Pipeline.
• Northern Pipeline: bankruptcy case; involving delegation of power to Article I judge (like ALJ). Court struck down power of bankruptcy judges to hear counterclaims.
• Court of Appeals finds for Schor, saying counterclaims should not be heard by CFTC.
• Supreme Court remands for reconsideration in light of Thomas v. Union Carbide.
• Thomas v. Union Carbide: company invents rodenticide, allows EPA to rely on private company's testing of product, subsequent companies needs to reimburse the first company for testing. If companies cannot agree on amount, then they must go to binding arbitration. Scheme challenged but upheld by O'Connor in Thomas, because private rights' issue (debt owed by one company to another) and public law regulatory scheme were so close as to make the nature of the dispute suitable by agency resolution.
• On remand, Court of Appeals again finds counterclaims beyond CFTC's jurisdiction.
• Congressional intent: although Congress has revisited statute twice since CFTC took jurisdiction over these sorts of counterclaims, it has not amended act.
• Judicial efficiency: does it make sense to have the same issues decided in two different fora, where bodies could end up with different result? If CFTC can't hear counterclaims, then everything will end up in court.
• Question remains: is there a violation of Article III?
• O'Connor holds that Article III is there primarily for personal individual rights protection, not to preserve structure of constitution. Personal rights can be waived; and right to Article III court review can also be waived.
• Court declines to adopt "formalist" approach to Article III structural purpose. Not concerned with hypothetical "slippery slope."
• Plenty of judicial oversight--if administration makes mistake, judicial review occurs de novo.
• Public rights vs. private rights distinction from Northern Pipeline: "look before form to substance," to see that this function does not create threat to separation of powers.
• 7th amendment: guarantees jury trial for trials "at law", but this is not a common law suit.
• Brennan, Marshall dissent: significant departure from Constitution; makes individuals subject to decisionmakers suspectible to majoritarian pressures.
• Not appropriate to use balancing and practicality here; constitutional concerns at risk. Absolute principle should be used.
• Because individual and structural interests served by Article III are coextensive, Brennan would never allow waiver to right to Article III analysis.

Summary

• Continued struggle around boundaries around agency.
• Court protects scheme. Constitutional framework and private rights at stake.
• Court must determine whether agency function is legislative, judicial, or not.
• Depending on what is at stake, agency is unaccountable, faceless, or too accountable, too subject to sway of politics. Court is tolerant of these shortcomings, relying on judicial review as check.
• In Amalgamated, American Trucking, Chadha, Shorr: agency power increases. Non-delegation doctrine loses its force; congressional veto nullified; counterclaims can be heard.

Monday, June 9, 2003 (Class 4)

• Class cancelled on Wednesday, makeup class will be Friday, 6/20 4:00pm-5:30pm.

Review

• First Question: Has too much legislative power been delegated?
  • Answer: no. Difference between legislative and executive power is one of kind, not degree.
  • Sun-Ray -- Court turns toward agency, not legislature for policy
  • Shorr v. Conti: Are agencies competent to settle disputes rising out of common law? Even though administrative law judges lack life tenure, Court permits them to settle disputes. Would not be practical to let different facets of case be decided in different fora.
  • Practicality: agency personnel have expertise; more efficient/economical.
• Constitutional structure: legislature makes broad policy, judiciary is check.
• Chadha: Congress tried to check agency power with legislative veto, Court strikes down provision.
• Remaining veto options
  • Full legislative process
  • Sunset provisions
  • Appropriations Riders
  • Very detailed/rigid statutes with minimal discretion

USDA v. Murray

[413 U.S. 508] 1973 United States Supreme Court (cb121)

• Murray, unemployed, receives food stamps; ex-husband claims kid on tax return, since one child is over 18, eligibility for food stamps denied.
• Rule designed to prevent college stundents from claiming food stamps.
• No discretion, Congress thought it would be efficient.
• Constitution requires higher values than efficiency, however.
• Rehnquist: resembles Lochner, Court deciding social or economic policy.
• Agency power increased, because court ants agency to make individualized decisions.
• But statutes with irrebutable presumptions will always be over- and under-inclusive; e.g., driving age.
• Maybe food stamps are "more important" than driving rights, Court is elevating food stamps, but not to a fundamental right.
• Rehnquist accuses court of elevating food stamps to fundamental right.

Delaney Clause

• Delaney clause orders FDA to ban any additivie which causes cancer.
• No provision to balance risk against benefit.
• Congress enacted moratorium on saccharin ban, authorized warning labels.
• FDA could have determined whether tests were appropriate, if they had wanted to approve saccharin under the Delaney clause.
• Could also have decided it was not an additive.

Public Citizen v. Young

[831 F.2d 1108] 1987 District Court Court of Appeals (cb134)

• Color additives can only be approved if they meet Delaney requirements.
• FDA determines risk of certain additives is "de minimis."
• FDA concedes in writing that tests were appropriate, that Delany clause applies. Also concedes that "literal application" would require banning dyes in question.
• FDA must argue de minimis doctrine applies, even without explicit exception.
• De minimis doctrine can be used to advance legislative purpose, but not to thwart legislative purpose.
• Sunstein, Dwyer: more power to agency.
• Rehnquist, Ely, Lowe: should legislature be passing on this power to unelected policymakers?

Summary

• Difficult to tell where powers of one branch end and other begins.
• Agency power growing, are we worried about who is making decisions?
• Agency purchase: who works for agencies? Experts learned expertise in industries which they now regulate.

Monday, June 16, 2003 (Class 5)

• Make-up class this Friday, June 21, time TBA on Wednesday.

• Up until now: expansive understanding of agency power, justified by practicality, efficiency, expertise, legislative and judicial checks (balance of powers).
• Moving into procedural due process.
• Due process protection: when state action deprives individual of constitutionally cognizable interest (life, liberty, property). Then ask, what process is due?

Goldberg v. Kelly

[397 U.S. 254] 1970 United States Supreme Court (cb296)

• Plaintiffs: families receiving AFDC in New York, defendants are New York welfare department.
• Challenging lack of notice and hearing prior to terminating benefits.
• Caseworker who suspects recipient may be no longer eligible for aid, talks to recipient, then recommends termination to supervisor. Recipient then has 7 days to ask for review in writing.
• Recipient can have post termination evidentiary hearing ("fair hearing"); if they prevail, they get benefits retroactively.
• Question: does the due process clause require that the hearing be provided pre-termination rather than post termination?
• First, need to establish state action (no problem).
• Second, is welfare benefit constitutionally cognizable interest? Court calls it "entitlement." Quoting Reich article; welfare is more "like" property.
• Third, how much process is due?
• "How grevious is the loss?"
  • Very grevious... Welfare recipients are at the edge of subsistence.
• Balance at governmental interest in reducing cost. Court notes that later hearing could be avoided if pre-termination evidentiary hearing provide sufficient process.
• Requirement is notice and opportunity to be heard in meaningful time and manner.
• Notice must include reason for termination
• Decision must be based on evidence presented at hearing, and must give a reason.
• Decisionmaker must be unbiased.
• Can't based decision entirely on writing; in this case, recipients may not be able to express themselves wel in writing; also, credibility is often at issue; decisionmaker may need to ask questions; process value itself.
• Black dissent: dismay over welfare state, no situation in legal system where judgment proof claimant can force other to pay without security pending legal resolution. Private law argument.
• No due process claim, no cognizable interest, "this is just charity."
• Undesirable incentive: if recipient continues to receive benefits through hearing, then every person will contest termination, to get more money.
• Slippery slope: if benefits can't be terminated until evidentiary hearing, why not wait until judicial review?
• May also lead to requirement for appointed counsel.
• Berger dissent: maybe hearing will now be required for reduction in benefits, not just termination.
• "Constitutionalizing syndrome": Court is trying to solve problems with Constitution.
• If money is spent on process, less money will be available for assistance.
• Creates adversarial, rights-driven system. Poorest people may lose. No charitable goodwill anymore.

Welfare Reform

• AFDC replaced by TANF.
• 601(b): No individual entitlement. Should not be interpreted to entitle any individual.

Nancy Morawetz Article

• How could you still make out procedural due process claim after 601(b)?
• Look to state law. Even if federal law doesn't create entitlement, state law might.
• Is payment rule based or discretionary? If rule based, then more likely to be interpreted as entitlement.
• Most states continue to provide hearings.
• Lower court case out of Colorado: still Federal Entitlement.

Mathews v. Eldridge

[424 U.S. 319] 1976 United States Supreme Court (cb310)

• Plaintiff was on SSDI rather than AFDC as in Goldberg.
• Eligible if worker is unable to engage in substantial gainful activity.
• SSA questioned doctors and recipient, determined that Eldridge was no longer disabled for purposes of SSDI.
• Recipient has opportunity to respond to request further review by mail. Could submit more written evidence.
• Benefits terminated, Eldridge given six months to seek reconsideration, instead filed lawsuit.
• State action: no problem.
• Property interest: yes, following Goldberg.
• Hearing can take place post deprivation but prior to "final" decision.
• Mathews Test:
  • What is benefit at stake?
    • Continuation of benefits while claim is pending.
  • How weighty is interest?
    • Not so weighty, because it is not based on need. (doesn't really comport with reality).
  • Risk of erroneous deprivation/value of additional process
    • Less risk of error, because of "medical evidence".
  • Government Interest--administrative burden, efficiency, cost containment
    • Favors less process; expensive hearing, people would take advantage of process.
• Substantial deference to administrative agency, particularly where process is provided like this.

• Perspectives on Efficiency
  • Efficiency: value in and of itself, may effect other recipients
  • Interest of majority against private interest of individual
    • What about role to protect individual against public's interest?
  • Concession to practicality

Wednesday, June 18, 2003 (Class 6)

Board of Regents of State Colleges v. Roth

[408 U.S. 564] 1972 United States Supreme Court (cb326)

• Professor not rehired after one year, given no reason or hearing, suspects it is because of his criticism of administration.
• If Professor were tenured, or laid off prior to one year contract, would have had to have process.
• District Court found Professor's interest in his job outweighed state's interest, and lack of due process.
• Supreme Court holds that District Court erred by not first asking whether due process applied at all; does nature of interest fall within 14th amendment protection of liberty and property?
• First need state action, then need constitutionally protected interest--life, liberty, or process.
• Court finds Roth has no property right in rehiring. Second year of teaching was not guaranteed anywhere.
• "Property interests...are not created by the Constitution...they are created...by existing rules or understandings that stem from an independent source such as state law."
• Liberty: not merely limited to incarceration; but includes right to contract, pursue occupations, etc..
• Marshall dissent: everyone is entitled to government or reason why not.

Perry v. Sindermann

[408 U.S. 593] 1972 United States Supreme Court (cb332)

• Sindermann has taught for ten years, lead union, not rehired after ten years.
• Employer issues press release saying Sindermann was fired for insubordination, tells Sindermann nothing.
• College had no tenure system, but faculty guide said teachers should feel they have permanent tenure as long as they display cooperative attitude, etc..
• Elsewhere: someone with more than seven years on job has "de facto" tenure.

• Why give everyone procedure (Marshall)? People are more likely to make right decision if they know they are accountable.

• How broad should property be? How to define property?

Charles Reich Article

• Deals with entitlements like pension benefits, agricultural substitutes.
• What government gives, government can take away: "new feudalism."
• Reich conceives of entitlements as property; private property as conceived by founders--private realm, something the government can't arbitrarily take away.
• "New property": if government has plenary power to deny people entitlements, public-private distinction is disrupted.
• Under feudalism, status based property ownership, can't pass on property. No public-private distinction--who you are vs. what you have.
• Government licenses, etc., gives government power to invade private realm.
• Risks of Reich's position:
  • Could discourage government largesse

Cleveland Board of Education v. Loudermill

[470 U.S. 532] 1985 United States Supreme Court (cb338)

• Loudermill was public employee (security guard) in Cleveland, said he had never been convicted of felony on employment application, but later when employer discoverd he had been convicted, fired Loudermill for lying with no opportunity to respond.
• State statute granted employees continued employment as long as they performed well.
• Statute provided post-dismissal procedure; Loudermill claimed procedural due process requires pre-termination hearing.
• No problem with state action or property interest, both clearly defined.
• School Board argues that property interest is defined by procedures, to require additional procedures would expand the scope of property interest itself. If court requires additional procedures, then it is creating property right, which is legislature's job. "Bitter with sweet" theory, Rehnquist.
• Court applies Mathews test to determine how much process is due; pre-termination hearing is required, but need not be extensive.

• cb288: two cases, pay close attention for Friday.

Friday, June 20, 2003 (Class 7)

• Londoner v. Denver: individual property owners levied taxes based on improvements; Court holds individualized hearing is required to make arguments.
• Bi-Metallic Investment Co. v. State Board of Equalization: everyone assessed new tax, no right to hearing.
• Cases stand for distinction between rulemaking (general) and adjudication (specific)

Introduction to APA

• APA: Rulemaking vs. Adjudication Distinction, §551 definitions. Either Rulemaking or Adjudication by agency.
• APA passed in 1946, after new deal, during World War II--enemy was fascism.
• Walter Login Bill: would have imposed rigid procedural rules on administrative agencies, similar to judicial proceedings.
• Roosevelt vetoed bill, said it would have favored lawyers and powerful interests.
• APA, under Truman, was compromise, weaker requirements than Login bill.
• Most states also have APA.
• Requirements for APA "on the record proceeding"
  • Notice
    • Time
    • Place
    • Issue
    • Legal authority
  • Decision needs to be based on record
  • No ex parte communications
    • If breach occurs, usually can be cured, court will look and see how serious was breach, was cure accurate, etc..
  • Impartial decisionmaker
    • Issue of how separate are party bringing claim and decisionmaker, general preference for separation of functions
    • Usually need separate lines of authority between investigator/prosecutor and decisionmaker
    • Decisionmaker can't have personal financial interest (optometrist example), but not agency financial interest.
    • Chairman Dixon example--disqualified for past prejudice--actual bias.
  • People can appear through counsel, but no right to counsel.
  • Evidence
    • Lower standard than Federal Rules.
    • Admissible if not irrelevant, immaterial, or unduly repetitious
    • Admissible if it is kind of evidence upon which reasonable people would rely
  • Burden is on proponent of rule or order
    • Usually agency
    • Sometimes unclear, e.g., license--who is proponent?
  • Standard of proof is preponderance of evidence, except in exceptional cases (INS deportation proceedings)
  • Usually have findings of law, and findings of fact, for purposes of judicial review
  • May be internal levels of review for larger agency
• Can be modified by organic statutes

United States v. Florida East Coast Railway Co.

[410 U.S. 224] 1973 United States Supreme Court (cb356)

• Case concerns rulemaking rather than adjudication; general, rather than specific, and prospective.
• Interstate commerce commission (no longer exists) could regulate freight traffic, wanted to make it more expensive to rent rather than buy freight cars.
• Railroad was not permitted to appear in person, oral hearing before ICC.
• Act did not require rates to be set "on the record after opportunity for hearing", just "after hearing".
• §556(a) applies to hearings required by §553 or §554. Rest of §556 gives trial-type procedures.
• §553
  • (a) This section applies--presumption that this section applies in rulemaking proceedings.
  • (c) ...when rules are required by statute (organic/enabling statute) to be made on the record, after opportunity for an agency hearing, §556 and §557 apply instead of this subesction. Otherwise, §553 is presumed to apply.
• Rehnquist finds that "on the record after opportunity for hearing" is missing from statute, or language tantamount or equivalent to that.
• Thus, turn to §553 for requirements when §556 is not triggered.
• No requirement for in person hearing--written submission is sufficient.

• Process for deciding if §556 is triggered:
  • Is it rulemaking or adjudicatory situation?
  • If rulemaking, go to §553. Does enabling statute include "on the record after opportunity for hearing" or equivalent?
  • If yes, go to §556, otherwise §553 requirements.

Monday, June 23, 2003 (Class 8)

• Procedural due process and the Administrative Procedures Act
• Two types of administrative action: rulemaking and adjudication
• Formal rulemaking: trial-like procedure; informal rulemaking--less formal process.

Seacost Anti-Pollution League v. Costle

[572 F.2d 872] 1978 1st Circuit Court of Appeals (cb378)

• PSCO wanted to put heated water back into Gulf of Maine. Statute requires EPA to issue permit, heat is considered pollutant.
• EPA promulgated regulations to implement statute.
• Plan does not meet regulatory requirements, PSCO petitions for exemption.
• EPA holds informal proceeding, grants PSCO permit.
• Environmental groups request more formal, public hearing, get hearing.
• Permit is then denied, so PSCO appeals to higher ranking administrator, who assembles six in-house expert panel to make recommendation. Panel reviews record, decides that PSCO has met burden, except that PSCO needs to submit more information on backflushing.
• Agency requests additional written comments from PSCO and environmentalists, but refuses to hold hearing.
• Environmentalists claim EPA failed to hold hearing on final issue.
• Agency argues that APA does not apply to this proceeding.
• First, is this rulemaking or adjudication?
  • Court finds that it is adjudication because only specific applicant is effected.
• Thus, §554 (adjudications) applies:
  • When statute requires adjudication on the record after opportunity for hearing, §554 requirements apply.
• Statute in question here does not technically call for hearing on the record; instead calls for 'public hearing'.
• Court finds that this is exactly the sort of situation where APA was meant to apply, thus it will apply Act.
• For rulemaking presumption is against §556 hearing, unless Congress uses "magic words" on the record after opportunity for public hearing; but for adjudication court is going to presume hearing is required if issue involves important public and private rights, where court would need record for judicial review.
• §554(c)(2): hearing and notice under §556 and §557 if no settlement can be reached.

• §554 and §556 thus apply, even though "on the record" language is not present in organic statute.
• Environmentalists argument that there should have been opportunity to cross examine PSCO on supplement submissions.
• Question: was administrator empowered to accept supplement filings just in writing?
  • Under APA, §556(d), agencies can adopt procedures for submission of all or part of evidence in written form.
• However, organic statute (FWPCA) trumps exemption in §556(d), says public hearing is requiring.
• Cross-examination is not required, however, under statute. Court remands to administrator to determine whether cross-examination is required for full disclosure of facts.
• Issue of whether EPA experts should have been consulted
  • As long as synthesis is performed by people on top, then it is okay.
• Irony: point of proceduralism is to constrain discretion, but at the end, court says experts in agency can advise, justifies expansive understanding of agency power/discretion.
• Some of experts advice depended on materials not on record; court says those materials should have been on the record.

• Florida East Coast Railway stands for importance of on the record language in deciding between formal §556 hearing and informal §553 hearing for rulemaking proceedings.
• Seacost Anti-Pollution League stands for other standard for adjudicatory proceedings; D.C. Circuit, however, has reached the opposite conclusion. Thus, on the record language is required in D.C.
• APA does not apply when on the record or public/private interest test is not met in adjudicatory proceedings.

Heckler v. Campbell

[461 U.S. 458] 1983 United States Supreme Court (cb419)

• Campbell was hotel maid, had back condition, applied for disability benefit from Social Security Administration.
• Application denied by SSA.
• ALJ conducted inquiry according to HHS regulations, upheld denial of benefits.
• Easiest way to qualify: have one of listed disabilities
• Then, assess person's physical ability, age, education, and work experience.
• Then, go to guidelines/matrix, see if any work is available (according to regulations).
• Provision for showing that you are an exceptional case.
• HHS adopted standards so that each vocational expert wouldn't decide each case inconsistently. Instead do rulemaking procedure.
• Question: are regulatory guidelines permissible?
• 2nd Circuit Court of Appeals overturns HHS decision, troubled by application of matrix to individual. Applicant was not given opportunity to contest decision of what jobs were available to her.
• Supreme Court reverses 2d Circuit.

Assignment #2

• Regulatory drafting
• As agency counsel, need to look at poorly worded statute, look at policy problems in statute, and figure out how to resolve it by way of regulation.
• Assignment should be 4 pages.
• Due next Wednesday.

Wednesday, June 25, 2003 (Class 9)

Heckler v. Campbell

[461 U.S. 458] 1983 United States Supreme Court (cb419)

• Plaintiff wanted opportunity to litigate all elements of disability claim; Social Security Administration developed rules to apply to all claimants, that could not be relitigated.
• Once burden to prove job market has been carried one time in rulemaking proceeding, now burden is on claimant to prove job market doesn't apply. Thus rulemaking acts as burden shifting mechanism.
• Court determines rulemaking is permissible exercise of administration power.

Air Line Pilots Association v. Quesada

[276 F.2d 892] 1961 2d Circuit Court of Appeals (cb428)

• Aviation Agency promulgations regulation requiring pilots to retire at age 60.
• Pilots want individualized adjudicatory proceeding to decide whether they can still fly.
• Agency promulgated rule under §553 (informal rulemaking), was not required to make rule under §556.
• Pilots claimed §556 hearing was required as this was adjudicatory in nature; 2nd Circuit holds that it is broad, prospective rule, has character of legislative enactment, thus is not adjudication requiring formal hearing.
• Even though private property rights are effected (e.g., right to fly, pilot's license), Bi-metallic allows private property interests to be effected all the time as long as it is "across the board."
• [Pilot's union website]: chronology of battle for years by pilots to allow later retirement age.

National Petroleum Refiners Association v. Federal Trade Commission

[482 F.2d 672] 1973 District of Columbia Court of Appeals (cb440)

• FTC promulgated regulations requiring gas stations to post octane levels. Thus, at adjudication, only issue would be whether or not levels were posted, not whether it was deceptive trade practice.
• §5(b) authorizes FTC to hold adjudicatory hearing and issue cease-and-desist orders, but ability to promulgate specific, substantive rules is not present in enabling act.
• Plaintiffs claim rulemaking power of FTC is limited to procedural rules.
• Court rejects claim that rulemaking is procedural, says that is not present in statute.
• Allowing substantive rulemaking advances purposes of act.
• Congress and Judicial Review always remain as check on administrative power.

• Rulemaking and adjudication; formal and informal rulemaking
• Overwhelming majority of rulemaking is under §553 and analogous state laws, informal rulemaking.

Wirtz v. Baldor Electric Co.

[337 F.2d 518] 1963 District of Columbia Court of Appeals (cb454)

• Act required government contractors to pay prevailing wage.
• Secretary of Labor conducted confidential survey of industry to determine prevailing wage, published wage in rulemaking.
• Baldor Electric challenges prevailing wage determination, says it's too high.
• Walsh-Healey requires opportunity for hearing on the record, thus formal rulemaking.
• Plaintiff claims they need access to survey data to cross-examine, rebut, etc.. Also alleges that prevailing wage was not supported by substantial evidence.
• Two issues:
  • Whether introduction of testimony without underlying data denied NIMA opportunity to rebut and cross-examine
  • Whether decision was based on substantial evidence
• Under formal rulemaking, access to data was required, thus rule was invalid.

• Detailed procedural requirements
• Trial-like
• Aggressive judicial review, not a lot of deference

Pacific States Box & Basket Co. v. White

[296 U.S.C. 176] 1935 United States Supreme Court (cb462)

• Plaintiff is California business which manufacturers boxes for produce.
• Oregon regulations require certain box sizes.
• Why box sizes?
  • Uniform box sizes might be less likely to confuse consumer
• Notice existed for rulemaking, but unclear whether that notice would have reached an out-of-state entity.
• Informal rulemaking in this case, Court is very deferential to agency.
• Thus rule is fine, no need to prove reasons for rule.
• When agency acts, it is acting according to delegation of power from legislature, thus entitled to same presumption of validitiy.

Monday, June 30, 2003 (Class 10)

Informal Rulemaking

Automotive Parts & Accessories Association v. Boyd

[407 F.2d 330] 1968 District of Columbia Circuit Court of Appeals (cb468)

• Agency promulgates regulations requiring auto manufacturers to include head restraints, independent auto accessory manufacturers sue.
• Plaintiffs claim 556 557 should apply, because act says "APA will apply."
• Court looks into legislative history because requirements are not clear from face of act.
• Act calls for "record," plaintiffs claim this means formal hearing was required.
• Court holds that there was a record-result of informal hearing.
• §706: Scope of Review--court can reverse agency action... if arbitrary, capricious, abuse of discretion, not in accordance with law; contrary to constitution; in excess of jurisdiction, authority; without procedure; unsupported by substantial evidence in case subject to §556 and §557 of this title.
• When §556 and §557 apply to what has happened within agency, then §706 substantial evidence standard applies in court.
• Plaintiffs want court to "reason backwards" from judicial review standard (substantial evidence) to requirement for formal rulemaking. Safety Act includes same standard for judicial review as §706.
• Court rejects backwards reasoning from judicial review standard back to formal process.
• Plaintiffs then claim that §553(c) requires "concise general statement of base and purpose."
• Concise general statement can be used for judicial review.
• Paramount objective is to see if agency, given legislative task, has performed properly.
• Court upholds rulemaking, finds that agency provided sufficient rationale for its decision.

• Substantial evidence standard of review for formal hearing; arbitrary and capricious for informal. Does it make sense to have a stricter standard of review when there has been more process already?

United States v. Nova Scotia Food Products Corp.

[568 F.2d 240] 1977 2d Circuit Court of Appeals (cb514)

• FDA promulgated rule required smoked fish to be heated to high temperature in order to prevent disease. Made rule under §553, informal rulemaking.
• Inspector cited company for failing to comply with extreme temperature regulation.
• Company acknowledges it failed to comply, but said that if it complied it would ruin the fish.
• Company alleges FDA relied on undisclosed evidence, and thus rule is not supported by the record.
• Company says there was not an adequate record in informal rulemaking.
• Under §706, standard is arbitrary and capricious.
• FDA didn't keep record as it went along, instead assembled it post hoc for purposes of judicial review, thus no contemparaneous record.
• Record comprised comments received during rulemaking and scientific evidence. But scientific evidence was not made available during rulemaking itself.
• Inadequacy of availability of evidence relied on suggests arbitrary and capricious decisionmaking.
• Although agency may rely on own expertise outside the record, if there is evidence available that is not agency's own expertise, evidence should be introduced.
• Agency failed to include any explanation of continued commercial feasibility as result of regulations.
• Agency also failed to consider alternatives for making fish safe.
• Regulation is declared invalid under arbitrary and capricious standard.
• If agency wants to reinstitute rule, will need to go through process again.

• §553(b): exceptions to statute where--
  • Interpretive rules, general statements of policy, or rules of agency organization, procedure, or practice
  • When agency for good cause finds that notice and public procedure thereon are impracticable, unnecessary, or cotrary to the public interest

American Mining Congress v. Mine Safety & Health Administration

[995 F.2d 1106] 1993 District of Columbia Circuit Court of Appeals (cb505)

• Agency is empowered to regulate mine safety.
• In policy letter, agency defined "diagnoses" to include x-ray reading.
• Agency gave no notice or comment on diagnosis rule, because it was just an "interpretation" under §553(b).
• Issue: do regulations have force and effect of law?
  • Without rule, would agency lack sufficient basis in existing statutes and regs for agency action?
  • Was rule published in CFR?
  • Has agency invoked legislative authority?
  • Does it amend prior legislative rule?
• If answer to all questions is 'no', then you have interpretive rule.
• If "interpretation exemption" is too narrow, agency will do everything ad hoc.

Wednesday, July 2, 2003 (Class 11)

• Can courts require agency to create a more substantial record?
• Can courts require something more than the baseline of a §553 informal hearing, when that is all that is technically required?

Vermont Yankee Nuclear Power Corp. v. Natural Resources Defense Council, Inc.

[435 U.S. 519] 1978 United States Supreme Court (cb532)

• Adjudicatory hearing for Vermont Yankee's license to operate nuclear power plant.
• Vermont Yankee is granted license over NRDC's objection, months later Nuclear Regulatory Commission initiates rulemaking. Possible rules:
  • No measurable environmentable harm from nuclear waste disposal.
  • Develop matrix of environmental impact, that could be applied to all adjudications.
• Adopts second option--matrix.
• NRDC seeks review of rulemaking and adjudication in Vermont Yankee's case.
• Rule does not need to be applied retroactively to Vermont Yankee.
• DC Circuit held that, even though §553 requirements had been met, record was not substantial enough for judicial review.
• Supreme Court holds that §553 does establish a minimum, and in exceptional cases courts can require more.
• However, in this case, DC Circuit misapplied the law:
  • Review would be unpredictable and agency would always hold full evidentiary hearing if it doesn't know what the standard is.
  • Court is looking at outcome to determine procedure.
• Court accusing D.C. Circuit of "Monday Morning Quarterbacking"--looking back with more info.
• Fundamental mistake: D.C. Circuit assumed it needed a reviewable record; question is whether agency conducted itself in manner that Congress prescribed.
• Rehnquist cites Florida East Coast for proposition that §553 is maximum procedural requirements--but is this really true of the case?
• D.C. Circuit had held that §553 and §556 were a range; but Supreme Court holds that §553 and §556 are two options.

• Court is diminishing judicial review, sees itself as increasing power of democratically elected representatives.

Ex Parte Communication

• Ex Parte contact is prohibited in formal rulemaking and adjudication, what about informal rulemaking?

HBO v. FCC

[567 F.2d 9] 1977 District of Columbia Circuit Court of Appeals (cb540)

• FCC promulgated rules involving allowed programming.
• Allegation of ex parte communication between cable industry participants and FCC.
• Evidence that ex parte contact provided critical basis for rule.
• Court held that it was improper to have two records.
• On the other hand, agencies engage in informal contact all the time. Informal contacts are "bread and butter" of process of administration, appropriate so long as they don't frustrate judicial review.
• Court makes compromise:
  • Contact prior to notice of rulemaking is okay.
  • If contact will form basis for rule, put it in record.
  • Once notice goes out, ex parte contact is prohibited.

Action for Children's Television v. FCC

[564 F.2d 458] 1977 District of Columbia Circuit Court of Appeals (cb542)

• Same issue. Agency proposed rules around children's programming, but decided not to adopt them.
• Different panel reviews decision, including dissenter from HBO.
• New line:
  • Competiting claims to a valuable privilege.
  • When there are competing claims, risk of unfairness outweighs practical burden of insuring everything is in record.
• In this case, Court held Action for Children's Television was not making competing claim aas was made in Sangamon Valley Television Corp. United States [269 F.2d 221].

Sierra Club v. Costle

[657 F.2d 298] 1981 District of Columbia Circuit Court of Appeals (cb546)

• Deals with regulation of coal emissions.
• Sierra club claims ex parte contact rule was violated by:
  • Written comments taken after contact period.
  • Meetings with industry.
  • White house briefings
  • Meetings with pro-industry members of Congress.
• Written comments taken after closing of comment period
  • Added to record, no problem
• Oral communications with industry
  • This is how agencies work, beneficial
  • No problem, not explicitly prohibited by Act, does not concern conflicting private claims to valuable privilege
• White house briefings
  • Act is silent, thus no problem.
  • Executive branch needs to monitor administrative agencies, accountability, constitutional design.
• Congressional pressure
  • As long as there is no improper dealing, no new exchange of information.
• Thus, court holds that there was no procedural error.

Monday, July 7, 2003 (Class 12)

Informal Rulemaking Continued

• Contrast with adjudication, where bias/prejudgment is absolutely prohibited.
• In the legislative context, what does it mean to be impartial?

Association of National Advertisers, Inc. v. FTC

[447 U.S. 921] 1979 District of Columbia Circuit Court of Appeals (cb560)

• Toy manufacturers request FTC chairman to recuse himself, claim his public comments regarding advertisements towards young children showed chairman had prejudged factual issues.
• District Court finds that chairman should recuse himself, based on Cinderella Career & Finishing Schools, Inc. v. FTP [425 F.2D 583], where Chairman Dixon gave speech criticizing party before court.
• Court of Appeals holds that District Court erred in relying on Cinderella. Cinderella was adjudication, while this case involves a rulemaking.
• Sharp distinction between legislative and judicial models; legislator should have some bias.
• Recusal should only occur where commisioner has unalterably closed mind.

Discretion to Adjudicate

Securities & Exchange Commission v. Chenery Corp.

[332 U.S. 194] 1947 United States Supreme Court (cb573)

• Three Chenery cases--this is the end of second case.
• Utility company wants to reorganize, filed plan with SEC.
• Under Statute, SEC can approve or reject reorganization of utilities. New Deal law designed to control mergers and acquisitions in utility industry.
• Preferred stock would be converted to common stock to benefit officers, creates problem of duty of loyalty.
• SEC decided not to grant reorganization based on its understanding of common law duties, not on statute. Chenery I.
• Court requires rulemaking prior to SEC decision.
• On remand, SEC reaches same conclusion, but on different grounds:
  • Bases decision on statute, not common law fiduciary duty
• Current challenge in Chenery II: utility says SEC needed to have a rule, and it could not have been retroactive
• Court rejects challenge, says Chenery I only held that common law grounds was not sufficient basis for decision.
• Court does not require rulemaking--agencies have both rulemaking and adjudicatory powers. At this time, these powers are new, should not require rulemaking as soon as agency has mandate.
• Adjudication is sometimes necessary to fill in gaps between rules.
• Evolving understanding of statute applied retroactively, but every case of first impression has some retroactive effect.
• Jackson Dissent: troubled by retroactivity.
• Cf. Heckler v. Campbell, Quesada: Court says agency can do rulemaking rather than adjudication. In this case, Court says agency can do adjudication rather than rulemaking.

• Stare decisis effects of adjudicatory proceedings before an administrative agency are still not well settled.

National Labor Relations Board v. Wyman-Gordon Co.

[394 U.S. 759] 1969 United States Supreme Court (cb578)

• Wyman-Gordon ordered by National Labor Relations Board to furnish union organizers with employee list.
• "Rule" was created in Excelsior, where NLRB invited briefs from other employers.
• Wyman-Gordon argues that there is no "rule" from Excelsior, since there was no rulemaking procedure.
• NLRB argues that Chenery says it can use rulemaking or case-by-case adjudication.
• Court holds that adjudicated cases do serve as vehicles for formulation of agency policies, they cannot be "rules" per se.
• Order was still valid for Wyman-Gordon case, however, so Court upholds order.
• Dissent would not allow rule to be created in single case.

National Labor Relations Board v. Bell Aerospace

[416 U.S. 267] 1974 United States Supreme Court (cb581)

• Question of whether quasi-managerial staff are protected by NLRA.
• Supreme Court reveals Court of Appeals decision that rulemaking was necessary.
• Supreme Court reaffirms Chenery, leaving it up to agency to decide between case-by-case adjudication vs. rulemaking.

• Thus, it seems there is some stare decisis, but agency can't always get around rulemakig with adjudication.

Conclusion of Process Unit

• Efficiency: interest of majority, "public" interest, rather than interest of private party.
• Practicality: can't require every communication in executive branch to be on record, can't allow every welfare recipient to go all the way to Supreme Court before benefit can be terminated.
• Private interest: depending on weight of interest, different process will be required (Mathews). Interest must be constitutionally cognizable to begin with (Roth, Sindermann, Loudermill). Sometimes employment interest is cognizable, sometimes not.
• DC Court draws sharp distinction between "public interests" (like Action for Children's Television) and "private interests" (two companies vying for cable station).
  • Private interests ("competing claim to valuable privilege"), seems more like adjudication, ex parte contacts prohibited.
• Does nature of interest really drive courts' decisions as to what process is due?

• For next time, be sure to read Universal Camera.

Wednesday, July 9, 2003 (Class 13)

• "Some deference, not too much deference."

Universal Camera Corp. v. NLRB

[340 U.S. 474] 1951 United States Supreme Court (cb792)

• Taft-Hartley Act sought to curb NLRB's power: "NLRB decisions must be based on substantial evidence on the record considered as a whole."
• Hearing officer finds for employer; employee appeals to Board; Board finds for employee.
• Question: what is effect of Tart-Hartley amendment?
  • Does "on the record considered as a whole" mean hearing officer's decision has to be part of record for judicial review?
• 2nd Circuit holds that Tart-Hartley simply codifies existing principles; victory for agency.
• Justice Frankfurter holds that Taft-Hartley amendments along with APA were intended by Congress to heighten judicial review. "Congressional mood of dissatisfaction."
• Thus courts will be less deferential to agencies.

Citizens to Preserve Overton Park, Inc. v. Volpe

[401 U.S. 402] 1971 United States Supreme Court (cb749)

• Plaintiffs are conservation group, defendant is secretary of transportation.
• Citizens group trying to prevent routing of highway through park.
• Statute requires highway to avoid park if there is "feasible and prudent" alternative; if it is built through park, requires mitigation.
• Congress intends to protect parks unless there is no alternative.
• Secretary had claimed statute permitted him to balance competing interests.
• Court rejects balancing test; if it is a balancig test, park will never win.
• Court looks to APA to determine standard of review.
• § 706 (2) standards for setting aide:
  • Arbitrary, capricious, abuse of discretion (applies)
  • Constitutional rights (doesn't apply)
  • Excess of statutory jurisdiction (applies--this is claim of citizens)
  • Without observance of procedure (applies--citizens allege greater record was needed)
  • Unsupported by substantial evidence / unwarranted subject to de novo review (doesn't apply -- needs to be triggered in organic statute)
• Lower courts reviewed affidavits prepared for litigation rather than whole record of decision.
• Black and Brennan believe case should have been remanded back to Secretary; ultimately District Court did remand back to secretary.

• Strauss argues that courts should not have reversed Secretary's decision; this was political decision.
• Lucie White's response: Court was fulfilling countermajoritarian role, powerful group of citizens was able to litigate to Supreme Court.
• Judicial process could be part of political process, not totally separate animals.
• Will be difficult for court to distinguish between "pure procedure" rather than substantive outcome.
• Judicial review signals that earlier part of process failed.

Chevron, U.S.A. Inc. v. Natural Resources Defense Council, Inc.

[467 U.S. 837] 1984 United States Supreme Court (cb760)

• Amendments to Clean Air Act required non-attainment states to regulate stationary sources of pollution.
• Prior to Reagan, EPA interpretted stationary source to mean each polluting device; after Reagan, "bubble" concept, or whole factory, becomes stationary source.
• "Bubble" definition gives more leeway to polluters.
• NRDC argues that new definition is inconsistent with purposes of Clean Air Act.
• Court of Appeals found new definition impermissible: language of statute and legislative intent were ambiguous; but new definition is inconsistent with purpose of act, to improve air quality (not just maintain).
• Supreme Court reverse Court of Appeals, saying it should not have adopted judicial definition where Congress does not require it.
• If Congress has spoken directly to precise question and intent is clear, court must give effect to unambiguous intent of Congress. (this is case where court can reverse agency).
• If statute is silent or ambiguous, then court should determine if agency interpretation is permissible (i.e., not arbitrary, capricious, manifestly contrary to the statute.)
• Plaintiff was raising "policy" issues--suitable for legislative branch, not judiciary.

• Conservatives of 1940's and 1950's passed APA and Taft-Hartley Act to reign in New Deal agencies.

Monday, July 14, 2003 (Class 14)

Judicial Review of Agency Decisions

• New Deal Justices: Highly deferential to administrative agencies; justified deference by expertise.
• Conservatives claimed agencies did not have expertise, in fact, in case of National Labor Relations Board agency has pro-labor ideology masquerading as expertise.
• Conservatives won unexpected victory in 1950 with Universal Camera; Justice Frankfurter (New Deal Justice) read Taft-Hartley Act and APA together to require more scrutinizing judicial review of agency action.
• Universal Camera: Courts had been according agencies too much deference, need to be reigned in.
• 20 years between Universal Camera and Overton Park: Warren Court.
  • Expanded civil rights protections, struck down many state laws.
  • Expanded power of federal court.
  • Criticized as judicial activism, same charge as Lochner Court.
  • Following Lochner, New Deal Court rejected judicial activism into elected branches.
  • But in 1960's, Warren's Courts willingness to protect individual liberties, Judicial Activism became charge levied by conservatives against liberals, rather than vice-versa.
• 1971 Overton Park: aggressive review of administrative agency is fine with Justice Marshall.
• Need to understand back-and-forth of "judicial activism" to understand Chevron.
• Chevron is prevailing standard.
  • If Congress has spoken directly to precise issue before agency, and intent of Congress is clear, Court can set aside agency's interpretation of statute.
  • If Congressional intent is not clear, Court should not impose its own judicial construction, instead shoud decide if agency's reading is reasonable (i.e., not arbitrary and capricious or ultra-vires).
  • Very deferential standard. When agency action is overturned, it is usually on first prong.
  • Different from Overton Park, where 20 year Department of Transportation process was set aside.
  • Stevens is concerned about separation of powers, role of judiciary, political decisions.
  • If Statute is ambiguous, Congress must have implicit or explicitly delegated power to agency.

Scalia Article

• When there is ambiguous term, Congress probably didn't even consider it; not realistic to attribute Congressional intent to delegate decision to agency. Rationale is fiction.
• Chevron is still righly decided, though, because Congress is now on notice that when it creates ambiguity (intentionally or unintentionally) then ambiguity will be resolved by agencies not courts.
• Strict constructionist may not be so troubled by charges of judicial abdication of power to interpret law, because it is usually clear what Congress meant.
• "A Matter of Interpretation" -- book by Scalia and critics.

Food and Drug Administration, et al. v. Brown & Williamson Tobacco Corporation, et al.

[2000 WL 289576] 2000 United States Supreme Court (sp69)

• FDA promulgated regulations regarding tobacco sales to youth; employed informal rulemaking--notice and comment process.
• FDA claiming jurisdiction over tobacco for the first time.
• Tobacco companies claim agency action was ultra-vires, beyond agency jurisdiction.
• First question under Chevron: did Congress speak directly and unambiguously?
• O'Connor finds that Congress did speak clearly on issue. Not clear from face of FDCA, but instead from statutory context, other statutes that regulate tobacco.
• If FDA did have jurisdiction over tobacco, it would have to ban it entirely, because FDA can only approve "safe and effective" drugs.
• But Congress has acted to show that tobacco should not be banned, thus FDA is going against "clear congressional intent".

Gary Smith: Quid Pro Quo for Chevron Deference

• Smith thinks Chevron is abdication of judicial power, does believe there is ambiguity in statutes.
• Chevron might lead to more judicial review of process of rulemaking, thus could give advocates more opportunities at rulemaking stage.
• Rationale for Chevron: rulemaking resembles legislative process, thus should be afforded deference. But when insufficient process is used, then agency action less resembles legislative process, then it should be afforded less deference.
• Interpretive rules, policy letters, etc., should not be afforded deference under Chevron, since they are exempt from §553 requirements. Done informally, no opportunity for public input.
• "Pay now or pay later." Either open rulemaking to notice and comment ("now") or be subject to judicial scrutiny later ("later").

United States v. Mead Corporation

2001 United States Supreme Court (sp63)

• Statute empowers US Customs Service to decide tariff classifications.
• 46 offices of Customs Service issues 15,000 letters per year, no effect of letters beyond single issue.
• Mead's planners previously had no import duty; now characterized as diary, and thus tarriff attached.
• Question: does Chevron deference apply to US Customs Service decision?
• Majority (8-1) finds Chevron deference does not apply, because statute did not delegate force of law decision to agency to make tariff classifications.
• If Congress had given agency rulemaking authority, that would have suggested intent to grant agency power warranting deference.
• Tariff classifications are mere interpretations, policy letters, thus outside of Chevron purview.
• Deference, based on Skidmore v. Swift & Co., depends upon various factors.
• Scalia Dissent: agencies will now do informal rulemaking for everything, to get Chevron, will eliminate efficiency benefits of exceptions to §553.

Wednesday, July 16, 2003 (Class 15)

Johnson v. Robison

[415 U.S. 361] 1974 United States Supreme Court (cb837)

• Plaintiff was conscientious objector, did civilian service rather than military.
• Plaintiff sought declaratory judgment that denial of veteran's benefits interferes with religious freedom.
• Court dismissed for lack of subject matter jurisdiction.
• Statute says Veterans Administration decisions are final and conclusive,not reviewable by court.
• Question: does statute bar review of even constitutional claims?
• Court holds that statute bars review of decisions made under the statue, but not constitutional claims.
• Claim does not arise "under" statute, but rather is challenge of statute itself--what Congress' decision was.
• If §211(a) barred judicial review of constitutional claims, this would raise "serious concerns".
• No answer yet as to whether Congress actually could limit habeas/constitutional review.

Webster v. Doe

[486 U.S. 592] 1988 United States Supreme Court (cb850)

• John Doe worked at CIA, promoted, finally dismissed after revealing he was homosexual.
• Agency classified Doe as "security threat," would not say why, Doe challenges dismissal.
• §706 APA claim: dismissal was arbitrary, capricious, abuse of discretion; contrary to constitutional right; etc..
• First line of defense for agency: no review available; no jurisdiction to hear claim.
• Only question is whether National Security Act bars judicial review of dismissal. Preceeds merits of §706 claims.
• §701(a) APA: chapter applies except to extent that statute precludes judicial review, or if action is committed to agency discretion by law. §701(b) -- exceptions by limiting definiton of agecy.
• Court focuses on second exception: committed to agency discretion by law
• Rehnquist reads "committed to agency discretion" as being those cases where there would be no law to apply; court would have to invent a standard of review.
• Statutory standard: "whenever he shall deem such termination necessary or advisable in the interests of the United States..."
• No possible judicial review standard for whether director 'deemed' termination necessary.
• First holding: termination decision falls under §701(a)(2) exception for "committed to agency discretion by law."
• Second holding: statute does not show clear Congressional intent to foreclose review of Constitutional claims.
• Case is remanded for determination of Constitutional claims.
• Scalia dissent: can't operate out of personal vindictiveness, etc., could see if Director deemed etermination necessary or advisabl in the interests of the United States.
• Scalia would hold a(2) codifies common law jurisprudence of unreviewable decisions. I.e., a(1) is statutory preclusion, a(2) is common law preclusion.
• "Political question doctrine" -- judicially created, common law -- would be example of §701(a)(2) preclusion of judicial review.

• Robison: judicial review of agency decision involving constitutional issue is different from challenge to agency applying its own statute.
• Webster v. Doe: Rehnquist agrees with Robison, remands for constitutional claims.

• Dunn v. Retail Clerks International Association (1962): employer angry because union representatives were in workplace; hired photographer to capture union organizers; when union lost election, union claimed employer had intimidated employees with photographer and election should be set aside. Employer claims union engaged in unfair campaign practices.
  • Union prevails on claim and counterclaim at NLRB; employer sues NLRB to force it to prosecute union.
  • Issue: availability of review of agency inaction. Should plaintiff be able to force agency to act?

• Arguments for Precluding Judicial Review of Inaction
  • Separation of Powers
  • Lack of standard
  • Limited resources
• Arguments againts Precluding Judicial Review of Inaction
  • Sometimes public interest is at stake--e.g., USDA prosecution of violators of food safety standards.

• Question for Dunlop next time: how do we know whether decision not to prosecute union was not completely arbitrary?

Monday, July 21, 2003 (Class 16)

• §701(a)(1): judicial review precluded if by statute.
• §701(a)(2): committed to agency discretion by law; more ambiguous and complicated to apply.
  • Rehnquist: Precludes judicial review when there is no standard to measure against (e.g., when administrator deems ...) Remanded Doe's case, thought that if Congress intended to preclude judicial review of constitutional claims, this would raise serious questions.
  • Scalia: Either statute or common law doctrine could insulate decision from judicial review (e.g., common law deference to matters of national security). Common law preclusion of constitutional claims occurs regularly, would not have remanded case.

Judicial Review of Agency Inaction

Heckler v. Chaney

[470 U.S. 821] 1985 United States Supreme Court (cb876)

• Plaintiffs are prison inmates convicted of capital offenses, challenge use of lethal drugs for execution under FDCA.
• FDA Commissioner declines to take action, uncertain of whether it has jurisdiction in area.
• Court of Appeals: FDA did have jurisdiction, court could review it, and decision was abuse of discretion.
• Supreme Court decides only whether or not decision is reviewable.
• Is FDA's decision is not reviewable under §701(a)(2)?
• Could conflict with §706(2)(a): which allows review for abuse of discretion; how can it be abuse of discretion if it is not left to discretion under §701(a)(2)?
  • If there is no law to apply, then it isn't possible to review to see if agency has abused discretion.
• Court of Appeals: exemptions from judicial review should be read narrowly, presumption is that judicial review applies
• Supreme Court: exemption should be presumed to apply for agency inaction.
• One of the instances when there is no law to apply is when agency has failed to act.
• Rehnquist holds that this is not a license to disregard statutory mandate. Presumption of agency inaction is against judicial review; thus litigant trying to get review of inaction must show that agency is specifically disregarding statutory mandate. Burden is shifted to party seeking review.
• Declining to enforce usually means agency is not infringing on individual right. (but isn't this case, and others, e.g., child support enforcement, actually about individual rights?)
• Similar to prosecutorial discretion, infringes on executive branch to review inaction.
• Marshall's concurrence: criminal matters vindicate common public interest, but administrative enforcement involves ongoing or future injuries which Congress has chosen to make cognizable.
• Refusals to enforce should be reviewed on rational basis unless there is clear and convincing evidence to the contrary.

American Horse Protection Association, Inc. v. Lyng

[812 F.2d 1] 1987 District of Columbia District Court (cb889)

• Challenge by American Horse Protection Association of Secretary of Agriculture's failure to modify regulations American Horse Protection Act after study shows regulations are insufficient to protect horses as intended by regulations.
• Heckler v. Chaney did not involve rulemaking, Court expressly did not decide that issue.
• Some common factors between enforcement and rulemaking
  • Both involve expertise
  • Both involve agency declining to use its power against private interests
• Differences
  • Analogy to prosecution doesn't apply; here plaintiff is asking agency to set broad policy, not make specific decision. Here decision turns on law rather than facts.
  • Judicial economy: rulemaking is less frequent.
• §553(e): Each agency shall give an interested person the right to petition for the issuance, amendment, or repeal of a rule.
• §555(e): Prompt notice shall be given of the denial in whole or in part of a written application, petition, or other request of an interested persno... shall be accompanied by brief statement of the grounds for denial.
• If Congress wanted agency to explain action, must have been for judicial review.
• Court remands to agency for reasonable explanation for decision not to make rule.

Final Exam

• 10 page limit
• Tell partner how claims should be framed in complaint
• What to expect in motion to dismiss
• If court reaches merits, what do we expect

Wednesday, July 23, 2003 (Class 17)

Environmental Defense Fund, Inc. v. Hardin

[428 F.2d 1093] 1970 District of Columbia Circuit Court of Appeals (cb902)

• EDF petitions Secretary to issue notice on cancellation on DDT pesticides under FIFRA and also to classify it is an imminent hazard and thus to suspend registration immediately and expedited process towards final decision.
• Secretary files notice of cancellation but has not yet decided on imminent hazard.
• EDF sues to force Secretary to grant request for imminent hazard.
• Secretary claims matter is not ripe because there has been no final agency action.
• Requirement for final agency action is to prevent premature judicial intervention and to make sure legal dispute is brought into focus.
• Court finds that matter is ripe for consideration:
  • At some point, inaction is same as denying relief. (harder to make this argument now after Heckler v. Cheney 1985).
  • Issue won't be clarified over time.

Nor-Am Agricultural Products, Inc. v. Hardin

• Similar background, except that Secretary determined that there was an imminent hazard.
• Company sues, Secretary argues there has been no final agency action, and thus no review is possible.
• Court holds that, since there is further action (expedited process), matter is not yet reviewable.
• Court holds that it might have been reviewable if decision on imminent hazard had been "no", because it would have ended administrative process. But this isn't quite true, because if imminent hazard had been "no", then longer process would have continued.

Environmental Defense Fund, Inc. v. Ruckelshaus

[439 F.2d 584] 1971 District of Columbia Circuit Court of Appeals (cb905)

• Secretary determines no imminent hazard, EDF sues.
• Court finds action reviewable, because agency is finished deliberating on imminent hazard.
• Court disagrees with Nor-Am court; there is more process following either decision on imminent hazard question. Statutory scheme does not distinguish, for the purposes of judicial review, between decisions on imminent hazard, and also does not seem to preclude judicial review at this stage.
• Court does accept 7th Circuit Nor-Am reasoning on decision to not issue cancellation notice, after which there would be no further process.

FTC v. Standard Oil Co.

[449 U.S. 232] 1980 United States Supreme Court (cb910)

• FTC issues complaint against oil companies, claiming it has "reason to believe" that they had committed unfair methods of competition.
• Socal argues that there had been a final determination that they had "reason to believe"; should be reviewable.
• Supreme Court holds that there had been no final decision, even if there are litigation, etc., expenses to oil companies, this is just cost of living in a democracy.

Dalton v. Specter

[511 U.S. 462] 1994 United States Supreme Court (cb911)

• Secretary of Defense closing Naval Shipyard, challenged by unions, et al.
• Lengthy statutory process for deciding whether or not to close shipyard.
• Franklin v. Massachusetts: President is not agency, not reviewable under APA, Supreme Court remands to Court of Appeals to reconsider under Franklin.
• Court of Appeals decides that action is still reviewable on constitutional grounds.
• Court holds that action is not reviewable while under consideration by agency, because it is not final until President decides.
• When President acts, decision is final, but not reviewable because:
  • President is not agency under APA
  • Supreme Court rejects idea that there is a constitutional question every time President acts.

Abbott Laboratories v. Gardner

[387 U.S. 136] 1967 United States Supreme Court (cb918)

• Secretary of HEW issues regulation requiring generic name to appear every time brand name appears on drugs.
• Plaintiff challenges regulations as going beyond statute, which does not require generic name every time.
• Requirement that plaintiff has suffered legal wrong
  • On one hand, no one has been prosecuted yet
  • On the other hand, companies will have to incur significant expense, etc., to comply, to avoid enforcement
• Mere finding of probable cause was not sufficient to warrant judicial review (Ewing).
• In this case, labelling rule has consequence immediately, unlike Ewing where subsequent action was needed.
• Issue is not just finality, but also issue needs to be ripe.
• Ripeness requirement is to avoid "abstract" disagreements.
• Test of Ripeness
  • Fitness of issue for judicial consideration
  • Hardship on parties if judicial relief is denied

Toilet Goods Association v. Gardner

[387 U.S. 158] 1967 United States Supreme Court (cb925)

• Commissioner promulgates regulation permitting FDA to do surprise factory inspection and suspend certification if access refused.
• Same analysis as Abbott, but Court reaches other result.
• Fitness for judicial resolution?
  • Question: is regulation within legal authority?
  • May be more information available from actual enforcement
• Hardship on parties
  • Doesn't require renegotation of contracts, reprinting of labels, etc., as in Abbott
• Fortas concurrence: would have denied judicial review in both cases.

Exhaustion

• Myers v. Bethlehem Shipbuilders [303 U.S. 41] 1938 United States Supreme Court (cb935): NLRB charges company with unfair labor practices; ship building company claims it does not operate in interstate commerce, challenges ULP; court says jurisdiction needs to be decided in NLRB process.
• AMP Inc. v. Gardner [275 F.Supp. 410] 1968: FDA has process for drugs but not devices, classifies blood vessel ligation instrument as drug and requires process. Court agreed to review classification, because this was threshold question.

McGee? v. United States

[402 U.S. 479] 1971 United States Supreme Court (cb937)

• Draftee did not seek timely administrative review of conscientious objector status.
• Marshall bars draftee from expressing conscientious objector status now, says he should have exhausted administrative remedies first.

McKart? v. United States

[395 U.S. 185] 1969 United States Supreme Court (cb938)

• Draftee failed to exhaust review on error of reclassification, facing criminal penalties.
• Marshall refuses to apply exhaustion requirement.

Monday, July 28, 2003 (Class 18)

Standing

• Case or controversy requirement; parties must be situated in adversarial relationship to be judicially cognizable.

Association of Data Processing Service Organizations, Inc. v. Camp

[397 U.S. 150] 1970 United States Supreme Court (cb957)

• Comptroller makes rule that banks can offer data processing services, data processors seek judicial review.
• District Court dismisses for lack of standing.
• Court sets forth two-part inquiry:
  • Has challenged action caused injury in fact?
    • In this case, yes, data processors are losing customers to bank
  • Is interest sought to be protected arguably within the zone of interest to be protected or regulated by statute or constitutional guarantee in question. §702 of APA.
• ADAPSO is asserting economic interest; but does not have to be economic.
• Act seems to exist to limit competition, thus Court finds ADAPSO are aggrieved persons within meaning of §702.

National Credit Union Administration v. First National Bank & Trust Co.

[522 U.S. 479] 1998 United States Supreme Court (cb963)

• National Credit United Administration issues rule permitting unrelated employer groups to group together in credit union.
• Injury in fact requirement: no problem, non-credit union bank may be injured.
• Zone of interests: Court must distinguish Air Courier Conference v. Postal Workers. In Air Courier postal service regulations changed to limit monopoly on international operations, would result in layoffs to postal workers. Postal workers challenge regulation, Court found injury in fact but not zone of interest. Said that statute had nothing to do with competition for employment, but instead to guarantee revenue to Service.
• Do not ask whether Congress specifically "intended" to benefit the plaintiff, instead discern whether the interests are arguably to be protected by the statute.
• Once deciding that Bank has standing, Court moves on to Chevron analysis.
• Chevron: does statute express unambiguous intent on precise issue?
• Yes, Court finds Congress was unambiguous, overturns agency action.
• O'Connor Dissent: all banks are doing is asserting an injury, they should have to show Congressional intent.
• Finds Air Courier irreconciliable, why didn't postal employees benefit from statute?
• Purpose of statute is protect credit unions, not banks.
• Under O'Connor's interpretation, Credit Union member would have standing.

Sierra Club v. Morton

[405 U.S. 727] 1972 United States Supreme Court (cb970)

• Mineral King Valley, area of "great natural beauty," is slated to be developed, by decision of United States Forest Service.
• Sierra Club with interest in conservation. District Court grants injunction, 9th Circuit reverses, finding no injury other than general distaste.
• Sorts of injuries--aesthetic, etc.--are cognizable under ADAPSO, but none of the members of the club was "among the injured."
• If §702 were read as Sierra Club urges, Court holds that it would allow people to vindicate their "value preferences" through legal process.

Wednesday, July 30, 2003 (Class 19)

Standing

• Requirement of injury and fact, and interest arguably being within zone of interest protected by statute
• National Credit Union Administration--eliminates Congressional intent inquiry. O'Connor dissent: eliminates distinction between two prongs of standing test.

Lujan v. Defenders of Wildlife

[504 U.S. 555] 1992 United States Supreme Court (cb1001)

• Statute requires Secretary of Interior to maintain endangered species list.
• Federal agencies need to consult with Secretary to make sure action won't have adverse result for endangered species.
• Secretary of Interior changes interpretation to only apply to action domestically.
• Question: do wildlife groups have standing to challenge revised regulation?
• Standing has three elements
  • Injury
    • Concrete and particularized, actual or imminent, not conjectural or hypothetical
  • Causation
    • Injury has to be fairly traceable to act
  • Redressability
    • Must be likely that injury will be redressed by favorable decision
• Seems to focus on first prong of ADAPSO test
• Standing depends considerably upon whether the plaintiff is object of action--in that case, standing is more easily established.
• Burden is shifted to plaintiff to adduce facts showing that action produces causation and redressability if plaintiff is not directly injured. Need to demonstrate that actions of third parties (regulated parties--agencies in this case) will be effected by change of Secretary of Interior's rule.
• Affivadits alleging that members of plaintiff Organization travelled to Egypt and Sri Lanka to see wildlife, will travel back again.
• Court holds that this is not sufficiently imminent--no concrete plans to travel, and past injury is not redressability.
  • Blackmun dissent: asking too much, shouldn't need to show every step in future to prove injury.
• "Ecosystem nexus," "animal nexus," "vocational nexus" theories: connection is too far.
• Agencies only supply fraction of funding for effected projects; changing regulation would not give result of protecting wildlife.
• Regulation does not actually bind agencies; just requires them to consult with secretary of interior.
• Scalia only has plurality on redressability analysis
• Congress had givesn power for "citizen suit" as procedural right.
• Court strikes down citizen suit provision, says courts can't ignore injury requirement simply because Congress passes law.
• Important that citizens cannot sue unless they suffer direct injury; this would allow Congress to transfer power from the president to the courts.

• Lujan controversial, because so many regulatory schemes depend on citizen suit.

Bennett v. Spear

[117 S.Ct. 1154] 1997 United States Supreme Court (c1017)

• Fish and Wildlife provide opinion to Department of Interior to minimize or avoid risk
• Bureau of Reclamation--action agency--concerning Klamath Irrigation Project.
• Project would have adverse effect on two species of suckerfish.
• Regulations require minimum water level.
• Petitioners rely on water for irrigation, want to use more water.
• Claim that minimum water level doesn't protect fish.
• Agency moves to dismiss under 12(b)6 for lack of standing.
• Injury in fact: yes, diminished irrigation source to plaintiffs. Government responds that plaintiffs haven't shown that water source will really be diminished; Court holds that this is 12(b)6 and thus no need to prove.
• Government claims that judicial review would not reach causation and redressability; biological opinion of Fish and Wildlife is not binding on Action Agency.
• Court notes that federal agency that choses to deviate from biological opinion bears burden of justifying action; and that agencies very rarely deviate from biological opinion. If agency is wrong, could be subject to criminal penalties.
• Citizen suit provision also present in statute here.
  • Legislation deals with environment, which we all have interest in.
  • "Private attorneys general" provision--obvious purpose is to encourage enforcement by private parties.

Friends of the Earth, Incorporated v. Laidlaw Environmental Services, (TOC), Inc.

[528 U.S. 167] 2000 United States Supreme Court

• Ginsburg wrote for majority. Clean Water Act permits citizen suits to enforce pollution permits issued by EPA.
  • Association (FOE) has standing when members would otherwise have rights to sue of own right.
  • Showing for Article III standing is not injury to environment but injury to plaintiff.
  • Plaintiffs have more injury than in Lujan, here they would go fishing if not for pollution problem.
  • Civil penalties have deterrent effect; plaintiffs may not sue solely for past effects (since money doesn't go to them, but to government), but in this case could deter future action that could harm plaintiffs.

Final Assignment

• Complaint: what will plaintiff be seeking, and on what grounds can he get it?
• How will agency defendant avoid trail? What are obstacles to getting court to hear case on merits?
• If client survives motion to dismiss, discuss actual merits.
• Only assess merits of administrative law topics; just flag issues of other issues.
• Due at Noon on last day of exam week.

Monday, August 4, 2003 (Class 20)

Federal Tort Claims Act

• Sovereign Immunity: common law doctrine, inherited from English law
• Tucker Act: waiver of federal sovereign immunity for contracts
• APA and Federal Tort Claims Act: further waiver

• 1346(b): basic waiver provision. Allows tort damages under state law. No punitive damages.
• Common Law tort (liability) --> unless sovereign immunity (no liability) --> unless waiver (FTCA) (liability) --> unless exception to FTCA (no liability)
• 2680 exceptions to FTCA:
  • (a) Any claim based upon an act or omission of an employee of government, exercising due care, in execution of statute or regulation... i.e., "I was only following orders."
  • or discretionary function or duty... policymaking.
  • Opposite of discretionary: operational or ministerial
  • (h) no liability for assault, battery, false imprisonment, false arrest, malicious prosecution, abuse of process, libel, lander, misrepresentation, deceit, or interference with contract rights; late amended to waive immunity for investigative or law enforcement officers.

United States v. S.A. Empresa de Viacao Aerea Rio Grandense (Varig Airlines) et al.

[467 U.S. 797] 1984 United States Supreme Court (cb1038)

• Airplanes approved by FAA did not meet standards under regulations requiring waste receptacles to be fire resistant.
• Families of victims of airplane crash sue for wrongful death; negligence in inspecting airplanes.
• District Court granted summary judgment for agency. Found that California law did not recognize tort of "negligent inspection." Other exceptions: misrepresentation exception to FTCA (certified as passing safety standards), discretionary function exception.
• Court of Appeals reverses, finds tort under state "Good Samaritan" law.
• Court of Appeals also disagrees that inspection was discretionary or "policy making" act.
• Second consolidated case: gas line was not inspected, caused crash.
• Federal Aviation Act: instructs Secretary of Transportation to set standards for safety. FAA promulgates regulations for flight safety.
• At various stages, (type, production, airworthiness, modification) manufacturer submits materials to FAA for approval.
• Statutes permits FAA to delegate responsibilities to private persons. FAA has interpretted statute by delegating individuals within manufacturers to inspect.
• FAA can then spot check inspections.
• Issue: does discretionary function exception to FTCA apply?
• Dalehite: post-World War II reconstruction program to export fertilizer. Fertilizer in storage exploded, causing damage.
  • Allegation of negligence: Decisions at top to implement program down to "on the ground" decisions about storage
  • Court found that all decisions fell within discretionary function exception to FTCA
  • "Where there is room for policy judgment and decision there is discretion."
• Court determines that Dalehite is controlling. As in Dalehite, can't define every contour of discretionary exception.
• It is nature of conduct rather than status of actor which governs whether discretionary function applies.
• Discretionary exception is supposed to encompass government in its role as regulator. Should not have judicial second guessing of regulatory action through tort law.
• However, neither person checking blueprint, nor person checking airplane is really acting in "policymaking" capacity.
• According to court, families are complaining about enforcement mechanism of using commercial inspectors and spot checking method. (rather than failure to inspect correctly--converted claim into one which is discretionary/policymaking).

United States v. Gaubert

[499 U.S. 315] 1991 United States Supreme Court (cb1050)

• Federal Home Loan Act authorizes Federal Home Loan Bank Board to regulate Savings & Loan institutions.
• FHLBB put new officers in control of bank, who decided that bank was in debt, put bank in receivership, causing Gaubert to lose a lot of money.
• Gaubert claims new regulators were incompetent, caused value of stocks to plummet.
• Must be "not policy" to survive motion to dismiss
• Focus of inquiry is not on agency's subjective intent, but on nature of actions taken, and whether they are suspectible to policy analysis.
• Footnote: while everything (e.g., driving decisions) involves "discretion", issue is discretionary policy decisions.
• Court focuses on day-to-day management of bank--was that exercise of discretionary policy judgment or was it merely operational/ministerial actions?
• Looks to statutory and regulatory mandate; don't give any guidance on day-to-day operations.
• Decisions must be discretionary since no instruction is given. (does this really distinguish car driving example?)

• Griffin: agency administering polio vaccine failed to meet their own standards, thus liable in tort.

• Next up: FOIA

Wednesday, August 6, 2003 (Class 21)

Access to Information

• Three sources, all amendments to APA
  • FOIA: agency records
  • Sunshine Act: open meetings
    • Not particularly effective, since deliberations often happen in offices, etc., prior to meeting

FOIA

• Old language (pre-1966) allowed exception for "good cause"; only allowed access to information to people who were "properly and directly concerned." Also provided no remedy.
• Strengthened in 1974, new guidelines in 1986, most recently amended in 1996.
• §552(a)(2): agency must make available for public inspection and copying
  • (A) final opinions and orders, resulting from adjudications
  • (B) statements of policy and interpretation not published in Federal Register (§553 exemptions--mere interpretive rules)
  • (C) administrative staff manuals, instructions to staff, that effect members of the public
  • (D) copies of records regardless of form or format (1996--electronic format)--that agency determines have become or are likely to become subject of subsequent requests
  • (E) index of records (Vaughn index--after Vaughn v. Rosen--court told agency it needed to make records available in systematic fashion)
• (D) and (E): Often agencies establish "reading rooms" for frequently requested documents.
• 1996 amendment: agency must make availble by electronic means
• Agency may delete identifying details for personal privacy; justification must be explained fully in writing.
• §552(a)(3): any person can make request. Must reasonably describe documents; can charge reasonable fees.
• Agency definition: broader than §551 (APA) definition. Includes military, executive office of President (not always clear what executive office of President is). Includes FBI.
• Congress and judiciary are excluded.
• Agencies need to have public records officer.
• 20 days to respond to request (10 days for expedited request).
• Can get District Court review of agency decision, standard is de novo review.
• Judge can do in camera review of sensitive documents.
• Can award attorney's fees to private litigants who "substantially prevail."
• Exceptions to FOIA, §552(b)
  • authorized under criteria established by executive order to be kept secret; properly classified pursuant to executive order.
  • internal personnel rules & practices
  • specifically exempted by statute
  • trade secrets, confidential commercial/financial information
  • inter-agency or intra-agency memorandums which would not be available by law in litigation
  • personnel/medical files
  • records or information compiled for law enforcement purposes
    • that would interefere with enforcement proceedings
    • would deprive a person of a right to a fair trial
    • unwarranted invasion of privacy
    • disclose confidential source
    • disclose techniques and procedures for investigations/prosecutions
    • endanger life or safety of individual
  • regulation/supervision of financial institutions (e.g., the Fed)
  • geological/geophysical: maps concerning wells.

NLRB v. Sears, Roebuck & Co.

[421 U.S. 132] 1975 United States Supreme Court (cb683)

• Focuses on exemption 5: intra-agency memoranda.
• Sears wants copy of five years of "advice memoranda" and "appeals memoranda," generated by NLRB in investigating unfair labor practice cases.
• NLRB refuses to disclose documents under §552(b)(5): intra-agency memoranda.
• Documents are discoverable unless they are privileged; thus NLRB must argue that documents are privileged and could not be discovered in litigation.
• NLRB claims memoranda are not final; only determine whether or not complaint should issue.
• Court decides when Board decideds not to file complaint, it is final; but when complaint is filed, it is not final. Similar to Nor-am and Ruckelshaus dealing with judicial review.
• Quality of decisionmaking process is not improved by protecting post-decisional memoranda.
• Pre-decision memoranda are more like "work product" and therefore privileged.

Scalia on FOIA

• Arguments against FOIA
  • Costly
  • Agencies regulate private parties, records become public.
  • Writing shortly after "reverse FOIA" suit, Chrysler v. Brown. Competitors to Chrysler made a FOIA request on information Chrysler has filed with government; Chrysler sues to enjoin agency from disclosing information under "trade secret" exception.
  • Exemptions don't mean that disclosure is prohibited, however, only means that disclosure is not required. Thus Chrysler could not force agency to not disclose documents.
  • Private parties have no right to enjoin disclosure of agency documents; must be covered by some other statute such as privacy act.
  • Businesses now market information retrieved under FOIA.
• Real guarantor is not "do it yourself" monitoring by public and press, but rather balance of powers/checks and balances.