Admin General Flashcards
Distribution of Power in American Government
Add 3-4
• Remarking on the “government planned by the convention”
• Appointments within each department should mostly be up to each department
○ Except for a few exceptions like the judiciary because of its unique role
• The members of each department should not be dependent on other departments to perform its tasks
○ However still need some checks on power because people are fallible
• Some branches appear to have more power because of their duties (legislative > executive)
Art II
• Executive Power vested in the President of US
Lays out some basic duties of the president and how the mechanics of everything will work
Executive Power and its Checks
[legal authorization for Executive Action]
YOUNGSTOWN SHEET & TUBE CO. V. SAWYER
U.S. 1952
○Jackson opinion Lays out situations to consider 1) When P acts pursuant to an express or implied authorization of Congress, his authority is at a maximum 2) When P acts in absence of wither a congressional grant or denial of authority, he can rely upon his own independent powers but there is a zone of twilight in which he and Congress may have concurrent authority 3) When P takes measures incompatible with the expressed or implied will of Congress, his power is at its lowest -- can only rely on his own constitutional powers minus any constitutional powers of Congress over the matter
CLASS
○ Point: how do agencies get power from president?
§ Congress has to give power or president has to be able to derive the power from the constitution
~~~~
[judicial review of executive actions]
Marbury v. Madison
• Takeaway
○ Established the doctrine of judicial review. Court found a law unconstitutional and declared it is the Courts purpose to decide what applies when laws and the constitution are in conflict
• Class
○ Said the court did not have jurisdiction over the case but Congress cannot give original jurisdiction to this type of case
○ First we have to establish that P had a right to the commission
§ Yes he did
○ Distinction in this case
§ This was an act that was required by Congress so this is not a question of the President’s discretion
Chenery I (pre-APA review of discretionary actions) ○ Point: To judge an agencies actions according to the explanation the agency gave; you do not affirm or consider arguments made by appellant counsel that were not deliberated on or offered by agency itself as a basis for its action/decision
[Legislative Encroachment on the Executive]
Nixon v. Adm’r of Gen Services
• Facts
Nixon was challenging an act that allowed the Administrator of General Services to take custody of former President Nixon’s papers and tape recordings, and shall promulgate regulations for public access to such materials (not yet effective), subject to screening of the materials by government archivists to return private papers to Nixon
result: Court determined that the Act did not violate the separation of powers because nothing in the Act rendered it unduly disruptive of the Executive Branch.
○ Claim here is that Congress has inappropriately burdened the executive branch through passing its law ○ Takeaway is there is a balancing test ○ Test Elements § Is there undue impairment § And what is the public need
Administrative Rulemaking
[Conventional non-delegation doctrine]
-JW Hampton
○ “intelligible principles”
○ Act authorized the president to act only after receiving the report of a new Tariff Commission
○ Congress may lay down an ‘intelligible principle’ to which the person or body authorized to fix such rates is directed to conform
○ Here president’s role was not a rule making one. He simply carried out the law
- Schechter Poultry Corp
○ Decision: Congress cannot delegate legislative power to the President to exercise an unfettered discretion to make whatever laws he thinks may be needed or advisable
§ Court seems to take particular issue with section 3 setting out no guidelines by which the rules were to be made
-Yakus
○ Considering Emergency Price Control Act of 1942
§ Upheld the statute
§ Temporary measure during WWII addressing inflation
□ Created an Office of Price Administration headed by Price Administrator who was authorized to promulgate regulations fixing prices of commodities
□ “fair and equitable with goal of preventing inflation”
○ The standards prescribed by the present Act, with the aid of the ‘statement of considerations’ required to be made by the Administrator are sufficiently definite and precise to enable Congress, the courts and the public to ascertain whether the Administrator, in fixing the designated prices, has conformed to those standards
○ Takeaway: court is willing to accept very broad delegations of power
§ This case breaks it open
-Industrial Union
○ Issue concerned OSHA decision to lower the maximum permissible exposure for benzene form 10 ppm to 1ppm
§ Advised by independent science agency in charge of advising OSHA had pushed for the change
○ Court invalidated new standard saying it needed to make a threshold finding that a place of employment is unsafe before issuing any permanent health or safety standard
§ Language was read into the law and derived from the law laying out the duties of OSHA
○ Class
§ Court says they need to do a cost benefit analysis and need to show a significant threshold of risk
-Whitman v. American Trucking Ass’ns
US 2001
○ Court says it is looking for the “intelligible principle” to determine constitutionality
§ The degree of agency discretion varies according to the scope of the power conferred
§ No need for “determinate criterion” as suggested by Appeals Court
§ Requiring EPA to set air quality standards at a level “requisite” to protect public health is adequate
• Class
○ The court is saying it has to decide a constitutional issue here
§ Cannot avoid the cannon of constitutional avoidance
○ Scalia essentially says broad delegation just adds a lot of executive power
§ Says court is uncomfortable saying how much executive power is appropriate
○ Intellectually; law making is not the same as legislating according to the underlying idea of this opinion
§ Stevens concurrence disagrees and says that we should just admit that this is essentially legislative power
§ Thomas is saying that some things are just so important that a decision on the matter cannot be anything other than legislative. Is advocating for a line being drawn where the topic matter is too important
-INS v. Chadha
US 1983
• Facts
○ An immigration judge suspended respondent alien's deportation pursuant to 244(c)(1) of the Immigration and Nationality Act ("Act"). The House of Representatives passed a resolution vetoing the suspension pursuant to 244(c)(2) of the Act, which authorizes one House of Congress to invalidate the decision of the executive branch to allow a particular deportable alien to remain in the United States. The immigration judge reopened the deportation proceedings to implement the House order, and the alien was ordered deported.
• Decision
○ The Court of Appeals had the jurisdiction to review the House's order of deportation
○ The veto provision is unconstitutional and it is severable from the Act
• Court
○ Outlines the respective powers of the branches of government
○ Actions taken by either House are determined to be legislative by looking at if "they contain matter which is properly to be regarded as legislative in its character and effect"
§ This action taken by one House was essentially legislative in purpose and effect
○ Only 4 provisions where a House may act alone without being subject to Presidents veto
1) House of Rep to initiate impeachment
2) Senate conducting trial following impeachment
3) Senate alone has final review power of presidential appointments
4) Senate alone has power to ratify treaties negotiated by the President
○ This veto power is not in any of these 4 categories
- Gundy v. United States
US 2019
• Facts
○ Implicates Sex Offender Registration and Notification Act (SORNA)
§ Requires larger range of sex offenders to register and backs up those requirements with criminal pentolites
§ Acts states for individuals convicted before SORNA, the AG has authority to specify the applicability of SORNA registration requirements and prescribe rules for their registration
§ AG issued a rule that SORNA requirements apply in full to pre-Act offenders
□ Petitioner was convicted of failing to register
• Court
○ Under sec 20913(d) the AG must apply SORNA’s registration requirements as soon as feasible to offenders convicted before the statute’s enactment
§ Court says this delegation easily passes constitutional muster
○ Court points out the necessity of things like this to allow our government to be effective
• Class
○ Majority view: Interpreting the statute as requiring the AG to apply the law to pre-act offenders but gives discretion to AG about how to enforce the law which is administrative in nature
Administrative Adjudication – “Article III” versus “Article I” courts
Crowell v. Benson
US 1932
• Rule: When the validity of an act of Congress is drawn in question, and even if a serious doubt of constitutionality is raised, it is a cardinal principle that a court will first ascertain whether a construction of the statute is fairly possible by which the question may be avoided. • Facts ○ Crowell, deputy commissioner of the US Employees Compensation Commission ordered Benson to compensate injured Knudeson under Harbor Workers' Act § Benson denied Knudsen was acting as his employee at the time of the injury § Benson claimed that this scheme violated both due process and Article III • Issue: may Congress substitute for constitutional courts an administrative agency for the final determination of the existence of the facts upon which the enforcement of the constitutional rights of the citizen depend ○ NO • Reasoning ○ The Act contemplates that as to questions of fact, the findings of the deputy commissioner, supported by evidence and within the scope of his authority, shall be final ○ Murrays Lesee § Congress may establish 'legislative' courts which are to serve as special tribunals to examine and determine various matters, arising between the government and other which from their nature do not require judicial determination and yet are susceptible of it ○ "In cases brought to enforce constitutional rights, the judicial power of the US necessarily extends to the independent determination of all questions, both of fact and law, necessary to the performance of that supreme function" • Class ○ This is a case with two private parties ○ Stands for the idea that everyone has the right to take an issue before an Article III judge with ○ Pay close attention to who is the parties to help determine when public rights are at issue ○ Seminole decision § Foundation for the new deal agencies that got adjudicatory authority to decide factual matters
Northern Pipeline Construction Co. v. Marathon Pipe Line Company
• Facts ○ Northern filed for bankruptcy, went into bankruptcy court w/ related state contract claim against Marathon under Bankruptcy Act; Marathon didn’t want to go to Bankruptcy Court, said Act unconstitutional delegation Art. III power to bankruptcy judges • Rule (Brennan) ○ Act unconstitutional excessive delegation of Art. III power to bankruptcy court judges (give pwr. to preside over jury trial, issue subpoenas, issue writs, issue declaratory judgment) ○ Private rights dispute cannot be placed in tribunal over which Art. III courts don’t retain effective review/control (Congress in this statute didn’t envision such a delegation) • Concurrence ○ Marathon cannot be subject to Art I jurisdiction against its will • Dissent ○ There is sufficient judicial review, little political interest; cant go back to formalist approach now • Class ○ We know this is not an Article III judge because bankruptcy judge did not have life tenure ○ This case involves state law rights ○ Issue: can you confer power to make a decision on these state law claims without an article III court § On appeal it goes to article III court but the initial decision maker is not article III ○ How do we determine if it’s a public rights case? § Government is a party and the issue is about something the government conferred ○ This is not a adjunct court because the power is not very limited in this case. The bankruptcy course has a lot of power § Therefore the court is taking away power from federal courts because of how comprehensive the powers are that are given to the bankruptcy court
à Congress can create “private right” so closely integrated in public regulatory scheme that it’s appropriate for agency resolution w/ limited involvement of judiciary
à Focus not on public/private right distinction; but on (1) purpose of statutory delegation and (2) impact on independence of judiciary
Thomas v. Union Carbide Agricultural Products Co.
US 1985
• Facts ○ FIFRA requires insecticide manufacturers to submit data on environmental/health effects; allows follow-ons to use the same data but makes them pay for it; creates binding arbitration over value of data; decisions reviewable only for “fraud, misrepresentation or other misconduct” • Decision ○ Upheld; this is a public right dispute ○ “Congress, acting for a valid legislative purpose pursuant to its constitutional powers under Art. I., may create a seemingly private right that is so closely integrate into a public regulatory scheme as to be a matter appropriate for agency resolution with limited involvement by Art. III judiciary” • Class ○ Ambiguous in this case to if she is saying there is a public right at issue ○ If its intertwined and if its serving a valid public purpose then it is constitutional
Commodity Futures Trading Commission v. Schor
US 1986
• Facts ○ Schor traded commodities through broker Conti, regulated by CFTC, lost and then owed money to Conti, claimed C at fault ○ Schor sought reparations before CFTC; Conti filed diversity action Fed.D.Ct., but then voluntarily counterclaimed in CFTC ○ CFTC ruled in Conti’s favor; then Schor says CFTC lacked statutory authority to allow permissive counterclaims • Decision ○ Commodity Exchange Act, which allows CFTC to hears counterclaims arising in same transaction in complaint before CFTC, doesn’t impermissibly intrude on judiciary ○ Art. III purpose is to (1) protect individuals’ rights to have claims decided before indep. judge (in this case Schor waived personal right, went to CFTC); and (2) to protect independent judiciary (parties can’t consent to cure constitutional defect) ○ Schor Factors (does delegation impermissibly intrude on judiciary?) • (i) Whether "essential attributes of judicial power" are reserved to Article III courts (reviewability, powers of the court, bring it to judicial) • (ii) Extent to which non-Article III forum exercises jurisdiction and powers vested in Art. III courts • (iii) Origins and importance of the right to be adjudicated • (iv) Concerns that drove Congress to depart from Art.III reqs. (no bad intent?) ○ Application in this case: no impermissible intrusion, much closer to Crowell than Northern Pipeline (deals only w/ particularized area of law; enforceable only by dist.ct. order; reviewable under more permissive standard; legal rulings subject to de novo review; parties voluntarily invoke CFTC) • Class ○ Private plaintiff. Federal law issue for CFTC but counterclaim is a state law claim ○ Prof goes over schor factors ○ How was factor iii used? • Prof says this is really the private rights issue (factor iii) • Here, the origin of the claim is at state law and it is a private right • Notice for Justice brennan, this issue is determinitive (he did the same thing in Northern Pipeline)
Stern v. Marshall
US 2011
• Facts ○ Petitioner bankruptcy debtor Vickie Lynn Marshall (Smith), aka as Anna Nicole Smith, married J. Howard Marshall II, creditor E. Pierce Marshall's (Pierce) father, approximately a year before J. Howard's death. Shortly before J. Howard died, Smith filed a suit against Pierce in Texas state court, asserting that J. Howard meant to provide for Smith through a trust, and Pierce tortiously interferedwith that gift. After J. Howard died, Smith filed for bankruptcy in federal court. Pierce filed a proof of claim in that proceeding, asserting that he should be able to recover damages from Smith's bankruptcy estate becauseSmith had defamed him by inducing her lawyers to tell the press that Pierce had engaged in fraud in controlling his father's assets. Smith responded by filing a counterclaim for tortiousinterference with the gift she expected from Pierce's father. The Bankruptcy Court granted summary judgment on the defamation claim and eventually awarded Smith $88 million in damages on her counterclaim. Pierce objected that the Bankruptcy Court lacked jurisdiction to enter a final judgment • Decision ○ The U.S. Supreme Court held that, although the bankruptcy court had the statutory authority to enter judgment on the core counterclaim, it lacked the constitutional authority to do so under U.S. Const. art. III • Reasoning ○ While§ 157purported to extend bankruptcy jurisdiction to any counterclaim by a debtor, the bankruptcy court was not established under U.S. Const. art. III and was not subject to the constitutional assurances of independence that would allow adjudication of the debtor's state common law claim. ○ Further, resolving the Pierce's claim would not necessarily resolve Smith's counterclaim, which was otherwise unrelated to the claim-allowance process. ○ Also, Smith's claim did not involve public rights to allow the congressional extension of bankruptcy jurisdiction, since her claim flowed from state law rather than the federal bankruptcy scheme. • Class ○ Issue • Can congress give the court the right to adjudicate this damages claim arising at state law ○ First we have to ask if there are private rights or public rights • If it is private rights, then its unconstitutional unless it fits into the adjunct exception ○ What makes right public vs private is if the right is related to government action (idk? This dude sucks at teaching) ○ Characterizes the previous cases were either about a state law right or there was no federal right that was created • In those cases they can be characterized as public rights ○ Big qualification on the Stern opinion* • Specifically says there are not evaluating agency adjudicators • Says they are only addressing bankruptcy court because there is no bankruptcy agency ○ Adjunct exception does not apply here on the facts
Class
• As advocates we have available the arguments from the balancing test if we need them
• Prof says this class is particularly challenging to understand
Appointment of Officers of the United States
Buckley v. Valeo, Secretary of United States Senate
US 1976
• Facts ○ Federal Election Act of 1971 established Federal Election Commission, eight- member agency, oversee campaign finance reform § Secretary of Senate and Clerk of House of Representatives are non voting members ○ Members appointed: two by Senate, two House, two Pres. etc. § Full house and senate had to approve ○ Commission duties § Recordkeeping § Extensive rulemaking and adjudicative powers □ "make rules as are necessary to carry out the provisions of this Act" □ Issues advisory opinions □ May institute injunctive relief (or other types) □ Can bar people from running for Federal office if they fail to file reports of contributions and expenditures ○ P argument: Congress is precluded under the principle of separation of powers from vesting in itself the authority to appoint those who will exercise such authority • Issue: May the Commission appoint these members under the Constitution? • Decision ○ No • Reasoning ○ "Officers of the United States" definition under Art II includes: any appointee exercising significant authority pursuant to the laws of the US. § They must be appointed by sec of that article § “Officers are any appointee exercising significant authority pursuant; employees lesser functionaries subordinate to officers” ○ None of the member of the Commission were appointed properly ○ The Commission has the power to perform investigative and informative functions as congress might delegate to one of its own committees but the power assigned here has gone too far ○ "The Commission's enforcement power, exemplified by its discretionary power to seek judicial relief, is authority that cannot possibly be regarded as merely in aid of the legislative function of Congress" § It is the President who is to "take Care that the Laws be faithfully executed" [Art II] § The powers assigned here are the kinds usually performed by independent regulatory agencies or by Executive branch ○ Administrative functions may only be exercised by persons who are "Officers of the United States" § The last two powers listed in the list in the facts were considered to be powers that are to be performed by Officers ○ Outline notes: Appointment scheme unconstitutional; Congress can create and structure offices to perform executive functions, can’t appoint executive officers or selves to those positions • Class ○ You can be an officer of the United States as long as any of your powers are significant
Freytag v. Commissioner of Internal Revenue
US 1991
• Facts ○ Issue: whether authority that Congress granted Chief Judge of the United States Tax Court to appoint special trial judges violates our structure of separated powers ○ Authority granted by Tax Reform Act of 1969 § Special trial judges had power to hear proceedings [specifics on page 28 bottom first column] § Decisions on cases were made by regular judge of the Tax Court § Chief Judge may assign any Tax Court Proceeding to a special trial judge for hearing and the preparation of proposed findings and written opinion ○ Tax Court consists of 19 judges appointed to a 15 year term by the President with advice and consent of Senate ○ P argues that these special judges violated the Appointments Clause of Constitution § Claims they are an "officer of the united states" • Decision ○ Appointments clause was not violated. Special trial judge is an inferior officer • Reasoning ○ These special trial judges exercise significant discretion. More than special masters hired in Article III courts § These are inferior officers. The two courts that have addressed the issue have held they are inferior officers § Powers included enforcing compliance on discovery orders, taking testimony, etc. □ They can hold people in contempt of court if orders not following. These are more an ministerial tasks ○ The appointment power is limited to heads of departments (for inferior officers) § For the Chief Judge of the Tax Court to qualify as head of a department, the commissioner must demonstrate the Tax court is a part of the Executive Branch and that the Tax Court is a department § The tax court is not a department. Not every executive branch group is a department § Need to be a cabinet level department ○ Court seems to make requirement that to be a department you need to be represented in the Cabinet § Reserves its judgment on if a principal agency such as the SEC is a department ○ An Article I court can be a "Court of Law" within the meaning of the Appointments Clause ○ Article I Courts, like Article III Courts, exercised the judicial power of the United States and were therefore "Courts of Law" for purposes of Article II Section 2 § While they may have been more dependent on Congress than the other branches, they were nevertheless independent, and it therefore did not violate the separation of powers to allow them to make appointments. ○ Concurrence § Tax Court cannot be one of those "Courts of Law" in the Appointments clause □ Uses definite article "the" § There is no reason to limit the phrase "the Heads of Departments" in the appointments clause to those officials who are members of the President's Cabinet □ Thinks we should label "departments" on an ordinary meaning basis. If it does different business it is a different department • Outline: Special trial judges of tax court are officers; significant discretion • Class ○ Inferior vs principal officers was not being argued in this case. Trying to determine if officer or employee in this case ○ 3 issues § Officer vs employee § Department issue § What is a court of law
Appointments generally
• Primary method for appointment of principal officers is presidential nomination and Senate confirmation
• Inferior officers
○ Constitution allows appointment by President (without Senate confirmation), department heads, or courts
• Congress must affirmatively exercise “by law” its Appointments Clause power to exempt officers from confirmation by assigning their appointment to one of the other allowed methods
Edmond v. United States
• Upheld Sec. of Transportation’s appointment of civilian members of the Coast Guard Court of Crim. App. because they’re inferior officers
• Test is: “the term inferior officer connotes a relationship with some higher ranking officer or officers below the President; whether one is an inferior officer depends on whether one has a superior”
• Justifies this because there is still some level of political accountability with a principal officer being the one making a decision
• Inferior:
○ Work has to be directed or supervised by principal
§ NECESSARY but not a determinative element
• Contrast Morrison:
○ Judges neither limited in jurisdiction nor term; Morrison not definite
Morrison v. Olson
• Majority (Rehnquist); independent counsel is clearly an inferior officer because (1) could be removed by AG, (2) empowered to perform only limited duties, (3) limited jurisdiction only over some serious crimes, (4) limited in tenure
• Need to use both this test and Edmond to fully argue inferiority
Free Enterprise Foundation v. Public Company Accounting Board
• SEC constitutes a Department under the Appointments Clause
• Department Definition [CLARIFIES FREYTAG]:
○ Has to be freestanding component of the Executive Branch, not subordinate to or contained within any other such component
• Appointments were done by multimember body
○ Court said this was fine
○ The ‘head of the department’ was the whole multimember body so this was fine
Lucia v. SEC
US 2018
• Facts ○ Issue: whether administrative law judges (ALJ's) for the SEC qualify as "Officers" under the Appointments Clause ○ SEC staff members appointed the judge in question (not the head of a department, court of law, or president) ○ Only way for SEC to win is to show that ALJs are not officers. Instead they are non-officer employees -- as part of a broad swath of "lesser functionaries" • Decision ○ ALJs are officers • Reasoning ○ Court looks to previous decisions § Germain held that "civil surgeons" were mere employees because their duties were "occasional and temporary" rather than continuing and permanent □ Must have "continuing" position to be considered an Officer § Buckley held officers "exercise significant authority pursuant to the laws of the United States ○ Like Freytag, the position is question holds a continuing office established by law § ALJs receive a career appointment ○ Like Freytag, the ALSs exercise significant discretion and carry out important functions § Take testimony § Conduct trials § Rule on admissibility of evidence § Have power to enforce compliance with discovery orders § Issue a decision at the close of proceedings □ Final decisions are subject to review by SEC but SEC may decide not to review and the decision is final as is • Remedy: new hearing before a properly appointed official • Class ○ Where an inferior officer exists, Congress has the power to take appointment power away from president
. Issue: Who controls discretionary administration of government?
A. One view: Exclusive authority to direct and remove lies with the President
B. Another view: Legislative power to organize the government as “Necessary and
Proper” includes authority to limit Executive direction and removal of Officers
C. Different views of Madisonian democracy, accountability, importance of
transparency, and dangers to liberty at work in this “unitary executive” debate
II. Relevant Constitutional Texts
A. Article II Vesting and Take Care Clauses
B. Article I Vesting, Necessary and Proper, and Impeachment Clauses
III. Legal Evolution
A. Early applications (Decision of 1789; Wirt and Taney AG opinions; Impeachment
of President Johnson)
B. Incidental limitations on supervision of Inferior Officers (Myers; Perkins)
C. Direction/removal of purely Executive officers (Myers)
D. Direction/removal of officers in multi-member commissions with quasi-judicial or
quasi-legislative functions (Humphrey’s; Weiner)
E. Direct involvement of Congress in direction/removal decisions – beyond
impeachment (Myers; Bowsher)
F. Judicial balancing approach to limitations on Executive supervision (Morrison)
1. Can Executive still accomplish constitutionally assigned functions?
2. Is there an overriding need within authority of Congress?
Removal Power
• The President, Vice President and all civil Officers of the United States shall be removed from Office on Impeachment for, and Conviction of Treason, Bribery, or other high Crimes and Misdemeanors • Writ opinion ○ Said to president that congressional assignment of duties to others was an element of the law for whose faithful execution the President was responsible • Myers v. United States (US 1926) ○ Facts § Postmaster General fires Myers, Postmaster of Portland, before end of his 4-year term; under the Tenure in Office Act, “Postmasters . . . shall be appointed and may be removed by the President by and with the advice and consent of the Senate, and shall hold their offices for four years unless sooner removed or suspended according to law”; Wilson refused to seek Senate consent; Myers sued for lost salary ○ Rules (Taft) § Strikes down statute; Congress cannot interfere w/ President in removal of "purely executive" officers whom he appointed with advice and consent of Senate □ Power of removal is incident to power of appointment □ Congress can reject to appoint, can't stop removal § Congress cannot interfere w/ President’s removal of purely executive officer/ even inferior officer [inferior officer from Perkins] ○ Class § The logic in this case is met with scrutiny in next cases • Humphrey's Executor v. United States (US 1935) ○ Facts § 1933 FDR removed Humphrey as FTC Commissioner FTC, estate sued for back pay; Removal Provision of the FTC Act: “Any commissioner may be removed by the President for inefficiency, neglect of duty, or malfeasance in office” ○ Rule § Statute upheld, President can only remove FTC Commissioner for cause § Congressional intent was to create independent expert agency free from interference from other govt. dept. § Distinguishable from Myers because postmaster is executive agent, FTC Commissioner has legislative and judicial functions ○ Idea: Congress can impose for cause removal restriction for appointees who carry out quasi-legislative or quasi-judicial functions (not overturned yet) ○ Class § Duties the FTC had at the time was related to investigations and adjudications that were not in themselves self enforcing § Court said the FTC was exercising powers that were not executive they were legislative and judicial in nature □ (profs defense of the reasoning) § Prof Takeaway □ Where the principal officer of an agency is involved and they don’t have purely executive functions -- Congress can place reasonable limitations on their removal • Weiner v. United States (1958) ○ Facts § Suit for back pay relating to alleged illegal removal as a member of the War Claims Commission § The Commission was to be composed of three persons □ At least 2 appointed by President with advice and consent of the Senate § The Commission had a fixed timeframe for its operation □ Congress provided no provision for removal of a Commissioner § Commissioner refused a request to resign so Truman removed him ○ Reasoning § Court looks to "the nature of the function that Congress vested in the War Claims Commission" § No power given to the president for removal via the Constitution in this case NOR in the statute □ Just because the Congress failed to say anything about it does not mean that the President has the power to remove at his own discretion ○ Class § If they are exercising quasi legislative powers there can be restrictions § Takeaway: Even when there is no limitation in the statute the court will read it into the statute • Bowsher v. Synar (US 1986) ○ Facts § 1985 Balanced Budget and Emergency Deficit Control Act gave Comptroller General, budget-cutting authority after reviewing budget reports from Pres. & Congress; made binding req. to President § CG nominated by Pres. from list of three people provided by House, confirmed by Senate; removable only at initiation of Congress § Statute challenged on grounds it was unlawful delegation of executive power to legislative branch ○ Rule/Reasoning § Struck down statute because (1) Comptroller is a creature of the legislature; Govt. Accountability Office part of legislative branch; only removable by congress, (2) CG engaged in executive power, interpreting and applying Act ○ Class • Morrison v. Olson (US 1988) ○ Reasoning § Upheld “for cause” restriction on removal of IC by Attorney even though IC “purely executive” because the “for cause” provision did not excessively burden the executive branch (isn’t “so central to functioning of Executive Branch”) or aggrandize the judicial/legislative branch □ AG retains power to remove for “misconduct”; he initiates appointment; IC must abide by DOJ policy □ Move away from looking at whether the officer’s function is executive, to whether removal restriction impedes President’s ability to perform job ○ Dissent (Scalia) § Unconstitutional restriction; criminal prosecution purely exec. power, now President is deprived of control (central exec.) § Undermines political accountability because people don’t know who to blame for bad prosecution (usually Pres. removes) § We’re making bad move away from looking at whether function performed is purely executive; to unclear test of whether restriction interferes w/ exercise of executive power ○ Class § Executive branch had removal power but it was a 'for cause' limitation § Court said it is no longing adhering to the reasoning in Humphreys and Meyers □ Not going to look at what the nature of the powers are before making a determination § Court is using a balancing test □ AG has the power to remove and the power to appoint □ This power is of importance to the public(??) ○ MODERN RULE § Congress cannot impose removal restrictions that impede the President’s ability to perform his constitutional duty; in this case, can make IC dismissible only for cause (greater congressional pwr)
Legal Evolution of Control of Discretionary Administration
A. Early applications (Decision of 1789; Wirt and Taney AG opinions; Impeachment
of President Johnson)
B. Incidental limitations on supervision of Inferior Officers (Myers; Perkins)
C. Direction/removal of purely Executive officers (Myers)
D. Direction/removal of officers in multi-member commissions with quasi-judicial or
quasi-legislative functions (Humphrey’s; Weiner)
E. Direct involvement of Congress in direction/removal decisions – beyond
impeachment (Myers; Bowsher)
F. Judicial balancing approach to limitations on Executive supervision (Morrison)
1. Can Executive still accomplish constitutionally assigned functions?
2. Is there an overriding need within authority of Congress?
G. Dual-level limitations on Executive supervision (Free Enterprise)
H. Limitations on Executive supervision of single Heads of Departments (Seila Law)
II. Triggers for Due Process Limits on Discretionary Administration
A. Liberty interests (Roth; Sinderman)
B. Property interests (Roth; Sinderman)
• Free Enterprise Fund v. Public Company Accounting Oversight Board (US 2010)
○ Facts
§ Sarbanes-Oxley Act 2002 created Company Accounting Oversight Board (overview accounting firms), modeled after private self- regulatory organizations in securities industry, e.g. NY Stock Exchange; disciplines own members
§ Board under SEC oversight; members not removable at will, only for cause; SEC commissioners also only for cause
□ Clarify: the SEC can only remove for cause as well
§ Company audited files complaint; says two lawyers unconstitutional, not accountable to public
○ Decision
§ Unconstitutional limit of removal power
○ Reasoning
§ Double layer of protection is unconstitutional; president can’t be restricted to remove principal officer, (SEC officer) who is restricted in removing inferior officer (Oversight Board officer) who has decision making power (not all civil service)
□ President’s oversight so diluted because of double layer; can’t take care laws are faithfully executed
□ w/o clear chain of command, public can’t hold anyone accountable
□ Cut back Morrison approval of for cause restriction
§ Specifically not deciding on the status of government employees
○ Class
§ These officers were carrying out executive functions
§ Remedy: court said the inferior officers was able to removed at will
§ The court specifically does not rule on other multilevel structures
• Seila Law LLC v. Consumer Financial Protection Bureau (US 2020) ○ Facts § Congress established the CFPB -- independent regulatory agency tasked with ensuring consumer debt products are safe and transparent § CFPB has enforcement powers □ Conduct investigations □ Issue subpoenas and civil investigative demands □ Prosecute civil action in federal court □ May seek injunctive relief, civil penalties, etc. § Powers are rulemaking, enforcement, and adjudicative § CFPB lead by single director □ 5 year term □ President may remove from office only for "inefficiency, neglect of duty, or malfeasance in office" ○ Decision § Violation of removal power (separation of powers) ○ Reasoning § This is different than Humphreys because this is not like the FTC in that case □ The single director is not a "body of experts" □ Cannot be considered "non-partisan" in the same sense as a group of officials drawn from both sides of the aisle □ The CFPB goes beyond being just a legislative or judicial aid w/ its powers § Logic of Morrison does not apply □ Director is not an inferior officer □ While the IC in Morrison had prosecutorial power, it was limited to certain government actors ® In contrast the Director's powers incorporate millions of private citizens and businesses § Court considers this a "new situation" and refuses to extend past case law even further § Director is neither elected by people nor meaningfully controlled (through removal) by anyone else ○ Class § Prof: There is a general rule that the president has the prerogative for removal but for 2 exceptions □ Humphreys □ Morrison § This case could be setting up a big fight in future cases □ If the facts are not the same/identical as past precedent then there could be a problem § Not clear that the Court is applying the balancing test in Morrison… maybe this test is dead? § After this case***: □ President can remove principal officers at will □ Not clear on inferior officers • Board of Regents of State Colleges v. Roth (US 1972) ○ Facts § Roth hired for assistant professor position for fixed term of one year, then wasn’t rehired for next academic year; no tenure rights, under Wisconsin statutory law only after four years tenure rights § Only issue on appeal is if he had constitutional right to a statement of reasons and a hearing on the University's decision not to rehire him ○ Decision § No; no deprivation of due process ○ Reasoning § No deprivation of DP; had no right to statement of reasons or hearing; did not show property or liberty interest violated § No liberty interest □ Liberty is a broader right; not implicated in this case □ In refusing to rehire did not make any allegations that may damage his standing in his community, did not say guilty of dishonesty or immorality (that may be deprivation; would have right to refute charges) § No property interest (no benefit being denied (Goldberg), no statutory right, not in contract) ○ Idea: Liberty interest in reputation, but not implicated because not rehiring him did not impose “stigma” that foreclosed freedom to find other employment • Perry v. Sindermann (US 1976) ○ Facts § Sinderman worked w/ TX state college system ten years, had year-to-year contract no tenure system; made public statements opposing policies and contract wasn’t renewed; brought suit § Claimed he had de facto tenure bcs. faculty guide language: should feel he has tenure unless not cooperative or happy ○ Decision § Remanded. ○ Reasoning § Remanded to dist.ct. to see whether there was implied contract according to state law (might be able to show he did have tenure) § May not deny benefit to a person on a basis that infringes his constitutionally protected interests -- especially free speech Outline idea: There may be an implied contract/property interest right to employment
Interests That Might Trigger Due Process Protection
• Modern triggers and their sources
• Liberty interests (Roth; Sinderman)
• Property interests (Roth; Sinderman)
• Relevance of generality/prospectivity of action (Bi-Metallic; Londoner)
II. Types of Procedures (Goldberg; Matthews)
• Pre-deprivation notice
• Right to present argument/evidence
• Cross-examination
• Decision based on record
• Statement of reasons
• Impartial decisionmaker
• Right to Counsel
III. What Type of Process is Due? (Matthews v. Eldridge)
• Nature of individual interest?
• Risk of error/increased accuracy from additional procedure?
• Government interest in avoiding additional procedures?
IV. Relevance of post-deprivation remedies (North American; Mallen; Homar)
• Bi-Metallic Investment Co. v. State Bd. Of Equalization (US 1915)
• Facts:
○ Pff challenged uniform property tax increase in Denver on ground it was denied due process bcs. not heard
• Issue:
○ Do all indiv. have right to be heard in matter in which all equally concerned?
• Rule:
○ No: “where a rule applies to more than a few people it is impracticable that every one should have a direct voice”; must limit to individual argument
• Londoner v. Denver distinguishable because “a relatively small number of persons was concerned, who were exceptionally affected…individual grounds”
• Class
○ These property owners are voters and therefore they have a say in who is making the decisions that are affecting them
○ Impractical that everyone have an individual voice in every public act
Goldberg v. Kelly (U.S. 1970)
• Issue
○ Whether state that terminates public assistance payments w/o affording recipient evidentiary hearing prior to termination denies procedural due process; pff only have oppt. to submit written statement, no oral
• Rule (Brennan)
○ When welfare is discontinued, only pre-termination evidentiary hearing provides recipient w/ procedural due process
○ The pre-termination hearing doesn’t have to be trial-like; need minimum procedural safeguards; right to oral hearing
○ Benefits are statutory entitlement (property) for persons qualified
○ Individual interest (uninterrupted receipt of public assistance, means by which he lives) and the government interest in preventing erroneous termination outweighs government interest in costs/efficiency
• Dissent (Black)
○ Govt. will have to continue to pay people w/ no statutory right; will never recoup, will limit who qualifies in first place
• Class
○ Process
§ First you decide whether there is a protected property interest by looking at relevant law
§ Then you go through a balancing test
□ Compare individual interest to the governmental interest and ask how much it costs vs removal of chance of erroneous outcome
○ In the class teaching chart the prov has the “types of procedures” that are required in these proceedings at issue
§ There are 7 procedural due process rights in the list
○ Not the right to a judicial trial but something that has many equivalents
Mathews v. Eldridge Test [this is the modern test]
(1) Individual Interest Affected (private interest) (2) Cost-Benefit Analysis a. (Cost) Risk of Erroneous Deprivation of Individual Interest b. (Benefit) Value of Additional of Substitute Procedural Safeguards (3) Government Interest (including function and /fiscal/administrative burdens of additional procedures)
Mathews v. Eldridge (U.S. 1976)
• Facts
• Eldridge received notice being terminated from SS disability benefits; there is rather elaborate review process he was entitled/subjected to, hearing after termination, but wanted pre-term. hearing
• Rule
• Consider: (1) First, the private interest affected by the official action; (2) second, the risk of an erroneous deprivation of such interest through the procedures used, and probable value if any of additional or substitute procedural safeguards; and (3) finally, the Government’s interest, including the function involved and the fiscal and administrative burdens the additional or substitute procedure requirements would entail”
• In this case pre-termination evidentiary hearing not required
○ Private interest; degree of deprivation is less, disabled worked need lesser
than welfare recipient
○ Risk of erroneous deprivation; medical assessments, more sharply focused
documentation = less chance for error
§ Less benefit from more procedure too; medical info. more
amendable to written than to oral presentation
§ Other safeguards; Disabled worked will still be caught by the other
welfare programs
○ Govt. interest; conserving scare fiscal and administrative resources
• Class
• As a lawyer you will always be able to put on an argument for your client but you just wont have a great grasp on what the exact rule is since its such a grey area
• Comes up a lot in administrative
North American Cold Storage Co. v. Chicago (U.S. 1908)
• Facts
• City officials ordered North American Cold Storage to deliver for destruction 47 barrels of chicken that had become putrid; company refused, business was halted, business sought an injunction
• Rule
• Provision for a hearing before seizure and condemnation and destruction of food which is unwholesome and unfit for use, is not necessary”
• “If a party cannot get his hearing in advance of the seizure . . . he has the right to it afterwards”; at trial those who seized it will have to defend claim that food seized was unwholesome”
○ Context important here; health & safety = city can order seizure
• Class
• Seminole case for “the government interest is too large. Post deprivation process is appropriate by itself”
àNo pre-deprivation hearing required when bank officer suspended after felony indictment, which provides substantial assurance, so long as lost income is relatively insubstantial and post- suspension hearing is prompt
Federal Deposit Ins. Corp. v. Mallen (U.S. 1988)
• Facts
• FDIC authorized to suspend summarily officer of insured bank who has been indicted for felony involving dishonestly or breach of trust; hearing need not be given until 30 days after suspension, may not be concluded 60
• Rule
• No violation of due process; “important govt. interest + assurance deprivation is not baseless = justifies postponing oppt. to be heard
• Faith in bankers impt. to entire economy (could cause run on banks)
• Class
• Using the mathews v eldridge langauge it thinks this is not a problem
Gilbert v. Homar (U.S. 1997)
• Rule: State university can summarily suspend w/o pay police officer arrested for and charged w/ drug felony
• Reasoning
• Purpose of pre-suspension hearing is to determine reasonable grounds to support suspension exist, in this case the arrest and charge establish that
• So long as post-suspension hearing is prompt, due process doesn’t require taxpayer to pay suspended employees benefits
• Class
• Applying Mathews test
• Already had some sort of process so there is not a high risk of error
• Just another example in applying the ideas from Cold Storage that says there is no pre-hearing required because of the interest of the government
○ Doesn’t mean that the person did it but it means that there gov interests win on this balancing test
• IDEA:
○ Seems when its just about money then the court is more likely to say that this can be handled in post-
Class
• Remember in the Meyers case it was talking about adjudicatory agent something~~
Prof is saying that that is relevant to the classes here where we are concerned about property being taken away based on the record in front of the adjudicator
I. Structure of APA (APA; Wong Yang Sung; Wyman-Gordon)
[see clas 8 chart]
II. Relationship to Due Process and organic law (Wong Yang Sung; Vermont Yankee)
Wong Yang Sung v. McGrath (US 1950)
• Facts ○ Citizen of China was arrested and charged with being unlawfully in the US through overstaying his shore leave as member of shipping crew § Admin hearing -> recommended for deportation ○ Issue: whether the APA applied to the deportation hearings • Decision: APA did apply ○ Two main purposes of APA § To introduce greater uniformity of procedure and standardization of administrative practice among the diverse agencies whose customs had departed widely from each other § To curtail and change the practice of embodying in one person or agency the duties of prosecutor and judge ○ The second reason was the one at issue in this case • Class ○ 3 things to get out of this class § The complaint that the P had in the case is that the person who presided over the hearing was an investigator (554(d)-- only can get there if 554(a) is satisfied) ○ APA does not apply to heads of agencies but it applies to those below the rank of "head" of agencies ○ A rule of law reading to this opinion is § The Immigration was construed to contain a requirement to § The APA requires an on the record hearing on the record when mandated by statute making the agency or a hearing is compelled by constitutional law or constitutional avoidance doctrine ○ This case highlights the divide between formal on the record procedural requirements and the fact that they do not apply for off the record proceedings
NLRB v. Wyman-Gordon (US 1969)
• Facts ○ Wyman-Gordon refused to supply employee list to union seeking to represent its employees; Board concluded in an adjudication Wyman-Gordon committed an unfair labor practice ○ Board is applying a rule they announced in a previous ruling on a similar set of facts § Saying that there is a general rule that a list of the type requested here must be provided to unions • Decision ○ Agency cannot announce policy in an adjudication with only prospective (i.e., not applicable in present case) effect because constitutes a rule and APA procedures not followed; rulemaking has to be used for prospective • Class ○ Distinguishes chenery case ○ It is okay for an agency to make law in an adjudication § That is different in the context of the APA to make law through rule making □ (this is why we looked at wyman gorden) □ Rulemaking is deciding on policy with only future effect □ Adjudication is everything else ○ There are obvious practical concerns where repeated decisions the same way are essentially acting as rules without making rules by saying "this is the way we construe the relevant law"
Vermont Yankee Nuclear Power Corp v. Natural Resources Defense Council (US 1978)
• Rule/idea: Courts cannot read additional procedures into the organic statute • Facts ○ Nuclear Regulatory Commission (NRC) issued Vermont Yankee license to build new power plant; NRC went through an adjudication, but decided there were some environmental issues best dealt with by new rule ○ NRC issued notice, held hearing, NRDC commented; NRC reviewed and approved process, finalized rule, applied; re-granted V.Y. license (against wishes of NRDC) ○ NRDC and other groups sought judicial review; rule procedurally defective, substantively arbitrary & licensing decision unsustainable • Procedure: ○ Ct. App. struck rule down; inadequate procedure in rulemaking; precluding discovery or cross-examination denied meaningful opt. for participation • Issue: ○ (1) Whether Commission may consider environmental impact of fuel processes when licensing nuclear reactors ○ (2) Did Ct. of App. reach permissible result in invalidating fuel cycle rule ○ (3) Rule find sufficient justification in admin. proceedings to be upheld? • Rule: ○ (1) Yes, Commission may consider back end of fuel cycle in individual licensing proceedings (bcs. of significant potential environmental hazard) ○ (2) Reverse and remand; Ct. App. erred in striking down rule § “Absent constitutional constraint or extremely compelling circumstances, ‘the administrative agencies should be free to fashion their own rules of procedure and to pursue methods of inquiry capable of permitting them to discharge their multitudinous duties” § Remand to Ct. App. to review rule as APA provides (actually look at the administrative record; rather than deciding it was lacking) • Reasoning ○ Congress in 5 U.S.C. §553 intended “that discretion of the agencies and not that of courts be exercised in determining when extra procedural devices should be employed” ○ Policy reasons for not extra procedure req. § (1) Cts’ continued review of agency procedure would lead agencies to adopt adjudication = lose benefits informal rulemaking; (2) Ct. makes ruling on record produced at hearing, not on info available to agency when it decided to structure proceedings; (3) Adequacy of the record does not hinge on procedural devices employed, but on whether statutory mandate of APA followed -- rulemaking need not be based solely on the transcript of a hearing held before an agency ○ This is a particularly relevant case because nuclear waste is dangerous and an highly specialized agency should be given the authority and flexibility to decide on these matters ○ Says that its for Congress or States within their appropriate agencies to make a judgement on if this court decision is wrong • Class ○ Court does not have the authority to overturn an agencies decision to go about informal rulemaking § Courts only have the powers to impose the procedures outlined by the APA □ (unless constitution requires otherwise or other special circumstance i.e. exceptional considerations around due process or violation of other laws) ○ Seminole case on relationship between APA, agencies, and courts
“On-the-record” “hearing” requirement – APA §§ 553(c), 554(a), 556(a), 557(a)
• Different interpretive presumptions (Florida East Coast Ry.; Seacoast)
• Rulemaking versus adjudication discussion in Seacoast
II. APA “on-the-record” procedures (Citizen’s Awareness concurrence)
• Notice and right to counsel – §554(b), §555(b)
• Presiding officer – §554(d), §556(b)
• Separation of functions rules – §554(d); Wong Yang Sung; Goldberg; Withrow
• Ex parte contact rules – §§551(14), 554(d), 556(d), 557(d)
• Burden of proof/present and confront evidence/witnesses – §556(d); Seacoast
• Decision based on exclusive record – §§556(d), (e), 557(c); Seacoast
• Findings of fact/conclusions of law/statement of reasons – §557(c)
• Impartiality/no bias – §556(a), §556(b)
• Discovery – §555(c); Citizen’s Awareness
• Supplemented by Due Process; organic laws; agency practice
Florida East Coast Railway
• Facts: Interstate Commerce Commission (ICC) regulated incentive rate program to get RRs to send empty freight cars back to owners; Interstate Commerce Act directed ICC to “act after hearing” but ICC limited RR to written submissions
○ Procedures for informal rule making are contained in 553
• Rule: Legitimate procedural choice, simple reference to “hearing” in the Act doesn’t activate 553(c)’s reference to cases in which “rules are required by statute to be made on the record after oppt. for agency hearing”
• Notes
○ Formal rulemaking requires additional procedures for the submission and adjudication of evidence
§ In some context can be conducted without oral hearing
○ Constitution due process clauses requires individualized oral hearings if agencies were to be given the task of setting firm-specific rates
○ The principal effect of imposing rulemaking on a record has often been the dilution of the regulatory process rather than the protection of persons from arbitrary action
• Class
○ The mere requirement of a hearing is not enough to trigger the on the record hearing requirements of 553c of APA
Seacoast Part I
• Petition by seacoast anti-pollution league to review a decision by the EPA
○ Issue with backflushing
○ The water is 120F that is backflushed and therefore becomes a ‘pollutant’
• After appeal by agency trying to get EPA approval, Administrator assembled a panel of 6 in house advisors
○ Requested PSCO submit further information and said he would hold a hearing on the new information if any party so requested
§ Petitioner requested a hearing and Administrator denied request
• Court
○ The words “on the record” are not an automatic trigger for APA
§ The resolution of this issue turns on the substantive nature of the hearing Congress intended to provide
○ Administrator must determine whether to grant a discharge permit to a specific applicant
§ Only the rights of the specific applicant will be affected
§ Proceedings were conducted in order to adjudicate disputed facts in a particular case, NOT for the purpose of promulgating policy type rules or standards
□ Therefore this was adjudication and not a rulemaking
® 554 is relevant, not 553
○ This is exactly the kind of quasi judicial proceedings for which the adjudicatory procedures of the APA were intended
§ “the panoply of procedural protections provided by the APA is necessary not only to protect the rights of an appellant for less stringent pollutant discharge limits but is also needed to protect the public for whose benefit the very strict limitations have been enacted”
• Class
○ The relevant statute says you cant provide an exemption unless there is a public hearing (the issue is if the ‘hearing’ needs to comply with APA)
○ There was an on the record hearing conducted by an administrative law judge and that was certified to the regional administrator
§ That’s when it was appealed to the head of the EPA. It is at that point the technical review panel gets involved
○ Threshold question that the court has to answer to decide if APA applies:
§ Looking at substantive effects
□ Not clear what that means but we do know that things like loan programs (which only require business procedures) doesn’t implicate the substantive threshold
○ Section 551 has relevant definitions:
§ “Rule” is important here
□ The rule only affects the present and not future events so this is a ‘rule’ under the definition
□ [remember the difference between rules and orders is ‘temporal’]
○ Prof says this court is confused… (why the fuck are we reading this then)
○ RULE:
○ “we are willing to presume that unless a statute otherwise specifies an adjudicatory hearing subject to judicial review must be on the record”*
§ There would have to be some other evidence to prove otherwise and destroy presumption
___
○ 553 b,c,d only apply if it’s a formal adjudication
○ KNOW that if its on the record then you get to 556 which has an ‘impartiality’ requirement which is very important
○ Basic concept of on the record hearing is the only thing an agency can consider is the evidence introduced ‘on the record’
§ The parties get to see it – that’s what makes it a public trial
○ 557: agency has to decide the matter de novo
○ Just because APA does not apply, does not mean that due process or organic law does not apply
§ Have to look at all laws that govern the agency in addition to APA
Citizens Awareness Network Inc. v. United States (1st Cir. 2004)
[prof has only given us the concurring opinion to read]
• Agrees with basic premise of the majority – the new rules promulgated by the NRC to reduce the level of formality in reactor licensing proceedings comply with the “on the record” requirements of the APA
○ Said that the justification by NRC was an afterthought though. They really argued early on that 42 USC 2239 which requires Commission to hold hearing “upon request of any person whose interest may be affected” before granting new license did not require on the record hearings of the APA
• “formal” simply refers to hearings that need to be conducted pursuant to 5 USC 555-557
• For an on-the record adjudication required by 554, the procedures can be reduced to 10 points [PAGE 484-485] **
• Notes about procedures
○ No reference to discovery
○ Great deal of flexibility given to the agency
○ Much flexibility with determining if cross examination is necessary
§ Only necessary “for a full and true disclosure of the facts”
Seacoast Part II
• 554 of APA does not apply to governmental functions such as administration of loan programs
○ traditionally have never been regarded as adjudicative in nature and as a rule have never been exercised through anything other than a business procedure
• An adjudicatory hearing subject to judicial review must be on record
○ Unless a statute specifies otherwise
○ Presumption is that formal adjudicatory procedures are not necessary
• “It is assumed that where a statue specifically provides for administrative adjudication (such as the suspension or revocation of a license) after opportunity for an agency hearing, such specific requirement for a hearing ordinarily implies the further requirement of decision in accordance with evidence adduced at the hearing”
• This case
○ Dealing with environmental effects of backflushing
○ Petitioner argues
§ Administrator relied on information that was not part of the exclusive record for the decision in violation of 556e
§ Even if information was part of record, Administrator was obligated to provide an opportunity for cross examination pursuant to 556(d)
• 556e issue
○ Statute does not limit time frame during which papers must be received
○ 557(b) gives an agency to power to preside at the taking of evidence on appeal
○ Administrator not at fault – court thinks the flexibility is important
• 556(d)
○ Administrator can require evidence to be submitted in written form in initial licensing
○ However matters like this, experts are very important
§ Administrator at error for not holding a hearing
○ Petitioner claim for cross examination is unfounded
§ No absolute right to cross examine a witness. Only required when its necessary for full disclosure of facts
○ Remanded for a hearing. Administrator can have cross examination if they deem it will be helpful
§ Remember Chenery
• Issue of using EPA scientists to assist in decision
○ Can only consider evidence not barred by APA
○ Can use scientists to assist but need to make decisions using information on the record
• Class
○ Morgan v. US
§ When congress assigns decision making authority to an individual – that official has to make the decision
□ Unless the statute allows for delegation
□ Person can still get assistance of other employees to help make the decision
○ Remember 554d did not apply in this case because it pertains to the head of an agency (in this case the Administrator is the head of the EPA)
Withrow v. Larkin (US 1975)
• Doctor who performed abortions – criminally prohibited at the time
○ Subject to investigatory hearing by Wisconsin Medical Examining Board
○ Dr’s counsel was present at preliminary hearing and allowed to explain evidence but was not otherwise allowed to participate
○ Dr. found in violation and scheduled a contested hearing that could lead to license suspension
• Procedure
○ Dr. sues, alleged combination of investigatory and adjudicatory roles in the Board violated due process
○ District Court rules for Dr.
○ Supreme Court reverses
§ This does not violate the APA and does not violate due process
• Reasoning
○ P needs to overcome high bar of persuasion to show the combination of investigative and adjudicatory roles poses a risk of actual bias due to the honesty and integrity of those serving as adjudicators
○ No specific foundation had been presented for showing board had been prejudiced by its investigation
§ These adjudicators are presumed to be capable of properly making this decision without any extra evidence to the contrary
○ Court uses judges issuing warrants before a trial not barring the judge from presiding over the matter at an actual trial as an example of where this happens elsewhere
○ Court could still look at the particular facts of a case and decide that there was a violation of due process if P brings the matter
§ [this is the whole concept of Chenery]
• Class
○ P trying to get around 554(d) issue by arguing due process
Integrity of “on-the-record” actions
• Designated official must review facts/make decision (Morgan cases; Seacoast)
• Presumption of regularity/appearance of bias (Morgan cases; PATCO; Pillsbury)
• Separation of functions (Wong Yang Sung; Goldberg; Withrow; PATCO)
• Lack of impartiality or prejudgment (PATCO; Cinderella)
• Ex parte contacts/Executive influence (Portland Audubon; PATCO)
• Interested person outside of agency
• Communications off the record relevant to merits
• Equitable discretion on remedies
àOnly communications w/ “interested persons” are a violation, and court must consider whether, as a result of improper ex parte communications, the agency’s decision-making process was irrevocably tainted
Professional Air Traffic Controllers Organization v. Federal Labor Relations Board (DC Cir. 1982)
• Facts ○ FLA is authorized to revoke union’s status if support a strike of federal employees; PATCO ordered strike of air traffic controllers against FAA; FLA revoked union status ○ Allegations of improper ex parte communications § (1) After PATCO complaint filed, FLRA General Counsel discussed with FLA board a memo about what disciplinary options were available against PATCO § (2) Sec. of Transportation phoned member of board. He stated no meaningful efforts to resolve issue had been made and he would appreciate “expeditious handling of the case" § (3) Executive council member of the AFL-CIO had dinner with board member said PATCO not punished severely enough • Rule ○ Congress wanted common sense application of ex parte communication ban; goal is to keep decisions open and provide all parties full notice of communications ○ “In enforcing this standard, a court must consider whether, as a result of improper ex parte communications, the agency’s decision making process was irrevocably tainted so as to make the ultimate judgment of the agency unfair...” § Not tainted enough in this case for court to change the decision ○ 557(d) – applies only to ex parte communications with “interested persons” (greater interest than public in general) § Ex parte communication def: an oral or written communication not on the public record to which reasonable prior notice to all parties is not given, but… not including requests for status reports on any matter or proceeding § 557(d) specifically prohibits communications relevant to the merits of the proceeding ○ Court says a dinner between judge and interested party is not per se violation -- judges must have friends and neighbors too ○ Remedies: Disclosure of the communication and violating party must “show cause why his claim or interest in the proceeding should not be dismissed, denied, disregarded...” ○ Here, yes, violation of APA, but not harmful enough to remand § (1) Purpose of meeting was to discuss budget; contact was inadvertent and no arguments were made § (2) The Transportation Sec. definitely interested person. But specifically avoided the merits of the case. § (3) Executive spoke about the hearing, member should have stopped it; but no threat made, no gains = no harm • Class ○ This was an ex parte communication ○ This was relevant to the case ○ BUT court did not believe this tainted the proceeding § Not every ex parte communication requires vacating an agency decision § Can address the violation in a different manner
Portland Audobon Society v. Endangered Species Committee (9th Cir. 1993)
• Rule: President and his staff are interested persons within 5 USC 887(D)(1); President and staff are covered by ex parte §557(d)(1)’s prohibition, they’re not part of Committee decisions-making process
• Takeaway: President contacting adjudicator and discussing the matter is an APA violation
• Class
○ Court not accepting the argument that President is not an interested party
○ Decides against the separation of powers argument
○ Prof: there is another decision; the president is not an “agency” for the purpose of the APA
§ DOJ might have been better off arguing separation of powers from this angle than through separation of powers argument
• Prof: the law is mostly concerned with making sure decisions are made with an open mind! We know people have biases but we care if they are open minded about deciding a specific case based on the facts. (see below)
Cinderella Career and Finishing Schools, Inc. v. FTC (DC Cir. 1970)
• Facts
○ Reviewing cease and desist order from FTC to Cinderella
§ Making representations and advertising in a manner which is false, deceptive
○ FTC chairman made a speech before the FTC decision that seemed to have prejudicial influence
• Reasoning
○ Remanded for more proceedings; Chairman statements were improper
○ Test
§ “whether a disinterested observer may conclude that the agency in some measure adjudged the facts as well as the law of a particular case in advance of hearing it”
○ Remanding; does not matter that Chairman’s vote was not needed to pass the order in the first place
○ Class
§ This is not an ex parte communication case
§ The notion is that the judgment should be fair and not prejudged on the facts of the case
§ Just the fact that Chairman participated in fact finding or being involved generally is not a problem unless something like the facts of this case happen
Pillsbury Co. v. FTC (5th Cir. 1966)
• Facts
○ FTC engaged in administrative proceedings against Pillsbury challenging its acquisition of competing flour mills
○ Senate Judiciary Committee unhappy w/ approach and called Chairman of Commission, his staff, General Counsel, another Commissioner, Director of Litigation before the Committee for a hearing; questioned witnesses at length about their theory of the case and criticized Commission for not being more forceful
○ Chairman of Commission complains of interference and removes self
○ FTC decides against Pillsbury, which appeals bcs. improper influence
• Decision
○ Reverse and remand: “improper intrusion into the adjudicatory process” that deprived Pillsbury of a fair and impartial hearing
• Takeaway
○ Congressmen allowed to testify and file letters as long as they don’t apply “intense and undue” pressure in particular adjudication (those communications do get put on the record)
○ Pillsbury insulates agencies from having to discuss pending case before congressional committee
• Class
○ Not many cases like this come up anymore. Still rely on ‘Pillsbury’ doctrine
Informal Rulemaking Procedures
• Notice, publication, required contents (APA §553(b))
• Opportunity for comment/data disclosures (Nova Scotia; Rybachek; Ober)
• Concise statement of basis and purpose (Nova Scotia)
• Substantive legal authority for rule
• Respond to critical questions raised
• Explain why proposed alternatives rejected
• “Logical outgrowth” test (Long Island; Allina)
• “Record” for comment; agency action; judicial review (Nova Scotia)
II. Relief for Procedural Rulemaking Errors
• Direct review – vacate and remand (Chenery I)
• Enforcement actions – deny enforcement (Nova Scotia)
• Remand without vacatur (Sugarcane Growers; Checkosky)
• Harmless error (Wyman-Gordon; Sugarcane Growers)
Relevant law for Nova Scotia
5 USC 553(c )
“…the agency shall give interested persons an opportunity to participate in the rule making through submission of written data, views, or arguments with or without opportunity for oral presentation. After consideration of the relevant matter presented, the agency shall incorporate in the rules adopted a concise general statement of their basis and purpose”
[553(b) is also relevant]
United States v. Nova Scotia Food Production Corp (2nd Cir. 1977)
• Rule from outline: Concise and general statement inadequate in this case because did not even summarily address several of the serious concerns raised about rule; and where basis for rule is scientific material outside agency expertise, should be shared
• Facts
○ 1969 after cases of botulism, FDA issues notice of proposed rulemaking concerning smoked or salted fish; regulation reached all fish, would control heat and salt content
○ Industry submitted comments, including: that regulation should be (1) fish-specific, that (2) temperature could be lowered if salt content were higher, and (3) high temps would destroy the whitefish industry/company
○ FDA rejected first argument, but ignored the remaining ones
• Rule
○ (1) In enforcement action must rely exclusively on the record made before the agency to determine validity of the regulation
○ (2) Agency may resort to expertise outside in an informal rulemaking procedure, but must share data/reports (N&C not useful if data kept secret)
○ (3) Can’t leave vital questions in comments unanswered; e.g. didn’t address that the whitefish industry would implode
§ May find commercial infeasibility can’t stand in the way of public interest; but process should disclose whether regulation is commercially feasible
• Class
○ There is not informed comment if the basis for which the agency is relying on making a rule is not disclosed
§ Relevant facts: Agency did not disclose the underlying scientific evidence for which it was relying for a decision
○ From his graphic for teaching help. What needs to be in the concise statement of basis and purpose
§ Substantive legal authority for rule
§ Respond to critical questions raised
§ Explain why proposed alternatives rejected
Long Island Care v. Coke (2007)
• Rule from outline: In case of multiple drafts, those who like original draft can’t just sit back and not comment on assumption they will be notified and have a chance to voice their views later before a diff. rule is adopted
• Background: Whether the Fair Labor Standards Act’s domestic services exemption applied to domestic workers who provided companionships services but employed by third agency; initial draft placed them outside exemption; Dept. withdrew that draft and adopted one including them in exemption
Allina Health Services v. Sebelius (DC Cir. 2014)
• An agency may promulgate a rule that differs from a proposed rule only if the final rule is a ‘logical outgrowth’ of the proposed rule… A final rule is. A logical outgrowth if affected parties should have anticipated that the relevant modification was possible
Overall rule for Rybacheck and Ober: Agency can add additional materials to record after N&C, but if adding things after deadline, has to allow other parties to comment
Rybacheck v. EPA (9th Cir.1990)
• Facts
○ Challenge to EPA regulations under Clean Water Act on discharge of debris
into rivers; Pff argued addition of 6,000 pgs to record after N&C period violated
right to comment on the record
• Rule:
○ Additional material didn’t violate right meaningful participation; “nothing
prohibits agency from adding supporting docs. for a final rule in response to public
Comment”
Ober v. EPA (9th Cir. 1990)
• Facts
○ EPA requires additional 300pg. doc from state after N&C deadline
• Rule
○ Can add to record, but have to offer others chance to comment on it =
violation of APA in this case
• Class
○ Fi the information is being used to make the decision then its required to allow a comment. Do not need to have a comment if the information is not used to make a decision
Sugar Cane Growers Cooperation v. Veneman (DC Cir. 2002)
• Facts
○ Dept. of Agriculture sugar payment-in-kind program; farmers received surplus for plowing under given acreage; Dept. by press release announced it decided to implement program without APA rulemaking (no notice and comment)
○ Disadvantaged farmers bring suit, argue APA promulgated rule w/o N&C; Govt. argued announcement not a rule, similar to awarding contract in bid
• Takeaway
○ This program is a rule under the APA
○ It is setting the terms of the law for the future SO IT IS A RULE
§ If it has as future effect then
• Class
○ Harmless error doctrine (from Wyman Gordon) was rejected by this court
○ Instead the court remanded for decision without vacating the rule as it stood in place
Class
• Chenery gives us the initial remedy that we remand to agency for new decision
○ In an enforcement action, all the court can do is explain why the agency is enforcing the rule in a certain enforcement action
Integrity of Informal Rulemakings
• Advocacy by employees/consultants (Steelworkers)
• Communications with persons outside of the agency
• Due Process evolution (Sangamon Valley to Action for Children’s TV)
• Executive versus Congressional contacts (Costle)
• APA and other limitations (Costle; hybrid laws; agency regulations)
• Prejudgment of policy/legislative facts (C&W Fish)
II. “Good Cause” exemption (Utility Solid Waste)
• Timing and declaration requirements satisfied?
• Statutorily legitimate grounds or not?
United Steelworkers of Am. V. Marshall (DC Cir. 1980)
• Ct. rejected complaints that agency staff member was too involved, or too one- sided in rule making (on lead exposure standards for employees)
○ Can’t expect decision-maker to isolate self co-workers
• Ct. rejected procedural complaint about agency’s use of consultants to
summarize/evaluate the data; agencies free to hire specialists on particular issues
• Also holds the same thing for consultants hired to help an agency
○ As long as the decision maker showed they made the decision independently on the evidence then there is nothing wrong
• Rule:
○ No limitation on staff involvement; cant expect to insulate from staff
• Class
○ This question: any rule making restrictions that exist between the decision maker staff in the agency
○ Court also says its fine to have outside consultants
§ These are technical matters and agency needs some help
§ The decision maker still took into account all relevant facts so it was fine
***Statutory restriction for ex parte communication do not apply for informal rule making
Sangamon Valley Television Corp. v. US (DC Cir. 1959)
• Rule: Ex-parte communications btw. parties and commissioner prohibited when conflicting claims to valuable privilege at stake
• Facts
○ FCC reassigned TV station from St. Louis, Mo., to Springfield, Illinois, in way that was advantageous to St. Louis, and evidence emerged St. Louis station president had inapprop. contact w/ FCC commissioners
• Court
○ Reopened proceedings; allocating TV stations among communities and resolving private claims regarding an important (valuable) privilege requires proceedings to be carried out in open
• Class
○ Statutory restriction for ex parte communication do not apply for informal rule making
§ Therefore these are due process challenges
Home Box Office Inc. v. FCC (DC Cir. 1977) [widely criticized]
• Rule: After publication of notice of proposed rulemaking, agencies cannot engage in ex- parte communications w/ interested parties; have to place such communications on the record
• Facts
○ 1975 FCC ends 3-year period of N&C by adopting four amended rules governing what could be shown by paid TV services like HBO
○ Those not reached by paid services argued against expanding what bcs. would hurt them; HBO etc., argued for expanded services
○ FCC relaxed restrictions; but then parties suggested participants in rulemaking had contact with Commissioners and others at the FCC
§ E.g. broadcast interests met w/ commission personnel 18 times, specific cable interests did too, etc.
• Court
○ Remand the record to the commission for supplementation w/ aid of specially
appointed examiner
○ Final shaping of the rule may have been compromised; “possibility that there is one administrative record for the public and this court and one for the commission and those in the know is intolerable”
• Notes
○ Underlying idea is that we need to know what evidence the decision was made on and it all has to be available to the record
§ This decision was regarded as too broad a reading of the due process clause
**Subsequently seen as extra procedure prohibited by Vermont Yankee, but never overruled, and continues to be argued
Action for Children’s Television v. FCC (DC Cir. 1977)
• Facts
○ FCC rulemaking on kids TV programming; 100,000 comments; 6 days of panel discussions/arguments
○ Early on the broadcast industry had private meetings w/ commission; went on to implement self regulations = FCC suspends rulemaking
• Court
○ No improper ex-parte communication in this case; only inappropriate if it possibly materially influenced action ultimately take
○ Can’t go as far as HBO; would require decision-maker to summarize what he reads every night, ask for disclosure of full thoughts
○ Pro Ex-Parte Contacts Rationale: genuine dialogue = check on agency staff reliability; avoids “staff capture” + need for competing positions
• General Rule
○ Retreat from HBO: only if you can show ex parte contact materially influenced ultimate decision was contact inappropriate
• Class
○ Due process clause should only be understood to require disclosure of off the record contacts where conflicting claims of a valuable privilege are at issue.
§ And those ex parte conflicts materially affected the action taking in the rule making
Sierra Club v. Costle (D.C. Cir. 1981)
• Facts
○ EPA issued new sulfur dioxide ceiling standards via rulemaking; could have issued lower ceiling, but would have hurt coal industry
○ Environmental Defense Fund challenged regulation, said higher ceiling issued because of “ex-parte blitz” by coal industry, President Carter, Senator Byrd (in form of post-decision oral communications)
• Court
○ Not unlawful for EPA not to record oral communications in policy session btw. President and EPA officials during post-comment period
§ Communications in adjudication or quasi-adjudicatory proceedings may have to be put on record
○ In order to challenge congressional pressure, have to show
1) Member of Congress/staff pushed issue not relevant by statute
2) Congressional pressure was significant
○ Reasoning: President has responsibility for policy for whole govt. cant insulate him from regulatory process
• Class
○ Practical reasoning here: president needs to talk to people in his/her government. This is such an obvious conflict that if Congress did not want it then they would have put it explicitly in the statute
○ Even if the president influenced a decision – court is not going to read that restriction into the rules
§ Agency still made its choice in a lawful way; the real remedy is a political one for people to realize the president is medling
• General outline rule: President can contact people involved in rulemaking
C&W Fish Co., Inc. v. Fox (DC Cir. 1991)
Decision-maker disqualified only when there is clear and convicting showing he has an unalterably closed mind on matters critical to disposition of the proceeding
• Facts
○ 1990 Dept. of Commerce’s National Oceanic and Atmospheric Administration (NOAA) issued a rule banning use of drift gillnets in certain fisheries; regional councils had advocated for banning for years
○ Fox new NOAA Asst. Administrator, approved amendment for ban
○ Pff complained Fox had “unalterably closed mind” bcs he had been advocate for drift gillnet ban, in Fl. Marine Fisheries Commission
• Court
○ Affirms rule; he didn’t have unalterably closed mind (can’t look at his past statements/ advocacy, would disqualify everyone)
○ To determine if he was biased have to look at prejudgments (“individual disqualified from rulemaking only when there has been a clear and convicting showing . . . [he] has an unalterably closed mind on matters critical to the disposition of the proceeding”
• Class
○ Prof says hes not sure if there is a case that has ever met this standard to show prejudgment
5 U.S.C. §553(b)(B)
“Subsection does not apply . . . when agency for good cause finds . . . notice and procedure thereon are impracticable, unnecessary, or contrary to the public interest”
Utility Solid Waste Activities Group v. EPA (DC Cir. 2000)
àGood cause exemption not an escape valve for clerical and other errors (narrow exemption?)
• Facts
○ EPA sets PCB spill standards when surface can be used after spill; in 1998
changed rule to respond to comment that concentration of 50 ppm was too high;
changed to 10ppm by typo; then w/o N&C changed it back to 50
• Court: Exemption does not apply; only exempt if goal of rule would be defeated by
prior notice
• Class
○ Chenery action in the end
○ Harmless error doctrine is not satisfied here
Exemption for Policy Statements/Interpretive Rules (versus Substantive Rules)
• Authority for and permissibility of lawmaking? (Youngstown; Nova Scotia)
• New rights or duties created? (General Electric)
• Restrictions on agency discretion? (Center for Auto Safety)
II. Informal Adjudication – §555 default rule
• Limited procedural requirements of APA (§555; LTV v. PBGC)
• Rational explanation requirement (Olivares)
• Due Process protections (LTV v. PBGC; Marshall v. Jericho)
• Other procedures?
• Impartiality required – adjudicators v. prosecutors?
5 U.S.C. §553(b)(A)
“Subsection does not apply to interpretative rules, general statements of policy, or rules of agency organization, procedure, practice”
General Electric Company v. Environmental Protection Agency (DC 2002)
à Cannot rely on exemption if doc. expresses change in substantive and binding policy; can’t escape N&C that way
• Facts
○ EPA issued “OCB Risk Assessment Review Guidance Doc”; governs application of regulations under the Toxic Substance Control Act (TSCA), instructs on cleanup and disposal of PCB
○ Guidance Doc. outlines two approaches of risk assessment; (1) calculate cancer and non-cancer risks separately, use factor recognized by EPA, (2) use total toxicity factor of 4.0
• Court
○ (1) Case is ripe for review (doc. is eligible for pre-enforcement review in same way rule would be)
○ (2) This guidance doc. is actually a legislative doc./substantive, court can review it
§ Agency pronouncement will be considered binding if it appears on its face to be binding or is applied by agency in way that indicates its binding (document has practical binding effect if affected parties reasonably led to believe failure to conform will bring adverse consequences)
§ Cannot rely on 553(b)(A) exemption if doc. expresses change in substantive and binding policy
○ (3) GE prevails on the merits here; the doc. is a rule, EPA did not comply w/ APA and TSCA procedural reqs.
§ EPA rule in this case (1) approves of two specific measures; not open to other approaches (2) outlines what has to be considered in those two approached = binding
• Class
○ This is a pre-enforcement challenge where GE is bringing the action
○ Ultimate question is whether or not someone is bound. If someone is bound then we have law. If we have law it has to go through N&C adherent to the EPA
Center for Auto Safety v. National Highway Traffic Safety Administration (DC Cir.
2006)
If doc. (1) doesn’t bind agency to take action, and (2) the consequences are only practical, not legal = just general/interpretive
• Facts
○ National Traffic and Motor Vehicle Safety Act requires manufacturers to issue recall notifying consumers and offering free remedy; can be voluntary or mandated by NHTSA
○ 1980s manufacturers started issuing regional recalls; 1998 NHTSA issued policy guidelines outlining policy on regional recalls
○ Distinguished situations in which regional recalls are appropriate (short- term meteorological condition v. long term exposure [inapprop.])
○ 2004 Center for Auto Safety and Public Citizen argued policy violated APA N&C procedure because the policy became a de facto rule; NHTSA says its just a general statement of policy
• Court
○ Guidelines nothing more than general statements w/o legal force; don’t determine rights/obligations, merely expressed views on legality of regional recalls, doesn’t change it into binding rule
○ NHTSA Office of Defect Investigations not bound to apply rule
§ Diff. from General Electric, because there the EPA bound itself to accept application using total toxicity approach
○ Consequences are practical, not legal; that industry has adopted it as de facto rule, doesn’t make it legally binding
• Class
○ Guidelines had not been published in federal regulations, agency did not treat it as a rule, did not act as if they were binding rules, and agency preserved the right to change guidance
§ Applying similar factors to GE and coming out diff because diff set of facts
○ Have to also ask the question if Congress gave the agency the power to make a rule
The Legally Binding/Force of Law Test
o Is the rule legally binding on persons outside the agency, by creating
rights/imposing obligations, cannot be an interpretive rule o Factors to assess whether it’s legally biding
§ (1) in the absence of the rule, would there be an adequate basis for enforcement action or other agency action to confer benefit/enforce?
§ (2) does rule interpret a standard or make a policy (does it use interpretive tools; or is it rather relying on specific fact rather than citing to statute)
§ (3) is interpretive rule consistent with legislative rule it is supposedly interpreting
§ (4) consistent w/ own prior long-standing interpretation?
5 U.S.C. §555: Ancillary Matters
(a) This section applies, according to the provisions thereof, except as otherwise provided
by this subchapter.
(b) A person compelled to appear in person before an agency or representative thereof is entitled to be accompanied, represented, and advised by counsel or, if permitted by the agency, by other qualified representative. A party is entitled to appear in person or by or with counsel or other duly qualified representative in an agency proceeding. So far as the orderly conduct of public business permits, an interested person may appear before an agency or its responsible employees for the presentation, adjustment, or determination of an issue, request, or controversy in a proceeding, whether interlocutory, summary, or otherwise, or in connection with an agency function. With due regard for the convenience and necessity of the parties or their representatives and within a reasonable time, each agency shall proceed to conclude a matter presented to it. This subsection does not grant or deny a person who is not a lawyer the right to appear for or represent others before an agency or in an agency proceeding.
(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 person made in connection with any agency proceeding. Except in affirming a prior denial or when the denial is self-explanatory, the notice shall be accompanied by a brief statement of the grounds for denial.
Olivares v. Transportation Security Administration (DC Cir. 2016)
• Facts
○ TSA determined plaintiff (foreign alien) was a risk to aviation and national security and denied application for flight school
§ P was convicted of federal offense with possession of controlled substance and deported
§ Had FAA license revoked when deported
§ Got opportunity in Venezuela to work as a pilot and ended up being put in a position where he reapplied for FAA certification
□ TSA reviewed and granted request
○ GAO published TSA policy for background investigations
○ TSA adopted new procedures for investigation
§ P applied for new Type Certification with this new criticism and TSA denied the subsequent application for Type Certification
□ No further explanation was given in the denial
○ Once P filed complaint the TSA gave sworn declaration as to why P was denied the certification
• Issue: 555(e )
○ P claims email to him denying his application for flight training violated the requirements of 555(e ) because the email offered no statement of the ground for agency’s denial
• Court
○ 555( e) mandates that whenever an agency denies a “written application, petition, or other request of an interested person made in connection with an agency proceeding,” the agency must provide “a brief statement of the grounds for denial,” unless the denial is “self-explanatory.”
§ APA standard was not met in this case
§ This was not self explanatory
□ HOWEVER the declaration by TSA in response to complaint was sufficient
○ Court adds warning telling agencies to respond with the reason immediately and not wait for a P to file in court
§ Court ultimately denies petition for review
• Class
○ This is a challenge to the application denial. This is not the challenge of a rule
○ Court scolded the agency because the agency was supposed to give these reasons to the P in the first place, but
§ Court sides with them anyway
Pension Benefit Guaranty Corp. v. LTV Corp. (U.S. 1990)
–> If basic APA reqs., and statutory reqs. met, can’t impose extra burdens on informal procedures
• Facts
○ ERISA authorized PBGC to terminate pension “involuntarily;” and to “undo” termination and restore a pension when appropriate
○ After LTV filed for bankruptcy, PBGC terminate its pension plans, then PBGC determined LTV’s financial situation improved and issued a Notice of Restoration for plans
○ LTV refused to comply; PBGC sought enforcement; Dist. Ct. vacated restoration order, Ct. App. affirmed, said restoration arbitrary & capr. and no procedural safeguards
• Court
○ Reverse; determination lawfully made by informal adjudication, minimal reqs of §555 met
○ Just a deprivation of a benefit/restoration of a liability (not deprivation of a right) = due process doesn’t kick in
○ And Ct. App. didn’t point to any ERISA or APA provision demanding extra procedures (Vermont Yankee [can’t impose extra procedure] & Overton Park [inquiry is whether record was adequate for review, not whether ct. thinks decision fair])
• My notes
○ Decision states that the agency decision was not arbitrary and capricious
• Class
○ LTV is essentially trying to get the agency on the hook to help them pay their pension obligations
§ LTV is arguing that PBGC decision to restore pension plan was arbitrary and capricious
○ This an ‘order’ adopted by the agency because it has nothing to do with future effect, its dealing with present effect
○ Failure to provide the procedures did not violate 555(e )
Marshall v. Jerrico, Inc. (US 1980)
• Facts
○ Under Fair Labor Standards Act, sums collected as civil penalties for child labor are returned to ESA and DoL in reimbursement for the costs of determining violations and assessing penalties
○ P argues this is a violation of due process
• Court
○ Prosecutors need not be totally neutral and detached
§ However judge cannot be offered any incentive for securing civil penalties
• Class
○ Issue is if the due process clause prohibits the agency from making an enforcement decision and the money collected goes to the agency making the decisions
§ Falls into ‘adjudication’ bucket
○ Due process clause applies here BUT the procedure does not require a rigorously impartial decision maker
Class
• Interpretive rules and policy guidance are the same for our purposes
Choice Between Rulemaking and Adjudication
• Who makes choice and why? (Chenery II; Bell Aerospace)
• What limits on choice?
• Organic law mandates/limitations (Bowen)
• Presumption against authority for “retroactive” rules (Bowen)
• No rules with “unreasonable” “secondary retroactive” effects (Bowen
concurrence)
• No purely prospective adjudications (Wyman Gordon)
• No “unfair” retroactive adjudications (Bell Aerospace; Epilepsy
Foundation; Fox II)
• Substantial reliance interests/unfair surprise?
• Damages, fines, reputational harms?
• Distinguishing “retroactive” from “non-retroactive” actions? (Bowen
concurrence)
• Present/past effects versus future effects?
• Changing past versus future legal consequences of past acts?
• Relation to non-delegation doctrine concerns (Fox II; Gundy)
Chenery II: agency, having been shown reasoning error, may reach same position using a different theory
à Agency gets to decide whether it proceeds by general rule or ad hoc decisions (depending on topic/how well-developed principle is)
SEC v. Chenery (U.S. 1947) [Chenery II]
• Facts
○ Public Utility Holding Act of 1935 permitted companies to forestall mandatory reorganization by proposing voluntary plan
○ SEC refused to approve Chenery’s proposed voluntary reorganization under which it argued it should retain substantial role by buying stock
○ Pff argued SEC should create a general rule, not by ad hoc decision
• Court
○ SEC’s judgment stands; reasoning in this case much clearer, drew heavily on expertise in dealing w/ utility reorganization
○ The choice between proceeding by general rule or by ad hoc decisions is one that lies primarily in the informed discretion of the administrative agency
§ Agency, unlike a court, can make new law through rule-making; but which form is better suited should be up to the agency (depends on the topic/how well developed a principle is)
• Dissent: (Jackson); Can’t take this on expertise, first time dealing w/ this
• My notes:
○ Court unwilling to put agency in a box and not allow them to make the most effective decision for the situation in front of them
• Class
○ There are organic laws that specify that agency has to decide via regulation instead of adjudication but in the absence of that law then the APA is the default rule the discretion is left to the agency
“Limitations on Retroactive Rulemaking”
à Cannot make rules that apply retroactively unless authorizing statute explicitly allows
Bowen v. Georgetown University Hospital (U.S. 1988)
• Facts
○ 1981 Sec. of HHS issued cost-limit schedule, changed method for calculating “wage index,” factor used reflect salary levels for hospital employees in different parts of country
○ Under prior rule, wage index calculated using average salary levels for all hospitals in area; new rule excluded wages paid by Fed. Govt hospitals
○ After Dist. Ct. invalidated new rule in a suit brought by various hospitals in DC, Sec. settled hospitals’ cost reimbursement reports by applying old wage-index method; but then 1984 reissued new rule and proceeded to recoup sums previously paid
○ After exhausting admin. remedies, respondents brought suit, claiming that retroactive schedule invalid under, Medicare Act
• Court
○ 1984 reinstatement of the 1981 cost-limit rule is invalid
○ Congress’ statutory grants of rulemaking authority does not encompass power to promulgate retroactive rules unless power is expressly conveyed
§ Statute doesn’t allow this regulation applied retroactively; language applies only to individual adjustments, not an across the board rule that applies retroactively
• Class
○ Court is saying a law with ‘primary retroactive effects’ is not allowed
○ Adjudication is really just telling everyone what the law always ways (not changing the law)
○ Prof likes this opinion – says difference between secondary and primary retroactive effects can be hard to get
à Agency does not have to use rulemaking to reinterpret statute; adjudication may be especially appropriate in fact-specific Qs
NLRB v. Bell Aerospace Co. (U.S. 1974)
• Facts
○ Bell refused to bargain w/ buyers at one of its facilities, claiming they were “managerial employees” outside NLRB collective bargaining
○ NLRB decided the buyers now allowed to unionize, i.e. not managerial personnel excluded bcs conflict of interest, decision controversial
○ Opposite of previous decision which held managerial personnel covered by the Act, & treated buyers specifically as managerial
• Procedure
○ 2nd Cir. refused to enforce Board’s order against Bell; (1) “Congressional
understanding of long-standing agency practice precluded the Board form reinterpreting the Act to exclude only managerial personnel”; (2) Board could determine buyers were not managerial, but had to use rulemaking to do so
• Court (affirmed in part, reversed in part)
○ (1) Agree, NLRB can’t now reinterpret the Act, must remand to permit Board to apply proper legal standard in determining status of buyers
○ (2) Board does not have to use rulemaking, not precluded from announcing new principles in adjudicative proceeding
§ Adjudication may be especially appropriate; many retail units employ buyers in diff. ways, no way to set one standard
• Class
à Cannot retroactively apply new rules in adjudication (impose sanctions to current parties); but can announce new rules in adjudication and give it prospective only effect
Epilepsy Foundation of Northeast Ohio v. NLRB (DC Cir. 2001)
• Facts
○ Epilepsy foundation brings case against employee; usually union employee has right in disciplinary hearing to have a union rep.
○ NLRB v. Weingarten (U.S. 1975); Sup.Ct. held union employee subject to disciplinary action has right to bring union rep. to the confrontation
○ NLRB vacillated over how far Weingarten goes; here reinterpreted, extend Weingarten rule to non-union employees
• Court
○ Board didn’t violate statute or Weingarten rule; bcs., wouldn’t retroactively impose sanctions, just announced new interpretation
○ Board could restate/reinterpret in this adjudication, but could not apply retroactively (Epilepsy had followed previous rule, can’t penalize)
• Class
○ This is an example of an abuse of discretion when applying retroactive law in adjudicatory instance
§ The reason is that it is unfair
○ Tries to change interpretation of law and impose it retroactively
○ How do we square this with wyman gordan?
§ Prof says no good answer to this question
à Scalia [previous dedicion]: Agency does not have to explain why a new policy is better than past one, just have to show it is “permissible” and there is good reason for it
FCC v. Fox Television Stations Inc. (U.S. 2012)
• Facts
○ FCC’s imposed liability on Fox Television Stations for fleeting expletives spoken during two nationally broadcast awards ceremonies after it had in previous letters/statements acceptance similar expletives as not warranting sanctions/enforcement action; FCC argues those previous statements were fleeting dicta, did not represent its official position; Fox said this is A&C decision
• Court
○ [PREVIOUS DECISION]
○ Not A&C: FCC need not prove that its change in policy is “better” than its prior stance; FCC need merely prove that its new policy is “permissible” and that there are good reasons for it, as in this case
§ FCC clearly said it was breaking w/ past policy; offered legitimate reasoning; concern for welfare of children
§ Second change of policy doesn’t require more explanation than the first one (FCC switched back and forth before)
§ Can’t require FCC explain more detail because, studies impossible
○ Current decision
§ Laws that are too vague need to be invalidated
§ The Commission policy in place at the time of the broadcasts gave no notice to Fox or ABC that a fleeting expletives or a brief shot of nudity could be actionably incident
§ Too vague therefore -> Commission failed to give Fox or ABC fair notice prior to the broadcasts in question
□ Commissions orders must be set aside
• Class
○ FCC made a decision in a different case and now is trying to apply those decisions to this decision (but the decisions were made after the incident at issue here)
○ Part of ‘notice’ is knowing what rules someone is subject to
§ In this case there was not proper notice
§ You cannot apply retroactivity in this case
□ Could cause reputational harm and other harms
• Now: organic law could overrule ability to do retroactivity; if there are unreasonable secondary retroactive effects then not allowed (FCC v. Fox);
○ Unfairness idea comes from an unfair surprise (no notice)
Fox 2 is handling the vagueness idea
