Leg Reg Outline (Admin v)

7/30/2019 Leg Reg Outline (Admin v)

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Admin OutlineBarronSpring 2007 4 of 90

I. THE CONSTITUTIONAL FRAMEWORK

A. THE PROBLEM OF DELEGATION What are the legal and constitutional limits of Congress to delegate legislative power?Genetically Modified Foods Hypo

Senator gains knowledge, moves forward with bill, thinks about delegationo Someone who has the time/resources/expertise to provide the rules/regso The Secretary of ______ shall issue appropriate regulations governing

the production of genetically modified rules to protect the pub interest.

Why Congress wont write:o Lack of Capacity(time/expertise)o Political Desires(insulation)

Why Senators likes this:o Pass the Buck(Gives mobility to Secretary)o

No bad language(appropriate / public interest)o Hedges his bets(defers the risk to the Secretary)

Who should he give power to:o POTUS?

BUT: Busy Poorly structured to handle this Dont want him to get credit Lack of expertise

o Actor slightly removed New agency?

May be big task Old agency? Easier Crowd them out of other stuff

But which agency?o FDA / Ag / FTC / HHS?o Theres some implicit assertion about what the problem is and how to

tackle it depending on who you delegate to

o Considerations: Different actors come in with different goals, beliefs, and priorities Expertise(may ignore things outside expertise) Which aspect of regulation matters most?

The choice ofwho is a choice ofmissionWhy might this be a Constitutional problem? Maybe promulgating regs is a legislative task

o All legislative powershall be vestedin a Congresso Implies within it not only power @ first, but also a principle of non-

delegation


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Cannot divest; vested implies permanence Maybe we read it in contrast to Art II

o The executive power shall be vested ina Presidento POTUS has executive so we cant give him legislative too

Counter: Maybe he is still capable ofreceiving legislative power(not vested in him at the beginning, but it can be received)

Two argumentso [Textual]Legislature starts with power and can then delegate it out

Necessary and Proper Clause(Art I, 8, Clause 18) To make all laws N&P for carrying into execution the foregoing

powers.

Seems to predict that there will be a department structureo [Semantic]Maybe whats being delegated is not actually legislative

power Whats being delegated is power to execute Congressional will

BUT there must be some limito

We have 3 branches for a reason(some non-delegation function exists)o The Non-Delegation Doctrine is a series of attempts to regulate this(we

want some freedom to involve others, but we need some constraint) In Practice: Mostly uphold delegations as lawful and legitimate

decisions

Early Theories

Contingency Theoryo Legislature sets out conditions under which, if they are met, POTUS can

do certain things

o Ex. Congress has established price control schedule, but doesnt apply

until POTUS sees some situation(POTUS assesses the world and

if he sees it, he pulls the trigger)

o Rationale: Simple Execution

Just making a factual judgment and then moving from there (Like a criminal casehave to determine whether to apply

criminal penalties depending on ID of if/when crime was

committed)

o Issues: How basic a determination is this?

If its an easy category to ID: non-delegation

If its broad: not sureo Cases:

Field v. Clark POTUS can make tariff determination based on if a foreign

country imposed a duty considered reciprocally unequal

Congress can enact legislation the effect of which dependson the Presidents determination of a named contingency


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(Dangerous if we give you a lot of both)o Rationale:

Puts some bounds on agencys discretion Is agency limited in any way? Reigns in policymaking of agency Makes agency accountable/subject to law

Makes sure that important and fundamental questions areactually reserved to Congress

Help agency do its job Help courts know when violated Help public know accountability

o Cases: Hampton v. US

President authorized by Tariff Act to change the originalstatutory on various goods whenever he finds that the

duties fixed by the Act do not measure up to the cost of

production in the US If Congress shall lay down an intelligible principle to

which the person or body authorized [to exercise the

delegation] is directed to conform OK

o Intelligible Principle in Practice Intelligible Principle seems like a thorough requirement BUT

only 2 cases have ever been killed by the SCOTUS on Delegation

Grounds:

Panama Refining Co.o Court invalidates provision in NIRA that authorized

the President to ban interstate shipment of oil

produced in violation of state lawo Congress has declared no policy, has established

no standard, has laid down no rule. There is no

requirement, no definition of circumstances and

conditions to which the transportation is to be

allowed or prohibited

Schecter Poultryo Allows President to authorize codes of fair

competition that were industry-sponsored;regulated every aspect of business

Lots of discretion Lots of breadth Little Process(all process was by the

industry!)

o Cardozo: (Big Nondelegation Fan) Delegation running riot Scope here is the whole economy Private actors given authority to develop

own codes


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(These decisions might have reflected skepticism about theNew Deal and the ambitious economic regulation taking

place) Since then, many statutes have been upheld even though theres no

intelligible principle

Strauss:o Court doesnt strike down anything on intelligibleprinciple grounds, BUT agency lawyers andlegislators feel some obligation to show the statute

is cabined/controlled/checked

All 3 of these are still in playo (Intelligible principle might be the easiest to fit, but you could probably

fulfill it by hitting the other ones also)

Modern Applications

Court upholds delegation, but shows some anxiety

Benzeneo Authority for agency to issue a standard:

3(8)OSHA should issue standard which requires practicesreasonably necessary or appropriate to provide safe place of

employment.

What should you issue 6(b)(5)OSHA should select standard that most adequately

ensures, to the extent feasible, on basis of evidence, that no

employee will suffer material impairment.

Guide you in the issuingo Questions about the Policymaking:

OSHA gets delegation Current: 10ppm is limit New: 1ppm

o Evidence that its a carcinogen and carcinogens arenever safe

Why not do 0ppm? Literally impossible to not produce benzene in this industry So expensive for you to get rid of it that it would be

tantamount to putting you out of business

What does to the extent feasible mean? To the extent scientifically possible, OR Cost-benefit analysis

o Allowed to regulate when cost of lives > cost ofregulating

(OSHA chose the first approach pro-regulatory)o More strict than a CBA would have been

Who does this apply to? Small # of people, but not gas stations OSHA has discretion


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The fact that the agency must choose between the 3standards shows that Congress has punted on the crucial

policy choice here we cannot allow that

o Difference btwn Stevens and Rehnquist: Stevens worried about breadth

Anxiety about agency running amok(wants to cabin) Solution: make up statute to rein them in

Rehnquist worried about discretion Wants Congress to make the choice Solution: forced Congress to come up with its own std

American Truckingo Clean Water Act authorizes EPA to regulate NAAQ emissions for ozone

to a level requisite to protect public health with an adequate margin ofsafety std goes from .09 to .08

Challenge: why not 0.07? Seems arbitrary Court has a few factors to look at (severity/certainty of

effect, size of population affected), but wheres theconstraint? How should we use those factors?

o Solution: The agency comes up with some standard to guide its discretion EPA comes up with its own standard In-house criteria and

people develop it

o DC Circuit Delegation problem arises because of unguided discretion in

choosing the level

Commitment up front(concern about arbitrariness andthe rule of law)

Dont want too much discretion Solves problem by saying to agency: ID clearlimits on your

authority.

Stevens inBenzene comes up with limit for them (Ct) Rehnquist inBenzene Congress must make the choice Here show how you plan to cabin yourself(remand to

agency)

o (Who cares who comes up with intelligibleprinciple as long as you can show you are using

one?) Appeal of Williams:

Expertise of agency Broader outlook(not just one case at hand) Transparency May be inappropriate for ct to be involved

Why we might prefer a court: Meaningful judicial review

o Want Intel Principle announced in advance; morepressure to stick with it


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Deal with it once and be done Unrealistic to think court will be out of picture if we leave

it to agency

Why leave it to actor who might be arbitrary/discretionaryo SCOTUS

Intelligible principle should be established by Congress the meaning of non-delegation doctrine is to require

Congress to lay out the fundamental constraints. BUT Scalia finds that Congress did establish one

Scalia doesnt say why requisite to the public healthshould satisfy any of our Constitutional concerns, but does

say, This is how weve done it.

American Trucking is a concession to reality and the status quo In every grant, theres discretion sometimes too much No ones really sure why the current state is Constitutional,

but 80 yrs of precedent upholding it, so well affirm

o Pragmatic approach recognizes the complexityof modern action

Not going to go crazy on words likeimminent or necessary

B. THE BIG PICTURE:IS THE ADMIN STATE CONSTITUTIONAL? Post-American Trucking, were pretty sure that a non-delegation challenge will fail,

so how are we going to legitimate broad delegations from Congress to agencies?

Strategies:o Creative statutory interpretation

Read into statute certain criteria Narrowly construe statutory grant

StevensinBenzeneo Demand agency explain itself

Come up with reasons why you did something DC Circuit inAT

Three Dimensions over which to decide whether we like this: Functionalism vs. Formalism

o Formalism Very tightly sealed boxes(Jud / Exec / Leg) Do very distinct thing and can only do those things

Textualist reading(3 branches with vesting clauseso Functionalism

Look at purposes given to each branch; understand that brancheswil run into each other

Powers are designed to give you the authority to do things(functions)

May run into other branches, but thats OK


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He doesnt dispute Lawsons account that Framers would muchprefer more separation, but feels that Lawson went wrong in notrealizing the Changing Event

New sort of Framers / New era of Constitutional politics Formalists would say there must be an actual amendment Ackerman wants to formalize this changing event hewould be angry too but he recognizes this as a sort of

amendment

o Ackerman says that change occurred thru a certain process; all 3 branchescoincided and the interpretation stuck for a while so it must have worked

Strauss(Functionalist and Originalist)o Thinks Separation of Powers should only apply at the apex

Always be POTUS / SCOTUS / Congress BUT below we can mix around

(Formalist at top / Functionalist at Bottom)o Believes this sort of blending is consistent with original understanding

Everyone always understood there was going to be substantialblending(his version of originalism)o Value in this:

Protection against tyranny Tyranny is concentration of an unchecked/all-powerful

group of actors

Strauss says the apex actors oversee and diminish the fearof unchecked power, but we always had in mind this

functionalist understanding with multiple overlaps and

many groups involved down below

Sabel & Dorfo Good govt practices that fit with our sense of whats good Critiques the current admin state not because its not faithful to

1789, but rather because its not working

o Premises 1. People are self-interested

This is good; system is designed for that 2. Deliberative practice of Democratic politics

Also good; system should promote this System should promote innovative

solutions/competition among actors on the one

hand, but also promote deliberation in allowing

people to debate on which are best practiceso They are speaking of a utopian / future world

Current admin state is unconstitutional! Doesnt fitwith current worlds conditions

Interest Group Politics + Public Goodo Why dont we have this world?

We had minimalist admin state pre-1932


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o Concern here is Encroachment Congress has encroached on the functions of the judiciary by

grabbing some of its constitutional power and giving it to the

executive

Why Concern? Article II vests judicial power in Art III judges and gives them special qualifications:

o Life Tenureo Salary Protectionso Advice & Consent(high-visibility apptmt)o Few of them

In the admin cases, the adjudicators are constituted differently and thus have lessindependence

o No life tenure(civil servants removable for good cause)o No final word(decisions are appealable to a politically-appointed

agency head who will often defer but)

oNot a generalist(may have expertise, but may come in with a certainhistory and worldview)

2 different types of concerns:o Fairness(DP)

I wont get a fair shake because this judge isnt as sufficientlyindependent as the Constitution desires

o Apolitical Aspect(Emasculating the Federal Judiciary) We want to maintain this structure where we have an apolitical

branch handling certain things

Concern that were losing this safeguard and movingtowards dangerous concentration of powers

Creating a parallel judiciary, chipping away at judicial power onearea at a time

Great temptation to just transfer power to adjudicatorswithin your own control

Use rosy rationales like efficiency and expertise The delegation should not undermine the Judicial BranchEvaluating the validity of these concerns in light of current doctrine Crowell v. Benson

o Facts Crowell is Deputy Commish on US Employment Comp

Commission(federal version of workmens compensation) Employee Knudsen brings claim to agency rather than straight tortclaim because agency thought to be more pro-worker

(case would have great political redistributiveconsequences because if agencies could do moreadjudicating, it would probably be better for those battling

corporations, etc. Justification for rule is efficiency and

consistency over time, but this is real concern)


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Crowell orders payment from Benson (employer) to Knudsen Employee then needs to get order from District Court to get the

funds entitled under the agency ruling

o Mechanics Question: Was Knudsen acting in employee capacity?

Knudsen says yes

Benson says outside the scope Commission

Will hear evidence that might not be allowed in an ArticleIII court(hearsay, foundation, etc.)

Crowell then makes judgment on whose factual story iscorrect

Art III Ct Review:

De novo review of law If there is a legal debate, you can overturn

Deference to agency on facts(weight of evidence) If the record doesnt show this fact, you canoverturn

BUT Agency administrator has some binding effecton the Art III ct

Benson claims Congress could not constitutionally vestfact-finding authority in an agency rather than in an

Article III Courto 2 Considerations

2. Review left to Art III Court (see Schorand Thomas)

1. Nature of the Right at Issue What is the nature of the right being adjudicated by

agency?

If Public Right no Article III concern If Private Right Art III concern

When you get over to the public side ofthe line, theres no review at all in Art III

court, but more you go toward a private

right, Art III Ct must be given say IN

THE REVIEW

Difference Public Right

Individual vs. Govt Private Right

Liability of one private person to anotherprivate person

Why the difference? Greater includes the lesser


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We conferred a benefit on you; youre notlosing anything when we regulate how thatbenefit is distributed

BUT this doesnt always work (there arelots of govt vs. you that dont fit this

framework) Taxation is treated as a non-public

right

Deportation proceedings Govt employment disputes

o (we cant say that the govt isconferring a benefit here by

taxing you, yet we allow it to

stay out of the Art III sphere)

Pre-Political Common Law Boundaries What is the thing the govt is conferring?

When can we say that govt has provided? Ifits a common law right, govt has

not provided

Difference Private rights = pre-existing Here = doesnt exist but forfederal

statute

Sovereign Immunity Govt could have prohibited many public-

rights cases to begin with under a sovereignimmunity rationale, so of course we have the

lesser right to limit what courts they can goin

History Weve had some non-Art III cts play a role

in the past wrt public rights

Application here: This is a private right, so there must be some

sort of Article III review entitled Fact/Law divide is not that troubling

because our system contemplated s a fair

amount of deference to non-Art III

factfinders anyway We use them in normal course of

events(juries)

But this isnt necessarily fair:o Juries are:

Disinterested Constitutionally

Guaranteed(a


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specific Const

exception to non-ArtIII factfinder)

o Agencies are: Interested / have

incentives Not mentioned in

Const

Adjunct Theory Agency can participate so long as its

playing an advisory role

Adjunct to the Court(not a threatto Art III ct but rather part of itsmission)

Theres a history of these sort ofadjuncts even with private rights so

long as the legal significance offactual determinations was left to Art

III ct

So even though this is a private right,well uphold power to adjudicate because

only an adjunct

Non-Art III only made initialdeterminations, so were fine

Northern Pipelineo (Limits Crowellto facts)

Formalistic opinion (Whites dissent decried constitutional Textualism as toosimplistic for modern admin state)

o SCOTUS invalidates bankruptcy judges (Art I judges) in 1980s: Large jd over a large # of common law claims not related to

specific forms of regulatory law is unconstitutional

Way too much authority + orders treated as final whengiven and sufficient to generate contempt

o Congress may not vest in non-Art III court the power to adjudicate, renderfinal judgment, and issue binding orders in a traditional contract actionarising under state law, without consent of the litigants, and subject only to

ordinary appellate review

Agencies cannot touch private rights Cant argue just adjunct, because they were doing it all ERISA Hypo

o Probably too big to grant Art I/II Cto Why problematic?

Broad jd of a lot of things not ordinarily under the agencys control CFTC v. Schor

o Facts


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Schor suing Conti (broker) under Commodity Exchange act to gethis money back that he lost(Im owed reparations by Conti

because he didnt live up to his obligations under CEA.)

Conti sues Schor in Art III ct claiming hes owed money under acontract claim

Schor tries to get Conti to remove his counterclaim back to CFTC(believes CFTC is more sympathetic to investors)

Schor then loses on the counterclaim, but disputes the power ofCFTC to hear the compulsory counterclaim in the first place

o Does the CFTC have jd over Contis compulsory counterclaim? The original claim by Schor arose under fed statute Contis counterclaim arose under state contract law

UnderNorthern Pipeline, we might think that thecounterclaim was not proper for non-Article III court

o Court held that non-Article III court could hear the state contractcounterclaim provided it passed a functionalist test

Factors

Extent to which essential attributes of judicial powerremain with Art III courts

Extent to which Non-Art III court exercises the range ofjd and powers normally vested only in Art III courts

Do non-Art III Courts mimic acts of Art III courts? Origins and importance of the right to be adjudicated

Public/Private Right Northern Pipeline this was a rigid

requirement(it was the lone factor and itwas bright-line)

UpholdsNP in saying that wholesalegrants of pendent jd might beproblematic, but distinguishes by

holding that the mere grant of

common law counterclaims is notfatal

Here just one of many factors Concerns that drove Congress to deviate from the

Constitution What was the motive?

Applied here: Essential attributes remain Art III cts still there if you want to trigger

Preserved for review in same way as Crowell Normal powers remain with Art III Ct

Counterclaims authorized by CFTC were minor partof judicial business(no cause for concern)

Public vs. Private (Ct admits it is a private right)


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But just one factor in a sea of 4 PLUS its a statecontract claim that we dont

normally think that an Art III judge will decide

anyway

Congress had proper motives

Inexpensive Efficiency Faster Waiver point(voluntary system)

o Big Picture: Does the delegation impair either:

An individuals interest in having a claim adjudicatedby an impartial Art III judge, OR

The structural interest in having an independentjudicial branch decide matters that have traditionally

fallen within core of Art III business?

(Check out Schorfactors to determine structuralimpairment)o Dissent:

Brennan/Marshall concerned about legitimacy of Art III courts;dont like jd-stripping because it places many individual claims injeopardy

Thomas v. Union-Carbideo Congress mandates arbitration under Federal Insecticide Act which

allowed EPA to use data submitted by one registrant when considering a

later registrant, but only upon payment of first registrant

The arbitration scheme was reviewable by an Art III court only forfraud or misconduct

More expanded definition of public rightnot just requiring govtas a partybut asking whether private right so closely integrated

into public regulatory scheme that can be handled by agency and

only limited judiciary

o Court accepts limited review Rationale:

Arbitration claim seen as pretty public once you push tothe public side of the line, you can be more lenient with

the type of review afforded (the dispute was actually between two private

parties, but court explains that the right claimedarose out of a complex federal regulatory scheme)

SUM Factors:

o Jd allowed(public/private) Bright-line rule fromNorthern Pipeline not accepted CFTCbalancing test


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Contemplated executioner is notthe President, but his obligation ismake sure they do so appropriately

o What are the laws? Federal Statutes Maybe the Constitution(but this would allow him to ignore

federal statutes if he thinks they are unconstitutional) Emergency / Protective Power

o General power in case of emergency to just do stuff to keep the unionalive

Keep the statutory and Constitutional framework availableo (Controversial)

Specific Powers

Appointmento (no mention of Removal Power)

Maybe its part of Executive Power generally

Maybe its part of apptmt powero (no mention of Supervisory Power)

Maybe its part of take care But seems to be more than take care theres some

policy component of HOW one wants the law to be taken

care of

Maybe its part of Executive Power generally Commander-in-Chief Power Veto

o Only recourse against statutes POTUS doesnt like Opinions Clause(Art II, 2, Cl. 1)

oPresident can ask opinions of the Principal officer in each of the executivedepartments

o Independence? The fact that he has to ask indicates that under an alternative

scenario, the agency head might have been able to deny him

You can just do it for them(you get to see the report and decidewhat you like, but fair bit of separation/independence built in)

o Non-independence? Holds the POTUS accountable

Maybe we understand the agencies to be aligned with thePresident and we want the President to be responaible for

decision of the Executive Branch(want him to accountfor actions of departments, so we make sure theyre written

down Recommendations Clause(Art II, 3)

o POTUS may recommend legislationas he shall judge necessary andexpedient

o (But why spell this out? Why think POTUS couldnt do this?) Separation of Powers / Tyranny


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POTUS at Max Power(personification of federalsovereignty)

If he cant act, its due to some Constitutional provisionsuch as the Bill of Rights

o Congress said I can do it Zone of Twilight(absence of)

Congress has been silent BUT POTUS not powerless because POTUS comes to

table with some power already(Jackson has broad view

of POTUS power)

o Congress didnt say anything, but I have someinherent power to do so.

Incompatible with Congressional act Lowest Ebb Congress has affirmatively prohibited Presidential action POTUS may be able to disregard prohibition, but only if

hes acting within inherent and exclusive power of his owno Congress said I couldnt, but I have my own

Constitutional power to override that.

SUM Need to be concerned with Constitutional questions

o Does this fall within one of the Presidents general or specific powers? (would prefer if it fell in specific because those are concrete)

BUT also should be concerned with prior statutory authorizationo Supportive/authorizedo Silento Prohibited

(can sometimes be hard to tell among the three)

D2. APPOINTMENT POWER Lowest ebb cases Congress saying you have to do it in some way, but POTUS

claiming const authority to do it another way

Purposes Control

o POTUS can control top people since he picks Oversight

o POTUS not able to go it alone Efficiency

o POTUS/Senate dont have to deal with all the people Accountability

o Visibility for the big appointments Check on Congressional Patronage

o Congress can create, but cant fill up positions with cronies


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o Extensive rulemaking and adjudicative powerso Direct & Wideranging enforcement power

Adj Render advisory opinions without

supervision

Opinion likely to be relied upon bycandidates Enforcement

Can sue the candidates in ct toenforce the statute

Whats a Principal Officer?o If Principal, must have POTUS with A&C of Senateo TEST:

Nature and scope of duties/jd Limits duties Narrow jd Tenure ends when duties discharged

Control/oversight Close supervision by a principal officer

Removable at will Subject to removal at will by a principal officer

o Morrison v. Olsen POTUS w/A&C framework is problematic in IC Statute

Not going to be very independent if nominated by POTUS POTUS has incentive to delay/nominate unconfirmable

people

(BUT some political checkunder public pressure to namesomeone to give legitimacy)

Congresss Solution: Appt Independent Counsel via Special Division of DC Cir.

Defending the scheme: Congress cant say hes not an officer because its Office

of the Independent Counsel clearly reached a level of

Constitutional significance

o Created pursuant to statuteo Receives emoluments

Try to say IC is inferioro Reports to superior

BUT dont all report to POTUS? Looking for some supervisor below POTUS

o Limited Duties Investigate and pursue indictment

o Limited Jurisdiction One case

o Can be removed by AGo Limited Tenure


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When case is over, youre done BUT sort of unlimited(as long as it takes

for case to end)

Counter: Why Principal?o Significant authority(can bring indictment!)o Very high profile Court says inferior

Weak Arguments:o Supposed to follow DOJ policies as much as

possible BUT no hard limits/constraints

o AG can fire you BUT only for good cause (minimal

control / not exactly a sword)

What gets us by?o Analogies of past decisions

We look at other actors who we have noproblem with This is necessarily a comparative project:

what do you look like in comparison to

others who place on this spectrum?

o Edmond v. US Secretary of Transportation has power to name judges on

intermediate coast guard appeals courts

If inferior officer, scheme is justified because Secretaryis Head of Department authorized to make apptmt

Are they inferior? Arguing NO:

o Broader jd than single caseo Long tenure(not case-dependent)o Duty to decide cases

But court says they ARE subordinateo Can be fired with or without cause for any reason

(BUT cant be fired for specific cases; couldbe fired based on pattern of cases, so hes

arguing independence on the individual caselevel, but not overall independence in the

job)

o Supervision by someone other than the President Cant do anything without a higher entityultimately concurring the judgment

Higher body that oversees the individualrulings of Art II judges(cant issue final

binding judgment some other ExecutiveBranch court has to review and supervise

their decision)


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At least we know that Art III courts wereonce nominated by the President

Scalia Dissent: Would have done reverse:

o Court of Law is only Art III courto

Department is a free-standing, self-containedentity in the Executive Branch whose head is

removable by the President exclusively Tax Ct

would qualify here

Why care? Appointment power is an important way of structuring the control relationships in the

bureaucracy

o How they starto Incentives to remove (hinges on how you can appoint replacements)

Rumsfeld

Wouldnt fire because would have to re-appoint someonenew subject to A&C in Senate

US Attorneys POTUS has no qualms about firing US Attorneys because

he can easily fill the seats back up due to Patriot Act

o If apptmt were via A&C or thru Courts of Law, itwould have been a slower and more doubtful

process, so we would see less firing on the front end

Should US Attorneys be considered inferior officers?o Factors:

Responsibilities/Duties of US Attorney Who do they report to? Whos above them? Whats their tenure?

o POTUS: Wants them to be either inferior officers

(POTUS can appt alone), OR Not officers at all(employee)

Why would Senate do this?o Give disciplinary control to POTUS to help win the

War on Terror(control and influence execution ofthe laws)

Problematic: Congress giving up control over war Politicizing judicial business

o Efficiency Congress has more important thingsto worry about in face of 9/11 and POTUS needs to

get these things through

If we make the appointment process moreefficient, we need to think about the

consequences it will have on removal


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SUMo Appointment affects Removalo Removal affects Controlo Control = Power

D3. REMOVAL POWER

Constitutional Source of Removal Power

Maybe Take Care Probably Vesting Clause Maybe Appointment Power

o Taft says the Vesting Clause is king Appointment clause actually limits executive power because under

the vesting clause, POTUS would have unlimitedpower of

appointment, BUT appointment clause says A&C Since there is no Removal Clause, the Removal Power remains

subject to the Vesting Clause alone Executive has free reign

Myers v. United States

Statute requires Senate approval for POTUS to remove Postmaster apptd with A&C Congress cannot interfere with Presidents removal of an executive officer whom

the President has appointed with Senates A&Co (later limited to purely executive)o 3 principles ofMyers

POTUS has executive power to remove (within vesting clause) For inferior officers, that power can be vested in others (heads of departments and/or courts of law)

Congress cant assign to itself the power to remove inferior orprincipal officer

No criteria for removal either Executive Officers cannot be insulated from Presidents power to

remove save for 2 exceptions:

Officers with zero judgment or no/narrow discretiontasks(dont need to give POTUS power overthem)

Participants in adjudicatory settingo For inferior officers, you can vest removal power one level down from the

President (Head of Department) This might actually be worse because President might be pulling

the strings, but wouldnt be held accountable for the removal

Humphreys Executor

Statute restricts POTUS ability to remove FTC member appointed with A&C Held:

o If its a purely executive officer cant be touched


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Only free from removal restrictions if purely executive officer Distinguished fromMyers

o If powers are quasi-legislative or quasi-judicial, then Congresscan place limits

(good cause, negligence, malfeasance, etc.)Weiner

War Claims Commission Held:

o Quasi-adjudicative can be insulated from POTUS removalo Because its quasi-adjudicative, its called a Commission and theres a

set term (5 yrs), the Court reads in an implied removal limitation for good

cause only (statute had been silent on whether you could be removed prior to

expiration of the 5yr term)

Morrison v. Olson Independent Counsel TEST:

o Whether the removal limitation impedes the Presidents ability tocarry out his Constitutionally assigned functions

Do you really have a President still? Can POTUS still make thegovt work given these restrictions?

Like CFTC v. Schor want to look at the general impacton separation of powers that this type of rule has

o Balancing: Presidents control

Extent of the impediment Functions being performed by the officero (Less deferential to POTUS thanMyers/Humphreys)

Application to IC:o Does NOT impede constitutionally assigned functions(wouldnt stop

him from being President)

o Discrete incursion Limited jd No large swath of authority has been taken away We can still make sure that his broad policies can/will be

implemented

oScalia Dissent: Formalist

If its executive function, POTUS must control Shouldnt be asking, How much is too much?

Functionalist Even under the impedes test, this qualifies!

o Time/distraction/need to defend against ICo Amt of public support up in the air


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o Now Congress has the incentive to make executive agencies independentso that they can limit the removal of the executive officer

If they make it independent, its less likely that lack of removalwill impede your constitutionally assigned function

SUM Focus on how the restrictions would limit the Presidents ability to do what

Presidents doo When you think of the President, whats he supposed to be doing?

If he can still do that, youre fine If hes supposed to have authority over that, youre in trouble

(Ace in hole: broad authority to control policy under hisadministration)

o Ex.IRS

D4. SUPERVISORY POWER Not as clear as appointment and removal, but not litigated as much Strategy:

o Map on to Youngstown frameworko Analogize to removal cases/doctrine

Not sure what we mean by supervision? Notice(tell him whats going on) Direction(tell them what to do) Clear what they want to do Substitute(do it for them)How can POTUS Pressure agency decisionmaking? Speaking to the public

o Agency can gauge rxno Puts it on the agendao Disciplinary effect of making priorities known

Proposes a budgeto Control resources

Reorganize Proposalo Move agencys authority/supervisors

Ask

o Request from POTUSo (Agency head might not prefer this because he may have his own priorities

and would prefer to be ordered by higher-up better cover)

Tell/Directo Executive Order(though drastic step for POTUS)

Processes or Reversing


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o Supervising their work(go back and do the Intel report again and getthe right answer)

Substituteo Do it for them

Summary

o Speech = Weakest Do it for you = Strongesto In between: many things, but were concerned with directing and

supervising Directing: I wont issue rule X myself, but you should issue it Supervising: I wont do it myself, but you better get to Rule X or

Im just going to have you do it again

o Speech is clearly legal; Substitution is not Since POTUS cannot substitute, hell either tell you what to do or

supervise you and hope to have influence

Telling is better than substituting, because at least the agencystill has to actually do it

AIDS Pamphlet OLC says that Congressional limitation on AIDS Pamphlet interferes with the

Presidents authority to supervise agencies

o Statute explicitly says CDC has it on its own w/o clearance Issues:

o What is the source of POTUS authority to review?o Is it permissible for Congress to limit his review in this way?

Mapping this onto Youngstown:o Not Category I

Congress hasnt authorized POTUS to review the pamphlet If he wants to get involved, hell have to find a way with own

inherent power

o So its either Category II or III without necessary clearance of the content by any official,

organization, or office>

Seems that POTUS is not barred from seeing it BUT legislative history shows that the goal was to avoid

meddling by the Agency and delay

Category II Argument Claim ambiguity in the statute(clearance or official,

organization, or office)o POTUS has authority in this arena under Art IIo We should not lightly intrude on Presidents

authority and say that Congress wanted tooverpower him absent a clear directive

Category III Argument Claim that POTUS has Constitutional authority in this

arena that cannot be overrules by Congress via statute


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Congress can spur POTUS attention to troubled agencyo Problems:

Not binding unless some statutory backdrop Can be confusing/hard for Congress to really grasp the issues

The Road to Chadha andBowshar Congress has all these statutory and non-statutory tools, but:

o Informal tools non-binding / no guaranteeso Statutory authority difficult to pass

So Congress looking for something more INS v. Chadha

o Legislative Veto is unconstitutionalo Apparatus

INS initiated deportation proceeding Non-Art III Ct justified under public right (between

govt and individual) and withdrawal of privileges

AG has power to suspend deportation(exercised here) We like this because it gets Executives involved to applyCongressional standard

On the other hand, it gives discretion and Congress doesntlike that

Congress puts in mechanism to restrict AG choice via a one-houselegislative veto

o Why use legislative veto? Easier to mobilize than restricting via normal statutory-making

authority Only need to mobilize one house Dont need POTUS approval

Congress doesnt need to get into details up front making abroad delegation up front

BUT protected on the back end because it has say Incentive for Congress to delegate on the front end

because it retains some say on the back endo Burger: (Majority)

Bicameralism and Presentment(Art I, 7) Youve altered legal rights must use proper procedures

Counter: Change the baseline! He never had the right to stay

without being subject to Congressional control had to go

o AG had right to let him stay, but AGs power wasalways subject to Congressional oversight

Re-counter: We dont see it that way (some shift taking place) The discretionary decision changes status of person; its

like a private bill, but just has a different form

Problem:


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Would receive info from OMB/CBO to help decide howmuch to cut, when/if to cut, what tot cut

CG would then set forth what to cut Issues report that POTUS must followsequestration order

(POTUS has no discretion)o

Majority: CG is a legislative officer and therefore unconstitutional to give

him executive powers like this

Acts that bind the President Real-world financial effects of his decision

Removability because Congress had retained power to removethe CG by joint resolution, he may not be entrusted with executivepower

(Court might have just citedMyers)o If hes performing executive function, then

Congress cant take for itself the power to remove

oCongress limits removal (malfeasance, negligence,inefficiency)

(This is OK underHumphreysbecause hes not a purelyexecutive officer)

o Performing a quasi-legislative function(generalrules and priorities for budget; not just

implementing rules laid down by someone else orprosecuting)

o Stevens: (Concurrence) Did not focus on unconstitutionality of removal provisions Focused on Presentment Clause:

Congress may not exercise its fundamental power toformulate national policy by delegating that power to one

of its two House (Chadha), to a legislative committee, or to

an individual agent of Congress.

CG performing a legislative functiono Has to go thru legislative processeso Cant delegate the legislative power to this CG for

the sake of avoiding the Art I, 7 requirement of

bicameralism and presentment

CG was Congresss guyo Agency requires that the CG have a close

relationship with Congress and that is who the CG

is dedicated to

o Cannot delegate to your own teamo Congress didnt want OMB to always win, so they

create this with 2 possible scenarios: Want a homer(want CBO to win

everytime)


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Want a neutral umpire to at least decidebetween CBO/OMB

How might we know in the future who meets Stevenss test? Cant give to someone on your own team Who are they understood to be answerable to?

Normal patterns of interaction? Friendly to Congress? Hostile to agencies?

o Stevens doesnt want to focus on removalo He cares about the practical/functional relationships

rather than formal structures of supervision

Majority: Formalism (likeMyers orNorthern Pipeline)

Stevens: Functionalism (likeMorrison or Schor)

Clinton v. City of New Yorko Line Item Vetoo

Gives POTUS ability to cancel spending items and limited tax benefitsif he finds certain conditions met within 5 days

Congress can then re-pass if they wisho Stevens: (Majority)

Formalist Unconstitutional In order to enact a law, you must use certain provisions This is like Amend/Repeal a bill and that can only be done

via Art I, 7 Stevens is also a bit functionalist

Points out that the decision must be made within 5 dayso This is not enough time for conditions to changeo

Its not a delegation where we give you the powerto implement and carry forth a law in the future

based on some set of changed circumstances(just

retooling the law within 5 days) FUNCTIONALLY, this is a veto and not a delegation

o If there were 6 months lag time, Stevens wouldaccept the framework as valid delegation but

theres no down the road here

o Breyer: (Dissent) Pure Functionalism(like White in Chadha)

Perfectly legitimate way to go about giving POTUS powerto control laws and spending Massive bureaucracy and cant do it without separatelyenrolled bills

Breyer also a little formalist POTUS is just doing what was delegated to him by

Congress

o Performing an Executive function by decidingwhich laws to implement and how


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II. THE ADMINISTRATIVE PROCEDURE ACT

A. THE BASICS:THE STRUCTURE OF THE APA AND INTERPRETIVE METHODS

APA 2nd big framework that controls what agencies can do

o Not Constitutonal, but Statutory 2 Big things

o Established procedures/modes by which agencies do thingso Sets terms for judicial review of agency axn

Every agency exists pursuant to an organic statuteo If Congress wants, it can exempt any agency from the APA organic statute

supersedes the APA because it is specific to the agency

Basics

Formal Informal

Rulemaking

statement of general or

particular applicability

Future effect

(Ratemaking)

556 / 557 More trial-like (on the record)

o Delayo Noticeo Hearngo Publication

553 Notice that youre making

a rule

Comment ability Purpose must be stated(Start hereif it says on-the-record

then kicked into 556/557)

Adjudication

formulation of an

order

(Licensing)

556 / 557 Hearing Intermediate & Final

Decision

554 Separation of Functions(Start at 554if 554, also kicked

into 556/57 which specify

procedures it says on-the-recordthen kicked into 556/557)

(not sure if it exists)

555(e) perhaps(doesnt saymuch other than that you have

to announce the result)

Informal / Formal DistinctionWhy care? PRO-Formality


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o Partiess who are wary of agency have an interest in pushingtowardformality because its not as easy for the agency to go wayward if its

all on the record 556/57 is more like a full-on trial

Time-consuming Record Easier for court to extensively review CON-Formality

o If you like what the agency is going to do, want to keep it informaland give them maximum discretion

o (The agency itself is included in this category) If we make it very formal and court-like, we reign in the

bureaucracy

If its informal, the more we empower the bureaucracy to act on itsown subject to minor checks

The Fight over 553o We rarely get to 556/557; most of the action is now concerned with what

553 actually requires Agencies and parties that support agency action:

Stepped down version of 553 (or fit an exception) Anti-agency people:

Bulk up 553 Say that N&C are actually very strict (cut down exceptions)

RM vs. Adj How much process are you entitled to?

o Adjudication more process and opportunity to be heardo Rulemaking generality

Threshold legal questions:o Constitutional notions of DP

May fare better in adjudication context than RMo Organic Statute of the Agency

May construe the organic statute differently depending on whetherwere adjudicating or rulemaking

o APA Instinct is that 553 is informal / 554 is more formal

Does Due Process Clause Foreclose certain types? Londoner

o Paving district with special assessment on street abutterso Citizens given written opportunity for objection but want to be heardorally:

Can say more Can cross-examine Decisionmaker will be confronted(like D at trial) Legitimacy-enhancing function for the person(say their peace)

o Court agrees Get adjudicatory hearing


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Jackson needs to get from the fact that these arepurposes of the APA to why they should matter forour interpretation of 554

APA doesnt explicitly say you cantcombine functions under 554

Jackson is fleshing out 554 and readingit in light of these purposes

We should construe every of theAPA to address the purposes and

evils that the APA was aimed at:

o Promote uniformity andindependent functions

APA represented a long period ofstudy and strife; it settles long-

continued and hard-fought

contentions, and enacts a formula

upon which opposing and socialforces have come to rest.

o If in doubt, resolve doubt infavor of the APA

So when should 554 apply? When on the record hearing reqd by statute When hearing is reqd by Constitution

No reason why Congress would requireagency to be scrupulous for statute hearings,

but LESS scrupulous for hearings required

by the Constitution

The Constitution is a greaterauthority so we should read the AP

to apply here also (Alt: maybe the statute presupposed

and incorporated the pre-existing

Constitutional requirement that we

have a hearing) Why Jackson might have been wrong?

Imposes cumbersome requirements on agencies Maybe Congress consciously wrote the statute so that not

every context/case would get the full treatment

Maybe sometimes we would prefer a high level ofexecutive discretion, so we only require 554 when

explicitly requested in the statute

o Greenwich Colliers Labor Department adjudication has dispute over burden of proof

in 556 of APA

Moving party has burden of proof Could mean burden of production or persuasion


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BUT oftentimes there is a legislative compromisewhere certain words are used if go against a purpose

(therefore, if we do a purposive reading, wevegone againstthe compromise)

B. THE REQUIREMENT (OR NOT) OF FORMAL PROCEEDINGS

Rulemaking Strong presumption that it will be informal RM unless organic statute says so

o Only get to 556/557 if the organic statute tells you its on the record orthe substance of the hearing leads us that way

Florida East Coast Railwayo ICC has engaged in ratemaking which is explicitly mentioned in the

category of rulemaking

o Challengers claim they were not given all the process that was entitled toin RM Wanted a hearing on the record (oral) under 556/557, but only

given a written hearing

o 553(c) when rules are required by statute to be made on the record after

opportunity for an agency hearing, 556 and 557 apply.

o Rehnquist: (Majority) Will only trigger APA formality when the statute in question

contains the precise language or other clear expression of

congressional intent to require formal procedures

Bias against APA formality; presumption against statutesbeing interpreted to require Formal RM Difference between hearing and hearing on the record

If organic statute only has hearing, its not clear that556/557 should be invoked

Rehnquist not saying that on the record is a Term of Artor Magic Words

556/557 might be triggered in absence of theseexact words; 553 is default in absence of words, but

not automatic BUT if Congress wanted Formal RM, they have to

say so somehow (This is inconsistent with WYS)

Didnt say on the record there, but we use formal Why?

RM vs. Adj(no background Due Process notionthat you need special protections in the Rulemaking

realm; Adj has some Constitutional backdrop) Rationale:


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o Notice or proposed ruleo Opportunity to Comment on propose ruleo General and concise statement of basis & purpose for the rule

Analysiso Better than we get from Congress when legislatingo

But worse than we get from 556/557 No separation of functions No cross examination Record need not relate to comments

Vermont Yankee What can you do over and above the requirements of 553?

o Illegitimate to cite APA (federal common law) as a source of authorityfor reading additional requirements into 553

Rehnquist objects to argument that the APA purpose couldprovide additional protections

Only procedures you can impose are the 553 mandates

o OK to use Due Process Make it a Constitutional case BUT this is difficult afterBi-Metallic

o OK to look at past agency practice Difficult

o OK to use organic statute Hybrid Rulemaking

In some cases, the organic statute will call for hybridrulemaking in which the organic statute requirements willbe more than 553, but less then 556/557

o 553 is floor, not ceiling but you need authorityto do this(cant say APA purpose)

o Rationale: Unpredictability If we do it other way, we push to 556/557 automatically

Agencies will be concerned that courts will always read inabackground purpose, so the agency will always be

forced to the formal posture as an insurance policy

Rehnquist might just prefer agency informality (he wrote FL East Coast) Same rationales as above with Chem Waste / Dom Energy:

o Judicial preference for informality(deference if away to get there)

Wants to make it easier for agencies to worko Jurisprudential Philsophy

Antagonism toward judicial activism andfreedom to make up new rules andprocedures

o Outcome-driven Judging


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Ideological position on who will benefitfrom informality(Belief that deference toagencies will lead to pro-industry results)

Capture of agencies Counter: (Claiming that agencies should be able to add on)

We should be looking at the APA holistically andproviding a full, fair, and consistent process look at the

broad animating features

o The uniformity that Jackson wants APA toaccomplish will NOT be accomplished of the APA

stuck at such a low floor and agencies can do as it

pleases Retort:

(Rehnquist enjoys that WYSquote about how the APArepresented a long period of study and strife)

Rehnquist emphasizes that APA was a compromisebetween those who wanted more and less process

o Vermont Yankee vs. WYS Rehnquist actually being kind of purposive

Jackson seems fearful of agencies in WYSso tries to cabinthem in with discussion of uniformity/fairness

Rehnquist not as concerned about agencies(nothing inhis opinion is inconsistent with Jackson)

We wonder if Rehnquist would have had a different attitude inthe adjudication context

Fleshing out the 553 Requirements

If we cant use general APA purposes to bulk up the agencys informal rulemakingrequirements, we turn to the explicit mandates and try to make those more extensive

o Vermont Yankeesays we cant add additional procedures to the APAunder 553, so it gives courts a lot of incentive to read notice and

comment to be a meaningful thing you cant smuggle theseprocedural things into other parts

Noticeo Let the public know what youre going afterby disclosing either:

The terms or substance of proposed rule Basically laying out the rulespecific

Description of subjects and issues involved

More generalo Why do one or the other?

Might know where you want to end up and choose an optimalpath to get there

Might not want to get anything through, so throw out either avague but general rule OR an insane but specific rule

Might truly want to get commentaryo NRDC v. EPA(Alaska Timber)


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EPA starts rulemaking for general transport permits for logging Proposed rulemaking reference 1-acre zone of deposit,

claiming they are tracking Alaskan agency

Final rule says no defined limit but you could getinvestigated at 1 mile

Issue: Given what notice of proposed rulemaking was and givenwhat final rule was, did the agency provide proper notice NO

TEST: Logical outgrowth of noticed rule? Surprise given what earlier rule said? Could this have arisen thru an ordinary comment

process?o Would you have had any sense of the comments

you should have made given the notice and the rule

that came out?

The parties couldnt have predicted this change given the noticethat was given The change was too dramatic large weakening of the

standard to go from one acre to no limit Easy Counter:

Maybe you didnt do enough with the notice you got Paradox:

Maybe less specificity would be more notice Counter:

o logical outgrowth test Comment

o Nova Scotia Agency passes heating temperature for smoking fish Nova Scotia fails to comply and agency brings action

Why wouldnt Nova Scotia challenge up front?o Cooling off period / prove your safetyo PR effect of not being the moving party

Nova Scotia has 2 defenses: Substantive

o Beyond the statutory authority of the agency to passa law like this(smoked whitefish not anadulterated food)

o No substantive basis for decision in the record Procedural

o Inadequate statement of basis of purpose Never discussed commercial feasibility of

rule or fish-by-fish

Why do want this? Discipline the agency Inform the parties


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Once youre in that category, what is the standard of theAPA that must be met?

o Must considerthe comment Address them directly to make sure the

comment is read

o

Rationale: 553 entitles you to notice of proposed

rulemaking upon which you can comment,

but if your comments are not read, thats nota meaningful opportunity to comment

o Courts prefer to find a comment violation ratherthan a notice violation because its easier tocorrect:

Put stuff out there and allow another roundof comment

The court might have found a substantive problem herethatthe decision was not well-defended with reasoned articulationbut Court prefers procedural grounds

This is no way to conduct a RM process Process/Procedure are what courts are good at!

o Do we likeNova Scotia? Tough to reconcile the courts reading of 553 with the true

meaning of notice and comment

They want to allow comment on something more thanjust notice of proposed rulemaking

We might prefer the VYapproach of rejecting additionalprocedures:

Expertise of the agency should prevail Just asking for junk science by industry-approved groups

(bought-and-paid for) to help take down agencysmethodology

Counter:o Agency subject to captureo Might be better off hearing outsiders regardless of

politicization

SUMo Nova Scotia is a basic turn in the fight between formality and informality

FL East Coast + Chem Waste/Dominion Energy Push out of 556/557 Push into informal boxes

Vermont Yankee Once youre in the informal box, judges cant add based on

some notion of common law and purpose

Pension Benefit Guaranty Corp


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Like VYfor informal adjudication(courts cannot imposeprocedural requirements above and beyond those of the

APA)

BUT maybe we may expect more procedures in theadjudication sense

BUTNova Scotia Bulking 553 back up

o Notice could mean a loto Comment could meant a loto Statement of purpose could mean a lot

o Result is that agencies now have an incentive to get out ofNova ScotiaExemptions from 553 AsNova Scotia makes 553 more rigorous, agencies have an incentive to get out Areas of exception:

o Military Ruleso Rules of Procedure / Organizationo Good Cause Rules(in an emergency, some reason to make rules

quickly and get them out)

o Interpretive Rules and General Policy Statements Rules about Rules / Give interpretation to pre-existing substantive

rule Analog to delegation to agency in the 1st place

Congressional delegation: Congress doesnt want to makedecision at time 1, so they defer and let agency work it out

over time with less formal process

Here: Agency has established a general rule (like Congressdeciding what to do) and now wed like a dumbed-downprocess to fill in the details with little burden

Interpretive Ruleso New vs. Pre-existing Obligation

If rule was fairly encompassed within an existing legal duty andwere simply clarifying that duty now via interpretation

We only require process once: If you promulgated initial rule with N&C, we wont require

process for 2nd

rule if interpretation was fairly

encompassed

o ATA v. FAA FAA organic statute says it must establish rest times to the peoplewho fly airplanes; FAA promulgates rule that says flight

schedule

On surface, this gives airline some leeway since scheduleddoes not equal actual events

Industrywrites to FAA to ask what flight schedule means; FAAsays actual events and publishes that in Federal Register


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Indsutry sues to challenge this agency action for not following553 guidelines(no notice and comment)

Held: Interpretive Rule(notice and comment not needed

Why this might be wrong: Changes the substance of prior agency interpretation NEW obligation

o The new interpretation is not fairly encompassedby any preexisting legal duty

Why this might be right: Preexisting Duty/Obligation

o If you had a preexisting legal duty, then youvealready had the opportunity for notice & comment

during the prior rulemaking that created the

underlying legal duty imposed Only get one shot at the apple

o We could have enforced against you anywaybased on the initial rule alone dont have togive you the benefit of a whole new round this

time

Interpretation Onlyo Were merely helping you out by telling you how a

pre-existing rule is going to be enforced(we

didnt have to do this, so cant get penalized for the

way weve done it)

o Counter: Maybe this isnt actually helping us out If court is going to defer to interpretation,then maybe we want more process Encourages agency to promulgate rules in

the form of regulatory mush

Incentive to be vague when thereaprocess requirement because later on

there wont be process requirementwhen you interpret the vagueness

BUT if its that mushy, then therereally is no pre-existing duty and

therefore the interpretation provides

the first sign of duty, so should gothru notice and comment

o Re-Counter: We want to encourage them to issue this

clarifying language, so make it as easy as

possible Solution:

Tighten the vagueness standard at Time 0


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o As long as the 1strule is no so vague that theres aDue Process or 706 reviewability problem forvagueness, the 2nd rule is to be considered a valid

interpretation and not a new substantive rule

o If the 1st rule is not so vague that it could beenforced in its own right, then the subsequentinterpretation is OK absent notice & comment

Substantive changes of prior agency interpretations: Hypo:

o First interpret rule to mean on the groundo Then change mind 6 months later and do published

time Problematic New Obligation

Amending a hard-and-fast obligationthats already in place (reliance)

When agency changes its interpretation, Notice &Comment are required

o DC Circuit: change in interpretation triggers 553o Other circuits: No notice & comment if:

Change was fairly encompassed No Unfair Surprise No change in rule, just meaning

General Policy Statementso Difference between binding and guiding (tentatively stating approach) o GE

Statute says you cant release PCB unless you can show that doingso will not result in harm

EPA puts out bulletin that says if you do it one of these 85ways, youll get a permit (safe harbor) and if you do itanother way, you mightget a permit

If you do it one of the other 85 ways, you should applyeither of 2 standards and if you meet one of them, wellgive you a permit

GE brings pre-enforcement review claiming that this guidancebulletin had to be issued with N&C

Issue: Statement of Purpose or Legislative Rule?

o Difference between: Its final, were committed (if you do X,then well do Y automatically) Well, this is our basic framework.

o If its final, we want N&C Agency shouldnt come to rest before

everyone has had the opportunity tocomment and participate


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D. THE CHOICE BETWEEN RULEMAKING AND ADJUDICATION InLonder / Bi-Metallic, we asked whether the DP Clause foreclosed a choice

o NOW: Does administrative law foreclose your choice? When APA doesnt mandate between RM or Adjudication, what might constrain

ability to choose:o Statutory directive

Organic Statuteo APA

Ratemaking = RM Licensing = Adj

o DP Concerns(subtle) Londoner/Bi-Metallic

o Developed culture over time FTCrules NLRBadjudication

o REALITY: Empowered to choose In the absence of any clear statutory directive, there is

nothing that limits the choice

Big thumb on the scale in favor of deference Factors

o Efficiency RM clears all cases at once BUT N&C could take a while(RM is slow)

o Quality Might be better with N&C (public and visible) BUT might make it more bias by subjecting to political pressure +Risk of Capture

o Fairness RM would encompasses more cases and scenarios(if people will

be affected by decision, maybe they should be able to weigh in)

BUT unfair to bog down this one guys case with outsideinformation

o Agencys own political interests If they keep to adjudication, they keep it quiet and retain power

and control

If they do RM, they make a bigger deal out of it (and agency), butrisk interference

WH may recognize this is important(PR/politics) Adjudications are hidden/limited/quiet

o Judicial Review May be different if Adj than RM

Retroactivity Concern:o If we promulgate a rule here, should this fall backand apply in this

case?


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NO argument: Unfair to promulgate new rule and hold parties in this

case to it YES argument:

Power to enforce in this manner was always in the agencyscontrol; its not a new rule, just an enforcementinterpretation of an existing rule

Chenery Break up of utility holding companiesfair and equitable

o Voluntary reorganizations must be approved by SEC, but well give youan on-the-record hearing before you get denied

Chenery Io Managers of old company buying into new companyo SEC says its not fair and equitable, asserting that common law

fiduciary duty prohibits old managers from swooping in to buy the new

companyo Court:

Agencys decision only be upheld on the basis the agency gave forthe decision

Not true of courts(appeal can be upheld on new grounds) Not true of Congress(can uphold the constitutionality of

a law even if not thought of)

Rationale: Want agency to express its policy expertise

o Its why we created the agency in the 1st placeo Failure to give proper reasons cant be made up by

anyone else Bias against agencies

o Discomfort with their place to begin with, so if youdont put it just right, try again until we like it

Chenery IIo Agency confronted with new reorganization plan and rejects it again

Bad idea: conflicts of interest + bias in reorganizationo Chenerys argument:

Chenery concedes that the SEC could issue a rule that wouldprohibit old managers from buying the stock of new company

Chenery also concedes that you can pass on a voluntaryreorganization plan in an adjudication

Chenery disputes the retroactivity because done in Adj You could have announced rule in advance and applied it to

subsequent events, BUT having not promulgated a rule,

you cant now put one in place and apply it back to us!

o Fair notice argument: You cant do this sort of rulein adjudication

o Court affirms the denial


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BUT the emphasis ofChenery andBell is that the agencyhas a ton of discretion to decide

o Under APA 551, a rule must be of future effect Court holds thatadjudications can pronounce new rule but apply backward

By definition rule must be of future effect

BUT whats being promulgated in adjudications is NOT a rule, buta policy or precedent

Well let the agency decide which vehicle it prefers


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III. THE SCOPE OF JUDICIAL REVIEW

First, survive Constitutional review(does Constitution give you power to do this?) Second, follow all the proper procedures Third, now that they have their rule, well review for substance of the product

A. INTRO

Why have review? Constitutionally

o Due Processo Constitution may assume/demand some review to meet our nondelegation

canons

Crowell v. Bensonlegal question must be left to courts

Statutorilyo APA

706(2) The court shall hold unlawful and set aside agency action,

findings, and conclusions found to be:

o arbitrary and capriciouso contrary to Constitutional righto in excess of statutory jd or authorityo without observance of proper procedureo unsupported by substantial evidence in a

556/557 mattero

unwarranted by the facts to the extent that the factsare subject to trial de novo

KEY:o Even for 556/557, you dont just do unsupported

by substantial evidence

You do it ALL cumulative arbitrary and capricious /

statutory authority / proper

procedures

Non-556/557 proceedings:o No mention of 553/Informal RM in 706o

Arbitrary and Capriciou Generally the same as Substantial Evidence;

in practice, courts are a little more willing to

review the on-the-record proceedings

o Scalia inADSPO: arbitrary and capricious = substantial

evidence


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B. FINDINGS OF FACT Review of agency fact-finding is via substantial evidence test

o For non-556/557, we do arbitrary and capricious but the actualattitude/mood in these cases is the same as SE

Cts may be a little more deferential (a little less form for non-556/557)

Universal Camerao Court will defer to agencys factual findings if supported by

substantial evidence on the record considered as a wholeo (shows the difficulty with the SE standard blurred fact/law distinction)o Issue:

Unfair labor practice under the NLRA to fire an employee forlabor organizing

Some confusion as to whether he was fired for labor organizing orrather for being drunk

o Substantial Evidence Extremes:

De novocourt reviews whole again NOo (This would be zero deference)

Scintilla of evidencejust a tiny bit NOo (This would be max deference)

Substantial Evidence = such evidence as a reasonable mindmight accept as adequate to support a conclusion

So much as to beat a directed verdict and allow a jury todecide in your favor

entitled to respect but they must nonetheless be set aside when therecord before a court precludes the agencys decision from being

justified by a fair estimate of the worth of the testimony of witness of

its informed judgment on matters within its special competence.

o Fairly Deferential Frankfurter likes the jury rationale, but thinks some judges

have been too deferential

o On one hand, want to emphasize how muchdeference there is

o BUT also wants to be a little more strict Congress set a mood in enacting the APA

Reflection of a high degree of deference and respect BUT be able to go on something

o Whole Record requirement Mechanics

ALJ decides he was fired for being drunk based on:o Credibility of witnesseso What they say and how they say it

Board reads the transcript and comes out the other wayo Dont see same contradictions in the testimonyo (fired for anti-union animus) results-oriented


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o Board may be guided by expertise They have a sense of how these things

happen on the ground when people

testify against employer, they get fired

Ct of Appeals

Mood: supposed go be deferential, but also cognizant ofjudges duty

Also: Whole Record Reviewo Even the rejected views of the hearing examiner

are valid for Substantial Evidence Must look at action of the Board in light of

the contrary decision and record of the ALJ

o Rationale: More is better

Trial examiner might be moreaccurate

Hard to know if Board followed SubstantialEvidence without looking at both sides(need to see the contrary arguments)

Might want trial examiner to getdeference to inject independent voiceinto the process

How to conduct Whole Record review? Testimonial Inferences

o (Did he seem like he was telling the truth?)o High degree of deference to trial examiner

Derivative Inferenceso (Union employee who just testified againstemployer is fired = suspicion)o High degree of deference to the Board

o (Universal Camerashows that its sometimes hard to figure out what isfactfinding and what is law)

Allentown Macko Company has gone under and when successor company comes in they are

supposed to negotiate with old union under the NLRB

o However, if they have a reasonable doubt that theres support for theunion, they can explore this via:

Election Informal Poll Refusing to negotiate

o New management claimed they had an objective reasonable doubt andtherefore conducted a poll

Union claimed that conducting the poll was an unfair labor practiceo ALJ and Board ruled for the Union employers doubt not valid

Did they have Substantial Evidence to support judgment thatemployer lacked a reasonable doubt as to union support?


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o Scalia: (Majority) Employers uncertainty as to union support was valid

A lot of evidence to make employer believe:o Board admits that some employees dont support

the Union

o

Union Steward has expressed it also(7-8employees + their leader)

o Breyer: (Dissent) These statements were all motivated because the employees

wanted to keep their jobs under the new management

Breyer throws out the statements of witnesses based oncredibility PLUS the union stewards story was

uncorroborated(employer couldnt rely on that)

Thinks the Board made the right decisiono Underlying policy fight

How hard can the Board make it for the employer toproveuncertainty on whether union had support?

Scalia: trying to find whether there was true doubto uncertainty rather than disbelief

Breyer: objective basis for uncertainty of union supporto Harder to find uncertainty

Scalia is trying to expose the NLRBs incremental pro-Unionpolicymaking

If you want to make pro-Union policy, you have toannounce it to the public

C. AGENCY CONCLUSIONS OF LAW What kind of deference, if any are agencies supposed to get outside the pure

factfinding context?

Hearsto Are newsboys employees under NLRB?o Want some knowledge of the use of employee in the Act

Textdoesnt say State Common Law meaningNO

Too diverse / state-by-state Congress was instructing interpreters to construe the term in

light of the general purposes of the statute

Bring labor peace / avoid strikes Fix unequal bargaining power

o (After court has determined all of that, it says they defer to agency onwhether newsboys fit that definition on the ground)

where the question is one of specific application of a broad statutory term in aproceeding in which the agency administering the statute must determine it

initially, the reviewing courts function is limited.


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Packardo Are foremen employees?

Board yes Court yes(BUT in making this conclusion, no deference is

given to agencynaked question of law)

oFactors for deference:

How law-like it the decision? Court gets hung up on the fact that there actual definition

of employee

o More law to apply: employer vs. employeeo Since theres more law no deference

How important is the decision? Many, many foremen in the country, so if we let them

bargain and unionize, well have big change

Court may be trying to flex its muscle: tremendouslyimportant issue

Skidmoreo Foremen living in facility are on callo Court says the waiting time couldbe working time (statute doesnt

foreclose that possibility), but in a particular instance, well defer to the

agency

o Court looking for persuasive reasons If youre persuasive, well listen to you:

Validity of its reasoning Consistency of its position over past Thoroughness of consideration

o Compared toHearst Skidmore

Substantive nature of issue involved Procedural framework leads us to be less deferential No RM/Adj

o No power to issue binding ruleo Cant make adjudicatory decision to be given

deference

o Only had power to enforce in this one case Review of this regime

o Factfinding(Universal Camera /Allentown Mack) 556/557 Substantial Evidence Non-556/557 Arbitrary/Capricious

(either way, fair amount of deference on factfinding)o Law-Deciding

De novo review on lots of it naked questions of law (Packard)

o Mixed Qs of Fact & Law Not Sure; many possible factors:

Defer when Congress has delegated(Hearst)


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Nondelegation Doctrineo If were saying that Congress is ambiguous, then

theyve delegated too much power up front to theagency

Agency able to determine its own limits(BUT were only comfortable withdelegation in the 1st place because we

recognize there are limits in place

Counter:o There will always be some interpretation (Step 1)

plus there ARE limits must be a permissible and

reasonable interpretation

(Constitution neither prohibits nor mandates Chevron)o Organic Statute

Maybe some implicit grant in founding the agency in the 1st placethat they should get deferent when ambiguity

Congress didnt know what to do, so it created the agency Saying when it left it ambiguous, it wanted agency to do it

o APA 706Reviewing court shall decide all relevant questions of law,

interpret the Constitution and statutory provisions, and determine

the meaning or applicability of the terms of an agency actionAND set aside agency action if in excess of statutory jd,

authority, or limitations, or short of statutory right

Possibilities Chevron trumps 706

o 706 is not a mandate that things be reviewed denovo it said they could

Purposive Reading of the APAo Procedural goals:

Concern about things running amok Fair treatment of individuals No over-ossification(VY) Uniformity

o Substantive goals: Allow policymaking by these agencies

Get it out of the courts and into theseother actors(though some concern

about overdelegation) What did Chevron change?

o More potential deference Now Congress only has to get in permissible zone Applies to both law-deciding AND mixed questions of fact/law No emphasis on how important the issue is Dont care about persuasiveness Counter:


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Did Congress impliedly have a view about the relativeimportance of agencies

Stevens Framework in Chevrono Why was there an ambiguity?

Organic Statute may have consciously delegated the policyquestion to agency by leaving it ambiguous

Wanted Agency to do it 1st-best solution Might be alright under a Non-Delegation Doctrine because

they may have had good reason to punt:

o Decisive Issueo Complicated Issue(expertise needed)

Congress could not form a political coalition so it punted to theagency

Not 1st-best option but well do it Could be the worst under the Non-Delegation Doctrine

shows there was no Congressional intent

Congress did not even think about itand therefore we shouldntread too much into ito Stevens says Executive has political accountability and if Congress is

going to punt ambiguities, wed prefer it be to another elected actor Congress has left ambiguity because its unsure about policy

o Doesnt violate non-delegation doctrine because ambiguity has inherentbounds

Agency must regulate within an intelligible principle laid down byCongress

Within the zone of ambiguity, Congress asks agency to think aboutthe general purposes of the organic statute

Question: Why couldnt courts do that?

o Stevens says it wouldnt work because of multipleprinciples

o Chevron is trading off of the broadness and toothlessness of theNondelegation Doctrine

OK for agency to fill in zones or ambiguity(real zone of policydiscretion)

Stevens thinks the discretion is limited enoughApplying Chevron

Step 0o Is this an Agency dealing with a statute for which Chevron deference

could be given?

o Possibilities Particular statute is not one that we allow agency to interpret and

claim Chevron deference

APA


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The agency in administering the organic statute might encounteranother statute that bears on its interpretation but the 2

ndstature is

NOT administered by the agency

For instance, FDA had to tackle Ag statute Agency is administering its own organic statute but the statute is

one where theres a substantial question whether the agency shouldget discretion over that issue

Ex. Implied rights of action(Should agency getdeference on the question of whether the statute contains an

implied right of action?)

o Many times NOnot the type of issue whereagency could have been given discretion by

Congress

Fox guarding the henhouse Some issues are conflict of interest for the agency

o Mead Customs service has issued Letter of Ruling regarding whether dayplanners are diaries

What is this letter of ruling?o NOT 553 N&C RMo NOT 556/557 Formal RMo NOT 556/557 Formal Adjo NOT Hybrid RM/Adjo (its some sort of minimal process protection)

Precedential Effecto Always binding on thatparticular partyo BUT 3rd parties should NOT rely on it; agency does

not want to do N&C so they emphasize that 3rd

parties shouldnt rely on it

Agency wants to clarify/bind, but wants toleave options open and not get bogged down

with h

Leg Reg Outline (Admin v)

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