Professor William Fox
Christopher S. Lee
I. Introduction and Overview
II. Congress, the Agencies, and the “Non-Delegation” Doctrine
A. The New Deal
1. Panama Refining
B. The Modern Formulation
2. Industrial Union
C. Problem: Delegation Handout
II. The Agencies and the Executive Branch
A. Appointment of Agency Officers
B. Removal of Officers
2. Humphrey’s Executor
III. Agency Powers
IV. Obtaining Information from the Government
B. Federal Privacy Act
V. Agency Policymaking: Rule v. Order
VI. Agency Policymaking: Rulemaking
VII. Constitutional Due Process
VIII. Agency Policymaking: Adjudications
IX. Judicial Review of Agency Action
C. Exhaustion, Ripeness and Primary Jurisdiction
D. Review on the Merits
How Agencies make decisions
1. Administrative agencies have powers only insofar as Congress authorizes.
No Common Law Agencies
No Court Agencies
No Self-Created Agencies
2. Better win the case at the agency level.
Courts won’t bail out sloppy lawyering at the agency level.
Courts rarely reverse agency decisions.
3. Know your agency.
Ultra Vires – In excess of powers. Within boundaries of statute.
Canon of Construction
1. With a list of items, the inclusion of one item means the exclusion of all other items.
2. Saving phrase – “but not limited to”
3. See Article III, Section 2 for exhaustive list of saving phrases.
The Non-Delegation Doctrine – The Early New Deal
· Separation of Powers
· Gov’t can’t give power to private persons/private sector.
· Must have proper boundaries.
2. Commerce Clause
3. Key Cases – Still Good Law
· Panama Refining
See Cardozo Dissent
Purpose Approach – What was Congress’s Goal?
· Carter Coal
· Private persons can’t be given legislative authority
The Non-Delegation Doctrine – The Modern Approach
1. Facial v. As Applied
· Facial – Looks only to statute.
· As Applied – Looks to see if Agency’s actions are constitutional.
· SC – Moving from Facial to As Applied.
· Mistretta – Sentencing Commission
· Industrial Union – Benzene & OSHA
i. Cost/Benefit Analysis
ii. Statistical Interpretation
iii. J. Rehnquist – Non-Delegation; Breath of fresh air?
iv. Economic v. Technical Feasibility
3. Supreme Court
· Needs good sense of Congressional limits of legislation.
· Get grip on recent cases.
4. Non Delegation v. Ultra Vires
· Non Delegation = Challenge to Statute
· Ultra Vires = Challenge within the boundaries of the Statute asks if it is within the agency’s power to carry out function.
Rule Making Diagram
1. Notice of Proposed Rule Making
3. Final Rule
Problem A – Chainsaw Kickback problem
1. Delegation – What Standard?
2. Delegation – To Whom?
3. Purposeful or Deliberate Ambiguity
4. Definition of “Reasonable”
5. Non-Delegation charge defeated by Court.
6. Nader – Private sector making rules is bad
7. Fox – If Agency follow Rule Making Process, OK for private sector to provide input and guidance.
· Shall – Mandatory, Non-Voluntary
· May – Discretionary, Voluntary
Government agencies can’t discriminate against suspect classifications – Strict Scrutiny.
Government agencies can discriminate against non-suspect classifications – Rational Bas.
· Interstate Commerce
· Foreign Commerce
· Indian Nations
2. SC Application
3. Findings – or lack thereof
3. Confirmation of Appointees
4. Investigative & Subpoena Powers
Reasons for Removal
1. Inefficiency; or
2. Neglect of Duty; or
3. Malfeasance in Office
4. Good Cause is not Mere Whim; but not defined either.
1. Ultra Vires – Not in most Enabling Acts; but
2. Agency can create policy using Rule or Order, making adjudication possible.
3. See Agency Powers . . .
· Enabling Act
· Ethics in Government
· Paperwork Reduction Act
4. ALJs don’t have contempt powers - Fox
· No statutory authority
· No Agency Rules
· HHS has refused to write contempt rules for ALJs
1. Corporations ARE NOT permitted to take the 5th Amendment against self-incrimination.
2. SC, after Civil War, recognized Corps. as entities with due process rights.
3. Facially incriminating documents are protected by the 5th Amendment.
4. Non-facially incriminating documents are not protected by the 5th.
Problem E – Agency Subpoena Power
1. Subpoena duces tecum – calls for person and documents to appear
2. Every agency has subpoena power.
3. Private sector parties may issue subpoenas.
4. Agency must have rules of procedure showing relevance.
5. Virtually no limits to subpoena power.
6. Subpoena Process
· “Show Cause”
· Burden of Production – Going Forward
i. Show substance/subpoena
ii. Non-compliance with subpoena àContempt (ult. sanction)
· Burden of Persuasion
· Broad Swipe
· Compliance required, unless protected by 5th Amendment
· Failure to Comply à Show Cause à Contempt
· Not much room to resist
· Negotiation permitted during “Show Cause” stage.
1. Immunity Granted for:
· Oral Testimony; or
· Production of Documents
2. Once Prosecutor offers immunity, witness must:
· Testify; or
· Produce documents
3. Types of Immunity
ii. Can’t use things said or documents produced
iii. Can use other documents obtained
iv. 5th Amendment
ii. Entire set of events/Transaction
iii. Cant be prosecuted for entire transaction
Problem F – 4th Amendment – Search and Seizure
1. Right v. Process
2. Right of people to be protected from unreasonable search & seizure.
· Warrant request
· Probable cause
· Oath or affirmation; particularly describing search and seizure.
4. Prior to 1970 Agency inspections were not considered a search.
5. After 1970, Agency inspections are considered a search.
6. 4th Amendment protects virtually nothing in Agency searches.
7. Exceptions to warrant requirement
· Border searches
· Some welfare searches
· Plain View
1. Any person may make a FOIA request.
2. Any Gov’t records can be requested. Anything Gov’t has is a record.
i.Give me all your records.
ii.Give me all records on a specific area.
iii.Give me letter dated xxx x, xxxx
4. Federal Privacy Act
i.Protects records of private individuals from disclosure.
1. Prohibits disclosure
2. Criminal and Civil Penalties
3. Right to access & Right of correction
ii.Does NOT protect dead persons’ records.
iii.Applies only to information held in a “system of records”
1. Retrievable information
2. Smaller chunks of information
3. Must be ID’ed by each agency
4. Must specify by name in CFR
iv.Presumption against disclosure
1. Law Enforcement
5. Agency required to give requestor yes/no answer w/in 20 days of initial request.
6. Appeals are required within 20 days.
7. Judicial Review
i.SMJ – U.S. District Court
ii.Venue – Broad Options
1. Requestor resides
2. Records reside
3. Washington, DC
8. Standing = Personal injury in fact
9. If agency’s actions are “reasonable”, then agency’s decision stands.
10. Courts defer to agencies if “reasonable”
11. De Novo
i.No deference to agency
ii.Court is in command, can do anything.
i.Bonner v. State Department – Representative sampling permitted, but must be legitimate.
ii.Critical Mass Energy v. NRC – Trade Secrets
1. Impairs future information gathering
2. Substantial competitive harm
iii.State Department v. Ray – Privacy Exemption
1. Personal Medical files
2. Clearly unwarranted
3. Invasion of personal privacy
Right to privacy ends with death.
Only live persons have right to privacy.
iv.DOJ v. Press Reporters – Law Enforcement Exemption
v.Morgan v. DOJ – Rough Notes sealed after in camera review
13. Any disclosable FOIA information is NOT protected by the FPA.
14. FPA is a right to retrieve personal information.
15. Government Sunshine Act – Open meetings in public
Rule & Order
ii.Informal – Majority; Notice & Comment period.
1. Sec. 554-558 of APA
2. Sec. 556-557 – Specific
3. APA Adjudications – Rare
b. Evidentiary Proceeding
c. ALJ Presides
1. Sec. 554
2. Formal case, no proceeding
3. Broad spectrum
3. Hybrid Rulemaking
ii.20% of all rules
i.Chenery I, II, and III
1. SC declares rulemaking GOOD.
2. Rules only apply to future effect.
3. Rules don’t govern past activities.
4. 30 days must past prior to enforcement of new rules.
ii.Wyman-Gordon – NLRB Union/Employee List
1. SC – Not properly announced Policy; uses Chenery holding and finds no abuse of disclosure.
2. Challenged on Sec. 553
a. Substance – Ultra Vires
b. Procedural Defect – Creates Invalidity
iii.Bell Aerospace – NLRB Managers v. Employees Definition
· New Liability
2. SC – No agency reversal on Rule and Order
i.Agencies can do anything they want.
ii.Chenery – shows lead-time isn’t required, but is fair and proper.
iii.SC – Nudged agencies towards rulemaking.
iv.Due Process is NOT required for rulemaking.
v.Scalia – Downplays rulemaking
· Too loose, free-form
· Make new laws with Adjudication
i.Applicable to parties and future parties – Most Common
ii.Purely Perspective – future Parties Only
iii.Fully (permissible) retroactive - Rare
Rulemaking Sec. 553
1. Outgrowth from New Deal Agencies.
2. Establishes uniform process in Federal Government.
3. Process, not substance.
4. Military & Foreign Affairs Exemptions. Executive branch grant of power.
5. de minimus Government exemptions.
i. NPRM – Notice of Proposed Rulemaking
ii. ANPRM – Advanced Notice of Proposed Rulemaking (discretionary)
iii. NOI – Notice of Inquiry – Agency’s plea for help.
iv. Ultra Vires – Rules must be consistent with enabling statutes.
v. Terms – Text of Proposed Rules
vi. Description of subjects, subject matter of rule
vii. Solicitation of Comments – Must invite persons to comment
viii. Publish NPRM in Federal Register
a. Named Persons
b. Personal Service – FRCP
ix. Exemptions to NPRM Use
1. Interpretative Rules
2. Good Cause – Emergencies
a. Difficult to prove
b. Must be Plausible
c. SC very strict on review.
x. “Interested Persons” – Anyone may comment, not just “aggrieved” parties.
xi. Broad discretion for “Consideration”
Formal Rulemaking – U.S. v. Florida East Coast Ry.
1. Oral Hearing
2. Verbal Transactions
4. Adversarial proceedings
5. Presiding Commissioner/Judge
6. Based on the Record
7. “After Hearing”
i. Focus of Rehnquist Decision
ii. Informal Rulemaking
8. Legislative Drafting for Formal Rulemaking
i. Verbatim from Sec. 556-557
ii. Incorporation by reference to Sec. 556-557; but allows potential for future changes.
iii. “On the record, after opportunity for agency hearing.”
9. Formal Rulemaking tends to stop agency dead in tracks.
Informal + Hybrid Rulemaking – Vermont Yankee v. NRDC
1. Oral hearings
2. Review of documents
3. Hybrid – Mixture of Sect. 553 & 556/557
i. More than minimum
ii. Less than formal
iii. Avoids discovery and cross examination
4. SC unanimously sides with Agency.
5. Sect. 553
i. Lists Maximum Procedures Required
ii. Lists Minimum Procedures Required
iii. SC Window
1. Constitutional Constraints
2. Extremely Compelling Circumstances
6. SC makes clear in this case that Agencies are experts and should be left alone by lower courts.
Substantive v. Interpretative Rules
1. Substantive Rule
· Legislative rules
· Equivalent of statutes
· No meaningful difference between legislative rules and substantive rules
· Must obey
2. Interpretative Rules
· Thou Shalt Not…
· Does not have force and effect of law.
· Explains or clarifies a substantive rule.
· Don’t lightly ignore anything agency says regarding policy or interpretative rule.
· Look, pay attention, work.
4. No specific definition of Substantive v. Interpretative Rules
Considered by Agency
FR Statement & Purpose ?
30 Days After Notice No
1. See Sect. 551
2. Plausible construction, not Plausible administration
3. SC occasionally permits retroactive rulemaking
Ex Parte Rulemaking Communications
1. Strict rules for ex parte communications.
2. No rules for ex parte rulemaking.
1. No Estoppel against state or Federal government.
2. Rely on erroneous information at your own peril.
· Too much liability with 3 million employees.
· May shut down advice from employees.
· Encourages discipline.
4. Some agencies (IRS) permit written letters to justify estoppel.
5. Agency may grant a declaratory ruling permitting estoppel, but rare and time consuming.
Constitutional Due Process
1. 5th & 14th Amendment Due Process Clauses, no removal of “life, liberty, or property without due process of the law.”
2. Focus on liberty or property interests in the hands of a person/corp.
3. Rarely applied in Admin Law.
4. Threshold Analysis
i. Is any due process required?
ii. Usually no due process required, but occasionally is req.
ii. When must due process be given?
iii. Back end or front end?
c. What kind
ii. What are the procedures agencies have to follow?
a. Issue Spotting
b. Issue Resolution
c. Spot problems and resolve with answers to When & What kind.
a. Goldberg v. Kelly – Still good law
b. Goss v. Lopez
c. Mathews v. Eldridge
7. Elements of Due Process, see Fox p. 147
b. Hearing – Opportunity to comment
i. Oral hearing
ii. Examine Witnesses
iii. Neutral decisionmaker
iv. Opportunity for counsel
v. Exclusively on the hearing record/decision
1. No arbitrary decisions
2. Exclusivity Requirement
8. Mathews Test
a. Private Interest Affected – Due Process analysis
b. Risk of Error – Is more service less?
c. Government Interest – Cost concerns
9. Sources of Authority
a. APA Sect. 556 – 557
b. Agency Enabling Act
c. Agency Rules
d. Orders of ALJs
a. Participation - Broader
b. Discovery – APA, FOIA
c. Rules of Evidence – relevant evidence
11. Official Notice v. Judicial Notice
a. Official notice broader than judicial notice.
b. Party given opportunity to respond to official notice.
12. Burden of Proof – Proponent’s responsibility
13. Standard of Proof – Preponderance
14. Agency Decision
a. Initial Decision
i. Findings of Fact
ii. Conclusions of Law
b. Intra Agency Review/Appeal
15. Section 700
a. 701 – Judicial Review
i. Narrow grounds to overturn decision.
ii. Numerous ways to avoid Judicial Review
iii. Most agency decisions affirmed by courts.
b. 702 Right of Review
i. Adverse Action
ii. Narrow Grounds
iii. No sovereign immunity for declaratory damages
c. 703 – Form and Venue
i. Most agencies provide SMJ
ii. See enabling acts
d. 704 – Actions Reviewable – Final Order
e. 705 – Injunctive
f. 706 – Scope; Heart, On the Merits
v. Final Order
vi. Then Review on the Merits
c. What Kind?
2. Courts Reviewing Agency Actions
3. Whether Process
a. Subject Matter Jurisdiction – Sources
i. Enabling Act
ii. 28 USC 1331
1. Federal Question
2. Arising Under Jurisdiction
3. No Amount in Controversy Issue
b. Preclusion – See 701(a)(1-2) for preclusion areas
i. Statutory Preclusion
ii. Committed to Agency Discretion Preclusion
c. Overton Park v. Volpe
i. Unanimous SC Decision
ii. Preclusion – Presumption in favor of Judicial Review, which is not overcome except in clear and convincing, evidence to the contrary.
iii. Statutory Preclusion – Congressional announcement saying review is not permitted. VERY RARE.
iv. Committed to Agency Discretion
1. Subtle topic
2. Nothing for court to review.
3. Agency makes the final call.
4. Rare, limited examples.
a. Cargo Preferences Act – U.S Gov’t shipments must be under U.S. Flag vessels.
b. Federal Security Clearances – Agency’s decision to grant or deny clearance is final.
d. Standing – Another “Whether” question
i. Door-closing proposition
ii. If court decides no standing, then no option to pursue litigation in Federal judicial system.
iii. See Article III, Sec. 2 – Cases or Controversy – Standing
1. Certain Q’s Fed Court’s can’t address:
b. Federal Question Advisory Opinions
c. Political Questions
2. Plaintiff must show injury sufficient to bring court hearing and agency action.
3. One person, one vote: Baker v. Carr, Apportionment.
4. Aggrieved – Must demonstrate personal state in outcome.
e. Data Processing v. Kemp
i. Conjunctive “AND” Test – Must Show Both Elements
1. Personal Injury, economic or otherwise; AND
2. Within zone of interest protected by statute, constitution or Federal Common Law.
ii. Data Processing demonstrated economic injury.
iii. Must demonstrate Feds can’t do something via Fed. Law.
iv. Sierra Club v. Morton (1972)
1. Challenged the “or otherwise” language.
2. SC found no injury to members demonstrated.
f. George Washington University Law School Groups
a. Timing Question – Like Due Process
b. Only AFTER “Whether” question answered YES (Standing)
c. Most times “Whether” is YES
d. Final Order Doctrine – Sec. 702-3
i. Primary Jurisdiction
e. Primary Jurisdiction
i. Threshold Analysis
ii. Injury – Dispute Options
1. Federal Court
iii. SC – Agency must hear dispute 1st.
iv. Rare exceptions – Nader v. Allegany Airlines
i. Is there something legal that the court can address?
ii. Ex) Court can’t decide safety of drug, FDA’s responsibility.
iii. See Abbot Labs v. Gardner – Generic drugs case.
iv. Ripeness Test
1. Case must be “fit” for Judicial Review; AND Court must be able to resolve the issue (Ultra Vires).
2. P must show harm if Judicial Review withheld.
i. Twin with Ripeness
1. Look at Agency Organization
2. Determine where the dispute lies.
3. Must exhaust all agency remedies before pursuing Judicial Review in Federal Court
4. Final decision usually must come from Secretary’s office, or Chairman of the Agency.
2. Congressional Exceptions – FOIA
3. Emergency Exceptions
5. “What Kind”
a. Enabling Act
b. 706 – Laundry list of grounds for review
c. Judicial Review
i. Fact Finding
ii. Questions of Law – Interpretation of Statute
d. Fact Finding
i. De novo Review
ii. Substantive Evidence
iii. Arbitrary, capricious, and abuse of discretion
e. De novo – normally not permitted by courts. Permitted by statutes for some agencies. SC – No deference to any Agency of Fact; FOIA
f. Substantive Evidence
i. Form of Judicial Review
ii. Applied only to 556/7 Proceedings
iii. “Formal Adjudication” ONLY
iv. NOTE: Some enabling acts require substantive evidence BEYOND 556/7
v. Substantive Evidence on the record as a whole.
vi. Must look at all evidence, pro& con.
vii. NOTE: Distinguish preponderance requirement – “More than a scintilla”
viii. Review performed by Appellate Courts ONLY, not by SC.
g. Arbitrary & Capricious Abuse of Discretion
i. “Hard Look” Technique
ii. Rigorous look at the entire record.
iii. “Reasonable” – If agency action deemed reasonable, then it must be upheld.
iv. J. Scalia – Reasonableness is the key; if action reasonable, then upheld.
6. Conclusions of Law
a. Agency interprets its enabling act.
b. Judicial Review of interpretation of own statute.
c. Test – Does the agency have authority to regulate issue?
d. Agency determining its own authority.
i. Statute – if clear on face, Judicial Review stops.
ii. If there is ambiguity, then agency interpretation is considered reasonable.
f. See Brown & Williamson case challenging FDA’s interpretation of regulation of tobacco. SC focused on step 1 and found Congress wanted tobacco marketed, therefore FDA had no authority to regulate.
a. Agency interpretation of statute.
b. Agency interpretation of regulations (substantive rule)
c. Great deference to agencies, but not controlling.
© CHRISTOPHER S. LEE 2001