Admin - Extensive

Chapter 1 B. Adjudication and Rulemaking Londoner v. City and County of Denver – Subjective Decisions Facts: Individual landowners affected individually with no Opportunity to be Heard Due Process: Due Process rights attach to governmental activities that are adjudicative in nature, but not to activities which are legislative in nature. In the context of taxation, a legislative body has the power to tax without affording citizens due process protections. - These due process protections due not require a full trial, but the mere opportunity to file a written statement is insufficient. Due process in this context requires at least an opportunity to be heard in person and present evidence. No such opportunity was heard. - Why must the hearing be oral? Cf. Mathews v. Eldridge (written procedures suffice for hearings). Traditional judicial model: Due process oral hearing. Implications of Delegation: However, when the decision to tax particular individuals is made by a non-legislative body based on the individual facts and circumstances of a particular case, the decision becomes adjudicative in nature, and due process protections attach. Legislature’s power delegated to subordinate administrative body. This delegation looks adjudicative in nature. Bi-Metallic Investment Co. v. State Board of Equalization – Objective Decisions Notice and right to be heard; not about individual cases. ISSUE: The question then is whether all individuals have a constitutional right to be heard before a matter can be decided in which all are equally concerned. Holding: held that due process protections only attach to administrative activities in which a small number of people are concerned, who are exceptionally affected by the act, in each case upon individual grounds. By contrast, rulemaking or quasi-legislative activities which affect a large number of people without regard to the facts of individual cases do not implicate due process protections. Comparison of Londoner and Bi-Metallic However, the apparent conflict between the two cases is explained by the observation that Bi-Metallic involved so-called "legislative" facts whereas Londoner was a case which presented an issue requiring evaluation of "adjudicative" facts. "Legislative" facts are those which primarily involve determinations of broad policies or principles of general application, e.g., whether every tract of land in a large city has been under-assessed for property tax purposes. Right to hearing: depends on the nature of the agency decision and whether it affects individuals because of their individual capacities (not part of large group) - no right to a hearing when administrative body is rule-making - no right to hearing for any rule by legislature (whether they affect everyone or only a few); for example, you have no right when Congress passes a tax bill

Chapter 2: Adjudication A. Constitutional Right to a Hearing DUE PROCESS: no person shall be “deprived of life, liberty or property, without due process of law.” - This language would seem to demand at least minimal process of some sort from the government whenever it acts in a way to deprive a citizen of “life, liberty or property.” 2 Qs for PROCEDURAL DUE PROCESS is due process due? And 2) if so, how much process is due? Bailey v. Richardson 5th AMENDMENT: It has been held repeatedly and consistently that Government employ is not “property” and that in this particular it is not a contract. In terms the due process clause does not apply to the holding of a Government office. - Administrative record: Never in our history has a Government administrative employee been entitled to a hearing of the quasi-judicial type upon his dismissal from Government service. HOLDING: We hold that the due process of law clause of the 5th Amendment does not restrict the President’s discretion or the prescriptive power of Congress in respect to executive personnel. RULE: The President and Congress are responsible for the qualifications, ability, judgment and loyalty of Government employees and that removal from Government employment is within their discretion. Purpose of Hearing for an at-will employee? Bailey is not going to get her job back, even if she gets a hearing. At-will employment means that the government could fire her next week for not liking her clothing. - Bailey wants to clear her name; important interest - Dignity interest: truth to power interest; stand up for self and face the powerful in a neutral setting - “gum up process” interest: checks/deters government’s discretionary authority over our society; ensures that there is a process between an accusation and a final decision Goldberg v. Kelly – Pre-Deprivation Evidentiary Hearing Statute outlines that P was entitled to the welfare benefits, which upon receipt transfered into a property interest. ISSUE: whether a State that terminates public assistance payments to a particular recipient without affording him the opportunity for an evidentiary hearing prior to termination denies the recipient procedural due process in violation of the Due Process Clause of the 14th Amendment. BALANCING TEST: The extent to which procedural due process must be afforded the recipient is influenced by the extent to which he may be “condemned to suffer grievous

loss,” and depends upon whether the recipient’s interest in avoiding that loss outweighs the governmental interest in summary adjudication. - Extent of due process depends on severity of loss. Lack of welfare = not being able to survive. Important that benefits not expire prematurely. Welfare is the last line of defense before homelessness and starvation. - Terrible need of welfare beneficiary vs. applicant for benefits: Bright line between applicants and current beneficiaries. Goldberg does not apply to applicants. “Rudimentary” Due Process Rights: floor of rights but it later actually turns out to be the highest possible list: - pre-deprivation hearing - notice, including basis for termination - present evidence orally before official - confront and cross-examine adverse witnesses (compulsory process?) - retain/use counsel (vs. right to counsel) - decision based on hearing record - receive written statement of facts and reasons for decision - impartial decision-maker Board of Regents v. Roth – need a legitimate claim of entitlement (liberty, property) Inquiry for whether Due Process applies: To determine whether due process requirements apply in the first place, you must look to the nature of the interest at stake. The interest must fall within the 14th’s protection of liberty and property. Dismissal Plus: You need dismissal from a job plus: - reputational harm, good name implicated OR - stigma/disability that forecloses other opportunities in order to have right to notice and opportunity to be heard. What is the test for a protected property interest in the employment context? Look to “existing rules or understandings that stem from an independent source such as state law” for - express contractual tenure provision - implied contractual tenure provision; employment governed by statute or school policy - common law of tenure from local practice; court specifying that in certain instances a person has a property interest in employment (employed for 15 years, etc.) Perry v. Sinderman – example implied contractual tenure provision RULE FOR INTEREST IN PROPERTY BENEFIT: A person’s interest in a benefit is a “property” interest for due process purposes if there are such rules or mutually explicit understandings that support his claim of entitlement to the benefit and that he may invoke at a hearing.

Opportunity to Prove Claim: Respondent must be given an opportunity to prove the legitimacy of his claim of entitlement to job tenure in light of “the policies and practices of the institution.” Paul v. Davis -- cut back on its willingness to find reputation a liberty interest. Paul’s “stigma-plus” test: Paul, and its reference to Roth, suggested that the plus must be some other effect in addition to mere effect on reputation, such as precluding a person’s ability to obtain another job because of his damaged reputation. Holding: And any harm or injury to that interest in reputation, even where as here inflicted by an officer of the State, does not result in a deprivation of any “liberty” or “property” recognized by state or federal law. The Court has never held that the mere defamation of an individual, whether by branding him disloyal or otherwise, was sufficient to invoke the guarantees of procedural due process absent an accompanying loss of government employment. Liberty question on law school exam: not bad to go into Paul approach, but fall back on status change + stigma, status change + reputational harm from previous cases. B. How Much Process is Due? Mathews v. Eldridge Post-deprivation hearing allowed but wants a pre-deprivation hearing like in Goldberg Three-Factor test for assessing the adequacy of a proceeding under the Due Process Clause (Rule that Governs all Determinations of Whether the Process Provided is Sufficient): 1) First, one must consider the private interest that will be affected by the official action. - Eldridge’s interest in the uninterrupted receipt of his disability payments pending the results of a post-termination hearing was not as important as the welfare recipient’s in Goldberg. Disability recipients are not necessarily destitute without the disability funds. 2) Second, one must consider the risk of an erroneous deprivation of that interest under the required procedures and the likely reduction of that risk by requiring more or different procedures. - The Court opined that in disability determinations, trial-type procedures would not be particularly useful. “In most cases” the decision would turn on “routine, standard and unbiased medical reports by physician specialists,” whereas in welfare cases, such as Goldberg, the disputes might involves issues of witness credibility and veracity, where trial-type procedures would be useful. 3) Third, one must consider the government’s interest in using the required procedures, as opposed to more or different procedures.

- The Court explicitly acknowledged the importance of avoiding administrative burden and cost associated with requiring an evidentiary hearing before any termination of benefits. Cleveland Board of Education v. Loudermill Loudermill was not afforded an opportunity to respond to the charge of dishonest or to challenge his dismissal despite an Ohio law, Ohio Rev. Code Ann. Sec. 124.34 (1984), saying that "classified civil servants" could only be terminated for cause and could obtain administrative review if discharged. Property interests are not created by the Constitution, they are created and their dimensions are defined by existing rules or understandings that stem from an independent source such as state law. I: what predetermination process must be accorded a public employee who can be discharged only for cause. - The principle that under the Due Process Clause an individual must be given an opportunity for a hearing before he is deprived of any significant property interest, requires "some kind of hearing" prior to the discharge of an employee who has a constitutionally protected property interest in his employment. - The essential requirements of due process are notice and an opportunity to respond; predetermination need not be formal. RULES: 1) The DP Clause provides that certain substantive rights – life, liberty and property – cannot be deprived except pursuant to constitutionally adequate procedures. 2) While the state legislature may elect not to confer a property interest in public employment, it may not constitutionally authorize the deprivation of such an interest, once conferred, without appropriate procedural safeguards. - Procedures distinct from property interest. Court can review the procedure. Goss v. Lopez – further deformalization of a predeprivation hearing Education = property interest Pre-deprivation procedures: While the Court conceded that this invaded a protected due process interest, the Court likewise did not wish to burden schools with the need to afford judicial-type proceedings, and it approved minimal procedures: “oral or written notice of the charges against him, and if he denies them, an explanation of the evidence the authorities have an opportunity to present his side of the story.” Goal of Court: Objective is to avoid erroneous decisions. Requirement for Predeprivation hearing because the courts want to limit the # of erroneous decisions. Ingraham v. Wright Liberty interest in not being beaten. Junior high school students had been subjected to corporal punishment and the Court applied the Mathews v. Eldridge three-factor test and found that no prior notice or

proceedings was required, because after-the-fact tort actins were available to counter the corporal abuse. While the Court discussed all three factors in the test, it clearly was most affected by how any requirement for a pre-paddling proceeding would interfere with the swift, sure exercise of school discipline, which it felt was an important government interest. Key to the Case: “There can be no deprivation of substantive rights as long as disciplinary corporal punishment is within the limits of the common-law privilege.” (pg. 95) As long as you are only beat within the privilege, you are not deprived of the right. Zone of operation carved out by privilege. Tort suit is appropriate process for tortuous deprivation of liberty that exceeds exception. Possibility of tort suit apparently provides sufficient insurance against erroneous decisions to satisfy DPC. Quick Due Process Clause Review Two questions: is process due and, if so, how much? Is process due? Look for deprivation of property or liberty - Property: Roth (legitimate claim of entitlement). Has to point to state law, contract, common law, and federal law to say that you have a property right. - Liberty o Paul (follows “legitimate claim” entitlement approach; entitlement from state and/or federal laws). Demonstrate independent source of law. o Meyer language, Roth (stigma plus), Ingraham:  Meyer: very broad. Liberty = marry, pursue life, etc.  Ingraham: right not to beaten by state; not based on any “legitimate claim”. Does not fit with Paul.  Roth: stigma for future jobs = violates liberty interest How much process is due? Mathews three-part balancing test - interest of individual - likelihood of accurate result from currect procedure and value of additional procedure to truth-finding process - interest of government Results in spectrum from Goss (back and forth between student and teacher) to Goldberg (pre-deprivation hearing) C. Statutory Hearing Rights: Triggering APA Requirements 1) Primary statutory source: Administrative Procedure Act of 1946 (Appendix A) 2) Organic Statutes / Enabling Acts: sets agencies up or empowers them to take certain actions - National Labor Relations Act - Federal Trade Commission Act

- Water Pollution Control Act (in Seacoast) 3) State administrative procedure acts (MSAPA, Appendix B) Rules and Orders under APA: final act by agency one or the other. Determination decides process used. - Rule making: “agency process for formulating, amending, or repealing a rule.” §551(5) - Rule: “the whole or a part of an agency statement of general or particular applicability and future effect designed to implement, interpret, or prescribe law or policy…” §551(4) - prospective - Order: “the whole or part of a final disposition…of an agency in a matter other than rule making but including licensing.” §551(6) - Adjudication: the “agency process for formulation of an order” §551(7) - Broadly speaking, two categories of adjudication under APA - formal - everything else o informal o semi-formal REQUIREMENTS FOR FORMAL ADJUDICATION 1. Impartial and unbiased presiding officer §556(d) 2. Notice and opportunity to participate in hearing §554(c) 3. Right to appear with counsel §555(b) 4. Right to present oral and written evidence §556(c) 5. Right to cross-examine 6. Right to submit proposed findings, conclusions, exceptions 7. Compilation of an exclusive record on which agency must base decisions (§556(e)) – i.e., decision “on the record”. Record/transcript from the hearing. Important for Seacoast case. 8. Limitations on ex parte communication and combination of prosecutorial and adjudicative functions §554(d) When formal adjudication? - §554: applies in every case of adjudication required by statute to be determined on the record after opportunity for an agency hearing. - If the organic statute does not trigger §554, then APA requirements for formal adjudication do not apply. Basic Structure of APA’s procedural requirements § 551 provides that an “adjudication” is the “agency process for the formulation of an order, while a “rule making” is an agency process for formulating, amending, or repealing a rule. Difference between Rule and Order: Rule: like a statute or code provision

Order in an Adjudication: common law precedent that tinkers with the substantive rules governing the case even as the court purports to apply the rules to the parties before it. When to apply Formal Adjudication: Look to Triggering/hooking language Do not necessarily need “on the record” language Seacoast Anti-Pollution League v. Costle: tries to answer the question as to what language is necessary to trigger formal adjudication (see Kightlinger) FWPCA requires a hearing but does not say “on the record.” Seacoast Presumption: In cases where statute requires a hearing, we are going to presume that the hearing has to be “on the record.” Presume that it is a formal adjudication unless Congress says specifically otherwise. Hearing = on record = formal adjudication. - hearing are subject to judicial review  judicial review needs a record  formal adjudication is the only thing that creates a record. Rule: Presumption that, unless a statute otherwise specifies, an adjudicatory hearing subject to judicial review must be on the record. - presumes formal adjudication - Present interpretation: look at legislative history, statutory process, etc. From E&E: Court recognized that if the case involved rulemaking, the presumption against formal procedures would apply, but it reasoned that this was precisely because rulemaking is the administrative equivalent of legislation. When however, the nature of the determination is adjudicatory, determining facts and applying law to them, the presumption should be in favor of trial-like procedures, because adjudication is the administrative equivalent of a judicial determination. Key Point: Conflict between Agency’s action and wording of statute. Organic statute should always win; look to intent of Congress that passed the statute. APA designed to fulfill gaps. Clean Water Act refers to public hearing and this case only involves submission of written reports. Remand to highlight to specific language for a public hearing. Refer to E&E pg. 76 and casebook 114 for explanations. 3 Categories for Procedural Law 1. Under APA: everything not a rule is an order; all orders are from adjudications. Adjudications: informal or formal. No triggering language to indicate, therefore informal adjudication. Most of the time, agencies proceed according to informal adjudications. - Prompt notice must be given of denial of written petition/application, usually with brief statement of grounds. §555(e) - Otherwise NOTHING specific to informal adjudication. 2. Other potential requirements (“semi-formal”)

organic statute (enabling act): have imposed certain restrictions on decision making - agency regulations If the Seacoast court had decided that the hearing requirement did not trigger APA formal adjudication, you still would have held a hearing because the Water Act said to hold a hearing. 3. DPC always potentially applicable: if nothing else, you can argue due process. D. Parties and Intervention - APA: “interested party.” Very liberal rules for intervention. - Model State APA: “substantially affected.” Model State Act: intervention is a little harder. E. Evidence and Proof Issues Richardson v. Perales: Hearsay Evidence: “A statement made out of court and not under oath which is offered as proof that what is stated is true…” HOLDING: We conclude that a written report by a licensed physician who has examined the claimant and who sets forth in his report his medical findings in his area of competence may be received as evidence in a disability hearing and, despite it hearsay character and an absence of cross-examination, and despite the presence of opposing direct medical testimony by the claimant himself, may constitute substantial evidence supportive of a finding by the hearing examiner adverse to the claimant, when the claimant has not exercised his right to subpoena the reporting physician and thereby provide himself with the opportunity for cross-examination of the physician. Hearsay: regulation, organic act, and APA permits it. - Regulation: “the hearing examiner shall inquire fully into the matters at issue and shall receive in evidence the testimony of witnesses and any documents which are relevant and material to such matters…The procedure at the hearing generally shall be in the discretion of the hearing examiner… - Organic Act: “Evidence may be received at any hearing before the Secretary even though inadmissible under rules of evidence applicable to court procedure.” - APA §556(d): “Any oral or documentary evidence may be received, but the agency as a matter of policy shall provide for the exclusion of irrelevant, immaterial, or unduly repetitious evidence… What went wrong with Perales’s due process claim? DP right to oral cross-examination. He had the opportunity to subpoena witnesses and that constitutes a waiver for that aspect of due process. Aside from the issue of waiver, why should Bailey (in Goldberg) get a right to crossexamine witnesses if Perales does not? - Perales and Kelly were in two different positions: applicant vs. beneficiary.

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Credibility and veracity were at issue in Kelly because of detailed and personal aspect of information. Worried about credibility of witnesses. Medical evidence is more objective; doctors are not accused of lying.

What is the difference between admissibility of evidence and sufficiency of evidence as a basis for decision? Admissibility: whether relevant OR violates a restriction Sufficiency: whether evidence as a whole provides an adequate basis for the decision - What is the sufficiency problem in Perales? His doctors testified on his behalf while the other side was only hearsay evidence submitted in reports. In the absence of admissible evidence in court, then the decision should have been made on my behalf. See notes for residuum rule: Why does the Court think a residuum rule is not necessary here? - Expertise argument - Impact of residuum rule: parade of live medical testimony for each of these hearings. Not necessary if you already have the right of cross-examination through subpoena. From Perales to Steadman: Burdens, Standards and Scope of Review Burden of going forward (prima facie case): party who has the responsibility of establishing the elements of the case; fail to establish these elements in the burden of going forward = other party does not have Burden of persuasion (or proof): falls on the party’s whose job it is to persuade the decision maker Standard of proof: preponderance of the evidence, clear and convincing evidence, beyond a reasonable doubt  Scope/standard of review: standard that the reviewing court applies in determining whether there was sufficient evidence to support the decision maker; “reasonable jury could have found beyond a reasonable doubt” Steadman v. Securities and Exchange Commission (come back to this….) APA and organic statute arguably did not provide a standard of proof. §556(d): “A sanction may not be imposed or rule or order issued except on consideration of the whole record or those parts thereof cited by a party and supported by and in accordance with the reliable, probative, and substantial evidence.” The Supreme Court ruled that "reliable, probative and substantial evidence" commands an agency to use a preponderance of the evidence standard.

Steadman arguing that really just a standard of review but the legislative history says otherwise: The Court further found that the legislative history resolved any ambiguities in the statute as to the standard of proof. The House Report "expressly adopted" a preponderance of the evidence standard: "Where there is evidence pro and con, the agency must weigh it and decide in accordance with the preponderance." TAKE AWAY FROM CASE: - Section 556(d) of the APA contains a standard of proof should be applied by an agency when adjudicating cases: preponderance of the evidence. - Organic statute of agency may contain different standard (Organic statute always trumps APA). - Review footnote 13 re triggering or “hooking” language F. Combination of Functions WITHROW v. LARKIN The SC reiterated the fundamental importance of the need for an unbiased decision maker, but it found that the mere combination of investigatory, prosecutorial, and adjudicatory functions in the same entity did not necessarily make the entity biased in adjudicating. What practical concerns may be lurking behind the Court’s decision? Investigative decisions, prosecutorial, and adjudicatory decisions all made by same body. The actual members of the Board make final decisions with investigations, charges, and hearings. Combination of hats is very common in administrative agencies. How do we know a tribunal is fair? - “Presumption of honesty and integrity in those serving as adjudicators.” (p. 137) - “State administrators ‘are assumed to be men of conscience and intellectual discipline, capable of judging a particular controversy fairly on the basis of its own circumstances.” - Therefore: burden of persuasion on complainant because we do not want every Bill and Sally to challenge every administrative agency Why is cross-examination the guarantee of due process: Cross-examination gives the party the forum for presenting the other side of the issue/case; mere exposure during the preliminary stages of the investigation does not mean that the decision makers have necessarily made up their minds. Basic structure of administrative procedures is fine as long as cross-examination is available in the final stages.€ Combo. of functions can violate DPC: pecuniary interest in outcome of case OR judge had been the target of personal abuse or criticism from the party before him. STATE or LOCAL FACT PATTERN: do not apply APA.

NASH v. BOWEN What was the underlying administrative crisis that triggered this case? Backlog of 100,000 cases and the Social Security Administration instituted efficiency standards to help with the backlog. I: whether efforts by the Secretary of Health and Human Services to improve the quality and efficiency of the work of Administrative Law Judges impaired their asserted right to decisional independence under the APA. What are the legal sources for the asserted right of decisional independence? - Administrative hearings “shall be conducted in an impartial manner” (APA §556(b)). - ALJs shall not be “subject to…supervision or direction” from agency investigator or prosecutor concerning pending matters (§554(d)(2)). 3 Challenged Practices 1) Peer Review Board: Policies designed to insure a reasonable degree of uniformity among ALJ decisions are not only within the bounds of legitimate agency supervision but are to be encouraged. Thus, the Secretary’s efforts through peer review to ensure that ALJ decisions conformed with his interpretation of relevant law and policy were permissible so long as such efforts did not directly interfere with “live” decisions. 2) Production quotas: We agree with the district court that reasonable efforts to increase the production levels of ALJs are not an infringement of decisional independence. The setting of reasonable production goals, as opposed to fixed quotas, is not in itself a violation of the APA. 3) Quality Assurance System: To coerce ALJs into lowering reversal rates – that is, into deciding more cases against claimants – would, if shown, constitute in the DC’s words “a clear infringement of decisional independence.” But the DC found no direct pressure on ALJs to maintain a fixed percentage of reversals, we conclude that the Sec’s policy in this regard did not infringe upon the “decisional independence” of ALJs. If an agency determines that some ALJs have longer case resolution time than others, what steps should the agency be permitted to take to increase productivity? - reasonable goals and not strict quotas - minimally acceptable levels of efficiency - training courses for judges in handling cases - look at the kind of people hired for the positions; could hike up qualifications for the job All these steps cost money

G. BIAS ANTONIU v. SEC Antonio later sought approval for employment from the National Association of Securities Dealers. The SEC vetoed the pending approval. One of the participating commissioners in the veto was Charles Cox. Cox also took part in the SEC’s decision to institute a second set of proceedings. Cox, before the second proceedings was complete, gave a speech that said Antoniu’s bar from association with a broker-dealer was permanent. Outcome of Second Proceedings: concluded that the public interest required that Antoniu be barred from association with any broker or dealer. 5th Amendment: no person shall be deprived of life, liberty or property without due process of law [and the appearance of due process]. Not in the Constitution. DP clause is about creating the appearance of a system in which fairness is at the core. Antoniu’s Appeal: Due in part to Commissioner Cox’s remarks about Antoniu made in the Denver speech, Antoniu claims that the proceedings were biased or at least that they were impermissibly tainted with the appearance of impropriety. - DP Requirements: absence of bias and appearance of justice. Test for Disqualification: The test for disqualification has been succinctly stated as being whether “a disinterested observer may conclude that the agency has in some measure adjudged the facts as well as the law of a particular case in advance of hearing it.” 2 Ways to Establish Bias: In some cases, the proceedings and surrounding circumstances may demonstrate actual bias on the part of the adjudicator. In other cases, the adjudicator’s pecuniary or personal interest in the outcome of the proceedings may create an appearance of partiality that violates due process, even without any showing of actual bias. H. EX PARTE CONTACTS FIRST SAVINGS & LOAN ASSN. v. VANDYGRIFF What is an ex parte contact? - On or from one side or party only - Ex parte communication means an oral or written communication not on the public record with respect to which reasonable prior notice to all parties is not given, but it shall not include requests for status reports on any matter or proceeding covered by this subchapter (APA). Problem with Ex parte contact: we do not know what went on between Commissioner and party. No record, one-sided, and the other party does not know what was said. With briefs, both sides know the arguments, along with the Judges. Facts: During the first week in September 1978, and during the absence of counsel, five of the disappointed organizers came to Austin and visited with the Commissioner, giving him a “different view” of economic conditions of the Borger area than that reflected in the order denying the application. No one representing appellant was advised of or was

present at this parley with the Commissioner. In March 1979, the Commissioner entered his order approving the charter application. The Commissioner specifically pointed out that his decision was only based upon the record as compiled by all parties in January and February of 1979. The Supreme Court of TX did not presume that the ex parte meeting prejudiced the Commissioner. In the trial court, the burden was on the administrative agency to prove that there was not prejudice streaming from the ex part contact. Burden now on the complaining party to show prejudice. This makes life easier for administrative agencies. Now all the pressure is on the complaining party. Party outside of the contact now has to prove prejudice from the meeting when they were not even part of the meeting. Key Points of APA §557(d) – Prohibition on Ex Parte Contacts - Restates prohibition on ex parte contacts and extends to agency member [(1) (a)&(b)] - Requires decision maker who makes/receives prohibited ex parte contact to place information about such contact on the public record [(1)(c)] - Authorizes agency or ALJ, consistent with justice and policies of underlying statute, to sanction party who knowingly violated ex parte rule by requiring party to “show cause why his claim or interest in the proceeding should not be dismissed, denied, disregarded, or otherwise adversely affected on account of such violation…” [(1)(d)] Informal – not a “hearing on the record” No limits on ex parte contacts in informal adjudications Agencies have many roles: answering questions, helping with benefits, sorting out messes,…almost all contacts are ex parte. The Courts do not want to limit all these informal ex parte contacts. I. Estoppel against the Government SCHWEIKER v. HANSEN Facts: Connelly erroneous told respondent that she was not eligible for her mother’s insurance benefits under §202(g) of the Social Security Act and she left the SSA office without having filed a written application. - SSA requires a written application to fulfill the “filed application” requirement. I: whether Connelly’s erroneous statement and neglect of the Claims Manual estop petitioner, the Secretary of Health and Human Services, from denying retroactive benefits to respondent for a period in which she was eligible for benefits but had not filed a written application. Downside of Permitting Estoppel: tons of litigation; incentive for government not to provide advice; paper requirement is very important for record-keeping purposes; - should not permit someone to acquire benefits even though they are not legally

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lower official screws up and now you are entitled to benefits that you do not deserve entitled to receive back benefits because of government mistake

Are there exceptional situations were estoppel might be appropriate? - Malice – intentional misinformation. Misfeasance suit in which you could sue for estoppel. - Cases where government has entered into a written agreement. - Advice from high ranking official; Holding: In sum, Connelly’s errors fall far short of conduct which would raise a serious question whether petitioner is estopped from insisting upon compliance with the valid regulation. Freedom of Information Act (FOIA) “Each agency, upon any request for records which a) reasonably describes such records AND b) is made in accordance with published rules stating the time, place, fees (if any), and procedures FOIA – key exceptions 1. National defense or foreign policy materials 2. Internal personnel rules/policies of agency 3. Materials exempted form disclosure by statute 4. Trade secret and commercial information 5. Inter- or intra-agency memos and letters; sort of like work-product 6. Personnel and medical files 7. Records/information compiled for law enforcement purposes Quick Review Constitutional Parameters - When does a party have a right to hearing? - How much process is due? Statutory Issues - when does the APA apply? Federal agencies only. - Is the adjudication formal or informal? - Who may participate or intervene in adjudication? - Flexible rules of Evidence Challenges to Fairness of Decision Maker - combination of functions - Bias (actual, risk, appearance) - Ex parte contacts Holding Government Accountable - Estopple - Document disclosure/open meetings

CHAPTER 3: RULEMAKING A. INTRODUCTION to RULEMAKING Rulemaking: Key Issues What are the types of rulemaking and how do they work? - informal (notice and comment – APA does provide rules) - formal - Other (hybrid) Must an agency make rules? How can rules be used to avoid adjudication? Must an agency follow its own rules? “On the record” language triggers formal rulemaking and §§556 and 557. “Formal rulemaking” is rarely used and generally speaking, the procedure for Formal Rulemaking is similar to the procedure for formal adjudication. That is, it is a trial-type procedure governed by Section 556 and 557 of the APA. The second procedure is called “notice-and-comment rulemaking” or “informal rulemaking.” This is the general rule under the APA. In a sentence, the agency gives notice of the rulemaking to the public, accepts comments from the public about t proposed rule, and after consideration of the comments provides an explanation of the basis and purpose of the rule when it adopts the final rule. §553. NATIONAL PETROLEUM REFINERS v. FTC Presumption that Organic Statute permits agency to engage in Substantive Rulemaking. Appellee’s 5(b) argument: Appellees argue that since Section 5 mentions only adjudication as the means of enforcing the statutory standard, any supplemental means of putting flesh on that standard, such as rule-making, is contrary to the overt legislative design. Court’s Interpretation of 5(b): Section 5(b) does not use limiting language suggesting that adjudication alone is the only proper means of elaborating the statutory standard. It merely makes it clear that a Commission decision, after complaint and hearing, followed by a cease and desist order, is the way to force an offender to halt his illegal activities. Holding: We rely, therefore, on the plain language of Section 6(g) which gives the Commission the authority to “make rules and regulations for the purpose of carrying out the provisions of Section 5.” We hold that under the terms of this governing statute, 15 USC §41 and under Section 6(g), the Federal Trade Commission is authorized to promulgate rules defining the meaning of the statutory standards of the illegality the Commission is empowered to prevent. Advantages of Rulemaking over Adjudication: 1) Conserves agency resources because it eliminates the need to litigate and relitigate – more efficient

2) Eliminates unfairness of trying to establish rule for entire industry based on a single case 3) Opens up process of agency policy innovation to a broad range of criticism, advice, and data 4) Establishes a bright-line standard: greater certainty to businesses subject to agency’s power. Each company is on clearer notice whether or not specific rules apply to it. 5) Reduces delay in implementation or regulatory policy 6) Substantive rules protect companies which willingly comply with the law against what amounts to the unfair competition of those who would profit from delayed enforcement as to them. Disadvantages of Rulemaking 1) Inflexibility (does not address unanticipated circumstances) 2) Courts make better decisions when confronted with an actual case and not deciding principles in the abstract 3) Lose the advantages of the “adversariness” of adjudicatory process If Congress does not want an agency to have rulemaking authority, then they should say so. Court finds that FTC does have authority: give agency benefit of the doubt when Congress does not prohibit the rulemaking authority. BOWEN v. GEORGETOWN UNIV. HOSPITAL Facts: The Department of Health and Human Services adopted a rule changing the costs for certain procedures for which it would reimburse hospitals under the Medicare program. The change applied not just to costs that would be incurred after the rule was adopted, but also retroactively to costs that had been incurred during the two-year period before the rule was adopted. I: whether the Secretary may exercise this rulemaking authority to promulgate cost limits that are retroactive. The Court said that the agency could not create retroactive rules without statutory authorization. Explicit statutory authorization would be tantamount to an amendment of the APA’s definition limiting rules to statements of future effect. Holding: The SC held that a rule cannot be retroactive unless the statute authorizing the rule explicitly empowers the agency to adopt a retroactive rule. Secretary of HHS does not have statutory authority to promulgate rules imposing retroactive cost limits on Medicare reimbursement. APA §553 – Notice and Comment General notice of proposed rulemaking must be published in Federal Register (§553(b)) - time, place, nature of proceedings - reference to legal authority - terms of proposed rule or description of subjects

After notice, interested parties mush have opportunity to participate by submitting data, views, arguments (written or oral) [§553(c)]. Is there a right to a hearing during notice and comment rulemaking? No. “Formal rulemaking” – ‘When rules are required by statute to be made on the record after opportunity for an agency hearing, sections 556 and 557 of this title apply instead of this subsection.” APA 553(c) If no statutory trigger, then no hearing requirement so “notice and comment” provisions apply = “informal” rulemaking. Why did Congress establish rules for informal rulemaking when it established almost no rules for informal adjudication? Informal adjudication = no rules Informal rulemaking = notice and comment, broad effect because it is legislation that will affect many businesses/agencies/people. APA §551(8) – Licensing “Licensing’ includes agency process respecting the grant, renewal, denial, revocation, suspension, annulment, withdrawal, limitation, amendment, modification, or conditing of a license. APA §551(7) – Adjudication “‘Adjudication’ means agency process for the formulation of an order….” APA §551(6) – Order “‘Order’ means the whole or a part of a final disposition, whether affirmative, negative, injunctive, or declaratory in forum, of an agency in a matter other than rule making but including licensing…” APA §551(5) – Rule Making “‘Rule making’ means agency process for formulating, amending, or repealing a rule…” APA §551(4) – Rule “‘Rule’ means the whole or a part of an agency statement of general or particular applicability and future effect designed to implement, interpret, or prescribe law or policy or describing the organization, procedure, or practice requirements of an agency and includes the approval or prescription for the future rates, wages, corporate or financial appliances, services or allowances therefore or of valuations, costs, or accounting, or practices bearing on any of the foregoing…” B. NOTICE and COMMENT: “INFORMAL” RULEMAKING CHOCOLATE MANUFACTURERS ASSN. v. BLOCK – contest final rule but before enforcement Basic Holding: Agriculture Department’s proposed rule did not provide adequate notice that elimination of flavored milk from the WIC food package would be considered.

Test for Adequate Notice: “Notice is adequate if the changes in the original plan [proposed rule] are in character with the original scheme [general purpose], and the final rule is a logical outgrowth of the notice and comments already given.” Q: Do you submit comments on other people’s comments? - If you do, then you cannot argue lack of notice. - If you do not, then you give up on the opportunity to counter other companies’/organizations’ comments. Facts: Proposed Rule: The rule proposed a maximum sugar content specifically for authorized cereals. The preamble also contained a discussion of the sugar content in juice, but the Department did not propose to reduce the allowable amount of sugar in juice because of technical problems involved in any reduction. Neither the rule nor the preamble discussed sugar in relation to flavoring in milk. Under the proposed rule, the food packages for women and children without special dietary needs included milk that could be "flavored or unflavored." The notice allowed sixty days for comment and specifically invited comment on the entire scope of the proposed rules. Final Rule: In the previous regulations, women and children were allowed to receive flavored or unflavored milk. No change in this provision was proposed by the Department. However, 78 commenters requested the deletion of flavored milk from the food packages since flavored milk has a higher sugar content than unflavored milk. The agency concedes that the elimination of flavored milk by the final rule is a complete reversal from its treatment in the proposed rule, but it explains that the reversal was caused by the comments received from 78 interested parties -- primarily professional administrators of the WIC Program. Therefore, to reinforce nutrition education, for consistency with the Department's philosophy about sugar in the food packages, and to maintain food package costs at economic levels, the Department is deleting flavored milk from the food packages for women and children. Although the deletion of flavored milk was not proposed, the comments and the Department's policy on sugar validate this change. Requirements and Purpose of Notice: Section 4 of the Administrative Procedure Act (APA) requires that the notice in the Federal Register of a proposed rulemaking contain "either the terms or substance of the proposed rule or a description or the subjects and issues involved." 5 U.S.C. § 553(b)(3) (1982). The purpose of the notice-and-comment procedure is both "to allow the agency to benefit from the experience and input of the parties who file comments . . . and to see to it that the agency maintains a flexible and open-minded attitude towards its own rules." Holding: At the time the proposed rulemaking was published, neither CMA nor the public in general could have had any indication from the history of either the WIC Program or any other food distribution programs that flavored milk was not part of the acceptable diet for women and children without special dietary needs. The discussion in the preamble to the proposed rule was very detailed and identified specific foods which

the agency was examining for excess sugar. This specificity, together with total silence concerning any suggestion of eliminating flavored milk, strongly indicated that flavored milk was not at issue. The proposed rule positively and unqualifiedly approved the continued use of flavored milk. Under the specific circumstances of this case, it cannot be said that the ultimate changes in the proposed rule were in character with the original scheme or a logical outgrowth of the notice and comments given. Judgment: We believe that there was insufficient notice that the deletion of flavored milk from the WIC Program would be considered if adverse comments were received, and, therefore, that affected parties did not receive a fair opportunity to contribute to the administrative rulemaking process. That process was ill-served by the misleading or inadequate notice concerning the permissibility of chocolate flavored milk in the WIC Program and "does not serve the policy underlying the notice requirement." How does the outcome of this case affect the future behavior of agencies and regulated parties? USDA: On the next proposal for change to a rule, you need to give notice of the potential for rulemaking/changing rules and allow time for comment from all affected parties. More complicated proposals because they will have to list all possible issues and thoughts that are (possibly) under consideration. Potentially a huge and complicated process. Companies have to engage in extensive analysis of the implication of the rulemaking/editing and respond accordingly. Agency Options after Comments: Discontinue rulemaking Start over Go ahead exactly as proposed Go ahead with minor changes Go ahead with major changes US v. NOVA SCOTIA FOOD PRODUCTS CORP. Facts: FDA promulgated rule required smoked fish to be heated to high temperature in order to prevent disease. Made rule under §553, informal rulemaking (still notice and comment). Inspector cited company for failing to comply with extreme temperature regulation. Company’s Argument: Company acknowledges it failed to comply, but said that if it complied it would ruin the fish. Company alleges FDA relied on undisclosed evidence, and thus rule is not supported by the record. Company says there was not an adequate record in informal rulemaking. What is the procedural context for this challenge to FDA’s rule? Rule has been adopted and Nova Scotia has had an injunction filed against them because of their open rejection of the rule. Agency is now trying to enforce the rule. In the enforcement action, the party argues that the rule is invalid and lists the reasons. Indirect

(collateral) challenge through the attempted enforcement. Administrative Law allows a collateral challenge to the rulemaking process. Why do you think a court might focus on procedural flaws instead of rejecting the substance of an agency rule? Court nervous about getting into a debate about the substance of the rule since they are not the body with the expertise. Court does not want to get into an argument with an agency that is protecting the public health. Does not want to say that the agency screwed up its own analysis. Record: FDA didn't keep record as it went along, instead assembled it post hoc for purposes of judicial review, thus no contemparaneous record. Record comprised comments received during rulemaking and scientific evidence. But scientific evidence was not made available during rulemaking itself. Arbitrary and Capricious: Inadequacy of availability of evidence relied on suggests arbitrary and capricious decision making. Agency’s Failures: Although agency may rely on own expertise outside the record, if there is evidence available that is not agency's own expertise, evidence should be introduced. Agency failed to include any explanation of continued commercial feasibility as result of regulations. Agency also failed to consider alternatives for making fish safe. Regulation is declared invalid under arbitrary and capricious standard. APA §706 – Scope of Review “The reviewing court shall – 2) hold unlawful and set aside agency action, findings, and conclusions found to be a) arbitrary, capricious, an abuse of discretion or otherwise not in accordance with law…” Informal rulemaking and adjudication: use the arbitrary and capricious standard to challenge the facts Standard re Procedure -- §553(c) “After notice required by this section, the agency shall give interested persons an opportunity to participate in the rule making through submission of written data, views, or arguments with or without opportunity for oral presentation. After consideration of the relevant matter presented, the agency shall incorporate in the rules adopted a concise general statement of their basis and purpose.” Procedural Flaw 1: Failure to Disclose Factual Basis “When the basis for a proposed rule is a scientific decision, the scientific material which is believed to support the rule should be exposed to the view of interested parties for their comment… To suppress meaningful comment by failing to disclose the basic data relied upon is akin to rejecting comment altogether.” (p. 196) - Implication: Administrative records become voluminous from the APA dumping information into the record. Makes comment process much more

voluminous. If the agency uses information for its decision, then the agency must provide it to the companies affected so that they know what information/statistics/evidence they need to counter. Procedural Flaw 2: Inadequate “Concise General Statement” “We do not expect the agency to discuss every item of fact or opinion included in the submissions made to it in informal rulemaking. We do expect that, if the judicial review which Congress has thought it important to provide is to be meaningful, the ‘concise general statement of…basis and purpose’ mandated by [APA §553] will enable use to see what major issues of policy were ventilated by the informal proceedings and why the agency reacted to them as it did.” Inadequacies of “concise general statement” – too “concise” and “general” because it lacked - discussion of alternative approach to botulism risk proposed by industry and Bureau of Fisheries - analysis of commercial impact of regulatory requirement on white fish industry - balancing of commercial impact on white fish industry against public health needs (i.e. cost/benefit analysis – FDA statutory authority) How are the procedural problems with FDA’s regulation related to concerns about its substantive adequacy? How do you answer the question by focusing on the flaws in the process? - Procedure did not get all facts into record. - Procedure did not get comments from affected parties - Procedure failed to respond to comments that were in the record. - Agency did not do a good job building support for its ultimate conclusion. Agency’s decision was arbitrary and substantively insufficient. APA does not require Cost/Benefit analysis: Why does agency do this analysis? APA effectively imposing on agency the requirement to respond to comments. If your particular industry is adversely affected, then raise cost issues if you want an agency to conduct a cost/benefit analysis. C. EXCEPTIONS TO INFORMAL RULEMAKING REQUIREMENTS MADA-LUNA v. FITZPATRICK Exception to §553’s “notice and comment” requirement: “general statements of policy” exception and thus the INS was not required to conduct notice and comment proceedings whether to repeal the 1978 OI or to promulgate the 1981 OI. Def. of “general statements of policy”: statements issued by an agency to advise the public prospectively of the manner in which the agency proposes to exercise a discretionary power.

Determining Factor for whether a rule or general statement of policy: the extent to which the challenged directive leaves the agency, or its implementing official, free to exercise discretion to follow, or not to follow, the announced policy in an individual case. - guidance = general statement of policy: if the directive merely provides guidance to agency officials in exercising their discretionary power while preserving their flexibility and their opportunity to make “individualized determinations,” it constitutes a general statement of policy. o operates prospectively o does not establish a “binding norm”, i.e. norm that binds regulated parties and/or restricts agency discretion in future cases o Note: discretion still may be reviewable (see Overton Park v. Doe) - Binding norm = substantive rule: If the directive “narrowly limits administrative discretion” or establishes a binding norm that “so fills out the statutory scheme that upon application one need only determine whether a given case is within the rule’s criterion,” it effectively replaces agency discretion with a new “binding rule of substantive law.” Requirements of §553’s “General Statement of Policy” - First, they must operate only prospectively. - Second, they must not establish a “binding norm” or be “finally determinative of the issues or rights to which they are addressed,” but must instead leave INS officials “free to consider the individual facts in the various cases that arise.” Why aren’t notice & comment required to repeal the 1978 OI and adopt the 1981 OI? “Except when notice or hearing is required by statute, this subsection [containing the notice and comment requirement] does not apply – a) to interpretive rules, general statements of policy, or rules of agency organization, procedure, or practice …” [APA §553(b)] What is the test for general statement of policy? Prospective rule and cannot be a binding norm. - operates prospectively - does not establish a “binding norm”, i.e. norm that binds regulated parties and/or restricts agency discretion in future cases - Note: discretion still may be reviewable (see Overton Park v. Doe) Public comment supposedly not needed re general statements of policy because - provide internal guidance to agency officials on policy, particularly re enforcement standards - set priorities for agency action - have no impact on legal duties of parties (not “binding norms”) As long as the agency retains discretion, and there is no binding effect, then you do not cross the line to a formal rule that requires notice and comment. General statements of policy act as suggestions for the regulated companies on how to proceed. They provide

the administrative agency with room to work by providing them with discretion on how to proceed, when to enforce/act, etc. Neither party is legally bound. WARDER v. SHALALA Procedural and Substantive Challenges to HCFAR 96-1: Appellees advanced the procedural claim that HCFAR 96-1 was invalid, having been adopted without compliance with the notice-and-comment procedures of the APA, and the Medicare statute. Appellees also made the substantive claim that HCFAR 96-1 was arbitrary and capricious. Interpretive Rule Exception to Notice and Comment Requirement: Def. of Interpretive: Attorney General’s Manual describes an interpretive rule as one “issued by an agency to advise the public of the agency’s construction of the statutes and rules which it administers.” Def. of Substantive (Legislative) Rule: substantive rules are issued by an agency pursuant to statutory authority and which implement the statute. Such rules have the force and effect of law. Distinction: Based on authority. Lawmaking vs. law-interpreting. - Rules are legislative when the agency is exercising delegated power to make law through rules, and rules are interpretive when the agency is not exercising such delegated power in issuing them. - Substantive Content: - If a rule creates rights, assigns duties, or imposes obligations, the basic tenor of which is not already outlined in the law itself, then it is substantive. - Interpretive rule does not effect a substantive change in the regulations. HCFAR 96-1 Interpretive: HCFA intended HCFAR 96-1 to be interpretative. The Ruling itself purports only to “clarify” the proper application of existing statutory and regulatory definitions to a particular case. Also, the Ruling does not establish any new standard. Rather it addresses an area of ambiguity: whether a device comprising both orthotic and DME components should be reimbursed as a brace of as DME. §553(b) exception for “interpretive rules” - Interpretive rules inform public and agency employees concerning agency’s construction of organic statute or regulations - Substantive/legislative rules - involve exercise of agency’s delegated authority to make law - establish a new standard, instead of simply resolving an ambiguity in existing standard. Why does the court (here and in Mada-Luna) reject “substantial impact” as the test for determining whether a rule is legislative or not? See fn. 6. Just because substantial impact does not mean that you need notice and comment. Why? Court seems to just dismiss the substantial impact and does not provide a good reason.

- If you used substantial impact for when notice and comment is required, then agencies could only act in this interpretive manner when there would very little impact. This would make the exception pointless. APA §553(a) – General Exceptions to Notice and Comment This section applies, according to the provisions thereof, except to the extent that there is involved – 1) a military or foreign affairs function of the US or 2) a matter relating to agency management or personnel or to public property, loans, grants, benefits or contracts. All benefit programs are exempt from notice and comment requirements. Thus, Congress will write the requirements into the actual Act. The “Good Cause” Exception -- §553(b)(3)(b) Except when notice or hearing is required by statute, this subsection does not apply – B) when the agency for good cause finds (and incorporates the finding and a brief statement of reasons thereof in the rules issued) that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest. D. BEYOND NOTICE AND COMMENT: “FORMAL,” “HYBRID,” and NEGOTIATED RULEMAKING US v. FLORIDA EAST COAST RAILWAY CO. R: Where an organic statute passed by Congress requires procedures beyond notice and comment, but does not trigger the full requirements of formal rulemaking, the rulemaking procedure has been called “hybrid” rulemaking. Why do the railroads want the ICC to hold a hearing? Drag the process out so that you can delay in paying the increased rents; advantages of oral hearing: cross-examine witnesses and whole thing “on the record.” End result would have to be based on the record produced at the hearing. From E&E: In a case involving the ICC, the Supreme Court interpreted the language of Section 553 very narrowly, requiring a statute either to state in terms or by reference to sections 556 and 557 that Formal Rulemaking is required or to use language explicitly invoking the need for the rule to be made both on the record and after an opportunity for an agency hearing. Florida East Coast Railroad: added that the “hearing” required by the Interstate Commerce Act could be a “paper hearing,” involving merely the filing of papers with no oral testimony or evidence. In short, the case (when combined with Allegheny-Ludlum) essentially raise a presumption against statutes being interpreted to require Formal Rulemaking; only the clearest language indicating such an intent or the magic language requiring both a decision on the record and an opportunity for an agency hearing will suffice.

HOLDING ON HEARING: We think this treatment of the term “hearing” in the APA affords sufficient basis for concluding that the requirement of a “hearing” contained in §1(14)(a), in a situation where the Commission was acting under the 1966 statutory rulemaking authority that Congress had conferred upon it, did not by its own force require the Commission either to hear oral testimony, to permit cross-examination of Commission witnesses, or to hear oral argument. APA “Hooking” or “triggering” language: when rules are required by statute to be made on the record after opportunity for an agency hearing, sections 556 and 557 of this title apply instead of this subsection.” APA §553(c) ICA lacks “hooking” language, therefore not “formal” rulemaking and therefore no oral hearing on the record required. Does this mean the Court requires “magic words”? Statutory words are key issue for deciding whether formal rulemaking are required. Much more narrow requirement before formal rulemaking. Does this read formal rulemaking out of the APA? Not going to force agencies to do formal rulemaking when Congress has not used the appropriate words in the organic statute. Procedural Challenges “Hearing” required before ICC action on boxcar rental rates Nature of hearing not defined by ICA and legislative history unclear APA provides guidance: - Not all §553(c) hearings oral - Not all §556(d) hearings oral - Thus, not necessary for ICA “hearing” to be oral Informal rulemaking (§553) occasionally make use of the word “hearing.” Leads you to conclude that Congress thinks that an agency can provide a hearing separate from notice and comment rulemaking (does not require the hearing to be oral). Formal rulemaking: agency can conduct hearing in a purely written form. No reason to insist that ICC hearing has to be oral. Due Process Clause Londoner and Bi-Metallic still define the constituioanl alternatives. Londoner: Oral hearing normally required adjudicate particular facts in specific cases applying rules (small #s of people). Bi-Metallic: Hearing generally not required for promulgation of general rule affecting all (rulemaking). Qs to Ask in General: Does the word “hearing” trigger formal rulemaking requirements? No.

If a [informal] “hearing” is required by the organic statute, what does this involve? Example of Hybrid Rulemaking: An agency’s statutory mandate provides that it may adopt rules only after providing a hearing at which interested persons may testify and give evidence. The statute also requires that transcript be kept of any testimony given and that the agency take any public comment and evidence into account in its final rule. Does this require Formal Rulemaking? Explanation: No. Although the statute requires a hearing and provides some details about the type of hearing to be given, it does not clearly require a “record proceeding,” that is, a proceeding at which all the evidence on which the rule is to be based must be entered into evidence in an “on-the=record” hearing. This agency’s statutory mandate would require what is called “hybrid rulemaking,” because it goes beyond the requirements of §553’s Notice-and-Comment (Informal) Rulemaking, but it does not go so far as to require Formal Rulemaking. Example of Formal Rulemaking language: Such order (rule) shall “be based only on substantial evidence of record at such hearing” and shall set forth, as part of the order, detailed findings of fact on which th order is based. In other words, only the evidence produced in this hearing can be considered by the head of the agency in adopting the rule. VERMONT YANKEE NUCLEAR POWER CORP. v. NRDC – Whether such additional procedural requirements can be imposed by a court without express provision in the organic statute? Can the courts still utilize common-law authority to require particular procedures in agency proceedings? The Court made clear that, while agencies were free to adopt additional procedures voluntarily, courts were not authorized to require agencies to use the courts’ notion of appropriate procedures. Except to the extent that the Constitution or other statute required otherwise, generally the APA was intended to occupy the field with respect to required administrative procedure. - Nova Scotia: whether agency followed APA and - Once the court determines that an agency is following APA procedures and its organic statute, it has to back off. It cannot add procedural requirements. Was this formal or informal rulemaking? Informal. Notice and Comments only requirements. Agency went beyond informal procedures. What procedures did the agency use? - notice of rulemaking and hearing - written comments - oral hearing with opportunity for questions by Commission but no crossexamination - supplemental written comments - no discovery or cross-examination

Holding: “In short, nothing in the APA, etc., etc,… permitted the court to review and overturn the rulemaking proceeding on the basis of the procedural devices employed (or not employed) by the Commission so long as the Commission employed at least the statutory minima, a matter about which there is no doubt in this case.” (243) - APA defines notice and comment rulemaking and courts are not suppose to modify. Does the Court limit the role of the DPC in review of rulemaking (see p. 241)? Court hints that there may be a couple of instances in which the DPC would affect the rulemaking proceeding. - deviation from practice might trigger DPC - fake rulemaking: really a rule that only applies to a small # of parties Pure Rulemaking: DP Clause does not apply to rulemaking because of legislative nature. E&E: The Court made clear that, while agencies were free to adopt additional procedures voluntarily, courts were not authorized to require agencies to use the courts’ notion of appropriate procedures. Except to the extent that the Constitution or other statute required otherwise, generally the APA was intended to occupy the field with respect to required administrative procedure. Of course, if an agency by rule voluntarily undertakes to provide additional procedures, a court can require the agency to follow its own rules until it amends or repeals them. Must an agency observe a procedure mandated by Congress tat exceeds the general requirements of the APA? Yes. Congress can require and has required agencies to observe procedures in excess of those set forth in the APA. GENERIC RULEMAKING REQUIREMENTS Regulatory Flexibility Act: agency must publish a flexibility analysis discussing potential compliance difficulties (e.g., paperwork) associated with new rule, particularly for small businesses. Requires an agency to public an initial regulatory flexibility analysis when it publishes a notice of proposed rulemaking and a final regulatory flexibility analysis when it publishes a final rule. Unfunded Mandates Reform Act – agency imposing lots of costs on private and state level actors (federal government making a rule and then making the local/state pay for it) - produce written statement on costs/benefits of “significant regulatory action’ (>$100million) - adopt least burdensome option that achieves objective or explain why not

E. MUST AN AGENCY PROMULGATE RULES? SEC v. CHENERY CORP. (CHENERY II) Remains the leading case on retroactivity in administrative law. It states that administrative agencies can give meaning to statutes through adjudication, and apply them retroactively, even if the rules applied were not announced previously. It is blackletter law that the decision whether to make policy by adjudication rulemaking, assuming the agency has the statutory authority to use either, is a decision to be made by the agency it its informed discretion. Agency has Discretion to Choose how it will Proceed/Choice of Rule-Making or Adjudication within informed Discretion of the Agency: Problems may arise in a case which the administrative agency could not reasonably foresee, problems which must be solved despite the absence of a relevant general rule. Or the agency may not have had sufficient experience with a particular problem to warrant rigidifying its tentative judgment into a hard and fast rule. Or the problem may be so specialized and varying in nature as to be impossible of capture within the boundaries of a general rule. Two key principles – Holding: - Absent a specific congressional mandate, agencies generally have discretion to decide whether to proceed by rulemaking or adjudication. - In an adjudication, the SEC may announce a new standard based on its experience and the broad powers conferred in its organic act and apply the standard to the party or parties before it. [An agencym may announce a new, gap-filling interpretation of its organic law (or, presumably, of its own regulations) in an adjudication and apply it to the party or parties.] If the SEC essentially announced a new ‘rule’ in Chenery II, why couldn’t they have just done a rulemaking? Rulemaking: would not have applied until after this case; would not have applied retroactively. SEC could only step in and adjudicate the matter in order to hold the parties to the conclusion. NLRB v. BELL AEROSPACE Facts: Under the National Labor Relations Act, “managerial employees” do not receive the protections afforded “employees,” including the right to unionize. A company refused to bargain collectively with “buyers” at one of its facilities, maintaining that they were managerial employees and therefore could not be a union. On a petition by a labor union for a representation election, the National Labor Relations Board (NLRB) held that the buyers employed by respondent company constituted an appropriate collectivebargaining unit and directed an election. The NLRB stated that even though the buyers might be "managerial employees" they were nevertheless covered by the National Labor Relations Act (NLRA) in the absence of any showing that union organization of the buyers would create a conflict of interest in labor relations. Subsequently the buyers voted for the union, and the NLRB certified it as their exclusive bargaining

representative. The company refused to bargain, however, and was found guilty of an unfair labor practice and ordered to bargain. Bell Aerospace’s Argument: representation should be denied because the buyers’ authority to commit the company’s credit, select vendors and negotiate purchase prices would create a potential conflict of interest between the buyers as union members and the company. I: can they be managerial and still employees? Held: 1. Congress intended to exclude from the protections of the NLRA all employees properly classified as "managerial," not just those in positions susceptible to conflicts of interest in labor relations. This is unmistakably indicated by the NLRB's early decisions, the purpose and legislative history of the Taft-Hartley amendments to the NLRA in 1947, the NLRB's subsequent construction of the Act for more than two decades, and the decisions of the courts of appeals. Pp. 274-290. 2. The NLRB is not required to proceed by rulemaking, rather than by adjudication, in determining whether buyers or some types of buyers are "managerial employees." Pp. 290-295. (a) The NLRB is not precluded from announcing new principles in an adjudicative proceeding, and the choice between rulemaking and adjudication initially lies within the NLRB's discretion. SEC v. Chenery Corp., 332 U.S. 194; NLRB v. Wyman-Gordon Co., 394 U.S. 759. P. 294. (b) In view of the large number of buyers employed in manufacturing, wholesale, and retail units, and the wide variety of buyers' duties, depending on the company or industry, any generalized standard would have no more than marginal utility, and the NLRB thus has reason to proceed with caution and develop its standards in a case-by-case manner with attention to the specific character of the buyers' authority and duties in each company. P. 294. Why does the Court say it is alright for the NLRB to use adjudication rather than rulemaking when deciding whether buyers are “employees” under NLRA? Chenery said that agencies could make rules or adjudicate, if they have power to do both. Also, adjudication is a better answer in this situation because there are all different types of buyers. Is it good policy for agencies to have a choice whether to proceed by adjudication or rulemaking? Case–by-case vs. adjudication. - Why do we need a Labor Relations Board? Bargaining power differential between managers and employees.

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Adjudication: The Board can decide what is fair on a case-by-case basis. Also, the employer has to justify the policy and labor is given the opportunity to cross-examine the employer. Labor is given a voice in adjudication. Adjudication is more fitting to the act itself: Board as an expert is more able to achieve the purpose of the Act.

IF you need to distinguish Bell Aerospace in a future case in order to attack an agency’s decision to use adjudication to impose a “new” standard on your client, how would you do it? - Abuse of discretion (i.e., agency based discretionary decision to proceed by adjudication on improper grounds) [cf. Overton Park] - Good-faith reliance plus detriment (e.g., fine for conduct in reliance on prior agency order). At one point, the agency says it is OK and then they change the game so that you are guilty of doing exactly what the agency allowed. NLRB v. Wyman-Gordon: In Excelsior, NLRB announced a general requirement but did not apply it to parties. In Wyman-Gordon, NLRB tried to apply the requirement announced in Excelsior as a rule. An agency may not avoid procedureal requirements for rulemaking by announcing a standard of conduct in an adjudicative proceeding if the standard of conduct is not applied to the very parties to the adjudication. Two Key Points from SC opinion: - APA does not permit promulgation of “rule” via adjudication (can only make rules through rulemaking). Best that the agency announces the rule in a prior adjudication and then later adopt the rule in the adjudication. - Remand necessary when agency relies on improperly promulgated rule. F. AVOIDING ADJUDICATION THROUGH RULEMAKING HECKLER v. CAMPBELL Under SSA, for a person to be entitled to disability benefits, Secretary of HHS must find - medically determinable physical or mental impairment AND - inability to engage in substantial gainful activity anywhere in national economy in light of impairment, age, education and work experience. In early 1980s, HHS was dealing with 2.3 million claims for disability benefits per year. More than 250,000 such cases per year resulted in administrative hearings after an initial denial of benefits. Consequently, HHS looked for ways to streamline the system and avoid repetitive elements in hearing. New regulation simplified determination whether individual is able to engage in substantial gainful activity – how? - First cut: unable to work or able to perform old job = no benefits - Then: use matrix of four categories and multiple subcategories to determine availability of work o Physical ability o Age

o Education o Work experience Regulation determines whether significant # of jobs exist in national economy for people with various combinations of factor in matrix. No requirment for listing specific types of jobs. SC: if rule is valid and applies to your case, then you do not have a due process claim and you are screwed. Regulation provide that the rules will only be applied only when they describe a claimant’s ability and limitations accurately. Due process not implicated because process granted during rulemaking (Bi-Metallic – large #s of people affected). SC: said that “[w]here the statute expressly entrusts the Secretary with the responsibility for implementing a provision by regulation, review is limited to determining whether the regulations promulgated exceeded the Secretary’s statutory authority and whether they are arbitrary and capricious.” The court decided that even where an agency's enabling statute expressly required that it hold a hearing, the agency could rely on its rulemaking authority to determine issues that didn't require case-by-case considerations. The court held that the Secretary’s reliance on the guidelines were not inconsistent with the Social Security Act, or that they were arbitrary and capricious. G. MUST AN AGENCY ADHERE TO ITS RULES? SAMEENA v. U.S. AIR FORCE R: Where a prescribed procedure is intended to protect the interest of a party before the agency, “even though generous beyond the requirements that bind such agency, that procedure must be scrupulously observed.” Holding: The FAR states unambiguously that such a hearing “shall” be afforded if genuine factual disputes arise. Accordingly, we conclude that the Air Force violated the appellants’ constitutional right to due process in failing to comply with binding regulations and that the appellants are entitled to such a hearing on remand. What is the source of the principle that an agency must act in accordance with its own rules? Due Process, and thus Constitutional, issue. SC did not go to the Federal Acquisition Regulation. Rule of law issue – our government has rules and you must follow rules. Final: Once a regulation is in place, you have to follow the regulation. Other Questions prompted by Sameena Is an agency required to follow its own SUBSTANTIVE regulations when making decisions about particular parties in particular cases? [Cf. Warder v. Shalala re interpretive rules] It matters which way the interpretation comes out. Once there is a rule of law, the agency has to follow it.

CHAPTER 5: JUDICIAL REVIEW A. SCOPE of REVIEW of FACTS UNIVERSAL CAMERA CORP. v. NLRB What is the proper scope or standard of review according to the Court? Where does it come from? ‘Substantial evidence’ standard that comes from the Taft-Hartley Act. APA §706: The reviewing court shall 2) hold unlawful and set aside agency action, findings, and conclusions found to be… E) unsupported by substantial evidence in a case subject to sections 556 and 557 (formal adjudications and rulemakings) of this title or otherwise reviewed “on the record” of an agency hearing provided by statute; In making the foregoing determinations, the court shall review the whole record… Not formal = “arbitrary and capricious” Judicial Interpretations of Substantial Evidence - “Substantial evidence…means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” - Substantial evidence “must do more than create a suspicion of the existence of the fact to be established. It must be enough to justify, if the trial were to a jury, a refusal to direct a verdict when the conclusion sought to be drawn from it is one of fact for the jury.” Issue: must the reviewing court assess whether the agency’s decision is supported by substantial evidence upon the record considered as a whole? Holding: Yes. The Wagner Act’s reference to evidence means ‘substantial evidence.’ It’s more than a mere scintilla. It means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. It must be sufficient to justify refusal of a directed verdict. Congress as embraced the “upon the record as a whole” language. The lower courts must assume more responsibility for the reasonableness and fairness of agency decision-making than they have done. Must use “substantial evidence on the record as a whole” standard. Hearing examiner’s findings are neither conclusive nor should they be ignored. It was important to define what was to be included in the record for review—the hearing examiner’s findings or not? SC: that “old” interpretation of “substantial evidence” no longer applies. Substantial evidence USED TO mean if any evidence could be produced to support, then decision stood. However, when Congress added “on the whole record” the bar was raised. NOW, “substantial evidence” means that negative evidence to the determination must also be weighed into the determination of whether the supporting evidence is substantial. Case remanded to 2d Cir. to accord the hearing examiner’s findings the weight they

“reasonably command” in determining whether the NLRB’s decision to overturn is supported by “substantial evidence.” According to the Supreme Court, should the agency defer to the hearing examiner? No. Appellate deference remains with the NLRB under substantial evidence standard. NLRB is not required to defer to the hearing examiner. But the hearing examiner’s findings of fact are part of the whole record. In determining substantial evidence, the Court must look at what the hearing officer decided. Does it depend on the nature of the issue the hearing examiner was considering? Hearing examiner: credibility of witnesses; When it comes to demeanor evidence, more weight to the hearing examiner. Is ‘substantial evidence’ review more or less deferential than ‘clearly erroneous’ review? Why? ‘Substantial evidence’ is more deferential than clearly erroneous. NLRB, unlike a trial court, has expertise and policy authority. Trial court (fact finder) being reviewed by appellate court: clearly erroneous standard Trial court is not an expert fact finder when compared to an agency. Agencies = experts in the field. Trial court does not make policy. Sliding Scale of Judicial Deference: High to Low No review (complete deference) Review of jury findings Substantial evidence Clearly erroneous De novo review (no deference) What is the scope of review of facts in cases not subject to APA §§556 & 557 or similar language in the organic act providing for “substantial evidence” review? “Substantial evidence” for factual determinations informal rulemaking and adjudications only. §706: judicial review of factual determination in an informal setting, the court applies the “arbitrary or capricious” standard. Have to look at the whole record no matter what kind of proceeding. B. SCOPE of REVIEW of LAW CABINET for HUMAN RESOURCES v. JEWISH HOSPITAL HEALTHCARE SVCS. I: whether the lower court erred in concluding that the addition of a sixth cardiac catheterization lab does not constitute “the addition of a health service.” Reviewing court not bound by administrative body’s interpretation of a statute. - Based on plain language, the addition of a health service necessarily connotes that the health service be one which is new to the facility.

Holding: Jewish Hospital is merely increasing the quantity of cardiac catheterization labs and, to our knowledge, is not adding to, or even changing, the scope of services it already provides. Judges interpret the law, not an agency. Purpose of the judiciary is to interpret the law – Marbury v. Madison. Should an appellate court defer to a trial court’s determination that an agency’s decision is supported by substantial evidence in the record? No. TC is making a legal determination (legal finding) that there is substantial evidence, not actually a finding of fact. Therefore, the appellate court can review the legal issues de novo. Appeals from agencies usually go directly from the agency to the appellate court. SKIDMORE v. SWIFT & CO. I: This case involves an interpretation made by the Administrator of the Wage and Hour Division of the Department of Labor as to whether the time firemen spent sleeping at the firehouse constituted time on the job for purposes of overtime pay. Court’s description of how it would view an agency interpretation: “We consider that the rulings, interpretations and opinions of the Administrator under this Act, while not controlling upon the courts by reason of their authority, do constitute a body of experience and informed judgment to which courts and litigants may properly resort for guidance. The weight of such a judgment in a particular case will depend upon the thoroughness evidence in its consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors which give it power to persuade, if lacking power to control.” Agency interpretation not binding on the court, but can be persuasive on the court. Court can look to the agency’s interpretation for guidance. How do we know it is a legal issue? No dispute about the facts. Only Q is about whether they should get paid. For legal questions, we look for answers in the interpretations of the organic act, the legislative history, judicial precedent, similar statutes… What theory of “deference” can we infer from the weight-determining factors that the Court lists? Agency can be persuasive = persuasive authority. Skidmore deference is predicated on the idea that there are factors to believe that the agency’s interpretation of the law is correct. Is the Court’s approach consistent with Marbury? Still saying what the law is, but the agency is offering persuasive information. Court being persuaded but still in the driver seat. Why give greater weight to agency interpretations that are consistent over time? Congressional silence in a long line of consistent agency decisions = acquiescence to the decisions. Consistency seems to make a difference under Skidmore.

Should a court give greater weight to agency interpretations that are more contemporaneous with the passage of a statute? Yes. Why? Agencies are in the room when the law is being drafted. Even an agency created in a statute still has the earliest snapshot of the Congressional enactment. Insight into Congress’ purposes and changes in the law are often because of an agency request. Appeals from agencies usually go directly from the agency to the appellate court. CHEVRON v. NRDC “Chevron two-step”: The first step is to determine whether the statutory language being interpreted is ambiguous, or whether the meaning of the provision is clear using traditional tools of statutory construction. If the meaning of the provision is clear, that is the end of the matter, and the court announces the clear meaning of the statute. If, however, after using traditional tools of statutory construction, the meaning of the provision cannot be deemed clear, bur rather remains ambiguous, then the court goes to the second step. The second stop is to determine whether the agency’s interpretation is reasonable or permissible, or if the interpretation is outside the range of ambiguity in the provision. If the agency’s interpretation is reasonable or permissible, the court upholds the agency’s interpretation, even if the court does not believe it sis the best interpretation. Why do we defer at the second step? - Agency has certain types of expertise (with experience from looking at the issues) - Delegation from Congress - Overall quality of decision making - Policy and politics: rather the agency make the public policy choices Theory behind Chevron: If a statute directly addresses an issue, then Congress had made law on the issue that the court enforces without regard to what the agency thinks. However, if the statute does not directly address an issue, then Congress is deemed to have delegated the power to make the law on that issue to the administering agency, leaving the agency in its expertise the assessment of the wisdom of different policy choices and the resolution of competing views of the public interest. The court gives effect to that legislative judgment as well, ensuring that the law the agency makes is within the scope of the delegated power – within the range of ambiguity in the statute. Under Step 2, does it matter whether Congress expressly delegated decision-making authority to the agency? Implicit gap-filling function: a court may not substitute its own construction of a statutory provision for a reasonable interpretation made by the administrator of an agency. Even no express delegation, you still get Step 2 Chevron deference. Congress set up agencies for this reason.

Does an agency need to be consistent in its interpretation to warrant deference under Chevron? No. The inconsistent interpretation just needs to based on good reasons and not be arbitrary or capricious. Should Chevron deference apply: - To an agency’s constitutional interpretation? No. - To an agency’s interpretation of another agency’s organic statute? No. - To an agency’s interpretation of the APA? No. APA arguably limits agency’s power to interpret. - To an agency’s interpretation of whether statutory language triggers the requirement for formal adjudication under APA §554? Agency might have authority under Chevron to interpret the organic statute, but the court ultimately deciding whether it triggers the requirements of the APA. MCI TELECOMMUNICATIONS CORP. v. AT&T CO. I: whether the Commission’s decision to make tariff filing optional for all nondominant long-distance carriers is a valid exercise of its modification authority. Debate: definition/interpretation of “modify any requirement” in 203(b)(2) Not a modification: what we have here, in reality, is a fundamental revision of the statute, changing it from a scheme of rate regulation in long-distance common-carrier communications to a scheme of rate regulation only where effective competition does not exist. Majority: “modify” is only a slight change. Permitting them to get rid of the rateregulations would throw away the whole statute. Chevron Step 1: “modify” means modify and not change. Majority sees this case as a Chevron step 1 case. Dissent: law is not clear (ambiguous) and therefore, under Chevron the agency had the authority to choose a reasonable interpretation. Policy argument for not wanting delegation: Scalia wants to backtrack on the Chevron assumption that delegation did occur unless it is clear that it did not. Scalia wants us to now have to have a conversation about whether Congress delegated authority. Seems that there is a little break from Chevron. Interesting that this move by Scalia opens the door to whether Congress did or did not delegate the authority. Foreshadow to Mead. Is Congress adept at revising major regulatory regimes and making hard new policy choices? Lots of situations where Congress will not step-in and act. If Congress is not doing anything, argument that agency needs flexibility in order to respond to changing circumstances. Is this an argument for using Chevron Step 1 sparingly? Once court has interpreted under Step 1, there is no flexibility because the court has deemed the statute clear. On smaller issues, it is better for the court to err on the side of ambiguity.

UNITED STATES v. MEAD HOLDING: We hold that administrative implementation of a particular statutory provision qualifies for Chevron deference when it appears that Congress delegated authority to the agency generally to make rules carrying the force of law, and that the agency interpretation claiming deference was promulgated in the exercise of that authority. Ways to Show Delegation of Authority: Delegation of such authority may be shown in a variety of ways, as by an agency’s power to engage in adjudication or notice-andcomment rulemaking, or by some other indication of a comparable congressional intent. Court is not going to apply Chevron unless the agency has delegation from Congress under it organic statute to make rules with the fore of law. Delegation and the agency’s action is within informal and formal rulemaking and formal adjudication. According to Mead, when doe s Chevron deference apply? “We hold that administrative implementation of a particular statutory provision qualifies for Chevron deference when it appears that Congress delegated authority to the agency generally to makes rules carrying the force of law, and that the agency interpretation claiming deference was promulgated in the exercise of that authority.” Example: For example, if a statute authorizes an agency to adopt regulation to carry out a program, and the agency adopts legislative rules to implement the program – precisely the situation in Chevron itself – then the Chevron analysis would apply to those rules. Do both the majority and Justice Scalia agree that the Chevron rule is essentially a canon of construction? Interpreting Congress’ will? Yes, both see Chevron of a canon of construction. Court imposed system for interpreting the will of Congress. 3 tiers of Chevron decision - Clear statute: no deference - Ambiguous statute, reasonable interpretation: deference (Mead deals with these decisions; court gets to decide.) - Ambiguous statute, unreasonable interpretation: no deference Does this mean that Chenery II is effectively out the window? Chenery: agency discretion to choose rulemaking or adjudication. Mead now seems to stack the deck in benefit of greater formality so that you ensure that you receive Chevron deference. The agency would choose informal rulemaking over informal adjudication. Not the force of law = not entitled to Chevron deference Skidmore still applies to informal adjudications (interpretive rules, ruling letters, general statements of policy): Just because they are not entitled to Chevron deference, however, did not mean that they are not entitled to any deference. The Court said in Mead: “The fair measure of deference to an agency administering its own statute has been understood to vary with circumstances, and courts have looked to the degree of the agency’s care, tis

consistency, formality, and relative expertness, and to the persuasiveness of the agency’s position. The approach has produced a spectrum of judicial responses, from great respect at one end, to near indifference at the other. - Here, according to the Court, “there is room at least to raise a Skidmore claim…, where the regulatory scheme is highly detailed, and Customs can bring the benefit of specialized experience to bear on the subtle questions in this case.” Unlike the second step of Chevron, where Chevron strong deference comes into play and courts are to accept any reasonable or permissible agency interpretations, Skidmore deference still leaves to courts the determination of what is the best interpretation of an ambiguous statutory provision. Effect of Barnhart on Mead? Need flowchart on questions that Mead adds to Chevron analysis C. DISTINGUISHING ISSUES of FACT and LAW CAMPBELL v. MERIT SYSTEMS PROTECTION BOARD – come back later

Violates the Hatch Act to run as an independent and then seek the endorsement of the democratic ticket. (where subsidiary facts are unsupported or erroneous, reviewing court must ask whether the agency would have reached the same result absent the impermissible findings)
“balancing considerations of judicial economy, comparative institutional advantage (e.g., the relative expertise of agencies and relative non-expertise of juries vis-à-vis judges), and constitutional concerns (e.g., the separation of powers in administrative appeals, and the right of trial by jury in actions at law) against the effect of appellate deference on consistency and uniformity in the law” in determining whether to classify issue as law or fact for purposes of judicial review of agency decision. D. SCOPE OF REVIEW of EXERCISE of DISCRETION CITIZENS TO PRESERVE OVERTON PARK v. VOLPE Transportation argued that his decision to build a highway through a city park was not subject to judicial review because it fell into the "committed to agency discretion" exception. Rejecting this argument, the Court held that the Secretary's decision had not been "committed to agency discretion," and therefore did not escape judicial review. Specifically, the Court pointed to the clear statutory language governing the use of public parkland as evidence that the Secretary did not enjoy unfettered discretion over the placement of the highway. Moreover, the Court explained that section 701(a)(2) is "a very narrow exception ... applicable in those rare instances where `statutes are drawn in such broad terms that in a given case there is no law to apply'." - Specifically, the Court pointed to the clear statutory language governing the use of public parkland as evidence that the Secretary did not enjoy unfettered discretion over the placement of the highway.

Under APA §701, “agency action that is committed to agency discretion by law” is not subject to judicial review. So why did the court conclude that this decision was reviewable (i.e., not “committed to agency discretion by law”)? Court said that this is a very narrow exception that is only applied when there is no law in place to apply. Congress has told court, agency, public about the process that should be fulfilled to make these sorts of decisions (“unless 1) there is no feasible and prudent alternative to the use of such land, and 2) such program includes all possible planning to minimize the harm.”). Because Congress told Secretary in the organic statute what to think about in applying the discretion, there is law to apply. Why did the Court reject substantial evidence review? Not an issue of fact. Only apply “substantial evidence” during formal rulemaking and formal adjudication. So what standard did the Court apply? Arbitrary and capricious standard (applies to everything else): §706: The reviewing court shall 2) hold unlawful and set aside agency action, findings, and conclusions found to be – a) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law What purpose is served by a court’s review of discretion under the arbitrary and capricious standard? Defer to agency’s discretion, but the court wants to make sure that it is using the discretion properly. Want agency to follow will of Congress and to support its decisions with reasons. Reasons have to be routed in the factors that Congress established. What inquiries does the Court require when reviewing the Secretary’s discretionary action? 1) Did the Secretary act within scope of authority? (properly construed authority?; subjective belief that no other feasible routes?) 2) Was the Secretary’s action arbitrary/capricious – i.e., was the decision based on consideration of relevant factors and was there a clear error of judgment? (do the agency’s reasons make sense? Based on proper factors and considerations?) 3) Did the Secretary follow procedural requirements? In this case, the Act did not specify a procedure so there is no procedural inadequacies. Court described arbitrary and capricious as a substantial inquiry, a thorough, probing, indepth review, and a searching and careful inquiry into the facts. More specifically, it said that the court must consider whether the decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment. MOTOR VEHICLE MANUFACTURERS’ ASSN. Here, the Court found that the agency had failed to consider an important aspect of the problem: the alternative of requiring airbags instead of allowing manufacturers the option of providing passive belts. The failure to consider this alternative was viewed arbitrary and capricious.

What scope or standard or review is applied and where did it come from? Arbitrary and capricious standard from §706(b)(2) What issues will the Court examine to determine whether an agency’s action was arbitrary or capricious (p. 527)? - Whether they relied on factors Congress wanted them to consider. (Did the agency consider factors that Congress did not want it to consider?) - Did the agency fail to consider an important factor (as defined by Congress). Ignored a factor or more defined by Congress? - Did the agency present an explanation that is inconsistent with record? Has to be a coherence test: evidence leads to conclusion. - Did the agency give a wholly implausible explanation? The problem: this modification is not justified because it deviates from the past without any explanation. Agency will not extend their necks as far because of the roadblocks that are put up when the agency later wants to alter the rule. The Court is not to substitute its judgment for that of the agency. Nevertheless, the agency must examine the relevant data and articulate a satisfactory explanation for its action including a ‘rational connection between the facts found and the choice made.’ Normally, an agency rule would be arbitrary and capricious if the agency has relied on factors which Congress has not intended it to consider, entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise. Was the agency’s rejection of the “airbag only” option arbitrary and capricious? Why? No reason for why they rejected the airbag idea after they had found that it would be beneficial. Complete absence of explanation. Pushed this into either: inconsistent with record or no plausible explanation. F. CAUSE of ACTION, JURISDICTION, REVIEWABILITY APA §701(a) Two broad exclusions from application of APA judicial review provisions - Statute precludes review (Johnson & Bowen) - Action committed to agency discretion by law (Webster) APA §702 Statutory standing (1st sentence) - Suffered legal wrong (Chicago Junction, Alabama Power) - Adversely affected (FCC v. Sanders Bros.) APA §703 - Proper form of action and judicial forum are those specified by statute or, absent statute, form may include request for injunction, mandamus, or habeas corpus brought in competent court (1st sentence).

- Identifies proper Ds in judicial review brought under APA (2d sentence). - Authorizes review in enforcement actions, except where statue provides exclusive alternative (last sentence) APA §704 - Defines actions reviewable, which fall into two categories: o Action made reviewable by statute o Final agency action for which there is no other adequate remedy in court - Indicates when preliminary agency actions are reviewable (Socal) - Last sentence defines when finality arises for purposes of judicial review of agency decision-making (SoCal, Darby). APA §§705-706 - 705: Agency may postpone effective date of action pending judicial review where justice requires; courts also may postpone effective dates and preserve status quo. - 706: Scope of Review - Arbitrary & capricious (§706(2)(A)) - Contrary to constitution (§706(2)(B)) - Unsupported by substantial evidence Johnson v. Robison
Draftee P awarded conscientious objector status (I-O) and performed alternative service then applied for educational benefits available to vets. VA denied benefits on ground that statute provides benefits to vets but not conscientious objectors. P brought suit claiming exclusion of COs from the benefits was unconstitutional denial of 1st and 5th am rights. VA argued that § 211(a) restricts judicial review and prohibits court from ruling on constitutionality of statute. Held: Review must be permitted on constitutional issues. Neither the text nor the scant legislative history of the statute provides “clear and convincing” evidence of congressional intent required by this CT before a statute will be construed to restrict access to judicial review. On merits, statute violates 5 th Am.

Bowen v. Michigan Academy of Family Physicians Facts: HHS Regulations for Medicare Plan B provided different reimbursements for board certified and non-certified family physicians performing same procedures and lumped latter together with podiatrists, chiropractors, and dentists. Non-certified physicians brought action claiming that classification irrational and contrary to organic statute. Government argued that “no review” provision (42 USC §1395ff) precludes judicial review of the regulatory distinction. DC found judicial review not precluded and ruled in favor of Ps on statutory claim; court of appeals affirmed. Issue: Whether Congress intended to bar judicial review of regulations promulgated under Part B of the Medicare program? - What does Congress have to do to overcome the presumption that administrative decisions are reviewable? Congress has to specific (express) language, specific

legislative history that is a reliable indication of Congress’ purpose, and legislative scheme of congressional intent/context. - clear and convincing evidence - Could Congress constitutionally have barred review of regulations governing the method for determining reimbursement of Medicare benefits? Yes. Congress’ authority to limit the procedure is almost unlimited by the Constitution. (Cf. Crowell v. Benson). - Assuming the issue is whether or not rule is valid under the Act, Congress could preclude review [or shift to Art. I review]. - NB: the statute didn’t precisely, expressly preclude review. You don’t always win by showing that the statute didn’t expressly preclude judicial review  you can add legislative history, language of the statute, etc to get to the clear & convincing (and this is a high standard) evidence as to whether or not Congress precluded judicial review. Ct also won’t necessarily infer preclusion to say that if you grant review under one part of the statute that you necessarily precluded it under another part of the statute. - Is the presumption against statutory preclusion of judicial review stronger when purely legal issues are involved? Why? - Facts: administrative agency is the expert in the facts - Legal Qs: experts in the law is the judiciary. In short, yes, ct likely to look harder if review has been precluded when a purely legal question is involved (this was the case, here). Webster v. Doe: APA § 701(a): This chapter applies, according to the provisions thereof, except to the extent that – (1) statutes preclude judicial review; or (2) agency action is committed to agency discretion by law. Distinction between §§701(a)(1) and (a)(2): (a)(1) is concerned with whether Congress expressed an intent to prohibit judicial review; subsection (a)(2) applies “in those rare instances where ‘statutes are drawn in such broad terms that in a given case there is no law to apply.’” (§701(a)(2): review is not to be had if the statute is drawn so that a court would have no meaningful standard against which to judge the agency’s exercise of discretion.) The CIA had fired an employee when it discovered the employee was a homosexual. The employee sued, alleging the firing was unlawful under the National Security Act of 1947 and was unconstitutional. The Act stated that the Director of Central Intelligence “may, in his discretion, terminate the employment of any…employee of the Agency whenever he shall deem such termination necessary or advisable in the interests of the US.” The Court found that this language “fairly exudes deference” to the Director. It expressly states that the decision is in “his discretion”; it does not say termination is only allowed when termination is necessary or advisable, but allows termination when the Direct “deems” it necessary or advisable. Moreover, the statute relates to national security matters in which deference to the agency is most appropriate. Therefore, the Court found that the termination decision was committed to the agency’s discretion by law, so judicial review of his claim of unlawful termination was not allowed. However, the constitutional claim was allowed. After all, Congress could not grant t Director the discretion to violate the Constitution. Although the statute might not constrain the Director’s discretion, the Constitution necessarily did.

Held: In so far as Doe claiming constitutional right to challenge survives (because there’s no CLEAR evidence that Congress prohibited judicial review of constitutional claims) but other claims regarding Director’s discretionary termination under 102(c) precluded by statute. Note on Heckler v. Chaney: Question Are decisions made by the FDA not to exercise enforcement authority over the use of drugs precluded from judicial review by Section 701(a)(2) of the Administrative Procedure Act, 5 U.S.C. Section 501 et seq. (APA)? Conclusion Yes, they are presumptively unreviewable. Refusals of administrative agencies to exercise enforcement authority involve a complicated balancing of factors, including agency allocation of scarce resources, which are not suitable for judicial review. Thus, they are presumptively "committed to agency discretion by law" under Section 701(a)(2). This presumption may be rebutted where the substantive statute has provided guidelines for the agency to follow in exercising its enforcement powers. In the instant case, the presumption of unreviewability was not overcome by the enforcement provisions of the FDCA. The FDCA's prohibition on "misbranding" of drugs and introduction of "new drugs," absent agency approval, does not supply relevant guidelines. Neither does the FDA's "policy statement" indicating that the agency considered itself "obligated" to take certain investigative actions nor the FDCA's provision that the Secretary need not report for prosecution minor violations of the Act supply relevant guidelines. Today it is settled law that, absent some specific statutory limitation on an agency’s prosecutorial discretion, the decision whether or not to enforce a particular law or rule is committed to agency discretion by law and therefore unreviewable.

G. Standing
Elements of Standing: 1) “injury in fact”: concrete and particularized and actual or imminent 2) causal connection between the injury and the conduct complained of 3) likely that the injury will be redressed by a favorable decision 1. Injury in Fact A. Lujan v. Defenders of Wildlife Injury in Fact Test: party seeking review must be himself among the injured. Injury must be 1) concrete and particular AND 2) actual (now) or imminent (soon) - Word “Imminence”: cannot be stretched beyond its purpose, which is to ensure that the alleged injury is not too speculative for Article III purposes – that the injury is “certainly impending.” Exception to redressibility and injury in fact: When persons allege procedural violations, the normal rules of redressability do not apply. Exception to rule to injuries in fact and redressability when the underlying issue is denial of process. We are going to lower the hurdle on redressiblity when the claim is that the process is not adequate. Have to still show that you suffer or will suffer some injury.

Could the type of injury alleged here be the basis for standing? Yes. - Aesthetic interest. - Also, professional interest (biologists that study crocodiles, environmental agencies whose purpose is to prevent extinction of crocodiles) - Cannot claim general grievance about application of Constitution and laws to fulfill standing requirement. Why shouldn’t the Constitution be read to permit the courts to stop any government action that is illegal? Separation of Powers: President’s power to make sure the laws are obeyed. Democracy: do not want an unelected branch (the courts) to supervise the law. Prudential Standing: prudential standing are requirements that the Court has evolved in its discretion to assure that cases decided by courts are most appropriately decided by courts. Because these requirements are not imposed by the Constitution’s limitation of federal court jurisdiction but by the Court’s discretion, the Court has allowed Congress by statute effectively to overrule or alter the prudential limitations. A. Federal Election Commission v. Akins: Held: The Court found that the Ps suffered a concrete injury in being denied the ability to obtain information about a political action committee that Congress had directed should be made available to voters. Rule: One of the prudential standing limitations is that if an injury is suffered equally by all (or a very large number of people), then courts are not the appropriate institution to prevent or redress the injury. - Statutory Exception: the Federal Election Campaign Act specifically provided that “any person” could file a compliant with the Commission, and Akin had filed a complaint with the Commission requesting to obtain the desired information. The Act also provided that “any party aggrieved” by a Commission denial of its complaint could obtain judicial review of the denial. Note: when Congress overrides a prudential standing requirement, there may be separation of powers issues. For example, Court now allowed to oversee an agency decision, thus we have transferred to the courts the final decision on how to execute the law. Qui Tam Suits: Qui tam – “who as much,” i.e., person sues as much for state as for himself or herself under statute providing bounty. Money bounty for bringing a suit that a state could have brought. - If your view of standing is that the P should “get something” out of the suit, then clearly the P gets something in the qui tam suit – the bounty. If there is no injury, the government can assign the claim or injury to the P. - Yes, Congress can circumvent standing requirement on generalized grievances. But, it seems pretty clear that Congress does not like to assign the government’s claims. 2. Zone of Interests A. Chicago Junction Case Vital interest because they are the competitors of he NY Central. Prior to the date of the order, and while the terminal railroads were uncontrolled by any trunk line carrier, they were all served impartially and without discrimination; and they competed for the traffic on equal terms. - Legal interest: a legal interest exists where carriers’ revenues may be affected

Do the Ps have Article III standing? Explain. Yes. The Court finds that they have standing because of the massive financial injury caused by the action of the ICC (sale to NY Central). Redressability if withdraw order. Also need injury in law: - Injury in fact – Article III/Constitutional standing - Injury in law – prudential standing: have to point to some law that protects you from the injury that you have claimed under Article III. There has to be some law protecting you against the injury that you suffered. B. Alabama Power Co. v. Ickes: Holding on Standing: Injury in Fact/Article III standing: The injury which petitioner will suffer, it is contended, is the loss of its business as a result of the use of the loans and grants by the municipalities in setting up and maintaining rival and competing plants. Injury in Law: No legal or equitable right of the power company had been invaded, and the company, therefore, was without standing to challenge the validity of the administrator’s act. Fact that petitioner will sustain financial loss by reason of the lawful competition is not enough. It is clear that petitioner has no such interest and will sustain no such legal injury as enables it to maintain the present suits. - If no violation of a right, then no action can be maintained. - Right of Competition: Stated in other words, these municipalities have the right under state law to engage in the business in competition with petitioner, since it has been given no exclusive franchise. Key Question: How is Chicage Junction different from Alabama Power? Court needs to look at: what is the provision or area of law that the P is suing under to protect against the injury they claim to have suffered. - There is protection in the law for purported injury: Chicago Junction - There is no protection in the law: Alabama Power. Hypo: A and B are competitors. LMN Corp. loans money to A in violation of LMN Corp’s charter. Loan gives A competitive advantage over B. B cannot challenge the loan because charter not intended to protect B (Alabama Power scenario). C – a shareholder in LMN Corp. – can challenge loan because charter protects C (analogous to Chicago Junction scenario). C. FCC v. Sanders Brothers Radio Station: §402 (Communications Act) allows an appeal to the Court of Appeals 1) by an applicant for a license or permit or 2) “by any other person aggrieved or whose interests are adversely affected by any decision of the Commission granting or refusing any such application.” - Another instance of a private attorney general suit: Private parties are allowed broad leeway to enforce the law. - Very broad statute that provides Ps with both injury in fact and injury in law. - Is it a/the purpose of the Communications Act to protect the competitive interest of the Sanders Bros. P? No. Seems to fall within the AL Power scenario. APA §702: “A person suffering legal wrong because of agency action, or adversely affected or aggrieved by agency action within the meaning of a relevant statute, is entitled to judicial review thereof.” Can you explain how this provision can be read to codify the principles of Chicago Junction, Alabama Power, and Sanders Bros.?

- “Relevant statute” = Sanders Bros: have to look at statute to see what legal interests are protected. - Legal Wrong = person we saw in Chicago Junction and Alabama Power where there was a law on the books that protected the type of injury D. Association of Data Processing Service Organizations v. Camp: Zone of Interests test: requires that a person who brings a case must be within the zone of interests of the statute that the person claims is violated. In cases brought under the APA, the zone of interests test is codified in §702, which creates a cause of action for persons who are “adversely affected or aggrieved by agency action within the meaning of the relevant statute.” Qs to ask: Who did Congress mean to protect, or what interests did Congress mean to protect when it enacted a particular statute? In answering the question, a court is supposed to look at the particular statutory provision alleged to be violated. New Test: Zone of interest protected by statute: The question is “whether the interest sought to be protected by the complainant is arguably within the zone of interests to be protected or regulated by the statute or constitutional guarantee in question.” (purpose argument: is this within the purpose of the statute?) - zone of interest is a prudential requirement Where did the “zone of interests” test come from and is its pedigree sound? Refers to §702 of the APA: grants standing to a person “aggrieved by agency action within the meaning of a relevant statute.” Argument that “aggrieved by” language was suppose to be read more broadly and that it was intended to identify the zone of potential claimants that could come into court. What does “arguably” mean? What about “zone”? Zone of interest test depends on whether you can construct a plausible argument. If you can argue with a straight face that a person has standing, then you will pass the standing threshold. Implications: The P must allege, first, that that she has suffered an injury in fact; and, second, she falls within the zone of interests protected or regulated by the relevant statute. E. Air Courier Conference v. Postal Workers: Merits claim (injury) and standing claim have to be within the same bubble. Summary: The purpose of the Private Express Statutes was to aid the USPS’s revenues so that the USPS could maintain uniform rates and universal service without losing money. Protecting employees’ job security or union membership was not part of the purpose of the Private Express Statutes. The fact that other provisions of the postal laws might have indicated a congressional desire to foster union membership was irrelevant, because in applying the zone of interests test one looks to the provision that is allegedly violated, not some other provision. Zone of Interest Requirement: The Unions must show that they are within the zone of interests sought to be protected through the PES. Specifically, “the P must establish that the injury he complains of (his aggrievement, or the adverse effect upon him) falls within the ‘zone of interests’ sought to be protected by the statutory provision whose violation forms the legal basis for his complaint.” - looks a lot like the old legal interest test - The zone of interests test is an inquiry into whether Congress intended the would-be plaintiffs to be within the zone of interests, which in turn rests on whether Congress intended the statute at issue to benefit the would-be plaintiffs.

A plaintiff who would benefit from enforcement of a statute intended to protect others is not a proper party to bring suit. Air Courier thus represents a fairly stringent limitation on a plaintiff's ability to challenge federal administrative action. F. NCUA v. First National & Trust Company: New Test: the correct test is for a court 1) first to "discern the interests 'arguably . . . to be protected' by the statutory provision at issue," and then 2) to "inquire whether the plaintiff's interests affected by the agency action in question are among them." - look at statute’s interests and then see if the P’s alleged interest is within the statute’s interests - You do not need to look at congressional intent to protect specific class of plaintiffs. Do not ask whether Congress specifically "intended" to benefit the plaintiff, instead discern whether the interests are arguably to be protected by the statute. Rationale: We should not inquire whether there has been a congressional intent to benefit the would-be plaintiff. Even if Congress didn't intend for the statute to protect the banks, one of the interests arguably to be protected by the statute is an interest in limiting the markets that credit unions can serve. G. Summary Legal Interest: need specific statutory phrase (law, etc.) that protects the interest you are asserting. Have to point to some law that protects you from the injury that you have claimed under Article III. Law protecting you against the injury that you suffered. Zone of Interest: interests arguably to be protected by the statutory provision; looking at purpose of statute and then see if client’s interests fall within the interests to be protected. H. Review of Standing Law: Bennett v. Spear Can Congress grant standing regardless of whether a party is within the zone of interest? Yes. Under certain circumstances, you can have a private attorney general claim (“any person injured by government action may sue”) against the federal government. Such a provision in this case. Ps have no difficulty in making the zone of interest argument. But, Congress cannot do anything to override case or controversy. Assuming there is no “private attorney general” (Sanders Bros.) provision authorizing action, where do you look to determine whether a person has standing under the “zone of interest”? Goes back to Air Courier analysis. Look at the interests that the provision was designed to protect and then ask “what interests are the Ps trying to vindicate?” Again we focus on the part of the statute that is the source of the substantive claim. - Have to look at the statute that is the substance of the Ps’ claim. What interests Ps claiming/vindicating? - Look at the interests that the provision was designed to protect based on the statutory language. Are the interest of the statute the same interests claimed by the P?

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H. Ripeness
A. Abbott Laboratories v. Gardner: Basic rationale of ripeness doctrine: prevent the courts, through avoidance f premature adjudication, from entangling themselves in abstrat disagreements over administrative policies, and also to protect the agencies from judicial interference until an administrative

decision has been formalized and its effects felt in a concrete way by the challenging parties. Test for Ripeness: 1) evaluate the fitness of the issues for judicial decision and 2) the hardship to the parties of withholding court consideration. - Fitness: In deciding whether the issues were fit for judicial decision, the Court looked first at the nature of the claims. Because the claims were “purely legal” (whether the rule was beyond the statutory authority of the agency), rather than factual, the case was ready for judicial resolution. Also, an inquiry into whether a final agency action, which it was because the agency had issued a final, legislative rule. - Hardship to Parties: The Court found that there was significant harm in withholding review because of “the very real dilemma” the companies found themselves in: either they must comply with the regulation and forgo review of what they believed was an unlawful regulation, or they must willfully violate the rule and run the risk of serious criminal and civil penalties. Held: Where the legal issue presented is fit for judicial resolution, and where a regulation requires an immediate and significant change in the P’s conduct of their affairs with serious penalties attached to non-compliance, access to the courts under the APA must be permitted, absent a statutory bar or some other unusual circumstance..

B. Toilet Goods Ass’n v. Gardner:
Need to determine preenforcement question first: Court essentially holds that APA established presumption of reviewability in the pre-enforcement context. To negate the presumption, Court will seek evidence (clear and convincing?) that Congress intended to prohibit review in the pre-enforcement setting. Ripeness only available/a question during pre-enforcement actions. Elements of Ripeness 1st Element - Fitness of issue for judicial review 1. Nature of issue [protects court from having to decide cases in the abstract without factual context; the more pure an issue of law, the less the court has to worry about facts] 2. Finality of agency action [protects agency from interference while it is developing policy] 2nd Element - Hardship to parties of withholding review [protects regulated parties from illegal agency action] Application to Toilet Goods from Abbott Labs 1st Element - Fitness of issue for judicial review? 1. Nature of issue: a. CT acknowledges that in both cases, this is really an issue of law –whether agency has exceeded authority – but CT says diff b/c Toilet Goods case the new rule would authorize agencies to enter facilities but it is not necessarily power that will be exercised. CT has no idea how they will use new power. b. However, in Abbott Labs it is clear that the FDA will enforce the rule and the companies will have to go ahead and invest in new labeling. 2. Finality:

a. Technically both decisions by FDA are final agency action, BUT CT looking at finality in diff sense. In Toilet Goods, the whole agency process hasn’t run course – there is still question as to what agency will do with rule in field. b. In Abbott Labs, the CT knows what agency is going to do. The CT has all the facts it needs. 2nd Element - Hardship to parties of withholding review 1. In Toilet Goods, manufacturers do not have to anything until FDA comes knocking on door. 2. In Abbott Labs, Industry has to take action right away, change “primary conduct” immediately. If CT does not act now then Ps in Abbott Labs will suffer irreparable harm.

I. Finality
A. FTC v. Standard Oil Co.: What law makes judicial review depend on finality? APA §704: “Agency action made reviewable by statute and final agency action for which there is no other adequate remedy in a court are subject to judicial review. A preliminary, procedural, or intermediate agency action or ruling not directly reviewable is subject to review on the review of final agency action.” Test for Finality: 1. Is the agency action definitive?: Decision was not definitive, i.e., agency has just started proceedings 2. Has there been a determination affecting rights and duties of the party? (has there been a change in legal status/situation?) - Fact that decision imposes cost of defending against agency claim is not the same as legal force. Distinguish exhaustion from finality: Exhaustion: completing process at FTC on the particular issue; gone through all the processes required; exhausted all agency options. Finality: You have had an agency action is definitive (might have went through first adjudicative process: definitive action and final decision) but still need to exhaust agency options before you can go to court.

Summary of Finality Test: To be final, agency action must - mark the ‘consummation’ of the agency’s decision making process AND - be one by which ‘rights or obligations have been determined’ or from which ‘legal consequences will flow’ Failure to Act: Where an agency is under an equivocal statutory duty to act, failure so to act constitutes, in effect, an affirmative act that triggers ‘final agency action’ review. - 4 factors for reviewing an unreasonable delay claim: - First, the court should ascertain the length of time that has elapsed since the agency came under a duty to act

- Second, the reasonableness of the delay must be judged in the context of the statute which authorizes the agency’s action - Third, the court must examine the consequences of the agency’s delay. - Finally, the court should give due consideration in the balance to any plea of administrative error, administrative convenience, practical difficulty in carrying our a legislative mandate, or need to prioritize in the face of limited resources. J. Exhaustion of Administrative Remedies
A. Myers v. Bethlehem Shipbuilding Co.: Exhaustion of Adminstrative Remedies = prudential/judge-created rule What did the SC hold and why? Rule requiring exhaustion could not be circumvented by Bethlehem. Bethlehem should have went through board hearing first, and by sidestepping the process they avoided the process. Board = final decision. B. McCarthy v. Madigan: Balancing Test: Three circumstances when individual interests outweigh requirement of exhaustion: i. Undue prejudice resulting from potential long delay in admin action or other irreparable harm even if delay not unreasonably long ii. Admin remedy may be inadequate b/c of doubt about whether agency empowered to grant relief requested [e.g. rule statute unconstitutional] iii. Admin remedy inadequate b/c agency is biased or has ruled on issue before it making exhaustion an exercise in futility Requirement that party exhaust administrative remedies is rule of judicial administration subject to congressional intent. Congress can pass statute that eliminates the exhaustion requirement under suits involving that statute. C. Darby v. Cisneros: Reverses the presumption for the need of exhaustion of administrative remedies. §704: “Except as otherwise expressly required by statute, agency action otherwise final is final for purposes of this section whether or not there has been presented or determined an application for a declaratory order, for any form of reconsideration, or, unless the agency otherwise requires by rule and provides that the action meanwhile is inoperative, for an appeal to superior agency authority.” - As written, this sentence only requires a person to exhaust administrative remedies in two circumstances: when expressly required by statute and when an agency requires it by rule and provides for an automatic stay of the agency action pending appeal. Now you do not need to use the balancing test for the exceptions except when Darby does not apply. When does the rule in Darby NOT apply? Very unusual federal cases not covered by APA: committed to agency discretion or Congress specified that judicial review not available. Also, all the state agencies because they are not covered by the APA. No APA = No Darby.

- Then you use the McCarthy test. CHAPTER 4: ROLE of AGENCIES in THREE-BRANCH GOVERNMENT 1. Conforming Agency Practice to Article III A. Crowell v. Benson:

In early cases, the Court approved federal laws that delegated adjudicatory powers to non-Article III entities in 3 main situations. Non-Article III entities could serve as military courts, as territorial courts, and as tribunals for adjudicating “public rights.” Of these 3, the most important one for administrative law purposes is the one authorizing non-Article III entities to adjudicate public rights. The court defined “public rights” in its early cases to mean rights that people had as against the government. Examples: tax disputes, government licenses and Ks, and government benefits. In addition to allowing non-Article III entities to adjudicate public rights, the Court made clear early on that non-Article III entities can serve as “adjuncts” to Article III judges. Historically, courts of equity could farm out certain chores – especially ones related to factfinding – to special masters who were not Article III judges. This adjunct theory permitted non-Article III entities, including administrative agencies, to do factfinding even with respect to “private rights” so long as the legal significance of those factual determinations was subject to determination by an Article III court.

Art. III courts are to adjudicate legal issues Art. I courts may adjudicate factual issues Art. I courts may adjudicate public rights 1. Public right is usually individual vs. gov’t. 2. Private right is usually individual vs. individual. 3. The rationale appears to be that Congress could do same thing on case-by-case basis using so called “private bill” → so if can do it that way then why would court say an Art. III court must be involved in all these disputes. So, Art. III does not really require Art. III courts to be in involved in public rights disputes. Art. III courts must adjudicate private rights 1. W/ private right(s), Art. III court must be involved. 2. Basically Art. III courts get the law and the agency gets the facts. 3. This comes to be known as “adjunct of the court” theory. 4. We are now seeing agencies as a kind of assistant to judiciary in adjudicating cases, agencies are a little bit like juries and special masters. Summary of Art. III Analysis 1. Public  no Art. III problem (Art. I resolution) 2. Private  fact  no Art. III problem (Art. I resolution) 3. Private  law  Art. III problem

- factual determinations made by administrative agencies are final, but any legal determinations are reviewable by court

B. Northern Pipeline Const. Co. v. Marathon Pipe Line: court moved away from the public rights/private rights distinction. In this case, the SC struck down parts of the Bankruptcy Act of 1978 as excessive delegations of adjudicatory powers. The invalidated parts authorized federal bankruptcy judges, who were not Article III judges, to decide certain state-law contract claims

between private parties without their consent and subject to only limited review by Article III judges. These bankruptcy judges had most of the traditional judicial powers, including the powers to hold jury trials and issue writs of habeas corpus. Holding establishes only that Congress may not vest in a non-Article III court the power to adjudicate, render final judgment, and issue binding orders in a traditional K action arising under state law, without consent of the litigants, and subject only to ordinary appellate review. What is the significance under Art III of the fact that a case is based on a private right created by federal statute: - Congress should be able to set up adjudication for the rights it creates, but not for the rights of the constitution or states rights - And that fits with our public rights idea

Limits of Congress’ Power to Extend JD to Art. I Courts: 1. Congress can create adjuncts of the court [Art. I courts] to adjudicate rights it creates 2. BUT it does not have the power to create adjuncts to adjudicate constitutionally-recognized rights and state-created rights. 3. CT has allowed use of adjunct fact-finders even in adjudication of constitutional rights as long as they were subject to sufficient control by an Art. III district court ( Raddatz- magistrate can make recommendations on pretrial motions that court may overrule). 4. Functions of adjunct must be limited in such a way that “the essential attributes” of judicial power are retained in the Art. III court. 5. Concern that there will be “encroachment or aggrandizement” by Congress at the expense of the other branches of gov’t → possibility for this here.

Test:
1. Origin of private right [federal statute or state/common law] 2. Breadth of tribunal’s authority [fact-finding adjunct or court-like]

Private right by federal statute = Article I tribunal can resolve issue Private right by state/common law = Article III courts (Article I court can still fact-find, but Article III has to determine legal issues.) C. CFTC v. Schor: Held: “We conclude that the limited jurisdiction that the CFTC asserts over state law claims as a necessary incident to the adjudication of federal claims willingly submitted by the parties for initial agency adjudication does not contravene separation of powers principles or Art. III.” - limited agency assumption of jurisdiction over common-law counterclaims that does not take any powers away from federal courts and where parties have opted for the agency to hear the case does not violate separation of powers SC identified two separate functions served by Article III. Article III “serves both to protect the role of the independent judiciary within the constitutional scheme of tripartite government and to safeguard litigants’ right to have claims decided before judges who are free from potential domination by other branches of government.” Whereas the first function protects “structural” interests, the second function protects “personal interests.” Balancing Test for whether Article I jurisdiction is proper:

1. the extent to which the ‘essential attributes of judicial power’ are reserved to Article III courts 2. conversely, the extent to which the non-Article III forum exercises the range of jurisdiction and powers normally vested only in Article III courts 3. the origins and importance of the right to be adjudicated 4. the concerns that drove Congress to depart from the requirements of Article III “Traditional Agency Model” 1. Agency deals with particularized area of law [ONLY factor in model raising question about CFTC jurisdiction; not as particularized b/c does bring in some state law, common law claims] 2. Agency orders enforceable only by courts 3. Courts review agency decisions under weight of evidence standard, not more lenient “clearly erroneous” standard. Agency legal rulings subject to de novo review 4. Agency has no power to issue special writs [i.e. habeas corpus, injunctions, etc.] What factors does the majority in Schor find relevant/dispositive? Balancing of - extent to which essential attributes of Art. III courts preserved How does the Court assess the first factor? Crowell (adjunct) and Northern Pipeline (court-like) on a continuum. Scope of legal issues addressed: narrow or broad. Enforcement issues: where is the enforcement power? How much deference for findings of fact from the actual court? - Agency deals with particularized areas. - Agency orders enforceable only by courts. - Courts review agency decisions under weight of evidence standard, not more lenient “clearly erroneous” standard - Agency legal ruling subject to de novo review - Agency has no power to issue - origin of rights to be adjudicated Why wasn’t the state origin of the private right – the second factor – dispositive? Though agencies deal with public rights, all private rights are not created equal. Affect of adjudication on the three branches of government. In this case, this is a permissive forum for the counterclaim. Parties agreed to this forum. Choice of process. - Congressional purpose Congressional intent to modify jurisdiction. Searching look at Congress’ intention. As long as congressional action is in pursuit of a legitimate policy goal that has nothing to do with restricting Article III tribunals, then the act is OK. Summary To determine if the agency is infringing on the power of Art. III courts, look at: 1. Whether the agency has most of the powers of a regular court, or if they only get to deal with a particularized area of the law 2. Whether they can enforce things w/out getting permission of a court first 3. How necessary this power is to their being a useful agency 4. Whether there is still a distinction b/w public and private rights for factual or legal questions? This theory may be dead.

Seventh Amendment and Agency Adjudication Court relied on a broadened concept of “public rights” to define the limits of congressional power to assign causes of action to tribunals (Art. I) in which jury trials are unavailable. SC declared that Congress “lacks the power to strip parties contesting matters of private right to their constitutional right to a trial by jury.” The Seventh Amendment test is the same as the Article III test for whether Congress may assign adjudication of a claim to a non-Article III tribunal. Test: “If a statutory cause of action is not a ‘public right’ for Article III purposes, then Congress may not assign is adjudication to a specialized non-Article III court lacking ‘the essential attributes of the judicial power.’ And if the action must be tried under the auspices of an Article III court, then the 7th Amendment affords the parties the right to a jury trial whenever the cause of action is legal in nature. Conversely, if Congress may assign the adjudication of a statutory cause of action to an non-Article III tribunal, then the 7th Amendment poses no independent bar to the adjudication of that action by a nonjury factfinder.”
Notes on 7th Am a. “In Suits at common law, where the value in controversy shall exceed thirty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury shall be otherwise reexamined in any Court of the U.S. than according to the rules of common law.” b. Admiralty is not included in 7th am. c. Jones & Laughlin (1937) – 7th am does not apply where proceeding “not in the nature of a suit at common law” e.g., statutory proceeding before agency such as NLRB. These kinds of new fed agency rights and claims are somehow different from common law. Not what framers envisioned when they granted 7th am right. d. Curtis (1974) & Atlas Roofing (1977) – 7th am applies to judicial proceedings on causes of action analogous to those at common law i. Statutory civil rights action in fed court ii. Judicial application of civil fines for violation of federal health & safety requirements Does the 7th Am apply to a proceeding before a non-Art. III court that is clearly in the nature of a suit at common law? - Granfinanciera implies ‘no.’ - In any case where 7th am applies, Art. III prohibits trying case in court that fails to meet requirements of Art. III - In any case where Art. III requirement that action be tried in Art. III court, 7th am will apply if action is “legal in nature,”: i.e. analogous to suit at common law. Art. III after Granfinanciera What sorts of cases must be assigned to Art. III court? 1. Govt not a party AND 2. Purely “private right” not closely intertwined with legitimate fed statutory scheme Granfinanciera & Crowell 1. Granfinanciera suggests [in dictum?] that only cases involving “public rights” may be adjudicated in non-Art. III courts and therefore escape 7 th am. This seems to contradict Crowell and Schor

2. But Granfinanciera develops expanded notion of “public rights” that incorporates ‘a seemingly private right’ that is so closely integrated into a public regulatory scheme as to be an appropriate matter for agency resolution…(p.311)

Test under the 7th Amendment: whether the matter at issue involves rights that would have been tried in the law courts of late 18th century England. C. The NonDelegation Doctrine: Congress “delegates” powers to the agency for it to use in dealing with the assigned problem. The constitutional limits on Congress’s authority to delegate certain types of power to administrative agencies make up what is called the “nondelegation” doctrine. 1. ALA Schechter Poultry v. US: Congress gives many agencies the power to make rules that create legal duties. One Q that can arise when Congress has done so is whether a particular agency rule falls within the scope of that agency’s statutory grant of rulemaking power.
Non-delegation Doctrine 1. Art. I § 1 – “All legislative Powers herein granted shall be vested in a Congress of the U.S., which shall consist of a Senate and House of Representatives.” 2. Art. I § 8, par. 18 – The Congress shall have the power “to make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Govt of U.S., or in any Department or officer thereof.” 3. Court takes this provision, which is normally read to spread the authority of Congress, and turns it into limiting the power to Congress alone [no delegation]. Congress does not mean White House, NIRA, ITC, etc.

4. CT does not say that NO legislative authority can be delegated, just that NIRA is unconstitutional delegation b/c it is overbroad. 5. Saying the regs must be fair isn’t good enough [Schechter], but saying the regs should be used to prevent unfairness is sufficiently defined [FTC]. What is an acceptable “delegation” of legislative power under Schechter? Test: The Constitution allows Congress “to perform its function in laying down policies and establishing standards, while leaving to selected instrumentalities the making of subordinate rules within prescribed limits and the determination of facts to which the policy as declared by the legislatures is to apply.” - agencies can make rules and adjudicate (factual determinations and application of rules) matters based on standards provided by Congress - delegation needs an intelligible principle so that the agency has something to follow. The SC has generally interpreted the intelligible principle test to allow Congress to give very broad rulemaking powers to federal agencies. - In this case, Congress has laid down a policy, but it is so sweeping, illdefined, broad that is amounts to too much delegation.

Why procedural safeguards good: - Openness (and accountability) - Expertise in who Congress hires for the agency positions - Whole panoply of adjudicative procedures for formal adjudications (agency not a free actor)

- Judicial review over agency decisions 2. Industrial Union Dept. v. American Petroleum: the delegation doctrine permits Congress to delegate broad regulatory authority to administrative agencies officials. These delegations do not violate the doctrine as long as Congress articulates an “intelligible principle” for the agency of official to follow. The principle may be as general as one that directs the agency or official to regulate “in the public interest.” Although the Court has expressed concern that such broad delegations be accompanied by procedural or other abuse-curbing safeguards, those safeguards typically will be supplied by the APA. Accordingly, the delegation doctrine today will apply only rarely, and even then will usually result, not in the invalidation of a statute, but in a narrow interpretation.
Three functions of Non-delegation Doctrine [Rehny]: 1. Ensures that important social policy choices are made by Cong, the branch most responsive to the people

2.

When delegation may be acceptable (when on its face, it is invalid) 1. Factual background, legislative history, and statutory context provide specificity. Rationale is that to extent court can find specificity in legislative history then appears Congress has made decision, just didn’t phrase well in statute. 2. Pre-existing administrative practice provides context for otherwise vague delegation. Congress had ratified or endorsed pre-existing administrative practice → so Congress has made choice 3. Agency “residual authority” provides context. If, for example, telling Pres to exercise their foreign affairs or military power. Does this even constitute delegation? → may be what Pres empowered to do anyway 4. Rule of necessity applies. Can’t really expect Congress to be specific in cases in which Congress can’t be specific.

Guarantees that Congress provides the recipient of delegated authority with an “intelligible principle” to guide the exercise of the delegated discretion 3. Ensures that courts charged with reviewing exercise of delegated legis discretion will be able to test that exercise against ascertainable standards.

3. Whitman v. American Trucking Association American Trucking concerned a provision in the Clean Water Act that authorizes EPA to promulgate regulations establishing “national ambient air quality standards” (NAAQS or standards) for certain air pollutants. The Act says that each standard should be set at a level “requisite to protect the public health” with an “adequate margin or safety.” Held: The Court held that this provision did not violate the delegation doctrine. The Court explained that the discretion granted to EPA was “well within the outer limits of our nondelegation precedents.” Rule: It elaborated that “the degree of agency discretion that is acceptable varies according to the scope of the power congressionally conferred.” Depends on Effect of Agency Decision: Where the agency power is extremely limited – for example, when Congress empowers EPA to define “country elevators,” which are exempt from certain Clean Air Act provisions – the Act need not provide any intelligible

principle. On the other hand, where EPA regulations may affect the entire national economy, substantial legislative guidance may be necessary. Summary: If Congress enacted a law as broad as Schecter Poultry, the SC would shoot it down. Too broad = no guidance to agencies. Short of no guidance, it would probably survive the non-delegation doctrine. For example, intelligible principle of “public interest” suffices for non-delegation purposes. D. The Legislative Veto 1. INS v. Chadha: Held: the provision violated the Bicameralism and Presentment Clauses. - Those clauses require every bill, before it becomes law, to pass both Houses of Congress and to be presented to the President for approval or veto. Test: Ask if the action is “essentially legislative in purpose and effect” (affects legal rights, duties, or relations of persons outside the legislative branch). If yes, then it requires bicameralism and presentment.
Agencies: When agency is promulgating rules they are exercising quasilegislative or policymaking authority and therefore not subject to presentment and bicameral clauses. Legislative power is delegated to the

executive. When the executive acts under this power, he is acting executively. Since it is the executive, then it is not subject to bicameralism and presentment.
Note on Statutorily Mandated Congressional Review APA § 801-802 i. Agency must report to Congress on new rule before it takes effect ii. GAO must report on “major” rules iii. Effective date of major rule delayed to provide opportunity for congressional review iv. Congress may pass joint resolution of disapproval Joint resolution of disapproval differs from ordinary legislation to undue rule b/c it puts major rule in front of specific committee in charge. Alternate Forms of Congressional Control 1. Sunset provisions is okay b/c subsequent reenactment requires presentment and bicameralism. 2. Narrower delegations of power 3. Budget controls, including riders on appropriations bills - Riders in which Congressmen in the dead of night insert provisions that say Dept of Agriculture must pass new laws labeling all beef whatever – shut off funding on a particular provisions and Agency does not take action on it. 4. Informal contact with Congressional committees. Agencies are constantly interacting with Congressmen, oversight hearings, constituent inquiries. 5. Agencies hate to piss off Congress 6. “Report and wait” requirements in organic laws permitting time for Congress to act - If you adopt a rule in this area, you have to send us a report on it and wait for review - There is danger that this could turn into a legislative veto provision 7. Oversight hearings

Bottom Line - Congress may delegate (quasi-)legislative power to Executive - Congress can control exercise of such power only by further legislative act. Congress must act legislatively when it seeks to control executive control. Act legislatively: bicameralism and presentment. - Formalism sometimes is functional (???). Certain aspects of our federal system that we must defend in their pure forms. Important to preserve basic separation of powers. E. Executive Power to Appoint: The Appointments Clause does not give Congress any power to appoint “officers of the US.” Instead, Article II provides for some officers of the US, called “principal” officers in the case law, to be appointed yb the President with the advice and consent of the Senate. Article II provides for other, “inferior” officers to be appointed by the President alone, the Courts of Law, or the Heads of the Departments. Employees can be appointed by anyone, even Congress. 1. Buckley v. Valeo: When determining what class a position is, look at factors: 1. What duties can they perform? 2. What are the limitations on their powers? 3. Who do they have to report to? Any appointee exercising significant authority pursuant to the laws of the US is an ‘Officer of the US,” and must, therefore, be appointed in the manner prescribed by §2, cl.2 of Article I. What role does the Take Care clause play in the Court’s analysis: 1. Constitution has delegated to Prez the authority to engage in enforcement 2. Prez’s subordinates who engage in this activity are “officers of US,” so the extent FEC is doing enforcement it is Officer of US and must be appointed that way. Reasoning: The Frames generally did not want Congress to have both the power to create offices and the power to fill them. What functions may FEC as structured NOT perform? 1. Agency/Administrative actions: Adjudication, rulemaking (because directly appointed by Congress) 2. Any role reserved for the Executive Branch: enforcement activity Freytag v. Commissioner: Held: Special Trial Judge is an “inferior officer,” and the Chief Judge is a “Head of a Department.” Thus, the appointment was constitutional. Landry v. FDIC: Held: FDIC ALJ is not an officer b/c, unlike the special trial judge in Freytag, the FDIC ALJ had no power to make a final decision. So, they were employees and free to be appointed by any branch. F. Executive Power to Remove 1. Myers v. US: Rule: Congress could not restrict the President’s power to remove an officer whom the President had appointed with the advice and consent of the Seante, if that officer exercised “purely executive” powers. On the other hand, Congress could restrict the President’s power to remove a presidential appointee who exercised quasi-legislative or quasi-judicial powers.

What are the two arguments that the Court puts forward? Why does the Court hold the limit on removal power to be unconstitutional? 1. Unitary executive: Prez is entrusted with the responsibility to execute the laws. He or she needs confidence in subordinates in executing the laws. Has to be able to fire individuals that are doing the Prez’s bidding. 2. Power to remove comes from power to appoint: based on Appointments Clause. Can Congress limit removal authority over inferior officers? Yes Congress can limit dismissal, if Congress has given the appointment power to the Heads of Departments. Congress can limit the firing of officers if they entrust the Department Heads with the original hire authority. 2. Humphrey’s Executor v. US: upheld a federal statute restricting the President’s ability to remove a member of the Federal Trade Commission (FTC), who had been appointed by the President with the Senate’s advice and consent. Basis for Different Result: different powers exercised by the two removed officers. - Myers: Postmaster was a purely executive officer - Humphrey’s: FTC carried out “quasi-legislative or quasi-judicial” powers (the FTC made investigations and reports for Congress, and, in cases involving antitrust violations, it proposed judicial decrees for the courts). “For Cause” Removal: “For cause” restriction on executive removal of quasi-judicial officers. Myers holding does not govern cases involving an officer who occupies no place in the executive department and who exercises no part of the executive power vested by Constitution in the Prez. IN SUM: Whether the power of the Prez to remove an officer is exclusive depends upon the character of the office. Myers involved an officer performing purely executive duties. Humphrey’s involved an officer performing quasi-legislative and quasi-judicial duties. 3. Morrison v. Olson: The case involves a federal statute that authorized “independent counsels” to investigate and prosecute crimes by high-level federal officials. Under the statute, an independent counsel was not appointed by the President with the advice and consent of the Senate. Instead, he/she was appointed by a panel of three federal judges. Argument: Independent counsels were principal officers; they therefore could be appointed only by the President with the advice and consent of the Senate. Since Morrison had not been appointed in that way, her investigation was invalid and Olson could not be held in contempt for refusing to cooperate with it. Held: independent counsels were inferior officers. Acceptable expansion of Congress’s power to restrict executive removal power. Factors for Decision: 1) independent counsels could be removed (though only for specified reasons) by a higher executive official: Attorney General. 2) independent counsels had only certain, limited duties: investigation and prosecution (limited authority and no policymaking). 3) their offices were limited in jurisdiction, reaching only certain serious federal crimes by certain high-level federal officials. 4) offices were limited in tenure; once a particular investigation and any related prosecutions were finished, the independent counsel’s office ended.

“Good Cause” Removal: the Olson Court upheld the statutory “for cause” restriction on the Executive’s removal power. The SC found that the restrictions on removal did not impede the President’s ability to perform his constitutional duty. Review of Congressional Restrictions on the Prez’s Removal of Officials: - whether the restriction impedes the President’s ability to perform his constitutional duties - whether the official whose removal is at stake exercise purely executive powers - whether the official is a principal or an inferior officer Whether the Act is invalid under the constitutional principle of separation of powers? a. Whether the removal restrictions are of such a nature that they impede the Prez’s ability to perform his constitutional duty? i. Held: IC does not interfere w/ Prez’s ability to perform constitutional duties. 1. IC does not perform purely executive function – quasi-judicial 2. IC may be executive officer, but it is an inferior officer. 3. No need for sole removal power. Prez has ample control w/ good cause removal. 4. IC must be independent so need to limit AG’s removal power. b. Whether, taken as a whole, the Act violates the separation of powers by reducing the President’s ability to control the prosecutorial powers wielded by the IC? i. Held: Congress does not encroach 1. Congress has retained for itself no powers of control or supervision over an IC ii. Held: Judiciary does not encroach 1. Special Division has no power to appoint an IC, only upon request from AG 2. CTs cannot review AG’s decision not to seek appointment 3. Judiciary has no power to supervise or control IC 4. Special Division is not supervisory or administrative 5. Not functions that a purely executive 6. Act does give fed ct power to review AG’s decision to remove IC, but w/in power of judiciary