Cases
1. CASE: ALA Schechter Poultry v US
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Cases
1. Myers and Humphrey’s Executor
A. CASE: Myers v US-aggrandizement
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iv. How can the executive allow the NLRB to adjudicate labor cases
but the judiciary can’t enact a benzene commission? The core
functions are diff. Judges aren’t elected whereas the exec is,
thus we want judges to be insulated from political influence.
We don’t trust judges w/ issues that might be susceptible to
outside influence. We’re less concerned when the exec does
some adjudicating b/c at least he’s held politically accountable.
5. CASE: Morrison v Olson: independent
A. Congress passed statute that gave a court the power to appoint an
“independent counsel” to prosecute high level political officials;
prez could remove only for “good cause” per the statute.
B. SC ruled that such a delegation is constitutional b/c the existence
of the independent counsel did not prevent the prez from
exercising his constitutionally specified functions. The “good
cause” limitations did not impede the functionality of the
executive.
C. The independent counsel was not entirely independent b/c she
could be suspended for “good cause” by the prez, though the ct
did not specify what that is.
Article II Courts
Analysis
1. Jurisdictional facts are reviewed by an Art III ct de novo. ~Crowell
A. Brandeis Crowell dissent + response as to why de novo might be
better.
2. State law claims cannot be final and binding and only subject to
ordinary review by a non-Art III ct. ~Northern Pipeline/Union Carbide
3. Public rights can be adjudicated in legislative courts.
~Crowell/Northern Pipeline
4. Does the delegation impair either of Schor’s interests?
A. Personal: right to be heard in front of a judge free from the political
influence of other branches? Can be waived
B. Structural: Art III’s independence and role in the govt is
nonetheless protected
i. Extent to which the essential attributes of judicial power are
reserved to Art III cts and whether the extent to which the
legislative ct exercises the range of power and jurisdiction
normally reserved to Art III cts
ii. Origins and importance of the right at issue
iii. Concerns that drove Congress to depart from Art III
Cases
1. CASE: Crowell v Benson
A. Facts: Crowell, a deputy commissioner of the US Employees’
Compensation Commission makes a factual finding that Knudsen
was injured while employed by Benson on US waters. Thus
Knudsen is owed workman’s compensation. Benson sues to enjoin
enforcement arguing that Crowell’s factual determination to trigger
jurisdiction was unconstitutional.
B. Held: In private rights cases, agencies are allowed to make
ordinary factual findings but cts have to decide jurisdictional facts
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ii. The statute had impermissibly removed most, if not all, of the
essential attributes of judicial power from Art III cts and vested
them in non-Art III cts.
iii. Admin agencies can’t handle private rights cases b/c that would
create “substantial inroads into functions that have traditionally
been performed by the judiciary.” W/ public rights cases,
Congress created the right so can create presumptions, assign
burdens of proof or create special tribunals.
iv. Today:
a. If there’s a q of whether a claim even belongs in bankruptcy
ct, the issue goes to the dist ct. That decision can then go
to the appellate ct who looks at it de novo.
b. Bankruptcy cts settle assets and all related tort/K claims so
that payments/judgments and assets can be properly
divided. Then appellate court would review the bankruptcy
ct’s judgment under a “clearly erroneous” std which is more
deferential than de novo.
c. Practically speaking, the bankruptcy cts are doing most of
the work; de facto, there’s quite a bit of deference being
given to the bankruptcy ct’s findings.
d. Moving from Art I cts to Art III cts requires a de novo std of
review.
3. CASE: Commodity Futures Trading Commission v Schor
A. Facts: Schor the investor sues Conti the broker for reparations
under the Commodities Exchange Act in front of the Commission
(although he also had the option of sueing in fed ct for a violation
of the Act). Conti brings ordinary compulsory counterclaim for
debt in a fed court diversity action but at Schor’s request,
dismisses it and re-files before the agency. Schor loses, Conti wins.
Schor argues that the agency could not have constitutionally
adjudicated the state law counterclaim per Marathon.
B. Held: The Commission could adjudicate the compulsory state law
counterclaim w/o violating Art III. (There was no dispute about
Congress’ authority to allow the Commission to adjudicate the
reparations claims.) Under the Art III functional approach, Schor
waived any personal right to have his claim adjudicated in an Art III
ct and looking at the structural factors, the court found that
allowing the Commission to adjudicate the counterclaim would not
intrude on the judiciary.
C. Reasoning:
i. Art III serves two functions:
a. Structural: protects the role of the independent judiciary
1) Extent to which the essential attributes of judicial power
are reserved to Art III cts and whether the extent to
which the legislative ct exercises the range of power and
jurisdiction normally reserved to Art III cts
2) Origins and importance of the right at issue
3) Concerns that drove Congress to depart from Art II
b. Personal: safeguards litigants’ right to have claims decided
before judges who are free from potential domination by
other branches can be waived
ii. Ct was persuaded by:
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a. Does the statute implicitly import the c/l def or some other
def? Q of Law
1) Trying to determine the def of words.
2) Will consult: precedent, congressional records, context of
other statutes etc.
3) Ct will decide on its own—NLRA does not on its own,
import the c/l into the statute
b. What is the purpose of the Act? Q of Law
1) Mostly legal considerations
2) Ct decides for itself—purpose is to end industrial strife
and equalize bargaining power
c. What type of workers are covered under the act? Q of
Law
1) Look at statute itself, congressional records, dictionary
meaning
2) Compare policy outcomes of using diff definitions
3) Look at agency interpretation perhaps as a last resort
4) Ct ultimately defers on this q—NLRB can decide this on a
case by case basis or industry by industry basis
5) But the best way to answer this might not be to look at
legal materials but to look at the factual situation
d. Are these newsboys = “employees?” Q of Fact
1) Apply the facts to the def of employee
2) If the agency gets to decide ultimately, then this q gets
folded into their earlier inquiry of what is an employee
ii. SC is additionally persuaded by:
a. The task of defining “employee” was given to the NLRB
since they were chosen to administer the act.
b. Everyday experience in the administration of the act gives
the NLRB unique familiarity and experience of employment
relationships, abilities and need for self-organization etc.
c. Generally q’s of statutory interpretation, esp when arising in
the first instance, are for cts to resolve but when the q is
one of specific application, the agency administering it
usually makes the call and the reviewing ct’s function is
limited.
iii. The Board’s determination should be accepted if it has “warrant
in the record” and a “reasonable basis in the law.”
iv. As the q moves from law to fact-based, the deference to the
agency increases.
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ii. If the tools fail and can’t figure out purpose, a Step 1 ambiguity
arises:
a. If Congress intended a particular result but was not clear
about itgenuine q of law; cts should resolve.
b. If no single or particular intent is ascertainablego to Step
2.
c. But the quest for ascertaining legislative intent is generally
difficult b/c in most cases, Congress didn’t think about the
issue at all.
6. Ultimately, there isn’t a really great way to defend Chevron other than
to say that there are q’s the cts would rather not answer so let
agencies do it.
7. Is Chevron consistent w/ nondelegation principles or is this
nondelegation gone amuck?
A. It’s consistent w/ the limited use of nondelegation.
B. Since Congress intends to grant power to agencies, cts will defer to
the agency’s interpretive calls as well.
C. Response: This might be piling error on top of error. If the mistake
is substantial delegation in the first place, then allowing
interpretive powers just exacerbates the problem.
D. Response to that: If agencies are better adept at making policy
judgment calls, then let them do it, especially since their actions
are still subject to political accountability.
8. CASE: Chevron Inc v NRDC
A. Facts: Under the Clean Air Act, the EPA promulgated the “bubble
rule” which defined a “single stationary source” that emits
pollutants to be an entire entity like a plant or factory, instead of
individual units like buildings or smokestacks. NRDC sued to
change rule back to including individual units. The “rule” was
promulgated as a regulation and carried the force of law.
B. Held: Since Congress was unclear on the definition of “single
stationary source” but the agency’s interpretation is reasonable,
grant deference to agency’s interpretation.
C. Reasoning:
i. Defining “statutory source” seems to be a q of law and
ordinarily would be a q for the cts, but ct grants deference
anyway. The SC thinks that this is more of a question of policy
or a mixed q of law and fact and thus better left to the political
branches.
ii. Explicit/Implicit delegations:
a. This seems like an issue of statutory interpretation but SC
says that where there’s an explicit gap left for the agency to
fill, then there is an express delegation of authority to make
legislative rules that have the force of law as long as they
are not arbitrary, capricious or manifestly against the
purpose of the statute.
b. Sometimes the legislative delegation is implicit and in such
cases the court is not free to substitute its own judgment for
that of the reasonable judgment made by the agency.
c. What’s the diff b/t an implicit and explicit delegation? Not
clear but court doesn’t think it should matter anyway.
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Chevron Step 2
1. If court says statute is unambiguous in Step 1, then end of story.
2. If court is silent or says that statute is ambiguous in Step 1, then to go
Step 2.
3. At Step 2, agencies can get a second bite at the apply by changing
policies as long as reasonable.
4. Rule: a court’s prior judicial construction of a statute trumps an
agency construction otherwise entitled to Chevrondeference only if
the prior court decision holds that its construction follows from the
unambiguous terms of the statute and leaves no room for agency
discretion. This is permissible b/c these are policy inquiries~National
Cable v Brand X Internet Services
5. Agencies can change and even overrule courts at Step 2. To hold the
Step 2 interpretatin will lead to anomalous results depend on who gets
to it first. ~Brand X
6. What’s going on at Step 2?
A. Only get to Step 2 if there’s multiple reasonable alternatives that
give rise to “ambiguity” in Step 1.
B. So by the time to get to Step 2, the relevant q has virtually been
answered and nothing ever really get decided at Step 2.
C. If there are no good alternatives, then you never get past Step 1
b/c then the meaning of the statute must be unambiguous.
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Adjudication vs Rulemaking
1. Adjudication-per the APA, it’s the agency process for issuing an
“order” or a final disposition of an agency matter other than
rulemaking; includes:
A. May or may not require a hearing or due process entitlement to
procedural requirements
B. Resolution of specific litigation controversies b/t adversary parties
C. Licensing
D. Agency decisions not to spend money on a project (informal adj-
Overton Park)
E. Authorizations like granting leases or rescinding K’s
F. Other non-rulemaking management and administrative functions
2. Rulemaking-equivalent of agency legislation; is a statement of general
or particular applicability and future effect designed to implement,
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A. Triggered when the statute does not provide for a “hearing on the
record.”
B. APA 553 procedures:
i. Post notice in the Federal Register specifying time and place of
rulemaking proceedings, legal authority for issuance and
content of proposed changes
ii. Opportunity for interested persons to comment on the proposal
w/ written submissions, and at the option of the agency,
opportunity for oral argument
iii. After final rule promulgated, agency must issue a “concise
general statement” of the basis and purpose of the decision
a. “Concise statement” has, in reality, become relatively long
and extensive b/c agency write w/ anticipation of litigation
or to preempt lit
C. Over the past few decades, agencies have moved from
adjudication to NC Rulemaking to decide regulatory policy. Since
no formal record was necessary under NC rulemaking (unlike
formal rulemaking), cts needed to mandate some kind of record so
that it could later be reviewed by cts.
D. Judicial review: Hard Look/arbitrary and capricious
7. Organic statute can prescribe greater procedural formalities than APA
calls for. ~Florida East Coast Railway
8. Agency choice b/t rulemaking and adjudication: organic statute
typically won’t give a choice but there are other situations where
agency gets to choose.
9. Judicial control of agency choice of procedures: cts generally ok w/
letting agency pick and choose b/t rulemaking and adjudication as
long as they follow the procedural safeguards
A. A normal “rulemaking rule” must be promulgated via APA
procedures. Can’t evade process requirements by trying to create
a “rule” that applies prospectively (but not retrospectively) from an
adjudicative proceeding. If you want the precedent to apply
prospectively, use rulemaking. ~Wyman Gordon
B. Can’t enforce a “rule” if that rule is an unpublished policy written
only in an internal agency manual. Rule lacks legitimacy and
safeguards of rulemaking process. ~Morton v Ruiz
C. Hercules v EPA-DC Circuit upheld the EPA’s authority to adopt
pollution control requirements by rulemaking even though the
resulting rules only applied to a single plant. Since that was formal
rulemaking, the due process rights and procedures of the affected
party were upheld just as they would’ve been under adjudication.
D. CASE: NLRB v Wyman-Gordon
i. In an adjudicative proceeding, NLRB orders W-G to produce
employee roster to union, and relies in part on previous NLRB
adjudication of Excelsior. W-G challenges and argues that
Excelsior is procedurally invalid and cannot apply to it.
ii. Held: Yes, Excelsiorwas procedurally invalid b/c the “rule”
announced there was done through adjudication instead of
rulemaking. But since this is a separate adjudication, NLRB has
independent reason to validly order W-G to give up roster list.
iii. Reasoning:
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Impx of Rulemaking
1. Florida East Coast encouraged agency to shift from adjudication to
rulemaking to develop law and policy, especially since rulemaking
need not be carried out using sticky trial-type procedures.
2. NC Rulemaking is subject to hard look review which requires an
evidentiary record. Agencies’ increasing use of NC Rulemaking
threatened to create a less rich record since interested parties
couldn’t engage in CX and thoroughly examine the reasons for NC
rulemaking.
3. Even when an agency’s enabling statute expressly requires it to hold a
hearing, the agency may rely on its rulemaking authority to determine
issues that do not require a case by case consideration. ~FPC v
Texaco
4. In an adjudicatory hearing, a litigant can’t challenge the validity of a
rule promulgated in NC Rulemaking. The procedural safeguards of NC
rulemaking itself provides sufficient procedural safeguards to the
eventual litigant. Use of the matrix rule affects a class of people so
should not and cannot be challenged in adjudicatory hearing.
~Heckler v Campbell
5. CASE: Heckler v Campbell
A. Using NC Rulemaking, HHS promulgates rule using matrix to
classify disability claimants into those who do and do not get
benefits.
B. In formal adjudication, ALJ, relying on the matrix, affirms claimant’s
denial of benefits.
C. App Ct, reviewing ALJ’s decision under SE Test, says ALJ should
have relied on specific evidence beyond that of the matrix.
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D. SC says rule using the matrix is allowable b/c matrix affects a class
of people rather than individuals.
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A. interpretive rules
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D. agency findings for good cause that notice and public procedure
are impracticable, unnecessary or contrary to the public interest
A. Don’t have the force of law thus they are meant to guide the
regulated entities but since they are not binding, they might not
offer as much guidance as a regulated entity might want.
ii. Held: DC Circuit held that this effectively made amounts lower
than the threshold level illegal. There was no evidence that
this was a tentative decision or that the agency would not
always follow its own policy, thus this is meant to have the
force of law and should have been promulgated through NC
Rulemaking.
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7. Rules of “procedure”
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ii. Held: DC Cir says a rule does not fall w/in the scope of the
exception merely b/c it has some “procedure.”
iii. Reasoning:
i. Facts: NRC changed its std for granting filing extensions from a
showing of “good cause” to a showing of “unavoidable and
extreme circumstances” as part of a goal to streamline the
schedule for license renewals. Std was not passed pursuant to
NC rulemaking.
ii. Held: DC Cir held that NRC was free to adopt this new std w/o
using NC rulemaking b/c rules that assert a timetable for
asserting substantive rights are procedural. And the new std
gave plenty of time to intervene.
1. APA 701 provides that APA’s judicial provisions don’t apply “to the
extent that:”
3. Bowen and Block make the Abbott Labs presumption weak; now it
seems like cts will made decisions on a case by case basis.
C. Reasoning:
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iii. Responses:
C. Reasoning:
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A. Facts: Prisons used drugs for lethal injection that hadn’t been
approved for that use. Death row inmates challenge the FDA’s
inaction or failure to take enforcement action against these
prisons.
B. Held: Food, Drug and Cosmetic Act did not prescribe any rules to
weigh the use of FDA’s prosecutorial discretion—the decision of
whether or not to take enforcement action was committed to FDA
discretion by law.
C. Reasoning:
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i. SUWA sued under APA 706(1) which gives cts the authority to
“compel agency action unlawfully withheld or unreasonably
delayed.”
iv. To allow this suit would inevitably require the cts to judge the
sufficiency of discretionary agency action and compliance w/
general statutory stds.
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3. P must have suffered an “injury in fact,” which comes from the “cases
and controversies” requirement of the Constitution. ~Sierra Club v
Morton
i. Concrete
ii. Particularized to P
iii. Not the result of some independent action of a third party not
before the court
C. Causation by D
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