Professor Siegel Spring 2003

I. Intro/Overview
What are administrative agencies?
Administrative agencies are Congressionally created entities who receive a lawmaking charge from
Congress their functions are diffuse, ranging from law making (legislative) to law enforcing
(executive) to legal adjudication (judicial)
Morrison
To what extent may Congress limit the executives power to control administrative heads (through
limitations on removal power)?
- Congress may restrict Presidential removal power insofar as such restrictions do not impede
the President in the performance of his constitutional duty (upholding for cause termination
provision for independent counsel)
o Pres. constitutional duty= faithfully execute the laws
Good cause removal sufficiently empowers the Pres. to monitor the ICs
faithful execution of the laws
To what extent may Congress interfere in the Pres. control of administrative agencies consistent w/ the
separation of powers?
- Removal provision neither constitutes
o Congressional retention of power nor
o Undermines Executive from accomplishing constitutionally assigned functions
NB The Morrison decision took a practical approach to the specific role of the IC w/in the political system.
Greater Pres. power over the IC would strip her of the ability to monitor political officials w/in the
administration. If Congress attempted to limit removal power over officials whose executive power was
more central to the functioning of the executive (Attorney General/Solicitor General etc.), the Ct would
rule otherwise.
What do Administrative Agencies do?
A. Rulemaking agency process for formulating, amending or repealing a rule (551)
Storer (1956) administrative agency can adjudicate by rule-making - agency rule to bar licenses
to Broadcasters who own 5 or more stations properly fulfills agency responsibility to provide a
hearing for license denials
Texaco statutory RQT for a hearing does not preclude administrative agencies from particularizing
statutory standards through rulemaking process (and barring an actual hearing)
Why can an administrative rule-make in what appears to be a deviation from their responsibility to
provide an individualized hearing?
- Streamline agency administration of law permits the agency to put the regulated parties on
notice and avoid costly, time consuming adjudication
- Agency power to prescribe rules and regulations necessary or appropriate to carry out the
provisions of the Act trumps hearing responsibility
- Rulemaking gives content to vague Congressional delegation
- Waiver possibility agency could provide waiver to the rule in special circumstances

B. Adjudication agency process for the formulation of an order whole or part of an agency final
disposition, ergo nearly all agency action is adjudicatory
Goldberg Due Process places constraints on administrative agencies power not to provide an
adjudicatory hearing BEFORE termination of a property interest (welfare), an administrative agency
must provide an evidentiary hearing that includes
- right to confront/cross examine witnesses
- permission to retain counsel
- written decision from decisionmaker chronicling rxs and legal substantiation
NB Due Process is flexible some benefits may be terminated without affording the recipient a
pretermination evidentiary hearing
Bureaucratic Model quick and efficient but decisionmakers lack discretion or a face
Judicial Model slow and costly with high level of discretion in decisionmaker
NB The tension between the two models is recurrent Storer/Texaco represent the bureaucratic
model at its finest while Goldberg demonstrates there are instances where Due Process mandates
that admininistrative agencies employ pseudo-Judicial processes to make a determination.
Judicial Review of Administrative Action

II What are Administrative Agencies

A. Congress and the Administrative Agencies
Nondelegation idea that Congress may not relinquish the legislative power vested w/in it by the
Constitution (Art !, Sec. 1) Why?
- Art I
- Theory of political accountability populus only consents to the Government of those whom
they elect
- Agency Theory the agent (Congress of the people) may not redelegate his authority
- Separation of Powers Fears joinder of the legislative and executive
Panama Refining Co./Schechter Poultry delegation of power to Pres. to exclude oil products from the
open market and to approve industry codes of fair competition, respectively, are found invalid Why?
-

Congress failed to provide standards/procedures to which the Pres could conform in fulfilling
the duty delegated to him granted sweeping power to approve codes of fair competition
w/out defining procedures by which Pres would do so (Schechter)
Failure to define fair competition itself, thereby allowing the Pres to define the contours of
the legislations meaning (Schechter)

- The theory has been transformed from a limitation on Congressional conferral of

power to a justification for such conferrals Why?
- Practicality Congress has neither the time nor the expertise to completely govern
JW Hampton as long as Congress provides an intelligible principle to which the agency can conform,
the delegation is permissible (upholding Pres. power to modify tariff schedules w/in parameters prescribed
by Congress)

Yakus only if there is an absence of standards provided by Congress such that there will is not
ascertainable on the face of the statute will impermissible delegation be found (upholding delegation to
Office of Price Administration the authority to control prices where statute provides guidance by which
courts can measure whether the OPA obeyed the will of Congress)
Amalgamated Meat Cutters Congressional delegation to President to stabilize prices through orders
and regulations necessary to avoid gross inequities is Const Why?
- Time constraint on Pres power to freeze prices
- History of Pres authority to freeze prices
- Legislative History contains sufficient explication of purposes (intelligible principle) of the
Act to guide the Pres in his administration and allow the courts a reference to ensure adm.
obeyance of congressional will (Yakus, Hampton)
- APA now constrains all admin action w/in the bounds of the Due Process clause and
:arbitrary, capriciousness
- Explicit pronouncement not to single out specific industries
- What about the Pres delegation to council to administer the act?
o Redelegations are permissible Pres has removal power over agency, therefore, they
must fulfill his will
Is there any way that a Congressional delegation may be found to offend the principle of nondelegation?
Whitman degree of agency discretion acceptable varies according to the power congressionally
conferred I
- If Congress confers immense powers to regulate the natl economy, the specificity of its
instructions for management of that delegation must increase proportionately
- Upholding delegation to EPA to set particulate matter levels requisite to protect the public
health despite objections that this delegation is vague/unintelligible/impossible to define
standards
- Why does Scalia, the great textualist, accept delegation?
o Discretion inheres in all executive action there will always be executive choice in
regard to implementation
The Non-Aggrandizement Principle: idea that the Constitution prohibits Congress from using the
legislative power to confer upon itself/create powers which the Constitution itself does not confer to
Congress
Chadha Congress may not exercise legislative power outside the confines of bicameralism and
presentment explicit in the Const.
- What is legislative power?
o Congressional action that has purpose or effect of altering the legal rights, duties
and relations of persons
The legislative veto whereby Congress retains the power, w/in a singular
House and w/out Pres approval to override executive action is the exercise
of legislative power outside the confines of bicameralism and presentment
- Stevens concurrence in Whitman suggested that the S Ct acknowledge that admin agencies
adopt legislation Under this realist standard, would agency rulemaking invariably be in
tension w/ the principle that legislative power cannot be exercised w/out Bicam and Pres.?
o No exerciser of power would be distinct (agency) , ergo the threat of
Congressional creation of power w/in itself that the Const does not confer does not
arise
o Plus, the agency action is bound by the delegation of Congress which itself must
conform to the nondelegation doctrine thus there are structural impediments

White (dissent) spirit of Bicam. and Pres. are intact for administrative action to occur,
Atty General (executive) must take action and the House and Senate (legislative) must
approve Problem?
o Legislative inaction/passive affirmance is far different that legislative action/Active
Affirmance in traditional Bicameral legislation

Bowsher Congress may not endow a congressional officer with executive powers to do so would
allow Congress, through its agent, to retain power (executive) that the Constitution forbids the legislative
branch to exercise
-

How does one recognize a Congressional officer?

o Removability If Congress retains discretionary removal powers over an official,
that official must be Congressional (Morrison retention of removal power over
executive officials is unConst as violative of the separation of powers
Congress had broad power to remove Comptroller for cause through joint
resolution act subject to Bicam and Pres.

How does one recognize the exercise of executive power

Iinterpreting a law enacted by Congress to implement the Congressional
mandate=executive power
Comptroller General is interpreting the Deficit Control Act to provide
means of implementation=executive power
An executive officer is any person who exercises significan interpretive
authority pursuant to a public law
Buckley an official exercising significant interpretive authority
pursuant to Public Law is subject to the provisions of the
appointments clause (Congress cannot appoint such an authority
because to do so would run afoul of the separation of powers

Central Point of Non-Aggrandizement Congress may not statutorily confer power to itself which the
Constitution does not confer to them
- Chadha Const does not permit exercise of legislative power byt Congress w/out B&P, ergo
Congress cannot confer upon itself the power to exercise legislative power w/out B&P
- Bowsher Const does not permit the Congress to execute the law it passes, ergo Congress
cannot confer upon itself (through its agents) the power to execute the law
- Buckley Const does not permit Congress to appoint executive officials, ergo Congress
cannot confer upon itself the power to appoint executive officials
How can Congress control agency action lawfully?
- Statutory Precision
- Agency Oversight
- Control Agency budget

Statutory Precision : technique of legislative construction that allows Congress to more precisely shape
the contours of administrative action by limiting agency discretion Why?
- Congress wants to be certain power is exercised according to Congressional intention
- Divided Govt : if legislature and executive are separate parties, legislature may wish to
ensure that partisan admin does not reinterpret
eg In Chadha, rather than attempting to maintain an unconst legislative veto, Congress could have
provided more precise guidance to the Atty General to specify those instances where suspension
of deportation proceedings was proper

Delaney Clause restricts FAD approval of any additive found to induce cancer, or found after tests which
are appropriate for the evaluation of the safety of food additives, to induce cancer
Public Citizen where Congress applies an extraordinarily rigid/precise standard for administrative
implementation, no de minimis exception applies to that standard (holding the FDA wrongly approved two
color additives on the theory the carcinogenic effects of the additives was de minimis where Congress
explicitly announced that no carcinogenic additives were subject to approval)
- When might a de minimis exception apply to a statutorily precise delegation?
o If examination of the entire statue demonstrated that allowing the exception would
implement the {true] legislative design
Eg Statute bars carcinogenic agents but also empowers FDA to approve
medications for the treatment of disease medication that was slightly
carcinogenic but would save thousands of lives would likely be approved on
a de minimis exception
- How else might an agency avoid the control Congress is attempting to exercise through
precision?
o Manipulate statutory language (eg appropriate)
o Obfuscate cause and effect eg studies are inconclusive as to whether X is the direct
cx of cancer
How can we characterize statutory precision?
- Micromanagement are there disadvantages to this approach?
o Undermines the exercise of the expertise of the particular agency
o Inflexible prohibits agency from implementing pragmatic solutions in their
regulatory field
o Paralyzed/Frozen Std. Delaney Clause was enacted at a time when the
sophistication of science was unable to calibrate as closely the extent of risk certain
levels of carcinogens posed rigid std. inhibits discretionary approval of safe
carcinogens
Are there advantages to this approach?
o More clearly tracks political accountability theory legislature designing the laws
that govern own behavior
o Simplify/Make predictable outcomes
Other Tools of Congressional Control
-

Generalized Statutes
Legislative Influence : attempts by legislatures to exercise political influence over
administrative decisionmaking through suggestion
o Pillsbury intervention by legislatures during judicial proceedings is particularly
unacceptable (holding that FTC commissioners subjected to Congressional
committee during an ongoing adjudication must recuse themselves) Why?
Legislators are citizens who share the right to express their opinion in
legislative matters of admin but neither their citizenship nor their
position entitles them to intervene in judicial matters this implicates the
fair trial rights of the adjudicants
o Volpe administrative decisions initiated based on the consideration or factors that
were irrelevant to the primary Congressional mandate cannot stand (if Sec Volpes
decision was the result of poltical pressures from Congressmen that were unrelated
to the statutory mandate ie political blackmail, then the decision may not stand)

If an administrator makes a decision based on ex parte contact, the decision

cannot be controlled by that suggestion

The President and the Administrative Agencies

Appointment and Removal of Officers
Appointment
Buckley (1976) appointment of Officers of the US (Federal Election Committee) by anyone besides the
Pres derogates the Pres exclusive Appt Power pursuant to Art 2 2
(holding committee composed of Congressmen election of FEC members unconstitutional)
- How does one determine who is an Officer of the US?
o any appointee exercising significant authority pursuant to the laws of the United
States=Officer of the US

Enforcement/Adjudicative/ Rulemaking powers of the FEC= significant

authority under the laws . but
Investigative/Informative Power of FEC=merely in aid of the legislative
function of the Congress
Function that Congressional committees would perform,
Congressional outsourcing

Morrison(1988) apparently the Independent Counsel does not exercise

significant authority since he was appointed by the courts (Special
Division) How else can Morrison be distinguished? ask about this

No Congressional attempt to aggrandize though removal power was

limited, the executive (Atty General) still retained the power

NB Buckley may also be read to uphold the nonaggrandizement principle The Const does not permit
Congress to appoint Officers of the US itself, ergo Congress cannot confer upon itself the power to appoint
Officers of the US
NRA Political Victory Fund - Congress may not appoint nonvoting members to FEC Why? - Such
member may still exercise significant authority within the FEC continuing fear of aggrandizement
Removal
Humphreys Executor (1935) Congress can place limitations on Presidential removal power when
official is not exercising purely executive power (holding the power exercised by the FTC Commissioner
is Not purely executive, ergo Congress can place removal limitations on the official)
- The problem w/ the Humphreys ruling is its amorphous std. for determining whether an
official is exercising purely executive power
o Does Congress intend for the officer to be independent of the President
(Morrison)?
o Is the character of the office focused on legislative/judicial action?
These questions provide no judicially manageable standards to determine
when Congress may limit the power of the President to remove officers
Morrison Congress can place removal restrictions on executive officers so long as the do not impede the
Pres ability to perform his Constitutional duty

Two step inquiry to determine whether removal restriction would impede the Pres in
performance of his constitutional duty
o Is a Const duty of the President implicated by the officers position?
Willogby (Political Chief- Pres possesses limited Const duties - those for
which there is no judicial review) vs Scalia (unitary executive- Pres
possesses broad powers to faithfully execute the laws)
Which understanding of the Pres Constitutional powers one
adopts dictates the inquiry
o Would removal limitation act as an impediment on the Pres ability to faithfully
execute the constitutional duty implicated?
If one adopts the unitary executive theory, chances increase that removal
restriction impedes Pres
If one adopts Willogby theory, chances are slighter that removal restriction
impedes the Pres
It is per se unconstitutional for Congress to place a removal restriction on a principal officer
It is per se constitutional for Congress to place a removal restriction on an inferior officer

How does one determine if an officer is inferior?

- Is the officer subject to removal a higher exec branch official (Ind Counsel is removable by
the Atty General )
- Are the duties of the officer limited (Ind Coun only has one specialized duty)
- Is the tenure of the officer limited
- Is the jurisdiction of the officer limited (Ind Counsel only prosecutes certain federal
officials?
Is there any problem w/ empowering the Courts to appoint the Independent Counsel?
- Art II explicitly empowers Congress to vest by law the appointment of inferior officers, as
they think proper, in the Pres alone, in the Courts of Law or the Heads of Departments
o Still Congresss choice of who will appoint inferior officers is limited by the
doctrine of incongruity
What is an incongruity?
When the functions of the appointing body are somehow
inconsistent with the power to appoint
o In this case, courts are especially expert to choose a
Prosecutor
Is there any Art III problem with allowing the courts to define the jurisdiction of the independent counsel?
- Normally the courts may only decide cases or controversies
o As long as courts discretionary power to define the powers of the inferior officers
ss an incident to power to appoint, then separation of powers issue does not arise
Policy Control
Presidential Authority
Youngstown Steel Pres order to Secretary of Commerce to seize steel mill for purposes of conducting
Korean War efficiently is unConst Why?
- Framework of Youngstown Justice Jacksons concurring opinion holding that the Pres
lacked the power to order the seizure
o Does a Congressional statute explicitly empower the Presidential order?
If yes, then the only constraint on the Pres action is the nondelegation
doctrine

Did Congress, in delegating the power to make the order, provide

an intelligible principle (Schechter) to guide the Pres in his
admin of the statute?
Does a Congressional statute explicitly prohibit the Pres order?
If yes, then the Pres may not make the order unless the prohibition
impedes the Pres in the performance of his constitutional duty
(Morrison aggrandizement???)
This question heavily depends on the whether one adopts the
political chief or the unitary executive model chances of
impediment on Pres ecercise of his Const duty increase if the
unitary executive theory applies
Is there neither a Congressional prohibition nor a Congressional grant of the power
exercised?
If yes, then the Pres power to act must be inherent
Constitutional foreign affairs etc.
o Dames & Moore Pres has authority to waive claims
against the Iranian Govt nationalization of US capital
through foreign affairs power
o Neagle official ordered to protect a Supreme Ct. Justice
pursuant to executive order lawfully does so as within the
inherent executive auth to faithfully execute the laws
Historical Practice Has the Pres traditionally exercised the power
considered?
o Dames&Moore Pres traditionally has controlled claims
against foreign nations

Youngstown Lessons
-

Pres order must be lawful

Pres cannot order admin official to refrain from action required by law (statute - Kendell)
Pres may exercise power of persuasion if administrator has discretion to act
Admin official has no legal duty to heed the attempted persuasion of the Pres, unless the
statute compels admin officer to do so (eg act creating foreign affairs and War Dept placed
admin head directly accountable to Pres)
Pres may not step into the shoes of the admin official (Pres possesses removal power over
prosecutor but no more Jewels of the Princess of Orange)

What if an agency heads justification for a ruling adverse to a party is that the Pres ordered the
agenc head to so rule?
- Insufficient justification agency act mus be justified by the delegation of congressional
auth (eg FCC act adverse to particular communications company must be justified by public
convenience, necessity )
What if the agency heads justification was w/in the statutory delegation but her true motivation
was compliance with an executive order?
- OK w/in Pres powers to persuade the agency head to act w/in the discretion Congress
provided

Executive Orders
How significantly may the Pres control administrative agencies through his power to pronounce executive
orders?

The limits of the Pres power to control admin agencies through the pronouncement of
executive orders are defined by Congress constitutional delegations to the agency to act i.e.
As long as the statutory power Congress wields over the agency does not impede the Pres in
the performance of his Constitutional duty, the Pres may not override the express
authorizations by Congress

Environmental Defense Fund

- Pres may delegate his authority, through executive order, to any administrative agent
confirmed by the Senate (permitting delegation to OMB head as administrator of CB
analysis state)
- Administrative agent may not, subject to Pres order, force the agency to disobey its statutory
mandate (prohibiting the OMB from delaying the adoption of environmental std. that
made EPA late for statutory deadline)
- executive order to all agencies to abide by cost benefit analysis principles in the
promulgation of all rules and regulations to the extent permitted by law is w/in the Pres
power to control admin agencies
o To the extent permitted by law ensures that agencies w/ specific Congressional
order not to consider CB analysis are not subject to the executive order i.e.
acknowledges that direct statutory authorization by Congress may not be
overridden through executive order
Agencies are only to apply CB analysis w/in the discretion the
congressional authorization permits
o What if an administrative head declines to do CB analysis?
Administrative head has no legal duty to abide the executive order, agency
heads legal duty is to fulfill the statutory delegation
Pres, however, has power of removal creates de facto duty in
agency head
Exception Admin head must abide an executive order if it is
within the core powers (Foreign Affairs/Navy) of the Pres
o What if the Pres directs an independent agency to follow his executive order?
Independent agency has no legal duty + no de facto duty (since removal
of independent agency head is usually for good cause and refusal to obey
the Pres, even if lawful, does no constitute good cause for removal)
If the law compelled ind agency obeyance or allowed removal to follow
Pres order, ind agency would merely be a title w/out content
o Is it violative of the separation of powers for Congress to place removal restrictions
on an executive officer (independent) who may then disobey Pres order w/out
discipline?
As long as the such a restriction does not impede the executive in the
performance of his Const duty, the power to disobey as an incident of the
removal restriction, is permissible
Pres can still wield substantial political influence over independent agencies
lawfully so long as she is attempting to influence action w/in the
discretion of the ind agency as delegated by Congress
C.Administrative Agencies and the Courts
How extensively may Congress empower agencies to perform adjudicative functions w/out offending Art
III judicial power shall be vested in one Supreme Court and in such inferior courts as Congress may
from time to time ordain and establish?
Northern Pipeline adjudication of claim in Art I federal court is only permissible when one of four
exceptions apply
- Territorial Courts

Courts Martial
Public Rights (Murrays Lessee)
o Govt v. Individual
o Concerning a matter w/in the Constitutional power of the executive or legislature
Traditionally disposed of by legislature or executive independently
Since branches could have independently resolved the matter (absent Art III
court), an adjudication w/out Art III judge protections is permissible
o Marathon Pipelines claim, however, is in Contract and a matter of private rights
concerns the liability of one entity to another lie at the core of the historically
recognized judicial power
o What would be the problem if the S Ct permitted the related K claim to be heard by
the Bankruptcy Ct on the public rights theory
No limiting principle to derivation from Art III courts hearing private rights
claims
The unique protections of Art III judges from political influence
Lifetime Tenure
No pay decrease
Adjunct Court a court of Congressional creation whose duties do not invade the essential
attributes of the judicial power always retained by Art III tribunals
o Why is the bankruptcy court not an adjunct court?
Adjunct courts adjudicate public rights (statutorily created) while
bankruptcy court is adjudicating private rights (contract)
Adjunct courts make factual findings over which Art III courts exercise
significant power to make legal review, while std of review of bankruptcy
court legal determinations is deferential
Adjunct courts make tentative decisions subject to Art III enforcement,
while Bankruptcy court decisions are final and enforceable

Holding The bankruptcy court is exercising the essential attributes of judicial power w/out being
a properly constituted Art III court ergo its exercise of power violates Art III.
NB The approach of Marathon Pipeline is akin to the categorical approach of Justice Scalia in cases
where it is alleged that Congressional action impedes the Pres in his performance of the his
constitutional duty the court rigidly defines the textual Judicial Power and carefully insulates this rigid
definition from pragmatic balancing.
Thomas- courts must apply a multifactor balancing test to determine whether a non Art III court can
adjudicate specific claims (upholding the power of an arbitrator to make binding compensation
determinations between insecticide producers)
- Final adjudication does not fit neatly into any of the exceptions detailed in Marathon
Pipeline
o not a territorial or martial court,
o not a Public Rights claim as the parties are both private
o not an Adjunct court as the decision of the arbitrator is final (essential attributes
exercised by the arbitrator)
-

What are the balancing factors that inform an analysis of whether a non Art III courts
powers are permissible?
o What is the nature of the right at issue? Its origin?
Congress created the right in Thomas where issue is one of state or
common law creation (K,T,P), empowering a non Art III court to make the
decision is questionable
o Is the right at issue bound to a federal regulatory scheme?

10

Compensation determination in Thomas is nonexistent absent

Congressional regulatory scheme
Is the issue one that will create undue strain on thin federal court resources?
Is any judicial review available?
Presence of judicial review ensures if nothing else consistency with the
organic statute, the APA and the Constitution

o
o

NB Court has adopted the more flexible,balancing approach that was controlling in the majority of the
Congressional/Executive separation of powers cases Whites dissent in Marathon Pipeline prevails.

Schor administrative court may adjudicate state law counterclaim Why?

- Balancing Approach prevails
o Did Congress have a justification for empowering the agency to hear pendent state
law claims?
Yes avoid expense/inefficiency of adjudicating related claims in distincty
courts
o Do Art III courts have extensive review powers of the administrative courts
decision?
Yes, std of review of Schors claim is de novo
o Does the right at issue emanate from Congress?
No at issue is a state law claim in debt cuts against administrative
cognizance of the claim
o Is the power/JD of the administrative court limited?
Yes
o Are the essential attributes of the judicial power preserved in Art III courts?
Yes/No admin court will engage in fact finding (OK) and apply those
facts to make a legal determination (Art III essentiality ) but the legal
determination is
Not enforceable except upon Dist Ct approval
Subject to full de novo review
NB Defendant counterclaimant in Schor had waived his right to have his claim heard in an Art III court.
Can a party waive their right to an Art III tribunal?
- Personal rights are waivable (think 4th/5th/6th Amendment) by clear and knowledgeable
consent

11

What Do Administrative Agencies Do?

Adjudication
Constitutional Constraints: all governmental action vis vis individuals must abide the Due Process
Clause of the 5th/14th Amendment
no deprivation of life liberty or property without Due Process of Law
o Life/Liberty/Property though historically an amorphous troika that placed a
constraint on Govt action based on vague notions of fundamental fairness, admin
law has separated he pieces
When Is Process Due?
- Whenever the Govt deprives one of life, liberty or property therefore the inquiry focuses on
defining liberty/property interests
- Threshold Inquiry
o Application of Generalized Rules to Individuals
Londoner process is due for application of general tax to a specific
individual
Vs.
o

Rules of Generalized Applicability

Bi-metallic no process is due for tax applied equally to all individuals
Impractical to provide individual hearing for all the aggrieved
Redress/Remedy for such taxes is political process since the
injury is generalized, injured individual can seek support of
others injured through the political process

Roth textual inquiry to determine whether a specific individual is due process (holding that teacher has
no liberty or property interest in teaching post for which contractual term has expired)
-

Has the individual been deprived of a property interest?

o Property Interest any legitimate claim to an entitlement defined by rules or
understandings that stem from an independent source
Roth lacked a property interest in his employment because no
rule/understanding defined his right he had no relianc e interest in the
position
Goldberg AFDC was the rule upon which beneficiaries
justifiably relied for benefits (statutory entitlement)= property
interest

Has the individual been deprived of a liberty interest?

o Liberty Interest (paste list)
When can liberty interest be implicated in employment context?
Reputational Damage If EER makes charges that damage ones
standing/reputation, notice and opportunity to be heard is due the
EEE
Stigma EER termination forecloses EEE from working in the
field (if Roth couldnt get another teaching post)

12

Sindermann university tenure guidelines create a reliance interest in Professors that they retain their
position
- tenure guidelines= rules/understandings creating entitlement =property interest
o B/c Sindermann relied on an entitlement created by a university rule or
understanding, he had a property interest entitling him to process
Notice and an Opportunity to Respond
-

What is a state EER response to the Roth/Sindermann approach

o Avoid the creation of any rules/understandings that EEEs may rely on as property
interest when terminated Perverse Incentive
o Bizarre Judicial Protection State controls the right to process through power to
create/avoid creating rules or understandings upon which individuals might rely

Loudermill rejection of the bitter with the sweet test - though states retain the power to define when
process is due by the creation of rules/understanding= property interest, once they create the substantive
right, the judiciary has the power to define the contours of the procedure itself (holding that civil servant
w/ for cause removal protection (property interest in employment) has right to pre - termination hearing
despite state provision of only post termination hearing)
- Federal court adverse ruling against state on Due Process grounds does not reach the
substantive merits of an EERs decision to terminate an EEEs tenure - it only proscribes the
procedure the state must use before termination
What Process is Due?
Due Process is a flexible concept that dictates different procedural protections in different contexts
- Can be summarized in two step analysis
o Is any process due (Londoner/Bimetallic distinction)
o What process is due?
Goldberg harm of error in mistaken termination of welfare benefits necessitates a pre-termination
hearing concerning the welfare recipients eligibility
- Only rudimentary process is necessary meeting w/ social worker
Eldridge harm of error in mistaken termination of social security benefits does NOT necessitate a pre
termination hearing Why?
- Due Process is not a technical, precise concept - it adjusts to time/place/circumstances
- Three Step Test To Determine the Process one is Due
o Weight of the private interest
What is at stake for the aggrieved party?
Disability benefits not as vital to livelihood as welfare benefits
Disability beneficiary later receives oral hearing on appeal
o Risk of an erroneous deprivation of the individuals property/liberty/life interest
How probable is it that the Govt will err in their determination in the
absence of greater procedural protections?
Disability determination based on objective medical diagnosis
low risk of error (whereas in Goldberg terminatioin of welfare was
subject to human administrative error
o Govt interest in efficient administration

What are the additional burdens the admin agency will take on by adopting
more extensive procedural protections?
Pre termination hearing for disability beneficiaries will
o Create huge costs for admin agency

13

Brock Eldridge applied: DOT order to reinstate EEE and bear costs of backpay before
hearing to determine whether termination was proper is Constitutional
- Private Interest Prong MULTIPLE PRIVATE INTEREST
o EER interest in business property (backpay) implicated
o EEE property interest in employment through Whistleblowers Act
Govt Interest
o Enforcement of the Whistleblowers Act
o Highway Safety/Maintenance Incentives for Whistleblowers
- Risk of Error
o Minimal decrease in the chance of error provided by confrontation of EEEs and
cross examination of witnesses does not justify the administrative costs of such
measures
(Insert Alternatives to Eldridge Balancing Test for what process is Due)
Statutory Constraints
What procedural constraints has Congress placed on the agency in the adjudications it conducts?
-

Two Sources
o Organic Statute may provide greater procedural protections than the minimum
requirements of Due Process (Eldridge)
o Administrative Procedure Act
554 Section applies in every adjudication required by statute to be
determined on the record after opportunity for hearing i.e. every agency
whose administrative statute contains this language musty follow the
adjudicative procedures contained in 554

553 - Formal rules (those required to be made on the record after

opportunity for hearing) must abide the procedures of 556 and 557

Florida East Coast Railway to trigger the hearing the APA contemplates, the organic statute must
explicitly track the language of the APA (holding that after hearing language in ICC statute did not
compel ICC to only take action after following APA procedures)
- But isnt the court ignoring Congress desire to compel a formal record based on a hearing?
What underlay the courts decision in Florida East Coast Railway?
o Londoner/Bimetallic Distinction

Less procedural protection is necessary when an agency adopts rules of

general applicability - RULEMAKING
Dispersed effects of rule are remediable for collective industry
action through notice and comment

More procedural protection is necessary when agency applies rule in an

individual case ADJUDICATION

Since the ICC was conducting RULEMAKING adopting a rule of general

applicability to govern the entire rail industry -, court overlooks the after hearing
language (as necessitating opportunity to give evidence, confront witnesses, cross
examine at traditional oral hearing)

Califano where matter is adjudicative (application of rule of general applicability to individual),

courts will read in a hearing RQT to the statute (holding that the Secretary of the SSA must hold an
individualized hearing to determine whether recoupment of overpayments to SS beneficiaries is proper)

14

Califano court could have applied the Eldridge analysis and determined that Due Process
mandated a hearing for SS overpayment recipients Why didnt they?
o Const Avoidance decide a question w/out Const analysis where possible
o In light of the ruling in Eldridge that SS recipients are not entitled to pre-termination
hearing, it is not clear that recipients of overpayments whose benefits will be reduced
are entitled to a hearing
How can one reconcile greater procedural protections for a SS beneficiary who has
received overpayments than for a SS beneficiary whose benefits are going to be
terminated (Eldridge)?
Basis of decision in Eldridge was the low risk of error despite the absence
of an oral hearing b/c the dependence on objective medical evidence
whereas the basis of decision in Califano is fact specific (would recoupment
be inequitable etc) necessitating oral communication
Recoupment oral hearings less costly to the agency than a hearing each time
a recipient is disqualified from list of beneficiaries

NB Courts will read in/read out a hearing RQT in a statute depending on the context of the underlying
matter
- RULEMAKING inclusion of hearing RQT in organic statute does not govern the inquirysubmission of written comments satisfies agency responsibility to conduct hearing
(Londoner)
- ADJUDICATION - exclusion of hearing RQT in organic statute does not govern the inquiry
hearing is necessary to ensure individual subjected to general rule receives proper procedural
protections (Bimetallic)
Richardson administrative courts do not have to abide the Federal Rules of Evidence (holding that
administrative courts reliance on hearsay medical testimony to make disability determination sufficiently
meets factual predicate of substantial evidence on the record to uphold the ALJs decision)
- APA Administrative Ct. may receive any oral or documentary evidence
- What about the residuum rule (idea that substantial evidence rule demands that at least a
residue of nonhearsay evidence is necessary to uphold and ALF ruling on the facts)?
o Rejected by the Richardson court Why?
Medical evidence is particularly reliable/credible
Perales could have subpoenad the doctor
-

Why shouldnt the Fedr R. of Evid apply in administrative hearings?

o So many pro se litigants
o Cost concerns
If SSA had to bring in doctors to testify, they would have to pay them to do
so
o Admin hearings focus is fact finding not legal determinations
o Admin judges make decisions, not juries concern of Fed R of Evid is juries hearing
irrelevant/prejudicial evidence

Adjudication and Bureaucracy

Nash administrative law judges have Standing to challenge control measures through which agency
attempts to harness their decisionmaking
- Where does the ALJs sufficient personal interest to challenge administrative control emanate
from?
o Statutory right to decisional independence quasi- Art III independence

15

Can only be removed through formal adjudication (sec 554)- a la life

tenure
Remuneration comes from Office of Management Policy (to combat agency
control)
Exempt from performance rules

Why would an agency try to constrain the decisional independence Mr Nash so dearly
attempts to protect?
o Efficiency/Consistency
Agency is trying to reduce adjudicative costs through streamlining
decisionmaking
Agency is attempting to define concrete adjudicative standards to ensure
consistent determinations
SSA is huge administrative body if standards do not exist, parties
similarly situated will receive dfiferent adj holdings
o What is the ALJs gripe/response?
Our independent decisionmaking- statutorily protected ensures flexible
response to the varied needs of SS claimants

(Copy in the Policy analysis concerning the Bureaucratic Adj model v. Jud Model?
Controlling Adjudication through Rulemaking
Heckler administrative agency can resolve certain factual adjudicative issues through rulemaking
(Storer/Texaco)
- What is the character of adjudicative factual issues that an admin agency may resolve through
prior rulemaking?
o Factual issues whose outcome is not individual determinative i.e. general rules that
apply to all individuals the same
Outcome of whether a job is available in the nat/l economy based on SSA
grid is not determined by individual
Ergo, inquiry can be resolved through rulemaking
- What is the character adjuciative factual issues that an admin agency may not resolve through
rulemaking?
o Factual issues whose outcome is individual determinative i.e. the individuals unique
characteristics are necessary to make determination

SSA could not adopt definitive disability rule that disposed of each
individual case w/out an individualized inquiry (Zobley Why?
Determination of inability to perform substantial activity is an
inherently individualized question

NB Hecklers complaint is akin to Richardsons Heckler argued that the failure of the SSA to produce a
specific job in evidence on the record that he could perform violated the admin agency evidentiary duty.
Likewise, in Richardson, the claimant argued that the SSA failed to sustain their evidentiary duty to show
he was not disabled b/c all the evidence presented was hearsay which could not amount to substantial
evidence on the record.
Avoiding Adjudication through Rulemaking
Quesada admin agency may avoid adjudication through rulemaking, despite statutory indication
otherwise, when rule is one of general applicability to be applied to all individuals alike (holding that
FAA regulation that no person may pilot a commercial plane after here 60th birthday disposes of any right to
adjudicatoiry hearing to challenge denial of license after 60)

16

Akin to Florida East Coast Railway/Yamasaki language of the statute indicating whether
an adjudicatory hearing is necessary to dispose of a factual issue is Not Controlling as to
whether the agency may adopt a rule to dispose of the issues (also Natl Petroleum Refiners
though organic statute reveals no intention to empower FTC to adopt substantive rules,
court permits the FTC to adopt substantibve rules)
o The proper inquiry is whether the specific context is one in which the courts will
recognize rulemaking as a legitimate manner in which to dispose of issue
Rulemaking is legitimate to dispose of factual issue despite the general
applicability that applies to a broad class of individuals (Londoner)
Rulemaking is an illegitimate manner to dispose of factual issue when the
rule is applied in a unique specific context to an individual(Bimetallic)
But isnt Quesada in tension w/ Hecklers acknowledgement that specific individuals may be
outliers not subject to the dispositive rule?
o No FAA allows exception to the over 60 restriction
o There is no reasonable way to differentiate one 60 year old from another in regard to
health (the concern of the FAA), whereas Doctors can differentiate how
comparatively debilitating one disability is from another
Avoiding Adjudication through Procedural Rules

Weinberger FDA mandates that prerequisite to approval of drug as safe and effective is a double blind
study by industry industry member who seeks approval of drug through adjudication but has not
performed the double blind study is summarily dismissed (w/out consideration of the drug otherwise)
- S Ct sustains this rule Why?
o FDA action is akin to summary judgement there is no factual issue, the study has
not been conducted, as a matter of law, the failure to conduct the study is dispositive
of the determination whether a drug is ripe for approval
NB Weinberger is very similar to to the rulemaking cases that allow agencies to deny the right to an oral
hearing (adjudication) based on a rule of general applicability (National Petroleum Refiners, Storer,
Texaco). The courts are permitting the agency to place a prior condition on the right to an adjudication.
What is the difference?
o The procedural rule in Weinberger is not subject to notice and comment a la
informal rules of Storer etc.

Rulemaking
Authority To Make Rules
National Petroleum Refiners despite historic and statutory indications otherwise, S Ct upholds the FTCs
power to promulgate informal rules to effectuate its purpose to regulate unfair competition and deceptive
trade practices i.e. continues line of cases (Florida East Coast, Yamasaki, Quesada) where court ignores
the congressional language of organic statute to allow agency greater flexibility to carry out its statutory
mandate through informal rulemaking
-

What are the policy reasons for allowing an agency to promulgate rules?
o Streamlines agency process reduces cost of repetitious relitigation of the same issue
o Notice/Reliance Function provides clear std for industry members of their rights,
duties and obligations
o Consistency promotes similar adj for similarly situated parties

17

o
o
o
-

Decreases Litigation results in diminished areas regulatory gaps where litigation

may ensue
Particularize Statutory Std. provides content to vague congressional delegation
Full Participation promotes full participation of all affected parties in notice and
comment period, whereas party in adj proceedings is limited to one industry member

For these reasons, it is the policy of federal courts to promote rulemaking as a method of
developing administrative law

Choice of Regulatory Techniques

Chenery 1st Holding
-

agency has choice to develop new policy through adjudication even when rulemaking is
available (holding SECs choice to determine whether self dealing in corporate reorganization
is unfair and inequitable through adjudication rather than rulemaking is lawful)

Who decides how the agency will proceed?

o Agency procedure is primarily in the informd discretion of the agency
Why would an agency prefer to adjudicate?
o inFOS issues may arise that agency could not anticipate (particularly true in
financial law where financial schemes are innovative)
o uncertainty- agency may not be able to articulate a rule and cas by case analysis is
the only way
o specialized problem
o avoidance of politics rulemaking is highly political
o speedy enforcement rulemaking takes a long time, an adjudication may occur more
rapidly
What are the concerns of an agency opting for adjudication?
o Notice to the regulated
o Participation Loss the regulated interact with the agency in rulemaking/shape
policy not so in adjudication

2nd Holding
-

Reviewing court may only uphold agency action based on the adequacy of the justifications
the agency provides for its action (706 Review limited to issues when presented)
o Court may not substitute (even a valid) justification on behalf of the agency

What is the effect of an adjudicative rule on future proceedings?

Wyman Gordon agency may apply adjudicative rule as precedent but not as a rule
Whats the difference?
o Precedent creates no immediate legal obligation
eg other Corporations have no immediate obligation to abide SEC rule
concerng octane notification obligation only ensues after individual
adjudication
Subject to case by case adjudication
o Rule creates an immediate legal obligation
Binding rule of general applicability

18

If SEC adopted octane notification std through rulemaking, all

gasoline suppliers would be duty bound to do so

Is the agency ever RQed to use rulemaking to resolve a dispute?

o RQT to use rulemaking may arise if party detrimentally relies on the old posture of
the agency
Detrimental Reliance party can show DR by demonstrating reliance on
a long settled policy of the agency to do X, then the surprise of Y in the
particular case
o Regulated party incurs fines/damages w/out proper notice of the amended posture
of the agency
o Party may also attack the agencys statutory power to adopt the new posture
Organic statute does not rxably allow this adjudicative interpretation
Bell Aerospace reiterates the principle that the agency may make policy through
adjudication or rulemaking (holding that the NLRBs decision to adopt a different
understanding of statutory managerial EEEs through adjudication is w/in the
discretionary power of the agency) but in dicta enumerates the instances where an
agency may be duty bound to modify posture through rulemaking
Morton agency is RQed to proceed through rulemaking when internal procedures
mandate agency policy must be published (holding that Bur Indian Affairs may not rely
on unpublished rule to deny benefits to Native American applicants when internal rules
of the agency mandate public adoption of such rules) Why?
o Particular concern for Native Americans based on historic atrocities
o Detrimental Reliance Native American reliance on benefits is rxable in the
absence of published regulation otherwise
Public Citizen agency is RQed to proceed through rulemaking where Congress
explicitly demands so in organic statute (holding that admin agency policymaking
through policy statement is unlawful where Congress requires policymaking to occur
through rulemaking
o Related to Congress Statutory Precision control technique
Congress may control how agencies proceed in their policymaking by
mandating that agencies do so through rulemaking
NB Congress does not have the power to mandate that agency make policy through formal adjudicative
hearing where rulemaking is proper (Florida East Coast Railway/Quesada/Yamasaki/National
Petroleum Refineries despite express Congressional language that agency proceed through hearing,
agency may proceed through rulemaking where adopting a rule of general applicability w/ dispersed
consequences reinforces the idea that agency may proceed as it so pleases w/ judicial encouragement to
do so through rulemaking
Summary of Rulemaking Preference
Storer agency may resolve factual issues of adjudication through rulemaking
Florida East Coast Railway agency may ignore congressional order to use hearing where rulemaking is
appropriate dispose of the issue (rule of general applicability to govern all individuals)
Nat/l Petroleum Refiners permit agency to adopt rules where Congress only intended agency to
prosecute/adjudicate
Public Citizen prohibit agency from adjudication where Congress explicitly RQed rulemaking to
dispose of the issue
Morton agency must make policy through rulemaking when agencys own internal procedures
mandate so
Permission/RQT to Adjudicate

19

Chenery agency may, in discretion, adopt rules through adjudication

Bimetallic/Cf. Heckler agency must adjudicate when rule of general applicability will be applied to a
specific individual uniquely
Formal Rulemaking Baldor
-

When does an agency adopt rules through formal process?

o If an agencys organic statute mandates that a formal hearing procedures for the
adoption of rules be made on the record after an opportunity for hearing (553)
o What are there so few instances of formal rulemaking?
Formal Rulemaking is a very rarely used technique b/c the costs and
inefficiencies that attach to providing it
If agency is unable to adopt rule unless all the interested regulated
parties attend a hearing and have the opportunity to confront
witnesses, present evidence and conduct cross examinations, rules
will never get made
o Result agency will opt out of rulemaking altogether and
proceed through adjudication/policy statements contrary
to court intentions to encourage rulemaking
o Courts will avoid compelling agencies to adopt formal rulemaking procedures
unless Congress expressly shows an intention to track the language of 553 (Florida
East Coast Railway)

Informal Rulemaking the bread and butter of admin lawmaking

-

What are the agencies basic procedural duties in adopting informal rules?
o Notice agency must inform, through, Federal Register, the public of a proposed
rule
o Comment agency must permit interested parties to offere commentary concerning
the proposed rule
o Concise Statement of Basis and Purpose when issuing final rule, the agency
must include an explication of the purposes of the rule that addresses the concerns of
the public as expressed through their comments

What agency pronouncements are excused from these procedures?

o Announcement of agency interpretive rules, policy statements and rules of
internal procedure
Interpretive Rule
an explication/clarification of the existing law
one that lacks legal binding effect (American Mining Congress)
Legislative Rule
administrative law to fill in the statutory gaps Congress left in the
organic statute

Rules relating to military or foreign affairs function

1/ Notice and Opportunity for Comment

Nova Scotia courts will expansively interpret the procedural protections of 553 (holding that agency
failure

20

to disclose the scientific studies, upon which it relied to make rulemaking decision to, to
interested studies abrogates sec 553 by failing to provide interested parties meaningful
notice and meaningful opportunity to comment
to respond to comments of cogent materiality violates duty to make concise statement of
basis and purpose
o Agency only has duty to respond to vital issues/comments Why even this duty?
To ensure that agency carefully considered rxable alternative

Broad interpretation of notice/comment/concise statement duty is countertrend to

encouragement of agency to rulemake
o Why would courts construct this obstacle alongside encouragement to rulemake?
Nova Scotia rule (fish preparation RQT) was Senseless substantively b/c
courts will defer to the legislative choices of an admin agency, broader
procedural protections are necessary to provide courts instrumentality to
compel agencies to reconsider substantive absurdities

What if an agency modifies its proposed rule based on cogently material comments must it
reissue the modification as a new proposal for comment?
o No so long as the modification is a logical outgrowth of the initial rule, agency
can avoid the endless cycle of notice and comment

Can a party in an administrative action introduce new evidence at an adjudication involving an agencys
rulemaking choice?
- No the administrative record is that compiled by the agency during rulemaking procedures
o no Additions to this record can be included on judicial review
o Agency only has duty to respond to vital issues/comments Why even this duty?
To ensure that agency carefully considered rxable alternatives
Broad interpretation of notice/comment/concise statement duty is countertrend to encouragement of
agency to rulemake
o Why would courts construct this obstacle alongside encouragement to rulemake?
Nova Scotia rule (fish preparation RQT) was Senseless substantively b/c
courts will defer to the legislative choices of an admin agency, broader
procedural protections are necessary to provide courts instrumentality to
compel agencies to reconsider substantive absurdities
-

What if an agency modifies its proposed rule based on cogently material comments must it
reissue the modification as a new proposal for comment?
o No so long as the modification is a logical outgrowth of the initial rule, agency
can avoid the endless cycle of notice and comment

2/ Rulemaking by State Agencies

Pacific States Box the APA does not apply to state administrative actions, ergo state admin action must
only comport with Constitutional Due Process of the 14th Amendment (holding that Oregon restriction of
fruit boxes to those that are round satisfies the rational basis test, ergo rule is upheld)
- Rational basis test is applicable to state agencies/municipalities/ordinances when action is
w/in the power delegated
o What if Nova Scotia had been subjected to the same review as Pacific States Box?
Fish preparation rule would have been upheld as valid exercise of the
police/public health power where state was rationally concerned for the
safety of its citizens based on exposure to toxic fish
Lesson

21

Absent APA agency processual duties would be equivalent to rational basis test
APA provides arguably equivalent substantive protection
o Arbitrary, capricious, abuse of discretion standard of review is arguably the
administrative equivalent of an economic classification review
But APA can arguably be used as an instrument tol protect against substantive action

3/ Duty of Agency to Consider Alternatives and Basis for Actions in Rulemaking

Motor Vehicle Manufacturers - esta numerous rules that agency must follow in rulemaking
- Agency failure to consider rxable alternatives (other suggestions by consumer groups
concerning safety belt rules) provided in comment period = agency choice that is
arbitrary/capricious Why?
o Agency cannot make a rational choice if it fails to consider all the rational
alternatives
Agency only has to consider/answer cogently material alternatives (Nova
Scotia)
- Agency has duty to show rational connection between facts found and choice made- from
whence this responsibility?
o Concise Statement of Basis and Purpose??
o 706 Arbitrary, capricious etc
Agency action for which there is no factual support would appear to be the
definition the arbitrariness and caprice
- Agency uncertainty what is the agencys responsibility to inform the public when it is
genuinely uncertain what the best policy is?
o must show rational connection between facts found and choice made
- Agency rule modification?
o Must give reasoned analysis of why change is necessary- what has changed
Lesson
In rulemaking, the agency must consider the rxable alternatives that interested parties supply and
must explain the factual predicate for the regulatory choice it makes.
4/ Interpretive verse Legislative Rules
American Mining
-

What is the practical significance?

o Regulated party will challenge agency citation of interpretive rule as governing in
adjudication How?
If agency intends promulgation to have legal effect, it must do so through
rulemaking procedures
What will the agency say?
o We have discretion to fulfill our statutory duty through adjudication or rulemaking
ergo, as long as interpretation is within the statutory mandate we can spring it on
you in adjudication or adopt through rulemaking
Whats the test to distinguish an interpretive from a legislative rule? legal effect
o Is agency precluded from taking enforcement action in the absence of a legislative
rule?
If answer is no, then character of rule is irrelevant b/c agency can make
policy through adjudication
o Did agency invoke general legislative authority to pass rule?
o Does th rule amend a prior legislative rule?

22

Is the rule published in the CFR?

If answer is yes to any of these questions, then the rule is legislative

Idea
Courts want agency to be able to adopt interpretive rules that it can follow in adjudication to notify
regulated parties of their duties prior to adjudication if courts find that rules which agencies profess as
interpretive are actually legislative, agencies will have perverse incentive to give no guidance as to
interpretation of statute and make policy strictly through adjudication
Why do agencies opt to read in more extensive procedural protection from APA instead of
overruling agency action on substantive grounds (arbitrary, capricious etc.)?
- Allow agency flexibility
- Maintain proper balance of expertises
o Agencies are experts at the substantive filed over which they regulate
Ergo they deserve deference in the substantive decisions they make w/in the
field
o Courts are experts at procedure
Ergo, scrutinize agency consistency w/ the procedures in the APA
5/ Hybrid Rulemaking
What is hybrid rulemaking?
- An attempt to combine the efficiencies values of informal rulemaking with the participatory
values of formal rulemaking - increase the participation level of rulemaking w/out incurring
the paralysis of formal rulemakin
Vermont Yankee except in extremely rare circumstances, the courts may not compel agencies to employ
rulemaking procedures that exceed the scope of the APA
- What was the legal basis of nhybrid rulemaking?
o An expanded understanding of these RQs
Notice
Comment
Concise statement of Basis and Purpose
o as those terms were expansively interpreted in Nova Scotia/Motor Vehicle
Manufacturing
o Why did court limit judicial auth to compel such procedures?
To allow greater judicial authority to compel rulemaking procedures would
frustrate express congressional will as expressed through the APA
If court provides greater procedural obstacles in informal rulemaking,
agencies will have incentive not to adopt rules and to make policy on a case
by case adjudicative basis
Such a result runs counter to the desire to have agencies proceed
through ruylemaking as extensively as possible
6/ Politics/Ex Parte Contacts in Rulemaking
Sierra Club so long as agency is engaging informal rulemaking, receipt of comments after the
comment period and ex parte contacts w/ Congress men and the President are permissible
- Receipt of comments after comment period expires is OK as long as the agency
o Documents the comments of central relevance in the record Why?
Exhibit rational connection between facts found and choice made

23

Exclusion of centrally relevant factors lacks the requisite rational

connection
Recognition of political realities of DC rulemaking

Discussions w/ Congressmen are OK b/c

o Congressmen are citizens for purposes of informal rulemaking
o Represent constituents who have an interest in rulemaking
o However, there are two limitations on ex parte contacts w/ Congressmen
Improper in adjudicative context (Pillsbury)
Improper if agency bases action on Congressmen suggestion that is
irrelevant to the statutory mandate of the agency (Volpe)
o Comments of central importance from Congressmen must be included in the record
also

Discussions w/ the Pres are OK Why?

o b/c agencies are part of the executive branch
o power being exercised is executive = president
o political realities Pres will often be interested in the policymaking choices of the
admin agencies
o What if Pres pushes agency to do X when X or Y is w/in the congressional mandate
and the agency head chooses X b/c the pressure?
As long as agency head is w/in Congressional mandate, his explanation for
action is unreviewable

Lesson
Court does not want to judicialize the inherently political nature of the administrative process.
7/ Bias in Rulemaking
Association of Natl Advertisers unless member of agency exhibits, through clear and convincing
evidence, an unalterably closed mind on matters pertinent to the disposition of the rulemaking, she will not
be disqualified from participation (permitting participation of Commissioner of FTC in rulemaking after
public comments that advertising to children was an evil that was necessary to eradicate) Why?
-

Pres chooses agency heads for their expertise and strong opinions on subject matter to
eliminate officials w/ these opinions would wholly depoliticize what arguably are political
posts
Courts do not eliminate legislators from participation in legislation b/c the strength of their
views
Same principle applies in admin rulemaking
If rulemaking is w/in the discretion Congress provided, agencys motivation for enacting rules
is not subject to review

What about concerns for an impartial decisionmaker?

- Decisionmaker is permitted a predisposition on the subject matter
- Not an adjudication
When would an administrator be disqualified?
- Clear financial interests in the subject matter
Judicial Review of Administrative Action
1/ Scope of Review What is the standard of review of admin action?

24

Generally
702 A person suffering a 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
- Courts interpret 702 tp provide Presumptive Review of all agency action
- There are however limitations to the review - Pitts
o Procedural
Court takes the record as developed by the agency in their proceedings
Ct has no power to develop a factual record of its own
If Ct determines that record is incomplete, it must remand for
further development (think Motor Vehicle/Nova Scotia remand
to agency to consider rxable alternatives presented, to further
explain the rxing of their rulemaking choice)
o Substantive
Courts typically review of the substance of agency action is limited to
overriding agency action that is arbitrary and capricious (706)
Could a rxable person have made the decision of the agency given
the factual record they had developed?
Overton Park remand an agency decision for which there is an incomplete record and an inadequate (or
absent) rationale for the action taken
- agency action entitled to presumption of regularity/court may not substitute its judgment for
that of the agency
-

the appropriate standard of review is governed by 706 of the APA

o Review for arbitrary, capricious or abuse of discretion or otherwise not in
accordance with law is always available
o Review for substantial evidence is available for agency formal rulemaking/public
adjudicatory hearings (706(e))
o De Novo review is available when
Agency adjudication at which agency factfinding procedures were
inadequate or
When issues not before the agency are raised in a proceeding to enforce a
rulemaking What does this mean?
Court may indulge in de novo revies to consider just for a
rulemaking hat were not offered during the rulemaking

Post Hoc Rationalizations are an inadequate basis for review Why?

o Reviewing court decision is limited to the record developed during the agency
action ergo explanations that postdate the action are not part of the record
o Practical Result of Exclusion of Post Hoc Rationalizations from the record
Agency will provide clear explanation of purposes and findings
contemporaneously
When they do not, issue will be remanded to agency for further
development of the record

NB In special circumstances, administrative officials who participated in the decision may be compelled to
give testimony.
Issues of Fact
-

To determine the scope of factual review of agency factfinding, look to the APA (706) and
the organic statute

25

If the organic statute specifies a different std. of review then the APA, then apply the
std. of review in the organic statute presumption that Congress intends what the
do and that they intend a different std.

Formal Rulemaking/Adjudicatory Hearings = Substantial Evidence on the Record as

a Whole (706 (e))
What is substantial evidence?
evidence that rxable mind would accept as sufficient to support a
conclusion
Universal Camera formal rule of the NLRB is subject to
substantial evidence test
o Substantial evidence refers to the entire record, not just
consideration of the weight of the evidence supporting the
agencys conclusion
o ALJ findings are part of the record of the administrative
agency
o What if the ALJ and the agency reach a differtent
conclusion based on the factual record?
Reviewing court is more likely to overturn the
agencys ruling .

Informal Rulemaking = Arbitrary, Capricious, Abuse of Discretion or otherwise not

in accordance w/ law
ADAPSO factual review of informal rule for arbitrariness/caprice =
factual review for substantial evidence of a formal rule/adjudication
Statute at issue in ADAPSO indicates that review was for substantial
evidence Why didnt the DC Circ. rely on the statute for their ultimate
holding that review of factual findings would be equivalent substantial
evidence?
Set precedent for equivalence of factual review of agency action
regardless of the context uniformity

Since ADAPSO equated the substance of factual review of rulemaking with that of formal
rulemaking/adjudications, is there any difference between review of factual findings in
rulemaking and those in adjudicatory settings?
o Yes
Greater deference to rulemaking=legislative facts
State Farm rational connection between facts found and choice
made
Greater scrutiny to adjudicative setting=judicial facts
Implicates courts expertise no invasion in the legislative
expertise of the agency

Issues of Law
706(2)(A) Court can set aside agency action not in accordance with law
What standard of review do reviewing courts apply standard when an agencys administration of a
Congressionally delegated power is contested as not in accordance with law/beyong their statutory
authority?
Chevron Two Step

26

1/ If Congress clearly and unambiguously expresses its intent regarding the underlying subject matter, then
the agencys action must conform to Congressional intent.
2/ If Congressional intent is ambiguous regarding the underlying subject matter, then any rxable agency
interpretation is acceptable.
- Agency interpretation does not have to be the only rxable interpretation or even the best
interpretation, it only has to be rxable.
o The courts may not substitute their interpretation (even if better) for a rxable
agency interpretation
- Chevron test is one of high deference. It empowers the agency to adopt any rxable interpretation of the
congressional delegation regardless of other rxable competitors so long as Congress has no expressly
authorized the agency to act differently.
- Why might the courts provide the agencys such deference in legal matters pertaining to fulfillment of
their congressional mandate?
- Delegation Theory Congress implicitly or explicitly delegates to the agencies the power to
fill in the statutory gaps that it leaves open through legislation
o If Congress wishes to constrain the agency, it may do so through greater statutory
precision/oversight/legislative amendment etc.
- Expertise Theory Agencies possess a particular skill in their field that positions them to
understand the congressional delegation
o Problem Does agencys field expertise exceed the courts expertise in construing
Congressional statutes?
Cardozo Fonseca in matters of pure statutory construction, agency
interpretation will receive no deference
- Political Theory as agency action is identified with an elected Pres, adherence to the theory
that those accountable to the people should make/enact the law dictates that agency, not
appointed judiciary, should make the call
o Problem Doesnt court, in legal review, play the role of protector of Congressional
intent the true direct representatives of the people thus abdicating legislative
power to unelected agency/Pres?
- Uniformity to ensure distinct reviewing bodies do not interpret the authorization of power
differently, it is necessary to allow the agency, as centralized decisionmaker, to adopt the
interpretation
- Process Theory agency process (APA) protects individuals against arbitrary action and
allows concerned individuals to participate in the interpretation of the statute
o Problem What if the agency is hostage to particlaurized powerful interests who
skew the final interpretation in conformity to their interests?
What is the outcome of Chevron on the powr distribution amongst the three branches?
- Power transfer to the executive through the agencies to boadly define what Congress
meant in its legislation
o Counterpoint Congress can retain its power by speaking clearly- statutory
precision
but the ability to precisely elucidate s limited by the inherent ambiguity
of language, ergo agencys can almost always argue that the statute is
unclear and subject to their rxable interpretation

27

Chevron Redux Limitations on Judicial Deference to Agency Interpretations

When does an agency interpretation not receive Chevron deference?
- Constitutional interest implicated
o Congress may not delegate authority to the admin agencies to interpret the Const.
- Interpretation of a statute that is not the agencys organic statute or

Arabian American Oil agency w/out rulemaking power does not receive Chevron deference
receives Skidmore deference Why?
- Delegation Theory Congress did not intend to delegate to an agency w/out rulemaking power,
ergo such an agency is not subject to deference
- What level of review does an agency w/out rulemaking power receive?
Skidmore agency must persuade court that its interpretation of the statute is legally sound
rather than rely on the simpler explanation that the interpretation is rxable
o How does it persuade?
thoroughness evident in consideration of issue
consistency w/previous interpretations (Good Samaritan-denying
deference where agency waffled on interpretation of statute)
its reasoning
Lechmere agency interpretation that is inconsistent with a pre Chevron Supreme Court ruling on the
matter receives no deference
Good Samaritan agency interpretation that is inconsistent w/ previous agency interpretation is due
considerably less deference
- Problems
o If more than one rxable interpretation of the statute are available and an agency opts
to implement a policy change to a different, though still rxble, interpretation, wasnt
it the purpose of the Chevron to shield such decisions from scrutiny?
Discourages/restrains agencies from adopting all rxable interpretation
Williamson Tobacco Company in extraordinary cases, a court, despite the statutes ambiguity, may find
that Congress could not possibly have intended an implicit delegation (affording no deference to the FDAs
interpretation of their governing statute to permit them to regulate cigarettes as drug)
- What makes a case sufficiently extraordinary that a court may play a role in determining
whether Congress implicitly delegated authority to an agency?
o If the power exercised would have widespread economic and social consequences
Why?
Presumably, Congress would not delegate such sweeping powers over
matters that it, itself, would normally govern
o Could Congress possibly have meant this?
It seems a stretch to believe Congress would empower the FDA to classify
cigarettes as a drug when the FDA is empowered to ban drugs
Case Study Could Congress possibly have intended to ban the migration
of constituents when all environmental legislation focuses on hazardous
waste
o Is there other legislation which indicates Congress could not have intended this?

28

Congress regulatd the legality of cigarettes elsewhere

Case Study other legislation focused on hazardous waste not hazardous
constituents

Mead only agency action that has the force of law receives Chevron deference, ergo interpretive
rules/policy statements do not receive Chevron deference (holding that tariff reclassifications adopted as
interpretive rules, upon review, are subject to Skidmore (see above) not Chevron deference)
- How does the ruling in Mead affect agencies?
o Encourages them to adopt policy through notice and comment rulemaking which
will be subject to greater deference
2/ The Availability of Review Are there statutory or constitutional doctrines that preclude the
precise issue from review? Are there statutory or constitutional doctrines that preclude the
particular party from obtaining review?
Preclusion (What agency action is reviewable?)
- Congress may rebut the presumption of reviewability of agency action in two fashions
I. 701(a)(1) Congress may preclude review of agency action
o For preclusion to be effective, Congress must evince a clear and convincing intent
to forbid review
o Constitutional Avoidance on review of a constitutional challenge to agency
action, court will attempt to avoid the Const issue whether Congress can preclude the
exercise of federal judicial power over const questions by focusing on the Const of
the statute itself rather than the agency action
o Congress may not preclude constitutional claims except by explicit prohibition
Johnson- preclusion of review of agency action under the statute does not
preclude the court from considering the legality of the statute itself i.e.
examine the legality of Congress statute
o

Why would Congress preclude review of agency action?

Efficiency Purposes assurance that agency decision is final reduces
expenses of judicial appeals
Avoid Politicization unseemly to allow veterans benefits issues to be
major sources of dissension
Avoid Agency Paperwork Burden if review looms over the agency, then
it must create a sufficient record to substantiate its choices on appeal
This can be a positive effect of review too
o Agency record ensures facile review and
contemporaneous justification for action tha courts will
defer too
Overton courts more heavily scrutinize post
hoc rationalizations

Channeling Review organic statute mandates that affected party exhaust

administrative remedies or proceed through a certain amount of administrative hoops
before judicial review

29

Weinberger channeling is unquestionably constitutional there is no

deprivation of review as in preclusion, merely more hoops to traverse
before review
Reno court will scrutinize personal liberty claim with great care despite express
preclusion within the statute

II. 701(A)(2) commitment to agency discretion

- Congress may limit court power to review those decisions that it expressly provides exclusive
discretion to the agency to make
o If the delegation of authority to Congress is so broad that court has no meaningful
standard to appyl to statute upon review, then Congess has evinced its intent to vest
exclusive discretion in the agency to make the decision
Delegation Problems if there is no meaningful legal standard upon which
to examine agency action, hasnt Congress conveyed power to the agency
w/ no intelligible principle to guide the agency action
As long as discretionary power is only over a narrow field, w/
slight national consequences, the delegation is OK
o Can the agency commit Constitutional questions to the exclusive discretion of the
agency?
No at least w/out an express, unequivocal denial of review of
constitutional claims
o

Webster statutory delegation to the CIA director to do as he deemed in the

national interest leaves no meaningful standard of review for court to apply upon
review, ergo commitment to agency discretion
Plaintiffs statutory claim of arbitrary/capricious lawmaking is
nonreviewable
Plaintiffs constitutional claim of due process violation is reviewable

Heckler presumption of nonreviewability of agency decision not to take

adjudicative action Why?
commitment to agency discretion inheres in the choice of agency actions
Analogue of Prosecutorial Discretion
Scarce Resources - deference to agency expertise in allocation of
resources
In inaction, there is no exercise of coercive power over individuals
to which the courts are specially equipped to review
When is agency adjudicatory inaction reviewable?

When Congress provides clear and explicit guidelines to which

agency is to conform its action and the agency fails to
abide/follow/adopt the guidelines

American Horse Association presumption of reviewability of an agency refusal to

begin rulemaking procedures for arbitrariness and capriciousness (holding that
agency head must provide reasoned explanation for refusal to adopt rulemaking
proceedings)
Akin to Motor Vehicles/Nova Scotia agency has procedural duty to
explain its decisions whether they be of action or inaction
Remand to the agency for an reasoned explanation of their refusal
to begin rulemaking post hoc rationalizations of the agencys

30

failure to act will receive less judicial deference than a

contemporaneous record that explains the decision
But court would not order agency action but in rarest/most
compelling circumstances

Ripeness (What is appealable?) emanates from the Art III case or controversy RQT i.e. judicial
power of the US may only be exercised when there is a case or controversy
- How can this doctrine be expressed?
o Court Protective judiciary avoids entanglement in abstract disagreements
concerning admin policies
o Agency Protective prevents the judiciary from intervening in admin matters before
they have been resolved
- What is the particular context in which ripeness issues arise?
o When adversely affected industry members challenge admin policy preenforcement
- What is the test for whether a pre-enforcement challenge to an admin policy is sufficiently
ripe for review
o Judicially Fit Claim
Pure Legal Questions

If the court will be reviewing agency policy strictly for its

lawfulness, this is an indicator of fitness
Finality
If review will revolve around completed agency proceedings, this
a 2nd indicator of fitness
o eg A rulemaking that has been adopted after notice and
comment is final
o eg A proposed rule which is in the midst of the comment
period is not final
o 704 Any agency action is final unless
Organic Statute explicitly provides action is not
final until further proceedings or
Agency Regulation explicitly provides that
action is not final until appeal to superior agency
authority
o Hardship
Are the financial affects of the challenged agency action direct and
immediate?
Is it necessary for the regulated party to modify immediately its behavior to
conform to the agency mandate?
o

Where the affected party can show that agency action is final, the challenge involves
a purely legal question and immediate economic hardship ensues from the order,
the affected partys claim is rile for review
Abbott Laboratories challenge to authority of FDA order to advertise
the generic name of drug every time the proprietary name was advertised
presented a purely legal question concerning a final agency action that
delat the aggrieved an immediate economic injury= Ripeness

It is necessary for the challenging party to show all three prongs are present
Toilet Goods though a regulation to suspend the licenses of manufacturers
for refusal to allow inspections was final and presented a pure legal

31

question, specific manufacturer incurred no immediate hardship from the

mere announcement of the license suspension order= Not Ripe
o

What are the policy consideration that underlay the ripeness doctrine?
Admin Fleshing Out
Specific factual scenario will allow courts a focus upon which to
base review
Agency Mission
Courts should allow agency to completely resolve its policy
pursuant to its admin mission prior to legal examination of the
action
Prompt Resolution
The earlier the courts pronounce their sentence on the actions,
the earlier the agency may enforce a policy upheld or adjust a
policy denied
Concurrent Enforcement
Agency may enforce their policy while the court is mulling its
legality
o Affected parties will seek stay/temporary injunction
until a court decision comes down

Exhaustion
Basic Rule - long settled rule of judicial administration that no one is
entitled to
judicial relief until the prescribed administrative remedy has been exhausted (Myers)
-

Why does the rule of exhaustion exist?

o Agency Respect
Respect agency autonomy to make final decision in area of expertise
Courts should not countenance/encourage flouting of administrative
process in favor of judicial remedies
o Adjudicative Efficiency
Allow the agency to develop a complete factual record before review
Agency may resolve the underlying dispute in favor of the appellant if
allowed to completely adjudicate (conserve scarce federal court
resources)
Civil Procedure Analogue no interlocutory appeals so as to avoid
appeal of each decision of admin agency

Retrospective Exhaustion litigant challenges adverse admin action in federal court despite
her failure to exhaust admin remedies b/c the SOL on administrative appeals has lapsed
o Rock and a Hard Place admin SOL precludes admin appeal and exhaustion
forecloses the federal courts from hearing the claim
o

How do the federal courts avoid the harsh rock and a hard place situation to assert
JD to hear the claim?
McKart - Application of the exhaustion doctrine in specific cases requires
an understanding of its purposes and the particular administrative scheme
involved (holding that exhaustion does not apply to case of alleged draft
dodger given the particular structure of the Selective Service System and
the circumstances of the case)
Upholding exhaustion in criminal case would be particularly
harsh

32

Threat of criminal sanction mitigates fears of admin

flouting
Draftees are not likely to flout admin remedy
when dodging carries 5 year sentence
no invasion of agency autonomy/respect/premature
interruption where agency process is complete b/c SOL has
lapsed
McKart presented a pure legal question no factual record
necessary for review
o

Does the APA require exhaustion of all admin remedies?

o NO - 704- Final agency action is subject to judicial review
An agency action otherwise final (Abbott) is final (and thus subject to
judicial review) unless
Organic Statute expressly provides otherwise or
Agency Rule
o Requires otherwise and
o Deems action inoperative
o For an appeal to superior admin agency
o

Therefore, unless organic statute deems the action not final or the agency does so
itself by regulation, all agency action otherwise final may be appealed to federal
courts
Darby agency provision of option to seek reconsideration of decisions of
ALJs does not require party who receive adverse ALJ ruling to exhaust
agency remedies through reconsideration where neither the agency organic
statute or agency rule requires so
Menedez default judgment = final agency action subject to judicial
review in absence of agency reg or organic statute announcement otherwise

Would the modern interpretation of 704 have precluded the exhaustion ruling in Myers?
o No the action appleaed in Myers was not otherwise final it was only a formal
charge

Lesson If an agency wishes to ensure that a regulated party exhausts her

administrative remedies before seeking judicial review, then it must explicitly do so by regulation in the
event their organic statute does not require it.
Q. What if the organic statute proscribed agency attempts to require regulated parties to exhaust
admin remedies?
o Congressional will would trump agency attempt to control adjudication through
provision of exhaustion
Impede the executive in the performance of his Const duty
Standing in administrative law, the doctrine is a mixture of Constitutional and Statutory
authority that limits the exercise of federal judicial power to those instances where there is
sufficient adversity between the proposed parties
-

What are the basic standing limitations on federal courts?

o

Injury in Fact the complaining party must show Governmental action that results
in an injury, economic or otherwise, that society recognizes

33

ADAPSO government decision to allow banks to provide Data

Processing Services has injurious effects on the business of Data Processor
provider plaintiff
Extends to aesthetic, conservational or recreational injury
Sierra Club injury must be to specific legal person, ergo association
itself does not have standing to sue
Associational Standing/Washington Apple association may sue
on behalf of its members where
o Members have standing independent of the
association
o Associations purpose is related to the purpose of
the suit
o neither the claim nor the relief sought require
individual participants i.e no monetary relief is
sought
Lujan injury alleged must be temporally imminent to have requisite
concrete injury
Schlesinger generalized grievance one whose injury is dispersed
across the population does not satisfy injury in fact std. Why?
Taxpayer suits
Political process is the remedial venue for generalized grievances
(Bimetallic)
Problem Schlesingers suit alleged Constitutional claims, can
an admin agency violate the Const, subject only to political
controls, as long as the violation is dispersed generally across the
population?
Havens Realty- black testers, white testers and real estate company
suufere injury in fact from racially discriminatory real estate company that
is steering blacks away from white neigborhoods
Black Testers denied truthful information about housing that
Fair Housing Act protects
White Testers denied opportunity to live in an integrated
neighborhood
Realty Company increased costs through housing limitation
based on steering=economic injury=standing
Where does the injury in fact test come from?
Art III For the federal judiciary to exercise its power, there must
a sufficient showing of adversity to satisfy the case or controversy
RQT of Art III.

Zone of Interests the interest sought to be protected must arguably be within the
zone of interests to be protected or regulated by the statute or constitutional
guarantee in question
ADAPSO Data processor arguably w/in zone of interests of legislation
restricting banks from providing non-bank services b/c implied purpose of
the Act is to restrict anti-competitive behavior by banks
Air Courier Conference Court must inquire as to whether Congress
intended the aggrieved party to be protected by the relevant statute
Since Congress merely intended to protect postal revenues
through the creation of postal monopoly, postal workers lack
standing to challenge suspension of the monopoly
National Credit Union court should not inquire into whether there has
been a Congressional intent to benefit the plaintiff proper inquiry is that
announced by ADAPSO

34

Where the partys interest is the same as those the statute intends to
protect, the party has standing (holding that since banks have
interest to keep the size of credit unions small as was the purpose
of the statute, they have standing)
o Collapses the zone of interests test into the injury in
fact test Why?
If one is injured in fact by a statute, then the
injured party will invariably have the same
interest as those Congress intended to protect in
seeing the statute properly enforced
Where does the zone of interests test come from?
702 Person aggrieved by agency action within the meaning
of the relevant statute is entitled to judicial relief.

Causation/Redressability in order for the federal judiciary to exercise its power, a

party must show that
the injury suffered is fairly traceable to agency action and
there is a substantial likelihood that a finding for the party will redress the
injury alleged
When are parties found to lack standing b/c they fail to show sufficient cx
between Govt action and the injury or b/c the court determines that a ruling
in their favor will not remedy the harm alleged?
Warth/Linda/Simon/Allen where the party is seeking to hold
the Govt to task for a harm that is actually caused by a private
party (though in some cases Govt action could modify the
incentive structure of the private party)

35

36