Admin Law: Wright

(Power of agencies to legislate; Non-Delegation Doctrine)

Takeaway: Functionality; cannot expect Congress or Court to deal with or make all the binding rules required, especially if they do not have the knowledge, time, or budget.

FACTS: Dispute over milk prices → milk on different trains to different places had different rates. Groups of shippers complained to the MO RR Commission that rates were unreasonably high. RR Commission agreed and changed all prices to 2.5 cents/10 gallons - this would be "equal and reasonable" as ordered in the only governing statute. The commission then brought an action in state court to compel the railroad to obey its order. State case, not federal.

RULE OF LAW: The powers given to the Commission are an acceptable conferring of authority to make decisions in pursuance of existing law - not an improper delegation of legislative authority. 2) It is constitutional for a statute to deny courts the power to review a determination by an agency, setting certain rates as reasonable.

(Congressional powers; nondelegation doctrine)

Statute said you had to take all of the chickens or none. The statute delegated authority to private actors (trade associations) to determine what is fair trading practice.
Court finds that this is an unconstitutional delegation of legislative authority
Today, non-delegation is dead on the federal level, but alive and well on the state level

The sick chicken case/Non-delegation doctrine
Cardozo: "This is delegation running riot.")

FACTS: Slaughterhouse operators convicted of violation of the Live Poultry Code for bunch of things including selling "unfit" chickens. Rule says all chickens must be good selling quality.

RULE OF LAW: Congress may not delegate legislative power to the executive without outlining strict standards for how the executive is to exercise that power.

(Intelligible guiding principles/Nondelegation doctrine)

Not a Supreme Court case; decided by Leventhal, an admin law hero.

Facts: The President issued an executive order that established a temporary freeze on price and wage increases for the meat packing industry.

Holding: Yes, order upheld. The court states that in this case, the authority granted to the President does not exceed an intolerable level. However, there are limits relating to whether the delegation achieves an overall fairness in terms of the eventual power distribution. The eventual distribution of power cannot be grossly inequitable. Moreover, the delegated authority must be temporary - as in, there must be an expiration date. Congress can grant the President temporary war power authority, for instance.

In delegating its authority, Congress must outline the broader policy and provide some guidelines for the policy's execution through a description of conduct. The idea is that Congress cannot simply delegate its authority to the Executive to avoid public accountability. It is their duty to legislate and must be held electively accountable.

Reasoning: One of the reasons this statute was held constitutional is congress's grant of authority to the president was temporary. Limited duration helps make the granting of power less unconstitutional.

The Benzene Case; Reasonable and Show Proof

OSHA occupational exposure limit to beneze;

RULE OF LAW: The Secretary of Labor must determine, prior to issuance, that an OSHA standard is reasonably necessary and appropriate to remedy a significant risk of material health impairment.

Facts: Acting under authority of the Occupational Safety and Health Act of 1970, the Secretary of Labor, after having demonstrated a link between exposure to benzene and leukemia, set a standard reducing the airborne concentrations of benzene to which workers could be exposed. The standard reduced the allowable amount from 10 parts per million (ppm) to one ppm. This case was decided together with Marshall v. American Petroleum Institute.

Reasoning/Holding: Nothing in OSHA's administrative record indicated that exposure to benzene at 10 ppm would cause leukemia and that exposure to one ppm would not. Since the Secretary had not made a threshold finding that exposure to 10 ppm posed significant health risks, he was powerless to promulgate the new standard.

Removal of Postmaster (Executive Branch)

Facts: Postmaster in Oregon; subject to removal by President and Senate (power grab by Senate)

Holding: Postmaster is a purely executive branch official; President should have sole removal authority

RULE OF LAW : The power to remove subordinates is inherent in the constitutional power of the President.

Executive branch officials; Congress' power to restrain President's removal power

Federal Trade Commission (quasi-adjudication); they make binding rules

Holding: President still removes, but there are restraints/limitations (can't remove because of partisanship, can't remove without cause, if you show good cause, it can be litigated.

The Court reasoned that the Constitution had never given "illimitable power of removal" to the president. Justice Sutherland dismissed the government's main line of defense in this case which relied heavily on the Court's decision in Myers v. United States (1926). In that case the Court upheld the president's right to remove officers who were "units of the executive department."

The FTC was different, argued Sutherland, because it was a body created by Congress to perform quasi-legislative and judicial functions. The Myers precedent, therefore, did not apply in this situation.

RULE OF LAW: The President cannot remove officials whose agency functions are quasi-legislative and quasi-judicial in nature, and not merely extensions of the Executive Branch of government.

(Bicameralism and Presentment)

Facts: Visa expires, and he remained in the US. He was ordered to be deported. The Attorney General suspended the deportation. The House passed a resolution that overturned the AG's decision.

Rule: Where the House takes actions that have the purpose and effect of altering legal rights, duties, or relations of persons outside of the legislative branch, bicameralism and presentment are required.

Issue: Did the Immigration and Nationality Act, which allowed a one-House veto of executive actions, violate the separation of powers doctrine?

Holding: The Court held that the particular section of the Act in question did violate the Constitution. Recounting the debates of the Constitutional Convention over issues of bicameralism and separation of powers, Chief Justice Burger concluded that even though the Act would have enhanced governmental efficiency, it violated the "explicit constitutional standards" regarding lawmaking and congressional authority.

The most important innovations in President Reagan's Executive Order 12,291 were: (1) a set of substantive principles for all agencies to follow, "to the extent permitted by law," including a commitment to cost-benefit analysis; (2) a requirement that a Regulatory Impact Analysis, including cost-benefit analysis, accompany all "major" rules; and (3) a formal mechanism for OMB oversight, with a general understanding that OMB had some (undefined) substantive control over what agencies would actually do.

(Power of Agencies to Adjudicate) Injury on navigable U.S. waters
This is the first time that a court allowed an administrative agency to adjudicate non-agency specific issues like issues of constitutionality

FACTS: Benson sued to enjoin enforcement of a worker's comp claim made by Crowell (D), a deputy commissioner of US Employee's Compensation Commission, contending the enabling act was unconstitutional in that it vested adjudicatory power in adm agency.

CURRENT LAW: A Pragmatic Test = Today cts use a pragmatic test to determine whether the assignment of adjudicatory functions to an agency violates the separation of powers.

Constitutional fact doctrine (private right that bear upon your constitutional rights)= degree of deference is less if talking about a constitutional right being implicated

(The power of ALJ's decision in Board's review)

NLRB v. Universal Camera Corp. (I): Rule of Law: A court of appeals is barred from considering the report of an examiner on questions of fact insofar as the report was rejected by the NLRB.

NLRB v. Universal Camera Corp. (II): Rule of Law: A court of appeals is not to completely disregard an examiner's report which has been rejected by the NLRB (P) in its findings of fact, but must inquire into whether the report was overruled based on a very substantial preponderance in the record.

Universal Camera Corp. v. NLRB: Rule of Law: A reviewing court may set aside factual findings of the NLRB when such findings are found not to be supported by substantial evidence in the record viewed as a whole.

The Maximum Freight Case
Just Compensation Case

RULE OF LAW: The fixing of rates must be based on the fair value of the property being used by a corporation for the public convenience to ensure the corporation receives just compensation for its services.

Facts: The Nebraska Legislature set a maximum rate on railroads operating within the state which precluded the railroads from recovering their operating expenses.

Reversed Smyth v. Ames

Fact review is dead

Facts: Ratemaking not for court to decide
Courts are not going to 2nd guess what rate is fair; cts have neither time nor expertise to understand technicalities of ratemaking
Reviewing courts are left with nothing in particular to focus their reviews on
Utility rates are complicated, lots of documents and very lengthy Utility tells commission how wrong they are and judge cannot be more educated on matter than commission, more deference to agency

Rule: A just and reasonable rate order, once found to be so, is not subject to further judicial review, regardless of the infirmities of the method employed.

Import of birds that were illegal to export from Indonesia and Customs didn't catch it.

ISSUE: Dispute over which definition to use for 'wild bird': One definition (govt) = wild bird normally found in the wild state and other (importer)= a bird that no one has any success in domesticating - not bread in captivity - untamed parrots - no breeding of parrots

HOLDING: parrot are wild and agency wins because
1) agency's definition of wild more convenient, lower cost, easier to implement than importer's definition
less fact specific: no testimony
can quickly look up info in almanac or parrot book
faster and cheaper, even if not best definition
2) Congress wants ct to defer to agency decision just b/c they are the agency
agency under political control, ct under Article III

Agency has advantage over court if technical term

The case concerned the meaning of the term "employees" in the National Labor Relations Act
The NLRB found that newsboys selling Hearst (D) newspapers were employees under the NLRA and therefore Hearst was ordered to engage in collective bargaining with their representative.

Holding: When reviewing an agency decision involving a mixed question of law and fact, courts review (1) the facts found by the agency to determine whether the agency's conclusion has "warrant in the record" and (2) the agency's explanation of its decision to determine whether the decision has a reasonable basis in law.

Rule: A reviewing court must accept an agency's application of a broad statutory term if such application is supported in the record and has a reasonable basis in the law.

Facts: Employees did not receive overtime pay for waiting on alarms because company said it wasn't working hours according to Fair Labor Standards Act.

A decision holding that an administrative agency's interpretative rules deserve deference according to their persuasiveness.
The opinion introduced a test for determining the deference to be given to an administrative agency's rules.

The four-factor test examines: (1) the thoroughness of the agency's investigation; (2) the validity of its reasoning; (3) the consistency of its interpretation over time; and (4) other persuasive powers of the agency.

Chevron Two-Step

First, always, is the question whether Congress has directly spoken to the precise question at issue. If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress.

If, however, the court determines Congress has not directly addressed the precise question at issue, the court does not simply impose its own construction on the statute . . . Rather, if the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency's answer is based on a permissible construction of the statute.

FACTS: Under the Fair Labor Standards Act (FLSA), government employers are required to offer compensatory time (comp time) to employees that work overtime. The FLSA states that employers must reasonably accommodate employees' requests to use their accrued comp time. The FLSA also outlines circumstances under which the employers have to compensate employees for accrued comp time. Harris County (defendant) became concerned that it would not be able to afford to compensate all of its employees for their accrued comp time. As a result, Harris County sought to mandate that its employees use their comp time to take time off. Harris County wrote to the U.S. Department of Labor (DOL) asking if this practice was permitted under the FLSA. The FLSA does not explicitly allow or prohibit employers from requiring that employees use that comp time. DOL staff responded that an employer could compel the use of comp time only if the employee agreed to the practice in advance. Subsequently, Harris County adopted a policy allowing supervisors to mandate that employees with a lot of comp time use the time. Christensen, et al. (plaintiffs) were deputy sheriffs in Harris County that were ordered to use their comp time. The plaintiffs brought suit, claiming that Harris County's policy violated the FLSA.

RULE OF LAW: When contained in an opinion letter, an agency interpretation of its own statute is not entitled to Chevron deference, but is entitled to respect if it has the power to persuade.

FACTS: Congress passed legislation providing that the United States Customs Service shall fix the final classification and rate of duty applicable to imported merchandise pursuant to rules and regulations prescribed by the Secretary of the Treasury. Under these regulations, the Headquarters Office or any port-of-entry customs offices may issue a "ruling letter" to indicate the amount of money that an importer owes for the importation of specific goods into the United States. A ruling letter is binding on all Customs Service personnel until modified or revoked, and it may be modified or revoked without notice to any person, except the importer to whom it was addressed. No person other than the recipient of the ruling letter may rely on the letter or assume that the principles of the ruling will be applied to another transaction. The Headquarters Office issued a ruling letter classifying "dayplanners" imported by the Mead Corporation (Mead) (plaintiff) as "diaries" for the purposes of assessing a tariff. Mead filed suit against the United States (defendant), challenging the letter in the Court of International Trade (CIT). The CIT affirmed the ruling. The court of appeals then reversed CIT's decision. In reaching its decision, the appellate court declined to apply the type of judicial deference called for by Chevron U.S.A. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984), because the ruling letter was not issued in accordance with notice and comment rulemaking requirements. The United States Supreme Court granted certiorari to consider the limits of Chevron deference owed to administrative practice in applying a statute.

RULE OF LAW: A tariff classification ruling by the United States Customs Service is not entitled to Chevron deference, but may be given respect according to its persuasiveness under Skidmore.

FACTS: Cleveland Walton (plaintiff) applied for disability benefits and Supplemental Security Income under a provision of the Social Security Act (Act) that authorizes disability benefits for individuals unable to engage in any substantial gainful activity by reason of a medically determinable mental impairment that has lasted or can be expected to last for a continuous period of not less than twelve months. Upon reviewing his application, the Social Security Administration (SSA) (defendant) determined that Walton had developed a serious mental illness that caused him to lose his job as a full-time teacher. The agency further found that Walton was able to engage in substantial gainful employment as a cashier eleven months after losing his teaching job. The SSA denied Walton's claim on the ground that his inability to engage in substantial gainful employment lasted eleven, not twelve, months. In doing so, the agency interpreted the Act to mean that a claimant is not disabled if, within twelve months after its onset, the impairment no longer prevents substantial gainful employment. Walton challenged the agency's decision in federal court. The district court affirmed the agency's decision, but the court of appeals reversed on the ground that the Act's twelve-month duration requirement modified the word "impairment," not the word "inability." The United States Supreme Court granted certiorari.

HOLDING/RULE OF LAW: Yes. Pursuant to Chevron U.S.A. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984), when a statute is silent or ambiguous as to a specific issue, a reviewing court must sustain an agency's interpretation of the statute as long as the interpretation is based on a permissible construction of the law.

Clear statement doctrine
The Right to International Travel Case (Passports)

SC squirms out of Chevron analysis (pre-Chevron, of course) and adopts "clear statement principle" making a clear statement required re: Constitutional issues (construe statute narrowly to avoid Const question) - right to travel is question of liberty requiring due process for its denial

Clear Statement Doctrine (CSD): Idea is that Congress must provide a "clear statement" for courts to allow certain results to be reached.
If there are 2 ways of interpreting statute one way raises the possibility that statute is unconst. 2nd way of interpreting statute will not raise any const. issues The ct. will choose the interpretation that is less controversial.
-BEFORE Chevron.

HYDROELECTRICITY V. FISH: Laser Look Level of Hard Look for agency v. ct's conservationist issues; agency looks at late but important alternative suggestion of gas turbine engines; ct says 10 pg analysis too scant! → so what is sufficient consideration?: after yrs of tug of war, agency makes concessions and fish get protection

FACTS: P asserted that agency did not adequately consider alternate plans in developing a power plant.

HOLDING: This is HARD LOOK under Skidmore, b/c agency looked/discussed important problem, but not enough pages (only 9 pages). Need substantial evidence! Court took 19,000 pages of testimony

RULE OF LAW: The agency's discretion in granting licenses is limited by statutory authority. The agency must consider alternative projects even after the close of hearings in order to protect the environment.

A. Do we as a court have the power to review this final agency decision?
B. Assuming we can review the agency decision, what are the possible standards of review that we might apply?
C. What's the correct standard of review and what does it require (there can be more than one)?
§706 Administrative Procedure Act (APA)

FACTS: The Secretary of Transportation (defendant) authorized the expenditure of federal funds for the construction of a six-lane interstate highway through a public park in Memphis, Tennessee. Private citizens and conservation organizations (plaintiffs) sought to halt construction, arguing that the Secretary violated portions of the Department of Transportation Act of 1966 and the Federal-Aid Highway Act of 1968 that prohibit the use of federal funds to finance the construction of highways through public parks if a "feasible and prudent" alternative route exists. Under these statutes, where no such alternative route is available, the Secretary may only approve construction through parks if the plans are designed to minimize harm to the park. The Secretary did not include his factual findings in the announcements regarding approval of the highway's route and design. The Secretary also did not indicate why no feasible and prudent alternative routes existed or why design changes could not be made to minimize harm to the park. The Secretary moved for summary judgment, which the District Court granted. The Court of Appeals for the Sixth Circuit affirmed, and the plaintiffs sought review in the United States Supreme Court.

ISSUE: Does the absence of formal findings by an agency require remand where neither the APA nor the authorizing statutes require such formal findings and where an administrative record exists?

HOLDING/RULE OF LAW: No. When reviewing an agency decision, the Administrative Procedure Act (APA) requires courts to consider: (1) whether the agency acted within the scope of its authority; (2) whether the agency's actions were arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law; and (3) whether the agency's action met the necessary procedural requirements.

However, the administrative record in this case will allow prompt review of the Secretary's actions. Because the administrative record is not before this Court and because the lower courts based their review on litigation affidavits, not the whole administrative record, this case must be remanded to the District Court for plenary review of the Secretary's decision and for additional explanations of the Secretary's decision if necessary.

§701: Availability of Review
Generally you have to be adversely affected by the agency to seek agency review; Some agency decisions are not reviewable; Two narrow exceptions: (1) when statute clearly/explicitly excludes agency review; (2) decision is committed to the agency discretion/judgment

NYC Housing Authority being all shady. Agency wanted to discourage public housing. There were no objective, definite, narrow, fixed standards. No criteria for who gets a house. Had to reapply every year. Deprived of due process of law.

FACTS: Plaintiff came to US on transit authorization - 8 day right max to pass through country, he stays 6 months. Mak wants to be reclassified as a legal alien. Statute allows for reclassification in INS status, but rule made that says "AG may . . . in his discretion" make the change. AG refused to change Π's status to lawfully admitted alien because regulation said that "transit authorization" was granted on condition "that the alien will not apply for . . . adjustment of status."

HOLDING: Court upholds statute because the alternative is too time consuming

General rules are just fine, have to have uniformity and credibility, work as a deterrent of the behavior you do not want;

You are better off w/ a simple rule. Courts aren't good w/ determining rare exceptions.

Chenery I set out what is known as the Chenery Doctrine, a basic principle of U.S. administrative law that an agency may not defend an administrative decision on new grounds not set forth by the agency in its original decision.

(Case I) BOTTOM LINE: stands for principle that if you have reviewing ct passing judgment on agency, decision must stand or fall on the record (CANNOT supplement; reviewing ct cannot provide justification for what it did unless agency does so on its own)

WHY is this the BOTTOM LINE? b/c Congress via the agency is to make basic policy choices NOT the reviewing ct

Here: SEC relies on cases, not own expertise - ct says SEC misread the cases and that their reasons are insufficient → We want cts deciding things only on issues that have been briefed and argued! On remand, agency just needs to validate earlier assessment w/ more data

This case is a move from case law to agency expertise

Chenery II

Case III (listed as II in book): SC relies on agency expertise and we, the ct, cannot second guess that; based on accumulated experience;

NOW 2nd issue: choice for means of making law if you are an agency
- if formal rulemaking required: too costly for agency
- if notice and comment and hard look required, agency may say years of remands and hooey
- so agency says that we will bypass informal rulemaking and just rely on recalls

Ct says: we prefer rulemaking to adjudication (at general level) b/c
1) more parties participating, therefore better decisions instead of A v. B
2) greater staff expertise
3) rulemaking is prospective (law for the future), whereas adjudication is retrospective (i.e. past conduct)

KEY point of Chenery: do NOT require rulemaking: leave choice of rulemaking or adjudication to informed discretion of agency
Depending on situation, agency may prefer one over the other
Dissent: upholding SEC ruling b/c of agency expertise YET SEC has no expertise on the problem at hand!

FACTS: RR shipping rates set by ICC prospectively. Orders reparations to RRs after getting better info.

RULE OF LAW: An agency must follow its own rules unless and until a departure therefrom is sufficiently explained.

The ICC declared that $0.96 is sufficient to pay shippers, but said they must pay for reparations;

A rate declared reasonable by the ICC must be treated as such by the ICC, and a carrier charging a rate that falls within the limits of such a pronouncement is not liable to shippers for reparations.

FACTS: Hansen, P, was erroneously told by Connelly, an employee of the SSA that she was ineligible for benefits. She subsequently filed for them and received them. She then sued SSA to recover the lost benefits.

H: Court says NO ESTOPPEL. Claims Manual is not a regulation - It has no legal force, and it doesn't bind the SSA. Generally extremely difficult to get estoppel against the government. Why? Tp stop conspiracy, Encourage free advice, and Fear of litigation curtailed.

RULE OF LAW: Misinformation provided by a government official combined with a showing of misconduct (even if it's not violation of a legally binding rule) is NOT sufficient to require estoppel.

RANDOM NOTE: Promissory Estoppel: (1) A promise, (2) which the promisor should reasonably expect to induce action or forbearance on the part of the promise or a third person, (3) Which does induce such action or forberance and (4) is binding if injustice can be avoided only be enforcing the promise.

FACTS: P own property facing a street; local board of public works wants to pave their street and assess a tax against them. They don't want to be taxed. Relevant statutes says they have to provide notice and opportunity to file written objections before taking such actions and that council's decisions would be binding on courts. Paving was approved by board, council and completed. Πs filed claim.

HOLDING: Due process requires meaningful hearing at a meaningful time. Need actual notice and allowed to give oral testimony.

NOTE: This was a local board, for a limited number of people

RULE OF LAW: Where an agency rule applies to a large number of people, the Due Process Clause does not require that each person have an opportunity to be heard regarding the rule's adoption.


FACTS: Bi-Metallic Investment Company (Bi-Metallic) (plaintiff), an owner of real estate in Denver sought to enjoin the Colorado State Board of Equalization and the Colorado Tax Commission from putting in force and the Denver assessor from obeying an order of the boards to increase the valuation of all taxable property in Denver. Bi-Metallic brought the case on the ground that it was denied its constitutional right under the Due Process clause of the United States Constitution to be heard before being deprived of his property.

Posting Octane Ratings

RULE OF LAW: A federal agency has authority to rulemake even if its authorizing statute mentions only its authority to enforce by adjudication.

FACTS: FTC promulgated a regulation declaring that it was illegal under the Act to fail to post octane rating numbers on gas pumps at service stations.

The Federal Trade Commission (FTC) (defendant) decided to make a rule declaring that the failure to post octane rating numbers on gasoline pumps at service stations was an unfair method of competition and an unfair or deceptive act or practice.

Two trade associations and 34 gasoline refining companies (plaintiffs) brought suit to challenge the FTC's authority to make substantive rules of business conduct, termed by the FTC "Trade Regulation Rules", under the Trade Commission Act (Act). Section 5 of the Act empowers the FTC to prevent unfair methods of competition by means of an issuance of a complaint, hearing, findings as to fact, and issuance of a cease and desist order.

Section 6(g) provides that the FTC may make "rules and regulations for the purposes of carrying out the provisions of [Section 5]." Plaintiffs argued that since Section 5 mentions only adjudication as the means of enforcement, rulemaking is contrary to the legislative design. The district court agreed. Plaintiffs appealed.

ISSUE: Does a federal agency have authority to rulemake when its authorizing statute mentions only its authority to enforce by adjudication?

HOLDING AND REASONING: Yes. Although Section 5 mentions the FTC's authority to enforce by adjudication, it does not contain limiting language prohibiting the FTC from rulemaking.

Furthermore, it is authorized to do so by Section 6(g). Plaintiffs argue that Section 6(g) only authorizes the FTC to make procedural rules to implement adjudications, but the language of Section 6(g) does not limit it in this way.

Our conclusion that Section 6(g) should be construed to allow the FTC to promulgate substantive rules as well as procedural rules is supported by the reading courts have given to similar provisions in other authorizing statutes of other agencies.

The most potent argument plaintiffs make is that Congress was aware of the FTC's prior position that it did not have authority to rulemake and passes a series of laws granting limited substantive rulemaking power to the FTC in discrete areas. Despite this concern, we believe that the court should make its own independent judgment as to the construction of the statute.

If Congress believes that the FTC has exercised too much power, it can repeal the grant of statutory authority. The judgment of the District Court is reversed.

FTC is empowered under the Federal Trade Act to promulgate rules defining statutory standards of illegality.

USING OTHER RAILROAD'S FREIGHT CARS FOR A FEE
-After hearing/On the record

RULE OF LAW: When a statute requires that rules be made on the record after opportunity for an agency hearing, the APA requires the agency to follow the procedures set forth in §§ 556-57.

FACTS: The Interstate Commerce Commission (ICC) (defendant), which no longer exists, once regulated various aspects of railroad transportation. The Interstate Commerce Act (Act) authorizes the ICC to engage in rulemaking only "after hearing." The statute does not require that such rulemaking be on the record.

After proposing a tentative order establishing rates for incentive payments, the ICC determined that it would only receive comments in written form.

The ICC adopted the order, which two railroad companies (plaintiffs) challenged. The plaintiffs based their challenge on two grounds: first, that the proceedings leading up to the order did not comply with §§ 556-57 of the Administrative Procedure Act (APA); and second, that they were prejudiced by the ICC's determination to receive comments only in written form.

The district court found that the APA required that the ICC meet the formal rulemaking requirements of §§ 556-57 prior to issuing any rules. The agency sought review of the decision by the United States Supreme Court.

ISSUE:Does the APA require the formal rulemaking procedures of §§ 556-57 prior to the promulgation of a rule where the statute authorizing the establishment of the rule states that rulemaking may only occur "after hearing," but does not contain a requirement that the rule be made on the record?

HOLDING AND REASONING: No. Sections 553, 556, and 557 of the APA govern agency rulemaking. The requirements set forth in §§ 556 and 557 are stricter than those set forth in § 553. When a statute requires that rules be made on the record after opportunity for an agency hearing, the APA requires the agency to follow the procedures set forth in §§ 556-57.

When a statute requires a hearing prior to rulemaking, but does not also require that the rule be made on the record, § 553's procedures apply. Here, the Act requires that rulemaking occur after a hearing, but does not require that the rule be made on the record.

Therefore, only the rulemaking requirements of § 553 apply. Additionally, although the Act does not expressly define the term "hearing", it is clear that the statute's "after hearing" language does give interested parties the right to present evidence orally, cross examine witnesses, or present oral argument to the agency decisionmaker. As such, the plaintiffs received the type of hearing that the Act requires even though they were only allowed to present their comments in written form.

Hard look at informal rulemaking
HOT SMOKED WHITEFISH CASE

BOTULISM STOPPED VIA TEMPERATURE V. SALINITY

FACTS: The Food and Drug Administration (FDA) issued a regulation to prevent botulism that applied a uniform time-temperature-salinity (T-T-S) regulation on all species of fish. Nova Scotia Food Products Corp., a seller of smoked whitefish, refused to comply with the regulation, claiming that heating certain types of fish to high temperatures destroys the product.

HOLDING: No, the regulation was invalid. The Commissioner failed to notify the interested parties of the scientific research upon which it was relying in its proposal; failed to address the Bureau's suggested alternative; and failed to answer the comment that the proposed T-T-S requirements would destroy whitefish.

Discussion. This case involved a scientific decision, and the Commission's notice-and- comment procedure was insufficiently executed.

RULE OF LAW: Absent constitutional constraints or extremely compelling circumstances, administrative agencies should be free to fashion their own rules of procedure and to pursue methods of inquiry capable of permitting them to discharge their multitudinous duties.

FACTS: The court of appeals invalidated Vermont Yankee's (D) license to operate a nuclear power plant, holding the Atomic Energy Commission (D) had not engaged in adequate rulemaking proceedings under the APA in establishing the licensing standards used to grant the license. The proceedings of D did conform to section 553 of the APA.

ISSUE: Are reviewing courts generally allowed to impose additional procedural requirements on administrative agencies' rulemaking processes?

HOLDING: No. Except in rare circumstances, a reviewing court cannot impose upon agencies more stringent procedural requirements than those enumerated in the APA.

Three ways in which might be ok to go beyond APA:
Constitution
Agency
Congress

FACTs: Animal Welfare Act, designed to assure humane treatment of animals, authorizes the Secretary of Agriculture to promulgate such rules as he may deem necessary to carry out purposes of the Act. The BIG CAT case with a rule after notice and comment regarding "structurally sound." 8ft fence required but Hoctor only had 6ft. Hoctor says this is substantive and should have had notice and comment.

ISSUE: Was this rule of a substantive nature, versus a choice of implementation, that required notice and comment?

HOLDING: Yes. The eight-foot perimeter fence rule was invalid because it was not promulgated in accordance with the required procedure, therefore, the department's order was vacated.

1908 REAL SICK CHICKEN CASE

The Fourteenth Amendment provides: "No State shall deprive any person of life, liberty, or property without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.

In the case of spoiled food, however, a preliminary hearing is not necessary beforehand where there are adequate remedies after-the-fact.

Rule: Due process does not require a prior hearing where administrative action is required to be immediate in nature.

WELFARE INTEREST / NEW PROPERTY INTRODUCED:
RULE OF LAW: Welfare benefits can only be terminated after a hearing (with minimal safeguards- including the opportunity to be heard on his own behalf)

- FACTS: Kelly and other recipients alleged they were deprived of due process b/c they were afforded no hearing prior to the decision of welfare authorities to terminate their benefits

Two step process:
Whether due process must be afforded-Need to determine the precise nature of the govt function and the private interest that has been affected by govt action

Whether cross examination is required-In almost every setting where important decisions turn on Qs of fact, DP requires an opportunity to be confront and cross adverse Witness

PROF NOT REHIRED AFTER 1-YR K

Prof's expectation of being rehired for another year of teaching is NOT a property interest under state law (he DID have property interest w/ the K, but after 1 year POOF!

Nothing for hearing to be about b/c K is gone and no more property interest) K died a natural death - govt did not take it away

Rule: There is no Fourteenth Amendment or property interest denied a non-tenured teacher when he is dismissed; therefore, no due process rights accrue.

PROF NOT REHIRED AFTER TEN 1-YR Ks

FACTS: The State of Texas did not have a formal tenure system in place, but did have an official Faculty Guide that Respondent claimed established a de facto tenure system. Respondent claimed legitimate reliance that employment for seven years or more at his particular college created some form of tenure that was no less a property interest than a formal tenure system at another university. The District Court granted summary judgment against Respondent.

ISSUE: Does a non-tenured teacher still have due process rights as provided by the Fourteenth Amendment through a de facto tenure policy created by rules and policy? Were Sindermann's 14th Amendment due process rights violated?

HOLDING: No. The grant of summary judgment against Respondent was improper. A teacher, like the Respondent, who has held his position for many years, might be able to show from the circumstances of his service and other relevant facts that he has a legitimate claim of entitlement to job tenure. Proof of such a property interest would obligate college officials to grant him a hearing at his request, where he could be informed of the grounds for nonretention and challenge their sufficiency.

Remember: due process only about whether or not you get a hearing NOT about getting to keep your job (i.e. an opportunity to explain)

Facts: Eldridge contended that he was denied due process when his SS benefits were terminated w/o an evidentiary hearing

Reasoning: Different than Goldberg - Here disability adm giving pretty decent pre-deprivation process by putting in the record the reasons why person is no longer eligible and have to allow you to respond. So pre process is not worthless.

RULE: An evidentiary hearing is not required prior to adverse administrative action if the adm procedures provided adequate safeguards against error.

- is a federal freedom of information law that allows for the full or partial disclosure of previously unreleased information and documents controlled by the United States government. The Act defines agency records subject to disclosure, outlines mandatory disclosure procedures and grants nine exemptions to the statute.

The 9 FOIA Exceptions
1) National Security: deference to govt but still subject to litigation b/c corrupt govts can be overinclusive about what is under natl. security (ex: do not want public present for det of how many spy satellites exist thus in camera review used)

2) Internal Personnel Rules and Practices: protection for personal privacy and agency's from harassment (ex: West Point honor code: request via FOIA but problem b/c personal issues - names removed then info provided re: persons in violation of code of govt group)

3) Documents Governed by Statutes that Specifically Direct Nondisclosure
a. Info from census
b. Do not want census info going to private companies or immigration services
c. People cooperate w/ census for other reasons

4) Confidential Business Info: privileged and confidential; trade secrets: definitions vary from narrow to broad; commercial and business info: OK!

5) Privileged Agency Materials: atty-client privilege; deliberative process privilege; do NOT want to protect via FRCP and still get info via FOIA; generally, if exempt from discovery, then under FOIA exception so NO disclosure
- ***deliberative process: good to know what govt is saying but reasons for shielding HOW agency created policy - you want process to be free, open, candid so to arrive at best possible policy - hence, you need deliberative process protected so environment exists for candor to flow - otherwise, policies would be skewed by inhibitions and devil's advocates

6) Personal Privacy
a. Protects personnel and medical files (i.e. insurance companies would love to have everyone's health info + health info can be embarrassing)
b. Must be clearly unwarranted invasion of privacy (heavy burden of proof on claimant)

7) Investigatory Records
a. Drug kingpin wants info and can be w/held if it interferes w/ enforcement, deprives fair trial, discloses identity of confidential source, investigative techniques, endanger law enforcement persons
b. Same wrt IRS for when they audit or not → if they disclose the rule for audit triggering then it does not work as well b/c people will go just up to the line and yet avoid triggering audit

8) Financial Institution (not crucial - here b/c of lobbying)
a. This info usually confidential
b. Here b/c better to put 2 stakes through Dracula's heart than just one

9) Geological Exploration (not crucial - here b/c of lobbying)
a. This info usually confidential
b. Do not disclose maps, wells, geological info

Enacted post-Civil War;

You can receive money damages against state officials (not federal officials), but someone acting under the color of state law for the deprivation of federal rights - not limited to Constitutional Rights. They can be Constitutional or statutory;

States are exempted. State actors can be sued as well as cities.
Qualified immunity is available for certain state actors.
Immune from money damages unless there is a specific precedent for very specific conduct → There must be settled law at a specific level;

You do not need to exhaust administrative remedies prior to bringing a §1983 claims.

The case presented the question of the extent to which a decision of an administrative agency, here the Food and Drug Administration, to exercise its discretion not to undertake certain enforcement actions is subject to judicial review under the Administrative Procedure Act.

First, agency decisions whether to initiate enforcement actions are usually based on a complicated balancing of multiple factors, such as efficient allocation of limited resources, likelihood of success, and the relationship of the potential action to the overall enforcement strategy of the agency. The courts are ill-suited to performing such an analysis.

Secondly, the court noted when an agency chooses not to act, they are not exercising any coercive power over others that might be worthy of heightened judicial protection. - -

Third, the Court found an agency's discretion not to seek enforcement as being analogous to exercises of prosecutorial discretion that courts have traditionally been unwilling to review.

§ 702 - Standing to challenge agency action

Sierra Club does not have standing
-None of the members have alleged a connection, or that they are directly affected by to the area

Standing Requires:
i. Injury in fact
ii. Causation
iii. Redressability

Reasoning:
i. Mere interest in a problem is not sufficient by itself to render the organization adversely affected or aggrieved within the meaning of the APA
ii. The requirement that a party seeking review must allege facts showing that he is adversely affected

Although the Sierra Club lost the case, as a practical matter they won the war. To assert standing in a natural resource manner, environmental groups simply need to find among their membership a single person with a particularized interest (e.g., one who hikes, hunts, fishes, or camps in or near the affected area).[1] Mineral King was ultimately never developed and was absorbed into Sequoia National Park.

PHARMACEUTICAL MANUF MUST LIST BRAND AND GENERIC NAME ON ALL Prescriptions

Facts: Abbott sought judicial review of an agency order prior to its enforcement. The regulation required drug manufacturers to use the generic name, along with the trade name, of medications every time the trade name appeared.

Rule: Agency action is ripe for judicial review when the issues presented are fit for judicial decision and the parties will suffer hardship if judicial decision denied.

Reasoning: Ct. held that the hardship was sufficient b/c it would be very costly for the drug manufacturers to print new labels and destroy those already in stock; and the manufacturers were at risk of criminal penalties if they did not comply.

To determine ripeness - 2 main issues
Fitness of the issue: legal issue - further expertise on agency is irrelevant. Fit for judicial resolution.

Hardship to the parties: Party would suffer a hardship by waiting to adjudicate.

Exhaustion of Administrative Remedies

FATHER KILLED IN WAR, INELIGIBLE FOR DRAFT, MOTHER DIES, PRESTO: ELIGIBLE AGAIN

FACTS: Gov. argued that M could not raise the defense of erroneous selective service classification at crim. trial b/c he failed to exhaust his administrative remedies.

ISSUE: Did McKart need to exhaust his admin remedies first?

HOLDING: No. Administrative remedies need not be exhausted prior to judicial review where the validity of the agency action is merely a function of statutory interpretation and the burden of denial of judicial review outweighs the underlying interests of the exhaustion rule.

RULE OF LAW: Exhaustion of remedies: must pursue administrative appeals before filing judicial lawsuit. WHY: constitutional separation of powers reasons, need adequate record, agency expertise and no incentives to bypass.This case was special bc of criminal aspect. Pure legal issue.

Primary Jurisdiction Case

Facts: Ct. of App. stayed Nader's suit for tort claim b/c deciding whether overbooking flights was fraudulent was within the primary jurisdiction of the agency.

Reasoning: Primary Jurisdiction Doctrine: If a court's decision would encroach upon a determination to be made by the agency, the ct. should suspend the action and send it to the agency.

To the extent necessary to decision and when presented, the reviewing court shall decide all relevant questions of law, interpret constitutional and statutory provisions, and determine the meaning or applicability of the terms of an agency action. The reviewing court shall—
(1) compel agency action unlawfully withheld or unreasonably delayed; and
(2) hold unlawful and set aside agency action, findings, and conclusions found to be—

(A) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law;
(B) contrary to constitutional right, power, privilege, or immunity;
(C) in excess of statutory jurisdiction, authority, or limitations, or short of statutory right;
(D) without observance of procedure required by law;
(E) unsupported by substantial evidence in a case subject to sections 556 and 557 of this title or otherwise reviewed on the record of an agency hearing provided by statute; or
(F) unwarranted by the facts to the extent that the facts are subject to trial de novo by the reviewing court.

In making the foregoing determinations, the court shall review the whole record or those parts of it cited by a party, and due account shall be taken of the rule of prejudicial error.

Usually a question of fact and policy, not a question of law
(1) Fact and policy: more deference given; (ex) which car entered the intersection first?
(2) Question of law: Less deference; usually have to look at some legal book for the answer; Skidmore/Chevron area of law; (ex) How many witnesses are needed to make a will binding in Indiana?

Legislature cannot give away its basic law-making responsibilities under Article I to administrative agencies; However, Congress cannot be expected to handle everything, and so agencies make some decisions.

All legislation must be presented to the President before becoming law.

...

Principal officer: nomination by POTUS; confirmation by Senate (ex: Supreme Court justice)

Inferior Officer: President alone can ....; heads of departments, courts. Appointment by a court is okay here. Removability by a higher executive branch

Employees: federal employees; no real authority

Inferior v Federal Employee: Look to finality, significance, scope of their discretion

Workers compensations claims were heard by deputy commissioners under Workers Compensation Act. Employer defended on ground that was not employee at the time that he was injured and that, regardless of 's status, the Act placing workers comp cases before an administrative agency violated Article III. SCT upheld the administrative scheme. Commissioner could make findings of fact, and findings of law were subject to Article III review.

"Private" rights distinguished from "public rights" = Whether a case can be allocated to a non-Article III tribunal depends on the nature of the right involved.

a. Private rights = Where the dispute is between two citizens, as here, Congress can delegate adjudication to an administrative agency, but there MUST be Article III review. The following standards should apply:

(1) De novo review of law = SCT held that law should be reviewed de novo, but this is now limited by Chevron (where there are equally good interpretations of the law, the administrative agency's interpretation rules).

(2) "Supported by evidence" review of ordinary facts = SCT should review the factual determinations to ensure that they are supported by the evidence.

(3) De novo review of constitutional facts = SCT created a different standard of review for constitutional facts, defined as those upon which the enforcement of a constitutional right depends. In this case, SCT thus had the power to review de novo the factual question of whether was employed by at the time he was injured, since his recovery under the statute turned on that fact. Heightened review for constitutional facts has been maintained in most subsequent cases.

(4) De novo review of jurisdictional facts = SCT also created different standard of review for jurisdictional facts, defined as those upon which the agency's jurisdiction depended. The distinction b/w ordinary facts and jurisdictional facts has NOT been retained by subsequent decisions.

b. Public rights = Where the dispute is b/w the citizen and the government, it does NOT have to be adjudicated in an Article III court. When Congress creates a right, it has the power to prescribe the manner in which it will be adjudicated. Greater power includes the lesser.

A United States Supreme Court case concerning whether the United States Secretary of Health and Human Services could rely on published medical-vocational guidelines to determine a claimant's right to Social Security benefits.

RULE: [w]here the statute expressly entrusts the Secretary with the responsibility for implementing a provision by regulation, review is limited to determining whether the regulations promulgated exceeded the Secretary's statutory authority and whether they are arbitrary and capricious.

A claimant who establishes that he suffers impairment so severe that he is prevented from pursuing any gainful work will be considered disabled without further inquiry. If a claimant suffers from a less severe impairment, the Secretary of Health and Human Services must determine whether the claimant retains the ability to perform either his former work or some less demanding employment. If a claimant can pursue his former occupation, he is not entitled to disability benefits.

The Supreme Court held that the court of appeals erred in reversing the judgment because the Petitioner's use of the medical-vocational guidelines to determine a claimant's right to disability benefits did not conflict with the Social Security Act, nor were the guidelines arbitrary or capricious.