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EXAM APPROACH

Administrative law exam questions generally focus on the legality and procedural validity of
agency action and on various doctrines that limit the judicial review that courts will provide. For
a general approach to exam questions, consider the following; for more detailed approaches,
review the chapter approaches found at the beginning of each chapter.

I . Delegation of Authority: Many exam questions focus on the delegation of legislative or

judicial authority to an agency. While it is unlikely that a delegation will be struck down by
a modern court, the issue must still be addressed. Recall that even if the delegation is valid,
the agency's action may be beyond its delegated powers (ultra vires). Also, there are
numerous executive and legislative controls over agency action that frequently come into
play in administrative law exams.

2. Procedural Validity: Many issues relating to agency procedure ask whether a hearing is
required by due process, the agency statute, the APA, or agency regulations.

a. If a hearing is required, what type of hearing-trial-type or legislative-must be provided?

Also, when must it be provided?

b. Note that it is critical to observe the distinction betiveecn rulemaking and adjudication
since the entire subject is based on that distinction. Wholly different procedures are
required for the two modes of agency action. Rulemaking is changing the legal
landscape and is generalized because it affects everyone. In contrast, adjudication is
taken decided on a case-by-case basis and is individualized.

c. In many cases, an agency can choose one mode of action over the other. A series of
issues arise when the agency so chooses-for example, can rulemaking resolve a broad
issue so that no future adjudications are needed9 Caii in agency choose to make policy
through adjudication rather than rulemaking even though adjudication has a retroactive
effect?

d. Remember that a series of doctrines constrain agency choices in adjudication: equitable

estoppel, res judicata, the duty of consistency, the duty to follow procedural regulations.

e. A series of doctrines help to assure the impartiality of agency decision makers both at
the trial level (usually trials are conducted by administrative law judges (ALJs)) and at
the agency head level. Watch for facts showing bias, ex parte contact, separation of
functions, command influence, and Morgan I. In addition, watch for rules relating to
evidence (including the residuum rule) and official notice and rules requiring
explanation and findings.

3 . Judicial Review: Analyze a judicial review question as follows:

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a. Is the action reviewable? Consider the doctrines of preclusion of review and

comniitnient to agency discretion. If the plaintiff seeks a tort-type recovery, you i-nust
consider the obstacles to recovery of damages both from individual wrongdoers and
from government.

b. What is the scope of review? Here you must decide what type of issue is under
challenge (basic facts, law, application of law to facts, discretion, procedure) and then
apply the applicable rules concerning scope of review. In most cases, a court must
uphold a reasonable choice by the agency even though the court might prefer a
different outcome.

C, Is plaintiff limited by the doctrines of standing or timing? For standing, check both the
constitutional and prudential limits; as for timing, look for facts indicating applicability
of the final order rule, ripeness, exhaustion of remedies, and primary jurisdiction
doctrines.

I. SEPARATION OF POWERS AND

CONTROLS OVER AGENCIES

This chapter discusses legislative and executive controls over administrative agencies. The most
important issue for purposes of exam questions is whether the legislature invalidly delegated
legislative or adjudicative power in violation of the separation of powers doctrine. To answer
this question, use the following approach:

1. If an agency rule is challenged, consider whether the legislature invalidly delegated

legislative power. While federal courts virtually never overturn rules on this theory, the
issue must still be discussed. Note that state courts are more likely to take the doctrine
seriously. Factors to consider are:

a. Does the statute contain meaningful standards to constrain agency discretion? If so, this
points toward a valid delegation.

b. Are there safeguards on agency action, such as rights for the public to participate and
judicial review? This too improves the chances that the delegation will be upheld.

C. Does the statute delegate to private parties the power to regulate other private parties?
This makes the delegation more vulnerable to attack.

d. If the rule is valid on delegation grounds, is it invalid as "ultra vires"- beyond the scope
or the delegated power? Note that if the rule raises constitutional issues, courts may
construe the delegated power narrowly so as to invalidate the rule on ultra vires rather
than constitutional grounds.
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2. If an agency adjudicatory order is challenged, consider whether the statute invalidly

delegates judicial power to the agency. In general, a statute can delegate adjudicatory
power that is necessary to implement a particular statutory scheme-even the power to assess
civil penalties without jury trial. However, if a statute delegates the power to decide
questions of private rather than public right, it is of questionable validity since questions of
private rights under comn-lon law (e.g., breach of contract) are usually decided by courts.
Also watch for issues of vagueness of standards, particularly in cases with constitutional
overtones.

3. Also consider whether the statute violates other provisions relating to the separation of
powers or the checks and balances. A statute might be invalid if it:

a. Calls for legislative appointment of the persons who will engage in rulemaking or
adjudication.

b. Contains a legislative veto whereby the legislature can adopt laws without giving the
executive a chance to veto them.

c. Gives the legislature a role in removal of the persons who will engage in implementing
the law.

4. Finally, keep in mind that even if agency action does not violate separation of powers, there
are numerous other legislative and executive controls over agencies which may effectively
check illegal, mistaken, or impolitic agency action.

THE CONSTITUTIONAL
RIGHT TO A HEARING

This chapter addresses procedural due process-i.e., when the Constitution requires government to
provide notice and some kind of hearing before depriving a person of liberty or property. The
next three chapters consider agency adjudicatory hearings required by statute rather than the
Constitution. In analyzing a client's rights to a hearing to protest action that the state plans to
take against him, always consider all alternative sources of procedural protection: constitutional,
statutory, and agency regulation.

In assessing constitutional protection, consider the following issues:

1 . Has there been a deprivation of liberty or property? There is extensive case law that defines
these two terms for purposes of deciding whether due process applies. However, if there is a
deprivation of neither liberty nor property, due process does not apply.

2. If there is a deprivation of liberty or property, when must notice and hearing be provided? A
client will generally want a hearing to occur before the deprivation of liberty or property
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rather than after. To analyze timing questions, learn to apply a balancing approach that
considers:

a. Strength of the private interest affected;

b. Whether the agency procedure is likely to produce an inaccurate result and whether the
proposed procedure is more likely to produce an accurate result;

c. The governmental interest in not providing a pre-deprivation hearing.

3 . If there is a deprivation of liberty or property, what are the ingredients of the hearing?
Again, use the Mathews v. Eldridge same three-part balancing tests to analyze whether a
particular element is constitutionally required.

4. Is the agency action rulemaking rather than adjudication? If so, recall that procedural due
process does not apply.

FORMAL AND INFORMAL ADJUDICATION

UNDER THE ADMINISTRATIVE
PROCEDURE ACT

The previous chapter considered whether the due process guarantees of the United States
Constitution required a trial-type hearing and what the elements of that hearing are. In addition
to the Constitution, statutes often provide for adjudicatory hearings. Therefore, you should
always analyze both statutory and constitutional rights to procedural protection. Some key
points to remember are:

I. Federal APA: The federal Administrative Procedure Act (APA) provides for formal
adjudication only if some other statute provides for a hearing on the record. Therefore, it is
necessary to analyze other statutes to see if an on-the-record hearing is provided for. Note
that under the Wong Yang Sung case, where due process requires a hearing, it can be
argued that the procedures of the federal APA must be employed.

2. State Law and Agency Regulations: Where no external source requires a hearing, the
agency is free to provide whatever protection it wishes. However, if its regulations provide
a hearing, it must abide by them. State law may provide for a hearing whether or not an
external source calls for one.

3. Agency Policy: Agencies have discretion to make policy either through rulemaking or
case-by-case adjudication, unless this choice has unfair retroactive effects. Under Wyman
Gordon, an agency should not engage in prospective-only adjudication.

THE PROCESS OF FORMAL ADJUDICATION

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If you have decided that the formal adjudication procedures of the APA apply (as discussed in
the previous chapter), then you must make sure that these procedures have actually been
provided by the agency during each phase of the case. The federal and state APAs provide a
detailed roadmap through the process of formal adjudication. They contain provisions for
numerous procedural details: notice, discovery, proof, findings, and the like. This chapter
summarizes the detailed provisions for the formal adjudication process.

In analyzing a fact situation watch for the following requirements:

1. Prehearing Process: Make sure that the party receives proper notice and appropriate rights
to discovery. If other persons wish to participate in the hearing, they should be allowed to
intervene if their participation will not complicate the proceeding. There should be
opportunity for settlement or mediation.

2. Hearing Process: Recall that the proponent has the burden of proof, normally by a
preponderance of the evidence. Generally any evidence offered is admissible but, in many
states, findings must be supported by some evidence other than hearsay. Note that the
decision must be based on material in the record but official notice is permissible (given an
opportunity for the opponent to rebut).

3. Post-Hearing Process: Normally at this stage there must be findings of basic and ultimate
fact and a statement of reasons.

ADJUDICATORY DECISION MAKERS

Once you have decided that APA formal adjudication applies and you have ascertained that the
various hearing requirements discussed in the previous chapter were provided, analyze whether
the decision making process meets statutory and constitutional requirements:

1. Generally, the initial decision is made by an ALJ and appealed to the agency heads.
Ascertain that the ALJs independence was protected as provided in the APA.

2. Although a single agency combines functions, the APA provides significant protections
against the same person engaging in both adversary and adjudicatory responsibility. Make
sure these provisions were observed.

3. The Constitution guarantees an impartial adjudicator. Make sure that both the ALJ and
agency heads were free from bias in the form of prejudgment of the factual issues, animus
against the party, or economic conflict of interest. But remember that the rule of necessity
may require a biased decision maker to serve.

4. Make sure that no illegal ex parte communications were made to adjudicatory decision
makers.
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5. Make sure the decision maker was adequately familiar with the record as required in
Morgan I.

6. Finally, see whether the decision was constrained by the requirements of resjudicata,
equitable estoppel, or stare decisis.

RULEMAKING PROCEDURES

If you have decided that agency action is rulemaking rather than adjudication, you must next
decide whether it is formal or informal rulemaking. Formal rulemaking occurs if some external
statute (i.e.., other than the APA) requires an on-the-record hearing. If not, the APA informal
rulemaking provisions apply. Under the Vermont Yankee case, courts are not free to supplement
the APA procedures.

In analyzing rulemaking consider the following:

I . Do any legislative or executive controls apply, such as the requirement to provide a

regulatory impact statement or an environmental impact statement?

2. Were the various APA procedures complied with? These include:

a. Notice of proposed rulemaking (watch for excessive variance between the proposed and
final rule and for agency failure to disclose critical documents or studies);

b. Public participation through written comments or, in some an oral legislative type
hearing,

c. A concise statement of basis and purpose (which must respond to material comments)

d. Publication of the rule in the Federal Register;

e. A 30-day grace period; and

f. A right to petition the agency to adopt or revise a rule.

3. Remember, however, there are numerous exceptions to APA rulemaking procedure. Check
to see if any apply:

a. Military or foreign affairs function;

b. Agency management or personnel;

c. Public property, loans, grants, benefits, or contracts;

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d. Procedural rules;

e. Good cause exception;

f. Interpretive rules or policy statements.

4. Discuss whether various rules of impartiality apply, although mostly they do not, Remember
that:

a. There is probably no limit on ex parte contacts;

b. There is probably no limit on executive or legislative interference; and

C. There is a very narrow bias standard.

OBTAINING INFORMATION AND

ATTORNEY'S FEES

An agency must be able to acquire information as a basis for both adjudicative and rulemaking
proceedings. This chapter considers the agency's power to obtain information, and the
corresponding rights of the public to obtain and refrain from giving information. It also
considers the agency's obligation to hold public meetings and the circumstances in which the
agency can or must pay the attorney's fees of private parties.

Exam questions in these areas are likely to focus on the following topics:

1. Agency Seeks Information from the Private Sector: When the agency tries to get
information from a private party, it will:

a. Subpoena information: In such cases, consider whether the subpoena is "reasonable”

i.e., for a proper purpose and not excessively burdensome. Also think about any
applicable constitutional privileges (e.g., self-incrimination, unlawful search or
seizure) or any common law privileges (e.g., attorney-client privilege) that are violated
by the subpoena.

Physical search: Ask yourself if the search requires a warrant (i.e., the industry is not
pervasively regulated), and if a warrant is required, has it been obtained?

2. Private Party Seeks Information from an Agency: When someone in your fact pattern is
trying to get information from the agency, consider the following:

a. Freedom of Information Act: First, check whether the information is required to be

published or made generally available under the Act. If the agency is not required to
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make such information available, specific documents can still be requested unless they
fall under an exception to the Act. (Watch especially for the inter- or intra-agency
memorandum exception for predecisional, nonfactual documents.)

b. Sunshine Act: Remember that many agency meetings must be open to the public.

3. Attorney's Fees: The general rule is that private parties cannot recover attorney's fees from
the government. However, there are exceptions to this rule that you should consider: are
there specific statutory provisions providing for the award of attorney's fees (e.g., in civil
rights cases or under the Freedom of Information Act); or is there general authorization for
such an award as under the Equal Access to Justice Act?
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REVIEWABILITY OF AGENCY DECISIONS

REMEDIES AND PRECLUSION

Getting into court:

Consider if these following items have been met first:

Jurisdiction: fed courts are limited by Article III (look at enabling act and general jurisdictional
states in title 28 of the United States Supreme Court such as United States Supreme Court sec
1331 (basic federal question jurisdiction) or 28 United States Supreme Court 1337 (jurisdiction
arising out of any act of Congress regulating commerce.); state courts are usually: general
jurisdiction.
Enabling Act: may tell you where case has to be adjudicated.
Venue - not discussed in class.
Sovereign Immunity:
• see Bivens (against the employee - personal suit for money);
• for money damages see Federal Tort Claims Acts or the Tucker Act.;
• for "other than money damages: see section 702 of the APA (removes sovereign immunity), but
this is for declaratory relief or injunctions.
Preclusion: see Abott Labs (no showing of clear and convincing evidence of anyh intent on part
of Congress to restrict review.
Statutory Preclusion:
Usually in the face of the statute itself. Example: formerly decisions of the V.A. were not
reviewable.
Time limits: ex. 30 days, -
Agency Discretion: 701 of the APA - review these.
Standing - see data processing test.

If an exam question involves judicial review, it is necessary to consider the possible remedies a
court might grant and also to decide whether review is precluded because of sovereign
immunity, by statute, or because of commitment to agency discretion. Keep in mind the
following:

1 . Remedies: If the statute does not provide for judicial review, the most satisfactory remedies
are injunction and declaratory judgment, although mandamus and certiorari will sometimes
work. A court will also review an agency rule in an enforcement action.

2. Sovereign Immunity: Although the federal government has waived sovereign immunity in
an action that does not seek money damages, many states enforce the doctrine and it is also
embodied in the Eleventh Amendment.
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3 . Tort Liability of Government: Government agencies are frequently liable in tort for
actions of their officials. The federal government is liable under the Federal Tort Claims
Act, but watch for the discretionary function exception. State governments are often liable
under section 1983 for civil rights violations. Government officials may also be personally
liable in tort, but watch for absolute and qualified immunities.

4. Statutory Preclusion of Judicial Review: There is a presumption that agency action is

reviewable, but it can be precluded by an explicit statute. However, review of
constitutional issues probably cannot be precluded.

5. Agency Discretion: Agency action is un-reviewable if it is committed to agency discretion.

Generally this means that there is no law to apply. Also it is likely that agency decisions not
to enforce the law are un-reviewable.

SCOPE OF JUDICIAL REVIEW

Exam questions involving judicial review usually require. an analysis of the scope of review-the
degree to which a court has power to substitute its judgment for that of the agency. To analyze
this issue, it is necessary to analyze precisely what sort of agency determination is challenged on
review.

1. Basic Fact: An agency finding of basic fact generally concerns the parties, and is of the who
did what to whom variety. The general rule is that such findings are reviewed under the
substantial evidence on the whole record test, meaning that the court has relatively little
power. It must affirm if the finding was reasonable, even if the court disagrees with it.
Note that a disagreement between agency heads and the ALJ on a question of credibility
detracts from the substantiality of evidence in support of the decision.

2. Conclusions of Law: An agency conclusion of law generally can be stated in abstract fori-n.
The prevailing view is that stated in Chevron: if the law being interpreted is ambiguous, the
court must defer to the agency's reasonable interpretation, even if the court disagrees with
it. State law generally allows courts to substitute judgment on questions of law. In
analyzing an exam question, you should consider Chevron but also try to distinguish
Chevron-the rule of that case might not apply to interpretive rules or to cases in which there
is no evidence of a legislative delegation of interpretive power.

3. Application of Law to Fact: The general rule is that the court must accept the agency's
reasonable application of a broad statutory term to the basic facts. Again, look for evidence
that the legislature wished to delegate law-application power to the agency. However, if the
application question does not depend on expertise and if the facts are not complex, courts
may retain power to substitute their judgment on application issues.
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4. Exercise of Discretion: Under the arbitrary-capricious test, a court should take a hard look at
discretionary action. This means that the agency is limited to the rationale expressed at the time
it exercised discretion. The court should scrutinize the facts in the record to see whether they
support the decision. In the end, however, the court must not substitute its judgment for that of
the agency.

STANDING TO SEEK JUDICIAL REVIEW AND

THE TIMING OF JUDICIAL REVIEW

Exam questions involving judicial review very often involve questions of both standing and
timing. Standing refers to whether this plaintiff is entitled to seek review; timing refers to
whether the plaintiff is seeking review too early.

1 . Standing: In analyzing questions concerning standing, be sure to work through both the
constitutional and prudential limits on standing:

a. Constitutional limits: A plaintiff must suffer palpable rather than abstract injury in
fact; the challenged action must be the cause of the injury; if plaintiff wins, the injury
will be remedied.

b. Prudential limits: The plaintiff must be within the zone of interests of the statute that is
the basis for challenge. Also, the plaintiff must be vindicating his own interests, not
those of third parties, and the claim must be particularized, not generalized.

2. Timing: A court may reject the petition for review for any of the following reasons:

a. Final order rule: If the action is not final but instead is part of an ongoing process, the
court will not review it. But remember that courts make exceptions in cases of
irreparable injury.

b. Ripeness: If the action is not ripe for immediate review but can only be reviewed in the
context of an actual application of the rule, the court will not review it. You must
balance the harm to the plaintiff from delay in review against the susceptibility of the
issue to immediate review.

C. Exhaustion of administrative remedies: The court may not review the action if the
plaintiff has failed to exhaust administrative remedies. But recall that there are
numerous exceptions that must be considered in each case (e.g., irreparable injury,
futility, and inadequacy of the remedy).
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d. Primary jurisdiction: In the case of a judicial trial (rather than an appeal from an
agency action), the court may apply the doctrine of primary jurisdiction and insist that
the case be tried in the agency instead. Be sure to discuss the need for uniform results
(which suggests all cases should be tried in the agency) and the degree to which the
issue is highly technical (which again suggests agencies should try it).