I. What is an agency? a. 5 U.S.C.

551: an agency is an authority of the government of the US whether or not it is in or subject to review by another agency, but does not include Congress, states, military commissions, or military authority. b. Agencies are created through organic statutes called enabling acts i. Created by Congress vis a vis the necessary and propry clause ii. Majority of agencies fall under the executive branch II. Constitutionality of Federal Agencies a. Delegating power: Federal Agencies as Courts i. Commodity Futures Trading Commission v. Schor (schor) 1. Schor looked to Art. III 1. a. Art. III I: Directs that the judicial power of the United States shall be vested in one Supreme Court and in such inferior Courts as the Congress may from time to time ordain and Establish. b. 3 part test whether congress has delegated power to federal agencies to act as courts i. whether essential attributes are reserved to an article III court ii. look at the nature of the rights asserted iii. congressional purpose 1. giving the agency a small and narrow range of cases to hear 2. Non-Delegation Doctrine a. Rooted in the principle of separation of powers that underlies our tripartite system of govt. b. Delegating Power: Federal Agencies as Legislators i. Whitman v. American Trucking Association, Inc. i. Yakus v. US -> Finding an intelligible principle in various statutes authorized regulation that is in the public interest ii. Take away about intelligible principle 1. Its relatively easy for congress to show that they had an intelligible principle in a delegation without wholly giving away their power iii. Mistretta v. United States (1989) (really explains how to apply intelligible principle is validated) 1. Rule: Intelligible Principle Test a. So long as congress shall lay down by legislative act an intelligible principle to which the person or body is authorized to exercise the delegated authority is directed to conform, such legislative action is not a forbidden delegation of legislative power i. Congress needs to show that they laid down: 1. GOALS and PURPOSES to be followed 2. Procedures 3. Factors to be considered in rule making iv. Take away from Mistretta and Whitman 1. Relatively vague standards are ok, seems to overrule Schecter and Panama. 2. Basically as long as congress cites some general principles, courts will allow agencies to proceed

c. Controlling Delegated Power i. Appointment Clause Art. II 2, clause 2. 1. The Appointments Clause provides that the pres, w/ the advice and consent of the Senate, appoints officers of the US, and Congress may specify that inferior officers are appointed by the pres alone, by the heads of departments, or by the courts of law. 2. 3 types of officers a. Principal officer i. Has a significant role in administration and enforcement of public law ii. Appointed by the president with confirmation of senate 1. Ie: cabinet position b. Inferior Officers (see Morrison v. Olsen) i. No exclusive criterion to distinguish from principal officers, but their work is directed and supervised by someone appointed by presidential nomination with the Senates advise ii. Subject to removal by higher executive branch official iii. Authorized to perform only limited duties iv. Limited jurisdiction v.Limited tenure vi. Congress gives authority to president to make that appointment. No senate confirmation. c. Employee i. Acting merely in aid of the legislative process ii. Dont need to appoint employees 1. Examples of employees: ALJs iii. They have no final decision-making authority 3. Quick Take away: any appointee exercising SIGNIFICANT AUTHORITY is an officer. ii. Morrison v. Olson a. Hold: independent counsel was an inferior officer because he had limited duties (investigating potential wrongdoing), limited jurisdiction, and limited tenure (removal when job is done or for good cause) b. Rule: Congress CAN appoint inferior officers c. Test: is the restriction so much as to rise to the level of impeding the president from being able to perform his functions? iii. Removal Power 1. Inherent in the power to appoint is mirrored by the power to remove a. Congress can set length of service to limit the presidents ability to remove inferior officers (humphreys executor) i. President can remove for good cause iv. Legislative Veto 1. INS v. Chadha a. Held: Legislative veto violates the separation of powers i. Executive alone has the power to veto

ii. Legislative acts alter legal rights, duties, and obligations of individuals iii. Congress can only act by legislation 2. Buckley v. Valeo (congress cannot appoint principle officers) i. Congress and its officials can participate in the appointment of officials who act merely in the aid of legislation (ie: doing research), but officials appointed by congress can NOT exercise authority under the law b. How does an agency get around the Buckley holding? i. Presidential appointment, congressional approval. Thats the modern FEC. III. Federal Agency Decision Making a. Rule making vs. Adjudication i. Rule making and adjudication is defined in APA 551 ii. Adjudication (outcome is an order) 1. ***decision affects the few, involves past conduct*** a. looks like a court deciding a case (quasi judicial) i. formal and informal types 1. formal/ trial type proceeding aka evidentiary hearing 2. informal-> think of informal adjudication as an agency decision that results from a process tat is neither rulemaking nor a trial type proceeding 2. Londoner v. City & County of Denver (Londoner= adjudication) a. Rule: Due process of law requires that at some stage of the proceedings before the tax becomes irrevocably fixed, the taxpayer shall have an opportunity to be heard, of which he must have NOTICE, either personal, by publication, or law fixing the time and place of the hearing. iii. Rule Making (outcome is a rule) 1. ***looks to the future, affects the many*** a. when the agency exercises its legislative functions by making rules, the process normally used is a relatively simple system known as notice and comment aka informal rule making. i. Requires that the agency 1. Give the general public notification that a rule is being contemplated and the language or a general description of the proposed rule 2. And to invite any interested person to submit comments on the proposed rule a. Usually 30 day period 2. Bi-Metallic Investment Co. v. State Board of Equalization (bimetallic =rule) a. Rationale: When an agency imposes a tax on an across the board basis, without attention to the particulars of any tax payer, due process does not require individualized hearings. It would be chaotic. iv. The quick take away

1. As far as the due process clause of the 14th amendment is impacted by rule making or adjudication, is whether a person is or is not entitled to a hearing on a decision by the administrative body. 2. You can get precedent out of adjudications, but rule making is more focused on looking to the future behavior of entities a. Summation i. Adjudication 1. Individuals or particular companies 2. Specifically affected 3. Looking backwards at precedent ii. Rule making 1. Broader scope 2. Looking forward 3. Setting up policy v.Rule making and adjudication in Action: Rules v. Orders 1. NLRB v. Wyman-Gordon Co. 2. The Current View a. NLRB v. Bell Aerospace Co. i. Holding: SCOTUS said that the choice between rulemaking and adjudication lies with the agency vi. INFORMAL RULE MAKING 1. There has to be an explanation for a decision even though its an informal adjudication( Citizens to Preserve Overton Park v. Volpe) a. Ie: agency needs to say yes or no on a subject, but has to also have a contemporaneous explanation for that decision. Cannot wait until in court being sued to give an explanation. i. Contemporaneous: needs to be in the record, just cant come up with the explanation when you go to court. 2. Need Record (contemporaneous record- cant decise after decision is made) + an explnation a. When on judicial review, agency decisions are evaluated based on the reasons given by the agency at the time the decision was made. An agency cant defend its decision on a basis that was not relied upon by the agency when it made the decision (chenery I and II) b. SEC v. Chenery (Chenery II) c. The jist of the fucking Chenery Mess i. Agencies may promulgate regulations by adjudication rather than by rulemaking procedures 1. Situations may come up that the agency never though to regulate, but that does not mean industry should get away with it until the agency can promulgate a rule a. The court was trying to throw the agencies a bone 2. Agencies have the expertise to be trusted with adjudicatory rulemaking

a. But when the agency does do this, courts will ONLY look at the justification for the decision that the agency advances- the court will not look for valid justifications the agency did not advance. i. You need a little bit of precedent to make your decision, but you cannot pull it out of your ass, and it would necessarily make it binding on the next guy Ford Motor Co. v. FTC 1. Rationale: this is a common business practice that Francis is doing. a. Agencies can proceed by adjudication to enforce discrete violations of existing laws where the effective scope of the rules impact will be relatively small; but an agency must proceed by rule making if it seeks to change the law and establish rules of widespread application. b. Rule making Authority (137 -162) i. FDA v. Brown & Williamson Tobacco Corp. and the Chevron Rule 1. failed because Congress intent and purpose was not ambiguous. a. Court said to look at the legislative scheme and what Congress had done, i. including legislative intent, ii. then to look through legislative history iii. , statutory language, iv. logic, and v. finally common sense. 2. Chevron Two Step a. Is it clear that congress has spoken on the issue? i. If yes, then give it effect b. If ambiguous, defer to reasonable agency interpretation Legislative rules v. non-legislative rules 1. Legislative rules: have the force of law a. Provide for notice and comment rulemaking 2. Non-legislative rules: dont have the force of law a. Just there for guidance of officers in the field vii.

ii.

c. Rule making: Internal development i. Executive Order 12,8666 of September 30, 1993 1. Directs agencies to take certain actions when developing their rules a. Establishes: i. Centralized executive (the white house) review 1. OMB (office of management and budget) a. OIRA (office of information and regulatory affairs) ii. Imposes substantial controls over major rulemaking proceedings iii. Unnecessary regulations should be avoided iv. Each agency designates a regulatory policy officer

v.Each agency has to prepare an annual regulatory agenda that gets sent to OIRA vi. Apply only to economically significant rules vii. Requirement of cost justifying benefit could be trumped by statute d. Rule making: external procedures i. Formal or informal procedures? 1. How do you know when formal or informal procedures are required? a. Look to the APA as a default but generally need to go deeper i. APA 553 really deals with informal rule making but subsection (c) deals with when to use formal procedures when rules are required by statute to be made ON THE RECORD after an opportunity for agency hearing b. Informal Rulemaking i. Governed by APA 553(c )- after notice required by this section, the agency shall give interested persons an opportunity to participate in the rulemaking through submission of written data, views, or arguments with or without opportunity for oral presentation. After consideration of the relevant matter presented, the agency shall incorporate in the rules adopted a concise general statement of their basis and purpose. When rules are required by statute to be made on the record after opportunity for an agency hearing, sections 556 and 557 of this title apply instead of this subsection. 1. Requirements for informal rulemaking: a. Notice of proposed rulemaking i. Looking for specificity in this situation b. Opportunity for public to participate c. Statement of basis and purpose, announcement of final rule 2. United States v. Florida East Coast Railway (word hearing not enough to get formal rulemaking after this case) a. Holding: the words AFTER HEARING are insufficient to trigger formal adjudicatory hearing over informal rulemaking proceedings i. ONLY THE LANGUAGE AFTER HEARING ON THE RECORD will trigger a formal hearing requirement ii. The APA states that none of its provisions limit or repeal additional requirements imposed by other statutes or law. Even though the Commission was required to comply with the hearing requirement of the Interstate Commerce Act involved here. 3. Vermont Yankee Nuclear Power Corp. v. Natural Resources and Defense Counsel a. Holding: Courts may not require procedures in addition to those specified in the APA or other applicable statutes- this is in regard to opportunity to participate i. Absent constitutional constraints or extremely compelling (think nuclear war) circumstances, the administrative agencies should be

ii. 1.

2.

3.

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free to fashion their own rules of procedure and to pursue methods of inquiry capable of permitting them to discharge their multitudinous duties. ii. Policy: SCOTUS thinks that courts should not be grafting on more requirements for agency rulemaking iii. Logical outgrowth test: when you are dealing with initial proposals and final regulations, if the final regulations are a logical outgrowth of the initial proposal, no re-notice is required. Informal Procedure: Notice and Comment Rule making United States v. Nova Scotia Food Products Corp. i. An agency must show why they chose the course of action when they did, aka show why this specific course ii. Must respond to all category of material comments Natural Resources Defense Council v. U.S. EPA a. Rule: a rule needs to have logical progression aka logical outgrowth! i. You cannot go A, B, C, and then decide on X without giving the public the capacity to comprehend, comment, criticize the process ii. If you do not have this, the agency needs to have another round of notice of proposed rulemaking 554(b) Public Citizen v. Department of State (rule of procedure-> cant substantially affect rights) a. Notice and Comment Rule making exceptions i. APA 553(b)(3)(A) 1. Except when notice or hearing required by statute, this section does not apply to: a. Interpretive rules i. Rules that interpret an agency statute, although people outside the agency are made aware of them b. General statements of policy c. Rules of agency procedure or practice d. When agency for good cause shows that notice and comment procedure is unnecessary e. The military American Mining Congress v. Mine Safety and Health Administration a. Brief Fact: MSHA tries to determine whether x-ray counts as a diagnosis with regards to reporting mechanisms to regional offices. b. Issue: whether program policy letters of the mine safety health administration stating the agencys position that certain x-ray readings qualify as diagnosis of lung disease within the meaning of the agency reporting regulations are REALLY interpretive rules under the APA? i. If it were a policy statement, then should have used notice and comment rule making ii. If it was an interpretive rule, should have used not c. Hold: the determination that x-rays qualify for diagnosis IS LEGISLATIVE

d. Rational: i. Congress has delegated legislative power to the agency ii. Agency has intended to exercise its legislative power- what they did seems to be binding on the public. iii. To determine if act is legislative rule: 1. No basis for enforcement without the rule 2. They published it in the CFR 3. Whether the agency has explicitly invoked its legislative authority ie: congress has delegated this power to us and we are invoking it 4. Its inconsistence with prior legislative rules: interpretive rules cannot trump an adjudicative rule because a legislative rule has the force of law, it is binding. So if the rule is inconsistent with the former rule, it has to be overruling it by another legislative rule. (note: an agency is bound to its own regulations once in effect) e. Adjudication: Trial Level i. APA 554(a) 1. This section applies, according to the provisions thereof, in every case of adjudication required by statute to be determined on the record after opportunity for an agency hearing, except to the extent that there is involved: ii. Formal or informal procedures? 1. Seacoast anti-pollution league v. castle a. Case involved the CWAs requirement that nuclear power plants obtain water pollution discharge permits. The Act is administered by the EPA but it was not clear on the face of the CWA whether the EPA must hold evidentiary hearings on these permits. The act required an opportunity for public hearing. Court actually went contrary to Florida East Coast Railway and said despite that on the record after opportunity for agency hearing, the court granted them a formal hearing. i. Why?: a discharge permit is a license, and a licensing is a form of agency adjudication that involves an individualized determination on some matter 1. Unless the statute says completely to the contrary there is a presumption of an evidentiary hearing in licensing situations b. Dominion Energy Brayton Point, LLC v. Johnson i. OVERTURNS SEACOAST and uses CHEVRON RULE iii. Informal Procedures 1. Pension Benefit Guaranty Corp v. LTV Corp. iv. Formal Procedures 1. Citizens Awareness Network v. United States a. 556 of the APA delineates the basic requirements of the hearing that lies at the heart of formal adjudication. Because agencies typically fine tune the APA hearing requirements in their procedural rules, there is

considerable variation in the manner by which each agency with formal adjudicatory authority conducts its hearing. b. the APA lays out only the most skeletal framework for conducting formal agency adjudications, leaving broad discretion c. Case is really about: what is the minimum amount of what an agency needs in adjudication procedure i. to be specific, 554 requires that, in cases of adjudication required by statute to be determined on the record after opportunity for an agency hearing the agency must follow the procedures outlined in 556 and 557 1. The agency must give notice of legal authority and matters of fact and law asserted. 554(b) 2. The oral evidentiary hearing must be presided over by an officer who can be disqualified for bias. 556(b) 3. Presiding officers cannot have ex parte communications. 554(d), 557(d)(1). 4. Parties are entitled to be represented by attorneys. 556(d). 5. The proponent of an order has the burden of proof. 556(d) 6. A party is entitled to present oral or documentary evidence. 556(d). 7. A party is entitled to conduct such cross examination as may be required for a full and true disclosure of the facts. 556(d) 8. Orders can be issued only on consideration of the record of the hearing. 556(d) 9. The transcript of testimony and exhibits is the exclusive record for decision and shall be made available to parties. 556(e). 10. The decision must include findings and conclusions, and the reasons or basis therefore, on all material issues of fact, law, or discretion presented on the record. 557(c)(3)(A) f. Adjudication: Administrative Appeal i. Nielsen Lithographing Co. v. NLRB 1. Apa 555 is a generally applicable section g. Adjudication: Procedural Due Process i. GOVERNMENT (state or federal action) shall not DEPRIVE (deprivation must exist) any PERSON (even applies to foreign nationals in the United States) of LIFE, LIBERTY, OR, PROPERTY, (what counts as life liberty or property?) without DUE PROCESS OF LAW (the govt. can deprive life liberty or property as long as due process was given). 1. When thinking about the due process clause think: a. Is it an adjudication? i. If yes, then we think about the due process clause and not rulemaking. ii. Goldberg v. Kelly i. Old rule: Due process attaches

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1. Where there is a grievous loss AND 2. There is statutory entitlement a. Class of recipient of a right under a statute b. Modern forms of property rights are statutory entitlements 3. Cost/efficiency aspect a. A hearing advances the democratic process i. Purpose of hearing is to ii. Prevent error AND iii. Promote fairness b. Notice and opportunity to be heard i. Tailored to the capacity and circumstances of the current situation ii. Due process is a flexible concept b. Goldberg Balancing test: The extent to which procedural due process must Lugar v. Edmondson Oil Co. a. Determining the scope of state action. i. Conduct is fairly attributed to the state when: 1. The deprivation must be caused by the exercise of some right or privilege created by the state or by a rule of conduct imposed by the state or by person for whom the state is responsible 2. The offending person must be a state actor (or at direction of) Entitlement theory and due process: case examples Board of Regents v. Roth a. to have a property interest in a benefit, a person clearly must have more than an abstract need or desire for it, more than a unilateral expectation of it he must have a legitimate claim of entitlement to it! Perry v. Sindermann i. Can look to abstract documents 1. May v. shall a. if shall is used, the government has tied its own hands, what you often end up with someone is entitled to something b. if may is used there exists discretion on the part of the government and you have no claim to entitlement Paul v. Davis i. Reputation: 1. Cant just be that arguing a reputation is hurt gives rise to a constitutional claim, there must be something more than stigma. Sandin v. Conner a. If you think an interest exists in the regulation

i. The regulation must be CLEAR and unmistakable on the issue you have a liberty interest here ii. Cannot have a mere unilateral expectation of a liberty interest b. Rationale: states would refrain from enacting regulations from fear of creating liberty interest and federal courts would determine day to day operations of prisons. What kind of hearing is due? 1. Mathews v. Eldrige a. How to analyze this type of question: i. Balancing test to determine what kind of hearing 1. balancing test a. What is the private interest? i. Who will be affected by the official action? b. Risk of erroneous deprivation? c. Probable value of additional procedure? i. Substitute safeguards? d. What is the governments interest? i. Fiscal and administrative burdens? IV. Judicial Review of an Agency Action a. Reviewability i. Citizens to Preserve Overton Part, Inc. v. Volpe ii. What standard of review should apply here? 1. Informal adjudication here a. Rule: When conclusion of fact in a formal proceeding, APA 706(2)(A) required the court to decide: i. Decision must be reasonable ii. Choice cannot be an arbitrary, capricious, abuse of discretion not in accordance with the law iii. State actors actions must follow the necessary procedural requirements 2. Formal adjudication a. Use APA 553(c), 556, and 557 b. Preclusion i. Webster v. Doe 1. Brief Fact: dude got kicked out of the CIA for being gay essentially. 2. Rule: Under APA 701(a)(2), even when Congress has not affirmatively precluded judicial oversight, review is not to be had if the statute is drawn so that a court would have no meaningful standard against which to judge the agencys exercise of discretion. However, there is a heightened standard for congressional intent with respect to precluding constitutional claims: clear congressional intent must be demonstrated. a. Where congress intends to preclude judicial review of constitutional claims, its intent to do so must be clear!!!!! iv.

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Preclusion of Judicial Review are there times when you wont even be able to get into court, or if you get there, youre going to be bounced right out? 1. APA 701(a): This chapter applies, according to the provisions thereof, except to the extent that(1) statutes preclude judicial review; or (2) agency action is committed to agency discretion by law. a. Preclusion can be EXPRESS or IMPLIED!

c. Standing i. Lujan v. Defenders of Wildlife (constitutional standing) 1. Rule: Plaintiff needs to suffer an injury in fact i. Concrete and particularized; something more than mere speculation 1. Actual or imminent, not hypothetical ii. Casual connection between the injury and conduct complained of 1. Fairly traceable to challenged action of the defendant and not in the result of independent action by some third party iii. Must be likely (as opposed to merely speculative) that the injury will be redressed be a favorable decision. 2. Policy for Standing a. Judicial efficiency i. Limits the number of lawsuits in courts b. Improved decision making i. Court wants the person bringing the suit to have a sincere, serious stake in litigation c. Fairness i. We want to make sure that the person bringing the action has an appropriate remedy available to them in the court d. Separation of powers i. Article III of USCA 1. The court is only supposed to hear cases and controversies 3. 3 types of standing: a. constitutional standing i. asks what restrictions does the constitution impose b. prudential standing i. a party must assert their own legal rights and interests and cannot rest their claim to relief on the rights or interests of third parties 1. ie: third party standing c. statutory standing: apa 702 i. refers to restrictions on standing that come from statute via congress ii. need to determine after finding constitutional standing iii. Zone of interest test:

1. the question of standing concerns, apart from the case or controversy test, the question whether the interest sought to be protected by the complainant is arguably within the zone of interest to be protected or regulated by the statute or constitutional guarantee in question. Thus the APA grants standing to a person aggrieved by agency action within the meaning of a relevant statute. 2. Basically, if you have suffered a wrong within the meaning of the statute, you have statutory standing 4. Associational standing test: (from lujan) a. Members could sue in their own right i. Any member could theoretically have standing b. Interests are relevant to the subject under consideration to the organization c. You do not need individual members to sue ii. Cetacean Community v. Bush (zone of interest test) a. Statutory standing 1. Zone of interest test: a. Basically, if you have suffered a wrong within the meaning of the statute, you have statutory standing. iii. Doctrine exhaustion of administrative remedies 1. If you are gonna try and seek judicial review, you gotta attempt all your administrative remedies first d. Judicial Review of Fact Finding i. Question of fact 1. Who, what, when, where, why Universal Camera Corp. v. NLRB 1. Substantial evidence test: a. Evidence supporting a conclusion may be less substantial when an impartial, experienced ALJ who has observed the witnesses and lived with the case has drawn conclusions different from that of the agency i. This is especially true when the credibility of the witness who testififed at hearings is in question b. The final agency decision, like the initial decision, must include, findings and conclusions and the reasons or basis therefore, on all material issues of fact, law, or discretion. 557(c ) (A) c. usually see the language factual conclusions, if supported by evidence are conclusive. iii. Pensaquitos Villige, Inc. v. National Labor Relations Board e. Judicial Review of Policy Making i. Motor Vehicle Manufacturers Association v. State Farm Mutual Automobile Insurance Co. 1. Standard for determining whether an agencys action is arbitrary and capricious a. Agency has relied on factors congress has not intended it to consider b. Agency entirely failed to consider an aspect of the problem c. Offered an explanation contrary to evidence before them ii.

d. Implausible that it could not be ascribed to a difference in view or the product of agency expertise f. Judicial Review of Questions of Law i. Question of law: 1. Does not require consideration of particular facts ii. Skidmore v. Swift & Co. 1. Holding: courts need to give some persuasive deference to the agency administrators expertise. The rulings interpretations of the Administrator, while not controlling upon the courts by reason of their authority, do constitute a body of experience and informed judgment to which courts and litigants may properly resort for guidance. g. Chevron, U.S.A., Inc. v. Natural Resources Defense Council a. Chevron 2 step redux (really 3 step) 1. does chevron deference apply? (step 0) a. Examples of when agency does not deserve chevron deference i. Agencies cannot interpret other agencies acts ii. has congress clearly spoken on the issue? a. if yes, court enforces congressional intent. You give it effect b. you can look at 2ndary sources c. if no, go to step 3 iii. if ambiguous, court asks whether agencys legal conclusion is permissible/ reasonable ii. United States v. Mead Corp. 1. Chevron applies when it appears that congress has delegated authority to the agency generally to make rules carrying force of law a. The agency interpretation claiming deference was promulgated in exercise of that authority b. Rule: i. Look at the administrative interpretation 1. If it has force of law a. Chevron applies 2. If it does not have force of law a. Skidmore applies ii. If chevron applies, ask if congress has clearly spoken on the issue 1. If yes, stop iii. If amgbiguous, court asks whether agencys legal conclusion is permissible/ reasonable.