A. Introduction: What is Administrative Power?
The US Constitution creates and vests three types of “Power”—or legitimate authority—in its first three articles: the legislative, the executive, and the judicial. Nowhere does the Constitution mention any other type of “Power,” but neither does it say that this omission is intentionally exclusive. So our first unit explores the ways in which the Congress, President, and courts relate to the administrative “departments,” “agencies,” “commissions,” “bureaus,” “offices,” etc., according to modern legal doctrine.
1. An Overview: What is an “Agency”? [1-43, APA § 551] Besides learning the extremely broad definition of “agency” in the APA, this first reading introduces the fundamental questions of the course. Pay particular attention to the justification of or reasons for the proliferation of administrative agencies today.
I) Basic Doctrine
A) Admin Agencies and Admin Law
1) Admin Law – the body of law that governs the operation of administrative agencies, which play a critical role in the modern legal system.
2) Admin Agency – broadly speaking, is any public body that exercises government authority other than Congress (or the legislature of a state), the President (or Governor), or the Courts.
(i) 5 Agencies – EPA, NLRB, SSA, IRS, FCC
3) Executive Agencies – Located within a certain department (i.e. IRS in dept of treasury).
4) Independent establishments – (EPA, NLRB, FCC) not located in any department
5) Independent agencies – some independent establishments (NLRB and FCC, but not EPA) are referred to this way because they are insulated from Presidential control.
6) Function? – Agencies implement government programs, both regulatory and benefit.
B) FLOW CHART
1) Members of the Cabinet are known as Secretaries
2) Secretaries are in the line of Presidential succession
3) Somewhere, a statute created every single one of the Cabinet Level Agencies
4) There is no Agency that is constituted by the US constitution.
5) The statutes provide for the delegation of authority from the President to the each agency. No agency is created without an ORGANIC STATUTE.
C) WHY SO MANY AGENCIES?
1) Congress nor the Judiciary is not large enough to handle all the decisions
2) Not sophisticated enough in certain areas or EXPERTISE
3) Need to remove some decisions from the political process. This gives Congress someone else to make hard decisions that have political repercussions
II) Tensions in Admin Law
A) Expertise v. Political Popularity
1) The best public policy decision may sometimes require expertise that does not lead to a popular decision.
2) The need to balance the public interest in effective implementation of regulatory and benefit programs against the individual interest in protection from erroneous, arbitrary, or abusive exercises of power.
3) There is a necessity to delegate certain actions to agencies, but this seems to be a violation of the SOP that is a cornerstone of our government.
(i) SOP constrains the structure and operation of agencies. The proper relationship among agencies, Congress, the president, and the judiciary is, explicitly or implicitly, an aspect of virtually any administrative issue.
(ii) SOP re: Agencies
· President is elected and has a check
· Congress is politically liable
· Courts say what the law is
o Page 21 diagram: Agencies are in the middle of this power struggle
4) Features of Agencies
(i) Slow moving
· These can all be positive and negative attributes. With little accountability because they stay in office so long, they can tend to place importance on dated/old political and social agendas instead of today’s evolving world.
NBC v. U.S. (p7)
Facts: Communications Act of 1934 delegates to FCC the authority to license broadcast stations for “the public interest, convenience, or necessity” and “to provide a fair, efficient and equitable distribution of radio service (among the several States and communities).” FCC made a finding that the big companies were creating networks that they would control. This lead to anti-competitive activities that resulted in an inefficient use of the radio technology that was not in the public’s best interest.
Issue: (1) NBC argued that the FCC's power was limited to the technical aspects of radio transmission; (2) NBC argued that the Act did not explicitly allow the Commission to develop regulations for chain broadcasting; (3) NBC argued that the grant of power to the FCC was unconstitutionally vague, because it did not provide definite guidelines.
Holding: The Court concluded that the Chain Broadcasting Regulations were simply the particularization of the Commission's conception of the “public interest” sought to be safeguarded by Congress in enacting the Communications Act.
Rationale: (1) The Court found that it was not, but instead “we are asked to regard the Commission as a kind of traffic officer, policing the wave lengths to prevent stations from interfering with each other.” (2) The Court admitted this, but held that an explicit grant of power was not necessary in this context, because the field was new and dynamic, and that by granting power to the FCC, it intended “not niggardly but expansive powers.” (3) The Court found that the guidelines were the service of “public interest, convenience, or necessity,” and that those guidelines were constitutionally sufficient.
Analysis: Consistent with the end of the Lochner Era and the emergence of the Modern Supreme Court. Supreme Court leads the way by saying that the Agencies are to be afforded great deference and the courts need to step down and get out of the way. If you give so much power to the admin agency where they get to make the rules and also administer and adjudicate the rules, they significantly change the role of the courts
III) Agency Particulars (p.23-43)
2. Modes of Agency “Action” [43-63, APA §§ 553, 554].
What are the basic types of agency action? How and why are they different? Why would Congress choose one mode of action over the others? The five agencies your editors have selected for our focus—EPA,
NLRB, SSA, IRS, and FCC—present the range of action-types under the APA, a range of agency functions, as well as a developmentally and politically diverse sample.
I) Basic Doctrine – THE APA
A) APA – a general federal statute governing administrative process. Includes provisions establishing basic procedures for agencies to follow when they makes rules or adjudicate cases, as well as generally applicable provisions concerning the availability and scope of judicial review.
1) Application: applies broadly to most agencies, but also interacts with and may be superceded by the organic statute, the Constitution and some other generally applicable statutes imposing additional requirements.
2) Adopted in 1946 to set grounds rules for the growing role of agencies. Has been largely unaltered since that time.
3) Two most important provisions:
(i) §§ 551 – 559 à procedures governing administrative actions
(ii) §§ 701 – 706 à provisions concerning judicial review of admin action
B) Key Concepts
1) Distinction Between adjudication and rulemaking à adjudication is essentially defined to include everything but rulemaking, and rulemaking is defined broadly. Each has different procedures.
2) Rulemaking – APA defines as the “agency process for formulating, amending, or repealing a rule.” § 551(5)
(i) à A decision to ad
rement are also exceptions to those requirements as well.
· Non-Legislative Rules – named used for some of the rules adopted under these exceptions, particularly interpretive rules and general statements of policy under 553(b)(B) that do not have binding legislative effect.
4) Formal Rulemaking – resembles judicial trial à §§ 556 and 557
(i) Trigger – triggered when another statute, usually the organic statute, requires a rule “to be made on the record after opportunity for an agency hearing.” 553(c)
(ii) Generally inappropriate for the promulgation of rules, see Londoner and Bi-Metallic, so Congress has seldom explicitly required Formal Rulemaking and courts have construed the triggering language required by 553(c) narrowly. Thus, few agencies use formal rulemaking (FDA).
5) Additional Requirements à (4); may arise in several ways
(i) Organic may impose procedures that supplement or supersede APA requirements. Hybrid procedures that go beyond notice and comment but do not rise to Formal Rulemaking.
(ii) Agency may adopt procedures that supplement or exceed the organic and APA and those procedures will bind the agency.
(iii) May be subject to regulatory impact analysis requirements imposed by statute or executive order.
(iv) Some rulemakings may be sufficiently individualized to engage due process requirements.
E) ADJUDICATION à any type of agency action that is not a rulemaking. 551(6)-(7)
(i) Catch-all definition encompasses a vast array of agency decisions, many or which are extraordinarily informal.
(ii) Governed by §§ 554, 556, and 557
· 554 is the starting point which contains the basic requirements for hearings and incorporates 556 and 557 by reference. Those sections provide greater detai on the conduct of hearings, use of ALJs, and more.
2) Scope of APA adjudication
(i) 554, 556 and 557 – applies (with specified exceptions) “in every case of adjudication required by statute to be determined on the record after opportunity for an agency hearing.” This is the same as the trigger language for formal rulemaking in 553(c), but formal adjudications are much more common because many agency statutes incorporate the necessary triggering language or its equivalent and because the courts have been more generous in applying 554(a).
(ii) Informal Adjudication – do not fall under 554 and derive from the organic statute, agency rules, and due process.
(iii) Wong Yan Sung, U.S. (1950) – 554(a) includes hearings. One of the abuses the APA sought to fight was the combination of prosecutorial and adjudicatory responsibility in a single hearing officer.
3) APA Hearing Requirements (3)
(i) Basic Requirements – (1) personal notice of the hearing, which must include time, place, and nature of the hearing; (2) the legal authority and jurisdiction under which it is held; (3) and the matters of fact and law asserted. 554(b)
(ii) 554(c) – if the parties cannot settle the matter, a hearing and decision on notice in accordance with section 556 and 557.