Professor MacRae – Admin – Spring ‘11
Admin Law Definitions
Adjudication: very similar to a ct deciding a case. A properly conducted ADJ results in an order that deals with a narrow number of identified or identifiable persons that have done something in the past. At a hearing for an ADJ, one cannot testify unless he has a specific interest and his testimony is under oath. AG ADJ triggers constitutional due process concerns.
Administrative Procedures Act – APA : An act of Cong created in 1946 which attempted to set out procedures and rules for government AGs across the board. The act provides the procedures that AGs must use in RM or in ADJs, and the manner in which AG decisions should be reviewed by cts. It covers four main subjects: The required AG disclosure of information, the availability, timing and form of judicial review, scope of judicial review, and regulations of the procedures that AGs must employ in ADJ and RM.
Agency: Agencies are created by statutes called organic acts; defined in the APA as “any authority of the U.S. Government except Congress, Fed. Cts., territorial governments, and military entities.” The first type is singled headed, with one person at the top having ultimate decisionmaking authority (e.g., all of the cabinet level agencies.). The second type is multi-member, i.e., more than one person having decisionmaking authority. These are usually called independent AGs b/c: (1) the President often cannot remove members of the board/commission without cause; and (2) members are appointed for a set term of years. The creation of independent AGs was an attempt to promote disinterested professionalism.
Arbitrary and Capricious Review /Abuse of Discretion: a standard of review set out in § 706(2)(A); a very deferential standard and the typical review for informal RM & ADJ. Under this standard, according to the Ct in Overton Park, the AG must take whatever steps are necessary to provide an explanation that will enable the ct to evaluate the AG’s rationale at time of the decision. According to Justice Scalia, the A&C standard is the same as the substantial evidence standard, i.e., mainly one of reasonableness. The D.C. Circuit stated that the A&C standard also applies to the process by which an AG comes to a decision that is later deemed to be “reasonable” under the second step of Chevron (pg.442).
Capture doctrine: a theory of AG behavior stating that an AG has a limited energetic lifespan when its officials attempt to fully carry out the dictates of the empowering organic statute, after which the AG becomes somewhat aligned with the industries it regulates, becoming “captured.” This occurs b/c AGs & industry are the two parties that interact the most. Industry is the only party that has a direct stake in the outcome of AG decisions, and AGs often attempt to avoid fights with their only direct challenger. Thus, to appease industry and avoid conflict, the AG regulators will under-regulate, and soon make concessions to appease industry rather than enforcing the rules of the statute.
Categories of agency action: binding and non-binding.
Choosing between rulemaking and adjudications – See, infra “Rulemaking v. Adjudications”; See Chenery
District of Columbia Circuit Court of Appeals: the most important ct in regard to admin law; often considered more important than the Supreme Court with regards to admin law; often looked to for influence and guidance by other cts in admin law cases; hears about 1/3 of all admin law cases b/c many AGs are located in D.C . and many organic statutes grant the D.C. circuit exclusive jurisdiction over disputes.
Due Process Approaches –
(1) Nihilist: procedural DP is not understandable and is a case by case determination.
(2) Compartmentalist: DP jurisprudence exists but not at the level of generality that is suggested by speaking of DP; there are different levels for different issues, such as prisoner DP, and welfare DP, etc.
(3) Doctrinalist: there are enough principles to speak of a general law of DP despite fluctuations, and those principles can be applied in a general, across the board manner.
Due Process Calculus – Three factors to take into account to determine if procedures are sufficient: (1) The private interest (of the person in question) that will be affected by the official action, (2) the risk of an erroneous deprivation of such interest through the procedures used and the probable value, if any, of additional or substitute procedural safeguards; and finally, (3) the government’s interest, including the function involved and the fiscal and administrative burdens that the additional or substitute procedural requirement would entail. According to Cleveland v. Loudermill (pg.770), the elaborateness of the procedure must be proportional to the nature of the interest at stake.
Due Process Theories –
(1) Life, liberty or property theory: a claimant had to determine & articulate which interest was implicated and if he couldn’t, there was no due process protection. Under this theory, there was no protection for the loss of a fed job unless the job was taken away for a discriminatory reason.
(2) The grievous loss theory: advocated by Justices Frankfurter and Thurgood Marshall; if there was a grievous loss of any kind due to government action, then there was a right to be heard. This theory brought together life liberty and property, drawing from those combined rights. In these cases, the Court required a hearing prior to termination and, while the hearing needn't have been formal, and the nature of the hearing needn't have been elaborate, some form of a hearing was required. Additionally, under this theory, reputation injury was sufficient to invoke DP, but that is no longer the case (now requires harm to reputation plus some other injury – “reputation plus” (pg.724)). Additionally, under this theory DP varies for different interests and the manner in which it can be satisfied is differs from case to case (Goldberg was the case that required the most procedural protection under due process).
(3) Entitlement theory: the modern approach; stemming from Roth (pg.711). It holds that a person has an interest in things that he has already acquired through specific benefits. A person’s interest in a benefit is a property interest for DP purposes if there are rules or a mutually explicit understanding that support a claim of entitlement to the benefit, which may be invoked at a hearing. In order to qualify as an entitlement, the relevant statutes or regulations must specify identifiable criteria and connections; i.e., they must specify identifiable criteria that can be used to determine whether one is eligible for the benefit that he seeks; also, one must draw a direct causal connection between satisfaction of those criteria and receipt of the benefit. However, under O’Bannon, if the benefits are discontinued for everyone by a legislature, there is no DP violation.
a. However, entitlement theory (even if not invoked) still requires DP for core liberty interests, core life interests, and core property interests. The core liberty interest encompasses not only freedom from bodily restraint but also the right to contract, to engage in any of the common occupations of life, to acquire useful knowledge, to marry, to establish a home and bring up children, to worship God according to the dictates of his own conscience and generally to enjoy those privileges long recognized as essential to the orderly pursuit of happiness by free men. The core life interest has never really been thought of more than in terms physical existence. Core property interests have never been fully addressed either; but there is a strong indication that property has a constitutional core. If an interest is not within a constitutional core, it can still receive DP protection under Roth if it is an entitlement.
Executive Order: An executive order is a regulation or a rule intended as an AG’s statement of general applicability and future effect, intended by the AG to have the force and effect of law. The executive order is designed to implement, interpret, or prescribe law or policy, or to describe the procedure or practice requirements of an AG.
Formal adjudication: requires that one first look at the organic statute to see if formal procedures are required. If the magic language “on the record after opportunity for an agency hearing” is not there, it would seem as if Florida East Coast Railway would control; however, different circuits have taken different approaches. The Seacoast case (pg.237), from the 1st Cir., states that ct is to presume that the hearings must be on the record unless otherwise specified by statute. The 7th Cir., in City of West Chicago (pg. 231), ok if magic words were missing if Congress “clearly indicated” its intent to go formal. In Chemical Waste Management (pg.241), the D.C. Cir. stated that there are no presumptions and that an agency decisions to go formal or informal should be given Chevron deference if the precise issue has not been addressed in the organic statute, and the determination of the AG is reasonable. The SupCt has yet to determine what language will satisfy the requirement for formal ADJ. Pursuant to APA § 557, there is a requirement in formal ADJ that a party be informed of the time and place of the hearing, the authority under which the hearing is being held, and the matters of fact and law asserted.
Formal rulemaking: requires that one first look at the organic statute to see if formal procedures are required. To invoke formal RM, the statute must use the phrase: “on the record after the opportunity for an agency hearing,” as announced in Florida East Coast Railway (pg.218). Language in an organic statute that simply requires there be a decision made “after a hearing” is not sufficient to trigger the formal rulemaking pro
st to distinguish the two is that procedural rules that encode a substantive value judgment or substantially alter the rights or interests of regulated parties must be preceded by notice and comment, but this substantial impact test has been rejected.
Another test to determine the two is that substantive rules are those that regulate primary conduct while procedural rules are the furthest from primary conduct.
b. Interpretative rules – represent the agency’s understanding of a matter of law/policy arising from an organic statute; it clarifies rather than creates law. It reflects the agency’s construction of a statute it has been charged with administering. – EXEMPT
c. Policy statements (pg.306) – announcement of the policy (motivating factors and tentative goals) which the agency hopes to implement in the future RMs and Adjs; and leaves the agency and its decision makers free to exercise discretion. – EXEMPT
d. Determining if substantive (requiring notice and comment) v. interpretive (exempt from notice and comment):
(1) Legal effects test: [does rule that agencies says is exempt from rulemaking create a binding norm on regulated parties? If Yes à Legislative, if No à Interpretive] distinguishes a substantive rule (which operates just like a statute), the violation of which is grounds for prosecution w/o anything further, from an interpretative rule, which merely offers the AG’s opinion on matters of law or policy. Thus, if a binding norm is created, it's a substantive rule; if not, it's an interpretative rule. If a rule is found to be substantive under the legal effects test, it will be substantive under all other tests as well; if not, another test may, however, find it substantive. ** Problematic because people tend to treat nonbinding rules as authoritative.
(2) Substantial Impact on regulated: rejected (pg.307) – notice and comment procedures were required for rules that substantially impacted regulated parties, even if those rules did not satisfy the formal legal effects test.
(3) Impact on agencies test: [does the rule claiming to be exempt from notice and comment procedures have a binding effect on agency discretion or severely restrict it?] to determine whether a rule is substantive, thus test requires a period of experience with the rule to see how it has impacted the AG. Since there is no experience w/the rule when it's promulgated, this determination cannot be made immediately by a ct. According to P2C2 v. Shalala (pg.310), a general statement of policy is a statement by an admin AG announcing motivating factors the AG will consider, or tentative goals towards which it will aim in determining the resolution of a substantive question of regulation, which leaves an AG gen'ly free to exercise discretion. According to US Telephone, a “policy statement” that includes a list of schedules from which the AG many only slightly deviate is a substantive rule.
(4) Legal Effects 2.0/Williams/Law Professor’s Test: addresses four questions; if the answer is yes to any, then the rule is substantive. The questions are: (1) whether in the absence of a legislative rule by the AG, the legislative basis for AG enforcement would be inadequate; (2) whether it is published in the Code of Federal Regulations (= legislative); (3) whether the policy statement or interpretive rule effectively amends a prior substantive rule; or (4) whether the AG has explicitly invoked its general legislative authority.
Informal Rule Making Good Cause Exemption to notice and comment: Held by cts to be narrowly construed and rarely granted. The interim nature of a rule is a significant factor for the analysis of whether to grant a “good cause” exception, but it alone cannot justify the exception. The AG must offer evidence of the reasons that the good cause exception is to be permitted. Additionally, if a good cause exception is granted, then there is no requirement to have a second hearing later.