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Administrative Law
SUNY Buffalo Law School
Mutua, Athena D.

Administrative Law – Mutua Spring 2013
Administrative Procedure and Practice, 4th ed. (Funk, Shapiro, & Weaver)
 
Introduction
 
What do agencies do?
·         Regulate private conduct
o    At both the state & federal level
o    Why?
§  Free, private markets have imperfections the gov’t can mitigate or remedy
§  Operation of unregulated markets can produce results or consequences that citizens consider unacceptable (even though they are “efficient” results from an economic perspective)
·         Administer Entitlement Programs
§  Social Security
§  Medicare
§  Medicaid
§  Welfare
§  Food Stamps
o    Here, focus is not on regulating private conduct—but on dispensing federal and state funds for specified purposes to the proper recipients
·         Everything else
o    IRS, USCIS, Treasury, Dep’t of State issuing passports, DOD, etc.
 
Types of Agency Action
 
I. Rulemaking Overview
 
·         Congressional legislation to create an agency establishes a “legislative mandate” for the agency
o    As part of this mandating statute (or sometimes “organic statute”), Congress can empower the agency to make rules
§  Often, these statutes lack details—the agency is expected to specify further regulation in addition to the rules created in its statutory mandate—to “fill up the details”
·         When an agency engages in “rulemaking,” it promulgates a regulation that has the same force and effect of law as if it had been passed by Congress or a state legislature
·         Federal agencies initially publish their regulations in the Federal Register, then they are annually collected and all the regulations are published in the Code of Federal Regulation (“CFR”)
o    Federal Register—the document that the Federal Government publishes daily for the purpose of providing notice to the public and interest parties concerning proposed and final rules and other agency actions
·         Quasi-Legislative
o    Agency authority to act is limited to the powers specified in its statutory mandate
o    Agency must also have adequate reasons for why a regulation has been adopted
o    Valid only if the agency follows the procedural requirements applicable to rulemaking
§  Formal—APA §§556-557
§  Informal—APA §553
·         APA § 553 Rulemaking
§  Indicates the procedures an agency must follow when it is engaged in rulemaking
§  The rulemaking process, is more complex then 553 would suggest
·         (1) Judicial interpretation of section 553 has imposed additional procedural obligations on agencies
·         (2) an agency may have to utilize procedures imposed by sources other than the APA
·         (3) the agency may wish to take advantage of certain mechanisms for developing rules, which entail special procedures
o    For example, an agency may desire to develop a rule through consensus-building among interest parties. A procedure for this exists called regulatory negotiation
o    If an agency utilizes an outside advisory committee for a rule they must comply with the Federal Advisory Committee Act (FACA)
·         (4) Executive branch agencies must comply with executive orders issued by the POTUS
·         (5) the rulemaking process is impacted by the nature of the internal procedures, incentives, and management methods used by an agency
o    (a)—this section of the APA does not apply to:
§  (1)—a military or foreign affairs function of the United States
§  (2)—A matter relating to agency management or personnel or to public property, loans, grants, benefits, or contracts
o    (b)—Notice of the proposed rulemaking (“NPRM”) shall be published in the Federal Register, unless persons subject thereto are named and either personally served or otherwise have actual notice thereof in accordance with law. Notice must include:
§  (1) A statement of the time, place, and nature of the public rulemaking proceedings;
§  (2) a reference to the legal authority under which the rule is proposed;
§  (3) the terms or substance of the proposed rule or a description of the subjects and issues involved
o    Except when required by statute, notice or hearing is not required for an agency to:
§  (A) create interpretive rules, general statements of policy, or rules of agency organization, procedure, or practice, or;
§  (B) when an agency has good cause that notice and public procedure are impracticable, unnecessary, or contrary to the public interest
o    (c)—After notice, agency shall give interested persons an opportunity to participate in the rulemaking through submissions of written data, views, or arguments with or without opportunity for oral presentation. Agency then incorporates a “concise general statement of their basis and purpose.”
§  “Formal”—“on the record after opportunity for an agency hearing”
·         APA §§ 556-557
o    (d)—Rule must be published at least 30 days before effective, unless:
§  (1) it is a substantive rule which grants or recognizes an exemption or relieves a restriction;
§  (2) it is an interpretive rule or statement of policy; or
§  (3) otherwise provided by the agency for “good cause”
o    (e)—Agency must give an “interested person the right to petition for the issuance, amendment, or repeal of a rule”
 
Life Cycle of Rulemaking
 
·         Rulemaking Initiation
o   Sources of proposed regulations
§  Legislation requiring specific regulations
·         This is the most common source
·         Ex. Clean Air Act Amendments require EPA to “promulgate, not later than 18 months after Nov. 15, 1990, a system for issuing, recording[,] and tracking the allowances that authorize emissions of acid rain precursors.”
·         Often, a statue mandating regulations merely requires the agency to adopt rules generally to “protect safety” or to adopt rules “in the public interest” Such as OSHA and the National Highway Traffic Safety Act
o    These broad requirements are where agencies have substantial discretion to determine what is appropriate
§  Staff Recommendation—“Bottom-up approach”
·         (1) Staff members may suggest that a rule is necessary when they identify problems the agency should address
·         (2) The agency’s enforcement efforts will generate information that can be used to determine how well existing regulations are working and what aspects are no working or are unrealistic
·         (3) The agency might even have a formal system of priority setting that identifies potential rulemaking subjects or areas and ranks them according to importance
§  White House or Congressional initiation—“Top-down approach”
·         President may instruct the different Departments or agencies to propose rules by writing a letter
o    Pres. Clinton did this frequently
·         OIRA prompt letters were aimed at a broad range of purposes:
o    To improve food labels;
o    Stimulate new dietary guidelines;
o    Promote use of lifesaving defibrillators in the workplace;
o    Protect motorists in off-center collisions;
o    Identify the most harmful particles in the air;
o    Protect beach goers from harmful bacteria;
o    Enhance community access to info about toxic industrial emissions;
o    Improve the designation of critical habitats under the Endangered Species Act; and
o    Reduce taxpayer liability due to default rates on mortgages
·         Congress
o    Can threaten to reduce the agency’s budget or attach an appropriations amendment limiting future agency action
o    Can call Congressional hearings…hostile questioning concerning the failure to respond to a problem considered important to a committee
§  The public
·         Lobbyists acting indirectly through legislators or executive officials
·         Can generate political heat that triggers a top-down reaction
·         Can file a petition for rulemaking
o

ssionally created timetable for agency action is final and if that timetable is missed by the agency should the court enforce it as missed, or continue to look at the rest of the factors in deciding how to proceed
§  Denial of a Petition
·         This is a “decision” that is subject to judicial review
·         Once a denial of a petition for rulemaking has been established, the next question is “was the denial lawful?”
o    Depends on what laws are applicable and what basis the agency used for denial
§  If the agency states that it lacks legal authority to act—the issue is purely legal
§  If the agency disagrees with the petitioner’s view of the facts—the issue is factual or judgmental
·         Arkansas Power & Light Co. v. Interstate Commerce Commission, (D.C. Cir. 1984) (p. 69)
o    AK P&L petitioned the ICC to make a rule to collect data to implement its responsibilities for approving the rates that railroads may charge to captive shippers
o    ICC observed that Congress hasn’t shown any intent to require a rulemaking proceeding; also believes this would be inconsistent with the design of the act
o    ICC argues that individual adjudications are superior and that rulemaking would be cumbersome and burdensome
o    Court: finds that ICC’s conclusions are “reasonable” and that courts will compel institute rulemaking only in “extremely rare circumstances”
§  Such review is limited to ensuring that the agency has adequately explained the facts and policy concerns in relied on, and that the facts have some basis in the record
o    Held: APA Scope of review is “very narrow”—no basis to compel the ICC to make a rule
·         Massachusetts v. E.P.A., (SCOTUS 2007) (p. 70)
o    19 private organizations filed a rulemaking petition asking EPA to regulate “greenhouse gas emissions from new motor vehicles under § 202 of the Clean Air Act.”
o    15 months later, EPA requested public comment on the issue
o    EPA then denied the rulemaking for two reasons:
§  (1) Contrary to previous opinions of former general counsels, EPA actually lacks authority under the CAA to issue mandatory regulations to address global climate change; and
§  (2) Even if EPA did, it would be unwise to exercise its authority at this time
o    Court: Agency has broad discretion to carry out its responsibilities
o    In Heckler v. Chaney SCOUTS held that an agency’s refusal to initiate enforcement proceedings is not ordinarily subject to judicial review
o    There are key differences between a denial of a petition for rulemaking and an agency’s decision not to initiate an enforcement action
§  In contract to nonenforcement decisions, agency refusals to initiate rulemaking are less frequent, more apt to involve legal as opposed to factual analysis, and subject to special formalities.
§  They moreover arise out of denials of petitions for rulemaking which (at least in the circumstances here) the affected party had an undoubted procedural right to file in the first instance.
§  Refusals to promulgate rules are thus susceptible to judicial review, though such review is extremely limited and highly deferential