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Administrative Law
Temple University School of Law
Green, Craig

**Public Interest v. Public Choice
**adjud v. legisl facts
Day 1: Basics  xxiii – xxvi (2nd full para.);1 (first para. & block quote); 3 – 15
Day 2: OSHA: Textbook: 379 (except first sentence) – 385 (up to 2)
Thursday, November 21, 2013
4:17 PM
·         Administrative Procedures Act of 1946 (APA) – Constitution of Fed Admin Law – pg. 896-911
·         Additions and/or Amendments to the APA since 1946 (pg. 5-6):
o    Freedom of Information Act of 1967 w National Environmental Policy Act of 1969 w Federal Advisory Committee Act of 1972 w Government in the Sunshine Act of 1976 w Regulatory Flexibility Act of 1980 w Administrative Dispute Resolution Act of 1990 w Regulatory Negotiation Act of 1990 w Unfunded Mandate Reform Act of 1995 w Congressional Review Act of 1996
·         Public Interest vs. Public Choice
·         PUBLIC INTEREST à Administrative Agencies formed to further the public interest (GOOD)
o    FUNCTIONAL REASON: accomplish a goal, function
o    Four PI Rationales:
·         1) Natural Monopoly à recognizes that, in some industries (e.g., cable, phone, electric), monopolies are the most efficient way of operation; seeks to prevent the monopolizer from exploiting people
·         2) Public Goods à recognizes that most people would not voluntarily fund certain industries that provide a public good (e.g., NPR, PBS, national defense, parks, police)
·         3) External Effects à Reverse of the public goods argument; some industries will overproduce “bads” (e.g., pollution) along w/ “goods” (e.g., energy); lies at the foundation of our entire legal system= reduce externalities
·         4) Asymmetric Information à recognizes that acquiring & evaluating information on a “good” is too costly for most consumers; seeks to prohibit outright certain unfair or unethical business practices
o    PI and Agencies: PI evaluates agecies base on whether they are well suited to perform their functions: “make policy” requiring expertise = maximize input of experts.  Adjudicating disputes: designed with process in mind
·         PUBLIC CHOICE à How individual preferences are aggregated and expressed through public decision making processes; not concerned w/ social welfare, but democracy (BAD)
o    Regulation as a product of the political process enlisting govt coercion to achieve goals that couldn't get on free market
o    Public when fought it out, is how it came out
o    People on different sides, compromise between parties
o    Differing Viewpoints on Rationales
·         1) Unnatural Monopolies à granted by the state to a dominant firm in a formative industry seeking to perpetuate its position
·         2) Private Goods à masquerading as “Public Goods” (e.g., PBS/NPR is just highbrow entertainment for an elite few, not a propogation of “culture”)
·         3) External Effects à self-serving; for those who weren’t granted a monopoly by the state, they use support regulations that will keep out the competition
·         4) Asymmetric Information à not a justification for regulation, but a source of political advantage enjoyed by particular groups.
·         COMPARE PC and PI: 
o    PI fails to 1) establish concrete definition of what “public interest” actually is; 2) formulate any coherent assumptions a/b the motivations of legislators & lobbyists; & 3) explain the highly protectionist & anticompetitive behavior of most “economic” regulatory agencies
·         PC is much more sophisticated in this respect
o    PC fails to explain the reversal of these agencies’ behavior in recent decades
·         What kind of reasons are there?
§  Kinds of reasons to explain agencies actions: CONSEQUENCES of think of the agenda or government
§  Politically: govt here to help (PI)=liberals
·         Govt is botched machine (PC)=
o    SEE Goldberg v. Kelly (US 1970) pg. 518 (WELFARE and PDP): public interest v. private interest (londoner v. bimettalic)
·         The Occupational Safety and Health Act (OSHA): A Case Study
·         What predated OSHA?State law;Tort law
o    Dangerous industries
·         Mines
·         Wharf
·         Federal contracts
·         Intended to provide uniform labor standards across the country: National regulatory for
w Intended to provide uniform labor standards across the country
·         No one opposes Workplace Safety laws; the dispute arises out of who/what should make & enforce them.
·         DOL wanted more power:Dressed it up with WORKPLACE SAFETY  
·          Dems and Organized Labor wanted power to vest solely in the Dept of Labor à argue that DOL exists to protect the interests of workers
·          Repubs and Business wanted power to be vested in an Independent Panel(s) à argue sep of powers will assure fairness & DP for both emplrs & emplees; high-level att’n; DOL couldn’t do it very well
·          COMPROMISE
o     Gave Rulemaking & Inspection duties to DOL à shifted Adjudication duties to an Independent body
o    Why was that so important?
·         Nixon picked a new sec of labor: less favorable to workers safety than before
§  He thinks that DOL is all liberal instead of the secretary
§  If we create an independent commission whole new group of people, pick afresh 
·         Sec of Labor established OSHA (OSH Administration)
·         What makes OSHA qualify as administrative law? à gives government enforcement powers
·         What protected workers before OSHA? à State statutes; Workers comp; State factories laws; & State tort law
·         So why OSHA? à Uniformity & Some of the old protections weren’t as effective
·         Who first supported the formation of OSHA? à Dept of Labor
·          Two Competing Views Applied To OSHA:
o    Public Interest: you see a government failure and a State failure to adequately protect workers
o    Public Choice: see States trying to protect themselves from businesses leaving for a less regulated state (“race to the bottom”); see Businesses trying to protect themselves from unpredictability
·         OSHA – The Statute
o    Definition: national consensus standard:
·         How A Standard Becomes A Standard
o    Sec. of Labor à appoint advis comm. (optional) à propose standard à pub in fed reg à open to public comment à public hearing (if objected to) à Issue, modify, or don’t adopt standard
·         NOTICE and COMMENT
o    w see §6; see also §7
·         Section 6 is the OSHA standards themselves
·         §5 says how employers and employees must interact w/ standards
·         Difference b/w OSHNAC and OSHRC
o    w OSHNAC is appointed by SOL
o    OSHRC: challenged orders
·         Citations can be challenged
·         Commission can overrule citations
·         Independent president appointed
·         hearings
§  Hearing Examiners (§12(e), (j), (k)) à do a lot of the legwork for the OSHRC
o    OSHNAC: national advisory committee
·         w §11 – Jud Rev à a party can Appeal a ruling of the OSHRC to Fed Dist Ct
·         Policy formation
o    Woodrow Wilson à Politics and Administration  must remain separate
·         The central normative precept of the reformist message was clear: it is the job of public administrators not to make policy, but rather to implement legislatively determined policy in the most efficient manner possible.
·         Politics: elected officials: agendas (democratic)
·         Policy should be made here
·         Administrators: non-elected officials
·         Implementing the policy
o    Herbert Simon à debunked WW, saying that politics and administration can never be separate
·         Administration is too close to political world to not be affected
·         Pragmatically, it is virtually Impossible for an agency to not set policy, which is political in nature
·         Rulemaking à like “little statutes”
·         Adjudication à like “little line of judicial precedent”

§  What kind of rules can they make: procedural, C&D, internal,
§  Afraid that the rules will not be in check
·         FTC: argues section 6 is broad to makes rules 
·         Same language as FCC
·         No limiting language of section 6
o    COURT HOLDS: FTC has the power to make substantive Rules
·         Rejects arguments of maxims
·         Other administrative agencies have Substantive Rulemaking power.
·         Substantive Rulemaking is Awesome b/c:
§  Resource-saving technique.
§  More fair than a case by case basis.
§  Opens up policy to a broad range of criticism
§  Avoids problem of singling someone out
§   Evolution of bright line rules is too slow
§  This is likely to decrease uncertainty
·         Only supplements Cease & Desist orders
·         Also allows party to show ‘special circumstances’ which makes it impossible for them to follow. 
·         And still subject to judicial review
o    Narrows inquiry conducted in proceedings under 5(b). You can no longer debate whether failing to post Octane levels is a violation. You can only argue the facts of whether the levels were posted
·         Pg. 394: Special Circumstances: Can argue the rule doesn't apply to indiv: oral hearing
o    Section 5: apply for special circumstances: can show it doesn't apply to me: Risk that back into uncertainty; Runs against
·         Within a year after this decision, Congress amended FTCA to place limits on substantive R/M power, and amended this 5 times in the next 10 years. Placed limitations on subject matter and procedure.
o    Magnuson-Moss Act to limit the power: more like adjudication
·         NOTE:
o    Court’s gushing over R/M may have been misplaced à R/M is very costly, time consuming, etc.
o    Also, Setting precedents through Adjudication isn’t that difficult
·         Administrative procedures act: APA
o    Rule: the whole or a part of an agency statement of general or particular applicability and future effect designed to implement, interpret, or prescribe law or policy or describing the organization, procedure, or practice requirements of an agency . . .
·         w Rules have General or Particular applicability
o    Order: the whole or a part of a final disposition, whether affirmative, negative, injunctive, or declaratory in form, of an agency in a matter other than rule making but including licensing.
·         RM v. Adjudication
o    Rule: general or particular applicability  
o    Adjudication: process to formulate an order
·         Everything other than a rule
·         Not clear what it is, but clear that they are different
§  Order is NOT a Rule
·         What Agencies Do
Informal Rulemaking à §553 – vast majority of R/M
      Notice 2) comment, 3) general basis
Formal Rulemaking à §§556-557 – looks like a trial (hearing, evidence, witnesses, cross-ex) – Magic Words = “On the Record
INFORMAL ADJUDICATION à “Dark Matter of Ad Law” – not really defined – see §555(e)
FORMAL ADJUDICATION à §554 – “On the record” and “After Opp for Agency Hearing”
·          exceptions in 553 important