1. Procedural Due Process
I. Admin Law Overview
A. Topics to Cover
1. Procedural Due Process
2. Separation of powers (agency w/in gov)
a. “Agency’s meld together the branches of gov. in a way that is slightly concerning”
b. Justification is for it is Expertise- benefit of having tax expert administer tax law > separation of powers risk
3. Judicial Interpretation of Agency Action
a. ex1. Administer Procedure Act
B. Types of agencies
1. Ones that existed when the government was formed:
a. Embedded w/in the executive branch
(1) Examples: DOJ, DOL, State Department, EPA
2. Multi-headed, independent agency
a. Typically – commissions or boards
b. Examples: ICC, FDIC, SEC, etc.
3. Independent, single-headed agency – ex., SSA
4. No leader, multi-headed, reporting to the President – ex., base closing commissions
C. Agency’s Authority/Power
1. GR1- “Agencies must act within the scope of the authority Established by their organic statute.”
2. Sources of Administrative Law
a. The Constitution
b. The APA
c. Agency Enabling Acts and other Statutes
d. Additional General Statutes
e. Agency Rules
D. Role of Agencies
1. Justice Marshall- everyone has a voice, look at the social justice of it
a. Tom T: people who get adverse decision, but through fair process, more likely to accept it and feel better about it
2. Shaw- dignity/social justice/fair is hopeless….the best we can aspire to is “beuacratic rationality”
a. if we can generate a decision that gets things 90% right, its the best system…even if those 10% are wrongfully denied
E. Approaches/Policy of Agencies
1. Formalist- preserve the Philadelphia Convention’s division, disallow novel arrangements
2. Functionalist- have a cost/benefit analysis (ex1. arbitration when both parties consent)
a. uses terms like: “degree of incursion”, “core powers”
II. Agencies POWERS (& Authority)
A. (Interstate Commerce Commission v. Cincinnatti, New Orleans, TX Railway)
a. Congress created the ICC to regulate railroad rates….the ICC wanted to put out regs that SAY what rates are
b. ICC set the rates that carriers could charge and ordered the railways to change their other freight charges to be in accordance with the ones set.
2. Issue/Hold- does the ICC have the power to set rates? NO
a. REAS1- b/c don’t have the express powers to do so from the act creating the ICC and setting powers/responsibilities
b. REAS2- they aren’t an elected body and as an agent of the principal (congress) they lack the power to modify the act on their own
c. ALT1- ICC could have gone to Congress and asked for power to set rates IN the Act
(1) GR1- Agency is always free to go to congress to ask to Modify the Organic act
(a) “Congress COULD do all of this themselves, but they are delegating to Agency to administer”
3. Three Options Congress COULD have taken
a. Congress could set the rates – but would have competency and responsiveness issues
b. Authorize the ICC to set the rates – but would have capture issues (buddy/buddy)
c. After the fact determination of the reasonableness of the rates being charged.**this is what they selected.
a. GR1- Agencies Powers are limited to what’s in the Act….Agencies CANT rewrite creating act on own (ICC v. Cincinnati, NOLA, TX Rail)
(1) GR1a- Agency is always free to go to congress to ask to Modify the Organic act
b. GR2- Power to Enforce & Execute Rates does NOT Imply the power to Set Rates
(1) Court- Congress had not expressly granted the ICC the right to set the rates for freight carriage; they were not to be implied from the power to enforce and execute (judicial, executive and administrative powers). Setting the rates was considered a legislative act.
B. (Pennsylvania v. West Virginia)- limits of expertise
1. Facts- the WVA statute giving preference to in-state consumers was unconstitutional as a violation of the interstate commerce clause
2. Ct: “this decisions is BEYOND a court, BUT it could be decided by a tribunal
a. Brandeis’s dissent – the judicial system and the Court are not able to oversee and manage the operation of certain enterprises. Must have experts – this is the argument for the existence of agencies.
3. Kroto: this is stupid to think a tribunal could do this….”there is something really naive about trying to line up the supply and demand”
a. “how could you get everyone together on a tribunal”
b. “eliminates political accountability
c. “this is here to say we COULD try make decisions SOLEY based on science and expertise (like Russians tried to) but NOT what we want
C. (FDA v. Brown & Williamson)
a. In 1996, the FDA asserted jurisdiction to regulate tobacco products, concluding that nicotine was a “drug” within the meaning of the Food, Drug and Cosmetic Act.
b. Based on this authority, it promulgated regulations intended to reduce tobacco consumption among children and adolescents.
2. ISSUE/Hold- does the FDA have the authority to regulate cigarettes (had NOT for past 40 years)? NO, outside power (FORMALIST)
a. REAS1- to let an agency redefine its powers because it thinks it could run things better… would open door
(1) REAS1a- could work here, but the number of bad decisions could lead to would outweigh…need to have Congress co-sign on powers
b. Dissent- (4 justices) would help/increase (FUNCTIONALIST)
c. Kroto- wouldn’t end world here BUT the issue would come with the cases that DONT come to Ct….Agencys slowly increasing their power
a. GR1- Congress has to be ultimately responsible for legislative acts, CANT just say “go and do good in this area”
(1) GR1a- Congress specifically regulating an area and NOT given Agency power to regulate….Agency CANT decide to reg
(2) “Where Congress denies an agency the power to regulate a particular ar
nment and collection of property taxes….
II. “However, where the state legislature commits to a subordinate body the duty of determining whether, in what amount, and upon whom a tax shall be levied, due process is required at some point before the tax is assessment, to allow the taxpayer an opportunity to be heard, of which he must have notice, either personal or by publication.”
b. (Bi-Metallic Investment Co. v. State Board of Equalization)- Legislative (Rulemaking) NO DP
(a) Denver property owner sought order enjoining the State Board of Equalization and the Colorado Tax Commission from putting into force, and the assessor of Denver from obeying an order increasing the property taxes in Denver by 40%.
I. The tax commission and the board of equalization reassessed all the property in the city.
II. The property owner alleged reassessment or raise in valuation could only be made upon notice and hearing or opportunity to be heard.
III. The property owner contended that the reassessment deprived it of due process in violation of the Fourteenth Amendment because there was no hearing and no notice.
(b) US Supreme Court held that the reassessment order was valid because notice and hearing were not required.
I. The Court reasoned that general statutes within the state power were constitutional without providing a chance to be heard.
(2) ISSUE- Are all property owners entitled to opport be heard prior to adoption of administrative order increasing property taxes? NO
(3) GR1- Procedural Due Process does NOT apply to legislative action
(a) GR1a- Property Owners NOT Entitled to opportunity to be heard before administrative order increasing property taxes is adopted
c. PDP w/ Prop. Taxes
(1) if state coming to take YOUR property Individualized Assessment then HAVE Due Process right hearing/challenge (Londoner)
(2) if state has GENERAL law that affects you, have NO Due Process right to hearing/challenge (Bi-Metallic)
2. Legitimate Claim of Entitlement (“Expectancy”)…and POSITIVE LAW Test
a. GR1- Must have LEGITIMATE CLAIM OF ENTITLEMENT to [……] to = “Property” for Due Process Claim (Board Regents v. Roth)
(1) “Positive Law Test”- GR2- Due Process “Property (like”Legit Claim of Entitlement”) Can Arise by (POSITIVE/Substantive Law):
(a) Statute (best)
I. “Whether something is a property interest protectable by the Constitution, turns on if it is something that state law protects”