Administrative Law Edley Fall 2014
I. History of Administrative State
English Antecedents: Adlaw originates from common law courts of England. (CB 15)
Concept of government accountability was not fleshed out enough in the law to protect against malfeasance, so courts sensitive to the need for administrative flexibility built doctrines of official privilege based on discretionary authority
Consequently, common law courts in the seventeenth century refashioned writs with specific rules for controlling official action
e.g., writ of mandamus required official to restore entitlements, writ of prohibition precluded administrations from exercising powers not within jurisdiction, writ of cert to cure jurisdiction
Independent judiciary was not an inevitable as a result of need to control admin actions
France and Italy have specialized tribunals within the bureaucracy, not independent from it
The American Experience to 1875: Even during the alleged heyday of laissez-faire, national and state government played a substantial role in the economy, although the role was substantially less extensive and centralized than today. (CB 16)
It was a period of laissez-fairez during 1775-1875
But this was period was not free of governmental interaction with the market
Frank Bourgin, The Great Challenge: The Myth of Laissez-Faire in the Early Republic (1989)
Samuel Beer, To Make a Nation (1993)
Constitution was a rejection of total laissez-faire principles, because the government was widely perceived as too weak
Imposed taxes (tariffs, excise taxes_ distributed public lands to homesteaders and railroads, granted patents, paid military pensions, regulated relations with Native Americans, controlled immigration, regulated marine navigation and commerce, operated post offices
However, still less extensive
As a result of the principle of free and equal markets unfettered by government restrictions and grants of monopolistic “privilege”, responsibility for alloction of resources in the economy, distribution of wages, retns, profits, etc. shifted from admin law to courts, to be formulated in tort, property, and contract rules
However, many admin actions were simply not constrained by judicial review
1875 to 1930: The Rise of Administrative Regulation and the Traditional Model of Administrative law: The first administrative regulation was a) state based, and b) born out of a need to regulate railroad policy, grain elevators, and other natural monopolies. (CB 17)
The Interstate Commerce Commission (abolished in 1995) was created to regulate natural monopolies, but why it was created is subject to dispute.
One view sees it as a consequence of “market failure” that caused destructive competition and wasteful/duplicative services. This view contends the ICC was not only to shift income from rr to shippers, but to advance a more general public interest in efficient transportation through administrative planning
Revisionist view sees commission as created to advance interests of railroads by protecting them against rigors of competition.
The ICC dispute, as to the justification of its origin, reflects the same concerns as similar disputes about why legislatures create agencies.
The traditional model of administrative law:
a. Legislature must authorize administrative sanctions on private persons through rules or standards that limit agency discretion
Policy: administrative officials possess no inherent powers over private liberty or property, that power must be delegated.
Policy: promotes traditional rule of law values by connecting it to a legitimate body – even-handed treatment, limits on corruptive influence, and settling expectations.
b. Procedures used by the agency must tend to ensure agency compliance with legislative directives
Policy: we want the agency to promote rational directives in order to promote rule of law values
This justifies trial-type hearings, and the requirement that the agency base decision on the record generated
c. Judicial review must be available to ensure that agencies use accurate and impartial decisionmaking procedures and comply with legislative directives
Courts must be a check
d. Agency processes must facilitate the exercise of judicial review
The independent judiciary must police conformance to statutory authorization by reviewing both factual and legal bases
The New Deal and Beyond 1932-1945: The New Deal is sometimes described as a “constitutional moment” because it represented a fundamental rethinking of preexisting constitutional structure, by revising the basic cornerstones of the Constitution (conception of individual rights, federalism, separation of powers, judicial review). (CB 19)
The Great Depression common law catalog of rights too strongly protected property and freedom of contract, and failed to include basic rights like security.
The New Dealers sought to remedy this by adding a range of new social and economic guarantees.
State-based regulations were cost-prohibitive, because citizens would leave the state if regulatory structures overburdened corporations, so the regulatory mantle shifted to the federal government.
Whereas previous regulatory initiatives had been isolated exceptions to the common law baseline, the New Deal represented endorsement of “government activity as a permanent bulwark against deep-rooted structural shortcomings in the market economy.”
SEC to regulate capital markets
NRB to encourage formation of unions
Labor market standards and law developed: Federal minimum wage and maximum hour legislation, and program for state employment compensations
FCC and CAB
These new measures were bitterly assailed by corporate leaders.
Defenders sought to justify functions.
Courts sided with the right and curbed agency power initially.
However, threats from the executive (Roosevelt’s “court-packing” plan) caused a shift to conspicuous deference to agencies.
1945 to 1962: The Administrative Procedure Act and the Maturation of the Traditional Model of Administrative Law: The interim period tried to mete out a working compromise between New Deal enthusiasts, that culminated in the APA. (CB 22)
As the national sense of crisis of the depression faded, critics of New Dealers gained strength.
1946 APA:
Section 2 = defs
Section 3 = transparency requirements (publications, responses to requests)
§552 = FOIA
Section 4 = §553-58 = Agency procedures
§553 = (Informal) Rulemaking – publication in Federal Register, and decision must be “on the record after opportunity for agency hearing.”
§556-57 = Formal Rulemaking (trial-type hearing procedures) (quite rare)
§§554, 556, 557 = Formal Adjudication – trial-type hearings conducted by independent administrative ALJs, followed by appeal to head of agency; partial separation of functions between prosecuting staff and agency decisionmakers
Section 10 = §§701-06 = Scope of judicial review (codify adlaw principles)
§706 = “arbitrary, capricious, [or] an abuse of discretion”; in fact finding, “substantial evidence”
1962 to 1980: The Rights Revolution, Critique of Administrative Process and Administrative Substance, and “Public Interest” Administrative Law: Public trust in administrative power to regulate waned at the same time as an outburst of enthusiasm for regulatory solutions. (CB 24)
The Rights Revolution, 1965-1975, is so named for the expansion of rights during the civil rights era.
A number of agencies were created to protect the new rights: Consumer Product Safety Commission, Equal Employment Opportunity Commission, National Highway Traffic Safety Administration, EPC, NRC, and OSHA. (See CB 24-5 for full list)
This regulation differed from the institutional regulation of the 1930s, because it was not focused on stabilizing the economy or establishing business confidence, but to protect health and safety from hazards (air, water, consumer products), and to counteract discrimination against disadvantaged groups.
Criticism took the following forms:
Nader “capture” criticism: Agencies had been captured by the firms they were supposed to regulate; agency “indolence” could be solved by greater openness in decisionmaking, statutory deadlines for agency action, default rules when agency fails to act by deadlines, increased pa
n Congress has improperly delegated legislative power.
Congress never delegates legislative power, because the statute outlines only a grant of executive power. Under this view, it is never the right question to ask whether the statute has granted too much discretion.
b. The Nondelegation Doctrine – Early History and Pre-1935 Supreme Court Decisions: Although only explicitly invoked in 1935, there have been very loose standards regarding delegation authority. (See CB 41 for historical case discussion)
c. Schecter (“we think that the code-making authority thus conferred is an unconstitutional delegation of legislative power”)
Issue: whether the president’s discretionary authority to establish agencies to police “fair trade” was legitimately cabined by the statute.
Holding: no
Rule: The Court held that Section 3 was “without precedent” and violated the Constitution. The law did not establish rules or standards to evaluate industrial activity. In other words, it did not make codes, but simply empowered the President to do so. A unanimous Court found this to be an unconstitutional delegation of legislative authority.
d. Why is nondelegation good?
By delegating, you forfeit the legitimacy of the elected leaders
Nondelegation promotes rule of law by a) cabining discretion b) imposing guidelines to unfettered policy action (abuse of discretion, arbitrary and capricious)
à Dual-branch lawmaking is good
e. Benzene (“sweeping delegation of legislative power” that … might be unconstitutional under Schecter Poultry”)
Facts:
Parties: Industrial Union Department, AFL-CIO v. American Petroleum Institute
Industry challenged regulatory standard limiting occupational exposure to benzene.
Organic Authority: Occupational Safety and Health Act (OSHA) governs the OSHA agency
“The term ‘occupational safety and health standard’ means a standard which requires conditions or use of one or more practices, means, methods, operations, or processes, reasonably necessary or appropriate to provide safe or healthful employment and places of employment.”
Where toxic materials concerned: “The Secretary, in promulgating standards dealing with toxic materials… shall set the standard which most adequately assures, to the extent feasible, on the basis or best available evidence that no employee will suffer material impairment.”
Issue: Is the Secretary's interpretation of “extent feasible” to mean that if a material is unsafe he must “set an exposure limit at the lowest technologically feasible level that will not impair the viability of the industries regulated.”
PH: Fifth Circuit Secretary was under duty to determine if benefits bore reasonable relation to costs; ag failed that duty because there was no substantial evidence of benefits.
Holding: Affirmed. The Act was not designed to impose a risk-free environment whenever technologically and economically feasible, but to eliminate risks of harm, so long as it is feasible. The secretary erred in failing to carry the burden of determining that the carcinogen was harmful.
Rule: unless and until a finding that the level is “reasonably necessary to r appropriate to provide safe or healthful employment and places of employment”
SIGNIFICANCE – general can be more important that specific, when coupled with legislative history
