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Administrative Law
University of Dayton School of Law
Howarth, Cooley R.

ADMINISTRATIVE LAW OUTLINE
 
AGENCY
·         APA §551(1)—lists exceptions to agencies
·         Departments
o   Are agencies and they have the highest statute
o   Headed by a Secretary (except for DOJ, which is headed by Attorney General)
§ President appoints these heads with advice and consent of Senate
·         By tradition, they hold their offices at the pleasure of the President, which means he can fire them for any reason.
o   Contain a host of sub-entities, each of which is an agency for legal purposes.
§ The individuals who head most of these agencies within departments are appointed by the President with the advice and consent of the Senate and serve at the President’s pleasure
·         Many agencies are freestanding, which means they are not part of a department.
o   Many are known as “independent agencies”
·         Executive Agencies
o   All departments and almost all the agencies within departments are executive agencies
o   The President’s responsibility to implement laws would seem to be hindered if the President could not fire an administrator who fails to adopt policies favored by the President.
·         Independent Agencies
o   Tend to be slightly more independent from the President’s influence than executive agencies
§ 1. Are not headed by a single person, but a multi-member group that reaches decisions by majority vote.
§ 2. Members of the group heading the independent agency normally can only be removed for cause.
§ 3. Members serve a term of years on a staggered basis, so that a President in a single term might not be able to replace the entire governing group.
§ 4. The statutes creating independent agencies normally require that no more than a simple majority of the agency come from a single department.
o   Congress has forbidden the President from firing some administrators because of policy disagreements.
·         Supreme Court has forbidden Congress from appointing or removing administrators, and it has declared unconstitutional the legislative veto.
·         Federal agencies execute the laws of the US
o   Regulate Private Conduct (Regulatory Agencies)
§ General justification for extensive regulation of private conduct:
·         1. The country has a private market system, but markets are subject to imperfections that the government can remedy or at least mitigate.
·         2. The operation of unregulated markets may also produce results or consequences that a majority of the citizens consider unacceptable, even if they are efficient from an economic standpoint.
o   Regulation is also used to conform market outcomes to social values
o   Regulation addresses inadequate consumer information
o   Regulation also used for spillover costs which exist when the activity of an individual or company harms other persons or the environment
§ The harm is a “spillover cost” because the responsible person or company will not pay for the damage it caused in an unregulated market.
Administer Entitlement Programs
§ Ex. Social Security, Medicare, Medicaid, Welfare, and food stamps
§ Focus is on dispensing federal and state funds for specified purposes to the proper recipients
§ Economic justifications
·         Social Security and Medicare are in theory insurance programs that federal government created because the market would not.
·         Welfare programs can be described as increasing the general welfare of society because of the crime and social upheaval that would occur in the absence of these programs.
o   Everything else
·         Scope and Source of Admin Authority
o   Source
§ Almost always a grant of authority from legislature to agency is in a statute (organic statute/ enabling act)
§ In some states, the state constitution creates the agency
o   Organic Statute functions
§ 1. Creates agency as an unit of government and empowers the agency
§ 2. Serves as a vehicle for delegation of power
§ 3. Measuring rod for all agency authority
·         No inherent agency authority
·         No common lawàall statutory
·         Ultra vires: an action by the agency beyond the proper statutory authority of the agency.
 
TYPES OF AGENCY ACTION
·         Rulemaking
o   Corresponds to legislative action
o   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
o   Most agencies have rulemaking power
o   When Congress creates an agency, it establishes a legislative mandate for the agency
§ As part of the mandate, the legislature can empower the agency to make rule
·         The agency can specify further regulations in addition to the rules created in tis statutory mandate
·         Legislature gives the agency the “power to fill up the details”
§ Federal agencies initially publish their regulations in the Federal Register
§ An agency’s rulemaking power is only “quasi-legislative’àthe agency does not have the power to regulate any subject permitted by the Constitution, because its authority to act is limited to the powers specified in its legislative mandate.
§ Agency rules are subject to judicial review to ensure that a rule does not exceed an agency’s statutory authority
§ Agency must have adequate reasons why a regulation has been adopted.
§ Regulations promulgated by an agency are valid only if the agency follows the procedural requirements applicable to rulemaking.
·         Adjudication
o   Corresponds to the judicial function of the courts
o   When an agency engages in adjudication, it applies an existing rule or statute to a set of facts to determine what outcome is required by the rule or statute
§ An agency can use adjudication to determine whether a regulated entity has violated an agency rule or a provision of a statute that the agency enforces.
o   Adjudication can also be used to determine whether a person or entity qualifies for some government permit, benefit or entitlement.
o   Many agencies have not been granted the authority to adjudicate alleged violations of statutes or regulations which those agencies enforce.
§ These agencies must bring actions in a federal court to enforce the statutes or regulations
o   Power to adjudicate means that an agency decision concerning how a law or regulation applies in a specific circumstance has the same force

e Congress is given the power “to make all laws which shall be necessary and proper” to carry out its functions under Art. I.
o   Supreme Court has gone through three phases in evaluating delegations of power.
§ The Court rejected all non-delegation challenges until the 1930s, when it struck down two statutes on this ground.
§ The Court has rejected all additional non-delegation clauses to justify narrowly interpreting an agency’s statutory authority.
§ JW Hampton (1928)
·         The Court approved the delegation because Congress has established an “intelligible principle” by which justices could determine whether the President had acted within his delegated authority.
§ The Court has used the “Intelligible principle” test since Hampton to apply the non-delegation doctrine.
·         Under this approach, Congress does not violate the prohibition against delegating its legislative powers as long as it sets the boundaries of the agency’s authority.
·         If a delegation is broad and ambiguous, it may not offer sufficient guidance to the courts concerning the extent of the agency’s authority to promulgate rules.
§ Panama Refining Co v. Ryan (1935)
·         The Court concluded that Congress failed to provide an intelligible principle.
·         The Congress declared no policy, has established no standard, has laid down no rules.
§ ALA Schechter Poultry Corp (1935)
·         The Court held that the restrictions did not establish an intelligible principle that limited the President’s authority.
§ Carter v. Carter Coal Co. (1936)
·         The Court declared this third New Deal statute unconstitutional because it delegated legislative power to private persons.
§ The decisions of the 1930s prompted FDR to propose his Court Packing Plan, under which he proposed to add an additional justice to the Court for each justice who was over the age of 70.
·         Although it was never enacted, it is widely viewed as prompting a shift in the Court’s jurisprudence on a variety of issues.
o   For the next half-century, the Court adopted a more expansive view of the federal legislative power.
o   In addition, the Court took a more expansive position regarding Congress’ power to delegate authority.
o   Whitman v. American Truck Assoc., Inc. (2001)
§ In a delegation question, the constitutional question is whether the statute has delegated legislative power to the agency.
§ Art. I, §1 vests all legislative power herein granted in a Congress of the US. This text permits NO delegation of those powers.