Administrative Law | Flournoy | Fall 2017
Some Introductory Material
Agencies do:
Investigate
Develop rules and policies to implement statute
Issue permits for regulated activities
Conduct research
Enforce statutes and rules
Disseminate information/public advocacy
Award grants/funding
Our system creates two dichotomies:
Rulemaking v. adjudication
Formal v. informal procedures
Constraints on Agency Actions
Must fall within executive power to execute (separation of powers)
Must not exceed substantive powers granted by legislature (or Constitution)
Must not violate due process or procedures specified by legislature in enabling act
Elements of Fairness
Reviewability: review by the court is a safeguard that makes regulation by agencies more fair.
Consistency: due to equal protection and due process requirements which establish procedures
Efficiency
Public Involvement: knowledge and participation
The Nature and Function of Administrative Agencies
A. The Origin & Mandate of Administrative Agencies
1. Theories of the Origins of Admin Agencies
1. Public Interest Theory: there is an underlying social problem or need to which the administrative apparatus is the solution/responses. The agencies serve a public interest or promote a public value.
Goal: identify benefits to the general welfare of society that flow from a government action
Ideology: welfare economics and moral theory
Welfare Economics: 4 public interest rationales:
(1) Natural monopoly- to prevent the exploitation of those w/monopoly power from charging excessive prices
(2) Public goods- w/o gov subsidies or inducements, the market will underproduce certain goods or services whose enjoyment cannot easily be restricted to those who pay for them (like police, fire dept., or parks)
(3) External effects- w/o gov reg, public “bads” (ex: water and air pollution) will be overproduced
(4) Asymmetric info- gov reg provides similar across the board reg for industries whose quality, safety, or cost is difficult for consumers to evaluate (health care and pharma comps)
Moral Theory:
Based on principles of human dignity, autonomy, and equality to justify gov programs based on race, gender, or sexual identity
2. Public Choice Theory: it is the outcome of a struggle from self-serving legislators and factions, interest groups, and powerful individuals that compete for legislative benefits.
Goal: focuses on the way in which individual preferences will be aggregated and expressed through public decision-making processes, rather than how social welfare will be advanced
Ex: future voters, opportunities/costs of political participation, think of leverage
Hierarchy of Authority
Types of Administrative Agencies:
Cabinet Departments: executive agencies. Dept. of Agriculture, Dept. of Commerce.
Agencies w/i departments: FDA, SSA.
Independent Regulatory Agencies: agencies not subject to direct presidential controls. SEC, FTC.
Quasi Independent Agencies: executive agencies not located w/i any department, i.e., EPA.
Constitution
Constitutional Authority for Agencies
U.S. Const. Art. 1, Sect. 8: regulate Commerce w/ foreign Nations, among several States, w/ Indian Tribes. To make Laws which shall be necessary and proper for carrying into Execution the foregoing Powers. . .
U.S. Const. Art. 2, Sect. 1 & 3: The executive Power shall be vested in a President of the US who and. . . [The President] shall take Care that the Laws be faithfully executed . . . .
Constitutional Constraints on Agency Action
Must fall within executive power to execute (Separation of powers)
Must not exceed substantive power granted by legislature (or Constitution)
Must not violate due process or procedures specified by legislature in enabling act or APA
Statutes: the Legislature enacts statutes that must be consistent w/ the Constitution. Congress must also have the power to legislate in the specific area (otherwise not a valid delegation of power).
APA: default, not a maximum
Informal Rulemaking: § 553
Formal Rulemaking (OTR) “On The Record”: §§ 556-557 may apply. See § 553(c)
Enabling Act: Congress can require more procedure here (this is the statute that they enact)
Rules: an agency draws its substantive and procedural power to promulgate rules from the enabling act that creates it. The rules can not extend beyond the authority of the statute. Must ask if the rules actually provide the authority and has the agency acted pursuant to the rule.
Note: To raise challenges, look at the rules, statutes, enabling act, generic administrative statutes (APA)
Two Forms of Action
Rulemaking – rules are requirements of general applicability and are usually prospective in application
“Rules” may also be called “regulations”
Rules are “adopted” or “promulgated”
Adjudication – involves the application of a law or rule to a specific set of facts. Adjudication is the agency process for issuing an order which resolves particular rights or duties. The present treatment deals with federal administrative law and with fundamental elements, as specified by constitutional due process and by the APA. It involves case-by-case determination of rights and duties
Legislative Control of Administrative Agencies
-The Brig Aurora— – Where the delegation of power is contingent solely on a finding of facts, where the statue specified both the act to be performed and the condition for its performance.
— F: Congress’s delegation to the President of authority to lift an embargo on Euro trade when he found that subject of the embargo stopped violating the neutral commerce clause.
— Rule: If the power to make a decision that is delegated is contingent on a finding of fact, then it is permissible execution of the law.
* Justification: The President is merely filling in the details for Congress, which gave enough guidance to the President to execute the law.
Field v. Clark – Court upheld the delegation of power because it reasoned that the power delegated was not legislative because it was rooted in finding facts to effectuate congressional will. Congress cannot delegate legislative power.
—J.W. Hampton v. U.S.— – Rule: Need for expertise; first articulated “intelligible principle” test/doctrine.
— F: Challenge to Congress’s delegation of authority to the President to alter tariffs when he found that statutorily established tariffs did not equalize the costs of production between the U.S. and competing foreign countries.
— Authority does not have to be contingent up on a finding of fact as long as Congress formulates an “intelligible principle” that guides the enforcement of the law.
— Congress doesn't have the expertise necessary to come up with exacting guidelines.
* President is allowed some discretion or judgment.
— But there has to be some guidance!
Intelligible Principle: standard from JW Hampton
Has Congress given the President something understandable to guide the decision of discretion?
Finding of facts is not necessary and discretion is given to the President
To bypass the delegation of power, Congress must provide, in the statute, sufficient standards an “intelligible principle” for admin agency (or other entity) to make regs
Language used:
“As public convenience, interest, or necessity requires”
The determination delegated seemed complex to defy legislator’s competence
New Deal Era and Strict Application of Nondelegation
