Introduction
Overview of the Work and Place of Administrative Agencies in Our System of Government
Complex issues and the need for agencies
Pennsylvania v. West Virginia (1923) [3] – the Court was asked to resolve the distribution of natural gas among the states bordering WV (since WV had been engaging in price discrimination to benefit its own citizens). The majority attempted to resolve the issue but Justice Brandeis, in dissent, pointed out that such complex issues such as delegating scarce resources among the states required the expertise of an administrative agency.
Implied Powers
Generally
Implying “up” – an administrative agency cannot imply powers not explicitly granted to it by Congress – ICC v. Cincinnati Railway(1897) [1] – congressional law creating ICC stated, among other things, that railroad rates must be reasonable. Administrative agency was denied the right to interpret this as a grant of power to set rates themselves when the power to set rates was not explicitly granted to them in the statute.
Implying “down” – lesser powers, however, can be implied from broader grants of power.
Broad Grants of Power
General rule – certain powers, even if they had not been historically exercised, may be found in a broad grant of power to an administrative agency.
a) Grant of power to act in the “public interest”
1) NBC v. U.S. (1943) [6] – the Court found that the FCC had the power to promulgate regulations to limit the “abuses” contained in the practice of chain broadcasting (particularly the drowning out of local broadcasters by major companies). NBC claimed that the FCC had to grant a license to any company that qualified for one. Not so, replied the Court.The FCC had been charged broadly with allocating the electromagnetic spectrum in furtherance of “public interest, convenience, or necessity.”They had read and Congress had approved their reading of this grant as a mandate to maintain democratic use of the airwaves and reserve space for local communities.
b) New technologies arising under broad power grants
1) U.S. v. Southwestern Cable Co. (1968) [12] – the Court held that the FCC could regulate the use of CATV, a hybrid cable-antenna service, despite their having been given no specific authority to do so. The regulation was well within their broad grant of power to regulate “all interstate and foreign communication by wire or radio.”
· Exception – historical lack of power and Congressional preemption.
o An agency will not be allowed to subsequently claim a power where, despite a seemingly broad grant of power, (1) the agency had historically specifically declined to take up that power, and (2) Congress has subsequently instituted laws inconsistent with the agency’s having such a power.
· FDA v. Brown & Williamson Tobacco (2000) [14] – the FDA was denied the ability to take into its purview the regulation of tobacco products, an industry they had historically disavowed power over and which Congress had subsequently regulated by statute. (This 5-4 O’Connor decision is, admittedly, a bit of a back-track from the agency power high-water mark in Southwestern Cable).
Adjudication and Rulemaking
Distinguishing “Adjudicative” from “Legislative” Rulemaking
“Adjudicative” Rulemaking
Londoner v. City and County of Denver (1908) [17] – (P) were landowners in Denver. The city assessed a special tax specifically upon them for the construction of public works that abutted their property. They were served with notice of the assessment but denied the opportunity to object and not allowed a hearing before the city council. Held – where the legislature of a state, instead of fixing a tax itself, commits to some subordinate body the duty of determining whether, in what amount, and upon whom it shall be levied, and of making its assessment and apportionment, due process requires that at some stage before the tax becomes irrevocably fixed, the taxpayer shall have an opportunity to be heard, of which he must have notice.
City council acted without notice or hearing. Court says an opportunity to submit written objections and complaints of tax to board is not enough. Something more is required by due process.
Thus, due process is required when the proceeding is functionally adjudication, as opposed to rulemaking. An administrative adjudication that deprives someone of liberty or property must provide due process.
“Legislative” Rulemaking
Bi-Metallic Investment Co. v. State Board of Equalization (1915) [22] – all property tax levels in Denver are raised by 40% by an administrative board. Held – individuals do not have a constitutional right to be heard concerning a matter in which all are equally concerned. The administrative body was carrying out a legislative duty here. Where such a decision applies to more than a few people, it is impracticable that everyone should be allowed a hearing upon it.
Resolution – ballot box.
Generic decision (rulemaking) vs. particularized decision (adjudication)
due process
Constitutional Right to a Hearing
The Constitution states that no person is to be deprived of life, liberty, or property without due process of law.
Due process analysis requires:
First, that there is a constitutionally protected interest within the meaning of the Due Process Clause.
Second, a determination that there has been a deprivation of that interest.
Third, a determination of what process is due in order to protect that interest.
Does Due Process Apply?
Yes, Due Process Triggered
Property Interest [52]
a) To have a property interest in a benefit, a person clearly must have more an abstract need or desire for it. He must have more than a unilateral expectation of it. He must instead have a legitimate claim of entitlement to it.
b) A person’s interest in a benefit is a property interest for due process purposes if there are rules or mutually explicit understandings that support the individual’s claim of entitlement to the benefit.
c) Perry v. Sindermann (see below)
Liberty Interest
a) Must have stigma + something else
1) Must have an alteration of status to trigger due process
b) Reputation is protected (no longer entirely good law) – where a person’s good name, reputation, honor, or integrity is at stake because of what the government is doing to him, notice and an opportunity to be heard are essential
1) Wisconsin v. Constantineau (1971) – police chief, without hearing, posts signs at all liquor stores stating that (P) cannot buy liquor for one year. Due process triggered and person is allowed to have an opportunity to refute charges against him.
2) Nat’l Council of
pposed to a recipient of, benefits – American Manufacturers Mutual Insurance Co. v. Sullivan (1999) [59].
How Much Process is Due?
Higher water mark for due process was expressed in Goldberg v. Kelly
In that case, welfare benefits cut off before individuals given opportunity to have a hearing. Instead, they were given post-termination hearings but court says that is not enough. Need pre-termination hearing.
Weighing/Balancing:
The extent to which procedural due process must be given to welfare recipient is influenced to extent by which he may suffer grievous loss and whether the recipients’ interest in avoiding that loss outweighs the governmental interest in summary adjudication.
Dissent – court is overstepping its bounds to legislate.
Dissent coming alive in the Mathews v. Eldridge majority decision.
Mathews Balancing – backing away from Goldberg
Mathews v. Eldridge (1976) [69] – (P) receives social security disability benefits. After administrative inquiry into his health, the benefits are cut off. Held that the process he received was adequate, even if it did not amount to a full trial.
Test to determine what process is due. Court will look to 3 factors:
a) First, one must consider the private interest that will be affected by the official action.
b) Second, one must consider the risk of an erroneous deprivation of that interest under the required procedures and the likely reduction of that risk by requiring more or different procedures.
c) Finally, one must consider the government’s interest in using the required procedures, as opposed to more or different procedures.
New principle – something less than a full evidentiary hearing will satisfy due process.
Subsequent Application of Matthews
Relevant Precedent prior to Loudermill
Arnett v. Kennedy – established “take bitter with sweet” theory. If a statute creates a property right (i.e., your job) and defines procedures for taking away that benefit, you have to take the bitter (i.e., possibility of summary termination) with the sweet (i.e., having the job).
a) Also established notion that source of property right (state/local law) able to specify how that right will be terminated and what will satisfy due process.
b) Person terminated from job without pre-termination hearing. Property interest in job was conditioned by procedural limitations that accompanied the interest.
Bishop v. Wood – notion of Supreme Court deferring to federal district court’s interpretation about state law not creating a property interest and you have to take the bitter with the sweet.
a) Court rejects “bitter with sweet” in this case.
