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Administrative Law
University of Illinois School of Law
Mathews, Jud

Admin Law Outline | Fall 2012 | Prof. Jud Mathews

Course Outline

I. Introduction

A. Londoner and Bimetallic

i. Londoner v. Denver

· Brief Fact Summary. The plaintiffs challenged a tax which was assessed against their real property by the city council over plaintiffs’ written objections, without affording them a hearing.

· Synopsis of Rule of Law. Due process of law as guaranteed by the Fourteenth Amendment to the Constitution of the United States requires that, where the legislature of a State authorizes a subordinate body to levy taxes, the taxpayer shall have an opportunity to be heard before the tax becomes irrevocably fixed. The taxpayer must have notice, either personal, by publication, or by a law fixing the time and place of the hearing.

· Held. The assessment was void, as plaintiffs were not allowed an opportunity to be heard and therefore denied due process of law. The hearing requirement was not met by plaintiffs’ submission of their brief; due process required that they have the opportunity to support their allegations by argument and, if necessary, by proof. A hearing was denied to plaintiffs in error.

Bimetallic v. Colorado

· Brief Fact Summary. Bi-Metallic Co., the Plaintiff, challenged a uniform forty percent tax increase on the ground that it was not afforded an opportunity to be heard.

· Synopsis of Rule of Law. Individuals do not have standing merely as members of the public at large or the general taxpayer population to challenge government action or imposition of taxes.

· Held. “Where a rule of conduct applies to more than a few people it is impracticable that everyone should have a direct voice in its adoption. The Constitution does not require all public acts to be done in a town meeting or an assembly of the whole.”

· Comparison

Cases

Delegation

Individual property rights

Hearing

DP violation

Londoner

Y

Y

N

Y

Bi-metallic

Y

Y

N

N

· In assessment

· An individual determination is being made (Londoner) as opposed to a general rule-setting about policy (Bi-metallic)

· When agency is acting like a court in making decisions, requires DP

· The difference

· Number of people/interests involved

§ Not practical to give everyone a hearing

· Focus on the nature of determination by the administrative body

§ In Bi-metallic, a general, policy determination is being made

· Legislative procedure is sufficient to satisfy due process

§ In Londoner, the determination is individualized in assessing the value of someone’s property

· Mr. Londoner has interest that is distinct from his neighbors

· He may have direct information/evidence regarding his particular situation and should be allowed to bring it forward in the form of a hearing

· Ultimately: General determination vs individualized determination

· Why regulate? An overview of the administrative state.

· Agency (5 USC § 551)

· Any government authority that, whether or not is within or subject to review by another agency, is not Congress or the courts of US

· Produce the great majority of norms that regulate the conduct of country

Agencies do business in two ways

· Rule-making = agencies acting like legislatures, setting policy, rules, regulations

· Adjudication = agencies acting like courts, making individualized determinations, deciding cases

iii. Administrative Procedure Act (APA)

· The APA, passed in 1946, provides the basic statutory framework for administrative law.

· APA sets out procedures that agencies must follow, and provides for judicial review.

· It’s a residual statute: provisions can be overridden by agency-specific legislation.

iv. Theories of Administrative Agencies

· Public interest theory: explains administrative policymaking and structure of agencies based on the traditional notion that agencies act to further the public good and are structured to maximize their ability to further the public good. (response to a social problem/market failure)

i. Objective values and ends for human action

ii. Natural monopoly- supra-competitive prices or wasteful competition

1. Justification for regulation of public utilities and use of antitrust laws

iii. Public goods-market will under produce for services whose enjoyment cannot easily be restricted to those who pay for them

1. People will only pay if assurance other beneficiaries will do so as well

2. Police protection, parks, and communications (limiting the number of frequencies)

iv. External effects- public bads like air pollutions (adverse side effects of private activity) will be overproduced

1. Regulation of risks

v. Asymmetric information-consumers will find it too costly to acquire or evaluate information (quality of the goods or services) (ex. Calorie list for fast food)

1. Government should prohibit unfair or unethical business practices or license certain occupations and trades that affect health and safety

· Public choice/economic theory: explains regulation and the structure of agencies as products of the political process where parties with political power enlist government coercion to achieve individual preferences and goals that they could not achieve in a free market. Agency structure as maximizing ability of parties with power to influence government action. (outcome of a struggle among self-serving legislator and the factions, interest groups, and powerful individuals who compete for legislative prizes)

i. All substantive values or ends are regarded as strictly private and subjective

ii. Legislative intercourse is self-interested (no public or social interest)

iii. Agency may be susceptible to influence

· Administrative Law and the Constitution

i. Agencies and the legislative power

· Non-Delegation Doctrine (Article I of US Constitution)

· The doctrine holds that, under Article I of the Constitution, Congress cannot delegate its powers to anyone else. The Doctrine stems from the concept of Separation of Powers, which means that each branch of the government is confined to exercising those powers within its sphere.

§ Article I, §1: “All legislative powers shall be vested in a Congress of the United States”

§ Article I, §8: “Congress shall have the power to make all laws that are necessary and proper.”

· Reasoning of wanting to delegate power

§ There are issues that Congress isn’t expert in and it wants to give those with the knowledge and time and experience some power to make decisions regarding legislation.

· The Intelligible Principle Test

o Congress must lay down by legislation an intelligible principle to which the person or body authorized to exercise the authority is directed to conform; such is not a forbidden delegation of power.

· What to look for

o Intelligible principle

o Scope of power

o Specificity of the goal/mission

Cases

Whitman v. American Trucking Associations Inc

o Brief Fact Summary. The Environmental Protection Agency (EPA) revised ozone air quality standards.

o Synopsis of Rule of Law. “When conferring decision-making authority upon agencies, Congress must lay down an intelligible principle to which the person or body authorized to act is directed to conform.”

o Key points

Intelligible is not the same as determinative

Does not mean Congress has to give correct answer

Just need to understand what it means, even if we don’t agree

Intelligible principle is low threshold to clear

Non-delegation doctrine, the intelligible principle does not do all the work

When scope of power is narrow, courts are generous to Congress to have broad guidance to provide to agency

annot grant to an officer under its control what it does not possess.”

Rule: when congress elects to exercise its legislative power, it may not authorize a lesser representative of legislative branch to act on its behalf i.e. executive power

· Separation of powers violation

§ Morrison v. Olson

· Background

Independent Council created by statute

· Special Prosecutor has investigative powers

Two questions:

· Hiring (is officer principal or inferior?)

· Is it constitutional to fire?

· Majority does not look at nature of power exercised

o Takes a functional look rather than a formalist look

o The Constitution requires that the President have the power to fire officers of the United States if restrictions on the President’s power to fire would impede his ability to perform his constitutional duty.

· In present case, SC thought officer was inferior: subordinate to AG, limited function, and limited term

· While it is clear that an IC functions with a very high level of independence, the Court has suggested that this fact (by itself) is insufficient to make her an “officer” of the United States. Id.

· On the contrary, an IC is regarded as an “inferior officer” in part because she is removable by higher-level Executive Branch officials (in this case, the Attorney General of the United States). Id.

· Moreover, the Court suggested that an IC exercises limited authority in the sense that she does not set agency policy, but instead is restricted primarily to investigating and, if appropriate, prosecuting certain federal crimes

o Rule: congress may vest courts with the power to appoint executive officers, where such appointments do not usurp the powers of the executive branch

· Note:

o Edmonds adopts Scalia test for determining who is an inferior officer

Majority (functional approach)

Dissent (formalist approach-categorical)

Inferior officer

Yes; various reasons

No; no boss

Removal restriction ok?

Yes; —

No; executive power is being used (nature of power being exercised)

§ Free Enterprise Fund v. Public Company Accounting

· President —> SEC —> PCAOB

· Can only remove for cause

o Both scenarios

· Double insulation structure

· Majority

o Diffusion of accountability with double insulation

o Worried that president’s power to remove is contingent on someone else’s finding

o Double insulation unconstitutional

· Contravened Constitution’s separation of powers; the President could not “take Care that the Laws be faithfully executed” within meaning of Article II if he could not oversee faithfulness of officers who executed them.

· Summary: When will removal restriction be found to impede President’s ability to perform constitutional duty

§ Functional approach

When office is performing executive function (Myers)

When Congress retains power to fire (Bowsher)

When more than one set of for-cause removal (PCAOB)