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Administrative Law
University of Illinois School of Law
Rowell, Kristen Arden

Administrative Law – Arden Rowell (Spring 2014)
Agency Structure
What is an Agency?
·         A unit of government created by statute
o   Statutorily created and authorized (get their power from a statute by the legislature)
o   Presidentially created (kind of)
o   Many functions and subjects
·         How can we evaluate agencies?
o   Expertise (how skilled is the agency?)
o   Procedural fairness & substantive rationality (is the agency acting with reason rather than arbitrarily?)
o   Interest representation (whose interests is the agency actually representing?)
o   Efficiency
o   Efficacy
·         Two types of agencies
o   Executive
§  Run by a single administrator who is removable by the President at will
o   Independent
§  Run by multi-member commission and board, the members of which serve fixed and staggered terms, are sometimes subject to bipartisan requirements, and are removable by the President only for “good cause”
Are Agencies Constitutional?
·         Where are agencies in the Constitution?
o   Article 1 – legislative
o   Article 2 – executive
o   Article3 – judicial
o   ??? – agencies
o   There is no article of the Constitution devoted to agencies
§  Agency powers and constraints are almost exclusively extraconstitutional
o   Art. II, § 2, cl. 1
§  “The President . . . may require the opinion, in writing, of the principal officer in each of the executive Departments”
o   Art. II, § 2, cl. 2
§  “Congress may by law vest the appointment of such inferior officers, as they think proper, in the President alone, in the courts of law, or in the heads of departments.”
·         Myers v. United States
o   Statute made it so postmasters could be removed by the President only by and with the advice and consent of the Senate
o   Statute was found invalid. The President is allowed to fire the postmaster without restriction by Congress. The rationale is not quite clear, but even though it was an independent agency, the purpose of the office was viewed as purely executive and should therefore be left to complete Presidential control.
·         Humphrey’s Executor v. United States
o   Statute restricted the President’s power to remove the Commissioners of the FTC only for inefficiency, neglect of duty, or malfeasance in office.
o   Statute was upheld. Congress’ ability to condition the President’s power of removal depends on the character of the office. Congress is allowed to limit the power of removal when the agency is quasi-legislative or quasi-judicial.
·         Morrison v. Olson
o   Statute created the office of “independent counsel” to investigate certain government officials if the Attorney General believes there are grounds to investigate. The independent counsel is appointed by a special court and can only be removed for good cause by the Attorney General. The office expires when the investigation is complete.
o   Statute was upheld. Art. II of the Constitution gives Congress the power to vest appointments of inferior officers in the President, courts, or heads of departments. Independent counsel is an inferior officer since the officer can be removed by the Attorney General, has very limited duties, has limited jurisdiction, and has limited tenure.
o   Separation of Powers: the ultimate question as to whether Congress can limit the President’s power of removal is whether the removal restrictions are of such a nature that they impede the President’s ability to perform his constitutional duty to take care that the laws be faithfully executed. Furthermore, this is not a case where Congress has attempted to increase its own powers or judicial powers at the expense of the Executive Branch.
o   Scalia’s dissent
§  Unitary executive theory: all agencies outside of the President’s direct control (independent agencies) are unconstitutional.
·         Free Enterprise Fund v. Public Company Accounting Oversight Board
o   Congress created the Accounting Oversight Board and made it so that the commissioners of the board can only be removed by the commissioners of the SEC for good cause. The commissioners of the SEC, likewise, may only be removed by the President for good cause (Although this is not clear from the statute but is just something the Court assumes and bases its decision on). Therefore, there is a question of whether the limitation on the power of removal inhibits the President’s power in violation of the Constitution.
o   The court held that the limitation was unconstitutional. The extra layer of protection makes it so that the President has no direct line of control over the agency and cannot perform his duties as Executive in Chief. Since the SEC can only remove Board members for good cause, they do not have complete responsibility over the Board’s actions. Therefore, the President has no direct control over an agency that is ultimately responsible for the

Common Law & Regulation
What is the relationship between regulation and common law?
·         MacPherson v. Buick Motor Co.
o   D manufactures automobiles and sells them to dealers. P bought one from a dealer. The car had a defective wheel causing the car to crash. P sued D, the manufacturer.
o   The privity rule would hold that the manufacturer only had a duty to the immediate purchaser (the dealer). However, the dealer is not the one who is going to be driving the car, so under the privity rule, D has no incentive to make safer cars. Instead, the court held D has a duty to all foreseeable consumers and all foreseeable uses.
o   Under this rule, car manufacturers will inspect vehicles for defects so long as the cost of inspection is lower than the expected cost of damages
·         Rotche v. Buick Motor Co.
o   P purchased a car manufactured by D. The car crashed and P sued D for negligence. Before selling the vehicle, D had performed multiple inspections on the allegedly faulty brakes. Since P offered no proof that the brakes were faulty at the time of the accident, the court ruled in D’s favor.
o   This case demonstrates how tort law can shape behavior since after the MacPherson case D performed standard multi-point safety inspections to each car before it was sold. However, these cases also demonstrate the limitations of tort law.
·         Some limitations of tort law
o   Discretionary – tort law leaves significant discretion in the hands of private decisionmakers
o   Reactive rather than proactive (plaintiff) – tort law responds to an injury rather than preventing it
o   Retroactive instead of prospective (defendant) – tort law provides little to no notice of what constitutes unlawful conduct
o   Underinclusive – tort law does not regulate risk or accommodate nontraditional plaintiffs
o   Institutional competence – courts may have limited institutional competence to handle some kinds of societal problems