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Administrative Law
University of Kansas School of Law
Levy, Richard E.

I. Introduction to Administrative Law
A. Agency
1. §551: Agency means each authority of the US Gov. but does not include :
a. Congress, Federal Courts, Governments of territories or possession of the US, Government of D.C.; Military authority
b. Basically Agency is any part of the government other than Congress, President, Judiciary
2. Two Types of Agencies:
a. Executive Agencies: (FDA, IRS, FBI)
i. Subject to greater degree of presidential control
ii. Established as department or part of department
iii. Usually headed by a single person
iv. Head is removable at will of president
b. Independent Agencies (NLRB, SEC, FTC)
i. Subject to lesser degree of independent control
ii. Free standing
iii. Headed by board or commission comprised of representatives from both parties
iv. Board members/ commissioners serve for fixed term and are only removable for cause
v. Limits on party affiliation
3. What do Agencies do?
a. Execute the law by which they are established and given authority over
b. Regulate private conduct: regulatory agencies can include local governments
c. Administer Entitlement Programs: MediCare, Medicaid, Social Security
d. Everything Else: economic inefficiency and market failure
i. Agencies can require public disclosure to rectify market failure
ii. Deportation
iii. Passports
4. Why Agencies are Needed:

Justification

Defect

Harm

Agency

Inadequate information

Purchase wrong/ dangerous product

Loss of money, physical harm

FDA, FTC

Noncompetitive conditions

Monopoly

Price increases, quantity decreases

Utility regulations

Excessive competition

Unsafe conditions, inadequate supply

Transportation, agriculture

Unequal bargaining power

Low wages, poor working conditions

National Labor Relations Board

Spillover costs

Pollution, unsafe conditions

Safety, health

EPA, OSHA

Public goods

Free riders

Under production

Police, education, welfare

a. Often the market does not work the way it should; agencies ensure efficient allocation of resources
b. Non-economic justifications
i. Pursue values inconsistent w/ efficient allocation
ii. Equity and fairness (e.g., organ transplants)
iii. Redistribute wealth
iv. Altruism
5. Types of Agency Action
a. Rulemaking
i. Equivalent of legislative power; agencies promulgate general standards that control future conduct by regulated entities
ii. Power given to agency b/c legislature is neither equipped or inclined to make decisions
iii. Compare to Legislation
1. Agencies may issue rules only to extent authorized by their organic act
2. Agencies must issue rules in accordance with procedures spelled out by legislature (whether in organic statute (OS) or Administrative Procedure Act (APA))
3. Agency rules are subject to judicial review for compliance w/ substantive standards and procedural requirements in organic statute
b. Adjudication
i. Equivalent of judicial power; agencies apply law to facts and issue binding results
ii. Compare to power of Art. III courts
1. Agencies have limited juris; scope of power limited to area established by OS
2. Agency results subject to Judicial Review
c. Investigations
i. Equivalent of executive power
ii. Agencies have power to subpoena/compel testimony, can usually require regulated entities to generate information, can inspect facilities
iii. May be authorized to prosecute by bringing administrative proceedings in court (e.g., NLRB can declare unfair labor practices) (Administrative compliance proceedings)
iv. Can require regulated entities to generate and keep records
v. Some agencies have power to inspect facilities
vi. Can bring actions directly to the judiciary
6. Separation of Powers Issues:
a. Agency officials are not elected
b. Agency law judges don’t always have to satisfy Art. III requirements
c. May be free of presidential control
d. Agencies often perform multiple governmental functions
7. US Constitution doesn’t mention administrative agencies anywhere

Pro-Agency Position

Anti-Agency Position

Give close call of constality to agency

Views agencies as 4th head of gov.

Overlook minor noncompliance w/ procedures

Have own agendas: self-interest, not public

Defer to substantive agency decision

Tend to infringe on individual rights

Close call of constility agency structure as illegality

Require strict adherence to agency procedures

No satisfied by superfic review of substantive decisions

B. A Walk Through the Administrative Procedures Act: the APA
1. Primary statue that governs federal administrative law
2. Background:
a. APA adopted in 1946 as a compromise b/w opponents and proponents of regulation
b. Opponents of agencies won on adjudication, proponents of agencies won on rulemaking
c. APA provides general requirements that may be superseded/supplemented by agency’s OS
d. Agencies may be subject to addition procedures due to constitutional provisions
e. Residual common law doctrines also come back at times and supplement the APA

Type of Agency Action

When does APA Apply

Formal or Informal

Applicable Procedures

Rulemaking

Section 553 applies unless there is involved:
(1): a military or foreign affairs function of the US or
(2) a matter relating to agency management or personnel or to public property. §553(a)

Formal procedures are required when “rules are required by statute to be made on the record after opportunity for an agency hearing. §553(c)

Formal:
§§ 553(b), 556, 557

Informal: §553(b)—(d)

Hybrid:
Check the OS

Adjudication

Section 554 applies in every case of adjudication “required by statute to be determined on the record after opportunity for an agency hearing,” with six exceptions. §554(a)

al decision making authority to agency in manner other than by an express declaration
3. Can only seek judicial review on a final action and after exhausting any administrative remedies
4. Must be ripe
5. Must have standing: constitutional requirements and potentially statutory requirements
a. Person suffering legal wrong b/c of agency action or adversely affected or aggrieved by action
b. Zone of interest
C. Administrative Law Practice:
1. Meeting w/ an Agency Attorney
a. APA prohibits ex parte communications b/w the two, but the proceeding hasn’t actually begun, so APA likely does not apply
b. Ensure that client is not violating any regulations to avoid sanctions
c. Quick resolution w/o going to court, try to get decision in writing, could provide a reliance defense, similar to estoppel, unlikely to work against government. Yet, in assessing penalties, cts look @ good faith
d. Disadvantages of meeting w/ agency attorney—don’t want to divulge information that agency would use
2. Effects of Internal Memo
a. Probably should not ignore. It’s agency position though may not be a published rule §551(4) & (5)—is it a statement of future effect designed to implement, interpret, or prescribe law… thus it is a rule and thus it is rulemaking.
b. Procedure requirement that apply to rulemaking depend upon whether or not it should be on the record after chance for hearings
c. Also §552, which is part of the freedom of information act requiring the public of substantive rules. This would seem to include the memo
3. Receiving a Letter from Agency Counsel
a. Is it rulemaking? No clear definition, but letter is likely an agency statement.
b. Will it have future effect? Rules are typically limited to general statements.
c. Is it adjudication? If so, consider whether adjudication procedures apply.
d. Is the letter a final disposition? Depends on phrasings w/in the letter.
e. Options: sue in the court, but first look for internal administrative appeals process.

II. Rulemaking
A. Rulemaking Initiation
1. Starting the Process:
a. Sources of proposed regulations
i. Legislation requiring certain regulations
ii. Staff recommendation upon identification of problem
iii. Political pressure
iv. Public pressure
v. §553(e): “Each agency shall give interest person right to petition for issuance amendment or repeal of rule”—can look confrontational
vi. §555(e): “Prompt notice shall be given of denial in whole/part of written app., petition, or request of interested person made in connection w/ agency proceeding” & notice shall be accompanied by a brief statement.
vii. Lobbyists
viii. Rulemaking petitions
2. Lobbying:
a. Bottom-up Approach
i. Start w/ staff members
ii. Convince agency that clients interest coincide w/ agency’s interests
iii. Skills to have:
1. Understand agency’s problem
2. Have a firm grip on legislative process
3. Be able to deal w/ political environment the agency finds itself in
4. Understand basic policy tools
b. Top-down Approach
i. Why pressure from politicians works
1. Congress appropriates money for agency
2. Congress holds oversight hearings
3. Congress can reduce power of agency
ii. Who to Approach
1. Various committees that supervise agency