I. Chapter One: Introduction
A. Overview of the work and place of admin agencies in our system of government
1. Four major topics in admin law
§ 1. Procedural requirements for agency adjudications.
§ 2. Procedural requirements for agency rulemaking
§ 3. How admin agencies fit into the constitutional SOP
· admin agencies are established by legislative branch. Congress passes an enabling statute and they formulate an admin agency; and often under purview of executive branch. They want to establish an admin agency in order to find a way to not do their job because non-partisan and expertise that’s required in making the law.
§ 4. Judicial review of agency decisions/actions
· when, if ever, do courts defer to their decisions? Many scholars, judges, etc. will say it’s wise to defer to agency because they’re the experts.
· Often times when an agency acts, there will be a point often late in the process at which parties that are acting before the agency can get judicial review.
§ Note: a key distinction that arises at the beginning of the course is the distinction b/w agency adjudications and agency rulemaking.
· When an agency acts more like a court, it is engaging in an adjudication.
o Understanding Series: [What the process looks like.] Where the agency is adjudicating a matter, the agency uses a process that is very much like a civil bench trial in court. These proceedings, while subject to some variation depending on precise agency and matter adjudicated, typically permit a direct and cross exam, testimony under oath, development of record, and the presence of a neutral presiding officer, sometimes referred to as an ALJ. If FRE applies depends on the agency; most don’t. Civ Pro also usually doesn’t apply. Juries are unheard of. Elaborate pre- and post-trial motions are rare. One party (typically) affected.
o What are the procedures that are going to apply in that instance?
o Londoner – adjudication.
· If the agency is acting like a legislature, it is engaging in rulemaking.
o More than one party is being affected – all parties that are subject to the rule. They have to follow procedures to make these rules
o Understanding Series: when an agency exercises legislative functions, the procedures normally used are relatively simple: notice and comment rule making = agency proposes rule, notice period where people can comment, and then they promulgate a final rule.
o Bi-Metallic Investment Co. – rulemaking
2. Some Fundamental Principles of Administrative Law:
§ 1. Under our constitutional system, agencies are creatures of the legislature. They do not spring up on their own. Congress creates them. So, the legislature must enact a statute creating the agency. [agencies aren’t created in a vacuum.]
· This statute is called an agency’s organic act or enabling act.
· This statute is the fundamental source of the agency’s power. Congress is delegating that lawmaking power to an administrative agency. In short, the legislature creates agencies and sets limits on their authority.
o This could be seen as controversial because some powers are non-delegable: when is the legislature basically giving up all of its authority?
§ 2. Congress often delegates broad power to federal administrative agencies. This is because Congress often has confidence in the federal agencies that it creates. Thought that people who work for admin agencies have some sort of expertise in the field they’re working in. [relationship between Congress and administrative agencies] [congress trusts them.]
§ 3. Courts have a relatively limited rule in supervising agency conduct. [relationship between courts and administrative agencies] Courts won’t strictly scrutinize agency actions.
· Today, federal courts are required to take what amounts to a “hands off” attitude toward federal administrative agencies.
· The U.S. Supreme Court has been hammering this message home to the lower federal courts for years.
· ALJs and attorneys operating in front of administrative agency – a lot more finality. You better win at the lower level!
3. Some Introductory Themes in Admin Law:
§ 1. Why do we need administrative agencies?
· Thought that admin agencies have expertise on particular matters.
· This Enabling Act will often tell you why we have an administrative agency. The mission will often be explained in the early portions of the statute, or at the very least, you can figure it out through legislative history.
· 1. There are economic justifications.
o Admin agencies can address problems associated monopoly power (or segments of the economy that have a limited number of actors). There is a risk that industries operating with limited actors can do what they want without a check on that—there’s a risk of abuse there. They can do so in a much more nimble way than Congress can, arguably.
o Admin agencies can address problems associated with externalities – unintended consequences – secondary effect of your operation, ex. air pollution. Society pays the cost. Company might not install air filter because it’s not economically efficient to them, but Congress establishes EPA, which passes rules, making the company do it.
o Admin agencies can compensate for inadequate information. Compensating for inadequate information is a justification for a great deal of consumer protection – laypersons do not have the abilities to analyze certain things, such as the flammability of children’s sleepwear. They promulgate a rule and not an adjudication because the rule helps more people at once.
o Admin agencies can compensate for unequal bargaining power. Often, consumers are not in an equal position to bargain with certain industries, like banks.
· 2. There are political justifications.
o Admin agencies are politically accountable.
o Admin agencies derive their political accountable from:
§ The actions of the legislature (in establishing and monitoring the agency) and
§ The executive branch (through the appointment power)
o This political accountability helps insure that the agencies function in the public interest, rather than in the interest of narrow single-issue groups.
o To be sure, there is a lot of debate as to whether agencies really represent the public interest. Nevertheless, the notion of political accountability lies at the heart of the theory of the administrative law.
§ 2. How have courts and agencies interacted historically?
· The Supreme Court’s attitude toward agency lawmaking has changed over time
· ICC v. Cincinnati Railway (1897): The S. Ct. refused to infer that Congress delegated lawmaking power to an administrative agency. The delegation of power has to be express in the statute.
o [Facts, p. 3/ Note 2, Page 3/ Note 11]
Narrower to broader
Note 2: The attitude of the Supreme Court toward the scope of authority granted to the ICC by Congress is narrow.
· NBC v. United States (1943): The S. Ct. concluded that the administrative agency power to regulate was implicit given the purposes of the statutory scheme.
o So, you get a court willing to read an implicit delegation of power to Congress to the agency.
· United States v. Southwestern Cable (1968): The S. Ct. indicated that it will interpret a statute to provide agency power to accomplish statutory purposes, unless Congress specifically withholds the power.
o Page 15 – “We have elsewhere held that we may not, ‘in the absence of compelling evidence that such was Congress’ intention . . . prohibit administrative action imperative for the achievement of an agency’s ultimate purposes.’”
o This approach is essentially the opposite of the approach that the Court took in Cincinnati Railway. How so?
§ Cincinnati Railway: The Court indicated that statutory silence withholds agency power.
§ Southwestern Cable: The Court indicated that statutory silence grants agency power.
o Ultimately, Southwestern Cable is thought of as the pinnacle of administrative power in the United States.
· 2. The number of affected parties was much different. Many more people were affected in the Bi-Metallic case (i.e., all Denver property owners) than in the Londoner case (a few individuals). [this was pretty big.]
· 3. The nature of the issues being resolved in the two cases different significantly. Londoner involved very individualized determinations of a specific valuation of particular plots of land. Bi-Metallic involved the much more general issue about the need to increase valuations across-the-board. [This was a pretty big factor too.]
§ In light of these differences, Justice Holmes concluded that no process was due (there was no right to an oral hearing.)
5. These cases give us a sense of how to distinguish b/w adjudications and rulemaking.
6. Important Distinction: Therefore, ultimately:
§ Londoner becomes the rule for adjudications (or court-like decisions) and
§ Bi-Metallic becomes the rule for rulemaking (or legislative-like decisions).
7. If an agency is acting by way of an adjudication, an individual can rely on the minimum requirements of the Constitution’s due process clause as a procedural guarantee (in addition to any statutory and regulatory procedural requirements).
8. However, if an agency is acting by way of rulemaking—in an across-the-board way that affects large number of people—the only procedural protections available are those defined by the statute or regulation. In this context, an individual cannot rely on the CN to provide procedural due process protections.
9. Theory applied problem on page 24:
§ May 2010, TSA adopted new regs. that established comprehensive passenger screening program for commercial airline passengers in the U.S. . . .
· This new program is rulemaking (Bi-Metallic). The nature of the interests affected: security screening in airports. The number of parties affected: every commercial flyer. Nature of the issues being resolved: general institution—all y’all! (if everybody who is affected wanted to protest, how many people would show up?) à Thus, this is rulemaking. The TSA’s decisions to come up with red light/green light, they do that by promulgating a rule. This class is about procedural requirements when they promulgate a rule.
§ On 8/1/12, the TSA stops Fred Mertz from proceeding beyond the checkpoint because he was flagged as “red light” in 2010. He missed his flight.
· This is as-applied. This is an adjudication based on that rule. His case, whether or not he is a red light or a green light, him complaining is an adjudication. The number of parties affected here is one—it’s Mr. Mertz’s case. The nature of the issue is his individual history, etc. – adjudicated on its own merits. However, the decision to implement red light/green light does not automatically become an adjudication. It only becomes an adjudication when you take it and apply it to a specific person’s case.
II. Chapter Two: Agency Adjudications
Þ Two main types of agency actions [Flowchart]
Þ Four Sources of Procedural Requirements for Agency Adjudications
1. The Constitution’s Due Process Clause
a. The CN provides a floor
2. Administrative procedural requirements for agency adjudications (Administrative Procedure Act, APA)
3. Procedural requirements established by organic statutes
4. Agency regulations