A. Overview of the Work and Place of Administrative Agencies in Our System of Government
a. ICC (Interstate Commerce Commission) v. Cincinnati, US 1897
· Facts: Looking at ICC to determine what powers Congress has given to this commission in respect to the fixing RR rates. Commission argues that the power to pass on the reasonableness of existing rates implied a right to prescribe rates and that in passing the Act, Congress intended for ICC to determine what were just and reasonable rates for the future.
· Held: Congress has not conferred upon the commission the legislative power of prescribing rates, since no express power. [deciding whether rates that have been charged and collected are reasonable is a judicial act; prescribing rates in future is a legislative act] · According to the Court, what is the basic distinction between legislative and judicial power?
o Legislative power looks prospective (future). Judicial power is retrospective. (agencies have both powers at different times.)
o Is this a valid distinction? Injunction is a prospective act for the judicial power. Likewise, legislative power can act retrospectively—reparations to the Japanese.
o So dangerous to assume this distinction.
· Should railroad rates be regulated, and why?
o The ICC was first major modern federal agency that dealt with economic issues.
o The Pennsylvania RR could distinguish b/t short hauls and long hauls, popular destinations and not, ect. Why is it wrong for RR barons to exercise this power? There was a feeling that the RR, b/c they were operating in roots of transportation, they were thought of as a common carrier, subject to other things like making sure rates were reasonable. Public invested resources in RR.
· According to the Court, what are Congress’s three options in regulating RR rates, and what is the default option?
o Regulate themselves (complicated and don’t want to),
o Pass it to a subordinate tribunal like the ICC, OR
o Leave it to companies to regulate subject to regulations and restrictions (judicial oversight system)
§ In absence of legislative evidence to the contrary we are going to assume judicial oversight is the rule.
§ Over time, the court has become increasingly willing to infer agency power—not require express power. Agencies given authority to do more of what they please.
· Did federal regulation result in a robust domestic rail industry?
o Federal regulation has strangles a once robust domestic rail system, so don’t assume federal regulation achieves desired result.
b. Pennsylvania v. West Virginia, US 1923
· Facts: The majority invalidated a W.Va. statute that restricted the ability of pipeline companies to sell natural gas produced in the state to consumers out of the state. We only read Brandeis’ dissent which said court should decline to decide case. Influential dissent.
· Why does Justice Brandeis see the Court as institutionally incompetent to delve into regulation of natural gas?
· Expertise, market, production and monitoring/overseeing problems.
· Believes the questions of delving into market, how much production in each state, is demand evolving and the fact that these factors are always changing leaves him to believe the court does not have the expertise to answer the question.
· Problem: the question of whether or not it is constitutional for states to regulate shouldn’t have to do with whether court can regulate.
· Can legislatures perform the types of tasks that Brandeis identifies?
· It would call for intensive use of resources—difficult challenge.
· What would Brandeis say are the types of “public policy questions” that lend themselves to administrative determination?
· We ruled out courts and legislature leaving the default with agencies. Why an agency though? Assumption of expertise.
· Brandeis is going to delegate to agencies issues of complexity and fast-moving—where we need an expert.
c. National Broadcasting Co. v. United States, US 1943
· Facts: Reviewing the legality of the Chain Broadcasting Regulations that had been adopted by the Federal Communications Commission. The national networks challenge the regulations as beyond the power of the FCC.
· Held: FCC had the power to promulgate the regulations to correct abuses disclosed by its investigation of chain broadcasting.
· Why did Congress regulate radio broadcasting?
o 2 main problems: Scarcity in bandwidth and highly competitive. Too many people results in interference and degrades overall quality. Eventually we get the FCC out of this.
· Was the FCC necessary to Congress’s plan? Were there alternatives?
o If you are going to have a licensing system, you need a licensing agency. In Europe, the solution was to take it over at government level and so only a few channels.
· Justice Frankfurter suggests (p. 7) that the FCC is similar to a traffic cop, then he rejects that analogy as a basis for limiting the FCC’s power (p. 8). Is the analogy valid? Was he correct to reject it?
o Best analogy he says is traffic cops. However, If Congress meant it to be a traffic cop game—“The criterion governing the exercise of the Commission’s licensing power is the ‘public interest, convenience, or necessity.’” (p. 8, quoting 47 U.S.C. § 307)
o So Congress had something more broad in mind. Large grant of authority.
l Does the Court’s decision in the NBC case suggest a shift in view from the era of Cincinnati RR?
o The court here takes a more generous view. “authority to make special regulation applicable to radio stations engaged in chain broadcasting.”
o More of a monopoly question than a scarcity question.
d. United States v. Southwestern Cable Co, US 1968
· Facts: Claim that the FCC lacked statutory authority to regulate cable. There was nothing in the statute about cable.
· Held: FCC can regulate cable industry since it goes with agency’s purpose and no evidence that Congress prohibited it.
· How does the authority exercised by the FCC in Southwestern Cable differ from the authority exercised in NBC?
o You could say Southwestern represents farthest step from Cincinnati. Here the court is willing to infer power to regulate from the fact Congress never wrote anything to prevent it and statute was broad.
· Is the “public interest” problem still one of excess demand and scarce bandwidth?
o Issue now is the fear that with the advent of cable, local markets will drop out altogether. World where people are being driven out of the market unlike before where everybody wanted in.
e. FDA v. Brown & Williamson Tobacco Corp, US 2000
· Facts: After previously disavowing authority to do so, the FDA asserted jurisdiction to regulate tobacco products. Concluded nicotine was a drug within the meaning of the FDCA (act) and promulgated regulations intended to reduce tobacco consumption by kids.
· Held: FDA does not have the power to regulate tobacco use.
· Is the court still in the NBC/Southwestern Broadcasting mode or has it returned to the Cincinnati RR approach by requiring express delegation of authority?
o This is narrower than the
g right. Implication is that if you are the CO legislature you wouldn’t have to hold a hearing. (the other way would be procedurally a nightmare).
o What if legislature only affects one person (thing), like Walmart?
o Due process doesn’t apply to legislature the court says, period. They just cut it off—don’t get into it. Interesting b/c this is the only case where the Supreme Court suggests this. You have no due process rights against the legislature.
· Does it matter that there is no judicial review of the Board of Equalization’s (the city council) decision? Why?
o Under CO, you had no right to judicial review. If there had been judicial review the court might have said that would have been sufficient due process—you had your hearing.
o To what extent does the hearing have to be a pre-deprivation hearing, i.e. before decision is final or can it be heard later? Possible that judicial review would have satisfied hearing right b/c these people never had ability to challenge application of assessments.
c. Bi-Metallic Investment Co. v. State Board of Equalization, US 1915
· Facts: Suit to enjoin the State Board of Equalization and the Colorado Tax Commission from putting in force an order increasing the valuation of all taxable property in Denver 40%.
· Held: Valuation allowed without hearing. (Here a large number of people are affected)
· Does Bi-Metallic adopt or reject Londoner’s “political delegation” theory?
o Doesn’t say anything about it. Articulates a different theory that has nothing to do with political delegation.
· Would Londoner come out differently under the Bi-Metallic theory? Is it just a question of big and small?
o In Londoner you were dealing with application of a set of rules and here Holmes wants to say that in Bi-Matallic you are dealing with the creation/adoption/passage of rule. Still a question of individualized application so delegation drops out altogether in his argument. Delegation in Londoner means due process requirement.
· What if the state legislature had made these decisions instead of a state agency?
o Opens the question of whether there is a due process right against everyone in government, while Londoner shut that off.
· Londoner after Bi-Metallic came out quite differently:
o Homes doesn’t take up political delegation theory that said b/c power delegated to board there was a due process right. Flip side being if no delegation, no due process right.
o Bi-Metallic said application to small number of individuals you have a due process right vs. adoption.
o Londoner’s facts would still come out the same under its facts.
o Implication that legislature might get caught under due process clause if application, but Holmes doesn’t take up that issue.
Not much more case law concerning extent due process clause applied to legislative activity. Basic world now is if there has