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Administrative Law
University of Mississippi School of Law
Hall, Matthew R.

Administrative Law
Hall – Spring 2006

Introduction
Federal Executive Branch
-cabinet agencies
-whitehouse.gov
-15 cabinet level depts.
-4 others that are afforded cabinet level status : OMB, EPA, USTR, ODCP
-very wide range of issues
-state level of agencies are even more widespread, higher number, more overlapping

By the numbers
-gov. employment and payroll in 2002
-federal 2.9 million civilian employees (1% of population, 5% of total labor force)
-state 18 million civilian employees (around 25% of labor force)
-employment and payroll by function in 2002
-judicial and legal-56,000 fed/418,000 state and local
-social insurance programs-65,000 fed/94,000 state and local
-public welfare-9,000 fed/529,000 state and local

So what is administrative law?
-law governing the creation, operation, and judicial review of the government
Bureaucracy

Categories of administrative law
-specific admin law
-agency’s enabling act-statute that created the agency, enables it to operate
-statutes the agency administers-ones the agency is in charge of
-court decisions interpreting these statutes
-law and policy motivating particular substantive area

Our focus (different form above)
-general admin law
-constitution-limits on organization and powers of agencies
-Administrative Procedures Act-APA
-statutes, regulations, and executive orders affecting all agencies
-court decisions interpreting the APA and/or constitution

What do agencies do?
-regulate
-issue regulations, same effect as statutes but inferior to statutes
-ex: EPA, OSHA, SEC, IRS
-enforce
-power to enforce the law
-ex: homeland security, IRS
-issue licenses and permits
-ex: NRC
-distribute benefits
-ex: SSA, VA, Homeland Security (visas, legal aliens), State
-set rates
-not as often now, applies mostly right after great depression
-set rates for railroads, airlines
-today, commonly-state insurance regulators
-manage property
-BLM, Park Service
-execute programs
-some agencies do not fall into the other above categories so they are more part of               this one
-ex: NASA, IRS

The 3 key areas of admin law
-structure of admin agencies
-how are they built, what powers may they be given, how are they controlled,                      where are they located (which branch?)
-function of admin agencies
-adjudication of cases
-promulgation of regulations
-challenges to admin action
-access, timing, scope, and standards

Independent Agencies
Question
-in the federal system, how many branches of gov do we have? 3
-could congress create agencies outside one of these 3 branches?
-what does that mean? Independent agencies
-may need to be politically independent from the executive
-if you want an agency to judge the executive, you need something                                       separate to give the best judgement
-may need to be separate from the judiciary-already have judges in judiciary                         making decisions, may want more of a public policy determination
-may need to be separate from congress/legislative too?
-want to be free from politics, accountability
-want best decision independent from worry about what constituents want
-question of what constituents want vs. what congressman knows is best

Independent agencies (some examples are below)
-federal communications commission
-securities and exchange commission
-federal trade commission
-national labor relations board
-nuclear regulatory commission
-federal reserve board
-federal energy regulatory board
-consumer products safety commission
-federal election commission

4 characteristics typical of an independent agency
-headed by multi-member group (as a short-cut, can look at if titled commission or board)
-members have staggered terms
-mix of political affiliations required-limit on simple majority of one party
-pres must look at affiliations of appointees
-members are removable for cause only
-as opposed to just at the whim of the pres

Why does it matter?
-even after the pres appoints one person, there are still the other members who have been
appointed by someone else who may not have the same political beliefs
-pres has less power than with other agencies/aspects of gov
-less presidential control over an independent agency than over an executive branch
agency
-also-if a person changes after appointed-pres cannot remove except for cause

Criticism
-headless fourth branch of gov
-may not actually be this serious-not very argued

-nevertheless-often when we say “executive branch” we use that term to include the so-
called independent agencies

The big question
-when is an independent agency unconstit?
-what powers may congress give to an indep agency without interfering with the                president’s authority

Ultimate questions
-Should we have another admin agency?
-more of a public policy question actually
-is the agency constit?
-what powers has the agency been given? And can congress grant these powers?
-in bird flu ex.: nothing controversial to allow executive to inoculate/regulate bc it  is typically the executive’s job to execute laws, legislative’s job is to make law
-potentially problematic to allow to promulgate regulations and conduct                               hearings

What are the big issues?
-delegation of legislative power or quasi-legislative power
-delegation of judicial power or quasi-judicial power
-sep or powers is the big deal

What are the big concerns?
-principles
-sep of powers-violation of the founders’ ideals
-limited gov
-effects
-executive branch has seen aggrandizement-has become overgrown
-executive branch is taking over some of congress’s power through encroachment
-congress is violating the constit by not doing its delegated job-abdication

Legislative power
-look at if given power is affecting rights of private citizens, argue it is/is not
-the power to enact binding rules that create duties, obligations, and liabilities, or confer
benefits
-most commonly-the power to promulgate regulations

Constitutionality
-the constit states that the legislature has “all legis power”=vestiture clause
-argued by textualist and formalist that this makes agencies impermissible
-delegation of legislative power is impermissible
-preference for bright-line rules

The pragmatists response
-do we really have separate powers?
-consequence of checks and balances
-necessary and proper clause
-constit is supposed to be functional document-Functionalism
-constit allows for a workable gov-Loving

But what about abdication?
-why would congress delegate?

-abdication-cynical interpretation
-avoid political ramifications, no-win situation
-avoid accountability
-delegation-charitable interpretation
-efficiency
-expertise/specialization
-laziness
-does not do away with accountability, executive is an accountable/political                         decision maker and so people have not been cut out of the equation

The non-delegation doctrine
-aka the Delegation Doctrine
-most things pass, less of a test and more of a justification
-congress may confer regulation making authority on an agency so long as the enabling
act contains an “intelligible principle” to guide the agency’s decision-making                   
-JW Hampton
-intelligible principle
-serves to guide, limit, restrict, cabined, demarcated the agency’s power
-courts are very generous
-does not have to be very precise
-ex: public convenience and necessity, unfair methods of trade/competition,                         protect health to the extent feasible, adequate margin of safety

Limitations
-scope of delegation
-sometimes court may require a more precise statement of intelligible principle
-if agency gets delegated lots of power
-SCt has regularly said that power to regulate national economy demands a more                precise principle (arguably only dicta)
-court does not/has not normally actually shoot down delegation bc of this
-delegation to private parties is impermissible
-no accountability
-Schecter (sick chicken case)
-Metropolitan WA Airports Authority
-delegation of power to create criminal liability permissible-with limits      
-aka enforcement authority
-Panama-no
-but Touby –placing drug on list of controlled substances-maybe
-delegation to judicial branch permissible-with limits
-Mistretta
-delegation of authority to limit fundamental rights impermissible
-Kent-authority to limit right to travel by restricting passports
-if Congress think that an interest is so important that a fundamental right should                be limited, congress should do it itself not give authority to another entity
-delegation of core powers impermissible
-aka non-delegable functions
-maybe raising revenues (tax measures)-National Cable Television Assoc.
-look at if fee vs tax-can argue either side

Wiggle Room
-potential ways to save an overly broad delegation
-interpretation by the court-Benzene seemed to say permissible
-reference to practice and custom-Fahey
-agency regulation limiting discretion-Yakus
-ALL above eliminated by Whitman
-congress can not be saved by anyone but itself

Full statement of test
-exercise of quasi-legislative power is valid if:
-authority is delegated by statute (ex: enabling act, organizing act)
-agency has limited/enumerated powers
-otherwise it is an ultra vires act
-the delegation contains an intelligible principle
-and delegation does not include
-involve core legislative power
-affect a fundamental right
-entail delegation to private party

Judicial Power
Judicial Power
-the power to adjudicate disputes involving individuals or small groups based upon
specific facts
-the power to conduct “due process proceedings”
-as opposed to legislative process which does not include right to due process

What are the concerns?
-protect independent judiciary
-sep. of powers, limited gov.
-safeguard individual litigants
-guarantee right to a “real” court

Why are Art III courts preferred?
-life tenure
-no diminishment in salary
-insulation from majoritarian/political pressure
-neutral decision-making
-more neutral than administrative courts?
-more courageous
-they can make unpopular decisions without worry/fear, as long as based on the law
-rules of procedure and evidence
-constitutional protections
-only federal courts can declare agency enabling acts unconstit
-power of judicial review

Alternatives to Article III Courts?
-Article I Courts-have been given judicial review, not administrative courts
-Tax Court
-Court of Appeals for the Armed Forces
-Federal Circuit (reviews IP claims)
-Federal Court of Claims
-Administrative Adjudication-part of the executive branch
-before an Administrative Law Judge (ALJ)

The Tests to determine if delegation of judicial power is acceptable
-Adjunct
-Public Rights
-Pragmatic

Adjunct Test/Theory
-administrative adjudication followed by judicial review parallels use of special masters
or magistrates
-problem-administrative courts have power than magistrates, etc. because Art. III courts
give more deference to administrative court decisions
-no longer used as an explanation

Public Rights Theory
-disputes between individual and gov.
-waiver of sovereign immunity
-historically decided by executive/legislative branch
-why did they collapse?
-there were many cases in which the case involved not only the people involved                   but the outcome of the claim also affected other people’s rights/private rights
-in administrative court disputes, many public disputes were implicating private                   rights
-no longer used

Pragmatic Approach-Schor
-public regulatory schemes often incorporate private rights
-current four factor test
-CFTC v. Schor  

Four factors of Pragmatic-Schor Approach
extent to which the essential attributes of judicial power are reserved to Art. III courts
-presence of judicial review, administrative court decision is not absolute
-are the Art. III courts still getting to do their normal functions
-more about encroachment
2.   extent to which the non-Art. III forum exercises powers normally vested only in    Art. III courts
-ex: jury trials typically only occur in Art. III, so if congress is giving an                                agency power to conduct jury trial, the delegation may be unconst.
-constitutional interpretation-normally reserved for Art. III
-is agency getting to do something it shouldn’t
-more about aggrandizement
3.   origins and importance of the right being adjudicated
-if you want something that is:
-new and typically given by an agency- prob ok to delegate
-new and regulatory-prob ok to delegate to agency
-traditional and common law-prob ok to delegate to agency
-constitutional-possibly not ok to delegate, depends
4.   concerns that drove congress to depart from the requirements of Art. III
-weird factor bc this factor will always help the gov., be won by congress
-look at:
-logic for the delegation
-efficiency
-connection to regulatory/administrative scheme
-role of expertise
-least important factor, will most likely not be dispositive

Limitations
-adjudication without a jury trial?
-acceptable unless violative of the 7th amendment
-right to jury trial at common law in 1789
-adjudication by private parties?
-compulsory private arbitration is allowed
-Thomas v. Union Carbide
-adjudication of criminal liability?
-criminal defs routinely plead guilty through plea bargains even in Art. III courts
-so if def. waives or consents to no jury, is it possible to judge by administrative                  court? Possible to argue
-civil sanction vs. criminal punishment
-ex: sex of

ation
-or if minimum constitutional procedure due process mandates a trial-like process

Alternatives to formal hearing
-intermediate hearing
-informal adjudication
-regulation

*adjudications are important for 2 reasons:
-there is a result-somebody wins and somebody loses
-adjudications in the administrative world parallel the common law process,                        create precedent

Adjudications parallel common law
-some adjudications merely resolve a matter and result in an order
-other adjudications resolve a matter, result in an order, and establish a new rule for
future decisions
-create a precedent
-analogous to common law

Procedure
Standard Hearing Procedures-Prehearing
-notice-sec 554(b), should contain:
-time place and nature
-legal authority, jd
-matters of fact and law asserted
-conferences: negotiated settlement/adr/narrow the issues down     
-sec 554 (c), 556(c)(6)
-discovery
-by government-sec 555(c)
-inspections, reports, investigations-as authorized
-for party-sec 555(d)
-agency subpoena available
-can get some info through Freedom of Info Act, public records
-depositions-sec 556(c)(4)      

Standard Hearing procedures-the Judge
-judge
-hearing officer, presiding officer, judge, etc.
-rules on procedural matters and decides the controversy
-requirements-sec 556(b)
-the agency, member of body, ALJ, employee designated by statute
-no ex parte contacts (judge must not be influenced by any party), separation of function
(not involved in any other function than judging)-sec 554(d)
-neutrality-sec 556(b)
-impartial decision
-disqualification

Representation-Participation
-right to obtain counsel-sec 555(b)
-esp if full scale hearing
-you are not guaranteed counsel, you can obtain and pay yourself
-if permitted by agency, other representative
-appearance-sec 555(b)
-in person, by counsel, or with counsel
-participation by non-parties
-allowed “so far as the orderly conduct of public business permits”-sec 555(b)
-can write briefs, etc.

Conduct of Hearing
-powers of hearing officer:
-oaths                          -subpoena
-rule on evidence         -depositions
-regulate hearing         -pre-hearing/settlement conference
-rule on procedural requests
-standards-556(d)
-burden of proof on proponent
-any evidence permitted-oral and documentary
-even hearsay, etc. as long as its relevant
-no jury, so this is more lenient
-evidence excluded if irrelevant, immaterial, repetitive
-consideration of whole record
-decision supported by record
-impermissible ex parte contacts valid basis for decision
-right to present evidence, rebuttal evidence, discretion
-discretion of ALJ

The Record
-record-sec 556(e)
-transcripts and exhibits=record
-opportunity to respond to matters outside the record if important to decision
-administrative notice

Basis for decision
-admissible evidence
-FRE no applicable-but many agencies have adopted evidence rules
-exclusionary rule not applicable
-all competent evidence admissible
-but maybe not things like polygraphs, mind readers, psychics
-hearsay admissible
-Richardson v. Perales
-logic
-search for the truth-want the agency to have as much info as possible
-no need for jury safeguards, not as much worry about swaying someone                             with emotional, hearsay, etc. evidence
-residuum rule
-consideration of evidence
-vs basis of decision
-not used by all courts
-use of pre-established rules-kindof like a presumption
-these have been challenged but have been upheld
-United States v. Storer Broadcasting
-grid for social security-computer program to decide cases
-challenged but upheld-Heckler v. Campbell

Decision
-decision=order
-when
-after opportunity for proposed findings of fact and conclusions of law-sec 557
-speedy resolution-w/due regard for convenience/necessity and within a                               reasonable time agency shall proceed to conclude matter-555(b)
-compel agency action unlawfully withheld or unreasonably delayed-706(1)
-promptness of denial-555(e)
-content-557(c)
-must include decision on each issue-fact, law, discretion
-needs to include some decision on each thing to allow for appeal
-needs to include the reasoning, not just have one line about issue decision
-must include reason and basis
-informal decision-making
-need not include formal findings and conclusions but must still include reasoning

Decision Process
-recommended decision-557(b)
-followed by agency decision
-initial decision-557(b)
-initial decision by hearing officer
-consideration of parties’ arguments-557(c)
-becomes final unless appeal
-internal appeal, agency review
-agency review-557(b)
-objections and argument-557(c)
-special weight to ALJ credibility
-Universal Camera
-no APA requirement of deference to decision but the agency may set this                                       up except for issues of administrative law judge’s decisions on                                                   credibility-other than this-can have de novo review
-the agency review team does not hear the witnesses so deference is                                      needed to credibility issues