Administrative Law Outline

Administrative Law Outline

Don Hornstein – Fall 2014

I. The Constitutional Boundaries of Administrative action

A. Delegation of Power and Agency Rulemaking (INTELLIGIBLE PRINCIPLE)

1. Article I, § 1 of the U.S. Constitution vests all legislative power in the Congress.

2. The general rule:

a) Congress and state legislatures may delegate some but not all legislative functions to administrative agencies. Legislatures may create agencies with the power to make rules within a statutory scheme that provides adequate standards (or intelligible principles) to guide the agency and limit its discretion.

b) Generally, agencies have a huge amount of rulemaking power, and the courts tolerate it.

3. The nondelegation doctrine prevents overly-broad delegations of power to executive agencies and serves three important purposes. Doctrine is v. weak at fed level. Some states, NC included, have a stronger non-delegation doctrine. Am. Trucking would have strengthened it. Elements of fed doctrine :

a) It ensures that important policy choices are made by the legislature;

b) It provides the recipient of delegated power with intelligible principle to guide the exercise of the power;

c) It ensures that courts charged with reviewing the exercise of delegated power will be able to so against ascertainable standards.

4. What if non-delegation doctrine is weak or unavailable?. It’s illegal for agencies to do more that Congress delegates for them to do; going beyond what Congress delegates is ultra views or “not in accordance with law.” The issue is one of statutory interpretation.

a) Benzene (UNANIMOUS DECISION) = shows current state of law

(1) Facts: Agency tried to limit amount of Benzene. Industry groups challenged the standard, and the 5th Cir. struck it down on the grounds that § 3(8) and § 6(b)(5) required a cost-benefit analysis before a rule could be implemented.

(2) HOLDING: Section 3(8) requires the Secretary of OSHA to determine what is reasonably necessary and appropriate to remedy a significant risk of material health impairment. Because the Secretary failed to make a threshold finding that a risk existed at 10 ppm and that a lower standard would significantly lower the risk, the 1 ppm standard was struck down. The plurality stops short of requiring a cost-benefit analysis; rather, the opinion suggests the agency must demonstrate that the money spent would have some life-saving benefit.

(3) DISSENT: “Feasible” means “technologically and economically achievable.” Since no industry group submitted comments suggesting the standard wasn’t technologically and economically achievable, the standard should not be struck down. The dissenters would have adopted a mere “reasonable relation” standard. If the Court had accepted this argument, the statute would have made a sweeping delegation of legislative power.

(4) CONCURRENCE 1: Powell agrees with the 5th Cir.’s holding on cost-benefit analysis. He’s all alone on this — the plurality never reaches the question, the dissenters ignore it, and Rehnquist ignores it. As an aside, the Cotton Dust case held 8-1 that the Act does not require a cost-benefit analysis prior to standard adoption.

(5) CONCURRENCE 2: Rehnquist would go much further than his colleagues; he would strike down the entire statute as an invalid delegation of legislative power. The rule involves a “tragic choice” — whether the statistical probability of future deaths should ever be disregarded in light of economic costs preventing those deaths. Congress, not agencies, is in the best position to make such tragic choices. Rehnquist’s concurrence is seen not so much as an attack against the OSH Act, but on the weakness of the nondelegation doctrine in general. He’s fighting for a stronger doctrine, but he’s fighting alone.

5. Whitman v. American Trucking (2001) p. 590: (recent example of intelligible principle)

· The statute instructs the EPA to set primary ambient air quality standards “the attainment and maintenance of which . . . are requisite to protect the public health” with “an adequate margin of safety.”

· Issues:

o Does Section 109(b)(1) of the Clean Air Act (CAA) delegate legislative power to the Administrator of the EPA?

§ No, this part of the act is allowed.

§ To protect the public health with an adequate margin of safety, fits comfortably within the scope of discretion permitted by our precedent.

o Can the Administrator consider the costs of implementation in setting national ambient air quality standards?

§ No the Administrator cannot

· Nowhere in the statute does it explicitly give the EPA the ability to consider costs and in other statutes that privilege is expressly given.

· Duty of Delegation: Congress must “lay down by legislative act an intelligible principle to which the person or body authorized to act is directed to conform.”

o Only twice has the Court struck down a statute based on this principle:

§ One provided no guidance for the exercise of discretion

§ The other conferred authority to regulate the entire economy on the basis of no more precise a standard than stimulating the economy by assuring fair competition.

6. Note Cases (Benzene is the BIGGY):

a) Brig Aurora (1813): Congress passed a statute the empowered the President to impose tariffs if he made the factual determination that Great Britain and France were acting in such a way to justify the tariff. Because the statute delegated only a factual determination to the President, it was upheld.

b) Field v. Clark (1892): Congress passed a statute giving the President the power to decide whether retaliatory tariffs by the U.S. shall take effect. If the President determined other countries were acting unreasonably with respect to U.S. exports, the President could impose retaliatory tariffs for a period he deemed just. Because the statute permitted the President to act as a mere agent, simply executing the laws put in place, it was upheld. Though more discretion was granted the President here than in Brig Aurora, the case falls under the “ascertainment of facts” rubric.

c) Grimaund (1911): The Sec. of Agriculture was given the power to regulate anything that may adversely affect forests. The Sec. used the authority to adopt a rule requiring ranchers to obtain a permit before their sheep could graze in national forests. Violators were subject to a criminal penalty. Prosecution of violators was left to the courts, not the agency. The Court upheld the delegation, holding that the Secretary was no legislating but merely “filling up the [administrative] details.”

d) J.W. Hampton (1928): The President was given the discretion to adjust retaliatory tariffs set out by congressional action. The Court held that when Congress establishes intelligible principles or primary standards for an agency to follow, it has made the fundamental policy decision; the executive can implement the rest, even if that means adjusting standards established by Congress.

e) Panama Refining (1935): Section 9(c) of The National Industrial Recovery Act (NIRA) permitted the President to criminalize the interstate trading of oil in an effort to stem uncontrolled domestic overproduction. More specifically, the President by Executive Order could enforce the conservation order of state boards attempting to deal with the problem. The Court struck the section down, holding that it could find no standard for the President to follow. The President was not required to ascertain and proclaim the conditions prevailing in the industry which made his action necessary; rather, congress left the matter to the President without standard or rule.

f) Schechter Poultry (1935): Section 3 of NIRA authorized trade associations to seek presidential approval of “codes of fair competition” they had drafted — codes that could give a guild-like structure to trade. The Court struck down the section 9-0, holding that the approval process lacked a discernible administrative process — the approval process lacked notice and hearing procedures and was not closely supervised.

g) Carter v. Carter Coal (1936): Third and final time the Court found a statute unconstitutional on delegation grounds. Coal producers were required by statute to either pay tax on their coal or join a union (which approved wages, hours, benefits, etc.) and could make their choice in the absence of government approval. This unrestrained delegation to private persons was struck down.

h) Yakus (1944): Section 2(a) of the Emergency Price Control Act of 1942 authorized the Price Administrator to promulgate regulations fixing wartime prices or commodities which in his judgment are generally fair and equitable and will effectuate the purposes of the Act. Procedural requirements were put in place, and the Court held there was no absence of standards for guiding the Administrator’s actions.

i) Fahey (1947): A statute granted sweeping authority to bank regulators. It was upheld on the grounds that there were assurances of effective control arising