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Administrative Law
University of Pennsylvania School of Law
Adler, Matthew D.

Administrative law outline
Spring 2010
Professor matt adler
 
 
1.09 Notes
 
There is always a statute
 
Schechter
Congress enacts statute – National Industrial Recovery Act (1933)
Provides for the issuance of fair competition (rules and regulations)
Authorizes issuance of rules – codes of fair competition
Procedure
President issues the rules (unusual) – Codes of Fair Competition
Application by trade group, draft code
There is the opportunity for a public hearing to allow participation by other groups
Substantive
Codes shall not promote monopolies
Will tend to effectuate the policy of the statute (recovery of industries after the depression)
President issues the Live Poultry Code (wages, hours, trade practices, etc.)
Enforcement – federal courts
Criminal prosecution
Civil injunctive actions
Constitutional Problems
The constitutional problems are addressed as a defense to the indictment (judicial review)
Pre-enforcement Review – go to court immediately and say it is illegal, private party v. agency
Defense to enforcement (here) – agency v. private party
Challenges
Non-Delegation
Article 1 §1 – All legislative powers shall be vested in the Congress
Theories
Sheer ability to make rules in some body other than Congress is unconstitutional – does not violate the non-delegation doctrine
Adhesion
Indeterminacy (ambiguous or unclear) – this is a problem
5th Amendment Due Process Challenge
Court doesn’t reach
Congress does not have the authority to regulate intrastate transactions – commerce clause (Art. 1, §8)
Commerce was all intrastate, so inappropriate use of Congressional authority
Is the NIRA the first time in American law where we have seen this notion of fair competition?
No, the Federal Trade Commission Act (FTC) talks about unfair methods of competition
And, common law tort – tort of unfair competition
So, how do you distinguish the NIRA from the FTC and common law tort
Meaning of Fair Competition
Rule/Adjudication
FTC is an adjudicative body, deciding unfair competition on a case-by-case basis (adjudicatory apparatus not a rule making apparatus)
NIRA is a rule making apparatus
Does this really matter – no – there may be even more ambiguity in the FTC
Presidential Involvement –
Scope 
Range of industries covered
Kinds of activities in industry
Efficiency
Cost-benefit analysis
FTC is an efficiency statute, NIRA is not, its purpose is to rehabilitate the economy
Concern about the involvement of trade groups
NIRA formed in the first instance by an industry group, however, the president does have to sign off
FTC – groups are still very much involved
Procedure
Court is more familiar with the FTC model, little court
NIRA is a rule maker – doesn’t mean there is no procedure behind it, NIRA provides for a hearing
Maybe the two statute have more in common than the court acknowledges – this more of an attack on FDR, is he out of control
Adler
Pro-Indeterminacy
Need some open texture
Agency expertise
Congressional capture by interest groups
Possibility of cases by case application
Presidential involvement
Flexibility – agency can change rules faster than Congress to adapt
Pro-Determinacy
Agency capture
Dispute congressional democratic credentials
Advantages to having rules
How does court handle this
In Schechter they balance the factors (this has only happen 2 times)
In every case since, they have just given up, the court has not struck down a statute for violating the non-delegation doctrine
 
 
Mistretta v. US
Court of Appeals for the 8th Cir., 1989 (packet)
Rejects the non-delegation challenge
Black letter doctrine: Intelligible Principle Test
So long as Congress “shall lay down by legislative act an intelligible principle to which the person or body authorized to [exercise the delegated authority] is directed to conform, such legislative action is not a forbidden delegation of legislative power.”
Statute which has some zone of determinacy – any statute can satisfy that – we don’t know what it means
Constitutional notions/norms are too difficult to enforce – non-delegation doctrine in practice has become a non-enforced constitutional clause
 
H.L.A Hart “Formalism and Rule-Skepticism”
What is an unconstitutional delegation?
Statute is broader – statute needs to be sufficiently determinate
Agency ability to issue rules – NO
Addresses private action – NO
Makes indeterminacy a more problematic factor
It is a category mistake to think of statutes as determinate, every word has some indeterminacy to it
Court has basically given up – it is a measure of degree, not an all or nothing thing
Nat’l Parks Act
§1 No person may take a vehicle into a national park
§2 Nat’l Park Service may impose fines, after hearing on individuals who violate this provision
Nat’l Park Act *
§The Nat’l Park Service shall insure that the parks remains reasonably clean & quiet
NPS may issue rules
NPS may impose fines after a hearing
* Act could be a non-delegation problem
Act probably won’t be, more succinct and definite
Hart
Ambiguity in the definition of vehicle
Core terms are obvious: car, truck, etc.
What about: toy cars, skateboard, motor home, etc.
Ambiguity in clean and quiet
Core term: monster truck
What about: cars, stereo, etc.
Incorrect to think of a natural language term as wholly indeterminative or determinativ

s.
§ Legislative Branch: Congress’s control mechanism over agencies is that they control agencies by statute. They also have a role in appointing agency heads and have lots of informal powers.
§ Judicial Branch: The federal courts have the general rights of judicial review. Agency decisions can be appealed all the way to the Supreme Court.
o   Chart:
 
 
b.   The Non-Delegation Doctrine
i.            The non-delegation doctrine stems from Article I, §1 of the Constitution, which says that “all legislative powers shall be vested in a Congress of the United States.”
ii.          This prohibits Congress from delegating its legislative powers to any other institution. This prohibition, the non-delegation doctrine, raises the question: Do broad and vague delegations constitute an unconstitutional delegation of legislative powers to administrative agencies?
a.    The New Deal and Schechter Poultry
o   In Schechter Poultry, a unanimous Supreme Court struck down the NIRA (National Industrial Recovery Act) as an unconstitutional delegation of legislative power. It is the last time a non-delegation challenge has succeeded.
 
A.L.A. Schechter Poultry Corp. v. United States (US, 1937)
Facts: The defendants, Schecter Poultry, operated slaughterhouses in New York that sold chickens to local retailers. They were indicted for violating the “Codes of Fair Competition” for the Live Poultry Industry, which were promulgated by the President under §3 of the NIRA. Their violations had to do with failing to fix minimum/maximum wages and hours and failing to following certain inspection procedures.
                                                                                                  i.      §3 of the NIRA allowed the President to approve “codes of fair competition” which would be the standards of operation for various trades/industries.
                                                                                               ii.      The Presdient could prescribe this at the request of trade agencies or at his own discretion. Violations would be punished as a crime.
EXECUTIVE BRANCH
 
CONGRESS
 
JUDICIARY
AGENCIES (EPA, OSHA, FTC, etc.)