Administrative Law Welton Fall 2016
Broad Course Outline
What Agencies Do
Choice between adjudication and rulemaking
Judicial Review of Agency Action
Agencies’ Relationship to Congress
Agencies’ Relationship to the President
How do agencies fit in to structure in governance, what are their limitations and roles, authority who owes the agencies? Where to find and how to use sources.
Tran-substantive topic – we care about the principle that crosses all of these different fields (process over facts). Thing about overarching question and court’s reasoning behind its decision.
What agencies do – choice between adjudication and rulemaking. Judicial review of agency actions, agency relationship to congress, agency relationship to the president.
Regulatory practice matches if not dwarfs litigation and transactional practice.
Body of law that says what administrative agencies are allowed to do. Majority of citizen interactions with the government go through agencies (and resulting impact on the citizenries’ perception of their government). Hamilton Federalist 68: true test of good government is aptitude and tendency to produce a good administration.
Like civ pro there is Federal and State administrative law (only covering federal law in this class, biggest jurisdiction and most state admin law is based off fed law).
Admin agency – any governmental body that is not president, congress, or courts.
Every agency is created by statute (Act), president may also create an agency, but only if given authority to do so by statute. Mission of every agency is to implement statutes.
What is Administrative Law? What is an Administrative Agency?
What is Administrative Law?
Roughly: “body of law that says what administrative agencies are allowed to do.”
Rough starting definition of administrative agency: “any governmental body that is NOT the President, the Congress, or the courts.”
Agencies are created by statute. Each agency’s mission is to implement one or more statute.
Possible to have agencies within agencies.
Rule—general directive with force of law, enacted by the agency, using power Congress gave the agency.
Congress passes statutes.
Agencies promulgate rules.
Categories of Agency Action
(1) Make Rules
Promulgation of a Rule:
Proposal of the rule—known as “notice of proposed rulemaking” (NOPR)
Written comments from private individuals and companies
Promulgation of the Final Rule—with a preamble responding to the comments
i.–iii. = “Notice and Comment Rulemaking”
law suit in court
(3) Provide Guidance
Kind of like rulemaking, but not as committed
Administrative Law Judges (ALJs)
Can’t be fired
Can’t have prosecutorial staff as boss
The adjudicator may be an ALJ, someone else, or the head of the agency. Adjudicators must follow all agency Rules, but may stray from Guidance.
Virtually all agencies share two characteristics: Created by statute to implement another statute(s)
Organic statute—the statute creating an agency
Substantive statutes or enabling statutes—the statutes that an agency implements
Multiple heads vs. single head (e.g., EPA)
Protected tenure vs. at will of POTUS
Some agencies do lots of rulemaking (e.g., EPA), while others don’t (e.g., NLRB)
Agencies are HUGE—roughly 200 Federal agencies, ~1400 ALJs
Sample Administrative Agency Materials
SEC Organizational Chart
Intro to the Administrative Procedure Act (APA)
The Administrative Procedure Act of 1946
General statute that applies to all agencies, and therefore is a trans-substantive statute.
Sets the general procedural framework.
Sets forth general procedures agencies must follow when undertaking particular types of agency action.
§ 553: §§ 556 and 557 apply “when rules are required by statute to be made on the record after opportunity for an agency hearing.”
§ 554, Adjudication
§§ 556/557 apply whenever § 554 applies, AND
§ 554 applies “in every case of an adjudication required by statute to be determined on the record after opportunity for an agency hearing.” (with exceptions)
THESE ARE THE MAGIC WORDS! When we see these words, we say the statute has “triggered” formal proceedings for rulemaking and adjudication.
To determine what procedures are required:
When reading an Admin. Law case, ask yourself:
What agency is involved here?
What substantive statute is involved here? (there may be more than one)
Is the APA involved? If so, how?
What is this case trying to teach me about how agencies use their powers and how other branches control agencies?
What Agencies Do
The Choice Between Adjudication and Rulemaking
(1) How do you tell whether a proceeding is adjudication or rulemaking?
(2) What are the practical pros and cons of adjudication and rulemaking as tools for agencies to implement statutes?
(3) How much freedom do agencies have to choose between adjudication and rulemaking?
APA Definition of “rule”: § 551(4)—useless
“‘Rule’ means the whole or a part of an agency statement of general or particular applicability and future effect designed to implement, interpret, or prescribe law or policy or describing the organization, procedure, or practice requirements of an agency and includes the approval or prescription for the future rate, wages, corporate or financial structures or reorganization thereof, prices, facilities, appliances, services or allowances therefor or of valuations, costs, or accounting, or practices bearing on any of the foregoing.”—this definition is pretty useless; courts ignore this definition.
“Real” Definition of “Rule”
In practice, courts use the definitions of “adjudication” and “rule” formulated for purposes of procedural due process in the case Bi-Metallic Investment Co. (1915) (p. 378)
Hornbook rule on procedural due process:
Agency adjudications that will result in a deprivation of liberty or property require procedural due process.
Rulemakings do not require procedural due process.
Londoner v. Denver (1908) (p. 378)
Bi-Metallic Investment v. State Bd. of Equalization (1915) (p. 378)
State increased property values of all property in Denver → more tax money paid to state.
“Where a rule of conduct applies to more than a few people, it is impracticable that everyone should have a direct voice in its adoption. The Constitution does not require all public acts to be done in town meeting or an assembly of the whole. General statutes within the state power are passed that affect the person or property of individuals, sometimes to the point of ruin, without giving them the chance to be heard. Their rights are protected in the only way that they can be in a complex society, by their power, immediate and rem
ave a rulemaking or an adjudication, you have to have the exact magic words in order to follow the trial-like procedures in § 556 and § 557.
Lots of statutes include the magic words for adjudication
And remember: due process still informs proceedings
3+ Ways a Substantive Statute Can Approach Agency Rulemaking Power
(A) substantive statute does not authorize rulemaking
(B) substantive statute authorizes rulemaking (Chenery II)
(C) substantive statute requires rulemaking
perhaps, for the statute to be operative
perhaps, to stop a “hammer” from coming into effect
perhaps, including deadline
National Petroleum Refiners Association v. Federal Trade Commission (D.C. Cir. 1973) (p. 578)
Trade Commission Act § 45(a) & (b)—looks like it’s describing an adjudication.
Q/I: ok, so can they still make rules?
§ 46(g) seems to say yes
45(b)—made rule unfair for gas pumps not to put octane ratings on the pumps.
Court: 45(b) contains no limiting language that says we HAVE to use adjudication only AND that there is a long description of adjudication and no time spent on rulemaking so therefore (according to appellees) adjudication was the main source of decision-making that Congress desired. The courts said we won’t read that assumption into this, particularly b/c there is this little § 46(g) that says the commission may make rules for carrying out the provisions of these titles.
It’s a drain on resources to do this set of hearings, and e.one wants to go before the commission for a hearing and this would open the floodgates to cases that do not turn on a very specific one-off issues that can be resolved for all time with one hearing for all potential defendants.
FTC says it’s always an unfair trade practice to not put octane stickers on fuel pumps
FTC wants to ensure that customers have the proper info re. octane ratings
Other ways they could’ve done this: select a company to prosecute, company would respond why it’s not unfair; eventually, have the precedent in place
Not only is it a draw on resources to have the hearings, but every time you want to have an enforcement action against another company (slight differences), it’s an even bigger
Just having a rule that says it’s unfair to not have octane ratings simplifies the enforcement process.
Do they have the authority to make this kind of rule?
Oil industry argues that § 46(g) is talking about making rules re. process of adjudicatory actions. FTC even had said in the past that their rulemaking power didn’t extend to regulating private individuals. Congress was also unsure (they granted specific rulemaking power in particular circumstances b/c unsure)
Ct. says just b/c rulemaking isn’t in §45(a) and (b) doesn’t mean that they can’t do rulemaking