Administrative Law
Blais
Spring 2012
I. An Introduction to American Administrative Law
a. Introduction
· Administrative law comprises the body of general rules and principles governing administrative agencies.
What is an agency?
· APA 551(1) All the authorities and operating units of the government except courts, congress, governments of the territories or DC, and courts martial.
o Doesn’t explain whether the President is an agency. Courts have said no!
o Deciding whether the military is an agency involves looking at what the military is doing. Sometimes yes and sometimes no.
· Because agencies are not established by the Constitution, they have to be created by statute.
Two Types – Social Welfare and Regulatory
Regulatory
· Prescribe rules and regulations
· Investigate violations
· Enforce their regulations with adjudications and penalties
· Allocate penalties
o Classis Regulatory Tools
§ Cost of service Ratemaking
§ Allocation by the public interest standard
§ Standard setting
§ Historically based price setting or allocation
§ Licensing
§ Fees or Taxes
§ Gathering or provision of information
§ Subsidies
Social Welfare
· Distribute public benefits
· Determine eligibility for benefits
· Enforce eligibility requirements
b. Adjudication, Rulemaking, and the APA
· Contracts and torts can establish a starting place for what agencies should be responsible for handling.
· If states individually regulate matters, a “race to the bottom” might happen. States may set their laws as low as possible.
o Big businesses don’t want state regulation, because of the problems that a lack of uniformity brings about. Any advantages brought to the companies by the race to the bottom are usually outweighed by this disadvantage.
· An agency begins with an organic statute. Every agency has its own. The APA fills in where the organic statute doesn’t provide guidance.
· Agencies are granted with different powers.
· Very hard to get judicial review of agency non-action. Have to have something for the court to review. If the agency denies a petition, agency must provide reasons for doing so.
o Rulemaking is started by a notice of proposed rulemaking in the CFR.
§ Final rule can’t deviate very far from the proposed rule.
· Advisory committees begin the rulemaking process.
o Whether to regulate and what to propose for a rule are the main duties of an admin lawyer.
· Compromise, not expertise. Policy, not science.
· Options when rulemaking: (1) Have the staff decide what’s needed; (2) Advisory committee; (3) Scientific committee.
o Nothing legally binding when a committee gives its suggestion.
· Limitations on agency regulation. Final OSHA rule limits the application to only farms with at least 11 employees. Takes fifteen years.
o Helps protect small farms. Congress demanded it!
· Industries that need uniformity don’t want state-by-state regulation.
Congress and Agencies
· Office of Management and Budget helps the President regulate agencies.
· Agencies can set standards that have the full effect of law and may be punished for violations. Does that make agencies legislative?
o Or executive? Agency implements laws passed by Congress.
o How much should the Judiciary oversee what is happening in agencies?
What Agencies Do
· Difference between adjudication and rulemaking – Londoner v. Denver (page 35) and Bi-Metallic Investment Co. v. State Bd. Of Equalization (page 39).
· Ask if there’s a constitutional requirement of a certain procedure.
o Then look to see if the organic statute tells you about the needed procedure.
§ Then look to the APA.
Constitutional Structure
Londoner v. Denver – 1908, page 35
· Legislative body of Denver decided that if residents wanted their streets paved, they could petition and the city would do it. City would then charge the residents based on how much each resident benefited.
o Some residents benefited more based on location or size.
o A lot of tax assessment goes by increase in value. That’s what the city was doing here.
· No constitutional violation that the city went ahead and paved without a petition. Appears that the city violated the state law, but the federal constitution doesn’t require that the states follow their own laws!
· Complaint by the people is that they didn’t get a chance to object, but they did object through their letter! Real complaint is that they didn’t have a sufficient opportunity to be heard. Board didn’t treat this as an objection that it had to respond to. Submission in writing is usually fine as a means to be heard.
o Has to be some opportunity to particularly object and to make argument, however brief. If needed, opportunity to submit proof, however informal. Not a trial, no rules of evidence.
Bi-Metallic Investment Co. v. State Bd. Of Equalization – 1915, page 39
· Difference in the governmental action here. Affects a lot of people very generally versus a few people very specifically in Londoner.
o Few versus many is a correlative factor, but it is not determinative.
o When a lot of people become involved, case is usually decided on more general facts.
· Legislative (general) facts versus specific (Adjudicative) facts.
o Specific facts are determinative, true or false (A house has a certain square footage). Individuals are singled out here. Adjudicative is retrospective. Hearings are better here. Individuals have something to add.
§ Adjudicative – Few, particularized, individualized facts, retroactive (facts on which you’re intending to operate on have already occurred).
o A general fact may be an assessment (An area sells a lot of liquor). Democratic process appears here. Legislative is prospective. Every single person who lives in Denver doesn’t have a unique perspective.
§ Legislative – Many, general, generalizations, prospective (deciding on the legal consequences of facts that will occur).
· Due Process Required
o Always involves notice.
be governed by these sections.
§ Section 557 is the decision process in a hearing.
· Section 555 may govern informal adjudications.
o When an agency tells someone no, they must provide notice with a little bit of an explanation. This allows the Court to have something to go on, if litigation is pursued.
· Section 554 triggers sections 556 and 557.
· The Attorney General’s Manual used to influence interpretation of the APA. Now, the statute is more static.
c. Information and Inspection
· Accomplished through field investigations and subpoenas.
o There aren’t enough people for investigation work, because there isn’t enough money.
· Challenge is figure out how to have enough discretion to cure inefficiencies without bringing in other problems.
· Project Excel – Clinton’s plan that allowed companies not to comply if they could submit better air regulation plans than the current rule.
o Created influence problems.
· Theory of cooperative approaches where companies don’t get surprise inspections for voluntary compliance.
o Eliminated fines as well for cooperative compliance.
o If you pick the worst offenders, assuming that the industries themselves know the best place for improvement and the best way to save money.
§ Aiming to get a better fit while turning their attention to the problems. Maybe the inspection and fines were enough of an incentive.
§ If someone within the company is designated for this, he or she may be more passionate and work harder then someone outside the industry.
· Do you need a warrant to inspect? Yes, an administrative warrant! But you don’t need probable cause of a violation in order to get one. You must show reasonableness, that the inspection is part of a larger, greater regulatory scheme.
o Why require a warrant if so little is needed? Just a little check on arbitrary exercise of federal power.
· Collecting information appears to have a pretty regulatory effect. When entities have to compile and disclose, even just to the government, especially to the public, their business practices improve.
o This may be a lower cost to the government, but it is very expensive to entities. Businesses have a say in Congress and can limit everything they have to report on. Paperwork Reduction Act limits the use of information collection by agencies as a regulatory tool.
§ Any agency that wants additional information (with certain requirements) has to ask permission from the President.
