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Administrative Law
University of Toledo School of Law
Kilbert, Kenneth

Administrative Law Outline

I. Introduction

A. General Information
1. Typical Parties in Administrative Law Case
a. Private Person;
b. Regulated Entitled; AND
c. Government Agency.
2. Why do Administrative Law Cases Occur?
a. The agency is doing something to or for someone.
b. Usually, one party is happy with the action taken, and other party is upset.
3. Benefits of Administrative Agencies
a. Time and effort expended in the administrative process dwarf the time and effort spend in litigation.
4. Reasons for Agencies
a. Congressmen are busy throughout the year, and initiatives may change every year. By having these agencies setup and running all year long regarding certain important matters, it makes life easier.
i. In other words, there is no reason to reinvent the wheel every single year.
B. What is Administrative Law and Why Should We Study It?
1. What is an Agency?


Other Non-Agencies:
· President
· States

§ 551(1) – “Agency” = each authority of the government of the United States, whether or ≠ it is w/I or subject to review by another agency, but does NOT include:

i. Congress;
ii. Courts of U.S.;
iii. Government of the territories or possessions of the U.S.;
iv. Governments of D.C.;
v. Agencies composed of representatives of the parties or of representatives of organization of the parties to the disputes determined by them;
vi. Courts martial and military commissions;
vii. Military authority exercised in the field in time of war or in occupied territory; OR
viii. Functions conferred by §§ . . .
b. Agency Levels
i. Departments are agencies, and they have the highest status. (14 total)
a) Departments are headed by a Secretary, except the DOJ, which is headed by the Attorney General.
1. Appointed w/ the advice and consent of the Senate.
a. E.g. Department of Agriculture, Commerce, Defense, Education, Energy, Heath & Human Services, HUD, Interior, Justice, Labor, State, Transportation, Treasury, and Veterans Affairs
i. All of these agencies are considered part of the Executive Branch.
b) Departments always have a host of sub-entities.
ii. Executive Agencies
a) E.g. EEOC, SSA, and EPA.
iii. Independent Agencies (look for the name of the agency to contain “commission” or “board”)
a) These are free-standing agencies that are ≠ part of a department.
b) Headed ­≠ by a single person but by a multi-member group.
c) Members of the groups heading the independent agency normally can only be removed for cause.
d) Members of the agency serve for a term of years on a staggered basis, so that a President in a single term ≠ replace the entire governing group.
e) Statutes creating independent agencies normally require that no more than a simple majority of the agency can come from a single party.
1. E.g. FCC, NLRB, SEC, OSHRC, etc.
2. What do Agencies Do? Agencies execute the laws of the U.S. that Congress passes.
a. Regulate Private Conduct
i. Regulation can make markets more efficient when the government reduces or eliminates market failures, address inadequate consumer information, and deal w/ insufficient competition.
a) E.g. EPA regulates industrial and other activities to control pollution; OSHA regulates ER’s workplaces to ensure that they are safe for workers, etc.
b. Administer Entitlements Programs
i. Dispenses federal and state funds for specified purposes to the proper recipients by assuring that:
a) The recipients qualify for the program; AND
b) Persons who qualify will in fact receive the benefits.
ii. E.g. Welfare, Social Security, Medicare, Food Stamps, etc.
c. Everything Else: Managing Federal Property
i. Collect taxes; admit/deport aliens; clear imported goods; issue passports; issue/revoke security clearances; sell timber in the national forests; issue mining and grazing permits on public lands; run the national security parks and space programs, etc.
C. A Walk Through the Administrative Procedure Act (APA)
1. What is the APA?
a. The APA is the Act that federal administrative law revolves around; the APA defines:
i. The procedural rights of persons outside of government; and
ii. Structures the manner in which person inside of government make decisions.
2. Definition of Adjudication and Rulemaking
a. Adjudication: “. . . agency process for the formulation of an order” [§ 551(7)] and an “order” is the “whole or part of a final disposition . . . other than rule making but including licensing” [§ 551(5)] i. In other words, adjudication is any final agency disposition except dispositions produced by rulemaking.
b. Rulemaking: “. . . agency process for formulating, amending, or repealing a rule” [§ 551(5)] and a “rule” is “an agency statement of . . . future effect designed to implement, interpret, or prescribe law or policy . . .” [§551(4)] 3. Adjudication v. Rulemaking
a. Adjudication:
i. It applies an existing rule or statute to a set of facts to determine what outcome is required by the rule or statute.
a) Application of existing rule or statute to a set of facts. Retroactive effect
b. Rulemaking:
i. This is similar to the legislative process in that it is creating a “rule” that has future effect and is only binding concerning future conduct.
a) Creation of new law that will have a future effect.
4. Rulemaking
a. When does Rulemaking Apply?
i. § 553 indicates what procedures an agency must follow when it is engaged in rulemaking.
a) APA procedures apply unless the rule concerns:
1. Military or foreign affairs; OR
2. Matters relating to agency management or personnel or to public property, loans, grants, benefits or K’s.
b. Informal Rulemaking – involves fewer procedures and is ≠ very formal procedurally
i. Three-Step Process:
a) Agency publishes notice of the proposed rule in the Federal Register. [§ 553(b)] 1. Exceptions:
a. Interpretive rules, general statements of policy, or rules of agency organization, procedure, and practice [§ 553(A)] b. “Good cause” [§ 553(B)] b) Agency must give interested persons an opportunity to participate in the rule making through submission of written data, views, or arguments with or w/o opportunity for oral presentation. [§ 553(c)] 1. It is the agency’s option whether to permit oral representations; however, most agencies do NOT permit them.
c) Agency must incorporate in the rules a concise general statement of their basis and purpose. [§ 553(c)] c. Formal Rulemaking – required when “rules are required by statute to be made on the record after an opportunity for agency hearing” [§ 553(c)] i. Three-Step Process:
a) Agency publishes notice of the proposed rule in the Federal Register. [§ 553(b)] b) §§ 556-57 replace steps b) and c) under informal rulemaking.
1. These procedures replace the comment period and the statement of basis and purpose.
ii. When is formal rulemaking triggered?
a) Formal rulemaking is required when “rules are required by statute to be made on the record after opportunity for agency hearing.”
1. If the agency’s mandate requires it to adopt a rule “on the record after opportunity for agency hearing,” it must then use the procedures specified in §§ 556-57.
2. Few agencies have mandates that require formal rulemaking.
d. Hybrid Rulemaking – considered “hybrid” because they invariably add some additional procedures to § 553’s requirements, while not going so far as to mandate the procedures of §§ 556-57
5. Adjudication
a. When Does Adjudication Apply?
i. § 554(a): The procedures listed in § 554 apply “in every case of adjudication required by statute (i.e. “agency’s mandate”) to be determined on the record after opportunity for agency hearing.”
a) If an agency is required to engaged in “formal adjudication,” the APA requires the agency to use procedures that resemble a trial.
1. If the agency’s mandate requires it to reach adjudicatory decision “on the record after opportunity for agency hearing,” the agency must then use the procedures required in §§ 554, 556-57.
b) However, the APA does NOT mandate any procedures for “informal adjudication.”
b. Informal Adjudication – APA does ≠ prescribe any procedures for informal adjudication.
i. If an agency is ≠ required by its mandate to conduct adjudication “on the record after opportunity for an agency hearing,” ≠ APA procedures are provided.
a) Although an agency’s mandate may ­≠ require it to use formal adjudication, the statute might still require that the agency use some hearing procedures. (See Overton Park)
b) If the due process clause applies to the agency’s action, it may be obligated to follow some type of hearing process.
1. However, formal adjudication is ≠ usually required; just “some kind of hearing.”
c. Formal Adjudication – formal, trial-like proceeding.
i. § 554 – requires several procedures generally used in trials:
a) Agency must give notice to the parties of its hearing [§ 554(b)];
b) Agency must offer an opportunity to reach a settlement [§ 554(c)(1)];
c) Person who presides at the hearing is prohibited from receiving ex parte contacts, or communications from the parties including EE’s of the agency.
d) Agency must conduct the hearing in accordance w/ § 556-57 of APA [§ 554(c)(2)].
ii. § 556 – addresses the hearing procedures:
a) Authorizes the use of an ALJ and specifies the judges authority [§ 556(b)-(c)];
b) Places the BP on the agency [§ 556(d)];
c) Provides that oral and written evidence can be received [§ 556(d)];
d) Permits cross-exam of W’s [§ 556(d)];
e) Mandates that any decision must be based on the entire record, which is defined to include the hearing transcript and all documentary evidence [§ 556(d)].
iii. § 557 – addresses appeal procedures:
a) ALJ shall “initially decide the case,” although the agency can bypass this step [§ 557(b)];
b) If the ALJ ma

“un® delay.”
5) The standard of review is § 706(2)(A) – “arbitrary, capricious, abuse of discretion.”
6) Discuss 6-Factor Test from TRAC.

Time agency takes to make decision is governed by rule of reason;

a. Court is very deferential to agency in deciding the matter.
2. Where Congress has provided a timetable or other indication of the speed with which it expects the agency to proceed in enabling statute, the statutory scheme may supply content for this rule of reason;
a. Often, the court will put the agency on a “timetable” and the case will be pending until that time.
3. Delays that might be ® in the sphere of economic regulation are ↓ tolerable when health and welfare are at stake;
4. The court should consider the effect of expediting delayed action on agency activities of a higher or competing propriety;
5. The court should also take into account the nature an extent of the interest prejudiced by the delay; AND
6. The court need NOT find any impropriety lurking behind agency lassitude in order to hold that agency action is “un®ly delayed.
b) What standard of review is used for un® delay?
1. § 706(2)(A) “arbitrary, capricious, an abuse of discretion”
a. Under § 706(1), “the reviewing court shall compel agency action unlawfully withheld or un®ly delayed.”
iii. Problem 2-2: Agency DelayàUse TRAC factors to see if agency’s action un®ly delayed.
c. Denial of a Petition
i. Once an agency has denied a petition for rulemaking, one of the obstacles to judicial review is eliminated b/c the agency has made a decision that can be reviewed.
ii. Arkansas Power & Light (action denied case)(found there was no basis on the record to compel rulemaking; says the standard of review is “narrow”)
a) Court will compel an agency to institute rulemaking proceedings only in extremely rare instances.
1. The standard of review is very narrow.
iii. Northern Spotted Owl (action denied case)(good case for defining and explaining arbitrary, capricious, abuse of discretion)
a) Standard of Review:
1. § 706(2)(A) – Arbitrary, capricious, abuse of discretion
a. This standard is narrow and presumes the agency action is valid, but it does NOT shield action from a “thorough, probing, in-depth review.”
b. The reviewing court must assure itself that the agency decision was “based on a consideration of the relevant factors.”
c. It must engage in substantial inquiry into the facts, one that is searching a careful.
2. Agency action is arbitrary and capricious where the agency has failed to articulate a satisfactory explanation for its action, including a rational connection between the facts found and the choice made.
b) Factors that Indicate Arbitrariness, Capriciousness, an Abuse of Discretion: (§ 706(2)(A))
1. failed to produce any analysis;
2. provided no explanation for its findings, AND
3. failed to set forth the grounds for its decision/conclusion.
a. An agency must set for clearly the grounds on which it acted. Judicial deference to agency expertise is proper, but the Court will NOT do so blindly.
c) Remedy:
1. Agency was given a specific time period to provide an analysis for its decision (as to why owls ≠ need to be listed as threatened/endangered).
iv. American Horse Protection Association (action denied case)
a) Institution of rulemaking is an appropriate remedy “only in the rarest and most compelling circumstances . . . [t]his remedy is particularly appropriate when the agency has failed to provide an adequate explanation of its denial.”
b) Typical Remedies:
1. Ask for a more thorough explanation or elaboration of agency’s reasoning; OR
2. Seek formal rulemaking.
v. Problem 2-3: Agency Denial of a Petition
a) Standard of Review: § 706(2)(A) – A reviewing court shall hold unlawful and set aside agency action, findings, and conclusions found to be arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law.