ADMINISTRATIVE LAW
WHAT IS AN AGENCY?
v Def’n APA§551(1) Each authority of the gov’t of the US whether or not it is w/in or subject to review by another agency w/ some exceptions
Ø Exceptions: Courts, Congress, President
Ø Departments – agencies with the highest status
§ Headed by a secretary
§ Appointed by president w/ advice and consent of the Senate
§ Serves at the pleasure of the President
v Executive Agencies
Ø Headed by Administrator
Ø Appointed by president w/ advice and consent of the Senate
Ø Serves at the pleasure of the President
v Independent Agencies
Ø Headed by a panel whose members are appointed by the President.
Ø Can only be removed for cause, serve a term typically 5yrs staggered usually no more than a simple majority from one party
§ Federal Reserve Board. FCC
Ø
v Agencies are all creatures of statute
Ø Look at the mandate statute to define their powers
WHAT DO AGENCIES DO?
v Regulate private conduct
Ø SEC, OSHA,EPA, FTC, FCC
v Administer entitlement programs
Ø Medicare, food stamps, etc
v Carry out other gov’t tasks
Ø NASA, nation park service, FAA etc.
AGENCY ACTIONS:
v Rulemaking
v Adjudication
v Investigation
APA:
v One reaction to perceived unchecked power of administrations set up after the New Deal
v Sets procedural requirements to check agencies’ power
v Applies to all federal agencies
v Must look to the mandate statute of the agency
Ø APA is the baseline requirement, the mandate statute may have further requirements for agency action
DISTINCTION B/W RULMAKING AND ADJUDICATION:
Adjudication:
v §551(7) “adjudication” means agency process for the formulation of an order
v §551(6) “order” means the whole or a part of a final disposition, whether affirmative, negative, injunctive, or declaratory in form, or an agency in a matter other than rulemaking but including licensing
Formal Adjudication:
v Necessary in every case of adjudication required by statute to be determined on the record after opportunity for an agency hearing
Ø §§ 556, 557 Requirements for formal adjudications
§ Hearing resembling a trial in front of an ALJ (employee of agency not a federal judge)
§ Can appeal to Administrator or delegate thereof
§ Judicial Review
Informal Adjudication:
v No per se requirements for informal adjudication in the APA
Ø Some agencies set their own guidelines
Ø Some guidelines are set in agency’s mandate statute
Ø If the adjudication includes due process issues i.e. taking life, liberty, or property then the adjudication must satisfy due process requirements.
Rulemaking:
v §551(5) “rule making” means agency process for formulating, amending, or repealing a rule
v §551(4) “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 f an agency and includes the approval or prescription for the future of rates, wages, corporate or financial structures or reorganizations thereof, prices, facilities, appliances, services or allowances therefore or of valuations, costs, or accounting, or practices bearing on any of the foregoing
Formal Rule Making:
v Necessary when rules are required by statute to be made on the record after opportunity for an agency hearing
Ø §§ 556,557 Requirements for formal rule making
Ø Very rare
Informal Rule Making:
v Requirements §553
Ø Publish notice of proposed rule in Federal Register (daily)
Ø Provide opportunity for affected parties to comment
Ø Publish the final rule with “concise” statement of basis and purpose in the Federal Register
Hybrid Rule Making:
v Not in the APA
v Congress includes additional procedures over notice & comment procedure of informal rule making, but not the full formal rule making procedure.
§555 Ancillary Matters
v Right to appear
v Right to retain counsel when compelled to appear
v Right to notice
v Gives agency subpoena power
JUDICIAL REVIEW:
v Limitations on review
Ø Bar: Congress makes issue a matter of agency discretion in the mandate statute
Ø Postpone: Congress can limit appeal of agency decision to only those that have been sued under it
Ø Agency decision must be final
Ø Ripeness/Standing
Ø Exhaustion of administrative remedies
Scope v. Standard of Review:
Standard of review: deferential to the agency §706
v Arbitrary & capricious, Substantial Evidence
Scope of Review:
v What the court can look at
Ø Typically Admin record only – no de novo review
RULEMAKING:
Begin Rulemaking Process:
v Agency has the power to issue rules only if it is given authority to do so in the mandating statute.
v Mandating statutes may include deadlines for agency rulemaking
v More often agency given general authority to make rules to implement & enforce the statute
Sources for initiating rulemaking:
v Executive branch – top down
v Staff recommendations – bottom up
v Public pressure
Ø Lobbying Executive, Congress or Agency staff
§ Know who to talk to – get in on the staff level, know who is making the decision
§ Match client’s goals w/ agency/statute goals. Legal arguments may not be the best look at policy and political
§ Can only go to the well so often – constant pressure turns into background noise
v Petitions for rulemaking
Ø APA §553(e): each agency shall give an interested person the right to petition for the issuance, amendment, or repeal of a rule
§ Prompt notice shall be given of the denial of the petition accompanied by a brief statement for grounds of denial
Ø Aggrieved petitioner can seek judicial review
Ø No deadline under the APA for taking action on the petition
§ Look to the mandate statute
§ Look to agency procedural rules
Agency Delay
v APA Authority
§706 Scope of review:
(1) compel agency action unlawfully withheld or unreasonably delayed
§551 Definitions:
(13) “agency action” includes thee whole or a part of an agency rule, order, license, sanction, relief, or the equivalent or denial thereof, or failure to act
§555(b) agencies must decide in a reasonable time.
v Rule of Reason:
Ø Whether the agency’s delay is so egregious as to warranty mandamus
Ø Timetable supplied by Congress – mandating statute, legislative history
Þ Persuasive but not dispositive, courts tend to be very lenient
Ø Less delay permissible when human health & welfare are at stake
Ø Effect of expediting this action upon other priority agency actions
Ø Nature and extent of the interests prejudiced by the delay
Þ Interests of the statute not the party complaining
Ø Need not find that the agency delay be due to nefarious intent, may weigh in on courts decision.
v Remedy:
Ø Court requires agency to submit some kind of timetable for action
Þ Then revised schedule, then at some point the court could require agency to grant petition & begin rulemaking
Ø D.C. Circuit
Þ Some statutes require appeals to go to D.C. Circuit
Þ Agencies are in DC lost of the lawyers suing the agencies are in DC
Þ DC Circuit opinions are the most persuasive
Standard of review for petition denial:
v §706(1)(A): arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law;
v Arbitrary & Capricious
Ø Arkansas Power & Light v. ICC
Þ Only in extremely rare circumstances
Þ Ensuring agency has adequately explained facts & policy concerns
Ø Northern Spotted Owl v. Hodel
Þ Arbitrary & Capricious does not shield agency for a through, probing review
Þ Agency must provide a satisfactory explanation that provides a rational connection b/w the facts found & the choice made
Ø Court is willing to scrutinize a little more with a more comprehensive record to review
v Remedy when agency action is found to be arbitrary & capricious
Ø Do over
Ø Court does not require accepting the petition, agency can come up with a better reason to deny the petition
INFORMAL RULEMAKING:
Exceptions:
v Exceptions to informal rulemaking requirements – all exceptions very narrowly & strictly construed
Ø §553(a) General Exceptions:
Þ (1) Military or foreign affairs
Þ (2) Matter relating to agency management or personnel, public property, loans, grants, benefits, or contracts
© Public land more controversial – justification: APA reaction to the New Deal regulation of private property, not so concerned about gov’t regulating their own property.
Þ §553(a) are exemptions from all of the informal rulemaking requirements including publishing.
Þ Not as big of a concern today – most of the agencies subject to §553(a) have waived it
Þ Many mandate statutes w/in §553(a) have waived the exception
Ø §553(b)(3)(A) Exception to notice & comment requirement only:
Þ Interpretative rules, general statements of policy, or rules of agency organization, procedure, or practice
Ø §553(b)(3)(B):
Þ Impracticable, unnecessary, or contrary to public interest
Þ Would frustrate purpose of the regulation
Þ Emergency
© Not every health & safety regulation is an emergency
© End of mandate period is not an emergency
Þ Must have good cause & publish brief statement of the reason
v Ways to get around notice & comment
Ø Direct final rulemaking: Publishes final rule w/ a statement saying that it will take effect in 30 days absent adverse comment
Þ When agency considers the rule minor or ministerial
Þ If agency does receive an adverse comment, then it will send the rule back through the notice & comment procedure
© Notice & comment requirement also triggers other statutory & executive order requirements
Ø Interim final rulemaking: publish final rule immediately, but will consider comments
Þ not a substit
action ($100mill or more)
Þ If the action will have an effect on the environment, then the agency must do an EIS
Ø Regulatory Flexibility Act: must consider impact on small business
Ø Unfunded Mandate Reform Act
Ø Paperwork Reduction Act
v Executive – executive orders (not subject to judicial review?????)
Ø Regan – must do a cost/benefit analysis
Þ Every President since has followed this
State Process:
v Informal rulemaking process is modled after the APA – ORC § 119.03
Ø Differences
Þ Rules passed under emergency exception are only good for 90 days w/o notice & comment
Negotiated Rulemaking:
v Various interested parties (stakeholders) engaged in a consensus building, cooperative negotiated process to make a rule
v ACUS recommendations for negotiated rulemaking success.
Ø Consult w/ convener at earliest predictable time
Ø Issues must be ripe
Ø Deadline
Ø Should not require parties to compromise their fundamental tenants
Þ Either predetermined or not crucial for the rule
Ø Adequately represents limited number of interests
Ø Diverse issues rank priorities
Ø No single interest should dominate
Ø Parties willing to have good faith negotiations
Ø Non-binding agency representative present
JUDICIAL REVIEW:
v Issue: whether the agency action is beyond the authority of the statute
Ø A judicial interpretation of a statute trumps an agency interpretation, only if the judicial interpretation was based on a finding of the clear meaning of a statute
Þ Agencies are free to change their prior interpretations even if the prior interpretation was challenged and upheld.
v Deference
Ø Congress has delegated to agency .: should give deference
Ø Expertise – agency knows what rule are necessary & how they should be created & interpreted
§706 Scope of Review:
v Compel agency action unlawfully withheld or unreasonably delayed
v Hold unlawful and set aside agency action, findings, and conclusions found to be
Ø Arbitrary & capricious
Ø Contrary to constitutional right, power, privilege, or immunity
Ø In excess of statutory jurisdiction, authority, or limitations, or short of statutory right
Ø w/o observance of procedure required by law
Ø unsupported by substantial evidence under §§ 556,557
Ø unwarranted by the facts to the extent that the facts are subject to trial de novo.
Chevron v. National Defense Council
v Facts
Ø EPA changes interpretation of “stationary source” from individual stacks to the bubble rule
Ø ∆ claims that the second interpretation is not in accordance with the statute & violates the APA b/c it is not a correct statutory interpretation
v D.C. Circuit
Ø Plain reading of the statute not in accordance w/ new interpretation
Ø Policy – does not implement the policy setforth in the CAA
v Rule – USSCT
Ø Deference to Agency as long as the agency decision is a reasonable interpretation
Ø 2 step analysis
Þ Is the statute clear & unambiguous?
© If yes then give effect to the statute – no deference to the agency
Þ If the statute is not clear & unambiguous, then ask whether the agency’s interpretation of the statute reasonable?
2 Standrads
v §706(2)(a) arbitrary & capricious – for informal rulemaking
Ø Agency has considered the facts
Ø Not a clear error of judgment
Ø Overton Park – required the Agency to provide Adequate Explanation of their contemporaneous rational – requirement not in the APA
Þ Reconciling Overton Park & Vermont Yankee
© VY – courts are not free to impose specific procedural requirements that have no basis in the APA
© OP – §706(2)(a) directs the court to ensure that agency action is not arbitrary & capricious or otherwise contrary to law – it imposes a general procedural requirement mandating that the agency take necessary steps to provide an explanation that will enable the court to evaluate the agency’s rational at the time of decision.
