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Administrative Law
University of Toledo School of Law
Kilbert, Kenneth

Administrative Law

Fall 2011

Prof. Ken Kilbert

The Administrative Procedure Act:

· Provides administrative procedures and standards for judicial review of administrative decisions – the APA subjects administrative agencies to specific procedures and judicial review to check their power

· APA §551(a) – “Agency” means each authority of the Government of the United States, whether or not is it within or subject to review by another agency

o Does not include: Courts, congress, states, military commissions, etc

What Do Agencies Do?:

· Regulate private conduct (i.e. SEC, OSHA)

· Administer entitlement programs (i.e. Medicare, food stamps)

· Carry out other government tasks (i.e. NASA, National park service)

· What actions do agencies perform:

o Rulemaking (legislative function)

§ properly executed, rules have the force of law

o Adjudication (judicial function)

o Investigation (executive function)

Agency Actions:

· Adjudication: APA §551(7)

o “agency process for the formulation of an ORDER”

· Order: APA §551(6)

o “FINAL DISPOSITION other than rulemaking, but including licensing of an agency”

· Rule Making: APA §551(5)

o “agency process for formulating, authorizing, or repealing a RULE”

· Rule: APA §551(4)

o “agent statement of…FUTURE EFFECT designed to implement, interpret or prescribe the law or policy”

Agency Authority:

· Derives from TWO main sources:

o (1) Mandate Statutes – Created by Congress and articulating the agency’s purpose as well as the procedures for carrying out that purpose

o (2) APA

Rulemaking:

· Kinds of Rulemaking:

o Formal: When is formal rulemaking required?

§ Formal rulemaking triggered only by the language in the mandate statute “on the record after an opportunity for agency hearing” à which is found in the agencies mandate statute [U.S. v. Allegheny-Ludlum Steel Corp]

· “After hearing” language does not trigger more procedure than APA §553 notice & comment [U.S. v. Florida East Coast Railway]

§ Court can’t impose more procedures on agency during rulemaking than statute or agency requires [Vermont Yankee Power Corp.]

§ Rarely ever used

§ “On the record after agency hearing” – Governed by APA §§556,557

· Ex Parte communications are prohibited in Formal Rulemaking

o Informal:

§ Governed by §553 – APA §553 Requires:

· Explanatory notice of proposed rule published in federal register – §553(b)

o Must “fairly apprise” a party that their interests are at risk

· Provides interested persons opportunity to comment – §553(c)

o Failure to comment during this period might preclude you from challenging the rule at a later date

· Final rule published with general statement of its basis and purpose – §553(c)

§ How different can the proposed and final rule be?

· Logical Outgrowth Test:

o It is adequate if the changes in the original plan are “one in character with the original scheme,” and the final rule is a “logical outgrowth” of the notice and comments already given

§ IOW: If the rule materially alters the issues involved in the rulemaking or, if the final rule “substantially departs from the terms or substance of the proposed rule,” the notice is inadequate.

§ What is the remedy for failure of notice?

· Court will set aside the rule since it did not go through notice and comment

· Sometimes, court will allow rule to stay in place during a notice & comment period

§ Ex Parte Communications:

· No prohibition on ex-parte communications in informal rulemaking

· Courts finds value in open access during this legislative-type enacting

§ Final Rule is Published with General Statement of the Rule’s Basis & Purpose:

· APA §553(c): Statement of the Rule’s Basis & Purpose

o Agency will usually include a full statement of basis and purpose for the rule including agency’s response to comments

§ Shows that the agency is not acting arbitrarily or capriciously

§ Shows that the agency has received and responded to comments

§ Publication: APA §553(d)

· Rule must be published at least 30 days before its effective date; EXCEPT:

o (1) Substantive rules which grant exemption or relieves restriction

o (2) Interpretive rule, policy statement

o (3) Good Cause (explanation must be published with rule)

o Hybrid:

§ Not part of the APA

§ Governed by the mandate statutes – where the individual agency’s mandate requires more procedure than regular §553 informal rulemaking but does not require full formal rulemaking

o Other Statutory Mandates

§ National Environmental Policy Act (NEPA)

· Requires agencies to make an Environmental Impact Statement before engaging in activities (including RMing) that have a significant effect on the environment

§ Regulatory Flexibility Act

· Requires agencies to create an Economic Analysis when their rules will have a significant economic effect on a substantial number of entities

§ Paperwork Reduction Act

· Requires agencies to engage in notice and comment before imposing any reporting or recordkeeping requirements on persons

§ OIRA Executive Order

· P

&C

§ Remedy for an arbitrary and capricious Denial of Petition:

§ Agency can be ordered to repeat the decision process

§ Agency may present another reason for denying the petition

· Exceptions to Rulemaking Process:

o Exceptions to Informal Rulemaking are found in §553

o APA §553:

§ §(a) – General Exceptions:

· (1) Military of foreign affairs function

· (2) Agency management/personnel OR public property

o This exception receives a lot of criticism for being too wide

§ §(b) – Notice & Comment Exceptions: (Exceptions are just for notice & comment and not publication)

· (A) Interpretive, general policy OR agency organization, procedure or practice

o When is it Procedural; when is it Substantive?

§ Rule: Substantial Impact Test:

· If a primary function is affected then there is a substantial impact THEREFORE the rule is substantive.

§ Rule: Encode Test: (D.C. Circuit)

· Does it “encode a substantive value judgment or put a stamp of approval or disapproval on a given type of behavior?”

o If YES = Substantive

o If NO = Procedural

· (B) Impracticable, unnecessary or contrary to public interest – i.e. where there is a GOOD CAUSE not to have notice and comment.

o Direct Final Rulemaking: Promulgated by the EPA

§ Essentially:

· Effective in X number of days, unless there is an adverse comment. If there is an adverse comment, the rule is withdrawn, and then goes through notice and comment

· If no comment becomes a final rule

· Agencies rely on the “good cause” exception for direct final rulemaking – must be NO comment for it to work

o Interim Final Rulemaking:

§ Agency publishes a final rule immediately but will consider comments

§ This is not a substitute for notice and comment, but if there are no comments then it was not necessary to go through the notice & comment procedure

§ If there is an adverse comment, agency sends the rule back through notice & comment

o REMEMBER if a rule does not go through notice & comment it will not have the effect of binding law