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Administrative Law
University of Toledo School of Law
Kilbert, Kenneth

Administrative Law Outline

Dean Ken Kilbert Spring 2013

General Info:

· The Administrative Procedure Act (APA) is the statute governing federal agencies.

· Challenges under the APA can be procedural or substantive

o Procedural (did they follow all the procedural hurdles they had to when making decision?)

o Substantive (was the decision logical or stupid?)

§ Arbitrary and capricious review common; generally deferential standard to agency; hard to challenge agency’s decision (swimming upstream)

§ This makes it better to advocate at the agency level and win there before trying to just go to court (can at least get concessions towards your side even if you don’t win completely overall)

· Federal Agencies

o APA § 551 – most parts of the federal govt. are agencies EXCEPT Congress, the Sup. Ct., and the President

§ Executive Agencies – those headed by a person that is appointed by the President and who serves at the pleasure of the President (ex. Secretary of the Interior)

§ Independent Agencies – those headed by a panel of people who are appointed at the President but who do NOT serve at the pleasure of the President à instead, they usually serve fixed terms and are only removable for good cause (ex. NLRB, SEC, Fed. Reserve Board); members must be from both parties

· Typically more independent from the political whims and policies of the President

o Agencies are creatures of statute; they are created by Congress via mandate statutes and do not have any inherent powers except the powers Congress grants them in creating them

§ So when looking at the powers a particular agency has, look at the APA and the mandate statute

o Agencies have three main tasks in executing the laws that Congress passes:

1. Regulate private conduct (ex. SEC, OSHA) – tells people what they can(not) do via enforcement actions

2. Administer entitlement programs (ex. Medicare, food stamps) – make sure benefits distributed approp.

3. Carry out other govt. tasks (ex. NASA, Nat’l Park Serv.) – miscellaneous duties Congress is too busy for

o Types of Agency Actions (3):

§ Rulemaking (legislative) – make regulations to fill the gaps of Congress’s statutes

· When properly issued, these rules have the force of law (published in Fed. Reg. and CFR)

· Enforcement actions are for violating agency rule, NOT mandate statute

§ Adjudication (judicial) – applying rules to a particular set of facts to see if there is a violation of a regulation or to see if someone is entitled to a permit, etc.

· Once decision is made, it can be appealed to an ALJ and eventually to federal court

§ Investigation (executive) – subpoena power; inspections; require reporting, etc.

§ NOTE although agencies can perform all 3 branches’ duties, no separation of powers issue here b/c the APA subjects their decisions to judicial review and ensures certain procedural safeguards are followed

· Criticisms: wield too much power, heads of agencies not politically accountable to people since they aren’t elected = politically isolated/unaccountable

· The APA was designed to compromise b/w the New Deal era policy of expanding govt. regulation and the businesses who did not want federal agencies’ powers expanded so much

o Formal adjudication = win for businesses; informal rulemaking = win for agencies b/c easy to pass new laws

o Businesses still currently want more procedures to prevent agencies from running amok, BUT pros and cons to this

§ Pros to more controls on agencies:

· Explaining the rationale for decision would allow more transparency

· Making them explain their decisions allows for more public input also

· Would inhibit agencies from regulating any way they choose to

§ Cons to more controls on agencies:

· Requiring more procedures slows agency processes down and bogs down agency efficiency (can’t respond quickly/efficiently to public needs anymore)

· Tips on dealing with agencies:

o Don’t go straight to suing! Request a meeting to ensure your understanding of the situation/rule is correct; this saves time and money on litigating what could be a non-issue

§ Also, suing an agency is hard to win since courts are so deferential to them

§ Not going straight to suing also ensures you have exhausted administrative remedies and that you have a final agency decision (vs. just a guy on the phone telling you what he thinks of the situation)

o Lobbying at the agency level is important to help get an initial favorable decision; this prevents you from battling uphill to get an agency action overturned at the federal judicial level

§ Do not hold anything back at administrative level since you’re limited to the administrative record upon appeal (also goes towards ensuring initial win at agency level & being hard to overturn agency decision)

o Asking an agency worker about other solutions and asking for his reasoning about why you are in the wrong may show you he is mistake about the facts or law and allow you to clarify your and his position

§ Tie the solution you are looking for into the purpose/basis of the mandate statute and how you help further its goals or avoid the activities that it seeks to penalize

Rulemaking (RM) – making binding law that is only applicable to future conduct

· APA § 551.5 – agency RM is an agency process for formulating, amending, or appealing a rule

o An agency rule is an agency statement of future effect designed to implement, interpret, or prescribe law or policy

· RM Initiation

o Impetus for New Rules à Where New Rules Come From (4)

· Agency has pwr. to issue rules ONLY IF authorized by mandate statute (ex. FAA can’t issue rules)

1. Mandate statute may require issuance of rule by X date or about Y topic

· Ex. EPA required to issue acid rains rules under Clean Air Act

· This is rare; most times, agency has discretion over if it wants to write a rule or not

2. Agency staff may propose rules for getting progs. to work better or fixing probs. (bottom-up RM)

3. White House (“prompt letters”) or Congress may make suggestions for rules they would like to see

· NOTE Congress controls agency budget and can force agency to testify in front of Congress, so can informally coerce agency to follow its request (top-down RM)

4. Public citizens or lobbying interest groups may attempt to indirectly get a rule published (via persuading agency to act OR lobbying Congress to push agency) or directly request RM by formal petition

· APA § 553(e): formal petition procedures (below)

· Lobbying is important b/c informally persuades agency that what you want is a good thing; some methods are better than others though:

o Talk to the right person (you don’t always need to go to the head of the agency b/c they may not know about the issue or all the specifics)

§ Dealing directly w. agency goes over better than going over its head 2 Congress

o Marshal your legal and factual arguments to have a more persuasive sales pitch; showing the agency your request is consistent with mandate statute and agency’s broader goals is more likely to get you a favorable decision

o Don’t always rely solely on the law; scientific facts or politics may be more persuasive

§ This means it make be better to talk to political appointees than agency employees who still have a steady job after the next election…

o Petitions for RM (APA § 553(e)) – the “official” way of requesting agency RM

§ APA § 553(e) – each agency shall give an interested person the right to petition for the issuance, amendment, or appeal of a rule

§ In response to a petition, an agency may:

· Grant the petition and proceed to RM

· Deny the petition (decision to deny may be subject to judicial review)

o APA § 555(e) – Prompt notice shall be given of the denial of a petition. The notice shall be accompanied by a brief statement of the grounds for denial (i.e. basis of denial)

o Standard of Judicial Review for Denial of RM Petition:

§ Arbitrary and capricious

§ Agency must adequately explain facts/policy concerns

§ Basis for denial must be found in the administrative record

· If agency’s denial is based on incorrect law, court will remand to agency with instructions to reconsider their justification; still will NOT force agency to accept petition for rulemaking though (ex. MA v. E

effect for 2 years before requiring N&C

· Since these rules are NOT exempt from publication, these types of rules must still be published 30 days before the effective date of the new rule

§ NOTE if court decides exceptions do not apply, rule can either be stricken and sent back for N&C OR (if rule is really important) rule can be kept in place but still sent back for N&C and changes (rare)

§ Ways to accomplish RM within exceptions:

· Direct to final RM: agencies publish rule w. future effective date and agency says rule will become final on that date unless there is comment by a certain date; if adverse comments, agency withdraws rule and sends through N&C as if first rule wasn’t published

· Interim final RM: rule published as if final and effective, but in the interim, agency accepts comments and makes subsequent changes/amendments (still must satisfy good cause though)

· APA RM Procedures

o Formal RM (APA § 556, 557)

§ Requires the rule to be made “on the record after an opportunity for agency hearing” (those words in mandate statute trigger formal RM; look for the magic words…)

· Just saying “after hearing” (anything other than those specific words) doesn’t trigger formal RM

§ Similar to a trial-like process à EXTREMELY RARE (usually, agency only required to make informal rules)

§ Vermont Yankee Nuclear Power Corp. v. NRDC – statutes may require additional procedures beyond simply N&C, but the courts may never impose those additional procedures themselves

· Hard for agencies to know what procedures were adequate ahead of time/litigation

· Frustrates Congress’s purpose in passing mandate statutes b/c slows down agency RM

· Shouldn’t import more formal trial-like proceedings into informal policy-based decisions

· Costly and complex for agencies to hold formal RM trials

§ APA 557(d)(1): ex parte communications (communications not on the record and not in the presence or with the knowledge of other interested parties) are PROHIBITED with any agency personnel involved in or reasonably likely to be involved in the rulemaking outside of the formal RM hearing

o Informal RM (APA § 553) – AKA “Notice and Comment” RM

§ Three requirements:

1. Notice published in Federal Register (553(b))

o Proper notice includes:

§ Background and purpose of rule

§ Type of rule

§ Instructions on where to file comments

§ Length of comment period

§ If there will be a hearing or not

2. Opportunity for public comment on proposed rule (553(c))

o Must allow opportunity for written comment (oral comments may be permitted by agency via a hearing but are not required in informal RM)

· No specific time limit for how long agency must take comments (usu. 30, 60, or 90 days); depends on anticipated level of interest of public and complexity of law (but IF mandate sets a time limit, usu. 60 days)

§ Allows agency to make informed changes to proposed rules

§ Minor changes do not require additional N&C period, but larger changes may

o Notice of proposed RM must fairly apprise interested person (regulated community, persons who think they might be affected) of what the final rule is

§ If final rule is logical outgrowth of proposed rule (i.e. affected persons had a fair opportunity to comment on proposed changes to rule), fair appraisal