Select Page

Administrative Law
Wayne State University Law School
Hall, Noah Donald

Administrative Law – Hall Fall 2014
I. Administrative Law Practice
B. What Is Administrative Law and Why Should We Study It?
Two different facets:
1.      Law that governs agencies – what we study in Admin
2.      Law that agencies make – what we study in other classes
1.     What Is An Agency?
Defined in APA section 551(1): “each authority of the Government of the United States, whether or not it is within or subject to review by another agency”
§  Congress and courts are not agencies
§  President is not an “agency” – Franklin v. Massachusetts, 505 U.S. 788 (1992)
“Departments” are agencies with highest status with various sub-entities performing specific work
§  Executive agencies: all departments and almost all agencies within departments are executive agencies
o   Heads appointed by the Pres. and serve at his pleasure
Many agencies are freestanding agencies, which means that they are not part of a department – Independent agencies (EX. NLRB, SEC, FRB, FTC)
§  Independent agencies tend to be slightly more independent from the President’s influence than executive agencies because:
§  Independent agencies are usually headed by a multimember group rather than a single person
§  Independent agencies group members heading the agency normally can only be removed for cause (not serving at the pleasure of the POTUS)
2.     What Do Agencies Do?
Can categorize agencies by the type of laws they execute
a.      Regulate Private Conduct
Consumer protection, preservation of the environment, individual health and safety, economic welfare etc.
Two general justifications:
1.      Country has a private market system, but markets are subject to imperfections/externalities that the government can remedy or mitigate
§  EX. Regulating adequate info put out by corps creating a more efficient system
§  EX. Regulating employers to prevent them from exploiting any superior bargaining power to prevent employees from collective bargaining
2.      Operation of unregulated markets may also produce results or consequences that majority of the citizens consider unacceptable
§  EX. Regulating against employment discrimination
b.     Administer Entitlements Programs
Dispensing federal and state funds for specified purposes to the proper recipients
§  Incentives good behavior, infrastructure
Reflects a collective judgment that a just society does not relegate the poorest of its citizens to conditions of degradation and despair
c.      Everything Else
IRS, U.S. Citizenship & Immigration Services etc.
3.     Types of Agency Action
a.      Rulemaking (corresponds to legislative action)
§  Rulemaking authority is limited to what it has been delegated pursuant to Congress’s legislative mandate
§  The agency must have adequate reasons why a regulation has been adopted
§  Regulation is only valid if the agency follows the procedural requirements applicable to rulemaking
Most agencies have rulemaking power
b.     Adjudication (corresponds to judicial function of courts)
Applies an existing rule or statute to a set of facts to determine what outcome is required by the rule or statute
§  EX. Whether a regulated entity has violated an agency rule OR whether a person or entity qualifies for some government permit
c.      Investigations (corresponds to executive function of law enforcement)
Agencies determine whether someone may be in violation of an agency rule or the agency’s legislative mandate
C. A Walk Through the APA
APA defines the procedural rights of persons outside of government and structures the manner in which persons inside of government make decisions
1.     Definition of Adjudication and Rulemaking
Adjudication: any agency disposition except decisions produced by rulemaking
§  Ruling on existing statutes whereas rulemaking is a new rule for the future
Rulemaking: “the agency process for formulating, amending, or repealing a rule” § 551(5)
§  Rule: “an agency statement of . . . future effect designed to implement, interpret, or prescribe law or policy” § 551(4)
2.     Rulemaking
§ 553 indicates what procedures an agency must follow when it is engaged in rulemaking
Informal Rulemaking: majority process; 3 step process
1.      Agency is required to publish a notice of the proposed rule in the Federal Register with two exceptions
2.      Agency must give “interested persons an opportunity to participate in the rule making through submission of written data, views, or arguments with or without opportunity for oral presentation”
3.      Agency must “incorporate in the rules adopted a concise general statement of their basis and purpose”
Formal Rulemaking: minority process; outlined in § 553(c)
1.      Required when “rules are required by statute to be made on the record after an opportunity for agency hearing”
2.      Must undertake the same type of trial that it would use for formal adjudication outlined in § 556-57 (replacing the comment period and statement of basis and purpose)
Hybrid Rulemaking: informal rulemaking + additional procedures
§  Not recognized in the APA, but Congress has imposed particular rulemaking procedures on newly created agencies and passed legislation
§  EX. Public hearings
3.     Adjudication
Covered more fully Chapters 3 and 4
Formal Adjudication: determined in §554(a) and applies “in every case of adjudication required by statute (i.e. agency mandate) to be determined on the record after opportunity for agency hearing”
i.         Must give notice to parties of its hearing and offer an opportunity

    Whether the agency action is contrary to statute
c.       The adequacy of the procedures used by the agency
d.      The substantive adequacy of the agency’s decision
§  APA contains three standards of review:
1.      “De Novo”: instructs a court to substitute its judgment for that of the agency
§  Court must agree with the agency decision in order to uphold it
2.      “Substantial Evidence”: instructs a court to uphold a decision if it is “reasonable”
§  Court need not agree with the agency’s conclusion to affirm it; it only needs to find that the agency’s conclusions are reasonable ones
3.      “Arbitrary and Capricious” or “Abuse of Discretion”: instruct a court to affirm a decision unless the judges can sa that the decision is “arbitrary”
II. Rulemaking
One of three types of agency proceedings under APA § 551: rulemaking § 551(5)
Most agencies are engaged in informal rulemaking, which involves giving notice, inviting written comments, and justifying the rule in a statement of basis and purpose (APA § 553). However, this process is often more complex because:
1.      There has been judicial interpretation of § 553, which has imposed additional procedural obligations on agencies
2.      An agency may have to utilize procedures imposed by sources other than the APA
3.      The agency may wish to take advantage of certain mechanisms for developing rules, which entail special procedures
4.      Executive branch agencies must comply with executive orders issued by the President
5.      The rulemaking process is impacted by the nature of the internal procedures, incentives, and management methods used by an agency
A. Rulemaking Initiation
A statutory command, staff recommendation, petition, or political pressure can prompt an agency to propose a rule
1.     Sources of Proposed Regulation
A statutory mandate requires an agency to adopt rules to protect safety or public interest – very broad discretion. What influences the agency in the exercise of that discretion?
§  Bottom up: staff recommendation, lobbying/petition
§  Top down: legislation requiring specific regulations (often by a particular time or upon the occurrence of certain events), political pressures from Congress or White House