Spring 2010 Administrative Law Outline
Introduction to Agencies:
i. What is Administrative Law:
a. The branch of law that regulates the exercise of authority by executive officials including the officials of independent agencies
b. It is the law governing the forms, functions and activities of government agencies
ii. The Sources of Administrative Law:
a. The Constitution:
1. N & P Clause
i. This is the source of Congressional authority to create agencies
ii. Agency creation is not explicitly mentioned in the Constitution, so this is used to justify Congress’s right to form agencies
b. The Administrative Procedure Act:
1. Is a federal statute that prescribes the procedures agencies must follow and establishes the framework for judicial review of agency action
c. Organic Statutes:
1. A statute enacted by Congress that creates an Administrative agency and defines its authorities and responsibilities
iii. Agencies in the governmental structure:
a. Most federal agencies are w/in a department of the executive branch, in the chain of command w/the President at the top
i. These are called “Executive Agencies”
b. Some agencies operate as “Independent Agencies”
i. I.A. are not w/in any department of the federal government and are not under the supervision of the President or a cabinet officer
iv. Functions of Agencies:
a. To Make Rules/Legislate:
1. DP does not require hearings when agencies make across-the-board decisions based on general factual conditions and NOT the particular situation of any regulated party.
2. This type of fact is called a legislative fact b/c it is the kind of fact normally found legislatively
b. Adjudication:
1. Quasi-Judicial
2. Facts tending to make an act adjudicative in nature:
i. If they involve a small number of people
ii. Individuals involved are specifically affected by the act
iii. Decision is based on the facts of an individual case, rather than policy concerns
3. DP is required when an agency regulates a party based on the particular situation of that party
4. The particular facts are called adjudicative facts b/c they are the type that are found through an adjudicatory process focusing on the particular situation of a single or small number of parties
v. Early Cases (Rulemaking v. Adjudication) PRE-APA
a. Basic Overview:
1. The DP clause REQUIRES a hearing when the agency is engaging in what looks like adjudication, but not when it is engaging in what looks like rulemaking
2. The principle problem is that the distinction b/t these two categories is very blurry
i. Even after the APA, the distinction b/t rulemaking and adjudication is hard
ii. Agencies can always conduct rulemaking under the guise of adjudication and vice versa
Example: Londoner v. Denver:
Facts: Denver paved a street and assessed a supplemental tax on landowners living on the street. (P), Londoner was provided w/notice of the assessment, but there was NO opportunity for a public hearing. The notice only fixed a deadline for the filing of complaints and objection. Londoner brought suit claiming he was denied DP of the law.
Issue: Where a tax is to be assessed upon property owners, do those affected by the tax have the right to argue their side and support their allegations by proof?
Holding: Yes
Analysis: DP protections attach to governmental activities that are ADJUDICATIVE in nature, but NOT to activities that are legislative in nature. *****
RM doesn’t require any Constitutional DP
a. Rationale:
1. Democratic Accountability:
a. Legislature are accountable, local boards are not
b. When state legislature make decisions there has been direct political participation, not so w/boards
b. Functionalist Arguments for a hearing:
i. Specificity:
1. A limited number of people were targeted by the tax, therefore they should be able to respond
ii. Accuracy:
1. A hearing will improve the accuracy of the decision making process
iii. Publicity:
1. Hearings attract publicity and political participation
c. Functionalist argument against a hearing:
i. Resource Strain:
1. Every agency decision affects some people disproportionately. If a hearing was always needed to be provided, agency’s would be crippled and nothing would get done.
d. Important Clarification:
i. If the Colorado legislature has assessed the tax itself through the state legislature, there would have been no hearing requirement or DP problem
ii. The concern was that the legislature is over-delegating to local administrative agencies.
1. If the legislature had done this itself, there would be no problem
Example: Bi-Metallic Investment Co. v. State Bd. of Equalization of Colorado:
Facts: The State Boar
nalist Theory:
1. The Constitution is a living document
2. The Constitution as originally written was not meant to provide for every future problem/situation
3. The Constitution was made to be flexible
4. Anything goes so long as it does not intrude on the core function of another branch
5. Critique: Are courts the best-equipped body for making such judgments
iii. Early Delegation Cases: Only 2 cases have voided delegation
a. Panama Refining Co. v. Ryan: Congress gave President legislative power to prohibit transportation of oil. The court struck down the delegation b/c it gave the President unfettered legislative authority w/o a sufficient standard for the President to follow. Justice Cardoza dissented, adding that there was a sufficient standard found in the policy of the act, and that the President could follow the policy of the act to determine what actions to take.
b. Schechter Poultry v. US:
Facts: Challenge to the NIRA, §3 of the NIRA allowed different industry groups to organize into guilds and promulgate “codes of fair competition.”
i. If the codes were approved by the President a subsequent violation “shall be deemed an unfair method of competition in commerce w/in the meaning of the Federal Trade Commission Act”-which carried a criminal fine of up to $500 a day
ii. Before the President could approve the codes he had to find that the guilds were representative of the industry, and that the codes were not designed to promote monopolies or to suppress competition
iii. One of these Codes, was certified for the Poultry Industry and challenged
Issue: Was this an Unconstitutional Delegation of Legislative Theory?
Holding: Yes, B/C “fair competition” can mean almost anything under the statute, Congress has delegated the regulation of virtually the entire economy to the President and to industry groups. If anything violates the N-DD this is it.
