Federal Administrative Law
Gary Mitchell – Hillary 2011
I. What is Administrative Law?
A. System of laws that govern the actions of administrative agencies where those actions affect individual rights.
B. Two types of administrative agencies
a) Fully controlled by the President through cabinet officials
b) Ex: Treasury, Labor, Defense, Homeland Security
c) President can remove the heads of an agency at any time for any reason
2. Independent regulatory
a) Controlled by executive branch but direction not given by President
b) President appoints the head of the agent who can then act independently
c) Usually regulatory in nature
d) Ex: FTC, FCC, SEC, NLRB
C. Administrative Procedures Act
1. Sets formal procedures for rulemaking
2. Separates investigation from adjudication
3. Allows interested parties to participate in decision making
4. Does not apply to: Congress, Courts, the President, Governments of the States, and Government of D.C.
II. General Limitations of Agencies
A. A court will not overrule an agency’s decision as long as the decision is within the agency’s discretion under its own regulations and the regulation itself is not unconstitutional. [Gilmore v. Lujan]
B. An administrative agency’s declaration of a rule does not pre-empt state rules as long as the state rule is more stringent than the agency’s rule. [Wyeth v. Levine]
1. Congressional review: Agency rules cannot violate Constitution or give power to Congress that it otherwise doesn’t have. [INS v. Chadha]
2. Court acquiescence: Agencies must acquiesce to the decisions of intra-circuit courts. They are not required to acquiesce immediately to inter-circuit decisions but should be considered highly persuasive. If they don’t like it, they should appeal. [Johnson v. US Railroad]
3. President’s authority
a) Political accountability – Vote for a different president if you don’t like agency rules
b) Appointment & Removal power – not limitless [Humphrey’s Executor, Morrison]
(1) Independent agency – Congress can put limits
(2) Executive agency – President has full removal and appointing discretion
III. Delegation of Legislative Powers
A. Agencies are created by statute; in theory, all their authority comes from Congress.
B. US Supreme Court has struck down the delegation of powers to an agency two times:
1. [Panama Refining] – Supreme Court struck down delegation of power to President allowing him to prohibit the transportation of oil in interstate commerce.
2. [Schechter Poultry] – Supreme Court struck down delegation of power to President allowing him to make codes regulating the poultry industry.
C. Post-1935 Delegations
1. Supreme Court upheld delegation to Price Administrator to set maximum prices. Court reasoned that the “statement of purpose” combined with “statement of considerations” was sufficient for constitutionality. [Yakus]
2. Supreme Court upheld delegation to administrative officers of power to renegotiate war contracts to recover excessive profits. Court reasoned that specific standards to determine excessive profits weren’t necessary. [Lichter]
3. Supreme Court upheld delegation to Federal Home Loan Bank Board to issue regulations prescribing conditions that would allow a conservator to be appointed to take over a mismanaged bank. Court reasoned that standards weren’t required because regulations were not penal. [Fahey]
D. “Intelligible Principle” Doctrine
1. Congress may delegate the authority to establish sentencing limits for federal crimes to an independent commission. [Mistretta]
a) Reasoning based on “intelligible principle” doctrine – as long as Congress establishes an intelligible principle to which the commission must conform, assistance may be obtained from coordinate branches of government.
2. As long as Congress’s intent can be discerned from the language of the delegating legislation, the legislation will pass constitutional muster.
3. Unconstitutional Delegations:
a) [American Trucking] – Standards set by EPA were too vague. No intelligible principle could be found.
b) [Whitman] – Reverses American Trucking. The “intelligible principle” has to be apparent in the enabling, delegating legislation, not the rules established by the agency.
E. Application to Individual Rights and Liberties
1. Delegated powers will be construed narrowly when Constitutional rights are involved. [Kent v. Dulles]
F. State Delegations
1. Delegations to agencies are proper if:
a) Clear expression of legislative policy and reasoning for delegation
b) Sufficient standards to guide the agency
c) Adequate procedural safeguards
IV. Delegation of Judicial Powers
A. Agencies have some power to make rulings as long as they don’t violate individual constitutional rights.
B. Historically, the type of court allowed to hear the case was based on whether a “public” or “private” right was affected.
C. The identity of the parties has no bearing on whether or not the controversy may be heard by an agency court rather than an Article III court. Court somewhat abandons public/private distinction. [Union Carbide]
D. In cases where there is clearly a private right where parties are entitled to a jury trial, must go to typical Article III court. [Granfinanciera]
E. States typically ignore the public/private distinction altogether.
1. Agency may award damages in Landlord/Tenant cases. [McHugh]
2. Agency may decide traffic cases as long as imprisonment is not involved. [Rosenthal]
3. Criminal matters may be transferred to an agency with consent of the parties. [Davis]
F. Remedies and Penalties
1. Money damages
a) Agencies generally may award monetary damages.
b) Legislatures can delegate adjudication of statutory rights to agencies. [Vainio]
c) Enforcement of Damages
(1) Must start a lawsuit to enforce the award through court system.
(2) Award is prima facie evidence of the facts.
(3) Some states allow awards to be enforced as if they were judgments, with no further court steps necessary.
a) Generally allowed
b) No contempt though
3. Penalties and Fines
a) Civil fines and penalties very common
b) Criminal penalties not allowed though
A. Most agencies are empowered to investigate in order to enforce the rules
B. Voluntary (AKA Informal)
1. Voluntary production of documents to an agency constitutes a waiver of privilege. No selective waiver. [In re Qwest Communications]
1. No need for evidence of a violation; mere suspicion is enough
2. Inspections and Searches
a) Standard for administrative warrants: As long as search area is reasonable, probable cause is presumed. No evidence of a violation is necessary. [Camara]
b) In the school setting: Standard is reasonable suspicion, BUT search must still be reasonable in light of objectiv
rule-making and adjudication
(1) Opinions offered by general counsel for an agency in an adjudicatory proceeding are not rules. They have no future effect. [Paralyzed Veterans of America]
(2) Policy statements that have a future effect and are applied without regard to individual facts or circumstances are “rules” for purposes of rule-making. [Cordero]
2. Substantive/Legislative Rules
a) Agencies have power to create rules as long as there is a general rule-making provision in the enabling legislation. Can be implicit though in certain cases. [In re Permanent Surface Mining Regulation]
3. Nonlegislative Rules – policy statements, interpretive rules (only persuasive)
B. Legal Effect of Rules
1. Valid legislative rules have the same force of law as a statute.
2. An agency cannot violate its own rules EVEN to achieve justice. Must change the rule through appropriate procedures if they want something different. [Reuters, Ltd v. FCC]
3. Rules cannot be retroactive unless specifically authorized by statute. [Bowen v. Georgetown Hospital]
4. Legal Effect of Nonlegislative Rules
a) Agencies can re-interpret their own rules at any time. The agency’s interpretation will be given great deference. [Devon Energy]
C. Cost Benefit Analysis
1. All executive agencies must conduct a cost-benefit analysis on all major rules.
2. Not required in every case: For instance, Supreme Court did not require where statute contained a feasibility standard. [American Textile Manufacturers]
1. Publication of regulations give sufficient notice to all interested parties regardless of contrary statements by agency personnel. [Federal Crop Insurance]
2. If the rule isn’t published, it isn’t binding UNLESS party was aware of the rule by some other means.
E. Estoppel – Supreme Court has NEVER found an agency to be estopped. [Office of Personnel Management]
F. Rule Making Procedures
1. Two Types
a) Notice and Comment
(a) Notice of proposed rulemaking published in the Federal Register
i) Statement of time and place of proposed rulemaking
ii) Statement of legal authority relied upon
iii) Substance of proposed rule OR subject and issue involved
(b) Opportunity to comment
i) Now available online as well.
(c) Publication of final rule in Federal Register
(2) Exceptions to Notice and Comment
(a) Procedural or interpretive rules
(b) Good cause exists – notice and comment would be impracticable, unnecessary, or contrary to public interest
i) For instance, great deference will be shown to an agency when attempting to thwart terrorism [Jifry]
(c) Court cannot create new exceptions; that responsibility is on the legislature if more procedure is desired. [Vermont Yankee Nuclear Power]