Administrative Law Outline PDF

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Professor Duryea...

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FALL 2019

ADMINISTRATIVE LAW PROF. CATHERINE DURYEA ST. JOHN’S UNIVERSITY SCHOOL OF LAW

INTRODUCTION ●

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Agency Definition ○ Gov entity that’s not Congress, the Courts, President, etc. ○ Look to whether the organization “wielded substantial authority independent of the President [or Congress, or the Courts]” (Citizens for Responsibility & Ethics in Washington v. Office of Admin) ○ Factors (1) Whether the organization can make rules or regulations (2) Whether the organization can make funding decisions (3) Whether the organization is merely administrative support ● Clerical or assistant like in nature ○ Disregard the text of the statute when determining if an organization is an agency ■ Following statute could lead to too many definitions of agencies ● Frustrates lawmaking ● Confusing ■ Even though the Office of Admin was included in the text of the statute, it wouldn’t make sense to include it b/c it doesn’t fit with the other ideas of agencies Rules Governing Agencies ○ Enabling Statute ■ AKA organic statute ○ Administrative Procedure Act (APA) Types of Agencies ○ Executive Department Controlled Agency ■ Typically lead by one individual appointed by the President who serves at their pleasure ■ Think DOJ, HUD, etc. ○ Independent Agency ■ Typically run by a Commission comprised of individuals with staggered terms that cannot have more than a simple majority of one party ■ Commissioners/heads of departments can only be fired for-cause ■ Think NLRB, etc. ○ Agencies w/in Agencies ○ State Agencies ■ Similar to the structure of federal agencies ■ Sometimes these are headed by elected officials and not the supervision of the governor ○ Federal Corporations ■ Think Amtrak ○ Military Agencies ■ Typically abide by different rules than other agencies

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Advantages to Agencies ● ●

Expertise Can focus in areas

Disadvantages to Agencies ●

Insolated

RULEMAKING ●

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Types of Rules ○ Legislative / Substantive ■ Subject to formal or informal rulemaking under APA ○ Non-legislative / Procedural ■ Not subject to rulemaking requirements under APA ■ Typically interpretative in nature ■ Example ● Policy statements ○ Formal ■ Governed by APA §556 & §557 ■ “On the record” rulemaking ■ Has cross-examination, witnesses, etc. ● Looks more like a trial than informal rulemaking ○ Informal ■ Governed by APA §553 ■ “Notice & comment” rulemaking Rulemaking Authority (Nat’l Petroleum Refiners Ass’n) ○ Merely b/c the enabling statute doesn’t explicitly say an agency can rulemaking, doesn’t mean the agency can’t rulemaking ○ Look to the legislative intent in the statute ○ If the text of the statute doesn’t explicitly bar rulemaking, it can be allowed ○ Judges typically error on the side of allowing rulemaking ○ [This case was pre-Chevron] An agency can always impose more procedure than is required ○ If it calls for informal rulemaking, it can impose formal rulemaking ○ If it says you don’t even need to rulemaking in this area, you can still self-impose it Advantages of Rulemaking

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All affected parties (or potentially affected) have the opportunity to submit evidence Protects the interest of “little guy” who may not be able to afford to effectively litigate Speedy & efficient Allows public to voice concern Leads to a high level of rulemaking Democratized Enhances political accountability Saves money Reduces inconsistencies ○ Limits discretion of ALJs No need to religitate issues Not limited to facts presented

Advantage of Adjudication ● ● ● ● ● ● ●

Allows agency to consider the facts of the case Gives individuals their day in court Clarifies rules Leads to more exceptions More insulated from public pressure Easier to determine best practices when looking at facts, not in the abstract Agencies can find their ideal plaintiff and choose when to bring a case

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Can be targeted in scope Prospective, not retrospective Case-by-Case Determination ○ Agency can use rulemaking to make determinations that are case-by-case if based on facts (Heckler v. Campbell) ○ Agency has wide discretion in rulemaking despite statute specifying otherwise (Brown v. Yuckert) ■ Interpretation just can’t be outside the bounds of the statute ■ Agency didn’t need to consider an individual’s age, education, & work experience when determining SSD disability even though the statute explicitly said that

Formal Rulemaking ●

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When it’s Required (FL E. Coast Ry. Co.) ○ Isn’t required unless terms like “on the record” are included in the enabling statute OR other language that makes it explicitly clear formal rulemaking is needed ■ Doesn’t necessarily need to be this exact trigger ■ If this isn’t present, default to informal rulemaking ○ Merely calling for a “hearing” doesn’t trigger formal rulemaking ■ There may be more requirements imposed in the enabling statute than just those in the APA ○ Question is whether Congress intended formal rulemaking ■ Chevron deference is provided to an agency’s interpretation Most agencies do NOT partake in formal rulemaking ○ Even the agencies that can only partake in formal rulemaking still rarely do it ■ If this is the base, most rules are through adjudication ○ Too time consuming ○ Congress pretty much doesn’t impose this on new agencies now APA§ 556 & 557 Agency must issue detailed findings of fact & conclusion of law when adopted (§557(d)(3)) A reviewing court applies “substantial evidence” standard in Judicial Review (see below)

Informal Rulemaking ● ●

Default unless “on the record” or similar is specified (FL E. Coast Ry. Co.) Requirements (APA §553) (1) Notice (2) Offers for comments (3) Publication of the final rule ● Notice of proposed rule must be published at least 30 days prior to the effective date of the final rule ○ Published in the Federal Register ● Courts cannot require anything beyond requirements of §553 (Vermont Yankee) ○ Can’t determine if rule is the best or proper rule ○ Can’t determine if all issues have been properly ventilated ○ BUT Congress can impose requirements that are a mix between formal & informal ○ Agency can self-impose requirements ■ Agencies are given a floor, not a ceiling ● These rules are likely procedural, so they may not need to go through notice & comment, but there could be argument they aren’t ■ BUT agency’s can self-impose requirements to solve constitutional problems ○ Why Vermont Yankee? 3

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■ Agencies would default to more procedure out of fear of reversal ■ Courts would become monday morning quarterbacks ■ Would undermine “notice & comment” rulemaking ● However, there are extreme circumstances where the Court can go beyond the APA ○ These circumstances are not laid out by the court ● Preamble is NOT required, but most rules have them anyway ○ Statement of basis & purpose is generally part of the preamble APA §553 ○ (b) >>> General notice of proposed rule making shall be published in the Federal Register, unless persons subject thereto are named & either personally served or otherwise have actual notice thereof in accournace w/law. Notice shall include ■ (1) statement of time, place & nature of public rule making proceedings; AND ■ (2) reference to the legal auth under which the rule is proposed; AND ■ (3) either the terms or substance of the proposed rule or a description of the subjects & issues involved ○ (c) After notice . . . the agency shall give interested persons an opportunity to participate in the rule making through submission of written data, views, or arguments w/ or w/o opportunity for oral presentation. After consideration of the relevant matter presented, agency shall incorporate in the rules adopted a concise general statement of their basis & purpose. ○ (d) The required publication or service of a substantive rule shall be made not less than 30 days before its effective date Why Notice? ○ Improves the quality of rulemaking by allowing the proposed rule to be tested by exposure to diverse public comment ○ Affords fairness to affected parties by giving them opportunity to express their views ○ Allows for more effective judicial review by enabling the rule’s critics to develop evidence in the record to support their objections A reviewing court applies “arbitrary & capricious standard” in Judicial Review (see below)

Notice ●

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Requirements (1) Inform parties of subject & issues at stake (2) Provide enough factual detail & rationale to enable the public to comment meaningfully (3) Must be clear & to the point (4) Must be reasonably specific (5) Provide time agency will be accepting comments (6) Instructions regarding where to file comments (7) List the legal authority under which the rule is proposed Adopting a Rule / Logical Outgrowth ○ Final rule must be a “logical outgrowth” from the notice provided (Shell Oil) ■ Whether the final rule “materially alters” the issues involved in the rulemaking or “substantially departs from the terms or substance of the proposed rule” (Chocolate Manufacturers Ass’n v. Block) ■ If not, the rule is invalid for failure of notice Arguments for / Rationale ○ Puts parties on notice of a proposed change so they have time to respond ○ Promotes fairness in rulemaking ○ Democratic argument ○ Rule created will ultimately be better when experts weigh in ○ Courts need to have a sufficient record to determine if the rule is valid

Disclosure (Portland Cement) 4

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Agencies can’t make rules based on data that’s unavailable to the public ○ Material must be comprehensible by those outside of the agency ○ Must be in a form that allows for meaningful comment ○ These requirements don’t violate Vermont Yankee b/c the public needs data to effectively comment during rulemaking (American Radio Relay League) ■ [Kavanaugh, dissenting] ● APA sets the maximum requirements for rulemaking, so by having these requirements we’re creating hirer standards for the agencies, which violates Vermont Yankee But agency doesn’t need to disclose: ○ Data that’s publicly available & the challenging party had responded to ○ Data that “supplements” what’s already been disclosed ○ Data that supports secondary reasons for an agency’s action

Comment Period ● ● ● ●

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APA is vague as to what is required by comments Minimal requirements in the APA Opportunity to comment must be “meaningful” No specific minimum of period of time is required ○ Must be “sufficient” ○ Typically 60 days, but courts have upheld short periods Any individual who declares themselves to be “interested” may comment Agency is not limited in what info it can consider during this period Option for electronic comments must be provided

Statement of Basis & Purpose (Nova Scotia) ● ● ● ● ●

Issued when a final rule is adopted Means that major issues are ventilated or considered Must be adequate ○ A “concise general statement” is enough Typically in the preamble Congress has statutorial required some agencies provide more detailed responses to major comments, criticisms, & alternatives offered during the comment period ○ One way to accomplish this is through lengthy preambles by agencies

Hybrid Rulemaking ● ●

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Just a blanket term for when Congress or President requires an agency to do something that is beyond the scope of APA §553 Types ○ Judicial hybrids ○ Statutory/legislative hybrids ■ Nat’l Environmental Policy Act (1970) ■ Regulatory Flexibility Act (1980) ■ Paperwork Reduction Act (1980) ○ Executive hybrids ■ AKA executive orders ■ Can’t create a private right of action ■ Supposed to be implementing law, not creating it ● Not always how this is used in practice ○ Rules that combine elements of rulemaking & adjudication ○ Rules that combine formal & informal process They are subject to judicial review 5

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Most of these hybrids are informal (or at least treated as informal) so they are subject to arbitrary & capricious review ■ Exception ● If the adjudication is like an adjudication [this won’t be on the test]

Rulemaking through Adjudication (RTA) ● ●

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“Choice between rulemaking & adjudication lies in the first instance w/in [Agency’s] discretion” (Bell Aerospace) What Types of Rules Agency Can and Cannot Make: ○ CAN announce policies/rules in adjudication of wide applicability ■ This is just common law/stare decisis ■ Allowed with some exceptions as to the type of rule ○ CANNOT make a rule that applies prospectively, but not to the party before the agency (Wyman-Gordon; overturning Excelsior Underwear) ■ However, applying a rule to the party before the agency leads to problems of notice & fairness for the parties ● Courts review agency damage awards through the lens of abuse of discretion (Epilepsy Foundation) ● Remedy to this is to generally not apply penalties to the party in the adjudication, but apply them going foreward (Bell Aerospace) (Chenery II) ○ CANNOT make rule that retroactively applies (never occurred/applied yet) ■ This makes sense as none of those parties would have proper notice; unfair ○ CANNOT make a rule through adjudication that reverses a rule developed through rulemaking (never occurred/applied yet) Agency makes rule(s) of wide applicability through an individual decision ○ This is just common law/stare decisis ○ Is allowed in all instances ■ There are protections against misaction by agencies Advantages of RTA (Chenery II) ○ Barring RTA would “stultify the administrative process” ○ Any “rigid” requirements limiting agencies to rulemaking would lead to inflexibility ○ This allows agencies to deal with specialized problems as they arise (

Ex Parte Communications ●

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An oral or written communication not on the public record with respect to which reasonable prior notice to all parties is not given, but it shall not include requests for status reports on any matter or proceeding covered by this subchapter (APA §551(14)) Government in the Sunshine Act (1976) ○ Impermissible ○ All communications must be on the record OR public notice must be given beforehand ○ If they still occur, they have to be disclosed on the public record ○ Applied to formal adjudications & all rulemakings Formal Rulemaking ○ Outright banned per §557 Informal Rulemaking (1) Is the ex parte communication impermissible? ● Prohibited in quasi-judicial informal rulemaking (Sangamon ) ● After NOPR is issued, officials shouldn’t make any ex parte communications with any affected parties (HBO v. FCC) ○ Ex parte comm’ns undermine principles underlying notice & comment ○ Deprives the court of a record 6

This thwarts “independent discretion in the public interest” of the commissioners ○ Reduces dockets to a sham ○ [pre-Vermont Yankee] ● “The problem is obviously a matter of degree, and the appropriate line must be drawn somewhere. In light of what must be presumed to be Congress’ intent not to prohibit or require disclosure of all ex parte contacts during or after the public comment state, we would draw that line at the point where the rulemaking proceedings involved ‘competing claims to a valuable privilege.’” (Action for Children’s Television) ○ Bars ex parte comm’n just in quasi-judicial settings ○ This doesn’t overrule HBO , but it seems like it actually is ● ALWAYS need to docket info that underlies an adopted rule (Costle) ● BUT rules shouldn’t be overturned from minor violations such as some ex parte comm’ns (Costle) ● Exception ○ Can have ex parte comm’ns with President, executive staff, Congressmembers, Nat’l Poll Ass’n, other agencies (Costle) ■ Distinguished from Sangamon ■ Benefits of ex parte comm’ns ● Openness of regulator to public ● Continued contact w/regulated industry leads to effective regulation ● Win support for new regulations ● Increase predictability ● Enhance exchange of info ■ Regarding comm’ns w/President, they’re extremely important b/c President oversees the Executive Branch (and ∴ agencies) ● President can bring parties together ● President needs to make sure agencies are consistent in their actions ● President’s policies need to be considered ■ Still may be important to document some of these comm’ns and in some instances, it may be required by statute ● Agency has discretion regarding which “oral communications are of such central relevance that a docket entry for them is required” ● BUT if this is relied on in the decision, then it must be part of the record ○ Agencies can ultimately make their own rules, so they have some leeway here (Costle) (2) If the ex parte communication is impermissible, will the rule be overturned because of it? ○ Test to Overturn Rule Due to Ex Parte Comm’n (DC Federation of Civil Ass’n v. Volpe ) (1) Content of the pressure on the agency is designed to “force [the agency] to decide upon factors not made relevant by Congress”; AND (2) Determination must actually be affected by “those extraneous considerations” Why No Ex Parte Comm’ns? ○ They deprive parties of a meaningful opportunity to participate by not giving them notice of the matters considered by the agency ○ Considering ex parte comm’ns violate an agency’s obligation to make its rules based on the relevant matter presented during the comment period ○ Receipt of ex parte comm’ns violates requirement that judicial review be based on whole record before the agency ○

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Basic fairness

Exempt Areas ●

35% of “major” rules do not go through notice & comment as they fall into an exemption

Subject Matter Exemption ● ● ●

Look at the specific agency regulations and/or Congressional statute No longer likely going to be a winning argument Types ○ Military & foreign affairs ■ Agencies get wide deference when proposed rules touch on this area ○ Matters relating to agency management or personal, or to public property, loans, grants, benefits or contracts ■ Generally waived by Agencies ● This was b/c it was so broad so Congress was going to intervene, so the agency preemptively acted ● Once it was waived, the Court refused to give agencies this power again ■ Exempted when the rules affect the agency themselves ■ A huge group of exceptions ■ Compromise provision

Good Cause Exemption ●

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Agency makes this judgement on its own ○ It decides why it isn’t going through notice & comment ○ If challenged, it gives its reasons & explanations Procedural Element (APA §553(b)(B)) ○ Whether the Agency expressed the substantive element effectively Substantive Element ○ Rulemaking is: ■ Impractical, OR ● Likely to be allowed if announcing the rule before its adoption would frustrate the rules purpose ○ i.e. price controls b/c it would lead to people jacking up prices ■ Unnecessary, OR ● If decision involves a technical amendment that isn’t of public concern/doesn’t alter citizen’s rights & responsibilities ● ‘No one is going to challenge the rule anyway’ ■ In the public interest ● Delay in the the rule would cause the public harm/worsen the problem ● Emergency type example ● Public health & safety doesn’t meet this exception ● Needs to be drastic, urgent need ○ Airline safety after 9/11 attacks ○ Mere deadline to meet a statutory deadline may not be enough (Mack Truck) ■ If agency isn’t going to meet a deadline, they can issue an interim final rule (IFR) ● There’s a fight over whether IFRs are just actual rules

Procedural Rule Exemption ●

No single test to distinguish a procedural from substantive rule ○ Some tests (none are definitive) ■ Batterton T  est 8

Critical features of the procedural rule exemption is that it covers agency actions that do not themselves alter the rights or interests of parties, although it may alter the manner in which the parties present themselves or their viewpoint...