Administrative Law Outline / Summary PDF

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1. History and Theorya. History i. Founding to 1875: No administrative regulation, only market control. ii. 1875–1930: Beginning of the Administrative State 1. State-level rate regulation of railroads, monopolies, and grain elevators to control monopolies. 2. First great federal regulatory agency: T...

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1. History and Theory a. History i. Founding to 1875: No administrative regulation, only market control. ii. 1875–1930: Beginning of the Administrative State 1. State-level rate regulation of railroads, monopolies, and grain elevators to control monopolies. 2. First great federal regulatory agency: The interstate commerce commission iii. 1932–1945: The New Deal Era 1. The Era (1) gave the president some powers of lawmaking and adjudication, and (2) increased the size and importance of “independent” regulatory commissions. iv. 1945–1965: The APA v. 1965–1980: The Rights Revolution and “Public Interest” Admin. Law 1. New agencies not focused on economic regulation, but health and safety 2. Constant criticism of admin. agencies: a. Consumer advocates: argued agencies were captured by firms they were supposed to regulate b. Welfare recipients wants more safeguards (e.g. SS, Medicare, etc) c. Economists and Business Leaders sought a large-scale reduction in size and power. 3. Changes during era include: (1) Courts extending procedural formalities like requirements of a fully documented record, (2) Expanded judicial review, and (3) several regulating agencies abolished. vi. 1980–Present: Pres. Administration and Cost-Benefit 1. Theme that regulation benefits must outweigh its costs beginning with Reagan Ex. Order 12,291 b. Theories of Regulation - Policy i. Common Problems Calling for Regulation 1. Accepted Economic Reasons a. Correct externalities (e.g. Steel causes pollutions. Individuals do not feel the effect. Regulation corrects this to prevent individual harm); b. Collective action problems (e.g. Companies pollute and do not care. Clean air and water regulation promotes public health). c. Compensating for Inadequate information (e.g. Consumer protection laws; financial disclosures by the SEC) d. Controlling monopoly power 2. Not-So Accepted Economic Justifications a. Controlling “windfall profits” b. Controlling “destructive” competition (i.e. businesses that set prices so low as to destroy other businesses) c. Alleviating scarcity

3. Non-Economic Justifications a. Re-distribution (e.g. SS, Medicare/Medicaid) b. Collective values (e.g. Natural parks and scenic value) c. Overcoming disadvantages (e.g. a caste system) d. Planning (e.g. city planning/Houston issues) ii. Regulatory Tools 1. Standards a. Design Standards: Defines the means. I.e. Require the use of a specific device in a particular matter. E.g. Seat Belts in Cars b. Performance Standards: Defines the end. I.e. Meet this level of need, but we do not care how. E.g. Emission standards 2. Screening or Licensing 3. Fees, Taxes, and Grants 4. Default Rules 5. Provision of Information 6. Cooperation, Moral Suasion, Technical Assistance 7. Price Controls c. Traditional Model i. (1) Authorizing legislation to regulate private person through rules or standards that limit agency discretion; ii. (2) Procedures must comply with legislative direction; iii. (3) Judicial review must be available to ensure accurate and impartial decisionmaking procedures that comply with legislative directive; and iv. (4) Agency process must facilitate the exercise of judicial review.

2. Separation of Powers a. Theories i. Functional (or practical) Approach 1. Emphasizes that the Constitution was designed to create a “workable” government. 2. Focuses on whether an administrative scheme undermines the proper functioning of any of the three branches. ii. Formalist Approach 1. Looks for clear lines, and tries to announce clear-cut rules, dividing the powers of the three branches. 2. Stresses the text and original understanding b. Nondelegation Doctrine – Legislative Powers i. The Doctrine 1. The nondelegation doctrine holds that Congress may not delegate legislative power to the President, an agency, or any other entity inside or outside of government. (See Modern Doctrine)

2. Purpose of the Doctrine: Preservation of liberty—make it difficult to make laws; democracy concerns; accountability; 3. Doctrinal Views: a. (1) The Constitution vests all legislative power in the Congress. As such, Congress cannot give this power to the executive as this violates separation of power principles. (e.g. Thomas, J. in Am. Trucking Ass’n) b. (2) Congress cannot vest too much discretion in an agency without delegating that legislative power. Congress must give an intelligible principle for the agency to follow. (e.g. Scalia, J. in Am. Trucking Ass’n). c. (3) When Congress enacts a statute granting rulemaking authority, it has exercised legislative discretion. (e.g. Stevens in Am. Trucking Ass’n). ii. Historical Foundation 1. Early Foundations a. Rule: Courts permitted to make rules under the NDD. i. Wayman v. Southard (1825) (Marshall, J.): Court upheld a statute granting rulemaking authority to the federal courts. b. Rule: The Contingency Rationale i. Field v. Clark (1892) (Harlan, J.): No violation of NDD because the action by the president required an event to occur before the president reciprocated a tariff. 2. Violations of the NDD a. Rule: A delegation of legislative power must not be so overly vague as to allow the agency unfettered discretion. There must be an intelligible principle or clearly defined guidelines for the agency. i. Panama Refining Co. v. Ryan (1935) (Hughes, J.): Invalidation of a provision of the National Industrial Recovery Act that authorized the President to ban interstate shipments of oil produce in violation of state law. 1. Reasoning: “the Congress has declared no policy, has established no standard, has laid down no rule. There is no requirement, no definition of circumstances and conditions in which the transportation be allowed or prohibited.” ii. Schechter Poultry Corp. v. United States (1935) (Hughes, J.): Invalidation of NIRA provision that granted the president the power to approve and, thus, make legally binding, codes of “fair competition” that would be submitted by private organizations. 1. Reasoning: This provision does not provide sufficient standards of administrative procedures. 2. Other Rules: a. Agencies may not create criminal regulations;

b. Congress may not delegate legislative power to private parties. iii. Note: This is the excessive delegation doctrine. Too much discretion in agencies. This is distinct from below and the power to regulate criminal matters iii. Modern Doctrine 1. Rule: Congress may delegate legislative power to executive agencies so long as the grant of power is not too discretionary or too broad. 2. Rule: When Congress confers decision-making authority upon agencies, Congress must “lay down by legislative act an intelligible principle to which the person or body authorized to [act] is direct to conform.” a. Whitman v. Am. Trucking Ass’n (2001) (Scalia, J.) (holding a provision directing the EPA to regulate t a level “requisite to protect the public health [with an] adequate margin of safety”). i. An intelligible principle means “sufficient, but not more than necessary.” ii. Congress must lay down the principle—agencies cannot cure an unlawful delegation of legislative power. iii. Concurrences: 1. Stevens, J.: Any power delegated to an agency is legislative. 2. Thomas, J.: Congress cannot delegate its legislative power to the executive, regardless of the presence of an intelligible principle. 3. CALI: To delineate an intelligible principle, Congress must do three things: (1) dictate the “general policy” to be executed; (2) designate the agency that is expect to execute the policy; and (3) specify the limits. Mistretta v. U.S. (1989). a. Granting of legislative power is prohibited, but Congress may grant policymaking discretion to agencies (Mistretta v. United States ) 4. Note: The agency may not initiate rulemaking to define its intelligible principle—congress must do so. See Whitman v. ATA 5. Generally Okay: Expertise a. “Necessary to protect the public health” ->> This is measurable 6. Generally not Okay: Common Sense Items a. Too short – Lack of definitions b. Private Industry c. Criminal Aspects d. “Fairness”  Not Measurable. iv. Delegations to Private Parties 1. Rule: Congress may not delegate its legislative power to private bodies.

a. Carter v. Carter Coal Co. (1936) (Sutherland, J.): Invalidated a regulation by a private organization stating: “This is legislative delegation in its most obnoxious form, for it is not even delegation to an official or an official body, presumptively disinterested, but to private persons whose interest may be and often are adverse to the interests of others in the same business.” b. Ass’n of Am. RR v. U.S. Dep’t of Transp (D.C. Cir. 2013) i. “Federal lawmakers cannot delegate regulatory authority to a private entity.” ii. Reversed on other grounds  S. Ct. said Amtrak is not a private entity. v. Nebraska Law 1. Neb. Const. art. II, sec. 1: a. The powers of the government of this state are divided into three distinct departments . . . and no person or collection of person being one of these departments shall exercise any power properly belonging to either of the others except as expressly directed or permitted in this Constitution.” i. Formalist approach to agencies. 2. Versus Federal a. Federal  Legislature must supply an intelligible principle b. Nebraska  Legislature must provide reasonable limitations and standards. 3. Cases a. Board of Regents v. Lancaster Cty. (1950) (Carter, J.) i. Rule: The legislature does not need to lay down strict rules that must be followed, but they may vest an agency with legislative power within reasonable limits with the exercise of judgment in carrying out the expressed purposes of an act. b. Lincoln Dairy Co. v. Finigan (1960) (Carter, J.) i. Rule: “The limitations of the power granted and the standards by which the granted powers are to be administered must, however, be clearly and definitely stated in the authorizing act.” ii. Rule: The legislature may not delegate authority to an agency where an act provides criminal penalties because the public has a right to know and have input in deciding crimes. iii. Note: This is the milk case whereby the director of agriculture may force compliance. Failure constitutes a criminal act. c. Yant v. City of Grand Island (2010) i. Rule: Reasonable limitations and standards may not rest on indefinite, obscure, or vague generalities, however, or upon extrinsic evidence not readily available.”

c. Adjudicative Powers of Agencies i. Traditional View - Public Rights v. Private Rights 1. Defined a. A Public Right dispute is a dispute between the government and a private party. b. A private right dispute is a dispute between two private parties. 2. Public Rights: Public rights disputes may be assigned to administrative agencies. a. Crowell v. Benson (1932): Adjudication of public claims is allowed since public claims, at common law, were barred due to sovereign immunity, therefore, assigning their adjudication to administrative agencies does not deprive article III courts of their traditional jurisdiction. 3. Private Rights: Appellate Review Model. Adjudication of private claims is allowed so long as questions of jurisdiction, questions of law, and the basis of an agency’s fact-finding is reviewed de novo in the federal courts on appeal. Crowell v. Benson a. Reasoning: Common law courts would often pawn out fact finding to masters and specialized individuals. Courts still do that with magistrates. 4. Subsequent History a. Marathon (1982): Challenge to the Bankr. Courts power to adjudicate all claims “arising in or related to” bankruptcy. Bankruptcy court could not adjudicate claims. Agencies can only adjudicate claims in three instances (1) territorial courts, (2) the military, and (3) cases involving public rights. b. CFTC v. Schor (1986): balancing test. When Schor brough his claim before the agency, he consented. Balancing all the factors including (1) the agency’s particularized area of law, (2) the fact that the CFTC’s order is only enforceable by a District court, (3) the factual decisions are reviewable and the legal decisions are reviewed de novo, and (4) the CFTC does not exercise normal district court powers. ii. Current Test (JURISDICTION) 1. May the agency adjudicate the claim. 2. First  Undisputed that agencies can adjudicate (1) territorial claims, (2) in the military, and (3) public rights. 3. THE ISSUE IS THE EXTENT OF ADJUDICATION IN PRIVATE CLAIMS. a. General Rule: Courts must ask whether the assignment of jurisdiction to a non-Article III adjudicator threatens the institutional integrity of the federal courts and intrudes on the judicial power.

b. Rule: In doing so the Court asks whether Congress assigned an adjudication of claims to an agency that is of the type traditionally within the jurisdiction of the Article III courts? i. Limitation: If Congress creates a right, it is not a right at common law. Accordingly, Congress may delegate the procedure by which that right is adjudicated. Northern Pipeline Construction Co. (1982). 1. (stating that in Crowell, Congress created a right to worker’s compensation insurance that was not available at common law, therefore, Congress may dictate the adjudication of those rights) c. Balancing Test: Under CFTC v. Schor, courts must weigh several factors to determine whether agency adjudication is proper. This includes, but is not limited to, (1) the extent of the law the agency applies, (2) the enforceability of the agencies orders, (3) whether the agency’s order is subject to judicial review, and (4) whether the agency exercises powers similar to the district court. See CFTC v. Schor (1986). iii. Right to a Jury 1. The Seventh Amendment permits a jury in all federal suits at common law where the amount exceeds $20. 2. Not all suits are suits at common law and the court must determine whether a suit is or is not. NLRB v. Jones & Laughlin Steel Corp. (1937). 3. When Congress provides a statutory right similar to a common law cause of action, the defendant is entitled to a jury. Curtis v. Loether (1974).

3. Controlling Agencies – Sep. of Powers (Part II) a. Legislative Control i. Prohibited Methods of Control by Congress 1. Legislative Veto a. What is it? Under a legislative veto, Congress reserves the power to reject agency action with a vote, depending on the particular provision, of both houses of Congress, by one house, or even by a single congressional committee. These are not presented to the president for signature or veto. b. Purpose: Legislative check on the exercise of legislative power by executive agencies. c. THESE ARE NOT ALLOWED. d. INS v. Chadha (1983) (Burger, C.J.) i. Facts: Immigration and Nationality Act provided that the either house may pass a resolution overturning the decision of the AG to deport aliens or not deport. AG suspended Chadha’s

suspension allowing him to remain. House passed a resolution overturning AG’s decision. ii. Holding: Amendment and repeal of statutes, no less than enactment, must conform with Art. I. iii. Reasoning: 1. Violates the Presentment Clause and Bicameralism a. The Presentment Clause, art I, §7, cl. 2,3 requires all legislation to be presented to the President before becoming law. b. Bicameralism ensures that legislation is carefully enacted and fully considered 2. The Constitution permits ONLY ONE house to act in four instances: a. Impeachment  House b. Trial  Senate c. Appointments  Senate d. Treaty Ratification  Senate 3. Notes from Supp. a. When the AG decided not to deport Chadha, he was executing the law. When Congress does such, they must comport with presentment and bicameralism because Congress has no power to execute a law— only make the law through their legislative power. iv. Dissent: (White, J.) 1. If Congress may delegate lawmaking power to agencies, then Congress should be able to retain a check on the exercise of their power. 2. Congressional Members Serving on Admin. Bodies a. Not Allowed. One person cannot serve in two branches. 3. Congressional Appointment a. Congress cannot appoint the officials serving on administrative agencies b. See Executive Section ii. Allowed Methods of Control by Congress 1. The Congressional Review Act a. Requires agencies to submit almost all regs to Congress before becoming effective; if a “major rule” (reg with an annual economic impact exceeding $100 million), Congress has 60 days to pass a joint resolution of disapproval before implementation (bicameralism) and then present it to the President for approval (presentment) i. This bill simply provides oversight and expedited review.

b. Of 48,000 rules submitted to Congress, Congress has only struck down one (OSHA’s “ergonomics rule” to prevent back injuries, carpal tunnel, and similar problems.) 2. Appropriations a. Some peculiarities like the CFPB whom receive funding from the earnings of the Federal Reserve System. 3. Oversight by Committees - Primary Method a. Appropriations Oversight (How they spend their money.) b. Substantive Oversight (How they decide on matters.) c. Government Operations/Efficiency Oversight 4. Casework and Constituent Services 5. Senate Advice and Consent b. Executive Control i. The Constitutional Source of Power 1. Vesting Clause a. “The executive Power shall be vested in a President of the United States of America.” Art. II, § 1. 2. Take Care Clause a. The President “shall take Care that the Laws be faithfully executed.” Art. II, §3. ii. By Appointment 1. The Appointments Clause a. The President “shall nominate, and by and with the Advice and Consent of the Senate, shall appoint . . . all other Officers of the United States, whose Appointments are not herein otherwise provided for, and which shall be established by Law: but the Congress may by Law vest the Appointment of such inferior Officers, as they think proper, in the President alone, in the Courts of Law, or in the Heads of Departments.” b. Appointment Powers: i. Principal Officers: Only by President with the advice and consent of the sent ii. Inferior Officers: Congress may vests power into: 1. The President 2. The Judiciary 3. Heads of Departments

a. “Departments” does not solely indicate executive department (e.g. state, treasury, defense), but means “a separate allotment or part of business; a distinct province, in which a class of duties are allotted to a particular person.” Free Enterprise Fund (2010) iii. Congress may not reserve appointment power into themselves. Buckley v. Valeo (1976) 1. Six-member FEC had president appoint 2, president pro tem appoint 2, and speaker appoint 2. The four appointed by Congressmen were declared invalid. 2. Employees vs. Officers (subject to appt. clause) a. “Employees are less functionaries subordinate to officers of the United States.” Buckley v. Valeo b. Officers “exercise significant authority pursuant to the laws of the United States.” Employees do not. Freytag v. Comm’r of IRS (1991). c. If Merely Collecting Data, then they are employees i. Officials who perform functions such as collecting information for, and making reports to, Congress are not necessarily officers and may be appointed by Congress itself in a procedure not contemplated by the Appointment Clause. Buckley v. Valeo 3. Principal vs. Inferior a. Examples i. Principal: Heads of all executive departments, and the members who head the independent agencies. Term may also include other high-level officials such as the deputy AG ii. Inferior: Officials who are subordinate to principal officers, but who have enough authority that they are not considered mere employees. b. NO BRIGHT LINE TEST: MORRISON USED THREE FACTORS, FEF USED ONE FACTOR c. The Morrison Test (Rehnquist, C.J. 1988) i. Rule: Inferior officers are: 1. (1) subject to removal by a higher executive branch official, (Removal) 2. (2) empowered by an act to perform only certain, limited duties, (limited tenure); and 3. (3) the office is limited in jurisdiction (limited jurisdiction) d. The Edmond Test – Free Enterprise Fund v. Pub. Co. Acct. Oversight Bd. (Roberts, C.J. 2010) (quoting Edmond (Scalia, J. 1997)) i. Rule: The Court will declare an individual an inferior officer if the officials work is directed and subject to close supervision by

an (principal) officer whom is appointed with advice and consent of the senate. 1. EDMOND DOES NOT GET RID OF MORRISON, BUT STATES THAT MORRISON’S...