Stolen Outline

Whoever controls the facts controls the reasons….whoever controls the reasons controls the law.

I. Control Over Agencies a. This is a clash between the President and Congress. Each side wants more control

over agencies because we live in an administrative state, and agencies exert a vast amount of control over many aspect of life.

b. Separation of powers concerns come into play here because the Constitution spells out specific duties and limits for both Congressional and Executive branches.

c. Legislative power versus executive poweri. SCOTUS is mainly concerned in separation of powers issues with whether the

government is following Constitutional procedures1. If Constitutional procedures not in play, pretty relaxed about it

d. Non-delegation doctrine prohibits excessive delegation of discretionary powers Constitutionally-delegated to Congress to federal agencies

i. BLL —Congress has not violated rule against delegating legislative powers if it sets down in law an "intelligible principle” to guide the agency in its exercise of discretion – narrow purpose and power to agency

1. Congress must say "here's what we want you to do, fill in the details"ii. An agency may not cure a lack of an intelligible principle by giving itself one…

if there is a delegation problem, Congress has to fix it— Whitman v. American Trucking

e. Legislative veto – Congress reserved power to reject agency action without a votei. Violates Bicameralism and Presentment clauses of Constitution (for

legislative, not executive action) and is unconstitutional – INS v. Chadha1. What about AG exercising authority and affecting Chadha’s legal

rights by deporting him?a. Executing law according to delegated authority so no NDD

violationf. Appointment

i. Principal officers are appointed by President with advice and consent of Senate — Appointments Clause

ii. Inferior officers may be appointed with advice and consent, or Congress can legislatively alter the process by placing their appointment with President alone, or Heads of Departments, or Courts of Law

iii. Default rule for all officers is by President with advice & consent of Senate unless Congress specifies otherwise in statute

iv. Types of jobs:1. Officers of the United States (subject to Appt. Clause)

a. Principali. High-level officials in Exec. Branch like cabinet

membersii. Heads of independent agencies

iii. No one in the hierarchy between them and the President

b. Inferior


i. Layer between them and the Presidentii. Independent counsel - Morrison

2. Employees (can be hired any way)a. Not able to exercise discretion or authorityb. Act “in aid of legislation”

i. Collect info, make reports to Congressv. Freytag —special trial judges exercise discretion & authority and are Officers

vi. Morrison v. Olson—Court looks at scope and duration of the officer’s position and the removal power of whomever to remove the officer to determine if the officer is a principal officer or inferior officer.

vii. Edmond—Court moved away from Morrison factors and looked exclusively at whether the officer in question is supervised by someone to determine if he’s a principal or inferior officer. If he is supervised by someone, he’s an inferior officer. If not, he’s a principal officer. Affirmed by PCAOB.

viii. How do you reconcile Morrison and Edmond?1. Sufficient to have a boss, but not necessary.

ix. Buckley v. Valeo —Congress may not participate in the appointment of administrative officials beyond advise & consent

1. Only Officers of the US may exercise significant authority2. Congress not named as a possible appointing authority in the clause3. Further, Court said FEC could not engage in enforcement functions

like rulemaking and bringing civil suits because 4 of the 6 members were appointed by Congress (not a valid appointing body)

x. Checklist 1. Does the official exercise authority pursuant to laws of the US?

a. If yes, Officer, and Appt. Clause applies2. Is the official a high-level official with significant policymaking

authority and little to no supervision save the President?a. If yes, Principal Officer, and must be appointed by President

w/ advice & consent of Senate3. Does official exercise authority only under substantial supervision by

higher-ranking officials within Exec. Branch?a. If yes, Inferior Officer, and Congress may specify appointment

or use default rule of Presidential appointment w/ A&C4. Does individual exclusively carry out activities not involving discretion

or policymaking (clerical or maintenance work)?a. If yes, Appt. Clause does not apply (not Officer)

5. Does the official act only in aid of legislative process such as performing research for members of Congress?

a. If yes, Appt. Clause does not apply AND Congress can control process of appointment

g. Removal i. Absent any Congressional action, President has right of removal at will


ii. Congress can impose statutory restrictions on removal like “good cause” —Morrison

1. Unless such removal restrictions impair ability of President to take care that laws are faithfully executed

iii. President retains right of removal at will over close Presidential aides and high-level officials, even after Morrison

1. At some point, President has to be able to remove people close to him who don’t share his policy views if they are helping make that policy

iv. Congress itself may not retain advice and consent power over removal of officials or participate in the removal of officials except through exercise of the impeachment power — Myers; Bowsher

v. Morrison v. Olson—The Court held that Congress may restrict the removal of an official exercising purely executive functions. This case greatly expanded Congress’s power to restrict the President’s ability to remove Exec. Branch officials.

vi. Weiner—Outlier case affecting judges and such1. The Court authorizes itself to infer a "for-cause" removal provision for

quasi-judicial positions2. Someone exercising a quasi-judicial position should have a for-cause

provision on their removal3. Want people in judicial positions to be able to function neutrally and

independentlya. Don't want a "Sword of Damocles" hanging over their head

that the President may just randomly remove them if he doesn't like their decisions

vii. Bowsher v. Synar—The Court held that the Comptroller General couldn’t exercise authority under the laws of the US and thus couldn’t establish potentially binding spending reductions.

1. Because of Congressional removal restrictions, Comptroller is not an Officer

viii. Free Enterprise (PCAOB) —PCAOB members subject to removal “for cause” by SEC commissioners who in turn could only by President “for cause”. Dual-layer “for cause” removal violates separation of powers.

ix. Independent Agencies 1. These agencies have boards rather than sole heads, so they won’t

change that much with presidential whims.2. The board members have fixed terms, and the President can’t remove

them except for cause.a. Should there be this type of limit on presidential power?

h. OMB & OIRA i. Presidential effort to control agencies.ii. Agencies must, by Executive Order, submit proposed regulations to

centralized review by Office of Management & Budget.


iii. Office of Information and Regulatory Review1. Group of bureaucrats who review other bureaucrats

iv. Centralized review of regulationv. Decides what shall not pass and what shall

vi. Everything must go through OIRA to be able to be published i. Article III Courts & Separation of Powers – Adjudication Within Agency

i. Agency adjudication raises a s eparation of powers problem.ii. Because Article III vests the judicial power in the Article III courts, it’s been

argued that administrative agencies usurp that power when they adjudicate cases.

iii. When Congress takes actions that affect people’s legal rights, it’s legislation and Congress must employ Constitutional procedures (Chadha).

iv. However, SCOTUS has approved a great deal of agency adjudication.v. When Congress tries to give a federal agency adjudicatory powers over a

matter traditionally within jurisdiction of Article III courts, then separation of powers issues arise.

vi. Private rights 1. Dispute between two private parties

vii. Public rights 1. Dispute between government and private party

viii. Crowell v. Benson — SCOTUS said public rights may be assigned to non-Article III courts for adjudication

1. Because public rights could be decided by government without Article III courts, Congress can assign their adjudication to whoever it wants

2. And because at common law claims against government were barred, assigning to admin agencies does not strip Article III courts of any traditional jurisdiction

ix. Crowell also allowed adjudication of private rights by admin agencies, but that is more suspect

1. Such as worker’s comp claims, or mandatory binding arbitration on private rights arising from a federal regulation — Union Carbide

2. Although SCOTUS has pretty much gone along with it in cases involving private rights disputes arising out of federal regulations

3. If the dispute is in a closely-regulated field4. MUST still be judicial review available

x. 7th Amendment Concerns1. 7th Amendment — suits at common law for more than $20 = right to

trial by jurya. Only applies to suits at common law at time 7th Amendment

was adoptedb. Statutory proceedings are not suits at common law…it was

unknown at time 7th was adopted — NLRB v. Jones & Laughlin Steel Corp.

xi. POLICY


1. Assigning facts to an agency might actually help preserve judicial power by not overwhelming courts with numerous controversies.

xii. Courts now use which weighs the threat to Article III values against the concerns that led to the assignment of adjudicatory authority to the agency.

1. Does the assignment of jurisdiction threaten institutional integrity of federal courts?

2. Courts will be most exacting when Congress assigns adjudication of claim traditionally with Article III courts to an agency.

3. Broader the scope of the agency’s jurisdiction, more likely there will be a violation of Article III.

j. POLICY STUFF i. Congress can't control everything in the modern legislative state

1. Doesn’t want toa. Want to be able to pass the blame to agencies

ii. Administrators have expertise that politicians don't haveiii. One theory says that the President is more limited than people think

1. A lot of his duties require the advice and consent of the Senate2. Take Care clause is in the passive voice

a. Faithfully executed by whom?b. Read in conjunction with the Opinions Clause

i. Art II, § 23. Perhaps it's their duty to carry out the laws

iv. Because President is ultimately responsible for the actions of officers, President should have greater power over hirings and firings

1. But competing interests in stability in governmentv. How powerful should the President be?

1. If the Framer's wanted a unitary executive (formal reading of Take-Care and Vesting clauses)

a. Then Bowers, Meyers, Free Enterprise2. If you want protection for some executive offices because they serve

particular goals (more functional approach to Vesting and Take-Care)a. Idea is to have President making some decisions, but also to

have diversity belowb. Take-Care clause is written in passive voicec. Humphrey's, Morrison

vi. One way for Congress to screw with the President is to screw with his appointing / removal power

1. Appointing independent councils, or officers2. President can't just randomly remove them3. Only for cause

vii. But then President can screw right back1. OMB 2. OIRA3. Budgetary control where allowed


4. Good or bad?a. None of the agency heads are elected - democratic review

i. Goodb. Promotes consistency - only OIRA examines everything

togetheri. Good

c. Just another opportunity for political meddling - political review of technical Acts - Congress already created review when it delegated authority

i. Badd. More government regulation over regulations - just dumping

more regulation and hoops to jump through into the lawi. Bad

viii. Why not have agencies adjudicate?1. Want a neutral magistrate2. Separation of powers keeps the people who charged you from

judging youa. Scalia is big on this - formal separation of powers as a further

protection of individual rights3. Judges are better to protect individuals

a. Agencies better with esoteric technological stuff?b. Judges use common law, rules of evidence, etc.c. Agencies might make up own rules that are less considerate of

individual rights4. When agencies adjudicate, under a statute, they make the rules

about how to bring a claim, discovery, how to settle disputes, etc.5. Did Congress decide to take power from judges because of politics?

a. Judges, because of education, elitism, etc., are not prone to decide in favor of plaintiffs

b. Agencies are more efficient so less court clogging6. Should we take power away like that? Should Congress make these

decisions?a. Formalism versus functionalism

i. Do we read the Constitution formally and rigidly, or go with the spirit of the Constitution?

k. EXAM i. Intelligible principle

1. If you're in favor of the statute, make it look rock-solid and narrow and focused

2. If you want the law overturned, make it look vague and murky3. Look for objective factors - are the words subjective or do they

constrain? Are they precise?a. Look at the adverbs "adequately assures", "material

impairment", "regularly exposed"


b. "Adequate" could be anything - adequate to whom? Adequate by which standard? Adequate means just barely enough or overdone?

ii. If the reasoning is sound, claim that person didn't have the power to make the decision or appointment

iii. When you have an appointments issue, work through two steps1. Is the person in question an officer of the United States?

a. The clauses apply if they are2. Are they an employee? Different route

iv. If the person is an officer, or ought to be (they have the powers as such), are they a principal or inferior officer?

1. Was the wrong process used to put them in the office?v. Court decides who is an officer of the US

1. Officers must be appointed in a certain way2. Which way depends on principal or inferior officer

vi. Look at the statute and determine the person's powers1. Then look at how they were appointed and attack that2. Is the person an employee? How much power do they have? A lot?

Perhaps they should be classed as officers then.3. Argue that appointment was done in the wrong way for that

particular officerII. Judicial Review

a. APA § 702i. Provides for judicial review of final agency action

1. “No other adequate remedy”a. If Congress has provided another remedy for the agency

action, it controls unless it is “not adequate’ii. Waives sovereign immunity

b. Reviewability i. Before a person can challenge something, they must be eligible to do so

1. Court must have jurisdictiona. APA does not grant jurisdictionb. See USC § 28

2. Must have standinga. An injury / caused by agency’s action / that is redressable

3. Mootness / ripenessii. There’s a presumption that judicial review of agency action is available. This

is so to protect individuals from arbitrary exercises of power. iii. Courts can only review legal issues NOT factual issues.iv. Ways to get judicial review

1. Statute grants it2. If no statutory grant, there is a presumption of review


a. Where a government agency may be violating the law, the court will presume Congress would want the court to review the case and do something about it.

v. When judicial review is not available – APA § 701(a)1. When statute precludes it

a. Such a preclusion does not preclude a Constitutional challenge to substantive statute itself – Johnson v. Robinson

i. Challenging Congressional decision, not agencyb. Otherwise, Congress could essentially amend the Constitution

by passing an unconstitutional statute and shielding it from judicial review

c. If Congress channels judicial review in particular ways, is there an implicit preclusion of review in other areas?

i. Maybe, but probably not…general presumption of review

ii. And importance of right of reviewiii. But if an agency’s organic statute is very explicit about

who can obtain review, then it can implicitly deny review to those not named – Block

1. Tough standard (clear & convincing evidence) to meet

2. Must be pretty plain2. When agency has complete discretion in its action

a. When statutes are drawn in such broad terms that there is essentially no law to apply

i. Not possible since there is no discernible standard against which to judge the legality of agency action

b. Courts are reluctant to allow judicial review of agency decisions involving when to regulate or whom to prosecute for violations within the agency’s jurisdiction

i. Heckler v. Chaney1. Rebuttable presumption against reviewability

when it comes to “prosecutorial discretion”2. However, if statutory standards constrain or

channel discretion, then reviewability is available

c. POLICY i. What about non-delegation doctrine with “no law to

apply”?1. Not all agency action involves delegated

legislative power2. Even though there may be no law to apply for

reviewability purposes, it doesn’t mean there


isn’t an intelligible principle guiding the agency’s exercise of discretion

3. What about decisions on non-enforcement versus decisions not to promulgate rules?

a. Parties have a procedural right to file for petition to promulgate rules – APA § 553 (highly deferential standard)

b. Not to participate in individual enforcement decisionsc. Agency decision not to promulgate rule is reviewabled. Statutory standards that govern agency action after a

judgment is made also govern the agency’s decision on whether to make a judgment in the first place — Mass. v. EPA

vi. Fitness & Ripeness1. Review only available if the issues are fit for judicial review and the

party seeking review would suffer substantial hardship (excessive expense to try and comply immediately) if the review was delayed until after enforcement —Abbott Lab. v. Gardner

a. If test not met, a party subject to a rule must wait to challenge the rule as a defense to enforcement, typically an agency-initiated enforcement proceeding - Abbott

2. Is the issue purely legal? Are there any facts or situations that would need to be resolved to decide on legality of a rule?

a. If not, probably fit for pre-enforcement reviewvii. POLICY

1. Reviewability and separation of powersa. A lot of issues in reviewability arise from separation of powers

because they concern whether Congress has the power to subject or exempt executive action to review in federal court

c. Agency Factfinding i. Sometimes agency facts are up for debateii. Sometimes the facts they find are critical and decide everything

1. Whether you're a citizen in an immigration hearingiii. Agencies control a lot because they control the factsiv. "Make any rule you want, but let me control the facts"

1. Keeps you under the Man's thumbv. Questions of Fact versus Questions of Law

1. If something is not a question for a court to decide but instead a question for an expert like a doctor, it is a question of fact

2. Agencies typically decide questions of facta. Everyday experience in the administration of the statute gives

the Agency experience in that areab. Not a court's job to second-guess agencies where they make a

finding of fact in the area they are tasked to administer3. Look at the statute…does the definition hinge on a fact issue or a legal

issue?


a. If you need to know what causes cancer because you are concerned about how not to get it, it's a fact question

b. If you're concerned about what causes cancer because you make toys and need to know in order to comply with statutes, then it's a question of law

4. If you don’t need to know any facts, then it is a question of law5. If you don’t need to know any law, then it is a question of fact

vi. Mixed Questions of Fact & Law1. Benzene Case

a. What causes cancer = fact question b/c you’d ask doctor, not lawyer

b. What is a significant risk = law question b/c only answer/definition that matters is in the statute

c. Does benzene pose a significant risk of causing cancer = mixed question

d. Standard of Review — APA § 706 i. Unless the agency’s organic statute specifies another standard, agency action

is determined by applying § 706ii. Arbitrary & Capricious standard

1. For review of questions of law2. Most deferential standard3. Applies to all agency action4. What info did the agency head have when he made his decision?

a. The absence of an explanation of a regulation is arbitrary and capricious.

b. If you disregard what Congress says is a relevant factor and impose your own, that's arbitrary and capricious — Mass. v. EPA

iii. Substantial Evidence (APA § 556 & § 557)1. For review of questions of fact (agency factfinding)2. Applies to formal adjudication and formal rulemaking3. Relevant evidence that a reasonable mind might accept as adequate

to support a conclusiona. Even if a court disagrees with an agency’s findings, it must

affirm them if they are reasonable.iv. De novo (almost never applies)

1. When agency procedures are inadequate or new issues properly arise for the first time on judicial review

v. Judicial review of an agency interpretation of a statute is done under the Chevron standard

Form of Agency Action APA Standard of Review

Formal Adjudication Substantial Evidence


Formal Rulemaking Substantial Evidence

Informal (N&C) Rulemaking Arbitrary & Capricious;Abuse of DiscretionNot In Accordance With Law

Informal Agency Action (Overton Park – Secretary just made a decision, not under 553 or 556/557)

Arbitrary & Capricious;Abuse of DiscretionNot In Accordance With Law

Agency Adjudication With Inadequate Procedures

Trial De Novo

New Issues After Non-Adjudicatory Agency Enforcement

Trial De Novo (of the new issues)

vi. Party challenging statute always wants SE-standard (least deferential)vii. Party defending always wants A&C (most deferential)

viii. When a review consists of agency policy decisions made in the course of formal adjudication – mix of SE and A&C?

ix. Remedy to challenging parties1. APA § 706 says to “hold unlawful and set aside” any agency action

that fails judicial reviewx. Review On The Record

1. Record that was before the agency is the exclusive basis for judicial review — Overton Park

a. Agencies are required to make decisions based on a consideration of the relevant factors, including alternatives to the agency’s proposal that are suggested by the record, without a clear error in judgment and under the correct legal standard — Overton Park

b. Reviewing courts shouldn’t look beyond record that was before agency at time of decision

c. Agencies may not support their decisions with information it didn’t have at time of decision or with post-hoc rationalization that were not offered at time of decision-making

2. Agencies must consider every aspect of the record, including the parts that fairly detract from the position taken—Universal Camera

3. An agency that is changing a previously-held policy is allowed to do so, but must supply a reasoned analysis as to why it has done so — State Farm

a. "An Agency's view of what is in the public interest may change, either with our without a change in circumstances. But an Agency changing its course must supply a reasoned analysis"


b. A court should not substitute its judgment for that of the agency, but it must evaluate the agency's reasons for the new rule

c. An important question is whether the election of a new president is a reasonable explanation for the rescission of a prior rule

4. Agencies must consider and give adequate response to all comments — Nova Scotia

5. Rescission of a rule is subject to same standard of review as initial promulgation — State Farm

xi. Hard Look Doctrine1. Another name for A&C review2. Two schools of thought

a. Courts should take a hard look at agency actionb. Agencies should take a hard look at the facts

3. Clear Error of Judgment—often called Hard Look Reviewa. Overton said court will review if clear error of judgment—very

difficult to prove this if plaintiff.b. Even if agency exercised discretion within statutory bounds

and considered all the relevant factors c. Courts have to become familiar with record and see if agency

decision is reasonable. d. No consideration of reasonable alternatives?

i. When is an alternative reasonable? e. It offers an explanation that runs counter to the evidence

before it?f. The rule is so implausible that cannot be ascribed to agency

expertise?xii. Hard Look Now

1. Agency action to revoke prior rulemaking can be overturned as arbitrary and capricious

2. A&C standard applies to the policy or discretionary determinations embodied in the adoption, modification, or revocation of legislative rules.

xiii. Procedural hard look versus substantive hard look1. Procedural

a. Idea that agencies must consider alternativesb. Respond to counter-argumentsc. Listen to affected interestsd. Offer detailed explanations of their conclusionse. Process goes to justice regardless of efficiency

i. Democratic values at the heart of the hard look doctrine

2. Substantive


a. The Court judges the alternative chosen by the agency to be so irrational that is must be ruled out (arbitrary and capricious)

b. In order to find against an agency you need clear error of judgment, irrational action, the opposite of feasible and prudent

c. Close judicial scrutiny on the meritsd. Courts usually do not condemn agency policy as faulty but will

remand because procedure was insufficient3. Courts must ensure that agencies took a hard look and applied their

expertise without substituting the court’s policy judgments for that of the agency

4. Judge Bazelon (oversee agency procedure)a. In cases of great technological complexity, the best way for

courts to guard against unreasonable or erroneous administrative decisions is not for the judges themselves to scrutinize the technical merits of each decision.

b. Rather, it is to establish a decision-making process that assures a reasoned decision that can be held up to the scrutiny of the scientific community and the public

c. The process of making a de novo evaluation of the scientific evidence invites judges of opposing views to make plausible sounding, but simplistic, judgments of the relative weight to be afforded various pieces of technical data

5. Judge Leventhal (oversee technical decisions of agencies)a. Our present system of reviewing assumes judges will acquire

whatever technical knowledge is necessary as background for decision of the legal question

b. If technical difficulties of reviewing assumes judges will acquire whatever technical knowledge is necessary as a background for decision of the legal questions

c. If technical difficulties loom large, Congress may push to establish specialized courts

d. The aim of the judges is not to exercise expertise or decide technical questions, but simply to gain sufficient background orientation

xiv. Overton Park 1. Overton’s Multi-step process

a. Agency acting within authority? Looks at relevant statute to determine the scope and terms of the agency’s authority—leads to determination of extent of agency’s discretion.

b. If agency has discretion to choose amongst alternatives, then court looks to see if agency considered relevant factors


c. Then decides if the weighing of the relevant factors and choice were arbitrary, capricious, and an abuse of discretion, or otherwise not in accordance with law.”

2. Impact of Overtona. Application of presumption of reviewability to informal

administrative action effectively converted what had been thought to be exclusively political and administrative matters into legal ones

b. Represented a significant innovation that substantially expanded the reach of administrative law over the workings of government

3. Agencies thought that by going informal, they could get away from all the paper trail requirements and such

a. Overton Park basically tells them to shove thatxv. Skidmore deference

1. Courts decide how much to defer to an agency’s interpretive decision based on

a. The thoroughness evident in its considerationb. The validity of its reasoningc. Consistency with earlier and later pronouncementsd. All those factors which give it power to persuade

xvi. Chevron1. Is the question at issue a question of fact or a question of law?2. Are we interested in what facts the agency gathered?

a. No? Then question of law3. Mead

a. Establishes Chevron Step Zero4. Chevron Step 0

a. Does Chevron even apply?b. Has the agency been given authority generally to make rules

carrying the force of law?i. What in this particular case gives this agency

authority?ii. Were they delegated authority under notice and

comment rulemaking?iii. Statute says agency has authority?

c. And was the interpretation claiming deference promulgated under that authority?

i. Did they try and exercise authority delegated to them under notice and comment rulemaking under an opinion letter?

ii. Held a hearing or official tribunal with witnesses & evidence

iii. Notice & comment rulemaking


iv. Some formal mechanism approved by Congressd. If the answer to either question is no, then on to Skidmore

deferencee. If the answer to both is yes, then on to –

5. Chevron Step 1a. Is Congress's intent clear?b. Have they directly spoken to the precise question at issue?c. Don't forget Footnote 9

i. The judiciary decides if Congress's intent was clear - footnote 9

ii. They employ traditional tools of statutory constructioniii. Kahn thinks that the footnote makes everything much

more muddied for agencies 1. They would prefer no footnote ("If Congress's

intent is clear…")d. Traditional tools of statutory construction

i. Statutory language, legislative intent, historyii. Plain meaning of text - Mass. v. EPA

iii. Statutory context – Brown & Williamsoniv. Avoid absurd / perverse results - Holy Trinityv. Policy judgments are a tool of construction

vi. Dictionary definitions - MCIvii. Overall purpose, canons, legislative history

viii. Interpretive canons of construction1. Statutes will be construed so as to avoid

Constitutional doubts2. Ambiguous statutes will be construed so as to

apply only in US territory3. Statutes will be construed favorably towards

Native Americans / African Americans / whoever

4. Statutes will not lightly be taken to intrude on power of the President or operation of state governments

5. Judicial review will be presumed6. Presumption against preemption of state law

e. "Battle of the dictionaries" to argue for ambiguityf. If Congress was ambiguous, then agency rejoices, because on

to –6. Chevron Step 2

a. Massive agency deferenceb. But be clear about the intent of Step 2

i. Does the court test the reasonableness of the interpretation against Congress's intent (Step 1 redux)?


ii. Or is it a form of "arbitrary and capricious" review? (most scholars go with this)

c. Did they reason through it using their expertise, or just use their own personal opinions?

7. Chevron is hard to apply because sometimes courts just look at the plain text of a statute and sometimes they bring in all kinds of outside stuff like legislative history (Brown)

xvii. Not entitled to Chevron deference when:1. Litigating positions for the first time2. Positions articulated for the first time in briefs3. Not entitled to deference insofar as the agency is acting as a

prosecutor4. Not if interpreting a statute that is enforced by many agencies 5. Not if interpreting the APA

xviii. The more formal a setting in which an agency interpretation is made, the more likely it is to merit deference

xix. Informally-rendered agency decisions are not entitled to Chevron deference — Christenen (opinion letters)

xx. If an agency is given Chevron deference under Step 1, the agency may not adopt an inconsistent interpretation — Brand X

1. But if under Step 2, can probably change mind and adopt another permissible construction


xxi. Policy Questions1. Is Chevron really that great?

a. Based on a “fiction” that Congress intended to leave interpretation up to agencies

b. Chevron is based on a huge legal presumptioni. That Congress actually thought about the issue at handii. And had a specific intent in mind

iii. Or meant to confer discretion on the agency2. Chevron replaces past cases with a universally applicable bright-line

rulea. Replaced case-by-case analysis with a presumption that

Congress wanted the agency to decide thingb. More efficientc. Less litigation and waste of court's time

3. What about Mead?a. Came along and screwed up Chevron’s easy to understand

ruleb. A complex and fine-grained inquiry into whether a fictional

intent is present or absent?


c. Leaves courts with more flexibility, but at the cost of certainty that Chevron provided

4. Chevron deference is just another tool, similar to tools of statutory construction

a. Judicial ways of interpreting thingsb. Gives judges enormous powerc. Does this statute require the adoption of canons of

interpretation?5. HYPO

a. One way of reading a statute violates the First Amendment, one way doesn't

b. Agency interpretation is close to violating readingc. Now Chevron deference is in conflict with a canon of

interpretationd. What role do the canons play in interpretation? Does it vary

by Justice?6. How ambiguous can a statute be before it's not clear?

a. Does everything have to be crystal clear? What about a little ambiguity?

7. Skidmore is inconsistent and harder to applya. Skidmore summed up all the prior cases

i. NLRB v. Hearst, etc.ii. Very much in line with Marbury but not very clear or

useful8. Chevron gives sense of structure or deliberate method9. Then came Mead, which fucked up everything again by adding a step

010. When should a court defer to an agency on what the law is?

a. A complete flip from Marbury v. Madison (which said courts determine what the law is)

11. Consistency with separation of powers yet still have advantages of administrative state

12. Pre-Chevron, cases were more all over than Lindsay Lohana. Courts are saying what the law is when they defer to agency

gap-fillingb. Congress delegated to agency to decide what the law is

13. APA § 706 says courts will decide all relevant questions of lawa. Doesn’t deferring to an agency via Chevron mean the agency

is deciding what the law is?b. Or has Congress delegated them that power?c. Or are the courts just saying a question of statutory

interpretation isn’t relevant?e. Substantial Evidence Test (Formal Proceedings)

i. APA § 706 requires reviewing court to look at the whole record


1. Not just parts that support agency’s decisionii. When an agency decision is based in whole or in part on credibility of a

witness, that decision is entitled to great deference because court only has paper statements and can’t evaluate demeanor

iii. Agency decision at the highest level that overturns an initial agency decision (like one by an ALJ) is subject to special scrutiny

1. ALJ’s initial decision is part of the record that appears before the court — Universal Camera

2. Because witnesses appear only before ALJ, an agency reversal of an ALJ poses special problems where witness credibility was a factor — Universal Camera

III. Agency Decisionmaking a. Ideal is for policymaking to be the result of reasoned decisionmaking, applying

agency expertise to the factors made relevant by governing law, including statutes and regulation

b. Permissible considerationsi. Defined by the organic statuteii. Usually allowed to take into account views of President / administration as

long as they are consistent with governing statutesiii. Factors not contemplated by the governing statute may not be taken into

account even if reasonable — Mass. v. EPAc. Clarity & Consistency

i. Ties in with Due Process concernsii. Must be considered with general standards of judicial review

1. Agency action must be taken pursuant to clear criteriaa. At odds with agency discretion

2. Soglin — university misconduct casea. “Misconduct” is to broad a standard

3. Hornsby — denial of liquor licensesa. Licenses that were approved or denied by board of aldermen

and mayor on an almost completely discretionary basis b. Must have ascertainable standards

4. Holmes — Housing authority casea. Must operate under ascertainable standards

5. Less clear in immigration casesa. In general, most courts lean towards allowing more discretion

—Fook Hong Mak6. Agencies can’t rely on “secret rulebooks” that aren’t available to the

public and decide the outcome of cases — Morton v. Ruiziii. Consistency

1. Agencies risk inconsistency in adjudication where each case is evaluated separately without a legislative rule governing the situation


2. An agency that announces a rule must apply the rule as written—it cannot modify the rule by implication like a common-law court — Allentown Mack

iv. POLICY 1. Courts impose certain limits on agency’s ability to make and to apply

policy2. Those limits offer the agency vast scope to make and apply

“reasonable” policies within the board authority delegated by constitutional, highly general, statutory language

3. In their effort to prevent agencies from using this broad authority unfairly, courts have developed certain “common law” principles

4. Agencies must a. Articulate their reasons for reaching policy judgmentsb. They must explain why they are applying those policies to

particular individualsc. They must apply those policies similarly to similar individualsd. When changing policies, they must take reasonable account of

the individual expectations that their previous policies created5. If you go too far with deference, the agencies are too authoritarian6. If the courts demand too much, paralysis by analysis

d. The Chenery Rulei. Agency decisions on judicial review will be evaluated on the reasons given by

the agency at the time the decision was madeii. An agency may not defend its rule on a new basis that it didn’t rely on

initiallyiii. An agency’s decisions are supposed to be the product of its expertise

1. And a court cannot affirm based on an argument that doesn’t apply that expertise to the particular case

2. Inconsistent with reasoned decisionmakingiv. Different from normal judicial standard where you can get to a good decision

by bad reasons—not so with administrative decisionsv. Relates to NDD?

1. Agency must ground the exercise of delegated discretion in reasons sufficient to withstand judicial review

vi. Chenery requires remand if it is determined the agency didn’t reason properly

1. Even if the agency will just reaffirm its decision with legally-sufficient reasons

vii. Agencies must follow their own rules — Arizona Grocery1. Even when those rules go beyond the rights afforded by statute or

Due Process — Vermont Yankee2. Any modification must be done in the same way the rule was

promulgateda. Promulgated via N&C means a new round of N&C to modify


3. Judicial review will be heightened because a court will ask not only if the agency engaged in reasoned decisionmaking but if there is adequate justification for the change

viii. Retroactive changes are highly disfavored — Bowen1. Primary retroactivity – generally not permitted

a. Changes the past effect of past conducti. At time X there’s a rule, then at time X+1 the agency

changes the rule and wants it to apply back to past conduct even though at the time you engaged in that conduct it wasn’t governed by the rule

2. Secondary retroactivity – usually OKa. Changes the future effect of past conductb. "Going forward, what we allowed then will now be subject to

THIS law…."i. Past rules don’t apply, even if you relied on it, but the

legal consequences for that reliance have not changedc. We want agencies to be able to adapt / correct past mistakesd. If we don’t permit, society would stagnate

ix. Res Judicata and Estoppel1. Mendoza:

a. You can’t re-litigate the same issue againi. Similar to collateral estoppel

b. Collateral estoppel does not apply to the federal government i. This enables them to create circuit splits.

x. Cost / Benefit Analysis1. Only allowed if governing statutes allow it2. Courts have not read general standard such as “reasonably necessary

or appropriate” as requiring cost / benefit analysis

IV. Choice of Decisionmaking Procedure a. In most cases the choice between rulemaking and adjudication is left to Congress or

to the agency. i. Rulemaking

1. Prescribes future patterns of conduct. A determination of general applicability.

ii. Adjudication1. Determines liabilities based upon present or past facts. It applies to

specific individuals or situations.b. Under certain narrow circumstances, Due Process requires adjudication.

i. When an agency regulates a party based on the particular situation of that party, Due Process requires that the party be given an adjudicatory hearing to present its version of the facts – Londoner


ii. Due process doesn’t require hearings when agencies make across-the-board decisions based on general conditions and not the particular situation of any particular regulated party —Bi-Metallic

iii. When a lone administrator is making legislative decisions that concerns Due Process (deprivation of property / liberty), it requires a hearing — Southern Railway

c. Adjudicative Facts i. Facts about the parties and their activities, businesses, and propertiesii. Usually answer the question of who did what, where, when, how, why, with

what motive or intentd. Legislative Facts

i. Do not usually concern the immediate parties but are general facts which help the tribunal decide questions of law and policy and discretion

e. EXAMi. The more and more people affected, the likelihood that a hearing is

Constitutionally required goes downii. If the source of the issue at hand is statistics, charts, etc., something that's

more broad, then again chances of a hearing being required goes downiii. But if based on adjudicative facts, then much more likely to require a hearing

f. When agencies make policy through a legislative rule, then the only issue (when the agency brings an enforcement action) is whether the regulated party violated the rule.

g. When agencies make policy in adjudication, they act much like common law courts-announcing new “rules” in the course of deciding the particular case before the agency.

h. Choice between adjudication and rulemaking is (barring something in the organic statute) a matter of discretion up to the agency — Wyman-Gordon / Bell Aerospace

i. Formal Rulemaking - APA § 556 & § 557 i. Formal rulemaking on the record with a hearing and evidence and other trial-

type proceduresii. Heavily disfavored (it’s a pain in the ass)

iii. Unless it is absolutely clear and unambiguous that Congress intended an agency to use formal rulemaking, courts will say that agencies can use informal (N&C) procedures per APA § 553 — Florida East Coast Railway

iv. “Magic words” required from § 553(c)1. Not enough to say “hearing”2. Or “on the record”3. Must say “on the record after agency hearing”

v. Even in formal trial-type rulemaking, there are savings clauses that allow the agency to not actually do it

1. § 556a. As long as no one is prejudiced, don't have to ask anyone to

show upb. And if they do show up, no cross-examination


i. Can ask for everything in written formc. Agency can take a risk and not allow full panoply of rights and

proceduresd. Will work if no one is prejudicede. However, big risk because someone can challenge and claim

they were prejudicedj. Informal Rulemaking — APA § 553

i. Notice & Comment1. Notice of the proposed rulemaking (Federal Register)2. Opportunity for public comment3. Agency consideration of comments4. Publication (Federal Register) of the final rule & a concise general

statement of the rule’s basis and purposeii. Most common challenges to notice as inadequate

1. Agency issues a final rule that is different from the proposed rulea. Logical outgrowth test

i. Final rule must be a logical outgrowth of the proposed rule

ii. May not materially alter the issues involved or substantially depart from the proposal

2. Agency relies on data not publicly available as part of the rulemaking process

iii. Proposed rule must provide sufficient information to permit informed “adversarial critique” — HBO v. FCC

iv. Failure to publish is failure to give notice and the rule is invalidv. To fail to disclose basic data for interested parties to see and comment on is

tantamount to ignoring interested party’s comments— Nova Scotiavi. Cure for inadequate notice is a new N&C period

1. POLICYa. Minor changes, or even substantial ones still within the

parameters of the initial proposal, will not result in new N&C period

b. Too impracticalc. Entire democratic basis for N&C would be seriously

undermined if we gave agencies a strong disincentive to ifnore comments

vii. Exceptions to § 5531. So long as the organic statue itself is silent, the APA says no notice &

comment for:a. Interpretative rules

i. Interpret existing legal duties without adding or changing those preexisting duties

b. General statements of policy


i. Informs public of agency’s policy views, but does not add to or alter existing legal rules

c. Rules of agency organization / procedure / practicei. But remember Morton v. Ruiz

d. Or if the agency finds good cause where it would be against the public interest to go through N&C

2. But must still publish in Federal Register a. If a rule is not properly published, may not be used against a

party having no actual notice of it — Morton v. Ruizk. Informal adjudication

i. Decisions made without rulemaking or adjudicatory processii. Do not result in rules / orders

iii. Usually policy decisions, such as granting or denying an application or petition informally

iv. No APA procedures, just compliance with Due Processv. Authorized by default when the statute doesn’t require more formal

proceduresvi. Overton Park —Secretary didn’t direct an order at any particular party, nor a

rule that could be followed in other cases…he just made a decisionvii. Only requires notice of decision and brief statement of reasons behind it —

APA § 555(e)l. Courts may not require procedures of agencies beyond those required by rules and

statutes unless there is a due process violation —Vermont Yankeei. If an agency itself provides for more rules over and above the organic statute

or APA, that’s fine and those are to be complied withm. POLICY

i. Rulemaking is a legislative process, not a judicial one…shouldn’t impose adjudicatory notions of procedural fairness on the rulemaking process

ii. Making agencies abide by common-law standards is unpredictable since courts may differ on what’s required

iii. Thus, agencies would have strong incentive to overproceduralize to avouid being overturned

iv. That would, in turn, eliminate the flexibility and informality Congress intended for agencies

n. Ex Parte Contacts i. Not prohibited in informal rulemakingii. Prohibited in adjudicatory proceedings

iii. Are agencies acting as little courts or little legislatures?iv. What about Overton Park?

1. Ex parte communications are not part of the record and can’t be reviewed

2. No one likes that idea3. SPLIT on what happens if ex parte communications happen during

rulemaking


a. Some courts require that documents and the substance of the contact be placed on the record for other interested parties to comment on —HBO v. FCC

b. Other courts say that only communications of “central relevance” should be put on the record — Action For Children’s Television v. FCC

i. HBO and Sangamon apply only to informal rulemaking involving competing claims to a valuable privilege

c. But what about Vermont Yankee?i. Ex parte not addressed in APA for informal rulemaking,

so can courts impose additional requirements?v. What about ex parte contacts from within government?

1. Contact by members of Congress or by President carry a lot of weight2. Might they drown out competing voices?3. But as head of Exec. Branch, doesn’t President have a right to control

(or at least influence) agency conduct?vi. Rules are different for adjudicatory proceedings

1. Due Process requires formal adjudication proceedings be free of ex parte contacts

o. Why Make Rules At All? i. Agency not required to re-litigate the same thing over and over – helps

agency efficiency — Petroleum v. FTC; Texacoii. Once you’ve made the rule, the only question becomes “was the rule

violated”1. If you proceed case by case with adjudication, then the agency is

forced to defend it every timeiii. Clearer notice for all parties of what is expected than a bunch of adjudicatory

decisionsiv. Rulemaking process allows interested parties more input via commentingv. Rules can be fairer to everyone since everyone has to obey upon

promulgation V. Due Process Concerns

a. 2 Step Processi. Triggering event —deprivation of property or libertyii. Then we ask what process is due

b. A party has a property interest in a government benefit, license, or job (new property) if the law creates an entitlement by prescribing criteria under which the benefit, licenses, or job will be granted or retained

i. Entitlement theory — whether law outside the Constitution creates an entitlement interest by specifying conditions under which the interest must be legally recognized — Board of Regents v. Roth

ii. A unilateral (one-way) expectation of receiving benefits does not confer a property interest or attach Due Process — Roth


a. Nothing in Roth’s contract or state law constrained government’s decision as to continued employment beyond initial contract term

iii. Note the same benefit or interest can vary from state to state, depending on statutes and state practices

1. Such as college teachers in state schools with tenure versus state schools with no tenure

a. Tenure creates property interestc. Property interest in government benefits — Goldberg v. Kelly

i. Such benefits are a matter of statutory entitlement for those qualified to receive them

1. Also note that they had already qualified to receive them2. It wasn’t an application process

ii. Also introduced “grievous loss” test (rejected by Roth)1. People on welfare desperately need welfare benefits and would

suffer grievous loss if they were cut offd. In the absences of an explicit entitlement, less formal assurances or state practice

may create an entitlement and therefore a property interest — Perry v. Sindermanne. If a statute provides procedural protections only, no entitlement exists.

i. Entitlements are created by substantive provisions of law, not proceduralf. “Bitter with the sweet” — Arnett v. Kennedy

i. Rehnquist argued that if a statute creates an entitlement but limits procedure to go with it, must take the bitter (procedural limitations) with the sweet (the entitlement)

1. Rejected by majorityii. Once it is determined that there is an entitlement, due process procedures

govern, not any limitations imposed by statuteg. If there is an entitlement, initial applicants have a property interest in receiving

themi. Applicants must be receive due process before rejection

h. Agencies may not impose legally-binding orders on a party without due process i. Order to pay a fine or some penalty is a deprivation of property

i. Deprivation of liberty i. Does it alter your legal status?

1. Say you’re charged but not convicted of shoplifting, and the local police chief circulates your photo to stores and says you’re shoplifter

a. Doesn’t change your legal status, so not a liberty deprivationb. Paul v. Davis

j. Determining What Process is Due i. Due Process Basics

1. Noticea. Advance notice of the issues and the time and place of any

hearings2. Oral Hearing


a. An oral hearing in advance of adverse government action-the oral hearing includes the right to present oral testimony and argument

3. Counsela. The right to counsel or some other trained aide

4. Confront the Evidencea. The right to confront the evidence against one’s position-this

includes the right to cross-examine adverse witnesses and the right to present evidence to undercut the government’s case

5. Neutral Decisionmakera. The right to a neutral decisionmaker who isn’t biased and who

hasn’t prejudged the case in advance of hearing it.ii. To determine when more process is due

1. Matthews v. Eldridge balancing testa. Weigh the injury to the citizen

i. How serious is the withdrawal of benefits to the citizen? The stronger the private interest is in being free from deprivation, the more procedure is required under due process.

1. NOTE: Procedural Due Process requires that government employees with an entitlement to continue employment be given a pre-termination hearing if the government agency wishes to fire them.

b. Look at the risk of error of the government making a mistakei. What was the risk of the government making a mistake

under current procedures? ii. The greater the risk of an erroneous deprivation, the

stronger the claim is to additional procedures.c. Look at the government’s interest and admin burden imposed

in having a hearing.i. What is the burden to the government of having to

hold a hearing? The government’s fiscal and administrative interests almost always favor minimizing the process

1. Thus factoring in costs could seriously undercut value of due process

k. General Notes i. Court holds extreme need benefits (welfare) to be more important than

benefits like disability1. Welfare recipients will be on the street without welfare, but disability

people were working…should have some money savedii. Very strong interest in continued government employment

1. Almost always requires pre-termination hearing


2. “Severity of depriving person of the means of livelihood”iii. Bias and prejudgment violate Due Process in and of themselves and are not

subject to Matthews balancing1. Bias and prejudgment make any hearing fundamentally unfair no

matter what extra procedures are followedVI. Executive Orders

VII. What powers do principal versus inferior officers have?VIII. Independent agencies

Documents

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