ADMINISTRATIVE LAW

PROFESSOR ADLER SPRING 2010

SECTION I: INTRODUCTION..........................................................................4
GENERAL BACKGROUND.....................................................................................4
Functions of Agencies......................................................................................... 4
Agencies Generally............................................................................................. 4
Statutes............................................................................................................... 4
New Deal and the APA........................................................................................ 5
The Administrative Procedure Act (1946, post New Deal).................................5
Sources of Challenging Agencies.......................................................................5
NON-DELEGATION DOCTRINE.............................................................................5
Language and Meaning...................................................................................... 5
Open Texture of Law (H.L.A. HArt)....................................................................5
Clarity and Constitutionality............................................................................... 6
A.L.A. Schechter Poultry Corp. v. US (SCOTUS, 1935)................................................................6
MISTRETTA V. US (SCOTUS, 1989)..............................................................................................7

SECTION II: ADJUDICATION..........................................................................7

THE ADMINISTRATIVE PROCEDURE ACT (1946)................................................7
Definitions........................................................................................................... 7
Adlers Clarifications.......................................................................................... 8
Roadmap of On-the-Record Adjudication Under the APA................................8
Formal and Informal Procedures......................................................................10
CONSTITUTIONAL CONSTRAINTS: PDP............................................................11
Central Themes in Due Process Jurisprudence................................................11
Judge Friendlys Elements of a Fair An unbiased tribunal...............................11
General Framework for PDP Questions............................................................12
GOLDBERG v. KELLY (SCOTUS, 1970).......................................................................................12
BOARD OF REGENTS OF STATE COLLEGES v. ROTH (SCOTUS, 1972).................................13

Liberty.............................................................................................................. 14

PERRY v. SINDERMANN (SCOTUS, 1972).................................................................................15

CLEVELAND BOARD OF EDUCATION v. LOUDERMILL (SCOTUS, 1985)...............................15
MATHEWS v. ELDRIDGE (SCOTUS, 1976).................................................................................16

Cost Benefit in General..................................................................................... 16

APA CONTRAINTS: FORMAL ADJUDICATION....................................................17
Administrative Law Judges............................................................................... 17
Adjudicative v. Legislative Facts.......................................................................17
ALJ and Administrator/Commissioner..............................................................17
Federal Statutory Hearing Rights....................................................................17
Process of Formal Adjudication........................................................................17

SEACOAST ANTI-POLLUTION LEAGUE v. COSTLE (1st CIRCUIT APPEALS, 1978)...............18

Under 556(d), you have a presumptive right to cross-examination................18

EPA Violation of 556(e)................................................................................... 19
Ex Parte Contacts............................................................................................. 19

UNITED STATES v. FLORIDA EAST COAST RAILWAY (SCOTUS, 1973)..................................19

RICHARDSON v. PERALES (SCOTUS, 1971).............................................................................19

APA CONTRAINTS: INFORMAL ADJUDICATION................................................20

PENSION BENEFIT GUARANTY CORP. v. THE LTV CORP. (SCOTUS, 1990)...........................20

555 Governs Informal Adjudication................................................................20

CALIFANO v. YAMASAKI (SCOTUS, 1979).................................................................................21

SECTION III: RULEMAKING.......................................................................21

CONSTITUTIONAL CONTRAINTS: PDP..............................................................21
LONDONER v. CITY AND COUNTY OF DENVER (SCOTUS, 1908)..........................................21
BI-METALLIC INVESTMENT CO. v. STATE BOARD OF EQUALIZATION OF COLORADO
(SCOTUS, 1915)...........................................................................................................................22

APA CONSTRAINTS: FORMAL RULEMAKING....................................................22

553: RULEMAKING only applies to substantive legislative rules................22
Types of Rules................................................................................................... 22
Adjudicatory v. Legislative Decisions................................................................23

WIRTZ v. BALDON ELECTRICT CO. (DC COURT OF APPEALS, 1963).....................................23

Violation of 556(d)........................................................................................... 23
Formal Rulemaking v. Formal Adjudication......................................................23
APA CONSTRAINTS: INFORMAL RULEMAKING (I.E. NOTICE AND
COMMENT)........................................................................................................ 23
Procedures for IR.............................................................................................. 23

AUTOMOTIVE PARTS & ACCESSORIES ASSN v. BOYD (DC CIR., 1968)...............................23

NATL TIRE DEALERS & RETREADERS ASSOC. v. BRINEGAR (DC CIR., 1974).....................24
MOTOR VEHICLE MANUFACTURERS v. STATE FARM (SCOTUS, 1983)................................24

706(2)(a) Arbitrary and Capricious Review..................................................24

PACIFIC STATES BOX & BASKET v. WHITE (SCOTUS, 1935)..................................................24

UNITED STATES v. NOVA SCOTIA FOOD PRODUCTS CORP. (2nd CIRCUIT APPEALS, 1977)
......................................................................................................................................................25
VERMONT YANKEE NUCLEAR POWER v. NATURAL RESOURCES DEFENSE COUNCIL
(SUPREME COURT, 1978)..........................................................................................................25

For IR, theres no ban on ex parte contacts.....................................................26

ASSOCIATION OF NATIONAL ADVERTISERS, INC. v. FTC (DC APPEALS 1979)....................26

THE ADJUDICATION-RULEMAKING CHOICE..............................................26

i.e. whether or not to have a legislative rule....................................................26
CHOICE TO HAVE A LEGISLATIVE RULE...........................................................26
Legislative Rule................................................................................................ 26
HECKLER v. CAMPBELL (SCOTUS, 1983).................................................................................27
NATIONAL PETROLEUM REFINERS v. FTC (DC APPEALS, 1973)..........................................28
AIR LINE PILOTS ASSN v. QUESADA (2nd CIRCUIT APPEALS, 1961)...................................29
US DEPT OF AGRICULTURE v. MURRAY (SCOTUS, 1973)......................................................30

Legal Constraints on Legislative Rules............................................................30

CHOICE NOT TO HAVE A LEGISLATIVE RULE..................................................30

SECURITIES & EXCHANGE COMMISSION v. CHENERY CORP. (SCOTUS, 1947)..................30

Rule v. Precedent.............................................................................................. 31

BOWEN v. GEORGTOWN UNIVERSITY HOSPITAL...................................................................31

MORTON v. RUIZ (SCOTUS, 1974).............................................................................................31
AMERICAN MINING CONGRESS v. MINE SAFETY & HEALTH ADMINISTRATION (DC
APPEALS, 1993)...........................................................................................................................32

Interpretive Rules............................................................................................. 32
Legislative Rules v. Interpretive Rules.............................................................32
Interpretive Rules & Policy Statements............................................................33

SEPARATION OF POWERS............................................................................33
CONGRESSIONAL AND PRESIDENTIAL CONTROL OF AGENCIES..................33
THE LEGISLATIVE VETO..................................................................................... 33
INS v. CHADHA (SCOTUS, 1983)...............................................................................................33

APPOINTMENT AND REMOVAL..........................................................................35

BUCKLEY v. VALEO (SCOTUS, 1976).........................................................................................35

Appointments Clause (Art. II, 2).....................................................................35

RECAP:.............................................................................................................. 36

BOWSHER v. SYNAR (SCOTUS, 1986).......................................................................................36

HUMPHREYS EXECUTOR v. U.S. (SCOTUS, 1935)..................................................................38

MORRISON v. OLSON (SCOTUS, 1988).....................................................................................39

EXECUTIVE ORDERS AND REGULATORY REVIEW...........................................40

Overview........................................................................................................... 40
Does the President Have the Executive Order Power??...................................41

YOUNGSTOWN SHEET & TUBE CO. v. SAWYER (SCOTUS, 1952)..........................................42

What is the Effect of This Power?.....................................................................42

Rulemaking....................................................................................................... 42
706(2)(a): Arbitrary and Capricious Challenge................................................42
Adjudication...................................................................................................... 42
EXECUTIVE ORDER 12866 Cost Benefit Order............................................43
INFORMAL CONTROL......................................................................................... 43

SIERRA CLUB v. COSTLE (DC Circuit 1981)..............................................................................43

DC FEDERATION OF CIVIL ASSOCIATIONS v. VOLPE (1970s)...............................................44

SECTION VI: JUDICIAL REVIEW..................................................................44

SCOPE OF REVIEW.............................................................................................. 44
APA PROVISIONS............................................................................................. 44
Jurisdiction........................................................................................................ 45
CHEVRON, USA v. NATURAL RESOURCES DEFENSE COUNCIL (???, 1984)........................45
INS v. CARDOZA-FONSECA (1987)............................................................................................46
FDA v. BROWN AND WILLIAMSON TOBACCO CORP. (SCOTUS, 2000)..................................46
US v. MEAD CORP (SCOTUS 2001)............................................................................................47
CITIZENS TO PRESERVE OVERTON PARK v. VOLPE (SCOTUS, 1971)...................................48
NLRB v. HEARST PUBLICATIONS (SCOTUS, 1944)..................................................................48
Universal Camera Corp. v. NLRB (1951)....................................................................................49

REVIEWABILITY, TIMING, AND OTHER THRESHOLD ISSUES.........................49

Threshold Issues............................................................................................... 49
Cause of Action................................................................................................. 49
Jurisdiction........................................................................................................ 49
Sovereign Immunity.......................................................................................... 49
Reviewability under APA................................................................................... 49
Framework for Reviewability........................................................................... 50

JOHNSON v. ROBISON (SCOTUS, 1974)....................................................................................50

HAMDI v. RUMSFELD (SCOTUS 2009)......................................................................................51
WEBSTER v. DOE (SCOTUS, 1988)............................................................................................51
HECKLER v. CHANEY (SCOTUS, 1985).....................................................................................52
MASSACHUSETTS v. EPA (SCOTUS, 2007)...............................................................................53
FRANKLIN v. MASSACHUSETTS (SCOTUS, 1992)...................................................................53

RIPENESS: FITNESS AND HARDSHIP................................................................54

ABBOTT LABS v. GARDNER (SCOTUS, 1975)...........................................................................54

TOILET GOODS ASSN v. GARDNER (SCOTUS, 1965)..............................................................55

SECTION I: INTRODUCTION
GENERAL BACKGROUND
FUNCTIONS OF AGENCIES
Regulating Markets (SEC, NLRB)
Health and Safety (OSHA, NHTSA, FDA)
Social Welfare (SSA, NIH, VA)
Financial System (Fed. Reserve, FDIC)
Environment (EPA)
Physical Security (Military Agencies)
AGENCIES GENERALLY
o Hard to give a good description of what an agency really is
o Picture of fed government that there are three branches of government is not a good
one
o Its better to think of agencies as NOT in executive but as independent
entities separate from the executive
Individual entities with legal status but outside of the branches set up
by the Constitution
o Each constitutional branch has control mechanisms over the agencies
Congress statutory control; appoints agency heads (gives consent);
lots of informal control
President main role in agencies; sometimes appoints agency heads
on his own
- Executive agencies heads removable at will
- Independent agencies heads removable for cause
- Executive order power
Judiciary judicial review
- APA creates general right to go to court to challenge agency
actions
o Two chief ways agencies exercise coercive power over individuals
o Adjudication PDD and ADA constraints
o Rulemaking PDD and APA constraints here, too
o APA Definition of Agency: 551(1) - agency means each authority of the Government
of the United States, whether or not it is within or subject to review by another
agency, but does not include
(A) the Congress;
(B) the courts of the United States;
(C) the governments of the territories or possessions of the U.S.;
(D) the government of the District of Columbia;
or except as to the requirements of section 552 of this title
(E) agencies composed of representatives of the parties or of representatives of
organizations of the parties to the disputes determined by them;
(F) courts martial and military commissions;
(G) military authority exercised in the field in time of war or in occupied
territory; or
(H) functions conferred by sections 1738, 1739, 1743, and 1744 of title 12;
chapter 2 of title 41; subchapter II of chapter 471 of title 49; or sections
1884, 18911902, and former section 1641(b)(2), of title 50, appendix;
Internal Structure
o Headed by a single administrator (EPA, IRS)

o
o

Headed by a board of commissioners (FTC, SEC)

Adjudication and rule making are two ways that agencies make legally
binding decisions

STATUTES
Organic Statute (this isnt a legal term) sets up the agency
o Specifies procedures, states goals, and gives agency mission
o i.e. Food Drug and Cosmetic Act (FDA), Occupational Safety and Health Act
(OSHA), Clean Air and Clean Water Act (EPA), Motor Vehicle Safety Act
(NHTSA)
Crosscutting statutes
o Applies to all bodies falling with the definition of an agency bind across the
board
o i.e. National Environmental Policy Act (NEPA) says that whenever an agency
takes an action which has an effect on the environment, it must do certain
things; also FOIA and the APA
NEW DEAL AND THE APA
New Deal led to an increase in the size of the federal government and lots of new
agencies, APA created in 1946
Time of huge jurisprudential change in Con Law; Switch in Time which occurred
around 1937
Until 1937 - struggle b/w Pres Roosevelt and Court about constitutional legitimacy of
New Deal measures
Pre-1937: 3 major constitutional norms aggressively enforced by Supreme Court:
o Substantive Due Process - prohibits substantively arbitrary, unreasonable
state action; major constraint on regulations
o Commerce Clause (Art. I, 8) seen as limited power because of Lochner
categorization
o Non-Delegation Doctrine
Legitimacy of national, regulatory admin state open to serious question
Post-1937 these 3 challenges disappear, not enforced Courts much more
deferential
o Schechter is the only case found to violate non-delegation clause.
o SDP Court hasnt struck down ordinary economic regulation post-1937
o C.C. broader construction/increased scope; Court sustained national
statutes under the power
APA and PDP claims new way to limit agency decision-making
o APA specifically enacted to fill the trench thats left in the wake of these
constitutional changes
Emergence of due process cases an important category of constitution litigation
directly relates to government activism
THE ADMINISTRATIVE PROCEDURE ACT (1946, POST NEW DEAL)
Catch-up statute trying to provide law to cover legit agency practices that were
already growing up
Fairly detailed code only for formal, on-the-record agency hearings, through which
many agencies enunciated policy as well as enforced the law until the 1960s.
APA has many fewer for adopting prospective rules gap remains unfilled despite
rulemaking importance
SOURCES OF CHALLENGING AGENCIES
5th and 14th Amendment Due Process

 APA
Other statutes that limit how the agency can engage in adjudication or rulemaking

NON-DELEGATION DOCTRINE
***No Longer Enforced***
LANGUAGE AND MEANING
Article I, 1: All legislative Powers herein granted shall be vested in a Congress of the
United States
Prohibits Congress from delegating away its legislative power and regulates how
much discretionary authority Congress may delegate to an agency
OPEN TEXTURE OF LAW (H.L.A. HART)
Every statute has a zone of open texture
National Parks Statute 1: No vehicle may be taken into any National Park; National
Park Service (NPS) is empowered to fine.
o Determinate statutory guidance
o No constitutional problem with Art. I 1
National Parks Statute 2: The NPS shall ensure that parks remain clean and quiet;
NPS is authorized to issue rules and impose fines on violation
o Indeterminate statutory guidance
o This could be problematic because of delegation
However, vehicle is still a problem in Hypo 1
o Hypo 1 has an indeterminate boundary area when it comes to the definition
of a vehicle (do roller skates and toy motor cars count?), but there is a core
of determinacy where the statute clearly applies (cars, buses)
CLARITY

AND

CONSTITUTIONALITY

A statute is unconstitutional under Art I, 1 if it has an unjustified degree of

indeterminacy. (This is still a doctrine, but its no longer enforced)
Language is determinate when ordinary speakers would not reasonably disagree on
the meaning
Because everything is indeterminate to some degree, we should think of determinacy
in terms of the core area, where there are clear applications, rather than the boundary
Its difficult to determine whether something has an unjustified degree of
indeterminacy
Pros and Cons of Indeterminacy
o PROS
Agency can use its expertise
More flexible for the agency; the cost of changing legislation is high
Agency can flush out standards through adjudication
The legislature is captured by powerful special interest groups
o CONS
Congressional expertise
The agency may be captured by interest groups
Congress is more representative than the agency of majoritarian
characteristics
Statutory specificity gives people notice

 Potential Sources of Statutory Interpretation (many of these are contested)

o Ordinary meaning of the language
o Dictionary (Hart argues that this is bad because it crowds out all
indeterminacy and thus may be contrary to the underlying goals of the
statute; this is also using language to resolve the discrepancy in language)
o Legislative History
o House/Senate committee reports
o Statements by individual members of congress
o Purpose of the statute, i.e. environmental protection, safety, health, market
efficiency
o Structure, i.e. each provision is relevant, so if one provision mentions
specifically that bikes cannot be on wilderness trails, then bikes are probably
not considered vehicles in the general statute

A.L.A. Schechter Poultry Corp. v. US (SCOTUS, 1935)

FACTS: NIRA sets up a governing scheme to get firms in an industry to agree to codes of
fair competition. It allowed the president to approve the codes (weird because usually
cabinet official). NIRA contained procedural (application by trade group, membership,
possibility of hearing) and substantive (codes shall not promote monopolies, interstate
commerce limitations, effectuate policy of statute) requirements. Government issues Live
Poultry Code, whose enforcement included criminal penalties and injunction. The
government sought to punish Schechter Poultry for its wholesale violation of a poultry
industry code. Schechter raises 3 constitutional objections: Delegation challenge (Art. 1
1); Interstate transactions (Commerce clause); 5th amendment (violates individual rights)
MAIN ISSUE: Whether this was a violation of the non-delegation doctrine
HOLDING: It is a violation because delegation was too broad Congress failed to articulate
any policy or standard that would serve to confine the discretion of the authorities to whom
Congress has delegated power Court says that there is unjustified indeterminacy
Since Schechter, there has not been a single case where the court has sustained a
non-delegation challenge; Article I, 1 is now essentially an unenforced
constitutional norm.

Federal Trade Commission and NIRA compared

o FTC
Adjudicatory body that decides on a case-by-case basis whether a
practice is an unfair method of competition. quasi-judicial
Has procedural protections, i.e. hearing, opinion, judicial review
o NIRA
The president has rulemaking power to make Codes of Fair
Competition
Provides for notice and hearing
o However, these distinctions does NOT necessarily explain the courts
decision or make NIRA unconstitutional
o Rather than overruling the previous cases, the Court distinguished them by
declaring that the degree of specificity of the standards must be considered
in relationship to the degree of power conferred on an agency and the
procedural protections given to the persons subject to that power

MISTRETTA V. US (SCOTUS, 1989)

***Current Law for Non-Delegation Challenges***
FACTS: Congress passed the Sentencing Reform Act of 1984 that created a US Sentencing
Commission as an independent body within the judicial branch whose job was to replace
indeterminate sentencing with determinate-sentencing
ISSUE: whether the US Sentencing Commission violates the separation of powers
principle, and whether Congress had delegated excessive authority to the Commission to
structure the guidelines
HOLDING: This is not a non-delegation problem because the goals are clearly laid out and
there are strict guidelines, nor does it violate the principle of separation of powers
INTELLIGIBLE PRINCIPLE DOCTRINE so long as Congress lays down by
legislative act an intelligible principle to which the agency is directed to conform,
such legislative action is not a forbidden delegation of power; not enforced since
1935
What does this mean? Possibilities
o The language is determinate (although theres always a zone of open texture)
o There not an unjustified degree of indeterminacy
o Given the intrinsic difficulty of making the call as to whether there is an
unjustified degree of indeterminacy, Art. 1 1 has become an unenforced
constitutional norm
Political Question Doctrine
o Sometimes the court says explicitly that something is a political question
which means that they owe it total deference
o Non-delegation isnt a political question because the court has never
explicitly said it is, but in practice its dealt with in the same way

SECTION II: ADJUDICATION

THE ADMINISTRATIVE PROCEDURE ACT (1946)
DEFINITIONS
Adjudication: agency process for the formulation of an order
o This seems to encompass any decision by an agency having any legal effect
unless that decision can be characterized as a rule whatever that is
o This, like rule making, is subject to formal hearing requirements only to the
extent that it is an adjudication required by statute to be determined on the
record after an opportunity for agency hearing.
o The APA supplies a generic form of formal hearing process, but only for those
instances in which some other statute requires that formal process be
employed
o Administrative adjudicatory processes may range across a spectrum of
formality from the internal mental operations of a single individual to
protracted judicial-style proceedings before multi-member commission with
all the accoutrements of an adversary trial
o APA stands virtually mute on requisite characteristics of any adjudicatory
process short of proceeding required by some other statute.

 Order: the whole of part of a final disposition, whether affirmative, negative,

injunctive, or declaratory in form, of an agency in a matter other than rule making but
including licensing
Licensing: Includes agency process respecting the grant, renewal, denial, revocation,
suspension annulment, withdrawal, limitation, amendment, modification, or
conditioning of a license
License: includes the whole or part of an agency permit, certificate, approval,
registration, charter, membership, statutory exemptions or other form of permission
Rule Making: agency process for formulating, amending, or repealing a rule
Rule: Whole or part on an agency statement of general or particular applicability and
future effect designed to implement, interpret, or prescribe the law or policy
ADLERS CLARIFICATIONS
APA definitions arent very helpful because theyre so broad and technical and the
definition of rulemaking could technically cover whats issued in Seacoast
ORDER: A formally specific legal directive by an agency which is addressed to
an individual by name, changing the individuals legal position in some way
either a negative legal positions (imposing a duty) or positive (granting a
liberty).
o Individual can be a natural or artificial person (i.e. corporation, like PSCO)
o Similarities between rules and orders
Order: PSCO may use the system
Rule: All plants may use a once-thru system
In both of these the agency is bound by a statute, they both may affect
a large or small number of individuals
i.e. in Seacoast, although the EPA is addressing only one party, many
others are effected by the outcome (i.e. tourists, other nuclear plants,
etc.)
o Court looks at the formal difference a person addressed by name as
opposed to a large class of people

Although the courts have adopted this its not the only possibility
LICENSING: might be any directive that creates a liberty (a liberty is an
absence of duty)
o Hypo: EPA says: all plants may use a once through system
o Intuition says this isnt a licensing because its not an agency order that
creates a liberty
ROADMAP OF ON-THE-RECORD ADJUDICATION UNDER THE APA
INITIATION
o 553(b): Agency must notify parties of the time, place, and nature of the
hearing and of the legal authority under which it is to be held
INFORMAL SETTLEMENT
o 554(b): After a formal adjudicatory hearing is announced, an agency is still
required when time, the nature of the proceedings, and the public interest
permit to give the parties the opportunity to propose offers of settlement
or other resolutions of the issues that may obviate the need for a hearing
INITIAL DECISION MAKER
o 556(b): Unless some other statute designates the initial decision maker in a
formal hearing, an agency may decide to leave the taking of evidence to the
agency itself, to one or more members of the body that constitutes the
agency, or to an administrative law judge (ALJ is by far the most common)
EXCLUSIVITY OF THE RECORD; EX PARTE CONTACTS

556(e): Transcript of testimony, the exhibits, and all other formally filed
papers constitute the exclusive record for the decision in a formal APA
hearing
o 557(d)(1)(A), (B): In any on-the-record proceedings, once the hearing is
noticed, there may be no ex parte communication relevant to the merits of
the proceeding, between any interested person outside the agency and
any member of the body comprising the agency, administrative law judge, or
other employee who is or may reasonable be expected to be involved in the
decisional process of the hearing
o 554(d): If the hearing is adjudicatory and not for the purpose of determining
an initial licensing application, the presiding officer is forbidden to consult
any person or party presumably, whether or not the person is interested
or outside the agency on a fact in issue, unless on notice and opportunity
for all parties to participate.
o Notable exceptions to the bar against ex parte contacts
554(d): there is no statutory prohibitions against ex parte contacts
between the persons constituting the agency and the presiding officer
at a formal hearing
557(d)(2): or against persons other than the presiding officer giving
information ex parte to Congress about the merits of a proceeding
o 557(d)(1)(C): If an impermissible contact does occur, it must, once
discovered, be made part of the public record, and
o 557(d)(1)(D): the agency, ALJ, or other official presiding at a hearing may
impose sanctions including dismissal of a claim
EVIDENCE AND RULES ON PROOF
o 556(d): parties of formal APA hearings are entitled to present their case by
oral or documentary evidence, to submit rebuttal evidence, and to cross
examine witnesses
o APA grants agencies broad power to determine the varieties of oral or
documentary evidence to be admitted at formal hearings, and, in connection
with formal rulemaking or initial license applications, the agency may limit
the parties to written presentations when a party will not be prejudiced
thereby
PRODUCTS OF THE HEARING
o 557(b): unless an agency itself presides at the formal hearing and thus
makes all relevant decisions itself in the first instance, it has two options
regarding the form of the ultimate decision to result from that hearing. It
can treat the outcome of the hearing as the agencys initial decision, which
become final unless a party seeks to have the agency change it.
Alternatively, it can provide that the decision shall constitute only a tentative
decision or recommendation, which must be formally adopted by the agency
in order to be implemented.
o 557(c): any decision, whether initial, tentative recommended, or final, must
include statements of findings and conclusions on all material issues of fact,
law, and discretion, and must contain the rule, order, sanction, relief, or
denial thereof that is the consequence of the hearing
ADMINISTRATIVE APPEALS
o 557(b): when the agency permits other officials to preside at a hearing and
make the initial decision, the agency may still provide for an administrative
review such review may be an appeal as of right or at the agencys
discretion. Some agencies set up internal boards to hear appeals, reserving
certiorari-like discretionary review to themselves. In reviewing a
subordinates decision, the agency has all the powers which it would have in
o

10

making the initial decision except as it may limit the issues on notice or by
rule.

11

PROVISIONS THAT APPLY TO BOTH

ALJ & AGENCY
556(B) IMPARTIALITY (THIS MIGHT
ALJ
BE FINANCIAL IMPARTIALITY
MAIN
THING
IS PREJUDGMENT,
Civil
servants
appointed by YOURE
agency NOT
ALLOWED TO PREJUDGE)

554(D)(1) ALJ CANT HAVE AN EX

III JUDGE
PARTEARTICLE
CONSULTATION
WITH A
PERSON/PARTY
FACT
IN ISSUE
Pres
appoints withON
Senate
advice
and
consent

APA
7521 EMPOWERS
removable for
cause as
556(C)
PRESIDING
determined by the
Merit
Systems
OFFICIAL
Protection Board

Life tenure,
removable
only by
554(D)(2)
STRUCTURAL
impeachment
INSULATION: ALJS MAY NOT BE

RESPONSIBLE TO ENFORCEMENT
STAFF

APA 3105 - assigned to cases in

rotation; no inconsistent duties
APA 5372 Agency does not set ALJ
salaries
APA 554(d)(2) separate from Agency
556(D) ORAL HEARING PROVISION
staff
556(E) EXCLUSIVE RECORD FOR
DECISION
557(C) ENTITLEMENT TO
DECISION
557(D) EX PARTE CONTACT
RESTRICTIONS
555(B) RIGHT TO BE ATTENDED BY
COUNSEL
FORMAL AND INFORMAL PROCEDURES
Rulemaking
Adjudication

SPECIAL INSULATIONS FOR ALJ

Formal
553, 556, 557
554, 556, 557

IN CONTRAST, THE COMMISSIONER

CAN BE INVOLVED IN WRITING A
RULE, IN DECIDING IF VIOLATION OF
A RULE SHOULD BE INVESTIGATED,
AND IN ADJUDICATING THAT CASE

Informal
553
555

Formal Adjudication comes into play only if some other statute uses the trigger
language; either hearing on the record or after hearing
o Triggering structure is set up by 554(a)
Informal Adjudication governed only by 555

CONSTITUTIONAL CONSTRAINTS: PDP

CENTRAL THEMES IN DUE PROCESS JURISPRUDENCE
Tradition
o Whether the procedures at issue conform to the customary processes of law
o The problem is identifying a single tradition and with value presuppositions
Natural Rights
o Begins with a basic moral premise concerning individual autonomy
o There are problems with the applications the set of procedural rights
necessary to preserve individual dignity seems infinitely expansive there
are no clear principles of limitation
o In an increasing secular society, moral pronouncements with constitutional
interpretations seem suspect with no attachment to revealed truth and no
empirical underpinning

12

 Interest Balancing
o This is the dominant contemporary mode of due process
o Requires consideration of:
Magnitude of interest of private parties
Governmental interest in procedural efficiency
The likely contribution of various procedural ingredients to the
correct resolution of disputes
o Court performs a social welfare calculation to determine whether society will
be better or worse off if it honors the claim to more formalized procedure
o Advantages
Adaptability to virtually any question of procedural adequacy
Recognition that judgments about process adequacy necessarily
involve trade-offs between collective and individual rights
o Defects
Interest balancing suggests that given a good enough reason, the
government can use whatever process it wants
Seems to contradict the basic libertarian presuppositions of the test
that it would implement
Information requirements of a rigorous utilitarian calculus are very
substantial and perhaps excessive
NOTE: SCOTUS has never chosen a single approach, nor has the
court achieved consistency
JUDGE FRIENDLYS ELEMENTS OF A FAIR AN UNBIASED TRIBUNAL
Notice of the proposed action and the grounds asserted for it
An opportunity to present reasons why proposed action should not be taken
The right to call witnesses
The right to know evidence against oneself
The right to have a decision based exclusively on the evidence presented
The right to counsel
The making of a record
The availability of a statement of reasons for the decisions
Public attendance
Judicial review

GENERAL FRAMEWORK

FOR

PDP QUESTIONS

1. IS THERE A DEPRIVATION OF LIFE, LIBERTY OR PROPERTY?

(Only one of these is necessary to trigger DP)
A. PROPERTY
Need a Legitimate Claim of Entitlement There is (1) some nonconstitutional source of law that limits the states decision and (2) is sufficiently
determinate to engender reliance (objective standard)
Potential Sources: statutes language or intent, historical practice,
etc.
Court looks to see if the language is mandatory rather than permissive

13

B. LIBERTY
Roth has a list of liberty interests
Can be grounded in the Constitution
Includes coercion, denial of a tangible benefit paired with stigma, etc.
2. HOW MUCH PROCESS IS DUE?
Court determines what process is due (Loudermill)
Uses Mathews Balancing to make the determination
NOTE: The concept of property means different things in different contexts, i.e. property
for the purposes of the takings clause is narrower than for due process; First Amendment
claims are completely different

GOLDBERG v. KELLY (SCOTUS, 1970)

FACTS: Residents of NY receiving AFDC or aid from NYs general home relief program
challenge the constitutional adequacy of the procedures for notice and hearing prior to
termination of financial aid
Procedure before the case
(i) Initial agency decision by a caseworker or supervisor (agency staff) to
terminate
(ii) Notice
(iii)Request for review by supervisor (staff) with written submissions
(iv) Termination
(v) Hearing before an independent state hearing officer (administrative
judge)
(vi) Judicial Review (article III judge)
ISSUE: The main issue is whether the due process clause requires that the recipient be
afforded an evidentiary hearing before the termination of benefits
HOLDING: The Court holds that a predetermination oral evidentiary hearing is required by
procedural due process, but these hearings do NOT need to take the form of a judicial or
quasi-judicial trail
(a) Procedural protections that are added:
(i) Timely and adequate notice detailing the reasons for a proposed
termination
(ii) Right to present evidence orally and to know the evidence against you
and cross examine
(iii)Must be allowed to retain an attorney (but not appointed)
(iv) Impartial decision maker
(v) Decision makers conclusion must rest solely on legal rules and the
evidence adduced at the hearing, and the reasons for the
determination should be stated and the evidence relied upon indicated
(b) Doesnt tell us how to balance, doesnt tell us what property is, doesnt
tell us what the courts role is
New property rights in things previously seen as benefits (i.e. welfare, government
jobs) which results in constitutionally mandated due process
Court quotes from an article by Professor Reich in which he argues
(a) A high proportion of property in the US consists of intangible
entitlements to continuing benefits
(b) A high proportion of those entitlements flow from government

14

(c) The traditional legal approach to property protects the entitlements of

the rich but not the poor
Although the court adds more procedural elements, there are still parts of
Friendlys list that are missing
no right to counsel (court only gives the right to retain counsel this is a mere
formality because the claimants are so impoverished; theres no right to a funded
council)
no public attendance
no unbiased tribunal
no full record/opinion required
theres also no pre-termination judicial review
Court picks and chooses from Friendlys list because of expense. Each of these
safeguards wont necessarily improve the accuracy of the hearing
How do you fix this so the process isnt as expensive?
o Make criteria for termination very specific replace social workers with
bureaucrats
o Make criteria very open-ended instead of moving towards bright line rules
Goldberg signals a change, but doesnt exactly explain exactly what the doctrine is the
next series of cases provide this
NOTE: The due process clause does NOT say that no person should be affected by
governmental action without due process; rather it says that no person should be deprived
of life, liberty, or property without due process of law

BOARD OF REGENTS OF STATE COLLEGES v. ROTH (SCOTUS, 1972)

FACTS: Roth was hired for a fixed term on one year at WI State University - Oshkosh, and
was not rehired the following year. He expected to be rehired, but the college never game
him any assurance that he would be retained behind the first year

ISSUE: whether the failure of University officials to give Roth notice of any reason for nonretention and lack of hearing violated 14th amendment PDP. (note: in this case theres NO
procedure, unlike in Goldberg where there was procedure but the court said it wasnt
enough)
HOLD: Court holds that this employment is not protected by due process: to have a
property interest in a benefit, a person clearly must have more than an abstract need or
desire for it. He must have more than a unilateral expectation of it. He must instead have
a legitimate claim of entitlement to it.
Roth did not have a property interest significant enough to require the University to give
him a hearing when they didnt renew his contract.
Furthermore, no liberty interest is implicated: there was no suggestion that the
respondents good name, reputation, honor, or integrity are at stake, or that the State
imposed on him a stigma or other disability that foreclosed his freedom to take advantage
of other employment opportunities
MARSHALLS DISSENT anyone who is denied a government job deserves a hearing
because a job is pretty important

15

DOUGLASS DISSENT If someone has an important interest, then they should have a
hearing
For a property interest you need a Legitimate Claim of Entitlement (i.e. claim of
entitlement grounded in non-constitutional law that is sufficient to create reliance and is
sufficiently determine)
Liberty CAN be grounded in the Constitution
Potential Sources of LCE
State statutes
Regulation
Contract
Judicial decisions
Practice of history one cant exercise discretion irrationally Sindermann
Statutes intent
o i.e. if the state law about licenses says that its purpose is to ensure good
teachers if this was the case, Roth could appeal to the purposes of the
statute hes a good teacher and the point of the statute is to educate
What is a Legitimate Claim of Entitlement?
All teachers will be reemployed if they score > 80 on the annual exam
o Legal argument available scored above 80
o Reasonable reliance
Clear and determinate such that its the kind of thing that people can
base their expectations on sufficiently clear to create expectations
All teachers reemployed if competent
o Legal argument available I was competent
o Reasonable reliance
o Sufficiently determinate
All teachers reemployed at discretion of university
o Legal argument available although text doesnt give me any clear
standard, nonetheless, given the underlying purpose of the statute, which
ahs to do with education, its not a good idea not to reemploy me. Im a great
teacher
o TOO BAD not the kind of non-constitutional law that would ground
reliance
The source of non-constitutional law must be sufficiently specific
Teachers shall be reemployed at the discretion of the University (like Roth) no LCE
All teachers who score more the 85% on annual teachers exam must be rehired.
likely LCE
All teachers shall be rehired except for incompetence of bad behavior. this type of
for-cause standard generally created an LCE (see Loudermill)
In Roth, the statute says something like teachers shall be reemployed at the
discretion of the University, this did not create a LCE
Note: in these cases, process is given where the law is more clear but not where its
vague this seems a little backward
Mandatory v. Permissive Language
i.e. teachers shall be rehired v. teachers may be rehired.

16

 This is not crucial, but its part of the same idea if its permissive it point to
conditions that are relevant, but its less clear about what the statute means
LIBERTY
Created by the Constitution itself
All different kind of liberty interests paradigm is coercive enforcement
Roth provides a list of liberty interests
o Not merely freedom from bodily restraint, but also the right of the individual
to contract, to engage in any of the common occupations of life, to acquire
useful knowledge, to marry, establish a home and bring up children, to
worship god according to the dictates of his own conscience and generally to
enjoy those privileges long recognized
When looking for a liberty interest, if its not on the Roth list, try to reason by analogy
Stigma +
o Stigma alone isnt a deprivation of liberty, but denying someone a tangible
benefit AND stigmatizing them (casting out their reputation) does count as
an infringement
Hypo: Roth cant work in any school this affects his occupational liberty, but theres
no stigma attached it doesnt say he cant teach anywhere b/c hes a bad guy
Hypo: website describing Roth as a bad teacher Paul v. David said this doesnt
implicate liberty
Roth has a colorable 1st Amendment claim if he can show that he was fired b/c of
protected speech, even if he doesnt have an independent entitlement to benefits
Roth can take his 1st Amendment claim to federal or state court, but not basis for
administrative hearing
Court didnt allow showing of grievous loss because that part of Goldberg was
dicta. Goldberg didnt hold that grievous loss implicated a property interest. No
mandatory test.
Post-Roth, agencies can respond to procedural impositions by:
(1) making statute or rules more indeterminate or
(2) repealing the statute entirely.
Where statutes are indeterminate and SCOTUS isnt enforcing non-delegation doctrine, we
need protection of constitutional PDP. Irony of Roth is that where our statutes are
most indeterminate, we lose PDP.

PERRY v. SINDERMANN (SCOTUS, 1972)

FACTS: Sindermanns one-year contract was not renewed although hed been teaching in
the Texas state college system for 10 years
HOLDNG: Court help that Sindermann had a LCE despite the lack of any formal tenure
status at the college because he relied upon several statements contained in the colleges
publications that indicated the colleges intent to retain indefinitely any employee who had
taught at the college for more than seven years as long as the teachers performance was
satisfactory the reliance on these statements was enough to turn a unilateral expectation
into a LCE
Informal practices and unwritten rules can lead to an LCE

17

CLEVELAND BOARD OF EDUCATION v. LOUDERMILL (SCOTUS,

1985)
FACTS: Loudermill was discharged from employment because he never told them he was a
felon. He had no opportunity to respond to the charges against him prior to removal. Ohio
statute says that classified civil servants can be terminated only for cause and may obtain
administrative review after discharge.
ISSUE: What predetermination process must be accorded to a public employee who can be
discharged only for cause?
HOLD: while the legislature may elect not to confer a property interest in public
employment, it may not constitutionally authorize the deprivation of such an interest once
conferred without appropriate procedural safeguards The Ohio statute had created an
LCE because it said that Loudermill couldnt be terminated without cause
In this case, Loudermill deserved a pre-termination opportunity to respond, coupled with
post-termination administrative procedures as provided by the Ohio statute.
Transition case between Roth/Sindermann and Mathews
Once there is life, liberty, or property, courts independently determine what
process is due
For cause creates an LCE
The majority restates the general rubric of Roth
Property interests are not created by the Constitution, they are created and their
dimensions are defined by existing rules or understandings that stem from an
independent source such as state law, the court then finds that the procedural
dimensions of the right to discharge only for cause under the Ohio statute are defined
not by state law
Some hearing should occur prior to the governments deprivation of ones life,
liberty, or property, but the formality requires for the pre-deprivation hearing will
depend on the promptness and fullness of any post-deprivation hearing that may
be available to claimant
Effect creates an incentive for the stat to make statutes indeterminate so that there
wont be a sufficient LCE for courts to come in and say that the procedures arent good
enough.
Note: a statute like all competent teachers should be reemployed would presumably be
specific enough post-Loudermill to create a property interest.
Distinguishing Arnett v. Kennedy (SCOTUS, 1974)
Arnett says that procedural claimants must take the bitter with the sweet (i.e. Ohio
was generous to grant jobs with substantive protections, but as part of that, people
have to deal with procedural limitations.)
But in Loudermill, the court gives more than the states gives how is this consistent
with Arnett?
Arnett was a plurality, and thus, since theres no majority it isnt binding the court
can depart from the prior plurality without overruling it because its not official

18

doctrine. Ergo, the court can add procedural entitlements that the state or federal
legislature hasnt specified in the statutes.
Generally, as a matter of constitutional doctrine, the bitter with the sweet
idea isnt used and now, post Loudermill, its definitely not used with
procedural due process

MATHEWS v. ELDRIDGE (SCOTUS, 1976)

FACTS: Eldridges disability benefits were cut off when the government determined that he
was no longer disabled. The existing procedure for terminating benefits included: 1)
proposed determination; 2) notice; 3) disclosure of file; 4) written participation (send in
objection); 5) termination; 6) post-termination hearing. A property interest is created by
the disability statute unable to engage in gainful activity because of medical
impairment is sufficiently specific to constitute a property interest
ISSUE: whether the due process clause of the 5th Amendment requires that prior to
termination of Social Security disability benefit payments the recipient be afforded an
opportunity for an evidentiary hearing.
HOLDING: Court held that an evidentiary hearing is not required prior to the termination
of disability benefits and the present administrative procedures fully comport with due
process. Court seems to say that you should use this test when you need due process.
Mathews Balancing test:
(a) Private Interests that will be affected
(b) Public/Government Interest (Governments interest and financial administrative
burdens of addition procedural requirements)
(c) Impact of Procedure Claimed, Error Reduction (Risk of erroneous deprivation of
such interests through the procedures used and the probably value, if any, of additional or
substitute procedural safeguards)
BOTTOM LINE: if you are deprived of a protected interest, you are going to be
allowed to have some type of hearing, maybe written, maybe oral, pre- or posttermination.
Inherent in this balancing test is the idea that we need to tolerate some level of
error. The question is how much?
This is NOT a straight cost-benefit analysis
This case is asking courts to engage in open-ended, moral balancing not just cost
benefit. Must also consider fairness and distributive justice
Distinguishing Goldberg from Mathews
Court notes that the private interest at stake is less weighty than in Goldberg, and that
the procedure would be less good at reducing error because of the nature of medical
evidence
COST BENEFIT IN GENERAL
Basic notion is efficiency
Technical explanation: aggregating monetary equivalents: willingness to
pay/willingness to accept amounts
In theory youre supposed to do cost benefit for everyone in the population
o For each person, you need to measure the well-being impact using money

19

To do this, we must ask how must each individual is willing to pay for each
provision
Money isnt a perfect metric for measuring well-being, but its usable
Hypo: there is a group of eligible beneficiaries for some government benefit
(disability, ss, welfare, etc.) who are, under current procedures being wrongly
denied the benefit. The total amount wrongly denied per year is $1 million. How
much should society spend on procedures to correct the error? Adler suggests that
the cost shouldnt be more than the benefit.
o i.e. the cost to the taxpayers shouldnt be more than the benefit to the
beneficiaries, which suggests that we shouldnt pay any more for extra
procedure.
Adler says: if you take cost benefit, even in a sophisticated form, its only a method
of tracking overall well-being, not of distributive justice, ergo, its difficult to think of
Matthews as a strict cost benefit test. Rather than cost benefit, Mathews seems to
be a more open ended moral balancing which considers overall welfare as well as
fair distribution.
Intrinsic benefit of procedure process values
o Adler says that participation has intrinsic well-being benefits separate from
potential accuracy and balancing should take this into account as well
o

APA CONTRAINTS: FORMAL ADJUDICATION

NOTE: Almost everything from Friendlys list is provided for under formal adjudication,
except the right to a public hearing
ADMINISTRATIVE LAW JUDGES
Not Article III judges
Theyre not protected from the political process like federal judges, but theyre
protected through 3105, random assignment
They are civil servants appointed by the agency
Action may be taken against them only for good cause
5372 protects their pay, APA, Office of Personnel Management sets ALJ pay, not the
agency employing the ALJ
ADJUDICATIVE V. LEGISLATIVE FACTS
Adjudicative Facts: facts about parties and their activities, businesses, and properties
Legislative Facts: generally dont concern the immediate parties, but are general facts
that help the tribunal decide law or policy
ALJ AND ADMINISTRATOR/COMMISSIONER
Morgan Precedent Initially, SCOTUS said that the administrator is supposed to make
a personal decision it cant be ghost written/adjudicated by staff, but this was
reversed a person can now rely on others to make the decision.
Separation of Functions
o The administrator may combine functions, i.e. he can be involved in
rulemaking and in the determination that a party violated a rule
o The ALJ may NOT combine functions - 554(d)(2): AJL cant report to
individuals involved in prosecution, presumably this means that the ALJ cant
be involved in prosecution
FEDERAL STATUTORY HEARING RIGHTS
Statutes are the starting point for determining the existence of hearing rights

20

o Does the organic statute require any hearing?

o If so, is it public hearing on the record?
Does the organic statute modify or add to the APA-proscribed procedural elements?
If a hearing is required, but APA requirements arent triggered, what sort of hearing is
necessary?
PROCESS OF FORMAL ADJUDICATION
554 sets up triggering structure
o 554(b) notice
o 554(c) pre-hearing briefing and proposals of settlement; if that doesnt
happen then get to next step
556 hearing
o 556(b) presiding at hearing
limited to agency, ALJ, one or more of commissioners
Creates ability for agencies to create ALJs
Notion of impartiality, regardless who presides
o Hearing leads to decision particular directive with opinion
557 decision
o 557(b) links with 556
ALJ presides over hearing, but who makes the decision?
ALJ could make decision or just hear the hearing then certify hearing
up to agency for decision
o 557(c) what happens with decision
Opinion
Directive

SEACOAST ANTI-POLLUTION LEAGUE v. COSTLE (1st CIRCUIT

APPEALS, 1978)
FACTS: EPA granted PSCO a permit to pollute. Petitioners assert that the proceedings by
which the APA decided the case contravened certain provisions of the APA governing
adjudicatory hearings. Respondents say that the APA doesnt apply to proceedings held
pursuant to 316 or 402 of the Federal Water Pollution Control Act; Relevant statute is the
FWPCA, which grants a discharge permit for pollutants after public hearing (402), and
which requires exemption in certain cases after public hearing (316)
HOLDING: the words after public hearing or after hearing on the record in the organic
statute is sufficient to trigger formal adjudication. PSCO gives additional information,
which injures 556(d) oral hearing requirement. Administrators consultation with inhouse panel violates 556(e) record compiled during hearing process should be exclusive
record for decision
Formal Adjudication Is Required if Theres Triggering Language in the Organic
Statute (after hearing on the record)
556(d) Presumptive right to cross-examination
9th Circuit: Hearing is enough to trigger Formal Adjudication
Everywhere Else: Need precise language Hearing on the Record hearing or
public hearing isnt enough (Chemical Waste, D.C. Circuit)
UNDER 556(D),

YOU HAVE A PRESUMPTIVE RIGHT TO CROSS-EXAMINATION

21

 PSCO provided supplemental information, which was okay, but the problem was the
Seacoast wasnt allows to cross examine
Note: Adler says we must distinguish between two ways that a hearing can be oral:
presenting your own evidence and challenging the other sides evidence
556(d)

NORMAL CASE

Initial Presentation of
Evidence

Absolute right to present

oral or written evidence

Challenging other sides

evidence

Presumptive right to
cross-examine, as requires
for full and true disclosure

LAST-SENTENCE CASE
(rule making, determining
claims for money or
benefits or applications for
initial licenses)
Court may adopt
procedures for submission
of all or part of evidence
in written form when a
party will not be
prejudiced thereby
Presumptive right to cross
examine, as required for
full and true disclosure

EPA VIOLATION OF 556(E)

556(e) says, the transcript of testimony and exhibits, together with all papers and
requests filed in the proceeding, constitutes the exclusive record for decision
Administrator was allowed to consult with an in house panel, but if he relied
on the information gathered, it must be in the record (which was the violation
here)
Sifting and analyzing isnt a violation of 556(e) but the consultation cant
provide for new first order evidence.
Problem was that the administrator relied on information not on the record
EX PARTE CONTACTS
557(d) is a per se rule against ex parte contacts from interested persons outside the
agency
554(d)(1) deals with ALJ ex parte contacts ALJ cant have ex parte contact even with
an administrator
556(e) deals with what the administrator relies upon
Any in-house contact with an administrator is fine, as long as he doesnt rely
upon it, otherwise its a violation of 556(e)

UNITED STATES v. FLORIDA EAST COAST RAILWAY (SCOTUS, 1973)

(Rulemaking)
FACTS: Interstate Commerce Commission (ICC) adopted per diem boxcar charges without
a formal hearing. The organic statute said: ICC may, after hearing issue rules
establishing such charges. 1(14)(a). Florida East Coast argued that the language required
formal rule making proceedings. (i.e. oral hearing.)
HOLDING: Hearing or public hearing is not sufficient to trigger formal rulemaking as
required by 553(c) need something like hearing on the record
To trigger formal rulemaking, organic statute must say hearing on the record.
Hearing, or Public Hearing is not enough

22

RICHARDSON v. PERALES (SCOTUS, 1971)

Facts: Perales is claiming disability benefits. Had hearing in front of examiner, where his
own doctor testified that he was injured, but adverse evidence (from government doctors)
was submitted by written reports. Such evidence would be hearsay in regular courts (out
of court statement admitted for its truth.)
Issue:
1. Does the APA prohibit the admission of hearsay evidence?
2. Does the plaintiffs inability to cross-examine violate APA?
Holding:
1. Hearsay, under either Act, is admissible up to the point of relevancy.
o 556(d): Allows admission of oral OR written evidence, EXCEPT for anything
irrelevant or repetitive Any relevant evidence is admissible.
2. Right to cross-examine is WAIVABLE Perales did not subpoena any witnesses, so
he has waived that right.
o 556(d) test: Use cross-examination whenever it would improve accuracy
(as may be required for a full and true disclosure of the facts )
Adler would read this broadly, although SCt has not resolved
556(d) Hearsay is admissible up to the point of relevancy
All APA rights are waiveable
Admissibility of Hearsay Evidence
556(d): any relevant evidence may be introduced this includes hearsay
In contrast, FRE allows all relevant evidence except hearsay
556(d): Hearsay is admissible up to the point of relevancy, and subject to crossexamination under 556(d), but here, because Perales waived his right to a subpoena,
cross-examination isnt an issue
Cross Examination
If oral or written evidence comes in, you can cross examine under 556(d),
presumptively by subpoena
Reasons for limiting cross examination
o APA: if cross-examination is not important for accuracy (dont look at the cost
like Mathews)
o PDP: uses Mathews balancing test if CE is not important for accuracy this
is less likely to grant cross-ex b/c youre balancing under other things.

APA CONTRAINTS: INFORMAL ADJUDICATION

PENSION BENEFIT GUARANTY CORP. v. THE LTV CORP. (SCOTUS,
1990)
FACTS: PBGC administers a government insurance program under ERISA; PBGC
terminated LTVs plan because of insufficient funds. Then LTV settled with workers so as
to put them in same position they would have been in under the old plan. (Follow-on
plans an abusive practice that results in PBGC subsidization)...PBGC reevaluated and
issued a notice of restoration with minimal procedures no written submission, no
opportunity to challenge facts. LTV refused to comply. Claims that the restoration, which
was an adjudication, was arbitrary and capricious (706(2)(A))

23

Not even minimal triggering language in ERISA, so not a formal adjudication. Instead its
an informal adjudication
HOLDNG: Upheld agencys procedures:
o Courts should be highly deferential to agencies in interpreting agencies
organic statutes to create procedural requirements. Reaffirms Vermont
Yankee and rejects Califano
Courts should hesitate to infer procedure where agency has declined
to do so: Where organic statute contains no specific procedural
mandates, no inference
Courts should be VERY deferential to agencies in imposing procedural
requirements under the agencys organic statues - do not invalidate agency
procedure under a governing statute unless theres a clear violation of the
agencys governing statute or the APA
When the due process clause is not implicated and an agencys governing statute
contains no specific procedural mandates, the APA establishes the maximum
procedural requirements a reviewing court may impose on agencies.
706(2)(a) does apply to both formal and informal proceedings, but it is NOT a
source of participatory procedures (i.e. hearing rights.)
555 GOVERNS INFORMAL ADJUDICATION
But doesnt afford any hearing rights.
Provides minimal requirements
Right to be attended by counsel
Right to subpoena under certain conditions
Right to brief statement when agency denies written petition
No property interest because the statute is so vague: restore when appropriate,
whenever it advances the purposes of Employee Retirement Income Security Act (ERISA)
Potential Sources of challenge to agency action in Pension Benefit:
APA provision governing FA ( 554, 556, 557)
o Not triggered by ERISA
APA provisions governing IA ( 555)
o Provision is a whole lot of nothing virtually nothing on Friendlys list is in
play
PDP challenge
o Property interest: ERISA says PBGC may restore when appropriate and
consistent with duties under the Act
Too open-ended to create an LCE under Roth
o Liberty interest: Must be grounded in the Constitution, and it isnt here
Organic statute challenge (ERISA):
o When appropriate and consistent with duties under this Act
Case would be easier if statute were more specific but its very
broad
Deference to agency interpretation.
APA provision forbidding arbitrary and capricious agency action ( 706(2)(a)):
o Court confirms that 706(2)(a) is not an independent source of hearing
rights. Denial of a hearing does not violate that provision.

24

CALIFANO v. YAMASAKI (SCOTUS, 1979)

FACTS: SSA 204(a) deals with recouping disability benefit overpayments through
deduction of future payments. Secretary made an ex parte determination that an
overpayment occurred, notified recipient, and shifted burden to recipient to either (1) seek
reconsideration to contest accuracy of determination, or (2) ask secretary to forgive the
debt and waive recovery in accordance with 204(b), which precludes recouping where the
secretary finds that recipient is without fault and recovery would defeat the Acts purpose
to be inequitable, or without good conscience.
HOLDING: Court holds that an opportunity for pre-recoupment hearing (court says theres
an implicit right to an oral hearing) is required when the recipient requests waiver under
240(b), although the statute (like in PBGC) doesnt speak specifically to procedure.
240(a) doesnt require oral hearing because of the nature of the evidence written
submissions are adequate for resolving most 204(a) disputes. 240(b) requires an
evaluation of fault, which requires assessing recipients credibility which makes written
submissions inadequate.
More creative reading of statutes asked for here not controlling because Pension Benefit
is later; Court declined to follow

SECTION III: RULEMAKING

CONSTITUTIONAL CONTRAINTS: PDP
LONDONER v. CITY AND COUNTY OF DENVER (SCOTUS, 1908)
FACTS: City Council paved a road and levied a tax against nearby landowners to pay for the
road. Londoner, one of these landowners claims that they werent able to contest at this
hearing. Procedures in place notice of proposed taxes, written submissions by
individuals, city council makes decision.
HOLDING: There is notice and a written hearing, but the court didnt think it was enough
in this case; Court holds that a pre-tax oral hearing is required. Violates PDP because its
like an adjudication
SMALL CLASS EXCEPTION: Even if the agency issues a rule it will be treated as
an order for PDP purposes if it (1) applies to a very small number of people, and
(2) rests on specific facts about the particular people
This case triggers PDP because its really an order, not a rule, and only orders
trigger PDP.
For this exception to come into play, the agency must have relied upon
adjudicative rather than legislative facts.
Small class exception to the general doctrine that DP doesnt apply to rulemaking
A Rule is a formally general directive, except a formally general directive that (1) applies to
a very small number of persons and (2) rests on specific facts about the particular people.
(This, for all intents and purposes, makes it an order, and thus is will be treated as an order
for this analysis)

25

The small class exception is also relevant to the APA

You could argue that something is actually an adjudication and thus should be dealt
with using x, y, z

BI-METALLIC INVESTMENT CO. v. STATE BOARD OF

EQUALIZATION OF COLORADO (SCOTUS, 1915)

FACTS: Tax Commission increased the assessed value of all property in Denver by 40%, and
the commission ostensibly didnt follow any procedures before doing this
HOLDING: Court holds that when a rule of conduct applies to more than a few people, its
impracticable that everyone should have a direct voice in its adoption their rights are
protected by power over those who make the rules.
PDP Does NOT apply to rules its impractical that everyone should have a voice in
its adoption
An agency could issue a rule like no teacher who fails to score above 70 on the annual
exam shall be reemployed there is no PDP claim
No person without a B.A. may teach in this state this infringes upon liberty, but PDP
doesnt apply because its a rule
Note: APA doesnt apply to Londener or Bi-Metalic because theyre state, not
federal agencies

APA CONSTRAINTS: FORMAL RULEMAKING

553: RULEMAKING ONLY APPLIES TO SUBSTANTIVE LEGISLATIVE RULES
Section applies to rulemaking.
o Exceptions 553(a):
Military/foreign affairs function of the US
Or matter relating to agency management/personnel/public
property/loans/grants/benefits/contracts
So SSA disability benefits would fit into this exception
(seems big)
553(b): Notice
o Does not apply to:
Interpretative rules, policy statements, rules of agency procedure
Good cause exception when agency finds good cause that notice
and public comment are impracticable, unnecessary, or contrary to
the public interest
o But many agencies choose to follow process voluntarily, even though they
fall into this HUGE category of exceptions under 553(a)(2)
553(c): Comment and statement of basis and purpose
o Only in play if 553(b) is in play
If organic statute says hearing on the record, the 556 and 557 are in play (FL
East Coast)
Congressional authorization to make legislative-like decisions is presumed to have
authorized legislative-like procedures unless the organic statute clearly mandates
formality

26

TYPES OF RULES
Substantive Rules
Legislative Rules restructure adjudication, have full force and effect of law
Interpretive Rules relevant legal standard remains the same, but the interpretive
rule has some weight (same weight as precedent); policy statements
ADLER SAYS: If an agency has gone through notice and comment rulemaking, its a
legislative rule, otherwise its interpretive
Procedural Rules
ADJUDICATORY V. LEGISLATIVE DECISIONS
Bi-Metallic says: where a rule of conduct applies to more than a few people, its
impracticable that everyone should have a direct voice in its adoption
but congress enacts private legislation affecting individuals and courts decide class
actions, ergo, number of people is relevant but not dispositive.
Legislative judgments are forward-looking, which adjudicatory judgments are
retrospective
Factual basis: adjudicative facts are about the parties and their activities while
legislative facts dont concern immediate parties but are general facts that help decide
questions of law, policy, and discretion
Parties have little to contribute with legislative facts, but with adjudicative facts they
can affect accuracy

WIRTZ v. BALDON ELECTRICT CO. (DC COURT OF APPEALS, 1963)

FACTS: Walsh-Healy Statue orders an agency to issue a formal rule on the record after
opportunity for a hearing establishing minimum wage in a certain industry. The
Department of Labor used wage tables determined by a survey to support their rule. The
Dept. refused to disclose the underlying data that was collected confidentially.

HOLDING: Court finds a violation of 556(d), because there was no opportunity for crossexamination with regard to the information used in the tables the underlying data must
be available to the opposing parties to the extent necessary for rebuttal and crossexamination. Act requires that all wage determinations be made on the record after
opportunity for hearing trigger procedures in 556 per Florida East Coast.
The agency must provide its underlying data for meaningful cross-examination
and rebuttal
VIOLATION OF 556(D)
DOL didnt disclose the info they used to create the tables, and thus there was no
opportunity for cross-examination
NOTE: Formal Rulemaking is relatively rare in practice because it embodies so many
features of a judicial trial. IR requires much less, so agencies choose to do this since most
statutes dont trigger FR
FORMAL RULEMAKING V. FORMAL ADJUDICATION
In both cases, cross-examination can be eliminated if theres no prejudice (i.e. if its
not requires for full and true disclosure of the facts)
Last Sentence Cases apply to formal rule making (i.e. court may adopt procedures
for submission of evidence only in written form if the party is not prejudiced thereby)

27

 554 doesnt apply to rule making, ergo theres no bar on in-house consultation

APA CONSTRAINTS: INFORMAL RULEMAKING (I.E.

NOTICE AND COMMENT)
PROCEDURES FOR IR
706(2)(a) ACR
553 duty to respond to comments
553 Disclosure implicit in right to comment, which is not meaningful if the
agency can rely upon contestable material with no opportunity to refute
553 Final rule must be logical outgrowth of initial notice
706(2)(c) within statutory requirements

AUTOMOTIVE PARTS & ACCESSORIES ASSN v. BOYD (DC CIR.,

1968)

Facts: Motor Vehicle Safety Std No. 202 requires new US manufactured passenger
cars be factory-equipped with front seat head restraints that meet specific federal
standards. Auto accessories manufacturers claimed invalid b/c lacked FRM 556/557
requirements
Legislative history indicates Congress intended informal RM. Didnt include 556, 557
triggers.
Secretary will utilize the informal rulemaking procedures of 553 and that he need
hold a formal hearing under 556/557 only if he determines that such a hearing is
desirable.
Court defines what is required by the standard in the act as concise general
statement of basis and purpose
Requirement of a statement of basis and purpose must be interpreted in a
manner consistent with a reviewing courts need to see what major issues of
policy were ventilated by the informal proceedings and why the agency
reacted to them as it did.

NATL TIRE DEALERS & RETREADERS ASSOC. v. BRINEGAR (DC

CIR., 1974)

FACTS: Federal Motor Vehicle Safety Std No. 117 forces all tire dealers to
permanently label retreaded tire side w/info
Determination arbitrary under APA 706. Permanent labeling doesnt significantly
relate to Acts purpose.
Lots of N & C responses that the permanent labeling is economically unfeasible and
unreasonably costly.
Agency can base decision on info available in its files and upon its expertise, but cant
allude to info outside the record where powerful doubts exist by on-the-record
comments as to practicality agency rationale put forward not plausible given the
comments arbitrary
Substance and procedure seemingly merging in rationality review of laws;
failure to get sufficient evidence on practicability substantive, failure to respond
procedural?
Assumption that review for arbitrariness is less demanding than review for substantial
evidence is mistaken.

28

MOTOR VEHICLE MANUFACTURERS v. STATE FARM (SCOTUS,

1983)
FACTS: NHTSA administers the Motor Vehicle Safety Act: NHTSA shall issue rules that
meet the need for motor vehicle safety. In 1977 NHTSA issued the passive restraint rule,
but repealed it in 1981. The Insurance companies are challenging this by saying that its a
violation of 706(2)(a)
HOLDING: rescission of the rule was arbitrary and capricious because there was no good
reason for not requiring airbags (they didnt look to all the options, etc.) for something to
NOT be arbitrary and capricious, you need contemporaneous reasons not post hoc
rationalization
For a rule to survive a 706(2)(a) challenge, there must have been actual,
contemporaneous rationality
Adler thinks that 706(2)(c) would have been available in this case, but D chose not to use
it.
This is one of his favorite cases (part of the crucible)
706(2)(A) ARBITRARY AND CAPRICIOUS REVIEW
This is important because there arent as many constraints in informal RM
The agencys actual, contemporaneous reasoning is captured in the statement
of purpose, and the court must rule that these reasons are good enough.
This is more demanding than the minimum rationality a statue must bear in
order to withstand analysis under DP
See footnote 9 in State Farm: We no not view as equivalent the presumption of
constitutionality afforded legislation drafted by congress and the presumption of
regularity afforded an agency in fulfilling its statutory mandate. different
standard of review stricter standard
Legislative SDP is minimal rationality: as long as the court can imagine
some reason and some facts supporting governments decisions it will be
sustained
Post Lochner, SDP challenge to at least an economic agency rule will fail
Maybe the point of the APA is filling in for the constitutional constraints
that have been gone since 1937
Because 706(2)(a) doesnt apply to congress if they dont like the fact that a court
invalidated a statute, then they can legislate and there wont be any arbitrary and
capricious challenge.

PACIFIC STATES BOX & BASKET v. WHITE (SCOTUS, 1935)

Facts: State agency promulgates rules relating to the size of strawberry boxes (state
agency not subject to APA, and its pre-APA anyway.)
Issue: Does this rule violate rights under DP clause of 14th Amendment?
Holding: No. Arbitrary and capricious (substantive challenges) to agencies exercising
delegated power is hypothetical rationality, at least for traditional police powers
delegated by the Constitution. Indifferent to legislative motives or reasoning.
SDP scrutiny of an agency decision is going to be done using hypothetical
rationality

29

UNITED STATES v. NOVA SCOTIA FOOD PRODUCTS CORP. (2nd

CIRCUIT APPEALS, 1977)
FACTS: FDA promulgated a rule requiring hot-process smoked fish be heated by a certain
type of controlled heat process (TTS). Appellants argue that the regulation is invalid of
553 violations, specifically non-disclosure of evidence, and that the agency wasnt
sufficiently responsive to comments.
HOLDING: The court rules that this is a violation of 553 because the agency was not
responsive to written comments, and did not disclose their evidence
For comments to be meaningful, the agency must disclose the data upon which
they rely and they must be sufficiently responsive to comments
(Court in effect mandates a quasi-official record)
Articulation requirement is explicit
553(c): the agency shall incorporate in the rules adopted a concise general
statement of their basis and purpose
553 Requires an agency to give interested persons an opportunity to participate in
the rule making through submission of written data, views, or arguments, with or
without the opportunity for oral presentation.
Implicit requirement of responsiveness: agency doesnt have to respond to each
comment individually, but must at least respond to the main points
Final rule must be logical outgrowth of initial notice.
Some change is fine but radical change isnt.
706(2)(a) does NOT require all of this
Why does the court read these implicit requirements into 553?
By requiring the agency to disclose evidence, it seems like the court is essentially
mandating a public record in a way, in a common law fashion, the court is building
up the requirements and essentially mimicking the requirements for formal
rulemaking but mandating an official record
Whats important is the language of meaningful comment need all the available
information for this
Note: this case does NOT violate 706(2)(a) because reasoned decision-making does
not require public participation, not does it require comment or evidence disclosure.
NOTE: Although this is a lower court decision, its generally followed.

VERMONT YANKEE NUCLEAR POWER v. NATURAL RESOURCES

DEFENSE COUNCIL (SUPREME COURT, 1978)
FACTS: This involves an operating license hearing during which issues about
environmental concerns arise. Nuclear Regulatory Commission then enacts a rule that says
that for purposes of licensing nuclear plans, the environmental effects of disposing spent
fuel wont be counted zero cost and zero weight is attached to the environmental effects
of spent fuel. Public interest groups want cross-examination, and full oral hearing

30

HOLDING: Court holds that 553 never requires cross-examination rights or oral
presentation of direct evidence.
553 does not require cross examination or oral presentation of evidence
Courts should defer to agencies regarding procedural requirements of statutes
(not constitutional DP); deference to agency decisions on statutory procedural
grounds
Two readings
1. Broad Courts defer to agencies regarding procedural questions under all statutes
2. Narrower Courts defer to agencies regarding procedural questions under agency
organic statutes
This is only in regards to the agencys organic statute, not cross-cutting
706(2)(a) does NOT require participatory procedures
NOTE: In this case there is both adjudication (nuclear plant licensing) and rulemaking
(relevance of disposal to approval of nuclear plants)
FOR IR, THERES NO BAN ON EX PARTE CONTACTS
Although there still are some protections, theres still opportunity for interest groups
to influence people behind closed doors
Pro-prohibition comments are not fair and full w/ ex parte
Anti-prohibition theyre already prohibited in formal, so whats the point of
prohibiting them in informal it seems implied that that are fewer restrictions in
informal.

ASSOCIATION OF NATIONAL ADVERTISERS, INC. v. FTC (DC

APPEALS 1979)
FACTS: FTC made a rule regulating childrens advertising and D challenged the rule based
on the chairmans impartiality because hed made anti-advertising statements at an earlier
time. Limited cross-examination right in the FTC statute on certain issues
ISSUE: Whether chairman is disqualified from presiding over the rulemaking because of his
openly anti-advertising stance
For an agency member to be disqualified for impartiality, there must be clear and
convincing evidence (i.e. compelling proof) that they have an unalterably closed
mind on matters critical to the disposition of the proceeding
This is essentially an impossible standard to fulfill.
Note: there are different notions of impartiality financial bias and prejudgment. This
doctrine seems to deal with the prejudgment of adjudicatory facts
556(b) formal adjudication - The functions of presiding employees and of employees
participating in decisions in accordance with section 557 of this title shall be conducted in
an impartial manner

THE ADJUDICATION-RULEMAKING CHOICE

31

I.E. WHETHER OR NOT TO HAVE A LEGISLATIVE RULE

CHOICE TO HAVE A LEGISLATIVE RULE

LEGISLATIVE RULE
Restructures the inquiry in adjudication so that the inquiry simply becomes what is
the status of the claimant under the rule this is the only hearing right you have
Legislative rules truncate whatever hearing rights you have through a statute
Truncates, restructures, and limits the issues with respect to your hearing
This is why 553 puts fairly substantial requirements on legislative rulemaking
Courts will read statutory rulemaking authorization pretty generally to authorize a
legislative rule
Possible Objections to Legislative Rules
Statutory/APA right to hearing in Adjudication (but the court in Campbell says that if
an agencys statute simply talks about hearings this means hearings as limited by
the valid legal rules that the agency issues)
Procedural Due Process
PDP Analysis of Agencys Use of a Legislative Rule
Bi-Metallic says the process that leads up to the grid rule itself is not subject to PDP
Assuming theres a protected interest, PDP applies to the structure of hearing, NOT to
the choice to use a legislative rule to truncate adjudication
PDP only gives you hearing rights as structured through valid legislative rules you
only get hearing rights concerning the application of legislative rules
HYPO: If agency said we will adjudicate disability claims using only written hearings
This WOULD be a PDP claim because Loudermill says that although agencies may try
to limit hearing rights, courts need not defer
Note: its not really a choice between the two because even with the rule in place,
theres still some adjudication what the legislative rule does is truncate the
issues involved in adjudication

HECKLER v. CAMPBELL (SCOTUS, 1983)

FACTS: Administrators relied on grid rule to determine disability status rather than
determining status on a case-by-case basis as had been done until 1978. SSA issues the
grid rule to determine status and whether there are actually jobs for people like her
through informal rulemaking. Grid based on four dimension (physical ability, age,
education, previous work). Seems like Act gives applicants right to some kind of hearing
ISSUE: Whether the Secretary of HHS may rely on grid rule to determine a claimants right
to SS benefits
HOLDING: the use of grid rule does not conflict with the statute and theyre not arbitrary
or capricious
Legislative rules define and narrow relevant legal framework for adjudication one
only needs to argue over the applicability of the rule

32

Grid Rule is a Legislative Rule

Even when the agencys statute requires it to provide a hearing, this is trumped by
the agencys rulemaking authority.
Can only have hearing rights as it relates to your status under the rule
Grid rule challenge
At the agency stage can challenge ONLY status under grid rule
BUT can challenge the grid rule itself at judicial review stage

33

Triangular way of looking at things:

(1) What is Campbells status under the grid rule (i.e. which of the categories does she
fit into?) Formal oral adjudicatory hearing
(2) Whether theres a correlation between the grid rule and the statute grid rule
promulgated pursuant to 553 informal rulemaking
(3) Are there jobs for Campbell? There is no procedure where she gets to raise this
issue
Grid Rule: People with
certain characteristics
receive benefits
Issue 1:
Formal
Adjudication

Issue 2:
Informal Rulemaking

Statute: Disability
benefits if not gainful
work available in
national economy

Issue 3:
Disappears because
of legislative Rule

Campbel
l
Before the grid rule the issue was the claimants status under the statute, now its
the status under the grid rule
Before the rule she could introduce evidence on the availability of jobs, engage in
cross-examination, get an opinion on the issue from an ALJ
When LR is in effect, all of the 556 elements only apply to what is the individual
status under the rule; she gets no hearing re: what jobs are in the national economy
The
this

Court notes that there may be exceptions in certain cases, but Adler thinks
is fluff
How could you tell what the exception would be?
Why doesnt Campbell have an exception?

Legal objection to the use of legislative rules

No statutory authorization to issue legislative rule
Not raised in this case because SSA: Adopt reasonable and proper rules and
regulations to regulate and provide for the nature and extent of the proof and
evidence and the method of taking and furnishing the same.
Although theres no clear authority to issue LRs, VT Yankee and Pension Benefit say
that an agency gets deference in interpreting the statute and rule making authority
Benefits of using Legislative Rules
Less expensive than case-by-case adjudication
Status under the grid rule is clearer, rules provide notice
Costs of using Legislative Rules
Rules and both under and over-inclusive relative to the underlying statute
Leads to some inaccurate results
Note: a 706(2)(a) challenge to the decision to have a rule at all is VERY difficult

34

NATIONAL PETROLEUM REFINERS v. FTC (DC APPEALS, 1973)

FACTS: FTCs governing statute, Trade Commission Act, says the FTC is empowered to
prevent unfair methods of competition. FTC issues bright line rule regarding octane
posting. They enforce this rule by an initial adjudicative hearing before an ALJ for a cease
and desist order.
ISSUE: Does FTC have power to issue legislative rules given the ambiguous rulemaking
provision and given the fact that FTC hasnt asserted rulemaking power from inception in
1914 until 1962
HOLDING: Yes. SCOTUS bends over backwards to read the Act as granting FTC
rulemaking power. Just because they havent used it since Schechter doesnt mean that
they cant start using it now
Courts should read ambiguous rulemaking grants to authorize legislative rules
Without a rule saying that the failure to post octane ratings is unfair, the issue in the case
would be whether, in this particular case, its unfair not to post ratings. With the legislative
rule, the only question is whether they did or did not post the ratings.
NOTE: Rules also have an incentive effect (i.e. if the agency says that its unfair not to post
ratings, then businesses will have an incentive to post)
Octane Rule: Gas
station owners
must post octane
ratings

Informal Rulemaking
Statute:
Unfair
methods of
competition

Formal
Adjudication

This issue
disappears

Petroleum Refiners
Challenges to the claim that agencys act allows the issuance of rules
FTC doesnt claim to be able to authorize rules until 1962
The rulemaking grant is ambiguous and congress has put more specific rulemaking
grants in certain areas on the assumption that the general provision doesnt authorize
legislative rules
Schechter says the FTC is not a rulemaking body but rather an adjudication agency

AIR LINE PILOTS ASSN v. QUESADA (2nd CIRCUIT APPEALS, 1961)

FACTS: FAA promulgated a regulation saying that no individual who has reached his 60th
birthday shall be utilized or serve as a pilot on any aircraft while engages in air carrier
operations
ISSUE: Whether this is invalid because it was issued without the holding of adjudicatory
proceedings required by the APA, or whether the regulation deprived the pilots of property
in their pilots licenses without DP
HOLDING: This is a rule being applied to individuals; its not adjudication.

35

The use of a valid legislative rule to narrow a hearing right is consistent with PDP,
even if it provides no exceptions
Court finds both a property interest and a liberty interest, but theres no PDP violation
because its a rule (Bi-Metallic).
This is a rule because it applies generally and is forward-looking.
Elaborate procedural requirements are patently incompatible with the expectation with
which Congress intended that the Administrators should act in the promulgation of safety
rules.
The age 60 cut off is not arbitrary and discriminatory; its reasonable because supported by
medical evidence and aviation experts.

US DEPT OF AGRICULTURE v. MURRAY (SCOTUS, 1973)

FACTS: USDA had a rule which made the entire household of which a tax dependent was
a member ineligible for food stamps for two years: (1) during the tax year for which the
dependency was claimed, and (2) during the next 12 months. During these two-periods of
time 5(b) creates a conclusive presumption that the tax-dependents household is not
needy and has access to nutritional adequacy.
HOLDING: The deduction taken for the benefit of the parent in the prior year is not a
rational measure of the need of a different household with which the child of the taxdeducting parent lives and rests on an irrebuttable presumption often contrary to fact it
therefore lacks a critical ingredient of due process
Food Stamp Act 5(c): No food stamps for household members if someone is claimed
as a tax dependent by someone else
Court holds that this is invalid because its an irrebuttable presumption that Murray is
not poor
Tax dependency in a prior year seems to have no relation to the need of the
dependent in the following year.
SDP claim (i.e. rule is arbitrary)
PDP claim (statute should be applied directly v. through an intermediary rule this
claim has failed)
Constitutional right to an exception but if theres a right to an exception in every
case, then the rule disappears.
What about an extreme case? Absent a clear way to determine extremity, its best that
courts let this doctrine die
Irrebuttable presumption doctrine is abandoned in 1974
Irrebuttable Presumption doctrine (Constitutional right to an exception in extreme
cases) became defunct after the 1970s

LEGAL CONSTRAINTS ON LEGISLATIVE RULES

Agency must be authorized to issue a Legislative Rules (Petroleum Refiners construes
RM authority generously)
One could challenge it as violating the underlying statute
706(2)(a) but this usually wont work

36

 One could challenge a rule as over or under inclusive, but theres no requirement that
scope between the rule and the statute match up no need for fit.
LR is not subject to PDP Campbell
Arguments that wont work
SDP no SDP rights outside of privacy
PDP doesnt apply to the RM-ADJ choice
Irrebuttable presumption is a dead doctrine
If a general right to exemption was argued, the rules function would unravel there
are no generic exceptions
Bottom Line
o Agencies, legally, have a lot of discretion to use legislative rules to restructure
adjudication as long as they comply with 553 and 706(2)(a) and all the other
doctrines above

CHOICE NOT TO HAVE A LEGISLATIVE RULE

SECURITIES & EXCHANGE COMMISSION v. CHENERY CORP.
(SCOTUS, 1947)
FACTS: Public Utility Holding Company Act (PUHCA): Public utility holding companies
must be reorganized to rid layer structure. Reorganization plans were submitted to SEC
for approval. Plans must be fair and equitable and not detrimental to the public
interest this is an open-ended delegation. Under the plan, the management continues to
have majority control. SEC disapproves of this practice and the plan, and says that
although theres no proof of outright fraud, theres potential for fraud and conflict of
interest. Chenery challenges this because there were no rules in place and they lacked
notice.
HOLDING: uphold agency decision; agency had discretion in deciding whether or not to
issue a legislative rule.
Unless a statute clearly requires rulemaking, an agency can choose whether or not
to issue a legislative rule, and the courts will generally defer to the agencys
decision.
Application of a pre-existing, open-ended statutory standard in adjudication is not
a retroactivity problem.
Legality of the agencys failure to issue a legislative rule
Although some lower courts have found DP violations in an agencys failure to issue a
legislative rule this is basically defunct and DP failures are rarely found in a failure
to issue a legislative rule
No PDP because theres no PDP constraints on rulemaking also, court defers to the
agencys choice to engage in rule making or adjudication
706(2)(a) generally, not having a legislative rule isnt arbitrary and capricious (Bell
Aerospace)
The choice made between proceeding by general rule or by individual ad hoc
litigation is one that lies primarily in the informed discretion of the agency.
Unless a statute is clear in requiring rulemaking, Pension Benefit and VT Yankee call
for deference in the agencys reading of the statute

37

RULE V. PRECEDENT
The utterances in the Chenery administrative decision may seem rule-like
This is precedent, not rule
If decisions like that functioned as legislative rules, then agencies would never go
through the process of rule making.
A decision like this is given more weight that non-legal commentary, but it doesnt
have the force of a rule
Parties can argue that the precedent is wrong and that the judge misconstrued the
statute and that there should have been a different result this isnt the same with
rules
The agency cant decline to follow a rule the way they can decline to follow a
precedent

BOWEN v. GEORGTOWN UNIVERSITY HOSPITAL

Case says that an agency may not issue a retroactive legislative rule unless theres
clear statutory authorization
Example of retrospective rule: tax laws saying in 2002 that if you engaged in
something then you must do x, y, z. Retroactive criminal penalties are always
unconstitutional, but there are some cases where retroactive would be okay (i.e. tax)
Prospective rules are presumptively authorized unless the statute withdraws the
authority, but when it comes to retroactive rules, its the opposite theres a
presumption against retroactivity
Presumption against retroactive legislative rules unless explicitly authorized by
statute.

MORTON v. RUIZ (SCOTUS, 1974)

FACTS: The statute says the benefits could be given to Indians living on or near
reservations. BIA has no LR, but the internal manual says theyll reserve benefits only for
NAs living on reservations. Ramon Ruiz was denied general assistance benefits from the
BIA because he resided outside the boundaries of the reservation. The agency denies him
benefits based on the internal manual, which is NOT a legislative rule.
HOLDING: Congress had not consciously restricted relief funds to Indians who resided on
reservations so the agency should promulgate some standard by which to adjudicate
individual cases so its not ad hoc.
Absent LR, agency must directly apply statute. Agency still has discretion not to
engage in LR.
BIAs manual statement is an interpretive rule or policy statement, NOT a legislative rule.
Assistance eligibility requirements must be published for it to be a real legislative rule; if
not, the determination is ad hoc
How can we reconcile this with Chenery?
Maybe here we have a rare 706(2)(a) violation
Maybe this is overruling Chenery and now were policing legislative rulemaking more
broadly
Adler thinks that this isnt an outlier, but that all the talk of rulemaking is dicta

38

 Could argue that Ruizs real holding was wrong because Ruiz lived near the
reservation and congress intended for him to have aid
Adler thinks that this is a condition case i.e. if an agency wants to put in place and
follow a standard that doesnt exactly track the statutory standard, it must do this
through rulemaking.
This is really a decision about the fact that the agency violated its statute.
Ways to read Morton
One possibility: BIA is required to issue a LR, which results in tension with Chenery
ADLER SAYS: the agency violated the statute on or near; the statute was
misapplied
Agency truncated the statute without a LR, the court rejects the
agencys authority to do this
This would be consistent with Chenery
Also consistent with VT Yankee because its about substantive not
procedural issues
HYPO: If the agency had said during adjudication the x miles away wasnt near enough,
that would be okay because the agency would be interpreting the statute.
Here, the agency treated the manual as a LR and didnt allow the statute to come into play
in adjudication, which was a violation.

AMERICAN MINING CONGRESS v. MINE SAFETY & HEALTH

ADMINISTRATION (DC APPEALS, 1993)
FACTS: The agency is supposed to promote mine safety and issues an LR saying diagnoses
of occupational diseases must be reported to the agency. The agency issues Program
Policy Letters (PPL) that clarify what diagnosis means. PPLs do not afford notice and
comment.
ISSUE: Whether the PPLs of the Mine Safety and Health administration stating the
agencys position that certain x-ray readings qualify as diagnoses of lung disease within
the meaning of the agency reporting regulations, are interpretive rules under the APA.
HOLD: Yes, these are interpretive rules and theres no requirement for the agency to
engage in notice and comment rulemaking for these.
Interpretive rules dont require notice and comment
Legislative rule says certain illnesses must be reported to the agency when diagnosed. The
interpretive rule clarifies that by explaining what a diagnosis is.
INTERPRETIVE RULES
Serve the same purpose as precedent they have some weight bearing on agency
adjudication, but they dont redefine or truncate issues like legislative rules do.
In this case, the court defines an IR as a rule or statement issued by an agency to
advise the public of an agencys construction of the statutes or rules which it
administers
Arent subject to the rules in 553
Have less force than legislative rules

39

 Difference between interpretive rules and agency precedent is only the context in
which theyre issued
LEGISLATIVE RULES V. INTERPRETIVE RULES
When is a general statement by the agency an interpretive rule rather than a
legislative rule? Courts have different approaches
Intent to bind test does it look like the agency intends to have this function
like a legislative rule? If so, its a legislative rule and must be issued in
compliance with 553
o Can take a broad or narrow reading (narrow is taken by D.C. circuit) but the
intent to bind is still confusing.
In American Mining the court uses a narrower 4-prong test (if the answer to any
prong is affirmative, its a legislative rule)
(1) Whether in the absence of the rule there would not be an adequate
legislative basis for enforcement action or other agency action to confer
benefits or ensure the performance duties
(2) Whether the agency has published the rule in the code of federal regulations
(3) Whether the agency has explicitly invoked its general legislative authority, or
(4) Whether the rule effectively amends a prior legislative rule
Adlers Test: was it issued during notice and comment rulemaking? If the
agency engaged in RM process, then its a LR and it can restructure
adjudication
o Adlers test isnt the law of the land the tendency of the lower courts is to
follow a narrow test or a broader test for characterizing rules as being
legislative even if the agency hasnt written the rule pursuant to 553
NOTE: The code of federal regulations is NOT the federal register; the code of federal
regulations is the regulatory analog of the U.S. Code
INTERPRETIVE RULES & POLICY STATEMENTS
APA permits agencies to issue IRs (553 includes them in the language)
ADLER SAYS: APA permits IRs, which function like agency precedent theyre
persuasive but not binding. Wont distinguish between IRs and policy statement
both are general agency statements that arent LR
Only difference between IRs/policy statements and precedent is the point at which
they are issued
IRs issues outside the adjudicatory time
Precedent is announced during adjudication

SEPARATION OF POWERS
CONGRESSIONAL AND PRESIDENTIAL CONTROL OF
AGENCIES
Agencies arent solely a part of the executive branch; there are statutorily created
agencies, plus three constitutionally created institutions that oversee the administrative
state
Congress can control agencies by statutes
Legislative supremacy is embodied in 706(2)(c)

40

Issue here: what are the legally permissible control mechanisms by which the three
branches can exercise control over agencies short of passing a statute?
Constitutional and sub-constitutional restraints (i.e. APA)

THE LEGISLATIVE VETO

INS v. CHADHA (SCOTUS, 1983)
FACTS: Immigration and Nationality Act allows for the deportation of certain aliens and
allows the AG to suspend the deportation. The suspension can be overturned by a vote of
the house or the senate alone. In this case, the legislative judge suspends Chadhas
deportation, but then the house subcommittee issues a resolution vetoing the suspension of
his deportation
HOLDING: Legislative veto violates Art I, 7 the bicameralism and presentment clauses.
Legislative action (adjudication) by congress must be exercised in accordance with
bicameralism and presentment
No legislative veto.
Court Says: Legislative Action by the Federal Government must comply with
bicameralism and the presentment clause
Bicameralism and Presentment are the basic structure for legislation need the
majority of both chambers and the Presidents signature for enactment. If its not
signed by the president, you need 2/3 of each chamber.
By Federal Government the court means Congress
By Legislative Action the court means legal action (i.e. action which changes rights
and duties)
ADLERS REFINED HOLDING:
Legal action by congress must be exercised in accordance with bicameralism and
presentment. The court strikes down the legislative veto Art I, 7 applies not only to RM,
but to all legal action
Chadha is adjudication its a formally particular legal statement made to Chadha and five
others that defines their rights. Legislative Action doesnt mean rule making but rather
legal action
Congress ends up being tightly restrained in the ways that it can control agencies
short of passing statutes the president is not as tightly constrained.
What is the Court Saying?
SCOTUS seems to be saying that legislative action by the federal government must
comply with bicameralism and presentment clauses
What the court REALLY seems to be saying, is that if congress is going to
issue a general directive, it must be pursuant to bicameralism and
presentment, but its different for agencies
Legislative general legal directive, supreme legal directive (i.e. statutes) something
that has legal effect

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 Maybe the court is saying that congress may not adjudicate? If so, why dont they just
say that rather than striking down a ton of legislative vetoes (Adler says this wont
work see below)
Legislative vetoes are unconstitutional post-Chadha
One-House, two-house, and committee vetoes
HYPO: Report and Wait Mechanism
Major agency rules shall be reported to congress and are not effective for 60 days
after issuance
Congress may by statute repeal the rules
This is constitutional under Chadha theres no legal action here by Congress without
Bicameralism and Presentment because its a statute
This is okay if Congress turns the agencies into mere proposers whose rules are not
effective until Congress legislates.
This is fine because nothing that Congress is doing represents legal action with
Bicameralism and Presentment
Congressional Review Act: Agency must report all rules to Congress and for special
subcategory (i.e. major rule) theres also a delay in the effective date Congress can
overturn by statute
HYPO: Environmental RM Agency Agency shall ensure that the environment
remains reasonably clean. Agency only has RM (not adjudication or enforcement)
power. Congress wants one-house legislative veto.
Unconstitutional under Chadha, although this might be a good way to inject
democratic values
It would allow Congress to pick and choose rules without going through the
democratic requirements of B&P. Just because an initial decision is democratic doesnt
mean that later actions taken pursuant to the decision will be democratic. Congress
establishing initial structure doesnt mean legislative vetoes will be democratic.
Possible alternative bases for Chadha
This is an adjudication, which is unconstitutional by Congress.
Not an accurate statement of legal doctrine. Private bills - statutes singling
out particular people for benefits - enacted all the time and not
unconstitutional
Congressional adjudication is contemplated in other situations (i.e.
impeachment)
Given its long standing practice of conferring benefits, a proposition that
Congress couldnt adjudicate wouldnt be true
Adjudication by Congress doesnt satisfy PDP a possible argument, but unclear how
court would rule
Bill of Attainder prohibits Congress from imposing punishment on a particular person.
Although this isnt criminal punishment, its sufficient hardship and is motivated by
retributive judgment possible argument.
Problems with the holding
Legislative vetoes become less troubling as we move from committee veto (really
troubling) to one house (middle) to two house (less worrisome)
Committee veto of adjudication is really upsetting, but what about a two-house veto of
agency rulemaking?
Normative Concerns re: Legislative vetoes

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 Vetoes of adjudication notion that we need an impartial process

We dont want low-visibility decisions (i.e. committee chair veto without public
awareness), but two-house veto is open to public awareness
Vetoes may be political
HYPO: Open ended statute: Authorizes agency action and authorizes legislative
veto by house or committee
No non-delegation problem (this is a dead doctrine)
Could argue legal constraints as a matter of DP of under the APA to limit agency
action
706(2)(a), 554557 or 553 all constrain the action
BUT dont apply to legislative veto b/c Congress is excepted from APA
definition of agency. House doesnt need APA informal hearing and veto
wont be subject to A&C review suspicion of broad delegation of power to
agency and Congressional legislative veto powers that arent constrained.

APPOINTMENT AND REMOVAL

BUCKLEY v. VALEO (SCOTUS, 1976)
FACTS: Federal Election Commission does information-gathering, rulemaking, adjudication,
and enforcement (i.e. can initiate civil action). They have six voting commissioners who are
appointed as follows: 2 (Senate President pro tempore), 2 (speaker of the house), 2
(president). Both house and senate must confirm all six nominees.
HOLDING: In this case, the appointments clause was violated for all six commissioners,
regardless of whether they are inferior or principle officers of the US.
Officers of the US one who exercises adjudicative, rulemaking, or enforcement
authority must be appointed pursuant to the appointments clause
FEDERAL OFFICIALS
Members of Congress
President
Article III Judges
OFFICERS OF THE US
Principle
Inferior
ADDITIONAL CATEORIES
Employees of the US (recognized in footnote in Buckley) lesser functionaries subject
to the officers of the US
The Head of an agency is the principal officer, lower positions with significant authority are
inferior officers, and everyone else in the agency is an employee
Framework: We have an organic statute, which provides for the structure of agency heads,
and we have to decide whether or not its constitutional
APPOINTMENTS CLAUSE (ART. II, 2)

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 Only applies to officers of the US President must appoint principal officers of the
US with Senate advice and consent. However inferior officers (i.e. non-principle) may
(permissive) be appointed in three different ways: (1) by President alone, (2) by heads
of departments (i.e. cabinet secretaries), and (2) by courts of law.
What exactly is the distinction between principal officers and inferior? Buckley
doesnt address this because the mechanism used in the FEC act doesnt comply with
any of the requirements
For purposes of the appointments clause, an officer is someone who exercises
significant authority
Any appointee exercising significant authority pursuant to the laws of the US is an
Officer of the US and therefore must be appointed in the manner prescribed by 2,
clause 2 of the article.
o Court says that rulemaking, adjudication, and enforcement all count as
significant functions this is disjunctive
Thus, if they are exercised by the agency, its unconstitutional because the
commissioners werent appointed pursuant to the appointments clause
Implies that we dont want someone isnt an officer of the US to have these functions
HYPO: If we couple information gathering with subpoena power
This is probably fine a pure information gathering agency, even with subpoena
power, is different because the subpoena power is purely ancillary to what theyre
doing
But once it goes beyond this and any of the other functions come into play, then the
appointments clause is implicated.
The court means the various modalities by which governmental officials
change the legal rights of individuals.
The exception is subpoena power we could have a congressional agency
with jut subpoena power, but beyond that the appointments clause comes
into play
Officers of the US v. Officer of Congress
Officer of the US any person exercising significant authority pursuant to the laws
of the US (including not only enforcement, but also any of the classic ways in which
government can change legal positions of a private person, i.e. rulemaking and
adjudication), Art II, 2 appointment applies.
Officer of Congress someone who congress appoints to do something
Both Buckley and Chadha view Congresss job as legislating, NOT controlling
governance (i.e. legislative vetoes, appointments)
RECAP:
Appointments Clause does NOT provide Congressional role in appointing officers,
principal or inferior.
Officers of the US doesnt include employees of US = lesser functionaries
subordinate to US Officers
Nothing in Buckley denies Congress all power to appoint its own inferior officers to
carry out appropriate legislative functions. Court has explicitly recognized a
category of Officers of Congress.

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Categories of Federal Actors:

President
Members of Congress
Federal Judges
Officers of the US Appointments Clause only covers these folks
(= persons exercising significant authority pursuant to laws of US)
Includes functions of RM, adjudication, and enforcement

Principal Officer of US
Inferior Officer of US
Employees of US = lesser functionaries subordinate to Officers of US
Officers (employees) of Congress (Congressional control in selection)

BOWSHER v. SYNAR (SCOTUS, 1986)

FACTS: President signed into law the Balanced Budget and Emergency Deficit Control Act
of 1985, meant to eliminate the federal budget deficit. Automatic reduction provisions:
Comptroller general recommends spending cuts to the president. Then the president must
issue a sequestration order mandating the spending reductions specified by the
Comptroller General unless Congress reduces spending by legislation.
Comptroller general is appointment by the president with Senate consent. He issues
mandatory budget reduction order. If the deficit is above a certain target, OMB reports to
Comptroller General who exercises a budget-cutting function. There is no problem with
appointment. He is removable by impeachment or a joint resolution of Congress for
cause (i.e. disability, neglect of duty, ineffectiveness, malfeasance, moral turpitude)
HOLDING: Given the functions of the agency, its head cant be removed by Congress.
Congress may only remove officials like the CG by impeachment because they are officers
of the US as defined by Buckley.
Congress may not remove officer of the U.S. except through impeachment
Adlers reading
Congress may have no role in the removal of any officers of the US as defined by the
significant authority test of Buckley except by impeachment
The fact that that Comptroller executes the law, but is removable by congress
violates the principle of separation of powers
Separation of powers the first section of each article vests the corresponding
power in each branch. These vesting clauses create the idea of separation of
powers.
Article II, 4 talks about the removal of officers The President, Vice President and
all civil officers of the United States, shall be removed from office on impeachment for,
and conviction of, treason, bribery, or other high crimes and misdemeanors.
For congress, given the principle of separation of powers, the court reads this as both
a floor and a ceiling
Why does the court rely on separation of powers rather than Article II removal
power?
Executive officers may be removed by methods other than impeachment
This clause, unlike the appointments clause, is not exhaustive

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The mechanism struck down in this case involves a joint resolution of congress
(i.e. a statute) this shows how serious the court is in regulating congresss role in
removal even a full-fledged joint resolution is unconstitutional
Buckley and Bowsher create symmetry between appointment and removal of
officers of the US congress is limited on both ends.
After this case, Congress has no non-impeachment role in removing officers of the US
(i.e. any official with executive, legislative, or judicial functions.)
Bowsher no congressional removal of officers, and Buckley says no congressional
appointment
Officer in Prosecutorial agency:
Congress cant have role in appointment
(aside from confirmation).

Officer in Rulemaking agency:

Congress cant have role in appointment
(aside from confirmation).

At a minimum, Bowsher says that

Congress cant have a role in removal
either.

Weird to prohibit Congresss role in

Appointment but not in removal.
Intuition
is for symmetry.

This decision is consistent with Chadha, which prohibits legislative vetoes

whenever they amount to legal action by Congress
This is consistent because allowing Congress a removal power would mean that it
controls the officer and can coerce him, which is akin to a legislative veto
Appointment Power v. Removal Power
Is one functionally more powerful than the other?
With appointments, you can choose something at the beginning, but removal power is
a constant threat
Chadha, Buckley, and Bowsher all limit congressional non-legislative authority.
Bowsher creates appointment-removal symmetry.
On the removal side, the constitutional text is fuzzier
Theres no removal clause (although the Constitution does talk about the removal of
officers through impeachment but this isnt as comprehensive as the appointments
clause) impeachment isnt the sole modality by which you can remove an officer of
the US
Its best to read Bowsher and Buckley as a pair although the court doesnt specify
what subset of officials cant be removed except through impeachment, it makes sense
to say that any officer of the US in the Buckley sense also applies to Bowsher

HUMPHREYS EXECUTOR v. U.S. (SCOTUS, 1935)

***This Test is No Longer Used***
FACTS: Roosevelt requested the Humphrey resign from the FTC because of ideological
differences. Humphrey refused and Roosevelt removed him. Organic statute said the
President could remove FTC commissioners for cause. Challenges come from Art. II, 1
and 3 (executive power with president and take care clause)
HOLDING: This restriction on the presidential removal power is fine.
Only purely executive agencies mandate at will removal. Its fine under that
constitution if there are restrictions on the presidential removal of heads of
independent agencies.

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Independent v. Executive Agencies

Very little difference
Appointment procedure for agency heads is the same appointment clause is in play
Vast majority of people who work in the agency are civil servants
o Appointed by merit, removable for cause
Both subjected to statutes which may or may not be open ended
Only constitutionally interesting difference has to do with removal of agency heads
Executive removable at will by president (including for policy differences)
EPA, FDA, NHTSA
Independent Presidents removal power to constrained by the for cause
provisions (this provides some insulation), sometimes they cant remove at
all (like the independent council)
FTC, NLRB, SEC, FCC, ICC, FEC
FTC

is an independent agency
Gathers information
Enforces unfair method of competition statute through cease and desist orders
Adjudicates violations of fair competition on a case-by-case basis

Issue in this case: are the restrictions on the presidents removal power valid
under the Constitution?
Two-Step Inquiry:
(1) Statutory Questions: Does the organic statute explicitly or implicitly restrict
the presidents removal power?
FTC Act says that the commissioner can be removed by the president for various
stated causes, but its not clear whether this is necessary or sufficient. Court says
here its necessary, i.e. absent one of the causes, the president cant remove
(2) Constitutional Question: is this restriction constitutional?
Challengers say that this violates separation of powers (Art I, 1) because the
president is not able to remove at will
Also violates the take care clause (Art II 3 president must take care that the laws
by faithfully executed)
An agency is purely an executive agency if it only has enforcement powers only in
this case would the vesting clause and take care clause come in to mandate at will
removal.

MORRISON v. OLSON (SCOTUS, 1988)

***Current Doctrine***
FACTS: Independent Counsel is appointed by a Special Court (Art III Judges) upon the
Attorney Generals application. IC is removable by AG for cause. Function is prosecution
purely executive. This is constitutional because IC is an inferior officer. President does
not have removal power.
HOLDING: This is fine.
Independent agencies are constitutional where the removal restriction doesnt
impede the Presidents ability to fulfill his constitutional duty

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Same Two-Step inquiry from above

(1) Statutory Questions: Does the organic statute explicitly or implicitly restrict
the presidents removal power?
If no, then congress has created an executive agency and theres not constitutional
objection
If so (i.e. only for cause, or only by the AG), then this is, by statute, an independent
agency, and we must ask
(2) Constitutional Question: is this constitutional?
Separation of Powers? Take Care Clause?
New test
Does the limitation on presidential removal impede the presidents ability to fulfill his
constitutional duty?
A more function/balancing test than HE
Although this test is different, the result of H.E. would have been the same
What does this mean? What are the circumstances under which a restriction of the
presidents removal power will be unconstitutional?
We dont know the court in Morrison doesnt tell us
Inferior officer test
Shes subject to removal by a higher executive branch official other than the
President (a subordinate)
o Some degree of significant supervision or control by a principal officer
o Edmond case says this is dominant factor
She can only perform limited duties
Her office has limited Jurisdiction
She has a limited Tenure
(note inferior can be appointed other than by the president)
Reasons for New Test
Independent Council is removable by the AG for cause or when the special division
terminates the investigation. President has NO removal power, ergo, this is an
independent agency.
BUT, Court says its hard to think of a purely executive agency, but this looks like its
executive because it does enforcement and prosecution Thus under H.E. this lack of
presidential removal power would be unconstitutional
Ergo, Court makes up new test
Adlers interpretation of this test
Test asks in an open-ended way: What are the pros and cons of full-blown presidential
oversight?
Pros:
Democratic legitimacy of presidential connection
President can correct various kind of agency pathologies (i.e. interest group
capture, lack of efficiency)
Cons:
Agency has more expertise than the Whitehouse
Concern about presidential conflict of interest (this is whats going on in
Morrison)
Ps involvement may decrease quality of agency decision-making

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ADLER SAYS: where we have an agency thats involved in rulemaking or enforcement,

independence is constitutionally questionable absent some conflict of interest type story.
Where the agency is involved in adjudication then independence should be a little more
constitutionally secure because of conflict of interest, you want more political insulation.
But even in these cases, where the agency doesnt have adjudicatory function, there may
be reasons for limiting the presidents removal power.
Courts Deference to Congresss Structural Choice
Court has upheld independent in H.E., Morrison, and Mistretta balancing test is
used deferentially
Pattern seems to be that the Court is going to be reluctant to find an independent
agency unconstitutional because it will defer to Congresss structural choice
One reason may be that because of Bicameralism and Presentment, the President
must have agreed in the first instance with setting up the agency
Was the Court right to change the test?
H.E. is a better interpretation of the Constitutional provisions, which speak to
executive power and thus maps more closely to the functional (purely executive) test
H.E. is a bright-line test, which Morrison is more open ended (suggests that you could
have an enforcement agency that is not executive yet wont be independent). BUT
Bright-line tests can be both over and under inclusive
Morrison is open ended, so it can lead to a correct result every time, but its more
difficult to apply
Presidential v. Congressional Roles
Over all picture
o Very restrictive of Congresss role
Buckley: no Congressional role in appointment of Officers of the US
(other than senate consent)
Bowsher: No Congressional role in removal of Officers of the US
(consistent with Chadha)
o President has a major role
Appointment (as least permissible and maybe mandatory)
AND in removal.
Why accept Presidential but not congressional involvement?
Congresss constitutional role is legislative activity the Court is channeling
congresss legislative role by limiting its other functions
Majoritarian Democracy, in which president is a salient actor v. Interest
Group Politics

EXECUTIVE ORDERS AND REGULATORY REVIEW

OVERVIEW
An executive order is a formal presidential directive thats published in the federal
register.
Were concerned with the effect of these formal published presidential orders on
agency decision-making. (Were focusing on rulemaking examples)
Statutes can be addressed to the president, or to someone else
If theyre addressed to the president, then the president can issue rules himself, or
can delegate the task of issuing rules

49

3 U.S.C. 301 expressly permits the President to delegate to executive

officials who are subject to Senate confirmation any function that Congress
has vested in the President by statute
Ex. President shall issue rules that meet need for motor vehicle
safety. If P delegates power und MVSA to head of NHTS, its ok
under statute.
Scope of Ps EO power is not at issue
More typically, a statute will be addressed to an official other than the
president (see State Farm)
o Ex. MVSA Secretary of Transportation shall issue rules that meet the need
for motor vehicle safety
o

Two Questions:
(1) Does the president have executive order power?
(2) What is the effect of this power on 706(2)(c) and 706(2)(a)?

DOES

THE

PRESIDENT HAVE

THE

EXECUTIVE ORDER POWER??

ADLERS VIEW
EO power with Executive but not Independent Agencies
Executive order power should be generally seen as coupled with removability at will. If is
removability at will is constitutionally mandated, so is executive order power. Its up to
congress to choose whether add removability at will, so its up to congress to choose
whether or add EO power, but Adler assumes it goes together
Congress can set up any one of the following possibilities
(1) Independent Agency where
(a) Agency head is removable only for cause
(b) President does not have exec. order power
(2) Executive Agency where
(a) Agency head is removable at will
(b) President have executive order power
(3) Independent Agency where
(a) Agency head is removable for cause
(b) President has exec. order power
(4) Executive Agency where
(a) Head is removable at will
(b) President lacks exec. order power
NOTE: Where the president has at will removal power, the head of the agency will do the
presidents bidding
When does the President have executive order power?
Traditional Scholarly view (less presidentialist view)
Where a statute is addressed to an agency, the president lacks executive
order power in general
President lacks the power to direct agency action with respect to both
executive and independent agencies

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 Unitary President View (Pro-presidentialist)

President has EO power over executive and independent agencies
Adler/Kagans View
President has EO power over only Exec, but not independent agencies
Given Morrison deference, Congress has much discretion in creating an
independent or executive agency Adler thinks decision of subjecting
agency to EO power largely a congressional choice
If congress wants to mix and match it can, i.e., okay to have removable at will
but no EO power
Question of EO power is just a question of statutory construction
Usually, a statute wont speak about EO power, so ADLER thinks that it goes along
with the removal power. (i.e. if the head is removable for cause, Adler presumes that the
president lacks EO power absent a specific statement to the contrary. But technically,
congress can set up any of the 4 choices.)
BOTTOM LINE:
Executive order power should be generally seen as coupled with removability at will. If is
removability at will is constitutionally mandated, so is executive order power. Its up to
congress to choose whether add removability at will, so its up to congress to choose
whether or add EO power, but Adler assumes it goes together
Presumably, even with independent agencies, theres still a certain class of orders that the
president can issue.

YOUNGSTOWN SHEET & TUBE CO. v. SAWYER (SCOTUS, 1952)

President Truman issues EO to Secretary of Commerce (exec. agency) to seize steel

mills.
Court invalidates the EO
Secretarys power to seize the mills under the order must have its source in a grant of
power to the president either from the constitution or from a constitutionally enacted
statute
As court interprets the statutes in Youngstown, no govt official had been authorized
the power to seize the steel mills. Where Secretary lacked power, couldnt be granted
through EO.
Youngstown is the extraordinary case where there was no statutory authorization
whatsoever. Thus its not really relevant to our discussion of the first issue where
statutory power is vested in President or officials.
In Youngstown, there is not explicit statutory authorization for the agency official to take
the challenged action
However, in State Farm, the statute clearly authorizes someone to do something NHTSA
can enact or repeal passive restraint rules, so the auto industry cant say theyre free from
regulation, the issue is just who gets to make the decision.
In State Farm, the statute was not issued to the president, but the question is can the
president control the regulations?
WHAT

IS THE

EFFECT

OF

THIS POWER?

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Whats the effect of a duly issued presidential order on judicial review?

Depends on what kind of legal challenges are being raised, Options:
RULEMAKING
706(2)(c) Substantive Violation Challenge
(Agency action violates underlying statute)
EO Should not override ministerial (i.e. clear) 706(2)(c) violations in rulemaking
Ex: Presidents EO says to repeal the air bag rule and SF claims that repealing air bag
rule violates MVSA.
Marbury/Kendall talk about ministerial duties
Marbury says that when something is ministerial, the presence of an executive order
shouldnt change the judicial review
Ministerial means clear, determinate an incontestable duty.
Kendell and Marbury say: In cases of a clear violation of the underlying statute and
thus a successful 706(2)(c) challenge, Court should correct the violation regardless of
the EO
What About Unclear Violations?
Given Chevrons deference, we dont need to answer this question
In general, courts enforce 706(2)(c) deferentially (Chevron), although some say that
courts shouldnt be so deferential
ADLER SAYS: when theres an unclear violation, Court is bound by law, regardless of
whether the violations clear or not. Presidential intervention shouldnt change the
judicial result.
Chevron alludes to an answer: in general, if underlying statute is unclear, the court
shouldnt step in but rather defer to agency when dealing with a 706(2)(c) claim.
706(2)(A): ARBITRARY

AND

CAPRICIOUS CHALLENGE

ADLER SAYS: A duly issued executive order overrides a 706(2)(a) challenge. (The
difference between this and 706(2)(c) is that this is procedural and that is substantive.)
If the president really has EO power, then the agency is bound to obey ergo, true
EO power should override 706(2)(a)
Adler thinks we should follow this absent a clear congressional speech to the contrary
APA doesnt apply to President; it only governs agencies (Franklin v. Mass.)
You cant argue the EO is A&C, only that the agency action is A&C
State Farms dissent would have been correct if an EO was issued, but it wasnt
ADJUDICATION
HYPO: NHTSA chooses to use adjudication (Chenery permissive choice) to recall
cars
Two methods of influence:
o 1. General/Cross-Cutting EO: NHTSA should prioritize safety. (Like 12866)
Analysis here is the same for rulemaking.
o 2. Case-Specific EO: Prez instructs NHTSA to take a particular action against
a particular firm.
Different: Could implicate PDP concerns
Could also violate some provisions of the APA if formal rulemaking.
EXECUTIVE ORDER 12866 COST BENEFIT ORDER
May change any day now

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 Amended by 13422, which was put in place by Clinton and kept in place without major
modifications by Bush; originated in 12291, which was put in place by Regan
Its a structural, overarching order with various parts, some focus on agency use of
CBA
CBA applies to executive agencies, not independent agencies, applies to legislative
rules used in internal rulemakings, doesnt apply to orders, and theres an exemption
for formal rulemaking
Two separation requirements
o Substantive in issuing rules, the agency must comply with the CBA
standard where permitted by law (statute)
it would be more controversial if the order required agencies to do
things regardless of their organic statute but this isnt the case. 1(b)
(6) puts together the CD standard
o Procedural for sufficiently major rules (more than $100 million per year),
the agency has to prepare a fairly extencive CBA document, which is then
sent to OMB for review.
Resolution of conflicts provision: if the OMB and the agency cant work it out
conflicts can be resolved by the president and the chief of staff
Final point: this is not judicially enforceable if the agency does engage in CBA and
prepares the document, this may be something that the court can consult in doing
judicial review, but if the agency fails to comply with the order, they dont get judicial
relief, rather the pres and the OMB has to enforce the order, not the courts
Cost benefit has a loose and a strict sense CBA in the loose sense in simply
considering the pros and cons, in the strict sense, CBA is the sum of the willingness to
pay
If you look closely at 12866 it says that agencies should try to do this in the strict
sense, but doesnt mandate it the extent to which the pres. and OMB are satisfied is
up to OMB.
Other thing, like we talked about in CB re: Matthews Adler views cost benefit as a
rough proxy for overall well-being, it is NOT a particular good mechanism for
capturing equity and distributional things
Diff between 12866 and 12291 - encourages agencies to attend to equity.
In theory CBA in the strict sense is thinking about different sections of the population
who will be affected by the rule (some positive some negative) and you want to reduce
the effects to money values.) Whats the money equivalent to the effect of the
individual? We do this by asking what the individual is willing to pay for the rule, or
what the individual is willing to accept in compensation if theyre harmed by the rule.
The new section 4(c) makes the regulatory policy officer a gate keeper for rulemaking
(note: regulatory policy officer must be a presidential appointee)
4(c) applied to both independent and executive agencies this is a strong assertion of
presidential power
If one doesnt think that the president in general has the power to issue executive
orders to independent agencies without some other authorization, then this is not okay

INFORMAL CONTROL
Formal Control Mechanism: Appointment, Removal, Legislative Veto, Executive Orders
Informal Control Mechanisms: Ex Parte Contacts

SIERRA CLUB v. COSTLE (DC Circuit 1981)

FACTS: EPA engages in IR under the CAA. They revised regulations dealing with the
permissible level of emission from coal burning plans. Enviro groups challenge the rule as

53

being too lenient. The industry feels its too strict and both sides engage in furious ex
parte lobbying. The rule enacted is less stringent than the one seemingly being
implemented. Challenge is based allegation on the Ex Parte Contacts by the Whitehouse
and Congress influenced RM results. At one point, the EPA was thinking about a stricter
limit, but backed down
No constraint on ex parte contacts by the president or congress during informal
rulemaking
The Clean Air Act has additional requirements for disclosure of evidence: that
documents of central relevance to rule making must be publicized, and placed in the public
docket. All evidence (regardless of whether its relied upon) must be placed in the public
record.
This is more stringent that APA 553 which requires
(1) If agencys relying of evidence in promulgating the rule, the agency must publish
their evidence ex ante (N.S.)
(2) If the agency doesnt want to rely on evidence, then theres no requirement for
publication
CAA does not prohibit ex parte contacts
Rulemaking

Adjudication

Formal

Not allowed under APA 557(d)

Not allowed under APA 557(d)

There may be PDP constraints to
presidential ex parte contacts.

Informal

Not prohibited

Possible PDP challenge.

Because Informal Rule making doesnt prohibit ex parte contacts by individual

citizens, it would be weird to prohibit ex parte contacts by the president why
constrain the president more than a private citizen? Court says that Congress, like
President, can have ex parte contacts
Formal Rulemaking, 557(d)(2): Congress may ask an agency ex parte about the case,
and Congress may give info without violating 557, but Congress cant dictate

DC FEDERATION OF CIVIL ASSOCIATIONS v. VOLPE (1970s)

Dead Letter
Sen. Natcher wanted a bridge built, and told Secr of Transportation hed withhold
mass transit funds unless bridge was built.
Rule 2-prong test of when IR can be overturned on grounds of Congressional
pressure:
o (1) Pressure on agency to decide based on extraneous, statutorily irrelevant
considerations
o (2) Pressure affected the agency decision
Strictly applying test would radically change the way D.C. works. Congress always
pressuring agencies.
In theory, theres a D.C. Federation test, but in practice its a dead letter

54

 So theres no practical constraint on Congressional ex parte contacts in

informal rulemaking
We still have 706(2)(a) and 2(c) review if improper pressure leads to an
inappropriate result.

SECTION VI: JUDICIAL REVIEW

SCOPE OF REVIEW
APA PROVISIONS
701 Explains whats reviewable
Two types of unreviewability under the APA
701(a)(1) Statutes preclude judicial review (Johnson v. Robinson)
o This provision says that there is a 702 cause of action, but its barred by
another statute
o In deciding whether another statute bars judicial review, we have to bring in
all the relevant sources of statutory interpretation (test, structure, legislative
history, etc.)
701(a)(2) agency action committed to agency discretion by law (Doe & Chaney)
no other law
701(a)(2) and (1) are disjunctive youre barred if the court finds either one
applicable
702 Broad cause of action
Creates a broad cause of action for challenges to agency actions (as defined in
501(13)
Contains a specific waiver of sovereign immunity for cases seeking non-monetary
damages (money damages can still be a problem)
Assuming you can meet the other threshold exceptions, you can move to 706
706 Kinds of challenges
Goes through the kind of challenges that you can make, if you succeed on the merits
706(2)(a) arbitrary and capricious
706(2)(b) constitutional challenges (i.e. PDD, EP, First amendment)
706(2)(c) substantive statutory challenge to agency action
706(2)(d) procedural challenges to agency action both from organic statute and APA
o Challenges in the 550s would come into court under this heading
706(2)(e) not supported by substantial evidence
706(2)(f) we should ignore this
JURISDICTION
Unless the organic statute says something about jurisdiction, default jurisdiction is 28
U.S.C. 1331 (The district courts shall have original jurisdiction of all civil actions
arising under the Constitution, laws, or treaties of the United States.)
Sometimes there are special jurisdictional provisions where people go right to appeals
court

55

CHEVRON, USA v. NATURAL RESOURCES DEFENSE COUNCIL (???,

1984)
FACTS: In 1980, the EPA issued a smoke stack rule, but then shifted and issued a bubble
rule this is an executive agency engaging in deregulation. The issue here is whether the
bubble rule is a valid interpretation of the Clean Air Act. Bring a 706(2)(c) challenge
HOLDING: The agency choice is fine.
Two-step test Is the statute clear? Is the agencys decision reasonable?
Clear Error standard for striking down statutory challenges to agency decision
under agencys organic statute
NOTE: This holding is only applicable to a statute that an agency has a specific duty to
administer its NOT for crosscutting statutes like the APA
This is a 706(2)(c) challenge the rule is inconsistent with the statutory language
and thus impermissible
Court give deference to the agencys interpretation of the substantive issues
Review of statutory claims employs a clear error standard
This applies to both independent and executive agencies because its based on agency
expertise, not executive deference
Two-step test:
1) Is the statute clear? (706(2)(c))
If yes Either a clear violation or requirement and inquiry ends
If no step 2
2) Is the agency decision unreasonable? (706(2)(a))
Is this a reasonable/permissible interpretation of statue?
What is step 2 really adding?
If a decision is unreasonable in step 2, wont it also be a violation under step 1?
Is there any independent meaning?
A decision could be arbitrary and capricious but be fine under Step 1
Possible interpretation: only look at the text for step 1, but at step 2 look at legislative
history, structure, etc.
BUT SEE Cardoza-Fonseca
ADLER: Step 2 is an unreasonable claim of procedural arbitrary and
capriciousness, while step 1 addresses true 706(2)(c) challenges, so
1) Is the action a clear violation of the underlying statute (706)(2)(c)?
This is the statutory inquiry use the clear error standards
2) If not, is the action arbitrary and capricious under 706(2)(a)?
Looks for a flawed reasoning process an agency decision may be consistent with the
statute, but still have flawed reasoning
Reason for Adlers interpretation: Even if the statute is indeterminate, the court can still
say that the reasoning that led to the decision was arbitrary and capricious

56

Adler says: anyone whos uncomfortable with the demise of the non-delegation
doctrine, should be uncomfortable with Chevron. The Court is saying that 706(2)
(c) isnt going to deal with cases when the indeterminacy of the statute is high.
For 706(2)(c) purposes, the presence of executive orders doesnt matter it
doesnt override clear 706(2)(c) violations, and given Chevrons level of deference,
the court shouldnt step in for unclear violations
While VT Yankee and Pension Benefit require deference to agency where there is a
procedural challenge, Chevron says there should be a similar deferential stance
when dealing with substantive challenges

INS v. CARDOZA-FONSECA (1987)

Facts: Two different statutory standards interpreted by INS worded differently, but
interpreted by agency as the same:
o 243(h): Deportation must be withheld if aliens life or freedom would be
threatened
o 208(a): Asylum may be granted b/c of persecution or well-founded fear of
persecution
BOTH interpreted as clear probability of persecution
Issue: Can agency interpret different statutory language in the same way?
Holding: Fails at Step 1 Congress had spoken clearly by phrasing the standards in
different language. This makes clear that the two standards are not the same.
o Court suggests that a Step One Inquiry includes all relevant sources of
statutory interpretation (although Justices differ over what sources are
relevant)
Text (if this is the only criteria, agency wins)
Structure
Legislative history
Dictionary
Purpose

FDA v. BROWN AND WILLIAMSON TOBACCO CORP. (SCOTUS,

2000)
Facts: Whether cigarette falls into FDCA definition of drug and device.
Holding: Failed at Step One: Congress had spoken directly to the issue, and ruled out
cigarettes as being covered by the act.
o First, since cigarettes could never be safe, they could never be safe and
effective to be marketed Didnt fit under act
o Second, Series of statutes directed at cigarettes that Congress intended to keep
them on the market.
Read together, precluded FDAs reading.

US v. MEAD CORP (SCOTUS 2001)

FACTS: Customs services issued a ruling letter that the Mead Daily Planner is now subject
to diary tariffs. (Issuing a ruling letter is like informal adjudication). Issue is whether
this tariff classification gets Chevron-type deference
HOLDING: no Chevron deference because it doesnt carry the force of law.
Substantive Challenges to Informal Adjudication do not get Chevron deference

57

This case is really just cutting back of substantive deference to informal orders.
The court says that this doesnt get deference because it doesnt have force of
law, but ADLER says is DOES have force of law. (force of law deals with whether of
not something is legally binding, i.e. whether it changes someones legal position)
Formal and Informal Rulemaking and Adjudication ALL have the force of law
Interpretive rules and policy statement dont have the force of law
The Court is collapsing the idea of force of law which the procedures that led up
to the decision. This is a case of informal adjudication.
MEAD is about substantive rather than procedural challenges
What if the customs service put in place a procedural rule? These dont have to be
adopted pursuant to notice and comment rulemaking.
BUT - Until Pension Benefit and VT Yankee are overruled, we should treat that as still
being enforced
BUT Skidmore deference may apply (if agency decision is persuasive thoroughness of
consideration? consistent with others? Expertise?). It is deference proportional to the
power to persuade
HYPO: FTC issues a rule: We believe that the failure to post octane ratings is unfair (FTC
can set unfair methods of competition)
Mead says that b/c the above rule is interpretive (i.e. no notice and comment) there is
no Chevron deference
Assume the FTC is enforcing this rule through formal adjudication (cease and desist
orders come from formal adjudication)
Without an interpretive rule in place, the issue in challenging a cease and desist order
under the statute is whether the statute is properly applied in that case. If this is the
issue in formal adjudication, the agency will get Chevron deference with regard to
this.
Interpretive rules dont get Chevron deference, but its not clear that this really
matters, because the rules dont restructure the adjudication very much, and the
agency gets deference with regard to that particular order
When does Chevron Apply?
Yes, order
Yes

Relatively Formal
Proceeding?
Yes (554, 557)
Yes (556, 557)

Informal Adjudication

Yes

NO

Informal Rulemaking

Yes

Yes see Nova

Scotia, Heckler n &
c, etc. (553)

Yes

Maybe

Maybe

Maybe

Force of Law
Formal Adjudication
Formal Rulemaking

Interpretive
Statements
PROCEDURAL
challenges 706(2)(D)

Chevron Applies?
Yes
Yes
Prob Not Skidmore
(intermediate level of
deference)

Under Vermont Yankee and Pension Benefit, agency will have

deference on procedural challenges: BUT: agency doesnt even
have to have an elaborate procedure to issue this procedural rule
b/c 553 only applies to substantive procedural rules. Thus, maybe
only deference to non-substantive procedural rules.

58

CITIZENS TO PRESERVE OVERTON PARK v. VOLPE (SCOTUS, 1971)

FACTS: Secretary of Transportation authorized the expenditure of federal funds for the
construction of a six-lane interstate highway through Overton park. Petitioners say this
violates 4(f) of the DOT Act of 1966, as amended, and 18(a) of the federal-aid hwy act of
1968. The statute says that you cant build a HWY through a park when theres a
reasonably prudent alternative. Volpe authorized funds for a HWY through Overton Park in
Memphis. This is informal adjudication, which is why the secretary gets away with having
almost no procedure.
Judicial Review must be based on the record before the agency at the time of
decision
IA No hearing and no statement of readings
Court reviews initial order authorizing the funds
Parties are trying to introduce affidavits, but Court holds that judicial review must be
based on record before agency at time of its decision
Official Agency (Contemporaneous) Record Requirement
Record before agency
Agencys actual reason
556(e); official record,
557(c); required to publish
Formal Rulemaking (556,
exclusive basis for decision
opinion
557)
556(e); official record,
557(c)
Formal Adjudication
exclusive basis for decision
Nova Scotias interpretation
553(c); statement of basis
Informal Rulemaking
of 553(c) agency must
and purpose
put evidence in record for
comment
No requirement
No requirement to give
Informal adjudication
reasons
This is weird because the courts would review where there would be fewer procedural
requirements
Actual material before
Overton says take
Informal adjudication
administrator
depositions; Pension Benefit
(alt.)
says to remand to agency for
a (post-hoc) statement
How to determine actual reasons for purposes of 706(2)(A) review?
Overton Park court may look to subjective mental states of agency decision maker
i.e. take depositions.
Pension Benefit - where no public statement of reasons, remand for statement by the
agency. (Note: where there is a public statement of reasons, the court will look at
that.)
Court has retreated to Pension Benefit rule given these considerations:
The logic of inquiry pushes you toward Overton Park, but the rule is hugely
burdensome to agencies.
Also, if Overton Park is the rule, then why not also do it in formal
rulemaking/adjudication and informal rulemaking even when there is a public
statement of reasons? There would be a real undermining of the public statements.

59

NLRB v. HEARST PUBLICATIONS (SCOTUS, 1944)

FACTS: NLRA says: Firms must engage in collective bargaining with employees. NLRB
determines in a formal adjudication that the newsboys are employees and orders Hearst to
bargain with them.
APA 706(2)(e) overrules deferential standard in Hearst and allows courts to strike
down agency decisions for lack of substantial evidence, but this is duplicative of
706(2)(a) and (c)
Hearst challenges order, saying that the agency decision was not supported by
substantial evidence. (Current 706(2)(e) Challenge)
However, the court gives much deference to the agency
706(2)(e) only applies in judicial review of formal adjudication and rulemaking (the
types of decisions where 556 and 557 are in play)
706(2)(e) review is quite deferential.
o Adler and Scalia duplicative of 706(2)(a) and (c) and thus that it is
superfluous.
o The only way to see 2(e) as doing any type of work is to suggest that its a
more intensive kind of review
Hearst could have challenged this using
706(2)(a) based on the evidence, the finding and reasoning process was arbitrary
(de novo)
706(2)(c) NLRA doesnt authorize this order (this is de novo review what does the
court think the statute means?)

Universal Camera Corp. v. NLRB (1951)

o

Challenge to NLRB decision question was whether the examiners decision, based
on personal exposure to witness testimony, was part of the whole record on which
NLRBs decision had to be judged.
o Court addressed broader questions: Expressly overrules Hearst/Edison std of
review must take into account all evidence on record.
o Congressional intent in passing APA was to impose a stricter standard so
courts will abide that

REVIEWABILITY, TIMING, AND OTHER THRESHOLD

ISSUES
THRESHOLD ISSUES
Cause of Action 702
Jurisdiction Constitutional v. non-constitutional
Sovereign Immunity 702 waives sovereign immunity of US
Timing (ripeness, finality, mootness, exhaustion)
Standing (who gets to bring the suit? Must relate somehow to your own interest)
Reviewability 701
CAUSE OF ACTION
Gives you the legal basis/right for bringing suit

60

 APA 702 (first sentence) Any person suffering legal wrong b/c of agency action or
adversely affected / aggrieved by agency action w/in meaning of relevant statute is
entitled to judicial review
o Broad right of agency review
APA 551(13) defines agency action = rule, order, or failure to take action.
Heckler v Cheney: broad judicial review under 702 that includes agency inaction
undermined by other doctrines (timing, 701)
JURISDICTION
Does this particular court have jurisdiction?
If the statute silent on the appropriate court, then you go to Federal District Court
under 28 USC 1331.
Sometimes the organic statute will specify a court to go to, i.e., Court of Appeals in
MVSA/State Farm
SOVEREIGN IMMUNITY
702 waives sovereign immunity for non-monetary challenges to agency action (i.e.,
injunctive, declaratory relief)
REVIEWABILITY UNDER APA
701(a) No judicial review if:
o 701(a)(1) statute precludes judicial review
Comes into play when some statute other than APA (organic or other
statute) explicitly bars judicial review or is best interpreted as barring
judicial review.
o 701(a)(2) agency action is committed to agency discretion by law

61

FRAMEWORK

FOR

REVIEWABILITY

Statutory claims
Does 701(a)(1) or 701(a)(2) bar
review?

Judicial Review
Constitutional claims
Is review barred by
701(a)(1)? No, unless Congress
clearly specifies. (Clear statement
rule Robison); seems like there
would be an Art. III problem if
people didnt have access to courts

701(a)(1) non-APA statute

explicitly or best interpreted to bar
judicial review
701(a)(2) no law to apply
Adler view special factors that
weigh against reviewability

701(a)(2)? No; not applicable to

constitutional claims. (Webster)
Can only bar challenge because its a
political question (unusual)

If so, is that unconstitutional?

No generally Article III or PDP
challenges will not succeed.

If so, is that unconstitutional?

We dont know b/c Robison and
Webster do not reach this issue.
Instead they promulgate clear
statement rule and interpretation of
701(a)(2), which will mean that we
dont usually get to this issue, but it
hints it would be unconstitutional.

JOHNSON v. ROBISON (SCOTUS, 1974)

FACTS: VA statute gives educational benefits to veterans who served on active duty.
Conscientious objector Robison is denied benefits. 211 of the act bars judicial review.
Robison challenges this based on violations of constitutional provisions.
HOLDING: He can bring constitutional challenges.
Clear Statement Rule: Statements barring judicial review of agency action wont
be read to bar constitutional claims unless its clear that thats what congress
intended.
VA 211: No review of any VA decision of questions of law or fact arising under
the VA statute
APA 701(a)(1): no judicial review if its precluded by a statute
Court doesnt say whether barring judicial review of constitutional claims is
unconstitutional. (Theyre probably worried that this is the case, which is why they come
up with this clear statement rule)
HYPO: Robison* is not a conscientious objector, but he is denied benefits and thus seeks
judicial review claiming that the VA misinterpreted the statute he DID serve on active
duty, but the VA denied him benefits. Does he get judicial review?
No, review is clearly barred under the VA statute

62

 This is a paradigmatic application of 211 the statute is incorrectly applied

No review where statutes preclude judicial review (701(a)(1)) you must
look to the organic statute to see if its precluded
Why isnt precluding judicial review unconstitutional?
Its not a problem under Art III because congress created the lower federal courts and
thus their jurisdiction is within congressional control
What about PDP? Isnt judicial review a part of PDP? (On Friendlys list)
In practice, PDP challenges to judicial review have not been very successful
Theres no liberty interest in receiving a government benefit
Could try to meet the Roth LCE test and then use Mathews balancing
Why are the Constitutional Claims not barred if you can bar Statutory claims?
Could be that SCOTUS is safeguarding the constitution, barring Constitutional review
may violate Marbury
The constitution isnt option for congress and agencies the way that statutes might be.
Note: Adler has not found a case where the court has found a sufficiently clear intent to bar
constitutional review

HAMDI v. RUMSFELD (SCOTUS 2009)

FACTS: Hamdi detained as an enemy combatant under ACMF. He challenges detention
claiming that the statute has been misapplied to him. In particular he challenges the
procedures the government uses to classify him as an enemy combatant (affidavit of
government official saying hes an enemy combatant plus limited review by courts.
Government argues for review with some evidence standard
HOLDING: PDP generates some kind of hearing, and absent an agency hearing there must
be fuller judicial review
Limits
This is a case where theres no agency process at all
Court suggests that if there were more process they wouldnt hold this way
Also, this is detention, which is a very important interest
Similar to Boumedienne, but about a different constitutional issue

WEBSTER v. DOE (SCOTUS, 1988)

FACTS: National security act 102(c): Director may terminate employment whenever he
deems it necessary/advisable in the interests of the US. Doe was fired because of his
sexual orientation. He raises 706(2)(a) and Constitutional challenges
HOLDING: Court finds that 701(a)(2) bars review even if review is not barred under
701(a)(1). But he can still bring constitutional challenges
701(a)(2) bars review when there is no law to apply Special Factors bar
review
Black letter doctrine Overton Park; Webster; Chaney: 701(a)(2) comes into play
when there is no law to apply. -- no substantive guidance to the agency, no law
to apply court cant engage in review
Here, statute seems to impose no substantive constraints on agency decision; national
security interest?

63

Scalia and Adler:

Even with an open-ended statute, theres still 706(2)(a), so theres always law
to apply.
o For any statute, there will always be some content or act that violates it
o Beyond that, there are independent constraints like 706(2)(a), which requires
reasoned decision-making
Scalia (in dissent) agrees: 701(a)(2) puzzling b/c can always imagine a constraint on
the agency
Appears that 701(a)(2) and 706(2)(a) are in tension and conflict with one another
Usually exception for court to find 701(a)(2) unreviewability here, theres a national
security interest and an extremely open-ended organic statute, directive that
seemingly imposes no substantive constraints and only one procedural constraint
(sincerity on part of the director)
Special Factors
Court says the special factors bar judicial review (this is where common law comes
in)
Based on 701(a)(2), courts adopt their own common law principles to deal with the
issue of reviewability they can decide that certain types of cases are not reviewable
Chaneys special factor was inaction the court said they didnt think that suits
challenging inaction should be reviewable
Here the special factor is national security + absence of substantive constraint on the
agency
Highly open ended statute will likely be a special factor
Bottom Line: You have 701(a)(2) unreviewability when certain special factors come into
play and those factors will be articulated by the court on a case-by-case basis. Its a
NARROW exception (thats been applied only to non-constitutional claims)
So basically whenever the court decides that something is not reviewable.

HECKLER v. CHANEY (SCOTUS, 1985)

FACTS: Prison inmates petitioned FDA alleging that lethal injection drugs violated the
FDCA and were not approved for human executions. (FDCA regulates drugs says drugs
should be safe and effective) Claimed that FCA had failed to enforce the statute and bring
a 706(2)(a) challenge
Per 701(a)(2), agency non-enforcement is not reviewable
Reviewability of inaction
This DOES fall under 702 Right of Review because inaction counts as action
(551(13)), but court says that agency action is non-reviewable under 701(a)(2)
This doctrine covers cases when the agency hasnt thought about enforcement, and
when it has thought about enforcement, but hasnt done anything
o Reasoning: the court doesnt want to create perverse incentives for the
agency to pretend they hadnt thought about enforcement
If there are no standards, then its impossible for the court to evaluate for abuse of
discretion
Contrast with State Farm
Rights and duties were change in State Farm, even though it was inaction whereas
here no rights or duties changed

64

 Action includes all kinds of cases where the agency changes legal rights or duties (i.e.
issuing, repealing a rule/order)
In this case, theyve taken no enforcement steps
EXCEPTIONS
Inaction would be reviewable if congress provided a sufficiently clear enforcement
mandate in the statute
o Ex. FDCA says agency must seize all life-threatening drugs that violate the
statute
If there was statutory guidance with respect to the enforcement then its reviewed
also non-enforcement may still be challenged on constitutional ground
None of these barred by 701(a)(2)
Issuance of a rule
Repeal of a rule (State Farm) in effect it is action because theyve changed legal
obligations
Issuance of an order
Rescission of an order
701(a)(2) Overton Park: applies in different circumstances; even where Congress hasnt
affirmatively precluded review, court needs meaningful standard against which to judge
agency discretion
Rule: For refusals to enforce, generally presume judicial review not available b/c
committed to agency absolute discretion.
Reasons for the presumption of no judicial review
- Balancing of factors that are peculiarly w/in agency expertise
o where resources best spent, if agency likely to succeed, consistent policy
o agency better than the court at ordering its priorities
- When no action, generally not exercising coercive power
o not exceeding statutory powers
- Enforcement action decisions have traditionally been committed to AG
discretion prosecutorial discretion
- PRESUMPTION of unreviewability is rebuttable where substantive statute has
provided guidelines for the agency to follow in exercising its enf powers
- Ct not the best to police agency performance or interest balancing; first a decision
for the legislature
o APA 701(a)(2) not overcome by enforcement provisions of the FDCA
Adler
Difference is that in the other cases, agency has reached a decision and theres
something to review
With non-enforcement cases, its not necessarily the case that the agency has a made
a decision at all
Courts dont want to force agencies to make decisions when its resources are more
appropriately placed elsewhere decision forcing
Leaves to Congress the question of whether agencys decision not to institute decisions
should be judicially reviewable = presumption of unreviewability absent specific statutory
language providing guidelines for enforcement

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**Nothing like this has happened in Chaney. No ones legal rights or duties have changed.
FDA did not issue order that prison could use drugs or that prison couldnt use drugs.
They just refused to act.
Bottom Line: 701(a)(2) can be a challenge against both agency action and inaction.
Chaney finds inaction in agencys non-enforcement is not reviewable. The inaction doesnt
change legal rights or duties. On the other hand, repeal of a rule (State Farm) or failure to
modify (Horse) may be reviewable.

MASSACHUSETTS v. EPA (SCOTUS, 2007)

FACTS: Lots of organizations ask EPA to regulate GHGs under 202 of the Clean Air Act.
EPA considers, decides not to issue a rule, and issues a statement saying they dont have
authority under 202 to issue rules on GHGs and even if they did have the authority, it
would be a bad exercise of EPAs discretion because of the lack of research
Holding: Failure to enact a rule is reviewable under a highly deferential and extremely
limited review.
Agency failure to issue a rule IS reviewable.
Court reads 553(e) and 555(e) together
553(e): each agency shall give an interested person the right to petition for the
issuance, amendment, or repeal of a rule.
555(e): prompt notice of the denial of the application, accompanied by a brief
statement of the grounds for denial
This is consistent with the holding that the failure to issue a rule is reviewable
in contrast, theres not right to petition for enforcement or to get a brief response.
However, one could argue that the court got this wrong by saying that an alternate
reading of 555(e): there needs to be a proceeding. i.e., if there is a RM, then there is a
right to notice of denial of petition and explanation, but when theres no proceeding
then 555(e) doesnt attach.
Adler
Thinks this is a sloppy misreading of 553(e)
Also means that any time somebody petitions an agency for a rule making, the agency
has to give reasons why theyve declined to issue a rule AND that decision is subject
to review HUGE PROBLEM

FRANKLIN v. MASSACHUSETTS (SCOTUS, 1992)

FACTS: Mass challenges the inclusion of overseas personnel in census information and
calculation for representative. Census Act: Secretary of Commerce takes the census, then
delegates authority to the Bureau of the census, then issues a non-binding report and
calculation which is submitted to the president, who in turn report to Congress on the
number of reps per state. Mass. raises 706(2)(a) challenge and a Census Clause challenge
against Sec. of Commerce and President
HOLD: Court wont hear the case because the secretarys action isnt final.
Per 704, in order to challenge an agency action, it must final
President not an agency for the purposes of the APA; all challenges are gone

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Finality = action a consummation of an agencys decision-making process and directly

determines legal rights and duties
Agencys action is not final because the president has discretion to change it
The presidents action is final, but you cant challenge it because hes not an agency
551 and 701(b) define agency, but neither explicitly includes or excludes the
president
Court worries about limited presidential discretion, and thus wants a clearer
statement from congress before the president is considered an agency.
Court DOES adjudicate the merits of the constitutional objection
Bivens Constitution creates its own cause of action
If a government official has done something unconstitutional, you can go to court and
sue regardless of any statutory authorization
HYPO: President issues an executive order to NHTSA telling them to repeal the passive
restraint rule
Franklin says you cant challenge the presidents action
Court hasnt addressed whether you could challenge NHTSA Adler thinks that even
in this case, when the president has executive order authority, 702 and the rest of the
APA applies to the agency (Franklin doesnt contradict this)

RIPENESS: FITNESS AND HARDSHIP

Both Abbott Labs and Toilet Goods have finality, but issue that arises is ripeness (a kind of
common law, judge-made doctrine)
Jud review doctrines are cumulative you have to get over each of the separate threshold
elements

ABBOTT LABS v. GARDNER (SCOTUS, 1975)

FACTS: FDA issues an LR. FDCA says FDA may issue rules for efficient enforcement,
and FDA issues a rule that says manufacturers are required to post generic drug names
every time the proprietary name is posted. FDA tries to bar pre-enforcement review
HOLDING: This is ripe.
Ripeness involves evaluating both the fitness of the issues for judicial decision and
the hardship to the parties of withholding the court consideration
Pre-enforcement of a rule is OK
Conduct regulating rules satisfy the hardship prong
Abbott Labs Ripeness Test:
(1) Fitness

Would this be more fit at a later time?

This wont be a problem with adjudication because there wouldnt be a

later point where youd challenge the rule

67

For rulemaking, this also isnt a problem because, per Overton Park, in
evaluating challenges, the court will look at the agencys record at the time
of decision for 706(2)(a)
(2) Hardship Most critical issue
Is there sufficient hardship to the parties if we wait until enforcement?
Fitness is not an issue in this case (see Overton Park record requirements)
In considering Hardship
In this case, its a conduct regulating rule imposes legal duties backed by sanctions
Could result in lots of hardship if it was enforced.
Ripeness doctrine basic rationale is to prevent the courts, through avoidance of
premature adjudication, from entangling themselves in abstract disagreements over
administrative policies, and also to protect the agency from judicial interference until an
admin decision has been formalized and its effects felt in a concrete way by the challenging
parties

TOILET GOODS ASSN v. GARDNER (SCOTUS, 1965)

FACTS: FDA issues a Legislative rule stating that certification for color additives may be
suspended if inspection is denied.
HOLDING: This is NOT ripe
Waiting until youre denied a benefit or waiting until your certification may be
revoked does not constitute a hardship.
If cosmetic manufacturers dont permit a site search, the FDA may suspend certification of
the site.
This fails the hardship prong of the ripeness test.
This is not a conduct regulating rule
It does not have onerous sanctions
Said agency may impose sanction
Benefit conferring rules generally dont satisfy the hardship prong. There can be
no judicial review until the particular benefit is refused.
Reno v. CSS - agency defines class of beneficiaries and the agency says that you must
have certain characteristics to have the benefits court says no hardship
Issuing/repealing an Order you will always have finality, fitness, and hardship.
Pre-enforcement challenges to issuing/repealing a Rule fitness shouldnt be a problem
(b/c of overton park); main issue is hardship Abbot says yet to hardship for conduct
regulating rules, but with other types of rule (i.e. denial of benefits), its not clear that
theres hardship.
Enforcement challenge generally

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o
o

FDA order firms go to court to challenge order

FDA goes to court, suing firms for violating rule can challenge rule then
because its possible to challenge rule at that point challenge of rule is a defense (see
Schechter)
Challenges are available at the enforcement stage, whether that means that
affected party is going to initiate challenge OR if party is brought into court by US and
then raises challenge as a defense

703 agency action is subject to review both in civil and criminal

proceedings for enforcement

In fact, there are SO MANY enforcement stage challenges that court

really wants to make sure it makes sense to challenge rule at pre-enforcement
stage

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