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Administrative Law Spring 2013 Professor Healy I. General and Background of Agencies A.

Agencies actually execute laws passed by Cong 1) IRS collects taxes, EPA administers Clean Air Act, Social Security Administration pays Social Security, etc. B. Activities of Agencies 1) Regulating Private Conduct (ex. OSHA regulating workplaces) 2) Disbursing Entitlements (Medicaid/Medicare) 3) Managing Federal Property (ex. National Park Service) 4) Other (collecting taxes, issuing passport, etc.) C. Sources of Authority 1) Constitution 2) Administrative Procedure Act (APA) 3) Organic Statute of Agency (a) Statute/Act that creates the agency i. Often outlines power and responsibilities (b) When agency wants to affect legal rights of persons, must act pursuant to legal authority, almost always granted by statute (no real inherent power) 4) Administrative Common Law D. Agency Action 1) Usually in context of rulemaking (RM) or adjudication (adj) E. Contexts for Regulatory Action (CRA) & Development of Judicial Attitudes Toward Admin Agencies (JA) 1) ICC v. Cinci, New Orleans & TX Pacific Railway (a) CRA: Reg action should be taken when monopoly power would otherwise be exercised as consequence of high entry costs i. W/o reg of railroads, high costs to enter market would result in monopoly exercised by large railroad and they could name their own price (b) Ct wary of agency overstepping boundaries i. More wary of proscriptive power than review power of 3 options on pg. 2 (look in book for this) Proscriptive = RM Retrospective = Adj ii. More skeptical of agency as legislator vs. adjudicator (JA) Same w/ quasi-leg vs. quasi-jud (c) Rule: Ct will only give to the agency what Cong expressly gave to agency i. JA: Power must be expressly granted by Cong Here Cong only gave power to execute/enforce, NOT legislate Ambiguity is NOT sufficient to permit exercise of non-express power 2) Pennsylvania v. West Virginia

(a) Holding: Invalidated WV statute that restricted ability of pipeline companies to sell natural gas to consumers out of state (b) Really was dissent that was important i. Brandeis gave rationale for creating admin agencies b/c ct not competent to oversee reg of complex industries Gov't body that becomes expert and is fully informed is better suited to make decisions Very common JA in present day 3) National Broadcasting v. US (a) Holding: Regs adopted by FCC were appropriate exercise of agency authority i. Cong thought it necessary to create FCC as licensing agency to control entry into radio mkt ii. Very broad grant of authority upheld Power extending to public int, convenience, or necessity) (b) CRA: Reg action appropriate when there is allocation of scarce resources i. Lots of ppl tried to rushed into radio mkt that had limited airwave capacity that it became inefficient (c) CRA: Action appropriate when it is to reg activities that would cause harmful externalities if left unregulated (d) JA: After/During New Deal i. VERY deferential to agencies, allowed action to promote public int that was purpose of the statute 4) US v. Southwestern Cable (a) Holding: Ct upheld FCC ability to reg CATV systems under same statute in Natl Broad even though there was no explicit grant of auth to do so i. But, FCC had broad power to reg all interstate comm by wire or radio There was no explicit Cong grant b/c CATV wasnt invented when FCC statute passed, can't expect Cong to foresee all new tech Ct said this general power over comm was enough b/c there was no Cong intent indicating they did not have authority The admin action was imperative to the FCC overall purpose ii. Essentially an extension of Natl Broad (b) Contrary to ICC because Ct said you had to defer to agency when no Cong intent to contrary i. Broad deference to agency (c) JA: In absence of compelling Cong intent, Ct may not prohibit admin action needed to effectuate statutes purpose i. Presumption of agency power when there is ambiguity 5) FDA v. Brown & Williamson (a) Holding: Ambiguity NO LONGER sufficient for power when it would have great economic/political significance (b) Modern JA: Agency may exercise power w/ great economic consequence ONLY when Cong clearly grants that power i. Renders ambiguity insufficient for authorization of power when action has great economic consequence

When Due Process Claus of 14A Applies to Agency Action Londoner/Bi-Metallic Chart Nature of Interest Nature of Decision Affected Maker Nature of Decision Being Made Applicability Rationale of DPC

Londoner

Gov't takes property City Council to pay assessment Sitting as Board of Equalization (Not legislative)

Assessment based YES on extent to which prop is DPC requires benefited by the oral hearing improvement prior to (p.20) assessment

DPC requires hearing when Leg. Delegates decision making authority This decision making authority is an Adjudication

Bi-Metallic Gov't requires prop State Board of


or $ paid to be paid Equalization & Colorado based on increased Tax Commission caluation (affects large amounts of (Not Leg. body) ppl)

Across the board decision to increase all property values uniformly

NO DPC doesnt apply /require hearing

No DPC requirement when gov't action across the board manner based on general principal Acting in such way is Rulemaking

I. Due Process Clause & Adjudication A. Londoner 1) Owners complaint was they could object, but only w/ written objection 2) Statute was adequate b/c it provided for a hearing (a) BUT, application was improper b/c only written objection was provided for, and NO oral hearing i. This is what Ct invalidated action on 3) Had legislature done the exact same thing the council did, but directly themselves, it would have been fine BUT b/c they delegated hearing was reqd 4) HOLDINGDue process rights under the constitution attach to administrative agency hearings which involve adjudication, but not those which involve rulemaking or are legislative in nature. II. Due Process Clause & Adjudication A. Bi-Metallic 1) Key diff as to Londoner was that it was across the board decision here & Londoner only affected a select # of ppl

2) No Political Delegation Theory applied 3) No DPC Applicability (a) Would be too hard to do this when across the board decision based on general principle i. Note: It is NOT just a #s game where large # = RM and small # = Adj Turns instead on whether gov't is acting according to a general principle in across the board manner, really regardless of # of ppl (# is factor, not dispositive) Across the Board Manner & General Principle = Acting in way that you arent concerned w/ individual cases (b) More just a part of democratic process when gov't acts this way

For DPC to be triggered, it is necessary, but not sufficient, for it to be adjudicative decision DPC isnt triggered for rule-making and RM is unaffected by DPC See Prob @ end of 1st chapter (answer p.146 NB) Table isnt BL Law
Nature of Decision Legislative body, general rule Legislative body, individualized decision Subordinate body, general rule Subordinate body, individualized decision DPC Hearing? NO NO NO YES

Agency Action

Adjudication

Rulemaking

Formal Substantial procedures required

Informal Almost NO statutory APA requirements

Formal - Triggers 553(c) * If 553(c) triggered, procedures in 556, 557 apply - Procedeeing is on the record

Informal - Prcedural requirements in 553 - Proceeding is NOT on the record

Hybrid APA requirements imposed AND organic statute may impose additional requirements

Adjudication
I. General A. DP is concerned w/ right to NOTICE and OPPORTUNITY TO BE HEARD B. CNL Right to hearing may come into play with; 1) Adjudication- Agency process for issuing order; OR 2) Order Final disposition of an agency in matter other than RM C. Two Main Sources of Law 1) CN 5A is DPC (a) Substantive DP: Limits on what gov't can reg (b) Procedural DP: The procedures by which gov't may affect persons rights i. Represents a floor which agency must abide by & most statutes, ordinances etc. provide more than required by DP 2) APA (Put in small outline of noted sections) D. DP Cases: Two Questions at Issue 1) IS process due? 2) HOW MUCH process is due? II. Due Process Clause Cases A. Is Process Due There MUST be a right/protected int at stake 1) Property Interest (BD of Regents v. Roth) (a) Must have a legitimate claim of entitlement to interest i. NOT just a mere need/abstract expectation or desire for what is at stake ii. Entitlement: Determined by existing rules or understandings that may be found in state law May be express or implied in law in K or custom iii. Ex. School teacher had no property interest in further employment when agreement was for only 1 year when not rehired (Roth) So no DP is required & no hearing = OK (b) Welfare (Goldberg) & Disability (Matthews) satisfy this (c) NO property interest in pure procedure i. Ex. Gonzales no property interest in police procedure of enforcing restraining order 2) Liberty Interest (Roth & Paul v. Davis) (a) Deprivation of Characteristics of Free Person; OR i. Anything that physically restrains you (Jail) (b) Stigma Plus Theory i. Stigma: If gov't acts in way that stigmatizes a person ii. Plus: Must be something else that is part of deprivation Usually relates to future ability to gain employment after being fired or barred from something Not quite a property interest, but closely related b/c usually relates to employment

iii. P. 69 of Book State Law Argument Must always consider the timing and what/when the p wants it Ex. (Paul) State law defamation claim was for after damage had been done already and was post-deprivation remedy He wanted opp to be heard be heard before, not post-dep remedy iv. Loudermill: Gov't must actually publish info that has stigmatizing effect before there can be liberty dep 3) Bailey v. Richardson (old analysis) NOT BL LAW ANYMORE i. Gov't employee laid off then reinstated w/ cond. that could be removed if suspected of being disloyal to US Recd letter saying she was believed to be Commie ii. Procedures: Had hearing, lost, lost appeal No opp to cross accusers/hear evid against her iii. Holding: DPC did not apply b/c it was privilege to work for gov't not a right and DPC protects rights, not privileges Privilege could be taken away at any time w/o procedures Balance Test of little to no individual interest(b/c no right to gov't employment) vs. substantial gov't interest in ability to ensure loyalty of workers iv. Only limit was she couldnt be barred for 3 yrs b/c violated 6A right to cross accusers B. How Much Process is Due 1) Matthews v. Eldridge Test (a) Private Interest of Claimant i. Goldberg (welfare interest case) set the gold std for what is a substantial private interest Cannot be much more important than welfare b/c that = means to live ii. Matthews disability not quite as important as welfare b/c not need based You could get welfare if denied disability Always consider other programs that could diminish loss iii. NOT a case by case determination, but instead look at general nature of private interest (b) Risk of Erroneous Deprivation i. How likely is it that wrong decision will be made? Examine reliability of procedures accorded to claimant Matthews: Written docs effectively defined Ps medical status (objective) Different than welfare b/c welfare recipient isnt as capable as a doc Look at reversal rates on appeal possibly Note: Part of theory of claim is if right procedures had been used a correct decision would have been made

ii. Evaluate value of new procedures sought by claimant Matthews: old procedures of evaluating objective written medical reports would not be substantially enhanced w/ oral/evidentiary hearing before deprivation Lourdermill: Pre-deprivation hearing is more necessary when decision maker has discretion regarding remedy Had the choice whether or not to reinstate (see FN 8 p.85) Old procedures did not comply w/ 14A, and were UNCNL even though state defined them, NEW procedures complied w/ 14A minimum iii. Consider nature of inquiry Are the procedures already in place effective? Matthews: procedures were effective and objective, no more needed iv. Significance of Factor This factor becomes very important when the focus is on whether or not gov't may use only post-dep procedures Gov't must prove that given its interests, adequate hearing must be postponed until after dep Ex. Ingraham pre-dep hearing would eliminate utility of corporal punishment v. NOT case-by-case, but generality of cases analysis (c) Government Interest i. Consider increased administrative burden and costs of new procedures ii. ***Truly an easily manipulated factor*** If procedures are already adequate, there wont be a gov't interest in requiring additional procedures that add no value Closely tied w/ risk of erroneous deprivation If high risk, then gov't will have interest in additional procedures, If low risk, then little to no interest in additional procedures that add not value Ex. Matthews/Goldberg Ct said gov't had interest in Goldberg in making sure the right people received welfare benefits and that additional procedures added value BUT, in Matthews the procedures in place were already effective and the lack of value took away from the gov't interest in adding additional procedures 2) Bitter With the Sweet (a) Theory is that when gov't creates/gives an interest that it may also provide limited procedures i. So you take bitter (less procedures) w/ sweet (interest you wouldnt have had otherwise (b) Rejected in Loudermill

i. *****Ct wouldnt allow state gov't to create interest and provide limited procedures b/c it would allow state to define process less than required by DP (14A for states)***** Would render 14A meaningless (c) Holds that substance is separate from procedure C. Ex. of Analysis in Other Cases 1) Loudermill (a) Cleveland Board of Education hired Loudermill as a security guard; he lied when filling out his application about never having been convicted of a felony; he was dismissed for his dishonesty (b) PROCEDURE GIVENHe wasnt given the opportunity to respond to the charge or to challenge his dismissal (c) Protected Interest: Definitely protected interest b/c only able to be dismissed for cause, NOT at will (d) Matthews Test i. Private Int: Passed b/c interest in retaining employment and burden b/c of leaving under questionable circumstances ii. Erroneous Dep: Passed b/c of discretion afforded to decision maker iii. **If state CREATES position, CANNOTalso define the procedural protections** 14A is a FLOOR of what must be afforded 2) Ingraham (a) Students being subject to corporal punishment (b) Protected Int: Pass b/c it was liberty interest (c) Matthews Test i. NO dep b/c there was common law exception for maintaining order in the classroom ii. After-the-fact/dep remedies for tort were sufficient iii. Possible strong gov't interest b/c a pre-dep hearing would maybe prevent school from using corporal punishment in future 3) Goss v. Lopez (a) Students suspended w/o process (b) Protected Int: Yes b/c property interest in free public education (c) Matthews Test i. Ct approved very informal procedures b/c no need for judicial proceedings for this Allowed student oral/written notice of charges, explanation of evid, and opportunity to respond D. See Ex. p. 157 NB III. Statutory Hearing Requirements A. Sources of Law for Hearing Adjudications 1) DPC 2) APA 3) Organic Act/Regs adopted in accordance w/ organic act

B. Overview of Administrative Procedures Act (APA) 1) 551(13): Agency action includes whole or part of rule, order license sanction relief or failure to act 2) 551(6): Order is whole or part of final disposition in matter other than RM, but including licensing 3) 551(7): Defines adjudication as process for formulating an order 4) 551(4): Defines rule (pretty much something that defines prospective legal requirements) 5) 661(5): Defines RM as process for defining rule C. APA & Procedural Requirements for Adjudication 1) 557: Addresses initial decisions; agency review, the record & the decision (a) Provides that 557 applies when hearing must meet requirements of 556 2) 556: Addresses content of hearing (a) Provides that 556 applies when hearing is required by 553 or 554 to meet its requirements 3) 553: Applies to RM (next section) 4) 554: Title is Adjudications (a) Provision applies in every case of adjudication required by statute to be determines on the record after opportunity for an agency hearing w/ identified exceptions i. These are Formal Adjudications Applicability of 554, 556, 557 all turn on whether adj is formal under 554(a) ii. Otherwise it is informal adj, which has much less requirements Formal vs. Informal Adjudication IV. General V. Formal Adjudications A. Triggering Conditions for Formal Adj 1) Seacoast v. Costle (a) P mad b/c said EPA did not abide by APA procedure when made decision to let company discharge heated water i. Statute provided for public hearing but no language re: on the record (b) Procedural Concerns: No opp to cross, only allowed for written submission, not oral hearing (c) Holding: Ct said it WAS formal adj & no magic words requirement for adj to be formal i. Still good law even though presumption for lang on hearing is not BL law anymore Only 9th Cir. Reads language re: a hearing when there is a proper adjudication that it is a presumption that it = formal ADJ ii. BUT, still somewhat of presumption when it is a particularized decision? iii. Also held that organic act requirement of public hearing = ORAL Hearing

iv. Agency not allowed to rely on outside studies b/c not on the record (d) Trigger Analysis i. Looked somewhat to adjudicative facts v. legislative facts (Londoner & BiMet.) ii. How this was particular decision about particular plan applied to particular company and NOT a general policy determination Sensible not to have ADJ requirements for RM b/c a formal ADJ is on the record so decision can be based only on facts that come out at the hearing This is fine for ADJ, but not for RM which is legislative (dont want to subject it to back and forth like ADJ) iii. Holding: Rules of evid do not apply to agency proceedings Less formal so that regular people can go before agency and not need a lawyer 2) Other Requirements/Facts for Triggers (a) If statutory text provides for hearing (b) Substantial Evidence Review of Agency Adjudicatory Decision in Statute Text i. Cts generally believe this to mean Cong had on the record decision in mind b/c it was std of review applied in agency determinations/APA (c) Legislative History i. Any that shows Congs intent for it to be formal adj (d) Nature of What is Being Adjudicated 3) IF trigger is not present, then informal adj B. Rejection of Residual Rule 1) Richardson v. Perales (a) P objected to admissibility of doctor reports re: Ps medical condition that ed hearing examiner to say no eligibility for disability i. The reports would have been hearsay under rules of evid (b) Residual Rule: Would mean decision maker could consider inadmissible hearsay evid, but ultimately would have to base decision only on evid that would be otherwise admissible if rules of evid applied (c) Hearsay is ADMISSIBLE IN agency proceedings i. As long as the evid is reliable, then the evid is admissible C. Bias in Adjudications 1) Withrow v. Larkin (a) Physician successfully argued to the lower courts that WS statute violated his procedural due process rights because the same members of the state board that conducted an investigation into the allegations of professional misconduct would have also presided at his suspension hearing i. Arguing that agency is wearing both hats of investigation & decision maker (b) HOLDINGSupreme Court REVERSED and held that the initial charge or determination of probable cause and the ultimate adjudication had different bases and purposes and that fact that the same agency made them in tandem

and that they related to the same issue DID NOT RESULT in a PROCEDURAL DUE PROCESS VIOLATION i. Many agencies are set up this way and to hold it UNCNL would be to rewrite admin law 2) Antoniu v. SEC (a) Stockbroker alleged that the SEC commissioners statements prior to the adjudication of the disbarment proceedings and the commissioners participation in the proceedings biased the proceedings or impermissibly tainted them with the appearance of impropriety (b) HOLDINGCourt found that the Commissioners statements revealed that he had PREJUDGED THE MATTER and even though he recused himself prior to the filing of the SECs final decision, there was no way of knowing how he affected the deliberations. VIOLATION OF DUE PROCESS i. Different from Withrow b/c here it was challenge to particular agent being biased and not a challenge to the structure of an entire agency D. Estoppel in Adjudications 1) Schweiker v. Hansen (a) Plaintiff went in and asked a field representative of the SSA if she could get her mothers benefits. Rep erroneously told her no and didnt advise her to file an app even though the Claims Manual instructs him to i. P wants gov't to be estopped from asserting written application requirement b/c of low-level agents failure (b) Holding: Strong rule against allowing estoppel of govt i. Would allow for low level employees mistake to change the law based on unreasonable/uninformed action ii. Allowing estoppel b/c of low level employee would undercut any present public int in the law iii. Lead to large $# of hard to prove claims iv. May prevent gov't from providing informal advice which they could be bound by (c) Estoppel Test i. Detrimental Reliance ii. No Constructive public notice of proper gov't rule Ex. have the proper rule in the fed regs would = constructive notice E. Procedures Required (APA) 1) On the Record Requirement (a) Decision MUST be on the record (b) Decision of agency must be based only on materials properly admitted into the record b/c acting like a court so should be decision on the record i. Provides other party a chance to view the evid being considered and to respond to that evid or supplement the record w/ evid it believes supports its positions instead & maybe cross-exam (when permitted) Seacoast: that is why the agency could not rely on the studies of the technical review bd NOT in the record (c) This is a key distinction from how RM is thought of (unless formal RM b/c it is on the record)

2) Oral Hearing (a) Initial Licensing Cases i. 556(d) allows for agency to permit only written submissions (no oral hearing) when party will not be prejudiced thereby (Seacoast) 3) Fair Tribunal (a) 556(b) Hearing must be presided over by the agency, one or more members of the body comprising the agency or one or more ALJs i. Limited separation of functions for ALJs in investigation and prosecution (b) Does not impose a whole hearted separation of functions requirement i. 554(d) initial fact finder must be accorded limited independence and required separation of functions (c) 556(b) Provides for removal of decision maker in case of bias i. Party must file affidavit claiming bias to seek removal & must be bias to particular adj Bias may be an personal animus/discrimination OR pecuniary interest or personal interest that creates appearance of bias Cross-Examination (a) No Default requirement of cross-examination to be available i. BUT party is entitled to cross-exam when required for full and true disclosure of the facts Burden of Proof (Burden of Persuasion) (a) Preponderance of Evidence standard (Steadman) (b) Less strict that std of review b/c it is not re-weighing of evid (c) Note: This can be trumped by an organic statute i. Steadman: Securities law stat can trump APA Intervention (a) Broad right to intervene in agency proceedings i. Less standing requirements than Art. III Limits on Ex-Parte Contacts (a) Concern is that party will say something outside of other party hearing that is different than in the proceeding and the absent party will not have any opportunity to respond i. Should there be discouragement/restriction of meeting w/ public official to see what went wrong? (b) Triggers on Limitations i. Bar begins w/ notice of hearing (APA) ii. May trigger DP when there would be substantial harm/ prejudice? (c) 551(14): Very broad definition of ex-parte contacts w/ exception only for requests for status reports (d) 554(d)(2): General prohibition on agency consultation w/ a person or party on a fact in issue w/o notice and app for all parties to participate i. Reinforce on the record: requirement (e) 557(d)(1): Bar on ex-parte communications from any interested person regarding matter relevant to the merits of a proceeding i. Bar applies both ways

4)

5)

6)

7)

ii. Requirement that agency official place on the record, information about any ex-parte communication in either direction iii. Identifies potential remedies for violation by party Could result in dismissal (f) Seacoast: Receiving advice form technical review board was permitted b/c it was part of agency, so NOT ex-parte VI. Informal Adjudications A. General 1) Sources of Law (a) 555(e): Requires prompt notice of denial of application w/ brief statement of reasons unless self-exculpatory or affirmation of prior denial i. BUT, findings as required to permit judicial review has arisen ii. Requires appearance of fair tribunal (b) Agencys Organic Statute (c) Regulations (d) DP Clause 2) No requirement of burden of persuasion, but assumed to be preponderance of evid 3) Most informal adj requirements come from regs/statutes rather than the APA 4) Agency will argue for informal adj when it is seeking to act in a more unconstrained and broad manner (a) This is b/c there are less requirements for informal adj, so agency will have ability to argue more favorable conditions

Rulemaking I. General A. Potential Benefits of Rulemaking 1) Rules may promote agency efficiency (a) Agency may use single procedure, rather than pursue multiple adjudications w/ repetitive proof i. Counter: What about stare decisis effect of adjudications? (b) Open/Comprehensive process allowing agency to consider wide range of information in single proceeding i. Adj focuses only on 1 party May allow intervention/amicus brief though (c) Rules typically define la prospectively & provide notice so no new unexpected liability i. Adj typically retroactive, unless agency acted only prospectively (rare) (d) Rules may be framed to provide greater clarity and provide clearer notice to regulated parties i. Adjudicative results may be published, but they may be understood as limited to facts, or subject to being distinguished (e) Adjudications may pick 1 party for enforcement while other party continue to break the law while rules solves this

B.

C.

D.

E.

(f) Rules have across the board effect and limit unfairness that results from singling out effect of adjudication (g) RM promotes immediate compliance Skepticism of RM vs. Adj 1) NPRA v. FTC (a) People were more skeptical of RM than Adj b/c people were unsure if whether RM is something agencies should be doing at all (b) Holding: Construes provision to stop unfair trade practices broadly i. Furthers purpose of statute to let FTC promulgate the rules Why Congress Defines Procedural Requirements for RM not Adj 1) Protect/control something as important as RM over Adj 2) DP serves to protect Adj, but it does NOT apply to RM Prospective vs. Retroactive 1) RM is almost always prospective 2) Bowen v. Georgetown (a) Holding: Requires express authority or clear statement to enact retroactive rules Rule v. Order 1) Rule: Made by RM 2) Order: Wholer part of final disposition in a matter other than RM 3) Essentially if not Rule, then order or adj

F. MUST be delegation of RM power (by Cong) for agency to make rules 1) In the absence of such power, agency may not make rules (a) Key Difference w/ adj II. Informal Rulemaking (Problem on p. 216) A. Almost ALL RM is informal 1) Two classic Challenges to Informal RM (a) Procedural: that it did NOT comply w/ 553 (b) Substantive: that Rule conflicts w/ statute or breadth of agency authority B. APA 1) 553 (a) Exceptions to section (many agencies have bound selves to APA anyway) i. Military/Foreign affairs function; OR ii. Agency management or personnel; OR iii. Public property loans/grants/benefits (b) Publication of Notice of Proposed Rule in Fed Register to Include Info about any hearing, reference to legal authority & terms of proposed rule or description i. Exceptions General statements of policy and interpretive rules Good cause

(c) Opportunity for public participation after required notice, but no requirement for oral hearing (called comment) i. Following comment, a concise general statement of rules basis and purpose Provision for applicability of 556/557 (formal RM) where rules are required to be made on the record after opportunity for hearing (d) Publication of final rule at least 30 days before effective date (exception) (e) Required opportunity for public to petition for issuance, amendment or repeal of rule C. Notice and Informal Rulemaking 1) Chocolate Manufacturers v. Block (a) Case re: Chocolate milk and whether or not it should be included in food stamps program i. Had always been included as procedure, but never formally recognized. Proposed rule included it when defining supplemental foods for food stamp packages, but in response to comments advising deletion, agency left it out when the final rule was promulgated. Agency had not sought comment on deletion. Issue: Was the notice adequate? NO, there had not been proper notice that flavored milk would be considered for elimination from the final rule (b) Logical Outgrowth Test i. Notice (in proposed rule) is inadequate if: Final rule materially alters the issues involved in the RM Final rule substantially departs from the terms or substance of proposed rule (Possible Requirement) Final reg must have been reasonably foreseeable given content of proposed rule ii. When assessing materiality and degree to which final rule departs from proposal, focus on 2 factors Were the parties affected by the final rule put on notice by proposed rule that their interests were at stake in RM Were issues resolved in final regulation fairly seen as on the table (cosndiered)given the proposed regulation iii. Really focus on whether issues were considered Easier to satisfy test by putting a lot in proposed regulation, but pulling back later D. Administrative Record in Informal RM 1) US v. Nova Scotia (a) FDA enacted reg to require whitefish to be cooked to certain temp, Nova did not comply and FDA brought enforcement action i. Nova challenged the reg in the enforcement action, as a defense (common to do) and said such reg destroys the quality of the fish (b) There had been no record, and FDA relied on info not disclosed to make its record

(c) Holding: Record must be adequate for judicial review i. Must consist of info before the agency at the time of the decision ii. Agency must provide public w/ info important to its regulatory decisions so that the affected parties may adequately comment on agencys regs Nondisclosure may mean that there was inadequate public comment (d) Modern Practice: Now agency creates a docket that includes all public info related to RM and that docket becomes the record in event of challenge i. Ct can only review that record (e) Healy thinks CT is drawing things out of APA when it should look at FDA statute E. Concise General Statement Requirement 1) Requires agency to identify major issues of policy being addressed in reg AND explain why agency resolved issues in way that it did (a) Requirement is reinforced by arbitrary & capricious std of review (b) It is NOT a hearing on the record 2) Court is supposed to look at agencys organic statute b/c Cong defined issues to be considered in the organic act 3) Agency should identify in preamble to final reg the facts/policies that support the reg promulgated 4) Nova Scotia (a) Concise General Statement Issue: i. It is a response to comments received ii. Especially required when reg has such detrimental affects to industry F. Exceptions to APA 553 1) General Statement of Policy (a) Mada-Luna v. Fitzpatrick i. P wanted less stringent deferred status std for immigration proceedings b/c it had more accommodating hardship consideration, and said new std never went through notice & comment, so invalid Holding: New std was general statement of policy (GSP) under APA and did not require notice/comments (b) Requirements for GSP i. Operates prospectively ii. Does not establish binding norm/rule for agency Consider whether statement/policy binds the agency to act in particular way, OR is agency able to consider individual case and resolve it based on the those facts iii. Focus is on how statement affects agency not the effect on the public Agency isnt binding self to certain requirement so notice/comment NOT required iv. GSP must be published in Fed Register Unless party is actually aware of policy 2) Interpretive Rules (a) Warder v. Shalala

i. Medical equipment supplier challenged ruling that classified certain equipment as durable medical equipment rather than braces because of no notice and comment ii. Holding: Because it was interpretive rule there was NO notice/comment procedure required Agency was only interpreting an existing law/ambiguity (b) Test for Interpretive Rules i. Is agency exercising delegated lawmaking power? (Is agency acting to make law?) ii. Has agency established a new std in the interpretation or has the agency merely acted to resolves ambiguity in current law? iii. Interpretation may be of a statute or reg (c) Characteristics of Interpretive Rule i. Interpretation may not change the law; may INLY resolve ambiguity ii. Even a substantial impact of interpretation does not trigger notice/comment Agency must be allowed to change over time iii. Interpretation may have the effect of deciding the outcome of a case Allowed to be determinative (unlike (GSP) III. Hybrid Rulemaking A. US v. FL East Coast 1) Railroads wanted to set aside per diem rate established by ICC in RM proceeding. ICC took only written submissions from railroads, even though organic act required hearing 2) Issue turned on hearing in organic act b/c D argued that requirement for a hearing by organic act took RM of ICC out of exception in 553(b) b/c exception doesnt apply when hearing is required 3) Holding: RM was informal and D was provided w/ a hearing as defined by APA (a) Use of hearing in statute was same as in APA (b/c there was no Cong intent apparent) and APA allows hearing to be limited to only written submissions when part would not be prejudiced (556) and w/ informal RM (553) (b) Thus this requirement of a hearing was satisfied and RM proceeding NOT invalid B. Vermont v. NRDC 1) Under the National EPA and the Atomic Energy Act, the AEC/ NRC has to issue an environmental impact statement before approving construction of a nuclear power plan and again before licensing operation; problem was how to handle the cost/benefit analysis of environmental effects of disposing spent nuclear fuel (a) Agency assigned specific numbers to be used in all future statements (b) NRDC want a full adj every time i. This would cause delay 2) Holding: Ct cannot impose additional procedures that bind agency that go beyond APA/statute/CN

(a) But if agency imposes extra procedures, ct can make the agency adhere to its own procedures (b) SOP issue to let ct impose additional requirements IV. Is There an Agency Obligation to Promulgate Rules? A. SEC v. Chenery 1) Main Holding: Ct has the discretion to choose RM or ADJ (a) BUT, Cong may require RM or ADJ in statute 2) Chenery I (a) Management sought to reorganize Federal Water Service Corp. under Public Utility Holding Act; members of management team purchase shares of FWSC preferred stock that would be convertible to common at conclusion of reorganization (so they would protect their interest); SEC refused approval, essentially ordering management team to sell preferred stock at cost plus fixed interest (even though no rules really violated) (b) Holding: Court must review agency decision on basis of rational presented by agency i. If that rationale is flawed, ct is NOT to determine alternate, proper grounds for decision Instead, should remand to agency ii. Agency must identify w/ sufficient clarity, the basis for its action, thereby permitting judicial review 3) Chenery II (a) After reorg plan denied again, D argued that the SEC order would be retroactive, when it could only be prospective, so agency should have to promulgate a rule i. Ct acknowledges it IS retro, but weighs fairness v. retroactivity (b) Flipside of National Petroleum i. B/c here agency has ability to choose adj over RM (c) Benefits of Choosing Adj Over RM i. Problem had not been previously encountered ii. Agency had limited exp and did not want to promulgate broad rule iii. Rule is not workable b/c there are too many factors to be considered iv. Note: Agency did NOT choose RM b/c cannot use retroactive rule to reach this P B. NLRB v. Bell Aero 1) Under the National Labor Relations Act, Union petitioned NLRB for the right to conduct an election to determine whether Union could represent buyers at Bell; Bell opposed petition arguing that buyers are not employees covered by the NLRA and therefore not subject to unionization rules (a) NLRB had changed their position, and issue was whether they could rely on new position through RM or Adj 2) Holding: Agency allowed discretion as to whether to proceed by RM or Adj (a) Prospective RM may be more appropriate when there has been reliance on the previous understanding of the rule

i. There had been no such reliance here (b) When there is no reliance on the previous understanding, adj may be more appropriate V. Avoiding Adj via RM A. Heckler v. Campbell 1) Dispute over SS and how it is determined whether person is eligible for disability. B/c there were so many claims, agency used RM to set up certain grids to streamline the process. The statute required ppl to have hearing in front of ALJ, and agency relied on regs to narrows the scope of the hearing (a) The challenges is whether the agency may rely on regs in order to determine breadth of hearing 2) Holding: Even though hearing required by statute, agency could rely on regs/RM power to determine issues that were not required to be decided case-by-case (a) Reliance on regs was not in conflict w/ statute, or arbitrary/capricious (b) The grids for looking at less demanding work applied to everyone, not just a particular person 3) Test used in case (a) First, focus on Ps characteristics and circumstances and condition i. This step determines whether so impaired that you cannot perform any gainful work (takes you out of group grids apply to) or less impaired (then go to step 2) (b) Second, determine whether P, as characterized by step 1, is able to perform jobs in national economy (as in former work or any less demanding work) i. Regs assisted in determining the availability of those jobs VI. Requirement of Agency to Follow its Own Regs A. Agency MUST follow the regs it promulgates (Sameena v. US Air Force) 1) Would violate DP otherwise (a) Even more basic part of DP than Matthews/basic procedural requirements 2) The challenge is a DP challenge 3) Coceres: Two threshold requirements to make this type of DP claim (a) Party has reasonably relied on reg promulgated for that partys benefit (b) Party has to suffer injury b/c agency violated reg

Con Law Issues & Agencies


I. General A. Overarching Issues 1) Is agency permitted to adj w/o being Article III (A3) court? 2) Is agency permitted to act in legislative manner w/o itself being legislature? (a) Article I issues from use of agencies 3) What control may the legislature, having created agencies, continue to exercise over agencies? 4) To what extent may or must agency be independent of Executive

(a) Article II issues w/ agencies (b) Most common and relevant issue B. Historical Background 1) 1ST agencies mimicked the president (unitary executive) w/ single head of agency 2) ICC was 1st multi-member, independent agency (new trend in Progressive Era) 3) Some agencies are located w/in Exec Branch, some outside/independent (a) Important factor w/ CNL issues II. May Agency Adjudicate W/O Being Art. III Court? ***This question is antecedent to whether agencys procedures comply w/ DP Key: A3 issues concerns gov't and balance/separation of power, DP concerns the gov't and how it affected individual A. General Concerns/Issues 1) Usually Cong delegating powers to agency that may/may not be powers traditionally exercised by A3 courts (a) Can Cong do this? If so, to what extent? 2) Concern for Judicial Independence (a) A3 guarantees this with; i. LIFE TENURE ii. SALARY PROTECTION (b) So A3 courts/judges are insulated from political pressures B. Crowell v. Benson 1) Employee (E) sought compensation for injury suffered on navigable waters while employed by D; Deputy Commr (P) found for E under Longshoremen/Harbormen Workers Comp Act. D claimed employee was not employed by him when injured & so not w/in Ps jurisdiction. 2) Three Main Claims (a) Due Process violation i. Held procedures to be adequate Almost says ok b/c on the record, but NOT law (see APA) (b) 7th Amend. i. Held NOT to apply to admiralty cases (c) Art III Violation i. Saying that P may not adj claim w/ power similar to A3 court ii. Main beef that it is UNCNL to take away the power of ct to find facts and give that power to agency, then give deference to agency fact finding 3) Permissibility of Non-A3 Adjudication (a) Matters/Questions Being Resolved i. Law: NO A3 problem b/c full de novo review provided for of agencys decision by Fed. Ct. ii. Facts: Generic vs. Jurisdictional Jurisdictional: Facts relating to agencys jurisdiction reviewed de novo by Ct Rejected now, except maybe for 1st Am claims

Generic: Facts other than jurisdictional & value of proceeding before agency is its finding of facts Reviewed by Ct under deferential std Maybe substantial evid Generally facts found by agency are ALL that ct may consider (b) Type of Right Being Adjudicated i. Public Right: Adj in which govt is a party Cases in which sovereign immunity applied which would deny right to adj unless Cong provided a right or resolved the issue Cong has power to provide for adj as it wishes before Non-A3 adjudicator Greater power includes the lesser (opposite of bitter w/ sweet) ii. Private Rights: Case raising question of liability b/w 2 private people Gov't is NOT a party Non-A3 Adj is permitted when adjudicator is proper adjunct of court Proper here b/c Full review of legal conclusions and jurisdictional facts Non-A3 tribunal is aiding ct as fact finder It is permissible for there to be deference to findings of fact by adjunct C. Northern Pipeline Construction Co. v. Marathon Pipeline Co. (1982) 1) PRIVATE RIGHTS CASE (a) Court STRUCK DOWN parts of the Bankruptcy Act of 1978 as excessive delegations of adjudicatory power (b) Invalidated parts authorized fed bankruptcy judges, (not A3 judges) to decide certain state-law contract claims b/w private parties w/o their consent and subject to only limited review by A3 judges. 2) Does it matter if the private right was created by federal statute? Who will adjudicate is incidental to who created the right; if the federal government created the right, they have more authority over who adjudicates it (a) If the private right was created by Congress, then Congress has the authority to create the tribunal (the agency) to adjudicate the right (b) Most contract law is state law so this case dealt with state created private right 3) NORTHERN PIPELINE DISTINGUISHES CROWELL (doesnt overrule it) Crowell is still valid because Congress created the right in that case; Crowell DOES NOT APPLY to issues where a state creates a private right!!! 4) ESTABLISHED that Congress may NOT vest in a non-Article II court (1) the power to adjudicate, (2) render final judgment, and (3) issue binding orders in a traditional contract action arising under state law, (4) without consent of the litigants, and (5) subject only to ordinary appellate review D. CFTC v. Schor

1) D originally brought CFTC reparations claim against broker for violation of Commodity Exchange Act; Broker filed separate suit in fed ct to recover balance D owed to broker. Broker dismissed case after D insisted in fed ct that brokers claim be brought as counterclaim in CFTC proceeding. When D lost and held for broker, D said CEA didnt allow the counterclaim to be adjudicated by CFTC b/c it shouldve been decided by A3 ct (a) D rested on fact that his claim in CFTC was based on fed regs, but broker counter was based on state law K claim, so must be decided before A3 2) Concerns at Play (a) Aggrandizement/encroachment in separation of powers i. Special concern over legislative aggrandizement 3) Held: Ct allowed CFTC to adj the counter claim (a) Personal Rights Waiver: D waived any right to have brokers claim decided by A3 judge when D insisted that it be a counterclaim in CFTC proceedings (b) But, court also had to consider structural rights, using factors known as Schor Test 4) Schor Test (a) Extent to which essential attributes of A3 ct are reserved to them i. Look at Non-A3 adjudicator & determine whether it appears like A3 ct or adjunct Ex. A Non-A3 ct should not look like Bankruptcy ct in Northern Pipe (looks like A3), instead should look like Crowell ii. Consider extent of jurisdiction, enforceability of decision, std of judicial review, ancillary powers and obligatory nature of jurisdiction Resemblance to Crowell is good (b) Origins & importance of right being adjudicated i. Source and nature of rights ii. Greatest encroachment concerns arise when private rights litigated in NonA3 setting B/c these are concerns of A3 ct (c) Congressional concerns that motivated deviation from traditional adjudicatory structure i. Need for agency/Non-A3 adj given policy concerns behind adjudicatory structure ii. Weighs most heavily when expert adjudicator is seen as necessary E. Granfinanciera 1) Private rights may only be adjudicated in A3 cts (a) Clearly inconsistent w/ Crowell, but ct never overrules any of these cases, so they all stand somehow (important to remember) 2) Public rights may be adjudicated before Non-A3 tribunal (a) Scope of Public Rights (significantly expanded) i. Those that belong to or exist against the gov't Identity of the parties approach

(new) Rights defined by statute that are closely integrated into public regulatory program F. Stern v. Marshall 1) Bankruptcy case where initial bankruptcy claim had state law claims/counterclaims mixed in (tortious interference) (a) Had to determine whether it had been proper for Bankruptcy judge to rule on state law claims 2) Nature of Right Being Adjudicated (a) Not solely determined on basis of whether or not gov't is a party i. But if gov't is a party, clearly a public rights case (b) Public rights at issue when claim derives from federal regulatory scheme where resolution by expert agency is essential to the regulatory scheme i. Is the right intergrally related to particular Federal Giovt action? Here it was common law/state law claims; Cong has nothing to do with it Bankruptcy claim involves public rights ONLY when it is derived from or dependent on bankruptcy law B/c state claims did not depend on Bankruptcy law, NOT pub rights 3) IF Private Rights Being Adjudicated, is Adjudicator a Proper Adjunct? (a) Bankruptcy court was NOT proper adjunct i. Exercised essential attributes of A3 ct ii. Resolved all matters of fact & law Only limited judicial review of these resolutions available iii. Had power to enter final judgment

Congress & Agencies


III. Non-Delegation Doctrine A. General 1) Concerned w/ not delegating powers to other branches of givt (a) Ex. Not giving president legislative power B. Schecter Poultry v. US 1) Part of NIRA had given president power to approve codes of fair competition (a) Held: Ct struck down this power 2) Pres. Cannot have power to make up laws as he chooses (a) Distinct from power of FTC to prohibit unfait methods of competition b/c power is used by FTC, an expert agency AND other sources existed to interpret std (Sherman Act) whereas Pres. had unfettered power 3) Question is NOT Did Cong delegate authority, but How Much did they delegate??? C. Industrial Union v. American Petroleum 1) Rule: Cong must define an intelligible principle (cannot be too broad) when it delegates to agency

(a) Cong establishes general policy and agency refines, but does NOT define stds and instead fills in blanks i. Hard choices, not filling in blanks should be made by elected representatives of the people 2) Function of Rule (a) Elected legislators define policy in the statutes (b) Intelligible principle (IP) (defined by Cong) guides exercise of delegated authority by agency (c) IP permits effective judicial review by allowing it to ensure agency has adhered to principle 3) Determination of/Finding IP (a) Statutory text (b) Legislative history and statutory context (c) Ct may rely on prior judicial and administrative practice to identify IP that incorporates this practice (d) ALLOWED to delegate b/c of public convenience, interest, or necessity 4) Exceptions to IP Requirement (a) Emergency circumstances that require broad discretion (b) If delgatee has broad residual powers under CN i. Ex. Foreign affair power of Pres (c) When delegation relates to very narrow agency authority (Whitman) IV. Legislative Veto A. General 1) Giving One house of Cong power to overrule admin agency (a) Why can't Cong delegate broad power to agency, but reserve power to review decisions? i. B/c it is a conditional grant of power B. INS v. Chadha 1) D was going to be deported, but got proceedings suspended by Immigration judge for hardship. Attorney General submitted recommendation of suspension to Cong, but the House vetoed b/c statute said Senate or House could deny suspension (a) Went around bicameralism & presentment requirements 2) Held: UNCNL b/c the statute failed BOTH bicameralism and presentment (a) Bicameralism: Requirement that both Senate & House vote/approve (b) Presentment: Laws had to be presented to Pres before they actually became law AND Pres has certain veto power i. Ensures national perspective grafted onto laws b/c the people elected Pres 3) Formal Explanation of Holding: The veto power for 1 house violated bicameralism/presentment (a) A veto allowed by both house, but no presentment would also be UNCNL b/c it would pass bicameralism, but fail presentment 4) Functional Explanation

(a) Cong was executing law b/c they made law and were attempting to determine how it is applied i. Cannot take Exec power (b) Dividing the Pie i. Dont want same person making/enforcing law ii. Aggrandizement and encroachment (c) Veto involves legislative branch in execution of laws i. Encroaches on Exec

Executive & Agencies V. Appointment Power A. Buckley v. Valeo 1) Whether Federal Election Commission (FEC), created by Federal Election Campaign Act, could exercise certain powers granted to it (a) 2 of 8 members appointed by Pres. and 2 more appointed by Pres pro tempore of the senate, rest split b/w Senate/House 2) Held: Most of Comm power invalid b/c it did not follow Appointments Clause (a) Allowing Comm to use power would be allowing indirect control of execution of law 3) Appointment Power Pursuant to Appointments Clause (a) Principal Officer: Must be appointed by Pres w/ advice and consent of Senate (b) Inferior Officer: Appointed 1 of 2 ways i. By Pres w/ advice and consent of Senate; OR ii. Cong ay provide for appointment by Pres alone; by Courts of Law; or by Heads of Departments (c) Employees of US: No required method of appointment i. Lesser functionaries subordinate to officers VI. Removal Power A. Myers v. US 1) Dispute over whether or not Pres may remove Postmaster General (a) CN is silent on removal, unlike appointment (b) Statute said Pres needed advice/consent of Senate to remove 2) Held: UNCNL restriction on Removal Power (a) Removal is more important than appointment power i. Pres knows more about officer than Cong and it would hurt Press ability to execute law and give Cong power it is NOT entitled to (b) Unitary Executive i. Pres as head of unitary exec branch must have significant removal power which are at least as important as Press appointment power 3) Removal Power Std (a) Principal Officer i. Pres has full removal power (not to be limited by statute)

Pres may base removal decision on how officer has exercised authority delegated to him (b) Inferior Officers i. If Pres retains appointment power for inferior officer, then Pres retains full removal power ii. Cong may regulate/condition removal of inferior officer when Cong has granted appointment power to Head of Department Cong may give Head of Dept power to remove and incidentally regulate removal Limits on Pres must be clearly defined Legislature may NOT involve itself in removal decision Never permitted B. Humphreys Executor 1) H was FTC Commr appointed by Hoover and removed by Roosevelt (a) Statute did not provide for removal at will, which is what R did i. Instead, statute required showing for cause 2) Held: Limit on removal at will was permissible (a) Ct said FTC Commr wasnt actually part of the Exec branch AND that b/c of duties, it must be totally free from Exec control i. b/c of quasi-leg/judicial functions ii. Agency just wasnt w/in Exec Branch (b) Even though Comms seems like a principal officer, the Ct says not just not principal officer, not Exec officer AT ALL i. Almost creates 4th Branch of Gov't b/c the FTC is out of the control of the Exec, but exercising a lawmaking function w/o bicameralism/presentment (c) Reasoning i. Formal: Giving weight to agency actually being located outside the Exec branch ii. Functional: In characterization of quasi-leg/judicial powers, but all agencies will essentially include one (leg/jud) of these functions Just look at all modern agencies, they use SOME type of those powers (d) Can Cong then strip removal power simply by locating agency outside of Exec Branch? 3) Reconciliation with All other Officer Cases (ex. Meyers) (a) Here only a limit on Pres requiring him to show cause (b) Myers required Senate approval before removal (c) Still, case fundamentally conflicts w/ unitary exec C. Bowsher v. Synar 1) Act gave removal of Comptroller General by joint resolution of Cong 2) Held: UNCNL (a) Cong may not insert itself into removal process (b) May not reserve removal power for itself D. Morrison v. Olson

1) Dispute over whether of Independent Counsel (IC) appointment violates Appointments Clause (a) Atty Gen submits report to Special Div of DC Cir and the Ct appoints IC (b) IC has broad prosecutorial power, limited jurisdiction defined by Ct (c) Removal by Atty Gen for cause or when investigation completed (d) Red Flags: Pres removal removed i. Principal/Inferior Officer issue (key issue) If principal, clearly UNCNL If inferior, maybe ok 2) Held: Appointment did NOT violate Appointments Clause 3) Principal vs. Inferior (a) Characteristics in favor of inferior (all formal arguments) i. AG had power to remove (totally contrary to Meyers) ii. Ne responsibility for policy iii. Limited jurisdiction w/ respect to scope of criminal activity iv. Limited duration (b) Officers are inferior when as functional matter, person has superior who is presumable a principal officer of US (ex. Atty Gen.) (Edmond n.1 439) i. Functional argument 4) Removal of IC (Functional) (a) No rigid categories of who may/may not be removed at will by Pres (b) Need to ensure Cong does not interfere w/ Pres exercise of Exec power (c) No improper interference, especially given AGs removal power, which retains that authority in Exec branch 5) Separation of Powers Analysis (Formal) (a) Rejection of rigid SoP approach (b) Focus instead on encroachment/aggrandizement i. No legislative aggrandizement at expense of Exec (here) ii. No judicial aggrandizement of Exec iii. No undue encroachment on Exec b/c; Exec (branch) has some control over IC w/ good cause removal; & Power to request/not request appointment Policies of Dept. of Justice generally control iv. Ct more concerned w/ aggrandizement and b/c encroachment didnt benefit other branch at expense of Exec, then CNL 6) Scalia Dissent (a) Based on unitary exec and that this is a core Exec power, so UNCNL (b) Too much power to give to person who want removable i. Eventually too much encroachment E. Free Enterprise Fund v. Pub. Company Acctg. Oversight BD (PCAOB) 1) SEC was above the PCAOB and appointed its members (a) Had formal/functional power over Bd i. But, could only remove for cause (b) SEC Commr should have been removable by Pres at will, but agreement of parties established he was removable only for cause b/c of Humphreys (c) Pres then has NO control at all over PCAOB b/c no control over Commr

2) Held: the second layer of protection for PCAOB, that they couldnt be removed at will, only for cause violated CN (a) Formally invalid b/c w/o 2nd layer b/w Commr and Bd, Commr could remove members at will, and being held fully accountable for the Bd to the Pres (b) CNLy invalid encroachment on Exec may occur even if another branch is not aggrandized as consequence 3) Severability (a) Ct able to knock out 2nd removal protection so PCAOB removable at will by SEC 4) Appointments Clause (a) Accepts Edmond look to see if office is subordinate to principal officer

Judicial Review
I. APA Standards of Review 706(2)(a-f) (pg. 772) Reviewing Ct shall hold unlawful and set aside agency action, findings (usually questions of facts) and conclusions (usually questions of law) found to be; A. Arbitrary or Capricious, an abuse of discretion or otherwise no in accordance w/ law 1) Overton Park, State Farm - Reviews agency decision making process B. Contrary to CN 1) Schor, Free Enterprise Fund C. In Excess of Statutory Jurisdiction or Authority 1) Does statute foreclose agency interpretation/position 2) Skidmore, Chevron & Mead D. Without Observance of Procedures Required by Law 1) 553 cases Nova Scotia, Chocolate Manufacturers & Vermont Yankee E. Unsupported by Substantial Evidence in a case subject to 556/557 (formal proceeding) or otherwise involving an on the record hearing as required by statute 1) Universal Camera 2) May also apply to off the record/informal proceeding F. Unwarranted by Facts Based on Trial De Novo in Ct 1) VERY rare ***Review is based on whole record and due account is taken of rule of prejudicial error II. Scope of Review of Fact A. NLRB v. Camera Corp. 1) Chairman was employed by D, but discharged; C said he was discharged b/c he testified at a labor hearing, but D said it was for bad behavior (a) P (NLRB) reviewed 1st decision by Examiner (who had denied reinstatement), and ordered reinstatement of C

2) Questions of Fact v. Law (a) Fact: What you are basing the decision on? i. This is issue here (review of facts) (b) Law:: Legal conclusion (ex. did you act neg or reasonably?) 3) Held: Findings of fact reviewed under the substantial evidence standard (a) Came from Taft-Hartley Act (organic statute) i. But, this is the same std used in the APA (b) Frankfurter Cong mandated that decision had to account for all evid on both sides i. Very deferential, but limits exist 4) Ct is less deferential to another Ct and more deferential to agency, b/c of agency expertise (especially labor disputes) B. Rules for Review of Fact 1) Federal (a) Look at APA sec. 706 i. But, std in APA may be replaced by organic statute (statute trumps APA) (b) Formal Adj/RM (on the record proceedings) i. Substantial evid based on the whole record review VERY deferential: more deferential than clearly erroneous Reason = institutional b/c agency has expertise ct doesnt Less deferential than review of jury fact finding (c) Informal Adj/RM (not on the record) i. Arbitrary or Capricious std that is understood to actually incorporate same meaning as substantial evid on the whole record 2) State (a) Generally substantial evid on the whole record C. Relationship b/w ALJ/Hearing Examiner (HE) & Agency 1) ALJ/HE makes 1st decision and then goes to agency (HE NLRB in Camera) 2) Is Agency bound by ALJ fact finding? (a) NO, agency not bound by ALJ fact finding regardless of whether those findings are clearly erroneous i. If only clearly erroneous fact findings could be rejected, ALJ would have too much relative power ii. APA intended to retain power in agency relative to ALJ 3) BUT reviewing ct must at least consider fact that ALG & agency reached differing conclusion if they do b/c it is part of the whole record (substantial evid std) ***If your only argument is that the agency made bad fact finding you are in a bad position b/c very unlikely to succeed III. Scope of Review of Law A. Jewish Hospital (State Court Review) 1) Interpretation of statute = question of law (a) State argued for question of fact to try to get high deference i. But ct said didnt need agency help in stator construction 2) Held: Agency interpreted law in reasonable manner, why?

(a) Text of statute 3) Typical state court case b/c states dont have doctrine that defers to agencies unlike fed cts Federal Courts *** Great Article Summarizing this by Healy: http://www.georgemasonlawreview.org/doc/19-1-HEALY.pdf B. General Issues w/ Scope of Law in Fed Court 1) What is legal source being interpreted? (a) Usually statute OR reg (b) Never ambiguity/interp w/ CN b/c statues are Cong intent for agency to resolve, but NO ambiguity in CN (c) Agency may not be one of many agencies interpreting a line of APA different from other agencies (d) Can be an interp, so long as ambiguous as to whether formal Adj has been triggered by Act 2) In what procedural setting did agency make interpretation (a) In what form does interpretation take? (ex. Adj/RM) Agency Interpretations of Statutes C. Skidmore v. Swift Skidmore Deference 1) Dispute over whether waiting time is the same as working time for overtime compensation (a) Legal Source: Statute Fair Labor Standards Act (b) Form of Agency Interp: Informal (via amicus brief) 2) Question of Fact or Law? (a) Law b/c ultimately trying to decide whether time is subject to time & half under FLSA i. Fact are relevant only b/c they are made relevant by the statute b/c they must be applied to interp 3) Held: Ct not bound by agency interp, but the interp is relevant (a) Ct has interpretive authority to determine what law is (what content/meaning is) but will consider agencys view i. Ct is NOT bound by the view in considering it (b) Weight of Value depends on its persuasiveness and several factors relating to persuasiveness i. Thoroughness of agency consideration ii. Validity of reasoning iii. Consistency of earlier and later pronouncements This fact given most weight B/c fact that agency has consistently considered something to mean X may have weight iv. Any other factors bearing on power to persuade

(c) Consistent w/ view that ct itself = interpretive power and law has single meaning, which ct has responsibility to determine 4) NOT true deference b/c the ct doesnt have to accept the interp, just give it respect to extent it is persuaded by it D. Chevron v. NRDC- Chevron Deference 1) Whether States were allowed to use bubble definition for treating all pollutionemitting devices the same pursuant to EPA reg 2) Two Step Analysis (a) Chevron Step 1 i. Determine whether Cong has spoken directly/clearly to legal issues in the case Employ traditional tools of statutory construction (fn 9 p. 498) If intent/meaning of statute is clear, then that is the law and must be given effect (unless UNCNL) No deference to agency whose position may be seen as persuasive by the ct as make weight ii. If Cong hasnt spoken/no intent then statute is ambiguous (satisfies Step 1) (b) Chevron Step 2 i. If statute is ambiguous to legal question (can't get to this step w/o ambiguity), Ct must defer to reasonable/permissible agency interp Only asking if it was reasonable interp Agency construction need only be reasonable; does NOT have to be the best & need not be interp the ct would reach Arguable that once you determine agency reasoning not foreclosed by statute (by express language) then it almost always satisfies Step 2 (c) Rationale for Test i. Expertise of agency/lack thereof w/ Ct Should always makes this argument when arguing for agency 3) Theory of Chevron Deference (a) Respects functional value of agency which has experience and expertise compared to generalist ct (b) Reflects legislative supremacy in that when Cong enacts ambiguous statutes, Cong intends that agency will resolve ambiguity when implementing statute (c) Reflects judiciary view that it should not make policy decisions which must necessarily be made in resolving ambiguities i. Instead, indirectly, political agencies should make these decisions 4) Allows for more politically responsible public law (a) If statute permits different agency interps based on ambiguity, agency is allowed to change position and still receive deference E. MCI v. AT&T 1) Ct used dictionary definition of modify to resolve claimed ambiguity

(a) Held: When no ambiguity in statute, NO Chevron deference i. Agency interp was beyond what statute allowed F. US v. Mead 1) Dispute over whether Ds planners are subject to tariff under Tariff Schedule (statute) (a) Source: Tarriff Schedule (b) Form of Agency Action: Letter that was clearly legal decision of what category product is in 2) Mead Test = Requirements to GET Chevron Deference (a) Cong has delegated to the agency, the power to make law i. Intent to delegate lawmaking power may be inferred from delegated power to promulgate regs or engage in formal adj or comparable indication of legislative intent (b) Agencys legal interp being challenged has to have been made in exercise of that delegated lawmaking power i. Agency has acted to exercise delegated lawmaking power (here) (c) If this is failed, agency gets Skidmore deference 3) Mead holds source of law is VERY IMPORTANT (a) Cong is source of law being interpreted when agency has not acted in exercise of delegated lawmaking power i. Either Cong did/did not delegate power or agency did not exercise delegated power ii. If Cong is source of law, then ct determines proper interp of ambiguous state using Skidmore deference (b) Agency is source of law when agency has acted in exercise of delegated lawmaking power i. Most common when agency promulgates rules in compliance w/ APA procedures OR completes formal adj ii. If agency = source, ct gives Chevron deference to agency interp and accepts agency substantive interp of ambiguous statute (c) Mead determines source of law being interpreted and thereby determines proper deference std 4) Test After Mead (a) Did Cong speak clearly/is intent clear from statute? (Chevron I) i. If Cong spoke or intent is clear, then NO further analysis reqd (b) Did Cong delegate lawmaking power to agency? (Mead I) i. Can be evidenced by power to promulgate regs, engage in formal adj or comparable indication of leg intent (c) Is Agency interp reasonable/permissible? (Chevron II) i. If so, ct should defer if next step met also (d) Was agencys interp made in the exercise of that delegated lawmaking power? (Mead II) 5) Effect of Mead w. Regard to Agency Powers

(a) Adj i. Formal Gets Chevron deference as general matter ii. Informal Key problem b/c most agency action IS informal adj Least likely to get Chevron def (b) RM i. Formal & Informal Always get Chevron deference 6) Dissent (Scalia) (a) Thinks this will increase informal RM b/c it will get deference (b) Ossification of the law Chevron had allowed agency to make changes in interp, which people liked, but now gone b/c once a ct decides law, it is the law until Cong amends statute Agency Interpretation of Own Reg G. Talk America v. Michigan Bell 1) Whether local telephone providers had to provide certain transmission facilities to competitors @ certain price (a) Source: FCC Reg (b) Form of Action: Amicus brief 2) Held: Ct gave deference to FCC inter of its reg that facilities must be provided if used for :interconnection (a) Scalia concerned about formal SOP that agency is both making & applying relevant law 3) Aure/Seminole Rock Deference (a) Similar to Chevron, b/c ct must accept agency interp if reasonable (b) Even more reason for deference b/c agency is interpreting its OWN reg i. They ARE the source of the reg Doesnt meet Mead requirement of acting pursuant to lawmaking power (b/c brief doesnt bind people), but it is different when it is agency reg ii. Agency has expertise and has defined law, so it is in best place to determine its meaning Cong intent that ct defers to agency inter of regs (c) Limits i. Interp cannot conflict w/ clear meaning of statute ii. Interp cannot conflict w/ clear meaning of regs (equivalent limit of Chevron I) Means agency cannot amend reg through interp Would have to use notice/comment in RM instead iii. Ct will not defer to interp if reg being interpreted merely parrots statutory text Rationale: B/c it doesnt call on agency expertise Fits w. Mead b/c Cong really is source of law, agency just tried to codify text & agency will receive only Skidmore

iv. Interp must be reasonable (same as Chevron II) H. How Changes of Agency Interp Affect Each Std of Deference 1) Chevron: Still gets deference 2) Skidmore: Inconsistency in interp usually hurts agency 3) Aure: As long as agency is w/in limits, agency may change def as long as no unfair surprise (a) Hard to prove surprise if interp is still consistent w/ reg I. Issues of Fact v. Law, What is Best Scenario 1) If against agency, challenging something, is it better to challenge fact or law issue? (a) If you challenge facts i. Formal Proceeding = substantial evid record VERY deferential to agency ii. Informal Proceeding = Arbitrary/Capricious (but understood to mean same as substantial evid) iii. Challenging facts is a serious uphill battle (b) If legal conclusion i. 1st argue statue bars agency interp agency would get no deference b/c beyond scope of agency power nd ii. 2 argue agency didnt have delegated lawmaking power OR that even if they did, they didnt act according to this authority Goal is to get out of Chevron b/c once agency gets that level of deference, its over IV. Scope of Review of Exercises of Discretion A. Overton Park 1) D wanted to build a highway, and it was approved by Secretary of Transportation who had to make sure that requirements of 4(f) of Department of Transportation Act were met (a) 4(f) said there had to be no feasible and prudent alternate route for a highway to be built if it was to go through public park and can only approve when all possible planning to minimize harm (to park) has been taken (b) Form of agency action was informal adj i. Informalized interpretation of statute 2) Standard of Review (a) P tried to get every std possible under APA 706; order they tried i. Substantial Evid (706(2)(E)) Bad argument b/c only applies to formal/on the record hearings, NOT informal adj ii. De Novo Review in Dist. Ct. (706(2)(F)) Very limited, not applicable iii. If decision was w/in scope of agency authority as defined by statute/CN(706(2)(B)/(C)) Same type of argument in Chevron/MCI that agency wasnt w/in authority Basically Chevron I determination or CNL analysis

Is substantive agency decision permitted by statute? iv. Did agency follow required procedures in tracking its action? (706(2)(D)) Agency not required to issue formal findings (in this case) This is std if agency didnt follow 553 v. Arbitrary or Capricious Review (706(2)(A)) Assuming that substantive decision is permitted by statute (not in excess of statutory authority) Was agencys process of decision making sufficient? Not really concerned w/ substance of decision (b) Held: Arbitrary and Capricious Std applied i. Ct reversed and remanded (c) Review of Exercise of Discretion i. Legal determination made in the face of ambiguous statute ii. Arb/Cap review applies to exercises of discretion Look at process of agency decision making How it came to its decision, rather than substance of decision Was agency decision based on consideration of factors properly relevant to its judgment Review is conducted on the record before the agency Supplementation of agency record in ct is VERY rarely permitted i. Creates strong incentive for interested parties to get relevant info before agency ii. Consistent w/ Chenery b/c if agency get it wrong, ct shouldnt decide, but send it back iii. Supplementation only permitted when there is agency bad faith or improper behavior (d) Why is Arb/Cap MORE Attractive to Ct than Chevron I i. B/c review allows remand back to agency who can reach the same substantive decision using proper process w/ Chevron I you say agency violated statute (substantive) B. Motor Vehicle Assoc. v. State Farm 1) Dispute over whether agency may rescind entire reg about seatbelts/airbags b/c it says since car makers wont use airbags and instead only seatbelts, safety benefit is minimal (a) Carter administration had required airbags or continuous belts/detachable belts (b) Reagan came in and rescinded reg 2) Std of Review: Arb/Cap (a) Car makers wanted it reviewed as decision to NOT promulgate a rule b/c it is most deferential std around (b/c ct doesnt want to require agency to regulate) (b) But b/c agency decided to regulate, then take a step back, Arb/Cap 3) Decision is Arbitrary/Capricious IF; (a) Agency fails to consider factor(s) Cong intended agency to consider (b) Agency considers factors that Cong did not intend or want considered (c) Agency presents explanation that is inconsistent w/ record

(d) Agency provides implausible explanation for its decision Std provides check against agency acting based on invalid considerations o Ct looks to each decision and applies test 4) Decision to Eliminate Airbags (a) Agency said nothing about why they eliminated airbags, or that they considered requiring airbags only instead of an option of airbag or seatbelt i. Cong wanted safety to be chief concern, so they should have considered it 5) Continuous Belts (a) No real reason for rejection 6) Detachable Seatbelts (a) Gov't argued there would be minimal improvement Fox Television 1) Agency is not subject to a more stringent standard than initial interp is subject to if it changes its interp (a) Not required to provide more substantial reason to change policy than when it adopted policy i. Not withstanding this, reasoned explanation for change may require discussion of new/changed facts underlying the change OR may have to account for reliance interests (given relevant statutory factors) As long as statute allows for 2 different interpretations, Chevron deference is allowed, as long as explanation meets arb/cap std Arb/Cap Review & Chevron II 1) Healy thinks they are the same 2) Ultimately for agency interp to be ok, must be lawful under statute & not arb/cap Harmless Error Std 1) Whenever agency decision reviewed, due account must be given to prejudicial error (a) Gov't always has available the argument that even though mistake was made, it wasnt an important mistake i. No harm, no foul (b) Applies to EVERY std of review Judicial Review Stds in Organic Acts 1) AFL-CIO v. Marshall (a) Organic statute provided for substantial evid i. Viewed as more than arb/cap review Review of Scope Of Review 1) National Cable v. Brand X (a) Agency (FCC) interpreting statute via an order (functionally same as regulation) and dispute over telecomm service and what offer means (b) Held: Agency may come to a different conclusion regarding a statute than the court and not be bound by the courts interpretation (prior judicial interpretation is NOT automatic foreclosure) i. Exception: Agency foreclosed ONLY when statute is clear OR Judicial interpretation of statute trumps agency only when statute unambiguously forecloses agency interpretation b/c of way CT interprets statute (c) IMPORTANT Consequence Re: Ossification of Law

C.

D.

E.

F.

G.

i. If agency is properly owed Chev def for its interpretation of ambiguous statute, agency will receive that def despite fact that agency interpretation differs from previous judicial interpretation Only exception is when Court holds that interpretation is determined by statues clear meanings That is a legal issue resolved at Chev I (no ambiguity) (d) Chev Analysis by CT i. Step I They say ambiguous ii. Step II They find a reasonable explanation This time CT seems to be doing same analysis as Step I OR could say it is the same as arb/cap review This is b/c it is hard to imagine when interpretation would NOT be reasonable when statute is also ambiguous H. Treatment of Inconsistent Agency Interp & Impact on Judicial Review 1) Chev I (a) NO deference to agency in any case (b/c looking @ statutory language) i. Agency inconsistency may be relevant to court deciding whether statute is clear 2) Mead (a) Inconsistency in agency interpretation does NOT undermine Chev regime (pg. 553) 3) Chev II/Chev Def (a) Agency still receives Chev deference, when applicable, even if position has changed 4) Skidmore (a) Agency interp of statute Is LESS convincing if it has changed 5) Arb/Cap (Fox TV) (a) If agency changes position, even under Chev, change doesnt affect deference, but Ct accounts for change in Arb/cap review i. Agency must provide reasoned explanation for its position including rationale for WHY its position has changed 6) Note 7 p. 589

Reviewability, Standing, Ripeness, Finality, Exhaustion

I. Prerequisites for Obtaining Judicial Review*** A. Jurisdiction B. Statutory Cause of Action Either in Organic Statute or APA C. Standing D. Prudential Standing E. Ripeness

F. Finality G. Exhaustion Reviewability II. APA Provisions A. 701: Two exceptions to application of APA judicial review provisions 1) Other statute precludes review 2) Action is committed to agency discretion by law B. 702: Statutory (Prudential Standing) 1) 1st Sentence is waiver of sovereign immunity for non-$ damages claims 2) Provision is default rule that may be trumped by organic act or substantive act C. 703: Form of review is that provided by statute or any applicable form of legal action (1st sentence). Proper D in action (2nd sentence). Review is proper in an enforcement action, except when statute provides for other exclusive review D. 704: Defines reviewable administrative actions which must fall into either of 2 categories 1) Statutory Review: Action made reviewable by another statute; OR 2) Non-Statutory Review: Final agency action for which there I s no other adequate remedy in court E. APA does NOT provide for federal jurisdiction 1) Usually gets in under federal question jurisdiction (1231) III. APA 701 A. Johnson v. Robinson- 701(1) case 1) D objecting to being denied veteran benefits after serving alternative service after being conscientious objector to war (a) P argued that statute precluded judicial review 2) Held: To be precluded by a statute, must be clear & convincing evidence of Cong intent to bar judicial review (a) Legislative history was to prevent overbalance on the courts BUT preclusion of CNL claims doesnt serve that purpose i. This is b/c it was NOT a claim under a law in the Act, but CNL (b) There is a presumption of reviewability that must be rebutted to bar judicial review (c) Cts are especially wary of statute that precludes CNL claim i. MUST BE crystal clear before Ct will hold review of CNL claim precluded B. Bowen v. Michigan 701(a)(1) case 1) Held: Negative inference is NOT enough to show review preclusion (a) Having review precluded in once section of statute does not mean that it is precluded in another section (b) Important Factor for Ct: That review here was about across the board decision making that defined the rules for reimbursement that affected everyone, not just an individual claim C. Webster v. Doe 701(a)(2) 1) Held: Precluded statutory review of CIA directors dismissal of employees (a) There was NO LAW TO APPLY

i. No legal standards that governed the decision b/c it was completely unfettered by law (b) 701(a)(2) applies when the statute the agency is operating under does not define legal standards w/ regard to agency decision i. Thus NO LAW TO APPLY to review the decision ii. Consistency w/ Arb/Cap Review b/c law defines the stds for arb/cap review, when there is NO law to apply, there is NO basis for judicial review iii. Does this Square w/ Non-Delegation? YES Non-Delegation cases dealt w/ agency acting as legislators, here they are acting as adjudicators iv. Agency STILL may be subject to review in some circumstances Here CNL claims wee able to be reviewed, while statutory claims were not D. Agency Actions Presumptively NOT-Reviewable as Committed to Discretion 1) Decision NOT to take enforcement action 2) Decision NOT to institute an investigation 3) Reverses usual presumption of reviewability (a) MAY still be overcome by legal standards that control agency decision Constitutional Standing I. General A. Basic Requirements 1) Injury in Fact (a) Invasion of protected interest that is; i. Concrete and particularized ii. Actual or imminent, as opposed to conjectural or hypothetical Means near in time Some day intentions are not enough Spatial Components: P must show imminent interaction w/ place where injury to them will occur (b) Does NOT have to be economic i. Aesthetic injuries ARE cognizable 2) Causation (a) Casual connection b/w injury and conduct claimed to be illegal i. Injury must be fairly traceable to action being challenged 3) Redressability (a) It is likely rather than merely speculative that Ps injury will be redressed by favorable decision (b) As long as threat of future injuries, civil penalties may provide redress i. Past violations are NOT enough B. Requisite Showing Required 1) At Pleading: P only required to plead facts as to minimum requirements (allegations) 2) Summary Judgment: P must present affidavit or otherwise facts sufficient to support allegations

C. Gov't Actor vs. 3rd Party 1) When gov't does something to P, MUCH easier to get standing (a) But when injury is from gov't regulation of 3rd Party, MUCH more difficult to get stdg i. Causation/redress become hard to prove b/c may depend on actions of party not before the ct 2) Procedural claims are treated more favorable b/c dont have to show that youd win on the merits if other procedures had been used (a) Still must show legally sufficient connection to action which procedures relate i. That connection IS A3 Stdg D. Purpose of CNL Stdg 1) Application of Case or Controversy Requirement 2) SOP (a) W/o injury, P would be litigating only to ensure compliance w/ law i. THIS is a power granted to Exec (faithful execution of laws) ii. Allowing this litigation would be encroachment on Exec E. Generalized Grievances 1) SOP animates generalized grievance doctrine (a) Citizen may not sure when he is simply acting to vindicate interest that gov't comply w/ the law i. This should ONLY be addressed by political process F. Bounties 1) Assignment of claim to P is a bounty 2) This is sufficient for standing II. Cases A. Lujan pg. 619 (result is above in basic requirement) B. FEC v. Akins 1) D brought suit b/c of FEC decision to not enforce certain reporting requirements for APAC (a) Ex. of case w/ action about gov't regulation of 3rd party NOT before the court 2) Held: Injury found, even though widely shared by all b/c the lack of info affected their basic & VERY important right to vote (a) NOT an example

Prudential/Statutory Standing I. General A. Independent requirements imposed by courts before party may bring action 1) Cong has authority to weaken or strengthen this requirement B. Party w/ A3 stdg may not bring action unless it can demonstrate statutory stdg C. Purpose of Statutory Stdg 1) Conserves Judicial resources by allowing claims to be adjudicated only by person to be protected by legal requirement 2) Ensures vigilant & vigorous litigation II. Pre-APA A. Chicago Junction Case

1) A3 Stdg MET (a) Injury = unfair treatment, lose $ (b) Causation = ICC allowing it (c) Redress = Redress met if ICC action held unlawful 2) Held: When Cong enacted Act, they intended equal treatment, which is what P claims is being violated (a) Act created legal interest B. Alabama Power 1) Held: No stdg for competitors of company who received bad loan (a) No legal interest C. FCC v. Sanders 1) D was going to suffer economic harm as result of decision by FCC (a) This meets A3 stdg 2) Held: Even though just an economic competitor, SATISFIED statutory stdg (a) Cong provided that anyone aggrieved by the Act could bring a claim, why? i. Probably b/c they knew only people like D would bring claim when harm is economic b/c why else would someone bring a claim ii. Cong IS ALLOWED to weaken the statutory stdg requirement They basically said anyone w/ A3 stdg could sue III. APA 702 A. Judicial review (under APA) is available to; 1) Person suffering legal wrong b/c of agency action (a) Bama power, Chicago legal interest analysis i. Legal wrong analysis require a decision on the merits BUT, this is a significant limit on stdg b/c P must show Cong intended to protect Ps legal int 2) Person adversely affected or aggrieved by agency action w/in meaning of a relevant statute (a) Points to statutory language, BUT Data Processing expands this B. APA isnt actually granting stdg, but says look to see if legal wrong OR statutory grant IV. APA CasesZONE OF INTERESTS TEST A. Data Processing- FIRST APPLICATION OF TEST 1) Data processing comp any challenging ruling of Comptroller that banks could make data processing services available to other banks and some banks had already started preparing services for banks D had contracts with 2) A3 satisfied (a) Injury = $ loss (b) Causation = Comptrollers decision (c) Redressability = Finding it unlawful would be redress 3) Dispute was over whether P had prudential stdg and whether APA granted it 4) Held: APA provides prudential stdg (a) Zone of Interests Test: Must be satisfied to get stdg under APA i. P must be able to prove arguably w/in zone of interests to be protected ii. Focus of test is on statutory provision(s), violation of which forms gravamen of Ps complaint

Analyze relevant provisions to identify the interests arguably protected by provisions B. Postal Service Case 1) Postal unions challenging decision to allow people to use private courier services in some cases. Certain restrictions were suspended under Private Express Statutes (PES) to allow private carrier service. (a) Said that they were within zone of int PES b/c jobs would suffer (b) A3 was assumed to have been met 2) Held: P did NOT fall within zone of int (a) Ct looked at relevant sections that were part of Ps merits claim, which did not protect employees i. The PES statutes were to provide everyone w/ equal access to postal service & revenue protection for the postal service so that businesses could not take advantage of news through private couriers faster than ppl using post service, NOT to protect jobs (b) Ct held that it could consider other statutes than just that which P used for complaint, BUT to do so, it MUST be related to statute P is brining action under i. PES was NOT related to Postal Reorganization Act they wanted to use (c) Related means closely related i. Appears that leg hist of related statute must mention references to the other C. NCUA v. First National 1) Fed Credit Union Act required credit unions to have membership limited to groups having common bond of occupation or association, or groups w/in well-defined neighborhood (a) P (administrator of Act) had consistently interpreted this to mean ENTURE membership must have same common bond - usually occupation i. Then it changed interpretation to allow credit union membership to serve several job groups that were unrelated to each other (b) D said new interpretation violated FCUA and P was w/in Zone b/c FCUA protected banks from competition from credit unions 2) A3 Stdg Met (a) Injury = Economic (b) Causation = decision (c) Redress = If decision is invalid, will be redressed 3) Held: Ct found D to be w/in Zone by looking only to the text of the statute and refusing to consider Leg hist (a) ***Does NOT matter than Cong didnt specifically intend to prect bank interest, their interests must only be arguably protected by the statute*** i. Part of FCUA limited potential mkts for credit union, which was int arguably protected of the banks in limiting their competition (b) NO LONGER required that P demonstrate Cong intended to benefit particular group that P is part of i. ZONE = Legal Interest Lite BUT NOT Sanders stdg

ii. This may depend on whether court approaches statute only through text OR leg hist (c) ***KEY*** i. Focus on particular provision party claims is being violated instead of entire act (d) Attempts to draw line b/w arguably w/in zone of int VS. incidental beneficiary i. Insufficient to be a mere incidental beneficiary Ex. about transcribing hearings (pg. 674) that were mere incidental beneficiary They were such only because the litigation was directed at the parties and NOT the agency (e) Interaction w/ Postal Case i. Unlike the Postal Workers b/c there the workers could not challenge the action b/c the relevant statute was about competition, NOT job protection Only interest re: competition were arguably w/in zone D. Bennett v. Spear 1) P challenging biological opinion of Fish & Wildlife Service re: Endangered Species Act of 1973 & operation of Water Project (a) P received water from the project for crops & b/c of new opinion would be hurt b/c would not receive enough water anymore 2) A3 Stdg (a) Injury = Reduced ability to get water i. Note: Stage of proceedings here (pleading) requires only mere allegations More deference to allegations of A3 @ pleading (b) Causation = Bio Opinion (c) Redress = If opinion unlawful, P would be relieved 3) Analysis/Progression of Prudential Stdg (a) First look to Organic Act NOT APA i. Unless claim is a violation of APA, b/c then the APA IS the organic Act Organic Act is better usually b/c APA review only when no other adequate remedy in ct and Organic Act may provide atty & expert fees ii. ESA Citizen Suit Provision Default prudential stdg standard is zone of int Test Look to see whether Cong has removed prudential stsg requirements Ex. by allowing a suit by anyone who satisfies A3 stdg Determine whether Cong has required more than zone Test Ex. if Cong requires a Legal Interest Here provision allowed anyone to bring suit as long as A3 is met b/c Cong CANNOT eliminate A3 stdg*** (b) Second, turn to APA provisions i. Apply Zone of Interests Not looking to general purpose of statute in, but look at provision directly and what interests provision itself protects

How Ct Applies This D claimed general purpose of ESA was to protect endangered species, and P was NOT w/in that Zone BUT Ct REFUSES to look at ESA entirely and looks as 1536 directly and what interests it protects itself i. It required agency to use best biological info in making decision ii. Cong meant for agency to protect endangered species when actually necessary, when given best scientific info, but other interests were protected by this such as WHO else had competing uses for water E. Summary of Prudential Standing 1) Test is now whether P would be arguably within the zone of interests protected by the particular provision that the P is claiming is violated by agency (a) DO NOT consider the entire Acts general purpose and protections, but instead only the particular provision at issue 2) First look to Organic Act to see if Cong has raised/lowered prudential requirements Then, look to APA (which uses Zone Test) 3) Negative Inferences: Just b/c Cong has expressly provided for review in certain provisions, DOES NOT mean that review under APA is precluded everywhere else (a) Otherwise, presumption of reviewability would mean nothing

Ripeness I. General A. Not entirely A3 or Prudential 1) Ct seems to classify it as A3, but more like just informed by A3 B. Ripeness is ALWAYS an issue w/ pre-enforcement review 1) B/c if what is at issue is injunctive/declaratory relief, CT must consider whether proper case is before it before granting relief C. Ct views doctrine as prudential limit on cts granting of discretionary relief D. Ripeness vs. Review Preclusion 1) Ripeness: Sourced from CT and what is appropriate for judicial review 2) Review Preclusion: Sourced from statue, APA E. Ripeness vs. Substantive DP 1) Subst DP: Accounts for govt int 2) Ripeness: Does NOT account for such int II. Test for Ripeness (Abbot Laboratories & Toilet Goods) A. Fitness of issue for Judicial Review 1) Assess nature of issue: Purely legal is example of fit for review (a) Factual issues are not fit for review

(b) Abbot was a purely legal issue, and TG said use of may in statute made ct cautious to interfere 2) Finality of agency action (APA 704) (a) Ct is wary of interfering w/ ongoing agency action i. Also issue w/ APA With APA, even though action IS final, (as required by APA), issue still may not be fit for review Final Plus Finality necessary, but NOT sufficient (b) Which party (agency or P) would benefit from postponement of review until the action has become more concrete? B. Hardship 1) Most significant when agency is trying to regulate P primary conduct (a) Mere inconvenience to party is not enough 2) Abbott: Very clear hardship (a) P had to substantially change behavior and primary conduct or risk severe penalties and possible jail time after 3) TG: No hardship (a) No serious risk of severe penalties i. Not regulating primary conduct III. Finality A. General 1) Finality is a sub-requirement for Ripeness but is NOT = Exhaustion 2) It is necessary but not sufficient for Ripeness to be met 3) ***WHEN ANALYZING*** (a) Consider finality FIRST, b/c it is necessary but not sufficient. Then say assuming finality and analyze ripeness. 4) Why is finality important? (a) Functionally: to prevent interference i. Ct wants to let the agency have an opportunity to decide issues and correct mistakes that have been made that would have otherwise been corrected (b) Formally: B/c the APA requires it (704) i. If NOT specifically provided for in organic act, agency action must meet finality requirement under APA 5) Two Ways for Agency Action to be Final (a) Congress explicitly provides a right of review in the statute in the statute i. Dont have to worry about finality under APA, but must meet requirements in the statute (b) Use APA 704 to meet Finality requirement B. Finality Test 1) Action must be consummation of agencys decision making process; AND (a) Process consummated when there is no entitlement to further review by agency i. Opportunity for informal discussion/negotiation does not show lack of consummation 2) Agency must determine rights/obligations OR cause legal consequences (a) Bennett says bio opinion meets this

i. Determine Rights/Obligations Order imposed legal obligation to restore property to give EPA access to the site ii. Legal Consequences Subjects P to double penalties (following receipt of order C. Finality of Agency INaction 1) At that point can you get review of agency in action? (is it ever final?) (a) APA 706(1) provides for judicial review for agency action unlawfully withheld, or unreasonably delayed (b) APA 551(13) Defines action also as a failure to act 2) Best arguments are when agency action must occur w/in time limit in a statute 3) May even get review of agency inaction when the action was one that was committed to agency action if there were factors to apply and agency simply never acted Statutory Time Limits on Judicial Review of Agency Actions I. General A. Flipside of Ripeness B. Are you able to wait until enforcement action to bring claim or will you somehow lose you claim if you dont try pre-enforcement II. APA 703 A. Review of regulation is permitted at time of enforcement action is brough unless law (statute) provides for another exclusive opportunity for judicial review 1) Judicial limits to foreclosure of review independent of exclusive opportunity (a) Must be adequate notice to party whose claim would be barred (b) Enforcement must be available, that it claim must have been ripe (c) Exceptions that allow review outside of exclusive review opportunity i. Agency reopens consideration of issue ii. Abnormal or exceptional change in circumstances (d) What do you do if you lose claim b/c of 703? i. Can petition agency to change reg

Exhaustion I. General A. Ultimately Cong has authority to define review 1) In absence, it is the job of the Ct to define review II. Exhaustion Test (McCarthy) A. In absence of Cong defining whether exhaustion is necessary or not necessary, Ct will engage in balancing decision in deciding whether exhaustion is required 1) Consider interests of party against admin agency against admin agency authority and judicial efficiency (a) 3 Broad Circumstances Where Ct Doesnt Require Exhaustion

i. Unreasonable delay by agency or irreparable injury despite reasonable timing of agency action ii. Exhaustion is futile b/c agency is unable to resolve the issue (ex. claim of UNCNL) or grant type of relief party seeks iii. Exhaustion would be futile b/c agency is biased or issue is predetermined B. This test is to be used OUTSIDE of Cong providing rules for exhaustion in statue and outside APA C. If you had to exhaust, and didnt do so, your claim is barred III. Exhaustion and APA 704 A. Defines when exhaustion w/in agency is required B. Final agency action need not be appealed w/in agency unless agency rules require an appeal and provide that the action in inoperative while that agency appeal is pending 1) This legal rule TRUMP traditional judicial balancing 2) Establishes bright light rule that unless agency regs requires exhaustion, exhaustion is NOT available to foreclose review 3) Finality becomes more important under APA b/c this exhaustion provision applies ONLY when agency action is otherwise determined to be final C. To avoid judicial review agency must require exhaustion in regs IV. Exhaustion Requirements & Contexts for Possible Application A. Party seeking judicial review of a claim prior to completion of admi proceedings, so that there is no opportunity for agency determination (Myers) 1) 704 wouldnt apply b/c it wasnt a final determination 2) situation like this would probably be a finality case B. Party who seeks judicial review of claim following initial determination (usually by ALJ), but prior to completion of all opportunities for revoew w/in agency 1) Before Darby good exchaustion argument 2) But, this IS Darby (a) 704 provides that exhaustion is not required unless another statute or agency regs provide that agency action is not effective/final until all agency proceedings are completed (b) Changed law where it used to be Madigan Balancing Test 3) After required/necessary admin proceedings are complete, party wants to raise issue before reviewing ct that party did not raise or did not exhaust before the agency (a) Issue exhaust NOT required in Sims i. May be required in other contexts in order to ensure benefit of expertise