LEG REG EXAM OUTLINE
INTERPRETING STATUTES IN THE CONSTITUTIONAL FRAMEWORK
If you’re making an argument that your interpretation of a statute is right, first, refer to the statute and see if it helps, make textual argument. If not, then try to argue that it’s ambiguous. If so, you can use legislative history.
EXAMPLE STATUTE = FMLA
o Purpose: prevent discrimination, gender neutral.
o Legislative history: Major compromise = making the required leave unpaid, balancing the econ interests of the employer. There’s a precedent of taking certain things off the table for collective bargaining agreements (or indiv employment agreements), for ex, having an established minimum wage. Background = contract law which wasn’t seen as deterring employers enough.
o There IS a private right of action.
3 canons of statutory interpretation:
o purposivism = the overall goal of congress is the most important (Rector)
o intentionalism = congress had an intent as to how this case should come out (TVA v Hill)
o textualism = Scalia’s view, text of the bill is all that matters. (Locke)
DEFINITIONS OF WORDS:
o AVERAGE PERSON’S MEANING: Nix v Hedden 1893 à There were diff tarriff rates for fruits v vegetables, and P wants tomato to count as fruit, D wants them to count as vegetable. Court says it’s not dictionary definition, and not congress’ intent as to the item, but the common person’s definition, i.e. is it used in desert or main course.
o PRECISE MEANING OF WORDS, WHEN NOT CONTRARY TO CONGRESS’ INTENT AND WHERE CONGRESS HAS SPOKEN: US v Locke 1985 à Does “prior to Dec 31st” include the 31st? D wants it to mean “on or before Dec 31st,” because otherwise they filed paperwork a day late and waived mining rights. Court says the literal reading of the statute is in line with congress’ intent in the act. If congress had left a gap, then court could fill it, same if it was ambiguous, but congress has spoken clearly.
o ESJUDEM GENERIS: People v Smith, 1975, Supreme Court of Michigan: when a statute includes a list of specific terms followed by a general term, the general term only covers subjects comparable to the specific terms. So when it said “any person who shall carry a dagger, dirk, stiletto, or other dangerous weapon” that was only meant to cover other knives, and even more evidence for this is that there’s another law that covers “other firearms.”
o EXPRESSIO UNIUS EST EXCLUSIO ALTERIUS: Dillon v Maryland National Capital Park & Planning Commission, Maryland District Court, 2005: Claim under FMLA, P wants “parent” to include her grandmother bc she was raised by her. The FMLA only covers the relationships it lists, and excludes others, bc of expressio unius, if congress listed some, then they must have purposely excluded any they didn’t list.
o If a word is used in a certain way (ex. Parent in law = parent) even once in a statute, you could argue that it should always be read that way.
SEPARATION OF POWERS ISSUE: Are the courts supposed to just follow congressional intent all the time, or only if there’s no ambiguity in the text
o TVA v Hill 1978: Majority says that judges are just supposed to figure out what congress’ intent was, as long as there’s no ambiguity they need to follow it. Endangered Species Act says that agencies have to make sure that any “action” that is “carried out” by them does not hurt endangered species. Here, there’s a dam that’s essentially ready to be completed, but then an endangered species fish was found to be harmed by it if it opened. Congress did keep funding it, but court says an appropriations committee isn’t an authoritative guide to congressional intent the same way an actual statute is.
Majority (fish should live) Minority (dam should open)
“Carried out” = Fund, finish project, open dam. Decide to be carried out, i.e. establish project
Which interpretation to use Most likely to be congress’ intent Best option for public out of possible congressional intents
“action” = Any action Prospective action
Statute = clear / ambiguous? Clear Ambiguous
Minority = Powell. Judges can choose out of the possible interpretations and choose the one that’s best for the public good. Maybe he injected ambiguity, there’s always going to be SOME ambiguity.
Majority = Burger. once you interpret a statute and see what congress’ intent was, if that fits with the text, then your job is done. But maybe this interp just accords with his values, is he being less honest than the minority?
WHEN CONGRESSIONAL INTENT IS CONTRARY TO LITERAL MEANING:
o Rector v Hill 1892: Go with Congress’ intent. Congress had passed an act that limited who could come into the country and work as a “laborer” but it was for wage deflation concerns not immigration level concerns. The common meaning of “laborer” would include a priest, but court says that bc of the country’s religious foundations they couldn’t have meant to include priests. Intent over letter of the law. Arguments court uses for going against literal meaning:
§ Precedent: Examples of other cases where court says things are within the intent but not the letter of the law
· Counterarg = all the other cases are extraordinary/bizarre situations, this one isn’t, not analogous
§ Congressional intent
· What problem is it meant to redress
· Legislative history: senate report
o Counterarg = is this really authoritative?
· Title of act
o Counterarg = this is just an abbreviation, we cant expect all the intents to be in there.
o First see if statute is ambiguous. If not, no need to look to legislative history. If it IS, then you look to legislative history.
o Senate reports: audience = the rest of the senate that wasn’t involved in the bill, the public, the agency administrators it will effect. It’s usually very general, doesn’t discuss specific situations. Makes arguments for the bill, does cost benefit analysis. You can look to this for definitions of words, etc.
§ Blanchard v Bergeron 1989: A contingency fee arrangement is not a cap on the award of attorney’s fees allowed under the Civil Rights Attorney’s Fees Awards Act. The statute allowed for ‘reasonable’ attorneys fees. Court looks to legislative history (senate reports and the cases they refer to) to determine that the intent of congress was to encourage civil rights litigation, and capping attorney’s fee awards would be contrary to this bc would encourage lawyers to take only cases with high damage awards.
· Scalia concurs but says legislative history isn’t as important as precedent or other statutes, bc it’s not realistic to think that a senate report really represents the intent of congress.
§ W. VA Univ Hospitals v Casey 1991: Where there’s no ambiguity, no need to look to legislative history. And we can find a lack of ambiguity by looking at other statutes. Expert witness fees are not included in the award of “reasonable” attorney’s fees. Scalia refers to the way the term “attorneys fees” is used in other statutes and finds that congress generally treats them as 2 separate things. Also finds times when statutes award both attorneys fees and expert fees, and we should interpret them to mean different things, otherwise congress was being redundant.
THE ESTABLISHMENT OF AGENCIES IN THE CONSTITUTIONAL CONTEXT
LIMITS OF EXEC POWER
o Youngstown Sheet Co v Sawyer 1952: Truman’s executive order to tell the Secretary of Commerce to nationalize most of the nation’s steel mills was unconstitutional because it was a usurping of legislative power. Majority opinion said it’s a binary thing, if it’s executive, the prez can do it, if not, he can’t. And here it’s not exec bc:
§ It’s a legislative issue so he cant act in his commander in chief role
§ The language of the exec order looked like a statute.
§ The exec order doesn’t say any law is being broken
§ In labor dispute statutes congress has passed, prez does not have power of seizure.
· JACKSON’S CONCURRENCE: It’s not a binary thing, power is power, it is instead about the interrelationship of the power each branch has, and when the president is acting against the will of congress, as opposed to when they are silent or agree, he has the least power.
OSHA = Example statute.
o Background = tort law which wasn’t seen as giving enough deterrence to employers.
o NO private right of action, the only penalties are citations/fines/ civil and criminal penalties, so those are very important.
o The act just gave general guidelines, and Secr of labor is supposed to make specific rules and promulgate them, except for toxic chemicals there are more specific guidelines.
§ CONGRESS CAN CREATE AGENCIES THAT DO NOT HAVE SPECIFIED RULES THEY’RE SUPPOSED TO PROMULGATE, INSTEAD THEY MAKE THE RULES, BUT ARE RESTRICTED BY THE ACT. Industrial Union v American Petroleum 1980: Secr of Labor promulgated a very low PPM of benzene allowed in the air, question for the court is whether that is “reasonably necessary to provide safe places of employment” which is the main OSHA req, and also the toxic chemicals special req that Secr make sure that no employee will suffer material health harm even if employee is exposed to risk for the whole of their working life. (Won’t decide whether Secr should do cost benefit analysis, and wont decide whether Secr has to promulgate standards that lower the risk as much as possible.)
· Majority: Secr used wrong standards, didnt show that there’s significant risk of harm from a higher PPM of benzene, instead operated on no risk policy, which isn’t what congress delegated to them.
· Marshall’s dissent: standard should be upheld bc statute is clear and the Secr was within their discretion to promulgate standard.
· Powell’s concurrence: Congress did intend Secr to do cost benefit analysis
· Renquist’s concurrence: The statute is unconstitutional bc delegates too much power to Secr, legislative power is usurped.
DELEGATION: tension bw Art 1 Sec 1 of the constitution that says all legislative powers HEREIN GRANTED shall be vested in Congress, and Art I Sec 18 which is the necessary and proper clause. But the herein granted language is only in Art I about the legislature… does that imply delegation? So it’s a spectrum. How do we know if an instance of delegation passes constitutional muster?
o INTELLIGIBLE PRINCIPLE (Art I delegating Art I power to Art II) Whitman v American Trucking Assn 2001 (citing JW Hampton Jr v US): The test of whether congress has delegated power to an agency unconstitutionally is whether the statute gives the agency an intelligible principle with which the agency has to conform, and that can be pretty vague (see the benzene case). It’s no solution for the agency, when given legislative power, to choose not to use it. But here it IS constitutional, there is an intelligible principle in the EPA’s instructions to set air quality standards “requisite to protect the public health.”
o In reality, congress has been permitted to delegate widely, and it’s very rare that a statute is deemed an unconstit delegation of legislative power. Ways they have justified it include:
§ If the regulations are just “filling up the details” (Wayman v Southard)
§ If it’s limited to a certain circumstance (omnicompetence can’t be delegated)
§ If there’s external monitoring (Yakus v US)
o Pros of delegation:
§ Congress doesn’t have time to set all the rules, maybe it IS necessary and proper
§ Let’s rules be set by experts at agencies
§ Agencies aren’t elected so less political
o Cons of delegation
§ Separation of powers issue, too much power granted to executive branch
§ Agencies will be less secure, vague guidance, more discretion
§ Congress is insulated from political ramifications of the rules agencies set
o IMPERMISSIBLE INTRUSION TEST (Art I delegating art III power to Art II) More stringent. When legislature delegates power to agency COURTS, the test is (COMMODITY FUTURES TRADING V SCHOR, Supreme Court, 1986):
§ Are the essential attributes of judicial power reserved for article III courts
· These are: jury trial, right to suspend habeus corpus, general jurisdiction, tenure of office for judges.
§ Do the non article III courts have any essential attributes of article III courts
§ The origin/importance of the right to be adjudicated
· It helps if art III courts retain the power of enforcement, which was the case here. (this is not that common)
· It helps if there’s the option to go to an art III court instead (this is not that common tho was the case here)
§ Intent of congress in delegating judicial power to a non-art III court
· Here intent was seen as pro-delegation, weigh benefit of a cheap and convenient way to resolve disputes against level of intrusion upon art III.
o There are MORE cases tried in admin courts now that in art III courts.
§ Pros: Keeps costs down, these are usually routine matters that involve only questions of fact, not law
§ Cons: Supposedly they only adjudicate “public rights,” things that are prohibited by statute, but more and more things are becoming that way, so these courts will grow
o Separation of powers in general: Agency system has a bit of power from each branch of government, for example, for the SEC:
§ Legislative à make rules for securities trading
§ Executive à investigate whether people follow the rules
§ Judicial à impose sanctions for rulebreaking
· But agencies are also controlled by the branches, in that congress can control them by cutting their budget or passing laws that go against their rules, and they are subject to judicial review.
RELATIONSHIP BW EXECUTIVE BRANCH AND AGENCIES , REMOVAL
o Myers v US 1926: The President is allowed to remove agency posts without the consent/advice of congress, even though he must seek the consent of congress for their appointment. Post at issue was postmaster general. So the statute that said that the govt needs the approval of congress before removing an executive official is unconstitutional, bc it conflicts with article II of the constit giving president all exec power. Reasons:
§ Requiring the consent of congress for apptmt was a political compromise so we should read it strictly, not to imply other things.
§ The power of appointment is different from removal bc in appointment the senate might be more knowledgeable than the prez about the person, but in removal everyone can see how good a job he did
§ The constit has no express limit on removal or on exec power, unlike legis power
o Humphrey’s Executor v US 1935: Restricts Meyers, says that the president has removal power without consent of congress ONLY when the post is purely executive, not quasi-legislative or -judicial. If it’s not an entirely executive post, look to statute to see whether it provides for the post in question to be fired for cause or at will.
§ Here it was a member of the Federal Trade Commission, and letting the prez remove him at will was seen as particularly dangerous because he has so much expertise.
§ The FTC was supposed to be nonpartisan, independent, which also mattered here.
o Morrison v Olsen 1988: New test = balancing test, do restrictions on removal at will prevent the president from doing his constitutional duties of carrying out the laws faithfully? Most extreme case = the cabinet, under this test, the prez can definitely fire the cabinet at will. Issue in this case: can congress delegate to the judicial branch the power to appoint an officer in the executive branch, and allow the exec branch to fire them only for cause?
§ This case was about title IV of the Ethics in Govt Act, which let congress delegate to the justice dept the appointment of a special investigator who would have the power of the attorney general. This WAS deemed constitutional, because
· She was an inferior officer
· Prez still has removal power, even if it’s limited to for cause, he still has it
· The executive power it takes away from the exec branch is limited
· The appointment power congress delegated to the judicial branch, i.e. to appoint a special prosecutor, is a fitting role for the judicial branch.
PROCEDURAL FRAMEWORKS FOR ADMINISTRATIVE ACTION
CONSTITUTIONAL STRUCTURE: DUE PROCESS: When the agency action is legislative, no DP necessary, but where it is adjudicative, DP applies, so the issue is whether the agency action makes a general rule or affects individuals. (test laid out in Bi-metallic). Rationale is that there’s no right for notice and a hearing before congress passes a law, and even though congress is elected whereas agency officials aren’t, congress has delegated their power to these agencies and we elected congress, so we must abide by the RULES agencies set, but for adjudications, DP rights apply.
o Londoner v Denver 1908: P says they didn’t get notice and a hearing before the board of public works (an agency) made a final assessment of taxes they’ll have to pay for the benefit conferred on their property by the paving of a road abutting it.
o Bi-Metallic Investment Co v State Board of Equalization of Colorado 1915: The agency regulation raised the valuation of all property in Denver by 40% which in turn raises residents taxes. action makes a general rule.
o Types of arguments to make for a case like this:
§ Analogical = this looks more like legislative/adjudicative
§ Functional = what would a hearing look like and how useful would it be
STATUTORY STRUCTURE: APA à takes up supreme court’s separation of powers lens through which to view DP clause, separates adjudicatory / legislative functions in rulemaking / adjudication divide.
Informal 553 (notice and comment) If there’s no statutory instructions for formal hearing, DP clause applies (Goldberg v Kelly), not full trial guaranteed, and 555
Formal 553 à 556 and 557 based on statute (rare) 554 à 556 and 557 based on statute
o Rulemaking: makes rules/regulations. Can have general or particular application. Ratemaking is included in rulemaking.
§ Section 553: Notice and Comment rulemaking, informal rulemaking.
· NOTICE: Requires notice in the fedl register
· COMMENT: No right to an oral hearing, but right to submit written data
· You don’t have to be a party to participate in rulemaking, just interested party.
· Does not apply to interpretative rules, general statements of policy, rules of agency organization procedure or practice
· Final rule must include concise general statement of basis and purpose
· When statute requires rules to be made on the record, 556 and 557 apply. (very rare)
o Adjudication: makes orders. Includes the issuing of licenses.
§ Section 554: Formal Adjudication
· Kicks us over to sections 556 and 557
· Only applies when the statute requires an on the record adjudication
· Limited to “parties,” not anyone can enter the adjudication
· The adjudicator may not
- Be the prosecutor/investigator (except for licenses, then it’s OK)
- Talk privately with one side
- Supervise the prosecutor
o Sections 556/557: Formal hearings on the record, pretty much a full trial.
§ Usually ALJ presides
§ Agency has burden of proof
§ Oral and written evidence is admissible
§ 556e Only evidence on the record will be considered in reaching the verdict
§ Right to cross examine
§ 557b: agencies have final decision making power, can overrule ALJs, at issue in Universal Camera
o WHICH APA CLAUSES APPLY AND HOW DO WE KNOW?
§ 554 CAN BE GUARANTEED BY THE CONSTITUTION, NOT JUST STATUTES Wong Yung Sang v McGrath 1950: Was overruled by legislation, but said that section 554 applied to deportation proceedings even though it didn’t say so by statute, but rather because to do otherwise would be to violate an alien’s DP rights. The part of 554 that made this important was the separation of prosecutor/judge. Important bc:
· Psychology of a prosecutor prevents them from being impartial
· Perception of unfairness
§ Sec 706 (AGENCY/COURT STANDARD OF REVIEW) APPLIES TO AGENCY FACTFINDING: Dickinson v Mary Zurko 1999: Section 706, which sets out the standards for judicial review for agencies, does not apply when exempted by Section 559, which says that the APA does not repeal additional limits on judicial review requirements recognized by law. Court says the difference is very subtle and doesn’t lead to any real ‘additional’ limits on judicial review, and they don’t want to start granting exceptions to 706 bc the point of the APA was uniformity.
· Court/court standard of review of factfinding: higher court can reverse only if clearly erroneous
· Court/agency standard of review of factfinding: court can reverse only if agency decisions are arbitrary and capricious.
§ WHEN IS 554 REQUIRED BY STATUTE?
· First step, is it an adjudication (remember if license/permit then yes)
· Second step, is it formal. Does statute say that a hearing on the record is required for adjudication?
- STATUTE DOESN’T NEED TO SAY THOSE EXACT WORDS: Seacoast Anti Pollution League v Costle 1st Cir 1978: If it is adjudicatory not legislative, then you do get section 554. It’s based on congressional intent, what kind of hearing did they intend to give. As long as it doesn’t say that the hearing does NOT need to be on the record, then if it’s adjudicatory, it does need to be on the record. “Public hearing” was taken to mean evidentiary hearing.
- IT DEPENDS ON THE RIGHTS TO BE ADJUDICATED: Chemical Waste Management v EPA DC Cir 1989: “public hearing” requires 554 ONLY if the hearings could lead to a civil penalty or the interference with the right to continue operations.
- EFFECT OF CHEVRON: Dominion Energy Brayton Point v Johnson, 1st Cir 2006: The EPA says that ONE possible interpretation of “public hearing” is NOT to have a hearing on the record. Now that Chevron has been decided since Seacoast, court says that as long as there is ambiguity in the statute about whether or not congress intended to guarantee an evidentiary hearing, then the agency interp gets Chevron deference, and here there IS ambiguity so despite Seacoast, agency’s interp that section 554 doesn’t apply is upheld.
o INFORMAL ADJUDICATIONS:
§ SECTION 555 provides guidelines for informal adjudications: Pension Benefit Guarantee Corp v LTV Corp 1990: for informal adjudications, section 555 gives maximum standards the court can hold the agencies to. In cases where DP rights don’t apply, then the courts use 555 to have something to say about procedural reqs, but 555 gives you LESS than arguing DP would give you, bc you don’t get to hear the evidence against you, whereas with DP you do, generally. So mostly ppl try to argue DP not 555 because you get more.
§ DUE PROCESS: only applies to adjudications. Applies to “life, liberty and property.” Also things that you get as statutory entitlement (Goldberg). Assymetry: doesn’t apply to beneficiaries of regulations if those benefits are infringed upon, but does apply when parties are regulated. What do you get? Matthews test, balancing test between:
· Private interest
· Risk of error
· Value of addl procedure
o APA general features
§ Was a response to the growth of agency system
§ Was a political compromise
§ One purpose was uniformity amongst agencies
§ Hasn’t been amended much bc any changes can be made in the organic statutes of each agency
§ Defers a lot to the organic statutes of the agencies, notably for whether to have trial-like procedures under the APA for both rulemaking and adjudication
§ Informal adjudications aren’t covered by the act, and those are very important, a limitation of the APA.
o In 1947, justice dept released a manual about the APA that you can use as a guide to interpretation bc the justice dept helped draft the APA. In that:
§ The word “hearing” doesn’t automatically trigger an on the record hearing, but that req can be either express or implied.
§ Agencies have to release a concise general statement of the purpose of any regulation they promulgate. Doesn’t have to have specific findings of fact or law.
Formal rulemaking is rare, most often used is informal notice and comment rulemaking, section 553. As long as the final rule is a “logical outgrowth” of the original proposal, it’s OK. If it weren’t, they could just re-notice it.
Movement towards rulemaking and away from adjudication bc:
o Rulemaking will produce a solution across the board, so is more efficient
o Allows more interested people to be involved in decisions
o New statutes requiring regulation are on the books
Sugar Cane Growers Cooperative v Veneman 2002, DC Circuit court of appeals: Even if it’s not clear how much difference notice and comment would have made to the eventual rule, the agency still has to go through the process.
o Govt had argued that farm subsidy awards weren’t rules bc were individual awards, similar to award of a contract to a bid, but court says no, it laid out rules for future bids, it is a rule so they have to follow 553.
US v Nova Scotia Food Products Corp 1977 2nd Circuit: FDA issued across the board rule for smoked fish, didn’t go species by species, even though the risks of botulism differed between species. This was a 553 rulemaking.
o Court says agency’s statement of purpose was inadequate bc it must:
§ Set out what policies are behind the rule and why they thought the rule was the solution
§ Must address severe economic consequences, like destroying the whole whitefish industry
§ Must justify why an across the board rule was best.
o Court says agency was wrong not to disclose the scientific data it relied on bc the evidence used to make the rule should be on the record. How much did they have to disclose? Agency can use its own expertise outside the record since it’s informal, but here they should have because:
§ The agency gathered the info themselves, it wasn’t interested parties
§ They must present for notice and comment all the evidence they have, otherwise people can’t comment, which means agency hasn’t considered all factors, which means agency’s decision could be deemed arb/cap.
· *** this case could come out the same way post VT Yankee, but not with the same reasoning, you’d have to ground it more solidly in the APA, which you could do just by saying it’s arb/cap not to let ppl comment on your scientific data.
· Generally it’s a good idea for agency’s to disclose info just so they don’t risk their rules being deemed arb/cap. Also a good idea for agencies to respond to a few comments.
· You can challenge a rule bc they didn’t disclose the info they based it on, but only if it would have changed your comments (unlike how you can always complain if they don’t do notice and comment at all, no matter what you would have done)
Vermont Yankee Nuclear Power Corp v NRDC 1978: The court cannot hold the agency to any more procedural requirements than the APA dictates, unless DP, the organic statute or the agency’s own rules require more process.
o APA is seen as a compromise, we shouldn’t require things that aren’t in the text, even if it would bring more uniformity
o 1947 guide says adding extra procedure is at the discretion of the agencies not the courts.
o In this case, the issue was the granting of a license for a power plant and whether the disposal of nuclear waste and cost benefit analyses were considered.
o This wasn’t a “compelling circumstance.”
INSUFFICIENT NOTICE/COMMENT: NRDC v EPA 9th circuit 2002: Logging case. Agencies have to resubmit rules for comment if interested parties would not be able to anticipate the changes that were made during the initial notice and comment period. Here it was ruled as inadequate notice because:
o Numerous new issues arose in petitition for review
o Paradigm shift
o Change was substantive, agency even said that they have “changed their approach”
Other than the APA, procedural reqs for rulemaking can be found:
o In the organic statute of the agency
o Agency regulations and practice
o Wild card of judicial ruling of “compelling circumstance”
Hybrid rulemaking: despite VT Yankee, congress can add more procedural requirements than the APA requires in the agencies’ own statutes. Maybe the APA should be expanded to include more categories of procedure, as Scalia argues on page 509, because he says “one of the functions of procedure is to limit power – not just the power to be unfair, but the power to act in a political mode, or the power to act at all.” P 508.
Ossification = risk that imposing too much procedure on rulemaking will paralyze it, as per the ice cream example.
AGENCY EXPLANATION/JUSTIFICATION FOR ACTION REQS: a way of making sure that there’s not arbitrariness in agency decisions without requiring formal rulemaking.
o Indep US Tankers Committee v Dole DC Circuit 1987: Court rejects the rule the agency made bc it’s statement of purpose didn’t address how the rule will further the goals of the organic statute of the agency, whereas this just gives policy reasons for the rule, and doesn’t say why they rejected alternative suggestions.
o COURT WON’T TELL AGENCY TO PROCEED BY RULE RATHER THAN ADJUDICATION:
§ SEC v Chenery Corp 1947: The Supreme Court heard this case twice, about the SEC making an order that rejected a plan for a company’s reorganization. The first time they remanded the agency’s decision to the agency for a better explanation bc it wasn’t supported by the evidence, but the second time around they approve it bc the agency gave an explanation that was fine. So they don’t have to make only a forward looking rule, doesn’t conflict with Chenery I.
· Benefits of informal rulemaking:
o More notice to regulated agencies
o More efficient
o You could adjust it by only having the rules apply to certain restricted entities
o Will make policy based on what’s good overall, not just based on which cases people decide to press
· Benefits of formal adjudication:
o Adjudication for one would provide notice for others
o Relief structure would be different
o Would cause less public outrage maybe
o Can be used as an interim measure while the rule is formed
§ Bell Aerospace v Natl Relations Labor Board 2nd Cir 1973: If agency is reversing a longstanding position, they have to go through the rulemaking procedure, they cant just use adjudication because:
· they’ll benefit from the notice and comment
· regulated entities will be able to be heard.
· Gives notice to regulated entities
§ NLRB v Bell Aerospace 1974: Reversed, it’s at the agency’s discretion whether they want to proceed by rule or adjudication, even if it’s a departure from agency precedent
o THIRD CATEGORY OF PROCEDURE? VT Yankee says this doesn’t exist, but all the requirements the courts have put on agencies have basically created a category between informal and formal rulemaking, ex. = requirements for the concise and general statement of purpose.
INTERPRETATIVE RULES: these do NOT need to go through notice and comment (APA 553bA).
o How to tell if it is interpretative?
§ Not legally binding on either regulated entities or agency employees
§ Often instruct the field personnel of the agency, standardizes, lessens their discretion
§ Fairly encompassed by previous regulations, doesn’t impose any new duties/rights
§ Doesn’t amend any previous rules/regulations
§ Not published in the code of fedl regulations
§ Agency hasn’t explicitly envoked it’s legislative power
o Pros to these
§ Businesses might want them bc leads to more predictability to regulation
§ This is something the agency would be doing anyway (interpreting its statutory duties) they’re just writing them down
o Air Transport Assn of America v FAA DC Cir Ct of Appeals 2002: The FAA’s rule about how to calculate rest time is interpretative and so doesn’t need to go through notice and comment bc:
§ the rule is fairly encompassed within previous regulations
§ it doesn’t change earlier agency interpretations
§ this was an unresolved issue, and it doesn’t impose any new rights or duties.
§ In theory, an ALJ judge presiding over a case where the regulated entity did not follow the interpretation could accept a defense that they were following the old interpretation.
o GE v EPA DC Cir Ct of Appeals 2002: GE’s rule (guidance doc) about how regulated entities have to do their risk assessments for PCBs is NOT an interpretative rule, it’s a legislative rule, because
§ The wording was more mandatory/binding
§ It doesn’t give agency employees discretion, it issues binding ways they have to regulate
o Chamber of Commerce of US v Dept of Labor DC Cir 1999: OSHA’s use of a “policy statement” that said they planned to target the 12,500 most hazardous workplaces to get them to participate in a scheme that encouraged them to enter consultant relationships with the agency about safety and used the “carrot” of less frequent inspections was NOT a policy statement, is a substantive rule that required notice and comment, is binding on agency employees to inspect the plants that don’t participate. Doesn’t matter that it doesn’t impose a new legal sanction.
o Guidance documents = no legal consequence but immense practical consequence, explain how the agency plans to apply existing regulations. See Rakoff article 731 about the FDA’s use of them, they are published in the fedl register, and allow for comments. Could be seen as a way to circumvent the APA, could be seen as expedient.
o No judicial oversight of interpretative rulings bc supposedly they don’t have any binding force.
o One interpretational bite? In theory, any rule that substantively changes prior regulations must follow 553 procedures, but in Shalala v Guernsey Memorial Hospital 1995, the Supreme Court said that the agency’s interpretation of its statutes and regulations was ‘reasonable’ and the new interpretation was fairly found within them. Problem with this is that it encourages agencies to “promulgate mush” so that they can have broad latitude in interpreting their regulations. But in US v Chrysler Corp, DC Cir 1998, a regulation was struck down for being too vague and not giving “fair warning” to regulated entities. And in Chief Probation Officers v Shalala 9th Cir 1997, Guernsey’s ruling that “adopting a new position inconsistent with any existing regulations” was taken in a LIMTED way, in that it only bans new positions inconsistent with the language of existing regulations, not with the interpretations of existing regulations. So agencies can change their mind about interpretations whenever they want.
EXECUTIVE ORDER 13422: Originated in Reagan administration. Sets up OIRA (Office of Information and Regulatory Affairs) and OMB (Office of Management and Budget). Within executive branch. Reagan used it to deregulate, Clinton used it to regulate. Triggered not just limited agency actions.
§ Executive branch agency
§ Staffed by people knowledgeable about regulation, lots of expertise
§ Gets an annual list from each agency of the regulations they are considering for the following year.
o OIRA REVIEW: Agency cant publish a regulation in the fedl register until OIRA
completes it’s review and doesn’t request further consideration. OIRA review begins right way bc a regulation is defined as something that will lead to a rule. And you cant begin notice and comment until a regulation is published in the fedl register
§ Limitation, OIRA can only review “significant” rules, which is defined as
· Annual effect on economy of over 100mil
· Raises novel legal/policy issues.
§ When OIRA reviews they are checking for:
· Conflicts with other agencies’ plans
· Compliance with president’s priorities
· Consistent with applicable laws
· Principles in exec order 13422, which includes cost benefit analysis, a hesitance to regulate
o If the organic statute doesn’t give an agency discretion, then you have to follow the statute, but if it does, then the president has oversight via OMB/OIRA, though it just says that he will inform the agency of his decision, doesn’t actually give him approval power.
o “INDEPENDENT” AGENCIES: if the head of an agency can be fired only for cause, not at will, then it is an independent agency. They are NOT subject to executive orders.
§ Kagan article: Congress delegated to the president the ability to oversee agencies that are not independent. “Influence” not directives. It will lead to more transparency bc the president’s actions are more in the public view.
§ Strauss article: Presidential oversight means there is no check on executive power. Clinton’s exec order amendment appointed an RPO (regulatory policy officer) within each agency who will be OIRA’s point person within that agency, and the Bush administration’s amendment allows the RPO to control the initiation of rulemaking and it’s progress in the agency. This is more than congress delegated to the exec branch officials. If we let the president oversee the agencies, then he will be omnipotent.
JUDICIAL REVIEW: there’s no automatic judicial review, when an agency makes a rule it only gets to the courts if someone files a lawsuit. The organic statutes always include judicial review of the agency actions, or delegation would be unconstitutional. The reviewing court reviews the agency’s decision, NOT the ALJ’s decision, because the agency has the power to make the final decision (APA 557B) though the ALJ’s decision becomes part of the record the reviewing court will review. 2 things you worry about for judicial review: 1) words on paper, what’s the standard of review, and 2) what’s the “mood” congress wants the courts to have.
APA section 702: Standing, a bit broader than the people listed in the statutes, because includes people “adversely affected” by agency actions. Also, there is a waiver of immunity for the US as long as you are NOT suing for monetary damages.
APA section 703: Jurisdiction à since if you’re suing a fedl agency it will almost always be under fedl law, you have fedl question jurisdiction. So that would get you into district court, but then, we let the agencies do the factfinding, because…
APA section 704: Only FINAL agency actions are reviewable, so we only get review of the final order, not the evidentiary ruling, so it goes to appeals court. But if the agency statute doesn’t set up agency adjudications, then it goes to district court.
APA section 706: Standards of review: Reviewing court will hold unlawful agency actions found to be:
o 7062A à arbitrary and capricious = for all informal proceedings, including the factual basis for notice and comment rulemaking
o 7062B – D à These apply to factfinding
o 7062E à unsupported by ‘substantial evidence’ on the whole record = for all formal proceedings that are covered under 556 and 557.
o 7062F à rare, trial de novo
All these are based on the WHOLE RECORD, meaning both sides (Universal Camera)
The agency’s organic statutes can dictate the standard of review, for instance, the OSHA statute specifies “substantial evidence” even for informal proceedings, as opposed to arbitrary and capricious.
Pros to judicial review:
o Perception of fairness of agency action
o Part of the rationale of delegation is that the courts will check the agencies
o Judges aren’t as political as agencies so will check the politicization of agency action
JUDICIAL REVIEW OF AGENCY FACTFINDING:
o INFORMAL PROCEEDINGS (is it arbitrary and capricious based on the facts?):
Shaws v National Labor Relations Board, 1st Cir 1989: Shaws workers voted not to unionize, but the NLRB said it was a tainted election based on behavior of a Shaws VP and ordered a new one, whereas in the past that same behavior had not been seen as tainting elections. Court says that if an agency is going to depart from its own precedent, it has to explain why because
· The courts need a basis for review, the explanation is needed to see if it is arbitrary and capricious
· Regulated entities rely on the predictability of agency actions
· Courts want to make sure the agencies are being evenhanded, so need an explanation if treat one entity diff from the others.
o FORMAL PROCEEDINGS (is it supported by substantial evidence based on the whole record?):
“Substantial evidence” = enough to justify refusal of a directed verdict if it were put to a trial judge. Not “preponderance of the evidence,”
Universal Camera Corp v NLRB, 1951: Review of whether an employee had been fired bc he accused a manager of drunkenness or whether it was bc he had testified supporting the union in an NLRB proceeding. In reviewing an agency action, the court should look at the whole record to see whether it is supported by substantial evidence, not just the evidence SUPPORTING the agency’s action.
Arguably a slightly higher standard than arbitrary and capricious.
o How different are the standards? Pretty much the same in application, since courts are hesitant to turn over agency actions even in “substantial evidence” cases.
Association of Data Processing Service Orgs v Board of Governers of Fedl Reserve System, DC Cir court of appeals 1984: The APA is cumulative, so the arb/cap clause just catches things the other clauses don’t. The 2 standards are pretty much the same, there couldn’t be a nonarbitrary judgment not supported by substantial the evidence.
But then it did lead to a different result with AFL-CIO v OSHA 11th Cir 1992, when OSHA set permissible exposure limits for 428 different substances and didn’t really explain why bc said they didn’t have the resources, and court said well the OSH Act says substantial evidence not just arb/cap. And then in Troy Corp v Browner DC Cir 1997, EPA added 286 chemicals to a list of toxic chemicals that have to be reported to them if released, and this was not deemed arb/cap but court suggested it might have been struck down under sub/ev standard. Only 2 of them were deemed arb/cap, one because it was only based on only 2 old USSR studies and other evidence was undocumented.
JUDICIAL REVIEW OF NON-FACT-FINDING AGENCY ACTIONS, WHEN TO DEFER TO AGENCY INTERPRETATIONS OF THEIR STATUTES/QUESTIONS OF LAW?
o DIFFERENTIAL REVIEW: Courts use various factors to decide when to defer, sliding scale. Pros = subtle and complex, allows case by case analysis. Cons = gives judges a lot of discretion, cumbersome, unpredictable.
o NLRB v Hearst Publications, 1944 (pre-APA) : There was a dispute over whether newsboys were “employees” within the meaning of the NLR Act, NLRB said they ARE. 4 questions:
1 = Should NLRB use common law definition of employee? No, because that would be contrary to the purposes of the Act, which was uniformity.
2 = What are the criteria for deciding what an employee is?
3 = Are newsboys employees?
4 = What are the raw facts involved?
Court gives a certain answer to questions 1 and 2, but then defers to the agency on questions 3 and 4, because this is a specific application of a statutory term to the facts at hand, because:
o Comparative expertise
o Congressional intent (this is what’s delegated)
o Comparative size of the question, 3 and 4 relate to the specific case at hand, whereas 1 and 2 are more loftier and only have to be decided once.
o Comparative procedural adequacy (agency was the one who saw the witnesses, etc.)
o Skidmore v Swift 1944: Deference is a spectrum, not an on/off switch. Question of whether waiting time can be working time. The administrator of the Fair Labor Standards Act issued a bulletin saying waiting time WAS working time. Court says that you should defer to the agency’s decisions based on:
· Thoroughness of the agency’s consideration
· Validity of its reasoning
· Consistency with earlier and later pronouncements
· Persuasive power
§ NO PRESUMPTION OF DEREGULATION, REVOCATIONS OF RULES ARE JUDGED BY ARB/CAP STANDARD: Motor Vehicle Manufacturers Assn v State Farm Auto Ins, 1983: Review of an agency’s decision to rescind a rule that there had to be EITHER airbags OR nonpassive seatbelts, leaving only a rule that there has to be seatbelts. Court uses arbitrary and capricious standard of review, but agency wants them to judge their revocation of the rule by the standard used to review the LACK of a rule, not arb/cap. So wants them to use a presumption of deregulation. But court says no, there is no natural baseline, the agency’s decision is based on the existing standard. There wasn’t enough explanation, though, political explanation would have been OK too, just has to be rational. Arb/cap applies to rescission as well as as rule promulgations. Defines arb/cap as:
· Agency has relied on factors congress didn’t intend for them to consider
· If failed to consider an important aspect of the problem
· Offered an explanation that ran counter to the evidence before the agency
· It’s so implausible that it cannot be just a question of a difference in view or agency expertise.
o MOVE TO A RULE, NOT A STANDARD, FOR DEFERENCE: CHEVRON
§ Chevron v NRDC 1984: You might reach the same result using the Hearst factors, but, instead of looking to legislative intent / expertise needed / size of the question etc, you do a textual analysis. Congress delegated this gapfilling function to the agencies. On/off switch. 2 step test:
· Is the statute ambiguous? Whether “congress has directly spoken to the precise question.”
· Is the agency’s answer “based on a permissible construction of the statute” reached using “traditional tools of statutory construction” (p 1028). (Includes legislative intent.)
§ Pros: simpler (so lower court costs), keeps judges out of policymaking
§ Cons: maybe congress didn’t really delegate this to the agencies (APA section 706 seems to give more power than this to the reviewing court), maybe this allows for too much political flipflopping (defining abortion as a type of family planning, etc)
§ Changes emphasis from purpose of statute to whether congress has spoken on a particular issue.
§ Stare decisis is divided into stage 1 precedent and state 2 precedent. It’s binding if the court decides that at step 1 the statute is unambiguous. But step 2 precedent is limited to the precise interpretation, and each new one has to be evaluated about whether it is permissible or not.
§ Puts more emphasis on explanation (reasonable construction) than whether it’s the BEST reading of the statute.
§ The 2 steps will theoretically prevent agencies from deciding matters of law (because those are where congress has spoken) but will allow them to make policy (bc that’s the gap congress wanted them to fill.
§ CHEVRON STEP ZERO: INTERPRETATIVE RULES ONLY GET SKIDMORE DEFERENCE: US v Mead Corporation 2001: Chevron only applies when Congress delegated the ability to an agency to act with the force of law, and the thing that the agency seeks deference on has the force of law. Here, the agency’s classification letter that planners are “diaries” for tariff purposes doesn’t have force of law bc only apply to one party. Skidmore deference does apply, though, because lots of agency expertise needed, and because it’s very persuasively explained. The rationale for Chevron was that congress implied the delegation of gapfilling to the agency, but for things that don’t have the force of law, the lack of a formal process means that the court shouldn’t give it deference. The fact that it’s a routine decision done 10K times per year could go either way as to deference, could be that makes it too much of a burden on the courts to review so we want deference, or, it could be that you don’t want that many decision to be made arbitrarily and so we want no deference. Says most things that have gotten Chevron deference have been notice and comment rulemaking and formal adjudications.
o STEP ONE PRECEDENT:
§ TEXTUAL ANALYSIS: MCI Telecommunications Corp v AT&T, 1994: Scalia says that there is NO ambiguity in a statute, uses textual argument, dictionary definition, and exclusio unius. We use many of the same tools in statutory analysis in the first and second steps, just that the first step is to see if the statute is ambiguous, and second is to see if the agency’s interpretation is a reasonable construction. Definition of “modify” for tariff requirements holds it to be a small modification.
§ ALL TOOLS OF STAT CONSTRUCTION CAN BE USED: Zuni Public Schools v Dept of Ed 2007: Justice Breyer says that whether there’s ambiguity depends on which tool of statutory construction you use, and you shouldn’t be limited to textual analysis.
§ FDA v Brown and Williamson Tobacco Corp 2000: The FDA is not permitted to regulate tobacco, because even though there is technically a gap in the statute, congress cant have intended to leave this gap for the agency to fill, which is the grounds for Chevron deference, and they have already created a regulatory scheme for tobacco. Cites MCI for a purposive argument that congress did not mean to delegate whether an industry will be rate regulated to industry discretion, doesn’t rest on Scalia’s textual analysis.
o STEP TWO PRECEDENT:
§ Bellum v PCE Constructors, 5th Cir 2005: An interpretative ruling issued by the Secr of Labor said that the FMLA exception for worksites more than 75 miles away means by surface roads, not as the crow flies, is a permissible construction of the statute, which was ambiguous as to this point. It’s true that in another case, the FRCP 4k1b about bulge jurisdiction is 100 miles, the court interpreted it as the crow flies, but it doesn’t have to be BEST interpretation, just permissible, so this is OK bc:
· Avoids absurd results
· Secretary of labor has experienced with practical issues involved in the FMLA
· Consistent with intent of congress
o When the issue is whether an agency’s interpretation of its own regulation is permissible, a lot of deference is given, see Thomas Jefferson Univ v. Shalala, 1994, where a LOT of deference was given, esp because the regulation involved scientific know how, also in Udall v Tallman 1965.
o How to tell if you use arb/cap review or Chevron review? P 1038. In Arent v Shalala DC Cir 1995, they say use
§ Chevron if it’s an issue of whether an agency has authority to act under a statute, has the agency stays within the constitutionally delegated boundaries of authority.
§ APA 706 review assumes that they had the authority, and asks whether or not the authority was reasonable, so uses arb/cap review, which is State Farm review.
§ In this case it was about FDA making rules under the Nutrition Labeling and Education Act of 1990, they clearly had the power to make these rules, congress did delegate that power to them, and they pass arb/cap review because:
· The FDA took into account all relevant factors
· The FDA made a good explanation
· There’s no clear error of judgment
§ But there’s a concurrence that says this is step 2 Chevron analysis, bc arb/cap review focuses more on the procedure/decision making process, not the substance. Says that an agency’s decision could fail Chevron because it’s inconsistent with the statutory mandate, but is not an arbitrary policy choice so does not fail State Farm arb/cap. And an agency’s decision could fail State Farm arb/cap because it hasn’t articulated a rationale or considered all relevant factors, but pass Chevron because it could be in line with statute.
§ A professor argues that step 2 analysis IS arb/cap review
RETREATING FROM CHEVRON
o Ragsdale v Wolverine World Wide 2002: Seems as though the courts skip step 1, as the statute is unambiguous, but they instead assess whether the agency regulation is contrary to the purpose of the statute as a whole, balancing the social interest. Someone who already got 30 wks of leave wants more leave bc wasn’t given notice according to the FMLA. Here the purpose of the statute was unambiguous, and to say that the company had to give her more leave was contrary to the intent of the statute which was a hard won compromise so should be followed to the letter, so the penalty scheme is not permissible. Instinctive rxn to the facts of the case. Not much expertise at issue, and the Act lets disputes be brought into court, no agency adjudications.
§ In TVA v Hill, the court let something kind of unreasonable happen because it was in accordance with congressional intent, here they will prevent something unreasonable from happening because that’s in accordance with congressional intent. In both cases they interpreted the statutes to prevent unreasonableness happening.
o MA v EPA 2007: Court says that the EPA is shirking their responsibilities by not regulating greenhouse gases, claims that the Clean Air Act forecloses the EPA’s argument that they don’t have the power to regulate them, says it’s unambiguous that it DOES. And finds their arguments that congress doesn’t want them to regulate them bc it would be a piecemeal approach, already covered by other agencies etc, isn’t convincing, and they also haven’t submitted scientific data that says that the link bw global warming and greenhouse gases is unclear. It again comes down to whether their explanation for not taking action was sufficient, but also pretty clear policy choice here over sticking to Chevron.
List out materials given.
Start with procedure, then move to substance.
Is the statute a constitutionally permissible delegation of power?
For rules, did it go through notice and comment, if it’s legislative? Or, is it interpretative? Run through the differences.
If it’s an adjudication (which if it’s forward looking, it probably isn’t), look to the statute to see if 556/7 is needed, maybe this is where you’d apply some statutory interpretation.
If not 556/557 required, then was 555 followed and was DP ok (remember that only applies if someone’s life liberty or property is being taken away, not if they’re trying to get something new)
Use tools of statutory construction to defend/attack the agency’s interpretation of their statute.
On the side of the agency, you’d say what their interpretation of it is and why.
Then you’d try to say that congress’ intent is actually the opposite, or that it’s arb/cap.
Then you’d have to address deference. First say what the agency is interpreting that they seek deference for. For Mead, see first if the agency has the power to make things that have the force of law, and whether they are using it in this case. If no notice and comment and no formal adjudication, chances are they are not using it in this case, but you’d look at whether congress intended to delegate this gapfilling to the agency, and that depends on how much agency expertise is at hand. But, if it was one of those things, then passes Mead step zero. So then, you look to see whether the statute was ambiguous (chevron step 1). If so, then agency’s interp gets deference (chevron step 2) as long as it’s a permissible construction. If no ambiguity, has to follow congress’ intent.
For intent of congress, if something was a hardwon compromise, don’t read more into it than is on the face of it, bc it was carefully designed. Use textual analysis.
Substantial evidence based on whole record
How those are basically the same
Agency expertise v. generalist judges
Is Chevron right in assuming that any ambiguity is a failure to legislate and a purposeful delegation?
Should policy come into play?
State Farm: no, they have to follow the intent of congress in the statute, problem = what IS the intent of congress? TVA v Hill they were wrong…
Tankers: have to stick to statute in brief statement of purposes
Mashaw article: it’s a legal fiction to pretend that there’s no administrative policymaking, that they’re just carrying out statutory instructions.
The president does have an impact over the policy of agencies through OMB, and appointment power