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Administrative Law

I) Overview: Administrative Agency Functions and Relationships (see class notes)

II) The Constitutional Status of the Fourth Branch
Article I constraints on agency lawmaking (Nondelegation Doctrine)
Article I says that All legislative powers herein granted shall be vested in
a Congress of the United States. . .
Necessary and Proper allows Congress to make all laws which shall be
necessary and proper for carrying into execution the foregoing powers
Art. I makes it sound as though ANY delegation of legislative
power is unconstitutional. However, the N&P clause has been
interpreted to authorize a limited amount of delegation. Agency
action is binding as law.
So there are separation of powers issues in granting lawmaking
authority to agencies.
Though there is some judicial restraint, the Supreme Court has
rarely held anything unconstitutional under nondelegation doctrine.

Why delegate?
Expertise and Experience Congress doesnt have the technical
and specialized knowledge to make decisions about everything.
Time Congress is busy and doesnt have the time to come up
with all the regulations need to keep us going.
Political Credit Congress can take the credit for solving a
problem if it sets up an agency and leaves the work to them.
Ease in lawmaking/Political Insulation Avoid deadlock in
Congress by allowing an agency to deal with some decisionmaking. Is it good to circumvent political process in this way?


What does it mean for an agency to exercise legislative power?

Makes some standards and conditions within the context of the
authorizing statute. Congress must have laid out an intelligible
principle to guide agency action in exercise of legislative-like
authority (no statute struck down using this rule since 1935, and
only 2 cases in 1935).
Makes micro-level discretionary decisions (like in the case of a
prison administrator).


A.L.A. Schechter Poultry Corp. v. United States (Pg. 42) (1935)

The National Industrial Recovery Act (NIRA) sought to remove
obstructions to the free flow of interstate and foreign commerce,
and, to achieve this goal, allowed the president to set up agencies
to which he could delegate his authority under the Act. It also
allowed him to approve codes written by private trade associations,
after which they would become binding standards.



The NIRA was held to be unconstitutional delegation. The NIRA

didnt define what fair competition was, nor did it provide any
standards for what the president, and the agencies to which he
delegated power, could do. Even if the president or his agencies
explained what they were doing, there were no standards by which
to judge whether the explanation was reasonable.
The Court was also very concerned with allowing private groups to
draft codes. There were no procedures in place for doing this or
for reviewing the process.
The Court wanted to ensure that Congress was still making the big
policy decisions, as that is its job. Worried about accountability,
rationality, restrained delegation.
Last case where ct invalidated legislation on grounds of too broad
delegation of power.


Amalgamated Meat Cutters v. Connally (Pg. 44) (1971)

Congress is worried about inflation and wants the executive to take
care of it. The President turns around and creates an agency, the
Cost of Living Council, to establishes prices for things.
This is held to be a constitutional delegation, because the agency is
given enough guidance (an intelligible principle) by which its
action may be reviewed.
The language of the statute seems very broad. The Court mentions
the avoiding-constitutional-problems canon, and reads in an
implied broad equitable standard to kind of save the statute. The
Court also reads may to imply an obligation, which seems weird.
The Court also seems to think that since this is all temporary, that
also somehow makes it ok (time limit).
The idea is that the agency is going to come up with some
procedures and then stick to them (self-regulation, measurable
criteria). The Court is willing to deal with this, so long as there is
at least minimal accountability.


The Benzene Case (Pg. 53) (1980)

The Occupational Safety and Health Act created the Occupation
Safety and Health Administration. The Act delegated authority to
OSHA to do whatever was reasonably necessary or appropriate to
protect workers ( 3.8). OSHA was to ensure to the extent
feasible ( 6(b)(5)) that workers wouldnt get diseases from
exposure to toxic substances. (Financially/tech/admin feasible?)
OSHA decided that there was no safe level of benzene, and so
promulgated a regulation requiring the lowest technologically
feasible level. It gave no consideration to the cost, but the cost
was super expensive.




The industry challenged both the authorizing statute for

unconstitutional delegation of legislative power and the agency
rule as an unreasonable exercise of power under that statute.
The Court reads the statute aggressively in order to find an
intelligible principle, stating that OSHA should have made
finding of a significant risk before promulgating this regulation.
It seems like a cant stomach the result thing: Congress couldnt
have envisioned the complete elimination of all carcinogens (like
FDA v. Brown & Williamson Congress would have said if theyd
wanted FDA to regulate tobacco); they must have wanted to deal
with significant risks. The statute is upheld.
Note that before this case, there was no way that OSHA would
have known that. But even so, OSHA is sent back to the drawing
The plurality is concerned with cost, though they do not say so.
They do not, however, send this back to Congress so that they can
make policy determinations about acceptable costs. Concerned
with sweeping delegation of power to agency (to impose high costs
on industry) if read the way the agency read it.
Rehnquists concurrence: thinks the statute is too vague and does
not give a brightline to the agency; thinks Congress should be
making these decisions.
Marshalls dissent: thinks Congress has made a policy
determination on the issue of cost they dont care about cost, they
are only worried about protecting workers.
This is inconsistent with Schechter the Court isnt actually
ensuring that Congress decides anything; instead, ct is reading stuff
into the statute to save it, kind of taking the power into its own


Deals with the same statute as Benzene, but only 3.8
reasonability is at issue, not 6(b)(5) feasibility.
OSHA decided that to protect workers from dangerous machinery,
employees should be locked out from them, unless the employer
could show that a tag out would be as effective.
Here again, the Court does not strike down the statute, but this time
the Court tells the agency to go come up with its own intelligible
principle instead of either sending it back to Congress or
aggressively reading one into the statute itself.
OSHA doesnt actually change its rule, it just gives more reasons
for its rule, and the court buys it.


Whitman v. American Trucking

EPA sets national ambient air quality standards under the Clean Air
Act; sets lower standard that will cost businesses a lot of $$






Question for court: whether statute itself is impermissible

delegation of authority to an admin agency (statute technically
gives EPA the latitude to regulate down to zero very broad)
DC Circuit Court asks the EPA to fix the problem, rather than
striking the statute (Schecter Poultry) or fixing it themselves with
strict statutory construction (Benzene, Amalgamated Meat) asks
agency to fix by coming up w dividing line (which would provide
cts with constraint and would be more reviewable)
Problematic for courts or Congress to choose dividing line bc lack
of expertise want to defer to agency
SC answers question of whether agency can consider cost under
the statute (no (Breyers dissent argues agency should consider
cost this is policy argument); says no need for determinate
standard (SC will rarely second-guess legs delegation of power to
Does NDD have any bite after this decision? No lower courts have
used to invalidate; but, not dead though Congress rarely secondguessed, the threat of inval is still out there.
Terminology debate: NDD is a bar to delegating leg power
(majority); EPAs function is at least quasi-leg but suff limited bc
Congress is guiding (Stevens and Souter); leg=bicameral and
presentment (INS v Chadha)
Applying Whitman: Look for broadness of delegation, whether
intelligible principle (but not clear if really need one), space and
time restrictions, whether rewriting laws, whether could be
construed narrowly, agencys choice to self-regulate, whether
judicially reviewable standards, issues of political accountability

Article III constraints on agency adjudication

Article III states the judicial power of the US shall be vested in one SC
and in such inferior cts as Congress shall from time to time establish. To what
extent can agencies do things that look like what cts do? (i.e., veteran benefits
decisions, FTC issuing cease and desist orders for violations of unfair comp)
Primary concerns of Art. III
(a) Protect individual rights
(b) Maintain independence of the judicial branch. Dont want too
much power in the hands of one branch.
Why delegate?
(a) Save the courts some work; save money (it is cheaper to hire
ALJs); more expedited processing (overloaded cts).
(b) Uniformity it is important to have agency policies
implemented consistently across the board, which wouldnt
happen if all claim were adjudicated in court.
(c) Expertise Judges have expertise in things like procedure and
whether something was arbitrary. Conversely, ALJs develop



expertise regarding agency policy, since it is what they do all

the time.
(d) Issues are less important (workmans comp), not legally
complex, and do not involve traditional rights.
(e) Uniformity of decisions.
(f) Issues where judiciary might be hostile (i.e., unions).
Why not delegate?
(a) Literal reading of the text of Art. III seems to require judicial
(b) Judges have expertise in adjudicating stuff, especially dealing
w individual rights, and courts have more process (worried
about arbitrary conduct of agencies).
(c) Balance of power. Maybe it is a bad idea to allow an agency to
decide its own conduct is ok self-review might not work and
we want accountability.
(d) Protect judicial decision-making from political influence.
Judges are not elected and have life tenure and are therefore
seen as more immune from political pressure.
So what are the limits on delegation of adjudicatory power?

Crowell v. Benson (Supp 1.G) (1932)

HUGE case. Benson, an employer, challenges an award against
him in favor of Knudsen under the Longshoremens Act (suit in
admiralty involving a private right) on a couple different grounds.
For our purposes, 2 are important:
Due Process Whether Bensons due process right violated bc
decision made by a deputy commissioner, not an Art. III court.
(a) The Court holds that there is no due process problem.
(b) The right to due process does not require that Art III courts do
every step of the process. So long as a court gets review of the
decision, in order to ensure it wasnt arbitrary or abusive, due
process rights are protected. Here: advance notice, hearing,
decision on the record, but not trad rules of evidence ok.
Article III Whether under Art. III, Congress can substitute an
agency for an Art. III court.
(a) The Court holds that Congress can delegate judicial authority
to agencies, but that Congress cannot take matters away from
the federal courts that are given to them by the Constitution.
Public Rights v. Private Rights
(a) Public rights are those created by statute. They are between the
government and the citizens. These can be adjudicated by an
agency no questions asked (Murrays Lessee case) (i.e. tax
liability, benefits the govt gives out, except constitutional
claims). An agency may set up legislative courts using Art. I
power to adjudicate these rights idea that right is created so
can be conditioned. Also a sovereign immunity concern the



state gets to waive immunity if it wants. This can be

problematic b/c nowadays much of our wealth comes from
government entitlements.
(b) Private rights are those that exist between private parties. Idea
that these are fundamental rts (such as private prop) so require
more process (due process), and that fund rts are core jx of cts
(but these are state laws tough distinction to draw).
(c) It also plays into the Art. III analysis because Art III courts hear
the traditional common law claims, which are all private rights
stuff (torts & contracts).
(d) In Crowell, the right is characterized as a private right,
although the right is created by statute. The Court holds the
delegation of power to be proper by saying that the deputy
commissioners opinion is only advisory and that the Court can
review Constitutional questions.
Factual determinations are less susceptible to judicial review than
legal determinations.
(a) De novo review on the law. It is, after all, the job of the
courts to say What the law is.
(b) Substantial review on evidence/facts. For abuse of
discretion/contrary to weight of evidence.
(c) De novo review on jurisdictional/fundamental facts.
Statutory/constitutional facts (i.e. libel of public figures,
obscenity, admissions of voluntary confessions, etc.) idea that
if fact wrong, agency might not have jx at all.
(d) Deputy Commissioner was set up as a fact finder, and his fact
determinations were only to see if the agency policy was
(e) This is inefficient, can allow new evidence to be brought at
trial. But the court doesnt like strict liability and is concerned
with protecting fundamental rights from agencies. Accuracy
and process concerns.
(f) Brandeiss dissent: no real difference btw reg and fund/jx facts
all still affect the decision. Now: citizenship claims and
constitutional facts get de novo review.
Crowell was seen to legitimize lots of cases in which Congress
delegates adjudicative power.

Northern Pipeline v. Marathon Pipeline (Pg. 129)

Issue was whether Congress could delegate power to bankruptcy
courts (non-Art. III courts) to adjudicate state law claims.
(a) The idea of bankruptcy is for all claims to be brought in one
court room. But can these non-Art. III judges then adjudicate
state claims arising from or related to the bankruptcy




(b) Appellate review was available de novo on law, clearly

erroneous on the facts.
Plurality of the court said no.
(a) Back to the public v. private right distinction. This case breaks
private rights into two groups those created by statute and
those existing at common law.
(i) If Congress-created public ok
(ii) If Congress-created private ok (Crowell plus additional
If common law/state private not ok
(b) Only the adjudication of rights created by statute can be
delegated by Congress to non-Art. III decision makers.
Why was Crowell ok and this not ok?
(a) In Crowell, agency judge couldnt enforce own decision. Here,
bankruptcy judges decision was enforced by the bankruptcy
(b) In Crowell, the deputy commissioner made very narrow fact
determinations. Here, the bankruptcy judges would have heard
all sorts of different claims and only clear error review on
(c) Statutorily created rights v. non-statutorily created rights core
common law rights are most protected.
After this case, Crowell was good law seen as setting up the
minimum requirements to pass Art. III.

Thomas v. Union Carbide (Pg. 133)

Congress told EPA to adjudicate controversies between pesticide
makers regarding how much one had to pay the other for
information. Supreme Court says this is ok private right, but
created by congressional statute, integrated into broad reg scheme.
This kind of looks like a private right being treated as though it is a
public right. But read Northern Pipeline as shifting the line from
public v. private to statutorily created v. existing at common law.
Here, the right of pesticide makers to compensation for the use of
info was created by statute. There was no common law analogy
like there was in Crowell (statutory workmans comp has common
law antecedent in common law negligence). Therefore, Congress
can delegate adjudications under the statute to an agency. Still
preserving core area for Art III to decide.
Extension: say fed stat malpractice claims taken out of fed ct and
instead go to Tort Reform Board (limited judicial review do novo
on law, facts undisturbed) seems like private rt disturbed by
statute (like Crowell) so need some judicial supervision and no
factual review is problematic; worry about Congressional
motivation; whether agency enforces own decisions (Northern
Pipeline); courts losing core common law claim.



Commodity Futures Trading Commission v. Schor (Pg. 130)

Congress set up a proceeding before the CFTC in which
disgruntled customers could bring claims against brokers (efficient,
common facts, consistency). Customers did not have to use the
proceeding, but could choose to take their claims to fed ct instead.
In this case, Schor consented to have the claim heard by the CFTC,
but when he lost, he claimed that it was unconstitutional for the
agency to adjudicate the claim. The issue was not the agencys
ability to hear the initial claim, but the counterclaim, which the
authorizing statute said could also be adjudicated in the
proceeding. The counterclaim was a state law issue.
Ok no absolute rt to judicial consid of all; Crowell-style review
(de novo on law, subst on facts) is sufficient. OConnor sets up
several factors to be considered (no absolute rules):
(a) Private rights. Here, P waived his private right to be heard by
an Art. III judge.
(b) Structural concerns. Maintaining the independence of the
judiciary. No threat to sep of powers here (key).
(c) Congressional concerns/purpose. Why does Congress want to
delegate? Crowell and Northern Pipeline dont really go into
(d) Basically a balancing test: if public (or private but integral to
stat scheme) ok w limited judicial review; if private
consider individual protections (waiver, due process) and
structural concerns (ind judiciary)
Dissent: Congress cant take common law suits out of cts
worried about wearing away of judicial independence in favor of
efficiency; doesnt think waiver and structural ind dist. is enough

What Agencies Do and the Administrative Procedure Act


Rulemaking and adjudication constitutional constraints

Rulemaking and adjudication are both ways of accomplishing the goals of
the authorizing statute. They involve both legal constraints and policy concerns.
Pre-1970s had mostly adjudication; now increased rulemaking
What are the considerations in choosing between rulemaking and
Time and resources (adjudication is often more costly and timeconsuming, but rulemaking can be expensive too).
In adjudication, the agency is limited by the cases that arise; rules
are easier for shaping policy if case hasnt come up yet.
Clarity for those implementing the rule? A rule may be more
specific and easier to enforce, while adjudication may grant more
discretion and flexibility.





Rules give better notice to the regulated entity clarity, publicity,

easier to monitor, fairness helps with agency legitimacy.
What are the legal limits on rulemaking and adjudication?
Must stay within the authorizing statute (Clean Air Act for EPA)
Constitutional requirements/Article III constraints (hearing
requirements, due process requirements for adjudication see
Londoner and Bi-Metallic).
Administrative Procedure Act procedural constraints
Federal Common Law (?)
Londoner v. Denver (Pg. 480)
This case involves paving a street. The owner of the lot on the
corner challenged the tax increase that the board & City Council
passed to pay for paving the street. The cost was apportioned by
frontage, so the corner lot owner got screwed.
Before approving the tax increase, the council had to provide an
opportunity to file written objections. P did so, but the council
approved the plan anyway.
The Court finds that this isnt good enough there has to be
opportunity for an oral hearing before the tax increase. The
authorization of the paving project was okay though, because no
one had to pay for it (no due process concern).
Bi-Metallic Investment Co. v. State Board of Equalization (Pg. 481)
Here, the State Board of Equalization and Colorado Tax
Commission increased the valuation of property in Denver by 40%
to correct for the undervaluation. This resulted in a 40% tax
increase. The property owners challenged the valuation increase,
claiming a taking in violation of their due process rights.
The Court found that there was no due process violation. The
change in valuation affected all the owners equally, and it is
impractical to give each the opportunity for a hearing.
Why do Londoner and Bi-Metallic come out differently?
Usefulness types of issues. There was no personal fact at issue
in Bi-Metallic. In Londoner, there were specific facts to be heard
and considered. Maybe this means that a hearing would be more
useful in that case, whereas legislative process is better in BiMetallic because lots of people are affected (worry less about ind
issues, inaccurate factual determinations).
Political Process classes vs. enumerated individuals. If a
decision is gen applicable, it is likely that the people will be pissed
and vote the bums out. If a decision is applicable only to an
individual, no recourse through political process, especially if
others are benefiting from the decision.
Efficiency. Is it practical to have hearings? The court in BiMetallic thinks not. But does this really matter when were
considering due process?


Examples: if statute (no), if rec (no), if gen rent control (prob not
unless sm # of units affected), if one landlord (yes).
Why was an oral hearing required in Londoner (as opposed to written
Provides an opportunity to address arguments from the other side.
Greater publicity/accountability/transparency.
Ensures that agency is actually paying attention to the arguments.
Generally, just more effective and ppl feel heard (dignitary issue).
How can we distinguish quasi-adjudicative from quasi-legislative?
Generality and number of people involved.
Type of issue to be resolved how useful hearing would be.
Prospectivity new rules for the future. Whether primarily
forward-looking (adj seems more backward looking; rules look
forward and need hearing to apply rule to facts, though can have
retroactive rule see APA requirements).
But there are cases in which the decision looks adjudicative, but is
done by a legislative body; if its a leg body, no hearing required bc
we can control through political process.
Rulemaking and adjudication Administrative Procedure Act and judicial
common law constraints
Authorization for agencies to act and intro to the APAs forms of agency
action rulemaking and adjudication
The APA is NOT a grant of authority it only constrains agency
action with procedural requirements.


556-557, 553(c); on
the record after hearing
like a trial
553; notice + comment

554, 556-57; on the
record after a hearing
None; catch-all no req at
all, just whatever is left

551 Definitions
(a) Rule: gen/part applicability and future effect
implement/interpret/prescribe law and policy. Same
effectiveness as if passed by Congress binding on agency and
(b) Rule-making: formulating, amending, repealing rule
Informal rulemaking (Notice and Comment). Governed by
(a) Notice of proposed rule NPRM (Published in Fed Register)
with authority and reasons for proposal.
(b) Public comment,
(c) Effective date (usually 30 days),
(d) Notice of final rule, published in Code of Federal Regulations







(e) Concise statement of the basis and purpose, response to sig.

issues in comments
(f) Judicial review.
Formal Adjudication. Governed by 554, 556-57.
(a) Residual comprised of anything that is NOT rulemaking.
Orders under APA includes licensing.
(b) Generally only used when required by authorizing statute.
(c) Trial-type hearing looks like civil trial limited discovery
arranged by agency officer, oral hearing, witnesses, right to
cross-examine, decision on the record
(d) Hearing officer must be isolated no ex parte contacts.
(e) Hearing officer cannot be the same person who investigates
and cant answer to anyone w prosecuting/investigative role.
(f) Judicial review under 706 decision cannot be arbitrary and
capricious and must be supported by substantial evidence
Formal Rulemaking. Governed by 556-57.
(a) Doesnt happen a lot anymore it is too cumbersome.
(b) FDA peanut butter case is a good example (took 10 yrs). Also,
the DDT rulemaking, which took 7 months and resulted in a
90,000 page record.
(c) These take forever and take up ALL the agencys time for the
duration of the proceeding.
(d) Judicial review under 706.
Informal Adjudication.
(a) Also residual in the way that formal adjudication is any order
that is not issued through formal adjudication.
(b) NO procedure in place for this (though might be procedures
built into statutes) not on the record after a hearing a
(c) There is still judicial review under 706 arb&cap or contrary
to law.
Restrictions: does agency have authority to issue rules? Agencies
have no intrinsic power so must find source need explicit
delegation in statute to issue rule (could say whenever President
finds in law and then Pres can delegate to whatever agency w
National Petroleum Refiners Association v. FTC (Pg. 495)
(a) The FTC promulgated a rule requiring gas stations to post
octane ratings at the pump. Failure to do so was unfair
competition. The refiners challenged, claiming that the FTC
was not authorized under the enabling statute to promulgate
substantive rules of business conduct.
(b) Added to the mix is the fact that the FTC had previously denied
having any rulemaking power over this.


(c) The Court holds that the FTC does have the authority to engage
in rulemaking. The Court mostly considers policy/practical
concerns, looking to overall intent of statute:
Rulemaking gives agencies more flexibility; court
knows formal adjudication is cumbersome.
More notice to regulated entities.
Better check on the agency increased participation
among regulated entities.
(d) Perspectives on rulemaking v. adjudication
Gas station owner more review with adjudication
(argue facts etc.). But rulemaking would give notice, the
rest of the gas station owners would back her up, she
wouldnt be singled out, which is less arbitrary.
Gas station down the street This rule would be
binding on her if made by adjudication, but she might not
know the case ever happened. Assuming she does know,
she could file an amicus brief, but that is a lot of effort. In
rulemaking, she could make comments. Also, the rule
would be binding on the agency as well as her. In
adjudication, the agency could change its mind.
Agency Rulemaking is more efficient than
adjudicating individual cases, as it would take a long time
for a brightline rule to evolve. Comments lead to a wider
range of expert opinion from regulated entities. A rule can
be general, whereas an adjudication is more specific.
Rulemaking provides more notice, which leads to better
compliance, more confidence in the agency, and avoids
triggering Congressional oversight.
Consumer Rulemaking would give consumers a
chance to comment, while the only way to voice an opinion
is adjudication is an amicus brief; though, might worry
about industry influence on rulemaking.
Congress member Maybe the congress member
can take more credit if a brightline rule is issued through
rulemaking. Maybe rulemaking gets to the goal of the
authorizing statute more quickly/is more efficient/fair.
Congress can participate more in rulemaking (comments,
ex parte) than in adjudication (no ex parte comments
allowed, can only file amicus brief).
President Easier to make views known in
rulemaking bc cant contact hearing officer in adjudication.
Formal rulemaking and formal adjudication When are these triggered
under the APA?
U.S. v. Florida East Coast Railway (Pg. 514)




(a) The ICC decided to impose additional per diem charges on RR

companies that used boxcars owned by other RR companies for
(b) The Court says that the formal rulemaking requirements of
556-57 were not triggered by the authorizing statute. The
Court had previously held that after hearing in the
authorizing statute was not the equivalent of on the record
after opportunity for an agency hearing in the APA.
Interestingly, Congress did the ICC authorizing statute before
the APA so why would they have known about these magic
words? They wouldnt have, actually.
(c) This opinion turns on the record into magic words that must
be included in order to trigger the requirements of 556-57.
(d) Concerns: plain lang, Congressional intent, Congressional
inferences, policy arguments, agency functionality concerns
(e) Because this rulemaking was covered by 553, notice and
comment was sufficient.
The language in 553 regarding when formal procedures are
triggered in rulemaking is very similar to the language in 554
regarding when formal procedures are triggered in adjudication,
but it has been interpreted more broadly. Why?
(a) Maybe courts are less worried about efficiency when there are
fewer parties.
(b) Legislation triggers fewer due process concerns than
(c) Decision may be influenced by underlying statute.
(d) Formal adjudication is also on its way out it has lost
momentum as adjudications have increased.

Informal notice and comment rulemaking

Pre-APA judicial review

Pacific States Box & Basket Co. v. White (Tab F)

(a) The plaintiff, an out of state producer, wanted to sell round
berry baskets, but an administrative regulation made pursuant
to an Oregon statute said they had to be square (seemed
preferential to in-state suppliers). P said there was no
legitimate purpose for these regulations. This is a substantive
due process argument.
(b) The Court says the regulation is fine without making specific
findings; some set of facts might support. The attitude is
highly deferential Eh, Im sure they have a reason. The
Court says the burden is on the party challenging the regulation
to prove that there is no legitimate reason.



(c) This was the state of judicial review before the APA.
Regulations were treated like statutes for purposes of
Constitutional analysis, and statutes were treated with great
APA 706
(a) So this calls for review. . . of the whole record.
(b) But 553 doesnt require record making. So does 706
apply? Maybe it only applies where there is a record i.e.
when 556-57 are triggered.
(c) How could courts work within that to maintain some review
power over 553 proceedings?
Read authorizing statutes more aggressively so that
they trigger formal hearing procedures.
Strengthen direct review get more info out of the
Have weak direct review and the review the
application of the statute because applications would be
adjudications, which do have a record. (The APA doesnt
says whether you can do that or not.)

Review of a rule on application


FPC v. Texaco, Inc. (Pg. 521)

(a) The Federal Power Commission set up rules by notice and
comment saying contracts between gas producers and pipelines
could not include escalator clause. Some gas producers applied
for certification under the statute, which required a hearing to
decide if certification would be granted. However, because the
applications included escalator clauses, the applications were
rejected without a hearing.
(b) The gas producers challenged, saying this violated the statutes
provision for a hearing on the applications.
(c) The Court says this is ok neither the APA or the authorizing
statute preclude the agency from making rules through noticeand-comment, and then treating them as a threshold for
applications that get a hearing.
(d) The idea is that there is no question of fact. The application
included an escalator clause, the rule says no escalator clauses,
end of story. Hearing means meaningful hearing.
(e) Note what the agency is doing here circumventing judicial
review by characterizing this as a rule and not an adjudication.
(f) This is mostly about efficiency the Court is worried about
repeated litigation over the exact same question.
(g) What could Texaco do now? Apply for waiver, could have
participated directly in notice&comment, could seek





repeal/amendment of rule (553(e)), but cant get hearing on

substance of rule.
American Airlines v. Civil Aeronautics Board (p.523)
(a) Direct challenge to a rule that hasnt been applied yet
argument that rule modifies existing certificates to engage in
air transport and statute says hearing required before modifying
certificate (not by rule).
(b) Court says a hearing is not required in this case bc this issue is
appropriate for rulemaking general policy, not individual
action. The Court narrowly construes hearing requirements
only for individual factual issues, not for gen rulemakings.
(c) This goes further than Texaco: airlines probably have a
reasonable expectation that their certificates wont be changed
without opp for hearing (whereas Texaco was applying for a
permit for the first time), but court still says this is ok.
Air Line Pilots v. Quesada (Pg. 522, Tab G1)
(a) The FAA made a rule requiring that airline pilots retire at age
60. The pilots association sued on behalf of those who were
over 60.
(b) This rule limits the use of the pilots licenses. The statute says
that there must be a hearing before a pilots license is modified.
So are the pilots entitled to individual adjudicative hearings?
(c) The Court says no. This was clearly rulemaking under the
APA. It doesnt require a hearing, even if individual rights are
affected. Lg group affected, prospective, willing to deter to
agencys factual conclusions about safety; ct reads stat lang
Heckler v. Campbell (Pg. 523)
(a) Carmen Campbell was a hotel maid with limited English skills
and a back injury. The SSA had a grid to tell what jobs a
person could do. She challenged this grid method, arguing that
the Social Security Act entitled her to a trial-type hearing in
front of an ALJ.
(b) TO CLARIFY: The Social Security Act says trial-type
adjudicatory hearing. The SSA applies this grid, which is a
rule promulgated by the HHS. Thus, the agency has
circumvented judicial review by turning this into rulemaking,
despite the clear statutory language.
(c) The Court said the grid method was fine. The availability of
jobs in the national market doesnt vary by individual, so this is
appropriate for rulemaking (general). Ok for agency to narrow
issues for further adjudication. Also, there is room under the
statue for Ms. Campbell to argue that she has special
(d) Overall: efficiency and appropriateness for rulemaking
balanced against stat req. for ind. hearing; former winning.



(e) Ct doesnt really examine the substance of the rule here, but
sometimes it does to see if rule is procedurally invalid (i.e.
failure to give notice and comment) (Nova Scotia, Vermont
Yankee) or completely unauthorized. Instead of looking very
closely at the substance of rules, courts aggressively
interpret informal rulemaking requirements (souped up
process) make agency think, improves quality of agency
decision, consider more viewpoints, more for cts to review.
(f) Is she out of options? Nah
She could challenge the Constitutionality (due
process), say arb+cap in court. Or try to get statute
changed/repealed in Congress.
Argue that she was misclassified.
Petition the agency for a change in the rule (grid).
What happens to judicial review when agencies do this?
(a) The judges have lost a tool in reviewing agency action.
(b) They could just try to review based on the minimal record.
(c) But! They dont do that

Judicial common law of informal rulemaking


United States v. Nova Scotia Food Products Corp. (Pg 529)

(a) Smoked whitefish case. The FDA decided that all fish had to
be heated to a certain temperature to prevent botulism.
(Botulism is extremely rare in whitefish, however.) Nova
Scotia challenged on substantive and procedural ground.
(b) There was no record for review here, but discovery took place
in the litigation. Turns out that the agency didnt provide the
data it relied on, and didnt really pay attention to the
comments saying that botulism doesnt occur in whitefish and
claiming the required heat level would make whitefish
inedible; didnt pay attn to commercial feasibility.
(c) The court probably could have struck down this regulation as
arbitrary and capricious. But they strike it down based on the
procedures instead.
(d) The court reads 553 creatively, focusing on the opportunity
for comment language.
The opportunity for comment must be meaningful.
The agency must disclose all meaningful/relevant data.
The agency must respond to comments (this has
evolved into only having to respond to significant
comments) though this isnt in the APA either.
The court is trying to keep with the purpose and
spirit of the APA.


(e) So this is a big shift from Pacific Box; after this case, the court
looks to the rulemaking record see if there is support for the
regulation. Is this good?
Slows down the rulemaking process. This is often
good, but what if there is an emergency?
Increases costs.
Hopefully it results in more accurate information
and better regulations.
Transparency leads to more trust in the agency.
Judges are experts on procedure, but not on
substance, so maybe this is a good set up.
(f) Nova Scotia is the current state of the law. Cts didnt end up
going the way of Pacific Box.

Weyerhauser Co. v. Costle

(a) If an agency changes the proposed rule in response to a
comment, they dont have to start over and do a new round of
comments if the change is a logical outgrowth of the
proposed rule. It can just move on to the final rule. Made-up
rule by judges (not in APA) (along with right for meaningful
comment and duty to disclose relevant policy data).
(b) Good luck defining logical outgrowth.


Vermont Yankee Nuclear Power Corp. v. Natural Resources

Defense Council (Pg. 540)
(a) The Atomic Energy Commission made some rules about where
to store toxic waste, generally. They did notice and comment
when considering rules for the generic average nuclear
power plant. But when they did individual considerations for
specific plants, no further inquiry was made. The EPA
challenged both the granting of a license and part of the rule
itself, which had been based on information from a Dr.
Pittman, who the EPA was not allowed to cross-examine.
(b) The Court remanded this case with instruction for the Court of
Appeals to consider only whether the agency complied with
APA. The Court stated that the court should make sure that the
agency has followed the appropriate procedure and defer to the
agencys substantive judgment if it has. The Court said it had
no reason to substitute its own judgment for the agencys just
because they disagreed with the result they would only set
aside an agency decision if it didnt square with the authorizing
(c) This sets up 553 as the maximum procedure that courts can
require. Congress could have required formal rulemaking
when they wrote the statute, and the court doesnt have the
authority to require it. This case stops the trend started in Nova




Scotia of increasing procedural requirements by the courts

cant just think up procedures as a judge and require more than
APA requires. But Nova Scotia is still good law more review
than required in APA if exceptional circumstances.
(d) There is also the idea that agencies are best qualified to design
the procedures for its decision-making. But procedure is
what courts do best so should we let them do it here?
Are we concerned about allowing agencies to create their own
(a) Without judicial review, there is no check on agency power.
(b) It is conceivable that the agencies could design procedures
tailored to get the result they want.
(c) Focusing on procedure is kind of a way of ensuring there is
enough of a record for judicial review (but so then we go
to arbitrary and capricious review?)
(d) Maybe Congress trusts the agency more than the court does,
but it is for Congress to decide how much power to delegate.
So, Nova Scotia still exists as an exception, and Vermont Yankee
has expanded courts cannot place further procedural
requirements in formal adjudications either. Vermont Yankee leaves
an escape route in the form of extremely compelling

Exceptions to notice and comment rulemaking (interpretive rules,

statements of policy, etc.)

553 itself says it doesnt apply to some things. Were focusing

on interpretive rules and statements of policy.
(14) Why would an agency choose to use an interpretive rule or
statement of policy? To avoid judicial review, of course. Also,
these statements arent binding on the agency. They are also more
efficient/less costly.
(15) Guidance documents are very heavily used.
(a) They are notice by an agency of a position that it might take
later. Chances are we will pursue you if you do x.
(b) This is helpful as far as notice and consistency.
(c) Generally they contain a disclaimer that says you shouldnt rely
on them. However, the question of whether an agency treats a
document as binding is another matter.
(d) Occasionally an agency will choose to adopt a guidance
document through notice and comment, but usually they are
more informal.
(e) An agency can always change its mind it is not bound by
guidance documents.
Policy Statements
(16) How can you tell a policy statement from a legislative rule?






(a) Courts look at whether the rule is binding.

(b) Ex: Oil Pollution Act says that operators are liable for spills.
(i) Agency says that pilots are operators but navigators are not.
This could be only an interpretive rule, but it does sound like a
binding norm it doesnt sound the agency will change its
(ii) Agency says it plans to pursue only pilots. This one talks
about future intention but leaves some wiggle room.
Agency says that in spills of less than 100 gals., the
pilot will not be deemed an operator. This is too specific to be
a non-binding policy statement.
(iv)Agency includes a disclaimer saying that no one should
rely on the statement. But why would they say it otherwise?
Does the agency act as though the statement is binding? The
up side is that maybe the disclaimer signals to pilots that they
can challenge their classification as operators.
American Hospital Association v. Bowen (544)
(a) Congress tells the HHS that it wants Peer Review
Organizations to review expenditures of Medicare funds by
doctors and hospitals.
(b) The HHS sets them up through general policy statements, and
the DC Circuit says it is ok. Ct moving away from deciding
whether a rule is interpretative based on how much it affects
people (ct wants to keep this exception to 553 meaningful).
Appalachian Power Co. v. EPA (547)
(a) EPA issued Periodic Monitoring Guidance document without
notice and comment; ct held that Guidance was a final, binding
determination that amended prior regulations so required
notice and comment.
(b) If treated as controlling, treated as rule, basis of enforcement
action, etc then binding. Boilerplate nonbinding language
on doc doesnt automatically make it nonbinding.
CNI v. Young (549)
(a) The FDA may bring an action in court to condemn shipping of
adulterated food. They must prove at trial that the food was
adulterated. The FDA set action levels, without notice and
comment, to inform food producers of the max. levels of
contaminants allowed.
(b) The language here seems binding. The FDA treats it as
binding this is clear b/c corn producers have to apply for an
exemption if they want out.
(c) The court holds that here the statement was binding, but notes
that it is fact specific not all statements are binding, only ones
to which the agency gives a present, binding effect.
Why make a statement instead of a rule?


Agency view
(a) The agency can pick and choose comments and commentors,
whereas in notice and comment, everyone who wants to can
weigh in.
(b) Less expensive and less time-consuming. Especially important
if, for example, a president has two years left in office.
(c) Hoping no one will challenge flies below the radar.
(d) Safe harbor (notice) Better to know up front if you will be
pursued by the agency.
Regulated entity view
(e) You lose the ability to comment up front.
(f) It may be cheaper to comply than adjudicate, in which case you
never get any say. Even if you do litigate, you have to wait for
enforcement in order to do so.
(g) You might comply if the agency has good arguments. And the
agencies are more or less betting that you will comply.
(h) There may be commercial benefits with compliance. Like
proclaiming your tuna is dolphin safe.
Consumer view
(i) Lose the chance for comment.
(j) Lose the chance for challenge, most likely. The regulated
entities are the ones to challenge.
(k) Cant really challenge the agency decision not to enforce.
Interpretive Rules
(21) Doesnt say anything new, only clarifies an existing norm.
(22) American Mining Congress v. Department of Labor (Pg. 552)
(a) Secretary of Labor decided that diagnoses of certain diseases
had to be reported within 10 days of diagnosis. The labor dept.
issued Program Policy Letters to tell mine operators how much
darkness on an x-ray would trigger the reporting requirement.
(b) DCC said that the PPLs were interpretive. Gave several
(i) In the absence of the rule, can the agency still take action?
(ii) Published in the Fed. Register?
Has agency explicitly invoked legis. authority?
(iv)Does the rule amend a prior rule? (See National Family
Planning v. Sullivan for amendment w/o notice and comment,
p. 553).
(c) If the answer is yes to any of these, the rule is legislative, not
(23) Hoctor v. U.S. Dept. of Agriculture (Pg. 555)
(a) Mr. Hoctor owns big cats. He builds a 6 ft. fence around the
cages, relying on the Agriculture Dept.s statement that 6 ft is
tall enough to satisfy the structurally sound requirement of
the regulation promulgating through notice and comment.




(b) The Dept. then issued a rule requiring 8 ft. fences w/o notice
and comment, claiming it was an interpretive rule.
(c) Hoctor challenges and the court says it is not an interpretive
rule. It is not interpreting any statute (not interp structurally
sound,) and the choice of an 8 ft. fence is totally arbitrary.
(d) It is difficult to reconcile this case with American Mining.
OMBs Final Bulletin for Agency Good Guidance Practices
(a) Suggests proposed guidance comments finalize guidance
(b) Still not binding on agency, cant sue agency to comply
(c) Effect: brings paper hearings back for sig. guidance documents
useful discipline on agencies but slows down process

APA constraints on making policy through adjudication.

SEC v. Chenery II (Tab K)
(a) The SEC declined in an adjudication to approve a
reorganization plan because it thinks that managers shouldnt
buy preferred stock during reorganization.
(b) Case #1: The agency bases their decision on judicial precedent;
said based on principles of equity judicially established. The
court doesnt think the precedent supports the agency view or
that this provides any standard.
(c) NOTE that the court is looking to the actual reasons
provided by the agency at the time. Not post hoc reasons
given; not like in Pacific Box, where the court just assumed
that the agency had a good reason/made up own reason.
(d) Case #2: The court approved substantially the same SEC
decision when the agency offered different support for it
(purposes and standards under the Act).
(e) Is it fair to apply the agencys judgment retroactively? The
management of the companies wanting the reorganization had
no notice that their plan wouldnt work.
(f) Agencies can announce new rules through adjudication. Is this
a good idea?
(i) Well, agencies arent courts.
(ii) Maybe we would rather the agency think through their
policies more.
For better or worse, adjudication is used a lot, like
in union cases.
(g) This case establishes that agencies have presumptive discretion
to choose rulemaking or adjudication.
NLRB v. Wyman Gordon (Tab L)
(a) A prior case decided by the NLRB, Excelsior, said that
employees have to provide address lists to unions before union
(b) In this case, the union got a subpoena to get the lists, the
employer didnt comply, so the union wants an injunction.


(c) The majority says that the Excelsior rule was improperly made
under the APA, and therefore invalid.
(i) The rule was announced in adjudication but not applied to
the parties before the court. Parties werent sure if it would
apply to them, so maybe not fully argued.
(ii) It is a general rule (broad, new, prospectively applied)
that should have gone through rulemaking.
(d) It also says that the NLRBs order to comply with the subpoena
was still proper (reasons were ok even though relying on bad
(e) So the court puts some limits on agency rulemaking through
adjudication, but it is still ok.

NLRB v. Bell Aerospace (Pg. 512)

(a) The employer thinks that if its buyers (the people that buy
things on its behalf) unionize, they will favor union shops. The
case turns on the definition of managerial employee the
employer says buyers are.
(b) SC says the NLRB can adjudicate this; does not share the
Appellate cts concern that this would be unfairly retroactive;
ok to use adjudication to announce a new principle.
(c) The NLRB never uses rulemaking this definition of
managerial employee evolved through case law.
(d) Is anything left of Wyman?
(i) In Bell, the adjudication was applied to the parties, which
was one requirement of Wyman.
(ii) Also, this decision is very particularized, unlike that one.
Limits: large fines/financial liabiliteies, if regulated
entity had strong reliance interests (Wyman), type of question
(interp term in statute in ind. cases is ok for adjudication, but
what it takes to effectuate the statute (Wyman) is not ok bc
seems more new and less tied to the words in the statute).


Morton v. Ruiz (Tab M)

(a) Mr. Ruiz is a Native American who works in the mines 15
mins. from his reservation and also lives outside his
reservation. The miners strike and Mr. Ruiz is denied
assistance from the Bureau of Indian Affairs because he lives
off the reservation.
(b) This is an informal adjudication. The manual (unpublished)
says no $ for those not living on reservations.
(c) The court says the BIA doesnt have power to do this on a case
by case basis. Why?
(i) Consistency - The BIA had previously read the authorizing
statute as on or near.
(ii) BIA doesnt give a valid legal reason?


No formal adjudication, so maybe the court is
concerned about due process.

Constitutional due process constraints on agency procedures


Traditional View
Rights/privilege distinction
(a) Rights - The government can take someones property, but only
if there is due process. An individual cannot take someones
(b) Privileges If an individual can do something to another
individual, then the government can also do that thing w/o due
process. Govt can condition a privilege.


Goldberg v. Kelly (Pg. 620) The due process revolution

(a) More and more of our wealth is dependant on government
entitlements and less about ownership. (The New Property).
(b) There were always SOME limits to govt entitlements 1st A
and statutory limits on giving and taking away.
New Approach
(a) Two questions
(i) Is there a protected property or liberty interest?
(ii) If so, what process is due?
Kelly is seen as important for the answer to the first question.
(a) This is about the termination of welfare benefits
(i) These are private benefits given to an individual as
opposed to public benefits like access to a highway.
(ii) There was some process, notice and a chance to write to
official before, fair hearing after.
(b) Both side concede that there was a protected property interest
here it was the 1st time the S.C. recognized that. Benefits are
seen as a statutory entitlement for those eligible, not a
privilege, which leads to a reasonable expectation that you
wont have benefits revoked if meet criteria in statute (see Roth
and Perry).
(c) Going beyond traditional common law understanding of prop
rts (private property).
Then the question is whether due process entitles them to a
predetermination hearing.
(a) Court says yes.
(b) Also says that the predetermination hearing need not be a fullfledge formal hearing.
(c) But an opportunity to be heard must be tailored to those being
heard. Here, an oral hearing is required, as submitting effective



written comments is not a realistic option for many welfare

This case is about whether the government has constrained its
own discretion. If they have and the welfare recipient relied on
that, then there is a property right. I.e., govt jobs where you can
only be dismissed for cause creates a property right, while not
getting a defense contract is not depriving of an existing
benefit/prop rt. Statutory limits on govt discretion.


Board of Regents of State College v. Roth (Pg. 626)

WI hires a prof. for 1 yr term then doesnt rehire him w no opp for
hearing. He claims was retaliation for 1A protected expression.
Court doesnt reach 1st A claim says there is no property interest.
There must be a legitimate claim of entitlement, something more
than a unilateral expectation some external limit on decisionmakers discretion giving rise to reasonable expectations of
rehiring. Note substantiality of Ps interest is not a question.


Perry v. Sindermann (Pg. 630)

Same facts in TX, except here there is a stated policy that sounds a
lot like you can only be fired for cause the school wants
everyone to feel they have tenure so long as they continue to do
good work.
This is the outside source missing in Roth that creates a legitimate
claim of entitlement. Hearing required. Court looks broadly to
things that could give rise to reas expectation (manual, common
practice, expectation, TX common law)

The idea is that if the govt itself has constrained its discretion in given
and taking away benefits, then they have created an entitlement protected by due
process. The beneficiaries have relied on the constraints.
Does this act as an incentive for the govt ever to limit its
discretion? Hmm
Note how this works: Under due process, you get a hearing. That
is all. It isnt a guarantee of getting your job/benefits back.
There is also a burden shifting issue a predetermination hearing
puts the burden on D, a postdetermination hearing puts the burden
on P. (I think this is right.)

Arnett v. Kennedy (Pg. 634)

Here, a civil servant lost his job. Relevant statute said he could
only be fired for cause; same statute set out procedures for
determining whether something was for cause and says hearing
is not required.
Rehnquist says that you have to take the bitter with the sweet. If
you rely on the statute for an entitlement, you have to accept its



procedure as well, even if it doesnt live up to constitutional due

NOTE: this is NOT the law Rehnquist was only speaking for 3
judges. LAW: only look at substantive part of statute to see if
protected property interest; dont look at procedural part of statute.


Cleveland Board of Education v. Loudermill (Tab N)

Loudermill lied on a job application about never having been
convicted of a felony. He was dismissed for dishonesty in the
application process.
Again, this is about whether he is entitled to a pre-termination
hearing, which is not required under Ohio law.
This case overrules the Arnett bitter with the sweet thing. Due
process always applies when there is a protected interest.
(a) This makes more sense otherwise, were back in the
rights/privileges world where Congress can dictate the
procedural requirement of adjudicating about any benefits it
How to justify what Loudermill is doing?
(i) People form expectations based only on substantive
(ii) Allowing Congress to do the substance and the procedure is
dangerous give the one branch too much power.


Liberty Interests
This is about the right to do stuff. It is harder to define.
(a) Paul v. Davis Police said this guy was a shoplifter and
circulated a flyer saying so. Court said no protected interest
reputation is not important enough. Must be rep PLUS.
(b) KY Dept. of Corrections v. Thompson Prisoner had no liberty
interest in family visits; govt had not limited its discretion.
(c) Sandin v. Conner No protected liberty interest in not being
searched in prison.
(i) Court is worried about providing a disincentive for prison
supervisors to make rules to guide low level employees. Due
process challenges all over the place would be such a
(ii) Ct wont usually find deprivation of liberty in prison unless
atypical and significant
(d) This is all kind of a federal common law approach the fed.
cts. are making it up as they go along.


American Manufacturers v. Sullivan (Pg. 641)

This is about Workmans comp. Statute says people are entitled to
reasonable and necessary medical benefits. This sounds like
unlimited discretion.




1st question protected interest? How would it be characterized?

(a) Right to reasonable and necessary medical payment?
(b) Right to uninterrupted payments? (Like Goldberg).
(c) The Court doesnt buy the uninterrupted thing the question is
the right to each expense. There is no protected interest until
the utilization review organization says so.
(d) Is this back to the bitter and sweet thing? The idea is that you
dont have a right until the URO says so through the
procedure set up in the statute.
(e) Or maybe the distinction is that you cant have an entitlement
to something upon first application you have a right when
youre already getting the benefit and it is going to be
(i) Inefficient to do a hearing first.
(ii) You cant rely on a benefit you dont have, so maybe there
is no protected interest.
(f) An alternative maybe breaking this up into individual
expenses means that each one is too small to qualify as an
interest. Or maybe URO isnt state actor so no DP concerns.

2nd question what to consider?

J. Friendly gives us some factors: (p. 647)
(a) unbiased tribunal
(b) notice of proposed action and grounds for it
(c) opp. to present reasons to the contrary
(d) right to present evidence/call witnesses
(e) know opposing evidence
(f) cross-ex witnesses
(g) decision based exclusively on presented evidence
(h) right to counsel
(i) record created
(j) written findings of fact and reasons for decision
The problem is that judges can pick and choose from the list;
inconsistent, patchwork approach; unpredictable case law.
In Kelly, the court did a balancing test:
(a) Individual Interest
(i) severe loss and hardship
(b) Govt Interest
(i) cost/burden of having hearings
(ii) avoid social malaise (?)
(c) Court didnt seem overly concerned w/ the govts own
characterization of its interest.
(d) By requiring more process the court is forcing a more
adversarial system to promote accuracy and dignity. Doesnt
consider other options, like audits or something.



Mathews v. Eldridge (Pg. 649)

(a) Question is whether due process requires a predetermination
hearing before terminating disability benefits. Court says no.
(b) The court retreats from Kelly but does a similar balancing test.
(i) Weight of interest balanced against risk of erroneous
determ under existing procedures and benefit of add procedures
plus the govt interest.
(ii) Hardship is seen to be less here than in Kelly (which seems
unlikely) because the benefits arent need based.
Medical questions like these are more appropriately
decided through written testimony (usually of doctors) than the
issues in Kelly (less value to hearings).
(iv)There is no social malaise consideration here; it is all about
the cost of additional hearing and cost of payments to those
who are ineligible.


Loudermill (revisited Tab N)

(a) One guy was discharged for dishonesty on his job application,
one guy refused to retake a vision test. Both were fired.
(b) So there were protected interests here, and the statutory process
wasnt good enough due process requirements apply.
(c) What are those requirements? (Cts only rarely mention
dignitary interests (Goldberg) now):
(i) Private interest = job. Cannot be gainsaid how
important it is.
(ii) Govt interest = money. Cost of more hearings. Court
steps in here and says the govt interest actually favors hearings,
as it will keep people off welfare and save the cost of training
new employees.
Value of Additional Process = accuracy, avoiding
mistaken decisions.
(d) So what is required? Notice and an opportunity to speak with
the decision maker. Why not more?
(i) Maybe more process would skew the balance analysis
because it would be more govt cost
(ii) Also, they just didnt ask for more. Who knows if they had.


Walters v. National Assoc. of Radiation Survivors (p. 655)

(a) Question is whether the statutory limit of $10 on the amount of
legal fees you can pay violates veterans due process right.
(i) This is the flip side of whether the state has to provide a
lawyer can the state effectively prohibit hiring a lawyer?
(b) There is an interest here in getting the benefits, so question 1 is
out of the way.
(c) Court says $10 limit is not a violation.


(d) Private Interest veterans have an interest in good

representation, a property interest in the benefits, liberty
interest in hiring representation, timeliness in receiving the
benefits, and a dignitary interest in being treated appropriately
by the govt.
(e) Govt interest cost of involving lawyers all over the place,
maintaining a non-adversarial proceeding (which is
(f) Value of added procedure Court gives statistics that only 2%
of cases are complex. So allowing representation would not
substantially improve accuracy, b/c the other 98% are fine.
(i) Kind of seems that the question should be whether
ANYONE is denied due process, but the court doesnt take that
view instead it sacrifices the 2%.

Gilbert v. Homar (Tab O)

(a) Campus police officer suspended and then demoted to
groundskeeper after involvement in drug deal. The demotion is
based on what he said to the police. NO process is required.
How does this square w/ Loudermill?
(b) Individual Interest
(i) Suspension v. termination
(ii) Pay
Benefits are kept during suspension
(iv) Point is that this suspension was temporary, so not as big a
deal as termination.
(c) Govt Interest
(i) Public trust in the police force
(ii) Money, efficiency
Dignity the govt doesnt want to keep someone
on the payroll who is charged w/ a felony.
(d) Value of added process
(i) Here there is 3rd party verification the police have
charged him. This is a lot of faith in the police but may be


Brock v. Roadway Express (Pg. 666)

(a) Whistle Blower case. Immediately reinstate if OHSA has reas
cause to think fired bc of whistleblowing; employer only gets
opp for hearing after reinstatement.
(b) Individual interest: The employer has a protected interest in at
will employment and the right to terminate employees.
(c) The employee is a beneficiary of the statutory scheme
doesnt have a protected interest, per se. But, maybe his
interest is folded into the govt interest.


(d) Govt interest Having effective highway safety. It is

necessary to protect the jobs of employees who report stuff to
achieve that goal.
(e) Value of added process: Very substantial interests so weighs in
favor of more process.
(f) How does this work? Usually the beneficiary is the one w/ the
protected interest, like in Kelly.
(i) Do we add a fourth interest (expectation of beneficiary)?
Does it get folded into govt interest?
(ii) No one knows, but the three-way balancing test is still
standard (w/o additional 4th-beneficiary expectation)
(g) In this case, need more process, but full hearing not required
IV)Judicial Control of Agency Action
Scope of review and deference to agency actions
Review of agency determinations of fact for substantial evidence
706 says agency action can be set aside if
(a) (2)(A) Arbitrary and capricious applies to informal decisions
(b) (2)(E) Unsupported by substantial evidence only applies to
formal rulemaking and adjudication (556 and 557) decisions
on the record (triggered if words of statute say on the record
after a hearing) used a lot. Substantial evidence review.
(c) (2)(F) De novo review unwarranted by the facts rarely
Review of formal adjudication are pretty easy, as there is a record
and written findings.
Reasons to defer to agency fact-finder: efficient, democratic
concerns, independent (theoretically), but dont want agencies
hiding policymaking in bad fact-finding and dont want bias,
thought that agencies are more like judges than juries (review of
what judge finds reversed only if clear error and juries if no
reas juror could have found)
NLRB v. Universal Camera cases 1951 (Pg. 192)
(a) This guy thinks hes been fired because of his testimony that a
group of employees should not be considered managerial and
thus able to unionize. The firing happens months after the
testimony. A lot of this hinges on the credibility of witnesses.
(b) The Supreme Court adopts a standard of substantial
evidence, which is deferential to the agency.
(i) It resembles the level of deference given to jury
determinations in court you can only overturn it if there was
no reasonable basis on which the jury could have found the
way it did.
(ii) This standard credits the credibility determinations and
expertise of the agency.


(c) The Court also says that review must be on the ENTIRE
(i) Here, that included the initial determinations of the
(ii) The idea is that you cant just zone in on the evidence that
supports the view you wish to take. If a guy has 500 lbs. of
fertilizer in the storage space of his apt., it might be relevant
that his brother is a farmer
(d) There are some issues with this standard:
(i) What about agency bias? Take a pregnancy discrimination
case in front of the EEOC for example. The EEOC is charged
with ensuring equal opportunity employment this may cause
them to favor claimants who claim discrimination. Worried
about agencies hiding policy-making in bad fact-finding.

Allentown Mack v. NLRB 1998 (Pg. 204) see notes.

(a) Employer has a decertification poll based on good faith
doubt that the union enjoys employee support. The NLRB
says there was no good faith doubt and as such, the employer
violated the statute.
(b) The DCC defers to the NLRB determination, but the Supreme
Court takes the unusual step of reversing the NLRB decision
instead of remanding to the board.
(i) They think that the DCC misapplied the standard like
(c) Can we reconcile this with Universal Camera?
(i) U.C. was about believing that individual people meant what
they said. Here, the question is whether the employer could
have reasonably believed what a group of people said.
(ii) Maybe the court sees the NLRB as making law in this case,
but not in Universal Camera.
(d) The court may be concerned that the NLRB is making law but
not explicitly saying so.
(i) The NLRB says reasonable good faith but seem to be
applying a sort of head count test here.
(ii) Maybe they dont want to state the rule b/c they think it
will be overruled.
(e) The Court does not, however, take issue with agency applying
the same standard here as they do to refusal to bargain.
(f) ***Extension: could they set evidentiary presumption (dont
consider things said in job interview)? Yes if in statute
Chenery (ct will look to reasons agency says at time). Do they
have to do in advance or can they do when they decide case?
Can make statement in adjudication even if retroactively
applied to parties (Bell Aerospace, Chenery, Wyman-Gordan).
Ct can interpret law to change standard but must be candid


about it to facilitate cts review (like Wyman-Gordan cant

use adjudication to do smthg that looks just like a rule).

Distinguishing questions of law from questions of fact

Hard to do. Questions of law = 706 plus courts.
(a) The way an issue is characterized determines the review
(i) Q of law often de novo review more aggressive.
(ii) Q of fact substantial evidence review, maybe clear error
(dep. on statute) or arb+cap under APA more deferential.
U.S. v. 53 Eclectus Parrots (Pg. 228)
(a) Guys parrots were seized. The case hinged on the meaning
within the statute of wild birds
(b) Is this a question of fact or of law?
(i) Guy is depending on a zoologists opinion of what wild
means. He says these birds are not wild since there had been
success in breeding them in captivity. Says this is a statement
of fact.
(ii) The court takes the governments definition of wild. Ct
does it through statutory construction (leg history,
purposes/goals, comparing use in other statutes, Q of which
facts are relevant), which is a legal question.
The purpose of the statute informs the meaning
Congress probably meant something different than the
zoologist when they wrote the statute (like not domesticated,
for example).


OLeary & OKeefe (p. 230-31)

(a) Both Longshoremen cases.
(b) OLeary tried to rescue someone and drowned. OKeefe
decided to cross a lake in a boat full of sand and drowned.
(c) Both were awarded compensation by the agency, but were
reversed by app cts. SC reversed both app cts.
(d) The meaning of arising out of employment in the
Longshoremens Act includes situations in which the
conditions of employment create a zone of special danger.
(e) What is the meaning of zone of special danger?
(i) The Court said this was primarily a question of fact for the
agencies to decide and that the appellate courts should have
deferred. Deferential to agencys experience and policy.
(ii) But it isnt that any of the facts are actually in question it
is the application of the standard to the facts.
(f) J. Frankfurter says that OLeary is a mixed question. (Not sure
what he recommends we do with such questions)

Review of agency determinations of law before Chevron






The APA was a push for standardized review of agencies at a time

when agencies had lots of freedom. To the extent necessary to
decision and when presented, the reviewing ct shall decide all
relevant Qs of law, interpret constitutional and stat provisions
Crowell v. Benson says that judges have to decide question of law.
But then we have these mixed questions
Before Chevron, the courts got to decide on a case by case basis
when to defer to agencies. Effects?
(a) The courts can really keep agencies in check.
(b) The courts can impose their own values on agency decisions.
Deference to agencies can be a good thing.
(a) Expertise.
(b) Better handle on Congressional intent.
(c) Accountability through political process.
(d) Greater uniformity centralized law making.
NLRB v. Hearst Publications (Pg. 234)
(a) Newsboys wanted to bargain with the newspapers. Question
was whether newsboys were employees within the statute.
(b) 1st question does the definition of employee track state law?
Whether to incorp. common law standards.
(i) This is a statutory construction question and so is for the
courts. Pure legal Q. Court considers it de novo.
(c) 2nd question is the newsboy an employee?
(i) This seems like legal question, the definition of a statutory
term, but it does deal w/ the application of facts (i.e. how boys
get papers, how much power the companies have over them).
Mixed legal/factual Q. Ct defers to agency on 2nd question.
(d) What are the reasons not to defer?
(i) Court may be more neutral, NLRB more biased. Want
meaningful judicial review.
(ii) Judges have expertise in interpreting/defining terms like
this perhaps the court is engaging in expertise analysis itself.
APA says judges decide all questions of law.


Animal Welfare Act Ctools

(a) AWA said can impose penalties on research facilities if not
following humane standards; Hopkins said impossible due to
rats; USDA said we interpret animal to exclude mice/rats.
(b) Interpret act: what included/excluded, grammar, word choice,
policy reasons, agency expertise, purpose of act, ambiguity
means Congress meant to leave some discretion to agency ct
doesnt say legal Q, but infers that Congress was delegating
interp of animal to the agency.


Skidmore v. Swift & Co. (Pg. 236)


(a) This is about workers who stayed in a firehouse on-call, but

just hung out and played pool and slept and were just there to
answer the occasional call. Do those hours get counted for
(b) The administrator issues a letter stating that it isnt all or
nothing, youre either waiting or working, there are factors to
be considered on a case-to-case basis.
(c) The trial court decided that the hours in the firehouse didnt
constitute work. The Court of Appeals affirmed, but the
Supreme Court reversed.
(i) S.C. thinks the trial court should have given more weight to
the administrators statement about whether waiting hours
could ever be working hours. The Court says that thought the
statement isnt controlling on the court, it stands for the
reasoned judgment of the agency w/ expertise and should be
(d) This case produced a list of factors to consider for whether the
court should defer to the agencys interpretation (not autodeference) (problem unpredictability in factors):
(i) Thoroughness of consideration
(ii) Validity of reasoning
Consistency with earlier and later
(iv) Other factors which give it power to persuade
(e) List of factors is still good law.

The Chevron doctrine and review on determinations of law

Chevron v. NRDC (1984) (Pg. 242)
(a) Statute about air quality standards says that states must look at
new sources of emissions. The question is how to define new
(i) Brand new in the middle of nowhere clearly covered.
(ii) 2 building facility that wants to tear one building down and
replace it? EPA says this is not a new source, as long as the
total emissions from the facility dont increase (bubble rule).
(b) Chevron gives us two step analysis
(i) Has Congress spoken to the specific issue in the statute?
If yes, end of story. If no,
(ii) Defer to the agencys reasonable construction of the
authorizing statute.
(c) This is hugely significant. The court has created a presumption
of deference to agencies. Why?
(i) The Court is engaging in some reconstruction of
Congressional intent. Had they thought about who they wanted
to interpret the statute, they would have wanted to agency to do


(ii) Another argument Congress has already delegated lots of

power to the agency, signaling some trust in its abilities. So if
there is a gap created by ambiguity in the statute, Congress
probably would have wanted the agency to fill it.
Acknowledgement of agency expertise: legal Q
with policy aspects, more political accountability
(d) Effects?
(i) Having a clear default rule is useful and creates more
(ii) Might lead to better decision making agency has more
options, agency lawyers can focus on the range of possibility
instead of the rules the courts will apply.
Greater flexibility for agencies increases electoral
(iv) Note: Hearst said mixed Qs get deference and pure legal
Qs get de novo review; now mixed Qs and pure legal Qs get
deference unless Congress spoken to specific issue.
(e) What about non-delegation? What about 706? Gone now,
cts only determine Qs of law if clear Congress wants that.
(f) What is the scope of this? Chevron dealt with a legal question,
but the implications were wider


Young v. CNI (Pg. 257)

(a) The aflotoxin case again. Consumers wanted aflotoxin to be
regulated; FDA says they arent obligated to do it.
(b) Plain language of statute seems to require FDA to regulate if
something is deadly and cant be avoided in food. But FDA
argued that as he finds necessary applied to shall set levels.
(c) As the statute is ambiguous and this is reasonable, the court
deferred. (Note cant explain rationalization for first time in
brief to court and get deference.)
Note that this is a shift back toward agencies and away from
judicial review. Kind of resembles the new deal era.
(a) Arguments for: expertise, agency competence and experience,
democratic accountability, better consistency and uniformity
and functionality
(b) Arguments against: agencies free to shirk obligations if badly
written statutes, worries about agency bias/being in the
pocket of industry, lose a check on agency action, give
agencies even more power, and though agency decisions affect
individuals, no judicial review leaves only recourse writing to
Congress/appealing to agency/other informal mechanisms (go
to press, etc.)
(c) How to reign in agencies now: Congress could overturn statute,
cts could find Congress spoke or unreasonable, President could
fire agency heads, ct could reframe question


Chevron Step 1


INS v. Cardoza Fonseca (Pg. 255)

(a) Two parts of the statute
(i) Prohibits deportation if life would be threatened
(ii) Permits asylum if well founded fear of persecution.
(b) INS reads them to mean the same thing.
(c) The Court says Congress was clear by using different phrases
in the statute that it intended two different things.
(i) They frame this is a Step 1 question: Are the phrases the
same? They then use statutory construction to say that
Congress was clear.
(ii) What if they had said What does well founded fear
mean? Then they might have had to defer.
Here the court says this was a pure question of
statutory construction, but later this distinction is abandoned.
How do you know if Congress has precisely answered the
(a) Courts look to statutory language. In Brown v. Williamson, the
court looks to the entire U.S. code.
(b) What about using legislative history and purpose? These allow
courts to look at policy, which is the agencys job. Also, the
more courts look at, the less likely they are to get to Step 2.


Babbitt v. Sweet Home (Pg. 273)

(a) Endangered Species Act prohibits taking of endangered
species without a permit what is a taking?
(b) Note that the majority kind of fudges the step 1 question, says
Congress didnt speak, and moves to step 2, deciding the
agency interpretation is reasonable.
(c) Scalias dissent does some hard core textual step 1 analysis.
(i) He pulls out a bunch of statutory canons; noscitur a sociis
a word is known by its company. Possibly also the canon of
reading stuff to avoid constitutional problems, since he is
worried about the takings clause.
(ii) He also wants to assign take the common law meaning.
He then does this cant-stomach-the-result thing.
Congress cant POSSIBLY have meant to do this.
(d) So his approach is to wring all the meaning possible out of the
statute in order to not reach Step 2. Scalia resists Chevron
application when (1) agency interp close to contitutional line or
(2) something so significant that we cant imagine the
legislature meant to give so much authority to agency.


MCI v. AT&T (Pg. 281)


(a) Court says on step 1 that the agency is wrong about the
meaning of modify (FCC says can modify meaning get rid
of tariff reg for certain carriers to stimulate competition).
(b) It becomes the war of the dictionaries. The one the agency is
relying on is a renegade dictionary. Modify = small change,
cant mean partially eliminate.
(c) Scalia, writing the opinion, also doesnt believe this one little
word would allow so much power to the agency he wants a
clearer statement from Congress. Cant stomach the result.
(d) Note ct does not look at whether interp reasonable just says
FCC doesnt have authority to interp this way.

Massachusetts v. EPA (supp p.28)

(a) Question: whether Clean Air Act requires EPA to regulate
greenhouse gases emitted by cars EPA interprets air
pollutant to say has no authority to reg greenhouse gases.
(b) Majority: easy case greenhouse gases arent covered under
conventional understanding of air pollutant. textualism,
dictionaries Congress has spoken, Step 1 case.
(c) Note: since Chevron, when unclear, cts no longer throw up
their hands and defer to agency; instead, make more more of an
effort to answer Step 1 themselves so dont get to Step 2.


American Water Works v. EPA

(a) Statute: EPA should set standards for lead in drinking water if
feasible to do so; EPA refuses bc setting standards for lead
will increase other contaminants in the water
(b) Court allows EPA to read feasible in a way that is consistent
with the purpose of the act, which is to make drinking water
safer (even though ct not willing to do this in cases like
Chevron only looked to def of modify); ct defers to agency
(c) Seems that cts have a choice of whether to defer to agency


Environmental Defense v. Duke Energy Corp.

(a) Clean Air Act: one section mentions another in order to define
word modification but inconsistent w first part of statute
whether modification = increase in hourly or annual rates
(b) Ct says it is confusing and there are a lot of important policy
considerations, so defers to the agencys interpretation
(c) Cant predict how these cases will come out; if arguing, argue
text, history, everything.


American Mining Congress (Supp. 2.P) **not sure if we did this**

(a) The EPA wants to regulate material that mining/refining
companies reuse. They classify it as discarded.



(b) The Court does step 1 analysis and says that the statute is clear
and the agency is wrong.
(i) Court looks at legislative purpose to do this. They think
they have the right interpretation because the purpose of the
statute is to minimize waste.
(ii) Again, this is the courts perception of what Congress was
Step 1 Tools:
(a) Statutory language: close reading, canons of construction
(usually cts use textualism to give deference and never get to
Step 2)
(b) Leg history: whether Congress clearly answered precise Q
(c) Purposes of statute: might use to read lang more ambiguously
and give deference, or use to say agencys def makes no sense
(usually comes up in Step 1 and Step 2)
(d) If ct cant stomach the result (if Congress had meant this,
they would have been extra clear): usually for
critical/important isues see as special type of Step 1 or
exception to Chevron (cts retaining primary authority to say
what the law is). Note that ct is IDing these important
questions; usually in these cases, ct wants Congress to
explicitly say agency can do something bc unclear if they
thought about it beforehand.
(e) Constitutional avoidance: assume Congress did not mean for
agency to be close to constitutional line (see below)

Canons of construction and avoiding constitutional questions

(construe a statute to avoid a constitutional Q)

Kent v. Dulles (Pg. 322)

(a) The statute says the state dept. has discretion to deny passports.
(b) The Court, on Step 1, says Congress couldnt have meant to
allow the state dept. to have very broad discretion.
(i) They look to the traditional reasons a passport could be
denied, of which there were only a couple. If Congress wanted
to expand beyond these, the court wants a clearer statement.
(ii) Court also says the right to travel is a Constitutional right
and construes the statute to avoid the Constitutional question.
(c) The court wants Congress to think before handing agencies the
power to raise constitutional questions.
(d) Maybe we like this better than general cant-stomach-the-result
stuff. Dealing with Constitutional rights gives a limit to when
courts apply it.


Rust v. Sullivan (p. 326)


(a) Ct will only find agency interp unauth unless raises grave
constitutional Qs; here, ct is willing to reach constitutional Q
and says agencys interp is constitutional
(b) This was an agency flip-flop issue, but the ct defers anyway
does this make sense?
(i) Contrast with Skidmore: one of 4 parts of test is
(ii) Flip-flop due to change in administration pros (suggests
democratic responsiveness, flexibility) and cons (seems more
political, inconsistent so less notice/predictability)
Agency defended w clear reasoned analysis, so ct
thinks ok here
(c) This is a Step 2 case ct finds interp reasonable.

What about when an agency says a state law shouldnt exist? (We
didnt talk about this.)
(a) Example should the FDA be able to say that if a drug
manufacturer meets minimum labeling requirements they are
immune from further state law requirements and from state tort
(b) What about state autonomy? If Congress is clear, the state law
is preempted. But should agencies be able to say state law is
preempted? If we allow this were weakening federalism

Chevron Step 2



What does it mean for an agency interpretation to be unreasonable?

(a) Maybe even if Congress wasnt clear, something about the
agency interpretation conflicts with the statute.
(b) Maybe the court has substantive problems with the
interpretation (agency got the goals wrong, bad interp)
(c) Compare to arb+cap review: did the agency think about the
right things?
(d) Usually, if ct reaches Step 2, it will defer to agency
(e) See Chevron and Sweet Home for examples of Step 2.
Chevron revisited
(a) In Chevron, the court decided the agency interpretation (bubble
rule) was reasonable.
(b) They asked
(i) Did anything in the text contradict the agencys
(ii) Did the interpretation fit the legislative history, policy and
Babbitt v. Sweet Home revisited:


(a) Majority says text and leg history do not foreclose agencys
interp; also looks to purpose of statute look to substantive
policy choices and whether legit/reasonable

Ohio v. Dept. of the Interior (Pg. 329)

(a) This case is about a Natural Resource Damages Claim. The
problem is how to value the claims.
(i) There isnt really a market, so what can we do?
(ii) The cost of fixing the damage?
How much the public valued the resource?
(b) The court takes a step 2 approach, though it looks step 1-ish.
(i) The amts. the dept. is calculating (lesser of use values or
restoration costs) wouldnt begin to pay for restoration.
(ii) The statute sets all money aside for restoration.
So the court infers that Congress intended for the
valuation to pay for restoring the resources (usually money just
goes into the general treasury). Says the goal of the statute was
restoration of natural resources, and this goes against the
agency interpretation. Ct looking at policy.


Entergy v. Riverkeeper (Supp p. 40)

(a) Step O: elegible interp? Step 1: clear answer? Step 2: defer to
reas interp.
(b) Step 2 case interp of best technology available for
minimizing environmental impact as applied to a water
cooling factory can the EPA use a modified cost-benefit
analysis to determine (cost not sig greater than benefits)?
(c) Scalia looks to dictionary says ambiguous so defer to
agency (policy determ, Congress could have used stronger
lang, not bad policy)
(d) Breyer looks to leg history, says Congress probably meant to
limit cost-benefit analysis but EPA should probably be allowed
to interp this way rule against absurdity (if EPA couldnt
consider costs, would lead to absurb results) (subjective!)
(e) Stevens looks at prevailing understanding before this case, leg
history doesnt support EPAs interp
(f) How important of a role should leg. history play?
(i) Textualist theory: only look to text
(ii) Intentionalist: what Congress was trying to do, solutions
Congress had in mind
Sources: public sources produced by Congress (see
(iv) Usually more looking to history leads to deference (note an
agency can change its mind and still get deference, though
consistency helps)



Barnhart v. Thomas (Tab Q)

(a) SS disability case. This womans previous work as an elevator
operator has disappeared entirely from the nation workforce.
(b) The statute says you have to be unable to do your previous
work to be disabled. P urges a reading that includes the
disappearance of your previous work in the unable to do
previous work category.
(c) SSA does not interpret which exists in the national economy
to apply to previous work. And the court defers to that
(d) SC uses textual analysis to find ambiguity (Step 1) goes to
Step 2 (rule against absurdity, look to policies of statute,
concerns of efficiency and mass justice)
(e) Note this is formal adjudication: Chevron applies
(f) The court recognizes that this will be unfair and violate due
process sometimes. But they let it stand b/c they are worried
about the efficiency of the agency.


Brand X (Supp p. 45)

(a) Agency offering new interpretation changing information,
expertise, ability to adapt, flexibility, politics
(b) But what about stare decisis? Expectations, compliance w law,
(c) Leads to compromise if Step 1 ruling, bound by cts interp of
unambiguous reading of statute; otherwise, agency free to
(d) How easy will this be to implement? Ex: Babbitt v. Sweet
Home could agency redefine harm to exclude harm to
habitats? Yes ct didnt say interp was only reasonable
interp; but if it had, agency would be precluded from changing
interp later. (Unclear how much weight dicta in old decisions
has, though unclear how binding that is on agencies.)

When Chevron Applies; the return of Skidmore


What kind of agency statements are Chevron eligible?

(a) So far weve seen it applied to notice & comment rules.
(b) One view ANY statement of agency interpretation should be
up for deference.
(i) Congress has delegated power to the agency, trust their
expertise. Maybe the agency should just run with it.
(c) Another view informal statements of policy should not get
(i) Maybe we think that when there is less process to begin
with, we need more judicial review.


(ii) But Skidmore was an interpretive rule of course, it didnt

get full Chevron style deference.
(d) Chevron Step 0: Chevron eligible?
(i) Notice and comment RM
(ii) Formal adjudication (INS v. Cardoza Fonseca)
Lower cts (Vermont Yankee, American Trucking
concerns about how agency exercising power)
(iv) Interpretive rules? Maybe should get (analogize to
notice&comment, expertise, agency responsibility, political
accountability), but maybe not (lack of procedure should
process matter?). Christiansen says no. Barnhart dicta suggests
that an interp rule might be able to get Chevron deference
depending on totality of circumstances.
(v) Informal adjudication? Mead says no.

Christiansen v. Harris County (Pg. 259)

(a) The agency issues an opinion letter in response to inquiry from
Harris County that it can require its employees to take their
comp time if it is in the initial agreement.
(i) Does the letter have legal effect?
(ii) Well, it isnt legally binding at the time it is sent.
Unlike notice & comment rules, interpretive rules
arent binding right away they only become binding if the
regulated entities rely and the agency abides by it.
(iv)So it would be overly simplistic to say the letter isnt
binding law, so shouldnt get deference. But ct focuses on fact
that interp rules dont have force of law.
(b) The court decides the letter isnt entitled to full Chevron
deference, but can be persuasive like in Skidmore.
(i) The court is unwilling to assume that Congress trusts/wants
the agency to get deference on this type of thing looking at
scope of Congresss delegation and for more specific
Congressional intent. Maybe ct worried about process.
(ii) Scalia is outraged he says Skidmore doesnt matter and
this decision undoes Chevron.


Mead v. United States

(a) Mead imports planners. The customs people hadnt been
charging them tariffs, but then they reclassified the planners
and charged them.
(b) The Court decides
(i) That the tariff determinations, which only apply to the
particular party, do not have the force of law. (Though they do
conclusively establish parties rights and obligations!)


(ii) As such, they are not entitled to Chevron deference, but

under Skidmore, they have some persuasive authority.
(c) Court is really looking for some Congressional statement of
intent to give this agency the power to make binding laws in
this way.
(i) They cite the number of these determinations as a reason
that they cant possible have the force of law.
(ii) Maybe they dont trust this agency if it were the SSA,
maybe it would be fine.
(d) Can we meaningfully distinguish these interpretations from
adjudications? Hmmm
(i) Is it the precedential value? These tariff determinations
dont bind anyone except for the party at hand for this
particular time. Is this distinction enough?
(ii) Is it the amount of process? Want of procedure. (But ct
says process isnt the deciding issue.)

Elian Gonzales case (famous informal adjudication case) did he

file an effective asylum application? INS says no, he is a minor
and cant do so. (See Fall 2000 exam.)
(a) Does this decision get Chevron deference? 11th Circuit says
no. But that was before Mead.
(b) Mead brings up the trade off between a clear rule and a


Barnhart v. Thomas dicta: Breyer talks about when an agency

might get deference when not N&C RM or formal adjudication
says can look to totality of the circumstances (expertise,
important Q, agency responsibility, careful consid over time, etc.)
and suggests that Chevron could apply to an interpretive rule.


Long Island Care v. Coke (Supp 23)

(a) Straightforward app of Chevron (though Steps 1 and 2 seem
blended together): Congress doesnt clearly answer, court looks
to leg history and says interp is reasonable
(b) Important part is Step 0 agency calls what it is doing an
interpretation, so Christiansen should apply and there should
only be Skidmore deference. But Breyer for majority says this
gets Chevron deference bc agency is issuing a N&C rule (rules
include interpretations all the time), treated as rule, codified.
(c) Interesting: Breyer talks about rights and duties will these
play a role in future cases to figure out whether something is
Chevron eligible? Unclear would rep further cutback on


Embryonic Stem Cell Research problem (CTools): see notes



Arbitrary and capricious or hard look review

Overview of judicial review of agency action: APA provides
(a) Substantial evidence review for formal adj/RM
(i) Agency action can include interpretations of law so ct can
decide legal Q de novo or could let agencys interp guide it
(b) Arb+cap review for all other forms of process 702(2)(A)

Scenic Hudson Preservation Conference v. FPC (1972, Pg. 350)

(a) Note that this is 12 yrs. pre-Chevron.
(b) Edison Power wanted to build a reservoir. The FPC reviewed
the plan and said ok. Environmental group sued.
(c) The 2nd Cir. remanded to the agency, saying that it had not
considered all the alternative options as required by the statute.
(d) The agency went away and spent 5 yrs. doing investigation and
compiling a 19,000 page record. Came back w/ the same plan
and the 2nd Cir. said ok. Procedural hard look.
(e) The reservoir never got built.
(f) The key here is that the Court is reviewing the agencys
process to ensure that they thoroughly considered everything
before making the decision.
(i) The Court could have disagreed on substance.
(ii) It could have not interfered, trusting the agencys
It did neither. By demanding more process, the
court is hoping to ensure a better substantive result w/o telling
the agency what to do.


Citizens to Preserve Overton Park, Inc. v. Volpe (Pg. 357)

(a) This was an informal adjudication. The statute gave the Fed.
Hwy. Administrator the authority to approve plans to build
highways through parks and grant fed. funds. Statute also
prioritized the park/environmental concerns and said such
plans could be approved if there was no feasible alternative.
(b) This was an informal adjudication, so the APA didnt require
any procedures. The authorizing statute didnt either. So there
is no record.
(c) The court doesnt apply arbitrary and capricious review under
706, b/c there is no record. The Court does wish to review the
decision based on the agencys stated reasons, so the case is
remanded, where the District Court can call witnesses and do
discover to develop a record.
(d) When remanded, the Administrator changed his mind, so the
hwy was never built. Nor did the Administrator give any


(e) In this case, the Court is very concerned that the Administrator
is not giving enough consideration to environmental concerns,
and the statute seemed to prioritize them.
(i) Is this just agency response to political winds? Is that
(ii) The Court seems to read into prudent that the agency is
required to consider everything. But maybe it should be read
as a broad grant of discretion to the agency.
Maybe the worry is that this is more than
responding to politics maybe the agency has been captured
by the hwy builders.
(f) The idea here is that the agency should take a hard look at all
the relevant considerations, and the courts will enforce this by
taking a hard look at the agencys hard look.
(i) Note that this is still pre-Chevron, so deference to agencies
wasnt really happening yet.
(ii) The more the courts look into the agencys decision
making, the more likely it seems that they will substitute their
own judgment.
First step is statutory construction; then whether
clear error of judgment.

Natl Coalition Against Misuse of Pesticides v. Thomas (Pg. 365)

(a) This is post-Chevron.
(b) The EPA set a zero tolerance level for a certain pesticide
contaminant in mangoes. It then changed the standard to 30
ppb, citing the adverse effects on less developed economies.
The DCC said that the statute did not authorize EPA to consider
the economic well-being of less developed nations in setting
levels EPA cant consider irrelevant factors.
(c) Then, EPA didnt change the level it changed the explanation
to something about destroying cooperative efforts between the
US and the other nations would lead to lower compliance with
the set level. It was again challenged, and this time the DCC
said ok.
(d) So it is all about agency procedure substantive review is
really rare. It is like just saying, Yeah, thats a stupid rule
(clear error of judgment) and courts dont do it often.


Motor Vehicle Manufacturers Association v. State Farm Mutual

Automobile Ins. Co. (Pg. 368)
(a) The Natl Traffic and Motor Vehicle Safety Administration
decided to rescind a rule requiring passive restraints in cars.
(b) The question is whether this decision was arbitrary and
capricious. The Court finds that it was and remands for further


(c) Informal notice and comment is required to rescind the rule.

(i) Somehow agency action is always seen as more significant
than agency inaction (if hadnt done anything, would have been
ok but ct says nonaction is different than repeal).
(ii) The Court thinks that the agency hasnt been thorough
Interestingly enough, the Court also distrusts the
agencys interpretation of the evidence and applies its own,
which is a kind of second guessing that we havent really seen.
(d) Like in the Overton Park case, maybe the agency is acting
politically the new administration might not be as ok with the
paternalism of safety restraint requirements.
(i) But do we really want to flip-flop every few years?
(Stevens thinks there should be enhanced burden before
changing mind want to encourage stability a reason for
some review.)

Massachusetts v. EPA again (Supp 28, Supp 62)

(a) Whether/how to defer to EPAs decision declining to act in
response to petition asking it to find car emissions are air
pollutants so they have to regulate them
(b) Ct review under arb+cap standard (if EPA had done nothing, no
review but once got petition and responded, subject to review
agency has acted).
(c) Ct uses aggressive approach to arb+cap review, like State
Farm: foreign relations issues are irrelevant factors, other
reasons are not adequately explained; though agency usually
gets deference to prioritize, here, ct wants reasonable
explanation for thinking scientific uncert precludes EPA from


Fox v. FCC (Supp 63)

(a) FCC changes its mind and decides to regulate fleeting
expletives under authority to regulate indecent broadcasts
(b) Remember Brand X change in position not enough to remove
from Chevron review could have argued that this is an unreas
interp under Chevron (but not what happened in this case)
(c) Brand X also said that an unexplained inconsistency could be
arb+cap. Why should agency have to explain? See State
Farm. No heightened burden if change mind, but still gets
arb+cap review.
(d) Agency must show that it is aware of the change and offer a
reasonable explanation for it (doesnt have to show better
than last policy), esp if based on same facts/law/policies as old


(e) Scalia writes for majority says lighter hard look ok seems
right to us
(f) Breyers dissent: thinks review should be tougher harder hard
look, ind. agency so need closer oversight
(g) Overall: does arb+cap review make things better? Maybe
yes agencies will be more careful, cts monitoring process
rather than 2nd guessing substance but also leads to delay.

Arb+Cap Conclusion
(a) Does arb+cap review make things better? Maybe yes
agencies will be more careful, cts monitoring process rather
than 2nd guessing substance but also leads to delay.
(b) Vs. Chevron review: only includes agency interp of law (not
just a ruling) Step 2 asks if interp inherently, substantively
unreasonable (more substantive); arb+cap focuses more on
process, irrationality, problematic reasoning, logical connection
btw facts found and decision reached sounds more in process.
(c) Note that APA does not allow seeking damages (which is
covered under Tucker Act and FTCA. APA is just used for
setting aside or compelling govt actions.

Reviewability: is agency resolution/failure to resolve open for review? APA

701 and 704

FIVE QUESTIONS for whether can challenge agency action

Jx right place to sue; venue (which fed ct)
Has the US (state agency) waived its sovereign immunity?
702 APA wavies sov. imm., but not for money damages.
Is this the kind of agency action that is reviewable in court?
Does this person have standing?
Timing: is agency action ripe for decision? Ripeness and
mootness, exhaustion requirements (agency prerequisites to
suit), stat of lim.


American School of Magnetic Healing v. McAnnulty (Pg. 771)

A statute gave the postmaster the authority to stamp mail
fraudulent and return it to sender. This postmaster did so after a
hearing, saying that this magnetic healing stuff was a scam.
The court said that was not so some people really believe in it,
and it hasnt been scientifically disproven so he cant do it.
This case was reviewable because the postmaster had overstepped
his authority and the company stood to suffer a lot of injury as a
This case way preceded the APA, and I dont really see what the
point of it is. (We didnt talk about this case in class.)



Abbott Laboratories v. Gardner (Pg. 892)

FDA labeling case.
Court applies a strong presumption in favor of judicial review
wants a clear statement from Congress (clear and convincing
evidence) if they wish to preclude something from judicial
review, bc usually a good idea. Ct doesnt find clear and
convincing evidence here.
(a) The statute lists some stuff that doesnt get review but nothing
about judicial review, but the court says expressio unio (est
exclusion alterius) has no bite here, the inclusion of one
doesnt mean the exclusion of others. Background norm of
judicial review included in APA. (Dont hit or kick can I
pinch? Bc not stated, doesnt mean not included. Background
norm dont hurt!)
This case is post-APA. Without the APA, could we have this
(a) The legislature is trying to constrain agency action, and maybe
the way to make the constraints work is through judicial
(b) There are also common sense notions of accountability w/o
judicial review, what accountability is there?


Johnson v. Robison (Pg. 785)

A conscientious objector who fulfilled his alternative civilian
service requirement applied for VA benefits. His claim was denied
by the administrator. He said this denial was a violation of his 1st
and 14th A rights. The authorizing statute specified that there
would be no judicial review of VA decisions about benefits.
The court recharacterizes this as a challenge to the authorizing
statute, specifically, the decision of Congress that such
conscientious objectors are not eligible for VA benefits.
The Court says the purposes for the statute saying there is no
judicial review are
(a) docket control dont flood cts. w/ these claims.
(b) insure uniformity in these decisions.
The Court wants a clear statement before they will read a statute as
taking Constitutional questions away from the court (constitutional
avoidance Benzene, Kent). It is still an open question whether
Congress could actually do that.
So, the Court reviews this question without overruling the statutory
denial of judicial review. Functionality (cts have expertise dealing
with constitutional Qs, doesnt take away from agency) and
purposes (doesnt change goals of statute).


Block v. CNI (Pg. 776)




A consumer group challenges the milk prices for reconstituted milk

set by the Secretary of Agriculture as too high and depriving poor
families of a cheaper alternative to buying fresh milk.
The presumption of judicial review is overcome in this case, not by
statutory language (which was silent on judicial review), but by the
Courts idea that allowing any consumer to challenge this would
undermine agency expertise and violate whole statutory scheme.
The Court ignores the aspirational language in the statute that says
it is for the benefit of consumers. Very different than Overton Park
(put parks first unless no viable alternative).
Result is that only milk handlers can bring challenges. (Could
also see as standing case consumers dont have standing.)
Johnson is more the norm than Block.

Agency action committed to agency discretion by law: What does it mean
when there is No law to apply? Limit from background norms broad
discretion; abuse of discretion; if agency says acted lawfully end of discussion.
Maybe the discretion given to the agency is so broad that the
agency is the judge of which things are within its discretion.
Maybe when the authorizing statute doesnt speak to something,
the agency is overstepping its grant of discretion.
701(a)(1): statutes which preclude judicial review (lang, structure
except constitutional questions)
701(a)(2): committed to agency discretion by law no law to
apply Heckler v. Chaney presumption of nonreviewability

Heckler v. Chaney (Pg. 791)

(a) FDA lethal injection drugs case misbranded?
(b) FDA says it doesnt think it has jurisdiction over this, but even
if it did, it has the discretion not to enforce this.
(c) The Court decides not to review the FDAs decision not to
enforce. (Note: Could review no jx argument or possibly if
systematic abdication of statutory responsibilities see
(d) An agency decision not to enforce is typically
(e) Special rule unlike Abbott Labs: if agency chooses not to
enforce statute, exception assumption of nonreviewability
no background norms. Seen as less coercive/oppressive.
(f) Compare to Mass v. EPA where ct did second guess agencys
decision not to act.


So there is a presumption of reviewability in cases of agency

action and a presumption of non-reviewability in cases of
agency inaction (i.e. decisions not to enforce). Does this make


(a) It is useful the agency needs flexibility to allocate resources,

respond to the political process, set its own prioritize, decide
not to get embroiled in litigation it probably wont win.
(b) The other idea is that agency inaction is less likely to be
coercive/violate individual rights than agency action.
(c) But it results in asymmetry.
(i) The intended beneficiaries of an Act can challenge if the
agency action leaves them out of the picture, but not when the
agency chooses not to enforce the Act regarding them at all.
(ii) This tends to favor regulated entities, who are always in
favor of less regulation
(d) What would happen if agency non-enforcement decisions were
(i) Agencies would prioritize based on the threat of litigation.
(ii) Courts would end up deciding when enforcement or nonenforcement was merited, thus destroying agency discretion.

Webster v. Doe (Pg. 800)

(a) The CIA fired a guy because he was gay. Court said this was
not reviewable.
(b) Court points to Heckler v. Chaney and Overton Park for the
proposition that 701(a)(2) requires a close reading of the
statute. This statute says the Director can fire people when he
shall deem it to be necessary in the interest of the U.S.
(i) Shall deem is pretty discretionary.
(ii) The Court reads the language as having committed these
determinations to the discretion of the secretary.
(c) So the court says that the decision of the Director is not
reviewable, but that the guys constitutional claims are
(i) Again with the presumption in favor of judicial review of
constitutional questions (unless stat expressly precludes).
(d) It may be the case that the Director is implementing a policy of
firing all homosexuals i.e. not just making individual
discretionary terminations. Does this matter?
(i) Well, if it is a policy, it can be challenged in one suit, so the
court doesnt have to be interfering with the agency all the
(ii) Maybe the statute was only meant to deal with individual
firing determinations, not to agency policies.
(e) Once again, the agency is master of its own discretion. No
cognizable standards to constrain agency discretion that ct
could review. Agency is final judge of own conduct
committed to agency discretion.


(f) Note: NDD requires intelligible principle so that provides some

contraint; would never have a nonreviewable RM but could
have nonreviewable delegation of authority given by statute.

Norton v. Southern Utah Wilderness Alliance (Pg. 796)

(a) Here, the Bureau of Land Management, who is charged with
retaining public lands for multiple use, had failed to do
anything about the use of off-road vehicles in protected areas.
Some nature loving folks challenged that inaction.
(b) The APA definition of action includes agency inaction. 706
says the courts should compel agency action unlawfully
withheld or unreasonably delayed.
(c) This opinion says that there is no specific requirement or
obligation here that the agency is failing to live up to. Failure
to act must be specific, discrete, and required by law.
(i) The court seems worried about interfering too much with
the agency.
(ii) There is any number of things that the agency COULD do
to fulfill the statutory obligation. The court doesnt want to
have to review them all and thus become the priority setter.
This could become micromanagement by the court
of agency action. It can happen, like the Detroit water and
sewer stuff.
(d) Note the asymmetry again those who want to drive ORVs
could get judicial review if the agency prohibited ORVs. But
the people who dont want ORVs dont get judicial review and
are stuck with the whole political process thing.
(e) What about Heckler v. Chaney presumption of
nonreviewability of agency inaction? Ct doesnt reach this
issue no reviewable issue under APA here.


Mass v. EPA, again

(a) Why doesnt Norton apply here? This is considered agency
action (responding to petition) there is something to review.
(b) Why doesnt Heckler v. Chaney apply here? That was decision
not to enforce; this is denial of a petition by EPA different
(though EPA says very interfering with agency policy).
(c) Unclear whether other cases will follow reasoning in this case.
(d) EPA could have just sat on petition and then wouldnt have
been reviewable action.


About standing Who is a proper P?




At common law, anyone who had a cause of action had standing.

If you didnt have a cause of action, however, you had no business
bugging the courts.
This doesnt translate so well to the administrative state, where we
arent just dealing with common law private rights of action stuff.
Some considerations
(a) Personal issues who is the litigant?
(i) Someone directly impacted by agency action; loses
property, liberty, something. (Financial interest, directly
regulated, regulatory beneficiaries.)
(ii) Someone who is concerned and want to hold the
government accountable.
(b) Political issues what did Congress intend?
(i) Agency oversight is primarily Congresss job, and maybe
the agencies dont want the courts stepping in.
(ii) On the other hand, maybe Congress wants to enlist the help
of the courts by allowing private citizens to challenge agencies.
Back in the day some pretty bad stuff slipped by because no one
had standing to bring suit. The evolution toward allowing more
suits started with competitor standing.
APA has a basic standard someone can bring a claim if they have
suffered a legal wrong (702) but not really part of modern
standing law (like how 706 isnt part of modern reviewability).
Also, sometimes the statute will say.
(a) Prudential: within the zone of interest of statute (may be
addressed in statute as anyone/any consumer may sue)
(b) Constitutional: even if Congress might want anyone to be able
to sue, Article III provides other limits on who can sue cts of
limited jx.

Prudential Standing

What is prudential standing?

P has to have some connection between the claim and the statute.
You cant imagine that Congress wanted anyone at all to be able to
sue unless they say so.
Congress can say who they want to be able to sue.


Flast v. Cohen (p. 818)

Establishment clause violation; taxpayer standing says any
taxpayer can sue (textbooks to parochial schools)
This case is special limited to facts and constitutional provision
at issue usually, if general interest in agency following the law
that anyone could challenge, ct would leave to the political process


Assn of Data Processing Service Organizations v. Camp (Pg. 821)



The Comptroller decided banks could make data processing

services available to other banks. P, a competitor, challenges.
Does P have standing? (Threshold question.) Court says yes.
(a) Injury there is an actual injury as P is already losing
contracts. This injury in fact test is new (later, cts see as
required under Art. III).
(b) Prudential standing The Court settles on the zone of
interests test. They say Ps injury has to be arguably within
the zone of interests protected by the statute.
(i) This could stem from statutory interpretation and figuring
out who was intended to bring claims.
(ii) Or it could be judicial self-restraint the court just isnt
going to hear every claim from everybody.


Air Courier Conference v. American Postal Workers Union (Pg. 827)

Postal Service is allowed to occasionally suspend its monopoly and
outsource foreign routes to private carriers. Postal workers
No standing. Congress clearly was not thinking of postal workers
jobs when they made this law. (This shows that the court is
looking at Congressional intent, creating a tighter approach than
in Camp).


Natl Credit Union Admin. v. First Natl Bank & Trust Co. (Pg. 828)
FCUA reads common bond of occupation to mean that you can
have a credit union with lots of lawyers instead of just employees
of one employer. Banks challenge.
The statute probably wasnt mean to protect competitors, but to
maintain strong credit unions. But the court still finds enough of a
relationship between the competitors and the statute. Ct looking
for some plausible relationship.
Can we reconcile this with Air Courier?
(a) Employees v. competitors? Maybe the court is more concerned
where it is about preserving market competition?
(b) More Congressional intent in Air Couriers?
(c) There are other statutes to protect postal workers, not so for
(d) No telling, really. Case law is not consistent liberal (arguably
plausible relationship) and conservative (actual purpose and
whether Congress had this group in mind when wrote statute).
Note: Congress can always override prudential standing in
statute (anyone can sue) but cant override constitutional
standing in statute.

Constitutional Standing


So, Congress can say who they want to be able to sue. But there are still
Art III constraints on standing. Case or controversy is the actual language
these are judicially created standards.
Injury in fact: concrete, particularized, imminent, actual
Injury in Fact

Sierra Club v. Morton (Pg. 836)

Disney wanted to build a big ski resort and need licenses for high
voltage cable etc. Dept. of the Interior granted them. Sierra Club
challenges, asks for preliminary injunction.
Sierra Club (regulatory beneficiary) didnt have standing.
(a) Court says that aesthetic and environmental injuries can
constitute injury in fact. They are already pushing the
boundaries, as this injury did not exist at common law.
(b) The org. could bring suit on behalf of an individual, but the
individual must be among those injured. (Hunt: member who
goes to park doesnt have to be part of suit.)
(c) Sierra Club could have pleaded this, but didnt. It was
probably a test case. Abstract interest in seeing agency
enforce the law is not enough for injury-in-fact injury
must be direct and concrete.


U.S. v. SCRAP (Pg. 840)

Some law students sue the ICC for failure to prepare an
environmental impact statement on a railroad rate increase, thus
violating NEPA. They claimed this would lead to more litter in the
parks they enjoyed in Washington, D.C.
The Court says they have standing! Wha?
(a) Well, they claimed a concrete injury to themselves, which the
Sierra Club did not do in Morton. The difference is the real
case and controversy/direct and concrete injury.
(b) So these kids have this tiny little injury, which suffices for a
case and controversy. But their claim is way too attenuated to
go anywhere. Sierra Club, on the other hand, had a solid claim,
but no direct and concrete injury.
(c) Why is it set up this way? Should a lot of hard core interest
trump the tiny injury? If the idea is to only allow enthusiastic
people who will litigate thoroughly, then Sierra Club is a great
This case is seen as an outlier (though still good law). If these
impacts happen to these kids, that means they will happen to
people all over very generalized injury.



Lujan v. Defenders of Wildlife (Pg. 843)

Secretaries of interior and commerce are in charge of protecting
endangered species. Initially they said the Endangered Species Act
applied to U.S. actions in foreign nations, but the revised the
interpretation to be within the U.S. Wildlife lovers challenge.
The statute says any person can sue, and be sued, including the
(a) So sovereign immunity is waived and Congress is enlisting the
courts to help enforce this statute.
No standing.
(a) The Court says the someday plans of the individuals
claiming to be affected dont show an injury in fact. It is just
too speculative and attenuated. Must be imminent.
(i) Theres not really a bright line on this if theyd had plane
tickets? Who knows.
Maybe by any person can sue, Congress meant any person can
sue. But the ct says Congress cant legislate around Art. III.
(a) Ct reads this as generalized right in seeing law enforced, not
automatic standing under Art. III.
(b) Congress can, however, define what an injury in fact is under a
(c) It can also put out a bounty for bringing claims. Win a claim,
get $50. Then something is at stake for the person bringing the
claim; this serves the govt interest in not being defrauded.
Court also says it isnt their job to vindicate the right of the public
that is the job of the executive.
Also distinguishes purely procedural challenges from substantive
(a) Any P with a concrete interest affected can sue if there is a
procedural violation (ie failure to do N&C RM) w/o meeting
all other standing requirements. This is separate from any
substantive claim that they have this claim would still count
even if the correct process didnt change the substantive
decision. It also isnt that they themselves have been denied
process. (See footnote p. 846).


Allen v. Wright (Pg. 851)

Black parents bring a class action against the IRS for failure to
deny tax-exempt statute to private school that discriminate.
They had standing on the claim that their childrens educational
opportunities were diminished, but not on the claim that the fact
that the govt was giving money to schools that discriminated
caused an injury of stigma or denigration in itself.
(a) The Court said that this was indeed a serious injury but that in
order to have standing, the parents would have to have been


denied equal treatment by the discrimination. Otherwise it is

just too abstract and large. Need stigma plus.

Mass v. EPA, last time

Ct allows MA to get standing MA gave up sovereignty (and
ability to reg greenhouse gases) when it joined the union, so court
provides special solicitude
MA worried about floods on beaches, every little bit helps
Look to this case and SCRAP for more leniency on standing, or
Lujan for stricter standing requirements


Summers v. Earth Island Institute (Supp p.120)

P visited parcel of land now subject to timber sale; environmental
group argues for all members in all timber sale areas realistic
likelihood of harm
Ct says no standing attempt to show probabilistic injury isnt
good enough, not adequately particularized
Dissent says realistic likelihood of harm should be enough


Monsanto v. Geertson Seed Farms (Tab S)

Known Ps and known parcels of land, high likelihood that alfalfa
famrms will have land affected
Standing ct finds this sufficiently concrete (fact that farmers
spend money now doesnt make a difference)
Causation and Redressability


Over time, the Supreme Court has added these. Highly factual inquiries.
Causation the injury must be fairly traceable to Ds action.
Redressability winning the suit must be reas likely to redress
your injury. (You have redressability even if some third party
interferes and your injury isnt actually addressed)


Duke Power v. Carolina Environmental Study Group (Pg. 858)

An environmental group and members who lived near a nuclear
power plant challenged an Act that limited liability for such plants,
thus denying them of common law tort remedies. Ps said that but
for this Act, the plants might not be able to afford to be there.
The majority said there was standing, finding injury b/c the lake
was polluted, finding causation b/c of the argument that w/o the
Act the plants couldnt afford to build and operate, and finding
redressability b/c were the Act repealed, maybe the plants would
be driven out of business and stop polluting the lake.
Can assume 3rd parties will respond to economic incentives
Vs. Allen v. Wright (harm to parents too attenuated even though
seems like similar argument schools will stop discriminating if


would otherwise lose tax exemption): maybe economic incentives

just easier to see in this case; ct trying to limit access to the cts.

Bennett v. Spear (Tab T)

The Bureau of Reclamation has to notify the Fish & Wildlife
Service if their plans might impact an endangered species, and the
F&WS prepares a report and recommendations. Here, the F&WS
recommended that these reservoirs be kept at min. levels. The
Bureau said ok. The ranchers challenged, b/c min. levels means
less water for their cows etc.
Court said they have standing. Note that having a third party in
the mix does not mess up the causation analysis the ranchers
claimed injury is still fairly traceable to the report. Can assume 3rd
party will act to limit legal liability, can assume some legally
coercive effect (also goes to redressability assume 3rd party will
act economically rationally to limit liability).


Steel Co. v. Citizens for a Better Environment (Pg. 860)

Note: Heckler v. Chaney hard to compel agencies to take action,
so citizen suits are another option.
Statute requires that companies using toxic substances release
inventory info so the emergency response services can access it.
Citizens found that Steel Co. had never released info and sent a
letter to inform Steel Co. they were going to sue (statute required
notice). Steel Co. filed all the papers before the citizens sued.
Court says no standing. It turned on redressability.
(a) The citizens can claim injuries such as the loss of time and
money of finding the info themselves, increased medical bills,
uninformed decision-making due to lack of info.
(b) This can all be quantified in dollar amounts and the court
focuses on this. It means there is no value in injunctive relief,
and any money would go to the govt. So their injuries couldnt
be redressed, says the court. Token redressability would be
enough, but none here. (Maybe could have argued systematic
failure to comply, so then injunction would provide redress.)
(c) But the citizens probably really wanted the injunction for its
deterrent value. The court doesnt consider this.
(d) Seemed like the end of citizen suits companies could just
wait until notice of citizen suit and comply then, and then
citizens would lose standing. But see next case.


Friends of the Earth v. Laidlaw Environmental Services, Inc. (Pg. 865)

Clean Water Act allows EPA to issue permits limiting discharge of
pollutants. Laidlaw had such permits, but violated them all the
time. Any citizen can bring a suit, but the same 60 day notice
requirement applies as in Steel Co.




Citizens sue Laidlaw, alleging violations of the permit. Court finds

that they have standing.
(a) Here, the Court does the opposite of what they did in Steel Co.
and said that the deterrent value of the civil penalty against
the company would redress the citizens injuries. Ct doesnt
consider case moot once co. comes into compliance.
(b) Steel Co. is still good law (if co. comes into compliance during
60 day notice and before litigation=moot), but this case leaves
open the possibility of maintaining a claim if the company
comes into compliance during litigation. (Compromise on ct.)
(c) OConner says it is about sunk costs if the litigation has
begun, there are sunk costs and if it hasnt, there arent this
isnt really persuasive, and it has nothing to do with Art. III
The Court characterizes the injury as injury to the Ps, not as injury
to the environment.
(a) We know from Scalias dissent that the court below found no
injury to the environment, so how have Ps been injured?
(b) Well, they are no longer doing their recreational stuff maybe
b/c of the fear of pollution? And maybe theyre afraid b/c of
the permit violations? Health risks, etc.

Timing: Finality, Ripeness, Exhaustion


Timing issues
Ripeness issue must be appropriate for review. Prudential,
pragmatic considerations. It may be difficult to examine the scope
of a rule or its consequences before it has been applied. Is it a
good idea for cts to review?
(a) Balancing test effects on courts/agency/plaintiffs. Agency
interest, Ps hardship if made to wait, effect on courts, legal vs.
factual (wait).
(b) Art III is also out there courts can only hear actual cases and
controversies, not abstract questions.
(a) Only final action is reviewable under 704.
(b) Courts ask whether the agency is finished with the issue and if
legal consequences (action w/ status of law) will flow from it.
Not if tentative or action of subordinate official.
(a) Whether all other procedures have been tried whether there is
anything else that must be done before turning to the courts.
Pragmatic and functional concerns.
Ripeness: sometimes ct allows pre-enforcement review, sometimes it does
not! Heckler v. Chaney: must wait until post-enforcement for these issues.



Abbott Labs (revisited)

FDA labeling case.
Was the question ripe? Rule has been issued but no enforcement
drug manufacturers bring a pre-enforcement challenge.
Court says it is ripe.
(a) It is a final decision.
(b) There are purely legal issues (is this about the factual
determinations being made elsewhere? By the time you get to
judicial review you want only legal questions?) delay wont
benefit the courts.
(c) No interference with agency decision-making bc agency done
(d) P is already being impacted have to choose between the
expense of compliance and the risk of penalties for noncompliance.
This regulation is kind of like Heckler v. Chaney the agency
wants to decide this by rulemaking rather than individual
adjudication. Maybe entities want to test it upfront before they
rely on it.


Gardner v. Toilet Goods Assn (Pg. 895)

Final N&C rule said companies had to allow FDA inspectors into
plants or else their certifications would be suspended.
Court says this is NOT ripe for review.
(a) Companies have not yet suffered any injury. They dont
have to make any changes in order to comply. They can only
be injured, if ever, when an FDA inspector shows up.
(b) It also isnt clear when the FDA will use its authority. The rule
just says it may.
(c) Ct will also benefit from waiting until implementation of rule
doesnt understand issues yet.


Natl Automatic Laundry v. Schultz (Pg. 904)

The laundry folk inquired whether coin-op laundry employees
were covered by the Fair Labor Standards Act (overtime
standards). The agency issued a letter saying yes.
(a) Court held that this was ripe for review. The letter was only an
interpretive statement, which implies that maybe the agency
isnt done thinking this over, but it was signed by the agency
head and looks authoritative. Ct looks for indications the
decision is considered and crystallized, has force of law.
(b) Facing an increased risk of enforcement is enough of a
concrete injury for ripeness purposes.

Natl Park Hospitality Assn v. Dept. of Interior (Pg. 909)


(a) The Natl Park Service decided that concessioners contracts

were not covered by the Contract Disputes Act. They decided
this through rulemaking. Concessioners challenge.
(b) The Court says there is no standing. The NPS has no authority
to administer the Contract Disputes Act. Therefore, they have
no power to make a binding rule about what is included. Any
rule they make is only an interpretive statement and has no
binding force of law. Neither is it entitled to deference.
(c) Since it isnt binding whatsoever, the Court says there is no
immediate impact/injury to the concessioners. So, this isnt
ripe until the NPS tries to apply it (like Toilet Goods).
Finality: has agency decision come to natural resting place, and are there
legal consequences?

Franklin v. Massachusetts (Pg. 916)

(a) MA says the census was arbitrary and capricious. The census
is taken by the Secretary to the President, then transmitted by
the President to Congress.
(b) The Court says no standing. The census report is not final
agency action, because the President still has to transmit it to
Congress. The President is not an agency, so the transmittal
cant be reviewed. So, there is no way ever to review the
census unless Congress changes the statute.
(i) Note that the President never changes the census or
anything, it is a formal, rubber stamp requirement. But maybe
the Court thinks this is a political question and is avoiding it.

Waiver and Exhaution

Exhaustion refers to the question of whether a claimant has gone through
all other available procedures/done what is necessary to preserve a claim.
Waiver is the question of whether the agency should have done more and
has waived the claimants need to exhaust all remedies as a result.

Myers v. Bethlehem Shipping Corp. (Pg. 917)

NLRB held a hearing on a claim it filed against an employer. The
employer filed suit in District Court to enjoin the NLRB from
hearing the claim.
Court said District court didnt have power to enjoin this.
(a) Congress set up the administrative remedy and the employer
couldnt bypass it. Congressional intent, types of issues
(b) Variant: interlocutory review functional doctrine:
(i) [So, preliminary injunctions. In agency context, hardship
to plaintiff, effect on agency, jurisdictional authority.]



(ii) If party allowed to take up issues individually, too much

interference w proceedings before agencies; but might be times
when judicial review seems appropriate.
So, the employer hadnt exhausted all its remedies.


Mathews v. Eldridge (p. 922)

DP case (Goldberg v. Kelly); collateral review case review
inadequate allowed to bring up issues for review even though
some issues still before agency. Agency can waive its procedures
by not objecting to ct review, or ct may insist on waiver over an
agencys objection (create exception).


Bowen v. City of New York (Pg. 923)

Challenge to the SSA definition of mental illness.
The SSA proceeding was not complete, but the court heard this
issue anyway. The definition was fixed, the SSA wasnt going to
change its mind about it, so it was ripe.
The Court decided that the agency would have to waive exhaustion
on this one because the question was collateral to the claims, not
integral, and because of the hardship to claimants.


Woodford v. NGO (Supp 125)

Exhaustion is a creature of statute Congress can specify what
procedures have to be exhausted before judicial review by statute.
Ct looks to what statute provides and using pragmatic
considerations to determine when conditions exist and what they
should consist of.
This case is about constraints on prison condition filings cant
bring to ct until admin remedies exhausted. P waited past admin
deadline to file and now wants to file in court instead.
(a) Ct looks at likely intent of the statute want to encourage
prisoners to admin proceedings, avoid ct interference w agency
(b) No exhaustion here.

V) Congressional Control of Agency Action

What is Congress interested in?
Agency compliance with statutes, problems of implementation.
Protecting individual rights.
Ensuring agencies prioritize property, pay attention to appropriate
concerns, and enforce the right policies.
General issues of agency function, efficiency, accountability, structure,
management, aggrandizement.
Limiting Presidents powers. Political accountability, removal powers.
Restricted removal for heads of independent agencies (neglect, malfeasance,


inefficiency) makes it seem like Congress has more control bc President has less
control. Exec agencies heads removable at will.
Myers v. U.S. (p. 81): Congress passed statute saying cant remove
postmaster w/o Congressional consent; President Wilson fires OR
postmaster; Congress points to statute; ct says no way
postmasters job is executive so cant make removal of exec.
officer subject to Congressional approval.
Humphreys Executor (p. 81): FDR tries to remove and put own
guy in; ct upholds removal restriction, characterizes job of FTC as
quasi-leg and quasi-judicial (so not wholly exec in nature) ct
doesnt say whether Congress could limit removal powers of only
exec functions.
Bowsher v. Synar (p. 91): Congress passed statute saying
Congressional participation necessary before Comptroller General
can be removed; ct says function is executive so Congress must
leave alone. Formalistic approach to sep. of powers. Direct
Congressional involvement in workings of exec branch is not
Morrison v. Olson (p. 98): appointment of Independent Counsel by
panel of DC Circuit judges; removal only for good cause.
Investigating and prosecuting seem like executive but ct says
restrictions (good cause removal) do not unduly impede the Pres.
Metro Washington Airports Auth. v. Citizens for the Abatement of
Airport Noise (p. 98): not about removal Congressmen on review
board for airport oversight. Ct is formalistic: if exec function,
Congress acting exec, so not ok; if leg function, cant do without
bicameralism and presentment, so not ok. Either way, no good ct
concerned with Congressional aggrandizement.
PCAOB case (Tab U): board created after Arthur Andersons
flawed audits of Enron, within SEC adjudicatory, RM, invest and
enforcement. Assume for cause removal if not stated. Ct says
two layers of insulation from firing is too much PCAOB clearly
exercises executive authority, and ct is concerned with limitations
on Press power.

What methods are available to Congress?

(a) Congress can make an authorizing statute very specific or can
impose procedural requirements in an effort to ensure good
decision making.
INS v. Chadha (Pg. 83)
(a) Here Congress tried to retain the power to veto agency action
(legislative veto). Court said no this violated the presentment
and bicameralism requirements of the Constitution.



(b) Court says that once Congress has delegated, it can only limit
the authority by further legislation. Formalistic. (But
agencies make binding laws that dont go through presentment
and bicameralism )
There are alternative to retaining veto power.
(a) Sunset statutes a statute expires and Congress has to reenact it.
(b) Report and wait requirements agencies report to Congress,
have to wait 60 days, during which Congress can think it over
and pass negating statutes if it likes.
(c) Congressional Review Act (part of Newt Gingrichs Contract
with America only used once for ergonomics rule)
(i) Streamlines Senate procedures for overturning legislation.
Bars filibuster, pushes stuff out of committee.
(ii) Still subject to presidential veto, so if there is a president in
office who supports the agency, this wont work.
(d) Budget legislation and appropriations
(i) Budget legislation is different than other legislation the
appropriations committee has no overlap with the substantive
areas of legislation.
(ii) Often appropriations bills include riders. For example,
one rider said that OSHA wouldnt spend any money on the
ergonomics stuff.
Riders are disfavored. Theyre small, hard to spot,
and can be snuck into a bill or tied up with stuff a president
cant veto w/o great political cost.
(iv)Also, agencies might rush rules through before the
president signs an appropriation bill, and then they can only be
undone w/ the same procedure.
(e) Other procedural requirements written into statutes: require
agency to consult, require certain analysis, require formal
instead of informal RM, make subject to judicial review, etc.
(f) Cross-cutting fed statutes to improve agency function across
the board: disclosure requirements (Freedom of Information
Act, Fed Advisory Committees Act, eGovernment), ethics
requirements, internal investigations.
Oversight Committee hearings to make agencies explain
(a) Oversight committee is a standing Senate committee.
(b) Of course, this is flawed, as Senators do everything in light of
(c) Oversight can also be exercised just by sending a letter to the
agency and saying, Hey, my constituents are worried about x.
(Dingelgrams.) A response is required, which takes time away
from the agencys work.






(d) Oversight hearings dont have an immediate impact on the law.

But they encourage better decision-making, as agency officials
know they will have to explain themselves.
Pressure Direct pressure to make the right decision.
Are such means appropriate? Can Congress just say, Hey, wed
like you to stop spending money on this?
(a) This is kind of like de facto amending the statute. So shouldnt
they do that w/ process?
(b) Maybe this is the way political accountability works. Current
Congress has different priorities/ concerns than the old.
Two main views of the appropriateness of informal means:
(a) Congress exists to make laws, and if it cant muster enough
votes, then too bad.
(b) Congress is the democratically elected branch and knows about
public opinion, so certainly they may informally express that to
Volpe (Tab V)
(a) Sen. Natcher was pushing really hard for this bridge to get built
(which it never did).
(b) Court said that if the Secretary based his decision at all on Sen.
Natchers hostage-holding/pressuring, that the decision would
be arbitrary and capricious. It is remanded to the Secretary.
(c) This is informal adjudication. So there were no procedures to
be followed. So why do we care? Maybe Congress would
have prescribed procedures if theyd cared.
(d) But the Court goes another direction, developing the meaning
of arbitrary and capricious by reading the statute narrowly to
allow the consideration of ONLY the factors specified in the
Sierra Club v. Costle (Tab V)
(a) Sierra Club is claiming that the EPA would have adopted a
more stringent rule but for the improper pressures from outside.
They allege violations under the APA and the CAA.
(b) The court finds no prohibition of ex parte contacts anywhere,
and it goes into some analysis of the usefulness of such
(c) The only requirements regarding such contacts are that they be
put in the docket, which they were (the written ones, at least).
(d) The court is concerned w/ the meetings with Sen. Byrd. They
say that it was ok, that they were just discussions on the merits,
which are fine.
(e) Note: ct wont add new procedural requirements (Vermont


(f) Also note: agency can talk to anyone re: informal RM and
adjudication; if formal ex parte requirements, insular
decisionmaker, etc. arb+cap review (no subst evid review).

Executive Control of Agency Action

It is the job of the executive branch to oversee executive agencies. Two
Let the agency head run with it.
Try to control and coordinated them.
Presidents since Nixon have done the 2nd option.
Executive Orders and directives
1st executive order on the subject was from Reagan and set up a
framework for presidential control.
The president gets to pick the administrator, who he can fire at
What if the president wants to go further than the agency? That
depends a president cant order an agency to violate a law.
When does presidential influence become presidential control?
(a) Cannot assign stuff to other agencies.
(b) Note that exec. orders are not enforceable in court; if they
were, that would make them laws, and the president isnt
allowed to make laws.
(c) So the only real influence he has is over the agency head, who
he can fire.
(d) But there is political cost to firing LOTS of agency heads.
The other formal means of control the president has is to ask for
opinions in writing.
Other means of control
Informal pressure calls from the White House. Is this appropriate?
Well, Chevron gives agencies multiple legitimate options. Maybe
the presidents influence only affects the choice between legitimate
options anyway.
Probably couldnt get away with saying, You, agency head. Write
the regulation, Ill sign it myself. Authorizing statutes often
delegate not to the president but to agencies.
Maybe it is more subtle everyone knows there was presidential
influence, but the agency doesnt say so. Is this ok? Who knows.
But remember the thing about agencies is that they are politically
accountable. But only because of presidential oversight.
Then there is the OMB, which is an agency supervising agencies. It was
brought into being through executive orders. W/in OMB is Office of Information
and Regulatory Affairs (OIRA) responsible for regulatory review.




Agency rules have to be approved by the OMB. Also, these orders

require agencies to consider costs. Which is a problem if the
statute says the agency cant consider costs.
(a) Agencies may consider costs, but not mention that
consideration in the record which is fishy. If agency can
articulate decision w/o ref to cost, ok if still had to do costbenefit analysis for OIRA review.
(b) Executive orders are careful to state that they dont create a
cause of action. But the additional reporting requirements can
lead to a lot more challenges.
End of term action Midnight Rulemaking
Lame duck presidents try to push through lots of rules before they
leave office. Then the new administration has to go through a lot
of trouble to get rid of them.
Political accountability problems Pres. is out the door.
One thing about this is that it can be used merely to force the new
administration to think about something it wouldnt otherwise.