Admin Outline Pierce Fall 2012

Admin Outline—Pierce—Fall 2012

AGENCY
An agency is an entity that has "substantial independent authority" MUST be able to adjudicate disputes and/or issue rules
A variety of support functions are not enough!
Types of Agencies
Executive Agencies: Cabinet agencies  sub agencies within each Cabinet, headed by a single Secretary
Agencies with administrators who only work for the President / appointed and removed by
Hybrid Agencies: like a commission
Free-standing agencies (like the FTC, SEC)
Independent agencies headed by commissions / multi-member bodies (odd number of people, terms are staggered)  insulated from political pressure and control
Courts largely ignore definition in APA
President is not an agency [Franklin v. Massachusetts]
Agency’s job is to provide support services operational and administrative in nature – [CREW Case]
Agencies are inferior to Congress, President and Courts
Agency power is drawn from the three branches of government
With President’s signature/acquiescence, Congress enacts legislation that assigns an agency responsibility and thus some authority and discretion, to administer a statute by enforcing its reqs and/or pursuing its goals
Congress can enact legislation imposing procedural hurdles that agencies must surmount before they can act
Presidents have control in that they can appoint officials (with advice and consent of Senate) and push agendas
Quasi Functions of Agencies
Judicial: closed and politically neutral
Legislative: open and intensely political
ADMINISTRATIVE PROCEDURE ACT
To determine which procedure to use: Agency’s rules (sometimes not clear or consistent with statute)  Agency statute (conjunction with APA)  Due Process Clause (history, tradition, balancing of interests, natural rights)
A general statute that applies to most federal ad law decisions
History of the Law
FDR brings about the New Deal / increased power of government through agencies (“unregulated market forces produced a mess, so need more government regulation”)
Liberal dems – people who believed FDR was right and gave government lots of power / agency discretion
Conservative repubs – rallied against FDR, called for safeguards, elaborate decision making procedures for agencies, their power has to be subject to judicial review
Judicial Review is covered in Sections 701-706
§701: apply UNLESS statute precludes it or action is committed to agency discretion by law
§704: actions are reviewable if made reviewable by statute or final agency action for which there is no adequate court remedy
§706: Courts can strike down agency action that’s a&c, abuse of discretion, not in accordance with law, contrary to constitutional rights, in excess of statutory jurisdiction, w/o proper procedure, unsupported by substantial evidence (formal) or unwarranted by facts (de novo review)
Procedures covered in Sections 551-559
Formal Adjudication: 554-557
Trial like proceedings
ONLY required if statute says “on the record only after opportunity for hearing”
Informal Adjudication: 555
MAJORITY of decisions
Use whenever statute authorizes adjudication without issuing magic words
A lot of discretion for the agency
Informal Rulemaking: 553 (3 step notice + comment)
Publication of notice of proposed rulemaking
Solicitation and consideration of industry/expert comments
Issuance of final rule accompanied by rationale reasons
Formal Rulemaking: 553, 556-557
4 step process: Notice, comment, issuance of final rule, AND oral evidentiary hearing subject to cross examination
Must be read in conjunction with statute that authorizes agency action for the issue (organic act)
DUE PROCESS
Adjudication and Agencies
Remember: Most agencies adjudicate far more cases than all courts combined, vary in their complexity, formality and scope
Due Process
5th amendment: no person shall be deprived of life, liberty, or property without due process of law
Influences agency procedures in indirect ways
Congress chooses the procedure it requires an agency to use to resolve a class of adjudications influenced by its beliefs with respect to the due process requirements
Congress often leaves an agency considerable discretion to choose the procedures it will use to resolve a class of adjudications
When does Due Process Apply?
Act in question must deprive individual of life, liberty or property
ONLY APPLIES TO ADJUDICATION NOT RULEMAKING
Adjudication affects individuals, rulemaking affects groups
Assessment of tax for the cost of paving a street on lands abutted to P, owed notice+ oral hearing [Londoner v. Denver]
Where a rule of conduct applies to more than a few people, it is impracticable that everyone should have a direct voice in its adoption [Bi-Metallic Investment Co v. State Board of Equalization]
Policy reasons:
Due process does not require the gov’t to provide a hearing before it takes action that adversely affects a class of individuals
Not pragmatic, prohibitively expensive to have hearings for all
Only refuge for an individual singled out for adverse treatment is the judicial process, large groups protected by legislature
Analysis
Is this adjudication?
Look to the nature of the facts
Are they historical facts unique to an individual aka adjudicative facts?
Or are they legislative facts that help a govt institution decide questions of law, policy and discretion
Does the action deprive of life, liberty, or property?
Life-Probably never deprived
Liberty
Freedom from Incarceration
Freedom from Official Stigmatization with Deprivation of Tangible Interest
Constantineau:
P’s name on list of drunks, prevented from buying
Paul v. Davis:
Stigma + TEST: when the stigmatization is coupled with deprivation of something tangible (like buying alcohol, untenured job)
In this case, list of shoplifters sent to stores was not enough
Freedom from suffering adverse consequences as a result of exercising a constitutional right
Roth:
Cannot be punished for exercising liberty interest in free speech
But if you’re fired in a way that doesn’t hurt your reputation – no protected interest
Applies in government employment cases where employees are fired for religious beliefs even if they’re “at will.”
Property
Is there a statutorily conferred benefit on a class of persons (LOOK FOR THE WORDS ENTITLEMENT) or a job that only allows firing for cause?
Golberg v. Kelly: statute confers an entitlement to AFDC benefits
State common law property Interest
Real property interest
Is there a contract?
Bd of Regents v. Roth; Perry v. Sinderman (1972):
Government jobs
Was there a mere unilateral expectation? (Roth) Then no property interest
if K says we will not fire you unless we have a good reason, i.e. in faculty guide-->justified expectation-->property interest (Sinderman)
Highly unlikely that they meant to include contract rights into property rights that could be deprived without a hearing
Loudermill (1985)
Ohio statutes say you’re not entitled to pre-firing hearings, but can have a post-firing hearing. Court said that’s inadequate, must be some kind of pre-firing hearing, even if written or informal coupled with post termination admin procedures in statute
8 justices talk about procedures to which someone is entitled is in the Court’s purview, not legislatures
Rehnquist alone in writing dissent staying with bitter+sweet
No deprivation of liberty interest in this case
What processis due the person?
***remember, the gov’t can deny these things from citizens but has to put in safeguards
Apply Mathews v. Eldridge Factors
Facts: guy deprived of SSI
THREE PART BALANCING TEST:
Importance of the interest at stake (governmental and private)
State interest can’t be monetary value, not objective amounts in cost comparisons
It’s a subjective inquiry – based on the values of the decision maker
Risk of error and incremental value of added procedures and cost of added procedures
Written medical reports “reliably” describe condition
Government interest in promoting efficiency
Administrative costs and financial burden
[hard to apply and hard to predict]
Why distinguish from Goldberg?
Disability beneficiaries have less need (What about degrees of disabled)
Doctors have a ability better to communicate in writing
Issues in disability cases are more objective in nature
Courts were applying Goldberg to require oral hearings in many contexts  many agencies complained about the cost of compliance
Due process requires that recipients of a contingent statutory entitlement to anything have a pre-termination of benefits hearing [Goldberg v. Kelly]
Have to weigh recipients(means to live by) interest with the gov't interest in summary adjudication
Doesn’t have to be a quasi judicial trial, just the basic procedural safeguards:
Opp to be heard, timely and adequatenotice, opportunity to defend by confronting adverse witnessand presenting own arguments
Dissent: entitlements are a privilege NOT a right
Face-to-face sit down satisfies due process (Goss v. Lopez student suspension case)
OR Just Pass the Trash
To avoid awarding due process, fire someone before they receive tenure but without specifying the reason, i.e. abusing kids
If you have a pre term hearing, they’ll have tenure by the time you’re done
If you fire for sexually abusing kids then stigma + (liberty interest revoked)
Pass the trash, fire the guy and when someone calls for a reference you don’t say the real reason
Bitter with the Sweet (Rehnquist)
If an individual relies on a statute as the basis for the right that is protected by due process, he must take the bitter with the sweet, i.e. he must accept the procedural contours of the right along with the substantive contours of the right
Arnett v. Kennedy (plurality), Bishop v. Wood (majority), embraced by circuit courts until Loudermill
What process is due to a US Citizen held on US soil as an enemy combatant [Hamdi v. Rumsfeld]
Balance of private and gov’t interest: We hold that although Congress authorized the detention of combatants in the narrow circumstances alleged here, due process demands that a citizen held in the US as an enemy combatant be given a meaningful opp to contest the factual basis for that detention before a neutral decision-maker + hearsay and presumption for US
5 – Justices dissenting – 4 would require more, 1 would require less
Statutes as a Source of Procedural Requirements
Statutes often require agencies to use decision making procedures greater than or at least different from the procedures required by due process
Note: If an agency adopts procedural rules that exceed those required by statute or by due process, the agency is required to follow its own rules to the extent that the confer important procedural rights on parties
APA
Formal Adjudication
Section 554-8 of the APA describe the procedures that are potentially required in adjudications
Formal adjudications look like court trial: ALJ, oral evidentiary, writes opinion including findings of fact and conclusions of law
ALJs are independent of agencies, no control over them
Formal adjudication procedures kick in with the words "on the record after opp for an agency hearing"
What is a hearing?
Chevron v. Natural Resources Defense Council Inc:
Said that the use of the phrase public hearing did not trigger formal adjudication procedures
The word “hearing” is ambiguous, and agency’s interpretation was reasonable (highly deferential)
Dominion Energy Brayto Point v. Johnson
OK for EPA to deny Ps request for a formal evidentiary hearing after issuing a proposed final National Pollution Discharge Elimination System permit
EPA took the time to investigate and adopt a final rule that hearings don't have to be evidentiary which is why they denied Ps request
Deference to this reasonable interpretation
Informal Adjudication
No magic words, free to use informal adjudication (US v. Florida East Coast RR Co)
The requirement of a “hearing” does not require the ICC to hear oral testimony, to permit cross exam or hear oral argument
This was technically a rulemaking but since Chevron no court has held that a “hearing” required formal adjudication
Citizens to Preserve Overton Park v. Volpe:
Formal findings were not required, but we do not believe that in this case judicial review is based solely on litigation affidavits was adequate since don’t constitute whole record
Pension Benefit Guaranty Corp v. LTV Corp
If due process is not implicated, and organic act does not require further procedures, then only need to follow APA
Informal process usually includes
Notice of issues presented
Opp to present arguments in either oral or written form
Decision of a neutral decision maker
Statement of reasons for decision
If the decision is later reviewed by a court and they need further information to determine if A and C, they will ask decision maker for a further statement of reasons
SEPARATION OF POWERS
Due Process requires a neutral decision maker, free of impermissible bias
Judicial Models
Separation of Functions
Admin agencies often possess and exercise both the power to enforce the law and the authority to adjudicate
APA says neutral decision maker=segregating the investigative and prosecutorial function from that of the decision maker
APA 554d Prohibits employees serving as adjudicators from performing investigative or prosecutorial functions and vice versa
Agency individual can make preliminary decisions and final decision in adjudication [Withrow v. Larkin]
Potential biases are relational, pecuniary
The more attenuated the more likely they are allowed
Viewpoints should never be the basis for a disqualification
Laird v. Tatum – people wanted Justice Rehnquist to recuse himself from one case that he had background on
Any Justice that knows something would get recused from case with expertise
But seeWard– mayor of a small town that gets half their revenue from speeding tickets, decisions of guilt or innocence were made by mayor of city – court said no
Adjudicators must proceed in an impartial manner
Only applies to formal adjudications, and APA says that agency can substitute its opinion for that on an ALJ (557(b) and Supreme Court in Universal Camera)
When an agency replaces its opinion for that of an ALJ, the reviewing court can look at the WHOLE RECORD, including what was rejected by the agency (Universal Camera)
Split Enforcement Model
Alternative to the APA model is the split-enforcement model, dividing responsibility for investigation and enforcement from adjudication
IE OSHA for rules and OSHRC for adjudications; same for mine safety
Most often used
Judicial Model Versus the Bureaucratic Model
Judicial Model
Constitution designed to insulate federal judges from external pressure, same for APA and ALJs
But independent judicial minds can lead to deciding case in different manners--> led to enormous disparities in results
Agencies are allowed to improve quality and efficiency of the work of ALJs (Nash v. Bowen) [peer review, monthly production goals, quality assurance system to lower backlog]
Bureaucratic Model
Other countries use a system with greater accuracy, consistency and efficiency where decisions are made by teams who are organized hierarchically and who are instructed to apply objective, verifiable criteria which are constantly reevaluated
Adjudication process
Appt ALJ randomly from those available
Set up the case in the same way
Briefing schedule
Come out with his findings
Agency can then adopt the findings of the ALJ as their own (rare)
Other times they say that they think the ALJ got it wrong, and will explain with reference to record evidence why we have our findings instead of his (more common)
Supreme Court opinion on this issue
Ct must uphold if supported by such relevant evidence as a reasonable mind might accept as adequate to support a conclusion (Consolidated Edison-highly deferential standard) considering both the evidence that supports the finding and the evidence that detracts from the finding
Substantial evidence applies to formal adjudication, arbitrary and capricious applies to informal adjudication (ADP v. Board of Governors)
Formal Adjudication decisions must be based on SUBSTANTIAL EVIDENCE
Hearsay is not substantial evidence
Finding contrary to un-contradicted testimony is not usually supported by substantial evidence
Evidence that is slight or sketchy in an absolute sense is not sub evid
Slight in relation to much stronger contrary evid is not sub evid
ALJs finding contrary to an agency finding can lead a court to think agencys decision is not sub evid
Dissenting opinions by members of an agency
Engaged in a consistent pattern of crediting the agency's witnesses and discrediting opposing witnesses
Written medical reports by independent experts is substantial, even though its hearsay (Richardson v. Perales)
Informal decisions ARB and CAPRICIOUS applies
Agency must engage in reasoned decision making
How did you reason from this finding to this piece of evidence...etc
Agency must explain departures from precedent (Yang and Fox)
Mass justice agencies do not have precedent, ie SSA there are too many of them
But in other agencies there are precedents
You can say we are applying this precedent, but if you are not you have to explain why!
Note: When they findings of the agency and ALJ differ, there is a higher chance of reversal
The court is supposed to considered the findings of the ALJ as well
RULEMAKING
Types of Rule:
Legislative AKA substantive rules
Same legally binding effect as statutes
Congressional authorization necessary before an agency may promulgate rules
Nonlegislative: interpretative rules, procedural rules, and policy statements
APA calls them inter. rules, general statements of policy, or rules of agency organization, procedure, or practice
Not legally enforceable against the public, many bind agency employees
Overall Rulemaking
If an agency has the power to issue rules, and the rules are not ‘required by statute to be made on the record after opportunity for agency hearing,’ the agency must:
Issue a notice of proposed rulemaking in which it describes the proposed rules
553 literal language doesn’t require much in the notice, just issues to be addressed (courts have added more)
statement of time, please and nature of proceedings (200-600 pages)
Solicit, receive, and consider comments from the public re: the proposed rules (1000 to 1 million pages)
And incorporate in the final rules a ‘concise general statement of their basis and purpose’
Hearings ALWAYS can be satisfied by a written exchange of views
Unless a statute says something to the contrary or has the magic words
Publish final rule no later than 30 days before its effective dat
allow a right to petition
Agency Power to Issue Rules
Most statutes make it clear that an agency shall or may issue rules to accomplish a particular, statutorily-identified purpose
Other statutory delegations are more general, providing only that an agency may promulgate rules as necessary to effectuate the statute's provisions
Occasionally a court has to decide whether an agency has the power to adopt leg rules in the context of a statute not clear on the issue
National Petroleum Refiners Assn v. FTC: statute says that the Commission can prevent persons, partnerships, or corporations from using unfair methods of competition and may make rules and regs for the purpose of carrying out these provisions
Note: Congress later passed the FTC improvement act which confirmed right of FTC to make leg rules + added so many procedures that it abandoned efforts
Scholars say that court should only say agency has the rule to issue leg rules when it statute authorizes a court to penalize a party for violating the agency's rule