Fall 2012 / Textbook: Cass, Administrative Law (6Th Ed. 2011

Admin Law Outline

(Fall 2012 / Textbook: Cass, Administrative Law (6th ed. 2011))

Accountability to Congress
Non-Delegation Doctrine
Standard: has Congress created an “intelligible principle” to guide the executive in his execution of the law?
Why are we concerned about delegation of legislative power?
We want to maintain separation of powers
We want laws to be enacted by people we elect, not field of independent experts
We want Congress to write statutes with sufficient specificity so that people will know if what they are doing is illegal
To allow for judicial review, court has to know whether someone is complying with regulations or not, and court can only do so if it’s clear what the regulations are

Constitutional delegations / Unconstitutional delegations
J.W. Hampton Jr. & Co. v. United States (1928)
Facts: Congress passed Tariff Act of 1922 giving the President the authority to revise certain tariff duties whenever he determined revision to be necessary to “equalize the costs of production in the United States and the principal competing country.”
Held: Tariff Act of 1922 is constitutional. Congress had delineated an “intelligible principle” for the President to follow. Moreover, the determination delegated seemed so complex as to defy legislators’ competence. / Schechter Poultry (US 1935)
Facts: Congress passed National Industry Recovery Act (NIRA), as a result of which industry and trade organizations were permitted to set standards governing their industry or trade. The President would then approve the code as long as: (1) the association who created the codes “impose[d] no inequitable restrictions on admission to membership therein and [were] truly representative,” and (2) the code was not designed to “promote monopolies or to eliminate or oppress small enterprises and [would] not operate to discriminate against them, and [would] tend to effectuate the policy” of the Act.
Held: NIRA violates non-delegation doctrine. The Act delegated rule-making power to private groups, and “[s]uch a delegation of legislative power is unknown to our law and is utterly inconsistent with the constitutional prerogatives and duties of Congress.” The “representativeness” and “antimonopoly” provisions provided only minor restraints on the consent or scope of codes, leaving the proponents of a code to “roam at will” and the President to “approve or disapprove their proposals as he may see fit.”
Whitman v American Trucking (2001)
Facts: Clean Air Act. Congress gave EPA power to determine exposure levels for certain pollutants. The EPA was supposed to set the level at a number that was “requisite to protect the public health.” EPA set exposure level for ozone at 0.08 ppm over an eight hour period.
Held: Statute has “intelligible principle.”
Interstate Commerce Commission Act of 1887
Interstate Commerce Commission to set "just and reasonable rates" for railway transport. Held constitutional.
Federal Trade Commission Act
Congress directed the agency to regulate "unfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce." Held to be constitutional delegation.
Federal Communications Commission Act
Commission was to allocate frequencies “as public convenience, interest, or necessity requires.” Held constitutional.

The Legislative Veto
Legislative veto = opposite of non-delegation doctrine (Congress is trying to retain power rather than give it away)
INS v Chadha (1983)The legislative veto is an unconstitutional retention of congressional authority.
Facts: Chadha is British citizen of Kenyan origin who overstays his visa in the US. INS Administrative Law Judge orders his deportation suspended. This suspension is transmitted to Congress. House uses legislative veto power written into the Act to override ALJ’s finding and order Chadha deported.
Held: Legislative veto is unconstitutional.
Burger majority / formalist opinion:
When Congress legislates, it must do so through bicameralism and presentment.
The House, when vetoing suspension of deportation, took legislative action.
Legislative action = action that has “the purpose and effect of altering the legal rights, duties and relations of persons . . . outside of the legislative branch”
Therefore, Congress violated the Constitution by allowing House to enact legislation without complying with bicameralism and presentment requirements.
White dissent / functionalist opinion:
White’s position is that Congress is not taking legislative action when it invokes the legislative veto and therefore does not need to comport with the requirements of bicameralism and presentment. This is not legislative action; rather, it’s a convenient mechanism to facilitate the functioning of modern government.
Powell concurrence:
Legislative veto is unconstitutional because House was making adjudicatory determination. This is a narrower grounds for finding the Act unconstitutional and would preserve the legislative veto in other instances.
Other Means of Control
Appropriations
Legislative Oversight

Accountability to the President
Appointments: the constitutionality of an appointment provisions turns on whether the officer being appointed is a principal officer or an inferior officer.
If principal officers  must be nominated by President and then appointed by President with the advice and consent of the Senate. Art. II, Section 2.
If inferior officer Congress can vest appointment power in President, heads of department, or courts of law
How do you tell if person is inferior office or principal officer?
Edmond v. United States(US 1997) factor:
Whether the officer has a superior. Inferior officers are officers whose work is directed and supervised at some level by other officers appointed by the President with the Senate’s consent.
In Free Enterprise Fund v. Public Company Accounting Oversight Board (US 2010), the court quoted Edmond v. United States in assessing whether the appointment of the officials who headed the Public Company Accounting Oversight Board, which was not done by the President with the advice and consent of the Senate, was constitutional. Applying that standard, the Court in Free Enterprise Fund held that the members of the Board are not principal officers; they are inferior officers. The Board’s work is overseen by the SEC Commissioners, who are appointed by the President with the Senate’s consent. For example, the Board’s rules and its imposition of sanctions on accounting firms are subject to approval and alteration by the SEC. Moreover, members of the Board are removable “at will” by the SEC Commissioners. In other words, the Board members were held to be inferior officers because they have, for their superiors, officers who were appointed by the President with the Senate’s consent.
Morrison v. Olson(US 1988) factors:
Whether the officer can be removed by a high executive branch official
Whether the officer has only certain, limited duties
Whether the office is limited in jurisdiction
Whether the office is limited in tenure
In Morrison v. Olson, the statute at issue was one that authorized “independent counsels” to investigate and prosecute crimes by high-level federal officials. Under the statute, an independent counsel was not appointed by the President with the advice and consent of the Senate. Instead, she was appointed by a panel of three federal judges. The case arose when the target of an investigation by Independent Counsel Alexia Morrison challenged the method of Morrison’s appointment on the ground that she was a principal officer and, as such, could be appointed only the President with the consent of the Senate. The Court in Morrison rejected that argument, holding that independent counsels were inferior officers. In so holding, the court assessed four factors. First, independent counsels could be removed (though only for good cause) by a higher executive branch official, i.e. the Attorney General. Second, independent counsels had only certain, limited duties: namely, those of investigation and prosecution. Third, their offices were limited in jurisdiction, reaching only certain serious federal crimes by certain high-level federal officials. Finally, their offices were limited in tenure; once a particular investigation and any related prosecutions were finished, the independent counsel’s office ended. In sum, the Court classified independent counsels as inferior officers based on the nature and scope of their duties and the fact that they were removable by a high executive level official.
If employee Constitution doesn’t say anything about how they should be appointed. Any body independent of the above, but not Congress, can do the appointing (e.g. Civil Service Commission).
How do you tell if it’s an employee?
The test is whether the tasks are established by law, are significant, the discretion that’s exercised is significant, and the individual can exercise independent, final authority. If that is the case, the person is shunted up to “officer” land. Freytag v. Commissioner of Internal Revenue.
Selection of “employees” can be done by exam.
Bulk of the civil service would fall under employee category
Removal
Congress may restrict President’s power to remove an executive officer at will (power established in Myers) as long as . . .
There’s no direct Congressional involvement in removal; Congress itself can’t be doing the removing. Bowsher. In Bowsher v. Synar, the Court held that the Comptroller General’s exercise of executive authority, in recommending budget cuts to the President in accordance with the Gramm-Rudman-Hollings Act, was unconstitutional because the Comptroller General was removable by Congress for reasons of inefficiency, neglect, or good cause. Congress was therefore exercising influence over the executive branch.
The restrictions on removal do not “impede the President’s ability to perform his constitutional duty.” Morrison v. Olson. In order to determine whether the removal restrictions impede the President, the court must look to whether the officer whose removal procedure is at issue performs a core executive function. If so, then the restrictions are more likely to be held unconstitutional. On the other hand, if the officer is not performing core executive functions, then the removal provisions are more likely to be upheld.Morrison v. Olson is one such case where the removal restrictions were found to be constitutional. There, the Attorney General could only remove the independent counsel “for good cause.” The Court upheld this statutory “for cause” restriction on the Executive’s removal power because the restriction did not impede the President’s ability to perform his duties. The Court based its determination on the facts that the independent counsel was “an inferior officer . . . , with limited jurisdiction and tenure and lacking policymaking or significant administrative authority.”The authority that the independent counsel did possess was restricted “primarily to investigation and, if appropriate, prosecution of certain federal crimes.” The independent counsel did not have the authority to formulate policy for the government or the authority to conduct any administrative duties outside of those necessary to operate her office.
In a case after Morrison, the Court addressed whether Congress can give an executive officer multiple layers of protection from removal. The court said no, in Free Enterprise Fund. Under the Sarbanes-Oxley Act, which created the Public Company Accounting Oversight Board, members of the Board could be removed by the SEC only for good cause. The SEC Commissioners, in turn, were themselves subject to removal by the President only for good cause. The Board members thus enjoyed “two layers of good-cause tenure.” The Court held that the limitations prevented the President from holding members of the Board accountable for their actions, thereby violating separation of powers principles. The restrictions hampered the President’s ability to carry out his or her duty to take care that the laws are faithfully executed.
Solutions for remedying faulty appointment/removal provisions
Appointments
If principal officer is being appointed improperly:
Make it so that appointment is done by President with advice and consent of the Senate
Make the position more like an inferior officer
Limit the powers of the office so that they are solely advisory. Then the person would not be an officer at all.
Removal
If restrictions are not constitutional  provision must be amended so that removal can be done at will
If restrictions are constitutional  then they may be upheld
Analysis to figure out whether executive orders are constitutional. Youngstown (Jackson concurrence).
If Congress has delegated authority to act, then the President is not acting only with his own authority but with the authority delegated by Congress. This is where President’s powers are at their highest ebb.
Example when President conducts a cost-benefit analysis of legislation proposed by Congress.
Where Congress hasn’t specifically legislated, and the President acts, the President relies on his independent powers as well as any power that Congress may not have exercised in which Congress and the President share powers.
If President takes action contrary to what Congress directs, the President’s powers are at their lowest ebb.
Example  warrantless domestic wiretapping in Bush administration.

Administrative Action: Rulemaking vs. Adjudication
Overview
Three basic sources of administrative law: (1) Constitution, (2) Administrative Procedure Act, (3) enabling statutes
Due Process Constraints on Policy-Making
Londoner v Denver (policy-making by adjudication). When policy is made on individual grounds, due process requires agency to hold hearing to allow individuals to present their case.
Facts: Denver Board of Public Works had authorized a street to be paved. Board simultaneously decided to assess the cost against each property owner on the street in an amount commensurate with the benefit conferred on each party, as determined by the Board.
Held: under due process clause, there should be no tax unless there’s an opportunity to be heard – an oral hearing where homeowners can put forward argument and proof.
Bi-Metallic Investment Co v. State Board of Equalization (policy-making by rule).When policy applies to a class of people, very little process is required.
Facts: Colorado Board of Equalization and the Tax Commissioner increased value of all taxable property in Denver by forty percent. No notice or opportunity to be heard was given to individual property owners.
Held: Due process requirements in this case are minimal; agency isn’t required to have a hearing. Grievances can be voiced through the legislative process.
Administrative Procedure Act.
Definitions
Definition of “Rule” –the whole or a part of an agency statement of general or particular applicability and future effect designed to implement, interpret, or prescribe law or policy or describing the organization, procedure, or practice requirements of an agency and includes the approval or prescription for the future of rates, wages, corporate or financial structures or reorganization thereof, prices, facilities, appliances, services or allowances therefor or of valuation, costs, or accounting, or practices hearing on any of the foregoing.§ 551(4).
Definition of “Adjudication” – agency process for the formulation of an order.

§ 551(7).

What is required under the APA once we determine a policy is made by rule or adjudication?

Informal / Formal
Rulemaking / APA § 553
The agency must publish notice of rulemaking in the Federal Register. This allows people to send in comments to the General Counsel’s office or for a lawyer to send a brief to the GC. The GC reads the comments and creates a rule based on all of the input. The rule is then published in the Federal Register. It takes about 30 days to implement. / APA §§ 556, 557
A legislative hearing is held on a rule after a notice is published in the Federal Register. People submit an application to testify at the hearing. It’s not an adversarial trial, but a legislative hearing. You present a brief or statement, offer comments, and get asked questions. The rule is then published in the Federal Register.
Adjudication / APA § 555(e) (notice and brief explanation)
Prompt notice shall be given of the denial in whole or in part of a written application, petition, or other request of an interested person made in connection with any agency proceeding. Except in affirming a prior denial or when the denial is self-explanatory, the notice shall be accompanied by a brief statement of the grounds for denial. / APA §§ 554, 556, 557 (like a trial)
The agency shall give all interested parties opportunity for the submission and consideration of facts, arguments, offers of settlement, etc. An administrative law judge will preside over the hearing. All decisions are part of the record and shall include a statement of findings and conclusions, and the reasons or basis therefor, on all material issues of fact, law, or discretion presented on the record, as well as the appropriate rule, order, sanction, relief or denial thereof.

Policymaking by Rule
National Petroleum Refiners.The agency has discretion on whether to create policy through adjudication or rulemaking
Facts: FTC issued rule that gas retailers have to post octane level of the gas at the pump. The FTC issued this rule under the auspices of its mandate to prohibit unfair methods of competition and unfair or deceptive acts or practices. The idea is that low octane gas is bad for small precision engines, so to protect cars and ensure that people don’t overpay for high-octane levels they don’t need, the octane level should be posted.
Held: Policy-making by rule here is okay. Court bases decision on policy reasons (see chart below).

Policy Considerations in favor of Rule-Making
- Greater fairness to the regulated community. A rule is clear and puts everyone on notice. Avoids subjecting one company to cease and desist process at the expense of others.
- Allows for efficient resolution of policy arguments. Policy arguments don’t have to be rehashed in each adjudication.
- Participation. As a matter of good governance, we want participation.
- It calls on a variety of parties to come in and take part in the proceedings, so it allows for agency to draw on expertise in the community.
- Rule of law considerations: (1) greater certainty to the regulated community, (2) less likelihood of retroactivity.

Policymaking by Order after Adjudication
Excelsior Underwear, Inc.– Agency announced a policy by order but did not apply it to the parties in the adjudication.
Facts: Campaign to elect union to represent workers at Excelsior Underwear. Employer sent literature to workers about how terrible it would be with union representation. Employer refused to give union the addresses of its workers, so union couldn’t respond to employer’s allegations.
Held: NLRB decides that Excelsior Underwear doesn’t have disclose the addresses of its employees, but in the future, employers will have to.
NLRB v Wyman-Gordon-- Agencies can announce rules of general applicability and future effect in adjudicatory proceedings as long as the new rule is applied in the proceeding in which it is announced
Facts: Wyman Gordon refused to give out addresses of employees. NLRB said that Wyman-Gordon had to give out addresses based on rule in Excelsior. Wyman Gordon argued that abide by appropriate APA rule-making procedures, so Excelsior rule is invalid.
Held: Supreme Court upholds decision by NLRB that Wyman Gordon must hold election and must disclose employees’ addresses.
Fortas plurality: The later-in-time Wyman-Gordon adjudication was lawful, even though the Excelsior one was not.In the Excelsior decision, the agency announced a new rule but did not apply it to the parties.
Black plurality:The initial Excelsioradjudication was proper and hence it was proper for the Wyman-Gordon adjudicator to rely on it.