Admin Pro

main functions of agencies

rulemaking and adjudication

organic acts

• mostly succinct with broad policy goals, silent on many aspects

• Sets forth  specific responsibilities and duties and auth and IDs areas of discretion

• Big question: is the agency official acting within scope of legal auth? (if no, legally void) 

• Traditional exec agencies 

• Generally, 15 cabinet-level deps and sub-agencies 

  • Ex: interior 

• Headed by secretary or admin confirmed by senate

• POTUS can fire or replace agency heads at will for any reason 

• Independent agencies

• Exist outside of cabinet depts to manage specialized, technical tasks or economic reg

• Historically organized as multi-member bipartisan commissions or boards with staggered terms

• Historically insulated by insulated “For-cause” removals

• Ex: fed reserve 

yes

do leg and judiciary also have agencies

APA agency

• Any auth that is not congress, courts, govs of territories, gov of DC 

APA sec 551:

(1)“agency” means each authority of the Government of the United States, whether or not it is within or subject to review by another agency, but does not include—

(A)the Congress;

(B)the courts of the United States;

(C)the governments of the territories or possessions of the United States;

(D)the government of the District of Columbia;

or except as to the requirements of section 552 of this title— (FOIA) 

(E)agencies composed of representatives of the parties or of representatives of organizations of the parties to the disputes determined by them;

(F)courts martial and military commissions;

(G)military authority exercised in the field in time of war or in occupied territory; or

(H)functions conferred by sections 1738, 1739, 1743, and 1744 of title 12; subchapter II of chapter 471 of title 49; or sections 1884, 1891–1902, and former section 1641(b)(2), of title 50, appendix; [1]

CREW v. Office of Administration

• Agency or not test: Three factors: how close operationally the group is to POTUS; whether it has a self-contained structure; and nature of its delegated authority

  • Nature of auth is the big thing now 

Londoner/Bi-Metallic summary

Londoner (adjudication)	Bi-Metallic (rulemaking)
Few people affected	Many people affect
Fact specific inquiry	Broadly applicable
Hearing is practical	Hearing is impractical
Political process is inadequate (ripe for discrimination/corruption)	Political process is adequate
retrospective	Prospective

liberty, property

	Protected interest	takeaway
Goldberg	welfare-property	Shift from rights vs privileges  To more a fairness process
Roth	Employment K– property	Two steps ID interest, then look at procedure
Sindermann	Employment K – property (de facto tenure) Spoke out against school – liberty (1st amendment)	Consider wider range of agency actions as evidence In this case, implied K terms
Constantineau	Reputation – liberty	Stigma counts as interest
Paul	Reputation – liberty	Stigma plus

due process protected interests

• Property 

  • Common law property (real or personal property) 

  • Welfare (grievous loss) 

  • Property taxes 

  • Legitimate claim for entitlement 

    • Statutes, rules, custom, K law, other that lend support to the reliance (ex: faculty handbook from Sindermann)

• Liberty

  • Stigma plus (Paul v. Davis)

  • Fundamental liberties

    • 1st Amendment (Sindermann) 

goldberg v kelly

Due process required pre-termination hearing due to extreme need for welfare. 

Board of regents of state colleges v. Roth

To have property interest– “To have a property interest in a benefit, a person clearly must have more than an abstract need or desire for it. He must have more than a unilateral expectation of it. He must, instead, have a legitimate claim of entitlement to it.”

Perry v. Sindermann

“A person’s interest in a benefit is a “property” interest for due process purposes if there are rules or mutually explicit understandings that support his claim of entitlement to the benefit and that he may invoke at a hearing.”

WI v. Constantineau

• There is a stigma, that causes the liberty interest to attach here 

Paul v. Davis

• Rep alone is not enough, nothing is taken from him here  

  • Note: walks back from Constantineau

    • Narrows field of potential litigation to those with rep plus as opposed to just rep 

      • needs to be stigma plus

Kerry v Din

majority— no right to have man come

Dissent– yes right, worry about process

Concurrence– followed statute, got enough process (didn’t really look at liberty interest– even if there was, process was satisfied) 

• Used standard of Mandel – an executive officer’s decision denying a visa that burdens a citizen’s own constitutional rights is valid when it is made “on the basis of a facially legitimate and bona fide reason.” 

  • If it is grounded in actual policy or rule – facially legit 

  • Bona fide– good faith, some link between fact to statute. Very minimal standard

Mathews v. Eldridge

• Disability is not means tested

  • Welfare is determined by means 

Distinguished from Goldberg– 

• Welfare critical for living

• Disability, not required for living as standardly

  • Says the court

• Court– if you need it that bad, go on welfare 

• Court– med records are enough

  • Drs do documentation, so what Dr says goes 

Test used

• specific dictates of due process generally requires consideration of three distinct factors: First, the private interest that will be affected by the official action; second, the risk of an erroneous deprivation of such interest through the procedures used, and the probable value, if any, of additional or substitute procedural safeguards; and finally, the Government’s interest, including the function involved and the fiscal and administrative burdens that the additional or substitute procedural requirement would entail.

Cleveland board of ed v. Loudermill

Due process min

• The tenured public employee is entitled to oral or written notice of the charges against him, an explanation of the employer’s evidence, and an opportunity to present his side of the story.

Dissent– Rehnquist bitter with sweet

• Take the benefit? Only get the process provided in the law that gives the benefit

• This guy got statute protection, statute should also supply due process  

Informal adjudication

• No APA requirements, what agency sets up 

formal adjudication

APA procedures, said by congress. Triggered by “on the record” in enabling act

Citizens to preserve overton park, inc v. volpe

Informal adjudication 

Standards:

• Arbitrary capricious standard– APA– to be talked about 

  • Was the reasoning arbitrary and capricious 

    • Problem here, no real record of reasoning. Reasoning written after suit was filed 

    • Sec– we did all the reasoning, we just didn’t show it. Can you take our word? Here are affidavits from after the suit was filed 

      • Court says no, don’t do that 

      • Overton– put things in the record agency, especially when things are challenged

        
        
        

Pension benefit guarantee corp v. LTV corp

• 29 USC 1347 (4047 of ERISA) 

  • The corporation is authorized to take whatever action is necessary

    • No on the record, informal

• Pension benefit had taken over pensions from LTV

• Pension benefit reopens the pensions because LTV’s financial improved 

  • LTV does not want that, wants a hearing to not do that 

    • To show why it happened sort of thing 

Here

• No formal adjudication needed.

  • Agency followed statute here. Court does not want to impose more requirements than the statute requires here 

• Also, here enough admin record 

  • They didn’t have that in overton 

PGBC v. LTV– court can’t impose new standards, can’t require new law be meet if organic statute is

Withrow v. Larkin

Facts

• DR suing WI board of med when Dr’s license was suspended pending further review 

  • Board is a state agency 

• DR had issue that the board investigated and adjudicated – combined functions 

Court– combined functions is fine – Vesting the authority to investigate and adjudicate in the same agency does not violate due process.

• “The risk of bias or prejudgment in this sequence of functions has not been considered to be intolerably high”

5 USC 554– adjudications

• Persons entitled to notice of a hearing whall be timely informed of 

  • Time, place, and nature of the hearing;

  • The legal auth and juris under which the hearing is to be held; and 

  • The matters of fact and law asserted

• The agency shall give all interested parties opportunity for

  • Submission and consideration of facts, arguments, offers, etc

• 5 USC 706

• The reviewing court shall 

  • (2) hold unlawful and set aside agency action, finding, and conclusions found to be 

  • (A) arbitrary, capricious, and abuse of discretion, or otherwise not in accordance with law 

    • General standard that applies rather broadly 

    • Most often applied to informal agency actions 

      • Both adjudication and rulemaking 

    • Case by case standard, not really a hard and fast rule on it 

      • Overton did talk about it. Will be talked about more with rulemaking 

  • (E) unsupported by substantial evidence in a case subject to 556 and 557 of this title or otherwise reviewed on the record of an agency hearing provided by statute

    • Usually for formal rulemaking or adjudication

    • Can be assigned to informal by congress (ex: OSHA)

  • (F) unwarranted by the facts to the extent that the facts are subject to trial de novo by the reviewing court

    • Does not come up a lot 

Standards of review rule of thumb

• Agency adjudication with inadequate fact finding procedures or when issues that were not before the agency are raised in a proceeding to enforce non-adjudicatory agency action

  • De novo

• Formal agency action– substantial evidence

• Informal agency actions– arbitrary, capricious, abuse of discretion, not in accordance with the law

Universal Camera Corp v. NLRB

Have to look at whole record, cannot ignore contrary findings – Universal camera. 

Also Universal camera– substantial evidence– more than mere scintilla, enough that a reasonable mind might accept as adequate 

Richardson v. Perales

• We conclude that a written report by a licensed physician who has examined the claimant and who sets forth in his report his medical findings in his area of competence may be received as evidence in a disability hearing and, despite its hearsay character and an absence of cross-examination, and despite the presence of opposing direct medical testimony and testimony by the claimant himself, may constitute substantial evidence supportive of a finding by the hearing examiner adverse to the claimant, when the claimant has not exercised his right to subpoena the reporting physician and thereby provide himself with the opportunity for cross-examination of the physician.

Biestek v. Berryhill

• Yeah, find that she won’t give up data, take her at her word 

  • It is a bit case by case, but here she was trust worthy 

  • Dissent– if asked for narrower rule, likely better luck. Don’t get a bright line here 

What is substantial evidence

• Substantial evidence

  • More than mere scintilla– universal camera

  • Reasonable mind accept as adequate– universal camera 

    • No cherry picking evidence– universal camera 

      • If there is substantial evidence, defer to NLRB

      • Ignoring opposing facts– overturn

      • Different outcome but they have everything– can’t just throw out 

  • Hearsay is okay (ex: medical reports)– richardson

  • No bright line rule for evidence weighed– if no data, may still be okay– Biestek 

  • Inquiry is case by case– Biestek 

National petroleum refiners ass’n v. FTC

• Authority to make rules– always check organic act

Vermont Yankee Nuclear Power Corp v. NRDC

• As long as agencies follow APA courts cannot interfere with agency rulemaking 

• No additional procedures can be required by the court

SEC v. Chenery Corp (Chenery II)

• Discretion of rulemaking versus adjudication 

• No retroactive except if in statute

• If retroactive in statute– balancing test 

  • But such retroactivity must be balanced against the mischief of producing a result which is contrary to a statutory design or to legal and equitable principles. If that mischief is greater than the ill effect of the retroactive application of a new standard, it is not the type of retroactivity which is condemned by law.

    • Retroactive is allowed if in statute. BUT have to balance retroactive reg against possible bad effect of that 

Bowen v. Georgetown

• No retroactive rules unless expressly in statute 

Formal v. informal rulemaking

• Formal– uncommon

  • Strict, trial-like hearings with ALJ

  • No ex parte communications

  • E.g. peanut butter hearings

    • Peanut butter makers were decreasing the peanuts in the peanut butter 

    • So FDA did a rule– how much peanut to be peanut butter 

    • Formal rulemaking 

      • Took over 12 years 

      • A ton of testimony 

    • Peanut butter– certain percent 

    • Otherwise, peanut spread or something under the rule

• Informal rulemaking

  • Three steps

    • Norice 

    • Comment

    • Published final rule

  • Preferred by agencies 

Shell oil co v. EPA

Test: rule must be a logical outgrowth 

• Reasonably foreseeable based on rulemaking 

Holding: vacated 

Logical outgrowth

• Yes– 

  • Agency asks for comment, final rule incorporates that comment 

    • Ex: feasibility and final rules leaves something out to make it feasible 

    • Ex: how much peanut in peanut butter? 89%? Sure

  • Agency proposes broader rule but final rule is narrower 

    • Ex: percent metal in some other metal 30%-50%, agency settles on 35%

  • If final rule within range of foreseeable alternatives 

    • Ex: percent metal in some other metal 30%-50%, agency settles on 35.3%

  • 
    

• No– 

  • Agency ignores comments that are significant 

  • Agency broadens rule 

    • Ex: said 35%, change to 30%-50% and no comment. Not allowed

  • Final rule is disconnected 

    • Not forseeable

  • Final rule changes emphasis 

    • Ex: proposed is peanut butter, final is almond butter

    • Can come from simple language changes– ex: peanut butter v peanut spread 

      • Happens a lot when trying to clarify language 

Remand v vacate

• Remand rule– agency goes through rule making again 

  • Agency will often abandon the rule 

• Vacate– rule is no longer in force 

Portland cement ass’n v. Ruckelshaus 

• Test

  • Agencies must disclose tech data and studies during rulemaking 

  • In other words, don’t hide the ball 

  • Rule of prejudicial error – when agency act, court can decide act can stand if action is harmless 

    • Ex: agency makes mistake in rulemaking, but no one gets hurt, can stand – APA 706

American Radio Relay League Inc v. FCC

• Agencies must give all data that is used for deliberations. No redactions for deliberative information 

• In other words, don’t cherry pick data given for comment 

U.S. v. Nova Scotia Food Products Corp

• Test 

  • Agency does not need to answer every comment, but must respond to significant comments 

  • Disclose data, respond to comments 

Exemptions to rulemaking procedures

• Cateogiral subject matter (553(a)

  • Military, don’t worry about for this class

• Procedural rule 553(a)(2)

  • Will talk about 

  • A rule relating to …

• Non-leg rules 533(b)(4)(A)

  • Will talk about

• Good cause

  • Will talk about 

    • Claim good cause

    • Need reasons for no notice and comment

Mack trucks, Inc. v. EPA

• Test

  • No good cause exception to rescue one company 

  • Not an escape clause for agency 

Good cause

• No good cause exception to rescue one company 

• Not an escape clause for agency 

• Impractical

  • Public safety

• Notice and comment unnecessary 

  • Routine, ministerial

• Contrary to public interest

  • Saving lives ex

  • Need rules in a hurry 

Little Sisters 

• Label (IFR v. notice) doesn’t really matter 

  • Substance of the thing is key

    • Ex: statute auth, reasoning, etc 

Good cause okay when

• IFR followed by comments 

  • Little sisters

• Major economic disruption (Sometimes)

  • Cannot be foreseeable 

  • Agency did not cause mess

Good cause not okay when

• When rescuing one company

  • Mac truck

• Economic disruption is foreseeable 

• Agency caused mess

• Ministerial 

Mendoza 

• Agency claimed it was a procedural rule

  • Procedural rules deal with the efficiency of agency 

  • No impact on rights of people 

• Leg rule

  • When creates substantive rule impacting rights and/or obligations – notice and comment required for that 

• Court–

  • Want notice and comment, this is leg

American mining 

• 4 part tes– 664t

  •  “legal effect”, which in turn is best ascertained by asking (1) whether in the absence of the rule there would not be an adequate legislative basis for enforcement action or other agency action to confer benefits or ensure the performance of duties, (2) whether the agency has published the rule in the Code of Federal Regulations, (3) whether the agency has explicitly invoked its general legislative authority, or (4) whether the rule effectively amends a prior legislative rule. If the answer to any of these questions is affirmative, we have a legislative, not an interpretive rule.

  • In other words

    • Does it form basis for enforcement 

    • In CFR? – not determinative 

    • Invoke statutory authority 

    • Amends

Pacific Gas & Electric co. v. Federal Power Commission

• Facts

  • Agency put out info on how gas customers should be prioritized in context of gas shortages 

    • Agency calls doc a statement of policy– policy exemption under 553 

• Test

  • Subatnive– creates binding norms 

    • Does the rule bind to a specific behavior through force of law 

Community nutrition institute v. young

• Facts

  • FDA put out action levels for aflatoxins 

  • Industry– NC for levels please 

  • FDA– policy, not rule 

    • But also, can’t enforce without it 

• Test

  •  “two criteria” that courts have used in their efforts to fathom the interpretative/legislative distinction:

    • First, courts have said that, unless a pronouncement acts prospectively, it is a binding norm. Thus . . . a statement of policy may not have a present effect: “a ‘general statement of policy’ is one that does not impose any rights or obligations”. . . .

    • The second criterion is whether a purported policy statement genuinely leaves the agency and its decisionmakers free to exercise discretion.

  • In other words

    • Prospective (present effect) and binding language (binding norm) is legislative 

leg v not chart

	legislative	Non legislative
	Bind and set a standard	Interpretation and discretion in application
Effect on legal duties	creates/imposes new duty/standard Ex: mendoza	clarification/explanation scope of the duty– Mining
Cfr publication	Always yes, snippet of evidence	Sometimes, not conclusive if they are
Agency discretion	Binding for standards established in rule	Room to exercise duties – discretion
Rules	Creating position– add to prior rules	Interpretation– not creating position or amendment
enforcement	Forms basis for enforcement	Not basis for enforcement

National tire dealers and retreaders assn inc v. Brinegar

• Facts

  • Agency put out standard warning permanent labels on all tires 

  • Industry– that is not feasible 

  • Secretary denies petition for reconsideration 

    • Relied on expertise 

    • 
      

• Test

  • Label not practical

    • Agency must support decision with reasoned explanations, assertion of expertise not enough 

Motor Vehicles Manufacturers v. State Farm

• Facts

  • Standard on airbags v auto seatbelts and passive restraints

  • They rescinded the rule– not enough safety data to supports 

  • Insurance– rescinding without reasoned explanation was arbitrary and capricious 

• Test

  • Four parts 

    • “ Normally, an agency rule would be arbitrary and capricious if the agency has relied on factors which Congress has not intended it to consider, entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise.”

FDA v. Wages and White Lion Investments 

• Facts

  • Reject applications for vapes 

  • Evidence missing supporting app 

  • Needed to show benefit to adult smokers to outweigh risk to youth 

  • Industry: not proper notice– change of position of what would be sufficient evidence 

• Test

  • Change in position doctrine 

    • Did agency change its position 

    • If it did, did the agency show awareness of change and did it provide reasoned explanation 

      • Did it take into account for serious reliance interest 

        • Belief about how agency will use enforcement discretion is not a serious reliance interest 

NLRB v. Hearst Publications

• Test

  • If agency read of statute has warrant in the record and reasonable basis in law take it. 

    • Adjudication type deference 

  • Here 

    • Adopted NLRB read

      • Applied facts and used its expertise 

Skidmore v. Swift & co

• Test

  • Respect 

    • Courts should respect agency read of statute as long as there is persuasive reasoning for that read 

  • Deference only when agency gives persuasive arguments 

    • Court is still ultimate interpreter of the law 

  • This deference generally used more in informal agency actions 

    • Not notice and comment, bulletin sort of things 

  • Factors– does agency get respect or not

    •  The weight of such a judgment in a particular case will depend upon the thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors which give it power to persuade

Chevron v. NRDC (1984)

• Ex of the test at work– PBGC v. LTV

• Steps

  • Did congress speak? (Is statute meaning clear) 

    • If yes– end analysis. Court determines if agency action complies 

    • If no, step 2

  • If no– step 2– is agency interpretation based on permissible construction of statute (is it reasonable) 

• Very deferential to agency 

  • Can raise some issues– ex: marbury and McCulloch – handed over interpretation power to agency 

    • Also may implicate like, major questions or non-delegation, etc 

Loper Bright Enterprises v. Raimondo (2024)

• Test

  • Courts must find best meaning in questions of statutory interpretation 

  • Policy making and fact finding back to skidmore test 

    • Weight to agency which depends on four factors 

    • Consistency emphasized, may get more weight now 

    • Factors– does agency get respect or not

      •  The weight of such a judgment in a particular case will depend upon the thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors which give it power to persuade

Since Loper

• No clear rule yet

• Application has been messy

• No one size fits all yet

• Sometimes get more or less deference, not the most consistent application

• People seem to be relying on skidmore now 

• More ambiguity in statute? Less deference. Less ambiguity, more deference– seems the trend so far? But early 

Auer v. Robbins 

• 
  
  

  • Court gives Controlling weight to agency read of its own reg unless plainly erroneous or inconsistent with reg