Administrative Law

Fall 2019

Short Outline

Table of Contents

Introduction 4

Agencies and Their Functions 4

Theories of Agency Behavior 4

The Constitution and the Administrative State 5

Separation of Powers 5

Agencies and Article I 6

Agencies and Article II 9

Appointment of Agency Officials 9

Removal of Agency Officials 16

The Unitary Executive 20

Statutory Constraints on Agency Procedure 21

Introduction: The Administrative Procedure Act 21

Formal Rulemaking (APA 556) 21

Formal Adjudication 23

Informal Rulemaking 24

Hybrid Rulemaking 24

The Notice of Proposed Rulemaking (APA 553) 28

Implementation of APA sec 553: The Statement of Basis and Purpose 31

Exemptions from Rulemaking Procedures 32

Procedural Rules: 33

Interpretative Rules and Policy Statements 34

Good Cause 35

Informal Adjudication 37

The Choice between Rulemaking and Adjudication 39

Retroactivity 42

Scope of Review of Agency Action 43

Review of Findings of Fact in Formal Proceedings 43

Review of Findings of Fact in Informal Proceedings 45

Review of Agency Legal Conclusions 46

Theory and History 46

Theory and Current Practice: Chevron 48

Agency Interpretations of Regulations: Seminole Rock/Auer 50

Chevron Step Zero: When Does Chevron Apply? 55

Chevron Step One: How Clear is Clear? 60

Chevron Step Two: How Reasonable is Reasonable 63

How Far Does this Go? 65

Review of Agency Discretion and Policymaking 66

The Great Convergence: Substantive Review and Procedural Adequacy 72

Hard Look Review in Practice: Variations on a Theme 74

Agency Inaction 76

Enforcement Discretion (Decisions Not to Enforce) 76

Discretion to Regulate (Decisions Not to Rulemake) 78

Introduction

Agencies and Their Functions

1. Agency Functions: The Distinction between Rulemaking and Adjudication

   1. Rulemaking

      1. Looks like legislature passing a law

      2. Results in rule/regulation that looks like a statute

      3. Level of generality: very general

      4. Future-looking

   2. Adjudication

      1. Looks like court deciding a case

      2. Results in an order that looks like court judgment

      3. Level of generality: specific

      4. Past-looking

   3. How do you draw the line between the two? Hard to draw a crisp line

Theories of Agency Behavior

2. A lot of admin law can only be understood as a response to changing theories of agency behavior

3. Timeline:

   1. Madison--Landis--Eastman--ND--Landis--Bernstein--Noll--Wilson

4. Madison: bad man view of government (humanity is bad, needs to be governed, but no one to govern men but other men who are also bad)- so we need controls on government

5. Eastman: Good guy government (don’t worry about those who govern you because they’re all motivated by good things and are nonpartisan!).

6. Landis: Government brings in experts who do good things into agencies (so we don’t want to constrain agencies because there are big problems to be solved and we need to let agencies solve them)

   1. Best administrators didn’t read the statutes but just dealt with the problems of the industry. We need to let agencies do what they need to.

7. Berstein: Agencies are crusaders regulating their industry at first, but then as time goes on, when the people in the agency are working so close with the industry, they become “captured” and take on the persona of those they’re regulating. At that point, courts need to rein them in.

8. Noll: An agency who doesn’t want to be overruled must be responsive to the industry (bc industry has resources to challenge decisions, while the general public is not cohesive enough to actually challenge an agency decision)

   1. So an agency wanting to minimize being overruled by legal decisions must favor interests of the regulated

   2. This is magnified by how commission members are chosen (appointments are not even noticed by public, but regulated industries are closely watching and ready to oppose)

9. Wilson: More nuanced view that is currently still in place

   1. Either there’s been a shift that’s less pro-industry or we’ve been overgeneralizing that every agency is “captured”

      1. Easier for public to organize

The Constitution and the Administrative State

Separation of Powers

1. James Madison, Landis, Strauss opinions on SOP

2. 18th C.: Formalism v. Functionalism

   1. Formalism: Only one formulation of gov’t was put into the Constitution- three branches with different powers and responsibilities and NO encroaching. Powers of different branches may at times be focused on the same subject, but it isn’t absolute power (powers remain discrete- judiciary exercises judicial power)

      1. Rigid rules: Constitution is an instruction manual and must be followed, all exercises of power fall under one branch

      2. Process: Look at the power and see which branch it is under. Does it fit that branch’s definition?

         1. Read text of Constitution and line it up with action being challenged- if they don’t match, not allowed

      3. Biggest issue is that then our entire admin state is unconstitutional- so it is just not practical

   2. Functionalism

      1. Looks at the general Constitutional guidelines, then looks at the mechanism at hand and sees if it encroaches on the power of another branch.

         1. If it does- problem

         2. If not- let it go (regardless of what Constitution says)

      2. Concerned with whether an exercise of power interferes with the “core function” of another department (is one branch trying to “aggrandize itself” at the expense of another?)

      3. Cons: no meaningful limitations on interbranch usurpation of power, doesn’t appreciate corrupting effect of power, doesn’t worry about power grabs outside of branches

3. Themes

   1. How Madison's view is reflected in the Const

      1. Powers divided between three branches- but many checks and balances. Examples of them.

   2. Framers had distinct view of human nature and of how to translate the best and worst of human nature into the Constitution

1. SOP is evidence of this

4. Takeaway

   1. Vision that motivated Constitution (bad aspects of human nature)

   2. Then there’s a breach where we see a form of government that doesn’t look consistent with Constitution

      1. People settle on view that agencies are executive...

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