Attempt to exercise influence over agency. Appointment

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1 1 Controlling Agencies Attempt to exercise influence over agency Congress Where Agency decision must be approved by Congress President Forms of congressional control: see p.7. Legislative veto (p.5): A system obliging agency decisions to be submitted to Congress before they become effective violates Article I, 7 unless it includes passage through both houses and presentment to the President: Chadha. This is the case where the veto establishes a power that Congress could otherwise only exercise by new legislation, such as one affecting the legal rights, duties and relations of persons outside the legislative branch. Appointment Appointment & removal power Power of policy initiation: see chart p. 2. Dismissal of Officers and inferior Officers (p.8) Appointing inferior officers and employees Type of Appointee (p.8): The appointment procedure varies according to whether the appointee is an officer, an inferior officer or an employee. Except via impeachment, Congress has no authority to remove officers. See Bowsher, were effort to remove comptroller by joint resolution of Congress. However, Congress may limit President s dismissal power. Definition of employees (p.10): In Buckley, the Court defined employees as lesser functionaries subordinate to officers. Appointment of employees : Congress limits greatly the President s power to control appointments to the civil service. Definition of inferior officer (p.9): In Morrison, the Court distinguished between inferior and other officers with reference to whether the officer was subject to removal by a higher executive branch official, whether the officer s powers were limited in scope by a statute and jurisdiction by a superior and whether the appointment period was limited in tenure. In Edmond, an inferior officer was deemed an officer whose work is directed and supervised at some level by others who were appointed by presidential nomination with the advice and consent of the Senate. Appointment of inferior officers : Article II, 2 provides Congress may by law vest the appointment of such inferior officers, as they think proper, in the President alone, in the Courts of Law, or in the Heads of Department. In Morrison, the Court concluded Congress has wide latitude to permit one branch to appoint inferior officers of another. Definition of Officer (p.8): In Buckley, the Court concluded that officers within the meaning of Article II included all appointees possessing significant authority by reason of the laws of the United States. On the facts in that case, the appointees exercised enforcement powers and the legislative and judicial functions of the appointees were not sufficiently distant from the administration and enforcement of public law to be exercised by persons other than officers. Appointment of Officers : By virtue of Article II, 2, officers must be appointed by the President with the advice and consent of 2/3 of the Senate. Functional approach to dismissals: At one point, Congress could only limit the executive power to dismiss where the agency in question was quasilegislative or quasi-judicial and possessed of some measure of independence. At present, after Morrison, the Court asks instead whether the Congressionallyimposed restrictions impede the President s ability to perform his constitutional duty. Variables examined in Morrison included the limited tenure and jurisdiction, of the inferior officer and the sort of constraint imposed by Congress ( good cause ).

2 2 Controlling Agencies Cont d President s Power of policy initiation (p.10) Constitutional powers Powers delegated by statute (p.10) Article II empowers the President to demand the opinion, in writing of the principal officer in each of the executive departments, upon any subject relating to the duties of their respective offices. Article II provides that the President shall take care that the laws be faithfully executed. Clearly, the precise scope of delegated Presidential power depends on the statute in question. Two common principles, however, are universally applicable. First, Congress has provided the President with statutory permission to sub-delegate his/her statutory powers to executive officials who are subject to statutory confirmation. Second, the President cannot compel action outside the bounds of the statute. Note, however, that the DC Circuit, in Costle, suggested that absent a statutory bar restricting Presidential supervision, pressure exerted on an administrator is both expected and proper. Executive Orders (p.10): Presidential authority to issue EOs is said to stem from the Presidential constitutional power to ensure the faithful execution of laws. Clearly, however, an EO must not oblige an agency to transgress boundaries set by Congress. In Thomas, for example, the District Court concluded that recourse to EO in that case imposed substantive changes in the form of delays and thereby raised constitutional concerns. Accordingly, the Court held that further OMB review mandated by the EO leading to additional delays was unreasonable and unacceptable.

3 3 Challenging Delegations of Power Delegation of power by statute Legislative power (p.5): Article I, 1 vests all legislative power in the Congress. Judicial power: see chart p.11 below. Vague statute Extremely precise statute Line item veto Non-delegation doctrine (p.5): While at one point courts interpreted the bar on the delegation of legislative power strictly, the better view at present is that delegation is permissible, so long as Congress has provided intelligible principles with which an agency must conform: Hampton (CB 56). Put another way, the Supreme Court has taught constitutional issues only arise where the delegating statute is so lacking in standards that the will of Congress cannot be ascertained: Yakus. The Court, in asking whether Congress has established an intelligible substantive standard has, in the past, examined the statute, its legislative history, its duration, past practice with respect to the ill being cured by the statute and existing mechanisms of control, such as judicial review: Meat Cutters. All told, the Court s approach seems to imply that courts will look not only for intelligible standards spelling out the scope of the delegated power, but also a series of procedural and substantive controls limiting agency powers. Indeed, some courts have resisted striking down delegations even where, at present, no intelligible standard has been articulated. In Sun Ray, a state court concluded that where a general, vague statutory grant of power had not been fleshed out with published rules or regulations, the agency was obliged to introduce such standards to ensure safeguards on executive action, such as effective judicial review. A similar conclusion was reached in American Trucking, where the DC Circuit concluded that a statute provided no intelligible principle but was capable of being rendered intelligible by the development by the agency of determinate standards. The court here preferred to refer the matter to the agency to extract these standards rather than striking down the statute. Irrebuttable presumption (p.6): Statutes creating mandatory, automatic courses of action upon the occurrence of certain facts that do not reflect a rational calculation of the varying needs of different parties may create irrebuttable presumptions violative of due process. In these instances, and so long as the governmental objective would not be unduly diminished, hearings might be necessary for the government to properly assess the varying circumstances of different people: Murray. Irrebuttable presumption cases, once popular, have fallen by the wayside. Line item veto (p.6): In Clinton, the Court relied on Chadha to conclude that a line item veto, as applied by the President to the statutes there at issue, effectively amended statutes that had passed through the houses of Congress, without meeting the requirements of Article I, 7 (re-consideration of the changes by both houses and presentment). As a consequence, the line item veto was unconstitutional.

4 Exercise of Legislative Power by Agencies: Rule Making Right to petition (p.24): Agencies must give interested persons the right to petition for the issuance or amendment of a rule: 553(e). 4 Definition of a rule (p.21): A rule is 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 establish rules of practice: 551(4). Essentially, a rule is distinguished from an adjudicative order by its general applicability. Non-rule: Any other agency action is an adjudicative order : 551(6). Interpretive rules, general statements of policy and rules of agency organization, procedure or practice (p.21): These types of rules are not subject to 553 requirements: 553(b)(A). The meanings of interpretive rules and general statements of policy have occasioned the most controversy. (see box to right) No APA consequences, though note: Generally, agencies are obliged to follow their own procedural rules (CB 591, NS 307). The basis for this obligation may be due process requirements or 706 obliging agencies not to be arbitrary and capricious. Legislative rules : In American Mining Congress (CB 505), the DC Circuit suggested that the litmus test for a legislative rule is whether it has the the force of law. A rule only has force of law where Congress has delegated legislative power to the agency and the agency intends to rely on this power in promulgating the rule. Intent to rely on delegated power can be found where the agency would be unable to meet its legislative enforcement obligations absent the rule. Second, where the agency publishes the proposed rule in the CFR, intent may be inferred. Last, where the rule amends a prior legislative rule, it too can be presumed to be legislative. Other exceptions to APA requirements (p.22) Piercing rules: where a rule results in an agency making quasi-judicial determination where a small, identifiable group of persons is exceptionally affected, in each case upon individual grounds, due process requirements may be imposed creating procedural safeguards analogous to those available in adjudications. Vermont Yankee Go to chart Page 12 Do not apply to the extent there is involved a military or foreign affairs function of the United States: 553(a)(1). Do not apply to the extent there is involved a matter concerning agency management or personnel or to public property, loans, grants, benefits and contracts: 553(a). Unless notice or hearing is required by another statute, the notice (and comment?) requirements can be waived where the agency, in good cause, finds them impracticable, unnecessary or contrary to the public interest: 553(b)(B); for example where delay would undermine the rule s objective (p.22). No APA requirements Exceptions apply Exceptions do not apply APA requirements: go to next page

5 5 Exercise of Legislative Power by Agencies: Rule Making APA requirements Statute requires a hearing Statute is ambiguous on procedure to be followed Statute does not require hearing Is the hearing is on the record after opportunity for an agency hearing? (p.15) In Florida East Coast, the Court held that while the language in the statute needn t exactly match the language cited in the prior sentence, some clear expression of Congressional intent that such a sort of hearing be held must be found. Here it was unclear what Congress intended and the fact that the decision at issue related to rulemaking rather than adjudication seemed to favor a much less rigid interpretation of hearing in the context of this Act. This decision seems to favor informal over formal processes where there is ambiguity in the Act. Go to chart Page 8 Ambiguity resolved in favor of formal rulemaking Considerations: In Automotive Parts (CB 468), the First Circuit held that Congressional intent, coupled with an examination of other provisions of the Act and the function that the Secretary is expected to perform, implied informal rule-making (CB 470). In particular, where the Agency is concerned with the issuance of rules requiring basic policy determinations rather than the resolution of particular factual controversies, the informal 553 procedures are appropriate Hearing requirement unclear Curial caution (p.23): In Vermont Yankee (CB 532, NS 320), the Supreme Court admonished a lower court for imposing formal rulemaking-like requirements in circumstances clearly governed by informal rulemaking. The Court indicated that only in the rarest circumstances would courts force agencies to utilize rulemaking procedures other than those imposed by the APA, other statutes or the Constitution. No ambiguity concerning application of informal process or ambiguity resolved in favor of informal process Notice (p.22): Notice of proposed rules shall be published in the Federal Register, unless persons subject to it are named and served personally or received some other form of actual notice: 553(b). The notice must give a statement of the time, place and nature of the public rule-making proceeding, reference to the legal authority underlying the proposed rule and either the terms or substance of the rule or a description of the subject and issues implicated: 553(b)

6 6 Exercise of Legislative Power by Agencies: Informal Rule Making cont d Comment requirements (p.23): Following notice, interested persons are to be given an opportunity to participate in the rulemaking through submissions with or without oral presentations: 553(c). Requiring hearings in informal proceedings: Section 553 comment does not require hearing-like procedures. In Vermont Yankee (CB 532, NS 320), the Supreme Court admonished a lower court for imposing formal rulemaking-like requirements in circumstances clearly governed by informal rulemaking. The Court indicated that only in the rarest circumstances would courts force agencies to utilize rulemaking procedures other than those imposed by the APA, other statutes or the Constitution. Disclosure (p.23): Courts continue to be prepared to require, as part of 553, disclosure of underlying basic factual assumptions. In Nova Scotia (CB 514, NS 318), the Second Circuit interpreted 553 as imposing an obligation to make a scientific study key to a decision available to potential commentators. The Court reasoned that failing to disclose basic data relied upon is tantamount to rejecting comment altogether. Failure to allow comment on pertinent scientific evidence suggests that an agency has not taken into account all relevant factors. Administrative record (p.23): Judicial review of informal rulemaking focuses on the administrative record already in existence and not a new record devised for the review process. In Nova Scotia (CB 517), the Second Circuit reasoned that in determining the validity of a rule, the court could rely only on the record made before the agency, except in cases where new issues not before the agency in rulemaking are raised in a proceeding to enforce nonadjudicatory agency action. In National Tire (CB 486), the DC Circuit concluded that reliance on material off the record could not used to excuse doubts raised on the record. As agencies are now obliged to compile such a record (see judicial review section below), informal rulemaking is more formal than the APA s framers likely intended. Conduct of decision-makers Ex parte communication (p.23): The DC Circuit in Sierra Club (CB 546, NS 325). reasoned that in the informal rulemaking context, the concept of restricting ex parte contacts is of questionable utility. The legitimacy of general policy-based rulemaking depends on openness, accessibility and amenability of officials to the public. Full record review (see above) requires factual support for a rule on the record. It thus protects against ex parte communications having undisclosed influence. Impartiality (p.26): In Association of National Advertisers (CB 560, NS 327), the DC Circuit concluded that a less stringent standard should apply to rulemakers than to adjudicators in terms of prejudgment. A rulemakers should only be disqualified where there had been a clear and convincing showing that the agency member has an unalterably closed mind on matters critical to the disposition of the proceeding. Separation of functions (p.24): Agencies are generally free to consult their own staffs. In Marshall (CB 536, NS 326), the DC Circuit concluded nothing in the APA bars a staff advocate from discussing matters with a rulemaker. Further, consultants used in that case were the functional equivalent of agency staff. Where there was no compelling evidence that the agency had relied on undisclosed facts or arguments proffered by the consultants, their work in summarizing and distilling the record was a legitimate part of the agency s deliberative task.

7 7 Exercise of Legislative Power by Agencies: Informal Rule Making Cont d Reasons (p.24): Subsequently, after reviewing these submissions, the agency must incorporate in the rules a concise general statement of their basis and purpose: 553(c). In Automotive Parts (CB 468, NS 312), the First Circuit concluded that to meet the APA s requirements, the reasons given had to enable the court to see what major issues of policy were ventilated by the informal proceedings and why the agency reacted to them as they did. The picture presented by the agency was one of conscientious attention to objections raised by the party and reasoned disposition of these comments. In Nova Scotia, the Second Circuit queried a concise, general statement on the basis that it was not rational to leave vital questions, raised by comments which are of cogent materiality, completely unanswered. Publication (p.24): A substantive rule must not be published less than 30 days before its effective date: 553(d). Exceptions: A substantive rule that grants or recognizes an exemption or relieves a restriction An interpretative rule or statements of policy (seems redundant, given the overarching nature of this exemption) As otherwise provided by the agency for good cause found and published with the rules Right to petition (p.24): Agencies must give interested persons the right to petition for the repeal of a rule: 553(e). End

8 8 Exercise of Legislative Power by Agencies: Formal Rule Making Notice (p.22): Notice of proposed rules shall be published in the Federal Register, unless persons subject to it are named and served personally or received some other form of actual notice: 553(b). The notice must give a statement of the time, place and nature of the public rule-making proceeding, reference to the legal authority underlying the proposed rule and either the terms or substance of the rule or a description of the subject and issues implicated: 553(b) Presiding officer: The person presiding over the taking of evidence shall be the agency, one or more members of the body comprising the agency or one or more administrative judges: 556(b). This presiding officer has substantial powers to regulate the conduct of the hearing: see 556(c) Impartiality of presiding officer (p.26): In Association of National Advertisers (CB 560, NS 327), the DC Circuit concluded that a less stringent standard should apply to rulemakers than to adjudicators in terms of prejudgment. A rulemakers should only be disqualified where there had been a clear and convincing showing that the agency member has an unalterably closed mind on matters critical to the disposition of the proceeding. Ex parte communication: Unclear area. On the one hand, some courts have approached the issue of ex parte contact strictly while others appear less concerned. See CB 543. Ex parte communication rules under 557 (p.17). These rules apply no latter than the time the matter is noticed for hearing: 557(d)(1)(D). Congressional exception: Persons other than the presiding officer are allowed to give information ex parte to Congress concerning the merits of the proceeding: 557(d)(2) Communications by interested persons: Interested persons are barred from knowingly making or causing to be made ex parte communications relevant to the merits of the proceedings to any agency member who may reasonably be expected to be involved in the decision: 557(d)(1)(A) Communication by agency members: Agency members who are or may reasonably be expected to be involved in the decision making process are barred from making or causing to be made to any interested person outside the agency ex parte communications relevant to the merits: 557(d)(1)(B) Obligation to disclose on the record: A member described above right who makes or receives a prohibited ex parte communication must place on the public record of the proceeding: all the written communication, memos stating the substance of all such oral communications and all written responses and memos in response to the communication.

9 9 Exercise of Legislative Power: Formal Rulemaking Cont d Evidence Burden of proof: Unless otherwise provided by statute, the proponent of a rule bears the burden of proof: 556(d). The Court has held that absent special circumstances, the standard of proof is preponderance of the evidence. Cross-examination: A party is entitled to conduct cross-examinations required for a full and true disclosure of the facts : 556(d). Rules of evidence: Rules of evidence in administrative proceedings are less strict than those applied in court. Agencies must have policies concerning the exclusion of irrelevant, immaterial or unduly repetitious evidence, but beyond that any oral or documentary evidence may be received. However, an order may not issue except on consideration of the whole record or those parts cited by a party and supported by and in accordance with reliable, probative and substantial evidence : 556(d). Hearsay evidence is admissible up to the point of relevance and so long as there existed some indicia of reliability: Richardson. Written evidence: So long as the party will not be prejudiced, the agency may adopt procedures for the submission or all or part of the evidence in written form : 556(d). Official notice (p.19): Where a decision is based on official notice of a material fact not appearing in the evidence in the record a party is entitled to rebut this holding: 556(e). Decisions Record for decision: The record for decision comprises the transcript of testimony and exhibits, together with all papers and requests filed in the in the proceeding: 556(e). All decisions, findings, conclusions or exceptions are part of the record, as are reasons and the appropriate rule, order, sanction, relief or denial thereof: 557(c). The agency may issue a tentative decision or an employee may recommend a decision or this procedure may be avoided entirely where due and timely execution of the agency s functions imperatively and unavoidably so require: 557(b)(1) & (2). The presiding officer shall initially decide the case unless the agency requires the entire record to be certified to it for decision. Where an initial decision is made, this becomes the decision of the agency, unless there is an appeal to, or review on motion of, the agency: 557(b). Reasons (p.19): The record must include a statement of findings and conclusions, and the reasons or basis therefore, on all the material issues of fact and law, or discretion presented on the record : 557(c). Appeal (p.19): On an appeal of an initial decision, an agency has all the powers which would have in making the initial decision except as it may limit the issues on notice or by rule : 557(b). Before a decision on agency review of an initial decision, parties are entitled to submit proposed findings and conclusions or exceptions to the decisions or presiding officers, along with supporting reasons: 557(c).

10 10 Exercise of Legislative Power by Agencies: Formal Rule Making Cont d Publication (p.24): A substantive rule must not be published less than 30 days before its effective date: 553(d). Exceptions: A substantive rule that grants or recognizes an exemption or relieves a restriction An interpretative rule or statements of policy (seems redundant, given the overarching nature of this exemption) As otherwise provided by the agency for good cause found and published with the rules Right to petition (p.24): Agencies must give interested persons the right to petition for the repeal of a rule: 553(e). End

11 11 Agency Adjudication Delegation of judicial power (p.11) Constitutional considerations: Article III provides that judicial power is to be exercised by the Supreme Court and such inferior courts as the Congress may from time to tine ordain and establish. These courts are to possess a large measure of judicial independence, raising the prospect that if Congress establishes adjudicative bodies, they must meet article III independent requirements. At present, the Supreme Court jurisprudence in this area is slightly uncertain. A key consideration is whether the right being adjudicated can be considered a private or public right. Public rights: After the Supreme Court s decision in Crowell, the better view is that, by reason of its Article I powers, Congress can assign adjudication of public rights to administrative bodies lacking judicial independence. Public rights were defined as those between an individual and government. Private rights: While Crowell concluded that an agency could adjudicate private rights those relating to the liability of one individual to another under the common law so long as questions of law decided by these bodies were subject to full review and questions of fact to deferential review by an Article III court, more recent jurisprudence is significantly stricter. The Court in Northern Pipeline considered whether the adjudication of private rights was sufficiently incidental to the adjudication of private rights. In Schor, the Court applied a more functional test, concluding that the private nature of claims is not dispositive and that the Court is free to consider other factors determining whether judicial independence was compromised by such a delegation. These factors include whether the delegation is of essential attributes of judicial power, the origins and importance of the rights being adjudicated and the concerns prompting Congress to delegate power. Here, the adjudication of the common law counterclaims at issue was merely incidental to, and completely dependent upon adjudication of the underlying federal law claim. Adjudicatory process: Adjudication falls into two broad classes. First, there are adjudications that are not governed by the APA. Second, there are formal adjudications subject to 554, 556 and 557 of the APA. At core, all adjudications are clearly governed by constitutional due process concerns.

12 12 Agency adjudication cont d Procedural due process (p.12): The 5 th Amendment, directly applicable to federal agencies, provides that no person is to be deprived of life, liberty or property, without due process of law, while the 14 th Amendment extends similar limitations to state action. In gauging the applicability of these provisions to administrative action, courts must first determine whether a person is deprived of one of the enumerated interests. Deprivation of property (p.12): Privileges such as welfare benefits are capable of amounting to a property interest. In Roth, the Court held the loss of a governmental benefit constitutes deprivation of property only where the recipient had a legitimate claim of entitlement to the benefit and not merely a unilateral expectation. Put another way, the Constitution protects the security of interests already acquired by the person. These property interests are not created by the Constitution. Instead they flow from other rules such as state law, obliging the plaintiff to show that some authoritative source of law establishes his or her right to the benefit in question where he or she meets certain criteria. Once the property rights are created by this other source of law, the procedures employed to deprive persons of these entitlements are scrutinized with reference to federal constitutional law, not with deference to the procedure established by the source of the substantive grant. Deprivation of liberty (p.13): The Court has been reluctant to find liberty interests implication in public contracts. Public decisions creating stigma are given liberty protection, but, as Paul suggests, only where a mere loss of reputation is accompanied by an alteration in the plaintiff s legal status, such as a loss of employment. In the prison context, liberty interests are triggered where prison regulations deprive the plaintiff of liberty in a fashion that imposes atypical and significant hardships on the inmate in relation to the ordinary incidents of prison life : Connor. Deprivation of life: Generally, not really an issue in administration proceedings. Administration action constitutes rulemaking (p.13) Instances where due process does not apply. Action occurs in emergency (p.14) Procedural due process are directed at adjudicative action and not agency rulemaking: As the Court put it in Bi-Metallic, where a rule of conduct applies to more than a few people, it is impracticable that every one should have a direct voice in its adoption. Florida East Coast suggests that a matter will most likely be considered rulemaking, as opposed to adjudicative, where it deals with large numbers of people, where it is prospective in application and where any factual imferences are directed to the formulation of basically legislative-like judgment rather than in adjudicating a particular set of disputed facts. On the other hand, as the Court suggested in Vermont Yankee, where a rule is effectively quasi-judicial and affects only a small number of persons who are exceptionally affected, in each case upon individual grounds, due process requirements must be imposed creating procedural safeguards analogous to those available in adjudications. Procedural due process rights may not be owed in emergency circumstances (p.14): The Court has indicated that in emergencies, deprivations of constitutionally protected rights may proceed in the absence of a pre-deprivation hearing, though a prompt post-hearing proceedings in likely required.

13 13 Agency adjudication cont d Content of procedural due process (p.14) Three prong test (p,14): In Mathews, the Court indicated that determining the sort of process due required a focus on three questions: 1) The nature of the interest affected. In Goldberg the Court indicated that the process due is influenced by the loss the person would suffer. 2) The risk of erroneous deprivation as a result of the procedures employed at present and the value of additional safeguards. 3) The governmental burden imposed by additional procedural requirements. Typical content of procedural due process (p.14): Several procedures are associated with due process. First, prior notice and an opportunity to be heard are required, though the precise fora in which the opportunity to be heard is given will vary. Second, due process requires an unbiased adjudicator. Federal statutory hearing rights Statute requires a hearing Statute does not require a hearing Is the hearing is on the record after opportunity for an agency hearing? (p.15) In Florida East Coast, the Court held that while the language in the statute needn t exactly match the language cited in the prior sentence, some clear expression of Congressional intent that such a sort of hearing be held must be found. Note that in Seacoast, the DC Court of Appeals held it was willing to presume, unless a statute otherwise specifies, an adjudicatory hearing subject to judicial review must be on the record. Yes Formal adjudication process on next page applies No Formal adjudication process on next page does not apply. Do the teachings in Califono apply (p.15)? Here, the Court appears to have found a statutory hearing right even absent express mention of these in the Act. The agency was empowered to recoup overpayments in disability benefits. The decision was made, in part, with reference to whether the recipient was at fault, a matter requiring assessment of credibility. Notwithstanding the absence of any reference to hearings, the Court concluded that the latter assessment required oral proceedings. Note that in Pension Benefits, the Court denounced this tendency to impose procedural requirements on an agency where no statute required the procedures at issue and constitutional due process matters were not in play.

14 Agency adjudication cont d Formal APA adjudication (p.15): Triggered where a statute other than the APA requires a trial on the record, per the discussion on prior page: 554(a). 14 Exceptions : (1) a matter subject to a subsequent trial of the law and the facts de novo in a court (2) The selection or tenure of an employee (3) Proceedings in which decisions rest solely on inspections, tests or elections (4) The conduct of military or foreign affairs functions (5) Cases in which an agency is acting as an agent for a court (6) The certification of worker representatives Initiation: Persons entitled to notice must be informed in a timely fashion of the time, place and nature of the hearing, the legal authority and jurisdiction under which the hearing is held, the matters of fact and law asserted: 554(b) Pleadings: The agency may, by rule, require responsive pleadings: 554(b). In any event, the agency must give the interested parties an opportunity to make submissions of facts, arguments, offers of settlement or proposals of adjustment when time, the nature of the proceedings and the public interest permit: 554(c)(1). Hearings: An agency is obliged to hold a hearing and issue a decision with notice and in accordance with the procedures in 556 and 557: 554(c)(2). Further, before a recommended, initial or tentative decision, the parties are entitled to an opportunity to submit proposed findings and conclusions, along with supporting reasons: 557(c) Presiding officer: The person presiding over the taking of evidence shall be the agency, one or more members of the body comprising the agency or one or more administrative judges: 556(b). This presiding officer has substantial powers to regulate the conduct of the hearing: see 556(c) Impartiality of presiding officer (p.16): The presiding officer must be impartial. The test applied by the DC Circuit, at least in terms of prejudgment, is whether a disinterested observer may conclude that [the agency] has in some measure adjudged the facts as well as the law of a particular case in advance of hearing it. Ex parte communication (p.17): The presiding officer must not consult with a person or party on a fact in issue without notice and an opportunity to participate being given to all the parties: 554(d)(1). Exceptions: Separation of functions (p.17); A presiding officer must not be subject to supervision or responsible to an agency employee engaged in the performance of investigative or prosecuting functions for an agency: 554(d)(2). This person must not participate or advise in the decision, recommended decision or agency review under 557: 554(d). (A) Determining applications for initial licences (B) Proceedings involving rates, facilities or practices of public utilities or carriers. (C) Agency or a member of the agency. Yet, while ex parte communications with the agency are permissible, Seacoast teaches that they may not obtain additional, off-the-record evidence from these people.

15 Agency adjudication cont d Ex parte communication rules under 557 (p.17). These rules apply no latter than the time the matter is noticed for hearing: 557(d)(1)(D). 15 Congressional exception: Persons other than the presiding officer are allowed to give information ex parte to Congress concerning the merits of the proceeding: 557(d)(2) Communications by interested persons: Interested persons are barred from knowingly making or causing to be made ex parte communications relevant to the merits of the proceedings to any agency member who may reasonably be expected to be involved in the decision: 557(d)(1)(A) Communication by agency members: Agency members who are or may reasonably be expected to be involved in the decision making process are barred from making or causing to be made to any interested person outside the agency ex parte communications relevant to the merits: 557(d)(1)(B) Obligation to disclose on the record: A member described above right who makes or receives a prohibited ex parte communication must place on the public record of the proceeding: all the written communication, memos stating the substance of all such oral communications and all written responses and memos in response to the communication. Show cause proceeding: Upon occurrence of a prohibited communication the presiding officer may require a party in violation to show cause as to why the proceeding should not be dismissed or otherwise adversely affected: 557(d)(1)(D). A violation may be grounds for a decision adverse to a party: 556(d).

16 16 Agency adjudication cont d Appearance and representation (p.17): A party may appear in person or be represented by counsel or, if agency rule permit, other qualified representatives. Persons compelled to appear before the agency may also be represented by counsel: 555(b). Evidence (p.18) Burden of proof: Unless otherwise provided by statute, the proponent of an order bears the burden of proof: 556(d). The Court has held that absent special circumstances, the standard of proof is preponderance of the evidence. Cross-examination: A party is entitled to conduct cross-examinations required for a full and true disclosure of the facts : 556(d). Rules of evidence: Rules of evidence in administrative proceedings are less strict than those applied in court. Agencies must have policies concerning the exclusion of irrelevant, immaterial or unduly repetitious evidence, but beyond that any oral or documentary evidence may be received. However, an order may not issue except on consideration of the whole record or those parts cited by a party and supported by and in accordance with reliable, probative and substantial evidence : 556(d). Hearsay evidence is admissible up to the point of relevance and so long as there existed some indicia of reliability: Richardson. Written evidence: Where the matter concerns claims for money or benefits or applications for initial licenses and so long as the party will not be prejudiced, the agency may adopt procedures for the submission or all or part of the evidence in written form : 556(d). Official notice (p.19): Where a decision is based on official notice of a material fact not appearing in the evidence in the record a party is entitled to rebut this holding: 556(e). Decisions (p.19) Record for decision: The record for decision comprises the transcript of testimony and exhibits, together with all papers and requests filed in the in the proceeding: 556(e). All decisions, findings, conclusions or exceptions are part of the record, as are reasons and the appropriate rule, order, sanction, relief or denial thereof: 557(c). Cases involving initial license The agency may issue a tentative decision or an employee may recommend a decision or this procedure may be avoided entirely where due and timely execution of the agency s functions imperatively and unavoidably so require: 557(b)(1) & (2). The presiding officer shall initially decide the case unless the agency requires the entire record to be certified to it for decision. Where an initial decision is made, this becomes the decision of the agency, unless there is an appeal to, or review on motion of, the agency: 557(b). Reasons (p.19): The record must include a statement of findings and conclusions, and the reasons or basis therefore, on all the material issues of fact and law, or discretion presented on the record : 557(c). Appeal (p.19): On an appeal of an initial decision, an agency has all the powers which would have in making the initial decision except as it may limit the issues on notice or by rule : 557(b). Before a decision on agency review of an initial decision, parties are entitled to submit proposed findings and conclusions or exceptions to the decisions or presiding officers, along with supporting reasons: 557(c). END

17 17 Judicial Review Suit for judicial review (p.26) Statutory Judicial Review (p.26): Statutory judicial review is judicial review governed by a special statutory review regime establishing unique judicial review procedures for the matter in question. Standing: Questions of standing are determined with reference to the statutory provisions creating the right of review, subject to Article III considerations concerning injury in fact. In theory, the zone of interest test developed in the APA context (see below) might not apply to statutory judicial review. However, despite citing authority suggesting an explicit grant of authority eliminates any prudential standing limitations and significantly lessens the risk of unwanted conflict with the Legislative branch, the Court applied this concept in Akins (supplement). Similarly, ripeness, to the extent dictated by Article III, seems a likely requirement (see below). Scope of Review: Clearly, the scope of review is determined by the statute. Note: Pacific States Box (CB 462), suggests that there may be a constitutional dimension to rational-basis review of administrative action. (p.39) APA review possible?: The presence of statutory judicial review does not necessarily preclude APA review, so long as APA review is not precluded per the discussion below: see Bennett Statutory Preclusion (p.27): 701(a)(1): In Abbott Labs (CB 919, NS 348), the Supreme Court held judicial review of final agency action by an aggrieved person will not be cut off unless there are persuasive reasons to believe that such was the purpose of Congress. Elsewhere, the Court refers to the need for clear and convincing evidence of Congressional intent to preclude review. The Abbott presumption notwithstanding, the Court has occasionally found implied preclusion. In Block (CB 843, NS 351), the Court was prepared to find certain parties precluded from judicial review, not by an express provision, but by a reading of the statutory scheme as a whole. Similarly, citing Abbott, the Court in Dunlop (CB 869) indicated in the absence of an express prohibition in the [Act], the [agency] bears the heavy burden of overcoming the strong presumption that Congress did not mean to prohibit all judicial review of [its] decision. Nevertheless, it concluded although no purpose to prohibit all judicial review is shown, a congressional purpose narrowly to limit the scope of judicial review can, and should, be inferred in order to carry out congressional objectives in enacting the Act. APA Non-Statutory Review (p.27): Where Congress has not created a special statutory review proceeding relevant to the subject matter, the APA provides a proper party may seek review by commencing any applicable form of legal action, including actions for declaratory judgment or various prerogative writes. Judicial review can also be conducted in criminal or civil proceedings for judicial enforcement, except where prior, adequate, and exclusive opportunity for judicial review is provided by law : 703. Note: the APA does not provide a chosen court with jurisdiction. It simply tells a court what it can do once jurisdiction is acquired. Therefore, a jurisdictional basis for the claim s presence in the chosen court must be found somewhere (i.e. federal question jurisdiction state, 28 USCA 1331) (NS 345, CB 833). Exemptions Committed to agency discretion (p.28): 701(a)(2): In certain limited circumstances, courts conclude that review is unwarranted because a matter has been committed to agency discretion. In Overton Park (cited at CB 852, NS 355), the Court concluded that that this provision applies where statutes are drawn in such broad terms that in a given case there is no law to apply. Where the Court has found that action is committed to agency discretion by law, it seems often to have arrived at this conclusion with reference not only to the breadth of the statute, but also with respect to other issues such as the nature of the delegated power. The DC Circuit, in Investment Co. (CB 860, citing Hahn, NS 357), applied a functional test to a determination of whether 701(a)(2) applied, holding that key considerations included whether there was a need for judicial supervision to safeguard the plaintiff s interests, the impact that review might have on agency responsibilities and the appropriateness of the matters at issue for judicial review. In Chaney (CN 876, NS 115), death row inmates sought to challenge an agency s failure to enforce an Act. The Court concluded that an agency s failure to initiate enforcement is presumptively unreviewable as a matter committed to agency discretion by law per 701(a)(2). (p.36)

18 18 Judicial Review cont d Standing (p.29): 702: suffering legal wrong or adversely affected or aggrieved Zone of interest (p.29): In Clarke (CB 961, NS 361), the Court concluded that the zone of interest test is not intended to be particularly demanding. It will bar standing only where the plaintiff s interests are so marginally related to or inconsistent with the purposes implicit in the statute that is cannot reasonably be assumed that Congress intended to permit the suit. Injury in fact (p.30): In Lujan v. Defenders, the Court held that injury in fact is an invasion of a legally protected interest which is (a) concrete and particularized, (b) actual or imminent, not conjectural or hypothetical. Injury in Fact requirements: Required by Article III Causation (p.31): In Lujan v. Defenders (CB 1002), the Court suggests for causality to exist, the injury has to be fairly trace[able] to the challenged action of the defendant, and not the result [of] the independent action of some third party not before the court. Redressability (p.32): In Lujan v. Defenders (CB 1002), the Court indicated it must be likely as opposed to merely speculative that the injury will redressed by a favourable decision. Redressability requires that the harm claimed be occurring or likely to occur or re-occur at the time of the filing of the suit, and not entirely in the past: Lyons (CB 994), Steel (CB 1120). Actions reviewable (p.32): 704: Final agency action for which there is no adequate remedy in a court. Agency (p.33): Does not include Congress, courts and a number of other bodies listed in 551(1). Nor is the President and agency: Dalton. Agency action (p.33): Includes the whole or a part of an agency rule, order, license, sanction, relief, or the equivalent or denial thereof, or failure to act: 551(13).

19 Judicial Review Cont d Finality (p.33): Except if provided otherwise in a statute, agency action is final, even if it hasn t been subjected to a prescribed form of reconsideration or agency appeal: 704. In Bennett (CB 1023), the Supreme Court concluded that two requirements must be satisfied for an agency decision to be final. First, the action must mark the consummating of the agency s decisionmaking process, it must not be of a merely tentative or interlocutory nature. And second, the action must be one by which rights or obligations have been determined, or from which legal consequences will flow. 19 Caselaw developed requirements Ripeness (p.34): The judicial power under Article III is limited to cases and controversies and thus disputes must not be merely abstract or theoretical. Ripeness often also reflects prudential considerations. Specifically, the consequences of agency action may become clearer over the course of its implementation and its reviewability enhanced. In Lujan v. NWF (CB 990), the Court observed a regulation is not ordinarily considered the type of agency action ripe for judicial review under the APA until the scope of the controversy has been reduced to more manageable proportions, and its factual components fleshed out, by some concrete action applying the regulation to the claimant s situation in a fashion that harms or threatens to harm him. Exhaustion (p.35): In Darby (CB 947), the Supreme Court held whether courts are free to impose an exhaustion requirement as a matter of judicial discretion depends, at least in part, on whether Congress has provided otherwise, for of paramount importance to any exhaustion inquiry is congressional intent. The APA also has a bearing on exhaustion. Section 704 states that an agency action is final for judicial review irrespective of whether the challenger has sought reconsideration or, subject to an agency rule to the contrary which also suspends the action, an internal administrative appeal. While the phraseology in 704 speaks of finality, the Supreme Court in Darby (CB 944, NS 374) held that this term annuls exhaustion concepts in these circumstances are well, so long as an agency rule does not require exhaustion of appeals. Thus, the non-exhaustion of administrative reconsiderations and appeals are not barriers to judicial review. Where review is sought while agency proceedings are still underway, courts will typically dismiss the action on exhaustion grounds. Exhaustion may also bar judicial review where a plaintiff challenges in court an agency decision they might have challenged via agency procedures earlier, but failed to do so. Record for review (p.36): In conducting judicial review, the court shall review the whole record or those parts of it cited by a party : 706(2). Review is to be conducted with reference to the full administrative record before the agency at the time of the decision.

20 Scope of review 20 Judicial review cont d Compel agency action unlawfully withheld or unreasonable delayed: 706(1): The APA s definition of agency action in 551(13) includes failure to act. In Hardin (CB 904), the DC Circuit concluded when administrative inaction has precisely the same impact on the rights of the parties as denial of relief, an agency cannot preclude judicial review by casting its decision in the form of inaction rather than in the form of an order denying relief. In practice, however, courts are usually more deferential of omissions than of acts. Courts have been more willing to step in where agencies fail to initiate rulemaking than engage in prosecutions. Review of agency legal interpretation (p.38). Note: Courts have not conclusively determined whether Chevron deference is proper in assessing agency interpretations of provisions circumscribing the bounds of agency authority, or confined to statutes the agency is entrusted with administering: CB 780. Has Congress directly addressed the precise question at issue? Congress has unambiguously addressed the issue The statute is silent or ambiguous with respect to the specific issue The court is to give effect to the unambiguously expressed intent of Congress. No Court intervenes Whether the agency s answer to the issue was permissible or a reasonable interpretation? Where a challenge really centers on the wisdom of the agency s policy, rather than whether it is a reasonable choice within a gap left open by Congress, the challenge must fail : Chevron (CB 764). Court does not intervene Yes Agency s application of law to the circumstances (p.38) Constitutionl: Pacific States Box (CB 462), suggests that there may be a constitutional dimension to rationalbasis review of administrative action. (p.39) Unwarranted by the facts to the extent that facts are subject to trial de novo by the reviewing court: 706(2)(F). De novo review is warranted only in two instances. First, when the action is adjudicatory in nature and the agency factfinding procedures are inadequate. Second, when issues not before the agency are raised in a proceeding to enforce nonadjudicatory agency action : Overton Park (CB 752).