Old Approaches For Determining Procedural Due Process

 Rights Only, Not Interests

 Concept:
 The only interests that are protected by the Due Process Clauses are those that are “rights.” Mere
deprivation of “interests” does not give rise to constitutional Due Process challenges. The rationale was
largely that you could not possibly be entitled to procedural protections if no procedures were due.
 Cases:
 Bailey v. Richardson (766-70): “Due process of law is not required unless one is being deprived of
something to which he has a right.” (Therefore, in situations such as “at will employment” where there
is no “right” for employment, there is no “right” for a fair trial.)
 McAuliffe v. New Bedford (771): “The servant cannot complain as he takes employment on the terms
offered him.” (There is a constitutional right to free speech, but not to “at will employment.”)
 Joint Anti-Fascist Refugee Comm. v. McGrath (771-73): “[T]he right to be heard before being
condemned to suffer grievous loss of any kind, even thought it may not involve the stigma and
hardships of a criminal conviction, is a principle basic to our society.” (This concurrence signaled a
movement away from only a consideration of rights.)
 Balancing of Public and Private Interests
 Concept:
 Court determines whether there is a protected interest by comparing the (1) the nature of the
government function involved and (2) the private interest that is affected by the government action. If
there is a protected interest then there is a right to procedural due process.
 Case:
 Cafeteria & Restaurant Workers Union v. McElroy (775)
 Protection of Privileges
 Concept:
 “Privileges” can be afforded the procedural protections embodied in the Due Process Clause; but only
if there is a “Grievous Loss” or an “Entitlement.”
 Cases:
 Goldberg v. Kelly (781)
 Grievous Loss: “The extent to which procedural due process must be afforded the recipient is
influenced by the extent to which he may be ‘condemned to suffer grievous loss,’ and depends
upon whether the recipient’s interest in avoiding that loss outweighs the governmental interest in
summary adjudication.”
 Entitlement: “[Welfare benefits] are a matter of statutory entitlement for persons qualified to
receive them. Their termination involves state action that adjudicates important rights.”
 Wisconsin v. Constantineau (789):
 Stigma: The brandishing of a person as unable to receive liquor was certainly a “badge of infamy”
that produced a “stigma” that was degrading to the individual. When such an individual
denigration comes about, then Due Process comes into play.
 Current Approach for Determining Procedural Due Process
 Is there a protected interest?
 Concept:
 Roth/Sniderman: It is the nature of the claimed interest, rather than the weight of the claimed interest,
which determines whether the interest is protected. Therefore, the only protected interests are those
included in the Due Process Clause, interests of property and liberty.
 This approaches resolves the ambiguity leftover from Goldberg about whether the court was
relying on the grievous loss or the loss of a statutory entitlement to trigger due process (in
Goldberg both occurred).
 Property Interests:
 A property interest occurs when a person has a “legitimate claim of entitlement,” that is the person
has an objectively reasonable expectation of obtaining the property.
 In order for a property interest to be implicated, there must be some source from which the
“legitimate claim of entitlement is derived.” (ex: contracts, statutes, regulations, etc.)
 Liberty Interests:
 Liberty interests are not narrowly define as physical liberty, but also include “[the] right to
contract, engage in common occupations of life, acquire useful knowledge, marry, establish home,
religion, one’s conscience, and things essential to pursuit of happiness.”
 If a liberty interest is being violated it is relevant how grievous that injury is.
 Grievous Loss:
 Since only interests in liberty and property now trigger PDP, it is not a determining factor how
grievous the loss is in a given case, even though the extent of the loss is still considered.
 Federalism Concerns
 Courts can be reluctant to read property and liberty rights onto the procedures of state run
insititutions. (810) Courts don’t want federal judiciary to effect local administrative practice.
 Cases:
 Board of Regents of State Colleges v. Roth (797):
 When addressing the property claim, the Court stated that the property interest in the teaching
position was defined by the contract giving rise to the appointment. Stated that because there was
no legitimate claim for entitlement under the K, there was no Due Process concern. Distinguished
from Goldberg because there the statute entitled benefits if they qualified, and no similar provision
entitled the plaintiff here.
 Perry v. Sinderman (805-808)
 When addressing the property claim, court stated that there was no explicit contractual claim on
point, and therefore there was room to determine whether or not there was an implied contractual
term providing for tenure. Stated that they needed to determine if that program existed, and if so,
then he would be entitled to the hearing (not automatic reinstatement)
 Town of Castle Rock v. Gonzales (808-09)
 Scalia explained that federal constitutional law determines whether an interest rises to the level of a
legitimate claim of entitlement, even if the entitlement is created by state law.
 Bishop v. Wood (809-10)
 SCOTUS will give deference to local judges in determining whether an ambiguous situation gives
rise to a property right. Figure it is a better way to determine whether plaintiffs determination was
objectively reasonable.
 Is individualized due process owed?
 Concept:
 For practical reasons, violations of all protected interests do not trigger PDP. Therefore, it must be
determined how many people have their interests affected and whether the interests were affected by
individualized adjudication or general rulemaking.
 Number of People Affected:
 Londoner/Bi-Metallic: Only if a small number of people are being deprived of their protected
interests is PDP owed, otherwise those who are affected should go to the political process.
 Individualized Adjudication v. General Rulemaking:
 Coniston: Only in cases of individualized adjudication is PDP triggered. For, it is only in these
cases that the decision relates to particular cases rather than general questions. Therefore, in cases
of adjudication pdp is due, but it is not with rulemaking.
 Who Is The Decisionmaker:
 Pro-Eco: When the decisionamker is an elected body, their decisions are legislative and
when the decisionmaker is an appointed one their decisions are adjudicative. Therefore, an
appointed decisionmaker will trigger pdp where an elected one will not (Pro-Eco).
 Conflict Number of People & Legislative/Adjudicative
 There is no clear SCOTUS ruling on this. The lower courts tend to favor the type of issue,
especially if the action applies generally on its face. However, the APA definition of rule (551(4))
would seem to be a counterfactual since it allows for rules to apply both generally and particularly.
 Cases:
 Londoner v. Denver (35-39)
 P only entitled to a hearing after they suffered a greater imposition than the community at large.
 Bi-Metallic Investment Co. v. State Bd. Of Equalization (39-40)
 The State Board of Equalization for Colorado passed an order to increase the valuation for all
taxable property in Denver by 40%. P, a property owner in Denver, brought a suit to enjoin the
Board from putting the order into effect as well as to enjoin the Denver assessor from obeying this
order.
 Court in MN State Bd. For Community College v. Knight (43)
 Coniston Corp. v. Village of Hoffman Estates (44)
 Court held that a city's Board of Trustees decision to deny a site plan was not a violation of the Due
Process Clause because the decision was legislative not adjudicative. The board did not operate
under stet criteria and reached its decision without giving a statement of reasons. Court stated that
this was a legislative decision and it is NOT required to judicialize zoning procedures, which are
probably not well suited for such a setting as the criteria to consider are open-ended and ill-defined.
 Pro-Eco, Inc. v. Board of Comm’rs of Jay County, Ind (44-45)
 City enacted a local moratorium ordinance on the construction of landfills. P wanted to open a
landfill and the moratorium was passed, according to the P, in response to the P's decision to open
said landfill. The court held, however, that the Board is an elected body and the moratorium
therefore was legislative, not adjudicative. The court stated that this was a broadly applicable
statute, and that even though it might have been passed in reaction to P, that P can hold the board
accountable at the polls/referendum.
 What is the extent of the individualized due process owed?
 Concept:
 Current Rule: The extent of PDP owed is now determined by a balancing test applied at a class-wide
level and not at an individual level, with the assumption that an evidentiary hearing is not required and.
The court will balance the following (Matthews):
 Private Interests:
 Consideration of private interest has a temporal focus on the interim (what is the value in
receiving benefits until the determination is made) and considers how adversely affected the
individual is. This is done at the level of the entire class and not the specific petitioner.
 Risk of Erroneous Deprivation and The Probable Value Of Additional or Substitute Procedural
Safeguards:
 Here the nature of the interest is considered in determining what level of DP will best address
the situation (ex: Is the individual claimant likely to hold information that is relevant to the
determination, or does that information more likely rest with other persons; Is the question
presented one that is amenable to documentation or scientific proof , or is it the type of inquiry
where there are serious issues of veracity; etc.).
 Government Interests:
  The government’s interest are considered at a purely procedural level (the fiscal and
administrative burdens of increasing DP) and at a substantive level (does the government have
a particular concern for a certain class of individuals or interests?).
 Dissenting Opinion
 Marshall’s Dissent in Roth: Liberty and property rights are so essential that their preservation
denies the need for interest balancing, or at the very least makes the personal interest so great it can
be outweighed.
 Reich article (790-91): Suggests recasting the benefits of a regulatory government as
property to ensure they are properly protected. This will serve to protect them as they
become increasingly important.
 What Should Count In The Matthews Three Part Test (841-43): Matthews balancing test might not
be complex enough, since it is asking such complex questions; Test starts out looking for greater
good, which is odd cause due process is supposed to protect individual rights; different parts of
Matthews may be incommensurable and so balancing may be impossible
 Comparison to The Old Rule: Previously, the court had balanced the individual’s interest against the
government’s interest, and then determined adequacy of existing procedures. These are very similar to
the factors Matthews balances. However, Goldberg did not really consider the value of different kinds
of procedure until after it weighed the individual harm against the government interest and then it
determined what procedure (oral hearing not written forms) was needed based on the qualities of
plaintiff/type of claim and not as part of the balancing test. This is different than Matthews, which
balanced the kind of procedure currently owed and possible changes while balancing government and
private interest. This reflects he main difference between the two cases, which is that the Matthews
court refused a full deprivation hearing every time government action threatens to cause significant
harm because it did not embrace a grievous loss approach to analyzing what due process was owed like
Goldberg had. In embracing this approach Goldberg was really making the decision based on the
extent of the individual’s interest.
 Cases:
 Decatur Liquors, Inc. v. District of Columbia (45): same kind of ruling as Bi-Metallic
 Matthews v. Eldridge (827): gave three factors for determining PDP
 Van Harken v. City of Chicago (839): recommended a cost-benefit analysis to complete the Matthews
analysis
 Cleveland Board of Education v. Loudermill (844): struck down “bitter and the sweet”
 Los Angeles v. David (852): allowed for time before hearing to be quite flexible based on p’s situation
and the government interest
 Wilkinson v. Austin (854): showed that government can do a poor job of using the Matthews factors
when the stakes are high
 Bitter With The Sweet
 Arnett: The idea is that property rights come with procedures providing for their limitation or deprivation.
You take the sweet of the property rights with the bitter that those rights contain the procedures for the
property to be taken or for property rights to be limited. When substantive property rights are given they
also include the procedural rights for their limitation (e.g. a contract saying you can only be fired for cause
and defining cause and how it is determined; with bitter with the sweet it would be ok if cause were
determined in a way that is not constitutionally appropriate).
 Loudermill: This case expressly denied this approach and it had only come up in part of the plurality
opinion in Arnett, it was never law.
 Arguments for and against:
 The argument against this approach, as given in Loudermill, is that certain rights including property
rights can only be deprived according to constitutionally appropriate procedures. Due process is
guaranteed by the constitution not by the specifics of legislative grace around a right.
 The argument for the approach is that the procedural and substantive aspects of a right are inseparable
and it is a mistake to try and separate the two. Instead, the procedure in part defines the substance of a
right.
 Rulemaking v. Adjudication & Formal v. Informal
 Concept
 Rulemaking is the formation of (1) general rules of conduct that are (2) forward looking. Adjudication is,
everything that is not rulemaking, but more specifically it is the application of general rules to specific
person usually in a retroactive manner (551).
 Formal proceedings require that the agency decision be based “on the record.” Whether a proceeding must
be based “on the record is determined by the organic statute. Informal Proceedings are those, which are not
formal, but more specifically looking at the APA. The difference is not the amount of information needed
but where it may be found.
 Cases & Statutes
 Rulemaking APA Definition:
 § 551(5): “rulemaking means agency process for formulating, amending, or repealing a rule.”
 § 551(4): “rule means 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 therefore or of valuations, costs, or accounting, or
practices bearing on any of the foregoing.”
 Adjudication APA Definition
 § 551(7): “Adjudication" means agency process for the formulation of an order.”
 § 551(6): “Order means the whole or a part of a final disposition, whether affirmative, negative,
injunctive, or declaratory in form, of an agency in a matter other than rulemaking but including
licensing.” (Licensing is the prescription of new rights going forward, so not all adjudication is
backward looking.)
 Formal Proceeding APA Definition
 Formal Rulemaking, § 553(c): “When rules are required by statute to be made on the record after
opportunity for an agency hearing, sections 556 and 557 of this title apply instead of this subsection.”
 Formal Adjudication, § 554(a): “This section applies, according to the provisions thereof, in every case
of adjudication required by statute to be determined on the record after opportunity for an agency
hearing...”
 Informal Proceeding APA Definition
 N&C Rulemaking: §553(c) “After notice required by this section, the agency shall give interested
persons an opportunity to participate in rulemaking through submission of written data, views, or
arguments with or without opportunity for oral presentation. After consideration of the relevant matter
presented, the agency shall incorporate in the rules adopted a concise general statement of their basis
and purpose.”
 Adjudication: § 555 See below.
Formal Informal
§553(a, b, d, e), §556, & §554, §555, §557
Rulemaking
§557
Adjudication §553 §555
 Deciding On A Mode of Policymaking
 Four Questions To Ask:
 Is agency position really a change in the existing legal standard?
 If so, is the change procedurally valid?
 If the change is procedural valid is it also valid on the merits?
 If it is valid on the merits, can the standard be applied to this particular party?
 Is agency position really a change in the existing legal standard?
 Determining Whether There Is A Change
 Shaws: Agencies do not have to “microscopically examine prior cases” to determine if there has been a
change in policy. Instead, the standard is whether the new policy departs from a “relatively clear line.”
 Notice & Explanation
 Shaws: When an agency changes the way it interprets or applies rules it must given an explanation for
this change (to allow for a&c judicial review) and notice of the change.
 Is the change procedurally valid?
 Generally Up To Agency Discretion
 Chenery II: “[T]he choice made between proceeding by general rule or by individual, ad hoc litigation
is one that lies primarily in the informed discretion of the administrative agency.”
 BUT Limitations on Retrospective Rulemaking
 Bowen v. Georgetown University Hospital: A rulemaking will only have retroactive effect where the
organic statute expressly authorizes the agency to perform such retroactive rulemaking, and in the
absence of such clear intent agencies cannot apply their rules in such a manner.
 Note that some rules can be remanded without being vacated this is particularly significant because
if a rule is remanded and not vacated then things that happen after that rule are not retroactive as
opposed to if the rule is vacated.
 Is the change valid on the merits?
 This will be determined through arbitrary and capricious review.
 Can the new standard be applied to this particular party?
 Retroactive Application
 Issues of First Impression
 Chenery II: On issues of first impression, agencies can formulate new legal rules and apply them
retroactively, unless the “mischief” of applying them retroactively outweighs the good done
through such retroactive application.
 Issues With Previously Establish Rule
 Epilepsy Foundation: If, however, there is a previously established rule and the agency is changing
its policy position on the issue through adjudication, retroactive application would likely cause
more “mischief” than good and so is not allowed.
 Bush-Quayle: This same idea applies to cases that were resolving the same issue differently in
the past and are change the approach without announcing a change (either through adjudication
or rulemaking). The court will determine whether there is a principled reason to distinguish the
new cases or whether the new approach is a&c.
 Issues Where Previous Rule Was Not Finalized or Was Invalidated
 Verizon Telephone Co.: If a prior rule was not finalized or invalidated by a court, an agency may
shift its position and apply the new rule retroactively.
 Relevant Factors When Considering “Notions of Equity & Fairness”
 Reasonableness of reliance on old standard/signals that a change may be coming
 Importance of new standard in regulatory context
 Nature of harm to party: e.g. paying money vs. disappointed expectations for future
 Prospective Application
 Adjudication
 Shell Oil Co. & San Luis Obispo Mothers: Agencies can use adjudication to establish prospective
legal norms; however, subsequent parties may challenge any factual conclusion/presumption that
was used to validate the legal norm from the prior case and therefore not be bound by the prior
 established prospective legal norm (this will end up requiring facts to be reconsidered in every
case).
 Rulemaking
 Nova Scotia: Once a rule is made, it operates prospectively both with respect to legal norms and
factual conclusions. If a party challenges factual conclusions of rulemaking, the initial challenge is
against the record from the rulemaking process. If that is upheld, then it is impervious to future
attacks.
 Concerns With An Agency’s Choice
 Process Concerns
 Informal rulemaking is the congressional favored method, in most cases, due to its extensive policy
requirements.
 However, due to the constraints listed above, the OIRA/OMB requirements, and the rigor of the Hard
Look standard agencies are incentivized to not use informal rulemaking because of the process and
time requirements necessary to finish the informal rulemaking process. Adjudications is much faster
and easier for the agencies.
 Vagueness Concerns
 The future application of rulings from adjudication is less clear than the future application of policy
promulgated through informal rulemaking.
 Retroactivity Concerns
 The “Retroactivity” Problem: Even if intended to have prospective application only, rules and
adjudication will have retroactive impacts all the time. There is, however, a distinction that is relevant
for determining when it is a problem:
 Primary Retroactivity: Has the effect of criminalizing or penalizing conduct that already occurred.
That is, you are punishing the actions that occurred before the new legal rule took effect.
(Georgetown Hospital or Epilepsy Foundation) This more problematic.
 Secondary Retroactivity: New rule has the effect of changing legal significance of actions you have
already performed going forward. That is, it changes the future legal significance of prior conduct,
but not for actions prior to the rule change.
 Preclusion Concerns
 Adjudication and rulemaking will have different preclusive effects on subsequent parties to the
litigation. See prospective application section above of all.
 Informal Rulemaking
Notice => Public Comment => Consideration => Final Decision (Concise General Statement)
 Fundamental Concerns
 When can you do it?
 Florida East Coast Railway Co.: Interpreted the language of §553, which requires formal rulemaking
“[w]hen rules are required by statute to be made on the record after opportunity for an agency hearing,”
to trigger formal rulemaking only if the statute explicitly states “after opportunity for an agency
hearing” and “on the record.” Therefore, formal rulemaking will almost never be required, since it
requires these "magic words."
 Limit on Judicially Imposed Procedures
 Vermont Yankee: Agencies and not the courts, determine what, if any, additional procedures beyond
what is required by the APA must be employed in the rulemaking process, unless there is some other
specific statutory constraint. Section 553 of the APA “established the maximum procedural
requirements which Congress was willing to have the courts impose upon agencies in conducting
rulemaking procedures,” and the judiciary cannot require agencies to adhere to procedures not required
by the APA.
 Procedural deference prevents the judiciary from importing their own beliefs and opinions into
agency decisions that they are not capable of deciding. Instead, the judges serve to protect the
procedures that best allow the agencies to exercise their own expertise. (134) The
counterargument is that the delegation of legislative powers by congress to agencies is a significant
one and therefore the judiciary must ensure that agency legislative power is used correctly.
Further, judges often have to gain a passing understanding of complex topics anyway, such as in
De Novo Review. (135)
 A view that dissents with Vermont Yankee states that, if we accept different rulemaking procedures
carry different stakes is a mistake to think that the APA can provide one set of procedures that will
be fair in all cases and so courts should be able to propose procedures. (130-31) counter is that
{court may be wrong that additional procedures are needed or with what those might be; might be
best for the agency to adopt the procedure w/out being ordered to do so; procedure determinations
were intended by the legislature to be made by the agencies in these cases})
 Notice of Proposed Rulemaking (NPRM or Notice)
 APA Requirements:
 553(b) requires that (1) notice shall be published in the Federal Register (unless persons subject thereto
are named and either personal served or have actual notice) and (2) shall include time, (3) place, (4)
nature of the rulemaking proceedings; (5) reference to the legal authority under which rule is proposed;
and (6) either the terms or substance of the proposed rule or a description of the subjects and issues
involved.
 General Rule (Logical Outgrowth):
 Natural Resource Defense Council: The final rule must be a “logical outgrowth” of the proposed rule
so that the final rule could be anticipated from the proposed rule, but the final rule does not have to be
identical (otherwise we'd have an endless review process). If this test is not passed the agency must re-
notice the proposal and allow comments on the revised version.
 Logical Outgrowth for an "Interested Persons":
 Alto Dairy: The test for logical outgrowth is whether an "interested person" would find the final
rule to be "reasonably foreseeable" not whether a member of the public at large would have
foreseen the change.
 Duty to Comment For Proper Notice:
 Long Island Care: Interested parties must comment during rulemaking, if they complain about the
application of the rule later. Cannot avoid commenting on the assumption they will receive notice
before the agency arrives at the final rule and then complain that the final decision is not a logical
outgrowth.
 Public Comment
 APA Requirements:
 553(c) “After notice required by this section, the agency shall give interested persons an opportunity to
participate in the rulemaking through submission of written data, views, or arguments with or without
opportunity for oral presentation.”
 Disclosure of Support for Agency Decision:
 Nova Scotia: Agencies must disclose the information they used to reach their decision, especially when
they relied on scientific materials for a scientific decision. "To suppress meaningful commentary by
failure to disclose the basic data relied upon is akin to rejecting comment altogether."
 America Radio Relay League: Upheld Nova Scotia disclosure requirements, even after Vermont
Yankee.
 Ober: If agencies receive additional information after the notice and comment period ends they must
reveal that information to the public.
 Rybachek: Disclosure is limited to those documents relied on by agencies during rulemaking that
are not authored by the agency, if the agency drafts documents responding to comment they do no
have to disclose those. This prevents an endless cycle of disclosure. (see ex parte section below for
more)
 Consideration/Post-Commentary Decision making:
 Ex-Parte Communications:
 APA Requirements:
 The APA discusses concerns of fairness with ex parte communications after notice and comment
(if they occur during notice and comment they just go on the record), but it doesn't officially
address them. Instead, these communications have been addressed through case law.
 General Rule:
 HBO v. FCC: Judicial review can’t be complete with ex parte communications after notice and
comment that were not placed on the record. Court banned all ex parte communications post notice
and comment (this has been limited to quasi-adjudicatory proceedings).
 Limit of Ban to Quasi-Adjudicatory Proceedings:
 ACT v. FCC: Ex-parte communications are allowed in cases of informal rulemaking that
are not quasi-adjudicatory. Whether cases are quasi-adjudicatory is determined by looking
to see where there are "competing claims to a valuable privilege" at issue. (San-Gammon
Valley)
 Ex Parte Congressional & Presidential Comments:
 Sierra Club v. Coste: Court allowed an exception for ex-parte communications with the president,
when the final decision was not based on data or information arising from those meetings.
 Sierra Club v. Coste: Allowed congressional communication, as long as the meeting isn't against
the general intent of congress and the congressmen keep their comments focused on substance of
the proposed rule (dismissing worries about congressional pressure).
 Exception for Agency Staff:
 United Steel Workers: The agency as a whole makes the final decision and so members of the
agency may communication with other staff.
 United Steelworkers: Agencies are not required to screen people in the agency who had previously
functioned in an adversarial manner to one side's cause.
 Prejudice by Agency Rule Makers:
 APA Requirements:
 None in this case. Prejudice is only addressed in cases of formal rulemaking.
 General Rule:
 C&W Fish Co.: Decisionmaker should be disqualified for prejudice only "where there has been a
clear and convincing showing that the [decisionmaker] has an unalterably closed mind on matters
critical to the disposition of the proceeding."
 No Requirement of Screening Procedures:
 United Steelworkers: Agencies are not required to screen people in the agency who had previously
functioned in an adversarial manner to one side's cause.
 No Requirement of Allowing Intra-Agency Petitioning:
  National Small Shipments Traffic Conference: No requirement in the APA for staff evaluations
beyond summaries to be considered.
 Concise General Statement:
 APA Requirements:
 553(c) requires that agencies include a concise general state of the basis and purpose of the rule in the
final rule. This statement must provide a sufficient explanation of how/why they reached their
decision, so that the reasoning behind the decision can be considered during possible judicial review.
 Must Address Major Questions:
 Nova Scotia: If commenters raised specific major questions during notice-and-comment then those
major questions must be addressed in the Concise General Statement.
 Must Address Major Statutory Objectives Served:
 Independent U.S. Tanker Owners Comm'ee: Concise General Statement must "indicate the major
issues of policy that were raised in the proceedings and explain why the agency decided to respond to
these issues as it did, particularly in light of the statutory objetives that the rule must be serve."
 Exceptions to Informal Rulemaking Requirements:
 APA Requirements:
 553(b) "Except when notice or hearing is required by statute, this subsection does not apply: (A) to
interpretive rules, general statements of policy, or rules of agency organization, procedure or practice
(Guidance Documents); (B) when the agency for good cause finds (and incorporates finding and a brief
statement of the reasons thereof in the rules issued) that notice and public procedure thereon are
impracticable, unnecessary, or contrary to the public interest."
 552(a)(1) still requires these to be published in the Federal Register
 Guidance Documents:
 What Are Guidance Documents:
 Documents that are exempt from Informal Rulemaking Requirements that suggest how the
agency/regulated community will/should act. By definition, they are not binding.
 APA Requirements:
 553(b)(A)Excluded from informal rulemaking requirements.
 552(a) Document must be (i) indexed and made available/published.
 The OIRA Good Guidance Practices require each agency to maintain a current list of such
guidance documents on its website and develop a way for the public submit comments
electronically and to submit a request electronically for issuance, reconsideration, modification or
recission of significant guidance documents (no formal agency response is required). Additionally,
notice and comment must be given for “economically significant” guidance (100 mill effect), and
to provide responses to received comments on their website. Lastly, senior agency officials should
approve significant guidance documents and post promulgation comment should be provided.
 Binding Nature of Guidance Documents
 Guidance documents, as interpretive rules are not binding, therefore someone charged with
violating them would still need to be charged with violating the authorizing statute.
 If a document is binding it must be promulgated under the notice and comment process and is not a
Guidance Document and exempt from Informal Rulemaking Requirements.
 Determining Whether A Document Is Binding:
 AG Manual Criteria:
 The AG Manual looks at the following criteria to determine whether a interpretive rule or statement
of policy is binding:
 What the agency calls it
 Whether it is published in the CFR
 Whether it uses mandatory language (purports to be binding)(GE v. EPA)
 Agency’s actual practice – is it treated as binding
 Whether agency decisionmakers remain free to exercise discretion differently (GE v. EPA)
 Whether agency is open to arguments for different outcome/approach (Center for Auto
Safety)
  Whether “fairly encompassed within existing statute/rule” or imposes new
rights/obligations/represents a change in existing law (Paralayzed Veterans)
 Whether agency would have adequate basis for enforcement action without it (i.e. fair notice of
prohibited/required conduct)(American Mining Congress)
 Determining Whether a Document is Binding Through the Language of the Document:
 GE v. EPA: If the language in the documents used is couched in mandatory terms, and therefore
imposes rights and obligations and removes agency discretion, it carries the force of law and
therefore needs to be promulgated under notice and comment rulemaking, since it would
reasonably be relied on.
 Center for Auto Safety: If the language in the documents leaves the agency with discretion, for
instance through permissive and not mandatory language, it is a policy statement. If all of the
affected parties voluntarily follow the statute that does not make it mandatory.
 American Mining Congress: A document is binding if, in the absence of the document, there would
not be adequate legislative basis to ensure the action stated in the document.
 Determining Whether a Document is Binding Through Agency Action:
 General Electric v. EPA: Even if the language of a document does not appear to mandatory, if the
language is applied as if it were mandatory then the document needs to be promulgated under
notice and comment rulemaking
 Determining Whether A Document is Binding Through Effected Party Action
 Center for Auto Safety: If all of the affected parties voluntarily follow the statute that does not
make it mandatory.
 “Fairly Encompassed”
 Paralyzed Veterans: An interpretive rule can be valid even if it clarifies preexisting vague statutory
duties or has the effect of creating new duties, provided the court concludes the interpretation is
fairly encompassed within the statute or regulation being constructed.
 Incentive to Publish Vague Rules & Issue Guidance Later
 This is similar to the problem w/agency interpretation (see Auer/SR)
 The requirements to determine if something is binding are meant to catch this, but they might not
always suceed
 Interim/Direct Final Rulemaking:
 Direct Final Rulemaking:
 Agency publishes in the Federal Register something that looks like the final rule and says if we
don't get significant negative comment w/in a time period then the proposed rule will take effect, if
there is a significant adverse comment the final rule is withdrawn an notice and comment process is
started.
 Interim Final Rule:
 Agency invokes the impracticability/contrary to public interest exception and puts out interim final
rule, usually inviting comment but making ruling final after receiving comment.
 Modern Informal Rulemaking In Action: Executive Order 12866
 Procedures Governing Rulemaking: A Step-by-Step Walkthrough
o First: Pre-Notice of Promulgating Rule Phase:
 Agency Decides to Make Rules due to: (1) Agencies own initiative; (2) Public Petition; (3)
Presidential Directive; or (4) Prompt Letter
o Second: Agency Planning Process – Formation of the Unified Agenda and Regulatory Plan
 Required by: Executive Order 12866.
 Requirements: See Section 4 of 12866
o Third: Agency Drafts Rule – Prepares Submission to OIRA for Review
 Required by: Executive Order 12866.
 Requirements: Need to formulate the substance of the rule that OIRA is going to review.
They could use negotiated rulemaking here if they decided. Although OIRA is supposed to
review once prepared, it is becoming increasingly common for OIRA to perform “informal
review,” where they comment on prior to submission, which can dramatically change
outcome since they catch the agency before they become too entrenched.
o Fourth: Agency Submits NPRM and Draft Regulatory Impact Analysis to OIRA
o Fifth: Agency Publishes NPRM and Regulatory Impact Analysis in Federal Register
o Sixth: Comment Period
 Required by: APA § 553(c); Executive Order 12866 §6(a)(1)
o Seventh: Agency Deliberation
o Eighth: Second Round of OIRA Review
o Ninth: Final Rule is Published in Federal Register
o Tenth: Rule Becomes Effective.
 Unified Agenda Requirements:
 Who?:
 All agencies must do Unified Agenda; “independent regulatory agencies and commissions” are
excluded from OIRA review, but some voluntarily comply
 What?:
 “Regulatory actions” (§ 3(e)) include proposed and final rules and must be identified to OIRA; for
“significant regulatory actions” (§ 3(f)), OIRA must get text, description of need, some assessment of C
& B, how action is consistent with statutory mandate and President’s priorities; for economically
significant actions, a detailed Regulatory Impact Assessment of costs, benefits, alternatives
 When?:
 Before a covered action is published in the Fed Register “or otherwise issue[d] to the public”
 Executive Order 12866 Text Overview
 Section 1: Regulatory Philosophy & Principles
 Regulatory Philosophy:
 Only promulgate rules as required by law and necessary by law/public need. Do cost-benefit
considering both tangible and intangible factors.
 Principles:
 Identify Problem it attends to address and its significance
 Examine Existing Regulations to see if they contributed to, created, or should be modified for new
goal.
 Consider alternatives to direct regulation (economic incentives)
 Consider risks posed by activities
 Effectuate Regulations in the most cost-effective manner (consider incentives for innovation, costs
of enforcement, etc.)
 Base decisions on the best obtainable scientific/economic info of the intended regulation or
guidance doc
 Shall identify and assess alternative forms of regulation; shall set performance objectives rather
than specifying behavior/manner of compliance.
  Assess costs/benefits (intangible and tangible) and design regulations in most cost-effective manner
and consider incentives for innovation, consistency, compliance costs etc.
 Seek views of State, local, and tribal officials if possible
 Avoid regulations and guidance that are inconsistent w/other regs and guidance docs
 Tailor regulations and guidance docs to impose least burden on society, including individuals.
 Draft regulations and guidance docs to be simple and easily understandable.
 Section 3: Definitions
 Regulatory Action:
 Any substantive action by an agency that promulgates or is expected to lead to the promulgation of
a final rule or regulation, including notices of inquiry, advance notices or proposed rulemaking, and
notices of proposed rulemaking.
 Significant Regulatory Action:
 Any regulatory action that is likely to result in a rule that may:
 Cost Trigger (Economically Significant Rulemakings): Have an annual effect on the economy
of $100 million or more or adversely affect in a material way the economy, a sector of the
economy, productivity, competition, jobs, the environment, public health or safety…
 Inconsistency Trigger: Create a serious inconsistency or otherwise interfere with an action
taken or planned by another agency.
 Budget Trigger: Materially alter the budgetary impact of entitlements, grants, user fees, or loan
programs or the rights and obligations of recipients thereof
 Novelty Trigger: Raise novel legal or policy issues arising out of legal mandates, the
President’s priorities, or the principles set forth in this Executive Order.
 Section 4: Planning Mechanism
 Agencies Policy Meeting:
 Early in the year the VP gets advisors of agency heads and coordinates agency priorities and goals
 Unified Regulatory Agenda:
 prepare agenda of all regulations under development or review at time/in manner specified by
OIRA (id number, summary of legal authority, any legal deadline, name and number of agency
official)
 Regulatory Plan (part of Unified Regulatory Agenda):
 Prepare plan of the most important regulatory actions that agency expects to issue in that fiscal
year, must be approved by agency head. (Unless authorized by agency head, no rulemaking shall
begin or be on plan w/out approval of agency’s Regulatory Policy Officer.)
 Plan’s Minimum Requirements
 Statement of objectives and priorities (and how they relate to President’s priorities)
 Summary of each significant regulatory action: alternatives, costs/benefits predictions
 Summary of legal basis
 Statement of need for such action
 Schedule
 Contact info
 OIRA and Other Agency Review:
 Regulatory Plan Must Be Sent to OIRA
 OIRA will send plan to affected agencies and VP
 If agencies think there will be a conflict they he tells OIRA in writing who tells the issuing
agency and the VP
 If OIRA thinks there will be a conflict with a planned agency action and the presidential
priorities, the principles in the EO, or with other agencies, then OIRA tells the agency and the
VP in writing
 VP may consult with agency heads and request further consideration or interagency
cooperatione
 Plans will be published in Oct publication of the Unified Regulatory Agenda and made widely
available
  Regulatory Working Group:
 Staffed by representatives of each agency that OIRA determines to have significant domestic
regulatory responsibilities.
 Group will be forum to assist agencies in looking at important regulatory issues.
 Section 6: Centralized Review of Regulations
 Agency Responsibilities
 Public Involvement: Agency will give public meaningful participation in the regulatory process
 Pre-NPRM: Agency should seek the involvement of those who are intended to be
benefitted/burdened.
 Post-NPRM: Agency should give period for meaningful commentary, which should normally
be not less than 60 days.
 Regulatory Policy Officer:
 Designate one of agency’s Presidential Appointees to be Reg Policy Officer
 Additional Rulemaking Procedures:
 Notify OIRA of Regulatory Plans: Will give OIRA a list of planned “regulatory actions,”
indicating important ones—only significant will be reviewed (review text, description of need
and how action will meet that need, costs and benefits analysi)
 Regulatory Impact Analysis:
 Additional Starting Info: (1) need to reasonably detail need for and (2) how proposed
regulation will serve the need.
 Additional Ending Info: Through decisionmaking process, need to develop (1) a quantified
benefits analysis; (2) a quantified cost analysis; (3) a cost-benefit analysis
 In Case of Emergency:
 When agency has to act quickly, notify OIRA ASAP and try to comply w/requirements
above.
 Publishing:
 After published in the Federal Register, need to provide this additional information for
“significant regulatory actions.”
 OIRA’s Responsibilities
 Provide guidance and oversight
 Only review significant actions
 Notify agency of review (1472)
 Provide explanations for remanding for further consideration
 Public disclosure reqs (1472-73)
 Section 7: Resolution of Conflict
 Disagreement btw agency heads or OMB and any agency that can’t be resolved by Admin of OIRA
shall be resolved by President or VP with the relevant agency
 Section 8: Publication
 Prohibition on Publication Until OIRA Finishes Review:
 Agency won’t publish in Fed Reg. any reg. action that is subject to review under Section 6 until:
 Admin of OIRA notifies agency of waiver of review or has completed review; or
 Time period in 6(b)(2) expires w/out OIRA having notified agency of return
 Executive’s Oversight Mechanisms (OMB & OIRA)
 OMB
 Office of Management & Budget: It is an executive office that controls agency submissions to
Congress of draft rules and, and budgetary requests; serves as tribunal for inter-agency conflicts are
resolved; develops management techniques for Exec branch
 Agency coordination is important function of OMB but is underappreciated by Court
 OIRA
 Office of Information and Regulatory Affairs: It is a sub-division of OMB responsible for coordinating
gov’t policy, including clearance of agency info demands under the Paperwork Reduction Act;
assembles governments regulatory agenda and clears regulatory impact statements that may
subsequently be prepared for particular rulemakings; often led by scholars
  Prompt Letters: letter from OIRA telling agency to rulemake on certain issue.
 Who Constrains What OIRA Is Doing?
 Political Process: vote out the President if you don’t like the way he sets OIRA loose.
 Judicial Review: only for constitutional challenge (DP Clause)
 Does OIRA Review Have An Anti-Regulatory Bias?
 John Graham says not true: pro-regulations during Bush admin
 Nicholas Bagley says yes: bc of its focus on costs, it rarely reviews inaction; OIRA’s review delays
action; prompt letter isn’t necessary a pro-reg tool—just an ad oh OIRA innovation not included in EO;
OIRA has focused more on making “hit list” of costly regs rather than prompt letters
 Congress’s Agency Oversight Mechanisms
 Appropriations
 BUT: Budget controlled by OMB (used to be in Treasury but moves)
 Confirmation (confirm head of OIRA—has been used to control what goes)
 BUT: President can usually work around this
 Oversight Hearings
 BUT: OMB must clear congressional testimony
 Generally has not been very effective
 Statutes (Hammer Statutes: “you will w/in X years make regulations on this.”)
 BUT: Difficult because the President can veto it and it is costly.
 Formal Adjudication
Actors Stage APA Directives
Interested Public
License Applicant Initiating Event None
Enforcement Staff
Agency Staff
Investigation 555(c-d)
Investigatory Subject
Agency Staff or Head Decision To Go
554, 558
Parties Forward/Notice
Parties
Agency Staff Pre-Hearing 554, 555, 557(d)
ALJ
Same Hearing 554(c-d), 556, 557
ALJ or
Initial Decision 554(d), 557, 558
Responsible Official
Parties
Agency Staff Administrative Review 557
Agency Head or Board
Same Judicial Review 706(2)

 When is adjudication Formal Adjudication?

 APA Requirement:
 554(a) Formal Adjudication applies "in every case of adjudication required by statute to be determined
on the record after opportunity for an agency hearing."
 Case Law
 No SCOTUS decision, three possibilities
 Defer to agency’s reasonable interpretation of organic statute (Chevron)—trend now
 Rebuttable presumption that “hearing” triggers formal adjud. except in ”business procedures”
situations – AG Manual/Seacoast Anti-Pollution League (269-72); previous dominant view
 Try to figure our what Congress intended in specific organic statute
 Chevron Deference:
 Dominion Energy: In the case of formal adjudication, if congressional intent is unclear and an agency's
interpretation of a statute that it administers is reasonable, an inquiring court must defer to that
interpretation.
 Judicial Elaboration:
 Citizens Awareness Network: This case is in the Vermont Yankee line, the courts are prohibited from
requiring additional process in formal adjudication beyond what is required in the APA or the organic
statute. There is no requirement for "formal discovery" or "cross-examination" if it is not required for full
and true disclosure of facts.
 Procedural Requirements for Formal Adjudication (Citizens Awareness Network):
 Agency must give notice of legal authority and matters of fact and law asserted (554(b))
 The oral evidentiary hearing must be presided over by an officer who can be disqualified for bias
(556(b))
 The presiding officer cannot have ex parte communications (554(d); 557(d)(1))
 When Prohibition Triggers:
 557(d)(1)(E): Restriction on ex parte communications begins either (1) when the agency issues
a notice of hearing or (2) when "the person responsible for the communication has knowledge
that [a hearing] will be noticed," whichever is earlier.
 What Triggers the Prohibition:
  PATCO: Ex-parte communications are defined as oral or written communications not on the
public record to which reasonable prior notice to all parties is not give, but not including
requests for status reports on any matter or proceeding.
 Individuals Outside the Agency
 PATCO: The limitation on ex parte communications with individuals outside the agency
extends beyond "facts in issue" to discussions "relevant to the merits of the proceeding."
 Individuals Inside the Agency:
 554(d), dealing with individuals inside the agency, is limited to "facts in issue and
participation or advice about the decision, recommended decision or agency review”
557(d) dealing with individuals outside the agency, does not have that limitation
 Who Triggers the Prohibition:
 Interested Persons Limitations:
 PATCO: Restriction on ex parte communications only applies to “interested persons.” A
person is an “interested person,” when they have “an interest in the agency proceeding that
is greater than the general interest that public as a whole may have.”
 Outside The Agency:
 Portland Audubon: Prosecutorial staff are not inherently considered outside of the agency,
but this is decided by regulation. Further, if an agency member attempts to influence the
agency determination, such as the president, that is an ex parte communication.
 President
 Portland Audubon: Presidential influence is also considered ex-parte communication, but
this case didn’t actually consider the president, just high ranking executive staff. So a little
unknown if the president himself had actually been involved.
 Remedy for Ex Parte Communication:
 Either:
 Agency discloses the communication “on the public record of the proceeding.”
(556(d)(1)(c)); or
 The agency can require an administrative hearing to determine why the claim by the
violating party should not be dismissed; (557(d)(1)(D)) or
 A violation of ex parte communication rules can also lead to a decision against the violator
(556(d)).
 If it is determined the ex parte communication “irrevocably tainted...the agency’s
decisionmaking process” making the agency’s actions unfair to an innocent party or the public
interest that the agency was obligated to protect, the agency decision can be invalidated.
(PATCO)
 PATCO: This involves weighing the effect of the communications, whether the party
making the improper contact benefited from the decision, whether the contents of the
communication were unknown to other parties, whether it would be useful to remand
the decision.
 There can also be criminal sanctions.
 Orders can be issued only on consideration of the record of the hearing (556(d))
 The transcript of testimony and exhibits is the exclusive record for decision and shall be made available
to all parties (556(e))
 The decision must include “findings and conclusions, and the reasons or basis thereof, on all the
material issues of fact, law, or discretion presented on the record” (557©(3)(A))
 Something More Than Conclusory Statements Are Required:
 Armstrong v. Commodity Futures Trading Comm’n: The agency’s reasoning must be able to
be derived from the opinion.
 Not Much Required:
 Colorado Interstate Gas Co.: A communication in whatever form that indicates precisely what
has been decided will suffice, provided that even if the decision is less than desirable the
agency’s reasoning can be derived.
 The proponent of an order has the burden of proof (556(d))
 Parties are entitled to be represented by attorneys (556(b))
A party is entitled to present oral or documentary evidence (556(d))
A party is entitled to “conduct such cross-examinations as may be required for a full and true disclosure
of the facts.” (556(d))
 Judge Cannot Be Responsible To or Subject to The Supervision or Direction of The Agent Engaged In
The Investigative or Prosecutorial Functions For the Agency
 A party is entitled to an impartial trier of facts
 Separation of Prosecutorial & Adjudicative Functions
 Grolier Inc.: Investigatory-prosecutorial functions are suppose to be separate from adjudicative
responsibilities. (554(d)) To violate 554(d) an agency employee must, in the same or factually
related case, (1) engage in investigative or prosecuting functions and (2) participate or advise
in the decision.
 Financial Basis
 Esso Standard Oil Co.: Having a direct pecuniary interest in the outcome of adjudication is
considered sufficient basis for finding bias and violates due process.
 Use of ALJ Expertise
 Central Platte Natural Resources District/FTC v. Cement Institute: ALJ can’t have prejduced
the precise facts at issue, but merely being exposed to or investigating the facts is ok and so is a
prejudgment of law and policy. The ALJ can just not have prejudged the precise facts at issue.
 Miles v. Charter: The ALJ also cannot have prejudged the quality of experts.
 FTC v. Cement Institute: The court is more lenient here when an adjudicatory commission has
to fufill multiple role and might have already investigated the facts they are hearing. If
disqualifying the commission would preven the adjudication of the issue the court will be
reluctant to do so.
 Notice?
 Courts can use notice to make evidentiary determinations.
 Castillo-Villagra: Agencies have the discretion whether to take notice, whether to tell the parties they
are taking notice and whether to allow rebuttal, but this cannot be allowed to outweigh fairness to the
individual. In this case the court "erred in taking notice of the change of government without providing
the petitioners an opportunity to rebut the noticed facts."
 Doctrine is based on the idea that reliance by the adjudicators on facts outside the record is unavoidable
and desirable. The scope of notice is not set in stone, but distinctions between legislative and
adjudicative facts, and between facts generally known, and those known only to some, used in the
Federal Rule of Evidence 201, are but factors to be weighed in the administrative context (Castillo-
Villagra)
 The fact that a judge has taken notice of a fact does not mean that the opponent is prevented from
disputing the matter by evidence.
 Comparison to Judicial Notice
 ALJ’s not reliant on FRE. FRE severly restricts taking notice for adjudicative facts (294).
 Informal Adjudication:
 When Is Adjudication Informal Adjudication?
 Typically, this is everything that is not formal adjudication and adjudication is everything that is not rule
making, so this is kind of a catchall.
 Judicial Elaboration:
 Pension Benefit Guaranty Corp: This case is in the Vermont Yankee line. Courts cannot require procedures
for informal adjudication, beyond what is required by APA 555 or the agency's organic statute.
 Marine Engineers Beneficial Ass’n v. Maritime Admin: This also applies to ex-parte communications,
unless they are forbidden by statute, they are not forbidden in informal adjudication.
 APA Procedural Requirements:
 Party is entitled to be represented by a lawyer or other qualified representative(555(b))
 So far as the orderly conduct of business permits a person is entitled to appear in appear in person for the
presentation, adjustment, or determination of an issue, request or controversy in a proceeding (555(b))
 Agency should conclude matters before it within a reasonable time (555(b))
 Friends of the Bow: As long as the agency concludes an action, they have never been found to violate
this rule.
 Parties who submit evidence/data can retain copies (555(c))
 Agencies must give prompt notice when they deny a petition made in connection with a proceeding and
give a brief statement on grounds for the denial (555(e))
 Roelofs v. Sec'y of the Air Force: This requirement applies whether the matter is one of discretion (e.g.
parole) or entitlement. However, all that is required is a statement of reasons for its action to prevent a
future determination that the decision was arbitrary and capricious.
 Extent of Explanation:
 Overton Park: Court prohibited post hoc rationalizations, stating that in cases with an
inadequate basis for review, the court could require the agency to provide a fuller explanation
of its reasoning.
 Process, subpoenas, and other investigative demands must be made in accordance with the law (555(c-d))
 No formal hearing requirement
 Florida Power & Light Co.: No formal hearing is needed for informal adjudication.
 Judicial Review of Ultimate Decision
 Substantial Evidence Review:
 When Does The Standard Apply:
 Applies in cases subject to 556/557 (formal) or otherwise reviewed on the record of an agency hearing
provided by statute (706(2)(E)). That is, it is the test for a determination of fact made in an on-the-
record, trial type hearing.
 Reasonable Factfinder Standard:
 Universal Camera: There must be sufficient evidence in the administrative record (Hearing Record) for
a reasonable factfinder to have reached the same decision as the agency.
 Deference To Agency's Expertise:
 Universal Camera: While agency's decisions are owed some deference, they must still be set aside
"when the record before a Court of Appeals clearly precludes the Board’s decision from being justified
by a fair estimate of the worth of the testimony of witnesses or its informed judgment on matters within
its special competence or both."
 Consider the Record As A Whole:
 Universal Camera: While the reviewing court is limited to considering the record from the hearing,
they must look beyond the part of the record explicitly discussed by the agency in supporting their
decision and must consider the balance of the entire record.
 Note that ALJ decisions are considered as part of the record.
 Universal Camera: The reviewing court will be more critical of board decisions that contradict ALJ
decisions, but agencies are not required to defer to ALJ decisions (557(b)).
 Penasquitos Village/Universal Camera: The reviewing court will be more critical of board
decisions that contradict ALJ “primary determinations” (e.g. that testimony was truthful) than
“secondary determinations” (e.g. policy determinations based on the facts or determinations not
based on facts a witness directly testified to). However, the reviewing court will be more
deferential to the board’s secondary determinations than primary determinations (deferring to them
unless they are irrational).
 Comparison to appellate review of trial court decision
 Dickinson v. Zurko: In the case of substantial evidence the agency only has to show that a reasonable
mind might accept the evidentiary record as adequate to support their conclusion. In the case of
appellate review the judge must meet the clearly erroneous standard and have a definite and firm
conviction that an error was committed. While the agency review is less strict the difference is so
small as to be meaningless.
 Arbitrary & Capricious Review:
 When Does The Standard Apply:
 Arbitrary and capricious review technically applies to all agency action (706(2)(A)). However, since in
certain narrow situations substantial evidence review is used (706(2)(E)) and other narrow situations de
novo review is used (706(2)(F)), arbitrary and capricious review only applies when these other
standards do not, which means it is applied in informal proceedings (substantial review is applied in
formal proceedings) that do no meet the de novo review requirements.
 Arbitrary & Capricious review applies when substantial evidence and de novo review do not apply,
which means it is applied in informal proceedings that do not meet the de novo review requirements.
 How does it compare to Substantial Evidence
 ADPSO v. Board: Other than being used in informal cases or formal cases not dealing with facts
and not having a formal record to review, arbitrary and capricious review is the substantively the
same standard of review as substantial evidence review.
 What Is The Standard?
 The actual standard is whether the agency action was arbitrary, capricious, an abuse of discretion, or
otherwise not in accordance with the law.(706(2)(A). Making this determination requires a “substantial
inquiry.” (Overton Park) In particular the reviewing court must take a “hard look” at the agency’s
findings and determine whether the agency has “examined(d) the relevant data and articulate(d) a
satisfactory explanation for its action including a rationale connection between the facts found and the
choice made.” (Motor Vehicles)
 What Is Reviewed:
 Overton Park: Since A&C review occurs in informal proceedings, there is no formal record to review,
unlike with substantial evidence review. The court therefore looks to the administrative record of the
hearing and specifically the findings of the board. If this administrative record/findings are not
sufficient to explain the judicial action then, either through affidavits or testimony, the court will get
the necessary additional explanations of judicial reasoning.
 San Luis Obispo: A strong showing of bad faith or improper behavior must be shown before there
is an inquiry into the mental processes of the administrative decision makers beyond what is stated
in their findings.
 Contemporaneous Record Reviewed:
 Chenery I: Court will not presume that facts existed to support the decision at the time it was made.
The facts supporting a decision must be on the record to survive arbitrary and capricious review.
The agencies decision will also stand or fall based on the reasoning it provides at the time of the
initial decision.
 Camp v. Pitts: As long as there is a contemporaneous record (not an Overton Park situation)
that shows what the agency considered that is sufficient, a formal finding by the agency is not
required.
 Hard Look Standard:
 Motor Vehicles: Courts performing arbitrary and capricious review of an agency’s action will take a
"hard look" at agency rationale to determine if the decision-making was adequate. There must be a
"rational connection between the facts and the choice made."
 Greater Boston TV Corp v. FCC: It used to be that the agency had to take a “hard look” at a
problem and now it is that the court has to take a “hard look” at the agency’s decision, but the end
result is the same.
 Can be summarized as requiring the agency to: give adequate consideration to the (statutorily) relevant
factors; engage in searching and careful inquiry into material facts and issues; consider, and explain
rejection of, alternative theories or approaches.
 Factors For the “Hard Look” Standard (Motor Vehicles)
 Whether the agency relied on factors which Congress did not intend it to consider (whether the
agency applied the correct legal standard)
 Whether the agency failed to consider an important aspect of the problem (those factors made
relevant under the correct legal standar)
 Whether the agency offered an explanation for its decision that runs counter to the evidence that
was before the agency (i.e. they ignored an obvious alternative)
 Whether the agency decision is so implausible that it could not be ascribed to a difference in view
or the product of agency expertise (i.e. there was inadequate consideration)
 Whether the agency shifted from a prior policy position: (this is an area of disagreement between
the judges)
 Changing Policy v. Refusing to Act:
 Motor Vehicles: An agency that is rescinding or modifying its policy is held to the
same standard as if it were promulgating a new rule. It is not entitled to the more
deferential standard that courts apply when an agency declines to act. The standard the
agency is held to is the a&c standard, which it must pass by providing a “reasoned
analysis” of its decision (this was widely understood as requiring agencies to base their
decisions in expertise and fact finding).
 No Need to Prove New Policy Is Superior:
 FCC v. Fox: An agency reversing its position does not have to meet a higher standard
than an agency promulgating a new rule and demonstrate "that the reasons for the new
policy are better than the reasons for the old one; it suffices that the new policy is
permissible under the statute, that there are good reasons for it, and that the agency
believes it to be better, which the conscious change of course adequately indicates."
(and that the agency is aware is making a change)
 The agency also does not need to rely on an expertise and fact-finding, unless "its new
policy rests upon factual findings that contradict those which underlay its prior policy;
or when its prior policy has engendered serious reliance interests that must be taken
 into account." In these cases the decision to rescind policy is not being held to a higher
standard, instead it is that a reasoned explanation is needed for disregard facts and
circumstances that were underlying the previous policy.
 Compatibility W/Vermont Yankee
 Motor Vehicles: Court denied that using hard look review was an encroachment on Vermont
Yankee procedural deference.
 Wisdom of Hard Look/Regulatory Ossification
 Some argue that the stringency of the standard makes new rulemaking very difficult, afterall hard
look standard is only applied after a rule has made it through a process of internal and external
agency review. This has only increased with Motor Vehicles shifting the group that must do the
hard look from the agency to the courts. Additionally, agencies must give considered responses to
any possible comment the court might make, this can lead to incredibly lengthy and detailed
statements rather than ones that are concise and general.
 The counter argument argues that there is no other good objective standard, a looser standard of
review wouldn’t necessarily mean the agencies would engage in looser review themselves, and
loosing hardlook would remove the increased transparency of agency decision making that comes
with the detailed responses necessary to meet a hard look standard.
 What Remedy Is Available When A Clear Explanation Is Provided:
 Chenery I: If the court disagrees with the agency's rationale or ruling it can remand the decision back to
the agency to fix the defect. This does not mean the decision will ultimately be different; it is possible
to have the same decision with different reasoning.
 What Remedy is Available When A Clear Explanation Is Not Provided:
 Overton Park: At this point the court will go to De Novo review (see below).
 De Novo Review:
 When Is It Available:
 Overton Park: Only available when (1) the action is adjudicatory in nature and the agency fact-finding
procedures are inadequate; or (2) when issues that were not before the agency are raised in a
proceeding to enforce non-adjudicatory agency action.
 What is the standard:
 De novo review means that the reviewing court consider the facts and reaches its own decision without
deferring to the conclusions of the agency.
 Standard of Review for Statutory Interpretations:
 Step 0: Did Congress Intend For The Statute To Resolve Statutory Ambiguity
 Chevron or Skidmore Analysis:
 Mead: If (1) Congress gave the agency authority to interpret the statute, as evidenced by the delegation
of authority to promulgate rules that carry out the force of law and (2) the agency has made an
appropriate formal ruling with a “lawmaking pretense” then we will go to Chevron step one, if not we
will use Skidmore. (Skidmore will probably apply if it is not n&c rulemaking or formal adjudication,
unless Barnhart is met)
 Did Congress Delegate Authority To The Agency Generally To Make Rules Carrying the Force of Law?
 Binding Effect/Precedential Value:
 Mead: If an agency's determinations are only binding on the parties that are before the agency and
lack prospective application towards others, it is unlikely that Congress delegated authority on the
issue.
 Christensen v. Harris County: Examples are opinion letters, policy statements, agency manuals,
and enforcement guidelines all of which lack the force of law (look out for Barnhart though).
 Rulemaking & Adjudication Authority:
 Mead: Congress's delegation of authority can be evidenced by (1) an agency's power to engage in
adjudication; (2) rulemaking; (3) or by some other indication of a comparable congressional intent.
 Level of Procedural Safeguards:
 Mead: If the agency's decision making process is highly informal, then it is unlikely that Congress
intended to delegate authority over this particular issue.
 Concentration of Agency's Decision Making Authority:
 Mead: If the agency's decision making process is highly diffuse, then it is unlikely that Congress
intended to delegate authority over this particular issue.
 Has The Agency Exercised Its Power To Promulgate Laws That Carry The Force of Law?
 Mead: Even when an agency can engage in notice and comment rulemaking, if they do not do so they
are not entitled to Chevron deference. Look to see whether the statutory meaning is announced in
notice and comment rulemaking or formal adjudication or the meaning is announced in a guidance
document.
 When It Does Not have to Be N&C Rulemaking or Formal Adjudication:
 Barnhart v. Walton: Consider the (1) interstitial nature of the legal question, (2) the related
expertise of the agency, (3) the importance of the question to administration of the statute, (4) the
complexity of that administration, and (5) the careful consideration the agency had given the
question over a long period of time. These might allow Chevron deference for non n&c
rulemaking or formal adjudication.
 Step 1: Did Congress Unambiguously Speak To The Question At Issue:
 Is Their Congressional Intent:
 Has congress "unambiguously directly spoken to the precise question at issue" or is "the statute silent
or ambiguous with respect to the precise question at issue?" If there is clear congressional intent it
controls (Chevron). Otherwise, Chevron deference assumes that a statutory ambiguity is an implicit
delegation by congress to the agency to fill in the gaps created by that ambiguity. This is decided
through “traditional tools of statutory construction.”
 Effect of Prior Judicial Determination of Congressional Intent:
 Brand X: A prior ruling only serves as a final determination of Congressional intent if the prior court
was also determining Congressional intent for this purpose and determined that the statute was
"unambiguous" in it is meaning.
 Problems of Deep “Economic & Political Significance”
 King v. Burwell: Congress does not always intend to create implicit delegation of interpretation
through statutory ambiguity. The Court claims that this delegation would not be implicit in cases of
deep “economic and political significance.” Instead, the delegation would need to be expressed
explicitly. Therefore the importance of the ambiguous terms must be considered.
  Determining Whether There Is Ambiguity
 King v. Burwell: Otherwise unambiguous terms can be ambiguous, if their apparently unambiguous
meaning produces a substantive effective incompatible with the rest of the law.
 Step 2: Is The Interpretation Deserving of Deference:
 Chevron Approach:
 Chevron: If the agency's construction is "reasonable" then the court must give the agency's regulation
deference, unless it is arbitrary, capricious, or manifestly contrary to the statute.
 Questions of Jurisdiction
 City of Arlington: As long as an agency is given by Congress the general power to administer a statute
through the promulgation of rules (Step 0), and as long as the meaning of the statutory provision in
question has not been definitively resolved by Congress (Step 1), the agency is entitled to deference as
to how to interpret and apply the provision. This essentially means agencies determine their own
jurisdiction, since general rulemaking is enough to confer deference for statutory interpretation.
 Skidmore Approach:
 Skidmore: If the agency's construction is "reasonable" then the court may give the agency's construction
effect. “The weight [accorded to an administrative] judgment in a particular case will depend upon (1) the
thoroughness evident in its consideration, (2) the validity of its reasoning, (3) its consistency with earlier
and later pronouncements, and (4) all those factors which give it power to persuade if lacking power to
control.”
 Politics W/Arbitrary & Capricious Review
 This mainly comes into play when determining Chevron Step 2. The question becomes what is the role of
politics in agency decisions after Motor Vehicles and how should courts think about this?
 Motor Vehicles expressly disallows agencies from relying on political justification for policy changes,
but agencies are part of the executive branch and created by the legislative branch, both of which are
publically elected. Therefore, it is naïve to suggestion that these agencies conduct evidentiary analysis
with no political goals in mind and that they were not created by a congress with political goals in
mind. (After all, one of the hard look requirements in Motor Vehicles is that the agency relied on the
factors congress intended it to.) This creates a strange situation where the agencies are hiding what is
probably most influential in their decisionmaking process by not mentioning political influence after
Motor Vehicles. Arguably, courts need to identify the political motivations behind agency
determinations and examine these because they ultimately may be more significant in informing the
agency’s final decision than the evidentiary determinations made by the agency. However, since this is
not currently done political motivations remain hidden and opaque. It might be better to have clear and
apparent political influences that the courts can review than denying the role of politics and having
these political influences hidden. The alternative of course is that courts have a very invasive review
where they truly try to root out all political influence.
 There is also the problem of judges applying their political views when applying arbitrary and capricious
review.
 The prevalence and significance of this problem is of course debated. It is argued that most cases are
simple enough that there is not much room for discretion, only in a small number of cases is their room
for the politics of the judges to come into play. However, it is more likely than not though that these
very hard cases are the one with the greatest long-term effects. At the appellate level decisions are not
decided by a single judge, so it is less likely politics will be the determining factor, due to the likely
competing political views of the panel. Not only are there disagreements on how common this there
are disagreements about its desirability. Some argue that decisions in difficult cases are inherently
political and political decisions are merely part of judicial function, since value judgments are intrinsic
in certain kinds of law. Further, some judges believe the public assessing the judges on political
grounds and assuming decisions are political encourages judges to make political decisions. Others of
course oppose this idea and want judges to work as neutral arbiters of face.
 Standard of Review for Agency’s Statutory Interpretation of Its Own Regulations:

 Auer/Seminole Rock Deference: An agency's interpretation of its own regulations are given controlling weight
unless it is “plainly erroneous or inconsistent with the regulations.”
 Pre-Chevron:
 Seminole Rock/Auer: Court stated that because the administrative agency came up with the meaning so
the meaning should be left to them, unless it is “plainly erroneous or inconsistent with the regulation.”
Congress specifically intended agencies to choose, so if there is a possibility that Courts would
misinterpret agency language courts should defer to the agency.
 Post-Chevron:
 Thomas Jefferson Univ.: Reaffirmed Auer. Stated that it was broad deference that would generally be
upheld, especially in cases where it is “a complex and highly technical regulatory program.” Court
reiterated the language that the interpretation will be given controlling weight unless it is plainly
erroneous or inconsistent with the regulation.
 Agency Regulations Parroting Statutes:
 Gonzales v. Oregon: The existence of a parroting regulation does not change the fact that the question is
not the meaning of the regulation but the meaning of the statute. An agency does not acquire special
authority to interpret is own words when, instead of using its expertise and experience to formulate a
regulation it has elected to merely paraphrase the statutory language. (this prevents a situation where an
agency would only get Skidmore deference when informally interpreting a statute, but would get Auer/SR
deference when interpreting its own regulation)
 One Bite of The Apple
 The DC Circuit tried to prevent this same problem with “one bite of the apple rule.” This docrine
refused to allow agencies to use an interpretive rule to alter an interpretation set out in a prior
interpretive rule (Paralyzed Veterans), but this has not been rejected in Perez v. Mortgage Bankers
Ass’n
 Stacking of Deference
 Coeur Alaska: First look to whether congress speaks to the precise question and resolves the
issue.(Chevron) Second, look to agency regulations, which are entitled to deference if they resolve the
ambiguity in a reasonable manner. (Chevron; Mead) Third, turn to agencies interoperations of their
regulations (Mead; Auer).
 Impending Demise of Seminole Rock/Auer
 A number of conservative SCOTUS judges, and others, have serious concerns with Auer/SR review.
 Since, an interpretive rule gets deference and people are bound to obey it on pain of sanction,
interpretative rules essentically have the same force as substantive laws. This is problematic because
agencies can avoid notice and comment (553(b)(A)) w/interpretations and are accorded great deference.
A lack of n&c was acceptable originally under the APA because 706 provides that “the reviewing court
shall ... interpret constitutional and statutory provisions, and determine the meaning or applicability of
the terms of an agency action,” implying that courts and not agencies shall should resolve statutory and
regulatory ambiguities. Yet, Auer/SR has given agencies this power, making a lack of n&c
problematic.
 “Further, the agency (not Congress) drafts the substantive rules that are the object of those
interpretations, giving (agencies) deference allows the agency to control the extent of its notice- and-
comment-free domain. To expand this domain, the agency need only write substantive rules more
broadly and vaguely, leaving plenty of gaps to be filled in later, using interpretive rules unchecked by
notice and comment.”
 This problem is also all the more important because of “the effective delegation to agencies by
Congress of huge swaths of lawmaking authority and the exploitation by agencies of the uncertain
boundary between legislative and interpretive rules,” which allows even more room for interpretations.
 Lastly, separation of powers concerns that Auer/SR undermines judicial check on political branches.
 Justiciability: Standing Requirements

 Standing Requirements Generally:

 Article III/Constitutional Requirements:
 These are the requirements that must be met to satisfy Article III's "case and controversy" language and
cannot be waived by the court. (Lujan)
 Injury: Individual must have actually suffered an injury in fact.
 Traceability: The injury that the plaintiff alleges must be traceable to the D’s action or inaction.
 Redressability: The stated injury must likely be redressable by judicial relief.
 Prudential Requirements:
 These are the requirements that have been adopted by the courts for the pragmatic reason of keeping
the courts functional and so can be overruled by statute.
 Third-Party Prohibition (no Just Tertii): In general, courts do not allow individuals to bring suit for
someone else’s rights.
 Generalized Grievance Prohibition: The asserted grievance must not be one that all people suffer
equally.
 Zone of Interests: The injury the plaintiff complains about must fall within the zone of interests
protected by the law invoked.
 The standing cases are virtually irreconcilable. However, generally, the court is much more likely to grant
standing in cases where there is a specific federal statute which grants standing. These statutes reflect
Congress’ desire that courts intervene and resolve disputes. Only in Lujan has standing not been granted in
one of these cases. Alternatively, when standing does not arise from such a statute, the court takes a much
narrower approach. This plays out as a separation of powers concern. Courts determination about whether
to grant standing is also greatly influenced by how the injury is framed (see below).
 Injury-In-Fact
 An Injury-In-Fact is an injury that is (1) concrete and particularized & (2) actual and imminent (neither
conjectural nor hypothetical; not abstract)
 Environmental Injuries (examples of citizen suits)
 Concrete & Particularized
 Sierra Club v. Morton: While noneconomic injuries (environmental, recreational, and aesthetic
injuries) can qualify for standing there must still be a particularized injury and a “specialized
interest” alone is not enough to qualify a noneconomic injury as an injury-in-fact.
 (Stigmitizations Not Enviromental)Allen v. Wright: Stigmatic injury accords a basis of standing
only to those who are personally denied equal treatment by the challenged conduct.
 Actual/Imminent
 Lujan: Plaintiffs must show they are actually/imminently harmed. “Some day” intentions do not
meet the actual and imminent requirements of injury-in-fact.
 Laidlaw: Direct intention to do something, if it weren’t for agency action/inaction is sufficient (we
would go to the river if it weren’t for the pollution as opposed to we might go to the river in the
future if it weren’t for pollution).
 Plaintiffs will need to show that they were directly injured and that the injury was actual/imminent and
not a “some day” injury.
 Congressionally Created Injuries (e.g. informational injuries)
 While the Court has recognized that Congressional Created Injuries can confer standing there is
debated about how these injuries must be manifested for standing.
 Trafficante/Havens: Allowed statutes to create an injury in a situation that otherwise would not have
been judicially cognizable.
 Lujan:
 Congressional created standing cannot dispense with the concrete injury requirement/injury-in-fact
requirement.
 The rest of the majority agreed congress could create an injury. Yet, while they don’t explicitly say
that such an injury can dispense with concrete injury requirements they held that statutory injuries
 must “identify the injury they seek to vindicate and relate the injury to the plaintiffs” (this is
narrower than the plurality’s ruling and is pretty much just a zone of interests argument).
 Atkins: Court granted standing to a group denied information, even though all voters could have
claimed the same harm. The Court justified this grant of standing by the fact that the standing was
created by statute.
 Bounty Provisions:
 Payable to Person:
 Steel Co. v. Citizens for a Better Environment: If Congress creates a private interest in the
outcome of a suit against a private party for the government’s interest (such as a private
bounty), then the plaintiff can state an injury, but the penalty must be payable to the individual
not the government, with the exception listed below.
 Payable to Government:
 Laidlaw: The individual doesn’t have to receive the bounty if the individual has suffered some
cognizable individual injury and the other standing requirements are met.
 Separation of Powers Concerns
 See generalized grievances
 Procedural Injuries
 Lujan: The violation of procedural rights alone is not sufficient to confer standing. However, if the
procedural right was designed to protect a substantive right, and it is “substantively probable” that the
violation of that procedural right injured that substantive right the standards of redressability and
traceability is relaxed. The argument is that without the need to tie the procedural requirement to a
substantive injury this would just be a generalized grievance.
 Liberal judges however want procedural injuries alone to be enough to confer standing.
 Distinct & Palpable Injuries (concrete/particularized problem w/citizen suits)
 The problems here are similar to those with environmental injuries. An injury must not only be
particularized, it also must be meaningful.
 The injury a party suffers by the mere “nonobservance of the law or constitution” is too abstract to
satisfy the injury requirement
 US v. Richardson: Injury resulting from the allegedly unlawful expenditure of tax monies did not
confer standing because of the “‘comparatively minute, remote, fluctuating and uncertain’ impact
on the taxpayer.”
 Allen v. Wright: Stigmatic injury accords a basis of standing only to those who are personally
denied equal treatment by the challenged conduct.
 Atkins: Gave standing to group denied information, even though all voters could have claimed the
same harm. Could be justified on the basis of statutorily created standing.
 Citizen Suits
 Allowed, but still have to satisfy standing requirements otherwise they are generalized grievances.
Specalized interests are not enough. So viable injury will have to be created through congress. Yet,
there is a limit on what statute can create. Question is whether it can drop concrete injury requirement
and overrule generalized grievance prohibition.
 Traceability
 Traceability is clear when the agency acts against the plaintiff directly (affirmative action cases), but is far
less clear when government action/inaction relates to a third party or only indirectly affects the plaintiff. At
this point there is a causal problem in tracing the harm to the plaintiff back to agency action.
 Linda R.S.: P lacked standing because she did not show that agency action or threat of agency action
was the cause of her injury, since her complaint was about the actions of a third party.
 EKWRO: P lacked standing because they could not prove that agency action caused a third party to act
in a particular way, rather than other causes.
 Laidlaw: P did not have to show that particular actions by a third party had caused them harm. Instead,
it was enough that the discharges directly affected the p’s.
 This area is divided among party lines. Liberal judges are much more likely to find a causal connection
between agency action/inaction and third party action.
 Redressability
  This is going to often be the same issue as traceability. If the relation between agency action and harm is
tenuous it is unlike judicial action can redress the harm.(EKWRO, Allen, etc.)
 Timing of Injury/Prospective Relief
 Laidlaw: If the injury was happening at the time of the complaint then the redressability of prospective
relief (injunctions as opposed to damages) is not difficult because the plaintiff is looking to change
ongoing action/inaction.
 LA v. Lyons/Steel Company: If the injury happened in the past and is not ongoing it might not happen
again in the future. Therefore, it is hard to prove that prospective relief will actually effect agency
action and redress the injury, since the agency might not have acted again in the future anyway.
Subjective apprehensions that an action will occur again are not sufficient for standing.
 Therefore, the best plaintiffs are those with recurring injuries, subjective apprehensions that an action
will occur again are not sufficient.
 Rephrasing The Injury To Meet Traceability & Redressability Problems
 Three Ways To State Injury
 Agency action/inaction caused third party to act in a specific way that caused harm to me (Linda R.S.,
EKWRO, Allen)
 Third party action caused me harm and that third party action was a result of agency action/inaction
(Laidlaw)
 Agency action itself caused me harm, no mention of third party action (Bakke, affirmative action cases)
 Only the last two work because they are the only way to avoid causation issues.
 Third Party Prohibition
 Allen v. Wright: In general, plaintiffs can only raise their own claims; they cannot raise the claims of
some third party who is also injured
 Generalized Grievance Prohibition
 Scalia tries to recast these as constitutionally and not just prudentially forbidden, so that they cannot be
overridden by Congressionally created injuries (or citizen suits). He does through a separation of powers
argument.
 Generalized Grievances are prohibited because they are viewed as a separation of powers issue.
 There is a concern that forcing agencies to hear cases concerning those who are not members of the
regulated community, or those with congressionally create injuries, forces the court to ignore the
Article III cases and controversies requirement. If the court grants standing in cases where the plaintiff
himself was not directly harmed, the court is allowing a plaintiff to influence the government beyond
how it affects him individually; this is the role of voting in politics. Therefore, if the judiciary hears a
claim from this individual they are hearing a claim that affects a majority interest (how the statue
affects everyone) and not a minority interest (how the regulated community is affected) and are leaving
their constitutional mapped domain of protecting minority rights.
 There is also the concern that courts and not the executive will be charged with ensuring that laws are
faithfully executed, this would be a violation of the take care clause. The claim is that granting
standing to those beyond the regulated community transforms the interest in the enforcement of laws
from an undifferentiated public interest to a private one vindicable in court. Doing so would pass the
enforcement of laws from the executive branch to the judicial branch and so violate the Article II "take
care" clause.
 There is a concern that granting standing to parties not directly regulated by statutes will force the
executive to respect the interest of “special interest” groups beyond the directly regulated community
and create polices that would not withstand the political process. (The counter argument is that this is
actually just making agencies enforce the law, just because the regulated community is not complaining
doesn’t mean the law is being followed.)
 Whether an injury is classified as a generalized grievance is determined based on judge's opinions about the
separation of powers. More conservative judges are more likely to read the other standing requirements
more harshly so that more plaintiffs fall under the generalized grievance category, while more liberal
judges read other standing requirements more generally and less likely to read plaintiffs as falling under
this category. This is a result of differing levels of concern about the separation of powers issue that lead to
the prohibition of generalized grievances.
 Zone-of-Interest Requirements
 This test was established to limit the role of the courts and therefore it will allow the requirement to be
rescinded by Congress.
 ADPSO v. Camp: Court has required that plaintiffs establish that their grievance fall within the zone of
interests protected by the statute. The test shows that, in general, it is insufficient to just show that you
have suffered an “injury” to a legal interest.
 CNI: Court suggested a liberal standard for applying the zone-of-interests test. A plaintiff only fails the test
when there is clear and convincing evidence of legislative intent to preclude review. The zone-of-interest
test “is not meant to be especially demanding,” and only precludes review when it "cannot be assumed that
Congress intended to permit the suit.”
 Justiciability: Reviewability Requirements

 Presumption of Reviewability Under the APA:

 Clear & Convincing Evidence Required:
 Abbot & 704: There is a presumption of reviewability for agency’s actions (unless they meet a 701
exception). Even, if it is not specified by statute that the agency action is subject to review, 704
establishes that “final agency actions for which there is no other adequate remedy” are subject to
review, unless there is “clear and convincing evidence” that congress intended to limit judicial review.
(contra see Block v. CNI)
 APA Exceptions to Reviewability:
 Statute Precludes Judicial Review (701(1)):
 Express Statutory Preclusion:
 Constitutional Challenges:
 Bowen & Johnson v. Robison: Even with express statutory preclusion of constitutional
challenges, courts are reluctant to allow the baring of such review and will try to work around
it.
 Habeas Cases: Court is especially reluctant to preclude review in habeas cases (Hamden)
 Statutory Challenges:
 Traynor: Court is reluctant to preclude judicial review of statutory application/interpretation by
an agency when the statute being reviewed is not one of the agency’s own.
 Factual Challenges:
 McNary: Courts are most likely to allow preclusions of review for purely factual
determinations.
 Questions Purely of Law
 Ins v. St. Cyr: Preclusion of review of a pure question of law by any court would give rise to
substantial constitutional questions.
 Implied Statutory Preclusion:
 How readily will courts do this?
 CNI: allows the finding of implied preclusion easily and only requires that intent to preclude
review is “fairly discernible,” only denying impress preclusion of judicial review when there is
“substantial doubt” about the intent to preclude review.
 Bowen/Abbot Labs have the opposite assumption and require “clear and convincing” evidence
of congressional intent before admitting implied statutory preclusion of judicial review.
 Statutory Silence:
 Abbot Labs: Statutory silence for a particular agency coupled with express allowance of
judicial review in other cases is not enough to preclude reviewability in this case.
 Structure of State & Legislative History
 Bowen: When there is an intentional shift in language in statutes, this does allow implied
preclusion, but only after a careful study of legislative history.
 Committed to Agency Discretion
 Reconciling 701(a)(2) with 706(2)(A)
 701(a)(2) say that there is no review for agency actions “committed to agency discretion by law” and
706(2)(a) says that courts must set aside agency actions which are a&c.
 There are three main ways to resolve this disagreement.
 The first is to say that an abuse of discretion is always reviewable, but that courts must respect
lawful exercises of discretion.
 The second is that there is no review of discretion only in those cases when there are no standards
in the organic statute to measure an abuse of discretion.
 The third is to take 701 at its word that some abuses of discretion aren’t correctable and aren’t an
appropriate area of judicial oversight.
 The court has gone more or less with the second approach phrased as the “no law to apply”
standard and read “no law to apply” as no law for the judiciary to apply in review not no law for
 the decisionmaker to apply (can fire when it is in the best interest of the country is law for
decisionmaker and not for courts).
 No Law to Apply Test
 Overton Park: In the case where the reviewing court has no “law to apply,” since the agency
decision is a purely discretionary one, the agency’s decision is non-reviewable because courts are
committed to agency discretion.
 Colorable Constitutional Claims
 Webster: If the plaintiff asserts a constitutional claim, then even if the statutory claim is
discretionary, the constitutional claim is reviewable. (see Bowen, for how explicit the
legislature needs to be to preclude judicial review of constitutional issues)
 Decision Not To Take Enforcement Action
 Heckler v. Chaney: As a general matter, an agency’s decision about whether or not to pursue
an enforcement action is committed to the agency’s discretion.
 Exception
 The exception to this is when congress limits an agency discretion by (1) setting
substantive agency priorities; or (2) circumscribing an agency’s power to discriminate
among issues or cases it will pursue.
 Refusal to Initiate Rulemaking:
 MA v. EPA: “In contrast to nonenforcement decisions, agency refusals to initiate rulemaking
are less frequent, more apt to involve legal as opposed to factual analysis, and subject to special
formalities, including a public explanation.” This review is typically limited, however. The
agency decision is reviewed under a “highly differential standard.”
 Refusal to Spend Money
 Lincoln v. Virgil: Unless Congress has specified how funds (in which case there is law to apply
and the possibility of review) are to be used, the decision on how to use agency funds is up to
agency discretion.
 Nondelegation
 If there is “no law to apply” the delegation of authority to the agency may be unconstitutional
under American Trucking because the agency arguably does not have an “intelligible purpose.”
 Justiciability: Timing Requirements

 Exhaustion
 Overview:
 If the agency has internal procedures for remediating errors that should be used before coming to the
court those must be pursued.
 APA Approach:
 Darby: Under APA 704, a person aggrieved by an agency action can seek judicial review of the action
without exhausting an available administrative appeal, unless a statute or the agency’s regulations
provide both that (1) an administrative appeal must be taken and (2) during the appeal the agency will
be inoperative.
 Common-law, Prudential Exhaustion Doctrine
 Ticor, court will engage in prudential multi-factor balancing tests to determine the applicability of
exhaustion doctrine, rather than just looking at the statute or rule as was done in Darby.
 Finality
 Overview:
 If an agency action is to be reviewed, it must be an action that is complete and authoritative. If the
agency is still in the process of reaching a final determination, for instance, if the determination is only
a preliminary decision during adjudication, it is not yet final.
 Analogy to Interlocutory Appeals:
 FTC v. Standard Oil: court reluctant to review issues, when that review might have an interlocutory
effect
 Multiple Regulatory Agencies
 Franklin v. MA: When multiple agencies are involved in a regulatory agency the court will generally
wait for the final actor to act.
 Ripeness
 Overview:
 The primary question is whether the potential injury is too speculative, and so the court would not have
an inadequate factual record for review and.
 Ripeness concerns overlap with injury-in-fact concerns. Both ripeness and injury-in-fact standing
analysis turn on whether a threatened injury to a plaintiff is sufficiently concrete and imminent to be
regarded as a case or controversy.
 Dual Inquiry
 Fitness of Issue For Review
 Abbot: Courts must determine if (1) is the challenge one that is purely legal or is the challenge one
that would require further factual development; (2) would the court or agency benefit from
postponement (to see the effect of the action)
 Hardship to Plaintiff
 P must be faced with some hardship as a result of agency action (explicitly cannot be economic
cost of litigation). The worse the greater hardship the more likely the claim is ripe. Therefore, the
court will consider the nature of the agency action – will it require an immediate change by P or
just cause a possible future effect (see pre-enforcement challenges discussion below)- and the court
will consider the burden of compliance and the risk of non compliance – what is the cost of
complying with the action and what are the sanctions for noncompliance.
 Pre-Enforcement Challenges
 Regulated Community
 Abbot & Toilet Goods Ass’n:
 If a promulgated rule requires that the regulated community take steps immediately to avoid
running afoul of the regulation, there is less of a benefit from postponement of review. If the
regulation requires immediate action for compliance, then this will place the regulated
community in a bind – either run risk of enforcement action or incur costs of compliance.
Either way, they face a clear hardship.
  If, a new rule would not modify any existing day-to-day operations, but only may result in any
change to the regulated community, then there is a benefit from postponement of review
because the hardship suffered by the plaintiff is less apparent/severe.
 Nova Scotia:
 In some cases, it may make sense to challenge after the enforcement action; in cases where the
general rule is appropriate, but it was not appropriately applied.
 Intended Beneficiaries
 Lujan: As an agency’s decision to pursue an enforcement action is committed to their discretion
and therefore non-reviewable, and furthermore because they would have no room to intervene in an
enforcement action, if pre-enforcement review were barred due to not being ripe, intended
beneficiaries would lack standing to challenge any agency action. Scalia seems to be moving this
way.
 Timeliness Concerns:
 Eagle-Picher Indus.: If there is a statutory limit for brining actions that may bar an action if the plaintiff
needs to wait for ripeness then just go ahead and file. “If there is any doubt about ripeness of a claim,
petitioners must bring (their claim)… or risk being bared.”