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Politics 117a, Administrative Law
Fall 2007
Recent Supreme Court Cases:
The Role of Courts in the Administrative Process Problems with Statutory Vagueness Procedural Requirements for Agency Proceedings Sept. 10-17-Selected Cases to be Assigned Assessing the Constitutionality of the Administrative State Cases to be Assigned For Student Presentations Congressional Self-Aggrandizement Cases for Student Presentations Administrative Rulemaking and Adjudication We will begin week 1 on Wednesday, Sept. 5. Click on Week 1 on our home page to see what will be covered. I'll add specific case assignments as we go along. Formalism is strict construction, textual interpretation of the Constitution and statutory law. Justices and judges are not always consistent in following a functional or formal approach with the possible exception of Justice Scalia. Nor is it always clear whether one or the other method is the basis of an opinion, as with Rehnquist's seemingly textual and formal approach in Morrison v. Olson (1988) to uphold the Office of Independent Counsel . Scalia's formal approach in that case led to an opposite conclusion. The Schechter case is one of the most famous in constitutional law both for the Court's unanimous opinions on the meaning of the commerce clause and on constitutional requirements for the delegation of legislative power. The Schechter Rule forbids congressional delegation of its primary legislative authority which the Constitution gives to Congress exclusively. The Court found absolutely no discernible legislative standards to guide executive action in the statute, the National Industrial Recovery Act; nor were there any requirements for the President to make findings or follow other procedures that might have mitigated to Court's willingness to uphold the statute. As I pointed out in Week I Congress cannot and will not define delegation standards in most regulatory areas. To get around this dilemma the courts have generally accepted the substitution of procedural for policy standards to assure at least that administrative action is properly deliberative and fair to individual parties in adjudication. After the Schechter Congress inserted procedural requirements in all statutes delegating legislative powers to administrative agencies or the President. The Supreme Court never again declared a law unconstitutional for failing to follow the Schecher nondelegation Rule. What is the delegation issue in this case? Did Congress delegate its primary legislative authority to the Sentencing Commission? Exactly what are the law's delegation standards? If you were on the Sentencing Commission how would you follow those standards? Describe how Blackmun's opinion is "functional," not "formalistic." Contrast Scalia's formal approach with Blackmun's functionalism. Scalia concedes at p. 60 that Congress can and must delegate some law-making power to executive agencies and even to the courts. But that power must be related to executive and judicial actions, not a "pure delegation of legislative power [which is] precisely what we have before us." What makes in Scalia's view this delegation "pure" and therefore unconstitutional? Citing Justice Jackson Blackmun supports a flexible and workable, that is functional, view of the separation of powers. The separation of powers doctrine means simply that the "whole" power of one branch cannot be taken over by another. Creating a Sentencing Commission does not undermine the separation of powers by destroying the integrity of Congress or the judiciary. The Commission admittedly is in the judicial branch but does not exercise any judicial functions. So why is it there! I want you to compare this case to Chevron v. Natural Resources Defense Council (1984), p. 91. Justice Stevens wrote the Court's opinions in both cases. Was he formalistic in the Benzene case and functional in Chevron? The Chevron case is one of the most important in administrative law. Review it carefully and ask yourself the question: Are there any limits at all on the delegation of legislative power after Chevron? If Congress and the agencies can do anything that is reasonable where does this leave judicial review? How do courts decide what is reasonable? Note particularly Justice Stevens' acceptance of political incentives to delegate at p. 620. 2. Fahey v. Mallonee (1947), p. 89. 3. Kent v. Dulles (1958), p. 90. 4. Whitman v. American Trucking Association, Inc. 531 U.S. 457 (2001) 1. The Constitutionality of Empowering Agencies to Make and Enforce Regulatory Policy 37 American Trucking Associations, Inc. v. Environmental Protection Agency 38 American Trucking Associations, Inc. v. Environmental Protection Agency 46 Whitman v. American Trucking Associations, Inc. 48 Notes 56 a. Nondelegation and the Problem of Taxonomy 63 b. Delegation in the Cases-The Long Road to American Trucking 66 c. The Future of Non-delegation Doctrine 77 d. Comparative Insights: The Experience of Other Jurisdictions 83 a. Competing Views: Is the Regulatory State Constitutional? 102 Gary Lawson, The Rise and the Rise of the Administrative State 103 Bruce A. Ackerman, The Storrs Lectures: Discovering the Constitution 107 Peter L. Strauss, The Place of Agencies in Government: Separation of Powers and the Fourth Branch 109 b. Contrasting Methodologies 112 Today we will review cases involving congressional delegation of judicial power. Commodity Futures Trading Commission v. Schor 121 Notes on the Precedent Underlying Schor 127 Notes on the Future of the Public/Private Rights Distinction, and the Relevance of the Seventh Amendment 133 Cases The question simply put is the extent of congressional authority to delegate fact-finding finality to administrative agencies to determine private rights. "The award was made under the Longshoremen's and Harbor Workers' Compensation Act (Act of March 4, 1927, c. 509, 44 Stat. 1424, U. S. C. tit. 33, 901-950 (33 USCA 901-950)), and rested upon [285 U.S. 22, 37] the finding of the deputy commissioner that Knudsen was injured while in the employ of Benson and prforming service upon the navigable waters of the United States. The complainant alleged that the award was contrary to law for the reason that Kundsen was not at the time of his injury an employee of the complainant and his claim was not 'within the jurisdiction' of the Deputy Commissioner. An amended complaint charged that the act was unconstitutional upon the grounds that it violated the due process clause of the Fifth Amendment, the provision of the Seventh Amendment as to trial by jury, that of the Fourth Amendment as to unreasonable search and seizure, and the provisions of article 3 with respect to the judicial power of the United States"Federal Circuit Courts
Legal Research Resources
Federal & State Cases & Statutes Aids to legal
research
The United States Constitution Hieros Gamos Guide to Civil Rights Hieros Gamos Guide to Constitutional Law
Class Assignments Part I
Agencies and the Structural Constitution
Judicial Review and the Delegation of Powers to Administrative Agencies
Functionalism v. Formalism
Functionalism refers to constitutional and statutory interpretation that takes into account the realities of the political system and construes constitutional requirements accordingly.
The Schechter Rule For Delegation of Legislative Power
Review Schechter v. U.S. (1935), p.69, and Panama Refining Co. v. Ryan (1935), p. 69.
Ultra Vires Action
Unless Congress clearly defines its delegation standards the courts cannot determine ultra vires administrative action, that is action beyond statutory authority. Theoretically Congress must state its intent in an understandable way for the courts to do their job when parties challenge administrative actions on the grounds that they are ultra vires.
Yakus v. U.S. (1944), p. 71
Why did the Court uphold the statute against a Schechter challenge? Note Chief Justice Stone's functional approach.
1. Mistretta v. U.S. (1989), p. 74
Scalia's Dissent
I'm glad we have Scalia on the Court for this course. His opinions are always well reasoned if a bit formal, often witty, and right on the money.
The Separation of Powers Issue
Blackmun cites Madison to support a functional view of the separation of powers. Citing Humphrey's Executor v. U.S. (1935) citation of Madison, "while our Constitution mandates that 'each of the three general departments of government [must remain] entirely free from the control or coercive influence, direct or indirect, of either of the others,' ... the Framers did not require--and indeed rejected--the notion that the three Branches must be entirely separate and distinct." See in this regard The Federalist, papers 47-51.
Scalia on the Separation of Powers Issue
"I think the Court errs," writes Scalia in dissent, "not so much because it mistakes the degree of commingling, but because it fails to recognize that this case is not about commingling, but about the creation of a new branch altogether, a sort of junior-varsity Congress." p. 62.
Industrial Union Department, AFL-CIO v. American Petroleum Institute (1980), p. 58
This case is briefed in your Week I assignment page.
Other Cases
1. Lichter v. U.S. (1948), referred to at pp., 54, 78, 89. For extra credit look this case up in the U.S. Reports and be prepared to report to the class the facts, rule of law, and reasoning of the Court. This is an amazing delegation case in which Congress completely failed to define its legislative standard, "excess profits." Subsequently the agency did fill in the missing details and when the law was up for renewal Congress accepted the administrative standards. Then the Court upheld the law against a delegation challenge on the ground that since Congress years after the first law was enacted accepted the administrative definition of excess profits action taken under the first law met congressional intent!
Agencies and the Structural Constitution 35
2. Assessing the Constitutionality of the Administrative State 101
Sept. 19-24
We have now taken up the constitutional problem posed by congressional delegation of legislative power to the executive or administrative branches, and in the Mistretta case to the judicial branch.
Sec.3. The Constitutionality of Empowering Agencies to Adjudicate Individual Disputes 118
Assuming that the federal court may determine for itself the existence of these fundamental or jurisdictional facts, we come to the question, Upon what record is the determination to be made? There is no provision of the statute which seeks to confine the court in such a case to the record before the deputy commissioner or to the evidence which he has taken. The remedy which the statute makes available is not by an appeal or by a writ of certiorari for a review of his determination upon the record before him. The remedy is 'through injunction proceedings mandatory or otherwise.' Section 21(b). The question in the instant case is not whether the deputy commissioner has acted improperly or arbitrarily as shown by the record of his proceedings in the course of administration in cases contemplated by the statute, but whether he has acted in a case to which the statute is inapplicable....We think that the essential independence of the exercise of the judicial power of the United States, in the enforcement of constitutional rights requires that the federal court should determine such an issue upon its own record and the facts elicited before it.
In the review of the quasi judicial decisions of these federal administrative tribunals the bill in equity serves the purpose which at common law, and under the practice of many of the states, is performed by writs of certiorari. It presents to the reviewing court the record of the proceedings before the administrative tribunal in order that determination may be made, among other things, whether the authority conferred has been properly exercised. Neither upon bill in equity in the federal courts nor writ of certiorari in the states is it the practice to permit fresh evidence to be offered in the reviewing court. There is no foundation for the suggestion that Congress intended to provide otherwise in the Longshoremen's Act....Whatever may be the propriety of the rule permitting special re- examination in a trial court of so-called 'jurisdictional facts' passed upon by administrative bodies having otherwise final jurisdiction over matters properly committed to them, I find no warrant for extending the doctrine to other and different administrative tribunals whose very function is to hear evidence and make initial determinations concerning those matters which it is sought to re-examine. Such a doctrine has never been applied to tribunals properly analogous to the deputy commissioners, such as the Interstate Commerce Commission, the Federal Trade Commission, the Secretary of Agriculture acting under the Packers and Stockyards Act (7 USCA 181 et seq.) and the like. Logically applied it would seriously impair the entire administrative process. Eighth. No good reason is suggested why all the evidence which Benson presented to the District Court in this cause could not have been presented before the deputy commissioner; nor why he should have been permitted to try his case provisionally before the administrative tribunal and then to retry it in the District Court upon additional evidence theretofore withheld. To permit him to do so violates the salutary principle that administrative remedied must first be exhausted before resorting to the court, imposes unnecessary and burdensome expense upon the other party and cripples the effective administration of the act. Under the prevailing practice, by which the judicial review has been confined to questions of law, the proceedings before the deputy commissioners have proved for the most part noncontroversial; and relatively few cases have reached the courts. To permit a contest de novo in the District Court of an issue tried, or triable, before the deputy commissioner will, I fear, gravely hamper the effective administration of the act. The prestige of the deputy commissioner will necessarily be lessened by the opportunity of relitigating facts in the courts. The number of controverted cases may be largely increased. Persistence in controversy will be encouraged. And since the advantage of prolonged litigation lies with the party able to bear heavy expenses, the purpose of the act will be in part defeated. In my opinion the judgment of the Circuit Court of Appeal should be reversed and the case remanded to the District Court, sitting as a court of equity, for consideration and decision upon the record made before the deputy commissioner.
Commodity Futures Trading Commission v. Schor (1986), p. 121.
See also
Note virtually all statutes and after 1946 the Administrative Procedure Act provide for judicial review of agency decisions within the framework of legitimate cases and controversies, that is challengers must be injured or aggrieved personally. What did the difference between judicial review of agency quasi-judicial and rule-making actions? Can the courts exert greater and more meaningful review in the quasi-judicial than in the legislative realm?
The President under the Constitution is Chief Administrator in the words of the 1937 President's Committee on Administrative Management. Chief Justice William Howard Taft agreed in Myers v. U.S. (1927). Presidential powers, executive powers, include the power to appoint with the advice and consent of the Senate and the discretionary power to remove executive officials. Congressional interference with the President's removal power over executive officers is unconstitutional. Given Taft's Myers opinion explain the Court's opinions in Humphrey's and subsequent cases.
Humphrey's Executor v. United States (1935), p. 153.
Wiener v. United States (1958), p. 156.
Federal Maritime Commission v. South Carolina State Ports Authority (2002), p. 158.
Contrast this case with the presidential control cases above. Chief Justice Burger wrote in Bowsher that "The Constitution does not contemplate an active role for Congress in the supervision of officers charged with the execution of the laws it enacts." (p. 177.)
The opinion cites and discusses the Myers case at pp. 177-178, then concludes that the Constitution "does not permit Congress to execute the laws; it follows that Congress cannot grant to an officer under its control what it does not possess."
Note the Court's constitutional problem with the statute's provisions for removal of the Comptroller General. Again compare Myers v. U.S. with Bowsher. Why is the removal power solely executive? Because if Congress has the removal power it controls the agency. (p. 178.)
The Court concludes that "we see no escape from the conclusion that, because Congress had retained removal authority over the Comptroller General, he may not be entrusted with executive powers." (p. 178.)
Note Justice Stevens formalistic concurring opinion at p. 180. What makes it formal and not functional?
White argues that the law does not undermine the President's primary executive powers and responsibilities; therefore it is not unconstitutional.
Congress encroaches when it poaches on executive territory and indirectly interferes with the President's constitutional powers. Madison wrote in The Federalist, no. 51, cited by Justice Scalia at p.165, that each branch of government must have the "necessary constitutional means and personal motives to resist encroachment of the others." (I'm happy that the Supreme Court so frequently cites Madison's Federalist papers nos. 48-51 which have occupied a prominent place in the Woll American Government reader since 1962.)
The Appointments Clause of Article II provides that "Congress may be law vest the appointment of such inferior officers, as they think proper, in the President alone, in the courts of law, or in the heads of departments."
Chief Justice Rehnquist takes a textual but also a functional approach in reviewing the statute. He discusses and contrasts with the Morrison case the Bowsher, Myers, Humphrey's and Wiener cases at pp. 163-164. The real question, states Rehnquist, "is whether the removal restrictions are of such a nature that they impede the President's ability to perform his constitutional duty...." (p. 164.)
The Court held that the law did not undermine primary executive power. The President can upon a showing of good cause under the statute indirectly through the Attorney General remove the Special Counsel. The statute does not interfere with the President's powers and responsibilities faithfully to execute the laws. Nor does the law result in congressional usurpation of executive functions. The statute does not undermine the constitutional separation of powers.
He starts with a reference to Madison's argument in The Federalist, no. 51. He concludes that the statute is a congressional encroachment on executive power. "The context of this statute is acrid with the smell of threatened impeachment." Congressional investigations such as this one politically require the Attorney General to seek the appointment of an independent counsel. Congress is really directing the executive under the cloak of what purports to be a constitutional statute. "Congress has effectively compelled a criminal investigation of a high-level appointee of the President in connection with his actions arising out of a bitter power dispute between the President and the Legislative sBranch."( p. 166.) In short, Congress is directly exercising executive functions, the prosecutorial power.
Scalia flatly states that the power to prosecute is purely executive, and the Constitution delegates all executive power to the President. There can be no exceptions. What checks then exist of this executive power? "Under our system of government, the primary check against prosecutorial abuse is a political one." (p. 169.) Explain Scalia's argument here. Do you agree?
We will complete our overview of the separation of powers and move on to rulemaking and adjudication.Note first that this case involves an alien's statutory right to a suspension of deportation upon the Attorney General's finding that he/she meets statutory grounds for suspension. The grounds included a period of continuous residence in the United States, good moral character, and a finding that deportation would cause "extreme hardship."
As the text notes refusals to suspend were subject to judicial review, while suspensions were to be transmitted to Congress for review and subject to veto by the House or the Senate.
Chief Justice Burger took a formal approach to the case. He found that Congress exercised a constitutionally delegated legislative power under Article I "to establish a uniform Rule of Naturalization" in vetoing the Attorney General's action. A single chamber cannot legislate. The formal constitutional procedures must be following which are approval by both the House and the Senate and a presidential signature.
Contrast Justice Burger's formal opinion with Justice White's "functional" dissent. White argued that Congress has long used legislative veto provisions in over 200 statutes to fulfill its constitutional responsibility to control lawmaking. He continued, "The history of the legislative veto also makes it clear that it has not been a sword with which Congress has struck out to aggrandize itself at the expense of the other branches....Rather, the veto has been a means of defense, a reservation of ultimate authority necessary if Congress is to fulfill its designated role under Article I as the Nation's lawmaker."
To White, administrative rulemaking is lawmaking pure and simple. "If Congress may delegate lawmaking power to independent and Executive agencies, it is more difficult to understand Article I as prohibiting Congress from also reserving a check on legislative power for itself. Absent the veto, the agencies receiving delegations of legislative or quasi-legislative power may issue regulations having the force of law without bicameral approval and without the President's signature. It is thus not apparent why the reservation of a veto over the exercise of that legislative power must be subject to a more exacting test."
Consumer Energy Council of America v. FERC (D.C. Cir., 1982), p. 204.
The court found that a statutory provision for a one-house legislative veto over FERC rulemaking was unconstitutional congressional self-aggrandizement. Because the Constitution permits limits on presidential authority over independent agencies does not support direct congressional control over the agencies.
Read the case excerpt at p. 204-205 carefully. What is the difference between congressional control of the independent agencies through statutory standards and by the legislative veto. What again are Justice Burger's and Justice White's contrasting arguments on this point in Chadha?
Sec.
1. The Fundamental Procedural Categories of Administrative Action: Adjudication and Rulemaking 238
a. The Constitution 238
Londoner v. Denver 238
Bi-Metallic Investment Co. v. State Bd. of Equalization of Colorado 241
Notes on Londoner-Bi-Metallic 243
Notes on Procedures' Ends and Means 247
Sec.
1. The Fundamental Procedural Categories of Administrative Action:
Adjudication and Rulemaking-Continued
. b. The Fundamental Statute 252
Administration Procedure Act of 1946 252
Now review the APA provisions in sections 553, 554, 556, 557. What administrative procedures do they require for rulemaking and adjudication?
Turn once again to the APA section 706 and analyze the standards governing the scope of judicial review of administrative actions.
Londoner and Bi-Metallic establish the classic paradigm that defines and distinguishes rulemaking and adjudication and the procedures that must accompany each. Justice Kennedy cited and summarized the rule of law in both cases in his concurring opinion in Missouri v. Jenkins, 495 U.S. 33 (1990). The case reviewed a federal court order that required a local government body to levy higher property taxes to fund judicially mandated desegregation. Kennedy wrote
The nature of the District Court's order here reveals that it is not a proper exercise of the judicial power. The exercise of judicial power involves adjudication of controversies and imposition of burdens on those who are parties before the Court. The order at issue here is not of this character. It binds the broad class of all [Kansas City, Missouri school district] taxpayers. ...Bi-Metallic Investment Co. v. State Board of Equalization of Colorado (1915), p. 241.Taxation by a legislature raises no due process concerns, for the citizens "rights are protected in the only way that they can be in a complex society, by their power, immediate or remote, over those who make the rule." Bi-Metallic Co. v. Colorado State Bd. of Equalization. The citizens who are taxed are given notice and a hearing through their representatives, whose power is a direct manifestation of the citizens' consent. A true exercise of judicial power provides due process of another sort. Where money is extracted from parties by a court's judgment, the adjudication itself provides the notice and opportunity to be heard that due process demands before a citizen may be deprived of property.
The order here provides neither of these protections. Where a tax is imposed by a governmental body other than the legislature, even an administrative agency to which the legislature has delegated taxing authority, due process require notice to the citizens to be taxed and some opportunity to be heard. See, e.g., Londoner v. Denver.
Justice Holmes wrote the Court's opinion in Bi-Metallic while he dissented in Londoner. The Colorado legislature delegated taxing authority to the State Board of Equalization and the Colorado Tax Commission. They ordered a 40 percent tax increase on all taxable property in Denver.
Note that the legislature did not levy the tax but had delegated that power to administrative agencies. Holmes's argument seemed to hinge on the need for government efficiency and the impracticality of requiring hearings for each and every complainant affected. He concluded:
Where a rule of conduct applies to more than a few people, it is impracticable that everyone should have a direct voice in its adoption. The Constitution does not require all public acts to be done in town meeting or an assembly of the whole. General statutes within the state power are passed that affect the person or property of individuals, sometimes to the point of ruin, without giving them a chance to be heard. Their rights are protected in the only way that they can be in a complex society, by their power, immediate or remote, over those who make the rule. If the result in this case had been reached, as it might have been by the state's doubling the rate of taxation, no one would suggest that the 14th Amendment was violated unless every person affected had been allowed an opportunity to raise his voice against it before the body intrusted by the state Constitution with the power. In considering this case in this court we must assume that the proper state machinery has been used, and the question is whether, if the state Constitution had declared that Denver had been undervalued as compared with the rest of the state, and had decreed that for the current year the valuation should be 40 per cent higher, the objection now urged could prevail. It appears to us that to put the question is to answer it. There must be a limit to individual argument in such matters if government is to go on. In Londoner v. Denver, 210 U.S. 373, [239 U.S. 441, 446] 385, 52 L. ed. 1103, 1112, 28 Sup. Ct. Rep. 708, a local board had to determine 'whether, in what amount, and upon whom' a tax for paving a street should be levied for special benefits. A relatively small number of persons was concerned, who were exceptionally affected, in each case upon individual grounds, and it was held that they had a right to a hearing. But that decision is far from reaching a general determination dealing only with the principle upon which all the assessments in a county had been laid.