The administrative law of the United States encompasses a number of statutes and cases which define the extent of the powers and responsibilities held by administrative agencies in the United States.
Scope of administrative authority
The authority of administrative agencies stems from their organic statute, and must be consistent with constitutional constraints and legislative intent. Generally speaking, therefore, agencies do not have the power to enact a regulation where:
- The regulation is an unconstitutional delegation of power;
- Or the organic statute explicitly denies authority (Note that failure to grant authority in later legislative efforts is not dispositive);
- Or Congress has enacted a separate regulatory scheme;
- Or the regulation is not based on factual findings;
- Or the regulation is not pursuant to serving the "public convenience, interest, or necessity;"
- Or the regulation is outside the agency's statutory purpose as articulated in its organic statute.
Cases holding for agency authority:
- NBC v. US, holding that an agency may enact regulations in an area it is permitted to regulate, even if the regulations are not specifically authorized by statute, where the regulations are necessary to serve the agency's statutory purpose.
- US v. Southwestern Cable Co., holding that an agency may regulate technologies not contemplated in the statute where the technologies were unknown at the time of the enactment of the statute, and the regulations are necessary to serve the agency's statutory purpose.
Cases holding against agency authority:
Adjudicative versus rule-making acts
Agency acts are divided into two broad categories: rulemaking and adjudication. The scope of these two categories is defined in three ways:
Londoner/Bimetallic definition
Factors tending to make an act adjudicative in nature:
- Involving a small number of people
- Individuals involved are specially affected by the act
- Decision based on the facts of an individual case, rather than policy concerns
Cases in which an act was ruled to be adjudicative:
Cases in which an act was ruled to be rulemaking:
Administrative Procedure Act
According to section 551 of the Administrative Procedure Act,
- Rulemaking is "an agency process for formulating, amending, or repealing a rule."
- A rule in turn is "the whole or a part of an agency statement of general or particular applicability and future effect designed to implement, interpret, or prescribe law or policy;"
- Adjudication is "an agency process for the formulation of an order;"
- An order in turn is "the whole or part of a final disposition ... of an agency in a matter other than rule making but including licensing;"
Attorney General's Manual on the APA 14-15
- Rulemaking is legislative in nature because it operates in the future and is primarily concerned with policy considerations, while adjudication is judicial in nature, and primarily concerned with the conduct and rights of an individual relative to a rule;
- Rulemaking governs future conduct, while adjudications governs past and present rights and liabilities;
- Rulemaking issues relate primarily to policy, while adjudication issues relate primarily to evidence
Adjudication
Right to a hearing
There are three ways that an individual can attain the right to a hearing in an adjudicative hearing:
Right to a hearing based on Due process
There are three issues involved in the constitutional right to a hearing:
- Whether a hearing is required
- When the hearing must be held (pre-termination or post-termination)
- What the hearing must entail
Whether a hearing is required
Generally speaking, in order to gain the benefits of due process, a claimant must show that he had a property right in what he is being deprived of. Such a property right consists of a legal entitlement, or reasonable expectation of continued benefit from the government, whether in the context of government employment, welfare benefits, or licensing.
Government employment:
- To maintain such a claim, the claimant must show that he has a legitimate expectation of continued employment. Such an expectation can be established by showing:
- The terms of the statute or contract (for instance, if the statute or contract allows termination only for cause)
- Organizational policies and understandings (such as tenure policies) which lead to a reasonable expectation of continued employment (Perry v. Sindermann, 408 U.S. 593 (1972)
- However, employees are not entitled to employment simply by virtue of being employed.
- If one is employed at will, the employer holds the right to terminate at any time, with or without cause. (Bailey v. Richardson, 182 F.2d 46 (D.C. Cir 1950))
- Employees are not entitled to renewed employment when old employment expires (Board of Regents v. Roth, 408 U.S. 564 (1972))
Welfare benefits implicate due process.
Reputation alone does not implicate due process, but may implicate due process if some legal right is infringed.
- Paul v. Davis, 424 U.S. 693, holding that due process was not implicated where a man arrested but whose charge was outstanding complained about posters put up in stores which named him as an active shoplifter.
- Wisconsin v. Constantineau, 400 U.S. 433 (1971), holding that due process was implicated where the state posted an individual's name, resulting in a prohibition on selling alcohol to that individual.
- Nat'l Council of Resistance of Iran v. Dep't of State, holding that the designation of an organization as a terrorist organization implicated due process, because it affected the right to hold bank accounts or receive material support in the United States.
Which procedures are required
In determining which procedures are required, the Court is to balance three factors (Mathews v. Eldridge, 424 U.S. 319 (1976)):
- The interests of the individual in retaining their property, and the injury threatened;
- The costs of the process, and the interests of the government in efficient adjudication
- The risk of error due to inadequate procedures
Social security benefits
- Recipients are not entitled to a pre-termination hearing, but are entitled to a post-termination hearing (Mathews v. Eldridge)
Welfare benefits
- Recipients are entitled to a pre-termination hearing
Employment
- Where an employee has a property right in employment (as discussed above), he is entitled to a pre-termination hearing.
School suspension
- Students are entitled to presuspension hearing barring special circumstances. (Goss v. Lopez, 419 U.S. 565 (1975)
- The right is grounded in statutory right and compulary nature of education
- Suspension affects opportunities for future education + employment
- Only “an informal give and take between student + pupil” is necessary
'Corporal punishment in schools
- No due process protections are implicated (Ingraham v. Wright, 430 U.S. 651 (1977).
- Corporal punishment without a hearing is traditional – so the burden is on the proponents to show it is unreasonable.
- Tort remedy is sufficient to deal with cases of excessive punishment.
- Ex parte property confiscation hearings are inherently insufficient (United States v. James Daniel Good Real Property, 510 U.S. 43 (1993)
Applicability of APA
There are two broad approaches to determining formal adjudication under the APA: the Seacost Anti-Pollution League approach, and the Chemical Waste Management approach. As of March 2005, the Supreme Court has issued no definitive ruling on the issue.
Under the Seacoast Anti-Pollution League approach:
- The act is one of adjudication;
- and the adjudicative act is is required by statute to be determined on record after opportunity for agency hearing;
- Also, it will be under the APA if the it is subject to judicial review, unless otherwise provided by statute;
But:
- The precise words "on the record" are not required to be used to trigger the Administrative Procedure Act -- but it is an open question whether a public hearing requirement without "on the record" triggers the APA.
- Resolution of the issue turns on substantive nature of hearing Congress intended to provide.
Under the Chemical Waste Management approach, a statutory requirement for a public hearing does not automatically trigger formal adjudication procedures, but is merely one factor among several.
- Courts will generally defer to the agency's construction, based on legislative history, structural inferences, or exceptional circumstances
- Should the agency interpret the statute as not requiring formal adjudication, the burden will be on the proponent to show that it does
Third parties and intervention
Within the Federal APA, legal standing, or the right to to participate or intervene in an administrative hearing, is more liberally granted than legal standing in judicial hearings. To have standing in an administrative hearing, a party must:
- Submit a motion in writing with copies served to all parties named in agency’s pleading;
- Submit the motion as early as practicable before hearing
- Submit a motion stating specific facts demonstrating that applicant’s legal rights, duties, privileges, and/or immunities will be substantially affected by the proceeding or qualifies as intervenor under a statute or reg. (i.e “substantial affect by decision”)
However, in order to seek judicial review of the decision, a party must meet the requirements of legal standing according to article 3 of the U.S. Constitution.
Evidence and proof issues
Evidence and proof issues are slightly different in administrative hearings than in judicial hearings.
Rules of evidence
Hearsay may be admissible in informal administrative hearings, even where it would not be admissible in judicial hearings, as long as its admission is fundamentally fair. Specifically, hearsay in the form of medical reports may be admissible in Social Security review hearings, where the party adversely affected by the evidence has the right to subpoena the doctor, but does not exercise his right. Administrative hearings need not adhere to all the formalities of the judicial process, as long as they are fundamentally fair. Richardson v. Perales , .
Burden and standard of proof
According to Section 7(c) of the Act, 5 U.S.C. § 556(d), the burden of proof is on the proponent of a rule or order. The standard of proof in adjudicative actions under the APA is preponderance of the evidence. Steadman v. Securities and Exchange Commission , 450 U.S. 91 (1981) (inferring the standard of proof from legislative history, although it was not explicit in the statute itself).
Combination of functions
It is not a violation of the constitutional requirement of separation of powers for an agency to undertake both investigative and adjudicative functions, so long as the process used by the agency does not create an acceptable risk of bias. Withrow v. Larkin , 421 U.S. 35 (1975).
However, prosecutorial and judicial functions may not vest within the same person. Specifically, Federal Administrative law judges are not permitted to:
- engage in prosecutorial functions, or
- engage in ex parte communications with persons performing such functions, or *to be supervised by someone engaged in prosecutorial functions,
Also, individuals involved in prosecution functions may not participate or advise in the decision, nor may they recommend agency review, except as witness or counsel in public proceedings.
Finally, Administrative law judges may only be fired for cause and after review, and receive pay according to statutory schedules, to protect them from undue influence within their agency.
Bias
- "A fair trial in a fair tribunal is a basic requirement of due process. Fairness of course requires an absence of actual bias in the trial of cases." In re Murchison , 349 U.S. 133 (1955).
- The Court has demanded not only a fair proceeding, but also that " 'justice must satisfy the appearance of justice.' Offutt v. United States , 348 U.S. 11 (1954).
- When an administrative judge makes a public speech during the course of administrative proceedings which indicate a prejudgment of the case, that judge's continued involvement in the case after the speech is reversible error. Antoniu v. SEC , 877 F.2d 721 (8th Cir. 1989).
Ex parte contacts
- Unless otherwise required by law, an administrative officer in an adjudicative capacity may not engage communicate, directly or indirectly, in commection with any issue of fact or law with any agency, person, party, or their represenatatives, except on notice and opportunity for all parties to participate.
- This rules applies only during the pendancy of a case, not before.
- In order to overturn an order, the appellate court must find substantial prejudice .
Officers may, however, communicate with other agency employees about such matters.
Estoppel against the government
The government is not estopped from adhering to valid regulations, even when a government employee gives false information to an applicant in answer to an oral inquiry, except where the giving of that information explicitly violates a regulation. Schweiker v. Hanswen , 450 U.S. 785 (1981).
Document disclosure and open meetings
Under the Freedom of Information Act, federal agencies must disclose identifiable documents unless the documents fall under one of nine exemptions. The Government in the Sunshine Act provides that every portion of every meeting of an agency be open to public observation.
Administrative agencies do not have the power to issue retroactive regulations unless expressly granted that right in the organic statute. Bowen v. Georgetown Univ. Hospital , 488 U.S. 204 (1988).
Rulemaking
Scope and extent of rulemaking power
Federal administrative agencies have the power to promulgate rules that have the effect of substantive law. The power to do so stems from the agency's organic statute, and extends to all regulations necessary to carry out the purposes of the Act, rather than being limited to powers expressly granted by the statute. The power extends to substantive rules as well as procedural rules . National Petroleum Refiners Assn. v. FTC , 482 F.2d 672 (D.C. Cir. 1983), cert. denied, 415 U.S. 951 (1974). However, many states, such as Kentucky, have been less willing to allow their agencies to promulgate rules with the effect of substantive law.
However, agencies may not promulgate retroactive rules unless expressly granted such power by the organic statute. Bowen v. Georgetown University Hospital , 488 U.S. 204 (1988)
Type of rulemaking
There are two types of rulemaking, formal rulemaking and informal rulemaking. Rulemaking is considered formal where the organic statute requires that rules be "made on the record after agency opportunity for hearing" or where there is signficant legislative history to support such an interpretation. Without those, rulemaking is considered to be informal.
Informal rulemaking
Informal rulemaking is the process by which administrative agencies may promulgate substantive rules that have the force of law, provided the agency provides adequate notice and opportunity to comment on the proposed rules prior to their promulgation, and maintains an adequate record to allow for meaningful judicial review.
Notice
The issues involved in adequate notice are:
- The applicability of the notice requirement
- Where notice is required, the type of notice required under the circumstances
Applicability of the notice requirement
The notice requirement applies to all proposed rules, except
- Interpretive rules, general statements of policy, rules of agency organization, procedure, or practice, or where the agency finds that notice is impracticable, unnecessary, or contrary to the public interest.
- Interpretative rules are rules which interpret other rules, rather than having legal effect. Rules are not interpretive rules if:
- It would provide adequate legislative basis for enforcement action for other agency action, conferring benefits or ensuring performance of duties, or
- the agency published the rule in Code of Fed Regs, or
- the agency explicitly invoked its general legislative authority, or
- the rule effectively amends a prior legislative rule.
- Policy statements are tentative statements about future agency intent, but do not determinitively affect substantive rights. Agencies are not required to provide notice and opportunity to comment in these cases, but courts are less deferential in reviewing these rules than substantive rules;
Type of notice required
The proposed rule must be published in the Federal Register. Beyond this, there are two types of notice that are required in different circumstances:
- Notice that includes the terms and substance of the contemplated rule
- Notice that merely identifies the subjects and issues involved
The type of notice given is sufficient where:
- "Appraises interested parties of issues to be addressed in the rulemaking proceeding with sufficient clarity and specificity to allow them to participate in a meaningful and informed manner," and
- The final rule is a logical outgrowth of the original proposal. It need not be an exact replica of the proposed rule, but also may not deviate so sharply as to deprive the affected parties of notice and opportunity to respond by failing to fairly appraise them of the subjects and issues to be addressed
Comment
Generally speaking, agencies are required to give interested persons an opportunity to participate in r/m through submission of written data, views, with or without opportunity for oral argument.
In order for the opportunity to comment to be sufficient,
- Interested parties must be provided with the vital and central data on which the agency will rely in reaching its decision, to allow for meaningful comment;
- The agency must maintain sufficient record of the rulemaking proceedings to allow for meaningful judicial review. The record will be judged on the basis of what was available at the time the rule was prumulgated, and must demonstrate through a concise general statement demonstrating to the Court that it took all relevent factors into account in its decision, answering all vital questions (although it need not respond to every item of opinion included in submission to the agency) and explaining why it made the rule as it did.
- the agency need not provide an opportunity to be heard orally or personally cross-examine agency officials.
