Legislation And Regulation - Outline - Spring 2014 6y16a

Legislation and Regulation Outline 1)

The Legislative Process and Statutory Interpretation...................................................2 a) Introduction (U.S. v. Kirby, TVA v. Hill)...................................................................2 b) Text and Purpose: the Classic Approach (Riggs v. Palmer; Holy Trinity)................2 c) New Textualism (WVUH; Brogan)...........................................................................3 d) New Purposivism/Judicial Correction of Legislative Mistakes (General Dynamics Land Systems v. Cline; Public Citizen; US v. Locke; Bock Laundry)..............................5 e) What is the Text? (Nix; Moskal; Smith v. US; Muscarello)......................................7 f) Legislative Intent/Legislative History (Blanchard; Continental Cal; Moore v. Harris; Montana Wilderness Ass’n)................................................................................9 g) New Synthesis (Allapattah; Corning Glass Works)...............................................12 h) Dynamic Statutory Interpretation...........................................................................13 i) Changed Circumstances/Stare Decisis (U.S. v. Marshall; Bob Jones; Flood v. Kuhn).............................................................................................................................13 j) Semantic Canons (McBoyle; Silvers; People v. Smith; Gustafson; Circuit City)...15 k) Canon of Constitutional Avoidance (NLRB v. Catholic Bishop; Almendarez-Torres) 18 l) Rule of Lenity (US v. Bass).....................................................................................19 m) Protecting State Sovereignty/Clear Statement Rule/Preemption (Gregory v. Ashcroft; Rice v. Santa Fe Elevator; Cipollone; Altria)................................................20 2) Constitutional Structure and the Regulatory State.....................................................22 a) Introduction to istrative State and Delegation (J.W. Hampton)...................22 b) Nondelegation Doctrine (Schecter Poultry; Whitman; Benzene)...........................23 c) Congressional Control of Delegated Power (INS v. Chadha).................................25 d) Appointment and Removal: History (Buckley v. Valeo; Myers; Humphrey’s Executor; Bowsher).......................................................................................................26 e) Appointment and Removal: Modern Doctrine (Morrison v. Olson; Peekabo)......28 f) Presidential Control of Agencies (Various OIRA Stuff).........................................29 3) The Regulatory Process and Judicial Review of istrative Action....................30 a) Introduction to the APA (Florida East Coast Railway)..........................................30 b) Informal Rulemaking (Nova Scotia; Choc. Mfrs. Ass’n).......................................33 c) Alternatives to Rulemaking: Adjudication (Chenery; Bell Aerospace)..................35 d) Alternatives to Rulemaking: Agency Policy Statements and Interpretive Rules (Pacific Gas & Electric; Chamber of Commerce v. Department of Labor; American Mining Congress)..........................................................................................................37 e) Judicial Review of Agency Procedure and Policy (Arbitrary and Capricious Stuff) (Ethyl Corp.; Vermont Yankee)......................................................................................39 f) The Hard Look Doctrine (Modern Arbitrary and Capricious) (State Farm)..........42 4) Agency Interpretation of Statutes...............................................................................44 a) Judicial Review of Agency Statutory Interpretation (Skidmore; Chevron)............44 b) Chevron and Textual Interpretation (MCI; Brand X; Sweet Home; Brown & Williamson)....................................................................................................................46 c) Chevron and the Canons (DeBartolo; SWANCC)..................................................48 d) Limits on Chevron (Mead Corp.)...........................................................................49

1) The Legislative Process and Statutory Interpretation a) Introduction (U.S. v. Kirby, TVA v. Hill) US v. Kirby (1868)  Question as to what “knowingly and willfully” means—does it mean if you stop the mail but have a different purpose in doing so than stopping the mail (viz. Kirby’s purpose in arresting the dude was to fulfill a criminal warrant)  Essentially, the Court carves out an exception for criminal proceedings (but specifically not for civil proceedings)—could have carved out an exception for collateral obstruction, but chose not to  Court is really driven by the idea that this would be an absurd result – example of absurdity doctrine – ridiculous to make it a crime to arrest someone because they happen to be on a mail boat TVA v. Hill (1978)  Seminal case in of environmental law, seminal case in of understanding the debates over statutory interpretation  Sec of Interior designates snail darter as endangered species, and dam being built by TVA would kill the snail darter; question as to whether dam should be built or whether it should be stopped – question as to applicability to projects already under construction  Majority says that statute’s overriding purpose is clear – protecting endangered species – and they must carry that purpose into effect; also use legislative history  Powell’s biggest argument – absurdity – ridiculous to waste all this money to save this stupid fish – but majority’s response is that the legislation contemplated (if not absurd) then at least dramatic results—they placed the highest priority on protecting endangered species; they had less draconian language on the table and chose to use the more restrictive stuff  Majority also says implied repeals are disfavored (e.g. subsequent bills do not impliedly repeal earlier legislation unless explicitly said to do so), and that appropriations bills do not alter substantive law Foundational Theories of Statutory Interpretation  Intentionalism – most traditional approach to statutory interpretation, though disfavored now; judge should reconstruct likely intent of the legislature in the situation before the court  Purposivism – Specific legislative intent is illusory, so try and decide cases based on general aims of the legislature  Textualism – Discern how reasonable people would understand the semantic import or usage of the given statutory text Congress chose b) Text and Purpose: the Classic Approach (Riggs v. Palmer; Holy Trinity) Riggs v. Palmer (N.Y. 1889)

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NY law says that the only wills that can be set aside are those with fraud or duress in the inception of the will—text is very clear Majority nonetheless sets it aside—says that the legislature would not have intended Palmer being allowed to inherit Also refers to common law maxim—no one should be able to benefit from their own wrongdoing—says this canon was not abrogated entirely by statute in this case o Maybe a principle that statutes abrogating the common law must do so explicitly? (Makes little sense, because most statutes that affect the common law are ed for the purpose of changing it) Strong purposivist case – legislature was pretty explicit about what was allowed, but court ignored it

Church of the Holy Trinity v. United States (1892)  Question as to whether a minister (for a church) is included within definition of someone who “performs a labor or service of any kind”  Textual arguments don’t have much heft, but have more heft than the textual arguments in Riggs—can argue that minister is a lecturer, or that really only means labor, or that church is beyond the scope  Always make a textual argument if you can  Preamble of legislation is pretty specific to manual laborers  Nevertheless, really strong purposivist case – Court says no way Congress could have intended this, that “US is a Christian nation,” so allowed  Reshaping text is not substation of will of judge for will of legislator, but rather a superior way to give effect to legislative intent Purposivism  Things to look at in making a purposivist analysis o Statute’s title o Mischief rule (construe statute so as to combat the mischief legislation was intended to combat) o Legislative history o Societal values (e.g. Christian nation) o Other evidence of statutory purpose (e.g. complexity of remedial scheme, relationship with other statutes dealing with the general matter) c) New Textualism (WVUH; Brogan) WVUH v. Casey (1991)  Facts are somewhat banal but “useful to understand” (Prof.)—WVUH sues Pennsylvania over reimbursement rates for Medicaid patients, wins; wants its expert fees reimbursed (this is a §1983 suit)  Question as to whether expert’s fees count as attorney’s fees under §1988

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Scalia’s opinion – judge as grammarian – experts’ fees are not covered under attorneys’ fees (were treated separately in other fee-shifting statutes), and stuff that isn’t precisely an attorney’s fee (e.g. paralegals, copying) was generally understood to be included in the attorney’s fee Also makes much of rule against surplusage—parts of statute would become redundant if experts’ fees were included in attorney’s fees WVUH says statute was intended to return to pre-Alyeska regime, and that court should interpret it in light of that purpose, but Scalia points out that purpose of statute is not just what is changed but what is left alone, and best evidence of that is text o If Congress wanted to say it, they easily could have said it It is not court’s job to remedy what Congress forgot; “it is not our function to eliminate clearly expressed inconsistency of policy and to treat alike subjects that different Congresses have chosen to treat differently” Stevens’s opinion – broader purpose of statute was to make civil rights cases easier to be brought—if you can’t reimburse expert fees then it will frustrate civil rights litigations Thinks that Court should guess what current Congress would do, and carry that into effect—points out that when court adopts ultra-textualist approach, it usually ends up being overridden by Congress Opinion heavy on legislative history, which Scalia discounts “We do the country a disservice when we needlessly ignore persuasive evidence of Congress’ purpose and require it…to restate its purpose in more precise English”

Brogan v. United States (1998)  Dude was taking money from companies whose employees he was a union rep for; agents knew that when they went to his house, but asked him if he was (without telling him about §1001) and he denied it, so they charged him with a §1001 violation (an additional felony)  Text of the statute, again, is clear—says falsifying or misleading over any material fact is enough to violate the statute, no “exculpatory no” in statute, so Justice Scalia says text is clear, that’s that  Justice Scalia very opposed to reading exception into statute because point of investigation is to uncover truth, and allowing a lie to slip by would pervert the investigation in the first place  Does not think court should read a statute more narrowly than written by Congress—cannot be Court’s practice to restrict unqualified language of statute to particular evil Congress was trying to remedy  No 5th amendment issue because Brogan is not being compelled to talk; his option is to remain silent  Separation of powers issue—perhaps the purposivist approach aggrandizes the Court at the expense of the legislature—Congress chooses both the end and the means to the end

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Textualism v. Purposivism – Arguments for Textualism and Purposivist Critiques  Textualists do not see legislative process as coherent and reasonable – they see legislation as a product of compromise, and that court just deciding that the purpose of legislation trumps risks ignoring that compromise o Purposivist response is that statute still reflects overriding purpose, which should be followed—no “thick grammarian’s spectacles”  Purpose of statute can be framed at different levels of generality – Radin - “to interpret a law by its purposes requires the court to select one of a concatenated sequence of purposes, and this choice is to be determined by motives which are usually suppressed”  Purposivists focus on ends of statutes, but textualists point out that statutes embody choices about means and ends, and ignoring means in favor of ends might misinterpret statutes’ purpose  Critique of textualism from purposivists is that legislature often overrides the textualist interpretation o Resposne is that what Congress can enact now is not what it would have or could have enacted in the first place o And, Congressional correction of judicial mistakes makes the law clearer, not more opaque—reliance on text is more likely to prompt clarification of imprecise statutes  Is there a general problem when there is inconsistency in approach between purposivism and textualism? d) New Purposivism/Judicial Correction of Legislative Mistakes (General Dynamics Land Systems v. Cline; Public Citizen; US v. Locke; Bock Laundry) General Dynamics Land Systems, Inc. v. Cline (2004)  Respondents sue on an age discrimination claim (CBA eliminated their retirement health benefits), says that ADEA prohibits all discrimination on the basis of age  Majority finds that provision banning discrimination on basis of “age” does not mean discrimination against the young because of their age o Common meaning of discrimination on the basis of age only considers older people; so text is ambiguous on whether younger people are effected o Legislative history/setting of the statute suggests that Congress/Sec. of Labor really only had old people in mind when they ed the statute o Identical words used in statute generally have same meaning, but presumption is not rigid, and when context differs a ton, meanings differ to – as with “age” here  Justice Thomas’s dissent o Start with text that statute simply says “age”, and does not specify older or younger age, so perhaps statute does apply to the respondent o Also, EEOC agrees that it cuts both ways—and the EEOC is the agency that Congress tasked with istering the ADEA

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o Also says that Title VII (Civil Rights) uses the word “race,” and the Court has read Title VII to mean any discrimination against any person, regardless of their race, because of their race o Congress did not have “social history” of the phrase discriminate on basis of age as the ill it wished to cure when it ed this statute Case is important as an example of textually-constrained purposivism – they have to find ambiguity, and only then go to purpose Have seen this kind of reading in other case (Zuni (textually-based purposivism), Milner (Kagan rejects purposivist reading because too far from the text))

Public Citizen v. DOJ (1989)  Absurdity case  FACA requires all consultations with “advisory committees” by president to be made public; question as to whether ABA Committee meetings on federal judges count  Court says no, would be an absurd result – while “utilize” is in statute, and ABA committee is “utilized,” so is any group of two or more people president consults —pure textualist reading proves too much o Same reading would also require Cabinet meetings to be made public o Also says would be contrary to statutory purpose  “Looking beyond naked text for guidance is perfectly proper when the result it apparently decrees is difficult to fathom”  Kennedy concurrence o Plain language of the statute is clear here; Court concedes that plain meaning of utilize is fulfilled and that ends the matter o However, wants court to really say its invoking the absurdity doctrine, instead of just saying, “Well, we’re pretty sure it doesn’t mean this” o Even then, doesn’t think results would be absurd o Refuses to embrace a revival of Holy Trinity o Would invalidate law on separation of powers grounds Absurdity – Issues  How absurd must the result be? Would the absurdity in Public Citizen really be as absurd as what was in Kirby?  How general is the absurdity doctrine? Is it acceptable to invoke the absurd results that statute would lead to in other situations to prove that in this situation it doesn’t work?  Does absurdity discount the political process? How does one evaluate legislative history of changes to statute when the supposedly absurd term is added in? Did people actually want it in there or was it added in without significantly changing the meaning?  Don’t the risks of false positives (applying absurdity doctrine when it shouldn’t be) significantly outweigh the risks of false negatives? If statute is truly absurd,

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Congress will soon fix it, but false positives might be uncorrected because certain powerful groups favor them United States v. Locke (1985)  Issue in filing mining claims – does a provision in a statute saying they must be filed “prior to December 31st” mean that of does it also include December 31st in there?  Court says plain language of statute does not mean “on or before December 31st”, and nothing in legislative history deals with what date was actually meant  Even though this doesn’t really make sense, court must apply it unless there is something to suggest that it wasn’t meant to be read this way; there isn’t (agency’s construction of statute has been consistent with “prior to,” not “on or before”), so claim must fail o To do otherwise would be legislation, not judging  Dissent (Brennan, Stevens) o This creates a trap for unwary property owners; statue is either ambiguous or result of scrivener’s error o Won’t presume that Congress deliberately created a trap for the unwary Scrivener’s Error  Doesn’t scrivener’s error in essence on determining that application of statute would be absurd?  Alternatively – as courts emphasize grammar more and more, does it really make sense that Congress is paying a ton of attention to commas and semicolons? e) What is the Text? (Nix; Moskal; Smith v. US; Muscarello) Nix v. Hedden (1893)  Case hinges on whether meaning intended was ordinary or scientific meaning  Tomatoes – fruit or vegetable – for purposes of a tariff, whether tomatoes are considered a fruit or a vegetable  Nix pays tariff to Hedden for tomatoes, but he says tomatoes are fruits, not vegetables, so he shouldn’t have to pay the tariff  Question as to whether court should use ordinary meaning or scientific meaning —court uses the ordinary meaning, and says tomatoes are used the same as vegetables so they’re vegetables for the purpose of this statute  No real empirical basis for the Court’s distinction  Criticism - specific audience—statute aimed at the produce industry—so presumably they would know that tomatoes are in fact the fruit of the vine Moskal v. United States (1990)  Whether you look to how a term is used as a legal term of art or whether you look to its more ordinary meaning

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Petitioner participated in a scheme where odometers were rolled back and titles forged in Pennsylvania, then Moskal’s petitioner washed the titles by reing the cars, and then sent them back to Pennsylvania Moskal indicted and convicted under statute making it a crime to transport in interstate commerce any “falsely made, forged, altered, or counterfeited securities;” he claims he is innocent because titles were not actually falsely made —they were real titles, just with wrong information Ordinary meaning benefits the government more, but specialized legal meaning (established common-law meaning when Congress made the statute) of “falsely made” is forged; “as so defined, ‘falsely made’ excluded authentic or genuine documents that were merely false in content” Canon of construction – where a federal statute uses a common-law term of established meaning without otherwise defining it, the general practice is to give that term its common-law meaning o Marshall (majority) says that the common-law meaning is not clear; there was divergence among federal courts, and when words have no fixed usage in common law then look to the statute’s purpose… o …which was to criminalize trafficking in fraudulent securities that exploits interstate commerce; based on that purpose, think that Congress meant to adopt ordinary meaning o Also a surplusage thing there—if falsely made means forged, then forged means nothing Scalia dissent o Thinks “falsely” preceding “made” means the manner of making, not the nature of the product made – inexpensively made painting is not the same as an inexpensive painting o Surplusage rule is generally sound, but cannot be used to distort a term’s ordinary meaning – as it is here o But falsely made also had well-established common-law meaning when statute was ed, and that meaning should be applied

Issues With Meaning of Legal of Art  Wouldn’t it be quite a coincidence for drafters of a statute to have just randomly selected a term that happened to have a defined common-law meaning? o Alternatively, doesn’t it seem likely that most rank-and-file legislators who voted had no opinion one way or the other? o Response to this is that legislators may not have had specific intent re: that phrase, but had a general intent regarding having their laws be interpreted in line with the norms of the prevailing legal culture  Should broad general purpose of the statute trump common-law meaning of a specific term? Marshall yes, Scalia no  Who is the relevant audience here? Do we really think the criminal defendant here knew falsely made was a common-law term and thus figured he was safe? Alternatively, does the rule of lenity apply in the case above?

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Smith v. United States (1996)  Issue here is dictionary meaning vs. colloquial meaning  Basically, Smith offered to trade a gun to an undercover officer for drugs; question as to whether that qualified as a “use” of a gun within the meaning of 18 USC § 924 (which criminalized the use of a firearm “during and in relation to… [a] drug trafficking crime”  Representing Mr. Smith: o Must show that “use” does not equal barter o Average person-on-the-street does not think of bartering a gun is “using” a gun—thinks of using a gun as a weapon as using a gun—particularly appropriate when it’s use of an instrumentality  As government: o “Use” is an expansive term—a deliberately expansive term—and if Congress wanted to narrow its meaning it knew how to do it o Other part of 924 includes other situations that a firearm is “used,” and this includes both use as a weapon and transport/barter  Though counter is that they used those to clarify that they meant stuff beyond the ordinary meaning of “use”  Do we look to most typical, most conventional meaning, or do we look to the more expansive meaning? Does the fact that it’s a criminal statute make a difference? Muscarello v. United States (1998)  Defendant wants “carry” (in the above statute) to mean “carry” on his person, while gov’t wants “carry” to mean transport, etc.  Breyer says purpose of the act is to disincentivize having a gun at all when drugs are involved, and that even though gun was locked in glove compartment/in the trunk that still falls within the meaning of the statute  Ginsburg objects because a) these guys are still going to be serving extra time (based purely on possession), and also because of the rule of lenity  Rule of lenity: criminal statutes should be construed, where ambiguous, in favor of the defendant in a criminal case Dictionary v. Colloquial Meaning  Does focus on using dictionary meanings miss or undervalue legislative impulses that inspired the legislation—do you miss the purpose?  Empirically, congressional staffers responsible for drafting legislation do not generally rely on dictionaries  Counter – dictionaries provide historical record of how people use language in context, and can provide a starting point for considering how a reasonable person would have used a given word  Does disagreement over dictionary v. colloquial meaning mean in and of itself that statute is ambiguous? If so, does that mean Chevron deference, rule of lenity, come into play no matter what there?

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f) Legislative Intent/Legislative History (Blanchard; Continental Cal; Moore v. Harris; Montana Wilderness Ass’n) Legislative History Overview  Not really used prior to 1860, used sporadically until around 1940  Peaks in the mid-80s and started to decline—judges (Scalia, Easterbrook) criticize its use pretty consistently and effectively  Hierarchy of sources o Committee reports (both House and Senate individual committees and the conference committee report) o Sponsor statements o History of the bill (e.g. prior proposals that were rejected) o Floor and hearing colloquies (between of Congress and between and witnesses in front of Committees)  Criticisms o Idea that all legislators voting for or against a bill will all have same intent is preposterous – especially with agenda control, logrolling, etc.  But if that’s the case, does it mean courts should heed legislative history, because if committees are what makes legislation possible courts should heed the understanding of those same committees o of Congress could freely insert floor statements, etc. into legislative record after bills were already ed (can’t do so anymore) o Formalist argument – legislative history is not law, and should not have the force of law – it is inherently illegitimate, violates bicameralism and presentment, etc.  Counter to this is that no one is saying legislative history is the law —it’s an interpretive tool, nothing more o Use of legislative history could facilitate circumvention of Article I – gets stuff in statute that couldn’t get in there otherwise just to influence judicial interpretation (the more you use leg history, the phonier it becomes) o Unlikely that of Congress have paid any sort of attention to legislative history; views of of conf. committee do not represent views of Congress, and of Congress do not embrace committee’s views when they vote for legislation  Committee might even be preference outliers—they care more and more strongly about what they deal with than rank and file do  And Committee reports are written by staff and by lobbyists, not themselves o Legislative history expands judicial discretion impermissibly – because leg. history is so vast and so varied judges can basically select whatever policy outcome they desire – “looking for your friends in a crowd”  Counter is that elasticity of language gives textualist judges same discretion 10

If statute is genuinely ambiguous, doesn’t it constrain judges to be forced to consult an authoritative source about what a statute means? o Costs of research into legislative history are really high for parties; because it’s so uncertain, judges should ignore it to save costs o Overriding issue with the criticism – these views apply retrospectively, so if we abandoned legislative history, we’d be applying them to statutes that had already been ed with legislative history in mind—bait and switch problem Successive versions of a statute (record of changes to a proposal over the course of the drafting process) – can provide info about whether a statute was narrowed or broadened o Criticism is that we never really know why stuff was added or taken out Subsequent Legislative Action/Inaction – idea that if Congress acquiesces in a judicial statutory construction it was the correct construction (implicit legislative judgment) o Court is now more skeptical of this – really difficult to assume that that is why Congress did not amend a particular statute 

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Blanchard v. Bergeron (1989)  Issue whether reasonable attorney’s fees in §1988 should be limited by contractual agreement to pay a certain fee (in this case, a contingency fee arrangement)  5th Cir. case (Johnson) was used by Congress in coming up with §1988, and it says that fee should be no greater than what it was obligated to pay via contract, but White (majority) gets around that by also pointing out that the Senate Report (NOT the House Report) mentions three district court cases that “correctly applied Johnson” which allowed greater awards than the contractual obligation, so Senate must have been aware of that  Scalia (concurring in part and concurring in judgment) calls bullshit on that—says there is no way that most looked at the Committee reports, let alone looked at these District Court cases, and certainly did not think that District Court cases trumped Johnson because Johnson’s stuff was dictum Continental Can Company, Inc. v. Chicago Truck Drivers, Helpers and Warehouse Workers Union (7th Cir. 1990) (Easterbrook)  Statute imposes liability on employers who withdraw from underfunded pension plans, question as to whether exception applying to pension funds where 50.1% of money comes from trucking companies qualifies as “substantially all” under the statute  IRS says “substantially all” generally means 85%, which was also said on floor during House debate; but Senator Durenberger (after bill had already been ed) adjusted the legislative history to say that “substantially all” meant a majority

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Easterbrook says that’s ridiculous—even if substantially all didn’t already mean more than a bare majority (which it does), Durenberger’s comments were way too late to have any use

Montana Wilderness Ass’n v. United States Forest Service (1981)  Logging company wants access through federal lands to some land it owns so it can log it; environmentalists objects and sue; question as to whether “National Forest System” refers only to forests in Alaska or forests that are part of the National Forest System throughout the US (statute in question is the Alaska Lands Act)  Legislative history of this bill is sparse—nothing dispositive  Committee report on a later statute (three weeks later) interpreted the statute to mean National Forest System to refer to the entirety of the National Forest System —this is what ends up being dispositive Moore v. Harris (1980)  Question in statute is who is a miner and who gets counted as such—whether you must be an employee of a mining company or if being self-is employed counts as such – provision in statute is “is or was employed in a coal mine”  Court says it counts; concludes that the guy’s covered because they’re not going to read too much into the fact that the statute sometimes says is employed by someone in a coal mine because it’s clear Congress didn’t mean to exclude selfemployed miners; purpose of statute was to protect people from Black Lung disease and purpose is so plain that niggling distinction is irrelevant  Purposivism trumping legislative history g) New Synthesis (Allapattah; Corning Glass Works) Legislative History Usage Today  Consensus on the court that where the text is plain the only argument you have when you want to use legislative history is that the result is absurd – can consult legislative history if but only if text is ambiguous o Concerns – if leg history is useless when text is clear, why is it useful in this situation? o How does one define ambiguity/how much unanimity on ambiguity must there be for a statute to be genuinely ambiguous? o Does a vague term suggest that Congress wants to convey upon the interpreter (court or agency) the ability to choose what the statute means?   Committee reports and sponsor statements are the most important – hierarchy  When in time the history occurred—material in front of Congress when the bill is ed is more helpful (though there are exceptions, see e.g. Montana Wilderness) Exxon Mobil Corp. v. Allapattah Services, Inc. (2005)

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Class-action diversity case; question is whether all plaintiffs in a class must meet the amount-in-controversy requirement or only some of them need to meet it— whether 28 USC 1367 overruled Zahn  Debate over the usefulness of specific legislative history, rather than the usefulness of legislative history as a whole o Committee of judges (chaired by Posner) drafts text for statute and notes in a footnote that it would overrule Zahn o House adopts the text without changing it—so did they also adopt it with the idea that Zahn would be overruled?  Subpoint—he House Report stated that the law would “restore the pre-Finley regime”—and cited Zahn in a footnote  Kennedy’s response is that the House Report is no more probative than the Posner committee report Corning Glass Works v. Brennan (1974)  Question as to whether working at night vs. working in the day makes a difference as to whether people work under “similar working conditions”—must pay equally if they are (men only work at night), but don’t have to if they are not similar conditions  Key insight here is whether you can use legislative history not as probative of legislative intent but as an external source of information about technical meanings of and decisions to use words and given them a technical meaning o Court here uses legislative history to show that “surroundings and hazards” as used in bill was a technical term, and thus did not include time of day that work was done h) Dynamic Statutory Interpretation Dynamic Statutory Interpretation  Basic idea is that judges should distinguish between specific intent of some provisions and general intent of a legislature who es the statute, and follow general intent where specific intent conflicts o E.g. if legislature tells you to feed a child only one kind of meat, but that type of meat disappears, you can figure general intent was to feed the child some meat and just buy something else o Issue with that is that maybe legislature really did only want that type of meat used – maybe it was for health purposes, or price, or something else  Arguments against o Countermajoritarian—judges usurping legislative power o Institutional competence (see above) o Rule of law—courts are just changing interpretations on the fly  Advantages o Flexibility – allows judges to carry into effect legislature’s larger purpose o Many of same advantages as purposivism  Judges don’t often say they are engaging in dynamic statutory interpretation 13

i) Changed Circumstances/Stare Decisis (U.S. v. Marshall; Bob Jones; Flood v. Kuhn) U.S. v. Marshall (7th Cir. 1991) (Easterbrook)  Question as to whether weight of blotter paper that LSD was put on should be included in amount of LSD possessed for statutory punishment purposes  Lawyer for Marshall argue: o That the medium for LSD (e.g. the blotter paper) should not be included with the weight of the LSD for sentencing purposes—say that paper is not part of the “mixture or substance containing a detectable amount of LSD” o Also make argument that Congress treated pure P and P mixture/substance differently—argue by analogy that Congress must have meant to treat LSD similarly o Argue absurd result—people dealing non-pure LSD are getting worse sentences than the people with the pure LSD, and you have to sell far far more doses of cocaine to get a similar sentence o Finally, argue rule of lenity—statute is unclear on what exactly constitutes mixture/substance, so should be construed liberally  Government arguments o Against absurdity—never has been a case where that kind of punishment has resulted, and could also depend on prosecutorial discretion o Chemistry definition of mixture or substance does include blotter paper— LSD and blotter paper are in fact a mixture, and you can’t scrape the LSD off the top of the blotter paper or anything like that o Textually, Congress knew how to distinguish between pure and carrier items (see P provision), and chose not to do that for LSD o Against too harsh sentences—one, refiners are covered by a different statute, and two, could have harsh mandatory minimums in an attempt to get people to flip  Court upholds sentencing based on full weight of the paper; basically says Congress could have had rational basis for acting as it did  Debate here between Easterbrook and Posner over whether best reading of the statute is the best semantic meaning of the text or the more sensible reading with overall goals of the statute  Easterbrook says that even if statute compels odd results, that’s Congress’s prerogative  Debate between positivism and pragmatism – per Posner, Easterbrook’s approach “buys political neutrality and a type of objectivity at the expense of substantive injustice [in certain individual cases” while his approach “buys justice in the individual case at the expense of considerable uncertainty and judicial willfulness”  Does judicial power vested in Article III include equitable interpretation? Bob Jones University v. United States (1983) 14

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501(c)(3) allows organizations to have tax-exempt status, while 170(a) allows people who donate to charitable organizations to deduct that donation—question as to whether schools with racially discriminatory issions/student policies are eligible, and whether donations to those schools are eligible Initially, IRS had said schools with that status to qualify, but District Court for DC issues injunction against that, so IRS changes its policy to disallow those In Supreme Court, Bob Jones argues that it qualifies under (c)(3) because it is an educational institution, and that 501(c)(3) says that it applies to charitable institutions “or” educational institutions Court holds that a combination of factors argues against Bob Jones receiving status, including: o Tax-exempt status is for groups that public policy (because the general understanding of charitable contribution in 501(c)(3) is based on a common-law charity concept, which says that), and public policy at this time is firmly opposed to racial discrimination  Rely heavily on 170 to come to this (but that statute is not what is being interpreted, and Rehnquist (dissenting) says that this is the flaw with the majority’s opinion) Conflict as to Congress’s role—on one side, Congress has given primary interpretive authority to the IRS, but on the other side the IRS could be overstepping its bounds here—Congress knew about what the IRS was doing and had repeatedly failed to amend 501(c)(3) to reflect the IRS’s reading Ways Congress can be interpreted: o Acquiescence—see this here—Congress is aware of the issue but does nothing, so they’re cool with it o Reenactment rule—Congress reenacts a statute without making material changes, so Congress intended to either incorporate or leave intact previous Court or agency interpretations o Rejected proposals—proposals that Congress actually considers but then discards

Flood v. Kuhn (1972)  Curt Flood wants reserve clause gotten rid of because it’s an unlawful restraint of trade under Sherman Act, but baseball argues it’s antitrust-exempt and that said exemption has been codified in several Supreme Court decisions (Federal BaseBall and Toolson)  In Federal Base-Ball, which was decided pre-New Deal, Court did a basically Commerce Clause analysis—baseball exempt because the games are put on in individual states, and fact that players travel is immaterial  In Toolson, they disagree with that interpretation, but keep that interpretation for stare decisis concerns  In Flood, they make it clear that Federal Base-Ball was wrongly decided but allow it to stand for stare decisis; think solution should come from Congress, don’t want to open baseball up to retroactive claims, reliance interests (teams have built their business around that) 15

j) Semantic Canons (McBoyle; Silvers; People v. Smith; Gustafson; Circuit City) Semantic Canons Generally  Now more in favor on the court than they ever have been, thanks to textualism  Had been criticized as perverting the will of Congress; additionally, Llewelyn wrote a famous article about how for every canon there’s a countercanon o Per Scalia, however, what he really did was write an article listing each canon and its accepted exception and then say they were arrayed against each other, when really they’re not in conflict  Issue – when are canons applied? When word/text itself is ambiguous, or can you apply them to contravene the plain meaning of a term (see e.g. Gustafson)?  Issue – in what order should they be applied? Do they trump legislative purpose and/or plain meaning? How do you prioritize them against one another—is it just up to the judge’s discretion? Ejusdem Generis  Definition – A general term used at the end of a list encomes only things similar to the specific things listed  Application – McBoyle v. U.S. (1931) o Issue is whether a statute dealing with theft of vehicles includes airplanes —language at issue “automobile, automobile truck, automobile wagon… or any other self-propelled vehicle not designed for running on rails” o Court uses ejusdem generis—because all those things run on roads/don’t fly, can assume they meant to only include vehicles on roads—so planes are not included  Application – People v. Smith (Mi. 1975) o Michigan statute that says any person who carries a “dagger, dirk, stiletto, or other dangerous weapon…concealed on or about his person” has committed a crime o Defendant here was carrying an M1 rifle concealed in his vehicle; he states that the statute, based on ejusdem generis, does not apply to rifles o Court agrees—goes with ejusdem generis—general term at end is of the same kind, meaning stuff similar to daggers, dirks, etc.—maybe a shiv or switchblade, stabbing weapon—not a rifle  Justification o Common sense  Criticism/Issues o What sort of things count as “of the same kind?”  Judges applying the canon must make implicit judgments about which common characteristics of enumerated are relevant o How does this relate with noscitur a sociis?  Generally, ejusdem generis only used for catch-all at end of lists, but noscitur a sociis is applied more broadly

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o Do you use this canon (and all canons) all the time, or only when text is genuinely ambiguous? o Is ejusdem generis in conflict with the presumption against statutory surplusage?  If the generic term at the end includes things like those that were listed, then it includes the things that were listed, making them superfluous  But isn’t this redundancy entirely understandable and within common usage? And if you didn’t have specific, how could you know what general means? Expressio Unius et Exclusio Alteris  Definition – when a statutory provision explicitly addresses or includes particular things, other things are implicitly excluded  Application – Silvers v. Sony Pictures Entertainment, Inc. (9th Cir. 2005) o Question as to who is allowed to sue for copyright infringement; key phrase is “the legal or beneficial owner of an exclusive right under a copyright” is the person allowed to sue (lady wants to sue for infringement, but she wrote movie under contract, so she doesn’t hold right to copyright—company she was under contract with assigned her the right to sue, but that’s it) o Court decides case on expressio unius grounds—Congress lists out who can sue for copyright infringement, which means that anyone not listed can’t sue o Dissent criticizes this—says statute was explicitly (per legislative history) meant to expand copyrights rights, and restricting rights in this way when the text itself is somewhat unclear is illegitimate  Criticism o When does canon apply? How do you tell when something specific is mentioned by way of example vs. when it’s meant to exclude other things? o Doesn’t expressio unius directly contradict the standard habit of speech of most people? o Should it only be used when Congressional intent cannot be discerned? What is the order of priority of different tools of statutory interpretation? Noscitur a Sociis, Presumption Favoring Consistent Meaning, and Presumption Against Surplusage  Presumption favoring consistent meaning – same word or phrase has same meaning in different sections in the same statute  Noscitur a Sociis – word’s meaning can be clarified and narrowed by meaning of words surrounding it  Presumption against surplusage – each word in statute has independent meaning such that interpretations which would render it superfluous are disfavored  Application(s) – Gustafson v. Alloyd Company, Inc. (1995)

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o Whether under §12(2) of the Securities Act includes a sales contract under its definition of prospectus (if it does, then if you make material misstatements you can rescind the contract) o Majority looks at the statute as a whole, and decides that since §10 says that prospectus must contain all information in a registration statement, and no contract would contain that, then contract cannot be prospectus  Says that prospectus must mean the same thing in every section o Dissent says that’s total bullshit; look at the provision in question, then the definitional section, and then the statute as a whole o Definitional sections says “the term ‘prospectus’ means any prospectus, notice, circular…”—prospectus includes other things besides prospectus, and communication (which is in there) certainly includes a contract o Mostly just know that this is a case where these canons kind of bump into one another, and court has to prioritize Criticism – consistent usage o Majority opinion above favors this approach o You can drag into an opinion irrelevant parts of statute that neither plaintiff nor defendant is interested in just because you need them for meaning o Entirely possible that Congress intended the word to mean different things in different places o Does same presumption apply when Congress uses same word in different statutes?  Per court in Northcross, answer is yes when they deal with similar issues Criticism – noscitur a sociis o In case above, communication read more narrowly due to noscitur a sociis o Is this right? Doesn’t this disable Congress from ever combining broad with narrow ? o When is it appropriate to be used? Only when relevant statutory term is ambiguous, or when it’s clear but in a list? Criticism – surplusage o Do we really usually express ourselves in ways that avoid redundancy? Does the fact that it’s a statute make a difference? o Tension between ejusdem generis, noscitur a sociis, and presumption against surplusage

k) Canon of Constitutional Avoidance (NLRB v. Catholic Bishop; AlmendarezTorres) Substantive Canons Generally  Ask interpreters to put a thumb on the scale to promote a favored value or avoid a disfavored one  Nominally Constitutionally-based in certain circumstances (e.g. state sovereignty), but it’s not text of Constitution – ethical interpretation 18

Canon of Constitutional Avoidance  Generally, the idea is that courts should construe statutes so as to avoid serious constitutional problems  Basically, this is the most important thing the court can do, and is especially grave, so should only be invoked when really necessary  Court presumes Congress does not seek to constitutionally-questionable laws  Judicial restraint – constitutional decisions are a much stronger restraint on branches of government, so don’t make them unless you have to  First articulated by Justice Brandeis in Ashwander – says courts will not on Constitutional questions when they don’t have to and when presented with two plausible meanings will choose the one that doesn’t cause the constitutional issue NLRB v. Catholic Bishop of Chicago (1979)  Dispute over whether “employer” within NLRA applies to parochial schools— parochial schools say collectively bargaining with lay employees could interfere with their free exercise of religion—decisions made could relate to religious creed which NLRB cannot get behind  Nothing is really ambiguous about text—flat out says any employee except for 8 exceptions, and parochial schools are not an exception  However, court uses constitutional avoidance canon—says that there must be an affirmative intention, clearly expressed to trigger a constitutional issue—if there is no affirmative intention, even if the statute is otherwise clear, then construe it so as to avoid Constitutional issue—even if that isn’t a particularly plausible meaning  Dissent wants fairly possible, not affirmative intention—if it is fairly possible that Congress meant to cause the issue, then the Court has to deal with the constitutional issue  This is a fundamental issue – is it fairly possible, or is it affirmative intention?  Issues: o The one above o How clear must the constitutional problem be? o Does Court have to find the likeliest reading of the statute to be unconstitutional, and then move on, or does it just have to say there could be a constitutional issue? o Does this raise faithful agent concerns? If Congress wants to force a constitutional issue, shouldn’t the courts acquiesce? o Is it ok for courts to adopt strained readings of statutes when the court had not actually identified a constitutional violation? Almendarez-Torres v. United States (1998)  Statute deals with deportation of undocumented individuals; you come back, you get two years, but (in a separate provision) if you come back after being deported because of an aggravated felony you get 20 years

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o Question is that whether this an enhancement (which doesn’t need to be proved to the jury) or an element of the offense (which does need to be proved to the jury); if it’s an element, it must be in the indictment, and it wasn’t put in the indictment in this case On a fundamental level, majority and dissent disagree on whether this is unconstitutional—canon allows court to have its cake and eat it too, in that Breyer and Scalia both discuss this in of constitutional avoidance while also making clear their positions on its constitutionality

l) Rule of Lenity (US v. Bass) Rule of Lenity  Idea that ambiguities in criminal statutes are to be interpreted in favor of defendants  Think people should be allowed to know what they’re doing when they’re told they’re committing a crime – fair notice o Isn’t this really unlikely to make a difference when interpretation of the statute turns on finer points of usage and syntax?  Legislature should define criminal policy—not up to courts to criminalize things, so don’t resolve ambiguity, leave it to legislature o Why is this a greater imperative in criminal than in civil matters?  Legislature has created criminal laws against the backdrop of rule of lenity, so it has presumptive validity  Similar canon is used when dealing with tax statutes (Gould canon)  Also an anti-retroactivity canon – unless explicitly stated, no retroactive effect, derived from Constitution (Due Process, Ex Post Facto, Takings Clause) U.S. v. Bass (1971)  Dude was a felon, and possessed a firearm; statute says any felon who “receives, possesses, or transports in commerce or affecting commerce” a firearm has committed a crime – question is whether a connection with commerce must be demonstrated in individual cases, or whether “in commerce or affecting commerce” modifies only “transports”  Court says statute is ambiguous, so invoke the rule of lenity  Dissent says most natural reading of statutes is that in commerce or affecting commerce only affects transports, so possessing or receiving a firearm, even if done entirely intrastate, is acceptable m) Protecting State Sovereignty/Clear Statement Rule/Preemption (Gregory v. Ashcroft; Rice v. Santa Fe Elevator; Cipollone; Altria) Clear Statement Rule  Basically a set of federalism canons – clear statement rule and presumption against preemption

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Clear statement rule – a clear statement of congressional intent is required before a court will construe a federal statute as interfering with a fundamental aspect of state sovereignty Application – Gregory v. Ashcroft (1991) o Question as to whether Missouri’s mandatory retirement age for judges at 70 conflicted with ADEA prohibition on employer (which includes states) discharging any individual over 40 because of their age  ADEA contained an exception for employees “on the policymaking level” o Majority (O’Connor) says that this is a question of federalism; to have a federal law that gets involved in such a fundamental state function as selecting judges is violating state sovereignty  Other side of this attempt to protect federalism is the Supremacy Clause—Congress can do what it wants within its sphere o Goes with clear statement rule—if Congress is going to alter balance of Constitutional power between states and federal government, then it needs to state so clearly, which it did not do here o So, Court will construe the statute not to include judges without a plain statement as such, and thus ADEA does not apply o White (concurring in the judgment and dissenting in part) say that this canon is unworkable, and that judges are in fact policymaking appointees —so they fit within the exception in this statute Criticism o What sort of state activities fall within the scope of the rule? How do you tell? o Does this apply only to ambiguous statements, or to everything? o If this is protecting a constitutional value, is said value valid? Does the Constitution really embody a freestanding commitment to federalism? o Even if Constitution does embody federalism, is federalism that worth protecting? o If justification is improving the legislative process—is that really true? Does Congress/their staff really pay any attention to this?

Presumption Against Preemption  Preemption – idea that the federal gov’t does not preempt state law unless it’s really clear that it wants to  Preemption comes from Supremacy Clause  Very hard to predict how these cases will come down  Express preemption – Congress explicitly says state law is preempted – obviously not tough  Implied preemption – tougher o Conflict (impossibility) preemption – statute doesn’t say anything, but there’s an irreconcilable conflict between the laws, such that it’s impossible to comply with both of them

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o Obstacle preemption – enforcement of state law would frustrate or obstruct the purposes of the federal statute o Field preemption – federal regulation is so pervasive that federal government has expressed its desire to occupy the field Presumption against preemption not as robust as clear statement rule’ Application – Rice v. Santa Fe Elevator Corp. o Question as to whether federal regulation preempts state regulation – court says it will require a clear statement to preempt state functions, and finds it here—field preemption—regulation so pervasive that it was intended to preempt state functions Application – Cipollone v. Liggett Group, Inc. (1992) o Cipollone was a lifelong smoker and sued under state common law; question as to whether her suit was preempted by Federal Cigarette Labeling and Advertising Act o Act prescribed labels on cigarettes, and said no requirement under state law can be applied to labels, and part of Cipollone’s suit is failure to warn, so is claim preempted o Court basically says that this is preemption—such a clear statement as the one above is preemption, so claims preempted o Presumption against preemption—Scalia (dissent) thinks it’s an ironic result that there is a clear statement of preemption actually reduces what’s preempted—implied preemption is much wider than express preemption Application – Altria v. Good (2008) o Court is extremely clear that there is a presumption against preemption, both express and implied, and that it should be applied to even areas where federal gov’t had traditionally regulated o Where text of preemption clause is unclear, apply the plausible reading that does not preempt o Here, Labeling Act is considered to be unclear enough that it might not preempt state tort law on cigarette labeling o Dissent says that this is unworkable; just say Congress preempted any law that imposes an obligation based on effect of smoking upon health Since Riegel v. Medtronic, Court now says that state common law duties are requirements Criticism o Extremely confusing and impossible to predict which way these cases will come down o If statute has express preemption, how broadly or narrowly should courts read it? Do you still put the thumb on the scale?

2) Constitutional Structure and the Regulatory State a

Introduction to istrative State and Delegation (J.W. Hampton)

Separation of Powers 22

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Standard – assignment of certain powers to certain branches impliedly preempts the exercise of those powers by other branches o Otherwise, why take the trouble to assign them? Structural evidence o Of separation  Each branch’s role in selection of others is minimized  Ability of branches to remove another is limited and cumbersome  Congressional control over salaries of other branches is limited  Incompatibility clause – can’t serve in two branches at once o Of blending  No explicit design in Constitution to assign certain powers to certain branches, or at least not to do so strictly  President participates in legislative process (veto), Senate participates in judicial (veto), Appointments Clause Formalism vs. functionalism o Formalism  Draws relatively sharp lines of demarcated power between the branches; can’t tread on one another  Unconstitutional for Congress to transfer powers from one branch to another  Constitutional meaning fixed o Functionalists  Leaves a great deal undecided; no overall plan beyond the vaguest principles for structure of the government  Congress has broad authority to determine shape of gov’t pursuant to Necessary and Proper

Delegation  Arguments in favor o Various agencies have specialized expertise that makes them more capable of setting effective policy than Congress/the courts o Also agencies are more divorced from political realities  Counter is that agencies obviously take politics into s – duh o Agencies are a necessity in modern society, and the alternatives – not ing laws that we need or delegation to the courts – are far worse  Arguments against o Rejects/argues against fundamental commitment to separation of powers o Vesting Clause – all “legislative powers…shall be vested in [the] Congress” – argues that Congress cannot delegate that power  But necessary and proper might allow Congress to delegate its own power  Even if it vests legislative power, that does not necessarily mean said power cannot be transferred  Unclear that agencies exercise “legislative” power 23

o Violates bicameralism and presentment o Supposed to be difficult to make laws, so greater agency flexibility is not really an argument for delegation  May understate importance of desirable government action o Anti-democratic to say regulatory policy decisions need to be insulated from politics o Delegating to agencies allows legislators to evade ability for politically unpopular decisions J.W. Hampton, Jr. & Co. v. United States (1928)  Question as to whether president’s power to adjust tariff duties to equalize costs (as delegated by Congress) is constitutional  Court holds that it’s constitutional; test here is “intelligible principle”—if there’s an intelligible principle, the executive is not exercising legislative power – this is the key takeaway o Essentially, Congress may not delegate the power to make laws, but can only delegate power to make policies and rules that implement its statutes  Rationale—partially textual—vesting clause, necessary and proper clause, but Prof. Halligan thinks functionalism carries the day b

Nondelegation Doctrine (Schecter Poultry; Whitman; Benzene)

Nondelegation Generally  Per Cass Sunstein, has had one good year and 211 bad ones (and counting)  Court really has washed its hands of this—see e.g. Whitman A.L.A. Schecter Poultry Corp. v. United States (1935)  Live poultry code; what amount of discretion under NIRA to Department of Labor —allows executive to prescribe codes of fair competition for any industry— basically allows him to regulate the economy as he sees fit  Only constraints are that the codes effect the policy in Title I of the act and that the associations not imposes restrictions on ission to hip or permit monopolies or monopolistic practices  Why is this a bridge too far? o Authorizes the executive branch/trade associations to create their own legislation—conveyed legislative power to the executive branch o Even more than that, it conveys that same power to the industry groups o “Fair competition” is too vague a phrase to provide the president with an intelligible principle o Even though FTC act also uses a similar phrase, it has a set of istrative procedures as safeguards—Congress set up a commission, and you could file a formal complaint and have a hearing, etc.—the NIRA has no such procedure o Scope of the statute is too large—covers literally the entire economy

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Unranked goals in purpose of statute are actually somewhat more confusing— executive would (theoretically) have no way to differentiate between which policies should be effectuated and which priorities should be prioritized Cardozo concurrence – “here in effect is a roving commission to inquire into evils and upon discovery correct them” – that’s a bridge too far – basically thinks the NIRA essentially allows Pres to exercise all powers under the Commerce Clause This is the last occasion on which the Court has invalidated an act of Congress as unconstitutional on nondelegation grounds

Whitman v. American Trucking Associations, Inc. (2001)  EPA supposed to set up NAAQS—basically national air quality standards for various types of particulates, chemicals in the air  Supposed to set standards based on “criteria [documents provided in §108] and allowing an adequate margin of safety which are requisite to protect the public health”  Difficult question here is that EPA must use these extremely vague standards to set extremely precise measures—so how can it defend its decision for .07 instead of .08 based on statute?  Court basically says that there is an intelligible principle here, and that’s all that matters o Bit of an argument about judicial incompetence to assess how much delegation is too much delegation  Thomas, concurring—thinks some stuff is too important to be delegated, but no principle on how to tell this  Stevens, concurring in judgment—wants to emphasize that this is really an exercise of legislative power—legislature can delegate its power, and it did so here; if this was done by the legislature, we would call it an exercise of legislative power, so might as well call a spade a spade  Most commentators have interpreted this as the Court washing its hands of nondelegation Industrial Union Department, AFL-CIO v. American Petroleum Institute (Benzene Cases) (1980) 

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Acting under authority of the Occupational Safety and Health Act of 1970, the Secretary of Labor, after having demonstrated a link between exposure to benzene and leukemia, set a standard reducing the airborne concentrations of benzene to which workers could be exposed. The standard reduced the allowable amount from 10 parts per million (ppm) to one ppm. This case was decided together with Marshall v. American Petroleum Institute. o Statute said secretary could decide “adoption of regulation reasonably necessary or appropriate to provide safe or healthful (places of) employment” Did the Secretary exceed his authority to set standards?

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Yes. Secretary had acted without knowledge that the new standard was necessary to "provide safe and healthful employment" as mandated by the Act. Nothing in OSHA's istrative record indicated that exposure to benzene at 10 ppm would cause leukemia and that exposure to one ppm would not. o Since the Secretary had not made a threshold finding that exposure to 10 ppm posed significant health risks, he was powerless to promulgate the new standard. o Must have conclusive evidence before allowed to regulate otherwise the regulation is outside the allowance of the authorizing statute. Saying that Agency has regulated outside of scope of the authorizing statute or not in accordance with it is the most common way now of enforcing a non-delegation principle without actually invalidating statute as an unconstitutional nondelegation Powell concurrence – wants cost-benefits analysis as well Rehnquist concurrence – thinks this violates nondelegation Marshall dissent – thinks majority’s opinion is nondelegation without coming out and saying it; says it’s impermissible for court to twist the statute in that way; would just allow this Congressional Control of Delegated Power (INS v. Chadha)

INS v. Chadha (1983)  AG has power delegated to him to suspend deportation proceedings for specific individuals, but if he does so, either the House or the Senate can a resolution saying alien should be deported; legislative veto  Holding – legislative veto is unconstitutional  Basically legislative veto violates bicameralism and presentment; Congress is exercising legislative power here, and, constitutionally speaking, an exercise of legislative power must be accompanied by a bicameral vote and presentment to Pres. o But with broad delegation, doesn’t having a legislative veto actually restore some of the legislative power to Congress?  Very formalist holding; idea is that Congress can make laws but cannot decide how they are implemented  Powell concurrence – don’t get rid of legislative veto, but this is an exercise of judicial power and thus violation of separation of powers  White dissent – very functionalist; thinks legislative veto is a really useful tool and court should not remove it from Congress’s toolbox  Effectively, Congress can transfer lawmaking authority to bureaucrats but cannot condition that authority’s use on its approval – can only delegate, cannot take it back Other Forms of Congressional Control  Appropriations – power of the purse – Congress controls funding to agencies o Can manipulate agency functions by attaching riders to bills 26

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o Can increase or reduce agency’s budget o Control resources at agency’s disposal o Some agencies (e.g. Fed, CFPB) are budgetarily independent, so this doesn’t work Hearings, Investigations, Audits o Make agencies testify as to their behavior—public embarrassment o Other stuff is pretty self-explanatory Appointment and Removal: History (Buckley v. Valeo; Myers; Humphrey’s Executor; Bowsher)

Buckley v. Valeo (1976)  Statute sets limits on campaign contributions and expenditures, puts in place reporting requirements; statute istered by the FEC, question as to how FEC is constituted—two voting appointed by president, two appointed by speaker of the house, and two by president pro tem of the Senate  Holding—officer of the United States (which FEC are) must be appointed by President (per Constitution); these guys aren’t appointed by President, so appointment procedure unconstitutional  Textual arguments to the contrary—necessary and proper clause, and also section 4—authority to regulate elections—so they appoint, etc. here because Congress controls elections  Very formalistic opinion  Also comes up with a test for who counts as an officer of the United States—“any appointee exercising significant authority pursuant to the laws of the United States”—this basically comes from nowhere; very formalist opinion and then there’s this statement with no elaboration  Appointment clause exclusivity – only President can appoint officers of the United States Myers v. United States (1926)  Question as to whether President is allowed to remove postmasters general without Senate consent—statute says both appointment and removal is by the President with the advice and consent of the Senate  Court says President can remove on his own, even though there’s no removal clause in the Constitution o Textual argument – vesting clause (puts all executive power in the President), and if Congress wanted to limit that power they could  Also, take care clause—president must faithfully execute laws, and should be able to pick his own people to do it o Textual counterargument is that Art II, §2 and 3 list out specific powers that president has—so why list specific powers if he had all executive power to begin with?

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o Decision of 1789—historical argument—first Congress allowed president to remove Secretary of Foreign Affairs without consent of Senate, so this is indication of what they thought removal clause entailed o Argument against that is that it was actually an explicit provision that would have allowed president to do that that was voted down—so could have been voted down because they didn’t want president to remove without Senate authorization or because they thought President already had it Could also make a functionalist argument here – original understanding of Art. II did not include plenary removal power, but rise of istrative agencies makes it necessary o This point could work both ways – might make it more dangerous Brandeis – dissent – thinks legislative power is broader than executive power, and that Article I is more important than Article II Holmes – dissent – Congress can create or destroy the office, so should be able to condition removal

Humphrey’s Executor v. United States (1935)  Issue is whether President can remove a member of the FTC (an independent agency) without Senate consent when statute establishing FTC only allows removal for certain things  Basically – Congress made it clear that it wanted agency and its heads to be independent of the executive to a certain extent, and allowing President to remove these officers at will would really hurt that  Test for an independent agency—whether or not the President can remove an officer  Distinguishes Myers by saying it was only applicable to a purely executive officer, and that FTC commissioners are quasi-legislative/quasi-judicial people so Pres. can’t remove them without consent  One possible way of squaring this group of cases is that when Congress merely places limits on President’s power to remove, that’s ok, but when they try to aggrandize their own power (cf. Myers, Chadha, Bowsher) the Court will step in and say nay nay Bowsher v. Synar (1986)  Deals with Gramm-Rudman-Hollings Act—question as to whether removal of Comptroller in this act (by Congress) is constitutional  Basically, it’s executive power that’s being exercised here—Congress appropriates money and comptroller decides what can be spent—and Congress cannot retain checks on exercise of executive power except for impeachment  “The Constitution does not contemplate an active role for Congress in the supervision of officers charged with the execution of the laws it enacts”  Constitution already provides for removal of of other branches (impeachment); anything beyond there for Congress is impermissible

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While statute does limit removal to only being for certain reasons, said reasons are broad enough that they can encom almost any conduct Stevens concurrence – it’s legislative, but there’s no bicameralism and presentment so law is still unconstitutional White dissent – this is of really minimal importance to the legislative scheme and does not present a threat to separation of powers; removal is fully controlled, and that’s just fine Appointment and Removal: Modern Doctrine (Morrison v. Olson; Peekabo)

Morrison v. Olson (1988)  Independent Counsel statute—if Attorney General determines that people covered by act violated federal law, he conducts a preliminary investigation; once he completes investigation, he reports to a special court that will appoint an independent counsel if the Attorney General believes that further investigation is warranted; the counsel has all the powers of the attorney general within the counsel’s sphere and can only be removed (basically) for good cause or condition that substantially impairs ability to perform the duty  Morrison subpoenas Olson, and Olson refuses to comply with the subpoenas because he says Independent Counsel statute is unconstitutional because it violates separation of powers and the President’s appointment and removal powers  Court concludes that Morrison is an inferior officer for four reasons: o Can be removed by higher executive officer  Scalia disagrees—says counsel is not inferior because inferior means subordinate to someone, and good cause is too strong a bar to subordination o Limited duties—only investigates the one issue o Limited jurisdiction—can only act within scope of jurisdiction granted by the special court o Limited in tenure—office lasts only as long as investigation o These are the “Morrison factors;” if dealing with inferior/principal officer issue, pay attention to these  Court articulates a new test for determining whether removal restriction is permissible; new test is “whether the removal restrictions are of such a nature that they impede the President’s ability to perform his constitutional duty” o Important in there is the aggrandizement of Congress’s power vs. encroachment on the President’s removal power distinction—if it merely encroaches, it’s ok generally  Majority doesn’t think this will impede the President’s ability, etc. because: o Good cause removal restriction allows President to get rid of special counsels for impairment, etc.  Justice Scalia thinks executive power is unitary, as opposed to bicameral, which means that executive power should be held in one place

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o Practically, he’s concerned about the fact that someone who takes this job is essentially g up to prosecute a specific person—so of course they’re going to be zealous, and there’s no real protections Justice Scalia feels unitary executive/separation of powers is so profoundly important because it screws up democratic ability when you don’t have it, and because president needs to have executive policy be consistent, etc.—he thinks it is legally incorrect and practically a really bad idea

Edmond v. United States (1997)  Question as to whether judges on Coast Guard Court of Criminal Appeals were inferior officers; all Morrison factors counseled against them being inferior except that they subject to superior officers because: o JAG (subject to SecTrans) could prescribe rules and procedures for them o JAG could remove them without cause o CAAF reviews every decision of the CGCCA where there is a) death sentence b) JAG decision to review or c) CAAF itself grants review  So, question as to whether this has replaced four-part Morrison test with the one part supervision/inferior test that Scalia advocated in dissent in Morrison o If so, where does that leave someone like the Solicitor General? Free Enterprise Fund v. Public Company ing Oversight Board (Peekaboo) (2010)  Statute ed to impose controls on ants after Enron crisis—SEC commissioners are removable only for cause, and the PCAOB is subordinate to them and are only removable for cause—dual for-cause restrictions  Majority basically says that if the SEC was removable at President’s discretion, or if PCAOB were removable at SEC’s discretion, it would be ok, but a dual forcause restriction is too much—constrains removal power too completely  Also concerned about slippery slope – how many layers of bureaucratic insulation can Congress put in if this is allowed?  Breyer’s dissent is purely functional, whereas Roberts’s majority decision is almost entirely formalist f

Presidential Control of Agencies (Various OIRA Stuff)

Presidential Control of Agency Actions  Ways Presidents Can Exercise Control Over Agencies o Appointments and removal o Budget requests through OMB o OMB and OIRA review  Where does authority come from? o Take Care clause o Vesting clause/unitary executive theory o Opinions clause  Is regulatory review that 12886 and its ilk establishes a good idea?

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o Yes    

Clinton did it, and Reagan did it, and Bush did it—so nonpartisan people think it’s a good idea Introduces political ability into the process—though the counter to this is that most people have no idea what OIRA is Agencies systemically inclined towards overregulation—not doing things is never an option normally, and this helps with chilling that Agencies captured? Maybe regulated groups have captured agencies

o No May lead to too much emphasis on regulatory costs May lead to too much emphasis on politics May delay important regulations OIRA head not likely to have substantive expertise in areas in which the agencies operate  Can’t really challenge OIRA’s review in court Provisions in orders that require agencies to submit their regulatory agenda – are these ok?    



3) The Regulatory Process and Judicial Review of istrative Action a

Introduction to the APA (Florida East Coast Railway)

The APA Generally  The APA is a quasi-constitutional statute – there’s a lot of room for interpretation  Very much a framework  Section 559 – APA doesn’t repeal additional requirements otherwise imposed by law, and a subsequent statute cannot supersede or modify APA’s procedural or judicial review requirements unless it does so expressly  Generally, courts have felt relatively free to adapt the APA to changing circumstances Forms of istrative Action Under the APA  Rules o Governed by 5 USC 551; defined as “an agency statement of general or particular applicability and future effect designed to implement, interpret, or prescribe law or policy describing the organization, procedure, or practice requirements of an agency” (551(4))  Orders o Any authoritative agency action other than a rule – defined as “a final disposition, whether affirmative, negative, injunctive, or declaratory in form, of an agency in a matter other than rule making but including licensing” o Agency process for formulation of an order is an “adjudication”  Both of these categories can be formal or informal 31

Formal/Informal Rulemaking  Formal Rulemaking o Formal rulemaking is governed under procedures laid out in 556/557 o Required if agency rule in question “[is] required by statute to be made on the record after opportunity for agency hearing” (553(c)) o Provide for an adversarial hearing where proponent of rule carries burden of proof and must show that proposed rule is ed by “reliable, probative, and substantial evidence” o Hearing presided over by istrative Law Judge o Final rule must be based on record promulgated in hearing  Informal Rulemaking (notice-and-comment rulemaking) o Governed by 553 of the APA o Three main procedural requirements:  Must give public Notice by publishing NPRM in Federal  NPRM must include statement of time, place, and nature of public rule making proceedings, reference to legal authority under which rule is proposed, and either or substance of proposed rule or description of subjects and issues involved  Agency must provide public with opportunity to comment on agency’s proposal  If agency decides to promulgate a rule, it must publish an explanation of rule (“incorporate in the rules adopted a concise general statement of their basis and purpose”) o No requirement that a final rule be based on any record compiled during the proceedings  Today, the vast majority of rulemaking is informal (thanks to Florida East Coast); really the only exception is when statute requires formal rulemaking Formal/Informal Adjudication  Formal adjudication o Governed by 556 and 557 o What people think of when they think of agency adjudications—trial-like adversarial hearings that involve an agency seeking to impose some sort of penalty on a regulated party or attempted to resolve a dispute between two or more parties under a regulatory scheme o Formal adjudications require an opportunity for oral presentation (except in cases involving claims for money or benefits or applications for licenses)  Informal adjudication o No section of APA that deals with this directly; inferred from the text o Minimal procedural requirements

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Rulemaking and Adjudication Compared  Rulemaking o Prospective – does not have retroactive applicability o Can deal with an entire industry or one particular party – no restriction there o Advantages  Prospective as opposed to retrospective (generally—adjudications can have prospective application as well)  Because it involves NPRM, etc., you get a much wider swathe of opinions o Disadvantages  More subject to agency capture and delay  Applies to a broader class than adjudication does, so harder to test something out  Adjudication o Essentially an exercise of judicial power – look at facts of a given case and make a decision o Essentially retrospective in nature, though it can have prospective effects o Three categories  Regulatory cases – e.g. rate-setting, licenses  Entitlement cases – e.g. applications for social security disability  Enforcement cases – with entities like the SEC o All involve issue of past conduct with disputed facts  Generally, it’s pretty easy to tell when rulemaking is required vs. when adjudication is required When Is Formal Rulemaking Required? United States v. Florida East Coast Railway Company (1973)  Freight companies want an ICC ruling set aside because ICC failed to comply with APA; state that ICC’s statute only allows it to establish freight car rates “after hearing,” and that they didn’t get a chance to make oral submissions at the hearing, which would violate 556 and 557 – question as to whether the “hearing” in ICC’s statute needed to be a formal one  Court says no; had already construed that to not require a formal hearing in Allegheny-Ludlum, and language saying that ICC needed to consider certain factors was not a reversal of that—ICC can consider factors just as well in an informal setting  Florida East Coast also intended that “hearing” within the meaning of the ICC statute was more than just the procedures listed out for informal rulemaking in 553 o Court says no—though APA requires adherence to previous statutes, think it’s perfectly acceptable to interpret requirement in ICC as being similar to APA because the relevant part of this statute was ed after APA

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  b

Court basically says that there is a distinction between prospective rules that affect all parties in an industry and proceedings that adjudicate disputed facts in particular cases; here, this is a prospective rule, so oral argument not necessary o Upshot of this is that unless a statute basically uses the exact words contained in the APA as to when formal rulemaking is required, court will not construe it to require formal rulemaking Douglas dissent – thinks this is due process violation; this is essentially a rate order, and thinks can’t saddle people with that without a full hearing Book says concern about overproceduralization animates the case – Court doesn’t want agencies to get bogged down Informal Rulemaking (Nova Scotia; Choc. Mfrs. Ass’n)

United States v. Nova Scotia Food Products Corp. (2d Cir. 1977)  FSA is concerned about botulism, so they promulgate a regulation as to how long and how hot fish have to be cooked and salinity for cooking; whitefish manufacturers say that cooking their fish that long is not commercially viable  Note that this is an enforcement proceeding, and not a direct challenge to the rule  Three challenges: o Beyond authority delegated by the APA (rejected, irrelevant) o FDA improperly relied on undisclosed studies in formulating regulation o No adequate statement setting forth purpose and basis of regulation  Court says that FDA must disclose the studies it relies on; otherwise Nova would not have a reasonable opportunity to comment and concise general purpose would be inadequate o “When basis for proposed rule is scientific decision, scientific material which is believed to rule should be exposed to view of interested parties for their comment. One cannot ask for comment on a scientific paper without allowing the participants to read the paper.”  Also says FDA needed to respond to Nova’s comments on commercial feasibility of regulation—major issues need to be commented on o Basically, if you can just ignore vital comments then the “concise general statement” would not be an adequate safeguard against arbitrary decisionmaking, which courts must reverse under 706 of APA o Agencies must address comments that raise questions “of cogent materiality”  Basically, opportunity to comment is construed here not in a narrow sense but in a broad sense—interested parties must have a meaningful opportunity to comment  Adverse consequences of move to paper hearing o Judges’ procedural rulings are outcome-driven o Expanded proceduralization may favor those affected interests with greater ability to mobilize resources to provide more or better information to rulemaking agency – disadvantages the little guy o 553 now overproceduralized – rulemaking too cumbersome, costly, and lawyer-driven, which undermines flexibility of agency 34

Rybacek v. EPA (1990) and Ober v. EPA (1996) – how can they be distinguished  Rybacek o Agency, during rulemaking comment period, solicited new information and then denied the opportunity to comment when it finalized the rule and included additional material in response to initial comments o Petitioners cannot comment on new material o Court says additional material was agency’s response to comments made during a public-comment period; they can add ing documentation o Concern that if agency is required to allow comment on new rule, could trap agency in endless cycle of comment – changes in response to comment – comment – etc.  Ober o Same facts, basically, but EPA solicited facts from a third party o 9th Cir. distinguishes from Rybacek on that grounds – says that stuff in Rybacek was EPA’s internal response to public comments, but that Ober involved new information solicited from third party Chocolate Manufacturers Association v. Block (4th Cir. 1985)  At issue here – when does agency have to provide supplemental notice – e.g. when agency decides to change a proposed rule, when must it allow parties a new opportunity to comment  WIC program—basically providing federally funded food and drink to people— takes a close look at health and decides it wants to eliminate sugary stuff  Original rule proposed specifically includes flavored milk as a food that would continue to be eligible for WIC program; there were some comments from local WIC supervisors saying flavored milk should be eliminated  Post-comment, Dept. of Agri. decides to eliminate flavored milk, and Choc. Manu. Assoc. sues to say that they are violating 553—they don’t have an ability to comment on this particular rule because this drastic a change was not contemplated in original rule  Basically court doesn’t think that Choc. Manus. didn’t get a fair opportunity to comment because new rule was so drastically different with no indication  Thinks that agency’s original proposal was replaced by one that reached the exact opposite conclusion, based on comments from only one set of parties representing a single view of the controversy  Court adopts a logical outgrowth test—notice is adequate if “changes in the original plan are in character with the original scheme and the final rule is a logical outgrowth of the notice and comment already given” o Does this give agencies an incentive to be vague, so that lots of things could be logical outgrowths?  If initial notice is too vague, court might deem it inadequate  Practically, agency wants rulemaking process to be efficient, and vagueness would not help with that

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c Intro  

Alternatives to Rulemaking: Adjudication (Chenery; Bell Aerospace) Central question – when must agency make prospective rules through rulemaking, vs. promulgating a general policy through an adjudication Issue is that adjudication seems to be limited to the facts before it, but can have prospective effects—just like courts

SEC v. Chenery Corp. (Chenery II) (1947)  Chenery Co. required to reorganize under Public Utility Holding Act of 1935; issue is that SEC did not want to approve reorganization plan promoted by company; eventually, corporate owners buy up a bunch of common stock so they retain control of company after reorganization  SEC initially redoes the plan saying that established equitable standards banned it; this is challenged in Chenery I o Court did not allow it to – said that there was no existing equitable standard of that nature o SEC proffered an alternative rationale, but Court refused to consider it – important principle – a court reviewing an agency action will consider only the basis for that action proffered by the agency in the rule or order at issue; can’t do an ad hoc justification  After losing Chenery I; SEC reissues same order, this time stating that it would effectuate the principles of the statute at issue (PUHCA)  Question is whether SEC can announce this sort of principle—conflict-of-interest or whatever—for the first time in adjudication  If you’re representing Chenery—say everything they did was lawful and aboveboard, and now the SEC is trying to come in and make that conduct illegal retroactively, and this should not be permitted o Jackson’s dissent makes that argument o Other argument is that this collapses the distinction between rulemaking and adjudication—it was intended to create a strict dichotomy, and the majority is folding rulemaking into adjudication  Allows agencies to avoid procedural safeguards inherent in rulemaking  Gov’t’s arguments would be that the agency is applying review to see if this is fair and equitable—the text that Congress gave the agency—and those are flexible, squishy words o Also argue efficiency concerns—flexibility to use adjudication where you want is important because rulemaking is cumbersome o Maybe case-by-case process of developing rule – similar to common law – would be more beneficial  In of retroactivity—Court uses a balancing test—balance the mal-effect of the retroactivity with the mischief of producing a result which is contrary to a statutory design or legal/equitable principles

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NLRB v. Wyman-Gordon Co. (1969)  Don’t need to know details—just know that a majority of the court expressed a skeptical attitude toward the use of istrative adjudication to announce general rules  However, court walks that back in following case Bell Aerospace Co. v. NLRB (2d Cir. 1973) (Friendly, C.J.)  NLRB had ongoing policy classifying buyers as managerial employees, meaning they could not unionize; NLRB decides in an adjudication that buyers are not managerial employees but that managerial employees can unionize anyways— question on appeal is whether NLRB can make that type of decision in adjudication  Friendly distinguishes from Chenery by basically saying that it’s not an issue of first impression since the NLRB had already adjudicated that issue before; also concerned that the agency is promulgating rules effective in all times and all circumstances through one case  Argument for rulemaking especially strong when NLRB is reversing a longstanding and oft-repeated policy on which industry and labor have relied  Difference between cases where agency cannot avoid a decision via adjudication and cases where it uses adjudication to launch a new policy when it did not need to – this is the latter  Also thought from Wyman-Gordon is that if agency wants rule to apply only prospectively it must engage in rulemaking  This decision is reversed NLRB v. Bell Aeospace Co. (1974)  Reversal of 2d Cir. opinion above  States that it reaffirms both Wyman-Gordon and Chenery – NLRB can announce new principles in an adjudicative setting and the choice to do so is lies within the NLRB’s discretion  Though there may be cases where reliance on adjudication would amount to an abuse of discretion, this is not one o Because this has such wide effect, makes sense to develop these standards on a case-by-case basis rather than in one fell swoop  Reliance on previous rules has not been shown to preclude NLRB from changing its policy o TO go against retroactivity, must how either a substantial adverse reliance on past agency policy or imposition of a penalty for past conduct that was consistent with then-prevailing policy o Bowen v. Georgetown University Hospital established that there is a strong presumption against reading an organic act to permit retroactivity  Scalia says in this case that rules have only future application, which adjudication can have past and future – inference from that is that if rule applies only prospectively then it must be done by rulemaking (this can also be inferred from Wyman-Gordon) 37



Yes, rulemaking would give wider views, but NLRB had discretion to decide that adjudication would also produce the relevant views

d

Alternatives to Rulemaking: Agency Policy Statements and Interpretive Rules (Pacific Gas & Electric; Chamber of Commerce v. Department of Labor; American Mining Congress)

Exceptions to Notice and Comment Requirement for Rulemaking  Matters pertaining to a military or foreign affairs function of the United States (553(a)(1))  Matters relating to agency management or personnel or to public property loans, grants, benefits, or contracts (553(a)(2))  Interpretative rules, general statements of policy, or rules of agency organization, procedure, or practice (553(b)(A))  When agency for good cause finds (and incorporates the finding and a brief statement of reasons therefor in the rules issued) that notice and public procedure thereon are impracticable, unnecessary, or contrary to public interest (553(b)(B))  First two above are uncontroversial; the last two are exceedingly controversial Good Cause – Three Sets of Circumstance Where Invocation of Exemption is Proper  If rule in question is “a routine determination, insignificant in nature and impact, and inconsequential to the industry and to the public” o Narrow exception; limited to cases where there is no controversy at all about the rule  If there is some kind of emergency situation that makes the delay associated with notice-and-comment intolerable o Example – new FAA regulations post-9/11; upheld in Jifry o Must be genuine emergency where substantial harm will be caused by delay (Hawaii Helicopter Operators Ass’n) o Agencies that invoke this exception usually say that initial rule is temporary, and initiate normal notice-and-comment process using interim rule as proposed final rule  Some courts have held that temporary status is necessary to uphold final rule  If rule would be contrary to public interest because advance notice of the proposed rule would prompt undesirable anticipatory behavior by affected parties o Particularly relevant to price-control regulations General Statements of Policy  Not defined anywhere in the APA, and leg. history doesn’t help  Basic idea – an agency policy statement is an agency memo, letter, speech, press release, manual, or other official declaration by the agency of its agenda, its policy priorities, or how it plans to exercise its discretionary authority Pacific Gas & Electric Co. v. Federal Power Commission (D.C. Cir. 1974) 38

 

   





Background – country facing natural gas shortage; question as to whether pipelines should curtail service on basis of existing contractual commitments or on basis of most efficient end use of the gas Agency promulgates (in what it calls a policy statement) what it considers to be a proper priority schedule and states that national interest would be best served by curtailment based on end use; also states agency will follow priority schedule; question as to whether this is a policy statement or instead needed to go through notice-and-comment rulemaking Court says general statement of policy presages an rulemaking or announces course agency intends to follow in adjudications General statement of policy does not establish a binding norm; it is not determinative of issues to which it is addressed, and agency cannot apply or rely upon a general statement of policy as law When agency states that it will consider not only policy’s applicability to the facts (like it was a rule) but also policy’s soundness as a whole (unlike a rule), then it’s a policy Conclude this order is a general statement of policy because: o Stated purpose was not to be an inflexible, binding rule but to give advance notice of curtailment policy that agency preferred – agency will proceed through adjudication in following that policy o Unlike Columbia Broadcasting, no immediate and significant effect on plaintiff’s business; abrogation of contractual commitments will only occur after individual curtailment plans filed and approved by agency, with all interested parties being allowed to present their case o And in Columbia Broadcasting, order had binding force of law; not true here Two different questions here, two different standards – does the agency policy have “force of law” and does the agency anticipate adjusting its policy decisions to circumstances of individual cases? o Question as to whether second question is legitimate –if agency has legal ability to act inflexibly, then why should it matter for judicial review purposes? Most challenging cases are those where policy statement does not have a legally binding effect but nonetheless cabins the discretion of the agency and/or exerts a coercive effect on regulated parties

Chamber of Commerce v. Department of Labor (D.C. Cir. 1999)  OSHA issued a “directive” pursuant to which each employer in selected industries will be inspected unless it adopts a comprehensive health and safety program designed to meet standards that in some respects exceed those required by law; question is whether this was a valid policy statement  While this does not establish a binding legal norm, it’s still invalid  Whether a rule is a policy statement is determined by whether o (1) it has only a prospective effect; amd

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o (2) leaves agency decisionmakers free to exercise their informed discretion in individual cases Because every employer not complying will be inspected, this is not tentative; it announces a decision already made OSHA its in its brief that inspection plan leaves no room for discretionary choices

Interpretive Rules  553(b)(A) exempts interpretative (interpretive) rules from notice-and-comment  Interpretive rule is declaration of how an agency interprets an ambiguous statute or regulation American Mining Congress (AMC) v. Mine Safety & Health istration (D.C. Cir. 1993)  Whether Program Policy Letters of the MSHA stating agency’s position that certain x-ray readings qualify as “diagnose[s]” of lung disease within the meaning of agency reporting regulations are interpretive rules  Four-part test for whether rule is interpretive – rule has legal effect, and is therefore not interpretive, if: o in the absence of the rule there would not be an adequate legislative basis for enforcement action or other agency action to confer benefits or ensure the performance of duties; o the agency has published the rule in the Federal ; o the agency has explicitly invoked its general legislative authority; or o the rule affectively amends a prior legislative rule  Here, agency is basically filling in the blanks – a term in a statute required a definition, so agency it defined; it still could have done enforcement actions without the definition, and did not invoke its legislative authority or publish in the federal  Only real issue is whether it amends a prior legislative rule; answer is no; a rule does not become an amendment simply because it supplies crisper and more detailed lines than the authority being interpreted (otherwise all interpretations would require notice-and-comment)  Big issue here is that it’s really difficult to tell the difference between lawmaking and law implementation—when does a definition/interpretation change the law? e Intro  

Judicial Review of Agency Procedure and Policy (Arbitrary and Capricious Stuff) (Ethyl Corp.; Vermont Yankee) Courts can compel “agency action unlawfully withheld or unreasonably delayed” (706(1)) o These orders are pretty uncommon Courts also required to hold unlawful and set aside agency action, findings, and conclusions found to be: 40

o arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law (706(2)(A))  most of the action is here o contrary to constitutional right, power, privilege, or immunity (706(2)(B)) o in excess of statutory jurisdiction, authority, or limitations, or short of statutory right (706(2)(C)) o without observance of procedure (706(2)(D)) o uned by substantial evidence in a case subject to sections 556 and 557 of this title or otherwise reviewed on the record of an agency hearing provided by statute (706(2)(E))  unimportant for our purposes o unwarranted by the facts to the extent that the facts are subject to a trial de novo by the reviewing court (706(2)(F))  rarely invoked Arbitrary and Capricious – Development of the Law  Difficult question – want to insure agencies don’t have untrammeled authority but also don’t want judges to interfere excessively o Do judges have the subject-matter expertise for this?  For first two decades, standard for arbitrary and capricious was extraordinarily deferential – if you could come up with any set of facts that would validate agency’s decision, that was enough (Pacific States Box & Basket)  60s – more calls for more aggressive judicial regulation of agencies  Leventhal – D.C. Circuit – advocates a “hard look approach” – agencies must have carefully considered all relevant aspects of the problem—that is, had taken a hard look at the issues—and exercised their discretion in a reasonable manner o Idea is that as long as agency has taken a hard look, its decision will be upheld; combines judicial restraint with supervision where necessary  Bazelon – also D.C. Circuit – wants arbitrary and capricious to be based on whether the agency employed “procedures that were conducive to reasoned decision-making” o Basicaly, courts are experts in procedure, and they can tell whether procedures are such that a decision is not arbitrary and capricious  Overton Park v. Volpe (1971) – Supreme Court starts to define doctrine o To make an arbitrary and capricious decision, reviewing court must consider whether the decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment o Inquiry is searching and careful, but narrow; court can’t substitute its judgment for the agency’s o Confused standard – “consideration of relevant factors” sounds somewhat procedural, but “clear error of judgment” sounds more substantive o Debate spilled over to DC Circuit in: Ethyl Corp. v. EPA (D.C. Cir. 1976)

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Key question here is that gasoline additive makers say that agency’s decision to ban lead fuel additives was arbitrary and capricious (Wilkey) says agency’s decision is arbitrary and capricious because it was not ed by evidence Reheard en banc; views: o Judge Skelly Wright  Not arbitrary and capricious if it is based on a consideration of relative factors and there is evidence that is suggestive of the decision being right  Basically wants rational basis review – if you can see a basis in the evidence for agency’s decision, then it’s ok, as it was here  Agency allowed to make explicit or implicit assumptions not ed by direct evidence  Decision arbitrary if no reasonable person, confronted with evidence before the agency, could reach conclusion agency did o Judge Wilkey  Articulates a basically similar standard, but disagrees with Judge Wright on the application  Wilkey thinks that if there is a gap in the chain of reasoning, it’s dispositive that agency’s decision was arbitrary and capricious  Compare to mathematical proof—misses a link in chain of reasoning  Decision arbitrary if it relies on unstated or uned inferences  Positive—makes agencies think through objections that have been raised in a very positive way  Negative—unclear as to whether this standard is consistent with text of 706—is agency really required to prove its policy? o Chief Judge Bazelon  Thinks that courts simply lack the ability to accurately judge technical cases like this  Thus, courts should focus on whether procedures were adequate  “The process making a de novo evaluation of the scientific evidence inevitably invites judges of opposing views to make plausible-sounding, but simplistic, judgments of the relative weight to be afforded various pieces of technical data”  Somewhat ed here in that two sides come to opposite conclusions on whether agency’s decision is arbitrary and capricious o Judge Leventhal  Thinks Bazelon is wrong  Says an abandonment of substantive review is entirely inappropriate  “Restraint yes; abdication no.”

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Vermont Yankee Nuclear Power Corp. v. NRDC, Inc. (1978)  Supreme Court delivers its opinion on the validity of Bazelon’s views; it’s not impressed (7-0 benchslap, for the record)  Atomic Energy Commission rulemaking complies with 553—goes beyond 553, in allowing oral argument, so on  NRDC doesn’t like rule promulgated, so sues—substantively and procedurally unacceptable  DC Circuit says AEC employed defective procedures—focuses on absence of any cross-examination of agency officials, S.Ct. unanimously reverses; additional procedural requirement goes beyond APA, which DC Circuit lacks the authority to do  Court disregards Bazelon’s views for several reasons: o Would make judicial review to be completely unpredictable—parties would be at the mercy of the court’s decision on procedures, and this would totally disrupt the statutory scheme o Monday morning quarterbacking—evaluated rulemaking on record produced at hearing, not on the info available to agency—inevitable that agency’d be missing some information when it decided on procedures, and unfair for court to make decisions based on that missing information o Fundamentally misconceives the nature of the standard for judicial review of an agency rule—interferes with policies provided by Congress o Court will typically assume that additional procedures—especially those that give interested parties more of an opportunity to participate—will always produce a better record for review  Black letter – agency procedures are adequate as long as they meet the statutory minima prescribed by APA and agency’s own regulations  Court thinks DC Circuit substituted its policy preference for the agency’s  Overton Park still good law after Vermont Yankee (Ginsburg’s analogy in Occidental Petroleum Corp.) o Overton Park established a performance standard – in order to allow meaningful judicial review, agency must produce an istrative record that delineates how it got there o Vermont Yankee proscribes design standards – can’t tell the agency the specific procedural steps it must follow to meet that performance standard o Similar distinction endorsed by Supreme Court in Pension Benefit Guaranty Corp. v. LTV Corp. (1990) f Intro 

The Hard Look Doctrine (Modern Arbitrary and Capricious) (State Farm) Modern arbitrary and capricious review follows the standard set out in the case below—adopts and expands Overton Park’s concept

Initial NPRM – 46 FR 21205

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Issue is what particular safety standards to prescribe for cars – airbags, auto seatbelts, or manual seatbelts Laid out three options o First two are switch-ups and delays in timing o Rescission option is the third one Agency concerned—reopening rule and revisiting it because they are concerned about public rejection of rule and because manufacturers/insurance companies are complaining Becomes clear that car manufacturers will only use automatic belts; won’t be using airbags, but public hates automatic seatbelts—will seriously hurt your utilization rates

Final Rule – 46 FR 53419  Agency decides to rescind the rule; gives several reasons o Wasn’t a study that addressed effect of only having an automatic seatbelt o Also unclear as to whether there’s public acceptance of these regulations o Could make public resistant to all regulations  However, statute doesn’t appear to state that public acceptance of the regulation is particularly important—good argument that it is useful, good argument that it’s not Resolution – Motor Vehicle Manufacturers Association v. State Farm (1983)  Extremely big case doctrinally—this is the black-letter law case as to how you look at agency rulemaking  Question as to whether agency actions described above are acceptable  Case is cited for what arbitrary and capricious means: o “The agency must examine the relevant data and articulate a satisfactory explanation for its action including a rational connection between the facts found and the choice made” o Arbitrary and capricious if it relies on factors Congress did not tell it to consider (e.g. public acceptance here) or ignored factors Congress told it consider o Did the agency entirely fail to consider an important aspect of the problem?  E.g. how big of a deal is it that agency did not consider airbags?  Answer is very big deal—can’t just disregard a viable alternative, this is one reason why the court invalidates this action—states that agency did not even provide an explanation as to why it rejected airbags  However—exactly which alternatives must an agency consider? What’s the limit?  How much consideration is necessary? o Did agency offer an explanation that simply runs counter to the evidence?

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This substantively upholds Overton Park – court might strike down agency actions as substantively irrational o Is the action so implausible that it could not possibly be the product of agency expertise? o Does action bear some reasonable relationship to requirements/purpose of the statute? o Is it inconsistent with prior agency action with no explanation?  Question about whether agency has considered all of the alternatives  Agency’s decision to change/rescind a policy should not be reviewed more deferentially—use the standard outlined above  Rehnquist, concur/dissent – agrees with stuff about airbags, but thinks that invalidating on basis of not allowing automatic seatbelts is too far—says that changed because of new political party, which is totally alright Hard-Look Review Generally  Justification o Principal justification is that it’s necessary to contain istrative overreach o Shadow of judicial review itself improves agency decision-making  Against o Judges don’t have necessary technical background o Can lead to bad judgments on the merits, based on misunderstanding of technical stuff o Because judges don’t understand technical stuff, might just substitute their own views o Reasons offered in official agency statements bear little connection to actual process of agency decision-making  But solution to this is just to require agencies to be honest o Producing records is really costly o Unpredictability of hard-look review makes agencies less likely to initiate rulemaking  This is a good thing if you think agencies are systemically inclined towards overregulation 

4) Agency Interpretation of Statutes Central question – how do courts review the agency’s interpretation of the statute the agency is charged with istering? a

Judicial Review of Agency Statutory Interpretation (Skidmore; Chevron)

Early View – Skidmore v. Swift & Co. (1944)  About whether or not time employees spend waiting in firehouse at night entitles them to compensation under FLSA  Skidmore deference merits deference to the agency’s view, but only to the extent that the argument manages to persuade 45

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Relevant factors: o Thoroughness evident in consideration of interpretation o Validity of reasoning o Consistency with earlier and later pronouncements o All factors which give decision power to persuade Is this a thumb on the scale? Yeah, it’s kind of persuasiveness, plus mindfulness of special position and expertise of the agency—not Chevron Know Skidmore’s out there, and know to think as to whether if Chevron isn’t available, Skidmore is

Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc. (1984)  This is the big one – maybe most important case in law  Clean Air Act required states that hadn’t met air quality standards only give permits for construction of new pollution sources if they met LAIR  Issue in this case is focused on stationary source—what does it mean? Is it each individual smokestack or what have you, or is it a plantwide definition—one power plant = one stationary source?  As NRDC – what’s your argument as to how the court approaches the review of the istrative action o Review as to whether the standard here is in keeping with the purpose of the statute o Also say EPA owes deference to its previous standard o Under APA, courts decide questions of law  Holding o Chevron Step 1 – whether Congress has spoken to the precise question at issue; if it has, then you’re done—go with what Congress said o Chevron Step 2 – if not, then whether agency’s interpretation is within the bounds of the statute—is agency’s interpretation reasonable?  Note that the court doesn’t question interpretive method here—just whether interpretation is ok, doesn’t matter how agency arrived at said interpretation  How to determine what statute means – per FN 9, use traditional tools of statutory construction  Step 2 – how deferential is this? How does one determine what’s a permissible construction of the statute? Is there a difference between an express delegation and an implicit delegation?  Here, court says statute was ambiguous  What are the normative justifications for this decision? o Uniformity—promotes coordination in federal law o Democratic ability—want incumbent istration to have the ability to change things so public can vote for things o Allows flexibility—allows agencies to change its policies with the current times, which hopefully leads to better outcomes

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o Expertise—allows agencies to use their expertise, which should also lead to better outcomes What are the normative disagreements from this opinion? o Judicial abdication of the responsibility to interpret the law o Counter to ability—Congress may increase its delegation, and agencies are less able than Congress o Concentrates too much power in executive branch o State Farm standard does not defer on policy, but this standard defers on law—isn’t that reversed? What is the legal basis for this decision? o Equate statutory silence or ambiguity with an explicit delegation of power —so use a much more deferential standard of review  Of course, could just as easily adopt presumption that Congress meant for courts to resolve that ambiguity o Kind of a pragmatic argument – Chevron is the best solution, and we presume legislators are reasonable people, so they probably meant to choose the best solution o Structural argument – our democratic structure prefers policymaking by democratically able agencies as opposed to non-democratically able courts, so legislature must clearly state when it wants courts to make policy, and courts should otherwise defer to agencies Is Step 2 distinct from arbitrary and capricious? o In both cases, court makes sure agency considered relevant factors o But there are some decisions agencies make that are really tough to trace to statutes they ister Chevron and Textual Interpretation (MCI; Brand X; Sweet Home; Brown & Williamson) Most cases are decided at Chevron step 1, and you always (as a lawyer) want to make a Step 1 argument Central issue – when is a statute ambiguous such that you can move on to Step 2?

MCI Telecommunications Corp. v. AT&T (1994)  Case about Communications Act; requires long-distance carriers to file tariffs when they will raise their rates—purpose of provision is to require all downstream companies to be treated equally  Question is whether nondominant carriers can be relieved from requirement to tariff; FCC says they can, based on language in statute allowing them to “modify any requirement” o Really a question of statutory interpretation  If you argue for FCC, say that modify is ambiguous, and any requirement suggests broad—so you move the Chevron step 2, and this is permissible within the statute 47

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AT&T would argue that pretty much every dictionary around uses modify to mean a very small change, and it’s a major change o Additionally, text itself had a smaller feel Is this really a modification? o Scalia says this is not a modification—it’s more than that, as rate-filing is a major part of a regulated industry, but does he really get to make that decision? o One wouldn’t say the French Revolution “modified” the status of the French royalty—equates a change like that with change contemplated by FCC Stevens, dissent – says modify can mean what FCC wants it to mean, but more importantly that Congress intended for FCC to have flexibility, Chevron intended to preserve that flexibility, and this opinion cocks it up Are textualist judges less likely to defer to agency constructions of statute? This opinion (and empirical studies) suggest that they are Doesn’t the fact that a case made its way to the Supreme Court suggest that there is at least some ambiguity? (Silberman’s view) o “If a case is resolved at the first step of Chevron, one must assume…a petitioner has brought a particularly weak case…or the agency is sailing directly against a focused legislative wind. Neither eventuality occurs very often.” o If you exhaustively seek meaning of statutes, don’t you end up undermining the normative values of Chevron?

NCTA v. Brand X Internet Services et al. (2005)  Question as to what telecommunications carrier means within Telecoms Act of 1996  FCC interprets telecommunications carrier to exclude cable companies; litigation over that  Key takeaway here is that the FCC can in effect overturn previous judicial decisions – 9th Circuit had interpreted this one way, FCC then promulgated regulation in opposition to that interpretation, and 9th Cir. disallowed it on stare decisis grounds – Supreme Court lets that , says that court interpretation only controls when it’s the only permissible interpretation, not the best interpretation Babbitt v. Sweet Home Chapter of Communities for a Greater Oregon (1995)  Statute to be construed – what does “take” mean, in the sense of “taking” a species, and what does “harm” mean in the definition  As Interior, argue that harm must mean something – surplusage argument – harm would be surplusage if it didn’t mean what Interior says it means o Ordinary meaning of harm includes what EPA has done  Landowner – harm should be given noscitur a sociis meaning, should be confined to context of other words around it

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o Dictionary meaning doesn’t say whether it’s direct or indirect – doesn’t resolve it – could still be construed to require directness Additionally, take has common law meaning as a term of art – basically means to remove a wild animal from its state of nature Central debate here is how definitional provision interacts with actual usage of “take” – dissent (Scalia) thinks “take” trumps, while Stevens thinks definitional provision is more important Can make a purposivist argument – purpose of act is to protect endangered species, and if you want to protect endangered species you allow this o Response – proves too much – just because something comports with broad purpose of the statute doesn’t mean it’s permissible textually o Also say Section 5 allows you to pay for land to protect a species – that’s the provision that’s meant to protect habitats Legislative history – original draft didn’t contain the word harm, and then it was added, meaning it was supposed to add something substantive o Begs question – adding harm to list doesn’t necessarily mean that you added something with separate meaning o Also argue that a definition of take which clearly included habitat destruction was removed by the Senate Commerce Committee Overriding question—give the different meanings attached to this statute by the Court, doesn’t that argue in favor of deferring to the agency’s interpretation?

Food and Drug istration v. Brown & Williamson Tobacco Corp. (2000)  Question as to whether tobacco is a drug within the meaning of FDCA – FDCA says FDA can regulate “drugs” and defines “drugs” as “articles other than food intended to affect the structure or any function of the body”  FDA’s argument is that duh, nicotine is a drug, and that allowing this to be a drug within the meaning of the statute fits the purpose  Brown & Williamson says that it doesn’t fit with structure here – if FDA could regulate it, they’d have to ban it, and they can’t ban it o Dissent’s response is to say that there is plenty of discretion there – FDA can regulate safety “as Secretary may prescribe,” so can regulate sale of tobacco in a way that makes public more safe without outright banning it  B&W also says that FDA over all these years had repeatedly disavowed jurisdiction over tobacco, and Congress has legislated in that arena—the disavowal has in effect been approved by Congress o Breyer says Congress has not explicitly stripped jurisdiction – which is what matters o Also argue that Chevron is designed to allow for change – so circumstances have changed, we now know tobacco is harmful, new evidence towards health effects and industry’s intent – so we should allow FDA to change its mind  Should agencies receive Chevron deference when they are interpreting the scope of their own statutory jurisdiction?

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o Some thinks court’s decision in this case was animated by that concern o However, Court in City of Arlington v. FCC (2013) held conclusively that agency constructions of their own jurisdiction receive Chevron deference h

Chevron and the Canons (DeBartolo; SWANCC)

How does Chevron affect canons of construction? Edward J. DeBartolo Corp. v. Florida Gulf Coast Building and Construction Trades Council (1988) o What happens when an agency adopts an interpretation of ambiguous text that raises serious constitutional questions when there’s another interpretation out there that doesn’t raise those same questions o Dispute with union workers; is handbilling coercion? o NLRB says handbilling is coercion, and the union loses—but isn’t that a restraint on free speech? Does the NLRB’s reading (if it’s entitled to Chevron deference) trump the constitutional avoidance canon? o NLRB says avoidance canon is grounded in Congressional intent—so it trumps Chevron o Court says NLRB’s interpretation is reasonable, but that constitutional avoidance trumps it – for same reasons constitutional avoidance exists in the first place o This isn’t precisely always true – Rust v. Sullivan – court does address the constitutional question, but there’s a four-justice dissent over that – says there’s a constitutional problem over this interpretation o Just know that there is flexibility here o Can justify prioritizing avoidance canon over Chevron as a means of narrowing delegations of lawmaking power to agencies o Counter is that it derogates executive branch’s power to implement the law Solid Waste Agency of Northern Cook County v. United States Army Corps of Engineers (SWANCC) (2001) o Question is whether wetlands/temporary ponds used by migratory birds are under the jurisdiction of the corps of engineers—reasonable reading of the statute under Chevron, but does it raise constitutional/traditional state functions concerns? o Local government wants to create a landfill for baled waste into some ponds that are just isolated—not connected to anything o Corps of Engineers says no because the ponds are used by migratory birds o Constitutional question is whether this exceeds the commerce power o Court thinks the statute is clear at Chevron step 1 because SWANCC wins, and that if they proceeded to Chevron step 2 they would apply constitutional avoidance and still find for SWANCC o One way to read it is that when an agency promulgates regulation that transfers a ton of power from the states to the federal government, then deference is reduced o Deference is not appropriate where an agency interpretation of a statute "invokes the outer limits of Congress' power" - this concern is particularly strong where the

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agency interpretation permits encroachment on a traditional state power - here, that over land and water use o Definitely some hesitation for Court to basically give Army Corps of Engineers jurisdiction over random ponds throughout the United States o Stevens dissent – no need to apply constitutional avoidance/traditional state functions; aggregated effect is clearly constitutional so Chevron, reasonable reading, defer i

Limits on Chevron (Mead Corp.)

Question as to what exact agency actions/interpretations of statutes are entitled to Chevron deference—Mead Corp. supplies the answer Christensen v. Harris County (2000) o Dispute over proper interpretation of FLSA; opinion of Department of Labor stated in an opinion letter; question as to whether that opinion merited Chevron deference o Answer was no; opinions in opinion letters, policy statements, agency manuals, and enforcement guidelines do not warrant Chevron; instead use Skidmore United States v. Mead Corp. (2001) o Does Chevron deference apply to interpretative rules, policy statements, informal adjudications, advisory letters, amicus briefs, etc.? o Question as to whether a tariff classification ruling by United States Customs Service deserves Chevron deference; answer is no o “istrative implementation of a particular statutory provision qualifies for Chevron deference when it appears that Congress delegated authority to the agency generally to make rules carrying the force of law, and that the agency interpretation claiming deference was promulgated in the exercise of that authority” o That kind of delegation can be shown by: o Agency’s power to engage in adjudication or notice-and-comment rulemaking (though want of this does not decide the case) o Some other indicator of comparable Congressional intent o No Chevron deference here because: o of delegation give no indication that tariff classification was meant to have force of law o Though this functions as precedent, that doesn’t make a difference; interpretive rules, for example, do not receive Chevron deference o Treatment by agency – classifications only binding between Customs and the importer to whom it was issued o 10,000-15,000 of these issued a year – in those numbers are these really all intended to have force of law? o Scalia – dissent – identifies three bad consequences of this ruling:

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o Protracted confusion—no one will know what is actually entitled to Chevron deference o Artificially induced increase in informal rulemaking – agencies will go through this even when they don’t have to in order to insure their rulings receive Chevron deference o Ossification of statutory law – this concern obviated (though who knows if that was a good idea) by Brand X o Says that each individual tariff did not have force of law/was not entitled to Chevron deference, but that once Customs decided to make it its official policy by defending it in Court it was entitled to Chevron deference o Is this view in conflict with Chenery I’s ban on post-hoc agency justifications? Where does Chevron apply? o If it’s developed in formal adjudication, formal rulemaking, and then anything that has the force of law (e.g. notice-and-comment rulemaking), can apply in formal adjudication o Chevron does not apply to: o statutes that apply to a whole bunch of agencies but are not istered singly by an agency (e.g. the APA, FOIA) o criminal statutes o policy statements o interpretive rules

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