Administrative Law - 24 Oct 2006

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Administrative Law - 24 Oct 2006
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Agency Organization

• Traditional Government Functions
• Legislative (Rulemaking)
• Judicial (Adjudication)
• Executive (Prosecution)
• Why are the separated by the Constitution?
• What is the problem of combining them in an
  agency?

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Constitutional v. APA Limits on Combining
Functions in Adjudications

• The APA provides that should be some separation
  of functions in adjudications to reduce the
  conflict between prosecuting and judging a case
• This is not a constitutional requirement
• The United States Supreme Court will allow a
  decisionmaker to have other roles
• There are limits - you have to argue that the
  facts make the appearance of conflict overwhelming

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Protections for ALJs

• Civil Service protections
• Cannot be assigned other duties - no cleaning the
  toilet if the Secretary does not like your
  rulings
• Nash v. Bown, 869 F2d 675 (Cir2 1989)
• Can have performance goals
• Cannot have decisional quotas
• What if quality control guidelines are biased
  toward supporting the agency position?

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Bias by Agency Heads - Withrow v. Larkin 421 US
35 (1975)

• Medical board case
• Same agency investigated the case, then pulled
  the doc's license
• No problem, at the constitutional level
• Is there something special about a medical board
  case?
• Who usually sits on a medical board?
• What is the notice and record issue?

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Criminal and Civil Law Parallels in Withrow

• Criminal law judges may rule on probable cause
  warrants and then also preside over the case
  resulting from the warrant
• Civil law judges make many decisions in pretrial
  proceedings that would bias their ruling in the
  case
• The problem is that there is a jury making the
  final decision in these cases, not the judge

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Valley v. Rapides Parish School Bd., 118 F.3d
1047 (Cir5 1997)

• Firing a school superintendent
• In sum, the record in the case unfolds like a
  soap opera. The respective views of the parties
  were regularly aired out in the print and
  broadcast media in the Rapides Parish area. One
  need only make a cursory review of the exhibits
  and the testimony to get a clear impression of
  the rancor and deeply held views of the
  aforementioned school board members prior to the
  discharge hearing. Indeed, the district court's
  sparing recitation of the facts underlying its
  ruling was a tacit acknowledgment of the general
  public's and the school board's awareness of the
  details of the accusations in the case.

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Court Ruling

• Upheld an injunction reinstating the
  superintendent until the board could give an
  unbiased hearing
• No hint from the court about how that might be
  done.

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FTC v. Cement Institute, 333 US 683 (1948)

• FTC issued reports criticizing a certain method
  of cost analysis
• Plaintiff argued that this showed that the
  commissioners were biased against their business,
  which relied on this method
• Court said this would prevent the agency from
  carrying out its legilative mandate

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American Cyanmid v. FTC, 363 F2d 757 (Cir6 1966)

• Chairman of the FTC had investigated drug company
  while counsel of a senate committee
• When the FTC investigated a complaint on the same
  subject against a drug company, the hearing
  examiner ruled for the drug company
• The Chairman participated in the commission's
  overturning of the hearing officer, but his vote
  was not critical
• The court found that his participation biased the
  outcome
• Would it have mattered if he had done the same at
  the FTC?

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(No Transcript)
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Association of National Advertisers , Inc. v. FTC

• FTC is adopting rules on TV advertising directed
  at children
• Chairman has written and spoken at length on the
  evils of TV ads aimed at children
• Plaintiffs seek to disqualify him because of bias
• What happened in Cinderella?
• Cinderella disqualified the same Chairman from
  participating in an adjudication because he had
  prejudged some of the facts.

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Is the Standard Different for Rulemaking?

• Clear and convincing evidence that he has an
  unalterably closed mind on matters critical to
  the rulemaking.

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Can the District Court make this into an
Adjudication?

• Said there were aspects of an adjudication to
  this rule making because there was a limited
  statutory right of cross examination
• Did the circuit court buy this?
• Rejected because modifications of rulemaking
  procedures do not make them adjudications

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How did the Court Characterize the Commissioner's
Comments?

• Discussion and advocacy
• What is it going to take to disqualify an agency
  head from a rulemaking?
• Charlton Heston as head of BATF?

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Pillsbury Co. v. FTC

• What was the FTC concerned about?
• Monopoly power in flour
• How did Congress interfere with the agency
  action?
• What did Senator Kefauver say?
• The court found this improper meddling
• Congress may not require testimony on ongoing
  adjudications
• Congress may request information as part of its
  congressional casework

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Principle of Necessity

• What is the Principle of Necessity?
• Why is the important for small agencies?

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Gibson v. Berryhill, 411 US 564 (1973)

• Optometry board was all independent practitioners
• Made it unprofessional for optometrists to work
  for employers
• Why?
• Court disqualified the whole agency
• Necessity does not cover illegal behavior
• What if they got the legislature to pass a law
  preventing employee optometrists?

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Successor Cases

• Gibson was an extreme case
• Financial conflicts are only one factor to
  consider, not the determining factor
• Must make a strong factual argument

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Morgan I

• Statute required a formal rulemaking
• Looks like a formal adjudication
• The Secretary had the power to make the decision
• Plaintiffs' submitted written briefs to the
  agency
• Asst. Secretary conducted the hearing and made
  recommendations to the secretary
• Secretary made the decision based on the
  recommendations

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How is this Different from a Trial?

• What did plaintiffs claim about the Secretary's
  decision?
• Did the court allow the Secretary to make the
  decision if he did not conduct the hearing?
• What did it require him to do?
• Why would this be a problem in a modern cabinet
  level agency?
• This was limited in subsequent cases, which found
  that the court should not inquire into the
  thinking of the secretary, but only look at the
  record

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What can the Secretary Do?

• Delegate the right to decide
• Not always permitted
• Adjudications often make policy, which the
  secretary should control
• Make the hearing officer's decision final after
  30 and intervene if the case is important to
  policy
• Set up an internal appeal process to flag
  important cases
• Decide the case on an executive summary
• Approve regulations based on expert staff
  recommendations