Admin. Pierce 2002

  1. General
  2. Administrative Procedure Act
  3. Two types of provisions: Procedure making / structure
  4. Four types of decisions making procedure
  5. Formal Adjudication (§ 554-557)
  6. Same elements as judicial trial
  7. Only available if congress said “on the record after opportunity for agency hearing”
  8. Informal Adjudication (§ 555)
  9. Largest type (tons each year)(personnel decisions…)
  10. Specific choices among individuals – not able to apply § 554-57
  11. Lots of discretion
  12. Formal Rulemaking (§§ 553, 556-57)
  13. Informal Rulemaking ( § 553)
  14. To make legislative rules with same force and effect as statutes
  15. To determine which procedure to use:
  16. Agency’s rules (sometimes not clear or inconsistent w/ statute)
  17. Agency Statutes (in conjunction w/ APA)
  18. Rely on due process clause to determine what to use (statutes usually don’t have ‘magic words’ like “on the record after opportunity…”)
  19. What person is entitled to b/c of: history and tradition, natural rights, balancing interests …
  20. Most common is balancing of interests
  21. Judicial review ( §§ 701-06)
  22. Using due process to determine what procedures agency is required to use:
  23. Londoner v. Denver – p 290 – Judicial Requirements
  24. L owns land in city and D decided it was worth more so demanded higher property tax
  25. L wants a hearing to determine value of land – D refuses
  26. Court:
  27. L entitled to a hearing – due process, can’t “take” property from L
  28. D violated due process by “taking” land w/o a hearing
  29. Only applied to one individual – “individualized facts”
  30. Entitled to the adjudicatory process
  31. Bi-Metallic Investment Co. v. State Board – Political / Legislative Requirements
  32. State raising property tax on all land in city, B wants hearing and denied
  33. Court:
  34. Not entitled to a hearing b/c raised for all, decision applied to a class
  35. Dealing with Legislative facts – more like rulemaking then adjudication
  36. A general raise and not specific to B, or any one person - “Generalized facts”
  37. Entitled to the political process
  1. Administrative Adjudication
  2. Adjudicatory Due Process
  3. Timing and Elements of a Due Process Hearing
  4. Goldberg v. Kelly – p 291 Brennan 1970
  5. AFDC welfare program – kids dependent on welfare b/c parents can’t support them
  6. Challenge to procedure used to determine if someone is no longer eligible
  7. If man seen in house all the time, can’t get benefits
  8. Denied without a hearing; if want a hearing, could take up to a year
  9. So long that person destitute by time can get hearing
  10. Court:
  11. Statutory Entitlements (like welfare benefits) are “property”
  12. Pre-Goldberg were privileges, not rights
  13. Timing of the hearing and Temporary Deprivations (interval between stopped benefits and hearing) violated due process
  14. Due process demands hearing before depriving the rights (property)
  15. Nature of Required Hearing
  16. Need full oral evidentiary hearing before deprivation of benefits (not full judicial trial)
  17. Confrontation and cross examination
  18. Number of hearing skyrockets…
  19. Only time court held that due process required a full oral evidentiary hearing
  20. AFDC repealed in 1996, and now TANF, which says is not an entitlement (not property)
  21. Matthew v. Eldridge – 1976
  22. Social Security disability benefits – similar to AFDC when discontinuing
  23. Preliminary determination, only hearing if request and year later…
  24. Test – difficult to apply – Balancing interests
  25. Importance of state’s interest
  26. Risk of error attributable to the procedures made available and probable value
  27. Cost of added procedures
  28. Added would be the preliminary oral evidentiary hearing (based on Goldberg)
  29. Distinguished from Goldberg
  30. Generally, folks on disability NOT as needy; so potential deprivation not nearly as high (potential alternative income b/c not based on financial need)
  31. Written only procedure involves less risk for error with disability b/c more likely to be literate
  32. Can use doctor’s aid with the evidence
  33. Truth and Veracity of witnesses not as big a problem as w/ AFDC (here, doctor reports, medical facts, etc)
  34. Typically, more objectivity and less credibility problem
  35. Six years after Goldberg and so many hearings, cost went up so high money winds up coming from the people on welfare (lower benefits…) – many justices changed minds
  36. Social Security still an entitlement statutes, so “property” and due process still applies (unlike new TANF welfare…)
  37. Matthews not a good test – too many subjective debates – better then all alternatives though
  38. Goss v. Lopez – 1975
  39. Student suspended by school principle; entitled to a hearing, but:
  40. Hearing can be contemporaneous and held by the same people making the decision to suspend
  41. Due Process –
  42. Anything from face to face sit down (Goss)
  43. Full oral evidentiary hearing (Goldberg);
  44. Extensive paper hearing and potential oral later (Matthews)
  45. Brock v. Roadway Express – 1987
  46. Worker fired from job, claims b/c whistle blower – employer requests full evidentiary hearing before DOL makes them reinstate
  47. Court split four ways:
  48. Entitled to hearing
  49. Written evidence allowed
  50. Fine so long as provide employer w/ evidence against them
  51. Fear of revealing witnesses against employer b/c they’d be fired
  52. Interests protected by Due Process Hearing Rights
  53. Applied w/ life, liberty or property
  54. “Entitlement” rights and Public Employment
  55. Property Interest from these sources
  56. Statute
  57. When written in form of entitlement (Goldberg)
  58. Contract (controversial – only w/ employment contracts / personal services)
  59. Sinderman (gov’t action deprives of liberty; can be vindicated in form of post-deprivation hearing)
  60. Common Law (least controversial)
  61. Tenure Cases
  62. Board of Regents v. Roth , Perry v. Sinderman 1972
  63. Professors not rehired
  64. Court draws distinction between mere unilateral expectation to continue work (Roth) AND a justifiable expectation to continue (Sinderman)
  65. Based liberally on contract law – w/ Sinderman employee handbook / policies (Roth on year to year contract)
  1. “Bitter with the Sweet” – Rehnquist
  2. Legislative body may write a statute that confers an entitlement onto a class of people = gives them a property right
  3. BUT, legislative body may take away that right by adding certain administrative procedures that take away the right
  4. Due Process cannot compel agency to use further procedures
  5. Bishop finally was accepted by 6 justices, backdoor overrule of Goldberg
  6. Loudermill – 1985 –
  7. Teacher fired and demands some sort of hearing
  8. Bitter with the Sweet Dead!
  9. Procedure doesn’t get decided by the legislature, but by the courts
  10. Upholds Goldberg
  11. Teacher entitled to some pre-termination hearing - even if not full evidentiary – just to contest decision in someway before being fired
  12. Rehnquist
  1. Liberty Interests
  2. Prisoners’ rights and liberties
  3. Sandin v. Conner – 1995 - changed trend and now just few rights are protected (used to be tons…)
  4. Now just impose “atypical and significant hardship on inmate in relation to normal … prison life”
  5. Different interpretation of liberty
  6. Freedom from Official Stigmatization coupled w/ deprivation of tangible interest
  7. Constantineau 1971
  8. Name on list of “known alcoholics” to bars, etc.
  9. Stigmatized him w/o any opportunity to defend his name, to explain…never was adjudicated as alcoholic…
  10. Violation of liberty interest w/o due process
  11. Paul v. Davis 1976
  12. List of “known shoplifters” sent to stores
  13. The stigmatization is Not the liberty interest, but need:
  14. Deprivation of a Tangible Interest (like the right to buy alcohol) coupled with the Stigmatization = then a “protected liberty interest” violated
  15. Court unclear about what kinds of interests, and re-worked Constantineau
  16. Liberty can include any other constitutionally protected interest as well
  17. Roth – can’t be punished for exercising a liberty interest (free speech)
  18. If fired for no reason or in a way that doesn’t hurt reputation, no protected interest
  1. Federal Statutory Hearing Rights
  2. Finding a Hearing Right
  3. Florida East Coast – 1973
  4. ICC raises rates on all railroads based on resolution of contested legislative facts – what does “hearing” mean (congress gave ICC power – w/ hearing and considering certain facts)
  5. ICC – hearing occurred by giving notice and allowing RR to submit information, etc. – after that ICC raised rates
  6. RR claims no hearing and due process violated
  7. Court:
  8. “Hearing” is a malleable term and can refer to any number of opportunities to present your views: only need:
  9. Notice of intention
  10. Some opportunity to submit views
  11. Conclusions on why / reason by gov’t
  12. Court contrasts “hearing” with language in APA §§ 553-54
  13. Only triggers §§ 556-57 IF says “on the record after opportunity for an agency hearing” = then full evidentiary hearing
  14. Defined Magic Words necessary for full hearing
  15. Dissent – relies on Londoner and Bi-Metallic – rulemaking (Bi) and adjudication (Londoner) distinction
  16. Need a hearing in context of agency action that hurts an individual; and hearing needs full evidentiary hearing
  17. Majority – this is not individualized facts, but rather legislative and affects a class (Bi)
  18. Califano v. Yamasaki – 1979
  19. Social Security Act – if recipient is overpaid, SSA can recoup benefits by reducing future benefits (§ 204) UNLESS:
  20. Secretary finds recipient without fault or
  21. Would be unfair (equity) or
  22. Defeat the purposes of § 204
  23. Court:
  24. Can avoid constitutional issues IF can resolve issue on Statutory Basis (avoidance)
  25. Statutory Interpretation:
  26. SSA not require pre-recoupment hearing to determine if recipient overpaid BUT NEED a hearing to determine if recipient was without fault and to determine equity
  27. Objective and Subjective determinations
  28. Statute was silent on procedure to be used
  29. Pierce – low quality legal reasoning – looks at statute but there is no distinction in language of § 204 (a) and § 204 (b) as far as procedures
  30. Statutes say nothing about procedures
  31. Court should’ve used due process and used Matthews balancing test
  32. In that case, when recipient could lose 100% of benefits, only a written exchange necessary; but here, w/ only a ¼ of benefits lost, full hearing necessary = flawed and bad legal reasoning
  33. Only factor court looked at was risk of error …
  34. On-the-Record Adjudicatory Process
  35. Seacoast v. Costle – 1st Cir. 1978 No longer good law
  36. Statute about whether to give a permit must be “after opportunity for public hearing”
  37. Does this mean need a full oral evidentiary hearing?
  38. Holding 1
  39. 1st Cir. = agency must have full hearing
  40. S.Crt in FL East Coast said statute must say “on the record” to trigger full oral hearing procedures in §§ 556 –57 unless statute makes it clear in another way – but it doesn’t here…
  41. But not follow here, said still need hearing
  42. 1st Cir. Says this is quasi-judicial b/c it affects an individual, while Fla East Coast addressed a member of a class (Londoner / Bi distinction) (adjudicatory v. rulemaking)
  43. Is it really adjudicatory?
  44. Hard to classify b/c not a dispute between individuals, but public interest = citizen groups v. individual – facts not specific to these parties
  45. Facts at issues similar to Matthews , b/c based on scientific evidence, observations, opinions…
  46. Holding 2
  47. Agency cannot get off the record advice from agency employees who rely on extra-record resources
  48. Pierce says should be able to use this advice, b/c agencies are supposed to be able to depend on their experts in making decisions
  49. This is the power given to agencies by Congress
  50. Chemical Waste Management v. EPA – 1989
  51. Contrary to Seacoast courts follow this instead
  52. Similar language to Seacoast, but decide not need hearing here
  53. Move away from full oral evidentiary hearing and JUST written hearing b/c:
  54. Scientific Disputes – written just as good if not better then oral evidentiary hearings
  55. Oral evidentiary hearings wasteful b/c administrative resources – time, cost, bogged down..
  56. Chevron – must uphold agency’s interpretation of statute, if ambiguous, so long as interpretation reasonable
  57. Unless dealing w/ case of truthfulness and veracity
  58. Richardson v. Perales – 1971
  59. P and his doctor believed he was too disabled to work
  60. Offered written evidence describing the disability, etc
  61. SSA turns him down, but allows an oral evidentiary hearing
  62. SSA sent him to 5 specialists all who said he was fine
  63. Those reports entered into evidence – but hearsay – along w/ testimony of doctor
  64. ALJ finds the reports more persuasive than the testimony and denies disability
  65. Court:
  66. Agency head may receive evidence otherwise inadmissible by Fed. Rules of evidence (like hearsay)
  67. APA § 556 – “all relevant evidence” allowed
  68. Can rely on hearsay, even if contradicted by non-hearsay – if reliable
  69. Party can subpoena witnesses to cross them, but if not subpoenaed, then no right to cross
  70. ALJ discretion whether to grant subpoenas
  71. S. Crt. Here says agency CAN rely solely on hearsay, if reliable, when relying on APA
  72. Courts were split: some: Residuum Rule – an agency can NOT make a finding solely on hearsay, need other non-hearsay evidence too
  73. Other ways hearings are similar to and different from court trials
  74. Res Judicata and Collateral Estoppel
  75. Issues of Fact
  76. If issue already and actually litigated, and agency used adequate decision making procedures can NOT raise again
  77. Collateral Estoppel
  78. If issue triggers due process, sometimes triggers res judicata and collateral estoppel – Cir. Split as to whether they’re triggered
  79. Can argue against both if new evidence / applicable science arises
  80. Issues of Law
  81. Collateral Estoppel applies against a private party who litigates against the gov’t BUT not against the gov’t litigating against a private parties
  82. Would never get to supreme court, b/c circuits would be bound … never allow to split
  83. Agencies can keep arguing in other circuits (just not the one where decision already made)
  84. Stare Decisis and Consistency
  85. Applies to agencies a fair amount, but much less then it does to courts
  86. Courts OK w/ agencies overriding …so long as
  87. Agencies can overrule precedent – MUST:
  88. Admits overruling - Reasons, showing reliability and recent data concluding a departure from precedent
  89. Adequate Explanation
  90. Equitable Estoppel
  91. Normally, not against the gov’t
  92. Someone misleads you to taking action to your detriment, can make them go through with it…
  93. Merril v. Fed. Crop. Insur – 1947
  94. Insures farmers crops – farmer got on advice of gov’t
  95. Can’t get equitable estoppel against the gov’t; would’ve won if against private party
  96. Rare occasions could: if gross, intentional lies
  97. Formal Adjudication and Bureaucratic Decision Making
  98. General
  99. Adjudication to get an independent, detached view by the judicial mind to aid the individual
  100. Bureaucracy wants to find efficient, low cost way to maximize accuracy and consistency (no focus on individual)
  101. Judges vary and differ – not consistent
  102. Sacrifice efficiency and accuracy to the extent that you rely on the judicial mind
  103. No discretion to anybody
  104. Congress sets forth by statute who is to make what decisions
  105. Bureaucracy first makes most decisions
  106. Can then appeal to ALJ (adjudication) w/ oral evidentiary hearing
  107. Then can appeal to Appeals Council (bureaucracy) – can overrule ALJ
  108. Then can appeal to District Court (adjudication)
  109. Individual Judgment v. Institutional Decision
  110. APA § 556-57 – agency can leave the adjudicated decision; OR, can act as never was and replace w/ own decision and completely ignore ALJ findings / decision
  111. APA § 706 – agency findings of fact MUST be upheld in substantial evidence
  112. Highly deferential test – the agency’s findings of fact if supported by substantial evidence MUST be upheld, regardless of ALJ’s findings of facts (only on record, but mean nothing)
  113. Totally inconsistent w/ what happens in Federal Courts
  114. Separation of Functions
  115. Rulemaking, Investigation, Prosecution, Adjudication
  116. Some agencies could do all – due process concerns
  117. Model relies on internal separation of functions
  118. ALJ is neutral, tenured, etc. and can’t get rid of – not influenced by agency
  119. § 556-57 – if participate in investigation, cannot participate in decision making (adjudication), except as a witness – conflicts of interest too high
  120. Most have unitary model – agency head makes most decisions (controversial)
  121. Some have split enforcement model (OSHA, OSHRIC)
  122. Congress chooses to use for occupational health and safety and mind
  123. Two separate agencies to carry out functions
  124. One for rulemaking
  125. One for enforcement
  126. Less efficient and fewer prosecutions
  127. Managing Adjudicatory Personnel
  128. ALJ – regionally located…
  129. Problems
  130. Can take up to four years for hearing
  131. Lack of consistency – ALJs vary – diverse on decisions – SSA, if someone’s pain is SO bad…
  132. Over years ALJs say ‘yes’ to greater portion of cases, so portion of population on SSA going up
  133. Ways of Controlling ALJs
  134. Direct Review
  135. All opinions subject to direct review at next level
  136. Allowed in administrative law, but w/ SSA too many cases
  137. Rules
  138. Very difficult to apply rules to these cases
  139. Guidelines
  140. Examples: long delays, get rid of less productive judges?
  141. Set up Presumptive Productivity Goal – not fire if not met, but have meetings…etc.
  142. Nash v. Califano – 1980
  143. Long delays w/ ALJs in SSA – some not productive, but could only be removed by other ALJs for cause
  144. SSA created presumptive productivity goal of 240 cases/yr., only 40-60% ‘yes’
  145. ALJ claimed interfered w/ decisional independence and due process
  146. Dist. Court judges not say agency can make ALJ work harder
  147. Cir. Court sees SSA interests… OK w/ statutory command, no violation of due process, and ALJ still independent
  148. Heckler v. Campbell – 1983
  149. SSA new rule say “if can perform duties of any job anywhere in economy” and had tons of vocational experts… but not very consistent… W/ changing economy and regions
  150. Could contest the vocational experts findings – now, can SSA substitute the grid rule instead of testimony of expert?
  151. More Consistent, but how accurate?
  152. Takes away ALL of ALJ’s discretion, if just have to follow a grid
  153. Court recognizes need for rules to enhance consistency and accuracy… upholds grid rule
  154. Bowen v. Yuckert – 1987
  155. SSA rule w/ vocational experts, and 5-step process to determine if person could have any job out there…
  156. After step 2, if no ‘severe impairment’ (based on non-exclusive list) ALJ not go any further
  157. Doesn’t go on to consider age, education…
  158. Overall rate of finding folks disabled went down 15%
  159. Court split, but finds rule valid
  160. Concur – wanted to temper rule, so ALJ has discretion to go beyond step 2 if want
  161. Avoiding Adjudication through rulemaking
  162. Airline Pilots Assoc. v. Quesada – 1960
  163. FAA says all pilots must retire at age 60 – is this arbitrary and discriminatory?
  164. Information about health…
  165. Court:
  166. Could handle through hearings – need hearing before enforcing it, but still flying in meantime…ALJ might not make right decision;
  167. Too subjective w/ hearings and Huge administrative costs (pilots likely to get lawyers, experts…)
  168. Rule valid and not discriminatory
  1. Administrative Rulemaking
  2. Agency Authority to make Legislative Rules
  3. Rulemaking by adjudication
  4. With issuance of a generalized, broadly applicable rule of conduct
  5. Courts do it all the time – engage in rulemaking in the course of adjudication
  6. Agencies can and do the same thing
  7. But agencies don’t need to use adjudication, like courts, could just issue rule
  8. APA § 553 – three step process to rulemaking
  9. Issue public notice in Federal Register of potential rule
  10. Provide opportunity for public comment on the potential rule
  11. Issue rule with statement of basis and purpose
  12. Advantages:
  13. Fairness
  14. Gives all people potentially affected chance to comment and participate in process = more clear, detailed rule
  15. Efficiency
  16. A tone of money would go into a case…w/ witnesses, experts…
  17. Quality
  18. Greater breadth of participation
  19. Political Accountability
  20. Can complain to Congress and exec.
  21. National Petroleum Refiners v.