Administrative Conference of the United States ADMINISTRATIVE LAW ISSUES AND THE 102ND CONGRESS BASIC PRINCIPLES AND CURRENT TOPICS Fourth Annual Seminar for Congressional Staff Presented by The Administrative Conference of the United States January 14, 1991 ADMINISTRATIVE LAW ISSUES AND THE I02ND CONGRESS Basic Principles and Current Topics Fourth Annual Seminar for Congressional Staff Presented By The Administrative Conference of the United States January 14, 1991 Contents 1. Agenda 2. Speaker and Sponsor Information 3. Overview of the Administrative Procedure Act (APA) 4. Congressional Interaction with the Executive Branch Basic Administrative Law Principles Administrative Conference Recommendation 90-7: Administrative Responses to Congressional Demands for Sensitive Information. 5. Civil Penalty Materials Edles, Civil Penalties Receive New Attention, 9 Administrative Law Notes No.3 (April 1990) Administrative Conference Recommendations 72-6, Civil Money Penalties as a Sanction, and 79-3, Agency Assessment and Mitigation 0/ Civil Money Penalties, 1 CFR § 305.72-6 and 79-3. Scalia, Implementation 0/ Recommendation Relating to Civil Money Penalties (1973) (includes sample civil money penalty statute) List of Civil Money Penalty Statutes (1988) 6. Selected Articles Breger, Administrative Law A/ter Forty Years, 33 Fed. Bar New & J. 298 (1986). Breyer, Judicial Review 0/ Questions 0/ Law and Policy, 38 Adm. L. Rev. 363 (1986). Miller, From Compromise to COIl/rontation: Separation 0/ Powers in the Reagan Era, 57 G. W. L. Rev. 401 (1989). Shapiro, On Predicting the Future of Administrative Law, AEI Journal on Government and Society 18 (May/June 1982). Winter, The Quiche Brie/, Regulation Magazine (September/October 1986). 7. ACUS Information Sheet and Current Project List ADMINISTRATIVE LAW ISSUES AND THE 102ND CONGRESS Basic Principles and Current Topics Fourth Annual Seminar for Congressional Staff Presented By The Administrative Conference of the United States 2:00 p.m. Introduction and Welcome Marshall J. Breger Chairman Administrative Conference of the U.S. 2: 10 p.m. Basic Principles of Administrative Law Gary J. Edles General Counsel Administrative Conference of the U.S. 2:50 p.m. Judicial Review of Statutes and Agency Decisions Sally Katzen Partner Wilmer, Cutler & Pickering Public Member Administrative Conference of the U.S. 3:20 p.m. New Developments in Civil Penalty Enforcement Jeffrey S. Lubbers Research Director Administrative Conference of the U.S. 3:50 p.m. Break 4:00 p.m. Separation of Powers: Compromise or Confrontation Geoffrey P. Miller Associate Dean and Professor of Law University of Chicago 4:50 p.m. Adjournment Sponsor The Administrative Conference of the United States is a permanent, independent agency of the federal government, established by Congress in the Administrative Conference Act of 1964, 5 U.S.C. §§ 571-576. The Conference's purpose is to improve the procedures of federal agencies so that they may fairly and efficiently carry out their responsibilities to protect private rights and the public interest while administering regulatory, benefit and other government programs. In furtherance of this purpose, the Conference has two principal responsibilities. First, it is directed by statute to make recommendations to Congress, the President, agencies and the courts, on methods for improving the administrative process. Through its Chairman, it testifies before Congressional committees, and its staff assists members of Congress and congressional staff in connection with issues of administrative procedure and process. Second, it serves as a clearinghouse through which agency officials, private lawyers, university professors, and other experts in administrative law and government can combine their expertise and disseminate information concerning administrative law and federal procedure. This program is offered in furtherance of the Conference's educational mission. Seminar Speakers Marshall J. Breger is Chairman of the Administrative Conference. Previously, he was Special Assistant to the President for Public Liaison. He is on leave from his position as Associate Professor at New York Law School and, in 1988, served as visiting lecturer in law at the University of Pennsylvania Law School. Gary J. Edles is General Counsel of the Administrative Conference, co-author of Edles & Nelson, Federal Regulatory Process: Agency Practices and Procedures (2d ed. 1989), and Chairman of the Administrative Law Section of the Federal Bar Association. He also serves as a member of the faculty of the Department of Justice Legal Education Institute. Sally Katzen is a partner in the Washington, D.C. law firm of Wilmer, Cutler & Pickering. She is a public member of the Administrative Conference and past chair of the Section of Administrative Law and Regulatory Practice of the American Bar Association. She also served as Deputy Director for Program Policy of the Council on Wage and Price Stability. Jeffrey S. Lubbers is Research Director of the Administrative Conference and an officer of the Section of Administrative Law and Regulatory Practice of the American Bar Association. He was formerly an instructor at the University of Miami Law School, a member of the faculty of the National Judicial College, and a Research Fellow at the American Judicature Society. Geoffrey P. Miller is Associate Dean and Professor of Law at the University of Chicago. Before joining the law school faculty, he served as a law clerk to Justice Byron White, an attorney at the Department of Justice, and an associate with the Washington, D.C. law firm of Ennis, Friedman, Bersoff & Ewing. FEDERAL ADMINISTRATIVE PROCEDURE SOURCEBOOK Statutes and Related Materials Richard K. Berg Michael W. Bowers William C. Bush· Mary Candace Fowler Carole D. Iannelli Jeffrey S. Lubbers Charles Pou, Jr. David M. Pritzker OFFICE OF THE CHAIRMAN ADMINISTRATIVE CONFERENCE OF THE UNITED STATES May 1985 Administrative Procedure Act Citations: 5 U.S. Code §§551-559, 701-706, 1305, 3105, 3344, 5372, 7521; originally enacted June 11, 1946 by Pub. L. No. 404, 60 Stat. 237, Ch. 324, §§1-12. The Administrative Procedure Act, as originally enacted, was repealed by Pub. L. No. 89-554, 80 Stat. 381 (Sept. 6, 1966)' as part of the general revision of title 5 of the United States Code. Its provisions were incor porated into the sections of title 5 listed above. Although the original sec tion numbers are still sometimes used, all references to the Act in this volume are to sections of title 5. Section 552 has been revised significantly and is commonly known as the "Freedom of Information Act." Sections 552, 552a (the "Privacy Act"), 552b (the "Government in the Sunshine Act"), and sections 701-706 pertaining to judicial review are discussed separately. Overview: Attempts to regularize federal administrative procedures go back at least to the 1930's. Early in 1939, at the suggestion of the attorney general, President Roosevelt asked the attorney general to appoint a distinguished committee to study existing administrative procedures and to formulate recommendations. The Attorney General's Committee on Administrative Procedure, chaired by Dean Acheson, produced a series of monographs on agency functions, and submitted its Final Report to the President and the Congress in 1941. These materials, plus·extensive hear ings held before a subcommittee of the Senate Committee on the Judiciary in 1941, are primary historical sources for the Administrative Procedure Act. The Administrative Procedure Act was signed into law by President Truman on June 11, 1946. In the months that followed, the Department of Justice compiled a manual of advice and interpretation of its various provisions. The Attorney General's Manual on the Administrative Pro cedure Act, published in 1947 (and reprinted in the Appendix), remains 3 4 ADMINISTRATIVE PROCEDURE ACT -------- the principal guide to the structure and intent of the APA. The Manual (p. 9) states the purposes of the Act as follows: (1) To require agencies to keep the public currently informed of their organization, procedures and rules. (2) To provide for public participation in the rulemaking process. (3) To prescribe uniform standards for the conduct of formal rulemaking and adjudicatory proceedings, i.e., proceedings which are required by statute to be made on the record after opportunity for an agency hearing. (4) To restate the law of judicial review. The Act imposes upon agencies certain procedural requ'irements for two modes of agency decisionmaking: rulemaking and adjudication. In general, the term "agency" refers to any authority of the Government of the United States, whether or not it is within, or subject to review by, another agency-but excluding the Congress, the courts, and the govern ments of territories, possessions, or the District of Columbia. Definitions 1 of other terms may be found in section 551. Structure of the Administrative Procedure Act. The Administrative Procedure Act has two major subdivisions: sections 551 through 559, dealing generally with agency procedures; and sections 701 through 706, dealing generally with judicial review. In addition, several sections deal ing with administrative law judges (§§ 1305, 3105, 3344, 5372, and 7521) are scattered through title 5 of the United States Code. The sections per taining to judicial review are discussed in Chapter 2 of the present volume. As noted above, sections SS2, 5S2a, and SS2b are also discussed in separate chapters. The structure of the APA is shaped around the distinction between rulemaking and adjudication, with different sets of procedural re quirements prescribed for each. "Rulemaking" is agency action that regulates the future conduct of persons, through formulation and is suance of an agency statement designed to implement, interpret, or prescribe law or policy. It is essentially legislative in nature because of its future general applicability and its concern for policy considerations. By contrast, "ad;udication" is concerned with the determination of past and present rights and liabilities. The result of an adjudicative proceeding is the issuance of an "order." (Licensing decisions are considered to be ad judication.) The line separating these two modes of agency action is not always a clear one, for agencies engage in a great variety of actions. Most agencies use rulemaking to formulate future policy, though there is no bar to an nouncing policy statements in adjudicatory orders. AgenCies normally use 1 See 5 U.s.c. §§S5 II 1), 701 Ib)( 1) for other specific exemptions. ADMINISTRATIVE PROCEDURE ACT 5 a combination of rulemaking and adjudication to effectuate their prcr grams. The APA definition of a "rule," somewhat confusingly, speaks of an "agency statement of general or particular applicability and future effect. ... I' The words "or particular" were apparently included in the definition to encompass such actions as the setting of rates or the approval of corporate reorganizations, to be carried out under the relatively flexible procedures governing rulemaking.2 Beyond the distinction between rulemaking and adjudication, the APA subdivides each of these categories of agency action into formal and in formal proceedings. Whether a particular rulemaking or adjudication pro ceeding is considered to be "formal" depends on whether the pro ceeding is required by statute to be "on the record after opportunity for an agency hearing" (5 U.S.C. §§553(c)' 554(a)). The Act prescribes elaborate procedures for both formal rulemaking and formal adjudica tion, and relatively minimal procedures for informal rulemaking. Virtually no procedures are prescribed by the APA for the remaining category of informal adjudication, which is by far the most prevalent form of govern mental action.) Rulemaking. Section 553 sets forth the basic requirements for rulemak ing: notice of proposed rulemaking in the Federal Register, followed by an opportunity for some level of participation by interested persons, and finally publication of the rule, in most instances at least thirty days before it becomes effective. For a detailed discussion of rulemaking procedures, see A Guide to Federal Agency Rulemaking, prepared by the Ad ministrative Conference (1983). Excluded from the coverage of the Act are rulemaking involving military or foreign affairs functions and matters relating to agency management or personnel, public property, loans, grants, benefits, or contracts. These exceptions to the Act's general policy of providing an opportunity for public participation in rulemaking, to foster the fair and informed exercise of agency authority, are "narrowly construed and only reluctantly countenanced." They are not mandatory or intended to 4 discourage agencies from using public participation procedures. On the contrary, when Congress enacted the APA, it encouraged agencies to use the notice and comment procedure in some excepted cases, and many agencies routinely do so in making certain kinds of exempted rules. The Administrative Conference has encouraged this trend, and has called on l For discussion of the inclusion of "or particular" in the definition, see 2 K. Davis, Ad mtn,strallve Law Treat,se § 7:3 (2d ed. 1978); Morgan, Toward a ReVised Strategy for Ratemaking, 78 U. III. L. F. 21. 50 n.143 (1978). J See P. Verkuil, A Study of Informal Adjudication Procedures, 43 U. Chi. L. Rev. 739 11976l. for a discussion of informal adjudication. • American Fed'n of Gov't Employees, AFL·CIO v. Block. 655 F. 2d 1153. 1156 (D.C. Cir. 1981). 6 ADMINISTRATIVE PROCEDURE ACT Congress to eliminate or narrow several of these exemptions.s "Regulatory reform" legislative proposals considered over the years haye contained provisions to alter or eliminate several of these exemptions. Most rulemaking proceedings involve informal rulemaking, where all that the APA requires for public participation is an opportunity to submit written data, views, or arguments; oral presentations may also be permit ted. The published rule must incorporate a concise general statement of its basis and purpose. Despite the brevity of these requirements, it is im portant to note that Congress has routinely, through other statutes, added procedural requirements that affect various agency programs. These ad ditional statutory requirements may apply to specific agencies or pro grams, or may be government-wide (such as the Regulatory Flexibility Act; see Chapter 15), Recent presidents have also imposed additional re quirements for rulemaking. (See, e.g., Executive Orders 12,291 and 12,498, which are reprinted in the Appendix.) Though courts have sometimes sought to add procedural requirements, the Supreme Court's decision in Vermont Yankee Nuclear· Power Corp. v. Natural Resources Defense Council, Inc., 435 U.S. 519 (1978)' has, to a great extent, limited this kind of judicial activity.6 In Vermont Yankee, the Supreme Court held that where rulemaking is governed by the (informal) requirements of sec tion 553, as in the case of the Nuclear Regulatory Commission's regula tion of nuclear power plants, the courts may not require additional pro cedures. The APA also provides for formal rulemaking-a procedure employed when rules are required by statute to be made on the record after an op portunity for an agency hearing. Essentially, this procedure requires that the agency issue its rule after the kind of trial-type hearing procedures (§§556, 557) normally reserved for adjudicatory orders (discussed below). The Supreme Court, in United States v. Florida East Coast Railway Co., 410 U.S. 224 (1973)' held that such a procedure was required only where the statute involved specifically requires an "on the record" hear ing. Because few statutes do so, formal rulemaking is used infrequently.7 However, numerous agency statutes (often called "hybrid rulemaking" statutes) do require some specific procedures beyond the basic notice and comment elements of informal rulemaking. \ See Recommendations 69-8. 73-5. 79-2. and 82-2. at 1 CFR Part 305 (1984l. See generally. the discussion in Administrative Conference of ·the U.S .. A GUIde to federal Agency Rulemakmg (1983). b For a contrary view. Sl"e K. Davis. AdminIstratIve Law TreatIse. §§6:37-6:37-3 (1982 Supp.). 'See. e.g .. 21 U.S.c. §371IeH3) (issuance of standards under the Federal Food. Drug. and Cosmetic Act). In U.S. v. FlOrida East Coast Railway Co .. 410 U.S. 224 (19731. a statutory reo Quirement of a deciSion "after hearing" was held insuffiCient to make sections 556 and 557 applicable (setting of rates under the Interstate Commerce Act).