Administrative Law Of The United States

SCOPE OF ADMINISTRATIVE AUTHORITY

The authority of administrative agencies stems from their Organic Statute , and must be consistent with constitutional constraints and Legislative Intent . Generally speaking, therefore, agencies do not have the power to enact a regulation where:
# The regulation is an unconstitutional delegation of power;
# Or the Organic Statute explicitly denies authority (Note that failure to grant authority in later legislative efforts is not dispositive);
# Or Congress has enacted a separate regulatory scheme;
# Or the regulation is not based on factual findings;
# Or the regulation is not pursuant to serving the "public convenience, interest, or necessity;"
# Or the regulation is outside the agency's statutory purpose as articulated in its Organic Statute .

ADJUDICATIVE VERSUS RULE-MAKING ACTS

Agency acts are divided into two broad categories: Rulemaking and Adjudication . The scope of these two categories is defined in three ways:

Londoner/Bimetallic definition

Factors tending to make an act adjudicative in nature:

Involving a small number of people

Individuals involved are specially affected by the act

Decision based on the facts of an individual case, rather than policy concerns

Cases in which an act was ruled to be adjudicative:

Londoner V. City And County Of Denver , involving a tax levied on residents of a particular street without affording them the opportunity to have their objections heard in person.

Cases in which an act was ruled to be rulemaking

Bi-Metallic Investment Co. V. State Board Of Equalization , involving a tax levied on the entire city of Denver.

Administrative Procedure Act

According to section 551 of the Administrative Procedure Act ,

Rulemaking is "an agency process for formulating, amending, or repealing a rule."

--- A Rule in turn is "the whole or a part of an agency statement of general or particular applicability and future effect designed to implement, interpret, or prescribe law or policy;"

Adjudication is "an agency process for the formulation of an order;"

--- An Order in turn is "the whole or part of a final disposition ... of an agency in a matter other than rule making but including licensing;"

ADJUDICATION

Right to a hearing

There are three ways that an individual can attain the right to a hearing in an adjudicative hearing:

The Due Process clause of the 14th Amendment , providing an absolute constitutional floor, as summarized in the Mathews V. Eldridge test.

A State or Federal Administrative Procedure Act , which prescribes procedures only for Formal Adjudication ;

The agency's Organic Statute , which may exceed those required by the former two;

Right to a hearing based on Due Process

There are three issues involved in the constitutional right to a hearing:

Whether a hearing is required

When the hearing must be held (pre-termination or post-termination)

What the hearing must entail

RULEMAKING

Scope and extent of rulemaking power

Federal administrative agencies have the power to promulgate rules that have the effect of substantive law. The power to do so stems from the agency's Organic Statute , and extends to all regulations necessary to carry out the purposes of the Act, rather than being limited to powers expressly granted by the statute. The power extends to Substantive Rule s as well as Procedural Rule s. National Petroleum Refiners Assn. V. FTC , 482 F.2d 672 (D.C. Cir. 1983), ''cert. denied'', 415 U.S. 951 (1974). However, many states, such as Kentucky , have been less willing to allow their agencies to promulgate rules with the effect of substantive law.

Agencies may not promulgate Retroactive Rule s unless expressly granted such power by the Organic Statute . Bowen V. Georgetown University Hospital ,

The choice of whether to promulgate rules or proceed with Ad Hoc adjudicative decisions rests in the informed discretion of agencies. SEC V. Chenery Corp. , (Dissenting opinion arguing that the decision permitted agencies to rule arbitrarily, without law). Agencies may also announce new policies in the course of such adjudications.

Agencies are permitted to rely on rules in reaching their decisions rather than adjudicate, where the promulgation of the rules is within the agency's statutory authority, and the rules themselves are not arbitrary or capricious. Heckler V. Campbell , .

Agencies must abide by their own rules. Sameena, Inc. V. U.S. Air Force , 147 F.3d 1148)9th Cir. 1998).

Type of rulemaking

There are three types of Rulemaking :

Formal Rulemaking , which is rulemaking for which the Organic Statute requires that rules be "made on the record after agency opportunity for hearing," and for which the APA prescribes particular procedures; the phrase is required for formal rulemaking; simply requiring that rules be made "after a hearing" does not trigger the requirements of formal rulemaking;

Informal Rulemaking , which is rulemaking for which no procedural requirements are prescribed in the Organic Statute , and for which the APA requires notice and comment;

Hybrid Rulemaking , which is rulemaking for which particular procedural requirements beyond notice and comment, but not rising to the level of formal rulemaking.

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Administrative Law Of The United States