Administrative Law Prof Blog

Indian Casinos, Standing, The Nondelegation Doctrine, and Chevron - All in One Case!

I really enjoyed reading the new Fifth Circuit opinion in Texas v. United States, __ F.3d __, 2007 WL 2340781 (5th Cir. Aug 17, 2007); it is rich with issues relevant for several different areas of law.  The majority opinion provides a thought-provoking discussion of whether a state should have standing to sue when the requisite "injury in fact" is merely being dragged into an unwanted administrative proceeding with an Indian Tribe, and the fact that the state has less bargaining power as a result of losing the right to give ultimatums (i.e., walking away from negotiations with tribes). The majority (Chief Justice Edith Jones writing) says that both of these harms provide a sufficient basis for standing. This seemed like a somewhat new development in the rules for standing.

Although the decision nowhere cites Massachusetts v. EPA, it seems to follow that case's approach of "special solicitude for states" (at least regarding standing to sue the federal government).  The majority opinion in Texas v. U,S. seems to incorporate a lot of arguments about Eleventh Amendment state sovereignty creating unique circumstances where courts could find an injury-in-fact that would not apply to private parties (or tribes, for that matter).  In that sense, it is a victory for federalists. 

The Chevron analysis in the case is also interesting, because it turns on whether regulatory "gaps" created by courts invalidating certain portions of the enabling statutes can imply a legitimate delegation (warranting Chevron-style judicial deference). The majority says no, and I think the Court got this right. The Chevron doctrine is more properly about agency interpretations of statutory verbiage (a linguistic issue, really), not about agencies' implied authority. This is the main issue the dissenting opinion attacks, citing contrary decisions from two or three other Circuit courts - indicating there is a growing split of circuit authority on this nuance of Chevron (hence it would be a fertile subject for academic commentary and an eventual Supreme Court decision).  I also liked how the Chevron issue here was interwoven with delegation concerns, nicely illustrating a point Cass Sunstein made a few years ago that Chevron really is a "nondelegation canon."

This is also one of the somewhat-rare examples of an agency losing on Chevron step 2.  The low threshold for states to meet (reasonableness), and the long-standing precedent for judicial deference to agency interpretations, make it unusual for a court to rule against the agency at that stage in the analysis.  In this case, the Court held that the state lost on both Chevron step 1 and step 2.

I confess I also liked it that the casinos lost; gaming presents serious public policy concerns (there are overt economic benefits for the states, but also troubling externalities that affect the local area), and it seems to be an area where states should decide what is best for their citizenry. 

-Dru Stevenson

WSJ Commentary on Current Anti-Agency Environmental Litigation

This editorial from the Wall Street Journal nicely summarizes some of the current litigation by environmental groups against government agencies, particularly in areas affecting energy production.

-D.S.

Workers' Comp Reform in CA Affects National Numbers

This article describes how California's recent reform of its workers' comp system caused a dramatic reduction in payments to workers.  The drop was enough to reduce the overall stats nationwide for 2005, even though the rest of the country - if California's numbers were excluded - would appear to have an increase for the same period.

-D.S.

FDA Medical Device Approval Preempts State Law Claims

This opinion by the Wisconsin Supreme Court holds that the Food and Drug Administration's pre-market approval of a defibrillator device constitutes a specific federal requirement warranting preemption of state law tort claims.

-D.S.

Conference on Regulatory Cost-Benefit Analysis

Here’s a conference announcement of possible interest for admin law folk:

Cost-Benefit Analysis of Regulations: Lessons Learned, Future Challenges
(The Searle Center at Northwestern University School of Law)
October 11-12, 2007

Regulatory agencies have long understood the importance of the government's balancing the costs against the benefits of regulation. The necessity of taking both sides of the ledger into account was emphasized by the creation of the Office of Information and Regulatory Affairs (OIRA) in 1980. The function of OIRA has been precisely to weigh the benefits against the costs of government regulation.

This conference focuses on how cost-benefit analysis has functioned. OIRA Administrator Susan Dudley will give the keynote address. Several past administrators of OIRA - James C. Miller III, Wendy Gramm, Sally Katzen, and John Graham - will speak about how cost-benefit analysis has worked, or not worked. More broadly, others who have worked on analyzing government regulation will also participate.

This conference should be of interest to all those involved in regulatory affairs, as well as those seeking to better understand how the review of government regulation – by government itself - is conducted.

P.M.

State AG vs. County: New Settlement in Global Warming Case

This article reports an interesting regulatory twist: a state Attorney General coercing a county government into regulation of greenhouse gas emissions.  From the article:

California Attorney General Jerry Brown settled his global warming lawsuit Tuesday against San Bernardino County, working out an agreement on what had been a stumbling block to obtaining a deal on the state budget. Under the terms of the deal announced by Brown in a Los Angeles news conference, the fast-growing county in the heart of the Inland Empire of Southern California will amend its general plan within 30 months to include a greenhouse gas reduction policy. The process will include an inventory of all "known, or reasonably discoverable, sources of greenhouse gases" in the county.

In addition, the county will conduct an inventory on its 1990 emission levels and make projections for 2020. Then, the county will create a target for the reduction of emissions from discretionary land use by 2020.

-Dru Stevenson

No Govt Benefits for Posthumously Conceived Child

The New Hampshire Supreme Court recently ruled (on Aug 9) that children born via artificial insemination after the father's death (from banked sperm) cannot collect Social Security Survivors' Benefits. (Read the Court's Opinion).  At first blush, it seems a little odd for a state supreme court to be deciding a question of eligibility for a federal benefits program, but the court traced the jurisdictional authority this way:

[U]nder the Social Security Act (the "Act"), an individual who is the "child" of an insured wage earner and is dependent on the insured at the time of his death is entitled to child’s insurance benefits. 42 U.S.C. § 402(d)(1). In determining "child" status, the Act instructs the Commissioner [to] . . . apply such law as would be applied in determining the devolution of intestate personal property by the courts of the State in which such insured individual was domiciled at the time of his death. Applicants who according to such law would have the same status relative to taking intestate personal property as a child of parent shall be deemed such. Thus, if Christine may inherit from Mr. Khabbaz as his surviving issue under New Hampshire intestacy law, she is considered to be the "child" of Mr. Khabbaz under the Act and is therefore entitled to child’s insurance benefits. The Commissioner of the Social Security Administration (commissioner) denied Christine’s application for survivor’s benefits based upon an interpretation of RSA 561:1, our state’s intestacy distribution statute. After a hearing, an administrative law judge upheld the commissioner’s decision, and the Appeals Council of the Social Security Administration subsequently affirmed. Christine then appealed the commissioner’s decision to the federal district court. Recognizing that this case raises an unresolved question of New Hampshire law, the district court certified the question to us.

It appears, however, that the petitioner would have (could still?) obtain a different result by moving a modest distance across the border into Massachusetts.  Perhaps the lawyer should have proposed this option to the client, as a means of ensuring a more likely victory in the case?

A troubling aspect of this case: the Court's bizarre use of a DICTIONARY as authority...

Eng argues that her daughter is a "surviving issue" within the meaning of the statute. However, the plain meaning of the word "surviving" is "remaining alive or in existence." Webster’s Third New International Dictionary 2303 (unabridged ed. 2002). In order to remain alive or in existence after her father passed away, Eng would necessarily have to have been "alive" or "in existence" at the time of his death. She was not. She was conceived more than a year after his death. It follows, therefore, that neither she nor any posthumously conceived child is a "surviving issue" within the plain meaning of the statute.

Even apart from the tacit assumption about the "plain meaning rule" for determining the meaning of statutes, it seems strange to use a dictionary here, and even stranger to use it in the way the Court does.  Linguists scoff at courts using dictionaries, insisting that dictionaries are merely descriptive (and imperfect at that), and courts are misusing them as something prescriptive (controlling how the word shall be understood).  It does seem to turn the non-lawyer editors at Merriam-Websters into a type of super-Supreme Court.  There is also the internal inconsistency of saying we should go by the "plain meaning" of the statute, and then referring to a reference book to divine the answer.  If the meaning is plain, why the need to look it up?  That seems like a contradiction.

More disturbing, however, is the fact that the Court engages in a bit of statutory construction on the Webster's dictionary definition itself, holding that another word in the explanatory sentence, "remain," means existence prior to the death of the one who is survived.  Strangely, the Court felt no need to cite the dictionary for the definition of "remain," but engaged in some armchair linguistics (or amateur philology). How can a Court be so quick and confident about the meaning of "remain," but not about "survive"? Are courts qualified to engage in legal-styled interpretive exercises of non-legal texts, like the dictionary?  I don't get it.

-Dru Stevenson

Regulating Compliance and Ethics

The last few years has seen an explosion of regulatory activity in the area of corporate compliance and ethics programs. “Compliance and ethics” is the label given to an organization’s code of conduct, policies, and procedures designed to achieve compliance with applicable legal regulations and internal ethical standards. Of course, every organization takes at least some compliance measures – even the direction to “be careful” is an informal effort to comply with the negligence standard of care. But recently there has been a push to expand the scope and formality of such programs. Traditionally, companies attacked one or two major risks (like antitrust or sexual harassment) with a written policy and training, often after getting caught violating the law. The current push is for companies to proactively assess and prioritize their entire universe of risks, and then establish a comprehensive system for achieving compliance.

A series of future posts will explore several aspects of this growing area: Which agencies are pushing the hardest on compliance? What types of compliance measures are agencies requiring? How do agencies decide which measures to implement? What do government and society gain from making private organization’s implement compliance and ethics measures?

The most recent regulatory change in compliance and ethics has been the move from incentive to requirement. Agencies mostly took a carrot approach to compliance and ethics, promising leniency or favorable treatment to a regulated entity that had implemented an effective compliance and ethics program. Today, however, statutes and regulations are increasingly making compliance and ethics measures themselves legally required.  For example, federal law requires certain financial institutions to design, implement, and operate anti-money laundering compliance programs.  Note the irony – operating a compliance and ethics program is not itself a matter of compliance with the law.

To get things started, I point readers to a non-obvious source of compliance requirements and standards – deferred prosecution agreements. The Virginia Law Review recently posted a great series of pieces (here, here, and here) on the recent upsurge in the DOJ’s use of such agreements in criminal prosecutions of organizations. An essay by Professor Brandon Garrett frames the debate:

 . . . . Recently, . . . the Department of Justice (“DOJ”) adopted a novel strategy by prosecuting large organizations far more often, but leveraging the prosecutions to secure adoption of sweeping internal reforms. Without obtaining an indictment, much less a conviction, the DOJ recently prevailed on thirty-five leading corporations to enter into demanding settlements, including AIG, America Online, Boeing, Bristol-Myers Squibb Co., Computer Associates, HealthSouth, KPMG, MCI, Merrill Lynch & Co., and Monsanto, as well as several public entities.

  This new settlement approach avoids the collateral consequences of an indictment, while using the prosecution as a “spur for institutional reform.” By entering into agreements with organizations, prosecutors imposed rigorous requirements to promote compliance. For example, in 2005, KPMG International agreed to shut down its entire private tax practice, to cooperate fully in the investigation of former employees, and to retain an independent monitor—a former Securities and Exchange Commission (“SEC”) chairman—for three years, in order to implement an elaborate compliance program. Such agreements became common as prosecutors initiated more organizational prosecutions than before in response to post-Enron corporate fraud scandals. The agreements form a part of the larger fabric of federal response to a perceived breakdown in corporate culture that has also included passage of the Sarbanes-Oxley Act and enhanced regulatory enforcement targeting corporate fraud.

Professor Garrett notes that “[u]nlike . . . legislative and administrative responses, structural reform prosecutions raise questions about the reach of federal executive branch power.” Such questions, as well as related issues, will be the subject of future posts.

P.M.

ICE vs. Census Bureau

This article from the Washington post describes the ICE's refusal to suspend immigration raids during the upcoming census (as was done in the past).

-D.S.

New Direction for FISA?

This post from SCOTUS blog describes a first for the Foreign Intelligence Surveillance Court, asking the government to file a response brief to pleadings by the ACLU asking for access to the court's secret records. 

-D.S.

Reforming Immigration: It's the Little Things...

Think nothing is changing with immigration control and the borders?  This piece describes broad-based changes in the uniforms for the first time in 55 years.

-DS