Administrative Law Prof Blog

Explicit articulation of reasons for decisions

Lexology has posted a note by C. Mark Bongard (Of Counsel, Dinsmore & Shohl LLP, Lexington, KY), "A benefit claim denial must be more than a mere conclusion - a reminder from the 7th Circuit".

Have you ever had a benefit claim denied? If so, was the explanation thorough and well reasoned or did it state conclusions without explanation? A case from the 7th Circuit decided July 23, 2009 (Love v. National City Corporation Welfare Benefits Plan, No. 07 C 50048) reminds us that ERISA requires a claim denial to explain why the claim is denied. ... The Court [ruled] that both claim denials failed to meet the ERISA standard under the statute and Department of Labor regulations to provide specific reasons for the denial. Therefore, the plan's decision to deny benefits was arbitrary. ... The moral of this tale is that a little exposition can save some time and effort in the long run - and result in compliance with ERISA.

Many statutes and regulations require decision-makers (private or government) to articulate reasons for their decisions, especially when denying some benefit. This aspect of procedural justice provides a record for review - even if the only review available is political or press - and helps legitimate the system by offering some psychological satisfaction to the applicant. EMM

Another "an agency must follow its own rules" case

From the Energy Legal Blog of Bracewell & Giuliani, "FERC Attempt to Expedite Hydro Relicensing Backfires" by John Bartus:

A relicensing proceeding that began in 1991 will continue for a few more years as the Second Circuit, in Green Island v FERC, sends the case back to the agency because FERC, in an apparently futile effort to speed up its process, closed the court house door on an intervenor in violation of its own procedural rules.  FERC rules require FERC to solicit interventions whenever there is a material amendment to the license application.  For initial licenses, there is an exception for a material amendment resulting from the applicant complying with the requests of resource environmental agencies.  But, citing FERC’s own regulations and rulemaking analysis, the Second Circuit ruled that this exception does not apply in relicensing.  Hence, when, as was the case in this relicensing proceeding, the applicant and the various resource agencies reach a settlement, FERC must determine whether that settlement results in a material amendment; if so, then the agency must solicit interventions.  FERC still has the option of determining that the settlement does not constitute a material amendment, but will have to make a finding to that effect before it can close the court house door a second time.

Thanks to Lexology for the pointer. EMM

Theory: Federalism and public administration ($)

Robert K. Christensen (political science, UNC–Charlotte) and Charles R. Wise (John Glenn School of Public Affairs, Ohio State University) have published "Dead or Alive? The Federalism Revolution and Its Meaning for Public Administration", 69 Public Administration Review 920 (2009). Abstract:

Federalism jurisprudence shapes the powers that public administrators have to achieve policy priorities. Federalism, however, is neither static nor simplistic as a concept, and a proper understanding of the environment in which public administrators work rests on a careful analysis of U.S. Supreme Court decisions. The authors review claims that a 2005 decision, Gonzales v. Raich, terminated a federalism revolution that had been ushered in a decade earlier. Does Raich in fact mark the end of the Supreme Court's federalism doctrine? Analysis of this question clarifies whether the past and current Court has articulated any direction touching on administrators' powers at both the national and state levels. The authors argue that before the federalism revolution is declared dead or alive, public administration can better understand the realities of the Supreme Court's doctrinal boundaries by examining a more detailed analysis of jurisprudence for what is says about the foundations of federalism such as the commerce clause, Fourteenth Amendment, Tenth Amendment, Eleventh Amendment, spending clause, and statutory interpretation issues.

EMM

Theory: Lynn on rule of law ($)

Laurence E. Lynn, Jr. (Lyndon B. Johnson School of Public Affairs at the University of Texas, Manchester Business School, and University of Chicago) has published "Restoring the Rule of Law to Public Administration: What Frank Goodnow Got Right and Leonard White Didn't", 69 Public Administration Review 803 (2009). Abstract:

Although the rule of law is universally regarded as a fundamental principle of democratic governance, the field of public administration continues to exhibit the "anti-legal temper" that emerged in the 1920s, when Leonard White's managerialism largely displaced Frank Goodnow's emphasis on the intimacy of law and administration. Although administrative law is a distinguished subfield of scholarship and practice within public administration, the consensus view within the profession seems to be that law is one of many constraints on administrative discretion rather than its source, a challenge to administrative leadership rather than its guiding principle. In addition to unacceptably narrowing the range of values infusing public administration, such a view undermines the profession's ability to contribute to the design of our governance arrangements at a time when constitutional institutions are being seriously challenged. To fulfill its constitutional role, public administration must commit itself to the rule of law as an institution that secures its legitimacy.

EMM

New administrative law articles

From the University of Washington's Current Index to Legal Periodicals:

• Conrad, Daniel H. Note. Into the wild green yonder: applying the Clean Air Act to regulate emissions of greenhouse gases from aircraft. 34 N.C. J. Int'l L. & Com. Reg. 919-949 (2009). [H]|[L]|[W]
• Davis, William Daniel. Note. What does "green" mean?: anthropogenic climate change, geoengineering, and international environmental law. 43 Ga. L. Rev. 901-951 (2009). [H]|[L]|[W]
• Hoffman, Sharona. Preparing for disaster: protecting the most vulnerable in emergencies. 42 UC Davis L. Rev. 1491-1547 (2009). [H]|[L]|[W]
• LeSage, Lisa M. Sticky thickets: local regulatory challenges for small and emerging sustainable business. 31 W. New Eng. L. Rev. 673-700 (2009). [H]|[L]|[W]
• McCabe, Margaret Sova. Loco labels and marketing madness: improving how consumers interpret information in the American food economy. 17 J.L. & Pol'y 493-530 (2009). [H]|[L]|[W]
• Peurach, Matthew. Comment. The FCC's prohibition on exclusive service contracts and its weak constitutional grounding. 17 CommLaw Conspectus 729-770 (2009). [H]|[L]|[W]
• Putin, Vladimir Vladimirovich, Prime Minister, Russia. Strategic planning for rehabilitation of the mineral resources base of the region during the formation of market relations (St. Petersburg and Leningrad Oblast). 2 J. Eurasian L. 27-174 (2009). [H]|[L]|[W]
• Ryan, Kevin. Comment. Communications regulation--ripe for reform. 17 CommLaw Conspectus 771-819 (2009). [H]|[L]|[W]
• Smetanka, Stella L. The disabled debt to Social Security: can fairness be guaranteed? 35 Wm. Mitchell L. Rev. 1084-1114 (2009). [H]|[L]|[W]
• Sopet, Kristen M. Note. Environmental law/administrative law--United States v. Rapanos: Justice Stevens's suggestion may not be the yellow brick road, but it is the best pathway to Oz. (United States v. Rapanos, 547 U.S. 715, 2006.) 31 W. New Eng. L. Rev. 879-914 (2009). [H]|[L]|[W]
• 2009 Symposium. Interference: Wireless Innovation, Public Interest, Regulatory Response. Keynote address by Meredith Attwell Baker; articles by Donna Coleman Gregg, Richard S. Whitt, Barbara Esbib, Adam Marcus and Gigi Sohn. 17 CommLaw Conspectus 371-677 (2009). [H]|[L]|[W]
  • Baker, Meredith Attwell. Keynote address. 17 CommLaw Conspectus 371- 376 (2009). [H]|[L]|[W]
  • Gregg, Donna Coleman. Lessons learned from the spectrum wars: views on the United States' effort going into and coming out of a World Radiocommunication Conference. 17 CommLaw Conspectus 377-415 (2009). [H]|[L]|[W]
  • Whitt, Richard S. Evolving broadband policy: taking adaptive stances to foster optimal Internet platforms. 17 CommLaw Conspectus 417-534 (2009). [H]|[L]|[W]
  • Esbin, Barbara and Adam Marcus. The law is whatever the nobles do: undue process at the FCC. 17 CommLaw Conspectus 535-655 (2009). [H]|[L]|[W]
  • Sohn, Gigi. The Gore Commission ten years later: reimagining the public interest standard in an era of spectrum abundance. 17 CommLaw Conspectus 657-677 (2009). [H]|[L]|[W]
  • Ung, Melissa. Comment. Trademark law and the repercussions of virtual property (IRL). 17 CommLaw Conspectus 679-728 (2009). [H]|[L]|[W]
  • Peurach, Matthew. Comment. The FCC's prohibition on exclusive service contracts and its weak constitutional grounding. 17 CommLaw Conspectus 729-770 (2009). [H]|[L]|[W]
  • Ryan, Kevin. Comment. Communications regulation--ripe for reform. 17 CommLaw Conspectus 771-819 (2009). [H]|[L]|[W]
  • Minora, Matthew. Comment. Rumor has it that non-celebrity gossip web site operators are overestimating their immunity under the Communications Decency Act. 17 CommLaw Conspectus 821-868 (2009). [H]|[L]|[W]
  • Major court decisions, 2009. 17 CommLaw Conspectus 869-875 (2009). [H]|[L]|[W]
  • Selected FCC docket summaries, 2009. 17 CommLaw Conspectus 877-880 (2009). [H]|[L]|[W]
• The Greenhouse Gas Marketplace: Commercial Regulation of Climate Change Solutions. Articles by Brian C. Murray, Heather Hosterman, Kevin L. Doran, Elias L. Quinn, Robert B. McKinstry, Jr., Thomas D. Peterson, Adam Rose, Dan Wei, Maria Savasta-Kennedy and Cymie Payne. 34 N.C. J. Int'l L. & Com. Reg. 699-917 (2009). [H]|[L]|[W]
  • Murray, Brian C. and Heather Hosterman. Climate change, cap-and-trade and the outlook for U.S. policy. 34 N.C. J. Int'l L. & Com. Reg. 699- 720 (2009). [H]|[L]|[W]
  • Doran, Kevin L. and Elias L. Quinn. Climate change risk disclosure: a sector by sector analysis of SEC 10-K filings from 1995-2008. 34 N.C. J. Int'l L. & Com. Reg. 721-766 (2009). [H]|[L]|[W]
  • McKinstry, Robert B., Jr., Thomas D. Peterson, Adam Rose and Dan Wei. The new climate world: achieving economic efficiency in a federal system for greenhouse gas control through state planning combined with federal programs. 34 N.C. J. Int'l L. & Com. Reg. 767-850 (2009). [H]|[L]|[W]
  • Savasta-Kennedy, Maria. The newest hybrid: notes toward standardized certification of carbon offsets. 34 N.C. J. Int'l L. & Com. Reg. 851- 889 (2009). [H]|[L]|[W]
  • Payne, Cymie. Local meets global: the low carbon fuel standard and the WTO. 34 N.C. J. Int'l L. & Com. Reg. 891-917 (2009). [H]|[L]|[W]
  • Conrad, Daniel H. Note. Into the wild green yonder: applying the Clean Air Act to regulate emissions of greenhouse gases from aircraft. 34 N.C. J. Int'l L. & Com. Reg. 919-949 (2009). [H]|[L]|[W]

EMM

Policy: Why an industry might want more regulation

While I am not big on policy issues, I believe it is important for lawyers to understand why an industry might want more regulation. It's counterintuitive. There is a quick discussion of this by Jonathan Adler on The Volokh Conspiracy, "Chemical Industry Seeks More Regulation".

I think there are several reasons that some chemical companies, particularly the larger players, may believe that supporting additional federal regulation is in their interest. ... First, the chemical industry is likely responding to the current political environment. ... Second, many of the larger firms within the chemical industry believe federal regulation is preferable to state and local regulation. ... Third, it's possible that some in the chemical industry see a competitive advantage in more stringent federal regulation. Regulation tends to have a more onerous effect on smaller firms.

There are three more reasons in the comments: "[I]t would probably reduce their exposure to litigation", "Regulation by the EPA will preempt, and be far less arbitrary and onerous than, regulation by Homeland Security", and "regulatory capture". EMM

New administrative law articles

From the University of Washington's Current Index to Legal Periodicals:

• Chapman, Peter F. Recent development. Offshore renewable energy regulation: FERC and MMS jurisdictional dispute over hydrokinetic regulation resolved? 61 Admin. L. Rev. 423-439 (2009). [H]|[L]|[W]
• Ela, Jed S. Comment. Law and norms in collective action: maximizing social influence to minimize carbon emissions. 27 UCLA J. Envtl. L. & Pol'y 93-144 (2009). [H]|[L]|[W]
• Galbraith, Christine D. Dying to know: a demand for genuine public access to clinical trial results data. 78 Miss. L.J. 705-776 (2009). [H]|[L]|[W]
• Irish, Maureen. Regulatory convergence, security and global administrative law in Canada-United States trade. 12 J. Int'l Econ. L. 333-355 (2009). [H]|[L]|[W]
• Jordan, William S., III. Chevron and hearing rights: an unintended combination. 61 Admin. L. Rev. 249-321 (2009). [H]|[L]|[W]
• Kirsch, Michael S. The limits of administrative guidance in the interpretation of tax treaties. 87 Tex. L. Rev. 1063-1135 (2009). [H]|[L]|[W]
• Mantel, Jessica. Procedural safeguards for agency guidance: a source of legitimacy for the administrative state. 61 Admin. L. Rev. 343-406 (2009). [H]|[L]|[W]
• Mattoo, Aaditya and Deepak Mishra. Foreign professionals in the United States: regulatory impediments to trade. 12 J. Int'l Econ. L. 435-456 (2009). [H]|[L]|[W]
• Nieman, Nathan T. Comment. Reforming the Illinois Freedom of Information Act: an opportunity to repair the leaky boat. 58 DePaul L. Rev. 529-557 (2009). [H]|[L]|[W]
• Patel, Nutan B. Comment. Is FERC still in the picture?: the primary function test as an obstacle to FERC regulation. 61 Admin. L. Rev. 441- 462 (2009). [H]|[L]|[W]
• Pine, William L. and William F. Russo. Making veterans benefits clear: VA's regulation Rewrite Project. 61 Admin. L. Rev. 407-422 (2009). [H]|[L]|[W]
• Robbins, Kalyani. Strength in numbers: setting qualitative criteria for listing species under the Endangered Species Act. 27 UCLA J. Envtl. L. & Pol'y 1-37 (2009). [H]|[L]|[W]
• Smith, Matthew A. and Michael S. McPherson. Nudging for equality: values in libertarian paternalism. 61 Admin. L. Rev. 323-342 (2009). [H]|[L]|[W]
• Biodiversity Protection and Mitigation. 38 Stetson L. Rev. 205-407 (2009). [H]|[L]|[W]
  • Fox, Jessica. Introduction. 38 Stetson L. Rev. 205-212 (2009). [H]|[L]|[W]
  • Gardner, Royal C., Joy Zedler, Ann Redmond, R. Eugene Turner, Carol A. Johnston, Victoria R. Alvarez, Charles A. Simenstad, Karen L. Prestegaard and William J. Mitsch. Compensating for wetland losses under the Clean Water Act (redux): evaluating the federal compensatory mitigation regulation. 38 Stetson L. Rev. 213-249 (2009). [H]|[L]|[W]
  • Ruhl, J.B., James Salzman and Iris Goodman. Implementing the new ecosystem services mandate of the Section 404 compensatory mitigation program--a catalyst for advancing science and policy. 38 Stetson L. Rev. 251-272 (2009). [H]|[L]|[W]
  • Strand, Margaret Peggy. Do the mitigation regulations satisfy the law? Wait and see. 38 Stetson L. Rev. 273-310 (2009). [H]|[L]|[W]
  • Murphy, James, Jan Goldman-Carter and Julie Sibbing. New mitigation rule promises more of the same: why the new Corps and EPA mitigation rule will fail to protect our aquatic resources adequately. 38 Stetson L. Rev. 311-336 (2009). [H]|[L]|[W]
  • Teresa, Sherry. Perpetual stewardship considerations for compensatory mitigation and mitigation banks. 38 Stetson L. Rev. 337-356 (2009). [H]|[L]|[W]
  • Mamouney, Louisa, Jennifer Stace and Caroline Heathcote. Incentives for biodiversity conservation in NSW, Australia. 38 Stetson L. Rev. 357-379 (2009). [H]|[L]|[W]
  • de Nooij, Reinier, Rob Lenders, Rob Leuven, Annemarieke Spitzen and Ronald Zollinger. Creating space by giving space: a management plan for integration of economic development and protection of the Natterjack toad in a Dutch polder. 38 Stetson L. Rev. 381-407 (2009). [H]|[L]|[W]

EMM

LatCrit XIV

Katie Coniglio, LatCrit XIV Dean's Fellow at American University, asked us to post the following:

The full preliminary conference program schedule for LatCrit XIV and the LatCrit/SALT New Faculty Development Workshop, hosted by American University Washington College of Law Oct. 1-4, has been released. It is here: http://www.tinyurl.com/LatCritXIV-program

Hotel and conference registration materials are here: http://www.tinyurl.com/LatCritXIV-registration

And the conference theme narrative and initial call for papers/panels are here, although the submission deadline has long past and, absent cancellations, there will be no more panel and work-in-progress slots available (with the exception of commentators for works-in-progress colloquia): http://www.tinyurl.com/LatCritXIV-call

LatCrit XIV promises to be a rich and memorable conference. Over 145 panel and work-in-progress proposals were submitted. We hope that many of you will be able to join us. Please note that September 14th is the deadline both for conference early bird registration (at a discounted rate) as well as for the early bird LatCrit hotel rate of $189, but that Labor Day, September 7th, is the deadline for an even lower "earlier bird" room rates of $169 for Friday and Saturday and $179 for other nights -- significantly less than the hotel's standard room rate. Our room block is selling very swiftly, and the hotel may sell out before these deadlines, so please do not delay in making your reservations. Washington is hosting a number of large conferences around the LatCrit XIV weekend and hotel rooms outside of our block may be scarce and expensive.

YMMV. EMM

Following the rules sounds simple, but ...

One of the features of administrative law that discourages lawyers and law students is its substantive complexity. Each field of regulation has its own substantive rules, a corpus that is often extensive and complex. Just look at the shear bulk of the Internal Revenue Code and Regulations. Further, there are procedural rules that differ from agency to agency and subject to subject, in spite of the Administrative Procedure Acts of the federal and state governments. On her Law of the Land blog, Patty Salkin (Albany) describes a city that didn't seem to understand the peculiar procedures required by the Telecommunications Act when refusing to let a cell phone company put up a tower where it wants one. "City Violated Telecommunications Act by Failing to Rebut Evidence as to Lack of Alternative Sites". 

The City Council denied the application on the basis that the “facility would have a commercial appearance and would detract from the residential character and appearance of the surrounding neighborhood.” The Council further noted that the proposal to locate the communications facility tower at the chosen location was not established as being the “least intrusive” means in which to expand coverage. ...

The cell phone company appealed to federal court, and the 9th Circuit upheld the district court's grant of summary judgment in favor of the cell phone company.

The Court then considered whether the denial violates § 332(c) of the Telecommunications Act. Applying the “least intrusive means” standard, the court explained that the standard requires the provider to “show that the manner in which it proposes to fill the significant gap in services is the least intrusive on the values that the denial sought to serve.” T-Mobile provided a detailed permit application that contained an analysis of eighteen alternative sites. The City, on the other hand, failed to rebut T-Mobile’s prima facie showing that no other location was available and feasible. When a locality rejects a prima facie showing, it must show that there are some potentially available and technologically feasible alternatives. In stating that there was merely a possibility of alternative locations, the City failed to demonstrate any viable alternatives. The City’s denial of the application therefore violated the Telecommunications Act[.]

EMM

Two interpretation questions

In "CAFC Remands Broker Penalty Case" on his Customs Law blog, Chicago attorney Lawrence Friedman (Barnes/Richardson) describes a recent Federal Circuit opinion (U.S. v. UPS Customhouse Brokerage, Inc., No. 08-1409) with two regulatory interpretation questions. First is the interpretation of a tariff classification.

[T]he Court of Appeals first held that UPS had been using the wrong tariff classification. This is despite a fancy legal argument based on the last antecedent rule. That's one of my customs lawyer favorites. It posits that an adjectival phrase modifies the previous noun most close to it. So, according to UPS, when the [tariff schedule] says "parts and accessories of machines of heading 8471: Not incorporating a cathode ray tube," it covers parts and accessories of machines that do not incorporate cathode ray tubes. The parts themselves might be chock full of CRTs. The Court rejected this and held that the modifier operates on "parts and accessories," not on "machines." This is easier to see if you have the tariff in front of you and can see the indents.

The next question had to do with how Customs and Border Protection [CBP] determines whether a broker has exercised responsible supervision and control. The relevant regulation is 19 CFR § 111.1, which lists factors Customs "will consider." Apparently, Customs did not consider all of the factors listed. UPS argued, therefore, that CBP's determination is invalid. Customs, on the other hand, seemed to admit that it did not consider all of the factors, but argued that it had discretion to consider only those it viewed as relevant. ...

The Federal Circuit disagreed. It held that the regulation provides a clear mandate to consider all the factors. Customs has discretion in how it weighs each factor but, according to the Court, it has to consider all of them. Agencies must follow their own regulations and Customs failed to do so.

Unfortunately for UPS, the Court did not invalidate the penalty case entirely. Instead, it remanded the case for further proceedings.

EMM

Judicial review - federal jurisdiction, sometimes, not so much

Judicial review of federal agency activities usually arises under federal question jurisdiction, 28 U.S.C. § 1331. Sometimes, however, Congress explicitly removes review of particular agency actions from federal court jurisdiction. A recent case, Colorado Heart Institute, LLC v. Johnson, 609 F.Supp.2d 30 (D.D.C. 2009), provides a quick example of such a situation. From the opinion:

The Stark Law, 42 U.S.C. § 1395nn, generally prohibits a physician from referring Medicare patients to an “entity for the furnishing of designated health services” (“DHS”) where a financial relationship exists between the physician and the entity. The Centers for Medicare & Medicaid Services (“CMS”) currently interprets this statutory language to refer only to the entity that directly bills Medicare for DHS. However, effective October 1, 2009, CMS will interpret this language to also include a second entity that provides DHS to the first entity  that directly bills Medicare. Plaintiffs are physicians and physician-owned entities that provide DHS under contract with hospitals in Colorado. Under CMS’s current interpretation, only the hospital – the billing entity – is considered to be furnishing DHS and, therefore, the individual physician Plaintiffs can lawfully refer their Medicare patients to the entities they own. But under CMS’s new interpretation, the physician-owned entities that provide DHS under contract with the hospitals also will be considered to be furnishing DHS. Consequently, absent an applicable exception, the Stark Law will prohibit the individual physician Plaintiffs from referring their Medicare patients to their own entities. Plaintiffs seek a declaration that CMS’s new interpretation of entities furnishing DHS is unlawful, and move for summary judgment.

The Court neatly summarizes federal jurisdiction:

Federal courts are courts of limited jurisdiction and the law presumes that a cause lies outside this limited jurisdiction. Because subject-matter jurisdiction is an Art. III as well as a statutory  requirement, no action of the parties can confer subject-matter jurisdiction upon a federal court. On a motion to dismiss for lack of subject-matter jurisdiction pursuant to Rule 12(b)(1) ... the court may consider materials outside the pleadings.

(Quotation marks and citations omitted.) The plaintiffs first tried to claim jurisdiction under the Administrative Procedure Act.

However, Section 702 of the APA does not provide an independent basis for  jurisdiction. See Califano v. Sanders, 430 U.S. 99, 107-07 (1977) (concluding that the "APA does not afford an implied grant of subject-matter jurisdiction permitting federal judicial review of agency action").

So we are back to general federal question jurisdiction under 28 U.S.C. § 1331. However, Section 405(h) of the Social Security Act, made applicable to the Medicare Act by 42 U.S.C. § 1395ii, provides:

No action against the United States, the [Secretary of Health and Human Services], or any officer or employee thereof shall be brought under section 1331, or 1346 of title 28 to recover on any claim arising under [the Medicare Act].

Holy exclusions, Batman! The effect intended by Congress is to channel all legal challenges to the Medicare Act through the agency. So why did the plaintiffs even try to bring this in federal court?

[T]he Supreme Court has recognized an exception: if the claimant can obtain judicial review only in a federal question suit, § 1395ii will not bar the suit. The question therefore is whether [Plaintiffs] could get [their] claim[] heard administratively and whether [they] could receive judicial review after administrative channeling.

(Again, quotation marks and citations omitted.) Aha! And it turns out that

It is undisputed that Plaintiffs could not themselves bring an administrative challenge before HHS because they cannot directly bill or receive payments from Medicare for DHS.

Sounds good.

It also is undisputed that the hospitals with which the [plaintiffs] contract – the entities that directly bill and receive payments from Medicare for DHS – could, if they so chose, bring an administrative challenge before HHS and get judicial review of HHS's determination. The issue, then, is whether the hospitals' ability to get administrative and judicial review of CMS's expanded interpretation of entities furnishing DHS ousts the Court of jurisdiction over Plaintiffs' claim.

Uh oh. It turns out that the D.C. Circuit has answered this already in Am. Chiropractic Ass’n, Inc. v. Leavitt, 431 F.3d 812 (D.C. Cir. 2005) - if there is any way the challenge could reach judicial review after the agency review process, jurisdiction over the challenge before agency review is gone.

The plaintiffs here argued that the hospitals had no incentive to challenge these new regulations and that this should negate the supposed availability of an indirect review (citing a 5th Circuit case), but the Court responded that it didn't matter according to the D.C. Circuit and anyway

the hospitals have the necessary incentive to file an administrative claim here because the [plaintiffs] provide the cardiac catheterization services "at a lower cost than could be provided by the hospitals" and "the hospitals profit by having these services under arrangement"

according to their own complaint. Talk about pleading yourself out of court.

The lesson here is that Congress can and does limit federal court jurisdiction over agency actions, and that the Supreme Court will let them do it as long as there is some eventual route to judicial review, however circuitous or unlikely. EMM

Theory: Mashaw on judicial review

Recently on SSRN: "Bureuacracy, Democracy and Judicial Review: The Uneasy Coexistence of Legal, Managerial and Political Accountability" by Jerry Mashaw (Yale). Abstract:    

Judicial review of bureaucratic decision making is simultaneously ubiquitous and contestable. The ubiquity of judicial review of the legality of administrative actions has two foundations. First, democratic governance presumes that officials are the servants of the people, and for that normative proposition to be true, "the people" must be able to hold officials accountable for their actions. But, judicial review is not the only accountability mechanism available. Its ubiquity requires, therefore, a second factual predicate - the incapacity of other accountability mechanisms to ensure that officials serve rather than rule. No functioning democracy worthy of the name has found the primary alternative accountability mechanisms, political or managerial control, adequate to the task of sustaining democratic accountability. For this reason "democracy" and the "rule of law" have become inextricably linked, with judicial review as the keystone of the legal accountability system.

Notwithstanding its prominent place in modern democratic governance, judicial review of administrative action remains continuously contestable. Complaints of the incompetence, impertinence or irrelevance of judicial review are at least as common as praise of judicial review's efficacy. The reasons for judicial review's contestability are the mirror image of the reasons for it's ubiquity. Judicial review of administrative action simultaneously supports other accountability mechanisms that bolster democratic governance and undermines them. The institution of judicial review of administrative action is, indeed, rife with paradox. It supports democratic governance by making officials accountable to unelected judges. It protects individual rights while simultaneously ensuring state control. It legitimizes expert, bureaucratic administrative judgment by subjecting that judgment to review by bodies who often have limited knowledge of either the technical data upon which administrative action is premised or the concrete situations within which particular bureaucracies must function.

The puzzle of judicial review of administrative action, therefore, is just this: how can such a necessary feature of modern democratic governance be accommodated to the demands of both effective administration and democracy itself? My approach to this puzzle is to view judicial review of administrative action as part of a broader question of governmental design in modern democracies, that is, how to make administration simultaneously managerially effective and politically responsive. But, this is a design problem that can only be managed, not solved. For, it entails maintaining an appropriate balance among competing forms of accountability in states committed to democracy, but constrained by the demands of efficacy and by the brute facts of social, political and economic complexity.

EMM

Estoppel

Clients often raise the issue of when reliance on government advice binds the government to that decision. The answer, we learn, is: Rarely. Patty Salkin (Albany) briefs a good case in "Commission Not Barred from Ruling Contrary to Staff Recommendation" on her Law of the Land blog:

A developer’s expenditure of $50,000 on a subdivision application, relying on a planning commission staff opinion that the project was not subject to the county’s mountain overlay district rules, did not prevent the county commission from taking the  opposite position and denying the application. ...

The developer pointed to the significant amount of money spent on engineering, avalanche, soils and hydrology studies before the board made its decision. It claimed it would not have incurred those expenses without first appealing an adverse decision from the planning and zoning administrator. Although the court has yet to categorically refuse to apply estoppel to cases involving the application of zoning ordinances, its prior decisions indicated a reluctance to do so, it said. In the past, it has declared that while a municipality may be estopped in limited circumstances, generally, the government’s exercise of its police power is not subject to estoppel.  As in the court’s prior decisions, the developer in this case failed to show “exigent circumstances” that would warrant applying estoppel principles, it said.  Considering the underlying principles of estoppel, it cannot be said the board took an inconsistent position in denying the application, because the board’s one and only official position was that the proposed disturbance sites fell within the MOD. The developer did not claim the board’s actions induced it to change position.  Rather, it relied on the opinions of staff members.  Furthermore, the court said, that reliance was questionable considering the staff report cautioned that the determination regarding the MOD was subject to further examination by the board.  Adopting the developer’s position would create an unfortunate precedent, the court continued. Effectively, a staff opinion would bind a board of county commissioners if a developer spent money in reliance on that opinion. That would strip the board of its sole statutory authority to approve or deny subdivision applications as provided by state law. The court did not reject the notion that estoppel may be applied in appropriate circumstances, but said this was not such a circumstance.

I suggest that this is an important principle to cover in any Administrative Law course, and this looks like a pretty good case with which to cover it. EMM

New administrative law articles

From the University of Washington's Current Index to Legal Periodicals:

• Canni. Todd J. Shoot first, ask questions later: an examination and critique of suspension and debarment practice under the FAR, including a discussion of the mandatory disclosure rule, the IBM suspension, and other noteworthy developments. 38 Pub. Cont. L.J. 547-609 (2009). [H]|[L]|[W]
• Fleming, Brendon S. Book note. (Reviewing Administrative Law of the European Union, edited by George A. Bermann, Charles H. Koch, Jr. and James T. O'Reilly.) 15 Colum. J. Eur. L. 561-570 (2009). [H]|[L]|[W]
• Staring, Graydon S. The American admiralty: division and devolution. 21 U.S.F. Mar. L.J. 75-94 (2008-09). [H]|[L]|[W]
• Vaccarello, Steven. Note. Solutions for premium-class air travel abuse in executive branch agencies. 38 Pub. Cont. L.J. 741-759 (2009). [H]|[L]|[W]

EMM

Whew! Or, why people hate regulations

While I usually don't post about subject-specific or agency-specific matters, Lawrence Friedman (Barnes/Richardson, Chicago) has a wonderfully complex review of "the difference between NAFTA marking, NAFTA originating, and origination for purposes of government procurement" in "A Cry for Help (Amended)". It starts with

[D]etermining whether some good is NAFTA originating does not tell you its country of origin. The NAFTA rules of origin embodied in HTSUS General Note 12 only tell you whether the article can be considered to have North American origin and, therefore, can be granted NAFTA duty benefits on entry. But, if the thing contains materials or labor from more than one NAFTA country, the Note 12 rules do you no good in figuring out what country to declare as the origin and how to mark the product itself.

And ends with

By the way, NAFTA looks as if it makes the procurement rules applicable to state and provincial governments. Article 1001(1)(a) expressly includes "state or provincial government entit[ies] set out in Annex 1001.1a-3." Funny thing -- that annex is blank except for a promise to revisit the issue in 1998.

Which leads to the last point: state, provincial, and municipal governments have their own local purchase programs. Many are confusingly called "Buy America" rules. The origin rules for these programs vary, and for that ... well ... you are on your own (or you could actually hire me).

It's an interesting example of the weaving and interweaving of regulations. EMM

Maintaining "the integrity of the process"

In her Law of the Land blog, Patty Salkin (Albany) reviews a New Jersey opinion on the municipal review of a subdivision in "Planner’s Conflict of Interest Does Not Require Submission of New Application". The matter had been remanded on a conflict of interest issue, and those objecting appealed again asserting that the developer had to start again from the beginning of the approval process.

The prior decision vacating the approval did not require that the developer file a completely new application. The Court said that there was no doubt that the Township planner had a conflict of interest, and that the inquiry before the Court concerns the appropriate remedy. The Court decline[d] to require a complete “do over” of the application review, noting that they have flexibility in fashioning remedies under the Local Government Ethics Law, N.J.S.A. 40A:9-22.1 et seq. Noting that in this case there was no direct financial conflict or direct participation in consideration of the application, and that a newly constituted board (all members except for one were new and had not ruled on the previous application) found the new EIS (which the Township planner was not involved with) was credible, the appeals court concluded that the decision below maintained the integrity of the process.

EMM

Compounding an error

Another interesting discussion from the Drug and Device Law blog of Jim Beck (Dechert LLP) and Mark Herrmann (Jones Day), "Compounding, Repackaging, or Manufacturing?".

We don't deal with FDA regulatory matters that often, and with the criminal side even less, but the recent decision out of Colorado in U.S. v. Bader, slip opinion here, was too juicy to ignore.

It points out a serious flaw in the FDA's regulatory scheme that we think needs a formal regulatory fix - and soon.

The issue in Bader is the limits on pharmacy compounding.

In Bader a pharmacist purchased bulk human growth hormone ("HGH") - although it could just as easily been some other type of drug (maybe steroids, often used for similar purposes?) - a drug that's subject to severe restrictions when distributed as a drug in the USA.

Anyway, the defendant bought HGH in bulk form and from our point of view, didn't appear to do much to it. As stated in the opinion, he:

    inspected the bulk HGH powder he had received for quality and potency, measured out the proper amount of bulk HGH powder into a single-dose container, separately packaged an appropriate quantity of saline for the consumer to mix with the powder, labeled and packaged the HGH dosage and the saline together, and supplied the two items to the customer. (The customer was responsible for actually mixing the saline and HGH before administering the drug.)

Slip op. at 4.

After that the defendant pharmacist was open for business, able to fill prescriptions in avoidance of otherwise strict regulations, because "the FDA rigorously regulates the importation and distribution of finished drugs that areready for distribution to consumers, but exercises relatively little regulatory oversight over the importation of drug ingredients to be used by pharmacists to create 'compounded' drugs." Slip op. at 3.

So the FDA busted this pharmacist, claiming that what he was doing wasn't "compounding," but merely "repackaging" of a drug that was effectively in consumer-usable form. Id.

Problem is, after all these years, the FDA still doesn't have any formal definition of "compounding" in its regulations. So it had a hard time distinguishing "compounding" from "repackaging."

What follows is a fairly detailed discussion of FDA over-action, Congressional reaction, the 9th Circuit finding the statutory fix unconstitutional, subsequent judicial action, and FDA inaction until the FDA finds itself in an enforcement pickle. A good read and a good example of what can go wrong in the regulatory process. EMM

General versus particularized regulation

An adult business zoning case from Patty Salkin's (Albany) Law of the Land blog: "Municipalities May Regulate Secondary Effects of Adult Business Uses in General, Without Putting Forth Evidence as to the Negative Effects Resulting from Each Individual Business Impacted" addresses the issue of an agency must regulate based on general effects or must examine the effect of each regulated entity individually.

Content-neutral time, place, and manner restrictions like the AZO [the regulation under discussion] are allowed as long as they are “narrowly tailored” to serve a “substantial governmental interest” and do not unreasonably limit the alternative modes of communication available. The Fourth Circuit Court of Appeals stated that the validity of such a regulation depends on its relation to the overall problem which the government seeks to ameliorate. In enacting AZOs the City is entitled to rely on the experience and studies of other cities and states, and is not required to conduct new studies, as long as the evidence relied upon is reasonably believed to be relevant to the problem at hand. Although the Appellants argued that the restriction was unconstitutional because data gathered after the passage of the AZO proved the opposite of what the AZO sought to resolve, the only requirement in reviewing AZOs are that a city show that in enacting its AZO, the city relied on evidence believed to be reasonably relevant to the problem at hand.  When passing an ordinance the City only needs to rely on the secondary effects of adult establishments in the aggregate, not on an individual basis.  The Court stated that what ultimately mattered in cases challenging AZOs is if the City had a sufficient evidentiary basis for adopting the ordinance, and Appellants conceded that the [City] did, so the partial judgment is affirmed.

The second contention that the Appellants put forth, that the AZO was unconstitutional because it does not mandate the ZBA to consider factual evidence concerning the secondary effects of adult businesses, was merely an attempt by the Appellants to avoid the consequences of the AZO’s amortization provision.  When an ordinance targets secondary effects, it does not make sense to require the ZBA to consider evidence that a particular adult establishment is not currently generating the effects that the AZO is trying to resolve.  There is no assurance that the establishments will not begin to generate adverse secondary effects. The Court held that they simply “do not see how the Constitution requires a zoning board to consider whether an adult establishment actually generates secondary effects when decided whether or not to grant a variance.”  The Court concluded that the City may enforce the AZO against an adult establishment without regard to whether that particular establishment generates undesired secondary effects. The district court properly granted summary judgment in favor of the City on the constitutional claim.

Independence News, Inc. v. City of Charlotte, 2009 WL 1533166 (4th Cir. June 3, 2009).

EMM

Private enforcement of regulations

Attorneys Beck and Harrmann at the Drug and Device Law blog have another good case on private enforcement of federal regulations in "Read The Blog, Luke!" (yes, they are a little snippy here, but understandably so), discussing Pantages v. Cardinal Health, No. 5:08-cv-116-Oc-10GRJ, 2009 U.S. Dist. LEXIS 64238 (M.D. Fla. July 27, 2009):

In any event, Judge Jones addressed the "more fundamental problem with Plaintiff's claim for negligence per se" that the parties had overlooked. Id. at *6. "Under Florida law, the violation of a federal regulation does not create civil liability based upon a theory of negligence per se in the absence 'of a legislative intent to create a private right of action.'" Id. Because there is no legislative intent to create a private right of action under the Device Packaging regulation, "Plaintiff's claim fails to state a cause of action for which relief can be granted because Florida law does not recognize a claim based upon a theory of negligence per se for an alleged violation of this particular federal regulation." Id. at *8.

EMM

A useful recent case for "how much process is due"

From the New York Public Personnel Law blog, "An 'at-will' employee given fair notice and an opportunity to be heard prior to dismissal has received the due process required by the 14th Amendment", discussing Biliski v. Red Clay Consolidated School District (3rd Cir. Docket No. 08-1742):

Edward A. Biliski, a computer technician was employed by the Red Clay Consolidated School District Board of Education. Terminated from his position following “several performance” issues,* Biliski sued, contending the School District had violated his procedural right to due process when it dismissed him.

The District’s defense: Biliski was an “at-will employee and did not enjoy a “constitutionally protectable property interest in his job.”

The Third Circuit ruled that “the process [Biliski] received comported with his rights under the Due Process Clause of the Fourteenth Amendment,” and decided that it was “unnecessary to address whether Biliski possessed a property interest in his continued employment."

Biliski was “under the impression” that he could only be fired for “just cause.” However, said the court, his belief was based on information he was given by co-workers rather than the District. ...

Applying “the interest-balancing framework” that the Supreme Court established in Mathews v. Eldridge, [424 US at 333], to decide whether the totality of the administrative process Biliski received in connection with his termination, including the written presentation of his position to the formal decision-maker, satisfied the “fundamental requirement of due process [, which] is the opportunity to be heard ‘at a meaningful time and in a meaningful manner,’” the Circuit Court decided Biliski received constitutionally sufficient notice of the reasons underlying the District's decision to dismiss him and that the pre-termination proceedings provided to Biliski was constitutionally sufficient.

Considering the several Mathews v. Eldridge factors noted above as relevant here, the court said it was satisfied that Biliski received fair notice of the reasons for the District's action and was give an opportunity to be heard as to why the Board should not terminate his employment.

In other words, given the interests at stake here, Biliski received all the process that was due him.

EMM