Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
because the plaintiffs lacked standing (they had suffered no “injury in fact”). Merely having a
grievance with an agency's policy is not the same as showing a concrete injury resulting from the
policy.
Add. Info: In Clarke v. Securities Industry Association (1987) the Supreme Court stated that the
zone of interests requirement will prevent standing only when the challenging party’s “interests
are so marginally related to or inconsistent with the purposes of the statute that it cannot be
reasonably assumed that Congress intended to permit the challenge.”
Add. Case: Tax Analysts and Advocates v. Blumenthal (D.C. Cir., 1977)--Tax Analysts, a
nonprofit group that promotes tax reform, and Field sued, seeking declaratory judgment that IRS
rulings allowing tax credits to foreign nations in connection with oil extraction are contrary to
the Internal Revenue Code. Parties claimed to have standing to sue as federal taxpayers. Field
argued that he had standing since he was a competitor who owned a domestic oil well not
eligible for the foreign tax credit. District court dismissed the action on the ground that the
parties lacked standing.
Decision: Affirmed. With regard to the injury in fact requirement, Field’s injury may be small but
it was found to meet the test. With regard to the zone of interests test, the court asked: did
Congress arguably legislate with respect to competition in the tax Code so as to protect the
CASE: Summers v. Earth Island (S. Ct., 2009)—The Forest Service is required by statute to
have a notice, comment and appeals process for proposed FS actions for projects and land
management plans. The FS has some leeway to not file Environmental Impact Statements (EIS)
in some cases. The FS did not file an EIS for a timber salvage operation on 238 acres that had
burned in a forest fire (if salvage is not done within a year, the timber is worthless). Earth Island
challenged the sale as in violation of the statute because the EIS and a formal sale notice were
not prepared. The district and appeals court agreed that the FS violated Congressional intent and
blocked the sale. FS appealed.
Decision: Reversed. The power of courts over legislative and regulatory actions is limited. Much
of the focus concerns if there has been a violation of a Constitutional right. Standing is a doctrine
that reflects the separation of powers. A potential plaintiff must show that he is suffering or faces
Questions: 1. Given the words of the Court above, how could plaintiff have demonstrated
standing?
There was nothing particular established. A general objection to a small timber sale of a burned
2. Does this indicate that standing is difficult to obtain?
No, a plaintiff must show some way particular harm is inflicted—such as an inability to enjoy a
forest.
Ripeness—The ripeness doctrine is concerned with whether the agency action being questioned
Exhaustion—The exhaustion doctrine requires a party to complete relevant agency appellate
procedures before turning to a court for review. All internal agency procedures must be utilized,
Add. Case: Cohen v. U.S. (2nd Cir, 2009)--Federal tax code imposes a 3% excise tax on phone
calls. Telephone service providers collect the tax and pay it to the IRS. The tax is supposed to
vary according to the distance of a call. At the time the tax was imposed, the longer the distance
of a call, the higher the rate charged, but today most calls are billed by time, not distance. The
IRS continued to set taxes based on distance of calls. Multiple taxpayers sued seeking refunds,
contending the tax rate they were charged was too high. The IRS fought the suits, but lost every
one. The IRS issued Notice 2006-50. It announced that distance based taxes would be
discontinued and that those who had paid too much in tax between February 28, 2003 and
August 1, 2006 could request a refund. Suits were then filed challenging the refund process,
which was a complicated process that resulted in billions of dollars in taxes not being refunded.
The district court held that plaintiffs had to exhaust all administrative remedies before appealing
to the courts. Plaintiffs appealed.
Decision: Reversed. The IRS Notice was a final agency action subject to judicial review under
the Administrative Procedures Act. The notice set out the procedure that taxpayers must follow
to obtain a refund. It was the agency’s final word on the matter that did not indicate further
Scope of Judicial Review—The court’s scope of review determines how far it can go in
examining an agency action. Generally speaking, the court’s scope of review will depend on
whether the issue involves a question of procedure, statutory, interpretation, or substantive law.
Review of Substantive Determinations—Agencies’ substantive determinations are generally
provided the lowest scope of judicial review. Courts will generally yield to an agency's judgment
in technical and scientific matters. Agency actions will not be found arbitrary, capricious, or an
abuse of discretion if:
(1) The agency has sufficiently explained the facts and its policy concerns.
(2) Those facts have some basis in the agency’s record.
(3) On the basis of those facts and concerns, a reasonable person could reach the same judgments
the agency has reached.
Add Case: Butte Environmental Council v. U.S. Army Corps of Engineers (9th Cir.,
2010)--The City of Redding, California, wanted to build a business park on a 678 acre site
containing wetlands. An environmental impact statement (EIS) was prepared. The wetlands are
habitat for three species protected under the Endangered Species Act (ESA). The EIS contended
that the business park site would do less environmental harm than alternative locations. The
Army Corps, which reviews requests to build in wetlands, reviewed the EIS and ruled that
alternative sites were available that would do less damage. A study by EPA also recommended
alternative locations. The City responded with an amended EIS that protected half of the land in
the proposed business park site. After the revision, the Corps determined that little damage
would be done and issued a building permit. The Fish and Wildlife Service (FWS) reviewed the
request and held that environmental damage would occur, but that the permit should be issued
because the City would pay for wetlands remediation elsewhere to offset the damage in the
business park location. The Butte Environmental Council sued the Corps and FWS, seeking
judicial review of the agencies’ decision under the Administrative Procedure Act (APA). The
district court upheld the decisions; finding them to be “rational” and not arbitrary and
capricious. Butte appealed.
Decision: Affirmed. Under the APA, the court sets aside agency action that is arbitrary or
capricious. That means the agency relied on factors that Congress did not intend for it to
consider, failed to consider important aspects of the problem, offered an explanation that is
Add. Case: Fox Television Stations v. FCC (2nd Cir., 2007)--On a musical awards program, Bono said that the
award was “f***ing brilliant.” Fox Television was held liable by the Federal Communications Commission (FCC)
for violating its policy against indecency and profanity for “fleeting expletives” on a broadcast. Fox appealed the
decision.
Decision: Vacated and remanded. The FCC policy to punish “fleeting expletives” was arbitrary and capricious. For
decades, while a broadcaster could have been punished under FCC rules against obscene or indecent broadcasts,
Add. Case: Georgia-Pacific v. OSHA (11th Cir., 1994)--G-P uses forklifts to move lumber at its
plants. A forklift carrying plywood killed a G-P employee who was squatting down and could not
be seen. OSHA investigated and cited G-P for violation of an OSHA rule about forklift
operation. OSH claimed G-P should require forklift operators to drive in reverse (with the “load
trailing”) when forward view is obstructed. OSHA imposed a fine of $480. G-P then required its
forklift operators to drive in reverse. Forklift operators and their union complained that driving
backwards was difficult and unsafe. G-P contested the OSHA citation. OSHA sued to enforce it.
The ALJ rejected G-P’s claim that the standard was vague, but concluded that G-P had not
violated the standard and reversed the citation. The full Commission reversed the ALJ’s finding,
finding that the standard was not vague, and that G-P had violated it. G-P appealed.
Decision. Reversed. “An agency’s construction of its own regulations is entitled to substantial
deference if the agency’s interpretation is consistent with the regulatory language and is
otherwise reasonable.” However, where the “interpretation of a regulation is either
unconstitutionally vague or unreasonable given the regulated activity,” a reviewing court may
refuse to accept the Agency’s interpretation. The preferred method of operating forklifts is
The standard is unconstitutionally vague for failing to give sufficient guidance to those
who enforce OSHA penalties, to those who are subject to civil penalties, or to courts that
Review of Statutory Interpretation—An agency’s statutory interpretation is generally afforded a
middle intensity scope of review. While the agency's interpretation of its statute will be given
great weight, the courts will reject that interpretation if it does not comply with the
interpretations dictated by established principles of statutory construction.
Add. Case: National Cable & Telecomm. Assn. v. Gulf Power (2nd Cir., 1992)--The Pole
Attachments Act requires the FCC to set reasonable rates, terms and conditions for attachments
to telephone and electric poles, including any “attachment by a cable television system.” The
FCC interpreted the Act to cover attachments for wires that mixed high-speed Internet service
and traditional cable television service and attachments by wireless communications providers.
When challenged by Internet and cell phone service providers, the appeals court held that the
FCC did not have the authority to regulate such service. The FCC appealed.
Decision: Reversed. Courts must accept an administrative agency’s reading of an ambiguous
statute if it is a reasonable interpretation. The addition of internet access by existing cable
television providers is an additional use of an attachment that is clearly controlled by the statute.
Add. Case: Natl. Recycling Coalition v. Reilly (D.C. Cir., 1989)--The Recycling Coalition
challenged EPA’s interpretation of a provision of RCRA. The provision required agencies to buy
products containing recycled materials whenever possible except those products found to be
available only at “unreasonable prices.” The EPA interpreted the phrase “unreasonable price”
to mean agencies must purchase recycled products (1) when they are the low-bid item, and (2) in
tie-breaking situations where products made of recycled and virgin materials are offered at the
same price. That is, the EPA interpreted the statute to mean that agencies are not required to pay
a premium to buy recycled products. Recycling challenged the EPA’s interpretation, arguing that
the statute required agencies to purchase recycled products even if they were more expensive.
Decision: The court found that EPA had acted within its authority interpreting the
“unreasonable price” exception to purchasing recycled products. The interpretation was
Review of Procedural Requirements—An agency’s procedural requirements is provided the most
intensive scope of review. Courts have traditionally been responsible for assuring that agency
processes and procedures provide appropriate “public awareness, understanding, and
participation.”
CASE: Lone Mountain Processing v. Sec. of Labor (DC Cir. 2013)—Lone Mtn. mining was
cited for regulatory violations and sent “notices of contest” that it did not respond to within 30
days. MSHA send delinquency notices. LM then filed motions to reopen the civil issues in the
citations. The agency refused because LM had not responded in a timely manner. LM appealed.
Decision: Petition for review granted; matter returned for reconsideration. MSHA establishes its
own procedures such as appeals process. The problem is that the agency is inconsistent in how it
Question: Does this decision mean Lone Mountain will likely prevail in its challenges to the
citations?
We do not know, but likely not as most citations are upheld on appeal, but it does mean there will
2. What difference does this procedural rule make on agency operations?
Procedure cannot be changed without going through the proper process of adopting new
Add. Case: Bolser Enterprises v. Ariz. Registrar of Contractors (Ct. App., Az., 2006)—Bolser, a
contractor, had a complaint filed about the work he did for the Fords. The Registrar sent an
inspector, Prince, who issued a citation to Bolder who appealed. An ALJ held that Bolser made
mistakes and would revoke his license unless he corrected the problems; he was also fined $200.
Bolser did repair work; the Fords did not complain about the work within ten days as required if
they wished to complain. When they complained later, the inspector again found problems.
Bolser claimed the inspector had a personal grudge against him, but the Registrar revoked his
license. Bolser sued; the trial court held it did not have jurisdiction to review the matter. Bolser
appealed.
Decision: Reversed. The court has jurisdiction. The Registrar refused to hold a hearing before it
CONTROLS ON AGENCIES—In addition to checks on agency power provided by the judicial
system, there are several ways in which Congress provides checks.
Direct Controls on Agencies—There are several ways in which the Congress has provided
direct control over agency activities.
Agency Appropriations and Executive Orders—By reducing an agency’s funding, Congress can
reduce the agency’s overall effectiveness. Congress can also prohibit spending on specific issues
and can order spending on specific programs. Congress also requires that agencies report their
progress on certain activities and programs on a regular basis. Presidents may issue Executive
Orders instructing agencies to undertake certain tasks, such as adopt affirmative action programs.
Cost-Benefit and Risk Analysis—If required, a agency would have to weigh the costs and
benefits of all regulations it proposes. The Data Quality Act, enforced by OMB, requires
agencies to ensure the quality of their analysis that supports proposed regulations.
Add. Info: Federal Data Quality Act: Since 2002, the Federal Data Quality Act requires
agencies to ensure the quality of their data when issuing new regulations. Private parties have
standing to challenge the data used in formulating government regulations. For example, certain
air pollution standards were found to be based on faulty calculations that may have
overestimated the extent of problems by more than 20%, triggering compliance with costly
standards. Significant litigation can be expected to result to test the boundaries of this legislation.
Indirect Controls on Agencies—In recent years, Congress has passed several laws that have
had the affect of indirectly controlling agency power and authority.
Freedom of Information Act—FOIA (1966, amended in 1974) makes most documents submitted
to or held by federal agencies available to the general public.
Add. Case: ATV Watch v. NH Dept. of Resources and Econ. Development (Sup. Ct., NH, 2007)-ATV Watch
monitors the use and development of ATV trails in New Hampshire. It filed a Right-to-Know request with the state
Department of Resources and Economic Development (DRED) about its intended purchase of some land and its
plan to develop an ATV trail once the land was bought. DRED provided some documents, but withheld others. ATV
Watch sued for unlawful retention of public documents. During a hearing at the trial court, DRED produced more
documents. The trial court then held the dispute to be moot. ATV then requested attorney fees and cost, contending it
should not have to sue to get the documents, but was denied. ATV appealed.
Decision: Affirmed in part, reversed in part. The release of all requested documents by DRED did not make the
issue moot under the Right-to-Know Law. If DRED violated the law, ATV Watch could be entitled to an injunction
Privacy Act—The Privacy Act (1974) is intended to give citizens more control over what
information is collected about them and how that information is used. Agencies must give notice
and obtain consent before it can disclose information that concerns or identifies an individual.
(Note that this law was invoked in 1996 by some former administration officials whose FBI files
ended up being looked at by political operatives in the Clinton administration.)
Government in the Sunshine Act—The Federal Sunshine Act (1976) and the Federal Advisory
Committee Act (1972) limit secret meetings by agencies. The purpose is to enhance citizen
access to government operations. The Act sets forth notice requirements for open meeting and
states the circumstances under which a meeting may be closed.
Discussion Question
Informal agency procedures have several advantages over formal judicial procedures. Informal
procedures to gathering evidence and in discussing matters with firms subject to a regulation
allow information to be collected and transmitted much more cheaply than if the entire procedure
were formal. In some cases, the informal transmission of information to firms subject to an
agency’s jurisdiction will lead to compliance that might not have been forthcoming previously
either out of ignorance or due to an attempt to evade the regulation. Informal communications
may produce compliance that eliminates the need for formal actions by the agency. This may
result in a higher level of compliance with agency regulations than if all procedure were formal
and, hence, much more expensive.
Case Questions
1. The Secretary of Transportation has sole authority under the ADA to regulate paratransit
scheduling. Since TriMet’s plan received Department of Transportation approval through the
2. (answered on Internet for students) The FDA did not have to review the drugs. The Court held
there is a presumption of nonreviewability of decisions of agencies not to undertake enforcement
3. Affirmed. The determination of the issue has been exhausted at the administrative level. The
agency followed proper procedure, and Ballanger also followed agency procedure in making his
appeal of the decision. As the decision of the agency is final, the issue is now ripe for review.
The court's purpose is to ensure that proper process was followed by the agency, which was the
4. (answer on Internet for students) The court held the rule to not be consistent with the statute.
While courts give deference to an agency’s interpretation of a statute, when an agency clearly
5. A person had standing to seek judicial review under the APA only if she can show that she has
suffered or will suffer injury, whether economic or otherwise. Here the Sierra Club did not assert
6. Rules held valid. In resolving whether an agency exceeded its statutory authority in making a
rule, the court must determine if the substance of the action departs from a legal standard
expressed or implied in the particular law being administered. The court reviewed the statute that
authorized rule making and read the words of the rule in the context of the statute. The
7. The FOIA denial was upheld. The information had been provided voluntarily under an
agreement that it would be kept private. If that privacy were broken, firms would be much less
likely to volunteer information on a cooperative basis, which could reduce the regulatory
Ethics Questions
1. As in private disputes, most regulatory matters are settled without litigation. The incentives to
settle are the same as in actions involving only private parties—avoidance of attorney and court
costs, costs of potentially adverse publicity, and the expectation that an adverse judgment may
result in an award for damages in excess of the settlement amount. In private disputes the parties
In suits with the government as plaintiff, it can be said that “litigation is free,” the costs are borne
by taxpayers—a trivial sum when considered in that way. Thus, the government enjoys a deep
pocket advantage in forcing parties to settle. The argument can be made for a situation
concerning a small business being sued by a large business. The big business has the advantage
2. In recent years it has become common for labor forces, either via unions or Congressional
representatives, to help their employer fight regulations that are likely to shrink or close a
factory. To enlist such help is good business policy. Since government plays a large role in
determining what is done where, and since the regulatory process is affected by political
Internet Assignment
U.S. Government Printing Office (GPO): www.gpoaccess.gov/
USA.gov: www.usa.gov/
National Association of Secretaries of State (NASS):
www.nass.org/
Regulatory agencies have a significant impact upon business. Agencies issue regulations that are
proposed and first published in the Federal Register and final regulations are incorporated into
the Code of Federal Regulations. Information about federal agencies is published annually in the
United States Government Manual. To view these publication, visit the the U.S. Government
Printing Office electronic resource, GPO Access. Another federal website, USA.gov, includes an
A-to-Z Agency Index. Lastly, information about the administrative law of individual states can
be found at the National Association of Secretaries of State website.
