Final Examination                              Mr. Froomkin
Administrative Law                             24-HOUR OPEN-BOOK TAKE-HOME

Fall 1994

This is a 24-hour take-home examination, with length limits on the answers. Certain special rules about citation apply if you rely on, or make reference to, materials other than the casebook and class notes. Please remember to use your blind grading number on the exam.

"Open book," defined. This exam is "open world": you may consult any reference source except other human beings. The exam has, however, been carefully designed so that full and excellent answers can be crafted without reference to any source other than the casebook and class notes. Your instructor believes that reference to external sources is unnecessary, and bordering on unwise (if only as a waste of your limited time). The use of sources other than the casebook and class notes will probably require that you apply the special citation rule below. For obvious reasons, you are expected to refrain from discussing the contents of the exam with anyone from the time you pick up the exam until the end of the examination period.

Citation rules. Citations to cases and materials in the book may be in any short form that is understandable, e.g. Overton Park. In citing materials other than cases, clarity is usually achieved by including a page reference as part of the citation.

While you are free to consult other materials, it is neither necessary nor recommended. If you do so, and if you rely on those materials for any material part of your answer, you are required to provide a full citation to the source, just as if you were writing an academic paper (no penalties for improper Blue Book style will be levied). This rule applies whether or not you are quoting from the source. Failure to give proper citations will, if detected, be considered a serious Honor Code violation.

Length Limits. Each question on this exam has a length limit of 2000 words. This is a maximum, not a target. I will not read beyond the length limit. The following safe harbor rule will apply: each typed page with 1" margins on all four sides, which is printed in Courier 10cpi, Times Roman 12pt or Helvetica 12pt, with double-spaced text, will be presumed to have 250 words so long as there are no excessive textual footnotes, making the length limit eight (8) pages.

Remember to use your blind grading number.

Read the questions carefully and think about your answer before beginning to write. Organization will count in your favor; unreadable writing will count against you - if I can't read it, I can't give credit for it. Don't forget to explain why you reject seemingly sensible options as well as why you select them.

Good luck, and thanks for a particularly wonderful class.

You should answer two (2) of the questions in Part A, and the question in Part B.

Each question on this exam has a length limit of 2000 words i.e. eight typed pages.

Each question you answer counts for one third of the exam. Budget your time accordingly.

Part A (answer ONLY two of these questions)


Briefly explain what, given the Supreme Court's ultimate decision, NHTSA should have done to avoid being reversed in State Farm (p. 466), and then discuss at greater length whether this decision is consistent with the (earlier) holding of Vermont Yankee (p. 505).


In order to receive a White House press pass, accredited reporters must undergo a Secret Service security check. An accredited reporter from North Carolina is denied a White House press pass the day after Senator Jesse Helms states that the President had better not visit North Carolina without a body guard. The Secret Service refuses to give any reasons for the denial. What relief, if any, can the reporter obtain in court? (Ignore FOIA issues!)


The Federal Education Finance Commission is responsible for administering federal monies allocated to higher education. Among its duties, the Commission promulgates rules with respect to the distribution of federal research grants to institutions and researchers as well as loans to individual students. The portion of the enabling statute which discusses the availability of loans for higher education provides in part:

The Commission is charged with the responsibility to provide all students with equal access to higher education. In so doing, the Commission shall promulgate rules and regulations for the fair administration of such federal monies allocated for assistance in higher education and to ensure that such monies are allocated in an efficient and responsible manner.

The Act mirrors the language of the Administrative Procedure Act in that it requires that before engaging in an informal rule making, the agency publish notice of the proposed rule and that such notice "state the time, place, and nature of public rule making proceedings; reference the legal authority under which the rule is proposed; and include either the terms or substance of the proposed rule or a description of the subjects and issues involved." The Act further provides, as does the APA, that "the agency shall give interested persons an opportunity to participate in the rule making through submission of written data, views, or arguments with or without opportunity for oral presentation."

The Commission has recently received a report from the Education Research Institute, a conservative think tank which collects detailed information about defaults of federally-guaranteed student loans. The report concludes that law students are almost three times as likely to default on their student loans as any other type of graduate student.

Based upon this study, the Commission decided to engage in an informal rule making to address this problem and issued a notice of proposed rule making on December 2, 1993. The proposed rule amended the current rules with respect to eligibility for graduate student loans by cutting in half the amount of loans that would be available to students seeking to receive a "doctorate in jurisprudence." The proposed rule referred to the Education Research Institute's report but did not publish the actual report. The comment period closed on March 2, 1994 and the final rule provided that "no federally guaranteed student loan will be provided to any graduate student seeking to achieve a doctorate in jurisprudence."

United Federal is a bank that specializes in providing federally guaranteed student loans to law students and is very concerned about this rule. The president of the bank asks you for assistance in challenging the rule. She thinks the rule is unfair, both to law students and to lending institutions that provide loans to these students. She notes that the cost of complying with this new rule will be significant in that the bank will have to shift to providing student loans to other types of graduate students. This shift will entail a completely new advertising campaign (the current one is directed almost entirely to law students and pre-law students) and a market research analysis to determine which graduate students are most in need of student loans.

Your research assistant has recently learned that during the last two weeks in March and the first two weeks in April, Hilary Rodham Clinton met with members of the Doctor's Coalition Against the Proliferation of Lawyers on at least five separate occasions as part of her work on the health care bill. Ms. Clinton then discussed the issue of aid to future J.D.s with two members of the Commission and several members of the staff. (There was a leak in the Commission).

On what basis would you seek to challenge the rule and what are your chances of succeeding?

Part B (you must answer this question)

One fundamental principle of administrative law is that federal administrative agencies may not act in an "arbitrary and capricious" manner. As we have seen, however, reviewing courts often remand rulemaking or adjudications to agencies because the court finds the record inadequate to support the agency's decision.

Imagine you are a law clerk to a judge on the 13th Circuit Court of Appeals:

Sam Thompson appeals from an adjudication debarring him from transacting with the Defense Department for three years as a result of his provision of defective tank treads. He has properly exhausted his administrative appeals, the case is not time-barred, and jurisdiction is proper in the Thirteenth Circuit.

Under long-standing rules of the Defense Department, contractors can be debarred if the Department finds, after a hearing, that

...the Contractor has recklessly supplied defective merchandise, or the Contractor has been found guilty of any felony by a court of law.

99 C.F.R. § 214(d). Many cases have held that this language does not apply if the product defect is the result of negligence as opposed to recklessness.

The ALJ held a hearing at the end of which she made extensive factual findings as to tread life, and concluded that the tank treads provided by Thompson wear out after three weeks of use instead of the twenty weeks specified in his contract. She noted Mr. Thompson's argument that the defects were the unexpected, and unforeseeable, effects of a new manufacturing process designed to cut costs in half but did not discuss them except to say that she found that Mr. Thompson was "culpable." The ALJ concluded,

Mr. Thompson's conduct was thoroughly improper. He is debarred for three years.

On appeal, the Secretary of Defense approved the debarment, stating only,

The national defense could have been seriously impaired by this grave error on the part of a trusted supplier. We are fortunate that no lives were lost as a result of this dangerous product defect.

Mr. Thompson argues that nothing on the record demonstrates that the Defense Department has found that he acted recklessly as opposed to negligently and that merely negligent conduct is insufficient to support debarment under 99 C.F.R. § 214(d).

Mr. Thompson further argues that the agency's failure to make a record that adequately supports its position is a per se violation of APA § 706(2) and that the court must therefore vacate the decision rather than remanding it for further consideration. The difference is significant because, under the Defense Departments's rules [which have not been challenged in this proceeding], a debarment remains in effect pending judicial appeal; a vacated decision would allow Mr. Thompson to resume bidding on the lucrative contracts that are typically awarded in December, the end of the fiscal year.

Your judge tells you that her perusal of the record has persuaded her that Mr. Thompson's argument that the agency has failed to explain whether it used a negligence standard or a recklessness standard is correct. But she is uncertain whether the proper remedy is a remand or vacatur.

Write a memo explaining whether a remand or vacatur is appropriate when the record is insufficient to support the agency's decision in an informal adjudication. Would your answer as to the consequences of an inadequate record under the APA be different if petitioner were appealing against an informal rulemaking instead of an informal adjudication?