Lack of structure. In particular, a failure to write an introduction that either explained what the answer would say, or forshadowed the conclusion. A good rule of thumb is: tell 'em what you're going to tell them, tell 'em, tell 'em what you told 'em.
Lack of analysis. Often, essays set out the applicable standards, trooped through the case law etc., but failed to apply the (canned?) recitation to the facts at issue. There was were notable failures to come to a conclusion about whether all this law stuff means we win or we lose, or even to equivocate properly, e.g. say it's a close call because we resemble case A which is good, but also case B which is bad. From the client/boss/grader's point of view, setting out the rules at most half the battle — you have to be able to show what the rules mean to the problem at hand.
Proving the obvious. For example, one essay takes a paragraph to demonstrate that Ms. Fume has standing to sue when her application is denied.
Failure to spot issues. There were a lot of issues, and it was possible to get an A grade without spotting them all. The various issues and brief answers are set out below.
Not reading the question. Shockingly, several replies to question 3 failed to take a stand either for or against the quoted passage, when the question clearly required that you make a case either for or against it. I graded such answers harshly.
Issues to spot:
Many people wrote that there was a standing problem because Fume/Choke was/were not in the "zone of interest" of people protected by the statute. This is not necessary if you are injured by the agency's action (e.g. your license is denied). The injury alone provides all the standing you need. The other tests are ways of showing standing in the absence of a direct injury. They are alternate tests, not supplements.
Issues to spot:
Was 6ppm arbitary?
Was 30 ppm arbitrary?
Did the agency answer the parties' objections?
Ex-parte contacts w/ Quayle.
also, issue of how to prove the contact w/out disco and w/out a witness
issue of funding of study (smells like turkeys)
Standing to sue.
strategic issue: IF 30ppm IS killed will agency go to 40ppm?
Both clients have one goal in mind: obtaining their `right' (or, perhaps, privilege) to smoke tobacco in the face of a new administrative ruling against such activity. The end goal can be reached via several legal routes in this scenario: first, by attacking the rule as an improper legislative delegation of power; second, by arguing that our clients were the victims of `arbitrary and capricious' decisions; and third, by assailing the agency for not creating a record, and having the court force the agency to support their decision with facts or be remanded for creation of a record. It is also necessary to review why a right to a `hearing' need not be granted for either Ms. Fume or Mr. Choke, since that line of attack is usually the first to be sought by the client, and why Ms. Fume's claim of discrimination would likely fail. Lastly, it is essential to look at Mr. Choke's special situation since his application has not been rejected by the agency as of this date.
Initially, the right to judicial review for each client must be established. Clearly, Ms. Fume falls within section 702 of the APA guaranteeing reviewability of agency decisions in that she is "suffering legal wrong because of agency action, or adversely affected, or aggrieved by agency action ..." She has an uncontrollable need to smoke tobacco, applied via the fool vague procedures outlined in section 2 of the rule, and was rejected in a letter from the agency. Mr. Choke has a more difficult case to carry. He has not been denied an application to smoke, and may receive either a rejection or grant at any time. Still, it can be argued that the current backlog of cases that the agency has -- 140 years -- "adversely affect[s]"Mr. Choke, such that inaction by the agency will lead to harm -- not being able to satisfy his urgent addiction -- and thus cause him serious mental trauma. Section 702 of the APA specifically includes contentions by parties that "an agency ... acted or failed to act."[emphasis added]. In one client's situation, agency action has caused injury, while in the other situation agency inaction has caused a similar harm.
The first legal argument for attacking the administrative actions directs itself to the core of Congressional delegation of power. Breyer and Stewart tell us that "if rule is too general or vague, there arises a danger that the executing officials will effectively control the imposition of sanctions, and the salutary elements of predictability and electoral responsibility will be impaired." (p.33) The Health, Affluence, Life Organization has been given the unbridled direction to make all rules "which will make the nation as a whole better off." As a policy matter, the courts are usually adverse to allowing delegations this vague and ambiguous to stand as proper delegations of national power. If a vague statute such as this can pass muster, what then will fail? As a legal matter, though, such a delegation falls outside the traditional zone of agency flexibility and activism. In Amalgamated Meal Cutters v. Connally (p.76), Judge Leventhal set out a standard for determining the permissibility of a legislative delegation of power. "There is no forbidden delegation of legislative power if Congress shall lay down by legislative act an intelligible principle to which the official or agency must conform." Congress, in the case of the smokers, laid down a principle; the question is whether it is an "intelligible" one.
The agency will no doubt argue that, as Breyer and Stewart point out, "Congress cannot feasibly or responsibly set individual rates, award television licenses, and identify all undesirable business practices. ... In a word, Congress delegated broadly to the agencies because it had to. And the federal judiciary, recognizing the need, ratified the means." (p.94) Still, no matter how great the need may appear to be on the surface, Congress cannot delegate without some parameters or boundaries; the danger of this vague delegation can be illustrated by giving the U.S. Armed Forces the discretion to "carry out all military attacks against foreign nations that will make the nation as a whole better off." Assuming such a delegation was allowed under other applicable law, would the danger of such an unintelligible principle go unnoticed? Here, too, the problem manifests itself. Without some kind of limitations on the delegated power, the court must strike down the statute as a whole as going against the Nondelegation Doctrine. [AMF Note: One argument missing here is the relevance of the `limit' caused by the 100:1 cost/benefit ratio]
The next line of attack is to argue that, at least for Ms. Fume, her application was denied on the basis of an `arbitrary and capricious' decision by the agency. This type of informal adjudication, according to APA section 706, is to be reviewed on the `arbitrary, capricious' and 'abuse of discretion' standard. Admittedly, this is a high burden of proof to maintain in order to carry out our client's wishes. However, Ms. Fume apparently carried out the dictates of section 2 of the rule: she was required to send evidence to the agency to show that she is "terminally addicted" and "fully understand[s] the risks," and did so by submitting her own affidavits attesting precisely to those requested facts along with supporting affidavits from her Doctor and roommate. The agency indicated that there would have to be `clear and convincing evidence' of the individual's addiction from their application. Ms. Fume, though, sent in sworn affidavits almost exactly tracking the language from the agency's own rules. As Arizona Grocery holds, agencies must follow their own rules; in this case, the agency received an application with the required language and supporting documents, but denied the application. The agency did not follow its own guidelines, but instead added the requirement ipso facto that applicants must demonstrate that they had made "reasonable efforts to quit." Nowhere in the original rule does it ask for such evidence to be presented with the application. What could be more `arbitrary' -- more of an `abuse of discretion' -- than refusing to follow the Arizona Grocery principle of observing the rules laid down by the deciding agency?
Furthermore, Ms. Fume has the right, according to federal administrative common-law, to have her `expectation interests' vindicated; as Breyer and Stewart note, "one must in each case consider the nature, extent, and legitimacy of the expectation interests claimed to have been defeated by an adjudicatory change in the law." Through her application, the agency effectively changed the section 2 requirement, adding a new, unwritten regulation that she had no way of knowing would exist. Now, she will have to wait 140 years for reconsideration should judicial review fail or be held unavailable. When a rule is passed, and an exceptions procedure created, the individual involved must be given `fair warning' as to what she is required to do in order to comply. Such warning, apparently, did not adequately provide her with the opportunity to state her claim. She may well be able to prove those facts that the government now requires; however, as the NLRB cases suggest (p.496), such a change is not allowed unless `undue hardship' can be shown. Certainly, being sent to the end of the 140 year waiting period for failing to follow an unwritten requirement is `undue hardship.' More importantly, the lack of equitable treatment due to this agency behavior, combined with their failure to follow their own regulations and procedures, makes a strong argument that the agency's rejection of Ms. Fume's application is `arbitrary' and `capricious.'
Third, we can argue that since the matter to be reviewed is a question of fact -- whether Ms. Fume (in particular) is "terminally addicted" to smoking -- the court must have a record to review. Although this is not a situation in which an "on the record" hearing is required by the statute or the APA, the court must have something to review; thus, we may be able to have the court force the agency to support its rejection or remand it for further proceedings. Is a rejection letter with a notation that there was insufficient evidence of attempting to quit smoking, combined with our client's application and affidavits, a sufficient record for a court to review? Breyer and Stewart note that "in order to undertake review a court must be apprised of the agency's decision and the legal and factual grounds relied on by the agency to justify it." (p.613). A quick form-letter with a one-sentence explanation for rejection might be permissible if the standard was part of the rule set out ahead of time and Ms. Fume failed to carry the appropriate burden; here, as discussed above, she was never informed of this `requirement' to the exceptions procedure. In this action, the agency utilized its discretion, and did not merely review the application in light of a mandatory checklist set out in the promulgated rule. Clearly, in cases such as Overton Park and Camp v. Pitts, where the Court refused to require contemporaneous findings and conclusions by the agencies involved, and accepted statements to the effect that the agency "considered" the factors -- or even accepted no explanation at all when the grounds were clear -- the "three-sentence finding" (Camp, supra) may be acceptable. However, as Breyer and Stewart ask, "while this relaxed approach may enable reviewing courts to determine whether agencies have complied with relevant statutory directives, is it adequate for review of discretionary judgments?" (p. 613)
Overton Park gives the trial court, when faced with a situation in which a record is not available (and is deemed required), the alternatives of requiring the agency to explain its "factual underpinnings" (p.615) of the decision, remanding for the creation of a properly reviewable record, or creating a record de novo in the trial court. Faced with such a task -- and in light of the millions of applications it faces -- the agency might grant our clients' applications in order to save itself from having to open a Pandora's Box and expanding on its reasons for denial.
This whole analysis, of course, presupposes that the court will force the agency to undergo such a tremendous task, and in effect destroy the efficiency of the agency in order to guarantee the right to blacken one's lungs. Like the case in which turkey dinners were provided to the commissioners (Sangamon Valley), the facts at bar avail themselves of little sympathy. Furthermore, the entire prospect of overburdening the agency and courts with the large number of reviews that are bound to be sought, will not be a policy argument in favor of our clients. Gray v. Powell (p.286) notes that "it is not the province of a court of absorb the administrative functions to such an extent that the executive or legislative agencies become mere fact-finding bodies deprived of the advantages or prompt and definite action." The case of Crowell v. Benson puts it even more eloquently: "The obvious purpose of the legislation [is] to furnish a prompt, continuous, expert and inexpensive method for dealing with a class of questions of fact which are peculiarly suited to examination and determination by an administrative agency specially assigned to that task." If the court were to require a searching, in-depth analysis for each application in order that the trial court could properly review the decisions, the administration of such law would no longer be `inexpensive'; instead, it would be a long, drawn-out process, utterly destroying the efficiency of the agency -- and destroying the very rationale for creating the agency in the first instance. Since the `arbitrary and capricious' standard (as analyzed previously) provides most aggrieved parties with some form of review, the fact that the record may be lacking is probably not sufficient momentum to persuade the court into forcing the agency into the precarious position of expansively reviewing each of the claims -- and in turn extending the waiting period beyond its current level.
Both clients will certainly wish to know whether or not they have a right to a hearing. First, since the APA under 556 (and by reference 554) mandate a hearing only when required by the statute -- and because the present statute does not demand one -- there is no vehicle by which to assert the right to be heard. Second, although the court could force a hearing to take place if our clients were losing their property -- either real or `new' -- from the agency decision, this would be a losing argument to press. As a preliminary matter, no `property' exists here to be taken by the government. Prohibition might not have been successful, but it certainly did not destroy a `property right' that a citizen had to drink himself into a stupor. As McAuliffe (p.718) noted in 1892, if the government gave the privilege, it can take it away. This late 19th century logic has been tempered by time and the advent of `new property,' but its basic tenets hold true: if the government is not taking away a valuable right -- either a basic Constitutional right (`traveling' in Kent v. Dulles) or an economic benefit that it has created (welfare benefits in Goldberg v. Kelly), the opposing party is not entitled to a hearing. As it "stretches the concept too far to suggest that a person is deprived of `liberty' when he simply is not rehired" in a job (Board of Regents v. Roth), so too would it stretch the concept to contend that smoking tobacco is a liberty interest. As Roth went on to suggest, "to have a property interest in a benefit, a person clearly must have more than an abstract need or desire for it. He must, instead, have a legitimate claim of entitlement to it." Since smoking is neither a `benefit' nor an `entitlement,' it seems fairly clear that an argument of this nature would unnecessarily detract from the stronger nondelegation and arbitrary-decision arguments. Her only `hearing' may come when she is prosecuted in a civil enforcement proceeding should she refuse (or be unable) to terminate her smoking habit.
As for Ms. Fume's discrimination claim based on her homosexuality, this would be an impossible road to travel. Simply put, there is no indication that others were denied on the same basis, that heterosexuals were granted applications in larger numbers than homosexuals, or that the reviewing agency official had any indication from her application that because she resided with a female that they were a homosexual couple. Further, there is not yet a federal law that prohibits discrimination against persons for their sexual orientation, and thus unfortunately that argument will be facially insufficient.
Ms. Fume further wishes to obtain an injunction against the government's action in order that she may smoke until the outcome of judicial review. Under 705 of the APA -- "Relief Pending Review" -- the court (or agency) can stay any actions so that it can review the case. The standard here is that an injunction can be obtained only "to extent necessary to prevent irreparable injury[.]" Through a doctor's affidavit, it may be possible to establish that not allowing her to smoke during what may be lengthy review process will cause her extreme and irreparable mental and physical anguish due to the fact that she is addicted to tobacco. In addition, the defense of `governmental immunity' is no longer a barrier to seeking injunctions against the government. (Breyer and Stewart, p.979). Of course, the agency could argue that in fact the opposite is true, and that should she be allowed to smoke, irreparable injury will befall Ms. Fume.
Mr. Choke, at the other end of the spectrum, has some specific problems as to his case that needs to be addressed. As discussed earlier, the APA allows judicial review based on action or inaction by the agency under 702. The agency, however, might attack that position by changing the focus of the inquiry and forcing us to show that our client has sufficient `standing' and `ripeness' of controversy to seek review.
First, the purpose of the standing requirement is to prevent the `officious intermeddler' from sticking his nose in other people's business. Furthermore, "federal courts ... have insisted that the plaintiff establish that he or she has suffered some specific, tangible injury as a direct result of government conduct in order to secured judicial review of its legality." (Breyer and Stewart, p.1056). Certainly, "the complainants have no standing to vindicate the rights of the public, but only to protect and enforce their own rights." (Chicago Junction, p.1058, Sutherland dissenting). In Mr. Choke's case, however, he is not the `intermeddler'or vindicator of public rights, but a man interested in protecting his own ability to smoke tobacco. As Data Processing requires, Mr. Choke can allege an `injury in fact' from the agency's inability or unwillingness to act on his application. He cannot smoke, and his addiction makes the forbearance almost impossible to withstand.
As for the `zone of interests' test enunciated in Data Processing, Mr. Choke arguably falls within the zone of persons that Congress could rely upon to act as "private attorney-generals" to "challenge agency disregard of the law." His interest -- the privilege of smoking -- is curtailed whether he is rejected outright or forced to wait until his grandchildren retire in order to obtain his permit. Block v. Community Nutrition points out that "congressional intent" is the touchstone; since the statute allows the APA to be its guide, and since the APA allows review based on an agency action or failure to act, Congress desired inaction -- which is this case is as much a rejection as the form letter sent to Ms. Fume -- to trigger reviewability in the absence of any contrary statutory directive.
Overall, both clients have a legitimate right to have a court review their claims, especially in light of their major objections -- an improper legislative delegation of power on one side, and an arbitrary and capricious decision -- along with the lack of a decision -- on the other.
The first issue in determining our client's rights is whether the rulemaking procedures constituted formal or informal rulemaking under the APA. As the organic statute does not specifically provide that interested parties are entitled to "a hearing on the record" (see APA § 553(c)), the rulemaking constitutes "informal", rather than "formal" rulemaking Florida East Coast Ry. However, the APA nevertheless provides us procedural resort through which we may challenge the subject rulemaking as defective.
Persons suffering "legal wrong" because of "agency action" are "entitled to judicial review thereof." APA § 702. The question then becomes whether Environmental Coalition has standing under § 702, or whether it falls within the "zone of interests" sought to be protected by the statutory provisions. Data Processing v. Camp. Under Scrap and Lujan, we must plead facts sufficient to establish that members of the Coalition are among a class of persons who will be subjected to the toxin in the workplace, and that therefore they are entitled to invoke § 702 to prevent inevitable injury-in-fact,[AMF Note: In fact this probably is not possible given the facts as stated in the question.] which will be caused by the regulation allowing 40 PPM of the toxin into the workplace, and which the court may redress through issuance of a pre-enforcement injunction (APA § 706) and a court order remanding the case back to the agency for further proceedings in compliance with the APA.
"Agency Action" under § 702 includes "a whole or any part of an agency rule", which would include the rule at issue. APA § 551(13). Any "final agency action for which there is no other adequate remedy at law" is reviewable under § 704. Our facts also appear to meet this criteria. Hence, we are entitled to judicial review even though the OSHA statute does not so provide.
The APA places certain burdens on the agency in conducting informal rulemaking. Section 553(c) requires the agency to articulate "a concise general statement of basis and purpose." Upon judicial review, a court may find such statement inadequate, and the basis for reversal and remand, where the statement fails to articulate the reasonable grounds upon which the agency's decision was based, together with a reasonable explanation of why alternatives were rejected. Nova Scotia. The statement would be struck down under the "arbitrary and capricious" standard of § 706.
APA section 553(d) also requires a 30 day waiting period from the time of the rule's publication until the time of its effective date. During that time, "interested persons" may petition the agency for the amendment or repeal of the rule. APA § 553(e). Coalition likely falls within the category of "interested persons", based on the tradition of challenges to agency action by environmental protection groups.[AMF Note: This is a rather weak argument!] Coalition may also petition for relief pending review, relying on the critical public health and safety concern at issue. Section 705 allows the postponement of the effective date of agency action, pending judicial review, "[w]hen an agency finds that justice so requires." Furthermore, we may petition directly to the reviewing court, which may "postpone the effective date of an agency action ... to the extent necessary to prevent irreparable injury." Id. Hence, we have an arsenal of administrative weapons with which to attack the rulemaking proceedings as procedurally defective. The reviewing court, under § 706, must set aside agency action conducted "without observance of procedure required by law."
In executing our administrative rights as provided by the APA, we must have a further basis through which to prove our claims that the rulemaking proceeding was arbitrary and capricious and procedurally defective. After Florida East Coast, which severely restricted the availability of formal rulemaking proceedings, the courts developed a judge-made "paper hearing" requirement to establish a "record" reviewable in court. Overton Park. Previously, only formal rulemaking required the compilation of an administrative record to justify the agency's decision.
Courts developed the "hard look" doctrine of judicial review of agency informal rulemaking, under which the reviewing court would closely examine the paper record, and the court would remand the case for further proceedings if the record failed to supply a "reasoned justification" for the agency decision, and the decision of why it rejected reasonable alternatives. Overton Park, Scenic Hudson; State Farm. In OSHA cases, although the Supreme Court has disclaimed the application of a "cost-benefits" analysis, it nevertheless has held that the "to the extent feasible" language of OSHA permits it to consider the costs of compliance to the industries affected. Thus, OSHA's consideration of the potential costs of the proposed rule to International and General were not improper. But, failure to properly balance against these interests the public health dangers of the new toxin might constitute an impermissible abdication of OSHA's statutory duties. See Benzene; Cotton Dust. Additionally, we may attack the credibility of the two studies as arbitrary and capricious and failure to consider alternative studies standards required by the hard look doctrine.
The most compelling facts in our favor, which most likely will win the case for us, is the failure of the agency to adequately explain the drastic change, from 5 PPM to 40 PPM, between the proposed rule and the final rule. See Weyerhouser (final rule held arbitrary and capricious where more than a "logical outgrowth" from the proposed rule). In these circumstances, the agency must conduct a second round of notice and comment rulemaking based on the new rule and the studies supporting the new findings. Id.
The paper record must include everything the agency relied on in making its decision, including data tending not to support the agency's final decision. The "staff recommendation" likely falls within this category, and could likely be produced through the APA's discovery provisions.[AMF Note: There is no such thing. Instead, there is FOIA.] The Administrator's over-ruling of the staff recommendation is only significant to the extent pertinent in considering the hard look factors. Unlike older NLRB adjudication cases, the finding of a staff person does not create a presumption in its favor and against the agency head's reversal. Those decisions (which were later over-ruled) were based on the fact that the staff person had observed the demeanor of witnesses, and the agency head had not. Such is not the case here.
The next issue is whether OSHA misinterpreted and misapplied its statutory responsibility to protect health in the workplace, in its new that "it lacked statutory authority to impose standards in excess of what was required to protect human health. Under Chevron, where the statute is ambiguous, the agency's interpretation is conclusive if reasonable. However, the D.C. Circuit, but not the Supreme Court, has held that Chevron does not apply to an agency's interpretation of its own jurisdiction. Nonetheless, the statute at hand unambiguously imposes on OSHA a statutory duty to protect health in the workplace, not to protect greedy corporations. The agency clearly must err on the side of protecting worker's health. However, even if the statute is found ambiguous, OSHA's interpretation, in light of its statutory mission, is patently unreasonable.
The available remedy is a remand back to OSHA for further rulemaking, in accordance with the APA and the OSHA statute. A reviewing court will require an adequate record, but may not require the agency to conduct additional studies or procedures beyond what the APA itself would otherwise require. Vermont Yankee.
The secret funding of the Miami study may constitute "undue influence" sufficient to set aside the rule. Children's TV; HBO. This issue merits further inquiry.
The ex parte communication with Vice President Quayle is not illegal, as the APA's Sunshine Act provisions don't apply to informal rulemaking, and ex parte communication between agencies and White House officials was expressly approved in Sierra Club v. Costle. As for other exparte communications, "hard" data generally must be included in the public record, while "soft" data need not be. "Hard" data includes concrete facts and other details aside from general policy considerations, which constitute "soft" data. Discussions between administrative officials need not go in the record.
In conclusion, this answer has set forth the several grounds under which we may enjoin enforcement of the rule and keep hyper-noxide out of the workplace, pending more concrete and adequately reasoned proof of its effects on human health.
The main argument for applying a new policy retroactively is, essentially, that it is a better policy than the old (at least "better" in terms of reflecting contemporary values as opposed to old values that were thought fit to be changed, whatever the motive). Of course, there must be some benefit in applying the new policy retroactively. And if we were absolutely certain that its effects were uniformly beneficial, there would be no issue of retroactive application whatever.
The problem, however, is that generally someone will be hurt by the retroactive application. The prevailing standard is that of a balancing of the benefits from the new "better" policy against the harm from its retroactive application or, if one prefers a different slant of the same vision, of the mischiefs of a result contrary to the new policy against that from the retroactivity (Chenery II). The balancing will take into account just how much "better" the new policy is or how important to its effective implementation is the retroactivity as well as how weak the harm from the retroactive application of the policy might be when one considers that the change in the policy may have been foreseeable and, as such, the magnitude of the reliance interest negligible. [sic] This, in turn leads us to consider the nature, extent and legitimacy of the expectations.
But can judges really measure, weigh or even remotely come close to truly determining just how much more the new policy is beneficial as to outweigh the harm caused by its retroactive application? Indeed, it is difficult enough to so even in the case of the individuals before them. For instance, how can a judge determine that a change in the law was foreseeable? Except in unusual circumstances, foreseeing a change in the law is difficult even for a lawyer; for most laymen, it is an unthinkable proposition, specially in a system based on case law. So, clearly, an evaluation of foreseeability of the law, reliance interest or so called nature, extent and legitimacy of the expectation is based on a lawyer's or a court's standard. And how fair is it to value the reliance interest of one being judged on the basis of a lawyer's or, more likely, the judge's or, even more likely, the judge's notion of what that reliance interest should have been or should be in light of his subjective reactions to other aspects of the case before him?
Moreover, if the difficulties of the balancing technique are already apparent in the case of the parties before the court, these difficulties acquire an added dimension when one considers that the adjudication of the parties before the court will reverberate so as to affect the expectations of many more. How to we appraise their multiple expectations? Do we apply the same standard of foreseeability to all the equally ignorant of legal changes individuals affected by the change? Do we place the same value on each individuals' expectations? When we aggregate, do we may them equally in terms of deciding what the general implications of our balancing might be?
While one may pretend that the fairness can only be measured in individual terms, this is not possible because to a great extent practice is a function of certainty and predictability of the rules in effect, if my reliance on existing rules to acquire certain rights can suddenly be defeated in the context of what happens to a total stranger in a situation that I know nothing about and under a system I know even less about, where is the fairness of a system and its ability to set reliable standards under which people will conduct their business? Isn't there more fairness in providing a large number of individuals the assurance that the rules won't suddenly be changed and applied retroactively than to provide the very few of those involved in a controversy in which the rule was changed the benefit of the change? And why presume that it is the large numbers who did not change their reliance who should have foreseen the change rather than presume that the few had no right to expect a treatment different than that under prevailing low?
The difficulties in accepting the prevailing approach to retroactivity grow when we question why the arbitrary difference between balancing retroactivity in rulemaking? After all, if the new policy is the "better" why not apply it in a general rulemaking context as opposed to limiting its application to a specific controversy? In an attempt to get around this inconsistency, courts have sought to introduce retroactivity in rulemaking through the back door by distinguishing between primary retroactivity and secondary retroactivity (Daughtern of Miriam Center).[AMF Note: I thought this was a bit strong.] But, in practice, it is truly difficult to understand the fairness in submitting a party who has left the Medicare program to a retroactive rule preventing accelerated depreciation while exempting the party that remained in Medicare from the retroactivity. Nor does it make much sense to say that the party who left could have avoided the loss by not leaving because, before leaving, he would have had no reason to anticipate such a loss and probably would not have left if he had.
Much of the uncertainty and confusion created by the balancing of retroactivity, the arbitrary distinction between adjudication and rulemaking and the attempts to mitigate the effects of this distinction by introducing retroactivity into rulemaking through the back door would be eliminated by the proposition of Breyer & Stewart. The advantages to be gained in terms of being able to make decisions based on rules which, when changed, will not applied retroactively are far superior. The foremost advantage, of course, is in the security provided to the majority that their expectations on a given rule won't suddenly lead to their being penalized for transactions entered in good faith in reliance on the previous rule. The cost is simply less flexibility in being able to remedy particularized inequities which would tend to become less widespread as the system becomes more predictable.
Moreover, a look at specific circumstances where retroactivity was applied would confirm that, in most cases, the loss from preventing the retroactive application is small compared to the gain in being able to rely on the existing rules without suddenly and unexpectedly (unexpectedly except for the judge who later decides to second guess the affected party) being subjected to a new rule playing have with the decisions made in reliance on the old.
This is not to mean that, from time to time, the overriding and compelling nature of a policy may justify a retroactive application. But this should be the exception rather that the rule and discretion to create such an exception by statute should repose exclusively in the legislature and not in administrative bodies.
My first concern would be to address issue of the Health, Affluence, Life Organization (HALO) statute's reviewability. There is no preclusion of review under AA sec. 701 (a) (1) as the statute is silent. It could be argued that the statute is not reviewable under law AA 701 (a) (2) i.e. demonstrating that there is a broad delegation of power(Webster). But according to Abbot Labs there is a strong presumption of reviewability as it requires "clear and convincing evidence" to the contrary. There is no such evidence here. Indeed, our case does not deal with national security as in Webster or an international treaty obligation Panama Canal. Furthermore, Overtone Park would require us to examine statute very carefully to see if review provided by law noting that AA sec. 701 (a) (2) is a very narrow exception. Again, one could are against reviewability under APA 701 (a) (2) due to practical policy implications review poses for agencies regulating very complex economic matters as in Hahn or Langevin. But, given the strong presumption for reviewability and the unique circumstances of Hahn and Langevin involving highly technical matters involved in FHA financing, the court will probably find HALO statute reviewable.
Another issue which must be addressed before we can challenge HALO's action concerns our clients' standing under APA 702. I would argue via Data Processing test that 1) there is injury in fact to our clients. Under Sierra Club our clients would be injured by deprivation of nicotine to which they are addicted and for the use of which they face severe fines, the fact that this injury is government induced, and that victory on merits can only redress injury here. Re: the 2nd Data Processing factor: my clients seeks to protect, i.e. to make whole nation better off. I would further argue that under this standard, my clients' interests fall within the zone of interest
under the narrower Lujan qualification of step 2 of the Data Processing test which omits the work "arguably", although court could go either way.
Another question to address in challenging HALO's action concerns ripeness of the claim. This can be approached utilizing formal criteria. Utilizing these criteria 1) the agency action here is fit for judicial decision, it is a "final" action given the tremendous waiting period involved in obtaining hearing for a license, Abbott Laboratories, CBS,. 2) there would be a tremendous hardship worked on my clients if review denied, huge fine, nicotine withdrawal Abbott Laboratories, and 3) the issue here is extremely factual, not abstract Abbott Laboratories. Likewise, our case is ripe under NALCC's functional approach: client's hardship needs to be addressed immediately- cannot necessarily foreswear nicotine in a few weeks time, 2) affect on agency can be minimized via consolidation of suits into class action NALCC, and 3) this is not an overly technical issue that court can readily address. Toilette Goods Assn. v. Gardner does not control for the above reasons. Once reviewability, standing and ripeness are dispensed with I would then attack the HALO statute and challenge the constitutionality of the delegation of power to the agency arguing under Schechter and Benzene the delegation is too broad and hence unconstitutional. The prospects for finding and unconstitutional delegation are slight, however, since Schechter the Supreme Court has not found any further unconstitutional delegations. Most probably, the Supreme Court can "fix" the broad delegation by narrowing the enabling statute with a standard as in Benzene. Or, as in Chevron merely find statute ambiguous and treat delegation as broad and defer to agency discretion interpreting it.
Assuming, the nondelegability argument fails, then I would attack the rules promulgated informally by the agency, which are usually accorded significant deference under the "arbitrary and capricious" standard APA 706 9(2)(A). I would first submit that the rule here is an "interpretive" rule citing Judge Starr's dissent in Community Nutrition Inst., that our rule cannot be enforced until the agency decides, after considering various factors, whether the rule is violated. Or, citing Silberman's dissent in Air Transport Assn. of America, that rule here is just one of procedure despite the fact that it affects a substantive right. In such a case, the court will be less deferential to HALO and more likely to substitute its judgement in reviewing decision. Nevertheless, this may be a difficult argument to proffer, especially in light of Skidmore which suggests that interpretive rules are persuasive. As concerns an injunction, Ms. Fume and Mr. Choke stand on pretty solid ground in terms of obtaining review and pre-enforcement review given the immediacy of the harm threatening them as noted above in the functional and formalistic considerations of reviewability Abbott Laboratories, NALCC.
Re: the fact that HALO has not published procedures for obtaining a "tobacco addict license", Ms. Fume has a very strong case for attacking the validity of the procedure. Ms. Fume's situation is analogous to that of the Plaintiff's in Hornsby, where the court found an absence of due process given inadequate procedures in granting liquor licenses. Like the plaintiff in Hornsby, Ms. Fume is entitled to notice as to why her license has been denied i.e. she should be offered a hearing to discover the claims of those opposing her and give her a chance to rebut/cross-examine. Similarly, Holmes supports a similar due process concern where the government allocates a scarce resource, as is the case here "tobacco addict licenses". HALO might attempt to counter on this point citing Holmes' requirement of basing selection on chronological order of application is sufficient, however, Holmes requires "ascertainable standards" which HALO does not provide. "Clear and convincing" simply is insufficient despite Fook Hong Mak's obvious deference to administrative standards. The latter case dealt with a rule, to which courts are generally more deferential. Our case deals with an adjudication, non-legislative facts to which courts are generally less deferential. I would argue that Asimakopolous a fortiori strengthens our position in that the court even refused to defer to a rule where an important interest is a stake i.e. not being deported. As to the validity of the licensing procedure we could argue as in Wyman-Gordon, that the adjudication here was prospective in nature i.e. would not take effect for a few weeks and hence it is invalid as only rules are prospective. We could also argue that the licensing procedure confers an entitlement or property right on our clients. That, furthermore, this liberty/property interest requires greater protection that offered by the adjudication here, namely greater safeguards as provided under Mathews v. Eldridge. Under Mathews v. Eldridge the court must determine the private right affected, the risk of erroneous deprivation, and the fiscal and administrative burdens to government. It is unlikely that the courts will find a defined government-created property interest here, however.
As regards Ms. Fume's concern of discrimination, Overton Park's requirement of a "searching review" of all "relevant factors" in an adjudication such as this should enable us to require the agency to proffer some records substantiating the denial of her license. Specifically, if we can show "bad faith" in reviewing the records, here, we might be able to compel discovery of the HALO officials involved. This, might be possible despite Morgan's entreaties not to probe the minds of officials. We might also argue here for de novo review citing Overton Park which noted such review could be allowed in an adjudicatory action and where agency factfinding procedures are inadequate. Furthermore, we could argue via Webster which did allow a court to review a constitutional claim based on an agency discrimination because of sexual orientation, that Ms. Fumes constitutionally protected rights, e.g. privacy, was violated.
The Environmental Coalition might run into a standing problem in attempting to challenge OSHA's action in court. Given that c4 poses a threat to those individuals handling or working with the substance and the Coalition members ostensibly do not come into contact with c4 and are not threatened with injury, they may have no standing under Sierra Club. The Coalition can overcome this problem by alleging that some of its members are in the workplace and are threatened with exposure to c4 (SCRAP).
Assuming standing, the coalition can challenge the introduction of c4 into the workplace based on Benzene's interpretation of sec 3(8) of the Occupational Safety and Health Act and sec. 6 (b)(5) of the Act re: toxic materials. According to Benzene's OSHA must determine prior to promulgation of a standard, that such standard is reasonably necessary and appropriate to prevent "significant risk" of material health impairment. Benzene's interpretation of the Act precludes OSHA's banning of c4 totally from the workplace. Indeed, the Benzene court would view such an attempt as unconstitutional under Schechter and Panama Refining. Thus, I would advise the Coalition against insisting on a total ban of c4. There doesn't seem to be enough evidence proffered for justifying a c4 ban in light of the fact that there is an acceptable alternative, table salt.
The Coalition does have other options for challenging OSHA's 30ppm standard. The Coalition's best option would be to insist on OSHA's initial proposal of 6 ppm. At least OSHA has attempted to establish a threshold level of significant risk as Benzene mandates. The 6 ppm limit has been adjusted to correct for the correlation problem between gophers and rats or humans arguably to a "zone of reasonableness" Hope, Boston Edison Co.. This, could be used to argue against an unconstitutional "taking" by International Toxics. Furthermore, the Coalition could argue that OSHA's departure from 6ppm to 30ppm is precipitous and that an agency must follow its own rules Arizona Grocery. When an agency departs from an established course it must apply a reasoned analysis and explore all of the alternatives State Farm. Here, OSHA did nothing of the sort. It summarily stated that it reevaluated the gopher studies and consider the economic effects of the 6ppm standard. Nowhere in the record does it attempt to explain these changes. Nova Scotia would seem to require more detailed comments from OSHA re: adoption of the new 30ppm standard. Under Weyerhauser the switch to the 30ppm should at least be a "logical outgrowth" of the 6ppm. Yet, OSHA fails to document this in the notice and comment proceedings. Of course, OSHA could counter that under Vermont Yankee it need not provide any more justification as this would be unconstitutionally grafting procedural requirements onto notice and comment rule making in excess of those required by APA sec 553.
Another option would be to try and set aside the 30ppm standard on the basis of ex parte communications. Overton Park, because it calls for a review of all relevant factors could possibly offer a point of attack to compel discovery of the OSHA official re: the ex parte contact with Quayle. Morgan which assumes a presumption of administrative regularity and militates against probing the minds of agency officials does make our task more difficult. Nevertheless, the presumption of administrative regularity can be overcome if the decisionmaker did not "hear" the case, the decisionmakers relied on evidence not disclosed, and the decisionmaker does not give reasons in accordance with Overton Park.
Even if proven, the alleged ex parte communication, may in light of Costle be viewed as insufficient to set aside the 30 ppm standard given the fact that ex parte rules of the APA do not generally apply to informal rulemaking. Nevertheless, we could argue under Home Box Office would have required docketing of Quayle's conversation with OSHA official because the communication came after notice was issued and Quayle was arguable and "interested party" in the sense he represented industry an pro-deregulation forces. To the degree, Home Box Office has been overruled by Vermont Yankee, we could argue our case comes under the exception concerning the exclusion of ex parte communications from the record in Action for Children's Television, that such communications must be disclosed on the record involving "conflicting private claims to a valuable privilege". Costle would seem not to require the docketing ex parte communications with Quayle, given that the communication here seemed to involve policy and not hard data. Although, Blum would seem to provide a possible ground for setting aside OSHA's 30 ppm standard because the comments there as here were made just before the decision was reached and appear to have had a material impact on it.
I would agree with this statement. Where a new policy is unfair or unjustified sec. 706 of the APA would allow courts to overturn such a decision. A key consideration is the protection of expectation interests. Both retroactive adjudication and rulemaking can create potentially harsh and inequitable consequences for expectation interests generated by pre-existing law. Of course, if the impact is not unjust/unfair then the retroactive decision should be upheld out of basic deference to the administrative body concerned.
In the case of adjudication, Chenery II suggests a balancing approach. In other words the court needs to balance the effect of retroactivity on expectation interests versus the need for agency flexibility in decisiomaking. Where a severe hardship will be visited upon the regulated entity, the APA under the arbitrary and capricious standard has generally provided sufficient safeguards. See for example a series of decisions of the NLRB affecting employers, where the employer at the time it took a specific action, had no notice of the NLBR's retroactively-adjudicated policies. In most of these cases the courts under APA 706 (2) (A) have summarily set aside such decisions (Guy F. Atkinson Co., United brotherhood of Carpenters, E & B Brewing Co.. Where the cases are not so clear-cut as to hardship the courts have shown themselves quite capable of weighing the equities a la Chenery II of retroactive adjudication e.g., Bell Aerospace. In Bell Aerospace, the agency was able to maintain flexibility in policymaking and avoid rigidly locking itself into a rule re: managerial employee status despite a major change in policy, finding no "unfair retroactivity".
Re: rulemaking, as long as it retroactively does not work a an undue hardship, retroactivity in rulemaking should be allowed. I disagree with the court in Bowen, that rules can only have a prospective effect and cannot be retroactive it Congress has not specifically provided for. Bowen illustrates an example where an agency due to a procedural error was forced to reissue a rule. Subsequently, the agency sought to apply the rule retroactively for valid policy reasons. Nevertheless, the court precluded it from doing so even though the retroactivity was not unfair as the regulated entities here were ostensibly on notice. Chevron seems to support retroactive rulemaking where enabling statute does not directly speak to this issue as long as it is reasonable under the Chevron step 2 analysis, as it arguably was in Bowen. In any event, Bowen, as qualified in Scalia's dissent would allow retroactive rulemaking, where the retroactivity was secondary i.e. action taken in past leads to consequences in the future and where it is not too late to change future consequences. Under this analysis, Miriam Center us arguably a permissible retroactive rule because it is secondary retroactivity affecting future expectations. Bowen, on the other hand, is impermissible primary retroactivity. Scalia's distinctions while insightful aren't necessary under a Chevron analysis for validating retroactive rules.