Legal Considerations in Agency Procedures

1. Changing the Rules

2. Basic Principle • Agencies are bound by their own rules and adjudications until they change them • They are free to change them, but must explain the reasons • The reasons must meet the arbitrary and capricious or substantial evidence test

3. Civil v. Criminal Prosecutions • Criminal courts may read the law differently than the agency

4. Estoppel • Can the agency create situations through mistake or policy that do not follow the law, but are binding?

5. Agency Personnel Give the Wrong Advice • Why should we care? • Should the agency be bound? • What problems would this cause? • Unequal application of the law? • Potential for corruption? • What holding the agency bound improve advice? • What is the alternative for the agency?

6. The Agency Acts Against the Law • Same assumption - not binding • First, there must be reliance to raise the issue • This happened in the S&L cases • The courts will look for another theory to support the agency's action • In the S&L cases, the courts found that the agency created a contractual obligation, which was binding

7. Making the Case for Your Client • Is this a rule that the agency can waive? • Would allowing the exception create fairness issues? • Allowing a benefits application to be filed late • Allowing a competitive license or bid to be filed late • What is the impact on the client? • More slack in immigration, for example

8. Res Judicata - General Rules for Private Parties • Same parties, same facts • You are bound • Issue preculusion - Same parties, same issue • Bound on the issue

9. Res Judicata • Policy issues • An agency can be involved in thousands of cases around the US • The same issue and parties can arise in different courts • District judges have different abilities and politics • What would be the impact of allowing res judicata?

10. Nonacquiescence • The agency is bound by the decision in the district, or in the circuit if a circuit case • The agency may disregard or relitigate the issue in other districts or circuits, even against the same parties, if there is jurisdiction • Once the United States Supreme Court rules, the agency is bound • What are the politics in deciding whether to appeal? • When will the agency choose to not appeal? • How should this affect their win-lose record?

11. Prospectivity and Retroactivity

12. Basic Principles • Retroactive criminal laws are unconstitutional • Retroactive civil laws are disfavored • Congress must specifically intend retroactivity • Can still be unconstitutional depending on what they affect • Retroactive procedural rules are usually OK • Reinterpretations of the law with retroactive effects are common

13. Adjudications • Older cases • No retroactive application • Can only change the rule going forward • Does not apply if there is no old rule • New Cases • More latitude for adjudications to retroactively change rules, but still disfavored • NLRB does not want to make rules

14. Rules • Intended to prospective only • Congress can allow retrospective rules to correct problems • Tax loopholes • Less likely to be applied to innocent parties • Can reaudit and the like • Not applicable if there is no old rule • Not applicable to changes in interpretation of the law

15. Primary and Secondary • Primary retroactivity • I cannot go back and say that you can no longer get paid for in office chemotheraphy and then ask for a refund for past payments • Secondary retroactivity • I can stop paying for in office chemo in the future and make your investment in your stand alone cancer center worthless

16. Bowen v. Georgetown University Hospital • Feds change the way reimbursement is calculated on Medicare costs • What was the retroactive effect of this rule? • Did the court accept this? • What if the "conditions of participation" say that you are subject to retrospective rule changes which require refunds? • The court in a later case found that there could be changes in the way that base year calculations were done, even though these changed past bills