Presentation Transcript

1. Wyman-Gordon – announcing generally binding principles (i.e., rules) in adjudications Wyman-Gordon plurality (& dissenters) argue that agencies cannot announce generally applicable rules in an adjudication (as opposed to making law through precedent) Note both rules & precedent are “rule of law” but they have somewhat different effects Binding, generally applicable rules are intended to bind all regulated entities to which they purport to apply (i.e., employers in Wyman-Gordon) from the time they are enacted Precedent binds courts (inferior and sometimes horizontally) and agency adjudicators via stare decisisbut regulated entities not parties to original decision don’t have to consider themselves bound until adjudicator says they are Disagreement between Fortas (plurality) and Black (concurrence) reflects the benefits & disadvantages of making rules in rulemakings versus adjudications Fairness (notice/participation) vs. Efficiency/flexibility
2. Supreme Court’s general approach to policymaking in adjudications (outside of Wyman-Gordon) Chenery II – (1947) – text p. 363 Since the SEC . . . does have the ability to make new law prospectively through the exercise of its rule-making powers, it has less reason to rely upon ad hoc adjudication to formulate new standards of conduct within the framework of [federal law]. The function of filling in the interstices of the [law] should be performed, as much as possible, through this quasi-legislative promulgation of rules to be applied in the future. But any rigid requirement to that effect would make the administrative process inflexible and incapable of dealing with many of the specialized problems which arise. Not every principle essential to the effective administration of a statute can or should be cast immediately into the mold of a general rule. Some principles must await their own development, while others must be adjusted to meet particular, unforeseeable situations. In performing its important functions in these respects, therefore, an administrative agency must be equipped to act either by general rule or by individual order. Bell Aerospace (p. 365) reaffirms Chenery II
3. Bell Aerospace NLRB held an adjudication where it switched a long held position on the role of managerial employees. NLRB held that buyers for Bell Aerospace were entitled to Act’s protection SCT ruled Agencies substantive interpretation of statute to cover managerial employees was wrong and earlier interpretation was right On remand to agency, it could decide issue of whether buyers were “managerial employees” via adjudication rather than rulemaking “The views expressed in Chenery II & Wyman-Gordon make plain that the Board is not precluded from announcing new principles in an adjudicative proceeding and that the choice between rulemaking and adjudication lies in the first instance within the Board’s discretion.” Textbook p. 365
4. When will courts frown on agency decision to use adjudication to make policy Bell Aerospace – there may be situations where announcing new principles in adjudications amounts to an “abuse of discretion” Big concern – retrospective application of new principles Would application of newly announced principle be “unfair” or “work a manifest injustice” in this particular case? Factors to consider: Is this a case of first impression? Does the new legal principle abruptly depart from well-established practice or does it merely fill in portions of a vague statute or extend existing rules and practices? How much did the parties actually rely on the old rule when taking action? How burdensome is the retroactive application? Is there a statutory interest in applying the new legal principle – i.e., what are the statutory purposes and does the new rule implement or cut against?
5. Morton v. Ruiz – policymaking through informal means BIA established a requirement that Native American eligibility for general assistance benefits under the Snyder Act extended only to “needy Indian families and persons living on reservations . . .” SCT strikes down this generally applicable rule – Why? Because it didn’t take place in a rulemaking? Can such judicial reasoning stand after Bell Aerospace? Is it because the generally applicable rule is found in an agency policy manual? What kind of agency action is the adoption of an agency policy manual with such rules? Does that worry the Court? But didn’t the Ruiz’s end up getting their “day in court” just like the employer’s in the Wyman-Gordon line of cases? Is it worrisome to have a rule announced in a manual if you get a formalish hearing to litigate it in? What if the agency had merely sent the Ruiz’s a letter and the process had stopped there?
6. Must agencies follow their own procedural rules? Formally adopted rules (i.e., Sec. 553 rules or rules after formal rulemakings) Yes – they are as binding on agencies as the Constitution, any statute or judicial case law. Informally adopted rules (as in policy manuals) Some controversy about this BUT Generally: Agencies are notobligated to follow informal guidelines found in policy manuals, etc. Such manuals are not supposed to be binding in nature but rather serve only as internal guidance (more discussion on this w/ exceptions to Sec. 553 rulemakings) BUT if agency has an informal procedural policy that creates a “justified expectation” on the public’s part that agency follows certain procedures, courts may force agency to follow informal procedure Note – Sec. 552(a)(2)(C)’s req’mt that agencies publish staff instruction manuals that affect members of the public. May make it more likely that people come to have a “justified expectation” in certain informal procedures