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Regulatory State OutlineRubin, Spring 2010 I. THE STRUCTURE OF MODERN FEDERAL GOVERNMENT A. History 1. Great Depression until this time agencies were mostly used to police business- stop monopolies and unfair competition. (Upton Sinclairs The Jungle) 2. New Deal created new American with economic agencies- statutes touched every aspect of the economy. Beginning of modern regulatory statutes. Command and Control (we say it, you do it, Or dont do it). 3. Criticism of the inadequacy of agency process (trust me government isnt enough) and judicial review lead to 4. ADMINISTRATIVE PROCEDURE ACT 1946 bipolar model- agency decisions are either RULES or ORDERS. No crazy arbitrary results chain of logic. Decisions wont benefit one group to the detriment of another group. a. Rules- like statutes designed to implement, interpret, or prescribe law or policy. b. Orders- like judicial decisions constitute the final disposition of a controversy involving statutes or agency rules. c. Notice and Comment- normal process for modern rulemaking. Notices are published in the Federal Register to elicit comment before final rule is published. d. Formal adjudications- handled by administrative law judges in all other aspects similar to a regular court hearing. 5. Notice and comment produces rules, formal adjudication produces procedures APA is a procedural check- process makes things fair and rational. Makes agencies more focused and more likely to produce better results. Makers of rules should be held accountable so that we can check them. 6. 1960s-1970s- Public interest era- lots of statutes that had less to do with the economy. Right to a quality of life (clean water and air, workplace safety and equality, consumer safety) Environmentally conscious.

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a. Checks during this period agencies were more transparentdecision making was more responsive. In the notice and comment process, the people are the check. b. Congress another mechanism for transparency- statutes that forces agencies to make decisions in more specific ways that the APA did. Clean Air Act, etc. c. Heads of agencies are not elected, so the end of the day check is to see the politicians- not one single method for reigning in governmental power. 7. 1980s era of presidential control- Modern presidency- Reagan forward. Decided to pull in the reigns and have more control. Executive Orders formalized practice of presidential control a. OMB- Office of Management and Budget- agencies have to submit proposed rules to them b. OIRA- Office of Information and Regulatory Affairs reviews the rules. WH looks at proposals before they become rules. Reagan told agencies to conduct cost- benefit analysis. c. Cost benefit analysis makes agencies more efficient checks and balances. Cost justified regulations go forward. d. Presidential control another form of accountability- follow presidents preferred choice of action or see you later. B. Executive Branch Agencies versus Independent Agencies 1. Commissions generally independent. For the most part, agencies are coordinated by the executive branch. 2. Organic statute creates and empowers agency. If removal provision gives president the right to hire/fire head of agency at will and has one head, it is an Executive Branch Agency. 3. Independent agencies- limited in how they can be fired- usually an odd number of board members- president can fire them for malfeasance, etc. Could have bipartisan requirement. Presidential control is tied to agency decision making and control. 4. All agencies are subject to the APA, judicial review, and internal bureaucratic structure. 5. Agencies face 2 political principles President and Congress- can be allies against each other. 2

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a. Politically, ALL agencies are responsive to ALL parts of government. b. Fewer political positions in Independent Commissions. c. Easy for president to stack executive branch agencies. President can also use congress to threaten agencies (if congress will work with him). C. Political Appointees versus Civil Service Staffers 1. Government is run by civil servants entitled to no political hiring and firing process. Provides some stability (tenure, etc) also protected from political upheaval. 2. When presidents change, about 3k jobs up for grabs. 3. High level policy makers are confirmed by the senate checks and balances on presidential appointment, check on agencies for dual house approval. a. Statutory creation made civil service jobs non political, cant be fired for just any reason. b. Political appointees are constitutionally required (sort of) nominated by President and approved by Senate, those in charge should be responsive to those who are elected. Indirect accountability. c. Principal Agent Problem: president needs people to assistpres. Will choose people whose policy preferences are the same so the agenda is easier to accomplish. No delays. d. Senate approval- makes sure you get a quality control stamp of approval. e. Average tenure of political appointees is 2-3 years, then you get asked to resign. f. Not uncommon for presidents to clean house when they take office. Especially when parties change. President has unconditional authority to make people resign (US Attorneyswho prosecute people who break federal laws, set policy in office and determine which violators to go after). g. President has responsibility to make sure that these laws are faithfully executed. US Attorneys have responsibility to enforce the law. Ethically. 3

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II. THE COMMON LAW AS REGULATORY METHOD A. The Problem of Auto Safety 1. Four commandments of auto regulations: Promote auto travel, promote auto safety (manufacturers), encourage good driver behavior (states), federal law should preserve auto manufacturers control over vehicle design and preserve states control over the roads and driver behavior. 2. Before MacPherson v. Buick, auto manufacturers only had to protect the immediate purchaser of the car- the Dealership, who wouldnt likely suffer any injury if the car was defective. State common law precluded recovery by the ultimate driver, who is the foreseeable user of the car. a. Does the product have to be inherently dangerous for it to coerce legislation, or does it have to be something that is safe when properly used and then bad things just happen? B. MacPherson v. Buick Motor Co. 1916 1. Lawsuit makes manufacturers responsible for final products. Manufacturers are now responsible for vehicle defects things they could prevent through a reasonable inspection (which had been completely omitted in this case) Manufacturers of a product have a responsibility to make a product that will not hurt you if it is used for its intended purpose. After this lawsuit consumers can recover from manufacturers. 2. Cost benefit cost of testing cars versus cost of lawsuits for liability. Auto manufacturers have a lot of control over our safety. a. Information Problem- consumers dont know whats going on. b. Tort law is reactive, not proactive. c. Rather than wait to be hurt and then sue after, why not demand safety up front? C. General Reasons for Regulation 1. Contract limits: affordability, limits on technology, information problem, collective action problem, people are generally resistant to change, people dont value safety. 2. Solution: Command and Control: make it mandatory to prioritize safety features. 4

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a. Externalities: things outside of your control: pedestrians, things you can hurt even if you yourself are not hurt b. Market failure corporations engaged in monopolistic behavior- insufficient competition. c. Destructive competition numerous competing firms end up undercutting each other- market doesnt produce. d. Externality- driving behavior imposes costs on others. 3. Social Justification good thing- people want a socially desirable good. We want the government to look out for our long term well being. a. Over regulation can be bad we dont want the government to think for us (paternalism) b. Protectionism protecting corporations so they arent liable to the public. Private interest groups. c. Are all regulations bad? Criticisms against the government often have to do with unintended consequences (airbags killing children, etc.). III. THE NATIONAL TRAFFIC AND MOTOR SAFETY ACT OF 1966 1. Social structure and political climate Johnson administration, Great Society of Congress- rhetoric fuels legislation. Tort law is not enough. It allows manufacturers if they want to pay out in settlements or pay for safety. 2. Advertising affects individuals differently.

3. 1966 Act was a product of its time. Part of broader activist movement. 4. Interest groups have their hands on the politicians. They need money to keep their jobs. A. Background: How a Bill Becomes a Law 1. Most bills NEVER become laws. Most never make it to the House floor. 2. Basic requirements Constitution bicameralism and presentment. a. Bills have to be introduced by a member of Congress. But these arent necessarily drafted by members of Congress5

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lobby groups, President, etc. Either the HOR or the Senate can take the lead. b. Assume: President initiates bill. Goes to HOR, gets referred to a committee, or can be sent in parts to several committees. c. Parliamentarian decides where bills get sent supposed to be non-partisan. Committee chairs jockey for jurisdiction. Can make bill look like it needs to go to their committee. d. Committee chair wants jurisdiction over bills so they can control them. Positive political account they want to serve the public good. Preserve their legacy and get the policy they want. Power to design and control. e. If your bill doesnt get killed or left to rot in committee, it leaves the committee with a report (narrative), and the bill gets put on the calendar; report is a backdrop to make bill understandable. f. If you manage to make it off the calendar with an open rule, bill goes to the floor for a full debate. Three readings, 2nd has open debate and possibility for amendment. Iron out problems and build support. g. Senate has different calendaring process and gatekeeping system. Unanimous consent needed or it dies. Unlimited debate. h. Remember: Delegation is important to Congress. Give things to committees that have expertise. Preferred policies. B. Text and Legislative History 1. Motor Vehicle Safety Act p. 100 CP. Sections: Purpose, Title, Definitions, Dates and Provisions standards, Delegation of Power and Responsibility, Preemption Clause. Notice and Comment provision, references to APA. Savings Clause. Manufacturers keep their designing power, but must conform to standards. 2. Political Climate. Context determines policy agenda. Drafters of actual language is done by staffers, not elected officials. Exec Branch statues are written in the Dept of Justice. Accountability Questions. But officials are responsible for what comes out of their office. a. Most members of Congress only read the reports, not the bills. Reports travel with the bill. Important in legislative history? 6

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b. The Motor Vehicle Safety Act [which we have been reading] creates the National Traffic Safety Agency (sec. 115) in the Department of COMMERCE. The bill passed on the same day regarding highway safety [see CP 113] creates the National Highway Safety Agency. Both exercise the authority that the statutes grant to the Secretary of Commerce. Both are run by officials appointed by the President and confirmed by the Senate, and who are subject to at-will presidential removal. About one month after Congress enacted these statutes, as part of a larger act that established the Department of TRANSPORTATION, Congress changed the name of both federal agencies by replacing Agency with Bureau (still two agencies) housed in the newly formed Department of Transportation. [You can see that creating a whole new Department and a whole new cabinet-level position, the Secretary of Transportation, would be an issue that Congress would want to separate from the issue of motor vehicle safety standards in order to secure smooth passage of the latter. In 1970, after a couple of other reorganization moves consolidating the two bureaus into one, Congress officially established the National Highway Transportation Safety Administration (NHTSA) to assume the functions of the remaining bureau. NHTSA is run by an Administrator, appointed and removed in the same way as those who ran the previous agencies. After minor amendments in 1983, NHTSA is today responsible for setting performance standards for motor vehicles. It has the following other responsibilities: * investigating safety-related defects in motor vehicles and issuing recalls * enforcing fuel efficiency standards * overseeing grants to states and local governents for highway safety programs * conducting research on driver behavior and traffic safety. When we talk about the "agency" in discussing motor vehicle standards like the one mandating airbags, we will be talking about NHTSA in the Department of Transportation. c. Bill is part of broader rights movement. History and political climate. Bill delivered by the President. Senator Ribicoff- policy entrepreneur. Bill went to Commerce Committee. d. NHTSA run by single administrator nominated by President & confirmed by the Senate. IT MATTERS WHO INFLUENCES THE AGENCY. 7

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e. Performance vague in statute. Term of art. Creates room for argument. Preserves manufacturers power to designincentive to innovate. Goal is still safety standards. Concern is for safety features and not how to construct them. f. Sect. of Commerce HAS (shall) to prescribe auto safety standards. g. Sect. 102-1: unreasonable risk what is possible, and what is reasonable? 1.Possible- practicable (time frame) Phase ins allow manufacturers tcome up to speed and mitigate burdens. Secretary only has the power given to him in the statute (by Congress). Sect. has to take a lot of things into consideration. Notification requirements for recalls and defects in cars. 2. Congress leaves a lot out of bills makes them harder to object to. References to Honda Case later in semester. C. Reasons for Delegation 1. Congress uses statutes to delegate power to an agency. President can appoint power to any political appointee. Sect can do so as well but the Sect is on the hook if something goes wrong. 2. Reasons for specific delegations: Costs and Benefits. What do I gain/lose if I keep/pass power? Procedural costs of bicameralism and presentment. Trade offs. Less bargaining if you have broad delegation. 3. Broad delegation: monitoring costs. Principle/Agent problem. Agency might impose its own preferences. 4. Blame shifting and credit claim. Congress can distance itself from unpopular rules because the Agency is responsible for the rules. Senators run for reelection, Agency heads disappear. 5. Mixed strategies: Legislators will prefer to make policy themselves as long as the political benefits they derive from doing so outweigh the political costs; otherwise, they will delegate to the executive. (from book). External factors to delegation (CP p 144) Limits on Delegation 1. Non delegation doctrine: legislature cannot delegate its inherent lawmaking powers to agencies without providing specific standards the bureaucracy shall apply in administering the delegation, also have to lay down an intelligible principle for agencies to follow. Not actually used to bar delegation, requires Congress to give an intelligible principle. CLEAR AND GUIDING PRINCIPLE. 2. Intelligible Principle: more specific in broader statutes. Actual statutory language in the operative or substantive portions of the statute. Identifies limit or constraint on agency. 3. American Trucking v. Whitman. CAA prohibited EPA from considering costs, according to the courts. If a statute violates the non delegation doctrine, the statute is void, and if the statute is void, the agency has 8

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no power, so how can an agency designate/place limits in itself if it has no power? Intelligible principle requisite, with an adequate margin of safety. Requisite- sufficient but not more than necessary. Part science, part policy. 4. Weak language works. IV. STATUTORY INTERPRETATION A. Introduction 1. Intelligible principle- uses vague words- serve purposes of non delegation doctrine? Forces Congress to make the hard choices, provides some guidance and constraint on agency authority, provides courts with a metric for judging agency action. 2. So what does it MEAN? Has a textual basis words are the law. Congress chooses the words. If you know something about an officials preferences, then you know how they will interpret a statute. a. Textualism: theory of statutory construction. Relevance to the words of the statute. Serves Congress. Only considers the words and tools for understanding the words (dictionary)doesnt go broader and use other tools for understanding legislation. b. Intentionalism: looks at intent of the enacting Congress. Starts with text, but keeps going. Will consider the legislative history. c. Purposivism: examines evil at which the statute is aimed. What the enacting Congress was seeking to remedy: the PURPOSE of the statute. Distinction from Intentionalism- less interested in mind reading. What was going on in the statute and in the world that required this statutory response. Involves looking at history for legislative intent, what was Congress addressing (as opposed to thinking) d. Imaginative reconstruction: what would Congress have done if faced with this problem today? Extrapolate from general priorities of enacting Congress. e. Dynamic Interpretation: updates statutes to contemporary circumstances to make it workable. Based on current Congress and not enacting Congress. Pragmatic, evolving understanding of the statute.

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f. All of the theories start with the text. Use outside textual aidsdictionaries, canons, legislative history. Dynamic sources unrelated to statute. But text is best. B. Intentionalism and Purposivism 1. Theoretical Foundations a. Holy Trinity v. United States: plain text reading of statute does not permit contracting labor or services from aliens- court does not go with literal reading of statute- looks and intent and purpose of enacting Congress. Act was meant to denote manual labor clearly a pastor does not fall under this category. Avoiding absurd result. No explanation for why Congress left out manual when the act was intended to mean manual laborers. Law was amended to exclude ministers and professionals, generally. b. General Critiques: Intent is hard to determine sometimes; conflicts in legislative history. Imaginative reconstruction of legislative intent. Court started with words of statute, then looked at title, then to history, then to legislative history- more purposivism here. Congress was Christian and probably wouldnt have restricted ministers if they had thought of it. Hard to get to intent of ENTIRE Congress. Intent is not the law. Interpreters have a lot of room to insert their preferences, using any method of statutory interpretation. 2. The Role of Legislative History a. Types of Legislative History: Usually refers to internal legislative pre-history of a statute. The bit about looking over a crowd and picking out your friends. Committee reports- collective statement of subgroup of Congress that knows most about the bill. Can be ambiguous, misleading, and influenced by lobbyists and lawyers (smuggle in helpful language). Scalia hates committee reports. Reports are written by staff or lobbyists- great potential for abuse. Same for floor statements. All other justices are wary of legislative history but do not reject it. Hearings and floor debates get less attention. Presidential signing statements- Reagan- said the statement is authoritative on issue of legislative intent. Courts tend to look past them. Sponsor statement- have a bit more bearing than debates when the person talking is the person who sponsored the bill. b. The Checkerboard Cases: Montana Wilderness v. US Forest Service. Argument based on property law. In first case, it is 10

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decided that Alaska land grant does not apply to lands outside of Alaska. Ambiguous language in statute, court looks to natural interpretation. Instead of stopping at plain meaning (since act is entitled Alaska Land Act) the court keeps going. Senate reports, etc- builds a hierarchy. Nothing in legislative history suggests that this was supposed to extend to Alaska. (or they did and they ignored it). Why they went further than textualist argument is beyond me, but they did. Silence is golden the dog didnt bark. Montana 2 court reverses its position in light of another statute passed by Congress. Colorado Wilderness Act interpreted Alaska Land Act as applying nationwide. Found in subsequent conference report, which apparently had weight. Decide to go with broader interpretation of Alaska Act, the environment loses and Burlington National gets to chop down trees and do their thing. 1. Hierarchy: Committee Report, Sponsor Statement, Other Statement (Presidential statement, letters), Losers Statement, Subsequent or later enacted laws and their legislative history. 2. Repeal by implication- the court hates that. Canon of construction. c. The Textualist Critique of Legislative History: respect for legislative process and the constitution. Only the words of the statute pass the legislative process (bicameralism plus presentment). Legislative history allows a judge to manufacture their own interpretation. Concept of legislative intent is incohesive because of the outside influences of Congress. C. Textualism 1. Theoretical Foundations a. Public Choice Theory: beady eye approach. Legislative history is a cheap way of getting benefits. Legislators sell statutes to the highest bidder to get reelected. b. Social Choice Theory: concept of legislative intent is incoherent. How can 536 people share the same intent? Arrows Theorem why multi member body cannot share the same intent. Compromise. 11

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c. Scalia- law is objective and impersonal. Statutory text is law. Committee reports are not. 2. Application Issues a. Vague or Ambiguous Text: When a statute deals with technical, specialized subjects, courts use the specialized meaning of the word in the statute unless that leads to an absurd result. Tomato case. Court uses established meaning of a word. Court did not examine purpose of statute. Sometimes intent helps. But it can get you into trouble too. b. Clear but Troubling: United States v. Locke: mining claims have to be filed prior to December 31. So when mining company filed on the 31st, they were denied. Seems illogical to make them file by the 30th but thats what the statute says. Out of luck. Prohibition against judicial legislation- that is the realm of Congress. Deadlines are arbitrary. Dissent says its ok for the Courts to make up for mistakes rather than to let them slide. But Congress must say what it means. Textualists will correct obvious typos. 3. Canons of Construction: big items with textualists. 2 kinds of canons. Linguistic canons- mostly in latin- describe how people use words. Substantive canons- reflect value judgments- constitutional normsconstrue ambiguous statutes favorably towards criminal defendants convey a message about how we want our laws to look fair. A canon is a maxim of well established principle. a. Linguistic Canons: Babbit v. Sweet Home. Agency is first interpreter of language court gets there second. Argument over word take. Laundry list of terms. Agency said that harm includes habitat modification, court has to interpret this. Look in dictionary. Harm is defined broadly- like the agency said. Surplusage canon- interpret words so as not to create redundant and unnecessary harm. Then goes on to purpose argument to support agency interpretation- better to be safe than sorry and support agency decision. In peri materia- construe whole act/ sections of a statute together. Noscitur a sociis words give meaning to the company they keep. Expresio Unius inclusion of one thing means exclusion of other things. b. Substantive Canons: Muscarello v. US. Hinges on interpretation of carries. Majority goes broad, dissent goes narrow. Textualist: dictionary first. Laundry list. Then to other books (Bible, literature), newspapers, to determine that meaning of carry a 12

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gun isnt limited to carrying the gun on your person. Dissent thinks that everyone knows that carry a gun means to carry it on your person. Rule of Lenity: existence of statutory ambiguity means you should be lenient to defendant in criminal cases. Majority says that there is no ambiguity. Dissent substantive canon- words need to be independent of one another. Uses legislative history to discredit majority. Transport argument construe statutory provisions in harmony. Two different words should have two different meanings. Congress later amended the statute to concur with the majoritys broad interpretation. Gregory . Ashcroft: State provision required mandatory retirement of judges that conflicted with federal rule excluding policy makers. Are judges policy makers? Plain statement rule canon. Federalism- ambiguous statutes should not be construed to interfere with areas traditionally left to the states. Congress must state clearly that it intends to raise a constitutional question (federalism)- canon of constitutional avoidance. Protects courts jurisdiction. Dissent thinks there are no constitutional questions at hand here judges are interpreters, only high level policy makers have to comply with the statute. Substantive canons are also subject to manipulation. c. Llewellyns Critique: p 909 canons and anti canons. Useful presumptions of supposed legislative intent. D. Dynamic Interpretation 1. Theoretical Foundations: Sometimes we have to adjust our interpretations of statutes to fit current contexts. 2. Contemporary Social and Legal Context: Bob Jones v. US: School openly discriminates in their admissions policy; IRS decides it can no longer give them tax exempt status and wont make donations to them tax deductible any more. Court says things have changed since statute was enacted (social purpose). Bridge statute with social context to avoid judicial legislation. Matter of common sense. Charitable means helping the public policy. IRS was in line with the rest of the country. Case about agency power. Dissent says this is judicial legislation. 3. Practical Reasoning: Hard to exclude current values when interpreting statutes. Interpreters are historically situated. Funnel of abstraction on p. 804. Best used on older statutes. V. AGENCY IMPLEMENTATION 13

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A.

Regulatory Process 1. Administrative Procedure Act: bipolar model rules are like statutes, orders are like judicial decisions. Notice and comment process. Administrative law judges, roving commission of trial examiners. Notice and Comment is for big decisions; policy decisions are posted on a website. No bigs. It matters who is in charge. 2. Standard no. 208 a. Regulatory Context: Policy happens out of agencies that have internal conflicts and politics. Young people in high stress jobs. Diverse backgrounds with diverse experience levels. Defect and recall people on one side, rulemakers on another. Defects and recalls are after the fact, rule making is proactive. Where do cost considerations come into play? Congress put a lot of money into recalls so thats what the agency initially focused on- they have power in funding initiatives. WH pressure- different administrations mean different priorities and policies. WH success depends on the public who have a whole other set of priorities. Standard 208s history- twisted- originally cars were supposed to have seatbelts but no one wore them. b. Passive restraints required: 1977 Final Rule: passive restraints based on performance standards, not design choices. Manufacturers had a choice of what to install: seatbelts are cheaper. Phase in period. Ignition interlock nonsense. Congress prohibited them. When administration changes so do priorities, public sentiment also changes so standards change. By the time Reagan gets to passive restraints c. Passive restraints Reconsidered: NPRM: Three pronged approach to reevaluating the passive restraint standard. Small cars before big cars because thats what people are buying (OPEC oil crisis cars that are better on fuel economy). Consider getting rid of phase in; also consider ditching passive restraints altogether. This is the notice part of the notice and comment process- to elicit comments for the agency. Lots of info to get meaningful comments. d. Passive restraints Rescinded: Reagan rescinds requirements for automatic restraints in passenger cars, based on public perception. Try to say that it is no longer reasonable to expect people to put on their seat belts. A standard has to be reasonably likely to reduce death and injuries and if no one puts on their seatbelts then what is the point? All of the vehicle manufacturers 14

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were opposed to keeping the automatic restraint standard I wonder why. Theres a lot in the rule that isnt required by the APA, to show the agency has done its homework. A lot of faith put in public acceptance; science distorted to suit its needs. NOTHING about airbags. Poor ailing auto industry- said it will hurt their workforce. Reagans platform. e. Unintended Consequences: Final Rule 1997: This is why all new cars have airbags. Less aggressive airbag deployment- can kill small adults and children. Mentions executive orders, that the cost of this wont change anything, and PUBLIC INTEREST. Actually pushed rule through faster to make people happy! B. Regulatory Analysis 1. Scientific and Technical Analysis a. What can Science Tell Us?: Science is imprecise. Three major risk sciences. Toxicology- limited to animal studies- have to extrapolate from humans to animals. Crash test dummies- not human, so not totally accurate. Epidemiology- how things happen in the world- problem- association but not causation. Statistical analysis- numbers- but everyone is different. Hard to say what will happen to a real person versus a statistical person. Reporting problems. Sometimes science/problems are too new. People misvalue problems- theyre dumb, and people also make up agencies. Fear of things you cannot control. Agency needs public buy-in- validation. Risk valuation is part science and part policyonce we determine a risk we have to make a judgment based on that risk. Trans-scientific judgments. When agency officials approach policy part of judgment, they approach it as people, and not as scientists. So who should make policy- scientists, or policy makers? It matters. Balance? 1. Science Charade: pervades agency decision makingunintentional, intentional, and pre-meditated. Unintentional happens when scientists get carried away- keep looking for answers when the answers run out- raises more questions than answers. Substitute own values for policy and dont separate out trans-scientific questions. Intentional- agency develops standard and scientists make a choice and dress it up in scientific language. Pre meditated: policy makers decide what level of risk they want 15

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and then they shop for corresponding science. But science has power over people. b. Example: Yucca Mountain: Burying nuclear waste under a mountain in Nevada. DOE had to abide by National Academy of Sciences recommendations, who said that the nuclear waste would still be dangerous for half a million years or so; safety standards at Yucca Mtn site would only keep it safe for 10k years. Not good enough. Said it wasnt practicable to ensure its safety for any longer. Arbitrary and Capricious test. 2. Cost Benefit Analysis a. How is Cost relevant? How do you value a life? Organic agency statutes can permit, require, or forbid cost considerations. CAA banned cost considerations. Cost benefit analysis can be skewed by the industry- over estimate cost of something to avoid regulation. Take into consideration- laundry list- economics is not science and is subject to manipulation- permits cost considerations. Feasible- envisions cost focus. Requires cost considerations. Cost cannot be the end all, be all of regulation- it is not determinative. b. What is the Value of a Statistical Life?: Who is valuing the life for what reason? We value specific lives more than statistical lives. Individual overestimate the risks associated with low probability events. (fear of flying after 911, etc.) Depends on who youre asking: male or female, old or young, etc. c. Example: Motor Vehicle Safety: Agencies will not consider cost when left to their own devices. Focusing them on cost makes them more attentive to unintended consequences. Rollover technology exercise. 3. Legal and Policy Analysis a. Does the Statute Permit or Preclude the Regulation?: Chevron: bubbles- stationary sources. Chevron test- (Step one, has Congress spoken to the precise issue, step two, is the agency interpretation reasonable?) (1) if the agencys interpretation of a statute is reasonable(reasonably clear?), then the court has to defer to it. Use textualism for first step (figuring out statute), then other tools if youre not Scalia. No dynamic construction. Judicial competence, de novo review of statute. Ambiguous words16

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agencys interpretation stands. Agency is better interpreter of policy judgments than the court. Agencies are under president and hes politically accountable to the people. (2) Doesnt matter if the court agrees or disagrees with the policy. Have to reject agency policies that are contrary to congressional intent. Democracy: Chevron- traditional view of courts as insulated from politics & able to be faithful to congressional intent. Interpretation should flow with the statute, in line with public interests. Well explained reasoning that justifies comments. Canons are court invented tools for interpreting statutes. Stare decisis- hesitant to throw out authority. Congresss power to create agencies means they have less control power over them. Dont want to eliminate judicial check- article 3 authority to review statutes. Ambiguous statutes means Congress meant to delegate to the agencies (implicit delegation). MCI: FCC is authorized to modify requirements in statute. Court decides to construe modify narrowly and precludes the FCC from changing their policy. An agencys interpretation of a statute doesnt get deference when it goes beyond the meaning of the statute. Said it was a fundamental revision of the statute, not a modification. Scalia. Chevron is negligible? Both sides use textualism and get different answers (rogue, unwritten Websters 3rd dictionary). Look at statute to see what policy meant- big or small changes? Agencies cannot rewrite statutes and become quasi-legislatures. Agencies make statutes work how they want to. Court will not let them alter their jurisdiction. Do a better job shoring up your decisions, agency. Chevron Step One. No deference to agency interpretation of statute if statute is clear and unambiguous. b. Does the Regulation Reflect Reasoned Decisionmaking?: State Farm Case- predates Chevron. Uses APA arbitrary and capricious test different standard of review to judge policy decisions. Cost benefit analysis of seat belts defied common sense. Said decisions have to be based on relevant factors and that the agency used irrelevant ones. Was annoyed about airbags and how they were disregarded. Caving to auto manufacturers Reagans platform. Decisions have to be supported by the evidence and consider the alternatives- and unintended consequences. Agency is obligated to explain its choices. Court makes sure agency does its homework. Cant say, the president 17

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make me do it. Policy is the tie breaker between science and economics. Agencies have to be objective. Courts have to back off once the agency proves it is acting reasonably. c. Does the Regulation Preempt State Regulations?: Geier v. Honda: Affect of federal regulation on state law. Federal regulation, like statutes, can preempt state law. Supremacy Clause. In this case state tort law provided an avenue for relief, but the court said no, Preemption Provision Canon- no inconsistent standards between state and federal regulations- can push out conflicts IF Congress wants it to. Savings Clause: compliance with federal regulations wont bar state causes of action. If the statute says something about preemption, then federal regulation has occupied that territory. Court wont find preemption as a matter of statutory construction. IMPLICIT preemption. If individuals can compel manufacturers to implement airbags before they are required to do it, then agency regulation is undermined. Dissent: we cant trust agencies on the basis of their superior expertise. We dont trust them because, we dont trust them. Lofty goal of majority- convince public of democratic legitimacy of agency- its doing good. Agency and product are legitimate. Accountable to elected officials, increases public acceptance. VI. JUDICIAL AND POLITICAL CONTROL A. Introduction 1. The Quest for Democratic Legitimacy: All three branches of government play a role in controlling the agencys work product. Judicial branch is the last to get involved- on the scene after the agency has a product. Judicial review may not be efficient, but it is tied to idea of public acceptance- instrument of justice. Positive and normative- explanation and justification. Justices want to get promoted? Reviewing courts have line to respect after State Farm and Chevron. 2. A Postive Account of Regulatory Policy: See chart p. 1174. Risks of delegation to different agencies (executive versus independent). B. Judicial Review: enhance legitimacy of agencies? Normative- good role for judges to pursue to legitimize governmental institutions. Positivecourts want to maximize their power, impose their own preferences. But courts arent elected, making it up as they go along. 1. Scope of Judicial Review: Vermont Yankee V. NRDC: Vermont Yankee wants to build a nuclear power plant, get authorization after hearings 18

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in agency. Go to get their license, hearing did not consider environmental effects- uranium and radioactive waste. Agency wants to deal with spent nuclear fuel through notice and comment, not adjudicatory process- prefer rule making to hearings. Can get info it needs without specifics- this is general. Court says that reviewing courts cannot order more procedures- Congress can. Court only requires a reasoned decision and explanation. Notice and comment process is efficient and accurate. Court can sent policy back to agency (state farm)- micro managing agency. Reasoned decision making is necessary. Agencies get to choose between notice and comment and adjudicatory rulemaking- per the APA. 2. Availability of Judicial Review: Mass. V. EPA: Courts are reactive institutions- have to wait for a case or controversy to do anything. A willing plaintiff is not enough- have to have standing means plaintiff has to have an actual injury that the courts can address though adjudication of the suit. (actual injury, causation, and redressability) In suit, EPA (via CAA) has to regulate air pollutants, defined as anything that reasonably endangers the public health and welfare. Operative provision of statute- intelligible principle. Public interest groups went plaintiff shopping. Court fears it is being asked to sit as Congress or President- wont grant standing to public interest groups. Plaintiff says that EPAs inaction lead to MA losing coastline. Did SC want to hear issue and found proper plaintiff? Creates new class of proper plaintiffs for climate change- the states. President behind EPA policy? Standing is important. Court sees itself as check on Presidential powers. Standing if defendant is not cause of plaintiffs harm then the court will not resolve a case or dispute between the parties. Court here says that causation does not have to have full redressability- FAIRLY traceable, IN PART caused by EPA sitting on its hands. CAA doesnt speak to CO2 regulation specifically- broad statute. Idea that courts can spur EPA to comply with statute. Reflects change in standing doctrine- more plaintiffs will get it. Merits question- determining if agency explanation is satisfactory. Court said agency disregarded relevant factors and considered irrelevant factors like foreign policy (chevron) sent back to agency for better analysis (state farm). Court stretched to recognize quasi sovereign state here. Court said here, the dog didnt bark- nothing Congress did cut across regulating CO2- scientific uncertainty is not an automatic argument for no action. President cant be going in the opposite direction as Congress (inaction versus action, Brown v. Williamson). C. Congressional Oversight 19

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1. Fire Alarms and Police Patrols: Fire alarms depend on constituents. Alert Congress to what is happening. Notice and comment puts constituents in process- genius of the APA and agency process. How Congress triggers oversight. Police Patrol. Hearings (form of harassment?) and subpoenas- executive does not fold in the face of a subpoena. When ignored they hold person in contempt- but need executive to enforce it. (Harriet Meyers, etc). Judge is a good candidate to assess validity of executive privilege. 2. Legislative Veto: INS v. Chadha: legislative vetos ruled unconstitutional, on basis of legislative process (bicameralism and presentment). Congress liked it- allowed them to hold sway over agency policies. Chadha is allowed to stay in US, follows agency policy and Attorney General says he can stay. Congress says no and invokes legislative veto- and the Court upholds the agency decision. Says Congress cannot act without president, or by just one house, or just one committee. Undermines constitution. Legislative process is deliberately burdensome. Legislative veto monkeys with checks and balances. Legislative veto is cheap and easy way around. LV is bad because it prioritizes current Congress instead of enacting Congressoverly broad delegations allow for sloppy legislation. LV is good: two house kind is an electoral check on agencies. Alternative is big fat lawmaking president. Check on executive action. Dig behind formalism to see why court is annoyed here. Problem with legislative veto is that there is no check on authority that Congress is checking. Check on agency power is notice and comment process. Chadha had a lot of process- court likes that- process is a check and balance thing. One house or one committee is not enough political capital to override an agency decision. Dissent says this is a too late in the day argument. Framers envisioned a country where congress and the president got together to make policy- as soon as you have a 4th branch all bets are off. Dynamic interpretation- originalismconstitution is interpreted according to original language, as opposed to what constitution is meant to do (purposivism also). No one branch has the final say. 3. Control of Agency Officials: Can slash budgets, amend organic statute, house can impeach and senate can remove any civil officer of the US. Bowsher. Congress cannot delegate to a subset of itself any executive functions. Congress would rather give power to an independent agency than an executive branch agency. 4. Budget and Appropriations: Power to manage budget and deficit is really important. Congress has plenary (review de novo) power to determine how money is spent. Uses spending control to influence 20

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executive branch. Agencies need Congress to act affirmatively to get money. Annual budgets keep Congress in the game. Committee reports give directives to agencies on how to spend money. Will include restriction measures. D. Presidential Involvement 1. Regulatory Review a. Executive Order 12866 as amended: requires agenda of individual agencies at the beginning of the year- see what entire regulatory government is proposing. OIRA circulates plans to other agencies. OIRA- part of presidents office- has OMB under it- multi-tiered bureaucracy. Mechanism for inter-agency communication. Allows for changes to get made- cost benefit analysis included. Regulations need to be effective. Enhances accountability by attaching priorities to presidential preferences. Trace agencies back to executive branch- not a headless 4th branch anymore. Coordination, efficiency, accountability- now we know who to blame. Planning mechanism applies to exec and ind. agencies. Regulatory reviews only apply to exec. Branch agencies. Has to review all actions over $100 million. b. View from the White House: President can fire the agency head if he doesnt like his/her policy decisions. Efficacy and accountability. President is one person who can act with dispatch. Without WH we lose measure of coordination and attention to costs that affect overall sensibility of regulatory policies. c. Prompt Letters: Proactive- offer suggestions to spur agency into action. Credit claiming and blame shifting. Presidential directive for agencies to follow. d. Return Letters: tell agency that executive has a better idea the agency should consider. 2. Statutory Interpretation: FDA v. Brown & Williamson: Clintons ideanew tobacco policy. Policy came first, then went statute shopping. WH wanted to own this issue. Complicated politics- thought people were behind them. But Congress didnt miss this issue, passed a lot of tobacco legislation, saying it was illegal to ban it. Clinton Administration just wanted to keep kids from starting. FDA has lots of authority over foods and drugs, so what is the definition of a drug? In the strictest sense, nicotine is a drug so the FDA could be in charge. Actual words of statute. Instead of starting with good textualism, court leap frogs over and moves to canons of construction21

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determine Congress has already spoken to precise issue and has precluded FDA from regulating tobacco- the dog didnt bark. President v. Court. FDA has already admitted cigarettes are not safe. So they would have to ban them. Very reason for regulating undercuts idea that they can be regulated. FDA argues that taking cigarettes off the market would be more dangerous- black market. Statute however literally says every product, cannot select statutory constructions that violate statutes. Even if the argument is sensible the agency cannot adopt it. Court is reluctant to give agency power. Presidents dont get to do whatever they want. Statutes have limits. Legislation giving the FDA power was never passed, therefore, they dont have that power. WH has to be cognizant of other branches. Anti Chevron canon- decisions of political and economic significance are not entitled to deference. When Congress registers a different preference, agency cannot push policy in its own direction. Dissent dispatches with slippery slope argument- absurd results- no good textualist will end up with an absurd result. Drugs obviously refer to chemicals that affect the structure of the body. Wouldnt Congress want a sensible construction of the statute? But Congress wasnt inactive in area, so cannot assume acquiescence. Court- consistent theme- makes sure that control in regulatory state roughly comports with checks and balances. Accountability is not enough. 3. Control of Agency Officials: Congress cannot remove executive officials. Separation of powers. President is on the scene, has unlimited authority- constitutional powers are to make sure that laws are faithfully executed. If president doesnt have absolute authority over agency head then they really are a headless fourth branch. Independent agencies are relatively immune to political influence. Occurred during a time when president couldnt prevent their creation- needed agency to exist more than control was needed. But president has to be able to run his government his way. So when agency heads get fired, language gets dressed up in family reasonsdoesnt have to be humiliating. President has right to keep people in office who agree with his policies. No worries, dude. You guys arent annoying drunks. Plus, I have no one to blame but myself for not drinking last night. Im glad everyone got home safe. The only person I was concerned for last night was carlysisle.

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