Chapter 6 - Access to Judicial Review

1. Chapter 6 - Access to Judicial Review Part III

2. Problems of Timing • Doctrine of Finality • Doctrine of Exhaustion • Doctrine of Ripeness

3. Is There a Final Agency Action? • APA - 5 USC 704 • Similar to the rules on appealing orders by trial judges • Bennett v. Spear, 520 U.S. 154, 177-178 (1997) • It must be the consummation of the agency process • It must affect legal rights or have legal consequences

4. Federal Trade Commn. v. Standard Oil Co. of California, 449 U.S. 232 (1980) • FTC finds that Standard Oil is engaging in anticompetitive practices • Standard wants to appeal this • Can be used in private antitrust actions • Court says this alone does not have legal consequences • Standard must wait until the agency brings an enforcement action

5. National Automatic Laundry and Cleaning Council v. Shultz, 443 F.2d 689 (D.C. Cir. 1971) • Agency opinion letters - are they just restating the law, or do they change substantive rights? • Who are they final for? • This was to an association explaining how the agency would interpret a new law • Detailed explanation • From the secretary's office • Not based on individualized facts • In this case, the court found that the opinion was sufficiently specific and from a high enough level to affect the plaintiff's rights. • Should this have been a rule?

6. Taylor-Callahan-Coleman Counties Dist. Adult Probation Dept. v. Dole, 948 F.2d 953 (5th Cir. 1991) • This is a classic question - even if an opinion is final action as to the requestor, does it apply to others? • The opinion was to an individual party, based on that party's specific facts. • These are like IRS letter rulings and OIG opinions • The plaintiff was a third party who wanted to challenge the opinion as it would be applied to it. • The court found that this was not a final agency action, at least as to other parties.

7. Franklin v. Massachusetts, 505 U.S. 788 (1992) • MA wants to contest the method the Department of Commerce used to correct the census numbers • Why does this matter? • The President is charged with determining the final count, and Congress does the reallocation of representatives • The court found that the report from Commerce was only a recommendation to the President • Still an issue: who do you count?

8. Western Ill. Home Health Care, Inc. v. Herman, 150 F.3d 659 (7th Cir. 1998) • This was an opinion letter to two specific parties about whether they were subject to the joint employer doctrine • The letter said they were, and that they were now on notice so they would be subject to the penalties for a willful violation • The court found this was a final agency action as to the parties because it required an immediate change in behavior • This was influenced by the harsh results

9. Finality Wrap-up • Is the agency action directed to your client? • If not, what is your argument as to why it affects your client’s interests? • Is it complete, or an intermediate action? • Does it have legal consequences, i.e., will it require your client to change its behavior? • Does it require an immediate change?

10. Exhaustion of Administrative Remedies

11. Exhaustion of Administrative Remedies • Does the plaintiff have to go through the agency process before going to court? • Does the plaintiff have to present the same issues to the agency as will be challenged later in court? • This is a source of significant malpractice • Some of the Katrina levee cases were dismissed because the plaintiffs did not exhaust their remedies before filing suit.

12. APA - 5 U.S.C. § 704 • . . . Except as otherwise expressly required by statute, agency action otherwise final is final for purposes of this section whether or not there has been presented or determined an application for a declaratory order, for any form of reconsideration, or, unless the agency otherwise requires by rule and provides that the action meanwhile is inoperative, for an appeal to superior agency authority. • Can the agency enforce an order and still require exhaustion of agency appeals process? • Why would this be logically inconsistent? • (There is a common law exhaustion discussed later for non-APA cases.)

13. Is Exhaustion Required by Statute or Regulation? • The key question is whether the enabling act or an agency regulation requires exhaustion • If exhaustion is not required, then the party may go to court directly • However, if there is an agency process available, and you lose in court, you may have waived your agency appeal • Does the rule have to say exhaustion, or is it implied by having the process?

14. Example: HUD Regulations • HUD regulations allow, but do not require that an administrative appeal be filed • The granting of the appeal is discretionary with the secretary • The ruling of the ALJ becomes final in 30 days and is not stayed by a request for a hearing • Must you request an administrative appeal before going to court? • Remember 704

15. Exceptions to Common Law Exhaustion • Will requiring exhaustion prevent the court from properly reviewing the action? • Is the enforcement proceeding and will the the plaintiff suffer irreparable harm? • Can the agency process provide the requested relief? • Is the agency so biased or prejudiced that it cannot give a fair review?

16. Common Law Exhaustion: Portela-Gonzalez, 109 F.3d 74 (1st Cir. 1997) • Plaintiff is fired from a civilian Navy job • The APA does not apply by statute • Plaintiff appeals through 3 levels, but skips last level. • Firing is in force during appeal • What is the common law of exhaustion? • Is the APA narrower? • Do you have a final ruling if there is agency process left? • Just knowing that you are going to lose through the agency process is not enough • You have to show that the agency is biased or prejudiced (which is nearly impossible)

17. What if You Screw Up Your Administrative Appeal? • Assume that a person tried to exhaust the administrative appeals, but makes a procedural error such as missing a deadline, and the appeal is dismissed by the agency • Since there is no further process available at the agency, has he exhausted the agency remedies? • Has he gotten a final judgment from the agency on the merits? • Can you go to court without a final ruling from the agency? • Can you get to the Supreme Court in an Article III case if you screw up the appeal to the Circuit Court?

18. Administrative Issue Exhaustion • Must each issue that will be appealed to the courts be raised at the agency level? • What about in a regular trial: If you do not present an issue to the trial court - other than a jurisdictional issue - can you raise it at the first time on appeal? • What if you raise some issues with the agency, but not others - can you then appeal the ones you raised?

19. Sims v. Apfel, 530 U.S. 103 (2000) • Social Security disability benefits • The court held that the general rule is that plaintiffs who are subject to exhaustion of remedies must also present the issues they want to appeal to the agency • In the specific case, the court found that the special nature of SS mitigated against preclusion • Informal, and applicants seldom have counsel

20. Issue Exhaustion in Rulemaking • When do parties have a chance to object to provisions in a rulemaking? • Should they be required to make their objections during the comment period if they plan to challenge the rule later in court? • Is this analogous to an administrative appeal of an order? • What if the party did not raise the issue in a comment, but someone else did?

21. Ripeness • "The problem is best seen in a twofold aspect, requiring us to evaluate both the fitness of the issues for judicial decision and the hardship to the parties of withholding court consideration." • If the case is not ripe, you do not have a case and controversy • Ripeness is not codified in the APA, so it remains a jurisprudential doctrine • Ripeness is jurisdictional, so it can be raised at any time

22. Was Abbott "Ripe"? • In a facial challenge, the court does not need to see how the rule is applied • The court must also find that this is a final agency action • In this case, the rule required the product labels to be changed without further agency action • What is the impact of this regulation? • What is the risk of enforcement?

23. Pre and Post Enforcement Review • While review is favored, there is no right to review before the agency brings an enforcement actions • Plaintiffs asked for an injunction • They claimed they could not risk enforcement • An injunction prevents the agency from acting • Prevents important health and safety measures • Enmeshes the court in agency policy making

24. What are the Equitable Factors? • Since there is no right to pre-enforcement review, the plaintiff must show the court an equitable basis for granting review, which resembles the factors for granting an injunction • Is there an immediate effect of the agency action on the plaintiff's activities? • What is the risk of waiting for enforcement? • Does the court have enough information to determine the issue? • What are the special factors in the drug business?

25. Abbott Rule • Where the legal issue presented is fit for judicial resolution, and where a regulation requires an immediate and significant change in the plaintiffs’ conduct of their affairs with serious penalties attached to noncompliance, access to the courts under the [APA] must be permitted, absent a statutory bar or some other unusual circumstance. . .

26. Toilet Goods Assn. v. Gardner, 387 U.S. 158 (1967) • Companion case to Abbott • FDA promulgated a rule allowing them to inspect toilet good manufacturers to assure compliance with FDA regulations • How is a rule allowing inspections different from the rule in Abbott? • How are the equities different?

27. Example: EPA Smoke Spotters • The “credible evidence” rule allowed visual observation of smoke from a smokestack to be used as evidence that a person was violating its Clean Air Act requirements • Plaintiffs contest the action, saying it was beyond agency authority • Is this more like Toilet Goods or Abbott Labs? • Do plaintiffs have to change their behavior?

28. Was the Dispute Ripe in National Automatic Laundry? • The court found that the dispute in National Automatic Laundry was ripe because the opinion included detailed factual hypotheticals on the application of the doctrine in different situations • This gave the court the necessary factual information to review the application • Without this detail, the court would have required the plaintiff to wait for enforcement so there would be facts to evaluate

29. What about Compliance Orders? • An order to a specific party to obey the law • Based on the agency's view that the party is not in compliance with the law • Not self-enforcing - the agency must bring a separate enforcement action to force compliance • Does this look like Standard Oil? • Is this an appealable final action? Is it ripe?

30. Sackett v. U.S. EPA, 132 S. Ct. 1367 (2012) • (Not in the book) • Are EPA Clean Water Act compliance orders final, appealable orders? • These differ from the usual compliance order in that the EPA starts the penalty clock from the issuance of the compliance order. Thus there is an ever increasing penalty for delay in complying. • How would this change your analysis?

31. What if You Benefit from a Policy that is Being Changed? • FDA regulates contamination in foods • These are impossible to completely remove • The agency issues allowable (action) levels • You represent consumers who believe that the new (higher) action levels are dangerous • Is the action ripe as to your claim? • Can it get riper? • What about manufacturers who thinks the level is too low? • How are they different from consumers?

32. What if the Agency Changes a Permit Process to Your Detriment? • The NRC says it is loosening up the permit process for dumping low level waste • Is this ripe? • What has to happen before any waste is dumped under this rule? • What if the forest service loosens up the permit process for clear cutting, but there must be a timber sale with public input before the timber can be cut?

33. Ripeness Recap • Ripeness is the other side of exhaustion of agency remedies • Enforcement actions, permits, and other affirmative agency actions against your client • If you have done everything the agency requires, then you exhausted agency remedies • Your case is ripe

34. When Can You Go to Court Without Exhausting Agency Actions?

35. The agency action is unconstitutional or exceeds the agency's legal authority • Rulemaking - Facial Challenge • You have to convince the court that the rule does not have a legal application • You have to convince the court that your client will suffer significant harm if it must wait for enforcement • If you fail, then you have to wait until the agency acts against your client • Agency enforcement actions let you go for an injunction or other attack on the agency authority

36. Impossibility of Agency Remedy • The agency does not offer the remedy you seek • You want money damages and the agency remedies only offer that the agency will stop enforcement actions • Congress can require you to still exhaust your agency remedy • The agency is biased against your client • Just showing that you are going to lose is not enough

37. Primary Jurisdiction • This is related to "Committed To Agency Discretion" • In these disputes there is a issue which meets the standard for judicial review • The primary jurisdiction question is whether the courts should let the agency resolve the problem first • This is important when national uniformity is important, such as automobile emissions standards • The court gives the agency the chance to rule for the country before hearing an individual dispute • Often resolves the dispute, so no judicial remedy is necessary

38. End of Chapter 6