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Is Your Claim Ready for Prime Time?

Is Your Claim Ready for Prime Time?. Ripeness Finality Exhaustion. Ripeness. Ripeness, finality, and exhaustion are hard to separate in many cases Ripeness is whether it is the appropriate time for the court to review the claim APA The APA is silent on ripeness and exhaustion

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Is Your Claim Ready for Prime Time?

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  1. Is Your Claim Ready for Prime Time? • Ripeness • Finality • Exhaustion

  2. Ripeness • Ripeness, finality, and exhaustion are hard to separate in many cases • Ripeness is whether it is the appropriate time for the court to review the claim • APA • The APA is silent on ripeness and exhaustion • However, APA 704 only authorizes the review of final agency actions

  3. Instant Ripeness • The agency has brought an enforcement action against your client • The agency has promulgated an unconstitutional regulation

  4. CBS v. U.S., 316 U.S. 407 (1942) • FCC issues a regulation restricting the network exclusivity provisions in affiliate contracts with radio stations • CBS says that this will cause the affiliates to demand different terms in their contracts, and thus the dispute is ripe because they are harmed • The FCC says it will not be ripe until there is an enforcement action

  5. Is the Regulation Ready for Review? • The FCC says it is just policy, and no more reviewable than a press release • Think about this in terms of the modern cases • The court finds that it is final and that it is affects the behavior of the regulated party • What would the affiliate station lawyer say about the reg? • It is self-enforcing in that the parties must change their behavior or risk legal action

  6. Frozen Foods Express v. US, 351 US 40 (1956) • The Court found that a 71 page report detailing the ICC's interpretation of a narrow statutory provision was reviewable. • This was despite the agency arguing that the interpretation was not binding • Remember, however, that getting the right to stay in court is not the same as winning. • This is also a legal question, which the courts are more likely to review

  7. Abbot Labs v. Gardner • What did the statute require? • Generic names had to be on labels and other printed material • What did the FDA require through a regulation? • FDA promulgated a reg that required that the generic name of a drug be used every time the brand name was • This is facial challenge

  8. Why did Abbot and others want pre-enforcement judicial review? • Compliance would be very costly, but they could not risk the enforcement penalty. • Abbot claimed great hardship if it had to choose between complying and getting nailed for a violation • Think about relabeling stuff in inventory, and how much stuff you have to thow out because it expires while you are working out the new label

  9. What did plaintiffs argue was wrong with the regulation? • Overstepped agency authority • Why did the FDA claim the action was not ripe? • FDA claimed it was not ripe because it had not been applied to any given product

  10. What is the first question in a ripeness analysis? • First question is always - does the enabling act limit pre-enforcement review?

  11. What is the test? • What is the fitness of the issue for review? • What is the harm from not doing pre-enforcement review? • Is this a question of law or fact? • Does it depend on agency discretion?

  12. Does defendant have a significant injury? • Must the petitioner make significant changes in its behavior or risk severe penalties? • Is there an alternative means of review - say through an agency process?

  13. Toilet Goods v. Gardner • FDA required inspector access to the plants as a condition of certification of the safety of the agents in the product

  14. How was the injury requirement different in this case and Abbott? • In this case the court said the injury requirement was not met - what would it cost to let the inspector in? • What is the equitable problem with defendant's complaint? • More to the point - why would you want to exclude the inspector?

  15. Gardner v. Toilet Goods • Companion case • Did the agency exceed its authority in a regulation establishing definitions for food additives? • This is like Abbott

  16. Policy Implications • How does expanding pre-enforcement review interfere with agency practice? • Is it better for regulated parties to be allowed pre-enforcement review? • What is the downside of post-enforcement review?

  17. Statutory Limits • Congress can encourage pre-enforcement review by requiring that challenges to discretionary judgment in making a reg be brought within 60-90 days after the order is final • Can you attack the reg later? • If the agency brings an enforcement action, you can challenge the then • You can ask for a new or changed reg and appeal the denial

  18. What if Your Client Did not Know About the Reg? • Just not knowing is not enough • Must show that you client had a good reason for not knowing or that the agency blocked his efforts to get into court • What if the agency changed the definitional section years later, make all of the reg apply to your client?

  19. High or Low Point – National Automatic Laundry v. Shultz, 443 F2d 689 (1971) • The court allowed the review of an advisory letter

  20. Why Does Hardship Matter? • If the matter is otherwise reviewable, why does it matter if there is hardship? • Shouldn’t the court go ahead and review the agency action when it is ready, without regard to hardship?

  21. NPHA v. Interior, 538 US 803 (2003) • Court backs down from National Automatic Lanudry • Finds the hardship is important in judicial economy • Finds that making the defendant wait until there is an enforcement action allows the agency to add more factual material to the record, facilitating review

  22. Finality • What are the requirements for a final order under sec. 704 of the APA? • 1) the action must mark the consummation of the agency's decisionmaking process - it must not be tentative or interlocutory • 2) it must be one by which legal rights and obligations have been determined or from which legal consequences will flow

  23. How does the court distinguish finality from exhaustion? • You have nothing left to do, but the agency is not finished • Court says 704 specifically allows intermediate agency actions to be reviewed when the final action is reviewed.

  24. FTC v. Standard Oil of California (1980) – (not in the book) • FTC issued a complaint saying it had reason to believe that the oil companies were engaging in unlawful competition • Why does Socal want to contest this intermediate finding? • United States Supreme Court said it had to be a final action or otherwise reviewable under 704

  25. Western Illinois Home Health Care v. Herman, 150 F3rd 659 (1998) • Asst. District Director sent a letter to a regulated party – probably an administrative order • The party moved for review • Was it final? • Not tentative or interlocutory • Established legal duties with penalties • Thus was final for review purposes

  26. What is the Catch 22 in Franklin v. MA? • What if the agency action must be approved by the president? • The census is only a recommendation by the agency to the president, so it is not final • The order is not final until approved • The president's decision cannot reviewed under the APA because he is not an agency

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