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Administrative Law Review (ALR)

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  • Immigration law does lag behind in the advancement of public law, but not in all respects. While immigration law is idiosyncratic in many ways, this Article finds immigration law in the administrative law mainstream when it comes to its troubles with nonlegislative rules (sometimes called guidance documents). There are concerns throughout administrative law that agencies use such rules to bind regulated parties practically, even if not legally, without the procedural protections of notice and comment.
    This Article analyzes immigration troubles with nonlegislative rules and makes three main contributions. First, it casts new light on the negative effects of guidance documents by viewing administrative law through the lens of immigration law. In immigration law, the cons of guidance documents play out in the context of some of life’s most fundamental questions: where and with whom to live and to work. Second, by showing how administrative law manifests in immigration law, this Article concludes that immigration law’s troubles cannot be divorced from the mainstream administrative law debate over nonlegislative rules. Third, this Article also evaluates a procedure new to immigration law: the draft memorandum for comment. Through the draft memorandum for comment procedure, the public may comment on draft guidance documents, but is not afforded the full protections of notice-and-comment rulemaking. While the new procedure is a pragmatic and positive step for immigration law, this Article highlights that nonlegislative rules are not the only administrative tool available and argues for greater priority for notice-and-comment rulemaking in immigration law. 2012/10/16 - 11:29
  • Immigration law does lag behind in the advancement of public law, but not in all respects. While immigration law is idiosyncratic in many ways, this Article finds immigration law in the administrative law mainstream when it comes to its troubles with nonlegislative rules (sometimes called guidance documents). There are concerns throughout administrative law that agencies use such rules to bind regulated parties practically, even if not legally, without the procedural protections of notice and comment.
    This Article analyzes immigration troubles with nonlegislative rules and makes three main contributions. First, it casts new light on the negative effects of guidance documents by viewing administrative law through the lens of immigration law. In immigration law, the cons of guidance documents play out in the context of some of life’s most fundamental questions: where and with whom to live and to work. Second, by showing how administrative law manifests in immigration law, this Article concludes that immigration law’s troubles cannot be divorced from the mainstream administrative law debate over nonlegislative rules. Third, this Article also evaluates a procedure new to immigration law: the draft memorandum for comment. Through the draft memorandum for comment procedure, the public may comment on draft guidance documents, but is not afforded the full protections of notice-and-comment rulemaking. While the new procedure is a pragmatic and positive step for immigration law, this Article highlights that nonlegislative rules are not the only administrative tool available and argues for greater priority for notice-and-comment rulemaking in immigration law. 2012/10/16 - 11:29
  • So, today, I am going to speak to you about justiciability—what government decisions can be subject to review by the courts. In particular, the role of Canadian courts in reviewing the power exercised by the Executive Branch of government. And I am very confident in the accuracy of my remarks today because I have cribbed shamelessly from Professor [David] Mullan’s work.
    The principle of the Judiciary having the power to review the actions of the Executive or Legislative Branches of government is well established in American, as well as Canadian, law. Where I’ll start is with Marbury v. Madison. As you all know better than I do, there, in 1803, your Supreme Court established the basis for the exercise of judicial review in the United States. Chief Justice Marshall held that your courts could oversee and review the actions of other branches of the government and in doing so declare statutes unconstitutional.
    Chief Justice Marshall also dealt with the question of justiciability. He wrote that “the question [of] whether the legality of an act of the head of a department be examinable in a court of justice or not, must always depend on the nature of that act.” He indicated that for some acts, which are political in nature and do not concern individual rights, that the decision of the Executive is conclusive and, in his words “can never be examinable by the Courts.” While for other acts, again in his words, “where a specific duty is assigned by law, and individual rights depend upon the performance of that duty . . . the individual who considers himself injured, has a right to resort to the laws of his country for a remedy.”
    There are interesting parallels between the American approach and the Canadian approach to justiciability, which I hope will become clear as I further discuss the Canadian attitude towards the subject. 2012/03/06 - 23:27
  • At the Solicitor’s Indian Law Practitioner’s Conference on March 3, 2011, Secretary of the Interior Ken Salazar reiterated his desire for a “legislative fix” for the Supreme Court opinion in Carcieri v. Salazar. In Carcieri, the Court interpreted the Indian Reorganization Act of 1934 (IRA) to effectuate a perverse distinction between Indian tribes under federal jurisdiction in June 1934 and Indian tribes whose relationship with the federal government was not established until after June 1934. Applying step one of the doctrine articulated in Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., which inquires “whether Congress has directly spoken to the precise question at issue,” the majority opinion of Justice Thomas declared that “the term ‘now under Federal jurisdiction’ in [the IRA] unambiguously refers to those tribes that were under the federal jurisdiction of the United States when the IRA was enacted in 1934.” As a result, § 5 of the IRA, codified at 25 U.S.C. § 465, only authorizes the Secretary of the Interior to “provid[e] land for Indians” whose tribe fits within the IRA’s definition of an “Indian,” codified at 25 U.S.C. § 479: “The term ‘Indian’ as used in this Act shall include all persons of Indian descent who are members of any recognized Indian tribe now under Federal jurisdiction.” A cloud now hangs over any land-into-trust transactions that the Secretary has made for Indian tribes which were not federally recognized until after 1934, and which are now unable to prove that their “post-1934 recognition [was granted] on grounds that implied a 1934 relationship between the tribe and Federal Government that could be described as jurisdictional.”
    The cries for a legislative fix began to pour out as soon as the Carcieri decision was delivered. A slew of proposed reform bills have made their way into the public discussion of federal land-into-trust policies. And yet, because the Department of the Interior’s land-into-trust acquisitions for Indian tribes are “not without passionate opposition,” Congress is wading slowly into this potentially explosive controversy. While Congress hesitates to fix Carcieri, the Secretary continues to contemplate whether to promulgate a new regulation to mitigate the decision’s harshness. Unfortunately, “a proposed regulation being considered by the Obama administration . . . is generally disfavored by tribal leadership, owing largely to the perception that a regulatory fix will delay, or even halt, progress towards a legislative remedy, which is regarded as a more permanent measure.”
    Unlike older proposals, which presume the need for new legislation or regulations to fix Carcieri, this Recent Development argues that existing statutes and regulations already authorize the Secretary to overcome the effects of Carcieri. Even though the IRA no longer authorizes the Secretary to take land into trust for Indian tribes not under federal jurisdiction in June 1934, the Secretary’s fee-into-trust regulations under 25 C.F.R. Part 151 rest on several other pillars of statutory authority. 25 U.S.C. §§ 2 and 9 are the strongest alternative sources of statutory authority under which the Secretary may claim delegated authority for fee-into-trust acquisitions on behalf of Indian tribes not under federal jurisdiction in June 1934. The Supreme Court has already recognized that 25 U.S.C. §§ 2 and 9 vest the Secretary with the power to
    formulat[e] policy and [to make] rules to fill any gap left, implicitly or explicitly, by Congress. In the area of Indian affairs, the Executive has long been empowered to promulgate rules and policies, and the power has been given explicitly to the Secretary and his delegates at the [Bureau of Indian Affairs (BIA)].
    Under the Chevron doctrine, 25 U.S.C. §§ 2 and 9 constitute an explicit delegation of authority to the Secretary to promulgate “legislative regulations [which] are given controlling weight unless they are arbitrary, capricious, or manifestly contrary to the statute.” Such legislative regulations are thus entitled to the maximum amount of Chevron deference.
    25 U.S.C. §§ 2 and 9 also form the statutory basis for 25 C.F.R. Part 83, which codifies the federal administrative process for the acknowledgment of Indian tribes previously lacking federal recognition. Because 25 C.F.R. § 83.12(a) entitles acknowledged tribes “the privileges and immunities available to other federally recognized historic tribes,” and renders them “eligible for the services and benefits from the Federal government that are available to other federally recognized tribes,” federal acknowledgment under 25 C.F.R. Part 83 ought to include the benefits available to tribes under 25 C.F.R. Part 151. Accordingly, this Recent Development urges that the ruling in Carcieri does not prohibit the Secretary from asserting that he has always held statutory authority under 25 U.S.C. §§ 2 and 9 to transfer land into trust for Indian tribes acknowledged under 25 C.F.R. Part 83. Although not every tribe federally recognized after 1934 was given status under 25 C.F.R. Part 83, the regulatory quick fix proposed in this paper would minimize the devastating consequences of Carcieri while a legislative fix stalls in Congress. 2012/03/06 - 23:27
  • Since the enactment of the Administrative Procedure Act (APA) in 1946, the technological landscape has changed dramatically while the basic framework for notice-and-comment rulemaking has largely gone unchanged. Federal regulators, looking to embrace the benefits of electronic rulemaking, face considerable ambiguity about how established, procedural legal requirements apply to the web. For example, does the APA permit agencies to require comments to be submitted online? Are agencies required to screen the content of public comments before they are placed on Are electronic dockets a legally sufficient means of preserving the rulemaking record? Many of these issues and others have been swirling around electronic rulemaking (e-Rulemaking) since its inception, and exist whether rulemaking is accomplished entirely on paper or using more electronic means. This Article focuses on the legal issues that present themselves entirely, or more prominently, when agencies engage in e-Rulemaking.
    Following a short background section on e-Rulemaking, Part I explains why updating the APA to address e-Rulemaking is unnecessary. Part II explores whether and how agencies should screen public comments before sharing them online and suggests a fundamental change to the way comments are posted on the biggest online rulemaking website, Part III analyzes the legal issues associated with using an electronic docket to compile the rulemaking record, finding that well-designed electronic dockets pose no significant legal risks but that the courts could probably do more to embrace electronic filing. Part IV shows that the most basic of federal requirements, the recordkeeping requirements of the Federal Records Act, apply to e-Rulemaking and suggests ways to ensure compliance. The Article concludes with a recap of the Article’s recommendations. 2012/03/06 - 23:27
  • For years, scholars have criticized the National Labor Relations Board’s (NLRB’s or Board’s) reliance on adjudication rather than rulemaking. The use of adjudication rather than rulemaking is problematic for the NLRB because of continued “policy oscillation”—frequent changes in agency policy between presidential appointments—in Board adjudications, which “sows disrespect for the agency.” Additionally, the NLRB’s sole use of adjudication precludes public participation, encourages fact‑specific policymaking, and fosters the problem of agency nonacquiescence. Scholars argue that by rulemaking, the NLRB could ameliorate the appearance of political bias, articulate clear precedents, and encourage public participation in policymaking.
    Despite the promise of clearer precedents and a more politically neutral appearance, the NLRB has largely refrained from notice‑and‑comment rulemaking. The NLRB claims that rulemaking procedures are too rigid for union policymaking, which must be quick to respond to specific fact patterns. This raises ossification of rulemaking issues, including problems posed by the Regulatory Flexibility Act (RFA) and the Congressional Review Acts (CRA), and the threat of judicial review. The threat of congressional intervention also influences the NLRB's decision to refrain from rulemaking.
    There has been renewed scholarship criticizing the NLRB’s avoidance of rulemaking and suggesting that the current Board is in a good position to begin rulemaking. Heeding scholars’ pleas, on December 22, 2010, the NLRB issued its first notice of proposed rulemaking since its only recent successful rule in 1989 defining bargaining units in healthcare facilities.
    In light of this renewed discussion about the benefits of rulemaking in the inherently political unionization context, this Comment will examine the recent and controversial representation election procedure rulemaking by the National Mediation Board (NMB)—the federal agency charged with overseeing labor relations in the railway and airline industries—as a point of comparison for the NLRB. Both agencies are bipartisan, independent, and facing the challenge of regulating in a highly political industry. In November 2009, the NMB proposed a change in the way it counts union election ballots. For seventy‑five years, the NMB’s election procedure required that a majority of all eligible voters in the voting class cast valid ballots in favor of representation to certify the union. Under the new rule, the NMB counts a majority of the valid ballots actually cast to determine if the class has elected a representative, a process which conforms to NLRB voting procedures. The NMB engaged in notice‑and‑comment rulemaking under the Administrative Procedure Act (APA), invited written submissions, and even held a public hearing on the issue before adopting the final rule on May 11, 2010.
    Controversy surrounded the rule change—the agency received almost 25,000 comments during its sixty‑day comment period and heard thirty‑one witnesses at the open hearing. Those who opposed the rule argued that the NMB rushed through the notice‑and‑comment process just before Delta, whose employees were traditionally anti-union, merged with Northwest, a traditionally pro‑union organization. Additionally, NMB Chairman Elizabeth Dougherty dissented from both the proposed and final rules, complaining that as the minority Republican member of the NMB she was given insufficient time to review the rule before its publication. Ultimately, the NMB successfully defended itself in the U.S. District Court for the District of Columbia against arguments that it lacked statutory support to alter election procedures, that the majority prejudged the issues involved, and that it lacked factual support to justify the policy change. Although the Air Transport Association (ATA) has appealed the decision, the rule has also withstood a Senate joint resolution vote to return to the old election procedures.
    Given the similarities between the NMB and the NLRB, the NMB’s successful rulemaking attempt demonstrates that the NLRB has the wherewithal to engage in notice‑and‑comment rulemaking, and it should look to the NMB’s procedures as a guideline for conducting rulemaking in the future. This Comment analyzes the predictive and instructive value of the NMB’s representation election procedure rulemaking for the NLRB. 2012/03/06 - 23:27
  • Hannah Bruesewitz was born on October 20, 1991. Her pediatrician administered doses of the [diphtheria, pertussis, and tetanus (DTP)] vaccine according to the Center for Disease Control’s recommended childhood immunization schedule. Within 24 hours of her April 1992 vaccination, Hannah started to experience seizures. She suffered over 100 seizures during the next month, and her doctors eventually diagnosed her with “residual seizure disorder” and “developmental delay.” Hannah, now a teenager, is still diagnosed with both conditions.
    In 1995, Hannah Bruesewitz’s parents embarked on an unsuccessful fifteen-year odyssey through the courts. Claiming that Hannah suffered vaccine-related injuries for which she was entitled to compensation, her parents litigated her case in every available forum, culminating in their recent loss in the U.S. Supreme Court. Hannah’s parents first sought compensation, as they were required to do, under the National Childhood Vaccine Injury Act (Vaccine Act), a pioneering no-fault federal tort reform law that took effect two decades ago. The statute, preempting state product liability laws, mandates that all claims for compensation for injuries caused by the vaccines routinely given in the United States must first be brought and litigated in the U.S. Court of Federal Claims, with the Secretary of Health and Human Services (HHS) as the respondent. After exhausting this remedy, petitioners have the option of filing a civil action in state or federal court, on grounds not foreclosed by the Vaccine Act, against the manufacturer of the vaccine or the healthcare provider who administered it.
    After the Court of Federal Claims rejected Hannah’s parents’ petition for compensation, her parents filed a civil tort suit against the vaccine’s manufacturer. The complaint was dismissed in large part by the District Court, which held that the Vaccine Act’s preemption clause forbids a claim against a vaccine manufacturer based upon a design defect, which was Hannah’s parents’ most promising remaining ground for relief. On February 22, 2011, the U.S. Supreme Court affirmed the dismissal.
    Hannah’s case highlights a number of problems with the National Vaccine Injury Compensation Program (Vaccine Program or Vaccine Compensation Program) today. The program represented a legislative compromise involving the major interest groups working in the vaccine area, including vaccine manufacturers, physicians’ groups, healthcare providers, federal health agencies, and parent groups advocating on behalf of injured children. Now that the Vaccine Program has been operating for more than twenty years, we can reach several broad conclusions about its successes and failures in satisfying the objectives of these groups and the objectives of the legislation. First, it appears that the Program has been largely successful in providing excellent liability protection for the pharmaceutical industry that makes vaccines, as well as for the doctors and other healthcare providers who administer them. These groups have been extremely concerned about possible tort liability for alleged vaccine-related injuries. While the Vaccine Act has not entirely eliminated all potential tort liability for manufacturers and healthcare providers, it has significantly minimized such liability, particularly after Bruesewitz v. Wyeth. The interests of the federal health agencies involved in the vaccine area, including HHS, the Centers for Disease Control (CDC), the Food and Drug Administration (FDA), and several other agencies, have also been largely satisfied by ensuring a relatively constant supply of vaccines to the public and ensuring that a high number of Americans receive inoculations. However, the objectives of parents’ groups and other advocates for children and adults who have suffered serious injuries after receiving vaccines have not been satisfied. For persons who may have been injured by vaccinations, the need for expeditious, generous, and predictable compensation remains unmet. Moreover, the process of adjudicating vaccine cases today is seriously flawed and in need of repair.
    In this Article, I will examine the process of litigating vaccine injury claims in the Vaccine Compensation Program. The adjudicative process has changed over time, such that the program has become much different today than it was when the law was first enacted. The Vaccine Compensation Program is also very different from the program that the Supreme Court described in Bruesewitz. In the Bruesewitz opinion, the Supreme Court characterized the underlying proceedings before the special masters as involving “informal adjudication” which moves quickly to final resolution within 240 days of filing “except for two limited exceptions.” The Court added: “Fast, informal adjudication is made possible by the Act’s Vaccine Injury Table . . . .”
    These descriptions of the Vaccine Program would have been largely accurate when the Act was initially passed, but they are substantially inaccurate in describing how the program actually operates today. The adjudications today are typically not informal at all, virtually no cases are concluded within the 240-day deadline, and the Vaccine Injury Table, which was originally a central feature of the Vaccine Act and a key innovative provision of the Act, has been significantly changed and narrowed over the years so that today it plays only a limited role in Vaccine Act cases.
    The Vaccine Injury Table lists the specific injuries that the court recognizes as presumptively caused by a vaccine and the specified time limit for the occurrence of the onset of each listed injury. When the Vaccine Program began, the overwhelming majority of cases that were litigated in the program involved the relatively simple question of whether the Table requirements had been satisfied. However, the situation today, and for the foreseeable future, is the reverse. The overwhelming majority of cases litigated in the program do not involve Table injuries. In these cases, petitioners are asserting only non-Table claims and must prove that the vaccine caused the injury.
    There are a number of reasons for this, but the most important is that the Table was substantially modified and narrowed by the Secretary of HHS in 1995 through an administrative rulemaking proceeding. In addition, the nine vaccines added to the Table by the Secretary of HHS since 1988 generally have no specified Table injuries at all or have the immediate onset of anaphylactic shock as the only listed Table injury.
    These changes in the Table have resulted in other major changes in the operation of the program. The cases are now substantially more difficult, complex, and time-consuming to litigate. The science is less clear, and the special masters have much more difficult and complex scientific disputes to resolve than they did for the relatively simpler Table injury claims. Both petitioners’ counsel and government counsel now need to search for experts in cutting-edge medical areas, such as genetics and neurology, where a great deal of uncertainty still exists. This contributes to a much more adversarial process than was supposed to exist in a program that was designed to be less adversarial.
    The present focus of the Vaccine Program on virtually all off-Table cases has also resulted in a series of recent decisions from the U.S. Court of Appeals for the Federal Circuit, purportedly clarifying but sometimes confusing the standards that the special masters are required to apply in deciding off-Table cases. A number of the Federal Circuit’s recent rulings have observed that Congress intended compensation to be provided generously, and that “close calls regarding causation are [to be] resolved in favor of injured claimants.” To the contrary, other recent Federal Circuit rulings have emphasized the importance of strict compliance with traditional tort standards of causation. Such inconsistencies have illuminated the need for clear standards.
    In this Article, I seek to evaluate what the Vaccine Compensation Program has accomplished and what it has not, assessing its evolution over the past two decades. I will also undertake a comparative assessment, evaluating the Vaccine Compensation Program in light of the experiences of other federal compensation programs that Congress has recently adopted. 2012/03/06 - 23:27
  • Congress has always had the power to overturn a specific regulation promulgated by an executive branch agency and, as the author of the underlying statutes under which the agencies regulate, has also always been able to amend those statutes so as to thwart entire lines of regulatory activity before they begin. But in 1996, Congress carved out for itself a shortcut path to regulatory oversight with the passage of the Congressional Review Act (CRA), and can now veto a regulation by passing a joint resolution rather than by passing a law. There is no question that Congress can now kill a regulation with relative ease, although it has only exercised that ability once in the fifteen years since the passage of the CRA. It remains ambiguous, however, whether Congress can use this new mechanism to, in effect, do to a regulation what the Russian nobles reputedly did to Rasputin—poison it, shoot it, stab it, and throw its weighted body into a river—that is, to veto not only the instant rule it objects to, but forever bar an agency from regulating in that area. From the point of view of the agency, the question is, “What kind of phoenix, if any, is allowed to rise from the ashes of a dead regulation?” This subject has, in our view, been surrounded by mystery and misinterpretations, and is the area we hope to clarify via this Article.
    A coherent and correct interpretation of the key clause in the CRA, which bars an agency from issuing a new rule that is “substantially the same” as one vetoed under the CRA, matters most generally as a verdict on the precise demarcation of the relative power of Congress and the Executive. It matters broadly for the administrative state, as all agencies puzzle out what danger they court by issuing a rule that Congress might veto (can they and their affected constituents be worse off for having awakened the sleeping giant than had they issued no rule at all?). And it matters most specifically for the U.S. Occupational Safety and Health Administration (OSHA), whose new Assistant Secretary is almost certainly concerned whether any attempt by the agency to regulate musculoskeletal disorders (“ergonomic” hazards) in any fashion would run afoul of the “substantially the same” prohibition in the CRA.
    The prohibition is a crucial component of the CRA, as without it the CRA is merely a reassertion of authority Congress always had, albeit with a streamlined process. But whereas prior to the CRA Congress would have had to pass a law invalidating a rule and specifically state exactly what the agency could not do to reissue it, Congress can now kill certain future rules semiautomatically and perhaps render them unenforceable in court. This judicial component is vital to an understanding of the “substantially the same” prohibition as a legal question, in addition to a political one: whereas Congress can choose whether to void a subsequent rule that is substantially similar to an earlier vetoed rule (either for violation of the “substantially the same” prohibition or on a new substantive basis), if a court rules that a reissued rule is in fact “substantially the same” it would be obligated to treat the new rule as void ab initio even if Congress had failed to enact a new veto.
    In this Article, we offer the most reasonable interpretation of the three murky words “substantially the same” in the CRA. Because neither Congress nor any reviewing court has yet been faced with the need to consider a reissued regulation for substantial similarity to a vetoed one, this is “uncharted legal territory.” The range of plausible interpretations runs the gamut from the least daunting to the most ominous (from the perspective of the agencies). To foreshadow the extreme cases briefly, it is conceivable that even a verbatim identical rule might not be “substantially similar” if scientific understanding of the hazard or the technology to control it had changed radically over time. At the other extreme, it is also conceivable that any subsequent attempt to regulate in any way whatsoever in the same broad topical area would be barred. We will show, however, that considering the legislative history of the CRA, the subsequent expressions of congressional intent issued during the one legislative veto of an agency rule to date, and the bedrock principles of good government in the administrative state, an interpretation of “substantially similar” much closer to the former than the latter end of this spectrum is most reasonable and correct. We conclude that the CRA permits an agency to reissue a rule that is very similar in content to a vetoed rule, so long as it produces a rule with a significantly more favorable balance of costs and benefits than the vetoed rule.
    We will assert that our interpretation of “substantially similar” is not only legally appropriate, but arises naturally when one grounds the interpretation in the broader context that motivated the passage of the CRA and that has come to dominate both legislative and executive branch oversight of the regulatory agencies: the insistence that regulations should generate benefits in excess of their costs. We assert that even if the hazards addressed match exactly those covered in the vetoed rule, if a reissued rule has a substantially different cost–benefit equation than the vetoed rule, then it cannot be regarded as “substantially similar” in the sense in which those words were (and also should have been) intended. 2012/03/06 - 23:27
  • For years now, courts and commentators have struggled to reconcile the presumption against preemption—the interpretive canon that presumes against federal incursion into areas of traditional state sovereignty—with the Court’s Chevron doctrine, which instructs courts to defer to reasonable agency interpretations of ambiguous federal statutes. Where Congress’s preemptive intent is ambiguous, should courts defer to agency interpretations under Chevron, or do preemption’s federalism implications demand a less deferential approach? Despite numerous opportunities, the Supreme Court has failed to clearly define the level of deference due to preemptive agency interpretations. In some cases the Court appears quite deferential and in others almost entirely nondeferential.
    Academic treatment of the Court’s jurisprudence has been rightly critical. The Court’s unpredictable approach sows uncertainty among regulated parties, the lower courts, and the agencies themselves. As alternatives to the Court’s current case-by-case approach, commentators have advocated a variety of more rule-like regimes: universal nondeference, universal Chevron deference, and, most commonly, universal Skidmore deference. Advocates of across-the-board nondeference point to the lack of political and procedural safeguards protecting states from agency-initiated preemption. Those advocating across-the-board Chevron deference, on the other hand, point to agencies’ technical expertise on preemption questions and the availability of the Mead doctrine as a screen to protect the values of federalism where agencies act other than with the force of law. Finally, a third set of commentators attempts to reconcile these competing approaches by adopting a middling standard of Skidmore deference based on the thoroughness and persuasiveness of an agency’s judgment in a particular case.
    Thus far, none of these approaches have tempted the Court. Instead, the Court continues to apply deference haphazardly from case to case with no clearly articulated reason for its variation. A close study of the cases, however, reveals both why the Court has been reluctant to adopt any of the proposed across-the-board standards of deference and what an appropriate framework for agency deference might look like. The Court’s inconsistent decisionmaking stems from its high regard for congressional intent when considering questions that implicate federalism. Chevron and the presumption against preemption provide conflicting indicia of congressional intent, and rather than universalize one principle at the expense of the other, the Court has applied deference selectively depending on its case-specific analysis of congressional intent. When the Court thinks it reasonable to presume delegation of preemptive authority, it is quite deferential to agency views. But, when it thinks congressional intent to delegate is unlikely, it accords little deference to preemptive agency interpretations.
    Critics of the Court’s Chevron–preemption jurisprudence correctly note its major flaw—its inconsistency—but they fail to recognize its purpose and benefits. By looking to congressional intent rather than universalizing a sometimes-inapplicable, across-the-board rule, the Court respects congressional intent where it intends to delegate preemptive authority, while protecting state sovereignty where it does not. Of course, the Court’s good intentions do not excuse the approach’s unpredictability. A superior approach would package the Court’s concern for state sovereignty and congressional intent into a predictable and easily administrable bright-line rule.
    The Court’s existing doctrinal distinction between express and implied preemption points to a possible solution. In express preemption cases, the Court does not need to enforce federalism values through the presumption against preemption because Congress has spoken clearly in favor of displacing state law. And if the scope of preemption is ambiguous, Chevron’s presumption of delegation through ambiguity to agency expertise is entirely reasonable. Agencies are quite competent to decide the proper scope of preemption once Congress has duly authorized it. On the other hand, where Congress has not spoken clearly through an express preemption clause, and the question is whether there is to be any preemption at all, Chevron’s rationale is particularly weak. Agencies are least competent when considering unbounded questions of federal–state power allocation, and Congress is unlikely to delegate authority of this sort.
    Given the waxing and waning force of Chevron’s rationale across cases, the Court should adopt a rule of variable deference that accords full Chevron-style deference to agency interpretations of ambiguously broad express preemption clauses and withholds deference altogether where Congress is silent regarding preemption. Such a rule, unlike any of the proposed across-the-board regimes, would recognize the factors that underlie the Court’s unpredictable case-by-case approach—respect for state sovereignty and congressional intent—while providing the rule-like certainty demanded by the Court’s critics. 2012/03/06 - 23:27
  • Providers of mortgage assistance relief services offer to help homeowners avoid foreclosure by negotiating with creditors on behalf of homeowners for loan modifications. Such providers charge a fee for these services, and have in the past often charged this fee upfront rather than after successful negotiations on the homeowner’s behalf.
    The FTC adopted a rule, pursuant to the 2009 Omnibus Appropriations Act and Credit Card Accountability Responsibility and Disclosure Act of 2009, that bars Mortgage Assistance Relief Services (MARS) providers from making false or misleading claims, institutes certain disclosure requirements relating to these services, and prohibits companies from charging fees upfront. This Recent Development argues that the FTC’s rule is a good first step in regulating the MARS industry, but that the FTC should have gone further and adopted regulations regarding the fees that MARS providers can charge. Specifically, the FTC should have restricted fees to fifteen percent of the savings that a borrower receives under a modification. 2011/10/05 - 00:04
  • On March 23, 2010, President Obama signed into law the ambitious Patient Protection and Affordable Care Act. While media attention focused largely on the sweeping changes the bill makes to the nation’s healthcare system, there was also a less-noticed rider to the bill, the Biologics Price Competition and Innovation Act of 2009 (Biosimilars Act). The Biosimilars Act grants the Food and Drug Administration (FDA) broad new authority to create an accelerated premarket approval pathway for generic competition to biologics in an attempt to drive biologic drug prices down and reduce the overall costs of health care.
    Traditionally, inventors of medical products such as drugs and devices obtain patent protection at the United States Patent and Trademark Office (USPTO) for a twenty-year exclusive term and simultaneously must seek FDA approval to market their invention and for a trademark for their brand name.
    Because of the complicated and thorough approval process the FDA conducts, it is often expensive and time-consuming for the initial innovator to bring a drug to market. Likewise, it is often prohibitively expensive for a generic follow-on company to bring an analogue to market, after patent protection has expired, through duplicative and costly reapproval of the innovator drug, and it would be unethical to subject further human subjects to unneeded clinical trials.
    To deal with these problems, in 1984 Congress enacted a law called the Price, Competition, and Patent Term Restoration Act, which is commonly referred to as the Hatch–Waxman Act. The Act allows generic follow-on drugs to seek accelerated approval by the FDA. In exchange, the law grants limited data exclusivity—and hence, often de facto market exclusivity—for the original brand-name innovator. The Act utilizes a preexisting compilation of all relevant drugs and their clinical indications, the Orange Book, to list generic analogues. Most importantly, Hatch–Waxman allows generic drug manufacturers to use the same FDA approval data as the brand-name manufacturers had in an abbreviated approval application (thus eliminating the need for duplicative human trials and reducing cost for generic manufacturers). The result has been a decrease in the cost of prescription drugs due to increased price competition after the expiration of the original drug’s patent term.
    By formulating the Hatch–Waxman Act broadly, Congress has given the FDA wide flexibility to regulate. It has mandated the use of guidance documents, a less costly and time-consuming form of regulating than formal or even informal rulemaking. This guidance mandate has the advantage of increased flexibility and a faster turnaround time than traditional notice-and-comment rulemaking. Nevertheless, if the FDA does not use that flexibility judiciously, the Biosimilars Act may not achieve actual reductions in the cost of prescription biological drugs or significantly affect the cost of health care.
    Part I of this Comment discusses the Hatch–Waxman amendments, analogous foreign biosimilars pathways, and the history of biologics approval. Part II discusses the new bill, compares the Hatch–Waxman pathway with the potential biosimilars pathway, and explores key differences between the two that could delay access to both innovator and generic drugs. Part III recommends using notice-and-comment procedures to establish product-class-specific guidance, while retaining flexibility within product classes for clinical requirements, and discourages the FDA from using two-sided biostatistical testing. 2011/10/05 - 00:04
  • The Department of Veterans Affairs (VA) administers a benefits system designed to be largely paternalistic. An important aspiration of this benefits scheme is that the process should be navigable by a veteran without savvy legal prowess or the assistance of an attorney. Although the regulations governing attorney involvement have changed, the intentions behind them have not: VA insists it must protect veterans from lawyers. Congress, however, is less skeptical of legal representation and has enacted statutes designed to encourage lawyers to take the cases of deserving veterans that might prove too difficult to win otherwise. As part of this congressionally mandated incentive structure, the Equal Access to Justice Act (EAJA) is available as a way for plaintiffs, through VA’s pockets, to pay the fees for lawyers who “win” against the government before the Court of Appeals for Veterans Claims (CAVC). The EAJA does not compensate attorneys for work done on the vast majority of veterans’ claims, which never reach the courts but are instead adjudicated at the agency level. There is, however, a separate compensation scheme to encourage attorney participation in the adjudication of VA benefits.
    To ensure lawyers were not discouraged from representing veterans at this first, crucial stage, Congress instituted a contingency fee system: an attorney who succeeds in gaining benefits can receive 20% of the veteran’s past-due benefits award directly from the Secretary of Veterans Affairs. This largely straightforward system has raised few problems for attorneys and veterans—in most cases VA simply parcels out 20% to the attorney and then hands over the rest to the veteran. However, there is a small but critical area of complexity involving veterans who for whatever reason will not receive the entirety of their award. In these cases, the question becomes whether attorneys are to receive 20% of the original award or 20% of the award after offset or withholding.
    For veterans who still receive some portion of their award, the answer is on the books. By statute, contingency fees are to be calculated from any past-due benefits awarded on the basis of the claim; “award” does not mean amount payable to the veteran but the actual award prior to any withholding. Snyder v. Nicholson held that award, in the “parlance of veterans’ benefits,” means “the amount stated as the award for success in pursuit of a claim for benefits.” Thus, even though a veteran might receive only a portion of his award, the attorney will still receive 20% of the original. This all flows from the idea that contingency fees in veterans’ benefits cases belong, by statute, to the attorney—and are thus payable directly from the benefits awarded on the claim, rather than being calculated from the actual payment to the veteran.
    This result reflects Congress’s decision to promote attorney participation in the VA process by guaranteeing enforcement of a 20% contingency fee agreement should the veteran win the claim. But VA regulations institute a caveat: a contingency fee agreement will be upheld only if the award of past-due benefits “results in a cash payment to a claimant . . . from which the fee may be deducted.” By using results, VA asserts that contingency fee agreements lose their statutory protection if the claimant, by virtue of indebtedness to the United States, does not receive any payment at all. If no “fund” of past-due benefits is created, VA maintains that there is no percentage of that fund to which an attorney can be entitled. VA further reasons that if the veteran, as assignor, has no right to receive payment of any part of the past-due benefits, then his attorney, as assignee, cannot have such a right either. This policy has troubling consequences: by protecting only the fee agreements of veterans not in debt to the government beyond their claims’ values, VA in fact ensures that some of the neediest veterans cannot retain legal representation. 2011/10/05 - 00:04
  • Administrative law’s complicated jurisprudence on standards of review is both a mess, in that it lacks coherence, and a distraction, in that courts affirm agencies slightly more than two-thirds of the time regardless of the doctrine deployed. It would be better to replace the jurisprudence with a reasonable agency standard. Such a standard would simplify and clarify administrative law, better describe what courts actually do when confronted with agency action, and better explain the judicial role in the administrative state. Rule by reasonableness is, moreover, the rule in negligence law, Fourth Amendment law, and arguably in financial regulation as well. Although a broad standard, reasonableness has created a tractable, predictable, and realistic jurisprudence in these areas; administrative law would do well to heed these lessons. 2011/10/05 - 00:04
  • In this essay, Pierce and Weiss report the results of a study of judicial review of agency interpretations of agency rules. Prior studies found that, while courts at all levels uphold about 70% of agency actions, the Supreme Court upholds 91% of agency interpretations of agency rules. Pierce and Weiss find that lower courts do not confer this type of “super-deference” on agency interpretations of agency rules. District courts and circuit courts uphold 76% of such agency actions. That is within the range of the findings of prior studies of judicial review of other types of agency actions and much lower than the rate at which the Supreme Court upholds agency interpretations of agency rules. Pierce and Weiss also find no evidence that judges are influenced by their political or ideological preferences when they review agency interpretations of agency rules. That finding is consistent with the findings of a prior study of judicial review of agency findings of fact, but it is inconsistent with the findings of several studies of judicial review of agency interpretations of agency-administered statutes and of judicial review of agency policy decisions. 2011/10/05 - 00:04
  • Separation of powers is one of least understood doctrines in U.S. law and politics. Underlying a great deal of separation of powers analysis is the conventional view that the United States Constitution requires a strict separation between the three branches of government, and that efforts within one branch to influence or control the exercise of another branch’s powers are illegitimate and should be rejected whenever possible. Although its simplicity might be appealing, this image of strict separation is inconsistent with both the Framers’ understanding of separation of powers and with the law as developed by the Supreme Court in the face of the explosive growth of the regulatory state over more than a century. This Article articulates an inductive understanding of separation of powers as practiced under the United States Constitution, arrived at by examining case law and actual practice, not deduced from general principles or an ideal conception of separation of powers. Although the Supreme Court’s recent decision in Free Enterprise Fund v. Public Company Accounting Oversight Board adverted to the Vesting Clause of Article II, the Vesting Clauses of the Constitution’s first three articles have not been particularly important to the resolution of actual disputes over the separation of powers. The Court does not decide separation of powers controversies by determining the nature of a power and then assigning it to the appropriate branch as specified in the Vesting Clauses. Using examples from across the spectrum of separation of powers controversies, this Article establishes that the basic principle of separation of powers under the United States Constitution involves strict enforcement of the Constitution’s structural and procedural requirements for action by each branch, but great flexibility and deference to Congress when ruling on whether a more general principle of separation of powers has been transgressed. 2011/10/05 - 00:04
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  • Under the Administrative Procedure Act (APA), administrative law judges (ALJs) are removable by the employing agency “only for good cause established and determined by the Merit Systems Protection Board.” The constitutionality of that sixty-four-year-old protection may now be questionable under the recent Supreme Court decision in Free Enterprise Fund v. Public Co. Accounting Oversight Board.
    The Sarbanes–Oxley Act (the Act) created the Public Company Accounting Oversight Board (PCAOB or Board) with extensive regulatory powers over the accounting industry. Board members are appointed by the Securities and Exchange Commission (SEC) and can be removed only “for good cause” by SEC members, who themselves can be removed by the President only “for cause.” In an opinion by Chief Justice Roberts, the Court (by a 5–4 vote) held that this double “for cause” protection created an unconstitutional legislative intrusion on the President’s power to remove officers—a violation of the constitutional separation of powers principle. To cure this defect, the Court excised the Board members’ “for cause” protection and declared that they would now be removable by the Commission at will.
    Justice Breyer’s dissent argued that the two “for cause” layers passed muster under a “functional” approach to separation of powers. He also reasoned that the job security and decisions of many high-ranking federal employees with double for cause protection—including all ALJs—were left “constitutionally at risk.” These nearly 1600 judges generally hear and decide a variety of cases which Congress thought significant enough to warrant formal hearings, and Justice Breyer questioned whether “every losing party before an ALJ now ha[s] grounds to appeal on the basis that the decision entered against him is unconstitutional?”
    This Recent Development argues that ALJs are fundamentally different from PCAOB members and should not be covered by the Free Enterprise rationale. Eliminating the adjudicatory independence conferred by the APA’s good cause provision would undermine the adjudicatory process by subjecting ALJs to agency pressure and possible retaliatory agency action for decisions perceived as unfavorable. 2011/08/02 - 14:59
  • Federal agencies love to publish guidance documents—those official “statement[s] of general applicability and future effect, other than [regulations]” that set forth “a policy on a statutory, regulatory, or technical issue or an interpretation of a statutory or regulatory issue.” They “come in a variety of formats and names, including interpretive memoranda, policy statements, guidances, manuals, circulars, memoranda, bulletins, advisories, and the like,” and some agencies may even offer guidance “in new and innovative formats, such as video or audio tapes, or interactive web-based software.”
    Scholars have repeatedly indicated that “[g]uidance documents greatly outnumber legislative rules” and are issued “in a volume dwarfing the [underlying] regulations.” Things were not always this way. Agencies formerly announced most positions through notice-and-comment rulemaking or adjudication, and have only more recently begun to rely on guidance documents.
    But agencies have some good reasons to issue large amounts of guidance. First, of course, many agency stakeholders “earnestly” seek it, for meaningful guidance “helps regulated entities comply with complicated regulations” and is essentially equivalent to free legal advice for parties confronted with complex legal requirements. This potentially reduces agencies’ burden of replying to repeated stakeholder requests for individual interpretations of particular regulations. As the D.C. Circuit long ago recognized, “businessmen engaged in forward planning may rightly call for” agency guidance in order “to permit optimum allocation of resources in the light of careful assessments of the alternatives.”
    Generalized agency interpretations and policies announced in guidance also support agency staff as they attempt to apply and enforce the law. This “contribute[s] to the discipline of staff action, its predictability and regularity,” and “[a]gency administration is aided when central officials can advise responsible bureaucrats” by supplying official agency positions on complicated regulatory issues.
    In addition, average “[c]itizens are better off if they can know about these instructions and rely on agency positions.” As Judge Richard Posner wrote for the Seventh Circuit, “Every governmental agency that enforces a less than crystalline statute must interpret the statute, and it does the public a favor if it announces the interpretation in advance of enforcement.”
    Moreover, the Administrative Procedure Act (APA), which governs federal agencies’ rulemaking procedures, exempts most guidance documents from the notice-and-comment process required for most regulations. Agencies can therefore “issue guidance more quickly than legislative rules, reducing the time that regulated parties are uncertain about their legal obligations.” Thus, “appropriate use of guidance documents allows agencies to avoid devoting scarce time and resources to unnecessary rulemaking” and clarification. Or, as summarized by the Office of Management and Budget (OMB), guidance, “used properly, can channel the discretion of agency employees, increase efficiency, and enhance fairness by providing the public clear notice of the line between permissible and impermissible conduct while ensuring equal treatment of similarly situated parties.” 2011/08/02 - 14:59
  • The phrase “bounty hunter,” for most people, conjures up images of gun fights with dangerous fugitives. For the truly geeky, “bounty hunter” will forever bring to mind the beloved character Boba Fett from Star Wars.However, Congress recently brought bounty hunting from a long time ago in a galaxy far, far away to the front and center of securities law enforcement.
    On July 21, 2010, President Obama signed into law the Dodd–Frank Wall Street Reform and Consumer Protection Act (Dodd–Frank, or the Act), the most sweeping overhaul of the nation’s financial regulatory system since the Great Depression. Among the Act’s hundreds of provisions is § 922. Section 922 significantly enhances the Securities and Exchange Commission’s (SEC’s) existing whistleblower bounty program, requiring that a person who reports any securities law violation to the SEC be paid between 10% and 30% of the monetary sanctions imposed upon the violator in any resulting SEC action in which the sanctions exceed one million dollars. The new bounty program is considerably more robust than the one it replaces. Previously, the whistleblower award was dispensed solely at the SEC’s discretion, was capped at 10% of the sanctions, and was available only for tips regarding insider trading. In addition to—or perhaps because of—these structural weaknesses, the former bounty program was rarely used in practice.
    After a review by the SEC’s Office of Inspector General revealed its infrequent utilization and problematic design and implementation, SEC Director of Enforcement Robert Khuzami stated that the SEC supported a wholesale congressional rewriting of the program. The SEC has certainly gotten what it wished for in § 922, which is likely to lead to a greater number of tips regarding securities law violations. In light of the accounting scandals at the turn of the millennium, the global financial crisis, and the Bernard Madoff debacle, a program that will provide the SEC with more information on illegal financial activities is certainly a positive development as a matter of general public policy.
    This is not to say, however, that § 922 has no drawbacks or unintended consequences. A greater number of tips to the SEC is not equivalent to greater compliance with the federal securities laws. As several early commentators have noted, the enhanced bounty program drastically alters the incentive structure that operates on persons who become aware of potential securities law violations. While in one sense this merely states the obvious intent of § 922, in another sense it begins to reveal the more problematic aspects of the new bounty program. The financial incentive of a large bounty encourages those who become aware of a securities law violation at a company to turn first to the regulators rather than the company’s internal securities compliance program, even in “borderline” cases where the informant’s knowledge of the wrongdoing is underdeveloped. This risks undermining the role of corporate compliance programs in detecting and preventing securities law violations. Moreover, persons who discover potential securities law violations are likely to be public company employees or financial professionals whose fiduciary or professional ethics obligations may come into conflict with the incentive to directly reveal potential wrongdoing to the SEC that § 922 provides.
    This Comment will explore these potential drawbacks of the SEC’s enhanced whistleblower bounty program in detail. Part I will more fully explain the mechanics of § 922, will investigate its legislative history, and will examine the performance of a similar bounty program in place at the IRS for tax law violations. Part II will address whether and how the new bounty program might undermine the role of internal corporate compliance programs in achieving conformity with the federal securities laws and will assess the potential conflicts the new bounty program might create with the professional ethics obligations of whistleblowers who are employees or third party financial consultants of the violator. Finally, Part III will recommend certain SEC rules intended to preserve the value of the new bounty program while ensuring that financial professionals and internal compliance programs continue to play a central role in securities law compliance. Part III will also comment on the SEC’s recent Proposed Rules for Implementing the Whistleblower Provisions of Section 21F of the Securities Exchange Act of 1934 (Proposed Rules). 2011/08/02 - 14:59
  • Forced through a lame-duck Congress in 1980, the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA or Superfund) was a bold, but flawed, legislative initiative. Superfund never attained the success of previous federal environmental programs, and a dramatic shift in political context played a lead role in that shortcoming.Throughout the 1980s, critics began to accuse federal environmental regulation of impeding economic growth while delivering only marginal results. When subsequent thinking coalesced around “streamlining” the Superfund program, one idea predominated: devolving enforcement duties to the states. This process is now quite advanced and enjoys some current academic support. Yet the same administrative problems, including administrative intransigence and political horse-trading, plague state governments as well. If politics has hindered Superfund administration,some state agencies face similar challenges. This Comment explores that possibility and asks what the federal Environmental Protection Agency (EPA) can do about it. 2011/08/02 - 14:59
  • In 2011–2015, health care regulation changes will present new challenges and opportunities to the novice lawyer in a general practice law office. Our purpose in this Article is to guide the novice at federal administrative rulemaking through the very challenging rulemaking aspects of implementing the Patient Protection and Affordable Care Act (PPACA or the Act). Even if you skipped the administrative law and health law courses in law school, your clients will ask for your help, and you can cheerily offer to guide them. Individuals, nonprofit groups, companies, doctors, pharmacies, hospitals, local governments, states, insurers, investment analysts, and product manufacturers are among the many types of law firm clients who will struggle with the implementation of the 2010 health care reform legislation. How well you perform in this rule-writing context may shape the future of your practice when more health law issues arise for your clients.
    So much money is at stake for these clients that accurate advising and thoughtful preparation on Department of Health and Human Services (HHS) rules could be essential to sustaining your role in those clients’ profitable health care businesses. Rulemaking comments, well crafted and effectively supported by data, will be your future goal in serving these clients. Your sensitivity to federal and state motivations will result in more effective comments and meeting participation; the clients will benefit from your thoughtful preparatory work.
    We confess that a guide to this massive law is impossible in these few short pages. We could try to parse its 406,887 words, slog through the 906-page PDF version from the Government Printing Office website, or even dance through the twelve-page table of contents for Public Laws 111-148 and 111-152, the basic statute and the companion “reconciliation” bill. Instead, in order to be both pragmatic and helpful, we will orient this Article toward aiding the novice in successfully drafting and submitting comments on the many agency rules that implement the new law’s complex commands and constraints.
    There is no question that PPACA will result in a tsunami of new administrative rulemaking. Although some of this important work has already begun and will be discussed below, there is still much more to come. This rulemaking will be contentious, pitting politicians, agency heads, insurers, industry lobbyists, health care consumer advocates, and individuals against each other in a monumental battle to shape the regulations that will ultimately define health care in America. By analogy, those health care participants who wander onto the PPACA “beachfront” unaware and unprepared for this particular tsunami could be overwhelmed by the roiling flood of red tape before they have a real opportunity to have any impact on the rulemaking process.
    If the aphorism is correct that “the world is run by those who show up,” the 2011 world of health care reform rulemaking is being run by a few dozen law firms and corporate lobbyists, that represent major industries with financial stakes in the PPACA reforms. They have equal free speech rights, but their sophistication in rulemaking can make them seem more equal than other smaller players.
    This Article will target the needs of the small firm, solo, or public interest attorney who cares enough to advocate for the economic interests of citizens, patients, and less affluent players. We hope to provide you with the navigational tools you will need to have a say in this critical rulemaking that will define health care delivery and medical cost coverage for decades to come. This Article will also provide an overview of some of the most critical provisions in the legislation and an explanation of where the rulemaking on those segments will take us. 2011/08/02 - 14:59
  • Immigration judges adjudicate hundreds of thousands of cases each year. A substantial percentage of these cases are then appealed to the Board of Immigration Appeals (Board). In 2002, the Attorney General issued regulations that drastically altered how the Board should review decisions rendered by immigration judges. Commentators have been critical of many of these regulatory changes, but they have consistently overlooked one particular aspect of the 2002 reforms: a change to the Board’s standard of review. Before 2002, the Board could evaluate de novo all aspects of an immigration judge’s decision, but under the 2002 regulations, the Board can only reverse the immigration judge’s findings of fact if those findings are clearly erroneous. This regulatory change appeared to do nothing more than place the Board on par with other appellate bodies that defer to the factual findings of the initial adjudicator. However, the regulation has left the Board’s scope of review in disarray. The Attorney General provided an interpretation of the regulation that opened the door to divergent applications of the enunciated standards. Subsequently, the Board issued several precedential decisions that contained multiple interpretations of its scope of review authority, creating contradictions between its opinions and the Attorney General’s commentary. Reviewing the Board’s decisions, federal courts of appeals have reached different conclusions on several principal aspects of the Board’s authority under the scope of review regulation. Moreover, the Attorney General’s justifications for amending the Board’s standard of review have not come to fruition. In light of all these problems, the regulation should be amended to again provide the Board with de novo authority to review findings of fact. 2011/08/02 - 14:59
  • The United States Code is riddled with “duplicative delegations”—delegations in separate statutes or statutory provisions that may reasonably be construed as granting the same regulatory authority to different agencies. In this Article, I look at real-world regulatory dynamics to determine how duplicative delegations arise, how they impact the design of legal and regulatory institutions, and how they alter the balance of powers among the branches of government. I show that duplicative delegations are generally either unintentional or incidental to other congressional aims. Nevertheless, they are pervasive. If all agencies acted on their duplicative authority, duplication and conflict would seriously disrupt the regulatory system. To avoid such an outcome, Congress and the White House have crafted an array of “antiduplication xinstitutions” that screen out duplication ex post and put significant downward pressure on agencies to avoid duplication on their own. Normatively, I argue that, because the costs of avoiding duplicative delegations ex ante are significant, Congress and the White House should rely on these comparatively cheaper ex post institutions to screen out duplication. However, because these ex post institutions also have their costs, it is efficient to let some duplication persist. As a separation of powers matter, I show that, through duplicative delegations, Congress provides the executive a menu of agencies from which to choose which agency should perform a particular regulatory task. Descriptively, the President and agencies routinely divvy up tasks and set jurisdictional boundaries among agencies with duplicative delegations. Normatively, because of the executive branch’s comparative advantage at allocating tasks among agencies according to their expertise and policy interests, I propose an interpretive default rule under which courts would defer to executive arrangements reconciling duplicative delegations. 2011/08/02 - 14:59
  • The business culture for public companies demands transparency and openness. Investors and securities analysts demand information so that they can assess the strengths and weaknesses of a company. Underlying the securities laws is a policy that encourages full disclosure and information to the investing public. The Internet and other technology provide instant access and, more importantly, an almost limitless depth of historic statements and information.
    Faced with this culture, executives are counseled to be open about business strategies. However, this new openness has created new issues. Public disclosures made in the context of conference calls with securities investors and analysts (Investor Calls or Calls) have recently become an area of focus for both antitrust plaintiffs and the government. Faced with more rigorous pleading standards after Bell Atlantic Corp. v. Twombly and Ashcroft v. Iqbal, plaintiffs have scoured transcripts of Investor Calls to find support for claims that defendants have reached an unlawful agreement and used these Calls to signal one another. The government charged at least two companies with violations of the antitrust laws largely by virtue of statements made in Investor Calls.
    The use of statements in Investor Calls to establish an antitrust claim creates tension between the securities laws and the antitrust laws. On the one hand, the securities laws encourage executives to be forthcoming in making disclosures of material information. On the other hand, antitrust law instructs executives to take care to avoid disclosing information that could be competitively sensitive.
    Imagine an executive who is asked a question about future pricing plans. The executive is being counseled by the company’s securities lawyers to be open and forthcoming in his response. At the same time, the executive is being counseled by the company’s antitrust lawyers not to say too much. The tension is particularly strong where the information is not on its face anticompetitive—such as a new distribution plan, or a plan to create a more customer-friendly pricing structure. However, the disclosure of this information can be misconstrued or taken out of context, and serious antitrust liability can arise from keeping investors informed.
    This Article considers the extent to which such Calls may be immune from the antitrust law. Particularly in light of the tension described above, we conclude that many statements made during Investor Calls should be immune from antitrust attack under the implied preclusion doctrine, most recently explained by the Supreme Court in Credit Suisse Securities (USA) LLC v. Billing. We also conclude that public policy supports limiting the use of Investor Call statements in antitrust cases to those statements that are unambiguously anticompetitive. 2011/08/02 - 14:59
  • Professor Pierce describes the major findings of ten empirical studies in which scholars have engaged in statistical analysis of large numbers of cases in which courts at all levels of the judiciary have applied six doctrines in the process of reviewing agency actions. The most robust and consistent findings include: neither choice of doctrine nor choice of decision making procedures is an important determinant of the outcome of review proceedings; courts uphold about two-thirds of the agency actions they review, no matter what doctrine the court invokes or what procedures the agency used; the political or ideological preferences of judges and Justices explain between 10 and 30 percent of their votes; and the D.C. Circuit is consistently less deferential to agencies than other regional circuit courts. Professor Pierce suggests a variety of inferences that practitioners, judges, teachers, and scholars should draw from the studies’ findings. 2011/08/02 - 14:59
  • In administrative process sunlight may be the best disinfectant, but as Professor Strauss notes, the “candor and the flexibility necessary for collaboration or compromise are more likely to flourish in the shade.” This Study is designed to explore the engagement of interest groups over the entire life cycle of a rulemaking and to assess whether it is in fact in these shaded, or partly shaded phases where much of the regulatory work gets done. Specifically, we examine the air toxic emission standards set by EPA for over 100 major industries with respect to both participation and influence of interest groups at key points of the rulemaking life cycle—before the proposed rule is published; between notice and comment and the final rule; and after the final rule is published. The results reveal high levels of participation and stark imbalances among participating groups at each of these stages. At the pre-proposal stage, industry had an average of 84 informal communications with the EPA per rule; public interest groups had an average of 0.7 communications per rule. During the comment process, industry provided approximately 81% of the total comments; public interest groups provided 4%. Changes made to the final rule after notice and comment favored industry by a factor of 4 to 1 as compared to the changes benefitting the public interest. Post-final rule activity was considerable as well. Petitions and litigation occurred for 22% of the rules, with industry filings accounting for 2 times those filed by public interest groups. After promulgation of the rules, moreover, roughly 70% of the rules were revised and amended, with an average rate of over 4 revisions per rule for those that were revised at least once. These findings are consistent with other recent empirical research on the rulemaking process, but add to the evidence of extensive engagement outside of the reach of the APA as well as highlighting significant interest group imbalances at three discrete stages in the rulemaking process. 2011/08/02 - 14:59
  • The Patent Office has the power to issue rules that “shall govern the conduct of proceedings in the Office,” 35 U.S.C. § 2(b)(2) (2006), but not the power to issue substantive rules. It has been this way since 1870, when Congress first granted this regulatory power in nearly these same words. Just how broad is this grant? How should a reviewing court determine whether a challenged Patent Office rule is procedural (and thus valid) or substantive (and thus invalid)? It is remarkable that in 2010, 140 years after Congress gave the Patent Office this power, the proper sorting standard is as unclear as it has ever been. This Article provides the best answer. The key is realizing that the proper route to the answer is to model it after the Rules Enabling Act analysis for testing the validity of Federal Rules of Procedure, not the Administrative Procedure Act analysis for requiring notice-and-comment rulemaking or the Rules of Decision Act analysis for hewing to state substantive law in diversity cases. In brief, a Patent Office rule that incidentally affects applicants’ substantive rights does not violate § 2(b)(2) of the Patent Act if the rule is reasonably necessary to establish or preserve the fair and effective patent examination process that the Patent Office’s rules must organize. 2011/08/02 - 14:59
  • The largely statutory appearance of U.S. administrative law should not be surprising in light of the existence of the federal Administrative Procedure Act of 1946 (APA). The APA, including its additions and amendments, is a relatively comprehensive guide to much of administrative law in the United States. It contains the procedures agencies are supposed to follow in both rulemaking and adjudication and provisions on the availability and scope of judicial review of agency action. As amended, it includes open meeting and open file requirements as well as procedures for negotiated rulemaking and legislative review of agency rules. Add in the generally held view that federal courts should not make common law but should act only when and how they are statutorily authorized to act, and it is understandable that administrative law takes on a strong statutory appearance.
    Thus, although common law pops up explicitly on occasion in the odd quarter of administrative law, by and large the law of judicial review appears to be statutory and it is understood that way by most lawyers. Note the word “appears.” Scratch below the surface, and the federal courts may not actually behave all that differently than court systems with an openly acknowledged common law tradition in administrative law. While the federal courts have always been statutorily authorized to employ the writs that English courts used in the common law of judicial review, the courts have, since the enactment of the APA, been reluctant to be open about their use of common law in the administrative law arena, especially when a statute contains an answer or even the germ of an answer. Even when the federal courts rely on pre-APA case law or principles, courts usually filter this law through the lens of the APA.
    The purpose of this Article is to uncover the statutory veneer of federal administrative law and reveal ways in which federal courts behave like common law courts, creating administrative law based on principles and policies that may or may not be consistent with the language, structure, and history of the APA and other relevant provisions. I will also highlight areas in which the Supreme Court has required a more statutory focus as a matter of contrast with the common law aspects of administrative law to illustrate that the Court has not provided, or even attempted to provide, a principled justification for its continued use of administrative common law. Last, this Article shows that the courts have not provided a method for choosing between a statutory or common law focus in any particular doctrinal area. 2011/08/02 - 14:59
  • On January 27, 2010, the SEC voted to require companies to disclose potential impacts of matters related to climate change.  This Recent Development addresses the complexity of disclosing impacts that can be diverse, far-reaching, potentially permanent, and above all, hard to quantify.  Corporations’ definition and measurement of risks in accordance with their obligations under the SEC’s guidance will require additional and strenuous effort to consider the wide-ranging risks in the required situation-based, fact-driven analysis.
    This Recent Development explores the task ahead of companies when filing reports with the SEC.  First, it discusses the relationship between climate change and corporations and lays out the recent SEC Climate Change Guidance.  Second, it discusses how, in light of the limited information about climate change risks previously contained in 10-K filings and even in the various voluntary disclosure mechanisms, the SEC Climate Change Guidance requires more from companies to provide investors with all relevant information. Third, it raises concerns about the additional burden placed on corporations by the SEC Climate Change Guidance to identify and measure risks, arguing the nature of climate change makes the materiality determination more difficult than other recently identified disclosure requirements. Finally, the piece evaluates the potential cost to companies of disclosing in light of the potential maximum liability for risks related to climate change, concluding the additional cost of thorough evaluation risks is entirely justified. 2011/03/25 - 15:27
  • The Obama Administration has identified open government as a top priority, announcing that government transparency, public participation, and collaboration between citizens and lawmakers are the movement’s three chief goals.  The new initiative has focused on innovations in internet technology to achieve these goals.  Of particular importance is the Administration’s plan for electronic rulemaking (e-rulemaking), an initiative that augments traditional notice-and-comment rulemaking procedures by allowing federal agencies to post proposed regulations online.  One recommendation is to modify, the government’s portal website that facilitates e-rulemaking, by allowing users to register with the system and create customizable homepages.
    Although this innovation would help advance the goals of open government, it does not recognize the role that interest groups play in agency rulemaking.  The importance of interest groups has been recognized since the nation’s founding, yet there are no specialized rules governing lobbyist conduct in rulemaking.  One potential approach for addressing this problem comes from the European Commission’s “Your Voice in Europe” website, which is the European equivalent to  The Your Voice website features, among other things, a registration system that differentiates between interest groups and ordinary citizens.  This Comment argues that the lessons from Europe could provide valuable insights for devising a two-tiered registration system for that recognizes the role of interest groups in rulemaking by maximizing the benefits these groups provide to the process while mitigating the corresponding costs. 2011/03/25 - 15:27
  • The Internet plays an important role in the economy, providing jobs, productivity growth, and cost savings.  More than anything, it has made the lives of many much simpler¾except of course for those who regulate and classify it.  Indeed, computers and subsequently the Internet have proven to be a significant challenge to the Federal Communications Commission (FCC or the Commission) from the 1960s with the rise of the modern-day computer, to today, as network neutrality (net neutrality) remains at the forefront of the policy debate after President Obama specifically included provisions in his stimulus package requiring the Commission to formulate a national broadband plan.  Thus, since the 1960s the Internet and the net neutrality term “nondiscrimination” (the principle that the Internet is comprised of “dumb pipes” which should give equal priority to all bits on the Internet¾whether it be an email bit or a video bit) have gone on a roller coaster ride that has currently sent the Commission down its sharpest hill yet: a Notice of Proposed Rulemaking (NPRM) to codify its four net neutrality policy principles and additionally add and codify principles of nondiscrimination and transparency.
    This Comment analyzes the current state of the net neutrality nondiscrimination principle after the Net Neutrality NPRM, Comcast, and Third Way NOI, arguing that despite Congress’s mandate to the Commission for regulatory forbearance, the Commission has repositioned the Internet into a Title II regulatory framework.  Part I of this Comment explores the path the Commission has taken up to this point, and how that path has led the Commission to both desert and then reassert its Title II authority.  Part II analyzes how the nondiscrimination framework came from the shadows to the forefront of the Internet debate and asserts that nondiscrimination can be better clarified¾and Congress’s mandate better fulfilled¾if the Commission takes the advice of Commissioner Robert M. McDowell, by labeling the fifth principle as “anticompetitive” rather than as “nondiscrimination.”  In doing so, “beneficial” discrimination, such as blocking spam and preventing congestion, can survive regulation of the Internet.  Finally, Part II concludes with how the Commission should move forward, suggesting that the term nondiscrimination¾like the terms common carriage and basic transport¾should be retired rather than expanded in this new era of communications law. 2011/03/25 - 15:27
  • While the federal bailouts and stimulus packages are credited with saving the economy from systematic risk, the ownership by the government of large stakes in private enterprise creates numerous legal, ethical and policy issues. Can the government effectively and ethically manage a portfolio of companies as a shareholder when it is also charged with regulating those same companies? To what extent does the government mandate to pursue the public good interfere with corporate duties to maximize shareholder value? Will the expectation of government bailouts lead to excessive moral hazards? Has a political economy—in which entrepreneurial capitalism plays a central role—been irrevocably harmed when the government bails out inefficient firms?
    This Article analyzes the role of the government as a shareholder in private enterprise and proposes a set of rules and norms to govern the government as an owner of corporate America. At the core of the regulatory proposal are three principles.  First, there must be political insulation of the investment decision and management of assets by creating an independent investment authority.  Second, ethical walls should be created between the investment authority and the regulatory agencies overseeing private enterprise.  Third, the investment authority should be required to act as a prudent investor with the goal of maximizing the return on investment. In applying these principles, this Article defines a typology of government investments related to infrastructure, social goals, political goals, economic development and financial goals.  It offers a set of institutional norms meant to maximize the efficiency of government investment within liberal market economies while reducing the risks of ethical misconduct. 2011/03/25 - 15:27
  • In recent years many firms have begun to pursue “green business,” defined as company actions that enhance both the firm’s environmental performance and its competitiveness.  This Article describes the green business phenomenon and offers a new theory as to how environmental law and policy can promote it.
    In the 1990’s, Harvard Business School Professor Michael Porter developed the leading view on how regulation can foster green business.  Professor Porter argued that traditional regulatory standards, which push companies to adopt specific pollution control technologies, deter green innovation and so are “bad.”  In contrast, outcome-based standards, which specify the environmental result but let companies figure out how to get there, encourage such innovation and are “good.”  Professor Porter’s regulatory theory holds that, in order to promote green business, we should substitute outcome-based rules for technology-based standards, good regulation for bad.  This has become the accepted wisdom in the field.
    Yet Professor Porter’s thesis is seriously incomplete.  As this Article shows, outcome-based regulations will not work to promote many of the most important green business activities that firms engage in today.  Instead, the transaction costs involved in setting an appropriate outcome-based target and in measuring and monitoring the environmental results, make outcome-based standards an ineffective tool for promoting all but a relatively small subset of green business practices.  While Professor Porter has made an extremely valuable contribution to the literature on how regulation can promote green business, his theory is deficient.
    “Reflexive law” can fill the gap.  First propounded by German social theorist Gunther Teubner, reflexive law consists of those laws and policies that promote industry self-regulation.  For example, a law that required firms to disclose publicly their toxic emissions, and so encouraged them to reduce this pollution, would qualify as a reflexive law.  It would neither push firms to adopt particular control technologies (as traditional, technology-based regulation does) nor mandate specific environmental results (as outcome-based regulation does).  Instead, it would use information disclosure to get firms to self-regulate in order to improve their environmental performance.  This Article argues that information disclosure rules and other reflexive laws can foster the very types of green business activities that outcome-based regulations are ill-suited to address.  Reflexive law completes Professor Porter’s theory.
    This Article begins by describing what firms do when they “go green” and what motivates them to undertake this effort.  The Article then evaluates whether the market, technology-based standards, and outcome-based regulations can promote green business.  It shows that while each of these has an important role to play, each is ultimately insufficient.  It argues that reflexive law is an essential addition to these other mechanisms and that the best strategy is one that combines all four approaches while remaining sensitive to the strengths and weaknesses of each. 2011/03/25 - 15:27