Administrative Process final examination fall 1998
General Instructions
This is a three-hour, open-book exam. You may consult any written materials, but do not discuss your exam with others. Answer all questions on the sheet provided . Note that questions in Part I are worth four times as much as those in Part II; also note that not all questions are to be answered.Part I
[80 points]
Answer any 20 of 24. If you answer more, I will grade the first 20.
“Agency” (as in Q.1) refers to some particular agency, but not the same one throughout the exam. The federal administrative process model applies unless otherwise indicated.
1. Most of Agency’s decisions are reviewed by a single, specified court of appeal, directly or after district court action. Such a judicial review scheme:
a. Is typical of agencies generally.
b. Is uncommon. [Rare would be even more apt.]
c. Is properly called “non-statutory.”
d. Tends to increase the need for the Supreme Court to resolve conflicts.
2. By statute, Category 1 Agency adjudications must be determined “on the record after opportunity for hearing.” No statute requires Category 2 adjudications to be so made. Agency’s statute specifies no intramural standards of review. The APA explicitly permits intramural:
a. Reversal of Category 1 decisions, only if unsupported by “substantial evidence.”
b. Reversal of Category 2 decisions, only if unsupported by “substantial evidence.”
c. De novo review of Category 1 decisions. [See APA § 557(b), referenced after BJP.]
d. De novo review of Category 2 decisions.
3. By statute, some Agency adjudications must be determined “on the record after opportunity for hearing,” but no further procedure is specified. Recently-adopted Agency rules do not permit oral testimony or cross-examination. The APA seems to compel the conclusion that:
a. The new rules are invalid. [See APA § 554(a); also § 706(2)(E).]
b. Courts must apply the “abuse of discretion” standard in reviewing these adjudications.
c. APA § 553 procedures govern these adjudications.
d. Courts must apply the “de novo” standard in reviewing these adjudications.
4. By statute, certain initial Agency decisions may be reviewed by an internal, three member Appeal Council (AC). Under long-standing AC rules, requests for oral argument are often denied, but Frisbee’s was granted. Later, the AC unanimously affirmed in a opinion written by a member substituted for another who heard Frisbee’s argument. If Frisbee seeks court review:
a. No court would have a legitimate decision to review.
b. The AC’s referenced rules are apt to be valid unless explicitly forbidden by statute. [See, e.g., Bose.]
c. The AC’s referenced rules are apt to be invalid unless explicitly authorized by statute.
d. Frisbee is clearly prejudiced; virtually any court would order rehearing.
5. First, Congress gave Home Safety Agency jurisdiction over household risks. Later, Congress gave the new Toy Safety Agency similar jurisdiction over toys, TSA promulgated a rule exempting certain toys from being labeled “for children over the age of six.” HSA does not believe that exemption is warranted and proposes a contrary rule. If toy makers wish to halt the HSA proceeding, their best argument will be that:
a. Having to spend money in another proceeding violates due process.
b. HSA’s jurisdiction, to the extent it overlaps TSA’s, was impliedly repealed. [See Brown-Forman.]
c. TSA’s rules are entitled to Chevron deference.
d. HSA should delay its proceeding because TSA has primary jurisdiction.
6. The Copyright Office collects compulsory licensing royalties and distributes them to copyright owners. Parents Under the Gun (PUG) petitioned to participate in proceedings to refine one of the Office’s allocation formulae. In PUG’s opinion, the formula may affect incentives to produce new children’s TV programs. The Office denied PUG’s request. Whether this will survive challenge is most apt to turn on:
a. How much PUG members will be affected in fact.
b. Whether affected commercial parties oppose PUG’s participation.
c. Whether PUG’s concerns are better addressed by the FCC.
d. What Congress intended regarding participation by non-commercial parties. [See, e.g., Bromberg, Hitachi; the statute usually rules.]
7. Following a severe backlog, Agency adopted rules that allow appeal of its initial decisions directly to a particular Court designated by statute. These rules omit any need first to seek review by its intramural Appeals Council (AC). If Court is concerned about its also becoming backlogged, it would be most justified in refusing to take internally-unreviewed appeals:
a. Because such decisions are not ripe.
b. Because all internal agency process must be exhausted before courts can review.
c. If the statute says that AC decisions may be appealed to Court. [See Darby; also, e.g., Bose; again, the statute usually rules.]
d. If the statute says that final Agency decisions may be appealed to Court. [Essentially the same as b and inconsistent w/ Darby.]
8. As required by statute, Agency’s Category 1 decisions are made after a trial-type hearing and are subject to court review. Agency also engages in certain Category 2 actions, but its statute makes no reference to them. If Agency’s statute makes no reference to standards of review, courts are nevertheless explicitly permitted to reverse:
a. Category 1 decisions unsupported by “substantial evidence.” [See APA §§ 554(a) and 706(2)(E); discussed in the context of Zurko.]
b. Category 2 decisions unsupported by “substantial evidence.”
c. Category 1 decisions that do not survive “de novo” review.
d. Category 2 decisions that do not survive “de novo” review.
9. Following an informal hearing, Agency suspended Malt’s liquor license for 90 days. Malt admits that a minor was served but argues that others found guilty of similar infractions rarely receive suspensions over 30 days. Agency did not explain why Malt received a longer suspension. A court adopting the federal approach to judicial review should:
a. Reduce the suspension to 30 days.[Not the court's decision to make.]
b. Remand for formal fact finding. [No facts are contested.]
c. Uphold Agency if its attorneys convincingly explain why a longer suspension was warranted. [Attorneys' explanations have beeh repeated rejected; see, e.g., Overton Park.]
d. Reverse for abuse of discretion. [Only thing that survives; see APA § 706(2)(A) and, e.g., Hyundai.]
10. Proposed Copyright Office rules will, under a clear delegation, permit the sale of software that can be used to override copy protection. Digital publishers have told the President that they will go bankrupt if self-help protections can be negated. Madam President has told the Librarian of Congress that both he and the Register are history if the proposed rules are adopted.
a. The Executive should be enjoined from interfering in purely Legislative matters.
b. In terms of removal, the President has as much power as she would have if an FTC Commissioner were involved.[See Librarian's testimony; Humphrey's Ex'r.]
c. In terms of appointment, the President has as much power as she would have if the Secretary of Commerce and the Patent Commissioner were involved. [See Librarian's testimony.]
d. Both a and b are correct.
11. After election to the three-person Whoville Board of Variances (BV) two years ago, Smith got a variance to turn his residential property into a commercial parking lot during Motorcycle Weekend — despite loud protests from Jones, his neighbor. Jones recently sought BV permission to sell grinchburgers from his porch during the same event and asked Smith to recuse himself. Smith refused, and Jones’ variance was unanimously denied. Smith later said “Now we’re even.” If federal law applies, Jones:
a. Cannot get a court-ordered rehearing (without Smith) because Smith’s vote wasn’t needed.
b. May get a court-ordered rehearing (without Smith) even if Smith’s vote was unnecessary. [See American Cyanamid.]
c. Should ask a court to find the whole BV to be unacceptably biased. [How would that accomplish his aim; doesn't this kick in the rule of necessity. See, Skupniewitz.]
d. Is unlikely to prevail because the BV clearly has unreviewable discretion.
12. Many of Doofus’s papers arrived late at the NLRB; it investigated and later initiated an action to suspend him. His oral denials were countered by records showing that his mail often took four to ten times as long to arrive as his and others’ contemporaneous mailings. Those records were technically “incompetent,” but Doofus offered nothing to challenge their accuracy and did not subpoena persons who collected and analysed them. Suspended from practice for two years, with two more years’ probation, Doofus seeks review. A court probably:
a. Will affirm despite reliance on incompetent evidence. [See Richardson.]
b. Will reverse because agencies cannot base decisions on incompetent evidence, particularly when it conflicts with sworn testimony.
c. Will reverse because only the PTO can suspend practitioners. [See 5 U.S.C. § 500(d)(2)!]
d. Will affirm unless the NLRB clearly violated the “residuum rule.”
13. Motor Vehicle Department (MVD) may set terms and conditions for drivers’ licenses and, after formal hearing, suspend or revoke individual licenses for, e.g., traffic violations. Drivers’ licenses usually must be renewed every five years. After study, MVD proposed that drivers 70 or older be required to renew annually (age-70 rule). During the comment period, the Ass’n of Retired Folks (ARF) submitted data and argument supporting a similar age-75 rule, but MVD adopted, with cryptic explanation, its original proposal. Under federal law, ARF’s most effective challenge would stress that:
a. The age-70 rule deprives those over 70 of statutory rights to formal hearings.
b. The age-70 rule deprives those over 70 of individual hearings before requiring annual renewal. [(a) and (b) are at odds with both the facts and Airline Pilots.]
c. The preponderance of evidence supports ARF’s age-75 proposal.
d. MVD failed to explain its rejection of ARF’s age-75 proposal. [See, e.g., Tire Dealers.]
14. Not only did MVD adopt the age-70 rule (see Q. 13), the rule was made applicable to drivers with five-year licenses. Hence, a 70-year-old might have to renew on her 71st instead of her 72d to 75th birthday . If federal law applied, the best argument for such a person would be:
a. That the rule erodes her right to annual review of her individual abilities. [Facts!]
b. MVD appears to lack the support necessary to apply rules retroactively. [See, e.g., Patlex, MPAA.]
c. That MVD cannot change existing license terms even in adjudications. [Facts!]
d. Either b or c; they amount to the same thing.
15. Congress directed Agency to promulgate, on the record, many politically sensitive rules within two years. A legislative report says that this rule making will provide ample opportunity for public comment. The report also states that Agency is not being given too much power because courts, under the APA, have full authority to reject arbitrary rules. Here, we see:
a. No evidence that Congress intends formal rule making.
b. Good evidence that Congress intends hybrid rule making.
c. Conflicting evidence about the rulemaking process Congress intends ["on record" vs. "comment" and standard of review.]
d. Clear evidence that rules promulgated past the deadline will be invalid. [Promised issue from Sierra Club.]
16. Agency has power to seize food made under conditions that may affect its wholesomeness. With modest supporting evidence, Agency concluded that failure to pasteurize cider can make it unwholesome. Following a press conference covered by large newspapers, Agency began seizing unpasteurized cider. In such situations, assuming valid delegations of authority:
a. Courts must defer to agencies’ interpretations of their statutes.
b. Notices should be published in the Federal Register before agencies’ statutory interpretations are regarded as “legislative.”
c. Seizing already bottled cider on a new legal theory is unconstitutionally retroactive. [See, e.g., MPAA, and this is within a district court setting.]
d. Rule making should occur before agencies’ statutory interpretations are regarded as “legislative.” [Chrysler v. Brown, discussed in context of Chevron.]
17. (See Q. 16.) Immediately after it read about Agency’s press conference, an association of cider bottlers, alleging that unpasteurized cider has a very brief shelf life, filed a declaratory judgment action in N.H. District Court. The court should:
a. Find the dispute unripe; there is no need for haste, and disputed facts can be better addressed in, e.g., seizure actions.[Facts; no need for haste?.]
b. Find the dispute ripe; Bottlers face imminent harm, and disputed facts can be no better addressed in, e.g., seizure actions. [Seems to fit Abbott Labs, particularly when others aren't true.]
c. Dismiss; Agency has unreviewable prosecutorial discretion.
d. Dismiss; Bottlers’ arguments were not raised during Agency rule making.
18. (See Q. 16.) Agency belatedly learned that consumers much prefer unpasteurized over pasteurized cider. Faced with a blitz of irate calls, including many from Congress, and an unsuccessful seizure action, agency dropped the whole thing. Meanwhile, Brewers found people to much prefer beer over pasteurized cider. Working through a consumer rights organization, Brewers petitioned Agency to reinstate its campaign against unpasteurized cider. A court asked to review denial of the organization’s petition is most apt to:
a. Affirm; these facts show virtually no basis for review. [See, e.g., Chaney; it's hard to imagine a clearer instance of unreviewable prosecutorial discretion.]
b. Require notice and comment rule making to support Agency’s reversal of position.
c. Require Agency to grant petitioners a formal hearing.
d. Upset Agency’s reversal of position because it bowed to unseemly Congressional interference.
19. Toy Safety Agency (TSA) proposed that electrical toys be labeled, “Not for use by children under the age of ten.” It also proposed that electrical devices used by those between ten and thirteen be labeled “CAUTION: Shock Hazard. Avoid water when using this item.” Exceptions were allowed for, e.g., battery-operated devices and TV sets. After many comments were received and analyzed, the proposed rules were adopted. Now TSA seeks a court to order Apex, a laptop computer manufacture, to comply.
a. If Apex did not participate, it cannot contest the applicability of TSA rules to its products.
b. Apex should prevail because TSA’s rules cannot be applied retroactively. [Facts?]
c. If a statute gives courts of appeal exclusive jurisdiction to review TSA rule making, a district court cannot find TSA rules inapplicable to Apex’s products.
d. If TSA’s proposals did not reasonably implicate its products, Apex may raise issues that might otherwise be foreclosed by any lack of rulemaking participation. [Discussed as an exception to, e.g., Gage.]
20. Agency rules forbid sale of all software that can override certain kinds of copy protection. During rule making, some argued that this makes it possible to lock up subject matter that should be freely available to all. Others argued that failure to ban such products would bankrupt some digital publishers. In adopting the rules, Agency explained that it did its best to reconcile major competing policies. The least effective challenge lodged against these rules is apt to be that:
a. Agency’s enabling legislation violates the non-delegation doctrine. [Discussed in context of Industrial Union.]
b. Senator threatened to reduce Agency’s funding if alternatives rules were adopted.
c. Agency ignored common factual and policy issues advanced by many participants.
d. Agency did not explain how its rules are as fair as oft-suggested alternatives.
21. In response to a Parents Under the Gun (PUG) petition, Agency proposed to forbid prizes or other sales gimmicks aimed at children under twelve. It soon became clear that many firms would spend a great deal to defeat the proposal. After the comment period was closed, those firms agreed privately with Agency to accept an age-six rule. Agency then adopted that rule and made it effective immediately. Its statement of basis and purpose emphasized limited resources and argued that it was better to safeguard children most at risk than to face, at best, long-term delay in a vain effort to extend the rule’s reach. Should PUG file a challenge, its most effective argument will be that:
a. Ex parte contacts and private negotiations between agency personnel and regulated firms are forbidden in informal rule making. [Not true; Sierra Club.]
b. Ex parte contacts and private negotiations between agency personnel and regulated firms are forbidden in formal rule making. [Not formal RM.]
c. Agency’s decision was based partly on factors it has no authority to consider. [Sierrra Club.]
d. Rules cannot go into effect sooner than 30 days after publication. [How does this serve PUG's aims?]
22. After events set forth in Q. 21, Agency found itself derided as the “National Nanny.” Several bills were introduced to repeal those rules, but none succeeded. Agency did not strictly enforce the rules. After some turnover in personnel, Agency repealed them by Federal Register notice. The best argument for anyone challenging this action will be that:
a. Agency must use the same process to repeal as to promulgate the rules. [State Farm; also basis for rejecting (d) & (d).]
b. Congressional endorsement requires especially good reasons for repeal. [Facts?]
c. Repeal of the rules should be reviewed under same standards as if Agency had refused to consider PUG’s original rulemaking petition.
d. Repeal of the rules should be reviewed under the same standards as are applied in actions to compel rule enforcement.
23. Whazzit sells Suplex plastics, and their composition is carefully guarded. Duffer found that golf balls with Suplex 22 cores perform superbly, but those with Suplex 21 or 23 cores are nearly worthless. Under a PTO rule, Duffer received a patent despite being unable to distinguish the composition of a critical component from similar but inoperative materials. Squirm clearly infringes Duffer’s patent. However, he argues that the patent is invalid and should never have been issued. Squirm’s best argument for invalidity is that:
a. The PTO rule is procedural and was not properly promulgated.
b. The PTO rule is substantive, and the PTO has no substantive rulemaking authority.
c. The PTO rule fails under Chevron step one. [If the statute is unambiguous, that is clearly better than (b).]
d. The PTO rule fails under Chevron step two.
24. Agency may seize food with unwholesome components. Because all food may contain something (perhaps a few inert mold spores or other foreign objects) that some might regard as “unwholesome,” a staff manual guides enforcement personnel in deciding when to ignore literal infractions. Organic Soups seeks a copy of that manual. If Agency doesn’t provide it, a court will:
a. Not order release unless Organic provides a good reason to have it.
b. Not order release if Agency shows how Organic might use it to evade the law.
c. Order release because no firm would use it to evade the law.
d. Order release. [Scenario discussed in the context of Sears.]
Part II
[20 Points]
Answer any 20 of 24. If you answer more, I will grade the first 20.
[D]1. APA § 12 (as enacted) [T] 13. Clearly erroneousA. Intended to avoid supplanting remedies provided elsewhere. [Nader.]
[L] 2. Ad hoc [Q] 14. De novo
[V] 3. Legislative [O] 15. Substantial evidence
[E] 4. Adjudicatory [S] 16. APA §§ 701-706
[W] 5. Procedural rule making [U] 17. Exemption 7
[H] 6. Jurisdiction [R] 18. Exemption 4
[N] 7. Veto provisions [P] 19. Collateral actions
[F] 8. Severability clause [M] 20. Bias
[A] 9. Savings clause [G] 21. Private cause of action
[X] 10. Remedial legislation [C] 22. Hearing
[I] 11. Private bills [K] 23. Formal agency actions
[B] 12. Scope of delegation [J] 24. Courts and Congress
B. Heavily influences court deference to agency policy choices. [Chrysler.]
C. Need not be oral. [F.E.C.Ry.]
D. Cautions against implied changes in APA requirements. [Zurko & supp.]
E. Type of proceeding least likely to bind those without opportunity to participate.
F. May prevent an entire document’s being found void. [Chadha.]
G. Unlikely to be conferred on incidental beneficiaries of administrative schemes. [Chrysler.]
H. May be influenced by the law of the case doctrine. [Colt.]
I. Can be helpful to overcome sovereign immunity. [Discussed with Chadha.]
J. Explicitly excluded from APA coverage. [§§ 551 & 701(b)(1).]
K. Subject to APA §§ 556 and 557.
L. Often used to describe legal standards that may properly be applied to prior events. [MPAA.]
M. More tolerable with regard to policy than fact issues. [ANA.]
N. Serves a goal now served by a scheme with more Presidential involvement. [Chadha; APA Ch. 8.]
O. A standard of review with 6th and 7th Amendment implications.
P. May pose primary jurisdiction problems. [Nader, etc.]
Q. Default intramural standard of review for formal adjudications. [§ 557(b).]
R. Implicates the confidentiality of commercial information.
S. Require final agency action; exclude harmless errors.
T. A standard of review said to apply to decisions rather than opinions in support. [Zurko.]
U. Limits the use of FOIA for pre-trial discovery. [Robbins Tire.]
V. Type of proceeding that often binds persons who do not exist.
W. APA §553 exempt. [Fresssola.]
X. May be constitutional despite retroactive effects. [Patlex.]
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