Adjudication

Question 1

Adjudication - General Significance

Answer 1

• sets policy through application of policy to particular facts involving particular parties
• not abstract generalities about what policy will do to public at large

Question 2

Agency Adjudication vs. Article III Adjudication

Answer 2

• different contexts, can’t compare the two

Administrative agencies are not charged with just trying to be blind appliers of the law (unlike Article III judges)
- admin agencies perform wide range of functions (prosecute violations through enforcement actions, decide cases, set policy) vs Art III more just adjudicating
- political appointees make policy decisions that can be reviewed by Art III judges for compliance w/ standards set by Congress

Question 3

Safeguards for Adjudication

Answer 3

• Independence of decisionmakers
• Multimember decisionmakers
• Formal rules in APA for how adjudication must happen

Question 4

Q of Whether Agencies Inherently Biased

Answer 4

• Generally depends on whether agency is unitary actor (less accurate) or many people (more accurate)
• concept that agencies have all the below functions,, but generally being carried out by different people

Functions w/in agencies:
- Investigated the situation; (General counsel)
- Became convinced there was wrongdoing; (regional directors who work for general counsel)
- Formally voted to bring charges; (NLRB Board and prosecutor making prosecutorial decision-> separation of powers concerns…)
- Presented, as prosecutor, the case against the companies; (attorneys who work with general counsel)
- Perhaps testified as an expert witness against the companies;
- Acted as the hearing examiner receiving the evidence;
- Made findings of fact and proposed rulings of law; (ALJs)
- Heard an internal appeal; (ALJs)
- Rendered the final decision (board members or commissioners)

Question 5

Withrow v Larkin - Overview of Case

Answer 5

• 1975
• dr challenging revocation of med license on grounds of bias + corresponding violation of procedural due process (those who investigated allegations of misconduct would’ve presided at suspension hearing)
• more looking at state adjudications though
• court essentially decides it’s not a per se due process violation, but might be able to establish in certain cases
  -> process itself is fair + constitutionally permissible
  -> presumption of good nature of adjudicators
  ->combo of functions in Art III context is fine

Question 6

Withrow v. Larkin - Holding

Answer 6

• “That the combination of investigative and adjudicatory functions does not, without more, constitute a due process violation, does not, of course, preclude a court from determining from the special facts and circumstances present in the case before it that the risk of unfairness is intolerably high.”

Question 7

Adjudication vs. Rulemaking

Answer 7

• adjudication distinct b/c not exclusively forward-looking (resolving a particular dispute in a particular case)
• weird hybrid of enforcement and rulemaking
• agency can choose to set policy through adjudication (though somewhat complicated q arises of whether applies to parties before the agency)

Question 8

Basics of Adjudication

Answer 8

• oral, trial-type proceedings
• parties must be allowed evidence and witnesses
• overseen by ALJ (must be accorded a certain level of independence)
• must comport w/ 5th Am dp when life, liberty or property at stake
• needs to result in a decision

Question 9

APA and Adjudication

Answer 9

• adjudication is within sections 554, 556, and 557

Question 10

Independence of ALJs

Answer 10

• 554(d) of APA deals with this -> imposes certain reqs designed to insulate ALJs
• ALJ makes the decision
• can’t consult w/ any person or party on fact in issue unless notice + opp for all parties to participate (i.e. out in the open, hearing)
• ALJ can’t be subject to supervision or discretion of any employee or agent engaged in agency’s investigative or prosecuting functions
• also imposes certain limits on participation of agency prosecutors/investigators (basically, seems like they’re not allowed to participate in the ALJ’s decision, but they can be witness or counsel at hearing)

Question 11

Lucia v. SEC

Answer 11

• SCOTUS 2018
• made appointment of ALJs more complicated, although OMB working through precisely which ALJs it impacts (this case focused on SEC ALJs)
  -> q of whether ALJs subject to Appointment Clause of Constitution - to be classified as an officer rather than an employee, a person needs to have a “continuing” position established by law, and must “exercis[e] significant authority pursuant to the laws of the United States.”
• manner of dismissal for ALJs still only for cause (court has yet to opine on this)

Question 12

Ex Parte Communications - Rulemakings vs Adjudications

Answer 12

• adjudications have VERY different rules - a lot less lax than the rulemaking ones

Question 13

Ex Parte Communications for Adjudications - Overview

Answer 13

• governed by 557(d) of APA
• No interested person outside agency can make ex parte communication to anyone inside who is involved in decisional process of proceeding, if communication is relevant to merits of proceeding
• if ex parte communication occurs, info must be included in record and parties must be granted ability to challenge how the communication tainted the evidence

Question 14

APA 557(d)

Answer 14

(1)In any agency proceeding which is subject to subsection (a) of this section, except to the extent required for the disposition of ex parte matters as authorized by law—
(A)no interested person outside the agency shall make or knowingly cause to be made to any member of the body comprising the agency, administrative law judge, or other employee who is or may reasonably be expected to be involved in the decisional process of the proceeding, an ex parte communication relevant to the merits of the proceeding;
(B)no member of the body comprising the agency, administrative law judge, or other employee who is or may reasonably be expected to be involved in the decisional process of the proceeding, shall make or knowingly cause to be made to any interested person outside the agency an ex parte communication relevant to the merits of the proceeding;
(C)a member of the body comprising the agency, administrative law judge, or other employee who is or may reasonably be expected to be involved in the decisional process of such proceeding who receives, or who makes or knowingly causes to be made, a communication prohibited by this subsection shall place on the public record of the proceeding:
(i)all such written communications;
(ii)memoranda stating the substance of all such oral communications; and
(iii)all written responses, and memoranda stating the substance of all oral responses, to the materials described in clauses (i) and (ii) of this subparagraph;
(D)upon receipt of a communication knowingly made or knowingly caused to be made by a party in violation of this subsection, the agency, administrative law judge, or other employee presiding at the hearing may, to the extent consistent with the interests of justice and the policy of the underlying statutes, require the party to show cause why his claim or interest in the proceeding should not be dismissed, denied, disregarded, or otherwise adversely affected on account of such violation; and
(E)the prohibitions of this subsection shall apply beginning at such time as the agency may designate, but in no case shall they begin to apply later than the time at which a proceeding is noticed for hearing unless the person responsible for the communication has knowledge that it will be noticed, in which case the prohibitions shall apply beginning at the time of his acquisition of such knowledge.

Question 15

PATCO v. FLRA - Factual Background

Answer 15

• air traffic controller strike during Reagan Admin – went out on strike even though fed law made it illegal (right to unionize but can’t back it up with striking behavior)
• unfair labor practice against PATCO for calling illegal strike -> remedy from litigation is to strip PATCO of union status

Question 16

PATCO - Initial Proceedings

Answer 16

• ALJ recommended that the FLRA strip PATCO of its certification (FLRA is like NLRB for fed employees)
• ALJ rec then goes to FLRA board -> members hold an oral argument -> affirmed the ALJ decision (agree PATCO should be stripped of its certification) -> PATCO appeals to DC Circuit

Question 17

PATCO - DC Circuit

Answer 17

• while case at DC Circuit, FBI gets involved over potential ex parte communications
• DC Circuit asks a new ALJ from different agency to investigate ex parte communications

Question 18

PATCO - Ex Parte Communications

Answer 18

3 contacts at issue:

1) Meeting Between Applewhaithe + gen counsel
–> discussed general questions – not citing specifically to PATCO but some insinuation of subtext
-> Somebody else comes in from solicitor’s office -> tells Applewaith that she has a memo on the legal issue of whether a revocation remedy (remedy as violation for illegal strike) whether it’s a discretionary or mandatory remedy
->Doesn’t raise any factual issues or conclusions of law, just says she worked on the memo on this legal issue in front of the general counsel

2) Phone Call
-> FAA files a motion to limit the time of the process – framed as working in consort in some sort of way
-> Member Fraser – gets a call from Sec of Transportation (probs not something that happens every day) -> he says not telling you about issues before FLRA (legality of strike and appropriate remedy), just that strike not ending, need to move things along, no planes in the air -> Fraser tells Applewaith about this + Applewaith then gets a call from Sec - says don’t tell me anything, if you want us to do something faster file a motion -> FLRA cuts down the time but basically denies what Sec of Transportation asked for

3) Member Applewhaite’s Dinner With Albert Shanker
- Since 1974 Albert Shanker has been President of the American Federation of Teachers, a large public-sector labor union, and a member of the Executive Council of the AFL-CIO
- Mr. Shanker candidly admitted that he wanted to have dinner with Member Applewhaite because he felt strongly about the PATCO case and wanted to communicate directly to Member Applewhaite his sentiments, previously expressed in public statements, that PATCO should not be severely punished for its strike.
- record is clear that Mr. Shanker made no threats or promises to Member Applewhaite; likewise, the evidence also indicates that Member Applewhaite never revealed his position regarding the PATCO case
- Member Applewhaite also observed that he was concerned about his prospects for reappointment to the FLRA in July 1982. Mr. Shanker, in turn, responded that Member Applewhaite had no commitments from anyone and urged him to vote without regard to personal considerations.

Question 19

PATCO - ALJ Decision

Answer 19

• 1. Meeting did not affect outcome
• 2. Phone call was not about substance/merits of the decisionmaking: No affect of outcome
• 3 - don’t really get ALJ thoughts

Question 20

PATCO - DC Circuit Ruling on Ex Parte Communications

Answer 20

• EX PARTE COMMUNICATIONS PROHIBITION: “Three features of the prohibition on ex parte communications in agency adjudications are particularly relevant to the contacts here at issue. First, by its terms, section 557(d) applies only to ex parte communications to or from an [1] “interested person.” . . . Second, the Government in the Sunshine Act defines an “ex parte communication” as [2] “an oral or written communication not on the public record to which reasonable prior notice to all parties is not given, but . . . not includ[ing] requests for status reports on any matter or proceeding. . . .” 5 U.S.C. § 551(14) (1976). Requests for status reports are thus allowed under the statute, even when directed to an agency decisionmaker rather than to another agency employee. . . . Third, and in direct contrast to status reports, section 557(d) explicitly [3] prohibits communications “relevant to the merits of the proceeding.” The congressional reports state that the phrase should “be construed broadly and . . . include more than the phrase ‘fact in issue’ currently used in [section 554(d)(1) of] the Administrative Procedure Act.” . . .”
• REMEDIES: Section 557(d) contains two possible administrative remedies for improper ex parte communications. The first is [1] disclosure of the communication and its content. The second requires the violating party to [2] “show cause why his claim or interest in the proceeding should not be dismissed, denied, disregarded, or otherwise adversely affected on account of [the] violation.” . . .[A] court must consider whether, as a result of improper ex parte communications, the agency’s decisionmaking process was irrevocably tainted so as to make the ultimate judgment of the agency unfair, either to an innocent party or to the public interest that the agency was obliged to protect. In making this determination, a number of considerations may be relevant: [FACTORS] the gravity of the ex parte communications; whether the contacts may have influenced the agency’s ultimate decision; whether the party making the improper contacts benefited from the agency’s ultimate decision; whether the contents of the communications were unknown to opposing parties, who therefore had no opportunity to respond; and whether vacation of the agency’s decision and remand for new proceedings would serve a useful purpose…

Question 21

PATCO - How to Determine if Agency Decision Irrevocably Tainted

Answer 21

Factors to consider:
- the gravity of the ex parte communications;
- whether the contacts may have influenced the agency’s ultimate decision;
- whether the party making the improper contacts benefited from the agency’s ultimate decision;
- whether the contents of the communications were unknown to opposing parties, who therefore had no opportunity to respond;
- and whether vacation of the agency’s decision and remand for new proceedings would serve a useful purpose

Keep in mind this is only after evaluating if communication improper (for that to be true, needs to be interested person + relevant to merits of proceeding, + not on record)

Question 22

PATCO - Eval of Schanker Meeting

Answer 22

• Schanker = public champion for labor justice (+ even if he’s not an interested party within the definition, the dinner itself suggests interest – came with intent to persuade Applewaith)
• Concept that social relationships are complicated though
• Don’t consider it fully corrupt tampering
• Story seems really bad, but didn’t taint the process
• Wasn’t super specific, no threats made, didn’t tell Schenker how he was gonna vote
• Outcome ultimately not affected

Question 23

PATCO - Concurrence

Answer 23

• mad that the majority isn’t mad enough (appalling conduct, even if outcome wouldn’t have been different court should send stronger message that this was bad behavior)

Question 24

PATCO - Additional Court Quotes

Answer 24

• “In these circumstances, we do not believe that it is necessary to vacate the FLRA Decision and remand the case. . . . Though plainly inappropriate, the ex parte communication was limited to a ten or fifteen minute discussion, often couched in general terms, of the appropriate discipline for a striking public employee union. This behavior falls short of the “corrupt tampering with the adjudicatory process” found by this court in WKAT, Inc. v. FCC, 296 F.2d 375, 383 (D.C. Cir.), cert. denied, 368 U.S. 841 (1961). . . . [T]he Applewhaite/Shanker dinner had no effect on the ultimate decision of Member Applewhaite or of the FLRA as a whole in the PATCO case. . . . No party benefited from the improper contact. . . . Finally, we cannot say that the parties were unfairly deprived of an opportunity to refute the arguments propounded in the ex parte communication. . . .”
• “Frazier now proposes that Member Applewhaite had a personal interest in the outcome of the PATCO case . . . [and] argues that Member Applewhaite was disqualified from hearing the PATCO case. We do not read as much into this conversation as does Member Frazier. It is not surprising that an agency member appointed by the President might be concerned about his prospects for reappointment. . .The . . . conversation between Member Applewhaite and Mr. Shanker does not demonstrate an inability to fairly decide the case. Courts have long recognized “a presumption of honesty and integrity in those serving as adjudicators.” Absent a strong showing to the contrary…”

Question 25

ALJs - Job Prospects Issue

Answer 25

- ALJs have lifetime appointments to deal with this concern

Question 26

General Process of Adjudication

Answer 26

- general counsel finds reasonable basis for finding reasonable cause to believe that a violation of the agency[‘s statute has happened-> staff investigates complaint-> then goes before ALJ - ALJ makes credibility determinations about witnesses + findings of fact, then ALJ makes conclusions of law - party who is aggrieved (sometimes both parties – might win on some, lose on others) tells Board Commission why the ALJ was wrong -> tells findings of fact + conclusions of law, then make a decision -> for the most part, they accept ALJ findings of fact, will either affirm ALJ decision or say ALJ got law wrong/didn’t correctly understand the precedent, or could also say in its policy-making role, even though ALJ applied correct law to facts, the Board is going to make a changed interpretation + apply it to the facts, then wind up with question of whether application is retrospective or prospective

Question 27

Portland Audubon Society v Endangered SPecies Comm. - Facts

Answer 27

- 9th Cir 1993 - something with northern spotted owl - Endangered Species Committee – Can’t fund projects that jeopardize continued existence of Endangered Species, unless ESC approves -> Made up of cabinet secretaries, not an ordinary independent agency - Conduct at issue here – White House staff and aids had private meetings pressuring Committee to go forward with the project (lots of ev of pressure on the members to move forward with the exception) - §557 applies to White House contacts

Question 28

Portland Audubon - Arguments + Decision

Answer 28

- White House argued President not an interested party -> court says he is an interested party, term is supposed to be broad - White House arguees White House contacts not outside contacts -> court says they’re not part of the decision-making process, so they are outside contacts -> Court points out President is really most likely to influence the agency - Separation of powers - Court says Congress hasn’t inappropriately interposed itself between Pres + people who work for him (court kind of says this can’t be right, because if it were right, we couldn’t have independent agencies -> Prof said this argument didn’t stay there though, because independent agencies are now being challenged – this question is now open for debate)

Question 29

Portland Audubon - Remedy

Answer 29

- court passes it back to ALJ for further investigation – what really happened and did it influence the committee’s decision (vacates the committee’s decision in the interim)

Question 30

Cinderella Career and Finishing School v. FTC - Facts

Answer 30

- DC Cir 1970 - for-profit college – FTC accusing the college of telling overly rosy story about how getting a degree will benefit students - Chair – made a speech to the National Newspaper Association while the case is pending, implied a newspaper should tighten its advertising standards to avoid deceptive ads re college -> No allegation that he specifically mentioned Cinderella, but he did engage in self-righteous indignation about their practices

Question 31

Cinderella - Core Concern in Case

Answer 31

- Hard to say one thing in public + then go back to it in your role as a commissioner + make a different decision - Commission allowed to do press release – public version of its accusation - Vs. commissioners have a different function (what the accuser can say is different than what the decider can say in public)

Question 32

Cinderella - Test for Disqualification

Answer 32

-"whether "a disinterested observer may conclude that [the agency] has in some measure adjudged the facts as well as the law of a particular case in advance of hearing it.""

Question 33

General Mechanisms to Avoid Bias and Revolving Door

Answer 33

- Recusal by judges -> avoids bias - Revolving door issue: Time barrier to reentry (private sector employee cannot work for federal agency regulating that private company for a certain period of time) - Statutes Conflict of interest rules (in federal government): - Ethics pledge within White House: 2 year ban on contacts with White House after serving as Administrator - Lobbying restrictions: Professor Block cannot represent anyone’s interest during duration of Biden administration

Question 34

Cinderella - Quotes

Answer 34

"This does not give individual Commissioners license to prejudge cases or to make speeches which give the appearance that the case has been prejudged. Conduct such as this may have the effect of entrenching a Commissioner in a position which he has publicly stated, making it difficult, if not impossible, for him to reach a different conclusion in the event he deems it necessary to do so after consideration of the record. There is a marked difference between the issuance of a press release which states that the Commission has filed a complaint because it has "reason to believe" that there have been violations, and statements by a· Commissioner after an appeal has been filed which give the appearance that he has already prejudged the case and that the ultimate determination of the merits will move in predestined grooves"

Question 35

Cinderella - Takeaway

Answer 35

- formally affirming untainted decisionmaking procedural process - must have value (or at least perception thereof) in the deliberation) - BUT Prof noted it's more of an exception rather than the rule in terms of holding agency adjudicators to strict account for public statements -> Prof also noted new relevance in era of social media

Question 36

Lina Khan

Answer 36

- both Amazon and Facebook filed petition to disqualify Khan (prejudgement) from participating in any adjudications regarding Facebook and Amazon - She has been in the press saying we should break up large tech companies, + a lot of her scholarship has focused on antitrust laws against big tech - A lot of what they are complaining about are things that she said in great detail before she came to the FTC (distinguishable from Cinderella) - FTC recommended Khan did NOT need to recuse herself (2-1)…FTC DAYO: FTC said that she should recuse herself as decider but not because of her impartiality issue but appearance eof impartiality. ->“Courts must tread carefully when reviewing cases in this area lest we ‘eviscerate the proper evolution of policymaking were we to disqualify every administrator who has opinions on the correct course of his agency’s future action.’” The court went on to distinguish the filing of a case from the adjudicating of a case and analogized Khan’s role here to a prosecutor, where it is very hard to disqualify for bias - essentially, court is saying she acted as a prosecutor – bias is different for prosecutors – tread carefully, don’t want to disqualify every administrator who has opinions on the correct course of his agency’s future action