Standards for Ethical Conduct

1. Standards for Ethical Conduct • What requirements of a branch system of checks & balances must be upheld?

2. Standards for Ethical Conduct • What requirements of a branch system of checks & balances must be upheld? • Preserve an independent judicial branch. • Preserve two-party political system in government. • Ensure a person’s vote is counted.

3. Judiciary-Article III 1.2.6 Checks & Balances

4. Problem for Case Studies • If the United States wants to remain a world leader in this global society, what ethical standards must we set for our political representatives? • Context: Judicial authority to review actions of agencies and other branches.

5. Three Points • Judiciary has authority under Article III of the Constitution to review executive, legislative, and agency decision making. Can dispose of w/o reaching merits. • Agency decisions must be in writing and are based upon findings of fact and conclusions of law based upon the record. Courts give deference. • Scope of judicial review focuses on what can be reviewed. Standard of review focuses on the level of proof required—Arbitrary & Capricious; Abuse of Discretion; Substantial evidence.

6. Article III • Creates Supreme Court and inferior courts mandated by Congress. • Power over all cases in law & equity, arising under Constitution, laws, & treaties. • Trial by jury for criminal cases, except impeachment in state of offense. • Treason requires two witnesses in open court and relate to waging war, aiding enemy. • Judicial review of executive and legislative decisions, e.g. indep. agencies implementing laws through rulemaking. • Decision making is regionalized so lack of consistency.

7. Federal Court System • Supreme Court-Supreme law of land • Hears 150 cases/year • Decides what cases it hears • Ct. of App. is appellate court for agency decisions (D.C. Cir) • Can dispose of matters per timeliness, standing, reviewability, and ripeness . • 50% of cases involve admin. law matters. • D.Ct is trial court for de novo review • Usu. Not involved in agency action (except per statute e.g. FTC) • Must hear what comes before it • Federal agency-trier of fact. • Given great deference by courts for expertise

8. Judicial Review Rulemaking • Set aside or remand rule if vague, overbroad, lack standards, exceed authority; • Limited review when discretion involved; • Can usu. challenge process, even if not substance; e.g. policy statement should be subject to notice & comment. Adjudication • Must be a final determination of facts at administrative level. • No right to a jury trial. • Statement of findings & conclusions on material issues; or discretion. • Review based on the record.

9. Ct. of Appeals-Review of Agency Decision making • Standing: Who is the Proper party? Derived from common law, statutory, public interest/economic benefit and is there cognizable injury. • Reviewability: Is there a specific statutory preclusion to judicial review or does it involve exercise of discretion which will bar judicial review ?

10. Ct. of Appeals-Review of Agency Decision making • Ripeness/Exhaustion: Is issue fit for judicial review, Is there a final decision, and Will there be harm if judicial review is denied? • Primary Jurisdiction: Should agency decide matter in first interest because it involves policy issues not passed upon or it is within special expertise of agency?

11. Standing • Conferred by 1) Common law (e.g. property); 2) Statute (e.g. FOIA); and 3) Public Watchdog (e.g. Sierra Club). • Requires: 1) a "distinct and palpable injury," 2) that is "fairly traceable" to warrant a "causal connection between the injury and the challenged conduct," and 3) will likely be redressed by a favorable decision. Lujan • Injury-in-fact for environmental groups: Effects are environmental & aesthetic e.g. reduce property values, radiation. Organizations should have a charter related to the claim they are asserting, e.g. protecting endangered species. State number of members, related activities. • Causation: Court’s remedial powers will redress injury. • Taxpayer standing: 1) Nexus between activity and injury, and that link is derived from status as a taxpayer. • Agency decides scope and nature of participation. • Lujan: Standing can be established via affidavit; Ripeness • Allen: Conflict between IRS and Congress; Court in middle disposed of on procedural grounds. “Not the proper role of the courts to monitor executive actions. Proper role for Congress.”

12. Review QuestionsDoes P have standing? • Should public have standing to sue on behalf of environmental issues on behalf of wildlife? What would P have to show? • Taxpayer challenges a rule that prevents parents from using state education vouchers to have their children attend federal aid to religious schools, claiming that his children are denied access to a quality education because he wants to use state supported vouchers to attend a religious school? • Physicians challenge reg. requiring parental consent for abortions? He has several teenage patients who want abortions without getting parental consent. • Indigents challenge an IRS designation of a state hospital as charitable facility. The hospital is the only hospital in the area but it has no non-emergency services to the poor.

13. Watchdog Groups • Purpose & organizational documents establish scope of focus. • Not-for-profit organizations who can educate, but cannot lobby. • Legal resources to file actions vs agency. • FOIA requests; investigative work; contacts.

14. Reviewability • Strong presumption that agency actions will be reviewable, unless 1) specific statutory preclusion; or 2) action falls within agency discretion. • Must look at specific statutory preclusion via legislative history. • Arises when consider pre-enforcement review. • Government must show no judicial review intended. • Exercise of discretion not to act is usu. not reviewable. Heckler

15. Exceptions • Even where statutory preclusion, may still be able to challenge process or constitutional claim, e.g., improper delegation; or violation of constitutional rights. • Matters re intelligence & military are generally not reviewable. Courts give great deference. So, the decision to remove a homosexual from the CIA would not be reviewable by statute, but could be reviewable as it relates to a violation of equal protection. Webster v. Doe • Federal spending is subject to agency discretion and is not reviewable. But can review whether the agency used proper procedure.

16. Timing of Judicial Review • Ripeness- case or controversy • Finality-Final decision • Exhaustion of remedies-Completed administrative process.

17. Ripeness • Ripeness relates to whether there is a case or controversy. • Test: 1) Fitness of issue for judicial review 2) Hardship in withholding court consideration. Abbott • Used with preenforcement review and finality. • Preenforcement review is ok if 1) legal issue fit, and 2) regulation requires immediate and significant change in conduct for compliance. • If the challenge is based upon APA, and not statute, then must have final action & legal wrong.

18. Finality • Need a final order or rule from ultimate decision maker. • Two-part test: • Completion of the decision making process; and • Action must affect rights or from which legal consequences will flow. • Agency inaction is considered an action. Reviewing court can compel agency action unlawfully withheld or unreasonably denied.

19. Exhausting Administrative Remedies • Complete all administrative reviews and appeals before going to court. • When required by statute, agency rule, or provides a automatic stay pending appeals. • If no appeal process or rights, then no need to exhaust remedies. • Exceptions for non-APA: 1) irreparable injury if no court action; 2) seek equitable relief; 3) show of bias; or futile.

20. Problem for Case Studies • What checks and balances must be in place in the judiciary to maintain ethical standards?

21. Problem for Case Studies • What checks and balances must be in place in the judiciary to maintain ethical standards? • Right to judicial review • Standing to sue

22. Context for Judicial Review • Oversight of legislative acts of Congress; • Interpretation of legislative intent in a statute; • Application of a statute to a class of individuals; • Scope of delegated authority; and • Abuse of power/discretion.

23. Standard of Judicial Review Part 2: If review is proper, what standard to apply?

24. Questions to Ask 1) What type of action is involved? • Agency action vs Legislation • Legislative vs. nonlegislative (APA §§ 553, 556-557) • Adjudication (APA §§554, 555(e), 556-557) 2) What is the basis for the challenge? • Question of law vs. fact • Statutory construction • Enforcement 3) What standard should be applied? • Chevron-Statutory construction • De Novo Review • Substantial Evidence • Arbitrary & Capricious

25. Questions of Law (§706) • Agency’s interpretation of law is wrong (§706 (A)); • Arises where rule or order is unconstitutional (§706 (B); • Agency’s rule is beyond agency’s statutory authority (§706 (C)); • Agency did not follow its own procedures (§706 (D)).

26. Statutory Construction

27. Standards of Judicial Review Substantial Evidence Test Applies to issues of fact in formal rulemaking and adjudication under APA §§ 556-557. • Means that such relevant evidence as a reasonable mind might accept as adequate to support the conclusion. • Fairly deferential; and • Burden to show by a preponderance of evidence.

28. Standards of Judicial Review Arbitrary & Capricious Means willful and unreasonable action without consideration or disregard of facts or without determining principles. • Applies to factual and policy issues in informal and hybrid rulemaking and adjudication. • Apply a “hard look” where assumptions must be stated, process revealed, rejection of alternatives explained and the rationale for the ultimate decision set forth. • Requires some record.

29. Effect of Judicial Review • Uphold agency or legislative action. • Repeal or set aside all or part of improper law or agency rule or decision. • Remand to agency for follow-up action.

30. Abuse of Discretion Sufficiency of Record • Deemed insufficient in informal adjudication where a person has material information that might affect the decision, • Remedy to remand the case to allow the person to supplement the record upon reconsideration. • If no record, then can remand for supplemental information. • Arise if agency has refused to examine data or provide an explanation; reliance on factors not contemplated by Congress; Failed to consider key aspect of problem; explanation runs counter to evidence.

32. Non-APA Matters Applies to 1) , policy statements, 2) interpretative rules, 3) procedural, and 4) where there is a finding of good cause. If no notice is required, then neither will there be comment. Test:: If there is a substantial impact or legally binding, then, it is a legislative rule requiring notice and comment minimally. Should not make new policy, The more specificity in the rule, the more likely legislative. Interpretative rule should not be inconsistent with legislative rule. • An agency can change its interpretation.

33. Problem • Problem: Is there a legally permissible way to restrict executive influence in rulemaking and decision making in adjudication through ex parte communications with agency personnel by OMB per Executive Order 12866; or by the Justice Department in enforcement of laws through executive guidelines, policy statements or interpretative rules that limit or expand the scope of the agency action? • If the subject of such information is not part of the record or disclosed, what impact should it have on judicial review of action rulemaking and/or adjudication?

34. Discussion Questions 1) What are the ways the Executive can informally influence agency decision making? 2) Should the existence of such information or exchanges be required to be made public and included in the record? 3) Are the interests in adjudication and rulemaking similar that the rules governing ex parte communication should be the same? 4) In adjudication, the standard of judicial review for factual issues in formal rulemaking and adjudication or hybrid rulemaking requires substantial evidence; in informal proceedings the standard is arbitrary and capricious. What does this say about the need for on the record decision making?

35. Discussion Questions Would you include or exclude the following information in a rulemaking and adjudication? a) Executive memo clarifies a policy interpretation of how a statute is to be implemented. b) Empirical evidence given to the OMB about the cost of a proposed rule not requested by the agency. c) Contents of a meeting between OMB and a top contributor of PAC to the head of a subcommittee on pending rulemaking that will adversely affect his business. d) Meeting between agency head and OMB regarding their decision in a formal proceeding. e) Confidential internal memorandum revealing wrongdoing by the agency in the decision making process made by an agency whistleblower.