1st quiz Fall 2015 - 10/1/2015

Administrative Law
Professor Raful
Exam # 71334

Tims Tannery

The main issue facing the regulation of the waters of the Stinky River is
whether the nature of the agency decision is such that due process or the
statutory hearing provision would apply and require some form of hearing.
Two Supreme Court cases highlight the struggle presented when an
administrative agency requires autonomy to regulate resulting in private
entities alleging deprivation of their right to due process. In Londoner v. City
& County of Denver, a statute empowered the Denver board of public works
to improve city streets and assess the cost to those who owned land abutting
the improvements. The court ruled that the landowners were deprived of
due process despite the state statute giving the board the authority to
proceed with the improvements. In Bi-Metallic Investment Co. v. State Board
of Equalizations, a very different verdict was reached by the Supreme Court
when they ruled that the Colorado State Board of Equalization and the
Colorado Tax Commission had the autonomy to raise land value assessments
by 40% despite depriving the landowners of a hearing so that they could
voice their opposition to the boards actions. The Supreme Court in BiMetallic distinguished its decision from the ruling they gave in Londoner,
when they reasoned that There must be a limit to individual argument in
such matters if government is to go on.

The opinions by the Supreme Court in Londoner and Bi-Metallic have

helped shape the process by which administrative agencies regulate. An
administrative agency has the option to proceed with their regulatory
agenda via either adjudication, or by rulemaking. Generally, rulemaking
gives the agencies more control over future actions made by either
individuals or entities, and adjudication is a way to exert their authority over
past actions. Adjudicatory actions can also help to shape precedent which
will also regulate future actions, but in general it is a tool to help correct past
actions by individuals or entities. The Supreme Court has ruled that the
choice made between proceeding by general rule or by individual, ad hoc
litigation is one that lies primarily in the informed discretion of the
administrative agency. NLRB v. Bell Aerospace Co., 416 U.S. 267 (1974).
The EPA has abided by the standard, statutorily authorized notice and
comment rulemaking procedures. Although there were no formal hearings,
the public was given notice of the proposed rulemaking and there was a
designated time period where comments were submitted for the EPAs
consideration. Because the Supreme Court, in upholding the legislation
enacted by congress, has given the discretion to the administrative agency,
the EPA in this instance has the power to decide to advance via general
rulemaking in an effort to regulate all future actions on the Stinky River.
In United States v. Storer Broadcasting Co., the Supreme Court faced a
similar circumstance where a company was suing for the right to a hearing
so that they could argue the merits of circumventing a rule to further the

public interest. The Court ruled that the FCC had the authority to make a
rule and that rulemaking in general was necessary for the conduct of its
business. The Court rejected Storers argument alleging it was being
deprived of due process.
Similarly, Tims Tannery is suing the EPA stating that they are being
deprived of due process via a rule that would involve costly reforms to Tims
Tannery and therefore inflict hardship on their business. If given the
opportunity to be heard in court, Tims Tannery would have the opportunity
to argue the merits of circumventing this rule for the public interest. The
reasons the court gave for their ruling in Storer can be applied to Tims
Tannery. The Supreme Court recognized that the FCC was responsible for
creating and implementing rules that would guide broadcast companies to
keep the market fair and competitive in future dealings. The fact that one
company disagreed and was adversely affected by a rule that the FCC
implemented was not cause for an individual hearing. Because the
administrative agency had the proper authority to implement a rule and the
corporation was undisputedly in violation of that rule, there was no case to
be heard and Storer would have to abide by the FCCs authority. Similarly,
Tims Tannery has no case in this instance because the EPA is implementing
proper authority to make a rule protecting the environment and the Stinky
River. Ruling otherwise would cause the EPA to get caught litigating every
instance where a company feels that it wants to circumvent the rules that
have been properly enacted.

Tims Tannery nonetheless has a valid argument that there is a

statutory provision that requires the EPA to grant the company a full
adjudicatory hearing before imposing these limits on the companys
discharges. This is consistent with the Supreme Courts ruling in Londoner,
where they sided with an individuals right to due process despite a state
statute authorizing an administrative agency to proceed without a public
hearing.
The Supreme Court has weighed in on statutory provisions requiring
public hearings and again they have sided with administrative agencies and
upheld their rulemaking authority. In Heckler v. Campbell, the Supreme
Court stated that a statutory hearing right does not bar the Secretary from
relying on rulemaking to resolve certain classes of issues. The Court has
recognized that even where an agencys enabling statute expressly requires
it to hold a hearing, the agency may rely on its rulemaking authority to
determine issues that do not require continually to re-litigate issues that may
be established fairly and efficiently in a single rulemaking proceeding.
Heckler v. Campbell, 461 U.S. 458 (1983). Furthermore, the Supreme Court
sided with the administrative agency in Bi-Metallic when they distinguished
between a smaller group of individuals affected on a local level versus an
agency requiring the ability to cast a broader rule, without resorting to
adjudication, to guide future behavior.

Tims Tannery will argue that, since they are the only business that is
affected by the EPAs rule, the administrative agencys actions are arbitrary
and capricious and adjudicatory in nature.
The EPA is responsible for making rules that are followed by all
individuals and corporations alike. The present case simply concerns one
business that is directly affected by a rule that has been established. The
fact that there are not more businesses affected is irrelevant since the rule is
meant to guide all future behavior. The possibility exists that more
businesses, similar to Tims Tannery, may sooner or later establish
themselves on the Stinky River and when they do their procedures will be
subject to the same requirements as Tims Tannery.
Because the EPA was acting within its administrative authority by
choosing to proceed with rulemaking to regulate the emissions into the
Stinky River, the EPA was justified in enforcing the regulation on Tims
Tannery. Because the Supreme Court has ruled that administrative agencies
have the authority to make and enforce rules without the need for individual
adjudication in all cases, there will be no need for them to hold a hearing for
Tims Tannery.