Securities and Exchange Commission v. Chenery Corp

Brief Fact Summary. The Respondents were officers, directors and controlling shareholders of the Federal Water Service Corporation (Corporation), a holding company registered under the Public Utility Holding Company Act (Act). The Respondents brought this proceeding to review an order of the Securities Exchange Commission (SEC) approving a plan of reorganization of their Corporation, but penalizing Respondents for stock purchases made while the reorganization was pending.

Synopsis of Rule of Law. The usual remedy when an agency decision cannot be supported by the grounds advanced by the agency is to remand it back to the agency for further consideration, rather than reverse the decision outright. If there are grounds the agency could have relied upon but didn’t, courts usually give the agency the option of relying on those grounds. The rationale for an agency’s decision must be clear to the court before it can consider whether the reasons are adequate. Continue reading “Securities and Exchange Commission v. Chenery Corp”

SEC v. Chenery Corp

Brief Fact Summary. This case was before the Court a second time. The first time, the Court held that a reorganization order of the Securities and Exchange Commission (SEC) could not be sustained on the grounds on which the agency acted. On remand, the SEC reexamined the problem and reached the same result. This case examined whether the Commission’s action was proper in light of the principles established in the Court’s prior decision.

Synopsis of Rule of Law. Chenery I strongly suggested that the SEC could only create a new principle of law through rulemaking, and this case (Chenery II) flatly rejected that suggestion, holding, “the choice made between proceeding by general rule of by individual, ad hoc litigation is one that lies primarily in the informed discretion of the administrative agency.” Continue reading “SEC v. Chenery Corp”

Professionals and Patients for Customized Care v. Shalala

Brief Fact Summary. Professionals and Patients for Customized Care (Plaintiff- Appellant) contended that the District Court erred in its determination that the Food and Drug Administration (FDA) Compliance Policy Guide (Guide) was not a substantive rule.

Synopsis of Rule of Law. The APA requires agencies to afford interested parties notice and an opportunity to comment to proposed substantive rules. Continue reading “Professionals and Patients for Customized Care v. Shalala”

Syncor International Corp. v. Shalala

Brief Fact Summary. Syncor International Corporation (Appellant) appealed from the District Court decision that the 1995 “Notice” issued by the Food and Drug Administration (FDA) regarding positron emission tomography (PET) was a “non- substantive” rule not subject to notice and comment rulemaking.

Synopsis of Rule of Law. APA Section:553(b)(3)(A) exempts from notice and comment interpretive rules or general statements of policy. Continue reading “Syncor International Corp. v. Shalala”

Citizens to Preserve Overton Park, Inc. v. Volpe

Brief Fact Summary. Two statutes enacted by Congress to curb destruction of the country’s natural resources prohibited the Secretary of Transportation (Secretary) from authorizing the use of federal funds to finance the construction of highways through public parks if there was a “feasible and prudent” alternative route. The Secretary approved route I-40 being built through Overton Park, and a group of citizens and conservation groups (Petitioners) contended that the Secretary violated the statutes.

Synopsis of Rule of Law. APA Section:706 required the court to decide: 1] whether the Secretary acted within the scope of his authority; 2] whether the choice made was “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law;” and 3] whether the Secretary’s action followed the necessary procedural requirements. Continue reading “Citizens to Preserve Overton Park, Inc. v. Volpe”

Pension Benefit Guarantee Corp. v. LTV Corp

Brief Fact Summary. Pension Benefit Guarantee Corporation (PBGC) is a wholly owned United States Government Corporation, modeled after the Federal Deposit Insurance Corporation. PBGC administers and enforces Title IV of the Employee Retirement Income Security Act (ERISA), including a mandatory Government insurance program that protects the pension benefits of American workers. PBGC issued a Notice of Restoration to LTV Corporation’s plan, and LTV refused to comply.

Synopsis of Rule of Law. The APA Section:706 prohibition against arbitrary and capricious decision-making by agencies should not be applied too broadly. Continue reading “Pension Benefit Guarantee Corp. v. LTV Corp”

Connecticut Light and Power Co. v. NRC

Brief Fact Summary. Connecticut Light and Power Company (Connecticut Light) challenged a decision by the Nuclear Regulatory Commission (NRC) to adopt a more stringent fire protection program for nuclear power plants in service before January 1, 1979, claiming NRC’s rulemaking procedure was inadequate.

Synopsis of Rule of Law. The Administrative Procedure Act (APA) requires agencies to give notice and an opportunity to comment to proposed rules. Continue reading “Connecticut Light and Power Co. v. NRC”

Air Transport Association of America v. Department of Transportation

Brief Fact Summary. The Federal Aviation Administration (FAA) established Penalty Rules that set forth a schedule of civil penalties for violations of the Federal Aviation Act (Act) without first giving notice and an opportunity to comment.

Synopsis of Rule of Law. Section:553(b)(A) of the Administrative Procedure Act (APA) provides an exception to the notice and opportunity to comment exception for “rules of agency organization, procedure or practice.” Continue reading “Air Transport Association of America v. Department of Transportation”

City of West Chicago, Illinois v. NRC

Brief Fact Summary. This appeal by the City of West Chicago (City) challenged a Nuclear Regulatory Commission (NRC) order granting to Kerr-McGee Corporation (KM) a license amendment authorizing it to demolish certain buildings at its facility and accept for onsite storage contaminated soil from offsite locations.

Synopsis of Rule of Law. The Atomic Energy Act of 1954 (Act), Section:189(a), requires that the NRC grant a “hearing” if requested “in any proceeding under this chapter, for granting, suspending, revoking, or amending of any license or permit.” This was interpreted to require an informal hearing because clear congressional intent must be apparent to trigger the formal, on-the-record hearing requirement of the Administrative Procedure Act. Continue reading “City of West Chicago, Illinois v. NRC”

Chemical Waste Management, Inc. v. United States E.P.A

Brief Fact Summary. Chemical Waste Management and Waste Management of North America (Petitioners) sought review of the Environmental Protection Agency (EPA) regulations that establish informal procedures for administrative hearings concerning the issuance of corrective action orders under Section:3008(h) of the Resource Conservation and Recovery Act (RCRA), as modified by Section:6928(h) of the Hazardous and Solid Waste Amendments of 1984.

Synopsis of Rule of Law. The Court employed the analysis set forth by the Supreme Court of the United States in Chevron for judicial review of an agency’s interpretation of a statute under its administration. First, ask whether Congress has directly spoken to the issue, and, if so, “give effect to the unambiguously expressed intent of Congress. If the statute is silent or ambiguous, then ask “whether the agency’s answer is based on a permissible construction of the statute,” and, if so, defer to the agency’s interpretation. Continue reading “Chemical Waste Management, Inc. v. United States E.P.A”

Commodity Futures Trading Commission v. Schor

Brief Fact Summary. The Commodity Futures Trading Commission (CFTC) issued a regulation permitting itself to adjudicate counterclaims brought by brokers in reparations proceedings. Schor brought suit against his broker, who then filed a counterclaim against him. Schor then challenged the CFTC’s authority to adjudicate the counterclaim as violating Article III of the United States Constitution.

Synopsis of Rule of Law. Article III, Section:1 of the Constitution provides that the “judicial power of the United States shall be vested in one Supreme Court and in such inferior Courts as the Congress may from time to time ordain and establish.” However, Courts must apply the principle that “practical attention to substance rather than doctrinal reliance on formal categories should inform application of Article III.” Continue reading “Commodity Futures Trading Commission v. Schor”

Withrow v. Larkin

Brief Fact Summary. A physician in the State of Wisconsin, Withrow (Appellee), challenged the Wisconsin statutes which authorized the State’s Examining Board (Board) to investigate physicians and temporarily suspend their license.
Synopsis of Rule of Law. Vesting the authority to investigate and adjudicate in the same agency does not violate due process. Continue reading “Withrow v. Larkin”

United States v. Florida East Coast Ry

Brief Fact Summary. Two railroad companies (Appellees) brought this action in the District Court for the Middle District of Florida to set aside the incentive per diem rates established by the Interstate Commerce Commission (Appellant) in a rulemaking proceeding.

Synopsis of Rule of Law. The Administrative Procedure Act (APA) states that none of its provisions limit or repeal additional requirements imposed by other statutes or law. Even though the Commission was not required to comply with Section:Section:556 and 557 of the APA, it was required to comply with the “hearing” requirement of the Interstate Commerce Act (Act). Continue reading “United States v. Florida East Coast Ry”

Mistretta v. United States

Brief Fact Summary. Congress adopted the Sentencing Reform Act of 1984 (Act) in an effort to address the widespread disparity in the scope and extent of punishment in criminal cases in the United States. The Act created the United States Sentencing Commission devise guidelines for sentencing, and John M. Mistretta (Petitioner) challenged this as an unconstitutional delegation.

Synopsis of Rule of Law. The “intelligible principle test” applies to congressional delegations. As long as the act by Congress includes an intelligible principle to which the delegee is directed to conform, the legislative action is not a forbidden delegation of legislative power. The Supreme Court of the United States has ruled it “constitutionally sufficient if Congress clearly delineates the general policy, the public agency which it to apply it, and the boundaries of this delegated authority.” Continue reading “Mistretta v. United States”

Immigration & Naturalization Service v. Chadha

Brief Fact Summary. Chadha remained unlawfully in the United States past the expiration of his nonimmigrant student visa and faced the possibility of deportation. The Immigration Judge ordered that his deportation be suspended, pursuant to Section:244(a)(1) of the Immigration and Nationality Act (Act). The suspension was reported to Congress, as required by the Act, and the House of Representatives unilaterally vetoed the suspension.

Synopsis of Rule of Law. Article I of the United States Constitution requires that every Bill be passed by both the Senate and the House of Representatives, and then presented to the President of the United States for approval. If the President disapproves, the Bill may be repassed by 2/3 of the Senate and the House of Representatives. Continue reading “Immigration & Naturalization Service v. Chadha”

Buckley v. Valeo

Brief Fact Summary. The Federal Election Campaign Act of 1971 (Act), as amended in 1974, created an eight-member Federal Election Commission (Commission) and vested in it wide-ranging rulemaking and enforcement powers for administering the Act. A separation of powers challenge was brought that Congress was precluded from vesting in itself the authority to appoint members of the Commission.

Synopsis of Rule of Law. Article II, Section:2, cl. 2, of the Constitution of the United States, the Appointment Clause, provides: “The President shall nominate, and by and with the Advice and Consent of the Senate, shall appoint Ambassadors, other public Ministers and Consuls, Judges of the Supreme Court, and all other Officers of the United States, whose Appointments are not herein otherwise provided for, and which shall be established by Law: but the Congress may by Law vest the Appointment of such inferior Officers, as they think proper, in the President alone, in the Courts of Law, or in the Heads of Department.” Continue reading “Buckley v. Valeo”

Panama Refining Co. v. Ryan

Brief Fact Summary. Congress made a delegation of power to the President of the United States under Section:9(c) of the National Industrial Recovery Act which exceeded constitutional limits.

Synopsis of Rule of Law. There are limits of delegation which there is no constitutional authority to transcend. Although the Constitution has never been regarded as denying to Congress the necessary resources of flexibility and practicality, Congress is forbidden to delegate the essential legislative functions which it is vested by Article I, Section:1 and Article I, Section:8 of the United States Constitution. Continue reading “Panama Refining Co. v. Ryan”

A.L.A. Schechter Poultry Corp. v. United States

Brief Fact Summary. A.L.A. Schechter Poultry Corporation (Petitioners) were convicted in the District Court of the United States for the Eastern District of New York for violating the Live Poultry Code, promulgated under Section:3 of the National Industrial Recovery Act.

Synopsis of Rule of Law. Congress is not permitted to abdicate or transfer to others the essential legislative functions with which it is vested by Article I of the Constitution of the United States. Continue reading “A.L.A. Schechter Poultry Corp. v. United States”

Londoner v. Denver

Brief Fact Summary. The plaintiffs challenged a tax which was assessed against their real property by the city council over plaintiffs’ written objections, without affording them a hearing.

Synopsis of Rule of Law. Due process of law as guaranteed by the Fourteenth Amendment to the Constitution of the United States requires that, where the legislature of a State authorizes a subordinate body to levy taxes, the taxpayer shall have an opportunity to be heard before the tax becomes irrevocably fixed. The taxpayer must have notice, either personal, by publication, or by a law fixing the time and place of the hearing. Continue reading “Londoner v. Denver”

Yesler Terrace Community v. Cisneros

Brief Fact Summary. The Department of Housing and Urban Development (HUD) determined that public housing authorities in the State of Washington could evict tenants accused of criminal activity without an informal grievance hearing, based on the premise that state court eviction procedures satisfied the elements of due process. Yesler Terrace Community Council and Marla Davidson (Plaintiffs) brought suit, contending that HUD’s determination was invalid because it was made without giving public housing tenants notice and an opportunity to comment.

Synopsis of Rule of Law. The Administrative Procedure Act rulemaking requirements do not apply to agency rules relating to public property, loans, grants, benefits or contracts. However, pursuant to 24 C.F.R. Section:10.1, HUD voluntarily adopted requirements for notice-and-comment rulemaking in these situations. A rule is: “The whole or part of an agency statement of general or particular applicability and future effect designed to implement, interpret, or prescribe law or policy or describing the organization, procedure, or practice requirements of an agency.” An adjudication (which results in an order) is virtually an agency action that is not rulemaking.” Continue reading “Yesler Terrace Community v. Cisneros”