Administrative Law – An Overview

Background

Agriculture is one of the most heavily regulated components of the U.S. economy, with virtually every aspect of agricultural production, processing, distribution, and marketing regulated in some manner by the federal, state, or local governments.

Farmers participating in farm commodity or federal crop insurance programs must comply with certain federal regulations. For example, a producer or retail outlet selling “organic” products must comply with the strictures of the National Organic Program (NOP) regulations, and in some situations, compliance with the NOP could trigger further state and federal requirements.  Further, a company seeking to test a new item of agricultural biotechnology must comply with applicable cross-agency regulations that implicate the USDA’s Animal and Plant Health Inspection Service, the Environmental Protection Agency, and the Food and Drug Administration.  Additionally, the operator of an animal feeding operation may have to comply with local zoning regulations or obtain a National Pollution Discharge Elimination System Permit pursuant to the Clean Water Act. These are but a few examples of the extent to which U.S. agriculture is regulated.

The extensive regulation of agricultural production, processing, distribution, and marketing is primarily conducted through administrative agencies whose authority to act has been delegated by either Congress or state legislatures. Thus, administrative law, the body of law protecting citizens from actions or inaction on the part of administrative agencies, is one of the most important aspects of agricultural and food law. In fact, it would be impossible to understand the concept of agricultural law without recognizing administrative law’s important role in agriculture. The close relationship between agriculture and government agencies makes administrative law an important tool to ensure fairness and openness between individuals and the government. Administrative law defines and limits the powers of agencies based on principles in the Constitution and statutes as well as providing redress to individuals wronged by administrative agencies.

Following constitutional strictures, courts limit the congressional delegation of legislative and judicial authority to agencies. Congress may delegate legislative authority to agencies­—as long as Congress also provides standards and guidelines to limit an agency’s discretion. Provided there is a mechanism for judicial review, agencies are also permitted judicial authority.  Another limit on agency judicial authority is the procedural due process requirement: when a protected interest is at stake, adequate notice and a hearing are required before that interest may be impaired. However, the amount of notice and type of hearing required are flexible and dependent on the particular circumstances of the case and agency involved.

The same statutes that create agencies also limit their authority to act. Agencies are created through delegations of power, so they are not permitted to exceed the scope of their delegated authority. Agency actions must follow the contours of the statutes that create them and that they administer.

Administrative Procedure Act

The Administrative Procedure Act (APA), 5 U.S.C. §§ 500-596, 701-706, 801-808, provides the framework for most federal administrative law and is the main statutory source for administrative law when dealing with federal agencies. Many states have similar versions of the statute that can be used when dealing with state agencies.

The APA contains the Freedom of Information Act (FOIA), 7 U.S.C. § 552, and the Privacy Act, 7 U.S.C. § 552a. FOIA requires agencies to disclose records and information upon written request. The requirement of disclosure is limited by nine exemptions as well as a special law enforcement exclusion. These restrictions protect agency records that contain information about matters of national security, confidential personal information, and certain law enforcement records. The Privacy Act regulates how government agencies use and disseminate personal information.

The APA also supplies the procedures for agency rulemaking and adjudication. Rulemaking is the process that agencies use to implement their delegated legislative duties, and adjudication is the process that agencies use to conduct their delegated judicial duties. The APA subdivides these processes into either a formal or informal procedure. Formal rulemaking or adjudication uses a procedure much like a trial- with notice and hearing requirements.  Due to their expense and duration, Congress does not normally mandate the use of formal procedures.  Informal adjudication procedures are not described in the APA, so agencies are left to create their own processes, also called notice and comment rulemaking. In notice and comment rulemaking, agencies publish proposed rules in the Federal Register, allow time for comments by the public, and after the required time and consideration of any public comment, publishes the final rules in the Federal Register as well as an explanation addressing public comments.  They are published at least thirty days prior to their effective date.

Agencies promulgate several different types of rules under the APA framework. These include legislative rules, interpretive rules, general statements of policy, and rules of agency organization, procedure, or practice. The APA does not use the term “legislative rule;” however, legal commentators use this term to describe rules that have the force and effect of law and are properly promulgated under statutory authority and the APA procedures. These rules are legally binding. Interpretive rules do not themselves impact legal rights; they simply explain or clarify how an agency considers current law. General statements of policy are not binding on either the private parties or the agency but are statements that identify how the agency intends to act in the future. Rules of agency organization, procedure, and practice are known as “procedural rules.” These rules impact agency operation without significantly and directly impacting the rights of private parties.

The APA also provides for “Congressional Review.” No major rule may go into effect until sixty days after the agency submits the proposed rule to both houses of Congress. Congress may then adopt a joint resolution of disapproval subject to Presidential approval. If signed by the President, the law would have the effect of vetoing the proposed agency rule. Also authorized are procedures for agencies to create negotiated rules.

The APA provides for judicial review of agency actions by waiving sovereign immunity. It does not, however, provide jurisdiction. Some basis for court jurisdiction must be found elsewhere, such as in the Hobbs Administrative Review Act, 28 U.S.C. §§ 2342-2351, or federal question jurisdiction in 28 U.S.C. § 1331. The United States Supreme Court has also limited relief under the APA to declaratory judgments, injunctions, or statute-specific relief. The Court does not allow recovery of monetary damages under the APA. Monetary claims greater than $10,000.00 may be brought against the federal government in the United States Court of Federal Claims through the “big” Tucker Act 28 U.S.C. § 1491. Claims less than $10,000.00 may be brought in district courts or the United States Court of Federal Claims through the “little” Tucker Act 28 U.S.C. § 1346. Tort claims against the government, if allowed, must be brought through the Federal Tort Claims Act, 28 U.S.C. §§ 1346(b), 2671-2680.

Judicial review of agency action is not available under the APA when the applicable statute precludes review or if the agency’s action is, by law, discretionary. In addition, courts will not review an agency action until the agency has taken an action. The courts limit themselves to a role of judicial review, and they will not hear an issue until the agency itself has resolved it. Courts also require that private parties exhaust all available administrative remedies before seeking judicial review of agency action. Exhaustion of administrative remedies is not required if it would be futile or if an adequate administrative remedy does not exist.

The APA defines the scope of review and allows courts to set aside an agency action only if it is arbitrary, capricious, an abuse of discretion, not in accordance with law, contrary to the constitution, exceeds jurisdiction or authority, violates required procedure, or not supported by substantial evidence. Judicial review is also normally confined to the administrative record, and only the issues raised before the agency may be brought before the court.

Equal Access to Justice Act

The Equal Access to Justice Act (EAJA), 28 U.S.C. § 2412, may permit the recovery of attorney fees to prevailing private parties. The applicant’s net worth must be less than a certain dollar amount, and the government’s position must not have been reasonable.

Judicial review may also leave the plaintiff open to claims by the government that the plaintiff has violated the False Claims Act, 31 U.S.C. §§ 3729-3733. This act allows the government to recover statutory penalties and treble damages from persons who knowingly bring a false claim for payment against the government.

National Appeals Division

In 2017, The United States Department of Agriculture (“USDA”) created the Office of Hearings and Appeals (“OHA”) to consolidate three different entities of the USDA: the National Appeals Division (“NAD”), the Office of the Administrative Law Judges (“OALJ”), and the Office of the Judicial Officer (“OJO”). Each entity conducts separate proceedings under its respective legal authority.

The United States Department of Agriculture (“USDA”) uses the National Appeals Division (“NAD”) to handle the appeals made by private parties for some adverse agency decisions within the USDA, and the NAD director reports directly to the Secretary of Agriculture. The NAD Director’s duties may not be delegated to any person or office within the USDA. NAD generally handles appeals that deal with participation in, benefits under, compliance with, and payments from USDA programs. NAD does not review decisions in which alternate appeal proceedings are defined, such as Packers and Stockyards Act enforcement, Board of Contract Appeals cases, and tenant grievances under the Rural Housing Service.

Prior to filing a NAD appeal, the program participant may seek and, in some cases may be required to seek, an informal appeal before entering the NAD process. In the Farm Service Agency, this requires appealing up the chain of authority. Decisions made by office personnel may be appealed to the county committee, and county committee decisions may be appealed to the state committee.

The NAD process begins when a program participant requests an appeal from an adverse agency decision. After the request is filed, a hearing date is set. This hearing is usually a live evidentiary hearing held by a hearing officer. After the hearing, either party may request review by the NAD Director. If no request is made, the hearing officer’s decision becomes final.

Review by the NAD Director is on the record, and the Director reviews the hearing officer’s decision to ensure that it is supported by substantial evidence. After this review, a second Director review is available, primarily for the correction of errors and not for changing determinations or opinions. After Director review, an appellant may seek relief from the Secretary of Agriculture.

The Secretary of Agriculture retains discretion to grant relief from adverse agency decisions to program participants even after the participant loses a final appeal in the NAD process. Any decision by the Secretary regarding this type of relief is purely discretionary and cannot be appealed.

After a final determination in the NAD process, the program participant may seek judicial review in federal district court. The judicial review follows the guidelines described in the APA, including the exhaustion of administrative remedies. A final NAD determination either from a hearing officer or the NAD Director will usually suffice as an exhaustion of remedies. Case law allows NAD appeals that contain claims for money damages to be reviewed in district court, even though the APA does not waive immunity for money damage claims itself.

Other Hearing Procedures

Other federal agencies, including parts of the USDA not eligible for NAD hearings, have developed their own special appeal procedures. Within the USDA, disciplinary procedures exist that are identified in the USDA’s Uniform Rules of Practice for Disciplinary Proceedings, 7 C.F.R. §§ 1.130-1.151. These rules govern proceedings that stem from alleged violations of agricultural statutes. These disciplinary proceedings may differ from other administrative appeals because they may be instituted by third parties that file a complaint with the USDA rather than an appeal from an adverse agency decision. This complaint is investigated by the USDA, and if the facts merit a disciplinary proceeding, one is initiated by the USDA against the offending persons. These USDA disciplinary proceedings are usually handled by one of the other OHA entities, the Office of the Administrative Law Judges (OALJ). Appeals from the OALJ decisions move to the Office of the Judicial Officer (OJO). The OJO has the authority to issue final decisions in adjudicatory proceedings within the USDA.

Other acts have their own unique and detailed types of proceedings, such as the reparations proceedings contained in the Perishable Agricultural Commodities Act, 7 U.S.C. §§ 499a-499t. The Packers and Stockyards Act, 7 U.S.C. §§ 181-231, also contains its own types of administrative hearings for enforcement of the statute.

The Contract Disputes Act of 1978, 41 U.S.C. §§ 7101-7109, also creates an independent system to resolve disputes between the government and contractors. It covers nearly all contracts with the government, both express and implied. The first step in a dispute involves a decision by a contracting officer. The contracting officer’s decision may be appealed to a board of contract appeals within an agency. The USDA has established such a board. However, rather than appeal to the board, the contractor may instead file a claim in the U.S. Court of Federal Claims (CFC). Either party may then appeal the board or the CFC decision to the U.S. Court of Appeals for the Federal Circuit.

Anyone seeking to appeal an adverse agency decision or involved in an administrative hearing with a federal agency must carefully review the regulations regarding the proper appeal or hearing procedure to ensure that the appeal, hearing, or the chance for judicial review are not lost.