Torts as Regulation The goal of regulation is to allow societally beneficial activity while

prohibiting or least discouraging activities that create net harm to society. Legal system recognizes that tort liability has the effect of deterring conduct

for which a person may be held liable to another TWO things TORT does

o INFORMATION COSTSo EXTERNALITY PROBLEM

Relying on the market to regulate itselfo Advantages

Ability to cater to individual preferenceo Disadvantages

Consumer knowledge Don’t always have adequate information Educating public is expensive People don’t always act rationally when they have the

information. Solution: Learned Hand

Externalities Effect of 3rd parties Solution: Incentives.

o Strict liability makes manufacturers liable—ability to determine minimum costs

Transaction cost Cost of doing business Solution: High cost of business

Inequality of Wealth Gives you more opportunity to engage in business that

reduce transaction costs Solution: Depends on the jury

LIMITS OF TORT AS REGULATIONo Merck v. Garza

In this case P needed to show causation basically he needed to find support from studies that supported that decedent died from Vioxx.

General Causation Capable of harm to GENERAL population and other possible eliminated

Specific Causation Substance caused particular P’s injuryo AGENT ORANGE CASE

Court decided to spread damages amongst the 100 exposed to Agent orange (expected people with cancer was 1000)

Legislative ProcessBicameralism and Presentment Article 1 Sect. 7

o House Power more centralized; More efficient; Those seeking reelection always win

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o Senate Consensus required; individual members have more autonomy which makes it more difficult to pass legislation; Turnover rate is moderate.

oHow a bill becomes a law

o Ideao Bill Writteno Introduced in either house

o Goes to House debated and voted on House LFooro Approved bill sent to Senate

Senate committee may mark up Reported favorable to floor Bill is debated

Filibuster OR Cloiture Senate approve Bill

o Different Version madeby conference committeeo Unified bill debated and voted on by both house

o Bill is signed/Vetoed by President/Unsigned becomes lawo 2/3 both house needed override President Veto

Theories of legislative processProceduralist Theories

At each stage in the legislative process a proposal can be changed/halted/ coalitions are formed and opportunities for logrolling, strategic behavior and deliberation are presented.

Known as VETO-GATES: Road blocks in the legislative process. (Can be result of Constitutional provisions, formally adopted by legislative body and norms and practices that are informal)

o Constitutional prohibitions are most durable Filibuster

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Statutory InterpretationDESCRIPTION

PurposivismThe traditional method. Identify the purpose of the statute and interpret it in a way that best effectuates that purpose. Emphasize the importance of democratic law making. Tries to find the goal of statute and assumes that legislature are reasonable and rational actors. Purposivists look to statutes title, current events, legislative history, and social values

Textualism Believes that judges must hew closely to the meaning of the clear statutory text even when the result contradicts the statutes apparent purpose. When the meaning is clear language trumps general purpose. Believe that statutes should be construed in terms of each words ordinary meaning in the given context. Textualists use dictionaries as aids to interprets statutes plain meaning.

IntentionalismUnder intentionalist approach if court is dace with an unclear statute they look to the likely intent of legislature based on the precise issue before the court. Look to what was the intent of those legislators who voted for the statute. Look to legislative history some legislative history is more important than others are.

ANALYSIS(NO FACTS FROM HYPO HERE)

All three approaches have benefits in interpreting a statute their way, however each one has faults.

Pros of Textualism The words of the statute are given more deference. Textualist believe that the statute reflects the legislative process so if the statute is not perfect than there is a reason it is not written perfect. Unless an absurd result would be created as Riggs v. Palmer or US v. Kirby. Textualist believe that under texualists approach judges would not be able to create their own interpretations. Further the legislative process is messy and contains a lot of bargaining. The legislative history is susceptible to manipulation and contains no coherent consensus amongst the legislature. Textualist that giving a plain meaning to the text will force Congress to clarify statutes—penalty default rule. Canons don’t always work.

Critiques of TextualismTextualist never look to se if there is a consensus on the matter. When statutes interpreted textually they are more likely to be overturned. Textualist overlook that Congress does not even pay close attention to the exact words of the statute. Also overlook the effectiveness penalty default

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rule because Congress is not always aware also it would fail given the complexities and difficulties of the legislative process. Can manipulate the text by interpreting the text in a way that they would like.Further the text can be vulnerable to different interpretations. Cons to canons was illustrated in Gustafson v. Alloyd in which the majority focused on all the terms surrounding the word “communication” which would be an application of noscitur a sociss, but the dissent viewed prospectus as more of a catchall of all the terms listed. Thus this case illustrates Llewelyn critique that every canon has an opposite canon that would bring about a different result. Another problem is that complex statutes are usually written by different people. Lack of guidelines and a judge would just apply the canon that would give him the outcome he is seeking-

Pros of PurposvismLanguage is ambiguous. Cannons of interpretation can be constraining and just give the appearance of objectivity to hide judges preferences. Do a the country a dsissrvice when we needlessly ignore persuasive evidence of Congress’ actual purpose and require it to take the time to revisit the matter. May have clear purpose but fails to adopt language thay reflects it. Statutes that viewed by Textualists are more likely to be overridden.Holy Trinity—When text and purpose of Congress are in conflict; Purpose trumps letter of law.

Critiques of PurposivismStatutes don’t always have specific purpose. The level of generality and relevancy can differ. Statutes are vectors not rays and can have counter point. Question of “ to what ends” statutes don’t mean to achieve a goals at all cost since that would problematic. The legislative process is not coherent. Legislators have independent goals and often strike deals to make that happen. They have constituents.to appease. They enact words not a purpose. It’s not legitimate to enact the aims or goals of legislature because words were chosen for a reason and it is not the judges role to figure out intent. West Virgina v. Casey

Pros of Intentionalism Reliable medium for members of congress. Congress delegated them for a reason a and we should give them credence. Legislators often don’t read every detail as such legislative history act as a way to clarify the intent. Textualism replaces the language in which congress thought.

Critiques of intentionalism

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Hard to find intent No one main intent, diverse intentsMarquis de Condorcet’s (A,B,C,) shows that it is hard to aggregate individual preferences into a collective choice, this was expanded into the “social choice theory” (however a counter to this is that this could strengthen looking at legislative history)no coherent intent legislative history

Legislative History Interest Groups—induce legislators to create favorable legislative

history to achieve private-interest goals would not be able to persuade the entire Congress to endorse

Constituents—could favor sponsors/big corporations. Could favor constituents from district from district.

o Personal interests rather than public interests Has not gone through the bicameral passage by the

house/Senate/Presidento Manipulation—legisiaotrs adding language to affect the courts

interpretation of the statute that would favor their cause (Continental Can Company v. Chicago Truck Drivers.

Not considering the bargain that took place No one main intent, diverse intents

Cannons of interpretation

Semantic Cannons Ordinary meaning: Unless there is evidence that the wrods have

acquired specialized meaning –use plain ordinary meaningo Problems; Ordinary meaning to whom.

Presumption of statutory consistency - that words have the same meaning throughout a statute (West v. Casey)

o Problem then you are limited. Words carry different meaning depending on what you are trying to say—Nitpicky

Presumption against surplusage - Courts use words with a specific purpose and every word has a given meaning. (

Presumption against redundancy Interpret to avoid redundancy (Gustafson (dissent)

Noscitur a sociis - Words known by association. (Context clues) Problem; Not always accurate.

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Ejusdem generis , catchall shall be construed to cover those things with similar attributes to the particularly listed words. (Birds of a feather flock together)

o Problems: Extraccting from the terms the particular characteristic or quality limits the general purpose.

o McBoyle Airplane as vehicle Expression Uniu s Expression of one thing implies exclusion of another.

Cons of Canons Cons to canons was illustrated in Gustafson v. Alloyd in which the

majority focused on all the terms surrounding the word “communication” which would be an application of noscitur a sociss, but the dissent viewed prospectus as more of a catchall of all the terms listed. Thus this case illustrates Llewelyn critique that every canon has an opposite canon that would bring about a different result

Another problem is that complex statutes are usually written by different people

Lack of guidelines and a judge would just apply the canon that would give him the outcome he is seeking

Substantive CannonsA substantive canon is a judicial presumption in favor or against a particular substantive outcome. It is possible to conceive of such canons as representing generic approximations of congressional intent:

Constitutional Avoidance Constitutional avoidance (Classical)

o Avoid interpretations where court would have to strike down statute as unconstitutional

Constitutional Question (Modern)o Avoid court having to answer constitutional question.

How plausible is the non-problematic interpretation ? “fairly possible”

How serious or difficult is the constitutional issue?o Pros of constitutional avoidance

Deference to congress—Deference to congress. Legislature might prefer less optimal interpretation instead

of declaring statue unconstitutional. Presumption that congress does not intend to pass unconstitutional laws.--Avoids unnecessary striking down statutes

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Encourages legislative deliberation and transparency—Scalia likes this point.

o Cons might involve judges twisting it in ways to avoid a

unconstitutional interpretation Courts will construe statutes in favor of a certain

substantive result unless statutes not only indicates contrary result bit does so with greater clarity than would ordinarily require.

problem is when to invoke it one argument is that it does not foster judicial restraint ,

but expands the degree to which courts may draw on constitutional considerations to limit the scope or application of congressional statutes

o Example; NRLB v. Catholic Bishop

(Catholic school employers part of a union—no affirmative expression—Constitutional avoidance acts a clear expression

Dissent: Ejudesm cannon. (Covers everyone not explicitly excluded-congress could have done that.)

Clear Statement RuleThis canon requires a clear statement before a court will construe a federal statute as interfering with fundamental aspects of state sovereignty. The clear statement rule is designed to protect state governments from federal interference.

i. Federalism (Protecting state sovereignty and autonomy) – need to honor the wishes of the states –

1. Protecting states from undue federal interference with core state activities or functions (Gregory v. Ashcroft: ADA laws in relation to federal judge age limit in MO)

a. If Congress intends to alter the usual constitutional balance between states and the federal government, it must make its intention to do so unmistakably clear in the language of the statute. (Gregory)

b. No metric for deciding what “clear” means – disagree over what most people would regard as clear

c. Reasons for maintaining Federalism:

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i. Responsiveness by the state to the diverse needs of citizens

ii. Participation is easier at the smaller state level

iii. State governments are more able and willing to innovate

iv. Strong states can prevent Federal Power Grabs

2. When in conflict, however, the Federal laws take priority over the state laws – this can be done expressly or impliedly

Rule of Lenity(Bass, McBoyle, discussed in Moskal/Smith)

Clear statement rule, but thought to be more legitimate – Constitution didn’t require clarity, but it is required to protect due process

Rationale:o Wants people to have fair notice of what crimes are o Legislatures should define criminal policy (semi-nondelegation

doctrine)o More of a moral obligation than giving real notice to criminals

Issue of how ambiguous a statute must be? If the Justices are arguing, should it be invoked?

Similar canons for tax liability and provision of government benefitsIF there is a dispute side with the defendant.

APPLICATIONApply Textualism

Plain meaning structure. Canons of Interpretation that might be used under a textualist

approach (only if relevant to problem—use cannons when there are two or more interpretations)

Apply Purposivism Find purpose Use legislative history (if applicable)

Apply intentionlism

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Regulatory ProcessDescription

APA (Administrative Procedure Act) enacted in 1946 laying out the basic structure and procedures and subjects agencies to legal and political controls (kind of like a Constitution).

Formal Rulemakingtends to be trial type procedures. It is governed by an elaborate set of procedures laid out in sections 556 and 557 of the APA. It is an adversarial hearing with administrative law judge, special process for internal appeals, formal findings of fact and conclusions of law. It is pretty close to a litigation proceeding. An exception is that in rulemaking an agency can adopt procedures to how they will allow evidence (might allow written arguments but not oral testimony). Formal takes forever (9 years to change content of peanut butter).

Informal Rulemakingaka notice and comment rulemaking governed by section 553 of the APA. There are three steps:

Agency publishes notice of proposed rulemaking (NPRM) in federal registrar:

o Time/Place/Nature of public proceeding. o Reference to legal authority. o Terms or substance of proposed legislation.

Agency provides public with opportunity to comment Agency publishes an explanation of the rule in a concise general

statement of basis and purpose. 553 Exceptions 553

o Policy statements and interpretative rules not subject Good Cause & Procedural Rules

ANALYSIS

1st step is determine if agency action is question of a rule or adjudication,

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Rulemaking (Rule): 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.EX. similar to what legislators do, making new law, new policyEX. Ratemaking need Formal Agreement: future rates(electricity), how much company can charge and how much the customer has to payAdjudication (Order): deals with particular parties, resolves disputes, and things in the past, (typically applying existing law or policy to facts)

o Issue final decisions (injunctions, pay fine): affirmative, negative, injunctive, fines any authoritative agency action other than a rule

Did the agency provide adequate notice?

Was there opportunity for Meaningful comment?

Did interest parties have a meaningful opportunity to Interested parties must have sufficiently clear idea of the rule the agency is considering—

Courts have argued that the notice requirement must be read in conjunction with the requirement that provide an opportunity for comment, plus a sense that the purpose of the notice is thwarted if it is insufficiently specific about what the agency is considering. Section 553 c says that the opportunity to participate in the rule making through submission of written, data, views, or arguments (even outside parties must have meaningful opportunity to comment, which means evidentiary basis for proposal, including any scientific studies or data relied on.)

Did agency provide data in which it relied on in order to promulagte?

o Failure disclose scientific data relied upon would suppress meaningful comment and is akin to rejecting comment altogether.

o the court may invalidate any agency action that is arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law. The court should strike down as arbitrary and capricious any agency action that fails to consider all relevant factors. If studies are not disclosed, parties will

o US v. Nova Scotia Food Products Corp . held that a failure to disclose to interested persons the

data relied upon in making the decision was erroneous. The burden is on the agency to articulate why the rule

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should apply to a large and diverse class (fish)-no reason to conceal the data

Concise General Statement of Basis and Purpose:o must (2)RESPOND TO SIGNIFICANT COMMENTS that raise

questions of “cogent materiality”o Rule: statement show the court what major policy issues were

and why the agency reacted to them as it dido Agencies risk reversal under judicial review for arbitrariness if

they fail to respond adequate to any non-frivolous, non-repetitive complaint

Resulted in lengthy and detailed statements (not concise/general)

o Ct may adopt an interim rule, but they should answer the important comments

o E-Comments are representative of interests affected

Was the final rule in line with the previous rule? Is the final rule a Logical Outgrowth?

o TWO PART TEST: Is the proposed rule in CHARACTER WITH THE ORIGINAL SCHEME. and A LOGICAL OUTGROWTH

o Agency only required to give description of rule NOT required to state actual proposed rule If the agency conducts new study and there are no fundamental changes to the agency’s initial proposal then DOES NOT have to provide opportunity to comment.

Can parties anticipate that the change was possible thus should have reasonably filed their comments on the subject

o If agency’ final rule deviates substantially from the from the NOPR.

o Ex: Chocolate Manufacturing Assoc. v. Blocko The agency needs to tell the public what the background is of the

rule they are proposing and the changes they wish to make. Often times they will provide a list of specific topics in which things they are considering changing and of things that are off limits (chocolate milk case). Only the things up for debate can be altered via this rule making process. That is to say, you cannot say X is not up for debate then alter it. If enough new information comes up about a particular area, then you may need to have a second round. This is not an infinite regress, but only happens when the new rule fails the logical outgrowth test.

as long as the final rule is within the general subject identified by the NOPR notice is ok. Burden to

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comment is imposed on those whose interest might conceivably be affected.

Was the agency required to RENOTICE or Provide Supplemental notice?

o WAS THERE NEW EVIDENCE Agency not prohibited from adding new supporting

documents. Would otherwise Drag out the process if every time there would be new comment period and provide notice. EX: Chocolate Manufacturing Ass. V. BLock

WAS INFO PUBLICLY AVAILABLE THE ISSUE IS NARROW VS BROAD PRO: Up to commenters to find information— would

drag out process if agency has to continually renotice every time there are new comments. Makes agencies reluctant to make changes—Make changes that are vague and more general in order preserve flexibility

CON: Cannot promulgate rule based on information agency has sole knowledge basis. if purpose is to have notice and comment work effectively comment should be focused. Not fair to interest parties to comb through scientific literature to figure out what the agency relied on. Reliable and ubiquitous- where exactly is it publicly available and how much research is necessary to actually find the info. Agency has be certain information can be found

Publicly available could mean different things. WAS IT A TRADE SECRET EXPERTISE

Agency doesn’t have expertise and is relying on someone else’s study. Too much information to focus. Putting onus on commentator interms of finding information can become expensive. ( one entity vs. multiple parties)

ADVANCE NOTICE AND KNOWLEDGE.o Should have known that it was a possibility

agency could adopt some other policy. Was it within the scope of adopted rule

Theory- societal consensus

Rule making vs Adjudication

Adjudication Formal adjudication (§§ 556-57, 554)

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o Most adjudication = formal (very much like trial) – trial like adversarial hearings

o Witnesses and cross examinations Informal adjudication (Not specified in the APA)

o Not entirely governed by any procedural law; some generic APA provisions apply; also subject to statutes/agency regulations/Constitution

Chenery- established that an agency may announce a new policy decision in an adjudicative order rather than through rule-making.

Sec in Chenery basically creates a rule in the adjudicatory process. Court says that Chenery is allowed to do this because there needs to be some flexibility.

Policy by adjudication Pros and Cons: Cons: Notice, interference with reliance, rule of law Pros: Avoiding taking advantage of loopholes, availability of

information (new data after rule made); avoid delay (rule-making takes a long time), maybe a dire need to act quickly

NLRB v. Bell Aerospace: Established that an agency can change long standing policy by

adjudication but the use of adjudication is subject to review of abuse of discretion

Said that an agency could overturn a precedent in an adjudication. That an agency an create new policies in an adjudication as long as it is not an abuse of discretion or a violation of the Act.

Bell Aerospace balancing test: The petitioner who is challenging the agency must show:

Reasonableness of reliance (was there a long standing policy) The substantiality of the reliance (if you would be left the same than

there is no difference) Under the D.C. Circuit it is just fairness and equity so long standing

policy are more likely upheld. (Bell Aerospace is the LAW NOW)

APPLICATIONApply facts to case.Was there adequate notice?Was the agency supply the data they used?

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Judicial Oversight

Section 706(A)(2) sets out a baseline standard for overturning agency action but provides little guidance on how the courts should determine the nature of the challenged agency action. Prior to the passage of the APA, the courts were very deferential to agency action. The courts would require the challenging the party to carry the burden of proof to show that the agency’s action was arbitraryP. 719

Judicial Review under APA is broken down into Procedural Review:Procedural requirements that the courts will review

Court determines whether the agencies acted consistently with statutes

Acted consistently with the constitution Decision in formal proceedings must be supported by substantial

evidence in the recordAgency decisions must not be arbitrary and capricious

If the agency acted with the procedural requirements and the court would decide if decision was crazy Because special interest had some sort of influence in the agencies.

Judge Leventhal created the “hard look test” the court must look at the agencies reasons carefully and decide if the

agencies made their decisions on reasoned decisions.

Does it deal with the agencies interpretation of statute? Chevron Applies

Decides because the text and history are silent on the administrative agency’s interpretation, than the court should defer to the agency’s interpretation.

Pros of deferring to the agency:o They should refer to the agency because they are the experts

they know the implications, the costs, and they know the ramifications, the agency is good at that stuff.

o People in the agencies are more accountable, whereas judges are there for a while. The agency is more accountable to value decisions President and Congress can have oversight of agencies. Whereas the courts don’t really have someone over them. The courts are less accountable.

o Another argument is that you have 12 circuit courts all of which can make a decision on these cases so there would be less uniformity.

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Step One, is the silent or ambiguous? (Tobacoo case) Has congress directly spoken to the precise question at issue?

o Ct gives no deference to the agency's interpretation when it decides under step one

To determine clarity, ct should use traditional tools of statutory interpretation: dictionary definitions, canons(use context)

o Textualism, dictionary definitions, canons, context, ordinary term and not terms of art.

o Purposivist, purpose of statute, will usually find statute is ambiguous, and have to proceed to step 2

o Intentionalist, use legislative history to find out what the legislators knew the statute to mean

How Clear does the Statute have to be? (Sweet Home Case) o Canons contradict, dictionary v common language, under this

view the agency should win every case

Step Two, if statute is not clear, meaning its ambiguous, or if the statute is silent, the ct must defer to agencies interpretation. Was agencies interpretation was reasonable or permissible

Some courts just defer to agency (Rust v. Sullivan the abortion case, where court just defered to the agency without analyzing the reasoning the agency used and if the agency had considered all relevant factors)

o or some courts use the “hard look” and ask for reasoning, and reasoned decision making. State Farm is a good example where the court did not let the agency slide and

Determine if RM was arbitrary and capriciouso State Farm (Arbitrary and Capricious Case)- Court decides that

the agency failed to provide an adequate basis and explanation for rescinding the passive restraint requirement

Court says arbitrary and capricious if: Failed to consider plausible alternative

o comments (comments are sufficient in saying that is something hat we should think about or even consider.

o those alternatives that are sufficiently known/obvious

Relevant Factors- We look to the relevant factors in which what the statute says about the relevant statutes in how to act.

Factual Predicates of the Action

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o There must be some relation to the facts to the record basically tie the finding to the record under the arbitrary and capricious review.

o the agency must tie its findings or factual predictions to data in the record

Clear Error of Judgment (policy) o Court not substitute its judgment with that of

the agency( agency are the experts) o The agency is less vulnerable to political issues

like the courto Courts rarely do this howevero some courts do say something when

something is just so absurd and that they think agency is just considering something for a constituent such as a major tax break, or doing something for a supporter of the President, etc

Don’t need step 2 because of arbitrary and capricious is a catchall phrase. - depends on what is REASONABLE

Rarely do cts overturn step 2 o EXCEPT: Utilities companies - Statute says local utilities "have to

lease things that are necessary." o Statute was ambiguous on what "necessary" meant, but ct said

legislation meant something that was less than "everything is necessary," which the Agency said everything was necessary. Ct ruled that the Agency's definition was unreasonable.

o POLICY: Justifications: Agency expertise

Agency can evaluate trade-offs better Congress intended for Agencies to interpret statutes,

agency has the authority to fill gaps with force of law. Political accountability National Coordination (in interpretation of federal law Counter argument

Counter or Marbury, bc it is not allowing the ct adopt its own interpretation of the law. BUT-->

o Delegation: this gap in the law is seen as an expressed delegation from legislators to the Agency to fill.

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